MANAGEMENT DISCUSSION AND ANALYSIS REPORT
To,
The Members,
Your Company's Directors are pleased to present the 36th Annual Report of
the Company, along with the Audited Financial Statements for the financial year ended 31st
March, 2023.
FINANCIAL SUMMARY
|
|
(Rs. in Lakhs) |
Particulars |
2022-23 |
2021-22 |
Revenue from operations |
9,548.73 |
9,721.95 |
Operating Expenditure |
9,890.48 |
9,396.57 |
Profit Before Interest, Tax & Depreciation |
(341.75) |
325.38 |
Other Income (net) |
584.07 |
551.24 |
Finance Costs |
50.25 |
31.97 |
Profit before Tax and Depreciation |
192.07 |
844.66 |
Depreciation and amortization expense |
195.43 |
165.54 |
Profit before Extra-Ordinary Item |
(3.36) |
679.11 |
Extra-Ordinary Item |
- |
- |
Profit before Tax (PBT) |
(3.36) |
679.11 |
Provision for Taxation |
3.82 |
107.93 |
Profit for the year (PAT) |
(7.18) |
571.18 |
Surplus brought forward from previous year |
9,742.02 |
9275.98 |
Amount available for appropriation |
9,751.44 |
9816.02 |
Appropriations: |
|
|
Transferred to General Reserve |
- |
- |
Dividend (excluding tax) |
74.00 |
74.00 |
Tax on Interim Dividend |
- |
- |
Proposed Dividend on Equity Share Capital |
- |
- |
Corporate Dividend Tax on Proposed Dividend |
- |
- |
Adj for Depreciation of prior years pursuant to change in useful life |
- |
- |
Fair Value Changes on Investments |
|
|
Balance Carried to Balance Sheet |
9,677.44 |
9742.02 |
EPS Basic & Diluted- Before Extraordinary Items (in Rs.) |
(0.05) |
3.86 |
EPS Basic & Diluted- After Extraordinary Items (in Rs.) |
(0.05) |
3.86 |
OPERATIONS
For the financial year 2022-23, the Company recorded a net turnover of Rs.9,548.73
lakhs as against Rs.9,721.95 lakhs for the financial year 2021-22. The Net Profit Before
Tax stood at Rs.-3.36 lakhs as against Rs.679.11 lakhs over last year and Profit After Tax
stood at Rs.-7.18 lakhs for the year as against Rs.571.18 lakhs in the last year.
SEGMENT-WISE RESULTS
The Company is engaged in the business of manufacturing garments. Therefore, there is
no separate reportable segment.
TRANSFER TO RESERVES
The Board do not propose any transfer to reserve.
DIVIDEND
The Board of Directors does not recommended dividend for the financial year ended on
31st March, 2023.
SUBSIDIARY / JOINT VENTURE / ASSOCIATE COMPANY
Your Company does not have any subsidiary, joint venture or associate Company.
MATERIAL CHANGES AND COMMITMENT
No material changes (except global pandemic situations) and commitments affecting the
financial position of the Company occurred between the end of the financial year to which
this financial statement relate and the date of this report.
ANNUAL RETURN
A copy of Annual Return as provided under section 92(3) and section 134(3)(a) of the
Companies Act, 2013 ('the Act') in form MGT-7 is made available on the website of the
Company and can be accessed at https://www.lovableindia.in/Draft- annual-return.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr.
Vindamuri Giriraj (DIN: 09719564) retires by rotation at the ensuing Annual General
Meeting ('AGM') and is eligible for re-appointment. Therefore, the Board of Directors
recommend the re-appointment of Mr. Vindamuri Giriraj as Executive Director of the
Company.
During the year Mr. Gopal Sehjpal and Mr. Sivabalan P. Pandian vacate their office as
Independent Directors of the Company w.e.f. 27th September 2022 upon expiry of their
second term as an Independent Director.
During the year, the Company had appointed the following persons:
1. Mr. Rajiv Mathur (DIN: 09639300) as Independent Director of the Company w.e.f 29th
June, 2022.
2. Mr. Amit Pandit (DIN: 02437092) as Independent Director of the Company w.e.f. 12th
August, 2022 and
3. Mr. V. Giriraj (Din: 09719564) as an Executive Director of the Company W.e.f. 29th
August, 2022.
