annual report 2017-18 18 - 2017 report...

ANNUAL REPORT 2017-18 ANNUAL REPORT 2017-18

Annual Report 20181

CORPORATE INFORMATION

BOARD OF DIRECTORS

Mr. Dinesh Arya Chairman and Independent Director

Mr. Hetal Hakani Independent Director

Ms. Gauri Pote Independent Director

Mr. Nikhil Chaturvedi Managing Director

Mr. Deep Gupta Whole Time Director & Chief Financial Officer (CFO)

Mr. Akhil Chaturvedi Whole Time Director

Mr. Salil Chaturvedi Non-executive Director

COMPANY SECRETARY & COMPLIANCE OFFICER

Mr. Vishant Shetty

STATUTORY AUDITORS

M/s Ajay Shobha & Co.

Chartered Accountant

A-701, La Chappelle, Evershine Nagar

Malad (West), Mumbai 400064

BANKERS

Andhra Bank | Corporation Bank | Central Bank of India |

Punjab National Bank | Bank of India | IndusInd Bank |

Small Industrial Development Bank of India

REGISTERED OFFICE

Provogue (India) Limited

105/106, Provogue House, 1st Floor,

Off New Link Road, Andheri (West), Mumbai - 400053

Phone: 022-30680560, Fax: 022-30680570

Email ID: [email protected]

Website: www.provogue.com

CIN: L18101MH1997PLC111924

ISIN: INE968G01033

GSTIN: 27AABCA8524F1ZU

REGISTRAR AND SHARE TRANSFER AGENT

Link Intime India Private Limited

C-101, 247 Park, L.B.S.Marg,

Vikhroli (W), Mumbai – 400 078.

Phone: +91-22- 49186000, Fax: +91-22- 49186060

Email id : [email protected]

Website : www.linkintime.co.in

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CONTENTS

Reports

Management Discussion and Analysis Report 3

Notice 8

Directors Report 19

Corporate Report 43

Financials

Standalone Financial 56

Consolidated Financial 107

For shareholders’ use

Proxy Form 157

Attendance Slip 159

Email Registration Form 159

Annual Report 20183

INDIAN ECONOMIC OVERVIEW

With a notable rebound in global trade, global growth strengthened to 3% in 2017. It was driven by investment recovery in advanced economies; continued strong growth in emerging Asia; a notable upswing in emerging Europe; and signs of recovery in several commodity exporters. With financial conditions still supportive, global growth is expected to tick up to a 3% in both 2018 and 2019 as per IMF forecasts. Advanced economies are expected to grow faster than potential this year and next and Euro area economies are set to narrow excess capacity with support from accommodative monetary policy. Further, the expansionary fiscal policy will drive the US economy employment. Aggregate growth in emerging market and developing economies is projected to firm further, with continued strong growth in emerging Asia and Europe. Growth in South Asia is projected to accelerate to 6.9% in 2018 from 6.6% in 2017, mainly reflecting fading disruptions to economic activity in India.

World GDP Growth Rate (%)

2.7 2.43.0 3.0 3.0

0.00.81.52.33.03.8

2015 2016 2017 2018 2019

India GDP Growth Rate (%)

7.6

7.1

6.7

7.27.4

6.36.56.87.07.37.57.8

2015 2016 2017 2018 2019

The Indian economy grew at 6.7% in FY2018 and has emerged as one of the fastest growing economies in the world. The constant GDP growth over the four quarters of FY2018 at 5.6%, 6.3%, 6.7% and 7.7% respectively in Q1, Q2, Q3 and Q4 shows that India has set itself on the track of growth.

MANAGEMENT DISCUSSION AND ANALYSIS

This growth has been supported by several key developments in policy, like the introduction of the Insolvency & Bankruptcy Code, the Goods and Services Tax, and the Real Estate Regulation Act, among others. The International Monetary Fund expects India’s real GDP growth to reach 7.2% in 2018 and 7.4% in 2019, thereby reinstating the country as the fastest growing economy in the world. India, on the back of recent developments like the increase in Ease of Doing Business ranking and rating upgrade by Moody’s, has been able to garner foreign direct investments to the tune of US$ 35.94 billion during April-December 2017. The long-term outlook for the country remains strong especially on the back of the structural reforms implemented by the government which are expected to have a positive impact in the long run.

India’s GDP is projected to reach US$ 6 trillion by FY2027 and is expected to become the third largest consumption economy as its consumption may triple to US$ 4 trillion by FY2025 owing to shift in consumer behaviour and expenditure patterns, according to a Boston Consulting Group (BCG) report. Furthermore, India is estimated to surpass the USA to become the second largest economy in terms of purchasing power parity (PPP) by the year 2040.

TEXTILE AND FASHION INDUSTRY OVERVIEW

India’s textiles sector is one of the oldest industries in Indian economy dating back several centuries. Even today, textiles sector is one of the largest contributors to India’s exports with approximately 13 per cent of total exports. The textiles industry is also labour intensive and is one of the largest employers. The textile industry has two broad segments. First, the unorganised sector consists of handloom, handicrafts and sericulture, which are operated on a small scale and through traditional tools and methods. The second is the organised sector consisting of spinning, apparel and garments segment which apply modern machinery and techniques such as economies of scale.

The textile industry employs about 105 million people directly and indirectly. India’s overall textile exports during FY 2017-18 stood at US$ 37.74 billion.

The Indian textiles industry is extremely varied, with the hand-spun and hand-woven textiles sectors at one end of the spectrum, while the capital intensive sophisticated mills sector at the other end of the spectrum. The decentralised power looms/ hosiery and knitting sector form the largest component of the textiles sector. The close linkage of the textile industry to agriculture (for

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raw materials such as cotton) and the ancient culture and traditions of the country in terms of textiles make the Indian textiles sector unique in comparison to the industries of other countries. The Indian textile industry has the capacity to produce a wide variety of products suitable to different market segments, both within India and across the world.

The Indian textiles industry, currently estimated at around US$ 150 billion, is expected to reach US$ 230 billion by 2020. The Indian Textile Industry contributes approximately 2 per cent to India’s Gross Domestic Product (GDP), 10 per cent of manufacturing production and 14 per cent to overall Index of Industrial Production (IIP).

The production of cotton in India is estimated to increase by 9.3 per cent year-on-year to reach 37.7 million bales in FY 2017-18. The total area under cultivation of cotton in India is expected to increase by 7 per cent to 11.3 million hectares in 2017-18, on account of expectations of better returns from rising prices and improved crop yields during the year 2016-17.

Indian exports of locally made retail and lifestyle products grew at a compound annual growth rate (CAGR) of 10 per cent from 2013 to 2016, mainly led by bedding bath and home decor products and textiles.

The textiles sector has witnessed a spurt in investment during the last five years. The industry (including dyed and printed) attracted Foreign Direct Investment (FDI) worth US$ 2.82 billion during April 2000 to December 2017.

Some of the major investments in the Indian textiles industry are as follows:

• The Cabinet Committee on Economic Affairs (CCEA), Government of India has approved a new skill development scheme named ‘Scheme for Capacity Building in Textile Sector (SCBTS)’ with an outlay of ` 1,300 crore (US$ 202.9 million) from 2017-18 to 2019-20.

• Future Group is planning to open 80 new stores under its affordable fashion format, Fashion at Big Bazaar (FBB), and is targeting sales of 230 million units of garments by March 2018, which is expected to grow to 800 million units by 2021.

• Raymond has partnered with Khadi and Village Industries Commission (KVIC) to sell Khadi-marked readymade garments and fabric in KVIC and Raymond outlets across India.

• Max Fashion, a part of Dubai based Landmark Group, plans to expand its sales network to 400 stores in 120 cities by investing ` 400 crore (US$ 60 million) in the next 4 years.

• In May 2018, textiles sector recorded investments worth ` 27,000 crore (US$ 4.19 billion) since June 2017.

The Indian government has come up with a number of export promotion policies for the textiles sector. It has also allowed 100 per cent FDI in the Indian textiles sector under the automatic route.

Initiative will be taken into consideration by Government of India.

• The Union Ministry of Textiles, Government of India, along with Energy Efficiency Services Ltd (EESL), has launched a technology upgradation scheme called SAATHI (Sustainable and Accelerated Adoption of Efficient Textile Technologies to Help Small Industries) for reviving the powerloom sector of India.

• The Government has planned to connect as many as 5 crore (50 million) village women to charkha (spinning wheel) in next 5 years with a view to provide them employment and promote khadi and also, they inaugurated 60 khadi outlets which were renovated and re-launched during the completion of KVIC’s 60th anniversary and a khadi outlet.

• The Textiles Ministry will organise ‘Hastkala Sahyog Shivirs’ in 421 handloom-handicrafts clusters across the country which will benefit over 1.2 lakh weavers and artisans.

• The Gujarat government’s decision to extend its textile policy by a year is set. It is believes to attract ` 5,000 crore (US$ 50 billion) of more investment in sectors across the value chain. The government estimates addition till now of a million units of spindle capacity in the spinning sector and setting up of over 1,000 units in technical textiles.

• The Textile Ministry of India earmarked ` 690 crore (US$ 106.58 million) for setting up 21 ready made garment manufacturing units in seven states for development and modernisation of Indian Textile Sector.

Some of initiatives taken by the government to further promote the industry are as under:

• The Directorate General of Foreign Trade (DGFT) has revised rates for incentives under the Merchandise Exports from India Scheme (MEIS) for two subsectors of Textiles Industry - Readymade garments and Made ups - from 2 per cent to 4 per cent.

• The Government of India plans to introduce a mega package for the powerloom sector, which will include social welfare schemes, insurance cover,

Annual Report 20185

cluster development, and upgradation of obsolete looms, along with tax benefits and marketing support, which is expected to improve the status of power loom weavers in the country.

• The Government of India has taken several measures including Amended Technology Up-gradation Fund Scheme (A-TUFS), launch of India Handloom Brand and integrated scheme for development of silk industry, for the strategic enhancement of Indian textiles quality to international standards.

The future for the Indian textile and fashion industry looks promising, buoyed by both strong domestic consumption as well as export demand. With consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the past decade with the entry of several international players like Marks & Spencer, Guess and Next into the Indian market.

High economic growth has resulted in higher disposable income. This has led to rise in demand for products creating a huge domestic market. The domestic market for apparel and lifestyle products, currently estimated at US$ 85 billion, is expected to reach US$ 160 billion by 2025.

The Indian cotton textile industry is expected to showcase a stable growth in FY2017-18, supported by stable input prices, healthy capacity utilisation and steady domestic demand*.

RETAIL INDUSTRY OVERVIEW

The retail market India is the 5th largest market in the world, while accounting for for 10% of India’s GDP and 8% of its total employment. From US$ 672 billion in 2017, the Indian retail market is expected to grow to US$1.1 trillion by 2020, while the modern retail market in India is expected to double in size over the next three years. With the growth in urbanisation, increase in disposable income, and improving lifestyle, the dynamics of Indian retail market are changing and growing rapidly. Despite many hiccups in the real estate industry, there were 600 operational malls as of December 2017. The year 2017 witnessed entry of almost 15 new global brands into the country.

With considerable increase in rentals across metro cities, the retail projects in Indian Tier II and Tier III cities continue to gain traction and have received investments of US$ 6,192 million between 2006-17. Further, the international airport connectivity across Tier II cities such as Aurangabad, Coimbatore, Lucknow, Kochi, Bhubaneswar, and Nagpur, as well as rising levels of disposable income, have prompted various global and local brands to plan their expansion plans in these cities.

Demand for retail space on high streets is quite high. This, in addition to an increase in the FDI limit for multi-brand retail, will lead to a significantly higher demand for retail space.

The per capita Income in Tier II and Tier III cities are expected to double by the end of 2020, which will give rise to consumption in the city and the demand of the residential real estate market.

Per Capita Income (in 000’s)

203

272

371

117158

217

0

100

200

300

400

2010 2015 2020

8 Metros 42 Tier II & Tier III cities

Retail Sector: Equity Investment Trends

0.372

0.046

0.581

Tier I (A) Tier I (B) Tier II

Source: EY India’s Growth Paradigm & JLL , 42 tier II & tier III cities include Coimbatore and Aurangabad

Omni Channel Retail Expansion

Major e-commerce companies in India continued to expand their retail networks including opening physical outlets.

The retail ecosystem in India is at the forefront of change as one third of India’s total population consists of millennials aged between 18-35 years and this generation is driving rapid growth within various consumer markets. India’s population below 35 years of age, with exposure to global retail markets, are expected to drive the demand for organised retail.

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Increasing Share of Organized Retail

92%80%

8%20%

0%

25%

50%

75%

100%

FY2017 FY2020Unorganized Organized

Source: IBEF. 2017

BUSINESS OVERVIEW

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.

Provogue Operations

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 as well as through its ecommerce portal, Provogue.com and e-commerce partners.

Internal Control System 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.

OPPORTUNITIES AND THREATS

Opportunities

The retail sector in India is today one of the fastest growing business segments in the country, comprising over 14 million outlets and employing over 20 million people. Rise in disposable income, changing lifestyles and favourable demographics are the key factors driving this growth.

With organised retail and e-commerce expected to grow at a rate of over 20% per annum, India’s new consumption story continues to provide the Company immense opportunities. Our strong brand positioning further helps us to leverage this position.

Large investments in new retail concepts are changing the rapidly evolving organized retail landscape in India. This is not just restricted to the metros but has also spread to Tier-2 and Tier-3 cities. Provogue is expected to benefit significantly from a combination of the growth in retail and as the rise of the consuming class in Tier-2 and Tier-3 cities continues.

Threats

Apart from ever moving fashion trends and the emergence of new e-commerce players, demand for talent may result in increasing attrition of employees. The Company has adopted policies that will attract and retain the best talent.

RISK MANAGEMENT

Economic Risk

A slowdown in economic growth in India could cause the business to suffer as the Company’s 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 several years to come.

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.

Annual Report 20187

Fashion Risk

This risk would arise through the Company’s inability to set trends and understand changing fashion styles, which can lead to lower sales and profitability.

However, it is the Company’s 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 Company’s business.

The Company’s 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 Company’s communication to its customers. The Company also gives wide focus on customer preferences and conducts extensive in-house research to maintain top-of-the-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.

HUMAN RESOURCES

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 recognizes the performance and potentials of its employees.

Focused and organized 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 2018 stood at 132.

OUTLOOK

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

FINANCIAL PERFORMANCE

Standalone:

The Company’s gross (total) income for the financial year ended 31st March, 2018 stood at ` 9,758.85 lakhs against ` 21,852.08 Lakhs during the previous year and the Company was able to decrease the loss before tax implication to ` 15,487.54 Lakhs from ` 18,105.32 Lakhs as recorded during previous year. The loss after tax implication stood at ` 15,548.43 Lakhs as against a loss of ` 17980.72 Lakhs in the previous year.

Consolidated

The Consolidated gross (total) income of the Company has reduced to ` 12,918.52 Lakhs from ` 27130.02 Lakhs during the previous year. The loss before tax implication decreased to ` 17,431.42 Lakhs from ` 19509.57 Lakhs as recorded during previous year. The loss after tax implication minority interest was stood at ` 17,255.43 Lakhs as against a loss of ` 19483.23 Lakhs in the previous year.

Cautionary Statement

This document contains statements about expected future events, financial and operating results of PROVOGUE (INDIA) LIMITED, which are forward-looking. By their nature, forward looking statements require the Company to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that the assumptions, predictions and other forward-looking statements will not prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as a number of factors could cause assumptions, actual future results and events to differ materially from those expressed in the forward-looking statements. Accordingly, this document is subject to the disclaimer and qualified in its entirely by the assumptions, qualifications and risk factors referred to in the management’s discussion and analysis of PROVOGUE (INDIA) LIMITED’s Annual Report, 2017-18.

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NOTICENotice is hereby given that the 22nd Annual General Meeting of the shareholders of Provogue (India) Limited will be held on Saturday, 29th September, 2018 at 11 a.m. at Eden Hall, The Classique Club, Behind Infinity Mall, New Link Road, Andheri (West), Mumbai - 400053 to transact the following business:

As ordinary business:

1. To receive, consider and adopt the audited Financial Statements of the Company on a standalone and consolidated basis, for the financial year ended 31st March 2018 including audited Balance Sheet as at 31st March 2018 and the Statement of Profit & Loss and Cash Flow Statement for the year ended on that date along with the Reports of the Directors’ and Auditors’ thereon.

2. To appoint a Director in place of Mr. Salil Chaturvedi (DIN: 00004768), who retires by rotation and being eligible, offers himself for re-appointment.

3. To re-appoint Statutory Auditor of the Company and fix their remuneration:

“Resolved that pursuant to the provisions of Section 139 read with The Companies (Amendment) Act, 2017 and other applicable provisions, if any, of the Companies Act, 2013 and the Rules made thereunder and pursuant to the recommendation made by the Audit Committee of the Board, M/s Ajay Shobha & Co, Chartered Accountants (ICAI Firm Registration No. 317031E), who have offered themselves for re- appointment and have confirmed their eligibility in terms of the provisions of Section 141 of the Companies Act, 2013, and Rules made thereunder, be and are hereby appointed as the Statutory Auditors of the Company for second term of five years starting from the conclusion of the 22nd Annual General Meeting (AGM) until the conclusion of the 27th AGM of the Company to be held in the year 2023 and that the Board of Directors be and are hereby authorized to fix such remuneration as may be recommended by the Audit Committee in consultation with the Statutory Auditors

As Special Business:

4. To consider and approve the payment of remuneration to the Cost Auditors:

To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution

“Resolved that pursuant to Section 148 and other applicable provisions, if any, of the Companies Act, 2013 and the Rules made there under, as amended from time to time, the Company hereby approves the remuneration of ` 75,000 for the purposes of conducting the Cost Audit and other taxes at the rates applicable, payable to M/s. Ketki D. Visariya & Co. (Firm Registration No. 000362), Cost Accountants, Mumbai, who are appointed as Cost Auditors to conduct the audit of cost records maintained by the Company for the Financial Year 2018-19.

Resolved further that the Board of Directors of the Company be and is hereby authorised to do all acts and take all such steps as may be necessary, proper or expedient to give effect to this resolution.”

5. To approve the payment of remuneration to Mr. Deep Gupta Whole-time Director for remaining period of two years of his tenure with effect from 1st April 2018 till 31st March 2020.

To consider and, if thought fit, to pass the following resolution as a Special Resolution

“Resolved that pursuant to provisions of Sections 196, 197, 203 and any other applicable provisions of the Companies Act, 2013 and the rules made there under (including any statutory modification(s) from time to time or any re-enactment thereof for the time being in force) read with Schedule V to the said Act, and all other applicable circulars, notifications and guidelines issued by the Ministry of Corporate Affairs or any other authorities from time to time and such conditions and modifications as may be prescribed or imposed by any of the authorities while granting such approvals, permissions and sanctions and are agreed to by the Board of Directors (hereinafter referred to as ‘the Board’, which term shall be deemed to include any ‘Committee’ thereof and any person authorised by the Board in this behalf) and, further to the approval of Nomination and Remuneration Committee and Board of Directors, the consent of the Shareholders of the Company be and is hereby accorded for payment of remuneration to Mr. Deep Gupta, Whole-time Director for a remaining period of two years of his tenure from 1st April 2018 till 31st March,2020 (i.e. upto the terms of his appointment) on such terms and conditions as set out below:

PROVOGUE (INDIA) LIMITEDCIN: L18101MH1997PLC111924

Regd. Office: 105/106 Provogue House, 1st Floor, Off New Link Road, Andheri (W), Mumbai 400 053Ph: + 91-22-30680560 Fax: + 91-22-30680570 Email: [email protected]

Website: www.provogue.com

Annual Report 20189

a. Salary Grade of ` 3,00,000 to ` 6,00,000 per month.

b. Commission: Such amount for each accounting year as may be decided by the Board subject to the overall limit(s) as stated in point no. C

c. The total remuneration including salary, allowances, perquisites and commission shall not exceed the limit(s) as specified in Schedule V to the Companies Act, 2013.

d. Subject to superintendence, control and direction of the Board, he shall perform such duties and functions as would be commensurate with his position as the Whole time Director of the Company and as may be delegated by the Board from time to time

Resolved further that the Board of Directors be and is hereby authorised to vary or increase the remuneration specified above from time to time to the extent as the Board of Directors may deem appropriate, provided that such variation or increase, as the case may be, is within the overall limits specified under the relevant provisions of the Companies Act, 2013 and/ or as approved by the Central Government or any such other competent authority.

Resolved further that notwithstanding anything contained herein above, where in any financial year during the currency of his tenure, the company has no profit or its profits are inadequate, the remuneration stated above shall be paid as minimum remuneration to Mr. Deep Gupta, subject to the maximum ceiling of remuneration prescribed under Schedule V of the Companies Act 2013 and/or the approval of the Central Government wherever required or applicable.”

By Order of the Board of DirectorsProvogue (India) Limited

Sd/-Date: 11th May 2018 Vishant ShettyPlace: Mumbai Company Secretary

NOTES:

1. The Explanatory Statement pursuant to Section 102 of the Companies Act, 2013, which sets out details relating to Special Business at the meeting, is annexed hereto.

2. The members of the Company in their 18th Annual General Meeting (AGM) held on 30th September 2014 approved the appointment of M/s Ajay Shobha & Co., Chartered Accountants [Firm registration No. 317031E] as Statutory Auditors of the Company for a period of four years (as first term) to hold office from the conclusion of 18th AGM until the conclusion of the 22nd AGM of the Company to be held in the year 2018 in terms of provisions of

section 139(2) the Companies Act 2013 read with rule 5 of The Companies (Audit and Auditors) Rules, 2014.

Further, pursuant to said provisions of the Companies Act, 2013 a Chartered Accountants Firm can be further reappointed as statutory auditors in the same Company for a second term not exceeding to five years after the completion of first term. Considering a satisfactory performance and support extended by the auditors to the Company, the Audit Committee and Board of Directors proposed to appoint M/s Ajay Shobha & Co., Chartered Accountants as Statutory Auditors of the Company for second term of five consecutive years from the conclusion of 22nd AGM until the conclusion of the 27th AGM of the Company to be held in the year 2023. The approval of members of the Company for the same are requested.

3. A SHAREHOLDER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY/ PROXIES TO ATTEND AND VOTE INSTEAD OF HIMSELF/ HERSELF. THE PROXY NEED NOT BE A SHAREHOLDER OF THE COMPANY.

The instrument of Proxy in order to be effective, should be deposited at the Registered Office of the Company, duly completed and signed, not less than 48 hours before the commencement of the meeting. A Proxy form is sent herewith. Proxies submitted on behalf of the companies, societies etc., must be supported by an appropriate resolution/authority, as applicable.

Shareholders are requested to note that a person can act as a proxy on behalf of Shareholders not exceeding 50 shareholders provided shareholding of those shareholders in aggregate should not be more than 10% of the total share capital of the Company carrying voting rights. In case a proxy is proposed to be appointed by a Shareholder holding more than 10% of the total share capital of the Company carrying voting rights, then such proxy shall not act as a proxy for any other person or shareholder.

4. All documents referred to in the accompanying notice and the explanatory statement are open for inspection at the Registered Office of the Company during business hours on any working day except Saturdays up to the date of this Annual General Meeting of the Company.

5. Corporate Shareholders intending to send their authorized representative to attend the meeting pursuant to section 113 of the Companies Act 2013 are requested to send to the Company a certified true copy of Board resolution together with their specimen signature authorizing their representative to attend and vote on their behalf at the meeting.

6. To prevent fraudulent transactions, shareholders are advised to exercise due diligence and notify the Company of any change in address or demise of

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any shareholder as soon as possible. Shareholders are also advised not to leave their demat account(s) dormant for long. Periodic statement of holdings should be obtained from the concerned Depository Participant and holdings should be verified.

7. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number (PAN) by every participant in securities market. Shareholders holding shares in electronic form are, therefore, requested to submit the PAN to their Depository Participants with whom they are maintaining their demat accounts. Shareholders holding shares in physical form can submit their PAN details to the Company.

8. Pursuant to the provisions of IEPF Rules and the applicable provisions of the Companies Act, 2013, the Company has transferred the unpaid or unclaimed dividends declared up to financial years 2009-10, to the Investor Education and Protection Fund (IEPF) established by the Central Government. The Company has uploaded the details of unpaid and unclaimed dividends lying with the Company as on 28th September 2017 (date of the previous Annual General Meeting) on the website of the Company and the same can be accessed through the link: http://corporate.provogue.com/media/provogue/pdf/unpaid_shareholders/Statement_of_Unclaimed_and_Unpaid_Dividend_AGM_2017.pdf The said details have also been uploaded on the website of the IEPF Authority and the same can be accessed through the link: www.iepf.gov.in.

9. Adhering to the various requirements set out in the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended, the Company has, during financial year 2017-18, transferred to the IEPF Authority all shares in respect of which dividend had remained unpaid or unclaimed for seven consecutive years or more as on the due date of transfer, i.e. October 31, 2017. Details of such shares transferred to the IEPF Authority are available on the website of the Company and the same can be accessed through the link: http://corporate.provogue.com/media/provogue/pdf/unpaid_shareholders/List_of_unclaimed_dividends_and_share_for_IEPF_Transfer_30_10_2017.pdf The said details have also been uploaded on the website of the IEPF Authority and the said details can be accessed through the link: www.iepf.gov.in.

Shareholders are requested to note that no claim shall lie against the Company in respect of any dividend amount which remains unclaimed and unpaid for a period of 7 years or more and transferred to Investor Education and Protection Fund of the Central Government and/or corresponding shares thereto. However it may be noted that shares as well as unclaimed dividends transferred to IEPF Authority can be claimed back. Concerned shareholders/investors are advised to visit the www.iepf.gov.in or contact Link Intime India Private Limited, Registrar

and Transfer Agent of the Company for lodging their claim for refund of shares and/or dividend from the IEPF Authority.

Information in respect of such unclaimed dividend when due for transfer to the said Fund is given below:

Financial Year Ended

Date of declaration of Dividend

Last Date for Claiming Dividend

31.03.2011 23.09.2011 24.10.201831.03.2012 28.09.2012 29.10.201931.03.2013 30.09.2013 31.10.202031.03.2014 Not Declared Not Applicable31.03.2015 Not Declared Not Applicable31.03.2016 Not Declared Not Applicable31.03.2017 Not Declared Not Applicable

Shareholders who have not encashed the dividend warrants for the financial year ended 2010-11 and/or any subsequent years are requested to write to the Company giving necessary details along with claimant’s proof of identity and address.

10. Details pursuant to Regulations 36 (3) of the SEBI (LODR) Regulations, 2015 read with Secretarial Standard -2 in respect of the Directors seeking appointment/re-appointment at the Annual General Meeting, forms integral part of the notice. The Directors have furnished the requisite declarations for their appointment/re-appointment.

11. The notice of AGM along with Annual Report for 2017-18 is being sent by electronic mode to all the shareholders whose email IDs are registered with the Company/Depository Participant(s) unless any shareholder has requested for a physical copy of the same. For shareholders who have not registered their email addresses, physical copies are being sent by the permitted mode.

12. Non-resident Indian shareholders are requested to inform the Company or its RTA or to the concerned DPs, as the case may be, immediately the change in the residential status on return to India for permanent settlement.

13. Shareholders are requested to make all correspondence in connection with shares held by them by addressing letters directly to the Company or its RTA quoting their Folio number or their Client ID number with DPID number, as the case may be.

14. This notice is being sent to all shareholders of the Company whose name appears in the Register of Shareholders/ list of beneficiaries received from the depositories on the end of the Friday, 24th August 2018.

15. The entry to the meeting venue will be regulated by means of attendance slips. For attending the meeting, shareholders, proxies and authorised representatives of the shareholders, as the case may be, are requested to bring the enclosed attendance slip completed in all respects, including client ID and

Annual Report 201811

DPID, and signed. Duplicate attendance slips will not be issued/accepted.

16. All shareholders are requested to support Green Initiative of the Ministry of Corporate Affairs, Government of India and register their email addresses to receive all these documents electronically from the Company in accordance with Rule 18 of the Companies (Management & Administration) Rules 2014 and Rule 11 of the Companies (Accounts) Rules 2014. All the aforesaid documents have been uploaded on and are available for download from the Company’s website, being www.provogue.com. Kindly bring your copy of Annual Report to the meeting.

17. Rule 3 of the Companies (Management and Administration) Rules 2014 mandates that the register of shareholders of all companies should include details pertaining to email address, permanent account number (PAN) or CIN, unique identification number, if any; father’s/ mother’s/ spouse’s name, occupation, status, nationality; in case shareholder is a minor, name of guardian and the date of birth of the shareholder, and name and address of nominee. All shareholders are requested to update their details as aforesaid with their respective depository.

18. No gifts shall be provided to shareholders before, during or after the AGM.

19. Shareholders may pursuant to section 72 of the Companies Act 2013 read with Rule 19 of the Companies (Share Capital and Debentures) Rules 2014 file nomination in prescribed form SH-13 with the respective depository participant.

20. Shareholders are requested to notify change of address and update bank accounts details to their respective depository participants directly.

21. A route map showing direction to reach the venue of the 22nd AGM is given at the end of this notice as per the requirement of Secretarial Standards -2 on General Meeting.

22. Voting through electronic means (“Remote E-voting”):

a. Pursuant to the provisions of section 108 of the Companies Act, 2013, Rule 20 of the Companies (Management & Administration) Rules 2014 as amended from time to time and sub Reg. (1) & (2) of Reg. 44 of SEBI (LODR) Regulations, 2015, the Company provides the electronic facility to its members enabling them to exercise their right to vote on agendas of AGM through e-voting services provided by the Central Depository Services (India) Limited (CDSL). It is clarified that it is not mandatory for a shareholder to vote using the e-voting facility, and a shareholder may avail of the facility at his/ her/ its discretion, subject to compliance with the instructions prescribed below.

b. The facility for voting through polling paper shall be made available at the meeting and the shareholders attending the Meeting who have not casted their vote by remote e-voting shall be able to exercise their right at the Meeting through polling paper.

The instructions for shareholders voting by remote e-voting are as under:

A. In case of shareholders receiving the Notice of AGM via-email

i. The remote e-voting period begins on Wednesday, 26th September 2018 from 10.00 a.m. and ends on Friday, 28th September 2018 at 5.00 p.m. During this period shareholders’ of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date i.e. Saturday, 22nd September 2018 may cast their vote by Remote e-voting. The remote e-voting module shall be disabled by CDSL for voting thereafter. Once the vote on resolutions is cast by the Shareholder, the Shareholder shall not be allowed to change it subsequently.

Cut-off date means the date on which the right of voting of the shareholders shall be reckoned and a person who is not a shareholder as on the cut-off date should treat this notice for information purposes only.

Persons who have acquired shares and become shareholders of the Company after the dispatch of the Notice of the AGM but on or before the cut-off date i.e. Saturday, 22nd August 2018, may obtain their user ID and password for e-voting from Company’s registrar and transfer Agent, Link Intime India Private Limited or from CDSL. However, if the person is already registered with CDSL for remote e-voting then the existing User ID and Password can be used for remote e-voting.

ii. The shareholders should log on to the e-voting website www.evotingindia.com.

iii. Click on Shareholders.

iv. Now Enter your User ID

a. For CDSL: 16 digits beneficiary ID,

b. For NSDL: 8 Character DP ID followed by 8 Digits Client ID,

c. Shareholders holding shares in physical form should enter Folio Number registered with the Company.

v. Next enter the Image Verification as displayed and Click on Login.

vi. If you are holding shares in demat form and had logged on to www.evotingindia.com and voted on an earlier voting of any company, then your existing password is to be used.

12

vii. If you are a first time user follow the steps given below:

For Shareholders holding shares in Demat Form and Physical Form

PAN • Enter your 10 digit alpha-numeric PAN issued by Income Tax Department (Applicable for both demat shareholders as well as physical shareholders)

• Shareholders who have not updated their PAN with the Company/Depository Participant are requested to use the sequence number which is printed on address sticker pasted on envelop of this report.

Dividend Bank details OR DOB

• Enter the Dividend Bank Details or Date of Birth as recorded in your demat account or in the company records for the said demat account or folio in dd/mm/yyyy format.

• If both the details are not recorded with the depository or company please enter the shareholder id / folio number in the Dividend Bank details field as mentioned in instruction (iv).

viii. After entering these details appropriately, click on “SUBMIT” tab.

ix. Shareholders holding shares in physical form will then directly reach the Company selection screen. However, shareholders holding shares in demat form will now reach ‘Password Creation’ menu wherein they are required to mandatorily enter their login password in the new password field. Kindly note that this password is to be also used by the demat holders for voting for resolutions of any other company on which they are eligible to vote, provided that company opts for e-voting through CDSL platform. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential.

x. For Shareholders holding shares in physical form, the details can be used only for e-voting on the resolutions contained in this Notice.

xi. Click on the EVSN for the PROVOGUE (INDIA) LIMITED.

xii. On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/NO” for voting. Select the option

YES or NO as desired. The option YES implies that you assent to the Resolution and option NO implies that you dissent to the Resolution.

xiii. Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.

xiv. After selecting the resolution you have decided to vote on, click on “SUBMIT”. A confirmation box will be displayed. If you wish to confirm your vote, click on “OK”, else to change your vote, click on “CANCEL” and accordingly modify your vote.

xv. Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.

xvi. You can also take out print of the voting done by you by clicking on “Click here to print” option on the Voting page.

xvii. If Demat account holder has forgotten the same password then, enter the User ID and the image verification code and click on Forgot Password & enter the details as prompted by the system.

xviii. Voting by using mobile application:

Shareholders can also cast their vote using CDSL’s mobile app m-Voting available for android based mobiles. The m-Voting app can be downloaded from Google Play Store, Apple and Windows phone. Please follow the instructions as prompted by the mobile app while voting on your mobile.

xix. Note for Non – Individual Shareholders and Custodians

• Non-Individual shareholders (i.e. other than Individuals, HUF, NRI etc.) and Custodian are required to log on to www.evotingindia.com and register themselves as Corporates.

• A scanned copy of the Registration Form bearing the stamp and sign of the entity should be emailed to [email protected].

