The Board of Directors of your Company are pleased to present the 60thAnnual Report with audited financial statements (standalone and consolidated) for thefinancial year ended on March 31 2021.
Financial Results (Standalone and Consolidated)
(INR in millions)
| ||Year Ended ||Year Ended |
|Particulars ||March 31 2021 ||March 31 2020 ||March 31 2021 |
| ||Standalone ||Standalone ||Consolidated |
|Revenue from Operations ||26707.3 ||28415.8 ||26707.3 |
|Other Income ||362.3 ||1039.2 ||362.3 |
|Total Income ||27069.6 ||29455.0 ||27069.6 |
|Operating Expenditure ||22527.2 ||25016.1 ||22527.2 |
|Depreciation ||579.5 ||571.2 ||579.5 |
|Profit before tax ||3962.9 ||3867.7 ||3962.9 |
|Share of Net Profit/(loss) of Associate ||- ||- ||(0.4) |
|Provision for Taxation ||985.6 ||977.9 ||985.6 |
|Profit after Tax ||2977.3 ||2889.9 ||2976.9 |
|Other Comprehensive Income ||35.2 ||(91.6) ||35.2 |
|Total Comprehensive Income for the Period ||3012.5 ||2798.3 ||3012.1 |
The Standalone Revenue from operations of the Company for year endedMarch 31 2021 stood at INR 26707.3 million compared to INR 28415.8 million in theprevious year. The Company's Standalone Profit before tax for the year under reviewwas INR 3962.9 million compared to INR 3867.7 million in the previous year.
The Standalone Profit After Tax for this period was INR 2977.3million compared to INR 2889.9 million during the previous year.
The Company incurred a capital expenditure of INR 753.4 million duringthe year.
The Company has contributed INR 2.7 million towards COVID-19 pandemicrelated relief activities.
Standalone and Consolidated Financial Statements
The standalone and consolidated financial statements of the Company forthe Financial Year 2020-21 are prepared in compliance with the applicable provisions ofthe Companies Act 2013 ("the Act") including Indian Accounting Standardsspecified under Section 133 of the Act. The audited standalone and consolidated FinancialStatements together with the Auditors' Report thereon form parts of the Annual Reportof the Financial Year 2020-21.
Pursuant to Section 129(3) of the Act a statement containing thesalient features of the Financial Statements of the associate company in the prescribedForm AOC-1 forms a part of the Annual Report.
The Financial Statements of the associate company shall be madeavailable to Members on request through email and are also available on the website of theCompany which can be accessed at www.skfindia.com under the Investors' section.
Material Changes and commitments if any affecting financial positionof the Company
There have been no material changes and commitments affecting thefinancial position of the Company which occurred between the end of the financial year ofthe Company to which the financial statements relate and up to the date of this report.There was no change in nature of the business of the Company.
Impact of COVID-19
The 54-day lockdown implemented due to the pandemic during the yearunder review saw a considerable impact on the business operations of the Company. Themanufacturing facilities and the distribution centers started operating after taking allthe necessary Government permissions where ever needed.
The Company took several measures to ensure the well-being of itsemployees and continues to do so. Some of the key actions that were taken are forming atask force to monitor the situation and take appropriate actions daily monitoring ofemployees' health setting up of COVID-19 Care Centers tie-up with hospitals labsand health agencies to provide various medical facilities to employees across locationsconducting antigen tests and vaccination drives arranging financial assistance to thefamily members of employee passing away due to COVID-19 arranging for oxygen cylindersand concentrators among others.
The Company also drove community support initiatives such as providingPPE kits to frontline workers conducting vehicle disinfection camps for essential servicepersonnel providing ration and hygiene kits to labourers and arranging one-timefinancial assistance to its contract workforce among others.
State of Company's Affairs
The Company's core businesses include manufacturing of bearingsand its components in India. SKF India Limited is an affiliate of the Sweden based SKFGroup which was founded in 1907. SKF's mission is to be the undisputed leader in thebearings business by offering solutions that reduce friction and CO2 emissions whilst atthe same time increasing machine uptime and performance. Our products and services aroundthe rotating shaft include bearings seals lubrication management artificialintelligence and wireless condition monitoring. SKF is represented in more than 130countries and has around 17000 distributor locations worldwide.
The dividend recommended is in accordance with the DividendDistribution Policy of the Company. For the Financial year 2020-21 the Company hasdeclared dividend as final dividend of INR 14.50 per equity shares of INR 10/- each to itsshareholders.
The Board of Directors at their meeting held on 14th May2021 has recommended the payment of INR 14.50 per equity share of the face value of INR10/- each as final dividend for the financial year ended 31st March 2021compared to INR 130/- per equity shares for the preceding financial year ended 31stMarch 2020. The pay-out is expected to be INR 716.9 million (Rupees seven hundred sixteenmillion nine hundred thousand only). The payment of final dividend is subject to theapproval of the shareholders of the Company at the ensuing 60th Annual GeneralMeeting (AGM) of the Company to be held on 23rd July 2021.
