Mar 31, 2023
The Board of Directors of your Company are pleased to present the 62nd Annual Report, with audited financial statements (standalone and consolidated) for the financial year ended on 31st March 2023.
1. Summary - Financial Results (Standalone and Consolidated)
INR in mn |
||||
Year Ended |
Year Ended |
|||
31st March 2023 Standalone |
31st March 2022 Standalone |
31st March 2023 Consolidated |
31st March 2022 Consolidated |
|
Revenue from Operations |
43,049.2 |
36,658.9 |
43,049.2 |
36,658.9 |
Other Income |
518.7 |
346.2 |
518.7 |
346.2 |
Total Income |
43,567.9 |
37,005.1 |
43,567.9 |
37,005.1 |
Operating Expenditure |
35,570.2 |
31,124.5 |
35,570.2 |
31,124.5 |
Depreciation |
668.4 |
571.0 |
668.4 |
571.0 |
Profit before Tax |
7,329.3 |
5,309.6 |
7,329.3 |
5,309.6 |
Share of Net Profit/(loss) of Associate |
- |
- |
0.9 |
(1.7) |
Provision for Taxation |
2,081.4 |
1,358.3 |
2,081.4 |
1,358.3 |
Profit after Tax |
5,247.9 |
3,951.3 |
5,248.8 |
3,949.6 |
Other Comprehensive Income |
25 |
(13.5) |
25 |
(13.5) |
Total Comprehensive Income for the |
5,272.9 |
3,937.8 |
5,273.8 |
3,937.8 |
Period |
The Standalone Revenue from operations of the Company for the year ended on 31st March 2023, stood at INR 43,049.2 mn compared to INR 36,658.9 mn in the previous year. The Company''s Standalone Profit before Tax for the year under review was INR 7,329.3 mn compared to INR 5,309.6 mn in the previous year.
The Standalone Profit after Tax for this period was INR 5,247.9 mn, compared to INR 3,951.3 mn during the previous year.
The Company incurred a capital expenditure of INR 1,084.1 mn during the year.
3. Standalone and Consolidated Financial Statements
The standalone and consolidated financial statements of the Company for FY 2022-23 are prepared in compliance with the applicable provisions of the Companies Act, 2013 (âthe Act'') including Indian Accounting Standards specified under Section 133 of the Act. The audited standalone and consolidated Financial Statements together with the Auditors'' Report thereon form parts of the Annual Report of FY 2022-23.
Pursuant to Section 129(3) of the Act, a statement containing the salient features of the Financial Statements of the associate company in the
prescribed Form AOC-1 forms a part of the Annual Report as Annexure E.
The Financial Statements of the associate company shall be made available to Members on request through email and are also available on the website of the Company, which can be accessed at https:// www.skf.com/in under the âInvestors'' section.
4. Material changes and commitments if any, affecting the financial position of the Company
There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and up to the date of this report.
There was no change in the nature of the business of the Company.
The Registered Office of the Company, which was earlier situated at âMGM Building, Netaji Subhash Road, Mumbai, Maharashtra 400002'' in the jurisdiction of Registrar of Companies, Mumbai, was shifted to âChinchwad, Pune 411 033'' vide application made by the Company on 09th Jun e 2022 an d approval from the office of Registrar of Companies, Pune on 15th July 2022.
5. State of Companyâs Affairs
The Company empowers global enterprises with its latest technology for the next decade today. The Company''s core businesses include manufacturing of bearings and their components in India. SKF India Limited is an affiliate of the Sweden-based SKF Group, which was founded in 1907. SKF Group started its operations in India in 1923 and continues to provide industry-leading automotive and industrial engineered solutions through its five technologycentric platforms: bearings and units, seals, mechatronics, lubrication solutions and services. Over the years, the Company has evolved from being a pioneer ball bearing manufacturing company to a knowledge-driven engineering company helping customers achieve sustainable and competitive business excellence.
SKF''s solutions provide sustainable ways for companies across the automotive and industrial sectors to achieve breakthroughs in friction reduction, energy efficiency, and equipment longevity and reliability. With a strong commitment to research-based innovation, SKF India offers customised value-added solutions that integrate all its five technology platforms.
The state of affairs of the Company is presented as part of the Management Discussion and Analysis Report forming part of this Annual Report as Annexure A.
The Group has also reached a milestone of completing 100 years of its business operations in India.
The Board of Directors decided to retain the entire amount of profit for FY 2022-23 in the profit and loss account. No amount was transferred to the General Reserves of the Company.
The dividend recommended is in accordance with the Dividend Distribution Policy of the Company. For FY 2022-23, the Company has declared dividend as the final dividend of INR 40/- per equity share of INR 10/- each to its shareholders.
FY 2022-23 was an exceptional year, with efficient planning and robust operational performance. The Board of Directors at their meeting held on 17th May 2023 has recommended the payment of INR 40/-per equity share of the face value of INR 10/- each as the final dividend for the financial year ended
31st March 2023, compared to INR 14.50/- per equity share for the preceding financial year ended 31st March 2022. The pay-out is expected to be INR 1,977.5 mn, the payment of the final dividend is subject to the approval of the shareholders of the Company at the ensuing 62nd Annual General Meeting (AGM) of the Company to be held on 2nd August 2023.
The record date is Thursday , 29th June 2023, for the purpose of determining the eligibility of the shareholders for payment of the dividend for the financial year ended 31st March 2023.
As per the Income Tax Act, 1961 (the Act), as amended by the Finance Act, 2020, dividends paid or distributed by a company after 1st April 2020 shall be taxable in the hands of the shareholders.
The Company shall, accordingly, make the payment of the final dividend after deduction of tax at source. Pursuant to Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âSEBI LODR''), the Dividend Distribution Policy approved by the Board is available on the Company''s website: https://www. skf.com/binaries/pub12/Images/0901d196809a6abb-Dividend-Distribution-Policy-SKF-India-Feb-2017_ tcm_12-526433.pdf
Policy is also part of the Annual Report as
Annexure L.
During this financial year, the unclaimed dividend amount pertaining to the dividend for FY 201415 was transferred to the Investor Education and Protection Fund (IEPF).
8. Share Capital Structure and Listing of Shares
The paid-up share capital of the Company as of 31st March 2023, is INR 494.38 mn - divided into 49,437,963 equity shares of INR 10/- each. The Company''s equity shares are listed on the BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE).
During the year under review, there was no change in the share capital of the Company from the last financial year.
The shares are actively traded on the BSE and the NSE and have not been suspended from trading. The Company has not issued any shares with differential voting rights or sweat equity shares during FY 2022-23. As of 31st March 2023, none of the Directors of the Company hold any instruments convertible into equity shares of the Company.
Your Directors are pleased to share that during the year under review, your Company received numerous awards and felicitations from distinguished bodies for achievements in different fields that re-emphasise SKF''s strong position in the Indian manufacturing industry. Some of the achievements are:
⢠SKF India was awarded âTowards quality performance with sustenance without major claims'' at the Yamaha Virtual Supplier Conference on 28th April 2022, under the âQuality'' category. SKF India has met and sustained its quality targets and requirements with no cases of a warranty claim or performance nonconformance. Yamaha Motors considers SKF as a reliable partner and the award is a testimony and a significant milestone in SKF India''s journey towards operational excellence and our uncompromising commitment to customer-centricity.
⢠Also pleased to inform you that Bajaj Auto has recognized SKF''s efforts for 2022-23 & awarded with prestigious âGOLD Award'' during BAVA Supplier Convention at Pantnagar on 31st January 2023
⢠Winner (1st prize) - Manufacturing Company of the year award at 10th Annual Manufacturing Today Conference & Award-2022 for Pune, Haridwar and Bangalore factory
⢠Gold Award at 47th International Convention on Quality Control Circles on 22nd November 2022 in Jakarta, Indonesia, to TRB T1 & Roller team
⢠Gold award at 11th CII National Poka-yoke Competition-2022 for TRB T2 team
⢠Silver award at 11th CII National Poka-yoke Competition-2022 for DGBB Ch-6 & Maintenance team
⢠1st position at 17th Continuous Improvement (Kaizen) Competition 2022 for DGBB Ch-11, Maintenance and Heat Treatment team
⢠Gold award in 55th Mini Convention organized by QCFI, Pune chapter to factory resetting team, maintenance team and HUB team
⢠Jury Award in restorative category in Challenger''s trophy competition organized by CII, Bengaluru team at national level to factory resetting team
⢠Jury Award in restorative category in Champion''s trophy competition organized by CII, Bengaluru team at national level to HUB1.1 team
⢠Jury Award in Muda category in Challenger''s trophy competition organized by CII, Bengaluru team at national level to TRB T2 team
⢠Jury Award in Poka Yoke category in Challenger''s trophy competition organized by CII, Bengaluru team at national level to DGBB Ch-6 team
⢠Jury Award in Poka Yoke category in Challenger''s trophy competition organized by CII, Bengaluru team at national level to TRB T6 team
⢠Champions of Champion award in Champion''s trophy competition organized by CII, Bengaluru team at national level to HT team
⢠Silver award in 64th National Convention organized by IIIE (Indian Institution of Industrial Engineering) at Pune to factory resetting team
⢠Excellence Award in 36th NCQC-2022 organized by NCQC to maintenance team
⢠Par excellence award to HUB1.2 team in 36th NCQC-2022 organized by NCQC
⢠Par excellence award to factory resetting team in 36th NCQC-2022 organized by NCQC
⢠Platinum award to maintenance team in 3M Competition organized by CII, Bengaluru on 23rd February 2023
⢠Gold award to factory resetting team in 3M Competition organized by CII, Bengaluru on 23rd February 2023
⢠Platinum award to factory resetting team in CII organized - SMED-Quick changeover on 24th February 2023
⢠Gold award to Pune roller team for presenting their case study in Safety Case Study presentation competition organized by QCFI, Pune in Mar-23
⢠Gold award to Pune factory resetting team for presenting their case study in Safety Case Study presentation competition organized by QCFI, Pune in Mar-23
⢠Gold award to Pune maintenance team for presenting their case study in Safety Case Study presentation competition organized by QCFI, Pune in Mar-23
⢠Silver award to Pune maintenance team for presenting their case study in Safety Case Study presentation competition organized by QCFI, Pune in Mar-23
⢠Bronze award to Haridwar manufacturing team in 9th kaizen competition organized by QCFI, Haridwar chapter.
10. Managementâs Discussion and Analysis and Outlook
The Management''s Discussion and Analysis (MDA) Report giving the details on review of operations, performance, opportunities, and outlook of the Company, as required under Corporate Governance guidelines, has also been incorporated as a separate section forming a part of the Annual Report as Annexure-A.
Our corporate governance practices are a reflection of our value system encompassing our culture, policies and relationships with our stakeholders. Integrity and transparency are key to our corporate governance practices to ensure that we gain and retain the trust of our stakeholders at all times. Corporate governance is about maximising shareholder value legally, ethically, and sustainably. Our Corporate Governance Report for FY 2022-23 forms part of this Annual Report. During the year under review, the Company complied with the provisions relating to corporate governance as provided under the SEBI (Listing Obligations Disclosure Requirement) Regulation (âSEBI LODRâ). The Corporate Governance Report, together with a certificate from the Company''s Statutory Auditors confirming the compliance is provided in the Report on Corporate Governance, which forms part of the Annual Report as Annexure-B.
At SKF India, the Board exercises its fiduciary responsibilities in the widest sense of the term. Our disclosures seek to attain the best practices in international corporate governance. Pay-offs from strong governance practices have been in the sphere of valuations, stakeholders'' confidence, market capitalisation and recognition from different stakeholders.
12. Directors and Key Managerial Personnela. Changes in Directors:
During FY 2022-23, based on the recommendation of Nomination and Remuneration Committee (âNRCâ) of the Company, the Board of Directors have appointed Mr. David Leif Henning Johansson (DIN: 09651955) and Mr. Karl Robin Joakim Landholm (DIN: 09651911) as Directors on the Board with effect from 28th
June 2022, and shareholders appointed both as Directors at 61st Annual General Meeting held on 27th July 2022, liable to retire by rotation.
Mr. David Leif Henning Johansson and Mr. Karl Robin Joakim Landholm are not debarred or disqualified from holding the office of Director by virtue of any SEBI order or any other statutory authority as required under the Circular dated 20th June 2018, issued by the BSE and NSE. Pursuant to the provisions of section 152(6) of the Companies Act, 2023, Mr. David Leif Henning Johansson is liable to retire by rotation as he has been the longest in office since his last appointment on 28th June 2022. Mr. David Leif Henning Johansson being eligible has offered himself for re-appointment as a Director of the Company. The resolution for re-appointment of Mr. David Leif Henning Johansson forms the part of notice convening Annual General Meeting.
Mr. Aldo Cedrone (DIN: 08455073), NonExecutive and Non-Independent Director and Ms. Ingrid Viktoria Van Camp (DIN: 08945782), Non-Executive and Non-Independent Director, have resigned as Director of the Company with effect from 28th June 2022, due to their other engagements. The Board placed on record the appreciation for the valuable services, support and guidance extended by Mr. Aldo Cedrone and Ms. Ingrid Viktoria Van Camp during their tenure as Directors of the Company.
The tenure of Mr. Manish Bhatnagar (DIN: 08148320) as the Managing Director of the Company is concluding on 15th August 2023. It is proposed to appoint him as the Managing Director of the Company for further period of 5 years as recommended by the Nomination and Remuneration and Audit Committee. The resolution for the approval for appointment of Mr. Manish Bhatnagar as the Managing Director of the Company along with the Explanatory Statement forms the part of the Notice convening the Annual General Meeting.
b. Changes in Key Managerial Personnel:
Mr. Ashish Saraf was appointed as Chief Financial Officer (CFO) of the Company with effect from 11th May 2022 as recommended by the Nomination and Remuneration and Audit Committee pursuant to resignation of Mr. Anurag Bhagania as a Chief Financial Officer of the Company.
During the year under review, apart from the above-stated facts, there was no change in the composition of the Board of Directors and Key Managerial Personnel of the Company.
13. Declaration From Independent Directors
Pursuant to the provisions of Section 149 of the Act, the Independent Directors of the Company, Mr. Gopal Subramanyam (DIN: 06684319) and Ms. Anu Wakhlu (DIN: 00122052), have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) and 25(8) of the SEBI LODR. They are also in compliance with Rule 6 (1) and (2) of the Companies (Appointment & Qualifications of Directors) Rules, 2014. There has been no change in the circumstances affecting their status as Independent Directors of the Company.
The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act as well as the Code of Conduct for Directors and Senior Management Personnel.
All other Directors of the Company have also provided declarations on the fact that they are not debarred from holding the office of Director by virtue of any SEBI order or any other statutory authority as required under the Circular dated 20th June 2018, issued by the BSE and NSE.
The Board of Directors of the Company is of the opinion that the Independent Directors possess a high level of integrity, expertise, and experience, which are beneficial to the Company and its stakeholders.
14. Contribution Of Independent Directors To The Growth Of The Company
The Board of Directors of the Company strategically comprises of Independent Directors from different domains which adds value to the Company. Every Independent Director with his/her expertise and integrity has earned a vast experience and reputation in the industry. Our Independent Directors are experts in Sector Specific knowledge, Finance, Marketing, Strategic Thinking, Regulatory Laws, and Leadership skills as mentioned in CG Report. These domains are integral part of every business and therefore the collective expertise of these board members ensure that we are up to the mark with the global leaders in terms of ethics, corporate governance, best industry practices, transparency and technology. The online proficiency self-assessment test of Independent
Directors conducted by Indian Institute of Corporate Affairs ensures that the skills and knowledge is appropriate and beneficial to the Company. All the Independent Directors have successfully passed the test.
In terms of Section 203 of the Act, the following are the Key Managerial Personnel (KMPs) of the Company as 31st March 2023:
⢠Mr. Manish Bhatnagar, Managing Director
⢠Mr. Shailesh Sharma, Whole-time Director
⢠Mr. Ashish Saraf, Chief Financial Officer
⢠Mr. Ranjan Kumar, Company Secretary and Compliance Officer.
16. Board and Its Committee Meetings
Regular meetings of the Board and its Committees are held to discuss and decide on various policies, strategies, financial matters, and other businesses. The schedule of the Board/Committee Meetings to be held in the forthcoming financial year (2023-24) is circulated to the Directors in advance to enable them to plan their schedule for effective participation in the meetings. Due to business exigencies, the Board has also been approving several proposals by circulation from time to time.
During FY 2022-23, 4 (four) meetings of the Board of Directors were held. The details of meetings of the Board and Committees such as the Audit Committee, Nomination and Remuneration Committee, Stakeholder Relationship Committee, Risk Management Committee and Corporate Social Responsibility Committee, are included in the Corporate Governance Report, which is a part of this document Annexure B.
Details of Committee is also available on website of the Company https://www.skf.com/in/investors/ operating-committees
The Board of Directors has carried out an annual evaluation of its own performance, the Board Committees, and individual directors pursuant to the provisions of the Act and SEBI LODR as amended from time to time.
The process followed for Board evaluation includes:
i) Feedback is sought from each Director about their views on the performance of the Board (as
a whole) / Committees / Independent Directors / Chairman / self-assessments, covering various relevant criteria such as degree of fulfilment of key responsibilities, effectiveness of Board processes, participation levels, culture strategy, risk management, Corporate Governance and responsibilities to various Committees, etc.
ii) The Nomination and Remuneration Committee (NRC) then discusses the above feedback received from various Directors, including the assessment of individual directors by the Chairman.
iii) The Independent Directors (post their meeting) share their collective feedback on the performance of the Board with the Board Members.
iv) Significant highlights, learnings and action points arising out of the evaluation are presented to the Board and action plans are drawn up wherever required.
The Directors express their satisfaction with the entire evaluation process.
The details of the training and familiarisation programme are provided in the Corporate Governance Report. Further, at the time of the appointment of an Independent Director, the Company issues a formal letter of appointment outlining his/her role, function, duties and responsibilities. The format of the letter of appointment is available on our website.
Over the years, the Company has developed a robust familiarisation process for the Independent Directors with respect to their roles and responsibilities, way ahead of the prescription of the regulatory provisions. The process has been aligned with the requirements under the Act and other related regulations. This process inter alia includes providing an overview of the industry, the Company''s business model, the risks and opportunities, the new products, innovations, sustainability measures, digitisation measures, etc. Details of the Familiarisation Programme for Independent Directors are explained in the Corporate Governance Report and is also available on the Company''s website at https://www.skf.com/binaries/ pub12/Images/0901d196809a6abc-Familiarisation-Programme-for-IDs_tcm_12-526435.pdf
19. Appointment of Directors and Remuneration Policy
The Company has in place a policy for the remuneration of Directors, Key Managerial Personnel and Senior Management Team as well as a well-defined criterion for the selection of candidates for appointment to the said positions. The Policy broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to the Executive and Non-executive Directors, Key Managerial Personnel and Senior Management Team.
The Appointment of Directors and Remuneration Policy is available on the Company''s website at https://cdn. skfmediahub.skf.com/api/public/0901d19680cbc6e6/ pdf_preview_medium/0901d19680cbc6e6_pdf_preview_ medium.pdf
The criteria for the selection of candidates for the above positions cover various factors and attributes, which are considered by the Nomination & Remuneration Committee and the Board of Directors while selecting candidates. The policy on remuneration of Directors, Key Managerial Personnel and Senior Management Team is given in this Report.
The Audit Committee constituted in terms of the requirements of the Section 177 of Companies Act, 2013 and Regulation 18 of SEBI (Listing Obligation and Disclosure Requirements), 2015, it comprises of three (3) members.
The Committee is chaired by Ms. Anu Wakhlu (Independent Woman Director). The other Members of the Committee are Mr. Gopal Subramanyam (Independent Director) and Mr. David Leif Henning Johansson (Non-Executive, Nonindependent Director). Two-third members of Committee are Independent Directors.
The Audit Committee was re-constituted due to the resignation of Ms. Ingrid Viktoria Van Camp (Non-Executive, Non-independent Director) with effect from 28th June 2022. Mr. David Leif Henning Johansson was inducted as a Member of the Audit Committee in place of Ms. Ingrid Viktoria Van Camp with effect from 28th June 2022.
Details of the roles and responsibilities of the Audit Committee, the particulars of meetings held and attendance of the Members at such meetings are given in the Report on Corporate Governance, which forms a part of the Annual Report.
During the year under review, the recommendations made by the Audit Committee were accepted by the Board.
21. Corporate Social Responsibility Committee
The Corporate Social Responsibility Committee constituted in terms of the requirements of the Section 135 of Companies Act, 2013, comprises of three (3) members. The Committee is chaired by Mr. Manish Bhatnagar (Managing Director). The other Members of the Committee are Mr. Gopal Subramanyam (Independent Director) and Ms. Anu Wakhlu (Independent Director). Two - third members of Committee are of Independent Directors.
Details of the roles and responsibilities of the Corporate Social Responsibilities Committee, the particulars of meetings held and attendance of the Members at such meetings are given in the Report on Corporate Governance, which forms a part of the Annual Report as Annexure-C.
CSR Policy is also disclosed on the website of the Company at https://cdn.skfmediahub.skf. com/api/public/0901d19680cb2f37/pdf_preview_ medium/0901d19680cb2f37_pdf_preview_medium. pdf
During the year under review, the recommendations made by the Corporate Social Responsibilities Committee were accepted by the Board.
22. Corporate Social Responsibility
We aim to build more capable, inclusive, and resilient communities through a shared approach that takes into cognisance the specific needs of each community. Our social strategy aligns with our core business strategy to empower communities and provide opportunities for us to create common value across our footprint.
The Company has been actively engaged in various CSR activities over the years, which cover the entire gamut of social welfare/upliftment activities across the nation. The thrust areas under CSR inter-alia included education, employment enhancing vocational skills, empowerment of women, socially/ economically backward groups, etc., which have always been built on the Company''s values of âSKF Care'' built on four pillars of âBusiness care, Employee care, Environment care and Community care''.
The Corporate Social Responsibility (CSR) Committee reviews and monitors the CSR projects and expenditures undertaken by the Company. The brief outline of the CSR Policy of the Company and the initiatives undertaken by the Company under the CSR Policy during the year under review are set out in the Annual Report on CSR activities & CFO Certificate - annexed as Annexure-C of this Report.
Total unspent CSR amount for the Financial Year under review is INR Nil-, the Company will spend the said unspent amount within prescribed time lines as per Companies Act, 2013 and rules made there under.
Risk is inherent in all businesses and the key to success is to anticipate risks and deploy an appropriate framework to manage them. In today''s world, the external and internal environment is changing at an ever-increasing pace and which, in turn, requires businesses to not only manage the existing risks but anticipate emerging risks and deploy mitigating strategies on a continuous basis. Embracing the upside risk opportunities combined with deploying the mitigation strategies are key to success.
The Risk Management Committee (RMC) receives regular insights through its corporate governance structure, which has enabled and empowered its management, on risk exposures faced by the organisation, thereby enabling it to provide inputs on prompt actions to be taken as well as monitor the actions taken. The Board is also updated regularly on the risk assessment and mitigation procedures.
The Company''s governance structure has well-defined roles and responsibilities, which enable and empower the Management to identify, assess and leverage business opportunities and manage risks effectively. There is also a comprehensive framework for strategic planning, implementation, and performance monitoring of the business plan, which inter alia includes a well-structured Enterprise Risk Management (ERM) process.
The risks that fall under the purview of high likelihood and high impact are identified as key risks. This structured process of identifying risks supports the Senior Management Team in strategic decisionmaking and in the development of detailed mitigation plans. The identified risks are then integrated into the Company''s planning cycle, which is a rolling process to, inter alia, periodically review the movement of the risks and the effectiveness of the mitigation plan. Your Company has constituted a Risk Management Committee, which oversees risk management activities. The Company''s risk management initiatives are periodically updated to the Audit Committee and Board of the Company. The Company''s assets continue to be adequately insured against the risk
of fire, riot, earthquake, terrorism and the risk of loss of profits also stands insured among other things. In addition, adequate coverage has been taken to cover product liability, public liability and Director''s and officer liability. Also, all the employees are covered against the risk of loss of life, hospitalisation and personal accident.
The Company has adopted a Risk Management Policy in accordance with the provisions of the Act and Regulation 21 of the SEBI LODR. Risk Management Policy is hosted on website of the Company https://cdn.skfmediahub.skf.com/api/ public/094128b54400ccfb/pdf_preview_ medium/094128b54400ccfb_pdf_preview_medium.pdf A section on risk management practices of the Company forms a part of the chapter on âManagement Discussion and Analysis'' in this Annual Report.
24. Safety/Sustainability Safety
The company has a vision of âZero-harm to our employees and society". Safety always comes first and we are convinced that all work-related accidents can be prevented.
Health and Safety Management remains the Company''s foremost priority. A focus on safety is one of the core values of the Company and this is also incorporated into our strategy. The Company always gives main focus to safety and the well-being of employees. The company is committed to providing a safe and healthy environment, which is free from accidents injuries, and occupational health hazards. The company has adopted a structured approach toward the implementation of Safety Policies and programs to integrate safety with business processes with the objective of continuously improving safety performance.
The company is certified to ISO 45001 and assured compliance with the standards. We want to set standards that go above and beyond the certified management systems. We strive to help improve safety by sharing our safety standards and experience with operators, contractors, and professional organizations. Safety risks are managed across our businesses using standards, controls, and compliance systems. More focus is given to the elimination of unsafe acts. The company also started mapping the Safety competency of the employees & plan actions to improve Skills & knowledge through
our training centre KUSHAL. Training and awareness are considered key elements of our safety strategy. We work with our contractors and suppliers so they understand our safety requirements.
We commemorate National Safety Month and World Environment Day where we engage all stakeholders. This year also we will continue with our structured programs with the objective of encouraging a strong safety culture in the factories.
The Company has adopted a structured approach toward the implementation of safety policies and programmes to integrate safety with the business process to continuously improve safety performance. The Company always takes a safety-first approach while taking any business decision.
Sustainability is an integral part and one of the driver of SKF Group and we at SKF India are committed to it. The company has well-defined ESG Materiality analysis and having various actions in place.
The company has launched its green manufacturing initiative focussing on GHG emission reduction, conservation of natural resources, and eliminating/ reducing the generation of hazardous waste. With these projects, we are aiming to reduce negative impacts on the environment due to our manufacturing operations, products, and services.
We have rolled out the following initiatives as a part of the green manufacturing program:
1. Energy efficiency improvement and renewable energy sourcing to reduce carbon emission footprint
2. Water conservation
3. Oil and chemical consumption reduction
4. Waste elimination
5. Saving trees
We are working on reducing GHG emissions in manufacturing to achieve the objective of 100% decarbonization by 2030 in our manufacturing processes and to become a net Zero GHG Emission organization across the full value chain by 2050. SKF has committed itself to Science Based targets Initiatives (SBTi) for net zero.
