SLCL COL PAGES 2017 - Shri Lakshmishrilakshmi.in/financial/Annual-Report-2016-17.pdf · WEBSITE : E-MAIL ID : [email protected] CORPORATE IDENTITY NUMBER (CIN) L17122UP1988PLC009985

Undented

Aspirations

Annual Report 2016-17

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

Pioneering spirit.

Progressive outlook.

Collaborative approach.

Transparency.

People.

What drives us in ourchallenging times?

And most importantly,

Our Shareholders' Faith and Condence

Our aspirations remain strong and allows us to strive and stay focussed for a sustainable revival.

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

Undented

Aspirations


You will come across

CORPORATE OVERVIEW

STATUTORY REPORTS

CONSOLIDATED FINANCIALS

STANDALONE FINANCIALS 74 96...52 73...13 51...1 12...

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

Pioneering spirit.

Progressive outlook.

Collaborative approach.

Transparency.

People.

What drives us in ourchallenging times?

And most importantly,

Our Shareholders' Faith and Condence

Our aspirations remain strong and allows us to strive and stay focussed for a sustainable revival.

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

Undented

Aspirations


You will come across

CORPORATE OVERVIEW

STATUTORY REPORTS

CONSOLIDATED FINANCIALS

STANDALONE FINANCIALS 74 96...52 73...13 51...1 12...

Corporate InformationBOARD OF DIRECTORS

Dr. M. P. AGARWAL - Chairman cum Managing DirectorMr. PAWAN KUMAR AGARWAL - Joint Managing DirectorMr. DEVESH NARAIN GUPTA - Dy. Managing DirectorMrs. SHARDA AGARWAL - Executive DirectorProf. (Dr.) G. N. MATHUR - Non-Executive DirectorProf. (Dr.) R. K. TRIVEDI - Independent Director

COMPANY SECRETARY & FINANCE CONTROLLER

MR. RAKESH KUMAR SRIVASTAVA

HEAD ACCOUNTS

MR. VIVEK SAXENA

PRESIDENT WORKS

MR. B. R. GARG

STATUTORY AUDITORS

M/s PRADEEP & ASSOCIATESChartered Accountants27/78 A, Gagan Deep ComplexBirhana Road, Kanpur-208001Ph. No. (0512) 2313665

INTERNAL AUDITORS

M/s SRIVASTAVA S & CO.Chartered Accountants112 / 206-A, Swaroop Nagar, Kanpur - 208002Ph. No. (0512) 2551249

COST AUDITOR

Mr. A. K. SRIVASTAVA96 Harjender Nagar, Kanpur - 208007Ph. No. 09839116989

LEGAL ADVISOR

MR. RAM GOPAL PANDEY - AdvocateChamber No.- 17, First FloorPt. M.L. Nehru Adhivakta Bhawan,Civil Court, KanpurPh. No. (0512) 2665598

DHIR & DHIR ASSOCIATESAdvocates & SolicitorsD-55, Defence Colony, New Delhi-110 024www.dhirassociates.com

P. R. ADVISOR

S. K. ADVERTISERSMIG F- 4 , Gujaini, Kanpur - 208022Ph. No. (0512) 2282265

BANKERS & ARC IN CONSORTIUM

1. Central Bank of India

2. Syndicate Bank

3. Union Bank of India

4. Canara Bank

5. Bank of Baroda

6. Punjab National Bank

7. Indian Bank

8. State Bank of India

9. Exim Bank

10. Oriental Bank of Commerce

11. IDBI Bank

12. Vijaya Bank

13. Corporation Bank

14. Saraswat Bank

15. Andhra Bank

16. Edelweiss Asset Reconstruction Company Ltd.

MONITORING INSTITUTION FOR LENDERS

Central Bank of IndiaCFB, Jeevantara BuildingParliament Street New Delhi - 110001

SECURITY TRUSTEE FOR LENDERS

Centbank Financial Services Limited1st Floor, Link House, Bahadurshah Zafar Marg New Delhi - 110002

REGISTERED OFFICE

19/X-1 KrishnapuramG.T Road, Kanpur, U.P. 208007Ph. 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 Solutions Ltd. Rahsoopur, Tehsil Bindki, Industrial Area, G.T.Road, Dist. Fatehpur

3. Synergy Global Home Inc. 160 Green Tree Drive, Suite 101, Dover Kent – 19904, USA

REGISTRAR & TRANSFER AGENTS

M/s Abhipra Capital Ltd.Regd. office: GF-58-59, World Trade Centre, Barakhamba Lane, New Delhi-110001Tel.: 011-23414629 Telefax : 011-23414503Corporate office: Abhipra Complex, A-387, Dilkhush Indl. Area, G.T. Karnal Road, Azadpur, Delhi-110033.Tel.: 91-11-42390909, Fax :91-11-42390911

UNITS

(a) MALWAN UNIT UPSIDC Industrial Area P.O. Malwan Dist. Fatehpur, U.P. Ph. No. (05181) 248669

(b) AUNG UNIT P.O. Aung, GT Road, Dist. Fatehpur, U.P. Ph. No. (05181) 251184 / 48

(c) ABHAYPUR UNIT P.O. Aung, GT Road, Dist. Fatehpur, U.P.

(d) REWARI BUJURG UNIT Village & Post - Rewari Bujurg Pargana & Tehsil - Bindki, Dist. Fatehpur, U.P.

(e) NOIDA UNIT (Closed) C-40, Sector-57, Noida Ph. No. (0120) 4722700

(f) ROORKEE UNIT (Closed) Dev Bhoomi Industrial Estate, Village Banta Kheri, Tehsil Roorkee, District Haridwar, Uttaranchal Ph. No. (01332) 231961

(g) 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 ExchangeFloor 25, P.J. Towers, Dalal Street, Mumbai 400001Ph. No. (022) 2272134

National Stock Exchange5th Floor, Exchange Plaza, Bandra (E), Mumbai 400051Ph. No. (022) 26598100

SCRIP CODE

BSE: 526049

NSE: SHLAKSHMI

BLOOMBERG CODE

SLCL IN

REUTERS CODE

SHLK.BO

2 3

Corporate InformationBOARD OF DIRECTORS

Dr. M. P. AGARWAL - Chairman cum Managing DirectorMr. PAWAN KUMAR AGARWAL - Joint Managing DirectorMr. DEVESH NARAIN GUPTA - Dy. Managing DirectorMrs. SHARDA AGARWAL - Executive DirectorProf. (Dr.) G. N. MATHUR - Non-Executive DirectorProf. (Dr.) R. K. TRIVEDI - Independent Director

COMPANY SECRETARY & FINANCE CONTROLLER

MR. RAKESH KUMAR SRIVASTAVA

HEAD ACCOUNTS

MR. VIVEK SAXENA

PRESIDENT WORKS

MR. B. R. GARG

STATUTORY AUDITORS

M/s PRADEEP & ASSOCIATESChartered Accountants27/78 A, Gagan Deep ComplexBirhana Road, Kanpur-208001Ph. No. (0512) 2313665

INTERNAL AUDITORS

M/s SRIVASTAVA S & CO.Chartered Accountants112 / 206-A, Swaroop Nagar, Kanpur - 208002Ph. No. (0512) 2551249

COST AUDITOR

Mr. A. K. SRIVASTAVA96 Harjender Nagar, Kanpur - 208007Ph. No. 09839116989

LEGAL ADVISOR

MR. RAM GOPAL PANDEY - AdvocateChamber No.- 17, First FloorPt. M.L. Nehru Adhivakta Bhawan,Civil Court, KanpurPh. No. (0512) 2665598

DHIR & DHIR ASSOCIATESAdvocates & SolicitorsD-55, Defence Colony, New Delhi-110 024www.dhirassociates.com

P. R. ADVISOR

S. K. ADVERTISERSMIG F- 4 , Gujaini, Kanpur - 208022Ph. No. (0512) 2282265

BANKERS & ARC IN CONSORTIUM

1. Central Bank of India

2. Syndicate Bank

3. Union Bank of India

4. Canara Bank

5. Bank of Baroda

6. Punjab National Bank

7. Indian Bank

8. State Bank of India

9. Exim Bank

10. Oriental Bank of Commerce

11. IDBI Bank

12. Vijaya Bank

13. Corporation Bank

14. Saraswat Bank

15. Andhra Bank

16. Edelweiss Asset Reconstruction Company Ltd.

MONITORING INSTITUTION FOR LENDERS

Central Bank of IndiaCFB, Jeevantara BuildingParliament Street New Delhi - 110001

SECURITY TRUSTEE FOR LENDERS

Centbank Financial Services Limited1st Floor, Link House, Bahadurshah Zafar Marg New Delhi - 110002

REGISTERED OFFICE

19/X-1 KrishnapuramG.T Road, Kanpur, U.P. 208007Ph. 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 Solutions Ltd. Rahsoopur, Tehsil Bindki, Industrial Area, G.T.Road, Dist. Fatehpur

3. Synergy Global Home Inc. 160 Green Tree Drive, Suite 101, Dover Kent – 19904, USA

REGISTRAR & TRANSFER AGENTS

M/s Abhipra Capital Ltd.Regd. office: GF-58-59, World Trade Centre, Barakhamba Lane, New Delhi-110001Tel.: 011-23414629 Telefax : 011-23414503Corporate office: Abhipra Complex, A-387, Dilkhush Indl. Area, G.T. Karnal Road, Azadpur, Delhi-110033.Tel.: 91-11-42390909, Fax :91-11-42390911

UNITS

(a) MALWAN UNIT UPSIDC Industrial Area P.O. Malwan Dist. Fatehpur, U.P. Ph. No. (05181) 248669

(b) AUNG UNIT P.O. Aung, GT Road, Dist. Fatehpur, U.P. Ph. No. (05181) 251184 / 48

(c) ABHAYPUR UNIT P.O. Aung, GT Road, Dist. Fatehpur, U.P.

(d) REWARI BUJURG UNIT Village & Post - Rewari Bujurg Pargana & Tehsil - Bindki, Dist. Fatehpur, U.P.

(e) NOIDA UNIT (Closed) C-40, Sector-57, Noida Ph. No. (0120) 4722700

(f) ROORKEE UNIT (Closed) Dev Bhoomi Industrial Estate, Village Banta Kheri, Tehsil Roorkee, District Haridwar, Uttaranchal Ph. No. (01332) 231961

(g) 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 ExchangeFloor 25, P.J. Towers, Dalal Street, Mumbai 400001Ph. No. (022) 2272134

National Stock Exchange5th Floor, Exchange Plaza, Bandra (E), Mumbai 400051Ph. No. (022) 26598100

SCRIP CODE

BSE: 526049

NSE: SHLAKSHMI

BLOOMBERG CODE

SLCL IN

REUTERS CODE

SHLK.BO

2 3

About UsShri Lakshmi Cotsyn Limited (SLCL)manufactures regular and technical textiles offering world-class quality and innovative product offerings to its customer.

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

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

Aspired to innovate

Pioneered the technical

innovations through the development of Nanotechnology,

Functional fabric and Smart intelligent fabric

Enjoys strong relationship with marquee clients

including Fortune 500 Companies like Wal-mart

and Ikea

Approved supp-lier to Government

defence establishments (Indian Army, Navy, Air

Force and State Police) and is registered with several

regulatory agencies

Acknowledged leader in the eld of

Microdot Fusible Interlining Fabric, Blended Suiting &

Shirting, Terry Towels, Home Furnishing, Wider Width Sheeting,

Denim Fabrics, Camouage fabrics and Industrial Fabrics like Nuclear Bio-

Chemical Fabrics, Infrared protective fabrics and Bullet

Proof Jackets etc

Ranked “Star Export House” by

the ofce of the Joint Director-General of Foreign

Trade, Ministry of Commerce and Industry and is a preferred supplier to Defence Research

and Development Organization (DRDO)

ISO 9001:2008 certied by Transpacic Certications

Limited.

4 5

About UsShri Lakshmi Cotsyn Limited (SLCL)manufactures regular and technical textiles offering world-class quality and innovative product offerings to its customer.

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

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

Aspired to innovate

Pioneered the technical

innovations through the development of Nanotechnology,

Functional fabric and Smart intelligent fabric

Enjoys strong relationship with marquee clients

including Fortune 500 Companies like Wal-mart

and Ikea

Approved supp-lier to Government

defence establishments (Indian Army, Navy, Air

Force and State Police) and is registered with several

regulatory agencies

Acknowledged leader in the eld of

Microdot Fusible Interlining Fabric, Blended Suiting &

Shirting, Terry Towels, Home Furnishing, Wider Width Sheeting,

Denim Fabrics, Camouage fabrics and Industrial Fabrics like Nuclear Bio-

Chemical Fabrics, Infrared protective fabrics and Bullet

Proof Jackets etc

Ranked “Star Export House” by

the ofce of the Joint Director-General of Foreign

Trade, Ministry of Commerce and Industry and is a preferred supplier to Defence Research

and Development Organization (DRDO)

ISO 9001:2008 certied by Transpacic Certications

Limited.

