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Annual Report 2012-13

Shri Lakshmi Cotsyn Limited

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.

Inside the report

2Corporate Information

Management Discussion and Analysis 04 Notice 14 Directors’ Report 16 Corporate Governance Report 23 Financial Section 35

A challenge only becomes an obstacle when you bow to it.

At Shri Lakshmi Cotsyn, the year 2012-13 will be marked

as the toughest phase in the 25 years of our operations.

While on one hand we integrated, embraced technological

innovations, developed unique products and built sufficient

capacities to meet customer aspirations, there were certain

unfortunate uncertainties that greeted us as an unpleasant guest.

Stabilization of commercial production from the new capacities

could not be streamlined due to non-release of TUF subsidy and

unanticipated delay in the release of project funding. The liquidity

position of the Company was impacted to such an extent that the

Company had to request for restructuring of its debt under the

Corporate Debt Restructuring (CDR) mechanism

However, our strong pillars of success and determination did not

allow us to lose our focus. Instead, it helped us to encounter the

obstacle with a positive mindset.

Our every response made us stronger, wiser and gave us

confidence to rejuvenate.

Corporate Information

BOARD OF DIRECTORSDr. M. P. AGARWAL - Chairman cum Mananging Director

Mr. PAWAN KUMAR AGARWAL - Joint Managing Director

Mr. DEVESH GUPTA - Dy. Managing Director

Mr. DILEEP BAJAJ - Executive Director

Mrs. SHARDA AGARWAL - Executive Director

Mr. R. K. GARG - Independent Director

Dr. G. N. MATHUR - Independent Director

Mr. PRAMOD KUMAR SINGH - Independent Director

COMPANY SECRETARY & FINANCE CONTROLLERMr. RAKESH KUMAR SRIVASTAVA

PRESIDENT WORKSMR. B. R. GARG

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

INTERNAL AUDITORSM/s AJAI SHANKER & COMPANYChartered Accountants112 / 206-A, Swaroop Nagar, Kanpur - 208002Ph. No. (0512) 2551249

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

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

MR. SHARAD KUMAR BIRLA - Advocate7/17-A, II Floor, Parwati Bangla RoadKanpur - 208002Ph. No. (0512) 2531307

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

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

MONITORING INSTITUTION FOR LENDERSCentral Bank of IndiaCFB, Jeevantara Building, Parliament Street, New Delhi - 110001

SECURITY TRUSTEE FOR LENDERS Centbank Financial Services Limited1st Floor, Link House, Bahadurshah Zafar Marg New Delhi - 110002


Sneak-Peek into our business

Our class and calibre

Product range and brand

Armoured vehicles for the defence segment

Financial performance

2 SHRI LAKSHMI COTSYN LIMITED

REGISTERED OFFICE19/X-1 KrishnapuramG.T Road, Kanpur, U.P. 208007Ph. No. (0512) 2402893, 2402733

CORPORATE OFFICEC-40, Sector-57, Noida. U.P.Ph. No. (0120) 4544780

SUBSIDIARY COMPANIES1. SLCL Overseas (FZC) SAIF Zone P.O.8000, Sharjah, U.A.E.

2. Shri Lakshmi Defence Solutions Ltd. Rahsoopur Gate No. 133, Tehsil Bindki, Industrial Area, G.T.Road, Dist. Fatehpur

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

REGISTRAR & TRANSFER AGENTSM/s Abhipra Capital Ltd.GF-58-59 World Trade Centre,Barakhamba Lane, New DelhiPh. No. (011) 23414629, 23413893Mail ID: [email protected]

UNITS(a) MALWAN UNIT UPSIDC Industrial Area P.O. Malwan Dist. Fatehpur, U.P Ph. No. (05181) 248669(b) AUNG UNIT P.O.Aung, GT Road, Dist. Fatehpur, U.P. Ph. No. (05181) 251184 / 48(c) ABHAYPUR UNIT P.O.Aung, GT Road, Dist. Fatehpur, U.P.(d) REWARI BUJURG UNIT Village & Post - Rewari Bujurg Pargana & Tehsil - Bindki, Dist. Fatehpur, U.P.(e) NOIDA UNIT C-40, Sector-57, Noida Ph. No. (0120) 4722700

(f) ROORKEE UNIT Dev Bhoomi Industrial Estate, Village Banta Kheri, Tehsil Roorkee, District Haridwar, Uttaranchal Ph. No. (01332) 231961(g) SONEPAT UNIT Village-Libaspur, District- Sonepat, Haryana Ph. No. (0130) 2381579(h) SPINNING UNIT UPSIDC Industrial Area, P.O. Malwan Dist. Fatehpur, U.P

WEBSITEwww.shrilakshmi.in

E-MAIL ID [email protected]

CORPORATE IDENTITY NUMBER (CIN)L17122UP1988PLC009985

DEMAT ISIN NSDL & CDSLINE851B01016

LISTINGBombay 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

UTTAR PRADESH STOCK EXCHANGE“Padam Tower”, Civil Lines,Kanpur - 208002Ph. No. (0512) 2338220

SCRIP CODEBSE: 526049NSE: SHLAKSHMI

BLOOMBERG CODESLCL IN

REUTERS CODESHLK.BO

Certain plans. Uncertain circumstances

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Board of Directors

Management Discussion & Analysis

25th ANNUAL REPORT 2012-13 3

Management Discussion and Analysis

COMPANY OVERVIEWShri Lakshmi Cotsyn Limited (SLCL) is one of the largest

textile players in northern India. It has established itself as

a manufacturer of cotton and blended fabrics, readymade

garments, technical textiles, embroidered fabric, quilts,

fusible interlining, denim, terry towels, bottom weights, home

furnishing etc. Besides, the Company also manufactures high

margin technical and safety textiles (Water Repellent Bed

Linen, Vitamin E bed Linen, Fire Retardant Fabrics, Organic

Bedspread, Breathable Fabrics, NBC (Nuclear, Bio-Chemical)

Fabrics, MSCN (Multispectral Camouflage Nets) Fabric, Flex

Fabric, Black out & ECW (Extreme Cold Weather) Fabric. The

Company has SLCL state-of-the-art manufacturing facilities

located across India. The DSIR approved R&D capabilities

and its talented design team, allows the Company to focus

on delivering innovative textile products.

GLOBAL TEXTILE INDUSTRYThe global textiles and apparel industry has evolved over

the years. Countries like US, European Union, China, Japan

and India are amongst the largest consumption hubs for

textiles. While production is highly concentrated in China,

India, Bangladesh, Vietnam and Turkey. Capacity-wise,

China, India, Pakistan, Bangladesh, Thailand and Indonesia

are amongst the global leaders, with China alone having a

lion’s share of around 45% of the global installed spinning

and weaving capacity.

Over the past 15 years, the Global Textile industry has

consistently witnessed a modest compound annual growth

rate (CAGR) of 5%. According to US Comtrade, Technopak

analysis estimates, global fibre demand is expected to

witness 2% CAGR and reach USD 123 bn by 2021. Yarn

demand, on the other hand, is expected to witness 3%

CAGR and reach USD 303 bn. Volume-wise, global fibre

demand is estimated to reach 63 mn tonnes while yarn

demand is expected to reach 89 mn tonnes over the same

period. Global fabric demand, on the other hand, is projected

to increase at a 3% CAGR to reach 477 bn sq. m and at an

estimated value of USD 477 bn by 2021.

GLOBAL TEXTILE AND APPAREL TRADE

CAGR 2011-12 (%)

Apparel 6

Fabric 1

Yarn 3

Fiber 4

Others 3

Total 5

(Source: Textile & Apparel Compendium 2012)

662

2011(E)

7431 42

389

126

840

2016(P)

7838

49

530

145

1060

2021(P)

8146

55

711

167








SLCL’s extensive marketing and distribution network

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

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

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

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

among others. The Company is exploring further possibilities

of adding more clients in the US and Europe.

INDIAN TEXTILE INDUSTRYOverview

The Indian textile industry enjoys contributes 4% to the

gross domestic product, approximately 14% to industrial

production, 12% of the country’s total exports, 27% of

total foreign exchange earnings and is the second largest

employment provider.

India is one of the world’s most competitive manufacturers

of yarn, fabric and garments owing to abundant raw material

availability (cotton, wool, silk, jute) and relatively cost-

effective workforce. The presence of a number of small-scale

players makes the industry very competitive despite large

and growing market. Thus, encouraging manufacturers to

produce smartly and innovatively.

After a challenging 2011-12, the Indian textiles sector

recovered significantly. There was around 7.5% rebound

in sales and realisation owing to increase in demand.

Productivity on the other hand, also witnessed a growth.

Both yarn and fabric production increased by approximately

6.8% and 7.1%, respectively. On the export front, the sector

witnessed a mild recovery and grew by around 8% in rupee

terms. With declining rupee and revival of demand from

countries like US and UK, the sector is expected to witness

good times ahead.

Opportunities

The Indian textiles and apparel market has a strong potential

to expand at a CAGR of 10.1%. India has been increasingly

favoured for textile and apparel production among the Asian

nations owing to deteriorating export-competitiveness

of China. Besides, increasing domestic and international

demand shall further boost the sector. The sector is expected

to be worth USD 223 bn by the end of 2021.

1.60 lac crore+

Indian commercial banks‘ exposure to the country’s textile sector.

MARKET SIZE OF INDIAN TEXTILE INDUSTRY – DOMESTIC AND EXPORT (USD bn)

(Source: Technopak, Ministry of Textiles)

70

2009

78

2010

89

2011

143

2016E

223

2021E

CAGR: 10.1%


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Technical textiles industry (USD bn)

(Source: Ministry of Textiles, Techtextil, IBEF)

11.9

FY12

31.3

FY17E

CAGR: 21.3%

Home textiles industry (USD bn)

(Source: Ministry of Textiles, Techtextil, IBEF)

3.7

2011

5.5

2016E

8.2

2012

CAGR: 8.3%

Technical textiles

The technical textile segment is expected to expand at a

CAGR of 21.3% between FY12–17 to USD 31.3 bn. This

growth shall be driven by the healthcare and infrastructure

sectors.

There has been a significant increase in the sale of home

textiles products like rugs, carpets, curtains, upholsteries,

bed linens and towels owing to growth of housing, office,

hospitality and healthcare. Today India accounts for 7% of

global home textiles trade. Superior quality makes companies

Ready-made garments

Men’s wear dominated readymade garments sector, is now witnessing a growing contribution from women’s as well as kid’s wear. The growth from this sector is largely driven from tier I cities. However, various players in this segment now consider tier II and tier III cities as part of the business expansion. Further, new concepts such as plus size clothing, cutomised clothing, etc. are contributing to the growth of this segment. India’s readymade garment industry aims to achieve Rs 80,000 crore exports in 2013-14, an 8-10%

growth over previous year.

The government has made an allocation of USD 1 bn for

SMEs and has also provided an exemption in custom duty

for raw materials used by the sector. Government further

plans to launch a USD 44.2 mn mission for the promotion of

technical textiles, and cleared plans to set up a new research

centre for the industry.

in India a leader in the US and the UK, contributing two-third

to their exports. Going ahead, the industry is expected to

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

USD 8.2 bn by 2021.

Denim

Rising number of working women, lifestyle changes and

evolving culture has driven the demand for western wear,

specifically jeans amongst women. Growing brand awareness

and consciousness has given push to the organized denim

market. According to RNCOS research, the Indian denim

market is projected to expand at a CAGR of over 18%

between 2012-2015.








CHALLENGESDespite growth opportunities, the textile industry is exposed

to several hurdles with respect to production, marketing,

exports and support infrastructure. These include:

Lower value-addition

Lower economies of scale

Slow modernisation process

Volatile raw material prices

Weak supply chain linkages

Lack of efficient R&D infrastructure

Threat from competitors

Weak brand promotion

Higher interest rates

Relatively large market segment still unorganised

Volatile fuel costs

Unanticipated exchange rate fluctuations

GOVERNMENT INITIATIVESGovernment’s support with favourable policies has been a

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

of the initiatives:

Technology Upgradation Fund Scheme

The scheme ensures a 5% interest rate reimbursement

charged by the banks and financial institutions to ensure

credit availability for technology upgradation. The scheme

also proposes 5% reimbursement of interest charged by the

financial institutions, provides safeguard against exchange

rate fluctuations (not exceeding 5% per annum) and 5%

interest reimbursement and 10% capital subsidy for specified

finishing machinery, garmenting machinery and technical

textiles machinery.

Scheme for Integrated Textile Parks

The Ministry of Textiles plans to emphasise the weaving

sector through the Technology Upgradation Fund Scheme

(TUFS). The scheme encourages the establishment of

Greenfield textile infrastructure where the State Government

will provide technical advisory and fund 40% of the project.

Central Government will provide the balance finance along

with land acquisition and infrastructure support.

Integrated Skill Development Scheme

This scheme was launched in October 2010 to address the

training needs of the textiles workers to meet manpower

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

years with an estimated cost of Rs 19.5 Bn.

Technology Mission of Technical Textiles

The mission aims to address infrastructure improvement

in terms of testing facilities, market development support,

skilled manpower, R&D and defining specifications and

standards for technical textiles, among others. Besides, it

also focuses on supporting other activities like business start-

ups, workshops, social compliances, market development

for institutional and export business and promoting contract

research and development through IITs / TRAs / Textile

Institutes.