In the year 2022-23, SKF India sourced 41% of renewable energy required for its manufacturing. This year we have signed a captive power purchase agreement for SKF Bangalore factory for a wind-solar hybrid project and will start the supply of renewable energy in the 3rd quarter of 2023. Through this agreement, the Bangalore factory will be sourcing 95100% renewable energy for manufacturing. Similarly, the Pune factory has entered into a captive farm solar power purchase agreement increasing the renewable energy sourcing capacity to 55-60% by this year. All these initiatives will help us to reduce scope 1 & 2 GHG emissions from 41% to 70% by the end of 2025. SKF India is working with suppliers and transporters to reduce upstream and down-stream emissions across the full value chain up to customer delivery. The team is working with the top 50 critical suppliers to assess their status with the ESG parameters, identify gaps and help them to finalize an action plan to reduce their GHG emissions and ensure compliance with ESG norms. SKF India has initiated a sustainability supply chain program with the objective of 15% reduction in CO2 emission of forging and ring suppliers by 2025, the base year is 2019. SKF logistic team is also working to reduce CO2 emission by 40% per ton of goods transported to end customers with a base year as 2015. The team is working on air freight reduction projects and road transport last-mile reduction projects.
SKF India manufacturing sites are committed to water conservation and ensure zero water discharge by treating the used water through ETP and STP plants for gardening and personal hygiene. All the factories are having rainwater harvesting and water storage facilities minimizing the usage of fresh water. SKF India sites reduce their water consumption by 10% over the last year.
SKF India is continuously working on a program to reduce the usage of oil and chemicals and reduce the wastage and spillage of oil and chemicals. All the sites are using sludge compacting machines to reuse coolant and prevent soil pollution during the transport of sludge. All the SKF India sites are VOC free for the last 3 years. Both SKF Bangalore and Haridwar plants recycle the grinding dust and avoid landfilling or incineration.
SKF India sites are proactively working on a reduction in paper and plastic consumption through various packaging optimization projects in collaboration with suppliers and customers. A major initiative was launched for the segregation of plastic and paper wastes at all manufacturing locations and offices to improve the recycling of the waste.
25. Internal Controls with Respect to Financial Statements
The Company has proper and adequate policies and procedures in place. These procedures ensure reliability and efficient conduct of business. Periodic review and control mechanisms ensure the effectiveness and adequacy of the internal control systems that the Company operates in. Additionally, it views internal audit as a vital part of management control systems.
It helps keep the management informed about the existence and efficacy of the control systems and processes in the organisation.
The management has implemented an effective three (3) lines of defence to monitor controls - first at the Management level, second by implementing an effective internal control system monitored by the Internal Controls team and, third by Internal Audits. The Company, during the year, reviewed its Internal Financial Control (IFC) systems. It continually worked towards establishing a more robust and effective IFC framework. Being part of the SKF Group, the Company adheres to SICS (SKF Internal Control Standards). This is a customised control system required to be adhered to, across the globe, by all SKF companies. The standards specified by SICS are an integral part of the standard operating procedures for all business functions.
A great extent of emphasis is placed on having compensating controls within the process, minimising deviations and exceptions. The Internal Controls team verifies the existence of adequate controls and test them. The Internal Audit function conducts Process Audits.
The Company also undergoes periodic audits by specialised external professional firms. Risks/ improvement areas, identified in the audits, are reviewed and mitigation plans are put in place. The status of implementation of action plans for major observations is submitted to every Audit Committee for review.
The Audit Committee reviews reports submitted by the management and audit reports submitted by Internal and Statutory Auditors. The Audit Committee also meets Statutory Auditors to ascertain, inter alia, their views on the adequacy of internal control systems. Based on the Committee''s evaluation, it was concluded that as of 31st March 2023, the internal financial controls were adequate and operating effectively.
The Company has complied with the specific requirements as laid out under Section 134(5) (e) of the Companies Act, 2013. It calls for the establishment and implementation of an Internal Financial Control framework that supports compliance with the requirements of the Act concerning the Director''s Responsibility Statement. Adequacy of controls of the processes is also being reviewed by the Internal Controls function. Suggestions to further strengthen the processes are shared with the respective process owners. Any significant findings, along with management response and status of action plans, are periodically shared with and reviewed by the Audit Committee.
26. Directorsâ Responsibility Statement
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(5) of the Act:
a. In the preparation of Annual Accounts for the year ended on 31st March 2023, the applicable accounting standards have been followed and there are no material departures
b. Appropriate accounting policies have been selected and applied them consistently. And made Judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as of 31st March 2023, and of the profit of the Company for the period ended 31st March 2023
c. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities
d. Annual accounts of the Company have been prepared on a going concern basis
e. Internal financial controls have been laid down and are being followed by the Company and that such internal financial controls are adequate and are operating effectively
f. Proper system to ensure compliance with the provisions of all applicable laws are in place and are adequate and operating effectively
27. Related Party Transactions
In line with the requirements of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a Policy on Related Party Transactions (Policy) which is also available on the Company''s website at https://cdn. skfmediahub.skf.com/api/public/094c27a9001efbc0/ pdf_preview_medium/094c27a9001efbc0_pdf_ preview_medium.pdf. The Policy is reviewed by the Board of Directors of the Company at regular intervals. The objective of the Policy is to ensure proper approval, disclosure, and reporting of transactions as applicable, between the Company and any of its related parties. The Audit Committee (only ID) of the Company has granted omnibus approval for the Related Party Transactions (RPTs) which are of repetitive nature and/or entered in the Ordinary Course of Business and are at arm''s length. The Audit Committee also reviews all RPTs on a quarterly basis in line with the omnibus approval granted by them. All transactions with related parties during the year were on an arm''s length basis and were in the ordinary course of business. The Company has not entered into transactions with related parties, which are material in nature, i.e., transactions of value exceeding the lower of INR One Thousand Crores or 10% of the annual consolidated turnover as per the last audited financial statements with necessary approval from Audit Committee, Board of Director and Shareholders. The particulars of contracts or arrangements entered into by the Company with related parties referred to in Section 188(1) in the prescribed Form AOC-2, in accordance with Section 134(3) (h) of the Act, and Rule 8(2) of the Companies (Accounts) Rules, 2014, is attached as Annexure-D of this Report.
The disclosures related to RPTs in accordance with accounting standards are also provided in the Financial Statements.
None of the Directors and the Key Managerial Personnel have any pecuniary relationships or transactions with the Company.
A confirmation as to the compliance of Related Party Transactions as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is also sent to the Stock Exchanges along with the quarterly compliance report on Corporate Governance.
Within the prescribed timeline with Stock exchanges and the same is published on website of the Company.
28. Subsidiaries, Joint Venture and Associates Companies
As of 31st March 2023, the Company has two Associate Companies, i.e., Sunstrength Renewables Private Limited and Clean Max Taiyo Private Limited Further, there are no subsidiaries or joint venture companies.
The statement containing the salient features of the Financial Statements of the Company''s subsidiaries/ joint ventures/ associates are given in Form AOC - 1, forming part of the Annual Report as Annexure-E. Further, pursuant to the provisions of Section 136 of the Act, the consolidated financial statements along with relevant documents are available on the website of the Company https://www.skf.com/in
29. Vigil Mechanism / Whistle-blower Policy
Over the years, SKF India has established a reputation for doing business with integrity and displaying zero tolerance for any form of unethical behaviour. Your Company has in place a system through which Directors, employees and business associates may report unethical behaviour, malpractices, wrongful conduct, fraud and violation of the Company''s code of conduct without fear of reprisal. Your Company has framed a Vigil Mechanism Policy in confirmation with Section 177(9) of the Act and Regulation 22 of SEBI LODR wherein the employees are free to report any improper activity resulting in violation of laws, rules, regulations or code of conduct by any of the employees directly to the Chairperson of the Audit Committee besides others. The Board''s Audit Committee oversees the functioning of this policy. The Audit Committee periodically reviews the existence and functioning of the mechanism. It reviews the status of complaints received under this policy on a quarterly basis.
During the year under review, the Company reached out to employees through Compliance Week Celebration, Workshops, e-learning modules and, periodic compliance communications for creating greater awareness with respect to its Code of Conduct including - Fair Competition Directive, Insider Trading Awareness and Anti-bribery and Anti-Corruption Directive. This has helped in achieving a high level of engagement and compliance among the employees. The Vigil Mechanism Policy aims to:
⢠Allow and encourage stakeholders to bring to the Management''s notice, concerns about unethical
behaviour, malpractice, wrongful conduct, actual or suspected fraud or violation of policies and leak or suspected leak of any unpublished price sensitive information
⢠Ensure timely and consistent organisational response
⢠Build and strengthen a culture of transparency and trust
⢠Provide protection against victimisation
The above mechanism has been appropriately communicated within the Company across all levels and the details of the policy have been disclosed on the Company''s website and can be accessed on https://cdn.skfmediahub.skf.com/api/ public/0901d196809a699a/pdf preview medium/0901d196809a699a pdf preview medium.pdf
30. Business Responsibility and Sustainability Report (BRSR)
The fulfilment of environmental, social and governance responsibility is an integral part of the way your Company conducts its business. The detailed Business Responsibility Report covering the above initiatives has been prepared in accordance of Regulation 34 of SEBI LODR and forms a part of the Annual Report as Annexure-M.
The Company has not accepted or renewed any deposits falling under the ambit of Chapter V of the Companies Act, 2013 and the Rules framed thereunder. No amount on account of principal or interest on deposits from the public was outstanding as of 31st March 2023.
At the 61st Annual General Meeting of the Company, M/s Deloitte Haskins and Sells LLP, Chartered Accountants (Firm Registration No. 007567S/ S200012) were appointed as Statutory Auditors of the Company for a term of 5 (five) consecutive years till the conclusion of the 66th Annual General Meeting of the Company to be held in the year 2027, on such remuneration as may be decided by the Audit Committee / Board of Directors of the Company from time to time.
M/s Deloitte Haskins and Sells LLP, Chartered Accountants (Firm Registration No. 007567S/S-200012), have submitted their Report on the
Financial Statements of the Company for the FY 2022-23, which forms a part of the Annual Report of FY 2022-23. There are no observations, qualifications, reservations, adverse remarks or disclaimers of the Auditors in their Audit Reports that may call for any explanation from the Board of Directors.
33. Secretarial Auditor and Secretarial Compliance Report
In terms of the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Audit Committee has recommended, and the Board has appointed M/s Parikh & Associates, Company Secretaries, as the Secretarial Auditor for conducting Secretarial Audit of the Company for the FY 2022-23.
The report of the Secretarial Auditor for the financial year ended on 31st March 2023, in MR-3 is attached as Annexure-F of this Report. The Secretarial Audit Report is self-explanatory and does not call for any further comments. The Secretarial Audit Report does not contain any qualification, reservation/ observation, or adverse remarks in Secretarial Audit Report. During the year under review, the Company is in compliance with the applicable Secretarial Standards, specified by the Institute of Company Secretaries of India (ICSI).
Pursuant to SEBI Circular CIR/CFD1/27/2019 dated 08th February 2019 read with and Regulation 24A of SEBI LODR, all listed entities shall, additionally, on annual basis, submit a report to the stock exchange(s) on compliance of all applicable SEBI Regulations and circulars / guidelines issued thereunder within 60 days of end of Financial Year. Such report shall be submitted by Company Secretary in practice to the Company in the prescribed format.
The Company has received Secretarial Compliance Report from M/s Parikh & Associates, Company Secretaries for the Financial Year ended 31st March 2022 and it has been submitted to the stock exchange(s) within the stipulated time. Certificate forms part this Annual Report as Annexure-G.
A certificate from M/s Parikh & Associates, Company Secretaries regarding compliance with sub regulation 10(i) of regulation 34(3) of schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 also forms part of this Annual Report as Annexure-H .
34. Cost Records and Cost AuditorMaintenance of Cost Records
The Company is required to maintain cost records under Section 148(1) of the Act read with Companies (Cost Records and Audit) Rules, 2014. Accordingly, cost records have been maintained by the Company.
In terms of Section 148 of the Act read with Companies (Cost Records and Audits) Rules, 2014, M/s. RA & Co. (Firm Registration No. 000242), Cost Accountants were appointed as Cost Auditors of the Company for FY 2022-23 by the Board of Directors on the recommendation of the Audit Committee. The Cost Auditors have confirmed by giving their written consent that their appointment meets the requirement of Section 141 of the Companies Act, 2013.
The Cost Audit Report for the FY 2022-23 Company will be filed with the Ministry of Corporate Affairs on or before the due date.
As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor, as approved by the Board of Directors on the recommendation of the Audit Committee, is required to be placed before the Members in a general meeting for its ratification. Accordingly, a resolution for seeking Members'' ratification for the remuneration payable to M/s RA & Co, Cost Auditor is included in the Notice convening the 62nd Annual General Meeting.
35. Reporting of Fraud by Auditors
During the year under review, neither the Statutory Auditors nor the Secretarial Auditor nor the Cost Auditor has reported to the Audit Committee of the Board, under Section 143(12) of the Act, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in this Report.
36. Significant and material orders passed by the Regulators or Courts or Tribunals
The Registered Office of the Company, which was earlier situated at âMGM Building, Netaji Subhash Road, Mumbai Maharashtra 400002'' in the jurisdiction of Registrar of Companies, Mumbai, was shifted to âChinchwad, Pune 411 033'' vide application made by the company on 9th June 2022 and approval from the office of Registrar of Companies, Pune on 15th July 2022.
Certificate of registration of the order of regional director confirming transfer of The registered office within the same state was issued on 15th July 2022.
The information required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached as Annexure-I to this Report.
The statement containing names of the top 10 employees, in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the Members, excluding the aforesaid Annexure. In terms of Section 136 of the Act, the said Annexure is open for inspection and any member interested in obtaining a copy of the same may write to the Company Secretary at [email protected].
None of the employees listed under the said rules are related to any Director of the Company.
The Company enjoys harmonious and healthy industrial relations due to its vibrant work culture and believes in a collaborative approach at work. This mutual trust and caring spirit helps in maintaining a harmonious environment across all business units. The enthusiasm and unstinting efforts of employees have enabled the Company to remain in the leadership position in the industry.
39. Transfer of Equity Shares / Unpaid and Unclaimed Amounts to IEPF
Pursuant to the provisions of Section 124 of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF Rules) and subsequent amendment thereof, the amount of dividends, which remained unpaid or unclaimed for a period of seven years from the due date, is required to be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government.
The Company has accordingly transferred INR 8,99,330/- (Rupees Eight Lakh Ninety Nine Thousand
Three hundred and Thirty Only) being the unpaid and unclaimed dividend amount pertaining to the year 2014-15 to the IEPF in in June 2022.
As per the IEPF Rules, all shares in respect of which dividend has not been paid or claimed for seven consecutive years shall be transferred by the Company to the designated Demat Account of the IEPF Authority within a period of 30 days of such shares becoming due to be transferred to the IEPF. Accordingly, the Company has transferred all the shares pertaining to the year 2014-15 to the IEPF Authority in respect of which dividend has not been paid or claimed by shareholders for seven consecutive years or more after following the prescribed procedure.
Further amount due in respect of FY 2015-16 and shares where dividend had remained unpaid for the last consecutive seven years will be transferred to the IEPF within the stipulated time period.
The Company has sent individual notices to the concerned shareholders, whose shares and dividends are liable to be transferred to the IEPF Authority to their latest available addresses.
The Company has displayed full details of such shareholders, dividends and shares on its website at www.skf.com/in. Shareholders are requested to verify the details of the shares liable to be transferred as aforesaid.
40. Particulars of Loans, Guarantees or Investments
The particulars of loans given, investments made or guarantee/security provided are disclosed in the financial statements. No fresh loan was given during the year. The Company did not give any guarantee or provide any security in connection with any loan. The Company invested INR 26,000/- in Clean Max Taiyo Private Limited in the form of the acquisition of Equity Shares to the tune of 26% of its equity share capital during the financial year.
The Company has invested in the special purpose vehicle company, for the purchase of electricity generated from captive solar power project for the Bangalore plant of the Company. As per local electricity laws of Karnataka, SKF India mandatorily needs to invest in at least 26% equity shares of the power producer company under the captive solar farm model. Accordingly, the first tranche of investment was done in March 2023. The second and third tranche of investment will be done in FY 202324 by SKF India in Clean Max Taiyo Private Limited to
comply with the captive requirements. Your company is planning to expand this investment considering the recent changes in the local electricity laws.
The Company had invested in the special purpose vehicle company, for the purchase of electricity generated from captive solar power project for the Pune plant of the Company. As per local electricity laws of Maharashtra, SKF India mandatorily needs to invest in at least 26% equity shares of the power producer company under the captive solar farm model. Accordingly, the first tranche of investment was done in December 2020 and the second tranche of investment was done in March 2021 by SKF India in Sunstrength Renewables Private Limited to comply with the captive requirements. Your company is planning to expand this investment considering the recent changes in the local electricity laws.
Please refer Note 6 of financial statements for investments under Section 186 of the Companies Act, 2013.
Pursuant to the provisions of Section 92(3) of the Act, a copy of the annual return of the Company for the Financial Year ended 31st March 2023 has been placed on the website of the Company. The same can be accessed by any person through the below-given weblink.
https://www.skf.com/in/investors/financial-results)
42. Policy on Prevention of Sexual Harassment at Workplace
At SKF India, we strive to create an environment where there is no discrimination between individuals at any point on the basis of race, colour, gender, religion, political opinion, national extraction, social origin or age.
At SKF India, every individual is expected to treat his/her colleagues with respect and dignity. This is enshrined in values and in the Code of Ethics & Conduct of the Company. The Company also has in place a Prevention of Sexual Harassment Policy. This is in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. All employees (permanent, contractual, temporary and trainees) are covered under this policy.
The Company has complied with provisions relating to the constitution of the Internal Committee (IC)
under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to redress complaints received regarding sexual harassment. This has been widely communicated internally and is uploaded on the Company''s intranet portal.
Internal committees comprising management staff across locations and an external member are in place. These include majority women members to redress complaints relating to sexual harassment. The employees are sensitised from time to time in respect of matters connected with the prevention of sexual harassment. Awareness programmes are conducted at unit levels to sensitise the employees to uphold the dignity of their colleagues at the workplace. The Company also conducted an e-learning programme for employees to cover various aspects of the subject matter.
1. |
Number of complaints pending as on the beginning of FY 2022-23 |
[0] |
2. |
Number of complaints of sexual harassment received in the year |
[3] |
3. |
Number of complaints disposed off during the year |
[1] |
4. |
Number of complaints pending as on the end of FY 2022-23 |
[2] |
ICC Committee details are provided in Posh Policy The PoSH Policy is available on website of the Company
https://cdn.skfmediahub.skf.com/api/
public/0901d19680abcff8/pdf_preview_
medium/0901d19680abcff8_pdf_preview_medium.
43. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
Pursuant to the provisions of Section 134 of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 the details of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo are attached as Annexure J to this Report.
44. Explanation Or Comments On Qualifications, Reservations Or Adverse Remarks Or Disclaimers Made By The Statutory Auditors, Secretarial Auditors
There were no qualifications, reservations or adverse remarks made by the Statutory Auditors in the Audit Report on the Standalone and Consolidated Financial Statements for the Financial year ended 31st March 2023.
The Report of Secretarial Auditors for the Financial Year ended 31st March 2023 is also unmodified.
45. Proceeding under Insolvency and Bankruptcy Code, 2016
No application or any proceeding has been filed against the Company under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) (IBC Code) during FY 2022-23.
46. The details of the difference between the amount of the valuation done at the time of the one-time settlement and the valuation done while taking a loan from the banks or financial institutions, along with the reasons thereof
During the year under review, the Company has not made any such settlement; therefore, the same is not applicable.
47. Code of conduct for Board and Senior Management
The Company has adopted the Code of Conduct for the Directors and Senior Management and the same is available on the Company''s website https://www. skf.com/binaries/pub12/Images/0901d196809a6aba-Code-of-Conduct-for-Directors-Senior-Management_ tcm_12-526431.pdf
All Directors and Senior Management personnel have affirmed their compliance with the said Code. A declaration pursuant to the Regulation 26 (3) read with part D of the Schedule V of the SEBI LODR, 2015 signed by Managing Director to this effect is annexed as a part of Annual Report as Annexure K.
48. Compliance with Secretarial Standards
The Board of Directors, to the best of its knowledge, affirms that the Company has complied with the applicable Secretarial Standards (SS) issued by the
ICSI (SS1 and SS2), respectively relating to Meetings of the Board and its Committees, which have mandatory application during the year under review.
Statements in this âDirector''s Report'' and âManagement Discussion and Analysis Report'' describing the Company''s objectives, projections, estimates, expectations, or predictions may be forward-looking statements within the meaning of applicable security laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company''s operations include raw material/ fuel availability and its prices, cyclical demand and pricing in the Company''s principal markets, changes in the Government regulations, tax regimes, economic developments, unforeseen situations like pandemic within the country in which your Company conducts business and other ancillary factors.
The Directors express their deep sense of gratitude to the Principals, Aktiebolaget SKF, customers, members, suppliers, employees, bankers, business partners/associates and all other stakeholders for their exemplary and valued contribution and look forward to their continued assistance in future.
For and on behalf of the Board, SKF India Limited
Place: Gothenburg, Sweden Gopal Subramanyam
Chairman
Date: 17th May 2023 DIN: 06684319
Mar 31, 2022
The Board of Directors of your Company are pleased to present the 61st Annual Report, with audited financial statements (standalone and consolidated) for the financial year ended on March 31, 2022.
(INR in millions) |
||||
Year Ended |
Year Ended |
|||
March 31, 2022 Standalone |
March 31, 2021 Standalone |
March 31, 2022 consolidated |
March 31, 2021 consolidated |
|
Revenue from Operations |
36,658.9 |
26,707.3 |
36,658.9 |
26,707.3 |
Other Income |
344.0 |
363.1 |
344.0 |
363.1 |
Total Income |
37,002.9 |
27,069.6 |
37,002.9 |
27,069.6 |
Operating Expenditure |
31,122.3 |
22,527.2 |
31,122.3 |
22,527.2 |
Depreciation |
571.0 |
579.5 |
571.0 |
579.5 |
Profit before Tax |
5,309.6 |
3,962.9 |
5,309.6 |
3,962.9 |
Share of Net Profit/ (loss) of Associate |
- |
- |
(1.7) |
(0.4) |
Provision for Taxation |
1,358.3 |
985.6 |
1,358.3 |
985.6 |
Profit after Tax |
3,159.3 |
2,977.3 |
3,949.6 |
2,976.9 |
Other Comprehensive Income |
(13.5) |
35.2 |
(13.5) |
35.2 |
Total Comprehensive Income for the Period |
3,937.8 |
3,012.5 |
3,936.1 |
3,012.1 |
The Standalone Revenue from operations of the Company for the year ended on March 31, 2022 stood at INR 36,658.9 million compared to INR 26,707.3 million in the previous year. The Company''s Standalone Profit before Tax for the year under review was INR 5,309.6 million compared to INR 3,962.9 million in the previous year.
The Standalone Profit after Tax for this period was INR 3,159.3 million, compared to INR 2,977.3 million during the previous year.
The Company incurred a capital expenditure of INR 916.8 million during the year.
The Company has contributed INR 2.4 million (LY INR 2.7 million) towards COVID-19 pandemic-related relief activities.
The standalone and consolidated financial statements of the Company for FY 21-22 are prepared in compliance with the applicable provisions of the Companies Act, 2013
(âthe Act'') including Indian Accounting Standards specified under Section 133 of the Act. The audited standalone and consolidated Financial Statements together with the Auditors'' Report thereon form parts of the Annual Report of FY 21-22.
Pursuant to Section 129(3) of the Act, a statement containing the salient features of the Financial Statements of the associate company in the prescribed Form AOC-1 forms a part of the Annual Report.
The Financial Statements of the associate company shall be made available to Members on request through email and are also available on the website of the Company, which can be accessed at www.skfindia.com under the âInvestors'' section.
There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the
Company to which the financial statements relate and up to the date of this report.
There was no change in the nature of the business of the Company.
The world has been dramatically reshaped by the COVID-19 pandemic which has transformed life as we know it. The pandemic has been a sobering reminder to the world that change can come in unanticipated ways.
Our support during the COVID-19 pandemic has not only involved SKF employees. There have been numerous initiatives to help the communities where we live and work.
The manufacturing facilities, offices and distribution centres continued to operate in line with the state government norms applicable at different locations where they are located.
The Company continued to take several measures to ensure well-being. Various actions taken by the Company are - a central task force to monitor the countrywide situation and take appropriate actions, setting up and managing COVID-19 care centres for employees at various locations and conducting multiple COVID-19 testing and vaccination drives across the country to not only support the employees but also their family members. The COVID-19 care policies were launched for employees passing away due to COVID-19 to cover the permanent as well as temporary manpower working at various SKF locations.
Supporting employees with admission to hospitals, arranging emergency medicines and providing O2 cylinders and concentrators on a need basis are some other initiatives undertaken by the Company.
The Company empowers global enterprises with its latest technology for the next decade today. The Company''s core businesses include manufacturing of bearings and their components in India. SKF India Limited is an affiliate of the Sweden-based SKF Group, which was founded in 1907. SKF started its operations in India in 1923 and continues to provide industry-leading automotive and industrial engineered solutions through its five technology-centric platforms: bearings and units, seals, mechatronics, lubrication solutions and services. Over the years, the Company has evolved from being a pioneer ball bearing manufacturing company to a knowledge-driven engineering company helping customers achieve sustainable and competitive business excellence.
SKF''s solutions provide sustainable ways for companies across the automotive and industrial sectors to achieve breakthroughs in friction reduction, energy efficiency, and equipment longevity and reliability. With a strong commitment to research-based innovation, SKF India offers customised value-added solutions that integrate all its five technology platforms.
The state of affairs of the Company is presented as part of the Management Discussion and Analysis Report forming part of this Annual Report.
The Board of Directors decided to retain the entire amount of profit for FY 21- 22 in the profit and loss account. No amount was transferred to the General Reserves of the Company.
The dividend recommended is in accordance with the Dividend Distribution Policy of the Company. For FY 2021-22, the Company has declared dividend as the final dividend of INR 14.50 per equity share of INR 10/-each to its shareholders.