In terms of Section 203 of the Act, the Board has designated the following persons as
Key Managerial Personnel of your Company:
Mr. L Vinay Reddy, Chairman & Managing Director
Mr. Rajashekara T, Chief Financial Officer (w.e.f. September 15, 2022)
Mr. Vineesh Vijayan Thazhumpal, Company Secretary and Compliance Officer
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
For the purpose of selection of any Director, the Nomination and Remuneration Committee
identifies the person of integrity who possess relevant expertise, experience and
leadership qualities required for the position and also takes into consideration
recommendation, if any, receives from any members of the Board. The Committee also ensures
that the incumbent fulfills such other criteria with regard to age and other
qualifications as laid down under the Companies Act, 2013 or other applicable laws.
The Board has, on the recommendation of the Nomination and Remuneration Committee
framed a policy for selection and appointment of Directors, Senior Management, and their
remuneration.
The Company's policy on directors' appointment and remuneration and other matters
provided in Section 178(3) of the Act has been disclosed in the corporate governance
report, which forms part of the directors' report. The policy is made available on the
website of the Company and can be accessed at https://www.lovableindia.in/policies
DECLARATION BY INDEPENDENT DIRECTORS
Necessary declarations have been obtained from all the Independent Directors that they
meet the criteria of independence under Section 149(6) of the Act and under Regulation 25
read with Regulation 16 of Listing Regulations. In terms of Regulation 25(8) of the SEBI
(LODR) Regulations, Independent Directors have confirmed that they are not aware of any
circumstance or situation which exists or may be reasonably anticipated, that could impair
or impact their ability to discharge their duties with an objective of independent
judgement and without any external influence. The Board of Directors have taken on record
the declaration and confirmation submitted by the Independent Directors and is of the
opinion that they fulfil the conditions specified in the Act & Listing Regulations and
are independent of the management.
Your Company's Board is of the opinion that the Independent Directors possess requisite
qualifications, experience and expertise in Corporate Governance, Legal & Compliance,
Financial Literacy, General Management, Human Resource Development, Industry Knowledge,
Technology, digitisation & innovation.
TERMS AND CONDITIONS OF APPOINTMENT
The terms & conditions of appointment Independent Director stipulates the manner of
appointment, role & functions, duties, relevant provisions of section 149, 150 and 152
of the Act and 'Guidelines for Professional Conduct' pursuant to Schedule IV to the Act
and are forming part of appointment letter.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company has constituted the following committees in compliance with the Companies
Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015:
1. Audit Committee,
2. Nomination and Remuneration Committee,
3. Stakeholders Relationship Committee, and
4. Corporate Social Responsibility Committee.
The Board has accepted all the recommendations of the above committee. The brief
description, composition and other required details of the above committees are provided
in Corporate Governance Section to this Annual Report.
FAMILIARISATION PROGRAMME FOR THE INDEPENDENT DIRECTORS
In compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015 (SEBI (LODR) Regulations"), the Company has put in place a Familiarization
Program for the Independent & Non-Executive Directors to familiarize them with the
Company, their roles, rights, responsibilities in the Company, nature of the industry in
which the Company operates, business model etc. The details of such program is available
on the website of the company www.lovableindia.in and may be accessed through the web link
https://www.lovableindia.in/policies
NUMBER OF MEETINGS OF THE BOARD
The Board of Directors met 6 (Six) times during the year on 30th May 2022,
29th June 2022, 12th August 2022, 29th August 2022, 11th
November 2022 and 14th February, 2023. For details of the meetings of the
board, please refer to the corporate governance report, which forms part of this report.
The intervening gaps between the Meetings were within the period prescribed under the
Companies Act, 2013 and SEBI (LODR) Regulations.
SECRETARIAL STANDARDS
The Company has complied with the applicable Secretarial Standards issued by the
Institute of Company Secretaries of India.
EVALUATION OF PERFORMANCE OF THE BOARD, ITS COMMITTEES, AND INDIVIDUAL DIRECTORS
The Board of Directors have carried out an annual evaluation of its own performance,
its various committees, and individual directors pursuant to the provisions of the
Companies Act 2013, the Corporate Governance requirements as prescribed under regulation
17(10), 25(4) and other applicable provisions of the SEBI (LODR) Regulations and the
Guidance note issued by SEBI.
The performance of the Board was evaluated by the Board after seeking inputs from all
the directors on the basis of various criteria such as Board Composition, process,
dynamics, quality of deliberations, strategic discussions, effective reviews, committee
participation, governance reviews etc.
The performance of the committees was evaluated by the board after seeking inputs from
the committee members on the basis of criteria such as Committee composition, process,
dynamics, deliberation, strategic discussions, effective reviews etc.
The Board and the Nomination and Remuneration Committee reviewed the performance of the
individual directors on the basis of the criteria such as Transparency, Analytical
Capabilities, Performance, Leadership, Ethics and ability to take balanced decisions
regarding stakeholders.
