Ladies and Gentlemen,
Your Directors have pleasure in presenting the Hundred and Thirteenth Year Annual
Report together with the audited accounts of the Company for the year ended 31st March
2023.
FINANCIAL SUMMARY / HIGHLIGHTS
|
31.03.2023 |
31.03.2022 |
| No. of days worked |
354 |
304 |
|
(Rs in Lakhs) |
| Revenue from operations |
23,991.42 |
34,671.96 |
| Other income |
453.75 |
259.37 |
| GROSS REVENUE |
24,445.17 |
34,931.33 |
| Profit / (Loss) before Tax and Exceptional Items |
(773.87) |
3,356.84 |
| Less : Exceptional items |
96.01 |
(63.45) |
| Profit / (Loss) before Taxation |
(677.86) |
3,293.39 |
| Tax Expense |
(176.66) |
887.02 |
| Profit / (Loss) after Taxation |
(501.20) |
2,406.37 |
OPERATIONS
Overall, the Companys Revenue from Operations decreased by 31% from Rs. 34,671.96
Lakhs in 2021-22 to Rs. 23,991.42 Lakhs in 2022-23 and the Net Loss after Tax for
financial year 2022 - 23 was Rs. 501.20 Lakhs as against Net Profit of Rs. 2,406.37 Lakhs
for the financial year 2021-22. The installed capacity remained at the same level of 1.33
lakh spindles throughout the year 2022-23. Due to adverse market conditions and the global
economic slowdown in the background of disruptions and uncertainty caused by the movement
of outstation workers, the production of yarn was affected considerably resulting in lower
turnover. With accumulation of finished stock of yarn, the prices realized were also
lower. Hence, the Company was not able to work in full capacity during the year under
review.
The revenue segments of the Company continues to be structured with two business
segments as (a) Textiles and (b) Rental Services.
CHANGE IN NATURE OF BUSINESS
There is no change in the nature of business operations of the Company during the year.
RENTAL SERVICES
The income generated from rental services during the year was Rs. 606.18 Lakhs
(Previous year - Rs. 581.39 Lakhs).
EXPORTS
Your Company apart from manufacturing Cotton and Synthetic yarn have outsourced fabrics
both for exports as well as for domestic market. Export of yarn and fabrics accounted for
Rs. 5,133.29 Lakhs as against Rs. 6,486.59 Lakhs in the previous year, a decrease of
around 20.86% from the previous years performance.
DIVIDEND
For the financial year 2022-23, the Board of Directors at their meeting held on 29th
May, 2023, has recommended a dividend of Rs. 9/- per share (9%) on the paid-up share
capital of 6,95,550 equity shares of Rs. 100/- each. Subject to the approval of
shareholders, an amount of Rs. 62.60 Lakhs will be paid as dividend out of Retained
Earnings carried forward after deducting applicable taxes. (Previous Year - Rs. 173.89
Lakhs)
TRANSFER TO RESERVES
The Company has not transferred any amount to its Reserves during the year under
review. However, an amount of Rs. 501.20 Lakhs of the current loss has been adjusted with
the surplus under the head retained earnings.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
In terms of Sections 124 and 125 of the Companies Act, 2013, unclaimed or unpaid
Dividend relating to the financial year 2015-16 is due for remittance to the Investor
Education and Protection Fund established by the Central Government.
Further, pursuant to Section 124(6) of the Companies Act, 2013 read with Investor
Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules,
2016, 1924 Equity Shares of Rs.100/- each on which dividend of Rs. 3,87,915/- for the year
2014-15 remained as unclaimed for a period of 7 years have been transferred to the credit
of Demat Account identified by the IEPF Authority during the year under review.
SHARE CAPITAL
The paid up Equity Share Capital as on 31st March 2023 was Rs. 6,95,55,000/- comprising
6,95,550 shares of Rs. 100/- each. During the year under review, the Company has not made
any fresh issue of shares.
WEBLINK OF ANNUAL RETURN
The Annual Return of the Company for the financial year 2022-23 as required under
Section 92(3) of the Companies Act, 2013 is available on the website of the Company at the
link www.lakshmimills.com.
