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EQUITY - MARKET SCREENER

Shivam Autotech Ltd
Industry :  Auto Ancillaries
BSE Code
ISIN Demat
Book Value()
532776
INE637H01024
10.7344718
NSE Symbol
P/E(TTM)
Mar.Cap( Cr.)
SHIVAMAUTO
0
383.17
EPS(TTM)
Face Value()
Div & Yield %
0
2
0
 

As on: May 17, 2022 08:51 AM

Dear Members,

Your Directors are pleased to present before you, the 16th Annual Report on the business and operations of the Company together with the Audited Financial Statements of the Company for the Financial Year ended March 31, 2021.

Financial Highlights

The Company’s financial performance, for the year ended March 31, 2021 is summarized below:

Rupees (in Lacs)

Particulars For the year ended
March 31, 2021 March 31, 2020
Gross Sales & Other Income 49,092.82 58,887.69
Profit/(Loss) before Depreciation and Interest 8,103.24 5,263.37
Depreciation 4,872.28 5,381.24
Interest Profit/(Loss) before Taxation 5,683.56 (2,452.60) 5,306.36 (5,424.23)
Provision for Taxation (Deferred & Current) (200.04) (1,710.79)
Profit/(Loss) after Taxation (2,252.56) (3,713.44)

State of Company’s Affairs and Future Outlook

During the financial year 2020-21, revenue from operations was Rs. 48,741.15 lacs as compared to Rs. 58,783.25 lacs in 2019-20, registering a decrease of 17.08%. The year under review had two distinct themes, the first half of the year saw the impact of COVID-19 induced lockdowns wiping out majority of the first quarter of the fiscal and the second half of the year showed some recovery in automobile production, leading to growth in sales. While the sales saw a rebound in the second half of the fiscal, it was not enough to cover the loss of the first half of the year. Its crippling effect on the Indian economy is still reverberating. The automobile sector in India was already facing challenges pre-COVID times due to the transition of automobile emission norms related issues’ compliance effective from April 01, 2020. Resultant cost increases are not yet fully transcended into the pricing of automotive products. Besides the overall slowdown in Economy from pre-pandemic period has caused entire Automobile Industry to face very challenging times in last few years. Despite the challenges posed by the pandemic, the Company adapted to the changing business needs. The state of preparedness and quick countermeasures taken by the Company had started to show some improvements in the second half of FY 2020-21. Before interest, depreciation and taxes, the Company has achieved operational profit of Rs. 8,103.24 Lacs increased by 53.96% in year 2020-21 over Rs. 5,263.27 Lacs in 2019-20.

The Company remains cautiously optimistic about growth in the next financial year, as a credible recovery in the Indian economy and a positive momentum towards personal mobility is likely to further strengthen the demand for two-wheelers. The wide range of best-in-class products and consistent alignment of new technologies and services will also ensure Company’s efforts towards achieving growth impetus.

Further, the Company is constantly working on new business models and aims to go beyond the automotive sector.

Business Overview

With the state of art manufacturing facilities, the Company is functioning successively to strengthen its Customer Base. Hero MotoCorp Limited (HMCL) is the major customer. The Sales to other Customers like Hilti, Mando and Others etc. has also increased compared to last year.

By expanding the customer base company is de-risking the dependence on single customer. Four different plants in various parts of the country will enable company to cater its customer through PAN India basis.

Awards and Recognition

In its constant quest for growth and excellence, the Company is proud recipient of the following recognition as listed below during the year -

1. The Company has successfully achieved the Green Building Standards for Gold Level of Certification under the Indian Green Building Council (IGBC) Green Factory Buildings Rating System for its Rohtak and Kolar Plant in April 2021 and June 2021 respectively.

Transfer to General Reserve

During the year under review, the Company has not transferred any amount to General Reserves. The closing balance amount of Reserves and Surplus of Rs. 9,302.14 Lacs (Previous year Rs. 11,516.73 Lacs) will be retained as surplus in the Statement of Profit and Loss.

Consolidation of Manufacturing Operations of Manesar Plant

During the Financial Year 2020-21, the Company has closed the manufacturing operations which was only a small feeder operations facility at its plant situated at Plot No.1, Sector 5, IMT Manesar Gurugram, Haryana-122050 This has helped to consolidate the operations by relocating the machinery and transferring the production to Company’s fully integrated plant situated at Plot No. 9, Sector 30A, IMT Rohtak District Rohtak, Haryana-124001. There is no impact on overall operational capacities in the company.

