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DIRECTOR'S REPORT

Schaeffler India Ltd.

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Market Cap. (₹) 15203.66 Cr. P/BV 5.62 Book Value (₹) 865.66
52 Week High/Low (₹) 5798/4606 FV/ML 10/1 P/E(X) 36.22
Bookclosure 30/04/2019 EPS (₹) 134.29 Div Yield (%) 0.62
Year End :2018-12 

Directors' Report

Dear Shareholders,

The Directors are pleased to present the 56th Annual Report of the Company together with the audited financial statements of the Company for the year ended December 31, 2018.

Financial Highlights

(Rs,In Million)

Particulars

2018

2017

REVENUE FROM OPERATIONS (NET)

45,615.1

39,331.4

Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)

7,396.4

6,821.3

Less: Depreciation / Amortization

(1,485.0)

(1,381.6)

Earnings Before Interest and Tax (EBIT)

5911.4

5439.7

Less: Interest expense

(70.4)

(101.6)

Add: Other income

908.0

595.5

EARNINGS BEFORE TAX

(before exceptional items)

6,749.0

5,933.6

Provision for Tax

2,119.0

2,003.4

EARNINGS AFTER TAX

4,198.0

3,884.9

Financial and Operational Performance Economy

2018 on an upbeat note for the global economy, buoyed by a pickup in global manufacturing and trade through 2017. The final global growth numbers for 2018 is estimated to come in at 3.7%, despite weaker performance in some economies, notably Europe and Asia.

Indian economy continues to be a bright spot among major economies. Despite market volatilities, India retains the fastest growing major economy tag in the world and is expected to maintain the momentum. According to data, India’s GDP grew by 7.3 per cent in 2018-19. As proof of its

growing economy and increased investor spending, India is now ranked at 77th position in the World Bank’s Ease of Doing Business rankings 2018 - a jump of 23 places up from 2017.

Performance of the Company and State of Company’s Affairs

Your Company’s Revenues (net) was at Rs, 45,615.1 million in year 2018 (Year 2017: Rs, 39,331.4 million) representing a growth of 16.0 %. Profit before tax (before exceptional items) was placed at Rs, 6,749.0 million (Year 2017: Rs, 5,933.6 million) representing a growth of 13.7%. Your Company recorded profit after tax (after exceptional items)of Rs, 4,198.0 million (Year 2017: Rs, 3,884.9 million) representing a growth of 8.1%.

Outlook

The IMF expects the weakness in the second half of 2018 will carry over to coming quarters, with global growth projected to decline to 3.5 percent in 2019 before picking up slightly to 3.6 percent in 2020. It also mentions that India’s economy is poised to pick up in 2019, benefiting from lower oil prices and a slower pace of monetary tightening than previously expected, as inflation pressures ease. Indian Economy is projected to grow at 7.5 % during 2019.

Dividend

Your Company has a steady dividend payment history and considering the financial performance of the year 2018, your Directors recommend a dividend for the year ended December 31, 2018 at the rate of Rs, 20/- (2017: Rs, 17/-) per equity share amounting to Rs, 625.2 Million (2017: Rs, 282.5 Million). Further, your directors have also recommended a one-time special dividend at the rate of Rs, 10/- per equity share amounting to Rs, 312.6 Million. The Company will pay the tax on dividend as per the provisions of the Income Tax Act, 1961.

One Schaeffler India Entity

During the year under review, the Company has successfully completed the merger of INA Bearings India Private Limited and LuK India Private Limited with the Company.

Mr. Marcus Eisenhuth [DIN: 07904850] resigned from the Directorship effective February 14, 2019. Your Directors express their gratitude for the contribution made by Mr. Eisenhuth during his tenure as Director.

Mr. Satish Patel [DIN: 00690869] has been appointed as an Additional Director and Whole-time Director, designated as Director-Finance, with effect from February 13, 2019. Your Company has received a notice for his candidature for the office of Director under Section 160 of the Companies Act, 2013. The Nomination and Remuneration Committee and the Board of Directors recommend his appointment as a Director of the Company, liable to retire by rotation and as Director-Finance for a period of five years up to February 12, 2024.

