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Directors Report of SEL Manufacturing Company Ltd.

Mar 31, 2015

The Directors have pleasure in presenting their 15th Annual Report on the affairs of the company together with Audited Accounts for the financial year ended 31st March, 2015.

FINANCIAL RESULTS (Rupees in Lacs)

Current Year Previous year

(2014-15) (2013-14)

Revenue from Operations 232578.47 295603.95 Other Income 12262.43 9012.18

244840.90 304616.13

Less :

Expenditure 228826.98 305265.05

29327.22 21243.11 Provision for Depreciation 258154.20 326508.16

Profit/(Loss) before except- ional items and Tax: (13313.30) (21892.03)

Exceptional items - 18094.31

Profit/(Loss) before Tax (13313.30) (39986.34)

Less :

Taxes : Deferred Tax (4445.50) (15127.80)

Earlier Yrs 197.68 (4247.82) 684.36 (14443.44)

Profit/(Loss)

after Tax (9065.48) (25542.90) Balance brought forward 6871.50 32414.40

(2193.98) 6871.50 Less: Transferred to General Reserve - -

Less: Carrying amount of fixed assets debited to retained earningswhere remaining useful life of assets isNil as on 01.04.2014 187.84 --

Balance Carried over to Balance Sheet (2381.82) 6871.50

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 Ludhiana and NawanSheher in Punjab, Baddi in Himachal Pradesh and Sehore in Madhya Pradesh.

STATE OF COMPANY'S AFFAIRS:

During the year under review, your company has achieved Revenue from Operations of Rs. 232578.47 lacs as compared to Rs. 295603.95 lacs in the previous year. After deducting Expenses and Exceptional Items there was Loss of Rs. 13313.30 lacs as compared to Loss of Rs. 39986.33 lacs during the previous year. After providing for taxes and other adjustments, the current year loss stood at Rs. 9065.48 lacs as compared to loss of Rs. 25542.90 lacs during the previous year.

SUBSIDIARY COMPANY/FIRM(S):

As at 31.03.2015, the Company has the following Subsidiary Company(ies) namely SEL Aviation Pvt. Ltd., SEL Textiles Corporation, Omega Hotels Ltd., SEL Textiles Ltd., Silver line 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. Omega Hotels ltd. proposes to commence a hotel project at Agra in Uttar Pradesh. Further the Report on financial position of subsidiaries along with 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.

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:

Due to the losses incurred in F.Y. 2014-15 and in order to conserve resources for future growth/needs, the directors have not recommended any dividend for the Financial year 2014-15.

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.

DIRECTORS & KMP:

Ms. Paramjit Kaur was duly appointed as an Additional Director on the Board w.e.f. 31.03.2015. Further the appointment of Mr. Ashwani Kumar, Mr. Amit Narang, Mr. Ranjan Madaan, Mr. Prem Kumar and Mr. Kanwalnain Singh Kang, as Independent Director(s) on the Board of the Company for a period of five years, was duly approved by the members in the last Geeral Meeting held. Pursuant to Section 149 of the Companies Act, 2013, the Board recommends the appointment of Ms. Paramjit Kaur, as an Independent Director of the Company, not liable to retire by rotation for a period of five years, subject to the approval of the Members of the Company. The re-appointment of Mr. Neeraj Saluja, as 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. Navneet Gupta, 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) up to financial year 2015-16. The GDRs of the company are listed on Luxembourg Stock Exchange.

AUDITORS:

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.

AUDITORS' REPORT:

Regarding Auditors Emphasis of Matter in their Report the Board comments as under;

a) During the Year under Audit, the Income Tax Authorities carried out serarch & seizure action u/s 132(1) of the Income Tax Act, 1961 on the Company, its promoters and some other companies/entities. 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.

b) The matter is self explanatory as during the year, the Company's proposal for restructuring of its debts was approved by Corporate Debt Restructuring Cell ("CDR Cell") vide Letter of Approval (LOA) dt. 30.06.2014. The cut-off date (COD) for implementation of CDR was 30th September, 2013.The Company executed Master Restructuring Agreement (MRA) with CDR Lenders on 24th September, 2014.The details of the Restructuring package as approved by CDR cell are duly provided IN Notes to Financial Statements.

