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SEL Manufacturing Company Ltd.

BSE: 532886 Sector: Industrials
NSE: SELMC ISIN Code: INE105I01020
BSE 11:58 | 16 May 1163.30 -23.70
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NSE 11:44 | 16 May 1387.90 -28.30
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OPEN 1163.30
PREVIOUS CLOSE 1187.00
VOLUME 122
52-Week high 1237.85
52-Week low 4.78
P/E
Mkt Cap.(Rs cr) 3,854
Buy Price 0.00
Buy Qty 0.00
Sell Price 1163.30
Sell Qty 947.00
OPEN 1163.30
CLOSE 1187.00
VOLUME 122
52-Week high 1237.85
52-Week low 4.78
P/E
Mkt Cap.(Rs cr) 3,854
Buy Price 0.00
Buy Qty 0.00
Sell Price 1163.30
Sell Qty 947.00

SEL Manufacturing Company Ltd. (SELMC) - Director Report

Company director report

To

The Members

SEL Manufacturing Company Ltd.

The Directors hereby present the 21st Annual Report on the affairs of thecompany together with Audited Financial Statements for the financial year ended 31stMarch 2021.

FINANCIAL RESULTS

(Rupees in Lacs)

Current Year (2020-21) Previous Year (2019-20)
Revenue from Operations 19038.45 29104.29
Other Income 232.66 7659.79
19271.11 36764.08
Less : Expenditure 33390.82 35333.24
Depreciation &Amortization 10723.19 10782.78
44114.01 46116.02
Profit/(loss) before exceptional items And tax: (24842.90) (9351.94)
Exceptional Items (535236.65) 244749.42
Profit/(Loss) before tax: 510393.75 (254101.36)
Less : Taxes : - -
Profit/(Loss) from continuing Operations 510393.75 (254101.36)
Profit/(Loss) from discontinuing Operations - -
Profit/(Loss) for the period 510393.75 (254101.36)
Other Comprehensive Income
i)I tems that will not be reclassified to Profit or loss 318.16 62.28
ii) Items that will be reclassified to Profit or loss 2426.34 (779.99)
Total Comprehensive Income/(Loss)for the Period 513138.25 (254819.07)

The Directors of the Reconstituted Board were not in office for the majority period towhich these report/annexures primarily pertains. During the CIRP Process (i.e. between11th April 2018 and 12th March 2021) Resolution Professional (RP) was entrusted withand responsible for the management of the affairs of the Company. The Reconstituted Boardis submitting these reports/annexures in compliance with the Act and other Regulations andthe Directors as on date are not to be considered responsible to discharge fiduciaryduties with respect to the oversight on financial and operational health of the Companyand performance of the management for the period prior to the acquisition.

BUSINESS:

The Company is vertically integrated multi-product textile company manufacturingvarious kinds of Knitted Garments Terry Towels Knitted & Processed Fabric andvarious kind of Yarn with production facilities located at different parts of India.

State of Company's affairs:

During the year under review your company has achieved Revenue from Operations of Rs.19038.45 lacs as compared to Rs. 29104.29 lacs in the previous year. After deductingExpenses there was loss of Rs. 24842.90 lacs as compared to loss of Rs. 9351.94 lacsduring the previous year. After adjusting Exceptional Items there was Profit of Rs.510393.75 lacs as compared to Loss of Rs. 254101.36 lacs during the previous year. Afterproviding for other adjustments/comprehensive income the current year Profit/Income stoodat Rs. 513138.25 lacs as compared to loss of Rs. 254819.07 lacs during the previous year.

