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EQUITY - MARKET SCREENER

Setco Automotive Ltd
Industry :  Auto Ancillaries
BSE Code
ISIN Demat
Book Value()
505075
INE878E01021
6.3725194
NSE Symbol
P/E(TTM)
Mar.Cap( Cr.)
SETCO
7.34
159.05
EPS(TTM)
Face Value()
Div & Yield %
1.62
2
0
 

As on: Dec 03, 2022 08:48 AM

DIRECTORS? REPORT

Dear Members,

Your Directors are pleased to present the 39th (Thirty Ninth) Annual Report on the business operations together with the audited financial statements for the financial year (FY) ended March 31, 2022. This report states compliance as per the requirements of the Companies? Act, 2013 ("the Act"), the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") and other rules and regulations as applicable to the Company.

FINANCIAL PERFORMANCE

The Company?s financial performance (standalone and consolidated) for the year ended March 31, 2022 is summarised below:

(Rs. in Lakhs Except for EPS)

Particulars Standalone Consolidated
2021-22 2020-21 2021-22 2020-21
Revenue from Operation & Other Income 16,194.11 31,928.45 44,489.97 36,791.44
Gross Profit before Finance Cost & Depreciation (636.00) 14.18 (595.57) (140.50)
Less: Finance Cost 2,516.03 4,812.47 10,832.24 5,908.33
Less: Depreciation 977.60 2182.23 3,744.67 3,370.93
Profit/(Loss) before Tax (4,130.00) (5576.99) (25,412.10) (12,708.42)
Less: Provisions for Tax Expenses (78.52) (222.66) 335.95 (378.65)
Profit/ (Loss) from continuing operations (8,949.06) (9406.23) (25,748.05) (12,329.77)
Other Comprehensive Income (153.50) (1108.69) (183.44) (880.97)
Profit/(Loss) after Taxes including other Comprehensive Income (17,481.53) (10514.92) (25,931.49) (13,210.74)
Less: Non-Controlling Interest - - (3,323.57) (322.23)
Profit/(Loss) for the Year attributable to Equity Holders of the parent (17,481.53) (10514.92) (22,607.92) (12,888.51)
Earning Per Shares (Rs.) (12.95) (7.03) (16.77) (8.98)

BUSINESS OPERATIONS

During the year under review, your Company has recorded revenue from operations of Rs. 156.74 Crore as against revenue from operations of Rs. 314.06 Crore in the previous year. EBITDA of the Company reduced from Rs. 8.95 Crore in the previous year to negative Rs. 11.57 Crore during the year under review. Main reasons for negative EBITDA was on account of supply chain contraints in the first half along with liquidity issues.

During the year under review, the company has transferred it?s Clutch manufacturing business together with the use of all the licenses, permits, brands, consents and approvals whatsoever, and all related assets (movable and immovable, tangible and intangible) and identified liabilities, contracts and employees, for a lump sum consideration of Rs. 5 lakhs (Rupees Five Lakhs only) to its subsidiary i.e. Setco Auto Systems Private Limited vide business transfer agreement dated August 31, 2021 by way of slump sale under Section 2(42C) of the Income Tax Act, 1961 with effect from September 7, 2021. A detailed discussion on the business performance and future outlook is included in Management 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. As on March 31, 2022, the issued and paid–up capital of the Company was Rs. 26,75,34,550/- divided into 13,37,67,275 equity shares of face value of Rs. 2/- each. Your Company has not issued shares with differential voting rights, nor granted employee stock options, sweat equity or bonus shares. The Company does not have any Preference Shares as on March 31, 2022.

The equity shares of the Company continue to be listed on BSE Limited ("BSE") and National Stock Exchange of India Limited ("NSE"). The stipulated listing fees for FY2022-23 have been paid to both stock exchanges.

ISSUE OF NON-CONVERTIBLE DEBENTURES (NCDs)

During the year under review, the company issued and allotted 3,500 (Three Thousand Five Hundred) Unlisted, Redeemable, Non-Convertible Debentures of the face value of Rs.10,00,000/- (Rupees Ten Lakh Only) each aggregating to Rs.350,00,00,000/- (Rupees Three Hundred Fifty Crore Only) which were transferred to subsidiary of the company i.e. Setco Auto Systems Private Limited by way of Business Transfer Agreement dated August 31, 2021.

