Notes to Accounts of Lagnam Spintex Ltd.

Mar 31, 2025

1 Term/Right attached to the Equity share

The company has only one class of Equity Share having a par value of ^ 10/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed, if any, by the Board of Directors is subject to the approval of the shareholders in the ensuring Annual General Meeting, except in case of interim dividend.

In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

Secured

Conditions of Term Loans are summarised below:

Nature of Security

1 a. Term Loan of ^ 3965.05 Lacs ( ^ 5369.74 Lacs as at 31st March, 2024) are secured by first pari passu charge on all fixed assets (present & future) including equitable mortgage of factory land and building of the company. Second pari passu charge on all the current assets of company both present & future. The loans are further secured by personal guarantee and equitable mortgage of Residential House of Mr.D.P. Mangal , Land of Mr. Anand Mangal & Mr. Shubh Mangal and corporate guarantee of M/s Lagnam Infotech Solutions Private Limited.

b. Term Loan of ^ 16299.73 Lacs (^ 16299.73 Lacs as at 31st March, 2024) are secured by first pari passu charge on all fixed assets (present & future) including equitable mortgage of factory land and building of the company. Second pari passu charge on all the current assets of company both present & future. The loans are further secured by personal guarantee of Mr.D.P. Mangal , Land of Mr. Anand Mangal & Mr. Shubh Mangal.

c. Term Loan of ^ 1859.35 Lacs ( ^ 3090.35 Lacs as at 31st March, 2024) are secured by second charge on all fixed and current assets (present & future). The loans are further secured by equitable mortgage of Residential House of Mr. D.P.Mangal , Land of Mr. Anand Mangal & Mr. Shubh Mangal.

d. Term Loan of ^ 1424.55 Lacs ( ^ 1355.23 Lacs as at 31st March, 2024) are secured by hypothecation of proposed plant and machinery in form of solar panel and other ancillary

e. Vehicle loan of ^ 35.58 Lacs ( ^ 31.22 Lacs as at 31st March, 2024) are secured against respective vehicles.

Terms of Repayment of Secured Borrowing

2. a Secured term loans from bank are repayable in quarterly installment and having floating interest rate ranging from MCLR spread 0.40% to 1.40% and 3M T-Bill as at 31st March 2025 (Previous Year MCLR spread 0.40% to 0.80% and 3M T-Bill as at 31st March 2024)

b Vehicle loans are repayable in monthly installments and having fixed interest rates 8.50% and 2.25% Spread over Repo rate. (Previous Year 8.50% and 9.45%)

c Term loans under ECLGS from banks are repayable in monthly installment and having floating interest rate MCLR spread 1.00% and EBLR with cap of 9.25% as at 31st March 2025 (Previous Year MCLR spread 1% and EBLR with cap of 9.25% as at 31st March 2024) Period of maturity and installments outstanding are as under-

Conditions of Working Capital Loan are summarised below:

Security - Hypothecation of stocks, book debts and other current assets of the company and second charge on fixed assets of the company on pari passu basis. Further Personal Guarantee and collateral security of equitable mortgage of Residential House of D.P.Mangal, Land of Anand Mangal & Shubh Mangal and corporate guarantee of M/s Lagnam Infotech Solutions Private Limited is given.

Floating Rate - Rupee loan carrying floating interest rate of MCLR to MCLR 1.40%, Repo 1.50% and 3M T-bill as at 31st March 2025 (Previous Year MCLR 0.55 % to 1.15% and 3M T-bill ) and foreign currency loan carrying interest rate of SOFR 75bps to 150bps (previous year SOFR 100bps to 150bps)

There are no Micro, small and medium enterprises to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2025. This information as required to be disclosed under the Micro-small and medium enterprises development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

33 Employment Benefit Plans

a. Defined Contribution Plan

The Company makes contributions towards Employees Provident Fund and Family Pension Fund for qualifying employees. The Fund is operated by the Regional Provident Fund Commissioner. The amount of contribution is recognised as expense for defined contribution plans.

Total contribution made by the employer to the Fund during the year is ^ 132.20 Lacs (Previous Year ^63.03 Lacs).

b. Defined Benefit Plan & Other Long Term Benefits

i Gratuity

The Company makes payment to vested employees as per provisions of Payment of Gratuity Act, 1972. The provision of Gratuity liability as on the Balance Sheet date is done on actuarial valuation basis for qualifying employees, however the same is not funded to any trust or scheme.

The present value of the Defined Benefits obligation and the related current service cost is measured using the Projected Unit Credit Actuarial Method at the end of Balance Sheet date by the Actuary.

ii Leave Encashment

The Company provides benefit of leave encashment to its employees as per defined rules. The provision for liability for leave encashment as on date of Balance Sheet is recognised on the basis of Actuarial certificate

... The following table set out the status of Gratuity and Leave encashment plans as required

ⁱⁱⁱ under Ind AS-19

Description of Risk Exposures:

Valuations are based on certain assumptions, which are dynamic in nature and vary over time.

As such company is exposed to various risks as follow -

A Salary Increases- Actual salary increases will increase the Plan''s liability. Increase in salary increase rate assumption in future valuations will also increase the liability.

B Investment Risk - If Plan is funded then assets liabilities mismatch & actual investment return on assets lower than the discount rate assumed at the last valuation date can impact the liability.

C Discount Rate : Reduction in discount rate in subsequent valuations can increase the plan''s liability.

