You are here » Home » Companies » Company Overview » Sarda Energy & Minerals Ltd

Sarda Energy & Minerals Ltd.

BSE: 504614 Sector: Metals & Mining
NSE: SARDAEN ISIN Code: INE385C01013
BSE 12:06 | 07 Jul 844.95 16.65
(2.01%)
OPEN

839.40

HIGH

848.45

LOW

833.65

NSE 11:53 | 07 Jul 837.15 10.65
(1.29%)
OPEN

840.00

HIGH

848.65

LOW

832.55

OPEN 839.40
PREVIOUS CLOSE 828.30
VOLUME 2668
52-Week high 1358.10
52-Week low 625.00
P/E 4.62
Mkt Cap.(Rs cr) 3,046
Buy Price 843.30
Buy Qty 1.00
Sell Price 844.95
Sell Qty 14.00
OPEN 839.40
CLOSE 828.30
VOLUME 2668
52-Week high 1358.10
52-Week low 625.00
P/E 4.62
Mkt Cap.(Rs cr) 3,046
Buy Price 843.30
Buy Qty 1.00
Sell Price 844.95
Sell Qty 14.00

Sarda Energy & Minerals Ltd. (SARDAEN) - Director Report

Company director report

Dear Shareholders

The Board of Directors take pleasure in presenting the 48th Annual Report on businessand operations of the Company for the financial year ended 31st March 2021.

Results of our operations (Rs in crore)

Particulars Standalone Consolidated
2020-21 2019-20 2020-21 2019-20
Revenue from operations 1595 1424 2199 2000
Exports 9 49 334 331
Other Income (Loss) 107 61 144 (17)
EBIDTA 479 301 664 339
Depreciation 48 51 75 78
Finance cost 34 36 79 82
Profit before tax 397 214 510 179
Exceptional Item 15 -- 15 --
Provision for tax 85 32 115 43
Net Profit 297 182 380 136

Review of performance

The outbreak of COVID-19 pandemic has led to an unprecedented health crisis and hasdisrupted economic activities and global trade while weighing on consumer sentiments.Steel demand was affected as key steel consuming sectors struggled to operate amidstweakening economic activities working capital constraints shortage of manpower andlogistical issues. To mitigate the risks and challenges faced by the Company during thepandemic the Company enhanced safety and hygiene norms at offices implemented work fromhome staggered shift timings for safety of employees and promoted use of digitalplatforms for its day-to-day operations. During the challenging times the Companymaintained its liquidity position by minimizing cash outflows and avoiding/delayingunwanted/non-immediate expenditure. Due to the global slowdown on account of COVID-19 theCompany temporarily suspended operations w.e.f. 25th March 2020. The Company restartedmanufacturing operations with effect from 16th April 2020 in a gradual and synchronizedmanner in compliance with the guidelines issued by the Govt. and full capacity could beachieved only in the 3rd week of May 2020. Despite the headwinds and prevailing pandemicsituation your Company delivered better performance as compared to previous year. Thiswas mainly due to strong focus on cost reduction and a healthy mix of value-addedproducts. During the year your Company achieved higher production levels. Your Companyfulfilled all its financial obligations on time. The total income and profitabilityimproved with the Company achieving an increase of 15% in turnover on standalone basis and18% on consolidated basis. The net profit increased by 63% on standalone basis and by 179%on consolidated basis. Due to improvement in market sentiments on a consolidated basisthere was mark-to-market gains of Rs 93.56 crore as against loss of Rs 40.08 core in theprevious year and gain on account of exchange difference was Rs 14.20 crore as againstloss of Rs 16.65 crore in the previous year. These items or national nature are reportedunder other income. In March 2021 the Company received long-awaited permission formanufacturing additional 2 lakh tonnes of pellet. During the year well spread and betterrainfall helped in better capacity utilization of hydropower plants. Apart from COVID-19pandemic impact which may affect the financial performance of the Company there are noother material changes and commitments affecting the financial position of the Companysince close of the financial year.

Further details on the performance of the Company and on the Company's operations andfinancials are provided in the Management Discussion and Analysis and other sections asannexed to this report. There was no change in the nature of the business of the Companyduring the year.

