The Directors have the pleasure in presenting the Thirty Ninth Annual Report along with the Audited Financial Statements of the Company for the year ended March 31,2024
The Information furnished hereunder is in line with Section 134 of the Companies Act 2013 and applicable Provisions contained in the SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015.
1. PERFORMANCE REVIEW:- Financial Summary of the Company
| Particulars | Standalone | Consolidated | ||
| For the year Ended March 31, 2024 | For the year Ended March 31,2023 | For the year Ended March 31,2024 | For the year Ended March 31,2023 | |
| I Revenue from operations | 1,13,557.55 | 1,01,316.68 | 1,16,631.43 | 1,03,717.24 |
| II Other Income | 193.23 | 137.26 | 194.76 | 170.10 |
| III Total Revenue (I + II) | 1,13,750.78 | 1,01,453.94 | 1,16,826.19 | 1,03,887.34 |
| IV Expenses | ||||
| a Cost of materials consumed | 87,604.26 | 81,827.82 | 88,846.68 | 82,694.88 |
| b Purchase of stock in trade | - | - | - | - |
| c Changes in inventories of finished goods, work-in-progress and stock-in-trade | -735.24 | -1,964.41 | -747.15 | -1,978.92 |
| d Employee benefit expenses | 4,229.11 | 3,514.73 | 4,664.28 | 3,936.54 |
| e Finance Cost | 3,367.26 | 2,605.69 | 3,408.58 | 2,611.89 |
| f Depreciation and amortization expense | 1,906.25 | 1,611.38 | 2,011.22 | 1,660.37 |
| g Other expenses | 11,439.34 | 8,824.47 | 12,169.66 | 9,474.56 |
| h Total Expenses | 1,07,810.98 | 96,419.68 | 1,10,353.27 | 98,399.32 |
| V Profit before exceptional and extraordinary items and tax | 5,939.80 | 5,034.26 | 6,472.92 | 5,488.02 |
| VI Exceptional Items | - |
- |
- | - |
| VII Prior Period Items | - | - | - | 1.52 |
| VIII Profit before tax & extraordinary items | 5,939.80 | 5,034.26 | 6,472.92 | 5,489.54 |
| IX Extraordinary items | - | - | - | - |
| X Profit before tax | 5,939.80 | 5,034.26 | 6,472.92 | 5,489.54 |
| XI Tax expense: | -1,621.16 | -1,398.07 | -1,766.36 | -1,527.68 |
| XII Profit for the period - After Tax | 4,318.64 | 3,636.19 | 4,706.56 | 3,961.86 |
| XIII Earnings per equity share: | ||||
| (1) Basic (in Rs.) | 25.77 | 22.74 | 27.38 | 24.21 |
| (2) Diluted (in Rs.) | 24.42 | 20.58 | 25.94 | 21.90 |
| XIV Reserves and Surplus | 44,868.41 | 38,671.12 | 45,607.87 | 39,152.81 |
2. BUSINESS SCENARIO IN THE YEAR
The financial year 2023-24 was marked by a number of significant developments in the Indian economy. The Indian economy showed robust growth, with GDP growth rate of 8.20%. Inflation remained a challenge, primarily due to global supply chain disruptions and rising commodity prices. Government initiatives to boost manufacturing through the schemes like Production Linked Incentive (PLI) schemes, played a crucial role forthe growth of the Industry The global economic environment had a mixed impact on India. While the recovery in major economies supported exports, geopolitical tensions and global inflationary pressures posed challenges. Overall, the financial year 2023-24 was a period of recovery and growth for the Indian economy, with significant strides in various sectors despite ongoing challenges
In this context, your Companys growth during the financial year 2023-24 aligned itself with the general trend of industrial growth in the country The Standalone revenue of the Company was Rs. 1137.51 crore, compared to Rs. 1014.54 crore in FY23, reflecting a 12.12% increase, primarily fuelled by the Industrial switchgear and wire & cable businesses.
The increasing demand for renewable energy sources such as solar, wind, and hydro power have opened new growth opportunities and demand for switchgear, transformers, wires and cables. Your Company has benefited from this development.
The Standalone Operating profit was Rs. 110.20 crore in FY24, compared to Rs. 91.14 crore in FY23, reflecting a year-on-year growth of 20.91%, primarily due to significant savings in operating expenses. The EBITDA Margin stood at 9.70%, showing a year-on-year improvement of 70 basis points, reaching a three-year high.
The Standalone Profit after Tax was Rs. 43.19 crore in FY24, an increase from Rs. 36.36 crore in FY23, representing a 19% rise over the previous year. The PAT Margin was 3.80% in FY24, showing a year-on-year improvement of 22 basis points and reaching a four-year high.