37 Contingent Liabilities and Contingent Assets 1 Contingent Liabilities not provided for in respect of:		(^ in Lacs)
Particulars	As at 31^st March 2025	As at 31^st March 2024
I Guarantees
a Outstanding bank guarantee	8.01	8.01
II Other contingent liabilities
a Export Bills Discounted/Collection	5895.62	5338.97
b Income Tax Demand	79.46	71.90
c GST Demand	105.57	-

2 Commitments

a. The Company has an outstanding export obligation of approx. LNil Lacs (Previous Year ^ 4492.18 Lacs), in respect of capital goods imported at the concessional rate of duty under Export Promotion Capital Goods Scheme, which is required to be met at different dates on or before 21st March,2029

ii Events occurring after the Balance sheet date

The Company''s Board of Directors have recommended final dividend of ^ Nil per equity share (previous year 0.50/- per equity share) for the financial year 2024-25.

39 Financial instrumentFair value of financial assets and liabilities

The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Comparison by class of the carrying amounts and fair value of the Company''s financial instruments that are recognised in the financial statements are set out below.

The carrying value and fair value of financial instruments by categories as of 31st March 2025 were as follows:

* Amount carried at forward contract rate / prevailing exchange rate at year end

The fair value hierarchy is based on inputs to valuation techniques that are use to measure fair value that are either observable or unobservable and consists of the following three levels :

Level 1: Quoted prices in active markets for identical assets and liabilities

Level 2: Directly or indirectly observable market inputs, other than Level 1 inputs. This includes the assets and liabilities carried at forward contract rates / prevailing exchange rate at year end and assets carried at present value using appropriate discounting rate

Level 3: Inputs which are not based on observable market data.

40 Financial risk management Objectives and Policies i Capital Management

For the purpose of the Company''s capital management, capital in cludes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to ensure that it maintains an efficient capital structure and healthy capital ratios in order to support its business and maximise shareholder value.

The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to shareholders. The capital structure of the Company is based on management''s judgement of its strategic and day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence. The management and the Board of Directors monitors the return on capital as well as the level of dividends to shareholders. The Company may take appropriate steps in order to maintain, or if necessary adjust, its capital structure. The Company monitors capital using a gearing ratio, which is calculated by dividing Net Debt from the Equity. The Company includes within Net Debt, interest bearing loans and borrowings less cash and cash equivalents and under Equity, the Equity Share Capital plus other Equity is considered.

The Company''s Financial Risk Management is an integral part of how to plan and execute its business strategies. The Company''s financial risk management is set by the Managing Board

Company is exposed to following risk from the use of its financial instrument:

a. Credit Risk

b. Liquidity Risk

c. Market Risk

a. Credit Risk

Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Company. The Company categories a loan or receivable for write off when a debtor fails to make contractual payments greater than 2 years past due. Where loans or receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognised in profit or loss

Provision for Expected Credit or Loss

i Financial assets for which loss allowance is measured using 12 month expected credit losses

The Company has assets where the counter-parties have sufficient capacity to meet the obligations and where the risk of default is very low. Accordingly, no loss allowance for impairment has been recognised

ii Financial assets for which loss allowance is measured using life time expected credit losses

The Company provides loss allowance on trade receivables using life time expected credit loss and as per simplified approach.

b. Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation. The Company''s finance department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.

The table below summarises the maturity profile of the Company''s financial liabilities based on contractual undiscounted payment

c. Market Risk

Considering the Company''s existing foothold/experience in the Textile sector, established & diversified client base, association with various international/ domestic agents, it''s competent sales team and an established marketing setup in India and International Market, it does not foresee any problem in marketing its production. "Market Risk is the risk of loss of future earnings, fair values of future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchanges rates, equity prices and other market changes that effect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, and other market changes. The Company manages market risk through a finance department, which evaluates and exercises independent control over the entire process of market risk management. The finance department recommends risk management objectives and policies, which are approved by Senior Management and the Audit Committee. The activities of this department include management of cash resources, implementing hedging strategies for foreign currency exposures, borrowing strategies, and ensuring compliance with market risk limits and policies".

i Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rate. In order to optimise the Company''s position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

At the reporting date the interest rate profile of the Company''s interest-bearing financial instruments is as follows.

Detail of financial instrument bearing interest rate risk

At the reporting date the interest rate profile of the Company''s interest bearing financial instrument is at its fair value.

a. The Company hedges its export realizations and import payables through Foreign Exchange Hedge Contracts in the normal course of business so as to reduce the risk of exchange fluctuations. No Foreign Exchange Hedge Contracts are taken /used for trading or speculative purpose.

b. The Company has no forward contract exposure outstanding as on balance sheet date.

d. The movement in OCI during the year ended 31.03.2025 for forward contract designated as cash flow hedge is as follows:

41 Operating Segments

The company''s operation predominantly related to textile. Hence primary reportable segment is textile only. Further the geographical segment have been considered as secondary segment and bifurcated into Domestic and Export segments.

