Survive Sustain Secure - Shri Lakshmi · Pt. M.L. Nehru Adhivakta Bhawan, Civil Court, Kanpur Ph....

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SHRI LAKSHMI COTSYN LIMITED I I 26th Annual Report 2013-14

CORPORATE OVERVIEW

2-3 Corporate Information

4-5 In few words...

6-7 Chairman’s Message

8-9 Profi le of Directors

10-11 Important certifi cations

STATUTORY REPORT

12-19 Management Discussion and Analysis

20-21 Notice

22-29 Directors’ Report

30-39 Corporate Governance Report

FINANCIAL STATEMENTS

40-60 Standalone Accounts

61-73 Consolidated Accounts

Forward looking statementIn this Annual Report, we have disclosed forward-looking information to enable investors to comprehend our prospects and take investment decisions. Th is report and other statements - written and oral - that we periodically make, contain forward-looking statements that set out anticipated results based on the management’s plans and assumptions. We have tried wherever possible to identify such statements by using words such as ‘anticipate’, ‘estimate’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’ and words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent in assumptions. Th e achievements of results are subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated, or projected, readers should keep this in mind. We undertake no obligation to publicly update any forward-looking statements, whether because of new information, future events or otherwise.

You will come across

Survivingin the bad times.Our strong zeal keeps us going despite the external adversities. Determination, focus and positive mindset holds the key to encounter the challenging scenario.

Sustainingwith self-belief of better times ahead.We believe in our strengths, our technological innovations and one-of-its-kind product off erings that will do justice to our robust business model once we overcome the bad phase.

Securingwith capacities and production plan to reap the benefi ts of the good time.We have capacities to meet customer aspirations. Strong bounce back is evitable as we have all our plans ready to resurface and rebuild our growth story.

SSu

Company Secretary & Finance ControllerMr. Rakesh Kumar Srivastava

President WorksMr. B. R. Garg

Statutory AuditorsM/s PRADEEP & ASSOCIATES - Chartered Accountants

27/78 A, Gagan Deep Complex

Birhana Road, Kanpur-208001

Ph. No. (0512) 2313665

Internal AuditorsM/s AJAI SHANKER & COMPANY - Chartered Accountants

112 / 206-A, Swaroop Nagar, Kanpur - 208002

Ph. No. (0512) 2551249

Concurrent AuditorM/s M.M. BHASIN & CO. - Chartered Accountants

28/20, Ground Floor, East Patel Nagar, New Delhi-110008

Tel: +91 11 25736521, 25825254

Fax : +91 11 25751483

Cost AuditorMr. A. K. SRIVASTAVA

96 Harjender Nagar, Kanpur - 208007

Ph. No. 09839116989

Legal AdvisorMR. RAM GOPAL PANDEY - Advocate

Chamber No. – 17, First Floor

Pt. M.L. Nehru Adhivakta Bhawan, Civil Court, Kanpur

Ph. No. (0512) 2665598

MR. SHARAD KUMAR BIRLA - Advocate

7/17-A, II Floor, Parwati Bangla Road, Kanpur - 208002

Ph. No. (0512) 2531307

P. R. AdvisorS. K. ADVERTISERS

MIG F- 4 , Gujaini, Kanpur - 208022

Ph. No. (0512) 2282265

Bankers (CDR Members)1. Central Bank of India2. Syndicate Bank3. Union Bank of India4. Canara Bank5. Bank of Baroda6. Punjab National Bank7. Indian Bank8. State Bank of Travancore9. State Bank of Patiala10. State Bank of Mysore11. Exim Bank12. Oriental Bank of Commerce13. Allahabad Bank14. IDBI Bank15. Vijaya Bank16. Corporation Bank17. State Bank of Bikaner & Jaipur18. Axis Bank19. Saraswat Bank 20. Andhra Bank

Board of DirectorsDr. M. P. AgarwalChairman cum Mananging Director

Mr. Pawan Kumar Agarwal Joint Managing Director

Mr. Devesh Gupta Dy. Managing Director

Mr. Dileep BajajExecutive Director

Mrs. Sharda AgarwalExecutive Director

Mr. R. K. GargIndependent Director

Dr. G. N. MathurIndependent Director

Mr. Pramod Kumar SinghIndependent Director

CorporateInformation

CORPORATE OVERVIEW STATUTORY REPORT FINANCIAL STATEMENTS2

Monitoring Institution for LendersCentral Bank of India

CFB, Jeevantara Building, Parliament Street,

New Delhi - 110001

Security Trustee for Lenders Centbank Financial Services Limited

1st Floor, Link House, Bahadurshah Zafar Marg

New Delhi - 110002

Overseas Bankers 1. UCO Bank, Hongkong

2. UCO Bank, Singapore

Registered Offi ce19/X-1 Krishnapuram, G.T Road, Kanpur, U.P. 208007

Ph. No. (0512) 2402893, 2402733

Corporate Offi ceC-40, Sector-57, Noida. U.P. Ph. No. (0120) 4544780

Subsidiary Companies1. SLCL Overseas (FZC)

SAIF Zone P.O.8000, Sharjah, U.A.E.

2. Shri Lakshmi Defence Solutions Ltd.

Rahsoopur Gate No. 133, Tehsil Bindki,

Industrial Area, G.T.Road, Dist. Fatehpur

3. Synergy Global Home Inc.

160 Green Tree Drive, Suite 101, Dover

Kent – 19904, USA

Registrar & Transfer AgentsM/s Abhipra Capital Ltd.

GF-58-59 World Trade Centre,

Barakhamba Lane, New Delhi

Ph. No. (011) 23414629, 23413893

Mail ID: [email protected]

Units(a) MALWAN UNIT

UPSIDC Industrial Area

P.O. Malwan Dist. Fatehpur, U.P

Ph. No. (05181) 248669

(b) AUNG UNIT

P.O.Aung, GT Road, Dist. Fatehpur, U.P.

Ph. No. (05181) 251184 / 48

(c) ABHAYPUR UNIT

P.O.Aung, GT Road, Dist. Fatehpur, U.P.

(d) REWARI BUJURG UNIT

Village & Post - Rewari Bujurg

Pargana & Tehsil - Bindki, Dist. Fatehpur, U.P.

(e) NOIDA UNIT

C-40, Sector-57, Noida

Ph. No. (0120) 4722700

(f) ROORKEE UNIT

Dev Bhoomi Industrial Estate,

Village Banta Kheri, Tehsil Roorkee,

District Haridwar, Uttaranchal

Ph. No. (01332) 231961

(g) SONEPAT UNIT

Village-Libaspur, District- Sonepat, Haryana

Ph. No. (0130) 2381579

(h) SPINNING UNIT

UPSIDC Industrial Area,

P.O. Malwan Dist. Fatehpur, U.P

Websitewww.shrilakshmi.in

E-Mail [email protected]

Corporate Identity Number (CIN)L17122UP1988PLC009985

Demat Isin Nsdl & CdslINE851B01016

ListingBombay Stock ExchangeFloor 25, P.J. Towers, Dalal Street, Mumbai 400001

Ph. No. (022) 2272134

National Stock Exchange5th Floor, Exchange Plaza, Bandra (E), Mumbai 400051

Ph. No. (022) 26598100

Uttar Pradesh Stock Exchange“Padam Tower”, Civil Lines, Kanpur - 208002

Ph. No. (0512) 2338220

Scrip CodeBSE: 526049

NSE: SHLAKSHMI

Bloomberg CodeSLCL IN

Reuters CodeSHLK.BO

3ANNUAL REPORT 2013-14

SHRI LAKSHMI COTSYN LIMITED

In fewwords...Shri Lakshmi Cotsyn Limited (SLCL) is recognised amongst the leading players in northern India. It manufactures regular and technical textiles off ering world-class quality innovative product off erings to its customer.

SLCL is integrated across all verticals from yarn manufacture, dyeing to garmenting. Th e Company has also installed rise-husk based Captive Power generation capacity and has an in-house chemical auxiliary unit.

SLCL has a prominent presence across the globe and has developed a strong client base across USA, Canada, Latin America, UK, Sweden, France, Germany, South Africa, Italy, Spain, South Korea and Australia.

Brand umbrellaStar Track for Fusible Interlining,

Alisha for Embroidery fabric,

SVL for Zippers, Galaxy for

Clothing accessories, Weaves for

Home Furnishings and DYFI for

Garments.


A go-getter! Pioneered the technical innovations through the

development of Nanotechnology, Functional fabric

and Smart intelligent fabric

Enjoys strong relationship with marquee clients

including Fortune 500 Companies like Wal-mart and

Ikea

Approved supplier to Government defence

establishments (Indian Army, Navy, Air Force and

State Police) and is registered with several regulatory

agencies

Acknowledged leader in the fi eld of Microdot Fusible

Interlining Fabric, Blended Suiting & Shirting, Terry

Towels, Home Furnishing, Wider Width Sheeting,

Denim Fabrics, Embroidery / Lace / Quilted Fabrics,

Camoufl age fabrics and Industrial Fabrics like Nuclear

Bio-Chemical Fabrics, Infrared protective fabrics and

Bullet Proof Jackets etc

Ranked “Star Export House” by the offi ce of the

Joint Director-General of Foreign Trade, Ministry of

Commerce and Industry and is a preferred supplier

to Defense Research and Development Organization

(DRDO)

ISO 9001:2008 certifi ed by Transpacifi c Certifi cations

Limited.

Th e Company also off ers armoured and mine protection

vehicles (with 360° protection) through its 100% subsidiary

– Shri Lakshmi Defence Solutions Limited (SLDSL). It also

has an agreement with Ford India Limited for armouring

vehicle on Ford chassis. Besides, SLDSL is registered with

the some of India’s prominent defence establishments like:

Directorate General of Supplies & Disposal

Director General of Quality Assurance

Ministry of Defence (Navy)

Defence Material Stores R&D Est

Federation of Indian Export Organisation

RDSO (Indian Railways)

Indian Postal Department

Rich product portfolio with adequate capacitiesRegular textiles Technical textilesSuiting & Shirting24 Mn Mtrs

Wider width30 Mn Mtrs

Technical textile fabric12 Mn Mtrs

Flex fabrics17 Mn Mtrs

Denim40 Mn Mtrs

Comforters0.3 Mn pcs

Fusible interlining 25 Mn Mtrs

NBC Fabric10 Mn Mtrs

Bottom weights6 Mn Mtrs

Garments6.6 Mn pcs

Black out fabric 20 Mn Mtrs

IRR/MSCN fabric5 Mn Mtrs

Terry towels15,000 tons

Quilted fabric0.4 Mn Mtrs

Embroidery fabric0.8 Mn Mtrs

Mn: Million

1150Retail presence across multi-brand outlets (MBO) wherein the brands are marketed

8State-of-the-art manufacturing facilities at Malwan, Aung, Abhaypur, Rewari Bujurg, Rahsupur, Noida (Uttar Pradesh), Roorkee (Uttarakhand) and Sonepat (Haryana)



Chairman’sMessage

Dear Shareholders,

It is a general saying that when the situation becomes almost impossible, those who are truly strong are wise enough to pull out, rather than being totally decimated. Th e challenging situation faced by the Company over the recent past has made the Company even tougher and determined than ever. Our strong focus and growth-oriented mindset keeps us optimistic about reaping the benefi ts of the good times lying ahead.

Dr. M. P. AgarwalChairman cum Managing Director

We undertook aggressive expansions and capex for diff erent products with an investment of over Rs. 1,400 crore in the past few years.


Unfavourable moments

Your Company was on the growth path until 2011-12. We

undertook aggressive expansions and capex for diff erent

products with an investment of over Rs. 1,400 crore in

the past few years. However, the unavoidable external

circumstances in 2012-13 spoilt the good show we had put

up. Th e Company entered into fi nancial stress owing to

non-receipt of TUF Subsidy amounting to approx. Rs. 165

crore. Resultantly, the company opted the mechanism of

Corporate Debt Restructuring (CDR) in F.Y. 2012-13 which

is under implementation.

Th e CDR Package proposed that the Company will receive

Rs. 166 Crore on account of TUFS subsidy by June 30, 2013.

Hence, no additional working capital was demanded from

the Lenders in the package. Besides, CFSL fi nalized in TEV

Report that company requires a capex of Rs. 65.40 Crore for

installation of balancing equipments, mainly in Technical

Textile plant and Spinning plant to make the projects

operational. Th e funding was expected to be available to

the company by August 1, 2013, which would have allowed

the Company to revive the operations by middle of 2014.

Accordingly, the company requested all the Lenders to

release their share to the company.

However, time had its own role to play. Rather unfortunately,

neither the TUF Subsidy nor was priority loan disbursed by

the Banks on time. Th is led to shortage of suffi cient working

capital resulting in lower capacity utilization of around 20

to 30%.

In order to consolidate the operations, the company

liquidated old and damaged warehouse stocks of fabric and

yarn at throwaway price to avoid further deterioration. It

further set off old receivables at heavy discount. Th is added

further losses to the company and led to the erosion of entire

net worth in 9 months accounting year ended on March 31,

2014. Th e Company is obligated to fi le a reference with the

Board for Industrial and Financial Reconstruction (BIFR) in

terms of the provisions of Section 15(1) of Sick Industrial

Companies (Special Provisions) Act 1985.

Optimistic revival on cards

Despite such challenges, we are quite optimistic about the

revival of our business and operations. We are yet to explore

optimum and underlying potential of the projects we have

undertaken. Once the required funding is met for these

projects, we shall implement the following revival strategies

going ahead:

Marketing of technical textile products: We shall

aggressively market the high-margin technical textile

products to leverage the increasing demand from domestic

and global markets. We have innovative products in our

basket like fl ex fabrics, bio-chemical fabrics, black-out

fabrics, geo-grid febrics and MSCN, etc.

Infusion of funds through PE investors: Having

commissioned technical textile unit, we are confi dent to

have investors/private equity partners who believe in our

vision and potential to grow. We are in advance talks and

expect a good fund infusion.

Benefi ts of backward integration: Th e spinning unit

project at Malwan will acts as a backward integration for

the company. Th is will allow us to mitigate ourselves from

the volatile raw material price fl uctuations, resulting in a

savings of around Rs. 24 crore annually.

Government tenders: We are actively participating in

various government tenders and being already the supplier

of products to Indian Army, Navy, Air Force and State Police,

we have received many prestigious orders including order

from Wal-mart and Ministry of Defence for Rs. 35 crores.

End is not the end

Eff ort Never Dies (END) as changes are inevitable and

not always controllable. But, the eff orts are undertaken

to overcome the challenges. Considering the underlying

potential and the order book of Rs 250 crore, we are still

technically feasible and economically viable. Th e Company

is thankful to all the bankers, shareholders, customers,

suppliers and the employees who have been our strong

supporting hands in the challenging times. Th is inspires us

to move ahead and gives us the belief of reaping rich benefi ts

in the coming years.

Warm Regards

Dr. M.P.AgarwalDr. M.P. Agarwal is a fi rst generation entrepreneur and doctorate in textile costing, having over three decades of experience in this line of business.



Dr. M. P. AgarwalChairman & Managing Director

Experienced professional [Qualifi ed Cost Accountant (FICWAI) and Doctorate in Textile costing (PhD)] turned entrepreneur with over three decades of experience has been awarded by well-known Delhi Ratan Award and honoured by various intellectual forums.

Mr. Pawan AgarwalJoint Managing Director

He is Science graduate and has profi ciency in computer application, fabric processing and technical textiles. He has around 20 years of rich experience and controlling production activities, quality controls and marketing.

Profi le of Directors

Mr. Dileep BajajExecutive Director

Has more than 36 years of experience in Project & Financial Management especially in Textile Industry, looks after Corporate offi ce at Noida.

Mr. Devesh GuptaDeputy Managing Director

He has rich experience of 31 years in Textile Auxiliary manufacturing, Chemical Engineering, procurement and inventory management. He is entirely taking care of raw material procurement textile, chemical engineering process, effi ciency and tight control over cost.


Prof. (Dr.) G. N. MathurIndependent Director

An eminent senior scientist and has been the Ex-Director, Defence Materials and Stores Research and Development Establishment (DMSRDE), Post Graduate in Chemical Engg. from Canada university and Doctorate in Engg. from University of Detroite, U.S.A. Presently associated with the University of Arkansas, U.S.A. and is working on Nano Technology and its application in Textiles to manufacture Smart Textiles.

Mr. Pramod Kumar SinghIndependent Director

Mr. Pramod Kumar Singh has rich experience of over 26 years in the fi eld of media and Politics and has been a Former Advisor to Union Textile Minister. He is post graduate in Political Science from Allahabad University and M. Phil. (International Politics) from Jawaharlal Nehru University (JNU) New Delhi.He is post graduate in Political Science from Allahabad University and M. Phil.( International politics) –from Jawaharlal Nehru University (JNU) New Delhi.

Mr. R. K. GargIndependent Director

A Management graduate with over 35 years of experience. Has worked with DLF & DCM Shriram.

Mrs. Sharda AgarwalPromoter Director

Actively involved in the business of the Company and played an active role in the management of the Company.



