The Directors of your Company are pleased to present the 56th Annual Reportwith the audited financial statements for the financial year ended on March 31 2017.
| || ||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 prioryear's figures are restated to comply with Ind AS ; also the current year figures are fora period of 12 months whereas the prior year figures are for a period of 15 months andhence the figures for the current year are not directly comparable with the figures of theprior year.
The revenue from operations of the Company for year ended on March 31 2017 stood at28355.4 million as compared to Rs 32264.9 million in the previous year. The Company'sProfit before tax for the year ended March 31 2017 was Rs 3756.0 million as compared toRs 3944.8 million in the previous year.
The Profit after Tax for the period ended March 31 2017 was Rs 2438.9 millioncompared to Rs 2558.9 million during the previous year.
As stated above these figures are not directly comparable with the previous year dueto 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 endof the financial year of the Company to which these Financial Statements relate and thedate of this Report which affect the financial position of the Company.
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 isuploaded 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 dividendof Rs 10.0 per Equity share of Rs 10 face value for the year ended March 31 2017 ascompared to Rs. 15.0 per Equity share for the preceding year ended March 31 2016. ThisDividend is subject to the approval of the Members at the 56th Annual GeneralMeeting of the Company.
Transfer to Reserves
The Company proposes to transfer Rs 1000 million to the General Reserve out of theamount available for appropriation.
Buyback of equity shares
Considering the company's strong cash reserves and its healthy cash flow generationthe Board of Directors in its meeting held on February 13 2017 approved a proposal forbuyback of equity shares of the company subject to shareholder approval for a maximumaggregate amount of Rs 3900 Million amounting to 4.93% of the aggregate of paid upcapital plus free reserves as on March 31 2016 at a price of Rs 1500 per share. Thebuyback is being conducted under the tender offer route according to the provisions of theSecurities and Exchange Board of India (Buy Back of Securities) Regulations 1998 asamended. Subsequently the Company received the requisite approval from the shareholdersand the buyback process is in progress.
AwARDS / ACCOLADES
You Directors are happy to report that during the year your Company received numerousawards and felicitations from distinguished bodies for achievements in various fields andsome of the significant achievements were:
Won the Dun & Bradstreet Best Bearing Company award for 2016 for theNinth year in a row
Bengaluru plant won the Green Manufacturing Award' at The Machinist SuperShopfloor award in the large enterprise category
SKF India was recognized amongst the 2016 Working Mother & AVTAR 100 BestCompanies for Women in India
SKF India received an award for Excellence in Sustainability' and Bangalorefactory received an award for Excellence in Safety' in Manufacturing TodayConference & Awards 2016
SKF Manufacturing facilities Pune and Bengaluru were rated with Platinum andGold Certificates respectively at India Manufacturing
Excellence awards 2016 organized by Frost & Sullivan
Received Quality Gold Award' from Bajaj Auto in recognition of product qualitycost delivery service & response management as a part of Customer firstapproach
Factory Manager-Pune made it to the list of Great Managers as part of GreatManagers Awards Program run by People Business in association with Times of India
SKF Pune Factory won the Future Ready Factory of the Year - Platinum Award in theEngineering 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 thesecond time
At IMEA 2016 Bengaluru factory won the Gold Certificate of Merit.
Appreciation by JSW Steel received for excellence in best safety practices
MANAGEMENT'S DISCUSSION AND ANALYSIS AND OUTLOOK
A detailed review of the operations performance and future outlook of the Company andits business is given in the Management's Discussion and Analysis report which forms partof this Report as Annexure I.
The Annual Report contains a separate section on Company's Corporate Governancepractices together with a certificate from the Secretarial Auditor confirming complianceas per SEBI (Listing Obligations and disclosure Requirements) Regulations 2015 whichforms part of this Report as Annexure II.
DIRECTORS AND KEYMANAGERIAL PERSONNEL
As per the provisions of Sections 149 and 152 of the Companies Act 2013 theshareholders at their 54th Annual General Meeting held on April 23 2015 hadapproved the re-appointment of all the existing Independent Directors of the Company fortenure of up to five consecutive years. None of the Independent Directors are liable toretire by rotation. In accordance with Section 149(7) of the Companies Act 2013 eachIndependent Director has confirmed to the Company that he or she meets the criteria ofindependence laid down in Section 149(6) of the Companies Act 2013 and under SEBI(Listing Obligations and disclosure Requirements) Regulations 2015. In accordance withthe provisions of the Companies Act 2013 and the Articles of Association of the CompanyMr. Rakesh Makhija (DIN: 0117692) retires by rotation and being eligible offers himselffor re-appointment. Mr Stephane Le Mounier resigned from the Board following achange in his responsibilities within the SKF Group and the Board places its' sincereappreciation and gratitude for his valuable services rendered during his tenure with theBoard. Mr. Shishir Joshipura Managing Director (DIN: 00574970)
Mr. Chandramowli Srinivasan Chief Financial Officer and Mr. Pradeep Bhandari CompanySecretary are the Key Managerial Personnel of the Company as on the date of this Report.
