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Lovable Lingerie Ltd.

BSE: 533343 Sector: Industrials
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OPEN 225.00
52-Week high 306.65
52-Week low 215.70
P/E 35.04
Mkt Cap.(Rs cr) 376
Buy Price 0.00
Buy Qty 0.00
Sell Price 223.50
Sell Qty 2.00
OPEN 225.00
CLOSE 223.55
52-Week high 306.65
52-Week low 215.70
P/E 35.04
Mkt Cap.(Rs cr) 376
Buy Price 0.00
Buy Qty 0.00
Sell Price 223.50
Sell Qty 2.00

Lovable Lingerie Ltd. (LOVABLE) - Director Report

Company director report



The Members of Lovable Lingerie Limited.

Your Company's Directors are pleased to present the 29th Annual Report ofthe Company along with the audited financial statements forthe Financial Year ended on31st March 2016.


Particulars 2015-16 2014-15
Revenue from operations 19676.84 17249.39
Operating Expenditure 16613.90 14828.06
Profit Before Interest Tax & Depreciation 3062.94 2421.33
Other Income (net) 593.16 633.24
Finance Costs 138.77 111.40
Profit before Tax and Depreciation 3517.33 2943.17
Depreciation and amortization expense 280.09 249.09
Profit before Tax (PBT) 3237.24 2694.08
Provision for Taxation 919.70 722.49
Profit for the year (PAT) 2317.54 1971.59
Surplus brought forward from previous year 6078.16 6784.80
Amount available for appropriation 8395.71 8756.40
Transferred to General Reserve 115.90 196.50
Interim Dividend (excluding tax) 252.00 2100.02
Taxon Interim Dividend 51.30 356.90
Proposed Dividend on Equity Share Capital - -
Corporate Dividend Tax on Proposed Dividend - -
Adj for Depreciation of prior years pursuant to change in useful life - 24.11
Balance Carried to Balance Sheet 7976.51 6078.87
EPS Basic & Diluted- Before Extraordinary Items (in ?) 13.79 11.74
EPS Basic & Diluted- After Extraordinary Items (in ?) 13.79 11.74


For the financial year 2015-16 the Company recorded a net turnover of ?19676.83 lakhsas against? 17249.38 lakhs for the financial year 2014-15 registering an increase of14.07%. The Net Profit Before Tax stood at ? 3237.24 lakhs as against ? 2694.08 lakhsover last year and Profit After Tax stood at ? 2317.54 lakhs for the year as against ?1971.59 lakhs in the last year.


The Company is engaged in the business of manufacturing garments. Therefore there isno separate reportable segment.


On March 102016 the Board of Directors announced an Interim dividend of? 1.50/- (15%)per equity share for FY 2015-16 which involved a cash outflow of? 303.30 lakhs includingDividend Distribution Tax (DDT). The Interim dividend has been subsequently paid to alleligible shareholders and no further dividends are proposed/ recommended by the Board.


The Company proposes to transfer? 115.90 lakhs to the general reserve out of the amountavailable for appropriation and an amount of ? 7976.50 lakhs is proposed to be retained inthe profit and loss account.


Your Company does not have any subsidiary joint venture or associate Company.


No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statements relateand the date of this report.


The extract of Annual Return as provided under sub-section (3) of section 92 of theCompanies Act 2013 ('the Act1) in prescribed form MGT-9 is enclosed as"Annexure A" to this report.


Ms. Taruna V. Reddy (DIN: 02787135) retires by rotation at the ensuing Annual GeneralMeeting and being eligible has offered herself for re-appointment.

Pursuant to the resolution passed by the members in their 28th Annual General Meetingheld on 26th September 2015 Mr. L Vinay Reddy (DIN: 00202619) holds office as ManagingDirector of the Company upto January 31 2017. The Board of Directors at its Meeting heldon May 30 2016 approved the proposal for re-appointment of Mr. L Vinay Reddy as theManaging Director of the Company for a further period of two years from February 12017 subject to the approval of the members by passing an ordinary resolution at theensuing AGM. Terms and conditions for his re-appointment are contained in the ExplanatoryStatement forming part of the notice ofthe ensuing Annual General Meeting.