BUDGET HIGHLIGHTS, 2013-14Focus area: Mechanisation

Extension of TUFS to the 12th Five Year Plan, with an investment target of USD2.9 bn

Allocation of USD0.5 bn over 2013–14 for modernisation of the power loom sector

Focus area: Tax Sops and Financial Package

Exemption of excise duty for the cotton and man-made sector at yarn, fabric and garment stages

Reduction in duty for imported textile machinery and parts from 7.5% to 5.0%

Exemption on excise duty for hand-made carpets and textile floor

Focus area: Infrastructure support

Allocation of USD10.4 mn for apparel parks under SITP

Proposal for a new Integrated Processing Development Scheme in the 12th Plan with an outlay of USD1041.5 mn to address environmental concerns of the industry


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Growthdemand

Rising demand in exports

Increasing demand in domestic market

Growing population driving demand

for textiles

Policy support

100%FDI in textile sector

Government setting up SITs and Mega

Cluster Zones

Increasing loans under TUFS

Increasing investments

Growing domestic and foreign investments

Commitment of USD 140 billion of

foreign investments

Government investment

schemes (TCIDS and APES)

Resulting inInvesting

STRONG FUNDAMENTALS COMBINED WITH POLICY SUPPORT AUGURS WELL FOR THE TEXTILE INDUSTRY GROWTH

(Source: Ministry of Textiles & IBEF)

INDIAN DEFENCE SECTORIndia is in a position to build a vibrant local defense-industry

ecosystem that can support both domestic and export

requirements. The sector, currently valued at an estimated

$12bn, is expected to continue on its growth trajectory,

largely driven by capital-equipment spending. Other factors

responsible for driving domestic demand include:

Changing geo-political scenario on India’s borders may

augment need for defence equipments

Replacement of obsolete inventory with latest

equipments to combat emergencies

Internal security requirements for town/city surveillance

According to the Deloitte Aerospace and Defence Outlook

2013, India is poised to become a favourite destination for

global defence sector players with the total offset opportunity

for the commercial segment in the country set to cross the

$10-bn mark in 2013. With the Government expected to

raise the foreign investment limit in the defence sector to

49% from 26% this year, the country is likely to witness a

rush of investments. Increasing private sector participation,

will further aid the industry transformation.

SWOT ANALYSIS OF SLCLStrengths

Promoters have rich experience in the textile industry and

they are familiar with the change in demand pattern

Established a good reputation in the market as reliable

manufacturer and supplier of quality products

Technically sound with ultra modern machineries








Positioned itself as an integrated Multi product player of

textile value chain

Strong niche product portfolio for domestic and

international brands

Economies of scale through complete integration

Strong distribution network in the market for its various

ranges like Polly filled quilted bed covers, home

furnishing products, embroidered dress material and

microdot interlining fusing fabric

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

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

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

Some of the major textile players in India have not been

able to make it to the IKEA approved list of suppliers

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

locations

Strong presence in technical and safety textiles (water

repellent bed sheets, mosquito repellent bed sheets,

fire retardant fabrics etc.) with defense applications

Strong presence in defense related textiles (uniforms,

camouflage textiles to armored vehicles)

Strong R&D capabilities proven over a decade with

launch of innovative products

Multiple brands for different segments

Market leader in fusible interlining segment (30% plus

market share)

High-margin Technical Textile set-up

Weakness

Sensitive to the change in raw material prices may affect

the profitability of the company

Low brand visibility in readymade garments due to lack

of exclusive stores

Relatively high leverage

Since more than 80% of the sales is domestic in nature,

the company may be losing out on the opportunity cost

viz a viz the export market which is considered to be

very lucrative

Less focus on marketing and creating brand equity for its

products

High financial cost due to over debt.

Opportunity

Potential market and ability to capture the growth by

aggressive sale promotion policy

Opportunity to launch high quality fabrics in healthcare

using nanotechnology

Opportunity to add more global blue chip clients in US

and Europe

Opportunity to cater to defence forces in India and

abroad in higher value added areas – armoured vehicles,

technical and safety textiles

High demand present for technical textile in domestic as

well as international market and present

Machineries and set-up can be customized to produce

different products according to the client requirement

Technical textile products can be used as an application

across auto component, construction, home furnishing,

defence, hygiene and medical, components of furniture,

shoes & clothing, railways and aerospace, packaging,

sports & leisure segments

Threat

Increasing competition from unorganized sectors and

other peers

Competition from neighbouring countries and in

particular from China, Pakistan and Turkey in respect of

Home textile and Technical Textile products

Fluctuations in raw material (cotton) prices pose a

threat, as its production depends upon availability of raw

material

Increasing competition from existing players in textiles

and defense related products

The fragmented nature of the industry and compared to

international standards our capacities are small

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

the lowest in the world and inconsistent in quality

Slow improvement in quality to international standards

and adoption to fast changing fashion demands


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FINANCIAL REVIEWAccounting policy

Accounts prepared on a historical cost basis, based on

accrual method of accounting in accordance with applicable

accounting standards issued by The Institute 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 comparative analysis of key financial

figures:

Amount in Rs crore

Particulars 2012-13 2011-12

Net Sales 1,922.20 2,396.79

Exports Sales 276.82 197.43

EBIDTA 91.55 446.40

PBT (367.69) 168.88

PAT (415.54) 110.47

Fixed Assets 1,775.99 1,627.37

Other Current Assets

433.10 4.90

QUALITYThe Company understands the underlying importance of

quality and pays attention to each detail. The Company’s

quality commitment is reinforced via globally benchmarked

quality assurance protocols. The procurement team keeps

a check on the cost and the quality of the raw materials.

The manufacturing and packaging team does not leave

any stone unturned in checking the quality before releasing

product into the market.

The Company’s TQM enhances further quality awareness.

Advanced TQM methodologies deliver consistent &

internationally benchmarked quality standards. Products

move in numbered batches; a thorough batch-wise inspection

is conducted in line with client specifications. In the absence

of such parameters, the Company follows internal protocols.

The TQM teams issue a green card if all parameters are

compiled with. In the event of non-compliance, the batch is

withdrawn and a red card is issued for subsequent analysis

and rectification. In this way, the customers are provided with

best quality products.

RESEARCH & DEVELOPMENTThe in-house Research and Development department

regularly undertakes in-depth initiatives to enable the

Company to achieve cost and product leadership. 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 upgradation of Industrial workers.

The Company’s R&D strategy is anchored on the

development and speedy commercialization of globally

competitive products, processes and technologies through

best-in-class research interventions backed by world-class

infrastructure. The Company is developing nanotechnology

fabrics and smart textiles with sensor technology to monitor

fatigue, stress, heart condition, blood pressure etc. Besides,

it also manufactures various technical textile fabrics which

include high altitude fabric, PU-Coated nylon fabrics, flex

fabrics, carbon fabrics and IRR fabrics. The Company recently

introduced membrane laminated fabrics for rain & extreme

cold weather ECW Clothing which do not allow water to come

in but allows body sweat and body heat to go out in vapour

form, thus saving an individual from getting wait as well as

getting a frost bite in extreme cold situations.

HUMAN RESOURCES & INDUSTRIAL RELATIONSHuman Resources are the key assets that have driven SLCL

over the years. In order to maintain their high spirits, the

Company ensures encouraging, nurturing and appreciative

environment for their more than 5000 employees. The

Company regularly trains them for skill development and

motivates them to focus on achieving the Company’s goals

and objectives. Not only that, the Company also undertakes








special soft skill sessions to make them grow professionally

as well as personally. Being a part of IKEA approved list of

vendors, the Company further follows stringent guidelines

with respect to human resources and industrial relations.

RISK MANAGEMENTSLCL’s risk management team have evaluated the possible

risks and its counter strategies. These include:

A slowdown in the Indian textiles industry which can

impact the Company’s growth plans. The demand

revival from the developing countries and increasing

internal competitiveness places the Company in a stable

position.

Adverse currency fluctuations can impact the Company’s

profitability. Though export comprises 14.40% of the

Company’s revenues, the in-house forex management

team keeps a constant check on the global currency

movement.

Change in tastes and preferences among consumers

can impact the sales. As a proactive measure, the

Company’s R&D team keeps itself updated with the latest

trends in the industry and passes on the information to

the relevant departments of the Company.

Poor quality output can adversely impact the Company’s

brand. As a proactive measure, the quality team

conducts extensive checks on raw materials, materials-

in-process and finished Products.

INTERNAL CONTROL SYSTEMThe 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 practice capable of

improving the efficiency of the operations and sustainability

of the business. The system ensures that all assets are

safeguarded and protected against loss from unauthorised

use or disposition and that those transactions are authorised,

recorded and reported correctly. Operating managers make

sure that all the operations 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 respective

areas/units to create awareness and corrective actions are

taken to rectify them. These reports are reviewed by the

management team and then by the Audit Committee of the

Board for follow up action.

CORPORATE SOCIAL RESPONSIBILITYThe Company continues to strive for sustainability in

operations by promoting the integration of CSR into business

strategy as well as everyday functioning. The Company will

continue to focus its resources, strengths and strategies to

achieve its vision of creating a rich product mix in a largely

matured Indian Textile market. Our comprehensive set of

policies, practices and programs are integrated throughout

business operations and decision-making processes where

environmental and social performance is managed alongside

financial performance.

Beyond profit maximization, we extend to include an

acknowledgement of our responsibility to a broad range


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Board of Directors



of stakeholders, as well as employees, customers,

communities 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 committed to building

harmonious employee relations. The collaborative spirit

across all sections of employees has resulted in significant

enhancement in quality and productivity. We adhere to strict

labour compliance to all working conditions and benefits

as directed under Indian Labour Laws. Besides, we ensure

healthy working environment and proper housing, medical

facilities, gratuity and Insurance (GPA) benefits to the

employees. We have also developed a housing colony for

our workers/staff with all necessary amenities 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

creative 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 communities. We make continuous efforts to

improve our standards of safety health management. We

regularly conduct educational activities that raise awareness

about safety and health.

Environment

The Company undertakes numerous initiatives, involving

employees towards the betterment of the environment. It is

reflected in the following initiatives:

In campus greening

Encouraging judicious use of natural resources

Recycling, pollution control to ensure clean air and water

and reduction of landfill wastes








Developed 30 acres of land for organic product

development

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

based captive co-generation power plants, resulting in

optimum resource utilisation

Your Company has followed “Green Initiative in Corporate

Governance” by allowing paperless compliances through

electronic mode. To contribute to the Corporate Social

Responsibility, initiatives have already been taken and

the Company also continues to pursue its mission

for environmental excellence and constantly explores

opportunities to improve ecology and environment.

SOCIAL EVENTS 2012-13 All India Conference of intellectuals of Shri Lakshmi

Cotsyn

Antrik Suraksha Program

Distribution of blankets and warm clothes

Drinking water arrangement for general public

Environment plantation

Felicitation Ceremony or Abhinandan Samaroh

Weaves open championship


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Board of Directors



Notice Directors’ Report Corporate Governance Report Independent Auditors’ Report


NoticeNOTICE is hereby given that the Twenty-Fifth Annual General Meeting of the Members of SHRI LAKSHMI COTSYN LIMITED will be held on Monday, 30th December, 2013 at 11:30 a.m. at the Registered Office of the Company at 19/X-1, Krishna-puram, G.T. Road, Kanpur-208007 to transact the following business:

ORDINARY BUSINESS

1. To receive, consider and adopt the Profit & Loss Account for the year ended June 30, 2013, Balance Sheet as at that date together with the Directors’ Report and Audi-tor’s Report thereon.

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

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

4. To re-appoint M/s Pradeep & Associates, Chartered Ac-

countants as Auditors, who shall hold office from the con-clusion of this Annual General Meeting until the conclu-sion of the next Annual General Meeting of the Company and to fix their remuneration.

SPECIAL BUSINESS

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

“RESOLVED that Shri Pramod Kumar Singh, who was appointed as an Additional Director by the Board of the Company on 28.02.2013 under the provisions of Section 260 of the Companies Act, 1956 (Section 161 of the Companies Act 2013) and hold the office upto the date of this Annual General Meeting and in respect of whom the Company has received a notice in writing from a Member under Section 257 of the Act proposing his candidature for the office of Director of the Company, be and is hereby appointed as a Director of the Company liable to retire by rotation”.

Registered office: By Order of the Board 19/X-1, Krishnapuram, G.T. Road, Kanpur RAKESH KUMAR SRIVASTAVADate : 5th December, 2013 Company Secretary cum Finance Controller

NOTES:

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

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

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

• The Register of members and share transfer books of the Company will remain closed from Friday, 27th December, 2013 to Monday, 30th December, 2013 (both days inclusive) for the purpose of Annual Gen-eral Meeting of the Company .

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

• All documents referred to in the accompanying No-tice are available for inspection at the Registered Of-fice of the Company during business hours on all

working days upto the date of Annual General Meet-ing.

• In view of the directions issued by the Ministry vide General Circular No: 2 /2011, dated 08.02.2011 in regard to exemption under Section 212(8) of the Companies Act, for not attaching the balance sheet of the subsidiary concerned, Board of Directors of your Company have given their consent for not at-taching the balance sheet of the subsidiary compa-nies.

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

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

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

Consolidated Accounts Standalone Accounts Statement regarding Subsidiary Companies


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

• Pursuant to the provisions of Section 205C of the Companies Act 1956, as amended, dividend for the financial year 2006-07 and the dividends for the subsequent years, which remain unpaid or un-claimed for a period of 7 years will be transferred to Investor Education and Protection Fund (IEPF). Shareholders who have so far not enchased the divi-dend warrant(s) are requested to make their claim to the Secretarial Department at the Registered Of-fice of the Company or the office of the RTA, failing which the unpaid/ unclaimed amount will be trans-ferred to the IEPF on its due date. It may also be noted that once the unpaid/ unclaimed dividend is transferred to the IEPF as above, no claim shall lie against the IEPF / the Company in respect of such amount by the shareholder.

