Mar 31, 2015
The Directors have the pleasure in presenting the 27th Annual Report
along with the Audited financial statements of the Company for the
financial year ended on 31st March, 2015:
FINANCIAL RESULTS :
Highlights of financial results (Stand-alone & Consolidated) for the
year were as under:
(Rs. in Crores)
2014-15 2013-14 2014-15 2013-14
(12
months) (9
months) (12
months) (9 months)
Stand
Alone Stand
Alone Consoli
dated Consoli
dated
Sales and other income 601.04 753.75 738.76 880.08
Operating profit before
interest, depreciation and (222.29) (177.3) (221.03) 177.76
Less:
Interest and other
financial charges 171.01 196.70 172.46 199.48
Depreciation 110.78 78.47 111.71 79.01
Extraordinary items
Exceptional Items 430.22 171.68 (424.47) (168.33)
Loss before tax (934.30) (624.15) (929.67) (624.58)
Less: Income Tax
(including deferred tax) - 0.59 0.08
Loss after tax (934.30) (624.15) (930.26) (624.66)
Proposed dividend - - - -
Dividend tax - - - -
Balance carried to
Balance Sheet (934.30) (624.15) (930.26) (624.66)
PERFORMANCE:
Performance Highlights - Stand-alone :
Your Directors wish to inform you that during the year 2014-15, Company
faced lot of problems on account of financial stress hence operations
of the units were restricted between 25 to 30% of its installed
capacity.
During 2014-15, the Company recorded sales and operating income at
Rs.601.04 crores as compared to Rs. 753.76 crores in 2013-14 (9
months). The profit before tax was Rs. (934.30) crores in 2014-15 (12
months) as compared to Rs. (624.15) crores in 2013-14 (9 months). The
profit/loss after tax was Rs. (934.30) crores in 2014-15 (12 months) as
compared to Rs. (624.15) crores in 2013-14(9 months).
Performance Highlights - Consolidated :
During 2014-15, the Company recorded sales and operating income at Rs.
738.76 crores as compared to Rs. 880.08 in 2013- 14 (9 months). The
profit before tax was Rs. (929.67) crores in 2014-15 as compared to Rs.
(624.58) crores in 2013-14 (9 months). The profit/loss after tax was
Rs. (930.26) crores in 2014-15 as compared to Rs. (624.66) in 2013-14
(9 months).
JOB WORK:
The company is in stringent working capital situation and hence the
company is currently unable to source yarn for its own production.
(Yarn is the prime input both in quantitative & price terms for any
product in the textile sector). Accordingly, during the year, company
has earned a portion of its revenue from jobwork. Jobwork has been done
for world renowned suppliers of denims, sheeting & terry towel who are
inclined to increase their jobwork in the company in view of imported
machinery, state of art infrastructure and superior quality product.
Jobwork has enabled the company to reduce its cash losses & increase
its capacity utilization. The company expects increase in revenue
contribution from jobwork in future adding to the bottom line.
PRESENT STATUS OF CORPORATE DEBT RESTRUCTURING PACKAGE (CDR ) OF M/S
SHRI LAKSHMI COTSYN LTD.:
The CDR package filed by the company was approved by CDR Cell in its
meeting dated 24.06.2013 and LOA dated 28.06.2013 was issued. In
compliance of the LOA, Master Restructuring Agreement (MRA) was signed
on 29.06.2013.
As per the terms of Letter of Approval (LOA), the Company has brought
promoters' contribution to the tune of Rs. 93.90 crore within the
prescribed time of 120 days from signing of Master Restructuring
Agreement (MRA). Besides all other terms of LOA relating to perfection
of security were also complied with by the Company except the
conversion of promoters contribution into equity and pledging thereof
to CFSL This could not be possible due to the Non receipt of approval
of Stock exchange an account of selling of promoters shares by IFCI.
At present, the company is operating through its TRA accounts with
Central Bank for running its day to day operations. The consortium
members banks at their Joint Lenders Meeting (JLM) held on 16th June
2015 have decided to settle the accounts under One Time Settlement
(OTS) and accordingly directed the company to search PE investor.
The company is continuously in dialogue with PE investors and also
appointed NITRA (Northern India Textile Research Association) for TEV
study and Valuation so that the sustainability of debt as well as the
maximum turnover and EBIDTA can be achieved.
In the CDR EG Meeting held on 26th August 2015, Central Bank of India
has submitted its review note and shown willingness for exiting from
CDR. The Company has presented its objection and repercussions on the
Company as well as on the Banks on exiting from CDR.
The CDR EG has asked the opinion from the other Banks on this issue
which shall be discussed at next CDR EG.
PRESENT STATUS OF THE BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION
(BIFR):
The Company is registered under the Board for Industrial and Financial
Reconstruction in terms of the provisions of section 15(1) of Sick
Industrial Companies (Special Provisions) Act 1985 vide registration
number 45/2014. The Board at its first date of hearing held on
06.07.2015 directed the banks to file their objections within 4 weeks
time. The next date of hearing has been fixed on 01.10.2015. The
Company is taking necessary steps to ensure the necessary compliances
with the requirements of the statute.
WINDING UP PETITION AGAINST M/S SHRI LAKSHMI COTSYN LTD.:
Few cases of Winding up filed by the following parties with the
Allahabad High Court are stayed due to registration of the company with
BIFR:
1- Ketan Kantilal Shah (FCCB Bond Holder) amount Rs. 2.8 million.
2- Satya Ram Agro Industries Vs. SLCL amount Rs. 16.91 lacs.
3- Satya Ram Agro Industries Vs. SLDSL amount Rs. 3.57 lacs.
4- Ambika Corporation amount Rs. 1.42 crore.
5- Soil & Environment Industries Pvt. Ltd. Rs. 9.34 lacs
PETITION BEFORE DEBT RECOVERY TRIBUNAL (DRT) BY IFCI AGAINST M/S SHRI
LAKSHMI COTSYN LTD.: Following parties have filed the case against the
Company before DRT Allahabad & New Delhi:
1- IFCI Ltd. Recovery Suit for an amount of Rs. 9.91crore at DRT, New
Delhi.
2- UCO Bank has also filed recovery suit at DRT Allahabad.
EXPORTS
Despite all adverse situations, the Company recorded an export of Rs
218.82 crores in 2014-15 as against Rs. 220.63 crores in 2013-14 (9
Months) on Stand-alone basis.
On Consolidated basis, the Company recorded an export of Rs 219.64
crores in 2014-15 as against Rs. 220.63 crores in 2013- 14 (9 Months).
RECOGNITIONS :
The company is registered with the following organisations:
1. Director General of Quality Assurance (DGQA)
2. Director General of Suppliers & Disposals (DGS&D)
3. Ordnance Board Group of Factories.
4. D.M.S.R.D.E.
5. Trade Mark Agency having brand names STAR TRACK, DYFI, HEBE
6. Office of the Textile Commissioner as a Composite Mill.
7. Bureau of Indian Standards (BIS)
8. Department of Industrial Development, Ministry of Industry.
Company is duly registered with Export Promotional Council and Posses
valid Import Export code and RCMC issued by Federation of Indian Export
Organisation.
Further based upon past performance of exports, Company is also
registered with Ministry of Commerce and Industry as STAR EXPORT HOUSE.
WHOLLY-OWNED SUBSIDIARY COMPANIES:
The Company has three subsidiary companies, details of which are as
under:
M/s SLCL Overseas FZC, Sharjah U.A.E
The Company is a 100% subsidiary of SLCL, which has been set up at
Sharjah Airport International Free Zone, Sharjah, and UAE. It is
engaged in trading of 100% Polyester fabric material, garments and
alike products and also exporting to other countries, besides trading
in Sharjah itself.
M/S SLCL Overseas FZC, Sharjah U.A.E., a wholly-owned subsidiary,
recorded a turnover of Rs. 124.53 Crores in 2014-15 as compared with
Rs. 104.33 Crores in the last year. During the year, the Company has
earned a profit of Rs. 3.12 Crores in comparison with Rs. 2.31 Crores
in the previous year.
M/s Shri Lakshmi Defence Solutions Ltd.
SLDSL manufactures bullet proof jacket, bullet proof helmet, armored
vehicles, bullet proof morchas and other ballistic products for defense
and homeland security. The company was incorporated on 19.12.2006 and
has started functioning recently. The Company has introduced a new
range of indigenously designed models based on advance armouring
technology for armed and police forces namely Dhruv, Drona and Viper.
These Vehicles are equipped to help the security forces to encounter
ever increasing security threats from naxalities groups and other
terrorists' activities.
During 2014-15, the Company recorded sales of Rs. 11.73 Crores as
compared with Rs. 21.63 Crores in 2013-14 (9 months), thus registered a
decline in sales. The Company has incurred net loss of Rs. 4.82 crores
in 2014-15 as compared to a net loss of Rs.1.49 crores in 2013-14 (9
months).
Registered supplier for defence products
Approved Supplier Registered with
Indian Army, Navy, Air Force,
Ordinance Factories Directorate General of Supplies & Disposal
All central paramilitary
State Police forces Director General of Quality Assurance
Indian Railways Forces Ministry of Defence (Navy)
Defence Material Stores R&D Est
Federation of Indian Export Organization
RDSO (Indian Railways)
Indian Postal Department
M/s Synergy Global Home Inc.
M/s Synergy Global Home Inc., is a wholly-owned subsidiary and was
incorporated at U.S.A.; which deals in trading of home furnishing
items.
During the year, M/s Synergy Global Home Inc., U.S.A has achieved nil
revenue as compared with Rs. 0.42 Crores in 2013-14 (9 months).
However, the company, suffered a loss of Rs. 0.01 lakhs in 2014-15 as
compared with a previous year's loss of Rs. 8.54 Lacs.
EXEMPTION UNDER SECTION 129 OF THE COMPANIES ACT, 2013 FOR NOT
ATTACHING THE BALANCE SHEET OF THE SUBSIDIARY COMPANIES:
In view of the directions issued by the Ministry vide General Circular
No: 2 /2011, dated 08.02.2011 in regard to exemption under Section 129
of the Companies Act, 2013 for not attaching the balance sheet of the
subsidiary concerned; therefore, Board of Directors of your Company
have given their consent for not attaching the balance sheet of the
subsidiary concerned;
The Annual Accounts of the subsidiary companies shall also be kept for
inspection by any shareholders in the head office of the holding
company and of the subsidiary companies concerned. The Company shall
furnish a hard copy of details of accounts of subsidiaries to any
shareholder on demand.