Important certifi cations

NAME OF CERTIFICATE 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


Revenues by segment

2012-13 (%)

Suiting/Shirting 12.13%

Technical Textile Fabric 22.69%

Fusible Interling 9.19%

Quilted Fabric 0.35%

Embroidery Fabric 0.27%

Denim 15.89%

Terry Towel 14.77%

Home Furnishing 9.52%

Bottom Weight 3.00%

Nylon Fabrics 0.92%

Garments 1.48%

Comforters 0.46%

SLCL UAE (Subsidiary) 7.43%

SLDSL (Subsidiary) 0.96%

Syenrgy (Subsidiary) 0.93%

2013-14 (%)

Suiting/Shirting 14.45%

Tech. Textile Fabric 10.06%

Fusible Interling 9.11%

Quilted Fabric 0.57%

Embroidery Fabric 0.36%

Denim 8.75%

Terry Towel 19.49%

Home Furnishing 13.85%

Bottom Weight 3.63%

Nylon Fabrics 1.01%

Garments 2.16%

Comforters 1.01%

Misc. / Rewari Sales 0.80%

SLCL UAE (Subsidiary) 12.18%

SLDSL (Subsidiary) 2.53%

Syenrgy (Subsidiary) 0.05%

Management Discussion and Analysis

Company overview

Shri Lakshmi Cotsyn Limited (SLCL) is

amongst the largest textile players in

northern India. It has established itself

as a manufacturer of cotton and blended

fabrics, readymade garments, technical

textiles, embroidered fabric, quilts,

fusible interlining, denim, terry towels,

bottom weights, home furnishing etc.

Besides, the Company also manufactures

high margin technical and safety textiles

(Water Repellent Bed Linen, Vitamin

E bed Linen, Fire Retardant Fabrics,

Organic Bedspread, Breathable Fabrics,

NBC (Nuclear, Bio-Chemical) Fabrics,

MSCN (Multispectral Camoufl age Nets)

Fabric, Flex Fabric, Black out & ECW

(Extreme Cold Weather) Fabric.


Th e Company has eight state-of-the-art manufacturing

facilities located across India. Th e DSIR approved R&D

capabilities and its talented design team has enabled the

Company to develop and deliver innovative textile products.

Global textile industry

Th e Global textile industry has fl ourished with a great

momentum since the exclusion of global quota scheme. It has

showed more dynamic growth in the last decade in terms of

trends in the global production, supported by technological

innovation and expansions. Th e key factors for this dynamic

growth are the economic revival post recession, rising

demand for nonwoven disposable textile products, increasing

demand from promising regions, especially Asia-Pacifi c, and

increasing demand for environmentally-friendly fi bers.

India is world’s second largest producer of textile and

apparel after China. China is slowly reducing its focus on

textiles and this has had a positive impact on the Indian

textile and apparel industry. Even Bangladesh, Vietnam and

Turkey’s emerging textile industries are capturing a large

portion of the global demand. According to Euromonitor

International, Cotton yarn production across 40 leading

producers rose from 31 million tonnes in 2008 to 46 million

tonnes in 2013, growing at 8.4% annually.

Graphs to see below

SLCL’s extensive marketing and distribution network

spans across India and abroad. It has some of the globally

recognised clientele like IKEA, Wal-Mart, Macy’s, Bed

Bath & Beyond, Loblaws, JC Penney, Shopco, Meijer’s,

Lacoste, Frette, Westport, HBC, El-Corte Ingles and Sheet

Street, among others. Th e Company is exploring further

possibilities of adding more clients in the US and Europe.

Indian textile industry

Overview

India’s textile industry is one of the leading textile industries

in the world, exporting to over 100 countries. It contributes

a signifi cant 17% to India’s overall export earnings and

employs over 45 million people directly, making it the second

largest source of employment after agriculture. Abundant

availability of raw materials such as cotton, wool, silk and

jute as well as skilled workforce have made the country a

sourcing hub and second largest producer of textiles and

garments globally. Th e growth and all round development

of this industry has a direct bearing on the improvement of

the India’s economy.

24% 8% USD223bn 14% 4% 27%Global spindle capacity

Global rotor capacity

Potential size of the Indian textiles and apparel industry by 2021

Contribution to IIP

Contribution to GDP

Foreign Exchange Infl ows

(Source: Technopak, Ministry of Textiles)

Top 10 textile producers (%)

China

India

Pakistan

Turkey

US

Brazil

Tajikistan

Egypt

South Korea

Vietnam

Rest

2008

69.4

9.4

9.4

2009

72.9

8.7

9

2010

74.6

7.2

9

2011

74.7

97.

6

2012

77.1

8.3

6.9

2013

77.7

86.

4

Textile production across 40 countries

2008

31

2009

33

2010

36

2011

39

2012

43

2013

46

Source: Euromonitor International



Despite slow recovery in USA and EU coupled with

sustained cost of infl ationary inputs, the industry put up

a recommendable performance in 2013. Th e Government

policy of diversifi cation of market and product base has

helped the industry explore newer markets. Th e industry

also leveraged raw material strengths and sustained

better compliance practices that attracted the buyers and

international brands across globe to source from India.

India’s share in Global Textiles trade has increased

phenomenally by 17.5% in the year 2013 compared to

the previous year. While the global textile industry grew a

mere 4.7%, India registered a growth of 23% beating China

and Bangladesh which has registered 11.4% and 15.4%,

respectively.

Graphs to see below

During 2013, global textiles exports were estimated to the

tune of USD 772 billion with India commanding 5.2% of

the share. Th e reason for India’s export growth is largely

attributed to the strong rebound of the Apparel and Clothing

sector, contributing 43% of the total exports. Moreover, the

industry has also witnessed a spurt in investment during

the last fi ve years. Th e industry has attracted foreign direct

investment (FDI) worth Rs 6,710.94 crore (USD 1.11 bn)

between April 2000 to February 2014.

Opportunities

Th e Indian textiles and apparel market is on course towards

achieving an estimated market value of USD 223 bn by 2021

largely owing to following factors:

Favourable demographics

India’s growing population has been key driver of textile

consumption growth in the country. Th e population is

largely skewed towards the age group of 21-40, i.e., the

young population. Th is segment is always updated about

the changing tastes and trends. Th e rising female workforce

further complements this trend.

Graphs to see below

Rising income levels

Rising income levels, specially in the rural segment, has

played a key role towards the revival of domestic demand

from this sector. Th e upward push on demand from the

income side is set to continue.

Graphs to see on next page

Technical textiles

Th e technical textile segment is largely driven by healthcare

and infrastructure sectors. Th e cost-eff ectiveness, versatility

and durability of the products has further made the

Government frame favourable policies to support further

growth. It has already allotted fund of USD 1 bn to the SMEs

and has also exempted custom duty of the raw materials

used by this sector. According to the study conducted by

PHD Chamber of Commerce, India’s technical textiles

market, which is currently estimated at USD 14 bn, is

likely to reach a level of USD 32 bn by 2023. Diversifi cation

towards non-woven technical textiles and forging global

partnerships with counterparts shall further drive growth

in this segment.

Home textiles

Over the past few years, India has gained a signifi cant market

share in the Global Home Textiles segment accounting for

7% of global home textile trade. Super quality off erings

Source: UN Comtrade

India’s textile industry growth was higher than the global average (%)

Global

4.7

India

23

China

11.4

Bangladesh

15.4

Growth in India’s population (bn)

1980

0.69

1990

0.85

2000

1.03

2010

1.20

2012

1.23

2018F

1.33CAGR: 1.8%


has further made India a leader in US and UK, accounting

for two-third of their exports. Going ahead, the industry is

expected to expand at a CAGR of 8.3% and is expected to be

valued at USD 8.2 bn by 2021.

Denim

Rising number of working women, lifestyle changes and

evolving culture has driven the demand for western wear,

specifi cally jeans amongst women. Growing brand awareness

and consciousness has given push to the organized denim

market.

Increased penetration of organised retail

With rising disposable incomes, the retail sector has

experienced a rapid growth in the past decade. Several

international players like Marks & Spencer, Guess and Next

have made their mark in the Indian market. As a result, the

Indian Retail Market, estimated at USD 520 bn in 2013 is

expected to grow at a CAGR of 13% to reach around US$ 950

billion by 2018.

E-commerce

Increasing numbers of players are expected to get into

e-commerce bandwagon over the next decade, to take

advantage of the growing consumer acceptance of

researching and shopping for products online. It is estimated

that around 30-40% of the overall retail in India’s top 75

cities will be done online in the next 7-10 years. Increasing

Internet penetration, usage of smartphones, tablets,

long working hours and a growing appetite among Indian

consumers shall be the key drivers for online shopping.

Challenges

Th e Indian textile industry has its own set of challenges

that may hinder the growth momentum. Some of these

challenges include:

Consistent availability of Medium-to-high skill labour

High interest rates and low government support on

capital

Smaller domestic market, huge dependence on export

Limited Managerial skills to manage large-scale

operations and after-sales service

Lack of infrastructure (power, ports, roads and railways),

supply chain management, IT systems, high lead-time

and customs clearance takes time

Investments in R&D

Red tapism and procedural delays (including in judicial

proceedings)

Competition from Bangladesh and Vietnam could erode

India’s share in global trade

Government initiatives

Government’s support with favourable policies has been

a key ingredient for the growth of this industry. Here are

some of the initiatives:

Technology Upgradation Fund Scheme

Th e scheme ensures a 5% interest rate reimbursement

charged by the banks and fi nancial institutions to ensure

credit availability for technology upgradation. Th e scheme

also proposes 5% reimbursement of interest charged by

the fi nancial institutions, provides safeguard against

exchange rate fl uctuations (not exceeding 5% per annum)

and 5% interest reimbursement and 10% capital subsidy for

specifi ed fi nishing machinery, garmenting machinery and

technical textiles machinery.

BUDGET HIGHLIGHTS, 2014-15Th e Union Budget 2014-15 recognized the aspirations of a new India which is looking towards the government for decisively moving towards high growth and low infl ation. Following are the initiatives announced for the textile industry:

Allotted Rs 50 crore rupees to set up a Trade Facilitation Centre and a Crafts Museum to develop and promote handloom products and carry forward the rich tradition of handlooms of Varanasi

Allotted Rs 500 crore for developing a Textile mega-cluster at Varanasi and six more at Bareilly, Lucknow, Surat, Kutch, Bhagalpur and Mysore

Allotted Rs 20 crore to set up a Hastkala Academy for the preservation, revival, and documentation of the handloom or handicraft sector in PPP mode in Delhi

Allotted Rs 50 crore to start a Pashmina Promotion Programme (P-3) and development of other crafts of Jammu & KashmirSource: IMF

GDP per capita, current prices Growth

Trends in per capita income (USD)

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

E20

14F

2015

F20

16F

2017

F20

18F

2,000

1,600

1,200

800

400

31%

21%

11%

1%

-9%



Scheme for Integrated Textile Parks

Th e Ministry of Textiles plans to emphasise the weaving

sector through the Scheme of Integrated Textile Parks. Th e

scheme encourages the establishment of Greenfi eld textile

infrastructure where the State Government will provide

technical advisory and fund 40% of the project. Central

Government will provide the balance fi nance along with

land acquisition and infrastructure support.

Integrated Skill Development Scheme

Th is scheme was launched in October 2010 to address the

training needs of the textiles workers to meet manpower

requirement. It planned to train over 2.7 Mn persons over 5

years with an estimated cost of Rs 19.5 Bn.

Technology Mission of Technical Textiles

Th e mission aims at address infrastructure improvement

in terms of testing facilities, market development support,

skilled manpower, R&D and defi ning specifi cations and

standards for technical textiles, among others. Besides,

it also focuses on supporting other activities like business

start-ups, workshops, social compliances, market

development for institutional and export business and

promoting contract research and development through IITs

/ TRAs / Textile Institutes.

Focus Market Scheme

Th e government has incorporated several measures in the

Focus Market Scheme. As per the new measures, textile

exporters would be able to avail duty credit scrip on export

to 26 additional countries apart from existing destinations.

Th is will encourage exporters to explore markets outside

the traditional destinations of the US and EU. Th ese

developments are expected to widen the export markets for

textile exporters and gradually limit the over dependence on

select markets.

Indian defence sector

India has been the world’s top arms buyer for the past three

years as it attempts to replace ageing Soviet-era military

hardware with modern weapon systems and aircraft from

various sources. Considering the increasing security needs,

modernisation of the armed forces is critical to enable them

to play their role eff ectively in the defence of India’s strategic

interests. In order to give domestic industry a greater role

in producing modern equipment with foreign investments,

the Government raised military spending for 2014-15 to

Rs.2.29 lakh crore, marking an increase of 12.5% over the

previous fi scal, and opened the domestic defence industry

to 49% foreign direct investment to boost the development

of indigenous hardware.

SWOT Analysis

Strengths

Promoters have rich experience in the textile industry

and they are familiar with the change in demand pattern

Established a good reputation in the market as reliable

manufacturer and supplier of quality products

Technically sound with ultra modern machineries

Positioned itself as an integrated Multi product player of

textile value chain

Strong niche product portfolio for domestic and

international brands

Economies of scale through complete integration

Strong distribution network in the market for its

various ranges like Polly fi lled quilted bed covers, home

furnishing products, embroidered dress material and

microdot interlining fusing fabric

Global blue chip clients include Ikea, Wal-Mart, Sams

Club, Falabella , BHV, Casino, Primark, Edgars, Frette,

Myers, Loblaws, El-Corte Ingles, Myers, E-Mart, etc.

Some of the major textile players in India have not been

able to make it to the IKEA approved list of suppliers

State-of-the-art large manufacturing facilities at 8

locations

Strong presence in technical and safety textiles (water

repellent bed sheets, mosquito repellent bed sheets, fi re

retardant fabrics etc.) with defense applications

Strong presence in defense related textiles (uniforms,

camoufl age textiles to armored vehicles)

Strong R&D capabilities proven over a decade with

launch of innovative products

Multiple brands for diff erent segments

Market leader in fusible interlining segment (30% plus

market share)

High-margin Technical Textile set-up

Weakness

Sensitive to the change in raw material prices may aff ect

the profi tability of the company

Low brand visibility in readymade garments due to lack

of exclusive stores

Relatively high leverage

Since more than 90% of the sales is domestic in nature,

the company may be losing out on the opportunity cost

viz a viz the export market which is considered to be

very lucrative


Less focus on marketing and creating brand equity for

its products

Opportunity

Potential market and ability to capture the growth by

aggressive sale promotion policy

Opportunity to launch high quality fabrics in healthcare

using nanotechnology

Opportunity to add more global blue chip clients in US

and Europe

Opportunity to cater to defence forces in India and

abroad in higher value added areas – armoured vehicles,

technical and safety textiles

High demand present for technical textile in domestic as

well as international market and present

Machineries and set-up can be customized to produce

diff erent products according to the client requirement

Technical textile products can be used as an application

across Auto component, construction, home furnishing,

defence, hygiene and medical, components of furniture,

shoes & clothing, railways and aerospace, packaging,

sports & leisure segments

Th reat

Increasing competition from unorganized sectors and

other peers

Competition from neighbouring countries and in

particular from China, Pakistan and Turkey in respect of

Home textile and Technical Textile products

Fluctuations in raw material (cotton) prices pose a

threat, as its production depends upon availability of

raw material

Increasing competition from existing players in textiles

and defense related products

Th e fragmented nature of the industry and compared to

international standards our capacities are small

Availability of all the varieties of cotton, yields is one of

the lowest in the world and inconsistent in quality

Slow improvement in quality to international standards

and adoption to fast changing fashion demands

Financial review

Accounts prepared on a historical cost basis, based on

accrual method of accounting in accordance with applicable

accounting standards issued by Th e Institute of Chartered

Accountants of India.

Th e table given below shows a comparative analysis of key

fi nancial fi gures on consolidated basis :

Amount in Rs crore

Particulars 2013-14 (9 months)

2012-13

Net sales 880.08 1,922.19

Exports sales 220.63 276.82

EBIDTA 177.76 91.55

PBT (624.58) (367.69)

PAT (624.67) (415.54)

Quality

Quality commitment is aligned with globally

benchmarked quality assurance protocols

Th e Company understands the underlying importance

of quality and pays attention to each detail

Th e procurement team keeps a check on the cost and the

quality of the raw materials

Th e manufacturing and packaging team does not leave

any stone unturned in checking the quality before

releasing product into the market

Th e Company’s TQM enhances further quality awareness

Advanced TQM methodologies deliver consistent and

internationally benchmarked quality standards

Products move in numbered batches; a thorough

batch-wise inspection is conducted in line with client

specifi cations

In the absence of such parameters, the Company follows

internal protocols

Th e TQM teams issue a green card if all parameters are

compiled with

In the event of non-compliance, the batch is withdrawn

and a red card is issued for subsequent analysis and

rectifi cation

Research & Development

Th e in-house Research and Development department

enables the Company to achieve cost and product

leadership

Th e 50-member strong team keeps itself regularly

updated to adapt to the latest technologies

Department of Science and Industrial Research,

Ministry of Science and Technology have recognised the

R&D

Th e Government of India has further recognised the

Company as a centre for skill upgradation of Industrial

workers.



Human Resource Development

Your Company believes that safe and healthy working

conditions at factories and other premises are as necessary

and as important as production, productivity and quality.

Your Company complies with all applicable statutory

provisions pertaining to health and safety and takes all

possible measures to prevent accidents and occupational

hazards. Th e Company provides the necessary information,

promotes awareness and provides training to all employees

to carry out their tasks in a safe and responsive manner.

We ensure healthy working environment and proper

housing, medical facilities, gratuity and Insurance (GPA)

benefi ts to the employees for the betterment of our people.

We have developed a Housing Colony for our Workers/ staff

with all necessary amenities like water purifi er, parks etc.

at Malwan. We adhere to strict labour compliance to all

working conditions and benefi ts as directed under Indian

Labour Laws.

