pds multinational fashions ltd share price Management discussions


1. Economic Overview

1.1 Global economy

The global economy weathered the impact of sustained inflationary pressure and the geopolitical conflict in Europe. While economic activity continued to be weighed down by interest rate hikes by Central Banks and the impact of the geopolitical crisis in Europe, pent-up demand in numerous economies is expected to usher in a faster-than-expected recovery. Moreover, inflation is also anticipated to decline from 8.7% in CY 2021-22 to 7% in CY 2022-23 1. Moving ahead, emerging and developing economies are likely to contribute towards accelerated global economic growth.

As per International Monetary Fund projections, India and China are expected to contribute more than half of global growth in the calendar year (CY) 2022-23. Emerging Markets and Developing Economies (EMDEs) are likely to expand by 5.3% in CY 2022-23, emphasising the fact that the economic headwinds faced by the Asia Pacific region have begun to fade. Central Banks around the world are also monitoring liquidity positions closely and aiming to boost sentiment.

The future of the global economy, however, is critically dependent on the proper calibration of monetary policy, the course of the war in Ukraine and the impact of pandemic related supply-side shocks. Reduction in fuel and energy prices, particularly in the United States, Euro area, and Latin America, has helped to rein in global headline inflation. It has also helped to improve consumer sentiments.

India and China are expected to contribute more than half of global growth in CY 2022-23, according to the International Monetary Fund.

GROWTH PROJECTIONS BY REGION

Global Growth

Real GDP growth, percent

United States of America

Europe

Middle East & Central Asia

2022 2022 2.1 2022 3.5 2022 5.3
3.4
2023 2.8 2023 1.6 2023 0.8 2023 2.9
2024 3.0 2024 1.1 2024 1.4 2024 3.5

 

Emerging & Developing Asia

Latin America & the Caribbean

Sub-Saharan Africa

2022 4.4 2022 4.0 2022 3.9
2023 5.3 2023 1.6 2023 3.6
2024 5.1 2024 2.2 2024 4.2

Source: IMF World Economic Outlook , April 2023.

1.2 Domestic economy

The Indian economy demonstrated phenomenal resilience in the face of global economic challenges in FY 2022-23. On the back of robust domestic demand and upbeat investment activity, a broad-based expansion of 9.7% was witnessed by the Indian economy between April and September 2022.

The government and the Reserve Bank of Indias emphasis on prudent fiscal and monetary policies, proactive vaccination coverage for Covid-19 and sustained capital expenditure restored momentum in the Indian economy. Inflation, however, continues to be a major concern for India. The RBI has projected headline inflation at 6.8% in the financial year (FY) 2022-23, but it is not high enough to deter private consumption.

Despite inflationary pressures, the Indian economy is well on track to touch 7% GDP growth in FY 2022-23. The indices of manufacturing activity such as the PMI-manufacturing, the Index of Industrial Production and the Index of Core Industries (ICI) indicate positive growth of manufacturing activity. Alongside, sustained expansion of indicators of the services sector (UPI transactions, high credit demand) also demonstrate a positive shift.

Overall, demand in India continues to favour economic activity and early signals of private investment recovery point towards a stronger investment upcycle, both in the services and manufacturing sectors. Leveraging the gains of the first half of the year, a gradual upswing in economic activity is expected to impart macroeconomic stability in the days ahead. 2

Key schemes and programmes 3

The Ministry of Textiles has undertaken several initiatives to support the textile industry in India and strengthen its position in the global market. While initiatives such as Silk Samagra, Powertex India, and Samarth are focused on empowering economically disadvantaged people and improving infrastructure, plans to encourage sustainable fashion and promote advanced manufacturing facilities within India are also underway.

• Incubation centres for apparel manufacturing: The objective of this scheme is to create an integrated workspace and linkages-based entrepreneurial ecosystem for start-ups that is operationally and financially viable and increases the chance of success of start-ups and decreases the time and costs required to establish and grow a new business.