Dividend

On the back of improved financial performance your directors have recommend highestever dividend of Rs 7.50/- (i.e. 75%) per equity share for the financial year 2020-21(last year Rs 5/- per equity share). The dividend if approved by the shareholders in theensuing Annual General Meeting will be paid after tax deduction at source as per theapplicable provisions. The dividend would result in cash outflow of Rs 27.04 crore.

Pursuant to Regulation 43A of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (‘SEBI ListingRegulations') the Board of Directors of the Company has adopted a Dividend DistributionPolicy (‘Policy') which aims to maintain a balance between profit retention and afair sustainable and consistent distribution of profit among its Members. The Policy isavailable on the website of the Company under the ‘Investor Relations' section athttp://seml.co.in/Corporate%20Governance/SEML%20-%20Dividend%20Distribution%20Policy.pdfFurther your Company has transferred the unpaid dividend amount of Rs 8.64 lakh inrespect of the F.Y. 2012-13 to the Investor Education and Protection Fund. The dividendfor F.Y. 2019-20 on equity shares which have been transferred to IEPF has also beenremitted to IEPF.

Transfer to Reserves

The Board of Directors has decided to retain the entire amount of profit for FinancialYear 2020-21 in the statement of profit and loss. Accordingly no amount has beentransferred to reserves.

Subsidiaries / Controlled Entities / Joint Ventures

During the year under review the Company has made further investments of USD 1 Mn inSarda Global Venture Pte. Limited. There was no change in subsidiaries and Joint Venturesduring the year. A brief on the performance/business operations of subsidiaries/controlledentities/joint ventures consolidated with the Company is given hereunder.

Subsidiaries

Sarda Energy & Minerals Hongkong Limited Hongkong (SEMHKL) is a wholly ownedsubsidiary functioning as global investment and trading arm of your Company. During theyear under review the subsidiary reported a net profit of Rs 21.05 Crore as against lossof ` 30.22 crore in the previous year. The profit consists of mainly recovery of fairvalue losses on investments provided during the previous year. During the year thecompany has written off US$ 1.52 Mn and reversed interest of US$ 0.99 Mn on account of baddebt. Sarda Global Venture Pte. Limited Singapore (SGV) a wholly owned subsidiary ishaving JV with Indorama group for coal mining in Indonesia. During the year under reviewyour Company has made further equity contribution of USD 1.00 Mn in the company. Duringthe year under review the mining company in Indonesia was in the process of acquiringland and accordingly there were no mining operations. The subsidiary reported a net lossof ` 3.63 crore as against net loss of Rs 7 crore in the previous year. Sarda GlobalTrading DMCC Dubai (SGT) a wholly owned subsidiary has been incorporated in 2018 withthe object of trading in metal ores scrap and coal. During the year the subsidiaryreported a net profit of Rs 23.10 crore as against net loss of Rs 8.36 crore in theprevious year. The profit consists of trading profit income from investments and recoveryin fair value of investments made during previous year.

Sarda Metals & Alloys Limited (SMAL) a wholly owned subsidiary operating 2 x33 MVA Ferro Alloys plant backed by 80 MW captive thermal power plant enjoys a Two StarExport House status. During the year power generation was 461.65 MU as compared to 453.40MU in the previous year. The ferro alloys production stood at 78355 MTs as against 68596MTs in the previous year. During the FY 2020-21 the company exported 47548 MTs ferroalloys against 41773 MTs in the previous year valuing

` 325.26 crore and Rs 282.11 crores respectively. In spite of the impact of Pandemicthe Company has reported a net profit of ` 32.90 crore as against net profit of Rs 2.86crore in previous year. This was possible because of the increased operationalefficiencies and overall pick up in economy from H2 of FY 21. The company is adding onemore furnace of 36 MVA for manufacturing Mn based alloys at its existing facility at anestimated project cost of Rs 135 Crores. This shall result in power plant operation atnear full capacity and shall reap the dual benefits from Ferro and power operations. Postcompletion of the capex the production capacity of the company for Manganese based alloysshall increase by 50000 MT P.A. The project is expected to be operational by the end ofFY 2022-23.

