Your Directors have pleasure in presenting the Annual Report for the year ended 31March 2019.
The Company achieved the following results over the past three years : (in *Rs* lakhs)
| ||2016-17 ||2017-18 ||2018-19 |
|Net Sales ||5584 ||7661 ||9333 |
|EBIDTA ||4311 ||5448 ||7470 |
|EBIDTA / Net Sales ||77% ||71% ||80% |
Total Reserves and Surplus of the Company have increased from
Rs 278 crores to Rs 310 crores as on 31 March 2019. The Board has not recommended anytransfer to General Reserves from the profits during the year under review.
Review of Operations
The Company has significantly increased profitability and cash flow from operationsyear over year due to increased focus on optimizing capital investment in productionenhancement reservoir management operational excellence supported by improvedhydrocarbon prices. The Company had also submitted its applications for a 10-yearextension upto March-2030 of its Production Sharing Contracts for Bakrol Indrora andLohar oilfields to DGH as per Ministry of Petroleum and Natural Gas guidelines. Towardsthis end the Company is pleased to inform that it has recently received the extension for10 years for Lohar and Bakrol field. For Indrora field the extension proposal is underdiscussion between the Company and DGH.
Organizational enhancement with internationally accomplished management and technicaladvisory team has been the key factor in delivering these results with demonstrableimprovement in operational execution better understanding of reservoir geology andproduction potential as well as more effective deployment of capital. This helps theCompany focus on production enhancement as well as encourages collaboration among theindustry investors service providers and consultants to bring in new technology costand operational efficiency. Towards this end the Company is working for a robustproduction optimization exercise to further enhance production from drilling campaigns forsignificant increases in production. In this regard the Company is in the process ofobtaining detailed approvals for the Bakrol and Karjisan field and is in ongoingdiscussions with the DGH towards this end.
Government remains committed to making sustained and significant efforts aimed atliberalizing the sector by simplifying processes increasing market access and bringingdevelopments in the technology domain with the aim to enhance the efficiency of our oiland gas industry. Please also refer to the Management Discussion and Analysis section ofthe Annual Report for further clarification regarding Company's operations and policies.
The Directors are pleased to inform that in the financial year 2018-19 the Board ofDirectors have declared an interim dividend of 50% i.e.
*Rs* 5/- per share which shall be declared as final dividend for the year 2018-19subject to approval by the shareholders of the Company in the forthcoming AGM. Thedividend together with dividend distribution tax resulted in cash outlay of ` 988.55lakhs.
Transfer to IEPF
Pursuant to applicable provisions of the Companies Act 2013 ("Act") readwith the Investor Education and Protection Fund Authority (Accounting Audit Transfer andRefund) Rules 2016 and subsequent amendments thereto ("IEPF Rules") all unpaidor unclaimed dividends are required to be transferred by the Company to the InvestorEducation and Protection Fund ("IEPF" or "Fund") established by theCentral Government after completion of seven years from the date of dividend becomingunpaid / unclaimed. Further according to the Rules the shares in respect of whichdividend has not been paid or claimed by the members for seven consecutive years or moreshall also be transferred to the demat account created by the IEPF Authority. The Companyhad sent individual notices and also advertised in the newspapers seeking action from themembers who have not claimed their dividends for seven consecutive years or more.
During the year an amount of *Rs* 1804429 being unclaimed dividend for the FinancialYear 2011-12 alongwith 28658 equity shares were duly transferred to the Fund establishedby the Central Government. Members /claimants whose shares and/or unclaimed dividend havebeen transferred to the IEPF Demat Account or the Fund as the case may be may claim theshares or apply for refund by making an application to the IEPF authority in Form IEPF-5(available on http://www.iepf.gov.in) along with requisite fee as decided by the IEPFauthority from time to time. The member/claimant can file only one consolidated claim in afinancial year as per the IEPF Rules.