Pursuant to an application filed before the Hon'ble National Company Law TribunalChandigarh Bench ("NCLT") by State Bank of India against SELManufacturing Company Limited ("Corporate Debtor") under Section 7 ofthe Insolvency and Bankruptcy Code 2016 read with the rules and regulations framedthereunder as amended from time to time ("Code") the NCLT vide itsorder ("Admission Order") dated April 11 2018 ("InsolvencyCommencement Date") had admitted the application for the initiation of thecorporate insolvency resolution process ("CIRP") of the Corporate Debtor.Subsequently the NCLT vide its order dated April 25 2018 ("IRP Order")appointed Mr. Navneet Kumar Gupta as the interim resolution professional of theCorporate Debtor ("IRP").

Subsequently on a writ petition filed by the Corporate Debtor and the managingdirector of the Corporate Debtor against the Admission Order the Hon'ble High Court ofPunjab and Haryana ("High Court") vide its order dated May 01 2018while disallowing the writ petition kept the CIRP of the Corporate Debtor in abeyance andordered that the IRP not take over the management of the Corporate Debtor till May 152018 ("First Abeyance Order"). Pursuant to the First Abeyance Order theexisting management of the Corporate Debtor continued to manage the affairs of theCorporate Debtor during the period of abeyance. Against the First Abeyance Order aspecial leave petition was filed before the Hon'ble Supreme Court which while dismissingthe said special leave petition vide its order dated May 12 2018 extended the abeyanceof the CIRP by another week during which period the existing management retained controlover the management of the Corporate Debtor. Accordingly upon the lapse of the period ofabeyance as stipulated by the Hon'ble Supreme Court the CIRP of the Corporate Debtorresumed on May 21 2018 and Mr. Navneet Kumar Gupta resumed his position and duties asthe IRP on the same date. Thereafter in accordance with the provisions of the

Code the first meeting of the committee of creditors of the Corporate Debtor was heldon June 15 2018 wherein inter alia the IRP was confirmed as the resolution professionalof the Corporate Debtor ("Resolution Professional").

Subsequently a petition was filed by one of the promoters and directors of theCorporate Debtor before the High Court ("Petition") wherein the HighCourt vide its interim order dated June 22 2018 directed the CIRP of the CorporateDebtor to be kept in abeyance ("Second Abeyance Order") and directed theearlier board of directors of the Corporate Debtor to operate their bank accounts and bankoperations as before the initiation of the CIRP of the Corporate Debtor to protect theinterest of the bank consortium. This Petition was transferred to the Hon'ble SupremeCourt ("Transferred Case"). The Hon'ble Supreme Court vide its orderdated September 6 2019 as prayed for dismissed the Transferred Case as withdrawn ("WithdrawalOrder"). A copy of the Withdrawal Order was published on September 11 2019("Publication Date"). Accordingly on and from the Publication Date theCIRP of the Corporate Debtor stood restored and the Resolution Professional had resumedhis position as such.

As such on and from the Publication Date the Resolution Professional had again assumedcontrol over the management of the affairs of the Corporate Debtor and the powers of theboard of directors of the Corporate Debtor.

As narrated above the Company was undergoing Corporate Insolvency Resolution Process("CIRP") in accordance with the provisions of the Insolvency andBankruptcy Code 2016 read with the IBBI (Insolvency Resolution Process for CorporatePersons) Regulations 2016. Upon re-initiation of CIRP the management of the Company washanded over from the existing board of directors to the resolution professional appointedby the Hon'ble NCLT.

Further the Hon'ble National Company Law Tribunal Chandigarh Bench on February 102021 approved the Resolution plan submitted by Consortium of Arr Ess Industries PrivateLimited and Leading Edge Commercial FZE ("Consortium" or "ResolutionApplicant") in respect of SEL Manufacturing Company Limited ("Company")and the Monitoring Committee ("MC") of the Company (constituted in termsof the Resolution Plan) in its meeting held on March 13 2021 duly appointed the nomineesof the Resolution Applicant as Directors of the Company and approved the reconstitution ofthe Board of Directors of the Company ("Reconstituted Board").