• Production linked incentive (PLI) scheme— The PLI scheme for Textiles aims to promote indigenous manufacturing of MMF garments, MMF fabrics and technological textile goods. It is expected to create 60-70 global players, attract new investment of around H19,000cr and generate almost 7.5 lakh new employment opportunities.

• PM-Mega Integrated Textiles and Apparel Park (PM MITRA)— It entails the establishment of 7 PM Mega Integrated Textile Regions and Apparel (PM MITRA) parks in greenfield and brownfield areas with world class infrastructure, including plug-and-play facility, with an outlay of H4,445cr over a period of seven years, up to FY 2027-28. It aims to attract investment for ‘Make in India initiatives and enhance employment generation.

• Capacity building scheme (SAMARTH) for textile industry— The scheme aimed to address the need for skilled labour across the textile sector. As a part of the ‘Skill India initiative and in compliance with the skilling programmes of the Ministry of Skill Development and Entrepreneurship, the programme is expected to be implemented by March 2024.

• National Technical Textiles Mission— The National Technical Textiles Mission has been approved with the purpose of bolstering technical textiles in India. With a project outlay of H1,480cr, it is anticipated to create a steady ground for this futuristic and niche textile segment.

2. Industry overview

2.1 Fashion industry 4

The fashion industry witnessed robust demand and consistent profitability in the first half of CY 2021-22, registering strong revenue growth of 13%. The industry is expected to be valued at US$106bn by 2026, as per recent estimates. Non-luxury fashion also saw 11% top-line growth in the first half of CY 2021-22 compared to the same period in CY 2020-21.

The industry, however, had to grapple with global headwinds in the form of rising geopolitical tension, persistently high commodity prices, and deteriorating consumer sentiment.

Notwithstanding the global economic crisis, a large portion of the industry is approaching this difficult phase on a sound footing, having made significant progress in CY 2020-21 and the first half of CY 2020-22. According to McKinsey Fashion Growth Predictions, 2023, luxury sales are expected to increase by 5 to 10% in CY 2022-23, while the rest of the sector is expected to grow by a negative 2 to positive 3%. Nonetheless, the intellectual frameworks that formerly differentiated the fashion business are expected to reappear.

Owing to persistent inflationary pressure, consumer spending on non-essential items is expected to remain weak, particularly for non-essential and luxury goods. The preference for affordable yet trendy and fashionable ranges is expected to increase in comparison to luxury and premium varieties.

In order to adapt to changing consumer behaviour and manage inflation, apparel brands and retailers may need to implement various strategies. This includes restructuring their pricing, collections, and supply chain to reach a larger audience. An important aspect of this transformation will be the utilisation of digital marketing, which will play a significant role in creating brand awareness and fostering stronger connections with the target audience.

Looking specifically at the fashion industry in the Middle East, it is expected to experience substantial growth. The Gulf Cooperation Council is projected to report a growth of US$11bn in CY 2022-23. The fashion market in North America and Asia-Pacific regions are anticipated to experience a steady growth rate, thereby indicating a favourable market condition and expansion possibilities.

Opportunities

The fashion industry has historically demonstrated tremendous resilience and adaptability. Over the years, industry players have successfully navigated challenges and emerged stronger with new and innovative methods of winning over consumer loyalty. Innovation in areas such as sustainable fashion and digitalisation initiatives will be key to driving growth and profitability in the long run.

• Sustainability—With new environmental regulations and growing consumer awareness about the fashion industrys impact on the climate crisis, there is a pressing need for Incorporating sustainable practices in our operations. Recognising this need, a large number of players in the Indian fashion industry have responded by developing sustainable fashion lines. This shift towards sustainability is not only promoting environmental responsibility but also driving up the demand for products that align with these values. By embracing sustainability and promoting sustainable offerings, Indian fashion brands have the opportunity to tap into this growing market and establish themselves as leaders in eco-friendly fashion.

