Notes to Accounts of Mangalam Global Enterprise Ltd.

Mar 31, 2025

20.1 Rights, Preferences and Restrictions Attached to Equity Shares:

The Company has one class of equity shares having a par value of Rs. 1/- each. 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 ensuing 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 share holding.

20.2 During the year ended 31st March 2024, pursuant to excercise by warrant holder of 11,25,000 convertible warrants the company has made allotment of 56,25,000 equity shares having face value of Rs. 2/- each fully paidup for cash at a price of Rs. 10.40/- per equity share (including share premium of Rs. 8.40/- per equity share) aggregating to Rs. 112.50 Lakhs (Face Value) & Rs. 472.50 Lakhs (Share Premium). the aforementioned equity shares were allotted on 18th April 2023. the aforesaid equity shares allotted on conversion of warrants, shall rank pari passu, in all respects with the existing equity shares.

20.3 The Committee of Directors (Rights Issue) at its meeting held on 02nd February, 2024, has inter alia considered and approved the rights issue of 2,05,97,225 fully paid-up Equity Shares of Rights issue price of Rs. 20 per equity share (including a premium of Rs. 18 per Equity Share) on Rights basis to the eligible equity shareholders in the ratio of 1 rights equity shares for every 7 equity shares held by the eligible equity shareholder for amount aggregating up to Rs. 4,119.45 Lakhs. Out of the aforesaid issue, 2,05,97,225 equity shares were allotted by the Company on 14th June, 2024.

20.4 The shareholders of the Company in their meeting held on 16th February 2025, approved sub-division/ split of 1 (one) equity share of Rs. 2/- each into 2 (two) equity shares of Rs. 1/- each fully paid up. The effective date for sub division of Equity shares was 4th March 2025. Consequently the split of equity shares is been effected from 4th March 2025.

(a) The Company has issued 37,50,000 convertible equity warrants on 22nd November 2021 at an issue price of Rs. 52/- per warrant on preferential basis to the promoters and person belonging to Promoters'' Group on receipt of the subscription money Rs. 487.50 Lakhs being 25% of the issue price. Such warrants are convertible into equivalent number of fully paid up equity shares of face value of Rs.10/- at a premium of Rs. 42/- each, at an option of the warrant holders, at any time, in one or more tranches, within 18 Months from the date of issue of warrants on the payment of balance 75% amount due on warrants.

(b) During the year ended 31st March 2022, on receipt of Rs. 365.63 Lakhs being 75% of the issue price due on warrants from one warrant holder, the company had converted 9,37,500 convertible warrants and allotted equivalent number of equity shares on 22nd March 2022.

(c) During the year ended 31st March 2023, on receipt of Rs. 658.13 Lakhs being 75% of the issue price due on warrants from three warrant holders, the company has converted 16,87,500 convertible warrants and allotted 5 equity shares per warrant (post sub-division/ split of 1 (one) equity share into 5 (five) equity shares) on 5th November 2022.

(d) During the year ended 31st March 2023, on receipt of Rs. 438.75 Lakhs against due on warrants from three warrant holders, the company has converted 11,25,000 convertible warrants and allotted 5 equity shares per warrant (post sub-division/ split of 1 (one) equity share into 5 (five) equity shares) on 18th April 2023.

26.1 SBI, HDFC Bank, PNB, & Canara Bank have sanctioned working capital facilities (including GECL/WCTL Refer Note No. 22) of Rs. 19,430 Lakhs (reduced from Rs. 19,548 Lakhs) to the company under consortium banking arrangement (SBI consortium) wherein SBI is a lead bank (Total credit limit Rs.19,430 Lakhs), as per details given below:

(i) State Bank of India sanctioned limit of Rs. 5,200 Lakhs (Fund based limit of Rs. 5,000 Lakhs and Non - Fund based Limit of Rs. 200 Lakhs).

(ii) Punjab National Bank Sanctioned Limit of Rs. 4,539 Lakhs (reduced from Rs. 4557 Lakhs) (Fund based limit of Rs. 4,539 Lakhs)

(iii) HDFC Bank Limited sanctioned limit of Rs. 5,191 Lakhs (Fund based Limit of Rs. 5,191 Lakhs)

(iv) Canara bank sanctioned limit of Rs. 4,500 Lakhs (Fund based limit of Rs. 4,500 Lakhs)

SBI consortium has appointed PNB Investment Services Limited as "Security Trustee".

Working capital facilities are secured by Pari passu first charge by way of hypothecation over entire current assets of the

Company and Pari passu second charge by way of Hypothecation of proposed Plant & machinery to be procured out of Term Loan granted by SBI. (Refer Note No. 26.2)

Working capital facilities granted by SBI Consortium are secured by collateral securities. (Refer Note No. 26.3)

26.2 Working capital facilities granted by SBI consortium Rs. 19,430 Lakhs:

Charge in favor of PNB Investment Services Limited of Rs. 19,430 Lakhs.

Pari passu first charge by way of hypothecation over entire current assets (present & Future, except mentioned below) of the Company including Raw Material, Stock in Process, Stock in Transit, Finished Foods, Stores, Spares & Receivables etc., kept at all owned/leased factory premises of the company or at any other place and Pari passu second charge by way of Hypothecation of proposed Plant & machinery to be procured out of Term Loan granted by SBI.

26.3 Collateral Securities for both Working capital facilities of Rs. 19,430 Lakhs granted by SBI Consortium.

As per sanction terms, charge on following collateral securities to be created:

1 Pari Passu 1st charge by way of Equitable Mortgage over factory land and Building at Block/Survey No. 155 paiki admeasuring about 13873 sq. mtrs of Khata No 447 (Old Account no. 350 admeasuring about 6791 sq. mtrs and Account no. 349 admeasuring about 7082 sq. mtrs) along with construction of factory building standing thereon of Mouje: Lodariyal, Taluka: Sanand, District: Ahmedabad in the name of Mangalam Global Enterprise Limited.

2 Pari Passu 1st charge by way of Equitable Mortgage over immovable property being residential Plot/Unit No. 17, admeasuring about 428 sq.mtr., along with rights to use common roads and common plots in the scheme known as "ORCHID GREENS", situated upon non-agricultural land bearing amalgamated Block No. 78 of mouje: Sanathal, Taluka: Sanand, District: Ahmedabad in the name of Mangalam Global Enterprise Limited.

3 Pari Passu 1st charge by way of Equitable Mortgage over immovable property being residential Bungalow at Sub -plot No. 31, admeasuring about 451 sq.mts., together with construction standing thereon in the Samast Brahmkshatriya Cooperative Housing Society Limited situated upon non-agricultural land bearing final Plot No. 98 in the Town Planning Scheme No. 22 of mouje: Paldi, Taluka: Sabarmati, District: Ahmedabad in the name of Mangalam Global Enterprise Limited.

4 Pari Passu 1st charge by way of Equitable Mortgage over immovable property being Commercial Office No. 201 on second floor, admeasuring about 502.51 sq.mts., together with undivided share admeasuring about 158 sq.mts., and having rights in the common facilities and amenities in the scheme known as "SETU COMPLEX" of Setu (commercial) non-trading Association, situated upon the non-agricultural land bearing Final Plot No. 324/3, in the Town Planning Scheme No. 3 being allotted City Survey No. 2984, of mouje: Changispur, Taluka: Sabarmati, District: Ahmedabad in the name of Mangalam Global Enterprise Limited

5 Pari Passu 1st charge by way of Equitable Mortgage over immovable property being Sub -Plot No. C-4-B (as per approved plan Sub plot No. 3-4-B), admeasuring about 5400 sq.mts., together with construction standing thereon situated upon non - agricultural land bearing Survey Nos. (i) 943/2 (Revenue Account No. 1208) (Old Survey No. 242), admeasuring about 2256 sq.mtr., and (ii) 944/2 (Revenue Account No. 3144) (old Survey No. 243), admeasuring about 3144 sq.mtr., total admeasuring about 5400 sq.mts., known as "Prathana Upvan", of Prathana Co-operative Housing Society Limited at mouje: Manipur, Taluka: Sanand, District: Ahmedabad in the name of Mangalam Global Enterprise Limited and Specific Worldwide LLP

6 Pari Passu 1st charge by way of Equitable Mortgage over non- agricultural bearing Survey/Block No. 1025/3, admeasuring about 40266 sq.mts., paiki northern side admeasuring about 22461 sq.mts., (amalgamation of old Survey Nos. 1025/ 3, admeasuring about 3642 sq.mts., 1034/1, admeasuring about 8093 sq.mts., 1035/1 2 3, admeasuring about 22469 sq.mts., 1036/3, admeasuring about 6070 sq.mts.) together with construction standing thereon of mouje & Taluka: Kapadwanj, District: Kheda

7 Pari Passu 1st charge by way of Equitable Mortgage over Sub -Plot No. 6, admeasuring about 4289.20 sq.mts., together with construction standing thereto in the "Kapdwanj Industrial Estate" of Gujarat Industrial Development Corporation situated upon non-agricultural lad bearing Survey Nos. 1035/P and 1039/P of mouje & Taluka: Kapadwanj, District: Kheda

8 Lien and pari passu 1st charge over FD of Rs. 200 Lakhs in the name of Mangalam Global Enterprise Limited

9 Lien and pari passu 1st charge over FD of Rs. 134 Lakhs in the name of Mangalam Global Enterprise Limited

10 Lien and pari passu 1st charge over FD of Rs. 186 Lakhs in the name of Mangalam Global Enterprise Limited

11 Pari passu first charge by way of hypothecation of Existing Plant & Machinery of Kapadwanj Plant acquired by MGEL through NCLT order

12 Pari passu first charge by way of hypothecation of Plant & Machinery at Block/Survey No. 155/paiki of Khata No. 447 of Village Lodariyal, Taluka Sanand District Ahmedabad

26.4 The Company has borrowings from banks on the basis of security of current assets. The quarterly returns or statements of current assets filed by the Company with banks are in agreement with the books of accounts and borrowing terms except incase of quarter ended 31-Mar-2025 as the Company has filed statement of different date.

30.1 The Company participates in various supply chain finance programs under which participating suppliers may voluntarily elect to sell some or all of their Company receivables to third-party financial institutions. Supplier participation in the programs is solely up to the supplier, and participating suppliers enter their arrangements directly with the financial institutions. The Company and its suppliers agree on the contractual terms for the goods and services it procure, including prices, quantities and payment terms, regardless of whether the supplier elects to participate in these programs. The suppliers'' voluntary inclusion of invoices in these programs has no bearing on our payment terms. Further, the company has no economic interest in a supplier''s decision to participate in these programs. As at 31-Mar-2025 and 31-Mar-2024, confirmed supplier invoices that are outstanding and subject to the third-party programs included in accounts payable on the balance sheets were Rs. 6,883.40 Lakhs and Rs. 5,118.82 Lakhs, respectively. The Company do not believe that future changes in the availability of supply chain financing will have a significant impact on the Company''s liquidity.

The Company has the following post-employment benefit plans:

B. Defined Contribution Plans :

Gratuity (Unfunded) :

(iii) Risks associated to the defined benefit plan of Gratuity:

(a) Investment / Interest Risk:

The present value of defined benefit plan liability is calculated using discount rate determined with refence to market yield on government bonds denominated in Indian rupees. A decrease in the bond interest rate will increase the plan liability.

(b) Longevity Risk:

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of the plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

The present value of the defined benefit plan liability is calculated by reference to the future salaries of the plan participants. as such, an increase in the salary of the plan participants will increase the plan''s liability.

(d) Legislative Risk:

Risks of increase in the plan liabilities or reduction in plan assets due to change in legislation.