STATUS OF ONGOING EXPANSION OF M/S SHRI LAKSHMI COTSYN LTD.:
Due to part disbursement of the priority loan amounting Rs. 34 crores
(approx.) out of Rs. 65.40 crores, the projects namely Technical
Textiles, Spinning and Yarn Dyed Shirting's projects could not be fully
commissioned.
DIRECTORS:
Changes in Directors and Key Managerial Personnel
During the period, Mr. Dileep Bajaj and Mr. R.K. Garg have resigned
from the Directorship of the Company w.e.f. 14.08.2014. The Board
places on record their appreciation of the valuable advice and guidance
given by them while they were Directors of the Company.
Pursuant to the provisions of Section 149 (10) of Companies Act 2013,
an independent director shall hold office for a term up to five
consecutive years on the Board of a Company, but shall be eligible for
reappointment for next five years on passing of a special resolution by
the Company .
Therefore Shri G.N. Mathur, independent director of the company who has
completed the term of consecutive 5 years, is proposed to be
re-appointed as an independent director for a further term of five
consecutive years subject to the approval of the Shareholders by way of
special resolution.
Declaration by an Independent Director (s) & re- appointment, if any
A declaration by an Independent Director(s) that he/ they meet the
criteria of independence as provided in sub-section (6) of Section 149
of the Companies Act, 2013 has been obtained.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
A calendar of Meetings is prepared and circulated in advance to the
Directors.
During the year five Board Meetings and three Audit Committee Meetings
were convened and held, the details of which are given in the Corporate
Governance Report. However, the intervening gap between the Meetings
was within the period prescribed under the Companies Act, 2013.
AUDIT COMMITTEE
The composition of an Audit Committee and details of meeting are stated
in the Corporate Governance Report
Details of establishment of vigil mechanism for directors and employees
The vigil mechanism for directors and employees to report genuine
concerns has been established as per the provisions of Section 177(9)
read with Rule 7 of the Companies (Meeting of Board and its Powers)
Rules, 2014 for directors and employees to report their genuine
concerns or grievances.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
Details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Companies Act, 2013 are given in the
notes to the Financial Statements.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the
financial year were on an arm's length basis and were in the ordinary
course of business. There are no materially significant related party
transactions made by the Company with Promoters, Directors, Key
Managerial Personnel or other designated persons which may have a
potential conflict with the interest of the Company at large.
All Related Party Transactions are placed before the Audit Committee as
also the Board for approval. Prior omnibus approval of the Audit
Committee is obtained on a quarterly basis for the transactions which
are of a foreseen and repetitive nature. None of the Directors has any
pecuniary relationships or transactions vis-a-vis the Company.
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 Finance, Audit Grievance,
Nomination & Remuneration and Compliance Committees etc.. The
Management evaluates the performance of committees and its functioning
at regular intervals.
REMUNERATION & NOMINATION POLICY
The Board has framed a policy which lays down the framework in relation
to selection and appointment of Directors, Senior Management of the
Company and in relation to their remuneration.
RISK MANAGEMENT POLICY
A statement indicating development and implementation of a risk
management policy for the Company are set out in the corporate
governance report forming part of the Board report.
SHARE CAPITAL
During the Financial Year 2014-15, the Company has not issued any
equity shares, so there has been no change in share capital.
DIVIDEND
Since the Company and its subsidiaries have incurred the loss, your
Directors, have not recommended any dividend for the year ended on 31st
March, 2015.
AUDITORS
M/s Pradeep & Associates, Chartered Accountants, Auditors of the
Company, retire at the conclusion of the ensuing Annual General Meeting
and, being eligible, offer themselves for reappointment. The
observations of Auditors in their report read with notes to the
accounts are self-explanatory and do not call for further explanation.
COST AUDITOR
The Central Government's Cost Auditor order specifies an audit of cost
accounting records of the textile Company every year. This is
applicable to the products manufactured by the Company. The Board of
Directors, subject to the approval of the Central Government, appointed
Mr. A.K. Srivastava, Cost Accountants, Kanpur, to carry out cost audit
for the current year.
INTERNAL AUDITOR
The Company appointed a firm of Chartered Accountants M/s Srivastava S
and Company of Kanpur as internal auditors to review the internal
control systems of the Company and report thereon. The Report of the
Internal Auditors is reviewed by the Audit Committee.
ENVIRONMENTAL SUSTAINABILITY
With an increasing concern towards ecology and global warming,
consumers are favoring organic and eco-friendly textile products.
Therefore, the demand of organic cotton is accelerating with brands and
retailers continuing to implement long-term commitment to increase
their use of organic cotton. Your Company also continues to pursue its
mission for environmental excellence and constantly explores
opportunities to improve ecology and the environment.
RESEARCH AND DEVELOPMENT
The company posses in-house R&D facilities which results in cost
saving. The continuous R&D efforts enabled the company to product
innovation.
Company's R&D strategy is anchored on the development and speedy
commercialization of globally competitive products, processes and
technologies through best-in-class research interventions backed by
world-class infrastructure. It has a strong R&D cell for advanced
testing laboratories.
INSURANCE
All the insurable assets of your Company including inventories,
building, plant and machinery were adequately insured.
SECRETARIAL AUDIT REPORT FOR THE YEAR 2014-15:
Pursuant to the provisions of section 204(1) of the Companies Act 2013
and The Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company has appointed Mr. Akhilesh Singh
(Membership no. A25789) Company Secretary in Practice, to undertake the
Secretarial Audit of the Company. The Report of the Secretarial Audit
Report is annexed herewith as "Annexure A".
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS FOR
THE YEAR 2014-15:
The Corporate Governance and Management Discussion & Analysis Report,
which form an integral part of this Report, forms part of this Report
and is annexed in the Annual Report, together with the Certificate from
the auditors of the Company regarding compliance with the requirements
of Corporate Governance as stipulated in Clause 49 of the Listing
Agreement.
GREEN INITIATIVE FOR PAPER LESS COMMUNICATIONS:
In accordance with MCA's recent circulars bearing no.17/2011 dated
21.04.2011 and 18/2011 dated 29.04.2011, your company can mail
documents and various other notices (including notice calling Annual
General Meeting, Audited Financial Statements, Directors' Report,
Auditor's Report etc) to the shareholders through electronic mode to
the registered e-mail addresses of shareholders.
STATUTORY INFORMATION:
(A) Particulars of employees
The industrial relations throughout the year under review remained
cordial. As none of the employees of the Company was in receipt of
remuneration in excess of the limits prescribed, hence the particulars
of employees under the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, are not given in the report.
(B) Conservation of energy, technology absorption and foreign exchange
earnings and outgo Particulars with respect to conservation of energy,
among others, as required under Section 134(3)clause (m) of the
Companies Act, 2013 read with the Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules, 1988 are set out in the
Annexure forming part of this Report.
(C) Directors' responsibility statement
As required under clause (c) of sub-section (3) of Section 134 of the
Companies Act, 2013, your Directors confirm that:
1. In the preparation of the annual accounts, the applicable
accounting standards were followed and there are no material
departures;
2. The Directors selected such accounting policies and applied them
consistently and made judgments' and estimates that were 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 or loss
of the Company for the period;
3. The Directors took proper and sufficient care to maintain adequate
accounting records in accordance with the provisions of this Act for
safeguarding the assets of the Company and for preventing and detecting
fraud and other irregularities.
4. The Directors prepared the annual accounts on a going concern
basis.
5. The Directors had laid down internal financial controls to be
followed by the company and that such internal financial controls are
adequate and were operating effectively.
6. The directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
STATUTORY DISCLOSURES
None of the Directors are disqualified under the provisions of
Section164 (2) of the Companies Act, 2013. The Directors have made the
requisite disclosures, as required under the provisions of the
Companies Act, 2013 and Clause 49 of the Listing Agreement.
Extract of the Annual Return :
The extract of the annual return in Form No. MGT - 9 shall form part of
the Board's report.. The details forming part of the extract of the
Annual Return in form MGT-9 is annexed herewith as " Annexure C".
Corporate Social Responsibility (CSR)
The disclosures under Rule 9 of Companies (Corporate Social
Responsibility Policy) Rules, 2014 is not required to be made since
clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of
the Companies (Corporate Social Responsibility) Rules, 2014 is not
applicable to the Company. However, the Company undertakes numerous
initiatives towards the welfare of employees, society, environment etc.
ACKNOWLEDGEMENTS
Your Directors wish to place on record their appreciation of the timely
support provided by the Company's bankers, CDR cell officials, all the
vendors and tie-up entities and the dedication and commitment of the
employees at all levels. Your Directors convey their grateful thanks to
all the Government authorities and shareholders for their continued and
unstinted assistance, co-operation and patronage.
We also take this opportunity to thank all the valued customers who
have appreciated our products and have patronized them.
For and on behalf of the Board
Registered office:
19/X-1, Krishna Puram sd/- sd/-
G.T. Road, Kanpur Dr M P Agarwal Devesh Gupta
Date : 12th August, 2015 Chairman and
Managing Director Deputy
Managing
Director
Mar 31, 2014
Dear Members,
The Directors have the pleasure in presenting the 26th Annual Report
along with the Audited financial statements of the Company for the nine
months financial year ended on 31st March, 2014 :
FINANCIAL RESULTS:
Highlights of financial result (Stand-alone & Consolidated) for the
year were as under:
(Rs. in Crores)
2013-14 2012-13 2013-14 2012-13
(9 months) (12 months) (9 months) (12 months)
Particulars Stand Alone Stand Alon Consolidated Consolidated
Sales and other
income 753.76 1767.27 880.08 1946.54
Operating profit
before (177.29) 94.60 177.76 91.55
interest, depreciation
and tax
Less:
Interest and other
financial 196.71 354.49 199.48 356.73
charges
Depreciation 78.47 100.89 79.01 101.70
Extraordinary items - - (168.33) (0.81)
Exceptional Items 171.68 - - -
Profit/ Loss before
tax (624.15) (360.78) (624.58) (367.69)
Less: Income Tax
(including - 47.85 0.09 47.85
deferred tax)
Profit/ Loss after
tax (624.15) (408.63) (624.67) (415.54)
Proposed dividend - - - -
Dividend tax - - - -
Balance carried to
balance (624.15) (408.63) (624.67) (415.54)
sheet
PERFORMANCE:
Performance Highlights - Stand-alone:
Your Directors wish to inform you that during entire period of 9
months, Company faced lot of problems on account of financial stress
hence operations of the units were restricted between 25 to 40% of its
installed capacity.