The Board of Directors met five times during the year. In addition an Annual Strategicmeet was held to obtain strategic direction from the Board in which all Business units andfunctional heads made detailed presentations to appraise the Board about the variousbusiness activities achievements plans etc . Details of Board meetings and otherCommittee meetings of the Board are laid out in Corporate Governance report which formspart of this annual report.
Your Company believes in value for its stakeholders through ethical processes &integrity. The Board plays a very important role in ensuring that the company performanceis monitored and timely inputs are given to enhance its performance and set the rightdirection for profitable growth and in full compliance with regulatory requirements.
As per provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 an evaluation of the performance of the Boardits Committees and individual members was undertaken. The criteria applied in theevaluation process are explained in the Corporate Governance Report. The results of suchperformance evaluation were presented to the meetings of the Independent Directors / NRC /Board.
In compliance with the requirement of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has put in place a familiarization programfor Independent Directors to familiarize them with the working of the Company theirroles rights and responsibilities vis-a-vis the Company the industry in which theCompany operates business model etc. Details of the Familiarization Programme areexplained in the Corporate Governance Report and are also available on the Company'swebsite at http://www.skf.com/ in/investors/shareholder-information/index.html.
APPOINTMENTO F DIRECTORS AND REMUNERATION POLICY
A Policy with well-defined criteria is in place for the selection of candidates forappointment as Directors Key Managerial Personnel and senior leadership positions. Therelevant information has been disclosed in the Corporate Governance Report.
The Company has in place an Audit Committee in terms of the requirements of theCompanies Act 2013. The details relating to the same are given in the Report on CorporateGovernance forming part of this Report. The Board has accepted all recommendations made bythe Audit Committee during the year.
CORPORATE SOCIAL RESPONSIBILITY
The Company has always maintained a high level of social engagement and socialresponsibilities . The initiatives in the social sphere have always been built on theCompanys Values of SKF Care which comprises of four pillars namelyBusiness care /Employee care/ Environment care and Community care'. The Companyconsiders it as its economic environmental and social responsibility to fostersustainable local development as well as add value to the local communities in which itoperates.
Corporate Social Responsibility (CSR) Committee reviews and monitors theCSR projects and expenditure undertaken by the Company. The brief outline of the CSRPolicy of the Company and the initiatives undertaken by the Company on CSR activitiesduring the year are set out in Annexure III of this report.
The Company has a formulated Risk Policy' which identifies risks and supports themanagement in strategic decision making. It is reviewed periodically and involves mappingof all the risk elements on parameters like likelihood of the event and the impact it isexpected to have on the Company's operations and performance. The risks that fall underhigh likelihood and high impact are identified as key risks for which detailed mitigationplans are developed and integrated with the Business processes and Audit Plan. A sectionon Risk management practices of the Company forms a part of the chapter on Management Discussion and Analysis 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 havebeen 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 fairview of the state of affairs of the Company at March 31 2017 and of the profit of theCompany for that period;
3. Proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets 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 theCompany and that such internal financial controls are adequate and are operatingeffectively and
6. Proper systems to ensure compliance with the provisions of all applicable laws arein place.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and the reviews carried out by the Management and Committees of theBoard the Board is of the opinion that the Company's internal financial controls wereadequate 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 theCompanies (Accounts) Rules 2014 the particulars of contracts or arrangements enteredinto by the Company with related parties referred to in Section 188(1) in Form AOC-2 isattached as Annexure IV of this report. The prior approval from the members was taken bythe Company for such transactions mentioned in the aforesaid Annexure. All transactionswith Related Parties are approved by the Audit Committee / Board in line with theprevailing regulatory requirements for such transactions including prior omnibus approvalof the Audit committee as permitted by law . Statement giving details of the Related PartyTransactions entered against such prior approval taken is placed before the AuditCommittee on a quarterly basis.
All transactions entered into with related parties during the year were on arm's lengthbasis. The details of related party disclosures form part of the notes to the financialstatements provided in this annual report.
None of the Directors and Key Managerial Personnel had any pecuniary relationships ortransactions vis-a-vis the Company.
SUBSIDIARIES JOINT VENTURE AND ASSOCIATES
The Company doesn't have any Subsidiary or Joint Venture or any Associates as perdefinition of the Companies Act 2013.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
Your Company has a well defined whistle blower policy to ensure director and employeescan raise concerns and alarms to report concerns about unethical behavior actual /suspected frauds and violation of Company's Code of Conduct. Under this policy provisionshave been made to safeguard persons who use this mechanism from victimization. The policyprovides access to the chairperson of the Audit Committee.
To create greater awareness among employees e-learning modules and face-to-facetraining sessions and employee forums are planned for achieving a high level of engagementand compliance. This reflects your Company's strong commitment to Zero tolerance'for non-compliance in this regard. The Policy for the same has been disclosed on theCompany's website http://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 Section143 (12) of the Act and Rules framed thereunder either to the Company or to the CentralGovernment.
As required under SEBI (Listing and obligations and disclosure requirements)Regulations 2015 a Business Responsibility Report is attached and is a part of thisannual report the Dividend Distribution Policy is disclose in the Corporate GovernanceReport.