DEBENTURE TRUSTEE

Above Non-Convertible Debentures issued by the Company were fully secured and the details of the Debenture Trustee of the Company are as under: Name of the Debenture Trustee: Vistra ITCL (India) Limited Registered Office : The IL&FS Financial Centre, Plot No. C-22, G Block, 7th Floor Bandra Kurla Complex, Bandra (East), Mumbai 400051.

DIVIDEND

In order to conserve the resources of the company and considering uncertain economic scenario due to second wave of Covid-19, the Board of Directors has not recommended any dividend, for the financial year ended on March 31, 2022.

TRANSFER TO RESERVES

The Board of Directors has decided not to transfer any amount to the reserve during FY 2021-2022 in view of loss during the financial year.

CREDIT RATING

CARE Ratings Limited has withdrawn the ratings of ‘CARE D assigned to the bank facilities of Company with effect from January 25, 2022, as the company has repaid the bank facilities and term loan in full and there is no amount outstanding under the facility/loan.

FIXED DEPOSITS

The Company has not accepted any Deposit covered under Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposit) Rules, 2014 during the year under review. Hence, the requirement for furnishing of details relating to deposits covered under Chapter V of the Act or the details of deposits which are not in compliance with the Chapter 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 under the provisions of Section 186 of the Act read with the Companies (Meeting of Board and its Powers) Rules, 2014, are provided in the Notes to Stand-alone Financial Statements of the Company, forming part of this Annual Report.

MANAGEMENT?S DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis as stipulated under the Listing Regulations is presented in a separate section forming part of this Annual Report. It provides details about the overall industry structure, global and domestic economic scenarios, developments in business operations / performance of the Company?s, internal controls and their adequacy, risk management systems and other material developments during the financial year 2021-22.

CHANGE IN NATURE OF BUSINESS, MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THIS REPORT.

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report.

SUBSIDIARIES

Performance of subsidiary Companies is elaborated in detail under ‘Management Discussion & Analysis?.

Your Company has in total six subsidiaries across the globe which includes Setco Auto Systems Private Limited (CIN: U35100GJ2010PTC062770), Lava Cast Private Ltd. (LCPL) (CIN: U27205GJ2011PTC100777), 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 from attaching the annual reports and other particulars of its subsidiary Companies with the annual report of the Company. Accordingly, the Annual Reports of the subsidiaries are not attached with this Annual Report. However, statement containing salient features of financial statements of subsidiaries as per 129 (3) of the Act, is included in this Annual Report in form AOC-1 as Annexure A to the Directors? Report. The financial statements of the subsidiary companies are available for inspection of the shareholders at the Registered Office of the Company between 11.00 a.m. to 3.00 p.m. on all working days, up to and including the date of the Meeting. The Policy for determining material subsidiaries as approved may be accessed on the Company?s website at the link https://setcoauto.com/statutory-policies/

BOARD OF DIRECTORS, COMMITTEES AND MANAGEMENT

COMPOSITION

The composition of the Board of Directors and its Committees, viz., Audit Committee, Nomination and Remuneration Committee, Stakeholders? Relationship Committee and Corporate Social Responsibility Committee, are constituted in accordance with Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR ). The Corporate Governance Report contains the composition of the Board of Directors of the Company and its Committees.

All the Directors have afirmed compliance with the Code of Conduct of the Company. The Independent Directors have afirmed that they satisfy the criteria laid down under section 149(6) of the Companies Act 2013 (Act) and Regulation 25 and other applicable regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR ), as amended from time to time. Further, in terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by the Indian Institute of Corporate A airs (IICA) and have passed the profi ciency test, if applicable to them. The Board of Directors at its first meeting of the FY 2021-22 has taken on record the declarations and confirmations submitted by the Independent Directors. During the year, the Board had not appointed any person as an Alternate Director for an Independent Director on the Board. The Company has obtained a certificate from a Company Secretary in Practice that none of the Directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as Directors of Companies by the SEBI / Ministry of Corporate A airs or any such statutory authority.

During the year under review there has been no change in the constitution of Board i.e. the structure of the Board remains the same.

DIRECTOR RETIRING BY ROTATION

In accordance with the Articles of Association of the Company and Section 152 of the Act 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 in force) Mr. Udit Sheth, Vice Chairman (DIN: 00187221) is due to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

A brief profile of Mr. Udit Sheth is provided in the Notice of the ensuing Annual General Meeting of the Company.

BOARD AND COMMITTEE MEETINGS

The schedule of meetings of the Board of Directors and Committees of the Board is circulated to the Directors in advance. During the year, nine (9) Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The gap between any two consecutive meetings of the Board of Directors was less than 120 days. The details of Committee meetings are provided in the Corporate Governance report. For eligible matters, the Board / its Committees may also accord approvals through resolutions passed by circulation, between two meetings.