The record date is Wednesday July 7 2021 for the purpose ofdetermining eligibility of the shareholders for payment of the dividend for the financialyear ended 31st March 2021.
In view of the changes made under the Income-tax Act 1961 by theFinance Act 2020 dividends paid or distributed by the Company shall be taxable in thehands of the shareholders. The Company shall accordingly make the payment of the finaldividend after deduction of tax at source.
Pursuant to Regulation 43A of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations") the DividendDistribution Policy approved by the Board is as set out in this Annual Report and is alsouploaded on the Company's website: https://www.skf.com/binaries/pub12/Images/0901d196809a6abb-Dividend-Distribution-Policy-SKF-India-Feb-2017_tcm_12-526433.pdf
During this financial year the unclaimed dividend amount pertaining tothe dividend for the financial year 2012-13 was transferred to the Investor Education andProtection Fund (IEPF).
Share Capital Structure and Listing of Shares
The paid-up share capital of the Company as on 31st March2021 is INR 494.38 million - divided into 49437963 equity shares of INR 10/- each. TheCompany's equity shares are listed on the BSE Limited (BSE) and the National StockExchange of India Limited (NSE).
During the year under review there was no change in the share capitalof the Company from the last financial year.
The shares are actively traded on the BSE and the NSE and have not beensuspended from trading.
The Company has not issued shares with differential voting rights orsweat equity shares during the financial year 2020-21. As on 31st March 2021none of the Directors of the Company hold any instruments convertible into equity sharesof the Company.
Transfer to Reserves
The Board of Directors decided to retain the entire amount of profitfor the financial year 2020-21 in the profit and loss account. No amount was transferredto the General Reserves of the Company.
Awards and Accolades
Your Directors are pleased to share that during the year under reviewyour Company received numerous awards and felicitations from distinguished bodies forachievements in different fields that re-emphasizes SKF's strong position in theIndian Manufacturing Industry. Some of the achievements are:
Company of the Year: (Bearings) was awarded to SKF India Limited atthe India Wind Energy Forum 2020 Awards. SKF won the award amongst several entries fromall over the industry who competed for this coveted award.
Companies with Great Managers was awarded to SKF India Limited atthe 5th Edition of the 'Great Managers Awards' 2020. The Great ManagersAwards is a People Business initiative partnered by Economic Times and ET NOW. Twoof its employees also won awards in the individual competition segment.
The Machinist Super Shopfloor award by Ace Micromatic - SKF'sPune factory maintenance team was declared the winner by Ace Micromatic for the bestmaintenance practices adopted at its Pune factory. SKF's Green Manufacturing teamalso won the runner-up award for showcasing best practices under green manufacturing.
Quality Month Celebration by QCFI: At a national level competitionorganised by Quality Circle Forum of India. SKF's Pune factory team won the GoldAward for one of its case study presentations. The study was about improving the innerring groove honing quality.
3M (Muda Mura Muri) Kaizen Competition by CII: SKF's Punefactory also received two silver category awards in 3M kaizen competition organised byCII. The award was for the case studies it had presented on the subjects of eliminatingMuda of scrap and setting up a changeover. It is for the first time that SKF has receivedtwo awards at any CII event. A total of 70 different organisations participated in thiscompetition.
Poka-yoke Judoka competition by QCFI: The SKF Pune factoryreceived the Gold award in the JIDOKA competition organised by QCFI. SKF's qualityefforts are recognised at the external competition level.
Safety Kaizen Awards organised by QCFI: - SKF Pune factory won twogold awards for its case study presentations on the subject of Elimination of unsafecondition on two grinding machines' at the Quality Circle Forum of India'sSafety Month celebration event.
Management's Discussion and Analysis and Outlook
The Management's Discussion & Analysis (MDA) Report giving thedetails on review of operations performance opportunities and outlook of the Company asrequired under Corporate Governance guidelines has also been incorporated as a separatesection forming a part of the Annual Report as 1
The Corporate Governance Report highlighting the endeavours of theCompany in ensuring transparency integrity and accountability in its functioning has beenincorporated as a separate section forming a part of the Annual Report.
The Board of Directors reaffirm their continued commitment to goodcorporate governance practices. During the year under review the Company complied withthe provisions relating to corporate governance as provided under the Listing Regulations.The corporate governance report together with a certificate from the Company'sstatutory auditors confirming the compliance is provided in the Report on CorporateGovernance which forms a part of the Annual Report as Annexure II. At SKF Indiagood governance practices form a part of their business strategy which includes interalia focusing on long-term value creation and protecting stakeholders' interests byapplying proper care skill and diligence to business decisions. Pay-offs from stronggovernance practices have been in the sphere of valuations stakeholders' confidencemarket capitalisation and recognition from different stakeholders.
