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Notes to Accounts of Mangalam Seeds Ltd.

Mar 31, 2023

14.4 Rights, Preferences and Restrictions attached to Shares

The Company has one class of equity shares having a par value of Rs. 10 per share. Equity shareholder is eligible for one vote per share held. They are eligible for dividend on the basis of their shareholding. In the case of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, if any, in proportion to their shareholding.

Other Comprehensive Income: The fair value change of the investments measured at fair value through other comprehensive income recognised through Other Comprehensive Income. Upon derecognition the cumulative fair value changes on the said investments except equity investments are reclassified to the Statement of Profit and Loss. Accumulated gain or loss on employee benefits also recognised

Retained Earnings: Retained earnings are the profits that the Company has earned till date less any transfers to general reserve, dividends, utilisations or other distributions paid to shareholders.

Sub Note: Tem loan against PPEs is secured by personal guarantee of Promoter/Director and Promoter Group.

Sub Note:

Collateral Security Mortgages:

1. Residential Plot - No. 15, Harihar Ashray-2, RSNO 417/1, 417/2,418/1, 418/2, 432/1, 432/2 AND 433 TP SCH NO 37, F P NO92/2, Opp. Krishna Bunglow, Behind Silver Square, Shilaj Road, Thaltej, Ahmedabad

2. Industrial Property - Rev Survey No. 278, 10/11(12/144), Opp. Maktupur Bus Stop, Unjha-Palanpur Highway Road, Unjha

3. Industrial Property - NA Open Land - Revenue Survey No. 1706 (Old Survey No. 636), Nr. Umiya Farm, Golvanta Road, Valad, Gandhinagar

4. Industiral Property - NA Open Land - Revenue Survey No. 1707 (Old Survey No 638/2), Nr. Umiya Farm, Golvanta, Valad, Gandhinagar

5. Industiral Property - NA Open Land - Revenue Survey No. 1711 (Old Survey No 638/1), Nr. Umiya Farm, Golvanta, Valad, Gandhinagar

6. Industiral Property - NA Open Land - Revenue Survey No. 1713 (Old Survey No 635), Nr. Umiya Farm, Golvanta, Valad, Gandhinagar

The company has accepted deposit from the distributors against supply of goods as per the policy of the Company at the rate of 9%.

Sub Note: The Company has utilized the borrowings from Banks for the purpose, for which it has been raised.

Sub Note: The quarterly returns or statement of current assets filed by the Company with banks are in agreement with the books of accounts. Sub Note:

Collateral Security Mortgages:

2. Industrial Property - Rev Survey No. 278, 10/11(12/144), Opp. Maktupur Bus Stop, Unjha-Palanpur Highway Road, Unjha

3. Industrial Property - NA Open Land - Revenue Survey No. 1706 (Old Survey No. 636), Nr. Umiya Farm, Golvanta Road, Valad, Gandhinagar

4. Industiral Property - NA Open Land - Revenue Survey No. 1707 (Old Survey No 638/2), Nr. Umiya Farm, Golvanta, Valad, Gandhinagar

5. Industiral Property - NA Open Land - Revenue Survey No. 1711 (Old Survey No 638/1), Nr. Umiya Farm, Golvanta, Valad, Gandhinagar

6. Industiral Property - NA Open Land - Revenue Survey No. 1713 (Old Survey No 635), Nr. Umiya Farm, Golvanta, Valad, Gandhinagar

Sub Note: Working capital loan is secured by personal guarantee of Promoter/Director and Promoter Group.

Disclosure of payable to vendors as defined under the âMicro, Small and Medium Enterprise Development Act, 2006" is based on the information available with the Company regarding the status of registration of such vendors under the said Act, as per the intimation received from them on requests made by the Company. There are no overdue principal amounts / interest payable amounts for delayed payments to such vendors at the Balance Sheet date. There are no delays in payment made to such suppliers during the year or for any earlier years and accordingly there is no interest paid or outstanding interest in this regard in respect of payment made during the year or on balance brought forward from previous year.

The Tax Rate used for the FY-2022-23 reconciliation above is the corporate tax rate of 25% plus surcharge @7% plus Cess @4% payable by corporate entities in India on taxable Profits under the Indian tax laws.

