Prelude
Established in 1972, as Bhawani Textiles, Dollar Industries Limited has
gained recognition as one of India?s foremost manufacturers of innerwear. With a
diverse product portfolio that caters to the evolving requirements of men, women, and
children, the Company operates in four cutting-edge production facilities located in
Kolkata, Tiruppur, Delhi, and Ludhiana. To ensure sustained growth, we rebranded in FY
2019-20. To be future- ready, we took strategic initiatives to create transformational
changes so that Dollar could be perceived as a "Brand for All". From expanding
spinning capacity to creating Integrated Warehouses in West Bengal, Dollar has envisaged
improving capabilities for higher profitability. In seeking omni-channel growth, we
successfully forayed into the launch of 14 Exclusive Brand Outlets (EBOs) under the
Franchise-Owned Franchise Operated (FOFO) model.
Currently, Dollar has a strong presence in all Indian states and has
expanded beyond its borders, establishing itself as the most popular Indian innerwear
brand in the Middle East and UAE, among other countries.
As a responsible corporate entity, Dollar prioritises environmentally
friendly practices and renewable energy sources. In FY 2020-21, the Company constructed a
4 MW solar power plant at its Tiruppur facility, which has a power generation capacity of
75 lacs units per year and is part of the Company?s "Green Mission"
initiative and plans for another 2 MW which will generate additionally approx 30 lacs unit
per year.
Global Economic Landscape
Despite facing various obstacles such as inflation, the Russia- Ukraine
conflict and a resurgence of C0VID-19 cases in China, the global economy demonstrated
resilience and emerged stronger in FY 2022-23. The global GDP grew by 3.4% with record
high inflation levels. Central banks around the world raised policy interest rates to
combat inflation. However, economic growth picked up in the latter half of the financial
year due to lower commodity prices, strong labour markets, robust household consumption
and business investments. China?s reopening of its economy could also be attributed
as one of the primary reasons for the recovery in global economic activity.
Source: World Economic Outlook 2023, IMF httnsV/www imf org/en/
Publications/ W EO/Issues/20 23/0 4/11/wo r I d-e con omic-outlook- anril-2023
Outlook
The economic growth in FY 2023-24 will be influenced by inflation
patterns, central bank policies and the outcome of Russia?s war in Ukraine. Although
the overall inflation rate is declining, the peak of core inflation is still expected.
Developing economies are expected to lead the global GDP growth, with an anticipated
increase of 2.9% in FY 2023-24 and 3.1% in FY 2024-25. On the other hand, advanced
economies such as the US and Eurozone may experience brief recessions and a significant
slowdown. High interest rates are expected to persist due to ongoing inflationary
pressures.
Source : https://www.imf.org/en/Publications/WEQ/lssues/2023/04/ll/
world-economic-outlook-april-2023
Indian Economic Landscape
The Indian economy is expected to grow by 7% in FY 2023-24 despite
challenges like inflation and supply disruptions. The government is taking steps to manage
supply and demand, invest in infrastructure and encourage private investment to stimulate
the economy. The manufacturing and services sectors are predicted to recover, and consumer
and business confidence is expected to improve, as reflected in high PMI numbers.
The government has benefitted from high GST and direct tax collections,
giving them the resources to spend and support the economy despite a possible global
slowdown. Despite the challenging economic situation, affluent consumers continue to drive
demand, as evidenced by strong growth in the retail industry and the robust performance of
consumer staples and discretionary companies. Some sectors have also shown promising signs
of job creation and increased labour force participation, although sustained job growth is
necessary for sustainable demand growth.
The Indian government?s goal of achieving self-sufficiency, or
"Atmanirbhar," is being pursued through policies like the Emergency Credit Line
Guarantee Scheme, which has been extended until March 2023 and the Production Linked
Incentive Scheme, which has a budget of ? 8,083 Crore. These measures aim to reduce
India?s reliance on imports and support the manufacturing sector, which may benefit
from multinational companies seeking to decrease their dependence on China.
Outlook
India?s economy has demonstrated remarkable resilience in the face
of global challenges and is poised to outpace all other major economies in terms of growth
rate, solidifying its position as the world?s fastest-growing major economy. The
Ministry of Statistics and Programme Implementation predicts a 7% increase in GDP for FY
2023-24, further bolstering India?s impressive growth trajectory.
Source: Ministry of Statistics and Programme Implementation.
