Your Company's Directors are pleased to present the 31st Annual Report of the Companyalong with the Audited Financial Statements for the financial year ended 31st March 2018.
|FINANCIAL SUMMARY || || |
| || ||(Rs. in Lakhs) |
|Particulars ||2017-18 ||2016-17 |
|Revenue from operations ||17590.69 ||19740.61 |
|Operating Expenditure ||16675.53 ||17820.14 |
|Profit Before Interest Tax & Depreciation ||915.15 ||1920.47 |
|Other Income (net) ||433.83 ||691.09 |
|Finance Costs ||100.23 ||92.20 |
|Profit before Tax and Depreciation ||1248.75 ||2519.36 |
|Depreciation and amortization expense ||342.51 ||339.56 |
|Profit before Extra-Ordinary Item ||906.24 ||2179.80 |
|Extra-Ordinary Item ||1402.59 ||398.30 |
|Profit before Tax (PBT) ||(496.35) ||1781.50 |
|Provision for Taxation ||(258.30) ||496.48 |
|Profit for the year (PAT) ||(238.05) ||1285.02 |
|Surplus brought forward from previous year ||9671.69 ||7976.51 |
|Amount available for appropriation ||9029.44 ||9873.89 |
|Appropriations: || || |
|Transferred to General Reserve ||- ||- |
|Interim Dividend (excluding tax) ||- ||- |
|Tax on Interim Dividend ||- ||- |
|Proposed Dividend on Equity Share Capital ||- ||168.00 |
|Corporate Dividend Tax on Proposed Dividend ||- ||34.20 |
|Adj for Depreciation of prior years pursuant to change in useful life ||- ||- |
|Balance Carried to Balance Sheet ||9029.44 ||9671.69 |
|EPS Basic & Diluted- Before Extraordinary Items (in Rs.) ||7.87 ||10.02 |
|EPS Basic & Diluted- After Extraordinary Items (in Rs.) ||(1.61) ||7.65 |
For the financial year 2017-18 the Company recorded a net turnover of Rs. 17590.69lakhs as against Rs. 19740.61 lakhs for the financial year 2016-17 registering adecrease of 10.90%. The Net Profit Before Tax stood at Rs. (496.35) lakhs as against
Rs. 1721.29 lakhs over last year and Profit After Tax stood at Rs. (2384.05) lakhs forthe year as against Rs. 1227.77 lakhs in the last year.
The Company is engaged in the business of manufacturing garments. Therefore there isno separate reportable segment.
SUBSIDIARY / JOINT VENTURE / ASSOCIATE COMPANY
Your Company does not have any subsidiary joint venture or associate Company.
MATERIAL CHANGES AND COMMITMENT
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.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return as provided under sub-section (3) of section 92 of theCompanies Act 2013 (the Act') in prescribed form MGT-9 is enclosed as"Annexure A" to this report.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act 2013 Mrs.Taruna Reddy (DIN: 02787135) will retire by rotation at the ensuing Annual General Meeting(AGM') and is eligible for re-appointment. The Board of Directors recommends there-appointment of Mrs. Taruna Reddy as a Non-executive Director of the Company.
Mr. Gopal Sehjpal (DIN: 00175975) Mr. Anantharaman Mahadevan (DIN: 00165226) and Mr.Sivabalan Pandian (DIN: 01573458) were re-appointed as an Independent Directors of theCompany by way of passing special resolution at the 30th Annual General Meeting of theCompany.
Mr. Dhanpat Kothari (DIN: 03032242) resigned from the directorship of the Company witheffect from August 24 2017. The Board wishes to place on record its appreciation ofservices rendered by him during his tenure as the Director of the Company.
Ms. Darsha Sanghvi resigned as the Company Secretary of the Company w.e.f. October 012017. Ms. Divya Shrimali has been appointed as the Company Secretary of the Company w.e.f.February 15 2018.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
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 or other applicable laws. TheBoard has on the recommendation of the Nomination and Remuneration Committee framed apolicy 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.
DECLARATION BY INDEPENDENT DIRECTORS
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.
COMMITTEES OF THE BOARD OF DIRECTORS
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 Responsibility Committee.
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.
