SAL Automotive Ltd

TO THE MEMBERS

Your directors have the pleasure of presenting their 49th Annual Report along with the Audited Financial Statements for the year ended March 31, 2024.

FINANCIAL & OPERATIONAL PERFORMANCE HIGHLIGHTS

In compliance with the provisions of the Companies Act, 2013 ('Act'), and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations') the Company has prepared its financial statements as per Indian Accounting Standards (Ind AS) for the FY 2023-24. The highlights of the financial results of the Company, extracted from the audited financial statements for the FY 2023-24 and previous FY 2022-23, are as under:

(Rs. in Crores)

REVIEW OF OPERATIONS

In 2023-24, the overall Indian economy performed well, and this positive trend extended to the automotive and agri-implements sectors in which your Company operates. In the automotive sector, SAL achieved an increase in revenue, with a growth rate of 19 % as compared to the previous year and in the agriculture sector there is a de-growth of 6% as compared to previous year.

Resultant to above factors, the Company has achieved highest ever sales volume in financial year 2023-24 and achieved PBT with a 9.53 % jump in margins over previous financial year and in the Agriculture Sector there is degree of 6% as compare to the previous year.

It is important to note that your Company's performance in the automotive and agriculture segments is influenced by various factors, including economic growth, new production facilities, monsoon patterns, automation in the agri-implements sector, and the purchasing power of buyers. These factors play a significant role in shaping the performance and prospects of your Company in these sectors.

Automotive Components: -

For the year under review, the Indian automotive industry (except Two-wheeler) witnessed growth of 8% which includes Passenger Vehicle industry growth of 7.1 % and Commercial Vehicle Industry grew by 11.1% However, your company had shown growth of 30 % which includes growth in seat mechanisms for passenger vehicle of 1 % and growth of 52 % in seats for commercial vehicle.

Agriculture Implements: -

For the year under review, the Indian tractor industry had shown degrowth by 18 % and your company had recorded degrowth of 7% by achieving sales volume of 1.93 lakhs seats for tractor against previous year volume of 2.07 lakhs, and in case of Agri-implements, sales volume grew to 0.25 lakhs units against 0.24 lakhs units of previous year resulting into growth of 3%.

The revenue of your company reached to Rs. 307.51 Crore against previous year figures of Rs. 303.79 Crore showing a marginal growth of 1% and on the similar growth trend the profit before tax stood at Rs. 6.78 Crore against previous year profit before tax of Rs. 6.20 crores. Profit before depreciation, finance and tax was Rs. 13.67 Crore against previous year figure of Rs. 11.91 Crore, total comprehensive income was Rs. 4.84 Crore in comparison to Rs. 4.61 Crore of previous year which results in to earning per share of Rs. 20.21 against previous year figure of Rs. 19.21.

DIVIDEND

The Board of Directors have recommended the Final Dividend of Rs. 4.5 per share (i.e. 45% of face value of Rs. 10 each) for the financial year ended March 31, 2024, subject to the approval of the members at the ensuing Annual General Meeting. The dividend, if approved by the members of the Company, will be paid within 30 days of the Annual General Meeting. The total cash outflow on account of final dividend for the financial year 2023-24 will be Rs. 1.08 Crore.

Pursuant to the amendments introduced in the Income tax Act, 1961 vide Finance Act, 2020, w.e.f. April 1, 2020, Dividend Distribution Tax (DDT), which was used to be payable by the company, stands abolished. Instead, dividend income is now taxable in the hands of shareholders and subject to tax deduction at source (TDS) under the Income-tax Act, 1961.

RESERVES

The Company has not transferred any amount to the general reserve during the period under review

SHARE CAPITAL

The Authorised share capital of the Company during the period under review was Rs. 3,50,00,000/- (Indian Rupees Three Crores Fifty Lakhs only). The issued and paid-up Share Capital of the Company remained unchanged during the year and stood at Rs. 2,39,77,130 (Indian Rupees Two Crore Thirty Nine Lakh Seventy Seven Thousand One Hundred Thirty only) at the end of the financial year 2023-24.

