1 Term/Right attached to the Equity share

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

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

Secured

Conditions of Term Loans are summarised below:

Nature of Security

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

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

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

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

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

Terms of Repayment of Secured Borrowing

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

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

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

Conditions of Working Capital Loan are summarised below:

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

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

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

33 Employment Benefit Plans

a. Defined Contribution Plan

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

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

b. Defined Benefit Plan & Other Long Term Benefits

i Gratuity

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

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

ii Leave Encashment

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

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

ⁱⁱⁱ under Ind AS-19

Description of Risk Exposures:

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

As such company is exposed to various risks as follow -

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

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

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

2 Commitments

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

ii Events occurring after the Balance sheet date

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

39 Financial instrumentFair value of financial assets and liabilities

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

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

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

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

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

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

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

40 Financial risk management Objectives and Policies i Capital Management

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

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

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

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

a. Credit Risk

b. Liquidity Risk

c. Market Risk

a. Credit Risk

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

Provision for Expected Credit or Loss

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

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

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

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

b. Liquidity Risk

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

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

c. Market Risk

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

i Interest Rate Risk

It is the risk where changes in market interest rates might adversely affect the Company's financial condition. The short term/immediate impact of changes in interest rates are on the Company's net interest income/expenses. On a longer term, change in interest rate impact the cash flows on the assets, liabilities and off-balance sheet items, giving rise to a risk to the net worth of the Company arising out of all reprising mismatches and other interest rate sensitive positions.

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

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

Detail of financial instrument bearing interest rate risk

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

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

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

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

41 Operating Segments

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

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

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

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

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

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

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

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

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

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

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