Salem Erode Investments Ltd Directors Report.

To,

The Members,

Your Directors have pleasure in presenting their 88 Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2019.

1. FINANCIAL SUMMARY OR HIGHLIGHTS / PERFORMANCE OF THE COMPANY

Your Board is pleased to present the highlights of the standalone financial statement of your company for the financial year 2018-19 and 2017–18 as under:

Particulars 2018 - 19 2017 - 18
Profit Before Interest and Depreciation 68,155,741 1,12,11,572
Less: Depreciation & Amortization 160,436 5,57,505
Less: Finance Cost Nil Nil
Profit Before Tax 67,995,305 10,654,067
Provision for Tax 6,980,542 23,08,381
Profit After Tax 61,014,763 83,45,686
Amount Transferred to Reserves 12,202,953 16,69,137
Transfer to contingent provisions against Standard Assets Nil Nil
Balance as per last Balance sheet 119,147,986 11,24,83,307
Surplus carried to Balance Sheet 168,102,954 119,147,986

1. BRIEF DESCRIPTION OF THE COMPANYS WORKING DURING THE YEAR / STATE OF COMPANYS AFFAIR

The profit of the company (PAT) for the year under review is Rs. 61,014,763/- as against profit of Rs 8,345,686/- in the previous year. This increase in the profit of the company is due to sale of Investments which is non-recurring in nature.

2. CHANGE IN THE NATURE OF BUSINESS, IF ANY

Your Directors are please to inform you that there was no change in the nature of business of your Company during the Financial Year under review.

3. DIVIDEND

Your Directors in its Board meeting held on 27th May, 2019 decided and declare to plough back the profits for the year under review and therefore does not recommend any dividend for the year under review.

4. RESERVES

Your company has not transferred any amount to the reserves of the company except to the statutory reserve amounting to Rs. 12,202,953/- this is pursuant to provisions of section 41IC of Reserve Bank India (RBI) Act.

6. CHANGE OF NAME

Yourss company name is SALEM ERODE INVESTMENTS LIMITED and there is no change in its name during the year under review.

7. SHARE CAPITAL

Your Directors further ensures that during the year under review your company has not bought back any of its securities or issued any Sweat Equity Shares or issued any Bonus Shares or provided any Stock Option Scheme to the employees

9. DIRECTORS AND KEY MANAGERIAL PERSONNEL

a) Retire by Rotation:

Mr. Sunil Kumar Kanoria (DIN 00789030), who retire by rotation at the ensuing general meeting pursuant to section 152 of the Companies Act, 2013 and being eligible offer himself for re-appointment. Your Director recommends his re-appointment. The details are given in Annexure I forming part of the Board Report.

b) Appointment and Resignation of Directors and Key Managerial Persons

There has been one resignation of the director during the financial year under review. However, there has been a change in the Compliance Officer of the Company vide their resignation details of which is given herein below:

Ms. Dolly Prasad resigned from the Company vide her resignation letter dated 03.08.2018. The reason for her resignation is her professional engagement elsewhere due to which she was unable to devote her time towards the affairs of the company. The Board of directors of your company appreciates the services rendered by her and released her from all her responsibilities from the date of her resignation. Mr. Himanshu Maheshwari was appointed as the new Compliance Officer of the Company w.e.f. 31.08.2018 and resigned vide his resignation letter 22.04.2019. The reason for his resignation is his professional engagement elsewhere due to which he was unable to devote his time towards the affairs of the company. The Board of directors of your company appreciates the services rendered by his and released his from all his responsibilities from the date of his resignation. The details are given in Annexure I forming part of the Board Report.

Ms. Bela Parakh was appointed as a new company secretary and Compliance Officer of the Company w.e.f. 26.04.2019 an continues till date. The details are given in Annexure I forming part of the Board Report. Vishal Gupta (DIN 07720208) cease to be director of your company vide his resignation letter dated 25.04.2018. The reason for his resignation is his professional engagement elsewhere due to which he was unable to devote his time towards the affairs of the company. The Board of directors of your company appreciates the services rendered by him and released him from all his responsibilities from the date of his resignation.

