Corporate Governance Report
Philosophy On Code Of Corporate Governance
SKF believes that corporate governance is an ethically driven business process which provides values aimed at enhancing the organization's brand and reputation. SKF applies the principles of sound corporate governance as an instrument for increased competitiveness and to promote confidence among all stakeholders. Accordingly, your Company maintains an efficient organizational structure with clear areas of responsibility and clear rules for delegation. The Company has laid down well-developed systems and processes for internal controls across all operations, and adequate, timely and accurate disclosure of all material, operational and financial information to the stakeholders. The financial, environmental and social reporting is done transparently reflecting the Company's strong commitment to good corporate governance.
SKF Care - has been one of the strategic drivers which stems from the belief that the Company is responsible, not only for the economic results of its activities, but also for wider social and environmental impacts. The SKF Care framework helps to enact this driver by clearly defining what sustainability means : Business Care, Environmental Care, Employee Care and Community Care.
All internal policies are documented in line with the compliance requirements of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Regulations).
1. Group Structure
SKF India Limited is an affiliate of the Sweden based SKF Group, which was founded in 1907. The SKF Group is the leading global supplier of bearings, seals, mechatronics, lubrication systems, and services which include technical support, maintenance and reliability services, engineering consultancy and training. SKF serves presently in nearly all industries, including automotive, aerospace, railway, renewable energy, medical food & beverage etc. SKF Group has around 165 manufacturing sites in 29 countries and presence in over 130 countries. The SKF Group has its technologies on five platforms: Bearings and Units, Seals, Mechatronics, Services and Lubrication Systems. By utilizing capabilities from all or some of these platforms, SKF develops tailor-made offers for each industry, helping customers improve performance, reduce energy usage and lower total costs. SKF works with its customers at every stage in their asset life cycle, providing solutions from design right through to maintenance and back to design upgrades.
2. Governance Structure
The Company follows three tiers of Governance structure wherein strategic supervision is carried out by the Board of Directors. Strategic management is done by the Country Management Team and Operational Management is done by the respective business / business support units.
The three tier governance structure, besides ensuring greater management accountability and credibility, facilitates increased autonomy to the businesses, performance discipline and development of business leaders. The core roles low from this structure and the responsible team is empowered with requisite powers to discharge such responsibilities.
3. Board Of Directors
The Board of Directors has a responsibility for the company's organization and for the oversight of the management of the company's affairs. In terms of the Corporate Governance all statutory and other significant and material information including the information required under Companies Act, 2013 / SEBI Regulations are placed before the Board to enable it to discharge its responsibility of strategic supervision of the Company.
As on 31st March 2016, the Board of SKF India had six
Directors, comprising (i) two non-executive Directors including the Chairman, (ii) Managing Director and (ii) three Independent Directors, including a woman Director, as defined under the Companies Act, 2013 and the SEBI's Regulations, 2015. The Directors have expertise in the fields of strategy, management, finance, operations and entrepreneurship. The Board provides leadership, strategic guidance, objective and an independent view to the Company's management while discharging its fiduciary responsibilities, thereby ensuring that the management adheres to high standards of ethics, transparency and disclosure.
The Directors are briefed periodically to get familiar with the Company functions at the operational levels. The Board of Directors is periodically updated on the business model, key aspects of the company performance and changing business environment in which the company operates, and the risk profile of the business of the Company. Periodic updates and programs for Board members are also conducted on relevant statutory changes and laws.
Each Director informs the Company on an annual basis about the Board and Board Committee positions he/ she occupies in other companies including Chairmanships and notifies any changes during the term of their directorship in the Company. In addition, the Independent Directors provide a confirmation to the effect that they meet the criteria of independence as deined under the Companies Act, 2013.
During the year, Mr. K. C. Mehra on attaining the age of superannuation and Mr. Henrik Lange, Mr. V. Vartanian & Mr. David Bishop (Alternate to Mr. V. Vartanian), resigned from the Board of the Company. Mr. Stephane Le Mounier representing the SKF Group was appointed as an Additional Director with effect from 25th June, 2015.
None of the Directors on the Company's Board is a Member of more than ten Committees and Chairman of more than five Committees (Committees being Audit Committee and Stakeholders Relationship Committee). All the Directors have made necessary disclosures regarding Committee positions held by them in other companies and do not hold the office of Director in more than twenty companies, including ten public companies. There is no relationship between the Directors inter-se.