Indian Textile and Apparel Industry
The Indian textile industry boasts a vast and unparalleled supply of
raw materials and manufacturing capabilities across the value chain, making it one of the
largest in the world. As the sixth-largest exporter of Textiles and Apparel globally, the
industry is a crucial pillar of India?s economy. India?s textile industry is
renowned for its unique strengths in hand-woven and capital-intensive mill sectors. The
industry?s traditional sectors, including handloom, handicrafts and small-scale power
loom units, provide significant employment opportunities for millions of individuals in
rural and semi-urban areas, particularly women and the rural population. The sector aligns
well with the Indian government?s key initiatives, such as Make in India, Skill
India, Women Empowerment and Rural Youth Employment, reflecting its commitment to
inclusive and participative development. Consequently, the government?s primary focus
is on fostering the best-in-class manufacturing infrastructure, upgrading technology,
promoting innovation, enhancing skills and building on the industry?s traditional
strengths to increase textile manufacturing in India.
Source: Ministry of Textiles
India?s textile industry has a unique structure, mainly comprised
of small-scale and non-integrated spinning, weaving, finishing and apparel-making
businesses, unlike other major textile- producing countries. This industry structure is a
result of government policies that have promoted labour-intensive, small- scale operations
and favoured them over larger-scale firms.
Composite mills, which are relatively large-scale mills that integrate
spinning, weaving and sometimes fabric finishing, account for only three per cent of
output in India?s textile sector, with most of them owned by the public sector.
Spinning, the process of converting cotton or man-made fibre into yarn,
is the most consolidated and technically efficient sector in India?s textile
industry, with an average plant size remaining small and technologically outdated compared
to other major producers. The spinning sector consists of about 1,146 small-scale
independent firms and 1,599 larger-scale independent units.
Weaving and knitting, which convert yarns into woven or knitted
fabrics, are highly fragmented, small-scale and labour-intensive. This sector includes
about 3.9 million handlooms, 380,000 "power loom" enterprises that operate about
1.7 million looms and just 137,000 looms in various composite mills.
Fabric finishing, which includes dyeing, printing and other cloth
preparation before clothing manufacture, is also dominated by a large number of
independent, small-scale enterprises, with about 2,300 processors operating in India,
including about 2,100 independent units and 200 units integrated with spinning, weaving,
or knitting units.
Clothing is produced by about 77,000 small-scale units classified as
domestic manufacturers, manufacturer exporters and fabricators (subcontractors).
Indian Innerwear Industry
The innerwear market in India has undergone a significant
transformation, evolving from a category solely focused on functionality to one that
embodies fashion and style. This segment has effectively carved out a distinct space for
itself, fuelled by increasing disposable incomes, a growing interest in fashion and a
desire for comfort. As a result, innerwear has emerged as one of the rapidly
expandingfashion sectors in India.
The domestic apparel market is estimated to be worth around $65-75
billion and is expected to grow at a rate of 10% per annum, with innerwear comprising 9%
of the market and projected to grow faster than the overall apparel market. The industry
is currently dominated by unorganised players, but there is a shift towards organised
players that offer branded, stylish and comfortable innerwear.
Consumers today are seeking innerwear that not only serves a functional
purpose but also reflects their personal style and individuality. The growing preference
for branded innerwear has led the industry to move from being price sensitive to brand
sensitive, with the premium segment showing great promise in catering to changing consumer
needs.
The women?s segment, in particular, has witnessed a surge in
demand, with consumers being more open about their preferences and willing to spend on
quality innerwear. The middle-income group, which has a good amount of disposable income,
has been the driving force behind the retail revolution in India.
Indian Athleisure Industry
The pandemic-induced rise of work-from-home and heightened interest in
fitness have resulted in a surge in demand for athleisure wear. This trend is expected to
continue even after the pandemic, prompting brands to expand their presence by opening
experiential stores in 2023. These stores aim to tap into the markets of smaller, less
urbanised cities in India.
The athleisure/activewear category has become ubiquitous among apparel
and sportswear brands, with even established brands offering their line. In addition, the
pandemic has led to the emergence of numerous new brands and direct-to-consumer startups
that have leveraged online channels to drive sales.
Despite the increasing popularity of athleisure wear in the apparel
market, maintaining price competitiveness remains a challenge, particularly in the face of
inflation. The most important materials for producing athleisure wear, such asspandex,
nylon and acrylic, rely on petrochemicals and plastic derivatives, which have seen price
increases due to rising oil prices. This, in turn, affects the price of athleisure
products, with the current average price range being? 900-1,599. Although the athleisure
segment is expected to continue growing in the years to come, intense competition in the
market and low barriers to entry make it difficult for any single brand to dominate the
market.
