Ramaraju Surgical Cotton Mills Limited Unlisted Shares Annual Reports

Ramaraju Surgical Cotton Mills Limited Unlisted Shares

The Ramaraju Surgical Cotton Mills Limited's 83rd Annual Report for 2022-2023 highlights the company's operational and financial performance, key decisions, and future outlook. The Annual General Meeting (AGM) is scheduled for September 29, 2023, and will be conducted via video conferencing. **Key Financial Results:** The company's separate financial results for the year ended March 31, 2023, revealed an EBITDA of ₹3,967.28 Lakhs, a decrease from the previous year's ₹7,547.73 Lakhs. After accounting for finance costs and depreciation, the Loss before Tax amounted to ₹3,608.19 Lakhs, compared to a profit of ₹878.08 Lakhs in the previous year. The Board recommended a dividend of ₹0.50 per share, totaling ₹19.99 Lakhs. The company reversed ₹5.81 Lakhs pertaining to Current Tax for earlier years and provided for a Deferred Tax Asset of ₹544.62 Lakhs for the year 2022-23. **Business Combination:** The National Company Law Tribunal (NCLT), Chennai, approved the Scheme of Amalgamation of Sri Harini Textiles Limited with the company. The scheme became effective from April 1, 2021, and shareholders of SHTL were allotted 51,340 shares in the ratio of 34 shares of TRSCM for every 1000 shares held. The authorized share capital of the company stands at ₹1,000 Lakhs. **Operational Performance:** The Textile division faced challenges due to a 14% drop in cotton production, leading to higher cotton prices and affecting yarn spinner margins. The weaving division also experienced a slowdown, though Jacquard fabric exports grew by 36% in FY23. The company commenced cut and sew operations in July 2022 to produce bedsheet sets with a capacity of 10,000 sets per day and acquired a prominent brand license. The Surgical division made remarkable progress in sales value and margins, with Surgical EBITDA margins increasing by 79% and sales value increased by 37%. Exports reached ₹109.21 crores. The company consumed 32.81% of its power requirement from its own wind farms and solar, although power costs increased due to tariff hikes. Finance costs also rose to ₹32.20 Crores due to increased interest rates and additional borrowings. Dividend income was ₹102.44 Lakhs. **Key Financial Ratios:** Several key financial ratios are provided, including Debtors Turnover Ratio (36 days), Inventory Turnover Ratio (101 days), Interest Coverage Ratio (-0.12), Current Ratio (1.02), Debt-Equity Ratio (4.38), Operating Profit Margins (9.64%), Net Profit Margin (-7.36%), Return on Net Worth (-28.74%), Total Debt/EBITDA (10.02), and Return on Capital Employed (0.33%). Explanations for significant variations (>25%) are provided, mainly due to additional borrowings for a new unit and low operating margins in the textile segment. **Future Prospects:** The textiles industry continues to face recessionary pressures. Hopes exist for improved demand in the second half of FY23-24. The company will continue the strategy of licensing brands and has arrangements with solar power developers for power at lower rates. **Subsidiaries and Associates:** Madras Chipboard Limited (MCBL) is a subsidiary, with the company holding 75.01% of its share capital. Taram Textiles, LLC and its step-down subsidiary Taram Textiles Online, Inc. are also subsidiaries. The company has six associate companies, including The Ramco Cements Limited and Rajapalayam Mills Limited. **Corporate Governance:** The report confirms adherence to Secretarial Standards and compliance with Corporate Governance requirements stipulated by SEBI (LODR) Regulations, 2015. **Other Key Points:** * The company has a Vigil Mechanism / Whistle Blower Policy. * Details on Directors seeking reappointment, P.R. Venketrama Raja and N.K. Shrikantan Raja, including their qualifications and board attendances, are outlined. * The Board had met six times during the year and a list of meeting attendances is disclosed. * Details of unclaimed dividends are provided to encourage shareholders to claim their dividend. * An upcoming rights issue with a face value of ₹ 10 each is purposed, seeking to raise funds upto an aggregate value not exceeding ₹ 40,00,00,000/- (Rupees Forty Crores only) . * Shareholders are advised to update their PAN with the Company/Depositories. Electronic voting and AGM participation processes are detailed, including login methods for shareholders holding securities in Demat mode.

