Premises given on operating lease:

The company has given investment properities on operating lease. These Lease arrangements range for a period between 11 months and 6 years old and include both cancellable and non-cancellable leases. Most of the leases are renewable for further period on mutually agreeable terms.

The fair valuation is based on current prices in the active market for similar properties. The main inputs used are quantum, area, location, demand; restrictive entry to the complex, age of building and trend of fair market rent in and around where investment property is located.

This valuation is based on valuation performed by an approved independent valuer. Fair valuation is based on replacement cost method. The fair value Measurement is categorised in level 2 fair value hierachy.

a) During the year ended 31st March 2018 the company has increased its Authroised Capital from Rs, 5,00,00,000 to Rs. 10,00,00,000.

b) During the year ended 31st March 2018 the company has allotted 5,00,000 number of Equity shares at Rs. 80 Per share (Consisting of Rs 5 on Capital and Rs. 75 on premium) under Preferential mode to Strike Right Intergrated Servcies Limited (Member of Promoter Group), due to this preferential issue the Paid up Capital of the Company increased from Rs 4,53,88,000 to 4,78,88,000.

d) Rights, preferences and restricition attached to shares

Equity shares: The Company has one class of equity shares having a par value of Rs.5 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the 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 shareholding.

Securities premium reserve

Securities premium reserve is used to record the premium on issue of share. These reserve is utilised in accordance with the provision of the Act.

1.1 FCNRB Term loan - I from State Bank of India is secured by First charge on entire assets created out of the term loan. Total outstanding as on 31.03.2018 is Rs. 627.70 lakhs as on 31.03.2017 is Rs. 676.26 lakhs and as on 1st April 2016 is Rs. 877.80 lakhs. Term Loan - I is payable in 36 installments commencing from November 2016. Last installment is due in October 2019.

1.2 Term loan - II from State Bank of India is secured by first charge on entire assets created out of the term loan. Total outstanding as on 31.03.2018 is Rs. 324.18 lakhs as on 31.03.2017 is Rs. 470.43 lakhs as on 1st April 2016 is Rs. 605.43 lakhs. Term Loan - II is payable in 84 installments commencing from October 2013. Last installment is due in September 2020.

1.3 FCNRB Term loan III from State Bank of India is secured by first charge on entire assets created out of the term loan. Total outstanding as on 31.03.2018 is Rs. 1149.69 lakhs as on 31.03.2017 is Rs. 1018. 90 lakhs as on 1st April 2016 is Rs. 1049.94 lakhs. Term Loan - III is payable in 31 installments commencing from April 2017. Last installment is due in October 2019.

1.4 FCNRB Term Loan - I from Bank of India is secured by First charge on Windmill and Windmill Land. Total outstanding as on 31.03.2018 is Rs. 345.79 lakhs as on 31.03.2017 is Rs. 365.07 lakhs and as on 1st April 2016 is Rs. 455.46 lakhs. Term Loan is payable in 108 installments commencing from March 2013. Last installment is due in Feb 2022.

1.5 Term loan - II from Bank of India is secured by first charge on entire assets created out of the term loan. Total outstanding as on 31.03.2018 is Rs. 163.53 lakhs as on 31.03.2017 is Rs. 172.65 lakhs as on 1st April 2016 is Rs. 215.53 lakhs. Term Loan - II is payable in 84 monthly installments commencing from April 2015. Last installment is due in Mar 2022.

1.6 Term loan - III from Bank of India is secured by Residential apartment purchased out of term loan. Total outstanding as on 31.03.2018 is Rs. 56.78 lakhs as on 31.03.2017 is Rs. 62.48 lakhs and as on 1st April 2016 is Rs. 67.30 lakhs. Term Loan - III is payable in 137 installments commencing from April 2014. Last installment is due in Aug 2025.

1.7 Term loan - IV from Bank of India is secured first charge on entire assets created out of term loan. Total outstanding as on 31.03.2018 is Rs. 280.62 lakhs, as on 31.03.2017 is Rs. 298.67 lakhs as on 1st April 2016 is Rs. 374.71 lakhs. Term Loan - IV is payable in 72 installments commencing from January 2016. Last installment is due in Dec 2022.

1.8. Two directors have given personal guarantee and one of them had given personal assets as security for the term loans and working capital loans from State Bank of India and no Guarantee commission has been paid to any directors in this connection.

