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Annual Report 2017-18

This Annual Report is available online at www.shrilakshmi.in

Only thing that's undeterred is HOPE.

However, it's the unforeseen circumstances, that have overpowered the Company's sustainability.

The business fundamentals remain strong.

The business environment remains dynamic.


You will come across

CORPORATE OVERVIEW

STATUTORY REPORTS

CONSOLIDATED FINANCIALS

STANDALONE FINANCIALS 67 86...44 65...8 43...1 7...

Germany, South Africa, Italy, Spain, South Korea and Australia. Still it is exporting the towels and bedsheets to Walmart.

The Company is integrated across all verticals from yarn manufacture, dyeing togarmenting. It has also installed rise-husk based Captive Power generationcapacity and has an in-house chemical auxiliary unit. The Company enjoyed in the past a strong global presence with its clients across USA, Canada, Latin America, UK, Sweden, France,

Shri Lakshmi Cotsyn Limited (SLCL) at a glance

ISO9001:2008

SLCL offers world-class products under the regular and technical textiles. Its innovative product offerings has been acknowledged through its leadership in the eld of terry towels, home furnishing, wider width sheeting, denim fabrics, infra-red protective fabrics and several technical textiles like ex fabric, black out fabric, industrial ock fabric, breathable fabric and membranes laminated fabric.

Certied byTranspacicCerticationsLimited

Product offerings and capacities

15,000 MTPA

Terry Towels

Abhaypur Unit

66 lakh pieces per annum

Readymade garments

Roorkee

3 lakh pieces per annum

Quilts/comforters

Noida

60 lakh MTPA

Bottom Weight

200 lakh mtrs per annum

Wider Width Sheeting

400 lakh meters

Denim

27,168Spindles

120 lakh mtr

Technical textile fabric

12.5 lakh mtr

Nylon coated fabric

200 lakh mtr

Black out fabric

170 lakh mtr

Flex fabric

100 lakh mtr

NBC fabric

50 lakh mtr

IRR/MSCN fabric

Rewari Bujurg Malwan Main Unit

32


Chairman'sMessageDear Shareholders,

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

There's a very famous saying - We must accept nite disappointment, but never lose innite hope.

Amidst the difcult time of your company, there is always some hope and redemption, not because we like happy endings, but because I am an optimist at heart. I know the sun will rise in the morning, that there is a light at the end of every tunnel.

As you are aware, the Company has been facing back to back challenges since last few years. Initially we were hit by the global slowdown and the heavy increase in yarn price.This was fo l lowed by demonet i sa t ion and GST implementation. However, the major setback came after our ex fabric project did not take off as expected. This project was quite important for the Company's future. However, continuous delay in funding and nal denial for the same led us to challenges in serving our day-to-day working capital needs. As such, major part of our plants ceased to operate.

The National Company Law Tribunal has admitted insolvency proceedings owing to the non-payment of outstanding loans of Rs [5,762 ] crores. All our units are under the bank's possession. Mr RohitSehgal,a partner at the Delhi-based AAA Insolvency Professionals LLP, has been appointed as the Resolut ion Professional (RP). Under the Regulation 36A (1), of the Insolvency and Bankruptcy Regulations 2016 Resolution Professional has invited Expression of Interests (EOI) from the potential investors. Based on the bids submitted by the investors, the banks will decide upon the future course of action.

Warm Regards, Dr M P Agarwal

At present, we are only operating at 20-25% of total production capacity. Out of our 8 units, 2 are already sold by bank. From the remaining 6, we have kept only 3 units operational to meet the running expenses. We are consistently serving the export requirements of one of our oldest clients – Walmart. It clearly speaks of the quality, capability and infrastructural strengths.

I am quite hopeful that some resolution will come for turnaround in operations. I am thankful to my employees for being with us across the thick and th in s i tua t ion o f the Company. I a lso acknowledge the shareholders, bankers, creditors as well as Auditors for their trust and faith in us. I also whole heartedly thanks to Resolution Professional Mr Rohit Sehgal for his untiring efforts in running the units. Our Board Members continue to guide us towards our desired objectives. With right intentions and dedicated efforts, we are extremely hopeful of receiving a good response from the potential investors towards the revival of your Company.

54


Mrs. Sharda AgarwalPromoter Director

Prof. (Dr.) R.K.TrivediIndependent Director

Profile of Directors

Mr. Pawan AgarwalJoint Managing Director

Mr. Devesh Narain GuptaDeputy Managing Director

Dr. M. P. AgarwalChairman & Managing Director

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

Actively involved in the business of the Company, playing an active role in the management of the Company.

He is Science graduate and has prociency in computer application, fabric processing and technical textiles. He has around 23 years of rich experience and controlling production activities, quality controls and marketing.

He has rich experience of 35 years in Textile Auxiliary manufacturing, Chemical Engineering, procurement and inventory management. He is entirely taking care of raw material procurement textile, chemical engineering process, efciency and tight control over cost

Dr. Trivedi is currently Professor at HBTI, Kanpur & Director STEP-HBTI and also holds the position of Vice-President of Oil Technologist Association of India (HQ). He has been a Ex- Director in Dr Ambedkar Institute of Technology, Kanpur and Teaching Faculty in the Department of Oil & Paint Technology at HBTI, Kanpur for 31 Years and has worked as Honrary General Secretary of OTAI for 6 years. He is also Chairman of Indian Institute of Chemical Engineers, Kanpur region. He has also worked as Chief Co-Investigator of 2 SICI-CIDA partnership project between HBTI and University of Guelph, Canada and as consultant to MI, WHO, CPCB, MARKFED, HAFED.

76


Shri Lakshmi Cotsyn LimitedAnnual Report 2017-18

8

BOARD OF DIRECTORS

Dr. M.P. AGARWAL - Chairman cum Managing Director

Mr. PAWAN KUMAR AGARWAL - Joint Managing Director

Mr. DEVESH NARAIN GUPTA - Dy. Managing Director

Mrs. SHARDA AGARWAL - Execu�ve Director

Prof. (Dr.) R. K. TRIVEDI - Independent Director

COMPANY SECRETARY & FINANCE CONTROLLER

Mr. RAKESH KUMAR SRIVASTAVA

HEAD ACCOUNTS

Mr. VIVEK SAXENA

STATUTORY AUDITORS

M/s. TANDON & TANDON

9/81, Arya Nagar

Kanpur - 208 002

INTERNAL AUDITORS

M/s. SRIVASTAVA S & CO.

Chartered Accountants

102/206-A, Swaroop Nagar

Kanpur - 208 002

Ph. No. : (0512) 2551249

COST AUDITORS

Mr. A. K. SRIVASTAVA

96, Harjender Nagar

Kanpur - 208 007

Ph. No. : 098391 16989

RESOLUTION PROFESSIONAL (RP)

Mr. ROHIT SEHGAL

Partner

AAA Insolvency Professionals LLP

E-10A, Kailash Colony, Greater Kailash - I

New Delhi - 110 048

LEGAL ADVISOR

DHIR & DHIR ASSOCIATES

Advocates & Solicitors

D-55, Defence Colony

New Delhi - 110 024

www.dhirassociates.com

P. R. ADVISOR

S. K. ADVERTISERS

MIG F-4, Gujaini, Kanpur - 208 022

Ph. No. : (0512) 2282265

Corporate Information

BANKERS & ARC CONSORTIUM

1. Central Bank of India

2. Syndicate Bank

3. Union Bank of India

4. Canara Bank

5. Bank of Baroda

6. Punjab Na�onal Bank

7. Indian Bank

8. State Bank of India

9. Exim Bank

10. Oriental Bank of Commerce

11. IDBI Bank

12. Vijaya Bank

13. Corpora�on Bank

14. Saraswa� Bank

15. Andhra Bank

16. Edelweiss Asset Reconstruc�on Company Ltd.

MONITORING INSTITUTION FOR LENDERS

Central Bank of India

CFB, Jeevantara Building, Parliament Street

New Delhi - 110 001

SECURITY TRUSTEE FOR LENDERS

Centbank Financial Services Limited

1st Floor, Link House, Bahadurshah Zafar Marg

New Delhi - 110 002

REGISTERED OFFICE

19/X-1, Krishnapuram

G. T. Road, Kanpur, U.P. 208 007

Ph. No. : (0512) 2402893, 2402733

CORPORATE OFFICE

C-40, Sector - 57, Noida, U.P.

Ph. No. : (0120) 4544780

SUBSIDIARY COMPANIES

1. SLCL Overseas (FZC)

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

2. Shri Lakshmi Defence Solu!ons Ltd.

Rahsoopur, Tehsil Bindki

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

3. Synergy Global Home Inc.

160, Green Tree Drive, Suite 101, Drover

Kent - 19904, USA

Company Overview Statutory Reports Consolidated Financials Standalone Financials

9

REGISTRAR & TRANSFER AGENTS

M/s. Abhipra Capital Ltd.

GF-58-59 World Trade Centre

Barakhamba Lane, New Delhi - 110 001

Ph. No. : (011) 2341 4629, 2341 3893

E-mail : [email protected]

UNITS :

(a) MALWAN UNIT

UPSIDC Industrial Area

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

Ph. No. : (05181) 248 669

(b) ABHAYPUR UNIT

P.O. : Aung, G.T. Road, Dist. Fatehpur, U.P.

(c) REWARI BUJURG UNIT

Village & Post. - Rewari Bujurg

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

(d) NOIDA UNIT (CLOSED)

C-40, Sector - 57, Noida

Ph. No. : (0120) 4722700

(e) ROORKEE UNIT (CLOSED)

Dev Bhoomi Industrial Estate

Village Banta Kheri, Tehsil Roorkee

Dist. Haridwar, U!aranchal

Ph. No. : (01332) 231961

(f) SPINNING UNIT (CLOSED)

UPSIDC Industrial Area

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

WEBSITE :

www.shrilakshmi.in

E-MAIL ID :

[email protected]

CORPORATE IDENTITY NUMBER (CIN)

L17122UP1988PLC009985

DEMAT ISIN NSDL & CDSL

INE851B01016

LISTING

Bombay Stock Exchange

Floor 25, P.J. Towers

Dalal Street, Mumbai - 400 051

Ph. No. : (022) 2272134

Na!onal Stock Exchange

5th Floor, Exchange Plaza

Bandra (E), Mumbai - 400 051

Ph. No. : (022) 26598100

SCRIP CODE

BSE : 526049

NSE : SHLAKSHMI

BLOOMBERG CODE

SLCL IN

REUTERS CODE

SHLK.BO


10

Company overview

Shri Lakshmi Cotsyn Limited (SLCL) manufactures technical tex�les, denim, terry towels, bo�om weights and home furnishing,

among others. It also develops high margin technical and safety tex�les (Water Repellent Bed Linen, Vitamin E bed Linen,

Fire Retardant Fabrics, Organic Bedspread, Breathable Fabrics, NBC (Nuclear, Bio-Chemical) Fabrics, MSCN (Mul�spectral

Camouflage Nets) Fabric, Flex Fabric, Blackout & ECW (Extreme Cold Weather) Fabric. The Company had eight state-of-

the-art manufacturing facili�es located across India but presently only Malwan unit (Denim, Bed Linen & Bo�om Weight),

Abhaypur unit (Terry Towel) and Rewari unit (Technical Tex�les) are opera�onal and are working on job work at 10 to 20%

capacity u�liza�on. Out of 8 units, three units i.e. Noida unit, Roorkee unit and Spinning unit are closed due to working capital

constraints and 2 Units namely Aung Unit and sonepat unint. Unit has been sold out by CBOI in 2017-18.

Global tex!le industry

The global tex�le mills market is forecast to reach $842.6 billion in value in 2020, an increase of 26.2% since 2015. The

compound annual growth rate of the market in the period 2015–20 is predicted to be 4.8%. [Data source: MarketLine (2017)]

Indian tex!le industry

Overview

India’s tex�les sector is one of the oldest industries in Indian economy da�ng back several centuries. Even today, tex�les sector

is one of the largest contributors to India’s exports with approximately 13 per cent of total exports. The tex�les industry is

also labour intensive and is one of the largest employers. The tex�le industry has two broad segments. First, the unorganised

sector consists of handloom, handicra!s and sericulture, which are operated on a small scale and through tradi�onal tools

and methods. The second is the organised sector consis�ng of spinning, apparel and garments segment which apply modern

machinery and techniques such as economies of scale.

The tex�le industry employs about 105 million people directly and indirectly. India's overall tex�le exports during FY 2017-18

stood at US$ 37.74 billion.

The Indian tex�les industry is extremely varied, with the hand-spun and hand-woven tex�les sectors at one end of the

spectrum, while the capital intensive sophis�cated mills sector at the other end of the spectrum. The decentralised power

looms/ hosiery and kni"ng sector form the largest component of the tex�les sector. The close linkage of the tex�le industry

to agriculture (for raw materials such as co�on) and the ancient culture and tradi�ons of the country in terms of tex�les

make the Indian tex�les sector unique in comparison to the industries of other countries. The Indian tex�le industry has the

capacity to produce a wide variety of products suitable to different market segments, both within India and across the world..

Opportuni!es

Given the macro-economic trends and interna�onal events shaping the Indian and global economy, the Indian tex�le industry

is looking at vast opportuni�es.

• Tex�le plays a major role in the Indian Economy

(i) It contributes 14 per cent to industrial produc�on and 4 per cent to GDP

(ii) With over 45 million people, the industry is one of the largest source of employment genera�on in the country

• The size of India’s tex�le market as of July 2017 was around US$ 150 billion which is expected to touch US$ 250 billion

market by 2019, growing at a CAGR of 13.58 per cent between 2009-2019.

• The central government is planning to finalise and launch the new tex�le policy in the next three months. The policy

aims to achieve US$ 300 billion worth of tex�le exports by 2024-25 and create an addi�onal 35 million jobs.

Challenges

Despite being compe��ve, the tex�le industry is exposed to the following challenges:

• Lower produc�vity owing to declining availability of medium to high skilled workers

• Higher cost of produc�on, owing to older machineries and infrastructure

Management Discussion and Analysis


11

• Thinner margins, owing to lower value-addi!on

• Conven!onal mindset, resul!ng in slower modernisa!on process

• Inconsistent raw material prices

• Poor supply chain and reluctance in brand promo!ons

• Threat from compe!!on, both from domes!c and abroad

• Vola!le interest rates and unfavourable exchange rate fluctua!ons

Government ini�a�ves

The Indian government has come up with a number of export promo!on policies for the tex!les sector. It has also allowed

100 per cent FDI in the Indian tex!les sector under the automa!c route. Government’s support with favourable policies has

been a key ingredient for the growth of this industry. Ini!a!ve taken into considera!on by Government of India are:

• The Union Ministry of Tex!les, Government of India, along with Energy Efficiency Services Ltd (EESL), has launched a

technology upgrada!on scheme called SAATHI (Sustainable and Accelerated Adop!on of Efficient Tex!le Technologies to

Help Small Industries) for reviving the powerloom sector of India.

• The Government has planned to connect as many as 5 crore (50 million) village women to charkha (spinning wheel) in

next 5 years with a view to provide them employment and promote khadi and also, they inaugurated 60 khadi outlets

which were renovated and re-launched during the comple!on of KVIC s 60th anniversary and a khadi outlet.

• The Tex!les Ministry will organise 'HastkalaSahyogShivirs' in 421 handloom-handicra$s clusters across the country which

will benefit over 1.2 lakh weavers and ar!sans.

• The Gujarat government's decision to extend its tex!le policy by a year is set. It is believed to a&ract Rs 5,000 crore (US$

50 billion) of more investment in sectors across the value chain. The government es!mates addi!on !ll now of a million

units of spindle capacity in the spinning sector and se+ng up of over 1,000 units in technical tex!les.

• The Tex!le Ministry of India earmarked Rs 690 crore (US$ 106.58 million) for se+ng up 21 ready made garment

manufacturing units in seven states for development and modernisa!on of Indian Tex!le Sector.

Some of ini!a!ves taken by the government to further promote the industry are as under:

• The Directorate General of Foreign Trade (DGFT) has revised rates for incen!ves under the Merchandise Exports from

India Scheme (MEIS) for two subsectors of Tex!les Industry - Readymade garments and Made ups - from 2 per cent to 4

per cent.

• The Government of India plans to introduce a mega package for the power loom sector, which will include social

welfare schemes, insurance cover, cluster development, and upgrada!on of obsolete looms, along with tax benefits and

marke!ng support, which is expected to improve the status of power loom weavers in the country.

• The Government of India has taken several measures including Amended Technology Up-grada!on Fund Scheme

(A-TUFS), launch of India Handloom Brand and integrated scheme for development of silk industry, for the strategic

enhancement of Indian tex!les quality to interna!onal standards.

Investment

The tex!les sector has witnessed a spurt in investment during the last five years. The industry (including dyed and printed)

a&racted Foreign Direct Investment (FDI) worth US$ 2.82 billion during April 2000 to December 2017.The Cabinet Commi&ee

on Economic Affairs (CCEA), Government of India has approved a new skill development scheme named 'Scheme for Capacity

Building in Tex!le Sector (SCBTS)' with an outlay of Rs 1,300 crore (US$ 202.9 million) from 2017-18 to 2019-20.

SLCL’s compe��veness

• Established reputa!on and reliability as a manufacturer and supplier of quality products in technical and safety tex!les

• Strong infrastructure with state-of-the-art large manufacturing facili!es at 6 loca!ons



12

• Diversified product por�olio with nicheproduct offerings for domes�c and interna�onal brands

• Economies of scale through integra�on

• Larger reach owing to strong distribu�on network across its product lines

• Strong R&D capabili�es proven over a decade with launch of innova�ve products

Weakness

• Unfavourable raw material prices

• Inconsistent mix of domes�c and export revenues

• High leverage

Opportunity

• Capture poten�al markets across tex�le and defence segmentsthrough stronger promo�onal strategy

• Modernise machineries and higher customisa�on

• Explore new sectors of growth

Threat

• Higher compe��on from unorganized sectors and other peers

• Import threats fromforeign country in respect of Home tex�le &Technical Tex�le products.

• Fluctua�ng raw material prices

Financial review

Accounts prepared on a historical cost basis, based on accrual method of accoun�ng in accordance with applicable accoun�ng

standards issued by The Ins�tute of Chartered Accountants of India.

High liquidity constraints during the year adversely affected Company’s financial performance during the year.

Quality

Our obsession with maintaining quality has made us a preferred partner to the marquee players. Our quality commitment

is reinforced via globally benchmarked quality assurance protocols. We ensure stringent quality checks at every stage of the

produc�on. Inconsistencies found at any stage are traced back to origin to iden�fy the root cause and carrying out correc�ve

measures to avoid future repe��on. This enables us to deliver and match our client’s requirements. We have adaptedadvanced

TQM methodologies to deliver consistency through across pre-set parameters. In the event of non-compliance, the product

is rejected

Human Resources & Industrial Rela!ons

Human Resource plays vital role in your company. If finance is the blood of any organiza�on then Human Resource is not less

than pulse which keeps running produc�on by their hard work day and night. Your company has performancemanagement

process to mo�vate people to give their best output and encourages innova�on and meritocracy. Board places on record

their apprecia�on and sincere thanks towards their contribu�on to the Company’s performance during the year.

Risk Management

The Company’s risk management framework iden�fies the following poten�al risks:

• Unfavourable industry slowdown andincreasing compe��ve pressures from the Indian peers and neighbouring countries.

• Adverse currency movements can erode profitability

• Inability to cope up with the changing tastes and preference of the customers.

• Poor quality and weaker distribu�on strategy may eat away company’s market share



13

Internal control system

The large size and nature of the business demands the Company to maintain a proper internal control system. Constant efforts

are made by the management to maintain a sound financial and commercial prac#ce capable of improving the efficiency of

the opera#ons and sustainability of the business. The system ensures that all assets are safeguarded and protected against

loss from unauthorised use or disposi#on and that those transac#ons are authorised, recorded and reported correctly.

Opera#ng managers make sure that all the opera#ons within their area are compliant and safeguarded against any risks,

whereas the internal auditors carry out random audits to detect flaws in the system. Internal audit reports are prepared on

the respec#ve areas/units to create awareness and correc#ve ac#ons are taken to rec#fy them. These reports are reviewed

by the management team and then by the Audit Commi&ee of the Board for follow up ac#on.

Corporate Social Responsibili!es

The Company con#nues to strive for sustainability in opera#ons by promo#ng the integra#on of CSR into business strategy as

well as everyday func#oning. The Company will con#nue to focus its resources, strengths and strategies to achieve its vision

of crea#ng a rich product mix in a largely matured Indian Tex#le market. Our comprehensive set of policies, prac#ces and

programs are integrated throughout business opera#ons and decision-making processes where environmental and social

performance is managed alongside financial performance.

Beyond profit maximiza#on, we extend to include an acknowledgement of our responsibility to a broad range of stakeholders,

as well as employees, customers, communi#es and the environment.

Employee welfare

The Company believes that alignment of all employees to a shared vision and purpose is vital for winning in the market

place. It also recognizes the mutuality of interests with key stakeholders and is commi&ed to building harmonious employee

rela#ons. We adhere to strict labour compliance to all working condi#ons and benefits as directed under Indian Labour

Laws. Besides, we ensure healthy working environment and proper housing, medical facili#es, gratuity and Insurance (GPA)

benefits to the employees. We have also developed a housing colony for our workers/staff with all necessary ameni#es like

water purifier, parks etc. at Malwan.

Health and safety

The Company assures 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 crea#ve

power. We pursue safety and health companywide and seek to assure the safety of our employees and promote and maintain

their health. We make con#nuous efforts to improve our standards of safety health management.

Environment

The Company undertakes numerous ini#a#ves, involving employees towards the be&erment of the environment. It is

reflected in the following ini#a#ves:

• In campus greening

• Encouraging judicious use of natural resources

• Recycling, pollu#on control to ensure clean air and water and reduc#on of landfill wastes

• In-house Chemical auxiliary unit rice-husk based cap#ve co-genera#on power plants, resul#ng in op#mum resource

u#lisa#on

Your Company has followed “Green Ini!a!ve in Corporate Governance” by allowing paperless compliances through

electronic mode. To contribute to the Corporate Social Responsibility, ini#a#ves have already been taken and the Company

also con#nues to pursue its mission for environmental excellence and constantly explores opportuni#es to improve ecology

and environment.



