Notes to Accounts of SEL Manufacturing Company Ltd.

Mar 31, 2024

(f) Terms/rights, preference, restrictions attached to shares.

During the year 2020-21, the resolution plan has been approved by Hon''ble National Company LawTribunal, Chandigarh Bench vide its order dated 10th February, 2021 under the Insolvency and Bankrupty Code, 2016, the paid up equity share capital of the company was reduced and consolidated. Every shareholder holding 1000 equity share of Rs.10/- each got 1 equity share of Rs. 10/- and the fractional shares were allotted in favour of SBICAP Trustee Company Limited, acting as Trustee. As per the scheme of reduction and consolidation, 32,803,353 equity shares (new) were allotted in favour of financial creditors and resolution applicant.

Nature and Purpose of Reserves

(i) Securities Premium Account

Securities Premium account is created on recording of premium on issue of shares. The reserve s ha Ill be utilised in accordance with the provisions of the Companies Act, 2013.

(ii) Capital Reserve

Equity warrants issued in an earlier years on preferential basis, carrying an option to the holder of such warrants to execrised the option within 18 months from the date of allotment. The holders of equity warrants have not exercised their right of conversion within the stipulated period of 18 months from the date of allotment. Consequently, the said warrants stand forfeited and the application money received against warrants has been transferred to Capital Reserve.

(iii) Other Comprehensive Income

The company has elected to recognise changes in fair value of certain class of investments & amortization of borrowings in other comprehensive income. These fair value changes are accumulated within this reserve and shall be adjusted as per provisions of the Ind AS.

(iv) Retained Earnings

The same is created out of profits over the years and shall be utilized as per the provisions of the Act.

According to the approved resolution plan, the Bank of Maharashtra, the dissenting financial creditor, received an unsecured rupee term amounting to Rs. 1,867 lakhs in lieu of 0.01% Unlisted Non-Marketable Secured Non-Convertible Redeemable Debentures of Rs. 100/- each of Rs. 534 lakhs, Rs. 1,244 lakhs out of secured rupee term loan and Rs. 89 lakhs out of a short-term loan. The dissenting financial creditor will be paid on priority over assenting financial creditors on a deferred basis. Pursuant to the approved Resolution Plan, a corporate guarantee provided by the Company prior to the approval date shall stand extinguished without any further act, deed or action upon settlement of the claims of the financial creditors, who are beneficiaries of such guarantee. In respect of corporate guarantee, a portion of secured long term loan amounting to Rs. 1,598 lakhs attributable to the lenders as unsecured term loan.

**2,87,80,793 Nos. Unlisted Non-Marketable 0.01% Secured Non-Convertible Redeemable Debentures of Rs. 100/- each & 685,207 Nos. Unlisted Non-Marketable 0.01% Unsecured Non-Convertible Redeemable Debentures of Rs. 100/- each were issued to the financial creditors of the Company on a preferential basis and 2,514,898 Nos. non interest bearing Unsecured Non-Convertible Redeemable Debentures of Rs. 100/- each to Resolution Applicant in accordance with the resolution plan as approved by the Hon''ble NCLT Chandigarh Bench. Debentures are amortized over the term period at the interest rate applicable as State Bank of India''s MCLR per annum payable.

In addition to the existing securities available with the secured lenders, further Resolution Applicant pledged 8,946,369 equity shares of the Company held by them, in favour of lenders to secure the Long Term Loan, Short Term Loan and Non-Convertible Redeemable Debentures.

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Mar 31, 2018

1. Corporate Information

SEL Manufacturing Co. Limited (the Company) is a public company domiciled in India and is incorporated under the provisions of the Companies Act, applicable in India. Its shares are listed on the Bombay Stock Exchange and the National Stock Exchange. The Company is engaged in the manufacturing, processing & trading of yarns, fabrics, ready-made garments and towels. The registered office of the company is located at 274, G.T. Road, Dhandari Khurd, Ludhiana, Punjab.

*includes demand from tax authorities for various matters. In pursuance of the search conducted u/s 132(1) of the Income Act, 1961 assessments for the block period from Assessment Year 2008-09, 2009-10, 2012-13 and 201415 have been completed with no additional tax liability. However the income tax authorities have directed to initiate penalty proceedings in above said assessment orders. In respect of the assessment proceedings for the assessment years 2010-11, 2011-12 & 2013-14, the Department has raised demands aggregating to Rs. 28344.39 lakhs (which includes interest upto 30.01.17 and are further subject to penalty proceedings) by making some frivolous additions to the total income of the Company. The Company had filed the appeals against these additions before appropriate authorities and the Company is hopeful that it will get relief in appeal. Considering the facts of the matters, no provision is considered necessary by management with no additional tax liability.

2. The Company followed an aggressive growth path and had considerably grown its balance sheet, including debt. Due to the industry situation in general viz. slowdown and company specific issues such as growing debt, delayed realization of debtors, working capital shortfall, delay in project completion and cash flow mismatch, which had adversely affected the liquidity position of the company, the company was facing financial problems and finding difficulty in servicing its debt obligation. Therefore, it approached the lenders for restructuring its debts under Corporate Debt Restructuring (CDR) mechanism.

The Company''s proposal for restructuring of its debts was approved by Corporate Debt Restructuring Cell ("CDR Cell") vides 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 were as under:

a) Restructuring of repayment schedule for term loans under Technology Upgradation Funds Scheme (TUFS) and Non-TUFS Term Loans, reduction in interest rates, additional facilities in the form of Working Capital Term Loan (WCTL) & Funded Interest Term Loan (FITL).

b) The promoters to bring contribution equivalent to 25% of the sacrifice amount of by lenders. Accordingly, promoters have brought in an amount of Rs. 6,971 lakhs as 1% Redeemable, Non-Cumulative, Non-Convertible Preference Shares.

c) Lenders with the approval of CDR EG shall have the right to recompense the reliefs/sacrifices/waivers extended by respective CDR lenders as per the CDR guidelines. The recompense payable is contingent on various factors including improved performance of the Company and many other conditions, the outcome of which is currently materially uncertain. Tentative recompense amount comes to Rs. 12,951 lakhs.