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

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

• All correspondence relating to change of address,

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

In terms of the Articles of Association of the Company, Dr. G. N. Mathur and Shri R. K. Garg are retiring by rotation and being eligible, offer themselves for re-appointment. The relevant de-tails in this respect pursuant to Clause 49 of the Listing Agree-ment are furnished hereunder:

I. Dr. G. N. Mathur - He is an eminent senior scientist and has been the Ex-Director, Defence Materials and Stores Research and Development Establishment (DMSRDE), Post Graduate in Chemical Engg. from Canada univer-sity and Doctorate in Engg. from University of Detroite, U.S.A. Presently associated with the University of Arkan-sas, U.S.A. and is working on Nano Technology and its application in Textiles to manufacture Smart Textiles.

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

II. Shri R. K. Garg - He is a Management Graduate with over 33 years of experience in corporate world and has worked with DLF Universal Limited, DCM Shriram Indus-tries Limited & Blue Star Limited at a senior position. He acts as an Independent Director of the Company.

Shri R. K. Garg does not hold shares in the Company in his name and none of the share in the Company is held by him for any other person on a beneficial basis.

Item No. 5:

Shri Pramod Kumar Singh was appointed as an Additional Di-rector on the Board of the Company with effect from 28th February 2013 under the provisions of Section 260 of the Companies Act, 1956 to hold the office upto the date of this Annual General Meeting.

Mr. Pramod Kumar Singh has been a Former Advisor to Union Textile Minister and has a rich experience of over 25 years in the field of media and Politics.

He is post graduate in Political Science from Allahabad Univer-sity and M. Phil. (International Politics) from Jawaharlal Nehru University (JNU) New Delhi.

The Board considers that his presence on the Board will be of immense value to the Company and accordingly recommends the resolution for approval of the Members.

None of the Directors except Shri Pramod Kumar Singh himself may be considered as interested in the said resolution.

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

Registered office: By Order of the Board 19/X-1, Krishnapuram, G.T. Road, Kanpur RAKESH KUMAR SRIVASTAVADate : 5th December, 2013 Company Secretary cum Finance Controller



Directors’ Report Your Directors have the pleasure in presenting the 25th Annual Report along with the audited financial statements of the Company for the year ended on 30th June, 2013.

FINANCIAL RESULTS

Highlights of financial result (consolidated) for the year were as under: (Rs. in Crores)

PERFORMANCE

Performance Highlights:

Your Directors wish to inform you that despite of all critical sit-uations faced by the Company, products like Technical Textile/ Fusible Interlining and garments have marked their presence in the Company’s overall performance.

During 2012-13 the Company recorded sales and operat-ing income at Rs. 1946.54 as compared to Rs. 2422.13 in 2011-12. The profit before tax was Rs. (367.69) crores in 2012-13 as compared to Rs. 168.88 in 2011-12. The profit after tax was Rs. (415.54) crores in 2012-13 as compared to Rs. 110.47 in 2011-12. However the difficult external environ-ment had a direct bearing on the Company’s financial results, mainly high interest costs, have put the Company in losses.

Corporate Debt Restructuring:

Your Company followed an aggressive growth path in the last five years, it had considerably grown its balance sheet, includ-ing debt. Due to the industry situation in general viz. slowdown and company specific issues such as growing debt, delayed realisation of debtors, working capital shortfall, delay in project completion and cash flow mismatch, which had adversely af-fected the liquidity position of the company, the company was facing financial problems and finding difficulty in servicing its debt obligation. Therefore, it had approached the lenders for restructuring its debts under CDR mechanism. Centbank Fi-nancial Services Ltd. had carried out TEV study of the company and given the opinion that the company is techno -economi-cally viable considering proposed debt restructuring scheme. The CDR package will help the company in coming out of the financial problem and enable it to service debt/ interest obliga-


Sales and other income 1,946.54 2,422.13

Operating profit before interest, depreciation and tax 91.55 446.40

Less:

Interest and other financial charges 356.73 205.07

Depreciation 101.70 61.67

Extraordinary items (0.81) 10.78

Profit/ Loss before tax (367.69) 168.88

Less: Income Tax (including deferred tax) 47.85 58.41

Profit/ Loss after tax (415.54) 110.47

Proposed dividend – –

Dividend tax – –

Balance carried to balance sheet (415.54) 110.47



tions in terms of the package. A Joint Lenders Meeting (JLM) was held on February 25, 2013 wherein it was decided to refer the case to the CDR Forum to restructure the Company’s debt in order to get through the present phase of industry-wide li-quidity crunch.

The Board of Directors of the Company in its Meeting held on February 28, 2013 had accorded its approval for restructuring of the debts of the Company under Corporate Debt Restruc-turing (CDR) Mechanism of the Reserve Bank of India. CDR Empowered Group (CDREG) in its meeting held on June 24, 2013 admitted the Company under CDR. Upon due consid-eration CDREG approved the financial restructuring package (“CDR Package”) and issued Letter of Approval (LOA) on June 28, 2013. Thereafter CDR package related documents such as Master Restructuring Agreement, (MRA), amended Master Restructuring Agreement, TRA, STA have been executed and the CDR package is under implementation.

The salient features of the CDR package interalia are as under:

• Re-schedulement of TUF Loan to be repaid in 40 struc-tured quarterly installments; Term loans to be repaid in 32 structured quarterly installments & Short Term Loans to be repaid in 22 structured quarterly installments.

• Interest rate has been reduced to 11% per annum till June 30, 2013. Thereafter, the rate is proposed to be floating rate of Central Bank Base Rate + spread of 0.75% p.a., with a right to reset the spread every year.

• Release of priority loan amounting to Rs.65.40 Crores for critical capex.

• Waiver of penal charges from the cutoff date to the date of implementation of the package

REASONS FOR POOR PERFORMANCE/TIME-OVERRUN/COST-OVERRUN

The major reasons of the company’s problem was as under:

i. Major Expansion in Last Five Years.

ii. The Terry Towel project was to be installed as brown field project at existing site Malwan but due to delay, it was implemented as Green field project at Abhayapur as a result company had to incur additional cost.

iii. Delay in financial tie up and high cost of Mezzanine Debt for Denim Expansion and Technical Textile Project.

iv. Fluctuation in Cotton and yarn prices.

v. Non-Availability of TUFS subsidy amounting to Rs.165 crore.

vi. The Company could not raise equity & other sources of capital in proportion to debt.

vii. Delay in getting working capital disbursements from banks even in piecemeal. Hence, funds could not be uti-

lised for generating revenues as they were used for clear-ing the interest dues and loan instalments to save bank account from becoming NPA.

viii. The company is having substantial institutional orders from CRPF, BSF, MOD, ITBF, Assam Rifles, OCF, OEF and other Defence establishment. Due to liquidity problems, the company could not meet the demand on time speci-fied and the supplies became delayed as a result in most of the cases the company is paying liquidated damages @ 10% of order Value.

ix. There was additional expenditure made in the company’s factory to the extent of Rs 206.15 crore in recently im-plemented projects which was funded out of internal ac-cruals which further added to liquidity stress.

x. The company was not able to put the balancing machin-eries at its factory units and hence, could not utilize the projected production capacity for the units.

EXPORTS

During 2012-13, the Company recorded an export of Rs 276.82 crores as against Rs. 197.43 crores in 2011-12, thus registered an increase in export of 40.21 % over the last year.

RECOGNITIONS & AWARDS

Your Directors feel pleasure in reporting some of the recogni-tions bestowed on your Company during the year:

• Ranked 294th among the top 1000 companies in BS-1000, issue 2012.

• Recognition as R&D unit by DSIR Ministry of Science and Technology, Government of India.

• Also recognized by Government of India as a centre for skill upgradation of Industrial workers.

The company is also registered with the following organisa-tions:

1. Director General of Quality Assurance (DGQA)

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

3. Ordnance Board Group of Factories.

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

5. Trade Mark Agency having brand names STAR TRACK, DYFI, HEBE

6. Office of the Textile Commissioner as a Composite Mill.

7. Bureau of Indian Standards (BIS)

8. Department of Industrial Development, Ministry of Indus-try.

Company is duly registered with Export Promotional Council and Posses valid Import Export code and RCMC issued by Fed-eration of Indian Export Organisation.



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

WHOLLY-OWNED SUBSIDIARY COMPANIES

M/S SLCL Overseas FZC, Sharjah U.A.E

M/S SLCL Overseas FZC, Sharjah U.A.E., a wholly-owned sub-sidiary, recorded a turnover of Rs. 142.74 Crores as compared with Rs. 234.96 Crores in the last year.

Shri Lakshmi Defence Solutions Ltd.

During 2012-13, Shri Lakshmi Defence Solutions Ltd. has achieved a turnover of Rs. 18.49 Crores as compared with Rs. 15.17 Crores in 2011-12, thereby registering a growth of 21.88% over the last year. However the net profit decreased to Rs. 1.86 crores in 2012-13 as compared with Rs. 2.58 crores in 2011-12.

Approved Supplier Registered with

Indian Army, Navy, Air Force, Ordinance Factories

Directorate General of Supplies & Disposal Director General of Quality Assurance

All central paramilitary State Police forces

Forces Ministry of Defence (Navy) Defence Material Stores R&D Est

Indian Railways Federation of Indian Export Organization RDSO (Indian Railways Indian Postal Department

M/s Synergy Global Home Inc.

During the year, M/s Synergy Global Home Inc., U.S.A has achieved revenue of Rs. 18.25 crores as compared with Rs. 26.66 Crores in 2011-12. However, the company, achieved a profit of Rs. 11.08 lacs in 2012-13 as compared with a previ-ous year’s loss of Rs. 3.67 crores.

EXEMPTION UNDER SECTION 212(8) OF THE COMPANIES ACT, FOR NOT ATTACHING THE BALANCE SHEET OF THE SUB-SIDIARY COMPANIES

In view of the directions issued by the Ministry vide General Circular No: 2 /2011, dated 08.02.2011 in regard to exemp-tion under Section 212(8) of the Companies Act, for not at-taching the balance sheet of the subsidiary concerned; there-fore, Board of Directors of your Company have given their consent for not attaching the balance sheet of the subsidiary concerned;

The Annual Accounts of the subsidiary companies shall also be kept for inspection by any shareholders in the head office of the holding company and of the subsidiary companies con-cerned. The Company shall furnish a hard copy of details of accounts of subsidiaries to any shareholder on demand.

ONGOING EXPANSION

Technical Textile Project

The company is one of the earliest entrants in Technical Tex-tile products which has higher margins compare to traditional textile products. The company has installed facility which is as per international standards and since the demand for technical textile products is increasing, the company would focus more on selling these products across the globe.

Spinning Unit

The company has set up a spinning project at Malwan and started commercial operations but it requires additional amount of Rs.12.00 crores which is due to cost escalation to make plant fully operational. The operation of this plant will act as a backward integration for the company and will help company to save around Rs. 24.00 crores per annum which will add into EBIDTA margin of the company. The company is currently buying yarn which is the raw material for textile from the open market. The market price for the yarn is very volatile and it affects the company margin due to huge fluctuation in prices in resent past.

DIRECTORS

Pursuant to the provisions of the Companies Act, 1956 and Articles of Association of the Company, the Directors of the Company namely, Dr G. N. Mathur and Shri R K Garg are liable to retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, have offered themselves for reappointment.

CHANGE IN DIRECTORSHIP

During the year 2012-13, Mr. Pramod Kumar Singh has joined our Board as an Independent Director with effect from 28th February 2013. Mr. Pramod Kumar Singh has been a former Advisor to Union Textile Minister and has a rich experience of more than 25 years in media and politics.

During the year 2012-13, Dr. G.N. Bajpai, Mr. R.S. Srivastava and Mr. K.D. Gupta have resigned from the Directorship of the Company. The Board places on record their appreciation of the valuable advice and guidance given by them while they were Directors of the Company.

SHARE CAPITAL

During the year 2012-13, the Company has allotted the follow-ing nos. of equity shares:

(i) 376810 nos. of equity shares at a pre-determined price of Rs. 108.41 per share after conversion of FCCB amounting to USD 10,00,000. Consequently, the paid up capital of the company is increased to Rs. 28, 47, 06,450.



(ii) The Board has approved the allotment of Share Warrants to promoters / business associates, on preferential basis towards the promoters’ contribution to the CDR scheme, subject to the approval of the shareholders and regula-tory authorities.

NON-CONVERTIBLE DEBENTURES (NCDs)

During the year, the Company has issued Non- Convertible De-bentures (NCDs) worth Rs. 40 crores to Central Bank of India for a period of 5 years and the proceeds thereof were utilized for payment of their Mezzanine debt of Rs. 40 crores.

EXTERNAL COMMERCIAL BORROWINGS (ECB)

During the year, the company has raised External Commercial Borrowings (ECB) to the tune of USD 5.00 Mn from UCO Bank and the proceeds thereof were utilized for redemption of FC-CBs worth USD 5.00 MN held by UCO Bank itself.

PLEDGE OF SHARES

As per the terms and conditions stipulated in CDR package, 42,23,568 no,s of equity shares belonging to promoter group were pledged with M/s Centbank Financial Services Ltd, a se-curity trustee appointed by the Lender Banks.

