Provogue India Ltd

EXECUTIVESUMMARY
This report provides an analysis and evaluation of the current and prospective profitability,
liquidity and financial stability of Provogue India ltd. Methods of analysis include trend,
horizontal and vertical analyses as well as ratios such as Debt, Current and Quick ratios. Other
calculations include rates of return on Shareholders Equity and Total Assets and earnings per
share to name a few. All calculations can be found in the appendices. Results of data analysed
show The Company achieved total revenue of Rs 621.78 Crore against last years Rs 553.48
Crore, which represents growth of 12.30% . The Company earned an EBIDTA margin of Rs
42.39 Crore compared to Rs 68.77 Crore in the previous year. In particular, comparative
performance is poor largely due to restructuring costs within a softer retail market
The report finds the prospects of the company in its current position are not positive. It has been
a challenging year for the fashion and lifestyle retail sector. Although Indias long term
consumption story remains positive, most retailers felt the pinch last year as Indias value
conscious customers sought lower price points for consumer goods such as clothing, accessories
and other lifestyle products.The major areas of weakness require further investigation and
remedial action by management. Recommendations discussed include:
Reducing the number of stores to redress supply demand imbalance and bring operating margins
under control.
Undertake Customer surveys and research in order to improve customer satisfaction and needs
Rationalizing our export business and reducing volumes to cut down the forex exposure risk and
enrich the bottom line margins.

INTRODUCTION
Provogue is a fashion & lifestyle retail business owned by Provogue (India) Limited, a public
company listed on the Mumbai and National stock exchanges. The Provogue Brand was
developed and launched in 1998 as a Menswear fashion range of contemporary clothing with a
styling that made it relevant for the Indian market and quickly established leadership.
Over the years the Brand has evolved into a comprehensive collection of mens and womens
fashion apparel and accessories and has won numerous awards throughout its history. In 2011,
the Provogue fashion collections are available through more than 350 doors across 73 cities panIndia. The Provogue brand continues its heritage as Indias leading fashion label, by
continuously evolving garment designs, introducing new categories, enhancing its retail
environments and extending its reach through new locations across the country. Most recently
Provogue has introduced a range of fashion watches, footwear, inner wear, sunglasses etc. to
compliment the collections.
Provogue has always projected its brand through Iconic Brand Ambassadors and is today proud
to have superstar Hrithik Roshan and Sonakshi Sinha representing its brand through their
youthful style, passion and vibrancy, which reflects the brands core values. Provogue (India)
Limited is one of the premier retail-centric companies in India and has grown multifold since its
incorporation in 1997.
In addition to the fashion brand business, Provogue has its own garment manufacturing facilities
in Daman and Baddi, Himachal Pradesh to meet fast-to-market demand and ensure the highest
quality standards for its customers. In addition, Provogue operates an office in Hong Kong to
manage the sourcing of offshore raw materials. Provogue has extended its retail business to the
development of regional shopping centres and related mixed-use real estate through its
subsidiary, Prozone Enterprises Pvt. Ltd. Prozone is a joint venture between Provogue India Ltd
and Capital Shopping Centres Plc (formerly known as Liberty International Plc), a UK FTSE100 company with more than 30 years of experience in retail infrastructure and over GBP 5
billion of assets under management. This partnership ensures that the design, quality and safety
measures of its shopping centres meet the highest international standards and provide the most

rewarding environments for retailers and shoppers alike. The Company has 15 subsidiary
companies: Millennium Accessories Ltd., Provogue Infrastructure Pvt. Ltd., Sporting and
Outdoor Ad-Agency Pvt. Ltd., Flowers, Plants & Fruits (India) Pvt. Ltd., Acme Advertisements
Pvt. Ltd., Brightland Developers Pvt. Ltd., Faridabad Festival City Pvt. Ltd, Pronet Interactive
Pvt. Ltd., Profab Fashions (India) Ltd., Classique Creators Limited, Prozone Infrastructure
Limited, Provogue Personal Care Private Limited, Standard Mall Private Limited, Elite Team
(HK) Ltd and Provogue Holding Ltd.

