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SEL Manufacturing Company Ltd.

BSE: 532886 Sector: Industrials
NSE: SELMCL ISIN Code: INE105I01012
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NSE 11:48 | 22 Feb 1.05 0
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OPEN 1.03
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VOLUME 2000
52-Week high 3.25
52-Week low 0.97
P/E
Mkt Cap.(Rs cr) 34
Buy Price 1.04
Buy Qty 5500.00
Sell Price 1.12
Sell Qty 10000.00
OPEN 1.03
CLOSE 1.08
VOLUME 2000
52-Week high 3.25
52-Week low 0.97
P/E
Mkt Cap.(Rs cr) 34
Buy Price 1.04
Buy Qty 5500.00
Sell Price 1.12
Sell Qty 10000.00

SEL Manufacturing Company Ltd. (SELMCL) - Director Report

Company director report

To

The Members

SEL Manufacturing Company Ltd.

Your Directors have pleasure in presenting their 18th Annual Report on the affairs ofthe company together with Audited Financial Statements for the financial year ended 31stMarch 2018.

FINANCIAL RESULTS (Rupees in Lacs)
Current Year (2017-18) Previous year (2016-17)
Revenue from Operations 98927.71 171287.12
Other Income 4900.63 8976.26
103828.34 180263.38
Less :
Expenditure 126889.65 231642.07
Depreciation & Amortization 11163.56 11408.91
138053.21 243050.98
Profit/(loss)before
exceptional items and tax: (34224.87) (62787.60)
Exceptional Items 132495.53 22650.68
Profit/(Loss) before tax: (166720.40) (85438.28)
Less :
Taxes : Deferred Tax 49925.94 (29682.89)
Mat Credit Entitlement 5533.60 ---
55459.54 (29682.89)
Profit/(Loss)from continuing operations (222179.94) (55755.39)
Profit/(Loss)from discontinuing operations --- ---
Profit/(Loss) for the period (222179.94) (55755.39)
Other Comprehensive Income
I) Item that will not be reclassified 395.14 32.80
to Profit or Loss
ii) Item that will be reclassified (1836.05) 3804.62
to Profit or Loss
Total Comprehensive Income/(Loss) For the Period (223620.85) (51917.97)

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.98927.71 lacs as compared to Rs. 171287.12 lacs in the previous year. After deductingExpenses and Exceptional Items there was Loss of Rs. 166720.40 lacs as compared to Loss ofRs. 85438.28 lacs during the previous year. After providing for taxes and otheradjustments the current year loss stood at Rs. 222179.94 lacs as compared to loss of Rs.55755.39 lacs during the previous year.

The Company followed an aggressive growth path and had considerably grown its balancesheet including debt. Due to the industry situation in general viz. slowdown and companyspecific issues such as growing debt delayed realization of debtors working capitalshortfall delay in project completion and cash flow mismatch which had adverselyaffected the liquidity position of the company the company was facing financial problemsand finding difficulty in servicing its debt obligation. Therefore it approached thelenders for restructuring its debts under Corporate Debt Restructuring (CDR) mechanism.The Company's proposal for restructuring of its debts was approved by Corporate DebtRestructuring Cell ("CDR Cell") vides Letter of Approval (LOA) dt. 30.06.2014.

However the credit facilities envisaged and sanctioned under CDR package were notreleased by the lenders to the Company which resulted in sub-optimum utilization ofmanufacturing facilities. Due to non-disbursement of funds the Company could not completeone of its spinning projects where substantial amount was already incurred. All this hasled to adverse financial performance and erosion in net worth of the Company. Also thecompany has been facing cash flow mismatch and is not able to serve debt obligations asper the terms of CDR package sanctioned earlier. Due to financial constraints the companyhas also started job work operations in some of its spinning plants.

Since the Company was finding it difficult to serve its debt obligations the Companyhas requested its lenders for a second/deep restructuring of its debts. Considering thestate of art manufacturing facilities of the Company most modernized technology skilledlabor force professional management and inherent viability of the Company the lendershad in-principle agreed for second/deep restructuring of the debts. Pending discussionswith the lenders State Bank of India in its capacity as financial creditor has filed apetition on 12th October 2017 under "Insolvency and Bankruptcy Code 2016"(IBC) with Hon'ble National Company Law Tribunal Chandigarh Bench (NCLT). On 11th April2018 the NCLT vide it's order of even date admitted the said petition and CorporateInsolvency Resolution Process (CIRP) has been initiated. Mr. Navneet Kumar Gupta havingRegistration No.IBBI/IPA-001/IP-P00001/2016-17/10009 was appointed as Interim ResolutionProfessional (IRP) vide order dt. 25th April 2018 and the affairs business and assetsare being managed by the Interim Resolution Professional (IRP). The Company has preferredan appeal against the admission of petition and appointment of IRP with National CompanyLaw Appellate Tribunal (NCLAT).