DIVIDEND

Since the Company has incurred the loss, your Directors, have not recommended any dividend for the accounting year ended on 30th June, 2013.

CREDIT RATING

Since the Company has gone into CDR therefore the CARE Rating, a credit rating agency has assigned the rating to the Long term bank facilities, Short term bank facilities and Non-Convertible Debenture(NCD) as CARE D (Single D)due to the stressed liquidity position of the Company vide their letter dated March 21, 2013.

AUDITORS

M/s Pradeep & Associates, Chartered Accountants, Auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting and, being eligible, offer themselves for reap-pointment. The observations of Auditors in their report read with notes to the accounts are self-explanatory and do not call for further explanation.

COST AUDITOR

The Central Government’s Cost Auditor order specifies an audit of cost accounting records of the textile Company every year. This is applicable to the products manufactured by the Com-pany. The Board of Directors, subject to the approval of the Central Government, appointed Mr. A.K. Srivastava, Cost Ac-countants, Kanpur, to carry out cost audit for the current year.

INTERNAL AUDITOR

The Company appointed a firm of Chartered Accountants M/s Ajai Shanker and Company of Kanpur as internal auditors to review the internal control systems of the Company and report thereon. The Report of the Internal Auditors is reviewed by the Audit Committee.

ENVIRONMENTAL SUSTAINABILITY

With an increasing concern towards ecology and global warm-ing, consumers are favouring organic and eco-friendly textile products. Therefore, the demand of organic cotton is acceler-ating with brands and retailers continuing to implement long-term commitment to increase their use of organic cotton. Your Company also continues to pursue its mission for environmen-tal excellence and constantly explores opportunities to improve ecology and the environment.

RESEARCH AND DEVELOPMENT

Innovation has always been a part of SLCL policy. The continu-ous R&D efforts enabled the company to product innovation. The company posses in-house R&D facilities which results in cost saving.

Company’s R&D strategy is anchored on the development and speedy commercialization of globally competitive products, processes and technologies through best-in-class research interventions backed by world-class infrastructure. It has a strong R&D cell for advanced testing laboratories. The Com-pany is recognized as an In-house R&D unit by Department of Science and Industrial Research, Ministry of Science and Technology.

INSURANCE

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

MANAGEMENT DISCUSSION AND ANALYSIS FOR THE YEAR 2012-13

As required under Clause 49 of the Listing Agreement with Stock Exchanges, Management discussion and analysis for the year 2012-13 forms part of this Report and is annexed in the Annual Report.

CORPORATE GOVERNANCE REPORT FOR THE YEAR 2012-13

Corporate Governance Report for the year 2012-13 as re-quired by Clause 49 of the Listing Agreement together with the Report of the Auditors of the Company in this regard is annexed herewith.

GREEN INITIATIVE FOR PAPER LESS COMMUNICATIONS

In accordance with MCA’s recent circulars bearing no.17/2011 dated 21.04.2011 and 18/2011 dated 29.04.2011, your company now sends documents and various other notices (in-



cluding notice calling Annual General Meeting, Audited Finan-cial Statements, Directors’ Report, Auditor’s Report etc) to the shareholders through electronic mode to the registered e-mail addresses of shareholders.

STATUTORY INFORMATION

(A) Particulars of employees

The industrial relations throughout the year under review remained cordial. As none of the employees of the Com-pany was in receipt of remuneration in excess of the limits prescribed, the particulars of employees under Section 217(2A) of the Companies Act 1956, read with the Companies (Particulars of Employees) Amendment Rules, 2011, were not given.

(B) Conservation of energy, technology absorption and for-eign exchange earnings and outgo

Particulars with respect to conservation of energy, among others, as required under Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclo-sure of Particulars in the Report of Board of Directors) Rules, 1988 are set out in the Annexure forming part of this Report.

(C) Directors’ responsibility statement

As required under Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

1. In the preparation of the annual accounts, the applicable accounting standards were followed and there are no ma-terial departures;

2. The Directors selected such accounting policies and

applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the period;

3. The Directors took proper and sufficient care to maintain adequate accounting records in accordance with the pro-visions of this Act for safeguarding the assets of the Com-pany and for preventing and detecting fraud and other irregularities.

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

STATUTORY DISCLOSURES

None of the Directors are disqualified under the provisions of Section 274(1) (g) of the Companies Act, 1956. The Directors have made the requisite disclosures, as required under the provisions of the Companies Act, 1956 and Clause 49 of the Listing Agreement.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation of the timely support provided by the Company’s bankers, CDR cell officials, all the vendors and tie-up entities and the dedication and commitment of the employees at all levels.

Your Directors convey their grateful thanks to all the Govern-ment authorities and shareholders for their continued and un-stinted assistance, co-operation and patronage.

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

Registered office: For and on behalf of the Board 19/X-1, Krishna Puram,G.T. Road, Kanpur DEVESH GUPTA DR M P AGARWALDate : 5th December, 2013 Deputy Managing Director Chairman and Managing Director



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

(A) CONSERVATION OF ENERGY

(a) Energy conservation measures taken:

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

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

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

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

• Optimum use of compressors during lean period of operations.

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

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

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

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

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

(b) Additional investment and proposals being im-plemented for reduction of consumption of en-ergy:

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

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

2) 7 MW Bio Mass based captive power plant commissioned at Malwan.

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

4) To conserve the environment, we are plan-ning to install Fly Ash Making Brick and Paver plants.

5) Installed 10 Tons Per Day pilot plant for mak-ing Sodium Silicate by using Boiler Fly Ash, to conserve the environment.

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

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

8) Proposed to install total plant condensate re-covery system, due to which Boiler MB wa-ter requirement will be reduced.

9) Undergoing trial for switching the fuel from coal to biomass in the existing 8 MW cap-tive co- generation plant and Thermic Fluid Heater is going on at Malwan unit.

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

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

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

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

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

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

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

Annexure ‘A’ to the Directors’ Report



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

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

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

Other Regular Benefits derived as a result of above efforts:

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

(ii) Product quality improvement and better stability.

(iii) Increased use of alternative fuels.

(iv) Cost reduction in an inflationary scenario.

(v) Reduction in specific energy consumption.

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

(C) FOREIGN EXCHANGE EARNINGS AND OUTGO

Foreign exchange earnings and outgo

2012-13 2011-12

i) Total earnings of foreign exchange

25,183.71 25,803.71

ii) Total outgo in foreign ex-change

9,565.23 19,877.27

(Rs. in Lacs)

Registered office: For and on behalf of the Board 19/X-1, Krishna Puram,G.T. Road, Kanpur DEVESH GUPTA DR M P AGARWALDate : 5th December, 2013 Deputy Managing Director Chairman and Managing Director



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

COMPANY’S PHILOSOPHY ON CODE OF CORPORATE GOVER-NANCE

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

The Board plays a critical role in overseeing how the manage-ment serves the short and long-term interests of shareholders and other stakeholders. This belief is reflected in our gover-nance practices, under which we strive to maintain an effec-tive, informed and independent Board.

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

Name and designation of the Director

Category

of Directorship

Number of Board-meetings attended

Atten-dance at the last

AGM

Number Direc-torship* in other

companies

Committee position held**

Chairman Member

Dr Mata Prasad Agarwal (Chairman and Managing Director)

Number of Board Pro-moter Executive Director

7 Yes 7 1 Nil

Shri Pawan Agarwal (Joint Manag-ing Director)

Promoter Executive Director

6 Yes 5 1 1

Shri Devesh Gupta (Deputy Man-aging Director)

Executive Director 7 Yes 3 Nil 1

Shri Dileep Bajaj Executive Director 7 - Nil Nil 1

Smt. Sharda Agarwal Promoter Executive Director

6 Yes 2 Nil Nil

Shri R K Garg Non-Executive Indepen-dent Director

2 - Nil 1 2

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

2 - 1 Nil 1

Shri R. S. Srivastava#2 Non-Executive Indepen-dent Director

4 Yes Nil 1 2

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

6 - 3 1 1

Dr G. N. Bajpai#3 Non-Executive Indepen-dent Director

1 - 13 Nil 1

Shri Pramod Kumar Singh ## Non-Executive Indepen-dent Director

1 - - - 1

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

BOARD OF DIRECTORS

During the year 2012-13, the Company had an optimum com-bination of Executive and Non-Executive Directors as per the Corporate Governance requirements. The Board of Directors of the Company Consists of eminent persons with considerable professional expertise and experience in business and indus-try, finance, management etc. As on 30th June, 2013 the Board comprised 10 Directors.

NUMBER OF BOARD MEETINGS HELD AND THE DATES THERE-OF

During the accounting year 2012-13, 7 meetings of Board of Directors were held. The meetings were held on 6th July 2012, 14th August 2012, 22th October 2012, 12th Novem-ber 2012, 3rd December 2012, 28th February 2013 and 15th May, 2013. The maximum time gap between any two meetings was not more than four calendar months.



to secure the attendance of outsiders with relevant experi-ence and expertise, when considered necessary.

The role of the Committee includes the following:

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

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

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

• Any changes in accounting policies and practices

• The going concern assumption

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

• Significant adjustments arising out of audit

• Compliance with Accounting Standards

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

• Related party transactions

• Qualifications in draft audit report

• Report of the Directors & Management Discussion and Analysis;

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

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

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

Composition

The Company has an Audit Committee comprising three Di-rectors, all being Non-Executive-Independent named Shri R K Garg, Dr. G N Mathur and Shri Pramod Kumar Singh. The Audit Committee is chaired by Shri R K Garg. The Company Secretary acts as the Secretary to the Audit Committee. Mr

Notes:

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

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

#1 resigned on 30th September 2013

#2 resigned on 30th September 2013

#3 resigned on 28th February 2013

## appointed w.e.f. 28th February 2013

BOARD PROCEDURE:

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

INFORMATION PLACED BEFORE THE BOARD

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

COMMITTEES OF THE BOARD

Audit Committee

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

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

• Obtain legal or other independent professional advice and



Pradeep Gupta, M/s Pradeep & Associates, Statutory Auditors, was invited to be present at all the Audit Committee meetings.

The terms of reference of the Audit Committee are in conformity with the requirements specified in Clause 49 of the Listing Agreement with the Stock Exchanges and also comply with the requirements of Section 292A of the Companies Act, 1956. During the accounting year five Audit Committee Meetings were held on 14th August 2012, 12th November 2012, 3rd December 2012, 28th February 2013 and 14th May, 2013.

Details of the attendance at the meetings are as follows :

Serial No. Name Attendance

1 Shri R.K. Garg 5

2 Shri R S Srivastava# 5

3 Shri K D Gupta# 5

4 Dr G N Mathur 3

5 Shri Pramod Kumar Singh 1

# Dr G N Mathur and Shri Pramod Kumar Singh appointed as a committee member of the Company w.e.f. 14th May 2013 . Shri R S Srivastava & Shri K D Gupta ceased to be Directors of the Company w.e.f. 30th September 2013

Internal Auditors and Internal Audit System

The Company appointed a firm of Chartered Accountants M/s Ajai Shanker & Company of Kanpur as Internal Auditors to re-view the internal control systems of the Company and report thereon. The report of Internal Auditors is periodically reviewed

Name Designation All elements of re-muneration pack-age i.e. salary, perks, benefits, bonuses and pen-sion, among oth-ers (Rs. in lacs/ p.a.) (2012-13)

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

All elements of re-muneration package i.e. salary, perks, benefits, bonuses and pension, among others (Rs. in lacs/ p.a.) (2011-12)

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

Dr M. P. Agarwal Managing Director 48.00 NIL 39.00

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

Mr Pawan Kumar Agarwal

Joint Managing Director

30.00 NIL 24.00

Mr Devesh Narain Gupta

Dy. Managing Direc-tor

24.00 NIL 19.50

Smt. Sharda Agar-wal

Executive Director 15.00 NIL 12.00

Mr Dileep Bajaj Executive Director 24.00 NIL 19.50

by the Audit Committee of the Board and necessary directions are issued whenever required.

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

Cost Auditor

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

Remuneration Committee

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

The Remuneration Committee comprises three Non-Executive Directors, namely Shri R. S. Srivastava, Shri R. K. Garg and Dr G. N. Mathur, all of them being Independent, including the Chairman of the Committee. During 2012-13, the meeting of the Remuneration Committee was held on December 3rd, 2012 and were attended by all Directors.

Details of remuneration paid to all the Directors for the year ended on 30th June, 2013:

a) Executive Directors (Managing/Wholetime Directors) De-tails of remuneration paid for the year ended 30th June, 2013 to Managing/Whole time Directors are as follows :



b) Non-Executive Directors

During 2012-13, the Company did not pay any remuneration to Non-Executive Directors except sitting fees to each Non-Executive Director for attending meetings of the Board of Di-rectors and Committees thereof. The criterion for payment of sitting fees to Non-Executive Directors is based on the provi-sions of the Companies Act, 1956 and is well within the statu-tory ceiling fixed in this regard.

Finance Committee

The Committee comprises four Executive Directors chaired by Dr M P Agarwal. The Finance Committee met 22 times during the year. The Committee is primarily looking after the day-to-day business activity of the Company within Board approved directions/framework. Details of the attendance at the meeting are as follows:

Serial No. Name Attendance

1 Dr M P Agarwal 22

2 Shri Pawan Kumar Agarwal 20

3 Shri Devesh Gupta 20

4 Shri Dileep Bajaj 18

Shareholders/ Investor’s Grievance Committee

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

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

Compliance officer

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

Investor Grievance Redressal:

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

advices on matters which can facilitate better investor services and relations.

