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Schaeffler India Ltd.

BSE: 505790 Sector: Engineering
NSE: SCHAEFFLER ISIN Code: INE513A01022
BSE 00:00 | 12 Aug 2996.50 26.45
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NSE 00:00 | 12 Aug 2998.20 27.70
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OPEN 3018.95
PREVIOUS CLOSE 2970.05
VOLUME 13063
52-Week high 3088.80
52-Week low 1329.23
P/E 59.80
Mkt Cap.(Rs cr) 46,835
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 3018.95
CLOSE 2970.05
VOLUME 13063
52-Week high 3088.80
52-Week low 1329.23
P/E 59.80
Mkt Cap.(Rs cr) 46,835
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Schaeffler India Ltd. (SCHAEFFLER) - Director Report

Company director report

Dear Shareholders

Your Directors are pleased to present the 59th Annual Report of theCompany together with the audited financial statements of the Company for the year endedDecember 31 2021.

Financial Highlights

(Rs in million)

Particulars 2021 2020
Net revenue 55605 37619
EBITDA* 9950 5402
Less: Depreciation/Amortisation 1971 1940
Less: Finance cost 37 53
Add: Interest income 489 563
Profit before tax 8431 3972
Provision for tax 2140 1062
Profit after tax 6291 2910

* Earnings before Interest Tax Depreciation and Amortisation

Financial and Operational Performance

Performance of the Company and State of Company's Affairs

Your Company's Revenues was Rs 55605.1 million in year 2021 (Year2020: Rs 37618.4 million) which is higher by 47.8%.

Profit before tax was placed at Rs 8431.4 million (Year 2020: Rs3972.1 million) representing a growth of 112.3%. Your Company recorded profit after taxof Rs 6291.2 million (Year 2020: Rs 2909.7 million) which represent a growth of 116.2%.

Global Outlook

After a long period the global growth reached to an estimated 5.5percent in 2021 owing to the pent-up demand. The continued COVID-19 flare-ups diminishedfiscal support and lingering supply bottlenecks makes for a bleak outlook for 2022.Persistent labour market challenges frail supply-chain and inflation concerns werealready softening the growth outlook which further deepened with recent geopoliticalcrisis. Soaring energy and commodity prices are likely to derail the momentum and createdivergent growth trajectories for countries. This may lead to tightening of fiscal andmonetary policies which will further decelerate the growth momentum particularly inemerging and fragile markets.

India Outlook

India continues to remain among the fastest-growing economies in theworld. The pandemic caused disruptions in the economic and healthcare activities but wesee the economy recovering gradually. Growth is projected at 9.5% for FY 22 and at 8.5%for FY 23. The economic outlook remains clouded due to pandemic related uncertainties oninvestments human capital and other growth drivers.

This could have a medium-term impact on the growth rate. However theannouncement of the Union Budget highlights that rapid pace of vaccination and long-termbenefits of supply side reforms could aid growth. Major policy changes with a thrust onclean mobility green energy and investment offer long-term growth opportunities.Successful implementation of the announced wide-ranging structural reforms could increaseIndia's growth potential.

Share Capital Structure

There has been no increase / decrease in the Authorised Share Capitalof your Company during the year under review.

To encourage wider participation of investors and improve the liquidityof the Equity Shares in the stock market the Board of Directors at its meeting held onOctober 28 2021 had considered and recommended the Sub-division / Stock split of 1 (One)Equity Share of the Company of face value of Rs 10/- (Rupees Ten Only) each into 5 (Five)Equity Shares of the Company of face value of Rs 2/- (Rupees Two only) each fully paid upsubject to approval of the Members and other statutory and regulatory approvals asapplicable.

Subsequently the Shareholders of the Company approved the Sub-division/ Stock split of 1 (One) Equity Share of face value of Rs 10/- (Rupees Ten Only) each into 5 (Five) Equity Shares of face value of Rs 2/- (Rupees Two only) each on December 192021 through remote e-voting Postal Ballot process. Old ISIN of the Company has beendeactivated and in place new ISIN: INE513A01022 was activated by the depositories for theequity shares of the Company. Equity Shares have been successfully credited into therespective demat accounts of Shareholders holding shares as on record date (February 92022) and Shareholders holding shares in physical form were issued fresh sharecertificates with new distinctive numbers with their old share certificates dulycancelled.