Pursuant to the special resolution passed by the members in their 28th Annual GeneralMeeting held on 26th September 2015 Mr. L. Jaipal Reddy (DIN: 01539678) holds office asWhole-time Director ofthe Company upto January 31 2017. The Board ofthe Directors at itsmeeting held on May 302016 approved the proposal for re-appointment of Mr. L. JaipalReddy as the Whole-time Director of the Company for a further period of two years fromFebruary 1 2017 subject to approval ofthe members by passing Special resolutionat the AGM. Terms and conditions for his appointment are contained in the ExplanatoryStatement forming part of the notice ofthe ensuing Annual General Meeting.

The resolutions seeking approval ofthe Members for the appointment/re-appointment ofMr. L Jaipal Reddy Mr. L Vinay Reddy and Ms. Taruna Reddy have been incorporated in thenotice of the forthcoming annual general meeting of the Company along with brief detailsabout them as required pursuant to Regulation 36(3) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and Secretarial Standards - 2 on GeneralMeetings issued by Institute of Company Secretaries of India. The Company has received anotice under Section 160 of the Act along with the requisite deposit proposing theappointment of Mr. L Vinay Reddy and Mr. L Jaipal Reddy.

During the year the non-executive directors ofthe Company had no pecuniaryrelationship or transactions with the Company.


For the purpose of selection of any Director the Nomination and Remuneration Committeeidentifies the person of integrity who possess relevant expertise experience andleadership qualities required for the position and also takes into considerationrecommendation if any receives from any members of the Board. The Committee also ensuresthat the incumbent fulfills such other criteria with regard to age and otherqualifications as laid down under the Companies Act 2013 orotherapplicable laws.

The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration.

The Company's policy on directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Act has been disclosed in the corporate governancereport which forms part of the directors' report.


The Company has received declaration from all the Independent Directors of the Companyconfirming that they meet with the criteria of independence as prescribed undersub-section (6) of Section 149 of the Companies Act 2013.


The Company has constituted the following committees in compliance with the CompaniesAct 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 ResponsibilityCommittee.

The Board has accepted all the recommendations of the above committee. The briefdescription composition and other required details of the above committees are providedin Corporate Governance Section to this Annual Report.


In compliance with the requirements of erstwhile Listing Agreement with the stockexchanges ("Listing Agreement") and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (SEBI (LODR) Regulations") the Company has put inplace a Familiarisation Programme for the Independent & Non-Executive Directors tofamiliarize them with the Company their roles rights responsibilities in the Companynature of the industry in which the Company operates business model etc. The details ofsuch programme is available on the website of the company and maybeaccessed through the weblink id=69.


Five meetings of the board were held during the year on 29th May 2015; 12th August2015; 7th November 2015; 10th February 2016 and 10th March 2016. For details of themeetings of the board please refer to the corporate governance report which forms partof this report. The intervening gap between the Meetings were within the period prescribedunder the Companies Act 2013 erstwhile Listing agreement and SEBI (LODR) Regulations.


The Board of Directors have carried out an annual evaluation of its own performanceits various committees and individual directors pursuant to the provisions of the Act andthe Corporate Governance requirements as prescribed under regulation 17(10) 25(4) andother applicable provisions of the SEBI (LODR) Regulations.

The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of various criteria such as Board Composition processdynamics quality of deliberations strategic discussions effective reviews committeeparticipation governance reviews etc.

The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of criteria such as Committee composition processdynamics deliberation strategic discussions effective reviews etc.

The Board and the Nomination and Remuneration Committee reviewed the performance of theindividual directors on the basis of the criteria such as Transparency AnalyticalCapabilities Performance Leadership Ethics and ability to take balanced decisionsregarding stakeholders.

In a separate meeting of independent directors performance of non-independentdirectors performance of the board as a whole and performance of the Chairman wasevaluated taking into account the views of the executive directors and nonexecutivedirectors. The same was discussed in the board meeting that followed the meeting ofindependent directors at which the performance of the Board its committeeand individualDirectors was also discussed.


The particulars of loans guarantees and investments have been disclosed in thefinancial statements.