14

Outlook

The Indian domes�c and export market is poised for double-digit growth owing to structural changes in the country and

interna�onal events shaping the global trade.

The future for the Indian tex�le industry looks promising, buoyed by both strong domes�c consump�on as well as export

demand. With consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the past

decade with the entry of several interna�onal players like Marks & Spencer, Guess and Next into the Indian market.

High economic growth has resulted in higher disposable income. This has led to rise in demand for products crea�ng a huge

domes�c market. The domes�c market for apparel and lifestyle products, currently es�mated at US$ 85 billion, is expected

to reach US$ 160 billion by 2025.

On the back of the changing macro-economic scenario, the Company will explore possibili�es of bouncing back and leveraging

the favourable external scenario.

References: Ministry of Tex�les, Indian Tex�le Journal, Department of Industrial Policy and Promo�on, Press Informa�on

Bureau, Union Budget 2017-18



15

Your Directors have the pleasure in presen!ng the 30th Annual Report along with the Audited financial statements of the

Company for the financial year ended on 31st March, 2018:

FINANCIAL RESULTS

Highlights of financial results (Stand-alone & Consolidated) for the year were as under: (` in Crores)

Par!culars 2017-18

Stand Alone

2016-17

Stand Alone

2017-18

Consolidated

2016-17

Consolidated

Sales and other income 195.79 309.32 195.84 315.93

Opera!ng profit before interest, deprecia!on and

tax(22.06) (24.90) (22.09) (24.85)

Less:

Interest and other financial charges 2.14 2.68 2.14 2.68

Deprecia!on 87.35 88.67 88.16 89.51

Excep!onal Items (16.40) (155.49) (5.72) (149.37)

Prior period item - - (1.10) -

Profit/ Loss before tax (127.95) (271.74) (118.11) (266.42)

Less: Income Tax (including deferred tax) - - 0.04 -

Profit/ Loss a#er tax (127.95) (271.74) (118.07) (266.42)

Proposed dividend - - - -

Dividend tax - - - -

Balance carried to balance sheet (127.95) (271.74) (118.07) (266.42)

PERFORMANCE:

Performance Highlights - Stand-alone:

Your Directors wish to inform you that during the year 2017-18, Company faced lot of problems on account of financial stress

hence opera!ons of the units were restricted between 20% to 35% of its installed capacity.

During 2017-18, the Company recorded sales and other income at Rs.195.79 crores as compared to ` 309.32 crores in

2016-17. The loss (before/a#er tax) has been decreased to ` (127.95) crores in 2017-18 as compared to ` (271.74) ) crores in

2016-17 due to more capacity u!liza!on on account of job work.

Performance Highlights - Consolidated:

During 2017-18, the Company recorded sales and other income at ` 195.84 crores as compared to ` 315.93 crores in 2016-

17. During the year 2017-18, the profit/loss before tax has been decreased to Rs. (118.11) crores as compared to ` (266.42)

crores in 2016-17. The profit/loss a#er tax stood at ` (118.07) Crores in 2017-18 as compared to ̀ (266.42) crores in 2016-17.

JOB WORK:

During the year, company has earned a major por!on of its revenue from jobwork i.e., approx. 65% of total revenue. The world

renowned suppliers of denims, shee!ng & terry towel are giving jobwork to the company in view of imported machinery,

state of art infrastructure and superior quality product. Jobwork has enabled the company to reduce its cash losses & increase

its capacity u!liza!on.

STATUS OF FUNCTIONING OF UNITS OF THE COMPANY:

Out of eight units, three units are closed i.e. Noida unit, Roorkee unit and Spinning due to working capital constraints. Aung

Unit and sonepat unit was sold out by Central Bank of India during the year 2017-18.

Presently Malwan unit (Denim, Bed Linen & Bo$om Weight), Abhaypur unit (Terry Towel) and Rewari unit (Technical Tex!les)

are opera!onal and are working on job work at 10 to 20% capacity u!liza!on.

Board's Report


16

Board's Report

However, a�er ini�a�on of Corporate Insolvency Resolu�on Process, suppliers and workers were requested to submit the

claim form for their arrears, which resulted in labour non-coopera�on and unrest. The suppliers also stopped supplying

materials and workers stopped working. Hence complete produc�on ac�vi�es were halted, w.e.f. 10 June 2018. Abhaypur

unit is equipped with manufacturing facili�es of Terry Towel and is in working condi�on as on date at average capacity of

30-35%.

INITIATION OF CORPORATE INSOLVENCY RESOLUTION PROCESS (CIRP) FOR THE COMPANY UNDER THE PROVISIONS OF

INSOLVENCY AND BANKRUPTCY CODE 2016:

Hon’ble Na�onal Company Law Tribunal (NCLT), Allahabad bench has admi!ed the pe��on filed by Union Bank of India

vide its order dated 30th May 2018 under Insolvency and Bankruptcy Code 2016 and appointed Mr. Rohit Sehgal, Partner

of AAA Insolvency LLP having Insolvency Professional Registra�on no. IBBI/IPA-001/IP-P00528/2017-18/10953, as the

Interim Resolu�on Professional of the Company and a moratorium period has been declared for a period of six months w.e.f.

30.05.2018.

Mr. Rohit Sehgal has been subsequently confirmed as Resolu�on Professional (“RP”) by the Commi!ee of Creditors (“CoC”)

cons�tuted as per the provisions of the Code, pursuant to the majority decision of CoC dated 26th June 2018. Mr. Sehgal has

taken over the possession of all the units of the company through security agency and the powers of the exis�ng Board of

Directors of the Company has been suspended.

Mr. Sehgal has started the ac�vi�es towards Corporate Insolvency Resolu�on Process (CIRP) and appointed Valuer, Forensic

Auditor and also floated Expression of Interest to the prospec�ve Investors. The Resolu�on Plan is yet to come.

STATUS OF LEGAL CASES OF THE COMPANY :

As already men�oned that the Company is under Corporate Insolvency Resolu�on Process (CIRP) and undergoing with the

moratorium of six months period, hence all the Winding-up pe��ons and Civil suits against the Company are stayed. However,

the moratorium period declared by the Hon’ble Na�onal Company Law Tribunal (NCLT) does not cover the promoters/

guarantors of the company, hence they are contes�ng the cases filed by the Banks at DRT, Delhi separately.

Besides, the promoters/guarantors are also contes�ng the cases filed by the Central Bank of India under Sec�on 138 of

Nego�able Instrument Act. A List of all the cases shall be available for inspec�on at ensuing Annual General Mee�ng.

EXPORTS

Despite of all the adverse situa�ons, the Company recorded an export of ` 41.44 crores in 2017-18 as against ` 40.08 crores

in 2016-17 on Stand-alone basis as well as Consolidated basis.

WHOLLY-OWNED SUBSIDIARY COMPANIES:

The Company has three opera�onal subsidiary companies, details of which are as under:

M/s Shri Lakshmi Defence Solu!ons Ltd.

The company was incorporated on 19.12.2006 and engaged in manufacturing of bullet proof jacket, bullet proof helmet,

armored vehicles, bullet proof morchas and other ballis�c products for defense and homeland security. Due to the scarcity

of working capital, the Company could not operate its func�oning and also could not repay its loan of the Bank of Baroda.

The Bank a�er turning its account as NPA has taken over the possession of the unit and was trying to sale the unit as such.

The Company has obtained stay order from DRT Allahabad against the sale of unit.

During the year 2017-18, the Company has not done any business and so not recorded any sales but earned other income of

Rs. 4.54 Lacs as compared with revenue from opera�ons (trading ac�vi�es) of Rs. 405.88 Lacs and other income of Rs. 24.60

Lacs in 2016-17. However, due to the closure of factory, the Company has incurred running expenses and suffered net loss

of Rs. (78.28) Lacs in 2017-18 a�er considering deferred tax of Rs. 3.91 Lacs as compared to a net loss of Rs. ( 56.58) Lacs in

2016-17.

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 Interna�onal Free Zone, Sharjah, at UAE.

It is engaged in trading of 100% Polyester fabric material, garments and a like products.

During the year 2017-18, the Company has not done any business, therefore there is no turnover or profit in the year 2017-18

as compared with Rs. 230.43 Lacs in 2016-17.


17

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 2017-18, M/s Synergy Global Home Inc. has not done any business as in the previous year 2016 -17, therefore

there is no turnover or profit/loss in the year 2017-18.

Further there are other two non-opera"onal subsidiaries viz., M/s ShriLakshmi Power Limited and M/s Shri Lakshmi

Nano Technologies Limited of Shri Lakshmi Cotsyn Limited under sec"on 2(87) of the Companies Act 2013. However since

incorpora"on both the companies are not in opera"on therefore accounts of both companies could not be consolidated with

the accounts of its holding company. Therefore consolidated Financial statement of M/s Shri Lakshmi Cotsyn Limited does not

include the financial statement of M/s ShriLakshmi Power Limited and M/s Shri Lakshmi Nano Technologies Limited.

EXEMPTION UNDER SECTION 129 OF THE COMPANIES ACT, 2013 FOR NOT ATTACHING THE BALANCE SHEET OF THE

SUBSIDIARY COMPANIES:

In pursuance with the provisions of Sec"on 129 of the Companies Act, 2013, the requirement of a#aching the Financial

Statements, Auditors’ Report and Directors’ Report of the subsidiaries concerned has been dispensed with and therefore,

Board of Directors of your Company have given their consent for not a#aching the balance sheet of the subsidiary concerned.

The Statement in Form AOC-1 containing the salient features of the financial statements of your Company’s subsidiary

companies pursuant to first proviso to Sec"on 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014,

forms part of the Annual Report.

The Annual Accounts of the subsidiary companies shall also be kept for inspec"on by any shareholders at the Registered

Office of the holding Company on any working day and of the subsidiary companies concerned. The Company shall furnish a

hard copy of details of accounts of subsidiaries to any shareholder on demand.

DIRECTORS:

Changes in Directors and Key Managerial Personnel :

During the period, Dr. Gyanesh Narayan Mathur, an Independent Director of the company ceased to be the director of

company w.e.f. 13th February, 2018 due to con"nuous absenteeism from all the mee"ngs of Board of Directors held during

the period of twelve months commencing from February 13th, 2017 without seeking leave of absence under Sec"on 167(1)

(b) of the Companies Act 2013.

Declara!on by an Independent Director (s) & re- appointment, if any

A declara"on by an Independent Director that he meets the criteria of independence as provided in sub-sec"on (6) of Sec"on

149 of the Companies Act, 2013 has been obtained.

Number of mee!ngs of the Board of Directors

A calendar of Mee"ngs is prepared and circulated in advance to the Directors.

During the Financial year 2017-18, Four mee"ngs of Board of Directors were held. The mee"ngs were held on 30th May 2017,

11th August 2017, 13th November 2017 and 13th February 2018. The maximum "me gap between any two mee"ngs was

not more than four calendar months.

Audit Commi"ee

The composi"on of an Audit Commi#ee and details of mee"ng are stated in the Corporate Governance Report.

Details of establishment of vigil mechanism for directors and employees

The vigil mechanism for directors and employees to report genuine concerns has been established as per the provisions of

Sec"on 177(9) read with Rule 7 of the Companies (Mee"ng of Board and its Powers) Rules, 2014 for directors and employees

to report their genuine concerns or grievances.

Par!culars of loans, guarantees or investments under sec!on 186:

Details of Loans, Guarantees and Investments covered under the provisions of Sec"on 186 of the Companies Act, 2013 are

given in the notes to the Financial Statements.

Board's Report


18

Related Party Transac�ons:

All related party transac�ons that were entered into during the financial year were on an arm’s length basis and were in

the ordinary course of business. There are no materially significant related party transac�ons made by the Company with

Promoters, Directors, Key Managerial Personnel or other designated persons which may have a poten�al conflict with the

interest of the Company at large.

Board Evalua�on

Pursuant to the provisions of the Companies Act, 2013 and Lis�ng Regula�ons, the Board has carried out an annual

performance evalua�on of its own performance, the directors individually as well as the evalua�on of the working of its

Finance, Audit Grievance, Nomina�on & Remunera�on and Compliance Commi!ees etc. The Management evaluates the

performance of commi!ees and its func�oning at regular intervals.

Remunera�on & Nomina�on Policy

The Board has framed a policy which lays down the framework in rela�on to selec�on and appointment of Directors, Senior

Management of the Company and in rela�on to their remunera�on.

Risk Management Policy:

A statement indica�ng development and implementa�on of a risk management policy for the Company are set out in the

corporate governance report forming part of the Board report.

Share Capital

During the Financial Year 2017-18, the Company has not issued any equity shares, so there has been no change in share

capital.

Dividend

Since the Company and its subsidiaries have incurred the loss, hence ques�on of declara�on of any dividend for the year

ended on 31st March, 2018 does not arise.

Transfer of unpaid and unclaimed dividend amount/ shares to Investor Educa�on and Protec�on Fund:

Pursuant to the applicable provisions of the Companies Act 2013 and the rules made thereunder, all unpaid and unclaimed

dividends are required to be transferred by the Company to the pertaining Investor Educa�on and Protec�on Fund a"er the

comple�on of 7 years. Further pursuant to the provisions of these Rules, shares in respect of whom the dividend hasn’t been

claimed by the shareholders, shall be credited to a Dematerialisa�on Account of the Authority. Accordingly the Company has

transferred unpaid and unclaimed dividends pertaining to the financial year 2009-10 amoun�ng to Rs. 7,43,193 and also

1,85,750 number of equity shares were transferred as per the requirement of the IEPF Rules during the financial year under

review.

Shareholders are requested to claim the unclaimed dividend so that the shares will not be transferred to DEMAT Account

of IEPF Authority. Please note that no claim shall lie against company in respect of the unclaimed dividend and shares

transferred to the IEPF Authority. However, the unclaimed shares and dividend can be claimed from the IEPF by making

necessary applica�on in the prescribed Form (IEPF-5) available on website www.iepf.gov.in

AUDITORS

STATUTORY AUDITORS:

Pursuant to the provisions of Sec�on 139 of the Act read with Companies (Audit and Auditors) Rules, 2014, as amended

from �me to �me, M/s Tandon & Tandon, Chartered Accountants (Firm Registra�on No. 002070C), were appointed as the

Statutory auditors of the Company to hold office for a period of five consecu�ve years from the conclusion of the 29th Annual

General Mee�ng of the Company held on 26th September 2017, �ll the conclusion of the 34th Annual General Mee�ng to

be held in the year 2022, subject to ra�fica�on by shareholders at each Annual General Mee�ng or as required under law.

Accordingly, the necessary resolu�on for appointment of auditors is being placed before the shareholders for ra�fica�on.

COST AUDITOR

The Central Government’s Cost Auditor order specifies an audit of cost accoun�ng records of the tex�le Company every

year. This is applicable to the products manufactured by the Company. The Board of Directors, subject to the approval of

Board's Report


19

the Central Government, ra!fied the appointment of Mr. Arun Kumar Srivastava, Cost Accountants, Kanpur, to carry out cost

audit for the current year 2018-19.

INTERNAL AUDITOR

The Company ra!fied the appointment of a firm of Chartered Accountants M/s Srivastava S and Company of Kanpur as

internal auditors to review the internal control systems of the Company and report thereon. The Report of the Internal

Auditors is reviewed by the Audit Commi#ee.

SECRETARIAL AUDITOR:

Pursuant to the provisions of Sec!on 204(1) of the Companies Act 2013 read with the Companies (Appointment and

Remunera!on of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Sanjiv Nigam, Company Secretary in

Prac!ce, (C. P. No. 8458) to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed

herewith as “Annexure A”.

ENVIRONMENTAL SUSTAINABILITY

With an increasing concern towards ecology and global warming, consumers are favoring organic and eco-friendly tex!le

products. Therefore, the demand of organic co#on is accelera!ng with brands and retailers con!nuing to implement long-term

commitment to increase their use of organic co#on. Your Company also con!nues to pursue its mission for environmental

excellence and constantly explores opportuni!es to improve ecology and the environment.

RESEARCH AND DEVELOPMENT

The company posses in-house R&D facili!es which results in cost saving. The con!nuous R&D efforts enabled the company

to product innova!on.

Company’s R&D strategy is anchored on the development and speedy commercializa!on of globally compe!!ve products,

processes and technologies through best-in-class research interven!ons backed by world-class infrastructure. It has a strong

R&D cell for advanced tes!ng laboratories.

INSURANCE

All the insurable assets of your Company including inventories, building, plant and machinery were adequately insured.

CORPORATE GOVERNANCE AND MDA REPORTS FOR THE YEAR 2017-18:

The Corporate Governance and MDA Report, which form an integral part of this Report, forms part of this Report and is

annexed in the Annual Report, together with the Cer!ficate from the auditors of the Company regarding compliance with the

requirements of Corporate Governance as s!pulated in the Lis!ng Regula!ons.

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 mails documents and various other no!ces (including no!ce calling Annual General Mee!ng, Audited Financial

Statements, Directors’ Report, Auditor’s Report etc) to the shareholders through electronic mode to the registered e-mail

addresses of shareholders.

STATUTORY INFORMATION:

(A) Par!culars of employees

The industrial rela!ons throughout the year under review remained cordial except from the month of June 2018 when

CIRP started and workers felt that their jobs are unsafe.

As none of the employees of the Company was in receipt of remunera!on in excess of the limits prescribed, hence the

par!culars of employees under the Companies (Appointment and Remunera!on of Managerial Personnel) Rules, 2014,

are not given in the report.

(B) Conserva!on of energy, technology absorp!on and foreign exchange earnings and outgo

Par!culars with respect to conserva!on of energy, among others, as required under Sec!on 134(3) clause (m) of the

Companies Act, 2013 read with the Companies (Disclosure of Par!culars in the Report of Board of Directors) Rules, 1988

are set out in the Annexure forming part of this Report.

Board's Report


20

(C) Directors’ responsibility statement

As required under clause (c) of sub-sec�on (3) of Sec�on 134 of the Companies Act, 2013, your Directors confirm that:

1. In the prepara�on of the annual accounts, the applicable accoun�ng standards were followed and there are no

material departures;

2. The Directors selected such accoun�ng policies and applied them consistently and made judgments’ and

es�mates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company

at the end of the financial year and of the profit or loss of the Company for the period;

3. The Directors took proper and sufficient care to maintain adequate accoun�ng records in accordance with the

provisions of this Act for safeguarding the assets of the Company and for preven�ng and detec�ng fraud and other

irregulari�es.

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

5. The Directors had laid down internal financial controls to be followed by the company and that such internal financial

controls are adequate and were opera�ng effec�vely.

6. The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that

such systems were adequate and opera�ng effec�vely.

STATUTORY DISCLOSURES

None of the Directors are disqualified under the provisions of Sec�on164 (2) of the Companies Act, 2013. The Directors have

made the requisite disclosures, as required under the provisions of the Companies Act, 2013 and the Lis�ng Regula�ons.

Extract of the Annual Return :

The extract of the annual return in Form No. MGT - 9 shall form part of the Board’s report. The details forming part of the

extract of the Annual Return in form MGT-9 is annexed herewith as “ Annexure C”.

Corporate Social Responsibility (CSR)

The disclosures under Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is not required to be made

since clause (o) of sub-sec�on (3) of sec�on 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility)

Rules, 2014 is not applicable to the Company.

PARTICULARS OF EMPLOYEES

The informa�on required under Sec�on 197 of the Act read with Rule 5(1) of Companies (Appointment and Remunera�on of

Managerial Personnel) Rules, 2014 are given below-

(i) The ra�o of the remunera�on of each director/KMP to the median remunera�on of the employees of the company and

the percentage increase in remunera�on of each director for the financial year 2017- 18 are given below:

Sl.

No.

Name of KMP Remunera!on per month as on Percentage

increase in

remunera!on

Ra!o to

median

remunera!onAs on

31.03.2018

As on

31.03.2017

1. Dr. M.P. Agarwal 200000 200000 nil 21.25:1

2. Mr. Pawan Kumar Agarwal 125000 125000 nil 13.28:1

3 Mr. Devesh Narain Gupta 200000 200000 nil 21.25:1

4 Mrs. Sharda Agarwal 62500 62500 nil 6.64 :1

5 Prof. Dr. R. K Trivedi 0 0 nil -

6 Mr. Rakesh Kumar Srivastava 130000 130000 nil 13.81:1

(ii) Percentage increase in the median remunera�on of employees in the financial year: 8.30%

(iii) Number of permanent employees on the rolls of company as on 31.03.2018: 2370

(iv) Average percen�le increase already made in the salaries of employees other than the managerial personnel in the last

financial year and its comparison with the percen�le increase in the managerial remunera�on and jus�fica�on thereof

and point out if there are any excep�onal circumstances for increase in the managerial remunera�on:

Board's Report


21

Average percentage increase in the salaries of employees other than KMPs for Financial Year 2017-18 was 8.30 % as

compared to previous financial year. There has been no percen"le increase in the salaries of key managerial personnel

in comparison with the increase in the remunera"on of other employees for the same period.

(v) The key parameters for any variable component of remunera"on availed by the directors: None

(vi) Affirma"on that the remunera"on is as per the remunera"on policy of the Company:

The Company affirms that remunera"on is as per the remunera"on policy of the Company.

Informa�on as per Rule 5(2) of Companies (Appointment and Remunera�on of Managerial Personnel) Rules, 2014:

Statement showing the names of Top 10 Employees in terms of remunera�on drawn during the year:

S.

No.

Employee Name Designa�on Remunera�on

received (CTC)

per month

Educa�onal Qualifica�on

& Experience

Date of

commencement

of employment

Age Previous employment &

Designa�on

1 KSHIRAD KUMAR

DAS

Vice President

209553

Diploma In IIHT, 25 yrs. 19/07/2010 45 Nahar Industrial

Enterprises Ltd , Sr.

Manager (Dyeing)

2 R SURENTHER

KUMAR

Dy. General

Manager

150000 M.Tech-Tex"le Engg. -IIT

Delhi, Exp - 14 yrs.

01/05/2012 37 Vallabh Tex"le Cp Ltd, Dy.

Manager

3 SUBHASH CHAND

JAIN

VP (Finance) 150000 MSC (Phy.), 45 yrs 07/12/2010 68 Shamken Spinners Ltd,

Dy. GM

4 RAKESH SETHI Vice President 125000 M.SC, Ph. D (Chemistry)-

Exp.-11yrs.