ComparisonAndAnalysisofTheAnnualReport
Chairmans Letter
RetailMarketBackdrop
201213
It has been a challenging year for the fashion and lifestyle retail sector. Although Indias long
term consumption story remains positive and intact, in the short term high inflation at over 10%,
combined with uncertainty over the global economy and its impact on India, plus a falling Indian
rupee, has resulted in a slowdown of consumer spending. 100% FDI in single brand retail has
also encouraged a lot of new entrants from abroad making the domestic fashion market more
competitive with more offers chasing a shrunk-down consumer wallet
201314
It has been a challenging year for the fashion and lifestyle retail sector. Although Indias long
term consumption story remains positive, most retailers felt the pinch last year as Indias value
conscious customers sought lower price points for consumer goods such as clothing, accessories
and other lifestyle products. To offset this the ecommerce wave has arrived and India is no
exception. Online retailers are thriving, at least on revenues, and putting pressure on offline
retail. Its clear that India will emerge as a major ecommerce market and our forward retail

strategy must recognise this. The evolving youthful consumer class is spearheading growth of the
retail market, forecast to reach $1,000 billion by 2020 from the current $500 billion. 64% of
Indias GDP is from consumption, with retail and services the biggest drivers, and with a new
pro-development Government in place, forecasted improvement to GDP growth fueled by a
renewed confidence in the economy we have the confidence to invest strongly in the future.

Business Model
2012-13
Provogues Business Model is based on 6 key initiatives
1.Repositioning the Fashion Collections and Retail Experience to align with our youthful target
customer. The upcoming Spring Summer 14 collection will unveil new designs and fabrics to
resonate with Indias global youth market. Many of our Provogue Studios have already been
refurbished with a contemporary black look, which has significantly increased footfalls.
2.Focus on Franchising and Distribution to reach out to more markets effectively. A new
franchising formula to attract Indias best regional entrepreneurs to the Provogue brand
combined with special collections more relevant to the MBO retail segment are under
development and being aggressively ramped up.
3.FMCG Personal Grooming Business. The launch of Provogues Deodorant range last year has
met with a strong reception from General Trade (GT) and Modern Trade (MT) retailers.
Deodorants are now available at more than 60,000 retail outlets across India and we plan to
increase distribution by 4 times in the next 2 years to capitalize on the demand. In addition we
plan to launch other categories of Personal Grooming products over the next few years that can
be retailed through the same channels.
4.Provogue Innerwear Range for Men has been developed and will launch through GT and MT
channels in FY14. This is a perfect fit with our brand DNA and research suggests that Innerwear
can grow into a significant new business vertical within a few years.

5.The Institutional Business Division has been successfully incubated for 2 years and is now
poised to deliver high growth. Our corporate client base is expanding and weve also entered the
high volume Canteen Store Department (CSD) market that traditionally delivers consistent
revenues year on year.
6.Provogue.com, our online ecommerce portal, has been soft-launched and the final launch is
planned for the end of this financial year. Early stage operations are exceeding our expectations.
Provogue products can now be delivered to over 15,000 pin codes in India enabling us to reach
out to every potential Provogue customer in the country. Against the backdrop of a surge in
ecommerce retailing in India, we see this as a big opportunity when considering the performance
of global companies that have invested in online retail in more mature markets
2013-14
Provogue realigned their business into 4 strategic verticals for the future, as follows:
1.Fashion and Lifestyle: Were repositioning our collections to be aligned with the youthful
target customer and we are focusing on new Franchising and Distribution channels to reach out
to more markets more effectively.
2.FMCG Personal Care: The launch of Provogues deodorant range last year has met with a
strong reception from retailers and consumers. We plan to launch other categories of Personal
Care products this year that can be retailed through the same channels.
3.Institutional Sales: The division has seen growth of over 55% last year and is expecting
continued growth going forward in the corporate gifting sector and the Canteen Store
Department (CSD) market that traditionally delivers consistent revenues year on year.
4.Ecommerce: Provogue.com has exhibited consistent growth since its launch in 2013. Provogue
products can now be delivered to over 15,000 pin codes across the country. We also see online
retail as an opportunity to invite foreign brands into the Indian market on a reduced risk model
and we have several exclusive discussions in the pipeline.
Each of these verticals are being driven by dedicated teams motivated to achieve their own goals
within specific timelines