The details of the Directors retiring by rotation / seeking appointment or reappointment at the ensuing AGM including, nature of their expertise in specific functional areas and the names of companies in which they hold directorship, membership/ chairmanship of committees of the Board is annexed to the Notice convening 56th AGM of the Company.

Key Managerial Personnel (KMP)

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

1. Managing Director & Chief Executive Officer:

Mr. Dharmesh Arora

2. Director-Finance & Chief Financial Officer:

Mr. Satish Patel

3. Company Secretary: Mr. Chirag K. Shukla

Meetings of Board of Directors

During the year under review, four meetings of the Board of Directors were held on February 7, 2018, April 17, 2018, July 26, 2018 and October 22, 2018. The details of attendance of each Director at these meetings are provided in the Corporate Governance Report.

Policy on Nomination and Remuneration

The Company’s Policy on Nomination and Remuneration is framed with objectives as under:

1. To formulate criteria and advise the Board in matters of determining qualifications, competencies, positive attributes and independence of Directors, and policies relating to their appointment and removal;

2. To review corporate goals and objectives, to set norms of performance evaluation and to lay out remuneration principles for Directors, KMP and Senior Management

The Hon’ble National Company Law Tribunal (NCLT), Chennai Bench, vide its order dated June 13, 2018 read with corrigendum dated July 3, 2018 and Hon’ble Mumbai bench, vide its order dated October 08, 2018 have approved the Scheme of Amalgamation. The merger has become effective from October 22, 2018

The Company is now one of the leading automotive and industrial component supplier.

Increase in Authorized Share Capital

Pursuant to the Scheme of Amalgamation of INA Bearings India Private Limited (‘INA’) and LuK India Private Limited (‘LuK’) with Schaeffler India Limited (‘the Scheme’), the Authorized Share Capital of the Company has increased from Rs, 200 Million to Rs, 1,255 Million.

Issue of Shares

During the year under review the Company issued and allotted 14,643,464 fully paid up Equity Shares having face value of Rs, 10/- each of the Company to the shareholders of INA and LuK in respect of Equity Shares held by them in INA and LuK, as per the share entitlement ratio provided under the Scheme. Consequently, the paid up share capital of the Company has increased from Rs, 166.2 Million to Rs, 312.6 Million.

Management Discussion and Analysis

Pursuant to Regulation 34 read with Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, detailed review of operations, performance and future outlook of the Company is covered under a separate section of the Annual Report as Management Discussion & Analysis.

Corporate Governance

A separate section on Corporate Governance is included in the Annual Report and the certificate from M/s. Samdani Kabra & Associates, Company Secretaries, the Company’s Secretarial Auditors confirming the compliance of conditions on Corporate Governance is annexed thereto.

Directors

In accordance with the provisions of Section 152 the Companies Act, 2013, Mr. Klaus Rosenfeld [DIN: 07087975] will retire by rotation at the ensuing Annual General Meeting (‘AGM’) and being eligible offers himself for reappointment.

Mr. Jurgen Ziegler [DIN: 07092477] has been appointed as an Additional Director with effect from April 18, 2018. Your Company has received a notice for his candidature for the office of Director under Section 160 of the Companies Act, 2013. The Nomination and Remuneration Committee and the Board of Directors recommend his appointment as a Director of the Company, liable to retire by rotation.

linked to their effort, performance and contribution towards achievement of organizational goals;

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

4. To review and recommend to the Board measures to retain and motivate talent including KMP and Senior Management Personnel with a view to ensuring long term sustainability and competitiveness of the organization.

Nomination and Appointment of Directors and Senior Management

Criteria and Qualification:

A person to be appointed as Director, KMP or at Senior Management level should possess adequate relevant qualification, expertise and experience for the position he / she is considered for appointment. Further, a person, to be appointed as Director, should possess impeccable reputation for integrity, expertise and insight in sectors / areas relevant to the Company, besides ability to contribute to the Company’s growth and should possess complementary skills in relation to the other Board members.

Process:

The candidates are identified internally as well as externally, depending on the position. Thereafter Human Resources / Relevant Department / Subject matter expert / external sourcing agency, as the case may be, carries out assessment of suitability of the candidate for the position and requisite interviews / background verification / remuneration negotiations are carried out. Thereafter, proposals are placed before the Nomination and Remuneration Committee. The NRC reviews qualification, expertise and experience possessed by the candidate for the concerned position and makes appropriate recommendations to the Board of Directors.