Alteration of ‘Capital Clause' of Memorandum of Association

Pursuant to the Sub- division / Stock split of face value of equityshares of your Company as mentioned above the Capital Clause of the Memorandum ofAssociation of the Company was altered and substituted with a new Clause V to reflect thecorresponding changes in the Authorised Share Capital. Members of the Company had approvedsuch alteration in the Capital Clause of Memorandum of Association through remote e-votingPostal Ballot on December 19 2021.

Material Changes and Commitments and Change in Nature of Business

There have been no material changes and commitments affecting thefinancial position of your Company from the end of the Financial Year 2021 up to the dateof this report.

There has been no change in the nature of business of your Company.

Dividend and Transfer to Reserves

Your Company has a steady dividend payment history and considering thefinancial performance of the year 2021 your Directors recommend dividend for the yearended December 31 2021 at the rate of Rs 16/- per share of Rs 2/- (2020: Rs 38/- dividendper share of Rs 10/-) per equity share amounting to Rs 2500.8 million (2020: Rs 1187.9million). Considering sufficiency of balance your Directors do not propose to transferany amount to General Reserves for the year under review.

The details of the Dividend for the Financial Years 2021 and 2020 areas follows:

Dividend 2021 2020
Month and Year of Declaration April 2022 April 2021
Amount of Dividend Per Equity Share of Rs 2 each (in Rs)* 16 NA
Amount of Dividend Per Equity Share of Rs 10 each (in Rs)* NA 38
% of Dividend 800 380
Total Dividend (Amt. in ' million) 2500.8 1187.9

* Sub-division / Stock split of 1 (One) Equity Share of the Company offace value of Rs 10/- (Rupees Ten Only) each into 5 (Five) Equity Shares of the Company offace value of Rs 2/- (Rupees Two only) each.

Dividend Distribution Policy

Your Company has adopted the Dividend Distribution Policy to determinethe distribution of dividends in accordance with the provisions of applicable laws and hasbeen uploaded on the website at

https://www.schaeffler.co.in/remotemedien/media/shared_media_rwd/03_worldwide_1/websites_worldwide/india_3/_investor_relations/corporate_governance_1/codes_and_policies/Annexure_8b_Dividend_Distribution_Policy.pdf

The Dividend Distribution Policy also forms part of this Annual Report2021.

Dividend Payout Ratio

To meet Shareholders' expectations and as a good governance practicethe Board of Directors of your Company has approved the target dividend payout ratio of30% to 50% of the annual standalone profits after tax (PAT) as announced by the Companyfrom time to time subject to the applicable rules and regulations and amended theDividend Distribution Policy accordingly.

Your Company has adopted a progressive Dividend Policy intending tosustain or raise the dividend each year in conjunction with the financial performance andfree cash profit generation each year.

Corporate Governance

A separate section on Corporate Governance forms integral part of theAnnual Report and a compliance certificate from M/s. Samdani Kabra & AssociatesCompany Secretaries the Company's Secretarial Auditors confirming the compliance ofconditions of Corporate Governance is annexed thereto.

Management Discussion and Analysis

Pursuant to Regulation 34 read with Schedule V of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 (‘SEBI Listing Regulations') detailed review of operations performanceand future outlook of the Company is covered under Management Discussion & Analysissection of the Annual Report.

Business Responsibility Report

Pursuant to Regulation 34 read with Schedule V of the SEBI ListingRegulations detailed initiatives taken by the Management from an environmental socialand governance perspective is covered under Business Responsibility Report section of theAnnual Report.

Board of Directors

Board's Composition and Independence

Board Composition

Your Company's Board consists of leaders and visionaries whoprovide strategic direction and guidance to the Company. As on December 31 2021 theBoard comprised of 2 (Two) Executive Directors 5 (Five) Non-Executive IndependentDirectors and 3 (Three) Non-Executive Non-Independent Directors. At present your Companyhas 8 (Eight) Non-Executive Directors out of which 5 (Five) are Independent Directors.Pursuant to the provision of Regulation 17(1)(a) of the SEBI Listing Regulations theBoard of Directors of the top 1000 listed entities are required to have at least oneIndependent Woman Director. The Company has 3 (Three) Women Directors comprising of 2(Two) Independent Women Directors and 1 (One) Non-Executive Non-Independent WomanDirector. Further as per the Regulation 17(1)(b) of the SEBI Listing Regulations everylisted company is required to have at least one-third of its total strength of the Boardof Directors as Independent Directors where Chairman is a Non-Executive Director. YourCompany complies with these requirements.

