Mar 31, 2018
Ladies and Gentlemen,
The Directors have pleasure in presenting the Hundred and Eighth year Annual Report together with the audited accounts of the Company for the year ended 31.03.2018.
(Rs. in Lakhs)
WORKING RESULTS |
31.3.2018 |
31.3.2017 |
No. of days worked |
356 |
357 |
Sales |
23,668.46 |
22,722.73 |
Other income |
686.47 |
773.49 |
GROSS REVENUE |
24,354.93 |
23,496.22 |
Profit before Tax and Exceptional Items |
495.80 |
460.61 |
Less : Exceptional items |
222.80 |
17.65 |
Profit before Taxation |
273.00 |
442.96 |
Tax Expense |
130.71 |
336.39 |
Profit after Taxation |
142.29 |
106.57 |
Other Comprehensive Income |
13,305.35 |
4,729.11 |
Total Comprehensive Income |
13,447.64 |
4,835.68 |
Transition to Indian Accounting Standards
The Ministry of Corporate Affairs (MCA) vide its notification dated 16.02.2015, notified the Indian Accounting Standards (Ind AS) applicable to certain classes of companies. Ind AS has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. For the Company, Ind AS is applicable from April 1, 2017, with a transition date of April 1, 2016.
The following are the areas which has an impact on account of transition to Ind AS:
- Expected credit loss model for provisioning on trade receivables.
- Fair valuation of investments in equity instruments.
- Fair Valuation of Rent advance.
- Employee costs pertaining to defined benefit obligation.
- Revenue Recognition.
- Recognition of dividend liability and related taxes.
- Recognition of Government Grants.
- Deferred taxes.
The reconciliations and descriptions of the effect of the transition from IGAAP to Ind AS have been provided in the notes to accounts in the standalone financial statements.
OPERATIONS
The Spindles capacity remained at the same level of 1.33 lakh spindles throughout the year 2017-18. Overall utilisation remained around 95% - same as that of 2016-17.
Your Company continued to outsource fabrics both for exports as well as for domestic market. Export of yarn and fabric accounted for Rs. 3529 Lakhs as against Rs. 4999 Lakhs in the previous year, a decrease of around 30% over the previous yearâs performance.
Overall, the operational performance was better during the year, thanks to improvement in realization of yarn prices as well as power cost reduction.
There was no change in the nature of business of the Company during the financial year ended 31st March, 2018.
TRANSFER TO RESERVES
The Company has not transferred any amount to its Reserves during the year under review.
DIVIDEND
The Directors have recommended a dividend of Rs. 9/- per Equity Share of Rs. 100/- each, at 9% for the financial year 20172018 (Previous Year - 9%). The Dividend of 9%, if approved at the forth coming Annual General Meeting, will result in the outflow of Rs. 62.60 Lakhs to the company in addition to Rs. 12.87 Lakhs by way of dividend distribution tax.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
In terms of the Companies Act, 2013 any unclaimed or unpaid Dividend relating to the financial year 2010-11, will be transferred to the Investor Education and Protection Fund established by the Central Government, after the conclusion of this Annual General Meeting.
As per the requirements of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, 10,937 equity shares of Rs. 100/- each on which dividend had remained unclaimed for a period of 7 years have been transferred to the credit of Demat account identified by the IEPF Authority during the year under review.
SHARE CAPITAL
The paid up Equity Share Capital as on March 31, 2018 was Rs. 6,95,55,000/- comprising 6,95,550 shares of Rs. 100/- each. During the year under review, the company has not made any fresh issue of shares.
EXTRACT OF ANNUAL RETURN
As per the requirements of the Companies Act, 2013, the extract of annual return in the prescribed Form MGT 9 is annexed hereto as Annexure - 1 forming part of this report.
BOARD MEETINGS AND ITS COMMITTEES CONDUCTED DURING THE PERIOD UNDER REVIEW
During the year under review, 4 Meetings of the Board of Directors, 4 Meetings of the Audit Committee, 3 Meetings of the Nomination and Remuneration Committee, 1 Meeting of the Corporate Social Responsibility Committee, 1 Meeting of the Stakeholders Relationship Committee and 18 Meetings of the Share Transfer Committee were held. Further details of the same have been enumerated in the Corporate Governance Report annexed herewith.
STATEMENT ON COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with the Secretarial Standards on Board and General Meetings issued by the Institute of Company Secretaries of India.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 134(3)(c) of the Companies Act, 2013, with respect to the Directorsâ Responsibility Statement, it is hereby confirmed that-
(a) In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from those standards;
(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are 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 of the Company for that period;
(c) the Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors have prepared the annual accounts on a going concern basis;
(e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
(f) the Directors have devised proper systems to ensure compliance with the provisions of all the applicable laws and such systems were adequate and operating effectively.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OF THE COMPANIES ACT, 2013 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
There were no instances of frauds identified or reported by the Statutory Auditors during the course of their audit pursuant to Section 143(12) of the Companies Act, 2013.
DECLARATION OF INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to act as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.
NOMINATION AND REMUNERATION COMMITTEE AND POLICY
The Company has reconstituted the Nomination and Remuneration Committee of Directors of the Company and its composition and attendance are reported elsewhere in the Annual Report. The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy on Directorsâ appointment and remuneration including criteria for determining qualification, positive attributes, independence of a Director and other matters provided under sub-section (3) of Section 178. The said Policy is available on the website of the Company - www.lakshmimills.com. The abstract of the Policy is annexed hereto as Annexure - 6.
EXPLANATION AND COMMENTS ON AUDITOR REPORTS
The reports of the Statutory Auditors M/s. M. S. Jagannathan & Visvanathan (annexed elsewhere in the Annual Report) and that of the Secretarial Auditor Mr. M.D. Selvaraj, annexed hereto as Annexure - 2 are self explanatory having no adverse comments.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The Company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013. The details of the investments made by the Company are given in the notes to the financial statements.
RELATED PARTY TRANSACTIONS
All transactions of the Company with the related parties were in the ordinary course of business and on an armâs length pricing basis. Since there are no transactions which are not on armâs length basis and material in nature, the requirement of disclosure of such related party transactions in Form AOC-2 does not arise.
The policy on Related Party Transactions as approved by the Board of Directors of the Company has been uploaded on the Companyâs website and may be accessed through the link at www.lakshmimills.com.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There is no material change or commitments after the closure of the financial year as on 31.03.2018 and till the date of this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo as required under section 134 (3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached herewith as Annexure - 3 to this report.
RISK MANAGEMENT
The Company follows a comprehensive and integrated risk management process. The risk management process is designed to safeguard the organization from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventoried and integrated with the management process such that they receive the necessary consideration during decision making and are periodically reviewed and revised by the Board of Directors.
CORPORATE SOCIAL RESPONSIBILITY
The Board has constituted a CSR Committee comprising of Sri S. Pathy, Sri Aditya Krishna Pathy and Sri D. Rajendran. The company has adopted a Corporate Social Responsibility Policy defining therein the CSR activities to be undertaken by the Company in line with the provisions of Schedule VII of the Companies Act, 2013. The Corporate Social Responsibility Committee of the Board is responsible for the implementation and effective monitoring of the CSR activities of the Company. The Annual Report on Companyâs CSR activities of the Company is furnished in the prescribed format as Annexure - 4 and attached to this report.
BOARD EVALUATION
Pursuant to the provisions of the Act, the Board has carried out an annual evaluation of its own performance, the individual Directors (including the Chairman) as well as an evaluation of the working of all Board Committees. The performance evaluation was carried out on the basis of inputs received from all the Directors / Members of the Committees, as the case may be. The Independent Directors of the Company have also convened a separate meeting for this purpose. All the results of evaluation has been communicated to the Chairman of the Board of Directors.
DIRECTORSâ & KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Act and the Articles of Association of the Company, Sri Sanjay Jayavarthanavelu, Director is liable to retire by rotation at the ensuing Annual General Meeting (âAGMâ) and being eligible offers himself for re-appointment.
Your directors recommend the re-appointment.
Sri V. Jagannathan, Independent Director has resigned from the Board of Directors of the Company with effect from 13.12.2017 due to his advanced age.
Sri Vijay Venkatasamy has been inducted to the Board of Directors of the Company with effect from 14.02.2018, as an Independent Director in the place of Sri V. Jagannathan and he shall hold office upto the date of this Annual General Meeting. Accordingly, necessary resolution proposing the appointment of Sri.Vijay Venkatasamy as an Independent Director of the Company has been included in the Agenda of the Notice convening the Annual General Meeting for the approval of the members.
Key Managerial Personnel of the Company as required pursuant to Section 2(51) and 203 of the Companies Act, 2013 are Sri S. Pathy - Chairman and Managing Director, Sri Aditya Krishna Pathy - Deputy Managing Director, Sri N. Singaravel - Company Secretary and Sri V. Kannappan - Chief Financial Officer.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any joint venture, subsidiary or associate company.
FIXED DEPOSITS
Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has adequate internal control systems to monitor business processes, financial reporting and compliance with applicable regulations. The systems are periodically reviewed for identification of control deficiencies and formulation of time bound action plans to improve efficiency at all the levels. The Audit Committee of the Board constantly reviews internal control systems and their adequacy, significant risk areas, observations made by the internal auditors on control mechanism and the operations of the Company and recommendations made for corrective action through the internal audit reports. The Committee reviews the statutory auditorsâ report, key issues, significant processes and accounting policies.
The Directors and Management confirm that the Internal Financial Controls (IFC) are adequate with respect to the operations of the Company. A report of Auditors pursuant to Section 143(3)(i) of the Companies Act, 2013 certifying the adequacy of Internal Financial Controls is annexed with the Auditors Report.
AUDITORS
STATUTORY AUDITORS
M/s. M.S.Jagannathan& Visvanathan (Firm Registration No.001209S), Chartered Accountants, Coimbatore were appointed as the Statutory Auditors of the company for a period of five years at the 107th Annual General Meeting of the company held on 26th July 2017. Pursuant to the amendment of Section 139 of the Companies Act, 2013, the Company is no longer required to seek the ratification of the appointment of the Auditor at every Annual General Meeting. Accordingly, it has been proposed to obtain the approval of the members to continue the appointment of the Statutory Auditors without ratification of their appointment at every Annual General Meeting.