In a separate meeting of independent directors, performance of non-independent
directors, performance of the board as a whole and performance of the Chairman was
evaluated, taking into account the views of the executive directors and nonexecutive
directors. The same was discussed in the board meeting that followed the meeting of
independent directors, at which the performance of the Board, its committee and individual
Directors was also discussed.
PARTICULARS OF LOANS, GUARANTEE, AND INVESTMENTS
The particulars of loans, guarantees and investments have been disclosed in the
financial statements. Refer Note: 3 to the Financial statements.
RISK MANAGEMENT
Your Company has an elaborate Risk Management procedure. Major risks identified by the
businesses and functions are systematically addressed through mitigating actions on a
continuing basis. The Audit Committee reviews the status of key risks and steps taken by
the Company to mitigate such risks at regular intervals.
RELATED PARTY TRANSACTIONS
In line with the requirements of the Companies Act, 2013 and SEBI (LODR) Regulations,
your Company has formulated a Policy on Related Party Transactions which is available on
Company's website; web link at https://www.lovableindia.in/policies. The Policy intends to
ensure that proper reporting, approval and disclosure processes are in place for all
transactions between the Company and related parties.
All Related Party Transactions are placed before the Audit Committee for review and
approval. Prior omnibus approval is obtained for Related Party Transactions on a yearly
basis for transactions which are of repetitive nature and or entered in the Ordinary
Course of Business and are at Arm's Length.
All Related Party Transactions entered during the year were in Ordinary Course of the
Business and on Arm's Length basis. No Material Related Party Transactions were entered
during the year by the Company. Accordingly, the disclosure of Related Party Transactions
as required under Section 134(3) (h) of the Companies Act, 2013 in Form AOC 2 is not
applicable.
WHISTLE BLOWER MECHANISM / VIGIL MECHANISM
To create enduring value for all stakeholders and ensure the highest level of honesty,
integrity and ethical behaviour in all its operations, the company has formulated a Vigil
Mechanism in addition to the existing code of conduct that governs the actions of its
employees. This Whistle blower policy aspires to encourage all employees to report
suspected or actual occurrence(s) of illegal, unethical or inappropriate events
(behaviours or practices) that affect Company's interest / image. A copy of the Policy is
available on the website of the Company and may be accessed through the web link
https://www. lovableindia.in/policies.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION
AND REDRESSAL) ACT, 2013
The Company has adopted a Policy on Prevention, Prohibition and Redressal of Sexual
Harassment at the Workplace, to provide protection to women (including outsiders) at the
workplace and for prevention and redressal of complaints of sexual harassment and for
matters connected or incidental thereto, with the objective of providing a safe working
environment, where employees feel secure. The Company has also constituted an Internal
Complaints Committee to consider and to redress complaints of sexual harassment. The
Committee has not received any complaint of sexual harassment during the year under
review.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In accordance with the requirements of Section 135 of Companies Act, 2013, your Company
has constituted a Corporate Social Responsibility Committee. The composition, terms of
reference and other relevant details of the Corporate Social Responsibility Committee is
provided in the Corporate Governance Report.
The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company
and the initiatives undertaken by the Company on CSR activities and expenditure incurred
thereon during the year are set out in "Annexure A" of this report in the format
prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The
policy is available on the website of the Company; web link
https://www.lovableindia.in/policies.
PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Companies Act, 2013 read with rule
5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
has been appended as "Annexure B" to this Report.
The information required under Section 197 of the Companies Act, 2013 read with Rule
5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
is not applicable, since during the year under review none of the employees of the Company
was in receipt of remuneration in excess of the limits specified, whether employed for the
whole year or part thereof.
DIRECTORS RESPONSIBILITY STATEMENT
The Board of Directors of the Company confirms that:
in the preparation of the annual accounts for the financial year ended 31st
March, 2023, the applicable accounting standards have been followed and that no material
departures have been made from the same;
they have selected such accounting policies and applied them consistently and
made judgments and estimates that are reasonable and prudent, so as to give a true and
fair view of the state of affairs of the Company at the end of the financial year and of
the loss of the Company for that period;
they have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Companies Act, 2013, for
safeguarding the assets of the Company and for preventing and detecting fraud and other
irregularities;
they have prepared the annual accounts on a going concern basis;
they have laid down internal financial controls for the Company and such
internal financial controls are adequate and operating effectively; and
they have devised proper systems to ensure compliance with the provisions of all
applicable laws and such systems are adequate and operating effectively.
PUBLIC DEPOSITS
The Company has not accepted any deposits covered under Chapter V of the Companies Act,
2013.