10 DECLARATION BY INDEPENDENT DIRECTOR

Your Company has received declaration from all the Independent Directors of the company, pursuant to the provisions of Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of Independence as laid down under section 149(6) of the Companies Act, 2013.

11 PARTICULARS OF EMPLOYEES

Your Directors ensures that none of the employees of your company is in receipt of salary and / or remuneration in excess of the threshold limit, pursuant to the provisions of Rule 2 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Further details are given in Annexure II forming part of the Board Report.

12 MEETINGS

• BOARD MEETINGS

A calendar of Meetings is prepared and circulated in advance to the Directors. During the Financial Year 2018-19 six (6) Board Meetings were held, the dates of the meeting being 27.04.2018, 25.05.2018, 03.08.2018, 31.08.2018, 09.11.2018, and 08.02.2019. The intervening gap between any two meetings held during the year was not more than one hundred and twenty days.

AUDIT COMMITTEE MEETING

A calendar of Audit Committee Meetings is prepared and circulated in advance to the Members of the Committee. During the Financial Year 2018-19 five (5) meeting of the Committee was held, the date of the meetings was 27.04.2018, 25.05.2018, 03.08.2018, 09.11.2018, and 08.02.2019.

NOMINATION AND REMUNERATION COMMITTEE MEETING

A calendar of Nomination and Remuneration Committee Meeting is prepared and circulated in advance to the Members of the Committee. During the Financial Year 2018 – 19 one (1) meeting of the Committee was held, the date of the meeting was 31.08.2018.

SHAREHOLDERS GREVIANCE COMMITTEE MEETING

A calendar of Shareholders Grievance Committee Meeting is prepared and circulated in advance to the Members of the Committee. During the Financial Year 2018 – 19 five (5) meeting of the Committee was held, the date of the meeting was 11.04.2018, 13.07.2018, 20.10.2018,14.01.2019 and 11.02.2019.

CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE MEETING

A calendar of Shareholders Grievance Committee Meeting is prepared and circulated in advance to the Members of the Committee. During the Financial Year 2018 – 19 four (4) meeting of the Committee was held, the date of the meeting was 25.05.2018, 03.08.2018, 09.11.2018 and 08.02.2019.

13 COMPOSITION OF BOARD OF DIRECTORS AND COMMITEES

• BOARD OF DIRECTORS

The Board of the company is headed by the Mr. Vishwa Nath Purohit, Independent Director, an eminent person of high credentials and of considerable professional experience who actively contributed in the deliberation of the Board. As on close of business hours of March 31, 2019 the Board comprised of six directors as mentioned below:

Sl. No Name DIN Category Designation
1 Ashok Kumar Hamirbasia 00291954 Executive Managing Director
2 Vishwa Nath Purohit 00291853 Independent Non-Executive Director
3 Prashant Gupta 06915283 Independent Non-Executive Director
4 Sunil Kumar Kanoria 00789030 Non – Independent Non-Executive Director
5 Ekta Goswami 07412983 Independent Non-Executive Woman director
6 H V Bhardwaj 02819677 Independent Non-Executive Director

AUDIT COMMITTEE

The chairman of the Audit Committee of the Company constituted under Section 177 of the Companies Act, 2013 by the Board is headed by the Mr. Vishwa Nath Purohit, Independent Director of the company. He is an eminent person of high credentials and of considerable professional experience. As on close of business hours of March 31, 2019 the Board of Audit Committee comprised of three directors as mentioned below

S. No Name DIN No Designation
1. Vishwa Nath Purohit 00291853 Independent Director, Chairman
2. Prashant Gupta 06915283 Independent Director, Member
3. H V Bhardwaj 02819677 Independent Director, Member