Directors and Key Managerial Personnel
During FY 2020-21 based on recommendation of the Nomination andRemuneration Committee (NRC') of the Company the Board of Directors hasappointed Ms. Ingrid Viktoria Van Camp (DIN: 08945782) as an Additional Director (in thecapacity of Non-Executive Non-Independent Director) of the Company with effect from 16thNovember 2020.
As per the provisions of Section 161 of the Act and Articles ofAssociation of the Company Ms. Ingrid Viktoria Van Camp shall hold office as anAdditional Director up to the date of the forthcoming 60th AGM and is eligiblefor appointment as Director. The draft resolutions for aforesaid appointment along withthe brief profile of Ms.Ingrid Viktoria Van Camp forms a part of the Notice of the 60thAGM.
Therefore appointment of Ms. Ingrid Viktoria Van Camp as a Director ofthe Company is recommended by the Board to the shareholders at 60th AnnualGeneral Meeting of the Company. Ms. Ingrid Viktoria Van Camp is not debarred ordisqualified from holding the office of Director by virtue of any SEBI Order or any otherstatutory authority as required under the Circular dated 20th June 2018issued by BSE Limited and the National Stock Exchange of India Limited.
Mr. Bernd Stephan Non-Executive Non-Independent Director of theCompany has resigned as Director of the Company with effect from 16thNovember 2020 due to his personal reasons. The Board placed on record the appreciationfor the valuable services support and guidance extended by Mr. Bernd Stephan during histenure as Director of the Company.
At the forthcoming 60th AGM Mr. Werner Hoffmann (DIN:07685942) retires by rotation at the ensuing AGM and being eligible offers himself forre-appointment.
During the year under review apart from the above stated facts therewas no change in the composition of Board of Directors and Key Managerial Personnel of thecompany.
Pursuant to the provisions of Section 149 of the Act the IndependentDirectors of the Company Mr. Gopal Subramanyam (DIN: 06684319) and Ms. Anu Wakhlu (DIN:00122052) have submitted declarations that each of them meet the criteria of independenceas provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation16(1)(b) and 25(8) of the Listing Regulations. They are also in compliance with Rule 6 (1)& (2) of the Companies (Appointment & Qualifications of Directors) Rules 2014.There has been no change in the circumstances affecting their status as IndependentDirectors of the Company.
All other Directors of the Company have also provided declarations onthe fact that they are not debarred from holding the office of Director by virtue of anySEBI order or any other statutory authority as required under the Circular dated 20thJune 2018 issued by BSE Limited and the National Stock Exchange of India Limited.
The Board of Directors of the Company is of the opinion that theIndependent Directors possess a high level of integrity expertise and experience whichare beneficial to the Company and its stakeholders.
Key Managerial Personnel
In terms of Section 203 of the Act the following are the KeyManagerial Personnel (KMPs) of the Company:
Mr. Manish Bhatnagar Managing Director
Mr. Anurag Bhagania Chief Financial Officer.
Mr. Ranjan Kumar Company Secretary.
Board and its Committees Meetings
Regular meetings of the Board and its Committees are held to discussand decide on various business policies strategies financial matters and otherbusinesses. The schedule of the Board/Committee Meetings to be held in the forthcomingFinancial Year (2021-22) is circulated to the Directors in advance to enable them to plantheir schedule for effective participation in the meetings. Due to business exigenciesthe Board has also been approving several proposals by circulation from time to time.
During FY 2020-21 four meetings of the Board of Directors were held.The details of the attendance of Directors at the Board Meetings and Committees Meetingssuch as Audit Committee Nomination and Remuneration Committee Stakeholder RelationshipCommittee Risk Management Committee and Corporate Social Responsibility Committee arementioned in the report on Corporate Governance annexed hereto.
The Board carries out annual performance evaluation of its ownperformance the Directors individually as well as the evaluation of the working of itsvarious committees as mandated under the Act and the Listing Regulations as amended fromtime to time.
The process followed for Board evaluation includes:
i) Feedback is sought from each Director about their views on theperformance of the Board (as a whole) / Committees / Independent Directors / Chairman /self-assessments covering various relevant criteria such as degree of fulfilment of keyresponsibilities effectiveness of Board processes participation levels culture andresponsibilities to various Committees etc.
ii) The Nomination and Remuneration Committee ("NRC") thendiscusses the above feedback received from various Directors including assessment ofindividual directors by the Chairman.
iii) The Independent Directors (post their meeting) share theircollective feedback on the performance of the Board with the Board Members.
iv) Significant highlights learning and action points arising out ofthe evaluation are presented to the Board and action plans are drawn up wherever required.
The Directors express their satisfaction with the entire evaluationprocess.
Over the years the Company has developed a robust familiarisationprocess for the Independent Directors with respect to their roles and responsibilitiesway ahead of the prescription of the regulatory provisions. The process has been alignedwith the requirements under the Act and other related regulations. This process inter aliaincludes providing an overview of the industry the Company's business model therisks and opportunities the new products innovations sustainability measuresdigitisation measures etc.