Members are requested to ensure that they claim the dividends and shares referredabove before they are transferred to the said Fund. Details of shares/shareholders inrespect of which dividend has not been claimed are provided on our website atwww.selanoil.com. The shareholders are encouraged to verify their records and claim theirdividends of all the earlier seven years if not claimed.
|Year ||Amount ||Due date for transfer of unclaimed/ unpaid amount of Dividend to IEPF |
|2012 - 13 ||1762570 ||07 April 2020 |
|2013 14 ||1567280 ||06 April 2021 |
|2014 15 ||1567055 ||06 April 2022 |
|2015 16 ||1626385 ||10 April 2023 |
|2016 17 ||2090215 ||09 April 2024 |
|2017 18 ||1540520 ||25 March 2025 |
|2018 - 19 ||1203475 ||23 February 2026 |
Buyback Of Equity Shares
The Board of Directors at its meeting held on 27 December 2018 unanimously approved theBuyback of fully paid-up equity shares of
*Rs* 10/- each (hereinafter referred to as "Buyback") at a price notexceeding
Rs 300/- per equity share payable in cash upto an aggregate amount not exceeding *Rs*25 crores representing approximately 8.66 % of the Company's total paid-up Equity Capitaland Free Reserves as on 31 March 2018.
Pursuant to the aforesaid Buyback offer the Company had made a Buy Back of 570000equity shares upto 31 March 2019 of which 500000 equity shares were extinguished as at 31March 2019 and remaining 70000 equity shares were extinguished in the month of April2019. Consequent to the Buyback the paid-up equity share capital of the Company as on 31March 2019 has been reduced to 1.59 crores equity shares of *Rs* 10/- each. The BuybackCommittee constituted by the Board oversees all matters pertaining to the Buyback ofequity shares of the Company.
Meetings of the Board & Committees
Please refer the Corporate Governance Report of the Annual Report.
Declaration of Independence by Directors and statement on compliance of Code of Conduct
Declaration given by Independent Directors meeting the criteria of Independence asprovided in section 149(6) of the Companies Act 2013 and regulation 25(8) of the SEBI(LODR) Regulations 2015 is received and taken on record. The Independent Directors havecomplied with Code for Independent Directors prescribed in Schedule IV of the Act.
Directors Responsibility Statement
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard of Directors do hereby confirm that in the preparation of the Annual Accounts theapplicable Accounting Standards have been duly complied with and the Directors haveselected the necessary accounting policies and applied them consistently. Judgments /estimates have been made that are evenhanded and prudent so as to give an accurate andrational view of the affairs of the Company at the end of the financial year and of theprofit or loss of the Company for that period. The Directors have also taken proper andsufficient care for the maintenance of adequate accounting records in accordance with theprovisions of Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities and that the Directors haveprepared the annual accounts on a going concern basis. The Directors have laid downinternal financial controls to be followed by the Company and such Internal financialcontrols are adequate and operating effectively. Lastly the Directors have devised propersystems to ensure compliance with the provisions of all applicable laws and such systemswere adequate and operating effectively.
Policy on Directors' Appointment and Remuneration
Considering the requirement of skill set on the Board eminent people having anindependent standing in their respective field / profession and who can effectivelycontribute to Company's business and Policy decisions are considered by Nomination andRemuneration Committee for appointment as Independent Director on the Board. The Committeeconsiders ethical standards of integrity qualification expertise and experience of theperson for appointment as Director and is not disqualified under Companies Act 2013 andrules made thereunder and accordingly recommend to the Board his / her appointment.Remuneration to Whole-Time Director is governed under the relevant provisions of CompaniesAct 2013 and rules made thereunder. Independent/ Non-Executive Directors excludingPromoter Directors are paid sitting fees for attending the meetings of the Board /Committees thereof.
The Nomination and Remuneration Committee recommends the remuneration of Directors andKey Managerial Personnel which is approved by the Board of Directors subject to approvalof shareholders where necessary. The level and composition of remuneration so determinedshall be reasonable and sufficient to attract retain and motivate Directors and SeniorManagement to run the Company. The objective and broad framework of the RemunerationPolicy is to consider and determine the remuneration based on the fundamental principlesof payment for performance for potential and for growth. The Nomination and RemunerationPolicy as approved by the Board may be accessed on Company's website at www.selanoil.com.The Board considers the Nomination and Remuneration Committee's recommendations and takesappropriate decision.
