The Directors have the pleasure in presenting the 27th Annual Report
along with the Audited financial statements of the Company for the
financial year ended on 31st March, 2015:
FINANCIAL RESULTS :
Highlights of financial results (Stand-alone & Consolidated) for the
year were as under:
(Rs. in Crores)
2014-15 2013-14 2014-15 2013-14
months) (9 months)
Sales and other income 601.04 753.75 738.76 880.08
Operating profit before
interest, depreciation and (222.29) (177.3) (221.03) 177.76
Interest and other
financial charges 171.01 196.70 172.46 199.48
Depreciation 110.78 78.47 111.71 79.01
Exceptional Items 430.22 171.68 (424.47) (168.33)
Loss before tax (934.30) (624.15) (929.67) (624.58)
Less: Income Tax
(including deferred tax) - 0.59 0.08
Loss after tax (934.30) (624.15) (930.26) (624.66)
Proposed dividend - - - -
Dividend tax - - - -
Balance carried to
Balance Sheet (934.30) (624.15) (930.26) (624.66)
Performance Highlights - Stand-alone :
Your Directors wish to inform you that during the year 2014-15, Company
faced lot of problems on account of financial stress hence operations
of the units were restricted between 25 to 30% of its installed
During 2014-15, the Company recorded sales and operating income at
Rs.601.04 crores as compared to Rs. 753.76 crores in 2013-14 (9
months). The profit before tax was Rs. (934.30) crores in 2014-15 (12
months) as compared to Rs. (624.15) crores in 2013-14 (9 months). The
profit/loss after tax was Rs. (934.30) crores in 2014-15 (12 months) as
compared to Rs. (624.15) crores in 2013-14(9 months).
Performance Highlights - Consolidated :
During 2014-15, the Company recorded sales and operating income at Rs.
738.76 crores as compared to Rs. 880.08 in 2013- 14 (9 months). The
profit before tax was Rs. (929.67) crores in 2014-15 as compared to Rs.
(624.58) crores in 2013-14 (9 months). The profit/loss after tax was
Rs. (930.26) crores in 2014-15 as compared to Rs. (624.66) in 2013-14
The company is in stringent working capital situation and hence the
company is currently unable to source yarn for its own production.
(Yarn is the prime input both in quantitative & price terms for any
product in the textile sector). Accordingly, during the year, company
has earned a portion of its revenue from jobwork. Jobwork has been done
for world renowned suppliers of denims, sheeting & terry towel who are
inclined to increase their jobwork in the company in view of imported
machinery, state of art infrastructure and superior quality product.
Jobwork has enabled the company to reduce its cash losses & increase
its capacity utilization. The company expects increase in revenue
contribution from jobwork in future adding to the bottom line.
PRESENT STATUS OF CORPORATE DEBT RESTRUCTURING PACKAGE (CDR ) OF M/S
SHRI LAKSHMI COTSYN LTD.:
The CDR package filed by the company was approved by CDR Cell in its
meeting dated 24.06.2013 and LOA dated 28.06.2013 was issued. In
compliance of the LOA, Master Restructuring Agreement (MRA) was signed
As per the terms of Letter of Approval (LOA), the Company has brought
promoters'' contribution to the tune of Rs. 93.90 crore within the
prescribed time of 120 days from signing of Master Restructuring
Agreement (MRA). Besides all other terms of LOA relating to perfection
of security were also complied with by the Company except the
conversion of promoters contribution into equity and pledging thereof
to CFSL This could not be possible due to the Non receipt of approval
of Stock exchange an account of selling of promoters shares by IFCI.
At present, the company is operating through its TRA accounts with
Central Bank for running its day to day operations. The consortium
members banks at their Joint Lenders Meeting (JLM) held on 16th June
2015 have decided to settle the accounts under One Time Settlement
(OTS) and accordingly directed the company to search PE investor.
The company is continuously in dialogue with PE investors and also
appointed NITRA (Northern India Textile Research Association) for TEV
study and Valuation so that the sustainability of debt as well as the
maximum turnover and EBIDTA can be achieved.
In the CDR EG Meeting held on 26th August 2015, Central Bank of India
has submitted its review note and shown willingness for exiting from
CDR. The Company has presented its objection and repercussions on the
Company as well as on the Banks on exiting from CDR.
The CDR EG has asked the opinion from the other Banks on this issue
which shall be discussed at next CDR EG.
PRESENT STATUS OF THE BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION
The Company is registered under the Board for Industrial and Financial
Reconstruction in terms of the provisions of section 15(1) of Sick
Industrial Companies (Special Provisions) Act 1985 vide registration
number 45/2014. The Board at its first date of hearing held on
06.07.2015 directed the banks to file their objections within 4 weeks
time. The next date of hearing has been fixed on 01.10.2015. The
Company is taking necessary steps to ensure the necessary compliances
with the requirements of the statute.