Health & Safety Measures

We assure that workplace environments are safe and easy for

individual employees to work in so that every employee can

have peace of mind and concentrate on their work, allowing

them to maximize their willingness and creative power. As

we stably conduct all our business activities, we will pursue

safety and health companywide and seek to assure the safety

of our employees and promote and maintain their health.

While maintaining a record free from accidents and

disasters, we assure the safety of employees and local

communities.

In addition to abiding by laws, regulations and other

requirements for occupational safety and health, we

make continuous eff orts to improve our standards of

safety health management.

Th rough education and activities that raise awareness

about safety and health, we will seek to improve the

safety and health awareness of all employees.

We promote the improvement of physical and mental health

and the creation of workplace environments where people

can work with peace of mind.

Value To Community

As a responsible corporate citizen, Shri Lakshmi Cotsyn

Limited believes in enduring healthy relationships with the

entire workforce and has successful history of collaboration

with communities at large. Th e company has consciously

chosen the path that has led it to create better working

environment and facilities for workers, especially females.

On the course to sustainable development, Shri Lakshmi

Cotsyn Limited takes care of environment too through its

policies that ensure zero discharge ETP, Agro based turbines

for power generation and reduced pollution

Value To Th e Country

Th e evolving nature of the threat faced by military forces

and police personnel has increased the importance of quality

force protection over any other times.

Th e Shri Lakshmi Group is dedicated to meeting those needs,

as well as those of homeland security and allied military

forces, with innovative protective products that enable war

fi ghters to safely accomplish their missions such as :

Development of High Visibility Fabrics for Night time

applications in various Police and Para military forces.

Shri Lakshmi has risen to the challenges and has created

mine-protected vehicles and B.P. jackets (successful for AK

47 and AK 56 for nine bullet fi ring as against traditional

fi ring of six bullets). Our products have been well received

by all state police forces.

R&D and product innovationsTh e Company is developing nanotechnology fabrics and smart textiles with sensor technology to monitor fatigue, stress, heart condition, blood pressure etc. Besides, it also manufactures various technical textile fabrics which include high altitude fabric, PU-Coated nylon fabrics, fl ex fabrics, carbon fabrics and IRR fabrics. Th e Company recently introduced membrane laminated fabrics for rain & extreme cold weather ECW Clothing which do not allow water to come in but allows body sweat and body heat to go out in vapour form, thus saving an individual from getting wait as well as getting a frost bite in extreme cold situations.

Company believes that safe and healthy working conditions at factories and other premises are as necessary and as important as production, productivity and quality.


International Standards

Th e Shri Lakshmi Groups believes that strong ethics

bring good business and to attain that it complies with all

necessary international standards.

Your Company adhere to following International Standards:-

ISO 9001: 2008- Quality Management System.

ISO 14001: 2004 - Environmental Management System.

OHSAS 18001: 2007 -Occupational Health &

Management Safety System.

GOTS -Global Organic Textile Standard

Organic Exchange Blended Standard.

Oeko-Tex Standard- for Skin Friendly Chemical.

REACH- Substance of Very High Concern for Chemical

Management.

FLO-CERT - Fair Trade Standards

SA-8000-Social Accountability.

Awarness Programmes

Organized Traffi c Awareness Programme.

Modern Techniques Awareness and awareness in

relation to the use of safety machine

Cyber Security Awareness

Security Awareness Training to all the employees of the

company.

Organized Environmental Awareness Programme.

Awarness among workers in relation to negative eff ects

of tobacco and forming a healthy living habits

Environment & Social Responsiblilty

Th e Company undertakes numerous initiatives, involving

employees and providing direction for participation in

addition to the offi ce environment.

SLCL’s concern for the environment is refl ected in the

following initiatives:

In campus greening.

Encouraging judicious use of natural resources.

Recycling, pollution control to ensure clean air and

water and reduction of landfi ll wastes.

Developed 30 acres of land for organic product

development.

In-house Chemical auxiliary unit and 16 MW rice-husks

based captive co-generation power plants, resulting in

optimum resource utilization.

Your Company has followed “Green Initiative in Corporate

Governance” by allowing paperless compliances through

electronic mode. To contribute to the Corporate Social

Responsibility, initiatives have already been taken

and the Company also continues to pursue its mission

for environmental excellence and constantly explores

opportunities to improve ecology & environment.




NoticeNOTICE is hereby given that the Twenty-Sixth Annual General Meeting of the Members of SHRI LAKSHMI COTSYN LIMITED will be held on Thursday, 31st July, 2014 at 11:30 a.m. at the Registered Office of the Company at 19/X-1, Krishnapuram, G.T. Road, Kanpur-208007 to transact the following business :

ORDINARY BUSINESS

1. To receive, consider and adopt the Profit & Loss Account for the year ended March 31st, 2014, (9 months period) Balance Sheet as at that date together with the Directors’ Report and Auditor’s Report thereon.

2. To appoint a Director in place of Shri G N Mathur, who retires by rotation and being eligible, offers himself for re-appointment.

3. To appoint a Director in place of Shri Pramod Kumar Singh, who retires by rotation and being eligible, offers himself for re-appointment.

4. To re-appoint M/s Pradeep & Associates, Chartered Ac-countants as Auditors, who shall hold office from the con-clusion of this Annual General Meeting until the conclu-sion of the next Annual General Meeting of the Company and to fix their remuneration.

SPECIAL BUSINESS

5. To consider and if thought fit, to pass, with or without modification/s, the following resolution as an Ordinary Resolution :

“RESOLVED that the Company do approach Board for In-dustrial and Financial Reconstruction (BIFR) for approval of its rehabilitation scheme in view of erosion of net worth and the company being declared sick under the Sick In-dustrial Companies (Special Provisions) Act, 1985 (SICA), as amended ” .

NOTES :

1. The relative Explanatory statement pursuant to Section 102 of the Companies Act, 2013 in respect of the busi-ness set out in this Notice is annexed hereto.

2. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEET-ING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY..

The instrument appointing proxy, in order to be effec-tive, should be deposited at the registered office of the Company not less than forty-eight hours before the com-mencement of the meeting.

• The Register of members and share transfer books of the Company will remain closed from Tuesday, 29th July 2014 to Thursday, 31st July 2014 (both days inclusive) for the purpose of Annual General Meeting of the Company.

• The members who hold shares in dematerialized form are requested to bring their client ID and DP ID numbers for easy identification of attendance at the meeting.

• All documents referred to in the accompanying No-tice are available for inspection at the Registered Of-fice of the Company during business hours on all working days upto the date of Annual General Meet-ing.

• 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, Board of Direc-tors of your Company have given their consent for not attaching the balance sheet of the subsidiary companies.

• The Annual Accounts of the subsidiary companies shall also be kept for inspection by any shareholders in the registered office of the holding company and of the subsidiary companies concerned. The Com-pany shall furnish a hard copy of details of accounts of subsidiaries to any shareholder on demand.

• Corporate Members are requested to send to the Company, a duly certified copy of the Board resolu-tion/Power of Attorney, authorizing their representa-tives to attend and vote at the Annual General Meet-ing.

• Members are requested to produce the attendance slip duly signed as per the specimen signature re-corded with the Company for admission to the Meet-ing Hall.

• Shareholders, who have not dematerialized their shares as yet, are advised to have their shares de-materialized to avail the benefit of paperless trading.

• Pursuant to the provisions of Section 124 of the Companies Act 2013, as amended, dividend for the financial year 2006-07 and the dividends for the subsequent years which remain unpaid or un-claimed for a period of 7 years will be transferred to Investor Education and Protection Fund (IEPF).

Registered office: By Order of the Board 19/X-1, Krishnapuram, G.T. Road, Kanpur RAKESH KUMAR SRIVASTAVADate : 30th May 2014 Company Secretary cum Finance Controller

21CORPORATE OVERVIEW ANNUAL REPORT 2013-14


Shareholders who have so far not enchased the divi-dend warrant(s) are requested to make their claim to the Secretarial Department at Registered Office of the Company or office of the RTA, failing which the unpaid/unclaimed amount will be transferred to the IEPF on its due date. It may also be noted that once the unpaid/ unclaimed dividend is transferred to the IEPF as above, no claim shall lie against the IEPF/the Company in respect of such amount by the shareholder.

• In all correspondence with the Company/RTA, mem-bers are requested to quote their folio numbers and in case their shares are held in the dematerialized form, they must quote their DP ID and Client ID number.

• Members desirous of obtaining any information con-cerning the accounts and operations of the Com-pany, are requested to write to the Company at least seven days before the date of the meeting in order to enable the management to make the information available at the meeting, if the Chairman so permits.

• All correspondence relating to change of address, transfer/transmission of shares, bank mandate, divi-dend and all other matters relating to the sharehold-ing in the Company may be made directly to the Registrar and Transfer Agent (RTA) of the Company M/s Abhipra Capital Ltd. GF-58-59 World Trade Cen-tre, Bara Khamba Lane, New Delhi.

In terms of the Articles of Association of the Company, Dr G.N. Mathur and Shri Pramod Kumar Singh are retiring by rotation and being eligible, offer themselves for re-appointment. The relevant details in this respect pursuant to Clause 49 of the Listing Agreement are furnished hereunder:

I. Dr. G. N. Mathur - He is an eminent senior scientist and has been the Ex-Director, Defence Materials and Stores Research and Development Establishment (DMSRDE), Post Graduate in Chemical Engg. from Canada univer-

sity and Doctorate in Engg. from University of Detroite, U.S.A. Presently associated with the University of Arkan-sas, U.S.A. and is working on Nano Technology and its application in Textiles to manufacture Smart Textiles.

Dr G.N. Mathur does not hold shares in the Company in his name and none of the share in the Company is held by him for any other person on a beneficial basis.

II. Shri Pramod Kumar Singh - Mr. Pramod Kumar Singh has been a Former Advisor to Union Textile Minister and has a rich experience of over 25 years in the field of media and Politics. He is post graduate in Political Science from Alla-habad University and M. Phil. (International politics) –from Jawaharlal Nehru University (JNU) New Delhi.

Important Communication to Members:

Green Initiative in the Corporate Governance

The Ministry of Corporate Affairs has taken a “Green Initiative in the Corporate Governance” by allowing paperless compli-ances by the Companies and has issued a circular stating that services of notice/documents including Annual Report can be sent by e-mail to its members. In order to overcome the delivery aspect of Notice’s, documents and in the spirit of circular issued by the Ministry of Corporate Affairs permit-ting the Companies to adopt the “Green initiative in Corporate Governance” by allowing paperless compliances through elec-tronic mode, the Ministry has permitted the corporate enti-ties to send through electronic mode its Notices convening the General Meetings, Financial Statements, Directors’ Report, and Auditors’ Report etc. in electronic form, to the email ad-dress provided by you. To support this green initiative of the Government in full measure, Members in respect of electronic holding are requested to inform any changes in their registered e-mail addresses through their concerned Depository Partici-pants and Shareholders holding shares in physical shares are requested to inform their valid e-mail address to the Company at [email protected] and [email protected]. Please note that Annual Report of the Company will also be available at the company’s website at www.shrilakshmi.in.

Item No. 5:

Due to non receipt of TUFS subsidy, operations of the com-pany have affected badly and capacity utilization during the year was 35%. Company achieved a turnover of Rs.753.76 crores in 9 months period i.e. July’ 13 to March’ 14 as against Rs. 1767.27 crores in 2012-13 (12 months). ). The profit after tax was Rs. (624.15) crores in 2013-14(9 months) as com-pared to Rs. (408.63) crores in 2012-13 (12 months). Fur-

ther in order to consolidate the operations, company has sold out the liquidated old and damaged stock at throwaway price to avoid further deterioration in the status of fabric/yarn lying in warehouse and also settling the old receivable by allowing quality discount and taking material back, which has added further losses to the company. Resultantly the entire net worth of the company has been eroded in 9 months accounting year ended on 31st March 2014 and it is obligatory on the part of the company to file a reference to BIFR.

EXPLANATORY STATEMENT PURSUANT TO PROVISIONS OF SECTION 102 OF THE COMPANIES ACT, 2013

Registered office: By Order of the Board 19/X-1, Krishnapuram, G.T. Road, Kanpur RAKESH KUMAR SRIVASTAVADate : 30th May 2014 Company Secretary cum Finance Controller


Directors’ Report Your 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)

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 fi-nancial stress hence operations of the units were restricted between 20% to 30% 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 di-rect 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

Particulars2013-14 (9 months) Stand Alone

2012-13(12 months)Stand Alone

2013-14 (9 months)Consolidated

2012-13(12 months)

Consolidated

Sales and other income 753.76 1767.27 880.08 1946.54

Operating profit before interest, depreciation and tax

(177.29) 94.60 177.76 91.55

Less:

Interest and other financial charges 196.71 354.49 199.48 356.73

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 deferred tax) - 47.85 0.09 47.85

Profit/ Loss after tax (624.15) (408.63) (624.67) (415.54)

Proposed dividend - - - -

Dividend tax - - - -

Balance carried to balance sheet (624.15) (408.63) (624.67) (415.54)



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 Re-structuring 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 op-erations 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 prior-ity 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 qual-ity 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 procure-ment/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 FINAN-CIAL 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 provi-sions 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 COT-SYN LTD.:

In Financial Year 2007-08, the company had issued 5-year Zero-coupon Foreign Currency Convertible Bonds of the nomi-nal 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 redemp-tion 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 inter-est FCCB of USD 2.80 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, Al-lahabad 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 Out-


standing 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 recover their loan, which the company is contesting before DRT also.

EXPORTS

Despite all adverse situations, the Company recorded an ex-port (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 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 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, UAE. It is engaged in trading of 100% Polyester fabric material, gar-ments and alike products and also exporting to other coun-tries, besides trading in Sharjah itself.

M/S SLCL Overseas FZC, Sharjah U.A.E., a wholly-owned sub-sidiary, 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. The Company has intro-duced 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 securi-ty threats from naxalities groups and other terrorists’ activities.

During 2013-14 (9 months), the Company recorded sales of Rs. 21.63 Crores as compared with Rs. 18.49 Crores in 2012-13, 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

Indian Army, Navy, Air Force, Ordinance Factories

Directorate General of Supplies & Disposal Director General of Quality Assurance

All central paramilitary State Police forces

Forces Ministry of Defence (Navy) 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.

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 2013-14 as compared with a previ-ous year’s profit of Rs. 0.11 crores.

EXEMPTION UNDER SECTION 129 OF THE COMPANIES ACT, FOR NOT ATTACHING THE BALANCE SHEET OF THE SUBSID-IARY 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 129 of the Companies Act, 2013 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

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, Spin-ning and Yarn Dyed Shirting’s projects cannot be fully commis-sioned 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 of-fered 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 men-tioning 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 be-longing 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 Cent-bank 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 facili-ties, Short term bank facilities and Non-Convertible Debenture (NCD) as CARE D (Single D) due to the stressed liquidity posi-tion of the Company vide their letter dated March 28, 2014.

CRISIL Ratings has assigned the rating of M/s Shri Lakshmi De-fence 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 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 envi-ronmental 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 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 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 lim-its prescribed, hence the particulars of employees under the Companies (Appointment and Remuneration of Mana-gerial Personnel) Rules, 2014, are not given in the report.

(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 134(3)clause (m) of the Companies Act, 2013 read with the Companies (Dis-closure 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 Sec-tion 134 of the Companies Act, 2013, your Directors confirm that:

1. In the preparation of the annual accounts, the appli-cable accounting standards were followed and there are no material departures;

2. The Directors selected such accounting policies and applied them consistently and made judge-ments and estimates that were reasonable and pru-dent 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 main-tain 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 go-ing 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 ef-fectively.

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.



Registered office: For and on behalf of the Board 19/X-1, Krishna Puram,G.T. Road, Kanpur DEVESH GUPTA DR M P AGARWALDate : 30th May, 2014 Deputy Managing Director Chairman and Managing Director

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 dedica-tion 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.


Additional Information as required under the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988:

(A) CONSERVATION OF ENERGY

(a) Energy conservation measures taken:

The Company is engaged in the continuous process of energy conservation through new and improved measures for operation and maintenance to reduce wastage and make efficient use of energy. Some of the measures undertaken in this direction on a con-tinuous basis are:

• Synchronization of steam turbine power and DG plants to facilitate shifting of part / full electrical load against each other in case of any emer-gency thus avoiding power failure;

• Installation of cooling water recovery system where water from machines is collected and reused for process requirements such as heat recovery system on CRP machine;

• Use of energy saving lighting arrangement on shop floor and roads within factory premises;

• Optimum use of compressors during lean period of operations.

• Monitoring of high energy consuming equip-ments closely for better control;

• Regular checking and monitoring of electrical load on all motors and repair of the defective ones;

• Installation of power factor controllers/capaci-tors to conserve energy;

• Inspection and immediate rectification of air leak-ages in weaving, knitting and preparatory;

• Installation of centralized cooling tower for saving of energy of C.T. fans and CT pumps.

(b) Additional investment and proposals being imple-mented for reduction of consumption of energy:

Your Company planned several measures, which are at various stages of implementation. Some of them are:

1) 8 MW bio-mass captive co-generation power plant has been set up at Abhaypur for reliable captive supply;

2) 7 MW Bio Mass based captive power plant com-missioned at Malwan.

3) Undergoing trial for switching the fuel from coal to municipal wastes brackets.