3.2 Disclosure regarding appointment / re-appointment of Directors
The Independent Directors on the Board of the Company, upon appointment, are given a formal appointment letter inter alia containing the terms of appointment, roles, function, duties & responsibilities, code of conduct, disclosures, confidentiality, etc. The terms and conditions of the appointment of Independent Directors are available on the Company's website "<http://www.skf.com/binary/83-166888/Letter-of->Appointment-of-IDs-website.pdf"
Brief profiles of the persons sought to be appointed/ re-appointed as Directors at the ensuing Annual General Meeting of the Company are given below:
Mr. Stephane Le Mounier
Mr. Stephane Le Mounier, aged 51 years, has a Degree in Mechanical Engineering, Remiremont Technical College, France, Masters degree in International Sales and Marketing, ESV, University of Haute Alsace, France and Post-Graduate diploma in Finance and Controlling, ESSEC, Paris, France.
Mr. Stephane Le Mounier is presently President, Automotive & Aero space in the SKF Group and is placed in Gothenborg. Mr. Stephane has rich experience of over 26 years in the industry and has held various positions within the SKF Group in Sales, Marketing, Industrial division, Strategic Industries and Automotive business unit.
Mr. Stephane Le Mounier has delivered strong financial performance in each of the business units he had managed and displayed an ability to create and deliver a vision, a strategy with focus on quality and continuous learning and development. Mr. Stephane is on the Board of SKF France S.A., P.T. SKF Indonesia, AEC Japan Co Limited, RIV-SKF Officine di Villar Perosa S.p.A, SKF de Mexico S.A. de C.V.
Mr. Rakesh Makhija
Mr. Rakesh Makhija, aged 65 years, is a chemical engineer from the Indian Institute of Technology, New Delhi. During his career spanning over four decades, he has been an active participant and contributor to the industrial and technology sectors, both internationally and in India.
Mr. Makhija has held a number of top management positions within the SKF Group. He was the President for the Industrial Market (Strategic Industries) and a member of the Group Executive Committee, a position that he held till December 2014 in Sweden. Prior to this, he was President of SKF Asia, based in Shanghai, with overall responsibility for China and India. He started in this position in 2010 when he also became a member of SKF Group Management. He joined the Board of SKF India Limited on 25th April, 2002 and was appointed as the Managing Director of your Company till 2009. Under his leadership, SKF India more than tripled its sales and was recognized through numerous industry awards for market leadership, amongst them the prestigious 'CNBC Business Leader Award for Talent Management' in 2007.
Prior to joining SKF, Mr. Makhija held a number of senior management positions within Tata Honeywell and Honeywell International, the global Industrial and Aerospace company. He was appointed as the Chief Executive Officer and Managing Director of Tata Honeywell in June 1997. In April 2000, he was appointed Country Manager and Managing Director of Honeywell International, with responsibilities for driving the company's growth in South Asia.
Prior to Honeywell, Mr. Makhija worked with Kinetics Technology International BV (now Technip), a process engineering and contracting company in the Netherlands for over eight years.
Mr. Makhija is also on the Board of Axis Bank, Tata Technologies Ltd and TML Drivelines Ltd.
3.3 Conduct of Board proceedings
The Company plans and prepares the schedule of the Board and Board Committee meetings in advance to assist the Directors in scheduling their program. The schedule of meetings and their agenda are finalized in consultation with the Managing Director. The meetings of the Board are generally held in locations where the Company operates. The agenda of the Board and Committee meetings are pre-circulated with appropriate presentations, detailed notes, supporting documents and executive summaries. Further the Company has adopted and adhered to the Secretarial Standards prescribed by The Institute of Company Secretaries of India (ICSI).
In the beginning of the year a residential Board Meeting is held in which the Managing Director, Business units heads and other Functional heads present to the Board members an annual Strategic & Operating Plans for their review, inputs and suggestions. A detailed presentation on the financial results at the time of approval of each quarterly result is presented to the Board by the Finance Director. Senior Management personnel are invited to provide additional inputs for the items being discussed by the Board as and when necessary. The draft minutes of the meetings of the Board are circulated amongst the Members of the board for their perusal. Comments, if any, received from the Directors are also incorporated in the Minutes, in consultation with the Chairman.
During the year under review, an annual Strategic Meet was organised, wherein the Board conducted a strategy review of the Company's business areas, and also discussed various governance related matters.
The Company provides the following information inter alia to the Board and Board Committees, which are given either as part of the agenda or by way of presentations and discussion material during the meetings:
• Annual operating plans and budgets and any updates
• Capital budgets and any updates.