Independent Directors' Declaration

Definition of ‘Independence' of Directors is derived fromRegulation 16 of the SEBI Listing Regulations and Section 149(6) of the Companies Act2013. The Company has received necessary declarations under Section 149(7) of theCompanies Act 2013 and Regulation 25(8) of the SEBI Listing Regulations from theIndependent Directors stating that they meet the prescribed criteria for independence.

All Independent Directors have affirmed compliance to the code ofconduct for Independent Directors as prescribed in Schedule IV to the Companies Act 2013.List of key skills expertise and core competencies of the Board forms part of this AnnualReport.

Based on the declarations received from the Independent Directors yourBoard of Directors confirm the independence integrity expertise and experience(including the proficiency) of the Independent Directors of the Company.

As per regulatory requirements all the Independent Directors haveregistered their names in the Independent Directors' Databank pursuant to provisionsof the Companies Act 2013 and rules made thereunder. Further they are exempted from therequirement of passing the online proficiency self assessment test.

Directors

In accordance with the provisions of Section 152 of the Companies Act2013 Mr. Satish Patel [DIN: 00690869] and Mr. Dharmesh Arora [DIN: 05350121] will retireby rotation at the ensuing Annual General Meeting (‘AGM') and being eligibleoffer themselves for reappointment. Mr. Patel and Mr. Arora have confirmed theireligibility and willingness to accept the office of the Director of your Company ifconfirmed by the Members at the ensuing AGM. In the opinion of your Directors Mr. Pateland Mr. Arora possess requisite qualifications and experience and therefore yourDirectors recommend that the proposed resolutions relating to the re-appointment of Mr.Patel and Mr. Arora be passed with the requisite majority.

During the year under report the Members of your Company in 58thAnnual General Meeting confirmed the appointment/ re-appointment as follows:

a. Confirmation of appointment of Ms. Eranti V. Sumithasri [DIN:07087197] as an Independent Director for a term of five consecutive years up to July 142025.

b. Reappointment of Mr. Satish Patel [DIN: 00690869] who was liable toretire by rotation and being eligible had offered himself for re-appointment.

c. Reappointment of Mr. Dharmesh Arora [DIN: 05350121] who was liableto retire by rotation and being eligible had offered himself for re-appointment.

Pursuant to Rule 8(5)(iii) of the Companies (Accounts) Rules 2014 thefollowing changes occurred in the Directors during the year ended December 31 2021 -

Mr. Jurgen Ziegler [DIN: 07092477] resigned from the Directorshipeffective July 22 2021 and Mr. Klaus Rosenfeld [DIN: 07087975 ] resigned from theDirectorship effective October 29 2021. Your Directors express their gratitude for thecontribution made by Mr. Ziegler and Mr. Rosenfeld during their tenure as Director.

During the year under report and till the date of this report theBoard has appointed Ms. Corinna Schittenhelm effective from September 12 2021 and Mr.Andreas Schick effective from October 28 2021 as Non-Executive Non-Independent Directorliable to retire by rotation.

A brief resume of the Directors seeking appointment or reappointment atthe ensuing Annual General Meeting nature of their expertise in specific functional areasand details regarding the companies in which they hold DirectorshipMembership/Chairmanship of Committees of the Board is annexed to the Notice convening 59thAnnual General Meeting of the Company.

There is no inter-se relationship between the Directors.

In terms of the SEBI Listing Regulations your Company conducts theFamiliarisation Program for Independent Directors about their roles rights andresponsibilities in your Company nature of the industry in which your Company operatesbusiness model of your Company etc. through various initiatives. The details of the samecan be found at

https://www.schaeffler.co.in/remotemedien/media/shared_media_rwd/03_worldwide1/websites_worldwide/india_3/_investor_relations/corporate_governance_1/Familiarisation_Programs-2021.pdf

Key Managerial Personnel (KMP)

Pursuant to provisions of Sections 2(51) and 203 of Companies Act 2013read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 following persons are acting as Key Managerial Personnel (KMP) of theCompany:

1. Managing Director & Chief Executive Officer:

Mr. Harsha Kadam

2. Director-Finance & Chief Financial Officer:

Mr. Satish Patel

3. Company Secretary: Mr. Ashish Tiwari

Pursuant to Rule 8(5)(iii) of the Companies (Accounts) Rules 2014 nochange occurred in KMP during the year ended December 31 2021.

