Salora International Ltd

Dear Members,

Your Director's are pleased to present 55th Annual Report on the business and operations of Salora International Limited along with the summary of the Audited Financial Statements for the financial year ended 31st March, 2024.

1. FINANCIAL PERFORMANCE AND THE STATE OF THE COMPANY'S AFFAIRS

The financial highlights of your Company for the financial year ended March 31, 2024 are summarized below:

(? in lakh)

Note: The figures have been re-grouped / re-classified wherever necessary.

2. REVIEW OF OPERATIONS AND FUTURE PROSPECTS

The Company had operated in a highly competitive and volatile market during the financial year ended March 31, 2024. Rapid changes in consumer preferences and technological advancements have necessitated adjustments in our product offerings and business strategies, often requiring significant investments.

During the period under review, the Company has achieved revenue from operation of Rs. 15912.45 lacs in the current financial year 2023-24 as compared to 11605.86 lacs in the last financial year. The Company has suffered with operating loss of Rs. 106.68 lacs against the operating loss of Rs. 291.63 lacs incurred during the last financial year.

The Company remains committed to streamline its operational processes to improve efficiency and reduce costs. The Company has launched some new products in the market like Neckband, Chargers, Smart-watches etc., by which the Company expects to scale up its business operations and revenue.

3. MANAGEMENT DISCUSSION & ANALYSIS REPORT

The Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of this Annual Report.

4. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

There is no subsidiary, associate company and joint venture during the financial year ended March 31, 2024.

5. DIVIDEND

The Board of Directors has not recommended any dividend on the equity shares for the Financial Year ended March 31, 2024 considering the loss incurred.

6. TRANSFER TO RESERVES

During the year under review, no amount was transferred to the General Reserves of the Company.

7. SHARE CAPITAL

During the year under review, there was no change in Authorized Share Capital of the Company, amounting to Rs. 20,00,00,000/- (Rupees Twenty Crore only) divided into 2,00,00,000 Equity Shares of Rs. 10/- each and also no change in Paid-up share capital of the Company, amounting to Rs. 8,80,73,000/- (Rupees Eight Crore Eighty Lacs Seventy-Three Thousand only) divided into 88,07,300 Equity Shares of Rs. 10/- each

8. UTILIZATION OF FUNDS

During the year under review, the Company has not raised any funds through any mode.

9. DEMATERIALIZATION OF SHARES

As on 31st March, 2024, there were approximately 86,44,817 Equity Shares dematerialized through depositories viz. National Securities Depository Limited and Central Depository Services (India) Limited, which represents about 98.15% of the total listed capital of the Company.

10. DISCLOSURE RELATING TO EQUITY SHARES WITH DIFFERENTIAL RIGHTS

The Company has not issued any equity shares with differential rights during the year under review and hence no information as per provisions of Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

11. DISCLOSURE RELATING TO SWEAT EQUITY SHARES

The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

12. LISTING FEES

The listing fees payable for the F.Y. 2023-24 has been paid to BSE Limited within due date.

13. VIGIL MECHANISM

The Company has adopted a Whistle Blower Policy establishing vigil mechanism for Directors and Employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct. The mechanism provides for adequate safeguards against victimization of effected Director(s) and Employee(s). In exceptional or appropriate cases, Directors and Employees have direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company have been denied access to the Audit Committee.

14. REGISTRAR AND SHARE TRANSFER AGENT

The Share Transfer and related activities are being carried out by M/s Skyline Financial Services Private Limited, Registrar and Share Transfer Agent from the following address: -

15. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

As on March 31, 2024, there was no unclaimed dividend which are required to be transferred to Investor Education and Protection Fund.

16. HUMAN RESOURCES MANAGEMENT

Our professionals are our most important assets. We are committed to hiring and retaining the best talent being among the industry's leading employers. For this, we focus on promoting a collaborative, transparent and participative organization culture, and rewarding merit and sustain high performance. Our human resources management focuses on allowing our employees to develop their skills, grow in their career and navigate their next.

17. APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE

As on the date of the Report no application is pending under the Insolvency and Bankruptcy Code, 2016 and the Company did not file any application under (IBC) during the Financial Year 2023-24. Further, the Company has not made any one-time settlement.

18. CHANGE IN THE NATURE OF BUSINESS ACTIVITIES

During the year under review, there has been no change in the nature of the business of the Company.

19. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no 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 this report.

20. COMPOSITION OF THE BOARD & KMP

As on date of this report, the Company's Board comprises of six (6) directors, out of which three directors are Independent and Non-Executive and remaining three are Executive Directors including one-woman director. The composition of the Board is in conformity with the provisions of the Companies Act, 2013 and relevant Regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015. None of the Key Managerial Personnel (KMP) of the Company is holding office in any other Company as a Key Managerial Personnel. None of the Directors / KMP of the Company is disqualified under any provision of the Companies Act, 2013 and relevant Regulations of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. During the year under review, there was no change in the Board of Directors ("Board") or in key managerial personnel of the Company. The Company has received declarations from all Independent Directors of the Company that they meet the criteria of independence as prescribed under subsection (6) of Section 149 of the Act and under Regulation 16 and 25 of SEBI Listing Regulations and there has been no change in the circumstances affecting their status as independent director of the Company.

The Company recognizes and embraces the importance of a diverse board in its success. Your Company believes that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help it, retain its competitive advantage.

21. DIRECTORS' RESPONSIBILITY STATEMENT

Your Director's state that:

i) in the preparation of the annual accounts for the year ended 31st March, 2024, the applicable accounting standards have been followed and there are no material departures from the same;

ii) 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 as at 31st March, 2024 and of the profit of the Company for the year ended on that date;

iii) 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;

iv) the Directors have prepared the annual accounts on a "going concern basis";

v) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

22. DISCLOSURE ON MEETINGS OF THE BOARD AND ITS COMMITTEES BOARD MEETINGS

There were 4 (four) meetings of the Board of Directors of the Company held during the financial year 2023-24. A detailed note on the composition of the Board is provided in the Corporate Governance Report. The maximum interval between any two meetings did not exceed 120 days as prescribed in the Companies Act, 2013.

MEETINGS OF COMMITTEES OF THE BOARD

As on March 31, 2024, the Board had 3 (Three) Committees viz: Audit Committee, Nomination and Remuneration Committee, Stakeholder Relationship Committee. A detailed note on the composition of committees of the Board is provided in the Corporate Governance Report that forms part of this Annual Report.

BOARD EVALUATION

Nomination and Remuneration Committee has laid down the criteria for evaluation of performance of the Board, its committees and the directors. In compliance with Sections 134, 178 of, and Paras II, V and VIII of Schedule IV to, the Act and Regulation 17 of Para A of Part D of Schedule II to SEBI Regulations 2015, the Board of Directors, as per the process recommended by the Nomination and Remuneration Committee, has evaluated the effectiveness of the Board, its Committees and Directors. The evaluation process invited graded responses to a structured questionnaire, which was largely in line with the SEBI Guidance Note on Board Evaluation, for each aspect of the evaluation. All the results were satisfactory.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

The Company has formulated a programme for Familiarization of Independent Directors with regard to their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates etc.

During the year under review, the Independent Directors met on February 07, 2024 inter alia, to:

i) Review the performance of Non-Independent Directors, and the Board of Directors as a whole;

ii) Review the performance of the Chairman of the Company, taking into account the views of the Executive and Non-Executive Directors.

iii) Assess the quality, content and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

All the Independent Directors were present at the said meeting. The observations made by the Independent Directors have been adopted and put into force.