*The Company has income from agricultural activities and under the Income Tax Act, 1961 the same is exempt from tax. The ratio of trading activities and agricultural activities keeps on changing during the particular financial year. Therefore, the company have not identified the effective tax rate for calculating deferred tax expenses/income and the same is calculated based on the enacted rate of tax in India, i.e.

36 Financial Instruments and Risk Review

The Company''s business activities are exposed to a variety of financial risks namely liquidity risk, market risks and credit risk. The Company''s senior management has the overall responsibility for establishing and governing the Company''s risk management framework. The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly.

1) Capital Management

The Company''s capital management objectives are:-

The Board policy is to maintain a strong capital base so as to maintain inventor, creditors and market confidence and to future development of the business. The Board of Directors monitors return on capital employed.

The Company manages capital risk by maintaining sound/optimal capital structure through monitoring of financial ratios, such as debt-to-equity ratio and net borrowings to- equity ratio on a monthly basis and implements capital structure improvement plan when necessary.

The Company uses debt ratio as a capital management index and calculates the ratio as Net debt divided by total equity. Net debt and total equity are based on the amounts stated in the financial statements.

* Net Debts includes Non-Current borrowings, Current borrowings, Current Maturities of non current borrowing net off Current Investment and cash and cash equivalent ** Equity Include Paid up Share Capital and Other Equity.

Disclosures

This section gives an overview of the significance of financial instruments for the Company and provides additional information on balance sheet items that contain financial instruments.

The details of material accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognized in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note provided hereunder :

(b) Fair Value Measurement :

This note provides information about how the Company determines fair values of various financial assets. Fair Value of financial assets like Investments in quoted shares are valued at fair value and other are recorded at cost.

2) Financial Risk Management Objectives

(A) Liquidity Risk

(i) Liquidity risk management

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company''s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses.. In doing this management considers both normal and stressed conditions.

The Company maintained a cautious liquidity strategy with a positive cash balance throughout the year ended 31 March, 2023 and 31 March, 2022. Cash flow from operating activities provides the funds to service the financial liabilities on a day-to-day

(ii) Maturities of financial liabilities

The following tables detail the remaining contractual maturities for its financial liabilities with agreed repayment period. The amount disclosed in the tables have been draw up based on the undiscounted cash flow of financial liabilities based on the earliest date on which the Company can be required to pay. The table includes both interest and principal cash flows.

(B) Market Risk

Market risk is risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in the market prices. Such changes in the value of financial instruments may result from changes in the foreign currency exchange rate, interest rate, credit, liquidity and other market changes.

Credit risk is the risk of financial loss arising from counter-party failure to repay or service debt according to contractual terms or obligations.

Trade Receivables

Concentration of credit risk with respect to trade receivables is low due to the Company''s customer base being medium and also company receives good amount of receipts towards advances. All trade receivables are reviewed and assessed for default on a quarterly basis based on collections and ageing.

Our historical experience of collecting receivables is that credit risk is low. However, due to huge amount in comparison with other financial assets, trade receivables are considered to be a single class of financial assets.

38 Corporate Social Responsibility Contribution

As per Section 135 of the Companies Act, 2013, a Company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation, environment sustainability, disaster relief, COVID-19 relief and rural development projects and other activities as mentioned in Schedule VII of the Companies Act, 2013. A CSR committee has been formed by the Company as per the Act. The funds were primarily utilised throughout the year on these activities which are specified in Schedule VII of the Companies Act, 2013:

39 The company has dispatched letter to vendor to ascertain their status under the Micro, Small and Medium Enterprises Development Act, 2006. Based upon the confirmations received from the parties, they are classified accordingly, rest of the parties other than MSMEs.

40 i) The company is engaged in agricultural activities of production of seeds on lease hold land situated at various part of India.

ii)The company has entered into agreements with various growers for cultivation and production of agricultural produce in view of the fact that the company itself is unable to carry on such activities which are spread over various parts of India. The company has reimbursed the cultivation expenses based upon the agreements entered into with the growers.

