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Lakshana Cotton Spinning Mills Ltd.

BSE: 521157 Sector: Industrials
NSE: N.A. ISIN Code: N.A.
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Lakshana Cotton Spinning Mills Ltd. (LAKSHANACOTTON) - Director Report

Company director report

LAKSHANA COTTON SPINNING MILLS LIMITED ANNUAL REPORT 1999-2000 DIRECTORS' REPORT TO THE SHAREHOLDERS Ladies and Gentlemen, Your Directors have pleasure in submitting their Nineteenth Annual Report together with the audited accounts of the company for the year ended on 30th September 2000. FINANCIAL RESULTS: The company is continuously experiencing the recessionary trend which began in the beginning of 1996. Your company functioned during the year under consideration only under these adverse conditions, added to that the company has to face severe labour problem. The company could commence its production activity only from the 2nd half of December 2000. There was a loss of 109 production days, which is almost 30% of the total working days in the financial year. This also increased the loss your company. This total accumulated loss is taken to the Balance Sheet and shown under Miscellaneous Expenditure on the Asset side of the Balance Sheet. THE PERFORMANCE Your Directors are happy to inform you after the initial hurdle of labour problem, the company is working almost to the fullest capacity. Production of Finished Goods has increased by about over 5 Lakhs Kgs. this has enabled the company to achieve better results than last year. The gross loss had decreased by about 50% when, compared to last year. Your company has to bear interest on Term Loans from financial institutions of Rs. 94.71 Lakhs which has a considerable effect is increasing the loss. This is an interest on the funds which are not utilised for the present production activity. Hence this is silent cost on which the company earns no return. Your Directors feel happy that their constant vigil on the costs has reduced the Profit Before interest and Depreciation to Rs. 48.32 Lakhs from Rs. 69.06 Lakhs as it was in the last year. As reported in the last report the sickness has already been reported to BIFR, Your Directors are trying their best to formulate a viable scheme to be presented before BIFR, which will help the company to have a better operating conditions to concentrate on and to acheive a profit. Your Directors are hopeful of getting some favourable measures from the financial institutions, so as the company is able to start repaying the Term Loans and also operate on better operating conditions. Your Directors seek your valuable co-operation to achieve this goal. REFERENCE TO THE BIFR The company has already reported the sickness to BIFR which has been registered by BIFR. Your Directors are planning to present a rehabilitation scheme before BIFR at the earliest. CONSTITUTION OF THE BOARD In the ensuing Annual General Meeting one of the Directors Sri. G. Jagannatha Rao retires by rotation and offers himself for re-election. an ordinary resolution under special business is brought before you. GENERAL The company has not accepted any deposits from public or from its Directors during the period under report. Hence the provisions of section 58 A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) rules, 1975 will not be applicable to your company. The information required under section 217(1) (e) of the Companies Act, 1956 is appended here to and forming part of this report. Mr. A. Nageswaran B.Com., FCA the Auditor of the company will retire at the ensuing Annual General Meeting of the company and he will be eligible for re-appointment as the Auditor of the company in the following year. Since there were no employees who were in receipt of remuneration of Rs. 3,00,000/- per annum or Rs. 25,000/- per month, the information under Section 217 (2A) of the Companies Act, 1956 read with the relevant rules are not required to be annexed. ACKNOWLEDGEMENTS The company with gratitude wish to place on record the help provided by the financial institutions by rescheduling their Term Loans. This has certainly helped the company to record an improvement, but could not be felt due to the recessionery trend in the textile industry. We pray the Grace of Almighty Sri. Jagannatha Perumal and Goddess Lakshmi to shower their blessings for the continued prosperity of the company in the years to come. By order of the Board For LAKSHANA COTTON SPINNING MILLS LIMITED Place: Coimbatore (Sd.) J. MADHUSUDAN RAO Date : 22-10-2001 Managing Director ANNEXURE TO DIRECTOR'S REPORT Particulars pursuant to the companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988. A. Conservation of Energy a) Energy conservation measures taken: Strict Vigilance is maintained over usage of energy by constant monitoring and educating the need to conserve energy. b) Additional Investments and Proposals being implemented for reduction of consumption of Energy: Nil c) Impact of measures (a) & (b) above for reduction of energy consumption and consequent impact on cost of production. 1. The consumption of energy has been closely monitored and wherever possible wastage is avoided. 2. Improvements have been made in the efficiency of the internal generation of Electricity. Technology Absorption Efforts made in Technology Absorption as per Form B: Indigenous Technology alone is used and Research & Development is carried out by a separate Textile Research Association for Textile Units situated in the Southern Region (SITRA) Foreign Exchange Earnings and outgo Activities relating to exports, initiatives taken to increase exports, development of new export market for products and services and export plans: The company was exporting quality yarn some years back & steps are being taken to explore the possibility of exporting yarn in the coming years. Total Foreign Exchange earned & used: Earned Nil Excluding capital goods, components & Spares used Nil By order of the Board For LAKSHANA COTTON SPINNING MILLS LIMITED Place: Coimbatore (Sd.) J. MADHUSUDAN RAO Date : 22-10-2001 Managing Director