Responding to
Shri Lakshmi Cotsyn Limited Annual Report 2012-13
Forward looking statement
In 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 forwardlooking 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 Corporate Information Our class and calibre 6
Sneak-peek into our business 4
2
Product Range and Brand 8
Armoured vehicles for the defence segment 10
Financial performance 12
Certain plans. Uncertain circumstances 14
CMD’s message
Glimpses from the print media 21
Board of Directors
18
22
Management Discussion and Analysis 24
Local to 20 Global
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 an unanticipated delay in the release of 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
Sneak-Peek Into Our Business
Our Class & Calibre
Capacities
Product Range & Brand
Local to Global
Armoured Vehicles for the Defence Segment
Corporate Information BOARD OF DIRECTORS Dr. M. P. AGARWAL - Chairman cum Mananging Director Mr. PAWAN KUMAR AGARWAL - Joint Managing Director Mr. DEVESH GUPTA - Dy. Managing Director
MR. SHARAD KUMAR BIRLA - Advocate 7/17-A, II Floor, Parwati Bangla Road Kanpur - 208002 Ph. No. (0512) 2531307
Mr. DILEEP BAJAJ - Executive Director
P. R. ADVISOR
Mrs. SHARDA AGARWAL - Executive Director
S. K. ADVERTISERS MIG F- 4 , Gujaini, Kanpur.-208022 Ph. No. (0512) 2282265
Mr. R. K. GARG - Independent Director Dr. G. N. MATHUR - Independent Director Mr. PRAMOD KUMAR SINGH - Independent Director
COMPANY SECRETARY & FINANCE CONTROLLER Mr. RAKESH KUMAR SRIVASTAVA
PRESIDENT WORKS MR. B. R. GARG
STATUTORY AUDITORS M/s PRADEEP & ASSOCIATES Chartered Accountants 27/78 A, Gagan Deep Complex Birhana Road, Kanpur-208001 Ph. No. (0512) 2313665
INTERNAL AUDITORS M/s AJAI SHANKER & COMPANY Chartered Accountants 112 / 206-A, Swaroop Nagar, Kanpur - 208002 Ph. No. (0512) 2551249
COST AUDITOR Mr. A. K. SRIVASTAVA 96 Harjender Nagar, Kanpur - 208007 Ph. No. 09839116989
LEGAL ADVISOR MR. RAM GOPAL PANDEY - Advocate Chamber No. – 17, First Floor Pt. M.L. Nehru Adhivakta Bhawan, Civil Court, Kanpur Ph. No. (0512) 2665598
2
SHRI LAKSHMI COTSYN LIMITED
BANKERS (CDR MEMBERS) 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
Central Bank of India Syndicate Bank Union Bank of India Canara Bank Bank of Baroda Punjab National Bank Indian Bank State Bank of Travancore State Bank of Patiala State Bank of Mysore Exim Bank Oriental Bank of Commerce Allahabad Bank IDBI Bank Vijaya Bank Corporation Bank State Bank of Bikaner & Jaipur Axis Bank Saraswat Bank Andhra Bank
MONITORING INSTITUTION FOR LENDERS Central Bank of India CFB, Jeevantara Building, Parliament Street, New Delhi - 110001
SECURITY TRUSTEE FOR LENDERS Centbank Financial Services Limited 1st Floor, Link House, Bahadurshah Zafar Marg New Delhi - 110002
Financial Performance
Certain Plans. Uncertain Circumstances
Md’s Message
Glimpses from the Print Media
REGISTERED OFFICE 19/X-1 Krishnapuram G.T Road, Kanpur, U.P. 208007 Ph. No. (0512) 2402893, 2402733
CORPORATE OFFICE C-40, Sector-57, Noida. U.P. Ph. No. (0120) 4544780
SUBSIDIARY COMPANIES 1.
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 AGENTS M/s Abhipra Capital Ltd. GF-58-59 World Trade Centre, Barakhamba Lane, New Delhi Ph. No. (011) 23414629, 23413893 Mail ID: rta@abhipra.com
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
Board of Directors
Statutory Section
Financials
(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
WEBSITE www.shrilakshmi.in
E-MAIL ID shri@shrilakshmi.in
CORPORATE IDENTITY NUMBER (CIN) L17122UP1988PLC009985
DEMAT ISIN NSDL & CDSL INE851B01016
LISTING Bombay Stock Exchange Floor 25, P.J. Towers, Dalal Street, Mumbai 400001 Ph. No. (022) 2272134 National Stock Exchange 5th Floor, Exchange Plaza, Bandra (E), Mumbai 400051 Ph. No. (022) 26598100 UTTAR PRADESH STOCK EXCHANGE “Padam Tower”, Civil Lines, Kanpur - 208002 Ph. No. (0512) 2338220
SCRIP CODE BSE: 526049 NSE: SHLAKSHMI
BLOOMBERG CODE SLCL IN
REUTERS CODE SHLK.BO 25th ANNUAL REPORT 2012-13
3
Corporate Information
Sneak-Peek Into Our Business
Our Class & Calibre
Capacities
Product Range & Brand
Local to Global
Armoured Vehicles for the Defence Segment
Sneak-peek into our business INCORPORATED IN 1988, SHRI LAKSHMI COTSYN LIMITED (SLCL) (FORMERLY KNOWN AS M/S. CRAFTO FABRIC PROCESSORS PVT. LTD) STARTED WITH A MODEST CAPACITY OF 60 LAKH METRES ANNUALLY FOR PROCESSING SYNTHETIC AS WELL AS COTTON FABRICS AT A VILLAGE GADHRAULLY, DIST. FATEHPUR, U.P. THE COMPANY GOT CONVERTED INTO A PUBLIC LIMITED COMPANY AND THE NAME WAS CHANGED TO SHRI LAKSHMI COTSYN LIMITED. Over the years, the company has successfully undertaken various capacity enhancement projects. Today, the Company is recognised amongst the leading players in northern India. It has integrated across all verticals from yarn manufacture, dyeing to garmenting. The Company has also installed rise-husk based Captive Power generation capacity and has an in-house chemical auxiliary unit. Products manufactured by the Company fall under two categories – regular and technical textiles.