LISTING
Your Company's shares are listed in the BSE Limited, Mumbai (BSE) and National Stock
Exchange of India Limited, Mumbai (NSE) and the annual listing fees have been duly paid.
CASH FLOW ANALYSIS
In conformity with the provisions of Regulation 34(2) of SEBI (LODR) Regulations, the
Cash Flow Statement for the year ended 31st March, 2023 is enclosed as a part
of this Annual Report.
AUDIT COMMITTEE
The details pertaining to composition of audit committee are included in the Corporate
Governance Report, which forms part of this report.
AUDITORS
Statutory Auditors
M/s. DMKH & Co., a firm of Chartered Accountants were appointed as a Statutory
Auditors of the Company for One term of 5 (five) consecutive years to hold office from the
conclusion of the 35thAnnual General Meeting held on 27th September, 2022 until
the conclusion of the 40th Annual General Meeting (AGM) to be held in year
2027.
The notes on Financial Statements referred to in the Auditors Report are
self-explanatory and do not call for any further comments. The Auditors' Report does not
contain any qualifications, reservation or adverse remark and is prepared as per "Ind
AS".
Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had
appointed M/s. D.M. Zaveri & Co., Practicing Company Secretaries, Mumbai to undertake
the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as
"Annexure C". Reply to the observations made in Secretarial Report: the
observation given by the Secretarial Auditor in respect of in respect of delay in
submission of intimation of board meeting, dated 11 November 2022 of unaudited financial
results for the quarter ended 30 September 2022 to BSE and NSE and of delay in submission
of Annual Report for FY-2021-22 with BSE/ NSE was unintentional and was occurred
inadvertently and the fine was paid by the Company.
REPORTING OF FRAUD BY AUDITORS
During the year under review, neither the statutory auditors nor the secretarial
auditors has reported to the Audit committee, under section 143(12) of the Companies Act,
2013, any instances of fraud committed against the Company by its officer or employees,
the details of which would need to be mentioned in the Board's report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
No significant or material Orders were passed by the Regulators or Courts or Tribunals
during the previous year which may impact the Going Concern Status of the Company's
Operation in the future.
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND
In terms of the provisions of Section 125 of the Companies Act, 2013 read with the
Companies (Declaration and Payment of Dividend) Rules, 2014, No transfer of Dividend was
to be made to Investor Education Protection Fund for the FY 2022-23.
Members who have not encashed their dividend warrants pertaining to the aforesaid years
may approach the Company/ its Registrar, for obtaining payments thereof at least 20 days
before they are due for transfer to the said fund.
Pursuant to the provisions of the Investor Education Protection Fund (Accounting,
Audit, Transfer and Refund) 2016 the Company has already filed the necessary form and
uploaded the details of unpaid and unclaimed amounts lying with the Company, as on the
date of last Annual General Meeting (i.e. September 27, 2022), with the Ministry of
Corporate Affairs.
CORPORATE GOVERNANCE
Your Company continues to lay a strong emphasis on transparency, accountability and
integrity.
The Companies Act, 2013 and the SEBI (LODR) Regulations have strengthened the
governance regime in the country. Your Company is in compliance with the governance
requirements provided under the new law.
Your Company has in place all the statutory Committees required under the law. Details
of Board Committees along with their terms of reference, composition and meetings of the
Board and Board Committees held during the year, are provided in the Corporate Governance
Report enclosed as "Annexure D" to this report.
The Policy on Related Party Transactions, Remuneration Policy, CSR Policy and Whistle
Blower Policy are available on the website of the Company. The Company has established a
vigil mechanism for Directors and employees to report their genuine concerns, details of
which have been given in the Corporate Governance Report annexed to this Report.
A separate report on Corporate Governance is provided together with a Certificate from
the Statutory Auditors of the Company regarding compliance of conditions of Corporate
Governance as stipulated under the Listing Regulations. A Certificate of the CEO and CFO
of the Company in terms of sub-Regulation 17(8) of the Listing Regulations, inter alia,
confirming the correctness of the financial statements and cash flow statements, adequacy
of the internal control measures and reporting of matters to the Audit Committee, is also
annexed.
MANAGEMENT DISCUSSION AND ANALYSIS
To avoid duplication between the Directors' Report and the Management Discussion and
Analysis, we present below a composite summary of performance and functions of the
Company.
OVERALL INDUSTRY
The Indian Textile Industry has been a key contributor to the country's economy in the
last three years, with 7% of the manufacturing production and 2.3% of the GDP attributed
to the sector. According to the Indian Brand Equity Foundation (IBEF), the Textile and
Apparel Industry accounts for 13% of the country's industrial production. It is the
second-largest source of employment after agriculture, providing jobs to approximately 45
million people. It is the only industry that has generated huge employment for both
skilled and unskilled labour.
