Salora International Ltd Directors Report.

Dear Members,

Your Directors are pleased to present 50th Annual Report and Audited Financial Statements for the Financial Year ended 31st March, 2019.

1. FINANCIAL RESULTS (STAND ALONE)

The financial statement of the company has been prepared in accordance with the Indian Accounting Standards (“Ind AS”). A quick view of the financial performance of the Company for the financial year ended 31st March, 2019 along with the performance figures of previous financial years have been tabled below:

(Rs. in Lacs)
Particulars 2018-19 2017-18
Net Sales /Income from Business Operations 17516.34 12800.00
Less: Excise Duty - 53.89
Net Sales 17516.34 12746.11
Add: Other Income 85.48 27.73
Increase / (Decrease) in stock 67.03 459.60
Total 17668.85 13233.44
Less: Total Expenditure 17096.35 13810.84
Operating Profit 572.50 (577.40)
Less: Interest 702.68 634.44
Less: Depreciation & Amortization 194.93 211.01
Profit before exceptional item & tax (325.11) (1422.85)
Less: Exceptional Item - -
Profit before tax (325.11) (1422.85)
Less: Provision for taxes
Current Tax - -
Deferred Tax (162.74) 418.15
Earlier Year: Deferred Tax - -
Earlier Year: Income Tax - -
Profit / (Loss) after tax (487.85) (1004.70)
Other comprehensive income (6.89) 0.67
Balance carried to Balance Sheet (494.74) (1004.03)

2. DIVIDEND

In view of accumulated losses, the Board of Directors has not recommended any dividend this year also.

3. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

Now, no amount of unpaid / unclaimed dividend is available or due with the Company for transfer to IEPF (Investor Education and Protection Fund), established by the Government of India.

4. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS

During the period under review, the Company has achieved net sales of Rs.175.16 crores in the current financial year 2018-19 as compared to Rs.127.46 crores in the last financial year. Its net sales increased by 27.51% in 2018-19.

Company earned operating profit of Rs.572.50 lakhs against the operating loss of Rs.577.40 lacs incurred during the last financial year.

During the year overall performance the company has shown an improvement due to trading of Apple phones and laptop. Company has launched 50 / 55 / 65 Inch Smart LED TVs to meet the increasing demand of LED Segment. Salora has launched semi-automated washing machine of its own brand. Company is hoping for more improvement in current year with these products.

With the vision of spreading happiness in everybodys life, Salora International Ltd. today has emerged as a diversified entity with interests in sourcing and procurement, manufacturing, supply chain management, distribution, marketing, retail and after-sales service. Over three decades of enriched experience in electronics helps us to serve in diverse realms like Consumer Electronics, Telecom and Lifestyle.

Salora has emerged the leading manufacturer and supplier of consumer durable items to sustain its focus on launching innovative products and incorporating technological advancements. Recently Company launched range of direct cool Refrigerators.

The Company has adopted the best and most sophisticated technology to suit household desires. The Company has successfully forayed into market either directly or indirectly.

As per review of performance of SALORA BRAND LED TV, there are positive signs of growth in future and in the coming festive season, companys performance in selling of its own Brand SALORA Smart LED TV will increase.

The management of the company is also exploring all the other permissible measures to boost the sale like interest subsidy, Low Cost EMI Facility to various of its customers. All these measure would definitely shift the consumer sentiments in the market.

On reviewing the performance of Audio-Division of company the company plans to aggressively enhance its speaker production capacity as company, consider that there is lot of scope for doing business in this segment. The management of the company is positive and empathetically conclusive in its words that there is more which can be achieve and done in this business segments.

Due to intense competition company has reduced its focus on mobile phones segment. Although we have been doing the manufacturing of mobile phones in the past and positive efforts are being taken to strengthen our foot steps in this dynamic business segment. We manufacture feature phones and smart phones (2G, 3G, 4G/LTE, VoLTE and CDMA). On pricing page company claims it to be in reach of ever middle class and lower income group spread in rural areas.

The management has been critically analyzing the performance and taking steps to increase sales and further cost rationalization. The Company is confident of better results in the current financial year.

