Dear Members,

The Directors have pleasure in presenting Annual report together with the Audited Statement of Accounts of the company for the year ended on 31stMarch 2018:

1. FINANCIAL RESULTS

(Rs.in Lacs)

2. OPERATIONAL PERFORMANCE:

Your Directors are pleased to inform the members that during the year under review, your company reported encouraging performance. The Company has reported total income of Rs. 8390.61 Lacs for the current year compared to Rs. 7503.30 Lacs in the previous year registering an increase of 11.83%.The

Profit after Tax for the year under review amounted to Rs. 470.88 Lacs against Rs. 419.46 Lacs in the previous year registering an impressive growth of 12.26%, despite the substantial increase in power cost from Rs. 471.76 lacs to Rs. 586.83 lacs resulting an increase of 24%. This was due to increase in wheeling cost & other charges by State Government on power purchased from Energy Exchange of India. The rate per unit has gone up from Rs. 6.06 to Rs. 7.49 a jump of 24%. To control the power cost your company is exploring for installation of Solar Energy.

Your directors are pleased to report that Interest Cost has gone down from Rs. 339.13 lacs to Rs. 284.52 lacs mainly due to better working capital management and eligibility of interest subsidy for the full year under the “Rajasthan Investment Promotion Scheme”. Your Directors have taken various steps during the year to rationalize the rate of interest charged by our bankers for working capital & term loan and achieved good saving during the year under review. This process will be continuing during the current year as well.

Your Directors are pleased to report that company’s exports increasing year after year and during the year under review export sale has gone up from Rs. 713.01 lacs to Rs. 1606.90 lacs registering an increase of 125%. This is due to quality consistency and good service to our all export customers. We hope that during current year export sale should further improve.

3. EXPANSION PLANS:

Your company is embarking upon expansion to install 25536 Ring Spindle to produce 100% cotton yarn at the total cost of Rs. 125.40 Crores to be financed out of term loan of Rs. 94.00 Crores and balance Rs. 31.40 Crores through promoter’s contribution. State Bank of India and Punjab national bank has sanctioned term loans as required above. The company has already acquired land adjacent to its present plant and placed orders for the major plant & machineries. The project is expected to start commercial production by March 2019.

4. TRANSFER TO RESERVES:

The Company has not transferred any amount to reserves.

5. DIVIDEND:

Your board of directors do not recommend any dividend for the period under review.

6. CAPITAL STRUCTURE:

During the year under review, your Company has increased its Authorised Equity Share Capital from Rs. 2,50,00,000/- (Rupees Two Crore Fifty Lakh) divided into 25,00,000 (Twenty-Five Lakh) Equity Shares of Rs. 10/- each to Rs. 22,50,00,000/- (Rupees Twenty-Two Crore Fifty Lakh) divided into 2,25,00,000 (Two Crore Twenty-Five Lakh) Equity Shares of Rs. 10/- each in its Extra-Ordinary General Meeting of the Company held on 23^rd December 2017.

During the year Company has raised its paid-up share capital by way of Bonus Issueof 91,71,000 Equity Shares of Rs. 10/- each and also reissued 4.60.000 Equity Shares which were forfeited due to nonpayment of call. The Capital Structure of the Company as on 31.03.2018 are as follows: -

The Authorized Share Capital of the Company is Rs. 22,50,00,000 (Rupees Twenty-Two Crore Fifty Lakh) divided into 2,25,00,000 (Two Crore Twenty-Five Lakh) Equity Shares of Rs. 10/- each.

The Issued, subscribed andPaid up Share Capital of the Company is Rs. 11,66,90,000 (Rupees Eleven Crore Sixty-Six Lakh Ninety Thousand) divided into 1.16.69.000 (One Crore Sixteen Lakh Sixty Nine Thousand) Equity Shares of Rs. 10/- each.

7. RECOGNITION:

USTER TECHONOLOGIES AG of Switzerland has renewed its authorization to use the “USTERIZED” trade mark to your company, “A mark of quality & trust”, which is a prestigious quality authorization granted to only about 70 textiles mill in the world. In the standalone Open-end spinning segment, LAGNAM is the first to get this authorization in the world.

8. MATERIAL CHANGES BETWEEN THE DATE OF THE BOARD REPORT AND END OF FINANCIAL YEAR:

There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

9. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE:

During the year under review there has been no such significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future.

