Global economic overview

2017 was a year of new highs. The global economy which staged a recovery from aroundmid-2016 gained significant momentum in 2017 to register a 3.8% growth the fastest since2011. The heartening feature was that 2017 ended on a high with the global GDP growthpegged at 4% for the last quarter (the highest since 2010) which also provided optimismfor this momentum to be carried forward into 2018. This growth was driven by an investmentrecovery in advanced economies continued strong growth in emerging Asia a notableupswing in emerging Europe and signs of recovery in several commodity exporters. Globalgrowth is expected to tick up to 3.9% this year (2018) and next (2019) supported bystrong momentum favourable market sentiment accommodative financial conditions and thedomestic and international repercussions of expansionary fiscal policy in the UnitedStates.

Indian economic overview

After a dull first half the Indian economy gained momentum reporting a GDP growth of7.2% in the December quarter (Q3) of 2017-18—the fastest in five quarters. As aresult India reclaimed the ‘world’s fastest growing economy’ tag fromChina. This recovery was sparked by a revival in investment demand registering a growthof 12%. Based on Q3 GDP data the full year’s GDP growth is estimated to be 6.6%. Ifthis GDP growth rate is realised the Indian economy is projected to grow to US$2.6trillion by the end of March 2018.

Not only does this signal that the Indian economy is tiding over disruptions –triggered by demonetisation of high-value currencies and rollout of the Goods and ServicesTax-but the latest quarterly corporate earnings data suggest that consumer demand too isreviving.

The Company provides the entire range of spinning solutions to its domestic andinternational clients. Its ability to stay at the cutting-edge of technology ensures thatits sophisticated equipments generate quality output consistently even while making itsclient’s business competitive. The Company remains connected with its customers byoffering a comprehensive basket of value-added services that ensure optimum utilisation ofthe machine throughout its useful life.

The services basket includes hand-holding of the client’s shopfloor team postinstallation machine monitoring and audit and providing spares and accessories formaximising machine uptime. The Company also offers performance improvement kits that canbe retrofitted with legacy machines to improve their productivity and performance. TheCompany services its international customers through a network of offices in eachgeography of its presence manned by local residents. This ensures that LMW is alwaysproximate to its client’s shopfloor.

Highlights 2017-18

Despite the subdued environment prevailing in the Indian spinning sector primarily dueto the volatility in cotton prices reduction in yarn import by China and the continuingoverhang of the demonetisation driver the Company improved its business performance bydispatching more machines and performance kits. In addition the Company implemented anumber of initiatives to strengthen its competitive advantage:

Operations l Reduced the lead time between order receipt and machine dispatch byaccurate assessment of client requirement and intelligent production planning. lImplemented low-cost automation solutions which reduced labour fatigue and improvedshopfloor productivity.

R&D l Launched products that further reduced the cost of ownership andoperations l Optimised product development time by increasing the proportion ofstandardised components l Automated manual material transfer between machinesthereby further enhancing machine productivity

Spares l Encouraged customers to use the e-spares portal for procurement ofspares. Placed most of the parts under Stock and Sale category ensuring timelyavailability of spares. l Provided combo kits (sub-assemblies) which facilitatedfaster fitment (without damaging other complementary parts) and minimised the use ofspurious parts.