The Company has received a Certificate from the Statutory Auditors to the effect that their continued appointment as the Statutory Auditors of the Company, would be within the limits prescribed under section 139 of the Companies Act, 2013. Members are requested to grant their approval for the continuation of the appointment of the Auditors for a period up to the conclusion of the 112thAnnual General Meeting of the Company which ought to be held during the year 2022 without ratification at every Annual General Meeting.
SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. M.D.Selvaraj, MDS & Associates, Company Secretary in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit report is annexed herewith as Annexure - 2.
COST AUDITORS
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Directors on the recommendation of the Audit Committee have appointed M/s. A.R.Ramasubramania Raja & Co., a firm of Cost Accountants, as the Cost Auditor of the Company for the financial year 2018 - 19.
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the remuneration payable to the Cost Auditors for the financial year 2017-18 & 2018 - 19 is subject to the approval of the shareholders in a general meeting. The Board recommends the ratification of their remuneration.
COST RECORDS
The Company has maintained the Cost Records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013.
CORPORATE GOVERNANCE
Pursuant to Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, Management Discussion and Analysis Report, Report on Corporate Governance and Auditors Certificate regarding compliance of conditions of Corporate Governance provided elsewhere in this Report, forms part of the Directorsâ Report.
COMPOSITION OF AUDIT COMMITTEE AND VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has reconstituted the Audit Committee of the Board of Directors of the Company and its composition and attendance are disclosed elsewhere in the Annual Report. The Company has devised a vigil mechanism in the form of a Whistle Blower Policy in pursuance of provisions of Section 177(10) of the Companies Act, 2013 and the policy is explained in corporate governance report and also posted on the website of company and can be accessed at the link http://www. lakshmimills.com. During the year under review, there were no complaints received under this mechanism.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place a policy on Sexual Harassment of Women at Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Compliant Committee has been set up to redress complaints received. All employees (permanent, contractual, temporary, trainees) are covered under this policy. There were no complaints received from any employee during the financial year 2017 - 18.
PARTICULARS OF EMPLOYEES
Disclosures with respect to the remuneration of Directors and employees as required under Section 197(12) of Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been appended as Annexure - 5 to this Report.
ACKNOWLEDGEMENT
The Board acknowledges the continued assistance from the Bankers, Cotton, Yarn and Cloth Dealers of the Company and Shareholders and appreciates the valuable services rendered by the employees at all levels.
May the Goddess Lakshmi continue to shower her choicest Blessings for the prosperity of the Company in the years to come.
By Order of the Board
For The Lakshmi Mills Co. Ltd.,
S. PATHY
Coimbatore Chairman and Managing Director
13th August, 2018 (DIN 00013899)
Mar 31, 2017
DIRECTORSâ REPORT
Ladies and Gentlemen,
The Directors have pleasure in presenting the Hundred and Seventh year Annual Report together with the audited accounts of the Company for the year ended 31.03.2017.
WORKING RESULTS No. of days worked Sales Other income |
31.3.2017 357 22,745.05 728.45 |
('' in Lakhs) 31.3.2016 357 1 9,91 9.71 452.79 |
||
GROSS REVENUE |
23,473.50 |
20,372.50 |
||
Profit before Tax and Exceptional Items Less : Exceptional items |
472.40 17.65 |
184.28 37.15 |
||
Profit before Taxation Less : Current Tax MAT Credit entitlement |
63.11 (61.24) |
454.75 |
1.28 (1.28) |
147.13 |
Net Current Tax Prior Year Taxes Deferred Tax Liability |
1.87 3.92 333.84 |
0.87 41.45 |
||
NET PROFIT Add : Carry forward Profit |
115.12 1,365.66 1,480.78 |
104.81 1,336.19 1,441.00 |
||
Profit Available for appropriation |
||||
Appropriation: General Reserve Proposed Dividend Corporate Tax on Dividend Balance carried forward |
1,480.78 |
62.60 12.74 1,365.66 |
||
1,480.78 |
1,441.00 |
The company proposes to retain an amount of Rs, 1,480.78 ( Rs, 1,365.66) Lakhs in the Profit & Loss Account. OPERATIONS
The Spindles capacity remained at the same level of 1.33 lakh spindles throughout the year 2016-17. Overall utilization remained around 95% - same as that of 2015-16.
Your Company continued to outsource fabrics both for exports as well as for domestic market. Export of yarn and fabric accounted for Rs, 5,318 Lakhs as against Rs, 4,780 Lakhs in the previous year, an increase of around 11% over the previous yearâs performance.
Overall, the operational performance was better during the year, thanks to improvement in realization of yarn prices as well as power cost reduction.
There was no change in the nature of business of the Company during the financial year ended 31st March, 2017. DIVIDEND
The Directors have recommended a dividend of Rs, 9/- per Equity Share of Rs, 100/- each, at 9% for the financial year 2016-2017 (Previous Year - 9%). The Dividend of 9%, if approved at the forth coming Annual General Meeting, will result in the out flow of Rs, 62.60 Lakhs to the company in addition to Rs, 12.74 Lakhs by way of dividend distribution tax.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
In terms of the Companies Act, 2013 any unclaimed or unpaid Dividend relating to the financial year 2009-10, will be transferred to the Investor Education and Protection Fund established by the Central Government, after the conclusion of this Annual General Meeting.
SHARE CAPITAL
The paid up Equity Share Capital as on March 31, 2017 was Rs, 6,95,55,000/- comprising 6,95,550 shares of Rs, 100/- each. During the year under review the company has not made any fresh issue of shares.
EXTRACT OF ANNUAL RETURN
As per the requirements of the Companies Act, 2013, the extract of annual return in the prescribed Form MGT 9 is annexed hereto as Annexure - 1 forming part of this report.
BOARD MEETINGS AND ITS COMMITTEES CONDUCTED DURING THE PERIOD UNDER REVIEW
During the year under review, 4 Meetings of the Board of Directors and 4 Meetings of the Audit Committee,
2 Meetings of the Nomination and Remuneration Committee, 1 Meeting of the Corporate Social Responsibility Committee and 1 Meeting of the Stakeholders Relationship Committee and 20 Meetings of the Share Transfer Committee were held. Further details of the same have been enumerated in the Corporate Governance Report annexed herewith.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 134(3)(c) of the Companies Act, 2013, with respect to the Directorsâ Responsibility Statement, it is hereby confirmed that-
(a) In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from those standards;
(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are 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 of the Company for that period;
(c) the Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors have prepared the annual accounts on a going concern basis;
(e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
(f) the Directors have devised proper systems to ensure compliance with the provisions of all the applicable laws and such systems were adequate and operating effectively.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OF THE COMPANIES ACT, 2013 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
There were no instances of frauds identified or reported by the Statutory Auditors during the course of their audit pursuant to Section 143(12) of the Companies Act, 2013.
DECLARATION OF INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to act as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.
NOMINATION AND REMUNERATION COMMITTEE AND POLICY
The Company has reconstituted the Nomination and Remuneration Committee of Directors of the Company and its composition and attendance are reported elsewhere in the Annual Report. The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy on Directorsâ appointment and remuneration including criteria for determining qualification, positive attributes, independence of a Director and other matters provided under sub-section (3) of Section 178. The said Policy is attached herewith as Annexure - 6 to this report and is also available on the website of the Company - www.lakshmimills.com.
EXPLANATION AND COMMENTS ON AUDITOR REPORTS
The reports of the Statutory Auditors M/s. Subbachar and Srinivasan (annexed elsewhere in the Annual Report) and that of the Secretarial Auditor Mr. M.D. Selvaraj, annexed hereto as Annexure - 2 are self explanatory having no adverse comments.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The Company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013. The details of the investments made by the Company are given in the notes to the financial statements.
RELATED PARTY TRANSACTIONS
All transactions of the Company with the related parties were in the ordinary course of business and on an armâs length pricing basis. Since there are no transactions which are not on armâs length basis and material in nature, the requirement of disclosure of such related party transactions in Form AOC-2 does not arise.
The policy on Related Party Transactions as approved by the Board of Directors of the Company has been uploaded on the Companyâs website and may be accessed through the link at www.lakshmimills.com.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There is no material change or commitments after the closure of the financial year as on 31.03.2017 and till the date of this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy, technology absorption, Foreign Exchange Earnings and Outgo as required under section 134 (3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached herewith as Annexure - 3 to this report.
RISK MANAGEMENT
The Company follows a comprehensive and integrated risk management process. The risk management process is designed to safeguard the organization from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventoried and integrated with the management process such that they receive the necessary consideration during decision making and are periodically reviewed and revised by the Board of Directors.
CORPORATE SOCIAL RESPONSIBILITY
The Board has constituted a CSR Committee comprising of Sri S. Pathy, Sri Aditya Krishna Pathy and Sri D. Rajendran.
The Annual Report on Companyâs CSR activities of the Company is furnished in the prescribed format as Annexure - 4 and attached to this report.
BOARD EVALUATION
Pursuant to the provisions of the Act, the Board has carried out an annual evaluation of its own performance, the individual Directors (including the Chairman) as well as an evaluation of the working of all Board Committees. The performance evaluation was carried out on the basis of inputs received from all the Directors / Members of the Committees, as the case may be. The Independent Directors of the Company have also convened a separate meeting for this purpose. All the results of evaluation has been communicated to the Chairman of the Board of Directors.
DIRECTORS & KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Act and the Articles of Association of the Company, Sri R. Santharam, Director is liable to retire by rotation at the ensuing Annual General Meeting (âAGMâ) and being eligible offers himself for re-appointment.
Your directors recommend the re-appointment.
Sri V. S. Velayutham, Independent Director has resigned from the Board of Directors of the Company with effect from 21.04.2016.
Key Managerial Personnel of the Company as required pursuant to Section 2(51) and 203 of the Companies Act, 2013 are Sri S. Pathy - Chairman and Managing Director, Sri Aditya Krishna Pathy - Deputy Managing Director, Sri N. Singaravel - Company Secretary and Sri V. Kannappan - Chief Financial Officer.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any joint venture, subsidiary or associate company.