Further 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.

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. The Board appointed M/s. Jatin Sharma & Co., Cost accountants, as cost auditors of the Company for the financial year 2015-16 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 12 times during the financial year 2014-15, 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 performance 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 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 interlaid 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 re-appointment of Independent Directors, the Board shall take into consideration the results of the performance evaluation of the Directors and their engagement level. During the year under review, 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 corporate 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 Company's 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 2014-15 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, 2015, no complaints pertaining to sexual harassment were received.

RELEVANT EXTRACT OF THE ANNUAL RETURN:

Relevant extract of annual return for the financial year 2014- 15 under the Companies Act, 2013 is given in Annexure V to this report

SECRETARIAL AUDIT :

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company 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:

During the year under review, 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 perthe provisions of the companies Act, 2013 and listing Agreement entered into with Stock Exchanges. The said policy is available on the Company's website viz. www.selindia.in/oolicv.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/policv.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 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/policv.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/Dolicyhtmi

CHANGES IN CAPITAL STRUCTURE:

During the year, the Company issued 6,97,10,000 (Six Crore Ninety Seven Lakh and Ten Thousand Only) 1% Non- Cumulative, Non-Convertible Redeemable Preference Shares of Rs. 10/- (Rs. Ten) each to the Promoters of the company.

AUDIT COMMITTEE:

the Board has constituted its Audit Committee pursuant to the provisions qf Section 177 of the Companies Act, 2013 and provisions of the Listing Agreement(s) of the Stock Exchange(s). 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 ANDOUTGO:

Information on conservation of energy, technology absorption and foreign exchange earnings and outgo is given in Annexure-I forming part of 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-ll 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 31 st March, 2015 and of the profit/loss of the Company for the year ended on 31 st March, 2015;

- 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 provisions of the relative Act and rules made there under.

The Corporate Social Responsibility Committee consists of Sh. Amit Narang (Chairman), Sh. Ram Saran Saluja and Sh. Ranjan Madaan. During the year under review, 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 Company's area of operation:

-Promoting healthcare, sanitation and making safe drinking water available;

- Employment enhancement through' training and vocational skill development;

- Income enhancement through farm based and other livelihood opportunities;

- Promoting education and sports; and

- Ensuring sustainable environment.

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

Your Directors express thief 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

(RAM SARAN SALUJA)

DATED: 13.08.2015 CHAIRMAN

DIN: 01145051


Mar 31, 2014

Dear members,

The Directors have pleasure in presenting their 14th Annual Report on the affairs of the company together with Audited Accounts for the financial year ended 31st March, 2014.

FINANCIAL RESULTS (Rupees in Lacs) Current Previous Year year (2013-14) (2012-13)

Revenue from Operations 295603.95 315421.69 Other Income 9012.18 17198.82

304616.13 332620.51 Less :

Expenditure 305265.05 302252.64 Provision for Depreciation 21243.11 326508.16 13559.26 315811.90

Profit/(Loss) (21892.03) 16808.61 before exceptional 18094.31 items and Tax: Exceptional items

Profit/(Loss) (39986.34) 16808.61 before Tax Less : Taxes : Current Tax - 3287.00

Deferred Tax (15127.80) 5496.19

MAT Credit Entit. - (2957.60)

Earlier Yrs 684.36 (14443.44) 339.52 6165.11

Profit/(Loss) (25542.90) 10643.50 after Tax Balance brought forward 32414.40 31770.90 6871.50 42414.40

Less: Transferred to General Reserve - 10000.00

Balance Carried over to Balance Sheet 6871.50 32414.40

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 Ludhiana and NawanSheher in Punjab, Baddi in Himachal Pradesh and Sehore in Madhya Pradesh.

