SAL Automotive Ltd Directors Report.

Your Directors have the pleasure of presenting their 45th Annual Report together with the Audited Financial Statements for the year ended March 31,2020.


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 2019-20. The highlights of the financial results of the Company, extracted from the audited financial statements for the FY 2019-20 and previous year FY 2018-19, are as under:

(Rs. in Crores)

Year ended 31st March, 2020 Year ended 31st March, 2019
Net Revenue from Operations 85.47 130.65
Other Income 1.23 0.83
Total Revenue 86.70 131.48
Profit before Depreciation, Finance Charges and Tax 0.61 6.54
Finance Costs 0.39 0.35
Depreciation & Amortization Expense 1.44 1.37
Exceptional Items 3.06 -
Profit Before Tax 1.84 4.82
Tax Provision
- Current 0.05 1.04
- Deferred 0.54 0.31
Profit After Tax 1.25 3.47
Other Comprehensive Income 0.04 (0.003)
Total Comprehensive Income 1.29 3.47
Surplus - Opening Balance after adjustment for carrying value of assets 12.31 10.14
Surplus available for appropriation 13.60 13.61
Dividend paid on Equity Shares 1.08 1.08
Dividend Distribution Tax 0.22 0.22
Surplus - Closing Balance 12.30 12.31


Our Company is dependent on auto and agriculture sector which in turn is influenced by various factors like economic growth, monsoon, etc. impacting the purchasing power of the buyers of the automobiles. Demand is derived from original equipment manufacturers (OEM) as well as the replacement market. The agricultural implement segment too is predominantly dependent on monsoon among other factors.

After witnessing a boom lasting several years in the automotive industry, both passenger vehicle and commercial vehicle segments witnessed sustained pressure on demand during the year 2019-20 due to overall slowdown. As per Society of Indian Automobile Manufacturers (SIAM), domestic sales for passenger vehicles and commercial vehicles which stood at Rs 33.77 lakh and Rs 10.07 lakh in the year 2018-19 dropped to Rs 27.74 lakh and Rs 7.18 lakh in the year 2019-20, thereby registering a degrowth of 17.86% and 28.70% respectively. Exports of passenger vehicles remained flat while it dropped by around 40% for commercial vehicles. Total sales of tractors (exports included) dropped by 11 % to Rs 7.81 lakh in financial year 2019-20 compared to Rs 8.78 lakh in the previous year. Your Company manufactures motivators, sales number of which too have been adversely impacted during the year.

In the above backdrop, total net revenue from operations for the financial year 2019-20 declined to Rs.85.47 crore against the previous years revenue of Rs.130.65 crore. Profit before tax for the year stands at Rs.1.84 crore (previous year Rs. 4.82 crore), which is primarily due to decline in sales volume and change in product mix. Profit after tax for the year was Rs. 1.25 crore (previous year Rs. 3.47 crore) which gives an Earning per Share (EPS) of Rs. 5.40 (previous year - Rs. 14.48).


The Directors are pleased to recommend for your consideration and approval of dividend amounting to Rs. 3.50 i.e. @ 35% per equity share of Rs. 10/- each fully paid up, for the financial year 2019-20. The dividend, if approved, would involve a cash outflow of Rs. 0.84 crore. The dividend is now taxable in the hands of shareholders and dividend distribution tax stands abolished with effect from the financial year 2020-21.


The Board has not proposed transfer of any amount to the General Reserve for the financial year ended March 31,2020.


The fund position of the Company had witnessed some stress due to decline in sales revenue and hence cash from operations activities before working capital changes was negative by Rs 0.50 Crore, against previous year positive cash flow of Rs 5.81 Crore. Net movement in cash and cash equivalent was negative by Rs 1.01 Crore, against previous year increase of Rs 1.37 Crore.


The issued and paid-up Share Capital of the Company remained unchanged during the year and stood at Rs.2.39 Crore at the end of the financial year 2019-20.

There were no instances of issue of shares with differential voting right, buy back of shares or bonus issues of shares during the year.