The explanations for the ratios having movement more than 25% are as follows:

i Return on Capital Employed -Due to improve in profitability the ROCE has improve by 29%

ii Net Capital turnover ratio- Despite of accumulated profit been used for expansion project, from the better management of the net capital the ratio is improve to 47% i.e 44.76 times

iii Debt Service Coverage Ratio- Due to Improve in profitability the DSCR has improve by 13%

iv Return on Equity Ratio- The company has completed its expansion project at the end of the previous year, this year is being establishment period therefore the ROE is reduce by 20%

v Net Profit Ratio- Being the establishment period of the project the net profit ratio is changed by 36 %

f The company has not advance for loans or invested funds to any other person or entity including foreign entity during the year with the understanding that the intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner what so ever by or on behalf of the company (ultimate beneficiaries) or provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

g The company has not received any fund from any person or entity including foreign entity (funding party) during the year with the understanding that the company shall directly or indirectly lend or invest in other persons or entities identified in any manner what so ever by or on behalf of the funding party (ultimate beneficiaries) or provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

h The Company has not surrendered or disclosed any transaction not recorded in the books of accounts as income during the year in the tax assessment under the Income Tax Act. 1961

i The company has not made any transaction in crypto currency or virtual currency during the year

Mar 31, 2024

XII. Provisions, Contingent Liabilities

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

Contingent Liability is disclosed after careful evaluation of facts, uncertainties and possibility of reimbursement, unless the possibility of an outflow of resources embodying economic benefits is remote. Contingent liabilities are not recognized but are disclosed in notes.

Contingent assets are not recognized. However, when the realization of income is virtually certain, then the related asset is no longer a contingent asset, but it is recognized as an asset.

XIII. Dividends

Dividends and Interim dividends payable to a Company''s shareholders are recognised as changes in equity in the period in which they are approved by the shareholders'' meeting and the Board of Directors respectively.

XIV. Segment reporting

The dominant source of income of the company is from the manufacturing of Yarn of various quality which do not materially differ in respect of risk perception and the return realized/to be realized. Even the geographical environment in which the company operates does not materially differ considering the political and economic environment, the type of customers, assets employed and the risk and return associated in respect of each of the geographical area. So, the disclosure requirements pursuant to Ind AS 108 Segment Reporting is not applicable to the company.

XV. Earnings per share

Basic earnings per share are computed by dividing the profit/loss for the year attributable to the shareholders of the Company by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit/loss for the year attributable to the shareholders of the Company as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.

XVI. Statement of Cash flow

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

XVII. Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of the assets, until such time as the assets are substantially ready for their intended use or sale.

Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

All other borrowing costs are recognised in statement of profit and loss in the period in which they are incurred.

XVIII. Fair Value Measurement

The Company measures financial instruments, such as, derivatives at fair value at each balance sheet date.

Fair value is the price 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. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

â¢ In the principal market for the asset or liability, or

â¢ In the absence of a principal market, in most advantageous market for the asset or liability and the Company has access to the principal or the most advantageous market.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements 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) market prices in active markets for identical assets or liabilities

Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Company has determined classes of assets & liabilities on the basis of the nature, characteristics and the risks of the asset or liability and the level of the fair value hierarchy as explained above. This note summarizes accounting policy for fair value. Other fair value related disclosures are given in the relevant notes.

XIX. Cash and cash equivalents

The Company considers all highly liquid financial instruments, which are readily convertible into known amounts of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents. Cash and cash equivalents consist of balances with banks which are unrestricted for withdrawal and usage.

For the purposes of the presentation of cash flow statement, cash and cash equivalents include cash on hand, in banks and demand deposits with banks, net of outstanding bank overdrafts that are repayable on demand, book overdraft as they being considered as integral part of the Company''s cash management system.

XX. Financial instruments

Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss (FVTPL) are recognized immediately in the statement of profit and loss.

Financial assets

For purposes of subsequent measurement, financial assets are classified in below mentioned categories:

â¢ Financial assets carried at amortized cost.

â¢ Financial asset at fair value through other comprehensive income.

â¢ Financial asset at fair value through profit or loss.

Financial assets at amortized cost

Financial assets are subsequently measured at amortized cost using the effective interest method if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at fair value through other comprehensive income

Financial assets are measured at fair value through other comprehensive income (OCI) if these financial assets are held within a business model whose objective is achieved by both selling financial assets and collecting contractual cash flows, the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition, the Company makes an irrevocable election on an instrument-by-instrument basis to present the subsequent changes in fair value in other comprehensive income pertaining to investments in equity instruments, other than equity investment which are held for trading. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in the "Reserve for equity instruments through other comprehensive income''. The cumulative gain or loss is not reclassified to the statement of profit and loss on disposal of the investments. So far, the Company has not elected to present subsequent changes in fair value of any investment in OCI.

Investment in equity instruments are classified as at FVTPL, unless the Company irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for investment in equity instruments which are not held for trading.

Other financial assets are measured at fair value through profit or loss unless it is measured at amortized cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognized in Statement of profit or loss.

Impairment of financial assets (other than at fair value)

The Company measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. If the credit risk on a financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses.

However, for trade receivables, the Company measures the loss allowance at an amount equal to lifetime expected credit losses. In cases where the amounts are expected to be realized up to one year from the date of the invoice, loss for the time value of money is not recognized, since the same is not considered to be material.

De-recognition of financial assets

The Company derecognized a financial asset when the contractual right to the cash flow from the asset expires or when it transfers the financial asset and substantially all risk and reward of ownership of the asset to other party. If the Company neither transfers nor retains substantially all the risk and reward of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the asset and an associate liability for an amount it has to pay. If the Company retains substantially all the risks and reward of ownership of a transferred financial asset, the company continues to recognize the financial asset and also a collateralized borrowing for the proceeds received.

