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EQUITY - MARKET SCREENER

SEL Manufacturing Company Ltd
Industry :  Textiles - Cotton/Blended
BSE Code
ISIN Demat
Book Value()
532886
INE105I01020
97.2837237
NSE Symbol
P/E(TTM)
Mar.Cap( Cr.)
SELMC
0
3346.77
EPS(TTM)
Face Value()
Div & Yield %
0
10
0
 

As on: May 26, 2022 01:23 PM

To

The Members

SEL Manufacturing Company Ltd.

The Directors hereby present the 21st Annual Report on the affairs of the company together with Audited Financial Statements for the financial year ended 31st March, 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 to which these report/annexures primarily pertains. During the CIRP Process (i.e. between 11th April, 2018 and 12th March, 2021), Resolution Professional (RP) was entrusted with and responsible for the management of the affairs of the Company. The Reconstituted Board is submitting these reports/annexures in compliance with the Act and other Regulations and the Directors, as on date, are not to be considered responsible to discharge fiduciary duties with respect to the oversight on financial and operational health of the Company and performance of the management for the period prior to the acquisition.

BUSINESS:

The Company is vertically integrated multi-product textile company, manufacturing various kinds of Knitted Garments, Terry Towels, Knitted & Processed Fabric and various 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 deducting Expenses there was loss of Rs. 24842.90 lacs as compared to loss of Rs. 9351.94 lacs during 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. After providing for other adjustments/comprehensive income, the current year Profit/Income stood at 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 Tribunal, Chandigarh Bench ("NCLT") by State Bank of India against SEL Manufacturing Company Limited ("Corporate Debtor"), under Section 7 of the Insolvency and Bankruptcy Code, 2016 read with the rules and regulations framed thereunder, as amended from time to time ("Code"), the NCLT vide its order ("Admission Order") dated April 11, 2018 ("Insolvency Commencement Date") had admitted the application for the initiation of the corporate 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 the Corporate Debtor ("IRP").

Subsequently, on a writ petition filed by the Corporate Debtor and the managing director of the Corporate Debtor against the Admission Order, the Hon'ble High Court of Punjab and Haryana ("High Court") vide its order dated May 01, 2018, while disallowing the writ petition, kept the CIRP of the Corporate Debtor in abeyance and ordered that the IRP not take over the management of the Corporate Debtor till May 15, 2018 ("First Abeyance Order"). Pursuant to the First Abeyance Order, the existing management of the Corporate Debtor continued to manage the affairs of the Corporate Debtor during the period of abeyance. Against the First Abeyance Order, a special leave petition was filed before the Hon'ble Supreme Court, which, while dismissing the said special leave petition, vide its order dated May 12, 2018, extended the abeyance of the CIRP by another week, during which period the existing management retained control over the management of the Corporate Debtor. Accordingly, upon the lapse of the period of abeyance, as stipulated by the Hon'ble Supreme Court, the CIRP of the Corporate Debtor resumed on May 21, 2018 and Mr. Navneet Kumar Gupta, resumed his position and duties as the 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 held on June 15, 2018 wherein inter alia the IRP was confirmed as the resolution professional of the Corporate Debtor ("Resolution Professional").

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

As such on and from the Publication Date, the Resolution Professional had again assumed control over the management of the affairs of the Corporate Debtor and the powers of the board 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 and Bankruptcy Code, 2016 read with the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016. Upon re-initiation of CIRP, the management of the Company was handed over from the existing board of directors to the resolution professional appointed by the Hon'ble NCLT.

Further the Hon'ble National Company Law Tribunal, Chandigarh Bench on February 10, 2021 approved the Resolution plan submitted by Consortium of Arr Ess Industries Private Limited and Leading Edge Commercial FZE ("Consortium" or "Resolution Applicant") in respect of SEL Manufacturing Company Limited ("Company") and the Monitoring Committee ("MC") of the Company (constituted in terms of the Resolution Plan) in its meeting held on March 13, 2021 duly appointed the nominees of the Resolution Applicant as Directors of the Company and approved the reconstitution of the Board of Directors of the Company ("Reconstituted Board").

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

i) The existing directors of the Company as on the date of order have stand replaced by the new Board of Directors from their office with effect from 13 th March, 2021.