India is well integrated in the value-chain of the Textile Industry from fibre to
fashion.
Cotton production in India is projected to reach 7.2 million tonnes (~43 million bales
of 170 kg each) by 2030, driven by increasing demand from consumers.
GOVERNMENT INITIATIVES
The Indian government has come up with a number of export promotion policies for the
textiles sector. It has also allowed
100 per cent FDI in the Indian textiles sector under the automatic route.
Initiatives taken by Government of India are:
In June 2022, Minister of Textiles, Commerce and Industry, Consumer Affairs
& Food and Public Distribution, Mr. Piyush Goyal, stated that the Indian government
wants to establish 75 textile hubs in the country.
As per the preliminary project report for the park, the State government of
Karnataka has earmarked 1,550 acres of land in Firozabad, Nadisinnur, and Kiranagi
villages in Kalaburagi district. The total cost of the infrastructure development of the
park was estimated to Rs.1,834 crore.
Scheme for Capacity Building in Textile Sector (SAMARTH)-To address the skilled
manpower requirement across textile sector, the scheme was formulated, under the broad
policy guidelines of "Skill India" initiative and in alignment with the
framework adopted for skilling programme by Ministry of Skill Development and
Entrepreneurship. The scheme is approved for implementation till March, 2024.
Amended Technology Up-gradation Fund Scheme (ATUFS): In order to promote ease of
doing business in the country to achieve the vision of generating employment and promoting
exports through "Make in India'' with "Zero effect and Zero defect" in
manufacturing, ATUFS was launched in January 2016 to provide credit linked Capital
Investment Subsidy (CIS) to units for purchase of benchmarked machinery in different
segment of Textile Sectors (excluding spinning). This scheme is effective up to March,
2022.
National Technical Textile Mission: Creation of National Technical Textiles
Mission for a period of 4 years (2020-21 to 2023-24) was approved with an outlay of '1480
crore for developing usage of technical textiles in various flagship missions, programmes
of the country including strategic sectors.
Production Linked Incentive (PLI) Scheme - The PLI Scheme for Textiles to
promote production of MMF apparel, MMF Fabrics and Products of Technical Textiles in the
country to create 60-70 global players, attract fresh investment of Rs.19,000 crore
approximately and generate almost 7.5 lakh new employment opportunities.
PM-MITRA: To attract investment for 'Make In India' initiative and to boost
employment generation through setting up of 7 (Seven) PM Mega Integrated Textile Region
and Apparel (PM MITRA) Parks in Greenfield/Brownfield sites with world class
infrastructure including plug and play facility with an outlay of Rs.4445 crore for a
period of seven years upto 202728.
Scheme for Integrated Textile Parks (SITP): The scheme provides support for
creation of world-class infrastructure facilities for setting up of textile units.
Integrated Processing Development Scheme (IPDS): In order to facilitate the
textile industry to meet the required environmental standards and to support new Common
Effluent Treatment Plants (CETP)/ upgradation of CEPTs in existing processing clusters as
well as new processing parks specially in the Coastal Zones.
OVERALL REVIEW
Indian Textile industry can be divided into several segments, some of which can be
listed as below:
- Cotton Textiles
- Silk Textiles
- Woolen Textiles
- Readymade Textiles
- Jute and Coir
STRENGTH
- India has rich resources of raw materials for the textile industry. It is one of the
largest producers of cotton in the world and also rich in resources of fibres like
polyester, silk, viscose etc.
- India is riched in highly trained manpower. The country has a huge advantage due to
lower labour rates. Because of low labour rates, the manufacturing cost in textile
manufacturing automatically comes down to very reasonable levels.
- India is highly competitive in spinning sector and has presence in almost all
processes of the value chain.
OPPORTUNITY
- Low per-capita domestic consumption of textile indicating significant potential
growth.
- The Domestic market is extremely sensitive to fashion fads and this has resulted in
the development of a responsive garment industry, catering to paying and aspirational
customers.
- According to the Confederation of Indian Industry (CII), the Indian textile industry
is expected to hit US$ 250 billion production by FY25, rising at 12% CAGR between
FY22-FY25. Exports are projected to reach US$ 185 billion by FY25, doubling India's share
of global textile trade to 10%.
- The industry growth will create jobs and generate value, attracting US$ 180 billion
in investments.
PERFORMANCE OF THE TEXTILE INDUSTRY
- India's textile and garment exports have been growing at a steady pace, making it one
of the leading textile exporters in the world. The industry exports a wide range of
products, including cotton textiles, yarn, fabrics, and readymade garments. The United
States, the United Arab Emirates, and the United Kingdom are the largest export
destinations for Indian textiles.
