Home  »  Company  »  Lakshmi Mill Co.  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of Lakshmi Mills Company Ltd.

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 year’s 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.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(3)(c) of the Companies Act, 2013, with respect to the Directors’ 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 Directors’ 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 arm’s length pricing basis. Since there are no transactions which are not on arm’s 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 Company’s 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 Company’s 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 Sanjay Jayavarthanavelu, Director is liable to retire by rotation at the ensuing Annual General Meeting (“AGM”) 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 auditors’ 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 Directors’ 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

DIRECTORS’ 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 year’s 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 Directors’ 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 Directors’ 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 arm’s length pricing basis. Since there are no transactions which are not on arm’s 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 Company’s 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 Company’s 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 (“AGM”) 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 auditors’ 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 Directors’ 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 year’s 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 year’s 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 Directors’ 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 arm’s length pricing basis. Since there are no transactions which are not on arm’s 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 Company’s 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 Company’s 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 (“AGM”) 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 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 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 Directors’ 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

Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X