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Lagnam Spintex Ltd.

BSE: 535108 Sector: Industrials
NSE: LAGNAM ISIN Code: INE548Z01017
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Lagnam Spintex Ltd. (LAGNAM) - Director Report

Company director report

Dear Members

The Directors have pleasure in presenting the 11th Annual Report on businessand operations of your company along with the Audited Financial Statements for the yearended 31st March 2021:

1. FINANCIAL RESULTS

The Financial Results of the Company's performance for the year under review and thoseof the previous year are as follows-

Particulars Year Ended 31 March 2021 Year Ended 31 March 2020
Turnover:
a) Domestic 10123.88 11291.32
b) Export 10416.87 6353.13
Total 20540.75 17644.45
Profit before Finance 2616.35 1584.52
Cost Depreciation & Tax
Less: Financial expenses 1164.43 930.60
(Net)
Profit before 1451.92 653.92
Depreciation & Tax
Less: Depreciation 751.87 593.77
Profit before Tax 700.05 60.15
Less: Current Tax
(Net) 116.85 2.16
MAT Credit Entitlement (116.85) (2.16)
Deferred Tax 247.42 (52.15)
Profit after Tax 452.63 112.30
Add: Opening Balance 1989.15 1876.85
Profit available for 2441.78 1989.15
appropriation

2. OPERATIONAL PERFORMANCE:

REVENUE FROM OPERATIONS:

Your Directors are pleased to inform that despite the outbreak of Covid-19 which hadsignificant impact on the operations of the company during the year under review yourCompany has recorded highest revenue of ' 20540.75 Lacs from operations in current yearagainst ' 17644.45 Lacs in the previous year an increase of 16.41%. The exports of theCompany has seen significant increase from ' 6353.13 Lacs in the previous year to '10416.87 in the current year a jump of 63.96%. Exports constitute 50.71% of the totalrevenue.

First half of the year was a turbulent period for the whole world due to the COVID-19and your company was also adversely affected by the pandemic. Finance cost for the currentyear has increased to ' 1164.43 lacs as against ' 930.60 Lacs in the previous year anddepreciation to ' 751.87 Lacs in the current year as against ' 593.77 Lacs in the previousyear mainly due to full utilization of expanded capacity. Lower capacity utilizationduring the first few month of the beginning of the year impacted the revenue andprofitability adversely.

PROFITABILITY:

Despite adverse circumstances due to COVID-19 in the first half of the year theoperating profit (EBIDTA) of the Company has increased from Rs.1584.52 Lacs in theprevious year to Rs. 2616.35 Lacs in the current year an increase of about 65.12%. TheCash Profit (PBDT) for the current year was Rs.1451.92 Lacs against Rs.653.92 Lacs in theprevious year an increase of 122.03%. The profit after tax (PAT) of the Company hasincreased to Rs.452.63 Lacs for the current year as against ' 112.30 Lacs in the previousyear a substantial increase of 303.05%. The sales realization and margin improved duringthe second half of the current year due to good demand in domestic & export markets.The Company has reported Earnings per Share of ' 2.56/- during the current year against '0.64/- in the previous year.

SPECIAL RECOGNITION:

Your Directors are pleased to report that due to consistency in quality and service toour customers the exports have shown an impressive growth year over year and your companywas awarded with the Certificate of "Best Achievement for Highest Growth inExports" by the State Government of Rajasthan for the year 2019-20.

3. DIVIDEND:

Your Directors are pleased to recommend Dividend of 5% i.e. ' 0.50 per Equity Shares onthe fully paid up Equity Shares of ' 10/- each for the financial year 2020-21 subject toapproval of shareholders at the ensuing Annual General Meeting. (previous year NIL)

4. TRANSFER TO RESERVES:

During the year under review the company has not transferred any amount to the generalreserves.

5. IMPACT OF COVID-19 PANDEMIC:

The outbreak of COVID-19 has resulted in a lockdown in many countries including inIndia which had significantly impacted the operation and profitability of the company. Themanufacturing plants & offices of the company were completely shut down from 22ndMarch 2020 to 25th April 2020. The operations had partially startedw.e.f. 26th April 2020 and gradually increased to full capacity utilization bythe end of second quarter of 2020-21. COVID- 19 affected capacity utilization badly duringthe first half of the year 2020-21.