During 2013-14, the Company recorded sales and operating income at Rs.
753.76 crore in 9 months Accounting period as compared to Rs. 1767.27
in 2012-13 (12 months). The profit before tax was Rs. (624.15) crore in
2013-14 (9 months) as compared to Rs. (360.78) crore in 2012-13 (12
months). The profit/loss after tax was Rs. (624.15) crore in 2013-14(9
months) as compared to Rs. (408.63) crore in 2012-13(12 months).
However the difficult external environment had a direct bearing on the
Company''s financial results.
Performance Highlights - Consolidated:
During 2013-14, the Company recorded sales and operating income at Rs.
880.08 crores in 9 months Accounting period as compared to Rs. 1946.54
in 2012-13 (12 months). The profit/ loss before tax stood at Rs.
(624.58) crores in 2013-14 (9 months) as compared to Rs. (367.69) in
2012-13 (12 months). The profit/loss after tax was Rs. (624.67) crores
in 2013-14(9 months) as compared to Rs. (415.54) in 2012-13(12 months).
IMPLEMENTATION OF CORPORATE DEBT RESTRUCTURING PACKAGE OF M/S SHRI
LAKSHMI COTSYN LTD.:
The CDR package filed by the company was approved by CDR Cell in its
meeting dated 24.06.2013 and LOA dated 28.06.2013 was issued. In
compliance of the LOA, Master Restructuring Agreement (MRA) was signed
on 29.06.2013. As per TEV report submitted by CFSL, subsidiary of
Central Bank of India, following assumptions were taken for viability
of the company: -
a. Company will receive Rs. 166 Crore on account of TUFS subsidy by
30.06.2013 and no additional working capital was demanded from the
Lenders in the package.
b. CFSL finalized that company need a capex of Rs. 65.40 Crore for
installation of balancing equipments mainly in their Technical Textile
plant and Spinning plant to become the projects operational which would
be available to the company by 01.08.2013, so that all equipments
required to revive the operations can be installed upto 31st Jan'' 2014
& start working in 4-5 months to improve the operations mainly in
Technical Textile unit and Spinning unit. Accordingly company requested
all the Lenders to release their share to the company. The Lenders
requested to the company to bring the promoter''s contribution first
then to release share of priority loan. After induction of promoter''s
contribution, company again requested to disburse the loan but banks
linked the disbursement with the matter of perfection of security,
though there was no such condition given in LOA. In view of
difficulties faced by the company, it was decided in Lenders meeting
dated 17.01.2014 that company should be allowed prorata share of
priority loan based on value of the properties required to be mortgaged
and actually mortgaged. Accordingly, Central Bank of India requested
all the Banks vide their letter no. CFB/DEL/2013-14/1270 dated
03.02.2014 to release 70% loan to the company i.e. 45.80 Crore.
Inspite of our regular follow up, Rs. 33.97 Crore was only disbursed
till date and equipments which was to be installed by Jan'' 2014 would
not be available even for next 6 months as disbursement of full loan
will take further time.
EROSION OF NET WORTH OF M/S SHRI LAKSHMI COTSYN LTD.:
Due to non receipt of TUFS subsidy and blockage of substantial funds in
slow/non moving stocks and debtors, the company faced severe liquidity
crunch and huge scarcity in the working capital funds. In order to
partially mitigate the working capital fund scarcity and to arrest the
further deterioration in the quality of the stocks, the stocks of slow
moving/non moving stock of fabric/yarn lying in warehouse were sold at
prevailing market prices which were substantially lower than the cost
of procurement/production which resulted in substantial losses to the
Company. Further, the Company also entered into settlements with its
old debtors by allowing quality discount and taking the material back,
which has also contributed to the losses of the company, resulting in
erosion of the entire net worth of the Company as at the year end.
REFERENCE TO THE BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION
(BIFR):
As the Accumulated Losses of the Company at the end of the financial
year 2014 are in excess of its entire net worth, the Company is
obligated to file a reference with the Board for Industrial and
Financial Reconstruction in terms of the provisions of section 15(1) of
Sick Industrial Companies (Special Provisions) Act 1985. The Company is
taking necessary steps to ensure the necessary compliances with the
requirements of the statute.
WINDING UP PETITION AGAINST OF M/S SHRI LAKSHMI COTSYN LTD.:
In Financial Year 2007-08, the company had issued 5-year Zero-coupon
Foreign Currency Convertible Bonds of the nominal value of US $ 10
million with YTM of 7.5%. As per the terms of the Offering Circular
dated 20.09.2007 issued by the company, conversion price of the bond
was Rs. 108.49 and the bond holders have converted the FCCB Bonds
amounting to US $ 4.5 Mn into equity. However subsequently due to
unfavorable share prices the Bond holders could not exercise their
conversion right for FCCB worth USD 5.5 Mn till the date of maturity
and as such the Bonds had fallen due for redemption on 27.09.2012.
Out of that, FCCB worth USD 3.50 mn (including interest FCCB of USD
5.00 mn) have been redeemed by availing ECB of USD 5.00 mn from UCO
Bank.
Current FCCB outstanding is USD 2 mn (including interest FCCB of USD
3.00 mn) which could not be redeemed in view of stringent financial
position of the company. Due to non-payment of the dues to FCCB
Holders, some of them have filed the winding up petition before
Hon''able High Court, Allahabad for recovery of their dues. The winding
up petition filed by the FCCB Holders have since been admitted by the
Hon''able High Court and the matter is pending before the Hon''able High
Court.
PETITION BEFORE DEBT RECOVERY TRIBUNAL (DRT) BY IFCI AGAINST M/S SHRI
LAKSHMI COTSYN LTD.:
The company had availed a short term loan of Rs 30 Crores from IFCI
Ltd. on 30th September 2011 and present Outstanding is Rs. 6.37 crores
including interest. The said loan was secured by two time security in
the form of pledge of shares and mortgage of collateral security of
land of its group company. To recover the loan the IFCI had served upon
the company a notice under SARFAESI Act, which was suitably replied by
the company. Besides the IFCI has now filed petition to DRT to recovery
of their loan which the company is contesting before DRT also.
EXPORTS
Despite all adverse situations, the Company recorded an export
(consolidated) of Rs 220.63 crores in 9 months period ending on 31st
March 2014 as against Rs. 276.43 crores in 2012-13 (12 Months).
On Stand-alone basis, the Company recorded an export of Rs 220.63
crores in 9 months period ending on 31st March 2014 as against Rs.
274.20 crores in 2012-13 (12 Months).
RECOGNITIONS & AWARDS:
The company is registered with the following organisations:
1. Director General of Quality Assurance (DGQA)
2. Director General of Suppliers & Disposals (DGS&D)
3. Ordnance Board Group of Factories.
4. D.M.S.R.D.E.
5. Trade Mark Agency having brand names STAR TRACK, DYFI, HEBE
6. Office of the Textile Commissioner as a Composite Mill.
7. Bureau of Indian Standards (BIS)
8. Department of Industrial Development, Ministry of Industry.
Company is duly registered with Export Promotional Council and Posses
valid Import Export code and RCMC issued by Federation of Indian Export
Organisation. Further based upon past performance of exports, Company
is also registered with Ministry of Commerce and Industry as STAR
EXPORT HOUSE.
WHOLLY-OWNED SUBSIDIARY COMPANIES:
The Company has three subsidiary companies, details of which are as
under:
M/s SLCL Overseas FZC, Sharjah U.A.E
The Company is a 100% subsidiary of SLCL, which has been set up at
Sharjah Airport International Free Zone, Sharjah, and UAE. It is
engaged in trading of 100% Polyester fabric material, garments and
alike products and also exporting to other countries, besides trading
in Sharjah itself.
M/S SLCL Overseas FZC, Sharjah U.A.E., a wholly-owned subsidiary,
recorded a turnover of Rs. 104.33 Crores as compared with Rs. 142.74
Crores in the last year.
M/s Shri Lakshmi Defence Solutions Ltd.
SLDSL manufactures bullet proof jacket, bullet proof helmet, armored
vehicles, bullet proof morchas and other ballistic products for defense
and homeland security. The company was incorporated on 19.12.2006 and
has started functioning recently. The Company has introduced a new
range of indigenously designed models based on advance armouring
technology for armed and police forces namely Dhruv, Drona and Viper.
These Vehicles are equipped to help the security forces to encounter
ever increasing security threats from naxalities groups and other
terrorists'' activities.
During 2013-14 (9 months), the Company recorded sales and operating
income of Rs. 21.63 Crores as compared with Rs. 18.49 Crores in
2011-12, thus registered a growth of 16.98 % over the last year.
However the Company has incurred net loss of Rs.1.49 crores in 2013-14
as compared to a profit of Rs. 1.86 crores in 2012-13.
Registered supplier for defence products
Approved Supplier Registered with
Directorate General of Supplies & Disposal
Indian Army, Navy, Air Force, Director General of Quality Assurance
Ordinance Factories
Forces Ministry of Defence (Navy)
All central paramilitary
Defence Material Stores R&D Est
State Police forces
Federation of Indian Export Organization
Indian Railways
RDSO (Indian Railways
Indian Postal Department
M/s Synergy Global Home Inc.
M/s Synergy Global Home Inc., is a wholly-owned subsidiary and was
incorporated at U.S.A.; which deals in trading of home furnishing
items.
During the year, M/s Synergy Global Home Inc., U.S.A has achieved
revenue of Rs. 0.56 crores as compared with Rs. 0.18 Crores in 2012-13.
However, the company, suffered a loss of Rs. 0.09 crores in 2012-13 as
compared with a previous year''s profit of Rs. 0.11 crores.
EXEMPTION UNDER SECTION 129 OF THE COMPANIES ACT, 2013 FOR NOT
ATTACHING THE BALANCE SHEET OF THE SUBSIDIARY COMPANIES:
In view of the directions issued by the Ministry vide General Circular
No: 2 /2011, dated 08.02.2011 in regard to exemption under Section 129
of the Companies Act,2013 for not attaching the balance sheet of the
subsidiary concerned; therefore, Board of Directors of your Company
have given their consent for not attaching the balance sheet of the
subsidiary concerned;
The Annual Accounts of the subsidiary companies shall also be kept for
inspection by any shareholders in the head office of the holding
company and of the subsidiary companies concerned. The Company shall
furnish a hard copy of details of accounts of subsidiaries to any
shareholder on demand
STATUS OF ONGOING EXPANSION OF M/S SHRI LAKSHMI COTSYN LTD.:
After receipt of part disbursement of priority loan amounting Rs. 34
crores (approx.), the company has made the payment to the machinery
suppliers for critical capex out of 65.40 crores. However, the projects
namely Technical Textiles, Spinning and Yarn Dyed Shirting''s projects
cannot be fully commissioned without release of full priority loan.