Financial Performance
2012-13
We closed FY13 with total operating revenues of INR 783crores, practically the same as the
previous year (INR 788 crores) and PAT of INR 19.5 crores just marginally down from last fiscal
(INR 20 crores). This steady state reflects the challenging market conditions of the period. As
detailed above, the new initiatives underway plus a rigorous improved efficiency program will
start to deliver results this year and you will see this come through in improved metrics in the
future.
2013-14
The Company achieved total revenue of Rs 621.78 Crore against last years Rs 553.48 Crore,
which represents growth of 12.30%. Provogue earned an EBIDTA margin of Rs 42.39 Crore
compared to Rs 68.77 Crore in the previous year, largely due to restructuring costs within a
softer retail market. Profit after tax was considerably down at Rs 94.30 Lac as against Rs 12.89
Crore in the previous year. The prime reason for this was the major fire that occurred in February
2014 at the companys plant in Daman where fixed assets, having written down value of Rs14.35
Lac and stocks valuing Rs 1549.18 Lac, were completely destroyed. The Company is however
fully secured by insurance and has made claims against these losses

FINANCIAL HIGHLIGHTS

Indian Retail Industry Overview

India is amongst the largest and the fastest growing retail markets in the world. Retailing is one
of the pillars of the Indian economy accounting for nearly one fourth of the countrys GDP.
Currently pegged at around USD 500 billion, Indian Retail Industry has a bright potential with
the burgeoning spending power and rising per capita income in the country having more than 1.2
billion consumers. At present, the organised retailing is in its nascent stage and contributes to
nearly 8% of the Indian Retail market. However, it is expected to grow much faster than
unorganised retail and will garner around 20% share by 2020 as indicated in various industry
research.

Indian Apparel Market Overview

Apparel Retailing is the second largest contributor to the Indian Retail Market after food and
grocery. Interestingly, in the organised sector, apparel retailing is the largest and the most
penetrated segment.During the past three years, Indian apparel retail market has grown at a
CAGR of 10% to reach Rs174,000 Crore in 2012.
Urban ready-to-wear segment accounts for 28% of the apparel retail market in India

The urban ready-to-wear segment is growing at a faster clip than the overall apparel retail
market.Having grown at a strong CAGR of 12% in the past three years, the size of urban ready-

to-wear segment is estimated at Rs 48,000 Crore in 2012. It is slated to grow at a CAGR of 13%
for the next four years and reach to a size of Rs 77,000 Crore by 2016
Categorising the urban ready-to-wear sector by gender/age, the share of Menswear at 53% was
the largest in 2012. Menswear will continue to dominate the sector, however, the womenswear
and kidswear are expected to grow faster and enhance their share in the overall expanding pie

Key Factors Influencing Indian Retail Apparel Market

The key factors driving the ready-made apparel market growth include rising disposable
incomes,growing fashion aspirations and geographical expansion by market players. As the
lifestyles of Indias prospering urban consumers have evolved, their clothing needs have
broadened. Comfort fitting, style, availability of wide selection, and ease of purchase is also
stoking the demand for ready-made apparels.
Brands and retailers are catching up with the latest trends in no time and customizing their
product offerings to match specific demands. Over the past few years, a large number of
shopping malls have opened across the country and the trend is sure to accelerate. Large branded

store chains where products are systematically stocked and displayed, will speed the
transformation of consumer preferences.
Apparel retail Industry is highly competitive because of the presence of a large number of
players, ever changing consumer preferences and the need for marketing differentiation.

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Key Factors Influencing Companys Financial Performance

Strengths

Value creating partnership with customers and suppliers: Provogue aims at creating mutually
value adding partnerships. Provogue also aims at reducing the system costs, improve service
levels, and offers new products and services through innovative techniques.

Brand Management: Provogue has a sound brand management philosophy. A clear brand
strategy helps in defining the overall product strategy.

Channel and supply chain management for competitive advantage: Provogue has an efficient
supply chain management which ensures the smooth flow of goods from the manufacturers
to the ultimate consumer. A well oiled supply chain helps the manufacturer to deliver the
goods in time.

Celebrity advertising campaigns: Provogue has a mark for itself position wise, distribution
wise and promotes the brand through innovative advertising. Provogue had hit the market in
1999 with an advertising campaign featuring model John Abraham who went onto become a
super model on the fashion circuit. After that Provogue signed film star Fardeen Khan as a
brand ambassador.

Prime Locations: Provogue has set up 40 showrooms mainly in the countries metro cities.

Well defined customer segment and lovely range of colours: Provogue has targeted to a well
defined customer service. It has clothing fro office to party wear for men and women. It has
colours like orange, navy blue, lemon yellow and aqua green.