30/01/2012 38 Trident Industries,R&D

Head,

5 B.R.GARG Director Technical 135000 B.Text, 51 Yrs 28/09/2007 75 Sutlej Industries Bhilad,

Sr.Vice President

6 RAJEEV ANAND General Manager 117116 B.Sc, 27 yrs. 11/04/2015 49 OSIL Home Furnishing

Products Panipat, General

Manager Produc"on

7 ASHOK KUMAR VIJ Sr. GM- Abhaypur-

Madeups

1,10,000 Diploma in Tex"le Tech.

Guntoor,30 yrs

9/12/2016 51 Hunug Toys Tex"le Limited,

8 RANA SANJEEV AGM- Abhaypur-

Processing

1,10,000 Diploma in Tex"le

Chemistry

14 years

17/07/2012 37 Welspun India Ltd.,

9

AJIT PRATAP SINGH Sr. GM- Abhaypur-

U"lity

105,000 Diploma in Mechanical

Engineering, MBA

in Maintenance

Management

Exp. 28 yrs

30/08/ 2012 48 A2Z Infrastructure Limited-

General Manager

Maintenance

10

SAJAL CHAUDHURY G.M.-Weaving,

malwan

105000 B.Sc. Technical Tex"le,

Exp. 34 yrs.

18/06/2015 58 Hanung Toys & Tex"les Ltd.

DGM-Weaving Preparatory

Notes:

• Nature of employment for above men"oned employees are permanent.

• None of the above men"oned employees are holding any percentage of equity shares in the company within the

meaning of clause (iii) of sub-rule (2) above; and

• None of the above men"oned employees is a rela"ve of any director or manager of the company.

Details of employees drawing a remunera"on of Rs. 1.02 crores or above per annum if employed throughout the financial

year or Rs. 8.50 Lacs per month if employed for any part of the year and posted in India:

NIL

Board's Report


22

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL)

ACT, 2013

Your Company respects and values diversity reflected in various backgrounds, experiences, and ideas and is commi�ed to

providing employees with a workplace that is free from discrimina�on or harassment. The Company has adopted a policy on

preven�on, prohibi�on and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment

of Women at Workplace (Preven�on, Prohibi�on and Redressal) Act, 2013. The Company has Internal Complaints Commi�ee

(ICC) established in accordance with the aforesaid Act for addressing sexual harassment incidents. No complaints on sexual

harassment were received by the Company during the financial year under review.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their apprecia�on of the support provided by the Company’s bankers, all the vendors

and �e-up en��es and the dedica�on and commitment of the employees at all levels. Your Directors convey their grateful

thanks to all the Government authori�es and shareholders for their con�nued and uns�nted assistance, co-opera�on and

patronage. Your Directors also whole heartedly thanks to Resolu�on Professional Mr. Rohit Shegal for his un�ring effort in

running units.

We also take this opportunity to thank all the valued customers who have appreciated our products and have patronized

them.

For and on behalf of the Board

Dr M P Agarwal Pawan Kumar Agarwal

Place : Kanpur (Chairman and Managing Director) (Joint Managing Director)

Date : 5th September, 2018 DIN: 00311806 DIN: 00311954

Board's Report


23

Annexure 'A' to Board's Report

FORM NO. MR-3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED ON 31ST MARCH, 2018

[Pursuant to sec!on 204(1) of the Companies Act, 2013 and Rule No. 9 of the

Companies (Appointment and Remunera!on Personnel) Rules, 2014]

To

The Members,

Shri Lakshmi Cotsyn Limited

19/X-1Krishnapuram,

Kanpur – 208007 (UP)

I have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good

corporate prac!ces by Shri Lakshmi Cotsyn Limited (hereina"er called the Company). Secretarial Audit was conducted in a

manner that provided me a reasonable basis for evalua!ng the corporate conducts/statutory compliances and expressing my

opinion thereon.

Based on my verifica!on of the Company’s books, papers, minute books, forms and returns filed and other records

maintained by the Company and also the informa!on provided by the Company, its officers, agents and authorized

representa!ves during the conduct of secretarial audit, I hereby report that in my opinion, the Company has, during the

audit period covering the financial year ended on 31st March, 2018 complied with the statutory provisions listed hereunder

and also that the Company has proper Board-processes and compliance- mechanism in place to the extent, in the manner

and subject to the repor!ng made hereina"er:

I have examined the books, papers, minute books, forms and returns filed and other records maintained by Company

for the financial year ended on 31st March, 2018 according to the provisions of:

1. The Companies Act, 2013 (the Act) and the rules made thereunder;

2. The Securi!es Contracts (Regula!on) Act, 1956 (‘SCRA’) and the rules made thereunder;

3. The Depositories Act, 1996 and the Regula!ons and Bye-laws framed thereunder;

4. Foreign Exchange Management Act, 1999 and the rules and regula!ons made thereunder to the extent of Foreign Direct

Investment, Overseas Direct Investment and External Commercial Borrowings;

5. The following Regula!ons and Guidelines prescribed under the Securi!es and Exchange Board of India Act, 1992 (‘SEBI

Act’) viz. :-

a) The Securi!es and Exchange Board of India (Substan!al Acquisi!on of Shares and Takeovers) Regula!ons, 2011;

b) The Securi!es and Exchange Board of India (Prohibi!on of Insider Trading) Regula!ons, 2015;

c) The Securi!es and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regula!ons, 2009;

d) The Securi!es and Exchange Board of India (Employee Stock Op!on Scheme and Employee Stock Purchase Scheme)

Guidelines, 1999 and the Securi!es and Exchange Board of India (Share Based Employee Benefits) Regula!ons,

2014 no!fied on 28th October, 2014;

e) The Securi!es and Exchange Board of India (Issue and Lis!ng of Debt Securi!es) Regula!ons, 2008;

f) The Securi!es and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regula!ons, 1993

regarding the Companies Act and dealing with client;

g) The Securi!es and Exchange Board of India (Delis!ng of Equity Shares) Regula!ons, 2009; and

h) The Securi!es and Exchange Board of India (Buyback of Securi!es) Regula!ons, 1998.

I have also examined compliance with the applicable clauses of the following:

1. Secretarial Standards issued by The Ins!tute of Company Secretaries of India;

2. The Lis!ng Agreements entered into by the Company with Na!onal Stock Exchange and Bombay Stock Exchange;

3. Securi!es and Exchange Board of India (Lis!ng Obliga!ons and Disclosure Requirements) Regula!ons, 2015.

During the period under review, the Company has complied with the provisions of the Act, Rules, Regula!ons, Guidelines,


24


Standards, etc. men�oned above except to the extent as men�oned below:

1. During the year under review, the Board of Directors of the Company is not duly cons�tuted with proper balance of

Execu�ve Directors, Non-Execu�ve Directors and Independent Directors;

2. During the year under review, the composi�on of Audit Commi�ee, Nomina�on & Remunera�on Commi�ee and

Stakeholders & Rela�onship Commi�ee is not in accordance with Act & Lis�ng regula�on;

3. During the year under review, the Company has not appointed Chief Financial Officer (CFO) in accordance to the Act &

Lis�ng Regula�on;

4. During the year under review, CEO and CFO Cer�ficate forming part of Corporate Governance Report was signed only

by Chairman and Managing Director of the Company;

5. During the year under review, the Company has not complied with the Regula�on 24(1) of SEBI (LODR) Regula�ons, 2015

in respect of appointment of Company’s Independent director in the board of Unlisted Material Subsidiary Company;

6. During the year under review, the Company has not clubbed the accounts of its two non-opera�onal subsidiaries of the

Company viz., M/s ShriLakshmi Power Limited and M/s Shri Lakshmi Nano Technologies Limited. However, as informed

by the management both the companies are not in opera�on since incorpora�on and are having nil turnover, therefore

consolidated Financial statement of M/s Shri Lakshmi Cotsyn Limited does not include the financial statement of both

the aforesaid companies..

7. During the year under review, SEBI has imposed a penalty of Rs. 2 Lacs to the Company and Rs. 1 lac to its other allo�ees

under promoter group under Sec�on 15-A(b) of Securi�es and Exchange Board of India Act, 1992, in the ma�er of

disclosures under Securi�es and Exchange Board of India (Substan�al Acquisi�on of Shares and Takeover) Regula�ons

and Securi�es and Exchange Board of India (Prohibi�on of Insider Trading) Regula�ons.

I further report that:

1. Adequate no�ce is given to all the Directors to schedule the Board Mee�ngs, agenda and detailed notes on agenda were

sent generally seven days in advance and a system exists for seeking and obtaining further informa�on and clarifica�ons

on the agenda items before the mee�ng and for meaningful par�cipa�on at the mee�ng;

2. All decisions at Board Mee�ngs and Commi�ee Mee�ngs are carried out unanimously as recorded in the minutes of the

mee�ngs of the Board of Directors or Commi�ee of the Board, as the case may be.

I further report that:

1. The trading in equity shares of the Company has been suspended w.e.f. September 10, 2015 by stock exchanges i.e., NSE

and BSE where the Company is listed, on account of certain clauses of lis�ng agreement including non-compliance of

erstwhile Clause 41 of Lis�ng Agreement for two consecu�ve quarters i.e., 31.12.2014 and 31.03.2015.

Further, the Company has also received No�ces regarding proposed Compulsory Delis�ng from NSE and BSE due to

non-compliance of various clauses of Lis�ng Regula�on. However the Company has filed a reply regarding revoca�on of

suspension of trading of shares with NSE & BSE.

2. The Company has not complied with the provisions of Regula�on 33(3)(d) and Regula�on 47(1)(b) of SEBI (LODR)

Regula�ons, 2015 in respect of submission and disclosure of audited financial results for the quarter/year ended on

31.03.2018 with stock exchanges within prescribed �me and as per the requirement of the said Regula�ons;

3. The Company has outstanding dues to financial ins�tu�ons, banks and others during the year and all the loan accounts

of the company are NPA as on date.

4. As informed by the Management, an Applica�on was filed under Sec�on 7 of Insolvency and Bankruptcy Code 2016

read with Rule 4 of the Insolvency and Bankruptcy (Applica�on to Adjudica�ng Authority) Rule 2016 before the Na�onal

Company Law Tribunal (NCLT) Allahabad Bench by the Union Bank of India vide C.P. (IB)No.142/ALD/2018 for ini�a�ng

Corporate Insolvency Resolu�on Process against the Company and the same was admi�ed on 30th May 2018 vide order

dated 30th May 2018 .

Since the Company is under NCLT and Corporate Insolvency Resolu�on Process (CIRP) has been ini�ated, the moratorium

under the provision of Sec�on 13 and 14 of the Code is declared which prohibits all legal ac�ons ini�ated by Lender

Banks against the Company for recovery of their dues to the tune of Rs. 5762 crores approx.

5. As per the informa�on provided by the Company, all the Winding-up pe��ons and Civil suits against the Company are


25


To

The Members


19/X-1, Krishnapuram, Kanpur - 208 007, U.P.

My report of even date is to be read along with this le!er.

1. Maintenance of secretarial record is the responsibility of the management of the Company. My responsibility is to

express an opinion on these secretarial records based on my audit.

2. I have followed the audit prac"ces and processes as were appropriate to obtain reasonable assurance about

the correctness of the contents of the Secretarial records. The verifica"on was done on test basis to ensure that

correct facts are reflected in secretarial records. I believe that the processes and prac"ces, I followed provide a

reasonable basis for my opinion.

3. I have not verified the correctness and appropriateness of Financial records and Books of Accounts of the Company.

4. Where ever required, I have obtained the Management representa"on about the compliance of laws, rules and

regula"ons and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regula"ons, standards is the

responsibility of management. My examina"on was limited to the verifica"on of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or

effec"veness with which the management has conducted the affairs of the Company.

Sd/-

Sanjiv Nigam

Date: 05.09.2018 [Prac�sing Company Secretary]

Place: New Delhi CP No. 8458

stayed at present as the Company is under Corporate Insolvency Resolu"on Process (CIRP) and undergoing with the

moratorium period of six months w.e.f. 30.05.2018. However, the promoters/guarantors of the company are contes"ng

the cases filed by the Banks at Debt recovery Tribunal (DRT), Delhi separately. Besides, the promoters/ guarantors are

also contes"ng the cases filed by the Central Bank of India under Sec"on 138 of Nego"able Instrument Act.

6. The certain undisputed amounts payable in respect of provident fund, employees state insurance, income tax and cess

were in arrears as at 31 March 2018 for a period of more than six months from the date they became payable, which are

as follows:-

Sl. No. Par!culars Amount

(In Lacs.)

1. Contribu"on to Employee Provident Fund 1303.90

2. Contribu"on to Employee State Insurance 87.55

Signature

Sanjiv Nigam

[Prac�sing Company Secretary]

CP No. 8458

Date: 05.09.2018

Place: New Delhi

{This report is to be read with my le!er of even date which is annexed as Annexure A and forms an integral part of this report.}


26

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND

FOREIGN EXCHANGE EARNINGS AND OUTGO

[Sec�on 134(3)(m) of The Companies Act, 2013 read with Rule 8(3) of The Companies (Accounts) Rules, 2014]

The details/ informa�on rela�ng to Conserva�on of Energy and Technology Absorp�on and Foreign exchange earnings and

outgo as required under Clause (m) of Sub- Sec�on (3) of Sec�on 134 of the Companies Act, 2013, are as follows:

(A) CONSERVATION OF ENERGY

(a) Energy conserva!on measures taken:

The Company is engaged in the con�nuous process of energy conserva�on through new and improved measures for

opera�on and maintenance to reduce wastage and make efficient use of energy. Some of the measures undertaken

in this direc�on on a con�nuous basis are:

• Synchroniza�on of steam turbine power and DG plants to facilitate shi"ing of part / full electrical load against

each other in case of any emergency thus avoiding power failure;

• Installa�on 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 ligh�ng arrangement on shop floor and roads within factory premises;

• Op�mum use of compressors during lean period of opera�ons.

• Monitoring of high energy consuming equipments closely for be$er control;

• Regular checking and monitoring of electrical load on all motors and repair of the defec�ve ones;

• Installa�on of power factor controllers/capacitors to conserve energy;

• Inspec�on and immediate rec�fica�on of air leakages in weaving, kni&ng and preparatory;

• Installa�on of centralized cooling tower for saving of energy of C.T. fans and CT pumps.

(b) Addi!onal investment and proposals being implemented for reduc!on of consump!on of energy: NIL

Impact of measures at (a) and (b) above for reduc!on of energy consump!on and consequent impact on the cost of

produc!on of goods

The above measures ini�ated / being ini�ated for energy conserva�on resulted in improving the energy efficiency at all

plants and savings in consump�on of power and the cost of produc�on. Your Company will con�nue to implement planned

measures for op�miza�on of energy conserva�on and efficiency.

(B) TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:

Efforts in brief, made towards Technology Absorp!on, Adapta!on and Innova!on:

The Company sets target for technology improvement in accordance with global compe��on. Company’s R&D strategy

is anchored on the development and speedy commercializa�on of globally compe��ve products, processes and

technologies through best-in-class research interven�ons backed by world-class infrastructure.

Further R&D efforts have been made in the area of Technical Tex�les where in house technology has been developed

for manufacturing of N.B.C (Nuclear/ Biological/ Chemical –Warfare) protec�ve suits on commercial scales. Further

ac�on is being taken to develop advance version of NBC suit mark V in associa�on with DRDO.

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

Annexure 'B' to Board's Report


27

(C) FOREIGN EXCHANGE EARNINGS AND OUTGO (` in Lacs)

Sl. No. Foreign exchange earnings and outgo 2017-18 2016-17

i) Total earnings of foreign exchange 4,080.59 3,954.49

ii) Total outgo in foreign exchange 72.53 287.71


Sd/- Sd/-

Dr. M. P. Agarwal Pawan Kumar Agarwal


Date : 5th September, 2018 DIN:00311806 DIN:00311954

Annexure 'B' to Board's Report


28

FORM NO. MGT-9

EXTRACT OF ANNUAL RETURN

as on the financial year ended on 31.03.2018

[Pursuant to sec�on 92(3) of the Companies Act, 2013 and rule 12(1)

of the Companies (Management and Administra�on ) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS

i) CIN L17122UP1988PLC009985

ii) Registra�on Date 31/08/1988

iii) Name of the company Shri Lakshmi Cotsyn Limited

iv) Category of the Company Company Limited by Shares

Sub-Category of the Company Indian Non Government Company

v) Address of the Registered office 19/X-1 Krishnapuram, Kanpur, U.P.208007

vi) Whether listed company Yes

vii) Name, Address and Contact details of

Registrar and Transfer

M/s Abhipra Capital Ltd.

GF-58-59; World trade Centre, Barakhamba Lane

New Delhi.- 110001

Ph.No. (011) 23414629, 23414503

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business ac!vi!es contribu!ng 10 % or more of the total turnover of the company shall be stated:-

Sl.

No.

Name and Descrip!on of main products/services NIC Code of the

Product/Service

% to total turnover of

the Company

1. Manufacture and Deal in all types of tex�les, yarn, clothes,

dress material, readymade garments, others tex�le items etc.

Division 13

Group code 131, 139

100%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Sl.

No.

Name and Address of the Company CIN/GLN Holding/

Subsidiary/

Associate

% of

shares

held

Applicable

Sec!on

1. Slcl Overseas (fzc) Foreign Company Subsidiary 100% 2(87)

2. Shri Lakshmi Defence Solu�ons Ltd. U52605UP2006PLC032649 Subsidiary 99.50% 2(87)

3. Synergy Global Home Inc. Foreign Company Subsidiary 100% 2(87)

* Note: The company has also other two subsidiary companies viz., M/s ShriLakshmi Power Limited and M/s Shri Lakshmi

Nano Technologies Limited under sec�on 2(87) of the Companies Act 2013 due. However both the company is not in

opera�on therefore accounts of both companies could not be consolidated with the accounts of Shri Lakshmi Cotsyn

Limited. Therefore consolidated Financial statement of the Company does not includes the financial statement of both

Companies.

Annexure 'C' to Board's Report


29

IV. SHAREHOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

(i) Category-wise Share Holding

Category of Shareholders No. of Shares held at the

beginning of the year

No. of Shares held at the

end of the year

% change

during the

yearDemat Physical Total % of total

Shares

Demat Physical Total % of total

shares

A. Promoters

1. Indian

Individual/HUF 1931072 0 1931072 6.78 1931072 0 1931072 6.78 -

Central/State government 0 0 0 0 0 0 0 0 -

Bodies Corp. 9249767 0 9249767 32.49 9249767 0 9249767 32.49 -

Banks/FI 0 0 0 0 0 0 0 0 -

Any Other 0 0 0 0 0 0 0 0 -

Sub-total (A)(1) 11180839 - 11180839 39.27 11180839 - 11180839 39.27 -

2. Foreign

NRIs-Individuals 0 0 0 0 0 0 0 0 0

Other Individuals 0 0 0 0 0 0 0 0 0

Bodies Corp. 0 0 0 0 0 0 0 0 0

Banks/FI 0 0 0 0 0 0 0 0 0

Any Other 0 0 0 0 0 0 0 0 0

Sub-total (A)(2) 0 0 0 0 0 0 0 0 0

Total share holding of Promoter

(A) = (A)(1)+(A)(2)

11180839 0 11180839 39.27 11180839 0 11180839 39.27 0

B. Public Shareholding

1. Ins!tu!ons

Mutual Funds 0 0 0 0 0 0 0 0 0

Banks/FI 150000 0 150000 0.53 150000 0 150000 0.53 0

Central Govt./State Govt. 10 0 10 0 10 0 10 0 0

Venture Capital Funds 0 0 0 0 0 0 0 0 0

Insurance Companies 0 0 0 0 0 0 0 0 0

FIIs 1742236 0 1742236 6.12 1742236 0 1742236 6.12 0

Foreign Venture Capital Funds 0 0 0 0 0 0 0 0 0

Others (specify) 0 0 0 0 0 0 0 0 0

Sub-total (B)(1) 1892246 0 1892246 6.65 1892246 0 1892246 6.65 0

2. Non-Ins!tu!ons

a) Bodies Corp. 6804709 21100 6825809 23.97 6099122 1000 6100122 21.43 2.54

b) Individuals

i) Individual shareholders holding

nominal share capital upto ` 2

Lakh

4519478 321016 4840494 17.00 4451053 186080 4637133 16.29 0.71



30

Category of Shareholders No. of Shares held at the


No. of Shares held at the

end of the year

% change

during the

yearDemat Physical Total % of total

Shares

Demat Physical Total % of total

shares

ii) Individual shareholders holding

nominal share capital in excess

of ` 2 Lakh

1252628 50000 1302628 4.58 1859906 50000 1909906 6.71 -2.13

Others (Foreign bodies corporate,

NRI, HUF, Clearing members)

858629 1570000 2428629 8.53 1180399 1570000 2750399 9.66 -1.13

Sub-total (B)(2) 13435444 1962116 15397560 54.08 13435444 1962116 15397560 54.08 0.00

Total Public Shareholding (B)=(B)

(1)+ (B)(2)

15327690 1962116 17289806 60.73 15327690 15327690 17289806 60.73 0.00

C. Shares held by Custodian for

GDRs & ADRs

0 0 0 0 0 0 0 0.00 0

Grand Total (A+B+C) 26508529 1962116 28470645 100.00 26508529 1962116 28470645 100.00 0

Note: The above men!oned equity shares held by promoters group also includes those shares which were pledged with Cent

bank Financial Services Ltd. and IFCI.

(ii) Shareholding of Promoters

Sl.

No.

Shareholder’s Name Shareholding at the


Shareholding at the

end of the year

% change in

shareholding

during the

yearNo. of

shares

% of total

shares of the

company

% of shares

pledged/

encumbered to

total shares

No. of

shares

% of total

shares

of the

company

% of Shares

pledged/

encumbered to

total shares

1 Dr. Mata Prasad Agarwal 350300 1.23 100% 350300 1.23 100% -

2 Sharda Agarwal 284500 1.00 100% 284500 1.00 100% -

3 Pawan Kr. Agarwal 230500 0.81 100% 230500 0.81 100% -

Total 865300 3.04 100% 865300 3.04 100% -

Note: All the above men!oned equity shares were pledged with Cent bank Financial Services Ltd. under the terms of CDR

agreement executed between the lender banks and the Company.

(iii) Shareholding Pa!ern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs) :

Sl.

No.