- The Indian government has taken several steps to support the textile industry's
growth and development. The government has implemented several schemes and initiatives,
such as the Technology Upgradation Fund Scheme (TUFS), which provides financial assistance
to textile units for the modernization and upgradation of technology. Additionally, the
government has introduced schemes to promote the use of natural fibers such as cotton,
silk, and wool, which has helped boost the demand for Indian textiles. The impact of the
global and domestic economic slowdown is directly affect the performance of the industry.
INITIATIVES
Capacity building:
In order to steer your company into an aggressive growth path, the Company is looking
into enter the mass segment, which had not been fully explored by the Company till date.
To meet the expected demand from the mass segment, the company is building new capacity at
our Erode Plant with an annual production capacity of 25 lakhs nos., which is 30% of the
Company's total capacity.
Upskilling of Employees:
Of all the factors of production, work force comes first. Upskilling and Reskilling the
the work force in tune with the latest technological developments, not only motivates the
employees but also increase the productivity and upgrades product standards. Your company,
assisted with the Government of India Initiative on Upskilling and Resiklling
"Samarth" schemes, set up and tied up with training centres to equip our work
force with modern techniques.
New Product Categories and Styles:
Your company has identified the twin routes of deeper & category-leading
brand-building & scale-up of production routes to high sales volumes & to be the
engines of growth.
Brand LOVABLE
> SECRECY L-1123 collection of Lovable comprised of Premium & Classic
products- Secrecy bra that provides optimized breathing facility Light padding for
augmenting shape and size Smart fabric designed with perm wedging technology, Specially
designed fabric that feels like a silk.
> LE-239 - Anesthetically designed lace enhance the style quotient, engineer
for a perfect shape, Full coverage padded bra, Superior soft cotton fabric that feels like
a second skin
Brand DAISY DEE
> YASHIKA (DD-47) Innovative cushion cups gives you soft pad effect. Full
coverage with no seams, no stitches & no Creases in the cups, Superior soft fabric
that feels like a second skin, Styled to give perfect fit and added comfort.
> SANA (DD-39) Hidden side shaper panels for firmness and uplifted look
Quick dry fabric for quick absorbent Breathable fabric with additional properties of
stretch and enhanced body cooling, Quick dry keeps you fresh throughout the day
> ZOYA (DD-11) Double layered seamless cups provide smooth finish to your
sensuous curves, Crafted from soft cotton fabric that allows the skin to breathe, Moulded
and full coverage cups, Styled to give perfect fit and added comfort.
> Claire - Comfortable for yoga, sports & everyday activities, Ultra
soft and Durable under band, Wire free for all day comfort, Unique dual tone sports bra to
give a perfect fit and added comfort
Please visit lovableindia.in for https://lovableindia.in/ for details about our
products.
ENVIROMENT, HEALTH AND SAFETY
Your Company places utmost importance on ensuring safety of its employees, visitors to
our premises and the communities we operate in.
Your Directors are committed to strict compliance of not just statutory requirements
but even more stern internal policies and best practices related to environment, health
and safety in all our units. In the year under review, your Company has further
strengthened its commitment to workplace compliance by increasing the strength of the
workplace Compliance Department to enhance monitoring and control in all these areas.
Environment: Your Company is an environment friendly organization as it is a
non-polluting and non-effluent generating manufacturing set-up.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS &
OUTGO
A. Conservation of Energy
Your Company has a vision of being a 'Zero Injury' organization. The Compass, your
Company's strategic framework, integrates Safety as a non-negotiable value. Information on
conservation of energy, technology absorption, foreign exchange earnings and outgo,
pursuant to Section 134(3)(m) of the Companies Act, 2013 read with the Companies
(Accounts) Rules, 2014, are furnished below:
a. Conservation of Energy:
The Company continually takes steps to absorb and adopt the latest technologies and
innovations in the Garment Industry. These initiatives should enable the facilities to
become more efficient and productive as the company expands, thus helping conserve energy.
All machinery and equipment are continuously serviced, updated and overhauled in order to
maintain them in good condition. This resulted in consumption of lesser energy
consumption.
Additional Investments and Proposals for Reduction of Consumption of Energy: Nil
Total Energy Consumption and Energy Consumption per Unit of Production (Form-A and Form
B Enclosed).
Conservation of Energy continues to receive increased emphasis at all the units of the
Company.