Weaknesses

No Provision for kids wear: Although Provogue has captured market for men and women, it
has not focus on the kids segment yet.

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Lack of showrooms in mini-metros: Provogue has no retail outlets in mini metro cities like
Jodhpur.

The advent of online e-commerce has created new challenges for the brick and mortar
retailers as deep discounts are squeezing margins across most retail categories, fashion being
no exception.

Depreciation of the Indian currency is increasing product costs, which is challenging to pass
onto consumers in a tight environment

Despite the slow down in consumption retail costs continue to be high which depresses
operating margins

OPEC exports have slowed down due to low oil prices, which has reduced imports from the
oil dependent African markets in our trading business

Opportunities

Wide market: Provogue which currently has 40 showrooms and 110 shop-in-shops across the
country and plans to expand its network aggressively in the near future. It also plans to open
more exclusive showrooms in various cities to widen its market. The company also plans to
increase its products range.

E-Branding E-Branding is gaining importance today in the global scenario as the markets are
gearing up for the next generation internet. It has an opportunity to promote its product
through e-branding.

Franchising: Provogue can use techniques of franchising to enter new markets and gain new
customers.

Strategic Alliance: Provogue, the high profile apparel brand that created a niche for itself
through celebrity advertising campaigns is looking forward for a strategic partner after its
launch. Through this, it can strengthen the prospects of the company thereby, capturing new
markets and expanding operations.

Threats

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Competition: Competition in the main markets is increasing, and putting pressures on

volumes. The competitors include Raymonds, Color Plus, Allen Solly and others. Apart
from fighting competition with the big brands, Provogue has to deal with opposition in the
form of large format retailers such as Shoppers stop, Globus, Wills Lifestyle etc. Provogue
is posing stiff competition with Park Avenue, and Arrow for shelf space.

Trends: Another threat is the industry specific risk that any company in the fashion business
will have, that of predicting trends properly and accurately and moving in line with the
market.

Management Discussion And Analysis

ECONOMIC OVERVIEW
2012-13
India is expected to record 5.7 percent GDP growth during year ending December 2013. The
growth is expected to increase further to 6.7 per cent in 2014-15, according to the World Banks
latest India Development Update, a bi-annual report on the Indian economy. Indian companies
have invested US$ 1.65 billion abroad in February 2013, according to data released by Reserve
Bank of India (RBI). Moreover, India was among the top 20 real estate investment markets
globally with investment volume of Rs 190 billion (US$ 3.46 billion) recorded in 2012,
according to Cushman & Wakefields report International Investment Atlas. Indias services
sector has emerged as a prominent sector in terms of its contribution to national and state
incomes, a comparison of the services performance done across the top 15 countries over the 11
year period from 2001 to 2011. India stood first in terms of increase in share of services in the
gross domestic product (GDP) with 8.1 per cent, among top 15 countries during 2001-2011.
Foreign institutional investors (FIIs) made a net investment (including equity and debt) worth `
168,367 crore (US$ 30.72 billion) in 2012-13, according to data published by Securities and
Exchange Board of India (SEBI). Moreover, US$ 310.47 million in the equity and US$ 41.32
million in the debt market were invested by FIIs, as on May 16, 2013. The cumulative amount of
foreign direct investment (FDI) equity inflows into India were worth US$ 191,757 million
between April 2000 to February 2013, while FDI equity inflow during April 2012 to February

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2013 was recorded as US$ 20,899 million, according to the latest data published by Department
of Industrial Policy and Promotion (DIPP). In addition, the luxury market in India is expected to
reach US$ 14.73 billion by 2015 from an estimated US$ 8.21 billion this year, with about 30 per
cent of the customers coming from smaller cities. Non-resident Indians (NRIs) placed deposits
aggregating to US$ 14.18 billion in the financial year ended March 2013, registering an increase
of 19 per cent over the previous year. Non-resident (external) rupee account or NRE deposits
with the banking system jumped 85 percent (rising by US$ 15.81 billion in FY13 compared to
US$ 8.53 billion in FY12), according to Reserve Bank of India data. Foreign exchange earnings
(FEE) from tourism in India registered a growth of 19 per cent to touch Rs10,186 crore (US$
1.86 billion) in February 2013 as compared to Rs8,502 crore (US$ 1.55 billion) during the same
period last year. Indias economic confidence grew by 8 points to 68 per cent in the month of
January 2013 as compared to last year making it the second most economically confident country
in the world. India is also expected to be the second largest manufacturing country globally in the
next five years, followed by Brazil as the third ranked country, according to Deloitte