6. CAPITAL STRUCTURE:

The Capital Structure of the Company as on 31st March 2021 are as follows:-

The Authorized Share Capital of the Company is ' 225000000 (Rupees Twenty-Two CroreFifty Lakh) divided into 22500000 (Two Crore Twenty-Five Lakh) Equity Shares of ' 10/-each.

The Issued subscribed and Paid up Share Capital of the Company is Rs.176690000(Rupees Seventeen Crore Sixty-Six Lakh Ninety Thousand) divided into 17669000 (OneCrore Seventy-Six Lakh Sixty-Nine Thousand) Equity Shares of Rs.10/- each.

During the year under review the Company has not issued any shares. The Company has notissued any shares with differential voting rights or sweat equity or granted stockoptions.

7. ANNUAL RETURN:

Kindly take note that the Annual Return is available on the Website of the Companyafter conclusion of the AGM in below link: (Link: https://www.lagnamspintex.com/annualreturn)

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

There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of the report.

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

During the year under review there has been no such significant and material orderspassed by the regulators or courts or tribunals impacting the going concern status andcompany's operations in future.

10. CORPORATE SOCIAL RESPONSIBILITY:

In pursuant to Section 135 of the Companies Act 2013 read with rules framed thereunder a CSR Policy to ensure Social Responsibilities has been adopted. The CSR Policy hasbeen uploaded on the website of the Company at following link: (Link:https://www.lagnamspintex.com/policies)

In view of the profits and turnover of the company your Company was required toundertake CSR projects during the year 2020-21 under the provisions of section 135 of theCompanies Act 2013 and the rules made their under. As part of its initiatives under"Corporate Social Responsibility (CSR)" the Company has undertaken variousactivities which are in accordance with CSR Policy of the Company and Schedule VII of theCompanies Act 2013. The Annual Report on CSR activities is annexed herewith as"Annexure I".

AUDITORS

11. STATUTORY AUDITOR & AUDIT REPORT:

M/s SSMS & Associates Chartered Accountants Bhilwara (Firm Registration No.019351C) were appointed as Statutory Auditors at the 9th Annual GeneralMeeting held on 9th September 2019 for five years till the conclusion of theAnnual General Meeting to be held in the calendar year 2024. Accordingly they haveconducted Statutory Audit for the F.Y. 2020-21 and shall continue to be Statutory Auditorsfor the F.Y. 2021-22.

As required under Regulation 33(d) of the SEBI (LODR) Regulation 2015 the auditor hasconfirmed that they hold a valid certificate issued by the Peer Review Board of theInstitute of Chartered Accountants of India.

Board is pleased to inform that there is no such observation made by the Auditors intheir report which needs any explanation by the Board.

12. INTERNAL AUDITORS:

Pursuant to Section 138 of the Companies Act 2013 read with the Companies (Accounts)Rules 2014 (as amended) the Board of Directors on the recommendations of the AuditCommittee of the Company has appointed M/s A. L. Chechani & Co. CharteredAccountants Bhilwara [ICAI Firm Registration No.- 005341C] as the Internal Auditors ofthe Company for the financial year 2020-2021 ended 31st March 2021.

The Internal Audit Finding/s and Report/s submitted by the said Internal Auditorsduring the financial year to the Audit Committee and Board of Directors of the Companydo not contain any adverse remarks and qualifications hence do not call for any furtherexplanation/s by the Company.

13. SECRETARIAL AUDITORS:

The Board of Directors on the recommendations of the Audit Committee of the Companyhas appointed M/s Sanjay Somani & AssociatesCompany Secretaries Bhilwara [ICSIMembership No. FCS- 6958 & Certificate of Practice No. 5270] as the SecretarialAuditors of the Company for the financial year 2020-2021.