OPERATIONS:

During the year under review, your company has achieved Revenue from Operations of Rs. 295603.95 lacs as compared to Rs. 315421.69 lacs in the previous year. After deducting Expenses and Exceptional Items there was Loss of Rs. 39986.33 lacs as compared to profit before tax Rs. 16808.61 lacs during the previous year. After providing for taxes and other adjustments, the current year loss stood at Rs. 25542.90 lacs as compared to Profit after tax of Rs. 10643.50 lacs during the previous year.

SUBSIDIARY COMPANY/FIRM(S):

As at 31.03.2014, the Company has the following Subsidiary Company(ies) namely SEL Aviation Pvt. Ltd., SEL Textiles Corporation, SEL Textiles Ltd., Silverline Corporation Ltd., SEL Textiles Overseas 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 alongwith a project under installation at Vill Punjava-Lambi, Tehsil Malout, Dist Sri Muktsar Sahib (Punjab). Further SEL Textiles Ltd., has two subsidiary companies i.e. M/s Silverline Corporation Ltd., in India and M/s SEL Textiles Overseas Ltd. in Hong Kong. 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.

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.

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:

Due to the losses incurred in F.Y. 2013-14 and in order to conserve resources for future growth/needs, the directors have not recommended any dividend for the Financial year 2013-14.

CORPORATE DEBT RESTRUCTURING

During the year under review the Company had made a reference to Corporate Debt Restructuring (CDR) Cell for restructuring its debts in view of difficult financial situation. The CDR Empowered Group, at its meeting held on 28th June, 2014, has approved the CDR Package.

FIXED DEPOSITS:

During the year, your Company has not accepted any fixed deposits within the meaning of Section 58-A of the Companies Act, 1956 and the Rules made there under.

DIRECTORS:

Pursuant to Section 149 of the Companies Act, 2013, the Board recommends the appointment of Mr. Ashwani Kumar, Mr. Amit Narang, Mr. Ranjan Madaan, Mr. Prem Kumar and Mr. Kanwalnain Singh Kang as Independent Directors of the Compay, not liable to retire by rotation for a period of five years, subject to the approval of the Members of the Company. Further Mr. Ram Saran 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 2014-15. The GDRs of the company are listed on Luxembourg Stock Exchange.

AUDITORS:

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.

AUDITORS'' REPORT:

Regarding Auditors Emphasis of Matter in their Report the Board comments as under;

a) During the Year under Audit, the Income Tax Authorities carried out serarch & seizure action u/s 132(1) of the Income Tax Act, 1961 on the Company, its promoters and some other companies/entities. 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.

b) The Company has initiated the process of identifying non-moving, slow moving, obsolete and damaged inventory in finished goods during the year, which was concluded at the close of the year. The Company has recognized an aggregate amount of Rs.180.94 crores as reduction in value of inventories due to write down thereof to net realizable value, which is charged to Profit & Loss Statement as an exceptional item.

Further 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.

COST AUDITORS:

As per the requirement of the Central Government and pursuant to Section 233B of the Companies Act, 1956 and the rules made thereunder, the Company has been carrying out an audit of its cost records. The Company had appointed M/s R.R. & Co., Cost Accountants, Ludhiana to conduct the Cost Audit. The cost audit report for the financial year ended March 31, 2013 was filed with the Ministry of Corporate Affairs on 26.12.2013.

AUDIT COMMITTEE:

The Board has constituted its Audit Committee pursuant to the provisions of Section 292A of the Companies Act, 1956 (Section 177 of the Companies Act, 2013) and provisions of the Listing Agreement(s) of the Stock Exchange(s).

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 as per section 217(1)(e) read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 are given in Annexure-I forming part of this report.

