Shri Lakshmi Cotsyn Ltd.
|BSE: 526049||Sector: Industrials|
|NSE: SHLAKSHMI||ISIN Code: INE851B01016|
|BSE 00:00 | 04 Mar||Shri Lakshmi Cotsyn Ltd|
|NSE 05:30 | 01 Jan||Shri Lakshmi Cotsyn Ltd|
|BSE: 526049||Sector: Industrials|
|NSE: SHLAKSHMI||ISIN Code: INE851B01016|
|BSE 00:00 | 04 Mar||Shri Lakshmi Cotsyn Ltd|
|NSE 05:30 | 01 Jan||Shri Lakshmi Cotsyn Ltd|
Your Directors have the pleasure in presenting the 31st Annual Report alongwith the Audited financial statements of the Company for the financial year ended on 31stMarch 2019:
Highlights of financial results (Stand-alone & Consolidated) for the year were asunder:
Performance Highlights - Stand-alone:
Your Directors wish to inform you that during the year 2018-19 Company faced lot ofproblems on account of financial stress hence operations of the units were restrictedbetween 5% to 10% of its installed capacity and that too on job work basis due to thenon-payment of salary to the workmen and staff. Since February 2019 all the units of theCompany were closed.
During 2018-19 the Company recorded sales and other income at Rs. 61.49 crores ascompared to Rs. 195.79 crores in 2017-18. The loss (before/after tax) has been decreasedto Rs. (124.95) crores in 2017-18 as compared to Rs. (127.95 ) croresin 2017-18 due to more capacity utilization on account of job work.
Performance Highlights - Consolidated:
During 2018-19 the Company recorded consolidated sales and other income at Rs. 61.58crores as compared to Rs. 195.84 crores in 2017-18. During the year 2018-19 theprofit/loss before tax has been increased to Rs. (125.81) crores as compared to Rs.(118.11) crores in 2017-18. The profit/loss after tax stood at Rs. (125.72) Crores in2018-19 as compared to Rs (118.07) crores in 2017-18.
STATUS OF FUNCTIONING OF UNITS OF THE COMPANY:
Till January 2019 the Company was doing Job work only. During the year company hasgenerated revenue only from job work in view of imported machinery state of artinfrastructure and superior quality products of the Company. Jobwork has enabled thecompany to reduce its cash losses & increase its capacity utilization..
STATUS OF CORPORATE INSOLVENCY RESOLUTION PROCESS (CIRP) UNDER THE PROVISIONS OFINSOLVENCY AND BANKRUPTCY CODE 2016:
Hon'ble National Company Law Tribunal (NCLT) Allahabad bench vide Order dated30.05.2018 has admitted the petition filed by Union Bank of India under Section 7 of theInsolvency and Bankruptcy Code 2016 (hereinafter referred to as "Code") onbehalf of the Financial Creditor against the Company. The Company has filed an applicationseeking directions from this Hon'ble Adjudicating authority to grant an opportunity tosubmit a proposed resolution plan and further permit the applicant to run the Company as agoing concern.
Mr. Rohit Sehgal Partner of AAA Insolvency LLP having Insolvency ProfessionalRegistration no. IBBI/IPA-001/IP-P00528/2017-18/10953 Resolution Professional("RP") has taken over the possession of all the units of the company throughsecurity agency and the powers of the existing Board of Directors of the Company has beensuspended.
Mr. Sehgal has started the activities towards Corporate Insolvency Resolution Process(CIRP) and appointed Valuer Forensic Auditor and also floated Expression of Interest tothe prospective Investors. But no Resolution Plan for revival of the Company has beenreceived till date. However the existing promoters/management has submitted a settlementplan with NCLT under Section 12A of IBC which is under consideration as yet.
STATUS OF LEGAL CASES OF THE COMPANY :
As already mentioned that the Company is under Corporate Insolvency Resolution Process(CIRP) and undergoing with the moratorium period hence all the Winding-up petitions andCivil suits against the Company are stayed. However the moratorium period declared by theHon'ble National Company Law Tribunal (NCLT) does not cover the promoters/guarantors ofthe company hence they are contesting the cases filed by the Banks at DRT Delhiseparately.