Meetings of Board of Directors

During the year under review 4 (Four) meetings of the Board ofDirectors were held in compliance with the Companies Act 2013 and SEBI ListingRegulations on -

Sr. No. Quarter ended Date of Meeting
1. December 2020 February 16 2021
2. March 2021 April 26 2021
3. June 2021 July 21 2021
4. September 2021 October 28 2021

The details of attendance of each Director at these meetings areprovided in the Corporate Governance Report.

Policy on Nomination and Remuneration

The Company's Policy on Nomination and Remuneration is framed withthe objectives as under:

1. To formulate criteria and advise the Board in matters of determiningqualifications competencies positive attributes and independence of Directors andpolicies relating to their appointment and removal;

2. To review corporate goals and objectives to set norms ofperformance evaluation and to lay out remuneration principles for Directors KMP andSenior Management linked to their effort performance and contribution towards achievementof organisational goals;

3. To evaluate performance and give recommendations to the Board onremuneration payable to the Directors KMP and Senior Management; and

4. To review and recommend to the Board measures to retain and motivatetalent including KMP and Senior Management Personnel with a view to ensuring long-termsustainability and competitiveness of the organisation.

In addition to above the Nomination and Remuneration Committee (NRC)may take up any other matters related to talent management in general upon the advice ofthe Board.

Nomination and Appointment of Directors and Senior

Management

Criteria and Qualification

A person to be appointed as Director KMP or at Senior Management levelshould possess adequate relevant qualification expertise and experience for the positionthat he / she is being considered. The NRC evaluates whether qualification expertise andexperience possessed by a person is sufficient / satisfactory for the concerned positionand makes appropriate recommendations to the Board of Directors.

Policy on Remuneration

1. The remuneration (including revisions) of Directors is recommendedby NRC to the Board for its approval. The remuneration (including revisions) of theDirectors so recommended by NRC to the Board should be within the limits specified underthe Companies Act 2013 read with the Rules thereunder and as approved by the Shareholdersof the Company.

2. None of the Directors (including Independent Directors) shall beentitled to any stock option of the Company.

3. The remuneration to be paid to KMP and Senior Management isrecommended by NRC to the Board for its approval.

The Nomination and Remuneration Policy of the Company is disclosed onthe website at

https://www.schaeffler.co.in/remotemedien/media/shared_media_rwd/03_worldwide_1/websites_worldwide/india_3/_investor_relations/corporate_governance_1/codes_and_policies/nomination_and_remuneration_policy_schaeffler_india.pdf

Formal Annual Performance Evaluation

Your Company believes that systematic evaluation contributessignificantly to improved performance at 3 (Three) levels; Organisational Board andIndividual Board Member.

It encourages the leadership teamwork accountabilitydecision-making communication and efficiency of the Board. Evaluation also ensuresteamwork by creating better understanding of Board dynamics Board-management relationsand thinking as a group within the Board.

Methodology

The evaluation is done as per the process and criteria of annualperformance evaluation recommended by the NRC and approved by the Board of Directors.Separate evaluation questionnaire for each category of evaluation viz. the BoardCommittees of the Board and Directors (including Executive Directors Non-ExecutiveNon-Independent Directors and Non-Executive Independent Directors) have been prepared asper the process and criteria approved by the Board.

Process

Separate sets of questions (questionnaire) for each of the evaluationsi.e. for evaluation of (a) Board; (b) Each of the Committees of the Board; (c)Independent Director;

(d) Non-Independent Director and (e) Chairman of the Board are definedin the Policy for Annual Performance Evaluation.

The questionnaire for each category of evaluation is circulated to allthe Directors. Each question has four rating options i.e. 1 to 4. 1 denotes ‘NeedImprovement' 2: ‘Fair' 3: ‘Good' and 4: ‘Excellent'.

The ratings of every question are averaged (‘averagedratings') based on feedbacks received from each Director. Further average of all‘averaged ratings' are considered as the rating for a particular questionnaire.Based on the outcomes of questionnaire the NRC carries out evaluation of all theDirectors including Independent Directors and the Board carries out the evaluation of itsown performance each of the Committees and that of all Directors.