Company Overview
What began as Bhawani Textiles in 1972 has now morphed into a brand,
"Dollar Industries Limited", that holds a considerable market share in the
branded hosiery sector of India. Dollar currently boasts a diversified product portfolio
across men, women and children. With four manufacturing facilities, Dollar plans to
establish a new spinning mill in Dindigul and a centralised warehousing facility in
Hosiery Park at Kolkata, to optimise logistics, increase the economy of scale, streamline
staff and output and enhance delivery efficiency.
Dollar unveiled a 50-year special advertising campaign featuring brand
ambassador Mr. Akshay Kumar, with whom the Company has a decade-old association. In line
with its Vision 2025, the Company has allocated ? 120 Crore for expansions and new product
launches. Furthermore, leading Bollywood actress Ms. Yami Gautam has been signed as the
Brand Ambassador for the Dollar Missy segment. This year, Dollar ventured into
women?s lingerie with a diversified range of products like Everyday Bras, T-shirt
Bra, Sports Bra, Beginners Bra, Strapless Bra, Sleep Bra & NursingBra underthe
DollarWoman category. By FY 2024-25, the Company aims to open 125 Exclusive Brand Outlets
(EBO) mostly in Tier 2 & Tier 3 cities.
The Company recently got associated with Rajasthan Royals as the
principal sponsor to enhance the brand visibility of its Athleisure range nationwide.
Dollar is also planning to further expand more markets in African countries and achieve
similar success in the Middle East.
The Company?s eco-friendly production techniques and adherence to
the latest technologies and innovations have helped it set a benchmark in the industry,
including introducing a zero-discharge technique with an evaporation system.
Performance Overview Basis of preparation
The Company had prepared its financial statements based on Indian
Accounting Standard (Ind AS). The financial statements were prepared underthe historical
cost convention on an accrual basis. Figures of the previous years were
reclassified/regrouped to confirm the presentation requirements under Ind AS and the
requirements laid down under Schedule III of the Companies Act, 2013.
Analysis of Statement of Profit and Loss
Revenue from Operation: Revenue from Operation of the Company stood at
? 1,393.80 Crore in FY2022-23, increased by 3.82% compared to ? 1,342.53 Crore in FY
2021-22 . Revenues from domestic market stood at ? 1,284.67 Crore and ? 81.86 Crore from
exports.
Operating profit: Operating profit or EBITDA decreased by 53.74% during
FY 2022-23 to Rs 103.27 Crore from Rs 223.24 Crore in FY 2021-22 .
Depreciation: Depreciation for the year under review stood at Rs 17.64
Crore as compared to Rs 16.58 Crore in FY 2021-22 increase by 6.39%.
Finance costs: Finance costs for the year under review remained at Rs
14.22 Crore compared to Rs 9.62 Crore in FY 2021-22.
Other Income: Other Income for the year under review stood at Rs 4.72
Crore as against Rs 6.53 Crore in FY 2021-22.
Net profit: Net profit for the year under review stood at Rs 58.24
crore compared to Rs 145.87 Crore in FY 2021-22.
Analysis of Balance Sheet
Networth:The net worth of the Company stood atRs 717.70 crore as on
March 31, 2023, compared to Rs 675.82 crore as on March 31, 2022. The net worth comprised
of paid-up equity share capital amounting to Rs 11.34 crore as on March 31, 2023 (5.67
crore equity shares of Rs 2.00, each fully paid up). The Company?s Other Equity for
the year stood at Rs 706.36 crore.
Loan profile: The total debt of the Company stood at Rs 161.62 crore,
out of which the Company has Rs 0.87 crore payable in the current financial year. The
working capital borrowings of the Company stood at Rs 160.60 crore outstanding in the cash
credit accounts.
Total assets: Total assets of the Company stood at Rs 1,079.27 crore in
FY 2022-23 compared with Rs 1,115.64 crore in FY 2021-22, a decrease of 3.26%.
Inventories: Inventories decreased by 25.85% to ? 352.36 Crore during
the year under review from ? 475.21 Crore in FY 2021-22 . Inventories comprised of raw
materials worth ? 50.19 Crore and finished goods and work-in-progress worth ? 302.17
Crore.
Total loans and deposits: Total loans and deposits amounted toRs 3.64
crore.
Current liabilities: Current liabilities stood at ? 343.05 crore,
comprising of short-term borrowings of ? 161.47 crore and trade payables of ? 136.86
crore.