Three directors have given personal guarantee and one of them had given personal assets as security for the term loans and working capital loans from Bank of India and no Guarantee Commission has been paid to any directors in this connection.

Details of pledge of shares held by directors for availing loan facilities for the company:

The Managing Director has pledged 11.24 lakh shares of the company held by him as collateral security for the loan sanctioned by State Bank of India and 10.5 lakh shares of the company held by him as collateral security for the loan sanctioned by Bank of India.

Strikeright Intergrated Services Limited has given Corporate Guarantee for State Bank of India Loan and no Guarantee Commission has been paid.

One of the director has given personal guarantee for the Residential property loan from Bank of India and no Guarantee Commission has been paid to the director in this connection.

1.9. Installments falling due in respect of all the above Loans upto 31.03.2018 have been grouped under “Current maturities of long-term debt” (Refer Note 23 (a))

1.10 The carrying amounts of financial and non financial assets as securtity for secured borrowings are disclosed in Note 38

1. Working capital facilities from State Bank of India is secured by paripassu charge on entire current assets such as raw materials, WIP, finished goods, consumables, spares, stores and receivables and other current assets of the company on paripassu basis with other working capital lenders.

2. Bank of India has sanctioned working capital facilites against paripassu charge on the Inventories and book debts.

3. State Bank of India has sanctioned buyers credit against machinery which is repayable with in one year from the date of sanction.

There are no Micro and Small Enterprises, to who the company owes dues, which are outstanding for more than 45 days as at 31st March 2018. This information as required to be disclosed under the MSMED Act 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

NOTE :-2 - STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

I. Background

Lambodhara Textiles Limited incorporated in India in the year 1994 and is a leading premium quality synthetic fancy yarn manufacturing Company. The Company has its wide network of operations in local as well foreign market.

Note 3 - COMMITMENTS Capital Commitments

Estimated value of contract remaining to be executed on Capital account is Rs36.18 lakhs (Previous year Rs. Nil)

Note :- 4 - POST RETIREMENT BENEFIT PLANS

Defined Benefits Plan

Gratuity

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a unfunded plan.

In accordance with IND As details are given below which is certified by the actuary and relied upon by the auditors and the company has provided the liability in accounts, to meet its liability from internal generation.

Note :- 5 - SEGMENT REPORTING

Operating Segments:

a) Textile

b) Wind Mills

c) Real Estate

Identification of Segments:

The chief operational decision maker monitors the operating results of its Business segment separately for the purpose of making decision about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements, Operating segment have been identified on the basis of nature of products and other quantitative criteria specified in the Ind AS 108. Segment revenue and results:

The expenses and income which are not directly attributable to any business segment are shown as unallocable expenditure (net of allocable income).

Segment assets and Liabilities:

Segment assets include all operating assets used by the operating segment and mainly consist of property, plant and equipments, trade receivables, Inventory and other operating assets. Segment liabilities primarily includes trade payable and other liabilities. Common assets and liabilities which can not be allocated to any of the business segment are shown as unallocable assets / liabilities.

NOTE 6 RELATED PARTY DISCLOSURES FOR THE YEAR ENDED 31ST MARCH 2018.

a) The following loans have been taken during the year from related parties:

b) Remuneration paid to Managing Director, Mr.Santossh.R. is Rs.16.65 lakhs (Previous Year Rs.12.15 lakhs).

c) Remuneration paid to Whole-Time Director, Ms. Bosco Giulia is Rs.11.10 lakhs (Previous Year Rs.8.40 lakhs).

Cash value of perquisites to Whole-Time Director, Ms. Bosco Giulia is Rs.1.58 lakhs (Previous Year Rs.1.31 lakhs)

d) Remuneration paid to Whole-Time Director, Ms.Vimala.R. is Rs.6.00 lakhs (Previous Year Rs.6.00).

e) Interest paid to Director Mr.Baba Chandrasekar is Rs.30.97 lakhs (Previous Year Rs.40.15 lakhs)

f) (i) Polyester and Viscose Fibre purchase from Strikeright Integrated Services Limited during the year for Rs.1,981.45 lakhs (Previous Year Rs.4,183.47 lakhs)

(ii) Cone yarn sales made to StrikerightIntergrated Services Limited during the year for Rs.22.67 Lakhs (Previous Year Rs.Nil)

Strikeright Integrated Services Limited is a Company in which one Whole Time Director and one Key Management Person of Lambodhara Textiles Limited are directors.

g) During the year Rs.7.11 lacs is paid as salary to one Key Management Person Mr.Ramesh Shenoy (CFO) (Previous year Rs.7.11 lakhs)

h) During the year, lease rent on vehicle paid to Whole Time Director, Ms. Bosco Giulia is Rs.2.40 lakhs (Previous Year Rs.1.20 lakhs).