NOMINATION AND REMUNERATION COMMITTEE

The chairman of the Nomination and Remuneration Committee of the Company constituted under Section 178 of the Companies Act, 2013 by the Board is headed by the Mr. Vishwa Nath Purohit, Independent Director of the company. He is an eminent person of high credentials and of considerable professional experience. As on close of business hours of March 31, 2019 the Board of Nominated and Remunerated comprised of three directors as mentioned below

S. N Name DIN No Designation
1. Vishwa Nath Purohit 00291853 Independent Director, Chairman
2. Prashant Gupta 06915283 Independent Director, Member
3 Ekta Goswami 07412983 Independent Director, Woman Director

SHAREHOLDERS GRIEVANCE COMMITTEE

This committee was headed by the Mr. Vishwa Nath Purohit, Independent Director of the company. He is an eminent person of high credentials and of considerable professional experience. As on close of business hours of March 31, 2019 the Board of Shareholders Grievance Committee comprised of three directors as mentioned below.

S no Name DIN No Designation
1. Vishwa Nath Purohit 00291853 Independent Director, Chairman
2. Prashant Gupta 06915283 Independent Director, Member
3. H V Bhardwaj 02819677 Independent Director, Member

CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE

This committee was headed by the Mr. Vishwa Nath Purohit, Independent Director of the company. He is an eminent person of high credentials and of considerable professional experience. As on close of business hours of March 31, 2019 the Board of CSR Committee comprised of three directors as mentioned below.

S no Name DIN No Designation
1. Vishwa Nath Purohit 00291853 Independent Director, Chairman
2. Prashant Gupta 06915283 Independent Director, Member
3 Ekta Goswami 07412983 Independent Director, Woman Director

14 DETAILS OF SUBSIDIARY/JOINT VENTURES / ASSOCIATE COMPANIES

Pursuant to the provisions of section 129 of the Companies Act, 2013 and the rules framed thereunder, if any, the statement containing the salient feature of the financial statement of a companys subsidiary or subsidiaries, associate company or companies and joint venture or ventures as forming part of this report.

Your Director is please to inform you that as on the close of the 31 March, 2019 your company ensures that there is no subsidiary or subsidiaries, associate or associates and joint venture or ventures.

15 VIGIL MACHANISM AND WHISTLE BLOWER POLICY

Your directors are pleased to inform you that the company has adopted a vigil mechanism which comprises whistle blower policy for directors, employees, and vendors of the company. This policy provides a formal mechanism for directors employees and vendors to approach the chairman of Audit committee to report concerns about unethical, actual or suspected fraud or violation of company code of conduct and thereby ensuring that activities of the company are conducted in a fair and transparent manner. The policy is also available at the company website.

16 AUDITORS AND THEIR REPORT

M/s S. Mandal & Co., Chartered Accountants (FRN 314188E), was appointed as a statutory auditor of the company at the 85th Annual General Meeting to hold office till the conclusion of the 88th Annual General Meeting, retire at this ensuing Annual General Meeting. Pursuant to the provisions of section 139 of Companies Act, 2013 and applicable Rule of the Companies (Audit & Auditors) Rules, 2014, if any, M/s S. Mandal & Co., Chartered Accountants being eligible for Re-appointment be and is hereby proposed for re-appointment as the auditor for a period of 5 (Five) Consecutive years from the conclusion of this Annual General Meeting till the conclusion of 93rd Annual General Meeting subject to ratification by the members at every Annual General Meeting. Accordingly, M/s S. Mandal & Co., is put in place for re-appointment as a statutory auditor of the company by the shareholders.

The Auditors Report does not contain any qualification, reservation or adverse remark. Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments.

17 SECRETARIAL AUDIT REPORT

Your Directors has appointed Mr. H. M CHORARIA, a practicing Company Secretary, as Secretarial Auditor pursuant to the provisions of section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Person) Rules, 2014, to undertake the secretarial audit of the company for the financial year 2018-19. The Secretarial Audit Report in form MR 3 is given as Annexure III forming part of this report.