For the year 2021 the Board has carried out an annual performanceevaluation of its own and that of each of the Committees and all Directors including theChairman of the Company. The NRC has also carried out evaluation of all the Directorsincluding Independent Directors.

Qualitative comments received during the Board evaluation were asfollows:

• The Company is transparent follows good corporate governancepractices

• All significant issues are brought to the Board. Agenda andproceedings are well structured and focused

• The Board is balanced forward looking and heterogeneousdiverse views are expressed freely

• Each Board member brings a different skill set and competence tothe discussions

• Appreciation to the management team for their knowledgematurity diligence and sincerity

• Appreciation for the quality quantity and timeliness of theflow of information between the management and the Board. The management responds to allqueries and requests speedily

• Increased frequency of the RMC meetings helped to bring rightfulattention to the important topics of risk

• Appreciation for the working of CSR Audit and NRC Committees.Excellent job done by Company Secretary.

Conclusion

The evaluation for the year 2021 of Directors each of the Committeesand that of the Board have received ratings near excellent.

The Board has taken note of the feedback received from Directors tofurther improve the performance of the Directors the Board itself and Committees of theBoard.

Meeting of Independent Directors

As per provisions of Schedule IV to the Companies Act

2013 the Independent Directors are required to hold at least onemeeting in a financial year without the attendance of Non-independent Directors andmembers of management. During the financial year 2021 the Independent Directors have heldone separate meeting on October 29 2021.

Audit Committee

The Audit Committee consists of 7 (Seven) Directors including 5 (Five)Independent Directors. Mrs. Renu Challu is the Chairperson of the Committee. The othermembers of the Audit Committee are Mr. Avinash Gandhi Mr. Arvind Balaji

Mr. Amit Kalyani Ms. Eranti V. Sumithasri Mr. Andreas Schick and Mr.Satish Patel. The Committee met 4 (Four) times during the year. The terms of reference ofthe Audit Committee details of meetings held during the year and attendance of membersare disclosed in the Report on Corporate Governance.

There was no instance where the recommendation by the Committee was notaccepted by the Board.

Whistle-Blower Policy / Vigil Mechanism

Your Company has a well-defined ‘Whistle-Blower Policy' andestablished vigil mechanism to provide for adequate safeguard against victimisation ofDirectors and employees who use the mechanism. The mechanism also provides for directaccess to the Chairperson of Audit Committee in appropriate cases.

The Whistle-Blower/Vigil Mechanism Policy can be accessed on theCompany's Website at

https://www.schaeffler.co.in/remotemedien/media/_shared_media_rwd/03_worldwide_1/websites_worldwide/india_3/_investor_relations/corporate_governance_1/codes_and_policies/vigil_mechanism_or_whistle_blower_policy_schaeffler_india_2019.pdf

Risk Management

Your Company has established comprehensive Risk Management System toensure that risks to the Company's continued existence as a going concern and to itsdevelopment are identified and addressed on timely basis. Report on Risk Management formsan integral part of this Annual Report.

Constitution of Risk Management Committee

The Board of Directors of the Company has constituted the RiskManagement Committee which comprises of 5 (Five) Directors and 2 (Two) Senior Managementemployees of the Company. Mr. Dharmesh Arora is the Chairman of the Committee. The othermembers of the Committee are Ms. Eranti V. Sumithasri Mr. Andreas Schick Mr. HarshaKadam Mr. Satish Patel Mr. Sameer Mathur (Chief Operating Officer) and Mr. SantanuGhoshal (Head of Human Resources).

Auditors Statutory Auditors

The Statutory Auditors M/s. Walker Chandiok & Co LLP CharteredAccountants (Firm Registration Number: 001076N/ N500013) were appointed as StatutoryAuditors of the Company at the 58th Annual General Meeting (‘AGM') of theCompany held on April 27 2021 for a period of 5 (Five) consecutive years from theconclusion of the 58th AGM till the conclusion of the 63rd AGM of the Company.

There is no qualification reservation adverse remark or disclaimer bythe Statutory Auditors in their Report.

The observations made in the Auditor's Report read together withrelevant notes thereon are self-explanatory and hence do not call for any comments.

Reporting of Fraud

The Auditor of the Company have not reported any instances of fraudagainst the Company by its officers or employees as specified under Section 143(12) of theCompanies Act 2013.