3. INDIVIDUAL DIVISIONS PERFORMANCE AND CONTRIBUTIONS
i) Industrial Switch Gear Division:
Our Industrial Switch Gear Products maintain a strong presence in both domestic and international markets. Over the years, your company has established a unique global niche. Several renowned multinational companies choose to source their supplies from Salzer. Additionally, your company is the exclusive approved supplier for the Nuclear Power Corporation and the leading provider of rotary switches and load break switches to Indian Railways.
The products under this division includes Cam Operated Rotary Switches, Load Break Switches (Disconnects), Toroidal Transformers, General Purpose Relays, Wire Harnesses, Three Phase Dry Type Transformers, Contactors, Overload Relays, Motor Protection Circuit Breakers (MPCB), MCBs, Terminal Connectors, Wiring Ducts, and Control Panels.
This division achieved a Compound Annual Growth Rate (CAGR) of 27% over the past five years, increasing its revenue contribution from 44% in 2019 to 55% in 2024.
In FY24, the Industrial Switch Gear division contributed 55% to the total revenue, with a 13% growth. The EBITDA Margin for this division was 12.64% in FY24, a 97 basis point improvement over the previous year, reaching a three-year high.
Three Phase Transformer business and the Wire Harness business grew by 43.4% and 44.2% respectively in Fy24.
Within this division, over 50% of the total sales revenue came from exports, which grew by 20% during the year.
ii) Wires and Cables
Your Company manufactures a wide range of Industrial wires &Cables from 0.5 sq mm to 300 sq mm - Building Wires, Flexible wires, Multi Core Cables, Flat cables, Traveling cables, Lan Cables,
UL rated Wires, Shielded & Braided Wires Halogen Free wires, Low smoke Wires etc.,
The Wire & Cables division contributed nearly 39% in FY24 and recorded a growth of 15% in the year, and EBIDTA Margin for this division stood at 6.92%.
iii) Building Products
The Building Products Division contributed 6% to our revenues in FY24. This business is the only B2C business where Salzer sells many electrical products for the Building sector. As the result of market related challenges, this division was not able to deliver any growth during the year. Various avenues are being examined to rejuvenate this Building Product division with sustainable future. The Division is expected to perform better in the current fiscal
4. EXPORT BUSINESS
In 2023-24, the Company generated 27% of its revenue from the export market, marking a significant 32% growth over the previous year. This impressive increase was primarily driven by the expansion of exports to the North America, Europe and Middle east. Notably, our exports to North America grew by 69%, and to Europe by 21%, highlighting the importance of these markets and the successful acceptance of our new product introductions. Despite facing political and economic challenges in the Middle eastern regions, this growth underscores the Companys strong focus on the export market and the recognition from our global customers for our product quality.
5. CONSOLIDATED FINANCIAL PERFORMANCE
On a consolidated basis, your company reported its highest-ever sales turnover of Rs. 1168.26 crore in FY24, compared to Rs. 1038.87 crore in FY23, marking a growth of 12.45%. EBITDA (excluding other income) stood at Rs. 116.98 crore in FY24, up from Rs. 95.90 crore in FY23, representing a YoY growth of 21.98%. This increase was primarily due to reduced raw material prices and higher sales prices. The EBITDA Margin was 10.03%, showing a YoY improvement of 78 basis points. Profit After Tax was Rs. 47.07 crore in FY24, compared to Rs. 39.62 crore in FY23, reflecting a YoY growth of 18.80%. The PAT Margin stood at 4.04% in FY24, a YoY improvement of 22 basis points.
6. KEY SIGNIFICANT DEVELOPMENTS IN THE YEAR - VENTURE INTO SMART METER BUSINESS
Salzers entry into the smart meter business is indeed a strategic move that aligns itself with the current trends in the energy sector. The Indian governments push towards digitalization and the modernization of the energy grid presents a substantial opportunity for growth and innovation. Heres a detailed overview of the venture and its potential impact:
Market Landscape
The Indian smart meter market is expanding rapidly, driven by several factors:
• Government Initiatives: Revamped
Distribution Sector Scheme (RDSS) is a government initiative in India aimed at improving the power distribution sector, particularly focusing on reducing the aggregate technical and commercial (AT&C) losses and improving the quality and reliability of power supply to consumers. The scheme also emphasizes the use of smart meters, which aligns with the broader goal of modernizing Indias power infrastructure..
• Energy Efficiency: Smart meters provide accurate, real-time data on energy consumption, enabling better demand management, reducing energy losses, and enhancing the reliability of the power grid.
• Consumer Benefits: Enhanced customer service, reduced electricity bills, and better control over energy usage.