FAMILIARISATION PROGRAMME FOR THE INDEPENDENT DIRECTORS
In compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 (SEBI (LODR) Regulations") the Company has put in place a FamiliarizationProgramme for the Independent & Non-Executive Directors to familiarize them with theCompany their roles rights responsibilities in the Company nature of the industry inwhich the Company operates business model etc. The details of such programme is availableon the website of the company www.lovableindia.in and may be accessed through the web linkhttp://lovableindia.in/index.php?route=information/information&information_id=69.
NUMBER OF MEETINGS OF THE BOARD
The Board of Directors met 6 (six) times during the year on 29th May 201731st July 2017 13th September 2017 6th October 2017 14thDecember 2017 and 14th February 2018. For details of the meetings of the boardplease refer to the corporate governance report which forms part of this report. Theintervening gaps between the Meetings were within the period prescribed under theCompanies Act 2013 and SEBI (LODR) Regulations.
The Company has complied with the applicable Secretarial Standards issued by theInstitute 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 performanceits various committees and individual directors pursuant to the provisions of theCompanies Act 2013 the Corporate Governance requirements as prescribed under regulation17(10) 25(4) and other applicable provisions of the SEBI (LODR) Regulations and theGuidance note issued by SEBI.
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 non-executivedirectors. The same was discussed in the board meeting that followed the meeting ofindependent directors at which the performance of the Board its committee and individualDirectors was also discussed.
PARTICULARS OF LOANS GUARANTEE AND INVESTMENTS
The Company has not made any loans guarantees or investments during the year underreview pursuant to the provisions of Section 186 of the Companies Act 2013.
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.
BUY BACK OF EQUITY SHARES
Pursuant to approval of Board of Directors at their meeting held on October 6 2017your Company completed Buy-Back of 2000000 equity shares in February 2018 for anaggregate amount of Rs. 500000000/- being 11.90% of total paid up equity share capitalof the Company at Rs. 250 per equity share. The Buy- Back was made from all existingshareholders of the Company as on December 8 2017 the record date for the Buy-Back on aproportionate basis under the Tender Offer route in accordance with the provisionscontained in the Securities and Exchange Board of India (Buy Back of Securities)Regulations 1998 and the Companies Act 2013 and rules made thereunder.
RELATED PARTY TRANSACTIONS
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 available onCompany's website; web link at http://lovableindia.in/index.php?route=information/information&information_id=69. The Policy intends to ensure thatproper 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.
WHISTLE BLOWER MECHANISM / VIGIL MECHANISM
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 Whistle blower policy aspires to encourage all employees to reportsuspected 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 accessedthrough the web link http://lovableindia.in/index.php?route=information/information&information_id=69.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
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 InternalComplaint Committee to consider and to redress complaints of sexual harassment. TheCommittee has not received any complaint of sexual harassment during the year underreview.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In accordance with the requirements of Section 135 of Companies Act 2013 your Companyhas constituted a Corporate Social Responsibility Committee. The composition terms ofreference and other relevant details of the Corporate Social Responsibility Committee isprovided 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 and expenditure incurredthereon during the year are set out in "Annexure B" of this report in the formatprescribed in the Companies (Corporate Social Responsibility Policy) Rules 2014. Thepolicy is available on the website of the Company; web linkhttp://lovableindia.in/index.php?route=information/information&information_id=69.
PARTICULARS OF EMPLOYEES
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 of the 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 of the Companywas in receipt of remuneration in excess of the limits specified whether employed for thewhole 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 31stMarch 2018 the applicable accounting standards have been followed and that no materialdepartures have been made from the same;
they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for that period;
they have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets 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 internalfinancial 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.
DEPOSITS FROM PUBLIC
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.
CASH FLOW ANALYSIS
In conformity with the provisions of Regulation 34(2) of SEBI (LODR) Regulations theCash Flow Statement for the year ended 31.03.2018 is enclosed as a part of this AnnualReport.
The details pertaining to composition of audit committee are included in the CorporateGovernance Report which forms part of this report.
M/s. DMKH & Co. a firm of Chartered Accountants were appointed as a StatutoryAuditors of the Company for one term of 5 (five) consecutive years to hold office from theconclusion of the 30th Annual General Meeting held on 30th August2017 until the conclusion of the 35th Annual General Meeting (AGM) to be heldin year 2022 subject to ratification of their appointment at every AGM if so requiredunder the Act. The Company has received their eligibility certificate subject to Section139 and 141 of the Act and Rules made thereunder.