4
SHRI LAKSHMI COTSYN LIMITED
Financial Performance
Certain Plans. Uncertain Circumstances
Md’s Message
Glimpses from the Print Media
Board of Directors
Statutory Section
Financials
Regular textiles: The Company manufactures cotton and blended fabrics, readymade garments, embroidered fabric, quilts, fusible interlining, denim, terry towels, bottom weights and home furnishing among others. Technical textiles: The Company manufactures high margin technical and safety textiles like 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 and ECW (Extreme Cold Weather) Fabrics. The Company also offers armoured and mine protection vehicles (with 360° protection) through its 100% subsidiary – Shri Lakshmi Defence Solutions Limited (SLDSL).
8
State-of-the-art manufacturing facilities at Malwan, Aung, Abhaypur, Rewari Bujurg, Noida (Uttar Pradesh), Roorkee (Uttarakhand) and Sonepat (Haryana)
July 1, 1992 Date of commencement of commercial production
August 31, 1988 Date of incorporation
25th ANNUAL REPORT 2012-13
5
Corporate Information
Sneak-Peek Into Our Business
Our Class & Calibre
Capacities
Product Range & Brand
Local to Global
Armoured Vehicles for the Defence Segment
Our class and calibre OUR DSIR RECOGNISED R&D UNIT IS ON A CONSTANT ENDEAVOUR TOWARDS DEVELOPING INNOVATIVE OFFERINGS THAT HAS ALWAYS GIVEN US AN EDGE OVER OTHERS. Nanotechnology We are working on nanotechnology fabrics and smart textiles with NCT technologies under the guidance and supervision of Dr. G. N.Mathur, Ex-Director of DRDO. The flexible sensor technology will monitor fatigue, stress, heart condition and blood pressure. Functional fabric Our special functional fabric will offer textiles with optimised material properties like colour fastness, tensile, abrasion resistance, heat proof, cold resistance, water proof, wind tightness, breathability and humidity, among others. Smart intelligent fabric Our smart intelligent fabric will offer properties like odour control, microcapsules with phase change materials, advanced wearing comfort and heating insulation, reflection materials and EIV fed protection.
ACCOMPLISHMENTS! Enjoys strong relationship with marquee clients including Fortune 500 Companies like Wal-mart and Ikea Approved supplier to Government defence establishments (Indian Army, Navy, Air Force and State Police) and is registered with several regulatory agencies Acknowledged leader in the field of Microdot Fusible Interlining Fabric, Blended Suiting & Shirting, Terry Towels, Home Furnishing, Wider Width Sheeting, Denim Fabrics, Embroidery / Lace / Quilted Fabrics, Camouflage Fabrics and Industrial Fabrics like Nuclear Bio-Chemical Fabrics, Infrared Protective Fabrics and Bullet Proof Jackets etc Ranked “Star Export House� by the office of the Joint Director-General of Foreign Trade, Ministry of Commerce and Industry and is a preferred supplier to Defense Research and Development Organization (DRDO) ISO 9001: 2008 certified by Transpacific Certifications Limited 6
SHRI LAKSHMI COTSYN LIMITED
Financial Performance
Certain Plans. Uncertain Circumstances
Md’s Message
Glimpses from the Print Media
Board of Directors
Statutory Section
Financials
DSIR recognised R&D unit.
OTHER CERTIFICATIONS NAME OF CERTIFICATE
PURPOSE
GOTS
Global Textile System
O.E. 100 & Blended
User Health & Safety
REACH
Chemical Management
OEKO-TEX 100
Skin Friendly Chemical
SA 8000
Social Accountability
ISO 9001 : 2008
Quality Management System
ISO 14001 : 2004
Environment Management System
OHSAS 18001 : 2001
Occupational Health & Safety
FAIR TRADE CERTIFICATE
Ethic Trade Practices
25th ANNUAL REPORT 2012-13
7
Corporate Information
Sneak-Peek Into Our Business
Our Class & Calibre
Capacities
Product Range & Brand
Local to Global
Armoured Vehicles for the Defence Segment
Product Range and Brand OUR DIVERSIFIED PRODUCT RANGE ACROSS ALL THE TEXTILE CATEGORIES IS MARKETED ACROSS INDIA THROUGH STRONG DEALER AND DISTRIBUTOR NETWORK.
1150
Retail presence across multi-brand outlets (MBO) wherein the brands are marketed 8
SHRI LAKSHMI COTSYN LIMITED
DIVISION
PRODUCT
Safety Textile
Bulletproof jackets, sleeping bags, IR camouflage nets, bulletproof helmet, coat combat, NBC equipments, ballistic body armour and web equipment
Technical Textile
PU coated nylon fabric, breathable fabric, IRR fabric, fire retardant fabric, water proof/repellent fabric, NBC fabric and camouflage printed fabric
Home Textile
Water repellent bed linen, organic bed spread, quilted fabric and vitamin-E-bed Linen
Terry Towel
Jacquard, sheer towels, embroidered towels, yarn dyed and quilted fabric
Garments
Denim jeans, shirts, knitted t-shirts and ladies wear
Apparel Fabrics
Fusible interlining and bottom weight
Denim Fabrics
Stretched Denim, Basic Denim, Mercerize Denim, Coated and Over-dyed Denim
Others
Lace and embroidery and suiting/shirting
Financial Performance
Certain Plans. Uncertain Circumstances
Md’s Message
Glimpses from the Print Media
Board of Directors
Statutory Section
Financials
CAPACITIES REGULAR TEXTILES (Installed capacities per annum) Suiting & Shirting 24 Mn Mtrs Denim 40 Mn Mtrs Bottom Weights 6 Mn Mtrs Terry Towels 15,000 tons Wider Width 30 Mn Mtrs Comforters 0.3 Mn pcs Garments 6.6 Mn pcs Quilted Fabric 0.4 Mn Mtrs Embroidery fabric 0.8 Mn Mtrs
TECHNICAL TEXTILES (Installed capacities per annum) Technical Textile Fabric 12 Mn Mtrs Fusible Interlining 25 Mn Mtrs Black-out Fabric 20 Mn Mtrs Flex Fabrics 17 Mn Mtrs NBC Fabric 10 Mn Mtrs IRR/MSCN Fabric 5 Mn Mtrs Mn: Million
BRAND UMBRELLA SLCL’s brand umbrella includes established brands like Star Track for Fusible Interlining, Alisha for Embroidery Fabric, SVL for Zippers, Galaxy for Clothing accessories, Weaves for Home Furnishings and DYFI for Garments.