4 5

Brand umbrellaThe Company was engaged in the manufacturing of armoured and mine protection vehicles (with 360° protection) through its 100% subsidiary – Shri Lakshmi Defence Solutions Limited (SLDSL). It also had an agreement with Ford India Limited for armouring vehicle on Ford chassis. Besides, SLDSL is registered with the some of India's prominent defence establishments like:

v Directorate General of Supplies & Disposal

v Director General of Quality Assurance

v Ministry of Defence (Navy)

v Defence Material Stores R&D Est

v Federation of Indian Export Organisation

v RDSO (Indian Railways)

v Indian Postal Department

Product portfolio and capacitiesRegular textiles(Installed capacities per annum)

Suiting & Shirting Denim Bottom weights

30 30 15MnMtrs MnMtrs MnMtrs

Terry Towels

12,000Tons

Wider width

Comforters Garments

26

0.3 6.6

MnMtrs

Mn Pcs Mn Pcs

Technical Textiles(Installed capacities per annum)

Technical Textile Fabric

NBC Fabric

Black out Fabric

Fusible Interlining

IRR/MSCN Fabric

Flex Fabric

12

10

2025

5

90

MnMtrs

MnMtrs

MnMtrs

MnMtrs

MnMtrs

Mn Sq. Mtrs

Out of total 8 State-of-the-art manufacturing facilities, 4 units are operational which are located at Malwan (Denim), Aung (Suiting Shirting), Abhaypur (Terry Towel) and RewariBujurg (Technical Textiles). Remaining Unitssuch as Spinning unit at Malwan, Comforter unit at Noida, Garment Unit at Roorkee (Uttarakhand) are non-operational. The Banks have already sold embroidery unit located at Sonepat (Haryana).

8

Mn: Million

6 7

Brand umbrellaThe Company was engaged in the manufacturing of armoured and mine protection vehicles (with 360° protection) through its 100% subsidiary – Shri Lakshmi Defence Solutions Limited (SLDSL). It also had an agreement with Ford India Limited for armouring vehicle on Ford chassis. Besides, SLDSL is registered with the some of India's prominent defence establishments like:

v Directorate General of Supplies & Disposal

v Director General of Quality Assurance

v Ministry of Defence (Navy)

v Defence Material Stores R&D Est

v Federation of Indian Export Organisation

v RDSO (Indian Railways)

v Indian Postal Department

Product portfolio and capacitiesRegular textiles(Installed capacities per annum)

Suiting & Shirting Denim Bottom weights

30 30 15MnMtrs MnMtrs MnMtrs

Terry Towels

12,000Tons

Wider width

Comforters Garments

26

0.3 6.6

MnMtrs

Mn Pcs Mn Pcs

Technical Textiles(Installed capacities per annum)

Technical Textile Fabric

NBC Fabric

Black out Fabric

Fusible Interlining

IRR/MSCN Fabric

Flex Fabric

12

10

2025

5

90

MnMtrs

MnMtrs

MnMtrs

MnMtrs

MnMtrs

Mn Sq. Mtrs

Out of total 8 State-of-the-art manufacturing facilities, 4 units are operational which are located at Malwan (Denim), Aung (Suiting Shirting), Abhaypur (Terry Towel) and RewariBujurg (Technical Textiles). Remaining Unitssuch as Spinning unit at Malwan, Comforter unit at Noida, Garment Unit at Roorkee (Uttarakhand) are non-operational. The Banks have already sold embroidery unit located at Sonepat (Haryana).

8

Mn: Million

6 7

Chairman'sMessage

Dear 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.

Ever since inception, the Company had uninterruptedly served its debt obligations and had a s t eady re l a t i on w i t h bank ing consort iums. However, the prolonged recession in the textile industry, demonetization and rst time levy of GST on fabric, has panicked the investors and it will take some time in settl ing the industry. All these challenges, combined with non disbursement of credit facilities on time for working capital and expansion project, has given a huge setback to the Company’s future plans. The Company could not complete the expansions and faced challenges in serving its day-to-day working capital needs. This all led to turning our accounts as NPA owing to inability of serving the existing huge debt of ` 2,700 crores across our consortium banks comprising at present 15 banks and one ARC.

The Company has clear intentions of ensuring maximum repayment to banks. Hence, we have continued running our plants, though at a lower capacity utilisation of 30% to 40%. Keeping the plant running, will allow us drive better value as compared to closed plant. Moreover, the cost of restarting a closed plant would have involved much higher capital outlay.

We are also looking for potential investors to dispose-off our machineries. However, owing to recession in Textile industry coupled with demonetization and rst time levy of GST in the textile technology, these machineries are not fetching the desired value. Going ahead, we will continue to seek possibilities to liquidate our assets and the debts.

I am thankful to the shareholders, bankers, creditors as well as Auditors for their support for patiently being with us in the tiring times. I would also like to acknowledge our employees for staying put with the Company and giving their best effort. I would continue to seek suppor t o f ou r Board Members and Management Team to relentless pursue the desired objectives with the positive hope of steadying the ship in the years to come.

Warm Regards

Dr. M. P. Agarwal

Nothing much has changed over what we communicated in our last year's report. The business environment continued to remain challenging. However, this phase has made us even more stronger than ever. As a corporate that believes in transparency and stronger governance, did not let its aspirations boil down the turmoil. We continued to make relentless efforts towards achieving a sustainable turnaround.

8 9

Chairman'sMessage

Dear 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.

Ever since inception, the Company had uninterruptedly served its debt obligations and had a s t eady re l a t i on w i t h bank ing consort iums. However, the prolonged recession in the textile industry, demonetization and rst time levy of GST on fabric, has panicked the investors and it will take some time in settl ing the industry. All these challenges, combined with non disbursement of credit facilities on time for working capital and expansion project, has given a huge setback to the Company’s future plans. The Company could not complete the expansions and faced challenges in serving its day-to-day working capital needs. This all led to turning our accounts as NPA owing to inability of serving the existing huge debt of ` 2,700 crores across our consortium banks comprising at present 15 banks and one ARC.

The Company has clear intentions of ensuring maximum repayment to banks. Hence, we have continued running our plants, though at a lower capacity utilisation of 30% to 40%. Keeping the plant running, will allow us drive better value as compared to closed plant. Moreover, the cost of restarting a closed plant would have involved much higher capital outlay.

We are also looking for potential investors to dispose-off our machineries. However, owing to recession in Textile industry coupled with demonetization and rst time levy of GST in the textile technology, these machineries are not fetching the desired value. Going ahead, we will continue to seek possibilities to liquidate our assets and the debts.

I am thankful to the shareholders, bankers, creditors as well as Auditors for their support for patiently being with us in the tiring times. I would also like to acknowledge our employees for staying put with the Company and giving their best effort. I would continue to seek suppor t o f ou r Board Members and Management Team to relentless pursue the desired objectives with the positive hope of steadying the ship in the years to come.

Warm Regards

Dr. M. P. Agarwal

Nothing much has changed over what we communicated in our last year's report. The business environment continued to remain challenging. However, this phase has made us even more stronger than ever. As a corporate that believes in transparency and stronger governance, did not let its aspirations boil down the turmoil. We continued to make relentless efforts towards achieving a sustainable turnaround.

8 9

Profile of Directors

Mrs. Sharda AgarwalPromoter Director

Prof. (Dr.) G. N. MathurNon-Executive Director

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

Dr. M. P. AgarwalChairman & Managing Director

Mr. Pawan AgarwalJoint Managing Director

Mr. Devesh Narain GuptaDeputy 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.

He is Science graduate and has prociency in computer application, fabric processing and technical textiles. He has around 22 years of rich experience and controlling production activities, quality controls and marketing.

He has rich experience of 34 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

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

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

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.

10 11

Profile of Directors

Mrs. Sharda AgarwalPromoter Director

Prof. (Dr.) G. N. MathurNon-Executive Director

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

Dr. M. P. AgarwalChairman & Managing Director

Mr. Pawan AgarwalJoint Managing Director

Mr. Devesh Narain GuptaDeputy 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.

He is Science graduate and has prociency in computer application, fabric processing and technical textiles. He has around 22 years of rich experience and controlling production activities, quality controls and marketing.

He has rich experience of 34 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

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

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

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.

10 11

Important certications

NAME OF CERTIFICATE PURPOSE

GOTS Global Textile System

O.E. 100 & Blended User Health & Safety

REACH Chemical Management

OEKO-TEX 100 Skin Friendly Chemical

SA-8000 Social Accountability

ISO-9001 : 2008 Quality Management System

ISO-14001 : 2004 Environment Management System

OHSAS - 18001 : 2001 Occupational Health & Safety

FAIR TRADE CERTIFICATE Ethic Trade Practices

12

Malwan Unit Quilting Unit, Noida

Abhaypur Unit Garments Unit, Roorkee

Our Units

Our Products

Company Overview Statutory Reports Consolidated Financials Standalone Financials

13

MANAGEMENTDISCUSSION ANDANALYSIS

COMPANY OVERVIEWShri Lakshmi Cotsyn Limited (SLCL) is amongst Northern

India’s largest tex le players. It manufactures co on and

blended fabrics, readymade garments, technical tex les,

embroidered fabric, quilts, fusible interlining, 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 has six state-

of-the-art manufacturing facili es located across India. The

DSIR approved R&D capabili es and its talented design team

delivers innova on and world-class tex le products.

Shri Lakshmi Cotsyn LimitedAnnual Report 2016-17

14

Management Discussion and Analysis

GLOBAL TEXTILE INDUSTRYTex le is an extremely labour-intensive industry. Higher consuming regions like Europe and US have extremely high labour costs and hence the trend of outsourced manufacturing to lower-wage countries is gaining ground, boos ng apparel and tex le trade. Asia is the largest exporter of tex le and apparel with nearly 60% produc on share across the en re value chain as shown in the map below. Major consump on hubs are North America, Europe, China and Japan, which account for 60% of global consump on. 2016 proved more challenging than expected for the Tex le and Clothing (T&C) sector as the world economy failed to break the +3% GDP growth rate. However, with the improving global sen ments from the onset of 2017 has kept the hopes alive. The global apparel and trade market is expected to reach US$ 1,300 bn by 2023. Tex le is an extremely labour-intensive industry. Higher consuming regions like Europe and US have extremely high labour costs and hence the trend of outsourced manufacturing to lower-wage countries is gaining ground, boos ng apparel and tex le trade. Asia is the largest exporter of tex le and apparel with nearly 60% produc on share across the en re value chain as shown in the map below. Major consump on hubs are North America, Europe, China and Japan, which account for 60% of global consump on. 2016 proved more challenging than expected for the Tex le and Clothing (T&C) sector as the world economy failed to break the +3% GDP growth rate. However, with the improving global sen ments from the onset of 2017 has kept the hopes alive. The global apparel and trade market is expected to reach US$ 1,300 bn by 2023.

2003 2008 2013 2018E 2023E

Global apparel Global tex les

Global apparel and tex le trade is witnessing growth

(Source: Source: Technopak, Edelweiss Investment Research *Tex le includes fibres, yarns, fabrics and made-ups)


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Overview

India’s tex les sector is one of the oldest industries in Indian economy da ng back several centuries. The sector is one of the largest contributors to India’s exports, forming around 13% of total exports. The tex les industry is also labour intensive and is one of the largest employers with over 40 mn workers. Currently, India’s tex le exports cons tute 60% of total Tex le and Apparels exports, which are es mated to jump to US$ 60 bn in 2018. While India’s top apparel export partners are US and Europe, its top tex le exports partners are Asian countries, primarily due to high percentage of yarn exports.

INDIANT E X T I L E INDUSTRY

India enjoys several advantages when it comes to tex le and apparel manufacturing compared to compe ng na ons like China, Vietnam, Bangladesh, Ethiopia, Myanmar, Kenya and others. It is the largest producer of co on and the second largest producer of polyester in the world, a er China. Large-scale availability of important tex le fibres has helped the development of downstream manufacturing value chain – yarns, fabrics and garments. Under the ‘Make in India’ campaign, the Government has also put a lot of focus on increasing the skill level of the workforce to not only ensure the quan ty but also the quality of the workforce. The Integrated Skill Development Scheme (ISDS) is a flagship programme of the Ministry of Tex les under which a target to train 15 lakh candidates has been set. Other skill development programmes are Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY), Pradhan Mantri Kaushal Vikas Yojana (PMKVY), Recognized Prior Learning (RPL), etc.Home tex lesAlthough India has been lagging in terms of export of fabrics and general apparel, it has significant advantages in manufacture of co on home tex le. Due to surplus co on availability, the country has a ver cally integrated model in home tex le giving it leadership in the global co on home tex les segment. Favourable government policies and sharpening government focus on moving up the value chain in tex les along with the government's a empts to renego ate trade pacts with various countries will boost home tex les. As such, the Indian home tex le industry is expected to catapult to USD 8.2bn by 2021.Technical tex lesTechnical tex les are tex le materials and products used for their technical performance and func onal proper es. Technical tex les are an important part of the tex le industry and its poten al is s ll largely untapped in India. With the increase in disposable income, the consump on of technical tex les is expected to increase. Based on past trends of growth and es mated end user segment growth, the Working Group on Technical Tex les for 12th Five Year Plan (FYP) projected the market size to reach Rs 1,58,540 crore in 2016-17 at a year-on-year growth rate of 20% during the 12th Five Year Plan.DenimThe denim segment has always reigned as one of the leading segments of the tex le industry. Globally, the denim industry is expected to grow at a CAGR of over 6.5% during 2015 to 2020, with the market value expected to increase from US$113 billion to US$ 153 billion. Despite a slowdown in apparel exports and domes c market growth, the denim market in India is clocking a consistent CAGR of 15% – 18% annually. For a majority of the Indian youth, denim is not just a casual wear, but more of a fashion statement. Almost 85% of the market is dominated by men, with 10% contribu on from the female segment and the kids segment contribu ng about 5% of the market.With almost 35% of sales from the organised sector and 40% from the branded segment, the denim trend is expected to penetrate the market further and register significant growth in the near future.