PARTICULARS OF EMPLOYEES:

Details of remuneration paid to employees, as required by Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of employees) Rules, 1975 are set out in a separate statement attached hereto and marked as Annexure-ll 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, 1956.

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, 2014 and of the profit/loss of the Company for the year ended on 31st March, 2014;

* Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregulariti* The annual accounts have been prepared on a going concern basis.

CORPORATE SOCIAL RESPONSIBILITY

The Company has adopted Corporate Social Responsibility initiatives and focuses on key areas as eduction, healthcare etc. in accordance with the provisons of the relative Act and rules made thereunder.

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 (RAM SARAN SALUJA) DATED : 29.08.2014 CHAIRMAN


Mar 31, 2013

To The Members of SEL Manufacturing Company Ltd.

The Directors have pleasure in presenting their 13th Annual Report on the affairs of the company together with Audited Accounts for the financial year ended 31st March, 2013.

FINANCIAL RESULTS (Rupees in Lacs)

Current Year Previous year (2012-13) (2011-12)

Revenue from Operations 315421.69 203834.24

Other Income 17198.82 9627.90

332620.51 213462.14

Less :

Expenditure 302247.14 195164.01

Provision for Depreciation 13559.26 315806.40 7507.34 202671.35

Profit before taxation: 16814.11 10790.79

Less :

Taxes : Current Tax 3287.00 2089.00

Deferred Tax 5496.19 3390.31

MAT Credit Entit. (2957.60) (1873.81)

Wealth Tax 5.50 2.00

Earlier Yrs 339.52 6170.61 0.00 3607.50

Profit after Tax 10643.50 7183.29

Balance brought forward 31770.90 30903.52

42414.40 38086.81

Less: Previous year Tax Adjustments 0.00 1317.91

Less: Transferred to General Reserve 10000.00 4998.00

Balance Carried over to Balance Sheet 32414.40 31770.90

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 Ludhiana and NawanSheher in Punjab, Baddi in Himachal Pradesh and Sehore in Madhya Pradesh.

We are expanding our existing capacities in spinning/knitting. The Company is setting up a new project in the state of Madhya Pradesh consisting of spinning unit with a capacity of 571,200 spindles, out of which 326,400 spindles have already been installed. The said spinning facility is the largest under one roof in India. Further, the Company also proposes to set up Knitted Fabric/ Cloth capacity of 72,000 TPA out of which 28,000 TPA is already installed. The Company has also set up Open end spinning with capacity of4,440 Rotors.

OPERATIONS:

During the year under review, your company has achieved Revenue from Operations of Rs. 315421.69 lacs as compared to Rs. 203834.24 lacs in the previous year. The profit before tax stood at Rs. 16814.11 lacs as compared to Rs. 10790.79 lacs during the previous year. After providing for taxes and other adjustments, the Profit after tax stood at Rs. 10643.50 lacs as compared to Rs. 7183.29 lacs during the previous year.

SUBSIDIARY COMPANY/FIRM(S):

As at 31.03.2013, the Company has the following Subsidiary Company(ies) namely Omega Hotels Ltd., SEL Aviation Pvt. Ltd., SEL Textiles Corporation, SEL Ecochem Pvt. Ltd., SEL Textiles Ltd., Silverline Corporation Ltd., SEL Textiles Overseas 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.

SEL Textiles Ltd. is also setting up a project with spinning capacity of 188160 spindles, denim fabric manufacturing capacity of 40 million meters per annum and around 8 million pieces of denim garments per annum at Vill Punjava-Lambi, Tehsil Malout, Dist Sri Muktsar Sahib (Punjab). The unit has already commenced commercial operations with installation of 65,280 spindles. Further SEL Textiles Ltd., has two subsidiary companies i.e. M/s Silverline Corporation Ltd., in India and M/s SEL Textiles Overseas Ltd. in Hong Kong.

Omega Hotels Ltd., subsidiary of the company is presently implementing a hotel project at Agra in the Sate of Uttar Pradesh.