• Contracts, if any, in which Director(s) are interested
• Quarterly results
• Minutes of meetings of committees of the Board of Directors
• The information on recruitment and remuneration of senior officers just below the level of Board of Directors, including appointment or removal of Chief Financial Officer and the Company Secretary
• Show cause, demand, prosecution notices and penalty notices, which are materially important.
• Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems.
• Any material default in financial obligations to and by the listed entity, or substantial non-payment for goods sold by the listed entity.
• Any issue, which involves possible public or product liability claims of substantial nature, including any judgement or order which, may have passed strictures on the conduct of the listed entity or taken an adverse view regarding another enterprise that may have negative implications on the listed entity.
• Details of any joint venture or collaboration agreement.
• Transactions that involve substantial payment towards goodwill, brand equity or intellectual property.
• Significant labour problems and their proposed solutions. Any significant development in Human Resources / Industrial Relations front like signing of wage agreement, implementation of Voluntary Retirement Scheme, etc.
• Sale of investments, subsidiaries, assets which are material in nature and not in the normal course of business.
• Quarterly details of foreign exchange exposures and the steps taken by management to limit the risk of adverse exchange rate movement, if material.
• Non-compliance of any regulatory, statutory or listing requirements and shareholders service such as nonpayment of dividend, delay in share transfer.
The important decisions taken at the Board meetings are communicated to the concerned departments/ functions. An action taken report on the decisions of the previous meeting is placed at the next meeting of the Board for information and further recommended action(s) if any.
3.4 Board Meetings
The Board met five times during the year - 18th February, 2015, 23rd April, 2015, 21st July 2015, 29th October, 2015 and 12th February, 2016. The gap between two meetings did not exceed 120 days. Further, the Independent Directors also met without the presence of Executive Directors and other members of management during the year. This meeting reviews the performance of senior management, Independent and non-Independent Directors, including the Chairman and the Board as a whole. The Independent Director also assess the quality and adequacy of the information between the Company's management and the Board. The Independent Director(s) provided structured feedback to the Board about the key elements that emerged out of this meeting.
3.6. Familiarization Programmes to Independent Directors
• The newly appointed Director is provided with a copy of all the applicable codes and policies formulated and adopted by the Company. A detailed appointment letter incorporating the role, duties, responsibilities & obligations, remuneration and insurance coverage is issued for the acceptance of the Independent Directors. Immediately after appointment, Independent Directors are encouraged to attend briefing from management including site visits.
• The Company believes that the Board must be continuously empowered with the knowledge of the latest developments in the Company's businesses, and the external environment affecting the Company and the industry as a whole. Apart from the periodic presentations on Company's business, performance updates and business strategy, presentations are also made on topics covering the bearing industry and peer study. Updates on relevant statutory changes around important relevant laws are also generally presented / circulated to the Directors. Wherever possible, Directors are encouraged to attend training courses by professional bodies to ensure that the Directors are refreshed and equipped to perform their role to the highest possible standard.
• The details of such familiarization programmes have been disclosed on the website of the Company "<http://www.skf>. com/in/investors/shareholder-information/index.html"
3.7. Country Management Team (CMT):
The Country Management Team consists of senior management members from the business and corporate functions. The CMT meets as and when required but generally at least once in a month to develop and implement policies, procedures and practices that attempt to translate the Company's core purpose and mission into reality. The background notes for the meetings are circulated in advance to facilitate decision-making. Some of the key issues considered during the year under review were: a) Company's long term strategy, growth initiatives and priorities; b) Overall Company performance, including those of various business units; c) Decision on major corporate policies; d) Discussion and sign-off on annual plans, budgets, investments and other major initiatives; and e) Discussion on business alliances, proposals and organizational design.
4. Board Committees
The Board Committees focus on specific areas and make informed decisions within the authority delegated by the Board. Each Committee is guided by its Charter / Terms of Reference, which deines its composition, scope and powers. The Committees also make specific recommendations to the Board on various matters whenever required. All observations, recommendations and decisions of the Committees are placed before the Board for information or for approval. The Committees operate as empowered agents of the Board as per their Charter / Terms of Reference. In case of urgency, the decisions are also taken by circular resolution which is noted at the next meeting. The minutes of the meetings of all Committees of the Board are placed before the Board for discussion / noting. The Board currently has 4 committees: a) Audit Committee,
b) Nomination and Remuneration Committee, c) Corporate Social Responsibility Committee and d) Stakeholders Relationship Committee. The role and composition of these Committees, including the number of meetings held during the financial year and the related attendance are provided below.
