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SAL Automotive Ltd Directors Report

Jul 12, 2024|03:40:00 PM

SAL Automotive Ltd Share Price directors Report

Your directors have the pleasure of presenting their 48th Annual Report along with the Audited Financial Statements for the year ended March 31, 2023.


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 2022-23. The highlights of the financial results of the Company, extracted from the audited financial statements for the FY 2022-23 and FY 2021-22, are as under:

(Rs. in Crores)

Particulars Year ended 31st March, 2023 Year ended 31st March, 2022
Net Revenue from Operations 303.79 150.58
Other Income 1.53 1.54
Total Revenue 305.32 152.12
Profit before Depreciation, Finance Charges and Tax 11.91 0.27
Finance Costs 2.64 1.14
Depreciation & Amortization Expense 3.08 2.12
Exceptional Items --
Profit Before Tax 6.19 (2.99)
Tax Provision
– Current 0.17
– Deferred 1.32 (0.66)
Profit After Tax 4.70 (2.33)
Other Comprehensive Income (0.09) (0.04)
Total Comprehensive Income 4.61 (2.37)

In 2022-23, the overall Indian economy performed well, and this positive trend extended to the automotive and agriculture sectors in which your company operates.

In the automotive segment, SAL achieved a significant increase in revenue, with a growth rate of 100.71% compared to the previous year. Similarly, in the agriculture segment, SAL experienced remarkable revenue growth of more than 115% over the previous year.

During the year your company started production in new shed at Nabha plant which increase production capacity of rotavator from 1000 to 3000 per month.

Resultant to above factors, Company has achieved highest ever sales volume in financial year 2022-23 and achieved PBT with a 300% jump in margins over previous financial year.

It is important to note that your companys performance in the automotive and agriculture segments is influenced by various factors, including economic growth, new production facilities, monsoon patterns, automation in the agricultural 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 25.5 % which includes Passenger Vehicle industry growth of 25.5 % and Commercial Vehicle Industry grew by 25.2 %. On the same lines, your company had shown growth of 40.2% which includes growth in seat mechanisms for passenger vehicle of 40.3% and growth of 34.3% in seats for commercial vehicle.

Agriculture Implements :-

For the year under review, the Indian tractor industry had grown by 14.4 % and whereas your company had achieved sales volume of 2.07 lakhs seats for tractor against previous year volume of 1.77 lakhs, and in case of Agri-implements, sales volume grew to 0.24 lakhs units, against 0.07 lakhs units, of previous year resulting into growth of 256 %.

The revenue of your company reached to Rs. 303.79 Crore against previous year figures of Rs. 150.58 Crore showing a tremendous growth of 102% and on the similar growth trend the profit before tax stood at robust of Rs. 6.20 Crore against previous year loss of Rs. 3.00 Crore. Profit before depreciation, finance and tax was Rs. 11.91 Crore against previous year figure of Rs. 0.27 Crore, total comprehensive income was Rs. 4.61 Crore in comparison to Rs. (2.37) Crore of previous year which results in to earning per share of Rs. 19.21/- against previous year figure of Rs. (9.91).


The Board of Directors have recommended an Equity Dividend of 40% (Rs. 4 per share of Rs. 10 each) for the financial year ended 31st March, 2023. The dividend, if approved by the members of the Company will be paid within 30 days of the Annual General Meeting.


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 FY 2022-23.

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 at the end of the financial year.


During FY 2022-23, the Company continued to witness a highly positive industrial relations scenario at all four locations. Our unwavering focus on proactive and employee-centric practices has contributed to this favorable environment. We have been successful in fostering a transformational work culture that aims to engage and inspire our workforce, fostering innovation, productivity, and competitiveness on the shop floor. 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 thrived, thanks to our emphasis on transparent communication regarding our business goals and the effective resolution of concerns. We firmly believe that our employees are the most valuable assets of our company, forming the cornerstone of our employee relations approach. Through an open-door policy and constant dialogue, we strive to create win-win situations, building trust and harmony within our organization.

As we move forward into FY 2022-23, 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.


Our Company remained committed towards excellence in Safety, Occupational Health, and Environment in FY 2022-23. This commitment is essential for ensuring sustainable business growth. We have a well-established Safety, Occupational, and Environmental Policy that prioritizes the safety of our employees, plant, equipment, and the general public. Our policy ensures compliance with all relevant statutory rules and regulations on a regular basis.