SEL Aviation Pvt. Ltd., subsidiary of the company is in the business of aviation services and holds a Non-Scheduled Operator''s permit under the Director General of Civil Aviation Rules and Regulations.

SEL Textiles Corporation is the wholly owned subsidiary of the Company in the state of California, USA.

SEL Ecochem Pvt. Ltd., is subsidiary of the Company in India which proposes to commence business of chemicals, acids, etc.

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.

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:

In order to conserve resources for future growth and the expansion projects of the company the directors have not recommended any dividend for the Financial year 2012-13.

FIXED DEPOSITS:

During the year, your Company has not accepted any fixed deposits within the meaning of Section 58-A of the Companies Act, 1956 and the Rules made there under.

DIRECTORS:

Mr. Navneet Gupta, Mr. Vinod Kumar Goyal and Mr. Prem Kumar, Directors'' of the Company retire by rotation at this Annual General Meeting and being eligible offer themselves for re-appointment.

Further the re-appointment of Mr. Vinod Kumar Goyal and Mr. Navneet Gupta as Executive Director(s) of the Company for a further period of three years each respectively is also to be confirmed.

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 2013-14. The GDRs of the company are listed on Luxembourg Stock Exchange.

AUDITORS:

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.

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 by the Auditors.

COST AUDITORS:

As per the requirement of the Central Government and pursuant to Section 233B of the Companies Act, 1956 and the rules made thereunder, the Company''s Cost Records for the year ended March 31, 2013 are being audited/reviewed by Cost auditors, M/s R.R. & Co., Cost Accountants, Ludhiana. The cost audit report for the financial year ended March 31, 2013 is to be filed within 180 days from the close of the financial year.

AUDIT COMMITTEE:

The Board has constituted its Audit Committee pursuant to the provisions of Section 292A of the Companies Act, 1956 and provisions of the Listing Agreement(s) of the Stock Exchange(s).

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 as per section 217(1)(e) read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 are given in Annexure-I forming part of this report.

PARTICULARS OF EMPLOYEES:

Details of remuneration paid to employees, as required by Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of employees) Rules, 1975 are set out in a separate statement attached hereto and marked as Annexure-II 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, 1956.

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, 2013 and of the profit of the Company for the year ended on 31st March, 2013;

- Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 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.

ACKNOWLEDGMENTS:

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 (RAM SARAN SALUJA)

DATED : 24.08.2013 CHAIRMAN


Mar 31, 2011

The Directors have pleasure in presenting their 11th Annual Report on the affairs of the company together with Audited Accounts for the financial year ended 31st March, 2011.

FINANCIAL RESULTS :

(Rs.in Lacs) Current Year Previous Year (2010-11) (2009-10)

Operating Income

Gross Sales 158327.91 94221.62

Net Sales 158321.55 94221.62

Other Income 2454.39 3949.79

160775.94 98171.41

Less :

Expenditure 140276.90 85789.39

Provision for 5574.88 145851.78 3143.13 88932.52 Depreciation

Profit before taxation 14924.16 9238.89

Less :

Taxes :Current Tax 2979.00 1600.00

Deferred Tax 2899.86 987.58

Fringe Benefit Tax - -

MAT Credit Entit. (996.09) (39.46)

Wealth Tax 2.25 4885.02 2.25 2550.37

Profit after Tax 10039.14 6688.52

Balance brought forward 23285.76 19595.85

33324.90 26284.37

Add: Previous year Tax Adjustments 78.62 (498.61)

Less: Transferred to General Reserve 2500.00 2500.00

Balance Carried over to Balance Sheet 30903.52 23285.76



BUSINESS

The Company is vertically integrated multi-product textile company, manufacturing and exporting various kinds of Knitted Garments, Terry Towels, Knitted & Processed Fabric and various kinds of Yarn with production facilities located at Ludhiana and Nawansheher in Punjab and Baddi in Himachal Pradesh and upcoming unit in the state of Madhya Pradesh.