Further the Company is pursuing an ongoing enhancement in its manufacturing margins due to more efficient production processes and elimination of duplicated overheads and thus, the said closure of manufacturing facilities does not have any material and adverse effect on operations and production of the Company, thereby providing benefit to the Company and employees and good for overall system economy, ecology and customers.

Dividend

Considering the state of economy and industry, the Board of Directors have not recommended any dividend for the financial year 2020-21.

The Register of Members and Share Transfer Books shall remain closed from Monday, September 20, 2021 to Wednesday, September 29, 2021 (both days inclusive).

Holding Company

The promoters of the Company i.e. Dayanand Munjal Investments Private Limited (DMIPL) hold 74,795,950 equity shares of Rs. 2/- each which represents 74.80% of the paid up equity capital of the Company. Your company continues to be a subsidiary company of DMIPL.

Subsidiary Companies, Joint Ventures or Associate Companies

The Company neither has any subsidiaries, joint ventures or associate companies nor any company have become or ceased to be its subsidiaries, joint ventures or associate companies during the year under review.

Management Discussion and Analysis report

A detailed discussion on the business performance and future outlook forms part of Management Discussion and Analysis Report, which is separately attached as Annexure A to this Board’s Report.

Board of Directors

a) Meeting of Board of Directors

A calendar of Meetings is prepared and circulated in advance to the Directors. During the Financial Year 2020-21, 8 meetings of the Board of Directors of the Company were held on June 10, 2020, July 28, 2020, August 31, 2020, September 25, 2020, November 09, 2020, December 03, 2020, December 21, 2020 and February 12, 2021. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 read with MCA General Circular No. 11/2020 dated March 24, 2020 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "SEBI Listing Regulations") read with SEBI Circular SEBI/HO/CFD/CMD1/ CIR/P/2020/3 dated March 19, 2020 & SEBI/HO/CFD/ CMD1/CIR/P/2020/110 dated June 26, 2020. For details of the meetings of the Board, please refer to the Corporate Governance Report, which forms part of this Annual Report.

b) Appointment/re-appointment of Directors

Dr. Anil Kumar Gupta, (DIN: 02643623) Non-Executive

Director of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment. A resolution seeking shareholders’ approval for his re-appointment forms part of the Notice.

Based on the recommendation of the Nomination and Remuneration Committee, your Company has appointed Mr. Sunil Chinubhai Vakil (DIN: 02527630) as an Additional Director of the Company in the category of Non-Executive and Independent Director considering his integrity, expertise and experience effective December 21, 2020 for a period of four years in order to fill the casual vacancy caused by the resignation of Mr. Sunil Kant Munjal, Independent Director, subject to the approval of shareholders at the 16th AGM. The notice convening the meeting sets out the details of his appointment.

Further, based on the recommendation of the Nomination and Remuneration Committee, your Company has re-appointed Mr. Neeraj Munjal (DIN: 00037792) as Managing Director of the Company in the category of Executive Director considering his rich and varied experience in the automobile industry effective

April 01, 2021 for a period of five years, subject to the approval of shareholders at the 16th AGM. The notice convening the meeting sets out the details of his re-appointment.

c) Changes in Directors and Key Managerial Personnel

During the year under review and between the end of the Financial Year and date of this report, the following are the changes in Directors and Key Managerial Personnel of the Company:

i. During the year under review, Mr. Dinesh Kumar Mishra (AGM-Finance), being one level below the directors who was in whole-time employment, has resigned from the position of whole-time Key Managerial Personnel of the Company with effect from September 02, 2020.

ii. During the year under review, Mr. Sunil Kant

Munjal (DIN: 00003902), Chairman & Independent Director has resigned from the directorship with effect from September 24, 2020. The Board placed on record its appreciation for his invaluable contribution, guidance & support during his tenure with the company.

iii. Ms. Jyothi Prasad (DIN: 06947488) was appointed as Non- Executive & Independent Director of the Company w.e.f. November 13, 2019 and her appointment as Non-Executive & Independent Director was approved at the 15th Annual General Meeting (AGM) held on September 30, 2020.

iv. Mr. Bhagwan Dass Narang (DIN: 00826573), Non-Executive and Independent Director, has been appointed as the Chairman of the Company by the Board of Directors at its meeting held on November 09, 2020.