MEETING OF INDEPENDENT DIRECTORS

A meeting of Independent Directors was held to assess the quality, quantity and timeliness of flow of information between the management and the Board. The Independent Directors expressed that the current flow of information and contents were good to effectively perform their duties.

DECLARATION BY INDEPENDENT DIRECTORS:

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

The Board took on record the declaration and confirmation submitted by the independent directors regarding their meeting the prescribed criteria of independence, after undertaking due assessment of the veracity of the same as required under Regulation 25 of the Listing Regulations.

PERFORMANCE EVALUATION OF BOARD

In line with the statutory requirements enshrined under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board carried out a performance evaluation. A formal evaluation of performance of the Board, it?s Committees, the Chairman and that of the individual Directors was carried out for the financial year 2021-22. The evaluation of Individual Directors was done taking into consideration the role played by each Director as a member at the respective meetings, in pursuit of the purpose and goals, participation at the meetings, independent views and judgement, initiative, ownership of value building. The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of the criteria such as the composition of Committees, effectiveness of Committee meetings, information shared and participation of members. In respect of evaluation for performance of the Board, the parameters inter alia comprised of key areas such as Board composition, competency of Directors, diversity, frequency of Board and Committee meetings, information sharing and disclosures made to the Board and its Committees. The responses received on evaluation of the Board and its Committees and that of the individual Directors were shared with the Chairman. The overall performance evaluation process for functioning of Board and its Committees was based on discussions amongst the Board Members, Committee Members and responses shared by each Member. The Board found that there was considerable value and richness in the discussions and deliberations. Based on the outcome of the evaluation, the Board and Committees have agreed for possible continuous improvisation to ensure better effectiveness and functioning of the Board and Committees.

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

FAMILIARIZATION PROGRAM FOR THE INDEPENDENT DIRECTORS

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

KEY MANAGERIAL PERSONNEL

The following persons have been designated as the Key Managerial Personnel of the Company 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

- Mrs. Urja Shah, Executive Director

- Mr. Jatinder Bir Singh Gujral, Chief Executive Officer

- Mr. Rovinder Singla, Chief Financial Officer (Resigned w.e.f. May 30, 2022)

- Mr. Hiren Vala, Company Secretary and Compliance officer.

During the year under review there were no appointments/cessations of the Key Managerial Personnel. Further Mr. Rovinder Singla, Chief Financial Officer resigned from the Company with effect from May 30, 2022.

NOMINATION AND REMUNERATION POLICY

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

The purpose of this Policy is to establish and govern the procedure as applicable inter alia in respect to the following: i. To evaluate the performance of the members of the Board. ii. To ensure remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals. iii. To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage. The Policy is available on the website of the Company - https://setcoauto.com/statutory-policies/

AUDIT AND ALLIED MATTERS

AUDIT COMMITTEE

The composition, terms of reference and meetings of the Audit Committee are disclosed in the Corporate Governance Report section of the Annual Report. The Audit Committee of the Board acts in accordance with the terms of reference, which is in compliance with the provisions of Section 177 of the Act and Regulation 18 of SEBI LODR and other applicable provisions of SEBI LODR, as amended from time to time.

STATUTORY AUDITOR

Pursuant to Sections 139, 141, 142 and all other applicable provisions, if any, of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, (including any statutory modification(s) or re-enactment thereof) and pursuant to the recommendations of the audit committee and the Board of Directors of the Company, M/s. Sharp & Tannan Associates, Chartered Accountants (Firm registration number: 0109983W) are proposed to be appointed as auditors in place of retiring auditors M/s. V. Parekh & Associates (Firm Registration Number 107488W) for a period of 3 years commencing from the conclusion of this AGM till the conclusion of the AGM to be held in the year 2025.

M/s. Sharp & Tannan Associates, Chartered Accountants (Firm registration number: 0109983W) have consented to the said appointment and confirmed that their appointment, if made, would be within the limits specified under Section 141(3) (g) of the Act. They have further confirmed that they are not disqualified to be appointed as statutory auditors in terms of the provisions of the proviso to Section 139(1), 141(2) and 141(3) of the Act and the provisions of the Companies (Audit and Auditors) Rules, 2014.

