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Suryalakshmi Cotton Mills Directors Report, Suryalakshmi Co Reports by Directors
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Suryalakshmi Cotton Mills
BSE: 521200|NSE: SURYALAXMI|ISIN: INE713B01026|SECTOR: Textiles - Spinning - Cotton Blended
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Download Annual Report PDF Format 2013 | 2012 | 2011 | 2010
Directors Report Year End : Mar '13    Mar 12
To The Members
 
 The directors are pleased to present their Fiftieth annual report on
 the business and operations of the Company and the financial results
 for the year ended 31st March, 2013.
 
 FINANCIAL RESULTS                                        (Rs. In Lakh)
 
                                              2012-2013    2011-2012
 
 Gross Profit before Interest & depreciation   10783.53      9248.27
 
 less : Interest                                3348.13      2980.96
 
      : depreciation & amortisation expense     2909.71      6257.84 
 
                                                2456.51      5437.47
 
 Profit/(loss) before prior year adjustment     4525.69      3810.80
 
 Exceptional Items *                             281.92            -
 
 Profit before tax for the year                 4243.77      3810.80
 
 lESS : Provision for Income Tax for the year    850.00       850.00
 
 lESS : deferred tax liability                   357.12       130.25
 
 Profit / loss after tax                        3036.65      2830.55
 
 add : Profit brought forward from last year    5633.14      3525.11
 
                                                8669.79      6355.66
 
 dividend on Preference Share Capital                 -         0.49
 
 dividend on Equity Share Capital                290.45       363.06
 
 Corporate dividend Tax                           49.36        58.97
 
 Transferred to General reserve                  310.00       300.00
 
 Profit transferred to Balance Sheet            8019.98      5633.14
 
                                                8669.79      6355.66
 
 
 
 - Exceptional item includes provision for FSa charges for the year
 2010-11; 2011-12 and Sales Tax subsidy received for the year 2007 - 08
 to 2009  10.
 
 OPERATIONS
 
 The net sales for the year at Rs.705.44 crore shows a modest increase of
 5.5% over the previous year. The profit before tax at Rs.42.44 crore has
 registered an increase of 11.36% over the previous year. The production
 in spinning and denim divisions has shown marginal increase over the
 previous year. The average yarn realisation in the domestic market at
 
 Rs.153.22 per kg is marginally higher at 7%, while PV yarn has shown a
 higher increase of 10%. In the denim division both the domestic and the
 export realization have been marginally lower compared to the previous
 year. While the domestic market has seen a decent increase of 18% in
 volume, exports have been significantly lower by about 33%.
 
 The Cotton rates have been lower in the year while PSF and VSF have
 been more or less steady in the spinning division. In the denim
 division the cotton has been cheaper by around 15%. The 25 MW Captive
 Power Plant has been commissioned and the denim division is drawing
 power from the Power Plant and the Company has entered into an
 agreement with MSEdCl for supply of power for three months till July
 2013. The cost of power in the spinning division continues to be high
 on account of purchase from the 3rd parties and the production has also
 been affected due to power cuts. The net profit after tax at Rs.30.36
 crore would have been much higher but for the high cost and also
 shortage of power in a.P.
 
 DIVIDEND
 
 The directors are pleased to recommend a dividend of 20% i.e. Rs.2.00 per
 share (previous year Rs.2.50 per share).  The directors'' have, keeping in
 mind, the heavy repayments during the year 2013  14 and also the need
 to conserve resources for future expansion lined up by the Company
 recommended the dividend of Rs.2.00 per share.
 
 CAPITAL EXPENDITURE
 
 during the year under review the Company incurred capital expenditure
 of Rs.45.91 crore.
 
 POWER PLANT
 
 The Company has at present entered into an agreement for three months
 for supply of power to MSEdCl. The current year''s operations of the
 power plant has naturally resulted in some additional cost which is
 expected to be streamlined shortly. With the conclusion of the
 agreements for regular supply of power, and utilizing the corridor for
 supplying the Captive Power to amanagallu unit and commencement of coal
 supplies from Western Coal Fields, the future for the power plant is
 expected to be quite bright.
 