Financial liabilities

All financial liabilities are subsequently measured at amortized cost using the effective interest method. Classification as debt or equity

Debt and equity instruments issued by a Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.

Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the effective interest rate (EIR)method. Gains and losses are recognized in the statement of profit or loss when the liabilities are derecognized as well as through the effective interest rate (EIR) amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.

Trade and other Payables

These amounts represent liabilities for goods & services provided to the Company prior to the end of the financial year which are unpaid. These are recognized initially at fair value and subsequently measured at amortized cost using effective interest method. Where the maturity period is within one year from balance sheet date, the carrying amount approximate the fair value at initial recognition due to short maturity of these instruments.

De-recognition of financial liabilities

The Company derecognizes financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in the statement of profit and loss.

Reclassification of financial assets and financial liabilities

The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The Company''s senior management determines change in the business model as a result of external or internal changes which are significant to the Company''s operations. Such changes are evident to external parties. A change in the business model occurs when the Company either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Company does not restate any previously recognized gains, losses (including impairment gains or losses) or interest.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

XXI. Impairment of Non-Financial assets

The non-financial assets, other than biological assets, inventories and deferred tax asset are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indications exist, then the asset''s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets that do not generate independent cash inflows are grouped together into cash generating units (CGUs). Each CGU represents the smallest group of assets that generate cash inflows that are largely independent of the cash inflows of other assets or CGUs.

Goodwill arising from the business combination is allocated to CGUs or groups of CGUs that are expected to benefits from the synergies of the combination.

The recoverable amount of the CGU (or an individual asset) is the higher of its value in use and its fair value less cost to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre- tax discount rate that reflects current market assessment of the time value of money and the risks specifics to the CGU (or the asset).

The corporate assets (e.g. central office building for providing support to various CGUs) do not generate independent cash inflows. To determine impairment of a corporate asset, recoverable amount is determined for the CGUs to which the corporate asset belongs.

The impairment loss is recognized if the carrying amount of the asset or the CGU exceeds its estimated recoverable amount. Impairment losses are recognized in the statement of profit & loss. Impairment loss recognized in respect of CGU is allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amount of the CGU(or group of CGUs) on a pro rata basis.

An impairment loss in respect of goodwill is not subsequently reversed. In respect of other assets for which impairment loss has been recognized in prior periods, the company reviews at each reporting date whether there is any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Such a reversal is made only to the extent that the asset''s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

XXII. Use of estimates

The preparation of the financial statement in conformity with Ind AS requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and current and / or future periods are affected.

XXIII. Critical accounting judgments and key sources of estimation uncertainty

The preparation of the Company''s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities.

â¢ Critical accounting judgments in applying accounting policies

The following are the critical judgments, apart from those involving estimations that the Management have made in the process of applying the Company''s accounting policies and that have most significant effect on the amounts recognised in the financial statements.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and other post-employment medical benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate; future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.

Impairment of financial assets

The impairment provisions for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgment in making assumption and selecting the inputs to the impairment calculation, based on Company''s past history, existing market conditions as well as forward estimate at the end of each reporting period.

Income taxes

Management judgment is required for the calculation of provision for income taxes and deferred tax assets and liabilities. The Company reviews at each balance sheet date the carrying amount of deferred tax assets. The factors used in estimates may differ from actual outcome which could lead to significant adjustment to the amounts reported in the financial statements.

Contingencies

Management judgment is required for estimating the possible outflow of resources, if any, in respect of contingencies/claim/ litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.

Insurance claims

Insurance claims are recognized when the Company has reasonable certainty of recovery. Subsequently any change in recoverability is provided for.

XXIV. Key Source of estimation uncertainty

Key source of estimation uncertainty at the date of the financial statements, which may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year, is in respect of impairment of investments, provisions and contingent liabilities.

The areas involving critical estimates are:

Useful lives and residual values of property, plant and equipment

Useful life and residual value of property, plant and equipment are based on management''s estimate of the expected life and residual value of those assets and is as per schedule II to the Companies Act 2013. Further useful lives of manufacturing machines are recognized treating the same as ''Continuous Process Plant''. These estimates are reviewed at the end of each reporting period. Any reassessment of these may result in change in depreciation expense for future years.

Impairment of property plant and equipment

The recoverable amount of the assets has been determined on the basis of their value in use. For estimating the value in use, it is necessary to project the future cash flow of assets over its estimated useful life. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for in statement of profit and loss.

Valuation of deferred tax assets

Deferred tax assets are recognized only to the extent it is considered probable that those assets will be recoverable. This involves an assessment of when those deferred tax assets are likely to reverse and a judgment as to whether or not there will be sufficient taxable profits available to offset the tax assets when they do reverse. The Company reviews the carrying amount of deferred tax assets at the end of each reporting period. Any change in the estimates of future taxable income may impact the recoverability of deferred tax assets.

Provisions and contingencies

A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the balance sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes. Contingent assets are not recognized but disclosed in the financial statements wherever applicable.