• Gen-Z propelling gender-fluid fashion - The rise of gender-fluid fashion presents a significant opportunity for the fashion industry to tap into changing consumer attitudes, driven by the influential Gen-Z demographic. Brands and retailers are poised to seize the opportunity to embrace inclusive product design and marketing strategies that cater to a diverse range of identities. Embracing gender fluidity will enable brands to stay relevant and resonate with the evolving values of todays consumers.

• Agility — The progress in technology, enhanced infrastructure, and a versatile workforce possessing diverse skillsets have facilitated the fashion industry in promptly adapting to the dynamic fashion market and the ever-evolving preferences of customers. These advancements have also alleviated the challenges within the supply chain, resulting in expanded market access and consistent growth.

• Product innovation and customer experience — Companies must prioritise the development of new and innovative products that have the potential to introduce new fashion trends and receive positive consumer feedback.

• Customisation and personalisation: Personalised fashion experiences are in high demand as consumers seek unique products. Technologies like 3D printing and on-demand manufacturing offer customisable clothing and accessories. Also, data analytics can provide valuable insights into consumer preferences, enabling brands to offer personalised recommendations. By embracing these trends, the fashion industry can create a more engaging and tailored shopping experience, leading to increased customer satisfaction and brand loyalty.

Challenges

• Inflation and economic downturn —The fashion industry faces challenges stemming from inflation and economic downturns. These factors potentially dampen discretionary spending, impacting consumer behaviour and affecting the industrys performance. Adapting to the changing economic landscape becomes crucial for sustained growth and success in such uncertain times.

• Margins and profitability—Price and marketing play a strategic role driving margins and profitability in the fashion industry which drives margins , The industry is grappling with the impact of escalating commodity and energy prices, which are projected to drive up operational costs and subsequently reduce profit margins.

• Interest rate variations - Interest rate fluctuations not only impact the cost of capital but also increase financing expenses for inventory. During the year, these fluctuations affected exchange rates, international trade and investment decisions worldwide.

• Declining consumer demand –Increasing commodity inflation influences consumer spending patterns, leading to a shift towards prioritising essential goods over fashion purchases. Navigating this landscape requires strategic adaptations to cater to evolving consumer preferences and maintain market relevance.

2.2 Growth drivers

Along with emerging fashion trends and changes in consumer behaviour, the demands of new-age consumers continue to influence the industry. Major industry players with a strong brand recognition, diversified distribution channels, and a digital presence have been more resilient during the pandemic. Online sales have also surged during the post-pandemic period, and companies that have expanded their presence to e-commerce platforms have been able to efficiently mitigate the impact of store closures.

Two-track spending

Income levels often influence shopping preferences. While lower-income buyers are expected to limit discretionary spending, people with more income and access to savings, credit and a secure job are likely to spend more on fashion choices.

Therefore, companies must explore innovative business models such as resale, rental, and repairing of old clothes and accessories to make fashion affordable as well as sustainable.

Adapting to emerging fashion trends

With continuous evolution of fashion trends, clothing styles have changed and dress codes for various occasions continue to be altered. Moreover, the fine line between formal and casual wear is also fading. This has resulted in the introduction of a wide variety of semi-formal and casual clothing lines that can used for various occasions. Similarly, ensemble pieces that can be purchased or rented for special events are also being made available by leading fashion houses.

Diversified marketing strategies

Profitability through the online DTC channel is decelerating as a result of rising cost of digital marketing. Thus, brands are diversifying marketing strategies to include wholesale and third-party marketplaces that drive significant growth. Brands are also strengthening their creative capabilities to reach a larger audience with significant allocation of marketing budgets for retail channels.

Development of new supply chains

To future-proof businesses, manufacturers are adapting to the demands of fashion brands and offering shorter lead times to process orders faster and minimise logistical setbacks. New supply chain models based on vertical integration, nearshoring, small-batch production, and on-demand systems are being efficiently integrated into operational processes due to rapid adoption of digitisation across supply chains. These changes have augured well for the fashion industry as a whole.