4) To conserve the environment, we are planning to install Fly Ash Making Brick and Power plant.

5) Installed 10 Tons Per Day pilot plant for making Sodium Silicate by using Boiler Fly Ash, to con-serve the environment

6) Proposed to increase the Capacity of Effluent Treatment plant to bifurcate the Denim & Process house discharge effluent. In this way we will treat more effectively effluent and load on ground wa-ter level will be reduced.

7) Proposed to utilize each and every shed of the plant for rain water harvesting.

8) Proposed to install total plant condensate recov-ery system, due to which Boiler MB water re-quirement will be reduced.

9) Undergoing trial for switching the fuel from coal to biomass in the existing 8 MW captive co- gen-eration plant and Thermic Fluid Heater at Malwan unit.

10) In-house Chemical auxiliary unit, resulting in opti-mum resource utilization.

11) Monitoring and increasing scale and scope of measures taken in the past.

Impact of measures at (a) and (b) above for reduction of en-ergy consumption and consequent impact on the cost of pro-duction of goods

The above measures initiated / being initiated for energy conservation resulted in improving the energy efficiency at all plants and savings in consumption of power and the cost of production. Your Company will continue to implement planned measures for optimization of energy conservation and efficien-cy.

(B) TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVA-TION:

Efforts in brief, made towards Technology Absorption, Adapta-tion and Innovation:

The Company sets target for technology improvement in ac-cordance with global competition. Company’s R&D strategy is anchored on the development and speedy commercialization of globally competitive products, processes and technologies

Annexure ‘A’ to the Directors’ Report



through best-in-class research interventions backed by world-class infrastructure.

It has a strong R&D cell comprising of about 20 active mem-bers and constant R & D pursuits keep going on towards de-velopment of better products, cost reductions and better utili-zation of waste products.

On the above lines a project for conversion of 50 tons per day of RHA (Rice Husk Ash Waste Product) into value added products like L.S.S (Liquid Sodium Silicate) and PPT Silica was planned and a pilot scale plant for processing of 6 tons per day of R.H.A into 10 tons per day of L.S.S has already been com-missioned which shall be later scaled upto 50 tons per day of R.H.A conversion, once full financial benefits of the pilot scale project are established and achieved.

Further R&D efforts have been made in the area of Technical Textiles where in house technology has been developed for manufacturing of N.B.C (Nuclear/ Biological/ Chemical –War-fare) protective suits on commercial scales. One trial order has already been executed and another big order has been awarded to your Company by the M.O.D.

Other Regular Benefits derived as a result of above efforts:

(i) The development of several new products and line devel-opments:

(ii) Product quality improvement and better stability.

(iii) Increased use of alternative fuels

(iv) Cost reduction in an inflationary scenario.

(v) Reduction in specific energy consumption.

**Note: Looking at the present financial constraints during this period, all the above efforts have been put on hold which will be resumed later when financial status comes back to normal.

Imported Technology (imported during the last 5 years): Nil

Imported Technology (imported during the last 5 years): Nil

(C) FOREIGN EXCHANGE EARNINGS AND OUTGO

Foreign exchange earnings and outgo

2013-14 (9 months)

2012-13(12 months)

i) Total earnings of foreign exchange

13597.26 25183.71

ii) Total outgo in foreign ex-change

1174.48 9565.23

(Rs. in Lacs)

Registered office: For and on behalf of the Board 19/X-1, Krishna Puram,G.T. Road, Kanpur DEVESH GUPTA DR M P AGARWALDate : 30th May, 2014 Deputy Managing Director Chairman and Managing Director


Corporate Governance Report(Annexure to and forming integral part of Directors’ Report of the Company)

COMPANY’S PHILOSOPHY ON CODE OF CORPORATE GOVER-NANCE

The Company’s philosophy on Corporate Governance envisag-es attainment of the highest levels of transparency, account-ability and equity in all facets of its operations and in all its interactions with its stakeholders including shareholders, em-ployees, lenders and the Government. Corporate governance helps to serve corporate purposes by providing a framework within which stakeholders can pursue the objectives of the organisation most effectively. The Company will continue to focus its resources, strengths and strategies to achieve its vi-sion of creating a rich product mix in a largely matured Indian textile market. The Company is in compliance with the require-ments of the guidelines on corporate governance stipulated under Clause 49 of the Listing Agreements with the Stock Ex-changes.

The Board plays a critical role in overseeing how the manage-ment serves the short and long-term interests of shareholders and other stakeholders.

Development of Corporate Governance guidelines is a continu-ous process which evolves over a period of time and under-

ATTENDANCE OF DIRECTORS AT THE BOARD/COMMITTEE MEETINGS AND THE LAST ANNUAL GENERAL MEETING

Name and designation of the Director

Category

of Directorship

Number of Board-meetings attended

Atten-dance at the last

AGM

Number Direc-torship* in other

companies

Committee position held**

Chairman Member

Dr Mata Prasad Agarwal (Chairman and Managing Director)

Promoter Executive Director

6 Yes 3 1 Nil

Shri Pawan Agarwal (Joint Manag-ing Director)

Promoter Executive Director

6 Yes 3 Nil 1

Shri Devesh Gupta (Deputy Man-aging Director)

Executive Director 6 Yes 1 Nil 1

Shri Dileep Bajaj Executive Director 1 - Nil Nil 1

Smt. Sharda Agarwal Promoter Executive Director

6 Yes 2 Nil Nil

Shri R K Garg Non-Executive Indepen-dent Director

3 - Nil Nil 3

Dr. G N Mathur Non-Executive Indepen-dent Director

5 - 1 1 2

Shri Pramod Kumar Singh Non-Executive Indepen-dent Director

1 - Nil 2 1

Mr R S Srivastava#1 Non-Executive Indepen-dent Director

- - - - -

Shri K.D. Gupta#2 Non-Executive Indepen-dent Director

- - - - -

goes changes to suit the changing times and needs of the business, society and the nation.

Development of Corporate Governance guidelines is a continu-ous process which evolves over a period of time and under-goes changes to suit the changing times and needs of the business, society and the nation.

BOARD OF DIRECTORS

During the year 2013-14 the Company had an optimum com-bination of Executive and Non-Executive Directors as per the Corporate Governance requirements. The Board of Directors of the Company Consists of eminent persons with considerable professional expertise and experience in business and indus-try, finance, management etc. As on 31st March, 2014 the Board comprised 8 Directors.

NUMBER OF BOARD MEETINGS HELD AND THE DATES THERE-OF

During the accounting year 2013-14, 6 meetings of Board of Directors were held. The meetings were held on 30th Septem-ber 2013, 14th November 2013, 05th December 2013, 11th January 2014, 15th March 2014 and 31st March 2014. The maximum time gap between any two meetings was not more than four calendar months.



The role of the Committee includes the following:

(a) Overseeing the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible;

b) Recommending the appointment and removal of external auditors, fixation of audit fee and approval of payment of fees for any other services rendered by the auditors;

c) Reviewing with the management the financial statements before submission to the Board, focusing primarily on:

• Any changes in accounting policies and practices

• The going concern assumption

• Major accounting entries based on exercise of judge-ment by management

• Significant adjustments arising out of audit

• Compliance with Accounting Standards

• Compliance with Stock Exchange and legal require-ments concerning financial statements

• Related party transactions

• Qualifications in draft audit report

• Report of the Directors & Management Discussion and Analysis;

(d) Reviewing with the management, external and internal auditors, the adequacy of internal control systems and the Company’s statement on the same prior to endorsement by the Board;

(e) Reviewing the adequacy of the internal audit function, in-cluding the structure of the internal audit department, staffing and seniority of the official heading the depart-ment, reporting structure, coverage and frequency of in-ternal audit;

(f) Reviewing reports of internal audit, including that of wholly owned subsidiaries, and discussion with internal auditors on any significant findings and follow-up thereon;

Composition

The Company has an Audit Committee comprising three Di-rectors, all being Non-Executive-Independent namely Shri R K Garg, Dr. G N Mathur and Shri Pramod Kumar Singh. The Audit Committee is chaired by Shri Pramod Kumar Singh. The Com-pany Secretary acts as the Secretary to the Audit Commit-tee. Mr. Pradeep Gupta, M/s Pradeep & Associates, Statutory Auditors, was invited to be present at all the Audit Committee meetings.

Notes:

1. *Other Directorships of only Indian Public Limited Compa-nies were considered pursuant to Clause 49 of Listing Agreement.

2. **Committee positions of only four committees namely Audit Committee, Investors’ Grievance Committee, Re-muneration Committee and Finance Committee have been mentioned.

#1 resigned on 30th September 2013

#2 resigned on 30th September 2013

BOARD PROCEDURE:

The Board meetings are generally scheduled well in advance and the notice of each Board Meeting is given in writing to each of the Directors. All the items on the Agenda are accompanied by notes giving comprehensive information on the related sub-jects. The Board is also free to recommend the inclusion of any matter for discussion in consultation with the Chairman. The Board’s role, functions, responsibility and accountability are clearly defined. In addition to matters statutorily requir-ing Board’s approval, all major decisions involving policy for-mulation, strategy and business plans, annual operating and capital expenditure budgets, new investments, details of Joint Ventures, sale of business unit/ division, compli-ance with statutory/regulatory requirements, major accounting provisions and write offs are considered by the Board.

INFORMATION PLACED BEFORE THE BOARD

Information placed before the Board of Directors broadly covers the items specified in Clause 49 of the Listing Agreement and such other items which are necessary to facilitate meaningful and focused deliberation and issues concerning the Company and taking decision in an informed and efficient manner. Be-sides, the Board of Directors has complete access to all infor-mation of the Company, as and when necessary.

COMMITTEES OF THE BOARD

Audit Committee

The Audit Committee is empowered, pursuant to its terms of reference, inter alia, to:

• Investigate any activity within its terms of reference and to seek any information it requires from any employee;

• Obtain legal or other independent professional advice and to secure the attendance of outsiders with relevant experi-ence and expertise, when considered necessary.


Details of the attendance at the meetings are as follows :

Serial No. Name Attendance

1 Shri R.K. Garg 2

2 Dr G N Mathur 3

3 Shri Pramod Kumar Singh 3

Internal Auditors and Internal Audit System

The Company appointed a firm of Chartered Accountants M/s Ajai Shanker & Company of Kanpur as Internal Auditors to re-view the internal control systems of the Company and report thereon. The report of Internal Auditors is periodically reviewed by the Audit Committee of the Board and necessary directions are issued whenever required.

The Company continues to maintain a comprehensive Internal Audit System for assessing risk, adding values and improv-ing your organization’s operations and also to ensure timely financial reporting.

Name Designation All elements of r e m u n e r a t i o n package i.e. sal-ary, perks, bene-fits, bonuses and pension, among others (Rs. in lacs) (2013-14) (9 Months )

Per formance linked incen-tives along with the per-formance cri-teria (in Rs.)

All elements of re-muneration pack-age i.e. salary, perks, benefits, bo-nuses and pension, among others (Rs. in lacs (2012-13) (Annual)

Stock, option with details, if any, and whether issued at discount as well as the period over which accrued and over which exercis-able

Dr M.P Agarwal Managing Director 36.00 NIL 48.00

Presently the Com-pany does not have any stock option scheme

Mr Pawan Kumar Agarwal

Joint Managing Director

22.50 NIL 30.00

Mr Devesh Narain Gupta

Dy. Managing Director

18.00 NIL 24.00

Smt. Sharda Agar-wal

Executive Director 11.25 NIL 15.00

Mr Dileep Bajaj Executive Director 18.00 NIL 24.00

Cost Auditor

The Company appointed Mr. A. K. Srivastava of Kanpur as Cost Auditor of the Company who submits his report to the Audit Committee for consideration.

Remuneration Committee

The Remuneration Committee was constituted by the Board to recommend/review the Remuneration package of the Man-aging/Wholetime Directors. The recommendations of the Re-muneration Committee are considered and approved by the Board subject to shareholders’ approval.

The Remuneration Committee comprises three Non-Executive Directors, namely Shri Pramod Kumar Singh , Shri R. K. Garg and Dr G. N. Mathur, all of them being Independent, including the Chairman of the Committee. During 2013-14, the meeting of the Remuneration Committee was held on December 5th, 2013 and were attended by all the Directors.

Details of remuneration paid to all the Directors for the year ended on 31st March, 2014:

a) Executive Directors (Managing/Wholetime Directors)

Details of remuneration paid for the year ended 31st March, 2014 to Managing/Whole time Directors are as follows :



b) Non-Executive Directors

During 2013-14, the Company did not pay any remuneration to Non-Executive Directors except sitting fees to each Non-Executive Director for attending meetings of the Board of Di-rectors and Committees thereof. The criterion for payment of sitting fees to Non-Executive Directors is based on the provi-sions of the Companies Act, 1956 and is well within the statu-tory ceiling fixed in this regard.

Finance Committee

The Committee comprises four Executive Directors chaired by Dr. M P Agarwal. The Finance Committee met 13 times during the year. The Committee is primarily looking after the day-to-day business activity of the Company within Board approved directions/framework. Details of the attendance at the meeting are as follows :

Serial No. Name Attendance

1 Dr M P Agarwal 13

2 Shri Pawan Kumar Agarwal 11

3 Shri Devesh Narain Gupta 10

4 Shri Dileep Bajaj 08

Shareholders/ Investor’s Grievance Committee

In compliance with Clause 49 of the Listing Agreement, the Shareholders /Investors’ Grievance Committee has been con-stituted by the Board for a speedy disposal of grievances/com-plaints relating to shareholders/investors.

The Shareholders’/ Investors’ Grievance Committee comprises three Non-Executive Directors namely, Mr. R. K. Garg, Dr. G.N. Mathur and Mr. Pramod Kumar Singh and is chaired by Mr. R. K. Garg. The Company Secretary acts as the Secretary of the Committee.

Compliance officer

The Board designated Mr. Rakesh Kumar Srivastava, Company Secretary-cum-Finance Controller as the Compliance Officer of the Company for complying with the requirements of the list-ing agreements and SEBI Laws.

Investor Grievance Redressal:

The Committee, inter alia, approves issue of duplicate share certificates and oversees and reviews all matters connected with transfer/transmission of shares, dematerialization/ rema-terialisation of shares , consolidation of share certificates etc.. Committee also looks into redressal of shareholders’/inves-tors’ complaints related to non-receipt of Annual Reports, non-receipt of declared dividend etc. In addition, the Committee advices on matters which can facilitate better investor services and relations.

GREEN INITIATIVE FOR PAPER LESS COMMUNICATIONS:

The Ministry of Corporate Affairs (MCA) vide its circulars bear-ing no.17/2011 dated 21.04.2011 and 18/2011 dated 29.04.2011, has taken a “ Green Initiative in Corporate Gov-ernance” by allowing paperless compliances by companies through electronic mode . Companies can now send docu-ments and various notices (including notice calling Annual General Meeting, Audited Financial Statements, Directors’ Re-port, and Auditor’s Report etc) to the shareholders through electronic mode to the registered e-mail addresses of share-holders. To contribute to the Corporate Social Responsibility, initiatives have already been taken and communication/ letter in this respect were already been mailed to the shareholders at their mailing addresses registered with the Company.

Risk management

The Company manages risks as an integral part of its deci-sion making process. The Company has adequate system of internal control commensurate with its size and business operation at all units and the corporate head-quarter to safeguard and protect its assets against losses. The Board of Directors and the Audit Committee continuously have a close eye on the risks by adopting the following procedure:

• Identification of risks

• Assessment of risk

• Risk control and mitigation

The risk control and mitigation is being done, keeping in view the risk appetite of the Company.

Audit Committee provides quarterly updates to the Board of Directors. The head of departments are responsible for identifying, reviewing and escalating risks as well as preparing and executing action plans within their areas of re-sponsibility.

Whistle Blower Policy

The Company seeks to maintain ethical code of conduct and behavior in elevating on the framework for reporting unethical / improper conduct and endeavors to take suitable steps on investigating, reviewing and reporting the same.

a) Applicability :

This policy is applicable to the following :

1. Customers

2. vendors

3. Employees

4. Directors and other Managerial Staff

b) Disclosure/Reporting:-

Every Stakeholder i.e. Director, employee, customers, vendor etc. of the Company are free to disclose in writ-


ing, the violation of rules, regulations and laws or unethical conduct to their immediate supervisor/notified person.

The Directors and Senior Management of the Company maintains confidentiality of any such information rendered and also ensures that Whistle Blower Policy adopted by

Postal ballot

No special resolution requiring a postal ballot was proposed last year. At the ensuing Annual General Meeting there is no resolution proposed to be passed by way of Postal ballot.

Disclosures

a. TThere were no materially significant related party transac-tions i.e., transactions of the Company of material nature, with its promoters, the Directors or the management and their subsidiaries or relatives, among others, that may have potential conflict with the interests of the Company at large. The related party transactions are duly disclosed in the “Notes to the Annual Accounts” of the Company.

b. There were no cases of non-compliance by the Company, penalties, strictures imposed on the Company by stock exchanges or SEBI or any statutory authority, on any mat-ter related to capital markets, during last three years.

c. The Company did not adopt any whistle blower policy. However, the Company did not deny access to any

personnel to approach the management or the Audit Committee on any issue

d. The Company complied with all the mandatory require-ments of Clause 49 of the Listing Agreement.

However, the Company did not deny access to any per-sonnel to approach the management or the Audit Com-mittee on any issue

d. The Company complied with all the mandatory require-ments of Clause 49 of the Listing Agreement.