Sarda Energy Limited (SEL) a wholly owned subsidiary was incorporated as an SPV toput-up 1320 MW super critical IPP thermal power project in Chhattisgarh. As reportedearlier the company has abandoned the project. The funds lying idle with the Company havebeen invested in hydropower projects of the group. During the year under review thesubsidiary earned a net profit of Rs 4.52 crore as against net profit of ` 3.27 in theprevious year. The profit was mainly from share of profit from investment in ChhattisgarhHydro Power LLP. Chhattisgarh Hydro Power LLP (CHPLLP) is operating 24 MW Gullu SmallHydro Electric Project in Chhattisgarh. The Plant has been earning cash surplus from thevery first year of its operation. It has generated healthy business returns and issupported by adequate fixed feed -in tariff. During the FY 2020-21 the Plant hasgenerated and supplied 1052.27 lakh units (PY 885.39 lakh units) and has earned post taxprofit of Rs 25.11 crore (PY Rs 17.45 crore). The Plant has achieved highest evergeneration in the current financial year. The plant has received complete subsidy of Rs5.00 Crore from Ministry of New and Renewable Energy (Small Hydro Power Division) duringcurrent financial year. The LLP has licenses for implementation of four more small hydelpower projects with installed capacity of 97.80 MW. Amongst these 24.90 MW Rehar-I SHP isin the most advance stage of implementation. The construction works are planned tocommence in next financial year.

Your Company has 100% stake in the LLP.

Parvatiya Power Limited (PPL) is operating 4.8 MW Loharkhet Hydro Power project inBageshwar district of Uttarakhand. This is the first hydro power project of the Group. Theplant has been successfully operating for the last thirteen years with track record ofprofitability. The plant enjoys debt free operations since financial year 2017-18. TheCompany has supplied 240.99 lakh KWh power in the FY 2020-21 (Previous Year 264.03 lakhKWh) to the state grid. During the year 2020-21 the Company has earned post tax profit of` 3.44 crore (Previous Year Rs 4.52 crore). The company has been registered as a SmallManufacturing Unit under Micro Small and Medium Enterprises Development Act 2006 (MSME)during the year under review. The plant has generated employment opportunities andpromoted tourism in the remote area. The capacity of the Plant is proposed to be enhancedby installing additional unit of 3 MW for which necessary approvals are being obtainedfrom the concerned departments. Your Company continues to hold 51% stake in PPL.

Madhya Bharat Power Corporation Limited (MBPCL) has implemented 113 MW RongnichuHEP in East Sikkim. The plant has successfully completed trail run operations on June 302021 for declaration of commercial operation Date (COD) as per the applicable laws. Theplant has commenced operations successfully after addressing numerous challenges beyondthe control of the Company such as delays in land acquisition damages on account ofearthquake unforeseeable geological conditions in the fragile Himalayan rock and at lastCOVID 19 pandemic. It shall go a long way in contributing to the overall growth anddevelopment of the Group. The plant has been selected by the Office of Prime Minister(PMO) as a project of national importance. It is a CDM registered project. MBPCL hassigned PPA with Chhattisgarh State Power Distribution Company Limited for purchase ofentire power on a long-term basis for a period of 35 years. The tariff for supply ofcontracted energy shall be the tariff as determined by the regulatory body ChhattisgarhState Electricity Regulatory Commission (CSERC).

Your Company holds 82.96% stake in the project (73.84% directly and 9.12% through itswholly owned subsidiary Sarda Energy Limited). Natural Resources Energy Private Limited(NREPL) is an SPV for acquisition of mines. The entire share capital of the company isheld by SEML and its wholly owned subsidiary SMAL. No business was carried out by thecompany during the year under review.

Sarda Hydro Power LLP (SHP LLP) is implementing two small hydro projects namely24 MW Kotaiveera and 9 MW Ganeshpur which are under survey and investigation stage.

Your Company holds 60% stake in the LLP.

Shri Ram Electricity LLP (SRE LLP) was incorporated as a special purpose vehicle(SPV) for setting up a captive thermal power plant. In view of the changed power scenarioand cancellation of coal linkage for the power project the LLP has dropped the project.Your Company continues to hold 51% stake in SRELLP. The firm will be dissolved once coalallocation related matters are closed.

