You are here » Home » Companies » Company Overview » Setco Automotive Ltd

Setco Automotive Ltd.

BSE: 505075 Sector: Auto
NSE: SETCO ISIN Code: INE878E01021
BSE 00:00 | 20 May 14.50 0.15
(1.05%)
OPEN

14.70

HIGH

14.95

LOW

14.40

NSE 00:00 | 20 May 14.50 0.15
(1.05%)
OPEN

14.55

HIGH

14.90

LOW

14.40

OPEN 14.70
PREVIOUS CLOSE 14.35
VOLUME 13598
52-Week high 25.20
52-Week low 13.45
P/E
Mkt Cap.(Rs cr) 194
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 14.70
CLOSE 14.35
VOLUME 13598
52-Week high 25.20
52-Week low 13.45
P/E
Mkt Cap.(Rs cr) 194
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Setco Automotive Ltd. (SETCO) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the 38th (Thirty Eight) Annual Report on thebusiness operations together with the audited financial statements for the financial year(FY) ended March 31 2021. This report states compliance as per the requirements of theCompanies' Act 2013 ("the Act") the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") and other rules and regulations as applicable to the Company.

FINANCIAL PERFORMANCE

The Company's financial performance (standalone and consolidated) for the year endedMarch 31 2021 is summarised below:

(Rs. in Cr. Except for EPS)

Particulars Standalone Consolidated
2020-21 2019-20 2020-21 2019-20
Revenue from Operation & Other Income 319.28 437.09 367.91 475.01
Gross Profit before Finance Cost & Depreciation 14.18 60.08 (1.40) 40.69
Less: Finance Cost 48.12 39.59 59.08 56.96
Less: Depreciation 21.82 19.00 33.71 32.34
Profit/(Loss) before Tax (55.77) 1.49 (127.08) (54.05)
Less: Provisions for Tax Expenses (2.23) (3.55) (3.79) (4.50)
Profit/ (Loss) from continuing operations (94.06) (15.16) (123.30) (49.55)
Other Comprehensive Income (11.09) (1.28) (8.81) (2.86)
Profit/(Loss) after Taxes including other Comprehensive Income (105.15) (16.45) (132.11) (52.42)
Less: Non-Controlling Interest - - (3.22) (4.50)
Profit/(Loss) for the Year attributable to Equity Holders of the parent (105.15) (16.45) (128.89) (47.42)
Earning Per Shares (Rs.) (7.03) (113) (8.93) (3.33)

BUSINESS OPERATIONS

FY 2020-21 was a challenging and a highly volatile year for the automotive sector as awhole. The more severely hit segments were the Medium and Heavy Commercial Vehicle Segment(MHCV) showed a decline of ~30%. The automotive sector saw both ups and down during thisperiod bringing the MHCV industry to a decade low.

In view of the lockdown across the country due to the COVID-19 the company temporarilysuspended the operations in all the units in compliance with the lockdown instructions asissued by the Central and State governments. COVID-19 has impacted the normal business byway of interruption in business operations supply chain disruption unavailability ofpersonnel closure/lockdown of production facilities etc. during the lockdown period.However production and sales/supply of goods have commenced during the month of May2020.

During this turbulent and unprecedented time the Company with its strong order bookand products in development remained the market leader and a preferred supplier for allthe Original Equipment Manufacturers (OEMs) in India. The Company has implemented StandardOperating Procedures to fight with Covid-19 which includes social distancing workplacesanitisation and employees' health monitoring and these are being followed strictlyacross all its Manufacturing Locations Head Office and its Registered Office.

During the year under review your Company has recorded revenue from operations of Rs.314.06 Crore as against revenue from operations of Rs. 418.08 Crore in the previous year.EBITDA of the Company reduced from Rs. 41.07 Crore in the previous year to Rs. 8.95 Croreduring the year under review. The company has performed a detailed assessments of itsliquidity position and the recoverability of its assets comprising property plant andequipment inventories receivables and other current assets as at the balance sheet dateand on the basis of evaluation the company has taken one time hit on account of expectedcredit loss recorded on trade receivables limited operations due to the pandemic and onetime impairment costs of Rs. 7.91 Crore on account of diminution in investment(Subsidiaries and Associates).