BOARD MEETINGS AND ITS COMMITTEES CONDUCTED DURING THE PERIOD UNDER REVIEW
During the year under review, 4 Meetings of the Board of Directors, 4 Meetings of the
Audit Committee, 2 Meetings of the Nomination and Remuneration Committee, 1 Meeting of the
Corporate Social Responsibility Committee, 1 Meeting of the Stakeholders Relationship
Committee and 15 Meetings of the Share Transfer Committee were held. Further details of
the same have been enumerated in the Corporate Governance Report annexed herewith.
STATEMENT ON COMPLIANCE WITH SECRETARIAL STANDARDS
The Directors have devised proper systems to ensure compliance with the provisions of
applicable Secretarial Standards and that such systems are adequate and operating
effectively. The Company is in compliance with the applicable Secretarial Standards issued
by the Institute of Company Secretaries of India.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 134(3)(c) of the Companies Act, 2013, with
respect to the Directors Responsibility Statement, it is hereby confirmed that-
(i) In the preparation of the annual accounts for the year ended 31st March 2023, the
applicable accounting standards have been followed and there were no material departures
from those standards;
(ii) the Directors have selected such accounting policies and applied them consistently
and made judgments and estimates that are reasonable and prudent so as to give a true and
fair view of the state of affairs of the Company at the end of the financial year and of
the loss of the Company for that period;
(iii) the Directors have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the Companies Act, 2013
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities;
(iv) the Directors have prepared the annual accounts on a going concern basis;
(v) the Directors have laid down internal financial controls to be followed by the
Company and that such internal financial controls are adequate and operating effectively;
and
(vi) the Directors have devised proper systems to ensure compliance with the provisions
of the applicable laws and such systems are adequate and operating effectively.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OF THE
COMPANIES ACT, 2013 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
There was no instance of fraud identified or reported by the Statutory Auditors during
the course of their audit for the year to report to the Audit Committee and/or Board
pursuant to Section 143(12) of the Companies Act, 2013 and rules framed thereunder.
DECLARATION OF INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent Directors of the Company
confirming that they meet the criteria of independence as stipulated in Section 149(6) of
the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 and that their name is included in the data
bank as per Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules,
2014. During the year, the Independent Directors of the Company had no pecuniary
relationship or transactions with the Company other than sitting fees and reimbursement of
expenses incurred by them for the purpose of attending meetings of the Board of Directors
and Committee(s). The details of remuneration and /or other benefits of the Independent
Director are mentioned in the Corporate Governance Report. Further, they have also
declared that they are not aware of any circumstance or situation, which exist or may be
reasonably anticipated, that could impair or impact their ability to discharge their
duties with an objective independent judgment and without any external influence. In the
opinion of the Board, the Independent Directors, fulfil the conditions of independence as
specified in Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015. The Independent Directors have
also confirmed that they have complied with the Companys Code of Business Conduct &
Ethics.
Based on the confirmation/disclosures received from the Directors and on the evaluation
of the relationships disclosed, the following Non-Executive Directors are Independent:
Sri D. Rajendran, Sri Satish Ajmera, Sri Vijay Venkataswamy and Smt Suguna Ravichandran
Pursuant to Companies (Appointment and Qualification of Directors) Rules, 2014 the
Certificate of Registration as required from all the Independent Directors of the Company
was taken on note by the Board of Directors of the Company.
STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY, EXPERTISE AND
EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS DURING THE YEAR
The Board of Directors have evaluated the Independent Directors during the year 2022-23
and opined that the integrity, expertise and experience (including proficiency) of the
Independent Directors is satisfactory.
FAMILIARIZATION PROGRAMMES
In compliance with the requirements of the Listing Regulations, the Company has put in
place a familiarization programme for the Independent Directors to familiarize them with
their roles, rights and responsibilities as Independent Directors, the working of the
Company, nature of the industry in which the Company operates. The same is also available
on the Company website at https://www.lakshmimills.com/wp-content/uploads/2023/05/
Familiarisation-Programme-2022-23.pdf
COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND OTHER
MATTERS PROVIDED UNDER SECTION 178(3) OF THE COMPANIES ACT, 2013
The composition and attendance of the Nomination and Remuneration Committee of
Directors of the Company are reported elsewhere in the Annual Report.