GREEN INITIATIVE FOR PAPER LESS COMMUNICATIONS:

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

Risk management

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

• Identification of risks• Assessment of risk• Risk control and mitigation

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

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

Whistle Blower Policy

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

a) Applicability:-

This policy is applicable to the following:- 1. Customers 2. vendors 3. Employees 4. Directors and other Managerial Staff



b) Disclosure/Reporting:-

Every Stakeholder i.e. Director, employee, customers, vendor etc. of the Company are free to disclose in writ-ing, the violation of rules, regulations and laws or unethical conduct to their immediate supervisor/notified person.

The Directors and Senior Management of the Company

Postal ballot

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

Disclosures

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

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

c. The Company did not adopt any whistle blower policy.

However, the Company did not deny access to any personnel to approach the management or the Audit Committee on any issue

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

Means of communication

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

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

Year ended Time Day Place Number of special resolution passed

31st October 2012 11:30 am Friday 19/X-1, Krishnapuram, G.T. Road, Kanpur 5

Extra-Ordinary General Meetings

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

maintains confidentiality of any such information rendered and also ensures that Whistle Blower Policy adopted by Company is not under discriminatory dominance.

General Body Meetings

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

Year ended Date Time Day Place Number of special resolutions passed

June 30, 2010 November 27, 2010

11:00 am Saturday 19/X-1, Krishnapuram, G.T. Road, Kanpur

5

June 30, 2011 December 30, 2011

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

-

June 30, 2012 December 31, 2012

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

3

Category Number of shares held Percentage of share holding

(A) Promoters’ holding*

- Indian promoters 1,33,14,586 46.77

- Foreign promoters - -

Sub-Total (A) 1,33,14,586 46.77

Share holding Pattern for the year ended June 30, 2013:



Category Number of shares held Percentage of share holding

(B) Non-promoters’ holding

(1) Institutional investors

- Mutual Funds - -

- Financial Institutions/Banks 1,50,000 0.53

- Central Govt./State Govt. - -

- Venture Capital Funds - -

- Insurance companies - -

- Foreign Institutional investors 19,19,620 6.74

- Foreign Venture Capital investors - -

- Foreign/ Financial Institutions/Banks - -

Sub-total (B)(1) 2,06,96,320 7.27

(2) Others

- Domestic companies 73,38,106 25.77

- Individuals 38,11,801 13.38

- HUF 1,98,618 0.70

- NRI’s 1,61,001 0.57

- Clearing members 6,903 0.02

- Trust - -

- Foreign Corporate bodies 15,70,000 5.51

Sub-total (B) (2) 1,30,86,429 45.96

Total Public Shareholding (B)= (B)(1)+(B)(2) 1,51,56,059 53.23

Grand total (A)+(B) 2,84,70,645 100.00

* The promoters holding is pledged with CFSL / IFCI.

The diagrammatic representation of the shareholding pattern as on 30th June, 2013:

DomesticCompanies

25.77%

Banks 0.53%

FIIs, NRIs, Foreign Body Corporates

12.82%

Individuals 13.39%

Promoters & Pro-moters Group

46.77%

HUF0.70%

Clearing Members0.02%



Shareholding of nominal value of Shareholders Shares amount

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

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

Up to - 5000 8,099 84.51 1,20,05,420 4.22

5001 - 10000 713 7.44 57,84,380 2.02

10001 - 20000 348 3.63 52,59,970 1.85

20001 - 30000 125 1.30 32,06,430 1.13

30001 - 40000 46 0.48 16,78,240 0.59

40001 - 50000 41 0.43 19,38,280 0.68

50001 - 100000 74 0.77 54,48,120 1.91

100001 and above 138 1.44 24,93,85,610 87.60

Total 9,584 100.00 28,47,06,450 100.00

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

Shares Trades Turnover H-L C-OJuly 12 107.50 110.80 80.00 101.70 27,69,510 17,880 28,90,12,357 30.80 -5.80

August 12 102.20 106.85 78.30 80.95 16,72,324 14,859 16,31,45,956 28.55 -21.25

September 12 81.75 92.20 58.10 89.90 25,06,136 47,952 21,06,70,884 34.10 8.15

October 12 90.10 93.25 77.90 81.25 1,85,903 3,935 1,65,73,734 15.35 -8.85

November 12 80.30 90.00 76.00 84.30 1,41,137 2,154 1,18,21,665 14.00 4.00

December 12 84.20 90.85 77.00 77.30 2,23,575 4,211 1,86,84,255 13.85 -6.90

January 13 78.55 80.60 65.55 70.30 1,39,210 3,249 1,02,20,785 15.05 -8.25

February 13 72.00 72.00 58.00 58.35 67,008 2,077 42,91,985 14.00 -13.65

March 13 54.65 54.65 26.75 29.10 2,80,820 4,868 1,11,15,809 27.90 -25.55

April 13 29.00 40.80 29.00 35.00 44,714 483 16,41,010 11.80 6.00

May 13 33.50 36.95 22.85 23.30 96,734 586 25,93,029 14.10 -10.20

June 13 23.20 23.20 17.55 23.00 70,416 1,209 14,37,616 5.65 -0.20

*Spread

H-L: High-Low

C-O: Close-Open

Distribution of share holding as on 30th June, 2013:

Stock market price data for the year 2012-2013 at BSE SENSEX:

Scrip Code: 526049 Company : SHRI LAKSHMI COTSYN LTD. Period: July 2012 to June 2013

(All Prices in Rs.)



General share holder information:

25th Annual General Meeting (for year ended June 30, 2013

Day: MondayDate: December 30, 2013Time: 11:30 am Venue: 19/X-1, Krishnapuram, G.T. Road, Kanpur

Accounting calendar years For the accounting year 2012-13, the interim and final results were announced on: a. 1st quarter results - Second week of August 2012b. 2nd quarter results- Second week of November 2012c. Yearly audited results : First week of December 2012d. 3rd quarter results- Third week of May, 2013e. 4th quarter & Annual results- Fifth week of September 2013

Date of book closure Friday, 27th December, 2013 to Monday, 30th December, 2013 (both days inclusive).

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

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

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

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

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

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

Dematerialization of shares and liquidity ISIN Code - equity shares: INE 851 B01016As on June 30, 2013, 93.09 % of the total equity shares of the Company were dematerialized. Trading in equity shares of the Company is permitted only in dematerialized form, as per the notification issued by the Securities and Exchange Board of India (SEBI).

DECLARATION

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, I, Dr. M P Agarwal, Chairman and Managing Director of Shri Lakshmi Cotsyn Ltd, declare that all Board members and Senior Executives of the Company have affirmed their compliance with the Code of Conduct for the accounting year 2012-13.

Place : Kanpur Dr. M P AgarwalDate : 5th December 2013 Chairman and Managing Director



TO

THE MEMBERS,

M/S SHRI LAKSHMI COTSYN LIMITED

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

We have examined the compliance of conditions of Corporate Governance by M/S SHRI LAKSHMI COTSYN LIMITED for the year ended 30th June, 2013 as stipulated in Clause 49 of the Listing Agreement of the said Company with the Stock Exchange(s).

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

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

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

For PRADEEP & ASSOCIATES Chartered Accountants

P. K. GUPTADate : 30th September 2013 PartnerPlace : Kanpur Membership No. 70492

Certificate

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


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

(a) I have reviewed financial statements and the cash flow statement for the year ending June 30, 2013 and that to the best of my knowledge and belief:

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

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

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

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

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

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

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

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

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

Place : Kanpur Dr M P Agarwal

Date : 30th September 2013 Chairman & Managing Director

CEO/CFO Certification




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

We have audited the accompanying financial statements of M/s Shri Lakshmi Cotsyn Ltd. which comprise the Balance Sheet as at 30th June, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explana-tory information.

Management is responsible for the preparation of these finan-cial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

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

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

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

a) in the case of the Balance Sheet, of the state of af-fairs of the Company as at June 30, 2013;

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

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

1. As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a) We have obtained all the information and explana-tions which to the best of our knowledge and belief were necessary for the purpose of our audit.

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

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

d) In our opinion, the Balance Sheet, Statement of Prof-it and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956.

e) On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

For PRADEEP & ASSOCIATESChartered Accountants

FRN:001254C CA. P.K. GuptaPlace: Kanpur PartnerDate: 30th September 2013 Membership No.:070492

Independent Auditor’s Report



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

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

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

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

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

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

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

3. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted loans, se-cured or unsecured, to companies firms or other par-ties listed in the register maintained under Section 301 of the Companies Act, 1956. Consequently, the provisions of clauses iii (b), iii(c) and iii (d) of the order are not applicable to the Company.

(e) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not taken loans from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Thus sub clauses (f) & (g) are not applicable to the company.

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

5. a) Based on the audit procedures applied by us and ac-cording to the information and explanations provided by the management, there are no contracts or ar-rangements referred to in section 301 of the Act.

b) This Clause is not applicable as stated above.

6. The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Com-panies Act, 1956.

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

8. As per information & explanation given by the manage-ment, maintenance of cost records has been prescribed by the Central Government under clause (d) of sub-sec-tion (1) of section 209 of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

9. (a) According to the records of the company, undisput-ed statutory dues including Investor Education and Protection Fund, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other statutory dues have been regularly deposited with the appropriate authori-ties except Provident Fund & Employees’ State Insur-ance. According to the information and explanations given to us there were outstanding statutory dues of Provident Fund & Employees’ State Insurance as on 30th June, 2013 for a period of more than six months from the date they became payable.

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

Annexure to the Auditor’s ReportThe Annexure referred to in paragraph 1 of the Our Report of even date to the members of Shri Lakshmi Cotsyn Limited. On the accounts of the company for the year ended 30th June, 2013.



10. The Company has accumulated loss of Rs. 40862.37 Lakhs and has incurred cash loss of Rs. 25987.80 Lakhs during the financial year covered by our audit.

11. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders except the payment of FCCB worth USD 2.80Mn.

12. As without Qualifying in our opinion, the attention is invited to the stakeholders that the company due to the liquidity crunch has opted Corporate Debt Restructuring Mechanism envisaged under RBI guidelines & has made reference to CDR cell in February 2013. The CDR package of the Company was approved by the CDR cell vide Letter of Approval (LOA) dated 28th June 2013 and Master Restructuring Agreement (MRA) was signed on 29th June 2013 by the 18 Joint lender Banks out of 20 Bankers. The rest Bankers have signed after 30th June 2013.The CDR package is under implementation.

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

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

15. According to information and explanations given to us, the Company is not trading in Shares, Mutual funds & other Investments. Proper records & timely entries have been maintained in this regard & further investments specified are held in their own name.

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

17. Based on our audit procedures and on the information given by the management, we report that the company

has raised term loans during the year. Besides, the External Commercial Borrowings (ECB) to the tune of USD 5.00 Mn was raised from UCO Bank and the proceeds thereof was utilised for the redemption of FCCBs worth USD 5.00 Mn held by UCO Bank itself.

18. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 30th June 2013, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

19. Based on the audit procedures performed and the infor-mation and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year. However the Com-pany has converted its existing FCCB amounting to USD 1 Million into equity shares.

20. During the year, the Company has issued Non- Convertible Debentures (NCDs) worth Rs. 40 crores to Central Bank of India.

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

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

For PRADEEP & ASSOCIATESChartered Accountants

FRN:001254C CA. P.K. GuptaPlace: Kanpur PartnerDate: 30th September 2013 Membership No.:070492



Particulars Note No.

As at 30 June, 2013

As at 30 June, 2012

A. EQUITY & LIABILITIES1. Shareholder's Funds

(a) Share Capital 1 2,847.06 2,809.38 (b) Reserves and Surplus 2 30,812.09 71,996.30 (c) Minority Interest 3 9.31 8.32 (d) Money received against Share Warrants – –

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

(a) Long-Term Borrowings 4 1,75,354.46 1,39,174.41 (b) Deferred Tax Liability (Net) 14,092.45 9,307.20 (c) Other Long-Term Liabilities – – (d) Long-Term Provisions 6,106.75 2,515.25

4. Current Liabilities(a) Short Term Borrowings 5 1,04,332.37 92,934.53 (b) Trade Payables 14,201.48 8,676.62 (c) Other Current Liabilities 6 516.52 173.14 (d) Short-Term Provisions 7 376.79 1,865.57

3,55,129.81 3,35,941.24 B. ASSETS

1. Non-Current Assets(a) Fixed Assets

(i) Tangible Assets 8 1,77,598.52 1,62,736.94 (ii) Intangible Assets 9 33.95 33.95 (iii) Capital Work-in-Progress – 14,567.97 (iv) Intangible Assets under development – – (v) Fixed Assets held for sale – –

(b) Non-Current Investments 10 8,162.50 8,162.50 (c) Deferred Tax Assets (Net) – – (d) Long Term Loans & Advances 11 8,772.38 9,200.79

2. Current Assets(a) Current Investments 12 700.08 700.08 (b) Inventories 13 74,382.10 74,550.13 (c) Trade Receivables 14 41,253.72 64,729.70 (d) Cash and Cash equivalents 15 916.56 769.56 (e) Other Current Assets 16 43,310.00 489.62

3,55,129.81 3,35,941.24 See accompanying notes forming part of the financial statements

Consolidated Balance Sheet As at 30th June, 2013 (Rs. in Lacs)

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

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

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

Place: KanpurDate: 30th September, 2013



Particulars NoteNo.