Audit Committee (AC)
The management of the Company is responsible for the Company's internal controls and the financial reporting process while the statutory auditors are responsible for performing independent audits of the Company's financial statements in accordance with generally accepted auditing practices and for issuing reports based on such audits. The Board of Directors has entrusted the Audit Committee (AC) with the responsibility to supervise these processes and thus ensure accurate and timely disclosures that maintain the transparency, integrity and quality of financial control and reporting.
The AC comprises of all three non- executive directors, among whom two are independent directors. The Chairman of the Committee is an independent director and all members are financially literate and have accounting or related financial management expertise. The AC was reconstituted during the year after resignation of Mr. H. Lange as a member of the Board and Mr. K. C. Mehra, Chairman, who retired from the Board of the Company on attaining the age of superannuation. The AC presently comprises of three Directors, Mr. P. R. Menon as Chairman, Mr. P. M. Telang and Mr. R. Makhija. The Managing Director, the Finance Director, the Statutory auditor and the internal auditor are permanent invitees to the meetings of the Audit Committee. The Company Secretary is the Secretary of the Committee. The Cost Auditor and Secretarial Auditor are invited to meetings whenever matters relating to cost/ secretarial audit have to be considered. The Committee is empowered to seek any information it requires from any employee or to obtain legal or other independent professional advice when considered necessary. The previous AGM of the Company was held on 23rd April, 2015 and was attended by the Chairman of the Audit Committee.
The Company has an internal audit team consisting of Cost Accountants. Apart from this, the Company's systems of internal controls covering financial, operational compliance and IT applications etc are reviewed by external experts and firm of Chartered Accountants from time to time. Presentations are made to the Audit Committee on the findings of such reviews.
Audit Committee meetings are generally preceded by pre-Audit Committee meeting with the Chairman of the Audit Committee wherein the CFO, the internal audit team and Company Secretary participate. These meets discuss major audit related matters and identify items that need further face-to-face discussion at the Audit Committee meetings. The internal and statutory auditors of the Company discuss their audit findings and submit their views directly to the AC.
4.1 a Scope of Audit Committee
The Audit Committee of the Company is constituted in line with the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 177 of the Companies Act, 2013. The terms of reference of the Audit Committee are broadly as under:
1. Oversight of the company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;
2. Recommend to the Board, the remuneration and terms of appointment of the auditors of the company;
3. Review and monitor the auditor's independence and performance, and effectiveness of the audit process;
4. Review with the management the quarterly / annual financial statement before submission to the Board for approval with particular reference to:
a. Matters required to be included in the Director's Responsibility Statement to be included in the Board's Report in terms of clause (c) of sub-section 3 of section 134 of the Companies Act, 2013;
b. Changes, if any, in accounting policies and practices and reasons for the same;
c. Major accounting entries involving estimates based on the exercise of judgment by management;
d. Significant adjustments made in the financial statements arising out of audit findings;
e. Compliance with listing and other legal requirements relating to financial statements;
5. Review, with the management, the performance of statutory and internal auditors, and adequacy of the internal control systems;
6. Review the adequacy of the internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure and frequency of internal audit;
7. To review the functioning of the whistle blower mechanism;
8. The scrutiny of inter-corporate loans and the investment policy of the Company;
9. Approval of transactions of the company with related parties;
10. To approve the valuation of undertakings or assets of the Company, wherever necessary;
11. To evaluate internal financial controls and risk management
12. Review the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board;
13. Approval of appointment of the CFO;
14. To mandatorily review the following information:
a. Management discussion and analysis of financial conditions and results of operations;
b. Statement of significant related party transactions (as defined by the Audit Committee), submitted by management;
c. Management letters / letters of internal control weaknesses issued by the statutory auditors;
d. Internal audit reports relating to internal control weaknesses.
4.1b Meetings and attendance
During the year five Audit Committee Meetings were held on 18th February, 2015, 22nd April, 2015, 21st July, 2015, 29th October, 2015 and 12th February, 2016
4.2. Nomination and Remuneration Committee (NRC)
The Nomination and Remuneration Committee entirely comprises of Independent Directors and is in line with provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 178 of the Companies Act, 2013. Commission payable to non-executive directors is approved by the Board as per the mandate given by the shareholders in the General Meeting.
Terms of Reference of the Nomination and Remuneration Committee are broadly as under:
1. To recommend appointment of a director and to formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a remuneration policy for Directors, Key Managerial Personnel (KMP) and other employees.