The Environmental change demonstrates our managements commitment to Occupational Health and Safety (OH&S) management systems. Our efforts, along with our voluntary commitments, have enabled us to implement various initiatives in line with the new normal guidelines, focusing on overall health and hygiene. To support our employees, we provide training based on a predefined training calendar. 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 heath changes. Furthermore, we educate our employees on Industrial Hygiene in the workplace, reinforcing our dedication to their safety and health.


In the year 2022-23, 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 LPG in our existing manufacturing process, in replacement to the HSD, which has substatianlly 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 Envoirmental, Social and Governance (ESG) performance in the years ahead.



The Company has appointed Ms. Namrata Jain (DIN : 07310940), Non-Executive Non-Independent Director of the Company, as the Whole- time Director of the Company designated as Executive Director- Finance for a period of three (3) years effective from November 11, 2022, vide special resolution dated January 21, 2023 passed by postal ballot.

In terms of Section 152 of the Companies Act, 2013 ("Act"), Mr. Jamil Ahmad (DIN: 07171910) Non-Executive Non-Independent Director retires by rotation at the forthcoming Annual General Meeting ("AGM") and being eligible, offers himself for re-appointment.

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


Mr. Jagdish Lal Raheja tendered his resignation from post of Chief Financial Officer of the Company effective from closure of business hours on April 4, 2023 and Mr. Kulvinder Singh having expertise in Finance and Taxation was designed as KMP of the Company effective from May 26, 2023.

As on the date of this report, your Company has following KMP: Mr. Rama Kant Sharma, Managing Director Mr. Gagan Kaushik, Company Secretary Ms. Namrata Jain , Whole-time Director Mr. Kulvinder Singh, Finance Controller


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 Directors during the year. The Independent Directors have also confirmed that they have complied with the Companys 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 SEBI order or any such authority as well as they are independent of the management.

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 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 skills, qualification and expertise and are independent of the management. 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 utilising different skills, qualifications, professional experience and knowledge of the Board members necessary for achieving sustainable and balanced development. In terms of SEBI Listing Regulations and Act, the Company has in place 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 have been 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/.


Pursuant to the provisions of the Act, the Board is required to carry out annual evaluation of its own performance and that of its Committees and individual Directors. The Nomination and Remuneration Committee (NRC) of the Board also carries out evaluation of every Directors performance. Accordingly, the Board and NRC of your Company have carried out the performance evaluation during the year under review.

For annual performance evaluation of the Board as a whole, its Committee(s) and individual Directors including the Chairman of the Board, the Company has formulated a questionnaire to assist in evaluation of the performance. Every Director has to fill the questionnaire related to the performance of the Board, its Committees and individual Directors except himself by rating the performance on each question.

On the basis of the response to the questionnaire, a matrix reflecting the ratings was formulated and placed before the Board for formal annual evaluation by the Board of its own performance and that of its committees and individual Directors. The Board was satisfied with the evaluation results.


A calendar of Meetings is prepared and circulated in advance to the Directors. The Board met 5 (five) times in FY 2022-23. The period between any two consecutive meetings of the Board of Directors of the Company was not more than120 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 Members viz. Mr. Rajiv Sharma (Chairman of the Committee), Mr. Kailash Nath Agarwal, 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. Hence, the Company is not required to prepare form AOC-1 with respect to performance of subsidiary or joint venture or associate company.


During the year, the Company has transferred the unpaid/unclaimed dividend amounting to Rs. 0.74 lakhs 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 31st March, 2023 on the website of the Company https://salautomotive.in/unclaimed- 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, during the year under review, the Company has transferred 350 equity shares to the demat account of Investor Education and Protection Fund, details of which are uploaded on the website of the Company https://salautomotive.in/unclaimed-dividend.

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 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 year 2022 until the conclusion of the 52nd AGM of the Company to be held in the year 2027.


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 FY 2022-23. 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.


The Cost Audit for financial year ended March 31, 2023 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.


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 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 the 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.


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 persistent pressure from the evolving marketplace 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.


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 FY 2022-23.


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 Annual Return in form MGT-7 of the Company, as required under Section 92 of the Companies Act, 2013, is available on the website of the Company at https://salautomotive.in.


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.

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.

For further details, please refer to the notes (refer Note 2.36) to the financial statements.


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 B 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)/(3) 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 Lakh during the year ended March 31, 2023 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 FY 2022-23 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, 2023, 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, 2023 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 FY 2022-23.


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


No material changes occurred after the closure of financial year till the date of this report.


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. 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.


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 Chairman
Date : 10th August, 2023 DIN:07418337

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