It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above, pending resolution of the respective proceedings as it is determinable only on receipt of judgments/decisions pending with various forums/ authorities.

The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial results.

At officer level the decision was not in favour of the company, therefore, the company has appealed in Commisioner of Income Tax appeal. Therefore, the company has recognised it as contingent liabilities.

B. Commitments:

Estimated amount of contracts remaining to be executed on capital account and not provided for net of advances, Rs. 25.00 Lakhs (previous year Rs. 200.00 Lakhs).

43 Related Party Disclosures:

44 Disclosures Regarding Employee Benefits

As per Indian Accounting Standard 19 âEmployee Benefits" the disclosures are given below:

1) Defined Benefit Plan: Retirement benefits in the form of Gratuity are considered as defined benefit obligation and are provided for on the basis of third party actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet.

As the Company has not funded its liability, it has nothing to disclose regarding plan assets and its reconciliation.

45 Segment Information

a) The Company has only one business segment i.e., Sale of Seeds and there are no other reportable segments under Ind AS 108 âOperating Segments".

b) Geographical information

The Company operates in single principal geographical area i.e., India. Though the Company has operations across various geographies within India, the same are considered as a single operating segment considering the following factors

* These operating segments have similar long term gross profit margins.

* The nature of the products and production processes are similar and the methods used to distribute the products to the customers are the same.

c) In view of the above mentioned classification of business and geographical segments the particulars relating to Segment revenue and results, Segment assets and liabilities, Other segment information, revenue from major products and services, geographical information are not furnished herewith.

46 Operating Leases

The Company''s significant leasing arrangements are in respect of operating leases for lands and premises (Agricultural lands, office, stores, godown etc.). These leasing arrangements which are cancellable range between 11 months and 5 years generally, and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as rent in the Statement of Profit and Loss in respect of short term and low value leases and hence considered the same to be short term lease in nature under IND AS 116. Accordingly no further disclosures are applicable.

47 Disaggregated Revenue

The company deals in variety of hybrid seeds which are sold directly to dealers or distributors with similar characteristics in terms of revenue recognition, nature, timing, cashflows etc. The operations of company are primarily located in India. Thus, the quantitative disclosure in respect of disaggregation of revenue is not required.

48 Certain Balance of Debtors, Creditors, Loans & Advances for Capital expenditures are non- moving / sticky . However in view of the management, the same is recoverable / payable. Hence no provision for the same is made in the books of accounts.

49 In the opinion of the Board of Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and the provisions for depreciation and all known and ascertained liabilities are adequate and not in excess of the amounts reasonably necessary.

50 The balance confirmation from the suppliers, customers as well as to various loans or advances given have been called for, but the same are awaited till the date of audit. Thus, the balances of receivables, trade payables as well as loans and advances have been taken as per the books of accounts submitted by the company and are subject to confirmation from the respective parties.

51 Previous year''s figures have been regrouped and rearranged wherever necessary.

52 Benami Transactions

There is no proceedings has been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

53 Wilful Defaulter

The Company has not been declared wilful defaulter by any bank or financial institutions or other lender.

54 Transactions with Struck off Companies

As stated & Confirmed by the Board of Directors ,The Company has not under taken any transactions nor has outstanding balance with the Company Struck Off either under section 248 of the Act or under Section 560 of Companies act 1956.

55 Satisfaction of Charge/Creation of Charge

There is no charges or satisfaction yet to be registered with ROC beyond the statutory period.

56 Number of Layers of Subsidiary

The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of layers) Rules, 2017.

57 Undisclosed Transactions

As stated & confirmed by the Board of Directors, The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

58 Loan or Investment to Ultimate Beneficiaries

As stated & Confirmed by the Board of Directors, The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

59 Loan or Investment from Ultimate Beneficiaries

As stated & Confirmed by the Board of Directors ,The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

60 Utilization of Term Loans

The Company has applied term loans for the purpose for which the same was obtained during the year.

61 Crypto Currency

The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

62 Title Deeds of Immovable Property

Title Deed of all immovable properties are in the name of the company , except for Leasehold Property.