The Corporate Insolvency Resolution Process (CIRP) has since been kept in abeyance videorder dt. 22nd June 2018 of Hon'ble High Court of Punjab & Haryana. Accordingly theCompany has prepared these financial statements on the basis of going concern assumption.

Due to non disbursement of credit facilities the Company had suffered operationallosses as well as capital losses. Therefore the Company has presented before theAdjudicating Authority counter claim & claim of set off against the banks.

Further the majority of secured lenders have stopped charging interest on borrowingssince the accounts of the Company have been categorized as Non Performing Asset. Furtherthe Corporate Insolvency Resolution Process had been initiated under "Insolvency andBankruptcy Code 2016". In view of the above the Company has stopped providinginterest accrued and unpaid effective 1st April 2016 in its books

SUBSIDIARY COMPANY/FIRM(S):

As at 31.03.2018 the Company has the following Subsidiary Company(ies) namely SELAviation Pvt. Ltd. SEL Textiles Ltd. Silverline Corporation Ltd. and also a subsidiaryfirm namely M/s SE Exports.

The Annual Accounts/Financial Statements of the Subsidiary companies/firms and therelated detailed information shall be made available to shareholders of the holding andsubsidiary companies seeking such information at any point of time. Further the AnnualAccounts/Financial Statements of the subsidiary companies are kept for inspection by anyshareholders in the head office i.e. the Registered Office of the holding company and ofthe subsidiary companies concerned.

Your company continue to hold 99% stake in the partnership firm namely M/s SE Exports.

SEL Textiles Ltd. is the wholly owned Subsidiary of the Company. SEL Textiles Ltd. isengaged in the business of textiles and the Company has two spinning unit(s) one atNeemrana (Rajasthan) and one at Hansi Hissar (Haryana) and a terry towel unit at NawaSheher Punjab Spinning unit at Vill Punjava-Lambi Tehsil Malout Dist Sri Muktsar Sahib(Punjab). Further SEL Textiles Ltd. has a subsidiary company i.e. M/s SilverlineCorporation Ltd.. SEL Aviation Pvt. Ltd. subsidiary of the company is in the business ofAviation services. The contribution of Subsidiaries in the overall performance is as givenin Consolidated 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:

Due to the losses incurred in F.Y. 2017-18 and scarcity of funds the directors havenot recommended any dividend for the Financial year 2017-18.

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.

DIRECTORS & KMP:

Mr. Ram Saran Saluja Director of the Company retires by rotation at this AnnualGeneral Meeting and being eligible offer himself for re-appointment. Further there-appointment of Mr. Neeraj Saluja as Managing Director of the Company for a furtherperiod of 3 years is put for confirmation by the members of the Company in the ensuingAnnual General Meeting. Further Mr. Amit Narang Mr. Prem Kumar and Mr. Kanwalnain SinghKang resigned from post of Director of the Company w.e.f. 28.07.2017 05.10.2017 and20.07.2017 respectively. Mr. Dhiraj Saluja holding of office or place ofprofit/employment as "Chief Markeing Officer" (CMO) of the Company due to hisvast experience in Marketing areas etc. is

put up for approval of the Members. Details of his appointment and terms are given indetail in the 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 2018-19.The GDRs of the company are listed on Luxembourg Stock Exchange.

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:

A) With reference to the Auditors remarks regarding non provision of interest on NPAclassified bank borrowings the Board would like to state that the Majority of Lenders havestopped charging interest on debts since the dues from the Company have been categorizedas Non Performing Asset. Further the Corporate Insolvency Resolution Process has beeninitiated under "Insolvency and Bankruptcy Code 2016". In view of the abovethe Company has stopped providing interest accrued and unpaid effective 1st April 2016 inits books. The amount of such accrued and unpaid interest calculated according to the CDRterm not provided for is estimated at Rs. 54084 lakhs (Previous Year Rs. 35901 lakhs)for the year ended 31st March 2018 and the same has not been considered for preparationof the financial statements for the year ended 31st March 2018. Due to non provision ofthe interest expense net loss for the year ended 31st March 2018 is reduced by Rs.54084 lakhs. Further the Financial Liability is reduced by Rs. 89985 lakhs andcorrespondingly the equity is increased by the same amount.

