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Shri Lakshmi Cotsyn Directors Report, Shri Lakshmi Co Reports by Directors
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Shri Lakshmi Cotsyn

BSE: 526049|NSE: SHLAKSHMI|ISIN: INE851B01016|SECTOR: Textiles - Processing
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Shri Lakshmi Cotsyn is not traded in the last 30 days
Shri Lakshmi Cotsyn is not traded in the last 30 days
Download Annual Report PDF Format 2017 | 2016 | 2015 | 2014 | 0613 | 0612 | 0611 | 0610
Directors Report Year End : Mar '15    Mar 14
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
                              (12 
                              months)   (9 
                                        months)   (12 
                                                  months)   (9 months)
                              Stand 
                              Alone     Stand 
                                        Alone     Consoli
                                                  dated     Consoli
                                                            dated
 
 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
 
 Less:
 Interest and other 
 financial charges           171.01    196.70      172.46    199.48
 
 Depreciation                110.78     78.47      111.71     79.01
 Extraordinary items
 
 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:
 
 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
 capacity.
 
 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
 (9 months).
 
 JOB WORK:
 
 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
 on 29.06.2013.
 
 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
 (BIFR):
 
 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
 BIFR:
 
 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
 Delhi.
 
 2- UCO Bank has also filed recovery suit at DRT Allahabad.
 
 EXPORTS
 
 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).
 
 RECOGNITIONS :
 
 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.
 
 4.  D.M.S.R.D.E.
 
 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
 Organisation.
 
 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
 under:
 
 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
 terrorists'' activities.
 
 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
 months).
 
 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
 items.
 
 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
 subsidiary concerned;
 
 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
 commissioned.
 
 DIRECTORS:
 
 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
 special resolution.
 
 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
 Directors.
 
 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.
 
 AUDIT COMMITTEE
 
 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.
 
 BOARD EVALUATION
 
 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.
 
 SHARE CAPITAL
 
 During the Financial Year 2014-15, the Company has not issued any
 equity shares, so there has been no change in share capital.
 
 DIVIDEND
 
 Since the Company and its subsidiaries have incurred the loss, your
 Directors, have not recommended any dividend for the year ended on 31st
 March, 2015.
 
 AUDITORS
 
 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.
 
 COST AUDITOR
 
 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.
 
 INTERNAL AUDITOR
 
 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.
 
 ENVIRONMENTAL SUSTAINABILITY
 
 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
 innovation.
 
 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
 testing laboratories.
 
 INSURANCE
 
 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
 Agreement.
 
 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.
 
 STATUTORY INFORMATION:
 
 (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
 departures;
 
 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
 basis.
 
 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.
 
 STATUTORY DISCLOSURES
 
 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.
 
 ACKNOWLEDGEMENTS
 
 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 
 Registered office:
 
 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 
                                                             Managing
                                                             Director
Source : Dion Global Solutions Limited
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