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SEL Manufacturing Company Ltd.
Your Directors have pleasure in presenting their 16th Annual Report on the affairs of the company together with Audited Financial Statements for the financial year ended 31st March, 2016.
|FINANCIAL RESULTS||(Rupees in Lacs)|
|Current Year (2015-16)||Previous year (2014-15)|
|Revenue from Operations||194773.45||232578.47|
|Provision for Depreciation||28450.25||29327.22|
|Profit/(loss)before exceptional items and tax:||(25738.88)||(13313.30)|
|Profit/(Loss) before tax:||(55799.81)||(13313.30)|
|Taxes : Deferred Tax||(15604.21)||(4445.50)|
|Balance brought forward||(2381.82)||6871.50|
|Less: Transferred from General Reserve||23200.00|||
|Less: Carrying amount of fixed assets debited to retained earnings where rermaining useful life of assets is Nil as on 01.04.2014||-||187.84|
|Balance Carried over to Balance Sheet||(19377.28)||(2381.82)|
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 Ludhiana and NawanSheher in Punjab, Baddi in Himachal Pradesh and Sehore in Madhya Pradesh.
State of Companys affairs:
During the year under review, your company has achieved Revenue from Operations of Rs. 194773.45 lacs as compared to Rs. 232578.47 lacs in the previous year. After deducting Expenses and Exceptional Items there was Loss of Rs. 55799.81 lacs as compared to Loss of Rs. 13313.30 lacs during the previous year. After providing for taxes and other adjustments, the current year loss stood at Rs. 40195.46 lacs as compared to loss of Rs. 9065.48 lacs during the previous year.
As at 31.03.2016, the Company has the following Subsidiary Company(ies) namely SEL Aviation Pvt. Ltd., SEL Textiles Corporation, SEL Textiles Ltd., Silverline Corporation Ltd., and also a subsidiary firm namely M/s SE Exports. The Company has its branch office at United Arab Emirates.
The Annual Accounts of the Subsidiary companies/firms 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 of the subsidiary companies are kept for inspection by any shareholders in the head office i.e. the Registered Office of the holding company and of the 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. is engaged in the business of textiles and the Company has two spinning unit(s) one at Neemrana (Rajasthan) and one at Hansi, Hissar (Haryana) and a terry towel unit at Nawa Sheher 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 Silverline Corporation Ltd.. SEL Aviation Pvt. Ltd., subsidiary of the company is in the business of Aviation services. SEL Textiles Corporation is the wholly owned subsidiary of the Company in the state of California, USA. 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 (AS) 21, are attached to and form part of the Annual Report.
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
Due to the losses incurred in F.Y. 2015-16 and in order to conserve resources for future growth/needs, the directors have not recommended any dividend for the Financial year 2015-16.
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.
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.
DIRECTORS & KMP:
Mr. Joginder Kumar Gupta was appointed as a Nominee Director on the Board w.e.f 18.03.2016. Further, the reappointment of Mr. Vinod Kumar Goyal, as Executive Director and Mr. Dhiraj Saluja, as Jt. Managing Director of the Company for a further period of 3 years is put for confirmation by the members of the Company in the ensuing Annual General Meeting. Further Mr. Dhiraj Saluja, Director of the
Company retires by rotation at this Annual General Meeting and being eligible offer himself for re-appointment.
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 2016-17. The GDRs of the company are listed on Luxembourg Stock Exchange.
M/s Dass Khanna & Co., Chartered Accountants, Ludhiana, the Statutory Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for reappointment.
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 by the Auditors.
Further, regarding Auditors Emphasis of Matter in their Report the Board would like to state as under;
a) With reference to the Auditors remarks regarding Non confirmation of debit/credit balances, the same were not confirmed by the respective parties despite the letters/mails in this regard been sent to them. However the management does not expect any material changes on account of such reconciliation/non-receipt of confirmation from parties.
b) For no provision in respect of Trade Receivables outstanding for more than 180 days, the management is of the view that the said receivables are recoverable and as such no provision is required to be made thereof.
c) The management is of the view that the company is an operative company and will be able to meet its obligations to lenders and as such the financial statements have been prepared on a going concern basis.
