Looks Health Services Ltd Management Discussions.

1. Industry Structure and Development:

With the changing dimension of beauty, influence of media, film industry and fashion, the market is predicted to fuel over in the near future. Health factors such as rise in accidents and obesity have led to the growth of the market. Moreover, technological factors which include the development of advanced materials like silicone implants is also expected to spur the market growth in domestic as well as in global market. Moreover, with the increasing popularity of digital photography, introduction to self-monitoring apps, high demand to increase ones self-esteem and affordability of cosmetic surgeries in developing countries can substantially increase the volume of cosmetic surgery procedures.

India is viewed as one of the most progressive countries for cosmetic surgical procedures and this trend is expected to continue in the near future. This is mainly due to the fact that cosmetic surgery has evolved beyond the traditional concept of being a ‘risky or ‘impractical procedure that was demanded by women who were overly conscious about their appearance. Today, people in India understand that cosmetic surgery is a highly specialized and advanced niche of plastic surgery that helps people attain happiness with fewer risks and greater affordability.

In the past, cosmetic surgeries in India were associated with celebrities and people of the affluent class. However, today, these surgeries are increasingly becoming popular and are being undertaken by the middle class. Increasingly, both men and women from the upper middle class group are opting for cosmetic procedures to look attractive in order to get lucrative jobs, best possible marriage partners and primarily get rid of any deformity that they feel impacts their self confidence and self-esteem. Moreover, traditionally, men and women in their late 20s and early 30s were the key clients of cosmetic surgeons. However, a new trend has emerged where teenagers are approaching cosmetic/ aesthetic surgeons to get some cosmetic procedure done.

The changing lifestyle and urbanization, growing awareness of cosmetic surgery procedures, availability of better infrastructure and the rising economic capacity are all driving the cosmetic surgeries market in India.

2. Opportunities & Threats:

The Cosmetics market is especially rich in opportunities since most products still have low penetration rates among the population. For instance, only 23% of households use skin care products. There is vast potential of growth.

As per research findings, cosmetics market, once female dominated, has started earning high revenues from male counterparts as well, by catering to male-specific needs. The revenue generated through male cosmetic market has increased the total revenue of Indian cosmetic industry.

Meanwhile, social taboos against body part violation, non-essential nature of cosmetic surgery and high cost associated with such surgeries are some of the major factors restricting the market growth in domestic as well as in global market

3. Segment wise performance:

Company operates only in one segment viz. Cosmetic & Non Cosmetic Treatments.

4. Outlook:

Cosmetic industry has emerged as one industry holding huge potential for future growth. It is contributing to the economic growth of the country. During the last three to four decades, the industry has gained momentum and shall continue to do so in the coming years. Your Company will continue to concentrate on both product development and broadening of customer base. This will help the Company to increase the stakeholder value, growth in volumes along with managing the margins through competitive pricing. Continued cost efficiency and cost savings coupled with infrastructure development will be the focus for the coming years.

5. Risks & Concerns:

The Company believes that an organization cannot be risk averse but has to persistently foresee and implement ways of mitigating these risks. The Company occasionally faces the risk of an economic downturn but looking at the growth prospects for the Cosmetic Industry, this risk can be controlled, if not mitigated. In order to ensure long term corporate sustainability and success it is essential that the Company accept these risks, place proper mechanisms and find solutions to reduce as well as mitigate these risks. Thus, the Company is well aware of these risks and challenges and has put in place mechanisms to mitigate the same.

6. Internal Control System & their Adequacy:

Your Company has adequate internal control procedures to commensurate with the nature and size of its business. Procedures ensure efficient and cost effective use of companys resources. Company has developed proper procedures to safeguard companys valuable assets against losses, to ensure timely and accurate preparation of accounts and compliances of various rules and regulations.

7. Financial Performance:

Share Capital:

The Paid up Share Capital of the Company as on 31st March, 2019 stands at Rs. 105000000/- divided into 10500000 equity shares of Rs. 10/- each fully paid up.

Reserves and Surplus:

The Reserves and Surplus is Rs. 45,734,978/- as on the end of the Current year.

Total Income:

During the year under consideration, total income is Rs. 18,007,371/-.

8. Employee Relations:

Company has smooth relations with its employees during the year under review.

9. Our Strategy:

Company has 3 operational Branches Mumbai, Goa, & Mansi-Cross Road Ahmedabad. Due to weak economic outlook and inflationary pressures, Company has restricted its branch expansion and is taking all precautions towards the same. Company is changing its branch expansion policy from shifting from its earlier policy of opening own company operated branches to opening franchisee based branches & following franchisee based expansion model. Further once the economy starts moving & new expansion strategy is properly implemented, Company is highly upbeat about the business prospects of the Company. Considering the demand in the market the Company provides services like cosmetic and plastic surgeries, weight loss & hair gain treatment, dental surgeries and other dental treatments etc.

10. Material Development in Human Resource

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor:

- Debtors Turnover – 0.00

- Inventory Turnover – 59.16 times

- Interest Coverage Ratio – 0.00 times

- Current Ratio – 0.89 times

- Debt Equity Ratio – 0.00

- Operating Profit Margin (%) - 45.25%

- Net Profit Margin (%) – 13.13%

11.Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof - Return on Networth FY 2018-19 – 1.57% Return on Networth FY 2017-18 – 2.05%. Return on Networth is decreased by 0.49 bps during the Financial Year 2018-19 There is decrease in sales by 25 % in FY 2018-19, on the other side company has tried to control the expenses, as a result expenses are reduced by 20% which has resulted in net decrease in Networth by 0.49 bps.

By Order of the Board

For Looks Health Services Limited

Pritesh Doshi Chairman

DIN: 05155318

Date: 04th September, 2019

Place: Mumbai