Your Company has an elaborate Risk Management procedure. Major risks identified by thebusinesses and functions are systematically addressed through mitigating actions on acontinuing basis. The Audit Committee reviews the status of key risks and steps taken bythe Company to mitigate such risks at regular intervals.


In line with the requirements of the Companies Act 2013 and SEBI (LODR) Regulationsyour Company has formulated a Policy on Related Party Transactions which is also availableon Company's website; web link at id=69.The Policy intends to ensurethat proper reporting approval and disclosure processes are in place for all transactionsbetween the Company and Related Parties.

All Related Party Transactions are placed before the Audit Committee for review andapproval. Prior omnibus approval is obtained for Related Party Transactions on a yearlybasis for transactions which are of repetitive nature and /or entered in the OrdinaryCourse of Business and are at Arm's Length.

All Related Party Transactions entered during the year were in Ordinary Course of theBusiness and on Arm's Length basis. No Material Related Party Transactions were enteredduring the year by the Company. Accordingly the disclosure of Related Party Transactionsas required under Section 134(3) (h) of the Companies Act 2013 in Form AOC 2 is notapplicable.


To create enduring value for all stakeholders and ensure the highest level of honestyintegrity and ethical behaviour in all its operations the company has formulated a VigilMechanism in addition to the existing code of conduct that governs the actions of itsemployees. This Whistleblower Policy aspires to encourage all employees to reportsuspected or actual occurrence(s) of illegal unethical or inappropriate events (behaviorsor practices) that affect Company's interest /image.

A copy of the Policy is available on the website of the Company and may be accessedthrough the web link id=69.


In order to prevent sexual harassment of women at work place a new act The SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 hasbeen notified on 9th December 2013.

The Company has adopted a Policy on Prevention Prohibition and Redressal of SexualHarassment at the Workplace to provide protection to women (including outsiders) at theworkplace and for prevention and redressal of complaints of sexual harassment and formatters connected or incidental thereto with the objective of providing a safe workingenvironment where employees feel secure. The Company has also constituted an InternalComplaints Committee to consider and to redress complaints of sexual harassment. TheCommittee has not received any complaint of sexual harassment during the year underreview.


In accordance with the requirements of Section 135 of Companies Act 2013 your Companyhas constituted a Corporate

Social Responsibility Committee. The composition and terms of reference of theCorporate Social Responsibility Committee is provided in the Corporate Governance Report.

The brief outline of the Corporate Social Responsibility (CSR) Policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year are setout in "Annexure B" of this report in the format prescribed in the Companies(Corporate Social Responsibility Policy) Rules 2014. The policy is available on thewebsite of the Company; weblink id=69.


The information required under Section 197 of the Companies Act 2013 read with rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014has been appended as "Annexure C" to this Report.

The information required under Section 197 ofthe Companies Act 2013 read with Rule5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is not applicable since during the year under review none of the employees ofthe Companywas in receipt of remuneration in excess ofthe limits specified whether employed for thewhole yearorpartthereof.


The Board of Directors of the Company confirms that:

• in the preparation ofthe annual accounts the applicable accounting standardshave been followed and that no material departures have been made from the same;

• they have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs ofthe Company at the end ofthe financial year and of theprofit of the Company for that period;

• they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

• they have prepared the annual accounts on a going concern basis;

• they have laid down internal financial controls for the Company and suchinternal financial controls are adequate and operating effectively; and

• they have devised proper systems to ensure compliance with the provisions of allapplicable laws and such systems are adequate and operating effectively.


The Company has not accepted any deposits covered under Chapter V of the Companies Act2013. Accordingly no disclosure or reporting is required in respect of details relatingto deposits covered under this Chapter.


Your Company's shares are listed in the BSE Limited Mumbai (BSE) and National StockExchange of India Limited Mumbai (NSE) and the annual listing fees have been duly paid.


In conformity with the provisions of Regulation 34(2) of SEBI (LODR) Regulations theCash Flow Statement for the year ended 31.03.2016isenclosedasa partofthisAnnual Report.


The details pertaining to composition of audit committee are included in the CorporateGovernance Report which forms part of this report.