WINDING UP PETITION AGAINST M/S SHRI LAKSHMI COTSYN LTD.:
Few cases of Winding up filed by the following parties with the
Allahabad High Court are stayed due to registration of the company with
1- Ketan Kantilal Shah (FCCB Bond Holder) amount Rs. 2.8 million.
2- Satya Ram Agro Industries Vs. SLCL amount Rs. 16.91 lacs.
3- Satya Ram Agro Industries Vs. SLDSL amount Rs. 3.57 lacs.
4- Ambika Corporation amount Rs. 1.42 crore.
5- Soil & Environment Industries Pvt. Ltd. Rs. 9.34 lacs
PETITION BEFORE DEBT RECOVERY TRIBUNAL (DRT) BY IFCI AGAINST M/S SHRI
LAKSHMI COTSYN LTD.: Following parties have filed the case against the
Company before DRT Allahabad & New Delhi:
1- IFCI Ltd. Recovery Suit for an amount of Rs. 9.91crore at DRT, New
2- UCO Bank has also filed recovery suit at DRT Allahabad.
Despite all adverse situations, the Company recorded an export of Rs
218.82 crores in 2014-15 as against Rs. 220.63 crores in 2013-14 (9
Months) on Stand-alone basis.
On Consolidated basis, the Company recorded an export of Rs 219.64
crores in 2014-15 as against Rs. 220.63 crores in 2013- 14 (9 Months).
The company is registered with the following organisations:
1. Director General of Quality Assurance (DGQA)
2. Director General of Suppliers & Disposals (DGS&D)
3. Ordnance Board Group of Factories.
5. Trade Mark Agency having brand names STAR TRACK, DYFI, HEBE
6. Office of the Textile Commissioner as a Composite Mill.
7. Bureau of Indian Standards (BIS)
8. Department of Industrial Development, Ministry of Industry.
Company is duly registered with Export Promotional Council and Posses
valid Import Export code and RCMC issued by Federation of Indian Export
Further based upon past performance of exports, Company is also
registered with Ministry of Commerce and Industry as STAR EXPORT HOUSE.
WHOLLY-OWNED SUBSIDIARY COMPANIES:
The Company has three subsidiary companies, details of which are as
M/s SLCL Overseas FZC, Sharjah U.A.E
The Company is a 100% subsidiary of SLCL, which has been set up at
Sharjah Airport International Free Zone, Sharjah, and UAE. It is
engaged in trading of 100% Polyester fabric material, garments and
alike products and also exporting to other countries, besides trading
in Sharjah itself.
M/S SLCL Overseas FZC, Sharjah U.A.E., a wholly-owned subsidiary,
recorded a turnover of Rs. 124.53 Crores in 2014-15 as compared with
Rs. 104.33 Crores in the last year. During the year, the Company has
earned a profit of Rs. 3.12 Crores in comparison with Rs. 2.31 Crores
in the previous year.
M/s Shri Lakshmi Defence Solutions Ltd.
SLDSL manufactures bullet proof jacket, bullet proof helmet, armored
vehicles, bullet proof morchas and other ballistic products for defense
and homeland security. The company was incorporated on 19.12.2006 and
has started functioning recently. The Company has introduced a new
range of indigenously designed models based on advance armouring
technology for armed and police forces namely Dhruv, Drona and Viper.
These Vehicles are equipped to help the security forces to encounter
ever increasing security threats from naxalities groups and other
During 2014-15, the Company recorded sales of Rs. 11.73 Crores as
compared with Rs. 21.63 Crores in 2013-14 (9 months), thus registered a
decline in sales. The Company has incurred net loss of Rs. 4.82 crores
in 2014-15 as compared to a net loss of Rs.1.49 crores in 2013-14 (9
Registered supplier for defence products
Approved Supplier Registered with
Indian Army, Navy, Air Force,
Ordinance Factories Directorate General of Supplies & Disposal
All central paramilitary
State Police forces Director General of Quality Assurance
Indian Railways Forces Ministry of Defence (Navy)
Defence Material Stores R&D Est
Federation of Indian Export Organization
RDSO (Indian Railways)
Indian Postal Department
M/s Synergy Global Home Inc.
M/s Synergy Global Home Inc., is a wholly-owned subsidiary and was
incorporated at U.S.A.; which deals in trading of home furnishing
During the year, M/s Synergy Global Home Inc., U.S.A has achieved nil
revenue as compared with Rs. 0.42 Crores in 2013-14 (9 months).
However, the company, suffered a loss of Rs. 0.01 lakhs in 2014-15 as
compared with a previous year''s loss of Rs. 8.54 Lacs.