Joint Ventures

Raipur Infrastructure Company Limited (RICL) was operating a leased Railway Sidingin Mandhar Raipur. The lease has expired. The company will be wound-up after closure ofpending proceedings and getting refunds from Railways and the tax authorities. YourCompany holds one third share in the Joint Venture. During the year 2020-21 the Companyhad incurred net loss of Rs 1.49 crore as against net profit of Rs 0.11 crore in theprevious year. The loss was mainly on account of Settlement of services charges forearlier years. Madanpur South Coal Company Limited (MSCCL) an SPV was allotted MadanpurSouth Coal Block in consortium. The Supreme Court had cancelled all coal block allotments.Consequent to cancellation of coal mines there is no business left in the company and noother activity has been planned. MSCCL holds certain assets including land acquired forthe project. MSCCL would be wound-up after disposal of these assets. Your Company holds20.13% in the Joint Venture. A report on the performance and financial position of each ofthe subsidiaries associates and joint ventures as per the Companies Act 2013 and theircontribution to the overall performance of the company during the period under report isprovided as part of the Consolidated Financial Statements and hence not repeated here forthe sake of brevity. The Policy for determining material subsidiaries as approved by theBoard may be accessed on the Company's website www.seml. co.in under the head corporategovernance/policies under the Investors' section.

Consolidated financial statements

The consolidated financial statements presented by the Company include financialinformation of its subsidiaries prepared in compliance with applicable AccountingStandards. In accordance with Section 136 of the Companies Act 2013 the Auditedfinancial statements including the consolidated financial statements and relatedinformation of the Company and audited financial statements of each of its subsidiariesare available on our website www.seml.co.in. These documents are also available forinspection.

Directors

In accordance with the provisions of the Act and the Articles of Association of theCompany Mr. Padam Kumar Jain Wholetime Director & CFO of the Company retire byrotation at the ensuing Annual General Meeting and being eligible has offered himself forre-appointment. Further on the recommendation of the Nomination & RemunerationCommittee the Board of Directors of the Company in its meeting held on 13th February2021 subject to the consent of the members of the Company had re-appointed Mr. PadamKumar Jain as Wholetime Director of the Company for a period of five years w.e.f. 1st June2021.

Furthermore on the recommendation of the Nomination & Remuneration Committee theBoard of Directors of the Company through Circular Resolution subject to the consent ofthe members of the Company had appointed Ms. Tripti Sinha as Independent Director on theBoard for a term of five years w.e.f. 20th October 2020. Necessary resolutions for theabove re-appointment/appointments are being made a part of the Notice convening theensuing general meeting. Brief profile of Mr. Padam Kumar Jain and Ms. Tripti Sinha whoare proposed to be re-appointed/ appointed nature of their expertise names of thecompanies in which they hold directorships their shareholding in the Company and otherrelevant details are provided in the Corporate Governance Report forming part of theAnnual Report. During the year under review the members approved the re-appointment ofMr. Pankaj Sarda as Director liable to retire by rotation. Your Company has received thenecessary declaration from each Independent Directors who are part of Board confirmingthat; a) he/she meets the criteria of Independence as laid out in Section 149(6) of theCompanies Act 2013 read with the Schedules rules made there under and Regulation 25 ofSEBI Listing Regulations 2015; and b) registered themselves with the IndependentDirectors' Databank as per the Companies (Appointment and Qualification of Directors)Fifth Amendment Rules 2019.

In the opinion of the Board there has been no change in the circumstances which mayaffect the status of Independent Directors of the Company and the Board is satisfied ofthe integrity expertise and experience (including proficiency in terms of Section 150(1)of the Act and applicable rules thereunder) of all Independent Directors on the Board.

During the year under review Mrs. Uma Sarda resigned from the Directorship of theCompany w.e.f. 6th November 2020. The Board takes on record its deep appreciation of theservices rendered by Mrs. Uma Sarda.

Mr. G.S. Sahni Independent Director also retired w.e.f. 1st April 2021 consequent toexpiry of his term of office. Post retirement from the Board of the Company Mr. G S SahniIAS who continued to be director on the Board of subsidiary Madhya Bharat PowerCorporation Limited suffered from COVID and expired on 9th May 2021. The Company hasbenefited a lot from his vast administrative experience deep involvement and longassociation. The board members places on record their deep appreciation of hiscontribution and pay their homage to the deceased soul.