Statutory Auditors

M/s Vinod Kumar Jain & Co. Chartered Accountants (FRN: 111513W) were appointed asStatutory Auditors of your Company at the Annual General Meeting held on 25th September2014 for a period of three consecutive years up to the conclusion of 30th Annual Generalmeeting of the Company subject to ratification by members at every Annual General Meetingof the Company. They have confirmed their eligibility under Section 141 of the CompaniesAct 2013 and the Rules framed thereunder for reappointment as Auditors of the Company. Asrequired under regulation 33(l)(d) of SEBI (LODR) Regulations the auditors have alsoconfirmed that they hold a valid certificate issued by the Peer Review Board of theInstitute of Chartered Accountants of India.

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 hadappointed M/s.D. M. Zaveri & Co. Practicing Company Secretaries Mumbai to undertakethe Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as"Annexure D".

The auditors' report and secretarial auditors' report does not contain anyqualifications reservations or adverse remarks. Report of the secretarial auditor isgiven as an annexure which forms part of this report. The Report given by the Auditors onthe financial statements of the Company is part of the Annual Report.


No significant or material Orders were passed by the Regulators or Courts or Tribunalsduring the previous year which may impact the Going Concern Status of the Company'sOperation in the future.


Your Company did not have any funds lying unpaid or unclaimed for a period of sevenyears. Therefore there were no funds which were required to be transferred to InvestorEducation and Protection Fund (IEPF).

Pursuant to the provisions of the Investor Education Protection Fund (Uploading ofinformation regarding unpaid and unclaimed amounts lying with companies) Rules 2012 theCompany has already filed the necessary form and uploaded the details of unpaid andunclaimed amounts lying with the Company as on the date of last Annual General Meeting(i.e. September 262015) with the Ministry of Corporate Affairs.


Your Company continues to lay a strong emphasis on transparency accountability andintegrity.

The Companies Act 2013 and the Listing Regulations have strengthened the governanceregime in the country. Your Company is in compliance with the governance requirementsprovided underthe new law.

Your Company has in place all the statutory Committees required underthe law. Detailsof Board Committees along with their terms of reference composition and meetings of theBoard and Board Committees held during the year are provided in the Corporate GovernanceReport enclosed as "Annexure E" to this report.

The Policy on Related Party Transactions Remuneration Policy CSR Policy and WhistleBlower Policy are available on the website of the Company. The Company has established avigil mechanism for Directors and employees to report their genuine concerns details ofwhich have been given in the Corporate Governance Report annexed to this Report.

A separate report on Corporate Governance is provided together with a Certificate fromthe Statutory Auditors of the Company regarding compliance of conditions of CorporateGovernance as stipulated under the Listing Regulations. A Certificate of the CEO and CFOof the Company in terms of sub-Regulation 17(8) of the Listing Regulations inter aliaconfirming the correctness of the financial statements and cash flow statements adequacyof the internal control measures and reporting of matters to the Audit Committee is alsoannexed.


To avoid duplication between the Directors' Report and the Management Discussion andAnalysis we present below a composite summary of performance and functions of theCompany.


The trend of slowdown in global growth continued during the year. Against this globalbackdrop the growth in India stayed fairly resilient. India was the fastest growing largeeconomy with a stable currency that performed better than most other emerging marketcurrencies. The domestic macro-economic conditions also remained stable.

Growth in agriculture has slackened due to two successive years of less than-normalmonsoon rains. Saving and investment rates are showing hardly any signs of revival. Therupee has depreciated vis-a-vis the US dollar like most other currencies in the world.

Despite global headwinds and a truant monsoon India registered robust growth of 7.2percent in 2014-15 and 7.6 percent in 2015-16 thus becoming the fastest growing majoreconomy in the world.

Source: Ministry of Finance

Consumer spending remained muted and this was reflected in a moderate growth acrossFMCG categories in the context of tight monetary policy followed by the Reserve Bank ofIndia through most of the financial year political & policy stability relatedconcerns. Given the backdrop of a market slowdown coupled with a volatile input costenvironment and heightened competitive intensity the operating environment for the yearcontinued to be challenging.