A detailed discussion on the business performance and future outlook is included inManagement Discussion & Analysis which forms part of the Directors' Report.

SHARE CAPITAL

There was no change in the Share Capital of the Company during the financial year. Ason March 31 2021 the issued and paid-up capital of the Company was Rs. 267534550/-divided into 133767275 equity shares of Face Value Rs. 2/- each. Your Company has nothas not issued shares with differential voting rights nor granted employee stock optionssweat equity or bonus shares. The Company does not have any Debentures Preference Sharesas on March 31 2021.

The equity shares of the Company continue to be listed on BSE Limited ("BSE")and National Stock Exchange of India Limited ("NsE"). The stipulated listingfees for FY2021-22 have been paid to both stock exchanges.

DIVIDEND

In order to conserve the resources of the company and considering uncertain economicscenario due to second wave of Covid-19 the Board of Directors has not recommended anydividend for the financial year ended on March 31 2021.

TRANSFER TO RESERVES

The Board of Directors has decided not to transfer any amount to the reserve during FY2020-2021 in view of loss during the financial year.

FIXED DEPOSITS

The Company has not accepted any Deposit covered under Section 73 of the Companies Act2013 and The Companies (Acceptance of Deposit) Rules 2014 during the year under review.Hence the requirement for furnishing of details relating to deposits covered underChapter V of the Act or the details of deposits which are not in compliance with theChapter V of the Act is not applicable.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Details of loans granted guarantees provided and investments made by the Company underthe provisions of Section 186 of the Act read with the Companies (Meeting of Board and itsPowers) Rules 2014 are provided in the Notes to Standalone Financial Statements of theCompany forming part of this Annual Report.

MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis as stipulated under the Listing Regulations ispresented in a separate section forming part of this Annual Report. It provides detailsabout the overall industry structure global and domestic economic scenarios developmentsin business operations / performance of the Company's internal controls and theiradequacy risk management systems and other material developments during the financialyear 2020-21.

CHANGE IN NATURE OF BUSINESS MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIALPOSITION OF THE COMPANY OCCURRED BETWEEN MARCH 31 2021 AND DATE OF THIS REPPORT

The Board of Directors of the Company at its meeting held on April 26 2021 based onrecommendation of the Audit Committee approved the sale transfer and disposal as a goingconcern and on a slump sale basis of business undertaking of the Company's clutchbusiness together with the use of all the licenses permits consents and approvalswhatsoever and all related assets (movable and immovable tangible and intangible) andidentified liabilitie contracts and employees for a lump sum consideration of Rs. 5lakhs (Rupees Five Lakhs only) to Setco Auto Systems Private Limited wholly ownedsubsidiary of the company vide business transfer agreement dated August 31 2021.

Aforesaid transaction has been approved by the members of the Company at its ExtraOrdinary General Meeting held on May 22 2021.

In light of above revenue from Clutch Business has been considered as discontinuedoperations w.e.f. September 7 2021.

SUBSIDIARIES

Performance of Company's subsidiaries is elaborated in detail under 'ManagementDiscussion & Analysis'.

During the financial year Setco Auto Systems Private Limited (SASPL) (formerly knownas Transstadia Sport Sciences Private Limited) became wholly owned subsidiary of theCompany w.e.f March 26 2021 consequent upon acquisition of 100% shareholding from Mr.Harish Sheth and Mr. Udit Sheth.

Your Company has in total six subsidiaries across the globe which includes Lava CastPrivate Ltd. (LCPL) (CIN: U27205GJ2011PTC100777) Setco Auto Systems Private Limited(formerly known as Transstadia Sport Sciences Private Limited) (CIN:U35100GJ2010PTC062770) Setco Automotive (UK) Ltd (SAUL) Setco Automotive (Na) Inc.(SANAI) Setco MEA DMCC Dubai and WEW Holdings Ltd (Mauritius).