There was no issue of shares with differential voting right, buy back of shares or bonus issues of shares, during the year under review.

DEPOSITS

The Company did not invite or accept any deposits from the public/ members pursuant to the provisions of Chapter V of the Act read together with the Companies (Acceptance of Deposits) Rules, 2014 and as such, no amount of principal or interest was outstanding at the end of the financial year 2023-24.

INDUSTRIAL RELATIONS

In today's dynamic business environment, the foundation of our Industrial and employee relation framework is based on the strong pillars of Employee Centricity, building and sustaining a positive work culture characterized by innovation, productivity, and competitiveness , backed with strong focus on fostering employee well-being, capability building to ensure a future ready workforce to build a performance driven organization. We ensure strong employee relations which is not just limited to manage personnel issues but it fosters a culture where employees feel valued, supported, and motivated to contribute to the company's success.

Employee Centricity

Employee centricity is one of the cornerstones of our employee relations. Our efforts are directed towards prioritizing the needs and aspirations of employees while aligning them with organizational goals. By understanding and addressing the concerns, aspirations, and motivations of the workforce, we have created an environment where employees feel valued. This involves providing clear communication channels, listening to employee feedback, and implementing policies that reflect their needs.

Positive Work Culture

Creating a positive work culture is another area of focus to maintain high employee morale and productivity. We believe in fostering a culture of respect, collaboration, and support. This is being achieved by promoting teamwork, recognizing and rewarding employee contributions, and ensuring a safe and inclusive workplace. Our leadership team also play a pivotal role here, both our managers and supervisors always lead by example, demonstrating behaviors that promote positivity and mutual respect.

Employee Well-being

Employee well-being especially having access to health care benefits, wellness programs, and a safe working environment are fundamental aspects of our employee relation framework. This includes both physical and mental health. All our HR policies are designed and periodically updated in line with the idea of providing work life balance which improves productivity and also reduces absenteeism and turnover rates.

Capability Building

Investing in capability building is vital for our company to stay competitive and be future ready. As the industry evolves, so too must the skills of its workforce.

In line with our objective of capability building and developing a future-ready workforce, we have implemented numerous training and engagement programs throughout the year. These initiatives encompass a wide range of areas, including behavioral programs for enhancing team and individual effectiveness, safety and environmental training, quality tools skill building programs, continuous improvement practices, result orientation, relationship management, and decision-making skills Our proactive and employee-centric shop floor practices have also thrived as we offer training programs, workshops, and opportunities for continuous learning which help employees to enhance their skills and stay updated with the latest technological advancements. This not only benefits the company by having a skilled workforce but also empowers employees, making them feel more confident and valued in their roles.

To be specific on building a Future-Ready Workforce and Teams, we have embarked on the journey of Talent management and rolling out the Competency Framework for our company.

The competency framework will help us to identify right talent which can be groomed and prepared for future talent needs and succession planning. Coupled with it, encouraging a culture of continuous learning, adaptability, and innovation will ensure that our company remains competitive in the long term.

Leadership Effectiveness and Performance-Driven Organization

Leadership effectiveness is a key driver of a performance-oriented organization. Our leadership team is perfectly aligned to achieving organizational goals. We believe in setting clear goals, providing regular feedback, and fostering an environment where performance is recognized and rewarded. Being a performance-driven culture we encourage employees to take ownership of their work, strive for excellence, and contribute to the company's overall success. Effective leadership ensures that the organization's vision is communicated clearly, and that employees are aligned with the company's goals.

As we move forward into FY 2024-25, we remain dedicated to nurturing a positive industrial relations environment, continuously improving our work culture, and upholding the principles of employee-centricity and proactive practices throughout our organization.

SAFETY OCCUPATIONAL HEALTH AND ENVIRONMENT

Our Company remained committed towards excellence in Safety, Occupational Health, and Environment in the year 2023-24 Safety, Occupational Health, and Environment are critical pillars in maintaining a safe and productive workplace. While we have a well-established Safety, Occupational, and Environmental Policy that prioritizes the safety of our employees, plant, equipment, and the general public and ensures compliance with all relevant statutory rules and regulations on a regular basis. Our employees are also proactive in adhering to safety protocols, reporting hazards, and participating in safety training to mitigate risks. We believe is promoting voluntary individual efforts at the work level in fostering a safety-conscious culture.