DIRECTORS? COMMENTS ON AUDITORS QUALIFICATION IN CONSOLIDATED AUDITORS REPORT:

The Setco MEA, DMCC, foreign subsidiary has prepared its financial statement on a going concern basis. However, the foreign subsidiary has eroded it entire net-worth due to accumulated losses. The Company will continue to support this subsidiary and propose to close its operations after compliance of permissions and procedure.

COST AUDIT & MAINTENANCE OF COST RECORDS

The appointment of Cost Auditor is not applicable to the Company under Companies (Cost Records and Audit) Rules, 2014. Further, the maintenance of cost records as prescribed under provisions of Sec 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company.

SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT

YourCompanyhasundertakenSecretarialAuditforthefinancialyear2021-22which,interalia,includesauditofcompliancewith the Companies Act, 2013 and the Rules made under the Act, SEBI Listing Regulations and applicable Regulations prescribed by the Securities and Exchange Board of India and Secretarial Standards issued by the Institute of the Company Secretaries of India. Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) 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 Secretarial Audit of the Company for financial year 2021-22. The Secretarial Audit Report for the financial year ended March 31, 2022 is annexed herewith marked as Annexure B in Form MR-3 to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. Pursuant to Regulation 24A of the Listing Regulations, the Company has obtained Annual Secretarial Compliance Report from M/s. P. P. Shah & Co. on compliance of all applicable SEBI Regulations and circulars / guidelines issued there under and the same were submitted with the Stock Exchanges.

SECRETARIAL AUDIT OF MATERIAL UNLISTED INDIAN SUBSIDIARY

Pursuant to provisions of Regulation 24A of SEBI Listing Regulations, Secretarial Audit was undertaken for our material unlisted subsidiary – Lava Cast Private Limited. The Secretarial Audit Report for aforesaid material unlisted subsidiary company is available on companys website i.e. www.setcoauto.com.

SECRETARIAL STANDARDS

The Directors state that applicable Secretarial Standards i.e. SS -1 and SS -2, relating to ‘Meeting of the Board of Directors? and ‘General Meeting?, respectively, have been duly followed by the Company.

DIRECTORS? RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors confirm that: i. in the preparation of the annual accounts for the financial year ended 31st March, 2022, the applicable accounting standards and Schedule III of the Companies Act, 2013, have been followed and there are no material departures from the same; ii. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of a airs of your Company as at 31st March, 2022 and of the profit and loss of the Company for the financial year ended 31st March, 2022; iii. 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; iv. the annual accounts have been prepared on a ‘going concern? basis; v. proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and were operating effectively; and proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

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

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. The transactions entered into pursuant to the omnibus approval so granted and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly and annual basis. There were no materially significant transactions with the related parties during the financial year, which were in conflict with the interest of the Company and hence, enclosing of Form AOC-2 is not required. Suitable disclosure as required by the Accounting Standard (AS-18) has been made in the notes to the Financial Statements.

The Policy on materiality of related party transactions and dealing with related party transactions 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.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In accordance with the provisions of Section 135 of the Act and Rules framed there under, the Company has a Corporate Social Responsibility ("CSR") Committee. The Company primarily works through Setco Foundation and also supports other NGOs, towards supporting projects to facilitate a neighborhood to ensure full access to healthcare, nutrition, education and opportunity for growth. We strongly believe that, as a model corporate citizen, our Corporate Social Responsibility (CSR) activities should support and revive. It is our way of giving back to the society, community and environment which has helped us grow and thrive. Details of the CSR activities are more particularly exhibited on Company?s website at the link http://setcofoundation.org/what-we-do/. The Corporate Social Responsibility Committee (CSR Committee) formulated and recommended to the Board, the Corporate Social Responsibility Policy (CSR Policy) of the Company indicating therein the CSR activities to be undertaken by the Company. The CSR Policy has been approved by the Board of Directors.

The CSR policy framed by the Company is available on the website of the Company http://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 C.

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. To this extent, employees and operators are regularly educated about saving energy. b. Technology Absorption: The Company?s product i.e. clutches for commercial vehicles are manufactured under the proprietary technology and heritage ‘Lipe? Brand. Most of the components for manufacturing clutches are procured indigenously except for certain critical components, for offering better quality at a competitive price to customers, being imported. c. Foreign Exchange Earnings and Outgo: Details of foreign exchange earnings and outgo during the financial year 2021-22, are provided in the Notes to Standalone Financial Statements of the Company, forming part of this Annual Report.