Board Evaluation

The Board has carried out an annual evaluation of effectiveness of its functioningthat of its committees and individual Directors in the manner specified by the NRC. TheBoard reviewed the performance of the individual Directors the Board as a whole and itscommittees. A separate meeting of Independent Directors was also held to review theperformance of Non-Independent Directors; and performance of the Chairperson of theCompany considering the views of Executive Directors and Non-Executive Directors. Thiswas followed by a Board meeting that discussed the performance of the Board itscommittees and individual Directors including independent Directors. During evaluation ofthe individual director the concerned director was not present in the meeting. Theperformance of the Board and individual Directors was evaluated by the Board seekinginputs from all the Directors. The performance of the Committees was evaluated by theBoard seeking inputs from the Committee Members. Key criteria for performance evaluationare given in Annexure A to directors' report.

Remuneration Policy for the Board and Senior Management

Your Company follows a policy on remuneration of Directors Key Managerial Personnel(KMP) Senior Management Personnel (SMP) and other employees of the Company. The policy isapproved by the Nomination & Remuneration Committee of the Company. RemunerationPolicy for Directors Key Managerial Personnel and other employees is marked as Annexure Bto directors' report. Your Company with the approval of Nomination & RemunerationCommittee has adopted a policy on Board diversity and the recommendation of candidaturefor Board appointment will be based on merit that complements and expands the skillsexperience and expertise of the Board as a whole taking into account gender ageprofessional experience and qualifications cultural and educational background and anyother factors that the Board might consider relevant and applicable from time to timetowards achieving a diverse Board. The criteria for determining Qualification positiveattributes and Independence of director is enclosed as Annexure C to directors' report.

Familiarization programmes for Board Members

The Familiarization program aims to provide insight to the Independent Directors tounderstand the business of the Company. Upon induction the Independent Directors arefamiliarized with their roles rights and responsibilities. Your Company providesinformation to familiarize the Independent Directors with the strategy operations andfunctions of the Company. The Board members are also taken to the sites of subsidiaries tounderstand and review their functions. At various Board meetings during the year theBoard members are provided with information/ presentations and are given the opportunityto interact with the Senior Management of your Company to help them to understand theCompany's strategy/policies business model operations products markets organizationstructure finance human resources technology quality facilities and risk managementchanges in the regulatory environment applicable to the corporate sector and to theindustry in which it operates and such other matters as may arise from time to time.Quarterly presentations on operations made to the Board include information on businessperformance operations safety market scenario financial parameters working capitalmanagement fund flows senior management change major litigation compliancessubsidiary information donations regulatory scenario etc. The policy on familiarizationprogrammes for Independent Directors is posted on the website of the Companywww.seml.co.in and can be accessed under the head corporate governance/ policies under theInvestors' section. The details of the familiarization program are also available on theCompany's website at http://www.seml.co.in/Corporate%20Governance/Familiarization%20Programmes.pdf

Directors' Responsibility Statement Your directors state that: a) in thepreparation of the annual accounts for the year ended 31st March 2021 the applicableaccounting standards read with requirements set out under Schedule III to the Act havebeen followed and there are no material departures from the same; b) the Directors haveselected such accounting policies and applied them consistently and made judgements andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company as at 31st March 2021 and of the profit of the Company for theyear ended on that date; c) the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; d) the Directors have prepared the annual accounts on a ‘goingconcern' basis; e) the Directors have laid down internal financial controls to be followedby the Company and that such internal financial controls are adequate and are operatingeffectively; and f ) the Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.

Key Managerial Personnel

During the year there was no change in the Key Managerial Personnel.

Auditors and Auditors' Report Statutory Auditors

At the Annual General Meeting for the financial year 2018-19 held on 21st September2019 M/s. O.P. Singhania & Co. Chartered Accountants Raipur were appointed asstatutory auditors of the Company to hold office till the conclusion of the Annual GeneralMeeting (AGM) to be held in the calendar year 2024. The Notes on financial statementreferred to in the Auditors' Report are self-explanatory and do not call for any furthercomments. The Auditors' Report does not contain any qualification reservation or adverseremark. During the year under review the Auditors did not report any matter under Section143 (12) of the Act therefore no detail is required to be disclosed under Section134(3)(ca) of the Act.

Cost Auditors

Pursuant to Section 148 of the Companies Act 2013 read with The Companies (CostRecords and Audit) Rules 2014 the cost audit records maintained by the Company inrespect of various manufacturing activities are required to be audited. The cost auditreport for the financial year 2019-20 was filed with the Ministry of Corporate Affairs.M/s. S.N. & Co. Cost and Management Accountants were appointed as the Company's CostAuditor.