Customer centric operations

The fashion industry operates in a fast-paced environment where trends change at a rapid pace. The ability to introduce products to the market on time is essential to stay ahead of competition and drive sustainable growth. Therefore, an emphasis on customer-centric products is allowing retailers as well as fashion houses to constantly meet the evolving requirements of consumers.

Ideal grounds for apparel production

At present, China, Bangladesh, Vietnam and India are the key apparel manufacturing and export hubs. The Asian countries enjoy a definitive advantage in garment production and exports due to the availability of a low-cost and skilled workforce 5. In addition, the huge availability of raw materials in these countries reduces logistics costs for procurement and helps to keep the overall production cost in check, thereby creating an opportune landscape for the growth of the fashion industry.

2.3 Outlook

The fashion and apparel industry has always been dynamic, with new trends and styles emerging every season. In the past few years, the industry has faced many challenges, including concerns about sustainability, shifting consumer preferences, and the rise of e-commerce.

However, despite uncertainties, the global fashion industry is expected to witness a positive trajectory in CY 2022-23. Rising demand from emerging markets, increased consumer spending on fashion, and the expansion of online retail channels are driving this growth.

The fashion industry is expected to maintain its focus on sustainability and ethical practices, with many businesses implementing sustainable and circular business practices. Consumers are becoming more conscious of the environmental impact of their actions and strive to embrace brands that prioritise sustainability.

Furthermore, the industry is likely to witness more usage of technology such as 3D printing, augmented reality and virtual try-on tools to improve customer experience and streamline the supply chain.

2.4 Apparel market overview

The global apparel market expanded at a compound annual growth rate (CAGR) of 7.0% between 2022 and 2023, from US$ 610 bn to US$ 653 bn. Global uncertainty has stifled growth, resulting in rising commodity prices, decreased consumer demand, and supply chain disruptions. But, the popularity of online shopping is likely to help the garment manufacturing sector.

E-commerce portals have increased the sale of traditional garments by providing greater exposure to manufacturers and buyers who were previously restricted to certain geographic areas. To increase efficiency and lower operating costs, apparel manufacturers are also investing in computer-controlled embroidery systems.

The apparel market is anticipated to expand at a 6.2% CAGR to US$830.69bn by 20276. Global apparel retail industry is expected to increase at 7% CAGR in the period between 2020 and 2025 with China and USA continuing to be the largest markets in terms of the sales forecast.

India is likely to witness a sharp rise in the trade of readymade garments (RMG). During FY 2022-23, Indias share of the global RMG market has been moderate. Improvement in inventory levels and controlled inflation resulted in gradual improvement of RMG exports during the last quarter of FY 2022-23.

Besides, trade agreements with United Kingdom, other countries in the European Union and Canada are expected to drive robust growth, leading to an increase in Indias stake in the global RMG trade.

Volatility in Cotton Consumption & Production

Recent years have witnessed volatility in the consumption and production of cotton. In FY 2022-23, while consumption and production are estimated to decrease, however, the decrease in consumption is expected to be higher than production. Global cotton prices are currently trading at a four-month low mainly due to weak demand. The outlook for global cotton prices continues to remain uncertain for the financial year 2023-24. Further, a decrease in the planted acreage is anticipated due to high input costs and competition from other crops globally.

Macro factors also have a bearing on the outlook for cotton prices. With the trajectory of the global economy looming and the weather also proven to be volatile in recent years, amongst other factors are impacting cotton prices.

Month wise cotton price fluctuation in India during FY 2022-23

Growth drivers for apparel market in India

The governments focus on creating a conducive environment for trade and investments augur well for the fashion industry and the textile industry as a whole. The Performance Linked Incentive (PLI) scheme helps to build a robust ecosystem for MMSF (man-made staple fibre).

Indias position as a key cotton supplier benefits domestic RMG manufacturers.

Government schemes continue to incentivise companies to increase their manufacturing capacity.