FIXED DEPOSITS
Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has adequate internal control systems to monitor business processes, financial reporting and compliance with applicable regulations. The systems are periodically reviewed for identification of control deficiencies and formulation of time bound action plans to improve efficiency at all the levels. The Audit Committee of the Board constantly reviews internal control systems and their adequacy, significant risk areas, observations made by the internal auditors on control mechanism and the operations of the Company and recommendations made for corrective action through the internal audit reports. The Committee reviews the statutory auditorsâ report, key issues, significant processes and accounting policies.
AUDITORS STATUTORY AUDITORS
M/s. Subbachar & Srinivasan (Firm Registration No.004083S), Chartered Accountants, Statutory Auditors of the Company were appointed as statutory auditors in the 104th Annual General Meeting to hold office till the conclusion of the 107th Annual General Meeting.
As per Companies Act, 2013, M/s. Subbachar & Srinivasan have completed their term of office and are not eligible for re-appointment. Based on the recommendation of the Audit Committee, the Company seeks approval for the appointment of M/s. M.S.Jagannathan & Visvanathan (Firm Registration No. 001209S), Chartered Accountants, Coimbatore, as statutory auditors of the company to hold office from the conclusion of this 107th Annual General Meeting upto the conclusion of the 112th Annual General Meeting to be held in 2021-2022. There are no qualifications or reservations or remarks made by the auditors in their report.
SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. M.D.Selvaraj, MDS & Associates, Company Secretary in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit report is annexed herewith as Annexure - 2.
COST AUDITORS
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Directors on the recommendation of the Audit Committee have appointed M/s. A.R.Ramasubramania Raja & Co., a firm of Cost Accountants, as the Cost Auditor of the Company for the financial year 2017 - 18.
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the remuneration payable to the Cost Auditors for the financial year 2016-17 & 2017 - 18 is subject to the approval of the shareholders in a general meeting. The Board recommends the ratification of their remuneration.
CORPORATE GOVERNANCE
Pursuant to Regulation 34 of the SEBI (LODR) Regulations, 2015, Management Discussion and Analysis Report, Report on Corporate Governance and Auditors Certificate regarding compliance of conditions of Corporate Governance provided elsewhere in this Report, forms part of the Directorsâ Report.
COMPOSITION OF AUDIT COMMITTEE AND VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has reconstituted the Audit Committee of the Board of Directors of the Company and its composition and attendance are disclosed elsewhere in the Annual Report. The Company has devised a vigil mechanism in the form of a Whistle Blower Policy in pursuance of provisions of Section 177(10) of the Companies Act, 2013 and the policy is explained in corporate governance report and also posted on the website of company and can be accessed at the link http://www.lakshmimills.com. During the year under review, there were no complaints received under this mechanism.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place a policy on Sexual Harassment of Women at Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Compliant Committee has been set up to redress complaints received. All employees (permanent, contractual, temporary, trainees) are covered under this policy. There were no complaints received from any employee during the financial year 2016 - 17.
PARTICULARS OF EMPLOYEES
Disclosures with respect to the remuneration of Directors and employees as required under Section 197(12) of Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 has been appended as Annexure - 5 to this Report.
ACKNOWLEDGEMENT
The Board acknowledges the continued assistance from the Bankers, Cotton, Yarn and Cloth Dealers of the Company and Shareholders and appreciates the valuable services rendered by the employees at all levels.
May the Goddess Lakshmi continue to shower her choicest Blessings for the prosperity of the Company in the years to come.
By Order of the Board
For The Lakshmi Mills Co. Ltd.,
S. PATHY
Coimbatore Chairman and Managing Director
25th May, 2017 (DIN 00013899)
Mar 31, 2016
Ladies and Gentlemen,
The Directors have pleasure in presenting the Hundred and Sixth year Annual Report together with the audited accounts of the Company for the year ended 31.03.2016.
(Rs. in lakhs) |
|||
WORKING RESULTS |
31.3.2016 |
31.3.2015 |
|
No. of days worked |
357 |
358 |
|
Sales |
19,919.71 |
22,130.01 |
|
Other income |
452.79 |
625.23 |
|
GROSS REVENUE |
20,372.50 |
22,755.24 |
|
Profit before Tax and |
184.28 |
567.71 |
|
Exceptional Items |
|||
Less : Exceptional items |
37.15 |
284.81 |
|
Profit before Taxation |
147.13 |
282.90 |
|
Less : Current Tax 1.28 |
45.26 |
||
MAT Credit entitlement (1.28) |
(44.14) |
||
Net Current Tax |
- |
1.12 |
|
Prior Year Taxes |
0.87 |
(17.91) |
|
Deferred Tax Liability / (Asset) |
41.45 |
(129.39) |
|
NET PROFIT |
104.81 |
429.08 |
|
Add : Carried forward Profit |
1,336.19 |
1,117.24 |
|
1,441.00 |
1,546.32 |
||
Less: Write down of carrying amount of assets |
- |
34.56 |
|
Available for appropriation |
1,441.00 |
1,511.76 |
|
Appropriation: |
|||
General Reserve |
- |
50.00 |
|
Proposed Dividend |
62.60 |
104.33 |
|
Corporate Tax on Dividend |
12.74 |
21.24 |
|
Balance carried forward |
1,365.66 |
1,336.19 |
|
1,441.00 |
1,511.76 |
The company proposes to retain an amount of Rs. 1,365.66 lakhs in the Profit & Loss Account.
OPERATIONS
The Spindles capacity remained at the same level of 1.33 lakh spindles throughout the year 2015-16. Overall utilization remained around 95% - same as that of 2014-15.
Your Company continued to outsource fabrics both for exports as well as for domestic market. Export of yarn and fabric accounted for Rs. 4,780 Lakhs as against Rs. 4,392 Lakhs in the previous year, an increase of around 9% over the previous yearâs performance.
Though the operational performance of the Company in the fields of capacity utilization and productivity were more or less maintained at the level of last yearâs achievement, there was a drop in the sales of about 10% due to lower realization of yarn sale price.
Higher cost of raw materials viz., Cotton and Polyester fibre coupled with lower prices of yarn resulted in the lower profitability in operations.
There was no change in the nature of business of the Company during the financial year ended 31st March, 2016.
DIVIDEND
The Directors have recommended a dividend of Rs. 9/- per Equity Share of Rs. 100/- each, at 9% for the financial year 2015-2016 (Previous Year - 15%). The Dividend of 9%, if approved at the forth coming Annual General Meeting, will result in the out flow of Rs. 62.60 lakhs to the company in addition to Rs. 12.74 lakhs by way of dividend distribution tax.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
In terms of the Companies Act, any unclaimed or unpaid Dividend relating to the financial year 2008-09, will be transferred to the Investor Education and Protection Fund established by the Central Government, after the conclusion of this Annual General Meeting.
SHARE CAPITAL
The paid up Equity Share Capital as on March 31, 2016 was Rs. 6,95,55,000/- comprising 6,95,550 shares of Rs. 100/- each. During the year under review the company has not made any fresh issue of shares.
EXTRACT OF ANNUAL RETURN
As per the requirements of the Companies Act, 2013, the extract of annual return in the prescribed Form MGT 9 is annexed hereto as Annexure - 1 forming part of this report.
BOARD MEETINGS AND ITS COMMITTEES CONDUCTED DURING THE PERIOD UNDER REVIEW
During the year under review, 4 Meetings of the Board of Directors and 4 Meetings of the Audit Committee, 3 Meetings of the Nomination and Remuneration Committee, 1 Meeting of the Corporate Social Responsibility Committee and 1 Meeting of the Stakeholders Relationship Committee and 16 Meetings of the Share Transfer Committee were held. Further details of the same have been enumerated in the Corporate Governance Report annexed herewith.
DIRECTORS'' RESPONSIBILITY STATEMENT
The Directors confirm that -
(a) In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from those standards.
(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are 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 of the Company for that period;
(c) they have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) they have prepared the annual accounts on a going concern basis;
(e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
(f) they have devised proper systems to ensure compliance with the provisions of all the applicable laws and such systems were adequate and operating effectively.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
There were no instances of frauds identified or reported by the Statutory Auditors during the course of their audit pursuant to Section 143(12) of the Companies Act, 2013.
DECLARATION OF INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to act as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.
NOMINATION AND REMUNERATION COMMITTEE AND POLICY
As per the requirements of the provisions of the Companies Act, 2013, a Nomination and Remuneration Committee of Directors was constituted by the Board of Directors and the details of the Members of the Committee are disclosed elsewhere in this Annual Report. The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy on Directorsâ appointment and remuneration including criteria for determining qualification, positive attributes, independence of a Director and other matters provided under sub-section (3) of Section 178. The said Policy is available on the website of the Company - www.lakshmimills.com.
EXPLANATION AND COMMENTS ON AUDITOR REPORTS
The reports of the Statutory Auditors (annexed elsewhere in the Annual Report) and that of the Secretarial Auditors (annexed hereto as Annexure - 2) are self explanatory having no adverse comments.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013. The details of the investments made by company are given in the notes to the financial statements.
RELATED PARTY TRANSACTIONS
All transactions of the Company with the related parties were in the ordinary course of business and on an armâs length pricing basis. Since there are no transactions which are not on armâs length basis and material in nature the requirement of disclosure of such related party transactions in Form AOC-2 does not arise.
The policy on Related Party Transactions as approved by the Board of Directors of the Company has been uploaded on the Companyâs website and may be accessed through the link at www.lakshmimills.com.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There is no material change or commitments after the closure of the financial year as on 31.03.2016 and till the date of this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy, technology absorption, Foreign Exchange Earnings and Outgo as required under section 134 (3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached herewith as Annexure - 3 to this report.
RISK MANAGEMENT
The Company follows a comprehensive and integrated risk management process. The risk management process is designed to safeguard the organization from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventoried and integrated with the management process such that they receive the necessary consideration during decision making and are periodically reviewed and revised by the Board of Directors.
CORPORATE SOCIAL RESPONSIBILITY
The Board has constituted a CSR Committee comprising of Sri S.Pathy, Sri Aditya Krishna Pathy and Sri D.Rajendran.
The Annual Report on Companyâs CSR activities of the Company is furnished in the prescribed format as Annexure - 4 and attached to this report.