The Board of Directors has framed a policy which lays down a framework in relation to
nomination, appointment and remuneration of Directors, Key Managerial Personnel and Senior
Management of the Company. The Policy broadly lays down the guiding principles, philosophy
and the basis for payment of remuneration to the Executive Directors, Key Managerial
Personnel and Senior Management. The policy also provides the criteria for determining
qualifications, positive attributes and Independence of Directors and criteria for
appointment of Key Managerial Personnel / Senior Management pursuant to the provisions of
Section 178 of the Companies Act, 2013 and in terms of Regulation 19(4) of the SEBI
Listing Regulations and their performance evaluation which are considered by the
Nomination and Remuneration Committee and the Board of Directors while making selection of
the appointees. The above policy has been posted on the website of the Company at -
https://www.lakshmimills.
com/wp-content/uploads/2017/11/Nomination-and-Remuneration-Policy.pdf.
AUDITORS REPORT
There are no qualifications, reservations or adverse remarks or disclaimers made by
M/s. Subbachar & Srinivasan, Statutory Auditors and Sri M.D. Selvaraj, Managing
Partner of MDS & Associates LLP, Secretarial Auditor, in their respective reports.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES
ACT, 2013
During the year under review, the Company has made investments and complied with the
provisions of Section 186 of Companies Act, 2013. However, the Company has not given any
loans or guarantees or provided any securities covered under the provisions of Companies
Act, 2013. Further, the details in respect of investments made in the earlier years and
the year under review have been disclosed in the notes to the Financial Statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All the transactions of the Company during the year with the related parties were in
the ordinary course of business and on an arms length pricing basis and not material in
nature and thus a disclosure in Form AOC-2 is not required. Further, there are no material
related party transactions during the year under review with Promoters, Directors or Key
Managerial Personnel.
The policy on Related Party Transactions as approved by the Board of Directors of the
Company has been uploaded on the website of the Company and may be accessed through the
link at https://www.lakshmimills.com/wp-
content/uploads/2017/11/Policy-on-Related-Party-Transactions.pdf
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There is no material change or commitment affecting the financial position of the
Company after the closure of the financial year as on 31st March 2023 and till the date of
this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to Conservation of Energy, Technology Absorption, Foreign
Exchange Earnings and Outgo as required under section 134 (3) (m) of the Companies Act,
2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached herewith as
Annexure - 1 forming part of this report.
STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE
COMPANY
The Company follows a comprehensive and integrated risk management process. The risk
management process is designed to safeguard the organization from various risks through
adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in
order to minimize its impact on the business. The potential risks are reviewed and
integrated with the management process such that they receive the necessary consideration
during decision making by the Board of Directors.
DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL
RESPONSIBILITY INITIATIVES
The Board had formed a Corporate Social Responsibility Committee comprising of the
following Directors:
1. Sri S. Pathy - Chairman
2. Sri Aditya Krishna Pathy - Member and
3. Sri D. Rajendran - Member
The company has adopted a Corporate Social Responsibility Policy defining therein the
CSR activities to be undertaken by the Company in areas or subjects specified in Schedule
VII of the Companies Act, 2013. The Corporate Social Responsibility Committee of the Board
is responsible for the implementation and effective monitoring of the CSR activities of
the Company. The CSR policy may be accessed on the Companys website
https://www.lakshmimills.com/wp-content/uploads/2017/11/Policy-on-Corporate-Social-Responsibility.pdf.
The Companys average net profits of the three immediately preceding financial years of
the financial year 202223 is less than the prescribed limit as per Section 135 read with
Section 198 of the Companies Act, 2013 and hence no amount has been prescribed/allocated
for the CSR expenditure. Thus, no amount has been spent on the CSR activities of the
Company for the financial year 2022-23.
The brief outline of the Corporate Social Responsibility ("CSR") Policy of
the Company and the initiatives undertaken by the Company on CSR activities during the
year are set out as Annexure-2 to this report in the format prescribed in the Companies
(CSR Policy) Rules, 2014.