Pursuant to the Resolution Plan submitted by the Consortium of ARR ESS IndustriesPrivate Limited and Leading Commercial Edge FZE (Collectively referred to as the"Resolution Applicant") and its approval by the Hon'ble National Company LawTribunal Chandigarh bench vide their orders dated 10th February 2021 for the corporateinsolvency of the Company which is implemented from 13th March 2021 (i.e.closing date as defined under the resolution plan) the following consequential impactshave been given in accordance with approved resolution plan:

i) The existing directors of the Company as on the date of order have stand replaced bythe new Board of Directors from their office with effect from 13 th March2021.

ii) The erstwhile promoter group has been classified as public shareholders.

iii) With effect from 13th March 2021 the existing issued subscribed andpaid up equity share capital of the Company has been reduced from Rs. 33134.70 lakhsdivided into 331347000 equity shares of Rs. 10 each to Rs. 33.13 lakhs divided into331347 equity share of Rs. 10 each thereby reducing the value of issued subscribed andpaid up equity share capital of the Company by Rs. 33101.57 lakhs. Further with effectfrom 13th March 2021 the existing issued subscribed paid up 69710000 1%Redeemable Non Cumulative Non Convertible Preference Shares of Rs. 10 each stand fullycancelled and extinguished. As prescribed in the Resolution Plan the reduction in theshare capital of the Company amounting to Rs. 33101.57 lakhs is adjusted against thedebit balance as appearing in its profit and loss account (i.e. retained earnings). As perthe approved Resolution Plan 32803353 equity shares (new) were allotted in favour offinancial creditors and resolution applicant.

iv) Transfer of Subsidiary Company M/s SEL Textiles Limited: As a part of theResolution Plan the Parent Company has transferred its identified subsidiary to the trustalongwith its entire equity/ownership interest held in the subsidiary at a fair value on"as is where is whatever there is" and without recourse basis".

v) Pursuant to the approved resolution plan by NCLT the Company has issued UnlistedNon-Marketable Secured/Unsecured Non-Convertible Redeemable Debentures (i.e. 31980898Debentures of Rs.100/- each) amounting Rs. 3198089800.00 to the Financial Creditors andResolution Applicant of the Company.

Other terms of Resolution Plan are also provided in Notes to the Financial Statements.

SUBSIDIARY COMPANY/FIRM(S):

As at 31.03.2021 the Company has the following Subsidiary Company namely SEL AviationPvt. Ltd..

The Annual Accounts/Financial Statements of the Subsidiary company and the relateddetailed information shall be made available to shareholders of the holding and subsidiarycompanies seeking such information at any point of time.

Further the Annual Accounts/Financial Statements of the subsidiary company are kept forinspection by any shareholders in the head office i.e. the Registered Office of theholding company and of the subsidiary company concerned.

SEL Aviation Pvt. Ltd. subsidiary of the company is in the business of Aviationservices. The contribution of Subsidiaries in the overall performance is as given inConsolidated Financial Statements. Further the Report on financial position ofsubsidiaries alongwith names of companies which have ceased to be its subsidiariesassociate companies etc. during the year has been duly provided as an Attachment inprescribed Form AOC1.

Consolidated Financial Statements:

The Consolidated Financial Statements of the Company and its subsidiaries prepared andpresented in accordance with Accounting Standard are attached to and form part of theAnnual Report.

CORPORATE GOVERNANCE:

Your Company is committed to adhere to the best Practices of governance. In yourCompany prime importance is given to reliable financial information integritytransparency fairness empowerment & compliances. A separate section on CorporateGovernance and a Certificate regarding compliance of conditions of Corporate Governanceforms part of the Annual Report

DIVIDEND:

The directors have not recommended any dividend for the Financial year 2020-21.

SHARES WITH DIFFERENTIAL RIGHTS EMPLOYEE STOCK OPTION SWEAT EUITY SHARES:

During the year the company has not issued any Equity Shares with Differential RightsEmployee Stock Options and/or Sweat Equity Shares.