EXEMPTION UNDER SECTION 129 OF THE COMPANIES ACT, 2013 FOR NOT
ATTACHING THE BALANCE SHEET OF THE SUBSIDIARY COMPANIES:
In view of the directions issued by the Ministry vide General Circular
No: 2 /2011, dated 08.02.2011 in regard to exemption under Section 129
of the Companies Act, 2013 for not attaching the balance sheet of the
subsidiary concerned; therefore, Board of Directors of your Company
have given their consent for not attaching the balance sheet of the
The Annual Accounts of the subsidiary companies shall also be kept for
inspection by any shareholders in the head office of the holding
company and of the subsidiary companies concerned. The Company shall
furnish a hard copy of details of accounts of subsidiaries to any
shareholder on demand.
STATUS OF ONGOING EXPANSION OF M/S SHRI LAKSHMI COTSYN LTD.:
Due to part disbursement of the priority loan amounting Rs. 34 crores
(approx.) out of Rs. 65.40 crores, the projects namely Technical
Textiles, Spinning and Yarn Dyed Shirting''s projects could not be fully
Changes in Directors and Key Managerial Personnel
During the period, Mr. Dileep Bajaj and Mr. R.K. Garg have resigned
from the Directorship of the Company w.e.f. 14.08.2014. The Board
places on record their appreciation of the valuable advice and guidance
given by them while they were Directors of the Company.
Pursuant to the provisions of Section 149 (10) of Companies Act 2013,
an independent director shall hold office for a term up to five
consecutive years on the Board of a Company, but shall be eligible for
reappointment for next five years on passing of a special resolution by
the Company .
Therefore Shri G.N. Mathur, independent director of the company who has
completed the term of consecutive 5 years, is proposed to be
re-appointed as an independent director for a further term of five
consecutive years subject to the approval of the Shareholders by way of
Declaration by an Independent Director (s) & re- appointment, if any
A declaration by an Independent Director(s) that he/ they meet the
criteria of independence as provided in sub-section (6) of Section 149
of the Companies Act, 2013 has been obtained.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
A calendar of Meetings is prepared and circulated in advance to the
During the year five Board Meetings and three Audit Committee Meetings
were convened and held, the details of which are given in the Corporate
Governance Report. However, the intervening gap between the Meetings
was within the period prescribed under the Companies Act, 2013.
The composition of an Audit Committee and details of meeting are stated
in the Corporate Governance Report
Details of establishment of vigil mechanism for directors and employees
The vigil mechanism for directors and employees to report genuine
concerns has been established as per the provisions of Section 177(9)
read with Rule 7 of the Companies (Meeting of Board and its Powers)
Rules, 2014 for directors and employees to report their genuine
concerns or grievances.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
Details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Companies Act, 2013 are given in the
notes to the Financial Statements.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the
financial year were on an arm''s length basis and were in the ordinary
course of business. There are no materially significant related party
transactions made by the Company with Promoters, Directors, Key
Managerial Personnel or other designated persons which may have a
potential conflict with the interest of the Company at large.
All Related Party Transactions are placed before the Audit Committee as
also the Board for approval. Prior omnibus approval of the Audit
Committee is obtained on a quarterly basis for the transactions which
are of a foreseen and repetitive nature. None of the Directors has any
pecuniary relationships or transactions vis-a-vis the Company.
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has carried out an annual performance
evaluation of its own performance, the directors individually as well
as the evaluation of the working of its Finance, Audit Grievance,
Nomination & Remuneration and Compliance Committees etc.. The
Management evaluates the performance of committees and its functioning
at regular intervals.
REMUNERATION & NOMINATION POLICY
The Board has framed a policy which lays down the framework in relation
to selection and appointment of Directors, Senior Management of the
Company and in relation to their remuneration.
RISK MANAGEMENT POLICY
A statement indicating development and implementation of a risk
management policy for the Company are set out in the corporate
governance report forming part of the Board report.
During the Financial Year 2014-15, the Company has not issued any
equity shares, so there has been no change in share capital.
Since the Company and its subsidiaries have incurred the loss, your
Directors, have not recommended any dividend for the year ended on 31st
M/s Pradeep & Associates, Chartered Accountants, Auditors of the
Company, retire at the conclusion of the ensuing Annual General Meeting
and, being eligible, offer themselves for reappointment. The
observations of Auditors in their report read with notes to the
accounts are self-explanatory and do not call for further explanation.
The Central Government''s Cost Auditor order specifies an audit of cost
accounting records of the textile Company every year. This is
applicable to the products manufactured by the Company. The Board of
Directors, subject to the approval of the Central Government, appointed
Mr. A.K. Srivastava, Cost Accountants, Kanpur, to carry out cost audit
for the current year.