The significant improvement in the profitability in spite of challenges due to the COVID-19 pandemic was a result of efficient planning and robust operational performance. The Board of Directors at their meeting held on May 11, 2022 has recommended the payment of INR 14.50 per equity share of the face value of INR 10/- each as the final dividend for the financial year ended March 31, 2022, compared to INR 14.50 per equity share for the preceding financial year ended March 31, 2021. The pay-out is expected to be INR 716.9 million (Rupees seven hundred sixteen million nine hundred thousand only). The payment of the final dividend is subject to the approval of the shareholders of the Company at the ensuing 61st Annual General Meeting (AGM) of the Company to be held on July 27, 2022.
The record date is Wednesday, June 29, 2022, for the purpose of determining the eligibility of the shareholders for payment of the dividend for the financial year ended March 31, 2022.
As per the Income Tax Act, 1961 (the Act), as amended by the Finance Act, 2020, dividends paid or distributed by a company after 1st April 2020 shall be taxable in the hands of the shareholders
The Company shall, accordingly, make the payment of the final dividend after deduction of tax at source.
Pursuant to Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing
Regulations''), the Dividend Distribution Policy approved by the Board is available on the Company''s website:
https://www.skf.com/binaries/pub12/Images/0901d196809a6abb-
Dividend-Distribution-Policy-SKF-India-Feb-2017_tcm_12-
During this financial year, the unclaimed dividend amount pertaining to the dividend for FY 13-14 was transferred to the Investor Education and Protection Fund (IEPF).
The paid-up share capital of the Company as of March
31, 2022 is INR 494.38 million - divided into 49,437,963
equity shares of INR 10/- each. The Company''s equity shares are listed on the BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE).
During the year under review, there was no change in the share capital of the Company from the last financial year.
The shares are actively traded on the BSE and the NSE and have not been suspended from trading.
The Company has not issued shares with differential voting rights or sweat equity shares during FY 21-22. As of March 31, 2022, none of the Directors of the Company hold any instruments convertible into equity shares of the Company.
Your Directors are pleased to share that during the year under review, your Company received numerous awards and felicitations from distinguished bodies for achievements in different fields that re-emphasise SKF''s strong position in the Indian manufacturing industry. Some of the achievements are:
⢠SKF India was awardedâTowards quality performance with sustenance without major claims'' at the Yamaha Virtual Supplier Conference on April 21, 2022, under the âQuality'' category. SKF India has met and sustained its quality targets and requirements with no cases of a warranty claim or performance nonconformance. Yamaha Motors considers SKF as a reliable partner and the award is a testimony and a significant milestone in SKF India''s journey towards operational excellence and our uncompromising commitment to customer-centricity.
Energy Conservation - Kaizen
40th CII National Kaizen Competition
54th Mini Convention for Roller, TRB 1, DGBB CH-2
Runner Up-(Large) Award at 9th Annual
Manufacturing Today Conference & Award-2021 for Pune, Haridwar and Bangalore factory
Par Excellence Award at 46th International Convention on Quality Control Circles from November 24 to 27,
2021 in Novotel and HICC Hyderabad, for DGBB CH-03
Star Challenger Award 2021 by CII for DGBB CH-02 and Factory Resetting
Excellent Kaizen Award at 35th National Convention on Quality Concepts (NCQCC-2021) for DGBB CH-02, TRB T1 and Roller
Platinum Award by CII 3M Competition (Muda, Mura, Muri) for Heat Treatment - Muda
Platinum Awar1d by CII 42nd CII National Kai-Zen Competition - 2022 Restorative Kaizen for TRB T4 and Factory Resetting
Golden Award by CII 3M Competition (Muda, Mura, Muri) for Factory Resetting -Mura
Silver Award by CII 42nd CII National Kaizen Competition - 2022 Renovative Kaizen for HUB 1.2
1st RUNNER UP by CII -SMED-QUICK CHANGEOVER for Factory Resetting - Auto sector
GOLD AWARD by QCFI Kaizen Competition on SMED-
2022 for TRB, DGBB Resetting, TRB Resetting, Factory Maintenance, Shared Operation
Gold Award by QCFI 32nd Annual Convention for Ch-1
SILVER AWARD BY QCFI Safety Kaizen Competition -2022 for TRB T4
Excellent by ICQCC-2021 host by QCFI 46th International Convention on Quality Control Circles from 24th to 27th November 2021 in Novotel and HICC Hyderabad
The Management''s Discussion and Analysis (MDA) Report giving the details on review of operations, performance, opportunities and outlook of the Company, as required under Corporate Governance guidelines, has also been incorporated as a separate section forming a part of the Annual Report as Annexure I.
Our corporate governance practices are a reflection of our value system encompassing our culture, policies and relationships with our stakeholders. Integrity and transparency are key to our corporate governance practices to ensure that we gain and retain the trust of our stakeholders at all times. Corporate governance is about maximising shareholder value legally, ethically and sustainably. Our Corporate Governance Report for FY 21-22 forms part of this Annual Report
During the year under review, the Company complied with the provisions relating to corporate governance as provided under the Listing Regulations. The Corporate Governance Report, together with a certificate from the Company''s Statutory Auditors confirming the compliance is provided in the Report on Corporate Governance, which forms part of the Annual Report as Annexure ii.
At SKF India, the Board exercises its fiduciary responsibilities in the widest sense of the term. Our disclosures seek to attain the best practices in international corporate governance. Pay-offs from strong governance practices have been in the sphere of valuations, stakeholders'' confidence, market capitalisation and recognition from different stakeholders.
During FY 21-22, based on the recommendation of the Nomination and Remuneration Committee (âNRC'') of the Company, the Board of Directors has appointed Mr. Shailesh Sharma (DIN: 09493881) as an Additional Director and Whole-time Director of the Company with effect from February 10, 2022.
Mr. Shailesh Sharma is not debarred or disqualified from holding the office of Director by virtue of any SEBI order or any other statutory authority as required under the Circular dated June 20, 2018, issued by the BSE and NSE.
Pursuant to Mr. Shailesh Sharma appointed as Wholetime Director, he has been designated as Key Managerial Personnel of the Company in accordance with Section 203 of the Act read with rules made thereunder.
The Company conducted a postal ballot for taking shareholders'' approval on appointment of Mr. Shailesh Kumar Sharma as Director and Whole-time Director (Key Managerial Personnel) of the Company by ordinary resolution for 5 Years. Shailesh Sharma shall retire by rotation as per provision of Companies Act, 2013 and rules made thereunder.
Mr. Werner Hoffmann, Non-executive, Non-independent Director of the Company, has resigned as Director of the Company with effect from February 10, 2022, due to his other engagements. The Board placed on record the appreciation for the valuable services, support and guidance extended by Mr. Werner Hoffmann during his tenure as Director of the Company.
During the year under review, apart from the above-stated facts, there was no change in the composition of the Board of Directors and Key Managerial Personnel of the Company.
Pursuant to the provisions of Section 149 of the Act, and under SEBI LODR the Independent Directors of the Company, Mr. Gopal Subramanyam (DIN: 06684319) and Ms. Anu Wakhlu (DIN: 00122052), have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1) (b) and 25(8) of the SEBI LODR . They are also in compliance with Rule 6 (1) and (2) of the Companies (Appointment & Qualifications of Directors) Rules, 2014. There has been no change in the circumstances affecting their status as Independent Directors of the Company.
The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act as well as the Code of Conduct for Directors and Senior Management Personnel.
All other Directors of the Company have also provided declarations on the fact that they are not debarred from holding the office of Director by virtue of any SEBI order or any other statutory authority as required under the Circular dated June 20, 2018, issued by the BSE and NSE.
The Board of Directors of the Company is of the opinion that the Independent Directors possess a high level of integrity, expertise and experience, which are beneficial to the Company and its stakeholders.
The Board of Directors of the Company strategically comprises of Independent Directors from different domains which adds value to the Company. Every Independent Director with his expertise and integrity has earned a vast experience and reputation in the industry. Our Independent Directors are experts in Finance, Company Laws, Information Technology, Commercial Laws and Audit. These domains are integral part of every business and therefore the collective expertise of these board members ensure that we are up to the mark with the global leaders in terms of ethics, corporate governance, best industry practices, transparency and technology. The online proficiency self-assessment test of Independent Directors conducted by Indian Institute of Corporate Affairs ensures that the skills and knowledge is appropriate and beneficial to the Company. All the Independent Directors have successfully passed the test.
Mr. Anurag Bhagania, Finance Director and Chief Financial Officer (KMP) of the Company, has resigned from the Company with effect from February 22, 2022. The
Board placed on record its appreciation for his invaluable contribution, services, support and guidance extended during his tenure as Finance Director and Chief Financial Officer (KMP).
I n terms of Section 203 of the Act, the following are the Key Managerial Personnel (KMPs) of the Company as March 31 2022 :
⢠Mr. Manish Bhatnagar, Managing Director
⢠Mr. Shailesh Sharma, Whole-time Director (from 10.2.2022)
⢠Mr. Anurag Bhagania, Chief Financial Officer (from 15.5.2019 till 21.2.2022)
⢠Mr. Ranjan Kumar, Company Secretary
Mr. Ashish Saraf has been appointed as Chief Financial Officer of the Company w.e.f 11.05.2022.
Regular meetings of the Board and its Committees are held to discuss and decide on various policies, strategies, financial matters and other businesses. The schedule of the Board/Committee Meetings to be held in the forthcoming financial year (2022-23) is circulated to the Directors in advance to enable them to plan their schedule for effective participation in the meetings. Due to business exigencies, the Board has also been approving several proposals by circulation from time to time.
During FY 21-22, five meetings of the Board of Directors were held. The details of meetings of the Board and Committees such as the Audit Committee, Nomination and Remuneration Committee, Stakeholder Relationship Committee, Risk Management Committee and Corporate Social Responsibility Committee, are included in the Corporate Governance Report, which is a part of this document.
Details of Committee is also available on website of the Company https://www.skf.com/in/investors/operating-committees
The Board of Directors has carried out an annual evaluation of its own performance, the Board Committees and individual directors pursuant to the provisions of the Act and SEBI Listing Regulations, as amended from time to time.
The process followed for Board evaluation includes:
i) Feedback is sought from each Director about their views on the performance of the Board (as a whole) / Committees / Independent Directors / Chairman /
self-assessments, covering various relevant criteria such as degree of fulfilment of key responsibilities, effectiveness of Board processes, participation levels, culture and responsibilities to various Committees, etc.
ii) The Nomination and Remuneration Committee (NRC) then discusses the above feedback received from various Directors, including the assessment of individual directors by the Chairman.
iii) The Independent Directors (post their meeting) share their collective feedback on the performance of the Board with the Board Members.
iv) Significant highlights, learnings and action points arising out of the evaluation are presented to the Board and action plans are drawn up wherever required.
The Directors express their satisfaction with the entire evaluation process.
The details of the training and familiarisation programme are provided in the Corporate Governance Report. Further, at the time of the appointment of an Independent Director, the Company issues a formal letter of appointment outlining his/her role, function, duties and responsibilities. The format of the letter of appointment is available on our website, at https://www. skf.com/binaries/pub12/Images/0901d196809bff6e-LetterofAppointmentofIDswebsite_tcm_12-541573.pdf
Over the years, the Company has developed a robust familiarisation process for the Independent Directors with respect to their roles and responsibilities, way ahead of the prescription of the regulatory provisions. The process has been aligned with the requirements under the Act and other related regulations. This process inter alia includes providing an overview of the industry, the Company''s business model, the risks and opportunities, the new products, innovations, sustainability measures, digitisation measures, etc.
Details of the Familiarisation Programme for Independent Directors are explained in the Corporate Governance Report and is also available on the Company''s website at https://www. skf.com/binaries/pub12/Images/0901d196809a6abc-Familiarisation-Programme-for-IDs_tcm_12-526435.pdf
The Company has in place a policy for the remuneration of Directors, Key Managerial Personnel and Senior Management Team as well as a well-defined criterion for the selection of candidates for appointment to the said positions. The Policy broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to the Executive and Non-Executive Directors, Key Managerial Personnel and Senior Management Team.
The Appointment of Directors and Remuneration Policy is available on the Company''s website at https://www.skf.com/ binaries/pub12/Images/0901d19680cbc6e6-Policy-for-appointment-and-remuneration-for-Directors-2021_ tcm_12-583864.pdf.
The criteria for the selection of candidates for the above positions cover various factors and attributes, which are considered by the Nomination & Remuneration Committee and the Board of Directors while selecting candidates. The policy on remuneration of Directors, Key Managerial Personnel and Senior Management Team is given in this Report.
The Audit Committee constituted in terms of the requirements of the Section 177 of Companies Act, 2013 and Regulation 18 of SEBI (Listing Obligation and Disclosure Requirements Regulations), 2015, it comprises of three (3) members. The Committee is chaired by Ms. Anu Wakhlu (Independent Director). The other Members of the Committee are Mr. Gopal Subramanyam (Independent Director) and Ms. Ingrid Viktoria Van Camp (Nonindependent Director).Two - third members of Committee are of Independent Directors.
The Audit Committee was re-constituted due to the resignation of Mr. Werner Hoffmann (Non-independent Director) with effect from February 10, 2022. Ms. Ingrid Viktoria Van Camp was inducted as a Member of the Audit Committee in place of Mr. Werner Hoffmann with effect from February 10, 2022.
Details of the roles and responsibilities of the Audit Committee, the particulars of meetings held and attendance of the Members at such meetings are given in the Report on Corporate Governance, which forms a part of the Annual Report.
During the year under review, the recommendations made by the Audit Committee were accepted by the Board.
The Corporate Social Responsibility Committee constituted in terms of the requirements of the Section 135 of Companies Act, 2013, comprises of three(3) members. The Committee is chaired by Mr. Manish Bhatnagar (Managing Director). The other Members of the Committee are Mr. Gopal Subramanyam (Independent Director) and Ms. Anu Wakhlu (Independent Director). Two - third members of Committee are of Independent Directors.
Details of the roles and responsibilities of the Corporate Social Responsibilities Committee, the particulars of meetings held and attendance of the Members at such meetings are given in the Report on Corporate Governance, which forms a part of the Annual Report as Annexure II.
CSR Policy is also disclosed on the website of the Company at https://www.skf.com/binaries/pub12/ Images/0901d19680cb2f37-SKF-India-CSR-Policy-2021_tcm_12-583398.pdf
During the year under review, the recommendations made by the Corporate Social Responsibilities Committee were accepted by the Board.
We aim to build more capable, inclusive and resilient communities through a shared approach that takes into cognisance the specific needs of each community. Our social strategy aligns with our core business strategy to empower communities and provide opportunities for us to create common value across our footprint.
The Company has been actively engaged in various CSR activities over the years, which cover the entire gamut of social welfare/upliftment activities across the nation. The thrust areas under CSR inter-alia included education, employment enhancing vocational skills, support during COVID-19 pandemic, etc., which have always been built on the Company''s values of âSKF Care'' on four pillars of âBusiness care, Employee care, Environment care and Community care''.
The Corporate Social Responsibility (CSR) Committee reviews and monitors the CSR projects and expenditures undertaken by the Company. The brief outline of the CSR Policy of the Company and the initiatives undertaken by the Company under the CSR Policy during the year under review are set out in the Annual Report on CSR activities -annexed as Annexure III of this Report.
Risk is inherent in all businesses and the key to success is to anticipate risks and deploy an appropriate framework to manage them. In today''s world, the external and internal environment is changing at an ever-increasing pace and which, in turn, requires businesses to not only manage the existing risks but anticipate emerging risks and deploy mitigating strategies on a continuous basis. Embracing the upside risk opportunities combined with deploying the mitigation strategies are key to success.
The Risk Management Committee (RMC) receives regular insights through its corporate governance structure, which has enabled and empowered its management, on risk exposures faced by the organisation, thereby enabling it to provide inputs on prompt actions to be taken as well as monitor the actions taken. The Board is also updated regularly on the risk assessment and mitigation procedures.
The Company''s governance structure has well-defined roles and responsibilities, which enable and empower the Management to identify, assess and leverage business
opportunities and manage risks effectively. There is also a comprehensive framework for strategic planning, implementation and performance monitoring of the business plan, which inter alia includes a well-structured Enterprise Risk Management (ERM) process.
The risks that fall under the purview of high likelihood and high impact are identified as key risks. This structured process of identifying risks supports the Senior Management Team in strategic decision-making and in the development of detailed mitigation plans. The identified risks are then integrated into the Company''s planning cycle, which is a rolling process to, inter alia, periodically review the movement of the risks and the effectiveness of the mitigation plan. Your Company has constituted a Risk Management Committee, which oversees risk management activities. The Company''s risk management initiatives are periodically updated to the Audit Committee and Board of the Company. The Company''s assets continue to be adequately insured against the risk of fire, riot, earthquake, terrorism and the risk of loss of profits also stands insured among other things. In addition, adequate coverage has been taken to cover product liability, public liability and Director''s and officer liability. Also, all the employees are covered against the risk of loss of life, hospitalisation and personal accident.
The Company has adopted a Risk Management Policy in accordance with the provisions of the Act and Regulation 21 of the Listing Regulations. Risk Management Policy is hosted on website of the Company https://www.skf. com/binaries/pub12/Images/0901d19680a81036-Risk-Management-Policy_tcm_12-553194.pdf
A section on risk management practices of the Company forms a part of the chapter on âManagement Discussion and Analysis'' in this Annual Report.
Your Company always gives main focus to safety and the well-being of employees. SKF is committed to providing a safe and healthy environment, which is free from accidents, injuries and occupational health hazards.
A focus on safety is one of the core values of the Company and this is also incorporated into our strategy. We build and operate our facilities with the aim of preventing incidents that may damage or harm our employees, contract staff, nearby communities, the environment or our assets. We strive to help improve safety by sharing our safety standards and experience with other operators, contractors and professional organisations. Safety risks are managed across our businesses using standards, controls and compliance systems. Continuous improvement cycle is maturing over the days to identify as well as reduce risks and minimise the potential impact of any incident. Training and awareness are considered key elements of our safety strategy. We commemorate National Safety Month and World Environment Day where we engage all stakeholders.
The COVID-19 pandemic necessitated new kinds of risk assessments beyond those that are normally conducted in our industry. The results led to us adopting extra measures to take care of our employees, our contractors, our customers and the communities we work with. The Company adapted to the new normal with a strong focus on everyone''s health and safety. The pandemic sharpened the Company''s focus on the overall well-being, health and safety of employees.
This year also we will continue with our structured programme of Safety Behaviour in all employees with the objective of encouraging a strong safety culture in your factories.
Your Company has adopted a structured approach toward the implementation of safety policies and programmes to integrate safety with the business process with an objective of continuously improving safety performance. Your Company always take a safety-first approach while taking any business decision.
SKF India is committed to reduction in greenhouse gas emissions (GHG) through its environmental care initiatives. In line with the Group''s targets, SKF India has taken a target of net zero carbon emission in manufacturing processes by 2030 and across all full value chains by 2050.
SKF has launched its green manufacturing initiative focussing on GHG emission reduction, conservation of natural resources and eliminating/reducing the generation of hazardous waste.
We have rolled out the following initiatives as a part of the green manufacturing programme:
1. Energy efficiency improvement and renewable energy sourcing to reduce carbon emission footprint
2. Water conservation
3. Oil and chemical consumption reduction
4. Waste elimination
5. Saving trees
With these projects, we are aiming to reduce negative
impacts on the environment due to our manufacturing operations, products and services.
The brief discussion about these projects are as follows:
1. Energy efficiency improvement and renewable energy saving
⢠I dentify significant energy users based on ISO50001 energy review programme and improvement actions mainly in the area of heat treatment furnaces, grinding machines, central utilities, HVACs and compressors
⢠Use energy-efficient motors, pumps and spindles
⢠Source renewable energy in the form of solar, wind, hydro energies through third-party power purchase agreements
2. Water conservation
⢠Assess water consumption data and preparation of activity plan
⢠Identify water leakage points and close abnormalities
⢠Maximise usage of treated water and rainwater collected from rooftops for gardening
⢠Install and commission digital water meters for online tracking
⢠Install and commission water-saving taps and waterless urinals
⢠Conduct awareness programmes for all stakeholders
3. Reduction of oil consumption
⢠Ensure robust coolant health management systems
⢠Focused drive for identification and closer of hydraulic oil, grinding and honing coolant, and washing media leakages
⢠Maximise usage of sludge compacting systems to reclaim entrapped coolant for recycling
⢠Run project to proactive prevention of hydraulic oil leakages through cylinders, pipes and fittings
⢠Order Recond honing oil system to improve the health of honing oil (expected delivery in June 22)
Pilot projects to eliminate washing machines and recycle residual oil inside bearing by using oil recovery systems
4. Saving trees (paper consumption reduction)
⢠Projects to eliminate the use of corrugated boxes for packaging bearings to customers using reusable plastic boxes or relevant material, thereby reducing the usage of papers and subsequently saving trees
⢠Replace corrugated boxes Vehicle Part centre into returnable blue bins
⢠For 3 TRB types, filler material in the corrugated boxes changed filler corrugated material to airbags
The Company has proper and adequate policies and procedures in place. These procedures ensure reliability and efficient conduct of business. Periodic review and control mechanisms ensure the effectiveness and adequacy of the internal control systems that the Company operates in. Additionally, it views internal audit as a vital part of management control systems.
It helps keep the management informed about the existence and efficacy of the control systems and processes in the organisation.
The management has implemented an effective three (3) lines of defence to monitor controls - first at the Management level, second by implementing an effective internal control system monitored by the Internal Controls team and, third by Internal Audits.
The Company, during the year, reviewed its Internal Financial Control (IFC) systems. It continually worked towards establishing a more robust and effective IFC framework. Being part of the SKF Group, the Company adheres to SICS (SKF Internal Control Standards). This is a customised control system required to be adhered to, across the globe, by all SKF companies. The standards specified by SICS are an integral part of the standard operating procedures for all business functions.
A great extent of emphasis is placed on having compensating controls within the process, minimising deviations and exceptions. The Internal Controls team verifies the existence of adequate controls and test them. The Internal Audit function conducts Process Audits.
The Company also undergoes periodic audits by specialised external professional firms. Risks/improvement areas, identified in the audits, are reviewed and mitigation plans are put in place. The status of implementation of action plans for major observations is submitted to every Audit Committee for review.
The Audit Committee reviews reports submitted by the management and audit reports submitted by Internal and Statutory Auditors. The Audit Committee also meets Statutory Auditors to ascertain, inter alia, their views on the adequacy of internal control systems. Based on the Committee''s evaluation, it was concluded that as of March 31, 2022, the internal financial controls were adequate and operating effectively.
The Company has complied with the specific requirements as laid out under Section 134(5)(e) of the Companies Act, 2013. It calls for the establishment and implementation
of an Internal Financial Control framework that supports compliance with the requirements of the Act concerning the Director''s Responsibility Statement. Adequacy of controls of the processes is also being reviewed by the Internal Controls function. Suggestions to further strengthen the processes are shared with the respective process owners. Any significant findings, along with management response and status of action plans, are periodically shared with and reviewed by the Audit Committee.
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(5) of the Act:
a. i n the preparation of Annual Accounts for the year ended on March 31, 2022, the applicable accounting standards have been followed and there are no material departures
b. Appropriate accounting policies have been selected and applied them consistently. And made Judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as of March 31, 2022, and of the profit of the Company for the period ended March 31, 2022
c. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities
d. Annual accounts of the Company have been prepared on a going concern basis
e. I nternal financial controls have been laid down and are being followed by the Company and that such internal financial controls are adequate and are operating effectively
f. Proper system to ensure compliance with the provisions of all applicable laws are in place and are adequate and operating effectively
In line with the requirements of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a Policy on Related Party Transactions (Policy) which is also available on the Company''s website at https://www.skf.com/binaries/pub12/ Images/0901d19680cb2a54-Policy-on-Related-Party-Transactions-2021_tcm_12-583317.pdf. The Policy is
reviewed by the Board of Directors of the Company at regular intervals. The objective of the Policy is to ensure proper approval, disclosure and reporting of transactions as applicable, between the Company and any of its related parties. The Audit Committee of the Company has granted omnibus approval for the Related Party Transactions (RPTs) which are of repetitive nature and/or entered in the Ordinary Course of Business and are at arm''s length. The Audit Committee also reviews all RPTs on a quarterly basis in line with the omnibus approval granted by them.
All transactions with related parties during the year were on an arm''s length basis and were in the ordinary course of business. The Company has entered into transactions with related parties, which are material in nature, i.e., transactions exceeding 10% of the annual consolidated turnover as per the last audited financial statements. The particulars of contracts or arrangements entered into by the Company with related parties referred to in Section 188(1) in the prescribed Form AOC-2, in accordance with Section 134(3) (h) of the Act, and Rule 8(2) of the Companies (Accounts) Rules, 2014, is attached as Annexure IV of this Report.
The disclosures related to RPTs in accordance with accounting standards are also provided in the Financial Statements.
None of the Directors and the Key Managerial Personnel have any pecuniary relationships or transactions with the Company.
A confirmation as to the compliance of Related Party Transactions as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is also sent to the Stock Exchanges along with the quarterly compliance report on Corporate Governance.
The Company has invested in fully paid-up equity shares representing 26% (Twenty Six Percent) of the share capital of the special purpose vehicle company (M/s Sunstrength Renewables Private Limited) for the execution of captive solar power project for the Pune plant of the Company in the year 2021. Your company is planning to expand this investment considering the recent changes in the local electricity laws.
Thus, as of March 31, 2022, the Company has one Associate Company, i.e., Sunstrength Renewables Private Limited. Further, there are no subsidiaries or joint venture companies.
The statement containing the salient features of the Financial Statements of the Company''s subsidiaries/ joint ventures/ associates are given in Form AOC - 1, forming part of the Annual Report as Annexure V.
Further, pursuant to the provisions of Section 136 of the Act, the consolidated financial statements along with relevant documents are available on the website of the Company https://www.skf.com/in
Over the years, SKF India has established a reputation for doing business with integrity and displaying zero tolerance for any form of unethical behaviour. Your Company has in place a system through which Directors, employees and business associates may report unethical behaviour, malpractices, wrongful conduct, fraud and violation of the Company''s code of conduct without fear of reprisal. Your Company has framed a Vigil Mechanism Policy in confirmation with Section 177(9) of the Act and Regulation 22 of SEBI LODR wherein the employees are free to report any improper activity resulting in violation of laws, rules, regulations or code of conduct by any of the employees directly to the Chairperson of the Audit Committee besides others. The Board''s Audit Committee oversees the functioning of this policy. The Audit Committee periodically reviews the existence and functioning of the mechanism. It reviews the status of complaints received under this policy on a quarterly basis.
