Sub note: Details of Guarantees, Important terms and conditions

1. (From Bankers under Consortium Arrangement Secured against hypothecation of Company’s Stocks, Book Debts and other current assets and First charge over Fixed Assets of the company and Personal guarantees of directors namely Sh. Manish Goel, Sh. Mukesh Kumar Gupta their relative Sh. Vishal Goel and Corporate Guarantee of M/s Shilpi Communication Pvt Ltd, Shilpi Cables Pvt Ltd and MVM Impex Pvt. Ltd.

2. Securities Details

(i) Equitable Mortgage of property at E-138, Bhiwadi, Rajasthan, measuring 4001 sq. mtr (belonging to Shilpi Cables Pvt. Limited.)

(ii) Pledge of 3.35 crore shares of SCTL from Shilpi Communications P Ltd on first pari passu basis

(iii) Equitable Mortgage of Property situated at MCD No. 269, Khasra No. 358, AALI INDL Complex Mathura Road, Delhi measuring approximately 300 Sq yards in the name of Sh. Mukesh Kumar Gupta

(iv) Equitable Mortgage of Property situated at MCD No. 268, Khasra No. 358, AALI INDL Complex Mathura Road., Delhi measuring approximately 324 Sq. yards in the name of Sh. Vishal Goel

(v) Equitable Mortgage of property situated at D- 1112, New Friends Colony measuring approximately 382.50 Sq. yards in the name of Sh. Vishal Goel

(vi) Equitable Mortgage of property at MCD No. 21, Khasra No. 358, Aali Indl Complex, Mathura Rd., Delhi measuring approximately 167 sq yard in the name of Sh. Mukesh Kumar Gupta

(b) Reporting of Default, if any:

There is no default, continuing or otherwise, in repayment of any of the above loans.

3 In the opinion of the Board of Directors the Current Assets, Loans and Advances have a value on realisation in ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

4 In the opinion of the board of directors, provision made for income tax and other statutory dues are sufficient to meet liabilities under respective heads. However, any shortage or excess shall be dealt in the year of final disposal by the concernred authorities.

5 Disclosure in accordance with Revised AS-15 on “Employee Benefits”

The Accounting Standard 15 (Revised 2005) on “Employee Benefits” issued by the Institute of Chartered Accountants of India has been adopted by the Company. In accordance with the above Standard, the additional obligations of in accordance with the above Standard, the additional obligations of the Company, on account of employee benefits, based on independent actuarial valuation as per the transitional provisions of As - 15 (Revised 2005)

6 The Company has 124 Nos. of Unsecured Non Convertible debentures outstanding at the end of the year and the terms are as follows

(i) The interest rate of debentures is 2% per annum. Interest will become due to the debenture holder on the last date of the close of Year from the date of allotment of Debentures. Tax will be deducted at source by the issuer Company as per applicable laws. The Debentures are redeemable and the maturity date is 5 Years from the allotment of debentures. redemption premium on maturity is Rs 5.00 Lakhs per Debenture.

(ii) Call Option:- Issuer has Call Option exercisable any time after the expiry of one year from the date of allotment of debentures but before the maturity of the debentures. In such a case the Redemption Premium will be payable to the Debenture Holder in proportion of the redemption period to the maturity period. Interest accrued till the date of redemption will be payable to the debenture holder. The issuer can exercise call option in respect of all or any Debenture holders at its discretion.

(iii) Put Option:- The Debenture holder has Put Option exercisable at any time after the expiry of Six months from the date of allotment of debentures but before the maturity of the debentures. In such a case no redemption premium will be payable. However, interest accrued till the date of allotment of debentures but before the maturity of the debenture will be payable to the debenture holder. Put Option can be exercised in part or full and in tranches in respect by the debenture holder.

7 Amounts of Rs. 113843 and Rs. 197282 is remaining as unclaimed dividend for the year 2014-15 and 2013-14 respectively.

8 Employee Stock Option Scheme

The Company has granted SHILPI Employees Stock Options Scheme, 2014 (ESOS 2014) to its employees pursuant to the resolution passed by the shareholders at the Annual General Meeting held on 01st September, 2014. The Company has followed the Intrinsic Value Method for the valuation of these options. The Nomination and Remuneration Committee of the Company has granted 436826 Stock Option convertible into one Equity Share vide their meetings held on 27th July, 2015. As per the plans, Options granted under ESOS would vest as follows:

(i) 33% of total options granted on Grant date, shall vest on the 2nd anniversary of the Grant Date;

(ii) Further 33% of total options granted on Grant date, shall vest on the 3rd anniversary of the Grant Date;

(iii) Balance of Total Option on the Grant Date, shall vest on the 4th anniversary of the Grant Date.

As per the plans, Options granted under ESOS would vest in not more than five years from the date of grant of such options. Vesting of options is subject to continued employment with the company. The plans are equity settled plans.

The Company has charged Rs. 54.93 Lakhs to the statement of profit and loss in respect of options granted under ESOS scheme 2014