Details of the Familiarisation Programme for Independent Directors areexplained in the Corporate Governance Report and is also available on the Company'swebsite at https://www.skf.com/binaries/pub12/Images/0901d196809a6abc-Familiarisation-Programme-for-IDs_tcm_12-526435.pdf
Appointment of Directors and Remuneration Policy
The Company has in place a policy for the remuneration of DirectorsKey Managerial Personnel and Senior Management Team as well as a well-defined criterionfor the selection of candidates for appointment to the said positions. The Policy broadlylays down the guiding principles philosophy and the basis for payment of remuneration tothe Executive and Non-Executive Directors Key Managerial Personnel and Senior ManagementTeam.
The Appointment of Directors and Remuneration Policy is available ofthe Company's website at https://www.skf.com/in
The criteria for the selection of candidates for the above positionscover various factors and attributes which are considered by the N&RC and the Boardof Directors while selecting candidates.
The Audit Committee constituted in terms of the requirements of theCompanies Act 2013 and Listing Regulations comprises of three (3) members. The Committeeis chaired by Ms. Anu Wakhlu (Independent Director). The other Members of the
Committee are Mr. Gopal Subramanyam (Independent Director) and Mr.Werner Hoffman (Non-Independent Director). The Committee comprises mostly of IndependentDirectors.
Details of the role and responsibilities of the Audit Committee theparticulars of meetings held and attendance of the Members at such Meetings are given inthe Report on Corporate Governance which forms a part of the Annual Report.
During the year under review the recommendations made by the AuditCommittee were accepted by the Board.
Corporate Social Responsibility
We aim to build more capable inclusive and resilient communitiesthrough a shared approach that takes into cognizance the specific needs of each community.Our social strategy aligns with our core business strategy to empower communities andprovide opportunities for us to create common value across our footprint.
The Company has been actively engaged in various CSR activities overthe years which cover the entire gamut of social welfare / upliftment activities acrossthe nation. The thrust areas under CSR inter-alia included education employment enhancingvocational skills empowerment of women socially / economically backward groups supportduring COVID-19 pandamic etc. which have always been built on the Company's valuesof SKF Care' built on four pillars of Business care Employee careEnvironment care and Community care'.
The Corporate Social Responsibility ("CSR") Committee reviewsand monitors the CSR projects and expenditure undertaken by the Company. The brief outlineof the CSR Policy of the Company and the initiatives undertaken by the Company under theCSR policy during the year under review are set out in the Annual Report on CSR activities- annexed as Annexure III of this Report.
The Company's governance structure has well defined roles andresponsibilities which enable and empower the Management to identify assess and leveragebusiness opportunities and manage risks effectively. There is also a comprehensiveframework for strategic planning implementation and performance monitoring of thebusiness plan which inter alia includes a well-structured Enterprise Risk Management(ERM) process.
The risks that fall under the purview of high likelihood and highimpact are identified as key risks. This structured process of identifying risks supportsthe Senior Management Team in strategic decision-making and in the development of detailedmitigation plans. The identified risks are then integrated into the Company'splanning cycle which is a rolling process to inter alia periodically review the movementof the risks and the effectiveness of the mitigation plan. Your Company has constituted aRisk Management Committee which oversees risk management activities. The Company'srisk management initiatives are periodically updated to the Audit Committee and Board ofthe Company. The Company's assets continue to be adequately insured against the riskof fire riot earthquake terrorism and the risk of loss of profits also stands insuredamongst other things. In addition adequate coverage has been taken to cover productliability public liability and Director's and officer liability. Also all theemployees are covered against the risk of loss of life hospitalisation and personalaccident.
The detailed section on business risks and opportunities forms part ofManagement Discussion and Analysis Report which forms a part of the Annual Report.
A section on Risk management practices of the Company forms a part ofthe chapter on Management Discussion and Analysis' in this Annual Report.
Safety / Sustainability
Your company extends high focus on people care safe workplace goodhealth and well-being of its employees. Through its Employee Care Program SKF iscommitted to provide a healthy and safe work environment free from accident injuries andoccupational health hazards. One of the major initiatives taken by your Company in thisyear is the introduction of a structured programme of Safety Behaviour for the linemanager and blue-collar employee with the objective of encouraging a sustained cultureupliftment in your factories.
Safety is one of the core values of the Company. Your Company hasadopted a structured approach towards implementation of Safety Policies and Programme tointegrate safety with business processes with an objective of continuously improvingsafety performance. The Company treats any accident or fatality on any of its premises andof any of its employee contractor/associates' employee or any third party with highgravitas. It is committed to take the entire working environments and behaviour to thehighest safety standards. Your Company always takes the Safety First' approachwhile taking any business decision.
SKF India continues to work on safety and sustainability aspects ofbusiness. We continue to drive our unique energy conservation initiatives and constantlystrive to provide product services and solution which are environmentally friendly andsocially viable.