BOARD EVALUATION
Pursuant to the provisions of the Act, the Board has carried out an annual evaluation of its own performance, the individual Directors (including the Chairman) as well as an evaluation of the working of all Board Committees. The performance evaluation was carried out on the basis of inputs received from all the Directors / Members of the Committees, as the case may be. The Independent Directors of the Company have also convened a separate meeting for this purpose. All the results of evaluation has been communicated to the Chairman of the Board of Directors.
DIRECTORS & KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Act and the Articles of Association of the Company, Sri Aditya Krishna Pathy, Deputy Managing Director is liable to retire by rotation at the ensuing Annual General Meeting (âAGMâ) and being eligible offers himself for re-appointment. Your directors recommend the re-appointment.
During the year under review, the members have approved the appointment of Smt Suguna Ravichandran as an Independent Director of the Company for a period of five years. Further the members have approved the re-appointment of Sri S.Pathy as Managing Director of the Company for a further period of 5 years with effect from 24.04.2016 and Sri Aditya Krishna Pathy as Deputy Managing Director of the Company for a further period of 5 years with effect from 30.07.2015.
Sri V. S. Velayutham, Independent Director has resigned from the Board of Directors of the Company with effect from 21.04.2016. The Board wishes to place on record its appreciation for the valuable services rendered by him during his tenure of office as Independent Director of the Company.
Key Managerial Personnel of the Company as required pursuant to Section 2(51) and 203 of the Companies Act, 2013 are Sri S.Pathy, Chairman and Managing Director, Sri Aditya Krishna Pathy, Deputy Managing Director, Sri N.Singaravel, Company Secretary and Sri V.Kannappan, Chief Financial Officer.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any joint venture, subsidiary or associate company.
FIXED DEPOSITS
Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has adequate internal control systems to monitor business processes, financial reporting and compliance with applicable regulations. The systems are periodically reviewed for identification of control deficiencies and formulation of time bound action plans to improve efficiency at all the levels. The Audit Committee of the Board constantly reviews internal control systems and their adequacy, significant risk areas, observations made by the internal auditors on control mechanism and the operations of the Company and recommendations made for corrective action through the internal audit reports. The Committee reviews the statutory auditorsâ report, key issues, significant processes and accounting policies.
AUDITORS STATUTORY AUDITORS
M/s.Subbachar & Srinivasan (Firm Registration No.004083S), Chartered Accountants have been appointed as statutory auditors of the company for a period of three years at the Annual General Meeting held on 15.09.2014. Accordingly, pursuant to Section 139 of the Companies Act, 2013, the ratification of appointment of Statutory Auditors is being sought from the shareholders of the Company at the ensuing Annual General Meeting. The auditors have consented and confirmed their eligibility and willingness to continue as Statutory Auditors of the Company.
SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Sri M.D.Selvaraj, MDS & Associates, Company Secretary in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit report is annexed herewith as Annexure - 2.
COST AUDITORS
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Directors on the recommendation of the Audit Committee have appointed Sri A.R.Ramasubramania Raja, of M/s. A.R.Ramasubramania Raja & Co., a firm of Cost Accountants, as the Cost Auditor of the Company for the financial year 2016 - 17.
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the remuneration payable to the Cost Auditors for the financial year 2015 - 16 & 2016 - 17 is subject to the approval of the shareholders in the general meeting. The Board recommends the ratification of their remuneration.
CORPORATE GOVERNANCE
Pursuant to Regulation 34 of the SEBI (LODR) Regulations, 2015, Management Discussion and Analysis Report, Report on Corporate Governance and Auditors Certificate regarding compliance of conditions of Corporate Governance provided elsewhere in this Report, forms part of the Directorsâ Report.
COMPOSITION OF AUDIT COMMITTEE AND VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Board has constituted an Audit Committee, details of which are enumerated in the Corporate Governance Report. The Company has devised a vigil mechanism in the form of a Whistle Blower Policy in pursuance of provisions of Section 177(10) of the Companies Act, 2013 and the policy is explained in corporate governance report and also posted on the website of company and can be accessed at the link www.lakshmimills.com. During the year under review, there were no complaints received under this mechanism.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place a policy on Sexual Harassment of Women at Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Compliant Committee has been set up to redress complaints received. All employees (permanent, contractual, temporary, trainees) are covered under this policy. There were no complaints received from any employee during the financial year 2015 - 16.
PARTICULARS OF EMPLOYEES
Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been appended as Annexure - 5 to this Report.
ACKNOWLEDGEMENT
The Board acknowledges the continued assistance from the Bankers, Cotton, Yarn and Cloth Dealers of the Company and Shareholders and appreciates the valuable services rendered by the employees at all levels.
May the Goddess Lakshmi continue to shower her choicest Blessings for the prosperity of the Company in the years to come.
By Order of the Board
For The Lakshmi Mills Co. Ltd.,
S. PATHY
Coimbatore Chairman and Managing Director
22.07.2016 (DIN 00013899
Mar 31, 2015
Dear Members,
The Directors have pleasure in presenting the Hundred and Fifth year
Annual Report together with the audited accounts of the Company for the
year ended 31.03.2015.
(Rs in lakhs)
WORKING RESULTS 31.3.2015 31.3.2014
No. of days worked 358 357
Sales 22,130.01 21,800.57
Other income 625.23 413.93
GROSS REVENUE 22,755.24 22,214.50
Profit before Tax and 567.71 258.95
Exceptional Items
Add / (Less): Exceptional items (284.81) 731.14
Profit before Taxation 282.90 990.09
Less : Current Tax 45.26 225.02
MAT Credit entitlement (44.14) (216.74)
Net Current Tax 1.12 8.28
Prior Year Taxes (17.91) 203.17
Deferred Tax Credit (Net) (129.39) (161.31)
NET PROFIT 429.08 939.95
Add : Carry forward Profit 1,117.24 349.35
1,546.32 1,289.30
Less: Written down of carrying 34.56 -
amount of assets
Available for appropriation 1,511.76 1,289.30
Appropriation:
General Reserve 50.00 50.00
Proposed Dividend 104.33 104.33
Corporate Tax on Dividend 21.24 17.73
Balance carried forward 1,336.19 1,117.24
1,511.76 1,289.30
An amount of Rs.50 lakhs has been transferred to the General Reserves
and an amount of Rs.1,336.19 Lakhs has been retained in the Profit &
Loss account.
OPERATIONS
The Spindles capacity remained at the same level of 1.33 lac spindles
throughout the year 2014-15. Overall utilisation remained around 95% -
same as that of 2013-14.
Your Company continued to outsource fabrics both for exports as well as
for domestic markets. Export of yarn and fabric accounted for Rs. 4392
lakhs as against Rs. 1661 lakhs of previous year. The increase was around
164% over previous year performance.
The Operational Performance of the Company in the fields of capacity
utilisation, productivity and sales realisation were more or less
maintained at the levels of last year''s achievement.
Easy availability of raw materials both Cotton and Polyester fibre
throughout the year coupled with relatively favourable market
conditions enabled your Company to have a healthy trend in its
operations during the year.
DIVIDEND
The Directors have recommended a dividend of Rs. 15/- per Equity Share of
Rs. 100/- each, at 15% for the financial year 2014-2015 (Previous Year -
15%). The Dividend of 15%, if approved at the forth coming Annual
General Meeting, will result in the out flow of Rs. 104.33 lakhs to the
company in addition to Rs. 21.24 lakhs by way of dividend distribution
tax.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION
FUND
In terms of the Companies Act, any unclaimed or unpaid dividend
relating to the financial year 2007-08, will be transferred to the
Investor Education and Protection Fund established by the Central
Government, after the conclusion of this Annual General Meeting.
SHARE CAPITAL
The paid up Equity Share Capital as on March 31, 2015 was
Rs.6,95,55,000/- comprising 6,95,550 shares of Rs. 100/- each. During the
year under review the company has not made any fresh issue of shares.
EXTRACT OF ANNUAL RETURN
As per the requirements of the Companies Act, 2013, the extract of
annual return in the prescribed Form MGT 9 is annexed hereto as
Annexure - 1 forming part of this report.
BOARD MEETINGS AND ITS COMMITTEES CONDUCTED DURING THE PERIOD UNDER
REVIEW
During the year under review, 4 Meetings of the Board of Directors, 4
Meetings of the Audit Committee, 3 Meetings of the Nomination and
Remuneration Committee, 1 Meeting of the Corporate Social
Responsibility Committee and 1 Meeting of the Stakeholders Relationship
Committee were held. Further details of the same have been enumerated
in the Corporate Governance Report annexed herewith.
DIRECTORS'' RESPONSIBILITY STATEMENT
The Directors confirm that -
(a) In the preparation of the annual accounts, the applicable
accounting standards have been followed and there are no material
departures from those standards.
(b) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are 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 of the
Company for that period;
(c) they have taken proper and sufficient care for maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
(d) they have prepared the annual accounts on a going concern basis;
(e) they have laid down internal financial controls to be followed by
the Company and that such internal financial controls are adequate and
were operating effectively; and
(f) they had devised proper systems to ensure compliance with the
provisions of all the applicable laws and such systems were adequate
and operating effectively;
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12)
OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
There were no instances of frauds identified or reported by the
Statutory Auditors during the course of their audit pursuant to Section
143(12) of the Companies Act, 2013.
DECLARATION OF INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet the criteria of
independence as prescribed under both the Companies Act, 2013 and
Clause 49 of the Listing Agreement with the Stock Exchanges.
NOMINATION AND REMUNERATION COMMITTEE AND POLICY
As per the requirements of the provisions of the Companies Act, 2013, a
Nomination and Remuneration Committee was constituted by the Board of
Directors and the details of the Members of the Committee are disclosed
elsewhere in this Annual Report. The Board has, on the recommendation
of the Nomination and Remuneration Committee framed a policy for
selection and appointment of Directors, Senior Management and their
remuneration. The said Policy is annexed hereto as Annexure - 2 forming
part of the Board''s Report and the same can also be accessed on the
Company''s website in the link
http://www.lakshmimills.com/policies.html#
EXPLANATION AND COMMENTS ON AUDITOR REPORTS
The reports of the Statutory Auditors (annexed elsewhere in the Annual
Report) and that of the Secretarial Auditors (annexed hereto as
Annexure - 3) are self explanatory having no adverse comments.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The company has not given any loans or guarantees covered under the
provisions of Section 186 of the Companies Act, 2013. The details of
the investments made by company are given in the notes to the financial
statements.