During the year under review, the Company reached out to employees through Compliance Week Celebration, Workshops, e-learning modules and, periodic compliance communications for creating greater awareness with respect to its Code of Conduct including - Fair Competition Directive and Anti-bribery and Anti-Corruption Directive. This has helped in achieving a high level of engagement and compliance among the employees. The Vigil Mechanism Policy aims to:
⢠Allow and encourage stakeholders to bring to the Management''s notice, concerns about unethical behaviour, malpractice, wrongful conduct, actual or suspected fraud or violation of policies and leak or suspected leak of any unpublished price sensitive information
⢠Ensure timely and consistent organisational response
⢠Build and strengthen a culture of transparency and trust
⢠Provide protection against victimisation
The above mechanism has been appropriately communicated within the Company across all levels
and the details of the policy have been disclosed on the Company''s website and can be accessed on https://www. skf.com/binaries/pub12/Images/0901d196809a699a-Vigil-Mechanism-Policy-April-2019_1115_tcm_12-526427.pdf
The fulfilment of environmental, social and governance responsibility is an integral part of the way your Company conducts its business. The detailed Business Responsibility Report covering the above initiatives has been prepared in accordance of Regulation 34 of SEBI LODR and forms a part of the Annual Report.
The Company has not accepted or renewed any deposits falling under the ambit of Chapter V of the Companies Act, 2013 and the Rules framed thereunder. No amount on account of principal or interest on deposits from the public was outstanding as of March 31, 2022.
At the 58th Annual General Meeting of the Company, M/s Price Waterhouse & Co Bangalore LLP, Chartered Accountants (Firm Registration No. 007567S/S-200012) were appointed as Statutory Auditors of the Company for a term of four consecutive years till the conclusion of the 62nd Annual General Meeting of the Company to be held in the year 2023, on such remuneration as may be decided by the Audit Committee / Board of Directors of the Company from time to time.
M/s Price Waterhouse & Co Bangalore LLP, Chartered Accountants (Firm Registration No. 007567S/S-200012), have submitted their Report on the Financial Statements of the Company for the FY 21-22, which forms a part of the Annual Report 2021-22. There are no observations, qualifications, reservations, adverse remarks or disclaimers of the Auditors in their Audit Reports that may call for any explanation from the Board of Directors.
M/s Price Waterhouse & Co Bangalore LLP have tendered their resignation from position of the Statutory Auditor of the Company w.e.f May 11, 2022 post completion of the audit for year ended March 31, 2022.
Company has submitted intimation to Stock Exchange for Resignation of Auditor dated May 11, 2022 along Annexure A - the information required from the Auditor in pursuance to SEBI Circular no C1R/CFD/CMD1/114/2019 dated October 18, 2019
Audit Committee is aligned with reason of Auditor Resignation
Board has filled casual vacancy for FY 2022-23 caused due to resignation of M/s Price Waterhouse & Co Bangalore LLP, Chartered Accountants from position of Statutory Auditors by appointing M/s Deloitte Haskins & Sells, LLP as statutory Auditor of the Company w.e.f 12th May 2022 till the conclusion of 61st Annual General Meeting , subject to approval of shareholders at ensuing 61st Annual General Meeting.
Board has also recommended appointment of M/s Deloitte Haskins & Sells, LLP for period of 5 years from conclusion of 61st Annual General Meeting.
M/s Deloitte Haskins & Sells, LLP have submitted their consent to act as the Statutory Auditors of the Company along with their eligibility letter confirming that their appointment meets the requirement of Section 141 of the Companies Act, 2013.
I n terms of the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Audit Committee has recommended and the Board had appointed M/s Parikh & Associates, Company Secretaries, as the Secretarial Auditor for conducting Secretarial Audit of the Company for the FY 21-22.
The report of the Secretarial Auditor for the financial year ended on March 31, 2022 in MR-3 is attached as Annexure VI of this Report. The Secretarial Audit Report is self-explanatory and does not call for any further comments. The Secretarial Audit Report does not contain any qualification, reservation/observation or adverse remarks in Secretarial Audit Report. During the year under review, the Company is in compliance with the applicable Secretarial Standards, specified by the Institute of Company Secretaries of India (ICSI).
Pursuant to SEBI Circular CIR/CFD1/27/2019 dated 8th February 2019 read with and Regulation 24A of SEBI LODR, all listed entities shall, additionally, on annual basis, submit a report to the stock exchange(s) on compliance of all applicable SEBI Regulations and circulars / guidelines issued thereunder within 60 days of end of Financial Year. Such report shall be submitted by Company Secretary in practice to the Company in the prescribed format.
The Company has received Secretarial Compliance Report from M/s Parikh & Associates, Company Secretaries for the Financial Year ended 31st March 2022 and it has been submitted to the stock exchange(s) within the stipulated time. Certificate forms part this Annual Report as Annexure VII.
A certificate from M/s Parikh & Associates, Company Secretaries regarding compliance with sub regulation 10(i) of regulation 34(3) of schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 also forms part of this Annual Report as Annexure VIII.
The Company is required to maintain cost records under Section 148(1) of the Act read with Companies (Cost Records and Audit) Rules, 2014. Accordingly, cost records have been maintained by the Company.
I n terms of Section 148 of the Act read with Companies (Cost Records and Audits) Rules, 2014, M/s. RA & Co. (Firm Registration No. 000242), Cost Accountants were appointed as Cost Auditors of the Company for FY 21- 22 by the Board of Directors on the recommendation of the Audit Committee. The Cost Auditors have confirmed by giving their written consent that their appointment meets the requirement of Section 141 of the Companies Act, 2013.
The Cost Audit Report for the FY 21-22 Company will be filed with the Ministry of Corporate Affairs on or before the due date.
As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor, as approved by the Board of Directors on the recommendation of the Audit Committee, is required to be placed before the Members in a general meeting for its ratification. Accordingly, a resolution for seeking Members'' ratification for the remuneration payable to M/s RA & Co, Cost Auditor is included in the Notice convening the 61st Annual General Meeting.
During the year under review, neither the Statutory Auditors nor the Secretarial Auditor nor the Cost Auditor has reported to the Audit Committee of the Board, under Section 143(12) of the Act, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in this Report.
As on the date of this report, the Company has not received any significant or material orders passed by any Regulatory Authority, Court or Tribunal, which shall impact the going concern status and Company''s operations in future.
The information required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached as Annexure IX to this Report.
The statement containing names of the top 10 employees, in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the Members, excluding the aforesaid Annexure. In terms of Section 136 of the Act, the said Annexure is open for inspection and any member interested in obtaining a copy of the same may write to the Company Secretary at [email protected].
None of the employees listed under the said rules are related to any Director of the Company.
The Company enjoys harmonious and healthy industrial relations due to its vibrant work culture and believes in a collaborative approach at work. This mutual trust and caring spirit helps in maintaining a harmonious environment across all business units. The enthusiasm and unstinting efforts of employees have enabled the Company to remain in the leadership position in the industry.
Pursuant to the provisions of Section 124 of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF Rules) and subsequent amendment thereof, the amount of dividends, which remained unpaid or unclaimed for a period of seven years from the due date, is required to be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government.
The Company has accordingly transferred INR 2,279,775./-(Rupees Twenty Two Lakhs Seventy Nine Thousand and Seven Hundred and Seventy Five only) being the unpaid and unclaimed dividend amount pertaining to the year 2013-14 to the IEPF in October, 2021 and INR 2,275,087.5 June 2021.
As per the IEPF Rules, all shares in respect of which dividend has not been paid or claimed for seven consecutive years shall be transferred by the Company to the designated Demat Account of the IEPF Authority within a period of 30 days of such shares becoming due to be transferred
to the IEPF. Accordingly, the Company has transferred all the shares pertaining to the year 2013-14 to the IEPF Authority in respect of which dividend has not been paid or claimed by shareholders for seven consecutive years or more after following the prescribed procedure.
Further amount due in respect of FY 14-15 and shares where dividend had remained unpaid for the last consecutive seven years will be transferred to the IEPF within the stipulated time period.
The Company has sent individual notices to the concerned shareholders, whose shares and dividends are liable to be transferred to the IEPF Authority to their latest available addresses.
The Company has displayed full details of such shareholders, dividends and shares on its website at www.skf.com/in. Shareholders are requested to verify the details of the shares liable to be transferred as aforesaid.
The particulars of loans given, investments made or guarantee/security provided are disclosed in the financial statements. No fresh loan was given during the year. The Company did not give any guarantee or provide any security in connection with any loan and did not acquire any securities during the financial year.
There are no fresh investments done during FY 21-22. The Company had invested in the special purpose vehicle company, for the purchase of electricity generated from captive solar power project for the Pune plant of the Company. As per local electricity laws of Maharashtra, SKF India mandatorily needs to invest in at least 26% equity shares of the power producer company under the captive solar farm model. Accordingly, the first tranche of investment was done in December 2020 and the second tranche of investment was done in March 2021 by SKF India in Sunstrength Renewables Private Limited to comply with the captive requirements. Your company is planning to expand this investment considering the recent changes in the local electricity laws.
Please refer Note of financial statements for investments under Section 186 of the Companies Act, 2013.
Pursuant to the provisions of Section 92(3) of the Act, a copy of the annual return of the Company for the Financial Year ended March 31, 2022 has been placed on the website of the Company. The same can be accessed by any person through the below-given weblink. https://www.skf. com/binaries/pub12/Images/0943da8e215cf1f8-Annual-Return-31-March-2022-website_tcm_12-597687.pdf.
43. POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
At SKF India, we strive to create an environment where there is no discrimination between individuals at any point on the basis of race, colour, gender, religion, political opinion, national extraction, social origin or age.
At SKF India, every individual is expected to treat his/ her colleagues with respect and dignity. This is enshrined in values and in the Code of Ethics & Conduct of the Company. The Company also has in place a Prevention of Sexual Harassment Policy. This is in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. All employees (permanent, contractual, temporary and trainees) are covered under this policy.
The Company has complied with provisions relating to the constitution of the Internal Committee (IC) under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to redress complaints received regarding sexual harassment. This has been widely communicated internally and is uploaded on the Company''s intranet portal.
I nternal committees comprising management staff across locations and an external member are in place. These include majority women members to redress complaints relating to sexual harassment. The employees are sensitised from time to time in respect of matters connected with the prevention of sexual harassment. Awareness programmes are conducted at unit levels to sensitise the employees to uphold the dignity of their colleagues at the workplace. The Company also conducted an e-learning programme for employees to cover various aspects of the subject matter.
1. |
Number of complaints pending as on the beginning of FY 21-22 |
[1] |
2. |
Number of complaints of sexual harassment received in the year |
[0] |
3. |
Number of complaints disposed off during the year |
[1] |
4. |
Number of complaints pending as on the end of FY 21-22 |
[0] |
ICC Committee details are provided in Posh Policy The POSH Policy is available on website of the Company
https://www.skf.com/binaries/pub12/Images/0901d
19680abcff8-PreventionOfSexualHarassmentatWorkpla
AND OUTGO
Pursuant to the provisions of Section 134 of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts)
Rules, 2014 the details of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo are attached as Annexure X to this Report.
45. Explanation OR cOMMENTS ON QUALIFIcATIONS, RESERVATIONS OR
BY THE STATUTORY AUDITORS, SEcRETARIAL AUDITORS
There were no qualifications, reservations or adverse remarks made by the Statutory Auditors in the Audit Report on the Standalone and Consolidated Financial Statements for the Financial year ended 31st March 2022.
The Report of Secretarial Auditors for the Financial Year ended 31st March 2022 is also unmodified.
46. PROcEEDING UNDER INSOLVENcY AND BANKRUPTcY cODE, 2016
No application or any proceeding has been filed against the Company under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) (IBC Code) during FY 21-22.
47. THE DETAILS OF THE DIFFERENcE BETwEEN THE AMOUNT OF THE VALUATION DONE AT THE TIME OF THE ONE-TIME SETTLEMENT AND THE VALUATION DONE wHILE TAKING A LOAN FROM THE BANKS OR FINANcIAL INSTITUTIONS, ALONG wiTH THE REASONS THEREOF
During the year under review, the Company has not made any such settlement; therefore, the same is not applicable.
48. cODE OF cONDUcT FOR BOARD AND SENIOR MANAGEMENT
The Company has adopted the Code of Conduct for the Directors and Senior Management and the same is available on the Company''s website https://www.skf.com/ binaries/pub12/Images/0901d196809a6aba-Code-of-Conduct-for-Directors-Senior-Management_tcm_12-526431.pdf
All Directors and Senior Management personnel have affirmed their compliance with the said Code. A declaration pursuant to the Regulation 26 (3) read with part D of the Schedule V of the SEBI LODR, 2015 signed by Managing Director to this effect is annexed as a part of Annual Report as Annexure XI.
The Board of Directors, to the best of its knowledge, affirms that the Company has complied with the applicable Secretarial Standards (SS) issued by the ICSI (SS1 and SS2), respectively relating to Meetings of the Board and its Committees, which have mandatory application during the year under review.
Statements in this âDirector''s Report'' and âManagement Discussion and Analysis Report'' describing the Company''s objectives, projections, estimates, expectations or predictions may be forward-looking statements within the meaning of applicable security laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company''s operations include raw material/ fuel availability and its prices, cyclical demand and pricing in the Company''s principal markets, changes in the Government regulations, tax regimes, economic developments, unforeseen situations like pandemic within the country in which your Company conducts business and other ancillary factors.
The Directors express their deep sense of gratitude to the Principals, Aktiebolaget SKF, customers, members, suppliers, employees, bankers, business partners/ associates and all other stakeholders for their exemplary and valued contribution and look forward to their continued assistance in future.
For and on behalf of the Board, SKF india limited
gopal Subramanyam
Bengaluru Chairman
May 11, 2022 DIN: 06684319
Mar 31, 2019
Dear Members,
The Directors of your Company are pleased to present the 58th Annual Report, with audited financial statements for the financial year ended on March 31, 2019.
Financial Results
Rs. in million
Year ended Mar 31, 2019 |
Year ended Mar 31,2018 |
|
Revenue from operations |
30,345.3 |
28,048.2 |
Other Income |
923.8 |
713.6 |
Total Income |
31,269.1 |
28,761.8 |
Operating Expenditure |
25,563.3 |
23,749.5 |
Depreciation |
463.9 |
457.4 |
Profit before Tax |
5,241.9 |
4,554.9 |
Provision for taxation |
1,884.2 |
1,596.0 |
Profit After Tax |
3,357.7 |
2,958.9 |
Other Comprehensive Income |
(22.6) |
14.8 |
Total Comprehensive Income for the period |
3,335.1 |
2,973.7 |
Operations
The revenue from operations of the Company for year ended on March 31, 2019 stood at Rs.30,345.3 million as compared to Rs.28,048.2 million in the previous year. The revenue figures of the two years are not directly comparable due to the reclassification of indirect taxes following the introduction of GST effective July 1, 2017. The Companyâs profit before tax for the year ended March 31, 2019, was Rs.5,241.9 million as compared to Rs.4,554.9 million in the previous year.
The profit after tax for the period ended March 31, 2019 was Rs.3357.7 million, compared to Rs.2,958.9 million during the previous year.
The Company incurred a capital expenditure of Rs.636.9 million during the year.
Material Changes and commitment if any, affecting financial position of the Company
There have been no material changes and commitments that have occurred between the end of the financial year of the Company to which these financial statements relate and the date of this report which affect the financial position of the Company.
Dividend
Pursuant to Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations), the dividend distribution policy approved by the Board has been put up on the website of the Company and can be assessed at http://www.skf.com/in/investors/shareholder-information/index.html.
In line with the said policy, the Board of Directors is pleased to recommend a dividend of Rs.12 per Equity share of Rs.10 Face value for the year ended March 31, 2019, as compared to Rs.12 per Equity share, for the preceding year ended March 31, 2018. This dividend is subject to the approval of the Members at the 58th Annual General Meeting of the Company.
The Register of Members and Share Transfer Books will remain closed from July 15, 2019 to July 23, 2019 (both days inclusive) for the purpose of payment of the dividend for the financial year ended March 31, 2019 and the Annual General Meeting.
During the year, unclaimed dividend pertaining to the dividend for the year 2011 was transferred to the Investor Education and Protection Fund.
Transfer to Reserves
The Board of Directors has decided to retain the entire amount of profits for the year 2018-19 in the profit and loss account.
Buyback of equity shares
Considering the Companyâs strong cash reserves and its healthy cash flow generation, the members had approved a proposal for buyback of equity shares of the Company, at a price of Rs.2100/per share during the fiscal year 2018-19. The offer size of the buyback was 21.73% of the aggregate paid-up equity share capital and free reserves of the Company and represented 3.70% of the total issued and paid-up capital equity share capital of the Company. The Company had utilized Rs.3990 million for the Buyback of equity shares of the Company and the share capital of the Company after the said buyback now stands reduced at Rs.494.38 million. The buyback process was completed and the shares were extinguished on February 20, 2019.
Awards / Accolades
Your Directors are happy to report that during the year, your Company received numerous awards and felicitations from distinguished bodies for achievements in various fields that reemphasized SKFâs strong position in the Indian Manufacturing Industry, making us proud of our achievements and some of the significant achievements were:
- SKF India Pune factory won the Frost & Sullivan
Manufacturing Excellence Awards 2018 for the Future Ready Factory for Engineering Sector, Large Business. Frost & Sullivan 15th âIndia Manufacturing Excellence Awards (IMEA) 2018â recognizes companies for outstanding achievement and performance in a range of regional and global markets for superior leadership, technological innovation, customer service, strategic product development
- SKF India wins the âBest Sustainability Practiceâ Award from Tata Steel SSE. This âBest sustainability Practiceâ Award was in the Social Excellence Category at the third edition of the ââ Supplier Sustainability Expo (SSE)ââ
- SKF in India is one of Top 100 âBest Companies for Women in India 2018â. Indiaâs first diversity advocate and workplace inclusion expert- AVTAR, along with Working Mother Media, hosted the third edition of the Best Companies for Women in India (BCWI) study in 2018, where SKF India was one of the Top 100.
- SKF India is recognized with the Best Vendor award 2018-19 from the Transportation group of BHEL, Bhopal. The award was arbitrated on three major criteria; Product Quality, Delivery and Technical / After Sales Support.
- ACE Designers awards SKF India as the winner of ââOutstanding Supportâ 2017-18 at Bangalore.
Ace Designers, is one of Indiaâs largest machine tool manufacturing companies, located in Bengaluru.
- SKF YES Bengaluru Center has been accredited by TVS Motor company as TVS Certified Vocational Center
Managementâs Discussion and Analysis and Outlook
A detailed review of operations, performance, opportunities, and outlook of the Company is given in the Managementâs Discussion and Analysis Report , which forms part of this Report as Annexure I.
Corporate Governance
Your Directors reaffirm their continued commitment to good corporate governance practices.
Pursuant to Regulation 34 of the SEBI Regulations and relevant sections of the Act, Report on Corporate Governance and Auditors Certificate thereon forms part of this report as Annexure II.
Directors and Key Managerial Personnel
As per the provisions of Sections 149 and 152 of the Companies Act, 2013 (Act), the shareholders at their 54th Annual General Meeting held on April 23, 2015, had approved the reappointment of all the Independent Directors of the Company for tenure of upto five consecutive years until July 2019. None of the Independent Directors are liable to retire by rotation. In accordance with Section 149(7) of the Companies Act, 2013, each Independent Director has confirmed to the Company that he or she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
In order to bring fresh thinking on the Board, Mr. R. Makhija and Mr. P M Telang have tendered their resignation to be effective from May 16, 2019. Ms. H. Hattangady and Mr. P R Menon have tendered their resignation for personal reasons to be effective from April 1, 2019 and May 16, 2019 respectively.
The Board has placed on record its deep sense of appreciation for the valuable contributions made towards the operations and growth of the Company by the Directors during their respective tenures. On behalf of SKF, we express our deepest gratitude and appreciation for their dedicated support and guidance.
In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Bernd Stephan (DIN: 07835737) retires by rotation and being eligible, offers himself for re-appointment.
Mr. Carl Orstadius, Managing Director resigned from the Board effective from August 16, 2018 on account of taking a new position as the Automotive and Aerospace Group Controller for SKF Group based in Gothenburg, Sweden. The Board placed its sincere appreciation and gratitude for his valuable contribution and for his outstanding work during his brief tenure and wish him a great future ahead with SKF Group.
On the recommendation of the NRC, Mr. Manish Bhatnagar was appointed as an Additional Director of the Company with effect from August 16, 2018 by the Board of Directors in accordance with Section 161(1) of the Act and Article 129 of the Companyâs Article of Association. Mr. Bhatnagar holds office up to the date of the forthcoming AGM and a notice under Section 160(1) of the Act has been received from a member signifying his intention to propose Mr. Bhatnagarâs appointment as Director. Mr. Bhatnagar was also appointed as Managing Director of the Company for a period of 5 years commencing from August 16, 2018 to August 15, 2023. His appointment and the terms and conditions of his appointment including remuneration payable to him, require approval of the members at the ensuing AGM.
The Board on the recommendation of the Nomination and Remuneration Committee appointed Mr. Aldo Cedrona as an Additional Director on May 17, 2019. Mr. Gopal Subramanyam and Ms. Anu Wakhlu as Independent Additional Directors from May 16, 2019.
Pursuant to the provisions of Section 149 of the Act, the independent directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. There has been no change in the circumstances affecting their status as independent directors of the Company.
Brief particulars and expertise of directors seeking appointment / re-appointment together with their other directorships and committee memberships have been given in the annexure to the notice of Annual General Meeting in accordance with the requirements of SEBI Regulations and applicable Secretarial Standards.
Key Managerial Personnel
In terms of Section 203 of the Act, the following are the Key Managerial Personnel (KMP) of the Company:
- Mr. Manish Bhatnagar, Managing Director
- Mr. Chandramowli Srinivasan, Chief Financial Officer
- Mr. Pradeep Bhandari, Company Secretary
Board Meetings
The Board of Directors met six times during the year. Details of Board meetings and other Committee meetings of the Board are laid out in Corporate Governance report, which forms part of this annual report.
Board Evaluation
The Board of Directors has carried out an annual evaluation of its own performance, of the directors individually as well as the evaluation of the Committees, pursuant to the provisions of the Act and SEBI Regulations.
The process followed for Board evaluation includes:
i) Feedback was sought from each Director about their views on the performance of the Board / Committees, covering various criteria such as degree of fulfilment of key responsibilities, effectiveness of Board processes, Board culture and responsibilities to various Committees.
ii) NRC then discussed the above feedback received from all the Directors.
iii) Based on the inputs received Chairman of the NRC also apprised the Independent Directors at their meeting, summarizing the inputs received from the Directors as regards Board performance as a whole and of the Chairman. The performance of the Non-Independent Non-Executive Directors and Board Chairman was also reviewed by them.
iv) Post the meeting of the Independent Directors their collective feedback on the performance of the Board was discussed by the Chairman of the NRC with the Chairman of the Board.
v) Significant highlights, learning and action points arising out of the evaluation were presented to the Board and action plans are drawn up wherever required.
Familiarization Programme
In compliance with the requirement of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has put in place a familiarization program for Independent Directors to familiarize them with the working of the Company, nature of the industry in which the Company operates, business model of the Company, their roles, rights and responsibilities vis-a-vis the Company etc. Details of the Familiarization Programme are explained in the Corporate Governance Report and is also available on the Companyâs website at http://www.skf.com/in/ investors/shareholder-information/index.html.
Appointment of Directors and Remuneration Policy
A policy with well-defined criteria is in place for the selection of candidates for appointment as Directors, Key Managerial Personnel and senior leadership positions. The relevant information has been disclosed in the Corporate Governance Report.
Audit Committee
The Company has in place an Audit Committee in terms of the requirements of the Companies Act, 2013. The details relating to the same are given in the Report on Corporate Governance forming part of this Report. The Board has accepted all recommendations made by the Audit Committee during the year.
Corporate Social Responsibility
The Company has always maintained a high level of social engagement and social responsibilities. The initiatives in the social sphere have always been built on the Companyâs Values of âSKF Careâ which comprises of four pillars, namely âBusiness care /Employee care/ Environment care and Community careâ. Community care has been at the core of SKF business practices and SKF is running multiple initiatives to empower the communities.
Corporate Social Responsibility (âCSRâ) Committee reviews and monitors the CSR projects and expenditure undertaken by the Company. The brief outline of the CSR Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure III of this report.
Risk Management
Your Company has developed and implemented a Risk Management Policy which is approved by the Board. The Risk Management Policy, inter alia, includes identification of risks and their rating based on likelihood of the event and the impact it is expected to have on the Companyâs operations and performance. The risks that fall under high likelihood and high impact are identified as key risks for which detailed mitigation plans are developed and integrated with the business processes and audit plan.
The Companyâs assets continue to be adequately insured against the risk of fire, riot, earthquake, terrorism and the risk of loss of profits also stands insured amongst other things. In addition, adequate coverage has been taken to cover product liability, public liability and Directorâs and officer liability. Also, all the employees are covered against the risk of loss of life, hospitalization and personal accident.
A section on Risk management practices of the Company forms a part of âManagement Discussion and Analysisâ in this Annual Report.
Safety / Sustainability
SKF India continued to work on safety and sustainability aspects of business. We continue to adopt energy conservation initiatives and constantly strive to provide products, services and solutions which are environment friendly and socially viable. The âSKF Beyond Zeroâ is our strategy for actively reducing the environmental impact of our manufacturing operations, products and supplier actions. Our EHS policy outlines guidelines for conservation and safeguarding of energy, water and natural resources for the entire supply chain and also promotes green procurement.
Safety is a core value of the Company. The Company has adopted a structured approach towards implementation of Safety Policies and Programs to integrate safety with business processes with a goal to continuously improve safety performance Your Company treats any fatality on any of its premises, of any of its employees, contractor/associate employees or any third party, with equal gravitas and is committed to taking the entire working environment and behavior to the highest safety standards.
Directorsâ Responsibility Statement
Based on the framework of internal financial controls (IFC) and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost auditor and secretarial auditors including audit of IFC for financial reporting and the reviews performed by the Management and Committees of the Board, the Board is of the opinion that the Companyâs internal financial controls were adequate and effective during the financial year ended March 31, 2019.
Accordingly, pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm that:
a. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;
b. appropriate accounting policies have been selected and applied consistently. Judgments and estimates made are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at March 31, 2019 and of the profit of the Company for that period;
c. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d. annual accounts of the Company have been prepared on a going concern basis;
e. internal financial controls have been laid down and are being followed by the Company and that such internal financial controls are adequate and are operating effectively; and
f. proper systems to ensure compliance with the provisions of all applicable laws are in place.