25th ANNUAL REPORT 2012-13
9
Corporate Information
Sneak-Peek Into Our Business
Our Class & Calibre
Capacities
Product Range & Brand
Local to Global
Armoured Vehicles for the Defence Segment
Armoured vehicles for the defence segment SLCL OFFERS ARMOURED AND MINE PROTECTION VEHICLES (WITH 360° PROTECTION) THROUGH ITS 100% SUBSIDIARY – SHRI LAKSHMI DEFENCE SOLUTIONS LIMITED (SLDSL). IT ALSO HAS AN AGREEMENT WITH ASHOKA LEYLAND LIMITED FOR ARMOURING VEHICLE ON ASHOKA LEYLAND. BESIDES, SLDSL IS REGISTERED WITH SOME OF INDIA’S PROMINENT DEFENCE ESTABLISHMENTS LIKE: Directorate General of Supplies & Disposal Director General of Quality Assurance Ministry of Defence (Navy) Defence Material Stores R&D Est Federation of Indian Export Organisation RDSO (Indian Railways) Indian Postal Department Vehicles and their key features Drona MPV – a blast and mine protection vehicle Front fenders and the hood, attached to the chassis aids in reducing shock transmitted to the cabin A ‘V’ shaped armouring cell on the rear wheels Protects the vehicle against mine detonation under the wheel Diverts the impact of explosion, outwards, minimising damage to the crew cabin
10
SHRI LAKSHMI COTSYN LIMITED
Financial Performance
Certain Plans. Uncertain Circumstances
Md’s Message
Glimpses from the Print Media
Board of Directors
Statutory Section
Financials
Viper – a fast moving attacking armoured vehicle Four side doors, a single rear luggage door, rotating turret and cross-country run flat tyre, a pick-up van style for additional and heavy artillery payload Capacity to carry a six-member crew Armoured to equip European B7+ armour
Dhruv – An armoured troop career Specialised air-conditioned vehicle with working space, rotating turrets and exceptionally viewing large armoured glass Comfortable seating arrangements for a fully equipped response team of 10 to 12 people built on the Ford 550 American chassis A patrol vehicle for urban policing Developed an Indian right hand drive chassis with a B4 protection level (provision to upgrade to B7) Run flat tyres and an excess payload of four tons (post armouring) with an ability to enjoy a speed of up to 95 kilometres per hour Sherpa MK7 – Special armoured protection vehicle Built with hollow cavity walls filled with special blast protective materials Installed with side armour that provides excellent protection against side load IEDs The firewall provides a second armoured wall to protect the driver and front passenger from a frontal attack The floor (over 1,134 kg) is also protected from blast and the payload, despite superior armouring Mounted on the Ford 550 chassis Armoured to the NATO STANAG 4569 level 3 that exceeds the CEN European B7 armour level The firewall provides a second armoured wall to protect the driver and front passenger from a frontal attack The floor (over 1,134 kg) is also protected from blast and the payload, despite superior armouring 25th ANNUAL REPORT 2012-13
11
Corporate Information
Sneak-Peek Into Our Business
Our Class & Calibre
Capacities
Product Range & Brand
Local to Global
Armoured Vehicles for the Defence Segment
Financial performance Net sales (Rs. crore)
Export sales (Rs. crore) 2,396.79
276.82 1,922.20
226.72
1,798.38
197.43
1,535.48 1,157.95
2008-09
2009-10
2010-11
2011-12
2012-13
EBIDTA (Rs. crore)
94.72
95.63
2008-09
2009-10
2010-11
2011-12
104.11
110.47
2012-13
PAT (Rs. crore)
446.40 62.96
91.65
[415.54]
273.98 205.78 173.88
91.55
2008-09
12
2009-10
2010-11
2011-12
SHRI LAKSHMI COTSYN LIMITED
2012-13
2008-09
2009-10
2010-11
2011-12
2012-13
Financial Performance
Certain Plans. Uncertain Circumstances
Md’s Message
Glimpses from the Print Media
Net worth (Rs. crore)
Board of Directors
Statutory Section
Financials
Net Fixed Assets (Rs. crore)
902.75
1,773.05
1775.99
2011-12
2012-13
707.76
1,110.44
542.41
537.39
371.34 515.35
2008-09
2009-10
2010-11
2011-12
2012-13
2008-09
616.32
2009-10
2010-11
REVENUES BY SEGMENT 2011-12 (%)
2012-13 (%)
Suiting/Shirting
10.29
Suiting/Shirting
12.13
Technical Textile Fabric
18.64
Technical Textile Fabric
22.69
Fusible Interling
4.96
Fusible Interling
9.19
Quilted Fabric
0.12
Quilted Fabric
0.35
Embroidery Fabric
0.17
Embroidery Fabric
0.27
Denim
17.52
Denim
15.89
Terry Towel
20.25
Terry Towel
14.77
Home Furnishing
10.59
Home Furnishing
9.52
Bottom Weight
3.71
Bottom Weight
3.00
Nylon Fabrics
0.88
Nylon Fabrics
0.92
Garments
0.89
Garments
1.48
Comforters
0.25
Comforters
0.46
SLCL UAE (Subsidiary)
9.99
SLCL UAE (Subsidiary)
7.43
SLDSL (Subsidiary)
0.63
SLDSL (Subsidiary)
0.96
Syenrgy (Subsidiary)
0.93
25th ANNUAL REPORT 2012-13
13
Corporate Information
Sneak-Peek Into Our Business
Our Class & Calibre
Capacities
Product Range & Brand
Local to Global
Armoured Vehicles for the Defence Segment
Certain plans. Uncertain circumstances. What went right?
WE HELD OUR HEAD HIGH AND DID NOT GIVE UP TO THE CHALLENGING CIRCUMSTANCES WE CAME ACROSS.