However, the credit facilities envisaged and sanctioned under CDR package were not released by the lenders to the Company, which resulted in sub-optimum utilization of manufacturing facilities. Due to non-disbursement of funds the Company could not complete one of its spinning projects where substantial amount was already incurred. All this has led to adverse financial performance and erosion in net worth of the Company. Also the company has been facing cash flow mismatch and is not able to serve debt obligations as per the terms of CDR package sanctioned earlier.

Since, the Company was finding it difficult to serve its debt obligations, the Company has requested its lenders for a second/deep restructuring of its debts. Considering the state of art manufacturing facilities of the Company, most modernized technology, skilled labor force, professional management and inherent viability of the Company, the lenders had in-principle agreed for second/deep restructuring of the debts. Pending discussions with the lenders, State Bank of India in its capacity as financial creditor has filed a petition on 12th October, 2017 under "Insolvency and Bankruptcy Code, 2016" (IbC) with Hon''ble National Company Law Tribunal, Chandigarh Bench (NCLT). On 11th April, 2018, the NCLT vide it''s order of even date admitted the said petition and Corporate Insolvency Resolution Process (CIRP) has been initiated. Mr. Navneet Kumar Gupta having Registration No.IBBI/IPA-001/IP-P00001/2016-17/10009 was appointed as Interim Resolution Professional (IRP) vide order dt. 25th April, 2018 and the affairs, business and assets are being managed by the Interim Resolution Professional (IRP).The Company has preferred an appeal against the admission of petition and appointment of IRP with National Company Law Appellate Tribunal (NCLAT).

The Corporate Insolvency Resolution Process (CIRP) has since been kept in abeyance vide order dt. 22nd June, 2018 of Hon''ble High Court of Punjab & Haryana. Accordingly, the Company has prepared these financial statements on the basis of going concern assumption.

Due to non disbursement of credit facilities the Company had suffered operational losses as well as capital losses. Therefore, the Company has presented before the Adjudicating Authority counter claim & claim of set off against the banks.

3. The majority of secured lenders have stopped charging interest on borrowings, since the accounts of the Company have been categorized as Non Performing Asset. Further the Corporate Insolvency Resolution Process has been initiated under "Insolvency and Bankruptcy Code, 2016" (as referred in Note No. 37 above). In view of the above, the Company has stopped providing interest accrued and unpaid effective 1st April, 2016 in its books. The amount of such accrued and unpaid interest, calculated according to the CDR term, not provided for is estimated at Rs. 54,084 lakhs (Previous Year Rs. 35,901 lakhs) for the year ended 31st March, 2018 and the same has not been considered for preparation of the financial statements for the year ended 31st March 2018. Due to non provision of the interest expense, net loss for the year ended 31st March, 2018 is reduced by Rs. 54,084 lakhs. Further the Financial Liability is reduced by Rs. 89,985 lakhs and correspondingly the equity is increased by the same amount.

4. The balances of Trade Receivables, Loan and Advances, Deposits and Trade Payables are subject to confirmation/reconciliation and subsequent adjustments, if any. During the year, e-mails/letters have been sent to various parties with a request to confirm their balances as on 31st March, 2018 out of which few parties have confirmed their balances directly to the auditors or to the company.

5. Exceptional Items of Rs. 132,495.53 lakhs for the year includes:

a. During the year the Company has made an allowance for trade receivables under Expected credit losses (ECL) Method aggregating to Rs. 88093.33 lakhs in compliance of Ind AS 109 which is charged to Statement of Profit & Loss as an exceptional item. Though the company strongly believes that these trade receivables are fully recoverable.

b. The Company has given capital and trade advances amounting to Rs. 3,583.87 lakhs to the suppliers that are outstanding for a long time. In view of reduction in activities, the materials and services could not be called from such suppliers. In compliance of Ind AS 36 impairment for capital and trade advances amounting to Rs. 3,583.87 lakhs which is charged to Statement of Profit & Loss as an exceptional item. Though the company strongly believes that these advances are fully recoverable/adjustable.

c. Loss on sale of inventories, i.e. Raw Material, Work in Progress, Finished Goods, amounting Rs. 40710.65 lakhs had arisen due to sale of inventories identified as non-moving, slow moving, obsolete and damaged inventory during the year which was below the carrying values/cost of inventories resulting in an exceptional loss on sales.

6. There are no long term contracts, as on the date of balance sheet, including derivative contracts for which there are any material foreseeable losses.

7. The company had given financial guarantee to the extent of Rs 201,324 lakhs to the bankers of its subsidiary namely SEL Textiles Limited, to secure the credit facilities availed by it. The said financial guarantee amounting Rs. 201,324 lakhs (consisting of principal outstanding and interest thereon upto 31st March 2018 calculated as per terms of MRA with CDR lenders of subsidiary company) and has been duly recognised in financial statements as required by Ind AS 109. The said guarantee has been invoked by the bankers before initiation of Corporate Insolvency Resolution Process.

8. The company had recognized prior period errors in respect of measurement of unsecured loans and liability component of compound financial instrument in compliance with Ind AS 8. The said elements were measured at cost in previous year which is now measured at amortized cost and the same have been recasted in the financial statements.

9. Segment Information: Products and services from which reportable segments derive their revenues: In accordance with Ind AS 108 "Operating Segments", the chief operating officer (COO) of the Company reported that the company is engaged in the business of manufacturing &processing of textile products i.e. a single business and all business activities revolve around this segment.

Geographical information: The Company operates in two principal geographical areas - India and outside India.

The Company''s revenue from continuing operations from external customers by location of operations and information about its non-current assets* by location of assets are detailed below.

b. Provident Fund: During the year the company has recognized an expense of Rs. 538.80 lakhs (Previous Year Rs. 676.95 lakhs) towards provident fund scheme

c. Leave Encashment: During the year the company has recognized an expense of Rs. 200.03 lakhs (Previous Year Rs. 99.51 lakhs).

The company has assessed that sufficient taxable profits would not be available in near future to utilize carried forward MAT credit entitlement of Rs 5,533.60 lakhs and deferred tax assets of Rs. 51,212.91 lakhs and the company has written down both the above tax assets. As a result, tax expenses increased by Rs. 56,746.51 lakhs included Rs.1286.97 lakhs through OCI. Further deferred tax asset in respect of unused tax losses amounting to Rs. 57,299.93 lakhs as of 2018, respectively have not been recognized by the Company.