SKF Beyond Zero' is our strategy for actively reducing theenvironmental impact of our manufacturing operations product and supplier action. OurEHS Policy outlines necessary guidance for conservation and safeguard of energy wateruse of paper and natural resources for the entire supply chain and also promotes greenprocurements.
The Company has launched several projects under the green manufacturinginitiatives and worked upon reducing the impact of the environment. Various project onsaving of trees (reduction of paper usage) energy reduction water reduction and oilconsumption reduction were worked upon. The brief of various projects are as follows:
Identification and repair of different points of losses/leakages including suitable tap replacements (sprinkler tap)
Improving utilisation of treated water for gardening and othersuitable purpose.
Waste walk to identify hidden potentials of water saving throughwaste reduction activities.
Explore storage and use of rain water from roof.
Creates awareness amongst employees for water conservation
Saving of Trees (Reduction in paper usage)
Packaging modification for few customers to reduce the use ofcorrugated boxes thus reducing the paper consumption
Implementation of reusable/returnable bins for seven customersinstead of corrugated boxes
Conversion of returnable bins for rings and components reducinguse of corrugated boxes at suppliers end
Reduction of Oil Consumption
Regular oil health monitoring to reduce early replacement
Conduct oil leakage audits through waste walks and implementsactions to reduce wastage
System established to collect and reuse the oil throughfiltration system
Improved awareness and people engagements towards oilconsumption reduction initiatives
Internal Controls with Respect to Financial Statements
The scope and authority of the internal audit function is defined inthe Internal Audit Charter. To maintain independence and objectivity in its functions theinternal audit function reports directly to the Audit Committee of the Board.
At the beginning of each financial year a risk-based annual audit planis rolled out after it is approved by the Audit Committee of the Board. The annual auditplan aims to evaluate the efficacy and adequacy of the internal control system(s) andcompliance(s) thereof robustness of internal processes policies and accountingprocedures compliance with laws and regulations.
Based on the reports of internal audit function process ownersundertake corrective action in their respective areas. Significant audit observations andcorrective actions thereon are presented to the Audit Committee of the Board.
The Company's internal financial controls are commensurate withthe scale and complexity of its operations. The controls were tested during the year andno reportable material weaknesses either in their design or operations were observed.
The Company has put in place robust policies and procedures whichinter alia ensure integrity in conducting its business safeguarding of its assetstimely preparation of reliable financial information accuracy and completeness inmaintaining accounting records and prevention & detection of frauds and errors.
Based on the framework of Compliance and Internal Financial Controls(IFC) established and maintained by the Company the work performed by Internal AuditorsStatutory Auditors Cost Auditors and Secretarial Auditors including audit of IFC forfinancial reporting and the reviews performed by the Management and Committees of theBoard the Board is of the opinion that the Company's internal financial controlswere adequate and effective during the financial year ended March 31 2021.
Directors' Responsibility Statement
To the best of their knowledge and belief and according to theinformation and explanations obtained by them your Directors make the following statementin terms of Section 134(5) of the Act:
a. in the preparation of Annual Accounts for the year ended on 31stMarch 2021 the applicable accounting standards have been followed and there are nomaterial departures;
b. appropriate accounting policies have been selected and appliedconsistently. Judgments and estimates made are reasonable and prudent so as to give a trueand fair view of the state of affairs of the Company as on March 31 2021 and of theprofit of the Company for the period ended 31st March 2021;
c. proper and sufficient care has been taken for maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe 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 concernbasis;
e. internal financial controls have been laid down and are beingfollowed by the Company and that such internal financial controls are adequate and areoperating effectively and f. proper system to ensure compliance with the provisions ofall applicable laws are in place and are adequate and operating effectively.
Related Party Transactions
All transactions with related parties are placed before the AuditCommittee as well as the Board for review and approval. Prior omnibus approval of theAudit Committee and the Board is obtained for the RPTs on an annual basis for thetransactions which are foreseeable and repetitive in nature. The RPTs are entered withprior approvals of the Audit Committee and the same are subject to audit. A statementgiving details of all RPTs is placed before the Audit Committee and the Board of Directorson a quarterly basis. The Audit Committee satisfies itself on the need of omnibus approvaland that such approval is in the interests of the Company and ensures compliance with therequirements of Listing Regulations and the Companies Act 2013.
The Company has formulated a Policy on Related Party Transactions inaccordance with relevant provisions of Companies Act 2013 and SEBI guidelines which canbe accessed on the Company's website at the web-link:https://www.skf.com/binaries/pub12/Images/0901d19680cb2a54-Policy-on-Related-Party-Transactions-2021_tcm_12-583317.pdf
All transactions with related parties during the year were onarm's length basis and were in the ordinary course of business. The Company has/hasnot 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 auditedfinancial statements. The particulars of contracts or arrangements entered into by theCompany 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 standardsare also provided in the Financial Statements.
None of the Directors and the Key Managerial Personnel have anypecuniary relationships or transactions vis--vis the Company.