• After receiving the login details a compliance user should be created using the admin login and password. The Compliance user would be able to link the account(s) for which they wish to vote on.

• The list of accounts should be mailed to [email protected] and on approval of the accounts they would be able to cast their vote.

• A scanned copy of the Board Resolution and Power of Attorney (POA) which they


have issued in favour of the Custodian, if any, should be uploaded in PDF format in the system for the scrutinizer to verify the same.

xx. In case you have any queries or issues regarding remote e-voting, you may refer the Frequently Asked Questions (“FAQs”) and e-voting manual available at www.evotingindia.com under help section or write an email to [email protected].

B. In case of shareholders receiving the physical copy of the Notice of AGM:

Shareholders holding shares in either Demat or physical mode who are in receipt of Notice of AGM in physical form may opt for e-voting. Please follow

steps from sr. no. (i) to (xix) under the heading “A” above to vote through e-voting platform.

In the event a shareholder casts his votes through both processes i.e. e-voting and Polling Paper, the votes casted through the e-voting system would be considered, and the Polling Paper would be disregarded.

The results declared alongwith the Scrutinizer’s Report shall be placed on the Company’s website www.provogue.com and on the website of CDSL, i.e. www.evotingindia.com within two days of the passing of the resolutions at the 22nd AGM of the Company and communicated to BSE Limited and National Stock Exchange of India Limited, where the shares of the Company are listed.

DETAILS OF DIRECTORS SEEKING APPOINTMENT/RE-APPOINTMENT AT ENSUING ANNUAL GENERAL MEETING

[Pursuant to Regulation 36(3) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Clause 1.2.5 of the Secretarial Standard-2]

Name of the Director Mr. Salil Chaturvedi, Non Executive Director

Date of Birth 22nd April, 1971

Date of first appointment 17th November, 1997

Qualification B. Sc

Shareholding of directors 1,02,95,135 equity shares

Directors Inter-se relationship He is brother of Mr. Nikhil Chaturvedi and Mr. Akhil Chaturvedi.

Years of experience 18+

No. of Board Meeting attended in FY 3

Area of expertise Being a Non-Executive Director of the Company Mr. Salil Chaturvedi has been associated with the Company as director since 1997. He possesses rich and varied experience in retail industry, he often contributed to the Company with his valuable advises.

Other public limited companies* in which directorship held

a. Prozone Intu Properties Limitedb. Provogue (India) Limitedc. Brightland Developers Private Limitedd. Provogue Personal Care Private Limited

Chairman/ member of Committees of Board of other Companies

Prozone Intu Properties Limited• Audit Committee – Member• Stakeholders Relationship Committee – Member Provogue (India) Limited• Stakeholders Relationship Committee – Chairperson

14

Name of the Director Mr. Deep Gupta, Whole-time Director & CFO

Date of Birth 24th October 1968

Date of first appointment 17th November 1997

Qualification MBA

Shareholding of directors 56,73,445 equity shares

Directors Inter-se relationship N.A.

Years of experience 18+

No. of Board Meeting attended in FY 4

Area of expertise Mr. Deep Gupta is a co-founder and leads accounts, finance teams of the Company; He is actively involved in E-commerce, CSD business and new product category incubation.

Other public limited companies* in which directorship held

a. Acme Advertisements Private Limitedb. Proflippers India Private Limited

Chairman/ member of Committees of Board of other Companies

Provogue (India) Limited• Stakeholders’ Relationship Committee – Member

* The details of Directorships as on 31st March 2018, in public Companies including private companies which are subsidiaries of public companies (excluding foreign and private companies) and details of memberships and chairmanships in Committees (includes only Audit Committee and Stakeholders’ Relationship Committee).




EXPLANATORY STATEMENT IN RESPECT OF THE SPECIAL BUSINESSES PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013

Item No 4

The Board, on the recommendation of the Audit Committee, has approved the appointment of M/s. Ketki D. Visariya & Co. (Firm Registration No. 000362), Cost Accountants as Cost Auditor of the Company for the financial year ending on 31st March 2019, to conduct audit of cost accounting records of the Company as may be required under the Companies Act, 2013, and Rules made thereunder, at a remuneration of 75,000/-, excluding applicable taxes and out of pocket expenses, if any.

In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration proposed to be paid to the Cost Auditor is required to be ratified by the shareholders of the Company. Accordingly, consent of the members is sought for passing an Ordinary Resolution as set out at Item No. 4 of the Notice for ratification of the remuneration payable to the Cost Auditors.

None of the Directors, Key Managerial Personnel and their relatives are, in any way, concerned or interested, financially or otherwise, in the proposed resolution.

Item No 5

The Members pursuant to the recommendation of Nomination and Remuneration Committee and the Board of Directors in its meeting held on 12th February 2015, had approved the appointment of Mr. Deep Gupta, Whole-time Director of the Company for a period

of 5 years effective from 1st April 2015 with an annual remuneration of ` 60 Lakhs per annum.

Considering the rich and varied experience and knowledge of the business coupled with sound understanding of the Industry possessed by the appointee, the Nomination and Remuneration Committee and Board of Directors of the Company on 14th February 2018 subject to the approval of members of the Company at ensuing annual general meeting approved the payment of remuneration to Mr. Deep Gupta, Whole-time Director of the Company for remaining period of his tenure of two years with effect from 1st April 2018 to 31st March, 2020

The terms and conditions of the proposed appointment in terms of proviso of section 196(4) of the Companies Act 2013 are as under;

Appointee: Mr. Deep Gupta

a. Salary Grade of ` 3,00,000 to ` 6,00,000 per month.

b. Commission: Such amount for each accounting year as may be decided by the Board subject to the overall limit(s) as stated in point no. C

c. The total remuneration including salary, allowances, perquisites and commission shall not exceed the limit(s) as specified in Schedule V to the Companies Act, 2013.

d. His appointment shall be subject to superintendence, control and direction of the Board. He shall perform such duties and functions as would be commensurate with his position as the Whole-time Director of the Company and as may be delegated by the Board from time to time.

Statement of information as required under proviso to section II of part II of Schedule V of the Companies Act 2013 is as under;

I. General Information:

1 Nature of Industry Readymade Garments & Fashion Accessories

2. Date or expected date of commencement of commercial production

During the year 1999

3 In case of new companies, expected date of commencement of activities as per project approved by financial institutions in the prospectus

Not applicable

16

4 Financial performance based on given indicators; ( ` In lakhs)

Indicators FY 2017-18 FY 2016-17 FY 2015-16

Income from Operations 9,177.80 21,353.10 42,343.72

Other income 581.05 498.98 588.58

Total income 9,785.85 21,852.08 42,932.30

Less: Total expenses 23,524.35 39,957.41 62,307.22

Less: Exceptional items 1,722.04 - -

Profit/ (loss) before tax (15,487.54) (18,105.33) (19,374.92)

Less: Tax expenses 60.89 (124.60) 35.36

Profit/ (loss) after tax (15,548.43) (17,980.73) (19,410.29)

5 Financial investments and collaborations, if any

As on 31st March 2018, 5.88% equity shares of the Company is held by foreign shareholders

II. Information about the appointee:

Particulars Mr. Deep Gupta

Background details Mr. Deep Gupta is a co-founder and leads accounts, finance teams of the Company; He is actively involved in E-commerce, CSD business and new product category incubation. He has more than 18 years experience in the management and administration

Past remuneration (` in lakhs) 2017-18 60,00,000

2016-17 60,00,000

2015-16 60,00,000

Recognition or awards NA

Job Profile and his suitability The appointee is a Co-Promoter and involved in business of the company since its incorporation. During his tenures, Company progressed manifolds and achieved a good market share and recognition. His contribution is beneficial for further growth and development of the Company

Remuneration proposed ` 60 lakhs per annum

Comparative remuneration profile with respect to industry, size of the company, profile of the position and person

The payment of aforesaid remuneration stated at resolution No. 5 is reasonable and comparable to the remuneration paid to Professional Directors in the industry and hence is more than justified

Pecuniary relationship directly or indirectly with the company or relationship with the managerial personnel, if any

Mr. Deep Gupta, Whole-time Director of the Company does not have any other pecuniary relationship, directly or indirectly with the Company or with any managerial personnel besides his shareholding in the Company and the remuneration set out in the respective resolution at Item No. 5.


III. Other Information:

Reasons of loss or inadequate profits It’s been an extremely challenging year for the Company. A combination of factors has resulted in reporting a loss.

The following are the key reasons for the loss during the year:

a. 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.

b. Overall consumption remains slow, depressing retail growth, even with a more optimistic domestic economic forecast.

c. Despite the slowdown in consumption retail costs continue to be high which depresses operating margins.

Steps taken or proposed to be taken for improvement a. Firstly, company has reduced the number of stores to redress supply demand imbalance and bring operating margins under control.

b. Company is constantly working on reducing stocks in the system and releasing working capital through more responsive design-to-market mechanisms and working closely with vendor base to be aligned for just-in-lime delivery.

c. Company is increasing focus online to broaden the offer and become available to potential customers in every corner of the country.

Expected increase in productivity and profits in measurable terms

Barring unforeseen circumstances, the Company hopes to increase the revenue and profits by improved sales margins in coming year. However those are not measurable at this point of time.

IV. Disclosures:

All necessary information has been given under the section of Corporate Governance Report forming part of this report.

Save and except the above, none of the other Directors / Key Managerial Personnel of the Company/ their relatives is, in any way, concerned or interested, financially or otherwise, in the above resolutions.



18

ROUTE MAP TO THE AGM VENUE


To

The Members,

Provogue (India) Ltd

Your Directors are presenting their 22nd report on the business and operations of your Company for the year ended 31st March, 2018.

FINANCIAL RESULTS & OPERATIONS

( ` In Lakhs)

Particulars Standalone Consolidated31.03.2018 31.03.2017 31.03.2018 31.03.2017

Income from Operations 9,177.80 21353.10 12,685.03 26,781.83Add: Other Income 581.05 498.98 233.49 348.19Total Income 9,758.85 21852.08 12,918.52 27130.02Less: Total Expenditure 23,524.35 39957.40 27,633.67 46639.59Less : Exceptional item 1,722.04 - 2,716.27 -Profit/ (loss) before Tax (15,487.54) (18,105.32) (17,431.42) (19,509.57)Less: Deferred Tax and Taxes 60.89 (124.60) 217.13 212.15Profit/ (loss) after Tax for the year (15,548.43) (17,980.72) (17,648.55) (19,721.73)Less: Minority Interest - - (393.12) (238.51)Profit/ (loss) after Tax for the year (15,548.43) (17,980.72) (17,255.43) (19483.23)

STATE OF COMPANY’S AFFAIRS / FINANCIAL PERFORMANCE

DIRECTORS’ REPORT

Standalone:

The Company’s gross (total) income for the financial year ended 31st March, 2018 stood at ` 9,758.85 lakhs against ` 21,852.08 Lakhs during the previous year and the Company was able to decrease the loss before tax implication to ` 15,487.54 Lakhs from ` 18,105.32 Lakhs as recorded during previous year. The loss after tax implication stood at ` 15,548.43 Lakhs as against a loss of ` 17980.72 Lakhs in the previous year.

Consolidated

The Consolidated gross (total) income of the Company has reduced to ` 12,918.52 Lakhs from ` 27130.02 Lakhs during the previous year. The loss before tax implication decreased to ` 17,431.42 Lakhs from ` 19509.57 Lakhs as recorded during previous year. The loss after tax implication minority interest was stood at ` 17,255.43 Lakhs as against a loss of ` 19483.23 Lakhs in the previous year.

DIVIDEND & TRANSFER TO RESERVES

In view of the Company’s carried forward and current losses, your Directors do not recommend any dividend for the year under review. Hence, no amount was transferred to the general reserves.

STRATEGIC DEBT RESTRUCTURING SCHEME

Pursuant to the Strategic Debt Restructuring (SDR) Scheme invoked by the SDR Lenders in terms of Reserve Bank of India (RBI) Circular no. DBR.BP.BC.No.101/21.04.132/2014‐15 dated 8th June 2015 and

members’ approval for conversion of debt into equity, the Company on 9th August 2016 allotted 11,90,24,732 fully paid up equity share of face value of Re. 1/‐ each at a price of ` 7.66/‐ per share to SDR Lenders on preferential basis against the conversion of outstanding dues of ` 91.17 Crore out of total outstanding loan of ` 305.35 Crore payable to SDR Lenders on the reference date (i.e., 25th January 2016), enabling the SDR Lenders collectively to hold not less than 51% of the total paid up equity share capital of the Company. The said shares were subject to lock in requirement till 25th August 2017.

SHARE CAPITAL

The paid-up equity share capital of your company stood at ` 2333.82 lakhs consisting of 23,33,81,827 equity shares of Re. 1/- each fully paid-up. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on 31st March 2018, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

LISTING

The Equity Shares of the Company continue to list on BSE Limited and National Stock Exchange of India Limited and the listing fees for the financial year 2018-19 have been paid.

CHANGE IN THE NATURE OF BUSINESS:

There was no change in the nature of business of the Company during the year under report.

20

SUBSIDIARY, JOINT VENTURE COMPANIES AND ASSCOCIATES COMPANIES:

As on 31st March 2018, the Company has 11 subsidiaries including 1 Step-down subsidiary, 2 foreign subsidiaries and has 2 Associate companies.

Indian Subsidiary Companies:

i) Acme Advertisements Pvt. Ltd.

ii) Brightland Developers Pvt. Ltd.

iii) Faridabad Festival City Pvt. Ltd

iv) Millennium Accessories Ltd.

v) Profab Fashions (India) Ltd.

vi) Provogue Infrastructure Pvt. Ltd.

vii) Proflippers India Private Limited

viii) Provogue Personal Care Private Limited

Step-down Subsidiary:

i) Standard Mall Private Limited

Foreign Subsidiaries:

i) Elite Team (HK) Ltd, Hong Kong

ii) Provogue Holding Ltd, Singapore (under Strike Off process)

Associate Companies:i. ProSFL Private Limited (Joint venture)

ii. Sporting and Outdoor Ad Agency Pvt Ltd. (w.e.f 17th October 2017)

In addition to above during the year Pronet Interactive Pvt. Ltd ceased to be a subsidiary Company with effect from 18th August 2017 due to its conversion into Limited Liability Partnership.

The Board of Directors (‘the Board’) regularly reviews the affairs of the subsidiary/joint venture/associate companies. A statement containing the salient features of the financials statement of subsidiary/joint venture/associate companies pursuant to the provision of section 129 (3) of the Companies Act 2013 read with rule 8(1) of the Companies Accounts Rules, 2014, is provided in format AOC-1 to the consolidated financial statement and therefore not repeated to avoid duplication.

In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited financial statements of each of its subsidiaries, are made available on our website www.provogue.com in due course. These documents will also be available for inspection during business hours at the registered office of the Company

The copies of accounts of subsidiaries companies can be sought by the member of the company by making a written request address to the Company Secretary at the registered office of the company.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by the Securities and Exchange Board of India (SEBI). The Company has also implemented several best governance practices. The report on Corporate Governance as stipulated under the Listing Regulations forms an integral part of this Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

MANAGEMENT DISCUSSION AND ANALYSIS:

A detailed review of operations, performance and future outlook of the Company and its business, as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of Annual Report under the head ‘Management Discussion and Analysis’.

INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detention of fraud, error reporting mechanisms, the accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures

SIGNIFICANT AND MATERIAL ORDERS

There were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and company’s operations in future for the year under review

PUBLIC DEPOSITS

Your Company has not accepted any Public Deposit within the meaning of Chapter V of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 and thus, no amount of principal or interest was outstanding as on the Balance Sheet date.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

• Director retire by rotation :

Pursuant to the provisions of section 152 of the Companies Act, 2013, the office of Mr. Salil Chaturvedi, (DIN: 00004768) is liable to retire by rotation at the ensuing Annual General Meeting, and being eligible, has offered himself for re-appointment. Accordingly, the proposal of his re-appointment has been included in the Notice convening the Annual General Meeting of the Company

A brief resume of Mr. Salil Chaturvedi as per the requirements of Reg. 36(3) of the SEBI (LODR)


Regulations, 2015, are given in the section of notice of AGM forming part of the Annual Report.

• Payment of remuneration to Executive Director for a further period of 2 years of appointment

The Nomination & Remuneration Committee and the Board of Directors on 14th February 2018 subject to the approval of members of the Company at ensuing annual general meeting approved the payment of remuneration to Mr. Deep Gupta, Whole-time Director of the Company for remaining period of his tenure of two years with effect from 1st April 2018 to 31st March, 2020. Detailed explanations on the matter are given in explanatory statement of notice of this AGM, forming part of this report.

• Declaration by Independent Directors:

The Company has received necessary declarations from all independent directors pursuant to the requirement of section 149(7) of the Companies Act 2013 that they meet the criteria of independence laid down in section 149(6) of the Companies Act 2013 and Reg. 16 (1) (b) of the SEBI (LODR) Regulations, 2015.

• Annual Familiarization Programme

The details of programmes for familiarization of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at the link: http://corporate.provogue.com.

• Key Managerial Personnel:

There has been no change in Key Managerial Personnel during the financial year 2017-18. As on 31st March 2018, the following are the Key Managerial Personnel of the Company.

Name Designation


Mr. Deep Gupta Whole-time Director & Chief Financial Officer

Mr. Vishant Shetty Company Secretary and Compliance Officer

• Board evaluation

Pursuant to the Companies Act, 2013 a formal annual evaluation needs to be conducted by the Board of its own performance and that of its committees and individual directors. Schedule IV to the Companies Act, 2013 states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Director being evaluated.

The Board based on evaluation criteria recommended by the ‘Nomination and Remuneration Committee’ and ‘Code for Independent Directors’ and

pursuant to applicable regulations of Chapter II and Chapter IV read with schedule IV to SEBI (LODR) Regulations, 2015, evaluated the performance of Board members.

The Board after due discussion and taking into consideration of the various aspects such as performance of specific duties, obligations, Board’s functioning, composition of the Board and its Committees and governance expressed their satisfaction with the evaluation process and performance of the Board.

• Remuneration Policy

The Company believes that a diverse and inclusive culture is integral to its success. A diverse Board, among others, will enhance the quality of decisions by utilizing different skills, qualifications, professional experience and knowledge of the Board members necessary for achieving sustainable and balanced development. Accordingly, the Company has designed the Remuneration Policy to attract, motivate, improve productivity and retain manpower, by creating a congenial work environment, encouraging initiatives, personal growth and team work, and inculcating a sense of belonging and involvement, besides offering appropriate remuneration packages and superannuation benefits. This Remuneration Policy applies to Directors, Senior Management Personnel including its Key Managerial Personnel (KMP) of the Company and is attached to this report as ‘Annexure 1’.

Secretarial Standards

The Directors states that applicable Secretarial Standards, i.e. SS-1 and SS-2 relating to ‘Meeting of the Board of Directors’ and ‘General Meetings’, respectively, have been duly followed by the Company.

DIRECTORS RESPONSIBILITY STATEMENT

Your Directors state that:

a. in the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed alongwith proper explanation relating to material departures, if any;

b. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the loss of the Company for the year ended on that date;

c. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

22

d. the Directors have prepared the annual accounts on a ‘going concern’ basis;

e. the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

COMMITTEES OF THE BOARD

The Board of Directors of the Company has the following committees as on 31st March, 2018;

1. Audit Committee.

2. Nomination and Remuneration Committee.

3. Stakeholders Relationship Committee.

4. CSR Committee

The details of the Committees along with its composition, number of meeting and attendance at the meeting are provided in the Corporate Governance Report. The Board has accepted all the recommendations of the Audit Committee during the period under review.

AUDITORS

Statutory Auditors:

At the 18th Annual General Meeting of the Company held on 30th September 2014, M/s Ajay Shobha & Co, Chartered Accountants, (Firm Reg. No. 317031E), was appointed as the Statutory Auditors of the Company to hold office from the conclusion of the 18th Annual General Meeting until the conclusion of the 22nd Annual General Meeting, subject to the ratification by the Shareholders each year and on such remuneration as may be mutually agreed upon between the Board of Directors of the Company and the Statutory Auditor.

As the first term of M/s Ajay Shobha & Co, Chartered Accountants will expire at the conclusion of the ensuing 22nd Annual General Meeting of the Company; it is proposed to re-appoint M/s Ajay Shobha & Co, Chartered Accountants, as Statutory Auditor for a second term of five years, subject to the approval of the Shareholders of the Company. Pursuant to the recommendation of the Audit Committee of the Board, the Board of Directors has proposed the appointment of M/s Ajay Shobha & Co, as the Statutory Auditors of the Company for a period of five consecutive years (second term) and to hold office from the conclusion of the 22nd Annual General Meeting upto the conclusion of the 27th AGM of the Company to be held in the year 2023. The Shareholders are requested to consider their appointment on such remuneration as may be mutually decided by the Board and the Auditors.

In this regard, the Company has received a certificate from the said Statutory Auditor to the effect that the

appointment, if made, would be in accordance with the relevant provisions of Section 141 of the Companies Act, 2013. Further as required under Regulation 33(1)(d) of the Listing Regulations, the Statutory Auditors have confirmed that they have subjected themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and that they hold a valid certificate issued by the Peer Review Board of ICAI.

Auditors’ observations and management’s response to auditors’ observation:

The auditors of the Company have qualified their report to the extent and as mentioned in the Auditors Report. The auditors’ qualifications on standalone and consolidated financial and management response thereto are as under:

The Company has not provided interest for the quarter and year ended March 31, 2018 amounting to ` 740.50 lacs and ` 1481.00 lacs respectively and reversed interest provided post SDR amounting to ` 5,252.34 lacs payable to various lenders since the credit facilities are classified as sub-standard as per RBI guidelines. Had the Company provided interest for the quarter and year ended March 31, 2018, finance cost would have been higher by ` 740.50 lacs and ` 1481.00 lacs respectively and had the Company had not reversed post SDR interest, net loss would have been higher by ` 740.50 lacs and 6733.34 lacs for the quarter and year ended March 31, 2018.

Management response: The Company is in discussion with the bankers for a resolution plan, hence Company has not accrued interest for the period post SDR date and the same will be accounted on finalization of resolution plan.

Secretarial Auditor

Pursuant to Section 204 of Companies Act, 2013, the Board of Directors had appointed M/s. HS Associates, Company Secretaries to undertake the Secretarial Audit of the Company. The Secretarial Auditor’s Report is enclosed to this report as ‘Annexure 2’. The Secretarial Audit Report enclosed herewith is self explanatory.

Cost auditors

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of cost records maintained by the Company.

The Board of Directors, on recommendation of Audit Committee, has appointed M/s Ketki D. Visariya & Co., Cost Accountants, (Firm Registration Number: 000362) as Cost Auditor to audit the cost accounts of the Company for the financial year 2018-19. As required under the Companies Act, 2013, a resolution seeking member’s approval for remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting for their ratification. Your Company has received certificates from M/s Ketki D. Visariya & Co.,


Cost Accountants, informing their eligibility, willingness and independence to be appointed as cost auditors of the Company.

The Company has filed the cost audit report upto the financial year ended 31st March 2017 with MCA during the financial year

DISCLOSURES UNDER THE SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has been employing women employees in various cadres within its corporate office and its stores. The Company has in place a policy against Sexual Harassment in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committees is set up to redress complaints if received and are monitored on regular basis.

During the year under review, Company did not receive any complaint regarding sexual harassment.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 for the year ended March 31, 2018 is given below and forms part of the Directors’ Report

A. Conservation of Energy:

i) The steps taken or impact on conservation of energy:

Currently the operations of the Company do not involve high energy consumption. However, the Company has for many years now been laying great emphasis on the Conservation of Energy and has taken several measures including regular monitoring of consumption, implementation of viable energy saving proposals, improved maintenance of systems etc.

ii) The steps taken by the Company for utilizing alternate sources of energy: Nil

iii) The capital investment on energy conservation equipments: Nil

B. Technology Absorption:

i) The efforts made towards technology absorption :

The Company is monitoring the technological up-gradation taking place in other countries in the field of garment manufacturing and the same are being reviewed for implementation.

The benefits derived like product improvement, cost reduction, product development or import substitution: Product improvement

ii) In case of imported technology (imported during the last three years reckoned from the beginning of the Financial Year):

a) the details of technology Imported

Nil

b) the year of Import

c) whether the technology been fully absorbed

d) If not fully absorbed, areas where this has not taken place, reasons therefore and future plan of action

iii) The expenditure incurred on Research and Development during the year included in the manufacturing cost.- Not applicable

C. Foreign Exchange Earnings and Outgo:

( ` In Lakhs)

Particulars 2017-18 2016-17

Foreign Exchange Earnings 4,933.15 4,900.22

Foreign Exchange outgo 4.41 36.48

DISCLOSURES UNDER COMPANIES ACT 2013:

• Extract of Annual Return:

In accordance with section 134(3) of the Companies Act 2013, an extract of the annual return in the prescribed format is appended as ‘Annexure 3’ to the Boards’ Report.

• Number of meetings of the Board:

The Board met four times during the financial year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

• Committees of the Board:

The Board has established committees as per the requirement of Companies Act 2013 and SEBI (LODR) Regulations, 2015, including Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and CSR Committee.

A detailed note on the Board and its committees is provided under the Corporate Governance Report section in this Annual Report. The composition of the Committees as per the applicable provisions of the Act, Rules and SEBI (LODR) Regulations, 2015 are as under:

24

Committee Name

Composition of the Committee

Audit Committee

1. Mr. Dinesh Arya, Chairman

2. Mr. Hetal Hakani, Member

3. Mr. Akhil Chaturvedi, Member

Nomination & Remuneration Committee

1. Mr. Hetal Hakani, Chairman

2. Mr. Dinesh Arya, Member

3. Mr. Salil Chaturvedi, Member

Stakeholders Relationship Committee

1. Mr. Salil Chaturvedi, Chairman

2. Mr. Deep Gupta, Member

3. Mr. Akhil Chaturvedi, Member

CSR Committee

1. Mr. Deep Gupta, Chairman

2. Mr. Nikhil Chaturvedi, Member

3. Mr. Hetal Hakani, Member

• Vigil Mechanism/ Whistle Blower Policy:

In conformity with the requirements of Section 177 of the Companies Act, 2013, the Company has devised Vigil Mechanism and has formal whistle blower policy under which the Company takes cognizance of complaints made by the employees and others and also provides for direct access to the Chairman of Audit Committee in deserving cases.

Your Company hereby confirms that no directors/ employees were denied access to the Chairman of Audit Committee and that no complaints were received during the year under period.

The Whistle Blower Policy of the Company has been posted on the website of the Company and is available at http://corporate.provogue.com/investors.

• Particulars of loans, guarantees and investments:

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient under the provisions of Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 amended from time to time, are form part of the notes to the financial statements provided in this Annual Report.

• Particulars of material contracts or arrangements made with related parties:

The particulars of material contracts or arrangements made with related parties referred to in section 188(1) of the Companies Act 2013, in the prescribed form AOC-2 is appended as ‘Annexure 4’ to the Boards’ Report.

• Particulars of employees:

The table containing names and other particulars of Directors in accordance with the provisions of Section 197(12) of the Companies Act, 2013 read with rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is enclosed as Annexure 5 to the Board Report.

The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure as appended as ‘Annexure 6’ forming part of this report.

• Transfer to Reserves:

During the year, company has not transferred any amount to reserve.

• Material changes and commitments:

No material changes and commitments affecting the financial position of your Company have occurred during 31st March, 2018.

• Corporate Social Responsibility

There has been no change in constitution of the Corporate Social Responsibility Committee as on 31st March 2018. Mr. Deep Gupta, Whole-time Director & CFO heads the Committee as Chairman and Mr. Nikhil Chaturvedi, Managing Director and Mr. Hetal Hakani, Independent Director are the members of the Committee.

The CSR Committee in its meeting held on 14th February 2018 reviewed the draft financials of the Company for the period ended 31st December 2017, considering the continuous loss suffered by the Company over a period, decided not to incur any expenditure on CSR activity during financial year 2017-18.

REMOTE E-VOTING FACILITY TO MEMBERS:

In compliance with provisions of Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Rules, 2014 and Reg. 44 of SEBI (LODR) Regulations, 2015, the Company is pleased to provide members, the facility to exercise their right to vote at this Annual General Meeting (AGM) by electronic means and the business may be transacted through e-Voting Services provided by Central Depository Securities (India) Limited (CDSL).

ELECTRONIC FILING:

The Company periodically uploads the Annual Reports, Financial Results, Shareholding Pattern, Corporate Governance Reports and others reports and intimations


filed with Stock Exchanges etc. and other information on its website viz. www.provogue.com.

TRANSFER OF UNPAID/UNCLAIMED AMOUNTS OF DIVIDEND AND EQUITY SHARES TO INVESTOR EDUCATION AND PROTECTION FUND

Unclaimed Dividends

Pursuant to the provisions of Section 125 of the Companies Act, 2013 and the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the amount of unpaid dividends that are lying unclaimed for a period of 7 consecutive years from the date of its transfer to the unpaid dividend account, is liable to be transferred to the Investors’ Education & Protection Fund (IEPF). Accordingly, the unclaimed dividend amounting to ` 75,856/-, in respect of the financial year 2009-10 was transferred to the IEPF on 10th November 2017. The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 28th September, 2017 (date of last Annual General Meeting) on the Company’s website viz www.provogue.com, and on the website of the Ministry of Corporate Affairs. Further, please note that the unclaimed dividend in respect of the financial year 2010-11 must be claimed by the concerned shareholders on or before 24th October 2018, failing which it will be transferred to the IEPF, in accordance with the said Rules.

Transfer of underlying Equity Shares in respect of the Unclaimed Dividends to the IEPF Authority Account

In terms of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 as amended from time to time, the Company transferred the corresponding shares to IEPF,

where the dividends which have been unclaimed by the concerned shareholders for the last seven consecutive years viz., since FY 2009-10. Further dividend which remains unclaimed for the last 7 years since 2010-11 must be claimed by the concerned shareholders on or before 24th October 2018 for which Company has sent reminder letter to them. If the shareholders fail to claim the dividend, the company will be transferring the unclaimed dividend and the corresponding shares to IEPF within a period of 30 days from the due date. Details of unpaid and unclaimed dividends lying with the Company as on 28th September 2017 (date of the previous Annual General Meeting), are provided on the website, at http://corporate.provogue.com/investors/

The shareholders are requested to verify their records and claim their unclaimed dividends for the past years, if not claimed.

APPRECIATION

Your Directors take this opportunity to express their gratitude and sincere appreciation for the dedicated efforts of all the employees of the Company. Your Directors are also thankful to the esteemed share holders for their support and confidence reposed in the Company and to The Stock Exchanges, Government Authorities, Banks, Solicitors, Consultants and other business partners.

For and on behalf of Board of Director

Date: 11th May 2018

Sd/-Nikhil

Chaturvedi

Sd/-Deep

GuptaWhole time

Director DIN: 00004788

Place: Mumbai Managing Director

DIN: 00004983

26

ANNEXURE 1

REMUNERATION POLICY

Preamble

The Remuneration Policy of Provogue (India) Limited (the “Company”) is designed to attract, motivate, improve productivity and retain manpower, by creating a congenial work environment, encouraging initiatives, personal growth and team work, and inculcating a sense of belonging and involvement, besides offering appropriate remuneration packages and superannuation benefits. The policy reflects the Company’s objectives for good corporate governance as well as sustained long- term value creation for shareholders.

This Remuneration Policy applies to directors, senior management personnel including its Key Managerial Personnel (KMP) of the Company.

Principles governing the remuneration decisions

1. Support for strategic objective: Remuneration and reward frameworks and decisions shall be developed in a manner that is consistent with, supports and reinforces the achievement of the Company’s vision and strategy.

2. Transparency: The process of remuneration management shall be transparent, conducted in good faith and in accordance with appropriate levels of confidentiality.

3. Flexibility: Remuneration and rewards offerings shall be sufficiently flexible to meet both the needs of individuals and those of the Company whilst complying with relevant tax and other obligations.

4. Internal equity: The Company shall remunerate the Board members and the executives in terms of their roles within the organization. Positions shall be formally evaluated to determine their relative weight in relation to other positions within the Company.

5. External equity: the company shall endeavor to pay equitable remuneration, capable of attracting and retaining high quality personnel. Therefore the Company will remain logically mindful of the ongoing need to attract and retain high quality personnel and the influence of external remuneration pressures.

6. Affordability and sustainability: the Company shall ensure that remuneration of affordable on a sustainable basis.

Procedure for selection and appointment

1. Criteria for Board Members:

The Nomination and Remuneration Committee (“the Committee’), along with the Board, will review of a annual basis, appropriate skills, characteristics and experience required by the Board as a whole and its individual member. The objective is to have a Board with diverse background and experience in business, government, academics, technology and in areas that are relevant for the company’s operations.

In evaluating the sustainability of individual Board Members, the committees takes into account many factors including general understanding of the Company’s business, social perspective, educational and professional background and personal achievements.

The Committee evaluates each individual with the objective of having a group that best enables the success of the Company’s business. The Committee shall also identify suitable candidates in the event of a vacancy being created on the Board on account of retirement, resignation or demise of an existing Board Member. Based on the recommendations of the Committee, the Board shall evaluate the candidates and decides on the selection the appropriate member.

Criteria for evaluation of performance of Independent Directors:

1. Knowledge and skills in accounting and finance, business judgement, general management practices, crisis response and management, industry knowledge, strategic planning etc.

2. Personal characteristics matching the Company’s values, such as integrity, accountability, financial literacy, and high performance standards

3. Commitment to attend a minimum of 75% of meetings which will include the attendance through audio/video conferencing.

4. Ability and willingness to represent the Stakeholders’ long and short term interests

5. Awareness of the Company’s responsibilities to its customers, employees, suppliers,


regulatory bodies, and the communities in which it operates

6. Responsibility towards following objectives being an Independent Director

i. Maintenance of independence and abstain himself from availing of benefits, directly or indirectly from the Company

ii. Responsibilities of the Board as outlined in “Code for Independent Directors” as specified in Schedule IV to the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015

iii. Accountability under the Directors’ Responsibility Statement

iv. Overseeing the maintenance of Corporate Governance standards of the Company and ethical conduct of business

2. Criteria for other executives:

a. The Committee shall actively liaise with the relevant departments of the company to understand the requirement of management personnel and produce a written document thereon.

b. The Committee may conduct a wide ranging search for candidates for the positions of employees.

c. The professional, academic qualifications, professional titles, detailed work experience and all concurrently held positions of the candidates shall be complied as written documents.

d. The committee may examine the qualifications of the candidates on the basis of the conditions for appointment of the employees.

e. The Committee may carry out other follow up tasks based on the decisions and feedback from the Board of Directors, if any.