Your Company's performance for the year 2015-16 has to be viewed in the context ofaforesaid economic and market environment.

Among the core apparel categories innerwear appears to be a potential growth categoryacross all segments. Currently the Indian innerwear market is worth Rs. 19960 crore(2014) and is estimated to grow at 13 percent to reach Rs. 68270 crore by 2024.

The innerwear industry in India holds immense growth potential and it is evident fromthe entry of large international brands in the Indian market in the last few years. TheIndian innerwear market continues to be underpenetrated and thereby holds immense businessopportunities. Provided the positive macro and demographic fundamentals the innerwearmarket has a favorable demand growth outlook over the medium-to-long term. The Indianinnerwear market is expected to witness expansion in the near future. However lesserproduct portfolio and high costs of brand building are expected to be the challenges forthis sector. Brand sensitivity is the major trend in the Indian innerwear industry.

The textiles industry has made a major contribution to the national economy in terms ofemployment generation and foreign exchange earnings. The sector contributes about 14 percent to industrial production.

Looking ahead we expect growth in the innerwear market to be driven by broad basedconsumer trends in the form of rising discretionary spend growing number of mid-highincome house hold and rising urbanization.

Since the last few years Indian brands showcased new designs and styles to woo the newage Indian women. The focus was mainly on the width of the product range. Men's andwomen's innerwear began to be sold through a variety of retail formats such as ExclusiveBrand Outlets (EBO) Large Format Stores (LFS) and departmental stores. LFS withshop-in-shop concept have carved a niche by showcasing the entire product range.

Innerwear has graduated from being just a functional category to a category that offersadditional fashion quotient. It is shifting from a price sensitive category to a brandsensitive category. The women's innerwear market which is driven by value added innerwearproducts contributes around 60 percent to the total innerwear market. This market isworth INR 12510 crore and is growing at a promising CAGR of 15 percent. The growingnumber of working women and the increased share of western wear in their wardrobe havepropelled this growth. Western wear usually encompasses specialized innerwear which thebranded players can provide for the most part. Brand consciousnes is no more restrictedto external apparel. Among women's innerwear brands strong single brands emerge forbottoms and heritage innerwear brands are preferred for bras. Women are increasinglyconscious about even the brands and styles for their intimate wear. In fact this changingpreference is no longer restricted to just the metros but has CAGR 9% spread to minimetros tier-1 -II and-lll cities. This openness to indulge in branded lingerie has ledto a growth in the number of international and domestic innerwear brands present in India.

In women's innerwear the mid-premium segment makes up 52 percent of the market and isexpected to grow the fastest at a CAGR of 22 percent over the next 5 years.

Exclusive brand stores are explored when looking for depth in styles and variety incolors.

On the basis of product pricing the innerwear market is further divided intosuper-premium premium medium and economy segments. Due to increased awareness theincrease in number of brands and rising discretionary spending all segments haveregistered growth. Foreign brands have brought in variety through international styles andfabrics. Indian women are also willing to spend higher-than-before amounts on innerwear.This has provided an exponential boost to premium and super-premium innerwear brands.

Source: Images Business of Fashion

In this direction your Company too entered into a Distributorship Agreement with HanesItaly S.r.L (an Overseas Company of Hanes Brands group) & acquired non-exclusivethird-party right to import distribute promote and sell certain of its products underthe "Lovable" trademark within the territory of India for a period of 3 years.These products belong to the superpremium segment of innerwear.

Your Company delivered yet another year of consistent competitive and profitablegrowth aided by strong marketing and trade investments and stepped up market development.The investment in non-television and digital media was significantly steppedupduringtheyear.

E-commerce is an emerging and fast growing channel in the country and your Company iswell placed to lead category growth in this channel. As per Global retail developmentIndex 2014 with the rapid growth in smart phones E-commerce has uplifted India's placeamong top 20 developing countries in the global forum. Consumer behavior has changedswiftly with the shifting trends projected towards buying online from offline shopping.Your Company has developed a comprehensive e- commerce strategy and execution roadmap andhas a team in place to drive disproportionate growth in this channel in the coming years.It has further tied up with various leading online retailers to increase the reach of theproduct to entire country.