B) With reference to remark on Interest subsidy receivable the Board would like tostate that the Subsidies are to be released by Ministry of Textiles and Madhya PradeshGovernment and the Company is hopeful of receiving the same in full. Since the subsidiesare not related to current year the same does not have any impact on current year'sprofits/losses of the Company. However the reserves & surplus & current assets areoverstated to the extent.

C) With reference to remark on Impairment testing the Board would like to state thatthe Company was implementing a Spinning project which got stuck due to non-disbursement ofcredit facilities by the Banks. However post Corporate Insolvency Resolution Process(CIRP) the Company expects that the project would be completed. Therefore impairmenttesting was not conducted.

D) With reference to remark on Write down of inventories of Raw materials etc theBoard would like to state that due to the liquidity stress which the Company was facingfrom last five years the Company has not been able to manufacture products as perrequirements of the buyers or as per market demand. It has been manufacturing products tokeep its production capacities working and as per availability of raw material. TheCompany has been procuring raw material from the sources where credit is available. Allthis had resulted in build-up of obsolete stock and slow moving stock which has been nowwritten down to net realizable value.

E) With reference to remark on shortfall in the carrying value of the Security theBoard would like to state that the carrying value of the security has reduced due towriting down of inventories impairment of advances trade receivables etc. Furtherinclusion of Corporate Guarantee in financial statement has increased the borrowingswithout corresponding increase in security value.

Further the report of Auditors and notes on accounts are self explanatory and do notcall for any further comments as there are no further adverse remarks/qualified opinion bythe Auditors.

Further regarding Auditors Emphasis of Matter in their Report the Board would like tostate as under;

a) In respect of contingency related to "compensation payable in lieu of banksacrifice" the outcome of which is materially uncertain and cannot be determinedcurrently. Due to non disbursement of credit facilities the Company had sufferedoperational losses as well as capital losses. Therefore the Company has presented beforethe Adjudicating Authority counter claim & claim of set off against the banks.

b) In respect of contingency related to export incentives obligation refundable inrespect of allowance for foreign trade receivable the amount of such obligation cannot bedetermined currently.

c) With reference to contingency related to Income Tax Demands raised by the Income TaxAuthorities the Company has filed the appeals against these additions before appropriateauthorities and the Company is hopeful that it will get relief in appeal. Considering thefacts of the matters no provision is considered necessary by management with noadditional tax liability.

d) With reference to the Auditors remarks regarding Non confirmation of debit/creditbalances the same were not confirmed by the respective parties despite the letters/mailsin this regard been sent to them. However the management does not expect any materialchanges on account of such reconciliation/non-receipt of confirmation from parties

e) With reference to allowance in respect of Trade Receivable and impairment loss inrespect of long outstanding Capital/Trade advances the Company has duly complied with theapplicable Accounting Standards in this regard. However the management is of the viewthat the said receivables and outstanding Capital/Advances are fullyrecoverable/adjustable.

f) With reference to uncertainty regarding contracts yet to be executed escalationcosts etc. being a technical matter it is not possible to comment on the total contingentcapital commitment amount as the same cannot be measured with sufficient reliability.

Further with reference to material Uncertainty Related to going concern the Lenderswith the approval of CDR EG shall have the right to recompense thereliefs/sacrifices/waivers extended by respective CDR lenders as per the CDR guidelines.The recompense payable is contingent on various factors including improved performance ofthe Company and many other conditions the outcome of which is currently materiallyuncertain.

However the credit facilities envisaged and sanctioned under CDR package were notreleased by the lenders to the Company which resulted in sub-optimum utilization ofmanufacturing facilities. Due to non-disbursement of funds the Company could not completeone of its spinning projects where substantial amount was already incurred. All this hasled to adverse financial performance and erosion in net worth of the Company. Also thecompany has been facing cash flow mismatch and is not able to serve debt obligations asper the terms of CDR package sanctioned earlier.