Salzers Strategic Focus
Innovation and Product Range Expansion:
• Smart Meter Technology: By integrating advanced metering technology, Salzer aims to provide utilities and consumers with better control over energy consumption.
• Energy Conservation and Cost Savings: The
technology helps in monitoring and managing energy usage more efficiently, contributing to overall energy conservation efforts.
Manufacturing Capacity and Regulatory Approvals
Production Capacity:
• Annual Capacity: The new manufacturing facility in Coimbatore can produce 4 million meters annually in its first phase.
• Scalability: This capacity can potentially be increased to 10 Million meters to meet future demand.
Regulatory Approvals:
• Compliance: Salzer has secured approvals from key energy sector regulators, ensuring compliance and facilitating market entry
Strategic Partnerships and Market Penetration
Negotiations with AMISPs:
• Advanced Metering Infrastructure Service Providers: Salzer is in advanced stages of negotiations with several AMISPs, which will help in the widespread deployment of smart meters.
• Market Reach: These partnerships will enhance Salzers market penetration and establish it as a key player in the smart meter industry
Revenue Potential:
• Doubling Income: The venture into the smart meter business is expected to double Salzers income over the next three to four years, highlighting the substantial revenue potential.
• Sustainable Growth: This move supports Salzers long-term growth strategy by tapping into the growing demand for advanced metering solutions.
Salzers venture into the smart meter business is a well-timed and strategically sound decision, leveraging the growing market demand and government support for digitalization in the energy sector. With its robust manufacturing capacity, regulatory compliance, and strategic partnerships, Salzer is well-positioned to become a key player in the industry, driving innovation and growth in the smart metering landscape.
7. Future outlook
Salzers strategy for future growth is anchored in innovation, diversification, and geographical expansion. Here are the key factors driving future growth:
a. New Technology Products:
o Continuously seeking new technology products across all related business areas to stay ahead of the market trends.
o Focus on innovation to enhance product offerings and maintain a competitive edge.
b. Diversification of Product Portfolio:
o Emphasis on high-margin products, especially within the wires and cables division, to boost overall profitability.
o Introduction of three to five new products annually to cater to evolving market demands.
c. Geographical Expansion:
o Targeting new markets, particularly in Africa and Australia, to increase export revenue.
o Expanding global footprint to mitigate risks associated with market concentration and tap into emerging markets.
d. Strengthening Building Products Market:
o Enhancing market presence of building products to increase their revenue contribution.
o Strategic efforts to penetrate deeper into the building sector, leveraging existing capabilities and market knowledge.
e. Technical Alliances:
o Open to forming technical alliances with local and global partners to drive product development and innovation.
o Collaborations aimed at leveraging partner expertise and resources for mutual growth.
f. Inorganic Growth Opportunities:
o Exploring strategic acquisitions to accelerate growth and diversify the business portfolio.
o Identifying potential acquisition targets that align with Salzers strategic goals and can contribute to long-term growth.
By focusing on these strategic initiatives, Salzer aims to maintain its growth trajectory, enhance profitability, and solidify its position as a leading player in the industry. The commitment to innovation, market expansion, and strategic partnerships will be pivotal in achieving these growth objectives.
8. DIVIDEND
At the meeting held on May 28, 2024, the Board of Directors reviewed the proposal for a dividend for the financial year ending March 31, 2024. They recommended a dividend rate of 25%, or Rs. 2.50 per equity share of Rs. 10 each, for the financial year 2023-24. This recommendation entails a cash outflow of Rs. 4.42 Crores.
If this recommended dividend is approved at the Annual General Meeting, it will be paid to all eligible shareholders whose names appear in the Register of Members on the record date, within the time frame permitted underthe Companies Act, 2013
9. CAPITAL STRUCTURE AND OTHER RELATED ISSUES
I) Preferential issue of securities
a) Your Board, in order to meet working capital requirements and other general purposes, with the approval of the shareholders through an Extra Ordinary General Meeting held on December07, 2022, allotted 17,00,000 Share warrants at an issue Price of Rs.278.50/- for an aggregate cash consideration of Rs.47.35 Crs on December 13,2022 to the Bodies Corporate forming part of the Promotors group in accordance with SEBI (Issue of Capital and Disclosures Requirements) Regulation 2015. The allotted warrants were convertible into similar number of equity shares within 18 months of allotment
b) As on the date of this report, The subscribers of the warrants converted their entire 17,00,000 into equity shares by paying requisite amount within the stipulated time.
c) There is no deviation or variation in the use of proceeds from the preferential issue of warrants, from the objects as stated in the Explanatory Statement to the Notice of the EGM dated November 10,2022.
d) Details of utilization of funds in terms of Regulation 32 (7A) of the Listing Obligations and Disclosure Requirements) Regulations as on this date of the report:
ii) Increase in the Share Capital
Consequent to the allotment of 12,00,000 equity shares during the financial year, the issued, subscribed and paid up capital of the Company increased from Rs.16,18,27,370/- comprising of 1,61,82,737 equity shares of Rs.10/- each to Rs.17,38,27,370/- comprising of 1,73,82,737 equity shares of Rs.10/- each.
iii) Amendment to the Memorandum and Articles of Association
During the year under review, your Company has not amended any Provisions in the Memorandum and Articles of Association.