Notes referred to herein above form an integral part of the Financial Statements

The management assessed that the fair values of short term financial assets and liabilities significantly approximate their carrying amounts largely due to the short term maturities of these instruments. The fair value of financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction among willing parties, other than in a forced or liquidation sale. The Company determines fair values of financial assets and financial liabilities by discounting contractual cash inflows/ outflows using prevailing interest rates of financial instruments with similar terms. The fair value of investment is determined using quoted net assets value. Further, the subsequent measurement of all finance assets and liabilities (other than investment) is at amortized cost, using the effective interest method.

Discount rates used in determining fair value

The interest rate used to discount estimated future cash flows, where applicable, are based on the incremental borrowing rate of the borrower which in case of financial liabilities is the weighted average cost of borrowing of the Company and in case of financial assets is the average market rate of similar credits rated instrument. The Company maintains policies and procedures to value financial assets orfinancial liabilities using the best and most relevant data available. In addition, the Company internally reviews valuation, including independent price validation for certain instruments. Fair value of financial assets and liabilities is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique.

The following methods and assumptions were used to estimate fair value:-

a) Fair value of short term financial assets and liabilities significantly approximate their carrying amounts largely due to the short term maturities of these instruments.

b) The fair value of the Company''s interest borrowing received are determined using discount rate reflects the entity''s borrowing rate as at the end of the reporting period. The own non performance risk as at the end of reporting period was assessed to be insignificant.

Fair value hierarchy

All financial instruments for which fair value is recognized or disclosed are categorized within the fair value hierarchy described as follows, based on the lowest level input that is significant to the fair value measurement as a whole.

Level: 1

Quoted (unadjusted) price is active market for identical assets or liabilities Level: 2

Valuation technique for which the lowest level input that has a significant effect on the fair value measurement are observed, either directly or indirectly.

Level: 3

Valuation technique for which the lowest level input has a significant effect on the fair value measurement is not based on observation market data.

Mar 31, 2018

Sub Note: 1

During the Financial Year 2017-18 Company has allotted 5,490,079 Equity shares as Bonus Shares to the existing Equity Shareholders as on 31st August, 2017, in the ratio of 1 Equity Share against the 1 Equity Share held by them.

Sub Note: 1

i) Car Loan of Rs. 583,041 as on March 31, 2018 of HDFC Bank Limited is secured by way of hypothecation of car at the rate of 9.35%.

Sub Note: 1

The company have provided for the gratuity based on AS-15 âEmployee Benefitsâ as per actuarial valuation and it is not funded.

Sub Note: 1

The company has accepted the security deposits from the new distributors as per the company policy and it is refundable. The rate of interest on it is 9% p.a.

Sub Note: 1

Working Capital Loan from HDFC Bank of â 43,194,412/- as on March 31, 2018 is secured against hypothecation of Present and Future Stock and Book Debts at the rate of 10.80% and Rs. 10,000,000/- at the rate of 9.55%.

Sub Note: 1

Outstanding Balances of Trade Payables as on 31st March, 2018 are taken as certified by management. The same is subject to reconciliation and confirmations.

Sub Note: 1

Other Payables includes amount received as advance from customers and amount to be paid to employees of the Company.

Sub Note: 2

Car Loan of Rs. 247,671 as on March 31, 2018 of HDFC Bank Limited is secured by way of hypothecation of car at the rate of 9.61%

Sub Note: 3

Car Loan of Rs. 583,041 as on March 31, 2018 of HDFC Bank Limited is secured by way of hypothecation of car at the rate of 9.35%.

Sub Note: 1

Inventories as on 31^st March, 2018 have been taken as certified by management; the same had been also physically verified on 31^st March, 2018.

Sub Note: 1

Outstanding Balances of Trade Receivables as on 31st March, 2018 are taken as certified by management. The same is subject to reconciliation and confirmations.

Sub Note: 1

Advances to related parties includes advances given to subsidiary companies for business expediency. Sub Note: 2

Advance for capital goods and Advance to supplier includes advances given without any security.