Related Party Transactions
In accordance with Section 134(3) (h) of the Act, and Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of contracts or arrangements entered into by the Company with related parties referred to in Section 188(1) in Form AOC-2 is attached as Annexure IV of this report. All transactions with related parties are approved by the Audit Committee / Board in line with the prevailing regulatory requirements for such transactions including prior omnibus approval of the Audit committee as permitted by law . Statement giving details of the Related Party Transactions entered into against such prior approval taken, is placed before the Audit Committee on a quarterly basis.
The details of related party disclosures form part of the notes to the financial statements provided in this annual report. In line with the requirements of the Act and the SEBI Listing Regulations, the Company has formulated a policy on related party transactions as approved by the Board which is uploaded on the Companyâs website and can be accessed at the web-link: http://www.skf.com/binary/83-166889/Policy-on-Related-Party-Transactions-modifed-highlighed-Sept-2014.pdf
None of the Directors and Key Managerial Personnel had any pecuniary relationships or transactions vis-a-vis the Company.
Subsidiaries, Joint Venture and Associates
The Company doesnât have any Subsidiary or Joint Venture or any Associates as per definition of the Companies Act, 2013.
Vigil Mechanism / Whistle Blower Policy
Your Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting the highest standard of professionalism, honesty, integrity and ethical behavior.
Pursuant to Section 177(9) of the Act, a vigil mechanism was established for directors, employees and all other stakeholders to report to the management instances of unethical behavior, actual or suspected, fraud or violation of the Companyâs code of conduct or ethics policy. The Vigil Mechanism Policy provides a mechanism for employees of the Company to also directly approach the Chairman of the Audit Committee of the Company for redressal and the Policy for the same has been disclosed on the Companyâs website. âhttp://www.skf.com/binary/83-166890/ Vigil-Mechanism-Policy-31.07.2014-FINAL.pdfâ
Business Responsibility Report
SKF is continuously working to reduce the environmental impact of its business activities and developing products and solutions that benefit the energy, emissions and disposal requirement of the customers.
As required under SEBI Regulations, a Business Responsibility Report is attached and is a part of this annual report.
Fixed Deposits
The Company has not accepted any deposits from the public covered under Chapter V of the Act. No amount on account of principal or interest on deposits from public was outstanding as on March 31, 2019.
Statutory Auditors
Pursuant to provisions of Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014, M/s Price Waterhouse & Co Bangalore LLP, Chartered Accountants (Firm Registration No. 0075675S with ICAI), were appointed as Statutory Auditors of the Company for a term of four years, to hold office from the conclusion of 54th Annual General Meeting held on April 23, 2015, until the conclusion of 58th Annual General Meeting, subject to ratification of their appointment at every subsequent Annual General Meeting.
A certificate from them has been received to the effect that their appointment as Statutory Auditors of the Company, if made, at ensuing Annual General Meeting would be according to the terms and conditions prescribed under Sections 139 and 141 of the Act and Rules framed there under.
A resolution seeking their appointment, forms part of the Notice convening 58th Annual General Meeting and the same is recommended for your consideration and approval.
The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Act. There have been no qualifications, reservations, adverse remarks or disclaimers in the auditorâs reports, requiring explanation or comments by the Board.
Secretarial Auditor
M/s Parikh & Associates, were appointed as Secretarial Auditor of the Company pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 to conduct a Secretarial Audit of the Company for 2018-19.. The Report of the Secretarial Auditor is attached as Annexure V of this report.
The Secretarial Audit Report does not contain any qualification, reservation or adverse mark or disclaimers. The Company confirms compliance with the requirements of Secretarial Standards 1 and 2 issued by the Institute of the Company Secretaries of India.
Cost Auditor
M/s. RA & Co. (Firm Registration No. 000242 ), Cost Accountants were appointed as Cost Auditors of the Company for the year 2018-19. The Cost Auditors have confirmed that their appointment meets the requirements of Section 141 of the Companies Act, 2013. The Cost Audit is under process and the Company will submit the Cost Auditorsâ report to the Central Government in time. The Cost Audit Report of the Company for the Financial year ended March 31, 2018 was filed within the prescribed time limit.
As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a resolution for seeking membersâ ratification for the remuneration payable to M/s RA & Co, Cost Auditor is included in the Notice convening the Annual General Meeting.
Reporting of frauds by Auditors
During the year under review, the Statutory Auditors, Cost Auditors and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Employees to the Audit Committee under Section 142(12) of the Companies Act, 2013, details of which needs to be mentioned in this Report.
Significant and material orders passed by the Regulators or Courts
There were no significant and/or material orders, passed by any Court or Regulator or Tribunal, which may impact the going concern status or the Companyâs operations.
Particulars of Employees
The information required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure VI to this report.
In terms of the first provision to Section 136 of the Act, the Annual Report is being sent to the Members excluding the aforesaid information. Any member interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company. None of the employees listed under the said Rules are related to any Director of the Company.
Industrial Relations
The year under review witnessed cordial Industrial Relations across all manufacturing locations of the Company.
Building flexibility, driving productivity and driving competence in the factories has been a continuous effort. Training programs for multiskill development are driven by Kushal Skill Centers in all factories. Experienced operators from the shop floor have been developed as internal trainers. The concept of Circle Leaders and Team Leaders which was launched in two factories continue to be a vehicle for development and growth to the blue collar employees. The long term wage settlements signed with the unions also foster flexibility and enhancement in productivity in the factories. The blue collar employees are provided with programs to improve their life skills to develop their personalities which will go a long way to building the culture in the factories. Leadership Development programs were also introduced for Unions and Work Council members to build their competence and also nurture a collaborative way of working.
In order to develop skills and foster togetherness at the workplace, your Company runs multiple training and engagement programs covering a wide range of topics including safety, environment, quality, TPM, and six sigma etc.
Transfer of Unpaid and Unclaimed Amounts to IEPF
Pursuant to the provisions of Section 125 of the Companies Act, 2013, the declared dividends, which remained unpaid or unclaimed for a period of seven years, have been transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government.
As per the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 notified by the Ministry of Corporate Affairs and subsequent amendment thereof, the Company has transferred shares to such authority in respect of which dividend has not been paid or claimed by shareholders for seven consecutive years or more.
The Company has sent individual notices to concerned shareholders, whose shares and dividend are liable to be transferred to IEPF Authority to their latest available addresses.
The Company has displayed full details of such shareholders, dividend and shares on its website at www.skf.com/in. Shareholders are requested to verify the details of the shares liable to be transferred as aforesaid.
Particulars of Loans, Guarantees or Investments
The particulars of loans given, investment made or guarantee given or security provided have been disclosed in the financial statements, no fresh loan has been given during the year. The Company did not give any guarantee or provide any security in connection with any loan and did not acquire any securities during the financial year.
Extracts of Annual Return
Pursuant to Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014 an extract of the Annual Return in Form MGT-9 is provided in Annexure VII to this Report.
Policy on Prevention of Sexual Harassment at Workplace
The Company is an equal opportunity provider and consciously strives to build a work culture that promotes the dignity of all employees. Our Policy is gender neutral. The Company has adopted zero tolerance for sexual harassment at workplace and has formulated a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder. All women and men - permanent, temporary or contractual, including service providers, visitors are covered under the policy. This has been widely communicated internally and is uploaded on the Companyâs intranet portal. An internal Committee comprising of 14 management staff across locations, including an NGO member is in place. This includes seven women to redress complaints relating to sexual harassment. Besides, in each of the plants, there is at least one nodal person in each region to receive, listen and forward complaints directly to the Committee.
During the year, one complaint which required investigation was received by the Company and the same was investigated and appropriate action was taken. There were no complaints pending at the end of the year. Awareness programs were conducted across the Company to sensitize employees to uphold the dignity of their colleagues at the workplace, particularly with respect to prevention of sexual harassment. A few employees also attended training programmes conducted by an external agency.
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
The information on conservation of energy and technology absorption and foreign exchange earnings and outgo stipulated under under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as Annexure VIII to the Report.
Acknowledgements
The Board of Directors take this opportunity to thank its Principals, Aktiebolaget SKF, customers, members, suppliers, employees, bankers and business partners / associates for their exemplary and valued contribution towards the Company.
For and on behalf of the Board
SKF India Limited
Rakesh Makhija
Chairman
DIN:117692
Bengaluru
May 15, 2019
Mar 31, 2018
Directorsâ Report
Dear Members,
The Directors of your Company are pleased to present the 57th Annual Report, with audited financial statements for the financial year ended on March 31, 2018.
Financial Results
Rs, in million
Year ended Mar 31, 2018 |
Year ended Mar 31, 2017 |
|
Revenue from operations |
28048.2 |
28355.4 |
Other income |
713.6 |
873.3 |
Total income |
28761.8 |
29228.7 |
Operating Expenditure |
23749.5 |
24993.9 |
Depreciation |
457.4 |
478.8 |
Profit before Tax |
4554.9 |
3756.0 |
Provision for taxation |
1596.0 |
1317.1 |
Profit After Tax |
2958.9 |
2438.9 |
Other Comprehensive income |
14.8 |
(20.7) |
Total Comprehensive income for the period |
2973.7 |
2418.2 |
OPERATIONS
The Revenue from operations of the Company for year ended on March 31, 2018 is Rs, 28,048.2 million as compared to Rs, 28,355.4 million in the previous year. The revenue figures of the two years are not directly comparable due to the reclassification of indirect taxes following the introduction of GST effective July 1, 2017. The Company''s Profit before tax for the year ended March 31, 2018, is Rs, 4,554.9 million as compared to Rs, 3,756 million in the previous year.
The Profit After Tax for the period ended March 31, 2018 is Rs, 2,958.9 million, compared to Rs, 2,438.9 million during the previous year.
Material Changes and commitment if any, affecting financial position of the Company
There have been no material changes and commitments that have occurred between the end of the financial year of the Company to which these Financial Statements relate and the date of this Report which affect the financial position of the Company.
DIVIDEND
The Board of Directors of the Company had approved the dividend Distribution Policy in its meeting held on February
13, 2017 in line with the SEBi (Listing Obligation & Disclosure
Requirements) Regulations, 2015. The Policy is available on the Company''s website at http://www.skf.com/in/investors/ shareholder-information/index.html.
I n line with the said Policy, the Board of Directors is pleased to recommend a dividend of Rs, 12/- per Equity share of Rs, 10 Face value for the year ended March 31, 2018, as compared to Rs, 10/- per Equity share, for the preceding year ended March 31, 2017. This Dividend is subject to the approval of the Members at the 57th Annual General Meeting of the Company.
The Register of Members and Share Transfer Books will remain closed from July 17, 2018 to July 25, 2018 (both days inclusive) for the purpose of payment of the dividend for the financial year ended March 31, 2018 and the Annual General Meeting.
During the year, unclaimed dividend pertaining to the dividend for the year 2010 was transferred to the investor Education and Protection Fund.
TRANSFER TO RESERVES
The Company does not propose to transfer any sum to the General Reserve out of the amount available for appropriation.
BUYBACK OF EQUITY SHARES
Considering the company''s strong cash reserves and its healthy cash flow generation, the Members had approved a proposal for buyback of equity shares of the company, at a price of '' 1500/- per share during the fiscal year 2017-18. The Company had utilized Rs, 2091.7 million for the Buyback of equity shares of the Company and the share capital of the Company after the said Buyback now stands reduced at Rs, 513.35 million. The buyback process was completed and the shares were extinguished on June 21, 2017.
AWARDS / ACCOLADES
Your Directors are happy to report that during the year, your Company received numerous awards and felicitations from distinguished bodies for achievements in various fields that re-emphasized SKF''s strong position in the Indian Manufacturing industry, making us proud of our achievements and some of the significant achievements were:
- Bajaj Auto''s Gold awards, for the 7th year in a row, for our support and contribution
- The Harley Davidson award for excellent quality and delivery performance
- Mainstreaming Sustainability by Tata Steel, Jamshedpur
- Awards for Excellence in CSR and Significant achievement for Environment Management from Cii-iTC Centre of Excellence for Sustainable Development.
- Best Partner Award'' from Hindalco''s Hirakud facility and âBest vendor award'' from Grasim
- The âBest supplier award'' by Nord Drive Systems India Pvt Ltd.
- SKF was adjudged as one of India''s Most Admired Workplaces for 2017 by the Economic Times.
MANAGEMENT''S DISCUSSION AND ANALYSIS AND OUTLOOK
A detailed review of the operations, performance and future outlook of the Company and its business is given in the Management''s Discussion and Analysis report, which forms part of this Report as Annexure I.
CORPORATE GOVERNANCE
Your Directors reaffirm their continued commitment to good corporate governance practices. The Annual Report contains a separate section on Company''s Corporate Governance practices, together with a certificate from the Secretarial Auditor, a practicing company secretary confirming compliance, as per SEBi (Listing Obligations and Disclosure Requirements) Regulations, 2015 which forms part of this Report as Annexure II.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
As per the provisions of Sections 149 and 152 of the Companies Act, 2013, the shareholders at their 54th Annual General Meeting held on 23 April 2015, had approved the re-appointment of all the existing independent Directors of the Company for tenure of up to five consecutive years. None of the independent Directors are liable to retire by rotation. in accordance with Section 149(7) of the Companies Act, 2013, each Independent Director has confirmed to the Company that he or she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and under SEBi (Listing Obligations and Disclosure Requirements) Regulations, 2015.
in accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Bernd Stephan (DiN: 07835737) retires by rotation and being eligible, offers himself for re-appointment.
Mr. Shishir Joshipura, Managing Director resigned from the Board on account of personal reasons. The Board, placed its sincere appreciation and gratitude for his valuable services rendered during his term of more than eight years and wished him all the best for the future. The Board further expressed that SKF had grown under his leadership even during the period of slowdown witnessed in the Indian economy during his tenure.
The Board at its meeting held on March 20, 2018 appointed Mr. Carl Orstadius (DiN: 08080144) as the Managing Director of the Company for a period of one year effective from April 1, 2018. As per the provisions of Section 161 of the Companies Act, 2013, Mr. Orstadius holds office up to the date of the forthcoming Annual General Meeting of the Company. Resolutions seeking approval of the Members for the appointment of Mr Bernd Stephan and Mr Carl Orstadius and a brief profile about them have been incorporated in the Notice of the Annual General Meeting.
Mr. Carl Orstadius, Managing Director (DiN: 08080144), Mr. Chandramowli Srinivasan, Chief Financial Officer and Mr. Pradeep Bhandari, Company Secretary are the Key Managerial Personnel of the Company as on the date of this Report.
BOARD MEETINGS
The Board of Directors met six times during the year, in addition, an Annual Strategic meet was held to obtain strategic direction from the Board in which all Business units and functional heads made detailed presentations to appraise the Board about the various business activities, achievements, plans etc. Details of Board meetings and other Committee meetings of the Board are laid out in Corporate Governance report, which forms part of this annual report.
BOARD EVALUATION
Your Company believes in value for its stakeholders through ethical processes & integrity. The Board plays a very important role in ensuring that the company performance is monitored and timely inputs are given to enhance its performance and set it in the right direction for profitable growth, in full compliance with regulatory requirements.
As per provisions of the Companies Act, 2013 and SEBi (Listing Obligations and Disclosure Requirements) Regulations, 2015, an evaluation of the performance of the Board, its Committees and individual members was undertaken. The Evaluation process primarily focused on the criteria with respect to the overall functioning of the Board as well as the Committees, governance aspects etc. The criteria applied in the evaluation process are explained in the Corporate Governance Report. The results of such performance evaluation were presented in the meetings of the independent directors / NRC / Board.
FAMILIARISATION PROGRAMME
in compliance with the requirement of SEBi (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has put in place a familiarization program for independent Directors to familiarize them with the working of the Company, nature of the industry in which the Company operates, business model of the Company, their roles, rights and responsibilities vis-a-vis the Company, etc. Details of the Familiarization Programme are explained in the Corporate Governance Report and is also available on the Company''s website at http://www.skf.com/in/investors/shareholder-information/index.html.
APPOINTMENT OF DIRECTORS AND REMUNERATION POLICY
A Policy with well-defined criteria is in place for the selection of candidates for appointment as Directors, Key Managerial Personnel and senior leadership positions. The relevant information has been disclosed in the Corporate Governance report which is a part of this report.
AUDIT COMMITTEE
The Company has in place an Audit Committee in terms of the requirements of the Companies Act, 2013. The details relating to the same are given in the Report on Corporate Governance forming part of this Report. The Board has accepted all recommendations made by the Audit Committee during the year.
CORPORATE SOCIAL RESPONSIBILITY
The Company has always maintained a high level of social engagement and social responsibilities. The initiatives in the social sphere have always been built on the Companyâs Values of âSKF Careâ which comprises of four pillars, namely âBusiness care /Employee care/ Environment care and Community care''. Community care has been at the core of SKF business practices and SKF is running multiple initiatives to empower the communities. in two very important developments we have now opened a YES (Youth Empowerment at SKF) Centre at Symbiosis Open Skills university in Pune and have announced UDAAN - a very ambitious program to enable deserving girl students from economically challenged backgrounds realize their educational dreams.
Corporate Social Responsibility (âCSRâ) Committee reviews and monitors the CSR projects and expenditure undertaken by the Company. The brief outline of the CSR Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure III of this report. The policy is available on http://www.skf.com/binary/83-295636/SKF-India-CSR-Policy.pdf
RISK MANAGEMENT
Your Company has developed and implemented a Risk Management Policy which is approved by the Board. The Risk Management Policy, inter alia, includes identification of risks and their rating based on likelihood of the event and the impact it is expected to have on the Company''s operations and performance. The risks that fall under high likelihood and high impact are identified as key risks for which detailed mitigation plans are developed and integrated with the Business processes and Audit Plan.
The Company''s assets continue to be adequately insured against the risk of fire, riot, earthquake, terrorism and the risk of loss of profits also stands insured amongst other things. In addition, adequate coverage has been taken to cover product liability, public liability and Director''s and Officer liability. Also, all the employees are covered against the risk of loss of life, hospitalization and personal accident.
A section on Risk management practices of the Company forms a part of the chapter on âManagement Discussion and Analysisâ in this Annual Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
in terms of Section 134(5) of the Companies Act, 2013, your Directors state that:
1. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;
2. Appropriate accounting policies have been selected and applied consistently. Judgments and estimates made are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at March 31, 2018 and of the profit of the Company for that period;
3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
4. Annual accounts of the Company have been prepared on a going concern basis;
5. Internal financial controls have been laid down and are being followed by the Company and that such internal financial controls are adequate and are operating effectively;
6. Proper systems to ensure compliance with the provisions of all applicable laws are in place.
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and the reviews carried out by the Management and Committees of the Board, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year ended March 31, 2018.
RELATED PARTY TRANSACTIONS
I n accordance with Section 134(3) (h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of contracts or arrangements entered into by the Company with related parties referred to in Section 188(1) in Form AOC-2 is attached as Annexure IV of this report. Prior approval from the members, if applicable, was taken by the Company for such transactions mentioned in the aforesaid Annexure. All transactions with Related Parties are approved by the Audit Committee / Board in line with the prevailing regulatory requirements for such transactions including prior omnibus approval of the Audit committee as permitted by law. Statement giving details of the Related Party Transactions entered into against such prior approval taken, is placed before the Audit Committee on a quarterly basis.
All transactions entered into with related parties during the year were on arm''s length basis and in the normal course of business. The details of related party disclosures form part of the notes to the financial statements provided in this annual report. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website and can be accessed at the web-link: http://www.skf.com/ binary/83-166889/Policy-on-Related-Party-Transactions-modifed-highlighed-Sept-2014.pdf
None of the Directors and Key Managerial Personnel had any pecuniary relationships or transactions vis-a-vis the Company.
SUBSIDIARIES, JOINT VENTURE AND ASSOCIATES
The Company doesn''t have any Subsidiary or Joint Venture or any Associates as per definition of the Companies Act, 2013.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
Your Company has a well-defined whistle blower policy to ensure directors and employees can raise concerns and alarms to report concerns about unethical behavior actual / suspected frauds and violation of Company''s Code of Conduct. Under this policy, adequate safeguard against victimization of persons who use such mechanism are in place and a direct access to the Chairperson of the Audit Committee is available to them.
To create greater awareness among employees, e-learning modules and face-to-face training sessions and employee forums are planned for achieving a high level of engagement and compliance. This reflects your Company''s strong commitment to âZero tolerance'' for non-compliance in this regard. The Policy for the same has been disclosed on the Company''s website. âhttp://www.skf.com/binary/83-166890/ Vigil-Mechanism-Policy-31.07.2014-FiNAL.pdfâ
REPORTING OF FRAUDS BY AUDITORS
During the year under review, the Statutory Auditors, Cost Auditors and Secretarial Auditors have not reported any instances of frauds committed in the company by its Employees to the Audit Committee under Section 142(12) of the Companies Act, 2013, details of which needs to be mentioned in this Report.
BUSINESS RESPONSIBILITY REPORT
SKF is continuously working to reduce the environmental impact of it''s business activities and developing products and solutions that benefit the energy, emissions and disposal requirement of the customers.
As required under SEBi (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Business Responsibility Report is attached and is a part of this annual report.
FIXED DEPOSITS
The Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013. Accordingly, no disclosure or reporting is required in respect of details relating to deposits covered under this Chapter.
STATUTORY AUDITORS
Pursuant to provisions of Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014, M/s Price Waterhouse & Co Bangalore LLP, Chartered Accountants (Firm Registration No. 0075675S with iCAi), were appointed as Statutory Auditors of the Company for a term of four years, to hold office from the conclusion of 54th Annual General Meeting held on April, 23 2015, until the conclusion of 58th Annual General Meeting, subject to ratification of their appointment at every subsequent Annual General Meeting.
A certificate has been received from them to the effect that their appointment as Statutory Auditors of the Company, if ratified, at ensuing Annual General Meeting would be according to the terms and conditions prescribed under Section 139 and 141 of the Act and Rules framed there under. A resolution seeking ratification of their appointment, forms part of the Notice convening 57th Annual General Meeting and the same is recommended for your consideration and approval.
There have been no qualifications, reservations, adverse remarks or disclaimers in the auditor''s reports, requiring explanation or comments by the Board.
SECRETARIAL AUDITOR
The Company had appointed M/s Parikh & Associates, a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Report of the Secretarial Auditor is attached as Annexure V of this report.
The Company is following the Secretarial Standard which are mandatory prescribed by the institute of Company Secretaries of India. The company has devised proper systems to ensure compliance with the provisions of all applicable secretarial standards issued by the institute of Company Secretaries of India and that such systems are adequate and operating effectively. The Secretarial Audit Report does not contain any qualification, reservation or adverse mark. The Board has also appointed Parikh & Associates as Secretarial Auditor to conduct Secretarial Audit of the Company for Financial Year 2018-19.
COST AUDITOR
The Board of Directors on the recommendation of the Audit Committee had appointed M/s. R A & Co. ( firm Registration No. 000242) as Cost Auditors of the Company for the year 2017-18. The Cost Auditor have confirmed that their appointment meets the requirements of Section 141 of the Companies Act 2013. The Cost Audit is under process and the Company will submit the Cost Auditors'' report to the Central Government in time. The Cost Audit Report of the Company for the Financial year ended March 31, 2017 was filed within the prescribed time limit.
As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a Resolution for seeking Members'' ratification for the remuneration payable to M/s RA & Co, Cost
Auditor is included at item No. 8 of the Notice convening the Annual General Meeting.
Significant and material orders passed by the regulators or courts
There were no significant and/or material orders, passed by any Court or Regulator or Tribunal, which may impact the going concern status or the Company''s operations.
PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached as Annexure VI of this report.
However pursuant to the provisions of Section 136(1) of the Companies Act, 2013, the Annual Report, excluding the aforesaid information, is being sent to the members of the Company. The said information is available for inspection at the registered office of the Company during business hours on any working days of the Company up to the date of the ensuing Annual General Meeting. Any shareholder interested in obtaining a copy thereof, may write to the Company Secretary in this regard.
INDUSTRIAL RELATIONS
The year under review witnessed cordial industrial Relations across all manufacturing locations of the Company.
Your Company''s focus continues towards proactive and employee centric practices which aims to create an engaged workforce, a transparent communication of business goals, an effective resolution mechanism which are the cornerstone of your Company''s employee relations approach.
in order to develop skills and foster togetherness at the workplace, your Company runs multiple training and engagement programs covering a wide range of topics including safety, environment, quality, TPM, and six sigma etc.
TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS TO IEPF
Pursuant to the provisions of Section 125 of the Companies Act, 2013, the declared dividends, which remained unpaid or unclaimed for a period of seven years, have been transferred by the Company to the investor Education and Protection Fund (iEPF) established by the Central Government.
As per the investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 notified by the Ministry of Corporate Affairs and subsequent amendment thereof, the Company has transferred shares to such authority in respect of which dividend has not been paid or claimed by shareholders for seven consecutive years or more.
The Company has sent individual notices to concerned shareholders, whose shares and dividend are liable to be transferred to iEPF Authority to their latest available addresses.
The Company has displayed full details of such shareholders, dividend and shares on its website at www.skfIndia.com. Shareholders are requested to verify the details of the shares liable to be transferred as aforesaid.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The particulars of loans given, investment made or guarantee given or security provided have been disclosed in the financial statements, no fresh loan has been given during the year. The Company did not give any guarantee or provide any security in connection with any loan and did not acquire any securities during the financial year.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
information as required to be given under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided in Annexure VII forming part of this Report.
POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Company is an equal opportunity provider and consciously strives to build a work culture that promotes the dignity of all employees. Our Policy is gender neutral. As required under the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed there under, the Company has implemented a Policy on prevention, prohibition and redressal of sexual harassment at workplace. All women and men - permanent, temporary
or contractual, including service providers, visitors are covered under the policy. This has been widely communicated internally and is uploaded on the Company''s intranet portal. An internal Committee comprising of 17 management staff across locations, including an NGO member is in place. This includes seven women to redress complaints relating to sexual harassment. Besides, in each of the plants, there is at least one nodal person in each region to receive, listen and forward complaints directly to the Committee.
During the year, no Complaints which required investigation were received by the Company.
Awareness programs were conducted across the Company to sensitize employees to uphold the dignity of their colleagues at the workplace, particularly with respect to prevention of sexual harassment. A few employees also attended training programmes conducted by an external agency.
EXTRACTS OF ANNUAL RETURN
in terms of the provisions of Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 an extract of the Annual Return forms part of this Report as Annexure VIII.
ACKNOWLEDGEMENTS
The Board of Directors take this opportunity to thank its Principals, Aktiebolaget SKF, customers, members, suppliers, bankers and business partners / associates for their exemplary and valued contribution towards the Company.
