LAVA International Limited Unlisted Shares

Annual Report Summary

The following summarizes the key points from the Directors' Report and financial statements of Lava International Ltd. for the year ended March 31, 2024.

Board of Directors and Key Personnel: The document lists the Board of Directors as of the signing date (04.09.2024), including Whole Time Directors (Shailendra Nath Rai, Sunil Raina, and Sanjeev Agarwal), Non-Executive Directors (Sunil Bhalla, Vishal Sehgal, Deepika Gupta), and Independent Directors (Anupam Shrivastava, Ajay Kumar Singh, Rajiv Kumar Singh). Rajesh Sethi is the Chief Financial Officer and Ritesh Singh is the Company Secretary. The document includes a detailed listing of changes in the Board composition and Key Managerial Personnel during the year, including appointments, cessations, and retirements by rotation. For instance, Rahul Kansal and Vinod Rai ceased to be Independent Directors on 22.08.2023, and Deepika Gupta was appointed as an Additional Non-Executive Director on 20.05.2024. Sunil Raina had various appointments/cessations related to Whole Time Director positions during the year before ultimately being appointed Whole Time Director on 28.02.2024. Financial Highlights: The report presents a comparison of standalone and consolidated financial results for the financial years 2023-24 and 2022-23 in millions of Rupees.

• Revenue from Operations: Standalone revenue increased from Rs. 22,056.74 million to Rs. 23,295.45 million. Consolidated revenue decreased from Rs. 49,026.55 million to Rs. 36,460.55 million.
• Profit Before Tax (PBT): Standalone PBT increased from Rs. 462.85 million to Rs. 546.03 million. Consolidated PBT decreased from Rs. 859.36 million to Rs. 454.42 million.
• Profit After Tax (PAT): Standalone PAT increased from Rs. 353.30 million to Rs. 428.78 million. Consolidated PAT decreased from Rs. 752.46 million to Rs. 115.90 million. Operations and Business Performance:
• The company is in the business of mobile phones, tablets, and communication equipment. Standalone revenue increased by 6%, while consolidated revenue decreased by 26%. Standalone profit before tax increased by approximately 18%, while consolidated profit before tax decreased significantly. Other Key Information:
• There was no change in the nature of the company’s business during the year.
• No dividend was recommended by the board for the financial year 2023-24. The company intends to utilize funds for current operations and upcoming projects.
• No amount from the profit of the company has been transferred to the General Reserve.
• The authorized share capital of the company stood at Rs. 3,961,000,000 as of March 31, 2024.
• Non-Convertible Debentures issued in 2021 were redeemed by September 25, 2023.
• As of March 31, 2024, the company had 9 direct subsidiaries, 1 joint venture, and 1 associate company.
• Various Board committees were in place, including the Audit Committee, Nomination, Remuneration and Compensation Committee, IPO Committee (dissolved w.e.f. 1st September 2023) , Operational Committee, and Stakeholders' Relationship Committee. Details of committee members, along with changes and meeting attendance, are provided.
• The company did not accept any public deposits during the financial year 2023-24.
• The Company complied with applicable Secretarial Standards issued by the Institute of the Company Secretaries of India during the year 2023-24.
• The Company has a Risk Management Policy and a Corporate Social Responsibility (CSR) Policy in place.
• M/s Raj Gupta & Co. were appointed as Statutory Auditors for 5 years.
• M/s Kumar Wadhwa & Company were appointed as Secretarial Auditors for FY 2023-24. The Secretarial Audit Report noted a delay in filing the Annual Performance Report for Overseas Investment and delay in holding the Annual General Meeting.
• Ms. Deepika Gupta was appointed as a non-executive director to address a casual vacancy for women director, which arrived on 22.08.2023.
• Cost audit is applicable to the company's products related to electrical or electronic machinery.
• A formal Board evaluation as mandated under the Companies Act has been carried out during the year.
• During the audit period, in respect of certain transactions pertaining to other company/companies relating to prior periods, the Directorate of Enforcement (ED) has filed a case against the Company and its former Managing Director which is sub-judice. On the basis of the information available and the legal opinion obtained by the Company, the prospects of the case being discharged is favorable.
• The company repaid a loan of Rs. 25,00,000/- to Mr. Hari Om Rai during the year.
• Details of remuneration and sitting fees paid to directors are disclosed.
• The report includes Annexures outlining the financial information of subsidiaries (Form AOC-1), the Secretarial Audit Report (MR-3), changes in the composition of the Board of Directors, the company’s policy on energy conservation, technology absorption, and foreign exchange earnings/outgo, and employee stock options.

Independent Auditor’s Report

• The auditor’s report expresses an unmodified opinion on the standalone and consolidated financial statements, confirming that they present a true and fair view in accordance with Indian Accounting Standards (Ind AS) and the Companies Act, 2013.
• An emphasis of matter paragraph highlights the acquisition of China Bird Centro America (CBCA) and the non-cooperation of CBCA's management.
• The report discusses the auditors' responsibilities, management's responsibilities, and other regulatory requirements.

Specific concerns and non-compliance raised by auditor

• The auditors highlight that the filing of Annual Performance Report for F.Y. ended 31.03.2023 was delayed due to delay in receipt of audited financial statements for F.Y 2022-23 for the foreign subsidiaries.
• Auditors note that the Annual general Meeting of the Company for F.Y. ended March 31, 2023 could not be held within the stipulated time under law due to delay in completion of audit of the financial statements.
• The auditors report that during the period under review, the Company's board of directors is not duly constituted. A casual vacancy for the women director arrived on 22.08.2023, The Company has failed to fill the vacancy within time as prescribed in Rule 3 of Companies (Appointment and Qualifications of Directors) Rules, 2014.
• The auditors stated that a director non compliance with the Code of Business Conduct & Ethics for Directors and Management Personnel;.

Key Financial Data (Standalone in millions of Rupees): The following data is from the Standalone Balance Sheet as at 31 March 2024:

• Property, Plant & Equipment: 474.93
• Capital Work-in-Progress: 201.69
• Investments: 3.06
• Trade Receivables: 2,751.87
• Inventories: 3,839.26
• Equity Share Capital: 2,705.63
• Borrowings: 132.77 (Non-current), 991.00 (Current)
• Revenue from Operations: 23,295.45 (from Standalone Statement of Profit and Loss)
• Profit for the year 428.78