10. The foreign branch of the company in United Arab Emirates is closed with effect from December 31st, 2017.

11. Financial Risk Management

The Company''s principal financial liabilities comprises of loans and borrowings, trade and other payables, and other current liabilities. The main purpose of these financial liabilities is to raise finance for the Company''s operations. The Company has loans and receivables, trade and other receivables, and cash and short-term deposits that arise directly from its operations. The management of the company has set out the company''s overall business strategies and its risk management policy. The Company''s overall financial risk management program seeks to minimize potential adverse effects on the financial performance of the company. The company policies include financial risk management policies covering specific areas, such as market risk (including foreign exchange risk, interest risk, liquidity risk and credit risk). Periodic reviews are undertaken to ensure that the company''s policy guidelines are complied with.

There has been no change to the company''s exposure to the financial risks or the manner in which it manages and measures the risk. The company is exposed to the following risks related to financial instruments. The company has not framed formal risk management policies; however, the risks are monitored by management on a continuous basis. The company does not enter into or trade in financial instruments, investment in securities, including derivative financial instruments, for speculative or risk management purposes.

The Board of Directors reviews and agrees policies for managing each of these risks which are summarized below:

(a) Market Risk: Market risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: interest rate risk, currency risk and other price risk, such as equity risk. Financial instruments affected by market risk include loans & borrowings and deposits. The sensitivity analyses in the following sections relate to the position as at 31 March 2018 and 31 March 2017.

The following assumption have been made in calculating the sensitivity analyses:

i) The sensitivity of the statement of comprehensive income is the effect of the assumed changes in interest rates on the net interest income for one year, based on the average rate of borrowings held during the year ended 31 March 2018, all other variables being held constant. These changes are considered to be reasonably possible based on observation of current market conditions.

(b) Foreign Currency Risk Management: The Company undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations arise.

(c) Liquidity Risk Management: The Company''s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Company has outstanding bank borrowings. The Company is passing through a phase of liquidity stress and there is a mismatch in cash flows. Due to this, the capacities of the Company are running at sub-optimal level. The Company is at an advanced stage of negotiations with the banks for restructuring of its debt which would correct the cash flow mismatch. The Company believes that post restructuring, the Company would be able to generate enough cash inflows to meet its working capital requirements in the medium and long run.

The company manages liquidity risk by maintaining adequate reserves, continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

(d) Credit Risk Management: Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial loss to the company. Credit risk has always been managed by the company through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to which the company grants credit terms in the normal course of business. On account of adoption of Ind AS 109, the company uses expected credit loss model to assess the impairment loss or gain. The Company has exposure to credit risk from trade receivable balances on sale of Readymade Garments, Towel and Yarns. The Company has entered into short-term agreements with companies incorporated in overseas to sell the Readymade Garments, Towel and Yarns. Therefore the Company is committed, in the short term, to sell Readymade Garments, Towel and Yarns to these customers and the potential risk of default is considered low. For other customers, the Company ensures concentration of credit does not significantly impair the financial assets since the customers to whom the exposure of credit is taken are well established and reputed industries engaged in their respective field of business. The creditworthiness of customers to which the Company grants credit in the normal course of the business is monitored regularly.

(e) Capital Risk Management: The Company''s objectives when managing capital is to safeguard the Company''s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. The director''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business.

No Changes were made in the objectives, policies or processes during the years ended 31st March 2018 and 31st March 2017.

12. Previous year amounts have been reclassified wherever necessary and conform to Ind AS presentation.

13. Note No. 1 to 53 forms integral part of balance sheet and statement of profit /loss.

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Mar 31, 2016

*includes demand from tax authorities for various matters. The Company/tax department has preferred appeals on these matters and the same are pending with various appellate authorities. Considering the facts of the matters, no provision is considered necessary by management

1. The related party disclosure in accordance with Accounting Standard-18 “Related Party Disclosures” issued by the Institute of Chartered Accountants of India is given below:-

Sr. No. | Name of Related Party Relationship ~

1 S. E. Exports Subsidiary Partnership Firm

2 SEL Textiles Ltd. Subsidiary Company

3 SEL Aviation Pvt. Ltd. Subsidiary Company

4 *SEL Textile Corporation Subsidiary Company

_5__**Omega Hotels Ltd.__Subsidiary Company_

6__*Silverline Corporation Ltd.__Fellow Subsidiary Company_

7 *Mr. R.S.Saluja Mr. Neeraj Saluja

Mr. Dhiraj Saluja Key Management Personnel

Mr. Navneet Gupta

__Mr. V.K. Goyal__

8 *Mrs. Sneh Lata Saluja

*Mrs. Ritu Saluja Relatives of KMP

__*Mrs. Reema Saluja__

9 *Shiv Narayan Investments Pvt. Ltd. Enterprises over which key management personal *Saluja International and relatives of such personal is able to exercise

__Rythm Textiles & Apparels Park Ltd.__significant influence_

*No transactions have taken place during the year.

** cease to exist during the year.

‘excluding all taxes

10. Earnings Per Share

The calculation of Earnings per Share as disclosed in the Statement of Profit & Loss has been in accordance with Accounting Standard (AS)-20 on" Earnings per Share’’ issued by the Institute of Chartered Accountants of India.

11. The balances of Trade Receivables, Loan and Advances, Deposits and Trade Payables are subject to confirmation/reconciliation and subsequent adjustments if any. During the year, e-mails have been sent to various parties with a request to confirm their balances as on 31st March, 2016 out of which few parties have confirmed their balances direct to the auditors or to the company.

12. In opinion of the Board, all the current assets, loans & advances have the value on realization in the ordinary course of business at-least equal to amount at which they are stated.

13. During the year the Company sold 97.85% of its stake in Omega Hotels Limited and thus Omega Hotels Limited cease to be subsidiary of the Company. The loss on sale of investment amounting to Rs. 67,436,054/- has been shown under the exceptional items.

14. There are no long term contracts, as on the date of balance sheet, including derivative contracts for which there are any material foreseeable losses.