5 LISTING/DELISTING

The equity shares of the Company are listed at BSE Limited (“BSE”). The equity shares of the Company were also listed on National Stock Exchange of India Limited (“NSE”) but suspended from trading on NSE.

Pursuant to approval given by the Board of Directors in its meeting held on March 09, 2019, the Company filed application for voluntary delisting of Companys equity shares from the NSE on March 25, 2019, in terms of regulation 6 and 7 of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (“SEBI Delisting Regulations”) which was approved by NSE vide its Reference no. NSE/ LIST/78155 dated April 03, 2019 pursuant to which NSE has withdrawn (delisted) the admission to dealing in securities of the Company w.e.f. April 25, 2019.

The Equity Shares of the Company will remain listed on BSE having nationwide terminals and shareholders of the Company shall continue to avail the benefits of listing and trading on BSE.

In this regard, the Company has made necessary disclosures required under SEBI Delisting Regulations and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 to the BSE and NSE.

6. MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED DURING THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENT RELATE AND THE DATE OF THE REPORT

No material changes and commitments affecting the financial position of the Company occurred at the end of the financial year of the Company i.e. 31st March, 2019 and the date of Directors Report i.e. 25th May, 2019.

Further, there were no significant or material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and companys operation in future.

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

The information on conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided in Annexure-I to this report forming an integral part of this report.

8. RESEARCH AND DEVELOPMENT

The information regarding Research & Development as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided in Annexure-I to this report forming an integral part of this report.

9. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT OF THE COMPANY

A well defined risk management framework has been put in place to identify, evaluate and assess the potential risk and challenges and determine the process to mitigate and manage the same.

Detailed exercise has been carried out to identify, evaluate, manage and monitor the potential risks to the operations of the Company. The Board periodically reviews the risks and suggests steps to be taken to mitigate and manage the same.

Audit Committee of the Company with the help of periodical internal audit reports and managements representations is identifying and evaluating all possible risk and inform the Board with their possible recommendations to hedge those risk and minimization procedures. In the opinion of the Board there is no risk that may threaten the existence of the Companys business.

10. CORPORATE SOCIAL RESPONSIBILITY POLICY UNDER THE PROVISION OF SECTION 135 OF THE COMPANIES ACT, 2013

The Section 135 of the Companies Act, 2013 is not applicable on the Company.

11. LOANS, GUARANTEES OR INVESTMENTS

There were no loans, guarantees or investments made by the Company exceeding the limit as specified under Section 186 of the Companies Act, 2013 during the year under review and particulars of loans given, investments made, guarantees given and securities provided under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 along with the purpose for which the loan or guarantee are provided in Note No. 11 & 13 of the standalone financial statement.

12. RELATED PARTY TRANSACTIONS

The Board has, on recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties. This policy is in compliance with the applicable provisions of the Companies Act, 2013, and Rules made thereunder and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This policy is available on the companys website at: www.salora.com

All related party transactions entered during the year under review were in ordinary course of business, on Arms Length Basis and in compliance with the applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. For transactions which are foreseen and repetitive in nature, omnibus approval of Audit Committee is obtained at the beginning of the financial year. A statement of all Related Party Transactions is placed before the Audit Committee for its review on a quarterly basis, specifying in nature, value and terms and conditions of the transactions.

Attention of the members is drawn to the disclosure of Related Party Transactions set out in Note No.41 of the standalone financial statements forming integral part of this Annual Report.

13. AUDITORS Statutory Auditors

At the 48th AGM held on 13th September, 2017 the Members approved appointment of M/s. R. Gopal & Associates, Chartered Accountants, (Firm Registration No. No.000846C), as Statutory Auditors of the Company to hold office for a period of five years from the conclusion of that AGM till the conclusion of the 53rd AGM, subject to ratification of their appointment by Members at every AGM, if so required under the Act. The requirement to place the matter relating to appointment of auditors for ratification by Members at every AGM has been done away by the Companies (Amendment) Act, 2017 with effect from May 7, 2018. Accordingly, no resolution is being proposed for ratification of appointment of statutory auditors at the ensuing AGM and a note in respect of same has been included in the Notice for this AGM.