Category-wise revenue contribution
| Dollar Man |
41.7% |
| Dollar Women |
9.3% |
| Dollar Junior |
0.3% |
| Dollar Thermal |
5.4% |
| Dollar Always |
39.8% |
| Force Gowear |
0.3% |
| Force NXT |
3.2% |
Strengths
Strong brand presence has been in operation for several decades
Diverse range of products, including innerwear and outerwear catering
to different consumer segments
Extensive distribution network across India, enabling it to reach a
large customer base and ensuring wide market coverage
Own manufacturing facilities, which provide greater control over
production processes and quality
Weaknesses
Over-dependence on a single market exposes it to risks associated with
market fluctuations and economic conditions
Limited exposure in international markets, which restricts its ability
to tap into global growth opportunities and diversify its revenue streams
Opportunities
A shift towards branded products presents an opportunity to capitalise
on the increasing consumer preference for branded innerwear and outerwear.
Explore diversification into new product categories or introduce
innovative products to cater to emerging consumer trends and preferences
Rapid growth of e-commerce in India provides an opportunity to enhance
its online presence, reach a wider customer base, and tap into the convenience and
accessibility offered by online platforms
Threats
Highly competitive, with the presence of both domestic and
international players, established brands as well as emerging players
Indian market is known for its price-sensitive consumers, and it needs
to manage its pricingstrategies effectively to remain competitive while maintaining
profitability
Fluctuations in the prices of raw materials, such as cotton and
synthetic fibres, can impact its profitability and operational costs
Evolving consumer preferences and fashion trends pose a threat and it
needs to continually adapt and innovate to stay relevant and meet changing consumer
demands
Enterprise risk management
We strongly believe that every business entails risks, which can vary
in terms of their impact, likelihood of occurrence and speed of onset. These risks are
constantly evolving and changing, and we consistently monitor the external environment to
identify potential risks and evaluate their potential impact on our objectives. Our
primary focus is to manage and mitigate these risks to acceptable levels. To achieve this,
we rely on the guidance of the Board?s Risk Management Committee, which oversees our
enterprise-wide risk management initiatives. We strive to leverage our resources to
convert opportunities into tangible outcomes.
| Risk |
Mitigation Approach |
| Safety Risk: The Company acknowledges the potential safety
hazards posed by our manufacturing operations, including the risk of injury to employees
who interact with plant machinery and material handling equipment. |
The Company has developed and implemented an extensive safety
policy that is strictly followed. We conduct regular employee training and third-party
inspections to minimise risks associated with machinery and equipment. With expert inputs,
we have designed our plants to minimise human interaction with machinery. Additionally, we
have adopted a behaviour-based safety approach at our plants, and all safety incidents,
including unsafe acts, are reported and reviewed by our management team. These measures
are aimed at mitigating safety risks and ensuring compliance with established safety
standards. |
| Sustainability risk: The Companys manufacturing operations
involve environmental risks that can impact the ecosystem. Water usage, energy consumption
and hazardous waste generation are among the main concerns. |
The Company has taken various measures. We prioritise water
conservation and replenishment, and we have invested in solar power plants and wind energy
to reduce our power consumption. Furthermore, we have established an effluent treatment
plant with zero liquid discharge. These initiatives are part of our ongoing efforts to
promote sustainability and minimise our environmental footprint. |
| Statutory compliance risk: The Company is exposed to the risk
of non-compliance with the rapidly changing laws and regulations, some of which are
untested and subject to interpretation. |
The Company has a well-established mechanism in place. It
monitors changes in laws and regulations through corporate professionals and takes all
necessary steps to ensure compliance with the applicable laws and regulations. The Company
is committed to adhering to all laws and regulations in their true spirit. |
| Information Security Risk: The Company faces the risk of
information security breaches, including cyber attacks and internal data leakage, which
can have a significant impact on our business operations. |
The Company has implemented strict information security
protocols, including active monitoring of security logs to detect and prevent any hacking
attempts. We also ensure that data is properly protected during all stages of its life
cycle, from creation to storage, transit and retrieval. |
| Demand and Supply risk: The demand and supply landscape of
our industry is constantly evolving, driven by changing customer preferences and economic
factors. As a result, there is always a risk of demand fluctuations and supply chain
disruptions, which can impact our business operations and financial performance. |
The Company has a diversified product portfolio that caters
to different customer segments and lifestyles. We also maintain a flexible supply chain
network that allows us to quickly adapt to changes in demand and supply. Additionally, we
continuously monitor market trends and customer feedback to identify emerging
opportunities and risks and take proactive steps to address them. |
| Procurement risk: The shortage of cotton yarn in the domestic
market has led to increased prices of Indian innerwear and knitwear products, posing a
challenge to our procurement operations. |