Means of communication

The quarterly, half-yearly and annual results are submitted to the listed stock exchanges and are published in leading news-papers viz. Business Standard (English and Hindi), The Finan-cial Express (English and Hindi), Jansaptah, in terms of the requirements of Clause 41 of the Listing Agreement. The Com-pany also displays the presentations made by it to Institutional investors and to analysts on its website along with the official news releases.

Year ended Time Day Place Number of special resolution passed

5th February 2014 11:30 am Wesnesday 19/X-1, Krishnapuram, G.T. Road, Kanpur 2

Extra-Ordinary General Meetings

Details regarding the Extra-Ordinary General Meetings of the Company held during the year 2012-13 are as follows:

Company is not under discriminatory dominance.

General Body Meetings

Details regarding the Annual General Meetings of the Company held during the last three years were as follows:

Year ended Date Time Day Place Number of special resolutions passed

June 30, 2011 December 30, 2011

11:30 am Friday 19/X-1, Krishnapuram, G.T. Road, Kanpur

-

June 30, 2012 December 31, 2012

11:30 am Monday 19/X-1, Krishnapuram, G.T. Road, Kanpur

3

June 30, 2013 December 30,2013

11:30 am Monday 19/X-1, Krishnapuram, G.T. Road, Kanpur

-

** The Management discussion and analysis Report is given separately forming part of the Annual Report.**

Category Number of shares held Percentage of share holding

(A) Promoters’ holding*

- Indian promoters 13563200 47.64

- Foreign promoters - -

Sub-Total (A) 13563200 47.64



Category Number of shares held Percentage of share holding

(B) Non-promoters’ holding

(1) Institutional investors

- Mutual Funds - -

- Financial Institutions/Banks 150000 0.53

- Central Govt./State Govt. - -

- Venture Capital Funds - -

- Insurance companies - -

- Foreign Institutional investors 1742236 6.12

- Foreign Venture Capital investors - -

- Foreign/ Financial Institutions/Banks - -

Sub-total (B)(1) 1892246 6.65

(2) Others

- Domestic companies 6635069 23.30

- Individuals 4044358 14.20

- HUF 206194 0.72

- NRI’s 143204 0.50

- Clearing members 39564 0.14

- Trust - -

- Foreign Corporate bodies 1946810 6.84

Sub-total (B) (2) 13015199 45.71

Total Public Shareholding (B)= (B)(1)+(B)(2) 14907445 52.36

Grand total (A)+(B) 28470645 100.00

The diagrammatic representation of the shareholding pattern as on 31st March, 2014:

DomesticCompanies

23.30%

Banks 0.53%

FIIs, NRIs, Foreign Body Corporates

13.46%

Individuals 14.20%

Promoters & Pro-moters Group

47.64%

HUF0.72%

Clearing Members0.14%


Shareholding of nominal value of Shareholders Shares amount

Rs. Rs. Number % to Total Rs. % to Total

(1) (2) (3) (4) (5)

Up to - 5000 7889 83.801 11785110 4.140

5001 - 10000 706 7.499 5734970 2.014

10001 - 20000 364 3.867 5503250 1.933

20001 - 30000 124 1.317 3169230 1.113

30001 - 40000 52 0.552 1870380 0.657

40001 - 50000 50 0.531 2340230 0.822

50001 - 100000 88 0.935 6311270 2.217

100001 and above 141 1.498 247992010 87.104

Total 9414 100.000 284706450 100.000

Month Open High Low CloseNo. of No. of Total *Spread

Shares Trades Turnover H-L C-O

Jul 13 23.50 34.00 23.50 30.00 40,386 501 11,86,661 10.50 6.50

Aug 13 30.00 30.00 20.15 20.45 31,321 102 7,60,539 9.85 -9.55

Sep 13 19.45 26.90 16.90 25.80 75,661 356 15,79,385 10.00 6.35

Oct 13 26.40 28.90 19.10 19.10 86,701 307 20,87,411 9.80 -7.30

Nov 13 18.25 21.25 12.30 12.30 1,74,550 464 29,60,588 8.95 -5.95

Dec 13 11.69 15.95 11.69 14.50 1,65,721 254 21,73,497 4.26 2.81

Jan 14 14.13 17.85 13.85 14.30 48,722 290 7,50,131 4.00 0.17

Feb 14 13.80 16.10 12.86 12.90 52,292 203 7,36,328 3.24 -0.90

Mar 14 12.90 16.35 12.28 14.53 1,82,122 1,063 27,04,140 4.07 1.63

*Spread

H-L: High-Low

C-O: Close-Open

Distribution of share holding as on 31st March, 2014:

Stock market price data for the year 2013-2014 at BSE SENSEX:

Scrip Code: 526049 Company : SHRI LAKSHMI COTSYN LTD. Period: July 2013 to March 2014

(All Prices in Rs.)



General share holder information:

26th Annual General Meeting (for year ended March 31, 2014

Day: ThursdayDate: July 31, 2014Time: 11:30 am Venue: 19/X-1, Krishnapuram, G.T. Road, Kanpur

Accounting calendar years For the accounting year 2013-14, the interim and final results were announced on: a. 1st quarter results - Second week of November 2013b. Yearly audited results - First week of December 2013c. 2nd quarter results- Last week of March 2014d. 3rd quarter & Annual results(9 months) – Fifth week of May 2014

Date of book closure Tuesday, 29th July, 2014 to Thursday, 31st July, 2014 (both days inclusive).

Listing on stock exchange a) National Stock Exchange of India Ltd. b) Bombay Stock Exchange Ltdc) U. P. Stock Exchange Ltd.

Registrar and Transfer Agents M/s Abhipra Capital Ltd. GF-58-59 World Trade Centre, Barakhamba Lane, New Delhi-110033Ph. no.:+91 11-42390909, Fax:+91 11-27215530Email: [email protected]; [email protected]

Address for correspondence 19/X-1, Krishnapuram, G.T. Road, Kanpur-7 (U.P.)Ph. no.:+91 512-2401492, 2402733, 2404181, Fax no.: +91 512-2402339E-mail: [email protected], Website: www.shrilakshmi.in

Share transfer system Applications for transfer of shares in physical form are received by the Company’s Registrar and Transfer Agent, Abhipra Capital Ltd., who in consultation and approval of the Company, executes the requests of transfer/transmission of shares.

Nomination facility Shareholders holding shares in physical and desirous of making a nomination in respect of their share holding in the Company as permitted U/S 109A of Companies Act, 1956 may submit their request to the Company in form 2B of the Companies (Central Government’s) General Rules and Forms, 1956, prescribed for the purpose.

Code of conduct The Company’s Board laid down a Code of Conduct for all Board members and senior management of the Company. All Board members and designated senior management personnel have affirmed compliance with this Code of Conduct. A declaration to this effect, signed by Dr M P Agarwal, Chairman-cum-Managing Director, is enclosed at the end of this Report.

Dematerialization of shares and liquidity ISIN Code - equity shares: INE 851 B01016As on Mach 31, 2014, 93.09 % of the total equity shares of the Company were dematerialized. Trading in equity shares of the Company is permitted only in dematerialized form, as per the notification issued by the Securities and Exchange Board of India (SEBI).

DECLARATION

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, I, Dr. M P Agarwal, Chairman and Managing Director of Shri Lakshmi Cotsyn Ltd, declare that all Board members and Senior Executives of the Company have affirmed their compliance with the Code of Conduct for the accounting year 2013-14.

Place : Kanpur Dr. M P AgarwalDate : 30th May 2014 Chairman and Managing Director


TO

THE MEMBERS,

M/S SHRI LAKSHMI COTSYN LIMITED

19/X-1, Krishna Puram, G.T. Road, Kanpur

We have examined the compliance of conditions of Corporate Governance by M/S SHRI LAKSHMI COTSYN LIMITED for the nine months period ended 31st March, 2014 as stipulated in Clause 49 of the Listing Agreement of the said Company with the Stock Exchange(s).

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the Financial Statement of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that Company has com-plied in material respects with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.

We further state that such Compliance is neither an assurance as to the future viability of the Company nor the efficiency or ef-fectiveness with which the management has conducted the affairs of the Company.

For PRADEEP & ASSOCIATES Chartered Accountants

P. K. GUPTADate : 30th May 2014 PartnerPlace : Kanpur Membership No. 70492

Certificate

Pradeep & Associates 27/78 ‘A’ ‘Gagan Deep’Chartered Accountants Ground Floor, Birhana Road Kanpur – 208001 Phone: Office: 2313665 Residence: 2540609



I, Dr M P Agarwal, Chairman & Managing Director of Shri Lakshmi Cotsyn Limited, hereby certify to the Board that:

(a) I have reviewed financial statements and the cash flow statement for the year ending March 31st, 2014 (9 months) and that to the best of my knowledge and belief:

(i) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

(ii) These statements together present a true and fair view of the Company’s affairs and are in compliance with existing Accounting Standards, applicable Laws and Regulations.

(b) There are, to the best of my knowledge and belief, no transactions entered into by Shri Lakshmi Cotsyn Limited during the year which are fraudulent, illegal or violative of the Company’s code of conduct.

(c) I am responsible for establishing and maintaining internal controls for financial reporting in Shri Lakshmi Cotsyn Limited and we have evaluated the effectiveness of the internal control systems of the company pertaining to financial reporting. We have disclosed to the Auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.

(d) I have indicated to the Auditors and the Audit Committee

(i) Significant changes in internal control over financial reporting during the year;

(ii) Significant changes in Accounting Policies during the year and the same have been disclosed in the notes to the finan-cial statements; and

(e) I certify that there have been no instances of significant fraud of which we have become aware and the involvement therein, of management or any employee having significant role in the Company’s internal control systems.

(f) I affirm that we have not denied any personnel, access to the Audit Committee of the company (in respect of matters involv-ing alleged misconduct).

Place : Kanpur Dr M P Agarwal

Date : 30th May 2014 Chairman & Managing Director

CEO/CFO Certification


Consolidated Financial Section



To The Members ofShri Lakshmi Cotsyn Limited 19/X-1,Krishnapuram,G.T. RoadKanpur

We have audited the accompanying financial statements of M/s Shri Lakshmi Cotsyn Ltd. which comprise the Balance Sheet as at 31st March 2014, and the Statement of Profit and Loss and Cash Flow Statement for the nine months period then ended, and a summary of significant accounting policies and other explanatory information.

Management is responsible for the preparation of these finan-cial statements that give a true and fair view of the financial po-sition, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in clause (2) of section 2 of the Companies Act, 2013. This responsibil-ity includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in ac-cordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and per-form the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evi-dence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor consid-ers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of account-ing policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is suf-ficient and appropriate to provide a basis for our audit opinion.

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2014

b) in the case of the Statement of Profit and Loss Account, of the loss for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

1. As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by the Central Government of India in terms of section 143 of the Companies Act, 2013, we give in the Annexure a statement on the mat-ters specified in paragraphs 4 and 5 of the Order.

2. As required by section 143 of the Companies Act, 2013, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were nec-essary for the purpose of our audit;

b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books

c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Account-ing Standards referred to in clause (2) of section 2 of the Companies Act, 2013;

e) On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a direc-tor in terms of section 164 of the Companies Act, 2013.

f) Since the Central Government has not notified the date at which the cess is to be paid under Section 269 of the Companies Act 2013, for the purpose of rehabilitation or revival or protection of assets of the Sick Industrial Com-pany, nor has issued any rules prescribing the manner in which such cess is to be paid, Hence no cess is due and payable by the Company.

For PRADEEP & ASSOCIATESChartered Accountants

FRN:001254C CA. P.K. GuptaPlace: Kanpur PartnerDate: 30th May 2014 Membership No.:070492

Independent Auditor’s Report


On the basis of such checks as we considered appropriate and according to the information and explanation given to us dur-ing the course of our audit, we report that:

1. (a) The company has maintained proper records showing full particulars including quantitative details and situa-tion of its fixed assets.

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such veri-fication.

(c) In our opinion and according to the information and explanations given to us, no fixed asset has been dis-posed during the year and therefore does not affect the going concern assumption.

2. (a) As explained to us, inventories have been physically verified during the year by the management at rea-sonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the manage-ment are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrep-ancy was noticed on physical verification of stocks by the management as compared to book records.

3. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted loans, se-cured or unsecured, to companies firms or other par-ties listed in the register maintained under section 189 of the Companies Act, 2013. Consequently, the provisions of clauses iii (b), iii(c) and iii (d) of the order are not applicable to the Company.

(e) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not taken loans from companies, firms or other parties listed in the register maintained under section 189 of the Companies Act, 2013. Thus sub clauses (f) & (g) are not applicable to the company.

4. In our opinion and according to the information and expla-nations given to us, there is generally an adequate inter-nal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. a) Based on the audit procedures applied by us and ac-cording to the information and explanations provided by the management, there are no contracts or ar-rangements referred to in section 189 of the Compa-nies Act, 2013

b) This Clause is not applicable as stated above.

6. The Company has not accepted any deposits from the public covered under section section 73 of the Compa-nies Act, 2013

7. As per information & explanations given by the manage-ment, the Company has an internal audit system com-mensurate with its size and the nature of its business.

8. As per information & explanation given by the manage-ment, maintenance of cost records has been prescribed by the Central Government under section 128 of the Companies Act, 2013and we are of the opinion that pri-ma facie the prescribed accounts and records have been made and maintained.

9. (a) According to the records of the company, undisput-ed statutory dues including Investor Education and Protection Fund, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other statutory dues have been regularly deposited with the appropriate authori-ties except Provident Fund & Employees’ State In-surance, TDS, work contact tax etc According to the information and explanations given to us there were outstanding statutory dues of Provident Fund & Em-ployees’ State Insurance as on 31st March 2014 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there is no amounts payable in respect of in-come tax, wealth tax, service tax, sales tax, customs duty and excise duty which have not been deposited on account of any disputes.

Annexure to the Auditor’s ReportThe Annexure referred to in paragraph 1 of the Our Report of even date to the members of Shri Lakshmi Cotsyn Limited. On the accounts of the company for the nine months financial year ended on 31st March 2014.



10. In our opinion, the Company’s accumulated losses at the end of the financial year are in excess of fifty percent of its net worth. The Company has net loss of Rs. 624.15 Crores and has incurred cash loss of Rs. 545.68 Crores during the financial year covered by our audit. Thus the net worth of the company has been completely eroded and the company is required to make necessary refer-ence to BIFR in accordance with the provisions of Section 15(1) of Sick Industrial Companies ( Special Provisions) Act 1985 ( SICA).

11.Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to banks and other Financial Institution except the dues of IFCI amounting to Rs. 6.68 crores and of FCCB worth USD 2.80 Mn for which IFCI has filed a recovery suit at Hon’able DEBT Recovery Tribunal (DRT) Delhi and Bond Holders have filed winding up petition at Allahabad High Court.

12. Due to the liquidity crunch, the Company had opted Cor-porate Debt Restructuring Mechanism envisaged under RBI guidelines & the CDR package of the Company was approved by the CDR cell vide Letter of Approval (LOA) dated 28th June 2013 and Master Restructuring Agree-ment (MRA) was signed on 29th June 2013. The CDR package is under implementation.

13. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

14. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor’s Report) Order, 2003 (as amended) is not applicable to the Company.

15. According to information and explanations given to us, the Company has made investment in Shares. Proper records & timely entries have been maintained in this regard & investments specified are held in their own name.

16. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

17. Based on our audit procedures and on the information giv-en by the management, we report that the company, in compliance of terms of LOA issued by CDR Cell, has raised Rs. 93.90 crore as unsecured loan from its Business As-sociates towards promoters contribution which was to be converted into equity subject to the approval of BSE/NSE during the year.

18. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March 2014, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

19. Based on the audit procedures performed and the infor-mation and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year.

20. The Company has not raised any money by public issue during the year.

21. Based on the audit procedures performed and the infor-mation and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For PRADEEP & ASSOCIATESChartered Accountants

FRN:001254C CA. P.K. GuptaPlace: Kanpur PartnerDate: 30th May, 2014 Membership No.:070492


Particulars Note No.

As at 31 March, 2014

As at 30 June, 2013

A. EQUITY & LIABILITIES1. Shareholder's Funds

(a) Share Capital 1 2,847.06 2,847.06 (b) Reserves and Surplus 2 (31,027.61) 30,812.09 (c) Minority Interest 3 8.52 9.31 (d) Money received against Share Warrants - -

2. Share Application Money Pending Allotment 6,843.04 6,480.52 3. Non-Current Liabilities

(a) Long-Term Borrowings 4 215,493.56 175,354.46 (b) Deferred Tax Liability (Net) 47.37 14,092.45 (c) Other Long-Term Liabilities - -(d) Long-Term Provisions 8,046.27 6,106.75

4. Current Liabilities(a) Short Term Borrowings 5 101,867.28 104,332.37 (b) Trade Payables 17,987.95 14,201.49 (c) Other Current Liabilities 6 2,145.10 516.52 (d) Short-Term Provisions 7 341.20 376.79

324,599.75 355,129.81 B. ASSETS

1. Non-Current Assets(a) Fixed Assets

(i) Tangible Assets 8 173,564.38 177,598.52 (ii) Intangible Assets 9 33.95 33.95 (iii) Capital Work-in-Progress 964.84 - (iv) Intangible Assets under development - - (v) Fixed Assets held for sale - -

(b) Non-Current Investments 10 7,533.87 8,162.50 (c) Deferred Tax Assets (Net) - - (d) Long Term Loans & Advances 11 8,114.24 8,772.38

2. Current Assets(a) Current Investments 12 - 700.08(b) Inventories 13 58,719.26 74,382.10(c) Trade Receivables 14 63,467.39 41,253.72 (d) Cash and Cash equivalents 15 837.43 916.56 (e) Other Current Assets 16 11,364.38 43,310.00

324,599.75 355,129.81 See accompanying notes forming part of the financial statements

Consolidated Balance Sheet As at 31st March, 2014 (Rs. in Lacs)

In terms of our report attached. For and on behalf of the Board of Directors

For PRADEEP & ASSOCIATES Dr. M. P. Agarwal Devesh GuptaChartered Accountants Chairman Dy. Managing DirectorFRN 001254C

P. K. Gupta Rakesh Kumar Srivastava Vivek SaxenaPartner Company Secretary cum Finance Controller Head-AccountsMembership No.: 070492

Place: KanpurDate: 30th May, 2014



Particulars NoteNo.