NOTE - 7 FAIR VALUE MEASUREMENTS

Financial Instrument by category and hierarchy

The fair values 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.

The following methods and assumptions were used to estimate the fair values:

1. Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to short term maturities of these instruments.

2. Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for expected losses of these receivables. Accordingly, fair value of such instruments is not materially different from their carrying amounts.

The fair values for loans security deposits were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counter party credit risk.

The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.

For Financial assets and Liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1 : quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2 : other techniques for which all inputs which have a significant effect on the recorded fairvalue are observable, either directly or indirectly.

Level 3 : techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

NOTE : - 8 - FINANCIAL RISK MANAGEMENT Financial risk management objectives and policies

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 policy is set by the Managing Board.

Market risk is the risk of loss of future earnings, fair values or 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 exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and loans and borrowings.

The Company manages market risk through a treasury department, which evaluates and exercises independent control over the entire process of market risk management. The treasury department recommend 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 like foreign exchange forward contracts, borrowing strategies and ensuring compliance with market risk limits and policies.

Market Risk- Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize 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.

The Company’s borrowings are of fixed rate nature only. Hence interest rate risk is not applicable and hence not sensitivity analysis

Market Risk- Foreign currency risk

The Company operates internationally and portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through its sales and services in overseas and purchases from overseas suppliers in various foreign currencies. Foreign currency exchange rate exposure is partly balanced by purchasing of goods, commodities and services in the respective currencies.

Market Risk - Price risk

(a) Exposure & Sensitivity

Price risk do not arise for the company’s exposure to equity securities since the equity held by the company as a member consumer under Electricity group captive consumer which are sold at the same price at which it is purchased as per share purchase and share Holders Agreement. Hence disclosure of sensitivity details is not applicable.

(b) Foreign Currency Risk Sensitivity

A change of 5% in Foreign currency would have following impact on profit before tax

Credit risk

Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses financial reliability of customers and other counter parties, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of financial assets. Individual risk limits are set and periodically reviewed on the basis of such information.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:

i) Actual or expected significant adverse changes in business,

ii) Actual or expected significant changes in the operating results of the counterparty,

iii) Financial or economic conditions that are expected to cause a significant change to the counterparty’s ability to meet its obligations,

iv) Significant increase in credit risk on other financial instruments of the same counterparty,

v) Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or credit enhancements.

Financial assets are written off when there is no reasonable expectations of recovery, such as a debtor failing to engage in a repayment plan with the Company. 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 recognized as income in the statement of profit and loss.

The Company measures the expected credit loss of trade receivables and loan from individual customers based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, loss on collection of receivable is not material hence no additional provision considered.

Trade receivables

Customer credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to customer credit risk management. Trade receivables are non-interest bearing and are generally on 7 days to 180 days credit term. Credit limits are established for all customers based on internal rating criteria. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit. The Company has no concentration of credit risk as the customer base is widely distributed both economically and geographically.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on actual incurred historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 9. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

Liquidity Risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Company’s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows.

(i) Financing arrangements

The Company had access to the following undrawn borrowings facilities at the end of the reporting period

The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice. Subject to the continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time in INR.

NOTE : 9 - CAPITAL RISK MANAGEMENT

(a) Risk Management

The Company aim to manages its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise returns to our shareholders.

The capital structure of the Company is based on management’s judgement of the appropriate balance of key elements in order to meet its strategic and day-to-day needs. We consider the amount of capital in proportion to risk and manage the capital structure in 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 or issue new shares.

The Company’s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditors and market confidence and to sustain future development and growth of its business. The Company will take appropriate steps in order to maintain, or if necessary adjust, its capital structure.

Note :- 10 - EXPORT PROMOTION CAPITAL GOODS (EPCG)

Export Promotion Capital Goods (EPCG) scheme allows import of certain capital goods including spares at concessional duty subject to an export obligation for the duty saved on capital goods imported under EPCG scheme. The duty saved on capital goods imported under EPCG scheme being Government Grant, is accounted as stated in the Accounting policy on Government Grant.