Note - 45 - Contingent Liabilities and Capital Commitments:		(J in Lakhs)
Particulars	Year ended	Year ended
	31st March, 2025	31st March, 2024
(I) Contingent Liabilities
a) Claims against the Company not acknowledged as debts:
Disputed Statutory Dues #	12,060.31	12,060.31
Third Party Claims @	458.27	-
b) Corporate guarantees given to banker''s of foreign subsidiary company	5,990.70	5,836.17
(Mangalam Global (Singapore) Pte. Ltd.) (MGSPL)
[USD 70 Lakhs]
(II) Capital Commitments:
(a) Estimated amount of contracts remaining to be executed on capital account	NIL	NIL
and not provided for (Net of Capital Advances)

# Subsequent to the approval of the Resolution Plan, the Income tax department has initiated reassessment proceedings for Assessment Year 2019-20 under section 147/ 148 of the Income Tax Act, 1961 in the name of HMIPL. The company has challenged the action of the income tax department by way of special civil application before the Hon''ble Gujarat High Court seeking to quash the said action and has also requested for an ad interim relief to stay the proceedings till the disposal of the company''s petition. The company has been advised that the action of the income tax authorities is not in accordance with the law.

@ The Company has received notice from Advantage Oil Private Limited related to on account of compensation for early termination of bundi plant lease demanding of Rs. 458.27 Lakhs as a due as on 19-10-2023, which are not payable as per opinion of the management of the company.

A Show cause notice is issued by GST Department with respect to GST audit under section 65 of CGST Act, 2017 for the period 01.04.2020 to 31.03.2023 against which reply has been submitted by the company. However, no order has yet been passed confirming any liability. Management is of the view that the action of the tax authorities is not in accordance with the law.

A Demand notice under section 156 of the Income Tax Act, 1961 to the tune of Rs. 25,047.53 Lakhs for the assessment year 2018-19 is received on 4th April, 2025 from Income tax department by the company in the name of HMIPL, which is also challenged before Hon''ble NCLT Ahmedabad. Management is of the view that the action of the income tax authorities is not in accordance with the law.

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 the receipt of the judgements/decisions pending with various forums/authorities.

The Company does not expect any reimbursements in respect of the above contingent liabilities.

The Company has evaluated the impact of Supreme Court ("SC") judgement dated February 28, 2019 in the case of Regional Provident Fund Commissioner (II) West Bengal v/s Vivekananda Vidyamandir and Others, in relation to exclusion of certain allowances from the definition of "basic wages" of the relevant employees for the purposes of determining contribution to Provident Fund ("PF") under the Employees'' Provident Fund & Miscellaneous Provisions Act, 1952. There are interpretation issues relating to the said SC judgement. Based on such evaluation, management has concluded that effect of the aforesaid judgement on the Company is not material and accordingly, no provision has been made in the financial statements.

Note - 46 - Operating Segment Information:

(a) The company has identified "Agro Based Commodities" viz Edible / Non-Edible Oil / Seeds and its Derivatives, Cotton / Cotton Ginning, Rice, Wheat and Other Agro Commodities, which have similar risks and returns, as its sole primary business segment, accordingly, there are no separate reportable segment.

(b) Geographical Information

The geographical information analyses the Company''s revenues and Non - Current Assets by the company''s country of domicile (i.e., India) and other countries. In presenting the geographical information, segment revenue has been based on the geographical location of customers and segment assets have been based on the geographical location of assets.

Note - 47:

Forensic audit with regard to the financial statement of the Company for the FY 2019-20, FY 2020-21 and FY 2021-22 in context with the disclosure of financial information and the business transactions initiated by SEBI. Based on the report submitted by the forensic auditor, SEBI has issued show cause notice to the company. In response to the show ccause notice the company is in process to comply with the same and has filed a preliminary response along with the settlement application with the SEBI in March, 2025.

The promoter & promotor group of the company i.e. Vipin Prakash Mangal, Chanakya Prakash Mangal, Rashmi Mangal & Mangalam Worldwide Limited, have informed the Company that on 03rd February, 2025, they have received a Show Cause Notice ("SCN") in the matter of Mangalam Global Enterprise Limited dated 29th January, 2025, issued under Sections 11(1), 11(4), 11(4A), 11B(1) and 11B(2) of the Securities and Exchange Board of India Act, 1992 ("SEBI Act") by SEBI, alleging violation, inter-alia, of provisions of Section 12A (d) and (e) of SEBI Act read with Regulation 3(a), (b), (c), (d), 4(1), 4(2) (a) (d) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 ("PFUTP Regulations"). The Promoters of the company is in process to comply with the same and has filed a preliminary response along with the settlement application with the SEBI in March, 2025, the final outcome of the same is awaited. Since the Company is not a party to this SCN in respect of the above mentioned provisions, there will not be any financial implications of this SCN on the Company.

Key Managerial Personnel who are under the employment of the Company and entitled to post employment benefits and other long term employee benefits recognised as per Ind AS 19 -''Employee Benefits'' in the Standalone Financial Statements. As these employee benefits are lump sum amounts provided on the basis of actuarial valuation, the same is not included above.

F. All Related Party transactions entered during the year were in ordinary course of business and are on arm''s length basis and no amount has been recognised as bad or doubtful in respect of transactions with the Related Parites.

Note - 50 - Corporate Social Responsibility (''CSR'') Expenses:

Based on the guidance note on accounting for expenditure on corporate social responsibility activities (CSR) issued by the institute of chartered accountants of India and Section 135 of the Companies Act, 2013, read with rules made thereunder, expenditure incurred by the Company on CSR activities is as follows:

Note - 52 - Financial Instruments:

The Company''s financial liabilities mainly comprise the loans and borrowings in foreign as well as domestic currency, money related to capital expenditures, lease liabilities, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s financial assets comprise mainly of investments, security deposits, cash and cash equivalents, other balances with banks, trade and other receivables that derive directly from its business operations.

The Company is exposed to the Market Risk, Credit Risk and Liquidity Risk from its financial instruments.

The Management of the Company has implemented a risk management system which is monitored by the Board of Directors of the Company. The general conditions for compliance with the requirements for proper and future-oriented risk management within the Company are set out in the risk management principles. These principles aim at encouraging all members of staff to responsibly deal with risks as well as supporting a sustained process to improve risk awareness. The guidelines on risk management specify risk management processes, compulsory limitations, and the application of financial instruments. The risk management system aims to identify, assess, mitigate the risks in order to minimize the potential adverse effect on the Company''s financial performance.

The following disclosures summarize the Company''s exposure to the financial risks and the information regarding use of derivatives employed to manage the exposures to such risks. Quantitative Sensitivity Analysis has been provided to reflect the impact of reasonably possible changes in market rate on financial results, cash flows and financial positions of the Company.

* Investment in subsidiaries are measured at cost as per Ind AS 27, "Separate financial statements", and hence not presented here.

@ Fair value of financial assets and liabilities measured at amortized cost approximates their respective carrying values as the management has assessed that there is no significant movement in factor such as discount rates, interest rates, credit risk. The fair values are assessed by the management using Level 3 inputs.

# The financial instruments measured at FVTPL represents current investments and derivative assets having been valued using level 2 valuation hierarchy.

Fair Value Hierarchy

The fair value of financial instruments as referred to in note below has been classified into three categories depending on the

inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identical

assets or liabilities [Level 1 measurements] and lowest priority to unobservable inputs [Level 3 measurements].

The Categories used are as follows:

Level 1: Quoted prices for identical instruments in an active market

Level 2: Directly (i.e. as prices) or indirectly (i.e. derived from prices) observable market inputs, other than Level 1 inputs; and

Level 3: Inputs which are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a net asset value or valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

B. Market Risk

Market Risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market Risk comprises three types of Risk: "Interest Rate Risk, Currency Risk and Other Price Risk". Financial instrument affected by the Market Risk includes loans and borrowings in foreign as well as domestic currency, retention money related to capital expenditures, trade and other payables.

(a) Interest Rate Risk

Interest Rate Risk is the risk that fair value or future cash outflows of a financial instrument will fluctuate because of changes in market interest rates. An upward movement in the interest rate would adversely affect the borrowing cost of the Company. The Company is exposed to long term and short - term borrowings. The Company manages interest rate risk by monitoring its mix of fixed and floating rate instruments and taking actions as necessary to maintain an appropriate balance. The Company has not used any interest rate derivatives.

(b) Foreign Currency Risk

The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the US Dollar. Foreign exchange risk arises from recognized assets and liabilities denominated in a currency that is not the functional currency of the Company. Considering the volume of foreign currency transactions, the Company has taken certain forward contracts to manage its exposure.

Credit risk is the risk that a counterparty fails to discharge its obligation to the Company. The Company''s exposure to credit risk is influenced mainly by cash and cash equivalents, trade receivables and other financial assets measured at amortized cost. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls.

The Company assesses and manages credit risk based on internal credit rating system. Internal credit rating is performed for each class of financial instruments with different characteristics. The Company assigns the following credit ratings to each class of financial assets based on the assumptions, inputs and factors specific to the class of financial assets. (i) Low credit risk, (ii) Moderate credit risk, (iii) High credit risk.

Based on business environment in which the Company operates, a default on a financial asset is considered when the counter party fails to make payments within the agreed time period as per contract. Loss rates reflecting defaults are based on actual credit loss experience and considering differences between current and historical economic conditions.

â¢ Cash and Cash Equivalent and Bank Balance:

Credit Risk related to cash and cash equivalents and bank balance is managed by only accepting highly rated banks and diversifying bank deposits and accounts in different banks.

â¢ Loans and Other Financial Assets measured at Amortized Cost:

Other financial assets measured at amortized cost includes export benefits receivables, bank deposits with maturity of more than 12 months and other receivables. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously, while at the same time internal control system in place ensure the amounts are within defined limits.

â¢ Trade Receivables:

Life time expected credit loss is provided for trade receivables. Based on business environment in which the Company operates, a default on a financial asset is considered when the counter party fails to make payments within the agreed time period as per contract. Loss rates reflecting defaults are based on actual credit loss experience and considering differences between current and historical economic conditions. Assets are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or a litigation decided against the Company. The Company continues to engage with parties whose balances are written off and attempts to enforce repayment. Recoveries made are recognized in statement of profit and loss.

â¢ Expected Credit Losses:

Expected Credit Loss for Trade Receivables and Other Receivables under simplified approach:

The Company recognizes lifetime expected credit losses on trade receivables & other receivables using a simplified approach, wherein Company has defined percentage of provision by analyzing historical trend of default based on the criteria defined below and such provision percentage determined have been considered to recognize life time expected credit losses on trade receivables/other receivables (other than those where default criteria are met in which case the full expected loss against the amount recoverable is provided for). Further, the Company has evaluated recovery of receivables on a case to case basis. No provision on account of expected credit loss model has been considered for related party balances. The Company computes credit loss allowance based on provision matrix. The provision matrix is prepared on historically observed default rate over the expected life of trade receivable and is adjusted for forward - looking estimate.

Liquidity Risk is the risk that the Company will encounter difficulty in raising the funds to meet the commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value. Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates.

Note - 53 - Disclosure Under Section 186(4):

Surplus funds have been invested with various corporates (un-related parties). It is repayable on demand and carries interest rate of 12% p.a. Maximum balance outstanding during the year is Rs. 862.05 Lakhs (PY Rs. 830.66 Lakhs).

Note - 54 - Utilisation of Borrowed Funds and Share Premium:

As on March 31, 2025 there is no Unutilised Amounts in respect of any Issue of Securities and Long Term Borrowings from Banks and Financial Institutions. The Borrowed Funds have been Utilised for the Specific Purpose for which the Funds were raised.

Note - 55 - Corporate Insolvency Resolution Process (Resolution Plan):

H M Industrial Private Limited (HMIPL) (FY 2022-23)

Vide order dated 20 September 2022, Hon''ble NCLT Ahmedabad (the adjudicating authority) has allowed, u/s 30(6) of the Insolvency and Bankruptcy Code, 2016 ("IBC, 2016"), the resolution plan submitted by Mangalam Global Enterprise Limited (MGEL) in respect of corporate debtor M/s H. M. Industrial Private Limited (HMIPL) (under Corporate Insolvency Resolution Process (CIRP).

As per the composite scheme of arrangement submitted along with the approved plan, Steel Division of HMIPL is to be demerged and to be vested into Mangalam Worldwide Limited (MWL) a group company; and HMIPL and its rest business (i.e. Agro Business - Castor and Cotton) is amalgamated with MGEL with effect from appointed date i.e. 20 September 2022. Consequently, effect of the scheme has been given in the financial statements in accordance with Ind AS 103 - Business Combinations.