3. Business overview

PDS Limited is one of Indias largest multinational apparel companies with global business operations. The Company operates through a unique asset-light platform built to achieve growth and scalability. The Company provides customised end-to-end solutions to global brands and retailers offering value-added services such as in-house product development, design, and sampling, along with quality assurance, compliance, and supply chain management.

PDS has a worldwide presence with over 60+ offices in 22 countries. It has a large network of factories which ship almost 1mn garments each day. With 600+ partner factories and 250+ designers, the Company serves as a sourcing, manufacturing and supply chain platform with a strong focus on delivering sustainable products and technologies to customers.

3.2 Business divisions

3.2.1 Sourcing

As a global fashion infrastructure company, PDS distinguishes itself from other suppliers and sourcing firms by offering a sustainable approach that improves efficiency and ensures cost saving for retailers and brands. The sourcing business of PDS contributes to 96% of the total revenue generated.

The sourcing division is at the forefront of the fashion industrys transformative journey, while embracing changing consumer preferences and the growing demand for sustainability. The Company is committed to managing the entire supply chain in an eco-conscious manner. A team of dedicated designers, located across vibrant cities like London, Hong Kong, New York, Barcelona, Dusseldorf, New Delhi, Shanghai, Colombo, Santiago, and Brussels, bring their expertise to in-house product development and design, ensuring that every creation reflects the essence of the respective brands brand.

The sourcing segment of the Company generated a total revenue of H10,105cr, a growth of 19% as compared to the previous year and EBIDTA Margin of 4%.

The return on capital employed (ROCE) for the sourcing segment reached an impressive 48%. Around 18 months ago, PDS successfully introduced a new offering known as Sourcing as a Service, which received strong market acceptance. Through strategic partnerships with renowned global brands and retailers, the Company garnered contracts of merchandise valued at $1bn on an annual basis.

3.2.2 Manufacturing

The Companys production facilities, boasting LEED Gold certifications, stand as a testament to its unwavering dedication to operational excellence and environmental stewardship. With dedicated capacities and long-term commitments, PDS ensures a seamless and efficient manufacturing process, providing clients with the quality and reliability they deserve.

The segment has contributed to 7% of the Companys total revenue and has also achieved a full year of profitability. With a harmonious blend of cutting-edge technology, commitment to the environment, and financial success, PDS manufacturing facilities continue to play a pivotal role in the Companys overall success.

The manufacturing segment displayed impressive growth, achieving a revenue of H703cr, which represented an increase of 28% compared to the previous fiscal years revenue of H547cr. The manufacturing segment also exhibited an EBIT of H30cr as compared to a loss of H15cr in the previous year with margins moving from -2.7% to 4.2% in FY 2022-23. This further emphasises the ability to generate profit while effectively managing costs and operations.

3.2.3 PDS Ventures and Others

PDS ventures advocates our strong belief in the power of innovation and using technology to achieve a strategic alignment in fashion, technology and sustainability. We make early-stage investments directly and through collaborations in initiatives that aim to create a sustainable value chain for the fashion industry. With a portfolio of investments in ventures that promote sustainable technologies, circular economy, carbon neutrality, waste and water management. With the help of these investements PDS is collaborating with its customers and suppliers. With a portfolio of investments that promote sustainable technologies, circular economy, carbon neutrality, waste and water management,

3.3 Business performance

3.3.1 Operational highlights

Launch of in-house wash plant in Bangladesh facility, with funding from Netherlands based Good Fashion Fund

Launch of centralised cutting plant in Sri-Lanka to increase efficiency and productivity of facility.

Manufacturing segment reported the first full year of profitability

Inked a license agreement with Authentic Brands Group (ABG) for Forever 21

Acquired 51% stake in DBS Lifestyle, a design and sourcing business in India

Acquired 100% stake in Sunny Up, a licensing business based in UK, having exclusive Eurpoean license for Stan Ray and other distribution rights.

3.3.2 Financial Highlights The company demonstrated strong and resilient growth of 20% as compared to the last financial year. Revenue from operations increased from H8,828crs FY 2021-22 to H10,577cr for the year ended 31st March 2023.