The Ministry of Corporate Affairs have vide its Commencement Notification dated 7thMay 2018 inter alia notified the commencement of section 40 of the Companies (Amendment)Act 2017 which omitted the proviso to sub-section (1) of section 139 of the CompaniesAct 2013 mandating the requirement of annual ratification for Auditors appointment bythe Members at every Annual General Meeting.
The notes on Financial Statements referred to in the Auditors Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualifications reservation or adverse remark and is prepared as per "IndAS".
Pursuant to the provisions of Section 138 of the Act and the Companies (Accounts)Rules 2014 the Board of Directors of the Company has appointed Bathiya & AssociatesLLP to conduct internal audit reviews for the Company.
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 auditor's report and secretarial auditor's report for thefinancial year 2017-18 does not contain any qualifications reservations or adverseremarks. Report of the secretarial auditor is given as an annexure which forms part ofthis report.
REPORTING OF FRAUD BY AUDITORS
During the year under review neither the statutory auditors nor the secretarialauditors has reported to the Audit committee under section 143(12) of the Companies Act2013 any instances of fraud committed against the Company by its officer or employeesthe 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 Tribunalsduring the previous year which may impact the Going Concern Status of the Company'sOperation 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 theCompanies (Declaration and Payment of Dividend) Rules 2014 unclaimed / un-encasheddividend for the FY 2010-11 is due for transfer to IEPF on October 2018. Members who havenot encashed their dividend warrants pertaining to the aforesaid years may approach theCompany/ its Registrar for obtaining payments thereof atleast 20 days before they are duefor transfer to the said fund.
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. August 30 2017) 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 under the new law.
Your Company has in place all the statutory Committees required under the 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.
MANAGEMENT DISCUSSION AND ANALYSIS
To avoid duplication between the Directors' Report and the Management Discussion andAnalysis we present below a composite summary of performance and functions of theCompany.
For the Financial Year 2017-18 (FY18) it is worth taking a look at India's economicperformance over what has been quite an interesting period. While the first quarter of theyear saw the impact of demonetisation settling down in the next quarter introduction ofthe landmark Goods and Services Tax (GST) brought in some uncertainties as businessesadjusted to the new regime. This did not take long and from the third quarter onwardssigns of growth returning were evident.
One of your Company's factories suffered a devastating fire in November 2017 whichreduced our production capacity by 40%. Your Company took quick measures to step updebottlenecking and production increases at its other units and salvage the supplies tothe Sales channel to the best extent possible. Our financial results from Quarter 3onwards have to be understood with this perspective.
In the coming financial year what can we expect? As global economic activity continuesto strengthen global growth is forecast to grow by 3.9% during 2018 as per theInternational Monetary Fund's (IMF) January 2018 World Economic Outlook. The IMF expectsIndia to grow further to 7.8% during 2019 in contrast to the previous year's growth.
The Indian innerwear market continues to be underpenetrated and thereby holds immensebusiness opportunities. Given the positive macro and demographic fundamentals theinnerwear market has a favorable demand growth outlook over the medium-to-long term..However lesser product portfolio and high costs of brand building are expected to be thechallenges for this sector. Brand sensitivity and consolidation are the major trends inthe Indian innerwear industry.
Your Company has identified the twin routes of Deeper and Category-leadingBrand-building and Scale-up of Production as the routes to high sales volumes and to bethe engines of growth.
Accordingly your Company in the year 2018 has invested heavily in new marketinginitiatives advertising and a heightened media presence besides launches of nextgeneration products in Innerwear and Sportswear.
Due to increased business serving multiple sales channels to prepare for higher volumesales expected going forward in 2018-19 and due to the fire at our old production plant asdiscussed earlier the Company invested in additional production capacity with advancedsystems keeping long-term cost-efficiency in focus to increase the goods supplythroughput scale economies and to enhance our brands and products portfolio in themarket. During the year under review your Company commissioned its new plant at Erodedetails of which are provided in the Corporate Governance Report.
The Indian retail market is expected to grow at CAGR of 13 per cent to reach US $1080billion in2020 with current market size of US $585 billion. The share of apparel in theIndian market is 8 per cent. Organised apparel retail contributes to 21 per cent of thetotal apparel retail. Indian fashion retail market has witnessed several significantchanges in recent years which indicate the country's evolving fashion retail market. Thecurrent online retail share accounts to about 1.2 per cent of total retail market.
