Lotus Chocolate Company Limited has announced a significant change in its ownership structure, with Tira Beauty Limited emerging as the new promoter and holding company. This transition comes as a result of a court-sanctioned composite scheme of arrangement, marking a new chapter for the confectionery manufacturer.

Key Details of the Transition

• New Promoter: Tira Beauty Limited
• Previous Promoter: Reliance Consumer Products Limited (RCPL)
• Shares Transferred: 65,49,065 equity shares
• Ownership Percentage: 51% of the total paid-up equity share capital

The Corporate Restructuring

The change in promotership is part of a larger corporate restructuring involving several Reliance Group entities. The National Company Law Tribunal, Mumbai Bench, sanctioned a Composite Scheme of Arrangement, which included:

• Reliance Retail Limited (RRL)
• Reliance Retail Ventures Limited (RRVL)
• Reliance Consumer Products Limited (RCPL)
• Tira Beauty Limited (New RCPL)

This arrangement, executed under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013, facilitated the transfer of Lotus Chocolate Company's shares from RCPL to Tira Beauty Limited.

Regulatory Compliance

The company has emphasized that this acquisition by Tira Beauty Limited is an exempt acquisition under Regulation 10(1)(d)(iii) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. This exemption likely pertains to inter-se transfers among qualifying persons, such as promoters.

Impact on Shareholding

Despite the change in the promoter entity, it's noteworthy that:

• There is no change in the aggregate shareholding of the promoter and promoter group of the Company as a result of this transaction.
• The overall control structure remains within the broader Reliance Group ecosystem.

Financial Snapshot

While the promoter change doesn't directly impact the company's financials, it's worth noting Lotus Chocolate's recent financial position:

The company has shown significant growth in its asset base and equity over the past year, which could be indicative of the positive impact of its association with the Reliance Group.

Conclusion

This change in promotership from Reliance Consumer Products Limited to Tira Beauty Limited represents a strategic realignment within the Reliance Group's corporate structure. While the immediate impact on Lotus Chocolate Company's operations may not be apparent, the backing of a strong promoter group could potentially open new avenues for growth and expansion in the competitive confectionery market.

Investors and market watchers will likely keep a close eye on any subsequent changes in strategy or operations that may follow this promoter transition.

Lotus Chocolate Company Limited has released its financial results for the first quarter, revealing a mixed performance with increased revenue but decreased profitability.

Revenue Growth

The company reported a revenue of ₹15.87 billion for Q1, marking a 12.3% increase from ₹14.13 billion in the same period last year. This growth in revenue indicates a positive trend in the company's sales and market presence.

Profit Decline

Despite the revenue growth, Lotus Chocolate experienced a significant decrease in net profit. The company's Q1 net profit stood at ₹298.66 million, down 56.5% from ₹685.84 million in the corresponding quarter of the previous year.

Financial Highlights

Here's a breakdown of the key financial metrics for Q1:

Expense Analysis

The company's total expenses for Q1 increased to ₹15,834.88 lakh, up 20.9% from ₹13,102.94 lakh in the same quarter of the previous year. This significant rise in expenses outpaced the revenue growth, contributing to the decline in profitability.

Management Changes

In a separate announcement, Lotus Chocolate's Board of Directors approved the appointment of Mr. Natarajan Mayuram Venkataraman as an Additional Director and Whole-time Director of the Company, effective July 16, for a term of 5 years. Mr. Natarajan brings extensive experience in the retail and consumer goods sectors, having previously served as Business Head for Chocolates, Biscuits & Confectionery at Reliance Consumer Products Limited.

Outlook

While Lotus Chocolate has demonstrated strong revenue growth, the substantial increase in expenses and the resulting profit decline may raise concerns among investors. The company's ability to manage costs while maintaining revenue growth will be crucial for improving profitability in the coming quarters.

The appointment of Mr. Natarajan, with his rich experience in the consumer goods sector, may bring new strategies to address these challenges and potentially drive future growth for Lotus Chocolate.

Investors and analysts will likely keep a close eye on how the company balances its growth initiatives with cost management in the upcoming quarters.