A confirmation as to compliance of Related Party Transactions as perListing Regulations is also sent to the Stock Exchanges along with the quarterlycompliance report on Corporate Governance.
Subsidiaries Joint Venture and Associates Companies
Pursuant to Section 186(5) of the Companies Act 2013 read with theCompanies (Meeting of the Board and its Powers) Rules 2014 made thereunder and subject toRegulation 30 read with Schedule III Part A (A)(1) of the Listing Regulations Articlesof Association of the Company the Board of Directors at its meeting held on 6thFebruary 2020 approved the investments of fully paid-up equity shares representing 26%(Twenty Six Percent) of the share capital of the special purpose vehicle company (M/sSunstrength Renewables Private Limited) for the execution of captive solar power projectfor Pune plant of the Company. As per the local Electricity laws of Maharashtra SKF Indiamandatorily needs to invest in at least 26% equity shares of the power producer companyunder the captive solar farm model. The first trench of investment was done in December2020 and second tranche of investment was done in March 2021 by SKF India.
Thus as on 31st March 2021 the Company has one AssociateCompany i.e. Sunstrength Renewables Private Limited. Further there are no subsidiaries orjoint venture companies.
Pursuant to the provisions of Section 129(3) of the Act a statementcontaining the salient features of financial statements of the Company's AssociateCompany in Form No. AOC-1 is attached to the financial statements of the Company.
Further pursuant to the provisions of Section 136 of the Act theconsolidated financial statements along with relevant documents are available on thewebsite of the Company https://www.skf.com/in
Vigil Mechanism / Whistle-Blower Policy
Over the years SKF India has established a reputation for doingbusiness with integrity and display zero tolerance for any form of unethical behaviour.Your Company has in place a system through which Directors Employees and businessassociates may report unethical behaviour malpractices wrongful conduct fraudviolation of Company's code of conduct without fear of reprisal. Your Company hasframed a Vigil Mechanism Policy in confirmation with Section 177(9) of the Act andRegulation 22 of Listing Regulations wherein the employees are free to report any improperactivity resulting in violation of laws rules regulations or code of conduct by any ofthe employees directly to the Chairperson of the Audit Committee beside others. TheBoard's Audit Committee oversees the functioning of this policy. The Audit Committeeperiodically reviews the existence and functioning of the mechanism. It reviews the statusof complaints received under this policy on a quarterly basis.
During the year under review the Company reached out to employeesthrough e-learning modules for creating greater awareness with respect to its FairCompetition Directive and Anti-Bribery and Corruption Directive. This has helped inachieving a high level of engagement and compliance among the employees. The VigilMechanism Policy aims to:
Allow and encourage stakeholders to bring to the Managementnotice concerns about unethical behaviour malpractice wrongful conduct actual orsuspected fraud or violation of policies and leak or suspected leak of any UnpublishedPrice Sensitive Information.
Ensure timely and consistent organizational response.
Build and strengthen a culture of transparency and trust.
Provide protection against victimisation.
The above mechanism has been appropriately communicated within theCompany across all levels and the details of the policy has been disclosed on theCompany'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
Business Responsibility Report
The fulfilment of environmental social and governance responsibilityis an integral part of the way your Company conducts its business. The BusinessResponsibility Report covering the above initiatives has been prepared in accordance withthe directives of SEBI and forms a part of the Annual Report.
The Company has not accepted or renewed any deposits falling under theambit of Chapter V of the Companies Act 2013 and Rules framed thereunder. No amount onaccount of principal or interest on deposits from public was outstanding as on March 312021.
Pursuant to the provisions of Sections 139 141 142 and otherapplicable provisions if any of the Companies Act 2013 read with the Companies (Auditand Auditors) Rules 2014 M/s Price Waterhouse & Co Bangalore LLP CharteredAccountants (Firm Registration No. 007567S/S-200012) were re-appointed as StatutoryAuditors of the Company for a term of four consecutive years to hold office from theconclusion of 58th Annual General Meeting till the conclusion of the 62ndAnnual General Meeting of the Company to be held in the year 2023 on such remuneration asmay be decided by the Audit Committee/Board of Directors of the Company from time to time.
The Statutory Auditors have already submitted their consent to act asthe Statutory Auditors of the Company and their eligibility letter confirming that theirappointment meets the requirement of Section 141 of the Companies Act 2013. Therequirement of annual ratification for appointment of Statutory Auditor has been omittedvide Companies (Amendment) Act 2017. Therefore the Statutory Auditors are no morerequired to be ratified at every Annual General Meeting of the Company.
M/s Price Waterhouse & Co Bangalore LLP Chartered Accountants(Firm Registration No. 007567S/S-200012) have submitted their Report on the FinancialStatements of the Company for the FY 2020-21 which forms a part of the Annual Report2020-21. There are no observations qualification reservation adverse remark ordisclaimer of the Auditors in their Audit Reports that may call for any explanation fromthe Board of Directors.