10. CORPORATE GOVERNANCE
As required under Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, a separate section on corporate governance practices followed by the Company, together with a certificate from the Companys Auditors confirming compliance are attached to this report as Annexure: 1
11. RESERVES
Your Board of Directors, as a prudent measure, have transferred Rs.2.50 Crs to the General Reserve Account. Now, your Company has general reserves of Rs. 23.58 Crores Lakhs as at March 31,2024.
12. LIQUIDITY
The Company has adequate cash and cash equivalents in its Books as at March 31, 2024 to effectively take care of all current liabilities.
13. CHANGE IN THE NATURE OF BUSINESS, IF ANY
During the year, the nature of the business of your Company - Manufacturing of Electrical Installation Products- has not changed.
14. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
There were no material changes and commitments affecting the financial position of the Company
| Particulars | f In Lakhs |
| Funds raised out of the preferential issue of 17,00,000 equity shares at an issue Price of Rs.278.50 per share (A) | 4,734.50 |
| Funds utilization towards working capital requirements and other general corporate purposes (B) | 4,734.50 |
| Balance un-utilized Funds (A-B) | - |
which have occurred between the end of the financial year of the Company to which financial statements relate and the date of this report.
15. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE
During the year under review and also upto the date of this report, no orders were passed by any Court in India or by any Regulator or by any Tribunal affecting the going concern status and the Companys operations in future.
16. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS.
The organization has implemented effective and progressive systems to maintain robust internal financial controls, ensuring stability and accurate financial reporting. These systems are regularly reviewed and formalized into work policies. To enhance reliability, there is an ongoing effort to automate many of these processes, thereby improving the efficiency of the Financial Control Systems.
The Companys accounting policies comply with the Indian Accounting Standards as notified under Section 133 of the Companies Act, 2013, along with the Companies (Indian Accounting Standards) Rules, 2015. Any policy changes must be approved by the Audit Committee in consultation with the Statutory Auditors.
Recognizing the dynamic nature of business, the Company has identified inherent reporting risks for each major element in the financial statements and established controls to mitigate these risks. These controls and risks are periodically reviewed in response to changes in business operations, IT systems, regulations, and internal policies. The corporate accounts function plays a role in designing significant process changes and validating changes to IT systems that impact financial systems.
The internal check system includes the physical verification of inventory, fixed assets, and cash on hand, with any discrepancies addressed according to established procedures. No discrepancies were found during the year under review.
In preparing its financial statements, the Company makes judgements and estimates based on sound policies, utilizing external agencies for verification and validation when necessary. These judgements and estimates are also approved by the Audit Committee in consultation with the Statutory
Auditors. The Company maintains a wellfunctioning internal audit system, overseen by the External and Internal Auditors, who periodically report any significant changes or deviations from procedures to the Audit Committee.
The Company enforces a Code of Conduct for all employees and Board of Directors. Additionally, there is a Whistle Blower Policy in place that allows employees to report concerns regarding any improper acts orviolations of the Code of Conduct, including fraud and scams etc., to the Chairman of the Audit Committee
17. DETAILS OF SUBSIDIARY/JOINT VENTURES/ ASSOCIATE COMPANIES
With reference to the shareholdings held by the Company as at March 31,2024, your Company has Two Subsidiaries - Kaycee Industries Limited, Salzer Kostad EV Charges Private Limited; One wholly Owned Subsidiary- Salzer EV Infra Private Limited and One Step down Subsidiary - Salzer Emarch Electromobility Private Limited.
Performance Analysis of Subsidiary and Associate Entities
a) Kaycee Industries Limited- Subsidiary Company
> In FY2024, Kaycee Industries Limited posted a growth of 17% with Sales turnover of Rs.48.81 Crs as against Rs. 41.78 Crs reported in Fy23.
> The profit also has grown significantly well by 29% as the result of better operational efficiency and optimization of costs.
> Kaycee is totally Debt free Company and operating its business with strong cash generation.
> During the year, your Company diluted 0.35% holding in Kaycee. Post this development, your Company holds now stands 73.51% of Kaycees shares.