The Company has not accepted any deposit and as such, no amount of principal or interest was outstanding as at the end of the financial year.


The Company has a highly committed, loyal and dedicated team. The Company promotes an atmosphere which encourages learning and informal communication within the organization. The Company is having Performance Management System (PMS) to objectively measure the performance of the individual and the organization. The overall remuneration structure is linked with PMS. The Company also has a training need identification system in place for achieving the desired level of the skill and talent, and further enhancing the learning and competency level of the employees from time to time. This has made a significant contribution to the Companys business.

Industrial relations were cordial during the year under review. Management and the workers team meets regularly on periodical intervals to discuss the possibilities for improvement in productivity and to further strengthen the relationship between management and workers for smooth running of operations.


Your Company is committed towards excellence in Safety, Occupational Health and Environment. This is also to ensure sustainable business growth. The Company has a well-established Safety, Occupational and Environmental Policy which inter alia ensures safety of employees, plant, equipment and public at large by ensuring compliance with all statutory rules and regulations on regular basis. Your Company also imparts training to its employees as per the predefined training calendar, carries out statutory safety audits of its facilities as per legal requirement and promotes eco-friendly activities. In reiteration of its commitment to improve the well-being of the employees, Medical Check-ups, both curative and preventive have been organized regularly, including educating the employees on Industrial Hygiene at the workplace. The Companys Plant is ISO 14001: 2015 and OHSAS 18001: 2007 certified.


Spread of Covid-19 across the world since the start of this calendar year 2020 had impacted the global economy, commercial and industrial activities badly. Sustenance/ revamping of economic activities have become a challenge for the Governments, business houses and the common citizen.

After imposition of the lockdown in the country by the Central Govt. during last week of March 2020 and subsequent extension of lockdown by the Centre and State govts, Company made a roadmap to face the challenges and threats caused by the Covid-19 pandemic in the month of April 2020 and started compliances with the statutory guidelines issued by the Central and State Government for resuming the routine manufacturing activities in the first week of May 2020.

Company while complying all the guidelines and SOPs issued by the Ministry of Home affairs from time to time, had organized and imparted the regular training programs and continuing the same for the safety of our human resources and at the suppliers end to ensure the consistency in production activities of the business of the organization keeping it safe from the current and future risks and challenges.

The management is working on mitigating the impact of Covid-19 pandemic and also sharpening the skills to emerge as a stronger and more agile player.


Your Company is conscious of its responsibility towards preservation of natural resources and continuously taking various initiatives to reduce the consumption of electricity and water. Suggestions given by the energy audit team are in under pipeline like alternative source of fuel in powder coating shop, Heat treatment shop, Pre-treatment shop for significant savings in energy.



There were no changes in the Board of Directors during the year under review, except Mr. Jeevan Mahaldar, non-executive Director of the Company who resigned w.e.f. April 24, 2019.

In terms of Section 152 of the Companies Act, 2013 ("Act"), Mrs. Namrata Jain (DIN: 07310940) shall retire by rotation at the forthcoming Annual General Meeting ("AGM") and being eligible, offers herself for re-appointment.

Mr. Jai Bhagwan Kapil (DIN: 01894348), erstwhile Chairman and Independent Director of the Company passed away on June 25, 2020. The Board expresses its condolences and sorrow for his untimely demise. The

Board places on record their deep appreciation for his valuable guidance and contribution as the Chairman, Director and member of various committees of the Board.

Thereafter, on the recommendation of the Nomination and Remuneration Committee, the Board appointed Mr. Kailash Nath Agrrawal (DIN: 08829437) as an additional (independent) director on the Board, w.e.f. 20th August, 2020, who shall hold office up to the ensuing Annual General Meeting (AGM). His appointment / regularization is recommended for members approval and the necessary resolution(s) to this effect forms part of the Notice of the ensuing AGM.


Mr. Rama Kant Sharma, Managing Director, Mr. Jagdish Lal Raheja, Chief Financial Officer and Mr. Gagan Kaushik, Company Secretary are the Key Managerial Personnel (KMP) of the Company as per the Act.