(c) On approval of the resolution plan, the suspended board of directors of HMIPL was replaced by MGEL nominees to the effect that HMIPL became an entity under common control.

(d) The resolution plan inter-alia provides for a composite scheme of arrangement (scheme of arrangement) in the nature of demerger and amalgamation. As per the said scheme of arrangement, Steel Division of HMIPL is demerged and vested into MWL whereas remainder of HMIPL is amalgamated into MGEL.

The Order dated 20 September 2022 of Hon''ble the NCLT Ahmedabad (the adjudicating authority) provides -

(i) That the approved Resolution Plan shall become effective from the date of passing of the order (20/09/2022).

(ii) That the order of moratorium dated 07/06/2019 passed by the Adjudicating Authority under section14 of the IBC, 2016 shall cease to have effect from the date of the order.

(iii) That Hon''ble the NCLT has made following observation:

H M Industrial Private Limited (HMIPL) (FY 2022-23)

18. /4s far as reliefs and concessions claimed by the Resolution Applicant, the law has been well settled by the Hon''ble Supreme Court in the case of Ghanshyam Mishra and Sons Private limited Us Edelweiss Asset Reconstruction Company Limited and Ors. Reported in Manu/SC/0273/2021 in the following words:

I. The legislative intent behind this is, to freeze all the claims so that the resolution applicant starts on a clean slate and is not flung with any surprise claims. If that is permitted, the very calculations on the basis of which the resolution applicant submits its plan, would go haywire and the plan would be unworkable.

II. We have no hesitation to say, that the word "other stakeholders" would squarely cover the central government, any state government or any local authorities. The legislature, noticing that on account of obvious omission, certain tax authorities were not abiding by the mandate of I&B Code and continuing with the proceedings, has brought out the 2019 amendments so as to cure the said mischief..."

19. In view of the above we hold that the Resolution Applicant cannot be saddled with any previous claims against the corporate debtors prior to initiation of its CIRP. For the permits, licenses, leases or any other statutory rights vested in the Corporate Debtors shall remain with the Corporate Debtors and for the continuation of such statutory rights, the resolution applicant has to approach the concerned statutory authorities under relevant laws."

(iv) In view of (iii) above, the Company is not liable for any liability / demand / claim except those specifically admitted as payable as described here-in-before as regards the all kind of previous claims against HMIPL.

Note - 56 - Amalgamation of H M Industrial Private Limited (HMIPL) (FY 2022-23):

Upon the approved scheme coming into effect, the MGEL has accounted for the amalgamation of the remaining business of Transferor Company (HMIPL) in accordance with "Pooling of Interest Method" of accounting as prescribed in the scheme of arrangement and as laid down in Appendix C of Ind AS-103 (Business combination of entities under common control) as per details given below:

(a) MGEL has recorded assets and liabilities of the acquired business of HMIPL vested in it pursuant to the scheme, at the carrying value in the same form as appearing in the books of HMIPL.

(b) The identity of the reserves of the HMIPL has been preserved and has been recorded in the same form and at the same carrying amount.

(c) Inter corporate deposit / loans and advances / intercompany balances outstanding between MGEL and HMIPL has been cancelled.

(d) Necessary adjustments/ adjusting entries has been passed to ensure that the merged financial statement reflects the financial position based on consistent accounting policies followed by MGEL.

(e) The surplus (between the net assets acquired and cancellation of share capital of the acquired entity (in this case - Nil) has been credited to other equity (Amalgamation Reserve).

(f) The financial information in the financial statements in respect of prior periods is not restated since the HMIPL has become ''entity under common control'' during the financial year.

(g) The amalgamation has taken place with effect from the appointed date and in accordance with the provisions of section 2(1B) of the Income tax act 1961.

Note - 58 - Events Occurring after the Balance Sheet Date:

The Group evaluates events and transactions that occur subsequent to the balance sheet date but Prior to approval of the financial statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the financial statements. There are no subsequent events to be recognized or reported that are not already disclosed.

Note - 59 - Audit Trail:

The Company uses an accounting software for maintaining its books of account which has operated throughout the year for all relevant transactions recored in the accounting software. Further no instance of audit trail feature being tampered with was noted in respect of the accounting software.

Note - 60 - Social Security Code:

The Indian Parliament has approved the Code on Social Security, 2020 ("Code") which may likely impact the obligations of the Company for contribution to employees'' provident fund and gratuity. The effective date from which the Code is applicable and the rules to be framed under the Code are yet to be notified. In view of this, impact if any, of the change will be assessed and accounted in the period in which the Code and the rules thereunder are notified.

Note - 61 - Additional Regulatory Information:

(a) The title deeds of immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) are held in the name of the Company.

(b) The Company does not have any Investment Property.

(c) The Company has not revalued its Property, Plant and Equipment (including Right-of-Use Assets) and Intangible Assets.

(d) There are no Loans or Advances in the nature of loans that are granted to Promoters, Directors, KMPs and their Related Parties (as defined under Companies act, 2013), either severally or jointly with any other person, that are outstanding as on 31 March 2025:

(i) Repayable on Demand; or

(ii) Without specifying any terms or period of repayment

(e) The Company does not have any Capital Work in Progress.

(f) There are no Intangible Assets under development as on 31 March 2025.

(g) No Proceedings have been initiated or pending against the Company for holding any Benami Property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

(h) Borrowings Secured against Current Assets: Refer Note No. 48 (C)

(i) The Company is not declared Willful Defaulter by any Bank or Financial Institution or Other Lender.

(j) The Company has not undertaken any transactions with Companies Struck Off Under Section 248 of the companies act, 2013 or section 560 of companies act, 1956.

(k) No Charges or satisfaction of charges are yet to be registered with registrar of companies beyond the statutory period as on 31 March 2025.

(l) The Company has complied with the number of layers prescribed Under Clause (87) of Section 2 of the act read with Companies (Restriction on Number of Layers) Rules, 2017.

(m) No Scheme of arrangements has been approved by the competent authority in terms of sections 230 to 237 of the Companies Act, 2013 except as disclosed in Note No: 55 and 56.

(n) The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (intermediaries) with the understanding (whether recorded in writing or otherwise) that the intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (ultimate beneficiaries) by or on behalf of the Company or provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

(o) 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 directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (ultimate beneficiaries) by or on behalf of the funding party or provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

(p) No Transactions has been surrendered or disclosed as income during the year in the tax assessment under the income tax act, 1961. There are no such previously unrecorded income or related assets.

(q) Corporate Social Responsibility (CSR): Refer Note No. 50

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

Note - 62 :

Previous Year''s figures have been regrouped, rearrange, reclassified, recasted wherever necessary to correspond with the current

year classification / disclosure.

Note - 63 : Authorisation of Financial Statements:

The Financial Statements for the year ended 31 March 2025 were approved by the board of directors on 23rd April 2025.

Mar 31, 2024

2.23 Provisions, Contingent Liabilities:

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability.

Disclosure of contingent liability is made when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources embodying economic benefits will be required to settle or a reliable estimate of amount cannot be made.

2.24 Events after Reporting Date:

Where events occurring after the Balance Sheet date provide evidence of condition that existed at the end of reporting period, the impact of such events is adjusted within the financial statements. Otherwise, events after the Balance Sheet date of material size or nature are only disclosed.

2.25 Non - Current Assets Held For Sales:

Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and sale is considered highly probable.

A sale is considered as highly probable when decision has been made to sell, assets are available for immediate sale in its present condition, assets are being actively marketed and sale has been agreed or is expected to be concluded within 12 months of the date of classification.

Non-current assets held for sale are neither depreciated nor amortised.

Assets and liabilities classified as held for sale are measured at the lower of their carrying amount and fair value less cost of sale and are presented separately in the Balance Sheet.

2.26 Cash Flows Statement:

Cash Flows Statements are reported using the method set out in the Ind AS - 7, "Cash Flow Statements", whereby the Net Profit / (Loss) before tax is adjusted for the effects of the transactions of a Non-Cash nature, any deferrals or accrual 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.

2.27 Cash and Cash Equivalents:

Cash and cash equivalents in the balance sheet comprise of cash on hand, cash at banks, short-term deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposit held at call with financial institutions, other short - term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an inmaterial risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.

2.28 Business Combination:

Business combinations arising from transfers or interests in entities that are under the control of the shareholders that controls the Company are accounted for using the ''pooling of interests method'', as if the acquisition had occurred at the beginning of the earliest comparative period presented or, if later, at the date that common control was established; for this purpose, comparatives are revised, if required. The assets and liabilities acquired are recognised at their carrying amounts. The identity of the reserves is preserved and they appear in the standalone financial statements of the Company in the same form in which they appeared in the standalone financial statements of the acquired entity. The difference, if any, between the net assets acquired and cancellation of share capital of the acquired entity is transferred to other equity.

2.29 Recent Pronouncements:

Ministry of Corporate Affairs (''MCA'') notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended 31-Mar-2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

Note 3: Critical Accounting Judgments and Key Sources of Estimation Uncertainty:

These financial statements are the standalone financial statements prepared in accordance with Indian Accounting Standard ("Ind AS") notified under the Companies Act, 2013 ("the Act") read with Rule 3 of the Companies (Indian Accounting Standards) Rules,2015, as amended.

3.1 Income Tax:

The Company''s tax jurisdiction is in India. Significant judgments are involved in estimating budgeted profits for the purpose of paying advance tax, determining the income tax provisions, including the amount expected to be paid / recovered for uncertain.

3.2 Property Plant and Equipment / Intangible Assets:

Estimates are involved in determining the cost attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by the management. Property, Plant and Equipment/Intangible Assets are depreciated/amortised over their estimated useful life, after taking into account estimated residual value. Management reviews the estimated useful life and residual values of the assets annually in order to determine the amount of depreciation/ amortisation to be recorded during any reporting period. The useful life and residual values are based on the Company''s historical experience with similar assets and take into account anticipated technological changes. The depreciation/amortisation for future periods is revised if there are significant changes from previous estimates.

3.3 Defined Benefits Obligations:

The costs of providing Gratuity and other post-employment benefits are charged to the Statement of Profit and Loss in accordance with Ind AS - 19, "Employee Benefits" over the period during which benefit is derived from the employees'' services. It is determined by using the Actuarial Valuation and assessed on the basis of assumptions selected by the management. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These assumptions include salary escalation rate, discount rates, expected rate of return on assets and mortality rates. Due to complexities involved in the valuation and its long term in nature, a defined benefit obligation is highly sensitive to change in these assumptions. All assumptions are reviewed at each balance sheet date.

3.4 Fair value measurements 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 discounted cash flow model, which involve various judgments and assumptions.

3.5 Recoverability of Trade Receivables:

Judgments are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.

3.6 Provisions:

The timing of recognition and quantification of the liability (including litigations) requires the application of judgment to existing facts and circumstances, which can be subject to change. The carrying amounts of provisions and liabilities are reviewed regularly and revised to take account of changing facts and circumstances.

3.7 Impairment of Financial and Non - Financial Assets:

The impairment provisions for Financial Assets are based on assumptions about risk of default and expected cash loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on Company''s past history, existing market conditions as well as forward-looking estimates at the end of each reporting period.

In case of non-financial assets company estimates asset''s recoverable amount, which is higher of an asset''s or Cash Generating Units (CGU''s) fair value less costs of disposal and its value in use.

In assessing value in use, the estimated future cash flows are discounted to their present value using 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.

3.8 Recognition of Deferred Tax Assets and Liabilities:

Deferred tax assets and liabilities are recognised for deductible temporary differences and unused tax losses for which there is probability of utilisation against the future taxable profit. The Company uses judgment to determine the amount of deferred tax that can be recognised, based upon the likely timing and the level of future taxable profits and business developments.