Ramaraju Surgical Cotton Mills Limited Unlisted Shares

The document is the 82nd Annual Report for 2021-2022 of The Ramaraju Surgical Cotton Mills Limited, focusing on the company’s performance and financial standing. **Corporate Overview:** * **Name:** The Ramaraju Surgical Cotton Mills Limited. * **Brands:** Surgicom and Sudarsanam Fabrics. * **Location:** Rajapalayam, Tamil Nadu, India. * **Businesses:** Surgical Division and Textile Division. * The company's equity shares are listed with the Metropolitan Stock Exchange of India Limited, Mumbai. * The company was founded by Shri N.K. Ramaraju. Shri P.A.C. Ramasamy Raja is the founder's mentor. * Shri P.R. Ramasubrahmanya Rajha is the Sridharmarakshakar of the Ramco Group. **Board of Directors & Key Personnel:** * **Chairman:** Shri P.R. Venketrama Raja. * **Managing Directors:** Smt. Nalina Ramalakshmi and Shri N.R.K. Ramkumar Raja. * Other Directors include Shri S.Sarathy Subburaj, Shri N.K. Shrikantan Raja, Shri P.J. Alaga Raja, Justice Shri P.P.S. Janarthana Raja, Shri V. Santhanaraman, Shri P.J. Ramkumar Rajha, and Shri P.A.S. Alaghar Raja. * **Chief Financial Officer:** Shri N. Vijay Gopal. * **Company Secretary:** Shri Walter Vasanth P J. * **Secretarial Auditor:** Shri M.R.L. Narasimha * **Cost Auditor:** Shri M. Kannan **Ordinary Business & Special Business Resolutions:** * The Annual General Meeting (AGM) is scheduled for December 12, 2022, via video conferencing. * Ordinary resolutions include adopting the company's financial statements, declaring a dividend of ₹1 per share for the year ended March 31, 2022, and re-appointing Shri P.R. Venketrama Raja and Shri N.K. Shrikantan Raja as Directors. * Auditors M/s. N.A. Jayaraman & Co., Chartered Accountants, are proposed for re-appointment for a second term of five consecutive years, until the 87th AGM in 2027. * Special resolutions include continuing the directorship of Shri N.K. Shrikantan Raja, who is over 75 years of age, and re-appointing Shri N.R.K. Ramkumar Raja as Managing Director for 5 years with effect from 14-02-2022. * Approving and ratifying an annual remuneration of ₹1,50,000 plus taxes and expenses to Shri M. Kannan as Cost Auditor. * Approval to enter into transactions with Taram Textiles, LLC, a related party, for the sale of textile products up to ₹1250 crores per financial year, starting 2023-2024 for three years. * Approval for the Board to borrow up to ₹1,000 Crores. **Shareholder Information & E-Voting:** * The cut-off date for e-voting eligibility is December 6, 2022. * Remote e-voting will be available from December 9-11, 2022. * Details on the e-voting process are provided for shareholders holding securities in demat mode (CDSL and NSDL) and those holding shares in physical form. * Shareholders are encouraged to register their email addresses with the company. * Unclaimed dividends for over 7 years will be transferred to the Investor Education and Protection Fund (IEPF). * Shri R. Palaniappan, Chartered Accountant, is appointed as the Scrutinizer for the e-voting process. **Financial Performance & Operations (2021-2022):** * The company has revised its estimate of useful life in respect of certain items of property, plant and equipment. * **EBITDA:** ₹6,892.70 Lakhs. * **Profit Before Tax:** ₹899.99 Lakhs. * **Total Revenue:** ₹377.97 Crores. * **Total Exports:** ₹87.70 crores. * The board recommends a dividend of ₹1.00 per share. * The company is investing ₹81.05 Crores in expansion and modernization. * Wind farm has generated 132.99 Lakhs Kwh; Wind Mill Division income at ₹8.87 Crores. * CRISIL ratings have been upgraded (Long Term Rating: CRISIL A-/ Positive). **Business Segment Performance & Outlook:** * **Textiles:** Increase in manufacturing and consumption. * **Surgical Division:** Awarded ISO 13485:2016 certification. * The company will continue to monitor manufacturing process parameters and implement various system controls to deliver consistent quality of yarn and fabric to its customers. **Key Financial Ratios (2021-22):** * **Debtors Turnover Ratio:** 65 Days * **Inventory Turnover Ratio:** 73 Days * **Interest Coverage Ratio:** 1.44 * **Current Ratio:** 1.14 * **Debt - Equity Ratio:** 2.63 * **Operating Profit Margins (EBIDTA):** 18% * **Net Profit Margin:** 1% * **Return on Networth:** 3% * **Total Debt / EBITDA:** 4.21 * **Return on Capital Employed:** 6% **Other Key Points:** * The company has 1,750 employees. * A CSR spend of ₹17.92 Lakhs. * The reports of the Statutory Auditors and Secretarial Auditors are unqualified. * The annual return is available on the company’s website. * The company’s Material Subsidiary Policy, and Risk Management Policy can also be found on its website. **Subsidiary and Associate Disclosures:** * Madras Chipboard Limited is a subsidiary (75.01% holding). * The company has several associate companies, including The Ramco Cements Limited, Ramco Industries Limited, and Sri Harini Textiles Limited. Key financial details for these entities are provided. **Directors' Responsibility Statement:** * The directors affirm that the applicable accounting standards have been followed, proper accounting records have been maintained, and internal financial controls are adequate.

Ramaraju Surgical Cotton Mills Limited Unlisted Shares

surgicom The Ramaraju Surgical Cotton Mills Limited’s 81st Annual General Meeting (AGM) will be held on Wednesday, the 25th of August, 2021 at 9:30 A.M. via video conferencing. The ordinary business to be transacted includes adopting the company’s separate and consolidated audited financial statements for the year ended March 31st, 2021 and approving the Director’s report. A dividend of ₹0.50 per share is recommended. Shri P.R. Venketrama Raja and Shri N.K. Shrikantan Raja, are eligible to be re-appointed as Directors of the Company. Shri P.A.S. Alaghar Raja, appointed as an Additional Director on June 16th, 2021, is offering himself for appointment as a Director under the Independent Director category for a period of 5 years from the date of his appointment. Shri M. Kannan, Cost Accountant is appointed as the Cost Auditor for the financial year 2021-22 for auditing the Cost Records relating to the manufacture of textile and pharmaceutical products and his remuneration of ₹1,40,000/- will be ratified and confirmed. The facility for remote e-voting shall remain open from 9.00 A.M on Sunday, the 22nd August, 2021 to 5.00 P.M on Tuesday, the 24th August, 2021. The cut-off date will be 19th August, 2021 for determining the eligibility to vote by remote e-Voting or in the AGM. Members who would like to express their views / ask questions during the meeting may register themselves as a speaker by sending their request at least 3 days prior to meeting mentioning your name, demat account number / folio number, email id, mobile number to the mail id: rscm@ramcotex.com. The procedure for attending meeting & e-Voting on the day of the AGM is same as the instructions mentioned above for Remote e-Voting. The Members can join the AGM in the VC mode upto 15 minutes before and after the scheduled time of the commencement of the Meeting. **Directors’ Report:** The Board of Directors presents their 81st Annual Report on the business and operations of The Ramaraju Surgical Cotton Mills Limited. **Financial Results:** The separate financial results for the year ended 31st March, 2021, after considering expenses and Ramaraju Memorial Fund contributions (₹70 Lakhs), but before deducting finance cost and depreciation, resulted in EBITDA of ₹7,441.31 Lakhs against ₹5,433.82 Lakhs for the previous financial year 2019-20. After deducting ₹2,199.86 Lakhs for finance cost and ₹1,752.86 Lakhs for Depreciation, the Profit before Tax for the year is ₹3,488.59 Lakhs against profit of ₹1,002.09 Lakhs of the previous financial year 2019-20. **Capital Stock and Listing on the Stock Exchange:** The authorized share capital of the company is ₹500 lakhs consisting of 50,00,000 equity shares of ₹10/- each and the paid-up share capital of the company is ₹394.66 lakhs consisting of 39,46,560 equity shares of ₹10/- each. **Dividend:** The Directors have pleasure in recommending a dividend of ₹0.50 per share. The total dividend outgo is estimated at ₹19.73 lakhs. **Taxation:** An amount of ₹607.02 Lakhs for Current Tax and Deferred Tax Liability of ₹208.08 Lakhs has been provided for 2020-21. The company's MAT Credit entitlement of ₹607.02 Lakhs has been recognized in the