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

iii) With effect from 13th March, 2021, the existing issued, subscribed and paid up equity share capital of the Company has been reduced from Rs. 33,134.70 lakhs divided into 331,347,000 equity shares of Rs. 10 each to Rs. 33.13 lakhs divided into 3,31,347 equity share of Rs. 10 each thereby reducing the value of issued, subscribed and paid up equity share capital of the Company by Rs. 33,101.57 lakhs. Further, with effect from 13th March, 2021, the existing issued, subscribed, paid up 69,710,000, 1% Redeemable, Non Cumulative, Non Convertible Preference Shares of Rs. 10 each stand fully cancelled and extinguished. As prescribed in the Resolution Plan, the reduction in the share capital of the Company amounting to Rs. 33,101.57 lakhs is adjusted against the debit balance as appearing in its profit and loss account (i.e. retained earnings). As per the approved Resolution Plan, 32,803,353 equity shares (new) were allotted in favour of financial creditors and resolution applicant.

iv) Transfer of Subsidiary Company M/s SEL Textiles Limited: As a part of the Resolution Plan, the Parent Company has transferred its identified subsidiary to the trust alongwith 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 Unlisted Non-Marketable Secured/Unsecured Non-Convertible Redeemable Debentures (i.e. 3,19,80,898 Debentures of Rs.100/- each) amounting Rs. 319,80,89,800.00 to the Financial Creditors and Resolution 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 Aviation Pvt. Ltd..

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

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

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

Consolidated Financial Statements:

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

CORPORATE GOVERNANCE:

Your Company is committed to adhere to the best Practices of governance. In your Company, prime importance is given to reliable financial information, integrity, transparency, fairness, empowerment & compliances. A separate section on Corporate Governance and a Certificate regarding compliance of conditions of Corporate Governance, forms 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 Rights, Employee Stock Options and/or Sweat Equity Shares.

FIXED DEPOSITS:

During the year, your Company has not accepted any fixed deposits under the provisions of 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 and Bankruptcy Code, 2016 read with the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016. Upon re-initiation of CIRP, the management of the Company was handed over from the existing board of directors to the resolution professional appointed by the Hon'ble NCLT.

Upon approval of the Resolution Plan, the existing directors of the Company as on the date of order have stand replaced by the new Board of Directors from their office with effect 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. Rajiv Kumar 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 Time Director of the Company respectively.

As new Board was formed w.e.f. 13.03.2021 respectively, confirmation for appointment of Directors is proposed for approval in the ensuing Annual General Meeting. Further appointment of Independent directors by Special resolution is also proposed for approval in the ensuing Annual General Meeting. Further, the appointment/remuneration of Mr. Rajeev Bhalla as Managing Director and Mr. Naveen Arora, as Whole time Director of the Company respectively for a period of 3 years is put for confirmation by the members of the Company in the ensuing Annual General Meeting. Details of appointment and terms are given in detail 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 Exchange Limited (BSE) and The National Stock Exchange of India Ltd. (NSE). Further the Company has paid 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, 32,803,353 New Equity shares of the face value of Rs. 10/- each were allotted in favour of financial creditors and resolution applicant (SPV).

Further pursuant to the approved resolution plan by NCLT, the Company has issued Unlisted Non-Marketable Secured/Unsecured Non-Convertible Redeemable Debentures (i.e. 3,19,80,898 Debentures of Rs.100/- each) amounting Rs. 319,80,89,800.00 to the Financial Creditors 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 for any 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 (Cost Records and Audit) Rules, 2014, the Company is required to maintain cost accounting records and get them audited every year and accordingly such accounts and records are made and maintained. The Board appointed M/s. Jatin Sharma & Co., Cost Accountants, as cost auditors of the Company for the financial year 2021-22 at a fee of INR 77,000 plus applicable taxes and out of pocket expenses subject to the ratification of the said fees by the shareholders at the ensuing annual general meeting. The cost audit report for the financial 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 was formed. The Board met 4 times during the financial year 2020-21, the details of which are given in corporate governance section.

Annual Evaluation of the performance of the Board, its Committees and of Individual Directors:

The Company was undergoing Corporate Insolvency Resolution Process ("CIRP") in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016 read with the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016. Upon approval 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 Companies Act, 2013:

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

Development and implementation of a Risk Management Policy:

The main objective of Risk Management is risk reduction and avoidance as also identification of the risks faced by the business and optimize the risk management strategies. The Company has put in place a well-defined Risk Management framework for drawing up, implementing, monitoring and reviewing the Risk Management.