v. Mr. Sunil Chinubhai Vakil (DIN: 02527630) is appointed as Additional (Non-Executive and Independent) Director of the Company w.e.f. December 21, 2020. The Board recommends the appointment of Mr. Sunil Chinubhai Vakil as Non-Executive and Independent Director, not liable to retire by rotation, and to hold office for a first term of 4 consecutive years with effect from December 21, 2020 to December 20, 2024 pursuant to Section 149, 152 & 161 of the Act read with rules made thereunder.

vi. The Board has recommended for re-appointment of Mr. Neeraj Munjal (DIN: 00037792) as Managing Director of the Company, liable to retire by rotation and to hold office for a period of 5 years with effect from April 01, 2021 upto March 31, 2026 pursuant to the provisions of Section 196, 197, 198 & 203 read with Schedule V of the Act read with rules made thereunder.

vii. Mr. Davendra Ujlayan (PAN AAFPU2249C) Chief Financial Officer of the Company has retired upon his attaining the age of superannuation with effect from the close of business hours of July 08, 2021 and consequently ceases to be the Chief Financial Officer and Key Managerial Personnel of the Company. The Board placed on record its appreciation for his invaluable contribution, guidance & support during his tenure with the Company.

The Company has received notice in writing, from Mr. Sunil Chinubhai Vakil under Section 160 of the Companies Act, 2013 proposing his own candidature as Director of the Company.

None of the aforesaid Directors are disqualified under Section 164(2) of the Companies Act 2013. Further, they are not debarred from holding the office of Director pursuant to order of SEBI or any other authority as required under the Circular dated 20th June, 2018 issued by The BSE Limited and The National Stock Exchange of India Limited.

Brief resume and other details of directors who is proposed to be appointed/re-appointed as a Director of your Company, have been furnished in the Explanatory Statement to the Notice of the ensuing Annual General Meeting.

The appointment/re-appointments form part of the Notice of the sixteenth Annual General Meeting and the relevant resolutions are recommended for your approval.

Key Managerial Personnel

Mr. Neeraj Munjal (DIN: 00037792), Managing Director & CEO, Mr. Davendra Ujlayan,* Chief Financial Officer, and Ms. Samta Bajaj, Company Secretary & Compliance Officer are the Key Managerial Personnel of your Company in accordance with the provisions of Section 2(51) and 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as on March 31, 2021.

d) Committees of the Board

The Company has several Committees which have been established in compliance with the requirement of the relevant provisions of applicable laws and statutes. As on March 31, 2021, the Board has three committees: The Audit Committee, Nomination and Remuneration Committee and Stakeholders’ Relationship Committee. A detailed note on the composition of the Board and its committees is provided in the Corporate Governance Report, which forms integral part of the Board’s Report.

e) Declaration by Independent Director

The Company has received necessary declaration from all Independent Directors under Section 149 (7) of the Companies Act, 2013 and Regulation 25(8) of SEBI Listing Regulations that they meet the criteria of Independence laid down in Section 149(6) of Companies Act, 2013 and Regulation 16(1) (b) of SEBI Listing Regulations.

In the opinion of the Board, Independent Directors fulfil the conditions specified in the Act, Rules made thereunder and SEBI Listing Regulations and are independent of the management.

f) Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and the Corporate Governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under the SEBI Listing Regulations, the Board is required to carry out an Annual Performance Evaluation of its own, Board’s committees and Individual Directors on the criteria as recommended by the Nomination and Remuneration Committee of the Company. The performance of the Board as a whole, it’s Committee(s) and Individual Directors including the Chairman of the Board, was evaluated by a questionnaire formulated by the Company.

The questionnaire was formulated based on the following criteria:

? The Board composition and structure,

? Effectiveness of board processes,

? Information and functioning, Knowledge & Skill

? Personal Attributes,

? The composition of committees,

? Effectiveness of committee meetings,

? The contribution of the individual director to the Board and committee meetings,

? Preparedness of Directors on the issues to be discussed,

? Meaningful and constructive contribution of Directors and their inputs in meetings.

As part of the evaluation process, the performance of Non-Independent Directors, the Chairman and the Board as a whole was conducted by the Independent Directors. The performance evaluation of the respective Committees and that of the Independent Directors was done by the Board excluding the Director being evaluated. The performance evaluation was found satisfactory.

g) Separate Meeting of Independent Directors

In terms of requirements under Schedule IV of the Companies Act 2013 and SEBI Listing Regulations, a separate meeting of Independent Directors was held on February 12, 2021. In a separate meeting of Independent Directors, performance of Non-Independent Directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors.

h) Policy on Directors’ remuneration and other details

The Company’s policy on Directors’ remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the Corporate Governance Report, which forms part of the Board’s report.

