Lexus Granito (India) Ltd Management Discussions

The Management of Lexus Granito (India) Limited Presenting Management Discussion and Analysis Report covering the operational and financial performance of the company for the year 2024-25, the core business of the company is manufacturing, trading and marketing of vitrified ceramic tiles and wall tiles.

BUSINESS OVERVIEW

Our Company is promoted and managed by Anilkumar Babulal Detroja, Hitesh Babulal Detroja, Nilesh Babubhai Detroja and Pavan Blackrock Private Limited. Our individual promoters manage and control the major affairs of our business operations.

Our Company is engaged in manufacturing, trading and marketing of vitrified ceramic tiles and wall tiles for the domestic and international markets. Our manufacturing facility is situated at Morbi, Gujarat and is spread over more than 4 hectares. Our manufacturing facility is well equipped with requisite plant and machineries and other facilities. We also have an in-house laboratory, enabling the company to develop new colors, besides facilitating conducting of tests and analysis of various products. Our quality system with respect to manufacture of our products has been ISO 9001:2008 certified. Further we have also been issued Certificate of Compliance by UK Certification & Inspection Ltd for our quality systems covering the design, manufacture and final inspection of the products. We manufacture and market our products under the brand name -LEXUS.

During the financial year 2024-25, the total revenue was Rs. 7525.3 Lakhs as compared to Rs. 11,796.82 Lakhs in the previous financial year 2023-24. The Company has incurred a loss after tax of Rs. 503.14 Lakhs as compared to the previous financial year loss after tax of Rs. 1657.94 Lakhs.

Your management is striving hard to address all the issues coming in the company and is confident that new strategies now being pursued by the company to focus on low cost tiles is appropriate for achieving the desired result. Your company is hopeful for the much better performance in the current financial year.

Our Company has been operating in both domestic and international markets. Our revenue from domestic and export operations contributed 89.24% and 10.76% respectively of our total revenue from operations for the year ended March 31, 2025.

During FY 2024-25, we exported our products to various countries such as Israel, Libya, Italy, Mali, Iraq, Portugal, Saudi Arabia, Republic of Kosovo, Taiwan, and United Kingdom. We intend to continue to mark a presence in global markets in our industry by supplying innovative products at competitive prices.

For marketing of our products, we have a dedicated marketing team who continuously interacts with customers and evaluate the market dynamics. We have also set up a corporate office at

Morbi for marketing our products. Our customers are mostly importers, distributors, dealers and project fabricators. We also cater to retail users as per their requirement.

OPPORTUNITIES

The Company has carved a niche for itself in the industrial shoe/ uppers segment both internationally and in the domestic market. The quality of the Companys products and services provided is well recognized. Embarking on this strength we are constantly working towards expanding the market for Companys products to other countries apart from our present work areas.

THREATS

(i) Growing unorganized sectors (ii) Shortage of resources

RISK & CONCERNS

To sustain and grow in global market one must be ready for some level of uncertainty. Greater the uncertainty, higher the risk. The risk management function is integral to the Company and its objectives include ensuring that critical risks are identified, continuously monitored and managed effectively in order to protect the Companys business. The Company operates in an environment which is affected by various factors some of which are controllable while some are outside the control of the company. The Company proactively takes reasonable steps to identify and monitor the risk and makes efforts to mitigate significant risks that may affect it. Some of the risks that are potentially significant in nature and need careful monitoring are listed here under:

- Macroeconomic Factors

- Political Factors

- Changes in government policy and legislation

- Raw Material Price Increase

- Foreign Exchange Fluctuation

INTERNAL CONTROL SYSTEM AND ADEQUACY

The Company has a well-established and comprehensive internal control system. Documents, policies and authorization comply with the level of responsibility and standard operating procedures specific to the respective businesses. Observation made in internal audit reports on business processes, systems, procedures and internal control and implementation status of recommended remedial measures by Internal Auditors are regularly presented to and reviewed by the Audit Committee of the Board. The system of internal control is being improved to ensure that all assets are safe and protected against loss from unauthorized use or disposition, and that all transactions are authorized, recorded and reported correctly. The Company regularly conducts internal check, using external and internal resources to monitor the effectiveness of internal control in the organization. It strictly adheres to corporate policy with respect to financial reporting and budgeting functions. The Audit Committee of the Board of Directors deals with significant control issues and instructs further areas to be covered.