As at 30 June, 2013

As at 30 June, 2012

A CONTINUING OPERATIONS1 Revenue from operations (gross) 17 1,92,219.66 2,39,679.20

Less : Excise duty – – Revenue from operations (net) 1,92,219.66 2,39,679.20

2 Other income 18 2,434.34 2,533.833 Total revenue (1+2) 194,654.00 2,42,213.034 Expenses

(a) Cost of materials consumed 19 1,62,937.11 2,01,647.34 Purchases of stock-in-trade (b) Changes in inventories of finished goods, work-in-progress and stock-in-trade

20 653.37 (16,254.96)

(c) Employee benefits expense 21 6,737.84 6,730.51 (d) Finance costs 22 35,672.53 20,506.98 (e) Depreciation and amortisation expense 23 10,169.67 6,166.56 (f) Other expenses 24 15,171.01 5,449.91 Total Expenses 2,31,341.53 2,24,246.34

5 Profit / (Loss) before exceptional and extraordinary items and tax (3 - 4) (36,687.53) 17,966.696 Exceptional items – –7 Profit / (Loss) before extraordinary items and tax (5 ± 6) (36,687.53) 17,966.698 Extraordinary items 25 (81.27) 1,078.039 Profit / (Loss) before tax (7 ± 8) (36,768.80) 16,888.6610 Tax expense

(a) Current tax expense for current year – 1,128.71 (b) Deferred tax 4,785.25 4,712.62

4,785.25 5,841.33 11 Profit / (Loss) from continuing operations (9 ±10) (41,554.05) 11,047.33

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

attributable to the discontinuing operations– –

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

13 Profit / (Loss) from discontinuing operations (12.i ± 12.ii ± 12.iii) – – 14 Profit / (Loss) for the year (11 - 12 To 13) (41,554.05) 11,047.33 15 Earnings Per Equity Share (of Rs. 10/- Each) (145.95) 39.32

Consolidated Statement of Profit & Loss For the year ended 30th June, 2013 (Rs. in Lacs)


For PRADEEP & ASSOCIATES Dr. M. P. Agarwal Devesh GuptaChartered Accountants Chairman Dy. Managing DirectorFRN 001254CP. K. Gupta Rakesh Kumar Shrivastava Vivek SaxenaPartner Company Secretary cum Finance Controller Head-AccountsMembership No.: 070492 Place: KanpurDate: 30th September, 2013

See accompanying notes forming part of the financial statements



Consolidated Notes forming part of the financial statements

Particulars As at30 June, 2013

As at30 June, 2012

1 SHARE CAPITAL

Authorised

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

5,000.00 5,000.00

Issued, subscribed and fully paid-up shares

2,84,70,645 Equity Shares of Rs. 10/- each fully paid-up 2,847.06 2,809.38

2,847.06 2,809.38

Reconciliation of the number of Equity Shares outstanding:

Equity shares outstanding at the beginning of the year 2,80,93,835 2,10,93,835

Equity shares allotted during the year 3,76,810 70,00,000

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


As at30 June, 201 2

2 RESERVES AND SURPLUS

(i) Securities Premium Account

Balance as per last financial statement 20,838.37 10,618.37

Add : Additions during the year 370.82 10,220.00

Less : Deduction during the year - -

Closing Balance 21,209.19 20,838.37

(ii) Capital Reserves Account

State Capital Subsidary 12.19 12.19

Add : Additions during the year - -

Closing Balance 12.19 12.19

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


Add: Profit for the year **{(41554.05) -.98} (41,555.03) 11,046.05

Total 9,590.71 51,145.74

Total Reserve and Surplus (i to iii) 30,812.09 71,996.30

No. of Shares

Name of shareholder 30 June, 2013 30 June, 2012

Nil Nil

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

(Rs. in Lacs)





As at30 June, 2012

4 LONG-TERM BORROWINGS

Secured Loan :

Secured Loans from Banks 1,60,765.79 1,20,726.45

Mezannine Debt 12,841.75 17,689.47

Unsecured Loan :

Unsecured Loan 1,746.92 758.49

Total 1,75,354.46 1,39,174.41


As at30 June, 2012

5 SHORT TERM BORROWINGS

Short Term Loan for Project 35,190.36 12,004.77

Working Capital Loan 69,142.01 80,929.76

Total 1,04,332.37 92,934.53


As at30 June, 2012

6 OTHER CURRENT LIABILITIES

Unpaid Dividend 25.66 30.45

Statutory remittances 490.86 142.69

516.52 173.14


As at30 June, 2012

7 SHORT TERM PROVISIONS

Provision for Tax – 1,128.42

Provision for Expenses 376.79 737.15

376.79 1,865.57


As at30 June, 2012

3 MINORITY INTEREST

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

Add : 0.5% Reserve & Suplus

** Rs.666.49 * 0.50% = Rs. 3.33 Lacs

*** Rs.195.56* 0.50% = Rs. 0.98 Lacs 4.31 3.32

Total Reserve and Surplus (i to iii) 9.31 8.32

(Rs. in Lacs)





As at30 June, 2012

9 INTANGIBLE ASSETS / GOODWILL

Share Capital of Synergy 1.69 1.69

Less : Reserve & Surplus of Synergy Opening Balance Rs. 42.79 (100% holding)

42.79 42.79

41.10 41.10

Less : Investment 7.15 7.15

33.95 33.95


As at30 June, 2012

10 NON-CURRENT INVESTMENT

Quoted Shares 38.56 38.56

Un-Quoted Shares 8,123.94 8,123.94

8,162.50 8,162.50


As at30 June, 2012

11 LOANS AND ADVANCES

Capital Advances 7,048.25 5,932.44

Security Deposits 845.40 1,265.29

Others Loan and Advances 460.64 717.15

Advances Tax 328.21 1,182.04

Prepaid Expenses 89.88 103.87

8,772.38 9,200.79

8 FIXED ASSETS

Particulars GROSS BLOCK DEPRECI ATION NET BLOCK

As on 01.07.2012

Addition As on 30.06.2013

Upto 01.07.2012

For the year

As on 30.06.2013

As on 30.06.2012

As on 30.06.2013

Land 2,175.76 0.28 2,176.04 - - - 2,175.76 2,176.04

Building 18,898.09 5,924.43 24,822.52 2,021.25 779.33 2,800.58 16,876.84 22,021.94

Plant & Machinery 1,60,500.51 18,932.08 1,79,432.59 17,989.84 9,213.42 27,203.26 1,42,510.67 1,52,229.33

Furniture & Fixture 494.31 54.98 549.29 102.68 38.89 141.57 391.63 4 07.72

Office Equipment 637.08 40.91 677.99 240.75 70.61 311.36 396.33 366.63

Vehicles 681.45 78.57 760.02 295.74 67.42 363.16 385.71 396.86

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

Previous Year 93,671.53 89,715.66 1,83,387.19 14,483.70 6,166.56 20,650.26 79,187.83 1,62,736.94

(Rs. in Lacs)




As at30 June, 2012

13 INVENTORIES

(As certified by the Management)

Raw Materials 27,015.60 25,857.76

Work-in-Progress 25,744.08 22,148.24

Finished Goods 20,890.92 25,140.13

Stores and Spare-parts, etc. 731.50 1,404.00

74,382.10 74,550.13

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


As at30 June, 2012

14 TRADE RECEIVABLES

(Unsecured, Considered Good unless otherwise stated)

Outstanding for more than six months (from due date) 10,678.54 429.59

Considered Good 30,575.18 64,300.11

41,253.72 64,729.70


As at30 June, 2012

15 CASH AND BANK BALANCES

(a) Cash and cash equivalents:

Cash Balance on Hand (Including Stamps in Hand) 223.74 329.04

Balance with Banks in:

Current Accounts 667.16 410.07

(b) Earmarked balances with banks:

Unpaid Dividend Account 25.66 30.45

916.56 769.56


As at30 June, 2012

12 CURRENT INVESTMENT

Un-Quoted Shares 700.08 700.08

700.08 700.08

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




As at30 June, 2012

17 REVENUE FROM OPERATIONS

(i) Sale of Manufactured goods :

Suiting & Shirting 17,930.86 21,308.13

Technical Textile / Fusible Interlining 63,056.60 58,663.23

Quilting & Embroidery 1,196.14 677.12

Denim 29,340.47 41,770.47

Terry Towel 17,680.51 41,223.87

Home Furnishing 10,546.19 21,414.53

Bottom Weight 5,739.97 8,826.41

Garments 1,353.25 597.29

Misc. Sales 17,732.22 28,575.05

1,64,576.21 2,23,056.10

Export Sales 27,682.21 19,743.10

Less : Inter Company Sales 38.76 27,643.45 3,120.00

Revenue from Operations 1,92,219.66 2,39,679.20


As at30 June, 2012

18 OTHER INCOME

Miscellaneous Income 99.48 389.02

Duty Draw Back 2,334.86 1,301.45

Income on Sale of DEPB License - 843.36

2,434.34 2,533.83


As at30 June, 2012

16 OTHER CURRENT ASSETS

Accrued Duty Draw back 685.25 208.47

Accrued DEPB - 120.41

Advances against Others 36.39 75.27

Salary Advance 56.94 23.75

Slow Moving Assets 42,486.83 -

Advances against Travelling Expenses 44.59 61.72

43,310.00 489.62





As at30 June, 2012

19 COST OF MATERIALS CONSUMED

Raw Material Consumed ** 1,53,621.22 1,93,692.11

Packing Materials 2,330.52 1,638.97

Power & Fuel 6,188.63 5,665.81

Others 796.74 650.45

1,62,937.11 2,01,647.34


As at30 June, 2012

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

Work-in-Progress as at 30th June, 2013 25,744.08 22,148.24


(3,595.84) (5,800.54)

Finished Goods 30th June, 2013 20,890.92 25,140.13

Finished Goods 30th June, 2012 25,140.13 14,685.71

4,249.21 (10,454.42)

Net (Increase) / Decrease Inventories 653.37 (16,254.96)


As at30 June, 2012

21 EMPLOYEE BENEFIT EXPENSES

Salaries, wages and bonus 6,593.50 6,563.68

Employee welfare expenses 144.34 166.83

6,737.84 6,730.51


As at30 June, 2012

22 FINANCE COSTS

Interest Expenses 34,370.20 19,465.08

Bank Charges 1,302.33 1,041.90

35,672.53 20,506.98


As at30 June, 2012

23 DEPRECIATION AND AMORTIZATION EXPENSE

Depreciation of tangible assets 10,169.67 6,166.56

10,169.67 6,166.56





As at30 June, 2012

24 OTHER EXPENSES

Rent, Rate & Taxes 294.45 336.53

Insurance 106.58 70.09

Repair & Maintenance 287.25 562.31

Printing & Stationery 69.57 77.57

Postage & Telegram 125.73 165.64

Travelling & Conveyance 371.50 455.92

Meeting Expenses 1.88 14.33

Cost & Stock Audit Fee 0.41 0.30

Auditors Remuneration 19.29 23.37

Selling & Distribution Exp. 824.44 592.46

Legal Expenses 7.85 4.68

Advertisement 162.18 202.76

Freight Outward 1,023.18 1,116.15

Stores & Spares 674.62 798.54

Professional Charges 213.94 302.51

Discount 10,426.45 389.29

Misc. Expenses 561.69 337.46

15,171.01 5,449.91


As at30 June, 2012

25 EXTRA-ORDINARY ITEMS

(i) Trade Receivables 812.33 2,648.96

Less : Trade Payable 941.26 2,281.58

Exchange Loss (128.93) 367.38

(ii) Purchase of Synergy 86.42 3,830.65

Less : Sale to Synergy 38.76 3,120.00

Exchange Loss 47.66 710.65

Net Exchange Loss (81.27) 1,078.03








Significant Accounting Policies and Notes to AccountsAnnexure to and forming part of the Balance Sheet as at 30th June, 2013 and Statement of Profit & Loss for the year ended on

that date:

ACCOUNTING POLICIES AND NOTES TO ACCOUNTS

Principles of Consolidation:

The Consolidated Financial Statements relate to Shri Lakshmi Cotsyn Ltd. (the Company) and its subsidiary companies viz. SLCL

Overseas (FZC), Shri Lakshmi Defence Solutions Ltd. and Synergy Global Home Inc., U.S.A. The Consolidated Financial Statements

have been prepared on the following basis:

a) The Financial Statements of the company and its subsidiary companies have been combined on a line-by-line basis adding

together the book values of like items of assets, liabilities, income and expenses after fully eliminating intra group & Intra

group transactions resulting in unrealized profit & losses as per Accounting Standard 21- “The Consolidated Financial State-

ments” notified by the companies Accounting Standards Rules, 2006.

b) The Financial Statements of the subsidiaries used in the consolidation are drawn upto the same reporting date as that of the

company i.e., 30 June 2013.

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

d) The difference between the cost of investment in the subsidiaries, and the Company’s share of net assets at the time of

acquisition of shares in the subsidiaries is recognized in the financial statements as Goodwill or Capital reserves as the case

may be.

e) Minority Interest in the net assets of consolidated subsidiaries is identified and presented in the consolidated Balance Sheet

separately from liabilities and equity of the company’s shareholders.Minority interest in the net assets of consolidated sub-

sidiaries consists of:

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

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

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

the Group.

g) Accounting for Investments in Associate in Consolidated Financial Statements as per Accounting Standard – 23 “ Accounting

for Investment in Associates in Consolidated Financial Statements” notified by the companies (Accounting Standards) Rules,

2006.

