Page FY23 AR notes:

KPI:

• E-commerce business experienced significant growth
• Short-term goal is to reach a billion dollars in revenue
• In the long run, we aspire to maintain our position as the undisputed leader in the Premium Segment in terms of revenue, profitability, and brand strength in Innerwear, Athleisure, and Accessories across Men, Women, and Kids.
• Product premiumisation and innovation like the 1-mile-wear in athleisure, and cracking the code for women’s innerwear, especially bras, has given the Company a headroom for growth
• The Company faced very high inflationary trends impacting nearly all costs including cotton, packaging, fuel, and logistics.With the cotton prices now softening, the Company has managed to partially offset the trends and hold on the margin strengths with calibrated pricing actions, strong budgets and control measures and optimum use of inventory.
• The Company put its Auto Replenishment System (ARS) on hold due to the volatility created by changes in product demand mix and supply chain challenges through the pandemic. This meant that the distributors were free to order based on availability and based on the best judgment, resulting in an imbalance in the channel partners’ inventory. During the year under review, the ARS was reinstated and is now being implemented in full, which, we believe will help in correcting imbalances and not only streamline supply chains, but also help in improving the ROI of the channel partners while improving order fulfillment to retailers.

EXPANSION AND NEW INVESTMENTS

• The tape dyeing unit expansion of 35,000 Sq.ft in Hassan is planned to be commissioned by Q2 of the current financial year, which is aimed to meet the market requirement of women’s dyed elastic.
• The ‘Cup Molding & Hook n Eye Forming’ projects are a crucial part of women’s bra manufacturing. These projects are also expected to commence during the second quarter of the current financial year and will reduce our import dependency while focusing on improving quality, lead time and cost.
• To meet the demand in the premium vertical, the Company is planning to add 200,000 Sq.ft of Cut-toPack facility at K R Pete. The commissioning of this facility is expected during the end of this financial year.
• Our flagship Odisha Project would be ready by end of FY’24 which shall complement Modern Classic growth, and is slated to be one of largest projects built at 28.5 acres campus, with a built-up area of 6.5 lakhs Sq.ft. This facility will encompass Central Stores, Cut-to-Pack, and Elastics & Socks manufacturing
• The Company is also expanding its socks capacity with an addition of 215 advanced knitting machines. With the proposed expansion, the capacity will have 576 knitting machines.
• The Company added two third-party logistics warehouse facilities at Hoskote and T Narsapura in Bangalore

PROSPECTS

• With our strong in-house product development, back-end capabilities, manufacturing expertise and our continuously evolving state-ofthe-art technology, combined with a very strong distribution network, we remain optimistic about the prospects of the brand and expect continued healthy sales growth and profitability in the coming years, further consolidating our position in the premium market for Innerwear, Athleisure, Socks, Swimwear & Swim equipment.

Contingent liabilities

• During the current year, the Company has received demand order amounting to 1,271.05 million (including fine and penalty 896.97 million) from Commissioner of Customs. The Company has deposited 32.61 million (31 March 2022: 30.00 million) under protest. The Company has filed an appeal before Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The management believes that the Company has duly complied with all the valuation rules and based on the legal opinion, is reasonably confident of favorable outcome in the matter.