Secretarial Auditors

M/s. Samdani Kabra & Associates a firm of Company Secretaries inPractice was appointed as ‘Secretarial Auditors' to carry out Secretarial Auditof the Company.

In terms of provisions of Section 204 of the Companies Act 2013 andin terms of regulation 24A of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 read with SEBI's circular CIR/CFD/CMD1/27/2019 dated February 82019 a Secretarial Audit Report has been annexed to this Report. (Annexure - A)

There is no qualification reservation adverse remark or disclaimer bythe Secretarial Auditors in their Secretarial Audit Report.

Cost Records and Cost Audit Maintenance of Cost Records

The Company is required to maintain cost records under Companies (CostRecords and Audit) Rules 2014. Accordingly cost records have been maintained by theCompany.

Cost Audit

M/s. Y. S. Thakar & Co. Cost Accountants as Cost Auditors wereappointed to conduct the audit of the cost records of the Company for the financial yearended December 31 2021. Based upon the declaration on their eligibility consent andterms of engagement your Directors have reappointed M/s. Y. S. Thakar & Co. CostAccountants to conduct Audit of Cost records for the financial year 2022.

As required under the provisions of the Companies Act 2013 theremuneration of Cost Auditors as approved by the Board of Directors is subject toratification by the Shareholders at the ensuing Annual General Meeting.

Corporate Social Responsibility (CSR)

Being a responsible Corporate Citizen your Company is committed infulfilling its social responsibilities. Guided by the prevailing regulatory requirementsthe Company has constituted a ‘Corporate Social Responsibility (CSR) Committee'and framed a Policy on CSR. The policy is available on the website of the Company at

https://www.schaeffler.co.in/remotemedien/media/_shared_media_rwd/03_worldwide_1/websites_worldwide/india_3/_investor_relations/corporate_governance_1/codes_and_policies/Annexure_14_-_CSR_Policv.pdf

Your Company was required to make CSR expenditure of Rs 107.1 millioni.e. 2% of the Average Net Profits of your Company made during 3 (Three) immediatelypreceding financial years. Your Company CSR expenditure was Rs 88.3 million and Rs 13.6million was transferred to Unspent CSR Bank Account on February 14 2022 for the ongoingCSR projects to be spent in the next 3 years and Rs 5.2 million is the unspent amount inrelation to other than ongoing CSR projects which will be transferred to PM CARES Fund byJune 30 2022. A summary of CSR Policy together with details of CSR activities undertakenby the Company during the year 2021 have been covered in the Annual Report on CSRactivities which is annexed to this Report. (Annexure - B)

Contracts and Arrangements with Related Parties

During the year all the transactions with the Related Parties havebeen carried out in normal course of business and based upon well set principles ofarm's length.

Prior omnibus approval of the Audit Committee is obtained for thetransactions which are of a foreseeable and repetitive nature. The details of alltransactions executed with Related Parties are placed before the Audit Committee on aquarterly basis for its review or ratification as the case may be and are also placedbefore the Board for its information.

The Related Party Transaction Policy of the Company is available on thewebsite of the Company at

https://www.schaeffler.co.in/remotemedien/media/_shared_media_rwd/03_worldwide_1/websites_worldwide/india_3/_investor_relations/corporate_governance_1/codes_and_policies/Amended_RPT_Policy_SIL_01-04-2022pdf.pdf

A separate Report containing details of Material Related PartyTransactions carried out during the year is annexed to this Report in prescribed formAOC-2. (Annexure - C)

Particulars of Employees and Related Disclosures

The disclosures pertaining to remuneration and other details ofemployees as required under Section 197(12) of the Companies Act 2013 read with Rule5(1) 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 have been annexed to this report. (Annexure - D)

Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo

The particulars as prescribed under Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 have been annexed tothis report. (Annexure - E)

Annual Return

As per provisions of Section 92(3) of the Companies Act 2013 a copyof draft Annual Return of the Company for the financial year 2021 in the prescribed formMGT-7 has been placed on the website of the Company athttps://www.schaeffler.co.in/remotemedien/media/shared_media_rwd/03_worldwide_1/websites_worldwide/india_3/_investor_relations/shareholders_information/annual_return/1.pdf

Particulars of Loans Investments Guarantees and Securities

The particulars of loans and investments have been disclosed in notesto the Financial Statements. The Company did not give any guarantee or provide anysecurity in connection with any loan and did not acquire any securities during thefinancial year.