In accordance with Section 136 of the Companies Act 2013 the Company is exempted fromattaching the annual reports and other particulars of its subsidiary Companies with theannual report of the Company. Accordingly the Annual Reports of the subsidiaries are notattached with this Annual Report. However statement containing salient features offinancial statements of subsidiaries as per 129 (3) of the Act is included in this AnnualReport in form AOC- 1 as Annexure I to the Directors' Report. The financialstatements of the subsidiary companies are available for inspection of the shareholders atthe Registered Office of the Company between 11.00 a.m. to 3.00 p.m. on all working daysup to and including the date of the Meeting.

The Policy for determining material subsidiaries as approved may be accessed on theCompany's website at the link http://www.setcoauto.com/statutorv-policies.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

The composition of the Board of Directors of the Company is furnished in the CorporateGovernance Report annexed to this report.

DIRECTOR RETIRING BY ROTATION

In accordance with the Articles of Association of the Company and Section 152 of theAct read with the Companies (Appointment and Qualification of Directors) Rules 2014(including any statutory modification(s) or re- enactment(s) thereof for the time being inforce) Mr. Harish Sheth Chairman and Managing Director (DIN: 01434459) is due to retireby rotation at the ensuing Annual General Meeting (AGM) and being eligible offers himselffor re- appointment.t

A brief profile of Mr. Harish Sheth is provided in the Notice of the ensuing AGM of theCompany.

CESSATION

Mr. Vinay Shahane Chief Financial Officer (CFO) of the Company ceased to be CFO of thecompany due to his death and such cessation is with effect from November 23 2020 and Mr.Chandra Kant Sharma Company Secretary (CS) of the Company resigned from the Company witheffect from December 29 2020. The Board places on record its sincere appreciation fortheir invaluable contribution and guidance during their tenure as CFO and CS of theCompany respectively.

As on 31st March 2021 none of the Directors are disqualified forappointment/re-appointment under Section 164 of the Companies Act 2013.

DECLARATION BY INDEPENDENT DIRECTORS:

As stipulated under the provisions of Section 149 (6) of Act and Regulation 25 ofListing Regulations the requisite declarations have been received from the IndependentDirectors regarding meeting the criteria of Independence as laid down under thoseprovisions. In terms of Regulation 25(8) of the Listing Regulations the IndependentDirectors have confirmed that they are not aware of any circumstance or situation whichexist or may be reasonably anticipated that could impair or impact their ability todischarge their duties.

The Board took on record the declaration and confirmation submitted by the independentdirectors regarding their meeting the prescribed criteria of independence afterundertaking due assessment of the veracity of the same as required under Regulation 25 ofthe Listing Regulations.

KEY MANAGERIAL PERSONNEL

The following persons have been designated as the Key Managerial Personnel of theCompany pursuant to Section 2(51) and 203 of the Companies Act 2013 read with Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014:

- Mr. Harish Sheth Chairman & Managing Director

- Mr. Udit Sheth Vice Chairman (w.e.f. May 30 2020)

- Mrs. Urja Shah Executive Director

- Mr. Jatinder Bir Singh Gujral Chief Executive Officer

- Mr. Rovinder Singla Chief Financial Officer (w.e.f. August 2 2021)

- Mr. Hiren Vala Company Secretary and Compliance officer.

During year under review Mr. Chandra Kant Sharma Company Secretary of the Companyresigned from the Company with effect from December 29 2020. Mr. Hiren Vala wasappointed as the Company Secretary with effect from January 12021.

NOMINATION AND REMUNERATION POLICY

In terms of requirements prescribed under Section 178 of the Companies Act 2013 theCompany has framed a Nomination and Remuneration Policy for appointment and remunerationof the Directors Key Managerial Personnel and Senior Management (the"Policy").