Statutory Auditors and Auditor’s Report

NSBP & Co., Chartered Accountants, New Delhi (Firm Registration no. 001075N) were appointed as the Statutory Auditors of the Company in the 12th AGM held on }September 29, 2017 for a term of five years as per the provisions of Section 139 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, who will hold the office upto the conclusion of the 17th Annual General Meeting. They have furnished a certificate confirming that they are not disqualified from continuing as Auditors of the Company.

The Report given by the Auditors, NSBP & Co., Chartered Accountants, New Delhi, on the financial statements of the Company for the financial year 2020-21, is part of the Annual Report.

Explanation to Auditors’ Remarks

The observations & remarks of Statutory Auditors in their Report on the financial statements of the Company for the financial year 2020-21 read with relevant Notes to Accounts are self-explanatory and therefore, do not require further explanation. Further, with regard to section 134(3)(ca) of the Companies Act, 2013, no frauds have been reported by the Auditors under section 143(12) of the said Act.

Share Capital

During the year under review, the Issued, Subscribed and Paid-up Equity Share Capital as on March 31, 2021 was 10 Crores shares of Rs. 2/- each amounting to Rs. 20 Crore.

a) Your Company has not issued shares with differential voting rights nor granted employee stock options nor sweat equity. And also the Company has not accepted or repaid any debentures, preference share capital and any bond & security during the financial year, and none of the Directors of the Company hold any shares or security of the Company. The Company does not have any Debentures, Preferential Shares as on March 31, 2021.

b) Your company has not made any provisions of money for purchase of its own shares by employees or by trustees for the benefit of employees during the year under review.

Deposits

During the year, the Company has not accepted any fixed deposit.

Finance

Cash and cash equivalent as at March 31, 2021 was Rs. 5,327.34 lakhs. The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.

Transfer to Investor Education and Protection Fund

During the Financial Year under review, your Company has transferred unpaid/ unclaimed dividend, amounting to Rs. 7,74,968/- for financial Year 2012-13 to the Investor Education and Protection Fund (IEPF) of the Central Government of India.

Secretarial Auditor and Secretarial Audit & Compliance Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Satyender Kumar & Associates, a proprietorship firm of Company Secretaries to undertake the Secretarial Audit of the Company for the financial year 2020-21. Secretarial Audit Report in prescribed format MR-3 are annexed as Annexure – D to this Board’s Report. Further, pursuant to SEBI Circular CIR/CFD/CMD1/27/2019 dated February 08, 2019, the Company has obtained Secretarial Compliance Report from Practising Company Secretary on compliance of all applicable SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015 and circulars/guidelines issued thereunder and the copy of the same has been submitted with the Stock exchanges within the prescribed due date.

The Board has re-appointed M/s Satyender Kumar & Associates, Company Secretary (COP No. 5189) as the Secretarial Auditor of the Company for the financial year 2021-22. Your Company had received their written consent that the appointment will be in accordance with the applicable provisions of the Companies Act, 2013 and rules framed thereunder.

Explanation to Secretarial Audit Report

The Secretarial Audit Report is self-explanatory and do not call for any further comments. There are no qualifications, reservation, adverse remark, observations, comments or disclaimer given by the Auditor in his Report except one remark that:

"During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above except that the company has obtained loan from holding company (74.8% shares) with an option of conversion of such loan into shares, without the prior approval of members as required under Section 62(3) of the Act."

Audit Committee

The Audit Committee comprises mainly of Independent Directors and the composition is as under:

Ms. Jyothi Prasad1 : Chairperson
Mr. Bhagwan Dass Narang : Member
Dr. Anil Kumar Gupta : Member
Mr. Sunil Chinubhai Vakil2 : Member

The terms of reference of the Audit Committee are wide enough to cover the matters specified for the Audit Committee under SEBI Listing Regulations as well as Section 177 of the Companies Act, 2013; the detailed terms of reference are as mentioned in the Annexure B to this Board Report.

During the year under review, the Board has accepted all recommendation of Audit Committee and accordingly no disclosure is required to be made in respect of non-acceptance of the recommendation of the Audit Committee by the Board.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee (NRC) has been constituted according to Section 178(5) of the Companies Act, 2013 and the composition is as under:

Ms. Jyothi Prasad3 : Chairperson
Mr. Bhagwan Dass Narang : Member
Dr. Anil Kumar Gupta : Member
Mr. Sunil Chinubhai Vakil4 : Member

The detailed terms of reference are as mentioned in the Annexure B to this Board’s Report.