The Secretarial Audit Report in Form No. MR-3 submitted by the said SecretarialAuditors do not contain any adverse remarks and qualifications hence do not call for anyfurther explanation/s by the Company. The Secretarial Audit Report in Form No. MR-3submitted by the said Secretarial Auditors for the financial year 2020-2021 forms part ofthe Annual Report as "Annexure II" to the Board's report.

14. COST AUDITORS:

As per the requirement of the Central Government and pursuant to section 148 of theCompanies Act

2013 read with Companies (Cost Records and Audit) Rules 2014 as amended from time totime your directors have appointed M/s N. D. Birla & Co. Cost Accountants (FRN:000028) being eligible to conduct Cost Audit of the Company for the financial year2020-21.

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

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as "AnnexureIII".

16. RECOGNITION & CERTIFICATIONS:

Company has following certifications:

• USTERIZED CERTIFICATE

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

• BCI Certificate

• GOTS Certificate

• Oeko-Tex Standard 100 Certificate

• ISO 9001:2015 Certificate

• One Star Export House Certificate

17. SUBSIDIARY ASSOCIATES AND JOINT VENTURE COMPANY:

The Company does not have any subsidiary associate or joint venture during thefinancial year 2020-21 as well as at the beginning or closing of the financial yeartherefore the financial statement is prepared on standalone basis and the requirement fordisclosure in the Form AOC-1 is not applicable. Further that the Company is an associateof Lagnam Infotech Solutions Private Limited which is holding 4994000 equity sharesrepresenting 28.26% of total paid up equity share capital of the Company as on 31stMarch 2021.

18. BOARD OF DIRECTORS THEIR MEETINGS & KMP(s):

I. Constitution of the Board

The Board of directors are comprising of total 7 (Seven) Directors which includes 4(Four) Independent Directors including 1 (One) Women director. The Chairman of the Boardis Promoter and Whole-Time Director. The Board members are highly qualified with thevaried experience in the relevant field of the business activities of the Company whichplays significant roles for the business policy and decision-making process and provideguidance to the executive management to discharge their functions effectively.

II. Board Independence

Our definition of 'Independence' of Directors is derived from Regulation 16 of SEBI(LODR) Regulations 2015 and Section 149(6) of the Companies Act 2013. The Company ishaving following independent directors:

(i) Jagdish Chandra Laddha

(ii) Vijay Singh Bapna

(iii) Anil Shah

(iv) Dipali Mathur

As per provisions of the Companies Act 2013 Independent Directors were appointed fora term of 5 (five) consecutive years and shall not be liable to retire by rotation.

III. Declaration by the Independent Directors

All the Independent Directors have given their declaration of Independence stating thatthey meet the criteria of independence as prescribed under section 149(6) of the CompaniesAct 2013.Further that the Board is of the opinion that all the independent directorsfulfill the criteria as laid down under the Companies Act 2013 and the SEBI (LODR)Regulations 2015 during the year 2020-21.

IV. Directors liable to retire by rotation

In accordance with the provisions of the Companies Act 2013 and in terms of theArticles of Association of the Company Mr. Shubh Mangal (DIN: 01287935) WholeTimeDirector of the Company is liable to retire by rotation at the ensuing Annual General

Meeting and being eligible offers himself for reappointment.

V. Changes in Directors and Key Managerial Personnel

There were some changes in the composition of Directors and Key Managerial Personnelduring the Financial Year 2020-21 as under:

Mr. D. P. Mangal (DIN: 01205208) re-appointed as Whole Time Director of the Companyand designated as "Executive Chairman" of the Company at the meeting of theBoard of Directors held on 18.01.2021; subject to the approval of shareholders at theensuing meeting of the members.