books. **Management Discussion and Analysis, Trade Conditions:** *Spinning Division*: An adverse impact was seen in the first two quarters of the financial year due to CoVID-19. The Spinning Division has seen some strengthening in yarn prices from early months of 2021 and is expected to continue through the third quarter of 2021-22 and possibly beyond. Cotton prices in India were lower in the first two quarters of 2020-21 due to high level of carry over stock. After relaxations announced by the Government, the manufacturing activities were resumed, and the cotton prices have increased by >30% compared to the price ruled during the initial cotton season. The prices of some imported cotton varieties especially the long staple fiber increased steeply by 40-75% within a period of 3-4 months. The company mitigated this increase by importing high-quality cotton in the first two quarters of 2020-21. From 1st February, 2021, the Government of India has withdrawn the customs duty exemption on raw cotton. Basic Custom Duty (BCD) of 5% has been imposed and a new Agriculture Infrastructure and Development Cess (AIDC) of 5% has been introduced. The total burden of customs duties on imported cotton totals to 11%. To mitigate the effect of 11% customs duty, the company planned all cotton imports through the Advance Authorization scheme. The company plans to invest in plant and equipment to improve productivity and replace machines that are having a negative impact on production at higher maintenance costs. *Surgical Division*: The Company was able to achieve steady sales during the Financial Year 2020-21. The impact of the pandemic CoVID-19 second wave is expected in first quarter of Financial Year 2021-22 as hospitals have focused on CoVID-19 patients and slowed their outpatient and elective procedures. Increased pricing will help in maintaining historical margins. *Weaving Division*: The weaving division had the highest weaving sales and contribution margins in the history of the Company. Exports: The company made export of cotton yarn and grey fabrics for ₹49.78 crores (₹68.49 crores in the previous year). **Other:** During the financial year 2020-21, the company consumed power through its windmills and rooftop solar plant. The overall power cost decreased to ₹2,029.30 Lakhs from ₹2,708.04 Lakhs. The finance cost decreased to ₹2,199.86 Lakhs from ₹2,774.42 Lakhs. The company received dividend income of ₹106.15 Lakhs. **Key Financial Ratios:** (for the year 2020-21): * Debtors Turnover Ratio (Days): 85 (58 in 2019-20) * Inventory Turnover Ratio (Days): 89 (102 in 2019-20) * Interest Coverage Ratio: 2.59 (1.35 in 2019-20) * Current Ratio: 1.13 (0.84 in 2019-20) * Debt - Equity Ratio: 2.18 (3.97 in 2019-20) * Operating Profit Margins (EBIDTA): 16% (12% in 2019-20) * Net Profit Margin: 12% (4% in 2019-20) * Return on Networth: 36% (17% in 2019-20) * Total Debt / EBITDA: 5.24 (8.15 in 2019-20) * Return on Capital Employed: 15% (11% in 2019-20) Financial Year 2021-22 has started with positive outlook in terms of steady customer demand for our products in Spinning and Weaving divisions and second wave of pandemic seems to have lesser impact as compared to the first wave in the previous financial year 2020-21. The US Department of Agriculture has projected that India's cotton production in 2021-22 would be higher at 378 Lakhs bales. The company has firm orders through the end of the second quarter of 2021-22 with continued order enquires. The company will be investing ₹25 Crores total (Spinning ₹20 Crores; Weaving ₹1.50 Crores and Surgical ₹3.50 Crores) and ₹45.00 Crores in a modern automated line for manufacturing bedsheets. The Company has wind mills with installed capacity of 8.30 MW for its captive power consumption. The wind farm generated 127.23 Lakhs Kwh (132.09 Lakhs Kwh of the previous year). The company has 1.20 MW of Solar Power Panels for its captive power consumption. The Company vide Extraordinary General Meeting held on January 25th, 2021 passed ordinary resolution for acquiring the shares of Madras Chipboard Limited. In accordance with Rule 5 of Companies (Accounts) Rules, 2014, a statement containing the salient features of the financial statements of the Company's Subsidiary