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Salora International Ltd.

BSE: 500370 Sector: Consumer
NSE: SALORAINTL ISIN Code: INE924A01013
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VOLUME 509
52-Week high 78.60
52-Week low 41.10
P/E
Mkt Cap.(Rs cr) 38
Buy Price 0.00
Buy Qty 0.00
Sell Price 43.20
Sell Qty 49.00

Salora International Ltd. (SALORAINTL) - Director Report

Company director report

Dear Members

Your Directors present the 47th Annual Report of the Company together with AuditedFinancial Statements for the Financial Year ended 31st March 2016:

1. FINANCIAL RESULTS (STANDALONE)

A snap shot of the Company’s financial performance for the financial year underreview along with previous years’ figures are given hereunder:

(Rs. in Lacs)
Year ended 31st March 2015 Year Ended 31st March 2015
Net Sales /Income from Business
31169.95 29842.12
Operations
Less: Excise Duty 221.88 332.29
Net Sales 30948.07 29509.83
Add: Other Income 329.35 70.81
Increase / (Decrease) in stock 522.65 152.41
Total 31800.07 29733.05
Less: Total Expenditure 31133.14 28877.89
Operating 666.93 855.16
Less: Interest 558.35 489.68
Less: Depreciation & Amortization 250.92 326.09
Profit before exceptional item & tax (142.34) 39.39
Less: Exceptional Item - -
Profit before tax (142.34) 39.39
Less: Provision for taxes
Current Tax - -
Deferred Tax 55.32 (0.87)
Earlier Year: Deferred Tax - -
Earlier Year: Income Tax - 4.74
Profit / (Loss) after tax (87.02) 35.53
Add: Balance brought forward from last year - -
(87.02) 35.53
Less: Appropriations - -
Balance carried to Balance Sheet (87.02) 35.53

2. DIVIDEND

Due to non availability of profits your Directors have not recommended any dividendthis year.

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

In terms of Section 125 of the Companies Act 2013 unclaimed / unpaid Dividend relatedto the financial year 2008-09 is due for transfer on 19.08.2016 to the Investor Educationand Protection Fund established by the Central Government.

4. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS

During the period under review the Company has achieved net sales of Rs.309.48 croresin the Financial Year 2015-16 as compared to Rs.295.09 crores in the last Financial Year.

Operating profit for the year was stood at Rs.666.93 lacs against Rs.855.16 lacs duringthe preceding year. Company has started commercial production of LED TVs on the newProduction Conveyor Line with a capacity of 10000 units per month installed at ourfactory premises situated in NOIDA (U.P.). The Company has also started manufacturing andassembling facility for Mobile phones and its Components under flagship of our valuedBrand "SALORA". Company’s alignment with e-commerce players i.e. AmazonFlipkart Snapdeal ebay Justbuy and Gadgets 360 for sales and marketing of its productsconsumers’ response is very enthusiastic.

Company has finalized an alignment with Amazon which will boost our top line as wellas bottom line. This will be regular business with them and your company will be one oftheir preferred partners in their phase of growth in India.

After agreed alignments your company would be procuring some other well known crossborder brands having sharp dominant presence in the ecommerce space to boost up the salesrevenue through our well established distribution channels.

Company has been working with Zojirushi Corporation Japan into Life Style sector todistribute small appliances and thermo-ware products and in the months to come we will belaunching some new products in the segment.

5. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OFTHE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIALSTATEMENTS RELATE AND THE DATE OF THE REPORT

No material changes and commitments affecting the financial position of the Companyoccurred at the end of the financial year to which this financial statement relates on thedate of this report.

6. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO

The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules

2014 is furnished in Annexure-‘I’ and is attached to this report.

7. RESEARCH AND DEVELOPMENT

Particulars 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 isfurnished in Annexure-‘I’ and is attached to this report.

8. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICYOF THE COMPANY

Risk Management is attempting to identify assessment minimization and then managementof threats that could severally impact or bring down an organization. Your Companybelieves that it is need of the hour in the present market scenario for any Businessorganization to impeccably recognise and effectively address the risk existing in theenvironment. Your Board Audit Committee and Executive Management are continuouslyidentifying the possible risk and make guidance to the management to hedge against thosethreats. Audit Committee of the Company with the help of periodical internal audit reportsand management’s representations is identifying and evaluating all possible risk andinform Board with their possible recommendations to hedge those risk and minimizationprocedures. In the opinion of your Board there is no risk that may threaten the existenceof the Company.

9. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATESOCIAL RESPONSIBILITY INITIATIVES

Provisions of Section 135 of the Companies Act 2013 are not applicable to the Company.

10. LOANS GUARANTEES OR INVESTMENTS

There were no loans guarantees or investments made by the Company exceeding the limitas specified under Section186 of the Companies Act 2013 during the year under review andparticulars of loans given investments made guarantees given and securities providedunder Schedule V of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 along with the purpose for which the loan orguarantee are provided in Note 13 & 14 of the standalone financial statement.

11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

All Related Party Transactions are placed before the Audit Committee as well as Boardfor prior approval wherever required. None of the transaction is without approval of theAudit Committee and every such transaction is being placed before for review periodically.Prior omnibus approval of the Audit Committee is obtained for the transactions which areof a foreseen and repetitive nature. A statement giving details of all related partytransactions entered into pursuant to the omnibus approval is placed before the AuditCommittee for their review on a quarterly basis. All related party transactions are in theOrdinary Course of Business and at Arm’s Length Basis which are not material innature too hence outside the scope of Section 188(1) of the Act. Related PartyTransaction Statement for approval of the Board and Audit Committee is supported by acertificate of an Independent Chartered

Accountant Firm.

The policy on materiality of Related Party Transactions and also on dealing withRelated Party Transactions as approved by the Audit Committee and the Board of Directorsis available on the website of the Company at www.salora.com.

Attention of the members is drawn to the disclosure of Related Party Transactions setout in Note 40 of the Standalone Financial Statements forming part of this Annual Report.

12. EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTSStatutory Auditor

M/s. K. Prasad & Co. Chartered Accountants (ICAI Registration No. 002755N)Statutory Auditors of the Company hold office till the conclusion of the ensuing AnnualGeneral Meeting and are eligible for re-appointment. They have confirmed their eligibilityto the effect that their re-appointment if made would be within the prescribed limitsunder the Act and that they are not disqualified for re-appointment.

The Notes on financial statement referred to in the Auditors’ Report areself-explanatory and do not call for any further comments. The Auditors’ Report doesnot contain any qualification reservation or adverse remark.

Secretarial Auditor

The Board has appointed M/s. Navneet K Arora and Co. Company Secretaries Firm toconduct Secretarial Audit for the financial year 2016-17. The Secretarial Audit Report forthe financial year ended March 31 2016 is annexed herewith marked asAnnexure-‘II’ to this Report. The Secretarial Audit Report does not contain anyqualification reservation or adverse remark.

Cost Auditor

Pursuant to Section 148 of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014 and the Companies (Cost Records and Audit) Amendment Rules 2014the Company maintains the cost audit records for its business. The Board of Directors ofthe Company has on the recommendation of the Audit Committee at its meeting held on 30thJune 2016 appointed M/s. Gurvinder Chopra & Co.

Cost Accountants as the Cost Auditors for the financial year2016-17 and has recommendedtheir remuneration to the Shareholders for their ratification.

13. COMPANY’S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATIONAND DISCHARGE OF THEIR DUTIES

The Company’s Policy relating to appointment of Directors payment of Managerialremuneration Directors’ qualifications positive attributes independence ofDirectors and other related matters as provided under Section 178(3) of the Companies Act2013 is being dealt in the Corporate Governance report under Nomination and RemunerationCommittee section.