> The Board of Directors of Kaycee at their meeting held on May 28, 2024 approved the Annual Financial Results of FY24 and recommended a normal Dividend of Rs.60/- (60%) per share and special dividend of Rs.40/- (40%) per share, totaling Rs.100/- (100%) per equity share of Rs.100 each forthe financial year 2023-24
> Board of Directors of Kaycee, at their meeting held on May 28, 2024, has also approved, subject to the further consent of the shareholders, sub division of present 63,470 equity shares of Rs.100/- each into 6,34,700 Equity shares of Rs.10/-each and a bonus issue of 4:1.
> The Financial Highlights of Kaycee
THE FINANCIAL PERFORMANCE OF SUBSIDIARY COMPANY FOLLOWS AS UNDER
b) Salzer Kostad EV Charges Private Limited -Subsidiary Company
Salzer Kostad EV Chargers, one of the subsidiary engaged in business of making Fast Charging Station, has faced some challenges in the certification process at ARAI. Chargers are being tested at ARAI for certification. In this process, it has encountered a small setback. Out of the total 14 different tests that the charges have to undergo at ARAI, it has successfully passed 13 tests. Despite a minor setback, the Company is working diligently with its partners to address the issue and expect progress soon.
During the year, your Company subscribed 5,55,000 equity shares of Rs.10/- for a cash consideration of Rs.55,50,000/- and thereby took its equity stake in the Company to 67%.
c) Salzer EV Infra Private Limited (Wholly owned subsidiary) and Salzer EMarch Electromobility Mobility Pvt. Ltd (Step down subsidiary)
Your company, through its wholly owned subsidiary, Salzer EV Infra Pvt. Ltd., formed a JV named Salzer EMarch E Mobility Pvt. Ltd., in association with EMarch LLP This JV is engaged in manufacturing electric conversion kits for auto-rickshaws, cars and buses and also the manufacture novel electric driven utility vehicles.
During the year, your Company subscribed 35,000 equity shares of Rs.10/- for a cash consideration of Rs.3,50,000/- and
No significant development took place in the JV Company
18. DEPOSITS
During the Financial year under the review, your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act 2013 read with Companies (Acceptance of Deposits) Rules, 2014. As such there was no deposit outstanding as at March 31,2024.
19. STATUTORY AUDITORS
In terms of Proviso to Section 139 (1) of the Companies Act 2013, and with the approval of the shareholders at their meeting held on August 10, 2019, M/s. JDS Associates, Chartered Accountants, were appointed as the Statutory Auditors of the Company, for a term of five years immediately after conclusion of the 34th Annual General Meeting till the conclusion of the 39th Annual General Meeting for the financial year 2023-24.
Noticing the fact of the vacation of the office by above existing statutory auditors by the date of the 39th Annual General Meeting scheduled to be held on September 14, 2024 your Board, based on the recommendation of the Audit Committee and subject to the approval of the members, approved the appointment of M/s. Swamy & Ravi, Chartered Accountants (FRN:004317S), as the Statutory Auditors of the Company for a term of Five years immediately after conclusion of the 39th Annual General Meeting till the conclusion of the 44th Annual General Meeting for the financial year 2028-29.
M/s. Swamy & Ravi, vide its letter dated April 25, 2024, has given their Consent to become the Statutory Auditors and confirmed to the effect that
The Audit Firm is eligible to be appointed as Statutory Auditor, and has not incurred any disqualifications under the Companies Act 2013;
The Audit Firm is not disqualified for appointment under the provisions of Chartered Accountants Act, 1949 and rules and regulations made there under;
The proposed appointment is as per the terms provided under the Companies Act 2013;
The proposed appointment is within the limits laid down by or under the authority of the Companies Act 2013;
No orders have been issued and there are no proceedings pending against the firm with respect to professional matters of conduct before the Institute of Chartered Accountants of India, any competent authority, or any court and
The Firm has been subjected to the peer review process of the Institute of Chartered Accountants of India (ICAI) and holds a valid certificate issued by the Peer Review Board of the ICAI.
20. INVESTMENTSMADEBYTHECOMPANY
The Company has adequate measures to review the significant impact by way of any increase/ decrease of the fair value of the investments and accordingly being dealt with in the financial statements of the Company Reference to the details of investments made by the Company is available in the Notes on accounts.
21. AUDITORSREPORT
The Independent Audit Report along with the Annexure as prescribed under Companies (Auditors Report) Order 2020 as issued by the Auditors are appended to this Annual Report. The Auditors have not made any qualification / adverse remarks.
22. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION (12) OF SECTION 143 OF THE COMPANIES ACT 2013
There were no instances of fraud reported by the Auditors to the Central Government or to the Audit Committee of the Company as indicated under the provisions of Section 143 (12) of the Companies Act, 2013.