POLICY ON DIRECTORS' APPOINTMENT & REMUNERATION

The Company strives to maintain an appropriate combination of executive, non-executive and independent Directors including at least one woman Director. The Nomination & Remuneration Committee of the Company leads the process for Board appointments in accordance with the requirements of Companies Act, 2013, listing agreement and other applicable regulations or guidelines. All the Board appointments are based on meritocracy. The potential candidates for appointment to the Board are interalia evaluated on the basis of highest level of personal and professional ethics, standing, integrity, values and character; appreciation of the Company's vision, mission, values; prominence in business, 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 evaluated in terms of the criteria for determining independence as stipulated under Companies Act, 2013, listing agreement and other applicable regulations or guidelines. In case of reappointment of Independent Directors, the Board shall take into consideration the results of the performance evaluation of the Directors and their engagement level. There is 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 or persons 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 Tribunal, Chandigarh Bench ("NCLT") by State Bank of India against SEL Manufacturing Company Limited ("Corporate Debtor"), under Section 7 of the Insolvency and Bankruptcy Code, 2016 read with the rules and regulations framed thereunder, as amended from time to time ("Code"), the NCLT vide its order ("Admission Order") dated April 11, 2018 ("Insolvency Commencement Date") had admitted the application for the initiation of the corporate 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 the Corporate Debtor ("IRP").

Subsequently, on a writ petition filed by the Corporate Debtor and the managing director of the Corporate Debtor against the Admission Order, the Hon'ble High Court of Punjab and Haryana ("High Court") vide its order dated May 01, 2018, while disallowing the writ petition, kept the CIRP of the Corporate Debtor in abeyance and ordered that the IRP not take over the management of the Corporate Debtor till May 15, 2018 ("First Abeyance Order"). Pursuant to the First Abeyance Order, the existing management of the Corporate Debtor continued to manage the affairs of the Corporate Debtor during the period of abeyance. Against the First Abeyance Order, a special leave petition was filed before the Hon'ble Supreme Court, which, while dismissing the said special leave petition, vide its order dated May 12, 2018, extended the abeyance of the CIRP by another week, during which period the existing management retained control over the management of the Corporate Debtor. Accordingly, upon the lapse of the period of abeyance, as stipulated by the Hon'ble Supreme Court, the CIRP of the Corporate Debtor resumed on May 21, 2018 and Mr. Navneet Kumar Gupta, resumed his position and duties as the 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 held on June 15, 2018 wherein inter alia the IRP was confirmed as the resolution professional of the Corporate Debtor ("Resolution Professional").

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

As such on and from the Publication Date, the Resolution Professional had again assumed control over the management of the affairs of the Corporate Debtor and the powers of the board of directors of the Corporate Debtor.

Further the Hon'ble National Company Law Tribunal, Chandigarh Bench on February 10, 2021 approved the Resolution plan submitted by Consortium of Arr Ess Industries Private Limited and Leading Edge Commercial FZE ("Consortium" or "Resolution Applicant") in respect of SEL Manufacturing Company Limited ("Company") and the Monitoring Committee ("MC") of the Company (constituted in terms of the Resolution Plan) in its meeting held on March 13, 2021 duly appointed the nominees of the Resolution Applicant as Directors of the Company and approved the reconstitution of the Board of Directors of the Company ("Reconstituted Board"). The Reconstituted Board has just been formed on March 13, 2021 and is in process to regularise all the issues at the earliest.

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

MATERIAL CHANGES & COMMITMENTS

Apart from the Orders of NCLT and other Court(s) Orders, completion of CIRP process under IBC, and State of Company's Affairs as stated earlier, no material changes and commitments, affecting the financial position of the Company have occurred after the end of 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 for every individual working in SEL through various interventions and practices. The

Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment. The Company believes in prevention of harassment of employees as well as contractors. During the year ended 31 March, 2021, no complaints pertaining to sexual harassment were received.

RELEVANT EXTRACT OF THE ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT-9, as required under 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 of the Board of Independent Directors as per the requirements under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as per SEBI (LODR) Third Amendment Regulations, 2018 the provisions as specified in Regulation 17 etc. of the SEBI(LODR) Regulations, shall not be applicable during the insolvency resolution process period in respect of a listed entity which is undergoing corporate insolvency resolution process under the Insolvency code. Further upon approval of the Resolution plan pursuant to CIRP, new Board of Directors was formed on 13.03.2021.