is enclosed in Form AOC-1 as Annexure - I. The Consolidated Net Profit after tax amounted to ₹4,227.11 Lakhs (₹1,988.30 Lakhs of the previous year). * N.R.K. Ramkumar Raja and Smt. Nalina Ramalakshmi have been approved as Managing Director. * Shareholders approved the appointment of the following Independent Directors for a period of 5 consecutive years: Justice Shri P.P.S. Janarthana Raja, Shri V. Santhanaraman, Shri P.J. Ramkumar Rajha, Shri P.A.B. Raju, and Shri P.J Alaga Raja. The Shareholders of the Company are requested to approve the appointment of Shri P.A.S. Alaghar Raja (DIN: 00487312) as an Additional Director of the Company in the category of Independent Director. The following Directors retire by rotation at the ensuing Annual General Meeting and they are eligible for reappointment, Shri P.R. Venketrama Raja, (DIN: 00331406), Shri N.K. Shrikantan Raja, (DIN: 00350693). The objective of the Nomination and Remuneration Policy is to ensure that the level and composition of remuneration is reasonable and sufficient to attract, retain, and motivate directors of the quality required to run the Company successfully and that the remuneration to directors, key managerial personnel and senior management shall be appropriate to the working of the Company and its goals. The web address of the Policy is at www.ramarajusurgical.com/reports/Nomination-and-Remuneration-Policy.pdf. Independent Directors have evaluated the quality, quantity and timeliness of the flow of information between the Management and the Board, Performance of the Board as a whole and its Members and other required matters. The Board of Directors has met 5 times during the year. The Company has complied with both mandatory as well as non-mandatory Secretarial Standards. The Company has received a sum of ₹133.00 Lakhs from Directors as a loan during the financial year 2020-21, and has repaid an amount of ₹668.00 Lakhs during the year. Your Directors inform you that the Company has no obligations pursuant to Section 135(5) of the Companies Act, 2013. However, the company has spent ₹1.74 Lakhs on CSR during the year 2020-21. At the 77th Annual General Meeting, the Statutory Auditors, Chartered Accountants (FRN: 001310S), have been appointed for a period of 5 consecutive years commencing from the financial year 2017-18 and hold office from the conclusion of the 77th Annual General Meeting till the conclusion of 82nd Annual General Meeting to be held in the year 2022. Shri M.R.L. Narasimha is the Secretarial Auditor of the Company. The Board of Directors had approved the appointment of Shri M. Kannan, Cost Accountant as the Cost Auditor of the Company to audit the Company’s Cost Records for the year 2021-22 at a remuneration of 1.40 Lakhs. An extract of the Annual Return in Form MGT-9 for the year ended 31st March, 2021 is available in the Company's website at http://www.ramarajusurgical.com/investor.html. The Company has complied with the requirements regarding Corporate Governance. The Company has established a Vigil Mechanism and has a Whistle Blower Policy. Dividend amount of ₹41,923/- remaining unclaimed/ unpaid for a period of over 7 years was transferred to IEPF. The Company has 1,795 employees. Prior approval/ Omnibus approval are obtained from the Audit Committee for all related party transactions and the transactions are periodically placed before the Audit Committee for its approval. The disclosures in terms of provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1), (2) and (3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, relating to remuneration are provided in Annexure - VIII. As per Proviso to Section 178(4) of the Companies Act, 2013, the salient features of the Nomination and Remuneration Policy should be disclosed in the Board’s Report. The Company's strategic decision to focus on more value added counts using PIMA and Giza cotton has started yielding results with a good volume of yarn orders booked for Q1 and Q2 of the current year. CRISIL Ratings has upgraded its ratings in the current year on the bank facilities of the Company as follows: Long Term Rating: CRISIL A-/ Stable (Upgraded from 'CRISIL BBB+/ Stable'), Short Term Rating: CRISIL A2+ (Upgraded from 'CRISIL A2').