14. EXTRACT OF ANNUAL RETURN

The extracts of Annual Return in MGT- 9 pursuant to the provisions of Section 92 readwith Rule 12 of the Companies (Management and administration) Rules 2014 is furnished inAnnexure-‘III’ and is attached to this Report.

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

The Company had five (5) Board Meetings during the financial year under review with agap of statutory time limit provided under the Companies Act 2013 and SEBI (ListingObligations & Listing Requirements) Regulations 2015. Members of the Board duly meton 30th May 2015 2nd July 2015 13th August 2015 5th November 2015 and 11thFebruary 2016.

16. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act 2013 with respect tothe Directors’ Responsibility Statement it is hereby confirmed that: a. inpreparation of the annual accounts for the financial year 2015-16 the applicableaccounting standards have been followed along with proper explanation relating to materialdepartures; b. the accounting policies selected and applied are consistent and judgmentsand estimates made are reasonable and prudent so as to give a true and fair view of thestate of affairs of the company as at 31st March 2016 and of the profit / (loss) of thecompany for year ended on that date; c. proper and sufficient care has been taken formaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the company and for preventing anddetecting fraud and other irregularities; d. the annual accounts have been prepared the ona going concern basis; e. the directors had devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively.

17. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES

The Company have one Subsidiary i.e. Salora components Ltd.

The Company has no joint venture company.

The detail of financial performance of Subsidiary Company is furnished inAnnexure-‘IV’ and attached to this report.

18. DEPOSITS

The Company has neither accepted nor renewed any deposits during the year under review.

19. DIRECTORS

Shri Tarun Jiwarajka Whole Time Director who is liable to retire by rotation retiresat this Annual General Meeting and being eligible offer himself for re-appointment.

Smt. Sushmita Shekhar had resigned from the office of director w.e.f. 11.02.2016

20. DECLARATION OF INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosures to the Board that theyfulfil all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to continue as Independent Directors under the provisions of theCompanies Act 2013 and the relevant rules.

21. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM

The Audit Committee consists of the following members:

1) Shri Gautam Khaitan Chairman

2) Shri P. N. Mehta Member

3) Shri Sanjeev Kaul Duggal Member

4) Shri Patanjali Govind Keswani Member

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

The Company has established a vigil mechanism and oversee through the committee thegenuine concerns expressed by the employees and other Directors. The Company has alsoprovided adequate safeguards against victimization of employees and Directors who expresstheir concerns. The Company has also provided direct access to the Chairman of the AuditCommittee on reporting issues concerning the interests of company employees and theCompany.

22. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013 AND PROVIDING VIGIL MECHANISM

The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed offduring each calendar year.

No. of complaints received: NIL No. of complaints disposed off: NIL

23. SHARES

LISTING OF SECURITIES OF COMPANY

The Equity Shares of the Company continue to be listed at Bombay Stock Exchange Ltd.(BSE) and National Stock Exchange of India Ltd. (NSE) and listing fees for the FinancialYear 2016-17 have been paid to both the Stock Exchanges in advance. Recently company hasexecuted new listing agreements with Stock Exchanges under the requirements of provisionsof newly introduced SEBI (Listing Obligations & Disclosure Requirements) Regulations2015.

DEMATERIALISATION

Trading of Equity Shares of the Company in dematerialized form is compulsory for allshareholders w.e.f. 28.08.2000 in terms of the Notification issued by the Securities andExchange

Board of India (SEBI). Your Company has achieved higher level of dematerialization with98.10% of the total number of Equity Shares being held in the electronic mode with the twodepositories.

24. PARTICULARS OF EMPLOYEES

The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are given inthe Annexure-‘V’.

25. CORPORATE GOVERNANCE REPORT

A separate report of the Board of Directors on Corporate

Governance is included in the Annual Report as Annexure-‘VI’ and thecertificate from M/s. Navneet K. Arora & Co. Practicing Company Secretary (CoP No.3005) confirming compliance with requirements of Corporate Governance as stipulated inSEBI (Listing Obligations & Disclosure Requirements) Regulation 2015 (previously forClause 49 of the Listing

Agreement) is annexed as Annexure-‘VII’.

26. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report as required by Regulation 34 of SEBI (ListingObligations & Disclosure Requirements) Regulation 2015 is given inAnnexure-‘VIII’ forming part of this report. A certificate regarding complianceconditions of Corporate Governance is annexed. A separate section on Management Discussionand Analysis is given in Annual Report.

27. INTERNAL FINANCIAL CONTROL

Company has a proper and adequate system of internal control to oversee theCompany’s financial reporting process disclosure of financial information reviewingthe performance of statutory and internal auditors with management adequacy of internalaudit function and internal control system related party transactions etc. and for thispurpose Company has a well constituted Audit Committee headed by a Non-ExecutiveIndependent Director. Further the Company’s Internal Auditors verify the informationconcerning the reliability of the financial statements as well as the compliance with yourCompany policies so as to maintain accountability of all its assets and correctness ofrecorded transactions.

28. EVALUATION OF BOARD AND INDIVIDUAL DIRECTORS

Pursuant to the Section 134(3)(p) of the Companies Act 2013 and SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 a formal evaluation has beenmade by the Board of its own performance and that of its committees and individualdirectors.

29. ACKNOWLEDGEMENTS

Your Directors place on record their sincere thanks to bankers business associatesconsultants and various Government Authorities for their continued support extended toyour Company's activities during the year under review. Your Directors also acknowledgesgratefully the shareholders for their support and confidence reposed on the Company.

For and on behalf of the Board of Directors Salora International Ltd. Date: New Delhi(Gopal Sitaram Jiwarajka) Place: 30th June 2016 Chairman & Managing Director

Annexure – I

STATEMENT CONTAINING PARTICULARS PURSUANT TO SECTION 134(3)(m) OF THE COMPANIES ACT2013 READ WITH RULE 8 OF THE COMPANIES (ACCOUNTS) RULES 2014.

A. CONSERVATION OF ENERGY
(a) The Steps Taken or Impact on Conservation of Energy The Company is taking appropriate steps for conservation of energy by using energy efficient equipments and creating awareness in the employees for conservation of energy. Introduction of LED lights in Production floor and workshops.
(b) The Steps Taken by the Company for Utilizing Alternate Sources of Energy N.A.
(c) The Capital Investment on Energy Conservation Equipments N.A.

B. TECHNOLOGY ABSORPTION ADOPTION AND INNOVATION

(a) The Efforts Made in Technology Absorption Research and Development (R & D):
Deflection Yoke: New version of 21" TFT V-2 DY start for Thomson China.
FBT:
(a) Development of 14" 21" Flat 21" Ultra Slim FBT for Company and Other customers
(b) Developed Market Model FBT in new Plastic Parts (low Cost FBT) and also started many new models for market segment
Speaker:
(a) Development of Multimedia speakers for Company and different customers like Philips etc.
(b) Development of LCD & LED TV Speakers for Company and Videocon Panasonic & other customers.
CRT TV: Designed a new CTV chassis based on Toshiba Micom
for 14" and 21" Pure Flat CPT and another for 21" Ultra Slim CPT
with new features.
LED TV: Developed new 80 CM LED TV in single board concept (Power supply and small signal processing are combined) for better reliability productivity and serviceability
Telecom Product Division:
(a) Development of CDMA Mobile Phone for Tata and MTS Telecom providers
(b) Development of charger (adopter) for Mobile phone
(c) Development of speaker for mobile phone
(d) Development of Battery for mobile Phone Company has successfully absorbed the LED TV assembly technology to manufacture LED TV in house and started use of LED TV technology for mass production.
This creates a new opening for company to produce cost effective high end CTV for masses adding margin to the company.
Localization of Mobile Phone charger reduced dependency on foreign suppliers.
(b) The Benefits Reduction Product Development or Import Substitution: a. Cost competitiveness w.r.t. competition DerivedLikeProductImprovement Cost
b. Use of latest technology
c. Being in pace with the latest trend of the industry
d. Getting leadership position in market latest technology absorption and quality improvement
(c) In Case Of Imported Technology (Imported During The Last Three Years Reckoned From The Beginning Of The Financial Year) N. A.

