SAL Automotive Ltd Directors Report

Your directors have the pleasure of presenting their 51st Annual Report along with the Audited Financial Statements for the year ended March 31,2026.

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 financial year 2025-26. The highlights of the audited financial statements of the Company for financial year 2025-26 and previous financial year 2024-25 are as under:

		(Rs. in Crores)
Particulars	Year ended 31st March, 2026	Year ended 31st March, 2025
Net Revenue from Operations	384.44	377.76
Other Income	2.32	1.73
Total Revenue	386.76	379.49
Profit before Depreciation, Finance Charges and Tax	13.26	14.47
Finance Costs	2.48	2.32
Depreciation & Amortization Expense	4.31	4.28
Profit Before Tax and Exceptional Items	6.47	7.87
Exceptional Items	0.58	0
Profit Before Tax	5.89	7.87
Tax Provision
- Current	1.64	2.18
- Deferred	(0.01)	0.30
Profit After Tax	4.26	5.40
Other Comprehensive Income	0.03	(0.12)
Total Comprehensive Income	4.29	5.27

REVIEW OF OPERATIONS

During the financial year 2025-26, the overall Indian economy performed well, and this positive trend extended to the automotive and Agri-implements sectors in which your Company operates and achieved an increase in revenue, with a marginal growth rate of 2% as compared to the previous year.

Resultant to above factors, your Company has achieved highest ever sales volume in financial year 2025-26 but there is a decline of 25% in PBT 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 lay 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 3.5% which includes growth of Vehicle industry by 3.7 % and growth of Commercial Vehicle Industry by 2.8% However, your Company had shown de-growth of 10 % which includes de-growth in seat mechanisms for passenger vehicle of 11 % and growth of 126 % in seats for commercial vehicle.

Agriculture Implements: -

For the year under review, the Indian tractor industry had shown growth of 21.9% by achieving sales volume of 12.66 lakhs tractors against previous year volume of 10.39 lakhs and your Company had also recorded growth of 20.8% by achieving sales volume of 2.61 lakhs seats for tractor against previous year volume of 2.16 lakhs, and in case of Agri-implements, sales volume declined to 0.31 lakhs units against 0.35 lakhs units during the previous financial year resulting into decline of 12.0%.

The revenue of your Company reached to Rs. 384.44 crores against previous financial year figures of Rs. 377.76 Crores showing a marginal growth of 2% and however profit before tax stood at Rs. 5.89 Crores against previous years profit before tax of Rs. 7.87 crores. Profit before depreciation, finance and tax was Rs. 13.26 Crores against previous year figure of Rs. 14.47 Crores, total comprehensive income was Rs. 4.29 Crores in comparison to Rs. 5.27 Crores of previous year which results in to an earnings per share of Rs. 8.95 against previous year figure of Rs. 21.99.

During the year under review, with objective of Business & Capacity expansion and business diversification, the Board of Directors at its meeting held on November 13, 2025, approved setting up of a new satellite plant at Haridwar, covering 1800 sq. meter, for seat frames business to cater to growing demand and construction of new shed at Nabha plant (Punjab), by adding 1,00,000. Sq feet of additional area for capacity enhancement of existing business as well as new Business.

DIVIDEND

The Board of Directors have recommended the Final Dividend of Rs. 2 per equity share of the Company (i.e. 20% of face value of Rs. 10 each) for the financial year ended March 31,2026.

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 2025-26 will be Rs. 95.91 lakhs.

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), 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 transferred an amount of Rs. 239.77 lakhs out of General Reserves during the year under Review towards bonus issue.

SHARE CAPITAL

The Authorised share capital of the Company during the year under review remained unchanged and stood at Rs. 10,50,00,000/- (Rupees Ten Crores Fifty Lakhs only) divided into 1,00,00,000 (One Crore) Equity Shares of Rs. 10/- each and 50,000 (fifty thousand) Redeemable cumulative preference share of Rs. 100/- each.