Your Company places utmost importance on ensuring safety of its employees visitors toour premises and the communities we operate in.

Your Directors are committed to strict compliance of notjust statutory requirements buteven more stern internal policies and best practices related to environment health andsafety in all our units. In the year under review your Company has further strengthenedits commitment to workplace compliance by increasing the strength of the workplaceCompliance Department to enhance monitoring and control in all these areas.

Environment: Your Company is an environment friendly organization as it is anon-polluting and non-effluent generating manufacturing set-up.


A. Conservation of Energy

Your Company has a vision of being a 'Zero Injury' organisation. The Compass yourCompany's strategic framework integrates Safety as a non-negotiable value. Information onconservation of energy technology absorption foreign exchange earnings and outgopursuant 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 andinnovations in the Garment Industry. These initiatives should enable the facilities tobecome more efficient and productive as the company expands thus helping conserve energy.All machinery and equipment are continuously serviced updated and overhauled in order tomaintain them in good condition. This resulted in consumption of lesser energyconsumption.

Additional Investments and Proposals for Reduction of Consumption of Energy: Nil TotalEnergy Consumption and Energy Consumption per Unit of Production (Form-A Enclosed).

Conservation of Energy continues to receive increased emphasis at all the units of theCompany.


Form for Disclosure of particulars with respect of conservation of energy

Particulars 2015-16 2014-15
Power & Fuel Consumption
1. Electricity
a) Purchased Units (Lacs) 6.98 6.55
Total Cost (Rs. In Lacs) 52.61 52.60
Rate/Unit (Rs.) 7.53 8.03
b) Own Generation
l)Through Diesel Generator
Units (Lacs) 0.49 0.41
KWH per unit offuel 4.67 4.67
Fuel Cost/Unit (Rs.) 12.48 12.62

b. Technology Absorption:

Absorbing technologies with state of art machineries like automated cutting machineautomated fabric inspection machines etc. the quality of the products and efficiency ofthe systems have been substantially improved. By applying those technologies the cost ofproduction was under control.

The products manufactured and sold by the Company are not power intensive; hence theimpact on overall cost is marginal. However steps have been taken to ensure energyconservation in the processing unit where an energy efficient boiler is installed andcondensate is being re-utilised.

Efforts made inTechnology absorption as per Form B: Nil

B. Consumption per unit of Production



2015-16 2014-15
Consumption per Unit 0.06 0.06

C. Foreign Exchange Earningand Outgoing

The Company had foreign exchange earnings from Exports during the year amounting to ?1.49 lakhs (Previous year ?23.69 lakhs). The total amount of outgo on account of foreignexchange utilized by the Company amounted to ? 122.84 lakhs (Previous year?156.78 lakhs)mainly on account of import of raw materials finished goods Capital Goods foreigntravel.

Foreign exchange earned and outgo during the year ended March 312016:

Particulars 2015-2016 2014-2015
Foreign Exchange Earned
Exports (FOB) 1.49 23.69
Technical Assistance - -
Total 1.49 23.69
Foreign Exchange Outgo
CIFValue of Imports 115.77 132.09
Travelling Expenses 0.82 0.30
Others 6.24 24.39
Total 122.84 156.78


The Company's internal control systems are commensurate with the nature of its businessand the size and complexity of operations. These systems are routinely tested andcertified by Statutory as well as Internal Auditor and cover all offices factories andkey business areas. Significant audit observations and follow up actions thereon arereported to the Audit Committee. The Audit Committee is headed by an Independent Directorand this ensures independence of function and transparency of the process of supervisionand oversight. The Audit Committee reviews adequacy and effectiveness of the Company'sinternal control environment and monitors the implementation of audit recommendationsincluding those relating to strengthening of the Company's risk management policies andsystems. The Company conducts its business with integrity and high standard of ethicalbehaviour and in compliance with the laws and regulations that govern its business.