Compensation structure

a. Compensation to non-executive directors including Independent Directors

The non-executive directors shall be eligible for remuneration by way of payment of sitting fees only for attending the meetings of the Board of Directors and its committees. The amount of sitting shall be decided by the Board of Directors of the

Company subject to the revisions from time to time within maximum permissible limit prescribed under the respective provisions of the Companies Act, 2013. Taking into account the financial positions of the Company, the Board of Directors shall be entitled to decide whether to reduce or waive the payment of sitting for a meeting or for a period specific or permanently until otherwise decided by the Board.

Besides sitting fees, non-executive directors shall also be entitled to reimbursement of expenses incurred by them for attending the meeting of Board of Directors and its committees.

All compensation, apart from sitting fees and reimbursement of expenses as stated above, if recommended by the Committee shall be fixed by the Board of Directors and shall require previous approval of the shareholders in general meeting, subject to the maximum limit and other compliances as prescribed under the Companies Act, 2013 and rules made there under.

The special resolution shall specify the limits for the maximum numbers of stock options that can be granted to non-executive directors, in any financial year and in aggregate. However the independent directors shall not be entitled for any stock option.

b. Compensation to executive directors, key managerial personnel and senior management personnel

The remuneration determined for managing directors, whole-time directors and key management personnel are subjected to the approval of Board of Directors in due compliance with the provisions of the Companies Act 2013. The remuneration of the KMP and SMP after the appointment shall be informed to the Board of Directors and subsequent increment shall be decided by the Managing Director of the Company as per the HR policy of the Company. The executive directors shall not be eligible for payment of any sitting fees.

The Company shall formulate a credible and transparent framework in determining and accounting for the remuneration of the MD/ WTD/ KMPs and SMPs. Their remuneration shall be governed by the external competitive environment, track record, potential, individual performance and performance of the Company as well as industry standards.

28

Disclosure of information

Information on the total remuneration of members of the Company’s Board of Directors, Whole Time Directors and KMP/ senior management personnel may be disclosed in the Company’s annual financial statements as per statutory requirements.

Application and amendment to the policy

This Remuneration Policy shall continue to guide all future employment of Directors, Company’s Senior Management including Key Managerial Personnel and other employees.

The Board of Directors as per the recommendations of the Committee can amend this Policy, as and when deemed fit. Any or all provisions of this Policy would

be subject to revision / amendment in accordance with the rules, regulations, notifications etc. on the subject as may be issued by relevant statutory authorities, from time to time.

In case of any amendment(s), clarification(s), circular(s) etc. issued by the relevant authorities, not being consistent with the provisions laid down under this Policy, then such amendment(s), clarification(s), circular(s) etc. shall prevail upon the provisions hereunder and this Policy shall stand amended accordingly from the effective date as laid down under such amendment(s), clarification(s), circular(s) etc.

Dissemination

The Company’s Remuneration Policy shall be published on its website.

………………..


To,

The Members,

PROVOGUE (INDIA) LIMITED 105/106, Provogue House, 1st Floor, Off New Link Road, Andheri West, Mumbai 400053

We have conducted the Secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by PROVOGUE (INDIA) LIMITED (hereinafter called “The Company”). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of Secretarial Audit, we hereby report that in our opinion, the Company has, during the audit period ended on 31st March, 2018, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We herewith report that maintenance of proper and updated Books, Papers, Minutes Books, filing of Forms and Returns with applicable regulatory authorities and maintaining other records is responsibility of management and of the Company. Our responsibility is to verify the content of the documents produced before us, make objective evaluation of the content in respect of compliance and report thereon. We have examined on test check basis, the Books, Papers, Minute Books, Forms and Returns filed and other records maintained by the Company and produced before us for the financial year ended 31st March, 2018, as per the provisions of:

I. The Companies Act, 2013 (“The Act”) and the Rules made thereunder;

II. The Securities Contracts (Regulation) Act, (“SCRA”) and the Rules made thereunder;

III. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

IV. Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;

V. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (“SEBI Act”) to the extent applicable to the Company: -

a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

c. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;

d. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 ;

e. The Company has complied with the requirements under the Equity Listing Agreements entered into with BSE Limited and National Stock Exchange of India Limited.

VI. The Management has identified and confirmed the applicable Acts, Laws and Regulations specifically applicable to the Company as given below.

The Environment (Protection) Act, 1986;

Air (Prevention and control of Pollution) Act, 1981 and rules made thereunder;

Industries (Development & Regulation) Act, 1951;

Factories Act, 1948;

Labour Laws and other incidental laws related to labour and employees appointed by the company either on its payroll or on contractual basis as related to wages, gratuity, provident fund, ESIC compensation etc.

We have also examined compliances with the applicable clauses of the following:

1. Secretarial Standards 1 and 2 issued by The Institute of Company Secretaries of India along with revised Secretarial Standards 1 and 2 as issued by The Institute of Company Secretaries of India with effect from 1st October, 2017;

2. The Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015);

During the year under review, the Company has complied with the provisions of the Act, Rules,

ANNEXURE 2

FORM NO. MR-3

SECRETARIAL AUDIT REPORT FOR FINANCIAL YEAR ENDED ON 31ST MARCH, 2018.

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

30

Regulations, Guidelines, and Standards as mentioned above except for:

• During the year under audit, the loans granted to other bodies corporate after enforcement of The Companies Act 2013 are in compliance with provisions of section 186 of the Companies Act 2013. However certain loans granted prior to that were not bearing stipulated interest rate thereon.

• The financials statements of the Company give a true and fair view in conformity with accounting principles generally accepted in India except the possible effect of non-provision of interest amounting to ` 1481 lacs and reversal of post SDR interest amounting to ` 5,252.34 lacs payable to various lenders in books of accounts of the Company as at 31st March 2018, since the credit facilities are classified as sub-standard as per RBI Guidelines.

We further report that:

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. There were no changes in the composition of the Board of Directors took place during the year.

Adequate notice is given to all Directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

We further report that there are adequate systems and processes in the company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that during the audit period,:-

1. The company had sold a part of its investment in its Subsidiary i.e. Sporting and Outdoor Ad Agency Private Limited and the same has ceased to be its subsidiary w.e.f 18th October, 2017.

2. The Company had duly made an application to the ROC for Compounding order for seeking condonation of delay in filing of Cost Audit Report for the financial year 2013-14. The Hon’ble National Company Law Tribunal (NCLT), Mumbai has passed a Compounding in its hearing held on 27th March, 2018 and necessary compounding fee was duly paid.

3. During the year 2017-18, Company has made default in repayment on loan to lenders and credit facilities were classified as sub-standard as per RBI guideline. As per the explanation received from management, the Company is in negotiation with lenders for a resolution plan.

For HS AssociatesCompany Secretaries

Sd/-Hemant Shetye

PartnerDate: 11th May 2018 FCS No.: 2827Place: Mumbai CP No.: 1483

Note: This report is to be read with our letter of even date which is annexed as Annexure A and forms as integral part of this report.


Annexure A

To, The Members,Provogue (India) LimitedMumbai

Our report of even date is to be read along with this letter.

Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.

We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of Secretarial Records. The verification was done on test basis to ensure that correct facts are reflected in Secretarial Records. We believe that processes and practices, we followed provide a reasonable basis for our opinion.

We have not verified the correctness and appropriateness of financial records and Books of Accounts, and related documents of the Company.

Wherever required, we have obtained the Management representation about the compliance of laws, rules and regulation and happening of events, etc.

The Compliance of the provisions of Corporate and the other applicable laws, rules, regulations, standards is the responsibility of Management. Our examination was limited to the verification of procedures on test basis.

The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the Management has conducted the affairs of the Company.

For HS AssociatesCompany Secretaries

Sd/-Hemant Shetye

PartnerDate: 11th May 2018 FCS No.: 2827Place: Mumbai CP No.: 1483

32

ANNEXURE 3

FORM NO. MGT 9

EXTRACT OF ANNUAL RETURNas on financial year ended on 31.03.2018

Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company (Management & Administration ) Rules, 2014.

I REGISTRATION & OTHER DETAILS:

i CIN L18101MH1997PLC111924ii Registration Date 17th November, 1997iii Name of the Company Provogue (India) Ltd.iv Category/Sub-category of the Company Company Limited by share/ Indian Non-government Companyv Address of the Registered office

& contact details105/ 106, Provogue House, 1st Floor, Off New Link Road, Andheri (West), Mumbai-400053 Email ID : [email protected] contact no : +91 22 3068 0560/3068 0640

vi Whether listed company Yesvii Name , Address & contact details of the

Registrar & Transfer Agent, if any.Link Intime India Private Limited C-101, 247 Park, L.B.S Marg, Vikhroli (W), Mumbai - 400 078 Email ID : [email protected] Contact No : +91 22 49186000

II PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10% or more of the total turnover of the company shall be stated

SL. No.

Name & Description of main products/services NIC Code of the Product /

service

% to total turnover of

the company1 Manufacturing of wearing apparel except fur apparel 141 94.05%

III PARTICULARS OF HOLDING , SUBSIDIARY & ASSOCIATE COMPANIES

SL. No.

Name & Address of the Company

CIN/GLN Holding/Subsidiary/Associate

% Of Shares

Held

ApplicableSection

1 Acme Advertisements Pvt Ltd U32304MH2006PTC161750 Subsidiary 100% 2(87)2 Brightland Developers Pvt. Ltd U45201MH2006PTC164049 Subsidiary 100% 2(87)3 Millennium Accessories Ltd. U29268MH2008PLC180351 Subsidiary 100% 2(87)4 Profab Fashions (India) Ltd U17120MH2008PLC179156 Subsidiary 100% 2(87)5 Provogue Infrastructure Pvt. Ltd U74999MH2006PTC165054 Subsidiary 100% 2(87)6 Proflippers India Private Limited U52390MH2011PTC220107 Subsidiary 100% 2(87)7 Faridabad Festival City Pvt Ltd U45200MH2007PTC174155 Subsidiary 73% 2(87)8 Provogue Personal Care Private

Limited U52100MH2013PTC246227 Subsidiary 51% 2(87)

9 Sporting and Outdoor Ad Agency Pvt Ltd.

U74999MH2007PTC171265 Associate Company

47.50% 2(6)

10 Standard Mall Pvt Ltd* U45200MH2007PTC174152 Subsidiary 100% 2(87)11 Elite Team (HK) Limited FOREIGN COMPANY Foreign

Subsidiary100% 2(87)

12 Provogue Holding Ltd.** FOREIGN COMPANY Foreign Subsidiary

100% 2(87)

13 ProSFL Private Ltd U17299MH2008PTC179157 Associate Company (Joint Venture)

50.00% 2(6)

*20% is held directly and 80% through its Wholly Owned Subsidiary (at serial no. 5 above)** Under strike off process


IV SHAREHOLDING PATTERN (Equity Share capital Break up as % to total Equity)

(i) Category-wise Share Holding

Category of Shareholders No. of Shares held at the beginning of the year

No. of Shares held at the end of the year

% change during

the yearDemat Physical Total % of

Total Shares

Demat Physical Total % of Total

SharesA. Promoters(1) Indiana) Individual/HUF 34,633,359 0 34,633,359 14.84 34,560,359 0 34,560,359 14.81 -0.03b) Central Govt.or

State Govt.0 0 0 0 0 0 0 0 0.00

c) Bodies Corporates 0 0 0 0 0 0 0 0 0.00d) Bank/FI 0 0 0 0 0 0 0 0 0.00e) Any other (specify) 0 0 Limited Liability Partnership 12,539,640 0 12,539,640 5.37 12,539,640 0 12,539,640 5.37 0.00SUB TOTAL:(A) (1) 47,172,999 0 47,172,999 20.21 47,099,999 0 47,099,999 20.18 -0.03(2) Foreigna) NRI- Individuals 0 0 0 0.00 0 0 0 0 0.00b) Other Individuals 0 0 0 0.00 0 0 0 0 0.00c) Bodies Corp. 0 0 0 0.00 0 0 0 0 0.00d) Banks/FI 0 0 0 0.00 0 0 0 0 0.00e) Any other… 0 0 0 0.00 0 0 0 0 0.00SUB TOTAL (A) (2) 0 0 0 0.00 0 0 0 0.00 0.00Total Shareholding of Promoter (A)= (A)(1)+(A)(2)*"

47,172,999 0 47,172,999 20.21 47,099,999 0 47,099,999 20.18 -0.03

B. PUBLIC SHAREHOLDING(1) Institutionsa) Mutual Funds 0 0 0 0.00 0 0 0 0 0.00b) Banks/FI 119,961,238 0 119,961,238 51.40 119,961,238 0 119,961,238 51.40 0.00c) Cenntral govt 0 0 0 0.00 0 0 0 0 0.00d) State Govt. 0 0 0 0.00 0 0 0 0 0.00e) Venture Capital Fund 0 0 0 0.00 0 0 0 0 0.00f) Insurance Companies 0 0 0 0.00 0 0 0 0.00 0.00g) FIIs/Foreign portfolio 5,712,435 0 5,712,435 2.45 5,712,435 0 5,712,435 2.45 0.00h) Foreign Venture Capital

Funds0 0 0 0.00 0 0 0 0 0.00

i) Others (specify) 0 0 0 0.00 0 0 0 0.00 0.00 Central Government/ State

Government(s)/ President of India1

0 0 0 0.00 40,973 0 40,973 0.02 0.02

SUB TOTAL (B)(1): 125,673,673 0 125,673,673 53.85 125,714,646 0 125,714,646 53.87 0.02(2) Non Institutionsa) Bodies corporatesi) Indian 0 0 0 0.00 0 0 0 0.000 0.00ii) Overseas 0 0 0 0.00 0 0 0 0.00 0.00b) Individualsi) Individual shareholders

holding nominal share capital upto ` 1 lakhs

28,980,268 64,142 29,044,410 12.45 29,359,147 63,137 29,422,284 12.61 0.16

ii) Individuals shareholders holding nominal share capital in excess of ` 1 lakhs

8,109,210 0 8,109,210 3.47 9,323,460 0 9,323,460 3.99 0.52

c) Others (specify) Hindu Undivided Family 1,772,239 0 1,772,239 0.76 1269716 0 1269716 0.54 -0.22 Foreign Companies 6,000,000 0 6,000,000 2.57 6,000,000 0 6,000,000 2.57 0.00 Foreign Nationals 0 0 0 0.00 0 0 0 0.00 0.00 Non Resident Indians (Non

Repat)243,770 0 243770 0.10 264410 0 264410 0.11 0.01

Non Resident Indians (Repat)

2,741,364 0 2741364 1.17 1752027 0 1752027 0.75 -0.42

Clearing Member 4,202,239 0 4202239 1.80 2135401 0 2135401 0.91 -0.89 NBFCs registered with RBI 0 0 0 0.00 0 0 0 0.00 0.00 Bodies Corporate 8,421,923 0 8421923 3.61 10399884 0 10399884 4.46 0.85SUB TOTAL (B)(2): 60,471,013 64,142 60,535,155 25.94 60,504,045 63,137 60,567,182 25.95 -0.83 Total Public Shareholding (B)= (B)(1)+(B)(2)

186,144,686 64,142 186,208,828 79.79 186,218,691 63,137 186,281,828 79.82 -0.82

C. Shares held by Custodian for GDRs & ADRs

0 0 0 0.00 0 0 0 0 0.00

Grand Total (A+B+C) 233,317,685 64,142 233,381,827 100.00 233,318,690 63,137 233,381,827 100.00 -0.85

140,973 Shares, on which dividends for the last 7 years or more remained unclaimed/ unpaid were transferred to Investors Education and Protection

Fund maintained by Central Government pursuant to IEPF Authority (Accounting, Audit, Transfer and Refund) Amendment Rules 2017.

34

(ii) Share Holding of Promoters

Sl. No.

Shareholders Name Shareholding at the begginning of the year (01.04.2017)

Shareholding at the end of the year (31.03.2018)

% change in share holding during

the year

No of shares % of total

shares of the

company

% of shares pledged

encumbered to total shares

No of shares % of total

shares of the

company

% of shares pledged

encumbered to total shares

1 Mr. Nikhil Anupendra Chaturvedi

8,085,806 3.46 0.00 8,085,806 3.46 0.00 0.00

2 Mr. Salil Anupendra Chaturvedi

10,295,135 4.41 0.00 10,295,135 4.41 0.00 0.00

3 Mr. Rakesh Rawat 4,111,750 1.76 0.00 4,111,750 1.76 0.00 0.00

4 Mr. Deep Subash Gupta 5,673,445 2.43 0.00 5,673,445 2.43 0.00 0.00

5 Mr. Nigam Patel 2,713,222 1.16 0.00 2,713,222 1.16 0.00 0.00

6 Mr. Akhil Anupendra Chaturvedi

2,884,330 1.24 0.00 2,884,330 1.24 0.00 0.00

7 Ms. Anisha Chaturvedi 166,260 0.07 0.00 166,260 0.07 0.00 0.00

8 Ms. Veena Gupta 70,005 0.03 0.00 70,005 0.03 0.00 0.00

9 Ms. Vandana Vaidh 1,620 0.00 0.00 3,620 0.00 0.00 0.00

11 Mr. Ghanshyam Rawat 20,000 0.01 0.00 20,000 0.01 0.00 0.00

12 Ms. Pushplata Rawat 36,501 0.02 0.00 36,501 0.02 0.00 0.00

13 Ms. Bala Chhabra 100,000 0.04 0.00 25,000 0.01 0.00 -0.03

14 Mr. Sushant Chhabra 67,300 0.03 0.00 67,300 0.03 0.00 0.00

15 Mr. Virendra Chhabra 392,300 0.17 0.00 392,300 0.17 0.00 0.00

16 Meerut Festival City LLP 1,499,640 0.64 0.00 1,499,640 0.64 0.00 0.00

17 Floro Mercantile LLP 6,240,000 2.67 0.00 6,240,000 2.67 0.00 0.00

18 Topspeed Trading Company LLP

4,800,000 2.06 0.00 4,800,000 2.06 0.00 0.00

19 Mr. Subhash Gupta 5,685 0.00 0.00 5,685 0.00 0.00 0.0020 Mrs. Santosh Subhash

Gupta10,000 0.00 0.00 10,000 0.00 0.00 0.00

Total 47,172,999 20.21 0.00 47,099,999 20.18 0.00 -0.03

Note : Shareholding is consolidated based on permanent account number (PAN) of the shareholder

(iii) Change in Promoters’ Shareholding

Sl. No.

Particulars Share holding at the beginning of the year

Cumulative Share holding during the year

No. of Shares % of total shares of the

company

No of shares % of total shares of the

company

1 Mrs. Bala Chhabra

At the beginning of the year 100,000 0.04% 100,000 0.04%Transfer on 19.01.2018 -75,000 -0.03% 25,000 0.01%At the end of the year - 25,000 0.01%

2 Mrs. Vandana VaidhAt the beginning of the year 1,620 0.00% 1,620 0.00%Bought on 03.11.2017 2,000 1,620 3,620 0.00%

At the end of the year - 3,620 0.00%

Note : Excpet above there is no change in shareholding of remaining Promoter & Promoter group


(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters & Holders of GDRs & ADRs)

Sl. No.

Top 10 Shareholders Shareholding at the Beginning of the year

Cumulative Shareholding during the year

No.of shares % of total shares of the

company


company1 Andhra Bank* 46,429,315 19.89 46,429,315 19.892 Bank Of India* 20,129,375 8.63 20,129,375 8.633 Corporation Bank* 19,791,443 8.48 19,791,443 8.484 Central Bank Of India* 16,008,968 6.86 16,008,968 6.865 Punjab National Bank* 12,962,512 5.55 12,962,512 5.556 Nailsfield Limited (FPI & FII Holding) 11,415,000 4.89 11,415,000 4.897 Unique Estates Development Company Ltd

At the beginning of the year 0 0.00 0 0.0007.04.2017 2,489,519 1.07 2,489,519 1.0714.04.2017 81 0.00 2,489,600 1.07At the end of the year 2,489,600 1.07

8 Rajesh R Narang 2,324,160 1.00 2,324,160 1.009 Indusind Bank Limited Treasury Dept* 2,155,605 0.92 2,155,605 0.9210 Small Industries Development Bank of

India*1,547,514 0.66 1,547,514 0.66

* Collectively called as SDR lenders have been allotted equity shares on preferential basis In terms of Reserve Bank of India (RBI) Circular no. DBR.BP.BC.No.101/ 21.04.132/ 2014‐15 dated 8th June 2015.

Note: The shares of the Company are traded on a daily basis and hence the date wise increase / decrease in shareholding is not indicated. Shareholding is consolidated based on permanent account number (PAN) of the shareholder.

(v) Shareholding of Directors & KMP

Sl. No.

For Each of the Directors & KMP Shareholding at the end of the year

Cumulative Shareholding during the year


company


company

1 Mr. Nikhil Chaturvedi

Managing Director

At the beginning of the year 8,085,806 3.46% 8,085,806 3.46%

At the end of the year 8,085,806 3.46%

2 Mr. Akhil Chaturvedi

Whole-time Director



3 Mr. Salil Chaturvedi

Non-Executive Director



4 Mr. Deep Gupta

Whole-time Director & CFO



Note: Except above none of the other Director and KMP hold any shares in the Company as on 31.03.2018

36

V INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment(INR in Lakhs)

Secured Loans

excluding deposits

Unsecured Loans

Deposits Total Indebtedness

Indebtness at the beginning of the financial yeari) Principal Amount 21,701.68 - 21,701.68 ii) Interest due but not paid 477.76 - - 477.76 iii) Interest accrued but not due - - - Total (i+ii+iii) 22,179.44 - - 22,179.44 Change in Indebtedness during the financial yearAdditions - - - Reduction1 4,369.51 - - 4,369.51 Net Change 4,369.51 - - 4,369.51 Indebtedness at the end of the financial yeari) Principal Amount 17,809.93 - - 17,809.93 ii) Interest due but not paid - - - iii) Interest accrued but not due - - - - Total (i+ii+iii) 17,809.93 - - 17,809.93

1 Refer Note no. 34 and 43 to the standalone financial statement.

VI REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole time director and/or Manager:

(INR in Lakhs)

Sl. No.

Particulars of Remuneration Name of the MD/WTD/Manager Total AmountMr. Nikhil

Chaturvedi, MD

Mr. Deep Gupta,

WTD & CFO

Mr. Akhil Chaturvedi,

WTD

1 Gross salary

(a) Salary as per provisions contained in section 17(1) of the Income Tax. 1961.

- 54.00 - 54.00

(b) Value of perquisites u/s 17(2) of the Income tax Act, 1961

- - - -

(c ) Profits in lieu of salary under section 17(3) of the Income Tax Act, 1961

- - - -

(d) Reimbursment of Expenses 6.00 - 6.00

2 Stock option - - - -

3 Sweat Equity - - - -

4 Commission - - - -

as % of profit - - - -

others (specify) - - - -

5 Others, please specify - - - -

Total (A) - 60.00 - 60.00

Ceiling as per the Act Within the prescribed limits


B. Remuneration to other directors:

(INR in Lakhs)

Sl. No.

Particulars of Remuneration Name of the Directors Total Amount

paid/payable

Mr. Hetal Hakani, ID

Mr. Dinesh Arya, ID

Ms. Gauri Pote

Ms. Salil Chaturvedi,

NED

1 Independent Directors

(a) Fee for attending board committee meetings

1.00 1.00 0.40 - 2.40

(b) Commission - - - - -

(c) Others, please specify - - - - -

Total (1) 1.00 1.00 0.40 2.40

2 Other Non Executive Directors

(a) Fee for attending board committee meetings

- - - - -

(b) Commission - - - - -

(c) Others, please specify. - - - - -

Total (2)

Total (B)=(1+2) -

Total Managerial Remuneration 1.00 1.00 0.40 2.40

Overall Cieling as per the Act. Within the prescribed limits

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD

(INR in Lakhs)

Sl. No.

Particulars of Remuneration Key Managerial Personnel

Total

CFO* Company Secretary*

1 Gross Salary

(a) Salary as per provisions contained in section 17(1) of the Income Tax Act, 1961.

54.00 5.80 58.80

(b) Value of perquisites u/s 17(2) of the Income Tax Act, 1961 - - -

(c) Profits in lieu of salary under section 17(3) of the Income Tax Act, 1961

- - -

(d) Reimbursment of Expenses 6.00 - 6.00

2 Stock Option - - -

3 Sweat Equity - - -

4 Commission - - -

as % of profit - - -

others, specify - - -

5 Others, please specify - - -

Total 60.00 5.80 64.80

* Mr. Deep Gupta Whole Time Director, also holds the office of Chief Financial Officer, hence his salary is mentioned in Table A and C both.

38

VII PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES

Type Section of the

Companies Act

Brief Description

Details of Penalty/

Punishment/Compounding fees imposed

Authority (RD/

NCLT/Court)

Appeal made if

any (give details)

A. COMPANY

Penalty - - - - -

Punishment - - - - -

Compounding 621A read with 233 of Companies Act 1956

Delay in filing of Cost Audit Report for FY 2013-14

` 10,000/- NCLT NA

B. DIRECTORS

Penalty - - - - -




` 5,000/- per executive

director

NCLT NA

C. OTHER OFFICERS IN DEFAULT

Penalty - - - - -




` 5,000/- on erstwhile company secretary

NCLT NA


Sd/-

Nikhil Chaturvedi

Sd/-

Deep GuptaDate: 11.05.2018 Managing Director Whole time DirectorPlace: Mumbai Din: 00004983 Din:00004788


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42

ANNEXURE 6

PARTICULARS OF EMPLOYEES AND RELATED DETAILS[Pursuant to section 197(12) of the Companies Act 2013 read with Rules 5(1) of the Companies

(Appointment and Remuneration of Managerial Personnel) Rules 2014]

The ratio of the remuneration of each director to the median employee’s remuneration and other details in terms of sub-section 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

No. Requirements Disclosures

1 The ratio of remuneration of each Director to the Median remuneration of employees for the financial year

Mr. Nikhil Chaturvedi, MD Nil

Mr. Deep Gupta, WTD 26.45:1

Mr. Akhil Chaturvedi, WTD Nil

Mr. Salil Chaturvedi, NED Nil

Mr. Dinesh Arya, ID Nil

Mr. Hetal Hakani, ID Nil

Ms. Gauri Pote, ID Nil

2 Percentage increase in Remuneration of each director CFO, CEO, CS in the Financial Year

Mr. Nikhil Chaturvedi, MD NA

Mr. Deep Gupta, WTD & CFO No increase

Mr. Vishant Shetty, CS 20.83%

3 The Percentage increase in the median remuneration of employees in the financial year

There was 19.56% decrease in comparison of previous year in the median remuneration of employees

4 The Number of permanent employees on the rolls of the Company

There were 132 employees as on 31st March 2018

5 Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration.

Average percentile decrease in salary of employees other than managerial personnel was 9.37%. However there was no percentile increase/decrease in remuneration of managerial personnel.

6 Affirmation that the remuneration is as per the remuneration policy of the Company.

It is confirmed that the remuneration is paid as per the remuneration policy of the Company.

During the financial year, company incurred the loss however the remuneration paid to directors were within the limit specified under schedule V of the Companies act, 2013.


Sd/- Sd/-

Nikhil Chaturvedi Deep Gupta

Date: 11.05.2018 Managing Director Whole time Director

Place: Mumbai DIN: 00004983 DIN:00004788


The Board present the Company’s Report on Corporate Governance for the year ended March 31, 2018, in terms of Regulation 34(3) read with schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulation”).

1. COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE:

The Company’s Corporate Governance philosophy rests on the pillars of integrity, accountability, equity, transparency and environmental responsibility that conform fully with laws, regulations and guidelines. Its philosophy on the code of Corporate Governance is:

• To ensure adequate control systems to enable the Board to efficiently conduct the business and discharge its responsibilities to shareholders.

• To ensure that the decision making process is fair, transparent and equitable.

• To ensure fullest involvement and commitment of the management for maximization of stakeholders value.

• To imbibe the corporate values in the employees and encourage them in their conduct.

• To ensure that the Company follows the globally recognized Corporate Governance practices.

2. BOARD OF DIRECTORS

a. Composition of the Board

The Company has a judicious mix of Executive and Non- Executive Directors. As on 31st March, 2018 the Board comprised of seven Directors of which, three Executive Directors, one Non-executive Director and three Independent Directors, including a Woman Director. Further Mr. Dinesh Arya, Independent Director heading the Board as Chairman. The Independent Directors have confirmed that they satisfy the criteria of independence as prescribed under

Reg. 16 of SEBI (LODR) Regulations 2015 and Companies Act, 2013.

The Board meets at regular intervals to discuss and decide on business strategies/policies and review the financial performance of the Company and its subsidiaries. In case of business exigencies, the Board’s approval is taken through circular resolutions, the circular resolutions are noted at the subsequent Board Meeting. During the year under review no resolution was passed through circular.

The notice and detailed agenda along with the relevant notes and other material information are sent in advance separately to each Director and in exceptional cases tabled at the Meeting with the approval of the Board. This ensures timely and informed decisions by the Board. The Board reviews the performance of the Company vis-à-vis the budgets/targets.

In the financial year 2017-18, the Board met four times. The meetings were held on 29th May, 2017, 14th August, 2017, 14th November, 2017 and 14th February, 2018 and the intervening gap between two meetings did not exceed one hundred twenty days.

On a request received from Andhra Bank, Lead Banker, the Board by passing a circular resolution approved the appointment of senior officer, as may be authorized by the Andhra Bank from time to time, to act as Observer in all further meetings of Board of Directors of the Company. Accordingly, the Board Meetings held on 29th May 2017, 14th November 2017 and 14th February 2018 during the financial year 2017-18 were attended by observer appointed by the Andhra Bank.

The constitution of Board of Directors, details of meeting attended by Directors and the information with regard to membership of Committees are as under:

CORPORATE GOVERNANCE REPORT

Name of the Director Category1 No. of Board

Meetings attended

Last AGM

No. of Directorships and Committee Memberships and Chairmanships

including Company’sDirectorship2 Committee3&4

Chairmanship MembershipMr. Dinesh Arya C & ID 4 No 1 1 0Mr. Hetal Hakani ID 4 Yes 2 0 1Ms. Gauri Pote ID 2 Yes 1 - -Mr. Nikhil Chaturvedi MD 4 Yes 2 - 1Mr. Deep Gupta WTD 4 Yes 3 - 1Mr. Akhil Chaturvedi WTD 4 Yes 5 - 2Mr. Salil Chaturvedi NED 3 No 4 1 2

Leave of absence was granted to the concerned Directors who had expressed their inability to attend the respective meetings

44

1. In above table the term ‘C&ID’ refers to Chairman & Independent Director, ‘MD’ refers to Managing Director, ‘ID’ refers to Independent Director, ‘WTD’ refers to Whole-time Director and ‘NED’ refers to Non- executive Director.

2. Only Directorship in Indian Public Limited Companies (listed or unlisted) and its subsidiaries have been considered.

3. None of the Directors is a member of more than 10 Board level Committees of Public Companies in which they are Directors nor is Chairman of more than 5 such Committees.

4. In accordance with Reg. 26 of SEBI (LODR) Regulations, 2015, Membership / Chairmanship only in Audit Committees and Stakeholders Relationship Committees of all Public Limited Companies, have been considered.

5. Except Mr. Nikhil Chaturvedi, Managing Director, Mr. Akhil Chaturvedi, Whole-time Director and Mr. Salil Chaturvedi, Non- executive Director who are brothers, no other Directors are related to each other.

b. Independent Director

The Independent Directors fulfils the conditions of independence specified in Section 149 and Schedule IV of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (LODR) Regulation, 2015. A formal letter of appointment to Independent Director as provided in Companies Act, 2013 and the Listing Regulation has been issued on their appointment.

c. Meetings of Independent Directors

In compliance with the provisions of Section 149(8) read with Schedule IV of the Companies Act, 2013 and Reg. 25 of SEBI (LODR) Regulation 2015, a meeting of the Independent Directors of the Company was held on Tuesday, 14th November 2017 without the presence of Non-Independent Directors. All the Independent Directors were present at the said meeting, to discuss the following matters:

l Review of the performance of Non-Independent Directors and the Board as a whole;

l Review of the performance of the Chairman of the Company, taking into account the view of executive directors and non – executive Directors;

l Evaluate the quality, quantity and timeliness of flow of information between the Company management and the Board

that is necessary for the Board to effectively and reasonably perform their duties.

d. Familiarization Programme For Independent Directors:

In compliance with the requirements of SEBI (LODR) Regulations, 2015 the Company has put in place a familiarization programme for the Independent Directors to familiarize them with their role, rights and responsibility as Directors, the working of the Company, nature of the industry in which the Company operates, business model etc.

At the time of appointing an Independent Director, a formal letter of appointment is given to him/her, which also explains the role, function, duties and responsibilities to be performed by him/her as a Director of the Company.

The Director is also explained in detail the Compliance required from him/her under Companies Act, 2013, Listing Regulation and other various statutes and an affirmation is obtained. Further, on an ongoing basis as a part of Agenda of Board / Committee Meetings, presentations by internal auditors on financials and internal financial controls, are regularly made to the Independent Directors on various matters inter-alia covering the Company’s and its subsidiaries/associates businesses.

The details of Familiarization Programmes imparted during the financial year, have been hosted on website. Link: www.provogue.com.

e. Number of Independent Directorship

In compliance with the Listing Regulations, Directors of the Company do not serve as an Independent Director in more than seven listed companies. In case he/she is serving as a Whole-Time Director in any listed company, does not hold the position of Independent Director in more than three listed companies

f. Payment of compensation to Non-Executive directors:

During the financial year 2017-18, no amount has been paid to Non-Executive Directors of the Company except sitting fees for attending the Board / Committee Meetings.