Since the Company was finding it difficult to serve its debt obligations the Companyhas requested its lenders for a second/deep restructuring of its debts. Considering thestate of art manufacturing facilities of the Company most modernized technology skilledlabor force professional management and inherent viability of the Company the lendershad in-principle agreed for second/deep restructuring of the debts. Pending discussionswith the lenders State Bank of India in its capacity as financial creditor has filed apetition on 12th October 2017 under "Insolvency and Bankruptcy Code 2016"(IBC) with Hon'ble National Company Law Tribunal Chandigarh Bench (NCLT). On 11th April2018 the NCLT vide it's order of even date admitted the said petition and CorporateInsolvency Resolution Process (CIRP) has been initiated. Mr. Navneet Kumar Gupta havingRegistration No.IBBI/IPA-001/IP-P00001/2016-17/10009 was appointed as Interim ResolutionProfessional (IRP) vide order dt. 25th April 2018 and the affairs business and assetsare being managed by the Interim Resolution Professional (IRP).The Company has preferredan appeal against the admission of petition and appointment of IRP with National CompanyLaw Appellate Tribunal (NCLAT).

The Corporate Insolvency Resolution Process (CIRP) has since been kept in abeyance videorder dt. 22nd June 2018 of Hon'ble High Court of Punjab & Haryana. Accordingly theCompany has prepared these financial statements on the basis of going concern assumption.

Due to non disbursement of credit facilities the Company had suffered operationallosses as well as capital losses. Therefore the Company has presented before theAdjudicating Authority counter claim & claim of set off against the banks.

Further with reference to Changes in Accounting Estimates and Errors regardingdisclosure of restated opening balances of assets liabilities and equity for the earliestprior period presented the Company has adopted Ind AS 8 Accounting Policies Changes inAccounting Estimates and Errors during the Financial year 2017-18. due to which thefigures of previous F.Y. have been re-stated. Further with reference to quantitativedetails for certain items of fixed assets there are some category of assets of suchminute nature that it takes time to derive quantitative details of such kind of assets.

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. The Board appointed M/s. Jatin Sharma & Co.Cost Accountants as cost auditors of the Company for the financial year 2018-19 at a feeof INR 77000 plus applicable taxes and out of pocket expenses subject to the ratificationof the said fees by the shareholders at the ensuing annual general meeting. The cost auditreport for the financial year ended March 312018 would be filed with the CentralGovernment within prescribed timelines. The cost audit report for the financial year endedMarch 312017 was filed on 07.10.2017 (due date being 25.10.2017).

Number of Board Meetings held during the year:

The Board met 13 times during the financial year 2017-18 the details of which aregiven in corporate governance section.

Annual Evaluation made by the Board of its own performance and that of its Committeesand Individual Directors

The Board of Directors has evaluated the performance of the Board its Committees andthe Individual Directors as per the Nomination and Remuneration Policy. The Independentdirectors of the Company also review the performace of NonIndependent Directors and theBoard.

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. It controls therisks through properly defined framework.

POLICY ON DIRECTORS' APPOINTMENT & REMUNERATION

The Company strives to maintainan 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/regulations andother applicable regulations or guidelines. All the Board appointments are based onmeritocracy. The potential candidates for appointment to the Board are interalia evaluatedon the basis of highest level of personal and professional ethics standing integrityvalues and character; appreciation of the Company's vision mission values; prominence inbusiness institutions or professions; professional skill knowledge and expertise;financial literacy and such other competencies and skills as may be considered necessary.

In addition to the above the candidature of an independent Director is also evaluatedin terms of the criteria for determining independence as stipulated under Companies Act2013 listing agreement/regulations and other applicable regulations or guidelines. Incase of re-appointment of Independent Directors the Board shall take into considerationthe results of the performance evaluation of the Directors and their engagement level. TheBoard of Directors of the Company has adopted a Remuneration Policy for Directors KMPsand other employees. The policy represents the overarching approach of the Company to theremuneration of Director 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

State Bank of India in its capacity as financial creditor had filed a petition on 12thOctober 2017 under "Insolvency and Bankruptcy Code 2016" (IBC) with Hon'bleNational Company Law Tribunal Chandigarh Bench (NCLT). On 11th April 2018 the NCLT videit's order of even date admitted the said petition and Corporate Insolvency ResolutionProcess (CIRP) has been initiated. Mr. Navneet Kumar Gupta having RegistrationNo.IBBI/IPA-001/IP-P00001/2016-17/10009 was appointed as Interim Resolution Professional(IRP) vide order dt. 25th April 2018 and the affairs business and assets are beingmanaged by the Interim Resolution Professional (IRP). The Hon'ble High Court of Punjab& Haryana vide order dated 01.05.2018 had directed that the Interim ResolutionProfessional (IRP) appointed by the Adjudicating Authority i.e. Hon'ble National CompanyLaw Tribunal (NCLT) Chandigarh Bench shall not take over management of the Company i.e.SEL Manufacturing Company Ltd. till 15.05.2018. Further the Hon'ble Supreme Court of IndiaVide order dated 11.05.2018 had extended the order dated 01.05.2018 passed by the Hon'bleHigh Court of Punjab & Haryana for another one week.