EBITDA witnessed substantial growth, rising by 40% to H459crs from H327crs in FY 2021-22.

Profit After Tax (PAT) stood at H327crs, demonstrating a 12% growth compared to H293crs in FY 2021-22.

As a result of continuous monitoring and efficient management of inventory and receivables the Company was able to operate with a working capital day of negative 2 days during the financial year.

Basic earnings per share stood at H20.30 in FY

2022-23 as against H19.08 in FY 2021-22

The Board of Directors proposed a dividend of 255% amounting to H5.10 per share, of which H2.50 per share was paid as an interim dividend.

Consolidated financial review

Particulars FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23
Revenue from operations 6,486 6,648 6,213 8,828 10,577
Other income 16 27 37 86 52
Total income 6,502 6,675 6,250 8,914 10,629
EBITDA 112 186 230 327 459
EBITDA Margin (%) 1.7% 2.8% 3.7% 3.7% 4.3%
Profit before tax 69 91 174 310 357
Profit after tax 69 81 148 293 327
Profit after tax margin (%) 1.1% 1.2% 2.4% 3.3% 3.1%
Earnings per share (H)* 3.37 3.53 6.47 19.08 20.30
Cash flow from operations 213 281 379 407 510
Return on net worth (%) 13.8% 13.3% 20.7% 31.3% 29.4%

* Note: Number of shares has been adjusted to give the impact of the stock split during the year

• Revenue from operations increased by 20% with a gross margin of 16.7%, an expansion of 53 bps compared to FY 2021-22.

• Other Income decreased by H34crs from 86 crs in FY 2021-22 to H52crs in FY 2022-23. The overall decrease is mainly due to onetime income items like scrap sales, revenue writebacks, higher gain on sale of real estate, etc, accounted for the last year.

• The companys EBITDA stood at H459crs demonstrating a 40% growth with an expansion in margins by 64 basis points from 3.7% in FY 2021-22 to 4.3% in FY 2022-23. This was largely driven by the expansion in gross margins and our manufacturing divisions increase in profitability.

• Finance cost increased from H33crs in FY 2021-22 to H74crs in the current year, this was mainly attributed to the increase in the base interest rates, which have almost doubled as compared to FY 2021-22.

• Profit before tax increased by 15% from H310crs in FY 2021-22 to H357crs in FY 2022-23. Profit after tax increased by 12% from H293cr in FY 2021-22 to H327cr in FY 2022-23. Net profit margin decreased by 23 basis points from 3.3% in FY 2021-22 to 3.1% in FY 2022-23.

Key financial ratios

Sr. No. Particulars FY2021-22 FY 2022-23 Change
1 Interest coverage ratioa 10.52x 5.81x -4.71x
2 Current ratio 1.11x 1.18x 0.06x
3 Debt equity ratiob 0.67x 0.54x -0.13x
4 Operating profit margin (%)c 3.9% 4.1% 0.2%
5 Net profit margin (%)d 3.3% 3.1% -0.2%
6 Return on net worth (%) 31.3% 29.4% -1.9%
7 Debtors turnover ratio 6.21x 10.81x 4.60x
8 Inventory turnover ratio 24.23x 34.43x 10.20x
9 Return on capital employed (%)e 38.4% 43.7% 5.4%

a) Interest coverage ratio is calculated as Earnings Before Interest, and Tax (including other income) over Interest. The change is attributable to 25% increase in Earnings Before Interest, and Tax vs. 127% increase in Interest expense mainly due to disproportionate increase in interest cost.

b) Debt equity ratio is calculated as total borrowings over total equity (including non-controlling Interest) of the Company. The change is attributable to a decrease in Total Debt and an increase in Total Equity due to higher profitability.

c) Debtors turnover ratio is calculated as total sales over trade receivables. The change is attributable mainly due to a reduction in trade receivables as a result of improved collections and enhanced factoring limits availed by the company.

d) Inventory turnover ratio is calculated as cost of goods sold (COGS) over inventory. The change is attributable to a 19% increase in COGS vs 16% reduction in inventory levels.

e) Return on capital employed is calculated as Earnings Before Interest and Tax (EBIT) over Total Equity plus Net Debt. Return on capital employed increased by 5.4% from 38% in FY 2021-22 to 44% in FY 2022-23, due to 25% increase in EBIT vs 10% increase in capital employed.