However Company is in the process of commissioning the machines
whatever are being received at site.
DIRECTORS:
Pursuant to the provisions of the Companies Act, 2013 and Articles of
Association of the Company, the Directors of the Company namely, Shri
Pramod Kumar Singh and Shri G.N Mathur are liable to retire by rotation
at the ensuing Annual General Meeting of the Company and being
eligible, have offered themselves for reappointment.
SHARE CAPITAL
During the year 2013-14, the Company has not allotted any equity
shares:
EXTERNAL COMMERCIAL BORROWINGS (ECB) OF M/S SHRI LAKSHMI COTSYN LTD.:
Your company had raised External Commercial Borrowings (ECB) to the
tune of USD 5.00 Mn from UCO Bank and the proceeds thereof were
utilized for redemption of FCCBs worth USD 5.00 MN held by UCO Bank
itself. The said ECB is due for repayment along with Interest and UCO
Bank has sent the Recall notice of its debt. The company has given a
reply mentioning its critical financial position and asking some more
time with a request for reschedulement of ECB giving moratorium of 2
years.
PLEDGE OF SHARES
As per the terms and conditions stipulated in CDR package of M/s Shri
Lakshmi Cotsyn Ltd., 42,23,568 nos. of equity shares belonging to
promoter group were pledged with M/s Centbank Financial Services Ltd.,
a security trustee appointed by the Lender Banks and 2,00,000 nos. of
equity shares belonging to promoter group were pledged with Union Bank
of India.
Besides, M/s Shri Lakshmi Defence Solutions Ltd., has given a Corporate
Guarantee towards the entire financial assistance availed by M/s Shri
Lakshmi Cotsyn Ltd., in favour of Centbank Financial Services Ltd., a
security trustee appointed by the Lender Banks. Further, the Company
has also pledged its 27.22 % of its total shareholding with M/s
Centbank Financial Services Ltd.
DIVIDEND
Since the Company and its subsidiaries have incurred the loss, your
Directors, have not recommended any dividend for the accounting year
ended on 31st March, 2014.
CREDIT RATING
Since M/s Shri Lakshmi Cotsyn Ltd., is under implementation of CDR
package therefore the CARE Rating, a credit rating agency has
reconfirmed the rating to the Long term bank facilities, Short term
bank facilities and Non-Convertible Debenture (NCD) as CARE D (Single
D) due to the stressed liquidity position of the Company vide their
letter dated March 28, 2014.
CRISIL Ratings has assigned the rating of M/s Shri Lakshmi Defence
Solutions Ltd., as CRISIL D to its Long term bank facilities and Short
term bank facilities respectively.
AUDITORS
M/s Pradeep & Associates, Chartered Accountants, Auditors of the
Company, retire at the conclusion of the ensuing Annual General Meeting
and, being eligible, offer themselves for reappointment. The
observations of Auditors in their report read with notes to the
accounts are self-explanatory and do not call for further explanation.
COST AUDITOR
The Central Government''s Cost Auditor order specifies an audit of cost
accounting records of the textile Company every year. This is
applicable to the products manufactured by the Company. The Board of
Directors, subject to the approval of the Central Government, appointed
Mr. A.K. Srivastava, Cost Accountants, Kanpur, to carry out cost audit
for the current year.
INTERNAL AUDITOR
The Company appointed a firm of Chartered Accountants M/s Ajai Shanker
and Company of Kanpur as internal auditors to review the internal
control systems of the Company and report thereon. The Report of the
Internal Auditors is reviewed by the Audit Committee.
ENVIRONMENTAL SUSTAINABILITY
With an increasing concern towards ecology and global warming,
consumers are favouring organic and eco-friendly textile products.
Therefore, the demand of organic cotton is accelerating with brands and
retailers continuing to implement long-term commitment to increase
their use of organic cotton. Your Company also continues to pursue its
mission for environmental excellence and constantly explores
opportunities to improve ecology and the environment.
RESEARCH AND DEVELOPMENT
Innovation has always been a part of SLCL policy. The continuous R&D
efforts enabled the company to product innovation. The company posses
in-house R&D facilities which results in cost saving.
Company''s R&D strategy is anchored on the development and speedy
commercialization of globally competitive products, processes and
technologies through best-in-class research interventions backed by
world-class infrastructure. It has a strong R&D cell for advanced
testing laboratories. The Company is recognized as an In-house R&D unit
by Department of Science and Industrial Research, Ministry of Science
and Technology.
INSURANCE
All the insurable assets of your Company including inventories,
building, plant and machinery were adequately insured.
MANAGEMENT DISCUSSION AND ANALYSIS FOR THE YEAR 2013-14:
As required under Clause 49 of the Listing Agreement with Stock
Exchanges, Management discussion and analysis for the year 2013-14
forms part of this Report and is annexed in the Annual Report.
CORPORATE GOVERNANCE REPORT FOR THE YEAR 2013-14:
Corporate Governance Report for the year 2013-14 as required by Clause
49 of the Listing Agreement together with the Report of the Auditors of
the Company in this regard is annexed herewith.
GREEN INITIATIVE FOR PAPER LESS COMMUNICATIONS:
In accordance with MCA''s recent circulars bearing no.17/2011 dated
21.04.2011 and 18/2011 dated 29.04.2011, your company now sends
documents and various other notices (including notice calling Annual
General Meeting, Audited Financial Statements, Directors'' Report,
Auditor''s Report etc) to the shareholders through electronic mode to
the registered e-mail addresses of shareholders.
STATUTORY INFORMATION:
(A) Particulars of employees
The industrial relations throughout the year under review remained
cordial. As none of the employees of the Company was in receipt of
remuneration in excess of the limits prescribed, hence the particulars
of employees under the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, are not given in the report.
(B) Conservation of energy, technology absorption and foreign exchange
earnings and outgo Particulars with respect to conservation of energy,
among others, as required under Section 134(3)clause (m) of the
Companies Act, 2013 read with the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988 are set out in the Annexure forming part of this Report.
(C) Directors'' responsibility statement
As required under clause (c) of sub-section (3) of Section 134 of the
Companies Act, 2013, your Directors confirm that:
1. In the preparation of the annual accounts, the applicable
accounting standards were followed and there are no material
departures;
2. The Directors selected such accounting policies and applied them
consistently and made judgements and estimates that were 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 or loss
of the Company for the period;
3. The Directors took proper and sufficient care to maintain adequate
accounting records in accordance with the provisions of this Act for
safeguarding the assets of the Company and for preventing and detecting
fraud and other irregularities.
4. The Directors prepared the annual accounts on a going concern
basis.
5. The directors had laid down internal financial controls to be
followed by the company and that such internal financial controls are
adequate and were operating effectively.
6. The directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
STATUTORY DISCLOSURES
None of the Directors are disqualified under the provisions of
Section164 (2) of the Companies Act, 2013. The Directors have made the
requisite disclosures, as required under the provisions of the
Companies Act, 2013 and Clause 49 of the Listing Agreement.
ACKNOWLEDGEMENTS
Your Directors wish to place on record their appreciation of the timely
support provided by the Company''s bankers, CDR cell officials, all the
vendors and tie-up entities and the dedication and commitment of the
employees at all levels. Your Directors convey their grateful thanks to
all the Government authorities and shareholders for their continued and
unstinted assistance, co-operation and patronage.
We also take this opportunity to thank all the valued customers who
have appreciated our products and have patronized them.
Registered office: For and on behalf of the Board
19/X-1, Krishna Puram,
G.T. Road, Kanpur sd/- sd/-
Date: 30th May, 2014 Dr M P Agarwal Devesh Gupta
(Chairman and Managing Director) (Deputy Managing
Director)
Jun 30, 2013
The Directors have the pleasure in presenting the 25th Annual Report
along with the audited financial statements of the Company for the year
ended on 30th June, 2013.
FINANCIAL RESULTS
Highlights of financial result (consolidated) for the year were as
under:
(Rs. in Crores)
Particulars 2012-13 2011-12
Sales and other income 1,946.54 2,422.13
Operating profit before interest,
depreciation and tax 91.55 446.40
Less:
Interest and other financial charges 356.73 205.07
Depreciation 101.70 61.67
Extraordinary items (0.81) 10.78
Profit/ Loss before tax (367.69) 168.88
Less: Income Tax (including deferred tax) 47.85 58.41
Profit/ Loss after tax (415.54) 110.47
Proposed dividend
Dividend tax
Balance carried to balance sheet (415.54) 110.47
PERFORMANCE
Performance Highlights:
Your Directors wish to inform you that despite of all critical sit-
uations faced by the Company, products like Technical Textile/ Fusible
Interlining and garments have marked their presence in the Company''s
overall performance.
During 2012-13 the Company recorded sales and operat- ing income at Rs.
1946.54 as compared to Rs. 2422.13 in 2011-12. The profit before tax
was Rs. (367.69) crores in 2012-13 as compared to Rs. 168.88 in
2011-12. The profit after tax was Rs. (415.54) crores in 2012-13 as
compared to Rs. 110.47 in 2011-12. However the difficult external
environ- ment had a direct bearing on the Company''s financial results,
mainly high interest costs, have put the Company in losses.
Corporate Debt Restructuring:
Your Company followed an aggressive growth path in the last five years,
it had considerably grown its balance sheet, includ- ing debt. Due to
the industry situation in general viz. slowdown and company specific
issues such as growing debt, delayed realisation of debtors, working
capital shortfall, delay in project completion and cash flow mismatch,
which had adversely af- fected the liquidity position of the company,
the company was facing financial problems and finding difficulty in
servicing its debt obligation. Therefore, it had approached the lenders
for restructuring its debts under CDR mechanism. Centbank Fi- nancial
Services Ltd. had carried out TEV study of the company and given the
opinion that the company is techno -economi- cally viable considering
proposed debt restructuring scheme. The CDR package will help the
company in coming out of the financial problem and enable it to service
debt/ interest obliga- tions in terms of the package. A Joint Lenders
Meeting (JLM) was held on February 25, 2013 wherein it was decided to
refer the case to the CDR Forum to restructure the Company''s debt in
order to get through the present phase of industry-wide li- quidity
crunch.