d) Deferred tax Asset and MAT Credit Entitlement have been recognized considering virtual certainty that sufficient taxable income will be available during specified period against which such can be adjusted.
e) The recoverable amount of assets within the meaning of "Impairment of Assets" is more than their carrying value and as such no amount needs to be recognized in the financial statement for impairment losses.
f) The level of inventories is high due to lesser demand and overall recession in the global market.
g) The Income Tax Authorities carried out serarch & seizure action u/s 132(1) of the Income Tax Act, 1961 on the Company. The Consequential Assessment proceedings are in progress. Pending these proceedings, no provision has been made in the boooks for additional liability (amount presently not ascertainable) for tax, interest and penalty, if any.
h) Contingency related to "compensation payable in lieu of bank sacrifice" the outcome of which is materially uncertain and cannot be determined currently.
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. The Board appointed M/s. Jatin Sharma & Co., Cost Accountants, as cost auditors of the Company for the financial year 2016-17 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 would be filed with the Central Government within prescribed timelines.
Number of Board Meetings held during the year:
The Board met 6 times during the financial year 2015-16, the details of which are given in corporate governance section.
Annual Evaluation made by the Board of its own performance and that of its Committees and Individual Directors
The Board of Directors has evaluated the performance of the Board, its Committees and the Individual Directors as per the Nomination and Remuneration Policy. The Independent directors of the Company also review the performace of Non-Independent Directors and the Board.
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. It controls the risks through properly defined framework.
POLICY ON DIRECTORS APPOINTMENT & REMUNERATION
The Company strives to maintainan 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 Companys 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 re-appointment of Independent Directors, the Board shall take into consideration the results of the performance evaluation of the Directors and their engagement level. The Board of Directors of the Company has adopted a Remuneration Policy for Directors, KMPs and other employees. The policy represents the overarching approach of the Company to the remuneration 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 or persons are given in Financial Statements/Notes to the financial statements.
MATERIAL AND SIGNIFICANT ORDERS PASSED BY REGULATORS & COURTS
No significant and material orders have been passed by any regulators or courts or tribunals against the Company impacting the going concern status and Companys operations in future.
MATERIAL CHANGES &COMMITMENTS
No material changes and commitments, affecting the financial position of the Company have occurred after the end of the financial year 2015-16 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 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, 2016, no complaints pertaining to sexual harassment were received.
RELEVANT EXTRACT OF THE ANNUAL RETURN
Relevant extract of annual return for the financial year 2015-16 under the Companies Act, 2013 is given in Annexure V to this report
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 appointed M/s P. Sharma & Co., Company Secretaries in practice, to undertake the Secretarial Audit of the Company. The report of the Secretarial Audit is annexed to this report as Annexure VI. Secretarial Auditors report is self explanatory and therefore does not require further comments and explanation.
RELATED PARTY TRANSACTIONS
The Board has adopted 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 listing Agreement entered into with Stock Exchanges. The said policy is available on the Companys 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 Companys website viz. www. selindia.in/policy.html. Details of transactions are also given in Annexure IV to this report in the prescribed form.
The Company has in place a whistleblower policy, to support the Code of Business Ethics. This policy documents the Companys 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 Companys 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 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
During the year, there was no change in the Capital Structure of the Company.
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. Ashwani Kumar, Mr. Ranjan Madaan, Mr. Amit Narang and Mr. 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 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, 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, 2016 and of the profit/loss of the Company for the year ended on 31st March, 2016;
? 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 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
The Company has adopted Corporate Social Responsibility initiatives and focuses on key areas as education, healthcare etc., in accordance with the provisons of the relative Act and rules made thereunder.