15. Segment Reporting: Segment Information as required by Accounting Standard (AS)-17 on Segment Reporting, issued by Companies (Accounting Standards) Rules 2014, has been compiled on the basis of the consolidated financial statements and is disclosed in the notes to accounts forming part of the consolidated financial statements in accordance with the above standard. Therefore segment information in respect of separate financial statements of the company is not being disclosed in the stand alone financial statements.

16. The Company followed an aggressive growth path in the last eleven years, it had considerably grown its balance sheet, including debt. Due to the industry situation in general viz. slowdown and company specific issues such as growing debt, delayed realization of debtors, working capital shortfall, delay in project completion and cash flow mismatch, which had adversely affected the liquidity position of the company, the company was facing financial problems and finding difficulty in servicing its debt obligation. Therefore, it approached the lenders for restructuring its debts under Corporate Debt Restructuring (CDR) mechanism.

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 were as under:

a) Restructuring of repayment schedule for term loans under Technology Up gradation Funds Scheme (TUFS) and Non-TUFS Term Loans, reduction in interest rates, additional facilities in the form of Working Capital Term Loan (WCTL) & Funded Interest Term Loan (FITL).

b) The promoters to bring contribution equivalent to 25% of the sacrifice amount of by lenders. Accordingly, promoters have brought in an amount of Rs. 69.71 crores as 1% Redeemable, Non-Cumulative, Non-Convertible Preference Shares .

c) Lenders with the approval of CDR EG shall have the right to recompense the reliefs/sacrifices/waivers extended by respective CDR lenders as per the CDR guidelines. The recompense payable is contingent on various factors including improved performance of the Company and many other conditions, the outcome of which is currently materially uncertain. Tentative recompense amount comes to Rs. 129.51crores. However, the credit facilities envisaged and sanctioned under CDR package were not released by the lenders to the Company, which resulted in sub-optimum utilization of manufacturing facilities. Due to non-disbursement of funds the Company could not complete one of its spinning projects where substantial amount was already incurred. All this has led to adverse financial performance and erosion in net worth of the Company. The company has accumulated losses of Rs. 425.77 crores as at March 31, 2016 resulting net worth reduced to Rs.755.67 crores. Also the company is facing cash flow mismatch and is not able to serve debt obligations as per the terms of CDR package sanctioned earlier.

17. Previous year amounts have been reclassified wherever necessary to conform with current year presentation.

18. Consequent to the enactment of the Companies Act, 2013 (the Act) and its applicability for accounting periods commencing from April 1, 2014, the Company has recalculated the remaining useful life of fixed assets in accordance with the provisions of Schedule II to the Act. During FY 2014-15, fixed assets which have already completed their useful life in terms of Schedule II of the Act, the carrying value (net of deferred tax) of Rs. 18,784,495/- of such assets as at April 1, 2014 has been adjusted to Retained Earnings and in case of other fixed assets the carrying value (net of residual value) is being depreciated as per method over the re-calculated remaining life. The depreciation expense charged for the year ended March 31, 2015 would have been lower by Rs. 87.51 crores, had the Company continued with the previously prescribed depreciation rates as per Schedule-XIV of the Companies Act, 1956.

19. Capital Work in Progress includes, Project and Pre-operative Expenses pending allocation to fixed assets:

b. Provident Fund

During the year the company has recognized an expense of Rs. 72,532,791/- (Previous Year Rs. 68,305,367/-) towards provident fund scheme.

c. Leave Encashment

During the year the company has recognized an expense of Rs. 12,480,929/- (Previous Year Rs. 20,829,055/-).

20. During the year, the company has changed its accounting policy of recognizing liability for leave with wages from accrual valuation to actuarial valuation. Had the company followed its previous policy then the loss for the period, accumulated losses as well as liabilities as shown in the balance sheet would have been more by Rs. 351,590/-.

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Mar 31, 2015

1. The outstanding balances as at March 31, 2015 in respect of some of the Trade Receivables and trade payables are subject to confirmation from the respective parties and consequent reconciliation/adjustments arising there from, if any. The management however, does not expect any material difference affecting the financial statements for the year.

2. In opinion of the Board, all the current assets, loans & advances have the value on realization in the ordinary course of business at-least equal to amount at which they are stated.

3. Consequent to the enactment of the Companies Act, 2013 (the Act) and its applicability for accounting periods commencing from April 1, 2014, the Company has recalculated the remaining useful life of fixed assets in accordance with the provisions of Schedule II to the Act. In case of fixed assets which have already completed their useful life in terms of Schedule II of the Act, the carrying value (net of deferred tax) of Rs. 18,784,495/- of such assets as at April 1, 2014 has been adjusted to Retained Earnings and in case of other fixed assets the carrying value (net of residual value) is being depreciated as per method over the re-calculated remaining life. The depreciation expense charged for the year ended March 31, 2015 would have been lower by Rs. 87.51 crores, had the Company continued with the previously prescribed depreciation rates as per Schedule-XIV of the Companies Act, 1956.

4. There are no long term contracts as on 31.03.2015 including derivative contracts for which there are any material foreseeable losses.

5. During the year 2013-14 the Company had identified non-moving, slow moving, obsolete and damaged inventory in finished goods. An aggregate amount of Rs. 180.94 crores was recognizes as reduction in value of inventories due to write down thereof to net realizable value by charging to Profit & Loss Statement as an exceptional item.

6. Earnings Per Share

The calculation of Earnings per Share as disclosed in the statement of Profit & Loss has been in accordance with Accounting Standard (AS)-20 on "Earning per Share" issued by the Institute of Chartered Accountants of India.

7. Segment Reporting

Segment Information as required by Accounting Standard (AS)-17 on Segment Reporting, issued by Companies (Accounting Standards) Rules 2014, has been compiled on the basis of the consolidated financial statements and is disclosed in the notes to accounts forming part of the consolidated financial statements in accordance with the above standard. Therefore segment information in respect of separate financial statements of the company is not being disclosed in the stand alone financial statements.

8. The Company followed an aggressive growth path in the last ten years, it had considerably grown its balance sheet, including debt. Due to the industry situation in general viz. slowdown and company specific issues such as growing debt, delayed realization of debtors, working capital shortfall, delay in project completion and cash flow mismatch, which had adversely affected the liquidity position of the company, the company was facing financial problems and finding difficulty in servicing its debt obligation. Therefore, it approached the lenders for restructuring its debts under Corporate Debt Restructuring (CDR) mechanism.