Nomination and Remuneration Policy and Remuneration to the Directors

The Board on the recommendation of the Nomination & Remuneration Committee has framed a policy for selection and appointment of Directors, Senior Management Personnel including Key Management Personnel and afixing their remuneration.

The Nomination and Remuneration Policy of the Company is designed to attract, motivate, improve productivity and retain manpower by creating a congenial work environment, encouraging initiatives, personal growth, team work and inculcating a sense of belongingness and involvement, besides offering appropriate remuneration packages and superannuation benefits. The salient features of the Nomination and Remuneration Policy and the details of remuneration under Section 197 of the Companies Act, 2013 paid to Directors are provided in Corporate Governance Report which forms integral part of this Report.

Corporate Social Responsibility (CSR) Committee

Pursuant to Rule 3(2) of The Companies (Corporate Social Responsibility Policy) Rules, 2014, the Corporate Social Responsibility Committee of the Board has been dissolved but the company is still committed in contributing towards various social projects and institutions for the welfare and betterment of society. Thus, the existing members of the Corporate Social Responsibility Committee are hereby relieved from their duties of the Committee.

Further the details of the same are mentioned in the Annexure B to this Board’s Report.

Business Risk Management

The Company has in place a robust risk management framework that identifies and evaluates business risks and opportunities. The Company recognises that these risks need to be handled effectively and mitigated to protect the interests of the shareholders and stakeholders, to achieve business objectives and create sustainable value and growth. The Company’s risk management processes focus on ensuring that these risks are promptly identified and a mitigation action plan is developed and monitored periodically to ensure that the risks are being addressed accordingly. The Company’s risk management framework operates with the following objectives:

? Proactively identify and highlight risks to the right stakeholders

? Facilitate discussions around risk prioritisation and mitigation

? Provide a framework to assess risk capacity and appetite;

? develop systems to warn when the appetite is getting breached Last year, the lockdown imposed significant hardships on the entire human race and tested their survival. Many businesses were forced to adopt varied cost cutting measures. However, your Company ensured investments on employee well-being measures. Your Company came up with a comprehensive risk mitigation plan and a dedicated team to manage Covid-19 risk. Some of the risk mitigation steps were:

a. frequent interactions with dealers, suppliers, investors so that the ecosystem remained motivated;

b. proactive announcement of Work from Home policy, and an increased hygiene level at the workplace;

c. manufacturing at all the plants was proactively suspended, however with preparedness to restart at a short notice;

d. multiple communications sent to employees on end user awareness due to increased risk of cyber-attacks. With a multi-sourcing strategy plan, your Company was able to successfully manage this risk.

Further the Board has also identified the following risks: Over dependence on few customer base, imposition of strict environmental / safety / regulatory regulations intensifying competition, declining margins, increase in raw material prices, economic downturn, inappropriate addressing of customer grievances, and risk of natural or manmade disasters. In order to mitigate these risks, the Company has adopted the implementation of the risk management policy focusing on the elements of risks which in the opinion of the Board may threaten the existence of the company. We through qualitative products, regular improvement in productivity, controls over overhead and Labour cost, internal audit of environmental safety and regulatory compliance, IATF 16949 certification, TPM certification, capturing customer complaints and response to them, have effective risk mitigating plans.

Further, pursuant to Regulation 21(5) of SEBI (Listing Obligation and Disclosure Requirements), Regulations, 2015, the Company has dissolved the Risk Management Committee, and the Risk Management System/policy of the Company is now to be looked after by the Audit Committee. The details of the same are mentioned in the Annexure B to this Board’s Report.

Disclosure on Establishment of a Vigil Mechanism

Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors has formulated a vigil mechanism through Whistle Blower Policy for directors and employees to deal with instances of unethical behaviour, actual or suspected, fraud or violation of Company’s code of conduct or ethics policy and to report their genuine concerns or grievances to the Vigilance and Ethics Officer. Your Company hereby afirms that no Director/ Employee have been denied access to the Chairman of the Audit Committee. The policy is available on the company’s website www.shivamautotech.com.

Material Changes Affecting the Financial Position of the Company

There are no material changes and commitments affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and on the date of this report.

Your Company was able to raise the short-term/long term funds needed for its working capital related requirements. To increase the liquidity in the system, the Company has availed Emergency Credit Line Guarantee Scheme issued by the National Credit Guarantee Trustee Company Limited ("NCGTCL"), a wholly owned Trustee Company of Government of India. The Company continues to focus on judicious management of its working capital.