COMMITTEES OF THE BOARD:

The Board of Directors have constituted Committees to deal with specific areas and activities which concern the Company and requires a closer review. The Committees are formed with approval of the Board and functions under in accordance with powers it derived from the Board. These Committees play an important role in the overall management of day to-day affairs and governance of the Company. The Committees meet at regular intervals and take necessary steps to perform its duties entrusted by the Board. The Minutes of the Committee Meetings are placed before the Board for noting.


The Board currently has the following Committees:

3. AUDIT COMMITTEE:

The Audit Committee acts as a link between the Independent Auditors, Internal Auditors, the Management and the Board of Directors and entrusted with the responsibility to supervise the Company’s internal controls and financial reporting process. The Audit committee interacts with the Internal Auditors, Statutory Auditors and reviews and recommends their appointment and remuneration. The Audit Committee is provided with all necessary assistance and information for enabling them to carry out its function effectively.

The Committee’s composition meets with requirements of Section 177 of the Companies Act, 2013 and Reg. 18 of SEBI (LODR) Regulations, 2015. Members of the Audit Committee possess financial / accounting expertise / exposure/qualifications.

a. Composition:

Mr. Dinesh Arya, Independent Director is Chairman of the Audit Committee. The other members of the Audit Committee include Mr. Hetal Hakani, independent director and Mr. Akhil Chaturvedi, Whole-time Director.

The Company Secretary of the Company acts as secretary to the Audit Committee.

b. Term of Reference:

The term of reference of Audit Committee includes;

Oversight of the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible,

Recommendation for appointment, remuneration and terms of appointment of auditors of the Company,

Reviewing and monitoring the auditor’s independence and performance and effectiveness of audit process,

Scrutiny of related party transactions and inter-corporate loans and investments,

Reviewing the adequacy of internal audit function,

Reviewing with the management, the annual financial statements and auditor's report thereon before the same are forwarded to the board for approval, with primary focus on;

i. Matters required to be included in the director’s responsibility statement to be included in the board’s report in terms of clause (c) of sub-section (3)

of Section 134 of the Companies Act, 2013.

ii. Changes, if any, in accounting policies and practices and reasons for the same.

iii. Significant adjustments made in the financial statements arising out of audit findings.

iv. Disclosure of any related party transactions,

v. Modified opinion(s) in the draft audit report.

c. Meetings of the Audit Committee:

The Audit Committee met four times during the financial year 2017-18 on 29th May 2017, 14th August 2017, 14th November 2017 and 14th February 2018. The gap between two Audit committee meetings was not more one hundred and twenty days.

The meetings of the audit committee are generally attended by Managing Director, Whole-time Director, Chief Financial Officer, Head of Finance Functions of the company and the representatives of Statutory Auditors and Internal Auditors. The Minutes of every meeting of Audit Committee were discussed and taken note by the Board of Directors in subsequent meeting.

The details of attendance of the Members in meetings are as follows:

Name of the Member

Category1 Position Audit Committee Meetings

Held Attended

Mr. Dinesh Arya

I & NED Chairman 4 4

Mr. Hetal Hakani

I & NED Member 4 4

Mr. Akhil Chaturvedi

WTD Member 4 4

1. In above table ‘I & NED’ refers to Independent & Non-executive Director and WTD refers to Whole-time Director.

The Audit Committee exercises all powers, performs such functions and reviews information as prescribed in Section 177 of the Companies Act, 2013 and Reg. 18(3) of SEBI (LODR) Regulations 2015 read with Part C of Schedule II to the Regulation.

Composition of the Committee is available on Company’s website i.e. www.provogue.com

46

4. NOMINATION AND REMUNERATION COMMITTEE:

The Company has framed the mandate and working procedures of the Nomination and Remuneration Committee as required under Section 178 of Companies Act, 2013 defining therein the Role, Membership, meeting procedures etc. as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

a. Composition

The Committee as on 31st March 2018 comprised of three members namely, Mr. Hetal Hakani, Chairman (Independent Director), Mr. Dinesh Arya, Member (Independent Director) and Mr. Salil Chaturvedi, Member (Non- Executive Director).

b. Meeting of Committee:

During the year under review no meeting was held. However, the members of the Committee on 14th February 2018 by way of circular resolution had approved the payment of remuneration to Mr. Deep Gupta Whole-time Director for remaining period of his appointment two years with effect from 1st April 2018.

c. Term of Reference:

The Board had constituted the Nomination & Remuneration Committee which ensures effective compliances as mentioned in section 178 of the Companies Act 2013 and Reg. 19 of SEBI (LODR) Regulations, 2015. The defined terms of reference for the Nomination & Remuneration Committee are as follows;

Formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the board of directors a policy relating to, the remuneration of the directors, key managerial personnel and other employees of the Company;

Formulation of criteria for evaluation of performance of independent directors and the board of directors of the Company;

Devising a policy on diversity of Board of Directors;

Identifying persons who are qualified to become directors and who may be appointed in senior management in

accordance with the criteria laid down, and recommend to the board of directors their appointment;

Whether to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors.

d. Board Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of the Listing Regulations, the Board has carried out an annual evaluation of its own performance and that of its Committees as well as of performance of the Directors individually. Feedback was sought on various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. The evaluation was carried out based on responses received from the Directors

A separate exercise was carried out by the Board to evaluate the performance of individual Directors. The performance evaluation of the Non-Independent Directors and the Board as a whole was carried out by the Independent Directors. The performance evaluation of the Chairman of the Company was also carried out by the Independent Directors, taking into account the views of the Executive Director and Non-Executive Directors. The Directors expressed their satisfaction with the evaluation process.

5. REMUNERATION TO DIRECTORS:

Executive directors of the Company are appointed by the Board of Directors subject to the approval of shareholders in the General Meeting. The remuneration package of the Executive Directors is determined by the Nomination and Remuneration Committee within the permissible limits, subject to approval of the Board and shareholders in their respective meeting and as per applicable provisions of the Companies Act, 2013. Remuneration policy is a part of Directors’ Report.

The details of remuneration paid to Directors during the year 2017-18 are as under:

Name of the Director Basic Salary Paid ( ` )

Allowances & perquisites

( ` )

Sitting Fees paid ( ` )

Total Remuneration*

( ` )

1 Mr. Dinesh Arya - - 1,00,000 -

2 Mr. Hetal Hakani - - 1,00,000 -

3 Ms. Gauri Pote - - 40,000 -


Name of the Director Basic Salary Paid ( ` )

Allowances & perquisites

( ` )

Sitting Fees paid ( ` )

Total Remuneration*

( ` )

4 Mr. Nikhil Chaturvedi ** - - - -

5 Mr. Salil Chaturvedi ** - - - -

6 Mr. Deep Gupta 60,00,000 -- - 60,00,000

7 Mr. Akhil Chaturvedi** - - - -

* except above no other component included in the remuneration drawn by the Directors

* Directors at serial nos. 4, 5 & 7 are brothers

As informed to the Company, none of the non-executive directors have any other pecuniary interest in the Company. Except above no other elements of remuneration are paid to the Directors. The Company has not framed any scheme/ plan to grant stock option to its employee or directors.

6. STAKEHOLDERS RELATIONSHIP COMMITTEE:

The Stakeholders Relationship Committee oversees the redressal of Shareholder’s complaints relating to share transfers/ transmission and non receipt of Annual reports,

a. Composition:

The Stakeholders Relationship Committee as on 31st March, 2018, comprises of two executive directors viz. Mr. Akhil Chaturvedi and Mr. Deep Gupta and one non-executive director namely, Mr. Salil Chaturvedi.

Mr. Salil Chaturvedi, Non-executive Director is the Chairman of the Committee. Mr. Vishant Shetty, Company Secretary acts as Compliance Officer of the Committee.

b. Term of Reference and Scope of the Committee:

The Stakeholders’ Relationship Committee plays an important role in acting as a link between the management and the shareholders.

The Committee had delegated the power of Share Transfer to Registrar and Transfer Agent, who processes the transfers. The Committee also considers and resolves the grievances of the security holders of the listed entity including complaints related to transfer of shares, non-receipt of annual report and non-receipt of declared dividends and looks after the performance of the Registrar and Transfer Agent of the Company and recommends measures for overall improvement in the quality of investor services.

Scope of the Committee:

l Transfer of shares;

l Transmission of shares;

l Issue of Duplicate Share Certificates;

l Transposition of shares;

l Sub-division of shares;

l Consolidation of Folios;

l Requests for Dematerialization/Rematerialization of shares; and

l Redressal of investor grievances.

The power of share transfer has been delegated to M/s Link Intime India Private Limited, Mumbai, Registrar and Transfer Agent of the Company, who processes the transfers and other related activities.

c. Meetings and attendance of the Committee:

During the year 2017-18, the Committee met four times on 29th May 2017, 14th August 2017, 14th November 2017 and 14th February 2018.

The details of attendance of the members in meetings are as follows:

Name of the Member

Category1 Position Stakeholders Relationship Committee Meetings

Held Attended

Mr. Salil Chaturvedi

NED Chairman 4 3

Mr. Deep Gupta

WTD Member 4 4

Mr. Akhil Chaturvedi

WTD Member 4 4

1 In above table, ‘WTD refers to Whole-time Director and NED refers Non Executive Director.

48

d. Details of Shareholders Complaints:

During the year under report, details of complaints received, resolved and pending are as under;

Particulars No of Complaints

Number of Investors Complaints received as on 31st March 2018

Nil

Number not resolved to the satisfaction of the shareholders as on 31st March 2018

Nil

Number of pending complaints as on 31st March 2018

Nil

7. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

As on 31st March 2018, the Corporate Social Responsibility (CSR) Committee consists of Mr. Deep Gupta, Whole-time Director as ‘Chairman’ of the Committee and Mr. Nikhil Chaturvedi, Managing Director and Mr. Hetal Hakani, Independent Director, as its members. The composition and role of the CSR Committee are in line with Section 135 of the Act, and Rules framed thereunder. The Company Secretary of the Company acts as Secretary to the Committee.

a. Meetings and attendance of the Committee:

Name of the Member

Category Position CSR Committee Meetings

Held Attended

Mr. Deep Gupta

WTD Chairman 1 1

Mr. Nikhil Chaturvedi

MD Member 1 1

Mr. Hetal Hakani

ID Member 1 1

1. In above table, ‘WTD refers to Whole-time

Director, MD refers to Managing Director and

ID Refers to Independent Director’

The CSR Committee in its meeting held on 14th February 2018 reviewed the draft financials of the Company for the period ended 31st December 2017, considering the continuous loss suffered by the Company over a period, decided not to incur any expenditure on CSR activity during financial year 2017-18. However, the Committee showed its very positive

gestures of willingness to contribute towards

Corporate Social Responsibility in the period to

come upon revival of financial position of the

Company.

The Committee had also adopted CSR policy

outlining the activities to be covered under CSR

activities to be undertaken by the Company.

The CSR Policy intends to strive for economic

development that positively impacts the society

at large with minimal resource footprints. The

Policy is made available on the Company’s

website at www.provogue.com

GOVERNANCE CODES

8. CODE OF CONDUCT AND BUSINESS ETHICS

The Company has adopted Code of Conduct

for Directors and Senior Managerial Personnel

(“the Code”) which is applicable to the Board

of Directors and Senior Managerial Personnel

comprising all members of Core Management

Team one level below the executive Directors

including all Functional heads (SMPs) of the

Company. The Board of Directors and SMPs of

the Company annually, are required to affirm this

Code. The Code requires Directors and Employees

to act honestly, fairly, ethically, and with integrity,

conduct themselves in professional, courteous

and respectful manner. The Code is hosted on the

Company’s website viz www.provogue.com

9. INSIDER TRADING CODE:

The Company, with a view to regulate the trading

in securities of the Company, by the insiders

including promoters, directors and designated/

specified employees of the Company, had

adopted a Code of conduct for Insider Trading

and Fair Disclosures of UPSI (“the Code”) in

accordance with the SEBI (Prohibition of Insider

Trading) Regulations, 2015 (The PIT Regulations).

The Code is applicable to Promoters and

Promoter’s Group, all Directors and such

Designated Employees/ specified employees

who are expected to have an access to

unpublished price sensitive information relating

to the Company. The Company Secretary is the

Compliance Officer for monitoring adherence to

the said PIT Regulations. The Code has been

hosted on the Company’s website viz. www.

provogue.com


10. GENERAL BODY MEETING:

The Location, date and time of General Meeting held during the last 3 years are given hereunder:

Financial Year Date Time Location No. of Special Resolutions passed

Annual General Meetings:2014-15 30.09.15 12.00 p.m. Eden Hall, The Classique Club,

Behind Infinity mall, New Link Road, Andheri (W), Mumbai- 400 053

3

2015-16 30.09.16 11.00 a.m. Eden Hall, The Classique Club, Behind Infinity mall, New Link Road, Andheri (W), Mumbai- 400 053

0

2016-17 28.09.17 11.00 a.m. Eden Hall, The Classique Club, Behind Infinity mall, New Link Road, Andheri (W), Mumbai- 400 053

0

• None of the items transacted at the last Annual General Meeting held on 28th September 2017 were required to be passed by postal ballot, nor any resolution requiring postal ballot is being proposed at the ensuing Annual General Meeting.

POSTAL BALLOT INCLUDING E-VOTING:

During the financial year 2017-2018, no resolution was passed by the Company through postal ballot.

11. MEANS OF COMMUNICATION:

The Company, as and when required, communicates with its shareholders and stakeholders through multiple channels of communications such as dissemination of information on the on-line portal of the Stock Exchanges, press releases, the Annual Reports and uploading relevant information on its website.

The unaudited quarterly results are announced within forty-five days from the close of quarter. The annual results are announced within sixty days from the close of the financial year as required under SEBI (LODR) Regulations, 2015. The financial results are disseminated to the Stock Exchanges within thirty minutes from the close of the Board Meeting at which these were considered and approved. The results are generally published in English and one Marathi daily newspaper, i.e. Financial Express and Mumbai Lakshadeep respectively. During the year no presentations were made to institutional investors or to the analysts.

The Annual Report of the Company, the quarterly and the annual financial statements and other information required to be disseminated on company’s website are regularly posted on the Company’s website i.e. www.provogue.com and can be downloaded therefrom.

The Company discloses to the Stock Exchanges, all information required to be disclosed under Regulation 30 read with Part A of Schedule III of the

SEBI (LODR) Regulations, 2015 including material information having a bearing on the performance / operations of the listed entity or other price sensitive information. All information are filed electronically on BSE’s online Portal i.e. BSE Corporate Compliance & Listing Centre (Listing Centre) and NSE’s online Portal i.e. NSE Electronic Application Processing System (NEAPS), and all disclosures made to the stock exchanges, are also made available on Company’s website. In addition to this, all official new releases are also posted on the Company’s website.

SEBI COMPLAINT REDRESSAL SYSTEMS (SCORES):

SEBI Complaints Redressal System (SCORES) is a centralised web based complaints redress system launched by SEBI to provide a platform for aggrieved investors whose grievances pertaining to securities market, remained unresolved by the listed company after a direct approach. SCORES also provides a platform, overseen by SEBI through which the investors can approach the concerned listed company. It is an endeavour towards speedy redressal of grievances of investors in the securities market.

The salient features of this system are:

• Centralized database of all complaints,

• online upload of Action Taken Reports (ATRs) by the concerned companies and

• online viewing by investors of actions taken on the complaint and its current status

Through SCORES the investors can view online, the action taken and current status of the Complaints.

50

12. GENERAL SHAREHOLDERS INFORMATION:

Annual General Meeting: Date, Time and Venue:

As indicated in the notice accompanying this Annual Report, the Twenty Second Annual General Meeting of the Company will be held on Saturday, 29th September, 2018 at 11.00 a.m. at Eden Hall, The Classique Club, Behind Infinity Mall, New Link Road, Andheri (West), Mumbai – 400053.

Financial Year

The Company follows a period from April 1 to March 31 as the financial year.

The tentative dates for Board Meetings for consideration of quarterly financial results are as follows:

Un-audited results Q1 ending 30.06.2018

On or before 14th August 2018

Un-audited results Q2/half year ending 30.09.2018

On or before 14th November 2018

Un-audited results Q3/Nine months ending 31.12.2018

On or before 14th February 2019

Audited Results for the year ending 31.03.2019

On or before 30th May 2019

Dividend

The Company has not recommended any dividend for the financial year 2017-18.

Unclaimed Dividend/ Shares

Pursuant to the provisions of Section 125 of the Companies Act, 2013 and the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the amount of unpaid dividends that are lying unclaimed for a period of 7 consecutive years from the date of its transfer to the unpaid dividend account, is liable to be transferred to the Investors’ Education & Protection Fund (IEPF). Accordingly, the unclaimed dividend amounting to ` 75,856/-, in respect of the financial year 2009-10 was transferred to the IEPF on 10th November 2017. The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 28th September, 2017 (date of last Annual General Meeting) on the Company’s website viz www.provogue.com, and on the website of the Ministry of Corporate Affairs. Further, please note that the unclaimed dividend in respect of the financial year 2010-11 must be claimed by the concerned shareholders on or before 24th October

2018, failing which it will be transferred to the IEPF, in accordance with the said Rules.

Transfer of underlying Equity Shares in respect of the Unclaimed Dividends to the IEPF Authority Account

In terms of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 as amended from time to time, the Company has transferred the corresponding shares to IEPF, where the dividends remained unclaimed/unpaid by the concerned shareholders for the last seven consecutive years or more, since FY 2009-10. Further dividend which is lying unclaimed for the last 7 years since 2010-11 must be claimed by the concerned shareholders on or before 24th October 2018 for which Company has sent the reminder letters to them. If the shareholders fails to claim the said dividend, the company will be transferring the unclaimed dividend and the corresponding shares to IEPF within a period of 30 days from the due date. Details of unpaid and unclaimed dividends lying with the Company as on 28th September 2017 (date of the previous Annual General Meeting), are provided on the website, at link http://corporate.provogue.com/media/provogue/pdf/unpa id_shareholders/List_of_unclaimed_dividends_and_share_for_IEPF_Transfer_30_10_2017.pdf

The shareholders are requested to verify their records and claim their unclaimed dividends for the past years, if not claimed.

Book Closure Date:

Company was not required to decide any book closure period during the financial year.

Details of stock exchanges where shares of the Company are listed:

Stock Exchanges Stock Code

BSE LtdListing DepartmentP.J. Towers, Dalal Street, FortMumbai 400 001

532647

National Stock Exchange of India LimitedExchange PlazaBandra Kurla Complex, Bandra (E)Mumbai 400 051

PROVOGE

Demat ISIN in NSDL and CDSL for Equity Shares

INE968G01033

Listing fees have been paid for the Financial Year 2018-19.


Market Price Data:

Month BSE NSE

Share Price (in ` ) Sensex Share Price (in ` ) Nifty

High Low Close Close High Low Close Close

Apr 2017 6.70 4.07 5.08 29918.40 6.70 4.05 5.10 9304.05

May 2017 5.25 4.00 4.17 31145.80 5.15 4.20 4.25 9621.25

Jun 2017 4.60 3.95 4.01 30921.61 4.50 3.95 4.05 9520.90

Jul 2017 5.09 3.97 4.50 32514.94 4.95 3.95 4.45 10077.10

Aug 2017 4.50 3.83 4.03 31730.49 4.50 3.95 4.00 9917.90

Sept 2017 5.11 3.80 4.07 31283.72 5.20 3.50 4.15 9788.60

Oct 2017 5.29 4.01 4.42 33213.13 5.35 4.00 4.40 10335.30

Nov 2017 7.44 4.23 6.72 33149.35 7.35 4.30 6.70 10226.55

Dec 2017 11.11 6.36 8.50 34056.83 11.10 6.40 8.45 10530.70

Jan 2018 8.95 6.15 6.34 35965.02 8.95 6.00 6.40 11027.70

Feb 2018 6.51 5.23 5.23 34184.04 6.50 5.25 5.25 10492.85

Mar 2018 5.33 3.95 4.16 32968.68 5.50 3.95 4.05 10113.70

Source – Websites: BSE Ltd. (www.bseindia.com) and The National Stock Exchange of India Ltd. (www.nseindia.com)

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SENSEX Index PIL SHARE PRICE

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Share Transfer system:

Share Transfer, Transmission and Duplicate issue of Shares in physical form are normally effected within a period of 15 days, 21 days (7 days if the transmission is in de-mat form) and 30 days respectively from the receipt of documents complete in all respects. Company has Link Intime India Pvt. Ltd as Registrar and Share Transfer Agent which handles the transfer, transmission and issue of duplicate share certificate other related matters from the lodgment of the documents.

Dematerialization of shares:

Break up of shares in physical and demat form as on 31st March 2018

Distribution of Shareholding as on March 31, 2017

Particulars No. of Shares % of Shares Physical segment 63,137 0.03%Demat segment a. NSDL 20,32,20,868 87.08%b. CDSL 3,00,97,822 12.89%Total 233381827 100.00%

The Securities and Exchange board of India (SEBI) at its Board Meeting held on 28th March, 2018 proposed revision in provisions relating to transfer of listed securities and decided that request for effecting transfer of listed securities shall not be processed unless the securities are held in the dematerialized form with a depository participant. The said measure of SEBI is aimed at curbing fraud and manipulation risk in physical transfer of securities by unscrupulous entities. Transfer of securities only in demat form will improve ease, convenience and safety of transactions for investors. The effective date of said amendment is yet to be notified.

Shareholders who continue to hold shares in physical form are advised to dematerialise their shares at the earliest. For any clarifications, assistance or information, relating to dematerialization of shares the Company’s RTA may be contacted.

Distribution of Shareholding as on March 31, 2018:

Share holding

Share Holders Shares

No. of Shares

Number % to total share capital

No. of Shares

% to total share capital

(1) (2) (3) (4) (5)upto-500 22700 73.39 3722412 1.60501-1000 3506 11.33 3083566 1.321001-2000 1973 6.38 3194115 1.372001-3000 787 2.54 2087311 0.893001-4000 344 1.11 1273620 0.554001-5000 420 1.36 2023963 0.875001-10000 577 1.87 4396017 1.8810001- above 624 2.02 213600823 91.52Total 30931 100.00 233381827 100.00

52

Categories of Shareholders as on 31.03.2018:

Category No. of Shares % of Shareholding

Promoters & Promoter Group

47099999 20.18%

Nailsfield Limited (FDI & FPI a/c)

11415000 4.89%

Banks & Financial Institutions

119961238 51.40%

Foreign Institutional Investors

30450 0.02%

Foreign Portfolio Investor

266985 0.11%

Bodies Corporate 10397884 4.46%Others 44210271 18.94%Total 233381827 100.00 %

20.18%

4.89%

51.40%

0.02%0.11% 4.46%

18.94%

SHAREHOLDING PATTERN AS ON 31.03.2018

Promoters & Promoter Group20.18%

Nails�eld Limited (FDI & FPI a/c) 4.89%

Banks & Financial Institutions -51.40%

Foreign Institutional Investors 0.02%

Foreign Portfolio Investor -

-

0.11%

Bodies Corporate - 4.46%

Others -18.94%

Outstanding GDRs/ ADRs/ Warrants or any Convertible instruments:

As of 31st March, 2018 the Company does not have any outstanding convertible instruments, which are likely to have an impact on the equity of the Company.

Commodity Risk or Foreign Exchange Risk and hedging activities:

Disclosures on risks are forming part of Management Discussion and Analysis Report attached with this Annual Report.

Location of Manufacturing Units:

l 98/8 Ground Floor Daman Industrial Estate Kadaiya Village, Nani Daman, Daman, UT

l Village Gullarwala Sai Road, Baddi 173 205 Himachal Pradesh

Address for correspondence:

For query relating to the shares of the Company, correspondence may be addressed to the Company or RTA at:

Provogue (India) Limited

CIN: L18101MH1997PLC111924 105/106, Provogue House, 1st Floor Off New Link Road, Andheri (W), Mumbai 400 053 Phone: 022-3068 0560, Fax: 022-3068 0570,

Email id for investors: [email protected]

Registrar and Share Transfer Agent:

M/s Link Intime India Pvt. Ltd.

Unit: Provogue (India) Limited C-101, 247 Park, LBS Marg, Vikhroli (West),

Mumbai - 400 083 Phone: 022- 49186000, Fax: 022- 49186060 Email id: mailto:[email protected]

Shareholders are requested to quote their Folio No./ DP ID & Client ID, e-mail address, telephone number and full address while corresponding with the Company and its RTA.

13. OTHER DISCLOSURES

Related Party Transactions [RPTs]:

All Related Party Transactions are placed before the Audit Committee and to the Board, as and when required. Omnibus approvals of Audit Committee and Board of Directors are secured in most of the cases where RPTs are of repetitive nature and likely to be carried out throughout the financial year. Transactions entered into pursuant to omnibus approval are placed before the Audit Committee and/or the Board for review and approval on a quarterly basis.

All transactions entered with Related Parties for the year under review were, in compliance with provisions of Section 188 of the Companies Act, 2013 and the rules made thereunder, further as required under Section 134 of the Companies Act, 2013, all material related party transactions were disclosed in form AOC-2 which forms part of Board’s Report.

The policy on Related Party Transactions as approved by the Board of Directors has been hosted on the website of the Company. The above policy also covers a policy for determining ‘material subsidiaries’. The web-link of the same is http://corporate.provogue.com/investors.

There are no materially significant related party transactions that may have potential conflict with the interests of the Company at large.

Statutory Compliance, Penalties and Strictures:

The Company has complied with all requirements of the SEBI (LODR) Regulations, 2015 to the extent applicable to the Company. There were no instances of material non-compliance observed by the Company and no strictures or penalties were imposed on the Company either by SEBI, Stock Exchanges or any statutory authorities on any matter related to capital markets during the last three years.


Vigil Mechanism & Whistle Blower Policy:

In conformity with the requirements of Section 177

of the Companies Act, 2013, the Board has devised

Vigil Mechanism and has formal whistle blower

policy under which the Company takes cognizance

of complaints made by the employees and others

and provides for direct access to the Chairman of

Audit Committee in exceptional cases.

Your Company hereby affirms that no directors

/ employees have been denied the access to the

chairman of Audit committee and no complaints

were received during the year. The Whistle Blower

Policy of the Company has been posted on the

website of the Company and is available at http://

corporate.provogue.com/investors.

Disclosure of Accounting Treatment:

In the preparation of the financial statements, the

Company has followed the Accounting Standards

referred to in Section 133 of the Companies Act,

2013. The significant accounting policies which are

consistently applied are set out in the Notes to the

Financial Statements.

Risk Management:

Business risk evaluation and management is an ongoing process within the Company. The assessment is periodically examined by the Board.

Management Discussion and Analysis Report:

A Management Discussion and Analysis Report forms part of the annual report and includes

discussion on various matters specified under the SEBI (LODR) Regulation, 2015.

CEO & CFO certification:

Mr. Nikhil Chaturvedi, Managing Director and Mr. Deep Gupta, Whole-time Director & Chief Financial Officer have provided certification on financial reporting and internal control to the Board as required under Regulation 17(8) of the SEBI (LODR) Regulations, 2015.

Code of Conduct:

The Board has implemented a Code of Conduct for all Board members and senior management Personnel of the Company. The Code has been circulated to all members of the Board and Senior Management Personnel and has also been uploaded on the website of the Company i.e. http://www.provogue.com. The compliance of Code has been affirmed by all of them on annual basis. A declaration by the Managing Director of the Company in this respect is given below:

“I, Nikhil Chaturvedi, Managing Director of Provogue (India) Limited, in terms of provisions of Regulation 34 of SEBI (LODR) Regulations 2015, hereby confirm that all Board Members and Senior Management Personnel have affirmed the compliance with the “Code of Conduct” of the Company during the financial year ended March 31, 2018.”

For Provogue (India) Limited

Nikhil Chaturvedi,Managing Director

DIN: 00004983

54

Subsidiary monitoring framework:

As on 31st March, 2018 the Company had 11 subsidiary companies including 2 foreign subsidiaries, of which, none of the company was a ‘material non-listed Indian subsidiary’ as defined in Reg. 16(1)(c) of SEBI (LODR) Regulations 2015.

A policy for determining ‘Material Subsidiary’ is forming part of a ‘Policy governing Related Party Transactions’ framed by the Company and the same is available on the website of the Company at the link: http://corporate.provogue.com/investors.

The performance and management of the subsidiary is monitored inter-alia by the following means:

• Financial Statements and in particular the investments made by the unlisted subsidiary company are periodically reviewed by the Audit Committee of the Company.

• The Minutes of the Board Meetings of the subsidiary company are placed before the company’s Board for its regular review.

Mandatory and Non-mandatory requirements:

The Company has complied with all mandatory requirements laid down under the provision of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The details of adoption of non mandatory requirements are given below;

Sn. No.

Particulars Remarks

1. The Board The Company does not reimburse expenses, if any, incurred by the Non-Executive Chairman for maintenance of a separate Chairman’s Office.

2. Shareholders’ Rights Quarterly financial results of the Company are furnished to the Stock Exchanges and are also published in the news papers and uploaded on website of the Company. Significant events are also posted on the Company’s website under the Investors Section. A complete Annual Report sent to every shareholder of the Company.

3. Separate posts of Chairman and CEO

The company has appointed separate persons to the post of Chairman and Managing Director/CEO

4. Reporting of Internal Auditor The Internal Auditor quarterly places an Internal audit report before the Audit Committee for its review and comments.


Sd/- Sd/-Date : 11th May 2018 Nikhil Chaturvedi Deep GuptaPlace : Mumbai Managing Director Whole time Director & CFO

DIN: 00004983 DIN: 00004788


REPORT ON CORPORATE GOVERNANCE

To,

The Members,

PROVOGUE (INDIA) LIMITED

We have examined the compliance of conditions of Corporate Governance by Provogue (India) Limited (“the Company”), for the year ended 31st March, 2018 as per Regulation 17-27, Clauses (b) to (i) of Regulation 46(2) and paragraph C, D and E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 (“Listing Regulations”).

The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an Audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the condition of Corporate Governance as stipulated in the above-mentioned Listing Regulations, as applicable.

We further state that our examination of such compliances is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For HS Associates,Company Secretaries

Hemant ShetyeDate: 11th May 2018 FCS–2827Place: Mumbai COP– 1483

56

INDEPENDENT AUDITOR’S REPORT

To

The Members of Provogue (India) Limited,

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Provogue (India) Limited (“the Company”), which comprise the Balance Sheet as at 31st March 2018, the Statement of Profit and Loss (including other comprehensive income), the Statement of Cash Flows and the Statement of Changes in Equity for the year ended on that date and a summary of the significant accounting policies and other explanatory information (herein after referred to as “standalone Ind AS financial statements”).

Management’s Responsibility for the Standalone Ind AS Financial Statements

The Company’s Board of Directors is responsible for the matters stated in sub-section 5 of Section 134 of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (“Ind AS”) prescribed under Section 133 of the Act, read with relevant rules issued thereunder.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which

are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under sub-section 10 of Section 143 of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Company’s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Basis for Qualified Opinion

As explained in the note 34(i) and 43 to the Ind AS financial statements, the Company has not provided interest for the year ended March 31, 2018 amounting to ` 1481.00 lacs and reversed interest provided post SDR amounting to ` 5,252.34 lacs payable to various lenders since the credit facilities are classified as sub-standard as per RBI guidelines. Had the Company provided interest for the year ended March 31, 2018, finance cost would have been higher by ` 1481.00 lacs and had the Company had not reversed post SDR interest, net loss would have been higher by ` 6733.34 lacs for the year ended March 31, 2018.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for


Qualified Opinion paragraph, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the financial position of the Company as at 31st March 2018, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matter:

We draw attention to the following matter in the Notes to the financial statements:

Note 37 (h) to the financial statements regarding non provision of service tax for the period from June 01, 2007 to September 30, 2011 on rent on immovable properties taken for commercial use by the Company, aggregating ` 279.47 Lacs, pending final disposal of the appeal filed before the Hon’ble, Supreme Court. The matter is contingent upon the final outcome of litigation.

Our opinion is not qualified in respect of the above matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (‘the Order’), issued by the Central Government of India in exercise of powers conferred by sub-section 11 of section 143 of the Act, we enclose in “Annexure A”, a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by sub-section 3 of Section 143 of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Statement of Cash Flows and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under

Section 133 of the Act, read with relevant rules issued thereunder;

e) The matter described in the Basis for Qualified Opinion Paragraph / Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;

f) On the basis of the written representations received from the Directors as on 31st March 2018 and taken on record by the Board of Directors, none of the Directors are disqualified as on 31st March 2018 from being appointed as a Director in terms of subsection 2 of Section 164 of the Act;

g) The Qualification relating the maintenance of accounts and other matters connected therewith are as stated in the basis of Qualified opinion paragraph;

h) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B” and ;

i) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements-Refer Note 37(g),(h),(i) and (j) to the financial statements

ii. The company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

For Ajay Shobha & Co.

Chartered Accountants

Firm Reg. No. 317031E

Ajaykumar Gupta

Place : Mumbai Partner

Date : 11th May, 2018 Mem. No. : 53071

58

ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT

The Annexure referred to in Paragraph 1 under the heading “Report on Other Legal and Regulatory Requirements” in our Independent Auditor’s Report to the members of Provogue (India) Limited for the year ended 31st March, 2018.

As required by the Companies (Auditors Report) Order, 2016 and according to the information and explanations given to us during the course of the audit and on the basis of such checks of the books and records as were considered appropriate we report that:

(i) a) The Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

(b) The Fixed Assets have been physically verified by the management during the year at reasonable intervals. In our opinion the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. No discrepancies have been noticed on such physical verification.

(c) According to the information and explanations given to us and on the basis of our examination of records of the Company, the title deeds of immovable properties are held in the name of the Company.

(ii) The inventories have been physically verified by the management during the year at reasonable intervals. No material discrepancies were noticed on physical verification of inventory by the management.