i) the details of technology imported ii) the year of import iii) whether thetechnology been fully absorbed iv) if not fully absorbed areas where absorption has nottaken place and the reasons thereof:-(d) The Expenditure Incurred on Research &Development:

(Rs. in lacs)
2015-16 2014-15
(a) Capital 0.00 0.00
(b) Recurring 0.81 0.07
(c) Total 0.81 0.07

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

during the year and the foreign exchange outgo during the goods and it includes minorexpenses of visits of marketing staffs year in terms of actual outflows. to differentcountries for increasing the exports of the Company and better market penetration.

(Rs. in lacs)
Total foreign exchange used and earned 2015-16 2014-15
Foreign Exchange used 2394.41 3082.36
Foreign Exchange earned 4143.82 2340.23

Annexure – II Secretarial Audit Report

[For the Financial Year ended on 31st March 2016]

[Pursuant to Section 204(1) of the Companies Act 2013 and Rule No. 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]

To

The Members

SALORA INTERNATIONAL LIMITED

We have conducted the Secretarial Audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by SALORA INTERNATIONAL LIMITED(CIN No. L74899DL1968PLC004962) (hereinafter called the Company). Secretarial Audit wasconducted in a manner that provided us a reasonable basis for evaluating the corporateconducts / statutory compliances and expressing our opinion there on.

Based on our verification of the SALORA INTERNATIONAL LIMITED’S books papersminute books forms and returns filed and other records maintained by the Company and alsothe information provided by the Company its officers agents and authorizedrepresentatives during the conduct of Secretarial Audit we hereby report that in ouropinion the

Company has during the audit period covering the financial year ended on 31st March2016 complied with the statutory provisions listed hereunder and also that the Companyhas proper Board - Processes and Compliance -Mechanism in place to the extent in themanner and subject to the reporting made hereinafter: We have examined the books papersminute books forms and returns filed and other records maintained by the Company for theperiod ended on 31st March 2016 according to the provisions of: (i) The CompaniesAct 2013 (the Act) and the Rules made thereunder; (ii) The Securities Contracts(Regulation) Act 1956 (‘SCRA’) and the rules made there under and TheSecuritiesContracts (Regulation) Rules 1957.

(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;(iv) Foreign Exchange Management Act 1999 and the Rules and Regulations made there underto the extent of Foreign Direct Investment Overseas Direct Investment and ExternalCommercial Borrowings.- No such transaction was held during the financial year hence thesaid Act Rules and Regulations were not applicable to the Company during the auditperiod; (v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (‘SEBI Act’):

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992;

(c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009.- No such transaction was held during the financial yearhence the said Regulations were not applicable to the Company during the audit period;

(d) The Securities and Exchange Board of India (Share Based Employee Benefits)Regulations 2014;- No such transaction was held during the financial year hence the saidRegulations were not applicable to the Company during the audit period;

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008;- No such Transaction was held during the financial year hence the saidRegulations were not applicable to the Company during the audit period;

(f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;-The Company was not engaged in the activities relating to Registrar to a issue and alsonot acting as Share Transfer Agent hence the said Regulations were not applicable to theCompany during the audit period

(g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009; - No such transaction was held during the financial year hence the saidRegulations were not applicable to the Company during the audit period; and

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998; - No such Transaction was held during the financial year hence the said Regulationswere not applicable to the Company during the audit period;