The innerwear category currently estimated to be worth Rs. 25034 crores accounts for8 percent of the total apparel market in 2016 and is expected to grow at CAGR of 12percent over next five years and reach Rs. 80117 crores by 2026. In recent years thewomen's innerwear segment has grown consistently and estimated to be worth Rs. 16259crores in 2016 and accounts for 5 percent of the apparel market. Your Company is deployingsuitable strategies to capitalize on its growth in its chosen segments. Your Company isdeploying suitable strategies to capitalize on its growth in its chosen segments.
ENVIROMENT HEALTH AND SAFETY
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 not just statutory requirementsbut even more stern internal policies and best practices related to environment healthand safety in all our units. In the year under review your Company has furtherstrengthened its commitment to workplace compliance by increasing the strength of theworkplace Compliance 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.
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 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
Total Energy Consumption and Energy Consumption per Unit of Production (Form-A and FormB 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 ||2017-18 ||2016-17 |
|Power & Fuel Consumption || || |
|1. Electricity || || |
|a) Purchased Units (Lacs ) ||6.62 ||7.17 |
|Total Cost (Rs. In Lacs ) ||52.29 ||54.85 |
|Rate/Unit (Rs.) ||7.90 ||7.65 |
|b) Own Generation || || |
|1)Through Diesel Generator || || |
|Units ( Lacs ) ||0.49 ||0.48 |
|KWH per unit of fuel ||4.67 ||4.67 |
|Fuel Cost/Unit (Rs.) ||12.48 ||12.45 |
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 in Technology absorption as per Form B: Nil
B. Consumption per unit of Production
|Product ||Electricity |
| ||2017-18 ||2016-17 |
|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 bythe Company amounted to Rs. 33.81 lakhs (Previous year Rs.49.35 lakhs) mainly on accountof import of raw materials finished goods Capital Goods foreign travel.
Foreign exchange earned and outgo during the year ended March 31 2018:
| || ||Rs. In Lakhs |
|Particulars ||2017-18 ||2016-17 |
|Foreign Exchange Earned ||- ||- |
|Exports (FOB) ||- ||- |
|Technical Assistance ||- ||- |
|Total ||- ||- |
|Foreign Exchange Outgo ||- ||- |
|CIF Value of Imports ||33.52 ||47.40 |
|Travelling Expenses ||- ||1.95 |
|Others ||0.29 ||- |
|Total ||33.81 ||49.35 |
INTERNAL CONTROL SYSTEMS AND ADEQUACY
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. Periodical reports and significant audit observations and follow upactions thereon are reported to the Audit Committee. The Audit Committee is headed by anIndependent Director and this ensures independence of function and transparency of theprocess of supervision and oversight. The Audit Committee reviews adequacy andeffectiveness of the Company's internal control environment and monitors theimplementation of audit recommendations including those relating to strengthening of theCompany's risk management policies and systems. The Company conducts its business withintegrity and high standard of ethical behaviour and in compliance with the laws andregulations that govern its business.
OPPORTUNITIES AND THREATS
For the apparel industry in general and our market in particular:
More organized retail. Better consumer retail experience
Increasing fashion consciousness and consumers becoming more aspirational discerningand brand savvy.
The factors that determine consumption education occupation urbanization rise innuclear families moving in a positive direction
Increasing urban women population and women corporate workforce Increasing brandconsciousness and spending on kids Higher disposable income Increasing online retail
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.
RISKS AND CONCERNS
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 isalso conscious that in the Media environment of exploding media vehicles and fragmentedaudiences the challenges for achieving Brand Reach and delivering effective communicationare rising disproportionately. The Company is taking steps to plan and execute mediacampaigns 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 anddeliver to his full potential.
During the year under review industrial relations in the factory were cordial andpro-active and all employees and the Union supported productivity and process improvementmeasures undertaken at all the functions of the Company. Their unstinted co-operation hasenabled the unit to achieve continuous growth both quantitatively and qualitatively. YourCompany continued to maintain excellent industrial relations with all its employees andindependent job work firms. Adequate safety and welfare measures are in place and yourCompany will continue to improve the same on ongoing basis.
