I. INDUSTRY STRUCTURE AND DEVELOPMENTS
The Textile and Clothing Industry which provides largest employment opportunities to the people in the country suffered a setback during the year under review. The industry which generated good profits during the financial year 2021-22, had an adverse working during the year 2022-23. It was unexpected that the profits generated by Industry during the preceding year could turn into losses in the subsequent year.
Raw Cotton prices surged high during the first half of 2022-23 causing disruption in the working of the Mills. Due to poor demand both in the domestic and export fronts, majority of the Mills resorted to curtailing of production activities. Average domestic Cotton prices decreased by 25% in the second half of 2022-23 compared to the prices prevailed in the first half. Domestic Cotton Production is estimated to be at 238 lac bales for the year 2022-23. Though the domestic Cotton prices may be moderated with New Cotton arrivals from the second half of 2023-24, yet Global Cotton Prices are likely to be go up because of U.S. ban on the Chinese Xinzing Cotton.
The Textile and Apparel exports from the country on the whole had recorded a decline of 13.88% during 202223 vis-a-vis the previous year. So also Cotton Yarn / fabrics / made ups and handloom exports declined by 28% and Manmade fibre by 12%. It is expected that Indian economy will grow by 5.8% in 2023. It is also observed that higher Interest Rates and weaker external demands will continue to weigh on investments and exports in 2023.
OPPORTUNITIES AND THREATS Opportunities
The Central and State Governments had announced series of measures to boost the Textile production to generate much needed employment and also to earn valuable foreign exchange.
Threats
The continued conflict between Russia and Ukraine and the rising interest costs in major economies of the world are causes of concern.
II. SEGMENT WISE OR PRODUCT WISE PERFORMANCE
i) The Company is structured into two business segments - ‘Textiles and ‘Rental Services.
ii) Textile consists of manufacturing and sale of yarn and trading in cloth and garments including Bed Linen. Rental services consists of letting out of Properties.
This structuring was done during the financial year 2018-19 and the procedure now adopted is in line with the segment wise information.
III. OUTLOOK
The FTA agreements entered into with UAE as well as with Australia are yielding results. The former in increasing the volume of Textile exports to UAE and the latter in importing much needed quality Cotton from Australia.
Future global textile looks to be competitive and price sensitive. Operational efficiency and right marketing strategy appears to be the need of the hour to work in the highly competitive market.
V. RISKS AND CONCERNS
The nature and magnitude of risks associated with the Company are reviewed and placed before the Board. Steps are taken to ensure that our products are competitive both in the export and domestic segments.
Schemes of Modernisation to improve the productivity levels as well as for increasing capacity are in progress and on completion is expected to give positive results.
VI. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an adequate Internal Control System commensurate with its size and operations. Management has overall responsibility for the Companys Internal Control System to safeguard the assets and to ensure reliability of financial results.
VII. DISCUSSIONS ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
The revenue during the year 2022-23 was Rs.23,991.42 lakhs and your Company incurred a loss of Rs.677.86 lakhs before deferred tax of Rs.176.66 lakhs.
VMLMATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NO. OF WORKERS EMPLOYED
The relations with employees continue to be cordial. The Company had on its Roll 319 employees as on 31.3.2023 as against 346 employees as on 31.3.2022.
IX. KEY FINANCIAL RATIOS
Sl. No Description | 2021 - 22 | 2020 - 21 | % change | Explanation |
1 Debtors Turnover Ratio | 10.60 | 11.02 | (3.81) | Lower Turnover and collection of Receivables |
2 Inventory Turnover Ratio | 4.50 | 8.30 | (45.78) | Decrease in Turnover |
3 Interest Coverage Ratio | (0.06) | 4.15 | (101.45) | Decrease in Earnings |
4 Current Ratio | 0.69 | 0.96 | (28.13) | Decrease in Net Current Assets |
5 Debt Equity Ratio | 0.17 | 0.13 | 30.77 | Increase in Debt during the year |
6 Operating Profit Margin % | (0.18) | 12.75 | (101.41) | Decrease in Earnings |
7 Net Profit Margin (%) | (2.09) | 6.94 | (130.12) | |
8 Return on Net Worth | 1.78 | 24.66 | (92.78) | Due to decrease in fair value of Equity Instruments |
By Order of the Board | |
For The Lakshmi Mills Co. Ltd., | |
S. PATHY | |
Coimbatore | Chairman and Managing Director |
29th May, 2023 | (DIN 00013899) |
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www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.
Copyright © IIFL Securities Ltd. All rights Reserved.
Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213, IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
This certificate demonstrates that IIFL as an organization has defined and put in place best-practice information security processes.