RELATED PARTY TRANSACTIONS
All transactions entered into with related parties as defined under the
Companies Act, 2013 and Clause 49 of the Listing Agreement during the
financial year 2014-15 were in the ordinary course of business and on
an arm''s length pricing basis. Since there are no transactions which
are not on arm''s length basis and material nature the requirement of
disclosure of such related party transactions in Form AOC-2 does not
arise.
The Policy on Related Party Transactions as approved by the Board of
Directors of the Company has been uploaded on the Company''s website
and may be accessed through the link at
http://www.lakshmimills.com/policies.html#
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF
THE COMPANY
There is no material change or commitments after the closure of the
financial year as on 31.03.2015 and till the date of this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information pertaining to conservation of energy, technology
absorption, Foreign Exchange Earnings and Outgo as required under
section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the
Companies (Accounts) Rules, 2014 is attached herewith as Annexure 4 to
this report.
RISK MANAGEMENT
The Company has a structured risk management policy. The risk
management process is designed to safeguard the organization from
various risks through adequate and timely actions. It is designed to
anticipate, evaluate and mitigate risks in order to minimize its impact
on the business. The potential risks are inventoried and integrated
with the management process such that they receive the necessary
consideration during decision making.
CORPORATE SOCIAL RESPONSIBILITY
The Board has formed a Corporate Social Responsibility Committee
comprising of Sri.S.Pathy, Sri.Aditya Krishna Pathy and
Sri.D.Rajendran.
The Committee at its meeting held on 11th February, 2015, recommended a
CSR policy for adoption by the Company in line with the provisions of
Schedule VII of the Companies Act, 2013.
The CSR policy deals with allocation of funds, activities,
identification of programmes, approval, implementation, monitoring and
reporting mechanisms for CSR activities.
The Annual Report on Company''s CSR activities of the Company is
furnished in the prescribed format as Annexure 5 and attached to this
report.
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 Audit and Nomination &
Remuneration Committees. The Independent Directors of the Company have
also convened a separate meeting for this purpose. All the results and
evaluation has been communicated to the Chairman of the Board of
Directors. All the Directors of the Board are familiar with the
business of the Company.
DIRECTORS & KEY MANAGERIAL PERSONNEL
At the 104th Annual General Meeting of the company held on 15th
September, 2014 the company had appointed Sri.V.Jagannathan,
Sri.D.Rajendran, Sri.Satish Ajmera and Sri.V.S.Velayutham as
independent directors under the companies Act, 2013 to hold office for
five consecutive years or the date of 109th Annual General Meeting,
whichever is earlier.
Sri.Sanjay Jayavarthanavelu, Director retires by rotation at the
ensuing Annual General Meeting and being eligible offers himself for
re-appointment.
Smt.Suguna Ravichandran appointed as Additional Director of the Company
with effect from 11.02.2015 holds office upto the date of this Annual
General Meeting. Accordingly, necessary resolution proposing the
appointment of Smt.Suguna Ravichandran as an Independent Director of
the Company has been included in the Agenda of the Annual General
Meeting for the approval of the Shareholders.
Your directors recommend their appointment/ re-appointment.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any joint venture or subsidiary company.
However, the company has one associate company namely M/s. LCC
Investments Limited.
A report containing the salient features of the associate as required
under Section 129(3) of the Companies Act, 2013 has been annexed
herewith in Form AOC-1 and is attached as Annexure 6 to this report
FIXED DEPOSITS
Your Company has not accepted any deposits within the meaning of
Section 73 of the Companies Act, 2013 and the Companies (Acceptance of
Deposits) Rules, 2014. Further, all the deposits accepted prior to the
commencement of the Companies Act, 2013, i.e., 01.04.2014, were fully
repaid and no amount remains unpaid as on 31.03.2015.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators /
Courts which would impact the going concern status of the Company and
its future operations.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has adequate internal control systems to monitor business
processes, financial reporting and compliance with applicable
regulations. The systems are periodically reviewed for identification
of control
deficiencies and formulation of time bound action plans to improve
efficiency at all the levels. The Audit Committee of the Board
constantly reviews internal control systems and their adequacy,
significant risk areas, observations made by the internal auditors on
control mechanism and the operations of the Company and recommendations
made for corrective action through the internal audit reports. The
Committee reviews the statutory auditors'' report, key issues,
significant processes and accounting policies.
AUDITORS
STATUTORY AUDITORS
M/s.Subbachar & Srinivasan (Firm Registration No.004083S), Chartered
Accountants have been appointed as statutory auditors of the company
for a period of three years at the Annual General Meeting held on
15.09.2014. Accordingly, pursuant to Section 139 of the Companies Act,
2013, the ratification of appointment of Statutory Auditors is being
sought from the shareholders of the Company at the ensuing Annual
General Meeting. The auditors have consented and confirmed their
eligibility and willingness to continue as Statutory Auditors of the
Company.
SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company has appointed Mr. M.D.Selvaraj, MDS
& Associates, Company Secretary in practice to undertake the
Secretarial Audit of the Company. The Secretarial Audit report is
annexed herewith as Annexure 3.
COST AUDITORS
Pursuant to Section 148 of the Companies Act, 2013 read with the
Companies (Cost Records and Audit) Amendment Rules, 2014, the Directors
on the recommendation of the Audit Committee have appointed Sri
A.R.Ramasubramania Raja, of M/s. A.R.Ramasubramania Raja & Co., a firm
of Cost Accountants, as the Cost Auditor of the Company for the
financial year 2015 - 16.
Pursuant to Section 148 of the Companies Act 2013 read with the
Companies (Cost Records and Audit) Rules, 2014, the remuneration
payable to the Cost Auditors is subject to the approval of the
shareholders in a general meeting. The Board recommends the
ratification of their remuneration.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, Management Discussion and Analysis Report, Report on
Corporate Governance and Auditors Certificate regarding compliance of
conditions of Corporate Governance provided elsewhere in this Report,
forms part of the Directors'' Report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has devised a vigil mechanism in the form of a Whistle
Blower Policy in pursuance of provisions of Section 177(10) of the
Companies Act, 2013 and the policy is explained in corporate governance
report and also posted on the website of company and can be accessed at
the link http://www.lakshmimills.com/policies.html#. During the year
under review, there were no complaints received under this mechanism.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place a policy on Sexual Harassment of Women at
Workplace in line with the requirements of the Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
An Internal Compliant Committee has been set up to redress complaints
received. All employees (permanent, contractual, temporary, trainees)
are covered under this policy. There were no complaints received from
any employee during the financial year 2014-15.
PARTICULARS OF EMPLOYEES
Disclosures with respect to the remuneration of Directors and employees
as required under Section 197 of Companies Act, 2013 and Rule 5 of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 has been appended as Annexure 7 to this Report.
ACKNOWLEDGEMENT
The Board acknowledges the continued assistance from the Bankers,
Cotton, Yarn and Cloth Dealers of the Company, Shareholders and
Depositors and appreciates the valuable services rendered by the
employees at all levels.
May the Goddess Lakshmi continue to shower her choicest Blessings for
the prosperity of the Company in the years to come.
By Order of the Board
For The Lakshmi Mills Co. Ltd.,
S. PATHY
Coimbatore Chairman and Managing Director
29th July, 2015 (DIN 00013899)
Mar 31, 2014
Ladies and Gentlemen,
The Directors have pleasure in presenting the Hundred and Fourth year
Annual Report together with the audited accounts of the Company for the
year ended 31.03.2014.
(Rs. in lakhs)
WORKING RESULTS 31.3.2014 31.3.2013
No. of days worked 357 357
Sales 21,800.57 16,389.13
Other income 413.93 752.92
GROSS REVENUE 22,214.50 17,142.05
Profit/(Loss) before Tax, 258.95 382.30
Exceptional Items
Add: Exceptional items 731.14 117.03
Profit/(Loss) before Taxation 990.09 499.33
Less : Current Tax 225.02 41.62
MAT Credit entitlement (216.74) (38.48)
Net Current Tax 8.28 3.14
Prior Year Taxes 203.17 -
Deferred Tax Credit (Net) (161.31) (608.80)
NET PROFIT/(LOSS) 939.95 1,104.99
Add/(Less): Carry forward Profit /(Loss) 349.35 (627.98)
Available for appropriation 1,289.30 477.01
Appropriation:
General Reserve 50.00 30.00
Proposed Dividend 104.33 83.47
Corporate Tax on Dividend 17.73 14.19
Balance carried forward 1,117.24 349.35
1,289.30 477.01
OPERATIONS
There was a marginal increase of 2736 spindles in Palladam Unit
bringing the total number of spindles operated to 1.33 lakhs as follows:
S. No Unit Spindles in lakhs
i) Palladam : 0.70
ii) Kovilpatti : 0.63
Total : 1.33
The operational performance of the Company during the year was
satisfactory.
Thanks to the provision of separate electrical feeder lines in both the
units during the year. Loss of utilization due to power shortage was
overcome and that capacity utilization improved tremendously. The
average utilization for the year was over 94%. This improved
utilization had resulted in increased value of production of over 29%
compared to the previous year.
Your Company continued to outsource fabrics both for exports and
domestic markets. Export of yarn and fabrics accounted for over Rs. 21
Crores as against Rs. 13.64 Crores of previous year. The increase was
around 50% over previous year''s performance.
Overall, the operational results of the Company improved considerably
during the year and thanks for optimum capacity utilization, improved
market conditions and increased exports.
CURRENT INDUSTRIAL TREND AND FUTURE PROSPECTS
Textile industry as a whole saw a better year in 2013-14, thanks to the
availability of raw materials both in manmade fibres and cotton.
However due to general sluggishness in the manufacturing sector, much
progress could not be made during the year. The Prospects for the
textile industry looks promising provided we are able to compete in the
highly competitive market.
OUTLOOK
Indian Textile Industry can look forward for robust growth in the years
ahead. India is endowed with adequate quantity of raw materials both in
cotton and manmade fibres. With a large reservoir of well qualified
technicians and managerial personnel, it should be possible to take
bigger share in the world market.