Besides the promoters/guarantors are also contesting the cases filed by the CentralBank of India under Section 138 of Negotiable Instrument Act. A List of all the casesshall be available for inspection at ensuing Annual General Meeting .
Despite of all the adverse situations the Company recorded an export of Rs 12.33crores in 2018-19 as against Rs 41.44 crores in 2017-18 on Stand-alone basis as well as onConsolidated basis.
WHOLLY-OWNED SUBSIDIARY COMPANIES:
The Company has three subsidiary companies which are non-operational at presnt detailsof which are as under:
M/s Shri Lakshmi Defence Solutions Ltd.
The company was incorporated on 19.12.2006 and was engaged in manufacturing of bulletproof jacket bullet proof helmet armored vehicles bullet proof morchas and otherballistic products for defense and homeland security. Due to the scarcity of workingcapital the Company could not operate its functioning and also could not repay its loanof the Bank of Baroda .The Bank after turning its account as NPA has taken over thepossession of the unit and was trying to sale the unit as such. The Company has obtainedstay order from DRT Allahabad against the sale of unit.
The company has not generated any sales like previous year as the Company has not doneany business but earned other income of Rs. 887291.00 in the financial year 2018-19 ascompared to other income of Rs. 454371.00 in the previous financial year 2017-18. TheCompany has incurred a loss of Rs. (7662476/-) during the F.Y. 2018-19 in comparison toa loss of Rs. (7618874/-) for the F.Y. 2017-18
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 at UAE. It was engaged in trading of 100% Polyesterfabric material garments and alike products. During the year 2018-19 the Company has notdone any business therefore there is no turnover or profit in the year 2017-18 as in theprevious year 2017-18.
M/s Synergy Global Home Inc.
M/s Synergy Global Home Inc. is a wholly-owned subsidiary and was incorporated atU.S.A.; which was dealing in trading of home furnishing items. During the year 2018-19M/s Synergy Global Home Inc. has not done any business as in the previous year 2017-18therefore there is no turnover or profit/loss in the year 2018-19. Further there are othertwo non-operational subsidiaries viz. M/s ShriLakshmi Power Limited and M/s Shri LakshmiNano Technologies Limited of Shri Lakshmi Cotsyn Limited under section 2(87) of theCompanies Act 2013. However since incorporation both the companies are not in operationtherefore consolidated Financial statement of M/s Shri Lakshmi Cotsyn Limited does notinclude the financial statement of M/s ShriLakshmi Power Limited and M/s Shri Lakshmi NanoTechnologies Limited
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 financial year 2018-19 there has been no change in Directors. HoweverProf. (Dr.) Rakesh Kumar Trivedi an Independent Director of the company has expressed hisintention to resign from the post of Directorship due to his busy schedule and thereforethe Board at its Meeting held on 14th June 2019 has considered and approved hisresignation w.e.f. 14.06.2019
Appointment of Mr. R.L. Agarwal as Chief Financial Officer (CFO) of the Company:
Further in compliance with the provisions of Section 203 of the Companies Act 2013read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Person)Rules 2014 and other applicable provisions the Board of Directors of the Company attheir meeting held on 14.06.2019 have appointed Mr. R.L. Agarwal as Chief FinancialOfficer (CFO) of the Company with effect from 14.06.2019.
Declaration by an Independent Director (s) & re- appointment if any
A declaration by an Independent Director that he meets the criteria of independence asprovided 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. Duringthe Financial year 2018-19 5 (five) meetings of Board of Directors were held. Themeetings were held on 06th June 2018 13th August 2018 5th September 2018 14thNovember 2018 and 14th February 2019. The maximum time gap between any twomeetings was not more than 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 KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large.
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 toselection and appointment of Directors Senior Management of the Company and in relationto their remuneration.
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 2018-19 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 hence question ofdeclaration of any dividend for the year ended on 31st March 2019 does notarise.