FINANCIAL PERFORMANCE

The summarized financial performance of the Company as compared to last year is shown as under:

Particulars	2024-25	2023-24	% change
Revenue from operations	7,525.03	Rs. 11,796.82	-36.21
Other Income	29.17	Rs.54.28	-46.26
Profit/ (Loss) before tax	(547.08)	(1,592.40)	65.64
Net Profit / (Loss) after tax	(503.14)	(1657.94)	69.65
Payment of Dividend	-	-	-
(including Interim and DDT) EPS	-2.49	-8.44	-70.50
Current Ratio	1.42	1.11	28.08
Debt Equity Ratio	14.91	6.22	139.92
Debt Service Coverage	1.02		922.27
Ratio (in times)		0.10
Return on Equity Ratio (in %)	-1.15	-1.78	-35.18
Inventory Turnover Ratio (in times )	2.10	1.77	18.11
Trade Receivables	4.42	5.95	-25.69
Turnover Ratio
Trade Payables Turnover	0.05	0.04	40.17
Ratio
Net Capital Turnover Ratio	3.43	18.02	-80.95
Net Profit Ratio (in %)	-6.69	-14.05	-52.42
Return on Capital	-2.66	-27.24	-90.22
Employed (in %)
Return on Investments (in %)	5.90	11.16	-47.13

Reason for variance more than 25%

Current Ratio (in %)

During 2024–25, a decrease in trade payables and short-term borrowings led to an increase in the current ratio from 1.11 to 1.42.

Debt Equity ratio (in %)

In 2024–25, a decline in shareholders equity as compared to previous year, increased the debt-equity ratio from 6.22 to 14.91.

Debt Service Coverage ratio (in times)

During 2024-25, There is decreased in loss as compared to previous year. Thus, Debt service coverage ratio increased from 0.1 to 0.69

Return on Equity ratio (in %)

During 2024-25, there is Decreased in Net loss as compared to previous year. Thus, Return on Equity ratio decreased from 1.78 to 1.15.

Trade Receivable Ratio (In times)

During the year, Credit sales and average receivables decreased due to which Trade Receivables turnover ratio decreased from 5.95 to 4.42.

Trade Payable Ratio (In times)

During the year, Purchase increased from 186.19 Lakhs to 225.56 Lakhs. Thus, Trade Payables Turnover ratio increased from 0.04 to 0.05.

Net Capital Turnover Ratio (In times)

During the year, Revenue from operations decreased and net working capital increased significantly. Thus, Net capital turnover ratio decreased from 18.02 to 3.43 times.

Net Profit/ Loss ratio (in %)

During the year, Net loss reduced substantially sales also reduced. Thus Net Profit ratio decreased by 52.42% .

Return on Capital Employed (in %)

Return on Capital employed moved from (27.24)% to (2.66)% due to comparatively more increase in capital employed during the year.

Return on Investments

During the year, average cost of investment increased from 40.04 Lakhs to 48.29 Lakhs due to which Return on investment decreased from 11.16 to 6.01

HUMAN RESOURCE

Human resource remains a valuable asset of our business. The Company continues to lay emphasis on attracting and retaining talent. Personnel developmental initiatives including training, both technical and managerial, are regularly conducted to enhance human potential. As on 31st March, 2025 the Company has 29 employees. The Company recognizes that its employees are its principal assets and that its continued growth is dependent upon the ability to attract and retain quality people. The company has established a full-fledged Human Resources Department, which is entrusted with the responsibility of retaining and developing the skills of all its employees. The Company also recognizes the importance of providing training and development opportunities to its people to enhance their skills and experiences, which in turn enables the Company to achieve its business objectives. The industrial relations in all units of the company continue to be cordial.

HEALTH, SAFETY AND ENVIRONMENT PROTECTION

Companys Health and Safety policy commits to comply with applicable Legal and other requirements connected with occupational Health, Safety and Environment matters and provide a healthy and safe work environment to all employees of the Company.

FORWARD LOOKING STATEMENT

The success of our business depends substantially on our ability to implement our business strategies effectively. Company is planning to expand its operations in the domestic tiles market of India by appointing its dealers throughout in India. The company also planning to acquire other business involved in the same line of business activity. This will result in increasing the market capturing of the company and will also increase the turnover and as a result the profits of the Company.

OCCUPATIONAL HEALTH, SAFETY, AND ENVIRONMENT

The emphasis on Occupational Health, Safety and Environment continues at all of the operations of the Company throughout India. The Company is committed to the best standards in safety and continuously monitors matters related to this.

CORPORATE SOCIAL RESPONSIBILITY

As per the Criteria of Section 135 of Companies act, 2013, the board is required to constitute a corporate social responsibility committee of members, who will manage the CSR activities applicable on the company to be undertaken by the company as specified in Schedule VII to the Companies Act, 2013 and duly approved by the board as well as fix the amount of expenditure to be incurred on the activities and monitor the CSR policy from time to time. Our company constituted the CSR Committee for undertaking the CSR activities as per the provisions of Companies Act, 2013 and SEBI (LODR), 2015.

However, during the year under review FY 2024-25, the company is not falling under the criteria for fulfilling the CSR activities this year.

The company has not incurred any sum on CSR activities during the year under review.

CAUTIONARY STATEMENT

Statements in the Management Discussions and Analysis report describing the Companys objectives, projects estimate, expectations or predictions may be forward looking statements within the meaning of applicable security laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the companys operations include economic conditions affecting demand and supply and price conditions in domestic and overseas market in which the company operates, changes in Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other incidental factor.