List of Top 10 shareholders Shareholding at the


For each of the Top 10 shareholders Share holding at

the end of the year

No of shares % of total shares

of the Company

No. of shares % of total shares

of the Company

1. Bridge India Fund 912236 3.20 Bridge India Fund 912236 3.20

2.Elara India Opportuni!es Fund

Limited

830000 2.92 Elara India Opportuni!es Fund

Limited

830000 2.92

3. Manjusha Glass Works Pvt. Ltd. 738500 2.59 Manjusha Glass Works Pvt. Ltd. 738500 2.59

4. Shri Ganpa! Muli!-Fab Pvt. Ltd. 713280 2.51 Shri Ganpa! Muli!-Fab Pvt. Ltd. 713280 2.51

5. Nav Nirman Mercan!les Ltd. 555709 1.95 Nav Nirman Mercan!les Ltd. 555709 1.95

6.Trade Vision Middle

East FZE (W)550000 1.93 Trade Vision Middle East Fze (W) 550000 1.93

7. HRV Interna!onal Pvt. Ltd. 542273 1.90 HRV Interna!onal Pvt. Ltd. 542273 1.90

8.Ampee Laboratories

(India) Limited.462313 1.62 Ampee Laboratories (India) Limited 462313 1.62

9. Ceras!um Propmart Pvt. Ltd. 450000 1.58 Ceras!um Propmart Pvt. Ltd. 450000 1.58

10. Boon General Trading Pte Ltd. 450000 1.58 Boon General Trading Pte Ltd. 450000 1.58



31

(iv) Shareholding of Directors and Key Managerial Personnel :

Sl.

No.

For Each of the Directors and KMP Shareholding at the


Cumula!ve Shareholding

during the year

No of shares % of total shares

of the company

No. of shares % of total shares

of the company

1 Dr. Mata Prasad Agarwal

At the beginning of the year 350300 1.23 350300 1.23

At the End of the year 350300 1.23 350300 1.23

2 Sharda Agarwal



3 Pawan Kumar Agarwal



4 Devesh Narain Gupta



V. INDEBTEDNESSES

Indebtedness of the Company including interest outstanding/accrued but not due for payment : (` in Crores)

Par!culars Secured Loans

excluding deposits

Unsecured

Loans

ECB/FCCB/NCD/

deposits/others

Total

Indebtedness

Indebtedness at the beginning of

the financial year

(i) Principal Amount 2,704.52 1.60 62.44 2,768.56

(ii) Interest due but not paid 532.83 - 21.79 554.62

(iii) Interest accrued but not due - - - -

Total (i+ii+iii) 3,237.35 1.60 84.23 3,323.18

Change to Indebtedness during

the financial year

• Addi!on - 0.46 - 0.46

• Reduc!on 29.20 - - 29.20

Net Change (29.20) 0.46 - (28.74)

Indebtedness at the end of the

financial year

(i) Principal Amount 2,704.52 2.06 62.44 2,769.02

(ii) Interest due but not paid 503.63 - 21.79 525.42

(iii) Interest accrued but not due - - - -

Total (i+ii+iii) 3,208.15 2.06 84.23 3,294.44



32

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remunera!on of Managing Director, Whole-!me Directors and Key Managerial Personnel : (` in Lacs)

Par!culars of Remunera!on (per annum) Name of MD/WTD Total

Amount

(actual

payment

in 2017-18

considered)

Key

Managerial

PersonnelMr. M. P.

Agarwal

(MD)

Mr. Pawan

Kurmar

Agarwal

Mr. Devesh

Narain

Gupta

Smt.

Shardha

Agarwal Company

Secretary

Rakesh Kumar

Srivastava

1. Gross Salary

(a) Salary as per provisions contained in Sec!on

17(1) of the Income Tax Act, 1961

24.00 15.00 24.00 7.50 70.50 15.60

(b) Value of perquisites u/s17(2) Income Tax

Act, 1961

– – – – – –

(c) Profits in lieu of salary under Sec!on 17(3)

Income Tax Act, 1961

– – – – – –

2. Stock op!on – – – – – –

3. Sweat Equity – – – – – –

4. Commission

- As % of profit – – – – – –

- Others, specify – – – – – –

5. Others, please specify – – – – – –

Total (A) 24.00 15.00 24.00 7.50 70.50 15.60

B. Remunera!on to other directors : (` in Lacs)

Sl.

No.

Par!culars of Remunera!on Name of Directors Total Amount

Prof. (Dr.) G. N. Mathur* Dr. R. K. Trivedi

1. Independent Directors

• Fee for a#ending board commi#ee mee!ngs Nil 35000.00 35000.00

• Commission Nil Nil Nil

• Others, please specify – – –

2. Other Non-Execu!ve Directors – – –

Total – 35000.00 35000.00

*Resigned w.e.f. 13.02.2018

VII. PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES

SEBI has imposed a penalty of Rs. 2 Lacs to the Company and Rs. 1 lac to its other allo#ees under promoter group under Sec!on

15-A(b) of Securi!es and Exchange Board of India Act, 1992, in the ma#er of disclosures under Securi!es and Exchange Board

of India (Substan!al Acquisi!on of Shares and Takeover) Regula!ons and Securi!es and Exchange Board of India (Prohibi!on

of Insider Trading) Regula!ons.

The Company has also received no!ces under ESIC and PF Authori!es regarding non-deposit of pending dues. The certain

undisputed amounts payable in respect of provident fund, employees state insurance, income tax and cess were in arrears as

at 31 March 2018 for a period of more than six months from the date they became payable, which are as follows:

1. Contribu!on to Employee Provident Fund ` 1303.90 Lacs

2. Contribu!on to Employee State Insurance ` 87.55 Lacs



33

Since the Company is under NCLT and Corporate Insolvency Resolu!on Process (CIRP) has been ini!ated, the moratorium

under the provision of Sec!on 13 and 14 of the code is declared which prohibits all legal ac!ons against the Company for

recovery of the dues.

However there were no other penal!es, punishment or compounding of offences during the year ended March 31, 2018

other than those men!oned above.


Sd/- Sd/-






34

(Annexure to and forming integral part of Board's Report of the Company)

COMPANY’S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE

The Company’s philosophy on Corporate Governance envisages a�ainment of the highest levels of transparency, accountability

and equity in all facets of its opera�ons and in all its interac�ons with its stakeholders including shareholders, employees,

lenders and the Government. Corporate governance helps to serve corporate purposes by providing a framework within

which stakeholders can pursue the objec�ves of the organisa�on most effec�vely.

BOARD OF DIRECTORS

During the year 2017-18, the Company could not achieve op�mum combina�on of Execu�ve and Non-Execu�ve Directors

as per the Corporate Governance requirements under Regula�on 17 of SEBI LODR Regula�ons, read with Sec�on 149(4)

of the Act. However, the Board of Directors of the Company consists of eminent persons with considerable professional

exper�se and experience in business and industry, finance, management etc. As on 31st March 2018, the Board comprised

of 5 Directors.

NUMBER OF BOARD MEETINGS HELD AND THE DATES THEREOF

During the year 2017-18, 4 mee�ngs of Board of Directors were held. The mee�ngs were held on 30th May 2017, 11th August

2017, 13th November 2017 and 13th February 2018. The maximum �me gap between any two mee�ngs was not more than

four calendar months. The maximum �me gap between any two mee�ngs was not more than four calendar months.

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

Name and designa!on of

the Director

Category

of Directorship

Number of

Board

mee!ngs

a"ended

A"endance

at the

last AGM

Number

Directorship* in

other companies

Commi"ee

posi!on held**

Chairman Member

Dr Mata Prasad Agarwal

(Chairman & Managing

Director)

Promoter

Execu�ve Director

4 Yes 5 NIL 3

Shri Pawan Agarwal

(Joint Managing Director)

Promoter

Execu�ve Director

4 Yes 4 NIL NIL

Shri Devesh Narain

Gupta (Deputy Managing

Director)

Execu�ve Director 4 Yes 3 NIL 3

Smt. Sharda Agarwal Promoter

Execu�ve Director

4 Yes 2 NIL NIL

Prof. Dr. Rakesh Kumar

Trivedi

Non-Execu�ve

Independent

Director

4 Yes - 3 NIL

Notes:

1. *Other Directorships of only Indian Public Limited Companies excluding Directorship in Foreign Companies, Private

Limited Companies, Companies under Sec�on 8 of the Act, were considered.

2. **Commi�ee posi�ons of only three commi�ees namely Audit Commi�ee, Remunera�on & Nomina�on Commi�ee,

Stakeholders Rela�onship & investors’ grievances Commi�ee have been men�oned.

BOARD PROCEDURE

The Board mee�ngs are generally scheduled well in advance and the no�ce of each Board Mee�ng is given in wri�ng to each

of the Directors. All the items on the Agenda are accompanied by notes giving comprehensive informa�on on the related

subjects. The Board is also free to recommend the inclusion of any ma�er for discussion in consulta�on with the Chairman.

The Board’s role, func�ons, responsibility and accountability are clearly defined. In addi�on to ma�ers statutorily requiring

Board’s approval, all major decisions involving policy formula�on, strategy and business plans, annual opera�ng and

Report on Corporate Governance


35


capital expenditure budgets, new investments, sale of business unit/ division, compliance with statutory/regulatory

requirements, major accoun!ng provisions and write offs are considered by the Board.

INFORMATION PLACED BEFORE THE BOARD

Informa!on placed before the Board of Directors broadly covers the items specified in terms of the Act and SEBI LODR

Regula!ons and such other items which are necessary to facilitate meaningful and focused delibera!on and issues concerning

the Company and taking decision in an informed and efficient manner. Besides, the Board of Directors has complete access

to all informa!on of the Company, as and when necessary.

COMMITTEES OF THE BOARD

Audit Commi!ee

The Audit Commi%ee is empowered, pursuant to its terms of reference, inter alia, to:

• Inves!gate any ac!vity within its terms of reference and to seek any informa!on it requires from any employee;

• Obtain legal or other independent professional advice and to secure the a%endance of outsiders with relevant experience

and exper!se, when considered necessary.

The role of the Audit Commi%ee includes the following:

(a) Overseeing the Company’s financial repor!ng process and the disclosure of its financial informa!on to ensure that the

financial statements are correct, sufficient and credible;

b) Recommending the appointment and removal of external auditors, fixa!on 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 accoun!ng policies and prac!ces

• The going concern assump!on

• Major accoun!ng entries based on exercise of judgement by management

• Compliance with Stock Exchange and legal requirements concerning financial statements

• Related party transac!ons

• 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 func!on, including the structure of the internal audit department,

staffing and seniority of the official heading the department, repor!ng structure, coverage and frequency of internal

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;

Composi"on

The Company has an Audit Commi%ee comprising of two Execu!ve Directors and one Non- Execu!ve Independent Director,

Mr. Devesh Narain Gupta and Dr. M.P. Agarwal being Execu!ve Director, Prof. Dr. Rakesh Kumar Trivedi being Non-Execu!ve-

Independent Director. The Audit Commi%ee is chaired by Prof. Dr. Rakesh Kumar Trivedi. The Company Secretary acts as the

Secretary to the Audit Commi%ee. M/s Tandon & Tandon, Statutory Auditors of the Company, was invited to be present at all

the Audit Commi%ee mee!ngs.

During the year four Audit Commi%ee Mee!ngs were held on 30th May 2017, 11th August 2017, 13th November 2017 and

13th February 2018.


36

Details of the a�endance at the mee�ngs are as follows :

Sl. No. Name A�ended

1 Mr. Devesh Narain Gupta 4

2 Dr Mata Prasad Agarwal 4

3 Prof. Dr. Rakesh Kumar Trivedi 4

Internal Auditors and Internal Audit System

The Company ra!fied the appointment of a firm of Chartered Accountants M/s Srivastava S & Co. of Kanpur as Internal

Auditors to review the internal control systems of the Company and report thereon. The report of Internal Auditors is

periodically reviewed by the Audit Commi#ee of the Board and necessary direc!ons are issued whenever required. The

Company con!nues to maintain a comprehensive Internal Audit System for assessing risk, adding values and improving your

organiza!on's opera!ons and also to ensure !mely financial repor!ng.

Cost Auditor

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

Commi#ee for considera!on.

Remunera�on & Nomina�on Commi�ee

The Remunera!on Commi#ee was cons!tuted by the Board to recommend/review the overall Remunera!on policy of the

Managing/Whole !me Directors and senior management and to recommend to the Board appointment/ re-appointment/

revision in their terms and condi!ons of appointment. The recommenda!ons of the Remunera!on Commi#ee are considered

and approved by the Board subject to shareholders’ approval.

The Remunera!on Commi#ee comprising three Directors, Mr. Devesh Narain Gupta and Dr. M.P. Agarwal being Execu!ve

Director, Prof. Dr. Rakesh Kumar Trivedi being Non-Execu!ve-Independent Director. The Commi#ee is chaired by Prof. Dr.

Rakesh Kumar Trivedi. During 2017-18, the mee!ng of the Remunera!on Commi#ee was held on 11th August 2017.

Details of remunera�on paid to all the Directors for the year ended on 31st March, 2018:

a) Execu�ve Directors (Managing/Whole�me Directors)

Details of remunera!on paid for the year ended 31st March, 2018 to Managing/Whole !me Directors are as follows :

Name Designa�on All elements of

remunera�on

package i.e. salary,

perks, benefits,

bonuses and

pension, among

others (` in lacs/

p.a.) (2017-18)

Performance

linked

incen�ves

along with the

performance

criteria (in `)

All elements of

remunera�on package

i.e. salary, perks,

benefits, bonuses

and pension, among

others (` in lacs/ p.a.)

(2016-17)

Stock, op�on with

details, if any, and

whether issued at

discount as well

as the period over

which accrued

and over which

exercisable

Dr M. P. Agarwal Managing

Director

24.00 NIL 24.00

Presently the

Company does

not have any stock

op!on scheme

Mr Pawan Kumar

Agarwal

Jt. Managing

Director

15.00 NIL 15.00

Mr Devesh Narain

Gupta

Dy. Managing

Director

24.00 NIL 24.00

Smt. Sharda

Agarwal

Execu!ve

Director

7.50 NIL 7.50



37

b) Non-Execu�ve Directors

During 2017-18, the Company did not pay any remunera!on to Non-Execu!ve. The criterion for payment of si"ng fees to

Non-Execu!ve Directors is based on the provisions of the Companies Act, 2013 and is well within the statutory ceiling fixed

in this regard.

Finance Commi!ee

The Commi$ee comprises three Execu!ve Directors chaired by Dr. M P Agarwal. The Finance Commi$ee met 8 !mes during

the year. The Commi$ee is primarily looking a%er the day-to-day business ac!vity of the Company within Board approved

direc!ons/framework. Details of the a$endance at the mee!ng are as follows:

Sl. No. Name A!ended

1 Dr M P Agarwal 8

2 Shri Pawan Kumar Agarwal 8

3 Shri Devesh Narain Gupta 8

Stakeholders Rela�onship & Shareholders/Investor’s Grievance Commi!ee

As on 31st March 2018, the Shareholders /Investors’ Grievance Commi$ee has been cons!tuted by the Board for a speedy

disposal of grievances/complaints rela!ng to shareholders/investors.

The Shareholders’/ Investors’ Grievance Commi$ee comprises three Directors, Mr. Devesh Narain Gupta and Dr. M.P.

Agarwal being Execu!ve Director, Prof. Dr. Rakesh Kumar Trivedi being Non-Execu!ve-Independent Director. The Commi$ee

is chaired by Dr. Rakesh Kumar Trivedi. The Company Secretary acts as the Secretary of the Commi$ee. During the year four

Shareholders’/ Investors’ Grievance Commi$ee Mee!ngs were held 30th May 2017, 11th August 2017, 13th November 2017

and 13th February 2018.

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 provisions of applicable act and SEBI Laws.

Investor Grievance Redressal

The Commi$ee, inter alia, approves issue of duplicate share cer!ficates and oversees and reviews all ma$ers connected

with transfer/transmission of shares, dematerializa!on/ rematerialisa!on of shares, consolida!on of share cer!ficates etc.

Commi$ee also looks into redressal of shareholders’/investors’ complaints related to non-receipt of Annual Reports, non-

receipt of declared dividend etc. In addi!on, the Commi$ee advices on ma$ers which can facilitate be$er investor services

and rela!ons.

GREEN INITIATIVE FOR PAPER LESS COMMUNICATIONS

The Ministry of Corporate Affairs (MCA) vide its circulars bearing no.17/2011 dated 21.04.2011 and 18/2011 dated 29.04.2011,

has taken a “ Green Ini!a!ve in Corporate Governance” by allowing paperless compliances by companies through electronic

mode . Companies can now send documents and various no!ces (including no!ce calling Annual General Mee!ng, Audited

Financial Statements, Directors’ Report, and Auditor’s Report etc) to the shareholders through electronic mode to the

registered e-mail addresses of shareholders.

RISK MANAGEMENT

The Company manages risks as an integral part of its decision making process. The Company has adequate system of

internal control commensurate with its size and business opera!on at all units to safeguard and protect its assets against

losses. The Board of Directors and the Audit Commi$ee con!nuously have a close eye on the risks by adop!ng the following

procedure:

• Iden!fica!on of risks

• Assessment of risk

• Risk control and mi!ga!on



38

WHISTLE BLOWER POLICY

Pursuant to Sec�on 177(9) of the Companies Act, 2013 and Regula�on 22 of Securi�es and Exchange Board of India (Lis�ng

Obliga�ons and Disclosure Requirements) Regula�ons, the Company has formulated Whistle Blower Policy to maintain ethical

code of conduct and behavior in eleva�ng on the framework for repor�ng unethical / improper conduct and endeavors to

take suitable steps on inves�ga�ng, reviewing and repor�ng the same. Every Stakeholder i.e. Director, employee, customers,

vendor etc. of the Company are free to disclose in wri�ng, the viola�on of rules, regula�ons and laws or unethical conduct to

their immediate supervisor/no�fied person. However, the Company did not deny access to any personnel to approach

the management or the Audit Commi�ee on any issue.

GENERAL BODY MEETINGS

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

Year ended Date Time Day Place Number of special

resolu!ons passed

March 31, 2015 September 30,

2015

11:30 a.m. Wednesday 19/X-1, Krishnapuram,

G.T. Road, Kanpur

4


2016

11:30 a.m. Friday 19/X-1, Krishnapuram,

G.T. Road, Kanpur

5


2017

11:30 a.m. Tuesday 19/X-1, Krishnapuram,

G.T. Road, Kanpur

0

EXTRA-ORDINARY GENERAL MEETINGS

During the year 2017-18, no Extra-Ordinary General Mee�ng of the Company was held.

POSTAL BALLOT

No special resolu�on requiring a postal ballot was proposed last year. At the ensuing Annual General Mee�ng there is no

resolu�on proposed to be passed by way of Postal ballot.

DISCLOSURES

a. There were no materially significant related party transac�ons i.e., transac�ons of the Company of material nature,

with its promoters, the Directors or the management and their subsidiaries or rela�ves, among others, that may have

poten�al conflict with the interests of the Company at large. The related party transac�ons are duly disclosed in the

Notes to the Annual Accounts of the Company.

b. The Company has complied with all the provisions of Regula�on 33 of SEBI (Lis�ng Obliga�ons and Disclosure

Requirements) Regula�ons, (Erstwhile Clause 41 of the Lis�ng Agreement) except the compliance of proper cons�tu�on

of the Board and Commi�ees .

MEANS OF COMMUNICATION

As per Regula�on 46 of SEBI(Lis�ng Obliga�ons and Disclosure Requirements) Regula�ons, the Company displays at its website

www.shrilakshmi.in containing basic informa�on about the Company, such as details of its business, corporate presenta�on,

financial results, shareholding pa�ern, compliance with corporate governance, contact informa�on of the designated official

who is responsible for assis�ng and handling investor grievances. The financial and other informa�on filed by the Company

from �me to �me is also available on the website of the Stock Exchanges i.e NSE and BSE. NSE and BSE have introduced their

respec�ve electronic pla#orms namely NSE Electronic Applica�on Processing System ("NEAPS") and BSE Lis�ng Centre Online

Portal for submission of various filings by listed companies. The Company ensures that the requisite compliances are filed

through these systems.

The quarterly, half-yearly and annual results are submi�ed to the listed stock exchanges and are published in leading

newspapers viz.

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



39

SHARE HOLDING PATTERN FOR THE QUARTER ENDED MARCH 31, 2018:

Category Number of shares held Percentage of shareholding

(A) Promoters’ holding

-India promoters 11180839 39.27

-Foreign promoters - -

Sub-Total (A) 11180839 39.27

(B) Non-promoters’ holding

(1) Ins!tu!onal investors

Mutual Funds - -

Financial Ins!tu!ons/Banks 150000 0.53

Central Govt./State Govt. 10 0

Venture Capital Funds - -

Insurance companies - -

Foreign Ins!tu!onal investors 1742236 6.12

Foreign Venture Capital investors - -

Foreign/ Financial Ins!tu!ons/Banks - -

Sub-total (B)(1) 1892246 6.65

(2) Others

-Domes!c companies 6100122 21.43

-Individuals 6547039 23.00

-HUF 672126 2.36

-NRI’s 131463 0.46

- Clearing members 0 0

- Trust 0 0

- Foreign Corporate bodies 1946810 6.84

Sub-total (B) (2) 15397560 54.08

Total Public Shareholding (B)= (B)(1)+(B)(2) 17289806 60.73

Grand total (A)+(B) 28470645 100.00

Distribu!on of share holding as on 31st March 2018:

ShareholdingNo. of shareholders No. of shares

Number % to Total Number % to Total

Upto - 5000 6608 77.52 10307000 3.62

5001 - 10000 804 9.43 6617040 2.32

10001 - 20000 444 5.21 6840490 2.40

20001 - 30000 179 2.10 4549520 1.60

30001 - 40000 77 0.90 2803180 0.99

40001 - 50000 75 0.88 3566690 1.25

50001 - 100000 144 1.69 10721530 3.77

100001 and above 193 2.27 239301000 84.05

Total 8524 100.000 284706450 100.000

Stock market price data for the year 2017-18 at BSE/ NSE :

Since the equity shares of the Company are suspended for trading, the respec!ve stock exchanges have not shown the stock

prices at their websites.