Our response
14
SHRI LAKSHMI COTSYN LIMITED
What went wrong?
Financial Performance
Certain Plans. Uncertain Circumstances
Md’s Message
Glimpses from the Print Media
Board of Directors
Statutory Section
Financials
WHAT WENT RIGHT? Expansion plans Between 2008-12, we implemented greenfield projects for Terry Towels, Technical Textiles and brownfield expansion of Denim capacities. The aggregate project cost of these projects was around Rs. 1,400 crore. During the implementation and commissioning of these projects, we aggressively carried out advance marketing to assess the potential customer, its size, preference and future trends in these products by undertaking merchandize sales, with the help of in-house designers, technicians and marketing team. Our roadmap was set. After successful expansion of the phase I of terry towel project, the Company proposed phase II expansion from 3000 Tons to 15000 Tons per annum at an estimated project cost of Rs. 377.81 crore and term loan facility to the tune of Rs. 250 crore. At present, all the projects have been completed as planned and manufacturing from these projects have started. The company is now ready with customer acceptance and established facilities and products.
WHAT WENT WRONG? Non-availability TUFS Subsidy There was an impending delay in the release of subsidy, despite all clearances. We are awaiting Ministry of Textiles’ action to call Inter Ministerial Steering Committee (IMSC) meeting and clear the cases of list II. The non- availability of subsidy to the extent of Rs. 165.66 crore has added pressure on the liquidity position of the company. These liquidity constraints further led to under utilization of production capacity in the absence of sufficient raw material. Additional cost resulting out of the conversion of brownfield project to greenfield project After-effect of the financial turmoil of 2008 delayed the phase II terry towel expansion project operations by one year from COD. This project was initially proposed as a brownfield project at the existing Malwan unit. However, owing to the delay, the project was implemented as greenfield project at Abhayapur. With the change in location, the Company had to incur additional cost of Rs. 36.92 crore towards land, building and balancing equipments for obtaining higher sales and better EBIDTA.
25th ANNUAL REPORT 2012-13
15
Corporate Information
Sneak-Peek Into Our Business
Our Class & Calibre
Capacities
Product Range & Brand
Local to Global
Armoured Vehicles for the Defence Segment
Certain plans. Uncertain circumstances.
Delay in financial tie-up There was a delay in the financial tie up for the brown field expansion of Denim Fabric and Wider-width sheeting and Greenfield expansion in Technical Textile segment aggregating to project cost of Rs.993 crores (Rs.693 crores Term Loan and Rs.199 crores Equity). The COD was deferred by 3 months namely dew to non release of term loan which was linked to margin money to brought in by the promoters on pro rata. The Company also could not raise equity due to poor condition of the stock market and thus have to avail high- interest bearing mezzanine funding of Rs.175 crores. This impacted the sales as the Company could not utilized the enhanced capabilities. The interest cost of mezzanine funding of Rs.175 crores further impacted the profitability. Fluctuation in cotton and yarn prices The unexpected fluctuation in cotton and yarn prices since 2011 had put the company in tremendous pressure towards selling price of products. Export contracts/domestic market orders were booked in advance for six months forward which resulted in causing huge deficit in EBIDTA margin. To maintain profitability, the Company further pushed sales to long-term customers at pre-contracted prices. The company did so in anticipation that the prices would gradually improve and the customers could still make profits. However, the scenario worsened further leading to its customers suffering loss. The customers claimed for sales rebate/discounts towards sales made in earlier quarters, which further impacted our profitability. Working capital disbursement With the Company going through a financial stress, the service of monthly interest got delayed. The working capital funds had to be utilised towards payment of delayed interest to save bank accounts from becoming NPA. Further, over the past two years, the Company has been getting working capital disbursements in piecemeal. The shortfall of working capital funds hampered the production process. Institutional order delayed and cancelled The Company had substantial institutional orders from defence establishments like CRPF, BSF, MOD, ITBF, Assam Rifles, OCF and OEF among others. Owing to shortage of working capital, the Company could not deliver on time. In most of the cases orders were cancelled and BG forfeited. The Company had to bear liquidated damages of upto Rs. 6 crore (10% of order Value). This contributed to the additional loss to the company.
16
SHRI LAKSHMI COTSYN LIMITED
Financial Performance
Certain Plans. Uncertain Circumstances
Md’s Message
Glimpses from the Print Media
Board of Directors
Statutory Section
Financials
Additional expenses The Company has never compromised in setting up best manufacturing facilities, technology, infrastructure, machines and equipment, irrespective of project cost. The bankers were never approached for cost overrun. Instead, the Company preferred to use the internal accruals. There was an additional expenditure made to the tune of Rs. 206.15 crore in recently implemented projects which was funded through internal accruals. This further added to liquidity stress as the internal accruals would have instead been used for operational purpose. However, these expenses were necessary for achieving better production efficiency in the long run.
OUR RESPONSE With a view to tide over the liquidity problems arising out of the industry situation, weaker macro-economic environment combined with company specific issues of growing debt, delayed realisation of debtors, working capital shortfall, delay in project completion and cashflow mismatch, the Company approached its lenders for restructuring of its debt under the CDR mechanism. A Joint Lenders Meeting (JLM) was held on February 25, 2013 wherein it was decided to refer the case to the CDR Forum. Besides, the Company is also exploring further funding through sale of non-core assets, strategic investors and private equity/right issues that will allow the Company to resume its regular production. The release of TUFS subsidy will further help the Company to reduce its working capital irregularity. The necessary steps towards an immediate release of this subsidy have already been taken.
217
Rs. crore
Order book under different product profile 25th ANNUAL REPORT 2012-13
17
Corporate Information
Sneak-Peek Into Our Business
Our Class & Calibre
Capacities
Product Range & Brand
Local to Global
Armoured Vehicles for the Defence Segment
CMD’s message Dr. M.P. Agarwal is a first generation entrepreneur and doctorate in textile costing, having over three decades of experience in this line of business.