The Company has not accepted any deposits covered under Chapter V of the Companies Act2013. Accordingly no disclosure or reporting is required in respect of details relating todeposits covered under this Chapter.
Pursuant to provisions of Section 139 of the Act read with the Companies (Audit andAuditors) Rules 2014 M/s Price Waterhouse & Co Bangalore LLP Chartered Accountants(Firm Registration No. 0075675S with ICAI) were appointed as Statutory Auditors of theCompany for a term of four years to hold office from the conclusion of 54thAnnual General Meeting held on April 23 2015 until the conclusion of 58thAnnual General Meeting subject to ratification of their appointment at every subsequentAnnual General Meeting.
A certificate from them has been received to the effect that their appointment asStatutory Auditors of the Company if ratified at ensuing Annual General Meeting would beaccording to the terms and conditions prescribed under Section 139 of the Act and Rulesframed there under.
A resolution seeking ratification of their appointment forms part of the Noticeconvening 56th Annual General Meeting and the same is recommended for yourconsideration and approval.
There have been no qualifications reservations adverse remarks or disclaimers in theauditor's reports requiring explanation or comments by the Board.
The Company has appointed M/s Parikh & Associates a firm of Company Secretaries inPractice to undertake the Secretarial Audit of the Company pursuant to the provisions ofSection 204 of the Companies Act 2013 and the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014. The Report of the Secretarial Auditor is attached asAnnexure V of this report. As regards the observations made in the said Secretarial AuditReport regarding shortfall in the spend on CSR activities explanation is given inAnnexure III forming part of this Directors' Report.
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 year2016-17. The Cost Auditor have confirmed that their appointment meets the requirements ofSection 141 of the Companies Act 2013. The Cost Audit is under process and the Companywill submit the Cost Auditors' report to the Central Government in time. The Cost AuditRules 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 theMembers in a general meeting for their ratification. Accordingly a Resolution for seekingMembers' ratification for the remuneration payable to M/s RA & Co Cost Auditor isincluded 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 orTribunal 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 Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are attached as Annexure VI of thisreport. However pursuant to the provision of Section 136(1) of the Companies Act 2013the Annual Report excluding the aforesaid information is being sent to the members ofthe Company. The said information is available for inspection at the registered office ofthe Company during business hours on working days of the Company up to the date of theensuing Annual General Meeting. Any shareholder interested in obtaining a copy thereofmay write to the Company Secretary in this regard.
TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS TO IEPF
Pursuant to the provions of section 125 of the Companies Act 2013 the declareddividends which remained unpaid or unclaimed for a period of seven years have beentransferred by the compnay to the Investor Education and Protection Fund (IEPF)established by the Central Government.
As per the Investor Education and Protection Fund Authority (Accounting AuditTransfer and Refund) Rules 2016 notified by the Ministry of Corporate Affairs andsubsequent amendment thereof the Company is going to transfer shares to such authority inrespect of which dividend has not been paid or claimed by shareholders for sevenconsecutive years or more. The Company has sent individual notices to concernedshareholders whose shares and dividend are liable to be transferred to IEPF Authority totheir latest available addresses. The Company has displayed full details of suchshareholders dividend and shares on its website at www.skfindia.com. Shareholders arerequested 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 thefinancial 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 Rule8(3) of the Companies (Accounts) Rules 2014 is provided in Annexure VII forming part ofthis Report.
POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Company is an equal opportunity provider and consciously strives to build a workculture that promotes the dignity of all employees. As required under the SexualHarassment of Women at workplace (Prevention Prohibition and Redressal) Act 2013 andRules framed thereunder the Company has implemented a Policy on prevention prohibitionand redressal of sexual harassment at workplace. All women and men- permanent temporaryor contractual including service providers visitors are covered under the policy. Thishas been widely communicated internally and is uploaded on the Company's intranet portal.An internal Committee comprising 22 management staff across locations including an NGOmember is in place. This includes seven women to redress complaints relating to sexualharassment. Besides in each of the plants there is at least one nodal person in eachregion to receive listen and forward complaints directly to the Committee. During theyear the Company received 1 Complaint which was investigated and closed within 90 workingdays.
Awareness programs were conducted across the Company to sensitize employees to upholdthe dignity of their colleagues at the workplace particularly with respect to preventionof sexual harassment. A few employees also attended training programmes conducted by anexternal agency.
EXTRACTS OF ANNUAL RETURN
The extracts of Annual Return in Form MGT-9 as required under Section 92(3) of the Actread with Rule 12 of the Companies (Management and Administration) Rules 2014 forms partof this Report as Annexure VIII.
The Board of Directors take this opportunity to thank its Principals Aktiebolaget SKFcustomers members suppliers bankers and business partners / associates for theirvaluable and sustained support and co-operation to the Company.
| ||For and on behalf of the Board |
| ||Skf India Limited |
| ||Rakesh Makhija |
|Mumbai ||Chairman |
|May 26 2017 ||DIN: 0117692 |
Annexture III - To The Directors' Report
CORPORATE SOCIALRESPONSIBILITY REPORT
1. Brief outline of the Company's CSR policy including overview of projects orprograms proposed to be undertaken and a reference to the web-link of the CSR policy andprojects or programs.