OPPORTUNITIES

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. Some of the growth drivers include:Young popula on base: India has a strong popula on base with the largest Gen Y popula on in the world, coupled with a growing economy. Around 65 per cent of Indians are under the age of 35 and as this popula on joins the workforce, they will have increased the spending power that will ul mately lead to increased domes c demand for tex le and apparel items. Increasing women workforce: With the increasing awareness and a need for financial dependence, working female popula on is on the rise. This is another major factor boos ng the apparel market in the country.


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Urbanisa on and rurbanisa on: Urbaniza on and rurbanisa on are other important factors shaping the Indian consumer spending habits. Ci zens are migra ng from rural to urban areas in search of job opportuni es and be er ameni es, while steps are also being taken to improve facili es in rural India.

Ballooning middle class popula on: The ballooning middle class is also boos ng Indian consump on pa erns. The number of households with an annual income of more than US $14,000 has increased at a CAGR of 11% since 2005 and is expected to increase at the same rate for the next 10 years. The number of households earning an annual income ranging from US$4,000 – US$7,000 grew from 11 million in 2005 to 55 million in 2016 and is expected to reach around 95 million by 2025.

Change in buying pa ern: Owing to the above factors among many, the buying habits of Indian customers have changed over the years. Increasing brand awareness and penetra on of brands to er-II, er-III and er-IV ci es have largely contributed to a shi in buying pa ern from need-based to aspira onal buying. The current apparel market of India is es mated to be around $63 billion out of the $80 billion domes c T&A market and is expected to grow at a CAGR of 12 per cent for the next 10 years to become $180 billion.

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• 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’s support with favourable policies has been a key ingredient for the growth of this industry. Here are some of the ini a ves:

The scheme has been con nued to 12th Five Year Plan with an investment target of USD 24.8 Bn. Out of this, USD0.39 billion has been allocated for TUFS scheme for FY15.

Scheme for Integrated Tex le Parks (SITP)

• SITP was set up in 2005 to provide necessary infrastructure, produc vity enhancements, product diversifica on and financing arrangements to the new tex le units

• The State Government will provide technical advisory and fund 40% of the project

• Central Government will provide the balance finance along with land acquisi on and infrastructure support

G OV E R N M E N T INITIATIVES

Integrated Skill Development Scheme

This scheme was launched in October 2010 to address the training needs of the tex les workers to meet manpower requirement. It aims to train over 2.7 Mn persons over 5 years with an es mated cost of Rs 19.5 Bn.

Technology Mission of Technical Tex les• The mission aims at addressing infrastructure improvement in terms of tes ng facili es, market development support,

skilled manpower, R&D and defining specifica ons and standards for technical tex les, among others• It also focuses on suppor ng other ac vi es like business start-ups, workshops, social compliances, market development

for ins tu onal and export business and promo ng contract research and development through IITs / TRAs / Tex le Ins tutes


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Focus Market SchemeFocus Market Scheme was introduced in September, 2009 with supplement later in October,2011 in annual supplement to Foreign Trade Policy with a vision to support exporters in compe ng with foreign export market against high freight cost and other externali es. As per the recent development, the tex le exporters would be able to avail duty credit scrip on export to 26 addi onal countries apart from exis ng des na ons. These developments are expected to widen the export markets for tex le exporters and gradually limit the over dependence on select markets.

India is currently the fi h largest spender on defence and accounts for approximately 5% of the global defence expenditure. The defence spending has been growing in recent years and is expected to grow at the rate of 7% to 8% annually over the next five years. The increase in spending also indicates the huge availability of opportuni es for the domes c and global companies in the defence and aerospace sector. Since the launch of ‘Make in India’ ini a ve by the Government of India, Defence Sector in India has seen immense ac vity, evincing interest from Indian private industry as well Foreign OEMs. While the Indian industry has steadily moved towards capacity building, Foreign OEMs have shown never seen before enthusiasm

to par cipate in ‘Make in India’ in Defence. Indian defence industry has now developed the competence, capability and capacity to produce sub-systems which could be integrated into larger pla orms. Indian industry offers very high level of engineering and technology skills in all areas of defence and aerospace.

• Promoter experience in the industry• 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• Diversified product por olio with niche product 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

INDIAN DEFENCE SECTOR

SLCL’S COMPETITIVENESS

Weakness• Unfavourable raw material prices• Inconsistent mix of domes c and export revenues• High leverageOpportunity• Capture poten al markets across tex le and defence segments through 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 from China, Pakistan and Turkey in respect of Home tex le and Technical Tex le products• Fluctua ng raw material prices


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FINANCIAL REVIEWAccounts 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. The table given below shows a compara ve analysis of key financial figures: (Amount in ` Crore)

Par culars 2016-17 2015-16Revenue from opera ons 305.22 412.12Exports sales 40.08 180.15EBIDTA (24.90) 18.82PBT (271.75) (144.09)PAT (271.75) (144.09)Fixed assets 1,485.61 1,574.17Other current assets 124.49 124.45

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

RESEARCH & DEVELOPMENT

Our in-house R&D con nues to develop innova ve products, providing cost and product leadership. The dedicated R&D team ensures constant product innova on that fetches higher realisa ons in the market. The R&D has been recognised by Department of Science and Industrial Research, Ministry of Science and Technology. The Government of India has further recognised the Company as a centre for skill upgrada on of Industrial workers. The Company has developed nanotechnology fabrics and smart tex les with sensor technology to monitor fa gue, stress, heart condi on, blood pressure etc. Besides, it has also developed unique products across technical tex les, which include high al tude fabric, PU-Coated nylon fabrics, flex fabrics, carbon fabrics, IRR fabrics and membrane laminated fabrics for rain & extreme cold weather ECW Clothing.

HUMAN RESOURCES & INDUSTRIAL RELATIONS

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 performance management 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 MANAGEMENTThe Company’s risk management framework iden fies the following poten al risks:

• Unfavourable industry slowdown and increasing 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 cusotmers

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


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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 RESPONSIBILITIES

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. The collabora ve spirit across all sec ons of employees has resulted in significant enhancement in quality and produc vity. 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. While maintaining a record free from accidents and disasters, we assure the safety of employees and local communi es. We make con nuous efforts to improve our standards of safety health management. We regularly conduct educa onal ac vi es that raise awareness about safety and health.

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• Developed 30 acres of land for organic product development• In-house Chemical auxiliary unit and 16 MW rice-husks based cap ve co-genera on power plants, resul ng in op mum

resource u lisa on


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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.

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


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Dear Shareholders,Your Directors have the pleasure in presen ng the 29th Annual Report along with the Audited financial statements of the Company for the financial year ended on 31st March, 2017:

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

Par culars 2016-17Stand Alone

2015-16Stand Alone

2016-17Consolidated

2015-16Consolidated

Sales and other income 309.32 415.38 315.93 452.09

Opera ng profit before interest, deprecia on and tax (24.90) 18.82 (24.85) 11.39Less: Interest and other financial charges 2.68 2.95 2.68 2.95Deprecia on 88.67 94.85 89.51 95.69Extraordinary items - - - -Excep onal Items (155.49) (65.11) (149.37) (63.86)Profit/ Loss before tax (271.74) (144.09) (266.42) (151.11)Less: Income Tax (including deferred tax) - - - -Profit/ Loss a er tax (271.74) (144.09) (266.42) (151.11)Proposed dividend - - - -Dividend tax - - - -Balance carried to balance sheet (271.74) (144.09) (266.42) (151.11)

PERFORMANCE

Performance Highlights - Stand-alone :

Your Directors wish to inform you that during the year 2016-17, Company faced lot of problems on account of financial stress hence opera ons of the units were restricted between 30% to 40% of its installed capacity.

During 2016-17, the Company recorded sales and other income at ` 309.32 crores as compared to ` 415.38 crores in 2015-16. The loss (before/a er tax) has been increased to ` (271.74) crores in 2016-17 as compared to ` (144.09) crores in 2015-16 due to less capacity u liza on and incurring fixed expenses.

Performance Highlights - Consolidated :

During 2016-17, the Company recorded sales and other income at ` 315.93 crores as compared to ` 452.09 in 2015-16. The loss has been increased to ` (266.42) crores in 2016-17 as compared to ` (151.11) crores in 2015-16. The profit/loss (before/a er tax) was ` (266.42) crores being no tax expense in 2016-17 as compared to ` (151.11) in 2015-16.

JOB WORK

A bulk of the ac vity in quan ta ve terms, relates to job-work on behalf of other par es. Revenue from job-work comprises 40% (approx.) of total income in different units, even though in quan ta ve terms it is 65-75% (approx.) of total work.

As reported in the last Annual Report, the company is s ll in stringent working capital situa on and unable to source yarn for its own produc on. Hence during the year, company has earned a major por on of its revenue from jobwork. The world

Board's Report


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Board's Report

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 func oning of units of the Company:

At present, our Malwan unit, Abhaypur unit and Aung unit con nue to be opera onal at a low / sub-op mal capacity and are working par ally due to shortage of working capital though company is making full efforts to increase the capacity u liza on by undertaking job work. S ll, bo om line of the company is not improving inspite of the increase in capacity u liza on as job works are being done on cost to cost basis. No doubt this helps to save the fixed cost.

In Aung and Abhaypur units, a bulk of the produc on relates to job-work for other par es. Produc on in ‘Rewari Bujurg’ unit was expected to improve as lot of par es were approaching but we could not run the unit on regular basis due to lack of Infrastructure and Working Capital.

The adver sement was published in various newspapers for sale of 4 numbers of our non-opera onal units situated at Sonepat (Embroidery), Roorkee (Garment), Aung (Sui ng, Shir ng, Interlining) and Malwan (Spinning). Out of the 4 units, Aung and Sonepat Unit has been sold by the Bank but no response is received ll date from any party to purchase the other 2 units. We are also trying to iden fy the purchaser, who can purchase the units but due to recession in the Tex le industry / property market, people are not forthcoming for purchase of these assets.

PRESENT STATUS OF THE COMPANY AT NCLT :

The Company was registered under the Board for Industrial and Financial Reconstruc on in terms of the provisions of sec on 15(1) of Sick Industrial Companies (Special Provisions) Act 1985 vide registra on number 45/2014 and the reference of the Company before BIFR has been abated in accordance with third proviso of Sec on 15(1) of SICA w.e.f. 30.11.2016.

UCO Bank had filed a winding up pe on under sec on 433, 434 and 439 of the Companies Act, 1956 before the honorable High Court at Allahabad which has been now transferred to the Na onal Company Law Tribunal-Allahabad for considera on. But the Company has objected on the ground that UCO Bank should be directed to file the pe ons under the procedure and compliance with sec ons 7, 8 or 9 of the Insolvency and Bankruptcy Code, 2016. NCLT has asked explana on from UCO Bank on this point.

WINDING UP PETITION AGAINST M/S SHRI LAKSHMI COTSYN LTD.:

Due to the abatement of BIFR, few cases of Winding up filed by the following par es with the Allahabad High Court are revived now and the Company is contes ng :

1- Ketan Kan lal Shah (FCCB Bond Holder) amount ` 2.8 million.

2- Soil & Environment Industries Pvt. Ltd. ` 9.34 lacs

PETITION BEFORE DEBT RECOVERY TRIBUNAL (DRT) AGAINST M/S SHRI LAKSHMI COTSYN LTD.:

Following par es have filed the case against the Company before DRT Allahabad & New Delhi which the Company is contes ng:

1. Central Bank of India on behalf of consor um member banks has filed a recovery suit at DRT Delhi for an amount of ` 3904.47 crores

2. IFCI Ltd. Recovery Suit for an amount of ` 9.91 crore at DRT, New Delhi.

3. UCO Bank has also filed recovery suit at DRT Allahabad.

4. Edelweiss ARC has also filed a recovery suit at DRT allahabad.

EXPORTS

Despite all adverse situa ons, the Company recorded an export of ` 40.08 crores in 2016-17 as against ` 180.15 crores in 2015-16 on Stand-alone as well as Consolidated basis.

RECOGNITIONS

The company is registered with the following organisa ons:1. Director General of Quality Assurance (DGQA)


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2. Director General of Suppliers & Disposals (DGS&D)

3. Ordnance Board Group of Factories.

4. D.M.S.R.D.E.

5. Office of the Tex le Commissioner as a Composite Mill.

6. Bureau of Indian Standards (BIS)

7. Department of Industrial Development, Ministry of Industry.

Company is duly registered with Export Promo onal Council and possess valid Import Export code and RCMC issued by Federa on of Indian Export Organisa on.

Further based upon past performance of exports, Company is also registered with Ministry of Commerce and Industry as STAR EXPORT HOUSE.

WHOLLY-OWNED SUBSIDIARY COMPANIES

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

M/s 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. The Company is s ll making efforts to find out some investor to run its defence business.

However, during the year 2016-17, the Company recorded sales (from trading ac vi es) and other income of ` 430.49 Lacs as compared with ` 9.97 Lacs in 2015-16. Due to the Closure of factory, the Company has incurred running expenses net loss of ` (56.58) Lacs in 2016-17 as compared to a net loss of ` (94.55) Lacs in 2015-16.

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, and UAE. It is engaged in trading of 100% Polyester fabric material, garments and alike products and also expor ng to other countries, besides trading in Sharjah itself.

M/s SLCL Overseas FZC, Sharjah U.A.E., a wholly-owned subsidiary, recorded a turnover of ` 230.43 Lacs in 2016-17 as compared with ` 3660.71 Lacs in 2015-16. During the year, the Company has suffered a loss of ` (24.18) Lacs in comparison with a loss of ` (1,243.51) Lacs in the previous year.

M/s Synergy Global Home Inc.

M/s Synergy Global Home Inc., is a wholly-owned subsidiary and was incorporated at U.S.A.; which deals in trading of home furnishing items.