23. MAINTENANCE OF COST RECORDS UNDER SUB-SECTION (1) OF SECTION 148 OF THE COMPANIES ACT, 2013
Pursuant to the provisions of Section 148 (1) of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, the Company was required to maintain cost records. Accordingly, the Company has duly made and maintained the Cost Records as mandated by the Central Government.
24. EXTRACT OF THE ANNUAL RETURN
The extract of the annual return in form No. MGT - 7 forms part of the Boards report given in the companys website www.salzergroup.net in compliance with Rule 12(1) of the Companies (Management and Administration) Rules, 2014.
25. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The details of conservation of energy, technology absorption, foreign exchange earnings and outgo given as Annexure- 2 herewith separately
26. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has constituted a CSR Committee of the Board of Directors and has adopted a CSR Policy The same is posted in the Companys website www.salzergroup.net A report in the prescribed format detailing the CSR expenditure for the year 2023-24 is attached herewith as Annexure-3 and forms a part of this report
27 DIRECTORS:
A) Changes in Directors and Key Managerial Personnel
During the year under review, the Board of the Company (based on the recommendation of the Nomination & Remuneration Committee) had appointed Mrs. Priya Bhansali (DIN: 00195848) and Mr. Sharat Chandra Bhargava (DIN: 00008146) as Independent Directors of the Company for a term of 3 (three) consecutive years w.e.f. August 7, 2023. The Shareholders of the Company approved the said appointment with an overwhelming majority at the 38th AGM of the Company Mr. S.Baskarasubramanian resigned from his position of Director (Corporate Affairs), Company Secretary & Compliance Officer of the Company w.e.f August 07, 2023 due to personal reasons.
Mr. K.M.Murugesan was appointed as the Company Secretary & Compliance Officer of the Company w.e.f from August 08, 2023.
On May 28, 2024 Mr. Sunder Rajan Raman was appointed as an Additional Director (Independent Director) of the Company, which is subject to shareholders approval, for a term of five years.
As on date of this report (i.e. May 28, 2024) your Board is having 13 members - Three Executive Directors, Two Non-Executive and Non Independent Directors and eight Independent Directors.
B) Retirement by Rotations
Mr. D.Rajeshkumar (DIN: 00003126) and Mr. D.Vishnu Rangaswamy (DIN: 00793090) who are the retiring Directors in the ensuing 39th Annual General Meeting, offer themselves to get reappointed in pursuance of Section 152 of the Companies Act 2013 read with Article 178 of the Articles of Association of the Company.
C) Declaration by the Independent Directors
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 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015. The Board has optimum composition of the Independent and Non Independent Directors.
D) Formal Annual Evaluation
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, mandates that the Board shall monitor and review the Board evaluation framework. The framework includes the evaluation of directors on various parameters such as: -
• Board dynamics and relationships
• Information flows
• Decision-making.
• Relationship with stakeholders
• Company performance and strategy
• Tracking Board and committees effectiveness
Peer evaluation
The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the director being evaluated. The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The evaluation process has been explained in the corporate governance report.
E) Committees of the Board.
Currently, the Board has five committees: the Audit Committee, the Nomination and Remuneration Committee, the Corporate Social Responsibility Committee, Stakeholders Relationship Committee, and the Risk Management Committee. A detailed note on the composition of the Board and its committees is provided in the corporate governance report section of this Annual Report.
28. LISTING REGULATIONS
Your Company has duly complied with various Regulations as prescribed under SEBI (Listing obligations and Disclosures) Regulations 2015.
29. MEETINGS
The details in respect of the Meeting of the Board of Directors, Audit Committee and all other sub Committee are given in the Corporate Governance Report.
30. WHISTLE BLOWING POLICY MECHANISM
A whistle blowing policy mechanism has been in place providing opportunity to Directors/Employees
> To access in good faith, to the Audit Committee in case they observe unethical and improper practices or any other wrongful conduct in the Company,
> To prohibit managerial personnel from taking any adverse personnel action against those employees and
> To provide necessary safeguards for protection of employees from reprisals orvictimization
This policy applies to all directors and employees of the Company to report concerns about unethical behaviour, actual or suspected fraud or violation of the companys code of conduct or ethics policy
To report such incidents, practices etc., the concerned Employees / Directors can contact / report to
| Office of the Audit Committee (Compliance Officer) |
| E-Mail: murugesan@salzergroup.com |
| Contact No. 0422 4233614 |
| Office of the Managing Director |
| E-Mail : rd@salzergroup.com |
| Contact No.0422-4233612 |
| Office of Joint Managing Director and Chief Financial Officer |
| E-Mail: rajesh@salzergroup.com |
| Contact No.0422-4233610 |
During the year under review, no complaint was received by the above officers under whistle blowing policy mechanism with respect to the performance of the company and other related matters.