Conditions of Term Loans are summarised below:

Nature of Security

1. a. Term Loan of '' 5369.74 Lacs ( '' 7157.42 Lacs as at 31^st March, 2023) are secured by first pari passu

charge on all fixed assets (present & future) including equitable mortgage of factory land and building of the company. Second pari passu charge on all the current assets of company both present & future. The loans are further secured by personal guarantee and equitable mortgage of Residential House of Mr. D. P. Mangal, Land of Mr. Anand Mangal & Mr. Shubh Mangal and corporate guarantee of M/s Lagnam Infotech Solutions Private Limited.

b. Term Loan of '' 16299.73 Lacs ('' 1244.62 Lacs as at 31^st March, 2023) are secured by first pari passu charge on all fixed assets (present & future) including equitable mortgage of factory land and building of the company. Second pari passu charge on all the current assets of company both present & future. The loans are further secured by personal guarantee of Mr. D. P. Mangal , Land of Mr. Anand Mangal & Mr. Shubh Mangal.

c. Term Loan of '' 3090.35 Lacs ('' 3954.54 Lacs as at 31^st March, 2023) are secured by second charge on all fixed and current assets (present & future). The loans are further secured by equitable mortgage of Residential House of Mr. D. P. Mangal , Land of Mr. Anand Mangal & Mr. Shubh Mangal.

d. Term Loan of '' 1355.23 Lacs ('' Nil Lacs as at 31^st March, 2023) are secured by hypothecation of proposed plant and machinery in form of solar panel and other ancillary

e. Vehicle loan of '' 31.22 Lacs ('' 25.53 Lacs as at 31^st March, 2023) are secured against respective vehicles.

Terms of Repayment of Secured Borrowing

2. a. Secured term loans from bank are repayable in quarterly installment and having floating interest rate

ranging from MCLR spread 0.40% to 0.80% and 3M T-Bill as at 31st March 2024 (Previous Year 0.25% to 0.85% as at 31^st March 2023)

b Vehicle loans are repayable in monthly installments and having fixed interest rates 8.50% to 9.45%. (Previous Year 8.50% and 9.45%)

c Term loans under ECLGS from banks are repayable in monthly installment and having floating interest rate MCLR spread 1.00% and EBLR with cap of 9.25% as at 31st March 2024 (Previous Year MCLR spread 0.60 to 1.00% as at 31^st March 2023) Period of maturity and installments outstanding are as under-

34. Employment Benefit Plans

a. Defined Contribution Plan

Total contribution made by the employer to the Fund during the year is Rs. 50.12 Lacs (Previous Year Rs. 63.03 Lacs).

b. Defined Benefit Plan & Other Long Term Benefits

i Gratuity

The present value of the Defined Benefits obligation and the related current service cost is measured using the Projected Unit Credit Actuarial Method at the end of Balance Sheet date by the Actuary.

ii Leave Encashment

iii The following table set out the status of Gratuity and Leave encashment plans as required under Ind AS-19

40. Financial instrument

Fair value of financial assets and liabilities

41. Financial risk management Objectives and Policies

i Capital Management

For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to ensure that it maintains an efficient capital structure and healthy capital ratios in order to support its business and maximise shareholder value. âThe Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to

ii Financial Risk Management

The Company''s Financial Risk Management is an integral part of how to plan and execute its business strategies. The Company''s financial risk management is set by the Managing Board

Company is exposed to following risk from the use of its financial instrument:

a. Credit Risk

b. Liquidity Risk

c. Market Risk

a. Credit Risk

Provision for Expected Credit or Loss

i Financial assets for which loss allowance is measured using 12 month expected credit losses

ii Financial assets for which loss allowance is measured using life time expected credit losses

The Company provides loss allowance on trade receivables using life time expected credit loss and as per simplified approach.

b. Liquidity Risk

c. Market Risk

Considering the Company''s existing foothold/experience in the Textile sector, established & diversified client base, association with various international/domestic agents, it''s competent sales team and an established marketing setup in India and International Market, it does not foresee any problem in marketing its production. âMarket Risk is the risk of loss of future earnings, fair values of future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchanges rates, equity prices and other market changes that effect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, and other market changes. The Company manages market risk through a finance department, which evaluates and exercises independent control over the entire process of market risk management. The finance department recommends risk management objectives and policies, which are approved by Senior Management and the Audit Committee. The activities of this department include management of cash resources, implementing hedging strategies for foreign currency exposures, borrowing strategies, and ensuring compliance with market risk limits and policies".

i Interest Rate Risk

It is the risk where changes in market interest rates might adversely affect the Company''s financial condition. The short term/immediate impact of changes in interest rates are on the Company''s net interest income/expenses. On a longer term, change in interest rate impact the cash flows on the assets, liabilities and off-balance sheet items, giving rise to a risk to the net worth of the Company arising out of all reprising mismatches and other interest rate sensitive positions. Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rate. In order to optimise the Company''s position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

At the reporting date the interest rate profile of the Company''s interest-bearing financial instruments is as follows.

