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Directors Report of Sri Lakshmi Saraswathi Textiles (Arni) Ltd.

Mar 31, 2015

Dear members,

The Directors present the Fifty First Annual Report of the Company alongwith the audited statement of accounts for the year ended 31st March 2015.

WORKING RESULTS

Details Rs. Rs.

Profit from business operation before 1,08,75,964 Financial Expenses and Depreciation

Less:-

1) Financial Expenses 1,18,11,213 2) Depreciation 2,24,46,290 3,42,57,503

Profit/Loss before Tax -2,33,81,539

Less: Provision for Tax

* For Current Tax 0

* Deferred Tax Liability Written off 62,33,792

* Provision for tax for earlier years -50,25,760

Current year Profit/Loss After Tax -2,21,73,507 0 Loss carried forward from previous year -88,77,915

Loss carried forward -3,10,51,422

2. PRODUCTION AND SALES

Production of yarn during the year was 58.90 lakhs kgs as against 57.62 lakhs kgs in the previous year. The sale value during the year was Rs.115.08 crores as against Rs. 125.70 crores of previous year.

3. DIVIDEND

Due to loss, your Directors do not recommend Dividend.

4. TRADE PROSPECT AND OUTLOOK

The performance of the company during the year under review was not upto the expected level. The raw material cost remained constant. There were constraints in getting sufficient power and the average cost of power was high. The profitability of your company was affected by reduction in capacity utilization due to non availability of sufficient manpower and reduction in selling price of yarn.

5. CURRENT YEAR

The demand for the yarn and price realization at the beginning of the current year are good. Your Directors are doing their best to improve the performance.

6. DIRECTORS

Sri Balakrishna S and Sri R. Padmanaban retire by rotation and are eligible for reappointment.

7. Extract of Annual Return

An extract of Annual Return in Form MGT 9 is given in ANNEXURE 1.

8. Details of Board Meetings held during 2014-15.

There were five Board meetings held during the year 2014-15. The details and attendance record of Directors at the Board Meetings are as under.

Date of Meeting Board Strength No.of Directors (on the date of meeting) Present

29.05.14 4 4

31.07.14 4 4

31.10.14 4 4

11.02.15 4 4

09.03.15 4 4

9. DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 134(5) of the Companies Act, 2013, the Directors state that -

1. In the preparation of Annual Accounts for the year ended 31st March 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures.

2. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year ended 31st March 2015, and of the profit/ loss of the company for that period.

3. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

4. The Directors had 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.

10. Independent Directors

a) The Board of Directors state that declarations were given by Sri J M Grover and Sri R. Sambasivan, Independent Directors under sub section (6) of 149 of Companies Act, 2013.

b) Terms and conditions of appointment of Independent Directors can be viewed at the company Website: www.slstindia.com

11. Remuneration Policy

The Remuneration Policy was recommended by Nomination and Remuneration Committee at its meeting held on February 11, 2015 and adopted by the Board of Directors at its meeting held on the same day and the policy is given in ANNEXURE 2

12. Explanation to observations of Secretarial Auditor.

The Board of Directors wish to state that:

a) Chief Executive Officer has been appointed by the Board of Directors at its meeting held on April 01, 2015

b) Regarding three other matters of non-compliances reported by the Secretarial Auditor, Directors are taking all earnest steps to comply with the requirements of Companies Act 2013.

13. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

The Company has not given any Loans, guarantees or Investments covered under Sec 186 of Companies Act 2013.

14. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES UNDER SEC 188(1) COMPANIES ACT 2013

Related Parties Name of Director Nature of Salary to whom related relation Allowance ship and Bonus Rs.

Mr. R. Thirumalai R. Padmanaban Brother 9,15,990

Mr.R. Rajagopal R.Padmanaban Brother 3,00,000 (employed for 10 months from 01.06.2014)

Mr. Srish Jayender Balakrishna Balakrishna S Son 3,00,000 (employed for 10 months from 01.06.2014)

Total 15,15,990

Related Parties PF Medical Total Rs. Benefit Rs. Rs.

Mr. R. Thirumalai 64,800 18,000 9,98,790

Mr.R. Rajagopal 21,600 0 3,21,600

Mr. Srish Jayender Balakrishna 21,600 0 3,21,600

Total 1,08,000 18,000 16,41,990

Disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 in Form No. AOC 2 is provided in Annexure - 3.

15. Material Changes

There are no material changes affecting the financial position of the company which occurred between the end of the financial year of the company to which the financial statements relate and the date of this report.

16. DETAILS TO BE DISCLOSED UNDER RULE 8(3) OF COMPANIES (ACCOUNTS) RULES 2014.

The information to be disclosed under RULE 8(3) OF COMPANIES (ACCOUNTS) RULES 2014 is given in ANNEXURE - 4.