Your directors have on the recommendation of the Audit Committee appointed M/s. S.N.& Co. Cost and Management Accountants to audit the cost accounts of the Company on aremuneration of Rs 2.00 lakh for the year 2021-22. As required under the Companies Act2013 the remuneration payable to the Cost Auditors: i) for 2020-21 has been approved bythe members in the Annual General Meeting held on 24.09.2020. ii) for 2021-22 is beingplaced before the members in the ensuing annual general meeting for approval.

Secretarial Auditor

The Board has appointed M/s. S.G. Kankani & Associates Practicing CompanySecretaries to conduct Secretarial Audit for the financial year 2020-21. The SecretarialAudit Report for the financial year ended 31st March 2021 is annexed herewith marked asAnnexure D to this Report. With reference to the comment of the secretarial auditorsregarding -a) non-submission of information to Calcutta Stock Exchange - your directorswish to inform that the Company had complied with all requirements for delisting of itsshares from Calcutta Stock Exchange (CSE) in February 2004. The delisting application isstill pending on the part of CSE. In view of the pendency of delisting application theCompany has stopped sending any information to the Calcutta Stock Exchange and has alsoreported the matter to SEBI. b) delay of 202 days in appointment of Independent WomenDirector on the Board of Directors in terms of SEBI LODR Regulations – your directorswish to inform that the spread of COVID -19 pandemic delayed the selection of suitablecandidate. However the Company has appointed a woman independent director w.e.f. 20thOctober 2020. Further in terms of requirement of regulation 24A of SEBI ListingRegulations the Secretarial Audit Report for the financial year ended 31st March 2021in respect of Sarda Metals & Alloys Limited and Madhya Bharat Power CorporationLimited the material subsidiaries of the Company is annexed to this report marked asAnnexure E and Annexure F respectively.

Corporate Social Responsibility (CSR)

With the objective of sustainable development and continual improvement your Companyadopts a voluntary and proactive approach to CSR to connect with the society by creating asense of belonging. The Company continues its endeavour to improve the lives of people andprovide opportunities for their holistic development through its different initiatives inthe areas of Rural Transformation Health Education Sports for Development ArtsCulture & Heritage. Your Company strives for sustainable development programs inpartnership with the community. Members are requested to refer the Corporate GovernanceReport forming part of this annual report for the composition of the CSR Committee. TheCSR policy of the Company is available on the website of the Company – www.seml.co.in- under the head corporate governance/policies under the Investors' section. The annualreport on the CSR activities is annexed as Annexure G to this report. The Company's CSRinitiatives usually involve setting the foundation of various programs at a small scale tolearn from on-ground realities getting feedback from community and then putting anenhanced sustainable model to ensure maximum benefit to the community. During the yearthe Company's spending on CSR has been more than the statutorily required.

Corporate Governance

Pursuant to the Listing Regulations Corporate Governance Report along with theAuditors' Certificate regarding compliance of conditions of Corporate Governance is made apart of the Annual Report.

Business Responsibility / Sustainability Report

The Company is committed to pursue its business objectives sustainably ethicallytransparently and with accountability to all its stakeholders. The Company believes inensuring environmental well-being with a long-term perspective as well as demonstratingresponsible behaviour while adding value to the society and the community. The Companyfocuses on waste recycling. The Business Responsibility Report (BRR) of the Companyforming part of this annual report is being presented to the stakeholders as per therequirements of Regulation 34 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 describing the environmentalsocial and governance initiatives taken by the Company. The Company has also provided therequisite mapping of principles of the National Guidelines on Responsible Business Conductto fulfill the requirements of the Business Responsibility Report as per directive ofSEBI.

Disclosures

Board/Committees/Vigil Mechanism

The Board of Directors met 7 (seven) times during the financial year 2020-21. Thedetails of the composition of Board of Directors Corporate Social ResponsibilityCommittee Audit Committee other committees of the Board meetings of the board andcommittees and attendance of directors at the Board and committee meetings andimplementation of Vigil Mechanism are given in the Corporate Governance Report formingpart of this Annual Report.

Particulars of Loans given Investments made Guarantees given and Securities provided

Particulars of loans given investments made and guarantees given are given in note no.11 47 3 7 and 41 to the standalone financial statements. The Company in its capacityof promoter has pledged shares of Sarda Metals & Alloys Limited and Madhya BharatPower Corporation Limited with the lenders of respective companies for loans granted tothem by the lenders. The details of pledged shares are given as part of the financialstatements. The loans and the guarantees given are utilized by the recipients for theirbusiness purposes. Members are requested to refer the notes for details which are notrepeated here for the sake of brevity.