10. SUBSIDIARY, ASSOCIATES AND JOINT VENTURE COMPANY:

As on March 31, 2018, the Company does not have any subsidiary or joint venture or any associates Company.

11. STATUTORY AUDITOR & AUDIT REPORT:

RECOMMENDATION FOR CONTINUATION / RATIFICATION OF APPOINTMENT OF STATUTORY AUDITOR(S) OF THE COMPANY FOR THE FY 2018-19:

M/s SSMS & Associates, Chartered Accountants, Bhilwara is a statutory auditor of the Company having FRN 019351C, to hold office from the conclusion of Annual General Meeting (AGM) held on 30.09.2014 till the conclusion of the AGM of the Company to be held in the year 2019 (subject to ratification of their appointment at every AGM held after their appointment).

They have confirmed their eligibility to the effect that their continuation / ratification, if made would be within the prescribed limits under the Act and that they are not disqualified. As per the requirement, of section 139, their continuation / appointment till the conclusion of next annual general meeting is placed before the shareholders for ratification.

There are no qualifications or observations, or remarks made by the Auditors in their Report.

12. SECRETARIAL AUDIT REPORT:

The requirement of obtaining a Secretarial Audit Report from the practicing company secretary is not applicable to the Company.

13. CHANGE IN THE NATURE OF BUSINESS:

There is no change in the nature of the business of the company.

14. DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

The Board of Directors was duly constituted. During the year there are several appointments and changes in designation of directors & KMP’s details of which are as under:

- Mr. Anand Mangal [DIN: 03113542] has been appointed as Managing Director of the Company.

- Mr. Vijay Singh Bapna [DIN: 02599024] has been appointed as Professional Non-Executive Director of the Company.

- Mr. Devi Lal Mundra [PAN: AKUPM7207P] has been appointed as Chief Financial Officer of the Company.

- Mr. Rajeev Parashar [PAN: BLSPP2313P] has been appointed as Company Secretary of the Company.

- Mr. Dwarka Prasad Mangal [DIN: 01205208] has been appointed as WTD cum Chairman.

- Mr. Jagdish Chandra Laddha [DIN: 00118527], Mr. Anil Shah [DIN: 00145396] and Ms. Dipali Mathur [DIN: 07732611] has been appointed as Independent Non-Executive Directors of the Company.

Mr. Dwarka Prasad Mangal [DIN: 01205208] Whole Time Director of the Company, is liable to retire by rotation & being eligible to offer themselves for reappointment.

15. KEY MANAGERIAL PERSONNEL:

During the year under review, the Company has following persons as Key Managerial Personnel:

16. DEPOSITS:

The Company has not invited/ accepted any deposits from the public during the year ended March 31, 2018. There were no unclaimed or unpaid deposits as on March 31, 2018.

17. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 sub rules (3) of The Companies (Accounts) Rules, 2015 - “AS PER ANNEXURE- I ENCLOSED”

18. CORPORATE SOCIAL RESPONSIBILITY:

In pursuant to Section 135(1) of the Companies Act, 2013 read with rules framed there under a CSR Policy to ensure Social Responsibilities has been adopted during the current year. The CSR Policy has been uploaded on the website of the Company at www.lagnamspintex.com under Investor Desk>>Policies>>CSR Policy.

The obligation under section 135 of the Companies Act, 2013 to contribute minimum 2% of the average net profit of preceding three years is now applicable to the company and accordingly the company has made a provision of Rs. 7.04 Lacs, which will be spent in the financial year 2018-2019.

19. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

In pursuant to the Section 177(9)& (10) of the Companies Act, 2013 read with rules framed there under, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism / Whistle Blower Policy has been uploaded on the website of the Company at www.lagnamspintex.com under Investor Desk>>Policies>>Vigil Mechanism / Whistle Mechanism Policy.

20. RISK MANAGEMENT:

A well-defined risk management mechanism covering the risk mapping and trend analysis, risk exposure, potential impact and risk mitigation process is in place. The objective of the mechanism is to minimize the impact of risks identified and taking advance actions to mitigate it. The mechanism works on the principles of probability of occurrence and impact, if triggered. A detailed exercise is being carried out to identify, evaluate, monitor and manage both business and non-business risks.