Policy on Remuneration

1. The remuneration (including revisions) to Directors is recommended by NRC to the Board for approval. The remuneration (including revisions) to the Directors, so recommended by NRC to the Board, should be within the limits under the Companies Act, 2013 read with the Rules thereunder and as approved by the shareholders of the Company.

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

3. While determining remuneration to KMP, Senior Management Personnel and other Employees, the Company encourages and rewards, merit and superior performance. The objective is to set the total remuneration at levels to attract, motivate, and retain high-calibre, and high potential personnel in a competitive global market.

The Nomination and Remuneration Policy of the Company is disclosed on the website at https://www.schaeffler.co.in/ remotemedien/media/_shared_media_rwd/03_worldwide_l/ websites_worldwide/india_3/investor_relations/corporate_ governance_l/codes_and_policies/nomination_and_

remuneration_policy_schaeffler_india.pdf

Formal Annual Evaluation

Your Company believes that systematic evaluation contributes significantly to improve performance at three levels: Organizational, Board and Individual Board Member.

It encourages the leadership, teamwork, accountability, decision-making, communication and efficiency of the Board. Evaluation also ensures teamwork by creating better understanding of Board dynamics, board-management relations and thinking as a group within the board.

Methodology

The Evaluation is done as per the criteria of performance evaluation recommended by the Nomination and Remuneration Committee (NRC) and approved by the Board of Directors. As per the said criteria, separate evaluation questionnaire for each category of evaluation viz. the Board of Directors, Non-Independent Directors, Independent Directors and Committees of the Board are defined under the policy document on the criteria. The NRC has reviewed the implementation and compliance of the process of performance evaluation.

Process

Separate sets of questions (questionnaire) for each of the evaluations i.e. for evaluation of (a) Board; (b) Each of the Committees of the Board; (c) Independent Director; (d) Non-Independent Director and (e) Chairman of the Board, are defined in the Policy for Performance Evaluation.

Inclusive summary of evaluation criteria for each category are as under:

Chairperson: (i) Effective conduct of meetings, (ii) Leading the policy and governance work of the Board (iii) Handling and resolving conflict of interest situations at the meetings

(iv) Unbiased opinions on the matters (v) Ability to assert and build support for consensus among the Board members

(vi) Understanding of legal/compliance requirements under Companies Act, 2013 (vii) ability to assess sense of meeting, objectively, independently and practically (viii) Considering views of all Board members and ensuring decisions are taken keeping in mind interest of all stakeholders and company as a whole.

Board of Directors: (i) Expertise and Experience of Directors,

(ii) Integrity of Directors, avoiding conflict of interest

(iii) Understanding of legal requirements and obligations

(iv) Quality of participation at the Board Meeting (v) Time spent on targets and strategy (vi) Frequency of meetings whether sufficient (vii) Length of meetings, agenda content, effective discussion (viii) Foresight of Board in anticipating issues (ix) Understanding of risk of the business and ensuring risk management system etc.

Committees of the Board: (i) Competence of Members,

(ii) Clarity of terms of reference (iii) Sufficient reporting to the Board (iv) Frequency and organization of meetings (v) Effective suggestions and recommendations provided to the Board (vii) Open participation and meaningful contribution by members (viii) Sufficiency of time allocation for discussion in detail on pertinent topics etc.

Non-Independent Directors: (i) Attendance at the meetings,

(ii) Preparedness for and active participation at the meeting

(iii) Staying updated on developments, (iv) Constructive contribution at the meetings, (v) Being objective and protecting interest of all shareholders, (vi) Quality and innovation of contributions at the meetings (vii) Ensuring integrity of financial statements / internal controls (viii) Ability to present one’s view convincingly etc.

Independent Directors: (i) Attendance at the meetings,

(ii) Preparedness for and participation at the meetings,

(iii) Staying updated on developments, (iv) Constructive contribution at the meetings, (v) Being objective and protecting interest of all shareholders, (vi) Engaging with and challenging management without being confrontational or obstructionist, (vii) Ensuring integrity of financial statements / internal controls, (viii) Ensuring risk management system & mitigation measures are in place and effective February 13, 2019 include fulfillment of the independence criteria (as specified in the Listing Regulations) and independence from the management.