FIXED DEPOSITS:

During the year your Company has not accepted any fixed deposits under the provisionsof the Companies Act 2013 and the Rules made there under.

SECRETARIAL STANDARDS:

The Company has complied with applicable secretarial Standards.

DIRECTORS & KMP:

As narrated before the Company was undergoing Corporate Insolvency Resolution Process("CIRP") in accordance with the provisions of the Insolvency andBankruptcy Code 2016 read with the IBBI (Insolvency Resolution Process for CorporatePersons) Regulations 2016. Upon re-initiation of CIRP the management of the Company washanded over from the existing board of directors to the resolution professional appointedby the Hon'ble NCLT.

Upon approval of the Resolution Plan the existing directors of the Company as on thedate of order have stand replaced by the new Board of Directors from their office witheffect from 13th March 2021.

As on date the Board of Directors consist of Mr. Rajeev Bhalla Mr. Naveen Arora Mr.Dinesh Kumar Mehtani Mr. Shashank Rai Mr. Sushil Kumar Ms. Nidhi Aggarwal Mr. RajivKumar Maheshwary and Mr. Vishal Sharat Ohri (Nominee). Further on 8th April 2021 Mr.Rajeev Bhalla was appointed as Managing Director and Mr. Naveen Arora as Whole TimeDirector of the Company respectively.

As new Board was formed w.e.f. 13.03.2021 respectively confirmation for appointment ofDirectors is proposed for approval in the ensuing Annual General Meeting. Furtherappointment of Independent directors by Special resolution is also proposed for approvalin the ensuing Annual General Meeting. Further the appointment/remuneration of Mr. RajeevBhalla as Managing Director and Mr. Naveen Arora as Whole time Director of the Companyrespectively for a period of 3 years is put for confirmation by the members of the Companyin the ensuing Annual General Meeting. Details of appointment and terms are given indetail in the Notice/Annexure to Notice for the ensuing Annual General Meeting.

LISTING WITH EXCHANGES AND LISTING FEES:

The Equity Shares of the Company are presently listed with Bombay Stock ExchangeLimited (BSE) and The National Stock Exchange of India Ltd. (NSE). Further the Company haspaid listing fees to both the exchanges (i.e. BSE and NSE) upto financial year 2021-22.

FURTHER ISSUE OF SECURITIES:

As per the approved Resolution Plan by NCLT 32803353 New Equity shares of the facevalue of Rs. 10/- each were allotted in favour of financial creditors and resolutionapplicant (SPV).

Further pursuant to the approved resolution plan by NCLT the Company has issuedUnlisted Non-Marketable Secured/Unsecured Non-Convertible Redeemable Debentures (i.e.31980898 Debentures of Rs.100/- each) amounting Rs. 3198089800.00 to the FinancialCreditors and Resolution Applicant (SPV) of the Company.

AUDITORS:

M/s Malhotra Manik & Associates Chartered Accountants (Firm Registration No.015848N) were appointed as Auditors of the Company for a term of five years.

AUDITORS' REPORT:

The report of Auditors and notes on accounts are self explanatory and do not call forany further comments as there are no adverse remarks/qualified opinion by the Auditors.

COST AUDITORS:

In terms of the Section 148 of the Companies Act 2013 read with Companies (CostRecords and Audit) Rules 2014 the Company is required to maintain cost accountingrecords and get them audited every year and accordingly such accounts and records are madeand maintained. The Board appointed M/s. Jatin Sharma & Co. Cost Accountants as costauditors of the Company for the financial year 2021-22 at a fee of INR 77000 plusapplicable taxes and out of pocket expenses subject to the ratification of the said feesby the shareholders at the ensuing annual general meeting. The cost audit report for thefinancial year ended March 31 2021 has been filed with the Central Government.

Number of Board Meetings held during the year:

Upon approval of the Resolution plan pursuant to CIRP new Board of Directors wasformed. The Board met 4 times during the financial year 2020-21 the details of which aregiven in corporate governance section.