Our country reported to have attained No.2 status in the textile trade
in the World - next to China. Plenty of opportunities are there to
surge forward. One has to take right steps to move forward for further
growth and consolidation.
Your Company will proceed in the right direction in the years ahead.
DIVIDEND
The Directors have recommended a dividend of Rs. 15/- per share (15%)
for the financial year 2013-2014 (Previous Year - 12%).
DIRECTORS
Sri R. Santharam, Non - Independent Director and Sri V. S. Velayutham,
Independent Director retire by rotation at the ensuing Annual General
Meeting and being eligible offer themselves for re-appointment.
In order to comply with the provisions of the Companies Act, 2013 and
Clause 49 of the Listing Agreement, Sri V. Jagannathan, Sri D.
Rajendran and Sri Satish Ajmera are proposed to be appointed as
Independent Directors. The said Directors have consented to act as
Independent Directors and in respect of whom nominations with requisite
deposit have been received from the members.
A brief profile of the Directors retiring by rotation and seeking
re-appointment, to be provided as per Clause 49 of the Listing
Agreement is annexed to the Notice of Annual General Meeting.
DIRECTORS'' RESPONSIBILITY STATEMENT
In compliance with the provisions of Section 217(2AA) of the Companies
Act, 1956, the Directors state that:
i. In the preparation of Statement of Profit and Loss for the period
ended 31st March 2014 and the Balance Sheet as on that date all the
applicable Accounting Standards have been followed.
ii. Accounting Policies, that are reasonable and prudent, have been
selected and applied consistently 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 the profit of the Company for the year ended 31st March 2014.
iii. The accounting records in accordance with the provisions of the
Companies Act, 1956 and for safeguarding the assets of the Company as
also for preventing and detecting fraud and other irregularities, have
been properly maintained and
iv. The Statement of Profit and Loss and Balance Sheet have been
prepared on a going concern basis.
CORPORATE GOVERNANCE
Pursuant to clause 49 of the Listing Agreement with the Stock
Exchanges, Management Discussion and Analysis Report, Report on
Corporate Governance and Auditors Certificate regarding compliance of
conditions of Corporate Governance are made part of the Annual Report.
FIXED DEPOSIT
The deposit amount of Rs. 15,05,000/- claimed and unpaid due to dispute
between the legal heirs was paid to the legal heirs upon Order of the
Principal District Court at Coimbatore. No amount remains unclaimed as
on 31st March 2014.
AUDITORS
The Company''s Auditor M/s.Subbachar & Srinivasan are to retire at the
ensuing Annual General Meeting. M/s. Subbachar & Srinivasan, Chartered
Accountants are eligible for re-appointment.
GENERAL
The Company''s Assets have been adequately insured.
The particulars required to be furnished under the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988 are set out separately and form part of this Report.
During the year under review, there was no employee drawing
remuneration in excess of the amount prescribed under section 217 2(A)
of the Companies Act, 1956.
ACKNOWLEDGEMENT
The Board acknowledges the continued assistance from the Bankers,
Cotton, Yarn and Cloth Dealers of the Company, Shareholders and
Depositors and appreciate the valuable services rendered by the
employees at all levels.
May the Goddess Lakshmi continue to shower her choicest Blessings for
the prosperity of the Company in the years to come.
By Order of the Board
For The Lakshmi Mills Co. Ltd.,
Coimbatore S. PATHY
25th July, 2014 Chairman and Managing Director
Mar 31, 2013
Ladies and Gentlemen,
The Directors have pleasure in presenting the Hundred and Third year
Annual Report together with the audited accounts of the Company for the
year ended 31.03.2013.
(Rs. in lakhs)
WORKING RESULTS 31.3.2013 31.3.2012
No. of days worked 357 357
Sales 16389.13 14942.38
Other income 752.92 853.97
GROSS SALES 17142.05 15796.35
Profit / (Loss) before
Tax, Exceptional items 376.30 (1913.42)
Add : Exceptional items 123.03 -
Profit / (Loss) before Taxation 499.33 (1913.42)
Less: Current Tax 41.62
AAAT Credit Entitlement (38.48)
Net Current Tax 3.14 -
Deferred Tax Credit (Net) (608.80) (595.90)
NET PROFIT / (LOSS) 1104.99 (1317.52)
Less : Carry forward Profit / (Loss) (627.98) 689.54
Available for appropriation 477.01 (627.98)
Appropriation:
General Reserve 30.00 Nil
Proposed Dividend 83.47 Nil
Corporate Tax on Dividend 14.19 Nil
Balance carried forward 349.35 Nil
477.01
OPERATIONS
The Company continued to operate 1.31 lakhs spindles in Palladam and
Kovilpatti units during the year as follows:-
S.
No Unit Spindles in lakhs
i) Palladam : 0.68
ii) Kovilpatti : 0.63
Total : 1.31
Capacity utilization continued to suffer during the year also but at
reduced levels compared to previous year. Overall, the operational
performance was better during the year, thanks to improved production
as well as improvement in realization of yarn prices. This has helped
the Company to show improved operational results.
Your Company continued to outsource fabrics both for exports and
domestic markets. However there was steep drop in exports due to global
market conditions.
CURRENT INDUSTRIAL TREND AND FUTURE PROSPECTS
Thanks to better market conditions and stable raw material prices for a
major part of the year, the textile industry as a whole heaved a sigh
of relief. However, the much announced restructuring program did not
benefit many as the conditions imposed were not at all workable. The
units continued to suffer with no relief from financial institutions.
To tide over the continued crisis in power front due to unscheduled
power cuts etc. your Company had gone in for dedicated power lines for
both Kovilpatti and Palladam units. This would certainly give relief to
the units from the unscheduled power interruptions.
OUTLOOK
Government of India has announced the extension of TUF Scheme for the
12th Plan period also. This may help the industry to modernize further
to meet the challenges of the future.
The industry need to seriously draw up plans to overcome the ever
increasing shortage of skilled labour and also to insulate against the
rising energy cost.
DIVIDEND
The Directors have recommended a dividend of 12% for the financial year
2012-2013.
ACCOUNTING POLICY
Effective from 01.04.2012, the Company has with retrospective effect
changed its method of providing depreciation on Plant / Electrical
Equipments from ''Straight Line'' method to ''Written Down Value''
method, at the rates prescribed in Schedule XIV of the Companies Act,
1956. Management believes that this change will result in more
appropriate presentation and will give a systematic basis of
depreciation charge, representative of the time pattern in which the
economic benefits will be derived from the use of these assets.
DIRECTORS
In accordance with the Companies Act, 1956, and the Articles of
Association, Sri D. Rajendran and Sri V. Jagannathan, Directors retire
by rotation at the ensuing Annual General Meeting and being eligible
offer themselves for re-appointment.
DIRECTORS'' RESPONSIBILITY STATEMENT
In compliance of Section 217(2AA) of the Companies Act, 1956, the
Directors state that:
i. In the preparation of Statement of Profit and Loss for the year
ended 31st March 2013 and the Balance Sheet as on that date all the
applicable accounting standards have been followed.
ii. Accounting Policies, that are reasonable and prudent, have been
selected and applied consistently 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 the profit of the Company for the year ended 31st March 2013.
iii. The accounting records in accordance with the provisions of the
Companies Act, 1956 and for safeguarding the assets of the Company as
also for preventing and detecting fraud and other irregularities, have
been properly maintained and
iv. The Statement of Profit and Loss and Balance Sheet have been
prepared on a going concern basis.
CORPORATE GOVERNANCE
Pursuant to clause 49 of the listing agreement with the stock
exchanges, Management Discussion and Analysis Report, Report on
Corporate Governance and Auditors Certificate regarding compliance of
conditions of Corporate Governance are made part of the Annual Report.
FIXED DEPOSIT
The deposit amount of Rs. 15,05,000/- claimed remains unpaid due to
dispute between the legal heirs and is pending before the Principal
District Court at Coimbatore. No other amount remains unclaimed as on
31st March 2013.
AUDITORS
The Company''s Auditor M/s. Subbachar & Srinivasan are to retire at
the ensuing Annual General Meeting.
M/s. Subbachar & Srinivasan, Chartered Accountants are eligible for
re-appointment.
GENERAL
The Company''s Assets have been adequately insured.
The particulars required to be furnished under the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules
1988 are set out separately and form part of this Report.
During the year under review, there was no employee drawing
remuneration in excess of the amount prescribed under section 217 2(A)
of the Companies Act, 1956.
ACKNOWLEDGEMENT
The Board acknowledges the continued assistance from the Bankers,
Cotton, Yarn and Cloth Dealers of the Company, Shareholders and
Depositors and appreciate the valuable services rendered by the
employees at all levels.
May the Goddess Lakshmi continue to shower her choicest Blessings for
the prosperity of the Company in the years to come.
By Order of the Board
For The Lakshmi Mills Co., Ltd.
Coimbatore S. PATHY
2nd August, 2013 Chairman and Managing Director
Mar 31, 2012
The Directors have pleasure in presenting the Hundred and Second year
Annual Report together with the audited accounts of the Company for the
year ended 31.3.2012.
WORKING RESULTS 31.3.2012 31.3.2011
No. of days worked 357 356
(Rs. in
lakhs)
Sales 14942.38 17583.28
Other income 853.97 410.26
GROSS SALES 15796.35 17993.54
Profit / (Loss) before Tax,
Exceptional items (1913.42) 384.17
Add : Exceptional items - -
Profit / (Loss) before Taxation (1913.42) 384.17
Less : Current Tax 54.07
MAT Credit Entitlement (48.83)
Deferred Tax Credit (Net) (595.90) (154.74) (149.50)
NET PROFIT / (LOSS) (1317.52) 533.67
Available for appropriation (1317.52) 533.67
Appropriation:
General Reserve Nil Nil
Proposed Dividend Nil 62.60
Corporate Tax on Dividend Nil 10.15
Balance carried forward Nil 460.92
- 533.67
OPERATIONS:
The Company continued to operate 1.31 lakhs spindles in Palladam and
Kovilpatti units during the year as follows:- Spindles in lakhs
i) Palladam : 0.68
ii) Kovilpatti : 0.63
Total : 1.31
Due to unprecedented power cuts and restrictions on the use of
electricity during peak hours every day for major part of the year, the
overall capacity utilization suffered drastically.