1.1 SKF INDIA: CSR POLICY VISION AND MISSION
SKF India Ltd (SKF) operates with the values of Empowerment High Ethics Openness andingTeamwork. The Drivers at the core of its working are Grow with ProfitQuality Innovation Simplicity & Speed and Sustainability
At SKF it is not only important that we make profits but also the way we make them. Inaccordance with this philosophy SKF has put in a SKF Care model guiding allour operations. The Model has 4 components namely Business careEmployee care Environment care and Community care.
SKF CSR programs and policies are based on SKF's Community care principleembedded in the above philosophy which is structured in accordance with United NationsGlobal Compact principles and The Business Charter for Sustainable Development byInternational Chamber of Commerce. The Vision: SKF India's vision guiding ourentire community care program is "To Create a Positive change in the life of thecommunities neighboring our operations and create a meaningful difference from therecipient's perspective"
The mission: Based on the above vision the SKF's community care program isinitiated with a mission of working with underprivileged communities neighboring ouroperations. Two focus areas are so far identified as under:
1. Holistic development of Community Kids through Sports Education
2. Empowerment of Youth through Multiskilling initiatives
SKF India is running and monitoring the initiatives in the above areas throughstructured short and long term programs encouraging employees to volunteer and partnerselected community care professionals and organizations to enhance the effectiveness ofthe program.
1.2 Skf INDIA COmmUNITY CARE PROGRAmS
In accordance with the vision and mission above SKF has identified following areas andprograms.
1.2.1:Program 1: Skf Sports Education Program (SSEP) Program Overview:
SKF Sports academy's vision is aligned with United Nations' Declaration of the Rightsof the Child which in Article 7 states The child shall have full opportunity toplay and for recreation.
SKF felt the need of this fundamental need of community kids by providing thefacilities infrastructure coaches and guidance to the students of local municipalschools who lack such opportunities. This unique program not only transforms these kids tobetter players but it holistically develops them into better human beings.
The sports education program aims to provide better opportunities to sports enthusiastsfrom nearby municipal schools of Pune and Ahmedabad through our established footballacademies.
The SKF Sports Education Program is functional at two locations: Pune and Ahmedabad.Every year a batch of 30 Boys and 30 girls are enrolled at each location for the 5year Skf Sports Education Program. SKF Football Academies at Pune & Ahmedabad arewell equipped with infrastructure and certified coaches for systematic sports coaching toBoys and Girls from municipal schools. The entire program is completely sponsored by SKFIndia the added facilities like - state of art center with class rooms activity halldressing rooms and other facilities are attraction for the kids.
This sponsored program takes care of their physical behavioral nutritional and othernecessary requirements. Certified Coaches of our implementation partners: FC Pune CityFootball Club at Pune and Kahaani Sports Academy at Ahmedabad provide world classfootball training to the community kids.
The academy also brings in opportunity of playing with external football teams throughparticipation in local national and international tournaments. Every year the bestplayers from our academies are sent to Sweden to represent SKF India at the World'slargest Youth Football Tournament Gothia Cup.
The program works on child development and apart from Football training helps them inimproving their academic performance provides them career guidance from time to time.
Impact of the program:
We conducted an assessment to understand the impact of the certified program in March2017. An external agency interacted with academy kids their coaches and parents tounderstand the shift in behavior through the program.
The report says:
The positive changes in the kids are visible: improvement in sporting skills level ofconfidence sportsmanship and performing under pressure are a few of them.
Positive impact on health with balanced and structured nutritional support has resultedin visible changes in their growth weight and fitness level.
Improvement in personality social behavior enhanced attendance and academicperformance are noticeable and appreciated by the schools.
These kids are taking leads at school and in communities on many programs and are nowappreciated as Icons.
1.2.2 Program 2: Youth Empowerment @ Skf (YES)
India is an emerging economy whose manufacturing sector growth is impressive andstill has a lot of potential to grow in the near future. India is one of the youngestnations with over 65% of entire population below 25 years age group. The need of the houris to provide adequate skills to the youth to make them employable to meet thechallenges and the requirements of industry.
Indian automobile industry has grown extensively over last decade resulting in highdemand for skilled Automotive Technicians. However the present pool of untrainedAutomotive Technicians are generally school drop-outs who have learnt only the basicon the job skills informally. Thus combining need of the population seekingemployable skills for youth and need of the industry for skilled services SKF decided tolaunch a program for skilling the youth in the field of automobile maintenance.
To equip 5000 Automotive Technicians over a period of five year at five locationsacross India with skills covering technical entrepreneurial and lateral competencies likebasic computer knowledge.
Youth empowerment At SKF (YES) program aims at empowering under-privilegedyouth with the know-how of modern automobile maintenance and servicing skills in order tohelp them gain employment at Automotive OEMs / Automobile service stations or becomeentrepreneurs by setting up own vehicle service stations.
The program currently runs at 3 locations Pune Bangalore and Haridwar inspecially constructed centers well equipped with modern automotive sub systems andvehicles learning fixtures computer consoles for e-learning class rooms and otherfacilities.