(vi) Other Labour Environment & Other specific applicable Acts/ Laws for whichSecretarial Audit was conducted as an overview test check basis audit and was generallybased/ relied upon on the documents provided to us Management Confirmation Certificate& other Audit Report and certificates given by other professionals the company hascomplied with the following Acts / Laws applicable to the Company during the audit period:

a. The Employees State Insurance Act 1948 and The Employees State Insurance (General)Regulation 1950 and The Employees State Insurance Rules 1950

b. The Employees Provident Fund & Miscellaneous provisions Act 1952 & TheEmployees Deposit-Linked Insurance Scheme 1976 and Employees Provident Fund Scheme 1952

c. The Payment of Bonus Act 1965 and the Payment of Bonus Rules. 1975

d. The Payment of Gratuity Act 1972 and The Payment of Gratuity ( Central) Rules 1972

e. The Employees Compensation Act 1923 & The Workmen’s Compensation Rules1924 f. Minimum Wages Act 1948 & Minimum Wages ( Central) Rules 1950

g. The Sexual Harassment of Women at Work Place (Prevention Prohibition and Redressal)Act 2013 read with The Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Rules 2013

h. The Maternity Benefit Act 1961 and The Maternity Benefit Rules 1963

i. Environment (Protection) Act 1986 read with The Environment (Protection) Rules 1986& Hazardous Waste (Management Handling & Transboundry Movement) Rules 2008 andother Environment Laws.

j. The Explosives Act 1884 and Gas Cylinder Rules 2004

k. The Electricity Act 2003 & The Electricity Rules 1956 We have also examinedcompliance with the applicable clauses of the followings:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India.

(ii) Listing Agreements (Equity) entered into by the Company with BSE Limited andNational Stock Exchange of India Limited.

We have not examined compliance by the Company with applicable financial laws likedirect and indirect tax laws since the same have been subject to review by statutoryfinancial audit and other designated professionals.

During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines Standards etc. as mentioned above.

We further report that:

1) The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act.

2) Adequate notice is given to all directors to schedule the Board Meetings atleastseven days in advance and agenda and detailed notes on agenda were also sent in advance toall the directors subsequently and a system exists for seeking and obtaining furtherinformation and clarifications on the agenda items before the meeting and for meaningfulparticipation at the meeting.

3) Majority decision is carried through while the dissenting members’ views ifany were captured and recorded as part of the minutes.

4) There was no prosecution initiated and no fines or penalties were imposed during theyear under review under the Companies Act 2013 Depositories Act and Rules Regulationsand Guidelines framed under these Acts against / on the Company its Directors andOfficers.

5) The Directors have complied with the disclosure requirements in respect of theireligibility of appointment their being independent and compliance with the Code ofBusiness Conduct & Ethics for Directors and Management Personnel; We further reportthat based on the information received and records maintained there are adequate systemsand processes in the Company commensurate with the size and operations of the Company tomonitor and ensure compliance with other applicable laws rules regulations andguidelines.

We further report that during the audit period there were no instances of: a) Public /Rights / Preferential Issue of Shares / Sweat Equity. b) Redemption / Buy-back ofSecurities. c) Merger / Amalgamation / Reconstruction etc. and d) Foreign TechnicalCollaborations.

For Navneet K Arora & Co.
Company Secretaries
CS Navneet Arora Prop.
FCS: 3214 COP: 3005
Place: New Delhi
Date: 27th May 2016

[Note: This report is to be read with our letter of even date which is annexed as"Annexure-A" and forms an integral part of this report].

To

The Members

SALORA INTERNATIONAL LIMITED

Our report of even date is to be read along with this letter as under:

1) Maintenance of secretarial record is the responsibility of the Management of theCompany. Our responsibility is to express an opinion on these secretarial records on ouraudit.

2) We have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial Records. Theverification was done on test basis to ensure that correct facts are reflected insecretarial records. We believe that the processes and practices we followed provide areasonable basis for our opinion.

3) We have not verified the correctness and appropriateness of financial records andbooks of accounts of the Company.

4) Where ever required we have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.

5) The Compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. Our examination was limited tothe verification of procedures on test basis.

6) The Secretarial Audit Report is neither an assurance as to the future viability ofthe company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the company.