Our Organizational commitment to Safety, Occupational Health, and Environment is paramount andis equally vital, with regular audits and strict compliance ensuring adherence to industry standards and legal requirements we identify potential risks and implement corrective actions promptly as per guidelines.

Moreover, our focus on proactive and preventive measures is essential. As an organization we invest heavily in continuous training, safety drills, and the implementation of advanced safety technologies to anticipate and prevent accidents.

Additionally, we conduct statutory safety audits of our facilities as required by law and promote eco-friendly activities. As part of our ongoing commitment to improving the well-being of our employees, we regularly organize Medical Check-ups, encompassing both curative and preventive measures, to keep a strong check on any potential risk of Occupation health challenges. Furthermore, we educate our employees on Industrial Hygiene in the workplace, reinforcing our dedication to their safety and health.

By integrating these efforts into the company culture, both at the individual and organizational levels, we have created a safe, healthy, and environmentally responsible workplace.

SUSTAINABILITY INITIATIVE

In the year 2023-24, your Company maintained its steadfast commitment to environmental, social, and governance parameters. We strongly believe in sustainability, which we define as "Building enduring business by rejuvenating the environment and enabling stakeholders to grow." Throughout the year under review, we took several impactful actions across all aspects of our operations, focusing on three key pillars: Environment, Manpower, and Margins.

Under the pillar of Environment, we implemented a range of initiatives to minimize our ecological footprint and contribute to environmental preservation. This included adopting energy-efficient practices, reducing waste generation, and promoting the use of renewable resources. We actively pursued environmentally friendly alternatives and encouraged sustainable practices throughout our value chain.

In this respect we have increased the plantation of new trees in the campus, introduced the use of the LPG in our existing manufacturing process, in replacement to the HSD, which has substantially reduced and controlled the air pollution.

In terms of Manpower, we prioritized the well-being and development of our employees. We continued to invest in their training and skill enhancement, fostering a culture of learning and growth. Additionally, we emphasized diversity and inclusion, ensuring equal opportunities for all individuals within our organization. We also extended our efforts beyond our workforce by engaging with communities and supporting social initiatives.

The third pillar, Margins, underscores our commitment to responsible financial management. We implemented strategies to optimize our operations, improve cost-efficiency, and enhance profitability while maintaining ethical business practices. We believe that sustainable financial performance is crucial for long-term growth and delivering value to our stakeholders.

By focusing on these three pillars - Environment, Manpower, and Margins - we aim to create a positive impact and contribute to a more sustainable future. We remain dedicated to upholding these principles and continually seek opportunities to further enhance our ESG performance in the years ahead.

DIRECTORS AND KEY MANAGERIAL PERSONNEL DIRECTORS INDUCTIONS, RE-APPOINTMENT/RE-DESIGNATIONS, RETIREMENT & RESIGNATIONS

Mr. Rajiv Sharma (DIN: 07418337) completed his second and final term as an Independent Director of the Company and consequently ceased to be a Director of the Company effective from the close of business hours on February 2, 2024. The Board of Directors and the management of the Company express deep appreciation and gratitude to him for his extensive contribution towards the Company.

During the year Dr. Uttam Sahay (DIN: 08608518) was appointed as Non-Executive Independent Director of the Company, not liable to retire by rotation, for a term of 3 years with effect from January 31, 2024 and Mr. Rajiv Sharma (DIN: 07418337) was appointed as Non-Executive Director of the Company, liable to retire by rotation, effective from February 3, 2024, vide Special Resolution and Ordinary Resolution respectively dated April 6, 2024 passed by postal ballot.

In terms of Section 152 of the Act, Ms. Namrata Jain (DIN: 07310940), Executive Director Finance, retires by rotation at the forthcoming Annual General Meeting ("AGM") and, being eligible, offers herself for reappointment.

Apart from the aforesaid, there were no changes in the Board of Directors.