4. Outlook

The Company envisions a positive outlook for its future, aspiring to double its business within the next three to five years. This growth ambition is supported by the Companys asset-light platform, which has enabled it to navigate the challenges faced by the global fashion industry successfully.

While expanding its customer network, the Company is also actively expanding its vendor network in regions strategic to the fashion supply chain. The focus is on establishing long-term strategic partnerships that offer enhanced visibility into the business and drive a consistent stream of revenue. This enables the Company to transition from transactional orders to value-accretive businesses, ultimately driving higher margins and improved return ratios in the long term.

Adapting to the dynamic economic and fashion landscape, the Company continues to evolve and build resilience against market upheavals. While acknowledging the near-term challenges that may impact growth, the Company anticipates a positive outlook. As a global platform, we remain dedicated to strengthening our capabilities, with the goal of surpassing a $2.5bn in revenue topline in the coming years, accompanied by a gradual increase in profitability.

5. Human resource management

PDS has a workforce of 3,982 employees, 6,151 factory associates spread across its global production facilities and offices. The Company has demonstrated phenomenal growth over the years by emphasising on leadership and employee engagement.

With people from diverse geographic backgrounds including 25+ nationalities of which ~58% are women the company strives to build an inclusive culture that respects diversity and varied perspectives.

PDS Limited (India) and Norlanka Manufacturing (Sri Lanka) has been certified as a ‘Great Place to Work organisation by GPTW. The global firm, has also certified PDS as a ‘Gold Standard Company for being an equal opportunity employer.

10,133+

Number of employees and factory associates

58%

Female Employees and workers

25+

Nationalities

[For more information, refer page 36 of annual report]

6. Technology and infrastructure

PDS strongly believes that technology and digitization has enabled the fashion industry around the world cater to the fast-evolving trends and preferences of consumers. With our keen design sense, extensive industry experience and adoption of the latest techniques and technologies, PDS is enabling the fashion industry around the world cater to the fast-evolving fashion landscape. PDS has a an experienced team of professionals who have built and continue to strengthen its information technology infrastructure without any disruption or security threats. The Company leverages cutting-edge technology in its operations to stay ahead of competition.

[For more information, refer page 28 of annual report]

7. Risk management framework

The Company has implemented a well-defined risk management framework to identify risks, assess threats, and devise appropriate mitigation measures to shield against both internal and external risks. To ensure the frameworks successful implementation, senior management individuals are designated to lead the risk management committee, thus integrating risk management seamlessly into the Companys processes. This active involvement of senior management enables thorough review and continous monitoring of risks in a constructive manner, fostering a culture of proactive risk management throughout the entire organisation.

8. Internal audit and controls

The Company has a strong system of internal controls in place to ensure the dependability of financial and other information and records used in the preparation of financial statements and other data, as well as asset accountability.

This internal control system is supplemented by a thorough initiative of internal audits, senior management reviews, and documented policies, guidelines, and procedures. The findings of internal audits are critical inputs for risk identification and assessment.

In addition, business risks are assessed on a regular basis in order to identify significant risks to the achievement of our business objectives.

Disclaimer

Statements in this management discussion and analysis that describe the Companys objectives, projections, estimates, and expectations are considered ‘forward-looking statements under applicable laws and regulations. Actual results may differ significantly or materially from those stated or implied. Important developments that could have an impact on the Companys operations include, among other things, competition, employee costs, and significant changes in Indias political and economic environment, environmental standards, tax laws, litigation, and labour relations.