The questionnaire for each category of evaluation are circulated to all the Directors. Each question has four rating options i.e. 1 to 4. Rating 1 denotes ‘Need Improvement’, 2: ‘Fair’, 3: ‘Good’ and 4: ‘Excellent’.

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

For the year 2018, the Board has carried out an annual performance evaluation of its own and that of each of the committees and all Directors. Further, the NRC has also carried out evaluation of all the Directors including Independent Directors.

Conclusion

The Evaluation for the year 2018 of Directors, each of the Committees and that of the Board have received ratings that are near Excellent.

The Board has taken note of the following feedback received from Directors to further improve the performance of the Directors, the Board itself and Committees of the Board:

- Suggestion to bring more awareness to all Independent Directors on risks of the Company and mitigation measures being taken.

- Suggestion for holding an additional meeting of the Board once a year to discuss strategy and other business matters - as good governance practice.

- Suggestion for holding an additional meeting of Audit Committee to review Internal Audit Plan for the year.

- Suggestion for enhanced involvement of the Nomination and Remuneration Committee in overall process of appointment and remuneration of persons directly reporting to Managing Director.

Separate Meeting of Independent Directors

As per provisions of Schedule IV to the Companies Act 2013, the Independent Directors are required to hold at least one meeting in a financial year, without the attendance of Non Independent Directors and members of management. During the financial year 2018, the Independent Directors have held one separate meeting on February 6, 2018.

Independent Directors’ Declaration

The Independent Directors have given declarations that they meet the criteria of independence as per the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015.

Audit Committee

The Audit Committee is duly constituted and has met four times during the year 2018. The details of terms of reference of the Committee, dates of meetings held during the year and attendance of members thereat, are disclosed in the Corporate Governance Report. There was no instance where any recommendation by the Committee was not accepted by the Board.

Mrs. Renu Challu is Chairperson of the Committee. Other members of the Committee are Mr. Avinash Gandhi, Dr. Sanak Mishra and Mr. Rakesh Jinsi. The Board of Directors has reconstituted the Audit Committee effective from February 13,

2019 and thereby, has appointed Mr. Jurgen Ziegler and Mr. Satish Patel as members of the Committee.

Whistle Blower Policy / Vigil Mechanism

Your Company has a well-defined Vigil Mechanism / Whistle Blower Policy which provides for mechanism for stakeholders to report their genuine concerns. The said mechanism/policy provides for adequate safeguard to the whistle blower against victimization. It provides for direct access to the Chairperson of Audit Committee in appropriate cases.

Whistle Blower Policy of the Company is available on the

Company’s website at the web-link: https://www.schaeffler.

co.in/remotemedien/media/_shared_media_rwd/03_

worldwide_1/websites_worldwide/india_3/investor_

relations/corporate_governance_1/codes_and_policies/vigil_

mechanism_or_whistle_blower_policy_schaeffler_india.pdf

Risk Management

Your Company has established comprehensive Risk Management System to ensure that risks to the Company’s continued existence as a going concern and to its performance are identified and addressed on timely basis.

Constitution of Risk Management Committee

The Board of Directors of the Company has constituted the Risk Management Committee on February 13, 2019 comprising Mr. Dharmesh Arora, as Chairman, Dr. Sanak Mishra, Mr. Satish Patel, Mr. Sameer Mathur (Chief Operating Officer) and Mr. Santanu Ghoshal (Head of Human Resources) as Members. The terms of reference of the Risk Management Committee is disclosed in the Corporate Governance Report.

Auditors Statutory Auditors

The Statutory Auditors, M/s. B.S.R. & Co. LLP, Chartered Accountants, Mumbai, (Firm Registration Number: 101248 W / W-100022) were appointed as Statutory Auditors of the Company at the 52nd Annual General Meeting of Company held on April 24, 2015 for a period of five consecutive years.

The observations made in the Auditor’s Report, read together with relevant notes thereon, are self-explanatory and hence do not call for any comments. There is no qualification, reservation, adverse remark or disclaimer by the Statutory Auditors in their Report.

Reporting of Fraud

The Auditors of the Company have not reported any instances of fraud committed against the Company by its officers or employees as specified under Section 143(12) of the Companies Act, 2013.