2. To devise a policy on Board diversity.
3. To review goals and objectives relevant to the compensation of the Managing Director, evaluating MD's performance in the light of those goals and objectives, determine and approve the CEO compensation level based on this evaluation.
4. To formulate criteria for the evaluation of Board / Committee / Individual member and support the Board in evaluation of the performance of the Board
The head of Human Resources (HR) makes periodic presentations to the Committee on the organization structure, talent management, leadership, performance appraisals, increments, performance bonus recommendations and other HR matters. The Chairman Managing Director and CFO participate as invitees and the Company Secretary acts as the Secretary of the Committee. The below table gives the composition and attendance record of the Nomination and Remuneration Committee:
During the year, NRC was reconstituted; Ms H. A. Hattangady was inducted as a member in place of Mr. R. Makhija. Mr. K. C. Mehra in lieu of retirement from the board cease to exist as a member of NRC with effect from 22nd July, 2015. The NRC met four times on 18th February, 2015, 22nd April, 2015, 28th August, 2015 and 14th March, 2016 during the year under review.
4.2a Remuneration policy
The Company has a policy relating to the remuneration of Directors, Key Managerial Personnel (KMPs), Senior Management Personnel (SMPs) and other employees. The policy lays down remuneration principles and parameters to ensure that remuneration practices are competitive and reasonable, in line with corporate and individual performance. The remuneration for the Executive Directors is recommended by the Nomination and Remuneration Committee to the Board for consideration. All Directors other than Executive Director or employed with the SKF Group are entitled to receive sitting fees and reimbursement of any expenses incurred for attending the Meetings of the Board and its Committees, as well as commission based on the net profits of the Company within the limits approved by the shareholders.
As per the policy framed, the person to be appointed as a director / senior management personnel should possess adequate and relevant qualification, positive attributes, expertise and experience for the position which is being considered for. The assessment and appointment of such person is based on a combination of criterion that includes ethics, personal and professional stature, domain expertise and specific qualification required for the position.
All persons appointed as Directors on the Board of Directors of the Company shall ensure compliance with all the policies and regulations adopted by the Company, in particular the Code of Conduct for Directors and Senior Management Personnel, the Code of Conduct for Prevention of Insider Trading, Whistle Blower Policy or any other policy as may be framed from time to time. The potential Board member is also assessed on the basis of independence criteria defined in Section 149(6) of the Companies Act, 2013 as well as duties to be performed under section 166 of the Companies Act, 2013.
1. Remuneration to Executive Directors shall involves a balance between ixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals.
2. An Independent Director may be paid remuneration by way of sitting fee for attending meetings of the Board of Directors or any Committee of the Board of Directors as may be decided by the Board.
The Directors shall be entitled for reimbursement of any expenses incurred in connection with participation at the meetings of the Board of Directors or any Committee thereof.
3. An Independent Director shall not be eligible for any Stock option Scheme of the Company if any such scheme exists.
4. The maximum remuneration payable to any one Managing Director or whole-time Director or maximum overall
remuneration payable to all Directors including Managing Director and Executive Directors will be within overall limits as defined in the Companies Act, 2013.
5. The remuneration payable to the Non-executive Directors shall not exceed 1% of the Net Profits of the Company.
The compensation and remuneration for the Senior Management including KMP shall be as per the contract entered into by them with the Company and shall be decided according to the policies laid down by the Human Resources Department (HRD).
While laying down the policies for remuneration, the HRD shall take into account the relevant skill sets and experience of the individual as well as the market conditions.
The remuneration paid to the Senior Management including Key Managerial Personnel shall be placed before the NRC. The premium paid by the Company for the Directors and Officers Liability Insurance Policy taken by the Company on behalf of its Directors, Chief Financial Officer or Company Secretary for indemnifying them against any liability in respect of any negligence, default, misfeasance, breach of duty or breach of trust shall not be treated as a part of the remuneration.
During the year, the Committee met twice on 20th July, 2015 and 14th March, 2016.
The broad terms of reference of the CSR Committee are as follows:
1. Formulate and recommend to the Board, a CSR Policy
2. Recommend the amount of expenditure to be incurred on the activities referred to above.
3. Monitor the CSR Policy of the Company from time to time.
4.4. Stakeholders' Relationship Committee
The Company has a shareholders' / investors grievance committee of Directors to look into the redressal of complaints of investors such as transfer of shares, non-receipt of dividend / notices / annual reports etc. The nomenclature of the said committee was changed to Stakeholders' Relationship Committee (SRC) in light of the provisions of the Companies Act, 2013. The broad terms of reference of this Committee include the following:
• Review of investor complaints;
• Review of queries received from investors;
• Review of work done by the share transfer agent;
• Review of corporate actions related to shareholder issues, if any.