Secretarial Auditor

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. Navneet K Arora and Co.LLP, a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company. The Board at its meeting held on 25th May, 2019, has re-appointed M/s. Navneet K Arora and Co.LLP, as Secretarial Auditor, for conducting Secretarial Audit of the Company for financial year 2019-20.

Cost Auditors

Pursuant to Section 148(2) of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, Company is required to get its cost accounting records audited by a Cost Auditor.

Accordingly, the Board of Directors of the Company at its meeting held on 25th May, 2019 on the recommendation of the Audit Committee, appointed M/s. Gurvinder Chopra & Co. Cost Accountants to conduct the audit of cost accounting records of the Company for the financial year 2019-20 at a remuneration of Rs.40,000/- plus taxes as applicable and reimbursement of actual travel and out of pocket expenses. The remuneration is subject to the ratification of the members in terms of Section 148 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014.

14. AUDITORS REPORT

There were no qualifications or reservations or adverse remarks made by the Statutory Auditors of Your Company for the standalone financial statements. However, the auditors have made following Emphasis of Matters:

For Standalone Financial Statements-The point -wise Emphasis of Matters made by the Statutory Auditor and Managements response to the Emphasis of Matter made as above is as under:

Emphasis of Matters Managements response
i) The Companys has : inventories as at 31st March, 2019 of Rs.5445.51 lakhs at cost which includes old inventories against which provision of Rs.169.53 lakhs has been considered. Sale done from ageing inventories are not below cost. The additional provision, if any, on inventories shall be accounted for at the time of disposal / realization. The company is regularlary making effort to reduce the ageing of inventories. Company is getting good response as all goods are in saleable condition and Sale done from ageing inventories are not below cost. There are positive signs of growth in future and in near festive season. Company expects better sale of this inventory during upcoming festival season. The Company is also expecting sale of these products through e-commerce portals.
ii) Contingent liabilities of : Rs.6482.77 lakhs related to Sales tax, Excise duty, Income tax etc. against which amount deposited Rs. 862.40 lakhs which are contested by the company and pending before various forums. However management believes that based on legal advice, the outcome of these contingencies will be favorable and that outflow of economic resources is not probable. Based on the opinion rendered by expert, the company has strong factors in the cases of all the litigation in its favour. Therefore, the management is of the opinion that all the litigation and claim the outcomes are the most likely to be in favour of the company. In respect of said liabilities, Appeal is in the process of various stages and against the liabilities of Chennai VAT, Chennai high Court has decided in favour of Company as well as Appeal of Gujarat will be decided shortly as personal hearing was completed and order is awaited, against ex-parte order, in favour of Company.
iii) The Company has material : undisputed statutory dues recoverable of Sales tax Rs.335.98 lakhs, Income tax Rs. 109.82 lakhs, Service tax Rs.14.74 lakhs and Modvat Rs.7.82 lakhs has been considered good. The company has strong factors in the cases of realisation in its favour. The management is of the opinion that all the balances are recoverable and considered good and no provision there against at this stage is considered necessary in the financial statements. As on date Rs. 5.75 lakhs GST and Rs 5.25 lakhs Excise/Service tax refund received and refund of Rs 60.32 lakhs from UP VAT authorities is in process and its is expected to be receive ASAP.
iv) For deferred tax assets on : unabsorbed depreciation, business losses, impairment provisions and capital losses etc. recognized net of deferred tax liability on account of difference in block of fixed assets amounting to Rs.1834.64 lakhs as at 31st March, 2019, as the management is confident for realization of the same. Though the company has been incurring losses but with the launch of new products and new alliances for distribution business it expects turnaround and return to profitability and accordingly has recognized deferred tax, owing to reasonable certainty of availability of future taxable income to realize such assets.
v) The company holds : Investments of Rs.341.48 lakhs in its subsidiary Salora Component Limited which has net worth of Rs.89.54 lakhs as on 31st March, 2019. Company has entered into Share Purchase agreement dated 30th March, 2019 to sell the shares at cost, subject to the terms and conditions of this agreement and in consideration thereof for sell and transfer of shares on compliance of all transfer formalities. The Company has sold the shares on 30th March, 2019 but not transferred due to dematerialization of shares pending hence considered as investment. However, demat account has been opened subsequently to the year end and transfer formalities shall be completed shortly. The Company has also received consideration Rs.173.00 lakhs till date
vi) Pending confirmations/ : statement of accounts/ follow up documents of old debit balances of certain trade payables and advances amounting to Rs.84.37 lakhs have been considered good, as the management is hopeful of recovery of the same. Management is in the process to reconcile / confirmations of balances and expect that there will be no material impact on the financial statements. Accordingly considered good.