KEY MANAGERIAL PERSONNEL (KMP)

Mr. Jagdish Lal Raheja resigned from post of Chief Financial Officer and Key Managerial Personnel ("KMP") of the Company effective from closure of business hours on April 4, 2023 and Mr. Kulvinder Singh, Finance Controller, having expertise in Finance and Taxation, was designated as KMP of the Company effective from May 26, 2023.

Further, Mrs. Namrata Jain (DIN- 07310940), in addition to being Executive Director Finance, was also designated as the Chief Financial Officer ("CFO") of the Company, effective from October 4, 2023. As on the date of this report, your Company has following whole time KMP: Mr. Rama Kant Sharma, Managing Director, Mr. Gagan Kaushik, Company Secretary Ms. Namrata Jain, Executive Director Finance and CFO and Mr. Kulvinder Singh, Finance Controller

DECLARATION BY INDEPENDENT DIRECTORS

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16 of Listing Regulations and there has been no change in the circumstances which may affect their status as Independent Directors during the year under review. The Independent Directors have also confirmed that they have complied with the Company's code of conduct for the Directors and the Senior Management Personnel and also that they are not debarred from holding the office of Director pursuant to any order of SEBI or any such authority as well as they are independent of the management.

All the Independent Directors of the Company are registered in the data bank maintained with the Indian Institute of Corporate Affairs, Manesar ('IICA'). In terms of Section 150 of the Act read with Rule 6(4) of the Companies (Appointment & Qualification of Directors) Rules, 2014, the eligible Independent Directors are required to undertake online proficiency self-assessment test conducted by the IICA within a period of two (2) years from the date of inclusion of their names in the data bank. The Independent Directors, whosoever is required, shall undertake the said proficiency test.

In the opinion of the Board all independent directors possess strong sense of integrity and having requisite experience (including proficiency), qualification, skills and expertise and are independent of the management. For further details, please refer to the Corporate Governance Report.

POLICY ON NOMINATION, REMUNERATION AND BOARD DIVERSITY

The Company believes that building a diverse and inclusive culture is integral to its success. A diverse Board, among others, will enhance the quality of decisions by utilizing different skills, qualifications, professional experience and knowledge of the Board members necessary for achieving sustainable and balanced development. In terms of Listing Regulations and the Act, the Company has formulated and adopted Nomination & Remuneration Policy.

The said Policy of the Company, inter alia, provides that the Nomination and Remuneration Committee shall formulate the criteria for appointment of Executive, Non-Executive and Independent Directors on the Board of Directors of the Company and persons in the Senior Management of the Company, their remuneration including determination of qualifications, positive attributes, independence of Directors and other matters as provided under sub-section (3) of Section 178 of the Act (including any statutory modification(s) or re-enactment(s) thereof for the time being in force). The Policy also lays down broad guidelines for evaluation of performance of Board as a whole, Committees of the Board, individual Directors including the chairperson and the Independent Directors. The Policy encourages the appointment of women at senior executive levels and thereby promoting diversity. The Policy is designed to attract, recruit, retain and motivate best available talent.

During the financial year under review, no changes were carried out in the said Policy. The Nomination and Remuneration Policy is available on the website of the Company and can be accessed via. https:// salautomotive.in/policies/.

ANNUAL PERFORMANCE EVALUATION

Listing Regulations laying down the key functions of the Board, mandate that the Board shall monitor and review the Board Evaluation Process and also stipulate that the Nomination & Remuneration Committee of the Company shall lay down the evaluation criteria for performance evaluation of Independent Directors, Board of Directors, Committee and Individual Directors. Section 134 of the Act states that a formal evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. Further, Schedule IV to the Act states that performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Director being evaluated. In accordance with the aforesaid provisions, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees through structured questionnaires covering various aspects of the functioning of Board and its Committees.

Some of the performance indicators based on which the evaluation takes place are - attendance in the meetings, quality of preparation/participation, ability to provide leadership and work as team player. In addition, few criteria for independent Directors include commitment to protecting/enhancing interests of all shareholders and contribution in implementation of best governance practices. Performance criteria for Whole-time Directors includes contribution to the growth of the Company, new ideas/planning and compliances with all policies of the Company. The Board of Directors had expressed their satisfaction to the overall evaluation process.