The purpose of this Policy is to establish and govern the procedure as applicable interalia in respect to the following:

a) To evaluate the performance of the members of the Board.

b) To ensure remuneration to Directors Key Managerial Personnel and Senior Managementinvolves a balance between fixed and incentive pay reflecting short and long termperformance objectives appropriate to the working of the Company and its goals.

c) To retain motivate and promote talent and to ensure long term sustainability oftalented managerial persons and create competitive advantage.

The Policy is available on the website of the Company -https://setcoauto.com/statutory-policies/

FAMILIARIZATION PROGRAM FOR THE INDEPENDENT DIRECTORS

In compliance with the requirement of the Listing Regulations the Company has put inplace a familiarization programme for the Independent Directors to familiarize them withtheir roles rights responsibilities as directors nature of the industry in which theCompany operates business model of the Company and related matters. The details offamiliarization programmes are explained in the Corporate Governance Report. The saiddetails are also available on the website of the Company at the link http://www.setcoauto.com/statutorv-policies.

PERFORMANCE EVALUATION OF BOARD

In line with the statutory requirements enshrined under the Companies Act 2013 and theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Boardcarried out a performance evaluation. A formal evaluation of performance of the Boardit's Committees the Chairman and that of the individual Directors was carried out for thefinancial year 2020-21.

The evaluation of Individual Directors was done taking into consideration the roleplayed by each Director as a member at the respective meetings in pursuit of the purposeand goals participation at the meetings independent views and judgement initiativeownership of value building.

The performance of the Committees was evaluated by the Board after seeking inputs fromthe Committee members on the basis of the criteria such as the composition of Committeeseffectiveness of Committee meetings information shared and participation of members. Inrespect of evaluation for performance of the Board the parameters inter alia comprised ofkey areas such as Board composition competency of Directors diversity frequency ofBoard and Committee meetings information sharing and disclosures made to the Board andits Committees. The responses received on evaluation of the Board and its Committees andthat of the individual Directors were shared with the Chairman.

The overall performance evaluation process for functioning of Board and its Committeeswas based on discussions amongst the Board Members Committee Members and responses sharedby each Member. The Board found that there was considerable value and richness in thediscussions and deliberations. Based on the outcome of the evaluation the Board andCommittees have agreed for possible continuous improvisation to ensure bettereffectiveness and functioning of the Board and Committees.

Similarly the Board at its meeting assessed the performance of the IndependentDirectors. The Directors were quite satisfied with the results of the performanceevaluation of the Board & its Committees Chairman and individual directors.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act 2013 the Directors confirm that:

a) in the preparation of the annual accounts for the financial year ended 31st March2021 the applicable accounting standards and Schedule III of the Companies Act 2013have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of your Company as at 31st March 2021 and of the profitand loss of the Company for the financial year ended 31st March 2021;

c) proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) the annual accounts have been prepared on a 'going concern' basis;

e) proper internal financial controls laid down by the Directors were followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

f) proper systems to ensure compliance with the provisions of all applicable laws werein place and that such systems were adequate and operating effectively.

NUMBER OF BOARD MEETING

The Board of Directors met 5 (Five) times during year under review. The details ofboard meeting and the attendance of the Directors are provided in the Corporate GovernanceReport which forms part of this Annual Report.

COMMITTEES OF BOARD

Details of various committees constituted by the Board of Directors as per theprovision of the SEBI Listing Regulations and Companies Act 2013 are given in theCorporate Governance Report which forms part of this Annual Report.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

The Company undertakes various transactions with related parties in the ordinary courseof its business. All transactions entered into with related parties as defined under theCompanies Act 2013 during the financial year were in the ordinary course of business andon an arm's length pricing basis and do not attract the provisions of Section 188 of theCompanies Act 2013.

All Related Party Transactions are placed before the Audit Committee as also the Boardfor approval. The transactions entered into pursuant to the omnibus approval so grantedand a statement giving details of all related party transactions is placed before theAudit Committee and the Board of Directors for their approval on a quarterly and annualbasis.