In terms of the provisions of Section 204 of the Act read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the AuditCommittee has recommended and the Board has appointed M/s Parikh & Associates CompanySecretaries as the Secretarial Auditor for conducting Secretarial Audit of the Companyfor the Financial Year 2020-21.
The report of the Secretarial Auditor for the financial year ended on31st March 2021 is attached as Annexure V of this Report. TheSecretarial Audit Report is self-explanatory and do not call for any further comments. TheSecretarial Audit Report does not contain any qualification reservation or adverseremark. During the year under review the Company is in compliance with the applicableSecretarial Standards specified by the Institute of Company Secretaries of India(ICSI').
Cost Records and Cost Auditor
Maintenance 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 costrecords have been maintained by the Company.
In terms of Section 148 of the Act read with Companies (Cost Recordsand Audits) Rules 2014 M/s. RA & Co. (Firm Registration No. 000242) CostAccountants were appointed as Cost Auditors of the Company for the financial year 2020-21by the Board of Directors on the recommendation of the Audit Committee. The Cost Auditorshave confirmed by giving their written consent that their appointment meets therequirement of Section 141 of the Companies Act 2013. The Cost Audit for the financialyear ended 31st March 2021 is under process and the Company will submit theCost Auditors' report to the Central Government within the prescribed time. The CostAudit Report of the Company for the financial year ended 31st March 2020 wasfiled within the prescribed time limit.
As per the provisions of the Companies Act 2013 the remunerationpayable to the Cost Auditor as approved by the Board of Directors on the recommendationof Audit Committee is required to be placed before the Members in a general meeting forits ratification. Accordingly a Resolution for seeking Members' ratification for theremuneration payable to M/s RA & Co Cost Auditor is included in the Notice conveningthe 60th Annual General Meeting.
Reporting of Fraud by Auditors
During the year under review neither the Statutory Auditors nor theSecretarial Auditor nor the Cost Auditor have reported to the Audit Committee of theBoard under Section 143(12) of the Act any instances of fraud committed against theCompany by its officers or employees the details of which would need to be mentioned inthis Report.
Significant and material orders passed by the Regulators or Courts orTribunals
As on the date of this report the Company has not received anysignificant or material orders passed by any Regulatory Authority Court or Tribunal whichshall impact the going concern status and Company's operations in future.
Particulars of Employees
The information required under Section 197(12) of the Act read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is attached as Annexure VI to this Report.
The statement containing names of top ten employees in terms ofremuneration drawn and the particulars of employees as required under Section 197(12) ofthe Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is provided in a separate annexure forming part of thisreport. Further the report and the accounts are being sent to the Members excluding theaforesaid annexure. In terms of Section 136 of the Act the said is open for inspectionand any member interested in obtaining a copy of the same may write to the CompanySecretary at firstname.lastname@example.org.
None of the employees listed under the said rules are related to anyDirector of the Company.
The Company enjoys harmonious and healthy industrial relations due toits vibrant work culture and believes in a collaborative approach at work. This mutualtrust and caring spirit helps in maintaining a harmonious environment across all businessunits. The enthusiasm and unstinting efforts of employees have enabled the Company toremain at the leadership position in the industry.
Transfer of Equity Shares / Unpaid and Unclaimed Amounts to IEPF
Pursuant to the provisions of Section 124 of the Companies Act 2013read with Investor Education and Protection Fund Authority (Accounting Audit Transferand Refund) Rules 2016 ("IEPF Rules") and subsequent amendment thereof theamount of dividends which remained unpaid or unclaimed for a period of seven years fromthe due date is required to be transferred by the Company to the Investor Education andProtection Fund (IEPF) established by the Central Government.
The Company has accordingly transferred INR 2269297.50 being theunpaid and unclaimed dividend amount pertaining to year 2012-13 to the IEPF.
As per the IEPF Rules all shares in respect of which dividend has notbeen paid or claimed for seven consecutive years shall be transferred by the Company tothe designated Demat
Account of the IEPF Authority within a period of thirty days of suchshares becoming due to be transferred to the IEPF. Accordingly the Company hastransferred all the shares pertaining to year 2012-2013 to IEPF Authority in respect ofwhich dividend has not been paid or claimed by shareholders for seven consecutive years ormore after following the prescribed procedure.
Further amount due in respect of financial year 2013-14 and shareswhere dividend had remained unpaid for last consecutive seven years will be transferred tothe IEPF within the stipulated time period.
The Company has sent individual notices to the concerned shareholderswhose shares and dividend are liable to be transferred to IEPF Authority to their latestavailable addresses.
The Company has displayed full details of such shareholders dividendand shares on its website at www.skf.com/in. Shareholders are requested to verify thedetails of the shares liable to be transferred as aforesaid.