As at 30 June, 2013

A CONTINUING OPERATIONS1 Revenue from operations (gross) 17 85,658.92 192,219.66

Less : Excise duty - - Revenue from operations (net) 85,658.92 192,219.66

2 Other income 18 2,349.56 2,434.34 3 Total revenue (1+2) 88,008.49 194,654.00 4 Expenses

(a) Cost of materials consumed 19 73,207.13 156,748.48 Purchases of stock-in-trade 1,472.71 (b) Changes in inventories of finished goods, work-in-progress and stock-in-trade

20 8,026.66 653.37

(c) Employee benefits expense 21 5,324.26 6,737.84 (d) Finance costs 22 19,948.31 35,672.53 (e) Depreciation and amortisation expense 23 7,901.03 10,169.67 (f) Other expenses 24 17,753.48 21,359.64 Total Expenses 133,633.59 231,341.53

5 Profit / (Loss) before exceptional and extraordinary items and tax (3 - 4) (45,625.11) (36,687.53)6 Exceptional items – –7 Profit / (Loss) before extraordinary items and tax (5 ± 6) (45,625.11) (36,687.53)8 Extraordinary items 25 (16,832.75) (81.27)9 Profit / (Loss) before tax (7 ± 8) (62,457.86) (36,768.80)10 Tax expense

(a) Current tax expense for current year – –(b) Deferred tax 8.77 4,785.25

8.77 4,785.25 11 Profit / (Loss) from continuing operations (9 ±10) (62,466.63) (41,554.05)

B PROFIT / (LOSS) FROM DISCONTINUING OPERATIONS 12.i Profit / (Loss) from discontinuing operations (before tax) – –12.ii Gain / (Loss) on disposal of assets / settlement of liabilities

attributable to the discontinuing operations– –

12.iiiAdd / (Less): Tax expense of discontinuing operations – –(a) on ordinary activities attributable to the discontinuing operations – –(b) on gain / (loss) on disposal of assets / settlement of liabilities – –

13 Profit / (Loss) from discontinuing operations (12.i ± 12.ii ± 12.iii) – – 14 Profit / (Loss) for the year (11 - 12 To 13) (62,466.63) (41,554.05)15 Earnings Per Equity Share (of Rs. 10/- Each) (219.41) (145.95)

Consolidated Statement of Profit & Loss For the year ended 31st March, 2014 (Rs. in Lacs)


For PRADEEP & ASSOCIATES Dr. M. P. Agarwal Devesh GuptaChartered Accountants Chairman Dy. Managing DirectorFRN 001254CP. K. Gupta Rakesh Kumar Srivastava Vivek SaxenaPartner Company Secretary cum Finance Controller Head-AccountsMembership No.: 070492 Place: KanpurDate: 30th May, 2014

See accompanying notes forming part of the financial statements


Consolidated Notes forming part of the financial statements

Particulars As at31 March, 2014

As at30 June, 2013

1 SHARE CAPITAL

Authorised

5,00,00,000 Equity Shares of Rs. 10/- each 5,000.00 5,000.00

5,000.00 5,000.00

Issued, subscribed and fully paid-up shares

2,84,70,645 Equity Shares of Rs. 10/- each fully paid-up 2,847.06 2,847.06

2,847.06 2,847.06

Reconciliation of the number of Equity Shares outstanding:

Equity shares outstanding at the beginning of the year 2,84,70,645 2,80,93,835

Equity shares allotted during the year – 376810

Equity shares outstanding at the end the of the year 2,84,70,645 2,84,70,645


As at30 June, 201 3

2 RESERVES AND SURPLUS

(i) Securities Premium Account

Balance as per last financial statement 21,209.19 20,838.37

Add : Additions during the year - 370.82

Less : Deduction during the year - -

Closing Balance 21,209.19 21,209.19

(ii) Capital Reserves Account

State Capital Subsidary 12.19 12.19

Add : Additions during the year 569.78 -

60.67

Foreign Currency Transaction Reserve 642.64 12.19

(iii) Surplus / (Deficit) in Statement of Profit and Loss


Add: Profit for the year **{(62,466.62) + (3.52)} (62,470.15) (41,555.03)

Total (52,879.44) 9,590.71

Total Reserve and Surplus (i to iii) (31,027.61) 30,812.09

No. of Shares

Name of shareholder 31 March, 2014 30 June, 2013

Nil Nil

Shareholder holding more than 5 percent Equity shares of the Company:

(Rs. in Lacs)





As at30 June, 2013

4 LONG-TERM BORROWINGS

Secured Loan :

Secured Loans from Banks 192,592.21 160,765.79

Mezannine Debt 12,434.73 12,841.75

Unsecured Loan :

Unsecured Loan 10,466.62 1,746.92

Total 215,493.56 175,354.46


As at30 June, 2013

5 SHORT TERM BORROWINGS

Short Term Loan for Project 33,328.78 35,190.36

Working Capital Loan 68,538.50 69,142.01

Total 101,867.28 104,332.37


As at30 June, 2013

6 OTHER CURRENT LIABILITIES

Unpaid Dividend 25.60 25.66

Statutory remittances 2,119.50 490.86

2,145.10 516.52


As at30 June, 2013

7 SHORT TERM PROVISIONS

Provision for Tax 16.75 –

Provision for Expenses 324.45 376.79

341.20 376.79


As at30 June, 2013

3 MINORITY INTEREST

Share held by outsider (Rs.1000 Lacs - Rs. 995 Lacs) 5.00 5.00

Add : 0.5% Reserve & Suplus

** Rs.852.89 * 0.50% = Rs. 4.26 Lacs

*** Rs.148.63* 0.50% = Rs. (0.74) Lacs 3.52 4.31

Total Reserve and Surplus (i to iii) 8.52 9.31

(Rs. in Lacs)




As at30 June, 2013

9 INTANGIBLE ASSETS / GOODWILL

Share Capital of Synergy 1.69 1.69

Less : Reserve & Surplus of Synergy 42.79 42.79

Opening Balance Rs. 42.79 (100% holding) – –

41.10 41.10

Less : Investment 7.15 7.15

33.95 33.95


As at30 June, 2013

10 NON-CURRENT INVESTMENTQuoted Shares – 38.56 Un-Quoted Shares 7,533.87 8,123.94

7,533.87 8,162.50


As at30 June, 2013

11 LOANS AND ADVANCESAdvance to Suppliers 2,120.49 - FDR 50.56 - Advance licence 5.96 -

Advance to Suppliers for priority loan 1,568.52 -

Capital Advances - 7,048.25

Security Deposits 1,107.57 845.40

Other Loan & Advances 2,871.44 460.64

Advances Tax 322.83 328.21 Prepaid Expenses 66.87 89.88

8,114.24 8772.38

8 FIXED ASSETS

Particulars GROSS BLOCK DEPRECI ATION NET BLOCK

As on 01.07.13

Addition As on 31.03.2014

Upto 01.07.13

For the year

As on 31.03.2014

As on 01.07.13

As on 31.03.2014

Land 2,176.04 2,176.04 - - - 2,176.04 2,176.04

Building 24,822.52 414.90 25,237.42 2,800.58 719.11 3,519.69 22,021.94 21,717.73

Plant & Machinery 1,79,432.59 3,448.99 1,82,881.58 27,203.26 7,053.48 34,256.74 1,52,229.33 1,48,624.84

Furniture & Fixture 549.29 0.30 549.59 141.57 27.24 168.81 407.72 380.78

Office Equipment 677.99 2.70 680.69 311.36 49.94 361.30 366.63 319.39

Vehicles 760.02 - 760.02 363.16 51.26 414.42 396.86 345.60

Total 2,08,418.45 3,866.89 2,12,285.34 30,819.93 7,901.03 38,720.96 1,77,598.52 1,73,564.38

Previous Year 1,83,387.20 25,031.25 2,08,418.45 20,650.26 10,169.67 30,819.93 1,62,736.94 1,77,598.52

(Rs. in Lacs)




As at30 June, 2013

13 INVENTORIES

(As certified by the Management)

Traded Goods 100.00 -

Raw Materials 18,861.79 27,015.60

Work-in-Process 16,570.34 25,744.08

Finished Goods 21,938.12 20,890.92

Stores and Spare-parts,etc. 1,249.01 731.50

58,719.26 74,382.10

Basis of valuation of inventories are as under :

Realisable value except waste which is being valued at net realisable value.


As at30 June, 2013

14 TRADE RECEIVABLES

(Unsecured, Considered Good unless otherwise stated)

Outstanding for more than six months (from due date) 26,712.87 10,678.54

Considered Good 37,415.86 30,575.18

63,467.39 41,253.72


As at30 June, 2013

15 CASH AND BANK BALANCES

(a) Cash and cash equivalents:

Cash Balance on Hand (Including Stamps in Hand) 163.53 223.74

Balance with Banks in:

Current Accounts 648.30 667.16

(b) Earmarked balances with banks:

Unpaid Dividend Account 25.60 25.66

837.43 916.56


As at30 June, 2013

12 CURRENT INVESTMENT

Un-Quoted Shares – 700.08

– 700.08

(Rs. in Lacs)Consolidated Notes forming part of the financial statements



As at30 June, 2013

16 OTHER CURRENT ASSETS

Accrued Duty Draw back 617.35 685.25 Accrued DEPB – –Accrued Focus Licence 68.60 –Tuf’s Subsidy Receivable 10,441.11 –Accrued Interest 49.23 –TDS Receivable 18.79 –Advances against Others 4.92 36.39 Rent Receivable 13.75 –Salary advance 101.87 56.94 Slow Moving Assets – 42,486.83 Advances against Travelling Expenses 48.76 44.59

11,364.38 43,310.00

(Rs. in Lacs)


As at30 June, 2013

18 OTHER INCOME

Miscellaneous Income 1,024.66 99.48 Balance w/o 0.23 – Reimbursement of export freight outward 5.00 – Tender expense refund 0.10 – Interest Received 16.81 – Duty Draw Back 1,302.76 2,334.86 Income on Sale of DEPB License – –

2,349.56 2,434.34


As at30 June, 2013

17 REVENUE FROM OPERATIONS

(i) Sale of Manufactured goods :

Suiting & Shirting 7,118.11 17,930.86 Technical Textile / Fusible Interlining 16,426.03 63,056.60 Quilting & Embroidery 792.80 1,196.14 Denim 7,493.41 29,340.47 Terry Towel 8,955.40 17,680.51 Home Furnishing 4,177.19 10,546.19 Bottom Weight 3,107.45 5,739.97 Garments 1,387.58 1,353.25 comforters 2.17 – Misc. Sales 14,188.24 17,732.22

63,648.38 164,576.21 Export Sales 22,063.39 –Less : Inter Company Sales 52.85 22,010.54 27,643.45 Revenue from Operations 85,658.92 192,219.66





As at30 June, 2013

19 COST OF MATERIALS CONSUMED

Raw Material Consumed ** 71,470.60 153,621.22

Packing Materials 1,376.12 2,330.52

Power & Fuel – –

Others 360.41 796.74

73,207.13 156,748.48


As at30 June, 2013

20 CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND TRADED GOODS

Work-in-Process as at 31st March, 2014 16,570.34 25,744.08 Work-in-Process as at 30th June, 2013 25,744.08 22,148.24

9,173.74 (3,595.84)Finished Goods 31st March, 2014 21,705.89 20,890.92 Finished Goods 30th June, 2013 20,489.67 25,140.13

(1,216.22) 4,249.21 Traded Goods 31st March, 2014 100.00 – Traded Goods 30th June, 2013 – –

(100.00) –Net (increase) / decrease Inventories 8,026.66 653.37


As at30 June, 2013

21 EMPLOYEE BENEFIT EXPENSES

Salaries, wages and bonus 5,233.34 6,593.50

Director salary 2.20 –

Employee welfare expenses 88.72 144.34

5,324.26 6,737.84


As at30 June, 2013

22 FINANCE COSTS

Interest Expenses 19,535.50 34,370.20

Bank Charges 412.81 1,302.33

19,948.31 35,672.53


As at30 June, 2013

23 DEPRECIATION AND AMORTIZATION EXPENSE

Depreciation of tangible assets 7,901.03 10,169.67

7,901.03 10,169.67




As at30 June, 2013

24 OTHER EXPENSES

Rent, Rate & Taxes 153.66 294.45

Insurance 55.55 106.58

Repair & Maintenance 249.74 287.25

Printing & Stationery 43.62 69.57

Postage & Telegram 130.01 125.73

Internet & telephone exp 1.18 -

Travelling & Conveyance 357.38 371.50

Meeting Expenses 0.89 1.88

Cost & Stock Audit fee 1.11 0.41

Auditors Remuneration 19.29 19.29

Selling & Distribution Exp. 941.31 824.44

Legal Expenses 50.50 7.85

Poojan expense 0.04 -

Fees & Subscription 2.06 -

Freight Inward 8.80 -

Security Expense 3.94 -

Tax w/o 3.87 -

Filing Fees 0.07 -

Advertisement 69.16 162.18

Freight Outward 928.45 1,023.18

Stores & Spares 437.10 674.62

Professional Charges 152.32 213.94

Power & Fuel 4,232.54 6,188.63

Discount 7,391.04 10,426.45

Misc. Expenses 2,519.85 561.69

17,753.48 21,359.64





As at30 June, 2013

25 EXTRA-ORDINARY ITEMS

(i) Trade Receivables 661.33 812.33

Less : Trade Payable 998.49 941.26

Exchange Loss 337.16 (128.93)

(ii) Purchase of Synergy 54.57 86.42

Less : Sale to Synergy 52.84 38.76

Exchange Loss (1.73) 47.66

Net Exchange Loss 335.43 (81.27)

(iii) Loss on sale of slow moving stock (34,014.12) –

Loss on sale of rejected stock (4,068.81) –

(38,082.93) –

Less:

Deferred Tax Liability Written Back (14,053.85) –

Tuf's Subsidy accured Relating to P.Y (6,860.90) –

(17,168.18) (81.27)

Net Entraordinary Item (16,832.75) –







Significant Accounting Policies and Notes to AccountsAnnexure to and forming part of the Balance Sheet as at 31st March, 2014 and Statement of Profit & Loss for the year ended on that date:

ACCOUNTING POLICIES AND NOTES TO ACCOUNTS

Principles of Consolidation:

(In respect of stand alone accounts, there is no requirement of an accounting policy of principles of consolidation)

The Consolidated Financial Statements relate to Shri Lakshmi Cotsyn Ltd. (the Company) and its subsidiary companies viz. SLCL Overseas (FZC), Shri Lakshmi Defence Solutions Ltd. and Synergy Global Home Inc., U.S.A. The Consolidated Financial Statements have been prepared on the following basis:

a) The Financial Statements of the company and its subsidiary companies have been combined on a line-by-line basis adding together the book values of like items of assets, liabilities, income and expenses after fully eliminating intra group & Intra group transactions resulting in unrealized profit & losses as per Accounting Standard 21- “The Consolidated Financial State-ments” notified by the companies Accounting Standards Rules, 2006.

b) The Financial Statements of the subsidiaries used in the consolidation are drawn upto the same reporting date as that of the company i.e., 31st March 2014.

c) The Consolidated Financial Statements have been prepared in accordance with AS-21.

d) The difference between the cost of investment in the subsidiaries, and the Company’s share of net assets at the time of acquisition of shares in the subsidiaries is recognized in the financial statements as Goodwill or Capital reserves as the case may be.

e) Minority Interest in the net assets of consolidated subsidiaries is identified and presented in the consolidated Balance Sheet separately from liabilities and equity of the company’s shareholders.

Minority interest in the net assets of consolidated subsidiaries consists of:

• The amount of equity attributable to minority at the date on which the investment in subsidiary is made; and

• The minority share of movements in equity since the date the parent subsidiary relationship came into existence.

f) Minority’s share of net profit for the year of consolidated subsidiaries is identified and adjusted against the Profit after Tax of the Group.

g) Accounting for Investments in Associate in Consolidated Financial Statements as per Accounting Standard – 23 “Accounting for Investment in Associates in Consolidated Financial Statements” notified by the companies (Accounting Standards) Rules, 2006.

SIGNIFICANT ACCOUNTING POLICIES

1) Basis of Accounitng:

The financial statements are prepared under the historical cost convention on an accrual basis of accounting in accordance with the Generally Accepted Accounting Principles, Accounting Standards notified under clause 2 of Section 2 of the Companies Act, 2013 and the relevant provision thereof.