Each month a report is obtained from Registrar and Share Transfer Agent on correspondence/communication received from the shareholders. The Company follows the practice of inquiring from BSE/NSE regarding any pending shareholders' grievances.
The composition of the Stakeholders Relationship Committee is as under:
The Company holds Committee meetings on a periodical basis, as may be required to approve the transfers/transmissions/ issue of duplicate share. The SRC was reconstituted during the year with Mr. P. R. Menon as a Chairman of the SRC Committee in place of Mr. K. C. Mehra, Chairman, who retired from the Board of the Company on attaining the age of superannuation. During the year under review four meetings were held on the following dates:
16th March, 2015, 13th July, 2015, 20th October, 2015 and 24th December, 2015.
The Company has appointed TSR Darashaw Limited to act as Registrar and Share Transfer Agents of the Company. To expedite the process of physical transfer of shares, the Board has delegated the authority to the Registrar & Share Transfer Agent for physical transfer of shares. The physical transfers of shares approved are ratified at the subsequent Stakeholders Relationship Committee meeting.
The Company Secretary officiates as the Secretary of the Committee and is also designated as Compliance Officer in terms of the listing agreement read with SEBI Regulations
Other queries in above mainly relating to, beneficiary details for securities held in electronic form, signature case, incomplete / incorrect details , mailing of certificates and split / consolidation / renewal queries etc.
1346 correspondences were received by the Company out of which 1338 correspondence were replied to the satisfaction of shareholders during the year under review. 8 Outstanding correspondences as on 31st March, 2016 have been attended by 7th April, 2016 respectively.
The Committee expresses satisfaction with the Company's performance in dealing with the shareholders' grievances and its share transfer system
5.1 Related Party Transactions
The Company has adequate procedures for the purpose of identiication and monitoring of related party transactions. All transactions entered into with related parties during the financial year were in the ordinary course of business except in case of leasing of property within the limits of the Act and on arm's length basis. There were no transactions with related parties during the inancial year which were in conflict with the interest of the Company. All related party transactions are periodically placed before the Audit Committee and the Board for review and approval, as appropriate. The disclosure in respect of related party transactions is given in the schedule of the notes to the accounts. The Company does not have any subsidiary company. The Company has formulated a policy on materiality of related party transactions and dealing with related party transactions and it is available on the Company's website "<http://www.skf>. com/binary/83-166889/Policy-on-Related-Party-Transactions-modifed-highlighed-Sept-2014.pdf".
5.2 Risk Management
The Board of the Company has formulated 'Risk Policy' to monitor the risk management plan of the company. The AC / Board are authorized to review the risk management plan and its effectiveness. The AC has additional oversight in the area of financial risks and controls. The risks identified by the business and functions are systematically addressed through mitigating actions on a continuing basis.
The progress on key risks is discussed at the Company's management level. Thereafter, the same is presented to the Board. The SKF Internal Control Standard (SICS) defines each process and control fifth clear responsibility and authority. These standards provide a reasonable minimum assurance that internal controls are in place. All high and medium risk controls defined in SICS are tested periodically. The Company has during the year implemented an online system for overseeing compliance activities in order to monitor and review compliances with regards to all laws applicable to the Company.
5.3 Accounting Treatment
The Company has complied with all applicable Accounting Standards in preparation of its financial statements.
5.4 The Senior management of the Company m annual disclosures relating to all material, financial and commercial transactions where they have personal if any, that may have a potential conflict with the interest of the Company at large. During the previous year, no such transactions have been entered into where senior management of the Company had personal interest.
The Company has complied with the requirements of Stock Exchanges, Securities and Exchange Board of India and other statutory authorities on matters relating to capital markets during the last three years and consequently no penalties or strictures have been imposed on the Company by these authorities.
5.6 Prevention of Insider Trading:
The Company has framed its Insider Trading Regulations wherein rules for the preservation of price sensitive information, pre-clearance of trade, monitoring and implementation of the code of conduct are framed. This code is applicable to all Directors and such employees of the Company who are expected to have access to unpublished price sensitive information relating to the Company. The policy and procedures are periodically communicated to the employees who are considered as insiders of the Company. Trading window closure, when the Directors and employees are not permitted to trade in the securities of the Company, are intimated to all Directors and employees, in advance, whenever required.