40

GENERAL SHARE HOLDER INFORMATION

30th Annual General Mee!ng (for

the year ended March 31st, 2018)

Day : Saturday

Date : 29th September 2018

Time : 11:30 am

Venue : 19/X-1, Krishnapuram, G.T. Road, Kanpur

Accoun!ng calendar years For the year 2017-18, the interim and final results were announced on:

a. 1st quarter results - Second week of August 2017

b. 2nd quarter results - Second week of November 2017

c. 3rd quarter results - Second week of February 2018

d. 4th quarter & Annual results –First week of June 2018

Date of book closure Sunday, 23rd September 2018 to Saturday, 29th September 2018 (both days

inclusive).

Lis!ng on stock exchange a) Na"onal Stock Exchange of India Ltd.

b) Bombay Stock Exchange Ltd.

Registrar and Transfer Agents M/s Abhipra Capital Ltd.

GF-58-59 World Trade Centre, Barakhamba Lane, New Delhi-110033

Ph. no.:+91 11-42390909, Fax:+91 11-27215530

Email: [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.: +91 512-2402339

E-mail: [email protected]

Website: www.shrilakshmi.in

Share transfer system Applica"ons for transfer of shares in physical form are received by the Company’s

Registrar and Transfer Agent, Abhipra Capital Ltd., who in consulta"on and approval

of the Company executes the requests of transfer/transmission of shares.

Nomina!on facility Shareholders holding shares in physical and desirous of making a nomina"on in

respect of their share holding in the Company as permi#ed U/S 72 of Companies

Act, 2013 may submit their request to the Company in form, 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 declara"on to this effect, signed by Dr M P Agarwal, Chairman cum Managing

Director, is enclosed at the end of this Report.

Dematerializa!on of shares and

liquidity

ISIN Code - Equity shares: INE 851 B01016

As on March 31, 2018, 93.65 % of total equity shares of the Company were

dematerialized. Trading in equity shares is permi#ed only in dematerialized form,

as per the no"fica"on issued by the Securi"es and Exchange Board of India (SEBI).

DECLARATION

Pursuant to the provisions of SEBI (Lis"ng Obliga"ons and Disclosure Requirements) Regula"ons, I Dr. M.P. Agarwal, Chairman

and Managing Director of Shri Lakshmi Cotsyn Ltd, declare that all Board members and Senior Execu"ves of the Company

have affirmed their compliance with the Code of Conduct for the year 2017 -18.

Dr. M. P. Agarwal

Date : 05.09.2018 Chairman and Managing Director

Place : Kanpur DIN:00311806



41


CERTIFICATE REGARDING COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE

To

The Members

M/s Shri Lakshmi Cotsyn Limited

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

We have examined the compliance of condi! ons of Corporate Governance by M/s Shri Lakshmi Cotsyn Limited for the year

ended on 31st March, 2018 as s! pulated in SEBI (Lis! ng Obliga! ons and Disclosure Requirement) Regula! ons 2015 of the

Company with the Stock Exchange(s).

The compliance of condi! ons of Corporate Governance is the responsibility of the management. Our examina! on was

limited to procedures and implementa! on thereof, adopted by the Company for ensuring the compliance of the condi! ons

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 informa! on and according to the explana! ons given to us, we cer! fy that the Company

has complied in material respects with the condi! ons of Corporate Governance as s! pulated in the above men! oned

Lis! ng Regula! ons. However, during the fi nancial year 2017-18, in the absence of requisite number of Independent

Directors on the Board of the Company, the composi! on of the Board of Directors and Commi# ees thereof is not as per

the requirement of the provisions of Lis! ng Regula! ons.

We further state that such Compliance is neither an assurance as to the future viability of the Company nor the effi ciency

or eff ec! veness with which the management has conducted the aff airs of the Company.

For TANDON &TANDON


Firm Registra! on No. 002070C

Prabhat Tandon

Date: 05.09.2018 Partner

Place: Kanpur Membership No. 071254


42


CEO/CFO CERTIFICATION

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

(a) I have reviewed fi nancial statements and the cash fl ow statement for the year ending March 31st, 2018 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 aff airs and are in compliance with exis� ng

Accoun� ng Standards, applicable Laws and Regula� ons.

(b) There are, to the best of my knowledge and belief, no transac� ons entered into by Shri Lakshmi Cotsyn Limited during

the year which are fraudulent, illegal or viola� ve of the Company’s code of conduct.

(c) I am responsible for establishing and maintaining internal controls for fi nancial repor� ng in Shri Lakshmi Cotsyn Limited

and we have evaluated the eff ec� veness of the internal control systems of the company pertaining to fi nancial report-

ing. I have disclosed to the Auditors and the Audit Commi� ee, defi ciencies in the design or opera� on of such internal

controls, if any, of which I am aware and the steps taken or propose to be taken to rec� fy these defi ciencies.

(d) I have indicated to the Auditors and the Audit Commi� ee

(i) Signifi cant changes in internal control over fi nancial repor� ng during the year;

(ii) Signifi cant changes in Accoun� ng Policies during the year and the same have been disclosed in the notes to the

fi nancial statements; and

(e) I cer� fy that there have been no instances of signifi cant fraud of which I have become aware and the involvement

therein, of management or any employee having signifi cant role in the Company’s internal control systems.

(f) I affi rm that I have not denied any personnel, access to the Audit Commi� ee of the company (in respect of ma� ers in-

volving alleged misconduct).

Place: Kanpur Dr. M. P. Agarwal

Dated: 13.08.2018 Chairman & Managing Director


43

Statement regarding Subsidiary Companies

FORM AOC-1Statement containing salient features of the Financial Statements of Subsidiaries Companies as on 31.03.2018

(` in Lacs)

Name of the Subsidiary Companies Shri Lakshmi Defence

Solu!ons Limited

SLCL Overseas, FZC, U.A.E. Synergy Global Home

Inc. N.Y., U.S.A.

Repor!ng period for the subsidiary concerned 31.03.2018 31.03.2018 31.03.2018

Repor!ng Currency & Exchange rate as on

the last date of the relevant financial year in

the case of foreign subsidiaries

AED 1 = INR

17.7187

USD 1 = INR

65.0441

Share Capital 1000.00 20.00 1.69

Reserves & Surplus (7.48) 12212.28 (416.58)

Total Assets 3662.83 12271.70 652.81

Total Liabili!es 3662.83 12271.70 652.81

Investments (except investment in Subsidiary)

Turnover - - -

Profit before Taxa!on (82.19) - -

Provision for Taxa!on 3.91 - -

Profit a#er Taxa!on (78.28) - -

Proposed Dividend Nil Nil Nil

Percentage of shareholding 99.50% 100% 100%

(A) FOREIGN EXCHANGE EARNINGS AND OUTGO:

Sl.

No.

Foreign exchange earnings and outgo 2017-18 2016-17

i) Total earnings of foreign exchange 4080.59 3954.49

ii) Total outgo in foreign exchange 72.53 287.71


Sd/- Sd/-





44

Consolidated Independent Auditors Report

To

The Members of


REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

1. We have audited the accompanying consolidated Ind AS financial statements of Shri Lakshmi Cotsyn Limited (“the

Holding Company”) and its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”),

which comprise Consolidated Balance Sheet as at 31st March, 2018, the Consolidated Statement of Profit and Loss, the

Consolidated Cash Flow Statement for the year then ended, and a summary of the significant accoun"ng policies and

other explanatory informa"on (hereina#er referred to as “the consolidated financial statements”).

MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

2. The Holding Company’s Board of Directors is responsible for prepara"on of these consolidated Ind AS financial statements

in terms of the requirements of the Companies Act, 2013 (“the Act”) with respect to the prepara"on of these

Consolidatedfinancial statements that give a true and fair view of the consolidated financial posi"on, consolidated

financial performance,consolidated cash flows and changes in equity of the Group in accordance with the accoun"ng

principles generally accepted in India, including the Indian Accoun"ng Standards specified under Sec"on 133of the

Act.The Holding Company’s Board of Directors is also responsible for ensuring accuracy of records including financial

informa"on considered necessary for the prepara"on of Consolidated Financial Statements.The respec"ve Board of

Directors of the companies included in the Group are responsible for maintenance of adequate accoun"ng records in

accordance with the provisions of the Act for safeguarding the assets of the Group and for preven"ng and detec"ng

frauds and other irregulari"es; the selec"on and applica"on of appropriate accoun"ng policies; making judgments and

es"mates that are reasonable and prudent; and the design, implementa"on and maintenance of adequate internal

financial controls, that were opera"ng effec"vely for ensuring the accuracy and completeness of the accoun"ng records,

relevant to the prepara"on and presenta"on of the financial statements that give a true and fair view and are free from

material misstatement, whether due to fraud or error, which have been used for the purpose of prepara"on of the

consolidated financial statements by the Directors of the Holding Company, as aforesaid.

AUDITOR’S RESPONSIBILITY

3. Our responsibility is to express an opinion on these ConsolidatedInd-AS financial statements based on our audit.

4. We have taken into account the provisions of the Act and the rules made thereunder, the accoun"ng and audi"ng

standards and ma&ers which are required to be included in the audit report under the provisions of the Act and the

Rules made thereunder.

5. We conducted our auditof the consolidated financial statements in accordance with the Standards on Audi"ng specified

under Sec"on 143(10) of the Act and other applicable authorita"ve pronouncements issued by the Ins"tute of Chartered

Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan

and perform the audit too btain reasonable assurance about whether the consolidated financial statements are free from

material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the

Consolidated financial statements. Theprocedures selected depend on theauditor’s judgment, includingtheassessment

o#herisks of material misstatement of the consolidated financial statements, whether due tofraud orerror. In making

those risk assessments, the auditor considers internal financial control relevant to the holding Company’s prepara"on

of the Consolidated financial statements that give atrueand fair view, in order to design audit procedures that are

appropriate in the circumstances. An audit also includes evalua"ng the appropriateness of the accoun"ng policies used

and the reasonableness of the accoun"ng es"mates made by the Holding Company’s Directors, as well as evalua"ng the

overall presenta"on of the Consolidated financial statements.

7. Webelieve tha&heaudit evidenceobtainedby us and the audit evidence obtained by the other auditors In terms of their

repost referred to in sub-paragraph 9 of the Other Ma&ers paragraph below is sufficient and appropriate to provide a

basis for our audit opinionon the consolidated financial statements.

OPINION

8. In our opinion and to the best of our informa"on and according to the explana"ons given to us, the aforesaid Consolidated

financial statementsgive the informa"on required by the Act in the manner so required and give a true and fair view in

conformity with the accoun"ng principles generally accepted in India, of the state of affairs of the Group as at 31st

March, 2018, and its loss (including other comprehensive income), its cash flow and changes in equity for the year ended

on that date.


45

Consolidated Independent Auditors Report

OTHER MATTERS

9. We did not audit the financial statements/financial informa"on of SLCL Overseas (FZC), and Synergy Global Home Inc.,

U.S.A. subsidiary, whose financial statements reflect total assets of ` 129.25 Cr. as at 31st March, 2018 total revenues of

` NIL and profit of ` NIL for the year ended on that date, as considered in the consolidated financial statements.

These financial statements/financial informa"on have been audited by other auditors whosereports have been furnished

to us by the Management and our opinionon the consolidated financialstatements, in so far as it relates to the amounts

and disclosures included in respect of thesesubsidiariesand our report in terms of sub-sec"ons (3) and(11) of Sec"on 143

of the Act, insofar as it relates to the aforesaid subsidiariesis based solely on the reports of the other auditors.

Our opinionon the consolidated financial statements, and our reporton Other Legal and RegulatoryRequirements below,

is not modified in respect of the above ma$erswith respect to our reliance on thework done and the reports of the other

auditors.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

10. As required by Sec"on 143 (3) of the Act, we report that:

a) We have sought and obtained all the informa"on and explana"ons which to the best of our knowledge and belief

were necessary for the purposes of our audit.

b) In our opinion, proper books of account as required by law have been kept by the holding Company and its subsidiaries

included in the group incorporated in India so far as it appears from our examina"on of those books

c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss (including other comprehensive

income) the consolidated statement of cash flow and the statement of changes in equity dealt with by this Report

are in agreement with the books of account.

d) In our opinion, the aforesaid Consolidated financial statements comply with the Indian Accoun"ng Standards

specified under Sec"on 133 of the Act.

e) On the basis of the wri$en representa"ons received from the directors of the Holding Company as on 31st March,

2017 taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditors of

its subsidiary companies incorporated in India, none of the directors of the Group companies incorporated in India is

disqualified as on 31st March, 2018 from being appointed as a director in terms of Sec"on 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial repor"ng of the Holding Company, its

subsidiary companies incorporated in India and the opera"ng effec"veness of such controls, refer to our separate

Report in Annexure A.

g) With respect to the other ma$ers to be included in the Auditor’s Report in accordance with Rule 11 of the Companies

(Audit and Auditors) Rules, 2014, in our opinion and to the best of our informa"on and according to the explana"ons

given to us:

i. The Group has disclosed the impact of pending li"ga"ons on its financial posi"on in its Consolidated financial

statements – Refer Note 25 in ‘Other Notes’.

ii. The Group did not have any long-term contracts including deriva"ve contracts for which there were any material

foreseeable losses.

iii. There were amounts which were required to be transferred to the investor educa"on and protec"on fund by the

holding company and its subsidiaries incorporated in India and there has been no delay in transferring the same.

iv. The Group has provided requisite disclosure in its financial statements as to holdings as well as dealing in Specified

Bank Notes during the period from November 8, 2016 to December 30, 2016 and these are in accordance with

the books of accounts maintained by the Group. Refer to Note No. 28 under Notes to Accounts.

For TANDON & TANDON


Firm Registra"on No. 002070C

Prabhat Tandon

Place : Kanpur Partner

Date : 06.06.2018 Membership No. 071254


46

Consolidated Annexure A to Independent Auditors Report

Referred to in paragraph 10(f) of the Independent Auditors’ Report of even date to the members of Shri Lakshmi Cotsyn

Limited on the consolidated financial statements for the year ended March, 31 2018.

REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB�SECTION 3 OF SECTION 143 OF THE

ACT.

1. We have audited the internal financial controls over financial repor!ng of Shri Lakshmi Cotsyn Limited (“the Company”)

as of March, 31 2018 in conjunc!on with our audit of the consolidated financial statements of the company for the year

ended on that date.

MANAGEMENT’S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

2. The Company’s management is responsible for establishing and maintaining internal financial controls based on the

internal control over financial repor!ng criteria established by the Company considering the essen!al components of

internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Repor!ng issued by

the Ins!tute of Chartered Accountants of India (ICAI). These responsibili!es include the design, implementa!on and

maintenance of adequate internal financial controls that were opera!ng effec!vely for ensuring the orderly and efficient

conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the presenta!on and

detec!on of frauds and errors, the accuracy and completeness of the accoun!ng records, and the !mely prepara!on of

reliable financial informa!on, as required under the Act.

AUDITORS’ RESPONSIBILITY

3. Our responsibility is to express an opinion on the Company’s internal financial controls over financial repor!ng based

on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls

Over Financial Repor!ng (the “Guidance Note”) and the Standards in Audi!ng deemed to be prescribed under sec!on

143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal

financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with

ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal

financial controls over financial repor!ng was established and maintained and if such controls operated effec!vely in all

material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls

over financial repor!ng included opera!ng effec!veness. Our audit of the internal financial controls over financial

repor!ng included obtaining an understanding of internal financial controls over financial repor!ng, assessing the risk

that a material weakness exists, and tes!ng and evalua!ng the design and opera!ng effec!veness of internal control

based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the

risks of material misstatement of the financial statements, whether due to fraud or error.

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

on the Company’s internal financial controls system over financial repor!ng.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

6. A company’s internal financial control over financial repor!ng is a process designed to provide reasonable assurance

regarding the reliability of financial repor!ng and the prepara!on of financial statements for external purposes

in accordance with generally accepted accoun!ng principles. A company’s internal financial control over financial

repor!ng includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable

detail, accurately and fairly reflect the transac!ons and disposi!ons of the assets of the company; (2) provide reasonable

assurance that transac!ons are recorded as necessary to permit prepara!on of financial statements in accordance with

generally accepted accoun!ng principles, and that receipts and expenditures of the company are being made only in

accordance with authoriza!ons of management and directors of the company and(3) provide reasonable assurance

regarding preven!on or !mely detec!on of unauthorized acquisi!on,use, or disposi!on of the company’s assets that

could have a material effect on the financial statements.


47

Consolidated Annexure A to Independent Auditors Report

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

7. Because of the inherent limita!ons of internal financial controls over financial repor!ng, including the possibility of

collusion or improper management override of controls, material misstatements due to error or fraud may occur and

not be detected. Also, projec!ons of any evalua!on of the internal financial controls over financial repor!ng to future

periods are subject to the risk that the internal financial control over financial repor!ng may become inadequate because

of changes in condi!ons, or that the degree of compliance with the policies or procedures may deteriorate.

OPINION

8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial

repor!ng and such internal financial controls over financial repor!ng were opera!ng effec!vely as at March 31 2018,

based on the internal control over financial repor!ng criteria established by the Company considering the essen!al

components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial

Repor!ng issued by the Ins!tute of Chartered Accountants of India.

For TANDON & TANDON


Firm Registra!on No. 002070C

Prabhat Tandon




48

Consolidated Balance Sheet as at 31st March, 2018

NoteAs at

31st March, 2018

As at

31st March, 2017

A. EQUITY AND LIABILITIES

1. Shareholders' Funds

(a) Share capital 1 2,847.06 2,847.06

(b) Reserves and surplus 2 (175,064.82) (164,612.16)

(c) Minority Interest 3 4.96 5.35

2. Share applica!on money pending allotment 6,843.04 6,843.04

3. Non-Current Liabili!es

(a) Long-term borrowings 4 238,844.73 240,661.48

(b) Deferred tax liabili!es (net) 105.19 109.10

(c) Other long-term liabili!es - -

(d) Long-term provisions 5 1,123.53 999.04

4. Current Liabili!es

(a) Short-term borrowings 6 92,694.87 93,753.13

(b) Trade payables 7 5,998.40 5,865.97

(c) Other current liabili!es 8 2,937.48 2,482.38

(d) Short-term provisions 9 10.00 26.28

Total 176,344.44 188,980.67

B. ASSETS

1. Non-Current Assets

(a) Fixed assets

(i) Tangible assets 10 137,777.64 149,511.17

(ii) Intangible assets 11 33.95 33.95

(iii) Capital work-in-progress - -

(iv) Intangible assets under development - -

(v) Fixed assets held for sale - -

(b) Non-current investments 12 7,530.87 7,530.87

(c) Deferred tax assets (net) - -

(d) Long-term loans and advances 13 1,878.01 2,714.94

2. Current Assets

(a) Inventories 14 3,215.03 5,134.76

(b) Trade receivables 15 13,342.75 11,316.71

(c) Cash and cash equivalents 16 171.59 254.90

(c) Short term loans and advances 17 19.59 14.43

(d) Other current assets 18 12,375.01 12,468.94

176,344.44 188,980.67

(` in Lacs)

See accompanying notes forming part of the financial statements

In terms of our report a#ached

For TANDON AND TANDON For and on behalf of the Board of Directors


FRN No. 002070C

Prabhat Tandon Dr. M. P. Agarwal Pawan Kumar Agarwal

Partner Chairman & Managing Director Jt. Managing Director

Membership No. : 071254

Place : Kanpur Vivek Saxena Rakesh Kumar Srivastava

Date : 06.06.2018 Head Accounts Company Secretary cum Finance Controller


49

Consolidated Statement of Profit & Loss Account for the year ended 31st March, 2018

Note For the year ended

31st March, 2018

For the year ended

31st March, 2017

A CONTINUING OPERATIONS

1 Revenue from opera!ons 19 19,282.73 31,158.71

19,282.73 31,158.71

2 Other income 20 301.26 434.40

3 Total revenue (1+2) 19,583.99 31,593.11

4 EXPENSES

(a) Cost of materials consumed Purchases of stock-in-trade 21 9,417.00 20,037.28

(b) Changes in inventories of finished goods, work-in-process and

stock-in-trade

22 906.03 1,474.68

(b) Employee benefits expense 23 4,743.46 5,155.95

(c) Finance cost 24 213.83 268.22

(d) Deprecia!on and amor!sa!on expense 25 8,815.85 8,951.20

(e) Other expenses 26 6,726.33 7,410.15

Total expenses 30,822.50 43,297.48

5 Profit / (Loss) before excep"onal and extraordinary items and tax (3 – 4) (11,238.51) (11,704.37)

6 Excep!onal items 27 (571.83) (14,937.31)

7 Profit / (Loss) before extraordinary items and tax (5 + 6) (11,810.35) (26,641.68)

8 Prior Period Item (1.10) -

9 Profit / (Loss) before tax (7 + 8) (11,811.45) (26,641.68)

10 Tax expense:

(a) Current tax expense for current year (3.91) -

(b) Deferred tax - -

(3.91) -

11 Profit / (Loss) from con"nuing opera"ons (9 + 10) (11,807.54) (26,641.68)

B Profit / (Loss) from discon"nuing opera"ons

12.i Profit / (Loss) from discon!nuing opera!ons (before tax) - -

12.ii Gain / (Loss) on disposal of assets / se#lement of liabili!es a#ributable

to the discon!nuing opera!ons

- -

12.iii Add / (Less): Tax expense of discon!nuing opera!ons - -

(a) on ordinary ac!vi!es a#ributable to the discon!nuing

opera!ons

- -

(b) on gain / (loss) on disposal of assets / se#lement of

liabili!es

- -

13 Profit / (Loss) from discon"nuing opera"ons (12.i + 12.ii + 12.iii) - -

14 Profit / (Loss) for the year (11 + 13) (11,807.54) (26,641.68)

15 Earnings Per Equity Share (of ` 10/- Each) (41.47) (93.58)





FRN No. 002070C






(` in Lacs)


50

1 SHARE CAPITAL

As at

31st March, 2018

As at

31st March, 2017

Authorised

5,00,00,000 Equity Shares of ` 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 ` 10/- each fully paid-up 2,847.06 2,847.06

Total 2,847.06 2,847.06

Reconcilia!on of the number of Equity Shares outstanding:

Equity shares outstanding at the beginning of the year 28,470,645 28,470,645

Equity shares allo!ed during the year - -

Equity shares outstanding at the end the of the year 28,470,645 28,470,645

2 RESERVES AND SURPLUS

(i) Securi!es premium account

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

Add :Addi#ons during the year - -

Less :Deduc#on during the year - -

Closing Balance 21,209.19 21,209.19

(ii) Capital Reserves Account

Balance as per last financial statement 581.97 581.97

Add :Addi#ons during the year - -

Closing Balance 581.97 581.97

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

Balance as per last financial statement (187,797.20) (161,155.53)

