Your Directors have the pleasure in presenting the 29th Annual Report along with theAudited financial statements of the Company for the financial year ended on 31st March2017:
Highlights of financial results (Stand-alone & Consolidated) for the year were asunder:
| || || || || |
|D-a y 1 i r i 1 yc ||2016-17 ||2015-16 ||2016-17 ||2015-16 |
|Parnculars ||Stand Alone ||Stand Alone ||Consolidated ||Consolidated |
|Sales and other income ||309.32 ||415.38 ||315.93 ||452.09 |
|Operating profit before interest depreciation and tax ||(24.90) ||18.82 ||(24.85) ||11.39 |
|Less: || || || || |
|Interest and other financial charges ||2.68 ||2.95 ||2.68 ||2.95 |
|Depreciation ||88.67 ||94.85 ||89.51 ||95.69 |
|Extraordinary items ||- ||- ||- ||- |
|Exceptional Items ||(155.49) ||(65.11) ||(149.37) ||(63.86) |
|Profit/ Loss before tax ||(271.74) ||(144.09) ||(266.42) ||(151.11) |
|Less: Income Tax (including deferred tax) ||- ||- ||- ||- |
|Profit/ Loss after tax ||(271.74) ||(144.09) ||(266.42) ||(151.11) |
|Proposed dividend ||- ||- ||- ||- |
|Dividend tax ||- ||- ||- ||- |
|Balance carried to balance sheet ||(271.74) ||(144.09) ||(266.42) ||(151.11) |
| || |
Performance Highlights - Stand-alone :
Your Directors wish to inform you that during the year 2016-17 Company faced lot ofproblems on account of financial stress hence operations of the units were restrictedbetween 30% to 40% of its installed capacity.
During 2016-17 the Company recorded sales and other income at ' 309.32 crores ascompared to ' 415.38 crores in 201516. The loss (before/after tax) has been increased to '(271.74) crores in 2016-17 as compared to ' (144.09) crores in 2015-16 due to lesscapacity utilization and incurring fixed expenses.
Performance Highlights - Consolidated :
During 2016-17 the Company recorded sales and other income at ' 315.93 crores ascompared to ' 452.09 in 2015-16. The loss has been increased to ' (266.42) crores in2016-17 as compared to ' (151.11) crores in 2015-16. The profit/loss (before/ after tax)was ' (266.42) crores being no tax expense in 2016-17 as compared to ' (151.11) in2015-16.
A bulk of the activity in quantitative terms relates to job-work on behalf of otherparties. Revenue from job-work comprises 40% (approx.) of total income in different unitseven though in quantitative terms it is 65-75% (approx.) of total work.
As reported in the last Annual Report the company is still in stringent workingcapital situation and unable to source yarn for its own production. Hence during the yearcompany has earned a major portion of its revenue from jobwork. The world
renowned suppliers of denims sheeting & terry towel are giving jobwork to thecompany in view of imported machinery state of art infrastructure and superior qualityproduct. Jobwork has enabled the company to reduce its cash losses & increase itscapacity utilization.
Status of functioning of units of the Company:
At present our Malwan unit Abhaypur unit and Aung unit continue to be operational ata low / sub-optimal capacity and are working partially due to shortage of working capitalthough company is making full efforts to increase the capacity utilization by undertakingjob work. Still bottom line of the company is not improving inspite of the increase incapacity utilization as job works are being done on cost to cost basis. No doubt thishelps to save the fixed cost.
In Aung and Abhaypur units a bulk of the production relates to job-work for otherparties. Production in 'Rewari Bujurg' unit was expected to improve as lot of parties wereapproaching but we could not run the unit on regular basis due to lack of Infrastructureand Working Capital.
The advertisement was published in various newspapers for sale of 4 numbers of ournon-operational units situated at Sonepat (Embroidery) Roorkee (Garment) Aung (SuitingShirting Interlining) and Malwan (Spinning). Out of the 4 units Aung and Sonepat Unithas been sold by the Bank but no response is received till date from any party to purchasethe other 2 units. We are also trying to identify the purchaser who can purchase theunits but due to recession in the Textile industry / property market people are notforthcoming for purchase of these assets.