23. COMPANY'S VARIOUS POLICIES AND CODE OF CONDUCT

In accordance with the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013 the Company has formulated and implemented the following policies:

24. CORPORATE GOVERNANCE

Maintaining high standards of Corporate Governance has been fundamental to the business of the Company. As per Regulation 34 read with Schedule V of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a separate section on corporate governance practices followed by the Company forms an integral part of this Annual Report is annexed to this report as Annexure VI.

The requisite certificate from M/s. SVR & Co., Practicing Company Secretaries certifying compliance with the conditions of Corporate Governance as stipulated under relevant Regulations of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, is annexed as Annexure IX with the report on Corporate Governance.

A Certificate of the CEO and CFO of the Company inter-alia, confirming the correctness of financial statements and cash flow statements, adequacy of internal control measures and reporting of matters to the Audit Committee is annexed to this report as Annexure VIII.

25. AUDITORS & THEIR REPORTS:

Statutory Auditors:

The Members at their 53rd Annual General Meeting (AGM) of the Company held on 28th September, 2022 had appointed M/s. R. Gopal & Associates, Chartered Accountants, (Firm Registration No.000846C), as Statutory Auditors of the Company to hold office for second term of five consecutive years i.e. from the conclusion of 53rd AGM till the conclusion of 58th Annual General Meeting of the Company to be held in 2027.

The Auditor's Report on financial statements of financial year 2023-24 forms part of this Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

The observations/comments made by the Statutory Auditors in their Audit Report for the financial year 2024-25 are self-explanatory and therefore do not call for any further clarification/comments.

However, the Company received a letter of resignation from M/s. R. Gopal & Associates, Chartered Accountants, on 14th August 2024, citing unable to accept proposed fees reduction as the reason for their resignation. The resignation of M/s. R. Gopal & Associates, Chartered Accountants, was effective from 14th August 2024 and it was consider and approved by Board of directors in the Board meeting held on 24th August 2024.

Despite their resignation, M/s. R. Gopal & Associates, Chartered Accountants, had completed the audit for the financial year ended 31st March 2024, and the financial statements, including the Balance Sheet, were signed by them prior to their resignation. The Company extends its appreciation to M/s. R. Gopal & Associates, Chartered Accountants, for their services during their tenure.

The Board of Directors, upon the recommendation of the Audit Committee, has appointed M/s. O P BAGLA & CO. LLR Chartered Accountants (Firm Registration No. AAM-4855), as the Statutory Auditors of the Company to fill the casual vacancy caused by the resignation of M/s. R. GOPAL & ASSOCIATES. The appointment is subject to the approval of shareholders at the forthcoming Annual General Meeting

Internal Auditors:

On recommendation of Audit Committee, Board of Directors of the Company has appointed M/s. SCV & Co. LLP, Chartered Accountants as internal auditors of the Company to conduct internal audit for the financial year 2023-24. Internal Audit Report is submitted to the Audit Committee of the Board periodically.

Secretarial Auditor:

On recommendation of Audit Committee, Board of Directors of the Company had appointed M/s. SVR & Co., Practicing Company Secretaries (Membership No. F10704, CP No.14600) as Secretarial Auditors to conduct the secretarial audit of the Company for the financial year ended 31st March, 2024 as per provision of Section 204 of the Companies Act, 2013 read with Rules framed thereunder. The Secretarial Audit Report in Form MR-3 is given as Annexure- II and forms part of this Report. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

The observations/comments if any made by the Secretarial Auditors in their Report for the financial year 2023-24 are self-explanatory and therefore do not call for any further clarification/comments.

Annual Secretarial Compliance Report:

Pursuant to the provisions of Regulation 24A of the SEBI Listing Regulations read with SEBI Circulars issued in this regard, the Company has undertaken an audit for the financial year 2023-24 for all applicable compliance as per SEBI Regulations and Circulars/guidelines issued thereunder. The Annual Secretarial Compliance Report duly signed by M/s. SVR & Co., Practicing Company Secretaries (Membership No. F10704 CP No.14600) was submitted to the Stock Exchange (BSE) within stipulated time as per SEBI Listing Regulations.