SIGNIFICANT ACCOUNTING POLICIES

1) Basis of Accounitng:

The financial statements are prepared under the historical cost convention on an accrual basis of accounting in accordance

with the Generally Accepted Accounting Principles, Accounting Standards notified under Section 211(3C) of the Companies

Act, 1956 and the relevant provision thereof.

2) Valuation of Inventories:

Inventory of Raw Material, Stores, Spares and Consumables are valued at cost. Cost is arrived at weighted Average method.

Finished Goods and Semi Finished Goods are valued at cost of Raw Material at the respective units and conversion of these

includes the cost incurred in the normal course of the business, in bringing the goods upto the present condition or net

realizable value which is lower as accordance with the Accounting Standard-2 “ Valuation of Inventories” issued by ICAI.



3) Depreciation:

In respect , of all the assets depreciation is provided on straight line basis applying the rates specified in Schedule XIV of the

Companies Act, 1956. Further, depreciation on an asset, whose actual cost does not exceed Rs. 5000/- has been provided

at the rate of 100%.

4) Revenue Recognition:

In accordance with the provision of Section 209(3) of the Companies Act, 1956 and in accordance with Accounting Standard

-9 “Revenue Recognition”, the Company follows accrual basis of accounting except in respect of interest on security deposit

which is accounted for on Cash basis. Sales are invoiced on dispatch of goods to the customer.

5) Tangible Assets:

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

ciation.

6) Intangible Assets:

Intangible assets are valued at cost

7) Foreign Exchange Transaction:

As per Accounting Standard -11 “The Effect of Change in Foreign Exchange Rate”, current assets and current liabilities relat-

ing to foreign currency transactions are recorded at the exchange rate prevailing at the time of transaction. Foreign currency

contracts, outstanding at the close of the year has been accounted for at the exchange rate prevailing at the time of contract.

8) Employees Retirement Benefit:

Company’s contribution to Employees Provident Fund is charged to Profit & Loss account. Provision for leave Encashment &

Gratuity has been provided for in accounts in Compliance with Accounting Standard -15 “ Employee Benefits.”

9) Investments:

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

10) Research and Development Expenditure:

As per Accounting Standard – 26 “ Intangible Assets” all revenue expenses pertaining to research and development are

charged to the Profit and Loss Account in the year in which these are incurred and expenditure of capital nature is capitalized

as fixed assets.

11) Segment Reporting:

The Company is engaged in manufacturing of textiles which in the context of Accounting Standard -17 “ Segment Reporting”

as notified under the Companies Accounting Standards Rules, 2006, is considered as the only business segment.

12) Related Party Disclousres:

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

of Chartered Accountants of India is given below:-

I) NAME OF RELATED PARTIES & DESCRIPTION OF RELATIONSHIP

(A) Key Managerial Personnel:

(i) Dr. M.P. Agarwal CMD

Significant Accounting Policies and Notes to Accounts



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

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

(B) Relatives of Key Managerial Personnel:

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

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

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

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

(i) Shri Lakshmi Defence Solutions Ltd.

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

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

II) DETAILS OF TRANSACTION

Nature AssociateCompanies

Key Management Personnel & their

relatives

Remuneration – 49,80,000.00*

Rent Paid 9,00,000.00** 13,20,000.00***

* Mr. Alok Agarwal (Rs. 15,00,000), Mr. Vikas Agarwal (Rs. 15,00,000), Mrs. Kamini Agarwal (Rs.7,20,000), Mrs. Divya

Agarwal (Rs.5,40,000), Mrs. Barsha Agarwal (Rs.7,20,000).

** Galaxy Capital Finance Limited (Rs. 6,00,000), Gautam Budh Impex (P) Ltd. (Rs.3,00,000).

*** Dr. M. P. Agarwal (Rs. 3,00,000), Mr. Pawan Kumar Agarwal (Rs. 3,00,000), Mr. Alok Agarwal (Rs. 3,60,000), Mr.

Vikas Agarwal (Rs. 3,60,000).

13) Earnings Per Share:

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

of Chartered Accountants of India”.

Sl. No.


1. No. of Equity Shares 2,84,70,645 2,80,93,835

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

3. Profit before Tax (Rs. in lacs) (36,768.80) 16,888.66

4. Profit after Tax (Rs. in lacs) (41,554.05) 11,047.33

5. Basic EPS (in Rs.) (145.95) 39.32

14) Taxes on Income:

As per provisions of Accounting Standard -22 “Accounting for Taxes of Income” issued by Institute of Chartered Accountants

of India, total deferred tax liability have been calculated to be Rs. 14092.45 Lacs.

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




16) Contingent Liabilities:

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

for payment.

(i) Guarantees given by the Company Rs. NIL

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

(iii) Letter of Credit outstanding Rs. 2826.15 Lacs

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

Rs. NIL (Previous year NIL).

17) Additional information where applicable pursuant to the provisions of Schedule VI of the Companies Act, 1956 is as under:-

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

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

Installed Capacity per Annum

Sl. No.

Particulars Unit As at30.06.13

As at30.06.12

i Suiting & Shirting Mtrs. 300 Lacs 300 Lacs

ii Technical Textiles

- Technical Textiles Fabric Mtrs. 120 Lacs 120 Lacs

- Fusible Interlining Fabric Mtrs. 250 Lacs 250 Lacs

- NBC Fabric Mtrs. 100 Lacs 100 Lacs

- Flex Fabric Sq. Mtrs. 500 Lacs 500 Lacs

- Black Out Fabric Mtrs. 200 Lacs 200 Lacs

- IRR / MSCN Fabric Mtrs. 50 Lacs 50 Lacs

- Others Mtrs. 180 Lacs 180 Lacs

iii Quilt Fabric Mtrs. 4 Lacs 4 Lacs

iv Embroidery Fabrics Mtrs. 8 Lacs 8 Lacs

v Bottom Weight Mtrs. 60 Lacs 60 Lacs

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

vii Sheeting Mtrs. 300 Lacs 300 Lacs

viii Denim Mtrs. 400 Lacs 400 Lacs

ix Garments Nos. 66 Lacs 66 Lacs

x Quilts / Comforters Nos. 3 Lacs 3 Lacs




Actual Production:

Sl. No.

Particulars Unit As at30.06.13

As at30.06.12

i Suiting & Shirting Mtrs. 26,412,530 32,785,744

ii Technical Textiles

- Technical Textiles Fabric Mtrs. 12,956,850 10,431,371

- Fusible Interlining Fabric Mtrs. 17,585,956 17,033,733

- NBC Fabric Mtrs. 1,232,093 1,502,164

- Black Out Fabric Mtrs. 9,982,452 1,350,725

- IRR / MSCN Fabric Mtrs. - 3,212,792

- Others Mtrs. 11,821,131 -

iii Quilt Fabric Mtrs. 425,658 229,114

iv Embroidery Fabrics Mtrs. 315,585 326,427

v. Bottom Weight Mtrs. 7,821,737 7,353,138

vi Terry Towel Tons 13,671,541 15,714,855

vii Sheeting Mtrs. 26,464,491 15,534,060

viii Denim Mtrs. 34,134,631 32,025,325

ix Garments Nos. 316,525 732,560

x Quilts / Comforters Nos. 72,585 45,658

Sales:

Sl. No.

Particulars Unit Opening Closing Sales

i Suiting & Shirting Mtrs. 5,759,351 4,283,627 27,888,254

ii Technical Textiles -

Technical Textiles Fabric Mtrs. 2,849,552 2,902,810 12,903,592

Fusible Interlining Fabric Mtrs. 6,317,583 2,927,866 20,975,673

NBC Fabric Mtrs. 6,304 1,238,397 -

Black Out Fabric Mtrs. 125,253 4,464,921 5,642,784

IRR / MSCN Fabric Mtrs. 132,805 - 132,805

Others Mtrs. - 29,538,131

iii Quilt Fabric Mtrs. 164,632 74,759 515,531

iv Embroidery Fabrics Mtrs. 80,236 5,141 390,680




Sl. No.

ParticularsUnit

Opening Closing Sales

v Bottom Weight Mtrs. 910,061 974,138 7,757,660

vi Terry Towel Tons 465,475 4,629,396 9,507,620

vii Sheeting Mtrs. 1,364,144 11,921,904 15,906,731

viii Denim Mtrs. 421,977 1,410,573 33,146,035

ix Garments Nos. 332,886 58,652 590,759

x Quilts / Comforters Nos. 27,537 13,589 86,533








Consolidated Cash Flow Statement For the year ended 30th June, 2013

Particulars 30.06.2013 30.06.2012

CASH FLOW FROM OPERATION ACTIVITIES

Net Profit before tax (36,768.80) 16,888.66

- Depreciation 10,169.67 6,166.56

(26,599.13) 23,055.22

Operating Profit Before Working Capital Changes

- Trade and Other Receivable 23,475.99 (24,326.65)

- Inventories 168.03 (25,157.70)

- Trade Payables 4,379.46 1,541.70

- Loans & Advances (42,391.97) 18,901.22

- Increase in Bank Borrowing (11,787.75) 26,574.53

- Secured/Unsecured Loans 988.43 (1,059.91)

- Income Tax – (1,122.31)

(25,167.81) (4,649.12)

Cash Generated from operations (51,766.93) 18,406.10

Net cash from operating activities (51,766.93) 18,406.10

CASH FLOW FROM INVESTMENT ACTIVITIES

- Fixed Assets acquired (10,463.28) (72,463.16)

- Purchase of Investment – (707.23)

(62,230.21) (54,764.29)

CASH FLOW FROM FINANCE ACTIVITIES

- Proceeds from issue of share capital 408.50 10,926.16

- Proceeds from issue of share warrant application money – (4,343.77)

- Proceeds from issue of Debentures 4,000.00 –

- Proceeds from issue of FCCB (408.50) –

- Proceeds from Long / Short Term borrowings 58,377.21 44,631.18

- Dividends paid (Including Dividend Tax) – (732.69)

Net Cash used in financing activities 62,377.22 50,480.88

Net increase in cash and cash equivalents 147.00 (4,283.41)

Cash and Cash equivalents as at 1st July 2012 769.56 5,052.97

Cash and Cash equivalents as at 30 June 2013 916.56 769.56

(Rs. in Lacs)







Particulars Note No.

As at 30 June, 2013

As at 30 June, 2012

I. EQUITY & LIABILITIES

1. Shareholder's Funds

(a) Share Capital 1 2,847.06 2,809.38

(b) Reserves & Surplus 2 20,344.79 60,836.34

2. Share Application Money Pending Allotment 6,480.52 6,480.52

3. Non-Current Liabilities

(a) Long-Term Borrowings 3 1,73,884.27 1,38,127.58

(b) Deferred Tax Liability (Net) 14,053.85 9,268.60

(c) Other Long-Term Liabilities – –

(d) Long-Term Provisions 6,106.75 2,515.25

4. Current Liabilities

(a) Short-Term Borrowings 4 1,03,420.96 92,018.97

(b) Trade Payables 12,764.03 8,322.42

(c) Other Current Liabilities 5 511.02 167.19

(d) Short-Term Provisions 6 325.85 1,704.41

3,40,739.10 3,22,250.66

B. ASSETS

1. Non-Current Assets

(a) Fixed Assets

(i) Tangible Assets 7 1,76,341.82 1,61,400.39

(ii) Intangible Assets – –

(iii) Capital Work-in-Progress – 14,567.97

(iv) Intangible Assets under development – –

(v) Fixed assets held for sale – –

(b) Non-Current Investments 8 3,877.75 3,877.75

(c) Deferred Tax Assets (Net) – –

(d) Long-Term Loans & Advances 9 8,408.57 8,505.16

2. Current Assets

(a) Current Investments 10 718.75 718.75

(b) Inventories 11 72,332.86 71,190.49

(c) Trade Receivables 12 35,105.38 61,112.58

(d) Cash and Cash Equivalents 13 724.37 508.95

(e) Other Current Assets 14 43,229.60 368.62

3,40,739.10 3,22,250.66


Balance Sheet As at 30th June, 2013 (Rs. in Lacs)







Particulars NoteNo.