The beneficiaries are 18 to 25-year-old boys and girls from the neighboring communitywho belong to low income families. The program costs are fully sponsored by SKF.
The 6 month course contains a combination of theory and hands-on training on two andfour wheeler repairing and maintenance services. In order to help the students gain allround development the program includes sessions on communication skills customerservice finance and business management skills as well.
The first center was established in Pune in 2015 in the premises of Don Bosco PrivateIndustrial Training Institute in Chinchwad. The center is equipped with a classroomtraining laboratory and an interactive learning Workshop. The second state of the artcenter has become fully operational in Bengaluru from March 1 2016 atBommansandra Area Bengaluru Karnataka. The third YES center is recently started atHaridwar Uttarakand and is functional now & will be fully operational from July'17onwards. Currently through this program till date 346 young beneficiaries have completedour courses. Out of which 276 students have received jobs at various OEM's Multi brandgarages showrooms authorized service stations and have come up with their own garagestoo.
Impact of the program:
An impact assessment to dip dive into the program was conducted by an external agencyin March 2017.
The report quotes:
- The alumni of both Bengaluru and Pune are very happy with the training program andcourse has given them good theory and practical knowledge about automobile services andrepairing
- The opportunity to take up job in their field of interest excites many.
- Being school dropouts and having no scope of access to formal technical educationYES training has given them employable skills that has helped to earn a livelihood andsupport their family
- The report also talks about very positive industrial and societal impacts.
The program also brought forward some areas of improvements that is currently underdevelopment to strengthen the program further.
1.2.3 Program 3: women Empowerment
At SKF we believe that the empowerment of girls and women begins with qualityeducation and access to information. By partnering with Lila Poonawalla Foundation (LPF)SKF supports the education of deserving girl students pursuing Graduation andPost-Graduation courses in science and engineering in leading colleges across Pune. Thissupport is available for girls for 3 years of graduation and 2 years of post-graduationprogram.
SKF strives to contribute to the development & empowerment of women in India andencourage more women to step into the engineering domain by supporting this program. SKFalso imparts soft skills training and career counselling programs for the students at theSKF Campus.
Higher education of deserving Girls in economically weaker sections in India is amatter of concern due to various factors that affect their opportunities and one of themis lack of economic support after their schooling. Economic support for such girls tocomplete their higher education at opportune times can make their dreams come true andempower them in their life to stand on their own feet and contribute to society better.
To empower young girls with structured financial assistance program through theircollege and technical education to make them capable of getting a meaningful career andemployment opportunities
1.2.4 Other programs :
Other incidental support programs responding to community needs from time to time wereundertaken during 2016-17 such as:
Support to Drought hit farmers in Maharashtra -SKF Supported to drought affected areain Maharashtra by Contribution to a well reputed NAAM foundation. This support wasinitiated by SKF Employees through their own voluntary personal contributions to which SKFcontributed an equal share.
Support to Akanksha Foundation Pune Teacher training program that works in thefield of improving quality of school education.
Support to Rotary club Pune in their program for Supporting community by providingrural sanitation facilities.
1.3 The Composition of the CSR Board Committee:
Hema Hattangady Independent Director and Chairperson CSR board committee
Rakesh Makhija Chairman - SKF India Ltd.
Shishir Joshipura Managing Director SKF India Ltd.
2. The average net profit of the company for the last three financial years computedin accordance with Sec 198 of the Companies Act 2013 is 3185 MINR.
3. CSR Expenditure required to be spent as per Sec 135 of the companies Act 2013 (twoper cent of the amount as in item 2 above) 63.7 MINR.
4. Details of CSR spent during the financial year:
All figures MINR:
(a) Total amount spent during the financial year = 40.5 MINR
(b) Amount unspent if any = 63.7 40.5 = 21.2 MINR
(c) Manner in which the amount spent during the financial year is detailed below:
|S. No. ||CSR project or activity identified ||Sector in which the project is covered ||Projects or programs (1) Local area or other (2) Specify the State and district where project or programs was undertaken ||Amount outlay (budget) project or programs- wise ||Amount spent on the projects or programs sub-heads: (1) Direct expenditure on projects or programs (2) Overheads: ||Cumulative expenditure up to the reporting period ||Amount spent Direct or through implementing agency |
|1. ||Education ||Sports Education program ||1) Pune Maharashtra. ||9.4 ||8.93 (direct) ||8.93 ||8.50(Direct) |
| || || || || || || ||0.43(Imp Agency) |
| || || ||2) Ahmedabad Gujarat ||4.8 ||2.33 (Direct) ||2.33 ||0.74(Dir) |
| || || || || || || ||1.59(Imp agency) |
|2 ||Women Empowerment ||Women Empowerment ||Pune Maharashtra ||4.0 ||3.09 (Direct) ||3.09 ||0.07 (Dir) |