Forthe apparel industry in general and our market in particular:

• Moreorganized retail. Better consumer retail experience

• Increasing fashion consciousness and consumers becoming more aspirationaldiscerning and brand savvy

• The factors that determine consumption education occupation urbanizationrise in nuclear families moving in a positive direction

• Increasing urban women population and women corporate workforce

• Increasing brand consciousness and spending on kids

• Higherdisposable income

• Increasingonlineretail


Many major international apparel brands have commenced operations in India realizingthat Indian markets are likely to emerge as one of the largest market in the world in thenext few decades. Competitive intensity is expected to sustain high.


The Company has robust risk management procedures to identify and evaluate risks on anongoing basis. The identified risks are integrated into the business plan and a detailedaction 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 demandfor experienced and trained manpower is outstripping supply. The ability to retainexisting talent and attract new talent assumes crucial importance. The Company has createdlong term plans with the objective of motivating employees to create a sense of"belonging" and a 'feel good' environment. The Company has set up robusttraining centers at various units where newcomers to the labour force receive structuredtraining.

Increase in input and brand - building costs:

The availability of raw materials at reasonable rates is one of the main concerns ofthe company. However the company is confident that increases in raw material cost if andwhen they occur can be passed on to consumers because of the strong pricing power of itsbrands. The company is also aggressively taking steps to monitor and improve productivitywhich will mitigate the impact of material cost increases to some extent.

The Company is also conscious that in the media environment of exploding Media vehiclesand fragmented audiences the challenges for achieving Brand Reach and deliveringeffective communication are rising disproportionately. The Company is taking steps to planand execute media campaigns with higher efficiency and continue to achieve brand salience


Your Company fully values the Human capital; it deploys and credits its success tothem. It has been the consistent endeavor of the Company to create a congenial andchallenging working atmosphere wherein every employee can develop his own strength anddeliverto his full potential.

The relations with Company's workforce continue to be very cordial and their unstintedco-operation has enabled the unit to achieve continuous growth both quantitatively andqualitatively. Your Company continued to maintain excellent industrial relations with allits employees and independent job work firms. Adequate safety and welfare measures are inplace and your Company will continue to improve thesameon ongoing basis.

As of 31st March 2016 the Company had l401employees on its roll.


The global economic climate continues to be volatile uncertain and prone togeo-political risks. Weak consumer sentiment and low commodity prices are expected toaffect global growth adversely.

Your Company has achieved a significant growth and has been constantly followingemerging market trends and has accordingly from time to time revamped its marketingstrategies and product portfolios. The Company is trying to come up with some new productsand 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.India is expected to perform better aided by improving macroeconomic fundamentals. Whilecurrently inflation is benign upside pressures on inflation from the vagaries of monsoonor sudden changes in the rupee could have a significant bearing on inflation.

FMCG markets are expected to grow. While consumer confidence has increased this hasnot yet translated into significant improvement in FMCG market conditions. There are a fewgreen shoots in market growths; however uncertain global economic environment inflationand competitive intensity continue to pose challenges. Your Company with its brandstalent and investment incapabilities is well placed to benefit disproportionately fromthis opportunity.


Statements in the management discussion and analysis describing the Company'sobjectives projections estimates and expectations may be considered as "forwardlooking statements" within the meaning of applicable securities laws and regulations.Actual results could differ materially from those expressed or implied. The factors thatmight influence the operations of the Company are economic conditions governmentregulations and natural calamities over which the Company has no control.

The Company assumes no responsibility in respect of the forward looking statementsherein which may undergo changes in future on the basis of subsequent developmentsinformation or events.


Your Directors place on record their sincere appreciation for the significantcontribution made by our employees through their dedication hard work and commitment.

The Board places on record its appreciation for the support and co-operation yourCompany has been receiving from its customers suppliers distributors stockistsretailers business partners and others associated with the Company as its tradingpartners. Your Company looks upon them as partners in its progress. It will be theCompany's endeavour to build and nurture strong links with the trade based on mutuality ofbenefits respect for and co-operation with each other consistent with consumerinterests.

The Directors also take this opportunity to thank all Shareholders Investors ClientsVendors Bankers Government and Regulatory Authorities and Stock Exchanges for theircontinued support.

On behalfofthe Board of Directors
Lovable Lingerie Limited
LVinay Reddy
Place: Mumbai Chairman & Managing Director
Date: August 12 2016 (DIN: 00202619)