As at 30 June, 2013

As at 30 June, 2012

A CONTINUING OPERATIONS1 Revenue from operations 15 1,74,310.36 2,14,666.32

Revenue from operations 1,74,310.36 2,14,666.322 Other income 16 2,416.41 2,531.233 Total revenue (1+2) 1,76,726.77 2,17,197.55 4 Expenses

(a) Cost of materials consumed 17 1,43,228.43 1,74,564.25 Purchases of stock-in-trade (b) Changes in inventories of finished goods, work-in-progress and stock-in-trade

18(1,102.12) (14,157.78)

(c) Employee benefits expense 19 6,548.97 6,388.71 (d) Finance costs 20 35,449.12 20,289.60 (e) Depreciation and amortisation expense 21 10,089.32 6,098.04 (f) Other expenses 22 18,590.17 10,045.95 Total expenses 2,12,803.89 2,03,228.77

5 Profit / (Loss) before exceptional and extraordinary items and tax (3 - 4) (36,077.12) 13,968.78 6 Exceptional items – –7 Profit / (Loss) before extraordinary items and tax (5 ± 6) (36,077.12) 13,968.78 8 Extraordinary items – –9 Profit / (Loss) before tax (7 ± 8) (36,077.12) 13,968.78 10 Tax expense:

(a) Current tax expense for current year – 1,126.00 (b) Deferred tax 4,785.25 4,706.35

4,785.25 5,832.35 11 Profit / (Loss) from continuing operations (9 ±10) (40,862.37) 8,136.43

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

attributable to the discontinuing operations – –

12.iiiAdd / (Less): Tax expense of discontinuing operations – –(a) on ordinary activities attributable to the discontinuing operations

– –

(b) on gain / (loss) on disposal of assets / settlement of liabilities

– –

13 Profit / (Loss) from discontinuing operations (12.i ± 12.ii ± 12.iii) – – 14 Profit / (Loss) for the year (11 ± 13) (40,862.37) 8,136.4315 Earnings Per Equity Share (of Rs.10/- Each) (143.52) 28.96

Statement of Profit & Loss For the year ended 30th June, 2013 (Rs. in Lacs)








Notes forming part of the financial statements


As at30 June, 2012

1 SHARE CAPITAL

Authorised

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

5,000.00 5,000.00

Issued, subscribed and fully paid-up shares

2,84,70,645 Equity Shares of Rs. 10/- each fully paid-up 2,847.06 2,809.38

2,847.06 2,809.38

Reconciliation of the number of Equity Shares outstanding:

Equity shares outstanding at the beginning of the year 2,80,93,835 2,10,93,835

Equity shares allotted during the year 3,76,810 70,00,000

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


As at30 June, 2012

2 RESERVES AND SURPLUS

(i) Securities premium account


Add : Additions during the year 370.82 10,220.00

Less : Deduction during the year – –

Closing Balance 21,209.19 20,838.37

(ii) Capital Reserves Account

Balance as per last financial statement 12.19 12.19

Add : Additions during the year – –

Closing Balance 12.19 12.19

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


Add : Profit for the year (40,862.37) 8,136.43

Total (876.59) 39,985.78

Total Reserve and Surplus (i to iii) 20,344.79 60,836.34

No. of Shares

Name of shareholder 30 June, 2013 30 June, 2012

Nil Nil

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

(Rs. in Lacs)




ParticularsAs at

30 June, 2013As at

30 June, 2012

3 LONG-TERM BORROWINGS

Secured Loans from Banks:

Secured Loans from Banks 1,60,618.90 1,20,348.11

Mezannine Debt 12,841.75 17,689.47

Unsecured:

Unsecured Loan 423.62 90.00

Total 1,73,884.27 1,38,127.58


As at30 June, 2012

4 SHORT TERM BORROWINGS

Working Capital Loan 68,230.60 80,014.20

Short Term Loan for Project 35,190.36 12,004.77

Total 1,03,420.96 92,018.97


As at30 June, 2012

5 OTHER CURRENT LIABILITIES

Unpaid Dividend 25.66 30.45

Statutory remittances 485.36 136.74

511.02 167.19


As at30 June, 2012

6 SHORT TERM PROVISIONS

Provision for Tax - 1,126.00

Provision for Expenses 325.85 578.41

325.85 1,704.41

7 FIXED ASSETS

Particulars GROSS BLOCK DEPRECIATION NET BLOCK

As on 01.07.2012

Addition As on 30.06.2013

Upto 01.07.2012

For the year

As on 30.06.2013

As on 30.06.2012

As on 30.06.2013

Land 2,175.76 0.28 2,176.04 – – – 2,175.76 2,176.04

Building 18,084.25 5,923.96 24,008.21 1,959.57 756.22 2,715.79 16,124.68 21,292.42

Plant & Machinery 1,59,851.88 18,932.05 1,78,783.93 17,881.92 9,171.13 27,053.05 1,41,969.96 1,51,730.88

Furniture & Fixture 483.60 54.98 538.58 101.46 31.68 133.14 382.14 405.44

Office Equipment 623.39 40.91 664.30 213.09 64.52 277.61 410.30 386.69

Vehicles 629.74 78.57 708.31 292.19 65.77 357.96 337.55 350.35

Total 1,81,848.62 25,030.75 2,06,879.37 20,448.23 10,089.32 30,537.55 1,61,400.38 1,76,341.82

Previous Year 92,157.29 89,691.32 1,81,848.61 14,350.19 6,098.04 20,448.23 77,807.10 1,61,400.38

(Rs. in Lacs)





As at30 June, 2012

8 NON-CURRENT INVESTMENT

Quoted Shares 38.56 38.56

Un-Quoted Shares 3,839.19 3,839.19

3,877.75 3,877.75


As at30 June, 2012

9 LOANS AND ADVANCES

Capital Advances 7,048.25 5,932.44

Security Deposits 625.36 998.33

Others Loan and Advances 338.52 330.78

Advances Tax 321.92 1,175.17

Prepaid Expenses 74.52 68.44

8,408.57 8,505.16


As at30 June, 2012

10 CURRENT INVESTMENT

Un-Quoted Shares 718.75 718.75

718.75 718.75

(Rs. in Lacs)


As at30 June, 2012

11 INVENTORIES

(As certified by the Management)

Raw Materials 26,368.79 25,641.46

Work-in-Progress 25,625.50 21,673.73

Finished Goods 19,676.95 22,526.60

Stores and Spare-parts 661.62 1,348.70

72,332.86 71,190.49

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





As at30 June, 2012

12 TRADE RECEIVABLES

(Unsecured, Considered Good unless otherwise stated)

(a) Outstanding for more than six months 9,727.96 356.84

(b) Considered Good 25,377.42 60,755.74

35,105.38 61,112.58


As at30 June, 2012

13 CASH AND BANK BALANCES

(a) Cash and cash equivalents:

Cash Balance on Hand 58.06 96.42

Balance with Banks in:

Current Accounts 640.65 382.08

(b) Earmarked balances with banks:

Unpaid Dividend Account 25.66 30.45

724.37 508.95


As at30 June, 2012

14 OTHER CURRENT ASSETS

Accrued Duty Draw back 685.25 208.47

Accrued DEPB – 120.41

Advances against Others 6.25 5.69

Salary advance 18.69 22.31

Slow Moving assets 42,486.83 –

Advances against Travelling Expenses 32.58 11.74

43,229.60 368.62

(Rs. in Lacs)




As at30 June, 2012

15 REVENUE FROM OPERATIONS

(i) Sale of Manufactured goods:

Suiting & Shirting 23,314.02 24,655.05

Technical Textile / Fusible Interlining 63,056.60 58,663.23

Quilting & Embroidery 1,196.14 677.12

Denim 30,537.81 41,984.31

Terry Towel 28,394.75 50,980.14

Home Furnishing 18,299.44 26,055.39

Bottom Weight 5,767.89 8,900.01

Garments 2,850.31 2,145.00

Misc. Sales 893.40 606 .07

Revenue from Operations 1,74,310.36 2,14,666.32

Sales includes Export Sales of Rs. 27,420.24 lakhs (Previous year Rs. 19,743.10 lakhs).



As at30 June, 2012

16 OTHER INCOME

Miscellaneous Income 81.55 386.42

Duty Draw Back 2,334.86 1,301.45

Income on Sale of DEPB License – 843.36

2,416.41 2,531.23


As at30 June, 2012

17 COST OF MATERIALS CONSUMED

Raw Material Consumed 1,40,137.60 1,72,352.60

Packing Materials 2,311.78 1,592.87

Others 779.05 618.78

1,43,228.43 1,74,564.25

(Rs. in Lacs)




As at30 June, 2012

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



(3,951.77) (5,556.91)

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

Finished Goods as at 30th June, 2012 22,526.60 13,925.73

2,849.65 (8,600.87)

Net (Increase) / Decrease Inventories (1,102.12) (14,157.78)


As at30 June, 2012

19 EMPLOYEE BENEFIT EXPENSES

Salaries, wages and bonus 6,413.26 6,307.47

Employee welfare expenses 135.71 81.24

6,548.97 6,388.71


As at30 June, 2012

20 FINANCE COSTS

Interest Expenses 34,176.92 19,284.91

Bank Charges 1,272.20 1,004.69

35,449.12 20,289.60


As at30 June, 2012

21 DEPRECIATION AND AMORTIZATION EXPENSE

Depreciation of tangible assets 10,089.32 6,098.04

10,089.32 6,098.04


(Rs. in Lacs)





As at30 June, 2012

22 OTHER EXPENSES

Rent, Rate & Taxes 120.29 107.26

Insurance 101.62 66.72

Repair & Maintenance 284.48 553.21

Printing & Stationery 47.78 49.97

Postage & Telegram 96.16 129.26

Travelling & Conveyance 287.12 339.58

Meeting Expenses 1.88 14.11

Cost & Stock Audit fee 0.30 0.30

Auditors Remuneration 19.10 16.85

Selling & Distribution Exp. 655.74 343.26

Legal Expenses 7.75 4.64

Advertisement 36.77 92.65

Freight Outward 958.99 1,057.99

Stores & Spares 672.74 794.74

Power & Fuel 6,167.60 5,625.39

Discount 8,439.71 329.77

Professional Charges 202.61 257.39

Misc. Expenses 489.53 262.86

18,590.17 10,045.95

(Rs. in Lacs)







Standalone Cash Flow Statement For the year ended 30th June, 2013

Particulars 30.06.2013 30.06.2012

CASH FLOW FROM OPERATION ACTIVITIES

Net Profit before tax and extra ordinary items (36,077.12) 13,968.78

- Depreciation 10,089.32 6,098.04

(25,987.80) 20,066.82

Operating Profit Before Working Capital Changes

- Trade and Other receivable 26,007.20 (24,256.83)

- Inventories (1,142.37) (22,808.68)

- Trade Payables 3,406.88 1,628.21

- Loans & Advances (42,764.39) 19,377.06

- Increase in Bank Borrowing (11,783.60) 26,087.48

- Secured/Unsecured Loans 10,502.39 (987.71)

- Income Tax – (1,122.31)

(15,773.89) (2,082.78)

Cash Generated from operations (41,761.69) 17,984.04

Net cash from operating activities (41,761.69) 17,984.04

CASH FLOW FROM INVESTMENT ACTIVITIES

- Fixed Assets acquired (41,761.69) 17,984.04

- Purchase of Investment (10,462.78) (72,404.97)

– (711.06)

(52,224.47) (55,131.99)

CASH FLOW FROM FINANCE ACTIVITIES

- Proceeds from issue of share capital 408.50 10,920.00

- Proceeds from issue of share warrant application money – (4,343.77)

- Proceeds from issue of Debentures 4,000.00 –

- Proceeds from issue of FCCB (408.50) –

- Proceeds from Long / Short Term borrowings 48,439.89 44,845.70

- Dividends paid (Including Dividend Tax) – (732.69)

Net Cash used in financing activities 52,439.89 50,689.24

Net increase in cash and cash equivalents 215.42 (4,443.29)

Cash and Cash equivalents as at 1st July 2012 508.95 4,952.24

Cash and Cash equivalents as at 30th June 2013 724.37 508.95

(Rs. in Lacs)







Statement regarding Subsidiary CompaniesStatement pursuant to Section 212 of the Companies Act, 1956, relating to Subsidiary Companies as at 30th June 2013

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

SLCL Overseas, FZC, U.A.E.

Synergy Global Home Inc. N.Y.,

U.S.A.

2 Financial Year of the Subsidiary ended on 30.06.2013 30.06.2013 30.06.2013

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

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

b) Face Value 10 10 10

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

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

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

a) For the financial year of the Subsidiary 186.40 (855.55) 11.08

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

258.14 3387.51 (367.38)

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

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

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

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

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

a) Fixed Assets Not applicable as accounting

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

2013

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

Company ends on 30th June,

2013

Not applicable as accounting year of the Holding & Subsidiary

Company ends on 30th June,

2013

b) Investments made

c) Money lent by Subsidiary

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

For and on behalf of the Board

Place: Kanpur Dr. M. P. Agarwal Vivek SaxenaDate : 30.09.2013 Chairman cum Manging Director Head-Accounts



*Converted into Indian Rupees at the exchange rate, 1AED= Rs.16.23 as on 30.06.2013.

**Converted into Indian Rupees at the exchange rate, 1USD= Rs.59.70 as on 30.06.2013.

Notes :

1) The Ministry of Corporate Affairs vide their general circular no. 2/2011 dated 05.02.2011 has granted exemption from the applicability of the provisions of sub-section (1) of Section 212 of the Companies Act, 1956.

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

Statement regarding Subsidiary CompaniesStatement in terms of general exemption under 212(8) of the Companies Act, 1956 granted by Ministry of Corporate Af-fairs vide circular no. 2/2011 dated 08.02.2011 as at 30th June 2013

Name of the Subsidiary Companies Shri Lakshmi Defence Solutions

Limied

SLCL Overseas, FZC, U.A.E.

Synergy Global Home Inc. N.Y.,

U.S.A.

Issued & Subscribed Share Capital 1000.00 20.00 1.69

Reserves & Surplus 852.89 10,023.07 (374.07)

Total Assets 4,504.71 11,511.25 614.34

Total Liabilities 4,504.71 11,511.25 614.34

Investments (except investment in Subsidiary) Nil 5,297.60 Nil

Turnover 1,848.75 14,274.25 1,825.06

Profit before Taxation 186.40 (855.55) 11.08

Provision for Taxation Nil Nil Nil

Profit after Taxation 186.40 (855.55) 11.08

Proposed Dividend Nil Nil Nil

(Rs. in Lacs)

For and on behalf of the Board

Place: Kanpur Dr. M. P. Agarwal Vivek SaxenaDate : 30.09.2013 Chairman cum Manging Director Head-Accounts



IMPORTANT COMMUNICATION TO MEMBERS

Green Initiative in the Corporate Governance

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

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Shri Lakshmi Cotsyn LimitedAN ISO 9000:2008 COMPANY

www.shrilakshmi.in

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