ANNUAL EVALUATION OF THE BOARD ON ITS OWN PERFORMANCE AND OF THE INDIVIDUAL DIRECTORS
Pursuant to the provisions of the Act and the Listing Regulations, the Board has
carried out the annual evaluation of its own performance, the individual Directors
(including the Chairman) as well as an evaluation of the working of all Board Committees.
The performance evaluation was carried out on the basis of the criteria laid down by
Nomination and Remuneration Committee and the inputs received from all the
Directors/Members of the Committees, considering the various aspects of the Boards
functioning, composition of the Board and its Committees, culture, execution and
performance of specific duties, obligations and governance. The Independent Directors of
the Company have also convened a separate meeting for reviewing the performance of the
NonIndependent Directors and the Board as a whole and assessing the quality, quantity and
timeliness of flow of information between the Company and the Board. The results of
evaluation have been communicated to the Chairman of the Board of Directors.
DIRECTORS & KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Act and the Articles of
Association of the Company, Sri R. Santharam, (DIN 00151333) Director is liable to retire
by rotation at the ensuing Annual General Meeting ("AGM") and being eligible
offers himself for re-appointment.
The Board recommends his reappointment for the consideration of the Members of the
Company at the forthcoming Annual General Meeting. Brief profile of Sri R. Santharam is
given in the Notice convening the Annual General Meeting.
The Key Managerial Personnel of the Company pursuant to Section 2(51) and 203 of the
Companies Act, 2013 are Sri S. Pathy - Chairman and Managing Director, Sri Aditya Krishna
Pathy - Deputy Managing Director, Sri N. Singaravel - Company Secretary and Sri A.
Doraiswamy - Chief Financial Officer.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any joint venture, subsidiary or associate company.
FIXED DEPOSITS
Since the Company has not accepted any fixed deposit covered under Chapter V of the
Companies Act, 2013, there are no deposits remaining unclaimed or unpaid as on 31st March,
2023 and accordingly, the question of default in repayment of deposits or payment of
interest thereon during the year does not arise.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR
TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATION IN FUTURE
There are no significant material orders passed by the Regulators, Courts, Tribunals
which would impact the going concern status of the Company and its future operations.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
Your Company has in place adequate internal financial controls commensurate with the
size, scale and complexity of its operations. Such controls have been assessed during the
year under review taking into consideration the essential components of internal controls
stated in the Guidance Note on Audit of Internal Financial Controls over Financial
Reporting issued by the Institute of Chartered Accountants of India. Based on the results
of such assessments carried out by the management, no reportable or significant
deficiencies and no material weakness in the design or operation of any control were
observed. The Audit Committee of the Board periodically reviews the Internal Financial
Control Systems and their adequacy and recommends corrective action as and when necessary
to ensure that an effective internal control mechanism is in place.
The Directors and Management confirm that the internal financial controls with
reference to the Financial Statements are commensurate with the size and nature of
business of the Company. A report of Auditors pursuant to Section 143(3)(i) of the
Companies Act, 2013 certifying the adequacy of Internal Financial Controls is annexed with
the Auditors Report.
COMPOSITION OF AUDIT COMMITTEE AND VIGIL MECHANISM / WHISTLE BLOWER POLICY
The composition and attendance of the Audit Committee of the Board of Directors of the
Company are disclosed in the Corporate Governance Report of the Annual Report. The Company
has devised a vigil mechanism in the form of a Whistle Blower Policy to provide adequate
safeguards to deal with instances of fraud and mismanagement and to report concerns about
unethical behavior or any violation of the Companys Code of Conduct in pursuance of
provisions of Section 177(10) of the Companies Act, 2013 as explained in the Corporate
Governance Report and also posted on the website of company and can be accessed at the
link https://www.lakshmimills.com/wp-
content/uploads/2017/11/Vigil-Mechanism_Whistle-Blower-Policy.pdf. During the year under
review, there were no complaints received under this mechanism.
AUDITORS
STATUTORY AUDITORS
M/s. Subbachar & Srinivasan (Firm Registration No.004083S), Chartered Accountants,
Coimbatore were appointed as the Statutory Auditors of the Company for a period of five
years at the 112th Annual General Meeting of the company held on 9th September 2022.
The Company has received a Certificate from the Statutory Auditors to the effect that
their continued appointment as the Statutory Auditors of the Company, would be within the
limits prescribed under section 139 of the Companies Act, 2013.