Contracts / Arrangements with Related Parties
All the related party transactions are entered on arm's length basis in the ordinarycourse of business and are in compliance with the applicable provisions of the CompaniesAct 2013 and the SEBI (LODR) Regulations 2015. Details of all related party transactionsare reported to the Audit Committee for scrutiny / review and referred for approval of theBoard on a quarterly basis. There are no materially significant related party transactionsmade by the Company with Promoters Directors or KMP etc. which may have potentialconflict with the interest of the Company at large which warrants the approval ofshareholders. Accordingly the disclosure of related party transactions as required underSection 134 (3)(h) of the Companies Act 2013 in Form AOC-2 is not applicable to theCompany. Omnibus approval is obtained for the transactions which are foreseen andrepetitive in nature. Transactions with related parties are conducted in a transparentmanner with the interest of the Company as utmost priority. Details of such transactionsare given in the accompanying Financial Statements. The Company's policy on Related PartyTransactions is available at our website www.selanoil.com.
Whistle Blower Policy
The Company has adopted a Vigil Mechanism / Whistle Blower Policy to provide a formalmechanism to the Directors and employees to report their concerns about unethicalbehavior actual or suspected fraud or violation of the Company's Code of Conduct orPolicy. This Policy provides for adequate safeguards against victimization of employeeswho avail of the mechanism and also provides for direct access to the Chairman of theAudit Committee. It is affirmed that no personnel of the Company has been denied access tothe Audit Committee. This policy is available on the Company's website atwww.selanoil.com.
Risk Management is a formal and disciplined practice for addressing risk. Selan has inplace comprehensive risk assessment and minimization procedures which are reviewed byBoard periodically. The objective of risk management in the Company is to act as anenabler in maintaining its knowledge edge sustaining and expanding the business beingcompetitive and ensuring execution of projects within budgeted cost time and qualityresulting in improved turnover and profitability. The Company has laid down a well definedrisk management mechanism covering the risk mapping and trend analysis risk exposurepotential impact and risk mitigation process. It includes identifying risks assessingtheir probabilities and consequences developing management strategies and monitoringtheir state to maintain situational awareness of changes in potential threats.
In compliance with the provisions of the Companies Act 2013 and Regulation 17(10) ofthe SEBI (LODR) Regulations 2015 the Board has carried out an Annual PerformanceEvaluation of its own performance Directors individually and that of its Committees.During the year a Separate Meeting of Independent Directors was held to assess theperformance of Non-Independent Director the Chairperson of the Company as well as theBoard as a whole. Performance Evaluation is based on their contribution to Company'sobjectives and plans efficient discharge of their responsibilities participation inBoard / Committee meetings and other relevant parameters.
Board of Directors and KMP
During the year under review Mr. N. Sethi President & CEO resigned effective 15January 2019. The Company expresses its appreciation to Mr. Sethi and wishes him the bestfor the future.
With effect from 01 April 2019 the Board of Directors have appointed Mr. Vijay Kirpalas Chief Financial Officer of the Company in place of Mr. A. K. Maurya. Ms. PoojaAgnihotri has been appointed as Company Secretary and Compliance Officer with effect from20 May 2019 in place of Ms. Meenu Goswami. The Board places on record itsappreciation for the services rendered by Ms. Goswami.
M/s J. A. Martins & Co. Chartered Accountants (FRN:010860N) Statutory Auditors ofthe Company were appointed in the 32nd AGM to hold office until the conclusionof 37th AGM. There are no qualifications or reservations or adverse remarks orfrauds reported by the Auditors in their Report.
In terms of Section 148 of the Companies Act 2013 the Company is required to have theaudit of its cost accounting records conducted by a Cost Accountant. The Board ofDirectors have on the recommendation of Audit Committee approved the appointment of Mr.R. Krishnan Cost Accountant (Membership No. 7799) as the Cost Auditor of the Company forthe Financial Year 2019-20 at a remuneration of *Rs* 120000/- per annum. Theproposed remuneration of the Cost Auditor shall be ratified by the members in the ensuingAGM. The Cost Audit for the year ended 31 March 2018 was carried out by Mr. R. Krishnanand the report was filed on 23 August 2018. There are no qualifications or reservations oradverse remarks or frauds reported by the Auditors in their Cost Audit Report.