| || || || || || || ||3.02(Imp agency) |
|3 ||Education ||Youth Empowerment at SKF ||1) Pune Maharashtra ||3.2 ||4.51(Direct) ||4.51 ||1.75 (Direct) |
| || || || || || || ||2.75(Imp agency) |
| || || ||2) Bangalore Karnataka ||6.1 ||7.53(Direct) ||7.53 ||3.98(Dir) |
| || || || || || || ||3.55(Imp agency) |
| || || ||3) Haridwar Uttarakahand ||16.3 ||10.29(Direct) ||10.29 ||0.76(Dir) |
| || || || || || || ||9.53(Imp agency) |
| || || ||4) YES center ||16.3 ||0.0 ||0.0 ||0.0 |
|4 ||Village Development ||Rotary Club Nigadi ||Pune ||0.3 ||0.30 ||0.30 ||0.30(Imp agency) |
| || ||Naam Foundation ||Pune ||0.38 ||0.38 ||0.38 ||0.38(Imp agency) |
|5 ||Education ||Akansha Foundation ||Pune ||0.57 ||0.57 ||0.57 ||0.57(Imp agency) |
|6 || ||Other Projects ||Pune ||0.5 ||0.53 ||0.53 ||0.53(Imp agency) |
| || || ||- Udyog Dham || || || || |
| || || ||- CSO-CSR Bridge || || || || |
| || || ||- Liveweek Business || || || || |
|7 ||CSR Admin cost (Overheads) ||CSR Projects ||CSR All location || ||2.03 ||2.03 ||2.03 (Direct) |
| ||Total program spent || || || ||40.5 || ||16.35 (Direct) |
| ||MINR || || || || || ||22.12(Imp agency) |
5. GIVE DETAILS OF IMPLEMENTING AGENCY:
5.1 FC PUNE CITY FOOTBALL CLUB: SERVICE PROVIDER FOR SKF SPORTS EDUCATION PROGRAM PUNE
Promoting football coaching with dedicated team of professional coaches to students ofSKF Sports Education Program.
FC Pune City Football Club is a company incorporated under the provisions of CompaniesAct 1956 having its office at Mumbai and Pune.
5.2 Kahaani Sports Academy: Service provider for Skf Sports Education ProgramAhmedabad
Promoting football coaching with dedicated team of professional coaches to students ofSKF Sports Education Program.
Kahaani Football academy Ahmedabad established in 2006 promotes football fitness andsportsmanship through certified coaches.
5.3 Lila Poonawalla foundation: Partner in women empowerment program
Lila Poonawalla Foundation (LPF) provides scholarships to the girls from Pune Districtfor School Education Graduation and
Post-Graduation programs in Pune District. LPF scholarships are merit-cum-need basedscholarships. Lila Poonawala Foundation is a Charitable Trust registered in India onSeptember 9 1995 with Bombay Charitable Trust Act 1950.
5.4 Don Bosco Pune: Partner for YES project at Pune;
Don Bosco Vyavasayik Prashikshan Kendra (DBVPK) caters to community youths fromeconomically weaker sections. DBVPK presently conducts many non-formal teaching trainingcourses spread over a year. DBVPK is a registered trust and has been taking keen interestin skill training as demanded by various industries and is a member of Don Bosco TechIndia. The Chinchwad centre in Pune Maharashtra is functional since August 15 1999.
5.5 Sambhav foundation: Partner for YES project at Bangalore & haridwar
Sambhav Foundation is a non-governmental organization based in Bangalore. It beganlargely as an effort to provide a one-stop platform for unorganized sector workers toobtain services which are currently available and accessible by formal sector workers.
Sambhav Foundation is a charitable trust having registered office at Basaveshwar NagarBengaluru 560079.
6. In case the company has failed to spend the two per cent of the average netprofit of the last three financial years or any part thereof the company shall providethe reasons for not spending the amount in its Board report.
The Company started its own flagship CSR program YES to empower youththrough skill development and vocational training in 2015-16 which is a new conceptrequiring establishment of state of art centers equipped with necessary infrastructures atdifferent places. The company has an ambitious plan and intention of expanding program to5000 beneficiaries in 5 years through 5 centers. Apart from 2 centers established in2015-16 the YES program expansion was planned at 2 new places in this year. This requiredextensive investment in time and efforts to conceptualize identify right partners choosethe location and design the centers develop trainers curriculum and suppliers forinfrastructure and machinery. For its planned 3rd center at Haridwar there were majordelays in contracting a suitable place and the plans were required to be changed due tolast minute cancellations of contract for lease etc. This delayed the program schedule by4 months specifically the startup of the 3rd and 4th centers andrelated expenditures beyond the financial year.
Learning from this and improving upon project executions the Company will closelymonitor its programs further in 2017-18 to achieve the program plans in line with plannedschedules and will be able to spend the full amount on CSR in line with the requirementsof Sec 135 of the Companies Act 2013 in the coming year.
7. A responsibility statement of the CSR Committee that the implementation andmonitoring of CSR Policy is in compliance with CSR objectives and Policy of the company.
We hereby declare that implementation and monitoring of the CSR Policy are incompliance with CSR objectives and policy of the Company.
|Shishir Joshipura ||Hema Hattangady |
|Managing Director ||Chairperson CSR Committee |
|Mumbai || |
|May 26 2017 || |
Annexture IV - To The Directors' Report
Form NO. AOC - 2
[Pursuant to Section 134(3)(h) of the Companies Act 2013 and Rule 8(2) of theCompanies (Accounts) Rules 2014]
1. Details of contracts or arrangements or transactions not at Arm's length basis.
The Company has not entered into any contract or arrangement or transaction with itsrelated parties which is not at arm's length during the previous financial year.
