<dhhead>MANAGEMENT DISCUSSION & ANALYSIS </dhhead>
Industry Structure and Development Textile division:
e Textile Industry in India is second largest employer after
agriculture providing jobs to the various classes of peoples and is one of the significant
contributors to the Indian economy. During the year 2022-23, the Cotton Textile Industry
in India has experienced an improvement on account of overall sluggish demands from
overseas markets. e depreciation of the Indian currency has helped achieving better
realizations for export and has increased the competitiveness of the Exports from India.
However the sluggishness in world market particularly in the last quarter of the financial
year combined together with the appreciation of the Indian Currency has affected the
competitiveness of the Indian Export, reflecting lower volumes and profits for the
exporters.
Revival is only expected once Raw Material Prices Comes back to
reasonable level and the improvement in demands overseas will enable whole textile value
chain to move on smoothly.
Lahoti Overseas Limited is mainly engaged in the export of various
kinds of Cotton Yarns, Grey Cotton Fabrics and allied Textile Products. Company has a
strong presence in Overseas Markets in the products. Company enjoy good reputation in the
Global Markets by way of its Competitiveness and efficient services.
Power Projects Division:
Government of India has taken several measures to encourage Renewable
Energy Sector in India. Many State Governments and Government undertakings also have come
out with the Reverse Bidding System to fulfil their obligations for Renewable Energy and
combined with this sector has become the most talked about sector attracting huge
investments and has the potential for huge growth in future.
Lahoti Overseas Limited has ventured into the Renewable Energy Sector
by installation of Wind Power projects and Solar Power projects. However the falling trend
in the power purchase prices are affecting adversely on the profit margins and growth
prospects.
Awards and Recognitions
e Company has won the Gold, Silver & Bronze trophies consistently
since 1997 from TEXPROCIL (Cotton Textile Export Promotion Council) for excellence in
export of cotton yarn.
e Company has won the prestigious "Niryat Shree" award from e
Federation of Indian Export Organization (FIEO) for the year 2003-2004. e Company also won
Silver plaque from Government of Maharashtra for the year 1995-96, 1996-97 and Gold Plaque
for the year 2009-2010.
e Company has won the Business World International Business Award for
Category – "Best Export House" for excellent performance in exports in the
year 2010-11.
e Company has received Second Award in Merchant Exporter Category and
ird Award in Trading House Category from Government of Maharashtra for its export
performance in the year 2010-11.
e Company has been awarded with Gold Trophy Award for highest exports
of Cotton Yarn (count 50s & below Category II by Texprocil for the year 2021-22.
ese awards recognised the efforts of the Company in the creation of
path breaking trends and excellent export performance in Cotton Textile Industry.
Opportunities and reats Textile Division
e future of Indian Cotton Textile Industry is highly depending on
availability of raw material at a competitive price. With the introduction of Hybrids and
BT Cotton, the cotton production in India is increasing every year. e government is making
efforts to supply proper quality seeds at a reasonable price to the growers and it is
expected that the supply of quality cotton will be comfortable.
In the past, the Textile Industry did not develop in an organized
manner and the policy favored fragmentation resulting in organized players suRs.ering
heavily because of the distorted fiscal structure. Fortunately, in the last few years, the
Government has now provided level playing field to all the sectors of textile industry and
therefore, large investments are coming in the textile industry. Government had given good
incentives under Technology Upgradation Fund Scheme, Textile Park Scheme and also benefits
to the processing sector, which will give boost to the textile industry. Various state
government are also offering attractive incentive to textile industry.
Power Projects Division:
Power Projects specifically the Renewable Energy projects are highly
capital intensive. These projects are also dependant on natural resources like wind,
water, sunlight etc. e requirement of good infrastructures such as connectivity of roads,
viability of communication systems play key roles in such projects. Being highly capital
intensive, the cost of production of energy is relatively higher in such projects. However
there is no consumption of Raw Materials and also due to the substantial reduction in the
capital cost in recent times, these projects are now becoming viable. e floor price of REC
have been revised downwards recently will help to increase the sale of REC, however the
matter of allowing the vintage multiplier to the old investors in the sector is still to
be resolved and the same is subsidized. e matter of PPA with the Rajasthan electricity
board has been recently resolved with settlement reached between the parties at Rajasthan
High Court.
Segment wise and Product wise performance
Textile Division
Revenue in Textile Division has shown a decreased by Rs.57,338.85 Lakhs
when compared to last year. e profits of the Company shown decrease of Rs..792.94 Lakhs
when compared to last year profits.
Power Projects Division:
Revenue from Power Division decreased by Rs.7.78 Lakhs when compared to
last year. However the Profits of Power division has shown an increase by Rs.256.89 lakhs.
Outlook Textile Division
e long term objective of the Company is to remain strong player in the
cotton textiles export market with strong emphasis on product and market development,
value added yarns, customer services and Technology Up gradation. Your Company is also
continuously improving its operational efficiency, and cost control which alone can
improve the bottom line in future in highly competitive environment. Further, your Company
is hopeful to get advantage of the overall good times likely to come for the Indian Cotton
Textile Industry and will do all out efforts to secure the bigger share of the increasing
market in future.
A stable outlook on cotton and synthetic textiles would result from
favourable policy environment, improvements in demand-supply position, continued stability
in input costs and consequent improvement in margins/liquidity. However, the good monsoon
and pick up in Indian economy due to various measures taken by the Government would
unleash demand in the long run and offset any slowdown in exports. Further, the hope of
revival of Chinese and Europian economy will also bring the positive growth for this
sector. By encashing the rich experience gained by the Company in the Cotton Textile
sector, the company has plans to increase its efforts of marketing and to open up foreign
offices in order to better serve its customers. e emphasis will also be on more exports of
value added items such as dyed yarns, speciality yarns and grey and dyed fabrics.