There were no materially significant transactions with the related parties during thefinancial year which were in conflict with the interest of the Company and henceenclosing of Form AOC-2 is not required. Suitable disclosure as required by the AccountingStandard (AS-18) has been made in the notes to the Financial Statements.

The Policy on materiality of related party transactions and dealing with related partytransactions may be accessed on the Company's website at the link http://www.setcoauto.com/statutory-policies.

The details of related party transactions as per Indian Accounting Standards (IND AS) -24 are set out in Note 38 to the Standalone Financial Statements of the Company.

EXTRACT OF ANNUAL RETURN

As per the requirements of Section 92(3) of the Act and Rules framed thereunder theextract of the annual return for FY 2021 is available on https://setcoauto.com/annual-reports/.

AUDITORS

Statutory Auditors

M/s. V. Parekh & Associates Chartered Accountants (Firm Registration No. 107488W)were appointed as Auditors of the Company for a term of 5 (five) consecutive years at theAGM held on September 27 2017. The Auditors have confirmed that they are not disqualifiedfrom continuing as Auditors of the Company.

SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT

Your Company has undertaken Secretarial Audit for the financial year 2020-21 whichinter alia includes audit of compliance with the Companies Act 2013 and the Rules madeunder the Act SEBI Listing Regulations and applicable Regulations prescribed by theSecurities and Exchange Board of India and Secretarial Standards issued by the Instituteof the Company Secretaries of India. Pursuant to the provisions of Section 204 of theCompanies Act 2013 and the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the Board of Directors had appointed M/s. P. P. Shah & Co.Practicing Company Secretaries (Membership No.1483 CP No. 436) to conduct the SecretarialAudit of the Company for financial year 2020-21.

The Secretarial Audit Report for the financial year ended March 31 2021 is annexedherewith marked as Annexure II in Form MR-3 to this Report. The Secretarial AuditReport does not contain any qualification reservation or adverse remark.

Pursuant to Regulation 24A of the Listing Regulations the Company has obtained AnnualSecretarial Compliance Report from M/s. P. P. Shah & Co. on compliance of allapplicable SEBI Regulations and circulars / guidelines issued there under and the samewere submitted with the Stock Exchanges.

SECRETARIAL AUDIT OF MATERIAL UNLISTED INDIAN SUBSIDIARY

Pursuant to provisions of Regulation 24A of SEBI Listing Regulations Secretarial Auditwas undertaken for our material unlisted subsidiary - Lava Cast Private Limited. TheSecretarial Audit Report for aforesaid material unlisted subsidiary company is availableon Company's website www.setcoauto.com.

SECRETARIAL STANDARDS

The Directors state that applicable Secretarial Standards i.e. SS -1 and SS -2relating to 'Meeting of the Board of Directors' and 'General Meeting' respectively havebeen duly followed by the Company.

CORPORATE GOVERNANCE

We comply with the Securities and Exchange Board of India (SEBl)'s guidelines onCorporate Governance. A report on Corporate Governance alongwith a certificate from theSecretarial Auditors of the Company regarding the compliance with provisions of corporategovernance as stipulated under Schedule V of the Listing Regulations forms a part of thisAnnual Report.

All Board members and senior management personnel have affirmed compliance with theCode of Conduct for the year 2020-21. A declaration to this effect signed by the Chairman& Managing Director of the company is contained in this Annual Report.

The Chief Executive Officer/Chief Financial Officer (CEO/CFO) certification as requiredunder SEBI Listing Regulations and the said certificate is contained in this AnnualReport.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

A. Conservation of Energy: The operations of the Company are not energy - intensive.However the Company takes necessary steps wherever applicable to conserve energy. Tothis extent employees and operators are regularly educated about saving energy.

B. Technology Absorption: The Company's product i.e. clutches for commercial vehiclesare manufactured under the proprietary technology and heritage 'Lipe' Brand. Most of thecomponents for manufacturing clutches are procured indigenously except for certaincritical components for offering better quality at a competitive price to customersbeing imported.