Pursuant to the approval of the shareholders dated March 15, 2025 via postal ballot and subsequent approvals from stock exchange i.e. BSE Ltd., the Company had allotted bonus equity shares on April 04, 2025 in the ratio of 1:1 i.e one (1) equity share of face value of Rs. 10/- (Rupees Ten only) each for every one (1) existing equity share of face value of Rs. 10/- (Rupees Ten only). Accordingly, 23,97,713 (Twenty Three Lakhs Ninety Seven Thousand Seven Hundred Thirteen) equity shares were allotted to the eligible shareholders on the

record date (i.e April 03, 2025) as Bonus Equity Shares. Furtherance to this, issued and paid-up Equity Share Capital of the Company increased from Rs. 2,39,77,130/- (Rupees Two Crores Thirty-Nine Lakhs Seventy- Seven Thousand One Hundred Thirty Only) divided into 23,97,713 (Twenty Three Lakhs Ninety Seven Thousand Seven Hundred Thirteen) equity shares of Rs. 10/- each (Rupees Ten only) to Rs. 4,79,54,260/- (Rupees Four Crores Seventy-Nine Lakhs Fifty-Four Thousand Two Hundred Sixty Only) divided into 47,95,426 (Forty Seven Lakhs Ninety Five Thousand Four Hundred Twenty Six) equity shares of Rs. 10/- each (Rupees Ten only), by capitalizing General Reserve.

DEPOSITS

The Company has not accepted any deposit from the public, during the Year under Review, within the meaning of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014, and no amount of principal or interest on deposits from the public was outstanding or remained unclaimed as on the date of Balance Sheet.

INDUSTRIAL RELATIONS

In todays dynamic business environment, the foundation of our industrial and employee relation framework rests 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 wellbeing, 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 managing personnel issues but it fosters a culture where employees feel valued, supported, and motivated to contribute to the companys 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 plays a pivotal role here, both our managers and supervisors always lead by example, demonstrating behaviours 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 behavioural 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 a 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 companys overall success. Effective leadership ensures that the organizations vision is communicated clearly, and that employees are aligned with the companys goals.

As we move forward into financial year 2026-27, 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

Your Company remained committed towards excellence in Safety, Occupational Health, and Environment in the year 2025-26.

Safety, Occupational Health, and Environment are critical pillars in maintaining a safe and productive workplace. While we have a well-established Safety, Occupational Health 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 in 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 and is 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. We organize the: "World Environment Day" and tree plantation each year as our commitment to a green workplace and service to the mother Earth. As an organization we invest heavily in continuous training, safety drills, and the implementation of advanced safety technologies to anticipate and prevent accidents.

We organize National Safety Week in our organization to foster employees commitment for safety and "ZERO ACCIDENT" during the year. 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 wellbeing 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. We are certified for Environment Health and Safety Management System as ISO 14001:2015 and ISO 45001:2018.

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 2025-26, 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 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

Based on the recommendation of Nomination and Remuneration Committee and Board of Directors, Members of the Company, vide special resolution dated September 26,2025 passed at the 50th Annual General Meeting approved the: -

(a) Re-appointment of Mr. Kailash Nath Agarwal (DIN: 08829437) as an Independent Director of the Company, not liable to retire by rotation, for a second term of five years commencing from August 20, 2025, to August 19, 2030 (both days inclusive).

(b) Re-appointment of Ms. Namrata Jain (DIN: 07310940) as Whole Time Director designated as Executive Director-Finance (ED- Finance) and Chief Financial Officer (CFO), liable to retire by rotation, for a term of three years commencing from November 11,2025.

In terms of Section 152 of the Companies Act, 2013 ("Act"), Mr. Rajiv Sharma (DIN: 07418337) Non-Executive Non-Independent Director retires by rotation at the forthcoming 51 st Annual General Meeting ("AGM") and being eligible, offers himself for re-appointment. The Board recommends the resolution for his re-appointment for the approval of the members of the Company at the ensuing AGM. A brief profile and other details relating to him is provided in the Notice of ensuing AGM.

The first term of Mr. Uttam Sahay (DIN: 08608518) as an Independent Director of the Company ends on January 30, 2027. Pursuant to Sections 149, 150, 152 and Schedule IV (Code for Independent Directors) of the Act read with Rules framed thereunder, Listing Regulations and the Articles of Association of the Company, after evaluating skills, experience, expertise, knowledge of Mr. Uttam Sahay and considering his contribution towards the Company and based on his performance evaluation and upon recommendation of the Nomination and Remuneration Committee (NRC) of the Board, the Board, at its meeting held on Thursday, August 13, 2026 approved re-appointment of Mr. Uttam Sahay as Non- Executive Independent Director of the Company, not liable to retire by rotation, for a second term of Three consecutive years, effective from January 31,2027 up to January 30, 2030, subject to the approval of the Members.