17. Risk Management Policy

At present, risk management is handled by the Wholetime Directors and the risk management policy is yet to be framed.

18. Corporate Social Responsibility

As the company's networth, turnover and net profit are below the threshold limit prescribed under the Companies Act, 2013, the company is yet to form a Corporate Social Responsibility Committee.

19. Evaluation of Board

The performance of Board, its Committee and individual directors are evaluated by No.of meetings held, time spent in each meeting deliberating the issues, quality of information / data provided to the member, the time given to them to study the details before each meeting, quality of the deliberation in each meeting, contribution of each director, the details of decision taken and measures adopted in implementing the decision and monitoring the continuous implementation of the decision and feed back to the Board.

20. DETAILS TO BE DISCLOSED UNDER RULE 8(5) OF COMPANIES (ACCOUNTS) RULES 2014.

The information to be disclosed under RULE 8(5) OF COMPANIES (ACCOUNTS) RULES 2014 is given in ANNEXURE - 5.

21. DISCLOSURE ON AUDIT COMMITTEE

a) The composition of the Audit Committee is as below:

Member & Chairman Sri J M Grover

Member Sri R. Sambasivan

All the members have wide exposure in the relevant areas.

b) The Board of Directors has accepted all recommendations of Audit Committee.

22. Establishment of Whistle Blower Policy and Vigil Mechanism

A Whistle Blower Policy and Vigil Mechanism was adopted by the Board of Directors at its meeting held on March 9, 2015. The policy can be viewed at the company website www.slstindia.com.

23. Secretarial Audit Report

The Secretarial Audit Report for the year 2014-15 is provided in ANNEXURE - 6.

24. DETAILS TO BE DISCLOSED UNDER RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

The required disclosures are provided in ANNEXURE - 7.

25. DETAILS TO BE DISCLOSED UNDER RULE 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014.

As none of the employees was in receipt of remuneration in excess of the prescribed limit, there is no report under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

26. INFORMATION REQUIRED UNDER THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2014.

The company has in place a system to redress complaints received regarding sexual harassment in line with the requirements of the Sexual Harassment of women at the workplace (Prevention, Prohibition & Redressal) Act, 2013

All employees (permanent, contractual, temporary, apprentices and trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the year 2014-15.

* No of complaints received - Nil

* No of complaints disposed off. - NA

27. FINANCE

The Board of Directors thanks Indian Overseas Bank and State Bank of India for their continued assistance and co-operation.

28. LABOUR

The relationship with labour continues to be cordial. Your Directors place on record their appreciation of the devoted services of the Officers, Members of the Staff and Workers during the year.

29. COST AUDIT

As per Statutory requirement, there is no cost audit for the Textile Industry for the year 2014-15.

30. CORPORATE GOVERNANCE

Clause 49 is not, for the time being, applicable to your company, as your company's equity share capital and net worth is below the threshold limit prescribed under this Clause of the Listing Agreement and hence the Report on Corporate Governance is not provided.

31. AUDITORS

The Auditors of the Company M/s. S. Viswanathan retire and are eligible for reappointment. The Audit Committee of the Board of Directors has recommended their re-appointment. A Certificate under Section 139(1) of the Companies Act 2013 has been obtained from them.

By Order of the Board

Place : Chennai (BALAKRISHNA S) Date : May 26, 2015 Chairman & Managing Director


Mar 31, 2013

Ladies and Gentlemen,

The Directors present the Forty Ninth Annual Report of the Company alongwith the audited statement of accounts for the year ended 31st March 2013

WORKING RESULTS

Details Rs. Rs.

Profit before financial charges and

Depreciation from business operations. 13,98,60,102

Less:-

1) Financial Charges 2,48,82,519

2) Depreciation 2,52,38,952 5,01,21,471

Profit before Tax 8,97,38,631

Less: Provision for Current Year Tax 1,95,95,109

Eligible MAT Credit written back 1.01.09.387

94,85,722 Less: Provision for deferred tax liability 67,48,193 1,62,33,915

Profit for the year 7,35,04,716

Less: Loss brought forward 9,79,78,225

Loss carried forward 2,44,73,509 PRODUCTION AND SALES

Production of yarn during the year was 56.60 lakhs kgs as against 50.78 lakhs kgs in the previous year. The quantity and value of yarn sold were 55.32 lakhs kgs. and Rs. 113.75 Crores as against 51.62 lakhs kgs and Rs. 96.63 Crores.

TRADE PROSPECT AND OUTLOOK

The performance during the year under review was good. The cotton prices and yarn prices remained steady. The power availability from State Grid continues to be low. To maintain capacity utilization mills were compelled to buy power from third parties at high cost.

CURRENTYEAR

The performance during the current year continues to be good. Your Directors are doing their best to improve the performance.