5.7 Code of Conduct
The Board of Directors has adopted the code of conduct for Directors and senior management and the same has been placed on the Company's website. All Board Members and senior management personnel have afirmed compliance with the code of conduct for the current year.
5.8 The Company has adopted Vigil Mechanism Policy and has established a vigil mechanism for Directors and employees for reporting concerns about unethical behavior, actual or suspected fraud or violation of the Company's code of conduct or ethics policy. The said policy has been put up on the website of the company "<http://www>. skf.com/binary/83-166890/Vigil-Mechanism-Policy- 31.07.2014-FINAL.pdf" . During the year under review no concern of any nature was reported under this policy.
6. Means Of Communication
• The Company has 24,635 shareholders. The main channel of communication with the shareholders is through the annual report which includes inter-alia, the Directors' Report, the Report on Corporate Governance and Audited Financial Results. The shareholders' meeting is the company's highest decision-making body. The Annual General Meeting is the principal forum for face-to-face communication with shareholders, where the Board provides answers to specific queries of the shareholders.
• The quarterly/half-yearly/annual results are regularly submitted to the Stock Exchanges in accordance with Listing Agreement/SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and are published in a widely circulated English newspaper and a vernacular newspaper and are also posted on the Company's website.
• The Corporate Governance Report, Shareholding Pattern, Share Capital Audit Report, Financial Statement and other announcements are sent to the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited through NEAPS and BSE Listing respectively, which is a web based application designed for Corporates. This interface is to enhance the quality and speed of submission and also assist the listed companies to move towards paperless submission of documents with the Exchange. The said details are also uploaded on the Company's website in the investors section.
• Securities and Exchange Board of India has commenced processing of investor complaints in a centralized web based complaints redress system 'SCORES'. Accordingly, all complaints are viewed & Action Taken Reports are electronically submitted by the Company through SCORES.
• The website of the Company www.skf.com/in provides comprehensive information about its portfolio of businesses. Section on 'Investors' serves to inform and service the Shareholders allowing them to access information at their convenience. The full Annual Report, shareholding pattern, press release, Quarterly Results and Corporate Governance Report are also available on the website.
7. General Shareholder Information
7.1 Annual General Meeting
Day, Date and Time: Wednesday, 20th July, 2016 at 3.30 p.m.
M. C. Ghia Hall, Bhogilal Hargovindas Building, 4th Floor, 18/20, K. Dubash Marg, Kala Ghoda, Mumbai 400 001.
7.3 Financial Yea
the new Companies Act, 2013 financial year has been defined as the period ending on the 31st day of March every year. Accordingly, the Company has changed its financial year from calendar year to April - March. The results for every quarter are generally published in the month following the quarter except for the quarter January-March, for which the annual audited results along with the last quarter are published in the month of May as permitted under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
7.4 Date of Book Closure
Tuesday, 12th July, 2016 to Wednesday, 20th July, 2016 (both days inclusive)
7.5 Dividend payment date
After 20th July, 2016
7.6 Registered Office
Mahatma Gandhi Memorial Building, Netaji Subhash Road, Mumbai - 400 002.
7.7 Listing of Equity Shares on Stock Exchanges
The Company's shares were listed on 7th May, 1962 on the Bombay Stock Exchange Limited. Equity Shares of the Company are presently listed on the following Stock Exchanges:
Bombay Stock Exchange Limited
Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400001.
National Stock Exchange of India Ltd.
Exchange Plaza, Plot No. C/1, G Block, Bandra Kurla Complex, Bandra (East), Mumbai 400 051.
2,488 Shares kept in abeyance as per Bombay Stock Exchange directives at the time of rights issue in November 2001, shall be listed as and when allotted based on valid applications received from the shareholders.
The Company has paid the listing fees for the period 1st April, 2015 to 31st March, 2016 to both the Stock Exchanges and respective depositories where the shares of the Company are listed.
7.8 Stock Code
Bombay Stock Exchange Limited - BSE CODE 500472
National Stock Exchange - NSE Symbol - SKFINDIA
Securities ISIN nos. with NSDL and CDSL
Equity Shares : INE640A01023
7.9. Corporate Identity Number (CIN)
Corporate Identity Number (CIN), allotted by Ministry of Corporate Affairs, Government of India is 'L29130MH1961PLC011980', and our Company Registration Number is 011980.