The Company has established strong relationships with
multiple suppliers over time, allowing us to diversify our sources of raw materials. In
addition, we implement strict quality controls and regularly monitor the quality of the
raw materials we receive to ensure thatthey meet our standards. |
| Human capital risk: Non-availability of a competent
workforce, high attrition rates and retention challenges can pose significant human
capital risks for companies. Moreover, a high attrition rate can lead to the loss of
institutional knowledge and expertise, which can be difficult to replace. The cost of
recruiting and training new employees can also add up quickly and impact the Companys
bottom line. |
The Company mitigates this risk by taking active steps to
understand employees needs and aspirations, creating sustainable value for them and
deploying resources judiciously through scenario planning and risk-reward analysis. The
Company also focuses on employee engagementto ensure a positive work environment and
encourage retention. |
| Currency risk: There is a risk of adverse impact on the
financials of the Company due to fluctuations in the exchange rate of the local currency
againstthe US dollar, as a portion of our raw materials are imported and we export in
multiple countries. |
The Company continuously monitor the exchange rate movements
and takes appropriate steps to hedge some of the open risks, if any. We also strive to
procure raw materials from local sources whenever possible to reduce our dependence on
imports and minimise currency-related risks. Additionally, we explore opportunities to
enter into long-term contracts with our suppliers and customers, which can help stabilise
cash flows and reduce the impact of currency fluctuations. |
| Geographical risk: Over-dependence on a single geographic
location poses a potential threat to revenue if the economy of that region experiences a
downturn. |
The Company has a diversified presence in multiple regions
and markets, both domestically and internationally. We have expanded our reach to other
countries, includingthe Middle East, and have established a strong foothold there. This
enables us to mitigate the potential impact of any economic setbacks in a particular
location by balancing our revenue streams across different regions. Additionally, we
continuously monitor market trends and consumer preferences to identify opportunities for
further expansion and diversification, ensuring a more robust and resilient business
model. |
Human resources
Throughout the financial year, the organisation prioritised attracting
and retaining top talent through various engagement initiatives. One of these initiatives
included reinforcing the culture of structured interviewing based on competencies, which
helped to build a talent pipeline that aligns with the organisation?s values.
Furthermore, significant investments were made in talent development and safety measures
with a focus on competency-based learningjourneys and organisational values. The
leadership competency framework has been integrated with HR processes such as recruitment
and performance reviews while functional competency frameworks have been developed for
different functions to drive excellence in each area. The organisation also conducted
programmes and conversations around safety, health and the internal network of women, with
a detailed study on the challenges of women in sales to create a more inclusive workplace.
As on March 31, 2023, the organisation had a total workforce of 2,323 employees,
consisting of 1680 male and 643 female employees and no differentially-abled employee/s.
Corporate social responsibility
Right from the beginning, we have strived to align our business vision
with social responsibility by delivering economic, social and environmental benefits to
all our stakeholders, especially marginalised communities. As part of our Corporate Social
Responsibility (CSR) initiatives, we have invested Rs 263 lacs, with a predominant focus
on education and health care among others.
Internal control systems and their adequacy
The Company has established effective internal control systems for
financial reporting that are appropriate for its size and industry sectors. The Company
has established internal control policies and procedures that are deemed appropriate to
provide a reasonable level of assurance in achieving the following objectives:
¦ The Company strives to ensure that its operations are both
effective and efficient.
¦ The Company places great emphasis on the reliability of its
financial reporting.
¦ The Company is committed to complying with all relevant laws
and regulations.
¦ The Company has measures in place to prevent and detect
fraudulent activity and errors.
¦ Safeguarding its assets is a top priority for the Company.
These systems ensure efficiency and productivity at all levels while
safeguarding the Company?s assets. The Company has implemented strict procedures to
ensure accurate recording and consistent financial and operational support. The internal
team and Audit Committee closely monitor business operations and immediately notifies the
Board in case of any discrepancies. In order to ensure continuous growth, the Company
identifies and assesses risks and develops mitigation strategies based on these findings.
Cautionary statement
Certain statements in this report describing the Company?s
objectives, projections, estimates, expectations, or predictions may be forward-looking
statements within the meaning of applicable securities, laws and regulations. Although the
expectations are based on reasonable assumptions, the actual results could materially
differ from those expressed or implied.
|
For Dollar Industries Limited |
|
|
Sd/- |
Sd/- |
|
Vinod Kumar Gupta |
Krishan Kumar Gupta |
| Place: Kolkata |
Managing Director |
Whole-Time Director |
| Date: May 30, 2023 |
DIN: 00877949 |
DIN: 01982914 |
+91-9892691696