C. Foreign Exchange Earnings and Outgo: Details of foreign exchange earnings and outgoduring the financial year 2020-21 are provided in the Notes to Standalone FinancialStatements of the Company forming part of this Annual Report.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

In accordance with the applicable provisions of Companies Act 2013 read with InvestorEducation and Protection Fund (Accounting Audit Transfer and Refund) Rules 2016("IEPF Rules") all unclaimed dividends are required to be transferred by theCompany to the IEPF after completion of seven (7) years.

Further according to IEPF Rules the shares on which dividend has not been claimed bythe shareholders for seven (7) consecutive years or more is required to be transferred tothe demat account of the IEPF Authority. The details relating to amount of dividendtransferred to the IEPF and corresponding shares on which dividends were unclaimed forseven (7) consecutive years are provided in the General Shareholders Information sectionof this Annual Report.

INTERNAL FINANCIAL CONTROLS

The Company has appropriate internal control system in place to ensure reliability offinancial reporting orderly and efficient conduct of business compliance with policiesprocedures safeguarding of assets and economical and efficient use of resources.Appropriate review and control mechanisms are in place to ensure that such control systemsare adequate and operate effectively.

Audit Committee and the Board review these internal control systems to ensure theyremain effective and are achieving their intended purpose. The Company's internal auditteam conducts periodic audits checks and has laid down controls to prevent detect andcorrect any irregularities in the operations of the Company.

INDIAN ACCOUNTING STANDARDS (IND AS) 2015

The annexed financial statements comply in all material aspects with the IndianAccounting Standards (Ind AS) notified under section 133 of the Act [Companies (IndianAccounting Standards) Rules 2015] and other relevant provisions of the Act.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provisions of Companies Act 2013 (hereinafter referred to as"the Act") Regulation 33 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 and applicable AccountingStandards the Audited Consolidated Financial Statements of the Company for the financialyear 2020-21 together with the Auditors' Report form part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In accordance with the provisions of Section 135 of the Act and Rules framed thereunder the Company has a Corporate Social Responsibility ("CSR") Committee.The Company primarily works through Setco Foundation and also supports other NGOs towardssupporting projects to facilitate a neighborhood to ensure full access to healthcarenutrition education and opportunity for growth. We strongly believe that as a modelcorporate citizen our Corporate Social Responsibility (CSR) activities should support andrevive. It is our way of giving back to the society community and environment which hashelped us grow and thrive. Details of the CSR activities are more particularly exhibitedon Company's website at the link http://setcofoundation. org/what-we-do/.

The Corporate Social Responsibility Committee (CSR Committee) formulated andrecommended to the Board the Corporate Social Responsibility Policy (CSR Policy) ofthe Company indicating therein the CSR activities to be undertaken by the Company. The CSRPolicy has been approved by the Board of Directors.

The CSR policy framed by the Company is available on the website of the Companyhttp://www.setcoauto.com/ statutory-policies.

The disclosure as per Rule 9 of Companies (Corporate Social Responsibility Policy)Rules 2014 is made in prescribed form which is annexed to this Report as Annexure III.

HUMAN RESOURCES

Your Company takes great pride in its Human Capital and takes significant effort inhiring advancing and retaining the talent. The Company's comprehensive Human resourcestrategy takes cognizance of the key aspects of people development such as employeeengagement talent management performance management capability development andprogressive industrial relations. Training and consequent learning therefore forms animportant element of each employee's career growth. The endeavor is to build andstrengthen organizational capabilities thereby enabling the Organization to sustainattractive growth in a dynamic business environment.

Setco ensure that there is full adherence to the code of ethics and fair businesspractices. It provides an equal opportunities employees are evaluated solely on the basisof their qualifications and performance. The Human Resource function is a business partnerthat focusses on improving the way of life work culture employee engagementproductivity effectiveness and efficiency. The Company believes in developing anefficient and committed employee base that is aware and empowered.

PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WORKMEN AT WORKPLACE

In accordance with the provisions of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 the company has framed a Policy onPrevention of Sexual Harassment at Workplace and constituted an Internal ComplaintsCommittee for Prohibition Prevention and Redressal of Sexual Harassment and mattersconnected therewith or incidental thereto covering all the related aspects.

All employees (permanent contract temporary trainees) are covered under the policy.During the year under review there were no cases reported under the said scheme.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a robust vigil mechanism through its Whistle Blower Policy approved andadopted by Board of Directors of the Company in compliance with the provisions of Section177 (10) of the Act and Regulation 22 of the Listing Regulations.

The Policy also provides protection to the employees and business associates who reportunethical practices and irregularities.

Your Company has adopted a Vigil Mechanism / whistle blower Policy to enable employeesto raise concerns about unacceptable improper practices and/or any unethical practicesbeing carried out in the organisation without the knowledge of management. This WhistleBlower Policy will also be applicable to the Directors of the Company.

The Audit Committee oversees the vigil mechanism. No employee has been denied access tothe Audit Committee. The Audit Committee reviews on a quarterly basis reports made underthis policy and implements corrective actions wherever necessary. The policy has beenappropriately communicated to all the employees and posted on the Company's website at thelink http://www.setcoauto.com/ statutory-policies. No such fraud or wrongful conduct wasreported during the year under review.

RISK MANAGEMENT

The Company has a well-defined process in place to ensure appropriate identificationand mitigation of risks. Risk identification exercise is inter-woven with the annualplanning cycle which ensures both regularity and comprehensiveness. The identification andmitigation of strategic business operational and process risks are carried out for allfunctions. Your Company is committed to managing the risks in a proactive and efficientmanner.

Your Company through its risk management process strives to contain impact andlikelihood of the risks within the risk appetite as agreed from time to time with theBoard of Directors.

INDUSTRIAL RELATIONS

The relations with the employees have continued to remain cordial.

QUALITY STANDARD ACCREDIATION

Your Company is TS 16949 ISO 14001 and EMS OHSAS 18001 certified in line with theglobal requirements of the automotive sector by Bureau Veritas Certification (formerlyBVQI).

Further the Company's Unit is accredited with Environmental Management System (EMS)(ISO 14001) as well as Occupational Health Safety Standards (OHSAS 18001) and VdA 6.3Certification.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The information required under Section 197 of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are provided in separate annexure forming part of this Report as Annexure IV.

The statement containing particulars of employees as required under Section 197 of theCompanies Act 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 will be provided upon request. In terms of Section 136of the Companies Act 2013 the Report and Accounts are being sent to the Members andothers entitled thereto excluding the information on employees' particulars which isavailable for inspection by the members at the Registered Office of the Company during allworking days except on Public Holidays and National Holidays between 10.00 a.m. and 5.00p.m. upto the date of the AGM. If any member is interested in obtaining a copy thereofsuch Member may write to the Company Secretary in this regard.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:

1. The Company does not Issue equity shares with differential rights as to dividendvoting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company underany scheme save and except ESOS referred to in this Report.

3. Neither the Managing Director nor the Whole-time Directors of the Company receivedany remuneration or commission from any of its subsidiaries.

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

5. None of the Auditors of the Company have reported any fraud as specified under thesecond proviso of Section 143 (12) of the Companies Act 2013 (including any statutorymodification(s) or re-enactment(s) thereof for the time being in force).

6. The Company does not have any scheme or provision of money for the purchase of itsown shares by employees/ Directors or by trustees for the benefit of employees/ Directors.

ACKNOWLEDGEMENTS:

The Board of Directors place on record sincere gratitude and appreciation for all theemployees at all levels for their hard work solidarity cooperation and dedication duringthe year.

The Board conveys its appreciation for its customers shareholders suppliers as wellas vendors bankers business associates regulatory and government authorities for theircontinued support

For and on behalf of the Board
Harish Sheth
Chairman and Managing Director
DIN:01434459
Place: Kalol
Date: December 04 2021

.