(iii) The company has granted unsecured loans to companies covered in the register maintained under section 189 of the Companies Act, 2013.

a) The said loans are interest free and the other terms and conditions of the grant of such loans were not, prima facie, prejudicial to the company’s interest;

b) The terms of arrangements do not stipulate any repayment schedule and the loans are repayable on demand. Accordingly, paragraph 3(iii)(b) of the Order is not applicable to the Company in respect of repayment of the principal amount;

c) There are no overdue amounts in respect of such loans

(iv) The Company has not granted any loans or provided any guarantees or security to the parties covered under the Section 185 of the Act. With regards to investments in securities and loans provided

to other body corporates after enforcement of section186 of the Act, the Company has complied with the provisions of section 186 of the Act.

(v) The Company has not accepted any deposits from the public in accordance with the provisions of sections 73 to 76 of the Act and the rules framed there under.

(vi) The Central Government has prescribed the maintenance of cost record under Section 148(1) of the Act. We have not reviewed the cost records maintained by the Company but based on the information submitted by the Company we are of the view that such accounts and records have been made and duly maintained.

(vii) a) Accordingly to the records of the Company, the undisputed statutory dues including Provident Fund, Employees’ State Insurance, Income Tax, Sales Tax, Service Tax, Duty of Custom, Duty of Excise, Value Added Tax, Goods and Service Tax, Cess and other statutory dues, to the extent applicable, have not been regularly deposited with the appropriate authorities. There are no undisputed amount payable in respect of such statutory dues which have remained outstanding as at 31st March, 2018 for a period more than six months from the date they became payable.

b) According to the records of the Company, Income Tax, Sales Tax, Service Tax, Duty of Custom, Duty of Excise, Value Added Tax, Goods and Service Tax which have not been deposited on account of any dispute with the relevant authorities are given below:

Name of Statute

Amount ( ` in

Lacs)

Period to which amount relates

Forum where dispute is

pending

Sales Tax

115.49 2006-07 to 2011-12

Deputy/Joint Commissioner – Appeals

Income Tax

292.51 2008-09 to 2011-12

ITAT (Appeals)

(viii) In our opinion and according to the information and explanations given to us, the Company has defaulted in the repayment of borrowings to banks since the credit facilities were classified as sub


standard due to expiry of stipulated time for SDR (Refer note 34(i) and 42). The amount outstanding (excluding interest) at the end of the year are as under.

Particulars ` In lacs

Andhra Bank 5,622.58

Corporation Bank 2,821.68

Punjab National Bank 2,257.07

Indusind Bank 395.63

Central Bank of India 2,865.80

Small Industries Development Bank of India

279.17

Bank of India 3,568.11

17,810.04

The company does not have any loans or borrowing from financial institution or Government and has not issued any debentures.

(ix) The company did not raise money by way of initial public offer or further public offer (including debt instruments) and term loans during the year.

(x) According to the information & explanations given to us, no fraud by the company or on the company by its officers or employees has been noticed or reported during the course of our audit.

(xi) According to the information and explanation given to us and based on our examination of the records of the Company, the Company has paid / provided for managerial remuneration in accordance with the requisite approvals mandate by the provision of section 197 read with schedule V of the Act.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi

company. Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on our examinations of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act, where applicable. The details of such related party transactions have been disclosed in the standalone Ind AS financial statements as required by applicable accounting standards.

(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

(xv) According to the information and explanations given to us and based on our examination of the records, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.



Firm Reg. No. 317031E

Ajaykumar Gupta


Date : 11th May, 2018 Mem. No. : 53071

60

ANNEXURE “B” TO THE INDEPENDENT AUDITOR’S REPORT

ANNEXURE “B” to the Independent Auditor’s Report of even date on the Financial statements of Provogue (India) Limited for the year ended 31st March 2018.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act.

We have audited the internal financial controls over financial reporting of Provogue (India) Limited (“the Company”) as of 31st March 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal controls over financial reporting criteria established by the Company considering the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India (“ICAI”). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013 (“the Act”).

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing

the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal controls based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial control system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company’s internal financial controls over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial controls over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial controls over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Qualified Opinion

According to the information and explanation given to us and based on our audit, the following material weakness has been identified in the operating effectiveness of the


Company’s internal financial controls over financial reporting as at 31st March 2018:

The documentation in respect of specific policies and procedures including inventories and the IT Controls pertaining to internal financial controls over financial reporting are not adequate and needs to be further strengthened. This may potentially result in the risk of overriding of these controls and misstatement in recording of transaction.

A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

In our opinion, except for the possible effect of the material weakness described above on the achievement of the objectives of the control Criteria, the Company has maintained, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2018, based on the

internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

We have considered the material weaknesses identified and reported above in determining the nature, timing and audit tests applied in our audit of the financial statements of the Company and these material weaknesses above does not affect our opinion on the financial statements of the Company.

For Ajay Shobha & Co.Chartered AccountantsFirm Reg. No. 317031E

Ajaykumar Gupta


Date : 11th May, 2018 Mem. No. : 53071

62

As per our report of even date attached

For Ajay Shobha & Co. For and on behalf of the Board of DirectorsChartered AccountantsF. R. No. 317031E

Ajaykumar Gupta Nikhil Chaturvedi Deep GuptaPartner Managing Director Whole-time Director & CFO Mem. No. : 53071 DIN: 00004983 DIN: 00004788

Place : Mumbai Place : Mumbai Vishant ShettyDate : 11th May, 2018 Date : 11th May, 2018 Company Secretary

BALANCE SHEET as at 31st March, 2018

( ` In Lacs)Particulars Notes As at

31.03.2018 As at

31.03.2017ASSETSNon-current assetsProperty, Plant and Equipment 2 821.41 1,245.23 Investment Property 3 334.73 350.59 Intangible assets 4 5.77 11.58 Financial Assets

Non Current Investments 5 12,247.42 11,893.38 Loans 6 3,256.21 3,219.27 Other financial assets 7 79.60 1,190.81

Deferred tax assets (net) 8 854.97 915.85 Income tax assets (Net) 9 390.13 368.02

17,990.23 19,194.73 Current assets Inventories 10 1,673.27 20,041.62 Financial Assets

Current Investments 11 400.70 598.60 Trade receivables 12 3,720.73 4,742.18 Cash and cash equivalents 13 543.48 658.65 Bank balances other than cash & cash equivalents 14 115.56 490.62

Other current assets 15 805.20 795.29 7,258.95 27,326.97

TOTAL ASSETS 25,249.18 46,521.70 EQUITY AND LIABILITIESEQUITYEquity Share capital 16 2,333.82 2,333.82 Other Equity 2,878.51 18,419.47

5,212.33 20,753.29 LIABILITIES Non-current liabilities

Financial Liabilities Non Current Borrowings 17 - - Other financial liabilities 18 33.84 235.54 Provisions 19 37.95 35.27

71.79 270.81 Current liabilities Financial Liabilities Current Borrowings 20 14,241.93 17,806.62 Trade payables 21 1,730.98 2,956.94 Other financial liabilities 22 3,570.64 4,375.35 Other current liabilities 23 382.61 332.42 Provisions 24 38.90 26.27

19,965.06 25,497.60 TOTAL EQUITY AND LIABILITIES 25,249.18 46,521.70

The accompanying notes form an integral part of the standalone financial statements






STATEMENT OF PROFIT AND LOSS for the year ended 31st March, 2018

( ` In Lacs) Particulars Notes Year ended

31.03.2018 Year ended 31.03.2017

INCOMERevenue from operations 25 9,177.80 21,353.10 Other income 26 581.05 498.98 Total income 9,758.85 21,852.08

EXPENSESCost of materials consumed 27 4,172.32 3,804.81 Purchases of stock - in - trade 28 2,746.69 13,244.40 Changes in inventories of finished goods, work in process and stock in trade

29 9,795.46 12,996.96

Employee benefits expense 30 538.61 509.07 Finance costs 31 1,480.55 3,434.24 Depreciation and amortisation expense 32 257.37 418.76 Other expenses 33 4,533.35 5,549.17 Total expenses 23,524.35 39,957.40

Profit / (Loss) before exceptional items and tax (13,765.50) (18,105.32)Exceptional items 34 1,722.04 - Profit / (Loss) before tax (15,487.54) (18,105.32)

Less : Tax expenses - Current tax - - - Deferred tax 60.89 (124.60)Total tax expense 60.89 (124.60)

Profit / (loss) for the year (15,548.43) (17,980.72)

Other Comprehensive IncomeItems that will not be reclassified subsequently to profit or lossRemeasurement benefit of defined benefit plan 9.93 (2.98)Income tax on above (2.47) 0.74

7.46 (2.24)Total comprehensive income for the year (15,540.97) (17,982.96)Earnings per equity share 35Nominal value of share ` 10 : Basic (6.66) (9.42) : Diluted (6.66) (9.42)

The accompanying notes form an integral part of the standalone financial statements

64

CASH FLOW STATEMENT for the year ended 31st March, 2018

( ` In Lacs) Particulars As at

31.03.2018 As at

31.03.2017

OPERATING ACTIVITIES Profit / (Loss) before exceptional items and tax (13,765.50) (18,105.32)

Adjustments to reconcile profit before tax to net cash inflow from operating activities

Finance Cost 1,480.55 3,434.24

Remesurement of Employee benefit obligation 7.46 (2.24)

Depreciation and amortisation expense 257.37 418.76

Loss on sale / discard of fixed assets 136.06 -

Provision for Doubtful Debts - 753.25

Loss on sale of investments 7.26 -

Provision for expected credit loss 850.00 -

Advances and other financial assets no longer recoverable written off 541.58 909.33

Interest Income (28.70) (73.19)

Dividend income on Current investments (24.21) (31.59)

Unrealised (gain) / loss on foreign exchange fluctuation 8.97 78.42

Net gain on sale of current investments - (1.13)

Working capital adjustments:- (Increase) / Decrease in Inventories 11,393.97 12,411.82

(Increase) / Decrease in Trade Receivables 1,012.48 1,557.47

(Increase) / Decrease in Other Assets (290.28) 151.60

Increase / (Decrease) in Trade Payables (1,225.96) (276.59)

Increase / (Decrease) in Provisions 15.30 (37.76)

Increase / (Decrease) in Other Liabilties (151.51) (122.93) 224.84 1,064.14

Income taxes refund /(paid) (22.11) -

Net cash flow from operating activities 202.73 1,064.14

INVESTING ACTIVITIES Purchase of property, plant and equipment (1.99) (8.74)

Sale of property, plant and equipment 54.07 -

Balances with banks to the extent held as margin money 375.06 251.63

Grant/(Refund) of Loan (36.94) 621.65

Sale/(Purchase) of Investments (163.40) (73.54)

Interest Income 28.70 73.19

Dividend income on Current investments 24.21 31.59

Net cash flow used in investing activities 279.71 895.78


CASH FLOW STATEMENT for the year ended 31st March, 2018


31.03.2018 As at

31.03.2017

FINANCING ACTIVITIESIssue of Share Capital including premium from conversion of borrowings - -

Repayment of Borrowings (4,369.40) 1,747.14

Interest paid (1,480.55) (3,434.24)

Reversal of Post SDR Interest 5,252.34 -

Net cash flow from financing activities (597.61) (1,687.10)

Increase in cash and cash equivalents (115.17) 272.83

Cash and cash equivalents at the beginning of the year (note 13) 658.65 385.82

Cash and cash equivalents at the end of the year (note 13) 543.48 658.65

Note :

The cash flow statement has been prepared under the indirect method as set out in Indian Accounting Standard (Ind AS 7) statement of cash flows.

The amendments to Ind AS 7 Cash flow statements requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes,suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities and financial assets arising from financing activities,to meet the disclosure requirement. This amendment has become effective from 1st April, 2017 and the required disclosure is made below. There is no other impact on the financial statements due to this amendments.

Reconciliation between the opening and closing balances in the balance sheet for liabilities and financial assets arising from financing activities

Particulars Non-cash changes

31-Mar-17 Cash flows Fair value changes

Current /Non - current classification

31-Mar-18

Long-term borrowings - - - - -

Short Term Borrowings 17,806.62 (3,564.69) - - 14,241.93

Other financial liabilities 4,372.82 (804.71) - - 3,568.11

Total liabilities from financing activities

22,179.44 (4,369.40) - - 17,810.04

The accompanying notes are an integral part of these standalone financial statements


For Ajay Shobha & Co. For and on behalf of the Board of DirectorsChartered Accountants



66

STANDALONE STATEMENT OF CHANGES IN EQUITY for the year ended 31st March, 2018

( ` In Lacs)EQUITY SHARE CAPITAL : Balance

as at 1st April, 2016

Changes during the

year

Balance as at 31st March,

2017

Changes during the

year

Balance as at

31st March, 2018

Paid up Capital (Refer Note 16)

1,143.57 1,190.25 2,333.82 - 2,333.82

( ` In Lacs)OTHER EQUITY :

Particulars Capital Reserve

Securities Premium Reserve

Capital Redemption

Reserve

General Reserve

Retained Earnings

Other Comprehensive

Income

Total

Balance as at April 1, 2016 1,842.22 36,168.23 1,184.56 400.00 (11,131.64) 9.78 28,473.15

Total Comprehensive Income/ (loss) for the year - - - - (17,980.72) - (17,980.72)

On issue of share capital during the

year [Refer Note 16 (d)(vii)] - 7927.05 - - - - 7,927.05

Balance as at 31st March, 2017 1,842.22 44,095.28 1,184.56 400.00 (29,112.36) 9.78 18,419.48

Total Comprehensive Income/ (loss) for the year - - - - (15,548.43) 7.46 (15,540.97)

Balance as at 31st March, 2018 1,842.22 44,095.28 1,184.56 400.00 (44,660.79) 17.24 2,878.51

Nature and Purpose of Reserves

Capital Reserve

Capital reserve will be utilised in accordance with provision of the Act.

Capital Redemption Reserve

The Company has recognised Capital Redemption Reserve on buyback of equity shares from its retained earnings. The amount in Capital Redemption Reserve is equal to nominal amount of the equity shares bought back. It is a non-distributable reserve.


Securities Premium Reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Act.

General Reserve

General Reserve represents appropriation of retained earnings and are available for distribution to shareholders.

Retained Earnings

Retained Earnings represents surplus/accumulated earnings of the Company and are available for distribution to shareholders.

The accompanying notes are an integral part of these standalone financial statementsAs per our report of even date attached

For Ajay Shobha & Co. For and on behalf of the Board Chartered AccountantsF. R. No. 317031E



Annual Report 2018

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2018

67

I. COMPANY OVERVIEW

Provogue (India) Limited (the Company) is a listed public company domiciled in India and incorporated on 17th November 1997. The Company is engaged in the business of manufacturing, trading of garments, fashion accessories, textile products and related materials. The equity shares of the Company are listed on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited.

II. SIGNIFICANT ACCOUNTING POLICIES:

i) Basis of Preparation and Presentation:

The Financial Statements are prepared in accordance with Indian Accounting Standards (IndAS) notified under Section 133 of the Companies Act, 2013 (“Act”) read with Companies (Indian Accounting Standards) Rules, 2015; and the other relevant provisions of the Act and Rules thereunder.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. The Financial Statements have been prepared under historical cost convention basis except for certain financial assets and financial liabilities measured at fair value.

Authorisation of Financial Statements: The Financial Statements were authorized for issue in accordance with a resolution of the directors on 11th May, 2018.

ii) Use of Estimates and Judgments:

The preparation of the financial statements of the Company in accordance with Indian Accounting Standards(Ind-AS) requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities and the accompanying disclosures along with contingent liabilities at the date of the financial statements. These estimates are based upon management’s best knowledge of current events and actions; however uncertainty about these assumptions and estimates could result in outcomes that may require adjustment to the carrying amounts of assets or liabilities in future periods. Appropriate revisions in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Revisions in estimates are recognized prospectively in the financial statements in the period in which the estimates are revised in any future periods affected.

iii) Fair Value Measurement:

The Company measures certain financial instruments at fair value at each reporting date.

Certain accounting policies and disclosures require the measurement of fair values, for both financial and non-financial asset and liabilities.

The Company used valuation techniques, which were appropriate in circumstances and for which sufficient data were available considering the expected loss/ profit in case of financial assets or liabilities.

iv) Revenue Recognition

Revenue is recognized to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment.

Revenue in respect of export sales is recognised on shipment of products.

Interest income is recognized using Effective Interest Rate (EIR) method.

Dividend Income on Investments is accounted for when the right to receive the payment is established.

v) Inventories

Inventories of Raw Materials, Finished Goods, Semi-Finished Goods, Accessories & Packing Materials are valued at cost or net realizable value, whichever is lower. Goods in transit are valued at cost or net realizable


68

value, whichever is lower. Cost comprises of all cost of purchases, cost of conversion and other costs incurred in bringing the inventory to their present location and conditions. Cost is arrived at on Weighted Average basis.

vi) Property, plant and equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and/or accumulated impairment losses, if any.

Such cost includes the cost of replacing part of the property, plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met. When significant parts of property, plant and equipment are required to be replaced at intervals, the Company recognises such parts as individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied and the carrying amount of old part is written off. All other repair and maintenance costs are recognised in the statement of comprehensive income as incurred.

vii) Intangible Assets

Intangible assets acquired are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses, if any.

Intangible Assets are amortized on a systematic basis over its useful life on straight line basis and the amortization for each period will be recognized as an expense.

i) Trade Mark is amortised on Straight Line Method over a period of ten years.

ii) Computer Software is amortised on Straight Line Method over a period of three years.

viii) Depreciation

Depreciation on Plant, Property and Equipment has been provided on the Written down Value method based on the useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. Depreciation on Furniture and Fixtures at Studios is amortized equally over a period of six years from the date of capitalisation. Fixed assets acquired on lease basis are amortised over the period of the lease term.

Depreciation methods, useful lives and residual values are reviewed at each reporting date.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Subsequent expenditure relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the Company and the cost of the item can be measured reliably. Repairs and maintenance costs are recognized in the statement of profit and loss when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or disposition of the asset and the resultant gains or losses are recognized in the statement of profit and loss.

ix) Borrowing costs

Borrowing costs consist of interest and other costs incurred in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

Borrowing costs that are attributable to the acquisition or construction of qualifying assets (i.e. an asset that necessarily takes a substantial period of time to get ready for its intended use) are capitalized as a part of the cost of such assets. All other borrowing costs are charged to the Statement of Profit & Loss.

x) Investment Property

Investment property applies to owner-occupied property and is held to earn rentals or for capital appreciation or both. Hence such properties are reclassified from Property, Plant and Equipment to Investment property. Investment properties are depreciated using the straight line method over their estimated useful life.

Annual Report 2018


69

On transition to Ind AS, the company has elected to continue with the carrying value of all of its investment properties recognized as at 1st April, 2015 measured as per the previous GAAP and use that carrying value as the deemed cost of investment properties.

xi) Taxes on Income

Income tax expense comprises current tax expense and the net change in the deferred tax asset or liability during the year. Current and deferred tax are recognized in the statement of profit and loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity, respectively.

a) Current Income Tax

Current income tax for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities based on the taxable income for that period. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date.

Current tax assets and liabilities are offset only if, the Company:

Ø has a legally enforceable right to set off the recognized amounts; and

Ø intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

b) Deferred Income Tax

Deferred tax is recognized for the future tax consequences of deductible temporary differences between the carrying values of assets and liabilities and their respective tax bases at the reporting date, using the tax rates and laws that are enacted or substantively enacted as on reporting date.

Deferred tax assets are recognized to the extent that it is probable that future taxable income will be available against which the deductible temporary differences, unused tax losses and credits can be utilized.

Deferred tax assets and liabilities are offset only if:

Ø Entity has a legally enforceable right to set off current tax assets against current tax liabilities; and

Ø Deferred tax assets and the deferred tax liabilities relate to the income taxes levied by the same taxation authority.

xii) Leases

Lease payments under operating leases are recognized as an expense on a straight line basis in the statement of profit and loss over the lease term except where the lease payments are structured to increase in line with expected general inflation.

For arrangements entered into prior to 1 April 2015, the Company has determined whether the arrangement contain lease on the basis of facts and circumstances existing on the date of transition.

xiii) Financial Assets

a) Initial recognition and measurement

All financial assets (not measured subsequently at fair value through profit or loss) are recognised initially at fair value plus transaction costs that are attributable to the acquisition of the financial asset.

b) Subsequent measurement

Subsequent measurement is determined with reference to the classification of the respective financial assets.The Company classifies financial assets as subsequently measured at amortised cost, fair value


70

through other comprehensive income or fair value through profit or loss on the basis of its business model for managing the financial assets and the contractual cash flow characteristics of the financial asset.

(i) Debt instruments at amortised cost

A ‘debt instrument’ is measured at the amortised cost if both the following conditions are met:

The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the Statement of Profit & Loss. The losses arising from impairment are recognised in the Statement of Profit & Loss.

(ii) Debt instruments at Fair value through Other Comprehensive Income (FVOCI)

A ‘debt instrument’ is measured at the fair value through other comprehensive income if both the following conditions are met:

• The asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets

• Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, these assets are subsequently measured at fair value. Interest income under effective interest method, foreign exchange gains and losses and impairment are recognised in the Statement of Profit & Loss. Other net gains and losses are recognised in other comprehensive Income.

(iii) Debt instruments at Fair value through profit or loss (FVTPL)

Fair value through profit or loss is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorisation as at amortised cost or as FVOCI, is classified as at FVTPL.

(iv) Equity investments

All equity investments in scope of Ind-AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company decides to classify the same either as at FVOCI or FVTPL. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.

For equity instruments classified as FVOCI, all fair value changes on the instrument, excluding dividends, are recognized in other comprehensive income (OCI).

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit & Loss.

c) Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the Company’s Balance Sheet) when.

Annual Report 2018


71

The rights to receive cash flows from the asset have expired, or

The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either:

- The Company has transferred substantially all the risks and rewards of the asset, or

- The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

On de-recognition, any gains or losses on all debt instruments and equity instruments (measured at FVTPL) are recognised in the Statement of Profit & Loss. Accumulated gains or losses on equity instruments measured at FVOCI are never reclassified to the Statement of Profit & Loss.

d) Impairment of financial assets

In accordance with Ind-AS 109, the Company applies Expected Credit Loss (“ECL”) model for measurement and recognition of impairment loss on the financial assets measured at amortised cost

Loss allowances on trade receivables are measured following the ‘simplified approach’ at an amount equal to the lifetime ECL at each reporting date. In respect of other financial assets measured at amortised cost, the loss allowance is measured at 12 month ECL for financial assets with low credit risk at the reporting date and there is a significant deterioration in the credit risk since initial recognition of the asset.

xiv) Financial Liabilities


All financial liabilities are recognised initially at fair value net of transaction costs that are attributable to the respective liabilities.


Subsequent measurement is determined with reference to the classification of the respective financial liabilities. The Company classifies all financial liabilities as subsequently measured at amortised cost, except for financial liabilities at fair value through profit or loss.

(i) Financial Liabilities at fair value through profit or loss (FVTPL)

A financial liability is classified as at fair value through profit or loss if it is classified as held-for-trading or is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and changes therein, including any interest expense, are recognised in Statement of Profit & Loss.

(ii) Financial Liabilities measured at amortised cost

After initial recognition, financial liabilities other than those which are classified as fair value through profit or loss are subsequently measured at amortised cost using the effective interest rate method (“EIR”).

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit & Loss.

c) Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is


72

treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit & Loss.

xv) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

xvi) Fair value of financial instruments

In determining the fair value of its financial instruments, the Company uses following hierarchy and assumptions that are based on market conditions and risks existing at each reporting date.

Fair value hierarchy:

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Ø Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Ø Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

Ø Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

xvii) Financial guarantees

Financial guarantee contracts issued by the Corporation are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of the debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the fair value initially recognised less cumulative amortisation.

xviii) Cash & Cash Equivalents

The Company considers all highly liquid financial instruments, which are readily convertible into known amounts of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents.

Cash and cash equivalents comprise cash on hand and in banks and demand deposits with banks which can be withdrawn at any time without prior notice or penalty on the principal. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.

xix) Investment in Equity Shares Of Subsidiaries & Joint venture – Unquoted

Investments in equity shares of Subsidiaries, Joint Ventures & Associates are recorded at cost and reviewed for impairment at each reporting date.

xx) Employee Benefits

Defined benefit plans:

Gratuity, which is a defined benefit plan, is accrued based on an independent actuarial valuation, which is done based on project unit credit method as at the balance sheet date. The Company recognizes the net

Annual Report 2018


73

obligation of a defined benefit plan in its balance sheet as an asset or liability. Gains and losses through re-measurements of the net defined benefit liability/(asset) are recognized in other comprehensive income. In accordance with Ind AS, re-measurement gains and losses on defined benefit plans recognised in OCI are not be to be subsequently reclassified to statement of profit and loss. As required under Ind AS compliant Schedule III, the Company transfers it immediately to retained earnings.

xxi) Events after Reporting date

Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted within the financial statements. Otherwise, events after the Balance Sheet date of material size or nature are only disclosed.

xxii) Foreign Currency Transactions:

a) Functional and Presentation Currency:

The Financial Statements are presented in Indian rupees which is the functional currency for the Company. All amounts have been rounded off to the nearest lakh, unless otherwise indicated. Hence, the figures already reported for all the quarters during the year might not add up to the year figures reported in this statement.

b) Transactions and Balances

Ø Transactions denominated in foreign currency are normally accounted for at the exchange rate prevailing at the time of transaction.

Ø Monetary assets (including loans to subsidiaries) and Liabilities in foreign currency transactions remaining unsettled at the end of the year (other than forward contract transactions) are translated at the year-end rates and the corresponding effect is given to the respective account.

Ø Exchange differences’ arising on account of fluctuations in the rate of exchange is recognized in the statement of Profit & Loss.

Ø Exchange rate difference arising on account of conversion/translation of liabilities incurred for acquisition of Fixed Assets is recognized in the Statement of Profit & Loss.

Ø Non-monetary items are reported at the exchange rate at the date of transaction.

Ø The premium in respect of forward exchange contract is amortised over the life of the contract. The net gain or loss on account of any exchange difference, cancellation or renewal of such forward exchange contracts is recognised in the Statement of Profit & Loss.

xxiii) Impairment of Assets:

At each balance sheet date, the Company assesses whether there is any indication that any property, plant and equipment and intangible assets with finite life may be impaired. If any such impairment exists, the recoverable amount of an asset is estimated to determine the extent of impairment, if any. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

xxiv) Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.


74

Provisions are not discounted to present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

xxv) Contingent Liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the condensed standalone financial statements.

xxvi) Earnings per Share

The basic earnings per share is computed by dividing the net profit attributable to equity shareholders for the period by the weighted average number of equity shares outstanding during the period.

The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share, and also the weighted average number of equity shares which could be issued on the conversion of all dilutive potential equity shares.

xxvii) Classification of Assets and Liabilities as Current and Non-Current:

All assets and liabilities are classified as current or non-current as per the Corporation’s normal operating cycle (determined at 12 months) and other criteria set out in Schedule III of the Act

xxviii) Cash Flows

Cash flows are reported using the indirect method, where by net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities are segregated.

xxix) Operating Segments

Operating segments are reported in a manner consistent with the internal reporting provided to Chief Operating Decision Maker (CODM).

The Company has identified its Managing Director as CODM which assesses the operational performance and position of the Company and makes strategic decisions.

Annual Report 2018


75

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Annual Report 2018


77

NOTE 3 : INVESTMENT PROPERTY Following are the changes in the carrying value of investment property for the year ended March 31, 2018:

( ` In Lacs)

Particulars Building Gross carrying value as of April 1, 2017 393.44 Additions - Deletions - Gross carrying value as of March 31, 2018 393.44 Accumulated amortization as of April 1, 2017 42.85 Depreciation for the year 15.86 Deletions - Accumulated amortization as of March 31, 2018 58.71 Carrying value as of March 31, 2018 334.73

Following are the changes in the carrying value of investment property for the year ended March 31, 2017:

Particulars Building Gross carrying value as of April 1, 2016 393.44 Additions - Deletion - Gross carrying value as of March 31, 2017 393.44 Accumulated amortization as of April 1, 2016 22.07 Depreciation for the year 20.78 DeletionAccumulated amortization as of March 31, 2017 42.85 Carrying value as of March 31, 2017 350.59

i) Amount recognised in profit and loss for investment properties

Particulars As at 31.03.2018

As at 31.03.2017

Rental Income 43.50 64.33 Direct Operating expenses from property that generated rental income

- -

Direct Operating expenses from property that did not generate rental income

- -

Profit from Investment Properties before Depreciation 43.50 64.33 Depreciation 15.86 20.78 Profit from Investment Properties 27.64 43.55

ii) Fair Value


As at 31.03.2017

Investment Properties 2,474.14 2,474.14

Estimation of Fair value :

The above valuation of the investment properties are in accordance with the Ready Reckoner rates prescribed by the Government of Maharashtra for the purpose of levying stamp duty. Since the valuation


78

is based on the published Ready Reckoner rates, the company has classified the same under Level 2 of Fair value hierarchy.

iii ) Leasing arrangements

The Company has entered various non cancellable leasing agreement. There is an escalation clause in the lease agreement during the lease year in line with expected general inflation. There are no restrictions imposed by lease arrangements and there are no sub leases. There are no contingent rents. Disclosures as required under Ind-AS 17 on “Lease” are given below:

Future minimum Lease payments under non-cancellable operating lease:


As at 31.03.2017

Within one year 36.00 51.00 Later than one year but not later than 5 years 93.00 102.00 Later than 5 years - -

Initial direct costs incurred on these leasing transactions have been recognised in the Statement of Profit and Loss.