The Board of Directors of your company in its meeting held on 22nd July, 2019 appointed Mr. H. M CHORARIA to undertake the secretarial audit of the company for the Financial year 2019 – 20.

The Secretarial Auditors Report for the financial year 2018-19 does not contain any qualification, or adverse remark subject to contain observation. Auditors remark in their report are self - explanatory and do not call for further comments.

18 INTERNAL AUDIT & CONTROLS

The Company continues to engage M/s. HAMIRBASIA & ASSOCIATES, Chartered Accountants (FRN 328744E) as its Internal Auditor. During the year, the Company continued to implement their suggestions and recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations.

The Board of Directors of your company in its meeting held on 22nd July, 2019 appointed HAMIRBASIA AND ASSOCIATES, CharteredAccountants to undertake the internal audit of the company for the Financial year 2019 – 20.

19 INTERNAL FINANCIAL CONTROL (IFC) SYSTEM AND ADEQUECY

The Board of Directors of the company is responsible for insuring the IFC have been laid down in the company and that such control is adequate and operating effectively. Your directors ensure final IFC framework has been laid down in your company and it is commensurate with the size scale and complex of its operation.

20 EXTRACT OF ANNUAL RETURN

Your company, pursuant to the provisions of section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, has given in Annexure IV an extract of Annual Return as forming part of this report. The extract of annual return is given in MGT 9.

21 MATERIAL CHANGES AND COMMITMENTS

Your Director ensures that no material changes occurred subsequent to the close of the financial year of the Company to which the balance sheet relates and the date of the report that affecting the financial position of the company.

22 SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

There were no significant and material orders passed by the Regulators or Courts or Tribunals during the year impacting the going concern status of the company and its future business and operations.

23 DEPOSITS

Your Company has not accepted any Deposits from public within the meaning section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposit) Rules, 2014 during the year under review.

24 DISCLOSURE OF SEXUAL HARESSMENT OF WOMEN AT WORK PLACE

In order to prevent sexual harassment of women at work place a new act "The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013" has been notified with effect from 9th December, 2013. As per section 4 read with section 6 of the act applies to companies having 10 employees or more and such companies shall be required to constitute internal complaint committee. Your Directors are pleased to inform you that as the number of employees in your company is below the threshold limit, hence, it is not required to constitute such committee.

Your directors are also pleased to inform you that there is no such case has been reported during the year under review.

25 PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

Pursuant to Section 186(11) of the Companies Act, 2013 read with Rule 11 of the Companies (Meeting and Power of the Board) Rules, 2014, except sub section 1, the provisions of section 186 does not apply to Non Banking Financial Company (NBFC) engaged in the business of Lending and Investment, hence, the provisions of section 186 except section 186(1) does not apply to NBFC. Your directors are also pleased to inform you that your company has not made any investment through more than two layers of investment companies during the year under review.

26 PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The particulars of every contract or arrangements entered into by the Company with related parties including certain arms length transactions thereto shall be disclosed in AOC 2. Your directors ensure that no such contract was entered by the company with the any such Related Party during the year under review.

27 CORPORATE GOVERNANCE

Pursuant to regulation 15 of chapter IV of SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015, regulation 17, 27 & other regulations under this statute relating to corporate governance is not applicable to your company and a declaration in this effect is submitted with the Stock Exchange at regular interval, however, your directors ensure good governance in the company.

28 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to the provisions of section 134 of the Companies Act, 2013 the details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

Conservation of energy NIL
Technology absorption NIL
Foreign exchange earnings and Outgoing NIL

29 HUMAN RESOURCES

Your Company treats its "Human Resources" as one of its most important assets. Your Company continuously invest in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement.