PRESENT STATUS OF THE COMPANY AT NCLT :
The Company was 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 and the reference of the Companybefore BIFR has been abated in accordance with third proviso of Section 15(1) of SICAw.e.f. 30.11.2016.
UCO Bank had filed a winding up petition under section 433 434 and 439 of theCompanies Act 1956 before the honorable High Court at Allahabad which has been nowtransferred to the National Company Law Tribunal-Allahabad for consideration. But theCompany has objected on the ground that UCO Bank should be directed to file the petitionsunder the procedure and compliance with sections 7 8 or 9 of the Insolvency andBankruptcy Code 2016. NCLT has asked explanation from UCO Bank on this point.
WINDING UP PETITION AGAINST M/S SHRI LAKSHMI COTSYN LTD.:
Due to the abatement of BIFR few cases of Winding up filed by the following partieswith the Allahabad High Court are revived now and the Company is contesting :
1- Ketan Kantilal Shah (FCCB Bond Holder) amount ' 2.8 million.
2- Soil & Environment Industries Pvt. Ltd. ' 9.34 lacs
PETITION BEFORE DEBT RECOVERY TRIBUNAL (DRT) AGAINST M/S SHRI LAKSHMI COTSYN LTD.:
Following parties have filed the case against the Company before DRT Allahabad &New Delhi which the Company is contesting:
1. Central Bank of India on behalf of consortium member banks has filed a recovery suitat DRT Delhi for an amount of ' 3904.47 crores
2. IFCI Ltd. Recovery Suit for an amount of ' 9.91 crore at DRT New Delhi.
3. UCO Bank has also filed recovery suit at DRT Allahabad.
4. Edelweiss ARC has also filed a recovery suit at DRT allahabad.
Despite all adverse situations the Company recorded an export of ' 40.08 crores in2016-17 as against ' 180.15 crores in 2015-16 on Stand-alone as well as Consolidatedbasis.
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. Office of the Textile Commissioner as a Composite Mill.
6. Bureau of Indian Standards (BIS)
7. Department of Industrial Development Ministry of Industry.
Company is duly registered with Export Promotional Council and possess 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 Shri Lakshmi Defence Solutions Ltd.
The company was incorporated on 19.12.2006 and engaged in manufacturing of bullet proofjacket bullet proof helmet armored vehicles bullet proof morchas and other ballisticproducts for defense and homeland security. Due to the scarcity of working capital theCompany could not operate its functioning and also could not repay its loan of the Bank ofBaroda .
The Bank after turning its account as NPA has taken over the possession of the unit andwas trying to sale the unit as such. The Company has obtained stay order from DRTAllahabad against the sale of unit. The Company is still making efforts to find out someinvestor to run its defence business.
However during the year 2016-17 the Company recorded sales (from trading activities)and other income of ' 430.49 Lacs as compared with ' 9.97 Lacs in 2015-16. Due to theClosure of factory the Company has incurred running expenses net loss of ' (56.58) Lacsin 2016-17 as compared to a net loss of ' (94.55) Lacs in 2015-16.
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 ' 230.43 Lacs in 2016-17 as compared with ' 3660.71 Lacs in 2015-16. During the yearthe Company has suffered a loss of ' (24.18) Lacs in comparison with a loss of '(1243.51) Lacs in the previous year.
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. has not done any business as in theprevious year in 2015-16 therefore there is no turnover or profit in the year 2016-17.However the company suffered a loss of ' 0.03 lacs in 2015-16.
EXEMPTION UNDER SECTION 129 OF THE COMPANIES ACT 2013 FOR NOT ATTACHING THE BALANCESHEET OF THE SUBSIDIARY COMPANIES
In pursuance with the provisions of Section 129 of the Companies Act 2013 therequirement of attaching the Financial Statements Auditors' Report and Directors' Reportof the subsidiaries concerned has been dispensed with and therefore Board of Directors ofyour Company have given their consent for not attaching the balance sheet of thesubsidiary concerned. The Statement in Form AOC-1 containing the salient features of thefinancial statements of your Company's subsidiary companies pursuant to first proviso toSection 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules 2014 formspart of the Annual Report.
The Annual Accounts of the subsidiary companies shall also be kept for inspection byany shareholders at the Registered Office of the holding Company on any working day and ofthe subsidiary companies concerned. The Company shall furnish a hard copy of details ofaccounts of subsidiaries to any shareholder on demand.
