India’s Top 500 Companies 2019

INDIA’S TOP 500 COMPANIES 2019 111 Experts’ View a strong manufacturing footprint and focus on localization, which would help us capture growth in Indian economy to our advantage. We are nearly doubling our investment into the Indian market from 2018 and over the next 3 to 5 years we will continue to invest in expanding our plant capacities, our product portfolio and engineering capabilities in the country. The company plans to increase its R&D spend from 2% to around 3%, which would help in developing innovative products. We are also expanding our distribution and logistics network through consolidated warehouses. Furthermore, with focus in e-mobility and hybrid vehicles segment, we are well-placed to serve the maturing domestic market through environmental- friendly and energy-efficient solutions. What are the key policies that guide corporate governance at Schaeffler India? Schaeffler India believes in a culture of corporate governance beyond regulatory requirements. The company follows the G20-OECD principles, which are based on fairness, transparency, responsibility and accountability, through four pillars – • Rights and Equitable treatment of Shareholders : Robust internal control system of the company ensures minimal conflicts of interest with that of promoters and minority shareholders; and transparency in related party transactions and process of approval beyond the regulatory requirements. The company also provides fair and transparent investor services through shareholder handbooks, quarterly investor calls, websites etc. • Role of Stakeholders in Corporate Governance : The company has included all its stakeholders including investors, employees, creditors, customers and suppliers in its corporate governance agenda. We have specific rules of engagement for dealing with various stakeholders, enabling access of information, encouraging employee participation, reporting unethical practices and enforcement of creditors’ rights. The company follows strong anti-corruption and anti-bribery policies as well as whistle-blower policies. On the CSR side too, the company does not confine itself to the regulatory requirements. The company has a strong compliance management system and employee welfare policies. • Disclosure and Transparency : We have transparent policies on executive remuneration, which is designed keeping in mind the company’s growth, interests of executives, shareholder interests and value creation. All the mergers and acquisitions are conducted in transparent manner, with complete disclosure and objectivity maintained throughout the process. • Responsibilities of the Board : The company has a well-balanced board structure with non-executive directors and non-promoter independent women directors for a more diverse and competent board. We have since many years, separate roles of Chairman and the CEO, and have optimum composition of board, beyond stipulated provisions, with clearly defined roles of committees and comprehensive risk management. Kindly throw some light on the merger of INA Bearings India Private Limited and Luk India Private Limited into Schaeffler India Limited? And, what are the key challenges that the company has faced in the implementation and how these challenges have been addressed? There were no major challenges with regard to the merger process, which happened in a systematic and transparent manner. We appointed two independent valuers to ensure objectivity in valuation of the M&A transaction. We had a higher merger voting with 99.96% of votes in favour from the public (non- promoter) shareholders. The time to complete the merger was also relatively less. There was only one challenge, however, post approval from NCLTs, with respect to stamp duty, in terms of both, standardization of processes as well as rationalization of the charge. Post-Merger scenario, what role do you see corporate governance playing towards achieving sustainable growth? Apart from commercial growth, corporate governance plays a crucial role in sustainable growth of any organization. Schaeffler India has a culture of corporate governance, which we want to take a grade higher Since we believe it is equally important how the business is conducted. We wish to enhance our program for supplier selection and management process. We shall continue to work on Skill enhancement and welfare of our employees. We are committed to sustainability by developing products leading to reduction in fuel consumption, emission and noise. On the CSR side, we intend to enhance the efficacy of our programs. We would like to switch to Integrated Reporting so that our stakeholders are able to access both financial and non-financial information. Other focus areas include further improvement of succession planning and board evaluation process. We believe governance and business will go hand in hand in future. Schaeffler India has established a good reputation, and we realize that to further enhance our image we need to scale up our corporate governance initiatives. Dun & Bradstreet