The Board of Directors of the Company and the Audit Committee shall periodically review and evaluate the risk management system of the Company so that the management controls the risks through properly defined network. Head of Departments shall be responsible for implementation of the risk management system as may be applicable to their respective areas of functioning and report to the Board and Audit Committee.

The Company has not made Risk Management Committee, but the Board of Directors and Audit Committee is looking after the Risk Management of the Company.

21. MEETINGS OF THE BOARD OF DIRECTORS:

The Board of Directors of the Company met 13 times viz. on 01.04.2017, 10.04.2017, 27.06.2017, 25.08.2017, 23.11.2017, 28.12.2017, 29.12.2017, 25.01.2018, 03.02.2018, 05.02.2018, 06.02.2018, 15.02.2018 & 22.02.2018 during the year, in respect of which proper notices were given and the proceedings were properly recorded, signed and maintained in the Minutes Book kept by the company for the purpose. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

During the year Mr. D. P. Mangal & Mr. Anand Mangal directors of the Company has attended 13 board meetings out of 13 board meetings held. Mr. V. S. Bapna, Mr, J. C. Laddha, Mr. Anil Shah & Ms. Dipali Mathur directors of the Company has not attended any meeting during the year as our board has been reconstituted in the month of January - February 2018 by way of appointment of Mr. V. S. Bapna, Mr, J. C. Laddha, Mr. Anil Shah & Ms. Dipali Mathur.

22. MEETINGS OF THE MEMBERS:

During the year under review Annual General Meeting of the Company was held on 21.08.2017 and 03 (Three) Extra-Ordinary General Meetings were held on 23.12.2017, 22.01.2018 & 10.02.2018.

23. DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the requirement under section 134(3)(C) of the Companies Act, 2013 with respect to Directors’ Responsibility Statement, it is hereby confirmed that:

(i) In the preparation of the annual accounts for the financial year ended 31st March, 2018, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2018 and of the profit and loss of the company for that period;

(iii) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) The directors had prepared the annual accounts on a going concern basis; and

(v) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

24. DECLARATION BY INDEPENDENT DIRECTORS:

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149 (6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

25. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

During the year under review, the Company has not advanced any loans/ given guarantees/ provide any security or made investments under section 186 of the companies act, 2013.

26. INTERNAL CONTROL SYSTEMS:

The Company’s internal control systems are adequate and commensurate with the nature and size of the Company and it ensures:

- Timely and accurate financial reporting in accordance with applicable accounting standards.

- Optimum utilization, efficient monitoring, timely maintenance and safety of its assets.

- Compliance with applicable laws, regulations and management policies.

27. INTERNAL FINANCIAL CONTROL FOR FINANCIAL STATEMENTS:

Our Company has adequate system of internal controls commensuration with the size of its operation and business, to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition, and to ensure that all the business transactions are authorized, recorded and reported correctly and adequately.

The Company works in a dynamic business environment and adopts the appropriate internal financial controls, to establish reliability of financial reporting and the preparation of financial statements for external purposes, in accordance with the generally accepted accounting principles. It includes inducting and maintaining such business policies and procedures as may be required to successfully conduct the business of the company and maintain such records as to correctly record the business transaction, assets and liabilities of the company in such a way that they help in prevention & detection of frauds & errors and timely completion of the financial statements.

28. HUMAN RESOURCES AND INDUSTRIAL RELATIONS:

The Company treats its “Human Resources” as one of its most important assets.

Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. The Company thrust is on the promotion of talent internally through job rotation and job enlargement.

29. PARTICULARS OF EMPLOYEE:

None of the employee has received remuneration exceeding the limit as stated in rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

30. RELATED PARTY TRANSACTIONS:

All related party transactions that were entered during the financial year, were on the arm’s length basis and were in the ordinary course of business and do not attract the provisions of section 188 of the Companies Act, 2013. Thus, disclosure in form AOC-2 is not required.

All Related Party Transactions were placed before the Board for approval. A policy on the related party Transitions was framed & approved by the Board and posted on the Company’s website at www.lagnamspintex.com under Investor Desk>>Policies>>Policy on RPT.

However, you may refer to Related Party transactions, as per the Accounting Standards, in the Notes forming part of financial statements.