With reference to other comments regarding Non-submission of Financial Results in time under Regulation 33 (3) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 for quarter/financial year ended 31.03.2020, quarter ended 30.06.2020, quarter/half year ended 30.09.2020, quarter/nine months 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, the Company was under CIRP process during that period and the Exchanges were informed in respect of interalia the insolvency commencement date, the appointment of the RP etc. and the Resolution Professional (RP) was entrusted with and responsible for the management of the affairs of the Company.

Further the "Secretarial Auditors" report is self explanatory and therefore does 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 of the Companies Act, 2013 and SEBI (LODR) Regulations. The said policy is available on the Company'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 this report in the prescribed form.

VIGIL MECHANISM

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

Individuals can also raise their concerns directly to the chairman of the Audit Committee of the Company. Any allegations that fall within the scope of the concerns identified are investigated and dealt with appropriately. Further, during the year, no individual was denied access to the Audit Committee/relevant authority for reporting concerns, 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 Company has put in place an adequate system of internal financial control commensurate with its size and nature of business which helps in ensuring the orderly and efficient conduct of its business. These systems provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes, safeguarding of assets of the Company, prevention & detection of frauds, accuracy & completeness of 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 and Independent directors and provides materials and briefing sessions periodically which assists them in discharging their duties and responsibilities.

The Directors of the Company are also informed of the important developments in the Company and Industry. Directors are fully briefed on all business related matters, and new initiatives proposed by the Company and updated on changes and developments in the domestic & global corporate and industry scenario. The details of the familiarisation program 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 March, 2021, the existing issued, subscribed and paid up equity share capital of the Company has been reduced from Rs. 33,134.70 lakhs divided into 331,347,000 equity shares of Rs. 10 each to Rs. 33.13 lakhs divided into 3,31,347 equity share of Rs. 10 each thereby reducing the value of issued, subscribed and paid up equity share capital of the Company by Rs. 33,101.57 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 the implementation of the Approved Resolution Plan and had the powers of the Board of Directors of the Company) in their meeting held on February 26, 2021 had fixed the Record Date i.e. Wednesday, March 10, 2021 for the purpose of determining the equity shareholders of Sel Manufacturing Company Ltd. to whom fully paid-up equity shares will be allotted by the 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 Equity Shares 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, subscribed, paid up 69,710,000, 1% Redeemable, Non Cumulative, Non Convertible Preference Shares of Rs. 10 each stand fully cancelled and extinguished. As prescribed in the Resolution Plan, the reduction in the share capital of the Company amounting to Rs. 33,101.57 lakhs is adjusted against the debit balance as appearing in its profit and loss account (i.e. retained earnings).

Further, as per the approved Resolution Plan, 32,803,353 Equity shares (new) of the face value of Rs.10/- each were allotted in favour of Financial Creditors and Resolution Applicant (SPV).

Further pursuant to the approved resolution plan by NCLT, the Company has issued Unlisted Non-Marketable Secured/Unsecured Non-Convertible Redeemable Debentures (i.e. 3,19,80,898 Debentures of Rs.100/- each) amounting Rs. 319,80,89,800.00 to the Financial Creditors and Resolution Applicant (SPV) for the Company.

AUDIT COMMITTEE:

The Board has constituted its Audit Committee pursuant to the provisions of Section 177 of the Companies Act, 2013 and provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Audit Committee of the Company presently comprises of the following members namely Mr. Sushil Kumar, Mr. Rajiv Kumar Maheshwary, Mr. Dinesh Kumar Mehtani and Ms. Nidhi Aggarwal. Mr. Sushil 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 exchange earnings 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 and Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees are set out in the Annexure-II to this report and forms part of this report.

DIRECTORS' RESPONSIBILITY STATEMENT:

The Directors would like to assure the Members that the financial statements for the year under review conform in their entirety to the requirements of the Companies Act, 2013.

The Directors confirm that:

• In the preparation of the annual accounts/financial statements, the applicable accounting standards have been followed along with proper explanation relating to material departures;

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

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

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

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

• Proper systems had been devised to ensure compliance with the provisions of all applicable 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 Financial Statements for the F.Y. 2019-20, The Company has formed the Corporate Social Responsibility Committee, which consists of Sh. Rajeev Bhalla, (Chairman), Mr. Sushil Kumar 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 the website of the Company viz. www.selindia.in/policy.html

ACKNOWLEDGEMENTS:

Your Directors express their gratitude to the Company's vendors, customers, Banks, Financial Institutions, Shareholders & society at large for their understanding and support. Finally, your Directors acknowledge the dedicated services rendered by all employees 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