3.9 Supplier Financing Arrangements:

Company participate in various supply chain finance programs under which participating suppliers may voluntarily elect to sell some or all of their Company receivables to third-party financial institutions. Supplier participation in the programs is solely up to the supplier and participating suppliers enter their arrangements directly with the financial institutions. The Company derecognise financial liability when the obligation under the liability is discharged or canceled or expires. A significant amount of management judgment is involved in such arrangements to determine when an existing financial liability is replaced by another on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. (Further information are set out in Note 30.1).

21.1 Rights, Preferences and Restrictions Attached to Equity Shares:

The Company has one class of equity shares having a par value of Rs. 2/- each. 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 ensuing 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 share holding.

21.2 Company issued and alloted 80,28,705 bonus shares (as fully paid) of face value of Rs. 10/- each to the existing shareholders at the rate of one shares for every two share held on 2nd September 2020.

Company issued and alloted 93,01,928 bonus shares (as fully paid) of face value of Rs. 10/- each to the existing shareholders at the rate of four shares for every one share held on 3rd December 2019.

21.3 (a) During the year ended 31st March 2024, pursuant to excercise by warrant holder of 11,25,000 convertible warrants

the company has made allotment of 56,25,000 equity shares having face value of Rs. 2/- each fully paidup for cash at a price of Rs. 10.40/- per equity share (including share premium of Rs. 8.40/- per equity share) aggregating to Rs. 112.50 Lakhs (Face Value) & Rs. 472.50 Lakhs (Share Premium). the aforementioned equity shares were alloted on 18th April 2023. the aforesaid equity shares allotted on conversion of warrants, shall rank pari passu, in all respects with the existing equity shares.

(b) During the year ended 31st March 2023, pursuant to excercise by warrant holder of 16,87,500 convertible warrants the company has made allotment of 84,37,500 equity shares having face value of Rs. 2/- each fully paidup for cash at a price of Rs. 10.40/- per equity share (including share premium of Rs. 8.40/- per equity share) aggregating to Rs. 168.75 Lakhs (Face Value) & Rs. 708.75 Lakhs (Share Premium). the aforementioned equity shares were alloted on 05 November 2022. the aforesaid equity shares allotted on conversion of warrants, shall rank pari passu, in all respects with the existing equity shares.

21.4 The shareholders of the Company in their meeting held on 25th July 2022, approved sub-division/ split of 1 (one) equity share of Rs. 10/- each into 5 (five) equity shares of Rs. 2/- each fully paid up. The effective date for sub division of Equity shares was 19th August 2022. Consequently the split of equity shares is been effected from 19th August 2022.

(b) During the year ended 31st March 2022, on receipt of Rs. 365.63 Lakhs being 75% of the issue price due on warrants from one warrant holder, the company had converted 9,37,500 convertible warrants and alloted equivalent number of equity shares on 22nd March 2022.

(c) During the year ended 31st March 2023, on receipt of Rs. 658.13 Lakhs being 75% of the issue price due on warrants from three warrant holders, the company has converted 16,87,500 convertible warrants and alloted 5 equity shares per warrant (post sub-division/ split of 1 (one) equity share into 5 (five) equity shares) on 5th November 2022.

(d) During the year ended 31st March 2023, on receipt of Rs. 438.75 Lakhs agaist due on warrants from three warrant holders, the company has converted 11,25,000 convertible warrants and alloted 5 equity shares per warrant (post sub-division/ split of 1 (one) equity share into 5 (five) equity shares) on 18th April 2023.

27.1 SBI, HDFC Bank, PNB, & Canara Bank have sanctioned working capital facilities (including GECL/WCTL refer note 23) of Rs.19,548 Lakhs & SBI has sanctioned term loan of Rs.250 Lakhs to the company under consortium banking arrangement (SBI consortium) wherein SBI is a lead bank (Total credit limit Rs.19,798 Lakhs), as per details given below:

(i) State Bank of India sanctioned limit of Rs. 5,200 Lakhs (Fund based limit of Rs. 5,000 Lakhs and Non - Fund based Limit of Rs. 200 Lakhs).

(ii) Punjab National Bank Sanctioned Limit of Rs. 4,657 Lakhs (Fund based limit of Rs. 4,657 Lakhs)

(iii) HDFC Bank Limited sanctioned limit of Rs. 5,191 Lakhs (Fund based Limit of Rs. 5,191 Lakhs)

(iv) Canara bank sanctioned limit of Rs. 4,500 Lakhs (Fund based limit of Rs. 4,500 Lakhs)

(v) State Bank of India, Term Loan of Rs 250 Lakhs.

SBI consortium has appointed PNB Investment Services Limited as "Security Trustee".

Working capital facilities are secured by Pari passu first charge by way of hypothecation over entire current assets of the Company and Pari passu second charge by way of Hypothecation of proposed Plant & machinery to be procured out of Term Loan granted by SBI. (Refer Note No. 27.2)

Term Loan Facility granted by SBI is secured by First charge by way of Hypothecation of proposed Plant & machinery to be procured out of Term Loan and Pari passu second charge by way of hypothecation over entire current assets of the Company. (Refer Note No. 27.3)

Working capital facilities granted by SBI Consortium and Term Loan granted by SBI are secured by collateral securities. (Refer Note No. 27.4)

27.2 Working capital facilities granted by SBI consortium Rs. 19,548 Lakhs:

Charge in favor of PNB Investment Services Limited of Rs. 19,548 Lakhs.

Pari passu first charge by way of hypothecation over entire current assets (present & Future, except mentioned below) of the Company including Raw Material, Stock in Process, Stock in Transit, Finished Goods, Stores, Spares & Receivables etc., kept at all owned/leased factory premises of the company or at any other place and Pari passu second charge by way of Hypothecation of proposed Plant & machinery to be procured out of Term Loan granted by SBI.

27.3 Term Loan Facilities Granted by SBI Rs. 250 Lakhs:

First charge by way of Hypothecation of proposed Plant & machinery to be procured out of Term Loan granted by SBI and Pari passu second charge by way of hypothecation over entire current assets (present & Future) of the Company including Raw Material, Stock in Process, Stock in Transit, Finished Goods, Stores, Spares & Receivables etc., kept at all owned/leased factory premises of the company or at any other place.

27.4 Collateral Securities for both Working capital facilities of Rs. 19,548 Lakhs granted by SBI Consortium and Term Loan of Rs 250 Lakhs granted by SBI: Total limit Rs. 19,798 Lakhs.

As per sanction terms, charge on following collateral securities to be created

1 Pari Passu 1st charge by way of Equitable Mortgage over factory land and Building at Block/Survey No. 155 paiki admeasuring about 13873 sq. mtRs. of Khata No 447 (Old Account no. 350 admeasuring about 6791 sq. mtrs and Account no. 349 admeasuring about 7082 sq. mtrs) along with construction of factory building standing thereon of Mouje: Lodariyal, Taluka: Sanand, District: Ahmedabad in the name of Mangalam Global Enterprise Limited.

8 Current year lien and pari passu 1st charge over FD of Rs. 200 Lakhs in the name of Mangalam Global Enterprise Limited

Previous year lien and pari passu 1st charge over FD of Rs. 200 Lakhs in the name of Mangalam Global Enterprise Limited proposedfor substitution of collateral security for plot No. 122/paiki, Harij, Patan, in the name of Farpoint Enterprise LLP.

9 Lien and pari passu 1st charge over FD of Rs. 114 Lakhs in the name of Mangalam Global Enterprise Limited.

10 Lien and pari passu 1st charge over FD of Rs. 168 Lakhs in the name of Mangalam Global Enterprise Limited.

11 Pari passu first charge by way of hypothecation of Existing Plant & Machinery of Kapadwanj Plant acquired by MGEL through NCLT order.

12 Pari passu first charge by way of hypothecation of Plant & Machinery at Block/Survey No. 155/paiki of Khata No. 447 of Village Lodariyal, Taluka Sanand District Ahmedabad.

27.5 The Company has borrowings from banks on the basis of security of current assets. The quarterly returns or statements of

current assets filed by the Company with banks are in agreement with the books of accounts and borrowing terms except

incase of quarter ended 31-Mar-2024 as the Company has filed statement of different date.

Note - 45 - Employee Benefits (Contd.....)

The Company has the following post-employment benefit plans:

B. Defined Contribution Plans :

Gratuity (Unfunded) :

(iii) Risks associated to the defined benefit plan of gratuity:

(a) Investment / Interest Risk:

The present value of defined benefit plan liability is calcuated using discount rate determined with refence to market yield on government bonds denominated in indian rupees. A decrease in the bond interest rate will increase the plan liability.

(b) Longevity Risk:

The present value of the defined benefit plan liablity is calculated by reference to the best estimate of the mortality of the plan participants both during and after their employment. An increase in the life exepectancy of the plan participants will increase the plan''s liablity.

The present value of the defined benefit plan liablity is calculated by reference to the future salaries of the plan participants. as such, an increase in the salary of the plan participants will increase the plan''s liability.

(d) Legislative Risk:

Risks of increase in the plan liabilities or reduction in plan assets due to change in legislation.

The Company is exposed to the Market Risk, Credit Risk and Liquidity Risk from its financial instruments.

* Investment in subsidiaries are measured at cost as per Ind AS 27, "Separate financial statements", and hence not presented here.

# The financial instruments measured at FVTPL represents current investments and derivative assets having been valued using level 2 valuation hierarchy

Fair Value Hierarchy

The fair value of financial instruments as referred to in note below has been classified into three categories depending on the

inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identical

assets or liabilities [Level 1 measurements] and lowest priority to unobservable inputs [Level 3 measurements].

The Categories used are as follows:

Level 1: Quoted prices for identical instruments in an active market.

Level 2: Directly (i.e. as prices) or indirectly (i.e. derived from prices) observable market inputs, other than Level 1 inputs; and

B. Market Risk

(a) Interest Rate Risk

C. Credit Risk

â¢ Cash and Cash Equivalent and Bank Balance:

Credit Risk related to cash and cash equivalents and bank balance is managed by only accepting highly rated banks and diversifying bank deposits and accounts in different banks.

â¢ Loans and Other Financial Assets measured at Amortized Cost:

â¢ Trade Receivables:

â¢ Expected Credit Losses:

Expected Credit Loss for Trade Receivables and Other Receivables under simplified approach:

D. Liquidity Risk

E. Capital Management

The Company''s capital management objectives are

â¢ To ensure the company''s ability to continue as a going concern

â¢ To provide an adequate return to share holders

Note - 54 - Disclosure Under Section 186(4):

Note - 55 - Utilisation of Borrowed Funds and Share Premium:

As on March 31, 2024 there is no Unutilised Amounts in respect of any Issue of Securities and Long Term Borrowings from Banks and Financial Institutions. The Borrowed Funds have been Utilised for the Specific Purpose for which the Funds were raised.

Note - 56 - Corporate Insolvency Resolution Process (Resolution Plan):

H M Industrial Private Limited (HMIPL) (FY 2022-23)

(c) On approval of the resolution plan, the suspended board of directors of HMIPL was replaced by MGEL nominees to the effect that HMIPL became an entity under common control.

The Order dated 20 September 2022 of Hon''ble the NCLT Ahmedabad (the adjudicating authority) provides -

(i) That the approved Resolution Plan shall become effective from the date of passing of the order (20/09/2022).

(ii) That the order of moratorium dated 07/06/201 9 passed by the Adjudicating Authority under section14 of the IBC, 2016 shall cease to have effect from the date of the order.

(iii) That Hon''ble the NCLT has made following observation:

Note - 57 - Amalgamation of H M Industrial Private Limited (HMIPL) (FY 2022-23)

(a) MGEL has recorded assets and liabilities of the acquired business of HMIPL vested in it pursuant to the scheme, at the carrying value in the same form as appearing in the books of HMIPL.

(b) The identity of the reserves of the HMIPL has been preserved and has been recorded in the same form and at the same carrying amount.

(c) Inter corporate deposit / loans and advances / intercompany balances outstanding between MGEL and HMIPL has been cancelled.

Note - 59 - Events Occurring after the Balance Sheet Date:

Note - 60 - Audit Trail

Note - 61 - Social Security Code

(b) The Company does not have any Investment Property.