Cost Auditors:

M/s. Gurvinder Chopra & Co. Cost Accountants carried out the cost audit for applicable business during the year. The Board of Directors of the Company have appointed M/s. Gurvinder Chopra, Cost Accountants as Cost Auditors for financial year 2023-24 at its meeting held on May 25, 2023 at a remuneration as set out in the Notice. 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. As required under Section 148(2) of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, Company have audited its cost accounting records audited by a Cost Auditor.

The Company has maintained required cost accounts and records as prescribed under Section 148(1) of the Companies Act, 2013 and the Cost audit report for the F.Y. 2023-24 was filed with the Ministry of Corporate Affairs.

26. INTERNAL FINANCIAL CONTROLS

The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. During the year under review, no material or serious observation has been received from the Statutory Auditors and the Internal Auditors of the Company on the inefficiency or inadequacy of such controls.

27. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEE GIVEN AND SECURITIES PROVIDED

The Company has not given any loan to any person or other Body Corporate or given any guarantee or provided any security in connection with a loan to any other person or body corporate pursuant to Section 186 of the Companies Act, 2013.

28. PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

There were no materially significant Related Party Transactions entered by the Company which may have a potential conflict with the interest of Company. All related party transaction(s) are placed before Audit Committee for approval and thereafter such transactions are also placed before the Board for seeking their approval. The details of Related Party Transactions, as required pursuant to respective Indian Accounting Standards, have been stated in the Audited Financial Statement of Company forming part of this Annual Report. There were no material contracts or arrangement entered into by your Company with the related parties, as prescribed form AOC-2, annexed herewith as 'Annexure VII' to this Report. The Policy on materiality of related party transactions and dealing with related party transactions may be accessed on the Company's website www.salora.com under Investors Information Section.

29. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended are annexed hereto marked as "Annexure - V" and forms part of this report.

30. COMPLIANCE WITH SECRETARIAL STANDARDS

The Company confirms compliance with the applicable requirements of Secretarial Standards 1 and 2.

31. DEPOSITS

During the year under review, the Company has neither accepted any deposits nor there were any amounts outstanding at the beginning of the year which were classified as "Deposits" in terms of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014 and hence, the requirement for furnishing of details of deposits which are not in compliance with the Chapter V of the Companies Act, 2013 is not applicable.

32. DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL

No significant and material orders have been passed by any Regulator or Court or Tribunal which can have impact on the going concern status and the Company's operations in future.

33. CREDIT RATING

During the year under review, The Company has not obtained credit rating.

34. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

Disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 have been provided in the Report on Corporate Governance.

35. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

The Information on conservation of energy, technology absorption, foreign exchange earnings and out go, which is required to be given pursuant to the provisions of Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of Companies (Account) Rules, 2014 is annexed hereto marked as "Annexure - I" and forms part of this report.

36. RESEARCH AND DEVELOPMENT

Information regarding Research & Development as required under Sub-section (3)(m) of Section of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is furnished in Annexure- I annexed and forms part of this report.

37. ANNUAL RETURN

Pursuant to Section 92(3) read with section 134(3)(a) of the Companies Act, 2013, copies of the Annual Returns of the Company prepared in accordance with Section 92(1) of the Companies Act, 2013 read with Rule 11 of the Companies (Management and Administration) Rules, 2014, shall be made accessible at the website of the Company i.e. www.salora.com.

38. ACKNOWLEDGEMENT

Your Directors would like to express their sincere appreciation of the positive co-operation received from all Government authorities, Financial Institutions, Company's Bankers, Customers, Dealers and all other business associates.

The Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers, workers, employee unions and staff of the Company resulting in the performance of the Company during the year.

The Board also takes this opportunity to express its deep gratitude for the continued co-operation and support received from its valued shareholders.