For and on behalf of the Board
SKF India Limited
Rakesh Makhija
Chairman DIN: 117692
Pune
May 8, 2018
Mar 31, 2017
DIRECTORSâ REPORT
Dear Members,
The Directors of your Company are pleased to present the 56th Annual Report, with the audited financial statements for the financial year ended on March 31, 2017.
FINANCIAL RESULTS
''Rs,in million
Twelve Months Period ended March 31, 2017 |
Fitteen months Period ended March 31, 2016 |
|
Revenue from Operations |
28355.4 |
32264.9 |
Other Income |
873.3 |
1013.8 |
Total Income |
29228.7 |
33278.7 |
Operating Expenditure |
24993.9 |
28649.6 |
Depreciation |
478.8 |
684.3 |
Profit before Tax |
3756.0 |
3944.8 |
Provision for taxation |
1317.1 |
1385.9 |
Profit After Tax |
2438.9 |
2558.9 |
Other Comprehensive Income |
-20.7 |
12.6 |
Total Comprehensive Income for the period |
2418.2 |
2571.5 |
The Company adopted Indian Accounting Standards (Ind AS) this year and hence prior year''s figures are restated to comply with Ind AS ; also the current year figures are for a period of 12 months whereas the prior year figures are for a period of 15 months and hence the figures for the current year are not directly comparable with the figures of the prior year.
OPERATIONS
The revenue from operations of the Company for year ended on March 31, 2017 stood at 28355.4 million as compared to Rs 32264.9 million in the previous year. The Company''s Profit before tax for the year ended March 31, 2017, was Rs 3756.0 million as compared to Rs 3944.8 million in the previous year.
The Profit after Tax for the period ended March 31, 2017 was Rs 2438.9 million, compared to Rs 2558.9 million during the previous year.
As stated above, these figures are not directly comparable with the previous year due to the differing lengths of the two years.
Material Changes and commitment if any, affecting financial position of the Company
There have been no material changes and commitments that have occurred between the end of the financial year of the Company to which these Financial Statements relate and the date of this Report which affect the financial position of the Company.
DIVIDEND
The Board of Directors of the Company had approved the dividend
Distribution Policy in its meeting held on February 13, 2017 in line with the SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015. The Policy is uploaded on the Company''s website at http://www.skfindia.com/ .
In line with the said Policy, the Board of Directors is pleased to recommend a dividend of Rs 10.0 per Equity share of Rs 10 face value for the year ended March 31, 2017, as compared to Rs. 15.0 per Equity share, for the preceding year ended March 31, 2016. This Dividend is subject to the approval of the Members at the 56th Annual General Meeting of the Company.
Transfer to Reserves
The Company proposes to transfer Rs 1000 million to the General Reserve out of the amount available for appropriation.
Buyback of equity shares
Considering the company''s strong cash reserves and its healthy cash flow generation, the Board of Directors in its meeting held on February 13, 2017 approved a proposal for buyback of equity shares of the company, subject to shareholder approval, for a maximum aggregate amount of Rs 3900 Million, amounting to 4.93% of the aggregate of paid up capital plus free reserves as on March 31, 2016, at a price of Rs 1500 per share. The buyback is being conducted under the tender offer route according to the provisions of the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998 as amended. Subsequently, the Company received the requisite approval from the shareholders and the buyback process is in progress.
AWARDS / ACCOLADES
You Directors are happy to report that during the year, your Company received numerous awards and felicitations from distinguished bodies for achievements in various fields and some of the significant achievements were:
- Won the Dun & Bradstreet âBest Bearing Companyâ award for 2016 for the Ninth year in a row
- Bengaluru plant won the âGreen Manufacturing Award'' at The Machinist Super Shop floor award in the large enterprise category
- SKF India was recognized amongst the â2016 Working Mother & AVTAR 100 Best Companies for Women in Indiaâ
- SKF India received an award for âExcellence in Sustainability'' and Bangalore factory received an award for âExcellence in Safety'' in Manufacturing Today Conference & Awards 2016
- SKF Manufacturing facilities - Pune and Bengaluru were rated with Platinum and Gold Certificates respectively at India Manufacturing Excellence awards 2016 organized by Frost & Sullivan
- Received âQuality Gold Award'' from Bajaj Auto in recognition of product quality, cost, delivery, service & response management as a part of âCustomer firstâ approach
- Factory Manager-Pune made it to the list of Great Managers as part of âGreat Managers Awards Programâ run by People Business in association with Times of India
- SKF Pune Factory won the Future Ready Factory of the Year -Platinum Award in the Engineering Sector for large Business at India Manufacturing Excellence Awards (IMEA) 2016. Pune factory is the first factory in India to win the award consecutively for the second time
- At IMEA 2016, Bengaluru factory won the Gold Certificate of Merit.
- Appreciation by JSW Steel received for excellence in best safety practices
MANAGEMENTâS DISCUSSION AND ANALYSIS AND OUTLOOK
A detailed review of the operations, performance and future outlook of the Company and its business is given in the Management''s Discussion and Analysis report, which forms part of this Report as Annexure I.
CORPORATE GOVERNANCE
The Annual Report contains a separate section on Company''s Corporate Governance practices, together with a certificate from the Secretarial Auditor confirming compliance, as per SEBI (Listing Obligations and disclosure Requirements) Regulations, 2015 which forms part of this Report as Annexure II.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
As per the provisions of Sections 149 and 152 of the Companies Act, 2013, the shareholders at their 54th Annual General Meeting held on April 23, 2015, had approved the re-appointment of all the existing Independent Directors of the Company for tenure of up to five consecutive years. None of the Independent Directors are liable to retire by rotation. In accordance with Section 149(7) of the Companies Act, 2013, each Independent Director has confirmed to the Company that he or she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and under SEBI (Listing Obligations and disclosure Requirements) Regulations, 2015.
In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Rakesh Makhija (DIN: 0117692) retires by rotation and being eligible, offers himself for re-appointment.
Mr Stephane Le Mounier resigned from the Board following a change in his responsibilities within the SKF Group and the Board places its'' sincere appreciation and gratitude for his valuable services rendered during his tenure with the Board.
Mr. Shishir Joshipura, Managing Director (DIN: 00574970),
Mr. Chandramowli Srinivasan, Chief Financial Officer and Mr. Pradeep Bhandari, Company Secretary are the Key Managerial Personnel of the Company as on the date of this Report.
BOARD MEETINGS
The Board of Directors met five times during the year. In addition, an Annual Strategic meet was held to obtain strategic direction from the Board in which all Business units and functional heads made detailed presentations to appraise the Board about the various business activities, achievements, plans etc . Details of Board meetings and other Committee meetings of the Board are laid out in Corporate Governance report, which forms part of this annual report.
BOARD EVALUATION
Your Company believes in value for its stakeholders through ethical processes & integrity. The Board plays a very important role in ensuring that the company performance is monitored and timely inputs are given to enhance its performance and set the right direction for profitable growth and in full compliance with regulatory requirements.
As per provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, an evaluation of the performance of the Board, its Committees and individual members was undertaken. The criteria applied in the evaluation process are explained in the Corporate Governance Report. The results of such performance evaluation were presented to the meetings of the Independent Directors / NRC / Board.
FAMILIARISATION PROGRAMME
In compliance with the requirement of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has put in place a familiarization program for Independent Directors to familiarize them with the working of the Company, their roles, rights and responsibilities vis-a-vis the Company, the industry in which the Company operates, business model etc. Details of the Familiarization Programme are explained in the Corporate Governance Report and are also available on the Company''s website at http://www.skf.com/ in/investors/shareholder-information/index.html.
APPOINTMENT OF DIRECTORS AND REMUNERATION POLICY
A Policy with well-defined criteria is in place for the selection of candidates for appointment as Directors, Key Managerial Personnel and senior leadership positions. The relevant information has been disclosed in the Corporate Governance Report.
AUDIT COMMITTEE
The Company has in place an Audit Committee in terms of the requirements of the Companies Act, 2013. The details relating to the same are given in the Report on Corporate Governance forming part of this Report. The Board has accepted all recommendations made by the Audit Committee during the year.
CORPORATE SOCIAL RESPONSIBILITY
The Company has always maintained a high level of social engagement and social responsibilities . The initiatives in the social sphere have always been built on the Companyâs Values of âSKF Careâ which comprises of four pillars, namely âBusiness care /Employee care/ Environment care and Community care''. The Company considers it as its economic, environmental and social responsibility to foster sustainable local development as well as add value to the local communities in which it operates.
Corporate Social Responsibility (âCSRâ) Committee reviews and monitors the CSR projects and expenditure undertaken by the Company. The brief outline of the CSR Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure III of this report.
RISK MANAGEMENT
The Company has a formulated âRisk Policy'' which identifies risks and supports the management in strategic decision making. It is reviewed periodically and involves mapping of all the risk elements on parameters like likelihood of the event and the impact it is expected to have on the Company''s operations and performance. The risks that fall under high likelihood and high impact are identified as key risks for which detailed mitigation plans are developed and integrated with the Business processes and Audit Plan. A section on Risk management practices of the Company forms a part of the chapter on â Management Discussion and Analysisâ in this Annual Report.
DIRECTORSâ RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act, 2013, your Directors state that:
1. In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;
2. Appropriate accounting policies have been selected and applied consistently. Judgments and estimates made are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at March 31, 2017 and of the profit of the Company for that period;
3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
4. Annual accounts of the Company have been prepared on a going concern basis;
5. Internal financial controls have been laid down and are being followed by the Company and that such internal financial controls are adequate and are operating effectively and
6. Proper systems to ensure compliance with the provisions of all applicable laws are in place.
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and the reviews carried out by the Management and Committees of the Board, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year ended March 31, 2017.
RELATED PARTY TRANSACTIONS
In accordance with Section 134(3) (h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of contracts or arrangements entered into by the Company with related parties referred to in Section 188(1) in Form AOC-2 is attached as Annexure IV of this report. The prior approval from the members was taken by the Company for such transactions mentioned in the aforesaid Annexure. All transactions with Related Parties are approved by the Audit Committee / Board in line with the prevailing regulatory requirements for such transactions including prior omnibus approval of the Audit committee as permitted by law . Statement giving details of the Related Party Transactions entered against such prior approval taken is placed before the Audit Committee on a quarterly basis.
All transactions entered into with related parties during the year were on arm''s length basis. The details of related party disclosures form part of the notes to the financial statements provided in this annual report.
None of the Directors and Key Managerial Personnel had any pecuniary relationships or transactions vis-a-vis the Company.
SUBSIDIARIES, JOINT VENTURE AND ASSOCIATES
The Company doesn''t have any Subsidiary or Joint Venture or any Associates as per definition of the Companies Act, 2013.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
Your Company has a well-defined whistle blower policy to ensure director and employees can raise concerns and alarms to report concerns about unethical behavior, actual / suspected frauds and violation of Company''s Code of Conduct. Under this policy, provisions have been made to safeguard persons who use this mechanism from victimization. The policy provides access to the chairperson of the Audit Committee.
To create greater awareness among employees, e-learning modules and face-to-face training sessions and employee forums are planned for achieving a high level of engagement and compliance. This reflects your Company''s strong commitment to âZero tolerance'' for noncompliance in this regard. The Policy for the same has been disclosed on the Company''s website âhttp://www.skf.com/binary/83-166890/ Vigil-Mechanism-Policy-31.07.2014-FINAL.pdf".
REPORTING OF FRAUDS
There have been no instances of fraud reported by the Statutory Auditors under Section 143 (12) of the Act and Rules framed there under either to the Company or to the Central Government.
DISCLOSURE REQUIREMENTS
As required under SEBI (Listing and obligations and disclosure requirements) Regulations, 2015, a Business Responsibility Report is attached and is a part of this annual report, the Dividend Distribution Policy is disclose in the Corporate Governance Report.
FIXED DEPOSITS
The Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013. Accordingly no disclosure or reporting is required in respect of details relating to deposits covered under this Chapter.
STATUTORY AUDITORS
Pursuant to provisions of Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014, M/s Price Waterhouse & Co Bangalore LLP, Chartered Accountants (Firm Registration No. 0075675S with ICAI), were appointed as Statutory Auditors of the Company for a term of four years, to hold office from the conclusion of 54th Annual General Meeting held on April 23, 2015, until the conclusion of 58th Annual General Meeting, subject to ratification of their appointment at every subsequent Annual General Meeting.
A certificate from them has been received to the effect that their appointment as Statutory Auditors of the Company, if ratified at ensuing Annual General Meeting would be according to the terms and conditions prescribed under Section 139 of the Act and Rules framed there under.
A resolution seeking ratification of their appointment, forms part of the Notice convening 56th Annual General Meeting and the same is recommended for your consideration and approval.
There have been no qualifications, reservations, adverse remarks or disclaimers in the auditor''s reports, requiring explanation or comments by the Board.
SECRETARIAL AUDITOR
The Company has appointed M/s Parikh & Associates, a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Report of the Secretarial Auditor is attached as Annexure V of this report.
As regards the observations made in the said Secretarial Audit Report, regarding shortfall in the spend on CSR activities, explanation is given in Annexure III forming part of this Directors'' Report.
COST AUDITOR
On the recommendation of the Audit Committee, the Board of Directors appointed M/s. RA & Co. (firm Registration No. 000202) as Cost Auditors of the Company for the year 2016-17. The Cost Auditor have confirmed that their appointment meets the requirements of Section 141 of the Companies Act, 2013. The Cost Audit is under process and the Company will submit the Cost Auditors'' report to the Central Government in time. The Cost Audit Rules for the financial year 2015-16 were not applicable in case of Your Company.
The remuneration payable to the Cost Auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a Resolution for seeking Members'' ratification for the remuneration payable to M/s RA & Co, Cost Auditor is included at item No. 6 of the Notice convening the Annual General Meeting.
Significant and material orders passed by the Regulators or Courts
There were no significant and/or material orders, passed by any Court or Regulator or Tribunal, which may impact the going concern status or the Company''s operations.
PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached as Annexure VI of this report.
However, pursuant to the provision of Section 136(1) of the Companies Act, 2013, the Annual Report, excluding the aforesaid information, is being sent to the members of the Company. The said information is available for inspection at the registered office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. Any shareholder interested in obtaining a copy thereof, may write to the Company Secretary in this regard.
TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS TO IEPF
Pursuant to the portions of section 125 of the Companies Act, 2013, the declared dividends, which remained unpaid or unclaimed for a period of seven years, have been transferred by the company to the Investor Education and Protection Fund (I EPF) established by the Central Government.
As per the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 notified by the Ministry of Corporate Affairs and subsequent amendment thereof, the Company is going to transfer shares to such authority in respect of which dividend has not been paid or claimed by shareholders for seven consecutive years or more. The Company has sent individual notices to concerned shareholders, whose shares and dividend are liable to be transferred to IEPF Authority to their latest available addresses.
The Company has displayed full details of such shareholders, dividend and shares on its website at www.skfindia.com. Shareholders are requested to verify the details of the shares liable to be transferred as aforesaid.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The particulars of loans, guarantees and investments have been disclosed in the financial statements, no fresh loan has been given during the year.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN Exchange EARNINGS AND OUTGO
Information as required to be given under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided in Annexure VII forming part of this Report.
POLICY ON PREVENTION OF Sexual HARASSMENT AT WORKPLACE
The Company is an equal opportunity provider and consciously strives to build a work culture that promotes the dignity of all employees. As required under the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed there under, the Company has implemented a Policy on prevention, prohibition and redressal of sexual harassment at workplace. All women and men- permanent, temporary or contractual, including service providers , visitors are covered under the policy. This has been widely communicated internally and is uploaded on the Company''s intranet portal. An internal Committee comprising 22 management staff across locations, including an NGO member is in place. This includes seven women to redress complaints relating to sexual harassment. Besides in each of the plants there is at least one nodal person in each region to receive, listen and forward complaints directly to the Committee.
During the year the Company received 1 Complaint which was investigated and closed within 90 working days.
Awareness programs were conducted across the Company to sensitize employees to uphold the dignity of their colleagues at the workplace, particularly with respect to prevention of sexual harassment. A few employees also attended training programmes conducted by an external agency.
ExTRACTS OF ANNUAL RETURN
The extracts of Annual Return in Form MGT-9 as required under Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014 forms part of this Report as Annexure VIII.
ACKNOWLEDGEMENTS
The Board of Directors take this opportunity to thank its Principals, Aktiebolaget SKF, customers, members, suppliers, bankers and business partners / associates for their valuable and sustained support and co-operation to the Company.
For and on behalf of the Board
SKF India Limited
Rakesh Makhija
Chairman
DIN: 0117692
Mumbai May 26, 2017
Dec 31, 2014
To the Members,
The Directors of your Company are pleased to present the 54th Annual
Report, with the statement of the audited accounts for the financial
year ended on December 31, 2014.
The Ministry of Corporate Affairs vide Circular No. 08/2014 dated April
4, 2014 clarified that the financial statements and the documents
required to be attached thereto, the auditor''s and director''s report in
respect of the financial year under reference shall continue to be
governed by the relevant provisions of the Companies Act, 1956,
schedules and rules made there under.
FINANCIAL RESULTS
Year ended Year ended
Dec 31, 2014 Dec 31, 2013
Rs. in million Rs. in million
Net Sales & Services 23726.4 22464.4
Other Income 1198.9 919.0
Total Income 24925.3 23383.4
Operating Expenditure 21324.1 20137.7
Depreciation 539.5 494.4
Exceptional items - 221.0
Profit Before Tax 3061.7 2530.3
Provision for taxation 1034 863.1
Profit After Tax 2027.7 1667.2
Balance brought forward
from last year 5847.9 5646.5
Profit available for
appropriation 7875.6 7313.7
The appropriations are as follows:
Interim Dividend 395.5 -
Tax on Interim Dividend 67.2 -
Proposed dividend on
Equity Shares 131.8 395.5
Tax on Proposed dividend 26.4 70.3
Transfer to General Reserves
(including compulsory transfer to
Reserves required under Section
205(2A) of the Companies Act, 1956) 750.0 1000.0
Leaving a balance of 6504.7 5847.9
DIVIDEND
Your Directors are pleased to recommend a final dividend of Rs. 2.5 per
share (25%) for the year ended December 31, 2014 taking the total
dividend to Rs. 10.0 per share (100%), as compared to Rs. 7.5 per share,
for the preceding year ended December 31, 2013. The total dividend
(including interim dividend), will absorb a sum of Rs. 527.3 million.
This would involve a cash outflow of Rs. 620.9 million including tax on
dividend. The total dividend pay-out (including dividend tax) for the
current year is 30.6 per cent as against 27.9 per cent in the previous
year.
OPERATIONS
The Indian economy continued to battle with several challenges from
subdued demand & investments, contraction of industrial production and
high interest rate during the year 2014. The macro environment improved
a little as we went through the year with the new regime in power.
The automotive sector, one of the largest consumers of your Company''s
products witnessed tapered demand barring the two-wheeler segment which
clocked modest growth. Manufacturing and industrial activities remained
sluggish. Industrial sector struggled due to stalled infrastructure &
power projects and restricted flow of new investments. Mining, Steel
and Power remained dormant due to restrictions in mining of natural
resources as well as rising debts.
Despite these constraints and challenging environment, your Company
continued to focus on sustainable profitable growth through use of
advance technology provided by SKF Group to widen our ability to serve
customers. Your Company continues to focus on bringing its
manufacturing, innovation capabilities and solutions closer to
customers.
These efforts are reflected in the positive improving trend witnessed
in the increased sales of your Company''s quarter-on-quarter results
during the year. Your Company''s quarterly sales increased from Rs. 5,703
million in the first quarter of 2014 to Rs. 6,059 million in the last
quarter. For the twelve months ending March 31, 2014, your Company
reported Net Sales of Rs. 23,726.4 million registering a 5.6% increase
over the previous year. Our Company''s sales continued to develop
positively driven by relatively strong performance in industrial
segment. Your company''s export has grown by 2.0% geared by growth in
global automotive industry during 2014. Exports constituted 7.9 per
cent of the total sales as compared to 8.2 per cent of the total sales
in the previous year.
The strong emphasis on internal efficiency using SKF''s Business
Excellence philosophy to reduce waste and decrease costs, together with
an improvement in the sales mix enabled your Company to withstand
inflationary pressures on costs and sustain its profitability.
As a reflection of strong intrinsic value the revenue growth was
translated into profitable growth, your Company achieved a significant
milestone as its profit after tax surpassed the Rs. 2 billion mark
reflecting the leadership position, of your Company. The Profit after
Tax as per cent to sales has moved higher at 8.5 per cent as compared
to 7.4 per cent last year. The Earnings per share and cash earnings per
share for the year under review was Rs. 38.5 and Rs. 48.7 respectively.
The long term prospects for Indian economy remains bright owing to the
demographic dividend which will continue to drive demand from across
industries. Manufacturing industry will be the key driver to cater to
this demand. In the short term, with the revival of confidence coupled
with positive signals towards reforms by the government, the country
and the industry is well poised to gain. The priorities of your
Company that will enable it to benefit from the improving economic
environment include strengthening investments in technologies,
developing sustainable product and solutions and delivering higher
value to customers and enable them to stay ahead.
LIQUIDITY
Your Company continues to remain debt-free and maintain a sufficient
cash balance to meet the strategic objectives. There are no long-term
borrowings. During 2014, internal cash flows have covered working
capital, capital expenditure, investments and dividend payments. The
Balance Sheet continued to remain strong with cash and liquid
investments of Rs. 5,348 million. These funds are mainly deposits with
banks.
SUSTAINABILITY AND SAFETY
SKF Group defines sustainability as SKF Care, which encompasses
Business Care, Environmental Care, Employee Care and Community Care.
Meanwhile, the SKF Group BeyondZero strategy aims to reduce the
environmental impacts of your Company''s operations and provide
customers with innovative technologies, products and solutions that
offer improved environmental performance. In line with this strategy
''SustEn'' initiative was launched by your Company since 2013 and
continuing now, that has reduced the CO2 emissions related to its
manufacturing operations by nearly 7,306 tonnes in a year (which is 22%
of 2014) by way of changing sourcing mix to greener sources, and also
consumption savings from operations, at the same time achieving
annualized savings of nearly 71 million INR. This initiative received
the SKF Groups Climate Savers Awards 2014 presented together with WWF.
Further SKF has installed 1 MW Roof Top solar at its Bengaluru
location, a 100 Kwp installation at Pune on its corporate building, and
has signed a MOU to have one more 1 MW installation at its Pune plant.
SKF has been working on a green energy footprint across all locations
for the next 5 years and these installations are part of the same.
At every SKF facility employee safety is of utmost importance. In line
with this philosophy, Behavioral Safety Programs have been initiated
across the organization at all locations.
Your Company strives to continually improve environment, health and
safety performance through the prevention of work place accidents and
pollution, the promotion of employee health and well- being and the
reduction of environmental impacts, including those from energy
consumption and use.
AWARDS / ACCOLADES
Your Directors are happy to report that during the year, your Company
was recognized and felicitated for its exemplary performance in various
fields by our esteemed customers and organizations some of the
significant achievements are:
- Dun & Bradstreet''s award for the best company in bearing sector for
8th consecutive year.
- SKF India ranked among India''s top 50 "Most Admired Companies"
by Fortune magazine for the 3rd consecutive year.
- SKF wins Gold award for the 2nd consecutive year at the 11th
Economic Times and Frost & Sullivan India Manufacturing Excellence
Awards in the engineering sector of Large Business Category.
- Quality Gold Award by India Yamaha Motor Pvt Ltd.
- Superior performance award by Mahindra & Mahindra.
- Certificate of appreciation from Toyota Kirloskar Auto Parts for
on-time delivery and quality.
- Best supplier award from Reiter India.
- SKF Pune Factory bags three awards at 28th National Convention of
Quality Circle 2014.
These awards and recognitions are a result of the focused efforts
towards evolution of your Company from a bearing manufacturer and
supplier to an integrated solutions provider.
We thank all our customers, suppliers, distributors, employees and all
other stakeholders for their continued support and contribution to
these awards. These recognitions further inspire us to aim higher in
order to become competitive and stay ahead in everything we do.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to requirements of Section 217 (2AA) of the Companies Act,
1956 and on the basis of information and advice received by them, your
Directors confirm that:
1. In the preparation of the annual accounts, the applicable accounting
standards have been followed and there are no material departures;
2. appropriate accounting policies have been selected and applied
consistently and such judgments and estimates have been made that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as at December 31, 2014 and of the profit of
the Company for the year ended on that date;
3. proper and sufficient care has been taken 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; and
4. the annual accounts have been prepared on a going concern basis.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Your Company has undertaken the commitment that all new major
facilities must be designed and constructed to world-class standards in
terms of environmental performance; and we do so by adopting the
''Leadership in Energy and Environmental Design'' (LEED) standard for all
our new facilities. With clear focus on energy conservation, your
Company has launched several initiatives to reduce carbon footprint and
energy consumption along with ''SustEn'' project that has achieved
benchmark success within the SKF Group in the area of energy
conservation.
The information relating to Energy Conservation, Technology Absorption
and Foreign Exchange Earnings and Outgo as required to be disclosed
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 are set out as an annexure forming part of this Report.
CORPORATE GOVERNANCE
Your Company observes high standards of corporate governance in all
areas of its functioning with strong emphasis on transparency,
integrity and accountability. Your Company has complied with all the
requirements as per Clause 49 of the listing agreement of the Stock
Exchanges, as amended from time to time. The Auditor''s certificate on
compliance with Clause 49 is included in the section on Corporate
Governance in this Annual Report.
A detailed review of the operations, performance and outlook of the
businesses in which the Company operates is given in the Management
Discussion & Analysis forms part of the Annual Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
As an organization that is continually scaling up in terms of business,
reach and impact, Your Company has in place a highly evolved community
care program, which enables it to actively and effectively engage with
communities outside the organizational charter. Your company is
committed to the vision of ensuring that the community care programs
make a meaningful difference in the lives of the communities we touch,
wherever we are present. During the year a CSR committee was
constituted and the areas of initiatives have been expanded. The
Community care strategic road map for SKF India focuses primarily on 3
areas
- Education: Focus on SKF sports academy and academic initiatives for
underprivileged children.
- Empowerment: Vocational Training Program for under privileged
youth.
- Environment : Supporting environmental best practices.
Your Company going forward aims to run and monitor initiatives in the
above areas through structured short and long term programs,
encouraging employees to volunteer and partner with selected community
care professionals and organizations to enhance the effectiveness of
these program. All the CSR programs are determined by the philosophy of
''making a meaningful difference to the lives we touch''.
DEPOSITS
The Company discontinued accepting fixed deposits from Public and
Shareholders in the year 2001. No amount of Principal or interest was
outstanding as at December 31, 2014. There was no failure on repayments
of Fixed Deposits on maturity or interest thereon in terms of the
conditions of your Company''s erstwhile schemes.