2. Details of material contracts or arrangements or transactions at Arm's length basis.
|SL. No. ||Particulars ||Details |
|a) ||Name (s) of the related party & nature of relationship ||Aktiebolaget SKF and its Group Companies |
|b) ||Nature of contracts/arrangements/ transaction ||Sale / Purchase of Goods Services rendered Commission earned Purchase / Sale of equipment Rent received Interest expense/ income reimbursement of expenses |
|c) ||Duration of the contracts/arrangements/ transaction ||Ongoing basis normal and incidental to Company's business operations |
|d) ||Salient terms of the contracts/ arrangements/ transaction including the value if any ||The information forms part of the notes to financial statement for the year 2016-17 |
|e) ||Date of approval by the Board ||All the transactions are approved by the Audit Committee and Board in line with the regulations and related party transactions policy framed by the Company. The approval of the members was taken in the previous shareholders meeting held on July 20 2016 in case of Material' related party transactions for a period 2015-16 to 2017-18. |
|f) ||Amount paid as advances if any ||- |
Annexture VI - To The Directors' Report
STATEMENT OF DISCLOSURE OF REMUNERATION
[Pursuant to Section 197 of the Companies Act 2013 and Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]
(A) The ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year; the percentage increase in remunerationof each Director
|Name of Director / KMP ||Designation ||Ratio of remuneration of each director to the median remuneration ||Percentage increase in remuneration* (%) |
|Rakesh Makhija ||Non- Executive Chairman ||2.24 ||77.27 |
|S. Joshipura ||Managing Director ||22.96 ||-0.51 |
|P. R. Menon ||Independent Director ||1.87 ||-13.86 |
|P M Telang ||Independent Director ||1.87 ||-14.26 |
|H. A. Hattangady ||Independent Director ||1.78 ||-9.62 |
|S. Le Mounier ||Non- Executive ||N.A. ||N.A. |
* The current year remuneration is for 12 months whereas the previous year remunerationis for 15 months and hence the remuneration for the two periods is not comparable;therefore also the percentage increase in remuneration (not annualized) compared toprevious year is not comparable.
(B) The percentage increase in remuneration of Chief Financial officer was 8 percentand Company Secretary was 8 percent.
(C) The percentage increase in the median remuneration of employees for the financialyear was 10.69.
(D) The number of permanent employees on the rolls of company was 1797.
(E) Relationship between average increase in remuneration and company performance;
The profit after tax for the year on an annualized basis increased by 19.15 % ascompared to an average increase in remuneration per employee of 9.97 %. The increase inremuneration is linked to mainly the individual performance and partly also to businessperformance through a variable compensation component
(F) Comparison of the remuneration of the Key Managerial Personnel against theperformance of the company: The compensation for the KMP is guided by the individualperformance and competitiveness with market compensation through bench marking surveys.The key performance parameters are considered for the variable component; the increase isin line with normal pay revisions and variable component forming integral part ofremuneration which is linked to individual performance and company performance.
(G) Variation in the market capitalization of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year:
The market capitalization as on March 31 2017 was Rs 84361.51 million (Rs66664.47 million as on March 31 2016). The price earnings ratio of the Company was 34.55as at March 31 2017 and was 32.42 as at March 31 2016 (based on annualized EPS).
(H) The average annual increase was around 10.17%. However during the course of theyear the total increase is approximately 10.3% after accounting for promotions and otherevent based compensation revisions. Increase in managerial remuneration for the year was10.3%.
(I) Key parameters for any variable component of remuneration availed by thedirectors: The key parameters for the variable component for directors are as per theremuneration policy approved by the NRC and are within overall limit defined under theCompanies Act 2013.
(J) The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year; No Employee has been paid salary in excess of any executive director ofthe Company.
(K) We affirm that remuneration paid to the Employees & Directors is as per theRemuneration Policy of the Company.
| ||For and on behalf of the Board |
| ||Skf India Limited |
| ||Rakesh Makhija |
| ||Chairman |
| ||DIN: 0117692 |
|Mumbai || |
|May 26 2017 || |
Annexture VII - To The Directors' Report
Information as per section 134(3)(m) of the Companies Act 2013 read with Rule 8(3) ofthe Companies (Accounts) Rules 2014 and forming part of the Directors' Report for theyear ended March 31 2017 Disclosures
A CONSERVATION Of ENERGY :
SKF Care is the framework on sustainability with the BeyondZeroTM strategy drivingaction to maximize energy conservation. SKF BeyondZeroTM addressed environmental andbusiness performance over the value chain. It includes actions to reduce the environmentalimpact resulting from operations and those of its suppliers while at the same timeproviding customers with solutions to reduce the environmental impact of their products oroperations.
SKF Group had subscribed to number of internationally recognised principles chartersand guidelines which promote sustainability such as UN Global compact OECD ISO 50001ISO 14001 and have energy management systems in place.