The tenure of Mr. Rama Kant Sharma (DIN: 00640581) as Managing Director of the Company ends on February 03, 2027. the Board of Directors of the Company in its meeting held on Thursday, August 13, 2026, pursuant to the provisions of Sections 196, 197 and 198 of the Act read with Schedule V thereto, applicable provisions of Listing Regulations and the Articles of Association of the Company, upon recommendation of Nomination and Remuneration Committee (NRC) of the Board and after evaluating the skills, experience, expertise, knowledge of Mr. Rama Kant Sharma, re-appointed him as the Managing Director of the Company, not liable to retire by rotation, for a period of five consecutive years with effect from February 04, 2027 till February 03, 2032, subject to the approval of the Members.

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

KEY MANAGERIAL PERSONNEL (KMP)

During the year under review, there was no change in the KMP apart from the aforesaid.

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 & General Counsel Ms. Namrata Jain, ED-Finance and CFO Mr. Kulvinder Singh, Finance Controller & KMP 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 read along with Rules framed thereunder and Regulation 16 of Listing Regulations and are not disqualified from continuing as an Independent Director of the Company and that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence. 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.

The Independent Directors have also confirmed compliance with the Code for Independent Directors prescribed under Schedule IV to the Act and further, all of them have registered themselves in the data bank maintained with the Indian Institute of Corporate Affairs, Manesar (IICA).

Based on the disclosures received, in the opinion of the Board all independent directors fulfil the conditions specified in the Act and Listing Regulations and possess strong sense of integrity and having requisite experience, qualifications and expertise and are independent of the management.

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 utilising different skills, qualifications, professional experience and knowledge of the Board members necessary for achieving sustainable and balanced development. In terms of Listing Regulations and Act, the Company has in place Nomination & Remuneration Policy(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 reenactments) 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 year under review, no changes have been carried out in the said Policy. The Policy is available on the website of the Company and can be accessed via. https://salautomotive.in/policies.

ANNUAL PERFORMANCE EVALUATION

Pursuant to the provisions of the Act and Listing Regulations, 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.

Independent Directors were additionally evaluated to assess their performance and adherence to independence criteria, ensuring their independence from management.

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.

BOARD MEETINGS

A calendar of Meetings is prepared and circulated in advance to the Directors. The Board met five (5) times during the year under review. 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.

AUDIT COMMITTEE

During and as at the end of the year under review, the Audit Committee comprised of the following Directors viz. Mr. Kailash Nath Agarwal (Chairman of the Committee), Mr. Rajiv Sharma and Mr. Uttam Sahay. The Company Secretary of the Company act as the Secretary of the Committee. All the recommendations made by the Audit Committee were accepted by the Board.

Further, the Company has several other Committees, which have been established in compliance with the requirements of the relevant provisions of applicable laws. The details about all the Committees of the Board of Directors of the Company including their composition, are provided in the Corporate Governance Report which forms an integral part of the Annual Report for the financial year 2025-26.

SUBSIDIARY / ASSOCIATE & JOINT VENTURE COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

During the year under review, the Company was not having any subsidiary or joint venture or associate company. Accordingly, statement containing the salient features of the financial statements of Subsidiaries, joint ventures and associate including their contribution towards the overall performance of the Company during the year under review, in the prescribed form AOC-1 is not required to be provided.

INVESTOR EDUCATION AND PROTECTION FUND

In accordance with the provisions of the Act and the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer, and Refund) Rules, 2016 (IEPF Rules), all unclaimed dividends are required to be transferred to the Investor Education and Protection Fund (IEPF) after a period of seven consecutive years. Additionally, shares on which dividends remain unclaimed by shareholders for seven consecutive years or more are required to be transferred to the demat account of the Investor Education and Protection Fund Authority (IEPF Authority) as per the IEPF Rules.

During the year under review, the Company has transferred the unpaid/unclaimed dividend amounting to Rs. 97,250 to the IEPF established by the Central Government. The Company has also uploaded the details of unpaid and unclaimed amounts lying with the Company as on March 31,2026 on the website of the Company and can be accessed at https://salautomotive.in/unclaimed-dividend-iepf-sal-automotive-ltd.