Our Business Strategy

Our principal operating strategies are to:

- Foray into value added yarns like slub fancy yarn, Dyed yarns, Bamboo cotton, Organic cotton, Millanges etc

- Expand our garment capacity to cater to more diverse export markets.

- To become an integrated player in the textile market catering in all segments from carded and combed yarn, knitting fabrics, knitted garments and terry towels.

- Reduction of operational costs.

- Invest in design and product development for setting new trends and lifestyles.

- Develop and maintain strong relationship with our clients.

We are expanding our existing capacities in yarn manufacturing and terry towels. Further, we have also set up captive Power Plant with a capacity of 22MW. The terry towel manufacturing capacities are proposed to be increased upto 25200 TPA post expansion.

The implementation work of the new Spinning Project in the state of Madhya Pradesh is on full swing which consists of the capacity of 3,26,400 spindles. Further Vertex Spinning facility with capacity of 2400 spindles and Open end Spinning with capacity of 2040 Rotors is also proposed to be set up. Further expansion of open end Spinning consisting of 4800 rotors is also proposed which would take the total open end spinning capacity (post expansion) to 9240 rotors.

OPERATIONS

During the year under review, your company has achieved Gross Sales to the tune of Rs. 158327.91 lacs as compared to Rs. 94221.62 lacs in the previous year. The profit before tax stood at Rs. 14924.16 lacs as compared to Rs. 9238.89 lacs during the previous year. After providing for taxes and other adjustments, the Profit after tax stood at Rs. 10039.14 lacs as compared to Rs. 6688.52 lacs during the previous year.

SUBSIDIARY FIRM(S)

The company has one Subsidiary Company namely SEL Textiles Ltd. and two subsidiary firm(s) namely M/s SE Exports and M/s Kudu Industries. The Company has its branch office at Dubai, 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 each in the partnership firm(s) namely M/s SE Exports and M/s Kudu Industries. M/s SE Exports, the firm is engaged in the business of manufacture of value added knitted garments having production facilities located in the tax free zone in Baddi in Himachal Pradesh and M/s Kudu Industries is located at Ludhiana.

The Company holds 99.75% stake in SEL Textiles Limited. 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).

Further the capacities of both of the aforesaid units is being expanded as under:

- Addition of 34560 Spindles at the Unit located at Neemrana (Rajasthan). It is also proposed to add open end spinning capacity of 1440 rotors there.

- Addition of 26400 spindles at the Unit located at Hansi (Haryana)

Further a new Spinning unit is being installed under the subsidiary i.e. SEL Textiles Ltd. In the State of Punjab with the capacity of about 1,88,000 Spindles.

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.

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

In order to conserve resources for future growth and the expansion projects of the company the directors have not recommended any dividend for the Financial year 2010-11.

PREFERENTIAL ISSUE OF WARRANTS

Out of total 66,00,000 equity warrants allotted on 18th September, 2009 on preferential basis, 57,00,000 warrants were converted in the previous financial year and the balance 9,00,000 warrants were converted into Equity shares by the holders thereof during the year.

Further during the year the Company had allotted 30,90,000 equity warrants on preferential basis, carrying an option to the holder of such warrants to subscribe to one equity share of Rs. 10/- each at a premium of Rs. 64/- per share for every warrant held, within 18 months from the date of allotment (i.e. from 27.08.2010), in terms of SEBI (DIP) Guidelines read with SEBI (Issue of Capital & Disclosure Requirements) Regulation, 2009. All of the aforesaid warrants were converted into Shares during the year itself.

FURTHER ISSUE OF SECURITIES

During the year 2010-11, the Company has issued two series of GDRs (Global Depository Receipts). The first series being of 30,00,000 Global Depositary Receipts (GDRs) issued on 04.05.2010 representing 3,00,00,000 Equity Shares of the Company at the rate of USD 15.50 per GDR. The second series being of 35,00,000 Global Depositary Receipts (GDRs) issued on 09.09.2010 representing 3,50,00,000 Equity Shares of the Company at the rate of USD 10.00 per GDR. These GDRs were listed on the Luxembourg Stock Exchange. The said GDRs were cancelled/converted and there was no share outstanding in lieu of the said GDRs as on 31.03.2011.