As of 31st March 2018 the Company had 914 employees 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 Companyhas taken a step to evolve in the super-premium segment of innerwear. India is expected toperform better aided by improving macroeconomic fundamentals. While currently inflationis benign upside pressures on inflation from the vagaries of monsoon or sudden changes inthe 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 in capabilities 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.
APPRECIATIONS AND ACKNOWLEDGEMENTS
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 InvestorsClients Vendors Bankers Government and Regulatory Authorities and Stock Exchanges fortheir continued support.
| || ||On behalf of the Board of Directors |
| || ||Lovable Lingerie Limited |
|Place : Mumbai ||L Vinay Reddy ||L. Jaipal Reddy |
|Date : August 07 2018 ||Chairman& Managing Director ||Whole Time Director |
| ||(DIN: 00202619) ||(DIN: 01539678) |
Statement of Disclosure of Remuneration under Section 197 of Companies Act 2013 andRule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014and Amendments thereto:
i. Ratio of the remuneration* of each Director to the median remuneration of theemployees of the Company for the financial year 2017-18:
|Sr. ||Name of Director ||Nature of Directorship ||Ratio to median remuneration of employees |
|1 ||L Vinay Reddy ||Managing Director ||13.05 |
|2 ||L Jaipal Reddy ||Whole-Time Director ||13.62 |
|3 ||Anantharaman Mahadevan ||Non-Executive Independent Director ||0.37 |
|4 ||Gopal Sehjpal ||Non-Executive Independent Director ||0.75 |
|5 ||Sivabalan P. Pandian ||Non-Executive Independent Director ||0.72 |
|6 ||Dhanpat Kothari # ||Non-Executive Independent Director ||0.25 |
|7 ||Taruna Reddy ||Non-Executive Director ||0.37 |
* Remuneration includes sitting fees paid
# Dhanpat Kothari Resigned w.e.f. 24th August 2017.
ii. Percentage increase in remuneration of each Director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year2017-18:
|Sr. No ||Name of Director/KMP ||Designation ||% increase in Remuneration |
|1 ||L Vinay Reddy ||Managing Director ||(0.14) |
|2 ||L Jaipal Reddy ||Whole-Time Director ||- |
|3 ||Anantharaman Mahadevan ||Non-Executive Independent Director ||0.13 |
|4 ||Gopal Sehjpal ||Non-Executive Independent Director ||(0.05) |
|5 ||Sivabalan P. Pandian ||Non-Executive Independent Director ||0.26 |
|6 ||Dhanpat Kothari (*) ||Non-Executive Independent Director ||(0.60) |
|7 ||Taruna Reddy ||Non-Executive Director ||1.25 |
|8 ||R Govindarajan ||Chief Financial Officer ||(0.03) |
|9 ||Darsha Sanghvi ($) ||Company Secretary ||(0.26) |
|10 ||Divya Shrimali (#) ||Company Secretary ||N.A. |
(*) Mr. Danpat Kothari resigned from Directorship from 24th August 2017.
($) Mrs. Darsha Sanghvi resigned from the post of Company Secretary from 1stOctober 2017. (#) Ms. Divya Shrimali has been appointed as a Company Secretary from 15thFebruary 2018. iii. The percentage increase in the median remuneration of Employees forthe financial year (Median 2018/ Median 2017): 0.07%
iv. The Company has 914 permanent Employees on the rolls of Company as on 31st March2018.
v. Average percentage increase made in the salaries of Employees other than themanagerial personnel in the financial year was 0.07% whereas the increase in themanagerial remuneration was 0.08%. The total managerial remuneration comprises ofremuneration of the Managing Director and Executive Director. The remuneration toManagerial personnel is as approved by the shareholders under the provisions of CompaniesAct 2013. The average increases every year is an outcome of Company's marketcompetitiveness as against its peer group companies. In keeping with our reward philosophyand benchmarking results the increases this year reflect the market practice.
vi. It is hereby affirmed that the remuneration paid during the year is as per theRemuneration Policy of the Company.
| || ||On behalf of the Board of Directors |
| || ||Lovable Lingerie Limited |
| ||L Vinay Reddy ||L. Jaipal Reddy |
| ||Chairman& Managing Director ||Whole Time Director |
| ||(DIN: 00202619) ||(DIN: 01539678) |
|Place: Mumbai || || |
|Date: August 07 2018 || || |