Inclusive Capitalism –

Community Owned Companies

Fabindia Overseas Private Limited

• Established in1960 as an export house

• Linking traditional, craft-based rural producers to modern urban markets and consumers

• India’s largest private retail platform for products that derive from traditional techniques, skills and processes

Twin Mandate

• A viable, profitable retail platform for products created using craft skills and processes

• The creation of skilled, craft-based sustainable jobs in the rural sector

Market Distribution:• 97 stores across 42 cities• 6 stores abroad and a growing presence in the Middle East• B2C online & Exports to 34 countries

Product Range:• Garments Indian and western styles for men, women, children and infants • Home Home linen - bed, bath and table – gift items, floor covering, lighting • FurnitureContemporary wood furniture for homes and offices • Personal Care Soaps, face, skin and hair care products using authentic natural

ingredients • Organic FoodsOrganic and natural agri-products grown without chemicals or pesticides,

and processed foods• JewelleryShowcasing craft: repository of skill and technique

Snapshot – Fabindia Market & Product Profile

VISION

Create a pathway for the growth of Indian textile and non textile craft products in the international and domestic market

Focus on indigenous and inherent skills

Reach out to 100,000 artisans in rural India to provide an opportunity for inclusive growth

HOW?

By creating:

a relevant intermediary organization

with defined responsibilities which will support the vision.

HENCE

Establishing of a joint investment fund – Fabindia’s subsidiary Artisans Micro Finance Pvt Ltd (AMFPL), as an NBFC

Facilitating the setting up of the Community owned Companies (CoCs) as first Private, and then Public Limited Companies – 17 COCs are fully operational

Corporatising the Supply Chain:

• Goal to create 100,000 sustainable rural jobs across India

• Enabling access to working capital – the main hurdle to capacity building

• Closer to sourcing – shortening the supply chain, better quality and pricing

• Direct interface with artisans

AMFPL Strengths

Highly qualified, experienced and dedicated Board

Captive access to the market via Fabindia

Access to working capital and term loan funding via tie up with Banks

Fabindia Overseas (99% equity)

Artisans Micro Finance Private Limited- NBFC

Working Directors Fabindia Rep. MD Independent Directors

COC COCCOCCOC

AMFPL Structure

Working Directors (1% equity)

Maximum AMFPL Equity in COC 49% . Minimum equity 26%

COC COC

Role of AMFPL

• Survey and Feasibility Study of Craft Clusters• Setting up a COC• Selecting and Training Management Team• Establishing Standard Operating Procedures• Assisting to establish quality standards

• Financial and Business Planning• Provide access to funding from banks

• Vetting and processing loan applications• Monitoring loan disbursal• Ensuring repayment of principal and

interest

Role of AMFPL• Raising equity

• Commitment to a minimum 26% equity in all COCs.• Raising balance equity for the COCs

• Artisan shareholding• External Investor

• Providing access to market through Fabindia• Co-ordinate technology and design inputs, and product

development • Constant monitoring of operations and profitability of CoCs• Wealth creation for share-holders

Community owned Companies (CoC)– Empowering the Supply Chain

• Strengthening supply capabilities where the goods are produced

• Implementing common systems for stocking, production and delivery

• Ensuring that the profits of the CoC are ploughed back into the business

• Allowing artisans to avail facilities set up with common investment for processes that improve quality and add value

• Facilitating the training of artisans• Enabling the purchase of materials in bulk so as to get

the best price

Community owned Companies (CoC) - Shareholding Pattern

COCs – Incorporated under The Companies Act, 1956

COC Board Structure:

Artisan Director Key staff members of the COC who are working

Directors Independent directors AMFPL representative

COC Management Team

Levels of COC dependant on turnover value

Key Positions in COC vary from 1 – 3

Secondary Positions vary from 2 – 6

Flexibility in appointment of management team basis relative strengths & weaknesses

COC Management Team responsibilities

Operational profitability of the company Meeting sales and profit targets Product Development Maintaining adequate stocks to meet orders Order Fulfillment within timelines Managing supplier relationships Generate artisan shareholding Conducting Board Meetings & AGMs

COC - creation benefits

Pooling of artisans resources Resulting in economies of scale Access to technology and facilities Revival of dying crafts Improvement in quality Access to design inputs Possibility of Indian craft being competitive in the

global market

COCs - as Private / Public Ltd. Companies

Creation of first time artisan ownership in a company with control over their business

Wealth creation in the form of increased value investments in COCs

Increased employment opportunities in rural India

COCs – as Private / Public Ltd. Companies

Artisans participate in decision making of the company

Receive dividends

Share trading window permits easy entry and withdrawal

The Fabindia Supply Chain – As

it Evolved

• Move from centralised model to regional supplier companies

• Long-standing, personalised relationships with suppliers that go back a generation

• Consistent growth of artisan suppliers linked exclusively to Fabindia

• Complete geographic coverage of crafts and supply chain through the 17 COCs

Suppliers

Fabindia Market Region Warehouses

Community owned Companies

The Supply Chain Structure

Fabindia Stores

S.NO. COC Company NameOperational

From

Public / Private

Limited Status

1COC 1 - Faridabad Desert Artisans Handicrafts Private Limited Apr-07 Private

2COC 2 - Jaipur Desert Artisans Handicrafts Jaipur Limited Apr-07 Public

3COC 3 - JodhpurDesert Artisans Handicrafts Jodhpur Private Limited Apr-07 Public

4COC 4 - Bikaner Rangsutra Crafts India Private Limited Apr-07 Public

5COC 5 - West BengalBengal Artisans Craft Company Private Limited Oct-07 Public

6COC 6 - BhujDesert Artisans Handicrafts Bhuj Private Limited Apr-07 Public

7COC 7 - Chanderi DAH Chanderi Limited Apr-07 Public

8COC 8 - Ahmedabad Saptarangi Crafts Private Limited Nov-07 Public

9COC 9 - Amroha Naugaon Artisans Handicrafts Limited Oct-07 Public

10COC 10 - Bijnor Bijnor Artisans Crafts Limited Sep-07 Public

11COC 11 - Delhi (A) Dilli Karigari Limited Dec-07 Public

12COC 12 - Bombay Mumbai Vastra Kala Private Limited Mar-08 Public

13COC 13 - Bangalore Deccan Crafts & Weavers Private Limited Jul-08 Private

14COC 14 - Andhra Pradesh Krishna Weavers Private Limited Jul-08 Private

15COC 15 - Chennai Nilgiri Artisans Private Limited May-08 Private

16COC 16 - Delhi (B) Delhi Artisans Private Limited Dec-07 Public

17COC 17 - Ghaziabad UP Artisans Sutradhar Private Limited Mar-08 Public

Community Owned Companies – a Snapshot