Annual Evaluation of the performance of the Board its Committees and of IndividualDirectors:

The Company was undergoing Corporate Insolvency Resolution Process ("CIRP")in accordance with the provisions of the Insolvency and Bankruptcy Code 2016 read withthe IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016. Uponapproval of the Resolution plan pursuant to CIRP new Board of Directors was formed.

Declaration by Independent Directors as required under Section 149(7) of the CompaniesAct 2013:

All the Independent directors of the company have given their statement of declarationunder Section 149(7) of the Companies Act 2013 ("the Act") that they meet thecriteria of independence as provided in Section 149(6) of the Act and their Declarationshave been taken on record.

Development and implementation of a Risk Management Policy:

The main objective of Risk Management is risk reduction and avoidance as alsoidentification of the risks faced by the business and optimize the risk managementstrategies. The Company has put in place a well-defined Risk Management framework fordrawing up implementing monitoring and reviewing the Risk Management.

POLICY ON DIRECTORS' APPOINTMENT & REMUNERATION

The Company strives to maintain an appropriate combination of executive non-executiveand independent Directors including at least one woman Director. The Nomination &Remuneration Committee of the Company leads the process for Board appointments inaccordance with the requirements of Companies Act 2013 listing agreement and otherapplicable regulations or guidelines. All the Board appointments are based on meritocracy.The potential candidates for appointment to the Board are interalia evaluated on the basisof highest level of personal and professional ethics standing integrity values andcharacter; appreciation of the Company's vision mission values; prominence in businessinstitutions or professions; professional skill knowledge and expertise; financialliteracy and such other competencies and skills as may be considered necessary. Inaddition to the above the candidature of an independent Director is also evaluated interms of the criteria for determining independence as stipulated under Companies Act2013 listing agreement and other applicable regulations or guidelines. In case ofreappointment of Independent Directors the Board shall take into consideration theresults of the performance evaluation of the Directors and their engagement level. Thereis a Remuneration Policy for Directors KMPs and other employees.

LOANS GUARANTEES AND INVESTMENTS BY THE COMPANY

Details of loans guarantees and investments by the Company to other body corporates orpersons are given in Financial Statements/Notes to the financial statements.

MATERIAL AND SIGNIFICANT ORDERS PASSED BY REGULATORS & COURTS

Pursuant to an application filed before the Hon'ble National Company Law TribunalChandigarh Bench ("NCLT") by State Bank of India against SELManufacturing Company Limited ("Corporate Debtor") under Section 7 ofthe Insolvency and Bankruptcy Code 2016 read with the rules and regulations framedthereunder as amended from time to time ("Code") the NCLT vide itsorder ("Admission Order") dated April 11 2018 ("InsolvencyCommencement Date") had admitted the application for the initiation of thecorporate insolvency resolution process ("CIRP") of the Corporate Debtor.Subsequently the NCLT vide its order dated April 25 2018 ("IRP Order")appointed Mr. Navneet Kumar Gupta as the interim resolution professional of theCorporate Debtor ("IRP").

Subsequently on a writ petition filed by the Corporate Debtor and the managingdirector of the Corporate Debtor against the Admission Order the Hon'ble High Court ofPunjab and Haryana ("High Court") vide its order dated May 01 2018while disallowing the writ petition kept the CIRP of the Corporate Debtor in abeyance andordered that the IRP not take over the management of the Corporate Debtor till May 152018 ("First Abeyance Order"). Pursuant to the First Abeyance Order theexisting management of the Corporate Debtor continued to manage the affairs of theCorporate Debtor during the period of abeyance. Against the First Abeyance Order aspecial leave petition was filed before the Hon'ble Supreme Court which while dismissingthe said special leave petition vide its order dated May 12 2018 extended the abeyanceof the CIRP by another week during which period the existing management retained controlover the management of the Corporate Debtor. Accordingly upon the lapse of the period ofabeyance as stipulated by the Hon'ble Supreme Court the CIRP of the Corporate Debtorresumed on May 21 2018 and Mr. Navneet Kumar Gupta resumed his position and duties asthe IRP on the same date. Thereafter in accordance with the provisions of the

Code the first meeting of the committee of creditors of the Corporate Debtor was heldon June 15 2018 wherein inter alia the IRP was confirmed as the resolution professionalof the Corporate Debtor ("Resolution Professional").