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 as under:

a) Restructuring of repayment schedule for term loans under Technology Upgradation Funds Scheme (TUFS) and Non-TUFS Term Loans, reduction in interest rates, additional facilities in the form of Working Capital Term Loan (WCTL) & Funded Interest Term Loan (FITL).

b) The promoters to bring contribution equivalent to 25% of the sacrifice amount of by lenders. Accordingly, promoters have brought in an amount of Rs. 69.71 crores as 1% Redeemable, Non-Cumulative, Non-Convertible Preference Shares.

c) Lenders with the approval of CDR EG shall have the right to recompense the reliefs/sacrifices/waivers extended by respective CDR lenders as per the CDR guidelines. The recompense payable is contingent on various factors including improved performance of the Company and many other conditions, the outcome of which is currently materially uncertain. Tentative recompense amount comes to Rs. 129.51 crores.

9. Prior year amounts have been reclassified wherever necessary to conform with current year presentation.

10. During the year the company has transferred the unclaimed dividend for the year 2007-08 amounting to Rs. 28,348/- to the Investor Education and Protection Fund.

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Mar 31, 2014

Corporate Information

SEL Manufacturing Co. Limited is a public company incorporated in India under the provisions of the Companies Act, 1956. The Company is engaged in the manufacturing, processing & trading of yarn, fabric, readymade garments and towel.

1. Contingent Liabilities

There are contingent liabilities in respect of the following items: No outflow is expected in view of the past history relating to these items:-

(Rs. In Crores)

Particulars March 31, 2014 March 31, 2013

i) Export Bills Discounted 43.65 127.09

ii) Estimated amount of capital contracts remaining to be executed net of advances 41.51 71.95

iii) Guarantees given by the Company on behalf of SEL Textiles Ltd. (Subsidiary Company) 1487.55 1487.55

iv) Income Tax* 0.53 -

v) Performance Guarantees issued for export obligations 495.61 1088.43

vi) Others (Net of deposit of Rs. 0.07 crores (Previous Year Rs. 0.07 crores) against the said demand, contested in appeal. 0.07 0.07

(vi) During the year under audit, the Income Tax authorities carried out search & 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 books for additional liability (amount presently not ascertainable) for tax, interest and penalty, if any.

''includes demand from tax authorities for various matters. The Company/tax department has preferred appeals on these matters and the same are pending with various appellate authorities. Considering the facts of the matters, no provision is considered necessary by management.

2. 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.

3. The outstanding balances as at March 31, 2014 in respect of some of the Trade Receivables and trade payables are subject to confirmation from the respective parties and consequent reconciliation/adjustments arising there from, if any. The management however, does not expect any material difference affecting the financial statements for the year.

4. In opinion of the Board, all the current assets, loans & advances have the value on realization in the ordinary course of business at-least equal to amount at which they are stated.

5. There are no outstanding forward exchange contracts.

6. Segment Reporting

Segment Information as required by Accounting Standard (AS)-17 on Segment Reporting, issued by Companies (Accounting Standards) Rules 2006, has been compiled on the basis of the consolidated financial statements and is disclosed in the notes to accounts forming part of the consolidated financial statements in accordance with the above standard. Therefore segment information in respect of separate financial statements of the company is not being disclosed in the stand alone financial statements.

7. The Company followed an aggressive growth path in the last ten years, it had considerably grown its balance sheet, including debt. Due to the industry situation in general viz. slowdown and company specific issues such as growing debt, delayed realisation of debtors, working capital shortfall, delay in project completion and cash flow mismatch, which had adversely affected the liquidity position of the company, the company was facing financial problems and finding difficulty in servicing its debt obligation. Therefore, it had approached the lenders for restructuring its debts under Corporate Debt Restructuring (CDR) mechanism. The Corporate Debt Restructuring (CDR) package will help the company in coming out of the financial problem and enable it to service debt/ interest obligations in terms of the package. A Joint Lenders Meeting (JLM) was held on November 06, 2013 wherein it was decided to refer the case to the Corporate Debt Restructuring (CDR) Forum to restructure the Company''s debt in order to get through the present phase of industry-wide liquidity crunch.

The Board of Directors of the Company in its Meeting held on November 14, 2013 had accorded its approval for restructuring of the debts of the Company under Corporate Debt Restructuring (CDR) Mechanism of the Reserve Bank of India. Corporate Debt Restructuring Empowered Group (CDREG) in its meeting held on February 17, 2014 admitted the Company under CDR.

8. The Company on June 9, 2012 had allotted 72,900,000 equity warrants on preferential basis, carrying an option to the holder of such warrants to subscribe to one equity share of Rs. 10 at a premium of Rs. 2 per share for every warrant held, which can be converted into equity shares within 18 months from the date of allotment i.e. anytime before December 8, 2013 in terms of SEBI (DIP) Guidelines read with SEBI (Issue of Capital & Disclosure Requirements) Regulation, 2009. The holders of equity warrants have not exercised their right of conversion within the stipulated period of 18 months from the date of allotment. Accordingly, the said warrants stand forfeited and the application money received of Rs. 21.87 crores received there against has been transferred to Capital Reserve.

9. Prior year amounts have been reclassified wherever necessary to conform with current year presentation.

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Mar 31, 2013

1. Corporate Information

SEL Manufacturing Co. Limited is a public company incorporated in India under the provisions of the Companies Act, 1956. The Company is engaged in the manufacturing, processing & trading of yarn, fabric, readymade garments and towel.

2. Contingent Liabilities

There are contingent liabilities in respect of the following items: No outflow is expected in view of the past history relating to these items:-

(Rs. In Crores)

Particulars March 31, 2013 March 31, 2012

(i) Export Bills Discounted 127.09 20.38

(ii) Estimated amount of capital contracts remaining to be executed net of advances 71.95 238.11

(iii) Guarantees given by the Company on behalf of SEL Textiles Ltd. (Subsidiary Company) 1487.55 1487.55

(iv) Performance Guarantees issued for export obligations 1088.43 1381.92

(v) Others (Net of deposit of Rs. 0.07 crores (Previous Year Rs. Nil crores) against the said demand, contested in appeal. 0.07 -

3. Earnings Per Share

The calculation of Earnings per Share as disclosed in the statement of Profit & Loss has been in accordance with Accounting Standard (AS)-20 on "Earning per Share" issued by Companies (Accounting Standards) Rules, 2006.