The Board of Directors of the Company in its Meeting held on February
28, 2013 had accorded its approval for restructuring of the debts of
the Company under Corporate Debt Restruc- turing (CDR) Mechanism of the
Reserve Bank of India. CDR Empowered Group (CDREG) in its meeting held
on June 24, 2013 admitted the Company under CDR. Upon due consid-
eration CDREG approved the financial restructuring package ("CDR
Package") and issued Letter of Approval (LOA) on June 28, 2013.
Thereafter CDR package related documents such as Master Restructuring
Agreement, (MRA), amended Master Restructuring Agreement, TRA, STA have
been executed and the CDR package is under implementation.
The salient features of the CDR package interalia are as under:
- Re-schedulement of TUF Loan to be repaid in 40 struc- tured quarterly
installments; Term loans to be repaid in 32 structured quarterly
installments & Short Term Loans to be repaid in 22 structured quarterly
installments.
- Interest rate has been reduced to 11% per annum till June 30, 2013.
Thereafter, the rate is proposed to be floating rate of Central Bank
Base Rate spread of 0.75% p.a., with a right to reset the spread
every year.
- Release of priority loan amounting to Rs.65.40 Crores for critical
capex.
- Waiver of penal charges from the cutoff date to the date of
implementation of the package
REASONS FOR POOR PERFORMANCE/TIME-OVERRUN/COST- OVERRUN
The major reasons of the company''s problem was as under:
i. Major Expansion in Last Five Years.
ii. The Terry Towel project was to be installed as brown field project
at existing site Malwan but due to delay, it was implemented as Green
field project at Abhayapur as a result company had to incur additional
cost.
iii. Delay in financial tie up and high cost of Mezzanine Debt for
Denim Expansion and Technical Textile Project.
iv. Fluctuation in Cotton and yarn prices.
v. Non-Availability of TUFS subsidy amounting to Rs.165 crore.
vi. The Company could not raise equity & other sources of capital in
proportion to debt.
vii. Delay in getting working capital disbursements from banks even in
piecemeal. Hence, funds could not be uti- ised for generating revenues
as they were used for clear- ng the interest dues and loan instalments
to save bank account from becoming NPA.
viii. The company is having substantial institutional orders from CRPF,
BSF, MOD, ITBF, Assam Rifles, OCF, OEF and other Defence establishment.
Due to liquidity problems, the company could not meet the demand on
time speci- fied and the supplies became delayed as a result in most of
the cases the company is paying liquidated damages @ 10% of order Value
ix. There was additional expenditure made in the company''s factory to
the extent of Rs 206.15 crore in recently im- plemented projects which
was funded out of internal ac- cruals which further added to liquidity
stress.
x. The company was not able to put the balancing machin- eries at its
factory units and hence, could not utilize the projected production
capacity for the units.
EXPORTS
During 2012-13, the Company recorded an export of Rs 276.82 crores as
against Rs. 197.43 crores in 2011-12, thus registered an increase in
export of 40.21 % over the last year.
RECOGNITIONS & AWARDS
Your Directors feel pleasure in reporting some of the recogni- tions
bestowed on your Company during the year:
- Ranked 294th among the top 1000 companies in BS- 1000, issue 2012
- Recognition as R&D unit by DSIR Ministry of Science and Technology,
Government of India
- Also recognized by Government of India as a centre for skill
upgradation of Industrial workers.
The company is also registered with the following organisa- tions:
1. Director General of Quality Assurance (DGQA)
2. Director General of Suppliers & Disposals (DGS&D)
3. Ordnance Board Group of Factories.
4. D.M.S.R.D.E
5. Trade Mark Agency having brand names STAR TRACK, DYFI, HEBE
6. Office of the Textile Commissioner as a Composite Mill
7. Bureau of Indian Standards (BIS)
8. Department of Industrial Development, Ministry of Indus- try.
Company is duly registered with Export Promotional Council and Posses
valid Import Export code and RCMC issued by Fed- eration of Indian
Export Organisation.
Further based upon past performance of exports, Company is also
registered with Ministry of Commerce and Industry
WHOLLY-OWNED SUBSIDIARY COMPANIES
M/S SLCL Overseas FZC, Sharjah U.A.E
M/S SLCL Overseas FZC, Sharjah U.A.E., a wholly-owned sub- sidiary,
recorded a turnover of Rs. 142.74 Crores as compared with Rs. 234.96
Crores in the last year
Shri Lakshmi Defence Solutions Ltd.
During 2012-13, Shri Lakshmi Defence Solutions Ltd. has achieved a
turnover of Rs. 18.49 Crores as compared with Rs. 15.17 Crores in
2011-12, thereby registering a growth of 21.88% over the last year.
However the net profit decreased to Rs. 1.86 crores in 2012-13 as
compared with Rs. 2.58 crores in 2011-12
Indian Army, Navy, Directorate General of Supplies
Air Force, Ordinance & Disposal Director General of
Factories Quality Assurance
All central paramilitary Forces Ministry of Defence (Navy) State Police
forces Defence Material Stores R&D Est
Indian Railways Federation of Indian Export
Organization RDSO (Indian Railways Indian Postal Department
M/s Synergy Global Home Inc.
During the year, M/s Synergy Global Home Inc., U.S.A has achieved
revenue of Rs. 18.25 crores as compared with Rs. 26.66 Crores in
2011-12. However, the company, achieved a profit of Rs. 11.08 lacs in
2012-13 as compared with a previ- ous year''s loss of Rs. 3.67 crores.
EXEMPTION UNDER SECTION 212(8) OF THE COMPANIES ACT, FOR NOT ATTACHING
THE BALANCE SHEET OF THE SUB- SIDIARY COMPANIES
In view of the directions issued by the Ministry vide General Circular
No: 2 /2011, dated 08.02.2011 in regard to exemp- tion under Section
212(8) of the Companies Act, for not at- taching the balance sheet of
the subsidiary concerned; there- fore, Board of Directors of your
Company have given their consent for not attaching the balance sheet of
the subsidiary concerned;
The Annual Accounts of the subsidiary companies shall also be kept for
inspection by any shareholders in the head office of the holding
company and of the subsidiary companies con- cerned. The Company shall
furnish a hard copy of details of accounts of subsidiaries to any
shareholder on demand
ONGOING EXPANSION
Technical Textile Project
The company is one of the earliest entrants in Technical Tex- tile
products which has higher margins compare to traditional textile
products. The company has installed facility which is as per
international standards and since the demand for technical textile
products is increasing, the company would focus more on selling these
products across the globe.
Spinning Unit
The company has set up a spinning project at Malwan and started
commercial operations but it requires additional amount of Rs.12.00
crores which is due to cost escalation to make plant fully operational.
The operation of this plant will act as a backward integration for the
company and will help company to save around Rs. 24.00 crores per annum
which will add into EBIDTA margin of the company. The company is
currently buying yarn which is the raw material for textile from the
open market. The market price for the yarn is very volatile and it
affects the company margin due to huge fluctuation in prices in resent
past.
DIRECTORS
Pursuant to the provisions of the Companies Act, 1956 and Articles of
Association of the Company, the Directors of the Company namely, Dr G.
N. Mathur and Shri R K Garg are liable to retire by rotation at the
ensuing Annual General Meeting of the Company and being eligible, have
offered themselves for reappointment.
CHANGE IN DIRECTORSHIP
During the year 2012-13, Mr. Pramod Kumar Singh has joined our Board as
an Independent Director with effect from 28th February 2013. Mr. Pramod
Kumar Singh has been a former Advisor to Union Textile Minister and has
a rich experience of more than 25 years in media and politics.
During the year 2012-13, Dr. G.N. Bajpai, Mr. R.S. Srivastava and Mr.
K.D. Gupta have resigned from the Directorship of the Company. The
Board places on record their appreciation of the valuable advice and
guidance given by them while they were Directors of the Company.
SHARE CAPITAL
During the year 2012-13, the Company has allotted the follow- ing nos.
of equity shares:
(i) 376810 nos. of equity shares at a pre-determined price of Rs.
108.41 per share after conversion of FCCB amounting to USD 10,00,000.
Consequently, the paid up capital of the company is increased to Rs.
28, 47, 06,450.
(ii) The Board has approved the allotment of Share Warrants to
promoters / business associates, on preferential basis towards the
promoters'' contribution to the CDR scheme, subject to the approval of
the shareholders and regula- tory authorities.
NON-CONVERTIBLE DEBENTURES (NCDs)
During the year, the Company has issued Non- Convertible De- bentures
(NCDs) worth Rs. 40 crores to Central Bank of India for a period of 5
years and the proceeds thereof were utilized for payment of their
Mezzanine debt of Rs. 40 crores.
EXTERNAL COMMERCIAL BORROWINGS (ECB)
During the year, the company has raised External Commercial Borrowings
(ECB) to the tune of USD 5.00 Mn from UCO Bank and the proceeds thereof
were utilized for redemption of FC- CBs worth USD 5.00 MN held by UCO
Bank itself.
PLEDGE OF SHARES
As per the terms and conditions stipulated in CDR package, 42,23,568
no,s of equity shares belonging to promoter group were pledged with M/s
Centbank Financial Services Ltd, a se- curity trustee appointed by the
Lender Banks.
DIVIDEND
Since the Company has incurred the loss, your Directors, have not
recommended any dividend for the accounting year ended on 30th June,
2013.
CREDIT RATING
Since the Company has gone into CDR therefore the CARE Rating, a credit
rating agency has assigned the rating to the Long term bank facilities,
Short term bank facilities and Non- Convertible Debenture(NCD) as CARE
D (Single D)due to the stressed liquidity position of the Company vide
their letter dated March 21, 2013.
AUDITORS
M/s Pradeep & Associates, Chartered Accountants, Auditors of the
Company, retire at the conclusion of the ensuing Annual General Meeting
and, being eligible, offer themselves for reap- pointment. The
observations of Auditors in their report read with notes to the
accounts are self-explanatory and do not call for further explanation.
COST AUDITOR
The Central Government''s Cost Auditor order specifies an audit of cost
accounting records of the textile Company every year. This is
applicable to the products manufactured by the Com- pany. The Board of
Directors, subject to the approval of the Central Government, appointed
Mr. A.K. Srivastava, Cost Ac- countants, Kanpur, to carry out cost
audit for the current year.
INTERNAL AUDITOR
The Company appointed a firm of Chartered Accountants M/s Ajai Shanker
and Company of Kanpur as internal auditors to review the internal
control systems of the Company and report thereon. The Report of the
Internal Auditors is reviewed by the Audit Committee.