2) Valuation of Inventories:

Inventory of Raw Material, Stores, Spares and Consumables are valued at cost. Cost is arrived at weighted Average method. Finished Goods and Semi Finished Goods are valued at cost of Raw Material at the respective units and conversion of these includes the cost incurred in the normal course of the business, in bringing the goods upto the present condition or net realizable value which is lower as accordance with the Accounting Standard-2 “ Valuation of Inventories” issued by ICAI.

3) Depreciation:

In respect of all the fixed assets, depreciation is provided on straight line basis applying the rates specified in Schedule II of the Companies Act, 2013. Further, depreciation on an asset, whose actual cost does not exceed Rs. 5000/- has been provided at the rate of 100%.



4) Revenue Recognition:

In accordance with the provision of Section 128(1) of the Companies Act, 2013 and in accordance with Accounting Standard -9 “Revenue Recognition”, the Company follows accrual basis of accounting except in respect of interest on security deposit which is accounted for on Cash basis. Sales are invoiced on dispatch of goods to the customer.

5) Tangible Assets:

As per Accounting Standard -10” Accounting for Fixed Assets”, Tangible assets are valued at cost less accumulated depre-ciation.

6) Intangible Assets:

Intangible assets are valued at cost

7) Foreign Exchange Transaction:

As per Accounting Standard -11 “The Effect of Change in Foreign Exchange Rate”, current assets and current liabilities relat-ing to foreign currency transactions are recorded at the exchange rate prevailing at the time of transaction. Foreign currency contracts, outstanding at the close of the year have been accounted for at the exchange rate prevailing at the time of con-tract.

8) Employees Retirement Benefit:

Company’s contribution to Employees Provident Fund is charged to the Statement of Profit & Loss for the relevant financial year. Provision for leave Encashment & Gratuity has been made in accounts in Compliance with Accounting Standard -15“ Employee Benefits.”

9) Investments:

All investments are valued at cost prices. Income from these investments is credited to revenue on accrual basis.

10) Research and Development Expenditure:

As per Accounting Standard – 26 “ Intangible Assets” all revenue expenses pertaining to research and development are charged to the Statement of Profit and Loss in the year in which these are incurred and expenditure of capital nature is capitalized as fixed assets.

11) Segment Reporting:

The Company is engaged in manufacturing of textiles which in the context of Accounting Standard -17 “Segment Reporting” as notified under the Companies Accounting Standards Rules, 2006, is considered as the only business segment.

12) EARNING PER SHARE (EPS):

Calculation of earnings per share (EPS) in accordance with Accounting Standrard-20 “ Earning Per Share” issued by Institute of Chartered Accountants of India”.

Sl. No.

Particulars 2013-14(for the pe-

riod of 9 months ending on 31.03.14

2012-13

1. No. of Equity Shares 2,84,70,645 2,84,70,645

2. Nominal value of Equity Shares (in Rs.) 10/- 10/-

3. Profit before Tax (Rs. in lacs) (62,415.29) (36,077.12)

4. Profit after Tax (Rs. in lacs) (62,415.29) (40,862.37)

5. Basic EPS (in Rs.) (219.23) (143.52)

Significant Accounting Policies and Notes to Accounts


NOTES TO ACCOUNTS

1. Personal accounts are subject to confirmation, reconciliation and consequential adjustments (if any).

2. During the financial year under consideration, the Company has received Capital Subsidy of Rs. 5.69 Crores under Textile Upgradation Fund Scheme (TUFS) which has been credited to Capital Reserve Account.

3. As per the CDR Package approved by the CDR EG on 28th June 2013, a sum of Rs. 93.80 crore was stipulated to be in-ducted as promoter’s contribution. In compliance with the same the company raised Rs. 93.90 Crore as Unsecured Loans from business associates to be converted into equity subject to approval of BSE/NSE, at a rate as may be mutually agreed between investor and the company in accordance with SEBI norms. However, in view of the present financial position of the company the investors have expressed their unwillingness to convert their unsecured loans into equity. The company is in discussion with such investors and is hopeful of a favorable decision in the matter.

4. Trade receivables include a sum of Rs. 252.30 Crore which is outstanding for a period of more than 6 months. Out of the same, receivables aggregating to Rs. 182.78 crores are doubtful of recovery, However no provision against the same has been made in the books of account as the management is hopeful of recovery of the same through constant follow up or by legal process as the management is contemplating to initiate legal action against such debtors.

5. Other current assets include Rs. 104.41 Crore towards accrued TUFS subsidy during the period.

6. Investment of Rs. 32.66 Crore includes investment in group companies.

7. The Accumulated Losses of the company as at 31.03.2014 have eroded the entire net worth of the company as on that date. As such the company has become a Sick Industrial Company as defined under Section 3(1) (O) of the Sick Industrial Companies (Special Provisions) Act 1985.

8. IFCI filed an application before Honorable debt recovery Tribunal, Delhi for recovery of its claim amounting to Rs. 6.68 Crore in respect of certain loan given to company. Company is contesting the case before DRT.

9. 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 com-pany, conversion price of the bond was Rs. 108.49 per equity share 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 23.10.2012.

Out of that, FCCB worth USD 5 mn (including interest on FCCB of USD 1.5 mn) have been redeemed by availing ECB of USD 5.00 mn from UCO Bank.

Current FCCB outstanding is USD 2.8 mn (including interest on FCCB of USD 0.8mn) 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’ble High Court, Allahabad for recovery of their dues. The winding up petition filed by the FCCB Holders have since been admitted by the Hon’ble High Court and the matter is pending before the Hon’ble High Court.

10. Loss for the year is inclusive of Rs. 340.14 crore being the loss suffered by the company on disposal of slow moving stocks of finished goods/ raw material of Rs. 424.87 crore which was identified during the previous financial year. In addition to this, the company has also suffered a loss of Rs 40.69 Crore on sale of rejected stock. Due to the overall slowdown in demand in the textile sector and due to deterioration in the quality of stocks of such slow moving inventory and in order to mitigate the working capital shortages, the Company was forced to sell the same at relatively lower prices which resulted in substantial losses to the company.

11. In view of the liquidity crisis in the company and non receipt of TUFS subsidy, company is finding difficulties in making pay-ment of dues i.e. interest and instalments to Banks as per CDR scheme. Due to non-payment of Bank dues, some accounts of the company may become NPA.

12. Deferred tax liability amounting to Rs. 140.54 crore recognized in the preceding financial years has been written back during




the year under consideration due to substantial accumulated losses of the company and in such an event there is no likeli-hood of any Tax Liability in the near future in accordance with the provisions of AS 22.

13. As per CDR package, company was sanctioned Rs. 65.40 Crore as priority loan for critical capex, which should be available to the company in Aug’ 2013, but it could not happen. Therefore Technical Textile unit, Spinning unit and Yarn Dyed Shirting Unit could not be made fully operational.

14. Related Party Disclousres :

The related party disclosure in accordance with Accounting Standard-18 “Related Party Disclosures” issued by the Institute

of Chartered Accountants of India is given below:-

I) NAME OF RELATED PARTIES & DESCRIPTION OF RELATIONSHIP

(A) Key Managerial Personnel:

(i) Dr. M.P. Agarwal CMD

(ii) Mr. Pawan Kumar Agarwal Jt. M.D.

(iii) Mr. Devesh Gupta Dy. M.D.

(B) Relatives of Key Managerial Personnel:

(i) Mrs. Sharda Agarwal Director (Wife of Dr. M.P. Agarwal)

(ii) Mr. Alok Agarwal President (Works) (Son of Dr. M.P Agarwal)

(ii) Mr. Vikas Agarwal President (Marketing) (Son of Dr. M. P. Agarwal)

(C) Companies & Concerns controlled by Key Managerial Personnel/Relatives

(i) Shri Lakshmi Defence Solutions Ltd.

(ii) SLCL Overseas (FZC) at Sharjah, UAE

(iii) Synergy Global Home Inc. N.Y., U.S.A.

II) DETAILS OF TRANSACTION

Nature AssociateCompanies

Key Management Personnel & their

relatives

Remuneration – 33,90,000.00*

Rent Paid 6,75,000.00** 9,90,000.00***

* Mr. Alok Agarwal (Rs. 11,25,000), Mr. Vikas Agarwal (Rs. 11,25,000), Mrs. Kamini Agarwal (Rs.5,40,000), Mrs. Divya Agarwal (Rs.60,000), Mrs. Barsha Agarwal (Rs.5,40,000).

** Galaxy Capital Finance Limited (Rs. 4,50,000), Gautam Budh Impex (P) Ltd. (Rs.2,25,000).

*** Dr. M. P. Agarwal (Rs. 2,25,000), Mr. Pawan Kumar Agarwal (Rs. 2,25,000), Mr. Alok Agarwal (Rs. 2,70,000), Mr. Vikas Agarwal (Rs. 2,70,000).

15. Contingent Liabilities:

Contingent Liabilities as shown in the notes to the accounts, may affect the future profitability to the extent they materialize

for payment.

(i) Guarantees given by the Company Rs. 5.99 Crore

(ii) Claim against the Company not acknowledges Debt Rs. NIL

(iii) Letter of Credit outstanding Rs. 28.89 Crore

(iv) Export Bill Discounted Rs. 9.28 Crore



Estimated average contract remaining to be executed on Capital account & provided for (Net of Advances payment)

Rs. NIL (Previous year NIL).

17) Additional information where applicable or required are as under:-

A) Licensed Capacity: The Company is not required to obtain any licensed under the Industrial Development & Regulation

Act, therefore the details of license capacity is not applicable.

Installed Capacity per Annum

Sl. No.

ParticularsUnit

As at31.03.2014 (9 Months)

As at30.06.2013(12 Months)

i Suiting & Shirting Mtrs. 300 Lacs 300 Lacs

ii Technical Textiles

- Technical Textiles Fabric Mtrs. 120 Lacs 120 Lacs

- Fusible Interlining Fabric Mtrs. 250 Lacs 250 Lacs

- NBC Fabric Mtrs. 100 Lacs 100 Lacs

- Flex Fabric Sq. Mtrs. 500 Lacs 500 Lacs

- Black Out Fabric Mtrs. 200 Lacs 200 Lacs

- IRR / MSCN Fabric Mtrs. 50 Lacs 50 Lacs

- Others Mtrs. 180 Lacs 180 Lacs

iii Quilt Fabric Mtrs. 4 Lacs 4 Lacs

iv Embroidery Fabrics Mtrs. 8 Lacs 8 Lacs

v Bottom Weight Mtrs. 60 Lacs 60 Lacs

vi Terry Towel Tons 15,000 Tons 15,000 Tons

vii Sheeting Mtrs. 300 Lacs 300 Lacs

viii Denim Mtrs. 400 Lacs 400 Lacs

ix Garments Nos. 66 Lacs 66 Lacs

x Quilts / Comforters Nos. 3 Lacs 3 Lacs

Actual Production:

Sl. No.

ParticularsUnit

As at31.03.2014 (9 Months)

As at30.06.2013(12 Months)

i Suiting & Shirting Mtrs. 21,588,990 26,412,530


- Technical Textiles Fabric Mtrs. 7,085,117 12,956,850

- Fusible Interlining Fabric Mtrs. 11,282,239 17,585,956

- NBC Fabric Mtrs. - 1,232,093

- Black Out Fabric Mtrs. - 9,982,452

- IRR / MSCN Fabric Mtrs. - -




- Others Mtrs. - 11,821,131

iii Quilt Fabric Mtrs. 208,411 425,658

iv Embroidery Fabrics Mtrs. 303,252 315,585

v. Bottom Weight Mtrs. 3,450,007 7,821,737

vi Terry Towel Tons 3,903,719 13,671,541

vii Sheeting Mtrs. 8,660,488 26,464,491

viii Denim Mtrs. 7,495,230 34,134,631

ix Garments Nos. 5,32,107 316,525

x Quilts / Comforters Nos. 98,523 72,585

Sales:

Sl. No.

Particulars Unit Opening Closing Sales

i Suiting & Shirting Mtrs. 4,283,627 3,673,134 22,199,483


Technical Textiles Fabric Mtrs. 2,902,810 4,441,522 5,546,405

Fusible Interlining Fabric Mtrs. 2,927,866 2,963,114 11,246,991

NBC Fabric Mtrs. 12,38,397 - 12,38,397

Black Out Fabric Mtrs. 44,64,921 - 44,64,921

IRR / MSCN Fabric Mtrs. - - -

Others Mtrs. 29,538,131 - 29,538,131

iii Quilt Fabric Mtrs. 74,759 325 282,845

iv Embroidery Fabrics Mtrs. 5,141 125 308,268

v Bottom Weight Mtrs. 9,74,138 389,526 4,034,619

vi Terry Towel Tons 46,29,396 4,242,452 4,290,663

vii Sheeting Mtrs. 11,921,904 11,379,436 9,202,956

viii Denim Mtrs. 14,10,573 1,74,839 8,730,964

ix Garments Nos. 58,652 - 590,759

x Quilts / Comforters Nos. 13,589 25,579 86,533







Consolidated Cash Flow Statement For the year ended 31st March, 2014

Particulars 31 March, 2014 30 June, 2013

CASH FLOW FROM OPERATION ACTIVITIES

Net Profit before tax (62,457.86) (36,768.80)

- Depreciation 7,901.03 10,169.67

(54,556.82) (26,599.13)

Operating Profit Before Working Capital Changes

- Trade and Other Receivable (22,213.67) 23,475.99

- Inventories 15,662.84 168.03

- Trade Payables 5,379.45 4,379.46

- Loans & Advances 32,603.76 (42,391.97)

- Increase in Bank Borrowing (603.51) (11,787.75)

- Secured/Unsecured Loans 40,139.10 988.43

- Income Tax (14,045.08) –

56,922.88 (25,167.81)

Cash Generated from operations 2,366.06 (51,766.93)

Net cash from operating activities 2,366.06 (51,766.93)

CASH FLOW FROM INVESTMENT ACTIVITIES

- Fixed Assets acquired (4,214.36) (10,463.28)

- Sale of Investment 1,328.71 –

(519.60) (62,230.21)

CASH FLOW FROM FINANCE ACTIVITIES

- Proceeds from issue of share capital – 408.50

- Proceeds from issue of share warrant application money 362.52 –

- Proceeds from issue of Debentures – 4,000.00

- Proceeds from issue of FCCB 1,939.52 (408.50)

- Proceeds from Long / Short Term borrowings (1,861.58) 58,377.21

- Dividends paid (Including Dividend Tax) – –

Net Cash used in financing activities 440.46 62,377.22

Net increase in cash and cash equivalents (79.13) 147.00

Cash and Cash equivalents as at 1st July 2013 915.56 769.56

Cash and Cash equivalents as at 31st March 2014 837.43 916.56

(Rs. in Lacs)







Standalone Financial Section


Particulars Note No.


As at 30 June, 2013

I. EQUITY & LIABILITIES1. Shareholder's Funds

(a) Share Capital 1 2,847.06 2,847.06 (b) Reserves & Surplus 2 (41,500.72) 20,344.79

2. Share Application Money Pending Allotment 6,843.04 6,480.52 3. Non-Current Liabilities

(a) Long-Term Borrowings 3 214,376.97 173,884.27 (b) Deferred Tax Liability (Net) - 14,053.85 (c) Other Long-Term Liabilities - - (d) Long-Term Provisions 8,046.27 6,106.75

4. Current Liabilities(a) Short-Term Borrowings 4 100,924.31 103,420.96 (b) Trade Payables 16,223.85 12,764.03 (c) Other Current Liabilities 5 2,145.10 511.02 (d) Short-Term Provisions 6 288.63 325.85

310,194.51 340,739.10 B. ASSETS

1. Non-Current Assets(a) Fixed Assets

(i) Tangible Assets 7 172,352.82 176,341.82 (ii) Intangible Assets – –(iii) Capital Work-in-Progress 964.84 –(iv) Intangible Assets under development – –(v) Fixed assets held for sale – –

(b) Non-Current Investments 8 3,266.50 2,586.31 (c) Deferred Tax Assets (Net) – –(d) Long-Term Loans & Advances 9 8,087.00 9,700.01

2. Current Assets (a) Current Investments 10 – 718.75 (b) Inventories 11 57,389.22 72,332.86 (c) Trade Receivables 12 56,152.87 35,105.38 (d) Cash and Cash Equivalents 13 717.30 724.37 (e) Other Current Assets 14 11,263.97 43,229.60

310,194.51 340,739.10 See accompanying notes forming part of the financial statements

Balance Sheet As at 31st March, 2014 (Rs. in Lacs)







Particulars NoteNo.