During the year, M/s Synergy Global Home Inc. has not done any business as in the previous year in 2015-16, therefore there is no turnover or profit in the year 2016-17. However, the company, suffered a loss of ` 0.03 lacs in 2015-16.

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.

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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, there was no change in Directors and Key Managerial Personnel of the Company.

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

A declara on by an Independent Director(s) that he/ they meet 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 2016-17, Five mee ngs of Board of Directors were held. The mee ngs were held on 30th May 2016, 12th August 2016, 31st August 2016, 14th November 2016 and 13th February 2017. 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.

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.

All Related Party Transac ons are placed before the Audit Commi ee as also the Board for approval. Prior omnibus approval of the Audit Commi ee is obtained on a quarterly basis for the transac ons which are of a foreseen and repe ve nature. None of the Directors has any pecuniary rela onships or transac ons vis-a-vis the Company.

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.

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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 2016-17, the Company has not issued any equity shares, so there has been no change in share capital.

DIVIDEND

Since the Company and its subsidiaries have incurred the loss, your Directors have not recommended any dividend for the year ended on 31st March, 2017.

AUDITORS

Statutory Auditors:

M/s Pradeep & Associates, Chartered Accountants, Auditors of the Company, re re at the conclusion of the ensuing Annual General Mee ng on comple on of the maximum term permi ed under the Sec on 139 of the Companies Act 2013. The observa ons of Auditors in their report read with notes to the accounts are self-explanatory and do not call for further explana on.

Pursuant to the provisions of sec on 139 of the Companies Act 2013 read with the Rules made thereunder, it is mandatory to rotate the statutory auditors on comple on of the maximum term permi ed under the said sec on. The Audit Commi ee of the Company has proposed and on 30th May 2017, the Board of Directors of the Company has recommended the appointment of M/s Tandon & Tandon, Chartered Accountants, 9/81 Arya Nagar, Kanpur-02 ( Firm registra on number 002070C) as the Statutory Auditors of the Company. M/s Tandon & Tandon will hold office for a period of five consecu ve years from the conclusion of the 29th Annual General Mee ng of the Company scheduled to be held on 26th September 2017, ll the conclusion of 34th Annual General mee ng to be held in the year 2022 subject to the approval of the shareholders of the Company.

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

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 Ms. Pallavi Agarwal, Company Secretary in Prac ce, (C. P. No. 13448) 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.

Board's Report


26

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 MANAGEMENT DISCUSSION & ANALYSIS REPORTS FOR THE YEAR 2016-17:

The Corporate Governance and Management Discussion & Analysis Report, which form an integral part of this Report, forms part of this Report and is annexed in the Annual Report, together with the 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 can mail 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. 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.

(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.

Board's Report


27

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. However, the Company me to me undertakes several ini a ves towards the welfare of employees, society, environment etc.

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 2016-17 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 31.03.2017 As on 31.03.2016

1. Dr. M.P. Agarwal 200000 400000 Nil 16.66:12. Mr. Pawan Kumar Agarwal 125000 250000 Nil 10.42:13 Mr. Devesh Narain Gupta 200000 200000 Nil 16.67:14 Mrs. Sharda Agarwal 62500 125000 Nil 5.21 :15 Dr. GN Mathur 0 0 Nil -6 Prof. Dr. R.K Trivedi 0 0 Nil -7 Mr. Rakesh Kumar Srivastava 130000 130000 Nil 10.83:1

(ii) Percentage increase in the median remunera on of employees in the financial year: 5.16%

(iii) Number of permanent employees on the rolls of company: 3158

(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:

Average percentage increase in the salaries of employees other than KMPs for Financial Year 2016-17 was 5.75 % 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.

Board's Report


28

Informa on as per Rule 5(2) of the 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

197053 Diploma in IIHT, Exp. 23 Years

19/07/2010 44 Nahar Industrial Enterprises Ltd, Sr. Manager (Dyeing)

2 SANDEEP VASHIST Sr. Vice President

175000 P G Diploma in Tex le Designing, Exp. - 25 Years

15/12/2016 52 Om Sacc India, Head Interna onal Marke ng

3 R SURENTHER KUMAR

Dy. General Manager

150000 M.Tech-Tex le Engg. - IIT Delhi, Exp. 13 Years

01/05/2012 36 Vallabh Tex le Cp Ltd, Dy. Manager

4 SUBHASH CHAND JAIN

VP (Finance) 150000 M.Sc (Phy.), Exp. 44 Years

07/12/2010 67 Shamken Spinners Ltd, DY. GM

5 RAKESH SETHI Vice President 125000 M.Sc, Ph. D(Chemistry), Exp. 10 Years

30/01/2012 37 Trident Industries,R&D Head,

6 B.R.GARG Director Technical

120000 B.Text, Exp. 50 Years

28/09/2007 74 Sutlej Industries Bhilad, Sr.Vice President

7 RAJEEV ANAND General Manager

112116 B.Sc, Exp. 26 Years

11/04/2015 48 OSIL Home Furnishing Products Panipat, General Manager Produc on

8 CHANDAN SINGH BANOULA

Assistant Vice President

105999 BA, Diploma in Tex le Techonogy, Exp. 23 Years

08/12/2015 47 Northern Tex le Mill, Technical Manager

9 LAVANYA VASHIST Manager 100000 Structural Engineering, Gurgaon, Exp. Nil

15/12/2016 23 N/A

10 SANJAY PANDEY DGM - Marke ng

100,000 MBA,Exp. 14 Years

06/10/2016 38 Kushbu Vinyl Pvt Ltd. (DGM Sales )

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 ` 1.02 crores or above per annum if employed throughout the financial year or ̀ 8.50 Lacs per month if employed for any part of the year and posted in India: NIL

Board's Report


29

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 mely 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.

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

For and on behalf of the Board Registered office : 19/X-1, Krishna Puram Sd/- Sd/-G.T. Road, Kanpur Dr. M. P. Agarwal Devesh Narain GuptaDate : 11th August, 2017 Chairman and Managing Director Deputy Managing Director


30

Annexure 'A' to Board's Report

FORM NO. MR-3SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED MARCH 31, 2017[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]

ToThe MembersShri Lakshmi Cotsyn Limited19/X-1 Krishnapuram, 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 there on.

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 myopinion, the Company has, during the audit period covering the financial year ended on 31st March, 2017 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, 2017 according to the provisions of:

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

2. The Securi es Contracts (Regula on) Act, 1956 (‘SCRA’) and th erules made there under;

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

4. Foreign Exchange Management Act, 1999 and the rules and regula ons madethereunderto 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 28thOctober, 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 (Buy back of Securi es) Regula ons, 1998.

I have also examined compliance with the applicable clausesof 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.


31


During the period under review, the Company has complied with the provisions of the Act, Rules, Regula ons, Guidelines, 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 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 part of Corporate Governance Report was signed by only Chairman and Managing Director of the Company;

5. During the year under review, the Company has not complied with the Regula on of 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;

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

2. The Company was registered under the Board for Industrial and Financial Reconstruc on in terms of the provisions of sec on 15(1) of Sick Industrial Companies (Special Provisions) Act 1985 vide registra on number 45/2014 and the reference of the Company before BIFR has been abated in accordance with third proviso of Sec on 15(1) of SICA w.e.f. 30.11.2016.

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. Due to the abatement of BIFR, few cases of Winding up filed by the following par es with the Allahabad High Court are revived now and the Company is contes ng:

1) Ketan Kan lal Shah (FCCB Bond Holder) amount ` 2.8 million.

2) Soil & Environment Industries Pvt. Ltd. ` 9.34 lacs

5. Following par es have filed the pe on against the Company before Debt Recovery Tribunal Allahabad & New Delhi:

1. Central Bank of India on behalf of consor um member banks has filed a recovery suit at DRT Delhi for an amount of ` 3904.47 crores

2. IFCI Ltd. has filed a Recovery Suit for an amount of ` 9.91 crore at DRT, New Delhi.

3. UCO Bank has also filed recovery suit at DRT Allahabad.

4. Edelweiss ARC has also filed a recovery suit at DRT Allahabad.


32


6. As informed by the Management, UCO Bank had filed a winding up pe on under sec on 433, 434 and 439 of the Companies Act, 1956 before the honorable High Court at Allahabad which has been now transferred to the Na onal Company Law Tribunal-Allahabad for considera on. But the UCO Bank has been directed to file the pe ons under the procedure and compliance with sec ons 7, 8 or 9 of the Insolvency and Bankruptcy Code, 2016.

7. The certain undisputed amounts payable in respect of provident fund, employees state insurance, income tax and cess were in arrears as at 31 March, 2017 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 902.502. Contribu on to Employee State Insurance 9.61

Sd/-Pallavi Agarwal

Date: 11-08-2017 [Prac sing Company Secretary]Place: New Delhi CP No. 13448

(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)

ToThe MembersShri Lakshmi Cotsyn Limited19/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/-Pallavi Agarwal

Date: 11-08-2017 [Prac sing Company Secretary]Place: New Delhi CP No. 13448


33

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:

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

1) 8 MW bio-mass cap ve co-genera on power plant had been set up at Abhaypur for reliable cap ve supply;

2) 7 MW Bio Mass based cap ve power plant had been commissioned at Malwan.

3) Undergoing to install zero liquid discharge (ZLD) system in compliance of the norms prescribed by Central/U.P. Pollu on Control Board.

4) In-house Chemical auxiliary unit, resul ng in op mum resource u liza on.

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

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.

Annexure 'B' to Board's Report


34

It has a strong R&D cell comprising of about 20 ac ve members and constant R & D pursuits keep going on towards development of be er products, cost reduc ons and be er u liza on of waste products.

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.

Other Regular Benefits derived as a result of above efforts:

(i) The development of several new products and line developments:

(ii) Product quality improvement and be er stability.

(iii) Increased use of alterna ve fuels

(iv) Cost reduc on in an infla onary scenario.

(v) Reduc on in specific energy consump on.

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

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

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

Sl. No. Foreign exchange earnings and outgo 2016-17 2015-16

i) Total earnings of foreign exchange 3,954.49 13,252.35ii) Total outgo in foreign exchange 287.71 432.85

For and on behalf of the Board

Sd/- Sd/-Place : Kanpur Dr. M. P. Agarwal Devesh Narain GuptaDate : 11th August, 2017 Chairman and Managing Director Deputy Managing Director

Annexure 'B' to Board's Report


35

FORM NO. MGT-9EXTRACT OF ANNUAL RETURN

as on the financial year ended on 31.03.2017[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 - 208 007, U.P.

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 CentreBarakhamba Lane, New Delhi - 110 001Ph. No. : (011) 2341 4629, 2341 4503

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 13Group 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)

Annexure 'C' to Board's Report


36

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. 6626331 22100 6648431 23.35 6804709 21100 6825809 23.97 0.62

b) Individuals

i) Individual shareholders holding nominal share capital upto ` 2 Lakh

3684989 299216 3984205 13.99 4519478 321016 4840494 17.00 3.01



37

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

ii) Individual shareholders holding nominal share capital in excess of ` 2 Lakh

2309414 70000 2379414 8.36 1252628 50000 1302628 4.58 -3.78

Others (Foreign bodies corporate, NRI, HUF, Clearing members)

814710 1570800 2385510 8.38 858629 1570000 2428629 8.53 0.15

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 1962116 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 are pledged with Cent bank Financial Services Ltd. and IFCI. (ii) Shareholding of Promoters

Sl.No.

Shareholder’s Name Shareholding at the beginning of the year

Shareholding at the end of the year

% change in shareholding during the year

No. 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 beginning of the year

For each of the Top 10 shareholders Share holding atthe 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 2.594. Shri Ganpa Muli -Fab Pvt. Ltd. 713280 2.51 Shri Ganpa Muli -Fab Pvt. Ltd. 713280 2.515. 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



38

Sl. No.

List of Top 10 shareholders Shareholding at the beginning of the year

For each of the Top 10 shareholders Share holding atthe end of the year

No of shares % of total shares of the Company

No. of shares % of total shares of the Company

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 1.5810. Boon General Trading Pte Ltd. 450000 1.58 Boon General Trading Pte Ltd. 450000 1.58

(iv) Shareholding of Directors and Key Managerial Personnel :

Sl. No.