ENVIRONMENTAL SUSTAINABILITY
With an increasing concern towards ecology and global warm- ing,
consumers are favouring organic and eco-friendly textile products.
Therefore, the demand of organic cotton is acceler- ating with brands
and retailers continuing to implement long- term commitment to increase
their use of organic cotton. Your Company also continues to pursue its
mission for environmen- tal excellence and constantly explores
opportunities to improve ecology and the environment.
RESEARCH AND DEVELOPMENT
Innovation has always been a part of SLCL policy. The continu- ous R&D
efforts enabled the company to product innovation. The company posses
in-house R&D facilities which results in cost saving.
Company''s R&D strategy is anchored on the development and speedy
commercialization of globally competitive products, processes and
technologies through best-in-class research interventions backed by
world-class infrastructure. It has a strong R&D cell for advanced
testing laboratories. The Com- pany is recognized as an In-house R&D
unit by Department of Science and Industrial Research, Ministry of
Science and Technology.
INSURANCE
All the insurable assets of your Company including inventories,
building, plant and machinery were adequately insured.
MANAGEMENT DISCUSSION AND ANALYSIS FOR THE YEAR 2012-13
As required under Clause 49 of the Listing Agreement with Stock
Exchanges, Management discussion and analysis for the year 2012-13
forms part of this Report and is annexed in the Annual Report.
CORPORATE GOVERNANCE REPORT FOR THE YEAR 2012-13
Corporate Governance Report for the year 2012-13 as re- quired by
Clause 49 of the Listing Agreement together with the Report of the
Auditors of the Company in this regard is annexed herewith.
GREEN INITIATIVE FOR PAPER LESS COMMUNICATIONS
In accordance with MCA''s recent circulars bearing no.17/2011 dated
21.04.2011 and 18/2011 dated 29.04.2011, your company now sends
documents and various other notices (in- cluding notice calling Annual
General Meeting, Audited Finan- cial Statements, Directors'' Report,
Auditor''s Report etc) to the shareholders through electronic mode to
the registered e-mail addresses of shareholders.
STATUTORY INFORMATION
(A) Particulars of employees
The industrial relations throughout the year under review remained
cordial. As none of the employees of the Com- pany was in receipt of
remuneration in excess of the limits prescribed, the particulars of
employees under Section 217(2A) of the Companies Act 1956, read with
the Companies (Particulars of Employees) Amendment Rules, 2011, were
not given.
(B) Conservation of energy, technology absorption and for- eign
exchange earnings and outgo
Particulars with respect to conservation of energy, among others, as
required under Section 217 (1) (e) of the Companies Act, 1956 read with
the Companies (Disclo- sure of Particulars in the Report of Board of
Directors) Rules, 1988 are set out in the Annexure forming part of this
Report.
(C) Directors'' responsibility statement
As required under Section 217(2AA) of the Companies Act, 1956, your
Directors confirm that:
1. In the preparation of the annual accounts, the applicable
accounting standards were followed and there are no ma- terial
departures;
2. The Directors selected such accounting policies and
Registered office 19/X-1, Krishna Puram, G.T Road, Kanpur Date : 5th
December, 2013 applied them consistently and made judgements and
estimates that were 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 or loss of the Company for the period;
3. The Directors took proper and sufficient care to maintain adequate
accounting records in accordance with the pro- visions of this Act for
safeguarding the assets of the Com- pany and for preventing and
detecting fraud and other irregularities.
4. The Directors prepared the annual accounts on a going concern
basis.
STATUTORY DISCLOSURES
None of the Directors are disqualified under the provisions of Section
274(1) (g) of the Companies Act, 1956. The Directors have made the
requisite disclosures, as required under the provisions of the
Companies Act, 1956 and Clause 49 of the Listing Agreement.
ACKNOWLEDGEMENTS
Your Directors wish to place on record their appreciation of the timely
support provided by the Company''s bankers, CDR cell officials, all the
vendors and tie-up entities and the dedication and commitment of the
employees at all levels.
Your Directors convey their grateful thanks to all the Govern- ment
authorities and shareholders for their continued and un- stinted
assistance, co-operation and patronage.
We also take this opportunity to thank all the valued customers who
have appreciated our products and have patronized them.
For and on behalf of the Board
DEVESH GUPTA DR M P AGARWAL
Managing Director Chairman and
Managing Director
Jun 30, 2010
The Directors are pleased to present the 22nd Annual Report along with
the audited financial statements of the Company for the year ended 30th
June, 2010.
FINANCIAL RESULTS
Highlights of financial result for the year were as under:
(Rs. in crores)
Particulars 2009-10 2008-09 Growth (%)
Sales and other income 1,546.82 1,169.30 32.60
Operating profit before interest,
depreciation and tax 205.78 173.88 29.12
Less:
Interest and other financial charges 73.80 67.95 8.61
Depreciation 27.00 25.20 7.14
profit before tax 104.98 80.74 30.00
Less: Income Tax (including deferred
tax and FBT) 13.33 17.78 (25.03)
Profit after tax 91.65 62.96 46.00
Debenture redemption reserve 10.00 10.00
Proposed dividend 5.99 3.12
Dividend tax 1.02 0.53
Balance carried to balance sheet 74.64 49.31
PERFORMANCE
Your Directors are pleased to inform you that besides terry towel,
denim, suiting shirting, technical textile including nylon coated
fabric, wider width fabric and home furnishing projects that performed
stupendously during 2009-10, other products like dress material and
garments have also marked their presence in the Companys overall
performance.
During 2009-10, your Company recorded sales and operating income at Rs.
1,546.82 crores as compared with Rs. 1,169.30 crores in 2008-09, thus
registered a growth of 33% over the last year. The profit after tax
also grew by 46 % being Rs. 91.65 crores during 2009-10 as against Rs.
62.96 crores in 2008-09. The improvement in the Companys performance
was possible mainly on account of improved capacity utilisation,
increase in sale and cost reduction measures adopted by the Company
resulting in better operational effciency and value added products.
EXPORTS
During 2009-10, the Company recorded an export of Rs. 95.63 crores as
against Rs. 94.72 crores in 2008-09.
RECOGNITIONS
Your Directors feel immense pleasure in reporting some of the
recognitions bestowed on your Company during the year:
- Received an award from Community of International Sewing Machine
Industry, India (CISMI) organized by GARTEXMA. For valuable support in
apparel and home textiles machine industry( 11th October, 2010)
- Ranked 319th among the top 500 companies of India (Source: The
Economic Times and published in ET-500, October 2010 issue)
- Ranked 9th among the top 500 small-cap companies in the year 2009
(Source: Dalal Street Journal - Small cap 500 issue)
- Ranked 231 among the top 500 manufacturing companies in India
(Source: Industry 2.0 - Technology Management for Decision Makers,
September, 2009)
- Ranked One Star Export house from the offce of the Joint Director
General of Foreign Trade, Ministry of Commerce and Industry
CERTIFICATIONS
Name of Certifcate Purpose
GOTS Global Textile System
O.E. 100 & Blended User Health & Safety
REACH Chemical Management
OEKO-TEX 100 Skin Friendly Chemical
SA-8000 Social Accountability
ISO-9001 / 2008 Quality Management
System
ISO-14001 / 2004 Environment Management
System
OHSAS - 18001 / 2001 Occupational Health &
Safety
FAIR TRADE CERTIFICATE Ethic Trade Practices
WHOLLY-OWNED SUBSIDIARY COMPANIES
M/S SLCL OVERSEAS FZC, Sharjah, U.A.E:
M/S SLCL Overseas FZC, Sharjah, U.A.E. a wholly-owned subsidiary
recorded a turnover of Rs. 153.10 crores as compared with Rs. 102.70
crores in the last year, registering a growth of 49.03%.
Shri Lakshmi Defence Solutions Limited. :
During 2009-10, Shri Lakshmi Defence Solutions Limited has made a
remarkable performance with a turnover of Rs. 11. 47 crores. Recently
the Company has bagged the order for the supply of 4 specialised mine
protection vehicles from Nepal Govt. for their troops deployed on
United Nations missions and is expected for another order worth Rs.80
to 100 crores. The Company expects huge demand for Armored Vehicles in
India as well as abroad. The Company has entered into following
agreements:
- With ÃUkrainmash a state foreign trade and investment frm of Ukraine
for the supply of 100 armoured vehicles to UN mission
- With Adcom Military Industries, Abu Dhabi for marketing of the
Companys armoured vehicles in Middle East and Africa
- With GlowTrade (M) SDN. BHD of Malaysia for the development and
production of MSCN for the supply to Indian Armed Forces Ministry of
Defence, India.
Shri Lakshmi Nano Technologies Limited:
Your Company is also developing smart vests by using NCT technology and
smart sensors for health conscious people, hospitals and army and for
that purpose the Company opened a branch at Arkansas University, USA,
where the research work is being done. Smart vests would have features
like Physiological monitoring, early warning system, power generator
and cooling on demand. It is expected to be launched by June 2011.
LAUNCHING OF RETAIL GARMENTS BRAND - "DYFI"
The Company is in the process of launching its own garments brand for
retail sales in India called DYFI. It is expected to be launched by
November 2010 and would be sold through franchisee retail outlets
throughout India.
EXPANSIONS
Expansion of Terry Towel Facilities from 3000 TPA to 15000 TPA
SLCL is currently expanding its terry towel manufacturing capacities
from 3,000 MTPA to 15,000 MTPA. In view of the power shortages, SLCL is
also setting up a 16 MW power plant for captive use. The total cost of
both the projects is Rs. 3,778 Mn. The Company has raised Rs. 2,500 Mn
as term loan and the balance Rs. 1,278 Mn has been raised through
internal accruals. The project is expected to be commissioned by
November 2010.
PROPOSED EXPANSIONS/ FUTURE PLANS
Technical Textile Fabrics
SLCL manufactures various technical textiles which includes fusible
interlining fabric, high altitude fabric, PU coated fabric etc. In view
of the increasing demand, the Company has decided to enhance the
capacity of fusible interlining fabric from 12.5 MMPA to 25.0 MMPA. It
is also venturing into manufacturing of black out fabrics, fex
fabrics, carbon fabrics etc. The estimated capital cost for the
project will be Rs. ~4.82 Bn.
Denim and Wider width Fabric
SLCL has the capacity to manufacture 20 MMPA of denim p.a., which it is
increasing to 40 MMPA. The Company is also increasing the manufacturing
capacity of wider width fabric from 12 MMPA to 30 MMPA. The estimated
capital cost for the project will be Rs. ~5.10 Bn.