Due to unprecedented rise and the subsequent steep fall in prices
resulted in many mills forced to hold cotton at high prices over the
market rates for substantial part of the year. Yarn prices were found
unremunerative under such circumstances and that the mills did not go
in for captive capacity to improve its utilization. The result was that
the capacity utilization suffered severely, cash eroded in majority of
the mills and that the operations had become very uneconomical.
Your Company was no exception and there was heavy erosion of Working
Capital.
The Company continued to outsource fabrics both for exports and
domestic markets. Your Company could export around 25 lakh metres of
grey fabric valued at over Rs.29 Crores during the year. The Company
hopes to continue this trend in the current year also.
CURRENT INDUSTRIAL TREND AND FUTURE PROSPECTS:
The Textile industry underwent one of the worst financial year in
2011-12. Due to production losses caused by unprecedented power cuts
and restrictions, violent fluctuations in Raw Cotton prices - not
witnessed earlier - resulted in most of the mills carrying huge
inventory at prices more than the market rate. Operationally many mills
have lost cash eroding their Working Capital.
The industry has represented to the Government of India for
restructuring of the outstanding loans and that Government had since
agreed to consider this on a case to case basis.
The Company hopes that Government of India will come up with concrete
plans of action to bail out the ailing textile industry from the
unprecedented crisis forced on it by various external factors.
OUTLOOK:
Government's positive proposals to bail out the ailing textile
industry are eagerly awaited to proceed further.
In the context of finding skilled labour for the spinning industry,
concrete plans of action are needed to go in for more of automation to
reduce dependence of labour in the industry. Present wage structure in
textile mills is not also quite attractive to retain labour. Industry
need to think in this direction seriously.
DIVIDEND:
The directors have not recommended any dividend for the financial year
2011 -2012 due to severe recession in the industry and losses incurred
by the Company.
DIRECTORS
In accordance with the Companies Act, 1956, and the Articles of
Association, Sri. Satish Ajmera and Sri. Sanjay Jayavarthanavelu,
Directors retire by rotation at the ensuing Annual General Meeting and
being eligible offer themselves for re-appointment.
DIRECTORS' RESPONSIBILITY STATEMENT
In compliance of Section 217(2AA) of the Companies Act, 1956, the
Directors state that:
i. In the preparation of Statement of Profit and Loss for the year
ended 31st March 2012 and the Balance Sheet as on that date all the
applicable accounting standards have been followed.
ii. Accounting Policies, that are reasonable and prudent, have been
selected and applied consistently 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 the loss of the Company for the year ended 31st March 2012.
iii. The accounting records in accordance with the provisions of the
Companies Act, 1956 and for safeguarding the assets of the Company as
also for preventing and detecting fraud and other irregularities, have
been properly maintained and
iv. The Statement of Profit and Loss and Balance Sheet have been
prepared on a going concern basis.
CORPORATE GOVERNANCE
Pursuant to clause 49 of the listing agreement with the stock
exchanges, Management Discussion and Analysis Report, Report on
Corporate Governance and Auditors Certificate regarding compliance of
conditions of Corporate Governance are made part of the Annual Report.
FIXED DEPOSIT
The deposit amount of Rs.15,05,000/- claimed remains unpaid due to
dispute between the legal heirs and is pending before the Principal
District Court at Coimbatore. No other amount remains unclaimed as on
31st March 2012.
AUDITORS
The Company's Auditor M/s. Subbachar & Srinivasan are to retire at
the ensuing Annual General Meeting and are eligible for re-appointment
and necessary certificate has been received from them as required under
Section 224(1B) of the Companies Act, 1956.
GENERAL
The Company's Assets have been adequately insured.
The particulars required to be furnished under the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules
1988 are set out separately and form part of this Report.
During the year under review, there was no employee drawing
remuneration in excess of the amount prescribed under section 217 2(A)
of the Companies Act, 1956.
ACKNOWLEDGEMENT
The Board acknowledges the continued assistance from the Bankers,
Cotton, Yarn and Cloth Dealers of the Company, Shareholders and
Depositors and appreciate the valuable services rendered by the
employees at all levels.
May the Goddess Lakshmi continue to shower her choicest Blessings for
the prosperity of the Company in the years to come.
By Order of the Board
Coimbatore S. PATHY
1st August 2012 Chairman and Managing Director
Mar 31, 2011
Ladies and Gentlemen,
The Directors have pleasure in presenting the Hundred and First year
Annual Report together with the audited accounts of the Company for the
year ended 31.03.2011.
WORKING RESULTS 31.03.2011 31.03.2010
No. of days worked 356 356
(Rs. in lakhs)
Sales 17445.35 13377.07
Other income 548.19 377.67
GROSS SALES 17993.54 13754.74
Profit / (Loss) before Tax,
Exceptional items 384.17 (265.00)
Add : Exceptional items - 180.21
Profit / (Loss) before Taxation 384.17 (84.79)
Less : Current Tax 54.07 4.03
MAT Credit Entitlement (48.83) (4.03)
Deferred Tax Credit (Net) (154.74) (149.50) (228.62) (228.62)
NET PROFIT / (LOSS) 533.67 143.83
Add : Transfer from General
Reserve - 157.79
Available for appropriation 533.67 301.62
Appropriation:
General Reserve Nil Nil
Proposed Dividend 62.60 62.60
Corporate Tax on Dividend 10.15 10.40
Balance carried forward 460.92 288.62
533.67 301.62
OPERATIONS:
During the year under report, the Company operated 1.31 lakh spindles
in Palladam and Kovilpatti units as follows:-
Fig. in lakhs
i) -Palladam : 0.68
ii) Kovilpatti : 0.63
Total : 1.31
The Company was able to marginally increase its utilization levels in
both the units in spite of encountering power cuts and power
interruptions. Thanks to a phenomenal increase in yarn prices in the
last quarter of the year, the Company could record a turnover of around
Rs. 180 Crores - an increase of over 30% over the previous year.
The Company continued to outsource fabrics and export gainfully. During
the year, fabric exports were to the order of Rs.15 Crores against
Rs.6.5 Crores recorded during the preceding year. Overall the Company
could export around Rs.21 Crores of yarn and fabrics during the year as
against Rs.10 Crores done in 2009-10.
The Company hopes to export around Rs.25 Crores in the current year.
CURRENT INDUSTRIAL TREND AND FUTURE PROSPECTS
The Textile industry especially spinning segment saw a prosperous year
in 2010-11. Unfortunately this euphoria appears to have been short
lived and that the industry is in the midst of a severe crisis not
witnessed during the last 20 years.
Raw material prices especially Cotton scaled new heights at the wrong
time of the season due to mad rush for exports without taking care of
the needs of the domestic segment. Repeated representations made by the
industry not to allow Cotton exports at that point of time went
unheeded. As usual speculators and traders made a killing by raising
the prices to unprecedented levels - a rise of over 100% to 150% of
last year price levels. Domestic segment which was forced to buy Cotton
at these prices could increase their prices both in yarn and fabrics to
unprecedented levels. Yarn and grey fabric prices reached an all time
high between January'11 and March'11. No doubt, Mills made phenomenal
profits in these months. However this trend could not be sustained.
The unprecedented rise in Cotton yarn prices in domestic segment forced
the Government to ban Cotton yarn exports. Though this move had the
desired result in bringing down the yarn prices, yet the consequences
are far reaching. Sudden ban on Cotton yarn exports had resulted in
foreign buyers diverting their procurement sources to other countries.
Within the country, yarn stocks started accumulating and domestic
segment is flooded with yarn. Yam prices began falling. The present
scenario is that Raw Cotton prices had dropped down by over 40% over
its peak level while yarn prices had gone down by over 25%. But there
is no normal movement.
Both yam and cotton markets have become panicky and that there is more
of instability. Sentiments all over is depressed and practically
movement of yarn has come to a halt.
Every segment in Textile sector is saddled with serious problem -
Cotton trade is unable to enforce the contracts concluded at peak
prices while yarn prices had tumbled down both at domestic and
international levels. Stocks started accumulating. High inventory
levels are forcing the industry to cut down production. Inflationary
pressures are not allowing cost of production to come down and
substantial erosion in operations is seriously affecting the working of
the units.
The first half of 2011-12 is going to be a bad period for the spinning
mills. Your Company is not going to be an exception to this trend.
OUTLOOK
Domestic market offers huge demand potential. Export markets are also
promising.
The industry needs to be cost effective and cost efficient to take
advantage of the huge potential available.
Unfortunately, policies pursued by Government in allowing export of
cotton and banning of cotton yarn exports - both at wrong times had
spelt untold miseries to the industry. In their anxiety to protect one
or the other segment in the industry, Government unwittingly had caused
serious financial problems to the Textile industry as a whole. It will
take considerable time to overcome the sufferings which the industry is
facing.
DIVIDEND
Your directors have recommended a dividend of 9% for the year under
report.
DIRECTORS
In accordance with the Companies Act, 1956, and the Articles of
Association, Sri R. Santharam and Sri V.S. Velayutham, Directors retire
by rotation at the ensuing Annual General Meeting and being eligible
offer themselves for re-appointment.
DIRECTORS' RESPONSIBILITY STATEMENT
In compliance of Section 217(2AA) of the Companies Act, 1956, the
Directors state that:
i. In the preparation of Profit and Loss Account for the period ended
31st March 2011 and the Balance Sheet as on that date all the
applicable accounting standards have been followed.
ii. Accounting Policies, that are reasonable and prudent, have been
selected and applied consistently 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 the profit of the Company for the year ended 31st March 2011.
iii. The accounting records in accordance with the provisions of the
Companies Act, 1956 and for safeguarding the assets of the Company as
also for preventing and detecting fraud and other irregularities, have
been properly maintained and
iv. The Profit and Loss Account and Balance Sheet have been prepared on
a going concern basis.
CORPORATE GOVERNANCE
Pursuant to clause 49 of the listing agreement with the stock
exchanges, Management Discussion and Analysis Report, Report on
Corporate Governance and Auditors Certificate regarding compliance of
conditions of Corporate Governance are made part of the Annual Report.