Following are the Directors and KMP(s) in the Company:

S. No. Name of Directors/ KMP(s) Nature of Directorship
1. Dwarka Prasad Mangal (DIN: 01205208) Chairman cum Whole Time Director
2. Anand Mangal (DIN: 03113542) Managing Director
3. Shubh Mangal (DIN: 01287935) Whole Time Director
4. Vijay Singh Bapna (DIN: 02599024) Independent Director
5. Jagdish Chandra Laddha (DIN: 00118527) Independent Director
6. Anil Shah (DIN: 00145396) Independent Director
7. Dipali Mathur (DIN: 07732611) Independent Director
8. Devi Lal Mundra (PAN: AKUPM7207P) Chief Financial Officer
9. Rajeev Parashar (PAN: BLSPP2313P) Company Secretary & Compliance Officer

VI. Meetings and Attendance of the Board

The Board meets at regular intervals to discuss and decide on company/business policyand strategy apart from other Board business. The notice of Board meeting is given well inadvance to all the Directors. The Agenda of the Board meeting is circulated at least aweek prior to the date of the meeting. The Agenda for the Board and Committee meetingsincludes detailed notes on the items to be discussed at the meeting to enable theDirectors to take an informed decision.

The Board met 7 (Seven) times in the Financial Year 2020-21 viz. 04th June202019th June 2020 26th September 2020 6th November2020 29th December 2020 12th January 2021 and 18thJanuary 2021. The maximum interval between any two meetings did not exceed 120 days.Attendance of each director in board meeting as follows:

Name of the Directors
Date of Meeting D. P. Mangal Anand Mangal Shubh Mangal Vijay Singh Bapna Jagdish Chandra Laddha Anil Shah Dipali Mathur
04.06.2020 Yes Yes Yes Yes Yes Yes Yes
19.06.2020 Yes Yes Yes Yes Yes Yes Yes
26.09.2020 Yes Yes Yes Yes Yes Yes Yes
06.11.2020 Yes Yes Yes Yes Yes Yes No
29.12.2020 Yes Yes Yes Yes Yes Yes No
12.01.2021 Yes Yes Yes Yes Yes Yes No
18.01.2021 Yes Yes Yes Yes Yes Yes No

VII. Separate Meeting of Independent Directors:

As stipulated by the Code of Independent Directors under the Companies Act 2013 aseparate meeting of the Independent Directors of the Company was held on 12thJanuary 2021 to review the performance of NonIndependent Directors (including theChairman) and the entire Board. The Independent Directors also reviewed the qualitycontent and timeliness of the flow of information between the Management and the Board andits Committees which is necessary to effectively and reasonably perform and dischargetheir duties.

VIII. Company's Policy on Directors' Appointment and Remuneration

The Policy of the Company on Directors' appointment and remuneration including criteriafor determining qualifications positive attributes independence of a Director and othermatters provided under section 178(3) uploaded on company's website. (Link:https://www.lagnamspintex.com/ policies)

IX. Annual Evaluation by the Board:

Pursuant to the provisions of the Companies Act 2013 and Regulation 17 (10) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Nomination andRemuneration Committee has laid down the criteria for evaluation of the performance ofindividual Directors and the Board as a whole. Based on the criteria the exercise ofevaluation was carried out through a structured process covering various aspects of theBoard functioning such as composition of the Board and committees experience &expertise performance of specific duties & obligations attendance contribution atmeetings & Strategic perspectives or inputs regarding future growth of company etc.The performance evaluation of the Chairman and the Non-Independent Directors was carriedout by the Independent Director. The performance of the Independent Directors was carriedout by the entire Board (excluding the Director being evaluated). The Directors expressedtheir satisfaction with the evaluation process.

19. CORPORATE GOVERNANCE:

The Company being listed on the EMERGE Platform of National Stock Exchange of IndiaLimited therefore pursuant to Regulation 15(2)(b) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 Regulation 27 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and Part C of Schedule V relating to complianceof Corporate Governance shall not applicable to the Company. Further The Company need notrequire complying with requirements as specified in Part E of Schedule II pursuant toRegulation 27(1) SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015and submitting Compliance Report on Corporate Governance on quarterly basis pursuant toRegulation 27(2) SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.Hence

no Corporate Governance Report is required to be disclosed with Annual Report. It ispertinent to mention that the Company follows majority of the provisions of the corporategovernance voluntarily as a part of Good Corporate Governance.