Particulars of Loans Guarantees or Investments
The particulars of loans given investment made or guarantee/ securityprovided are disclosed in the financial statements. No fresh loan was given during theyear. The Company did not give any guarantee or provide any security in connection withany loan and did not acquire any securities during the financial year. The Company hasinvested in the special purpose vehicle company for purchase of electricity generatedfrom captive solar power project for Pune Plant of the Company. As per local Electricitylaws of Maharashtra SKF India mandatorily needs to invest in at least 26% equity sharesof the power producer company under the captive solar farm model. Accordingly the firsttranche of investment was done in December 2020 and the second tranche of investment wasdone in March 2021 as reported in the Financial Statements by SKF India in SunstrengthRenewables Private Limited to comply with the Captive requirements.
Web link of Annual Return
Pursuant to the provisions of Section 92(3) of the Act a copy of theannual return of the Company for the Financial Year ended March 31 2021 has been placedon the website of the company. Same can be accessed by any person through below givenweb-link : https://www.skf.com/binaries/pub12/Images/0901d19680cb452b-Annual-Return-31-March-2021-websiteA_tcm_12-583319.pdf
Policy on Prevention of Sexual Harassment at Workplace
SKF is committed to create a healthy work environment that enablesemployees to work without fear or prejudice and gender bias and is an equal employmentopportunity Company. As an organisation the Company is committed to ensure that everyemployee is treated with dignity and respect and works in a healthy work environmentwhich promotes their professional growth and encourages equal opportunities. The Companyhas zero tolerance towards any act on the part of any executive which may fall under theambit of sexual harassment' at workplace and is fully committed to uphold andmaintain the dignity of every executive working in the Company.
SKF India has continuously endeavoured to build a work culture whichpromotes the respect and dignity of all women employees across the organisation to providean empowering and enabling atmosphere to women employees. This is enshrined in values andin the Code of Ethics & Conduct of the Company. Your Company also has in placethe Prevention of Sexual Harassment at Workplace Policy'. This Anti-SexualHarassment policy of the Company is in line with the requirements of The Sexual Harassmentof Women at the Workplace (Prevention Prohibition & Redressal) Act 2013. Allemployees (permanent contractual temporary and trainees) are covered under this Policywhich has been widely communicated internally and is uploaded on the Company'sintranet portal.
An Internal Complaint Committee including an external member has beenduly constituted by your Company in compliance with the Sexual Harassment of Women at theWorkplace (Prevention Prohibition and Redressal) Act 2013.
The employees are sensitised from time to time in respect of mattersconnected with prevention of sexual harassment. Awareness programmes are conducted at unitlevels to sensitise the employees to uphold the dignity of their colleagues at workplace.The Company also conducted an E-learning programme for employees to cover various aspectsof the subject matter. Number of cases filed and their disposal under Section 22 of thePOSH is as follows:
|Particulars ||Numbers |
|Number of complaints pending as on the beginning of the financial year 2020-21 ||0 |
|Number of complaints filed during the financial year 2020-21 ||1 |
|Number of Complaints disposed off during the year ||0 |
|Number of complaints pending as on the end of the financial year 2020-21 ||1 |
The Company has complied with provisions relating to the constitutionof Internal Complaints Committee (ICC) under The Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 to redress complaints received regardingsexual harassments.
Conservation of Energy Technology Absorption Foreign ExchangeEarnings and Outgo
Pursuant to the provisions of Section 134 of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 the details of Conservation ofEnergy Technology Absorption Foreign Exchange Earnings and Outgo are attached as VII'to this Report
Proceeding under Insolvency and Bankruptcy Code 2016
No application or any proceeding has been filed against the Companyunder the Insolvency and Bankruptcy Code 2016 (31 of 2016) ("IBC Code") duringthe financial year 2020-21.
The details of the difference between the amount of the valuation doneat the time of the one-time settlement and the valuation done while taking loan from thebanks or financial institutions along with the reasons thereof
During the year under review the Company has not made any suchsettlement therefore the same is not applicable.
Compliance with Secretarial Standards
The Board of Directors affirms that the Company has complied with theapplicable Secretarial Standards (SS) issued by the ICSI (SS1 and SS2) respectivelyrelating to Meetings of the Board and its Committees which have mandatory applicationduring the year under review.
Statements in this Director's Report' &Management Discussion and Analysis Report' describing the Company'sobjectives projections estimates expectations or predictions may be forward lookingstatements within the meaning of applicable security laws and regulations. Actual resultscould differ materially from those expressed or implied. Important factors that could makea difference to the Company's operations include - raw material/ fuel availability& its prices cyclical demand and pricing in the Company's principle marketschanges in the Government regulations tax regimes economic developments unforeseensituations like pandemic within the Country in which your Company conducts business andother ancillary factors.
The Directors express their deep sense of gratitude to the PrincipalsAktiebolaget SKF customers members suppliers employees bankers business partners /associates and all other stakeholders for their exemplary and valued contribution and lookforward to their continued assistance in future.
| ||For and on behalf of the Board |
| ||SKF India Limited |
| ||Gopal Subramanyam |
|Bengaluru ||Chairman |
|May 14 2021 ||DIN: 06684319 |