The Corporate Social Responsibility Committee consists of Sh. Amit Narang (Chairman), Sh. Ram Saran Saluja and Sh. Ranjan Madaan. The Board of Directors on recommendation of the CSR Committee has formulated the CSR policy of the Company. The CSR activities of the Company are implemented in accordance with the core values viz. protecting stakeholder interests, proactive engagement with the local communities and striving towards inclusive development. The CSR activities are focused on the following five broad themes with goals to improve overall socioeconomic indicators of Companys 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 the website of the Company viz. www.selindia.in/policy.html
Your Directors express their gratitude to the Companys 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||(RAM SARAN SALUJA)|
|DATED : 13.08.2016||CHAIRMAN|
ANNEXURE-I TO THE DIRECTORS REPORT
A. Conservation of energy
i) Steps taken or Impact on conservation of energy:
The company provides high priority to energy conservation schemes to conserve natural resources and is regularly taking effective steps to conserve energy wherever possible. This continues to remain thrust area with studies, discussions and analysis being undertaken regularly for further improvements. Energy Conservation is an ongoing process in the Company. The Company continued its efforts to improve energy usage efficiencies.
ii) Steps taken by the company for utilizing alternate sources of energy:
SEL continues to work on reducing carbon footprint in all its areas of operations through initiatives like a) green infrastructure b) green IT (data centers, laptops and servers etc. c) operational energy efficiency, d) Green data centers. e) Power generation thorough own captive power plants.
iii) Capital Investment on energy conservation equipments etc.:
The company has installed its own Captive Power Plant (CPP turbine). The details of its utilisation is given as under:
|(a) Captive Power Plant (CPP Turbine)||2015-16||2014-15|
|Husk per Unit (Kg)||0.66||0.77|
B. RESEARCH & DEVELOPMENT, TECHNOLOGY ABSORPTION
Specific areas in which R & D activities/Technology Abrorption were carried out by the company
New Technology/Product development
Better Quality; reduced wastages
Safer operations and improved competitiveness
Future Plan of Action
Management is committed to strengthen R & D activities for product development and to improve its competitive ness in the times to come.
Expenditure on R & D
The Company has not imported any technology from abroad during the last five years. However the company has been using the imported machinery. The Company has been making efforts for absorption of latest technology.
The Company has achieved improvement in quality and lower cost of production.
C. FOREIGN EXCHANGE EARNINGS & OUTGO, EFFORTS AND INITIATIVES IN RELATION TO EXPORTS:
The Company has continued to maintain focus and avail of export opportunities based on economic considerations. There have been concentrated efforts to maintain and improve exports performance and to meet the need of end users.
|(Rs. in Lacs)|
|(i) Foreign Exchange earned|
|(a) FOB value of exports as per Balance Sheet||103293.07||118935.56|
|(b) Overseas Income||5257.44||16065.44|
|(ii) Foreign Exchange used|
|(a) CIF value of Imports||652.25||775.55|
|(b) Other Expenditure||2158.89||1044.69|
|(c) Overseas Expenditures||5145.84||15392.55|
ANNEXURE-II TO THE DIRECTORS REPORT
Information pursuant to provisions of section 197(12) of the Companies Act, 2013 and Rule 5(2) of Companies (Appointment and remuneration of Mangerial Personnel) Rules, 2014, and forming part of the Directors Report for the year ended 31st March, 2016:
|Name||Age (Yrs.)||Designation||Gross Remn. (Rs.)||Qualification||Experience (Yrs.)||Dt. of joining||Previous Employement||%age of Eq. Shares held as on 31.03.2016|
|Mr. Neeraj Saluja||49||Managing Director||1,54,00,000||Diploma in business Administration||24 Yrs||30.03.2006||SEL Mfg.||9871510 (2.98%)|
|Mr. Dhiraj Saluja||44||Jt. Managing Director||72,00,000||Degree in Mechanical Engineering||20 Yrs||28.05.2007||SEL Mfg. Co. Ltd.||8371506 (2.53%)|
|Mr. Vinod Kumar Goyal||57||Executive Director & CEO||78,00,000||MBA||35 Yrs||13.07.2010||Vardhman Texgarments Ltd./ Vardhman Textiles Ltd.||0.00|
|Mr.Navneet Gupta||46||Executive Director & CFO||36,00,000||CA||21 Yrs.||08.05.2008||SEL Mfg. Co. Ltd.||600 (0.00)|
|Mr. Manuj Mehta||47||President (HR)||29,95,004||MBA||25 Yrs.||22.11.2010||Malwa Industries Ltd.||0.00|
|Mr. Jayanta Kumar Das||52||President (Operations)||28,00,000||B.Tech. in Textile Tech.||29 Yrs.||08.04.2013||Vallabh Textile Co. Ltd.||0.00|
|Mr. Anchal Kumar||49||President (Commercial)||24,11,000||B.Tech. in Textile Tech.||27 Yrs.||30.08.2010||Vardhman Textiles Ltd.||0.00|
|Mr. Pradeep Kumar Aggarwal||62||President (Engineering)||23,10,004||B Sc Electrical||40 Yrs.||20.06.2011||Vardhman Textiles Ltd.||0.00|
|Mr. Rajesh Singla||51||President (Raw material)||22,84,000||MBA||27 Yrs.||29.11.2010||Vardhman Textiles Ltd.||0.00|
|Mr. Raj Kumar Singh||47||Sr. General Manager (HR)||20,52,000||PG/HRD||20 Yrs.||01.03.2012||Vardhman Textiles Ltd.||0.00|
|Mr. Raman Kumar||41||Sr. General Manager (Marketing)||20,10,000||Diploma in FD||19 Yrs.||04.11.2008||Vanasthali Textile Ind.Ltd.||0.00|
*Remuneration received includes basic salary, allowances, taxable value of perquisites etc..