Secretarial Auditors

M/s. Samdani Kabra & Associates, a firm of Company Secretaries in Practice was appointed as ‘Secretarial Auditors’ to carry out Secretarial Audit of the Company for the year 2018. In terms of provisions of section 204 of the Companies Act, 2013, a Secretarial Audit Report has been annexed to this Report. (Annexure - A)

Cost Records and Cost Audit Maintenance of Cost Records

The Company is required to maintain cost records under Companies (Cost Records and Audit) Rules, 2014. Accordingly, cost records have been maintained by the Company.

Cost Audit

M/s Y. S. Thakar & Co., Cost Accountants, as Cost Auditors were appointed to conduct the audit of the cost records of the Company for the Financial Year ended December 31, 2018. Based upon the declaration on their eligibility, consent and terms of engagement, your Directors have reappointed M/s.

Y. S. Thakar & Co., Cost Accountants to conduct Audit of Cost records for the FY 2019.

As required under the provisions of Companies Act, 2013, the remuneration of Cost Auditors as approved by the Board of Directors is subject to ratification by the shareholders at the ensuing Annual General Meeting.

Explanation or Comments on disqualifications, reservations, adverse remarks or disclaimers in the auditor’s reports:

Explanation with regard to the remarks of the Secretarial Auditors in their Audit report on amount of CSR spend being below 2% of average net profits is as under:

Schaeffler India Limited is committed to creating a positive impact over the society. Most of the Company’s projects are long term association towards creating a sustainable transformation. Since the time CSR policy came into effect, Company’s records demonstrate that it has been very particular in picking up the right projects and comply with legal spending mandate as well. During the year under review, the Company, while continuing to support its ongoing projects, has associated itself with a few new projects and intends to expand its CSR initiatives in a systematic manner to create meaningful contributions in the development of weaker sections of the society. The Company envisages valuable CSR spend in a more structured manner for which it has initiated a long-term project in the field of community development and skill training. As an organization, it took time, to identify the

A separate report containing details of Material Related Party Transactions carried out during the year is annexed to this report in prescribed form AOC-2. (Annexure - C)

Erstwhile INA Bearings India Private Limited (‘INA’) and LuK India Private Limited (‘LuK’) had their respective business transactions with Schaeffler Technologies AG & Co. KG, Germany and pursuant to their merger with the Company, those transactions have become transactions of the Company. Therefore, a revision in limits for material related party transactions, with Schaeffler Technologies AG & Co. KG, Germany, pursuant to provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is proposed at the ensuing Annual General Meeting.

Particulars of Employees and Related Disclosures

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

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 have been annexed to this Report. (Annexure - E)

Annual Return and Extract of Annual Return

As per provisions of Section 92 of the Companies Act, 2013 read with Rules made thereunder, a draft Annual Return of the Company for the year 2018 in the form MGT-7 is available on the website of the Company at https://www.schaeffler.co.in/ content.schaeffler.co.in/en/investor-relations/shareholders-information/annual-return/index.jsp and the Extract of Annual Return in the form MGT-9 has been annexed to this Report. (Annexure - F)

Particulars of Loans Given, Investments Made, Guarantees Given and Securities Provided

The particulars of loans Given and Investments made have been disclosed in notes to the Financial Statements. There were no financial guarantee or security provided by the Company.

right projects which are more sustainable in nature and thus create more impact. These projects were in the initial stage, and because of delay in conceptualization of project design and receiving necessary approvals from local legislation, the whole process of implementation got delayed. In a few of the cases, the Company also faced some challenges with its implementation partner, which further added to the delay. However, the Company is still pursuing those projects and will endeavour to implement them.

Going forward, the Company will take due care in identification of projects in a timely manner and focus on projects that are scalable, those that would create impact and be in alignment with the Company’s overall HOPE philosophy.

There have been no other disqualifications, reservations, adverse remarks or disclaimers in the auditor’s reports, requiring explanation or comments by the Board.

Corporate Social Responsibility (CSR)

Being a responsible Corporate Citizen, your Company is committed to fulfill Social Responsibility. Guided by the prevailing regulatory requirements, the Company has constituted a ‘Corporate Social Responsibility (CSR) Committee’ and framed a Policy on CSR. The Policy is available on the website of the Company at https://www.schaeffler.co.in/ remotemedien/media/_shared_media_rwd/03_worldwide_1/ websites_worldwide/india_3/investor_relations/corporate_ governance_1/codes_and_policies/policy_on_corporate_ social_responsibility_schaeffler_india.pdf

The explanation for amount of CSR spend being below 2% of average net profits has been given under previous paragraphs.