Subsequently a petition was filed by one of the promoters and directors of theCorporate Debtor before the High Court ("Petition") wherein the HighCourt vide its interim order dated June 22 2018 directed the CIRP of the CorporateDebtor to be kept in abeyance ("Second Abeyance Order") and directed theearlier board of directors of the Corporate Debtor to operate their bank accounts and bankoperations as before the initiation of the CIRP of the Corporate Debtor to protect theinterest of the bank consortium. This Petition was transferred to the Hon'ble SupremeCourt ("Transferred Case"). The Hon'ble Supreme Court vide its orderdated September 6 2019 as prayed for dismissed the Transferred Case as withdrawn ("WithdrawalOrder"). A copy of the Withdrawal Order was published on September 11 2019("Publication Date"). Accordingly on and from the Publication Date theCIRP of the Corporate Debtor stood restored and the Resolution Professional had resumedhis position as such.

As such on and from the Publication Date the Resolution Professional had again assumedcontrol over the management of the affairs of the Corporate Debtor and the powers of theboard of directors of the Corporate Debtor.

Further the Hon'ble National Company Law Tribunal Chandigarh Bench on February 102021 approved the Resolution plan submitted by Consortium of Arr Ess Industries PrivateLimited and Leading Edge Commercial FZE ("Consortium" or "ResolutionApplicant") in respect of SEL Manufacturing Company Limited ("Company")and the Monitoring Committee ("MC") of the Company (constituted in termsof the Resolution Plan) in its meeting held on March 13 2021 duly appointed the nomineesof the Resolution Applicant as Directors of the Company and approved the reconstitution ofthe Board of Directors of the Company ("Reconstituted Board"). TheReconstituted Board has just been formed on March 13 2021 and is in process to regulariseall the issues at the earliest.

No other significant and material orders have been passed by any regulators or courtsor tribunals against the Company impacting the going concern status and Company'soperations in future.

MATERIAL CHANGES & COMMITMENTS

Apart from the Orders of NCLT and other Court(s) Orders completion of CIRP processunder IBC and State of Company's Affairs as stated earlier no material changes andcommitments affecting the financial position of the Company have occurred after the endof the financial year 2020-21 and till the date of this report.

THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

Your Company has always believed in providing a safe and harassment free workplace forevery individual working in SEL through various interventions and practices. The

Company has complied with provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. The Company always endeavors to create and providean environment that is free from discrimination and harassment including sexualharassment. The Company believes in prevention of harassment of employees as well ascontractors. During the year ended 31 March 2021 no complaints pertaining to sexualharassment were received.

RELEVANT EXTRACT OF THE ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT-9 as requiredunder the provisions of the Companies Act 2013 forms an integral part of Board Report.Form MGT-9 is available on the website of the Company and can be accessed at www.selindia.in/policy. html

SECRETARIAL AUDIT

The report of the Secretarial Audit is annexed to this report as Annexure V.

With reference to Secretarial Auditors comments regarding not having alteast Half ofthe Board of Independent Directors as per the requirements under the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 as per SEBI (LODR) ThirdAmendment Regulations 2018 the provisions as specified in Regulation 17 etc. of theSEBI(LODR) Regulations shall not be applicable during the insolvency resolution processperiod in respect of a listed entity which is undergoing corporate insolvency resolutionprocess under the Insolvency code. Further upon approval of the Resolution plan pursuantto CIRP new Board of Directors was formed on 13.03.2021.