*The nature of employment i.e. the tenure of Appointment for Managing Director/Executive Director is for a period of 3 years.
Other employees are on Roll of the Company.
*Mr. Neeraj Saluja and Mr. Dhiraj Saluja are sons of Mr. Ram Saran Saluja, all on the Board of the Company. None of other Director/employees are related to any director on the Board of the Company.
Nature of Duties:
Mr. Neeraj Saluja, Managing Director is responsible for the overall management of the Company and provides strategic direction in selection of technology and machineries, in setting up new manufacturing facilities, improvement of production processes and exploring and diversifying into new ventures etc.
Mr. Dhiraj Saluja, Jt. Managing Director of the Company besides being responsible for the overall management of the Company along with Mr. Neeraj Saluja, is also incharge of overseeing marketing of yarn, garments, terry towels etc. and looks after the complete function of marketing and delivery of our Companys products to the end customer.
Mr. Vinod Kumar Goyal, Executive Director & CEO besides being responsible for the overall management of the Company along with Mr. Neeraj Saluja and Mr. Dhiraj Saluja, also looks after complete operations of the Company.
Mr. Navneet Gupta, Executive Director & CFO is a Chartered Accountant and has a vast experience in Financial Areas and other related aspects.
As per the provisions of Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of managerial personnel) Rules, 2014, every listed company is required to disclose following information in the Board report.
(a) ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year;
|NAME||DESIGNATION||RATIO TO MEDIAN REMUNERATION OF EMPLOYEES|
|Mr. Ram Saran Saluja||Director||0|
|Mr. Neeraj Saluja||Managing Director||132.3|
|Mr. Dhiraj Saluja||Jt. Managing Director||61.8|
|Mr. Vinod Kumar Goyal||Executive Director & CEO||67.0|
|Mr. Navneet Gupta||Executive Director & CFO||30.9|
|Mr. Ashwani Kumar||Independent Director||0.19|
|Mr. Amit Narang||Independent Director||0.82|
|Mr. Kanwalnain Singh Kang||Independent Director||0.17|
|Mr. Ranjan Madaan||Independent Director||0.82|
|Mr. Prem Kumar||Independent Director||0.26|
|Ms. Paramjit Kaur||Independent Director||0.08|
|Mr. Joginder Kumar Gupta||Nominee Director||0|
*computed based on annualized remuneration.
(b) increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year; During the financial year 2015-16 there has not been any increase in the Remuneration to Managing Director/whole time Directors of the Company. The company has not paid any profit linked commission to non-executive Independent Directors of the Company. Further during the year, there has also been no increase in remuneration during the year for Chief Financial Officer of the Company. The remuneration of Company Secretary has been increased. (c) percentage increase in the median remuneration of employees in the financial year;13.76%
(d) number of permanent employees on the rolls of company;7750
(e) average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration
The average increase in the remuneration of employees was 13.76%. During the financial year 2015-16 there has not been any increase in the Remuneration to Managing Director/whole time Directors of the Company. The company has not paid any profit linked commission to non-executive independent Directors of the Company. Further during the year, there has also been no increase in remuneration during the year for Chief Financial Officer of the Company. Accordingly, there is no comparative information in this regard.