Susten a project for conservation of energy which was launched in 2013 has yieldedsplendid results in the area of reduction in power consumption reduction in Co2emission and monetary savings. As part of Susten during the fiscal year 2016-17following projects were undertaken at various locations.
1.1 Pune Plant
Under SustEn3 projects in areas pertaining to grinding channels compressed air andheat treatment were successfully completed resulting in saving of 1.36 GWH.
Various projects to optimize electrical power of spindle motors pumps and conveyormotors were completed and achieved saving of 0.44 GWH.
Rooftop Solar Power plant generated 1.47 GWH of electrical emission.
units amounting to reduction of 1205 tons of Co2
Centralized controller developed in house to optimize compressed air pressure demand bycontrolling compressor loading and unloading pattern. Optimization of the compressed airpressure identifying and eliminating air leakages were carried out.
Major planned maintenance of all furnaces carried out during the year to eliminate heatloss through furnace walls and jackets.
LED lamps were installed on 5 channels as a replacement of T5 tube lights to improveillumination level and energy saving. Total saving of 42 MINR realized by completingdemand side and supply side projects.
Specific energy consumption reduced from 15.6 to 14.8 MWH/MINR value added.
Renewable energy(Green Energy) consumption is 4.5% of the total energy consumption.
1.2 Bengaluru Plant :
Effective usage of free cooling from atmosphere for bearing assembly area resulted inenergy reduction of 8% in air conditioning energy. This is equivalent to reduction of152000 kwh per annum.
Efficient management of energy sourcing from hydel and wind power producers and IndianEnergy Exchange resulted into substantial energy cost savings of 18 MINR.
The specific energy consumption reduced from 17.9 to 17.2
MWH/MINR value added.
Renewable energy (Green Energy) consumption is 50% of the total energy consumption. Itincludes hydel wind and roof top solar energy.
1.3 Haridwar Plant :
Commissioning of sigma air controller for optimised use of compressed air.
Haridwar plant complies with LEEDS/IGBC Guidelines and various aspects ofsustainability and energy conservation are elementary features of the factory structureand infrastructure. The plant embraces stringent energy monitoring programme to captureand address energy wastages; elaborate sub metering for significant energy use is inplace Refrigerant free primary cooling double glazed windows and coolant temperaturerationalization resulting in high energy efficiencies.
The plant has been awarded a silver certification status by Indian Green BuildingCouncil and has fulfilled the SKF Sustainability Factory Rating (SFR) requirements forsilver certification. The specific energy consumption is maintained at 14.5 MWH/MINR valueadded.
B. TECHNOLOGY ABSORPTION:
The Company continues to receive technical know-how from parent Company on ity all theareas of manufacturing which includes product designing product engineering applicationengineering testing advanced engineering simulations new technologies in manufacturingadvances in material selection for specific applications and related technologies andtechnical training. Centre of Excellence is regularly supporting in tranferring andimplementation of upgraded technology for Process & Quality Improvement Qualitychecks and Energy Saving.
In-process controls on TRB Channel machines to arrest defect generation and qualityimprovement Development of online crack checking equipment for tapered rollers Developmentof online camera inspection M/c to arrest visual defects on rings Development of noise& vibration checking M/c for tapered roller bearing with laser vibrometer and BVR +software io Super precision pinion units with controlled torque for pinion applicationDevelopment of MDGBB & TRB with HN3 treatment Development of alternate design sealsSharing of technology for special processes such as Induction Hardening Hard Turning forRun-out Control Orbital Rolling for HBU 3 Channel
Manufacturing Development Centre (China) from SKF Group visited SKF DGBB PlantBengaluru to give Training in advance developments in Grinding (Hard Machining)
Technology Support for development of various equipment's from SKF (Styer) in vibrationchecking machine.
Ring wash chute to avoid ring flow issues with SMED concept for Ch1 & Ch4.
Haridwar Plant :
Continuous support from the Group for improving the factory OEE and reducing the lossesespecially in resetting. This has provided of the channels and support in being morecustomer centric.
Engineering design changes in the bearings testing and validation for 2 wheelerbusiness.
Steel validations and new supply chain for competitive sourcing
C. EXPENDITURE INCURRED ON RESEARCH AND DEVELOPMENT : Nil
D. NEW PRODUCT DEVELOPMENT
New Products developed during the year to meet the customer requirements are:
Cylindrical roller 10.2*9.5-Varoc
Bonfigl CRB BYAL-RC2-0441-
E. FOREIGN EXCHANGE EARNINGS AND OUTGO:
The Company continues to explore new product range to the overseas customers. The Focuswas mainly for export of DGBB in Asia new markets added were Vietnam Australia and USA.African market is being explored for future. Exports constituted 7.0 per cent of the totalsales and represented an increase of 14.0 per cent compared to the previous year.
The information on foreign exchange earnings and outgo is contained in the Notes toFinancial Statements.
| ||For and on behalf of the Board |
| ||SKF India Limited |
| ||Rakesh Makhija |
| ||Chairman |
|Mumbai || |
|May 26 2017 || |