Power Projects Division:
e overall outlook of the Renewable Energy sector in India has been
positive. e supportive steps taken by Government of India and almost all State Governments
in India have given a big boost to this sector. e reduction in capital cost of the project
particularly in Solar Power have made this sector viable and due to the improvement in
technology, this sector will become more competitive and self-sufficient. India has huge
potential for Wind and Solar Power as the availability of wind and sunlight are available
in abundance in India with favorable weather conditions and India has the Rs.Rs.h largest
installed wind power capacity in the world.
Risks and Concern
A. Brief risk factors for Textile projects
Our business shall dependent on the availability/ supply and cost of
raw materials which we source from domestic suppliers. Any significant increase in the
prices of these raw materials or decrease in the availability of the raw materials, could
adversely affect our results of operations;
Our business is subject to regulation by several authorities, which
could have an adverse effect on our business and our results of operations;
We are heavily dependent on our Promoters and the loss of their
guidance and services may adversely affect our business or results of operations;
Change in Government of India’s Economic
Liberalization policies may hinder prices of our equity shares;
Change in Tax laws in India (i.e. Goods & Service
Tax & Income Tax) may increase tax liabilities of the company
inversely affecting PAT;
Slowdown in the Indian economy may inverse effect in our profit;
Any Natural calamities, terrorist attack on India may hinder our
profit;
Change in economic regulations and laws may also effect the company
adversely.
B. Brief risk factors for Power projects
Risk of property damage or liability stemming from errors during the
building of new projects;
Risk affecting the viability of the project developer, for example,
risks related to key personnel, financial solidity and technical ability to execute on
plans;
Risk of environmental damage caused by the solar park including any
liability following such damage;
Risk of insufficient access to investment and operating capital;
Risk of a cost increases for key input factors such as labour or
modules, or rate decreases for electricity generated;
Risk of unscheduled plant closure due to the lack of resources,
equipment damages or component failures;
Risk of reduction in sale price;
Risk of components generating less electricity over time than expected;
Risk of a change in policy that may affect the profitability of the
project, for example changes in levels of tax credit or RPS targets. Also, this includes
changes in policy as related to permitting and interconnection and implementation of such
policy by Government;
Risk of changes in electricity generation due to lack of sunshine or
dust covering solar panels for long periods of time;
Risk that all or parts of the solar park will be subject to sabotage,
terrorism or theRs. and thus generate less electricity than planned;
Risk of Natural Calamities.
Internal Control Systems and their adequacy
e Company has a proper adequate internal control system to ensure that
all the assets are safe guarded and protected against the loss from unauthorized usage or
disposition and that transactions are authorized, recorded and reported correctly.
e internal control is supplemented by an extensive internal audit,
periodical review by the management and documented policies, guidelines and procedures. e
internal control is designed to ensure that the financial and other records are reliable
for preparing financial statements and other data and for maintaining accountability of
assets.
Financial and Operational Performance
During the year under review your Company has reported a total income
of Rs.32,357.15 Lakhs out of which the sale realization has andecreased by 64.51% at
Rs.31,546.96 Lakhs when compared to previous years proceeds of Rs.88,885.81Lakhs from the
textile division and a decrease of 2.46% at Rs.303.95 Lakhs when compared to previous year
proceeds of Rs. 311.62Lakhs in the Power division. Further the non-operating income
amounts to Rs.868.69 Lakhs which has increased by 19.40% Rs.727.51 Lakhs as compared to
the previous year
Liquidity and Capital Resources
| Particulars |
2022-2023 |
2021-2022 |
|
(Rs. in Lakhs) |
(Rs. in Lakhs) |
| Cash and Cash |
|
|
| Equivalents – |
|
|
| Beginning of the year |
2135.15 |
428.19 |
| End of the year |
1901.50 |
2135.15 |
| Net Cash provided |
|
|
| (used) by - |
|
|
| Operating activities |
8829.23 |
1444.15 |
| Investment activities |
(3596.56) |
(591.74) |
| Financial activities |
(5466.32) |
854.55 |
During the year, there has been a Cash outflow from Operating activity
to the extent Rs.8,829.23 lakhs as against cash inflow of Rs.1444.15 Lakhs during the
corresponding previous year. Further during the year there is cash outflow of Rs.3596.56
Lakhs on account of Investment activity as against outflow of Rs.591.74 Lakhs during the
previous year. During the year the outflow generated over finance activity is Rs.5466.32
Lakhs as compare to inflow Rs.854.55 Lakhs in the previous year.
Material Developments in Human Resources
e Company continues to lay emphasis on developing and facilitating
optimum human performance. Performance management was the key word for the Company this
year. Recruitment process has been strengthened to ensure higher competence levels.
Human Resources and Industrial Relations
Human Resource is the most vital factor to achieve the goals of any
organization. To maintain its competitive edge in a highly dynamic industry, Company
recognizes the importance of having a work force which is consumer-focused,
performance-driven and future-capable. We believe in fostering equal employment
opportunities, where individuals are selected and treated on the basis of their
job-relevant merits and are given equal opportunities within the organization ere were 40
permanent employees on the rolls of the Company as on 31st March, 2023.
For and on behalf of the Board of Directors
| Sd/- |
Sd/- |
| Ujwal Rambilas Lahoti |
Umesh Rambilas Lahoti |
| (Executive Chairman) |
(Managing Director) |
| (DIN 00360785) |
(DIN 00361216) |
Place: Mumbai Date: August 10, 2023
+91-9892691696