Dear Shareholders, We may have to struggle to achieve our goals, but our struggles may yield as much growth as our learning. The strengths we develop in overcoming challenges will be with us in the eternities to come. The year 2012-13 has been a mixed year for us. On one hand, we entered the 25th year of our operations. At the same time, we faced one of the toughest challenges ever. The Company entered into financial stress owing to huge capex incurred during last five years. We undertook aggressive expansions for different products with an investment of over Rs. 1,400 crore over the past few years. This was reflected in the sales, which increased from Rs 1,066.60 crore in 2008-09 to Rs. 2,171.97 crore in 2011-12. In the same period, the PAT, Net Worth and Fixed Assets grew 58%, 153% and 274% respectively. The unavoidable Dr. M. P. Agarwal Chairman cum Managing Director
circumstances in 2012-13 spoilt the good show we had put up in the past. The unanticipated delay in the release of funding created liquidity constraints, making it difficult for the Company to meet its regular operational expenses and serve its debts. As a proactive approach, we did not let the situation worsen further and approached our lenders for restructuring of the debt under the CDR mechanism.
18
SHRI LAKSHMI COTSYN LIMITED
Financial Performance
Certain Plans. Uncertain Circumstances
Md’s Message
Glimpses from the Print Media
Board of Directors
Statutory Section
Financials
IMMEDIATE LIQUIDITY MEASURES
Government tenders: Having already supplied products to
Sale of non-core assets: We plan to sell the unused 200
Indian Army, Navy, Air Force and State Police, we are now
acres of land belonging to our group Company, Shri Lakshmi
actively seeking more orders through Government Tenders.
Power Ltd. The land was acquired at Raipur (Chhattisgarh) for
The Company is actively participating in Government
setting up 300 MW of Thermal Power project (MoU with the
Tenders. Being one of the organised player in this segment,
Chhattisgarh Government). We are expecting a realisation of
the Company stands higher chances of getting new orders
Rs. 20 crore through this sale, which will be utilised towards
from the Government of India. The Company has already
the revival of our core business.
received prestigious order from Ministry of Defence for
Infusion of funds through strategic investors: We have initiated discussions with few strategic investors who believe in our efficiency and potential to grow. We are in advance talks and expect a good fund infusion. Infusion of funds through capital markets: We are looking forward to raise equity through capital markets by way of rights issue / private equity to the extent of Rs. 500.00 crore over the span of five years. We have already appointed the investment bankers for the rights issue. Documents required for filing with the regulators are being processed. We shall hit the market as soon as the conditions of the capital markets improve.
Rs.35 crore in respect of NBC suit in July 2013 to be manufactured at Technical Textile Unit. Hence, our efforts are on to make the Rewari Bujurg Unit fully operational at the earliest. We are hoping for a fast-track release of the priority loan for capex by the bankers. Our subsidiary SLDSL undertook few important JVs (Joint Ventures) and EOI (Expression of Interest) during the year. It included a MOD Project for around 700 light-armored mobility, collaboration with Ashok Leyland Defence Sysytem (ALDS) for ATC (Armored Troop carrier), participation to supply around 30 Civil Version Toyota Fortuner to BEML and participation in MOD Tender for supplying 1,58,279 Bullet proof Helmets with Communication Set. SLDSL collaborated
THE UNUTILISED POTENTIAL
with the US-based 3M for their MIL approved peltor
We are quite optimistic about the revival of our business
communication sets.
and operations as we are yet to completely explore the underlying potential of the projects we have undertaken. Once the required funding is met for these projects, we plan to undertake the following revival strategies going ahead: Marketing of technical textile products: We shall aggressively market the high-margin technical textile products to leverage the increasing demand from domestic as well as global markets. Being the early entrant into this segment, we are expecting to generate a sale of around Rs. 1,400 crore and an EBIDTA margin of 21% by 2017 and gain a significant market share.
ALL IS NOT LOST Changes are inevitable and not always controllable. What can be controlled is how you manage, react to and work through the change process. Considering the above mentioned potential areas and the order book of Rs. 217 crore, we are still technically feasible and economically viable. The Company is thankful to all the bankers, CDR cell officers, Govt. Dept. officers, shareholders, customers, suppliers and the employees who have been our strong supporting hands in the challenging times. This inspires us to move ahead and gives us the belief that this is just a passing phase.
Benefits of backward integration: The spinning unit project at Malwan will act as a backward integration for the company.
Warm Regards
This will allow us to mitigate ourselves from the volatile raw
Dr. M.P. Agarwal
material price fluctuations, resulting in a savings of around Rs. 24.00 crore annually. 25th ANNUAL REPORT 2012-13
19
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Armoured Vehicles for the Defence Segment
SLCL HAS A PROMINENT PRESENCE ACROSS THE GLOBE AND HAS DEVELOPED A STRONG CLIENT BASE.
Local to
India Besides domestic sales, the Company has the presence in Indian Navy, Indian Air Force, Ordnance factories, Ordnance parachute factories, Ordnance clothing factories, Central Paramilitary
Global
forces, State police forces, Indian Railways and Indian Army UK
CANADA
SWEDEN
SOUTH KOREA FRANCE
GERMANY
USA
SOUTH AMERICA
ITALY INDIA
SOUTH AFRICA AUSTRALIA
International
20
USA: Target, Burlington Coat Factory, TJX Group, Shopko, Meijers, Lacoste, Kenneth Cole, Joseph Abboud, Martha Stewart
South America (Mexico, Brazil, Peru, Columbia): Walmart, Sams Club, Falabella and Liverpool
Canada: Walmart, Loblaws, Hudson Bay Company
Sweden: Ikea, D&J Franktextil and Westport
France: BHV, Casino,Caz, Decathalon, Carrefour and Auchans
UK: Primark
Germany: XXX Lutz and NKD
South Africa: Edgars, Mr. Price and Sheet Street
Italy: Frette
Spain: El Corte Ingles and Hepa
Australia: Myers
South Korea: E-Mat
SHRI LAKSHMI COTSYN LIMITED
Financial Performance
Certain Plans. Uncertain Circumstances
Md’s Message
Glimpses from the Print Media
Board of Directors
Statutory Section
Financials
Glimpses from the print media
25th ANNUAL REPORT 2012-13
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Board of Directors Dr. M. P. Agarwal Chairman & Managing Director Experienced professional [Qualified Cost Accountant (FICWAI) and Doctorate in Textile costing (PhD)] turned entrepreneur with over three decades of experience has been awarded by wellknown Delhi Ratan Award and honoured by various intellectual forums.