31. PREVENTION OF SEXUAL HARASSMENT AT THE WORK PLACE
The Company has constituted an Internal Committee (IC) in all the Units to consider and resolve all sexual harassment complaints reported by women. The constitution of the IC is as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
During the year under review, the Committee has not received any complaint.
32. NOMINATION AND REMUNERATION COMMITTEE
The purpose of the committee is to screen and to review individuals qualified to serve as executive directors, non-executive directors and independent directors, consistent with policies approved by the Board, and to recommend, for approval by the Board, nominees for election at the AGM.
The committee also makes recommendations to the Board on candidates for
Ci) nomination for election or re-election by the shareholders; and
(ii) any Board vacancies that are to be filled.
It also reviews and discusses all matters pertaining to candidates and evaluates the candidates. The Nomination and Remuneration Committee coordinates and oversees the annual selfevaluation of the Board and of individual directors.
The nomination and remuneration committees charterand policy are available on our website.
33. POLICY ON THE DIRECTORS APPOINTMENT AND REMUNERATION
As of March 31, 2024, Salzers Board comprises thirteen members, including three Executive Directors, two Non-Executive and NonIndependent members, and eight Independent Directors. The Board also includes two Women Directors, one of whom serves as an Independent Director. Salzer adheres to its Policy for Nomination and Remuneration in accordance with Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and complies with the criteria for directors appointment and remuneration as stipulated under Section 178(3) of the Companies Act, 2013, which is available on the companys website."
We affirm that the remuneration paid to the directors is as per the terms laid out in the Nomination and Remuneration Policy of the Company.
34. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
During the year under review,
• During the year, the Company has not granted/taken loans, unsecured, from or to Companies, firms or other parties, listed in the Register maintained under section 189 of the Companies Act, 2013 (the Act). and
• The investments in other bodies corporate are well within the limit as prescribed under Section 186 of the Companies 2013.
35. RELATED PARTY TRANSACTIONS
All the transactions of the Company with related parties are at arms length and have taken place in the ordinary course of business. None of the transactions with related parties is a material transaction. Since there are no transactions that are not in arms length and material in nature, disclosure under AOC 2 does not arise. The Board approved Related Party Transaction Policy is available at the Companys website www.salzergroup.net
36. INSIDER TRADING
In compliance with SEBI (Prohibition of Insider Trading) Regulations 2015, as amended, the Company has a comprehensive Code of Conduct to Regulate, Monitor and Report Trading by an Insider and the same is being strictly adhered to by the Designated persons (DPs) while dealing in Companys securities in excess of the threshold limit as defined under this Code. The Company also has in place a Code of Practices and Procedures for fair disclosure of "Unpublished Price Sensitive Information" CUPSI).
The Company follows closure of trading window from the end of every quarter till 48 hours the UPSI made public. The Company has been advising the DPs covered by the Code not to trade in Companys securities during the closure of trading window period. The Company has set up a mechanism for tracking of the dealings of equity shares of the Company by the DPs and their immediate relatives having access to unpublished price sensitive information.
In addition, the Company is also closing the trading window for considering the UPSI at the Board meeting and advising the DPs connected with such UPSI. Further, In line with SEBI Circular, the Demat Account of the DPs are getting frozen at end of every quarter until the financial results are disclosed.
The Audit Committee also reviewed the Institutional Mechanism for Prevention of Insider trading and the systems for internal control as per Regulation 9A of the SEBI (Prohibition of Insider Trading) Regulations 2015.
The Company has installed necessary software for maintaining a Structured Digital Database as per the circulars issued by the SEBI. The Company regularly shares the importance of recording the UPSI to the DPs concerned. All DPs have been requested to share emails or any communication containing UPSI with others only for legitimate purposes.
37. MANAGERIAL REMUNERATION
A) The Company has employed individuals whose remuneration falls within the purview of the limits prescribed under the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
Details pursuant to section 197(12) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 form part of this Report and are annexed herewith as Annexure - 4.
B) The Company does not have such director who is in receipt of any commission from the company and who is a Managing Director or Whole-time Director
of the Company and further receiving any remuneration or commission from any Holding Company or Subsidiary Company of such Company
38. SECRETARIAL AUDIT REPORT
In terms of Section 204 of the Companies Act,
2013, the Board of Directors, at their meeting held on May 24, 2023, appointed Mr. G Vasudevan, B.Com, LLB & FCS, M/s.G V Associates, Company Secretaries (Certificate of Practice No. 6522), as the Secretarial Auditor to conduct an audit of the secretarial records, for the financial year 2023-24 in terms of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014.