31. EXTRACT OF ANNUAL RETURN:

Extract of Annual Return of the Company in the prescribed Form MGT-9 is annexed herewith. (Annexure- II)

32. INVESTORS EDUCATION AND PROTECTION FUND:

There were no amounts required to be transferred to the Investor Education and Protection Fund by the Company during the year.

33. CONVERSION OF THE COMPANY:

The Members of the Company, in their ExtraOrdinary General Meeting held on 22^nd January 2018, had approved the conversion of the Company from Private Limited to Public Limited by deleting the “Private” word from the name of the Company. Consequently, the name of the Company was changed from “Lagnam Spintex Private Limited” to “Lagnam Spintex Limited”. The name of the Company has been approved by the Registrar of Companies, Jaipur and the Company becomes Public Limited w.e.f. 31^st January 2018.

34. COMMITTEES:

During the year your Company has framed following Committees of the Board in accordance with the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:

- AUDIT COMMITTEE

The Audit Committee comprises Mr. J. C. Laddha as Chairman, Mr. D. P. Mangal and Mr. Anil Shah as the Members. The Committee is assigned role, powers and responsibilities as provide under Section 177 of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

- STAKEHOLDER’S RELATIONSHIP COMMITTEE

The Stakeholder’s Relationship Committee comprises Mr. V. S. Bapna as Chairman, Mr. D. P. Mangal and Mr. Anand Mangal as the Members. The Committee is constituted to supervise and ensure Share Transfer related matters and to look after the Stakeholder’s Grievances.

- NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee comprises Mr. J. C. Laddha as Chairman, Mr. V. S. Bapna and Mr. Anil Shah as the Members. The Committee is formed for the purpose of recommending the nomination and remuneration and evaluation of the Directors performance.

- CSR COMMITTEE

The CSR Committee comprises. J. C. Laddha as Chairman, Mr. V. S. Bapna and Mr. D. P. Mangal as the Members. The Committee is constituted for recommendation and monitoring of CSR activities.

35. INITIAL PUBLIC OFFER (IPO):

The Company is in process to make Initial Public Offer (IPO).

The Company obtained consent of Members in ExtraOrdinary General Meeting dated 10th February, 2018 for making initial public offering pursuant to Section 62 (1) (c) of the Companies Act, 2013 (the “Act”) and Companies (Prospectus and Allotment of Securities) Rules, 2014 and in accordance with the provisions of the Chapter X (B) of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (the “SEBI ICDR Regulations”.)

36.DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013:

To prevent sexual harassment of women at work place, The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9^th December 2013. The Company has zero tolerance for sexual harassment at workplace in line with provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules there under for prevention and redressal of complaints of sexual harassment at workplace.

During the year under review, no complaints were received by the Company relating to sexual harassment at workplace. The Management of the Company endeavors to provide safe environment for the female employees of the Company.

37. REGISTRAR AND SHARE TRANSFER AGENT:

The Company has appointed Bigshare Services Private Limited as its Registrar and Share Transfer Agent and executed Agreement between Company and Bigshare Services Private Limited on 15^th March, 2018. TheCorporate Office of Bigshare Services Pvt. Ltd. situated at “1st Floor, Bharat Tin Works Building, Opp. Vasant Oasis, Makwana Road, Marol, Andheri East, Mumbai-400059, Maharashtra.

38. DEMATERIALISATION OF SECURITIES:

The Company’s Equity Shares are admitted in the system of Dematerialization by both the Depositories namely NSDL and CDSL. The Company has signed Tripartite Agreement through Registrar and Share Transfer Agent M/s Bigshare Services Pvt. Ltd. The Investors are advised to take advantages of timely Dematerialization of their securities. The ISIN allotted to your Company is INE548Z01017.

39.COMPLIANCES OF SECRETARIAL STANDARDS:

The Company has made all the compliance of Secretarial Standards as notified by the MCA.

40. ACKNOWLEDGEMENT:

Your Directors would like to express their grateful appreciation for the assistance and Co-operation received from the financial institutions, Government Authorities, Customers, Vendors and Members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Company’s executives, staff and workers.

For LAGNAM SPINTEX LIMITED

D.P. MANGAL

CHAIRMAN

[DIN: 01205208]

Place : Bhilwara

Dated: 23.04.2018