Note - 11. EVENT OCCURING AFTER BALANCE SHEET DATE

The board of directors has recommended Equity dividend of Rs. 1 per share (previous year Rs. 1) for the financial year 2017-18.

Note :- 12 - FIRST-TIME ADOPTION OF Ind AS

These are the Company’s first financial statements prepared in accordance with Ind AS.

The Company has adopted Indian Accounting Standards (Ind AS) notified by the Ministry of Corporate Affairs with effect from 1st April, 2016, with a transition date of 1st April, 2016. Ind AS 101 -First-time Adoption of Indian Accounting Standards requires that all Ind As standards and interpretations that are issued and effective for the first Ind AS financial statements which is for the year ended 31st March, 2017 for the company, be applied retrospectively and consistently for all financial years presented. Consequently, in preparing these Ind AS financial statements, the Company has availed certain exemptions and complied with the mandatory exceptions provided in Ind As 101, as explained below. The resulting difference in the carrying values of the assets and liabilities as at the transition date between the Ind AS and Previous GAAP have been recognised directly in equity (retained earnings or another appropriate category of equity).

Set out below are the Ind AS 101 optional exemptions availed as applicable and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A. Optional Exemptions availed (a) Deemed Cost

The Company has opted paragraph D7 AA and accordingly considered the carrying value of property, plant and equipments as deemed cost as at the transition date.

B. Applicable Mandatory Exceptions

(a) Estimates

An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies).

Ind AS estimates as at 1 April 2016 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 these were not required under previous GAAP:

-Investment in equity instruments carried at FVPL or FVOCI;

-Impairment of financial assets based on expected credit loss model.

(b) Classification and measurement of financial assets

As required under Ind AS 101 the company has assessed the classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

C. Transition to Ind AS - Reconciliations

The following reconciliations provide a quantification of the effect of significant differences arising from the transition from previous GAAP to Ind AS as required under Ind AS 101:

I. Reconciliation of Balance sheet as at April 1, 2016 (Transition Date)

II. A. Reconciliation of Balance sheet as at March 31, 2017

B. Reconciliation of Total Comprehensive Income for the year ended March 31, 2017

III. Reconciliation of Equity as at April 1, 2016 and as at March 31, 2017

IV. Adjustments to Statement of Cash Flows

The presentation requirements under Previous GAAP differs from Ind AS, and hence, Previous GAAP information has been regrouped for ease of reconciliation with Ind AS. The Regrouped Previous GAAP information is derived from the Financial Statements of the Company prepared in accordance with Previous GAAP.

The following explains the material adjustments made while transition from previous accounting standards to IND AS

A Proposed dividend

Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events and accordingly, provision for proposed dividend was recognised as a liability. Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend of Rs. 68.08 Lakhs as at 1st April, 2016 and Rs. 90.78 as at 31st March 2017 included under provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity has been increased by an equivalent amount.

B Remeasurements of post employment benefit obligation

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit and loss. Under the previous GAAP, these remeasurements were forming part of the profit and loss for the year. There is no impact on the total equity as at 31st March, 2017

C Government Grant

Apportionment of Government Grant recognised under Export Promotion Capital Goods (EPCG) scheme and corresponding charge of depreciation on account of grossing-up of Property, Plant & Equipment (Refer Note 48).

D Impact of fair valuation of Financial Assets and Liabilities

Under previous GAAP, the Non current financial assets and liabilities were measured at fair value, if any. All changes in the fair value subsequent to the transition date is recognised in the Statement of profit and loss

E Retained earnings

Retained earnings as at April 1, 2016 has been adjusted consequent to the above Ind AS transition adjustments.

F Other comprehensive income

Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss as 'other comprehensive income’ includes remeasurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP.

The Ind AS adjustments are either non cash adjustments or are regrouping among the cash flows from operating, investing and financing activities. Consequently, Ind AS adoption has no impact on the net cash flow for the year ended 31st March, 2017 as compared with the previous GAAP.

13. During the year, a fraud had happened on the company wherein, funds paid to the supplier was wrongly transferred to unknown person due to hacking of emails from the client and immediate action was taken to recover the same. The amount involved is Rs. 35.97 lakhs with bank of India and necessary police action was undertaken by the company. The claim made with bank of India was included in the claims receivable under other current assets.

14. Previous year’s figures have been regrouped wherever considered necessary.