The observations and comments given by the Auditors in their report read together with notes on financial statements are self explanatory particularly Note No. 43,44,45,46,47,48( standalone financials) and Note No. 39,40,41,42,43, (consolidated financials) and hence the same to be treated as explanation provided under Section 134 of the Act.

For Consolidated Financial Statements-The point -wise Emphasis of Matters made by the Statutory Auditor and Managements response to the Emphasis of Matter made as above is as under:

Emphasis of Matters Managements response
i) For deferred tax assets on unabsorbed depreciation and business losses etc. recognized amounting to Rs. 104.52 lakhs (net) as at 31st March, 2019, as the management is confident for realization of the same. : Though the company has been incurring losses it expects turnaround and accordingly has recognized deferred tax, owing to reasonable certainty of availability of future taxable income to realize such assets.
ii) The Company has material undisputed statutory dues recoverable of GST Rs. 104.28 lakhs, Service tax Rs.22 lakhs, Excise Duty Rs.4.54 lakhs and sales tax Rs.3.73 lakhs has been considered good. : The company has strong factors in the cases of realisation in its favour. Therefore, the management is of the opinion that all the balances are recoverable and considered good and no provision there against at this stage is considered necessary in the financial statements.

Note: With regard to remaining Emphasis of Matters along with Managements response of Consolidated Financial Statements are same as stated in point number (i), (ii), (iii), (iv) and (vi) of Emphasis of Matters of Standalone Financial Statements.

The audited financial statement drawn up both on standalone and consolidated basis for the financial year ended March 31, 2019, in accordance with the requirements of the Ind-AS Rules.

15. SECRETARIAL AUDITORS REPORT

The Secretarial Auditors Report contains observation. The observation of the Secretarial Auditor and Management reply with respect to it is as follows:

Observation Managements reply
The Company was required but has not transferred 1,11,060 Equity Shares of Rs. 10/- each held by 807 shareholders to I EPF pursuant to Section 124 (6) of the Companies Act, 2013. Further the company has received letter from Investor Education and Protection fund Authority Ministry of Corporate Affairs, (GOI) vide its letter No.17/1/2018/IEPFA/ INSP2/206(4)/CFI/1F44NF/733, dated 05/09/2018 which was replied vide the Company letter dated October 17.2018 : As per Rule 6 of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, Company is in the process of sending individual notices, through Companys Registrar and Share Transfer Agent, Skyline Financial Services Private Limited to the shareholders, who have not claimed dividend for the last seven years for transfer of shares to IEPF. Company will also publish in two newspaper (Financial Express and Jan Satta) the notice for the attention of the shareholders of the Company in respect of transfer of equity shares of the Company to Investor Education and Protection Fund (IEPF) Account, in accordance with requirement of Section 124(6) of the Companies Act, 2013 read with Investor Education and protection fund (IEPF) Authority (Accounting, Audit, Transfer and refund) Rules, 2016. The Company will also upload the details of such shareholders and shares due for transfer to IEPF on its website at www.salora. com.

Report of the Secretarial Auditors is furnished in Annexure-II and is attached to this report.

16. COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES

The Board of Directors has adopted a policy on directors appointment and remuneration including criteria for determining qualification, positive attributes and independence of the directors and other matters as per sub-section (3) of Section 178 of the Companies Act, 2013 has been disclosed in the Corporate Governance Report, forming integral part of this report under Nomination and Remuneration Committee section.