Mr. Jeevan Mahaldar, Non-Executive Director, ceased to the KMP, consequent to his resignation on 24 April 2019.


All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 of Listing Regulations and there has been no change in the circumstances which may affect their status as Independent Director during the year. The Independent Directors have also confirmed that they have complied with the Companys code of conduct for Directors and Senior Management Personnel and also that they are not debarred from holding the office of director pursuant to any SEBI order or any such authority.

All the Independent Directors of the Company have registered themselves 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 Independent Directors are required to undertake online proficiency self-assessment test conducted by the IICA within a period of one (1) year 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, qualification and expertise. For further details, please refer Corporate Governance Report.


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. Accordingly, the Company has formulated and adopted the Nomination and Remuneration Policy in accordance with the provisions of Companies Act, 2013 read with the Rules issued thereunder and the Listing Regulations. During the financial year under review, no changes have been carried out in the said Policy. The Nomination and Remuneration Policy is annexed herewith as Annexure A.


Pursuant to the provisions of the Act and Listing Regulations, 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 Board Committees. The exercise was carried out through a structured evaluation process covering various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committees, leadership attribute of directors through vision and values, strategic thinking and decision making, adequacy of business strategy, etc.

The performance evaluation of the Independent Directors was done by the entire Board excluding the Directors being evaluated. The performance evaluation of the Board as a whole and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

Further, the evaluation process confirms that the Board and its Committees continue to operate effectively, and the performance of the Directors is satisfactory.

Performance of the Board, its Committees and Individual Directors is evaluated and disclosed in the Corporate Governance Report forming part of this Annual Report.


A calendar of Meetings is prepared and circulated in advance to the Directors. The Board met 6 times in the financial year 2019-20. The period between any two consecutive meetings of the Board of Directors of the Company was not more than 120 days and details of the Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report that forms part of this Annual Report.


During and as at the end of the financial year under review, the Audit Committee comprised of the following Directors viz. Mr. Jai Bhagwan Kapil (Chairman of the Committee), Mr. Rajiv Sharma and Mr. Rama Kant Sharma. The Company Secretary of the Company is the Secretary of the Committee. All the recommendations made by the Audit Committee 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.


During the financial year under review, the Company was not having any subsidiary or joint venture or associate company in terms of the provisions of the Act.


During the year, the Company has transferred the unpaid/unclaimed dividend amounting to Rs. 50,292 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 September 13, 2019 (date of last Annual General Meeting) on the website of the Company dividend/.

Further, in terms Section 124(6) read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF Rules), as amended, the Company has transferred 372 equity Shares to the demat account of Investor Education and Protection Fund, details of which are uploaded on the website of the Company

The shareholders whose unpaid dividend / shares are transferred to the IEPF can claim the same by filing the prescribed Form as per the applicable provisions under the IEPF Rules.


M/s. Mangla Associates, Chartered Accountants (ICAI Firm Registration No.-006796C), Statutory Auditors of the Company were appointed at the 42nd AGM of the Company from the conclusion of the AGM held in year 2017 until the conclusion of the AGM of the Company to be held in year 2022.


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.


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 2019-20. The Secretarial Audit Report is annexed herewith as Annexure B.

The Secretarial Audit Report does not contain any qualification, reservation, or adverse remark.


The Cost Audit for financial year ended March 31,2019 was conducted by M/s. Aggarwal Vimal & Associates (M. No.000350). The said Cost Audit Report was filed on September 04, 2019.

Based on the recommendations of the Audit Committee and confirmation that the appointment, if approved, will be within the limits of Section 141 (3)(g) of the Companies Act, 2013 and are of independent relationship with the Company, the Board had approved the reappointment of M/s. Aggarwal Vimal & Associates (M.No.000350), as the Cost Auditors of the Company for the financial year 2020-21 on a remuneration of Rs. 50,000 (Rupees Fifty Thousand only) applicable taxes and out of pocket expenses that may be incurred by them during the course of audit. As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the members in a general meeting for their ratification. Accordingly, a resolution seeking members ratification for the remuneration payable to M/s Aggarwal Vimal & Associates Cost Auditors is included in the Notice convening the ensuing Annual General Meeting.