COST AUDITORS
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Audit
and Auditors) Rules, 2014, as amended from time to time, the Board of Directors on the
recommendation of the Audit Committee has reappointed M/s. A.R.Ramasubramania Raja &
Co., (Firm Registration No. 000514) a firm of Cost Accountants, as the Cost Auditors to
audit the cost records of the Company for the financial year 2023-24. M/s.
A.R.Ramasubramania Raja & Co., have confirmed that their appointment is within the
limits of section 141(3)(g) of the Companies Act, 2013 and have also certified that they
are free from any disqualifications specified under section 141(3) and proviso to section
148(3) read with section 141(4) of the Companies Act, 2013.
The Audit Committee has also received a Certificate from the Cost Auditor certifying
their independence and arms length relationship with the Company.
As per the provisions of the Companies Act 2013 read with the Companies (Cost Audit and
Auditors) Rules, 2014, a resolution seeking Members approval for the remuneration payable
to the Cost Auditors for the financial year 2023-24 forms part of the Notice convening the
113th Annual General Meeting of the Company for their ratification. Accordingly, the Board
recommends for the resolution seeking Members ratification for the remuneration payable
to M/s. A.R.Ramasubramania Raja & Co., Cost Auditors.
MAINTENANCE OF COST RECORDS UNDER SUB-SECTION (1) OF SECTION 148 OF THE COMPANIES ACT,
2013
The Company has maintained the Cost Records as specified by the Central Government
under sub-section (1) of Section 148 of the Companies Act, 2013.
SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has
appointed Sri M.D.Selvaraj, FCS, Managing Partner of MDS & Associates LLP, Company
Secretaries as the Secretarial Auditors of the Company for the year 2023-24 to undertake
the Secretarial Audit of the Company. The Secretarial Audit report for the financial year
2022-23 is annexed herewith as Annexure - 3 and forms an integral part of this Report.
CORPORATE GOVERNANCE
Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Management Discussion and Analysis Report, Report on Corporate
Governance and Auditors Certificate regarding compliance of conditions of Corporate
Governance provided elsewhere in this Report, forms part of the Directors Report.
PARTICULARS OF EMPLOYEES
Disclosures with respect to the remuneration of Directors and employees as required
under Section 197(12) of Companies Act, 2013 and Rule 5 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 is appended as Annexure - 4 to this
Report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION
AND REDRESSAL) ACT, 2013
The Company has in place a policy on Sexual Harassment of Women at Workplace in line
with the requirements of the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013. An Internal Complaint Committee has been set up to
redress complaints received. All employees (permanent, contractual, temporary, trainees)
are covered under this policy. There were no complaints received from any employee of the
Company during the financial year 2022-23.
The following is the summary of sexual harassment complaints received and disposed of
during the year 2022-23:
i. Number of complaints received - Nil
ii. Number of complaints disposed off - NA CEO/CFO CERTIFICATION
As required under SEBI (Listing Obligations and Disclosure Requirements) Rules 2015,
the Chairman and Managing Director (Chief Executive Officer) and the Chief Financial
Officer have furnished necessary certificate to the Board on the financial statements
presented for the year ended 31st March 2023.
DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND
BANKRUPTCY CODE, 2016 DURING THE YEAR
No applications have been made and no proceedings are pending against the Company under
the Insolvency and Bankruptcy Code, 2016.
DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME
SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL
INSTITUTIONS ALONG WITH THE REASONS THEREOF.
The disclosure under this clause is not applicable as the Company has not undertaken
any one-time settlement with the banks or financial institutions.
ACKNOWLEDGEMENT
The Board acknowledges the continued support from the Bankers, Cotton, Yarn and Cloth
Dealers of the Company and Shareholders and appreciates the valuable services rendered by
the employees at all levels.
May the Goddess Lakshmi continue to shower her choicest Blessings for the prosperity of
the Company in the years to come.
|
By Order of the Board |
|
For The Lakshmi Mills Co. Ltd., |
|
S. PATHY |
| Coimbatore |
Chairman and Managing Director |
| 29th May, 2023 |
(DIN 00013899) |
+91-9892691696