For Each of the Directorsand KMP

Shareholding at the beginning of the year

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





39

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

TotalIndebtedness

Indebtedness at the beginning of the financial year(i) Principal Amount 2,718.05 0.19 62.44 2,780.68(ii) Interest due but not paid 532.83 - 21.79 554.62(iii) Interest accrued but not due - - - -Total (i+ii+iii) 3,250.88 0.19 84.23 3,335.30Change to Indebtedness during the financial year• Addi on - 1.41 - 1.41• Reduc on 13.53 - - 13.53Net Change (13.53) 1.41 - (12.12)Indebtedness at the end 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



40

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 2016-17

considered)

Key Managerial Personnel

Mr. M. P. Agarwal

(MD)

Mr. Pawan Kurmar Agarwal

Mr. Devesh Narain Gupta

Smt. ShardhaAgarwal Company

Secretary Rakesh Kumar

Srivastava1. Gross Salary

(a) Salary as per provisions contained in Sec on 17(1) of the Income Tax Act, 1961

25.04 15.85 24.00 7.69 72.58 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) 25.04 15.85 24.00 7.69 72.58 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. Trivedi1. Independent Directors

• Fee for a ending board commi ee mee ngs – – –• Commission – – –• Others, please specify – – –

2. Other Non-Execu ve Directors – – –Total – – –

VII. PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES

The legal ac ons were ini ated by Central Bank of India as consor um leader on behalf of Lender Banks against the Company, its Promoters Directors and Guarantors for recovery of their dues to the tune of ` 3904 crores approx. under SARFAESI and RDDB Act and all such suits are pending before the various judicial forums. The Company is contes ng the same before Hon’ble Courts. However there were no penal es, punishment or compounding of offences during the year ended March 31, 2017. The Company had also received the Show Cause No ce from SEBI in the previous year and reply of which was also duly submi ed. For and on behalf of the Board Sd/- Sd/-Place : Kanpur Dr. M. P. Agarwal Devesh Narain GuptaDate : 11th August, 2017 Chairman and Managing Director Deputy Managing Director



41

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

COMPANY’S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCEThe 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 DIRECTORSDuring the year 2016-17, 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 2017, the Board comprised of 6 Directors.NUMBER OF BOARD MEETINGS HELD AND THE DATES THEREOFDuring the year 2016-17, 5 mee ngs of Board of Directors were held. The mee ngs were held on 30th May 2016, 12th August 2016, 31st August 2016, 14th November 2016 and 13th February 2017. 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

5 Yes 4 NIL 3

Mr. Pawan Agarwal(Joint Managing Director)

Promoter Execu ve Director

5 Yes 3 NIL NIL

Mr. Devesh Narain Gupta (Deputy Managing Director)

Execu ve Director

5 Yes 3 3 NIL

Mrs. Sharda Agarwal Promoter Execu ve Director

5 Yes 2 NIL NIL

Dr. G N Mathur Non-Execu ve Independent

Director

- No 3 NIL NIL

Prof. Dr. Rakesh Kumar Trivedi

Non-Execu ve Independent

Director

4 Yes - NIL 3

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.

Report on Corporate Governance


42


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 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;


43

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 Directors and Prof. Dr. Rakesh Kumar Trivedi being Non-Execu ve-Independent Director. The Audit Commi ee is chaired by Mr. Devesh Narain Gupta. The Company Secretary acts as the Secretary to the Audit Commi ee. Mr. Pradeep Gupta, M/s Pradeep & Associates, Statutory Auditors for the year 2016-17, 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 2016, 12th August 2016, 14th November 2016 and 13th February 2017.

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

Sl. No. Name A ended1 Mr. Devesh Narain Gupta 42 Dr Mata Prasad Agarwal 43 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 Directors and Prof. Dr. Rakesh Kumar Trivedi being Non-Execu ve-Independent Director. The Commi ee is chaired by Mr. Devesh Narain Gupta. During 2016-17, the mee ng of the Remunera on Commi ee was held on 12th August 2016.



44

Details of remunera on paid to all the Directors for the year ended on 31st March, 2017 :

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

Details of remunera on paid for the year ended 31st March, 2017 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.)(2016-17)*

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.) (2015-16)*

Stock, op on with details, if any, and whether issu -ed

at discount as well as the period over

which accrued and over which

exercisableDr M.P. Agarwal Managing Director 25.04 NIL 30.97

Mr Pawan Kumar Agarwal Joint Managing Director

15.85 NIL 19.16 Presently the Company does

not have any stock op on scheme

Mr Devesh Narain Gupta Dy. Managing Director

24.00 NIL 24.00

Smt. Sharda Agarwal Execu ve Director 7.69 NIL 9.39

*Actual payments considered

b) Non-Execu ve Directors

During 2016-17, 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 6 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 ended1 Dr M P Agarwal 62 Shri Pawan Kumar Agarwal 63 Shri Devesh Narain Gupta 6

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

As on 31st March 2017, 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 Mr. Devesh Narain Gupta during the year 2016-17. The Company Secretary acts as the Secretary of the Commi ee. During the year four Shareholders’/ Investors’ Grievance Commi ee Mee ngs were held on 30th May 2016, 12th August 2016, 14th November 2016 and 13th February 2017.



45

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 and the corporate head-quarter 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

WHISTLE BLOWER POLICY

Pursuant to Sec on 177(9) of the Companies Act, 2013 and Regula on 22 of SEBI (LODR) 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, 2014 July 31 ,2014 11:30 a.m. Thursday 19/X-1, Krishnapuram, G.T. Road, Kanpur

1

March 31, 2015 September 30, 2015

11:30 a.m. Wednesday 19/X-1, Krishnapuram, G.T. Road, Kanpur

4

March 31, 2016 September 30, 2016

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

5

EXTRA-ORDINARY GENERAL MEETINGS

During the year 2016-17, no Extra-Ordinary General Mee ng of the Company was held.



46

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 LODR Regula ons during the year except the compliance of proper cons tu on of the Board and Commi ees.

MEANS OF COMMUNICATION

As per Regula on 46 of SEBI LODR 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. Business Standard (English and Hindi edi on) and are also displayed on the website of the Company.

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

SHARE HOLDING PATTERN FOR THE QUARTER ENDED MARCH 31, 2017

Category Number of shares held Percentage of share holding(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 6.12Foreign Venture Capital Investors - -Foreign/Financial Ins tu ons/Banks - -Sub-total (B)(1) 1892246 6.65



47

Category Number of shares held Percentage of share holding(2) Others

- Domes c companies 6825809 23.97- Individuals 6143122 21.58- HUF 340795 1.20- NRI’s 141024 0.50- Clearing members 0 0- Trust 0 0- Foreign Corporate bodies 1946810 6.84

Sub-total (B) (2) 15397560 54.08Total Public Shareholding (B)= (B)(1)+(B)(2) 17289806 60.73Grand total (A)+(B) 28470645 100.00

Distribu on of share holding as on 31st March 2017:

ShareholdingNo. of shareholders No. of shares

Number % to Total Number % to TotalUpto - 5000 7278 78.706 11298840 3.9695001 - 10000 849 9.181 7014740 2.464

10001 - 20000 448 4.845 6926840 2.433 20001 - 30000 179 1.936 4556200 1.60030001 - 40000 75 0.811 2721390 0.95640001 - 50000 80 0.865 3791540 1.332

50001 - 100000 145 1.568 10856270 3.813100001 and above 193 2.087 237540630 83.434

Total 9247 100.000 284706450 100.000

Stock market price data for the year 2016-2017 at BSE SENSEX :

Since the equity shares of the Company are suspended for trading for the year 2016-17, the respec ve stock exchanges have not shown the stock prices at their websites.

GENERAL SHARE HOLDER INFORMATION

29th Annual General Mee ng (for the year ended March 31st, 2017)

Day : Tuesday

Date : 26th September 2017

Time : 11:30 am

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

Accoun ng calendar years For the year 2016-17, the interim and final results were announced on: a. 1st quarter results - Second week of August 2016b. 2nd quarter results - Second week of November 2016c. 3rd quarter results - Second week of February 2017d. 4th quarter & Annual results -Last week of May 2017

Date of book closure Wednesday, 20th September 2017 to Tuesday, 26th September 2017 (both days inclusive).



48

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-110033Ph. no.:+91 11-42390909, Fax:+91 11-27215530Email: [email protected]; [email protected]

Address for correspondence 19/X-1, Krishnapuram, G.T. Road, Kanpur-7 (U.P.)Ph. no.:+91 512-2401492, 2402733, 2404181Fax no.: +91 512-2402339E-mail: [email protected]: 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 B01016As on March 31, 2017, 93.11 % 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).

DECLARATIONPursuant to the provisions of SEBI LODR 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 2016 -17.

Date : 11th August, 2017 Dr. M. P. AgarwalPlace : Kanpur Chairman and Managing Director



49

CERTIFICATE REGARDING COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE

ToThe MembersM/s Shri Lakshmi Cotsyn Limited19/X-1, Krishna Puram, G.T. Road, KanpurWe have examined the compliance of condi ons of Corporate Governance by M/s Shri Lakshmi Cotsyn Limited for the year ended on 31st March, 2017 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 2016-17, 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 PRADEEP & ASSOCIATES Chartered Accountants

Firm Registra on No. 001254C P. K. GuptaDate: 11.08.2017 PartnerPlace: Kanpur Membership No. 70492



50


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, 2017 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. AgarwalDated: 11.08.2017 Chairman & Managing Director


51

Statement regarding Subsidiary Companies

FORM AOC-1Statement containining salient features of the Financial Statements of Subsidiaries Companies

(` in Lacs)Name of the Subsidiary Companies Shri Lakshmi Defence

Solu ons LimitedSLCL Overseas, FZC, U.A.E. Synergy Global Home

Inc. N.Y., U.S.A.Repor ng period for the subsidiary concerned

31.03.2017 31.03.2017 31.03.2017

Repor ng Currency & Exchange rate as on the last date of the relevant financial year in the case of foreign subsidiaries

AED 1 = INR 17.65 USD 1 = INR 64.81

Share Capital 1000.00 20.00 1.69Reserves & Surplus 70.80 8836.02 (400.93)Total Assets 3746.76 10753.96 652.85Total Liabili es 3746.76 10753.96 652.85Investments (except investment in Subsidiary)

52.00 5297.60 Nil

Turnover 405.89 230.43 NilProfit before Taxa on (56.58) (24.18) NilProvision for Taxa on Nil Nil NilProfit a er Taxa on (56.58) (24.18) NilProposed Dividend Nil Nil NilPercentage of shareholding 99.50% 100% 100%

For and on behalf of the Board of Directors

Dr. M. P. Agarwal Devesh Narain Gupta Chairman cum Managing Director Dy. Managing Director

Place : Kanpur Vivek Saxena Rakesh Kumar SrivastavaDate : 30.05.2017 Accounts Head Company Secretary cum Finance Controller


52

Consolidated Independent Auditors Report

To The Members ofShri Lakshmi Cotsyn Limited REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS1. 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, 2017, 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 STATEMENTS2. 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 Consolidated financial 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 133 of 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 RESPONSIBILITY3. Our responsibility is to express an opinion on these Consolidated 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 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 to obtain 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. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. 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 a true and 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. We believe that the audit evidence obtained by 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 opinion on the consolidated financial statements.

OPINION8. In our opinion and to the best of our informa on and according to the explana ons given to us, the aforesaid Consolidated

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 Group as at 31st March, 2017, and its loss (including other comprehensive income), its cash flow and changes in equity for the year ended on that date.


53

Consolidated Independent Auditors Report

OTHER MATTERS9. 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 ` 114.07 Cr. as at 31st March, 2017 total revenues of ` 2.30 Cr. and loss of ` 0.24 Cr. 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 whose reports have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries and 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 subsidiaries is based solely on the reports of the other auditors.

Our opinion on the consolidated financial statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above ma ers with respect to our reliance on the work done and the reports of the other auditors.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS10. 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, 2017 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 PRADEEP & ASSOCIATESChartered Accountants

Firm Registra on No. 001254CPradeep Kumar Gupta

Place : Kanpur Partner Date : 30.05.2017 Membership No. 070492


54

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 2017.

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 2017 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.


55

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 2017, 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 PRADEEP & ASSOCIATESChartered Accountants

Firm Registra on No. 001254CPradeep Kumar Gupta

Place : Kanpur Partner Date : 30.05.2017 Membership No. 070492


56

See accompanying notes forming part of the financial statements

In terms of our report a ached

For PRADEEP & ASSOCIATES For and on behalf of the Board of DirectorsChartered AccountantsFRN No. 001254CP. K. Gupta Dr. M. P. Agarwal Devesh Narain GuptaPartner Chairman and Managing Director Dy. Managing DirectorMembership No. : 070492Place : Kanpur Vivek Saxena Rakesh Kumar SrivastavaDate : 30.05.2017 Accounts Head Company Secretary cum Finance Controller

Consolidated Balance Sheet as at 31st March, 2017

Note As at 31st March, 2017

As at 31st March, 2016

A. EQUITY AND LIABILITIES1. Shareholders' Funds

(a) Share capital 1 2,847.06 2,847.06 (b) Reserves and Surplus 2 (164,612.16) (137,478.82)(C) Minority Interest 3 5.35 5.64

2. Share applica on money pending allotment 6,843.04 6,843.04 3. Non-Current Liabili es

(a) Long-term borrowings 4 240,661.48 241,085.55 (b) Deferred tax liabili es (net) 109.10 109.10 (c) Other long-term liabili es - - (d) Long-term provisions 5 999.04 799.42

4. Current Liabili es(a) Short-term borrowings 6 93,753.13 94,867.09 (b) Trade payables 7 5,865.97 5,131.08 (c) Other current liabili es 8 2,482.38 1,928.30 (d) Short-term provisions 9 26.28 26.61

188,980.67 216,164.07 B. ASSETS1. Non-Current Assets

(a) Fixed assets(i) Tangible assets 10 149,511.17 158,451.26 (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 2,714.94 2,475.88

2. Current Assets(a) Inventories 14 5,134.76 7,135.07 (b) Trade receivables 15 11,316.71 27,717.99 (c) Cash and cash equivalents 16 254.90 317.39 (c) Short term loans and advances 17 14.43 44.85 (d) Other current assets 18 12,468.94 12,456.81

188,980.67 216,164.07

(` in Lacs)


57

Consolidated Statement of Profit & Loss Account for the year ended 31st March, 2017

Note For the year ended31st March, 2017

For the year ended31st March, 2016

A CONTINUING OPERATIONS1 Revenue from opera ons 19 31,158.71 44,875.95

31,158.71 44,875.95 2 Other income 20 434.40 332.81 3 Total revenue (1+2) 31,593.11 45,208.76 4 EXPENSES

(a) Cost of materials consumed Purchases of stock-in-trade 21 20,037.28 28,652.31 (b) Changes in inventories of finished goods, work-in-process and stock-in-trade