Contracts and Arrangements with Related Parties

During the year under review all related party transactions entered into by theCompany were approved by the Audit Committee and were at arm's length and in the ordinarycourse of business to further the business interests of the Company. Prior approval isobtained for related party transactions which are of repetitive nature and entered in theordinary course of business and on an arm's length basis. The Company did not have anycontracts or arrangements with related parties in terms of Section 188(1) of the Act.Also there were no material related party contracts entered into by the Company.Accordingly the disclosure of related party transactions as required under Section134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for financial year2020-21 and hence does not form part of this report. Details of related party transactionsentered into by the Company in terms of Ind AS-24 have been disclosed in the notes to thestandalone / consolidated financial statements forming part of this Report.

In line with the requirements of the Act and the SEBI Listing Regulations the Companyhas formulated a Policy on Related Party Transactions and the same can be accessed on theCompany's website – www. seml.co.in – under Policies under Investors' section.

Internal Financial Control

The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation were observed.

Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under the Act are provided inAnnexure H to this Report.

Annual Return

The Annual Return of the Company as on 31st March 2021 is available athttp://seml.co.in/Corporate%20Governance/Annual%20Return%202020-21.pdf

Particulars of Employees and related disclosures

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 astatement showing the names and other particulars of the employees drawing remuneration inexcess of the limits set out in the said rules is annexed herewith as Annexure I to thisReport.

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are provided in Annexure J to this report.

Risk Management

The Risk Management Committee has been entrusted with the responsibility to assist theBoard in (a) Overseeing and approving the Company's enterprise wide risk managementframework; and (b) Overseeing that all the risks that the organization faces such asstrategic financial credit market liquidity accident security property IT legalregulatory reputational and other risks have been identified and assessed and there is anadequate risk management infrastructure in place capable of addressing those risks. A RiskManagement Policy and a Hedging Policy as approved by the Board of Directors is in place.The Company monitors and manages the risks and uncertainties that can impact its abilityto achieve its strategic objectives.

General

Your directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review-

1. Details relating to deposits covered under Chapter V of the Act;

2. Issue of equity shares with differential rights as to dividend voting or otherwise;

3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme.

Your directors further confirm that -a) Neither the Managing Director nor theWhole-time Directors of the Company receive any remuneration or commission from any of itssubsidiaries; b) No significant or material orders were passed by the Regulators or Courtsor Tribunals which impact the going concern status and Company's operations in future; c)The Company is required to maintain cost records as specified by the Central Governmentunder sub-section (1) of section 148 of the Companies Act 2013 and such accounts andrecords are made and maintained; d) The Company has in place proper systems to ensurecompliance with the provisions of the applicable secretarial standards issued by TheInstitute of Company Secretaries of India and such systems are adequate and operatingeffectively; e) The Company has complied with provisions relating to the constitution ofInternal Complaints Committee under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 [14 of 2013]; f ) Under the Insolvencyand Bankruptcy Code 2016 no applications were made during the financial year 2020-21 byor against the Company and there are no proceedings pending as at the end of the financialyear; g) The Company has not made any one time settlement with any of its lenders.

Furthermore your directors also state that during the year under review there were nocases filed pursuant to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.

The disclosures/information/details disclosed/given elsewhere in the annual report havenot been repeated again in the directors' report for the sake of brevity. Members arerequested to refer relevant sections for the information. All policies/ disclosuresrequired to be disclosed on the website are available under the Investors' section on thewebsite of the Company at www.seml.co.in.

Acknowledgement

The Directors regret the loss of life due to COVID-19 pandemic and are deeply gratefuland have immense respect for every person who risked their life and safety to fight thispandemic. We thank our customers vendors dealers investors business associates andbankers for their continued support during the year. We place on record our appreciationof the contribution made by employees at all levels. The directors place on record theirgratitude for the valuable guidance and support rendered by various Governmentdepartments and other regulatory authorities and agencies for their support and lookforward to their continued support in future.

On behalf of the Board of Directors
(K. K. Sarda)
Raipur Chairman & Managing Director
31st July 2021 DIN: 00008170

.