DIRECTORS

Sri R.Padmanaban and Sri R.Sambasivan are due to retire by rotation and are eligible for reappointment. DIRECTOR''S RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies Act, 1956, the Directors would like to state that -

1. In the preparation of Annual Accounts for the year ended 31st March 2013, the applicable accounting standards had been followed along with proper explanation relating to material departures.

2. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year ended 31st March 2013, and of the profit of the company for that period.

3. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

4. The Directors have prepared the annual accounts on a going concern basis.

FINANCE

The Board of Directors wishes to thank Indian Overseas Bank and State Bank of India for their continued assistance and co-operation.

LABOUR

The relationship with labour continues to be cordial. Your Directors place on record their appreciation of the devoted services of the Officers, Members of the Staff and Workers during the year.

COST AUDIT

As per Statutory requirement, the Costing Records will be audited by the Cost Auditor to be appointed soon and he will be submit his report directly to the Central Government.

PUBLIC DEPOSIT

Your company is not accepting any deposit from public.

DETAILS TO BE DISCLOSED AS PER PROVISION OF SEC.217 OF THE COMPANIES ACT 1956

The information to be disclosed as per provision of Sec.217(1)(e) of the Companies Act 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in Annexure I. which forms part of this report.

As none of the employees was in receipt of remuneration in excess of the prescribed limit, there is no report under Section 217(2A) of the Companies Act, 1956.

CORPORATE GOVERNANCE

The report on Management''s Discussion and Analysis and the report on Corporate Governance are given in Annexure II & Annexure III respectively.

AUDITORS

The Auditors of the Company M/s. S.Viswanathan retire and are eligible for reappointment. The Audit Committee of the Board of Directors has recommended their re-appointment. A Certificate under Section 224(1 B) of the Companies Act 1956 has been obtained from them. By Order of the Board

Place : Chennai (R. SRIHARI)

Date : May 29, 2013 Chairman & Managing Director


Mar 31, 2012

The Directors present the. Forty Eighth Annual Report of the Company alongwith the audited statement of accounts for the year ended 31s1 March 2012

WORKING RESULTS

Details Rs. Rs.

Loss before financial charges and depreciation from business operations. -2,44,08,356

Less:-

1) Financial Charges 3,78,45,703

2) Depreciation 3,25,57,574

7,04,03,277 Loss before Tax -9,48,11,633

Add :- Provision for Current Year Tax 31,,000

Less :-Reduction in deferred tax liability -1,78,48,245

-1,78,17,245

Loss for the Year -7,69,94,388

Add :- Loss brought forward -2,09,83,837

Loss Carried forward -9,79,78,225

Balance Carried Over -9,79,78,225

PRODUCTION AND SALES

Production of yarn during the year was 50.78 lakhs kgs as against 50.45 lakhs kgs in the previous year. The quantity and value of yarn sold were 51.62 lakhs kgs. and Rs.96.63 Crores as against 50.13 lakhs kgs and Rs. 100.19 Crores.

TRADE PROSPECT AND OUTLOOK

As reported in the previous annual report the performance during the year under review was strained. The spinning industry faced unprecedented problems in many fronts. The inconsistent policy followed by Government of India on the export of cotton pushed the cost of cotton consumed during the year to highest level. The restrictions placed by Government on the export of yarn lowered the yarn price. There was no parity between the cost of cotton consumed and yarn prices. The power availability from State grid was low. Mills to maintain capacity utilization were compelled to buy power from third parties at high cost. The measures taken by Reserve Bank of India to contain the inflation pushed up the cost of borrowing to higher level. This has resulted in poor performance of all mills and your mill was not an exception.

CURRENTYEAR

The performance during the current year is showing improvement. The cotton price remained steady and the yam prices also remain at reasonable level. Your Directors are doing their best to maintain the performance at a reasonable level.

DIRECTORS -

Sri J M Grover and Sri Balakrishna S are due to retire by rotation and are eligible for reappointment. DIRECTOR'S RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies Act, 1956, the Directors would like to state that -

1. In the preparation of Annual Accounts for the year ended 31st March 2012, the applicable accounting standards had been followed along with proper explanation relating to material departures.

2. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year ended 31st March 2012, and of the profit of the company for that period.

3. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

4. The Directors have prepared the annual accounts on a going concern basis.

FINANCE

- The Board of Directors wishes to thank Indian Overseas Bank and State Bank of India for their continued assistance and co-operation.

LABOUR

The relationship with labour continues to be cordial. Your Directors place on record their appreciation of the devoted services of the Officers, Members of the Staff and Workers during the year.

COST AUDIT

As per Statutory requirement, the Costing Records are being audited by the Cost Auditor and he will be submitting his report directly to the Central Government.