20. RELATED PARTY TRANSACTIONS:

All related party transactions that were entered during the financial year were on thearm's length basis and were in the ordinary course of business and do not attract theprovisions of section 188 of the Companies Act 2013. Thus disclosure in form AOC-2 isnot required. All Related Party Transactions were placed before the Audit Committee forapproval. A policy on the related party transactions was framed & approved by theBoard and posted on the Company's website at below link:

(Link: https://www.lagnamspintex.com/policies)

However you may refer to Related Party Transactions as per the Accounting Standardsin the Notes forming part of financial statements.

21. INVESTORS EDUCATION AND PROTECTION FUND

During the financial year 2020-2021 ended 31st March 2021 under reviewthere were no amount/s which is required to be transferred to the Investor Education andProtection Fund by the Company. As such no specific details are required to be given orprovided.

22. 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 atWorkplace (Prevention Prohibition and Redressal) Act 2013 has been notified on 9thDecember 2013. The Company has zero tolerance for sexual harassment at workplace in linewith provisions of the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 and rules there under for prevention and redressal of complaintsof sexual harassment at workplace.

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

23. RISK MANAGEMENT:

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

The Board of Directors of the Company and the Audit Committee shall periodically reviewand evaluate the risk management system of the Company so that the management controls therisks through properly defined network. Head of Departments shall be responsible forimplementation of the risk management system as may be applicable to their respectiveareas of functioning and report to the Board and Audit Committee.

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

24. COMMITTEES OF THE BOARD: -

The Company has following committees:

I. Audit Committee:

The Company has constituted Audit Committee as per requirement of section 177 of theCompanies Act 2013 and Regulation 18 of the SEBI (LODR) Regulations 2015. The terms ofreference of Audit Committee are broadly in accordance with the provisions of SEBI (LODR)Regulations 2015 and Companies Act 2013. The Audit Committee comprises followingDirectors of the Company:

S. N. Name of Director Nature of Directorship Designation in Committee
1 Jagdish Chandra Laddha Independent Director Chairman
2 Vijay Singh Bapna Independent Director Member
3 Anil Shah Independent Director Member
4 D. P. Mangal Whole-time Director Member

During the financial year 2020-21 the Audit Committee met 4 (four) times on19.06.2020 26.09.2020 06.11.2020 and 12.01.2021.

II. Nomination and Remuneration Committee:

The Company has constituted a Nomination and Remuneration Committee in accordance withsection 178 of the Companies Act 2013 and the SEBI (LODR) Regulations 2015. TheNomination and Remuneration Committee comprises of the following Directors of the Company:

S. N. Name of Director Nature of Directorship Designation in Committee
1 Jagdish Chandra Laddha Independent Director Chairman
2 Anil Shah Independent Director Member
3 Vijay Singh Bapna Independent Director Member

During the financial year 2020-21 the Nomination and Remuneration Committee met 2(Two) times on 19.06.2020 and 18.01.2021.

III. Stakeholders' Relationship Committee:

The Company has constituted a Stakeholders' Relationship Committee in accordance withsection 178 of the Companies Act 2013 and the SEBI (LODR) Regulations 2015. TheCommittee considers and approves various requests regarding annual report and to redresscomplaints of the shareholders. The Stakeholders' Relationship Committee comprisesfollowing Directors of the Company:

S.N. Name of Director Nature of Directorship Designation in Committee
1 Anil Shah Independent Director Chairman
2 Vijay Singh Bapna Independent Director Member
3 Anand Mangal Managing Director Member

During the financial year 2020-21 the Stakeholders' Relationship Committee met on12.01.2021.

IV. Corporate Social Responsibility (CSR) Committee:

The Company has constituted a CSR Committee in accordance with the provisions ofsection 135 of the Companies Act 2013. The CSR Committee comprises the followingDirectors:

S.N. Name of Director Nature of Directorship Designation in Committee
1 Jagdish Chandra Laddha Independent Director Chairman
2 D. P. Mangal Whole-time Director Member
3 Vijay Singh Bapna Independent Director Member

During the financial year 2020-21 the Corporate Social Responsibility Committee met on19.06.2020.