Detail of financial instrument bearing interest rate risk

The explanations for the ratios having movement more than 25% are as follows:

i Return on Equity Ratio - Due to better profitability the ROE is improve by 27%

ii Current ratio - The Deployment of accumulated profit has been used for expansion project during the year therefore the ratio has changed

iii Debt Equity Ratio - The company has completed its expansion project during this year and major loan taken against the same during this year therefore the DE ratio has increased

vi Net Capital turnover ratio - Accumulated profit has been used for expansion project during the year therefore the ratio has changed

h The Company has not surrendered or disclosed any transaction not recorded in the books of accounts as income during the year in the tax assessment under the Income Tax Act. 1961

i The company has not made any transaction in crypto currency or virtual currency during the year

As per our report of even date For and on behalf of the Board

For SSMS & Associates D.P. Mangal Anand Mangal

Chartered Accountants (Executive Chairman) (Managing Director)

Firm Reg. No. 019351C (DIN01205208) (DIN 03113542)

Satish Somani Rajeev Parashar D L Mundra

(Partner) (Company Secretary) (Chief Financial Officer)

Membership No. 076241

Date : 29^th April, 2024 Place : Bhilwara

Mar 31, 2023

Explanatory Notes:

i All Property, Plant and Equipmentâs mentioned above are held as security towards Borrowings as specified in Note 15 & 18.

ii Depreciation on plant & Machinery is charged considering the same âContinuous Process Plantâ based on technical expertâs advice.

1. Term/Right attached to the Equity share

The company has only one class of Equity Share having a par value of ? 10/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed, if any, by the Board of Directors is subject to the approval of the shareholders in the ensuring Annual General Meeting, except in case of interim dividend.

In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

4. Bonus Share

During F Y 2017-2018 the company has issued 91,71,000 fully paid up Equity Shares of face value ?10/-each as bonus shares by capitalisation of reserves in ratio of 9:2 shares.

Secured

Conditions of Term Loans are summarised below:

Nature of Security

1 a. Term Loan of? 7157.42 Lacs (? 8477.29 Lacs as at 31^st March, 2022) are secured by first pari passu charge on all fixed assets (present & future) including equitable mortgage of factory land and building of the company. Second pari passu charge on all the current assets of company both present & future. The loans are further secured by personal guarantee and equitable mortgage of Residential House of Mr.D.P. Mangal, Land of Mr. Anand Mangal & Mr. Shubh Mangal and corporate guarantee of M/s Lagnam Infotech Solutions Private Limited.

b. Term Loan of? 1244.62 Lacs (? Nil Lacs as at 31^st March, 2022) are secured by first pari passu charge on all fixed assets (present & future) including equitable mortgage of factory land and building of the company. Second pari passu charge on all the current assets of company both present & future. The loans are further secured by personal guarantee of Mr.D.P. Mangal, Land of Mr. Anand Mangal & Mr. Shubh Mangal.

c. Vehicle loan of ? 25.53 Lacs (? 10.03 Lacs as at 31^st March, 2022) are secured against respective vehicles.

d. Term Loan of? 3954.54 Lacs (? 4513.98 Lacs as at 31^st March, 2022) are secured by second charge on all fixed and current assets (present & future). The loans are further secured by equitable mortgage of Residential House of Mr. D.P.Mangal, Land of Mr. Anand Mangal & Mr. Shubh Mangal.

Terms of Repayment of Secured Borrowing

2. a Secured term loans from bank are repayable in quarterly installment and having floating interest rate ranging from MCLR spread 0.25% to 0.85% as at 31^st March 2023 (Previous Year 0.40% to 0.80% as at 31st March 2022)

b Vehicle loans are repayable in monthly installments and having fixed interest rates 8.50% and 9.45%. (Previous Year 9.45%)

c Term loans under ECLGS from banks are repayable in monthly installment and having floating interest rate ranging from MCLR spread 0.60% to 1.00% and EBLR as at 31^st March 2023 (Previous Year MCLR 1.00% as at 31^st March 2022). Period of maturity and installments outstanding are as under-

* Includes reversal of deferred tax liability of Rs.66.37 lacs which Is adjusted against previous year tax liability.

Note : Deferred tax assets and deferred tax liability have been offset as they relate to the same governing taxation laws.

Conditions of Working Capital Loan are summarised below:

Floating Rate - Rupee loan carrying floating interest rate of MCLR Nil % to 1.25% and 3M T-bill as at 31st March 2023 (Previous Year 0.75% to 1.15%) and foreign currency loan carrying interest rate of SOFR 100bps to 150bps (previous year LIBOR 100bps to 150bps)

There are no Micro, small and medium enterprises to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2023. This information as required to be disclosed under the Microsmall and medium enterprises development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

34. Employment Benefit Plans

a. Defined Contribution Plan

Total contribution made by the employer to the Fund during the year is Rs.63.03 Lacs (Previous Year Rs.54.66 Lacs).

b. Defined Benefit Plan & Other Long Term Benefits i Gratuity

The present value of the Defined Benefits obligation and the related current service cost is measured using the Projected Unit Credit Actuarial Method at the end of Balance Sheet date by the Actuary.

11 Leave Encashment

iii The following table set out the status of Gratuity and Leave encashment plans as required under Ind AS-19

g. The estimates of future salary increase; considered in actuarial valuation, take account of inflation,

seniority, promotions and other relevant factors such as supply and demand in the employment market.

Description of Risk Exposures:

Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As

such company is exposed to various risks as follow -

A Salary Increases- Actual salary increases will increase the Planâs liability. Increase in salary increase

rate assumption in future valuations will also increase the liability.

B Investment Risk - If Plan is funded then assets liabilities mismatch & actual investment return on assets lower than the discount rate assumed at the last valuation date can impact the liability.

C Discount Rate : Reduction in discount rate in subsequent valuations can increase the planâs liability.

D Mortality & disability - Actual deaths & disability cases proving lower or higher than assumed in the valuation can impact the liabilities.

E Withdrawals - Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations can impact Planâs liability.