Further, in terms Section 124(6) read with IEPF Rules, as amended, during the year under review, the Company has transferred 861 equity shares to the demat account of IEPF Authority, details of which are uploaded on the website of the Company and can be accessed at https://salautomotive.in/unclaimed-dividend- iepf-sal-automotive-ltd.

Following the transfer, shareholders can reclaim the aforementioned shares along with any accrued dividends by submitting an application to the IEPF Authority as per the prescribed procedure available on www.iepf.gov.in, accompanied by the requisite documents stipulated under the IEPF Rules. Upon receipt of the application, the Company submits an online verification report to the IEPF Authority, overseen by the Nodal Officer. All corporate benefits arising from such shares, including dividends (excluding rights shares), are credited to the IEPF.

STATUTORY AUDITORS

In terms of the provisions of Section 139 of the Act, M/s. Mangla Associates, Chartered Accountants (ICAI Firm Registration No.:006796C), were re-appointed as Statutory Auditors of the Company at the 47th AGM of the members of the Company to hold the office as such for a period of 5 years from the conclusion of the 47th AGM held in year 2022 until the conclusion of the 52nd AGM of the Company to be held in the year 2027.

M/s. Mangla Associates have confirmed that they are not disqualified from continuing as Statutory Auditors of the Company and satisfy the prescribed eligibility criteria.

AUDITORS REPORT

The Auditors Report on the financial statements of the Company for the financial year 2025-26, issued by Statutory Auditors, 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.

During the year under review, the Auditors have not reported any instances of fraud under Section 143(12) of the Act and therefore disclosure of details under Section 134(3)(ca) of the Act is not applicable.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Act (including the rules made thereunder) and Regulation 24A of the Listing Regulations, and on the basis of the recommendation of the Board of Directors, the Shareholders of the Company in their 50th AGM held on September 26, 2025 appointed M/s Arora & Co. (FCS No.2191, CP No. 993, peer reviewed No. 2120/2022) practicing Company Secretaries, as Secretarial Auditors of the Company for a term of 5 (Five) consecutive years commencing from financial year 2025-26 to financial year 2029-30. They have also confirmed that they are not disqualified from continuing as Secretarial Auditors of the Company in terms of provisions of the Act and Rules made thereunder and the Listing Regulations and satisfy the prescribed eligibility criteria in accordance with the provisions of the Act and the Listing Regulations.

The Secretarial Audit Report for the financial year 2025-26, issued by the Secretarial Auditor, does not contain any qualification, reservation, adverse remark or disclaimer and has been provided in Annexure A to this Report. Further, during the period under review, the Secretarial Auditors have not reported any instances of fraud under Section 143(12) of the Act and therefore disclosure of details under Section 134(3)(ca) of the Act is not applicable.

COST AUDITORS

The Cost Audit for financial year ended March 31,2026 was conducted by M/s SDM & Associates, Cost Accountants (Firm Registration No. 000281), Cost Auditor of the Company .

The Company is maintaining proper cost records in compliance with the requirements of Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, as amended Further, during the year under review, the Cost Auditor has not reported any instances of fraud under Section 143(12) of the Act and therefore disclosure of details under Section 134(3)(ca) of the Act is not applicable.

Upon the recommendation of the Audit Committee, the Board has appointed M/s SDM & Associates, Cost Accountants (Firm Registration No. 000281) as the Cost Auditor of the Company for the financial year 202627. Pursuant to the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditor requires ratification by the shareholders. Therefore, the Board recommends the ratification of the remuneration payable to the Cost Auditor, by the shareholders at the ensuing AGM.

CORPORATE SOCIAL RESPONSIBILITY

During the year under review, the provisions of Section 135 of the Act relating to Corporate Social Responsibility (CSR) were applicable to the Company. CSR for Company is an integral part of its core values and reflects its commitment to operate in an ethical and responsible manner. The Company endeavors to meet and exceed the ethical, legal, and societal expectations through sustainable initiatives that contribute meaningfully to the community.

In line with its philosophy of Good Corporate Citizenship, the Company undertook various CSR initiatives during the year, including tree plantation drives at multiple locations, awareness campaigns on the ill effects of tobacco, and contributions towards the well-being of underprivileged sections of society through the provision of medicines, beds, and linen to destitute homes.