The Board of Directors of the Company had appointed M/s Nityanand Singh & Co. (CP: 2388) Company Secretaries for Secretarial Audit of the Company for financial year 2018-19. In terms of provisions of section 204(1) of the Companies Act 2013 a SecretarialAudit Report forms part of this Annual Report as Annexure-A. There are no qualificationsor reservations or adverse remarks or frauds reported by the Auditors in their SecretarialAudit Report.
In compliance with the provisions of Section 138 of the Companies Act 2013 M/s V.Sankar Aiyar & Co. (FRN :109208W) Chartered Accountants were appointed as InternalAuditors for the Financial Year 2018-19 to conduct the internal audit of the functions andactivities of the Company. They have submitted their Report to the Chairman of the AuditCommittee and this was further reviewed by the Management and taken on record.
Corporate Governance Report
Corporate Governance stems from the belief and realization that corporate citizenshiphas a set of responsibilities which must be fulfilled for a company to progress andsucceed over the long term. In compliance with the SEBI (LODR) Regulations 2015Management Discussion and Analysis and a Report on Corporate Governance alongwithCertificate from Auditors regarding compliance of conditions of Corporate Governance isannexed to Directors' Report. A declaration by the Manager regarding the compliance withthe Code of Conduct also forms part of this Annual Report.
Relevant Extract of the Annual Return is given in Annexure-B to this Report. A copy ofthe Annual Return is placed on the website of the Company at www.selanoil.com.
Loans Guarantees or Investments
The Company has not given any loan or guarantee or provided securities during the yearunder report attracting the provisions of Section 186 of the Companies Act 2013 howeverdetails of Investments covered under the provisions of Section 186 of the Companies Act2013 form part of the notes to the Financial Statements provided in this Annual Report.
The Company has not accepted any deposits during the year under report nor did anydeposits remain unpaid or unclaimed at the end of the year.
Internal Financial Controls and their adequacy
As per Section 134(5)(e) of the Companies Act 2013 the Directors have an overallresponsibility for ensuring that the Company has implemented robust system and frameworkof Internal Financial Controls. This provides the Directors with reasonable assuranceregarding the adequacy and operating effectiveness of controls with regard to reportingoperational and compliance risks. The Company has devised appropriate systems andframework including proper delegation of authority policies and procedures effective ITsystems aligned with business requirements risk based internal audits risk managementframework and whistle blower mechanism. These are routinely tested and certified byStatutory as well as Internal Auditors. The Audit Committee evaluates the internalfinancial control systems periodically.
Significant and Material orders passed by the Regulators Courts Tribunals Statutoryor Quasi- Judicial bodies
No significant or material orders were passed by the Regulators or Courts or Tribunalsor Statutory or Quasi- Judicial bodies which impacts the going concern status andCompany's operations in future.
SELAN has always believed that appropriate standard of conduct should be maintained bythe employees in their conduct and that there should be a safe indiscriminatory andharassment free (including sexual harassment) work environment for every individualworking in the Company. SELAN's Policy on Prevention of Sexual Harassment of Womenat Workplace' is in line with the provisions of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and the Rules made thereunderwhich provides for protection against sexual harassment of women at workplace and forprevention and redressal of such complaints received by the Company. Internal ComplaintsCommittee has been set up to redress complaints if any received regarding sexualharassment. During the year under review the Company has not received any complaint ofsexual harassment from any of the woman employee of the Company.
The Audit Committee comprises of four members out of which three are Non-Executive andIndependent Directors including the Chairman. The Audit Committee's composition powersand role are included in Corporate Governance Report. All the recommendations made by theAudit Committee were accepted by the Board of Directors.
CEO / CFO Certification
Mr. R. Kapur Whole- Time Director and Mr. V. Kirpal CFO of the Company have certifiedto the Board that all the requirements of the SEBI (LODR) Regulations 2015 inter aliadealing with the review of Financial Statements and Cash Flow Statement for the year ended31 March 2019 transactions entered into by the Company during the said year theirresponsibility for establishing and maintaining internal control systems for financialreporting and evaluation of the effectiveness of the internal control systems and makingof necessary disclosures to the Auditors and the Audit Committee have been duly compliedwith.
Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo
The activities undertaken by your Company do not fall under the scope of disclosure ofparticulars under Section 134(3)(m) of the Companies Act 2013 to the extent where itrelates to the conservation of energy and technology absorption. Particulars with regardto foreign exchange outgo appear as point no. 50 of the Notes forming Part of theAccounts.