30 DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirms that: a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures b. They had selected such accounting policies and applied them consistently and 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 at the end of the financial year and of the profit and loss of the company for that period; c. They had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; d. They had prepared the annual accounts on a going concern basis; e. They had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

31 TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of the Investor Education Protection Fund (IEPF) and the rules framed thereunder, your directors ensure that amount of Rs. 41,622/- lying unpaid or unclaimed for a period of seven years since 2012 shall be deposited with the IEPF.

32 AMOUNT OF CSR SPEND

Your Directors ensure that amount of CSR for the financial years 2015 - 2016, 2016 - 2017 and 2017 - 2018 amounting to Rs. 99,635, 817,768 and 821,231respectively is spend by way of deposition into Prime Minister’s Relief Fund. Your Director further ensures that the amount of CSR for the financial year 2018-19 amounting to Rs.645,302 shall be deposited into the Prime-Minister Relief Fund.

33 ACKNOWLEDGEMENTS

Your Director would like to record its appreciation for the co – operation and support received from its employees, shareholders and all other stakeholders.

For and on behalf of the Board of Directors
Ashok Kumar Sunil Kumar Kanoria
Hamirbasia Director
M Director DIN : 0789030
DIN : 0291954
Place : Kolkata Arindam Saha Bela Parakh
Date : 22nd July, 2019 CFO Company Secretary

BRIEF PROFILE OF DIRECTORS AND KMP APPOINTED

1. Sunil Kumar Kanoria

Mr. Sunil Kumar Kanoria, aged 63 years, hold degree in commerce. He has an extensive and distinguishing experience in the field of operation, finance and reporting. During his long career of 35 years in the distinguishing areas he was responsible for policy framing, budgeting and other financial and administrative functions. Further in his such a long career he has closely witnessed and worked in interpreting and implications of de-regulations, re-regulations and progressive transformation of various policy framework and code of conducts.

At Present Mr. Sunil Kumar Kanoria holds the position of Non-Executive director of the company and does not hold any equity shares in the company.

2. Bela Parakh

Ms. Bela Parakh, aged 28 years, is a graduate in commerce with honours degree and also a qualified Company Secretary from Institute of Company Secretaries of India (ICSI). She has a good knowledge and experience of Company Law. She has command over the Secretarial Matters, Legal due diligence and SEBI matters and Stock exchange issues.

At Present Ms. Bela Parakh holds the position of Company secretary cum compliance officer of your Company. She is associated with your company since April 26, 2019.

3. Himanshu Maheshwari

Mr. Himanshu Maheshwari, aged 28 years, is a graduate in commerce with honours degree and also a qualified Company Secretary from Institute of Company Secretaries of India (ICSI). He also holds the degree in Law from F.M University, Odisha. He has a good knowledge and experience of Company Law and also has command over the Secretarial Matters, Legal due diligence and SEBI matters and Stock exchange issues.

Mr. Himanshu Maheshwari was appointed in your company as company secretary cum compliance officer with effect from August 31, 2018 and hold such position and resigned from this position as on 22nd April, 2019. He resigned due his career growth job opportunity in another company.

STATEMENT OF PARTICULARS OF EMPLOYEES

PURSUANT TO THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONAL) RULES, 2014

Sl. No. Name Designation/ Nature of Duties Remuneration Received (Rs.) Qualification Experience in years Age in years Date of commencement of Employment Last employment held
1 Ashok Kumar Hamirbasia Managing Director Rs. 9,21,800/- Commerce Graduate 40 Years 63 Years 27.01.2016 --
2 Arindam Saha Chief Financial Officer Rs. 3,52,400/- Commerce Graduate; and MBA in Finance from SMU 7 Years 29 Years 30.05.2017 --
3 Dolly Prasad Company Secretary cum Compliance Officer Rs. 50,000/- Commerce Graduate; and ACS (ICSI) 2 Years 26 Years 03.03.2018 03.08.2018
4 Himanshu Maheshwari Company Secretary cum Compliance Officer Rs. 70,000/- Commerce Graduate; Law Graduate; and ACS (ICSI) 3 Years 30 Years 31.08.2019 22.04.2019