Significant or Material Orders passed by the Regulators

No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future.

Changes in the Nature of Business

There is no change in the nature of the business of the Company during the Financial Year 2020-21.

Annual Return

In terms of provisions of Section 92(3), 134(3)(a) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, annual return of the Company for the Financial Year ended March 31, 2020 is available under the ‘Investors’ section of the Company’s website www.shivamautotech.com.

Business Responsibility Report

SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time, mandates the top 1000 Listed Companies by market capitalisation to include Business Responsibility Report ("BR Report") in their Annual Report.

Your Company stands at no. 1168 based on market capitalisation as on March 31, 2021 issued by The National Stock Exchange of India Limited. Accordingly, a BR Report describing the initiatives taken by the Company from an environmental, social and governance perspective, does not forms part of this Report.

Particulars of Loan, Guarantees and Investments under Section 186 of the Companies Act, 2013

The Company has neither given any loans/guarantees / provided security nor have any investments been made by the Company under the provision of Section 186 of the Companies Act, 2013.

Particulars of Contracts or Arrangements with Related Parties

All contracts /arrangements/transactions entered by the Company during the financial year with the related parties were in the ordinary course of business and on arm’s length basis and do not attract the provisions of Section 188 of the Companies Act, 2013. Hence, requirement of Form AOC-2 as required under Section 188(1) of the Act is not applicable to the Company.

All related party transactions are placed before the Audit Committee for its approval. During the year under review, the Audit Committee approved transactions through the omnibus mode in accordance with the provisions of the Act and SEBI Listing Regulations.

During the year under review, the Company had not entered into any contracts /arrangements/transactions with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Suitable disclosure as required by the IND AS 24 has been made in the notes to the Financial Statements.

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

The Company continues to use the latest technologies for improving the productivity and quality of its products and components. The details of Energy, Technology, Absorption, Foreign Exchange Earnings and Outgo are attached as Annexure - C to this Board’s Report.

Statement in Respect of Adequacy of Internal Financial Control with Reference to the Financial Statements

The Company believes that Internal Control is one of the key pillars of governance, which provides freedom to the management within a framework of appropriate checks and balances. The Company has a robust internal control framework, which has been instituted considering the nature, size and risks in the business.

Your Company has adequate internal control for its business processes across departments to ensure efficient operations, compliance with internal policies, applicable laws and regulations. The internal controls are complemented, on an on-going basis, by an extensive program of internal audits being implemented throughout the year. The internal controls are designed to ensure that the financial and other records of the company are reliable for preparing financial statements and other data for maintaining the accountability of assets in conformity with established accounting principles and that the assets of the company are adequately safe-guarded against any significant misuse or loss.

The Company has robust ERP systems based on SAP platform. This ensures high degree of systems-based checks and controls. The systems and processes are continuously improved by adopting best-in-class processes and automation and implementing the latest IT tools.

The Company also has an internal audit system which is conducted by an independent firm of Chartered Accountants. The same has also been verified by the statutory auditors who have reported that all the material internal financial controls exist during the financial year 2020-21. The internal audit plan is dynamic and aligned to the business objectives of the Company which is reviewed by the Audit Committee each quarter. Further, the Audit Committee monitors the adequacy and effectiveness of your Company’s internal control framework.

Most importantly, the senior management sets the tone at the top of no tolerance to non-compliance and promotes a culture of continuous innovation and improvement.

IATF 16949/ISO 14001/ISO 45001 Accreditation

Your Company’s manufacturing facilities are located at Binola, Haridwar, Kolar and Rohtak and we continue to maintain and uphold the prestigious IATF 16949:2016, ISO 14001:2015 and ISO 45001:2018 (Occupational Health & Safety Assessment Series) certifications from reputed leading Indian and International Certification Institutions. These certifications help in continuous improvements, besides emphasis being laid on prevention of defects, reduction of wastes, prevention of near misses and to ensure maximized customer delight.

Listing

Pursuant to Clause C(9)(d) of Schedule V of SEBI Listing Regulations, 2015, the shares of your Company are listed at The National Stock Exchange of India Limited and The BSE Limited, and pursuant to the SEBI Listing Regulations, the Annual Listing fees for the year 2021-22 have been paid to them well before the due date i.e. April 30, 2021. The Company has also paid the annual custodian fees for the year 2021-22 in respect of Shares held in dematerialized mode to National Securities Depository Limited (NSDL) & Central Depository Services Limited (CDSL).

