Your Directors have the pleasure in presenting the 27th Annual Report along with theAudited financial statements of the Company for the financial year ended on 31st March2015:
FINANCIAL RESULTS :
Highlights of financial results (Stand-alone & Consolidated) for the year were asunder:
(Rs. in Crores)
| ||2014-15 ||2013-14 ||2014-15 ||2013-14 |
| ||(12 months) ||(9 months) ||(12 months) ||(9 months) |
| ||Stand Alone ||Stand Alone ||Consolidated ||Consolidated |
|Sales and other income ||601.04 ||753.75 ||738.76 ||880.08 |
|Operating profit before interest depreciation and tax ||(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 Highlights - Stand-alone :
Your Directors wish to inform you that during the year 2014-15 Company faced lot ofproblems on account of financial stress hence operations of the units were restrictedbetween 25 to 30% of its installed capacity.
During 2014-15 the Company recorded sales and operating income at Rs.601.04 crores ascompared 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 (9months). The profit/loss after tax was Rs. (934.30) crores in 2014-15 (12 months) ascompared 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 ascompared to Rs. 880.08 in 201314 (9 months). The profit before tax was Rs. (929.67) croresin 2014-15 as compared to Rs. (624.58) crores in 2013-14 (9 months). The profit/loss aftertax was Rs. (930.26) crores in 2014-15 as compared to Rs. (624.66) in 2013-14 (9 months).
The company is in stringent working capital situation and hence the company iscurrently unable to source yarn for its own production. (Yarn is the prime input both inquantitative & price terms for any product in the textile sector). Accordingly duringthe year company has earned a portion of its revenue from jobwork. Jobwork has been donefor world renowned suppliers of denims sheeting & terry towel who are inclined toincrease their jobwork in the company in view of imported machinery state of artinfrastructure and superior quality product. Jobwork has enabled the company to reduce itscash losses & increase its capacity utilization. The company expects increase inrevenue contribution from jobwork in future adding to the bottom line.
PRESENT STATUS OF CORPORATE DEBT RESTRUCTURING PACKAGE (CDR) OF M/S SHRI LAKSHMI COTSYNLTD.:
The CDR package filed by the company was approved by CDR Cell in its meeting dated24.06.2013 and LOA dated 28.06.2013 was issued. In compliance of the LOA MasterRestructuring 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 fromsigning of Master Restructuring Agreement (MRA). Besides all other terms of LOA relatingto perfection of security were also complied with by the Company except the conversion ofpromoters contribution into equity and pledging thereof to CFSL. This could not bepossible due to the Non receipt of approval of Stock exchange an account of selling ofpromoters shares by IFCI.
At present the company is operating through its TRA accounts with Central Bank forrunning its day to day operations. The consortium members banks at their Joint LendersMeeting (JLM) held on 16th June 2015 have decided to settle the accounts under One TimeSettlement (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 thesustainability 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 itsreview note and shown willingness for exiting from CDR. The Company has presented itsobjection 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 bediscussed 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 Reconstructionin terms of the provisions of section 15(1) of Sick Industrial Companies (SpecialProvisions) Act 1985 vide registration number 45/2014. The Board at its first date ofhearing held on 06.07.2015 directed the banks to file their objections within 4 weekstime. The next date of hearing has been fixed on 01.10.2015. The Company is takingnecessary 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 Courtare 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 COTSYNLTD.:
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.
Despite all adverse situations the Company recorded an export of Rs 218.82 crores in2014-15 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 asagainst Rs. 220.63 crores in 201314 (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 ImportExport code and RCMC issued by Federation of Indian Export Organisation.
Further based upon past performance of exports Company is also registered withMinistry 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 AirportInternational Free Zone Sharjah and UAE. It is engaged in trading of 100% Polyesterfabric material garments and alike products and also exporting to other countriesbesides trading in Sharjah itself.