Mr. Pawan Agarwal Joint Managing Director He is Science graduate and has proficiency in computer application, fabric processing and technical textiles. He has 18 years of rich experience and controlling production activities, quality controls and marketing
Mr. Devesh Gupta Deputy Managing Director He has rich experience of 30 years in Textile Auxiliary manufacturing, Chemical Engineering, procurement and inventory management. He is entirely taking care of raw material procurement textile, chemical engineering process, efficiency and tight control over cost.
Mr. Dileep Bajaj Executive Director He has more than 35 years of experience in Project & Financial Management especially in Textile Industry, looks after Corporate office at Noida.
22
SHRI LAKSHMI COTSYN LIMITED
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Glimpses from the Print Media
Board of Directors
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Financials
Mrs. Sharda Agarwal Promoter Director He is actively involved in the business of the Company and played an active role in the management of the Company.
Prof. (Dr.) G. N. Mathur Independent Director 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 university and Doctorate in Engg. From University of Detroite, U.S.A. Presently associated with the University of Arkansas, U.S.A. and is working on Nano Technology and its application in Textiles to manufacture Smart Textiles. Mr. R. K. Garg Independent Director A Management graduate with over 34 years of experience. Has worked with DLF & DCM Shriram.
Mr. Pramod Kumar Singh Independent Director Mr. Pramod Kumar Singh has rich experience of over 25 years in the field of media and Politics and has been a Former Advisor to Union Textile Minister. He is post graduate in Political Science from Allahabad University and M. Phil. (International Politics) from Jawaharlal Nehru University (JNU) New Delhi.
25th ANNUAL REPORT 2012-13
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Management Discussion and Analysis COMPANY OVERVIEW
GLOBAL TEXTILE INDUSTRY
Shri Lakshmi Cotsyn Limited (SLCL) is one of the largest
The global textiles and apparel industry has evolved over
textile players in northern India. It has established itself as
the years. Countries like US, European Union, China, Japan
a manufacturer of cotton and blended fabrics, readymade
and India are amongst the largest consumption hubs for
garments, technical textiles, embroidered fabric, quilts,
textiles. While production is highly concentrated in China,
fusible interlining, denim, terry towels, bottom weights,
India, Bangladesh, Vietnam and Turkey. Capacity-wise,
home furnishing etc. Besides, the Company also
China, India, Pakistan, Bangladesh, Thailand and Indonesia
manufactures high margin technical and safety textiles
are amongst the global leaders, with China alone having a
(Water Repellent Bed Linen, Vitamin E bed Linen, Fire
lion’s share of around 45% of the global installed spinning
Retardant Fabrics, Organic Bedspread, Breathable Fabrics,
and weaving capacity.
NBC (Nuclear, Bio-Chemical) Fabrics, MSCN (Multispectral
Over the past 15 years, the Global Textile industry has
Camouflage Nets) Fabric, Flex Fabric, Black out & ECW
consistently witnessed a modest compound annual growth
(Extreme Cold Weather) Fabric. The Company has SLCL
rate (CAGR) of 5%. According to US Comtrade, Technopak
state-of-the-art manufacturing facilities located across India.
analysis estimates, global fibre demand is expected to
The DSIR approved R&D capabilities and its talented design
witness 2% CAGR and reach USD 123 bn by 2021. Yarn
team, allows the Company to focus on delivering innovative
demand, on the other hand, is expected to witness 3%
textile products.
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.
1060
GLOBAL TEXTILE AND APPAREL TRADE
840 662 711
CAGR 2011-12 (%) Apparel
6
Fabric
1
Yarn
3
Fiber
4
Others
3
Total
5
(Source: Textile & Apparel Compendium 2012)
24
SHRI LAKSHMI COTSYN LIMITED
530 389 74 31
42
78 38
49
55 167
145
126 2011(E)
81 46
2016(P)
2021(P)
Financial Performance
Certain Plans. Uncertain Circumstances
Md’s Message
Glimpses from the Print Media
Board of Directors
Statutory Section
Financials
SLCL’s extensive marketing and distribution network
material availability (cotton, wool, silk, jute) and relatively
spans across India and abroad. It has some of the globally
cost-effective workforce. The presence of a number of
recognised clientele like IKEA, Wal-Mart, Macy’s, Bed
small-scale players makes the industry very competitive
Bath & Beyond, Loblaws, JC Penney, Shopco, Meijer’s,
despite large and growing market. Thus, encouraging
Lacoste, Frette, Westport, HBC, El-Corte Ingles and Sheet
manufacturers to produce smartly and innovatively.
Street, among others. The Company is exploring further
After a challenging 2011-12, the Indian textiles sector
possibilities of adding more clients in the US and Europe.
recovered significantly. There was around 7.5% rebound in sales and realisation owing to increase in demand.
INDIAN TEXTILE INDUSTRY
Productivity on the other hand, also witnessed a growth.
Overview
Both yarn and fabric production increased by approximately
The Indian textile industry enjoys contributes 4% to the
6.8% and 7.1%, respectively. On the export front, the
gross domestic product, approximately 14% to industrial
sector witnessed a mild recovery and grew by around 8%
production, 12% of the country’s total exports, 27% of
in rupee terms. With declining rupee and revival of demand
total foreign exchange earnings and is the second largest
from countries like US and UK, the sector is expected to
employment provider.
witness good times ahead.