The Company has complied with the requirements of Corporate Governance as stipulated under the SEBI Listing Regulations, as applicable.

Corporate Governance

Your Company is committed to follow the highest standards and principles of Corporate Governance with all integrity and fairness. The Company always places major thrust on managing its affairs with diligence, transparency, responsibility and accountability thereby upholding the important dictum that an organisation’s corporate governance philosophy is directly linked to high performance. It has put in place an effective Corporate Governance system which ensures that provisions of the

Act and SEBI Listing Regulations are duly complied with, not only in form but also in substance.

A certificate from the Practising Company Secretary regarding the compliance of the conditions of Corporate Governance by the Company as stipulated under Chapter IV of SEBI Listing Regulations is also attached to this Report. Separate detailed chapters on Corporate Governance, additional Shareholder information and Management Discussion and Analysis are attached herewith and form part of this Report. Declaration by CEO that the Board Members and Senior Management Personnel have complied with the Code of Conduct for the financial year 2020-21 is annexed with this report.

Disclosures for Maintenance of Cost Records

Your Company is not covered under subsection (1) of Section 148 of Companies Act, 2013 for maintenance of Cost records and accordingly such accounts and records are not required to be made and maintained.

Prevention of Sexual Harassment Cases

The Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act) and the Rules thereunder. All women associates (permanent, temporary, contractual and trainees) as well as any women visiting the Company’s office premises or women service providers are covered under this Policy. The Company has constituted an "Internal Complaints Committee" under the POSH Act which is responsible for redressal of complaints related to sexual harassment. The Company aims at providing a workplace that enables employees to work without gender bias and sexual harassment. The necessary disclosure in terms of requirements of SEBI Listing Regulations in this regard is given below:

a) Number of complaints filed during the financial year – Nil

b) Number of complaints disposed of during the financial year – N.A.

c) Number of complaints pending as at the end of the financial year – N.A. Various workshops and awareness Programmes w.r.t. prevention of sexual harassment has been carried out during the FY 2020-21

Directors’ Responsibility Statement

Pursuant to the provisions of Section 134 (5) of the Companies Act, 2013, as amended, with respect to the directors’ responsibility statement, it is hereby confirmed:

(i) That in preparation of annual accounts for the financial year ended March 31, 2021, the applicable accounting standards have been followed along with proper explanation relating to the material departures;

(ii) That the directors of the company have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at March 31, 2021 and of the losses of the Company for the financial year ended March 31, 2021;

(iii) That the directors’ of the company have taken proper and sufficient care 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; and

(iv) That the directors’ of the company have prepared the annual accounts on a going concern basis.

(v) That the directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(vi) That the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Managerial Remuneration

The details required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014 are provided in Corporate Governance Report attached as Annexure – B to this Board’s Report.

Particulars of Employees

The information required under Section 197 of the Act read with Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached as Annexure - E to this Board’s Report.

Environment, Health & Safety

The Company is conscious of the importance of environmentally clean and safe operations. The Company’s policy requires conduct of operations in such a manner so as to ensure safety of all concerned, compliances of environmental regulations and preservation of natural resources.

The Company has taken an initiative to preserve environment by indulging in paper recycling activity. The paper recycling pertains to the processes of reprocessing waste paper for reuse. Recycling paper preserves trees and forests. Every ton of recycled paper saves about 17 trees. Recycled paper serves as an environmental friendly resource for paper manufacturers, saving costs and energy._The Company has recycled approx. 4029 kgs of waste paper till March 31, 2021, contributing in saving 69 nos. of trees.

The Company is committed to adhere to the highest standards of health and safety. It strives to provide its employees with a safe and healthy workplace. The Company continuous to focus on deploying behaviour based safety programmes and global safety standards across its locations. Its manufacturing units are certified with ISO-45001 (International Occupational health & safety management system and standards), abiding by the highest standards of safety. The Company regularly conducts counselling and safety review meetings for the workers to appraise and educate them on the adoption of safety measures and avoidance of unsafe practices. Safe operating procedures, standards and systems have been laid down at all manufacturing locations. Prompt medical assistances are provided to its employees. After Covid-19 was declared as a pandemic by WHO on March 11, 2020, the company suspended its operations considering the health and well-being of employees a priority. The key focus of the organisation was to engage, motivate and support employees and their families during the lockdown and to prepare them for the new normal. After resuming operations, the Company consistently emphasised on maintaining a safe working environment. In the new normal, the following were actively implemented across operations: Mandatory face mask at workplace Virtual meetings Sanitization and temperature check at entry Disinfection of workstations Distanced workstations etc.