25. PREVENTION OF INSIDER TRADING: -

In view of the SEBI (Prohibition of Insider Trading) Regulation 2015 the Company hasadopted a Code of Conduct for Prevention of Insider Trading with a view to regulatetrading in securities by the Directors and designated employees of the Company. Thedetails of the Insider Trading Policy has posted on the website of the Company atfollowing link: (Link: https://www.lagnamspintex.com/policies)

The Code requires Trading Plan pre-clearance for dealing in the Company's shares andprohibits the purchase or sale of Company shares by the Directors and the designatedemployees while in possession of unpublished price sensitive information in relation tothe Company and during the period when the Trading Window is closed. However there wereno such instances in the Company during the year 2020-21.

26. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

Your Company is committed to highest standards of ethical moral and legal businessconduct. Accordingly the Board of Directors have formulated a Whistle Blower Policy whichis in compliance with the provisions of Section 177 (9) of the Companies Act 2013 and theregulation 22 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations2015

The Company has adopted a Whistle-Blower Policy for Directors and employees to reportgenuine concerns and to provide for adequate safeguards against victimization of personswho may use such mechanism. The details of the Vigil Mechanism Policy have posted on thewebsite of the Company at following link:

(Link: https://www.lagnamspintex.com/policies)

27. MEETINGS OF THE MEMBERS:

During the year under review Annual General Meeting of the Company was held on 26thSeptember 2020 and no any other meeting of the members held during the year.

28. MANAGEMENT DISCUSSION AND ANALYSIS REPORTS:

As per Regulation 34 (e) read with schedule V of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") the management Discussion and Analysis Report of the Company for theyear under review is set out in this Annual Report as "Annexure IV."

29. REGISTRAR AND SHARE TRANSFER AGENT:

The Company has appointed Bigshare Services Private Limited as its Registrar and ShareTransfer Agent. The Corporate Office of Bigshare Services Pvt. Ltd. situated at "1stFloor Bharat Tin Works Building Opp. Vasant Oasis Makwana Road Marol Andheri EastMumbai-400059 Maharashtra.

30. DEMATERIALISATION OF SECURITIES:

The Company's Equity Shares are admitted in the system of Dematerialization by both theDepositories namely NSDL and CDSL. As on 31st March 2021 all 17669000 equityshares dematerialized through depositories viz. National Securities Depository Limited andCentral Depository Services (India)

Limited which represents whole 100% of the total issued subscribed and paid-upcapital of the Company as on that date. The ISIN allotted to your Company is INE548Z01017.Status of the securities as on 31st March 2021 hereunder:

CDSL NSDL TOTAL
Shares in Demat 8438000 9231000 17669000
Physical Shares NIL NIL NIL

31. COMPLIANCES OF SECRETARIAL STANDARDS:

The Board of Directors confirms that the Company has duly complied and is incompliance with the applicable Secretarial Standard/s namely Secretarial Standard-1('SS-1') on Meetings of the Board of Directors and Secretarial Standard -2 ('SS-2') onGeneral Meetings during the financial year 20202021 ended 31st March 2021.

32. HUMAN RESOURCES:

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

Your Company continuously invests in attraction retention and development of talent onan ongoing basis. The Company thrust is on the promotion of talent internally through jobrotation and job enlargement.

Your Directors wish to appreciate the unconditional support given by the work forceduring the Covid-19 Pandemic.

33. RATIO OF THE REMUNERATION OF EACH DIRECTOR TO THE MEDIAN EMPLOYEE'S REMUNERATIONAND PARTICULARS OF EMPLOYEES:

Pursuant to provision of section 197 of Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the detailsof employees given in the "Annexure V".

During the year none of the employees received remuneration in excess of Rs. One CroreTwo Lakhs or more per annum or Rs. Eight Lakhs Fifty Thousand per month for the part ofthe year in accordance with the provisions of Section 197 of the Companies Act 2013 readwith Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.Therefore there is no information to disclose in terms of the provisions of the CompaniesAct 2013.

34. CHANGE IN THE NATURE OF BUSINESS:

During the year under review there is no change in the nature of the business andcommercial activities of the company.

35. INDUSTRIAL RELATIONS:

During the year under review your Company enjoyed cordial relationship with workers andemployees at all levels.