SEPARATE MEETING OF INDEPENDENT DIRECTORS

Pursuant to Schedule IV to the Act and the Listing Regulations, 1 (one) meeting of Independent Directors was held during the year i.e. on March 19, 2024 without the attendance of Executive Directors, Non Executive Non Independent Director and members of Management and in such meeting, inter alia:

(a) reviewed the performance of non-independent Directors and the Board of Directors as a whole;

(b) reviewed the performance of the chairperson of the Company, taking into account the views of executive directors and non-executive directors and

(c) assessed the quality, quantity and timeliness of flow of information between the management of the Company and the Board of Directors that is necessary for the Board of Directors to effectively and reasonably perform their duties.

In addition, the Company encourages regular separate meetings of its Independent Directors to update them on all business-related issues and new initiatives. At such meetings, the Executive Directors, Non Executive Non Independent Director and other members of the Management make presentations on relevant issues.

BOARD MEETINGS

A calendar of Meetings is prepared and circulated in advance to the Directors. The Board met 6 (six) times during the financial year 2023-24. The gap between any two consecutive meetings of the Board of Directors of the Company did not exceed 120 days and details of the Board Meetings and the attendance of the Directors have been provided in the Corporate Governance Report that forms part of this Annual Report.

AUDIT COMMITTEE

Due to appointment of Mr. Rajiv Sharma (DIN: 07418337) as a Non-Executive Non Independent Director upon completion of the term as an Independent Director and appointment of Dr. Uttam Sahay as an Independent Director of the Company, the Audit Committee of the Company was reconstituted with effect from February 3, 2024, which now comprises of the following Directors viz. Mr. Kailash Nath Agarwal (Chairperson), Dr. Uttam Sahay (Member) and Mr. Rajiv Sharma (Member). The Company Secretary of the Company functions as the Secretary of the Committee. All the recommendations made by the Audit Committee during the year were accepted by the Board.

For further details about all the Committees of the Board of Directors of the Company, please refer the Corporate Governance Report which forms an integral part of this Annual Report.

SUBSIDIARY / ASSOCIATE & JOINT VENTURE COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

During the financial year under review, the Company did not have any subsidiary or joint venture or associate company in terms of the provisions of the Act and Listing Regulations. Hence, the Company is not required to prepare form AOC-1 with respect to performance of subsidiary or joint venture or associate company.

TRANSFER TO INVESTORS EDUCATION AND PROTECTION FUND

During the year, the Company transferred the unpaid/unclaimed dividend amounting to Rs. 76,783/- to the Investor Education and Protection Fund (IEPF) Account established by the Central Government. The Company has also uploaded the details of unpaid and unclaimed amounts lying with the Company as on March 31, 2024 on the website of the Company at https://salautomotive.in/unclaimed- dividend/.

Further, in terms Section 124(6) of the Act, read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF Rules), the Company transferred 989 equity shares to the Investor Education and Protection Fund, details of which are uploaded on the website of the Company at https://salautomotive.in/unclaimed-dividend.

Rightful claimants can lodge their claims for the dividend / share as per the applicable provisions under the IEPF Rules.

STATUTORY AUDITORS

M/s. Mangla Associates, Chartered Accountants (ICAI Firm Registration No.: 006796C), Statutory Auditors of the Company were re-appointed at the 47th AGM of the Company to hold the office as such for a period of 5 years from the conclusion of the AGM held in financial year 2022 until the conclusion of the 52nd AGM of the Company to be held in the financial year 2027.

AUDITORS' REPORT

The Auditors' Report read along with notes to accounts is self-explanatory and therefore does not call for further comments. The Auditors' Report does not contain any qualification, reservation, or adverse remark.

SECRETARIAL AUDITORS

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 had appointed M/s A. Arora and Co., a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year 2023-24. The Secretarial Audit Report is annexed herewith as Annexure A.

The Secretarial Audit Report is self- explanatory and does not contain any qualification, reservation, or adverse remark.

COST AUDITORS

The Cost Audit for financial year ended March 31, 2024, was conducted by M/s. Aggarwal Vimal & Associates (FRN.000350).