The Company has preferred an appeal against the admission of petition and appointmentof IRP with National Company Law Appellate Tribunal (NCLAT). Further the CorporateInsolvency Resolution Process (CIRP) has since been kept in abeyance vide order dt. 22ndJune 2018 of Hon'ble High Court of Punjab & Haryana. Accordingly the Company hasprepared financial statements on the basis of going concern assumption.

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 and State of Company's Affairsas stated earlier no material changes and commitments affecting the financial positionof the Company have occurred after the end of the financial year 2017-18 and till the dateof 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 Companyalways endeavors to create and provide an environment that is free from discrimination andharassment including sexual harassment. The Company believes in prevention of harassmentof employees as well as contractors. During the year ended 31 March 2018 no complaintspertaining to sexual harassment were received.

RELEVANT EXTRACT OF THE ANNUAL RETURN

Relevant extract of annual return for the financial year 201718 under the CompaniesAct 2013 is given in Annexure V to this report

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company appointedM/s P. Sharma & Co. Company Secretaries in practice to undertake the SecretarialAudit of the Company. The report of the Secretarial Audit is annexed to this report asAnnexure VI.

With reference to Secretarial Auditors comments regarding non appointment/replacementof new Independent Director(s) within the prescribed time in place of IndependentDirector(s) who have resigned from the Board of the Company during the year and alsoregarding not having alteast Half of the Board of Independent Directors as per therequirements under the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the management has to state that the Company is looking for appointment ofIndependent Director to be appointed on the Board to fill the vacancy caused by theresignation of earlier Independent Director(s) from the Board of the Company. The Companyin the current financial position is finding it difficult as person(s) are not showinginterest to be appointed as Independent Director on the Board of the Company. Further asper SEBI (LODR) Third Amendment Regulations 2018 the provisions as specified inRegulation 17 etc. of the SEBI (LODR) Regulations shall not be applicable during theinsolvency resolution process period in respect of a listed entity which is undergoingcorporate insolvency resolution process under the Insolvency code.

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

RELATED PARTY TRANSACTIONS

The Board has adopted a policy to regulate the transactions of the Company with itsrelated parties. As per policy all related party transactions require approval as per theprovisions of the companies Act 2013 and listing Agreement entered into with StockExchanges/SEBI (LODR) Regulations. The said policy is available on the Company's websiteviz. 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 web si te vi z.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 for reporting concerns if any. Thedetails of establishment of vigil mechanism for Directors & employees to reportgenuine 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 theCompany are also informed of the important developments in the Company and Industry.Directors are fully briefed on all business related matters and new initiatives proposedby the Company and updated on changes and developments in the domestic & globalcorporate and industry scenario. The details of the familiarisation program for Directorsis available on the website of the Company viz. www.selindia.in/policy.html

CHANGES IN CAPITAL STRUCTURE

During the year there was no change in the Capital Structure of 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. Ashwani Kumar Mr. Ranjan Madaan Mrs. Paramjit Kaur andMr. Navneet Gupta. Sh. Ashwani Kumar is the chairman of the said committee.

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 2018 and of theprofit/loss of the Company for the year ended on 31st March 2018;

" 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

The Company has adopted Corporate Social Responsibility initiatives and focuses on keyareas as education healthcare etc. in accordance with the provisions of the relative Actand rules made thereunder.

The Corporate Social Responsibility Committee consists of Sh. Ranjan Madaan (Chairman)Smt. Paramjit Kaur and Sh. Ram Saran Saluja. The Board of Directors on recommendation ofthe CSR Committee has formulated the CSR policy of the Company. The CSR activities of theCompany are implemented in accordance with the core values viz. protecting stakeholderinterests proactive engagement with the local communities and striving towards inclusivedevelopment. The CSR activities are focused on the following five broad themes with goalsto improve overall socio economic indicators of Company's area of operation:

• Promoting healthcare sanitation and making safe drinking water available;

• Employment enhancement through training and vocational skill development;

• Income enhancement through farm based and other livelihood opportunities;

• Promoting education and sports; and

• Ensuring sustainable environment.

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 (RAM SARAN SALUJA)
DATED : 05.07.2018 CHAIRMAN
DIN: 01145051