Add: Profit for the year **{26641.67+(.01)} (11,807.54) (26,641.67)

(199,604.74) (187,797.20)

(iv) Foreign Currency Transatc!on Reserve

Foreign Currency Transac#on Reserve 2,748.76 1,393.88

2,748.76 1,393.88

Total Reserve and Surplus (i to iv) (175,064.82) (164,612.16)

Notes forming part of the consolidated financial statementsfor the year ended 31st March, 2018

(` in Lacs)


51

(` in Lacs)

3 MINORITY INTEREST

As at

31st March, 2018

As at

31st March, 2017

Share held by outsider (` 1000 Lacs - ` 995 Lacs) 5.00 5.00

Add : 0.5% Reserve & Suplus

** ` 70.80 * 0.50% = 0.35 Lacs

*** ` (78.28) * 0.50% = (0.39) Lacs (0.04) 0.35

Total 4.96 5.35

4 LONG!TERM BORROWINGS

Secured Loans from Banks :

Secured loans from Banks 217,575.48 219,438.43

Mezannine Debt 12,480.83 12,480.83

ECB/FCCB/NCD 8,423.22 8,423.22

Unsecured :

Unsecured Loan 365.20 319.00

Total 238,844.73 240,661.48

5 LONG TERM PROVISIONS

Provisions for Employee Benei!s 1,123.53 999.04

Total 1,123.53 999.04

6 SHORT TERM BORROWINGS

Working Capital Loan 70,211.85 70,667.58

Short Term Loan 22,482.52 23,085.55

Bank Balance with Credit Balance 0.50 -

Total 92,694.87 93,753.13

7 TRADE PAYABLE

Trade Creditors 4,451.59 4,057.23

Capex Creditors 1,442.16 1,667.00

Advance from Custmoers 104.65 141.74

Total 5,998.40 5,865.97



52

8 OTHER CURRENT LIABILITIES

As at

31st March, 2018

As at

31st March, 2017

Unpaid Dividend 14.10 14.10

Employee Benefit Payable & others 1,031.09 901.63

Security Deposit Receipts 1.06 0.25

Other Current Liabili�es 17.97 131.83

Interest accrued and due on borrowing 123.10 123.10

Statutory Liabili�es 1,750.16 1,311.47

Total 2,937.48 2,482.38

9 SHORT TERM PROVISIONS

Provision for Expenses 10.00 26.28

Total 10.00 26.28


(` in Lacs)

10 FIXED ASSETS

Descrip!on (A) TANGIBLE ASSETS: (B) INTANGIBLE ASSETS: Total

Land Buildings Plant and

Machinery

Furniture

and fi#ngs

Office

equipment

Vehicles Total (A) Brand Total (B)

Gross Block As at 1-04-2016 2,176.04 26,690.03 187,149.83 554.66 695.57 788.32 218,054.45 - - 218,054.45

Addi�onal /

Adjustments

(11.75) (113.31) 125.91 0.12 3.44 6.71 11.12 - 11.12

As at 01-04-2017 2,164.29 26,576.72 187,275.74 554.78 699.01 795.03 218,065.57 - - 218,065.57

Addi�onal /

Adjustments

(38.71) (302.69) (5,579.23) (27.46) (68.24) (163.87) (6,180.20) - - (6,180.20)

As at 31-03-2018 2,125.58 26,274.03 181,696.51 527.32 630.77 631.16 211,885.37 - - 211,885.37

Accumulated

Deprecia�on

As at 1-04-2016 - 5,398.97 52,501.67 311.00 643.72 747.84 59,603.20 - - 59,603.20

for the Year - 887.26 8,022.81 70.47 26.55 8.45 9,015.54 - 9,015.54

Adjustments - (64.34) - - - - (64.34) - - (64.34)

As at 01-04-2017 - 6,221.89 60,524.48 381.47 670.27 756.29 68,554.40 - - 68,554.40

for the Year - 873.86 7,846.94 66.83 25.91 2.31 8,815.85 - 8,815.85

Adjustments - (35.72) (2,965.65) (21.95) (75.33) (163.87) (3,262.52) - - (3,262.52)

As at 31-03-2018 - 7,060.03 65,405.77 426.35 620.85 594.73 74,107.73 - - 74,107.73

Net Block As at 01-04-2016 2,176.04 21,291.06 134,648.16 243.66 51.85 40.48 158,451.25 - - 158,451.25

As at 01-04-2017 2,164.29 20,354.83 126,751.26 173.31 28.74 38.74 149,511.17 - - 149,511.17

As at 31-03-2018 2,125.58 19,214.00 116,290.74 100.97 9.92 36.43 137,777.64 - - 137,777.64


53

11 INTANGIBLE ASSETS /GOODWILL

As at

31st March, 2018

As at

31st March, 2017

Share Capital of Synergy 1.69 1.69

Less : Reserve & Surplus of Synergy 42.79 42.79

Opening Balance 42.79 (100% holding) - -

41.10 41.10

Less : Investment 7.15 7.15

Total 33.95 33.95

12 NON!CURRENT INVESTMENT

Un-Quoted Shares 7,530.87 7,530.87

Total 7,530.87 7,530.87

13 LOANS AND ADVANCES

Advances to suppliers 465.65 841.32

Security Deposits 342.98 793.25

Others loan and Advances 1,064.13 1,062.77

Prepaid Expenses 5.25 17.60

Total 1,878.01 2,714.94

14 INVENTORIES

(As cer!fied by the Management)

Closing Stock 3,215.03 5,134.76

3,215.03 5,134.76

Basis of valua"on of inventories are as under:

All the inventories are valued at lower of cost or net realisable value except

waste which is being valued at net realisable value.

Total 3,215.03 5,134.76


(` in Lacs)


54


(` in Lacs)

15 TRADE RECEIVABLES

As at

31st March, 2018

As at

31st March, 2017

(Unsecured, Considered Good unless otherwise stated)

(a) Outstanding for more than six months 7,849.27 7,888.98

(b) Considered Good 1,717.15 2,123.06

Total 9,566.42 9,560.02

Less: Provision for doub!ul Debts - -

9,566.42 9,560.02

(ii) Other debts

(a) Considered Good 3,776.33 1,756.69

13,342.75 11,316.71

16 CASH AND BANK BALANCES

(a) Cash and cash equivalents:

Cash Balance on Hand 6.00 15.50

Balance with Banks in:

Current Accounts 151.49 225.30

(b) Earmarked balances with banks:

Unpaid Dividend Account 14.10 14.10

Total 171.59 254.90

17 SHORT TERM LOANS AND ADVANCES

Salary Advances 19.59 14.43

Total 19.59 14.43

18 OTHER CURRENT ASSETS

Accrued Duty Draw back 16.24 289.28

Tuf's Subsidy Receivable 11,771.64 11,771.64

Accrued Interest 58.22 61.53

Advances to Others 52.80 2.06

T.D.S. Receivable 211.75 335.04

GST Receivable 264.36 -

Cenvet Credit - 9.39

Total 12,375.01 12,468.94


55

19 REVENUE FROM OPERATIONS

As at

31st March, 2018

As at

31st March, 2017

i. Sale of Manufactured goods :

Sui!ng & Shir!ng 224.76 826.43

Fusible Interlining - 26.31

Denim 1,008.10 4,747.39

Terry Towel 3,678.38 7,894.47

Home Furnishing 2,423.07 4,215.61

Bo"om Weight 253.34 322.15

Technical Tex!les 493.53 1,774.96

Jobwork 10,784.22 9,991.45

Retail Outlet / Misc. Sales 338.61 1,042.33

Revenue from Opera!ons 19,204.01 30,841.10

Sales includes Export Sales of ` 4144.44 lakhs

(Previous year ` 4007.74 lakhs).

ii. Other Opera!ng Revenues :

Export Benefits 78.72 317.61

78.72 317.61

Revenue From Opera!ons (Gross)

Less : Excise Duty - -

19,282.73 31,158.71

20 OTHER INCOME

Miscellaneous Income 87.92 158.13

Rent Received 10.50 -

Machinery Usage Charges 10.17 -

Discount Received 83.66 -

Profit on Sale of Fixed Assets 77.81 261.12

Foregin Currency Fluctua!on Gain 31.20 15.15

Total 301.26 434.40

21 COST OF MATERIALS CONSUMED

Raw Material Consumed 8,394.45 18,317.48

Packing Materials 874.31 1,454.95

Others 148.24 264.85

Total 9,417.00 20,037.28


(` in Lacs)


56

22 CHANGES IN INVENTORIES OF FINISHED GOODS, WORK!IN!PROCESS AND TRADED GOODS

As at

31st March, 2018

As at

31st March, 2017

Work-in-Process as at 31st March,2018 595.25 1,144.46

Work-in-Process as at 31st March, 2017 562.67 1,752.83

1,157.92 608.37

Add : Excise Duty on uncleared Finished Goods - -

Finished Goods as at 31st March, 2018 1,144.47 1,885.80

Finished Goods as at 31st March, 2017 919.48 2,752.11

2,063.95 866.31

Net (increase) / decrease Inventories 906.03 1,474.68

23 EMPLOYEE BENEFIT EXPENSES

Salaries, wages and bonus 4,382.14 4,660.37

Contribu!on to Provident & other Funds 336.86 456.57

Employee welfare expenses 24.46 39.01

Total 4,743.46 5,155.95

24 FINANCE COSTS

Interest Expenses 189.08 206.36

Bank Charges 24.75 61.86

Total 213.83 268.22

25 DEPRECIATION AND AMORTIZATION EXPENSE

Deprecia!on of tangible assets 8,815.85 8,951.20

Total 8,815.85 8,951.20


(` in Lacs)


57

26 OTHER EXPENSES

As at

31st March, 2018

As at

31st March, 2017

Manufacturing Expenses

Repair & Maintenance 258.38 420.17

Stores & Spares 749.03 750.96

Power & Fuel 4,842.31 5,057.27

Other Manufacturing Expenses 139.53 210.86

Administra!ve & Other Expenses

Rent, Rate & Taxes 29.71 22.44

Insurance 41.93 46.06

Prin!ng & Sta!onery 0.35 19.25

Postage & Telegram 4.29 73.83

Mee!ng Expenses 10.00 0.13

Cost & Concurrent Audit fee & Expenses 17.59 4.37

Auditors Remunera!on 72.66 20.33

Professional Charges 5.56 93.87

Legal Expenses 7.81 22.95

Adver!sement 73.17 23.03

Selling & Distribu!on Expenses

Travelling & Conveyance 180.62 178.34

Selling & Distribu!on Exp. 185.01 299.61

Freight Outward 108.38 166.68

Total 6,726.33 7,410.15


(` in Lacs)


58

27 EXCEPTIONAL ITEMS

As at

31st March, 2018

As at

31st March, 2017

Trade Receiables - 452.02

Less : Trade Payable 1,067.70 1,063.90

Exchange Loss (1,067.70) (611.88)

Net Exchange Loss (1,067.70) (611.88)

Add:

Bad Debts (243.58) 15,132.23

Discount 52.25 416.96

Loss on Sale of Investment 1,830.86 -

Total 571.83 14,937.31


(` in Lacs)

In terms of our report a!ached



FRN No. 002070C







59

Consolidated Cash Flow Statementfor the year ended 31st March, 2018

(` in Lacs)

As at

31st March, 2017

As at

31st March, 2016

CASH FLOW FROM OPERATION ACTIVITIES

Net Profit before tax and extra ordinary items (11,238.51) (27,255.24)

- Deprecia"on 8,815.85 8,951.20

(2,422.66) (18,304.04)

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES

Adjusted For

- Trade and Other receivable 546.13 16,227.11

- Inventories 1,920.48 2,000.31

- Loans & Advances & Other Current Assests 931.81 (227.87)

- Trade Payables & Provisions 728.34 1,488.26

1,704.10 1,183.77

Cash Generated from opera!ons 1,704.10 1,183.77

Net cash from opera!ng ac!vi!es ( A) 1,704.10 1,183.77

CASH FLOW FROM INVESTMENT ACTIVITIES

- Fixed assets acquired 1,087.60 (11.12)

- Sale of Investment - -

- Net Cash used in Investment ac!vi!es (B ) 1,087.60 (11.12)

CASH FLOW FROM FINANCE ACTIVITIES

- Proceeds from issue of FCCB - -

- Proceeds from long Term borrowings (1,816.75) (1,181.15)

- Proceeds from long Short Term borrowings (1,058.26) (53.99)

- Net Cash used in financing ac!vi!es (C ) (2,875.01) (1,235.14)

Net increase in cash and cash equivalents (83.31) (62.49)

Cash and Cash equivalents as at 1st April 2017 254.90 317.39

Cash and Cash equivalents as at 31st March 2018 171.59 254.90




FRN No. 002070C







60


A. CORPORATE INFORMATION

Shri Lakshmi Cotsyn Limited (“The Company”) is a public limited company, domiciled in India and incorporated under the

provisions of the Companies Act, 1956. The equity shares of the Company are listed (trading currently under suspension)

on the Bombay Stock Exchange (BSE) and Na�onal Stock Exchange (NSE). It is primarily engaged in the business of tex�le

manufacturing and has fully integrated capacity.

B. SIGNIFICANT ACCOUNTING POLICIES AND OTHER NOTES

1. Basis of Prepara!on of Financial Statements

The financial statements of the Company have been prepared in accordance with the Companies (Indian Accoun�ng

Standards) Rules, 2015 prescribed under Sec�on 133 of the Companies Act, 2013, and other recognised accoun�ng

prac�ces and policies to the extent applicable.

2. Use of Es!mates

The prepara�on of financial statements in conformity with the generally accepted accoun�ng principles require

es�mates and assump�ons to be made that affect the reported amounts of assets and liabili�es and disclosure

rela�ng to con�ngent liabili�es on the date of the financial statements and the reported amounts of revenues and

expenses during the repor�ng period. Differences between the actual results and es�mates are recognised in the

period in which the results are known/materialise.

3. Revenue Recogni!on

Revenue from sale of goods is recognised when all significant contractual obliga�ons have been sa�sfied, significant

risks and rewards of ownership are transferred to the customers and no effec�ve ownership is retained by the

Company. Revenue from sale of goods is recognised net of taxes, and net of rebates and normal discounts.

Expor#urnover excludes related export benefits.

4. Fixed Assets :

i) Tangible Assets:

Fixed Assets are stated at cost of acquisi�on or construc�on less accumulated deprecia�on and impairment

losses. Costs of acquisi�on comprise all costs incurred to bring the assets to their loca�on and working

condi�on up to the date the assets are ready for use. Costs of construc�on are composed of those costs that

relate directly to specific assets and those that are a#ributable to the construc�on ac�vity in general and can

be allocated to specific assets up to the date the assets are ready for use.

ii) Intangible Assets:

Intangible assets are recognised only if it is probable that the future economic benefits that are a#ributable to

the assets will flow to the enterprise and the cost of the assets can be measured reliably. Intangible assets are

stated at cost less accumulated amor�sa�on and impairment losses.

5. Investments:

Investments classified as Long Term Investments are stated at cost. Provision is made to recognise a decline, other

than temporary, in the value of investments. Current investments are carried at cost or fair value, whichever is

lower.

6. Deprecia!on / Amor!sa!on:

Deprecia�on is provided based on useful life of assets as prescribed in Schedule II to the Companies Act, 2013.

Deprecia�on on Fixed Assets is provided on Straight Line Value (SLM).


61


7. Inventories:

Items of Inventories are valued on the basis given below:

i. Raw Materials, Packing Materials, Stores and Spares:

Cost for raw materials and components, stores and spare parts, loose tools is determined on FIFO basis. Cost

of materials is arrived at a!er adjustment of, where applicable, GST/Cenvat benefit availed or to be availed.

ii. Process stock and finished goods:

Process stock and finished goods are valued at lower of cost and net realizable value. Cost of finished goods,

work in process and factory made components include costs of conversion and other costs incurred in bringing

the inventories to their present loca#on and condi#on. Finished goods lying in the factory premises are valued

exclusive of GST.

8. Employees Benefits:

Short-term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit

and loss of the year in which the related services are rendered. Post-employment and other long-term benefits

are recognized as an expense in the statement of profit and loss of the year in which the employee has rendered

services.

9. Government Grants:

Grants, in the nature of interest subsidy under the Technology Upgrada#on Fund Scheme (TUFs), have been

accounted for as per claims filed by the banks to MOT in the previous years. The disbursement of the same is

pending and is s#ll awaited.

10. Foreign exchange transac"on:

The transac#ons in foreign currency are accounted at the exchange rate prevailing on the date of such transac#ons.

Current monetary assets and liabili#es are translated at the exchange rate prevailing at the repor#ng date. Non-

monetary items are carried at cost.

11. Provisions, con"ngent liabili"es and con"ngent assets:

a. Con#ngent liabili#es are disclosed in respect of possible obliga#ons that arise from past events but their

existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events.

A provision is made when it is probable that an ou$low of resources embodying economic benefits will be

required to se%le an obliga#on and in respect of which a reliable es#mate can be made. Provision is not

discounted and is determined based on best es#mate required to se%le the obliga#on at the year-end date.

b. Con#ngent Assets are not recognized or disclosed in the financial statements.

12. Earnings Per Share:

Basic earnings per share is computed and disclosed using the weighted average number of equity shares outstanding

during the year. Dilu#ve earnings per share is computed and disclosed using the weighted average number of equity

and dilu#ve equity equivalent shares outstanding during the year, except when the results would be an#-dilu#ve.

13. Segment Repor"ng:

The Company is engaged in manufacturing of tex#les which is considered as the only business segment.


62


14. Principles of Consolida�on

The Consolidated Financial Statements relate to Shri Lakshmi Cotsyn Ltd. (the Company) and its subsidiary

companies viz. SLCL Overseas (FZC), Shri Lakshmi Defence Solu�ons Ltd. and Synergy Global Home Inc., U.S.A. The

Consolidated Financial Statements have been prepared on the following basis:

i) 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, liabili�es, income and expenses a�er fully

elimina�ng intra group & Intra group transac�ons resul�ng in unrealized profit & losses

ii) The Financial Statements of the subsidiaries used in the consolida�on are drawn upto the same repor�ng date

as that of the company i.e., 31st March 2018.

iii) The difference between the cost of investment in the subsidiaries, and the Company’s share of net assets at

the �me of acquisi�on of shares in the subsidiaries is recognized in the financial statements as Goodwill or

Capital reserves as the case may be.

iv) Minority Interest in the net assets of consolidated subsidiaries is iden�fied and presented in the consolidated

Balance Sheet separately from liabili�es and equity of the company’s shareholders.

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

• The amount of equity a�ributable 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 rela�onship came into

existence.

v) Minority’s share of net profit for the year of consolidated subsidiaries is iden�fied and adjusted against the

Profit a�er Tax of the Group.

OTHER NOTES:

15. Personal Accounts Balance:

Balances of certain debtors, creditors and advances are subject to confirma�on/reconcilia�on, if any.Certain

debtors have been raising counter claims due to supply of cloth which were not as per quality specifica�on of buyer

or there was delay in supplying the material and could not be sold due to expiry of season. Certain claims have been

se�led by allowing discounts to such debtors.The amount of claims to be paid/se�led are accounted for at the �me

of se�lement only as the terms and final amount of se�lement/claim is not reasonably ascertainable.

16. Job work vis-a-vis Sales Value Equaliza�on:

The company is in stringent working capital crisis situa�on and hence the company is currently unable to source

raw material for its own produc�on. Accordingly, during the year, company has earned a por�on of its revenue from

jobwork. Job work has been done for world renowned suppliers of denims, shee�ng & terry towel who are inclined

to increase their jobwork in the company in view of imported machinery, state of art infrastructure and superior

quality product. Job work has enabled the company to reduce its cash losses & increase it capacity u�liza�on.


63


17. Inventory:

The breakup of inventory is as follows:- (` in Lacs)

Par!culars As at

31st March, 2018

As at

31st March, 2017

Raw Materials 598.11 1,526.15

Work-in-Process 595.25 1,144.47

Finished Goods 1389.82 1746.64

Stores Spare & Others 631.85 718.25

Total 3,215.03 5135.51

All the inventories are valued at lower of cost or net realisable value except waste which is being valued at net

realisable value.

18. Interest Cost

The bank accounts of the company had become NPA. Certain bankers are charging interest on the balance amount

of loan outstanding while some others are not, as per the policy adopted by each bank. Accordingly, interest has

been booked during the financial year on payment basis.

19. Debtors, Bad Debts & Provision for Bad & doub"ul debts

Debtors outstanding for more than 1 year have been wri"en off and amount charged to extraordinary item. Certain

debts earlier wri"en off as bad have been recovered to the extent of Rs. 10.16 Cr; debtors to the extent of ` 7.73

Cr have been provided for as bad debts . The management is s$ll pursuing the recovery of the same through legal

recourse, but the chances of recovery are very less and hence have been wri"en off.

20. Status at NCLT

Corporate Insolvency Resolu$on Process (CIRP) under the Indian Bankruptcy Code, 2016 (IBC has been ini$ated

by the order of Na$onal Company Law Tribunal, Allahabad Bench on 30th May 2018 a%er admission of CP of

Union Bank of India and appointed Mr. Rohit Sehgal of M/s AAA Insolvency Professionals LLP as Interim resolu$on

professional (IRP) for Corporate Insolvency Resolu$on Process.

Mr. Rohit Sehgal has visited the company’s office & facili$es and has taken over the charge of the business in

capacity of IRP. He will now access the poten$al of the business, assets, need & quantum of working capital and

then $e up with strategic investors to complete the resolu$on process.

21. Accumulated Losses

The company has accumulated loss of ` 1750.64Crs. as at the balance sheet date. Out of the above, loss of

` 106.44Crs. pertains to the losses of the year ended March 2018.

22. Sale of noncore assets

During the year Lenders have sold company’s Aung unit at Godhrauli at Rs. 10.04 Crore and adjusted the proceeds

against debt. Further Garment unit at Roorkee and Spinning unit at Fatehpur have been declared at Non-core have

also been put up for auc$on. However a%er ini$a$on of CIRP, the IRP will take care of the further proceedings.