The Company has maintained accounts and records as specified under sub-section (1) of 148 of the Act.

CORPORATE SOCIAL RESPONSIBILITY

During the year under review, the provisions of Section 135 of the Act related to Corporate Social Responsibility ("CSR") became applicable on the Company. CSR involves operating Company's business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of businesses and keeping with the Company's core value of Good Corporate Citizenship, your Company is committed to display its social responsibility by taking various initiatives benefiting the society at large. These initiatives include organizing plantation of trees at various locations, awareness campaign on ill effects of tobacco, providing medicines, beds, and sheets to destitute people's home. In alignment with vision of the Company, SAL Automotive Limited through its CSR initiatives, will continue to enhance value creation in the society through its services, conduct & initiatives, so as to promote sustained growth for the society.

The Board of Directors of the Company have formulated and adopted the CSR Policy of the Company in alignment of its vision of the Company, during the year under review.

The Company contributed an amount of INR 3.19 Lakhs in PM Care Fund as part of its CSR Obligation for FY 2023-24.

Since the amount to be spent by the Company as its CSR obligation as per Section 135(5) of the Act, for the FY 2023-24, is less than INR 50 Lakhs, the requirement for constitution of CSR Committee is not applicable on the Company and accordingly the functions of such Committee are being discharged by the Board of Directors of the Company.

The Board of Directors of the Company frame, monitor and execute the CSR activities of the Company in terms of its CSR Policy. The Board further defines the parameters and observes them for effective discharge of the social responsibility of your Company. The CSR Policy of your Company outlines the Company's philosophy & the mechanism for undertaking socially useful programmes for welfare & sustainable development of the community at large as part of its duties as a responsible corporate citizen. The Board also formulates CSR annual action plan in pursuance to its Policy. The CSR Policy of the Company is available on the Company's website at https://salautomotive.in/policies/.

The Annual Report on CSR activities in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended, containing all the requisite details, is set out as Annexure "D" to this Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report for the financial year under review, as stipulated under the Listing Regulations, is presented in a separate section, forms part of this Annual Report.

CORPORATE GOVERNANCE REPORT

A report on Corporate Governance forms part of the Annual Report along with the Certificate on Corporate Governance as required under Listing Regulations.

INTERNAL FINANCIAL CONTROLS

The corporate governance polices guide the conduct of affairs of your company and clearly defines the roles, responsibilities and authorities at each level of its governance structure and key functionaries involved in governance. All essential Standard Operating Procedures (SOP) are in place and are being intermittently reviewed and revised by senior management.

Under Internal Audit program, on quarterly basis an independent external auditor conducts audit of key areas as per the pre-scheduled audit cycle on the basis of defined RCMs (Risk Control Matrix) and accordingly submits report to the management and share with the audit committee for their review. Your Company has implemented vigorous internal financial controls to ensure accurate and reliable preparation of financial statements, custom-made to the size, scale, and complexity of our operations.

These controls have been diligently assessed throughout the year, adhering to the essential components outlined in the guidance note of internal financial control over financial reporting issued by the Institute of Chartered Accountants of India.

Upon cautious examination and evaluation conducted by the management, we are pleased to report that no reportable material weaknesses or significant deficiencies were identified in the design or functioning of our internal financial controls. We are using Oracle based ERP for recording of financial transactions and reporting, including inventory records, production records, HR related records, etc., by ensuring appropriate segregation of roles & responsibilities with duly approved authority matrix.

This affirms our commitment to maintaining a strong control environment that safeguards the integrity and reliability of our financial reporting. By prioritizing the establishment and continuous evaluation of these internal controls, we uphold the highest standards of financial governance and ensure transparency in our operations. These measures provide confidence to our stakeholders, assuring them of the accuracy and completeness of our financial statements.

RISK MANAGEMENT

Your company understands the importance of various risks faced by it and has adopted a Risk Management Framework which establishes various levels of accountability within the Company. The framework covers identification, evaluation, and control measures to mitigate the identified business risk.