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


During the year under review, the Company was not covered under the provisions of Section 135 of the Companies Act, 2013 related to Corporate Social Responsibility, but keeping with the Companys 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 peoples home etc.


The Management Discussion and Analysis Report for the financial year under review, as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is presented in a separate section, forms part of this Annual Report.


A report on Corporate Governance forms part of the Annual Report along with the Certificate on Corporate Governance as required under Listing Regulations. The Practicing Company Secretaries certificate for the financial year 2019-20 does not contain any qualifications, reservations, or adverse remarks.


The Company has laid down adequate internal financial controls with reference to financial statements, commensurate with the size, scale and complexity of its operations. During the year, such controls were tested and no reportable material weakness in their operating effectiveness was observed. An internal audit program covers various activities and periodical reports are submitted to the management and shared with the audit committee of the Board.

The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures.


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.

You Company faces constant pressure from the evolving marketplace that impacts important issues in risk management and threatens profit margins. The Company emphasizes on those risks that threaten the achievement of business objectives of the Group over the short to medium term. For the year under review, the Company does not foresee any critical risk which threatens its existence.


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.

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 2019-20.


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


The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure C.

The Annual Return in form MGT-7 for the financial year ended March 31,2020, as required under Section 92 of the Companies Act, 2013, will be available on the website of the Company at


All related party contracts/arrangements/transactions that were entered into during the financial year were on an arms length basis and were in the ordinary course of business. During the financial year, the Company had not entered 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 the interest with its Promoters, Directors, Key Managerial Personnel, or other persons. All such Related Party transactions are placed before the Audit Committee for approval, wherever applicable.

All related party transactions are mentioned in the notes (refer Note 2.36) to the accounts. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable.


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 Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given as Annexure D forming part of this Report.


Disclosures relating to remuneration of Directors u/s 197(12) of the Companies Act, 2013 read with Rule 5(1) & 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure E to this report. There was no employee who was in receipt of remuneration of not less than Rupees one crore and two lakh during the year ended March 31,2020 or not less than Rupees eight lakh and fifty thousand per month, during any part of the year.


There were no significant material orders passed by the Regulators/ Courts/ Tribunals during the financial year 2019-20 which would impact the going concern status of the Company and its future operations.


Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, with respect to Directors Responsibility Statement, it is confirmed that:

- in the preparation of the annual accounts for the year ended March 31,2020, 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 31,2020 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 Companies Act, 2013 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.


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 announced to all staff and is available with HR Department.

No complaint of sexual harassment was received during the Financial Year 2019-20.


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


Pursuant to the Agreement entered between b4S Solutions Private Limited (b4S) and Mahindra & Mahindra Limited (M&M), b4S acquired the Company by purchasing the entire stake held by M&M in the year 2016. It was mutually agreed between the parties thereto that the current name of the Company (Swaraj Automotives Ltd) shall be changed from the financial year 2019-20. In reference to the covenants stated in the aforesaid agreement, Company has obtained the approval of its members for change of its name from "Swaraj Automotives Limited" to "SAL Automotive Limited" in the Extra-ordinary General Meeting held on May 24, 2019. The Company has received Registrar of Companies ("ROC") approval for name change on 4th June 2019 and from Stock Exchange BSE limited on 27th June 2019. The Company adopted new name i.e. SAL Automotive Limited from 1st July 2019.


Due to spread of COVID-19 and subsequent lockdowns announced by the government of India and state governments w.e.f. 22nd March 2020, company operations were hugely affected and also impacted financial position of the company, operations were started partly from 5th May 2020 but it will take time to return to Pre-COVID level, hence, net impact of the COVID-19 will be assessed once operation will return back to normalcy.


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 equity shares with differential voting rights or sweat equity or stock options.

b) Changes in the nature of business activities.

c) Fraud reporting by the auditors.


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.

Place : Ghaziabad RAJIV SHARMA
Date : 20th August, 2020 Chairman