(f) We hereby affirm that the remuneration paid to the managerial and non-managerial personnel is as per the Remuneration Policy of the Company
ANNEXURE-III TO THE DIRECTORS REPORT
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR)
1. A brief outline of the Companys CSR Policy, including overview of projects or programmes proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programmes.
We at SEL are always committed towards sustainability. We do recognise that our business activities have wide impact on the society in which we operate, and therefore an effective practice is required with due consideration to the interests of our stakeholders. Our strategy is to create meaningful societal value, to enhance the competitiveness of value chains that we are part of. It is our conscious strategy to design and implement Social Investment Programmes in our business context and enriching value for the disadvantaged sections of society through economic empowerment and growth. This entails transcending business interests and quality of life for the upliftment of all and working towards making a better world for all sections of the society.
The Companys Policy including the projects/programs, the company intends to undertake includes:
? To align and integrate Corporate Social Responsibility programmes with the business value chain of the Company and make them outcome oriented and to support creation of sustainable livelihood sources.
? To ensure environmental sustainability by adopting best ecological practices and encouraging conservation use of natural resources.
? Establishment of Primary Health Care Centres.
? Girl Child Education: focus on education of girl child and the underpriviliged by providing appropriate infrasturcture and groom them as future value creators.
? Mother and Child care projects and preventive health through awareness programmes.
? Vocational training: Assist in skill development by providing direction and technical expertise to the vulnerable thereby empowering them towards a dignified life and enhance their means of livelihood.
? Basic Infrastructure facilities: Creating inclusive and enabling infrastructure/environment for livable communities.
? Housing facilities: Strive to provide awareness for creating public infrastructure that is barrier free, enabling for all including the elderly and the disabled.
? Safe drinking water/Sanitation & Hygiene: To emphasize on providing basis health care facilities and establishing health centers for the elderly and disabled.
? Optimum use of Renewable sources of energy/maintaining quality of air, water and soil.
? Awareness programmes on anti-social issues and Espousing basic moral values/Gender equality, empowering women.
? Crisis management: To respond to emergency situations & natural dissters by providing timely help to affected victims and their families/contribution to such funds as may be set up by the Central Government for socio-economic development.
? To strive for sustainable development in areas of strategic interest through initiatives designed in a manner that addresses the challenges faced by Indian society/promote rural development projects.
? To join with other insititutions/society etc. to contribute to the national mission of eardicating hunger and poverty and other social causes.
? To sustain and improve standards of Health Safety and Environment.
2. Composition of CSR Committee
The Corporate Social Responsibility Committee consists of Sh. Amit Narang (Chairman), Sh. Ram Saran Saluja and Sh. Ranjan Madaan
3. Average net profit of the Company for last three financial years
N.A since losses were incurred.
4. Prescribed CSR Expenditure (two percent of the amount as in item 3 above)
5. Details of CSR spent during the financial year : a. Total amount to be spent for the financial year; N.A. b. Amount unspent, if any; N.A c. Manner in which the amount spent during the financial year N.A.
6. In case the Company has failed to spend the two per cent, of the average net profit of the last three financial years or any part thereof, the company shall provide the reasons for not spending the amount in its Board report.
7. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company.
The implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company.
|Amit Narang||RAM SARAN SALUJA|
|DIN: 05271363||DIN: 01145051|
Manner in which amount spent during the financial year is detailed below: --N.A--
ANNEXURE-IV TO THE DIRECTORS REPORT
FORM NO. AOC -2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.
Form for Disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub section (1) of section 188 of the Companies Act, 2013 including certain arms length transaction under third proviso thereto.
1. Details of contracts or arrangements or transactions not at Arms length basis.
2. Details of contracts or arrangements or transactions at Arms length basis.
All related party transactions that were entered into during the financial year were on an arms length basis and were in compliance with the applicable provisions of the Act and Listing Agreement. There were no materially significant related party transactions made by the Company with promoters, Directors, key managerial personnel or other designated persons which may have a potential conflict with the interest of the Company at large. The details of the transactions with Related Parties are provided in the accompanying financial statements.