PERSONNEL
The Board of Directors commends the continued dedication of employees
at all levels and the industrial relations continue to be peaceful and
cordial. During the year a new wage agreement for the Bengaluru plant
was entered into. Your Company firmly believe that employee motivation,
development and engagement are key aspects of good human resource
management. The performance driven culture challenges every employee to
scale up and grow. A wide range of competency enhancement
opportunities, challenging assignments and rotation across units and
countries help employees in their career progression and meeting
aspirations. The coaching and mentoring programs enable employees to
get constant feedback and career guidance to achieve and exceed their
performance targets thus realizing their potential. SKF''s commitment to
employee health, safety and security extends beyond accidents and
occupational health hazards. These initiatives have delivered the
desired results as is evident from the low attrition rate achieved
during the year.
Information in accordance with the provision of Section 217(2A) of the
Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 1975 as amended, forms part of this report. However, as per
provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, this
report and the financial statement are being sent to all the members
excluding the aforesaid information. Any member desirous of obtaining
such particulars may write to the Company Secretary at the registered
office of the Company.
DIRECTORS
Mr. Shishir Joshipura has been re-appointed as a Managing Director of
the Company with effect from December 1, 2014 for a period of 5 years.
The terms and conditions of his appointment, including his
remuneration, are subject to the approval of the Company in the general
meeting and such other approvals as may be necessary.
Ms Hema A. Hattangady has been appointed as an Additional Director of
the Company with effect from July 18, 2014 subject to the approval of
the Members. As per provisions of Section 161 of the Companies Act,
2013 and Article 129 of the Articles of Association of the Company, Ms.
Hattangady holds office up to the date of the forthcoming 54th Annual
General Meeting and is eligible for appointment. Notice under Section
160 of the Companies Act, 2013 has been received from a member
proposing the appointment of Ms. Hattangady as Director of the Company.
At the ensuing Annual General Meeting, Mr. Rakesh Makhija retires by
rotation and being eligible, offer himself for re-appointment.
Pursuant to Companies Act, 2013 and Clause 49 of the Listing Agreement,
Mr. K. C. Mehra, Mr. P. R Menon, Mr. P. M. Telang and Ms Hema A.
Hattangady are proposed to be appointed as an Independent Directors for
a period of 5 years and shall not be liable to retire by rotation.
Resolutions seeking approval of the Members for their appointment and
re-appointment have been incorporated in the Notice of the Annual
General Meeting and a brief detail about them has been provided in the
Corporate Governance Report.
Mr. Tryggve Sthen, resigned as Director of the Company with effect from
December 31, 2014 and Mr. David Bishop with effect from February 18,
2015. The Board expresses its gratitude for the valuable services
rendered and guidance provided by Mr. Sthen and Mr Bishop during their
tenure with the Company.
AUDITORS
M/s. Price Waterhouse & Co Bangalore LLP, Chartered Accountants, who
are the Statutory Auditors of the Company, retire at the conclusion of
the forthcoming Annual General Meeting. Your Company has received a
letter from them to the effect that their re-appointment, if made, will
be in accordance with the provisions of Section 139 of the Companies
Act, 2013.
In terms of Clause 41(1)(h) of the Listing Agreement, the statutory
auditors of your Company are subjected to the Peer Review Process of
the ICAI and hold a valid certificate issued by Peer Review Board of
ICAI.
A certificate from the Auditors has been received to the effect that
their re-appointment, if made, would be according to the terms and
conditions prescribed under section 139 and 141 of the Companies Act,
2013 and rules framed thereunder.
COST AUDITORS
Pursuant to Section 233B of the Companies Act, 1956, the Central
Government has prescribed Cost Audit of the Company. The Board of
Directors on recommendation of the Audit Committee has appointed M/s.
R. A. & Co. as Cost Auditors of the Company for the year 2014. The Cost
Audit is under process and the Company will submit the Cost Auditors''
report to the Central Government in time. The Cost Audit report for the
financial year 2013 has been submitted on June 24, 2014 as against the
due date of June 30, 2014.
ACKNOWLEDGEMENT
The Board wishes to acknowledge and thank all stakeholders for their
valuable sustained support and encouragement towards the conduct of the
efficient operations of the Company. Your Board is particularly
indebted to its Principals, Aktiebolaget SKF who have supported the
Company at all times.
For and on behalf of the Board
SKF India Limited
K. C. Mehra
Chairman
Pune, February 18, 2015
Dec 31, 2013
Dear Members,
The Directors of your Company are pleased to present the 53rd Annual
Report, with the statement of the audited accounts for the financial
year ended on December 31, 2013.
FINANCIAL RESULTS
Year ended Year ended
Dec 31, 2013 Dec 31, 2012
Rs. in million Rs. in million
Net Sales & Services 22464.4 22041.3
Other Income 916.9 917.8
Total Income 23381.3 22959.1
Operating Expenditure 20135.6 19691.9
Depreciation 494.4 435.9
Exceptional items 221.0 -
Profit Before Tax 2530.3 2831.3
Provision for taxation 863.1 930.5
Profit After Tax 1667.2 1900.8
Balance brought forward
from last year 5646.5 5205.3
Profit available for appropriation 7313.7 7106.1
The appropriations are as follows:
Proposed dividend on
Equity Shares 395.5 395.5
Tax on Proposed Dividend
including differential provision
for earlier years 70.3 64.1
Transfer to General Reserves 1000.0 1000.0
Leaving a balance of 5847.9 5646.5
DIVIDEND
Your Directors are pleased to recommend a dividend of Rs. 7.5 per share
(75%) for the year ended December 31, 2013 out of the current year''s
profit, as compared to Rs. 7.5 per share, for the preceding year ended
December 31, 2012. The dividend, if approved, at the forthcoming Annual
General Meeting will be paid out of the profits of the Company for the
year and will absorb a sum of Rs. 395.5 million. This would involve a
cash outflow of Rs. 462.7 million including tax on dividend.
OPERATIONS
The Indian economy battled several challenges from high interest rates,
persistent inflation, weak rupee to tapered demand and contraction of
industrial production during the year 2013.
The automotive sector, one of the largest consumers of Your Company''s
products witnessed weak demand barring the two- wheeler and tractor
segment which clocked modest growth. Manufacturing and industrial
activities remained sluggish.
Despite these constraints and challenging environment, your Company
continued to focus on its fundamental strength which lies in its
ability to continuously develop technologies, products and services
that enhance competitive advantages for its customers. The efforts over
the years to develop a wide range of products and service offerings and
the ability to combine the knowledge across the SKF technology
platforms - Bearings and units, Seals, Mechatronics, Services and
Lubrication systems - to develop value propositions for the different
industries and customers enabled SKF India''s specialist teams to work
even more closely with customers. This ability to provide them advanced
integrated solutions to improve their production efficiency and improve
their competitiveness and profitability enabled us to strengthen our
leadership position even further in a difficult external environment.
The efforts are reflected in the positive improving trend witnessed
quarter-on-quarter during the year from sales of Rs. 5,290 million in the
first quarter of the year 2013 to Rs. 5,912 million in the last quarter.
For the twelve months ending 31st March, 2013, your Company reported
Net Sales of Rs. 22,464 million clocking a 2 per cent increase over the
previous year. The continued growth in the aftermarket segment and 28
per cent increase in export worked favorably for your Company.
The strong emphasis on internal efficiency together with an improvement
in the sales mix enabled your Company to withstand inflationary
pressures on costs and sustain its profitability. Notwithstanding the
difficult business and macro environment, your Company''s Profit Before
Tax (excluding exceptional items) as percent to sales was only
marginally lower at 12.2 per cent as compared to 12.8 per cent last
year. Exports constituted 8.2 per cent of the total sales as compared
to 6.5 per cent of sales in the previous year. The Earnings per share
and cash earnings per share for the year under review was Rs. 31.6 and Rs.
41 respectively.
Despite the visible short term challenges, your Company believes that
the long term India story remains intact. Domestic consumption will
remain one of the key growth engines of the Indian economy. A large
and growing population, significant additions to the working age
population, rising disposable incomes including in rural areas and the
Government''s increasing spends on the social sector to foster inclusive
growth will all together play an important role in sustaining
consumption.
Your Company will continue to leverage the global knowledge and
expertise and its well-developed research and development facilities
along with its own competent talent to take part in India''s growth
story. While your Company will constantly strive to increase the
stakeholder''s value, emphasis continues to be on delivering value to
customers and strengthening processes while driving sustainable
practises. Energy efficiency initiatives including Beyond Zero®
portfolio, clean technology, energy efficient products and alternative
sources of energy will continue to remain our focus areas. Your Company
will continue to invest time, money and energy in developing products
that are safe, environment friendly and at the same time are,
affordable and efficacious to strengthen our competitive and market
leadership position.
LIQUIDITY
Your Company continues to remain debt-free and maintains sufficient
cash to meet strategic objectives. There are no long- term borrowings.
During 2013, internal cash flows have covered working capital
requirements, investments and dividend payments. The Balance Sheet
remained strong with cash and liquid investments of Rs. 3758 million.
SUSTAINABILITY AND SAFETY
Your Company''s approach entails consideration of safety as a value- led
concept which drives behavior change and supports the creation of a
safety culture fully integrated with business improvement processes. In
line with this philosophy, Behavioral Safety Programs have been
initiated across the organization at all locations.
Your Company has addressed the critical area of climate change
mitigation and adaptation through several innovative and pioneering
initiatives. These include continuous improvement in energy
conservation through a program ''SustEn'', creating a green built
environment through ''Beyond Zero®'' and waste reduction through ''War on
Waste''.
The philosophy of ''SKF Care'' is embedded in everything that we do. SKF
Care is integral to the processes and operations and our way of doing
business. During the year, safety sensitization workshops were
organized at all locations and accountability matrix was established
for safe operations. At SKF, business decisions are guided by the
principles of SKF Care which includes Business Care, Environmental
Care, Employee Care and Community Care.
AWARDS / RECOGNITION
Your Directors are delighted to report that during the year, the
Company was recognized and felicitated for exemplary performance in
various fields and some of the significant achievements are:
- Dun & Bradstreet''s Award for best bearing company for 7th
consecutive year
- GOLD award at the 10th Economic Times and Frost & Sullivan India
Manufacturing Excellence Awards 2013.
- Frost & Sullivan Indian Industrial technologies award 2013 for
market leadership in the industrial bearings market in India.
- Ranked amongst the top 10 Auto Component companies by Fortune India
for the 2nd consecutive year.
- Quality Gold award from Bajaj Auto.
- Best Supplier for Consistent Performance in Quality & Reliability
award from TAFE.
- Best performer award in the engineering spares category at
Ultratech North''s Business Associates Meet 2013.
- Ace Designers Award for consistency in quality and excellence.
Your Company''s Managing Director, Shishir Joshipura was recognized as
one of the ''most valuable CEOs'' of India by Business World and also
featured in the list of Top 100 Indian CEOs by Business Today
publication.
These awards and recognitions are a result of the focused efforts
towards evolution of your company from a bearing manufacturer and
supplier to an integrated solutions provider.
We thank all our customers, suppliers, distributors, employees and all
other stakeholders for their continued support and contribution to
these awards. These recognitions further inspire us to aim higher in
order to become competitive and deliver value in everything we do.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to requirements of Section 217 (2AA) of the Companies Act,
1956 and on the basis of information and advice received by them, your
Directors confirm:-
1. That in the preparation of the annual accounts, the applicable
accounting standards have been followed and there are no material
departures.
2. That the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as on December 31, 2013 and of the profit of
the Company for the year ended on that date;
3. 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;
4. That the Directors have prepared the annual accounts on a going
concern basis.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Your Company has undertaken the commitment that all new major
facilities must be designed and constructed to world-class standards in
terms of environmental performance; and we do so by adopting the
''Leadership in Energy and Environmental Design'' (LEED) standard for all
our new facilities. In this regard our new Haridwar plant has been
awarded silver rating by Indian Green Building Council (IGBC).
With an aim to achieve a higher degree of sustainability, reduce energy
consumption and improve your Company''s carbon foot prints, a country
level program "SustEn" was launched during the year. The project
also involved evaluating options to move away from carbon intensive
sources of energy to become more competitive. The information relating
to Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo as required to be disclosed 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 are set
out as an annexure forming part of this Report.
CORPORATE GOVERNANCE AND SOCIAL RESPONSIBILITY
Your Company strongly believes that the spirit of Corporate Governance
goes beyond the statutory form. Sound Corporate Governance is a key
driver of sustainable corporate growth. Your Company is committed to
maintaining the highest level of transparency, accountability and
equity in its operations.
Your Company has complied with all the requirements as per Clause 49 of
the listing agreement of the Stock Exchanges, as amended from time to
time. The Auditor''s certificate on compliance with Clause 49 is
included in the section on Corporate Governance in this Annual Report.
In addition, your Company has documented its internal policies in line
with the Corporate Governance guidelines. The Management Discussion &
Analysis forms part of the Annual Report.
Your Company''s CSR initiatives are aimed at local community needs and
contributes to the community development. All the CSR activities are
determined by the philosophy of ''making a meaningful difference to the
lives we touch''. Your Company''s CSR activities are conceived to help in
the holistic development of the underprivileged children by engaging
them in various activities such as sports, culture and education.
Keeping this in mind, your Company runs a sports academy for
underprivileged children as it believes sport is an essential part of a
child''s mental and physical development. Plans are on the anvil to
expand the SKF sports academy model to other SKF facilities besides
Pune.
DEPOSITS
The Company discontinued accepting fixed deposits from Public and
Shareholders in the year 2001. No amount of Principal or interest was
outstanding as at December 31, 2013. There was no failure on repayments
of Fixed Deposits on maturity or interest thereon in terms of the
conditions of your Company''s erstwhile schemes.
PERSONNEL
The Board of Directors commends the continued dedication of employees
at all levels and the industrial relations continue to be peaceful and
cordial. Your Company''s human resource management systems and processes
are designed to empower employees and enable them adopt innovative
approaches to creating enduring value. Towards this end, your Company
has assiduously built a culture of continuous learning, innovation and
collaboration across the organization by providing cutting-edge
learning and development inputs to its employees, along with a
judicious blend of coaching, mentoring and on the job training. In
addition, your Company''s comprehensive talent development strategy has
enabled the enhancement of the competitive capability of each business.
The company''s performance management system has been instrumental in
creating a strong performance culture.
At the beginning of the current year, the Company incurred a one time
restructuring cost of Rs. 221 million, arising out of a Voluntary
Retirement Scheme for its employees.
Pursuant to the provision of Section 217(2A) of the Companies Act, 1956
read with Companies (Particulars of Employees) Rules, 1975 as amended,
the names and other particulars of employees are set out as an annexure
to the Directors'' report. However, as per provisions of Section
219(1)(b)(iv) of the Companies Act, 1956, the report and the accounts
are being sent to all the shareholders excluding the aforesaid
information. Any Shareholder desirous of obtaining such particulars may
write to the Company Secretary at the registered office of the Company.
DIRECTORS
In accordance with the requirements of the Companies Act, 1956 and the
Company''s Articles of Association, Mr. K. C. Mehra, Mr. H. Lange and
Mr. V. Vartanian retire by rotation and being eligible have offered
themselves for re-appointment. Resolutions seeking approval of the
Members for their appointment have been incorporated in the Notice of
the Annual General Meeting and a brief detail about them has been
provided in the corporate governance report.
Mr. Tore Bertilsson, resigned as Director of the company with effect
from 12th July, 2013. The Board expresses its gratitude for the
valuable services rendered and guidance provided by Mr. Bertilsson
during his tenure with the Company.
AUDITORS
M/s. Price Waterhouse & Co., Bangalore, Chartered Accountants, who are
the Statutory Auditors of the Company, continue to hold office until
the conclusion of this Annual General Meeting and offer themselves for
re-appointment. In terms of Clause 41(1)(h) of the Listing Agreement,
the statutory auditors of your Company are subjected to the Peer Review
Process of the ICAI and hold a valid certificate issued by Peer Review
Board of ICAI.
A certificate from the Auditors has been received to the effect that
their re-appointment, if made, would be within the limits prescribed
under Section 224(1B) of the Companies Act, 1956.
COST AUDITORS
Pursuant to Section 233B of the Companies Act, 1956, the Central
Government has prescribed Cost Audit of the Company. The Board has
appointed M/s. RA & Co. as Cost Auditors of the Company for the year
2013. The Cost Audit is under process and the Company will submit the
Cost Auditors'' report to the Central Government in time. The Cost Audit
report for the financial year 2012 has been submitted on 26th June,
2013 as against the due date of 29th June, 2013.
ACKNOWLEDGEMENT
The Board wishes to acknowledge and thank all stakeholders for their
valuable sustained support and encouragement towards the conduct of the
efficient operations of the Company. Your Board is particularly
indebted to its Principals, AB SKF who have supported the Company at
all times.
For and on behalf of the Board
SKF India Limited
K. C. Mehra
Chairman
Pune, February 21, 2014
Dec 31, 2012
To the Members,
The Directors of your Company are pleased to present the 52nd Annual
Report, with the statement of the audited accounts for the financial
year ended on December 31, 2012.
FINANCIAL RESULTS
Year ended Year ended
Dec 31, 2012 Dec 31, 2011
Rs.in million Rs.in million
Net Sales & Services 22041.3 24167.2
Other Income 917.8 727.2
Total Income 22959.1 24894.4
Operating Expenditure 19691.9 21370.0
Depreciation 435.9 385.2
Profit Before Tax 2831.3 3139.2
Provision for taxation 930.5 1054.3
Profit After Tax 1900.8 2084.9
Balance brought forward from last year 5205.3 4180.0
Profit available for appropriation 7106.1 6264.9
The appropriations are as follows:
Proposed dividend on Equity Shares 395.5 395.5
Tax on Proposed dividend 64.1 64.1
Transfer to General Reserves (including
compulsory transfer to Reserves required
under Section 205(2A) of the Companies
Act, 1956) 1000.0 600.0
Leaving a balance of 5646.5 5205.3
DIVIDEND
Your Directors are pleased to recommend a dividend of Rs. 7.5 per share
(75%) for the year ended December 31, 2012 out of the current year''s
profit, as compared to Rs. 7.5 per share, for the preceding year ended
December 31, 2011. The dividend, if approved, at the forthcoming Annual
General Meeting will be paid out of the profits of the Company for the
year and will absorb a sum of Rs. 395.5 million. This would involve a
cash outflow of Rs. 462.7 million including tax on dividend.
OPERATIONS
The year posed prolonged challenging scenarios in the economic
environment. High inflation, fiscal imbalances and resultant high
interest rates continued to deter the sentiments. A decline in the
buoyancy in the Asian economies along with fragile recovery in advanced
economies also affected export growth adversely.
A sharp drop in volumes led to a decline in sales by 9%. This coupled
with inflationary pressures on cost and a weakening Rupee put
additional pressure on margins. Despite the difficult business and
macro environment, our profit before tax as percent to sales is only
marginally lower at 12.8 per cent as compared to 13 per cent last year
and Profit after Ta x for the year as per cent to sales remains at 8.6%
though lower by 8.8 per cent over the previous year. Exports constitute
6.2 per cent of the total sales as compared to 8.7 per cent of sales in
the previous year reflective of the weakness in the global markets. The
earning per share and cash earning per share for the year under review
was Rs. 36.0 and Rs. 44.3 respectively.
Brownfield expansions at Pune and Haridwar facilities are planned in
the coming years to create capacities to meet the expected growth in
demand.
Business excellence is one of our core competitive strategies of doing
business. Business excellence addresses the entire value chain and
weeds out what is not relevant or sub-optimal. We continue to actively
nurture and foster a culture of innovation by leveraging on our global
knowledge base and delivering value to our customers.
Backed by the intrinsic strengths of SKF, driven by the experience of
working with customers over 100 years and across geographies, your
company continues to be the leader in its segment. SKF India Ltd will
continue to leverage the parent company''s well-developed global
research and development facilities, competent talent to further
strengthen its market leadership.
LIQUIDITY
Your Company continues to remain debt-free and maintains sufficient
cash to meet strategic objectives. There are no long-term borrowings.
During 2012, internal cash flows have covered working capital
requirements, investments and dividend payments. The Balance Sheet
remained strong with cash and liquid investments of Rs. 3070 million.
SUSTAINABILITY AND SAFETY
The philosophy of ''SKF Care'' is embedded in everything that we do. SKF
Care is integral to the processes and operations and our way of doing
business. At SKF business decisions are guided by the principles of SKF
Care which includes Business Care, Environmental Care, Employee Care
and Community Care.
SKF''s BeyondZeroTM strategy describes SKF''s overall commitments towards
environment and sustainability. Being a responsible citizen, we at SKF
strive to act in a way that not only secures strong financial
performance but also supports environmental sustainability.
SKF BeyondZeroTM consists of two simultaneous goals:
- Reduce the negative environmental impact from our own operations and
those of our suppliers
- Innovate and offer our customers new technologies, products and
services with enhanced environmental performance characteristics.
In this continuously changing world, ever-evolving sustainable and
profitable technologies will define progress in future. SKF''s
knowledge engineering capabilities and its applications to manufacture
innovative and energy-efficient solutions enable customers to achieve
business profitability and their environmental goals.
Along with the above goals, safety at work place continues to remain a
prime focus for the company. Your company continues to improve the EHS
performance by implementing various programs and stringent practices
towards the prevention of work place accidents and pollution, promotion
of employee health and well being and reduction of environmental
impacts.
AWARDS / RECOGNITION
Your Directors are glad to report that during the year, the company was
recognised and felicitated for exemplary performance in various fields
and some of the significant achievements are:
- SKF India ranked among the top 50 Most Admired Companies in India by
Fortune Magazine - Ranked 1st in the Engineering and Capital Goods
category and 3rd in the Auto Components category
- SKF India Ltd. was honored with the prestigious Dun & Bradstreet
award 2011, for the 6th consecutive year, for its significant
contribution to the bearing sector
- SKF Pune manufacturing facility was conferred the Gold Certificate of
merit at the Ninth edition of Economic Times and Frost & Sullivan India
Manufacturing Excellence award-2012
- SKF India was awarded in 2012 ''Star performer'' by the Engineering
Export Promotion Council of India (EEPC), for excellence in exports of
engineering goods and services during 2009-10
- SKF has been conferred as the best supplier in the ''Best Quality &
Services'' category and Improvement Orientation'' category by Tata Steel
- SKF India awarded as the "Preferred supplier for local R&D capability
development" by Maruti
- SKF India, Awarded Quality - Gold award from Bajaj Auto for Valuable
Support and Contribution for the year 2011
- SKF India bags two awards at Productivity Improvement Case
Competition 2012 organized by Pune Divisional Productivity Council,
winner (best case study) in the management category and first runner up
in the operator category.
These awards and recognitions came as a result of the focused effort
towards evolution of your company from a bearing manufacturer and
supplier to an integrated solutions provider.
We thank all our customers, suppliers, employees and all other
stakeholders for their continued support and contribution to these
awards. These recognitions further inspire us to aim higher in order to
become competitive and deliver value in everything we do.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
As responsible corporate citizens, we have always endeavored to make
positive contribution to the communities in which we operate. Your
company''s CSR initiatives are aimed at local community needs and
contributes to the community development.
All the CSR activities are determined by the philosophy of ''making a
meaningful difference in the lives we touch''. Your Company''s CSR
activities are conceived to help in the holistic development of the
underprivileged children by engaging them in various activities such as
sports, culture and education. Keeping this in mind, your company runs
a sports academy for underprivileged children as it believes sport is
an essential part of a child''s mental and physical development
Your company also supports several NGOs guided by the above philosophy.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to requirements of Section 217 (2AA) of the Companies Act,
1956 and on the basis of information and advice received by them, your
Directors confirm:-
1. that in the preparation of the annual accounts, the applicable
accounting standards have been followed and there are no material
departures
2. that the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the company as on December 31, 2012 and of the profit of
the company for the year ended on that date;
3. 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;
4. that the Directors have prepared the annual accounts on a going
concern basis.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Irrespective of the location, your company has undertaken the
commitment that all new facilities must be designed and constructed to
world-class standards in terms of environmental performance; and we do
so by adopting the ''Leadership in Energy and Environmental Design''
(LEED) standard for all our major constructions.
With clear focus on energy conservation, your company has launched
''SustEn'' project to reduce carbon footprint and energy consumption
costs, results for which will be visible in 2013 and beyond.
The information relating to Energy Conservation, Technology Absorption
and Foreign Exchange Earnings and Outgo as required to be disclosed
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 are set out as an annexure forming part of this
Report.
CORPORATE GOVERNANCE
A detailed report on the Corporate Governance system and practices of
the Company and certificate from the Auditors of the Company regarding
compliance of conditions of Corporate Governance and a separate section
on Management Discussion & Analysis forms part of the Annual Report.
Your Company is committed to transparency in all its dealings and
places high emphasis on business ethics. Certificate from CEO/CFO,
inter alia, confirming the correctness of the financial statements,
compliance with Company''s code of conduct, adequacy of the Internal
Control measures and reporting of matters to the Audit Committee in
terms of Clause 49 of the Listing Agreement with the Stock Exchanges,
is also enclosed as a part of the Annual Report.
DEPOSITS
The Company discontinued accepting fixed deposits from Public and
Shareholders in the year 2001. No amount of Principal or interest was
outstanding as at December 31, 2012.
PERSONNEL
The Board of Directors commends the continued dedication of employees
at all levels and the industrial relations continue to be peaceful and
cordial. Your Company''s dedicated and talented workforce has enabled it
to remain at the forefront of the industry. Your Company remains
committed to provide a challenging and rewarding work environment to
all its employees.
Pursuant to the provisions of Section 217(2A) of the Companies Act,
1956 read with Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other particulars of employees are set out as an
annexure to the Directors'' report. However, as per provisions of
Section 219(1)(b)(iv) of the Companies Act, 1956, the report and the
accounts are being sent to all the shareholders excluding the aforesaid
information. Any shareholder desirous of obtaining such particulars may
write to the Company Secretary at the registered office of the Company.
DIRECTORS
Mr. Prakash M. Telang was appointed as an additional Director with
effect from October 23, 2012. Mr. Telang is an Independent Director. As
per the provision of Section 260 of the Act, Mr. Telang holds office
only up to the date of the forthcoming Annual General Meeting and is
eligible for appointment.
In accordance with the requirements of the Companies Act, 1956 and the
Company''s Articles of Association, Mr. T. Sthen and Mr. R. Makhija
retire by rotation and being eligible have offered themselves for
re-appointment. Resolutions seeking approval of the Members for their
appointment have been incorporated in the Notice of the Annual General
Meeting and a brief detail about them has been provided in the
corporate governance report.