22 1,474.68 1,009.01

(b) Employee benefits expense 23 5,155.95 5,294.98 (c) Finance cost 24 268.22 295.23 (d) Deprecia on and amor sa on expense 25 8,951.20 9,568.63 (e) Other expenses 26 7,410.15 9,113.05

Total expenses 43,297.48 53,933.21 5 Profit / (Loss) before excep onal and extraordinary items

and tax (3 – 4) (11,704.37) (8,724.45)

6 Excep onal items 27 (14,937.31) (6,386.06)7 Profit / (Loss) before extraordinary items and tax (5 + 6) (26,641.68) (15,110.51)8 Extraordinary items - - 9 Profit / (Loss) before tax (7 + 8) (26,641.68) (15,110.51)

10 Tax expense:(a) Current tax expense for current year - - (b) Deferred tax - -

11 Profit / (Loss) from con nuing opera ons (9 + 10) (26,641.68) (15,110.51)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) (26,641.68) (15,110.51)15 Earnings Per Equity Share (of ` 10/- Each) (93.58) (93.58) (53.07)



For PRADEEP & ASSOCIATES For and on behalf of the Board of DirectorsChartered AccountantsFRN No. 001254CP. K. Gupta Dr. M. P. Agarwal Devesh Narain GuptaPartner Chairman and Managing Director Dy. Managing DirectorMembership No. : 070492Place : Kanpur Vivek Saxena Rakesh Kumar SrivastavaDate : 30.05.2017 Accounts Head Company Secretary cum Finance Controller

(` in Lacs)


58

1 SHARE CAPITAL



Authorised5,00,00,000 Equity Shares of ` 10/- each 5,000.00 5,000.00

5,000.00 5,000.00 Issued, subscribed and fully paid-up shares2,84,70,645 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 accountBalance 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 AccountBalance 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 LossBalance as per last financial statement (161,155.53) (146,045.49)Add: Profit for the year (26,641.67) (15,110.04)

(187,797.20) (161,155.53)(iv) Foreign Currency Transatc on Reserve

Foreign Currency Transac on Reserve 1,393.88 1,885.55 1,393.88 1,885.55

Total Reserve and Surplus (i to iv) (164,612.16) (137,478.82)

Notes forming part of the consolidated financial statementsfor the year ended 31st March, 2017

(` in Lacs)


59

3 MINORITY INTEREST2014



Share held by outsider (` 1000 Lacs - ` 995 Lacs) 5.00 5.00 Add : 0.5% Reserve & Suplus** ` 127.38 * 0.50% = 0.64 Lacs*** ` (56.58) * 0.50% = (0.29) Lacs 0.35 0.64 Total 5.35 5.64

4 LONG TERM BORROWINGS2014

Secured Loans from Banks :Secured loans from Banks 219,438.43 219,879.77 Mezannine Debt 12,480.83 12,480.84 ECB/FCCB/NCD 8,423.22 8,423.22 Unsecured :Unsecured Loan 319.00 301.72 Total 240,661.48 241,085.55

5 LONG TERM PROVISIONS

2014Provisions for Employee Benei s 999.04 799.42 Total 999.04 799.42

6 SHORT TERM BORROWINGS

2014Working Capital Loan 70,667.58 70,881.53 Short Term Loan 23,085.55 23,985.56 Total 93,753.13 94,867.09

7 TRADE PAYABLE

2014Trade Creditors 4,057.23 2,661.18 Capex Creditors 1,667.00 1,911.57 Advance from Custmoers 141.74 558.33 Total 5,865.97 5,131.08


(` in Lacs)


60

8 OTHER CURRENT LIABILITIES2014



Unpaid Dividend 14.10 19.78 Employee Benefit Payable & others 901.63 727.27 Security Deposit Receipts 0.25 0.50 Other Current Liabili es 131.83 55.45 Interest accrued and due on borrowing 123.10 123.10 Statutory Liabili es 1,311.47 1,002.20 Total 2,482.38 1,928.30

9 SHORT TERM PROVISIONS

2014Provision for Expenses 26.28 26.61 Total 26.28 26.61


(` in Lacs)

Descrip on (A) TANGIBLE ASSETS: (B) INTANGIBLE ASSETS: Total Land Buildings Plant and

MachineryFurniture

and fi ngsOffice

equipmentVehicles Total (A) Brand Total (B)

Gross Block As at 1-04-2015 2,176.04 26,635.53 186,752.60 553.24 688.27 760.58 217,566.26 - - 217,566.26 Addi onal / Adjustments

- 54.50 397.23 1.42 7.30 27.74 488.19 - 488.19

As at 01-04-2016 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 31-03-2017 2,164.29 26,576.72 187,275.74 554.78 699.01 795.03 218,065.57 - - 218,065.57 Accumulated Deprecia on

As at 1-04-2015 - 4,519.97 44,046.65 240.16 615.08 612.71 50,034.57 - - 50,034.57 for the Year - 879.00 8,455.02 70.84 28.64 135.13 9,568.63 - 9,568.63 Adjustments - - - - - - - - - - As at 01-04-2016 - 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 31-03-2017 - 6,221.89 60,524.48 381.47 670.27 756.29 68,554.40 - - 68,554.40

Net Block As at 01-04-2015 2,176.04 22,115.56 142,705.95 313.08 73.19 147.87 167,531.69 - - 167,531.69 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 31-03-2017 2,164.29 20,354.83 126,751.26 173.31 28.74 38.74 149,511.17 - - 149,511.17

10 FIXED ASSETS


61

11 INTANGIBLE ASSETS /GOODWILL



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 841.32 894.17 Security Deposits 793.25 403.01 Others loan and Advances 1,062.77 1,156.59 Prepaid Expenses 17.60 22.11 Total 2,714.94 2,475.88

14 INVENTORIES

(As cer fied by the Management)Closing Stock 5,134.76 7,135.07 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 5,134.76 7,135.07


(` in Lacs)


62


(` in Lacs)15 TRADE RECEIVABLES



(Unsecured, Considered Good unless otherwise stated)(a) Outstanding for more than six months 7,888.98 18,345.89 (b) Considered Good 2,123.06 13,473.29 Total 9,560.02 31,367.16 Less: Provision for doub ul Debts - 6,557.85

9,560.02 24,809.31 (ii) Other debts (a) Considered Good 1,756.69 2,908.68

11,316.71 27,717.99

16 CASH AND BANK BALANCES

(a) Cash and cash equivalents:Cash Balance on Hand 15.50 30.18 Balance with Banks in:Current Accounts 225.30 267.43

(b) Earmarked balances with banks: Unpaid Dividend Account 14.10 19.78

Total 254.90 317.39

17 SHORT TERM LOANS AND ADVANCES

Salary Advances 14.43 22.41 Other Short term Loans & Advances - 22.44 Total 14.43 44.85

18 OTHER CURRENT ASSETS

Accrued Duty Draw back 289.28 408.20 Tuf's Subsidy Receivable 11,771.64 11,771.64 Accrued Interest 61.53 59.71 Advances to Others 2.06 26.28 T.D.S. Receivable 335.04 189.08 Cenvet Credit 9.39 1.90 Total 12,468.94 12,456.81


63

19 REVENUE FROM OPERATIONS



i. Sale of Manufactured goods :Sui ng & Shir ng 826.43 3,778.04 Fusible Interlining 26.31 3,854.14 Denim 4,747.39 1,658.03 Terry Towel 7,894.47 14,910.85 Home Furnishing 4,215.61 7,890.35 Bo om Weight 322.15 418.77 Technical Tex les 1,774.96 193.40 Jobwork 9,991.45 6,333.28 Retail Outlet / Misc. Sales 1,042.33 4,138.22 Revenue from Opera ons 30,841.10 43,175.08 Sales includes Export Sales of ` 4007.74 lakhs(Previous year ` 18014.95 lakhs).

ii. Other Opera ng Revenues :Export Benefits 317.61 1,714.23

317.61 1,714.23 Revenue From Opera ons (Gross)Less : Excise Duty - 13.36

31,158.71 44,875.95

20 OTHER INCOME

Miscellaneous Income 158.13 193.89 Profit on Sale of Fixed Assets 261.12 - Foregin Currency Fluctua on Gain 15.15 138.92 Total 434.40 332.81

21 COST OF MATERIALS CONSUMED

Raw Material Consumed 18,317.48 26,854.42 Packing Materials 1,454.95 1,458.20 Others 264.85 339.69 Total 20,037.28 28,652.31


(` in Lacs)


64

22 CHANGES IN INVENTORIES OF FINISHED GOODS, WORK IN PROCESS AND TRADED GOODS



Work-in-Process as at 31st March, 2017 1,144.46 2,145.98 Work-in-Process as at 31st March, 2016 1,752.83 1,598.79

608.37 (547.19)Add : Excise Duty on uncleared Finished Goods - 0.31 Finished Goods as at 31st March, 2017 1,885.80 2,218.93 Finished Goods as at 31st March, 2016 2,752.11 3,775.44

866.31 1,556.51 Net (increase) / decrease Inventories 1,474.68 1,009.01

23 EMPLOYEE BENEFIT EXPENSES

Salaries, wages and bonus 4,660.37 4,843.72 Contribu on to Provident & other Funds 456.57 398.20 Employee welfare expenses 39.01 53.06 Total 5,155.95 5,294.98

24 FINANCE COSTS

Interest Expenses 206.36 237.11 Bank Charges 61.86 58.12 Total 268.22 295.23

25 DEPRECIATION AND AMORTIZATION EXPENSE

Deprecia on of tangible assets 8,951.20 9,568.63 Total 8,951.20 9,568.63


(` in Lacs)


65

26 OTHER EXPENSES



Manufacturing ExpensesRepair & Maintenance 420.17 440.21 Stores & Spares 750.96 462.55 Power & Fuel 5,057.27 5,532.76 Other Manufacturing Expenses 210.86 175.54 Administra ve & Other ExpensesRent, Rate & Taxes 22.44 121.65 Insurance 46.06 73.97 Prin ng & Sta onery 19.25 21.49 Postage & Telegram 73.83 73.16 Mee ng Expenses 0.13 0.36 Cost & Concurrent Audit fee & Expenses 4.37 3.35 Auditors Remunera on 20.33 20.11 Professional Charges 93.87 406.67 Legal Expenses 22.95 50.18 Adver sement 23.03 5.80 Selling & Distribu on ExpensesTravelling & Conveyance 178.34 403.29 Selling & Distribu on Exp. 299.61 873.62 Freight Outward 166.68 448.34 Total 7,410.15 9,113.05


(` in Lacs)


66

27 EXCEPTIONAL ITEMS



Trade Receiables 452.02 452.02 Less : Trade Payable 1,063.90 1,088.85 Exchange Loss (611.88) (636.83)Net Exchange Loss (611.88) (636.83)Add:Bad Debts 15,132.23 8,483.67 Discount 416.96 623.39 Loss on Sale of Investment - (2,084.17)Total 14,937.31 6,386.06


(` in Lacs)


For PRADEEP & ASSOCIATES For and on behalf of the Board of DirectorsChartered AccountantsFRN No. 001254C

P. K. Gupta Dr. M. P. Agarwal Devesh Narain GuptaPartner Chairman and Managing Director Dy. Managing DirectorMembership No. : 070492



67

Consolidated Cash Flow Statementfor the year ended 31st March, 2017

(` in Lacs)



CASH FLOW FROM OPERATION ACTIVITIESNet Profit before tax and extra ordinary items (27,255.24) (12,271.55)- Deprecia on 8,951.20 9,568.62

(18,304.04) (2,702.93)

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGESAdjusted For- Trade and Other receivable 16,227.11 7,201.65 - Inventories 2,000.31 542.80 - Loans & Advances & Other Current Assests (227.87) 456.60 - Trade Payables & Provisions 1,488.26 (4,596.73)

1,183.77 901.39

Cash Generated from opera ons 1,183.77 901.39 Net cash from opera ng ac vi es ( A) 1,183.77 901.39 CASH FLOW FROM INVESTMENT ACTIVITIES- Fixed assets acquired (11.12) (488.19)- Sale of Investment - 20.00 - Net Cash used in Investment ac vi es (B ) (11.12) (468.19)CASH FLOW FROM FINANCE ACTIVITIES- Proceeds from issue of FCCB - - - Proceeds from long Term borrowings (1,181.15) (625.45)- Proceeds from long Short Term borrowings (53.99) (11.88)- Net Cash used in financing ac vi es (C ) (1,235.14) (637.33)Net increase in cash and cash equivalents (62.49) (204.13)Cash and Cash equivalents as at 1st April 2016 317.39 521.52 Cash and Cash equivalents as at 31st March 2017 254.90 317.39






68

Notes forming part of the consolidated financial statementsfor the year ended 31st March, 2017A. 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 turnover 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).


69

Notes forming part of the consolidated financial statementsfor the year ended 31st March, 2017 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, 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 inclusive of Excise Duty.

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.


70

Notes forming part of the consolidated financial statementsfor the year ended 31st March, 2017 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 2017.

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 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.


71

Notes forming part of the consolidated financial statementsfor the year ended 31st March, 2017 17. Inventory:

The breakup of inventory is as follows:- (` in Lacs)

Par culars As at 31st March, 2017


Raw Materials 1,526.15 2,641.14

Work-in-Process 1,144.47 1,752.83

Finished Goods 1746.64 2,219.24

Stores Spare & Others 718.25 521.86

Total 5135.51 7,135.07

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 is to tune of ` 151.35 Cr. 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 BIFR

The company was registered with BIFR in terms of the provisions of Sick Industrial Companies (Special Provisions) Act. However, Board of Industrial & Financial Reconstruc on a er making various hearing, the reference of the company before BIFR was abated in summary proceedings held on 30.11.16 with the reason that Lenders has taken over the possession of the assets of the company U/S 13(4) of SARFAESI act and allowed all the stake holders to recover their dues as per law.