2013-14
Economic growth in India is projected to pick up gradually in the coming year after remaining
near a two-decade low in 2013. GDP is estimated to expand to 5 5.5% in 2014 - 2015, up from
3.9 per cent in 2013. The moderate recovery is expected to be underpinned by stronger
consumption and investment in the context of enhanced macroeconomic stability, lower
inflation, stronger external balances and more stable currencies in recent quarters. These
conditions are expected to support business and consumer confidence thereby fuelling increased
foreign investment and domestic demand. External demand is also projected to improve in 201415 as economic activity in developed economies gains momentum but the strength of the
recovery in India would be restricted by structural impediments, including energy and transport
constraints, political restructuring and a historic lack of economic policy reforms.

BUSINESS OVERVIEW
PROVOGUE OPERATIONS

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2012-13
Provogue commenced operations as a manufacturer and retailer of apparel under the brand
Provogue in 1997. Over time, the brand has gained strong recognition and has grown to become
a leading retailer of fashion apparel and accessories for men and women. Projecting itself as a
customer-first company, Provogue constantly strives to provide the Indian consumer complete
satisfaction when it comes to their fashion retail needs. Provogue retails its products through
exclusive Provogue Stores and by opening Shop-in-Shop outlets in National Chain Stores (NCS)
and Multi Brand Outlets (MBO). As of March 2013, Provogue fashions and accessories were
available across 127 Provogue Stores, and 138 Shop-in Shops

2013-14
As of March 2014, Provogue fashions and accessories were available in more than 100 doors
across the country. The Company has reduced the number of stores to redress supply demand
imbalance and bring operating margins under control.
HUMAN RESOURCES OVERVIEW
2012- 13
The Company regards its human resources as amongst its most valuable assets and proactively
reviews policies and processes by creating a work environment that encourages initiative,
provides challenges and opportunities and recognises the performance and potentials of its
employees. Focused and organised investment in training and development, continuance of
productivity improvement efforts and an employee satisfaction survey are some of the highlights
of our ongoing HR activities.Industrial relations across different locations of the Company were
cordial during the year and the Company continues to maintain its focus on human resources
development. The total number of employees of the Company as on 31st March, 2012 stood at
510.
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2013-14
The total number of employees of the Company as on 31st March 2014 stood at 235. The
Company have reduced the number of stores to redress supply demand imbalance and bring
operating margins under control.

Business Policy
Provogue maintains generally accepted standards of corporate conduct towards its employees,
consumers and society at large. We believe that the policies must balance individual interest with
corporate goals and operate within the accepted norms of propriety, equity and sense of justice.
The Company believes that it is rewarding to be better managed and governed and to align and
intensify its activities with the national interest. The Company makes all round efforts in its
pursuit to enhance market share and enhance shareholders value in the industry

Internal Control And Adequacies

The Company has adequate internal control procedures commensurate with the size and nature
of its businesses. The internal control system is supplemented by extensive internal audits,
regular reviews by the management and well-documented policies and guidelines to ensure
reliability of all records to prepare financial statements and other data. Moreover, the Company
continuously upgrades these systems in line with the best accounting practices. The Company
has independent audit systems to monitor the entire operations and the Audit Committee of the
Board regularly review the findings and recommendations of internal audits.
RISK MANAGEMENT
Economic Risk
A slowdown in economic growth in India could cause the business to suffer as the Companys
performance is highly dependent on the growth of the economy, which in turn leads to a rise in
disposable incomes and resultant consumption. Favourable population growth, a large pool of
highly skilled workers, greater integration with the world economy and increasing domestic and
foreign investment suggest that the Indian economy will continue its growth momentum for