Share Transfer System
Presently, the share transfers received in physical form are processed and the share certificates are returned within a period of 15 days from the date of receipt, subject to the documents being valid and complete in all respects. As required under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 a certificate on half yearly basis and quarterly report on Reconciliation of Share Capital from a practicing Company Secretary has been submitted to Stock Exchanges within stipulated time.
7.10 GDRs/ ADRs etc:
There are no outstanding GDRs / ADRs / Warrants or any other convertible instruments which are likely to impact the equity capital of the Company.
7.11 Dematerialisation of Shares
The shares of the Company are in compulsory dematerialized segment and are available for trading system on both National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).
7.12 Plant Locations
• Chinchwad, Taluka Haveli, Pune - 411 033,
• Plot 2, Bommasandra Industrial Area, Hosur Road, Bengaluru - 560 099,
• Plot No 2, Industrial Park II, Salempur- Mehdood, Haridwar - 249402
Address for correspondence
SKF India Limited
Mahatma Gandhi Memorial Building Netaji Subhash Road, Mumbai 400 002
Phone : +91 22 66337777 Fax : +91 22 22042738 E-mail : email@example.com
Registrars and Share Transfer Agents:
TSR Darashaw Limited
6-10 Haji Moosa Patrawala Industrial Estate, 20, Dr. E. Moses Road, Mahalaxmi, Mumbai 400 011,
Tel. : + 91 22 66568484 Fax : + 91 22 66568494 E-mail: firstname.lastname@example.org
Dedicated email id for investors: The Company has designated an exclusive email id for investors i.e. email@example.com to enable investors to submit their query if any.
All queries for shares held in physical form only should be forwarded to registrar & share transfer agents at the above mentioned address. For any assistance from the Company, members may contact Ms. Dilnavaz Gulestani, Assistant Manager - Legal & Secretarial at the registered office of the Company.
Other Information For Shareholders
8.1 As required under the Companies Unpaid Dividend (Transfer to General Revenue Account of the Central Government) Rules, 1978, the Company has transferred all unclaimed equity dividends up to the financial year 1996 to the General Revenue Account of the Central Government. Members who have so far not claimed or collected their dividend for the said financial year(s), may claim the same from the Registrar of Companies, Maharashtra by submitting an application in the prescribed form.
In terms of the provisions of Section 205(c) of the Companies Act, 1956 the Company is obliged to transfer dividends which remain unpaid or unclaimed for a period of seven years (from the date of the transfer into the Unpaid Dividend Account) to the credit of the Investor Education and Protection Fund (the Fund) established by the Central Government. Accordingly, the Company has transferred unpaid/unclaimed dividend up to the financial year 2008 to the Fund and no claim shall lie against the Company or the Fund in respect of dividends remaining unclaimed or unpaid and transferred to the Fund. Members who have not yet en-cashed their dividend warrants for the years 2009 to 2015 may approach the Company for revalidation / issue of duplicate dividend warrants as the unpaid / unclaimed dividends for the aforesaid inancial years are required to be transferred to the Investor Education & Protection Fund (IEPF) constituted by the Central Government under Section 125 of the Companies Act, 2013 after seven years from the date of declaration.
Reminders to encash the unclaimed dividend on shares are sent to the relevant shareholders, the unpaid dividend list is also available on the website of the Company.
8.2. "Go Green" Initiative:
As a continuing endeavour towards the "Go Green" Initiative, the Company is sending intimation of annual report/ dividends by e-mail/ECS to those shareholders whose e-mail addresses/bank details were made available to the Depositories or Share Transfer Agents. The physical copy was also made available for the un-delivered e-mail cases. Shareholders are requested to support this Green Initiative by providing e-mail addresses for receiving electronic communications.
9. Compliance under Non-Mandatory Requirement under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The Company complied with all the mandatory requirements and has adopted non-mandatory requirement as per details given below:
(a) The Board - the Company does maintain a separate office for the Non-Executive Chairman.
(b) Shareholders' Rights: The quarterly and half yearly results are published in the newspaper, displayed on the website of the Company and are sent to the Stock Exchanges where the shares of the Company are listed. The half-yearly results are not separately circulated to the shareholders.
(c) Audit Qualifications: The auditors have not qualified the financial statements of the Company. The Company continues to adopt best practices in order to ensure unqualiied inancial statements.
(d) Separate posts of Chairman and CEO: The Company is having separate post of Chairman and Managing Director.
(e) Reporting of internal auditor: Axis Risk Consultancy and JCSS are external firms appointed to conduct internal audits and they make presentations to the audit committee on their indings.
For and on behalf of the Board SKF India Limited
10th May, 2016.