21. Accumulated Losses

The company has accumulated loss of ̀ 1646.12 Crs. as at the balance sheet date. Out of the above, loss of ̀ 266.41 Crs. pertains to the losses of the year ended March 2017.

22. Opportunity for OTS

The company is making concer ng efforts to look out the strategic investor who may induct the funds to meet the working capital requirement of the company and also to resolute the debt of the lenders. The ma er is s ll under discussions with various investors.

23. CDR Package Status

The company was opera ng under CDR package at the beginning of the year. However, due to non-receipt of quantum of TUFS subsidy and non-release of total priority loans (as approved under CDR) the company has not been able to increase the capacity u liza on as an cipated and hence has not been able to discharge its financial obliga ons under CDR and all bank accounts of the company have become NPA.

Accordingly, the consor um bankers have decided and exited from CDR on October 28, 2015 and have reverted the relaxa ons given under CDR. Hence, the CDR arrangement is not in force for the company. At present, all bank accounts of the company are NPA.


72

Notes forming part of the consolidated financial statementsfor the year ended 31st March, 2017 24. Sale of noncore assets

Lenders have sold company’s embroidery unit situated at Sonepat at ̀ 3.04 Crore and adjusted the proceeds against debt. Further Garment unit at Roorkee, Spinning unit at Fatehpur and Aung unit at Godhrauli have also been put up for auc on.

25. Suits filed against the co. by the lenders for recovery of dues

The Consor um of Bankers lead by Central Bank of India has field a joint suit for recovery of dues to the tune of ` 3904.46 Cr. with the DRT, Delhi. The company is contes ng the same through its AR. Next date of hearing is 24th August, 2017.

26. Capacity U liza on Statement

The capacity u liza on are higher during the year in respect of all the products except sui ng and shir ng due to poor market condi on and in Towel slightly lower on account of running of opera ons on jobwork.

Qty & Value in Lacs

Sr. No.

Par culars Unit Installed U liza on *(Year ended Mar 2017)

U liza on *(Year ended Mar 2016)

Qty. Percentage Qty. Percentage

I Sui ng & Shir ng Mtrs. 300 42.91 14.30% 115.76 38.59%

II Fusible Interlining Fabric Mtrs. 250 104.04 41.62% 98.21 39.28%

III Denim** Mtrs. 300 72.07 24.02% 66.22 22.07%

IV Shee ng Mtrs. 260 142.25 54.71% 113.32 43.58%

V Bo om Weight Mtrs. 60 21.68 36.13% 16.01 26.68%

VI Yarn Dyed Shir ng Mtrs. 60 - NA - NA

VII Terry Towel Kgs. 120 40.48 33.73% 45.85 38.21%

VIII Technical Tex les

Flex Fabric ** Sq. Mtrs. 900 40.71 4.52% 4 0.44%

Black Out Fabric Mtrs. 200 - NA - NA

NBC Fabric ## Mtrs. 100 0.15 0.15% - NA

IRR / MSCN Fabric Sq. Mtrs. 50 - NA - NA

Foam Board/PVC Sheet Kgs. 36 0.29 0.80% 0.42 1.17%

Other Technical Tex les Fabric Mtrs. 96 - NA - NA

IX Embroidery Fabrics Mtrs. 8 2.42 30.25% 4.24 53.04%

X Quilt Fabric Mtrs. 4 - NA - NA

XI Garments # Nos. 66 - NA - NA

XII Quilts / Comforters # Nos. 3 - NA - NA

# Garment Unit Situated at Roorkee & Quilt & Comforters Unit at Noida has not been opera onal during the financial year


73

Notes forming part of the consolidated financial statementsfor the year ended 31st March, 2017 27. 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)

(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 - ` 84,35,317/-*

* Paid in FY 2016-17- Dr. M.P. Agarwal (` 25,03,950), Mr. Pawan Kumar Agarwal (` 15,84,649), Mrs. Sharda Agarwal (` 7,69,210), Mr. Devesh Gupta (` 23,71,208) Mr. Alok Agarwal (` 12,06,300)

# Actual Payments considered

28. 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 ` 1.41 Crore

(ii) Claim against the Company not acknowledged as Debt ` NIL

(iii) Le er of Credit outstanding ` NIL

(iv) Interest & Damages Claims from PF & ESIC Dept. ` 1.33 Crore

In terms of our report a achedFor PRADEEP & ASSOCIATES For and on behalf of the Board of DirectorsChartered AccountantsFRN No. 001254CP. K. Gupta Dr. M. P. Agarwal Devesh Narain GuptaPartner Chairman and Managing Director Dy. Managing DirectorMembership No. : 070492


Shri Lakshmi Cotsyn LimitedAnnual Report 2016-17Shri Lakshmi Cotsyn LimitedAnnual Report 2016-17

74

Standalone Financial Statements


75

To the Members ofShri Lakshmi Cotsyn LimitedREPORT ON THE STANDALONE FINANCIAL STATEMENTS1. We have audited the accompanying standalone financial statements of Shri Lakshmi Cotsyn Limited (“the Company”),

which comprise the Balance Sheet as at 31st March, 2017, 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, 2017, and a summary of the significant accoun ng policies and other explanatory informa on.

MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS2. 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 are reasonable and prudent; and 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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITOR’S RESPONSIBILITY3. 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 the auditor’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 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 Company’s Directors, as well as evalua ng the overall presenta on of the Standalone Ind AS financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS financial statements.

OPINION8. 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, 2017, and its loss (including other comprehensive income), its cash flow and changes in equity for the year ended on that date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS9. 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


76

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, 2017 taken on record by

the Board of Directors, none of the directors is disqualified as on 31st March, 2017 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 25 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 company 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 company. Refer to Note No. 26 under Notes to Accounts.

For PRADEEP & ASSOCIATES Chartered AccountantsFirm Registra on No. 001254C P. K. GuptaDate : 30.05.2017 PartnerPlace : Kanpur Membership No. 070492

Annexure A to the 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 2017.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 2017 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


77

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’ RESPONSIBILITY3. 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 REPORTING6. 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 REPORTING7. 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.

OPINION8. 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 2017, 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.



78

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 2017, 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 company2. The inventories were physically verified during the year by the Management at reasonable intervals, discrepancies noted

were not material.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, 2013 and 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 Rules prescribed 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 2017 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 902.502. Contribu on to Employee State Insurance 9.61

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, 2017.

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 are as under:-

(` in Crs.)Sl. No. Name of the Lender Total o/s Amount

1 Andhra Bank 70.87 2 Bank of Baroda 289.71 3 Canara Bank 352.39 4 Central Bank of India 574.74 5 Corpora on Bank 41.98 6 Edelweiss Assets Reconstruc on Company Ltd. 272.59 7 Exim Bank 23.50 8 IDBI Bank 3.09 9 IFCI Ltd. 5.27

10 Indian Bank 170.62


79

Annexure B to the Independent Auditors Report

(` in Crs.)Sl. No. Name of the Lender Total o/s Amount

11 Oriental Bank of Commerce 128.60 12 Punjab Na onal Bank 237.07 13 Saraswat Bank 103.35 14 State Bank of Bikaner & Jaipur 48.79 15 State Bank of Mysore 61.11 16 State Bank of Pa ala 73.67 17 Syndicate Bank 420.33 18 Union Bank of India 371.89 19 Vijaya Bank 31.90 Total 3,281.47

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.



80

Balance Sheet as at 31st March, 2017

(` in Lacs)

Note As at 31st March, 2017


A. EQUITY AND LIABILITIES1. Shareholders' Funds

(a) Share capital 1 2,847.06 2,847.06 (b) Reserves and Surplus 2 (176,657.73) (149,483.25)

2. Share applica on money pending allotment 6,843.04 6,843.04 3. Non-Current Liabili es

(a) Long-term borrowings 3 239,570.52 240,771.33 (b) Other Long-term Liabili es - - (c) Long-term provisions 4 999.04 799.42

4. Current Liabili es(a) Short-term borrowings 5 92,748.01 92,802.53 (b) Trade payables 6 5,790.56 5,001.59 (c) Other current liabili es 7 2,344.05 1,791.67 (d) Short-term provisions 8 26.28 21.39

174,510.83 201,394.78 B. ASSETS1. Non-Current Assets

(a) Fixed assets(i) Tangible assets 9 148,560.81 157,416.76

(b) Non-current investments 10 3,211.50 3,211.50 (c) Long-term loans and advances 11 2,780.19 2,573.61

2. Current Assets(a) Inventories 12 4,168.64 5,543.03 (b) Trade receivables 13 3,076.19 19,904.02 (c) Cash and cash equivalents 14 250.10 255.80 (d) Short term loans and advances 15 14.43 44.85 (e) Other current assets 16 12,448.97 12,445.21

174,510.83 201,394.78







81

Statement of Profit & Loss Account for the year ended 31st March, 2017

(` in Lacs)

Note For the year ended31st March, 2017

For the year ended31st March, 2016

1 INCOMERevenue from opera ons 17 30522.39 41225.75Less: Excise Duty 0 13.36

30522.39 41212.392 Other income 18 409.8 325.693 Total revenue (1+2) 30,932.19 41,538.08 4 EXPENDITURE

(a) Cost of materials consumed 19 20,039.52 25,481.96 (b) Changes in inventories of finished goods, work-in-process and stock-in-trade

20 848.95 784.72

(c) Employee benefits expense 21 5,150.39 5,165.25 (d) Finance cost 22 268.10 294.85 (e) Deprecia on and amor sa on expense 23 8,867.07 9,484.50 (f) Other expenses 24 7,383.45 8,224.55

Total expenses 42,557.48 49,435.83 5 (Loss) before excep onal items and tax (3 - 4) (11,625.29) (7,897.75)6 Excep onal items 25 (15,549.19) (6,511.50)7 (Loss) before tax (5 + 6) (27,174.48) (14,409.25)8 Tax expense - - 9 (Loss) for the year (7 + 8) (27,174.48) (14,409.25)

10 Earnings Per Equity Share (of ` 10/- Each) (95.45) (50.61)







82

1 SHARE CAPITAL



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 shares2,84,70,645 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 28,470,645Equity shares allo ed during the year - - Equity shares outstanding at the end the of the year 28,470,645 28,470,645Shareholder holding more than 5 percent Equity shares of the Company: No. of Shares

31st March, 2017 31st March, 2016Name of shareholder NIL NILRights, preferences and restric ons a ached to equity sharesThe Company has only one class of equity shares with face value of ` 10/- each, ranking pari passu

2 RESERVES AND SURPLUS

(i) Capital Reserves AccountBalance 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 accountBalance 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 LossBalance as at the beginning of the year (171,274.41) (156,865.16)Less: Adjustment rela ng to Fixed Assets(As per Companies Act, 2013)

- -

Add: (Loss) for the year (27,174.48) (14,409.25)Balance as at the End of the Year (198,448.89) (171,274.41)Total Reserve and Surplus (i to iii) (176,657.73) (149,483.25)

(` in Lacs)

The previous year figures have been re-grouped / re-classified, where ever necessary to conform to the current year presenta on.

Notes forming part of the financial statementsfor the year ended 31st March, 2017


83

3 LONG TERM BORROWINGS

2014As at

31st March, 2017As at

31st March, 2016 Secured Loans from Banks :Secured loans from Banks 218,506.47 219,847.81 Mezannine Debt 12,480.83 12,480.84 ECB/FCCB/NCD 8,423.22 8,423.22 Unsecured :Unsecured Loan 160.00 19.46 Total 239,570.52 240,771.33

4 LONG TERM PROVISIONS

2014Provisions for Employee Benei s 999.04 799.42 Total 999.04 799.42

5 SHORT TERM BORROWINGS

2014Working Capital Loan 69,662.46 69,716.97 Short Term Loan 23,085.55 23,085.56 Total 92,748.01 92,802.53

6 TRADE PAYABLES

2014Trade Creditors 3,988.98 2,531.69 Capex Creditors 1,667.00 1,911.57 Advance from Customers 134.58 558.33 Total 5,790.56 5,001.59

(` in Lacs)



84

7 OTHER CURRENT LIABILITIES

2014As at

31st March, 2017As at

31st March, 2016 Unpaid Dividend 14.10 19.78 Employee Benefit Payable & others 899.64 727.27 Security Deposit Receipt 0.25 0.50 Others Current Liabili es 131.83 55.45 Statutory Liabili es 1,298.23 988.67 Total 2,344.05 1,791.67

8 SHORT TERM PROVISIONS

2014Provision for Expenses 26.28 21.39 Total 26.28 21.39

(` in Lacs)


Descrip on (A) TANGIBLE ASSETS: (B) INTANGIBLE ASSETS: Total Land Buildings Plant and

MachineryFurniture

and fi ngsOffice

equipmentVehicles Total (A) Brand Total (B)

Gross Block As at 1-04-2015 2,176.04 25,821.22 186,094.79 542.53 674.54 708.87 216,017.99 - - 216,017.99 Addi onal / Adjustments

- 54.50 397.23 1.42 7.30 27.74 488.19 - 488.19

As at 01-04-2016 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 31-03-2017 2,164.29 25,762.41 186,617.93 544.07 685.28 743.32 216,517.30 - - 216,517.30 Accumulated Deprecia on