M/S SLCL Overseas FZC Sharjah U.A.E. a wholly-owned subsidiary recorded a turnoverof 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 bulletproof morchas and other ballistic products for defense and homeland security. The companywas incorporated on 19.12.2006 and has started functioning recently. The Company hasintroduced a new range of indigenously designed models based on advance armouringtechnology for armed and police forces namely Dhruv Drona and Viper. These Vehicles areequipped to help the security forces to encounter ever increasing security threats fromnaxalities 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 hasincurred net loss of Rs. 4.82 crores in 2014-15 as compared to a net loss of Rs.1.49crores 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 atU.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 ascompared with Rs. 0.42 Crores in 2013-14 (9 months). However the company suffered a lossof 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 BALANCESHEET OF THE SUBSIDIARY COMPANIES:
In view of the directions issued by the Ministry vide General Circular No: 2 /2011dated 08.02.2011 in regard to exemption under Section 129 of the Companies Act 2013 fornot attaching the balance sheet of the subsidiary concerned; therefore Board of Directorsof your Company have given their consent for not attaching the balance sheet of thesubsidiary concerned;
The Annual Accounts of the subsidiary companies shall also be kept for inspection byany shareholders in the head office of the holding company and of the subsidiary companiesconcerned. The Company shall furnish a hard copy of details of accounts of subsidiaries toany 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 ofRs. 65.40 crores the projects namely Technical Textiles Spinning and Yarn DyedShirting's projects could not be fully commissioned.
Changes in Directors and Key Managerial Personnel
During the period Mr. Dileep Bajaj and Mr. R.K. Garg have resigned from theDirectorship of the Company w.e.f. 14.08.2014. The Board places on record theirappreciation of the valuable advice and guidance given by them while they were Directorsof the Company.
Pursuant to the provisions of Section 149 (10) of Companies Act 2013 an independentdirector shall hold office for a term up to five consecutive years on the Board of aCompany but shall be eligible for reappointment for next five years on passing of aspecial resolution by the Company .
Therefore Shri G.N. Mathur independent director of the company who has completed theterm of consecutive 5 years is proposed to be re-appointed as an independent director fora further term of five consecutive years subject to the approval of the Shareholders byway 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 ofindependence as provided in sub-section (6) of Section 149 of the Companies Act 2013 hasbeen 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 convenedand held the details of which are given in the Corporate Governance Report. However theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013.
The composition of an Audit Committee and details of meeting are stated in theCorporate Governance Report Details of establishment of vigil mechanism for directors andemployees
The vigil mechanism for directors and employees to report genuine concerns has beenestablished 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 theirgenuine concerns or grievances.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
Details of Loans Guarantees and Investments covered under the provisions of Section186 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 onan arm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large.
All Related Party Transactions are placed before the Audit Committee as also the Boardfor approval. Prior omnibus approval of the Audit Committee is obtained on a quarterlybasis for the transactions which are of a foreseen and repetitive nature. None of theDirectors 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 ListingAgreement the Board has carried out an annual performance evaluation of its ownperformance the directors individually as well as the evaluation of the working of itsFinance Audit Grievance Nomination & Remuneration and Compliance Committees etc..The Management evaluates the performance of committees and its functioning at regularintervals.
REMUNERATION & NOMINATION POLICY
The Board has framed a policy which lays down the framework in relation to selectionand appointment of Directors Senior Management of the Company and in relation to theirremuneration.
RISK MANAGEMENT POLICY
A statement indicating development and implementation of a risk management policy forthe Company are set out in the corporate governance report forming part of the Boardreport.
During the Financial Year 2014-15 the Company has not issued any equity shares sothere has been no change in share capital.
Since the Company and its subsidiaries have incurred the loss your Directors have notrecommended any dividend for the year ended on 31st March 2015.
M/s Pradeep & Associates Chartered Accountants Auditors of the Company retire atthe conclusion of the ensuing Annual General Meeting and being eligible offer themselvesfor reappointment. The observations of Auditors in their report read with notes to theaccounts are self-explanatory and do not call for further explanation.