FURTHER ISSUE OF SECURITES TO RAISE FUNDS

To augment long term resources of the Company and also for meeting the fund requirements of the existing business, current and future expansions etc., the Company proposes to pass requisite resolution in this regard to raise funds for the Company, subject to necessary approvals and applicable laws & regulations, by way of issue of equity shares/securities, in the course of domestic and/or international offering(s), in one or more foreign markets, at such time or times in one or more tranche or tranches, such Securities include Global Depositary Receipts (GDRs) and/or American Depositary Receipts (ADRs) convertible into equity shares, Foreign Currency Convertible Bonds (FCCBs) or any instrument or securities representing convertible securities such as convertible debentures, bonds or warrants etc. convertible into equity shares, whether optionally or otherwise or any combination thereof (hereinafter referred to as `Securities).

The Company also intends to issue convertible warrants on Preferential basis to raise funds for the Company.

The desired resolution(s) for the aforesaid purpose(s) are included in the Agenda for the ensuing Annual General Meeting for the consideration and approval of the members of the Company.

FIXED DEPOSITS

During the year, your Company has not accepted any fixed deposits within the meaning of Section 58-A of the Companies Act, 1956 and the Rules made there under.

DIRECTORS

Mr. Dhiraj Saluja, Mr. Sanjiv Garg and Mr. Ranjan Madaan, Directors of the Company retire by rotation at this Annual General Meeting and being eligible offer themselves for reappointment.

Mr. Navneet Gupta is to be confirmed to be re-appointed as Executive Director of the Company for a further period of three years. Further the designation of Mr. Dhiraj Saluja is to be confirmed to be as Joint Managing Director of the Company. The required resolution(s) in this regard are included in the Agenda for the ensuing Annual General Meeting for the consideration and approval of the members of the Company.

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 2011-12.

AUDITORS

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.

AUDITORS REPORT

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 in this regard been sent to them.

Further pursuant to auditors remarks in their Report on consolidated Accounts regarding non-compliance with AS-15 regarding non-provision of gratuity by its subsidiary firms the Board has to say that since the employee strength of the subsidiary partnership firm(s) is small, the gratuity is provided on cash basis. Regarding Non elimination of loss on transfer (sale) of fixed assets among Inter group companies while preparing the consolidated financial statements, the said amount was very small and notional loss only which did not had any material effect on the consolidated financial statements of the Company. Further regarding Non-confirmation of debit/credit balances, the same were not confirmed by the respective parties despite the letters in this regard been sent to them.

Further the report of Auditors and notes on accounts are self explanatory and do not call for any further comments as there are no other adverse remarks by the Auditors.

AUDIT COMMITTEE

The Board has constituted its Audit Committee pursuant to the provisions of Section 292A of the Companies Act, 1956 and provisions of the Listing Agreement(s) of the Stock Exchange(s).

The Audit Committee of the Company presently comprises of the following members namely Mr. Ashwani Kumar, Mr. Amar Narang, Mr. Sanjiv Garg 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 as per section 217(1)(e) read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 are given in Annexure-I forming part of this report.

PARTICULARS OF EMPLOYEES

Details of remuneration paid to employees, as required by Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of employees) Rules, 1975 are set out in a separate statement attached hereto and marked as Annexure-II 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, 1956.

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, 2011 and of the profit of the Company for the year ended on 31st March, 2011;

- Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 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.

ACKNOWLEDGEMENT

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.

(NEERAJ SALUJA) Managing Director

(NAVNEET GUPTA) Executive Director

PLACE : Ludhiana DATE : 19.05.2011

 
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