The expected cost of expansion of the above projects is Rs. 992.00
crores (approx.) duly appraised by Central Bank of India. Out of the
above project cost, the term loan amount of Rs. 693 crores has been
underwritten by the Central Bank of India. The balance amount of Rs.
299 crores is to be raised through equity/ share warrants. To meet the
equity requirement partly, the Company has already received application
money for 70 lacs share warrants proposed to be allotted to promoters
and non- promoters @ Rs. 156 per warrant.
Spinning Mill
The Company is already running a small plant consisting of 10,000
spindles and has also recently acquired 25,000 spindles on job work at
Fatehpur from U.P. State Co-operative Federation Limited. The Company
is planning to set up a spinning unit with 1,50,000 spindles with
project cost of approx. Rs. 600 Crores
SETTING-UP OF 300 MW THERMAL POWER PROJECT AT CHATTISGARH AND 5 MW SPV
SOLAR POWER PROJECT AT RAJASTHAN:
Shri Lakshmi Power Limited, a group company of Shri Lakshmi Cotsyn
Limited, is setting up two power projects viz 300 MW Thermal power
generation capacity in the State of Chhattisgarh for which MOU has
already been signed with State Govt. Further, the Company has applied
for registration of 5 MW Solar Power Generation Project in the State of
Rajasthan. The Company expects to complete these power projects by the
end of June, 2012.
After the overall expansions and diversifications programmes, starts
contributing, the total revenue of the Company will cross USD 1 Bn down
the line in next 3 years.
DIRECTORS
Pursuant to the provisions of the Companies Act, 1956 and Articles of
Association of the Company, Shri R K Garg, Shri J.V. Rao and Mr. Ram
Sharan Srivastava are liable to retire by rotation at the ensuing
Annual General Meeting of the Company and being eligible, have offered
themselves for reappointment.
During the year 2009-10, Mr. J S Varshney was resigned from the
Directorship of the Company due to health problem and Mr. K. D. Gupta
was appointed at his place w.e.f. 25th January, 2010, on account of
casual vacancy caused.
Shri Sunil Trikha, who was appointed as Nominee Director of Export
Import Bank of India on the Companys Board of Directors, was ceased
from the offce of director due to the withdrawal of Nomination from
EXIM Bank, New Delhi, w.e.f. 30th August, 2010.
CAPITAL
During the year 2009-10, the Company has allotted the following nos. of
equity shares:
(i) 2,221,500 nos. of equity shares after conversion of equivalent nos.
of preferential warrants to promoters group of Rs. 10 each at a premium
of Rs. 90 per share.
(ii) 1,975,000 nos. of equity shares after conversion of equivalent
nos. of preferential warrants to non-promoters group of Rs. 10 each at
a premium of Rs. 46 per share.
(iii) 188,405 nos. of equity shares at a pre-determined price of Rs.
108.41 per share after conversion of FCCB aggregating to USD 500,000.
Consequently, the paid up capital of the Company is increased to Rs.
199,634,050.
(iv) The Board has approved the allotment of 5,000,000 Share Warrants
to promoters and 2,000,000 Share Warrants to non-promoters/strategic
investors, convertible into equity shares of Rs. 10 each at a premium
of Rs. 146 per share, on preferential basis at SEBI Floor price of Rs.
156 per warrant, for its expansion project subject to the approval of
regulatory authorities.
DIVIDEND
Your Directors recommended a dividend of 30% (i.e., Rs. 3 per share)
for the accounting year ended on 30th June, 2010 and therefore, seek
your approval for the same.
AUDITORS
M/s Pradeep & Associates, Chartered Accountants, Auditors of the
Company retire at the conclusion of the ensuing Annual General Meeting
and, being eligible, offer themselves for reappointment. The
observations of Auditors in their report read with notes to the
accounts are self-explanatory and do not call for further explanation.
COST AUDITOR
The Central Governments Cost Auditor order specifes an audit of cost
accounting records of the textile Company every year. This is
applicable to the products manufactured by the Company. The Board of
Directors, subject to the approval of the Central Government, appointed
A K Srivastava, Cost Accountants, Kanpur, to carry out this audit for
the current year.
INTERNAL AUDITOR
The Company appointed a frm of Chartered Accountants M/s Ajai Shanker
and Company of Kanpur as internal auditors to review the internal
control systems of the Company and report thereon. The Report of the
Internal Auditors is reviewed by the Audit Committee.
ENVIRONMENTAL SUSTAINABILITY
Your Company also continues to pursue its mission for environmental
excellence and constantly explores opportunities to improve ecology and
the environment.
With an increasing concern towards ecology and global warming,
consumers are favouring organic and eco-friendly textile products.
Therefore, the demand of organic cotton is accelerating with brands and
retailers continuing to implement long-term commitment to increase
their use of organic cotton. Your Company also got the certifcation to
produce organic bed sheets, organic towels and other products.
RESEARCH AND DEVELOPMENT
Your Company is presently manufacturing various technical textile
fabrics which include high altitude fabric, PU-coated nylon fabric,
nuclear bio-chemical fabrics and ballistic plates, among others. Now
the Company has proposed to diversify to manufacture black out fabrics,
fex fabrics, carbon fabrics and IRR fabrics with estimated total
capital expenditure of Rs. 482 crores.
INSURANCE
All the insurable interest of your Company including inventories,
building, plant and machinery were adequately insured.
MANAGEMENT DISCUSSION AND ANALYSIS FOR THE YEAR 2009-10
As required under Clause 49 of the Listing Agreement with Stock
Exchanges, Management discussion and analysis for the year 2009-10
forms part of this Report and is annexed herewith.
CORPORATE GOVERNANCE REPORT FOR THE YEAR 2009-10
Corporate Governance Report for the year 2009-10 as required by Clause
49 of the Listing Agreement together with the Report of the Auditors of
the Company in this regard is annexed herewith.
STATUTORY INFORMATION
(a) Particulars of employees
The industrial relations throughout the year under review remained
cordial. As none of the employees of the Company was in receipt of
remuneration in excess of the limits prescribed, Particulars of
employees under Section 217(2A) of the Companies Act, 1956, read with
the Companies (Particulars of Employee) Rules, 1975 as amended were not
given.
(B) Conservation of energy, technology absorption and foreign exchange
earnings and outgo
Particulars with respect to conservation of energy, among others, as
required under Section 217 (1) (e) of the Companies Act, 1956 read with
the Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 are set out in the Annexure forming part of this
Report.
(C) Directors Responsibility Statement
As required under Section 217(2AA) of the Companies Act, 1956, your
Directors confrm that:
1. In the preparation of the annual accounts, the applicable
accounting standards were followed and there are no material
departures;
2. The Directors selected such accounting policies and applied them
consistently and made judgments and estimates that were 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 or loss
of the Company for the period;
3. The Directors took proper and suffcient care to maintain adequate
accounting records in accordance with the provisions of this Act for
safeguarding the assets of the Company and for preventing and detecting
fraud and other irregularities.
4. The Directors prepared the annual accounts on a going concern
basis.
STATUTORY DISCLOSURES
None of the Directors are disqualifed under the provisions of Section
274(1) (g) of the Companies Act, 1956. The Directors have made the
requisite disclosures, as required under the provisions of the
Companies Act, 1956 and Clause 49 of the Listing Agreement.
ACKNOWLEDGEMENTS
We have defnitely scaled greater heights and defned the path for others
to follow. In this regard, your Directors wish to place on record their
appreciation of the timely support provided by the Companys bankers,
all the vendors and tie-up entities and the dedication and commitment
of the employees at all levels. We are sure we will continue to dare
and reach the pinnacle of our journey called success.
Your Directors convey their grateful thanks to all the Government
authorities and shareholders for their continued and unstinted
assistance, co-operation and patronage.
We also take this opportunity to thank all the valued customers who
have appreciated our products and have patronised them.
Registered offce: For and on behalf of the Board
19/X-1, Krishna Puram, Dr M P Agarwal
G.T. Road, Kanpur Chairman and Managing Director
Date: September 28, 2010
Jun 30, 2009
The Directors are pleased to present the 21st Annual Report along with
the audited financial statements of the Company for the year ended June
30, 2009.
Financial results
Highlights of financial result for the year were as under
(Rs. in cr)
Financial results 2008-09 2007-08 Growth (%)
Sales and other income 1,169.31 936.99 24.79
Operating profit before interest,
depreciation and tax 173.88 134.67 29.12
Less:
Interest and other financial charges 67.95 44.10 54.08
Depreciation 25.20 22.42 12.40
Profit before tax * 80.74 68.15 18.47
Less: Income Tax (including
deferred tax and FBT) 17.78 10.44
Profit after tax 62.96 57.71 9.10
Debenture redemption reserve 10.00 10.00
Proposed dividend 3.12 0.74
Dividend tax 0.53 0.13
Balance carried to balance sheet 49.31 46.84
Performance
Your Directors are pleased to inform you that besides terry towel,
denim, bottom weight, nylon coated fabrics, wider width fabric and home
furnishing projects that performed stupendously during 2008-09, other
products like dress material and comforters have also marked their
presence in the Companys overall performance.
The Companys overall performances was remarkable which is evident that
during 2008-09 your Company recorded sales and operating income at Rs.
1,169.31 cr as compared with Rs. 936.99 cr in 2007-08, thus a growth of
24.79% over the last year. The profit after tax also grew by 9.10 %
being Rs. 62.96 cr during 2008-09 as against Rs. 57.71 cr in 2007- 08.
The improvement in the Companys performance was possible mainly on
account of improved capacity utilisation, increase in sale and cost
reduction measures adopted by the Company resulting in better
operational efficiency and value- added products.
Exports
During 2008-09, the Company recorded an export of Rs. 94.72 cr as
against Rs. 86.45 cr in 2007-08, thus registering a growth of 9.57%
over the last year.
Recognitions
Your Directors feel immense pleasure in reporting some of the
recognitions bestowed on your Company during the year:
Ranked 378th among the top 500 companies of India (Source: The Economic
Times and published in ET-500, November 2009 issue)
Ranked 23rd among the top 400 small-cap companies (Source: Dalai Street
Journal - Small cap 400 issue)
Ranked 3rd among the fastest growing Indian companies (Source: Business
Today, June 2008 issue)
Ranked 234th among the top 500 manufacturing companies in India
(Source: Industry 2.0 Technology Management for Decision Makers,
August-September, 2008)
> Possessing certifications like ISO 9001:2008, GOTS, OE-100, Oekotex
and Reach
Ranked One Star Export house from the office of the Joint Director
General of Foreign Trade, Ministry of Commerce and Industry
Wholly-owned Subsidiary Company
M/S SLCL Overseas FZC, Sharjah U.A.E. a wholly-owned subsidiary
recorded a turnover of AED 780.24 lacs as compared with AED 707.42 lacs
in the last year, registering a growth of 10.29%.