(c) The Company has not revalued its Property, Plant and Equipment (including Right-of-Use Assets) and Intangible Assets.

(i) Repayable on Demand; or

(ii) Without specifying any terms or period of repayment

(e) Capital Work in Progress Ageing Schedule: Refer Note No. 7

(f) There are no Intangible Assets under development as on 31 March 2024.

(g) No Proceedings have been initiated or pending against the Company for holding any Benami Property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

(h) Borrowings Secured against Current Assets: Refer Note No. 49(C)

(i) The Company is not declared Willful Defaulter by any Bank or Financial Institution or Other Lender.

(j) The Company has not undertaken any transactions with Companies Struck Off Under Section 248 of the companies act, 2013 or section 560 of companies act, 1956.

(k) No Charges or satisfaction of charges are yet to be registered with registrar of companies beyond the statutory period as on 31 March 2024.

(l) The Company has complied with the number of layers prescribed Under Clause (87) of Section 2 of the act read with Companies (Restriction on Number of Layers) Rules, 2017.

(m) No Scheme of arrangements has been approved by the competent authority in terms of sections 230 to 237 of the Companies Act, 2013 except as disclosed in note no: 56 and 57.

(p) No Transactions has been surrendered or disclosed as income during the year in the tax assessment under the income tax act, 1961. There are no such previously unrecorded income or related assets.

(q) Corporate Social Responsibility (CSR): Refer Note No. 51

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

Note - 63 :

Previous Year''s figures have been regrouped, rearrange, reclassified wherever necessary to correspond with the current year

classification / disclosure.

Note - 64 : Authorisation of Financial Statements:

The Financial Statements for the year ended 31 March 2024 were approved by the board of directors on 30th April 2024.

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

For, Keyur Shah & Co. Vipin Prakash Mangal Chanakya Prakash Mangal

Charterted Accountants Chairman (DIN:02825511) Managing Director (DIN:06714256)

Keyur Shah

Proprietor Chandravijay Arora Dashang Manharlal Khatri

M. No.: 153774 Chief Financial Officer Company Secretary (M. No.: A47946)

FRN: 141173W

Place : Ahmedabad

Date : 30th April 2024

Mar 31, 2023

15.1 Rights, Preferences and Restrictions Attached to Equity Shares:

The Company has one class of equity shares having a par value of Rs 2/- each post effect of share split (PY Rs.10/- each). 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 ensuing 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 share holding.

15.2 : Company issued and alloted 80,28,705 bonus shares (as fully paid) of face value of Rs 10/- each to the existing shareholders at the rate of one shares for every two share held on 2nd September 2020.

Company issued and alloted 93,01,928 bonus shares (as fully paid) of face value of Rs 10/- each to the existing shareholders at the rate of four shares for every one share held on 3rd December 2019.

15.3 : (a) During the year ended 31st March 2023, pursuant to excercise by warrant holder of 16,87,500 convertible warrants

the company has made allotment of 84,37,500 equity shares having face value of Rs 2/- each fully paidup for cash at a price of Rs 10.40/- per equity share (including share premium of Rs 8.40/- per equity share) aggregating to Rs 168.75 Lakhs (Face Value) & Rs 708.75 Lakhs (Share Premium). the aforementioned equity shares were alloted on 05 November 2022. the aforesaid equity shares allotted on conversion of warrants, shall rank pari passu, in all respects with the existing equity shares.

(b) During the year ended 31st March 2022, pursuant to excercise by warrant holder of 9,37,500 convertible warrants the company has made allotment of 9,37,500 equity shares having face value of Rs 10/- each fully paidup for cash at a price of Rs 52/- per equity shares (including share premium of Rs 42/- per equity share) aggregating to Rs 93.75 Lakhs (Face Value) & Rs 393.75 Lakhs (Share Premium). The aforementioned equity shares were alloted on 22 March 2022. The aforesaid equity shares allotted on conversion of warrants, shall rank pari passu, in all respects with the existing equity shares.

15.4 : The shareholders of the Company in their meeting held on 25th July 2022, approved sub-division/ split of 1 (one) equity share of Rs. 10/- each into 5 (five) equity shares of Rs. 2/- each fully paid up. The effective date for sub division of Equity shares was 19th August 2022. Consequently the split of equity shares is been effected from 19th August 2022._

(b) During the year ended 31st March 2022, on receipt of Rs. 365.63 Lakhs being 75% of the issue price due on warrants from one warrant holder, the company had converted 9,37,500 convertible warrants and alloted equivalent number of equity shares on 22nd March 2022.

(c) During the year ended 31st March 2023, on receipt of Rs. 658.13 Lakhs being 75% of the issue price due on warrants from three warrant holders, the company has converted 16,87,500 convertible warrants and alloted 5 equity shares per warrant (post sub-division/ split of 1 (one) equity share into 5 (five) equity shares) on 5th November 2022.

21.1 SBI, HDFC Bank, PNB, & Canara Bank have sanctioned working capital facilities (including GECL/WCTL refer note 17) of Rs. 19548 Lakhs & SBI has sanctioned term loan of Rs. 250 Lakhs to the company under consortium banking arrangement (SBI consortium) wherein SBI is a lead bank (Total credit limit Rs.19798 Lakhs), as per details given below:

(i) State Bank of India sanctioned limit of Rs. 5200 Lakhs (Fund based limit of Rs. 5000 Lakhs and non-Fund based Limit of Rs. 200 Lakhs).

(ii) Punjab National Bank Sanctioned Limit of Rs. 4657 Lakhs (Fund based limit of Rs. 4657 Lakhs)

(iii) HDFC Bank Limited sanctioned limit of Rs. 5191 Lakhs (Fund based Limit of Rs. 5191 Lakhs)

(iv) Canara bank sanctioned limit of Rs. 4500 Lakhs (Fund based limit of Rs. 4500 Lakhs)

(v) State Bank of India, Term Loan of Rs 250 Lakhs.

SBI consortium has appointed PNB Investment Services Limited as "Security Trustee".

Working capital facilities granted by SBI Consortium and Term Loan granted by SBI are secured by collateral securities. (Refer Note No. 21.4)

21.2 WORKING CAPITAL FACILITIES GRANTED BY SBI CONSORTIUM Rs. 19548 Lakhs:

Charge in favor of PNB Investment Services Limited of Rs. 19548 Lakhs.

21.3 Term Loan Facilities Granted by SBI Rs. 250 Lakhs:

First charge by way of Hypothecation of proposed Plant & machinery to be procured out of Term Loan granted by SBI and Pari passu second charge by way of hypothecation over entire current assets (present & Future) of the Company including Raw Material, Stock in Process, Stock in Transit, Finished Foods, Stores, Spares & Receivables etc., kept at all owned/leased factory premises of the company or at any other place.

21.4 COLLATERAL SECURITIES for both Working capital facilities of Rs. 19548 Lakhs granted by SBI Consortium and Term Loan of Rs 250 Lakhs granted by SBI: Total limit Rs.19798 Lakhs.

As per sanction terms, charge on following collateral securities to be created

1. Pari Passu 1st charge by way of Equitable Mortgage over factory land and Building at Block/Survey No. 155 paiki admeasuring about 13873 sq. mtrs. of Khata No 447 (Old Account no. 350 admeasuring about 6791 sq. mtrs and Account no. 349 admeasuring about 7082 sq. mtrs) along with construction of factory building standing thereon of Mouje: Lodariyal, Taluka: Sanand, District: Ahmedabad in the name of Mangalam Global Enterprise Limited.

2. Pari Passu 1st charge by way of Equitable Mortgage over immovable property being residential Plot/Unit No. 17, admeasuring about 428 sq.mtr., along with rights to use common roads and common plots in the scheme known as "ORCHID GREENS", situated upon non-agricultural land bearing amalgamated Block No. 78 of mouje: Sanathal, Taluka: Sanand, District: Ahmedabad in the name of Mangalam Global Enterprise Limited

3. Pari Passu 1st charge by way of Equitable Mortgage over immovable property being residential Bungalow at Sub -plot No. 31, admeasuring about 451 sq.mts., together with construction standing thereon in the Samast Brahmkshatriya Cooperative Housing Society Limited situated upon non-agricultural land bearing final Plot No. 98 in the Town Planning Scheme No. 22 of mouje: Paldi, Taluka: Sabarmati, District: Ahmedabad in the name of Mangalam Global Enterprise Limited.

4. Pari Passu 1st charge by way of Equitable Mortgage over immovable property being Commercial Office No. 201 on second floor, admeasuring about 502.51 sq.mts., , together with undivided share admeasuring about 158 sq.mts., and having rights in the common facilities and amenities in the scheme known as "SETU COMPLEX" of Setu (commercial) non-trading Association, situated upon the non-agricultural land bearing Final Plot No. 324/3, in the Town Planning Scheme No. 3 being allotted City Survey No. 2984, of mouje: Changispur, Taluka: Sabarmati, District: Ahmedabad in the name of Mangalam Global Enterprise Limited

5. Pari Passu 1st charge by way of Equitable Mortgage over immovable property being Sub -Plot No. C-4-B (as per approved plan Sub plot No. 3-4-B), admeasuring about 5400 sq.mts., together with construction standing thereon situated upon non - agricultural land bearing Survey Nos. (i) 943/2 (Revenue Account No. 1208) (Old Survey No. 242), admeasuring about 2256 sq.mtr., and (ii) 944/2 (Revenue Account No. 3144) (old Survey No. 243), admeasuring about 3144 sq.mtr., total admeasuring about 5400 sq.mts., known as "Prathana Upvan", of Prathana Co-operative Housing Society Limited at mouje: Manipur, Taluka: Sanand, District: Ahmedabad in the name of Mangalam Global Enterprise Limited and Specific Worldwide LLP

6. Pari Passu 1st charge by way of Equitable Mortgage over non- agricultural bearing Survey/Block No. 1025/3, admeasuring about 40266 sq.mts., paiki northern side admeasuring about 22461 sq.mts., (amalgamation of old Survey Nos. 1025/ 3, admeasuring about 3642 sq.mts., 1034/1, admeasuring about 8093 sq.mts., 1035/1 2 3, admeasuring about 22469 sq.mts., 1036/3, admeasuring about 6070 sq.mts.) together with construction standing thereon of mouje & Taluka: Kapadwanj, District: Kheda

7. Pari Passu 1st charge by way of Equitable Mortgage over Sub -Plot No. 6, admeasuring about 4289.20 sq.mts., together with construction standing thereto in the "Kapdwanj Industrial Estate" of Gujarat Industrial Development Corporation situated upon non-agricultural lad bearing Survey Nos. 1035/P and 1039/P of mouje & Taluka: Kapadwanj, District: Kheda

8. Lien and pari passu 1st charge over FD of Rs. 200 Lakhs in the name of Mangalam Global Enterprise Limited proposed for substitution of collateral security for plot No. 122/paiki, Harij, Patan, in the name of Farpoint Enterprise LLP.

9. Lien and pari passu 1st charge over FD of Rs. 114 Lakhs in the name of Mangalam Global Enterprise Limited

10. Lien and pari passu 1st charge over FD of Rs. 168 Lakhs in the name of Mangalam Global Enterprise Limited

11. Pari passu first charge by way of hypothecation of Existing Plant & Machinery of Kapadwanj Plant acquired by MGEL through NCLT order

12. Pari passu first charge by way of hypothecation of Plant & Machinery at Block/Survey No. 155/paiki of Khata No. 447 of Village Lodariyal, Taluka Sanand District Ahmedabad.

Reason For Material Differences:

- There are differences on account of regrouping and reclassification of trade receivables and trade payables including compensatory adjustment of advances received / given from / to customers / vendors. Further the company consolidates more than one account of the same party lying in different groups / classifications.

- Value of inventory reported in stock statements is derived based on cost method applied by the accounting software / system. However at the quarter end company identify the value of inventory based on accounting policy adopted by the company.

- Differences in value of inventory / party balances arises due to inward / outward goods in transit, rejection of goods, etc. Which is accounted in books as Per the accounting policy and cut off procedure adopted by the company at quarter end, which is generally subsequent to submission of stock statement to the banks as per the due dates.