India is one of the world’s most competitive manufacturers of yarn, fabric and garments owing to abundant raw
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
1.60 lac crore+
among the Asian nations owing to deteriorating exportcompetitiveness of China. Besides, increasing domestic
Indian commercial banks‘ exposure to the country’s textile sector.
and international demand shall further boost the sector. The sector is expected to be worth USD 223 bn by the end of 2021. 223
MARKET SIZE OF INDIAN TEXTILE INDUSTRY – DOMESTIC AND EXPORT (USD bn)
CAGR: 10.1%
70
78
2009
2010
143
89
2011
2016E
2021E
(Source: Technopak, Ministry of Textiles)
25th ANNUAL REPORT 2012-13
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Technical textiles
The government has made an allocation of USD 1 bn for
The technical textile segment is expected to expand at a
SMEs and has also provided an exemption in custom duty
CAGR of 21.3% between FY12–17 to USD 31.3 bn. This
for raw materials used by the sector. Government further
growth shall be driven by the healthcare and infrastructure
plans to launch a USD 44.2 mn mission for the promotion
sectors.
of technical textiles, and cleared plans to set up a new research centre for the industry.
Technical textiles industry (USD bn) 31.3 CAGR: 21.3%
11.9
FY17E
FY12 (Source: Ministry of Textiles, Techtextil, IBEF)
There has been a significant increase in the sale of home
makes companies in India a leader in the US and the UK,
textiles products like rugs, carpets, curtains, upholsteries,
contributing two-third to their exports. Going ahead, the
bed linens and towels owing to growth of housing,
industry is expected to expand at a CAGR of 8.3% and is
office, hospitality and healthcare. Today India accounts
expected to be valued at USD 8.2 bn by 2021.
for 7% of global home textiles trade. Superior quality 8.2
Home textiles industry (USD bn)
CAGR: 8.3% 5.5 3.7
2011
2016E
2012
(Source: Ministry of Textiles, Techtextil, IBEF)
Ready-made garments
industry aims to achieve Rs 80,000 crore exports in 2013-
Men’s wear dominated readymade garments sector, is
14, an 8-10% growth over previous year.
now witnessing a growing contribution from women’s as
Denim
well as kid’s wear. The growth from this sector is largely
Rising number of working women, lifestyle changes and
driven from tier I cities. However, various players in this
evolving culture has driven the demand for western
segment now consider tier II and tier III cities as part of the
wear, specifically jeans amongst women. Growing brand
business expansion. Further, new concepts such as plus
awareness and consciousness has given push to the
size clothing, cutomised clothing, etc. are contributing to
organized denim market. According to RNCOS research, the
the growth of this segment. India’s readymade garment
Indian denim market is projected to expand at a CAGR of over 18% between 2012-2015.
26
SHRI LAKSHMI COTSYN LIMITED
Financial Performance
Certain Plans. Uncertain Circumstances
Md’s Message
Glimpses from the Print Media
Board of Directors
Statutory Section
Financials
CHALLENGES
by the financial institutions, provides safeguard against
Despite growth opportunities, the textile industry is
exchange rate fluctuations (not exceeding 5% per annum)
exposed to several hurdles with respect to production,
and 5% interest reimbursement and 10% capital subsidy for
marketing, exports and support infrastructure. These
specified finishing machinery, garmenting machinery and
include:
technical textiles machinery.
Lower value-addition
Scheme for Integrated Textile Parks
Lower economies of scale
The Ministry of Textiles plans to emphasise the weaving
Slow modernisation process
sector through the Technology Upgradation Fund Scheme
Volatile raw material prices
(TUFS). The scheme encourages the establishment of
Weak supply chain linkages
Greenfield textile infrastructure where the State Government
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
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.
GOVERNMENT INITIATIVES
Technology Mission of Technical Textiles
Government’s support with favourable policies has been
The mission aims to address infrastructure improvement
a key ingredient for the growth of this industry. Here are
in terms of testing facilities, market development support,
some of the initiatives:
skilled manpower, R&D and defining specifications and
Technology Upgradation Fund Scheme
standards for technical textiles, among others. Besides, it
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
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, 2013-14 Focus 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 25th ANNUAL REPORT 2012-13
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STRONG FUNDAMENTALS COMBINED WITH POLICY SUPPORT AUGURS WELL FOR THE TEXTILE INDUSTRY GROWTH
Growth demand
Policy support
Increasing investments
Rising demand in exports
100%FDI in textile sector Investing
Growing domestic and foreign investments Resulting in
Increasing demand in domestic market
Government setting up SITs and Mega Cluster Zones
Commitment of USD 140 billion of foreign investments
Growing population driving demand for textiles
Increasing loans under TUFS
Government investment schemes (TCIDS and APES)
(Source: Ministry of Textiles & IBEF)
INDIAN DEFENCE SECTOR
for global defence sector players with the total offset
India is in a position to build a vibrant local defense-industry
opportunity for the commercial segment in the country set
ecosystem that can support both domestic and export
to cross the $10-bn mark in 2013. With the Government
requirements. The sector, currently valued at an estimated
expected to raise the foreign investment limit in the
$12bn, is expected to continue on its growth trajectory,
defence sector to 49% from 26% this year, the country
largely driven by capital-equipment spending. Other factors
is likely to witness a rush of investments. Increasing
responsible for driving domestic demand include:
private sector participation, will further aid the industry
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
28
SHRI LAKSHMI COTSYN LIMITED
transformation.
SWOT ANALYSIS OF SLCL Strengths 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
Financial Performance
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Md’s Message
Glimpses from the Print Media
Board of Directors
Statutory Section
Financials
Technically sound with ultra modern machineries
opportunity cost viz a viz the export market which is
Positioned itself as an integrated Multi product player of
considered to be very lucrative
textile value chain
Less focus on marketing and creating brand equity for
Strong niche product portfolio for domestic and
its products
international brands
High financial cost due to over debt.