NOTE 4 : INTANGIBLE ASSETS

Following are the changes in the carrying value of acquired intangible assets for the year ended March 31, 2018:

Particulars Trade Mark -

Provogue UK

Computer Software

Total

Deemed Cost as on April 1, 2017 57.89 167.27 225.16 Additions - - - Deletions - - - Gross carrying value as of March 31, 2018 57.89 167.27 225.16 Accumulated amortization as of April 1, 2017 46.33 167.25 213.58 Amortization expense 5.79 0.02 5.81 Deletions - - - Accumulated amortization as of March 31, 2017 52.12 167.27 219.39 Carrying value as of March 31, 2018 5.77 (0.00) 5.77


Particulars Trade Mark -

Provogue UK

Computer Software

Total

Gross carrying value as of April 1, 2016 57.89 167.27 225.16 Additions - Deletion - Gross carrying value as of March 31, 2017 57.89 167.27 225.16 Accumulated amortization as of April 1, 2016 40.54 167.19 207.73 Amortization expense 5.79 0.06 5.85 Deletion - Accumulated amortization as of March 31, 2017 46.33 167.25 213.58 Carrying value as of March 31, 2017 11.56 0.02 11.58

Annual Report 2018


79

NOTE 5 : NON CURRENT INVESTMENTS

( ` In Lacs)


As at 31.03.2017

Unquoted,Fully Paid Up

Investment in equity instruments of subsidiaries at cost

(All at face value of ` 10 each fully paid unless stated otherwise)

Sporting & Outdoor Ad-Agency Private Limited # 125.98 132.61

3,97,196 (PY 4,18,102) Equity Shares

Pronet Interactive Private Limited (Converted in to LLP from 17th August, 2017)

- 10.00

Nil (PY 1,00,002) Equity Shares

Millenium Acessories Limited 1,559.79 1,559.79

15,50,000 Equity Shares

Profab Fashions Private Limited 505.00 505.00


Provogue Infrastructure Private Limited 6,195.38 6,195.38


Provogue Holding Limited (Singapore) 4.44 4.44

9385 Ordinary Shares of S$ 1 fully paid up

Faridabad Festival City Private Limited 441.01 441.01


Acme Adertisments Private Limited 1.00 1.00

10,000 Equity Shares

Provogue Personal Care Private Limited 1.00 127.84

10,000 (PY 10,000) Equity Shares

Brightland Developers Private Limited 21.31 21.31


Elite Team HK Limited 1,344.34 1,344.35


Proskins Fashions Private Limited 5.00 5.00


Investment in equity instruments of joint ventures at cost

ProSFL Private Limited 5.67 5.67


Investment in equity instruments of step-down subsidiaries at cost

Standard Mall Private Limited 66.94 66.94


Investment in equity instruments at fair value through Profit and loss

(All at face value of ` 10 each fully paid unless stated otherwise)

Presage Technopower Private Limited - 0.35

3,514 Equity Shares

Investment in Limited Liability Partnership

Pronet Interactive LLP 0.96 -

Investment in Debentures of Subsidiary (at Cost)


80

( ` In Lacs)


As at 31.03.2017

Provogue Personal Care Private Limited 1,134.95 650.00

0% Fully Convertible Debentures

Investment in Preference shares at fair value through Profit and loss

Sudharshan Procon Private Limited 850.00 850.00

(1,06,25,000 0% Non-Cumulative Compulsory Convertible Preference Shares of ` 10 each ` 8 paid up)

Other Investment at fair value through Profit and loss

Indian Real Opportunity Venture Capital Fund (Scheme: Milestone Domestic)

- 10.31

Nil ( 31.03.2017 1,031 units) of face value of ` 1,000 each fully paid up

Quoted,Fully Paid Up

Investment in equity instruments at fair value through Profit and loss

Andhra Bank 1.87 2.61

4,505 Equity Shares of face value of ` 10 each fully paid up

Prozone Intu Properties Limited 108.76 92.38

2,50,000 Equity Shares of ` 2 each

12,373.40 12,025.99

Add / (Less)

Provision for permenent diminution in the value of investments # (125.98) (132.61)

(125.98) (132.61)

12,247.42 11,893.38

Aggregate Value of Unquoted Investments 12,136.79 11,798.39

Aggregate Value of Quoted Investments 110.63 94.98

Market Value of Quoted Investments 110.63 94.98

NOTE 6 : LOANS

Unsecured, considered good unless stated otherwise

( ` In Lacs)Particulars As at

31.03.2018 As at

31.03.2017Loans and advances to related parties Unsecured, Considered Good 3,256.21 3,219.27 Unsecured, Considered Doubtful 61.77 61.77

3,317.98 3,281.04 Less : Provision for doubtful advances (61.77) (61.77)

(61.77) (61.77) 3,256.21 3,219.27 3,256.21 3,219.27

Annual Report 2018


81


31.03.2018 As at

31.03.2017Details of Loans and advances to related parties : Unsecured, Considered Good

- To subsidiary companies Faridabad Festival City Private Limited 56.07 59.86 Millennium Accessories Limited 58.60 82.51 Brightland Developers Private Limited 31.17 63.92 Provogue Infrastructure Pvt Ltd 1,080.03 903.93 Elite Team HK Limited (Hongkong) 1,882.83 1,707.49 Provogue Personal Care Private Limited - 271.79 - To step down subsidiary company Standard Mall Private Limited 145.58 128.03 - To joint venture company ProSFL Private Limited 1.92 1.74

3,256.21 3,219.26 Unsecured, Considered Doubtful - To subsidiary (Upto 17.10.2017) / associate (from 18.10.2017) Sporting and Outdoor Ad Agency Private Limited 61.77 61.77

3,317.98 3,281.03

NOTE 7 : OTHER FINANCIAL ASSETS

( ` In Lacs)


As at 31.03.2017

Security Deposits

Unsecured, Considered Good 79.60 340.81

Unsecured, Considered Doubtful 394.53 445.47

474.13 786.28

Less : Provision for doubtful advances 394.53 445.47

79.60 340.81

Advance recoverable in cash or in kind 850.00 850.00

Less : Provision for expected credit loss 850.00 -

- 850.00

79.60 1,190.81

NOTE 8 : TAX EXPENSE

(a) Amounts recognised in Statement of Profit and Loss

( ` In Lacs)Particulars 2017-18 2016-17Deferred tax expenseOrigination and reversal of temporary differences 60.89 (124.60)Tax expense recognised in the statement of profit and loss 60.89 (124.60)


82

(b) Amounts recognised in other comprehensive income

( ` In Lacs)Particulars 2017-18 2016-17

Before tax

Tax (expense)

benefit

Net of tax

Before tax

Tax (expense)

benefit

Net of tax

Items that will not be reclassified to profit or lossRemeasurements of the defined benefit plans

9.93 (2.47) 7.46 (2.98) 0.74 (2.24)

9.93 (2.47) 7.46 (2.98) 0.74 (2.24)

(c) Reconciliation of effective tax rate

( ` In Lacs)Particulars 2017-18 2016-17Profit before tax (15,487.54) (18,105.32)Tax using the Company’s domestic tax rate (Current year 27.55% and Previous Year 33.063%)

(4,267.20) (5,986.16)

Tax effect of :Tax effect on reversal due to losses by the company 4,267.20 5,986.16 Others 60.89 (124.60)Tax expense as per Statement of Profit & Loss 60.89 (124.60)Effective tax rate -0.39% 0.69%

(d) Movement In Deferred tax Balances

Particulars Net balance

as at April 1, 2017

Recognised in the

statement of profit and

loss

Recognised in OCI

Net Balance

as at March 31,

2018

Deferred tax asset

Deferred tax

liabilities

Property, Plant and Equipments, investment property and intangible assets

1093.74 (130.42) 0.00 1224.16 1224.16 0.00

Financial assets (19.40) 190.45 0.00 (209.85) 0.00 209.85

Other Liabilities / provisions

20.94 (4.18) 0.00 25.12 25.12 0.00

Investments (177.88) 6.58 0.00 (184.46) 0.00 184.46

Borrowings (1.54) (1.54) 2.47 0.00 0.00 0.00 Tax assets (liabilities) before set-off

915.85 60.89 2.47 854.97 1249.28 394.31

Set-off of deferred tax liabilities

(394.31)

Net deferred tax assets/ (liabilities)

854.97

Annual Report 2018


83

Particulars Net balance

as at April 1, 2016

Recognised in the

statement of profit and

loss

Recognised

in OCI

Net Balance

as at March 31,

2017

Deferred tax

liability

Deferred tax asset

Property, Plant and Equipments, investment property and intangible assets

1,113.49 19.75 1,093.74 1,093.74 0.00

Financial assets (185.43) (166.02) (19.40) 0.00 19.40

Other Liabilities / provisions

19.82 (1.12) 20.94 20.94 0.00

Investments (151.53) (177.88) 0.00 177.88

Borrowings (5.09) (3.56) (0.74) (1.54) 0.00 1.54 Deferred tax (Asset)/Liabilities

791.26 (150.95) (0.74) 915.85 1,114.68 198.83

Set-off of deferred tax liabilities

(198.83)


915.85

(e) Tax Losses

Particulars 2017-18 2016-17 Unused tax losses for which no deferred tax asset has been recognised

40,532.78 25,045.24

Potential tax benefit @ 27.55% (PY 33.063%) 11,167.79 8,280.71

NOTE 9 : INCOME TAX ASSETS (NET)

( ` In Lacs)


As at 31.03.2017

Advance Tax & TDS (net of provision for tax) 390.13 368.02

390.13 368.02

NOTE 10 : INVENTORIES (Valued at lower of cost or Net Realisable Value)

( ` In Lacs)


As at 31.03.2017

Raw materials and components 643.60 2,232.70

Work-in-process - 58.08

Finished goods 185.00 3,685.99

Stock in trade 836.61 14,047.38

Accessories & packing materials 8.06 17.47

1,673.27 20,041.62


84

NOTE 11 : CURRENT INVESTMENTS


31.03.2018 As at

31.03.2017 Unquoted InvestmentsInvestments in Mutual Funds at fair value through Profit and loss 39,676 units (PY 59,414 units) of Reliance Money Manager Fund 400.70 598.60

400.70 598.60 Aggregate Value of Unquoted Investments 400.70 598.60

NOTE 12 : TRADE RECEIVABLES


31.03.2018 As at

31.03.2017 Unsecured, Considered Good 3,720.73 4,742.18 Unsecured, Considered Doubtful 746.79 894.12

4,467.52 5,636.30 Less : Provision for Doubtful Debts 746.79 894.12

3,720.73 4,742.18

NOTE 13 : CASH AND CASH EQUIVALENTS


31.03.2018 As at

31.03.2017 Balances with Banks in Current Accounts 541.00 652.18 Cash on Hand 2.48 6.47

543.48 658.65

NOTE 14 : BANK BALANCES OTHER THAN CASH AND CASH EQUIVALENTS


31.03.2018 As at

31.03.2017 Balances with banks to the extent held as margin money 115.56 490.62

115.56 490.62

NOTE 15 : OTHER CURRENT ASSETS


31.03.2018 As at

31.03.2017 Advance recoverable in cash or kind or for value to be received 356.42 386.72 Prepaid expenses 6.64 8.60 Prepaid Rent - 6.04 Premium on forward contract receivable 16.20 - Input GST Credit 31.13 - Export benefit receivable 269.08 292.85 Other receivables 125.73 101.08

805.20 795.29

Annual Report 2018


85

NOTE 16 : EQUITY SHARE CAPITAL


31.03.2018 As at

31.03.2017 Authorised3300.00 lakhs Equity Shares of ` 1 each 3,300.00 3,300.00Issued, Subscribed and Fully Paid Up 3,300.00 3,300.00 2333.82 lakhs (31.03.2017 : 2333.82 lakhs) Equity Shares of ` 1 each fully paid up. 2,333.82 2,333.82

2,333.82 2,333.82

a) Reconciliation of shares outstanding at the beginning and at the end of the period

Particulars As at 31.03.2018 As at 31.03.2017 No. in lakhs ` In lakhs No. in lakhs ` In lakhs

Equity SharesAt the beginning of the year 2,333.82 2,333.82 1,143.57 1,143.57 Issued during the year - - 1,190.25 1,190.25 Outstanding at the end of the year 2,333.82 2,333.82 2,333.82 2,333.82

b) Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of ` 1 per share. Each holder of equity share is entitled to one vote per share.

In the event of liquidation of the Company, the holder of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

c) Details of Shareholders holding more than 5% shares in the company:

Particulars As at 31.03.2018 As at 31.03.2017 No. in lakhs % holding No. in lakhs % holding

Andhra Bank 464.29 19.89 464.29 19.89 Bank of India 201.29 8.63 201.29 8.63 Corporation Bank 197.91 8.48 197.91 8.48 Central Bank of India 160.09 6.86 160.09 6.86 Punjab National Bank 129.63 5.55 129.63 5.55

d) Other Information

(i) ` 29.00 lakhs Equity Shares (of ` 10 each fully paid) have been issued as preferential allotment at a premium of ` 440 per share in the financial year 2006-07.

(ii) ` 13.34 lakhs Equity Shares (of ` 10 each fully paid) have been issued on conversion of the share warrants issued at 450 in the ratio of one share per warrant in the financial year 2007-08 and 2008-09.

(iii) ` 28.50 lakhs Equity Shares (of ` 10 each fully paid) have been issued as preferential allotment at a premium of ` 1090 per share in the financial year 2008-09.

(iv) The Company has sub divided the equity share of ` 10 each (fully paid up) into 5 (five) equity shares of ` 2 each (fully paid up) based on the approval of the share holders in the Annual General Meeting held on 15th September 2008.

(v) ` 20.50 lakhs Equity Shares of ` 2 each have been extinguished under Buy Back Scheme in the financial year 2009-10.

(vi) During the financial year 2011-12, pursuant to The Scheme of Arrangement, 1143.57 lakhs Equity Shares of ` 2/- each have been reduced to 1143.57 lakhs Equity Shares of ` 1/- each.


86

(vii) During the Financial year 2015-16, the credit facilities of the company have been classified under SMA - 2 category with banks. On 16th December 2015, Joint Lender’s Forum (JLF) was formed for corrective action plan.As per discussions in JLF meeting held on 25th January 2016, it was decided to invoke Strategic Debt Restructuring (SDR) as per RBI guidelines.Pursuant to SDR Scheme,the Company on August 09,2016 allotted 11,90,24,732 equity shares of ` 1/- per share to SDR Lenders at a price of ` 7.66 per share entitling them to collectively hold 51% of post allotement paid up share capital of the Company. The said alloted shares are subject to the lock in requirements upto August 25, 2017.

NOTE 17 : NON CURRENT BORROWINGS ( ` In Lacs)


As at 31.03.2017

Term loan from banks (Secured) (Refer note 42) 3,568.11 4,372.82 Less: Interest accrued but not due on borrowings - 473.11 Less: Current maturities of long term debt (disclosed under other financial liabilities)

3,568.11 3,899.71

- -

Term Loans from Banks includes :

3568.11 lacs (PY 4372.82 Lacs) term loan from Bank of India carries interest @ Base Rate + 2.50% per annum. The loan is repayable in 60 stepped up monthly installments commencing from April 2013. The loan is secured by First exclusive charge on future credit card cash flows through escrow account mechanism; Second pari passu charge on movable & immovable fixed asset of the company and current asset of the company and further secured by personal guarantee of promoter directors.

NOTE 18 : OTHER FINANCIAL LIABILITIES


31.03.2018 As at

31.03.2017 Trade deposits 33.84 235.54

33.84 235.54

NOTE 19 : PROVISIONS


31.03.2018 As at

31.03.2017 Provision for gratuity 37.95 35.27

37.95 35.27

NOTE 20 : CURRENT BORROWINGS


31.03.2018 As at

31.03.2017 SecuredWorking capital loans from banks (Refer note 42) 14,241.93 17,736.74 Devolved Letter of Credit from banks - 69.88

14,241.93 17,806.62

Annual Report 2018


87

Working Capital Loans from Banks includes:

Secured :

(a) Cash Credit Loan:

` 11,372.55 Lacs (31.03.2017 : ` 14,877.59 Lacs) - Secured by hypothecation of stocks and book debts, the personal guarantee of promoter directors and further collaterally secured by equitable mortgage of office and factory premises (at Daman) of the Company carrying interest @ 12.50% to 14.75% p.a.

(b) Packing Credit Loan and Foreign Bills Purchased:

` 2,590.21 Lacs (31.03.2017 : ` 2,649.86 Lacs) – Secured by hypothecation of stocks and book debts of export division and the personal guarantee of promoter directors and further collaterally secured by equitable mortgage of office and factory premises (at Daman) of the Company carrying interest @ 11% to 13% p.a.

(c) ` 279.17 Lacs (31.03.2017 : ` 279.17 Lacs) suppliers bills discounting limit from SIDBI, secured by residual charge on movable and current assets of the Company carrying interest @ 13% p.a.

NOTE 21 : TRADE PAYABLES


31.03.2018 As at

31.03.2017 Due to Micro, Small & Medium Enterprises 28.45 28.45 Due to Others 1,702.53 2,928.49

1,730.98 2,956.94

The Company had sought cofirmation from the vendors whether they fall in the category of Micro, Small and Medium Enterprises. Based on the information available, the required disclosure for Micro, Small and Medium Enterprises under the above Act is given below :


As at 31.03.2017

The principal amount remaining unpaid to any supplier as at the end of accounting year; 28.45 28.45

Interest due thereon remaining unpaid at the end of accounting year *; - -

The amount of interest paid by the buyer under MSMED Act, 2006 along with the amounts of the payment made to the supplier beyond the due date during each accounting year; - -

The amount of interest due and payable for the period (where the principal has been paid but interest under the MSMED Act, 2006 not paid); - -

The amount of interest accrued and remaining unpaid at the end of accounting year; and - -

The amount of further interest due and payable even in the succeeding year, until such date when the interest dues as above are actually paid to the small enterprise, for the purpose of disallowance as a deductible expenditure under section 23. - -

- -

* Interest paid/payable by the Company on the aforesaid principle amount has been waived by the concerned suppliers


88

NOTE 22 : OTHER FINANCIAL LIABILITIES Particulars As at

31.03.2018 As at

31.03.2017 Current maturities of long term debts 3,568.11 3,895.06 Interest accrued & due on borrowing - 477.76 Trade deposits 2.53 2.53

3,570.64 4,375.35

NOTE 23 : OTHER CURRENT LIABILITIES Particulars As at

31.03.2018 As at

31.03.2017 Employee benefits payable 146.92 151.30 Duties & taxes payable 14.66 35.09 Advance from customers 220.79 146.03

382.61 332.42

NOTE 24 : PROVISIONS Particulars As at

31.03.2018 As at

31.03.2017 Provision for leave encashment 10.86 9.70 Provision for gratuity 7.29 7.26 Provision for expenses 20.75 9.31

38.90 26.27

NOTE 25 : REVENUE FROM OPERATIONS Particulars Year Ended

31.03.2018 Year Ended

31.03.2017 Revenue from operations (gross)Sale of products 8,668.02 20,532.31 Other operating revenueExport benefits & incentives 366.15 680.99 Gain on foreign exchange fluctuations (net) - 46.56 Others 143.63 93.24

9,177.80 21,353.10

NOTE 26 : OTHER INCOME

Particulars Year Ended 31.03.2018

Year Ended 31.03.2017

Interest income on Bank deposits 28.70 55.74 Loans & Advances - 17.45 Dividend income on Current investments 24.21 31.59 Net gain on sale of current investments - 1.13 Rent income 43.50 64.33 Interest received on financial assets carried at amortised cost 8.36 5.43 Income on Investments carried at fair value through profit & loss 14.90 25.01 Interest income on loan given to subsidiaries 426.36 267.48 Income on Corporate Guarantee Given 5.00 29.84 Miscellaneous Income 30.02 0.98

581.05 498.98

Annual Report 2018


89

NOTE 27 : COST OF MATERIALS CONSUMEDParticulars Year Ended


31.03.2017 Raw Materials (Fabric)Opening stocks 2,232.70 26,419.29 Add : Purchases 2,533.51 4,346.29

4,766.21 30,765.58 Add: Materials held for sale - 24,763.35 Less : Closing stocks 643.60 2,232.70

4,122.61 3,769.53 Accessories & Packing MaterialsOpening Stocks 17.48 9.09 Add : Purchases 40.30 43.67

57.78 52.76 Less : Closing Stocks 8.07 17.48

49.71 35.28 4,172.32 3,804.81

NOTE 28 : PURCHASES OF STOCK - IN - TRADE Particulars Year Ended


31.03.2017 Purchases of stock - in - trade 2,746.69 13,244.40

2,746.69 13,244.40

NOTE 29 : CHANGES IN INVENTORIES OF FINISHED GOODS, WORK IN PROCESS AND STOCK IN TRADEParticulars Year Ended


31.03.2017 Opening Stocks- Work in Process 58.08 154.44 - Finished Goods 3,685.99 3,612.05 - Stock in trade 14,047.38 2,258.57

17,791.45 6,025.06 Add : Raw Material held for sale as Stock in trade 24,763.35 Less : Obsolete Stock Written Off as exceptional items (Refer Note 34 (ii) 4,508.15 - Less : Closing Stocks - Work in Process - 58.08 - Finished Goods 185.00 3,685.99 - Stock in trade 836.61 14,047.38

1,021.61 17,791.45 12,261.69 12,996.96

NOTE 30 : EMPLOYEE BENEFITS EXPENSE



Salaries, wages & bonus 437.74 410.14 Directors' remuneration 54.00 54.00 Contribution to provident & other funds 25.55 19.65 Workmen & staff welfare 21.32 25.28

538.61 509.07


90

NOTE 31 : FINANCE COSTS



Interest expense (Refer Note 33 (i)) 1,376.61 3,274.76 Bank Charges 103.94 159.48

1,480.55 3,434.24

NOTE 32 : DEPRECIATION AND AMORTISATION EXPENSE



Depreciation of Property, Plant & Equipment 235.70 392.13 Depreciation on Investment Property 15.86 20.78 Amortisation on Intangible Assets 5.81 5.85

257.37 418.76

NOTE 33 : OTHER EXPENSES



Processing charges 1,588.83 2,155.63 Rent 133.00 248.92 Rent expense on financial assets carried at amortised cost 6.04 5.99 Rates & taxes 75.62 37.57 Insurance 25.49 34.85 Repairs and maintenance- Building - 1.00 - Others 35.46 33.01 Electricity charges 53.33 53.12 Common area maintenance expenses 31.64 36.86 Studio expenses 7.53 8.46 Printing & stationery 20.37 21.18 Communication costs 43.51 37.34 Legal & professional fees 128.14 149.12 Travelling & conveyance 83.24 79.60 Commission 79.65 77.69 Advertisement & sales promotion expenses 109.93 131.08 Auditors' remuneration 10.00 17.25 Transportation, freight & handling charges 331.36 460.09 Excise Duty - 16.39 Sales Tax / VAT - 237.73 Loss on sale/discard of fixed assets 136.06 - Loss on sale of investments 7.26 - Loss on foreign exchange fluctuations (net) 175.21 - Provision for doubtfull advances 850.00 Provision for doubtful debts - 753.25 Advances and other financial assets no longer recoverable written off 541.58 909.33 Interest and penalties on delay in payment of statutory dues 21.41 8.93 Miscellaneous expenses 38.69 34.78

4,533.35 5,549.17

Annual Report 2018


91

Payments to Auditor



Audit fees 10.00 15.00

Service tax 2.25

10.00 17.25

NOTE 34 : EXCEPTIONAL ITEMS



Reversal of Post SDR Interest (5,252.34) - Obsolute Stock Written Off 6,974.38 -

1,722.04 -

Exceptional items represents :

i) Reversal of interest expense provided post SDR amounting to ` 5252.34 lacs, since lenders have classified credit facilities as sub standard due to expiry of stipulated time for SDR as per RBI guidelines. (also refer note 42)

ii) Obsolete inventories written off amounting to 6,974.38 lacs (Consolidated 7968.61 lacs) which were non moving since significant period of time.

NOTE 35 : EARNINGS PER EQUITY SHARE

In accordance with Indian Accounting Standard 33 - Earning Per Share, the computation of earning per share is set below:

Sr. No.



i) Weighted average number of Equity Shares of ` 1 each a) Number of shares at the beginning of the year 1,143.57 1,143.57 b) Number of shares at the end of the period 2,333.82 2,333.82 c) Weighted average number of shares outstanding during the year 2,333.82 1,909.89

ii) Net Profit after tax available for equity shareholders (15,548.43) (17,980.72)iii) Basic Earning Per Share (6.66) (9.42)iv) Diluted Earning Per Share (6.66) (9.42)

Note: The Company does not have any dilutive potential equity shares. Consequently the basic and diluted

earning per share of the Company remain the same.

NOTE 36 : COMMITMENTS

Operating leases

A. Leases as lessee

The Corporation enters into non-cancellable operating lease arrangements with various parties. The lease rentals paid/ received for the same are charged to the Statement of Profit and Loss.

i. Future minimum lease payments

At 31st March, the future minimum lease payments under non-cancellable leases are NIL


92

ii. Amounts recognised in profit or loss

( ` In Lacs)


As at 31.03.2017

Lease expense 133.00 248.92 Contingent rent expense - -

133.00 248.92

Initial direct costs incurred on these leasing transactions have been recognised in the Profit and Loss Account.

NOTE 37 : CONTINGENT LIABILITIES NOT PROVIDED FOR :( ` In Lacs)

Sr. No.


As at 31.03.2017

a) Letters of Credit outstanding - 69.87 b) Guarantee given by Banks on behalf of the Company 649.98 759.98 c) Corporate Guarantee given on behalf of a Subsidiary Company 500.00 500.00 d) Estimated amount of contracts remaining to be executed on capital

account 970.00 970.00

e) Uncalled liability on investments in preference shares partly paid 212.50 212.50 f) Sales Tax Liability contested in appeals 115.49 97.08 g) Stamp Duty Liability not acknowledged as debt 10.00 10.00 h) Pending the final disposal of the matter, which is presently before the

Supreme Court in respect of levy of service tax on renting of immovable properties given for commercial use, retrospectively w.e.f. June 01, 2007, the Company continues not to provide for the retrospective levy aggregating to ` 279.47 lacs for the period June 01, 2007 to September 30, 2011. (The Company has paid ` 139.73 lacs under protest and has furnished solvency surety for the balance ` 139.74 lacs pursuant to the Interim Order dated October 14, 2011 passed by the Hon’ble Supreme Court of India)

279.47 279.47

i) Disputed demand of income Tax 292.57 600.96 j) Claims against the Company, not acknowledged as debt 285.11 165.96

NOTE 38 : EMPLOYEE BENEFIT EXPENSES

Post Employment Benefit Plans :

Defined Contribution Scheme

Amount recognised in the Statement of Profit and Loss 2017-18 2016-17Contribution to Provident fund and others 25.55 19.65

Defined Benefit Plans

The Company has the following Defined Benefit Plans:

Gratuity: In accordance with the applicable laws, the Company provides for gratuity, a defined benefit retirement plan (“The Gratuity Plan”) covering eligible employees. The Gratuity Plan provides for a lump sum payment to vested employees on retirement (subject to completion of five years of continuous employment), death, incapacitation or termination of employment that are based on last drawn salary and tenure of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation on the reporting date and the Company makes annual contribution to the gratuity fund administered by life Insurance Companies under their respective Group Gratuity Schemes.

Annual Report 2018


93

The disclosure in respect of the defined Gratuity Plan are given below:

Particulars Defined Benefit PlansAs at

31.03.2018 As at

31.03.2017Present value of funded obligations 59.86 56.27 Fair Value of plan assets 14.62 13.73 Net (Asset)/Liability recognised 45.24 42.54

Movements in plan assets and plan liabilitiesParticulars Present

value of obligations

Fair Value of plan assets

As at 1st April 2017 56.27 13.73 Current service cost 7.26 Transfer in/(out) obligation 0.21 - Past service cost 0.89 Interest Cost/(Income) 3.64 0.91 Return on plan assets excluding amounts included in net finance income

- (0.022)

Actuarial (gain)/loss arising from changes in financial assumptions (1.93)Actuarial (gain)/loss arising from experience adjustments (5.55)Employer contributions - Benefit payments (0.92)As at 31st March 2018 59.86 14.62

Particulars Present value of

obligations


As at 1st April 2016 48.20 12.73 Current service cost 4.76 - Past service cost - - Interest Cost/(Income) 3.33 1.00 Return on plan assets excluding amounts included in net finance income

- (0.003)

Actuarial (gain)/loss arising from changes in financial assumptions 2.40 - Actuarial (gain)/loss arising from experience adjustments (0.17) - Employer contributions - - Benefit payments (2.25) - As at 31st March 2017 56.27 13.73

Statement of Profit and Loss

Employee benefit expenses : 2017-2018 2016-2017Current Service cost 7.26 6.84 Interest cost / (Income) 2.72 2.33 Past service cost and loss/(gain) on curtailments and settlement 0.89 - Expected return on Plan Assets - Total amount recognised in Statement of P&L 10.88 9.17 Remeasurement of the net defined benefit liability : Return on plan assets excluding amounts included in net finance income/(cost)

0.02 0.003

Change in Financial Assumptions (1.93) 2.40 Experience gains/(losses) (5.55) (0.17)Total amount recognised in Other Comprehensive Income (7.46) 2.24


94

Investment pattern for Fund as onCategory of Asset As at

31.03.2018 As at

31.03.2017 Government of India Securities 0% 0%State Government Securities 0% 0%High quality corporate bonds 0% 0%Equity shares of listed companies 0% 0%Property 0% 0%Special Deposit Scheme 0% 0%Policy of insurance 100% 100%Bank Balance 0% 0%Other Investments 0% 0%Total 100% 100%

Assumptions

With the objective of presenting the plan assets and plan liabilities of the defined benefits plans at their fair value on the balance sheet, assumptions under Ind AS 19 are set by reference to market conditions at the valuation date.

The significant actuarial assumptions were as follows:

Financial Assumptions As at 31.03.2018

As at 31.03.2017

Discount rate 7.55% 7.00%Salary growth rate 5.10% 5.10%Expected Rate of ReturnWithdrawal Rates 10% at all

ages10% at all

ages

Demographic Assumptions

Mortality in service : Indian Assured Lives Mortality (2006-08)

Sensitivity

The sensitivity of the overall plan liabilities to changes in the weighted key assumptions are:

Particulars As at 31-Mar-18Increase/Decrease in liability

Discount rate varied by 0.5%0.50% 58.20 -0.50% 61.61 Salary growth rate varied by 0.5%0.50% 61.44 -0.50% 58.33 Withdrawal rate (W.R.) varied by 10%W.R.* 110% 60.44 W.R.* 90% 59.27

The sensitivity analyses above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption,the same method used to calculate the liability recognised in the balance sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous period.

Annual Report 2018


95

The expected future cash flows as at 31st March 2018 were as follows:

Expected contribution Cash flow %Projected benefits payable in future years from the date of reporting2019 7.67 7.70%2020 6.54 6.60%2021 7.14 7.20%2022 5.88 5.90%2023 6.72 6.80%2024-2028 32.11 32.40%

NOTE 39 : SEGMENT REPORTING

(i) Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (“CODM”) of the group. The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Managing Director and CEO of the group.

The CODM examine the group performance from a geographic perspective and has identified two of its following business as identifiable segments:

a) Domestic

b) Export

Segment Reporting Results


31.03.2018 As at

31.03.2017 1. Segment Revenuea. Domestic 3,792.46 15,277.81 b. Exports 5,385.34 5,842.56 Gross Sales / Income from Operations 9,177.80 21,120.37

2. Segment Results Profit before tax and interest for each segment a. Domestic (10,235.14) (12,796.90)b. Exports (9.51) 292.86 Sub Total (10,244.65) (12,504.04)Less : i) Finance Cost 1,480.55 3,434.24 ii) Un-allocable expenses net off income 2,040.29 2,167.06 iiI) Exceptional Item 1,722.04 - Total Profit before Tax (15,487.53) (18,105.33)Less : Tax Expenses 60.89 (124.60)Net Profit / (Loss) (15,548.42) (17,980.73)3. Segment Assetsa. Domestic 1,566.05 24,300.36 b. Exports 6,645.42 6,976.11 Unallocated Capital Employed 17,037.70 15,245.23 Total 25,249.17 46,521.70 4. Segment Liabilitiesa. Domestic 16,897.90 22,547.88 b. Exports 3,138.96 3,220.54 Unallocated Capital Employed - - Total 20,036.86 25,768.42


96

NOTE 40 : RELATED PARTY DISCLOSURES AS REQUIRED UNDER INDIAN ACCOUNTING STANDARD 24, “RELATED PARTY DISCLOSURES” ARE GIVEN BELOW:

List of Related Parties and Relationships:

a) Names of related parties and nature of relationship (to the extent of transactions entered into during the year except for control relationships where all parties are disclosed)

Nature of relationship Nature of the party

A) Key Management Personnel (KMP) and their relatives


Mr. Deep Gupta Whole Time Director & CFO


Mr. Salil Chaturvedi Director

Mr. Dinesh Arya Director

Ms. Gauri Pote Director

Mr. Hetal Vasant Hakani Director

Mr. Vishant Shetty Company Secretary

b) Enterprises having common Key Managerial Personnel

Prozone Intu Properties Limited

c) Subsidiaries / Step down Subsidiaries :-

Sporting and Outdoor Ad Agency Private Limited (Upto 17th October 2017)

Pronet Interactive Private limited / Pronet Interactive LLP

Millennium Accessories Limited

Profab Fashions (India) Limited

Provogue Infrastructure Private Limited

Faridabad Festival City Private Limited

Acme Advertisements Private Limited

Brightland Developers Private Limited

Classique Creators Private Limited (formerly known as Classique Creators Limited)

Proflippers India Private Limited (formerly known as Proskins Fashions Private Limited)

Standard Mall Private Limited

Elite Team HK Limited (Hongkong)

Provogue Holding Limited (Singapore)

Annual Report 2018


97

d) Joint Ventures / Associates

ProSFL Private Limited

Sporting and Outdoor Ad Agency Private Limited (From 17th October 2017)

Particulars Year Ended 31st March, 2018

Year Ended 31st March, 2017

Total Amount Amount for Major Parties*

Total Amount

Amount for Major Parties*

(I) Transactions Purchase of Goods /

Services Enterprises under significant

influence 9.85 9.85

Acme Advertisement Private Limited

9.85 9.85

Subsidiaries 5.29 18.94 Provogue Personal Care

Private Limited 5.29 18.94

Sale of Goods / Services Enterprises under significant

influence 61.00 36.00


36.00 36.00

Proflippers India Pvt Ltd 25.00

Remuneration to Key Management Personnel

58.80 58.80

Mr. Deep Gupta 54.00 54.00 Mr. Vishant Shetty 5.80 4.80 Loans given Subsidiaries 148.02 126.16 Elite Team HK Limited* - 24.84 Provogue Personal Care

Private Limited 75.29 58.30

Provogue Infrastructure Private Limited

72.73 43.02

Repayments of Loans given Subsidiaries 110.16 93.84 Millennium Accessories Limited 32.00 93.84 Brightland Developers Private

Limited 38.50 -

Elite Team HK Limited** 29.11 - Faridabad Festival City Private

Limited10.55 -

Director Sitting fees paid 2.15 Mr. Dinesh Arya 1.00 Ms. Gauri Pote 0.40 Mr. Hetal Vasant Hakani 1.00


98

Particulars Year Ended 31st March, 2018

Year Ended 31st March, 2017

Total Amount Amount for Major Parties*

Total Amount

Amount for Major Parties*

(II) Balance outstanding at the end of the year

Receivables Enterprises under significant

influence 85.73 61.08


85.73 61.08

Loans given Subsidiaries 3,316.05 3,279.29 Provogue Infrastructure Private

Limited 1,080.03 903.93

Elite Team HK Limited 1,882.83 1,707.49 Joint Ventures 1.92 1.74 ProSFL Private Limited 1.92 1.74

* “Major Parties” denotes who account 10% or more of the aggregate for that category of transaction.

** Loans given to Elite Team HK Limited includes gain on foreign exchange fluctuations

Note: Related Parties are as disclosed by the Management and relied upon by the auditors.

NOTE 41 : FINANCIAL INSTRUMENTS – FAIR VALUES AND RISK MANAGEMENT

A. Accounting classification and fair values

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

Annual Report 2018


99

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100

NOTE 41 : FINANCIAL INSTRUMENTS – FAIR VALUES AND RISK MANAGEMENT (CONTINUED)

B. Measurement of fair values

Valuation techniques and significant unobservable inputs

The Fair Value of the Financial Assets & Liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties,other than in a forced or liquidation sale.

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs)

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk through the impact of rate changes on interest-bearing liabilities and assets. The Company manages its interest rate risk by monitoring the movements in the market interest rates closely.

Exposure to interest rate risk

Company’s interest rate risk arises primarily from borrowings. The interest rate profile of the Company’s interest-bearing financial instruments is as follows.

( ` In Lacs)


As at 31.03.2017

Borrowing bearing variable interest rate 17,810.04 22,179.44

Total of Variable Rate Financial Liabilities 17,810.04 22,179.44

Cash flow sensitivity analysis for variable-rate instruments

The sensitivity analysis below have been determined based on the exposure to interest rates for financial instruments at the end of the reporting year and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period in the case of instruments that have floating rates. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates :

Cash flow sensitivity (net) Profit or loss

INR 50 bp increase

50 bp decrease

31st March 2018

Variable-rate loan instruments (89.05) (89.03)

Cash flow sensitivity (net) (89.05) (89.03)

31st March 2017

Variable-rate loan instruments (110.90) (110.90)

Cash flow sensitivity (net) (110.90) (110.90)

Annual Report 2018


101

Other price risk

The Company invests its surplus funds in various Equity and debt instruments . These comprise of mainly liquid schemes of mutual funds (liquid investments), Equity shares, Debentures and fixed deposits. This investments are susceptible to market price risk, mainly arising from changes in the interest rates or market yields which may impact the return and value of such investments. However due to the very short tenor of the underlying portfolio in the liquid schemes, these do not pose any significant price risk.

Market risk

Market Risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk.

Currency risk

The Company is exposed to currency risk on account of its operating and financing activities. The functional currency of the Company is Indian Rupee. Our exposure are mainly denominated in U.S. dollars. The USD exchange rate has changed substantially in recent periods and may continue to fluctuate substantially in the future. The Company’s business model incorporates assumptions on currency risks and ensures any exposure is covered through the normal business operations. This intent has been achieved in all years presented. The Company has put in place a Financial Risk Management Policy to Identify the most effective and efficient ways of managing the currency risks.