PUBLIC DEPOSIT

Your company is not accepting any deposit from public.

DETAILS TO BE DISCLOSED AS PER PROVISION OF SEC.217 OF THE COMPANIES ACT 1956

The information to be disclosed as per provision of Sec.217(1)(e) of the Companies Act 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in Annexure I. which forms part of this report.

As none of the employees was in receipt of remuneration in excess of the prescribed limit, there is no report under Section 217(2A) of the Companies Act, 1956.

CORPORATE GOVERNANCE

The report on Management's Discussion and Analysis and the report on Corporate Governance are given in Annexure II & Annexure III respectively.

AUDITORS

The Auditors of the Company M/s. S.Viswanathan retire and are eligible for reappointment. The Audit Committee of the Board of Directors has recommended their re-appointment. A Certificate under Section 224(1 B) of the Companies Act 1956 has been obtained from them.

By Order of the Board

Place : Chennai (R. SRIHARI)

Date : August 08, 2012 Chairman & Managing Director


Mar 31, 2010

The Directors present the Forty Sixth Annual Report of the Company alongwith the audited statement of accounts for the year ended 31st March 2010

WORKING RESULTS

Details Rs. Rs.

Profit before financial charges and

depreciation from business operations. 5,70,10,664

Less:-

1) Financial Charges 4,04,06,280

2) Depreciation 4,01,30,723

8,05,87,003

Loss before Tax -2,35,76,339

Add - Provision for Current Year Tax 21,600

Less: Reduction in deferred tax liability -79,86,222

-79,64,622

Loss for the Year -1,56,11,717

Add:- Loss brought forward -4,94,80,000

Loss carried forward -6,50,91,717

Balance Carried Over -6,50,91,717



PRODUCTION AND SALES



Production of yarn during the year was 44.43 lakhs kgs as against 41.30 lakhs kgs in the previous year. The quantity and value of yarn sold were 47.94 lakhs kgs. and Rs.7584.79 lakhs as against 42.62 lakhs kgs and Rs. 6587.28 lakhs.

CAPITAL EXPENSES

The extension of factory building was completed at a cost of Rs.4.08 crores and the additional space will be used for addition of machines as and when the funds are available and on improvement of market conditions.

TRADE PROSPECT AND OUTLOOK

The first three quarters of the year under review continued to be difficult for the textile industry. Several factors such as inconsistency in demand for yarn, non-availability of power, high cost power and fuel adversely affected the performance of the company. Due to general revival of economy worldwide, the demand for yarn and sates realization of yarn in the last quarter were good. This has resulted in improvement in the performance in the last quarter. As the same trend continues the outlook for 2010-11 is good and your Directors are taking all possible steps for better performance.

DIRECTORS

Sri K S T Pani, after serving the Board as Director for nearly 20 years has resigned from the Board with effect from 22.04.2010. The company places on record its appreciation for his untiring and continuous efforts for the . development of the Company.

Sri J M Grover and Sri Baiakrishna S are due to retire by rotation and are eligible for reappointment.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies Act, 1956, the Directors would like to state that -

1. In the preparation of Annual Accounts for the year ended 31st March 2010, the applicable accounting standards had been followed along with proper explanation relating to material departures:

2. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year ended 31st March 2010, and of the profit of the company for that period.

3. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

4. The Directors have prepared the annual accounts on a going concern basis.

FINANCE

The Board of Directors wishes to thank Indian Overseas Bank and State Bank of India for their continued assistance and co-operation.

LABOUR

The relationship with labour continues to be cordial. Your Directors place on record their appreciation of the devoted services of the officers, members of the staff and workers during the year.

COST AUDIT

As per Statutory requirement, the Costing Records are being audited by the Cost Auditor and he will be submitting his report directly to the Central Government.

PUBLIC DEPOSIT

Your company is not accepting any deposit from public.

DETAILS TO BE DISCLOSED AS PER PROVISION OF SEC.217 OF THE COMPANIES ACT 1956

The information to be disclosed as per provision of Sec.217{1)(e) of the Companies Act 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in Annexure I. which forms part of this report.

As none cf the employees was in receipt of remuneration in excess of the prescribed limit, there is no report under Section 217(2A) of the Companies Act, 1956.

CORPORATE GOVERNANCE

The report on Managements Discussion and Analysis and the report on Corporate Governance are.given in Annexure II & Annexure III respectively.

AUDITORS

The Auditors of the Company M/s. S.Viswanathan retire and are eligible for reappointment. The Audit Committee of the Board of Directors has recommended their re-appointment. A Certificate under Section 224(1 B} of the Companies Act 1956 has been obtained from them.

By Order of the Board

Place : Chennai (R. SRIHARI)

Date : 28th May 2010 Chairman & Managing Director

 
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