Your Company faces persistent pressure from the evolving market place that impacts important issues in risk management and impends margins. The Company emphasizes on those risks that threaten the achievement of business objectives over the short term to medium term. For the year under review, the Company does not anticipate any perilous risk which impends its existence.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company promotes ethical behavior in all its business activities and has put in place a mechanism for reporting illegal or unethical behavior. The Company has a Vigil mechanism and Whistle blower policy under which the persons covered under the policy including Directors and employees are free to report misuse or abuse of authority, fraud or suspected fraud, violation of Company rules, manipulations, negligence causing danger to public health and safety, misappropriation of funds, and other matters or activity on account of which the interest of the Company is affected. The reportable matters may be disclosed to the vigilance officer who operates under the supervision of the Audit Committee. Persons covered under the Policy may also report to the Chairman of the Audit Committee in appropriate cases.

During the year under review, no employee was denied access to the Chairman of the Audit Committee. No complaints were received under Vigil Mechanism & Whistle Blower Policy during the financial year 2023-24.

DETAILS OF LOANS, INVESTMENTS, SECURITY AND GUARANTEES UNDER SECTION 186

The Company has not advanced any Loan, Guarantee, Security or made any Investment covered under the provisions of Section 186 of the Act during the financial year.

ANNUAL RETURN

The Annual Return in form MGT-7 of the Company as required under Section 92 of the Act, is available on the website of the Company at https://salautomotive.in.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All related party contracts/arrangements/transactions that were entered into during the financial year 2023-24 were on an arm's length basis and were in the ordinary course of business. During that period, the Company did not enter into any contract/ arrangement/transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. There were no materially significant related party transactions made by the Company which may have a potential conflict of interest with its Promoters, Directors, Key Managerial Personnel, or other persons. All such Related Party Transactions are placed before the Audit Committee for approval.

Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable.

For further details, please refer to the notes (refer Note [2.36]) to the financial statements for the financial year 2023-24.

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

The information with regard to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and outgo in accordance with the provisions of Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is given as Annexure B forming part of this Report.

PARTICULARS OF EMPLOYEES

Disclosures relating to remuneration of Directors u/s 197(12) of the Act read with Rule 5(1), of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure C to this report. There was one employee who was in receipt of remuneration of not less than Rupees One Crore and Two Lakhs during the year ended March 31, 2024 or not less than Rupees Eight Lakh and Fifty Thousand per month, during any part of the year.

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

There were no significant material orders passed by the Regulators/ Courts/ Tribunals during the financial year 2023-24 which would impact the going concern status of the Company and its future operations.

DIRECTOR'S RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(5) of the Act, with respect to Directors' Responsibility Statement, it is confirmed that:

– in the preparation of the annual accounts for the year ended March 31, 2024, the applicable accounting standards have been followed and there are no material departures from the same.

– the Directors 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, 2024 and of the profit of the Company for the year ended on that date.

– the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

– the Directors have prepared the annual accounts of the Company on a going concern basis.

– the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

– the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

STATEMENT UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has complied with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and has in place a Policy on Prevention of Sexual Harassment at the Workplace in line with the provisions of the said Act. An Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. The policy and the Internal Complaints Committee is communicated all staff and is also available with HR Department.

No complaint of sexual harassment was received during the Financial Year 2023-24.

SECRETARIAL STANDARDS

The Company has complied with the applicable Secretarial Standards as issued by the Institute of Company Secretaries of India (ICSI).

MATERIAL CHANGES AND COMMITMENTS WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT

No material changes have occurred after the closure of financial year 2023-24 till the date of this report.

OTHER DISCLOSURES

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions/events happened on these items during the year under review: a) Issue of sweat equity or stock options. b) Changes in the nature of business activities. c) Fraud reporting by the Statutory Auditor, Secretarial Auditor and Cost Auditor of the Company. d) Application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year. e) 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.

ACKNOWLEDGMENT

Your Directors place on record their deep appreciation for the contribution made by employees at all levels with dedication, commitment, and team efforts, which helped your Company in achieving the performance during the year.

Your Directors also acknowledge with thanks the support given by the Government, bankers, shareholders, and investors at large and look forward to their continued support