- # Company has filed provisional return as on 28 March 2023 with banks for quarter ended 31 March 2023, as per due date.

21.1 Mangalam Global Enterprise Ltd-MGEL (Company) has created a charge in favour of HDFC Bank Ltd, to the extent of Rs.6500 Lakhs (PY Rs 6500 Lakhs) by way of hypothecation of stock and book debts (Under MBA see note 21.5) on entire exposure as a security for various working capital facilities viz CC, EPC, PCFC, FBP, FBD, Invoice Discounting etc granted by the bank.

The above facilities are further collaterally secured by way of equitable mortgage of company''s property office no 201, Setu Complex, Ahmedabad & Plot no 31 The Samast Bhram Kshatriya CHS Ltd Paldi Ahmedabad.

The Company has given Fixed Deposit under lien in this regard (Refer Note No: 11)

The above facilities are guaranteed by three directors of the company in their personal capacity.

In addition to above property, Bungalow on plot no 19/B Kalyan Society Mithakhali Ahmedabad and Bungalow no 21 Sarthi-3 CHS Ltd Thaltej Ahmedabad owned by a director, are given as collateral security by way of mortgage.

21.2 Mangalam Global Enterprise Ltd-MGEL (Company) has created a charge in favor of HDFC Bank Ltd, to the extent of Rs. 500 Lakhs (revised sanctioned value) (PY Rs 1500 Lakhs) by way of pledge of Stock of warehouse receipt/storage receipts as security for Short Term loan against Pledge of physical commodities Facility granted by the bank. The facility is further guaranted by three directors of the company in their personal capacity.

21.3 Mangalam Global Enterprise Ltd-MGEL (Company) has created charge in favor of Punjab National Bank (PNB), to the extent of Rs. 2853 Lakhs (revised sanctioned value) (PY Rs 2750 Lakhs).

1st pari pasu charge by way of hypothecation of entire current assets (Under MBA see note 21.5) (Present & Future) including stocks of raw materials, stocks in process, finished goods, receivables, store, spares, consumables etc. as a security for various working capital facilities viz CC, PCFC, FOBP, FOUPB, FABC etc. granted by the bank.

Collateral Securities: property at C-4-B Prarthan Upvan CHS Ltd, Taluka Sanand, jointly owned by company and M/s Specific Worldwide LLP.

Guarantee/Corporate Guarantee: Three directors in their personal capacity and M/s Specific Worldwide LLP.

The company has given Fixed Deposit under lien in this regard (Refer Note No: 11)

21.4 Mangalam Global Enterprise Ltd-MGEL (Company) has created 1st Pari pasu charge in favor of State Bank of India (SBI), to the extent of Rs. 2500 Lakhs (PY Rs Nil). 1st pari pasu charge by way of hypothecation of entire current assets (under MBA see note 21.5) (Present & Future) including stocks of raw materials, stocks in process, finished goods, receivables, store, spares, consumables etc. as a security for various working capital facilities viz FBWC, CC, PCFC, FOBP, FOUPB, FABC etc. granted by the bank.

The above facilities are further under Collateral Securities: (i) company''s property at survey no 155 / paiki mouje Lodariyal Village, Sanand, Dist. Ahmedabad (ii) company''s property at Plot No.17, Orchid Greens, Sanand, Ahmedabad (iii) Hypothecation of company''s Plant & Machinery located at S No.155/paiki of khata no.447 of Village Lodariyal Dist: Sanand, Ahmedabad.

The above facilities are further Collaterally Secured by Factory Land & Building at survey no 122, Kukrana road, Harij, Patan owned by Farpoint Enterprise LLP (subsidiary company).

The company has given Fixed Deposit under lien in this regard (Refer Note No: 11)

Guarantee/Corporate Guarantee: Three directors in their personal capacity and M/s. Farpoint Enterprise LLP

21.5 COLLATERAL SECURITIES for both Working capital facilities of Rs. 19548 Lakhs granted by SBI Consortium and Term Loan of Rs 250 Lakhs granted by SBI: Total limit Rs.19798 Lakhs. As per sanction terms, charge on following collateral securities to be created.

Reason for material differences:

- There are differences on account of regrouping and reclassification of trade receivables and trade payables including compensatory adjustment of advances received/ given from / to customers/vendors. Further the Company consolidates more than one account of the same party lying in different groups/classifications.

- Value of inventory reported in stock statements is derived based on cost method applied by the accounting software/system. However at the quarter end company identify the value of inventory based on accounting policy adopted by the company.

- Differences in value of inventory/ party balances arises due to inward/ outward goods in transit, rejection of goods, etc. which is accounted in books as per the accounting policy and cut off procedure adopted by the Company at quarter end, which is generally subsequent to submission of stock statement to the banks as per the due dates.

- # Company has filed provisional return as on 26 March 2022 with banks for quarter ended 31 March 2022, as per due date.

The Company has the following post-employment benefit plans:

B. Defined Benefit Plans Gratuity (Unfunded) :

(i) The company administers its employees gratuity scheme unfunded liability. The present value of the liability for the defined benefit plan of gratuity obligation is determined based on actuarial valuation by an independent actuary at the period end, which is calculated using the projected unit credit method, which recognises each year of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

(ii) Gratuity benefits in india are governed by the payment of Gratuity Act, 1972. the Key Features are as under:

Benefits Offered : 15 / 26 X Salary X Duration Of Service

Salary Definition : Basic Salary Including Dearness Allowance (If Any)

Benefit Ceiling : Benefit Ceiling Of Rs. 20 Lakhs (Not Applied)

Vesting Conditions : 5 Years Of Continuous Service (Not Applicable In Case Of Death/ Disability)

Benefit Eligibility : Upon Death Or Resignation Or Withdrawal Or Retirement

Retirement Age : 58, 60, 62 Or 65 Years

(iii) Risks associated to the defined benefit plan of gratuity:

(a) Investment / Interest Risk: The present value of defined benefit plan liability is calcuated using discount rate determined with refence to market yield on government bonds denominated in indian rupees. A decrease in the bond interest rate will increase the plan liability.

(b) Longevity Risk: The present value of the defined benefit plan liablity is calculated by reference to the best estimate of the mortality of the plan participants both during and after their employment. An increase in the life exepectancy of the plan participants will increase the plan''s liablity.

(c) Salary Risk: The present value of the defined benefit plan liablity is calculated by reference to the future salaries of the plan participants. as such, an increase in the salary of the plan participants will increase the plan''s liability.

(d) Legislative Risk: Risks of increase in the plan liabilities or reduction in plan assets due to change in legislation.

Note - 40 - Contingent Liabilities and Capital Commitments		(Rs. in Lakhs)
Particulars	As at	As at
	31st March, 2023	31st March, 2022
(I) Contingent Liabilities
a) Claims against the Company not acknowledged as debts:	NIL	NIL
b) Corporate guarantees given to banker''s of foreign subsidiary company
(Mangalam Global (Singapore) Pte. Ltd.) (MGSPL) [USD 60 Lakhs
(FY 21-22 USD: 60 Lakhs)]	4,933.01	4,548.43
(II) Capital Commitments:
(a) Estimated amount of contracts remaining to be executed on capital account
and not provided for (net of capital advances)	NIL	NIL

During the year, subsequent to the approval of the Resolution Plan, the Income tax department has initiated reassessment proceedings for Assessment Year 2019-20 under section 147/ 148 of the Income Tax Act, 1961 in the name of HMIPL. The company has challenged the action of the income tax department by way of special civil application before the Hon''ble Gujarat High Court seeking to quash the said action and has also requested for an ad interim relief to stay the proceedings till the disposal of the company''s petition. The company has been advised that the action of the income tax authorities is not in accordance with the law and accordingly the company does not anticipate any liability in this regard.

Note - 41 - Operating Segment Information

(b) Geographical Information

The geographical information analyses the Company''s revenues and Non - Current Assets by the Company''s country of domicile (i.e., India) and other countries. In presenting the geographical information, segment revenue has been based on the geographical location of customers and segment assets have been based on the geographical location of assets.

Note - 42

Forensic audit of the Company with regard to the financial statement of the Company in context with the disclosure of financial information and the business transactions initiated by SEBI during the year is still ongoing. The Company has been continuously co-operating with the authority in this regard by providing the details being sought from the Company.

Financial Risk Management - Objectives and Policies

The Company is exposed to the Market Risk, Credit Risk and Liquidity Risk from its financial instruments.

(a) Interest Rate Risk

(b) Foreign Currency Risk

Other Price Risk is the Risk that the fair value of a financial instrument will fluctuate due to changes in market traded price. The Company is exposed to price risk arising mainly from investments in equity/equity-oriented instruments recognized at FVTPL/FVTOCI.

C. Credit Risk

(i) Cash and Cash Equivalent and Bank Balance:

Credit Risk related to cash and cash equivalents and bank balance is managed by only accepting highly rated banks and diversifying bank deposits and accounts in different banks.

(ii) Loans and Other Financial Assets measured at Amortized Cost:

(a) Concentration of Trade Receivables:

In order to avoid excessive concentrations of risk, the Company''s policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentration of credit risk are controlled and managed accordingly. Such identified concentration of credit risk on trade receivables other than credit impaired are disclosed below:

(iv) Expected credit losses:

Expected credit loss for trade receivables and other receivables under simplified approach:

The cash credit and other facilities may be drawn at any time and may be terminated by the bank without notice.

â¦ Maturities of Financial Liabilities:

The table below analyses financial liabilities of the Company into the relevant maturity grouping based on the remaining period from the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows:

E. Capital Management

The Company''s capital management objectives are

â¢ To ensure the company''s ability to continue as a going concern

â¢ To provide an adequate return to share holders

The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the face of balance sheet. Management assesses the Company''s capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the subordination levels of the Company''s various classes of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividend paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

The Company manages its capital on the basis of Net Debt to Equity Ratio which is Net Debt (Total Borrowings net of Cash and Cash Equivalents) divided by total equity.

The Company has complied with the covenants as per the terms and conditions of the major borrowing facilities throughout the Reporting Period.

Note - 48 - Balance Confirmation of Receivables

Confirmation letters have not been obtained from all the parties in respect of trade receivable, other Non-Current Assets and Other Current Assets. Accordingly, the balances of the accounts are subject to confirmation, reconciliation and consequent adjustments, if any.

Note - 49 - Balance Confirmation of Payables

Confirmation letters have not been obtained from all the parties in respect of trade payable and other Current Liabilities. Accordingly, the balances of the accounts are subject to confirmation, reconciliation and consequent adjustments, if any.

Note - 50 - Disclosure Under Section 186(4)

Loans given for the purpose of utilizing in the activity of the business (Outstanding Balance as on 31-03-2023): Indo Gum Products Private Limited Rs. 150.00 Lakhs (as on 31-03-2022 Rs. Nil) and Shree Jee Jewellers Rs. 107.56 Lakhs (as on 31-03-2022 Rs. Nil).

Note - 51 - Events occuring after the Balance Sheet Date

Note - 54- Utilisation of borrowed funds and share premium

As on March 31, 2023 there is no Unutilised Amounts in respect of any Issue of Securities and Long Term Borrowings from Banks and Financial Institutions. The Borrowed Funds have been Utilised for the Specific Purpose for which the Funds were raised.

Note - 55- H M Industrial Private Limited (HMIPL) (Corporate Insolvency Resolution Process) Resolution Plan

As per the composite scheme of arrangement submitted along with the approved plan, Steel Division of HMIPL is to be demerged and to be vested into Mangalam Worldwide Limited (MWL) a group company; and HMIPL and its rest business (i.e. Agro Business - Castor and Cotton) is amalgamated with MGEL with effect from appointed date i.e. 20 September 2022. Consequently, effect of the scheme including the tax impact has been given in the financial statements in accordance with Ind AS 103 - Business Combinations.

(c) On approval of the resolution plan, the suspended board of directors of HMIPL was replaced by MGEL nominees to the effect that HMIPL became an entity under common control.