Incorporation of Shri Lakshmi Defence Solutions Ltd
During 2008-09, Shri Lakshmi Defence Solutions Ltd. was incorporated by
changing the name of Armet Armored Vehicles (India) Ltd in view of
dissolving the joint venture between Armet Armored Vehicles Ltd UK and
Shri Lakshmi Cotsyn Ltd, due to non-receipt of 25% shares from Armet
Armored Vehicles Ltd, UK. Now Shri Lakshmi Defence
Solutions Ltd is a 100% subsidiary of Shri Lakshmi Cotsyn Ltd. The
Company expects huge demand for Armored Vehicles in India as well as
abroad.
Expansions
Implementation of terry towel project
During 2008-09, the financial closure of terry towel expansion project
of Rs. 378 cr of your Company was completed for expanding manufacturing
capacity from 3,000 tons to 15,000 tons annually and for setting up 16
mega watt captive co-generation power plant project to ensure
uninterrupted power supplies at lowest cost. Both the projects are
under implementation and the Company expects to complete these projects
by June 2010.
Fusible interlining fabric
The Company is marketing this fabric commonly known as Buckram under
the brand name "Star Track". The Company enhanced the capacity from 10
mmpa to 12.5 mmpa in the year ended June 2008. The Company is marketing
through channel of distributors throughout India. Due to pressure of
orders, the capacity utilisation for the year ended June 2008 was 116%.
In view of the increasing demand, the Company decided to enhance the
capacity from 12.5 mmpa to 25.0 mmpa.
Denim fabric expansion
The present capacity of denim fabric is 20 mmpa to produce basic denim.
The Company is researching continuously to produce new designs and new
qualities which is why the Company has orders for next two months
capacity. The Company is planning to set up 10 mmpa more capacity to
meet out enhanced demand of customers.
Wider width fabric - The sheeting fabric of 130" wide, used for making
bed linen, duvets and comforters is known as wider width fabric. The
present capacity of the Company is 12 mmpa and the Company wishes to
increase the capacity from the current 12 mmpa to 20 mmpa.
Diversification
Setting up of comforter unit in Noida
During 2008-09, your Company acquired a unit at Noida for manufacturing
comforters with the capacity of manufacturing of 3 lacs (in number)
annually and the unit commenced the production at the new unit w.e.f.
February 2009.
Retail
During 2008-09, your Company succeeded to place its Weaves brands
terry towel and bed sheets at 950 multi- branded retail outlets (MBOs)
for retail marketing and expects that the Companys products will be
available at 1,500 multi-branded retail outlets (MBOs) throughout the
country in next two years through distributors, dealers and franchisee.
Launching of armored vehicles with the brand name of Dhruv, Drona and
Viper
During 2008-09, M/s Shri Lakshmi Defence Solutions Ltd., a wholly-owned
subsidiary of your Company, introduced a new range of indigenously
designed models based on advance armouring technology for armed and
police forces namely Dhruv, Drona and Viper. These Vehicles are
equipped to help the security forces to encounter ever increasing
security threats from naxalities groups and other terrorists
activities. The vehicles have been designed to meet the requirements
of armed forces engaged in maintaining law and order in various parts
of the country.
Ring yarn and open end yarn
For backward integration, the Company is planning to set up a spinning
unit with 1,00,000 spindles.
Directors
Pursuant to the provisions of the Companies Act, 1956 and Articles of
Association of the Company, Shri J S Varshney, Dr G N Mathur and Mr
Dileep Bajaj are liable to retire by rotation at the ensuing Annual
General Meeting of the Company and being eligible, have offered
themselves for reappointment.
Shri Sunil Trikha, Chief General Manager of Export-Import Bank of
India, Mumbai, was appointed as Nominee and Independent Director of
Export Import Bank of India on the Companys Board of Directors on and
from January 31, 2009.
Capital
During 2008-09, your Company allotted 30 lacs preferential warrants of
Rs. 100 each to the promoters group out of which 7,78,500 number of
warrants are already converted into equity shares of Rs. 10 each at a
premium of Rs. 90 per share.
The Company also proposed to allot 25 lacs warrants at Rs. 56 per
warrant, convertible into equity shares of Rs. 10 each at a premium of
Rs. 46 per share to the strategic investors subject to the approval of
regulatory authorities.
Dividend
Your Directors recommended a dividend of 20% (i.e., Rs. 2 per share)
for the accounting year ended on June 30, 2009 and therefore, seek your
approval for the same.
Auditors
M/s Pradeep & Associates, Chartered Accountants, Auditors of the
Company retire at the conclusion of the ensuing Annual General Meeting
and, being eligible, offer themselves for reappointment. The
observations of Auditors in their report read with notes to the
accounts are self-explanatory and do not call for further explanation.
Cost auditor
The Central Governments Cost Auditor order specifies an audit of cost
accounting records of the textile Company every year. This is
applicable to the products manufactured by the Company. The Board of
Directors, subject to the approval of the Central Government, appointed
A K Srivastava, Cost Accountants, Kanpur, to carry out this audit for
the current year.
Internal auditor
The Company appointed a firm of Chartered Accountants M/s Ajai Shanker
and Company of Kanpur as internal auditors to review the internal
control systems of the Company and report thereon. The Report of the
Internal Auditors is reviewed by the Audit Committee.
Environmental sustainability
Your Company also continues to pursue its mission for environmental
excellence and constantly explores opportunities to improve ecology and
the environment.
With an increasing concern towards ecology and global warming,
consumers are favouring organic and eco-friendly textile products.
Therefore, the demand of organic cotton is accelerating with brands and
retailers continuing to implement long-term commitment to increase
their use of organic cotton. Your Company also got the certification to
produce organic bed sheets, organic towels and other products.
Research and development
Your Company is presently manufacturing various technical textile
fabrics which include high altitude fabric, PU-coated nylon fabric,
nuclear bio-chemical fabrics and ballistic plates, among others. Now
the Company has proposed to diversify to manufacture black out fabrics,
flex fabrics, carbon fabrics and IRR fabrics with estimated total
capital expenditure of Rs. 250 cr.
Black out fabrics - This fabric is basically used for curtains to
protect heat and sunlight coming inside the room from windows and
doors. Currently there is no manufacturing in the organised sector as
on date. The Company received good enquires for black out fabrics from
the customers like IKEA, Walmart and other buyers like Ellery Homes.
Flex fabrics - This fabric is basically used for hoardings, banners,
kiosk, disaster management, defence/military application and other such
related purposes. This fabric is produced in different types called
front lit, back lit and inflatable and dock seal, among others.
Currently there is no manufacturer in India and all the requirements
are being met by imports from China, Korea and Taiwan.
Carbon fabric - This fabric is used in producing NBC fabric for
protection against chemicals, chemical gases and other nuclear
bio-chemical materials. The Company is presently importing it and using
it in manufacturing NBC fabric being converted to NBC uniform for army
requirement. The project includes manufacturing of carbon as well as
applying the carbon on fabric.
IRR fabric - This is called infra red reflectance fabric used for army
operations. In battle field the soldiers, arms and ammunitions,
military trucks and tents, among others, covered with this fabric can
not be sensored by enemys air- crafts or other visible mediums. Almost
all countries in the world use only IRR fabrics for their armies. We
are carrying out necessary research work at our existing facilities for
development of this fabric.
Shri Lakshmi Nano Technologies Limited - Your Company set up a unit for
manufacturing smart vests by using NCT technology and smart sensors for
health conscious people, hospitals and army and for that purpose the
Company opened a branch at Arkansas University, USA, where the research
work is being done.
Insurance
All the insurable interest of your Company including inventories,
building, plant and machinery were adequately insured.
Management discussion and analysis for the year 2008-09
As required under Clause 49 of the Listing Agreement with Stock
Exchanges, Management discussion and analysis for the year 2008-09
forms part of this Report and is annexed herewith.
Corporate Governance Report for the year 2008-09
Corporate Governance Report for the year 2008-09 as required by Clause
49 of the Listing Agreement together with the Report of the Auditors of
the Company in this regard is annexed herewith.
Statutory information
(A) Particulars of employees
The industrial relations throughout the year under review remained
cordial. As none of the employees of the Company was in receipt of
remuneration in excess of the limits prescribed, Particulars of
employees under Section 217(2A) of the Companies Act, 1956, read with
the Companies (Particulars of Employee) Rules, 1975 as amended were not
given.
(B) Conservation of energy, technology absorption and foreign exchange
earnings and outgo
Particulars with respect to conservation of energy, among others, as
required under Section 217(1) (e) of the Companies Act, 1956 read with
the Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 are set out in the Annexure forming part of this
Report.
(C) Directors responsibility statement
As required under Section 217(2AA) of the Companies Act, 1956, your
Directors confirm that:
1. In the preparation of the annual accounts, the applicable
accounting standards were followed and there are no material
departures;
2. The Directors selected such accounting policies and applied them
consistently and made judgments and estimates that were 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 or loss
of the Company for the period;
3. The Directors took proper and sufficient care to maintain adequate
accounting records in accordance with the provisions of this Act for
safeguarding the assets of the Company and for preventing and detecting
fraud and other irregularities.
4. The Directors prepared the annual accounts on a going concern
basis.
Statutory Disclosures
None of the Directors are disqualified under the provisions of Section
274(1 )(g) of the Companies Act, 1956. The Directors have made the
requisite disclosures, as required under the provisions of the
Companies Act, 1956 and Clause 49 of the Listing Agreement.
Acknowledgements
We have definitely scaled greater heights and defined the path for
others to follow. In this regard, your Directors wish to place on
record their appreciation of the timely support provided by the
Companys bankers, all the vendors and tie- up entities and the
dedication and commitment of the employees at all levels. We are sure
we will continue to dare and reach the pinnacle of our journey called
success.
Your Directors convey their grateful thanks to all the Government
authorities and shareholders for their continued and unstinted
assistance, co-operation and patronage.
We also take this opportunity to thank all the valued customers who
have appreciated our products and have patronised them.
Registered office: For and on behalf of the Board
19/X-1, Krishna Puram, Dr M P Agarwal
G.T Road, Kanpur Chairman and
Date: November 25, 2009 Managing Director