23. Capacity U!liza!on Statement

The capacity u$liza$on have gone down during the year in respect of all the products due to poor market condi$on

and on account of running of opera$ons on jobwork.

Shri Lakshmi Cotsyn LimitedAnnual Report 2017-18Shri Lakshmi Cotsyn LimitedAnnual Report 2017-18

64


Qty & Value in Lacs

Sr.

No.

Par!culars Unit Installed U!liza!on *

(Year ended Mar 2017)

U!liza!on *


Qty. Percentage Qty. Percentage

I Sui�ng & Shir�ng Mtrs. 300 31.69 25.35% 42.91 14.30%

II Fusible Interlining Fabric Mtrs. 250 40.57 38.95% 104.04 41.62%

III Denim** Mtrs. 300 46.00 15.33% 72.07 24.02%

IV Shee�ng Mtrs. 260 77.26 29.72% 142.25 54.71%

V Bo�om Weight Mtrs. 60 9.95 16.58% 21.68 36.13%

VI Yarn Dyed Shir�ng Mtrs. 60 - NA - NA

VII Terry Towel Kgs. 120 38.79 32.33% 40.48 33.73%

VIII Technical Tex!les

Flex Fabric ** Sq. Mtrs. 900 17.14 1.90% 40.71 4.52%

Black Out Fabric Mtrs. 200 - NA - NA

NBC Fabric ## Mtrs. 100 0.62 0.62% 0.15 0.15%

IRR / MSCN Fabric Sq. Mtrs. 50 - NA - NA

Foam Board/PVC Sheet Kgs. 36 - 0.00% 0.29 0.80%

Other Technical Tex�les Fabric Mtrs. 96 - NA - NA

IX Quilt Fabric Mtrs. 4 - NA - NA

X Garments # Nos. 66 - NA - NA

XI Quilts / Comforters # Nos. 3 - NA - NA

* Sui�ng Shir�ng & Fusible Interlining Unit situated at Aung, Fatehpur was under ownership of company for 5

months only. It was then sold through auc�on by Bankers. Capacity u�liza�on has accordingly been considered for

5 months only.

# Garment Unit Situated at Roorkee & Quilt & Comforters Unit at Noida has not been opera�onal during the

financial year

24. Related Party Transac!ons:

• Name of Related Par�es & Descrip�on of Rela�onship

(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) Rela�ves 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)


65


(C) Companies & Concerns controlled by Key Managerial Personnel/Rela!ves:

i) Shri Lakshmi Defence Solu!ons Limited

ii) SLCL Overseas (FZC) at Sharjah, UAE

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

• Details of Transac!on

Nature Associate Companies Key Management Personnel & their rela!ves

Remunera!on Paid - 75,33,110/-*

* Paid in FY 2017-18- Dr. M.P. Agarwal (` 20,62,000), Mr. Pawan Kumar Agarwal (` 14,18,000), Mrs. Sharda

Agarwal (` 6,32,500), Mr. Devesh Gupta (` 21,99,610) Mr. Alok Agarwal (` 12,21,000)

# Actual Payments considered

25. Con!ngent Liabili!es:

Con!ngent liabili!es 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 ` NIL

(ii) Claim against the Company not acknowledged as Debt ` NIL

(iii) Le%er of Credit outstanding ` NIL

The company has an export obliga!on to the tune of ` 2007.50 Cr. on account of import of capital goods under

EPCG scheme. The company is se%ling the export obliga!on on year to year basis and further expects to se%le the

same on going concern basis. However, if the obliga!on is not fulfilled, the company will have to pay the amount of

duty saved under EPCG on imports alongwith interest & penalty as per the statue.

In terms of our report a%ached



FRN No. 002070C







66

Standalone Financial Statements


67

To the Members of


REPORT ON THE STANDALONE FINANCIAL STATEMENTS

1. We have audited the accompanying standalone financial statements of Shri Lakshmi Cotsyn Limited (“the Company”),

which comprise the Balance Sheet as at 31st March, 2018, the Statement of Profit and Loss (including other comprehensive

income) for the year and statement of cash flow statement and statement of changes in equity for the year ended 31st

March, 2018, and a summary of the significant accoun#ng policies and other explanatory informa#on.

MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

2. The Company’s Board of Directors is responsible for the ma$ers stated in Sec#on 134(5) of the Companies Act, 2013

(“the Act”) with respect to the prepara#on of these standalone financial statements that give a true and fair view of

the financial posi#on, financial performance (including other comprehensive income), cash flows and changes in equity

of the Company in accordance with the accoun#ng principles generally accepted in India, including the Indian Accoun#ng

Standards specified under Sec#on 133 of the Act. This responsibility also includes maintenance of adequate accoun#ng

records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preven#ng

and detec#ng frauds and other irregulari#es; selec#on and applica#on of appropriate accoun#ng policies; making

judgments and es#mates that a rereasonable and prudent; and design, implementa#on and maintenance of adequate

internal financialcontrols, that were opera#ng effec#vely forensuring the accuracy and completeness of the accoun#ng

records, relevant to the prepara#on and presenta#on of the standalone Ind AS financial statements that give a true and

fair view and are free from material mis statement, whether due to fraudor error.

AUDITOR’S RESPONSIBILITY

3. Our responsibility is to express an opinion on these Standalone Ind AS financial statements based on our audit.

4. We have taken into account the provisions of the Act and the rules made thereunder, the accoun#ng and audi#ng

standards and ma$ers which are required to be included in the audit report under the provisions of the Act and the

Rules made thereunder.

5. We conducted our audit of the Standalone Ind AS financial statements in accordance with the Standards on Audi#ng

specified under Sec#on 143(10) of the Act and other applicable authorita#ve pronouncements issued by the Ins#tute of

Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements

and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from

material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the

Standalone Ind AS financial statements. The procedures selected depend on theauditor’s judgment, including the

assessment of the risks of material misstatement of the Standalone Ind AS financial statements, whether due to fraud

or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s

prepara#on of the Standalone Ind AS financial statements that give a true and fair viewin order to design audit procedures

that are appropriate in the circumstances. Anaudit also includes evalua#ng the appropriateness of the accoun#ng policies

used and the reasonableness of the accoun#ng es#mates made by the Company’s Directors, as well as evalua#ng the

overall presenta#on of the Standalone Ind AS financial statements.

7. We believe that theaudit evidencewehave obtained is sufficient and appropriate to provide a basis for our audit opinion

on the Standalone Ind AS financial statements.

OPINION

8. In our opinion and to the best of our informa#on and according to the explana#ons given to us, the aforesaid Standalone

Ind AS financial statements give the informa#on required by the Act in the manner so required and give a true and fair

view in conformity with the accoun#ng principles generally accepted in India, of the state of affairs of the Company as at

31st March, 2018, and its loss (including other comprehensive income), its cash flow and changes in equity for the year

ended on that date.

REPORTON OTHER LEGAL AND REGULATORY REQUIREMENTS

9. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India

in terms of Sub Sec#on (ii) of Sec#on 143 of the Act and on the basis of such checks of the books and records of the

company as we considered appropriate and according to the informa#on and explana#on given to us, we give in the

Annexure B, a statement on the ma$ers specified in paragraphs 3 and 4 of the Order, to the extent applicable.

Independent Auditors Report


68

Independent Auditors Report

10. As required by Sec�on 143 (3) of the Act, we report that:

a) We have sought and obtained all the informa�on and explana�ons which to the best of our knowledge and belief

were necessary for the purposes of our audit.

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

our examina�on of those books.

c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income) the statement of cash

flow and the statement of changes in equity dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid financial statements comply with the Accoun�ng Standards specified under Sec�on

133 of the Act.

e) On the basis of the wri�en representa�ons received from the directors as on 31st March, 2018 taken on record by

the Board of Directors, none of the directors is disqualified as on 31st March, 2018 from being appointed as a director

in terms of Sec�on 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial repor�ng of the control and the

opera�ng effec�veness of such controls, refer to our separate report in Annexure A.

g) With respect to the other ma�ers to be included in the Auditor’s Report in accordance with Rule 11 of the Companies

(Audit and Auditors) Rules, 2014, in our opinion and to the best of our informa�on and according to the explana�ons

given to us:

i. The Company has disclosed the impact of pending li�ga�ons on its financial posi�on in its Standalone Ind AS

financial statements – Refer Note 24 in ‘Other Notes’.

ii. The Company did not have any long-term contracts including deriva�ve contracts for which there were any

material foreseeable losses.

iii. There were amounts which were required to be transferred to the investor educa�on and protec�on fund by the

company and there has been no delay in transferring the same.

iv. The repor�ng on disclosure rela�ng to Specified Bank Notes is not Applicable to the company for the year ended

March 31, 2018.

For TANDON & TANDON


Firm Registra�on No. 002070C

Prabhat Tandon



Annexure A to Independent Auditors ReportReferred to in paragraph 10(f) of the Independent Auditors’ Report of even date to the members of Shri Lakshmi Cotsyn

Limited on the standalone financial statements for the year ended March, 31 2018.

REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE !I" OF SUB#SECTION 3 OF SECTION 143 OF THE ACT.

1. We have audited the internal financial controls over financial repor�ng of Shri Lakshmi Cotsyn Limited (“the Company”)

as of March, 31 2018 in conjunc�on with our audit of the standalone financial statements of the company for the year

ended on that date.

MANAGEMENT’S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

2. The Company’s management is responsible for establishing and maintaining internal financial controls based on the

internal control over financial repor�ng criteria established by the Company considering the essen�al components of

internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Repor�ng issued by

the Ins�tute of Chartered Accountants of India (ICAI). These responsibili�es include the design, implementa�on and

maintenance of adequate internal financial controls that were opera�ng effec�vely for ensuring the orderly and efficient

conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the presenta�on and


69

Annexure A to the Independent Auditors Report

detec!on of frauds and errors, the accuracy and completeness of the accoun!ng records, and the !mely prepara!on of

reliable financial informa!on, as required under the Act.

AUDITORS’ RESPONSIBILITY

3. Our responsibility is to express an opinion on the Company’s internal financial controls over financial repor!ng based

on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls

Over Financial Repor!ng (the “Guidance Note”) and the Standards in Audi!ng deemed to be prescribed under sec!on

143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal

financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with

ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal

financial controls over financial repor!ng was established and maintained and if such controls operated effec!vely in all

material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls

over financial repor!ng included opera!ng effec!veness. Our audit of the internal financial controls over financial

repor!ng included obtaining an understanding of internal financial controls over financial repor!ng, assessing the risk

that a material weakness exists, and tes!ng and evalua!ng the design and opera!ng effec!veness of internal control

based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the

risks of material misstatement of the financial statements, whether due to fraud or error.

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

on the Company’s internal financial controls system over financial repor!ng.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

6. A company’s internal financial control over financial repor!ng is a process designed to provide reasonable assurance

regarding the reliability of financial repor!ng and the prepara!on of financial statements for external purposes

in accordance with generally accepted accoun!ng principles. A company’s internal financial control over financial

repor!ng includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable

detail, accurately and fairly reflect the transac!ons and disposi!ons of the assets of the company; (2) provide reasonable

assurance that transac!ons are recorded as necessary to permit prepara!on of financial statements in accordance with

generally accepted accoun!ng principles, and that receipts and expenditures of the company are being made only in

accordance with authoriza!ons of management and directors of the company and(3) provide reasonable assurance

regarding preven!on or !mely detec!on of unauthorized acquisi!on,use, or disposi!on of the company’s assets that

could have a material effect on the financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

7. Because of the inherent limita!ons of internal financial controls over financial repor!ng, including the possibility of

collusion or improper management override of controls, material misstatements due to error or fraud may occur and

not be detected. Also, projec!ons of any evalua!on of the internal financial controls over financial repor!ng to future

periods are subject to the risk that the internal financial control over financial repor!ng may become inadequate because

of changes in condi!ons, or that the degree of compliance with the policies or procedures may deteriorate.

OPINION

8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial

repor!ng and such internal financial controls over financial repor!ng were opera!ng effec!vely as at March 31 2018,

based on the internal control over financial repor!ng criteria established by the Company considering the essen!al

components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial

Repor!ng issued by the Ins!tute of Chartered Accountants of India.

For TANDON & TANDON



Prabhat Tandon




70

Annexure B to the Independent Auditors’ Report

The Annexure referred to in our Independent Auditors’ Report to the members of the Company on the financial statements

for the year ended 31 March 2018, we report that:

1. a. The Company has maintained proper records showing full par�culars, including quan�ta�ve details and situa�on of

fixed assets.

b. The fixed assets of the Company have been physically verified by the management during the year and no material

discrepancies were no�ced on such verifica�on. In our opinion, this periodicity of physical verifica�on is reasonable

c. The �tle deeds of immovable proper�es, as disclosed in note 9 on fixed assets to the financial statements are held in

the name of the company

3. The Company has not granted any loans, secured or unsecured, to companies, firms or other par�es covered in the

Register maintained under Sec�on 189 of the Companies Act, 2013.Therefore the provisions of Clause 3(iii), (iii)(a), (iii)

(b), and (iii)(c) of the said order are not applicable to the company.

4. In our opinion, and according to the informa�on and explana�ons given to us, the company has complied with the

provisions of sec�on 185 and 186 of the Companies Act, 2013 in respect of the loans and investments made and guarantee

provided by it.

5. In our opinion, and according to the informa�on and explana�ons given to us, the company has not accepted any deposit

from the public within the provisions of sec�ons 73, 74, 75 and 76 of the act or any other relevant provisions of the

Companies Act, 2013and the rules framed there under to the extent no�fied.

6. We have broadly reviewed the cost records maintained by the Company pursuant to the Rulesprescribed by the Central

Government under Sub-Sec�on (1) of sec�on 148 of the Companies Act, 2013 and are of the opinion that prima facie the

prescribed accounts and records have been so made and maintained.However, we have not made a detailed examina�on

of the cost records with a view to determine whether they are accurate or complete.

7. a. According to the informa�on and explana�ons given to us, certain undisputed amounts payable in respect of

provident fund, employees’ state insurance, income tax and cess were in arrears as at 31 March 2018 for a period of

more than six months from the date they became payable, which are as follows:-

(` in Lacs)

Sl. No. Par�culars Amount

1. Contribu�on to Employee Provident Fund 1303.90

2. Contribu�on to Employee State Insurance 87.55

b. According to the informa�on and explana�ons given to us, there are no dues of service tax, duty of customs and cess,

income tax, sales tax, duty of excise and value added tax which have not been deposited on account of any dispute

as at 31st March, 2018.

8. The Company has outstanding dues to financial ins�tu�ons, banks and others during the year and all the loan accounts

of the company are NPA as on date. The bank/financial ins�tu�on wise details of outstanding amounts (as per books of

accounts) are as under:-

(` in Lacs)

Sl. No. Name of the Lender Total o/s Amount

1 Andhra Bank 7,053.61

2 Bank of Baroda 28,745.43

3 Canara Bank 41,276.92

4 Central Bank of India 50,087.85

5 Corpora�on Bank 4,157.02

6 Edelweiss Assets Reconstruc�on Company Ltd. 27,085.53

7 Exim Bank 2,341.51

8 IDBI Bank 307.85

9 IFCI Ltd. 526.63


71

Annexure B to the Independent Auditors Report

(` in Lacs)

Sl. No. Name of the Lender Total o/s Amount

10 Indian Bank 16,916.92

11 Oriental Bank of Commerce 12,813.69

12 Punjab Na!onal Bank 23,595.07

13 Saraswat Bank 10,257.79

14 State Bank of Bikaner & Jaipur 4,839.41

15 State Bank of Mysore 6,032.00

16 State Bank of Pa!ala 7,309.20

17 Syndicate Bank 41,654.97

18 Union Bank of India 37,043.58

19 Vijaya Bank 3,167.04

20 Uco Bank 2,244.76

Total 3,27,456.78

9. The company has not raised and money by way of ini!al public offer, further public offer and term loans. Accordingly the

provisions of Clause 3(ix) of the order are not applicable to the company.

10. During the course of our examina!on of the books and records of the company, carried out in accordance with the

generally accepted audi!ng prac!ces in India, and according to the informa!on and explana!ons given to us, we have

neither come across any instance of material fraud by the company or on the company by its officers or employees,

no!ced or reported during the year, nor have we been informed of such case by the management.

11. The Company has paid/provided for managerial remunera!on in accordance with the requisite approvals mandated by

provisions of sec!on 197 r/w schedule V to the Act.

12. As the company is not a Nidhi Company and Nidhi Rules, 2014 are not applicable to it, the provisions of the clause 3(xii)

of the Order are not applicable to the company.

13. The company has entered into transac!ons with the related par!es in compliance with the provisions of sec!on 177 and

188 of the act. The details of such related party transac!ons have been disclosed in notes to the financial statements as

required under accoun!ng standard 18, related party disclosures specified under sec!on 133 of the act, r/w Rule 7 of

Companies (Accounts) Rules, 2014.

14. The company has not made any preferen!al allotment or private placement of shares or fully or partly conver!ble

debentures during the year under review.Accordingly, the provisions of clauses 3(xiv) of the order are not applicable to

the company.

15. The company has not entered into any non-cash transac!ons with directors or persons connected with him.Accordingly

the provisions of clauses 3(xv) of the order are not applicable to the company.

16. The company is not required to be registered under sec!on 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the

provisions of clause 3(xvi) of the order are not applicable to the company.

For TANDON & TANDON



Prabhat Tandon




72

Balance Sheet as at 31st March, 2018

(` in Lacs)

NoteAs at

31st March, 2018

As at

31st March, 2017

A. EQUITY AND LIABILITIES

1. Shareholders' Funds

(a) Share capital 1 2,847.06 2,847.06

(b) Reserves and Surplus 2 (189,452.48) (176,657.73)

2. Share applica!on money pending allotment 6,843.04 6,843.04

3. Non-Current Liabili!es

(a) Long-term borrowings 3 237,753.77 239,570.52

(b) Other Long-term Liabili!es - -

(c) Long-term provisions 4 1,123.53 999.04

4. Current Liabili!es

(a) Short-term borrowings 5 91,690.18 92,748.01

(b) Trade payables 6 5,930.50 5,790.56

(c) Other current liabili!es 7 2,799.03 2,344.05

(d) Short-term provisions 8 10.00 26.28

159,544.63 174,510.83

B. ASSETS

1. Non-Current Assets

(a) Fixed assets

(i) Tangible assets 9 136,906.79 148,560.81

(b) Non-current investments 10 3,211.50 3,211.50

(c) Long-term loans and advances 11 1,993.28 2,780.19

2. Current Assets

(a) Inventories 12 2,248.16 4,168.64

(b) Trade receivables 13 2,701.21 3,076.19

(c) Cash and cash equivalents 14 125.33 250.10

(d) Short term loans and advances 15 19.59 14.43

(e) Other current assets 16 12,338.78 12,448.97

159,544.63 174,510.83





FRN No. 002070C







73

See accompanying notes forming part of the financial statements Nil

In terms of our report a"ached



FRN No. 002070C






Statement of Profit & Loss Account for the year ended 31st March, 2018

(` in Lacs)

Note As at

31st March, 2018

As at

31st March, 2017

1 INCOME

Revenue from opera#ons 17 19,282.73 30,522.39

Less: Excise Duty - -

19,282.73 30,522.39

2 Other income 18 296.72 409.80

3 Total revenue (1+2) 19,579.45 30,932.19

4 EXPENDITURE

(a) Cost of materials consumed 19 9,417.00 20,039.52

(b) Changes in inventories of finished goods, work-in-process and stock-

in-trade

20 906.03 848.95

(c) Employee benefits expense 21 4,740.11 5,150.39

(d) Finance cost 22 213.83 268.10

(e) Deprecia#on and amor#sa#on expense 23 8,735.23 8,867.07

(f) Other expenses 24 6,722.47 7,383.45

Total expenses 30,734.67 42,557.48

5 (Loss) before excep!onal items and tax (3 - 4) (11,155.22) (11,625.29)

6 Excep#onal items 25 (1,639.53) (15,549.19)

7 (Loss) before tax (5 + 6) (12,794.75) (27,174.48)

8 Tax expense - -

9 (Loss) for the year (7 + 8) (12,794.75) (27,174.48)

10 Earnings Per Equity Share (of ` 10/- Each) (44.94) (95.45)


74

1 SHARE CAPITAL

PARTICULARS As at

31st March, 2018

As at

31st March, 2017

Authorised Share Capital:

5,00,00,000 Equity Shares of ` 10/- each 5000.00 5000.00

5000.00 5000.00

Issued, subscribed and fully paid-up shares

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

Total 2,847.06 2,847.06

Reconcilia!on of the number of Equity Shares outstanding:

Equity shares outstanding at the beginning of the year 28,470,645 28,470,645

Equity shares allo!ed during the year - -

Equity shares outstanding at the end the of the year 28,470,645 28,470,645

Shareholder holding more than 5 percent Equity shares of the Company: No. of Shares

31st March, 2018 31st March, 2017

Name of shareholder NIL NIL

Rights, preferences and restric!ons a"ached to equity shares

The Company has only one class of equity shares with face value of

` 10/- each, ranking pari passu

2 RESERVES AND SURPLUS

(i) Capital Reserves Account

Balance as at the beginning of the year 581.97 581.97

Add : Addi"ons during the year - -

Balance as at the End of the Year 581.97 581.97

(ii) Securi!es premium account

Balance as at the beginning of the year 21,209.19 21,209.19

Add : Addi"ons during the year - -

Balance as at the End of the Year 21,209.19 21,209.19

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

Balance as at the beginning of the year (198,448.89) (171,274.41)

Less: Adjustment rela"ng to Fixed Assets (As per Companies Act, 2013) - -

Add: (Loss) for the year (12,794.75) (27,174.48)

Balance as at the End of the Year (211,243.64) (198,448.89)

Total Reserve and Surplus (i to iii) (189,452.48) (176,657.73)

The previous year figures have been re-grouped / re-classified, where ever necessary to conform to the current year presenta"on.