Form - A
Form for Disclosure of particulars with respect of conservation of energy Part A'
Particulars |
2022-23 |
2021-22 |
Power & Fuel Consumption |
|
|
1. Electricity |
|
|
a) Purchased Units (Lacs) |
2.97 |
4.09 |
Total Cost (Rs. In Lacs) |
39.79 |
43.86 |
Rate/Unit (Rs.) |
13.38 |
10.72 |
b) Own Generation |
|
|
1) Through Diesel Generator |
|
|
Units (Lacs) |
0.49 |
0.45 |
KWH per unit of fuel |
4.67 |
4.67 |
Fuel Cost/Unit (Rs.) |
16.61 |
18.46 |
b. Technology Absorption:
Absorbing technologies with state of art machineries like automated cutting machine,
automated fabric inspection machines, etc., the quality of the products and efficiency of
the systems have been substantially improved. By applying those technologies, the cost of
production was under control.
The products manufactured and sold by the Company are not power intensive; hence the
impact on overall cost is marginal. However, steps have been taken to ensure energy
conservation in the processing unit where an energy efficient boiler is installed and
condensate is being re-utilised.
Efforts made in Technology absorption as per Form B: Nil
B. Consumption per unit of Production
Product |
Electricity |
|
2022-23 |
2021-22 |
Consumption per Unit |
0.06 |
0.06 |
C. Foreign Exchange Earning and Outgoing
The Company had foreign exchange earnings from Exports during the year was NIL
(Previous year NIL).
The total amount of outgo on account of foreign exchange utilized by the Company
amounted to Rs.7.05 lakhs (Previous year Rs.11.64 lakhs) mainly on account of import of
raw materials, finished goods, Capital Goods, foreign travel.
Foreign exchange earned and outgo during the year ended March 31,2023:
|
|
Rs. in lakhs |
Particulars |
2022-23 |
2021-22 |
Foreign Exchange Earned |
- |
- |
Exports (FOB) |
- |
- |
Technical Assistance |
- |
- |
Total |
- |
- |
Foreign Exchange Outgo |
- |
- |
CIF Value of Imports |
7.05 |
11.64 |
Travelling Expenses |
- |
- |
Others |
- |
- |
Total |
7.05 |
11.64 |
INTERNAL CONTROL SYSTEMS AND ADEQUACY
The Company's internal control systems are commensurate with the nature of its business
and the size and complexity of operations. These systems are routinely tested and
certified by Statutory as well as Internal Auditor and cover all offices, factories and
key business areas. Periodical reports and significant audit observations and follow up
actions thereon are reported to the Audit Committee.
The Audit Committee is headed by an Independent Director and this ensures independence
of function and transparency of the process of supervision and oversight. The Audit
Committee reviews adequacy and effectiveness of the Company's internal control environment
and monitors the implementation of audit recommendations, including those relating to
strengthening of the Company's risk management policies and systems.
The Company conducts its business with integrity and high standard of ethical behaviour
and in compliance with the laws and regulations that govern its business.
SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS COMPARED TO PREVIOUS YEAR
Sr No. |
Particulars |
Year 2022-23 |
Year 2021-22 |
Explanation for change |
1 |
Debtors Turnover |
4.61 |
4.24 |
Lower sales and increase in sales realization period |
2 |
Inventory Turnover |
1.79 |
2.34 |
Lower sales |
3 |
Interest Coverage Ratio |
0.93 |
22.25 |
Lower Earnings |
4 |
Current Ratio |
3.61 |
4.34 |
Better credits terms from suppliers |
5 |
Debt Equity Ratio |
0.02 |
0.01 |
Marginal change |
6 |
Operating Profit Margin (%) |
0.49% |
7.31% |
Lower margin |
7 |
Net Profit Margin (%) |
-0.08% |
5.88% |
Loss incurred in the current year |
8 |
Return on Net worth |
-0.04% |
3.36% |
Loss incurred in the current year |
OPPORTUNITIES AND THREATS Opportunities:
For the apparel industry in general and our market in particular:
Textile industry to reach $250 billion business size by 2025
The domestic apparel & textile industry in India contributed to 2.3% to the
country's GDP, 7% of industry output in value terms
India has a share of 5% of the global trade in textiles and apparel.
The export of cotton Textiles was $ 17.2 Bn with 39% share registering a growth
of 54% and 67% during 2021-22 over FY 2020-21 and FY 2019-20, respectively.
Increasing urban women population and women corporate workforce
Increasing brand consciousness and spending on kids
Higher disposable income
Increasing online retail.
Company need to concentrate on new global product.
Low per-capita domestic consumption of textile indicating significant potential
growth.
Threats:
Many major international apparel brands have commenced operations in India realizing
that Indian markets are likely to emerge as one of the largest market in the world in the
next few decades. Competitive intensity is expected to sustain high.