For Navneet K Arora & Co.
Company Secretaries
CS Navneet Arora Prop.
FCS: 3214 COP: 3005
Place: New Delhi
Date: 27th May 2016

Form AOC-1 Annexure – (Pursuant to first proviso to sub-section (3) of section129 read with rule 5 of Companies (Accounts) Rules 2014)

Statement containing salient features of the financial statement ofsubsidiaries/associate companies/joint ventures Part "A": Subsidiaries

Sl. No. Particulars Details
1 Name of the subsidiary SALORA COMPONENTS LTD.
2 Reporting period for the subsidiary concerned if different from the holding company’s reporting period 31st March 2016
3 Reporting currency and Exchange rate as on the last date of the rel evant Financial year in the case of foreign subsidiaries Not Applicable
4 Share capital 43200000
5 Reserves & surplus (16264725)
6 Total assets 69501449
7 Total Liabilities 42566174
8 Investments Nil
9 Turnover 73812605
10 Profit before taxation 1511832
11 Provision for taxation (426361)
12 Profit after taxation 1085471
13 Proposed Dividend Nil
14 % of shareholding 79.05%

Part "B": Associates and Joint Ventures

Statement pursuant to Section 129 (3) of the Companies Act 2013 related to AssociateCompanies and Joint Ventures – Company doesn’t have any Associate or JointVenture Company during the reporting period.

For and on behalf of the Board
Regd. Office:
D – 13/4 Okhla Industrial Area Tarun Jiwarajka Gopal Sitaram Jiwarajka
Phase – II New Delhi – 110 020 Whole Time Director Chairman & Managing Director
CIN L74899DL1968PLC004962 DIN: 00386240 DIN: 00024325
sect@salora.com
Nitin Agrahari Ashok Kumar Kucheria
Dated: 30th June 2016 Company Secretary Chief Financial Officer

Annexure – V

DISCLOSURE IN DIRECTORS’ REPORT PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT2013 READ WITH COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES2014

Sr. Requirements Disclosure No.

Name of the Director Ratio

1. The ratio of the remuneration of each Shri Gopal Sitaram Jiwarajka 71.40 director tothe median remuneration of the employees of the company for the financial Shri TarunJiwarajka 17.39 year.

1) For the purpose sitting Fees paid to the Directors have not been considered asremuneration.

2) Figures have been rounded off wherever necessary.

2. The percentage increase in remuneration

Shri Gopal Sitaram Jiwarajka-MD N.A. of each Director Chief Financial Officer andCompany Secretary in the financial

Shri Tarun Jiwarajka-WTD N.A. year. Shri Amit Goel-CFO* N.A.

Shri Ashok Kumar Kucheria-CFO# N.A.

Shri Nitin Agrahari – Company Secretary 29.63%

*Resigned w.e.f. 2nd July 2015 #Appointed w.e.f. 2nd July 2015

3. The percentage increase in the median Nil* remuneration of employees in thefinancial *Due to increase in number of employees in comparison to previous FY theincrease year in median remuneration can’t be ascertained.

4. The number of permanent employees on There were 276 employees as on March 31 2016the rolls of company

5. Average percentile increase already made There is no average increase recorded inremuneration for Employees other than in the salaries of employees other than theManagerial Personnel during the period under review. Further average managerialmanagerial personnel in the last financial remuneration was showing a increase due toresignation and appointment of new year and its comparison with the percentile KeyManagerial Personnel and revision in remuneration of Company Secretary. increase in themanagerial remuneration This revision is in line with factors outlined in RemunerationPolicy of the Company. and justification thereof and point out if Other than this thereis no any other exceptional circumstances for increase in the there are any exceptionalcircumstances for managerial remuneration. increase in the managerial remuneration.

6. Affirmation that the remuneration is as perIt is hereby affirmed that theremuneration is as per the Remuneration Policy of the the remuneration policy of theCompany. Company.

General Note:

1. Profit/Loss of the Company is calculated as per section 198 of the Companies Act2013

2. Managerial Personnel includes Chairman and Managing Director Whole Time Directorand Key Managerial Personnels.