38. Contingent Liabilities and Contingent Assets 1. Contingent Liabilities not provided for in respect of:			(? in Lacs)
Particulars		As at	As at
	31^st March, 2023		31^st March, 2022
I	Guarantees
	a Outstanding bank guarantee	8.01	258.25
II	Other contingent liabilities
	a Export Bills Discounted/Collection	3063.43	2901.15
	b Income Tax Demand	71.90	71.90
	c GST Demand	0.57	â

2 Commitments

a. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) Rs. 13443.98 Lacs (Previous Year Rs.8423.78 Lacs)

b. The Company has an outstanding export obligation of approx. Rs. 19370.05 Lacs (Previous Year Rs. 15247.52 Lacs), in respect of capital goods imported at the concessional rate of duty under Export Promotion Capital Goods Scheme, which is required to be met at different dates on or before 21st March,2029

40. Financial instrument

Fair value of financial assets and liabilities

The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Comparison by class of the carrying amounts and fair value of the Companyâs financial instruments that are recognised in the financial statements are set out below.

* Amount carried at forward contract rate / prevailing exchange rate at year end

The fair value hierarchy Is based on inputs to valuation techniques that are use to measure fair value that are either observable or unobservable and consists of the following three levels :

Level 1: Quoted prices in active markets for identical assets and liabilities

Level 3: Inputs which are not based on observable market data.

41. Financial risk management Objectives and Policies i Capital Management

For the purpose of the Companyâs capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Companyâs capital management is to ensure that it maintains an efficient capital structure and healthy capital ratios in order to support its business and maximise shareholder value. The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to shareholders. The capital structure of the Company is based on managementâs judgement of its strategic and day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence. The management and the Board of Directors monitors the return on capital as well as the level of dividends to shareholders. The Company may take appropriate steps in order to maintain, or if necessary adjust, its capital structure. The Company monitors capital using a gearing ratio, which is calculated by dividing Net Debt from the Equity. The Company includes within Net Debt, interest bearing loans and borrowings less cash and cash equivalents and under Equity, the Equity Share Capital plus other Equity is considered.

ii Financial Risk Management

The Companyâs Financial Risk Management is an integral part of how to plan and execute its business strategies. The Companyâs financial risk management is set by the Managing Board.

Company is exposed to following risk from the use of its financial instrument:

a. Credit Risk

b. Liquidity Risk

c. Market Risk

a. Credit Risk

Provision for Expected Credit or Loss

i Financial assets for which loss allowance is measured using 12 month expected credit losses

ii Financial assets for which loss allowance is measured using life time expected credit losses

The Company provides loss allowance on trade receivables using life time expected credit loss and as per simplified approach.

b. Liquidity Risk

as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Companyâs net liquidity position through rolling forecasts on the basis of expected cash flows.

The table below summarises the maturity profile of the Companyâs financial liabilities based on contractual undiscounted payment:

c. Market Risk

Considering the Companyâs existing foothold/experience in the Textile sector, established & diversified client base, association with various international/domestic agents, itâs competent sales team and an established marketing setup in India and International Market, it does not foresee any problem in marketing its production. âMarket Risk is the risk of loss of future earnings, fair values of future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchanges rates, equity prices and other market changes that effect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, and other market changes. The Company manages market risk through a finance department, which evaluates and exercises independent control over the entire process of market risk management. The finance department recommends risk management objectives and policies, which are approved by Senior Management and the Audit Committee. The activities of this department include management of cash resources, implementing hedging strategies for foreign currency exposures, borrowing strategies, and ensuring compliance with market risk limits and policies".

i. Interest Rate Risk

It is the risk where changes in market interest rates might adversely affect the Companyâs financial condition. The short term/immediate impact of changes in interest rates are on the Companyâs net interest income/expenses. On a longer term, change in interest rate

impact the cash flows on the assets, liabilities and off-balance sheet items, giving rise to a risk to the net worth of the Company arising out of all reprising mismatches and other interest rate sensitive positions. Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rate. In order to optimise the Companyâs position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

At the reporting date the interest rate profile of the Companyâs interest-bearing financial instruments is as follows.

Detail of financial instrument bearing interest rate risk

At the reporting date the interest rate profile of the Companyâs interest bearing financial instrument is at its fair value.

ii. Foreign Exchange Risk

b. The Company has no forward contract exposure (previous year Rs. Nil) outstanding as on balance sheet date.

Sensitivity Analysis

The Company has no forward contract exposure (previous year Rs. Nil) outstanding as on balance sheet date.

42. Operating Segments

The Companyâs operation predominantly relates to textiles. Hence primaiy reportable segment is textile only. Further the geographical segment have been considered as secondary segment and bifurcated into Domestic & Export segments.

44 Additional regulatory informations

a During the year the company has taken term loan of Rs. 1244.62 lacs for Ring Spinning Expansion Project of 41472 spindles and term loan of Rs.252.00 lacs under GECL scheme for its working capital requirement. The same has been utilized for the same purpose only.

b The Company has borrowings of Rs. 6008.47 lacs from banks on the basis of security of current assets. All the quarterly returns or statements of current assets filed by the company during the year with banks are in agreement with books of accounts.

c The Company has not been declared willful defaulter by any banks or other lender during the year.