With reference to other comments regarding Non-submission of Financial Results in timeunder Regulation 33 (3) of the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 for quarter/financial year ended31.03.2020 quarter ended 30.06.2020 quarter/half year ended 30.09.2020 quarter/ninemonths period ended 31.12.2020 and also for Non-submission of annual Report for F.Y.ended 31.03.2020 Non holding of AGM for the year 2020 and annual forms thereof theCompany was under CIRP process during that period and the Exchanges were informed inrespect of interalia the insolvency commencement date the appointment of the RP etc. andthe Resolution Professional (RP) was entrusted with and responsible for the management ofthe affairs of the Company.

Further the "Secretarial Auditors" report is self explanatory and thereforedoes not require further comments and explanation.

RELATED PARTY TRANSACTIONS

There is a policy to regulate the transactions of the Company with its related parties.As per policy all related party transactions require approval as per the provisions ofthe Companies Act 2013 and SEBI (LODR) Regulations. The said policy is available on theCompany's website viz. www .selindia.in/policy. html

Further the Company has also formulated a policy for determining ‘material'subsidiaries. The said policy is available on the Company's website viz.www.selindia.in/policy.html. Details of transactions are also given in Annexure IV to thisreport in the prescribed form.

VIGIL MECHANISM

The Company has in place a whistleblower policy to support the Code of BusinessEthics. This policy documents the Company's commitment to maintain an open workenvironment in which employees consultants and contractors are able to report instancesof unethical or undesirable conduct actual or suspected fraud or any violation ofCompany's Code of Business Ethics at a significantly senior level without fear ofintimidation or retaliation.

Individuals can also raise their concerns directly to the chairman of the AuditCommittee of the Company. Any allegations that fall within the scope of the concernsidentified are investigated and dealt with appropriately. Further during the year noindividual was denied access to the Audit Committee/relevant authority for reportingconcerns if any. The details of establishment of vigil mechanism for Directors &employees to report genuine concerns are available at the website of the Company viz.www.selindia.in/policy.html

INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY:

SEL continuously invests in strengthening its internal control processes. The Companyhas put in place an adequate system of internal financial control commensurate with itssize and nature of business which helps in ensuring the orderly and efficient conduct ofits business. These systems provide a reasonable assurance in respect of providingfinancial and operational information complying with applicable statutes safeguarding ofassets of the Company prevention & detection of frauds accuracy & completenessof accounting records and ensuring compliance with corporate policies.

FAMILIARISATION PROGRAM FOR DIRECTORS:

The Company provides an orientation and business overview to all its new Directors andIndependent directors and provides materials and briefing sessions periodically whichassists them in discharging their duties and responsibilities.

The Directors of the Company are also informed of the important developments in theCompany and Industry. Directors are fully briefed on all business related matters and newinitiatives proposed by the Company and updated on changes and developments in thedomestic & global corporate and industry scenario. The details of the familiarisationprogram for Directors is available on the website of the Company viz.www.selindia.in/policy. html

CHANGES IN CAPITAL STRUCTURE:

As per the terms of the approved Resolution Plan under IBC with effect from 13th March2021 the existing issued subscribed and paid up equity share capital of the Company hasbeen reduced from Rs. 33134.70 lakhs divided into 331347000 equity shares of Rs. 10each to Rs. 33.13 lakhs divided into 331347 equity share of Rs. 10 each thereby reducingthe value of issued subscribed and paid up equity share capital of the Company by Rs.33101.57 lakhs.

As such in terms of the aforesaid scheme the Monitoring Committee of the Company(which was formed as per the terms of the Approved Resolution Plan for undertaking theimplementation of the Approved Resolution Plan and had the powers of the Board ofDirectors of the Company) in their meeting held on February 26 2021 had fixed the RecordDate i.e. Wednesday March 10 2021 for the purpose of determining the equity shareholdersof Sel Manufacturing Company Ltd. to whom fully paid-up equity shares will be allotted bythe Company in exchange of equity shares held by them in SEL Manufacturing Company Ltd.as per details given below:

1Equity Share of a face value of INR 10 each of the Company for every 1000 EquityShares of a face value of INR 10 each held by them in SEL Manufacturing Company Ltd.