A statement on calculation of Basic & Diluted EPS is as under:

4. The outstanding balances as at 31st March, 2013 in respect of Sundry Debtors and Creditors are subject to confirmation from the respective parties and consequent reconciliation/adjustments arising there from, if any. The management however, does not expect any material variation.

5. In opinion of the Board, all the current assets, loans & advances have the value on realization in the ordinary course of business at-least equal to amount at which they are stated.

6. Expenses on issue of Global Depositary Receipts (GDRs) and increase in authorized capital are being adjusted against Securities Premium Account as permitted by the Section 78 of the Companies Act.

7. There are no outstanding forward exchange contracts.

8. Segment Information as required by Accounting Standard (AS)-17 on Segment Reporting, issued by Companies (Accounting Standards) Rules 2006, has been compiled on the basis of the consolidated financial statements and is disclosed in the notes to accounts forming part of the consolidated financial statements in accordance with the above standard. Therefore segment information in respect of separate financial statements of the company is not being disclosed in the stand alone financial statements.

9. The Company has purchased, through auction by Official Liquidator, the assets of a closed unit namely, Mangla Cotex Limited for Rs. 6.70 Crores. However, so far the Company has paid Rs. 1.675 Crores as advance for property, which has been shown under Capital Advances, and the possession of the same would be taken only after the confirmation of auction by the High Court.

10. The Company has issued Global Depositary Receipts (GDRs) at the rate of USD 19.6429 per GDR amounting to Rs. 241.64 crores (USD 43,214,380). The funds have been used for the purpose for which these were raised during the year.

11. The Company on June 9, 2012 had issued 72,900,000 warrants carrying an option to the holder of such warrants to subscribe to one equity share of Rs. 10 at a premium of Rs. 2 per share for every warrant held, which can be converted into equity shares within 18 months from the date of allotment i.e. anytime before December 8, 2013. Against these outstanding warrants as on March 31, 2013, an amount of Rs. 21.87 crores i.e. 25% of Rs. 12 per warrant has been received by the Company.

12. Capital Work in Progress includes, Project and Pre-operative Expenses pending allocation to fixed assets:

13. The summarized position of Post-Employment benefits and long term employee benefits recognized in the Profit & Loss Account and Balance Sheet as required in accordance with Accounting Standard (AS15) are as under:

a. Gratuity

The principal assumptions used in actuarial valuation of gratuity are as below:

b. Provident Fund

During the year the company has recognized an expense of Rs. 59,055,884/- (Previous Year Rs. 34,706,164/-) towards provident fund scheme.

c. Leave Encashment

During the year the company has recognized an expense of Rs. 14,435,050/- (Previous Year Rs. 5,216,533/-).

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Mar 31, 2012

1. Corporate Information

SEL Manufacturing Co. Limited is a public company incorporated in India under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange and National Stock Exchange. The Company is engaged in the manufacturing, processing & trading of yarn, fabric, readymade garments and towel.

2. Contingent Liabilities

There are contingent liabilities in respect of the following items: No outflow is expected in view of the past history relating to these items:-

(Rs.In Crores) Particulars March 31,2012 March 31,2011

(i) Export Bills Discounted 20.38 18.81

(ii) Estimated amount of capital contracts remaining to be

executed net of advances 238.11 38.33

(iii) Income Tax demand for AY 2005-06 to AY 2009-10 (Previous Year AY 2004-05 to AY 2008-09) net of deposit 0 1.16

of Rs. Nil crores (Previous year Rs. 1.91 crores) against the said demand, contested in appeals.

(iv) Guarantees given by the Company on behalf of SEL

Textiles Ltd. (Subsidiary Company) 1487.55 316.15

(v) Performance Guarantee 1381.92 1534.75

3. Earnings Per Share

The calculation of Earnings per Share as disclosed in the statement of Profit & Loss has been in accordance with Accounting Standard (AS)-20 on "Earning per Share" issued by Companies (Accounting Standards) Rules, 2006.

4. Debit or Credit balances on whatsoever account are subject to confirmation from parties; as such their effect on profit and loss account cannot be reflected.

5. In opinion of the Board, all the current assets, loans & advances have the value on realization in the ordinary course of business at-least equal to amount at which they are stated.

6. Expenses on issue of QIBs and increase in authorized capital are being adjusted against Securities Premium Account as permitted by the Section 78 of the Companies Act.

7. There are no outstanding forward exchange contracts.

8. Segment Reporting

Segment Information as required by Accounting Standard (AS)-17 on Segment Reporting, issued by Companies (Accounting Standards) Rules 2006, has been compiled on the basis of the consolidated financial statements and is disclosed in the notes to accounts forming part of the consolidated financial statements in accordance with the above standard. Therefore segment information in respect of separate financial statements of the company is not being disclosed in the stand alone financial statements.

9. The Company has purchased, through auction by Official Liquidator, the assets of a closed unit namely, Mangla Cotex Limited for Rs. 6.70 Crores. However, so far the Company has paid Rs. 1.675 Crores as advance for property, which has been shown under Capital Work in Process & Advances, and the possession of the same would be taken only after the confirmation of auction by the High Court.

10. In accordance with the Accounting Standard (AS)-28 on Impairment of Assets, the Company has access as on the balance sheet date, whether there are any indications (listed in paragraph 8 to 10 of the Standard) with regard to the impairment of any of the assets. Based on such assessment it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly no impairment has been provided in the books of account.