36. CODE OF CONDUCT:

Regulation 17(5) of the SEBI (LODR) Regulations 2015 requires listed companies to laydown a Code of Conduct for its directors and senior management incorporating duties ofdirectors as laid down in the Companies Act 2013. The Company has adopted a Code ofConduct for all Directors and Senior Management of the Company and same is hosted on thewebsite of the company at following link:

(Link-https://www.lagnamspintex.com/policies)

37. DEPOSITS:

During the financial year 2020-2021 ended 31st March 2021 under review theCompany has neither invited nor accepted any public deposits within the meaning of Section73 and 74 of the Companies Act 2013 read with the Companies (Acceptance of Deposits)Rules 2014 (as amended).

As such no specific details prescribed in Rule 8(1) of the Companies (Accounts) Rules2014 (as amended) are required to be given or provided.

38. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013:

During the financial year 2020-2021 ended 31st March 2021 under review theCompany has neither granted loan/s (secured or unsecured) provided guarantees orsecurities in connection with any loan/ s availed by others nor made any investmentspursuant to the provisions of Section 186 the Companies Act 2013 read with the Companies(Meetings of Board and its Powers) Rules 2014 (as amended). As such no specific detailsare required to be given or provided.

39. INTERNAL CONTROL SYSTEMS:

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

• Timely and accurate financial reporting in accordance with applicable accountingstandards.

• Optimum utilization efficient monitoring timely maintenance and safety of itsassets.

• Compliance with applicable laws regulations and management policies.

40. INTERNAL FINANCIAL CONTROL FOR FINANCIAL STATEMENTS

The Company has adequate system of internal controls commensuration with the size ofits operation and business to ensure that all assets are safeguarded and protectedagainst loss from unauthorized use or disposition and to ensure that all the businesstransactions are authorized recorded and reported correctly and adequately.

The Company has appointed Internal Auditors and the scope and authority of the InternalAudit (IA) function is defined in the procedure and appointment letter. To maintain itsobjectivity and independence the Internal Audit function reports to the Chairman of theAudit Committee of the Board. Based on the report of internal audit and process thecompany undertakes corrective action in their respective areas and thereby strengthens thecontrols. Significant audit observations and corrective actions thereon if any arepresented to the Audit Committee of the Board.

The Company works in a dynamic business environment and adopts the appropriate internalfinancial controls to establish reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with the generally acceptedaccounting principles. It includes inducting and maintaining such business policies andprocedures as may be required to successfully conduct the business of the company andmaintain such records as to correctly record the business transaction assets andliabilities of the company in such a way that they help in prevention & detection offrauds & errors and timely completion of the financial statements.

41. DISCLOSURE FOR FRAUD AGAINST THE COMPANY:

In terms of provision of section 134(3) (CA) of the Companies Act 2013 There were noinstances of fraud which are reported by Auditors of the Company under section 143(12) ofthe Companies Act 2013 to the Audit Committee.

42. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE IBC 2016:

During the year under review no application was made further no any proceeding pendingunder the Insolvency and Bankruptcy Code 2016 (31 of 2016) against the company.

43. DIFFERENCE IN VALUATION:

During the year under review there was no case of one time settlement with financialinstitution so the details of difference between amount of the valuation done at the timeof one time settlement and the valuation done while taking loan from the Banks orFinancial Institutions are not applicable to the company.

44. DIRECTORS' RESPONSIBILITY STATEMENT:

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

(i) In the preparation of the annual accounts for the financial year ended 31stMarch 2021 the applicable accounting standards had been followed along with properexplanation relating to material departures;

(ii) The directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company as at 31st March 2021 and ofthe profit and loss of the company for that period;

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

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

(v) The Directors had laid down Internal Financial Controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and

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

45. ACKNOWLEDGEMENT:

The Company is grateful to its customers shareholders suppliers financialinstitutions bankers Central and State Governments for their constant support to theCompany. The Directors also place on record their deep appreciation of the contributionmade by employees at all levels the consistent growth of the Company was made possible bytheir hard work loyalty dedication coordination and support.

For and on Behalf of the Board of Directors
Place : Bhilwara D.P. MANGAL
Date : 15th April 2021 Chairman
[DIN: 01205208]

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