The domestic apparel & textile industry in India contributes approx. 2% to the
country's GDP, 7% of industry output in value terms. The share of textile, apparel and
handicrafts in India's total exports was 11.4% in 2020-21. India stands as the 3rd largest
exporter of Textiles & Apparel in the world.
RISKS AND CONCERNS
The Company has robust risk management procedures to identify and evaluate risks on an
ongoing basis. The identified risks are integrated into the business plan and a detailed
action plan to mitigate the identified business risk and concerns is put in place.
The key risks and concern identified by the company and its mitigation plans are:
Availability and Rising Cost of Labour:
The industry is growing at a fast pace, in a highly labour intensive sector and demand
for experienced and trained manpower is outstripping supply. The ability to retain
existing talent and attract new talent assumes crucial importance. The Company has created
long term plans with the objective of motivating employees to create a sense of
"belonging" and a 'feel good' environment. The Company has set up robust
training centers at various units where newcomers to the labour force receive structured
training.
Increase in input and brand-building costs:
The availability of raw materials at reasonable rates is one of the main concerns of
the company. However the company is confident that increases in raw material cost, if and
when they occur, can be passed on to consumers because of the strong pricing power of its
brands. The company is also aggressively taking steps to monitor and improve productivity,
which will mitigate the impact of material cost increases to some extent. The Company is
also conscious that in the Media environment of exploding media vehicles and fragmented
audiences, the challenges for achieving Brand Reach and delivering effective communication
are rising disproportionately. The Company is taking steps to plan and execute media
campaigns with higher efficiency and continue to achieve brand salience.
HUMAN RESOURCES
Your Company fully values the Human capital; it deploys and credits its success to
them. It has been the consistent endeavor of the Company to create a congenial and
challenging working atmosphere wherein every employee can develop his own strength and
deliver to his full potential.
During the year under review, industrial relations in the factory were cordial and
pro-active and all employees and the Union supported productivity and process improvement
measures undertaken at all the functions of the Company. Their unstinted co-operation has
enabled the unit to achieve continuous growth, both quantitatively and qualitatively. Your
Company continued to maintain excellent industrial relations with all its employees and
independent job work firms. Adequate safety and welfare measures are in place and your
Company will continue to improve the same on ongoing basis.
As of 31st March, 2023, the Company had 1272 employees on its roll.
FUTURE OUTLOOK
The future for the Indian textile industry looks promising, buoyed by both strong
domestic consumption as well as export demand. With consumerism and disposable income on
the rise, the retail sector has experienced a rapid growth in the past decade with the
entry of several international players like Marks & Spencer, Guess and Next into the
Indian market.
High economic growth has resulted in higher disposable income. This has led to rise in
demand for products creating a huge domestic market.
The global economic climate continues to be volatile, uncertainand prone to
geo-political risks. Weak consumer sentiment and low commodity prices are expected to
affect global growth adversely.
Your Company has achieved a significant growth and has been constantly following
emerging market trends and has accordingly from time to time revamped its marketing
strategies and product portfolios. The Company is trying to come up with some new products
and ranges of inner wears according to changing consumer needs and demand.
Your Company has taken a step to evolve in the super-premium segment of innerwear.
CAUTIONARY STATEMENT
Statements in the management discussion and analysis describing the Company's
objectives, projections, estimates and expectations may be considered as "forward
looking statements" within the meaning of applicable securities laws and regulations.
Actual results could differ materially from those expressed or implied. The factors that
might influence the operations of the Company are economic conditions, government
regulations and natural calamities over which the Company has no control.
The Company assumes no responsibility in respect of the forward-looking statements
herein which may undergo changes in future on the basis of subsequent developments,
information or events.
APPRECIATIONS AND ACKNOWLEDGEMENTS
Your Directors place on record their sincere appreciation for the significant
contribution made by our employees through their dedication, hard work and commitment.
The Board places on record its appreciation for the support and co-operation your
Company has been receiving from its customers, suppliers, distributors stockists,
retailers, business partners and others associated with the Company as its trading
partners. Your Company looks upon them as partners in its progress. It will be the
Company's endeavour to build and nurture strong links with the trade based on mutuality of
benefits, respect for and co-operation with each other, consistent with consumer
interests.
The Directors also take this opportunity to thank all Shareholders, Investors, Clients,
Vendors, Bankers, Government and Regulatory Authorities and Stock Exchanges, for their
continued support.
|
On behalf of the Board of Directors |
|
Lovable Lingerie Limited |
Place: Mumbai |
L Vinay Reddy |
Date: August 30, 2023 |
Chairman & Managing Director |
|
(DIN:00202619) |
|