17. COMPANYS POLICY ON PREVENTION OF INSIDER TRADING

InTerms of the SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company framed (a) Code of Internal Procedures and Conduct for Regulating, Monitoring and Reporting of Trading by Insiders and (b) Code of Fair Disclosure (c) Code of Practice & Procedure for fair disclosure of unpublished price sensitive information. The Companys Code, inter alia, prohibits dealing in the shares of the Company by an insider, while in possession of unpublished price sensitive information in relation to the Company and also during certain prohibited periods.

18. EXTRACT OF ANNUAL RETURN

The extract of Annual Return in MGT- 9 pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is provided in Annexure-III to this Report forming an integral part of this report.

19. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW

Five Board meetings were held during the financial year 2018-19 on 28th May, 2018, 10th August, 2018, 12th November, 2018, 14th February, 2019 and 9th March, 2019. All directors attending the meeting actively participated in the deliberations at these meetings. The intervening gap between any two meetings was within the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and \ Disclosure Requirements) Regulations, 2015. More details of the Board meeting have been provided in the Report on Corporate Governance.

20. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013 the directors to the best of their knowledge and ability confirm that:

a. in preparation of the annual accounts, applicable accounting standards “IND AS” have been followed along with proper explanation relating to material departures;

b. the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of financial year and of the profit / (loss) of the company for that period;

c. the directors have taken proper and sufficient care for 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;

d. the directors have prepared annual accounts on a going concern basis;

e. the directors have laid down proper internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

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

21. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company have one subsidiary i.e. Salora Components Ltd. The financial performance of subsidiary Company is furnished in Form AOC-1 in Annexure-IV which forms part of this Annual Report.

The Company has no joint venture / associate company.

22. DEPOSITS

The Company has not accepted/received any deposits during the year under report falling within the ambit of Section 73 of the Companies Act, 2013.

23. CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL

Shri Patanjali Govind Keswani, resigned from the office of Non Executive Independent Director w.e.f. 28th September, 2018

Smt. Savitri Devi Jiwarajka, resigned from the office of Non Executive Director (Promoter Group) w.e.f. 5th November, 2018.

Ms. Silky Gupta was appointed as Company Secretary & Compliance Officer of the Company in place of Shri Mohd. Faisal Farooq w.e.f. 14.02.2019

24. DECLARATION OF INDEPENDENT DIRECTORS

All Independent Directors have submitted declarations confirming that they meet the criteria of independence, as prescribed under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Independent Directors have also confirmed compliance with the Companys code of conduct during the financial year 2018-19.

25. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE

The Audit Committee consists of the following members:

1) Shri Gautam Khaitan, Chairman

2) Shri Sanjeev Kaul Duggal, Member

3) Shri Karna Singh Mehta, Member

The above composition of the Audit Committee consists of all independent directors.

Shri Patanjali Govind Keswani resigned from the membership of the committee w.e.f. 28.09.2018

26. VIGIL MECHANISM

The Company has in place a Whistle Blower Policy which provides a mechanism for employees / Board Members and others to raise good faith concerns about violation of any applicable laws / Code of Conduct of the Company, gross wastage or misappropriation of funds, substantial or specific danger to public health and safety, abuse of authority or unethical behavior and to protect the individuals who take such action from retaliation or any threat of retaliation and also provides for direct access to the Chairman of the Audit Committee. The functioning of the Vigil mechanism is reviewed by the Audit Committee from time to time.

The Whistle Blowers are not denied access to the Audit Committee of the Board. The details of the Whistle Blower Policy are given in the Report on Corporate Governance and are also available on the Companys website at: www.salora. com

27. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 AND PROVIDING VIGIL MECHANISM

The Company is committed towards providing a healthy environment and thus does not tolerate any discrimination and/ or harassment of women workers in any form. The Company has in place an Internal Complaints Committee to inter-alia:

1) Prevent sexual harassment of women workers at the workplace; and

2) Redress the complaints in this regard.