11. a) In 2009-10 the Company has issued 5,600,000 Global Depositary Receipts (GDRs) at the rate of USD 1.52 per GDR (USD 8,512,000), out of which USD 8,392,000 amounting to Rs. 39.48 crores (after netting of USD 120,000 for GDRs issue expenses) were unutilized and lying with Overseas Bank, in the form of fixed deposit. The said amount has been utilized for the purpose for which these were raised during the year.

b) During the year 2010-11 the Company has issued two series of Global Depositary Receipts (GDRs). The first series being of 3,000,000 Global Depositary Receipts (GDRs) at the rate of USD 15.50 per GDR amounting to Rs. 207.20 crores (USD 46,500,000). The second series being of 3,500,000 Global Depositary Receipts (GDRs) at the rate of USD 10.00 per GDR amounting to Rs. 162.96 crores (USD 35,000,000). The funds have been used for working capital/capital expenditures. The funds USD 2,500,000 amounting to Rs. 11.64 crores, and lying with Overseas Bank have been utilized for the purpose for which these were raised during the year.

12. During the year the Company had allotted 12,000,000 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. 5.25/- per share for every warrant held, within 18 months from the date of allotment (i.e. from Dec. 21, 2011), in terms of SEBI (DIP) Guidelines read with SEBI (Issue of Capital & Disclosure Requirements) Regulation, 2009. All of the aforesaid holders of 12,000,000 equity warrants have exercised this option by depositing the amount during the year itself.

13. The summarized position of Post-Employment benefits and long term employee benefits recognized in the Profit & Loss Account and Balance Sheet as required in accordance with Accounting Standard (AS15) are as under:

a. Gratuity

The principal assumptions used in actuarial valuation of gratuity are as below:

b. Provident Fund

During the year the company has recognized an expense of Rs. 34,706,164/- (Previous Year Rs. 22,092,868/-) towards provident fund scheme.

c. Leave Encashment

During the year the company has recognized an expense of Rs. 5,216,533/- (Previous Year Rs. 4,783,052/-).

14. A sum of Rs. Nil crores (Previous Year Rs. 0.47 crores) is included in profit & loss account under different expenditures heads representing prior period items.

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Mar 31, 2011

1. There are contingent liabilities in respect of the following items: No outflow is expected in view of the past history relating to these items:- (Rs. in Crores)

Particulars March 31, 2011 March 31, 2010

(i) Export Bills Discounted 18.81 32.63

(ii) Estimated amount of capital contracts remaining to be executed net of advances 38.33 19.97

(iii) Income Tax demand for AY 2005-06 to AY 2008-09 (Previous Year AY 2004-05 to AY 2007-08) net of deposit of Rs. 1.91 crores (Previous year Rs. 3.61 crores) 1.16 1.86 against the said demand, contested in appeals.

(iv) Guarantees given by the Company on behalf of SEL Textiles Ltd. (Subsidiary Company) 316.15 67.15

2. Earnings Per Share

The calculation of Earnings per Share as disclosed in the statement of Profit & Loss has been in accordance with Accounting Standard (AS)-20 on "Earning per Share" issued by Companies (Accounting Standards) Rules, 2006.

3. Debit or Credit balances on whatsoever account are subject to confirmation from parties; as such their effect on profit and loss account cannot be reflected.

4. In opinion of the Board, all the current assets, loans & advances have the value on realization in the ordinary course of business at-least equal to amount at which they are stated.

5. Current Assets, Loans & Advances includes Rs. 1.81 Cores (Previous Year Rs. 20.85 Crores) due from firms as debtors in which directors of the company are interested as partners.

6. Expenses on issue of Shares & GDRs are being adjusted against Securities Premium Account as permitted by the Section 78 of the Companies Act.

7. There are no outstanding forward exchange contracts.

8. Segment Reporting

Segment Information as required by Accounting Standard (AS)-17 on Segment Reporting, issued by Companies (Accounting Standards) Rules 2006, has been compiled on the basis of the consolidated financial statements and is disclosed in the notes to accounts forming part of the consolidated financial statements in accordance with the above standard. Therefore segment information in respect of separate financial statements of the company is not being disclosed in the stand alone financial statements.

9. The Company has purchased, through auction by Official Liquidator, the assets of a closed unit namely, Mangla Cotex Limited for Rs. 6.70 Crores. However, so far the Company has paid Rs. 1.675 Crores as advance for property, which has been shown under Capital Work in Process & Advances, and the possession of the same would be taken only after the confirmation of auction by the High Court.

Note: Balances with non-scheduled banks in Overseas are translated at the year-end rates of exchange.

10. The tax paid u/s 115JB (MAT) of Income Tax Act, 1961 has been treated as an asset in accordance with the provision of the Guidance note for Credit available in respect of Minimum Alternate Tax under the Income Tax Act, 1961 issued by the Institute of Chartered Accountants of India. The MAT credit entitlement for the current year is on the basis of statement of assessable income prepared on provisional basis.

11. In accordance with the Accounting Standard (AS)-28 on Impairment of Assets, the Company has access as on the balance sheet date, whether there are any indications (listed in paragraph 8 to 10 of the Standard) with regard to the impairment of any of the assets. Based on such assessment it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly no impairment has been provided in the books of account.

12. Cheques issued but not presented for payment amounting to Rs. 665,981,773/- (Previous Year Rs. 308,253,944/-) have been shown as Rs. 363,641,944/- (Previous Year Rs. 84,329,964/-) under the head other liabilities after netting of Cheques in Hand Rs. 302,339,829/- (Previous Year Rs. 223,923,980/-).

# Excludes provision for gratuity, which is determined on the basis of actuarial valuation done on overall basis for the company.

13. (i) In 2009-10 the Company has issued 5,600,000 Global Depositary Receipts (GDRs) at the rate of USD 1.52 per GDR (USD 8,512,000), out of which USD 8,392,000 amounting to Rs. 39.48 crores (after netting of USD 120,000 for GDRs issue expenses) is still unutilized and lying with Overseas Bank, in the form of fixed deposit. The said amount is shown in "Balances with Bank in Fixed Deposits Account" in Annexure-J of Cash & Bank Balances.

(ii) During the year the Company has issued two series of Global Depositary Receipts (GDRs). The first series being of 3,000,000 Global Depositary Receipts (GDRs) at the rate of USD 15.50 per GDR amounting to Rs. 207.20 crores (USD 46,500,000). The second series being of 3,500,000 Global Depositary Receipts (GDRs) at the rate of USD 10.00 per GDR amounting to Rs. 162.96 crores (USD 35,000,000). The funds have been used for working capital/capital expenditures. Out of total receipts USD 2,500,000 amounting to Rs. 11.64 crores is still unutilized and lying with Overseas Bank and the said amount is shown in "Balances with Bank" in Annexure-J of Cash & Bank Balances.