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several years to come. This will also provide impetus to the retail industry, which is estimated to
grow to circa $1,000 billion in 5 years from about $500 billion in 2012.
Business Risk
The Company operates in upper market lifestyle products associated with high advertisement
costs and risk related to brand management. The inventory cost related to lifestyle garments is
traditionally a matter of risk, however through effective inventory management the Company has
reduced the risk to a minimal level. The Company has a low debt equity ratio and is well placed
to take care of its borrowings. The foreign exchange transactions of the Company are suitably
covered and there are no materially significant exchange rate risks associated with international
trade.
Fashion Risk
This risk would arise through the Companys inability to set trends and understand changing
fashion styles, which can lead to lower sales and profitability. However, it is the Companys
constant endeavour to be closer to and understand the customer through its diversified retail
outlets. We also have a talented design team in place that is in step with the latest national and
international fashion trends and ensures that they are reflected in designs for our customers.
Though the Company has its mitigation in place, fashion risk cannot be completely eliminated.
Brand Risk
Any event that tarnishes the image of the brand can lower the value of the brand and adversely
affect the Companys business. The Companys business model revolves around its brands and,
therefore, the Company ensures that none of the characteristics and attributes of the brand are
compromised within the Companys communication to its customers. The Company also gives
wide focus on customer preferences and conducts extensive in-house research to maintain top-ofthe-mind recall with the customer base with respect to the brand. The Company believes that it
has an appropriate mitigation plan in place to handle brand risk.

Comparisons of Companys Performance

FINANCIAL RESULTS

17

The financial performance of the Company for the year ended 31st March 2014 is summarized
below:

PERFORMANCEREVIEW
TheCompanyachievedtotalrevenueofRs621.78Croreagainstlastyearsoperationalincome
ofRs553.48Crorewhichrepresentedthegrowthof12.30%againstthepreviousyear.Thenet
profitfortheyearaftertaxwasRs94.30lacsasagainstRs12.89Croreinthepreviousyear.The
mainreasonfortheprofitshortfallwasamajorfirethatoccurredinFebruary2014atoneofthe
CompanysmanufacturingplantslocatedatDaman,wherefixedassetshavingwritten
downvalueofRs14.35lacsandstocksvaluingRs1549.18lacsweredestroyedbyfire.However
theseassetsarefullysecuredthroughinsuranceandtheCompanyhasmadeclaimagainstthe
loss.TheCompanywillaccounttheamountofclaimfromtheInsuranceCompanyasandwhen
thesameisdeterminedbytheInsuranceCompany

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19

20

Financial Performance

2012-13
Operational Income: The Company achieved a total operational income of Rs 540.28 Crore
against last years operational income of Rs 609.72 Crore.
EBIDTA: The Company earned an EBIDTA margin of Rs 72.70 Crore down from Rs 74.96
Crore in the previous year.
Profit after Tax: The Profit after tax for the year was Rs 12.89 crore as against Rs 25.03 crore in
the previous year. This represents 2.39% and 4.11% of the operational income for the FY 201213 and 2011-12 respectively

2013-14
Revenue and Profit after tax The Company achieved a total revenue of Rs 621.78 Crore against
last years operational income of Rs 553.48 Crore which represents growth of 12.30% over the
previous year The profit for the year after tax is Rs 94.30 Lac as against Rs 12.89 Crore in the
previous year. The prime reason for this reduction was a major fire that occurred in February
2014 at one of the Companys plants located at Daman where fixed assets having written down
value of Rs14.35 Lac and stocks valuing Rs 1549.18 Lac were completely destroyed. The
Company is however fully secured by insurance and has made claims against these losses. The
Company will report and account for the amount of claim in its accounts as and when the same is
determined by the Insurance Company

Operating Profit Ratio

21

TotalAsset, Asset Turnover Ratio

NetSales

22

ReturnonCapitalEmployed

23

FinancialRatios

24

25

26

FutureProspects

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Inspiteofthesechallenges,Provogueisamongstthetop20apparelbrandsinIndia,andinthe
top 5 domestic brands,according to the latest survey by Neilson for the Economic Times
Consumptionled youthfulretail is thecore ofourbusiness model. With aprodevelopment
GovernmentinplaceIndianretailisexpectedtoreach$1trillionin5yearsfromapproximately
$600billionin2015.Thisisthelargestretailgrowthstoryintheworld.Thecompanymusthave
theresolvetosticktotheir guns,realignforthefutureandstaythecourse.Ecommerceis
expandingsteadilyinthecountry.Customershavetheeverincreasingchoiceofproductsatthe
lowestrates.Ecommerceisprobablycreatingthebiggestrevolutionintheretailindustry,and
thistrendisexpectedtocontinueintheyearstocome.Traditionalretailersareexploringthe
digital retailchannels (ecommerce),whichwouldenablethemtospendlessmoneyonreal
estatewhilereachingouttomorecustomersintier2andtier3cities.Thelongtermoutlookfor
theindustryispositive,supportedbyrisingincomes,favourabledemographics,entryofforeign
players, and increasing urbanisation. A strong brand image, vertical integration in captive
manufacturing facilities and diversifying into new retail formats and channels position the
Companyasanintegratedplayerinthegrowingdomesticconsumptionstory.WiththeIndian

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economy on a firm foundation and the organized retail industry surging, the Company is
confidentthatitiswellplacedtotakeadvantageofthegrowthopportunitiesinthecomingyears.