Exposure to currency risk

The currency profile of financial assets and financial liabilities as at March 31, 2018 and March 31, 2017 are as below:

(Foreign Currency in Lacs)

31st March, 2018 USD EURO

Financial assets

Trade receivables 48.31 0.84

Net exposure for assets 48.31 0.84

Financial liabilities

Foreign Currency Borrowings (Including Current Maturities) - -

Net exposure for liabilities - -

Net exposure (Assets - Liabilities) 48.31 0.84

(Foreign Currency in Lacs)

31st March 2017 USD EURO

Financial assets

Trade receivables 41.79 1.50

Net exposure for assets 41.79 1.50

Financial liabilities

Foreign Currency Borrowings (Including Current Maturities) 1.27 -

Net exposure for liabilities 1.27 -

Net exposure (Assets - Liabilities) 40.52 1.50



102

Sensitivity analysis

A reasonably possible strengthening / (weakening) of the Indian Rupee against US dollars at 31st March would have affected the measurement of financial instruments denominated in US dollars and affected profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases. In cases where the related foreign exchange fluctuation is capitalised to fixed assets or recognised direclty in reserves, the impact indicated below may affect the Company’s income statement over the remaining life of the related fixed assets or the remaining tenure of the borrowing respectively.

Profit or lossEffect in INR (before tax) Strengthening WeakeningFor the year ended 31st March, 20185% movement 156.54 (156.54)USD 2.90 (2.90)EURO 159.44 (159.44)


(b) Particulars of hedged and unhedged foreign currency exposures as at the reporting date

As at 31st March 2018

(Foreign Currency in Lacs)Particulars USD EUROTrade Receivables 48.31 0.84 Less : Foreign currency forward contracts (Sell) 44.17 Unhedged Receivable 4.14 0.84 Borrowings - - Less : Foreign currency forward contracts (Buy) - - Unhedged Payable - -

As at 31st March 2017(Foreign Currency in Lacs)

Particulars USD EUROTrade Receivables 41.79 1.50 Less : Foreign currency forward contracts (Sell) 41.45 - Unhedged Receivable 0.34 1.50 Borrowings 1.27 - Less : Foreign currency forward contracts (Buy) - - Unhedged Payable 1.27 -


Annual Report 2018


103

Financial Risk Management

Risk management framework

A wide range of risks may affect the Company’s business and operational / financial performance. The risks that could have significant influence on the Company are market risk, credit risk and liquidity risk. The Company’s Board of Directors reviews and sets out policies for managing these risks and monitors suitable actions taken by management to minimise potential adverse effects of such risks on the company’s operational and financial performance.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s trade and other receivables, cash and cash equivalents and other bank balances. To manage this, the Company periodically assesses financial reliability of customers, taking into account the financial condition, current economic trends and analysis of historical bad debts and ageing of accounts receivable. The maximum exposure to credit risk in case of all the financial instuments covered below is resticted to their respective carrying amount.

(a) Trade and other receivables from customers

Credit risk in respect of trade and other receivables is managed through credit approvals, establishing credit limits and monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

The Company considers the probablity of default upon initial recognition of asset and whether there has been a significant increase in the credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occuring on assets as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:

i) Actual or expected significant adverse changes in business

ii) Actual or expected significant changes in the operating results of the counterparty

iii) Financial or economic conditions that are expected to cause a significant change to the counterparties ability to meet its obligation

iv) Significant imcrease in credit risk on other financial instruments of the same counterparty

v) Significant changes in the value of the collateral supporting the obligation or in the quality of third party guarantees or credit enhancements

Financial assets are written off when there is a no reasonable expectations of recovery, such as a debtor failing to engage in a repayment plan with the Company. When loans or receivables have been written off, the Company continues to engage in enforcement activity to attemp to recover the receivable due, When recoverables are made, these are recognised as incone in the statement of profit and loss.

The Company measures the expected credit loss of trade receivebles and loan from individual customers based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, loss on collection of receivable is not material hence no additional provision considered.

Ageing of Accounts receivables :

( ` in Lacs)Particulars As at

31.03.2018 As at

31.03.2017 0 - 6 months 3,672.89 2,361.50 6 - 12 months 38.27 1,330.32 Beyond 12 months 9.57 1,050.36 Total 3,720.73 4,742.18

Financial Assets are considered to be of good quality and there is no significant increase in credit risk.



104

Movements in provision of doubtful debts


31.03.2018 As at

31.03.2017 Opening provision 894.12 140.88 Add : Additional provision made / reversed / written off (147.33) 753.25 Closing provisions 746.79 894.12

Liquidity risk

Liquidity is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company’s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company’s net liquidity position through rolling forecasts on the basis of expected cash flows.

The table below provides details regarding the contractual maturities of significant financial liabilities :

Maturity Analysis of Significant Financial Liabilities

( ` in Lacs)

31st March 2018 Total Upto 1 year 1-5 years More than 5 years

Borrowings 14,241.93 14,241.93 - -

Trade and other payables 1,730.98 1,730.98 - -

Other Financial Liabilities (Current & Non Current) 3,570.64 3,570.64 33.84 -

( ` in Lacs)

31st March 2017 Total Upto 1 year 1-5 years More than 5 years

Borrowings 17,806.62 17,806.62 - -

Trade and other payables 2,956.94 2,956.94 - -

Other Financial Liabilities (Current & Non Current) 4,375.35 4,610.89 235.54 -

NOTE 42 : CAPITAL MANAGEMENT

For the purpose of the Company’s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The Company strives to safeguard its ability to continue as a going concern so that they can maximise returns for the shareholders and benefits for other stake holders. The aim to maintain an optimal capital structure and minimise cost of capital.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may return capital to shareholders, issue new shares or adjust the dividend payment


Annual Report 2018


105

to shareholders (if permitted). Consistent with others in the industry, the Company monitors its capital using the gearing ratio which is total debt divided by total capital plus total debt.


31.03.2018 As at

31.03.2017 Total Debt 17,810.04 22,179.44 Total Equity 5,212.33 20,753.29 Total debt to equity ratio (Gearing ratio) 0.77 0.52

NOTE 43 : During the financial year 2015-16, the credit facilities of the Company have been classified under SMA-2 category with banks. On December 16, 2015, Joint Lender’s Forum (JLF) was formed for corrective action plan. As per the discussions in JLF meeting held on 25th January, 2016, it was decided to invoke Strategic Debt Restructuring (SDR) as per RBI guidelines. Pursuant to SDR Scheme, the Company on August 09, 2016 allotted 11,90,24,732 equity shares of ` 1/- per share to SDR Lenders at a price of ` 7.66 per share entitling them to collectively hold 51% of post allotment paid up share capital of the Company. The said allotted shares were subject to the lock-in requirement up to August 25, 2017. The investors proposal under SDR was not approved by lenders. Accordingly, the Company has reversed interest expense provided post SDR amounting to ` 5252.34 lacs, since lenders have classified credit facilities as sub standard due to expiry of stipulated time for SDR as per RBI guidelines.

NOTE 44 : DISCLOSURE WITH REGARDS TO SECTION 186 (4) OF THE COMPANIES ACT, 2013 : i) For Investment refer note no. 14

ii) For Corporate Guarantees given refer note no. 31(A)(c)

iii) During the year, the Company had given the unsecured loans to certain parties for the General Corporate purpose. The full particulars of the loans given is as below :


31.03.2018 As at

31.03.2017 Wholly Owned Subsidiaries 3,198.21 2,885.88 Subsidiaries and Joint Ventures / associates 119.77 395.16 Total 3,317.98 3,281.03

Notes :

a) Loans given to Wholly Owned Subsidiaries, Subsidiaries and Joint Ventures were considered as good and fully recoverable by the management. The terms and conditions of loans are not prejudicial to the Interest of the company.

NOTE 45 : The Company has regrouped, reclassified and / or rearranged previous year figures, wherever necessary to conform to current year classification





106

Annexure I

Statement on Impact of Audit Qualifications (for audit report with modified opinion) submitted along-with Annual Audited Financial Results (Standalone)

Statement on Impact of Audit Qualifications for the Financial Year ended March 31, 2018

[See Regulation 33 / 52 of the SEBI (LODR) (Amendment) Regulations, 2016]

I. SN Particulars Audited Figures (as reported before adjusting

for qualifications) (` in Lakhs)

Adjusted Figures (audited figures after adjusting for qualifications) (` in Lakhs)

1. Turnover / Total income 9758.86 9,758.86 2. Total Expenditure 23524.35 25,005.353. Net Profit/(Loss) after taxes, minority

interest and share of profit / (loss) of associates

(15548.42) (22,281.76)

4. Earnings Per Share (6.66) (9.54)5. Total Assets 25249.17 25,249.176. Total Liabilities 20036.85 26,770.197. Net Worth 5212.33 (1,521.01)8. Any other financial item(s) (as felt

appropriate by the management)Nil Nil

II. Audit Qualification (each audit qualification separately):a. Details of Audit Qualification: As explained in the note 5(i) to the Result, the Company has not provided interest for the quarter and

year ended March 31, 2018 amounting to ` 740.50 lacs and ` 1481.00 lacs respectively and reversed interest provided post SDR amounting to ` 5,252.34 lacs payable to various lenders since the credit facilities are classified as sub-standard as per RBI guidelines. Had the Company provided interest for the quarter and year ended March 31, 2018, finance cost would have been higher by ` 740.50 lacs and ` 1481.00 lacs respectively and had the Company had not reversed post SDR interest, net loss would have been higher by ` 740.50 lacs and 6733.34 lacs for the quarter and year ended March 31, 2018.

b. Type of Audit Qualification : Qualified Opinion / Disclaimer of Opinion / Adverse Opinionc. Frequency of qualification: Whether appeared first time / repetitive / since how long continuing :d. For Audit Qualification(s) where the impact is quantified by the auditor, Management’s Views: The Company is in discussion with the bankers for a resolution plan, hence Company has not accrued

interest for the period post SDR date and the same will be accounted on finalisation of resolution plan.e. For Audit Qualification(s) where the impact is not quantified by the auditor: (i) Management’s estimation on the impact of audit qualification: Not Applicable (ii) If management is unable to estimate the impact, reasons for the same: : Not Applicable (iii) Auditors’ Comments on (i) or (ii) above: : Not Applicable

III Signatories:Mr. Nikhil Chaturvedi, Managing DirectorMr. Deep Gupta, Whole-time Director & CFO Mr. Dinesh Arya, Audit Committee ChairmanStatutory Auditor For Ajay Shobha & Co.

Chartered AccountantsFirm’s Registration No.317031E

Date: 11th May, 2018.Place: Mumbai

Ajay Gupta, PartnerMem. No. 053071


INDEPENDENT AUDITOR’S REPORT

To

The Members of Provogue (India) Limited,

Report on the Consolidated Ind AS Financial Statements

We have audited the accompanying consolidated Ind AS financial statements of Provogue (India) Limited (hereinafter referred to as “the Holding Company”), its subsidiaries (together referred to as “the Group”) and its associate and jointly controlled entity comprising the consolidated Balance Sheet as at 31st March 2018, the consolidated Statement of Profit and Loss (including other comprehensive income), the consolidated Statement of Cash Flows and the consolidated Statement of Changes in Equity for the year then ended and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “the consolidated Ind AS financial statements”).

Management’s Responsibility for the Consolidated Ind AS Financial Statements

The Holding Company’s Board of Directors is responsible for the preparation of these consolidated Ind AS financial statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred to as “the Act”) that give a true and fair view of the consolidated financial position, consolidated financial performance (including other comprehensive income), consolidated cash flows and consolidated changes in equity of the Group in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the consolidated Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose

of preparation of the consolidated Ind AS financial statements by the Directors of the Holding Company, as aforesaid.

Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated Ind AS financial statements based on our audit. While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit of the consolidated financial statements in accordance with the Standards on Auditing specified under sub-section 10 of Section 143 of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Holding Company’s preparation of the consolidated Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors, as well as evaluating the overall presentation of the consolidated Ind AS financial statements.

We believe that the audit evidence obtained by us and by the other auditors in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated Ind AS financial statements.

Basis for Qualified Opinion

As explained in the Note 36(i) and 46 to the consolidated Ind AS financial statements, the Company has not provided interest for the year ended March 31, 2018 amounting to ` 1481.00 lacs and reversed interest

108

provided post SDR amounting to ` 5,252.34 lacs payable to various lenders since the credit facilities are classified as sub-standard as per RBI guidelines. Had the Company provided interest for the year ended March 31, 2018, finance cost would have been higher by 1481.00 lacs and had the Company had not reversed post SDR interest, net loss would have been higher by ` 6733.34 lacs for the year ended March 31, 2018

Opinion

In our opinion and to the best of our information and according to the explanations given to us, , except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the aforesaid consolidated Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the consolidated state of affairs of the Group as at March 31, 2018, and their consolidated profit (including other comprehensive income), their consolidated cash flows and consolidated changes in equity for the year ended on that date.

Emphasis of Matter

We draw attention to Note 39 (e) to the consolidated Ind AS financial statements regarding non-provision of service tax for the period from June 01, 2007 to September 30, 2011 on rent on immovable properties taken for commercial use by the Company, aggregating ` 279.47 Lacs, pending final disposal of the appeal filed before the Hon’ble, Supreme Court. The matter is contingent upon the final outcome of litigation.

Our opinion is not qualified in respect of the above matters.

Other Matters

We did not audit the financial statements of two subsidiaries viz Elite Team (HK) Limited (Hong Kong) and Provogue Holding Limited (Singapore) whose financial statements reflect total assets of ` 4986.47 Lacs as at March 31, 2018, total revenues of ` 3313.51 Lacs and net cash inflows amounting to ` 443.26 Lacs for the year ended on that date, as considered in the consolidated Ind AS financial statements. These financial statements / financial information have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries and our report in terms of sub-sections (3) and (11) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries, is based solely on the reports of the other auditors.

Our opinion on the consolidated Ind AS financial statements, and our report on other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors.

Report on Other Legal and Regulatory Requirements

1. As required by sub-section 3 of Section 143 of the Act, based on the comments in the auditors’ reports of the Holding company and subsidiary companies incorporated in India, we report, to the extent applicable, that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated Ind AS financial statements.

b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated Ind AS financial statements have been kept so far as it appears from our examination of those books and the reports of the other auditors.

c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss (including other comprehensive income), the Consolidated Statement of Cash Flows and Consolidated Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated Ind AS financial statements.

d) In our opinion, the aforesaid consolidated Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act, read with relevant rules issued thereunder.

e) The matter described in the Basis for Qualified Opinion Paragraph / Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

f) On the basis of the written representations received from the directors of the Holding Company as on March 31, 2018 taken on record by the Board of Directors of the Holding Company and the auditor’s reports of subsidiary companies incorporated in India, none of


the Directors of the Group are disqualified as on March 31, 2018 from being appointed as a Director of that company in terms of sub section 2 of Section 164 of the Act.

g) With respect to the adequacy of the internal financial controls over financial reporting of the Holding Company and its subsidiary companies incorporated in India and the operating effectiveness of such controls, refer to our separate report in “Annexure A”.

h) With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us.

i. The consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the Group – Refer Note 39 to the consolidated financial statements.

ii. The Holding Company, its subsidiary companies incorporated in India did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Holding Company, its subsidiary companies incorporated in India.



Firm’s Registration No. 317031E

Ajaykumar Gupta


Date : 11th May 2018 Mem. No. : 53071

110

ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)In conjunction with our audit of the consolidated Ind AS financial statements of Provogue (India) Limited (“the Holding Company”) as of and for the year ended 31 March 2018, we have audited the internal financial controls over financial reporting of the Holding Company and its subsidiary companies which are incorporated in India, as of that date.

Management’s Responsibility for Internal Financial ControlsThe respective Board of Directors of the Holding Company and its subsidiary companies which are incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal controls over financial reporting criteria established by these companies incorporated in India considering the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (“the Guidance Note”) issued by the Institute of Chartered Accountants of India (“ICAI”). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013 (“the Act”).

Auditor’s ResponsibilityOur responsibility is to express an opinion on the Holding Company’s and its subsidiary companies incorporated in India, internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note issued by the ICAI and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial control system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed

risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the consolidated Ind AS financial statements, whether due to fraud or error.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.Meaning of Internal Financial Controls Over Financial ReportingA company’s internal financial controls over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial controls over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Inherent Limitations of Internal Financial Controls over Financial ReportingBecause of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Qualified OpinionAccording to the information and explanation given to us and based on our audit, the following material weakness has been identified in the operating effectiveness of the respective Company’s internal financial controls over financial reporting as at 31st March, 2018:The documentation in respect of specific policies and procedures including inventories and the IT Controls pertaining to internal financial controls over financial reporting are not adequate and needs to be further strengthened. This may potentially result in the risk of overriding of these controls and misstatement in recording of transaction.


A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the respective Company’s annual or interim financial statements will not be prevented or detected on a timely basis.In our opinion, except for the possible effect of the material weakness described above on the achievement of the objectives of the control Criteria, the Holding Company and its subsidiary companies which are incorporated in India, have maintained in all material respects, an adequate internal financial controls system relating to financial reporting and such internal financial controls on financial reporting were operating effectively as at March 31, 2018, based on the criteria established by the respective Companies considering Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

We have considered the material weaknesses identified and reported above in determining the nature, timing and audit tests applied in our audit of the consolidated Ind AS financial statements of the Company and these material weaknesses above does not affect our opinion on the consolidated Ind AS financial statements of the Company.



Firm’s Registration No. 317031E

Ajaykumar Gupta


Date : 11th May 2018 Mem. No. : 53071

112


For Ajay Shobha & Co. For and on behalf of the Board Of DirectorsChartered Accountants


Place : Mumbai Place : Mumbai Vishant ShettyDate : 11th May 2018 Date : 11th May 2018 Company Secretary

( ` In Lacs)Particulars Notes As at

31.03.2018 As at

31.03.2017ASSETSNon-current assetsProperty, Plant and Equipment 2 2,663.75 3,203.10 Investment Property 3 464.66 483.89 Intangible assets 4 5.77 11.58 Goodwill on Consolidation 2,776.39 2,778.30 Financial Assets Non Current Investments 5 4,410.62 4,405.64 Other financial assets 6 80.60 341.81 Deferred tax assets (net) 7 1,421.99 1,605.34 Income Tax Assets (net) 8 411.00 576.08 Other non-current assets 9 704.80 1,842.85

12,939.57 15,248.60 Current assets Inventories 10 1,743.63 20,228.23 Financial Assets Current Investments 11 587.26 636.89 Loans 12 287.23 371.80 Trade receivables 13 6,907.20 8,455.45 Cash and cash equivalents 14 680.78 1,285.69 Bank balances other than Cash and cash equivalents 15 294.31 646.61 Other current assets 16 3,533.19 3,276.31

14,033.60 34,900.98 26,973.17 50,149.58

EQUITY AND LIABILITIESEQUITYEquity Share capital 17 2,333.82 2,333.82 Other Equity 18 477.32 17,697.24 Equity attributable to Owners 2,811.14 20,031.06 Non Controlling interest (822.45) (476.17)Total Equity 1,988.68 19,554.88

LIABILITIES Non-current liabilities Financial Liabilities Non Current Borrowings 19 2,863.89 2,627.43 Other financial liabilities 20 36.34 256.40 Provisions 21 40.41 37.90

2,940.64 2,921.73 CURRENT LIABILITIES Financial Liabilities Current Borrowings 22 15,131.80 18,672.78 Trade payables 23 2,639.87 3,719.48 Other financial liabilities 24 3,570.64 4,375.35 Provisions 25 60.62 108.68 Other current liabilities 26 640.92 796.68

22,043.85 27,672.97 26,973.17 50,149.58

The accompanying notes form an integral part of the consolidated financial statements

CONSOLIDATED BALANCE SHEET as at 31st March, 2018






CONSOLIDATED STATEMENT OF PROFIT AND LOSS for the year ended 31st March, 2018

( ` In Lacs) Particulars Notes Year ended

31.03.2018 Year ended 31.03.2017

INCOMERevenue from operations 27 12,685.03 26,781.83 Other income 28 233.49 348.19 Total revenue 12,918.52 27,130.02 EXPENSESCost of materials consumed 29 4,172.32 3,804.82 Purchases of stock - in - trade 30 6,125.28 18,453.69 Changes in inventories of finished goods, work in process and stock in trade

31 8,917.48 13,514.61

Employee benefits expense 32 668.32 642.45 Finance costs 33 1,802.22 3,798.57 Depreciation and amortisation expense 34 369.83 558.78 Other expenses 35 5,578.22 5,866.67 Total expenses 27,633.67 46,639.59 Profit / (Loss) before exceptional items and tax (14,715.15) (19,509.57)Exceptional items 36 2,716.27 - Profit / (Loss) before tax (17,431.42) (19,509.57)Less : Tax expenses - Deferred tax liability / (asset) 183.35 (298.88) - Tax of earlier years 33.78 511.03 Total tax expense 217.13 212.15 Profit / (Loss) for the period (17,648.55) (19,721.73)Other Comprehensive IncomeItems that will not be reclassified subsequently to profit or lossActuarial gain or loss on defined benefit plan transferred from profit and loss 9.93 (2.98)Income tax on above (2.47) 0.74

7.46 (2.24)Other comprehensive income/ (loss) for the year 7.46 (2.24)Total comprehensive income/ (loss) for the year (17,641.09) (19,723.97)Net Profit/(Loss) attributable to : - Owners (17,255.43) (19,483.22) - Non Controlling Interest (393.12) (238.51)Total comprehensive income/ (loss) attributable to : - Owners (17,247.97) (19,485.46) - Non Controlling Interest (393.12) (238.51)Earnings per equity share 37Nominal value of share ` 1 : Basic (7.56) (10.33) : Diluted (7.56) (10.33)

The accompanying notes form an integral part of the consolidated financial statements

114

CONSOLIDATED CASH FLOW STATEMENT for the year ended 31st March, 2018

( ` In Lacs)

Particulars Year ended 31.03.2018

Year ended 31.03.2017

OPERATING ACTIVITIES

Profit / (Loss) before exceptional items and tax (14,715.15) (19,509.57)

Adjustments to reconcile profit before tax to net cash inflow from operating activities

Finance Cost 1,802.22 3,798.57

Remeasurement of net defined benefit plans 7.46 (2.24)

Depreciation and Amortisation expenses 369.83 558.78

Loss on sale / discard of fixed assets 142.75 -

Provision for Doubtful Debts 48.76 795.45

Loss on sale of investments 24.09 -

Advances and other financial assets no longer recoverable written off 1,993.71 917.66

Interest Income (56.74) (171.01)

Dividend Income (29.67) (34.35)

Liabilities no longer payable written back (0.45) (10.45)

Bad debts 148.78 -

Income on Investments carried at fair value through profit & loss (14.91) (25.01)

Interest received on financial assets carried at amortised cost (8.36) (5.43)

Net (Gain)/Loss on investments (0.22) (2.03)

Exchange differences on translation of assets and liabilities 28.05 (9.32)

Unrealised (Gain)/Loss on foreign exchange fluctuations (net) 8.97 78.42

Working capital adjustments:-

(Increase) / Decrease in Other Assets 881.17 1,365.18

(Increase) / Decrease in Inventories 10,515.99 12,929.47

(Increase) / Decrease in Non-current Financial Asset (1,724.14) (420.51)

(Increase) / Decrease in Trade and other Receivables 1,341.74 2,702.03

(Increase) / Decrease in Bank balances other than Cash and cash equivalents

352.30 1,048.04

Increase / (Decrease) in Other Financial Liabilities (220.06) 2,048.18

Increase / (Decrease) in Provisions (45.56) (78.45)

Increase / (Decrease) in Trade and other Payables (1,079.16) (205.40)

Increase / (Decrease) in Other Current Liabilities (156.05) (151.02)

(384.65) 5,616.99

Income taxes paid 131.30 (511.03)

Net cash flow from operating activities (253.35) 5,105.96

Investing activities

Purchase of property, plant and equipment (2.24) (1,310.12)

Sale of property, plant and equipment 54.07

Investment Property 19.23 24.33

Intangible assets 5.81 5.85


CONSOLIDATED CASH FLOW STATEMENT for the year ended 31st March, 2018

( ` In Lacs)

Particulars Year ended 31.03.2018

Year ended 31.03.2017

Sale/(Purchase) of Investments 59.68 49.65

(Increase) / Decrease in Loans 84.57 2,929.27

Interest Income 56.74 171.01

Dividend income on Current investments 29.67 34.35

Net cash flow used in investing activities 307.53 1,904.34

Financing activities

Repayment of Borrowings (4,109.22) (2,777.93)

Interest paid (1,802.22) (3,798.57)

Reversal of Post SDR interest 5,252.34 -

Net cash flow from financing activities (659.10) (6,576.50)

Net Increase/(Decrease) in cash and cash equivalents (604.91) 433.80

Add: Cash and cash equivalents at the beginning of the year 1,285.69 851.89

Cash and cash equivalents at the end of the year 680.78 1,285.69

The accompanying notes are an integral part of these consolidated financial statements

Note:

The cash flow statement has been prepared under the indirect method as set out in Indian Accounting Standard (Ind AS 7) statement of cash flows.

The amendments to Ind AS 7 Cash flow statements requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities and financial assets arising from financing activities, to meet the disclosure requirement. This amendment has become effective from 1st April ,2017 and the required disclosure is made below. There is no other impact on the financial statements due to this amendments.

Reconciliation between the opening and closing balances in the balance sheet for liabilities and financial assets arising from financing activities

Particulars 31-Mar-17 Non-cash changes 31-Mar-18

Cash flows

Fair value changes

Current / Non - current classification

Long-term borrowings 2,627.43 236 - - 2,863.89Short Term borrowings 18,672.78 (3,540.98) - - 15,131.80Other financial liabilities 4,372.82 (804.71) - - 3,568.11Total liabilities from financing activities 25,673.02 (4,109.69) - - 21,563.80





116

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31st March, 2018

a) Equity Share Capital :

( ` In Lacs)Particulars Balance as

at 1st April, 2016

Changes during the year


2017

Changes during the year


2018Paid up Capital (Refer Note 17)

1,143.57 1,190.25 2,333.82 - 2,333.82

b) Other Equity :

( ` In Lacs)

Particulars Equity component of financial liabilities

Capital Redemp-

tion Reserve


Capital Reserve

General Re-

serve

Retained Earnings

Foreign Currency

Translation Reserve

Other Com-pre-hensive

Income

Total Equity

Balance as at April 1, 2016 535.60 1,184.56 36,159.02 1,842.22 400.00 (11,548.01) 679.55 9.78 29,262.72

Total Comprehensive Income/ (loss) for the year - - - - - (19,483.22) - - (19,483.22)

Exchange differences on translation of foreign operations - - - - - - (9.32) - (9.32)

On issue of share capital during the year [Refer Note 17 (d)(vii)] - - 7,927.05 - - - - - 7,927.05

Balance as at 31st March, 2017 535.60 1,184.56 44,086.07 1,842.22 400.00 (31,031.22) 670.23 9.78 17,697.24

Total Comprehensive Income/ (loss) for the year (17,255.43) 7.46 (17,247.97)

Exchange differences on translation of foreign operations - - - - - - 28.05 - 28.05

Balance as at 31st March, 2018 535.60 1,184.56 44,086.07 1,842.22 400.00 (48,286.65) 698.28 17.24 477.32

NATURE AND PURPOSE OF RESERVESCapital ReserveCapital reserve will be utilised in accordance with provision of the Act.

Capital Redemption Reserve

The Company has recognised Capital Redemption Reserve on buyback of equity shares from its retained earnings.The amount in Capital Redemption Reserve is equal to nominal amount of the equity shares bought back.It is a non-distributable reserve.


Securities Premium Reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Act.

General Reserve

General Reserve represents appropriation of retained earnings and are available for distribution to shareholders.

Retained Earnings

Retained Earnings represents surplus/accumulated earnings of the Company and are available for distribution to shareholders.

The accompanying notes are an integral part of these consolidated financial statements






NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2018

COMPANY OVERVIEW:

Provogue (India) Limited (the Company) is a listed public company domiciled in India and incorporated on 17th November 1997.The Company and its subsidiaries (‘the Group’) are engaged in the business of manufacturing, trading of garments, fashion accessories, textile products and related materials. The equity shares of the Company are listed on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited.

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of preparation of Consolidated Financial Statements:

The Consolidated Financial Statements are prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (“Act”) read with Companies (Indian Accounting Standards) Rules, 2015; and the other relevant provisions of the Act and Rules thereunder.

The Consolidated Financial Statements have been prepared under historical cost convention basis, except for certain assets and liabilities measured at fair value.

The Group has adopted all the Ind AS and the adoption was carried out in accordance with Ind AS 101 First time adoption of Indian Accounting Standards. The transition was carried out from Generally Accepted Accounting Principles in India (Indian GAAP) as prescribed under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, which was the “Previous GAAP”.

Authorisation of Consolidated Financial Statements: The Consolidated Financial Statements were authorized for issue in accordance with a resolution of the Board of Directors in its meeting held on 11th May 2018.

Basis of Consolidation:

Subsidiary:

Subsidiaries include all the entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns through its involvement in the entity and has the ability to affect those returns through its power to direct the relevant activities of the entity. Subsidiaries are consolidated from the date on which Group attains control and are deconsolidated from the date that control ceases to exist.

Joint ventures / Associates

Interests in joint ventures / associates are accounted for using the equity method, after initially being recognised at cost in the consolidated balance sheet.

Entities considered in the Consolidated Financial Statements are as follows :

a) Subsidiaries:

Name of Company Date of Becoming Subsidiary

Country of Incorpo-

ration

% Voting Power held

As on 31.03.2018

% Voting Power held

As on 31.03.2017

Sporting and Outdoor Ad Agency Private Limited (Upto 17th October 2017)

15-Jan-08 India - 50.00 +2 Shares

Pronet Interactive LLP (formerly known as Pronet Interactive Private Limited converted in to LLP from 17th August, 2017)

07-Nov-07 India 50.23 50.23

Millennium Accessories Private Limited 24-Mar-08 India 100.00 100.00 Profab Fashions (India) Limited 20-Feb-08 India 100.00 100.00 Provogue Infrastructure Private Limited 10-Jul-08 India 100.00 100.00 Flowers, Plants & Fruits Private Limited 06-Feb-09 India - - Faridabad Festival City Private Limited 14-Sep-07 India 73.00 73.00 Acme Advertisements Private Limited 01-Apr-09 India 100.00 100.00 BrightLand Developers Private Limited 10-Jan-11 India 100.00 100.00

118


Name of Company Date of Becoming Subsidiary

Country of Incorpo-

ration

% Voting Power held

As on 31.03.2018

% Voting Power held

As on 31.03.2017

Classique Creators Private Limited 18-Aug-11 India - 100.00 Proflippers India Private Limited 23-Jul-11 India 100.00 100.00 Provogue Personal Care Private Limited 26-Jul-13 India 51.00 51.00 Elite Team (HK) Limited 01-Jun-09 Hong Kong 100.00 100.00 Provogue Holding Limited 02-Sep-08 Singapore 100.00 100.00 Standard Mall Private Limited (Held through Provogue Infrastructure Private Limited)

15-Mar-12 India 100.00 100.00

b) Joint Ventures / Associates :

Name of Company Country of Incorporation

% Voting Power held As on 31.03.2018

% Voting Power held As on 31.03.2017

ProSFL Private Limited India 50.00 50.00 Sporting Outdoor Ad Agency Private Limited (From 17th October 2017)

India 47.50

Use of estimates:

The preparation of the Consolidated Financial Statements of the Group in accordance with Indian Accounting Standards (Ind-AS) requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities and the accompanying disclosures along with contingent liabilities at the date of the Consolidated Financial Statements. These estimates are based upon management’s best knowledge of current events and actions;however uncertainty about these assumptions and estimates could result in outcomes that may require adjustment to the carrying amounts of assets or liabilities in future periods. Appropriate revisions in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Revisions in estimates are recognized prospectively in the Consolidated Financial Statements in the period in which the estimates are revised in any future periods affected.

Fair Value Measurement:

The Group measures certain financial instruments at fair value at each reporting date.

Certain accounting policies and disclosures require the measurement of fair values, for both financial and non-financial asset and liabilities.

Fair value is the price that would be received to sell an asset or paid to settle a liability in an ordinary transaction between market participants at the measurement date. The fair value of an asset or a liability is measured using the assumption that market participants would use when pricing an asset or liability acting in their best economic interest. The Group uses valuation techniques, which are appropriate in circumstances and for which sufficient data is available considering the expected loss/ profit in case of financial assets or liabilities.

Revenue Recognition

Revenue is recognized when it is earned and no significant uncertainty exists as to its realization and when the revenue can be reliably measured.

Interest income is recognized using Effective Interest Rate (EIR) method.

Revenue in respect of export sales is recognized on the basis of shipment of products.

Dividend is recognized when right to receive the payment is established, it is probable that the economic benefits associated with the dividend will flow to the entity and the amount of dividend can be measured reasonably.



Inventories

Inventories of Raw Materials, Finished Goods, Semi-Finished Goods, Accessories and Packing Materials, are valued at cost or net realizable value, whichever is lower.Cost comprises of all cost of purchases, cost of conversion and other costs incurred in bringing the inventory to their present location and conditions. Cost is arrived at on weighted average basis.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

Property, Plant and Equipment (PPE):

Property, plant and equipment are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any.

The initial cost of an asset comprises its purchase price or construction cost, any costs directly attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management, the initial estimate of any decommissioning obligation, if any, and, borrowing cost for qualifying assets (i.e. assets that necessarily take a substantial period of time to get ready for their intended use).

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.

The residual values and useful lives of property, plant and equipment are reviewed at regular intervals and changes, if any, are accounted in line with revisions to accounting estimates.

Intangible Assets

Intangible assets acquired are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses, if any.

Intangible Assets are amortized on a systematic basis over its useful life on straight line basis and the amortization for each period will be recognized as an expense.