During the year under review, the Company did not receive any complaint.

28. SHARE CAPITAL

The Equity Shares of the Company was listed at BSE Ltd. (BSE) and National Stock Exchange of India Ltd. (NSE). The Board of Directors of the Company in their meeting held on 09.03.2019 had consented for voluntary delisting of equity shares of the Company from National Stock Exchange of India Ltd., Mumbai and Company filed application for voluntary delisting of Companys equity shares from the NSE on March 25, 2019, in terms of regulation 6 and 7 of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (“SEBI Delisting Regulations”) which was approved by NSE vide its Reference no. NSE/LIST/78155 dated April 03, 2019 pursuant to which NSE has withdrawn (delisted) the admission to dealing in securities of the Company w.e.f. April 25, 2019. After completion of all formalities, voluntary delisting has taken place. Listing fee for the Financial Year 2019-20 has been paid to BSE Ltd.

29. DEMATERIALISATION

Trading of Equity Shares of the Company in dematerialized form is compulsory for all shareholders w.e.f. 28.08.2000 in terms of the Notification issued by SEBI. The Company has achieved higher level of dematerialization with 98.24% of the total number of Equity Shares being held in the electronic mode with two depositories (NSDL & CDSL).

30. PARTICULARS OF EMPLOYEES

The information required under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is set out in Annexure-V forming part of this Report.

31. CORPORATE GOVERNANCE REPORT

The Company has complied with the corporate governance requirements under the Companies Act, 2013, and as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate section on Corporate Governance under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forming part of this Annual Report is annexed as Annexure-VI. A certificate from M/s. Navneet K. Arora & Co.LLP, Practicing Company Secretary (COP No.3005) confirming the compliance of Corporate Governance is given in Annexure-VII forming part of this Annual Report.

32. MANAGEMENT DISCUSSION AND ANALYSIS

As per Regulation 34 of SEBI (Listing Obligations & Disclosure Requirements) Regulation, 2015, a separate section on Management Discussion and Analysis is set out in the Annexure-VIII forming part of this Report.

33. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

Adequate internal control systems, commensurate with size, scale and complexity of companys operations have been put in place to ensure compliance with policies and procedures. The Company has also adopted policies and procedures for ensuring the orderly and efficient conduct of its business, safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

The internal control mechanism comprises a well-defined organization, which undertakes time bound audits and reports its findings to the Audit Committee, documents policy guidelines and determines authority level and processes.

The Audit Committee regularly reviews the systems and operations to ensure their effectiveness and implementation. The Internal Auditors and Statutory Auditors regularly attend Audit Committee meetings and convey their views on the adequacy of internal control systems as well as financial disclosures. The Audit Committee is briefed about corrective actions taken by the management on the audit observations. The Audit scope is regularly reviewed by the Audit Committee for enhancement / modification of scope and coverage of specific areas. The Statutory Auditors review the internal financial controls periodically.

34. EVALUATION OF BOARD AND INDIVIDUAL DIRECTORS

The Board has carried out performance evaluation of itself, its committees, and each of the Directors (without participation of the concerned director). Independent Directors collectively evaluated the Boards performance, performance of the Chairman and other executive directors. The Nomination and Remuneration Committee also reviewed the performance of the Board, its Committees and of the Directors.

The performance evaluation concluded on the note that each of the individual directors, Committees and the Board as a whole, were performing efficiently and effectively and shared a common vision to turn organization goals into reality.

35. ACKNOWLEDGEMENTS

The Directors wish to place on record their appreciation for support and cooperation, which the Company continues to receive from its employees, customers, vendors, investors and academic partners, Government of India, Governments of various states in India, Governments of various countries and concerned Government departments and agencies for their co-operation.

The Directors also commend the continuing commitment and dedication of the employees at all levels, which has been critical for the Companys success. The Directors look forward to their continued support in future.

For and on behalf of the Board of Directors

Salora International Ltd.

(Gopal Sitaram Jiwarajka)

Chairman & Managing Director

DIN:00024325

Date: 25.05.2019

Place: New Delhi