Material Changes and Commitments
There have not been any material changes and commitments affecting the financialposition of the Company between the end of the Financial year of the Company as on 31March 2019 and the date of this report.
Please refer to the Management Discussion and Analysis section of the Annual Report.
Pursuant to Buyback of equity shares of the Company the Company had made a Buy Back of570000 equity shares upto 31 March 2019 of which 500000 equity shares were extinguishedas at 31 March 2019 and remaining 70000 equity shares were extinguished in the month ofApril 2019. Consequent to the Buyback the paid-up equity share capital of the Company ason 31 March 2019 has been reduced from 1.64 crores to 1.59 crores equity shares of *Rs* 10/- each.
The Company has not issued any equity shares or preference shares or any securitieswhich carry a right or option to convert such securities into shares employee stockoptions debentures bonds or any non- convertible securities warrants etc.
Corporate Social Responsibility
The Company has in place CSR Policy in line with Schedule VII of the Companies Act2013 which is available at our Company's website www.selanoil.com. Selan iscommitted to driving societal progress while fulfilling its business objectives. Withsafety health and environment protection high on its corporate agenda Selan is committedto conduct business with a strong environmental conscience so as to ensure sustainabledevelopment safe work places and enrichment of life of employees clients and thecommunity. The Corporate Social Responsibility Committee comprises of five members out ofwhich four are Non- Executive and Independent Directors including the Chairman. Briefdetails about the CSR Policy developed and implemented by the Company on CSR initiativestaken during the year is given in Annexure-C to this Report.
Compliance with Secretarial Standards
The Company is in compliance with the applicable Secretarial Standards issued by theInstitute of Company Secretaries of India.
1. Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:(a) Issue of shares or other convertible securities. (b) Issue of equity shares withdifferential rights as to dividend voting or otherwise.
(c) Issue of equity shares (including sweat equity shares and employee stock options)to employees of the Company under any scheme. (d) Issue of debentures bonds warrants orany other non- convertible securities.
2. The Company does not have any subsidiaries. Hence Whole- time Director of theCompany did not receive any remuneration or commission during the year from any of itssubsidiaries.
3. The Company has not revised its Financial Statement and Report during the threepreceding financial years.
4. There are no applications filed for corporate insolvency process by a financial oroperational creditor or by the Company itself under the Insolvency and Bankruptcy Code2016 before the NCLT.
5. The Company has not obtained any credit rating from any credit rating agency.
6. Disclosures relating to Subsidiaries Associates and Joint Ventures NotApplicable.
7. The Company has not commenced any new business nor discontinued / sold or disposedoff its existing business.
8. Currently the Company operates in only one Business Segment that is Production ofCrude Oil and Natural Gas. There is no change in the status of the Company and financialyear.
9. The Company has not made any acquisition merger expansion modernization ordiversification and there is no development or acquisition or assignment of materialIntellectual Property Rights. 10. No material event has taken place which has impact onthe affairs of the Company.
11. During the financial year ended 31 March 2019 securities of the Company have notbeen suspended from trading on any of the Stock Exchanges where they are listed.
The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company is provided in Annexure -D.
Your Directors would like to express their earnest appreciation for the valuableefforts of every employee at all levels for their hard work dedication and commitmentwithout which the Company would not have been able to undertake the challenging targets inall areas of operations. The Company believes in empowering its employees through greaterknowledge team spirit and developing greater sense of responsibility. We are fortunate tohave such a team whose endeavors have laid a strong foundation for the success of theorganization as a whole. Your Directors also wish to place on record their deep sense ofappreciation for the committed services by all the employees of the Company. On behalf ofthe Company we wish to convey our appreciation to the Ministry of Petroleum and NaturalGas (MoPNG) Directorate General of Hydrocarbons (DGH) Ministry of Environment andForests (MoEF) Government of India and the Bankers of the Company for their continuoussupport cooperation and guidance. The Directors particularly wish to acknowledge andplace on record the continuous support and guidance of all the shareholders and moreimportantly for the confidence reposed in the Company's management.
For and on behalf of the Board
R. KAPUR Place : New Delhi
Chairman Date : 29 May 2019
(DIN : 00017172)