Changes in Directors and Key Managerial Personnel :
During the period there was no change in Directors and Key Managerial Personnel of theCompany.
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 Financial year 2016-17 Five meetings of Board of Directors were held. Themeetings were held on 30th May 2016 12th August 2016 31st August 2016 14th November2016 and 13th February 2017. The maximum time gap between any two meetings was not morethan four calendar months.
The composition of an Audit Committee and details of meeting are stated in theCorporate Governance Report.
Details of establishment of vigil mechanism for directors and employees
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 Key
Managerial Personnel or other designated persons which may have a potential conflictwith the 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 Listing Regulations theBoard has carried out an annual performance evaluation of its own performance thedirectors individually as well as the evaluation of the working of its Finance AuditGrievance Nomination & Remuneration and Compliance Committees etc. The Managementevaluates 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 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 2016-17 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 2017.
M/s Pradeep & Associates Chartered Accountants Auditors of the Company retire atthe conclusion of the ensuing Annual General Meeting on completion of the maximum termpermitted under the Section 139 of the Companies Act 2013. The observations of Auditors intheir report read with notes to the accounts are self-explanatory and do not call forfurther explanation.
Pursuant to the provisions of section 139 of the Companies Act 2013 read with the Rulesmade thereunder it is mandatory to rotate the statutory auditors on completion of themaximum term permitted under the said section. The Audit Committee of the Company hasproposed and on 30th May 2017 the Board of Directors of the Company has recommended theappointment of M/s Tandon & Tandon Chartered Accountants 9/81 Arya Nagar Kanpur-02( Firm registration number 002070C) as the Statutory Auditors of the Company. M/s Tandon& Tandon will hold office for a period of five consecutive years from the conclusionof the 29th Annual General Meeting of the Company scheduled to be held on 26th September2017 till the conclusion of 34th Annual General meeting to be held in the year 2022subject to the approval of the shareholders of the Company.
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 Governmentratified the appointment of Mr. Arun Kumar Srivastava Cost Accountants Kanpur to carryout cost audit for the current year.
The Company ratified the appointment of a firm of Chartered Accountants M/s SrivastavaS and Company of Kanpur as internal auditors to review the internal control systems of theCompany and report thereon. The Report of the Internal Auditors is reviewed by the AuditCommittee.
Pursuant to the provisions of Section 204(1) of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed Ms. Pallavi Agarwal Company Secretary in Practice (C. P. No. 13448) toundertake the Secretarial Audit of the Company. The Report of the Secretarial Audit isannexed herewith as "Annexure A".
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.
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS FOR THE YEAR2016-17:
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 the ListingRegulations.
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 (Disclosureof Particulars in the Report of Board of Directors) Rules 1988 are set out in theAnnexure forming 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 the Listing Regulations.
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 time to time undertakes severalinitiatives towards the welfare of employees society environment etc.
PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Act read with rule 5(1) of Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are given below-
(i) The ratio of the remuneration of each director/KMP to the median remuneration ofthe employees of the company and the percentage increase in remuneration of each directorfor the financial year 2016-17 are given below:
Name of KMP
Remuneration per month as on
| || |
|As on 31.03.2017 ||As on 31.03.2016 ||Percentage increase in remuneration ||Ratio to median remuneration |
|1. Dr. M.P. Agarwal ||200000 ||400000 ||Nil ||16.66:1 |
|2. Mr. Pawan Kumar Agarwal ||125000 ||250000 ||Nil ||10.42:1 |
|3 Mr. Devesh Narain Gupta ||200000 ||200000 ||Nil ||16.67:1 |
|4 Mrs. Sharda Agarwal ||62500 ||125000 ||Nil ||5.21 :1 |
|5 Dr. GN Mathur ||0 ||0 ||Nil ||- |
|6 Prof. Dr. R.K Trivedi ||0 ||0 ||Nil ||- |
|7 Mr. Rakesh Kumar Srivastava ||130000 ||130000 ||Nil ||10.83:1 |
(ii) Percentage increase in the median remuneration of employees in the financial year:5.16%
(iii) Number of permanent employees on the rolls of company: 3158
(iv) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
Average percentage increase in the salaries of employees other than KMPs for FinancialYear 2016-17 was 5.75 % as compared to previous financial year. There has been nopercentile increase in the salaries of key managerial personnel in comparison with theincrease in the remuneration of other employees for the same period.