The Central Government's Cost Auditor order specifies an audit of cost accountingrecords of the textile Company every year. This is applicable to the products manufacturedby the Company. The Board of Directors subject to the approval of the Central Governmentappointed Mr. A.K. Srivastava Cost Accountants Kanpur to carry out cost audit for thecurrent year.
The Company appointed a firm of Chartered Accountants M/s Srivastava S and Company ofKanpur as internal auditors to review the internal control systems of the Company andreport thereon. The Report of the Internal Auditors is reviewed by the Audit Committee.
With an increasing concern towards ecology and global warming consumers are favoringorganic and eco-friendly textile products. Therefore the demand of organic cotton isaccelerating with brands and retailers continuing to implement long-term commitment toincrease their use of organic cotton. Your Company also continues to pursue its missionfor environmental excellence and constantly explores opportunities to improve ecology andthe environment.
RESEARCH AND DEVELOPMENT
The company posses in-house R&D facilities which results in cost saving. Thecontinuous R&D efforts enabled the company to product innovation.
Company's R&D strategy is anchored on the development and speedy commercializationof globally competitive products processes and technologies through best-in-classresearch interventions backed by world-class infrastructure. It has a strong R&D cellfor advanced testing laboratories.
All the insurable assets of your Company including inventories building plant andmachinery 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 TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed Mr. Akhilesh Singh (Membership no. A25789) Company Secretary in Practice toundertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Reportis annexed herewith as "Annexure A".
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS FOR THE YEAR2014-15:
The Corporate Governance and Management Discussion & Analysis Report which form anintegral part of this Report forms part of this Report and is annexed in the AnnualReport together with the Certificate from the auditors of the Company regardingcompliance with the requirements of Corporate Governance as stipulated in Clause 49 of theListing Agreement.
GREEN INITIATIVE FOR PAPER LESS COMMUNICATIONS:
In accordance with MCA's recent circulars bearing no. 17/2011 dated 21.04.2011 and18/2011 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 theregistered e-mail addresses of shareholders.
(A) Particulars of employees
The industrial relations throughout the year under review remained cordial. As none ofthe employees of the Company was in receipt of remuneration in excess of the limitsprescribed hence the particulars of employees under the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are not given in the report.
(B) Conservation of energy technology absorption and foreign exchange earnings andoutgo
Particulars with respect to conservation of energy among others as required underSection 134(3)clause (m) of the Companies Act 2013 read with the Companies (Disclosure ofParticulars in the Report of Board of Directors) Rules 1988 are set out in the Annexureforming part of this Report.
(C) Directors' responsibility statement
As required under clause (c) of sub-section (3) of Section 134 of the Companies Act2013 your Directors confirm that:
1. In the preparation of the annual accounts the applicable accounting standards werefollowed and there are no material departures;
2. The Directors selected such accounting policies and applied them consistently andmade judgments' and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit or loss of the Company for the period;
3. The Directors took proper and sufficient care to maintain adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of theCompany 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 thecompany and that such internal financial controls are adequate and were operatingeffectively.
6. The directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
None of the Directors are disqualified under the provisions of Section164 (2) of theCompanies Act 2013. The Directors have made the requisite disclosures as required underthe 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'sreport.. The details forming part of the extract of the Annual Return in form MGT-9 isannexed 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 134of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules 2014 isnot applicable to the Company. However the Company undertakes numerous initiativestowards the welfare of employees society environment etc.
Your Directors wish to place on record their appreciation of the timely supportprovided by the Company's bankers CDR cell officials all the vendors and tie-up entitiesand the dedication and commitment of the employees at all levels. Your Directors conveytheir grateful thanks to all the Government authorities and shareholders for theircontinued and unstinted assistance co-operation and patronage.
We also take this opportunity to thank all the valued customers who have appreciatedour 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 |