CorporateSocialResponsibility
SPECIALCHILDRENININDIA
The definition of special children refers to those who show persistent learning of basic motor and
language skills, often with IQs below 80. Causes range from hereditary, brain
damage,malnutrition, infection during pregnancy, excessive drug intake or RH incompatibility.
There are over 30 million special children living in India today, with very limited access to basic
education,primary health facilities and employment opportunities. The government has initiated
various measures to offer these children the basics of education and health care and various
agencies are working hard to make these and other services available to every child in need.

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VALABHDASDAGARAINDIANSOCIETY
VDISMRhasbeenworkingwithspecialchildrensince1973.Overtheyearsmorethan8,200
studentshavebenefitedfromthevariousservicesofferedbytheinstitute.Servicessuchasearly
detection, intervention, training, education, remedial training,vocational rehabilitation, job
placements etc. VDISMR is one of the few societies in Mumbai, which covers the entire
spectrumfromtrainingandrehabilitatingofspecialchildrentosystematicmedicalresearchfor
curestoforthesediseases.SomeoftheprogramsonofferareSpecialEducation,Vocational
Rehabilitation, Training and Infant Care among others. Facilities such as Teachers Training
Programmes,aRecreationCentre,andaGymnasiumarealsolocatedwithinthecentre.Students
rangeinagegroupsinfantsto18years,whentheyareconsideredrehabilitatedandreadytore
entersocietyasproductiveindividuals.PrePresentlymorethan500studentsarebenefitingfrom
suchservices.Thesuccessoftherehabilitationprogrammeisevidentthroughchildrenmastering
avarietyofskillsthatotherstakeforgrantedsuchassinging,publicspeaking,andvocational
skills.VDISMRstudentshavewonsportingcompetitionsinMumbaiinandhavewonmedalsat
theWorldSummerGamesheldintheUSAandChina.TheBigWondermusicalshowhasbeen
asmashhitwithover40showsinMumbaiandoneinBangkok,Thailand.
UTTARAKHANDVICTIMS
CollectionofoldclothesforGunjNGOtosupportthevictimsoftheUttarakhanddisaster
BLOODDONATION
As our CSR Initiative, Blood donation camp was organised on 16th March 2013 in the
Companyspremises.TheBloodDonationCampwasorganisedincollaborationwithBSESMG
GlobalHospital,AndheriWest.ManagedbyBrahmaKumaris GlobalHospitalandResearch
Centre.

Milestones achieved by the Company:

Year Milestones

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1997 Acme Clothing Private Limited was incorporated on November 11, 1997

1998 The Company launched its brand "Provogue"

1999 John Abraham was projected as the brand ambassador for Provogue. The Company
introduced the brand "Provogue" in National Chain Stores like Piramyd, Shopper's Stop and
Lifestyle

2000 The Company opened the first "Provogue Studio" (an exclusive brand outlet) in
Lokhandwala, Andheri, Mumbai

2001 The Company opened its second Studio Store in Chandigarh. The Company signed
Bollywood actor Fardeen Khan as the Brand Ambassador

2002 The Company set up its factory at Daman to manufacture apparel.

2003 The Company introduced the concept of "Provogue Lounge" at High Street Phoenix,
Mumbai

2004 The Company acquired Acme Global which enabled it to enter into fabric processing
business.The Company entered into a License Agreement with M/s. Rajni Frames for the
manufacture and sale of eye wear products under its brand name.The Company acquired
15,906 shares of Acme Hotels & Hospitality Private Limited ("AHHPL") pursuant to which
AHHPL became its subsidiary

2005 The Company changed its name to Provogue (India) Limited

Awards and Recognitions:

The company has been consistently recognized as the most admired apparel manufacturer in
India. Images, one of the leading industry magazine, has instituted various awards known as
Images Fashion Awards (IFA) to recognize the best performers of the fashion and retail industry.
The company has been recognized by the industry for its various initiatives, which include Brand
building, Setting up of own Exclusive Brand Retail chain and Fashion retailing concepts amongst
others. The company has a unique distinction of winning the `Most admired product launch'
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award and also being nominated for the IFA Hall of Fame: `Most Admired Apparel Company in
India' in the same year. A list of others awards won by the company over the years is in the table
below:
Year Award
2000 IFA: Winner `Most Admired Product Launch' - Provogue
2000 IFA Hall of Fame: `Most Admired Apparel Company in India' - Acme Clothing
2001 IFA: Hall of Fame `Most Popular Fashion Campaign of The Year' - Provogue
2001 IFA Hall of Fame `Most Admired Apparel Company in India' - Acme Clothing
2001 IFA Hall of Fame: `Most Admired Brand Professional of The Year' - Nikhil Chaturvedi
2003 Lycra(R) IFA: Hall of Fame `Most Admired Fashion Campaign of The Year' - Provogue
(for year 2002)

2003 Lycra(R) IFA Hall of Fame: `Most Admired Brand Professional of The Year' - Akhil
Chaturvedi (for year 2002)
2003 Lycra(R) IFA: Winner `Most Admired Exclusive Brand Retail Chain Of The year' Provogue (for year 2002)
2004 Lycra(R) IFA: Winner `Fashion Retail Concept Of The Year' - Provogue Lounge (for year
2003)
2004 Lycra(R) IFA: Hall of Fame `Most Admired Shirt Brand of The Year' - Provogue (for year
2003)
2004 Lycra(R) IFA: Hall of Fame `Most Recalled Fashion Campaign Of The Year' - Provogue
(for year 2003)
2004 Lycra(R) IFA: Winner `Most Admired Exclusive Brand Retail Chain Of The year' Provogue (for year 2003)

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2004 IFA: Hall of Fame `Retailer Of The Year in Fashion' - Provogue (for year 2003-04)
2004 Golden Scale Award for the Menswear Brand in Apparel by CMAI 2004
2004 DFU's inside Fashion brand award for excellence in retail performance
2005 -Lycra(R) IFA Winner: `Most Admired Fashion Forward Brand of the year' - Provogue.
2005 - Master Brand Award for Menswear Apparel

Conclusion
Provogue has evolved to be one of the best-known fashion labels in India and is now extending
the brand into selected new markets that offer high growth potential. Provogues strong brand
recognition is not limited to the large metropolitan cities but runs deep into the countrys smaller
towns and villages. This high brand awareness, combined with a rapidly growing consumer
population, provides a unique opportunity to enter new product categories and extend
distribution channels. The momentum in the organized retail sector, which is forecast to grow
from about 6% of total retail to over 10% within 3 years, reinforces the decision to go for an
aggressive next phase of channel and product extensions. In traditional retail the company
operates over 150 doors across more than 80 markets and they will extend this offline retail
platform further with an aggressive programs in franchising and distribution to reach out to more
potential Provogue customers. The Company remain focused on designing menswear range for
the youthful and fashion conscious consumer and to offer our Provogue customers a complete
wardrobe for every occasion enhanced by a line of accessories designed to compliment the look.
A strong brand image, vertical integration in captive manufacturing facilities and diversifying
into new retail formats and channels position the Company as an integrated player in the growing
domestic consumption story. With the Indian economy on a firm foundation and the organized

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retail industry surging, the Company is confident that it is well placed to take advantage of the
growth opportunities in the coming years.

Recommendations

Reducing the number of stores to redress supply demand imbalance and bring operating
margins under control.

Reducing stocks in the system and releasing working capital through more responsive
design-to-market mechanisms and working closely with our vendor base to be aligned for
just-in-time delivery.

Increasing our focus online to broaden the offer and become available to potential customers
in every corner of the country.

Rationalizing our export business and reducing volumes to cut down the forex exposure risk
and enrich the bottom line margins.

To remain strong in the market, Rejuvenate the brand to make and it more relevant to a new
generation of youth consumers. With 72% of the population under 35 years.

To have a balanced portfolio in order to improved resilience to ride market cycles and
improve focus to make the best of each opportunity

Undertake Customer Research and development to introduce new products and bring
customer satisfaction

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