(v) The key parameters for any variable component of remuneration availed by thedirectors: None
(vi) Affirmation that the remuneration is as per the remuneration policy of theCompany:
The Company affirms that remuneration is as per the remuneration policy of the Company.
Information as per Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 : Statement showing the names of Top 10 Employees interms of remuneration drawn during the year:
| || || || || || || |
|. Employee Name ||Designation ||Remuneration received (CTC) per month ||Educational Qualification & Experience ||Date of commencement of employment ||Age ||Previous employment & Designation |
|1 KSHIRAD KUMAR DAS ||Vice President ||197053 ||Diploma in IIHT Exp. 23 Years ||19/07/2010 ||44 ||Nahar Industrial Enterprises Ltd Sr. Manager (Dyeing) |
|2 SANDEEP VASHIST ||Sr. Vice President ||175000 ||P G Diploma in Textile Designing Exp. - 25 Years ||15/12/2016 ||52 ||Om Sacc India Head International Marketing |
|3 RSURENTHER KUMAR ||Dy. General Manager ||150000 ||M.Tech-Textile Engg. - IIT Delhi Exp. 13 Years ||01/05/2012 ||36 ||Vallabh Textile Cp Ltd Dy. Manager |
|4 SUBHASH CHAND JAIN ||VP (Finance) ||150000 ||M.Sc (Phy.) Exp. 44 Years ||07/12/2010 ||67 ||Shamken Spinners Ltd DY. GM |
|5 RAKESH SETHI ||Vice President ||125000 ||M.Sc Ph. D(Chemistry) Exp. 10 Years ||30/01/2012 ||37 ||Trident IndustriesR&D Head |
|6 B.R.GARG ||Director Technical ||120000 ||B.Text Exp. 50 Years ||28/09/2007 ||74 ||Sutlej Industries Bhilad Sr.Vice President |
|7 RAJEEV ANAND ||General Manager ||112116 ||B.Sc Exp. 26 Years ||11/04/2015 ||48 ||OSIL Home Furnishing Products Panipat General Manager Production |
|8 CHANDAN SINGH BANOULA ||Assistant Vice President ||105999 ||BA Diploma in Textile Techonogy Exp. 23 Years ||08/12/2015 ||47 ||Northern Textile Mill Technical Manager |
|9 LAVANYA VASHIST ||Manager ||100000 ||Structural Engineering Gurgaon Exp. Nil ||15/12/2016 ||23 ||N/A |
|10 SANJAY PANDEY ||DGM - Marketing ||100000 ||MBA Exp. 14 Years ||06/10/2016 ||38 ||Kushbu Vinyl Pvt Ltd. (DGM Sales ) |
Nature of employment for above mentioned employees are permanent.
None of the above mentioned employees are holding any percentage of equityshares in the company within the meaning of clause (iii) of sub-rule (2) above; and
None of the above mentioned employees is a relative of any director or managerof the company.
Details of employees drawing a remuneration of ' 1.02 crores or above per annum ifemployed throughout the financial year or ' 8.50 Lacs per month if employed for any partof the year and posted in India: NIL
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
Your Company respects and values diversity reflected in various backgroundsexperiences and ideas and is committed to providing employees with a workplace that isfree from discrimination or harassment. The Company has adopted a policy on preventionprohibition and redressal of sexual harassment at workplace in line with the provisions ofthe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013. The Company has Internal Complaints Committee (ICC) established in accordance withthe aforesaid Act for addressing sexual harassment incidents. No complaints on sexualharassment were received by the Company during the financial year under review.
Your Directors wish to place on record their appreciation of the timely supportprovided by the Company's bankers all the vendors and tie-up entities and the dedicationand commitment of the employees at all levels. Your Directors convey their grateful thanksto all the Government authorities and shareholders for their continued and unstintedassistance 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
|Sd/- ||Sd/- |
|Dr. M. P. Agarwal ||Devesh Narain Gupta |
|Chairman and Managing Director ||Deputy Managing Director |
Registered office : 19/X-1 Krishna Puram G.T. Road Kanpur Date : 11th August 2017