14. (i) In 2009-10 the Company had allotted 6,600,000 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. 60/- per share for every warrant held, within 18 months from the date of allotment (i.e. from Sept. 18, 2009), in terms of SEBI (DIP) Guidelines read with SEBI (Issue of Capital & Disclosure Requirements) Regulation, 2009. Out of above, holders of 5,700,000 equity warrants have exercised this option by depositing the remaining amount in the year 2009-10 and the balance 900,000 equity warrant holders have exercised this option by depositing the remaining amount during the year under consideration.

(ii) During the year the Company had allotted 3,090,000 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 Sept. 27, 2010), in terms of SEBI (DIP) Guidelines read with SEBI (Issue of Capital & Disclosure Requirements) Regulation, 2009. All of the aforesaid holders of 3,090,000 equity warrants have exercised this option by depositing the amount during the year itself.

15. The Micro, Small and Medium Enterprises Development Act, 2006 come into force w.e.f. 02.10.2006. The Company has not received any confirmation from its vendors / service providers regarding their status of registration under the said act. Hence, the disclosures required under the said Act have not been given.

16. The Company has under taken export obligation of Rs. 2101.86 crores to export of goods against the issuance of EPCG Licenses for the import of capital goods and duty free procurement of indigenous capital goods etc. Out of this, export obligations of Rs. 567.11 crores have already been fulfilled up to 31st March 2011.

17. The summarized position of Post-Employment benefits and long term employee benefits recognized in the Profit & Loss Account and Balance Sheet as required in accordance with Accounting Standard (AS15) are as under:

b) Provident Fund:

During the year the company has recognized an expense of Rs 22,092,868/- (Previous Year Rs. 11,291,220/-) towards provident fund scheme.

c) Leave Encashment

During the year the company has recognized an expense of Rs 4,783,052/- (Previous Year Rs. 5,038,964/-).

18. Current Liabilities include Rs. 28,348/- (Previous Year Rs 28,348/-) on account of Unclaimed Dividend. Unclaimed Dividend for the year 2007-08 does not include any amount due and outstanding to be credited to investors Education and Protection Fund.

19. A sum of Rs. 0.47 crores (Previous Year Rs. 0.01 crores) is included in profit & loss account under different expenditures heads representing prior period items.

20. The figures in bracket indicate deductions.

21. The figures of the previous year have been rearranged and / or regrouped, wherever considered necessary to facilitate comparison.

22. Additional information as required by paragraph 3 & 4 of Part II of Schedule VI of the Companies Act, 1956 and Balance Sheet abstract and Companys General Profile are enclosed herewith.

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Mar 31, 2010

1. There are contingent liabilities in respect of the following items: No outflow is expected in view of the past history relating to these items:-

(Rs. In Crores) Particulars March 31, 2010 March 31, 2009

(i) Export Bills Discounted 32.63 17.18

(ii) Estimated amount of capital contracts remaining to beexecuted net of advances 19.97 16.44

(iii) Income Tax demand for AY 2004-05, 2005-06 & 2006-07 (Previous year for AY 2004-05) net of deposit of Rs. 1.86 0.31

3.61 crores (Previous year Rs. 3.56 crores) against the said demand.

(iv) Guarantees given by the Company on behalf of SEL 67.15 -



3. Earnings Per Share Rules, 2006.

4 Debit or Credit balances on whatsoever account are subject to confirmation from parties; as such their effect on profit and loss account cannot be reflected.

5 in opinion of the Board, all the current assets, loans & advances have the value on realization in the ordlP^ course of business at-least equal to amount at which they are stated.

6 Current Assets, Loans & Advances includes Rs. 20.85 Crores due from firms as debtors in which directors of the company are interested as partners.

7 Expenses on issue of Shares & GDRs are being adjusted against Securities Premium Account as permitted by the Section 78 of the Companies Act.

8 The Company is one of the partner in partnership firm M/S SE Exports and M/s Kudu Industries. The name of the partners and their profit sharing ratio are as under:

9. The tax paid u/s 115JB (MAT) of income tax act, 1961 has been treated as an asset in according with the procision of the Guidance note for Credit available in respect of minimum Alternate Tax under the Income Tax Act, 1961 issued by the Institute of Chartered Accountants in india.

10.Cheques issued but not presented for payment amounting to Rs. 308,253,994 /- have been shown asRs.84,329,964

11 The company has issued 56 00.000 Global Depository Receipts (GDRS) at the rate of USD 1.52 per GDR amounting to Rs. 39.71 crores out of which USD8,392,000. (ie from Sept 18 ?009) in terms of SEBI (DIP) Guidelines read with SEBI (Issue of Capital & Disclosure Requirements) Regulation, 2009. Out of above, holders of 5,700,000 equity warrants have exercised this option fay depositing the remaining amount.

(ii) Out of the holders of 5,700,000 equity warrants issued on preferential basis in financial year 2008- 09 1 891 000 warrant holders have exercised their right for conversion of warrants into equity shares bydepositing the balance consideration while the remaining holders of 3,809,000 warrants have not exercised their right of conversion within the stipulated period of 18 months from the date of allotment. Accordingly, the said warrants stand forfeited.

12 The Micro Small and Medium Enterprises Development Act, 2006 come into force w.e.f. 02.10.2006. The Company has not received any confirmation from its vendors / service providers regarding their status of registration under the said act. Hence, the disclosures required under the said Act have not been given.

13 The Company has under taken export obligation of Rs. 1077.92 crores to export of goods against the issuance of EPCG Licenses for the import of capital goods and duty free procurement of indigenous capital goods etc. Out of this, export obligations of Rs. 356.60 crores have already been fulfilled up to 31st March 2010.

14 The summarized position of Post-Employment benefits and long term employee benefits recognized in the Profit & Loss Account and Balance Sheet as required in accordance with Accounting Standard (AS 15) are as under:

Note: Closing Stocks of Yarn includes 386867 kgs Lying at port and in warehouses.

Figures of Closing Stocks are given after adjusting Inter Unit Transfers and Internal Consumption.