Vaccination- Since March 2020, life has been upended completely by the global pandemic. Employees have always been the Company’s first priority and it is important to create a safe and secured ecosystem for them to thrive in. The Company conducted mass vaccination drives for employees as per GOI criteria by tie-up with vaccination centre in its plant.

Human Resource Development

The Company believes that people who feel truly associated with the organisation are the ones who perform to their peak capability. As a core part of our business strategy, it is committed to providing an environment where all of its employees feel enabled and have a sense of belonging. The

Company believes in greater diversity within the business will maximise collective capability, allowing leveraging the diversity of thought, and better reflecting and understanding the diverse customer base. This should, in turn, lead to better decision making and higher shareholder value.

The Company takes pride in the commitment, competence and dedication of its employees in all areas of the business. The Company has a structured induction process at all locations. Objective appraisal systems based on key result areas (KRAs) are in place for staff members.

Your Company treats its "human resources" as one of its most important assets. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. The Company’s thrust is on the promotion of talent internally through job rotation and job enlargement. A significant effort has also been undertaken to develop leadership as well as technical/ functional capabilities in order to meet future talent requirement.

Board Diversity Policy

The Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help us, retain our competitive advantage. The Board has adopted the Board Diversity Policy which sets out the approach to diversity of the Board of Directors.

Proceeding Under Insolvency and Bankruptcy Code, 2016

The Company has not made any application or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) ("IBC Code") during the year. Further, at the end of the year, Company does not have any proceedings related to IBC Code.

The details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof

During the year under review, the Company has not made one-time settlement therefore, the same is not applicable.

Policies

We seek to promote and follow the highest level of ethical standards in all our business transactions guided by our value system. The SEBI Listing Regulations mandated the formulation of certain policies for all listed companies. All our corporate governance policies are available on our website www.shivamautotech.com.

Following are the policies adopted by the company with their web links:

Policy Web Link
Code of Conduct http://www.shivamautotech.com/pdf/Code_of_Conduct_for_Board_Members_ and_Senior_Mangement.pdf
Prohibition of Insider Trading http://www.shivamautotech.com/Uploads/image/157imguf_ ProhibitionofInsidertrading.pdf
Payment to Non- Executive Directors http://www.shivamautotech.com/pdf/Paymentfito_Non-Executive_Directors.pdf
Nomination and Remuneration Policy http://www.shivamautotech.com/Uploads/image/163imguf_15.nrc.pdf
Board Diversity Policy http://www.shivamautotech.com/pdf/Board_Diversity_Policy.pdf
Records and Archives Policy http://www.shivamautotech.com/pdf/records_and_archives_policy.pdf
Related Party Transaction Policy http://www.shivamautotech.com/Uploads/image/161imguf_6.rpt.pdf
Anti-Harassment Policy http://www.shivamautotech.com/pdf/policy_on_prevention_of_sexual_ harassment.pdf
Risk Management Policy http://www.shivamautotech.com/pdf/Risk_Management_Policy.pdf
Whistle Blower Policy http://www.shivamautotech.com/pdf/WhistleBlowerPolicy.pdf
Familiarization Policy http://www.shivamautotech.com/pdf/Familarization_Programme_for_ Independent_Director.pdf
Policy on Determination and Disclosure of Materiality of Events http://www.shivamautotech.com/pdf/n1_Policy_on_Determination_and_ Disclosure_of_Materiality_of_Events.pdf

Secretarial Standards

During the year under review, your Company had complied with all the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

Acknowledgments

Your Company’s organisational culture upholds professionalism, integrity and continuous improvement across all functions as well as efficient utilisation of the Company’s resources for sustainable and profitable growth.

The Directors express their appreciation for the sincere co-operation and assistance of Central and State Government Authorities, Bankers, Customers, Suppliers and Business Associates. Your Directors also wish to place on record their deep sense of appreciation for the committed services by your Company’s employees. Your Directors acknowledge with gratitude the encouragement and support extended by our valued shareholders.

The Board would like to reiterate its commitment to continue to build the organization into a truly world-class enterprise in all aspects.

For and on behalf of the Board
For and on behalf of the Board Sd/-
Sd/- Charu Munjal
Neeraj Munjal Whole Time Director
Place: Gurugram Managing Director DIN:03094545
Date: August 13, 2021 DIN: 00037792