RAM SARAN SALUJA
(CHAIRMAN) DIN: 01145051
SECRETARIAL AUDIT REPORT
For The Financial Year Ended 31st March, 2016
Pursuant to section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
SEL Manufacturing Company Limited 274, Dhandari Khurd, G.T.Road, Ludhiana-141014 (PUNJAB)
We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by SEL Manufacturing Company Limited (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.
Based on our verification of the SEL Manufacturing Company Limited books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of Secretarial Audit, we hereby report that in our opinion, the company has, during the audit period covering the financial year ended on 31st March, 2016 complied with the statutory provisions listed hereunder and also that the Company has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:
We have examined the books, papers, minute books, forms and returns filed and other records maintained by SEL Manufacturing Company Limited, for the financial year ended on 31st March, 2016 according to the provisions of:
(i) The Companies Act, 2013 (the Act) and the rules made thereunder;
(ii) The Securities Contracts (Regulation) Act, 1956 (SCRA) and the rules made thereunder;
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;
(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (SEBI Act) to the extent they were applicable to the Company:-
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992/ The Securities and Exchange Board of India; (Prohibition of Insider Trading) Regulations, 2015
(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;
(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999;
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;
(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client:
(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; and (h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; We have also examined compliance with the applicable clauses of the following:
i) Secretarial Standards issued by the Institute of Company Secretaries of India. ii) The Listing Agreements entered into by the Company with BSE Limited and the National Stock Exchange of India Limited/ SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, standards etc., to the extent applicable, as mentioned above.
We have relied on the representation made by the Company and its Officers for systems and mechanism formed by the Company for compliances under other applicable Acts, Laws and Regulations to the Company and records in pursuant thereo, on test-check basis, we report that the Company has generally complied with the following laws applicable to the Company:
? Factories Act, 1948
? Labour Laws
? Acts prescribed under prevention and control of Pollution/Environment Protection.
We further report that the Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.
Adequate notices were given to all directors to schedule the Board Meetings; agenda and detailed notes on agenda were sent at least seven days in advance and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting for meaningful participation at the meeting. Decisions at the board meetings were taken unanimously.
We further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
We further report that during the audit period, the Company has not made any further Issue of Capital or redemption/buy-back of Securities, Merger, Amalgamaton or Foreign Technical Collaborations etc.
|For P. Sharma & Co.,|
|Place: Bhatinda||ACS No.: 15148|
|Date: 13.08.2016||CP No.: 12316|
This report is to be read with our letter of even date which is annexd as Annexure A and forms an integreal part of this report
SEL Manufacturing Company Limited
Our report of even date is to be read along with this letter.
a) Maintenance of Secretarial Record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.
b) We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.
c) We have not verified the correctness and appropriateness of the financial statements of the Company.
d) The compliance of the provisions of the Corporate and other applicable laws, rules, regulation, standards is the responsibility of the management. Our examination was limited to the verification of procedures on test basis.
e) The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.
|For P. Sharma & Co.,|
|Place: Bhatinda||ACS No.: 15148|
|Date: 13.08.2016||CP No.: 12316|
Annexure-VII: Remuneration Policy
1. Review of the Policy
1.1 The Nomination and Remuneration Committee will review this policy periodically and recommend revisions to the board for consideration.
The philosophy for remuneration of Directors, Key Managerial Personnel ("KMP") and all other employees of SEL Manufacturing Company Limited ("the Company") is based on the commitment of fostering a culture of leadership with trust. The remuneration policy is aligned to this philosophy.
This remuneration policy has been prepared pursuant to the provisions of Section 178(3) of the Companies Act, 2013 ("Act") and Clauses of the Equity Listing Agreement ("Listing Agreement")/SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. In case of any inconsistency between the provisions of law and this remuneration policy, the provisions of the law shall prevail and the company shall abide by the applicable law. While formulating this policy, the Nomination and Remuneration Committee has considered the factors laid down under Section 178(4) of the Act, which are as under: (a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully; (b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and (c) remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals" Key principles governing this remuneration policy are as follows:
Remuneration for Independent Directors and Non-Independent Non-Executive Directors:
? Independent directors ("ID") and non-independent non-executive directors ("NED") may be paid sitting fees (for attending the meetings of the Board and of committees of which they may be members) and commission within regulatory limits.