A summary of CSR Policy together with details of CSR activities undertaken by the Company during the year 2018 have been covered in the Annual Report on CSR activities, which is annexed to this report. (Annexure - B)

Contracts and Arrangements with Related Parties

During the year, all transactions with the Related Parties have been carried out in ordinary course of business and based upon well set principles of arm’s length.

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

The Related Party Transaction Policy of the Company is

available on the website of the Company at https://www.

schaeffler.co.in/remotemedien/media/_shared_media_

rwd/03_worldwide_1/websites_worldwide/india_3/investor_

relations/corporate_governance_1/codes_and_policies/

policy_on_related_party_transactions_schaeffler_india.pdf

Directors’ Responsibility Statement

Pursuant to the requirements under Section 134(3)(c) of the Companies Act, 2013, your directors hereby state that:

a) In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from the same;

b) The accounting policies have been selected and these have been applied consistently and judgments and estimates made thereon are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at December 31, 2018 and of the profit of the Company for that period;

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

d) Annual accounts of the Company have been prepared on a ‘going concern’ basis;

e) Internal financial controls have been laid down and are being followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) Proper systems to ensure compliance with the provisions of all applicable laws have been devised and that such systems are adequate and were operating effectively.

Adequacy of Internal Financial Controls

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants and the reviews performed by management and the Audit Committee, the Board is of the opinion that during the financial year ended December 31, 2018, the Company had sound internal financial controls commensurate with the nature and size of the business operations and are adequate and operating effectively with no material weaknesses.

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

The Company has in place a Policy against Sexual Harassment at workplace in line with the requirement of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Policy is available on the website of the Company www.schaeffler.co.in

Internal Complaints Committees (ICC) have been set up to redress complaints received regarding sexual harassment. Details of Internal Complaints Committee Members are as under:

Maneja & Savli Loacation:

Name

Category

Ms. Hemlata Nair

Chairperson

Ms. Mercy K.

Secretary

Ms. Megha Dave

Member

Ms. Kajal Doshi

Member

Mr. Amul Niphadkar

Member

Mr. Amarjeet Benipal

Member

Mr. Peeyush Dhanak

External Member- Legal

Consultant

Pune Location:

Name

Category

Mrs. Pallavi Sarkar

Chairperson

Ms. Dipti Khole

Secretary

Mrs. Snehal Birari

Member

Mr. Vinaykumar Pal

Member

Mr. Rajeev Joshi (Advocate)

External Member- Legal

Consultant

Hosur Location:

Name

Category

Ms. Radha

Chairperson- External

Member- Legal Consultant

Ms. Gowri Velumayil

Secretary

Mrs. Nalini Kalamani

Member

Status of complaints during the year 2018:

There were no complaints pending at the beginning of the year 2018 and the Company has not received any complaint during the year 2018.

Material Changes and Commitments and Change in Nature of Business

There have been no material changes and commitments, affecting the financial position of the Company from the end of the Year 2018 upto the date of this report.

In view of the Merger of erstwhile INA Bearings India Private Limited and erstwhile LuK India Private Limited with the Company, the Company now deals in wider range of the products including clutches, components for engine and chassis systems apart from bearings. Apart from the above, there has been no change in the nature of business carried on by the Company.

Compliance of Secretarial Standards

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2).

Transfer to Reserves

Considering sufficiency of balance, your Directors do not propose to transfer any amount to General Reserves for the year under review.

Deposit

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

Subsidiaries, Joint Ventures and Associates

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

Orders Passed by the Regulators or the Courts or the Tribunals

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

Acknowledgements

Your Directors express their gratitude to the employees for their dedication, hard work and efforts. The Board also places on record the continued cooperation and support extended by the Schaeffler Group, all the Shareholders, Customers, Suppliers, Distributors, Banks, Government & Regulatory Authorities and Business Associates.

For and on behalf of the Board

Avinash Gandhi

Chairman

Mumbai: February 13, 2019 DIN: 00161107

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