Annual Report: 2023
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.
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