As at 1-04-2015 - 4,388.66 43,813.15 228.86 570.80 603.45 49,604.92 - - 49,604.92

for the Year - 857.78 8,357.11 70.09 67.18 132.34 9,484.50 - 9,484.50 Adjustments - - - - - - - - - - As at 01-04-2016 - 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 31-03-2017 - 6,048.14 60,135.16 368.67 663.07 741.45 67,956.49 - - 67,956.49

Net Block As at 01-04-2015 2,176.04 21,432.56 142,281.64 313.67 103.74 105.42 166,413.07 - - 166,413.07 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 31-03-2017 2,164.29 19,714.27 126,482.77 175.40 22.21 1.87 148,560.81 - - 148,560.81

9 FIXED ASSETS


85


10 NON CURRENT INVESTMENT



Un-Quoted Shares 3,211.50 3,211.50 Total 3,211.50 3,211.50

11 LONG TERM LOANS AND ADVANCES

Advances to suppliers 708.49 754.80 Security Deposits 747.69 399.96 Other Loans & Advances 1,324.01 1,418.85 Total 2,780.19 2,573.61

12 INVENTORIES

Raw Materials 1,386.44 2,108.27 Work-in-Process 1,144.47 1,752.83 Finished Goods 919.48 1,160.07 Stores and Spare-parts 718.25 521.86 Total 4,168.64 5,543.03

13 TRADE RECEIVABLES

(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 2,433.81 16,995.34 (b) Considered Doub ul 377.69 6,557.85

2,811.50 23,553.19 Less : Provision for doub ul debts - 6,557.85

2,811.50 16,995.34 (ii) Other debts (a) Considered Good 264.69 2,908.68 Total 3,076.19 19,904.02

(` in Lacs)


86


14 CASH AND BANK BALANCES



(a) Cash and cash equivalents:Cash Balance on Hand 14.02 13.90

(b) Balance with Banks in:Current Accounts 221.98 222.12

(c) Earmarked balances with banks:Unpaid Dividend Account 14.10 19.78

Total 250.10 255.80

15 SHORT TERM LOANS AND ADVANCES

Salary Advance 14.43 22.41 Other Short term Loans & Advances - 22.44 Total 14.43 44.85

16 OTHER CURRENT ASSETS

Accrued Duty Draw back 289.28 408.20 Tufs Subsidy Receivable 11,771.64 11,771.64 Accrued Interest 26.24 28.06 Advances to Others 2.06 24.34 T.D.S. Receivable 332.99 189.08 Prepaid Expenses 17.48 21.99 Cenvat Credit 9.28 1.90 Total 12,448.97 12,445.21

17 REVENUE FROM OPERATIONS

(i) Sale of Products:Sui ng & Shir ng 826.43 3,778.04 Fusible Interlining 26.31 3,854.14 Denim 4,747.39 1,658.03 Home Furnishing 4,215.61 7,890.35 Bo om Weight 322.15 418.77 Terry Towel 7,894.47 14,910.85 Technical Tex le 1,774.96 193.40 Retail Outlet/ Misc. Sale 406.01 474.66 Jobwork 9,991.45 6,333.28

30,204.78 39,511.52 Sales includes Export Sales of ` 4007.74 Lakhs(Previous year ` 18014.95 lakhs).

(` in Lacs)


87


17 REVENUE FROM OPERATIONS (Contd.)



(iI) Other Opera ng Revenues:Export Benefits 317.61 1,714.23

317.61 1,714.23 Revenue from Opera ons (Gross) 30,522.39 41,225.75 Less: Excise Duty - 13.36 Revenue from Opera ons (Net) 30,522.39 41,212.39

18 OTHER INCOME

Miscellaneous Income 151.37 186.77 Foreign Currency Fluctua on Gain 15.15 138.92 Profit on Sale of Fixed Assets 243.28 - Total 409.80 325.69

19 COST OF MATERIALS CONSUMED

Raw Material Consumed 18,306.75 23,684.07 Packing Materials 1,467.92 1,458.20 Others (Freight Inward) 264.85 339.69 Total 20,039.52 25,481.96

20 CHANGES IN INVENTORIES OF FINISHED GOODS, WORK IN PROCESS AND TRADED GOODS

Closing StockWork-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 Less: Excise Duty on uncleared Finished Goods - -

2,063.95 2,912.90 Opening StockWork-in-Process as at 31st March, 2016 1,752.83 1,204.64 Finished Goods as at 31st March, 2016 1,160.07 2,492.98

2,912.90 3,697.62 Net (increase) / decrease Inventories 848.95 784.72

(` in Lacs)


88


21 EMPLOYEE BENEFIT EXPENSES



Salaries, wages and bonus 4,654.81 4,725.30 Contribu on to Provident & other Funds 456.57 397.98 Employee welfare expenses 39.01 41.97 Total 5,150.39 5,165.25

22 FINANCE COSTS

Interest Expenses 206.33 237.11 Bank Charges 61.77 57.74 Total 268.10 294.85

23 DEPRECIATION AND AMORTIZATION EXPENSE

Deprecia on of tangible assets 8,867.07 9,484.50 Total 8,867.07 9,484.50

24 OTHER EXPENSES

a) Manufacturing ExpensesRepair & Maintenance 420.11 440.17 Stores & Spares 750.96 462.55 Power & Fuel 5,056.18 5,532.59 Other Manufacturing Expenses 208.89 154.09

b) Administra ve & Other ExpensesRent, Rate & Taxes 20.24 76.73 Insurance Cost 46.06 73.57 Mee ng Expenses 0.13 0.36 Concurrent Audit fee & Expenses 4.37 3.35 Auditors Remunera on 20.04 20.04 Prin ng & Sta onery 19.24 21.49 Postage & Telegram 73.82 73.07 Legal Expenses 20.20 37.08 Adver sement 23.03 5.80 Professional Charges 91.54 106.98

c) Selling & Distribu on ExpensesTravelling & Conveyance 177.41 198.84 Selling & Distribu on 284.55 569.50 Freight Outward 166.68 448.34

Total 7,383.45 8,224.55

(` in Lacs)


89


25 EXCEPTIONAL ITEMS



Bad debts 15,132.23 8,483.67 Prior Period Item - (2,084.17)Discount Allowed 416.96 112.00 Total 15,549.19 6,511.50





(` in Lacs)


90



CASH FLOW FROM OPERATION ACTIVITIES

Net Profit before tax and extra ordinary items (27,174.48) (14,409.25)

- Deprecia on 8,867.07 9,484.50

(18,307.41) (4,924.75)

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES

Adjusted For

- Trade and Other receivable 16,827.83 9,421.45

- Inventories 1,374.39 345.19

- Loans & Advances & Other Current Assests (179.92) 297.56

- Trade Payables & Provisions 1,545.86 (4,104.93)

19,568.16 5,959.27

Cash Generated from opera ons 1,260.75 1,034.52

Net cash from opera ng ac vi es ( A) 1,260.75 1,034.52

CASH FLOW FROM INVESTMENT ACTIVITIES

- Fixed assets acquired (11.12) (488.19)

- Sale of Investment - -

- Net Cash used in Investment ac vi es (B ) (11.12) (488.19)

CASH FLOW FROM FINANCE ACTIVITIES

- Change in Bank Borrowings (1,200.81) (637.03)

- Change in Short Term Borrowings (54.52) (11.88)

- Net Cash used in financing ac vi es (C ) (1,255.33) (648.91)

Net increase in cash and cash equivalents (5.70) (102.58)

Cash and Cash equivalents as at 1st April 2016 255.80 358.38

Cash and Cash equivalents as at 31st March 2017 250.10 255.80





Cash Flow Statement for the year ended 31st March, 2017

(` in Lacs)


91

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 turnover 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).



92

Notes forming part of the financial statementsfor the year ended 31st March, 2017 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, 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 inclusive of Excise Duty.

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.


93

Notes forming part of the financial statementsfor the year ended 31st March, 2017OTHER NOTES:

14. 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.

15. Job work vis-a-vis Sales Value Equaliza on:

The company is in stringent working capital 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, 2017


Raw Materials 1,386.44 2,108.27

Work-in-Process 1,144.47 1,752.83

Finished Goods 919.48 1,160.07

Stores Spare & Others 718.25 521.86

Total 4,168.64 5,543.03

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 is to tune of ` 151.35 Cr. 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 BIFR

The company was registered with BIFR in terms of the provisions of Sick Industrial Companies (Special Provisions) Act. However, Board of Industrial & Financial Reconstruc on a er making various hearing, the reference of the company before BIFR was abated in summary proceedings held on 30.11.16 with the reason that Lenders has taken over the possession of the assets of the company U/S 13(4) of SARFAESI act and allowed all the stake holders to recover their dues as per law.


94

Notes forming part of the financial statementsfor the year ended 31st March, 2017 20. Accumulated Losses

The company has accumulated loss of ` 1766.57 Crs. as at the balance sheet date. Out of the above, loss of ` 271.74 Crs. pertains to the losses of the year ended March 2017.

21. Opportunity for OTS

The company is making concer ng efforts to look out the strategic investor who may induct the funds to meet the working capital requirement of the company and also to resolute the debt of the lenders. The ma er is s ll under discussions with various investors.

22. CDR Package Status The company was opera ng under CDR package at the beginning of the year. However, due to non-receipt of

quantum of TUFS subsidy and non-release of total priority loans (as approved under CDR) the company has not been able to increase the capacity u liza on as an cipated and hence has not been able to discharge its financial obliga ons under CDR and all bank accounts of the company have become NPA.

Accordingly, the consor um bankers have decided and exited from CDR on October 28, 2015 and have reverted the relaxa ons given under CDR. Hence, the CDR arrangement is not in force for the company. At present, all bank accounts of the company are NPA.

23. Sale of noncore assets Lenders have sold company’s embroidery unit situated at Sonepat at ̀ 3.04 Crore and adjusted the proceeds against

debt. Further Garment unit at Roorkee, Spinning unit at Fatehpur and Aung unit at Godhrauli have also been put up for auc on.

24. Suits filed against the co. by the lenders for recovery of dues The Consor um of Bankers lead by Central Bank of India has field a joint suit for recovery of dues to the tune of

` 3904.46 Cr. with the DRT, Delhi. The company is contes ng the same through its AR. Next date of hearing is 24th August, 2017.

25. Capacity U liza on Statement The capacity u liza on are higher during the year in respect of all the products except sui ng and shir ng due to

poor market condi on and in Towel slightly lower on account of running of opera ons on jobwork.

Sr. No.




I Sui ng & Shir ng Mtrs. 300 42.91 14.30% 115.76 38.59%

II Fusible Interlining Fabric Mtrs. 250 104.04 41.62% 98.21 39.28%

III Denim** Mtrs. 300 72.07 24.02% 66.22 22.07%

IV Shee ng Mtrs. 260 142.25 54.71% 113.32 43.58%

V Bo om Weight Mtrs. 60 21.68 36.13% 16.01 26.68%

VI Yarn Dyed Shir ng Mtrs. 60 - NA - NA

VII Terry Towel Kgs. 120 40.48 33.73% 45.85 38.21%


95


Sr. No.




VIII Technical Tex les

Flex Fabric ** Sq. Mtrs. 900 40.71 4.52% 4 0.44%

Black Out Fabric Mtrs. 200 - NA - NA

NBC Fabric ## Mtrs. 100 0.15 0.15% - NA

IRR / MSCN Fabric Sq. Mtrs. 50 - NA - NA

Foam Board/PVC Sheet Kgs. 36 0.29 0.80% 0.42 1.17%

Other Technical Tex les Fabric Mtrs. 96 - NA - NA

IX Embroidery Fabrics Mtrs. 8 2.42 30.25% 4.24 53.04%

X Quilt Fabric Mtrs. 4 - NA - NA

XI Garments # Nos. 66 - NA - NA

XII Quilts / Comforters # Nos. 3 - NA - NA

# Garment Unit Situated at Roorkee & Quilt & Comforters Unit at Noida has not been opera onal during the financial year

26. 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)

(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 # - ` 84,35,317/-*

* Paid in FY 2016-17- Dr. M.P. Agarwal (` 25,03,950), Mr. Pawan Kumar Agarwal (` 15,84,649), Mrs. Sharda Agarwal (` 7,69,210), Mr. Devesh Gupta (` 23,71,208) Mr. Alok Agarwal (` 12,06,300)

# Actual Payments considered


96

Notes forming part of the financial statementsfor the year ended 31st March, 2017 27. 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 ` 1.41 Crore

(ii) Claim against the Company not acknowledged as Debt ` NIL

(iii) Le er of Credit outstanding ` NIL

(iv) Interest & Damages Claims from PF & ESIC Dept. ` 1.33 Crore





Important certications

NAME OF CERTIFICATE PURPOSE

GOTS Global Textile System

O.E. 100 & Blended User Health & Safety

REACH Chemical Management

OEKO-TEX 100 Skin Friendly Chemical

SA-8000 Social Accountability

ISO-9001 : 2008 Quality Management System

ISO-14001 : 2004 Environment Management System

OHSAS - 18001 : 2001 Occupational Health & Safety

FAIR TRADE CERTIFICATE Ethic Trade Practices

12

Malwan Unit Quilting Unit, Noida

Abhaypur Unit Garments Unit, Roorkee

Our Units

Our Products

Shri Lakshmi Cotsyn LimitedAN ISO 9000:2008 COMPANY

www.shrilakshmi.in

Documents

SLCL COL PAGES 2017 - Shri Lakshmishrilakshmi.in/financial/Annual-Report-2016-17.pdf · WEBSITE : E-MAIL ID : [email protected] CORPORATE IDENTITY NUMBER (CIN) L17122UP1988PLC009985