Financial Analyst Summary: SEL Manufacturing Company Limited Regulatory Response

Date and Nature of Exchange Communication

The company received an email from NSE on 8 July 2026 regarding a deficiency observed in the Outcome of Board Meeting - Financial Results submitted on 28-May-2026. The exchange noted that the Statement of Impact of Audit Qualifications (in case of modified opinion)/Declaration of Unmodified Opinion was not in the format prescribed by SEBI and was not signed by the Chairperson of the Audit Committee.

Company's Clarification on Regulatory Compliance

SEL Manufacturing Company Limited has submitted a revised Statement of Impact of Audit Qualifications in the format prescribed by SEBI, duly signed by the Chairperson of the Audit Committee, Ms. Meghna Mahendra Savla. This submission was made in compliance with the applicable provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company requested the exchanges to take this revised submission on record and treat the observation as complied with.

Details of Financial Results and Audit Qualifications

Financial Performance for Q4 FY26 and Full Year FY26:

  • Q4 FY26 Net Loss: ₹4,186.00 lakhs
  • Full Year FY26 Net Loss: ₹16,787.23 lakhs
  • Q4 FY26 EPS (Basic & Diluted): (₹12.63)
  • Full Year FY26 EPS (Basic & Diluted): (₹50.66)
  • Total Income Q4 FY26: ₹245.51 lakhs (Net Revenue: ₹231.65 lakhs, Other Income: ₹13.86 lakhs)
  • Total Expenses Q4 FY26: ₹4,667.51 lakhs
  • Finance Cost Q4 FY26: ₹2,196.11 lakhs
  • Depreciation Q4 FY26: ₹2,076.56 lakhs

Balance Sheet Position as at 31 March 2026:

  • Total Assets: ₹85,943.07 lakhs
  • Property, Plant and Equipment: ₹79,537.54 lakhs
  • Capital Work in Progress: ₹4,246.00 lakhs
  • Total Liabilities: ₹125,901.05 lakhs
  • Borrowings (Non-current): ₹46,674.22 lakhs
  • Borrowings (Current): ₹51,777.76 lakhs
  • Net Worth: (₹39,957.98) lakhs (Negative)

Audit Qualification Details:

The auditors, Kamboj Malhotra & Associates, issued a qualified opinion primarily due to:

1. The company not conducting impairment assessment of Property, Plant & Equipment (₹79,537.54 lakhs) and Capital Work in Progress (₹4,246.00 lakhs) as required by Ind AS 36

2. The impact of potential impairment could not be ascertained due to lack of working documents

3. Material uncertainty regarding going concern due to continuous losses, liquidity stress, and default on financial obligations

Default and Liquidity Issues:

  • Defaulted on quarterly installments from September 2023 to March 2026: ₹30,871.93 lakhs
  • Defaulted on monthly interest and other charges from July 2023 to March 2026: ₹19,342.604 lakhs
  • Current ratio deteriorated to 0.02:1 as at March 2026 from 0.04:1 as at March 2025
  • Debt obligation of approximately ₹20,906 lakhs for FY 2026-27
  • Cumulative losses of ₹80,878 lakhs in last five years since implementation of resolution plan

Operational Challenges:

  • Manufacturing facilities remained non-operational for majority of the year
  • Company initiated job work activities at one unit instead of own manufacturing
  • Severe liquidity stress affecting ability to meet financial obligations
  • Listing fees for FY 2025-26 (₹0.25 lakhs) not paid as of approval date

Regulatory and Legal Proceedings:

  • Shareholders passed resolution for initiation of Corporate Insolvency Resolution Process under Section 10 of IBC in EGM held on 13th October 2023
  • Company filed application before NCLT Chandigarh regarding declassification issues with banks and financial institutions
  • NCLT granted interim moratorium on payment obligations until next hearing

Topic Tags: Regulatory Response, Financial Results Clarification, Audit Qualification, Impairment Testing, Default on Loan Payments, Liquidity Crisis, Insolvency Proceedings