As at 30 June, 2013

A CONTINUING OPERATIONS1 Revenue from operations 15 73,074.48 174,310.36

Revenue from operations 73,074.48 174,310.36 2 Other income 16 2,301.15 2,416.41 3 Total revenue (1+2) 75,375.63 176,726.77 4 Expenses

(a) Cost of materials consumed 17 62,987.64 143,228.43 Purchases of stock-in-trade(b) Changes in inventories of finished goods, work-in-progress and stock-in-trade

18 7,801.14 (1,102.12)

(c) Employee benefits expense 19 5,179.99 6,548.97 (d) Finance costs 20 19,670.95 35,449.12 (e) Depreciation and amortisation expense 21 7,846.73 10,089.32 (f) Other expenses 22 17,136.29 18,590.17 Total expenses 120,622.74 212,803.89

5 Profit / (Loss) before exceptional and extraordinary items and tax (3 - 4) (45,247.11) (36,077.12)6 Exceptional items (17,168.18) –7 Profit / (Loss) before extraordinary items and tax (5 ± 6) (62,415.29) (36,077.12)8 Extraordinary items – –9 Profit / (Loss) before tax (7 ± 8) (62,415.29) (36,077.12)10 Tax expense:

(a) Current tax expense for current year – –(b) Deferred tax 4,785.25 4,785.25

4,785.25 4,785.25 11 Profit / (Loss) from continuing operations (9 ±10) (62,415.29) (40,862.37)

B PROFIT / (LOSS) FROM DISCONTINUING OPERATIONS12.i Profit / (Loss) from discontinuing operations (before tax) – –12.ii Gain / (Loss) on disposal of assets / settlement of liabilities

attributable to the discontinuing operations – –

12.iiiAdd / (Less): Tax expense of discontinuing operations – –(a) on ordinary activities attributable to the discontinuing operations – –(b) on gain / (loss) on disposal of assets / settlement of liabilities – –

13 Profit / (Loss) from discontinuing operations (12.i ± 12.ii ± 12.iii) – – 14 Profit / (Loss) for the year (11 ± 13) (62,415.29) (40,862.37)15 Earnings Per Equity Share (of Rs.10/- Each) (219.23) (143.52)

Statement of Profit & Loss For the year ended 31st March, 2014 (Rs. in Lacs)

See accompanying notes forming part of the financial statements






Notes forming part of the financial statements


As at30 June, 2013

1 SHARE CAPITAL

Authorised

5,00,00,000 Equity Shares of Rs. 10/- each 5,000.00 5,000.00

5,000.00 5,000.00

Issued, subscribed and fully paid-up shares

2,84,70,645 Equity Shares of Rs. 10/- each fully paid-up 2,847.06 2,847.06

2,847.06 2,847.06

Reconciliation of the number of Equity Shares outstanding:

Equity shares outstanding at the beginning of the year 28470645 28093835

Equity shares allotted during the year – 376,810

Equity shares outstanding at the end the of the year 28470645 28470645


As at30 June, 2013

2 RESERVES AND SURPLUS

(i) Securities premium account


Add : Additions during the year - 370.82

Less : Deduction during the year - -

Closing Balance 21,209.19 21,209.19

(ii) Capital Reserves Account

Balance as per last financial statement 12.19 12.19

Add : Additions during the year 569.78 -

Closing Balance 581.97 12.19

(iii) Surplus / (Deficit) in Statement of Profit and Loss

Balance as per last financial statement (876.59) 39,985.78

Add : Loss for the year (62,415.29) (40,862.37)

Total (63,291.88) (876.59)

Total Reserve and Surplus (i to iii) (41,500.72) 20,344.79

No. of Shares

Name of shareholder 31 March, 2014 30 June, 2013

Nil Nil

Shareholder holding more than 5 percent Equity shares of the Company:

(Rs. in Lacs)




ParticularsAs at

31 March, 2014As at

30 June, 2013

3 LONG-TERM BORROWINGS

Secured Loans from Banks:

Secured Loans from Banks 192,504.24 160,618.90

Mezannine Debt 12,434.73 12,841.75

Unsecured:

Unsecured Loan 9,438.00 423.62

Total 214,376.97 173,884.27


As at30 June, 2013

4 SHORT TERM BORROWINGS

Working Capital Loan 67,595.53 68,230.60

Short Term Loan for Project 33,328.78 35,190.36

Total 100,924.31 103,420.96


As at30 June, 2013

5 OTHER CURRENT LIABILITIES

Unpaid Dividend 25.60 25.66

Statutory remittances 2,119.50 485.36

2,145.10 511.02


As at30 June, 2013

6 SHORT TERM PROVISIONS

Provision for Expenses 288.63 325.85

288.63 325.85

7 FIXED ASSETS

Particulars GROSS BLOCK DEPRECIATION NET BLOCK

As on 01.07.2013

Addition As on 31.03.2014

Upto 01.07.2013

For the year

As on 31.03.2014

As on 30.06.2013

As on 31.03.2014

Land 2,176.04 - 2,176.04 - - - 2,176.04 2,176.04

Building 24,008.21 414.90 24,423.11 2,715.79 699.23 3,415.02 21,292.42 21,008.09

Plant & Machinery 178,783.93 3,439.83 182,223.76 27,053.05 7,023.08 34,076.13 151,730.88 148,147.63

Furniture & Fixture 538.58 0.30 538.88 133.14 25.12 158.26 405.44 380.62

Office Equipment 664.30 2.70 667.00 277.61 49.31 326.92 386.69 340.08

Vehicles 708.31 708.31 357.96 49.99 407.95 350.35 300.36

Total 206,879.37 3,857.73 210,737.10 30,537.55 7,846.73 38,384.28 176,341.81 172,352.82

Previous Year 181,848.62 25,030.75 206,879.37 20,448.23 10,089.32 30,537.55 161,400.38 176,341.82

(Rs. in Lacs)




As at30 June, 2013

8 NON-CURRENT INVESTMENT

Quoted Shares – 38.56

Un-Quoted Shares 3,266.50 2,547.75

3,266.50 2,586.31


As at30 June, 2013

9 LOANS AND ADVANCES

Advances to suppliers 1,946.19 7,048.25

Advances to suppliers priority loan 1,568.52 –

Security Deposits 1,081.09 625.36

Others loan and Advances 3,116.89 1,629.96

Advances Tax 321.92 321.92

Prepaid Expenses 52.39 74.52

8,087.00 9,700.01


As at30 June, 2013

10 CURRENT INVESTMENT

Un-Quoted Shares – 718.75

– 718.75

(Rs. in Lacs)


As at30 June, 2013

11 INVENTORIES

(As certified by the Management)

Raw Materials 18,659.55 26,368.79

Work-in-Progress 16,454.54 25,625.50

Finished Goods 21,046.77 19,676.95

Stores and Spare-parts 1,228.36 661.62

57,389.22 72,332.86

Basis of valuation of inventories are as under:All the inventories are valued at lower of cost or net realisable value ex-cept waste which is being valued at net realisable value.





As at30 June, 2013

12 TRADE RECEIVABLES

(Unsecured, Considered Good unless otherwise stated)

(a) Outstanding for more than six months 25,230.32 9,727.96

(b) Considered Good 30,922.55 25,377.42

56,152.87 35,105.38


As at30 June, 2013

13 CASH AND BANK BALANCES

(a) Cash and cash equivalents:

Cash Balance on Hand 46.25 58.06

Balance with Banks in:

Current Accounts 645.45 640.65

(b) Earmarked balances with banks:

Unpaid Dividend Account 25.60 25.66

717.30 724.37


As at30 June, 2013

14 OTHER CURRENT ASSETS

Accrued Duty Draw back 617.35 685.25

Accrued Focus Licence 68.60 –

Tuf's Subsidy Receivable 10,441.11 –

Accrued Interest 28.53 –

Advances to Others 4.92 6.25

T.D.S. Receivable 17.29

Salary advance 57.27 18.69

Slow Moving assets - 42,486.83

Advances against Travelling Expenses 28.90 32.58

11,263.97 43,229.60

(Rs. in Lacs)



As at30 June, 2013

15 REVENUE FROM OPERATIONS

(i) Sale of Manufactured goods :

Suiting & Shirting 12,373.69 23,314.02

Industrial Fabric / Fusible Interlining 16,426.03 63,056.60

Quilting & Embroidery 792.80 1,196.14

Denim 7,493.41 30,537.81

Terry Towel 16,750.17 28,394.75

Home Furnishing 11,862.26 18,299.44

Bottom Weight 3,107.45 5,767.89

Garments 1,848.41 2,850.31

Comforters 869.31 893.40

Others 1,550.95

Revenue from Operations 73,074.48 174,310.36

Sales includes Export Sales of Rs.22063.39 lakhs (Previous year Rs.27420.24 lakhs).



As at30 June, 2013

16 OTHER INCOME

Miscellaneous Income 998.39 81.55

Duty Draw Back 1,302.76 2,334.86

Income on Sale of DEPB License – – 2,301.15 2,416.41


As at30 June, 2013

17 COST OF MATERIALS CONSUMED

Raw Material Consumed 61,270.70 140,137.60

Packing Materials 1,363.38 2,311.78

Others 353.56 779.05

62,987.64 143,228.43

(Rs. in Lacs)




As at30 June, 2013

18 CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND TRADED GOODS

Work-in-Progress as at 31st March, 2014 16,454.54 25,625.50

Work-in-Progress as at 30th June, 2013 25,625.50 21,673.73

9,170.96 (3,951.77)

Finished Goods as at 31st March, 2014 21,046.77 19,676.95

Finished Goods as at 30th June, 2013 19,676.95 22,526.60

(1,369.82) 2,849.65

Net (Increase) / Decrease Inventories 7,801.14 (1,102.12)


As at30 June, 2013

19 EMPLOYEE BENEFIT EXPENSES

Salaries, wages and bonus 5,105.02 6,413.26

Employee welfare expenses 74.97 135.71

5,179.99 6,548.97


As at30 June, 2013

20 FINANCE COSTS

Interest Expenses 19,263.46 34,176.92

Bank Charges 407.49 1,272.20

19,670.95 35,449.12


As at30 June, 2013

21 DEPRECIATION AND AMORTIZATION EXPENSE

Depreciation of tangible assets 7,846.73 10,089.32

7,846.73 10,089.32


(Rs. in Lacs)




As at30 June, 2013

22 OTHER EXPENSES

Rent, Rate & Taxes 102.97 120.29

Insurance 53.34 101.62

Repair & Maintenance 248.74 284.48

Printing & Stationery 26.72 47.78

Postage & Telegram 113.78 96.16

Travelling & Conveyance 317.51 287.12

Meeting Expenses 0.89 1.88

Cost & Stock Audit fee 0.88 0.30

Auditors Remuneration 19.10 19.10

Selling & Distribution Exp. 756.06 655.74

Legal Expenses 50.45 7.75

Advertisement 66.46 36.77

Freight Outward 812.52 958.99

Stores & Spares 429.54 672.74

Power & Fuel 4,215.94 6,167.60

Discount 7,287.83 8,439.71

Professional Charges 151.48 202.61

Misc. Expenses 2,482.08 489.53

17,136.29 18,590.17

(Rs. in Lacs)






As at30 June, 2013

23 EXCEPTIONAL ITEMS

a) Loss on sale of slow moving stock 34,014.12 –

b) Loss on sale of rejected stock 4,068.81 –

38,082.93 –

Less :

c) Deferred Tax Liabilities written back 14,053.85 –

d) Tuf’s Subsidy accrued relating to previous year 6,860.90 –

17,168.18 –



Standalone Cash Flow Statement For the year ended 31st March, 2014

Particulars 31 March, 2014 30 June, 2013

CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before tax and extra ordinary items (62,415.29) (36,077.12)

- Depreciation 7,846.73 10,089.32

(54,568.56) (25,987.80)

Operating Profit Before Working Capital Changes

- Trade and Other receivable (21,047.49) 26,007.20

- Inventories 14,943.64 (1,142.37)

- Trade Payables 5,056.68 3,406.88

- Loans & Advances 33,578.64 (42,764.39)

- Increase in Bank Borrowing (635.07) (11,783.60)

- Short Term Loans (1,861.58) 10,502.39

- Income Tax (14,053.85) -

15,980.97 (15,773.89)

Cash Generated from operations (38,587.59) (41,761.69)

Net cash from operating activities (38,587.59) (41,761.69)

CASH FLOW FROM INVESTMENT ACTIVITIES

- Cash Flow from Operating Activities (38,587.59) (41,761.69)

- Fixed Assets acquired (4,252.78) (10,462.78)

- Sale of Investment 38.56 -

(42,801.81) (52,224.47)

CASH FLOW FROM FINANCE ACTIVITIES

- Proceeds from issue of share capital - 408.50

- Proceeds from issue of share warrant application money 362.52 -

- Proceeds from issue of Debentures - 4,000.00

- Proceeds from issue of FCCB 1,939.52 (408.50)

- Proceeds from Long Term borrowings 40,492.70 48,439.89

- Dividends paid (Including Dividend Tax) - -

Net Cash used in financing activities 42,794.74 52,439.89

Net increase in cash and cash equivalents (7.07) 215.42

Cash and Cash equivalents as at 1st July 2013 724.37 508.95

Cash and Cash equivalents as at 31st March 2014 717.30 724.37

(Rs. in Lacs)






Statement regarding Subsidiary CompaniesStatement pursuant to Section 212 of the Companies Act, 1956, relating to Subsidiary Companies as at 31st March, 2014

1 Name of the Subsidiary Companies Shri Lakshmi Defence Solu-tions Limied

SLCL Overseas, FZC, U.A.E.

Synergy Global Home Inc. N.Y.,

U.S.A.

2 Financial Year of the Subsidiary ended on 31.03.2014 31.03.2014 31.03.2014

3 Shares of the Subsidiary held by the Company on the above date

a) No. of Shares 100,00,000 2,00,000 16,900

b) Face Value 10 10 10

c) Holding Company's interest 99.50% 100.00% 100.00%

4 Net aggregate amount of Profit / (Loss) of the Susidiary so far as they concern members of the Holding Company:

(i) Dealt with in the Holding Company's accounts:

a) For the financial year of the Subsidiary (148.63) (231.32) (8.54)

b) For the previous financial years since it become Holding Company's Subsdiary

186.40 (855.55) 11.08

(ii) Not dealt with in the Holding Company's accounts:

a) For the financial year of the Subsidiary N.A. N.A. N.A.

b) For the previous financial years since it become Holding Company's Subsdiary

N.A. N.A. N.A.

5 Material changes in Subsidiary between the end of its financial year and the financial year of the Holding Company:

a) Fixed Assets Not applicable as accounting

year of the Hold-ing & Subsidiary Company ends on 30th June,

2014

Not applicable as account-ing year of the Holding & Subsidiary

Company ends on 30th June,

2014

Not applicable as accounting year of the Holding & Subsidiary

Company ends on 30th June,

2014

b) Investments made

c) Money lent by Subsidiary

d) Money borrowed by Subsidiary for any purpose other than that of the meeting current liabilities

For and on behalf of the Board

Place: Kanpur Dr. M. P. Agarwal Vivek SaxenaDate : 30th May, 2014 Chairman cum Manging Director Head-Accounts



*Converted into Indian Rupees at the exchange rate, 1AED= Rs. 16.33 as on 31.03.2014.

**Converted into Indian Rupees at the exchange rate, 1USD= Rs. 60.10 as on 31.03.2014.

Notes :

1) The Ministry of Corporate Affairs vide their general circular no. 2/2011 dated 05.02.2011 has granted exemption from the applicability of the provisions of Section 129 of the Companies Act, 2013.

2) The Company will make available the annual accounts of the Subsidiary Company and related detailed information if sought by the members of the Company and its Subsidiary. Further, the annual accounts of Subsidiary Company will be kept for in-spection by any member of the Company or its Subsidiary at the registered office of the Company and that of the subsidiary Company concerned.

Statement regarding Subsidiary CompaniesStatement in terms of general exemption under Section 129 of the Companies Act, 2013 granted by Ministry of Corporate

Affairs vide circular no. 2/2011 dated 08.02.2011 as at 31st March 2014

Name of the Subsidiary Companies Shri Lakshmi Defence Solutions

Limied

SLCL Overseas, FZC, U.A.E.

Synergy Global Home Inc. N.Y.,

U.S.A.

Issued & Subscribed Share Capital 1000.00 20.00 1.69

Reserves & Surplus 704.26 9791.75 (385.01)

Total Assets 4564.20 11133.36 615.17

Total Liabilities 4564.20 11133.36 615.17

Investments (except investment in Subsidiary) Nil 5297.60 Nil

Turnover 2162.75 10432.58 41.96

Profit before Taxation (139.86) (231.32) (8.54)

Provision for Taxation 8.77 Nil Nil

Profit after Taxation (148.63) (231.32) (8.54)

Proposed Dividend Nil Nil Nil

(Rs. in Lacs)

For and on behalf of the Board

Place: Kanpur Dr. M. P. Agarwal Vivek SaxenaDate : 30th May, 2014 Chairman cum Manging Director Head-Accounts

CORPORATE OVERVIEW STATUTORY REPORT FINANCIAL STATEMENTS74 CORPORATE OVERVIEW STATUTORY REPORT FINANCIAL STATEMENTS74

Notes





Notes


IMPORTANT COMMUNICATION TO MEMBERS

Green Initiative in the Corporate Governance

The Ministry of Corporate Affairs has taken a “Green Initiative in the Corporate Governance” by allowing paperless compliances by the Companies and has issued a circular stating that services of notice/documents including Annual Report can be sent by e-mail to its members. In order to overcome the delivery aspect of Notice’s, documents and in the spirit of circular issued by the Ministry of Corporate Affairs permitting the Companies to adopt the “Green initiative in Corporate Governance” by allowing paperless compliances through electronic mode, the Ministry has permitted the corporate entities to send through electronic mode its Notices convening the General Meetings, Financial Statements, Directors’ Report, and Auditors’ Report etc. in elec-tronic form, to the email address provided by you. To support this green initiative of the Government in full measure, Members in respect of electronic holding are requested to inform any changes in their registered e-mail addresses through their concerned Depository Participants and Shareholders holding shares in physical shares are requested to inform their valid e-mail address to the Company at [email protected] and [email protected]. Please note that Annual Report of the Company will also be available at the company’s website at www.shrilakshmi.in.

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