Mr. D. C. Shroff, a Director of the Company who retires by rotation at
the forthcoming AGM, has conveyed his decision not to offer himself for
re-appointment. He is also the Chairman of the Audit Committee. The
Directors place on record their appreciation of the valuable
contribution made by him.
AUDITORS
M/s. B S R & Associates, Chartered Accountants, the retiring auditors
have expressed their unwillingness for their re-appointment. The
Company has received a notice to propose M/s Price Waterhouse & Co.,
Bangalore, Chartered Accountants, as statutory auditors in place of the
retiring auditors who will hold office from the conclusion of the
forthcoming Annual General Meeting until the conclusion of the next
Annual General Meeting. In terms of Clause 41(1)(h) of the Listing
Agreement, the statutory auditors of your Company are subjected to the
Peer Review Process of the ICAI. M/s Price Waterhouse & Co,, Bangalore,
hold a valid certificate issued by Peer Review Board of ICAI.
A certificate from the proposed Auditors has been received to the
effect that their re-appointment, if made, would be within the limits
prescribed under Section 224(1B) of the Companies Act, 1956.
COST AUDITORS
Pursuant to Section 233B of the Companies Act, 1956, the Central
Government has prescribed Cost Audit of the Company. The Board has
appointed M/s. RA & Co. as Cost Auditors of the Company for the year
2012. The Cost Audit is under process and the Company will submit the
Cost Auditors'' report to the Central Government in time. The Cost Audit
report for the financial year 2011 has been submitted on 30th March
2012 as against the due date of 28th June 2012.
ACKNOWLEDGEMENT
The Board wishes to acknowledge and thank all stakeholders for their
valuable sustained support and encouragement towards the conduct of the
efficient operations of the Company. Your Board is particularly
indebted to its Principals, AB SKF who have supported the Company at
all times.
For and on behalf of the Board
SKF India Limited
K C Mehra
Mumbai, March 26, 2013 Chairman
Dec 31, 2010
This year marks our fiftieth year and the Directors have pleasure in
presenting the Fiftieth Annual Report together with the Audited
Financial Statements for the year ended December 31, 2010.
Financial Results
Year ended Year ended
Dec 31, 2010 Dec 31, 2009
Rs. in million Rs. in million
Net Sales & Services 20,684.1 15,709.3
Other Income 247.6 131.2
Total Income 20,931.7 15,840.5
Operating Expenditure 18,137.4 14,243.7
Depreciation 333.4 289.8
Financial Income (207.4) (131.6)
Financial Expense 7.6 7.6
Profit before tax 2,660.7 1,431.0
Provision for taxation 890.5 488.5
Profit after tax 1,770.2 942.5
Balance brought forward
from last year 3,840.2 3,238.7
Profit available for
appropriation 5,610.4 4,181.2
The appropriations are as follows:
Proposed dividend on
Equity Shares 369.1 210.9
Tax on Proposed dividend 61.3 35.8
Transfer to General
Reserves (including
compulsory transfer to
Reserves required under
Section 205(2A) of
the Companies Act, 1956) 1,000.0 94.3
Leaving a balance of 4,180.0 3,840.2
Dividend
Your Directors are pleased to recommend a dividend of Rs. 7 per share
(70%) for the year ended December 31, 2010 including Golden Jubilee
Special Dividend of Rs. 1 per share, out of the current years profit,
as compared to Rs. 4.0 per share for the preceding year ended December
31, 2009. The dividend if approved at the forthcoming Annual General
Meeting will be paid out of the profits of the Company for the year and
will absorb a sum of Rs. 369.1 million as compared to
Rs. 210.9 million for the previous year. This would involve a cash
ouflow of Rs. 430.4 million including tax on dividend. The dividend,
will be paid to those shareholders whose names appear on the Register
of Members of the Company after giving effect to all valid share
transfers lodged with the share transfer agent on or before April 26,
2011 and to those whose names appear as beneficial owners in the
records of Naional Securities Depository Limited and Central Depository
Services (India) Limited as on said date.
Operations
Indian economy continued to build on its strong recovery and achieved
robust growth rates exceeding 8% in all quarters of the year. The
growth was well spread across the segments of the economy and in some
cases specially in automotive sector the surging demand exceeded all
expectations. Whilst this led to improved capacity uilizaion a
factories of most auomotive component vendors, it also led to inability
of some component vendors to keep pace with the production schedules of
the auomotive OEMs. Your Company benefited from the investment made
lats year a Haridwar which continued to make progress owards achieving
is installed capacity. The Company also made invesments in enhancing
capacities in the Bengaluru facility while continuing is focus on
productivity improvement measures across all plants.
In this year of all round economic growth, your Company has achieved
credible financial resuls. Our sales continued to develop very
positively, driven by strong performance in our Automotive Division,
and a continued good development in Industrial Division. The Company
focused on deeper customer relationships and improved is value
proposition to the customers, resulting in growth in volume. The
continued focus on engineering solution for customers is helping in
maintaining our position as the market leader.
Your Company achieved a significant milestone as its Sales surpassed
the Rs. 20 billion mark reflecting the leadership position of the
Company. As a reflection of strong inrinstic value the revenue growth
was translated into higher profitability growth on the bactk of strong
customer relationship and higher value offerings. Operating profis
(EBIT) grew to Rs. 2,460.9 million from Rs. 1,307.0 million over the
lats year. Operating margin stood a 11.9% for 2010 up from 8.3% in the
previous year.
Profit afer tax increased to Rs. 1,770.2 million, a growth of 88% over
2009. Our Earnings per share for the year was Rs. 33.6.
The rapid recovery of the growth momentum in year 2010 was comforting.
A couple of concerns emerged which will need careful monitoring over
the next few quarters namely inflation and economic fall outs of
changing geo-political situaion across the globe. An immediate fallout
of the global development is the volatility in the commodity prices and
the resulant pressures on margins. The continued rise in interest rates
as a measure for battling inflation could impact the growth.
Your Company has laid the foundaion for growh with several building
blocks during 2010 which will help achieve is straegic goals -
- New factory a Haridwar to meet growing demand for auto sector
- Solution facory a Pune to offer value added solutions to our
customers
- Sourcing domestically large industrial bearings for our industrial
business.
Your Company will coninue to drive straegies that will be
cusomer-centrict to capture growth opportunities. We will continue to,
build capabilities to meet the market demands and further consolidate
our position. Your Company is confident that year 2011 will bring newer
opportunities and is well positioned to leverage the same.
Liquidity
Your Company continues to remain debt-free and maintains sufficient
cash to meet srategic objectives. There are no long term borrowings.
During 2010, inernal cash flows have more than adequately covered
working captial requirements, investments and dividend payments. As on
December 31, 2010, your Company had cash & cash equivalents amounting
to Rs. 2,119.1 million.
Golden Jubilee Year
The year 2011 is the Golden Jubilee year of the Company. SKF India has
had an exciting journey of five decades to reach its present position
supported by all its stakeholders. Your Company is confident of
building on its past success and creating an even better future.
Safety,Health and Environment (SHE)
Minimizing the environmental impact of our operations assumes utmost
priority in the face of challenges faced by mankind to proect our
earth. We are commited to maintain the highest standards of SHE by
complying and even going beyond the minimum standards to keep our plane
safe for future generations. Our comprehensive SHE policies as well as
dedicaed measures taken are a testament to our commitment to the cause.
Greates emphasis is given to safety measures for Zero accidents, safety
training for employees, use of green principles in our product
development and incorporaing resource reduction and recycling in our
plans. Reducing our existing carbon footprint through program Beyond
Zero and tailoring our processes to minimize the impact on the
environment continue to rank high on the list of priorities.
The year 2010 saw further significant steps in the direction of
building a robus Safey, Health and Environment system in the
organizaion. Number of activities were carried ou during the year to
enable sustainable operations some of which were:
- Conducted On the Job training and training through One Point
Lesson following TPM mehodology. More than 4,500 man days of training
in a year in sustaining the awareness on safety.
- A dedicated Safety Management Team in place for prevention of
unsafe incidents at the plant level.
- A separate Susainability team has been formed to increase awareness
level of each employee about Global warming.
- SKF is cerified to ISO 14001 & OHSAS 18001, new factory Haridwar has
also been recommended for cerification during the year.
- Continued awareness program by releasing every week a daily tip on
Save the Plane earth to educate all our employees to conserve energy.
- Water conservation and capure programs including rain waer harvesting
hereby achieving over 7% reduction in net water consumption as compared
to year 2009.
- Well equipped Industrial Effluent Treatment Plans complying with
Zero Discharge condition.
Awards / Recognition
Your Directors are glad to report that during the year, the Company was
recognized and feliciaed for exemplary performance in various fields
significant amongst which are the following:
- Firts Prize and prestigious Sona Kaizen Trophy at 10th CII-TPM
National Conference.
- First Prize a CIIT 4th Naional Conference & Competition on Six Sigma
in the Lean Manufacturing Organizations category
- Star Performance Award from Engineering Expotr Promotion Council of
India (EEPC), sponsored by Minisry of Commerce & Industries for
contribution in Export.
- Best Kaizen Award from Toyoa for the Pune region. (Consecutive 2nd
year in the row)
Corporate Social Responsibility
As responsible corporate citizens, we have always endeavored to make
conribution owards betterment of society in and around the areas of our
operation. Our CSR initiatives are aimed at helping our surrounding
communities become self-reliant.
SKF India has always believed in sport as an essential part of a
societys mental and physical wellbeing. The sports academy set up by
your Company for underprivileged children is an example of an
initiative in this area. The objective is to nurture young talent at
grass roots level and develop community participation.
Directors Responsibility Statement
Pursuant to requirements of Section 217 (2AA) of the Companies Act,
1956 and on the basis of information and advice received by them your
Directors confirm:-
1. that in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanations
relating to material departures;
2. that the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a
true and fair view of the state of affairs of the Company as on
December 31, 2010 and of the profit or loss of the Company for the year
ended on that date;
3. 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 assest of
the Company and for preventing and detecting fraud and other
irregularities;
4. that the Directors have prepared the annual accounts on a going
concern basis.
Energy Conservaion, Technology Absorpion and Foreign Exchange Earnings
and Outgo
The information relating to Energy Conservaion, Technology Absorpion
and Foreign Exchange Earnings and Ougo as required to be disclosed
under section 217 (1) (e) of the Companies Act, 1956 read with
Companies (Disclosure of Particulars in the Repor of Board of
Directors) Rules, 1988 is given in Annexure forming part of this
Report.
Corporate Governance
A detailed report on the Corporate Governance system and practices of
the Company and cerificate from the Auditors of the Company regarding
compliance of condiions of Corporae Governance and a separate section
on Management Discussion & Analysis forms part of the Annual Report.
Your Company is commited to transparency in all is dealings and places
high emphasis on business ethics. Cerificate from CEO/CFO, inter alia,
confirming the correctness of the financial staements, compliance with
Companys code of Conduct, adequacy of the Internal Control measures
and reporting of matters to the Audit Committee in terms of Clause 49
of the Listing Agreement with the Stock Exchanges, is also enclosed as
a part of the Annual Report.
Deposits
The Company discontinued accepting fixed deposits from Public and
Shareholders in the year 2001. The amounts outstanding are those
amounts which have no been claimed by the deposit holders on maturity
even after sending reminders. A sum of Rs. 0.1 million from Public
remained unclaimed as at December 31, 2010.
Pursuant to Secion 205C of the Companies Act, 1956 an amount of Rs.
0.78 million lying as deposits and an amount of Rs. 0.08 million
onwards interest on fixed deposits which remained matured and unclaimed
for a period of seven years from the date they became due for payment
have been transferred to Investor Education and Protection Fund set up
by the Central Government.
Personnel
The Board of Directors commends the continued dedication of employees
at all levels and the industrial relations continue to be peaceful and
cordial.
The information as per Section 217 (2A) of the Companies Act, 1956 read
with Companies (Particulars of Employees) Rules, 1975 forms part of
this Report.
Directors
Mr. Giuseppe Donao resigned as Director of the Company with effect from
Ocober 21, 2010. The Board places on record is gratitude for the
valuable services rendered and guidance provided by Mr. Donao during
his tenure with the Company. Mr. Tore Berilsson is appointed as
Director to fill in the casual vacancy caused by resignation of Mr.
Donao with effect from October 21, 2010.
In accordance with the requirements of the Companies Act, 1956 and the
Companys Articles of Association, Mr D.C. Shroff, Mr. H. Lange and Mr.
T Berilsson (who has been appointed to fill up the casual vacancy
caused by resignaion of Mr. G. Donao and who holds office upto the date
of this Annual General Meeting) retire by rotaion and being eligible
have offered themselves for re-appointment.
The Company has received noice under Secion 257 of the Act along with
the requisite deposit, in respect of the above person, proposing the
appointment as a Director of the Company. Resolutions seeking approval
of the Members for their appointment have been incorporated in the
Notice of the Annual General Meeting and a brief deail about them has
been provided in the Corporate Governance Report.
Auditors
M/s. B S R & Associates, Chartered Accountants, who are the Stautory
Auditors of the Company, continue to hold office until the conclusion
of the Fifieth Annual General Meeting and offer themselves for
re-appoinment. In terms of Clause 41(l)(h) of the Listing Agreement,
the stautory auditors of your Company are subjected to the Peer Review
Process of the ICAI and hold a valid certificate issued by Peer Review
Board of ICAI.
A cerificate from the Auditors has been received to the effect that
their re-appointment, if made, would be within the limits prescribed
under Section 224(1B) of the Companies Act, 1956.
Cost Auditors
Pursuant to Section 233B of the Companies Act, 1956, the Central
Government has prescribed cost Audit of the Company. The Board has
appoined M/s. N. I. Mehta & Co., cost Auditor of the Company for the
year 2010. The cost Audit is under process and the Company will submit
the cost Auditors report to the Central Government in time.
Acknowledgement
The Board wishes to acknowledge and thank all stakeholders for their
valuable sustained support and encouragement owards the conduct of the
efficient operations of the Company. Your Board is particularly
indebted to is Principals, AB SKF who have supported the Company at all
times.
For and on behalf of the Board
SKF India Limited
K C Mehra
Chairman
Pune,
February 23, 2011
Dec 31, 2009
The Directors have pleasure in presenting the Forty-Ninth Annual Report
together with the Audited Financial Statements for the year ended
December 31, 2009.
FINANCIAL RESULTS
Year ended Year ended
Dec 31, 2009 Dec 31, 2008
Rupees in millions Rupees in millions
Net Sales & Services 15,709.3 16,202.4O
Other Income 131.2 101.8
Total Income 15,840.5 16,304.2
Operating Expenditure 14,076.1 14,224.8
Depreciation 289.8 289.4
Financial Income (131.6) (160.7)
Financial Expense 7.6 6.8
Profit before tax and
Exceptional items 1,598.6 1,943.9
Exceptional item 167.6 -
Provision for taxation 488.5 667.3
Profit after tax 942.5 1,276.6
Balance brought forward
from last year 3,238.7 2,367.4
Profit available for
appropriation 4,181.2 3,644.0
The appropriations are as
follows:
Proposed dividend on
Equity Shares 210.9 237.3
Tax on Proposed dividend 35.8 40.3
Transfer to General
Reserves (including
compulsory transfer to
Reserves required under
Section 205(2A) of
the Companies Act, 1956) 94.3 127.7
Leaving a balance of 3,840.2 3,238.7
DIVIDEND
Your Directors are pleased to recommend a dividend of Rs. 4 per share
(40%) for the year ended December 31, 2009 as compared to Rs. 4.5 per
share for the preceding year ended December 31, 2008. The dividend if
approved at the forthcoming Annual General Meeting will be paid out of
the profits of the Company for the year and will absorb a sum of Rs.
210.9 million as compared to Rs. 237.3 million for the previous year.
This would involve a cash outflow of Rs. 246.7 million including tax on
dividend. The dividend, will be paid to those shareholders whose names
appear on the Register of Members of the Company after giving effect to
all valid share transfers lodged with the share transfer agent on or
before April 6, 2010 and to those whose names appear as beneficial
owners in the records of National Securities Depository Limited and
Central Depository Services (India) Limited as on said date.
OPERATIONS
The year 2009 started on an extremely challenging note following the
global financial meltdown of 2008. The sharp drop in demand across the
economy forced most industries to realign their production levels with
the reduced demand levels. Your Company was no exception and had to run
factories fewer days in the first quarter of 2009. However, driven by
strong domestic demand and stimulus measures introduced by the
Government, the decline was arrested in the second quarter of 2009
followed by a continued recovery from the third quarter of the year.
The Automotive sector led the recovery, while select industrial
segments started their recovery from the third quarter. The year ended
on a considerably higher note and we are cautiously optimistic that
this trend will continue in 2010. The overseas markets, especially
western countries, experienced much slower recovery, resulting in a
decline in exports. Against this background, your Company managed to
end the year with a drop of sales of just 3 per cent compared to 2008.
Your Company incurred a one time restructuring cost of Rs. 167.6
million, arising out of a Voluntary Retirement S cheme for its
employees.
The companys operating profit before financial income and expenses and
before the one time restructuring cost was about 18 per cent lower than
last year, similarly Profit before tax and restructuring cost was also
about 18 per cent lower than last year. Profit after tax and
restructuring cost at Rs. 942 million was about 26 per cent lower than
2008. The earning per share and cash earning per share for the year
under review was Rs. 17.9 and Rs. 23.4 respectively.
Your companyÃs focus on the 3Cs à Customer, Cost and Cash has helped it
to become lean and agile and better geared to face the challenges as
the economy gets into the growth mode. Reinforcing its commitment to
high levels of quality and good practices, the Company is constantly
pursuing Six Sigma and TPM at all its operations, reflecting the
CompanyÃs continuous commitment towards quality and high standards.
LIQUIDITY
Your Company continues to remain debt-free and has maintained
sufficient cash to meet strategic objectives. There are no long-term
borrowings. Short-term borrowings are restricted to need based working
capital requirements. During fiscal 2009, internal cash flows have more
than adequately covered working capital requirements, investments and
dividend payments. As on December 31, 2009, cash & cash equivalents
stood at Rs. 2892.6 million against Rs. 1919.3 million at the previous
year end.
PROJECT PLANNED
Members are aware that the company has undertaken a capacity addition
program at Haridwar, Uttarkhand to manufacture bearings. Uttarkhand is
poised to become a hub for automotive industries in future. The new
plant is being designed to meet the SKF aspirations in the future. The
plant is in an advanced stage of completion and is scheduled to start
its operations soon. The total capital outlay for the plant will be
around 1,500 MINR and when fully operational, will add manufacturing
capacity of about 60 million bearings. In the initial years the project
will mainly cater to the two wheeler segment of the market. The new
facility will strengthen your CompanyÃs leadership position in the
domestic bearing market.
SOLUTION FACTORY
SKF inaugurated its first ÃSKF Solution Factoryà recently at Pune. The
Solution Factory will make available offerings from all five technology
platforms à bearing and units, seals, mechatronics, services and
lubrication solutions à to the customers and provide them with
customized solutions across all platforms.
The SKF Solution Factory will play an important role in giving
customers access to SKFÃs full capabilities by combining its expert
knowledge from industries, technology platforms and overall working
processes. The facility in Pune is the seventh in the world in the SKF
group and is part of a growing global network of SKF Solution Factories
and will help customers reduce their operating costs and improve energy
efficiency.
HEALTH, SAFETY & ENVIRONMENT
As a part of SKF commitment towards the principles of sustainable
development, safety, health and environment continue to be priority
areas for the Company. Your Company has always appreciated its social
responsibility as a part of corporate citizenship philosophy. It
follows the practice of providing safe working place, respecting the
environment, caring for its communities and demonstrating high ethical
standards. It has undertaken activities in the areas of community
development, environment & sustained development to reach out to weaker
sections of society.
The SKF policy is to develop, produce and market products and services
that satisfy the needs of our customers and at the same time are safe
for their intended use. The objective is to attain long term
sustainability through process improvements, breakthrough technologies
and development of new products and services.
A dedicated ÃSafety Management Teamà has been put in place towards the
prevention of untoward incidents at the plant level, besides educating
& motivating employees on various aspects of Health, Safety &
Environment.
As a responsible corporate, SKF has constantly pursued businesses that
will activate higher growth and promote sustainable development.
Climate change is one of the most vital issues facing the world today.
SKF believes that respect for the environment is critical to the
success of its business. This has been and will continue to be one of
its guiding principles. It is committed to minimizing the environmental
impact of its operations and its products through the adoption of
sustainable practices and continuous improvements in environmental
performance. Several energy efficiency measures have been taken at
manufacturing locations to reduce the consumption of energy and promote
the use of renewable energy.
The Company is continuously monitoring waste in adherence with the
pollution control norms. Number of activities are being planned every
year, some of them were:
o Six Sigma projects on environmental activities are being undertaken
constantly in order to preserve our natural resources with a clear
objective that ÃWe do not inherit the earth from our ancestors; we
borrow it from our children.Ã
o We have achieved a reduction in CO2 emission of around 4.6% in the
current year following a 9% reduction in 2008.
o We have introduced rain water harvesting at our plant locations in
Pune and Bengaluru.
o We are progressively working towards achieving environmental
excellence; SKF has launched an ambitious and challenging target called
ÃBeyond ZeroTMÃ. SKFÃs end objective is to be a positive contributor to
the worldÃs environment.
o A separate Sustainability team has been formed to increase awareness
level of each employee about Global warming which is a threat to human
well being. ÃSteps you can takeà a template showing how small
contribution can Ãsave the planet earthà is being distributed to all
employees at least once in a week. All employees were educated through
training to save electricity in factory and in their houses.
AWARDS / RECOGNITION
During the year, the Company received various awards and recognitions,
significant amongst which are the following:
- Dun & Bradstreet Rolta Award for The best company in the bearing
sectorÃ.
- ÃLean Manufacturing Awardà under Six Sigma Project in the Year 2009.
- Award for sustainable growth through Six Sigma by Confederation of
Indian Industries (CII).
- Bengaluru plant won ÃNational Award for Excellence in Water
Management 2009Ã from CII.
- Best Kaizen Award received from Toyota on ÃCommitment on Quality to
CustomersÃ.
- 1st award in TKSA western region QC competition.
- Best work place Management in Automotive division from within SKF
group.
DIRECTORSÃ RESPONSIBILITY STATEMENT
Pursuant to requirements of Section 217 (2AA) of the Companies Act,
1956 and on the basis of information and advice received by them your
Directors confirm:- 1. that in the preparation of the annual accounts,
the applicable accounting standards have been followed along with
proper explanations relating to material departures;
2. that the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as on December 31, 2009 and of the profit or
loss of the Company for the year ended on that date;
3. 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;
4. that the Directors have prepared the annual accounts on a going
concern basis.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information relating to Energy Conservation, Technology Absorption
and Foreign Exchange Earnings and Outgo as required to be disclosed
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 forming part of this
Report.
CORPORATE GOVERNANCE
A detailed report on the Corporate Governance system and practices of
the Company and certificate from the Auditors of the Company regarding
compliance of conditions of Corporate Governance and a separate section
on Management Discussion & Analysis forms part of the Annual Report.
Certificate from CEO/CFO, inter alia, confirming the correctness of the
financial statements, compliance with CompanyÃs Code of Conduct,
adequacy of the Internal Control measures and reporting of matters to
the Audit Committee in terms of Clause 49 of the Listing Agreement with
the Stock Exchanges, is also enclosed as a part of the Annual Report.
DEPOSITS
The Company discontinued accepting fixed deposits from Public and
Shareholders in the year 2001. The amounts outstanding are those
amounts which have not been claimed by the depositor holder on maturity
even after sending reminder. A sum of Rs. 0.3 million from Public
remained unclaimed as at December 31, 2009.
Pursuant to Section 205C of the Companies Act, 1956 an amount of Rs.
0.2 million lying as deposits and an amount of Rs. 0.2 million towards
interest on fixed deposits which remained matured and unclaimed for a
period of seven years from the date they became due for payment have
been transferred to Investor Education and Protection Fund set up by
the Central Government.
PERSONNEL
The Board of Directors commends the continued dedication of employees
at all levels. Our industrial relations continue to be peaceful and
cordial.
The information as per Section 217 (2A) of the Companies Act, 1956 read
with Companies (Particulars of Employees) Rules, 1975 forms part of
this Report.
DIRECTORS
During the period, Mr. Phil Knights resigned from the Directorship of
the Company effective from October 16, 2009.
The Board places on record its gratitude for the valuable services
rendered and guidance provided by Mr. Knights during his tenure with
the Company.
In accordance with the requirements of the Companies Act, 1956 and the
CompanyÃs Articles of Association, Mr. K. C. Mehra, Mr. N. J. Jhaveri
and Mr. T. Sthen retire by rotation and being eligible have offered
themselves for re-appointment.
Mr. Shishir Joshipura was appointed by the Board in its meeting held on
September 21, 2009 as the Managing Director of your Company effective
from December 1, 2009.
Mr. Rakesh Makhija, Managing Director of the Company has resigned
effective from January 1, 2010 on being appointed as President, Asia of
the SKF Group and now will be based out of China. The Board has
appointed Mr. Makhija as an Additional Director effective from January
1, 2010. As per the provisions of Section 260 of the Companies Act,
1956, Mr. Makhija holds office only up to the date of the forthcoming
Annual General Meeting of the Company. The Company has received notice
under Section 257 of the Act along with the requisite deposit, in
respect of the above persons, proposing the appointment as a Director
of the Company. Resolutions seeking approval of the Members for their
appointment have been incorporated in the Notice of the Annual General
Meeting and a brief detail about them has been provided in the
Corporate Governance Report.
AUDITORS
M/s. B S R & Associates, Chartered Accountants, who are the Statutory
Auditors of the Company, continue to hold office until the conclusion
of the Forty-Ninth Annual General Meeting and offer themselves for
re-appointment.
A certificate from the Auditors has been received to the effect that
their re-appointment, if made, would be within the limits prescribed
under Section 224(1B) of the Companies Act, 1956.
COST AUDITORS
Pursuant to Section 233B of the Companies Act, 1956, the Central
Government has prescribed Cost Audit of the Company. The Board has
appointed M/s. N. I. Mehta & Co., Cost Auditor of the Company for the
year 2009. The Cost Audit is under process and the Company will submit
the Cost Auditorsà report to the Central Government in time.
ACKNOWLEDGEMENT
The Board wishes to acknowledge and thank all stakeholders for their
valuable sustained support and encouragement towards the conduct of the
efficient operations of the Company. Your Board is particularly
indebted to its Principals, AB SKF who have supported the Company at
all times.
For and on behalf of the Board
K. C. Mehra
Chairman
Pune, February 19, 2010