The Order dated 20 September 2022 of Hon''ble the NCLT Ahmedabad (the adjudicating authority) provides -

(a) That the approved Resolution Plan shall become effective from the date of passing of the order (20/09/2022).

(b) That the order of moratorium dated 07/06/20 1 9 passed by the Adjudicating Authority under section14 of the IBC, 2016 shall cease to have effect from the date of the order.

"18. As far as reliefs and concessions claimed by the Resolution Applicant, the law has been well settled by the Hon''ble Supreme Court in the case of Ghanshyam Mishra and Sons Private Limited Ms Edelweiss Asset Reconstruction Company Limited and Ors. Reported in Manu/SC/0273/2021 in the following words:

I. "The legislative intent behind this is, to freeze all the claims so that the resolution applicant starts on a clean slate and is not flung with any surprise claims. If that is permitted, the very calculations on the basis of which the resolution applicant submits its plan, would go haywire and the plan would be unworkable.

(d) In view of (c) above, the Company is not liable for any liability / demand / claim except those specifically admitted as payable as described here-in-before as regards the all kind of previous claims against HMIPL.

Note - 56- Amalgamation of remaining business of H M Industrial Private Limited (Transferor Company) with Mangalam Global Enterprise Limited (Transferee Company)

As mentioned above HMIPL and its rest business (i.e. Agro Business - Castor and Cotton) is amalgamated with MGEL with effect from appointed date i.e. 20 September 2022. Consequently, effect of the scheme including the tax impact has been given in the accounts.

(a) MGEL has recorded assets and liabilities of the acquired business of HMIPL vested in it pursuant to the scheme, at the carrying value in the same form as appearing in the books of HMIPL.

(b) The identity of the reserves of the HMIPL has been preserved and has been recorded in the same form and at the same carrying amount.

(c) Inter corporate deposit / loans and advances / intercompany balances outstanding between MGEL and HMIPL has been cancelled.

(d) Necessary adjustments/ adjusting entries has been passed to ensure that the merged financial statement reflects the financial position based on consistent accounting policies followed by MGEL.

(e) The surplus (between the net assets acquired and cancellation of share capital of the acquired entity (in this case - Nil) has been credited to other equity (Amalgamation Reserve).

(f) The financial information in the financial statements in respect of prior periods is not restated since the HMIPL has become ''entity under common control'' during the financial year.

(g) The amalgamation has taken place with effect from the appointed date and in accordance with the provisions of section 2(1B) of the Income tax act 1961.

As per the approved Resolution Plan, approval of the Resolution Plan is to be treated as waiver of all the past liabilities under the Income Tax Act, including but not restricted to MAT, Interest, Fine, Penalty etc. on Corporate Debtor - HMIPL. Under the circumstances any income tax / direct tax liabilities which may arise on filing of income tax return or otherwise for the period up to 19-09-2022 has not been measured and no provision for the same is made in the books of account.

(b) The Company does not have any Investment Property.

(c) The Company has not revalued its Property, Plant and Equipment (including Right-of-Use Assets) and Intangible Assets.

(i) Repayable on Demand; or

(ii) Without specifying any terms or period of repayment

(e) Capital Work in Progress ageing schedule: Refer Note No. 2D

(f) There are no Intangible Assets under development as on 31 March 2023.

(g) No Proceedings have been initiated or pending against the Company for holding any Benami property under the Benami

Transactions (prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

(h) Borrowings Secured against Current Assets: Refer Note No. 21.5.

(i) The Company is not declared Willful Defaulter by any Bank or Financial Institution or Other Lender.

(j) The Company has not undertaken any transactions with Companies struck off under section 248 of the companies act, 2013 or section 560 of companies act, 1956.

(k) No Charges or satisfaction of charges are yet to be registered with registrar of companies beyond the statutory period as on 31 March 2023 except in case of hypothecation of commercial vehicle Loans (HDFC Bank), where company is awaiting certification on charge registration form (ROC Form) from lender.

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

Reason for Variance

(i) Ratio has improved on account of increased earnings available for servicing the debts.

(ii) Ratio has improved on account of increased earnings during the year.

(iii) The company is in the process of regularisation of its operating/ manufacturing cycle for new business units viz. Castor & Cotton at Kapadvanj, and introduction of new business vertical viz. consumer packing division.

(iv) On account of improved margins and regularisation of operating/ manufacturing cycle of the company.

(v) The Ratio has improved on account of returns on investments and withdrawal of erstwhile contribution in a LLP.

(n) No Scheme of arrangements has been approved by the competent authority in terms of sections 230 to 237 of the Companies Act, 2013 except as disclosed in note no: 55 and 56.

(o) The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (intermediaries) with the understanding (whether recorded in writing or otherwise) that the intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (ultimate beneficiaries) by or on behalf of the Company or provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

(p) 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 directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (ultimate beneficiaries) by or on behalf of the funding party or provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

(q) No Transactions has been surrendered or disclosed as income during the year in the tax assessment under the income tax act, 1961. There are no such previously unrecorded income or related assets.

(r) Corporate Social Responsibility (CSR): Refer Note No. 45

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

Note - 58 - Previous year''s figures have been regrouped, reclassified wherever necessary to correspond with the current year classification / disclosure.

Note - 59 - Authorisation of financial statements

The Financial statements for the year ended 31 March 2023 were approved by the board of directors on 15th May 2023.

Mar 31, 2021

13.1 Rights, preferences and restrictions attached to equity shares:

The Company has one class of equity shares having a par value of Rs. 10/- each. 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 ensuing 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 share holding.

13.2 Company issued and alloted 80,28,705 bonus shares(as fully paid) of face value of Rs 10/- each to the existing shareholders at the rate of one shares for every two share held on 02 September 2020.

Company issued and alloted 93,01,928 bonus shares(as fully paid) of face value of Rs 10/- each to the existing shareholders at the rate of four shares for every one share held on 03 September 2019.

13.3 During the year Company have made preferential allotment of 10,00,000 equity shares having face value of Rs 10/- each fully paidup for cash at a price of Rs 42/- per equity shares (including share premium of Rs 32/- per equity share) aggregating to Rs 100.00 Lakhs(Face Value) & Rs. 320.00 Lakhs(Share Premium). The aforementioned equity shares were alloted on 05 December 2020.

19.1 The Company has created a charge in favour of HDFC Bank Ltd, to the extent of Rs.6500 Lakhs (31-3-20 Rs 2500 Lakhs, 01-4-19 Rs 710 Lakhs) by way of hypothecation of stock and book debts (see note 19.4) on entire exposure as a security for various working capital facilities viz CC, EPC, PCFC, FBP, FBD, Invoice Discounting etc granted by the bank. The above facilities are further collaterally secured by way of equitable mortgage of companyâs property office no 201, Setu Complex, Ahmedabad. The above facilities are guaranteed by three directors of the company in their personal capacity. The company has given Fixed Deposit of Rs 490 Lakhs (principal value) under lien in this regards. In addition to above property, Bunglow on plot no 19/B Kalyan Society Mithakhali Ahmedabad and Bungalow no 21 Sarthi-3 CHS Ltd Thaltej Ahmedabad owned by a director, is given as collateral security by way of mortgage.

19.2 The Company has created a charge in favour of HDFC Bank Ltd, to the extent of Rs.1500 Lakhs (31-3-20 Rs 1500 Lakhs, 01-4-19 Rs NIL) by way of pledge of Stock of warehouse receipt/storage receipts as security for Short Term loan against Pledge of physical commodities Facility granted by the bank. The facility is further guaranted by three directors of the company in their personal capacity.

19.3 The Company has created 1st Pari pasu charge in favour of Punjab National Bank (PNB), to the extent of Rs.2750 Lakhs (31-3-20 Rs 2500 Lakhs, 01-4-19 Rs NIL). 1st pari pasu charge by way of hypothecation of entire current assets (see note 19.4) (Present & Future) including stocks of raw materials, stocks in process, finished goods, receivables, store, spares, consumables etc. as a security for various working capital facilities viz CC, PCFC, FOBP, FOUPB, FABC etc granted by the bank. Collateral Securities: PNB has stipulated following collateral securities. (i) companyâs property at 17 Orchid Green, Gokuldham, Ahmedabad. (EM pending to be executed) (ii) Lien of Fixed Deposit Receipt of Rs 223 Lakhs. (Lien on FD pending to be executed) (iii) property at C-4-B Prarthana Upvan CHS Ltd, Taluka Sanand, jointly owned by company and M/s Specific Worldwide LLP (EM pending to be executed). Till the time equitable mortgage of aforesaid properties are created company has provided liquid securities by way of Lien on Fixed Deposit of Rs 1250 Lakhs.Guarantee/Corporate Guarantee: Three directors in their personal capacity and M/s Specific Worldwide LLP.

19.4 Working capital facilities sanctioned by HDFC Bank & PNB is under multiple banking arrangement. Working capital facilities are secured by way of hypothecation of entire current assets on Pari pasu basis (in proportion to the limit sanctioned by each bank).

19.5 The company has created charge in favour of IndusInd Bank Ltd, to the extent of Rs 500 Lakhs (31-3-20 Rs 500 Lakhs, 01-4-19 Rs Nil), by way of pledge of stock to secure line of credit for short term loan against agricultural commodities stored in approved warehouse facility. The facility is further guarantee by two directors of the company in their personal capacity.

19.6 The company has created charge in favour of Axis Bank Ltd, to the extent of Rs Nil (31 -3-20 Rs 400 Lakhs, 01-4-19 Rs 400 Lakhs), by way of Pledge of stock to secure pledge of Warehouse Receipts /Storage Receipts with Lien noted in favour of the Bank Facility granted by the bank. The facility is further guarantee by two directors of the company in their personal capacity.

B. Defined Benefit Plans Gratuity (Unfunded) :

(i) The Company administers its employeesâ gratuity scheme unfunded liability. The present value of the liability for the defined benefit plan of gratuity obligation is determined based on actuarial valuation by an independent actuary at the period end, which is calculated using the projected unit credit method, which recognises each year of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

(ii) Risks associated to the defined benefit plan of gratuity:

(a) Investment / Interest Risk: The present value of defined benefit plan liability is calcuated using discount rate determined with refence to market yield on government bonds denominated in Indian rupees. A decrease in the bond interest rate will increase the plan liability.

The outbreak of Covid-19 pandemic globally and in India is causing significant disturbance and slowdown of economic activity. The Companyâs operations and Financial Results for the year ended 31 March, 2021 were impacted due to it. The Companyâs operations are being carried out with requisite precaution in place. The situation is continuously evolving, and the impact assessed may be different from the estimates made as at the date of approval of these financial results and management will continue to monitor any material changes arising due to the impact of this pandemic on financial and operational performance of the Company and take necessary measures to address the situation.

Note - 39 - Operating Segment Information

(a) The Company has identified âAgro based commoditiesâ viz castor seeds, castor derivatives products, cotton, cotton ginning, rice, mustard seeds and other agro commodities, which have similar risks and returns, as its sole primary business segment, accordingly, there are no separate reportable segment.

(b) Geographical Information

The geographical information analyses the Companyâs revenues and non-current assets by the Companyâs country of domicile (i.e., India) and other countries. In presenting the geographical information, segment revenue has been based on the geographical

NOTE - 42 - LEASES (Right of Use Assets)

The Companyâs significant leasing arrangements are in respect of Land and buildings, Plant & Machinery and office premises and equipment taken on leave and license basis.

Effective April 1,2019, the Company adopted Ind AS 116: Leases and applied the standard to all lease contracts existing on April 1,2019 using the modified retrospective method and recorded the lease liability at the present value of the lease payments discounted at the incremental borrowing rate and the ROU asset at its carrying amount as if the standard had been applied since the commencement date of the lease, but discounted at the Companyâs incremental borrowing rate at the date of initial application. The weighted average incremental borrowing rate applied to lease liabilities is 10.00 %.

Note - 43 - Financial Instruments

Financial Risk Management - Objectives and Policies

The Companyâs financial liabilities mainly comprise the loans and borrowings in foreign as well as domestic currency, money related to capital expenditures, trade and other payables. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs financial assets comprise mainly of investments, security deposits, cash and cash equivalents, other balances with banks, trade and other receivables that derive directly from its business operations.