The Secretarial Audit Report for the financial year ended 31st March, 2024 is set out in the Annexure - 5 to this report.
The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
39. COMPLIANCE ON SECRETARIAL STANDARDS
The Company complies with all applicable mandatory secretarial standards issued by the Institute of Company Secretaries of India.
40. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“the IEPF Rules”), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF, established by the Government of India, after the completion of seven years. Further, according to the Rules, the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority. During the year, the Company has transferred the unclaimed and unpaid dividends of Rs. 5,20,740/-. Further 7,591 corresponding shares on which dividends were unclaimed for seven consecutive years were transferred as per the requirements of the IEPF rules. The details are available on our website at www.salzergroup.net. The Details of the nodal officer: Mr. K. M. Murugesan, E.mail ID.
murugesan@salzergroup.com
41. RISK MANAGEMENT POLICY
Risk management is attempting to identify and manage threats that could severely impact or bring down the organization. Generally, this involves reviewing operations of the organization, identifying potential threats to the firm and the likelihood of their occurrence, and then taking appropriate actions to address the most likely threats. In order to tackle such risks emanating during the course of business operation, the Board of Directors, constituted Risk Management Committee with an objective of identifying the potential threats that are likely to impact the growth of the organization and evolve suitable measure strategically to mitigate such identified Risks.
Accordingly, the operating management review the risk profile which has got impact on the performance of the company in accordance with the policy of the company on Risk Management and also in compliance with the relevant regulations thereof on a periodical basis.
42. MANAGEMENTS DISCUSSION AND ANALYSIS REPORT
In terms of the provisions of Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Managements discussion and analysis is set out in this Annual Report as Annexure- 6.
43. COST AUDITOR
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Directors, on the recommendation of the Audit Committee and subject to the approval of the Members, have appointed CMA Mr.A.R.Ramasubramania Raja, Practicing Cost and Management Accountant, as the Cost Auditor of the Company for the Financial Year 2023-24 to conduct the audit on the Maintenance of Cost Records of the Company and submit the report to the Central Government with the due approval of the Board of Directors within the stipulated time.
44. POLICIES OF THE COMPANY
The Company is committed to good corporate governance and has consistently maintained its organizational culture as a remarkable confluence of high standards of professionalism and building shareholder equity with principles of fairness, integrityand ethics.
The Board of Directors of the Company have from time to time framed and approved various Policies as required by the Companies Act, 2013 read with the Rules issued thereunder and the Listing Regulations. These Policies and Codes are reviewed by the Board and are updated, if required.
Some of the key policies adopted by the Company are as follows:
a) Policy on Materiality of Related Party Transactions
b) Corporate Social Responsibility Policy
c) InsiderTrading Policy
d) Nomination and Remuneration Policy
e) Policy on Related Party Transactions
f) Risk Management Policy
g) Policy on prevention of sexual harassment at workplace
h) Whistle Blower Policy
I) Policy on payment of remuneration to Non
Executive Directors
j) Policy on Familiarization Program for the NonExecutive Directors
k) Policy on Determination of materiality of events/ information
l) Policy for Preservation of Records
m) Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information
n) Policy on Subsidiary & Material Subsidiary Company
45. DIRECTORS RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act, 2013, your Directors make the following statements:
> that in the preparation of the annual financial statements for the year ended March 31, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
> that such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2024 and of the profit and loss of the company for that period;
> that proper and sufficient care has been taken 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;
> that the annual financial statements have been prepared on a going concern basis;
> that internal financial controls are being followed by the company and that such internal financial controls are adequate and were operating effectively.
> that systems to ensure compliance with the provisions of all applicable laws are in place and are adequate and operating effectively
46. CREDIT RATINGS
During the year under review, the credit ratings have reaffirmed as CRISIL A/Stable for long term borrowing and CRISIL A1 for short term borrowings.
47. INDUSTRIAL RELATIONS
During the year under review, industrial relations at all the Companys units have continued to remain cordial and peaceful.
48. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR
Not Applicable
49. DETAILS OF 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
Not Applicable
50. CAUTIONARY STATEMENT
Statements in the Annual Report, particularly those which relate to Management Discussion and Analysis, describing the Companys objectives, projections, estimates and expectations, may constitute forward looking statements within the meaning of applicable laws and regulations. Although the expectations are based on reasonable assumptions, the actual results might differ.
51. ACKNOWLEDGEMENTS
We sincerely thank our shareholders, government agencies, bankers, customers, suppliers, and all stakeholders for their steadfast support. We also recognize and appreciate the dedication of our employees at every level.
| For and on behalf of the Board | |
| N RANGACHARY | |
| Place : Coimbatore | CHAIRMAN |
| Date : May 28, 2024 | DIN : 00054437 |
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