? Within the parameters prescribed by law, the payment of sitting fees and commission will be recommended by the Nomination and Remuneration Committee and approved by the Board.
? Overall remuneration (sitting fees and commission) should be reasonable and sufficient to attract, retain and motivate directors aligned to the requirements of the Company (taking into consideration the challenges faced by the Company and its future growth imperatives).
? Overall remuneration should be reflective of size of the Company, complexity of the sector/ industry/ companys operations and the companys capacity to pay the remuneration.
? Overall remuneration practices should be consistent with recognised best practices.
? Quantum of sitting fees may be subject to review on a periodic basis, as required.
? The aggregate commission payable to all the Non executive Directors and the Independent Directors will be recommended by the Nomination and Remuneration Committee to the Board based on company performance, profits, return to investors, shareholder value creation and any other significant qualitative parameters as may be decided by the Board.
? The Nomination and Remuneration Committee will recommend to the Board the quantum of commission for each director based upon the outcome of the evaluation process which is driven by various factors including attendance and time spent in the Board and committee meetings, individual contributions at the meetings and contributions made by directors other than in meetings.
? In addition to the sitting fees and commission, the Company may pay to any director such fair and reasonable expenditure, as may have been incurred by the director while performing his/her role as a director of the Company. This could include reasonable expenditure incurred by the director for attending Board/ Board committee meetings, general meetings, court convened meetings, meetings with shareholders/ creditors/ management, site visits, induction and training (organised by the company for directors) and in obtaining professional advice from independent advisors in the furtherance of his/ her duties as a director.
Remuneration for Managing Director ("MD")/ Executive Directors ("ED")/ KMP/ rest of the employees
The extent of overall remuneration should be sufficient to attract and retain talented and qualified individuals suitable for every role. Hence remuneration should be:
? Market competitive (market for every role is defined as companies from which the company attracts talent or companies to which the company loses talent).
? Driven by the role played by the individual.
? Reflective of size of the company, complexity of the sector/ industry/ companys operations and the companys capacity to pay.
? Consistent with recognised best practices.
? Aligned to any regulatory requirements.
In terms of remuneration mix or composition:
? The remuneration mix for the MD/ EDs is as approved by the shareholders. In case of any change, the same would require the approval of the shareholders, if required, under the provisions of the Companies Act, 2013.
? Basic/ fixed salary is provided to all employees to ensure that there is a steady income in line with their skills and experience.
? In addition to the basic/ fixed salary, the company provides employees with certain perquisites, allowances and benefits to enable a certain level of lifestyle and to offer scope for savings and tax optimisation, where possible. The company also provides all employees with a social security net (subject to limits) by covering medical expenses and hospitalisation through re-imbursements or insurance cover and accidental death and dismemberment through personal accident insurance.
? The company provides retirement benefits as applicable.
? In addition to the basic/ fixed salary, benefits, perquisites and allowances as provided above, the company may provide MD/EDs such remuneration by way of commission, calculated with reference to the net profits of the company in a particular financial year, as may be determined by the Board, subject to the overall ceilings stipulated in Section 197 of the Act. The specific amount payable to the MD/ EDs would be based on performance as evaluated by the Board or the Nomination and Remuneration Committee and approved by the Board.
? The company may provide the rest of the employees a performance linked bonus. The performance linked bonus would be driven by the outcome of the performance appraisal process and the performance of the company.
Remuneration payable to Director for services rendered in other capacity
The remuneration payable to the Directors shall be inclusive of any remuneration payable for services rendered by such director in any other capacity unless:
a) The services rendered are of a professional nature.
b) The Nomination and Remuneration Committee is of the opinion that the director possesses requisite qualification for the practice of the profession.
The Nomination and Remuneration Committee is responsible for recommending the remuneration policy to the Board. The Board is responsible for approving and overseeing implementation of the remuneration policy.