Earning Per share is calculated by dividing the Profit/(Loss) attributable to the Equity Shareholders by the weighted average number of Equity Shares outstanding during the year. The numbers used in calculating basic and diluted earning per Equity Share as stated below

1 Outstanding balances of Creditors and Debtors are subject to confirmations / reconciliation.

2 As informed to us, the Contingent Liability is NIL

3 Previous yearâs figures have been regrouped and rearranged wherever necessary.

4 Related Party Disclosures:

As per Accounting Standard 18, the disclosures of transactions with the related parties are given below:

i) List of Related parties where control exists and related parties with whom transactions have taken place and relationships:

Sub Note: 1

In the above table, where the transaction is related to shares, it is mentioned in number of shares.

5 Segment Reporting

The Company have not any business segment or geographical segment other than the one i.e. Dealing in seeds. Therefore, the Accounting Standard 17 âSegment Reportingâ is not applicable.

Mar 31, 2016

Sub Note: 1 During the Financial Year 2015-16 Company has allotted Bonus shares on 8th May, 2015 to its existing shareholders in the ratio of 13 shares against each 6 shares held by them out of balance in Securities Premium Account.

Sub Note: 2 During the Financial Year 2015-16 Company has allotted 212,328 Equity shares at Rs 50 each (including Rs 40 towards security premium) on 15th May, 2015.

Sub Note: 3 During the Financial Year Company went for Initial Public Offering of 1,140,000 Equity Shares at Rs 50 each (including Rs 40 towards security premium) and got listed on 12th August, 2015 on SME Platform of Bombay Stock Exchange, out of the same the company has raised Rs 5.70 Crores.

Sub Note: 4 The management have recommended dividend of Rs 1/- per Equity share, to the Shareholders of the Company. (Previous Year - No Dividend was recommended by the management.

Sub Note: 5 The Company have made provision for Dividend Distribution Tax @ 20.358% on the amount of Proposed Dividend. (Previous Year - No Dividend was recommended by the management, therefore no provision have been made.)

Sub Note: 6 During the Financial Year, the Company have issued 212,328/- Equity Shares under Private Placement and 1,140,000/Equity Shares in Initial Public Offer at premium of Rs 40/- per Equity Share.

Sub Note: 7 During the Financial Year Company has issued Bonus shares to existing shareholders in the ratio of 6 shares against each 13 shares held by them out of Securities Premium Account.

Sub Note: 8 During the year Company has incurred Rs 4,440,789/- towards share issue expense, after deducting Rs 500,000/- being subsidy receivable, the same has been set off against Security Premium as per Section 52 of the Companies Act, 2013.

Sub Note: 9 Working Capital Loan from HDFC Bank of Rs 4,97,17,237/- as on March 31, 2016 is secured against hypothecation of Present and Future Stock and Book Debts at the rate of 10.80%.

Sub Note: 10 Outstanding Balances of Trade Payables as on 31st March, 2016 are taken as certified by management. The same is subject to reconciliation and confirmations.

Sub Note: 11 Other Payables includes amount received as advance from customers and amount to be paid to employees of the Company.

Sub Note: 12 Car Loan of Rs. 290,547/- as on March 31, 2016 of HDFC Bank Limited is secured by way of hypothecation of car at the rate of 10.51%.

Sub Note: 13 Car Loan of Rs. 311,771/- as on March 31, 2016 of HDFC Bank Limited is secured by way of hypothecation of car at the rate of 9.61%.

Sub Note: 14 The Company have provided for Income Tax Provision at the applicable rate on income derived from trading of goods and had paid Rs 1,000,000/- towards advance tax.

Sub Note: 15 The management have recommended dividend of Rs 1/- per Equity share, to the Shareholders of the Company. (Previous Year - No Dividend was recommended by the management.

Sub Note: 16 The Company has made provision for Dividend Distribution Tax @ 20.358% on the amount of Proposed Dividend. (Previous Year - No Dividend was recommended by the management, therefore no provision have been made.)

17 Outstanding balances of Creditors and Debtors are subject to confirmations / reconciliation.

18 As informed to us, the Contingent Liability is NIL

19 Previous year''s figures have been regrouped and rearranged wherever necessary.

20 Related Party Disclosures:

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