 EXPORTS
 
 The current year''s exports at Rs.81.80 crore is lower than the previous
 year on account of the economic slow down in European and american
 markets.
 
 MERGER
 
 The Company proposes to merge the Subsidiary company Suryakiran
 International limited with itself to effect a complete forward
 integration of denim into the garmenting facility and to reap several
 administrative advantages like simpler reporting, simplified compliance
 requirements etc.  The Company is in the process of taking the
 necessary steps in this direction.
 
 FUTURE OUTLOOK
 
 The Textile Industry has been adversely affected by the serious
 economic slow down in the global markets. The industry is now on a
 gradual recovery phase. The uncertainity in the demand for garments
 still continues while there is excess supply in the denim segment. The
 Company has not been however very seriously affected as it is operating
 in the high end segment. The Company hopes to significantly increase
 its exports and brand business with some strong and aggressive products
 and also add new markets to increase volumes.
 
 DIRECTORS
 
 during the year Sri V S V rao, has been withdrawn by IFCI ltd as its
 nominee director. Sri r.S. Vidyasagar has been withdrawn by IdBI Bank
 ltd as its nominee director and Sri k neel lohit has been nominated as
 its nominee in his place.
 
 dr. a nageswara rao and Sri r S agarwal will retire at the ensuing
 annual General Meeting and being eligible, offer themselves for
 reappointment.
 
 CORPORATE GOVERNANCE
 
 as per the revised Clause 49 of the listing agreement on Corporate
 Governance, Management discussion and analysis report forms part of the
 annual report. Further, a separate report on the Corporate Governance
 together with the Certificate from the auditors of the Company
 regarding compliance of the Corporate Governance also forms part of the
 annual report.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 The Board of directors of the Company confirms :
 
 1.  that in the preparation of the annual accounts, the applicable
 accounting standards have been followed and there has been no material
 departure;
 
 2.  that the selected accounting policies were applied consistently and
 the directors made judgements and estimates that are reasonable and
 prudent so as to give a true and fair view of the state of affairs of
 the Company as at March 31, 2013 and of the profit of the Company for
 the year ended on that date.
 
 3.  that proper and sufficient care has been taken for the maintenance
 of adequate accounting records in accordance with the provisions of the
 Companies act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities.
 
 4.  that the annual accounts have been prepared on a going concern
 basis.
 
 AUDITORS
 
 The auditors M/s. Brahmayya & Co, retire at the ensuing annual General
 Meeting and are eligible for reappointment.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 The details as required under the Companies (disclosure of
 
 Particulars in the report of Board of directors) rules, 1988 are given
 at annexure - I.
 
 DEPOSITS
 
 There are no overdue deposits as on March 31, 2013
 
 EMPLOYEES
 
 Periodic Training programmes for developing a skilled workforce,
 personality development programmes, yoga camps, etc., encouragement of
 employee participation in district / state level sports events are
 regularly undertaken.  an integrated woman focused program trains
 unskilled women to undertake skilled jobs at its units.
 
 The information required under Section 217 (2a) of the Companies act,
 1956 read with the Companies (Particulars of Employees) rules, 1975 is
 given in annexure  II.
 
 ACKNOWLEDGEMENTS
 
 The Board of directors are pleased to place on record their
 appreciation of the cooperation and support extended by all India
 Financial Institutions, Banks and various State and Central Government
 agencies.
 
 The Board also wishes to place on record its appreciation of the
 valuable services rendered by the employees of the Company.
 
 
 
                                                 By Order of the Board
 
 date : 16.05.2013                                         L.N.AGARWAL
 
 Place : Secunderabad                     Chairman & Managing Director
Source : Dion Global Solutions Limited
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