In alignment with the Companys vision, it continues to promote inclusive and sustained growth by enhancing value creation for the society through its CSR initiatives. The CSR Policy of the Company, adopted by the Board, provides approach and direction given by the Board of the Company and includes guiding principles for selection, implementation and monitoring of activities as well as formulation of the annual action plan.

During the year under review, as per the provisions of the Act, the Company was required to make CSR contribution of Rs. 14,29,045. Company contributed an amount of Rs. 14,29,045 to the Jivan Jyot Foundation in fulfilment of its CSR obligation for the financial year 2025-26. As the CSR obligation for the year under review is below Rs. 50 Lakhs, the constitution of a CSR Committee, as prescribed under Section 135(9) of the Act, is not applicable. Accordingly, the functions of the CSR Committee as prescribed under Section 135 of the Act are being discharged by the Board.

The Board oversees the formulation, implementation, and monitoring of CSR activities in accordance with the CSR Policy and the annual action plan. The CSR Policy outlines the Companys approach to social responsibility and serves as a guiding document for initiatives aimed at the welfare and sustainable development of the community. The CSR Policy is available on the Companys website at: https://salautomotive.in/policies/ . Further, no change was carried out therein during the year under review.

The Annual Report on CSR activities for the financial year 2025-26, prepared in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, is annexed to this Report as Annexure-B.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report for the 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 this Annual Report .

INTERNAL FINANCIAL CONTROLS

The corporate governance policies 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 adequate internal financial controls to ensure accurate and reliable preparation of financial statements, custom-made to the size, scale, and complexity of its 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 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.

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 and policies, 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 Whistle blower 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 year under review.

DETAILS OF LOANS, INVESTMENTS AND GUARANTEES UNDER SECTION 186

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

ANNUAL RETURN

The Annual Return in form MGT-7 of the Company for the financial year 2025-26, as required under Section 92 of the Act, is available on the website of the Company at https://salautomotive.in/annual-return.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

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 year under review, the Company had not entered into any contract/ arrangement/transaction with related parties which could be considered material in accordance with the Act read with Listing Regulations and 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 T ransactions were placed before the Audit Committee for approval.

Accordingly, the disclosure of Related Party T ransactions 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.

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 C forming part of this Report.

PARTICULARS OF EMPLOYEES

In accordance with the provisions of Section 197 of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the requisite disclosures relating to the remuneration of Directors and employees are provided in Annexure - D to this Report.

Pursuant to Section 136 of the Act and the applicable rules thereunder, the Annual Report including the Financial Statements are being circulated to the shareholders excluding the statement containing particulars of employees remuneration under Section 197 of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Any shareholder who wishes to obtain a copy of such information may request the same by sending an email to the Company Secretary and General Counsel Gagan Kaushik at kaushik.gagan@salautomotive.in.

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 2025-26 which would impact the going concern status of the Company and its future operations.

DIRECTORS RESPONSIBILITY STATEMENT

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

(A) in the preparation of the annual accounts for the year ended March 31,2026, the applicable accounting standards have been followed and there are no material departures from the same.

(B) 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 31,2026 and of the profit of the Company for the year ended on that date.

(C) 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.

(D) the Directors have prepared the annual accounts of the Company on a going concern basis.

(E) 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.

(F) 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 announced to all staff and is available with HR Department.The disclosure with respect to complaints under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 is as follows:

Number of complaints of sexual harassment received in financial year 2025-26;	Nil
Number of complaints disposed of during financial year 2025-26; and	Nil
Number of cases pending for more than ninety days	Nil

COMPLIANCE TO THE PROVISIONS RELATING TO THE MATERNITY BENEFITS ACT, 1961

The Company is in compliance with the applicable provisions of Maternity Benefit Act, 1961. 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

There have been no material changes and commitments affecting the financial position of your Company between the end of the financial year 2025-26 and 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 in respect of such items during the year under review:

(a) Issue of equity shares with differential voting rights or issue of sweat equity shares or stock options.

(b) Changes in the nature of business activities.

(c) Revision of financial statement or Boards Report.

(d) Funds raising through preferential allotment or qualified institutions placement.

(e) Managing or Whole-time Director of the Company receiving any remuneration or commission from any holding company of the Company.

(f) Application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year under review along with their status as at the end of the financial year.

(g) 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.

	FOR AND ON BEHALF OF THE BOARD
	Rajiv Sharma
Place : Ghaziabad	Chairman
Date : 13th August, 2026	DIN:07418337