The Company is exposed to the Market Risk, Credit Risk and Liquidity Risk from its financial instruments.

The following disclosures summarize the Companyâs exposure to the financial risks and the information regarding use of derivatives employed to manage the exposures to such risks. Quantitative Sensitivity Analysis has been provided to reflect the impact of reasonably possible changes in market rate on financial results, cash flows and financial positions of the Company. ^{1 2 3}

B. Market Risk

Market Risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market Risk comprises three types of Risk: âInterest Rate Risk, Currency Risk and Other Price Riskâ. Financial instrument affected by the Market Risk includes loans and borrowings in foreign as well as domestic currency, retention money related to capital expenditures, trade and other payables.

(a) Interest Rate Risk

(b) Foreign Currency Risk

The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the US Dollar. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the functional currency of the Company. Considering the volume of foreign currency transactions, the Company has taken certain forward contracts to manage its exposure.

Credit risk is the risk that a counterparty fails to discharge its obligation to the Company. The Companyâs exposure to credit risk is influenced mainly by cash and cash equivalents, trade receivables and other Financial assets measured at amortized cost. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls.

(i) Cash and cash equivalent and bank balance:

Credit risk related to cash and cash equivalents and bank balance is managed by only accepting highly rated banks and diversifying bank deposits and accounts in different banks.

(ii) Loans and Other financial assets measured at amortized cost:

(iii) Trade receivables:

Expected credit loss for trade receivables under simplified approach:

The Company recognizes lifetime expected credit losses on trade receivables using a simplified approach, wherein Company has defined percentage of provision by analyzing historical trend of default based on the criteria defined below and such provision percentage determined have been considered to recognize life time expected credit losses on trade receivables (other than those where default criteria are met in which case the full expected loss against the amount recoverable is provided for). Further, the Company has evaluated recovery of receivables on a case to case basis. No provision on account of expected credit loss model has been considered for related party balances. The Company computes credit loss allowance based on provision matrix. The provision matrix is prepared on historically observed default rate over the expected life of trade receivable and is adjusted for forward - looking estimate. The provision matrix at the end of reporting period is as follows:

D. Liquidity Risk

Liquidity Risk is the risk that the Company will encounter difficulty in raising the funds to meet the commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value. Management monitors rolling forecasts of the Companyâs liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates.

â¢ Maturities of Financial Liabilities:

The tables below analyze the Companyâs financial liabilities into relevant maturity based on their contractual maturities for all non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

E. Capital Management

The Companyâs capital management objectives are

â¢ To ensure the companyâs ability to continue as a going concern

â¢ To provide an adequate return to share holders

The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the face of balance sheet. Management assesses the Companyâs capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the subordination levels of the Companyâs various classes of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt. The Company manages its capital on the basis of Net Debt to Equity Ratio which is Net Debt (Total Borrowings net of Cash and Cash Equivalents) divided by total equity plus net debt.

These are the Companyâs first financial statements prepared in accordance with Ind AS.

For all period up to and including the year March 31,2020, the Company had prepared its financial statements in accordance with the Accounting Standards notified under Section 133 of The Companies Act, 2013, read together with Rule 7 of the Companies (Accounts) Rules, 2014 (âPrevious GAAPâ). For the year ended on March 31,2021 prepared and presented in accordance with the Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015 in accordance with the accounting policies as set out by the Company in Note No. 1.

The Accounting Policies as set out in Note No. 1 have been applied in preparing its financial statements for the year ended March 31,2021 including the Comparative information for the year ended on March 31, 2020 and the Opening Ind AS Balance Sheet on the date of transition i.e., April 01, 2019.

In preparing its Ind AS Balance Sheet as at April 01, 2019 and in preparing the Comparative information for the period ended March 31, 2020, the Company has adjusted amounts reported previously in financial statements prepared in accordance with Previous GAAP. This note explains the principal adjustments made by the Company in restating its financial statements prepared under Previous GAAP for the followings:

a) Balance Sheet as at April 01, 2019 (Transition Date);

b) Balance Sheet as at March 31,2020;

c) Statement of Profit and Loss for the year ended on March 31,2020; and

d) Statement of Cash Flows for the year ended March 31,2020

Ind AS 101 - First Time Adoption of Indian Accounting Standard, allow the first-time adopters, exemptions from the retrospective application and exemption of certain requirements of the Other Ind AS. The Company has availed the following exemptions as per Ind AS 101.

A. Ind AS Optional Exemptions:

1) Financial Instruments:

For the financial instruments, where the fair market values are not available (viz. interest free and below market rate security deposits or loans) the Company has elected to adopt fair value recognition prospectively to transactions entered after the date of transition.

2) Deemed cost of property, Plant and equipment and intangible Assets:

The Company has elected to consider the Carrying Value of all its Property, Plants and Equipmentâs (PPE) and Intangible Assets recognized in the financial statements prepared under Previous GAAP and use the same as Deemed Cost in the Opening Ind AS Financial Statements.

3) Deemed cost for Investments in subsidiaries:

The carrying amount of Companyâs Investments in its Associate Companies as per the financial statements of the Company prepared under Previous GAAP, are considered as Deemed Cost for measuring such investments in the Opening Ind AS Financial Statements.

4) Leases:

The company has elected to measure the right of use assets at the date of transition as if Ind AS 116 had been applied since the commencement date of the lease, but discounted using the lesseeâs incremental borrowing rate at the date of transition to Ind AS. Further the following expedients were used on transition to Ind AS.:

- the use of single discount rate to portfolio of leases with reasonably similar Characteristics.

- the accounting for operating leases with a remaining lease of less than 12 months as on transition date as short-term leases

- the exclusion of initial direct costs for the measurement of the Right-of-use assets at the date of initial application.

B. Ind AS Mandatory Exceptions:

1) Estimates:

An entity estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimate made for the same date in accordance with Previous GAAP (after adjustment to affect any difference in accounting policies) unless there is objective evidence that those estimates were in error.

Ind AS estimates as at 01^st April, 2019 are consistent with the estimates as at the same date made in conformity with Previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as there were not required under previous GAAP.

â¢ The company has applied modified retrospective approach to all leases contract existing as at 01 April 2019 under Ind As 116

2) Classification and measurement of financial assets and liabilities:

The classification and measurement of financial assets will be made considering whether the conditions as per Ind AS 109 are met based on facts and circumstances existing as on date of transition. Financial Assets can be measured using effective interest method by assessing its contractual cash flow characteristics only on the basis of facts and circumstance existing at the date of transition and if it is impracticable to assess elements of modified time value of money i.e., use of effective interest method, fair value of financial assets at the date of transition shall be the new carrying amount of that asset. The measurement exemption applies for financial liabilities as well.

C. Reconciliations between Previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from Previous GAAP to Ind AS.

1. Lease accounting adjustment under Ind AS 116

The Company has leases for Immovable properties, Plant & Machinery and related facilities. Under the previous GAAP, all the of the payments in regard to these leases were expensed off in the statement of profit and loss. However, under Ind AS 116, the accounting is different as each lease is reflected on the balance sheet as a right-of-use asset and a lease liability with the exception of short-term leases and leases of low-value underlying assets which is expensed off in the statement of profit and loss. The Company classifies its right-of-use assets in a consistent manner to its property, plant and equipment.

The above adjustment has also impacted cash flow statement of the Company as under the previous GAAP, the rent paid was used to be classified as operating activity; while the payments of lease liability under Ind AS 116 is classified under financing activities as per Ind AS 7.

Under the previous GAAP, the company has created rent equalization on straight line basis for the rent receivable. The same has been reversed as per the Ind AS 116.

2. Measurement of financial assets and financial liabilities at amortized cost

Under Previous GAAP, all financial assets and financial liabilities were carried at cost. Under Ind AS, certain financial assets and financial liabilities are subsequently measured at amortized cost which involves the application of effective interest method. In applying the effective interest method, an entity identifies, fees that are an integral part of the effective interest rate of a financial instrument. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial asset or financial liability to the gross carrying amount of the financial asset or financial liability. For certain financial liabilities, the fair value of the financial liability at the date of transition to Ind AS has been considered as the new amortized cost of that financial liability at the date of transition to Ind AS.

3. Deferred tax impact on above Ind AS

Under Previous GAAP, deferred tax was accounted using the income statement approach, on the timing differences between the taxable profit and accounting profits for the period. Under Ind AS, deferred tax is recognized following balance sheet approach on the temporary differences between the carrying amount of asset or liability in the balance sheet and its tax base. In addition, various transitional adjustments have also led to recognition of deferred taxes on new temporary differences.

4. Other Transition Adjustments

The errors and omissions came across upon the transition to Ind AS were adjusted in the Financial Statements includes Property, Plant & Equipment and Provision for Income under the Other Current Assets.

5. Recognition of loss allowance for expected credit losses on financial assets measured at amortized cost

Under Previous GAAP, provision for doubtful debts was recognized based on the estimates of the outcome and of the financial effect of contingencies determined by the management of the Company. This judgement was based on consideration of information available up to the date on which the financial statements were approved and included a review of events occurring after the balance sheet date.

Under Ind AS, a loss allowance for expected credit losses is recognized on financial assets carried at amortized cost. Expected loss on individually significant receivables is assessed when they are past due and based on companyâs historical counterparty default rates and forecast of macroeconomic factors. Other receivables have been segmented by reference to the industry of the counterparty and other shared credit risk characteristics to evaluate the expected credit loss. The expected credit loss estimate is then based on recent historical counterparty default rates for each identified segment.

6. Reclassification / Regrouping upon Transition to Ind AS

Previous GAAP figures have been reclassified/regrouped wherever necessary to confirm with financial statements prepared under Ind AS.

Note - 45 - Balance confirmation of Receivables

Confirmation letters have not been obtained from all the parties in respect of Trade Receivable, Other Non-Current Assets and Other Current Assets. Accordingly, the balances of the accounts are subject to confirmation, reconciliation and consequent adjustments, if any.

Note - 46 - Balance Confirmation of Payables

Confirmation letters have not been obtained from all the parties in respect of Trade Payable and other current liabilities. Accordingly, the balances of the accounts are subject to confirmation, reconciliation and consequent adjustments, if any.

Note - 47 - Disclosure under section 186(4)

Loans given for the purpose of utilizing in the activity of the business (outstanding balance as on 31.03.2021): Mangalam Worldwide Pvt. Ltd. Rs. 238.98 lakhs (as on 31-03-2020 Rs. Nil as on 01-04-2019 Rs. Nil), Mangalam Global (Singapore) Pte. Ltd. Rs. Nil (as on 31-032020 Rs. 137.64 laksh as on 01-04-2019 Rs. Nil), Hindprakash Castor Derivatives Pvt Ltd Rs. 691.37 laksh (as on 31 -03-2020 Rs. 307.82 lakhs as on 01-04-2019 Rs.170.31 lakhs), Ecofine Colourchem Pvt Ltd Rs. Nil (as on 31-03-2020 Rs. 9.47 lakhs as on 01-04-2019 Rs. 8.55 lakhs).

Note - 48 - Authorisation of financial statements

The financial statements for the year ended 31 March 2021 were approved by the Board of Directors on 25 June 2021.

Investment in subsidiaries are measured at cost as per Ind AS 27, âSeparate financial statementsâ, and hence not presented here.

Fair value of financial assets and liabilities measured at amortized cost approximates their respective carrying values as the management has assessed that there is no significant movement in factor such as discount rates, interest rates, credit risk from the date of the transition. The fair values are assessed by the management using Level 3 inputs.

The financial instruments measured at FVTPL represents current investments and derivative assets having been valued using level 2 valuation hierarchy.

Fair value hierarchy

The fair value of financial instruments as referred to in note below has been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities [Level 1 measurements] and lowest priority to unobservable inputs [Level 3 measurements].

The categories used are as follows:

Level 1: Quoted prices for identical instruments in an active market

Level 2: Directly (i.e. as prices) or indirectly (i.e. derived from prices) observable market inputs, other than Level 1 inputs; and

Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article