Transfer of unpaid and unclaimed dividend amount/ shares to Investor Education andProtection Fund: Pursuant to the applicable provisions of the Companies Act 2013 andthe rules made thereunder all unpaid and unclaimed dividends are transferred by theCompany to the pertaining Investor Education and Protection Fund after the completion of 7years. Further pursuant to the provisions of these Rules shares in respect of whom thedividend hasn't been claimed by the shareholders has been credited to a DematerialisationAccount of the Authority. Accordingly the Company has transferred unpaid and unclaimeddividends pertaining to the financial year 2010-11 amounting to Rs. 6 78522/- and also41357 number of equity shares were transferred during the financial year under review.Please note that no claim shall lie against company in respect of the unclaimed dividend/shares transferred to the IEPF Authority. However the unclaimed shares/dividend can beclaimed from the IEPF by making necessary application in the prescribed Form available onwebsite www.iepf.gov.in
AUDITORS STATUTORY AUDITORS:
Pursuant to the provisions of Section 139 of the Act read with Companies (Audit andAuditors) Rules 2014 as amended from time to time M/s Tandon & Tandon CharteredAccountants (Firm Registration No. 002070C) were appointed as the Statutory auditors ofthe Company to hold office for a period of five consecutive years from the conclusion ofthe 29th Annual General Meeting of the Company held on 26thSeptember 2017 till the conclusion of the 34th Annual General Meeting to beheld in the year 2022 subject to ratification by shareholders at each Annual GeneralMeeting or as required under law.
Accordingly the necessary resolution for appointment of auditors is being placedbefore the shareholders for ratification.
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 CentralGovernment ratified the appointment of Mr. Arun Kumar Srivastava Cost AccountantsKanpur to carry out cost audit for the current year 2019-20.
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 Mr. Sanjiv Nigam Company Secretary in Practice (C. P. No. 8458) 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 YEAR2018-19:
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 circulars bearing no.17/2011 dated 21.04.2011 and 18/2011dated 29.04.2011 your company mails documents and various other notices (including noticecalling Annual General Meeting Audited Financial Statements Directors' Report Auditor'sReport etc) to the shareholders through electronic mode to the registered e-mail addressesof shareholders.
(A) Particulars of employees
The industrial relations throughout the year under review remained cordial except fromthe month of June 2018 when CIRP started and workers felt that their jobs are unsafe.
As none of the employees of the Company was in receipt of remuneration in excess of thelimits prescribed 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 theCompanies Act 2013 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.
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 2018- 19 are given below:
*RESIGNED W.E.F. 14.06.2019
(ii) Percentage increase in the median remuneration of employees in the financial year:nil
(ii) Number of permanent employees on the rolls of company as on 31.03.2019: 2150
(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:
There has been no percentile increase in the salaries of Employees and Key ManagerialPersonnel in comparison with the increase in the remuneration of other employees for thesame period .
(v) The key parameters for any variable component of remuneration availed by thedirectors:
(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 Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014:
Statement showing the names of Top 10 Employees in terms of remuneration drawn duringthe year:
? Nature of employment for above mentioned employees are permanent.
? None of the above mentioned employees are holding any percentage of equity sharesin the company within the meaning of clause (iii) of sub-rule (2) above except Mrs. SujalaGupta; and
? None of the above mentioned employees is a relative of any director or manager ofthe company .
Details of employees drawing a remuneration of Rs. 1.02 crores or above per annum ifemployed throughout the financial year or Rs. 8.50 Lacs per month if employed forany part of the year and posted in India: NIL
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND 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 support provided bythe Company's bankers all the vendors and tie-up entities and the dedication andcommitment of the employees at all levels. Your Directors convey their grateful thanks toall the Government authorities and shareholders for their continued and unstintedassistance co-operation and patronage. Your Directors also whole heartedly thanks toResolution Professional Mr. Rohit Shegal for his untiring effort in running the units.Wealso take this opportunity to thank all the valued customers who have appreciated ourproducts and have patronized them.