FIXED DEPOSIT
The deposit amount of Rs. 15,05,000/- claimed remains unpaid due to
dispute between the legal heirs and is pending before the Principal
District Court at Coimbatore. No other amount remains unclaimed as on
31st March 2011.
AUDITORS
The Company's Auditor M/s. Subbachar & Srinivasan are to retire at the
ensuing Annual General Meeting.
M/s. Subbachar fit Srinivasan, Chartered Accountants are eligible for
re-appointment.
GENERAL
The Company's Assets have been adequately insured.
The particulars required to be furnished under the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988 are set out separately and form part of this Report.
During the year under review, there was no employee drawing
remuneration in excess of the amount prescribed under section 217 2(A)
of the Companies Act, 1956.
ACKNOWLEDGEMENT
The Board acknowledges the continued assistance from the Bankers,
Cotton, Yarn and Cloth Dealers of the Company, Shareholders and
Depositors and appreciate the valuable services rendered by the
employees at all levels.
May the Goddess Lakshmi continue to shower her choicest Blessings for
the prosperity of the Company in the years to come.
By Order of the Board
For THE LAKSHMI MILLS CO. LTD.
S. PATHY
Chairman and Managing Director
Coimbatore
29th July 2011
Mar 31, 2010
The Directors have pleasure in presenting the Centenary year Annual
Report together with the audited accounts of the Company for the year
ended 31.03.2010.
WORKING RESULTS 31.03.2010 31.03.2009
No. of days worked 356 356
(Rs. in lakhs)
Sales 13377.07 10397.76
Other income 330.05 652.85
GROSS SALES 13707.12 11050.61
Profit / (Loss) before Tax,
Exceptional items (265.00) (619.44)
Add : Exceptional items 180.21 (120.72)
Profit / (Loss) before Taxation (84.79) (740.16)
Less : Excess depreciation of
earlier year withdrawn _ 84.82
Profit / (Loss) before Taxation (84.79) (655.34)
Less : Excess tax provision of
earlier year reversed - (56.13)
Deferred Tax Credit (Net) (228.62) (422.28)
Fringe Benefit Tax - 9.00 (469.41)
NET PROFIT / (LOSS) : 143.83 (185.93)
Add : Transfer from General Reserve 157.79 226.62
Available for appropriation 301.62 40.69
Appropriation:
General Reserve Nil Nil
Proposed Dividend 62.60 34.78
Corporate Tax on Dividend 10.40 5.91
Balance carried forward 228.62 -
301.62 40.69
OPERATIONS:
During the year under report, the Company operated 1.29 lac spindles in
Palladam and Kovilpatti units as follows:-
Fig. in lakhs
i) Palladam : 0.66
ii) Kovilpatti : 0.63
Total : 1.29
In spite of restrictions and control on the usage of grid power, thanks
to the arrangement made with M/s.Sai Regency Power Corporation Pvt. Ltd
for supply of gas power and also by operating captive diesel generating
sets, the Company was able to achieve better production. The Company
could record a turnover of around Rs.137 Crore - an increase of 25%
over the previous year due to improved utilization of resources and better
market conditions in the last quarter.
The Company has decided to give up the weaving activities and is in the
process of disposing of weaving machines. Though the Company has given
up the weaving activities, it continues to export cloth profitably by
outsourcing. During the year, the company could achieve cloth sales of
Rs.8.20 Crore including a export turnover of Rs.6.50 Crore. The Company
is targeting around Rs.12 Crore of cloth sales in the current year.
The Company has exported Yarn and Cloth valued at Rs. 10.00 Crore
during the year. It hopes to achieve around Rs. 15.00 Crore in current
year.
CURRENT INDUSTRIAL TREND AND FUTURE PROSPECTS
The Textile Industry especially the spinning segment started looking up
since the last quarter of the year under report, thanks to revival of
demand from overseas markets. Cotton yarn prices touched record high
during March and April 2010 compelling the Government to step in to
regulate the prices of Yarn and Cotton as well as regulating export of
Cotton and Yarn. Initially Government banned the-export of Cotton but
later on introduced regulatory measures in regard to Cotton exports.
Likewise export of Cotton yarn has been brought under registration
system. Incentives given for Cotton yarn exports in the form of DEPB,
Duty draw back etc. have been withdrawn. However the fact remains that
the demand for Cotton yarn appears outstripping supply. Besides, there
is lurking fear (which looks genuine) that required quantities of
quality Cotton might not be available to the industry till the new crop
arrives in October / November 2010. The Industry therefore feels that
the Cotton prices might still go up in the next two to three months and
that the spinning mills might have to bear the burden of high prices of
cotton. In this context, scope for bringing down the Cotton yarn prices
by regulatory measures by Government might not be effective.
The next four months looks to be more unpredictable and that only
demand and supply is bound to influence the price level and that
regulatory measures might not be effective.
Further costs of inputs are becoming increasingly high particularly raw
materials, labour and power. There is very little control to manage
costs in raw materials and power front. Only cost in labour can be
controlled if productivity is improved. Textile Industry needs to
improve labour productivity to become competitive in the global market.
The present levels of productivity are not at all adequate and urgent
steps are needed in this direction.
Your Company is therefore exploring all possibilities to improve labour
productivity to be cost competitive.
The Company has resolved to go in for Property Development project with
the land available in Coimbatore unit. Plans in this direction are
being initiated.
30 employees opted for VRS during the year 2009-10. The number of
employees on roll as on 31.03.10 were 2142 as against 1968 on 31.03.09.
Due to better utilization of resources, the number of workers on roll
had slightly gone up during the year. Efforts are being made to bring
down this number to around 1900.
OUTLOOK
Domestic market offers huge demand potential in view of second largest
populated country with largest young population, bubbling economy and
expected double digit growth rate. India has second biggest world crop
in Cotton. It has the skills to produce World Class cotton yarn for
exports and also a reservoir of technical personnel to manage the
units.
India has to look to control its costs to become cost competitive in
world market. Policies of Government in the Raw material, finance,
power and labour fronts need to be oriented so that the Industry is
facilitated to achieve this.
DIVIDEND
Your directors have recommended a dividend of 9% for the year out of
past reserves.
DIRECTORS
Dr. D. Jayavarthanavelu, Director passed away suddenly on 11.06.2010.
The Board places on record its sincere appreciation of his valuable
services rendered during the tenure of his office as Director of the
Company.
Justice Sri. G. Ramanujam (Retd.), Director who is liable to retire by
rotation at the ensuing Annual General Meeting has not opted for
re-election due to his age. The Board has placed on record the
valuable contributions made by him during his tenure as a Director. The
Board has resolved not to fill the vacancy so caused at this time.
In accordance with the Companies Act, 1956 and the Articles of
Association Sri V. Jagannathan and Sri D. Rajendran Directors retire by
rotation at the ensuing Annual General Meeting and being eligible offer
themselves for re-appointment.
Sri. Satish Ajmera, who was on the Board as a nominee of LIC resigned
with effect from 30.03.2010. He has been co-opted as Additional
Director on the Board on 26.05.2010 and will be holding office until
the ensuing Annual General Meeting.
Sri. Sanjay Jayavarthanavelu was co-opted as Additional Director on the
Board on 30-07-2010 and will be holding office until the ensuing Annual
General Meeting.
Notices have been received from members proposing the appointment of
Sri Satish Ajmera and Sri Sanjay Jayavarthanavelu as Directors.
Necessary resolutions are placed before the Annual General Meeting for
their appointments.
Sri S. Pathys tenure of appointment as Managing Director expires on
23.04.2011. Resolution proposing his re-appointment as Chairman and
Managing Director is placed at the ensuing Annual General Meeting.
Sri Aditya Krishna Pathy has been appointed as Whole Time Director on
30.07.2010. Resolution proposing his appointment as Whole Time Director
is placed at the ensuing Annual General Meeting.
DIRECTORS RESPONSIBILITY STATEMENT
In compliance of Section 217(2AA) of the Companies Act, 1956, the
Directors state that:
i. In the preparation of Profit and Loss Account for the period ended
31st March 2010 and the Balance Sheet as on that date all the
applicable accounting standards have been followed.
ii. Accounting Policies, that are reasonable and prudent, have been
selected and applied consistently 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 the profit of the Company for the year ended 31st March 2010.
iii. The accounting records in accordance with the provisions of the
Companies Act, 1956 and for safeguarding the assets of the Company as
also for preventing and detecting fraud and other irregularities, have
been properly maintained and
iv. The Profit and Loss Account and Balance Sheet have been prepared on
a going concern basis.
CORPORATE GOVERNANCE
Pursuant to clause 49 of the listing agreement with the stock
exchanges, Management Discussion and Analysis Report, Report on
Corporate Governance and Auditors Certificate regarding compliance of
conditions of Corporate Governance are made part of the Annual Report.
FIXED DEPOSIT
There is a disputed claim since 11.09.2000 on the deposit
amount of Rs. 15,05,000/- between the legal heirs and
is pending before the Principal District Court at
Coimbatore. No other amount remains unclaimed as on 31st March 2010.
AUDITORS
The Companys Auditors M/s.Subbachar & Srinivasan and M/s.Fraser & Ross
are to retire at the ensuing Annual General Meeting.
M/s.Fraser & Ross expressed their inability to accept the
re-appointment for the year 2010-2011 due to restriction on the number
of audits that can be accepted by them. The Board placed on record the
valuable services rendered by M/s.Fraser and Ross during the tenure of
their office as Auditors of the Company.
M/s.Subbachar & Srinivasan, Chartered Accountants are eligible for
re-appointment.
GENERAL
The Companys Assets have been adequately insured.
The particulars required to be furnished under the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules
1988 are set out separately and form part of this Report.
During the year under review, there was no employee drawing
remuneration in excess of the amount prescribed under section 217 2(A)
of the Companies Act, 1956.
ACKNOWLEDGEMENT
The Board acknowledges the continued assistance from the Bankers,
Cotton, Yarn and Cloth Dealers of the Company, Shareholders and
Depositors and appreciate the valuable services rendered by the
employees at all levels.
May the Goddess Lakshmi continue to shower her choicest Blessings for
the prosperity of the Company in the years to come.
By Order of the Board
For THE LAKSHMI MILLS CO. LTD.
Coimbatore s. PATHY
30th July 2010 Chairman and Managing Director