The explanations for the ratios having movement more than 25% are as follows:

i. Current Ratio - The deployment of accumulated profits has been used for the expansion project during the year therefore the ratio has changed.

ii. Debt Service Coverage Ratio - Due to Russia-Ukraine war, higher cotton prices, global slowdown & high Inflation rate resulted in low demand in the market due to which the margins were lower during the year but the company has repaid all itâs obligation well in time.

iii. Return on Equity Ratio - Due to Lower profitability the ROE has reduced.

iv. Inventory Turnover Ratio - Exports of the company affected by Russia Ukraine war & international disturbances during the year, therefore average inventory level has gone up.

v. Net Capital Turnover Ratio - Due to better management of working capital the net capital turnover ratio has improved.

vi. Net Profit Ratio - Due to higher raw material prices and lower demand in the export & domestic market, margins were lower during the year therefore the net profit ratio has reduced.

vii. Return on Capital Employed - Due to deployment of funds in the ongoing expansion project and lower profitability during the year the capital employed has increased, therefore the ROCE has gone down.

e The company has not advanced for loaned or invested funds to any other person or entity including

foreign entity during the year with the understanding that the intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner what so ever by or on behalf of the company (ultimate beneficiaries) or provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

f The company has not received any fund from any person or entity including foreign entity (funding

party) during the year with the understanding that the company shall directly or indirectly lend or invest in other persons or entities identified in any manner what so ever by or on behalf of the funding party (ultimate beneficiaries) or provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

g The Company has not surrendered or disclosed any transaction not recorded in the books of accounts as income during the year in the tax assessment under the Income Tax Act, 1961.

h The company has not made any transaction in crypto currency or virtual currency during the year.

Mar 31, 2018

1. Term/Right attached to the Equity share

The company has only one class of Equity Share having a par value of Rs. 10/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuring Annual General Meeting, except in case of interim dividend.

In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

2. Bonus Share

During the year the company has issued 91,71,000 fully paid up Equity Shares of face value Rs. 10/- each as bonus shares by capitalisation of reserves in ratio of 9:2 shares.

Secured

Conditions of Term Loans are summarised below:

Nature of Security

1. Security - First pari passu charge on all fixed assets (present & future) including equitable mortage of factory land and building of the company. Second parri passu charge on all the current assets of company both present & future. The loans are further secured by personal guarantee and equitable mortage of personal assets of D.P.Mangal and Anand Mangal. Vehicle loan are secured against respective vechile.

2. Term loans are further secured by personal guarantee & equitable mortgage of personal assets of Shubh Mangal and corporate guarntee of M/s Lagnam Infotech Soluations Private Limited.

Terms of Repayment of Secured Borrowing

3. Secured term loans from bank are repayable in quartely installment and having floating interest rate ranging from Base Rate/MCLR spread ranging from 0.85% to 1.70% as on 31.03.2018 (P.Y. 2.10 % to 2.65 % as on 31.03.2017) and vehclie loans are repayable in monthly installments and having fixed interest rate 9.40. Period of maturity and installments outstanding are as under-

Conditions of Working Capital Loan are summarised below:

Security - Hypothecation of stocks, book debts and other current assets of the company and second charge on fixed assets of the company on pari passu basis. Further Personal Guarantee and collateral security of equitable mortgage of land of D.P.Mangal,Anand Mangal and Shubh Mangal and corporate guarnteee of M/s Lagnam Infotech Solutions Private Limited is given.

Floating Rate - Carrying floating interest rate of Base rate/ MCLR 0.45 to 0.50% as on 31.03.2018

There are no Micro, small and medium enterprises to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2018. This information as required to be diclosed under the Microsmall and medium enterprises development Act, 2006 has been determined to the extent such parties have been identified on the basis of informtion available with the Company.

There is no amount of Un-paid dividend, due for payment to the Investor education and Protection Fund under Section 125 of the Companies Act, 2013 as at the year end.

3. In the opinion of the management, the value in realization of current assets, loans & advances in the ordinary course of business would not be less than the amount at which they are stated in the balance sheet and provision for all known liabilities have been made.

4. The company hedges it export realization through foreign exchange derivative & hedge contract in the normal course of business so as to reduce the risk of exchange fluctuations. No foreign exchange derivatives & hedge contract are taken/used for trading or speculation purpose. No unhedge forward contract are outstanding as on 31.03.2018.

5. Related party disclosure in accordance with the accounting standard 18 issued by the ICAI is given below :

i. Enterprises that directly or indirectly through one or more intermediaries, control or are controlled by or are under common control with the reporting enterprises (this includes holding companies, subsidiaries and fellow subsidiaries).

None

ii. Associate & Joint Venture - None

iii. Individuals owning directly or indirectly, on interest in the voting power of the reporting enterprises that gives them control or significant influence over the enterprise, and relatives of any such individual.

None

iv. Key management personnel and their relatives Key Managerial Personnel

a. Shri D. P. Mangal

b. Shri Anand Mangal Relatives of KMP

c. Shri Shubh Mangal

d. Smt. Veena Mangal

e. Smt. Kavita Mangal

v. Enterprises over which any person described in (i) or (iv) is also to exercise significant influence

6. Earning Per Share

The basic and diluted earnings per share have been calculated as per AS-20 by dividing net profit for the year attributable to equity shareholder by the weighted average number of equity share as under:

7. Previous year figures regrouped and rearranged wherever found necessary to make those comparable the same with current year.

8. Additional information pursuant to Part II of Schedule III of the Companies Act, 2013, to the extent applicable:

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