Further with effect from 13th March 2021 the existing issued subscribedpaid up 69710000 1% Redeemable Non Cumulative Non Convertible Preference Shares ofRs. 10 each stand fully cancelled and extinguished. As prescribed in the Resolution Planthe reduction in the share capital of the Company amounting to Rs. 33101.57 lakhs isadjusted against the debit balance as appearing in its profit and loss account (i.e.retained earnings).

Further as per the approved Resolution Plan 32803353 Equity shares (new) of theface value of Rs.10/- each were allotted in favour of Financial Creditors and ResolutionApplicant (SPV).

Further pursuant to the approved resolution plan by NCLT the Company has issuedUnlisted Non-Marketable Secured/Unsecured Non-Convertible Redeemable Debentures (i.e.31980898 Debentures of Rs.100/- each) amounting Rs. 3198089800.00 to the FinancialCreditors and Resolution Applicant (SPV) for the Company.

AUDIT COMMITTEE:

The Board has constituted its Audit Committee pursuant to the provisions of Section 177of the Companies Act 2013 and provisions of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The Audit Committee of the Company presently comprises ofthe following members namely Mr. Sushil Kumar Mr. Rajiv Kumar Maheshwary Mr. DineshKumar Mehtani and Ms. Nidhi Aggarwal. Mr. Sushil Kumar is the chairman of the saidcommittee.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information on conservation of energy technology absorption and foreign exchangeearnings and outgo is given in Annexure I to this report.

PARTICULARS OF EMPLOYEES:

In accordance with the provisions of Section 197(12) of the Companies Act 2013 andRule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014the names and other particulars of employees are set out in the Annexure-II to this reportand forms part of this report.

DIRECTORS' RESPONSIBILITY STATEMENT:

The Directors would like to assure the Members that the financial statements for theyear under review conform in their entirety to the requirements of the Companies Act2013.

The Directors confirm that:

• In the preparation of the annual accounts/financial statements the applicableaccounting standards have been followed along with proper explanation relating to materialdepartures;

• Appropriate accounting policies have been selected and applied consistently andhave made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2021 and ofthe profit/loss of the Company for the year ended on 31st March 2021;

• Proper and sufficient care has been taken for maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

• The annual accounts/financial statements have been prepared on a going concernbasis.

• That Internal financial controls were laid down to be followed by the companyand that such internal financial controls are adequate and were operating effectively.

• Proper systems had been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

CORPORATE SOCIAL RESPONSIBILITY

Although the CSR provisions are not applicable to the Company based on Annual FinancialStatements for the F.Y. 2019-20 The Company has formed the Corporate SocialResponsibility Committee which consists of Sh. Rajeev Bhalla (Chairman) Mr. SushilKumar and Sh. Dinesh Kumar Mehtani.

The annual report on CSR containing particulars specified in Companies (CSR Policy)Rules 2014 is given in Annexure III. The CSR policy of the Company is also placed on thewebsite of the Company viz. www.selindia.in/policy.html

ACKNOWLEDGEMENTS:

Your Directors express their gratitude to the Company's vendors customers BanksFinancial Institutions Shareholders & society at large for their understanding andsupport. Finally your Directors acknowledge the dedicated services rendered by allemployees of the company.

For and on Behalf of the Board

For SEL MANUFACTURING COMPANY LTD.

PLACE : LUDHIANA (NAVEEN ARORA) (RAJEEV BHALLA)
DATED : 31.03.2022 WHOLE TIME DIRECTOR MANAGING DIRECTOR
DIN:09114375 DIN: 00551773

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