CORPORATE GOVERNANCE

We comply with the Securities and Exchange Board of India (SEBI)?s guidelines on Corporate Governance. A report on Corporate Governance alongwith a certificate from the Secretarial Auditors of the Company regarding the compliance with provisions of corporate governance as stipulated under Schedule V of the Listing Regulations forms a part of this Annual Report. All Board members and senior management personnel have afirmed compliance with the Code of Conduct for the year 2021-22. 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) certifi cation as required under SEBI Listing Regulations and the said certificate is contained in this Annual Report.

RISK MANAGEMENT

The Company has a well-defi ned process in place to ensure appropriate identification and mitigation of risks. Risk iden-tifi cation exercise is inter-woven with the annual planning cycle which ensures both regularity and comprehensiveness. The identification and mitigation of strategic, business, operational and process risks are carried out for all functions. Your Company is committed to managing the risks in a proactive and efficient manner.

Your Company, through its risk management process, strives to contain impact and likelihood of the risks within the risk appetite as agreed from time to time with the Board of Directors.

EXTRACT OF ANNUAL RETURN

In accordance with the Companies Act, 2013, the annual return in the prescribed format is available at https://setcoauto. com/annual-reports/.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

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

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

INTERNAL FINANCIAL CONTROLS

The Company has appropriate internal control system in place to ensure reliability of financial reporting, orderly and e -cient conduct of business, compliance with policies, procedures, safeguarding of assets and economical and efficient use of resources. Appropriate review and control mechanisms are in place to ensure that such control systems are adequate and operate effectively. Audit Committee and the Board review these internal control systems to ensure they remain effective and are achieving their intended purpose. The Company?s internal audit team conducts periodic audits, checks and has laid down controls to prevent, detect and correct 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 Indian Accounting Standards (Ind AS) notified under section 133 of the Act [Companies (Indian Accounting 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 (Listing Obligations and Disclosure Requirements) Regulations, 2015 and applicable Accounting Standards, the Audited Consolidated Financial Statements of the Company for the financial year 2021-22, together with the Auditors? Report form part of this Annual Report.

HUMAN RESOURCES

Your Company takes great pride in its Human Capital and takes significant e ort in hiring, advancing and retaining the talent. The Company?s comprehensive Human resource strategy takes cognizance of the key aspects of people development such as employee engagement, talent management, performance management capability development and progressive industrial relations. Training and consequent learning, therefore, forms an important element of each employee?s career growth. The endeavor is to build and strengthen organizational capabilities thereby enabling the Organization to sustain attractive growth in a dynamic business environment.

Setco ensure that there is full adherence to the code of ethics and fair business practices. It provides an equal opportunities, employees are evaluated solely on the basis of their qualifications and performance. The Human Resource function is a business partner that focuses on improving the way of life, work culture, employee engagement, productivity, e effectiveness and efficiency. The Company believes in developing an efficient 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 on Prevention of Sexual Harassment at Workplace and constituted an Internal Complaints Committee for Prohibition, Prevention and Redressal of Sexual Harassment and matters connected 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 and adopted by Board of Directors of the Company in compliance with the provisions of Section 177 (10) of the Act and Regulation 22 of the Listing Regulations. The Policy also provides protection to the employees and business associates who report unethical practices and irregularities.

Your Company has adopted a Vigil Mechanism / whistle blower Policy to enable employees to raise concerns about unacceptable, improper practices and/or any unethical practices being carried out in the organisation without the knowledge of management. This Whistle Blower Policy will also be applicable to the Directors of the Company. The Audit Committee oversees the vigil mechanism. No employee has been denied access to the Audit Committee. The Audit Committee reviews on a quarterly basis, reports made under this policy and implements corrective actions, wherever necessary. The policy has been appropriately communicated to all the employees and posted on the Company?s website at the link http://www.setcoauto.com/statutory-policies. No such fraud or wrongful conduct was reported during the year under review.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

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

INDUSTRIAL RELATIONS

The relations with the employees have continued to remain cordial.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The information required under Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in separate annexure forming part of this Report as Annexure D.

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

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following 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 dividend, voting or otherwise.

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

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

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

5. The Company does not have any scheme or provision of money for the purchase of its own 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 the employees at all levels for their hard work, solidarity, cooperation and dedication during the year.

The Board conveys its appreciation for its customers, shareholders, suppliers as well as vendors, bankers, business associates, regulatory and government authorities for their continued support.

For and on behalf of the Board
Harish Sheth
Place: Kalol Chairman and Managing Director
Date: August 10, 2022 DIN: 01434459