The Company appointed a firm of Chartered Accountants M/s Srivastava S
and Company of Kanpur as internal auditors to review the internal
control systems of the Company and report thereon. The Report of the
Internal Auditors is reviewed by the Audit Committee.
With an increasing concern towards ecology and global warming,
consumers are favoring organic and eco-friendly textile products.
Therefore, the demand of organic cotton is accelerating with brands and
retailers continuing to implement long-term commitment to increase
their use of organic cotton. Your Company also continues to pursue its
mission for environmental excellence and constantly explores
opportunities to improve ecology and the environment.
RESEARCH AND DEVELOPMENT
The company posses in-house R&D facilities which results in cost
saving. The continuous R&D efforts enabled the company to product
Company''s R&D strategy is anchored on the development and speedy
commercialization of globally competitive products, processes and
technologies through best-in-class research interventions backed by
world-class infrastructure. It has a strong R&D cell for advanced
All the insurable assets of your Company including inventories,
building, plant and machinery were adequately insured.
SECRETARIAL AUDIT REPORT FOR THE YEAR 2014-15:
Pursuant to the provisions of section 204(1) of the Companies Act 2013
and The Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company has appointed Mr. Akhilesh Singh
(Membership no. A25789) Company Secretary in Practice, to undertake the
Secretarial Audit of the Company. The Report of the Secretarial Audit
Report is annexed herewith as Annexure A.
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS FOR
THE YEAR 2014-15:
The Corporate Governance and Management Discussion & Analysis Report,
which form an integral part of this Report, forms part of this Report
and is annexed in the Annual Report, together with the Certificate from
the auditors of the Company regarding compliance with the requirements
of Corporate Governance as stipulated in Clause 49 of the Listing
GREEN INITIATIVE FOR PAPER LESS COMMUNICATIONS:
In accordance with MCA''s recent circulars bearing no.17/2011 dated
21.04.2011 and 18/2011 dated 29.04.2011, your company can mail
documents and various other notices (including notice calling Annual
General Meeting, Audited Financial Statements, Directors'' Report,
Auditor''s Report etc) to the shareholders through electronic mode to
the registered e-mail addresses of shareholders.
(A) Particulars of employees
The industrial relations throughout the year under review remained
cordial. As none of the employees of the Company was in receipt of
remuneration in excess of the limits prescribed, hence the particulars
of employees under the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, are not given in the report.
(B) Conservation of energy, technology absorption and foreign exchange
earnings and outgo Particulars with respect to conservation of energy,
among others, as required under Section 134(3)clause (m) of the
Companies Act, 2013 read with the Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules, 1988 are set out in the
Annexure forming part of this Report.
(C) Directors'' responsibility statement
As required under clause (c) of sub-section (3) of Section 134 of the
Companies Act, 2013, your Directors confirm that:
1. In the preparation of the annual accounts, the applicable
accounting standards were followed and there are no material
2. The Directors selected such accounting policies and applied them
consistently and made judgments'' and estimates that were reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the profit or loss
of the Company for the period;
3. The Directors took proper and sufficient care to maintain adequate
accounting records in accordance with the provisions of this Act for
safeguarding the assets of the Company and for preventing and detecting
fraud and other irregularities.
4. The Directors prepared the annual accounts on a going concern
5. The Directors had laid down internal financial controls to be
followed by the company and that such internal financial controls are
adequate and were operating effectively.
6. 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.
None of the Directors are disqualified under the provisions of
Section164 (2) of the Companies Act, 2013. The Directors have made the
requisite disclosures, as required under the provisions of the
Companies Act, 2013 and Clause 49 of the Listing Agreement.
Extract of the Annual Return :
The extract of the annual return in Form No. MGT - 9 shall form part of
the Board''s report.. The details forming part of the extract of the
Annual Return in form MGT-9 is annexed herewith as Annexure C.
Corporate Social Responsibility (CSR)
The disclosures under Rule 9 of Companies (Corporate Social
Responsibility Policy) Rules, 2014 is not required to be made since
clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of
the Companies (Corporate Social Responsibility) Rules, 2014 is not
applicable to the Company. However, the Company undertakes numerous
initiatives towards the welfare of employees, society, environment etc.
Your Directors wish to place on record their appreciation of the timely
support provided by the Company''s bankers, CDR cell officials, all the
vendors and tie-up entities and the dedication and commitment of the
employees at all levels. Your Directors convey their grateful thanks to
all the Government authorities and shareholders for their continued and
unstinted assistance, co-operation and patronage.
We also take this opportunity to thank all the valued customers who
have appreciated our products and have patronized them.
For and on behalf of the Board
19/X-1, Krishna Puram sd/- sd/-
G.T. Road, Kanpur Dr M P Agarwal Devesh Gupta
Date : 12th August, 2015 Chairman and
Managing Director Deputy