Disclosure under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013

Your Company has in place a Policy against Sexual Harassment for Womenat workplace in line with the requirement of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. The Policy is available on the websiteof the Company at

https://www.schaeffler.co.in/remotemedien/media/shared_media_rwd/03_worldwide_1/websites_worldwide/india3/investorrelations/corporategovernance1/codes_and_policies/policy_against_sexual_harrasment.pdf

Internal Complaints Committee (ICC) has been constituted to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary and trainees) are covered under this policy.

Status of complaints during the year 2021

There were no complaints pending at the beginning of the year 2021 andthe Company received no complaint during the year 2021.

Directors' Responsibility Statement

Pursuant to the requirements under Section 134(3)(c) of the CompaniesAct 2013 your Directors hereby state that:

a) In preparation of the annual accounts the applicable IndianAccounting Standards (Ind AS) have been followed and there are no material departures fromthe same;

b) The accounting policies have been selected and these have beenapplied consistently and made judgements and estimates that are reasonable and prudent soas to give a true and fair view of the state of affairs of the Company as at December 312021 and of the profit of the Company for that period;

c) Proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

d) Annual accounts of the Company have been prepared on a ‘goingconcern' basis;

e) Internal financial controls have been laid down and being followedby the Company and that such internal financial controls are adequate and were operatingeffectively; and

f) Proper systems to ensure compliance with the provisions of allapplicable laws have been devised and that such systems are adequate and were operatingeffectively.

Adequacy of Internal Financial Controls

The Board of your Company has laid down internal financial controls tobe followed by the Company and that such internal financial controls are adequate andoperating effectively. Your Company has also implemented FACTS (Financial Accounting andControlling Tools) project for integrating accounting and controlling system. The RiskManagement framework recognises the Internal Financial Controls as an integral part of itsframework and has policies and procedures for addressing the financial reporting risks andensures orderly and efficient conduct of its business including adherence to theCompany's policies safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and timelypreparation of reliable financial disclosures.

Based on the framework of internal financial controls and compliancesystems established and maintained by the Company work performed by the internalstatutory and secretarial auditors and external consultants and the reviews performed bymanagement and the Audit Committee the Board is of the opinion that during the financialyear ended December 31 2021 had sound internal financial controls. These controls placedby the Company commensurate with the nature and size of the business operations and areadequate and operating effectively with no material weakness.

The key internal financial controls and compliance systems have beendocumented automated wherever possible and embedded in the respective business processes.

Compliance of Secretarial Standards

Your Company has complied with Secretarial Standards issued by theInstitute of Company Secretaries of India on Meetings of the Board of Directors (SS-1) andGeneral Meetings (SS-2).

Investor Education and Protection Fund (IEPF)

During the year the Company has not accepted any deposits under theCompanies Act 2013.

Pursuant to the applicable provisions of the Act read with the IEPFAuthority (Accounting Audit Transfer and Refund) Rules 2016 (‘the Rules') asamended all unpaid or unclaimed dividends which were required to be transferred by theCompany to the IEPF were transferred to IEPF Authority.

The Company has also transferred shares in respect of which dividendamount remained unpaid/unclaimed for a consecutive period of 7 (Seven) years or more toIEPF Authority within stipulated time.

The details of unpaid/unclaimed dividend and the shares transferred toIEPF Authority are available on the Company's website athttps://www.schaeffler.co.in/content.schaeffler.co.in/en/_investor-relations/shareholders-information/unclaimed-unpaid-dividend/index.jsp

Deposit

During the year the Company has not accepted any deposits under theCompanies Act 2013.

Subsidiaries Joint Ventures and Associates

The Company does not have any Subsidiary Company Joint Venture orAssociate Companies as defined in the Companies Act 2013.

Orders Passed by the Regulators or the Courts or the Tribunals

There are no significant and material orders passed by the Regulatorsor Courts or Tribunals impacting the going concern status of the Company and itsoperations.

Acknowledgements

Your Directors express their gratitude for the continued cooperationand support extended by Schaeffler Group all the Shareholders Customers SuppliersDistributors Bankers and all Stakeholders. Your Directors also place on record theirappreciation for the employees for their dedication hard work and efforts.

For and on behalf of the Board
Avinash Gandhi
Chairman
DIN: 00161107
New Delhi: February 16 2022

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