(Amount in INR Lakhs)

Notes forming part of the financial statementsfor the year ended 31st March, 2018


75

3 LONG TERM BORROWINGS

As at

31st March, 2018

As at

31st March, 2017

Secured Loans from Banks :

Secured loans from Banks 216,643.52 218,506.47

Mezannine Debt 12,480.83 12,480.83

ECB/FCCB/NCD 8,423.22 8,423.22

Unsecured :

Unsecured Loan 206.20 160.00

Total 237,753.77 239,570.52

4 LONG TERM PROVISIONS

Provisions for Employee Benei!s 1,123.53 999.04

Total 1,123.53 999.04

5 SHORT TERM BORROWINGS

Working Capital Loan 69,207.16 69,662.46

Short Term Loan 22,482.52 23,085.55

Bank Balance with Credit Balance 0.50 -

Total 91,690.18 92,748.01

6 TRADE PAYABLES

Trade Creditors 4,384.69 3,988.98

Capex Creditors 1,442.16 1,667.00

Advance from Customers 103.65 134.58

Total 5,930.50 5,790.56

7 OTHER CURRENT LIABILITIES

Unpaid Dividend 14.10 14.10

Employee Benefit Payable & others 1,029.10 899.64

Security Deposit Receipt 1.06 0.25

Others Current Liabili#es 17.97 131.83

Statutory Liabili#es 1,736.80 1,298.23

Total 2,799.03 2,344.05

8 SHORT TERM PROVISIONS

Provision for Expenses 10.00 26.28

Total 10.00 26.28

(` in Lacs)



76

(` in Lacs)


Descrip�on (A) TANGIBLE ASSETS: (B) INTANGIBLE ASSETS: Total

Land Buildings Plant and

Machinery

Furniture

and fi�ngs

Office

equipment

Vehicles Total (A) Brand Total (B)

Gross Block As at 1-04-2016 2,176.04 25,875.72 186,492.02 543.95 681.84 736.61 216,506.18 - - 216,506.18

Addi!onal /

Adjustments

(11.75) (113.31) 125.91 0.12 3.44 6.71 11.12 - 11.12

As at 01-04-2017 2,164.29 25,762.41 186,617.93 544.07 685.28 743.32 216,517.30 - - 216,517.30

Addi!onal /

Adjustments

(38.71) (302.69) (5,579.23) (27.46) (68.24) (163.87) (6,180.20) - - (6,180.20)

As at 31-03-2018 2,125.58 25,459.72 181,038.70 516.61 617.04 579.45 210,337.10 - - 210,337.10

Accumulated

Deprecia!on

As at 1-04-2016 - 5,246.44 52,170.26 298.95 637.98 735.79 59,089.42 - - 59,089.42

for the Year - 866.04 7,964.90 69.72 25.09 5.66 8,931.41 - 8,931.41

Adjustments - (64.34) - - - - (64.34) - - (64.34)

As at 01-04-2017 - 6,048.14 60,135.16 368.67 663.07 741.45 67,956.49 - - 67,956.49

for the Year - 852.64 7,801.44 66.08 13.50 1.57 8,735.23 - 8,735.23

Adjustments - (35.72) (2,965.65) (21.95) (74.22) (163.87) (3,261.41) - - (3,261.41)

As at 31-03-2018 - 6,865.06 64,970.95 412.80 602.35 579.15 73,430.31 - - 73,430.31

Net Block As at 01-04-2016 2,176.04 20,629.28 134,321.76 245.00 43.86 0.82 157,416.76 - -

157,416.76

As at 01-04-2017 2,164.29 19,714.27 126,482.77 175.40 22.21 1.87 148,560.81 - - 148,560.81

As at 31-03-2018 2,125.58 18,594.66 116,067.75 103.81 14.69 0.30 136,906.79 - - 136,906.79

10 NON!CURRENT INVESTMENT

As at

31st March, 2018

As at

31st March, 2017

Un-Quoted Shares 3,211.50 3,211.50

Total 3,211.50 3,211.50

11 LONG TERM LOANS & ADVANCES

Advances to suppliers 326.27 708.49

Security Deposits 339.64 747.69

Other Loans & Advances 1,327.37 1,324.01

Total 1,993.28 2,780.19

12 INVENTORIES




Stores and Spare-parts 631.85 718.25

Total 2,248.16 4,168.64

9 FIXED ASSETS


77


13 TRADE RECEIVABLES

As at

31st March, 2018

As at

31st March, 2017

(Unsecured, Considered Good unless otherwise stated)

(i) Debt o/s for a period exceeding 6 months from the day they are due

for payment

(a) Considered Good 1,573.47 2,433.81

(b) Considered Doub!ul 369.06 377.69

1,942.53 2,811.50

Less : Provision for doub!ul debts - -

1,942.53 2,811.50

(ii) Other debts

(a) Considered Good 758.68 264.69

Total 2,701.21 3,076.19

14 CASH AND BANK BALANCES

(a) Cash and cash equivalents:

Cash Balance on Hand 5.04 14.02

(b) Balance with Banks in:

Current Accounts 106.19 221.98

(c) Earmarked balances with banks:

Unpaid Dividend Account 14.10 14.10

Total 125.33 250.10

15 SHORT TERM LOANS AND ADVANCES

Salary Advance 19.59 14.43

Other Short term Loans & Advances - -

Total 19.59 14.43

16 OTHER CURRENT ASSETS

Accrued Duty Draw back 16.24 289.28

Tufs Subsidy Receivable 11,771.64 11,771.64

Accrued Interest 19.24 26.24

Advances to Others 52.80 2.06

T.D.S. Receivable 209.72 332.99

GST Receivable 264.01 -

Prepaid Expenses 5.13 17.48

Cenvat Credit - 9.28

Total 12,338.78 12,448.97

(` in Lacs)


78


17 REVENUE FROM OPERATIONS

As at

31st March, 2018

As at

31st March, 2017

(i) Sale of Products:

Sui�ng & Shir�ng 224.76 852.74

Denim 1,008.10 4,747.39

Home Furnishing 2,423.07 4,215.61

Bo�om Weight 253.34 322.15

Terry Towel 3,678.38 7,894.47

Technical Tex�le 493.53 1,774.96

Retail Outlet/ Misc. Sale 338.61 406.01

Jobwork 10,784.22 9,991.45

19,204.01 30,204.78

Sales includes Export Sales of ` 4144.44 Lakhs (Previous year ` 4007.74 lakhs).

(iI) Other Opera!ng Revenues:

Export Benefits 78.72 317.61

78.72 317.61

Revenue from Opera�ons (Gross) 19,282.73 30,522.39

Less: Excise Duty - -

Revenue from Opera!ons (Net) 19,282.73 30,522.39

18 OTHER INCOME

Miscellaneous Income 83.38 151.37

Foreign Currency Fluctua�on Gain 31.20 15.15

Rent Received 10.50

Machinery Usage Charges 10.17

Discount Received 83.66 -

Profit on Sale of Fixed Assets 77.81 243.28

Total 296.72 409.80

19 COST OF MATERIALS CONSUMED

Raw Material Consumed 8,394.45 18,306.75

Packing Materials 874.31 1,467.92

Others (Freight Inward) 148.24 264.85

Stock Transfer Sale - -

Stock Transfer Sale - -

Stock Transfer Purchase - -

Stock Transfer Purchase - -

Total 9,417.00 20,039.52

(` in Lacs)


79

(` in Lacs)


20 CHANGES IN INVENTORIES OF FINISHED GOODS, WORK!IN!PROCESS AND TRADED GOODS

As at

31st March, 2018

As at

31st March, 2017

Closing Stock

Work-in-Process as at 31st March, 2018 595.25 1,144.47

Finished Goods as at 31st March, 2018 562.67 919.48

1,157.92 2,063.95

Less: Excise Duty on uncleared Finished Goods - -

1,157.92 2,063.95

Opening Stock

Work-in-Process as at 31st March, 2017 1,144.47 1,752.83

Finished Goods as at 31st March, 2017 919.48 1,160.07

2,063.95 2,912.90

Net (increase) / decrease Inventories 906.03 848.95

21 EMPLOYEE BENEFIT EXPENSES

Salaries, wages and bonus 4,378.79 4,654.81

Contribu!on to Provident & other Funds 336.86 456.57

Employee welfare expenses 24.46 39.01

Total 4,740.11 5,150.39

22 FINANCE COSTS

Interest Expenses 189.08 206.33

Bank Charges 24.75 61.77

Total 213.83 268.10

23 DEPRECIATION AND AMORTIZATION EXPENSE

Deprecia!on of tangible assets 8,735.23 8,867.07

Total 8,735.23 8,867.07


80


24 OTHER EXPENSES

As at

31st March, 2018

As at

31st March, 2017

a) Manufacturing Expenses

Repair & Maintenance 258.38 420.11

Stores & Spares 749.03 750.96

Power & Fuel 4,842.31 5,056.18

Other Manufacturing Expenses 138.96 208.89

b) Administra!ve & Other Expenses

Rent, Rate & Taxes 28.81 20.24

Insurance Cost 41.93 46.06

Mee!ng Expenses 0.35 0.13

Concurrent Audit fee & Expenses 4.29 4.37

Auditors Remunera!on 10.00 20.04

Prin!ng & Sta!onery 17.59 19.24

Postage & Telegram 72.41 73.82

Legal Expenses 5.18 20.20

Adver!sement 6.30 23.03

Professional Charges 73.17 91.54

c) Selling & Distribu!on Expenses

Travelling & Conveyance 180.37 177.41

Selling & Distribu!on 185.01 284.55

Freight Outward 108.38 166.68

Total 6,722.47 7,383.45

25 OTHER EXPENSES

a. Bad debts (243.58) 15,132.23

b. Discount Allowed 52.25 416.96

c. Loss on Sale of Assets 1,830.86 -

Total 1,639.53 15,549.19

(` in Lacs)

In terms of our report a"ached



FRN No. 002070C







81

As at

31st March, 2018

As at

31st March, 2017

CASH FLOW FROM OPERATION ACTIVITIES

Net Profit before tax and extra ordinary items (11,155.22) (11,625.29)

- Deprecia"on 8,735.23 8,867.07

(2,419.99) (2,758.22)

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES

Adjusted For

- Trade and Other receivable 566.32 1,278.64

- Inventories 1,920.48 1,374.39

- Loans & Advances & Other Current Assests 891.94 (179.92)

- Trade Payables & Provisions 703.13 1,545.86

4,081.87 4,018.97

Cash Generated from opera"ons 1,661.88 1,260.75

Net cash from opera!ng ac!vi!es ( A) 1,661.88 1,260.75

CASH FLOW FROM INVESTMENT ACTIVITIES

- Fixed assets acquired 1,087.93 (11.12)

- Sale of Investment - -

- Net Cash used in Investment ac!vi!es (B ) 1,087.93 (11.12)

CASH FLOW FROM FINANCE ACTIVITIES

- Change in Bank Borrowings (1,816.75) (1,200.81)

- Change in Short Term Borrowings (1,057.83) (54.52)

- Net Cash used in financing ac!vi!es (C ) (2,874.58) (1,255.33)

Net increase in cash and cash equivalents (124.77) (5.70)

Cash and Cash equivalents as at 1st April 2017 250.10 255.80

Cash and Cash equivalents as at 31st March 2018 125.33 250.10




FRN No. 002070C






Cash Flow Statement for the year ended 31st March, 2018

(` in Lacs)


82

A. CORPORATE INFORMATION

Shri Lakshmi Cotsyn Limited (“The Company”) is a public limited company, domiciled in India and incorporated under the

provisions of the Companies Act, 1956. The equity shares of the Company are listed (trading currently under suspension)

on the Bombay Stock Exchange (BSE) and Na�onal Stock Exchange (NSE). It is primarily engaged in the business of tex�le

manufacturing and has fully integrated capacity.

B. SIGNIFICANT ACCOUNTING POLICIES AND OTHER NOTES

1. Basis of Prepara!on of Financial Statements

The financial statements of the Company have been prepared in accordance with the Companies (Indian Accoun�ng

Standards) Rules, 2015 prescribed under Sec�on 133 of the Companies Act, 2013, and other recognised accoun�ng

prac�ces and policies to the extent applicable.

2. Use of Es!mates

The prepara�on of financial statements in conformity with the generally accepted accoun�ng principles require

es�mates and assump�ons to be made that affect the reported amounts of assets and liabili�es and disclosure

rela�ng to con�ngent liabili�es on the date of the financial statements and the reported amounts of revenues and

expenses during the repor�ng period. Differences between the actual results and es�mates are recognised in the

period in which the results are known/materialise.

3. Revenue Recogni!on

Revenue from sale of goods is recognised when all significant contractual obliga�ons have been sa�sfied, significant

risks and rewards of ownership are transferred to the customers and no effec�ve ownership is retained by the

Company. Revenue from sale of goods is recognised net of taxes, and net of rebates and normal discounts. Export

turnoverexcludes related export benefits.

4. Fixed Assets :

i) Tangible Assets:

Fixed Assets are stated at cost of acquisi�on or construc�on less accumulated deprecia�on and impairment

losses. Costs of acquisi�on comprise all costs incurred to bring the assets to their loca�on and working

condi�on up to the date the assets are ready for use. Costs of construc�on are composed of those costs that

relate directly to specific assets and those that are a#ributable to the construc�on ac�vity in general and can

be allocated to specific assets up to the date the assets are ready for use.

ii) Intangible Assets:

Intangible assets are recognised only if it is probable that the future economic benefits that are a#ributable to

the assets will flow to the enterprise and the cost of the assets can be measured reliably. Intangible assets are

stated at cost less accumulated amor�sa�on and impairment losses.

5. Investments:

Investments classified as Long Term Investments are stated at cost. Provision is made to recognise a decline, other

than temporary, in the value of investments. Current investments are carried at cost or fair value, whichever is

lower.

6. Deprecia!on / Amor!sa!on:

Deprecia�on is provided based on useful life of assets as prescribed in Schedule II to the Companies Act, 2013.

Deprecia�on on Fixed Assets is provided on Straight Line Value (SLM).



83


7. Inventories:

Items of Inventories are valued on the basis given below:

i. Raw Materials, Packing Materials, Stores and Spares:

Cost for raw materials and components, stores and spare parts, loose tools is determined on FIFO basis. Cost

of materials is arrived at a!er adjustment of, where applicable, GST/Cenvat benefit availed or to be availed.

ii. Process stock and finished goods:

Process stock and finished goods are valued at lower of cost and net realizable value. Cost of finished goods,

work in process and factory made components include costs of conversion and other costs incurred in bringing

the inventories to their present loca#on and condi#on. Finished goods lying in the factory premises are valued

exclusive of GST.

8. Employees Benefits:

Short-term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit

and loss of the year in which the related services are rendered. Post-employment and other long-term benefits

are recognized as an expense in the statement of profit and loss of the year in which the employee has rendered

services.

9. Government Grants:

Grants, in the nature of interest subsidy under the Technology Upgrada#on Fund Scheme (TUFs), have been

accounted for as per claims filed by the banks to MOT in the previous years. The disbursement of the same is

pending and is s#ll awaited.

10. Foreign exchange transac"on:

The transac#ons in foreign currency are accounted at the exchange rate prevailing on the date of such transac#ons.

Current monetary assets and liabili#es are translated at the exchange rate prevailing at the repor#ng date. Non-

monetary items are carried at cost.

11. Provisions, con"ngent liabili"es and con"ngent assets:

a. Con#ngent liabili#es are disclosed in respect of possible obliga#ons that arise from past events but their

existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events.

A provision is made when it is probable that an ou$low of resources embodying economic benefits will be

required to se%le an obliga#on and in respect of which a reliable es#mate can be made. Provision is not

discounted and is determined based on best es#mate required to se%le the obliga#on at the year-end date.

b. Con#ngent Assets are not recognized or disclosed in the financial statements.

12. Earnings Per Share:

Basic earnings per share is computed and disclosed using the weighted average number of equity shares outstanding

during the year. Dilu#ve earnings per share is computed and disclosed using the weighted average number of equity

and dilu#ve equity equivalent shares outstanding during the year, except when the results would be an#-dilu#ve.

13. Segment Repor"ng:

The Company is engaged in manufacturing of tex#les which is considered as the only business segment.


84


OTHER NOTES:

14. Personal Accounts Balance:

Balances of certain debtors, creditors and advances are subject toconfirma�on/reconcilia�on, if any.Certain debtors

have been raising counter claims due to supply of cloth which were not as per quality specifica�on of buyer or there

was delay in supplying the material and could not be sold due to expiry of season. Certain claims have been se�led

by allowing discounts to such debtors.The amount of claims to be paid/se�led are accounted for at the �me of

se�lement only as the terms and final amount of se�lement/claim is not reasonably ascertainable.

15. Job work vis-a-vis Sales Value Equaliza!on:

The company is in stringent working capital crisis situa�on and hence the company is currently unable to source

raw material for its own produc�on. Accordingly, during the year, company has earned a por�on of its revenue from

jobwork. Job work has been done for world renowned suppliers of denims, shee�ng & terry towel who are inclined

to increase their jobwork in the company in view of imported machinery, state of art infrastructure and superior

quality product. Job work has enabled the company to reduce its cash losses & increase it capacity u�liza�on.

16. Inventory:

The breakup of inventory is as follows:- (` in Lacs)

Par!culars As at

31st March, 2018

As at

31st March, 2017




Stores Spare & Others 631.85 718.25

Total 2,248.16 4,168.64

All the inventories are valued at lower of cost or net realisable value except waste which is being valued at net

realisable value.

17. Interest Cost

The bank accounts of the company had become NPA. Certain bankers are charging interest on the balance amount

of loan outstanding while some others are not, as per the policy adopted by each bank. Accordingly, interest has

been booked during the financial year on payment basis.

18. Debtors, Bad Debts & Provision for Bad & doub"ul debts

Debtors outstanding for more than 1 year have been wri�en off and amount charged to extraordinary item. Certain

debts earlier wri�en off as bad have been recovered to the extent of Rs. 10.16 Cr; debtors to the extent of Rs. 7.73

Cr have been provided for as bad debts .The management is s�ll pursuing the recovery of the same through legal

recourse, but the chances of recovery are very less and hence have been wri�en off.

19. Status at NCLT

Corporate Insolvency Resolu�on Process (CIRP) under the Indian Bankruptcy Code, 2016 (IBC has been ini�ated

by the order of Na�onal Company Law Tribunal, Allahabad Bench on 30th May 2018 a"er admission of CP of

Union Bank of India and appointed Mr. Rohit Sehgal of M/s AAA Insolvency Professionals LLP as Interim resolu�on

professional (IRP) for Corporate Insolvency Resolu�on Process.

Mr. Rohit Sehgal has visited the company’s office & facili�es and has taken over the charge of the business in

capacity of IRP. He will now access the poten�al of the business, assets, need & quantum of working capital and

then �e up with strategic investors to complete the resolu�on process.


85


20. Accumulated Losses

The company has accumulated loss of ̀ 1894.52 Crs. as at the balance sheet date. Out of the above, loss of ̀ 127.94

Crs. pertains to the losses of the year ended March 2018.

21. Sale of noncore assets

During the year Lenders have sold company’s Aung unit at Godhrauli at Rs. 10.04 Crore and adjusted the proceeds

against debt. Further Garment unit at Roorkee and Spinning unit at Fatehpur have been declared at Non-core have

also been put up for auc!on. However a"er ini!a!on of CIRP, the IRP will take care of the further proceedings.

22. Capacity U!liza!on Statement

The capacity u!liza!on have gone down during the year in respect of all the products due to poor market condi!on

and on account of running of opera!ons on jobwork. Qty in Lacs

Sr.

No.

Par!culars Unit Installed U!liza!on


U!liza!on


Qty. Percentage Qty. Percentage

I Sui!ng & Shir!ng * Mtrs. 300 31.69 25.35% 42.91 14.30%

II Fusible Interlining Fabric * Mtrs. 250 40.57 38.95% 104.04 41.62%

III Denim Mtrs. 300 46.00 15.33% 72.07 24.02%

IV Shee!ng Mtrs. 260 77.26 29.72% 142.25 54.71%

V Bo#om Weight Mtrs. 60 9.95 16.58% 21.68 36.13%

VI Yarn Dyed Shir!ng Mtrs. 60 - NA - NA

VII Terry Towel Kgs. 120 38.79 32.33% 40.48 33.73%

VIII Technical Tex!les

Flex Fabric Sq. Mtrs. 900 17.14 1.90% 40.71 4.52%

Black Out Fabric Mtrs. 200 - NA - NA

NBC Fabric Mtrs. 100 0.62 0.62% 0.15 0.15%

IRR / MSCN Fabric Sq. Mtrs. 50 - NA - NA

Foam Board/PVC Sheet Kgs. 36 - 0.00% 0.29 0.80%

Other Technical Tex!les Fabric Mtrs. 96 - NA - NA

IX Garments # Nos. 66 - NA - NA

X Quilts / Comforters # Nos. 3 - NA - NA

* Sui!ng Shir!ng & Fusible Interlining Unit situated at Aung, Fatehpur was under ownership of company for 5 months only. It

was then sold through auc!on by Bankers. Capacity u!liza!on has accordingly been considered for 5 months only.

# Garment Unit Situated at Roorkee & Quilt & Comforters Unit at Noida has not been opera!onal during the financial year

23. Related Party Transac!ons:

• Name Of Related Par!es & Descrip!on Of Rela!onship

(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.


86


(B) Rela�ves 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)

(C) Companies & Concerns controlled by Key Managerial Personnel/Rela�ves:

i) Shri Lakshmi Defence Solu�ons Limited

ii) SLCL Overseas (FZC) at Sharjah, UAE

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

• Details of Transac�on

Nature Associate Companies Key Management Personnel & their rela!ves

Remunera�on Paid # - ` 75,33,110/-*

* Paid in FY 2017-18- Dr. M.P. Agarwal (` 20,62,000), Mr. Pawan Kumar Agarwal (` 14,18,000), Mrs. Sharda

Agarwal (` 6,32,500), Mr. Devesh Gupta (` 21,99,610) Mr. Alok Agarwal (` 12,21,000)

# Actual Payments considered

24. Con!ngent Liabili!es:

Con�ngent liabili�es 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 ` NIL

(ii) Claim against the Company not acknowledged as Debt ` NIL

(iii) Le$er of Credit outstanding ` NIL

The company has an export obliga�on to the tune of ` 2007.50 Cr. on account of import of capital goods under

EPCG scheme. The company is se$ling the export obliga�on on year to year basis and further expects to se$le the

same on going concern basis. However, if the obliga�on is not fulfilled, the company will have to pay the amount of

duty saved under EPCG on imports alongwith interest & penalty as per the statue.

In terms of our report a$ached



FRN No. 002070C






Shri Lakshmi Cotsyn LimitedAN ISO 9000:2008 COMPANY

www.shrilakshmi.in

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