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
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
repellent bed sheets, mosquito repellent bed sheets,
different products according to the client requirement
fire retardant fabrics etc.) with defense applications
Technical textile products can be used as an application
Strong presence in defense related textiles (uniforms,
across auto component, construction, home furnishing,
camouflage textiles to armored vehicles) Strong R&D capabilities proven over a decade with launch of innovative products Multiple brands for different segments
defence, hygiene and medical, components of furniture, shoes & clothing, railways and aerospace, packaging, sports & leisure segments Threat
Market leader in fusible interlining segment (30% plus
Increasing competition from unorganized sectors and
market share)
other peers
High-margin Technical Textile set-up Weakness
Competition from neighbouring countries and in particular from China, Pakistan and Turkey in respect of
Sensitive to the change in raw material prices may
Home textile and Technical Textile products
affect the profitability of the company
Fluctuations in raw material (cotton) prices pose a
Low brand visibility in readymade garments due to lack
threat, as its production depends upon availability of
of exclusive stores
raw material
Relatively high leverage
Increasing competition from existing players in textiles
Since more than 80% of the sales is domestic in nature, the company may be losing out on the
and defense related products The fragmented nature of the industry and compared to international standards our capacities are small 25th ANNUAL REPORT 2012-13
29
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Availability of all the varieties of cotton, yields is one of
Advanced TQM methodologies deliver consistent &
the lowest in the world and inconsistent in quality
internationally benchmarked quality standards. Products
Slow improvement in quality to international standards
move in numbered batches; a thorough batch-wise
and adoption to fast changing fashion demands
inspection is conducted in line with client specifications. In the absence of such parameters, the Company follows
FINANCIAL REVIEW
internal protocols. The TQM teams issue a green card if
Accounting policy
all parameters are compiled with. In the event of non-
Accounts prepared on a historical cost basis, based on
compliance, the batch is withdrawn and a red card is issued
accrual method of accounting in accordance with applicable
for subsequent analysis and rectification. In this way, the
accounting standards issued by The Institute of Chartered
customers are provided with best quality products.
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
RESEARCH & DEVELOPMENT The 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
Particulars
2012-13
2011-12
Government of India has further recognised the Company
Net Sales
1,922.19
2,369.79
as a centre for skill upgradation of Industrial workers.
276.82
197.43
91.55
446.40
Pbt
(367.68)
168.88
Pat
(415.54)
110.47
Fixed Assets
1,775.99
1,627.37
fabrics and smart textiles with sensor technology to monitor
433.10
4.90
fatigue, stress, heart condition, blood pressure etc. Besides,
Exports Sales Ebidta
Other Current Assets
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
it also manufactures various technical textile fabrics which include high altitude fabric, PU-Coated nylon fabrics, flex
QUALITY
fabrics, carbon fabrics and IRR fabrics. The Company
The Company understands the underlying importance of
recently introduced membrane laminated fabrics for rain
quality and pays attention to each detail. The Company’s
& extreme cold weather ECW Clothing which do not allow
quality commitment is reinforced via globally benchmarked
water to come in but allows body sweat and body heat
quality assurance protocols. The procurement team keeps
to go out in vapour form, thus saving an individual from
a check on the cost and the quality of the raw materials.
getting wait as well as getting a frost bite in extreme cold
The manufacturing and packaging team does not leave
situations.
any stone unturned in checking the quality before releasing product into the market. The Company’s TQM enhances further quality awareness.
30
SHRI LAKSHMI COTSYN LIMITED
HUMAN RESOURCES & INDUSTRIAL RELATIONS Human Resources are the key assets that have driven SLCL
Financial Performance
Certain Plans. Uncertain Circumstances
Md’s Message
Glimpses from the Print Media
Board of Directors
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Financials
over the years. In order to maintain their high spirits, the
capable of improving the efficiency of the operations and
Company ensures encouraging, nurturing and appreciative
sustainability of the business. The system ensures that all
environment for their more than 5000 employees. The
assets are safeguarded and protected against loss from
Company regularly trains them for skill development and
unauthorised use or disposition and that those transactions
motivates them to focus on achieving the Company’s goals
are authorised, recorded and reported correctly. Operating
and objectives. Not only that, the Company also undertakes
managers make sure that all the operations within their
special soft skill sessions to make them grow professionally
area are compliant and safeguarded against any risks,
as well as personally. Being a part of IKEA approved list of
whereas the internal auditors carry out random audits
vendors, the Company further follows stringent guidelines
to detect flaws in the system. Internal audit reports are
with respect to human resources and industrial relations.
prepared on the respective areas/units to create awareness and corrective actions are taken to rectify them. These
RISK MANAGEMENT
reports are reviewed by the management team and then by
SLCL’s risk management team have evaluated the possible
the Audit Committee of the Board for follow up action.
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,
CORPORATE SOCIAL RESPONSIBILITY
materials-in-process and finished Products.
The Company continues to strive for sustainability in
INTERNAL CONTROL SYSTEM
operations by promoting the integration of CSR into business strategy as well as everyday functioning. The
The large size and nature of the business demands the
Company will continue to focus its resources, strengths
Company to maintain a proper internal control system.
and strategies to achieve its vision of creating a rich
Constant efforts are made by the management to
product mix in a largely matured Indian Textile market. Our
maintain a sound financial and commercial practice
comprehensive set of policies, practices and programs are 25th ANNUAL REPORT 2012-13
31
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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 integrated throughout business operations and decisionmaking processes where environmental and social performance is managed alongside financial performance.
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
Beyond profit maximization, we extend to include an
employees and promote and maintain their health. While
acknowledgement of our responsibility to a broad range
maintaining a record free from accidents and disasters, we
of stakeholders, as well as employees, customers,
assure the safety of employees and local communities. We
communities and the environment.
make continuous efforts to improve our standards of safety
Employee welfare
health management. We regularly conduct educational
The Company believes that alignment of all employees
activities that raise awareness about safety and health.
to a shared vision and purpose is vital for winning in the
Environment
market place. It also recognizes the mutuality of interests
The Company undertakes numerous initiatives, involving
with key stakeholders and is committed to building
employees towards the betterment of the environment. It is
harmonious employee relations. The collaborative spirit
reflected in the following initiatives:
across all sections of employees has resulted in significant enhancement in quality and productivity. We adhere to
32
SHRI LAKSHMI COTSYN LIMITED
Financial Performance
Certain Plans. Uncertain Circumstances
Md’s Message
Glimpses from the Print Media
Board of Directors
Statutory Section
Financials
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 In campus greening
Antrik Suraksha Program
Encouraging judicious use of natural resources
Distribution of blankets and warm clothes
Recycling, pollution control to ensure clean air and
Drinking water arrangement for general public
water and reduction of landfill wastes
Environment plantation
Developed 30 acres of land for organic product
Felicitation Ceremony or Abhinandan Samaroh
development
Weaves open championship
25th ANNUAL REPORT 2012-13
33
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