Investment Property

Investment property applies to owner-occupied property and is held to earn rentals or for capital appreciation or both. Hence such properties are reclassified from Property, Plant and Equipment to Investment property. Investment properties are depreciated using the straight line method over their estimated useful life.

Borrowing costs

Borrowing costs consist of interest and other costs incurred in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

Borrowing costs that are attributable to the acquisition or construction of qualifying assets (i.e. an asset that necessarily takes a substantial period of time to get ready for its intended use) are capitalized as a part of the cost of such assets. All other borrowing costs are charged to the Statement of Profit & Loss.

Depreciation

I. Tangible Assets

i. Depreciation on all Property, Plant and Equipment, except Furniture and Fixtures at Studios, is provided on ‘Written Down Value Method’.

ii. Depreciation on Furniture and Fixtures at Studios is amortized equally over a period of six years from the date of capitalization.

iii. Fixed assets acquired on lease basis are amortized over the period of the lease term.

iv. Fixed Assets at advertisement sites are amortized over the license period of the respective sites.

120


II. Intangible Assets

i. Trade Mark is amortised on Straight Line Method over a period of ten years.

ii. Computer Software is amortised on Straight Line Method over a period of three years.

Depreciation methods, useful lives and residual values are reviewed at each reporting date.The useful lives determined are in line with the useful lives as prescribed in the Schedule II of the Companies Act, 2013.

Impairment of Property, Plant and Equipment:

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

Taxes on Income

a) Current Tax

Income-tax Assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, by the end of reporting period.

Current Tax items are recognised in correlation to the underlying transaction either in the Statement of Profit & Loss, other comprehensive income or directly in equity.

b) Deferred tax

Deferred tax is provided using the Balance Sheet method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary differences.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred Tax asset and liability are measured at the tax rates that are expected to apply in the year when the asset is realized or liability is settled based on rates and tax laws that have been enacted or substantively enacted at the reporting date.

Deferred Tax items are recognised in correlation to the underlying transaction either in the Statement of Profit & Loss, other comprehensive income or directly in equity.

Financial Assets


All financial assets (not measured subsequently at fair value through profit or loss) are recognised initially at fair value plus transaction costs that are attributable to the acquisition of the financial asset.


Subsequent measurement is determined with reference to the classification of the respective financial assets. The Group classifies financial assets as subsequently measured at amortised cost, fair value through other comprehensive income or fair value through profit or loss on the basis of its



business model for managing the financial assets and the contractual cash flow characteristics of the financial asset.

- Debt instruments at amortised cost

A ‘debt instrument’ is measured at the amortised cost if both the following conditions are met:

• The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and


After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the Statement of Profit & Loss. The losses arising from impairment are recognised in the Statement of Profit & Loss.

- Debt instruments at Fair value through Other Comprehensive Income (FVTOCI)

A ‘debt instrument’ is measured at the fair value through other comprehensive income if both the following conditions are met:

• The asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets


After initial measurement, these assets are subsequently measured at fair value. Interest income under effective interest method, foreign exchange gains and losses and impairment are recognised in the Statement of Profit & Loss. Other net gains and losses are recognised in other comprehensive Income.

- Debt instruments at Fair value through profit or loss (FVTPL)

Fair value through profit or loss is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorisation as at amortised cost or as FVTOCI, is classified as at FVTPL.

- Equity investments

All equity investments in scope of Ind-AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Group decides to classify the same either as at FVTOCI or FVTPL. The Group makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.

For equity instruments classified as FVTOCI, all fair value changes on the instrument, excluding dividends, are recognized in other comprehensive income (OCI).

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit & Loss.

c) Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the Group’s Balance Sheet) when.

The rights to receive cash flows from the asset have expired, or

The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either:

• The Group has transferred substantially all the risks and rewards of the asset, or

122


• The Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

On de-recognition, any gains or losses on all equity instruments (measured at FVTPL) are recognised in the Statement of Profit & Loss. Accumulated gains or losses on equity instruments measured at FVTOCI are never reclassified to the Statement of Profit & Loss.

d) Impairment of financial assets

The Group measures the expected credit loss associated with its assets based on historical trend, industry practices and the business environment in which the entity operates or any other appropriate basis. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

Financial Liabilities


All financial liabilities are recognised initially at fair value net of transaction costs that are attributable to the respective liabilities.


Subsequent measurement is determined with reference to the classification of the respective financial liabilities. The Group classifies all financial liabilities as subsequently measured at amortised cost, except for financial liabilities at fair value through profit or loss.

(i) Financial Liabilities at fair value through profit or loss (FVTPL)

A financial liability is classified as at fair value through profit or loss if it is classified as held-for-trading or is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and changes therein, including any interest expense, are recognised in Statement of Profit & Loss.

(ii) Financial Liabilities measured at amortised cost

After initial recognition, financial liabilities other than those which are classified as fair value through profit or loss are subsequently measured at amortised cost using the effective interest rate method (“EIR”).

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit & Loss.

c) Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit & Loss.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

Employee Benefits

a) Short-term employee benefit

Short-term employee benefits are recognized as an expense at an undiscounted amount in the Statement of Profit & Loss of the year in which the related services are rendered.



b) Post-employment obligations

The Group operates the following post – employment schemes:

1. Defined benefit plans such as gratuity, and

2. Defined contribution plans such as provident fund.

Gratuity Obligation:

The Group’s net obligation in respect of defined benefit plans such as gratuity is calculated separately for each plan by estimating the amount of future benefit that the employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligation is performed at each reporting period end by a qualified actuary using the projected unit credit method.

The current service cost of the defined benefit plan, recognized in the Statement of Profit & Loss as part of employee benefit expense, reflects the increase in the defined benefit obligation resulting from employee service in the current year, benefit changes, curtailments and settlements. Past service costs are recognized immediately in the Statement of Profit & Loss. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Statement of Profit & Loss.

Re-measurements which comprise of actuarial gains and losses, the return on plan assets (excluding net interest) and the effect of the asset ceiling (if any, excluding net interest), are recognised immediately in other comprehensive income.

Defined Contribution Plans

Defined Contribution Plans such as Provident Fund, etc. are charged to the Statement of Profit and Loss as incurred.

Foreign Currency Transactions:

a) Functional and Presentation Currency:

The Consolidated Financial Statements are presented in Indian rupees which is the functional currency for the Group. All amounts have been rounded off to the nearest millions, unless otherwise indicated.

a) Monetary items:

Transactions in foreign currencies are initially recorded at their respective exchange rates at the date the transaction first qualifies for recognition.

Monetary assets and liabilities denominated in foreign currencies are translated at exchange rates prevailing on the reporting date.

Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit & Loss either as Profit or Loss on foreign currency transaction and translation or as borrowing costs to the extent regarded as an adjustment to borrowing costs.

The premium in respect of forward exchange contract is amortised over the life of the contract. The net gain or loss on account of any exchange difference, cancellation or renewal of such forward exchange contracts is recognised in the Statement of Profit & Loss.

b) Non-Monetary items:

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.

124


Provisions, Contingent Liabilities and Capital Commitments

Provisions are recognized when there is a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation

The expenses relating to a provision is presented in the Statement of Profit & Loss net of reimbursements, if any.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Contingent liabilities are possible obligations whose existence will only be confirmed by future events not wholly within the control of the Group, or present obligations where it is not probable that an outflow of resources will be required or the amount of the obligation cannot be measured with sufficient reliability.

Contingent liabilities are not recognized in the Consolidated Financial Statements but are disclosed unless the possibility of an outflow of economic resources is considered remote.

Earnings per Share

Basic earnings per share are calculated by dividing the profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effect of all dilutive potential equity shares.

Classification of Assets and Liabilities as Current and Non-Current:

All assets and liabilities are classified as current or non-current as per the Group’s normal operating cycle (determined at 12 months) and other criteria set out in Schedule III of the Companies Act, 2013.

Cash and Cash equivalents

Cash and cash equivalents include cash at bank, cash, cheque and draft on hand. The Group considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

Cash Flows

Cash flows are reported using the indirect method, where by net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities are segregated.



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NOTE 3 : INVESTMENT PROPERTY


Particulars Land Building Total Gross carrying value as of April 1, 2017 64.30 469.72 534.02 Additions - - - Deletion - - - Gross carrying value as of March 31, 2018 64.30 469.72 534.02 Accumulated amortization as of April 1, 2017 - 50.13 50.13 Depreciation - 19.23 19.23 Deletion - - - Accumulated amortization as of March 31, 2018 - 69.37 69.37 Carrying value as of March 31, 2018 64.30 400.36 464.66


Particulars Land Building Total Gross carrying value as of April 1, 2016 64.30 469.72 534.02 Additions - - - Deletion - - - Gross carrying value as of March 31, 2017 64.30 469.72 534.02 Accumulated amortization as of April 1, 2016 - 25.80 25.80 Depreciation - 24.33 24.33 Deletion - - - Accumulated amortization as of March 31, 2017 - 50.13 50.13 Carrying value as of March 31, 2017 64.30 419.59 483.89

i) Amount recognised in profit and loss for investment properties


As at 31.03.2017

Rental Income 43.50 64.33 Direct Operating expenses from property that generated rental income - - Direct Operating expenses from property that did not generate rental income - - Profit from Investment Properties before Depreciation 43.50 64.33 Depreciation 19.23 24.33 Profit from Investment Properties 24.27 40.00

ii) Fair Value


As at 31.03.2017

Investment Properties 2,734.14 2,734.14

Estimation of Fair value :

The above valuation of the investment properties are in accordance with the Ready Reckoner rates prescribed by the Government of Maharashtra for the purpose of levying stamp duty. Since the valuation is based on the published Ready Reckoner rates, the company has classified the same under Level 2 of Fair value hierarchy.

128


iii ) Leasing arrangements

The Company has entered into non cancellable leasing agreement. There is an escalation clause in the lease agreement during the lease year in line with expected general inflation. There are no restrictions imposed by lease arrangements and there are no sub leases. There are no contingent rents. Disclosures as required under Ind-AS 17 on “Lease” are given below:

Future minimum Lease payments under non-cancellable operating lease:


As at 31.03.2017

Within one year 36.00 51.00 Later than one year but not later than 5 years 93.00 102.00 Later than 5 years - -

Initial direct costs incurred on these leasing transactions have been recognised in the Statement of Profit and Loss.

NOTE 4 : INTANGIBLE ASSETS


Particulars Trade Mark - Provogue

UK

Computer Software

Total

Gross carrying value as of April 1, 2017 23.16 0.36 23.51 Additions - Deletion - Gross carrying value as of March 31, 2018 23.16 0.36 23.51 Accumulated amortization as of April 1, 2017 11.59 0.34 11.93 Amortization expense 5.79 0.02 5.81 Deletion - Accumulated amortization as of March 31, 2018 17.38 0.36 17.74 Carrying value as of March 31, 2018 5.78 (0.00) 5.77


Particulars Trade Mark - Provogue

UK

Computer Software

Total

Gross carrying value as of April 1, 2016 23.16 0.36 23.51 Additions - Deletion - Gross carrying value as of March 31, 2017 23.16 0.36 23.51 Accumulated amortization as of April 1, 2016 5.80 0.28 6.08 Amortization expense 5.79 0.06 5.85 Deletion - Accumulated amortization as of March 31, 2017 11.59 0.34 11.93 Carrying value as of March 31, 2017 11.57 0.02 11.58



NOTE 5 : NON CURRENT INVESTMENTS


31.03.2018As at

31.03.2017Unquoted, Fully Paid Up (Valued at cost unless stated otherwise)Investment in Equity instruments of equity accounted joint venturesProSFL Private Limited50,000 Equity Shares of ` 10 each Fully paid upCost of investment (including ` 1,58,121/- of goodwill arising on consolidation)

5.00 5.00

Add : Share in post acquisition profit/ (loss) (5.00) (5.00)(Reported at Nil Value as the Company's share of losses exceeds carrying value)

- -

Sporting & Outdoor Ad-Agency Private Limited3,97,196 Equity Shares of ` 10 each Fully paid upCost of investment 125.98 - Add : Share in post acquisition profit/ (loss) (125.98) - (Reported at Nil Value as the Company's share of losses exceeds carrying value)

- -

Investment in Equity instruments at fair value through Profit and Loss Presage Technopower Private Limited - 0.35 3,514 Equity Shares of ` 10 each fully paid upInvestment in Preference shares at fair value through Profit and Loss Mount Overseas Private Limited25,00,000 Compulsory Convertible Preference Shares of ` 10/- each ( ` 8/-paid up)

200.00 200.00

Sudarshan Procon Private Limited3,12,50,000 Compulsory Convertible Preference Shares of ` 10/- each ( ` 8/-paid up)

2,500.00 2,500.00

Solaris Developers Private Limited3,75,000 0% Compulsory Convertible Preference Shares of ` 10/- each ( ` 5/- paid up)

600.00 600.00

Ritebanc Green Agro Solutions Private Limited10,00,000 Optionally Convertible Non-Cumulative Preference Shares of ` 10/- each fully paid up

1,000.00 1,000.00

Other Investment at fair value through Profit and lossIndian Real Opportunity Venture Capital Fund (Scheme: Milestone Domestic)

- 10.31

1,031 units ( 31.03.2016 1,031 units, 01.04.2015 1,299 units) of face value of ` 1,000 each fully paid upQuoted,Fully Paid UpInvestment in equity instruments at fair value through Profit and Loss Andhra Bank 1.87 2.60 4,505 Shares of face value of ` 10 each fully paid upProzone Intu Properties Limited 108.75 92.38 2,50,000 Equity Shares of ` 2 each fully paid up

4,410.62 4,405.64 Aggregate Value of Unquoted Investments 4,300.00 4,310.66 Aggregate Value of Quoted Investments 110.62 94.98 Market Value of Quoted Investments 110.62 94.98

130


NOTE 6 : OTHER FINANCIAL ASSETS

(Unsecured, Considered Good)


31.03.2018 As at

31.03.2017Security Deposits 80.60 341.81

80.60 341.81

NOTE 7 : TAX EXPENSE

(a) Amounts recognised in Statement of Profit and Loss

( ` In Lacs)Particulars 2017-18 2016-17Current tax expenseCurrent year - - Short/(Excess) provision of earlier years 33.78 511.03 Deferred tax expenseOrigination and reversal of temporary differences 183.35 (298.88)Tax expense recognised in the statement of profit and loss 217.13 212.15

(b) Amounts recognised in other comprehensive income

( ` In Lacs)Particulars 2017-18 2016-17

Before tax

Tax (expense)

benefit

Net of tax

Before tax

Tax (expense)

benefit

Net of tax

Items that will not be reclassified to profit or lossRemeasurements of the defined benefit plans

9.93 (2.47) 7.46 (2.98) 0.74 (2.24)

9.93 (2.47) 7.46 (2.98) 0.74 (2.24)

(c) Reconciliation of effective tax rate

( ` In Lacs)Particulars 2017-18 2016-17Profit before tax (14,715.15) (19,509.57)Tax using the Company’s domestic tax rate (Current year 27.55% and Previous Year 33.063%)

(4,054.02) (6,555.80)

Tax effect of :Tax effect on reversal due to losses by the company 4,054.02 6,555.80 Others 183.35 (298.88)Tax expense as per Statement of Profit & Loss 183.35 (298.88) Effective tax rate -1.25% 1.53%



(d) Movement in deferred tax balances

Particulars Net balances at 1 April 2017

Recognised in the statement of profit and loss

Recognised in OCI

Balance at 31 March 2018 Net Deferred tax

assetDeferred tax

liabilitiesProperty, Plant and Equipments, investment property and intangible assets

1093.74 (130.42) 0.00 1224.16 1224.16 0.00

Financial assets 520.46 327.47 0.00 192.99 192.99 0.00

Other Liabilities / provisions 20.94 (4.18) 0.00 25.12 25.12 0.00

Investments (28.26) (7.98) 0.00 (20.28) 0.00 20.28

Borrowings (1.54) (1.54) 2.47 0.00 0.00 0.00

Tax assets (liabilities) before set-off

1605.34 183.35 2.47 1421.99 1442.27 20.28

Set-off of deferred tax liabilities (20.28)


1421.99

Particulars Net balances at 1 April 2016

Recognised in the statement of profit and loss

Recognised in OCI

Balance at 31 March 2017 Net Deferred

tax assetDeferred tax

liabilitiesProperty, Plant and Equipments, investment property and intangible assets

1,113.49 19.75 1,093.74 1,093.74 0.00

Financial assets 206.51 (313.95) 520.46 520.46 0.00

Other Liabilities / provisions 19.82 (1.12) 20.94 20.94 0.00

Investments (27.86) (28.26) 0.00 28.26

Borrowings (5.09) (3.56) (0.74) (1.54) 0.00 1.54

Tax assets (liabilities) before set-off

1,306.86 (298.88) (0.74) 1,605.34 1,635.14 29.80

Set-off of deferred tax liabilities (29.80)


1,605.34

(e) Tax Losses

( ` In Lacs)Particulars 2017-18 2016-17 Unused tax losses for which no deferred tax asset has been recognised 42,819.84 28,104.69 Potential tax benefit @ 27.55% (PY 33.063%) 11,797.94 9,292.25

NOTE 8 : INCOME TAX ASSETS (NET)

(Unsecured, Considered Good)


31.03.2018 As at

31.03.2017 Advance Tax & TDS (net of provision for tax) 411.00 576.08

411.00 576.08

132


NOTE 9 : OTHER NON-CURRENT ASSETS (Unsecured, Considered Good)


31.03.2018 As at

31.03.2017 Capital advances 69.65 919.65 Advance recoverable in cash or kind or for value to be received 579.46 876.62 Input credit receivable of indirect taxes 55.69 46.58

704.80 1,842.85

NOTE 10 : INVENTORIES (Valued at lower of cost or Net Realisable Value)


31.03.2018 As at

31.03.2017 Raw materials and components 643.60 2,232.70 Work-in-progress - 58.08 Finished goods 185.00 3,685.99 Stock in trade 906.97 14,233.99 Accessories & packing materials 8.06 17.47

1,743.63 20,228.23

NOTE 11 : CURRENT INVESTMENTS ( ` In Lacs)


As at 31.03.2017

Quoted Investments(Valued at lower of cost or fair value, unless stated otherwise)Investments in Mutual Funds at fair value through Profit and loss 58,183.75 units (31.03.2017 : 61,007.56 units ) of Reliance Money Manager Fund

587.26 636.89

587.26 636.89

NOTE 12 : LOANS (Unsecured, Considered Good)


31.03.2018 As at

31.03.2017 Current Loans and advances 282.56 329.38 Loan to employees 4.67 42.42

287.23 371.80

NOTE 13 : TRADE RECEIVABLES ( ` In Lacs)


As at 31.03.2017

Unsecured, Considered Good 6,907.20 8,455.45 Unsecured, Considered Doubtful 865.34 996.00

7,772.54 9,451.45 Less : Provision for doubtful debts 865.34 996.00

6,907.20 8,455.45



NOTE 14 : CASH AND CASH EQUIVALENTS ( ` In Lacs)


As at 31.03.2017

Balances with Banks in Current Accounts 664.51 1,262.61 Cash on hand 16.27 23.08

680.78 1,285.69

NOTE 15 : BANK BALANCES OTHER THAN CASH AND CASH EQUIVALENTS ( ` In Lacs)


As at 31.03.2017

Deposits with original maturity for more than 3 months but less than 12 months 84.56 155.99 Balance with banks to the extent held as margin money/ Security 209.75 490.62

294.31 646.61

NOTE 16 : OTHER CURRENT ASSETS ( ` In Lacs)


As at 31.03.2017

Premium on forward contract receivable 16.20 - Prepaid Rent - 6.04 Advance recoverable in cash or in kind 3,115.32 2,867.17 Prepaid Expenses 6.86 9.17 Other receivables 125.73 101.08 Export incentive receivable 269.08 292.85

3,533.19 3,276.31

NOTE 17 : EQUITY SHARE CAPITAL ( ` In Lacs)


As at 31.03.2017

Authorised3300.00 lakhs Equity Shares of ` 1 each 3,300.00 3,300.00 Issued, Subscribed and Fully Paid Up2,333.82 lakhs Equity Shares of ` 1 each fully paid up 2,333.82 2,333.82

2,333.82 2,333.82

a) Reconciliation of shares outstanding at the beginning and at the end of the periodParticulars As at 31.03.2018 As at 31.03.2017

No. in lakhs ` In lakhs No. in lakhs ` In lakhsEquity SharesAt the beginning of the period 2,333.82 2,333.82 1,143.57 1,143.57 Issued during the year - - 1,190.25 1,190.25 Outstanding at the end of the period 2,333.82 2,333.82 2,333.82 2,333.82

134


b) Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of ` 1 per share. Each holder of equity share is entitled to one vote per share.

In the event of liquidation of the Company, the holder of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

c) Details of Shareholders holding more than 5% shares in the company:

Particulars As at 31.03.2018 As at 31.03.2017No. in lakhs % holding No. in lakhs % holding

Andhra Bank 464.29 19.89 464.29 19.89 Bank of India 201.29 8.63 201.29 8.63 Corporation Bank 197.91 8.48 197.91 8.48 Central Bank of India 160.09 6.86 160.09 6.86 Punjab National Bank 129.63 5.55 129.63 5.55

d) Other Information

(i) 29.00 lakhs Equity Shares (of ` 10 each fully paid) have been issued as preferential allotment at a premium of ` 440 per share in the financial year 2006-07.

(ii) 13.34 lakhs Equity Shares (of 10 each fully paid) have been issued on conversion of the share warrants issued at ` 450 in the ratio of one share per warrant in the financial year 2007-08 and 2008-09

(iii) 28.50 lakhs Equity Shares (of ` 10 each fully paid) have been issued as preferential allotment at a premium of ` 1090 per share in the financial year 2008-09.

(iv) The Company has sub divided the equity share of ` 10 each (fully paid up) into 5 (five) equity shares of ` 2 each (fully paid up) based on the approval of the share holders in the Annual General Meeting held on 15th September 2008.

(v) 20.50 lakhs Equity Shares of ` 2 each have been extinguished under Buy Back Scheme in the financial year 2009-10.

(vi) During the financial year 2011-12, pursuant to The Scheme of Arrangement, 1143.57 lakhs Equity Shares of ` 2/- each have been reduced to 1143.57 lakhs Equity Shares of Re.1/- each

(vii) During the financial year 2016-17, the credit facilities of the company have been classified under SMA - 2 category with banks. On 16th December 2015, Joint Lender’s Forum (JLF) was formed for corrective action plan. As per discussions in JLF meeting held on 25th January 2016, it was decided to invoke Strategic Debt Restructuring (SDR) as per RBI guidelines. Pursuant to SDR Scheme,the Company on August 09, 2016 allotted 11,90,24,732 equity shares of Re 1/- per share to SDR Lenders at a price of ` 7.66 per share entitling them to collectively hold 51% of post allotement paid up share capital of the Company. The said alloted shares are subject to the lock in requirements upto August 25, 2017.



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136


NOTE 19 : NON CURRENT BORROWINGS ( ` In Lacs)


As at 31.03.2017

Term loan from banks (Secured) (Refer note 36(i) and 46) 3,568.11 4,372.81 Less: Interest accrued but not due on borrowings - 473.10 Less: Current maturities of long term debt (disclosed under other financial liabilities)

3,568.11 3,899.71

- - Debentures (Unsecured) 0% Fully Convertible Debenture of ` 2,999.04 lacs each fully paid up 2,863.89 2,627.43 Total 2,863.89 2,627.43

a) ` 3568.11 lacs (PY ` 4372.82 Lacs) term loan from Bank of India carries interest @ Base Rate + 2.50% per annum. The loan is repayable in 60 stepped up monthly installments commencing from April 2013. The loan is secured by First exclusive charge on future credit card cash flows through escrow account mechanism; Second pari passu charge on movable & immovable fixed asset of the company and current asset of the company and further secured by personal guarantee of promoter directors.

b) One 0% Fully Convertible Debenture (FCD) of ` 2999.04 lacs each fully paid up had been issued to Bennett, Coleman & Co. Limited. As per the terms of the issue, FCD is convertible into the Equity Shares at par, in any time within a period of five years from the date of allotment.

NOTE 20 : OTHER FINANCIAL LIABILITIES (Non Current)


31.03.2018 As at

31.03.2017 Trade deposits 36.34 256.40

36.34 256.40

NOTE 21 : PROVISIONS (Non Current)


31.03.2018 As at

31.03.2017 Provision for gratuity 40.41 37.90

40.41 37.90

NOTE 22 : CURRENT BORROWINGS ( ` In Lacs)


As at 31.03.2017

(Secured)Working Capital Loans (Refer note 36(i) and 46) 14,768.58 18,236.31 Devolved Letter of Credit from banks - 69.87 (Unsecured)Intercorporate deposits 363.22 363.22 Interest free loans and advances from related parties - 3.38

15,131.80 18,672.78



Working Capital Loans from Banks includes:

Secured :

(a) Cash Credit Loan:

` 11,899.20 Lacs (31.3.17 : ` 15,307.28 Lacs) - Secured by hypothecation of stocks and book debts, the personal guarantee of promoter directors and further collaterally secured by equitable mortgage of office and factory premises (at Daman) of the Company carrying interest @ 12.50% to 14.75% p.a.

(b) Packing Credit Loan and Foreign Bills Purchased:

` 2,590.21 Lacs (31.03.17 : ` 2,649.86 Lacs) – Secured by hypothecation of stocks and book debts of export division and the personal guarantee of promoter directors and further collaterally secured by equitable mortgage of office and factory premises (at Daman) of the Company carrying interest @ 11% to 13% p.a.

(c) ` 279.17 Lacs (31.03.17 : ` 279.17 Lacs) suppliers bills discounting limit from SIDBI, secured by residual charge on movable and current assets of the Company carrying interest @ 13% p.a.

NOTE 23 : TRADE PAYABLES ( ` In Lacs)


As at 31.03.2017

Due to Micro, Small & Medium Enterrises (Refer note below) 28.57 28.57 Others 2,611.30 3,690.91

2,639.87 3,719.48

The Company had sought cofirmation from the vendors whether they fall in the category of Micro, Small and Medium Enterprises. Based on the information available, the required disclosure for Micro, Small and Medium Enterprises under the MSMED Act, 2006 is given below :


As at 31.03.2017

The principal amount remaining unpaid to any supplier as at the end of accounting year ; 28.57 28.57 Interest due thereon remaining unpaid at the end of accounting year; * - - The amount of interest paid by the buyer under MSMED Act, 2006 along with the amounts of the payment made to the supplier beyond the due date during each accounting year; - - The amount of interest due and payable for the period (where the principal has been paid but interest under the MSMED Act, 2006 not paid); - - The amount of interest accrued and remaining unpaid at the end of accounting year; and - - The amount of further interest due and payable even in the succeeding year, until such date when the interest dues as above are actually paid to the small enterprise, for the purpose of disallowance as a deductible expenditure under section 23. - -

*Interest paid/payable by the Company on the aforesaid principle amount has been waived by the concerned suppliers.

138


NOTE 24 : OTHER FINANCIAL LIABILITIES (Current)


31.03.2018 As at

31.03.2017 Current maturities of long term debt 3,568.11 3,895.06 Interest accrued but not due on borrowings - 477.76 Trade deposits 2.53 2.53

3,570.64 4,375.35

NOTE 25 : PROVISIONS (Current)


31.03.2018 As at

31.03.2017 Provision for leave encashment 10.86 9.70 Provision for gratuity 7.29 7.26 Provision for expenses 22.05 12.81 Provision for Tax (Net of Advance Tax & TDS) 20.42 78.91

60.62 108.68

NOTE 26 : OTHER CURRENT LIABILITIES ( ` In Lacs)


As at 31.03.2017

Employee benefits payable 180.46 190.90 Duties & taxes payable 17.61 39.27 Advance from customers 442.85 566.51

640.92 796.68

NOTE 27 : REVENUE FROM OPERATIONS ( ` In Lacs)



Revenue from operations (gross)Sale of products 12,059.35 25,870.75 Advertisement Sales-News Papers 70.73 70.73 Other operating revenueExport benefits & incentives 366.15 680.99 Gain on foreign exchange fluctuations (net) 31.38 66.12 Others 157.42 93.24

12,685.03 26,781.83



NOTE 28 : OTHER INCOME ( ` In Lacs)



Interest income on- Bank deposits 42.32 90.43 - Loans & advances 0.12 80.57 - Others 14.30 0.01

56.74 171.01 Dividend income on current investments 29.67 34.35 Liabilities no longer payable written back 0.45 10.45 Rent income 43.50 64.33 Income on Investments carried at fair value through profit & loss 14.91 25.01 Interest received on financial assets carried at amortised cost 8.36 5.43 Profit on sale of investment 0.22 2.03 Miscellaneous income 79.64 35.58

233.49 348.19

NOTE 29 : COST OF MATERIALS CONSUMED ( ` In Lacs)



Raw Materials (Fabric)Opening stocks 2,232.70 26,419.29 Add : Purchases 2,533.51 4,346.29

4,766.21 30,765.58 Less : Material held for sale - 24,763.35 Less : Closing stocks 643.60 2,232.70

4,122.61 3,769.53 Accessories & Packing MaterialsOpening Stocks 17.47 9.09 Add : Purchases 40.30 43.67

57.77 52.76 Less : Closing Stocks 8.06 17.47

49.71 35.29 4,172.32 3,804.82

NOTE 30 : PURCHASES OF STOCK - IN - TRADE ( ` In Lacs)



Purchases of traded goods 6,089.10 18,417.63 Advertisement Purchases 36.18 36.06

6,125.28 18,453.69

140


NOTE 31 : CHANGES IN INVENTORIES OF FINISHED GOODS, WORK IN PROCESS AND STOCK IN TRADE

( ` In Lacs)Particulars Year Ended


31.03.2017 Opening Stocks- Work in Process 58.08 154.44 - Finished Goods 3,685.99 3,612.05 - Stock in trade 14,233.99 2,962.83

17,978.06 6,729.32 Add: Material held for sale - 24,763.35 Less: Obsolete inventories written off as exceptional item (Refer note 36) 7,968.61 Closing Stocks- Work in Process - 58.08 - Finished Goods 185.00 3,685.99 - Stock in trade 906.97 14,233.99

1,091.97 17,978.06 8,917.48 13,514.61

NOTE 32 : EMPLOYEE BENEFITS EXPENSE ( ` In Lacs)



Salaries, wages & bonus 492.26 464.38 Directors' remuneration 124.82 128.12 Contribution to provident & other funds 29.14 22.80 Workmen & staff welfare expenses 22.10 27.15

668.32 642.45

NOTE 33 : FINANCE COSTS ( ` In Lacs)



Interest expense :- Bank loans 1,450.59 3,366.72 - Present value of debentures 236.47 217.02 - Other loans - 45.57 Interest expense on financial liabilities carried at amortised cost 4.65 10.76 Other borrowing costs 105.52 149.38 Bank charges 4.99 9.12

1,802.22 3,798.57

NOTE 34 : DEPRECIATION AND AMORTISATION EXPENSE ( ` In Lacs)



Depreciation of Property, Plant & Equipment 344.79 528.61 Depreciation on Investment Property 19.23 24.33 Amortisation on Intangible Assets 5.81 5.85

369.83 558.78



NOTE 35 : OTHER EXPENSES ( ` In Lacs)



Processing charges 1,591.39 2,155.63 Rent (Net) 134.20 250.12 Rent expense on financial assets carried at amortised cost 6.04 5.99 Rates and taxes 124.11 83.72 Insurance 31.18 41.64 Repairs and maintenance - Building - 1.00 - Plant and machinery - 7.50 - Others 51.72 35.29 Electricity charges 54.42 57.04 Common area maintenance expenses 31.64 36.86 Studio expenses 7.53 8.46 Printing & stationery 20.95 22.78 Communication costs 53.08 45.86 Legal & professional fees 140.94 155.93 Travelling & conveyance 150.23 166.82 Brokerage & commission 89.65 98.16 Advertisement & business promotion expenses 120.92 158.09 Auditors' remuneration 12.74 20.21 Transportation, freight & handling charges 350.20 483.00 Sales Tax / VAT - 237.73 Excise Duty 16.39 Provision for doubtful debts 48.76 795.45 Advances and other financial assets no longer recoverable written off 1,993.71 917.66 Loss on sale/discard of fixed assets 142.75 6.75 Interest and penalties on delay in payment of statutory dues 21.41 8.93 Foreign exchange gain loss 175.21 - Loss on sale of investments in subsidiary 24.09 - Exceptional Item - Bad debts 148.78 - Miscellaneous expenses 52.57 49.66

5,578.22 5,866.67

Payments to Auditor



Audit fees 12.74 12.79 Service tax - 1.85

12.74 14.64

NOTE 36 : EXCEPTIONAL ITEMS



Reversal of Post SDR Interest (5,252.34) - Obsolute Stock Written off 7,968.61 -

2,716.27 -

Exceptional items represents :

i) Reversal of interest expense provided post SDR amounting to ` 5252.34 lacs, since lenders have classified credit facilities as sub standard due to expiry of stipulated time for SDR as per RBI guidelines. Also refer note 46.

ii) Obsolete inventories written off amounting to ` 7968.61 lacs which were non moving since significant period of time.

142


NOTE 37 : EARNINGS PER EQUITY SHARE In accordance with Indian Accounting Standard 33 - Earning Per Share, the computation of earning per

share is set below: ( ` In Lacs)

Sr No



i) Weighted average number of Equity Shares of ` 1 eacha) Number of shares at the beginning of the year 1,143.57 1,143.57 b) Number of shares at the end of the period 2,333.84 2,333.84 c) Weighted average number of shares outstanding during the year 2,333.84 1,909.89

ii) Net Profit \ (Loss) after tax available for equity shareholders (17,648.55) (19,721.73)iii) Basic Earning per share (in ` ) (7.56) (10.33)iv) Diluted Earning per share (in ` ) (7.56) (10.33)

NOTE 38 : COMMITMENTS

Operating leases

A. Leases as lessee

The Group enters into non-cancellable operating lease arrangements with various parties . The lease rentals paid/received for the same are charged to the Statement of Profit and Loss.

i. Future minimum lease payments

At 31st March, the future minimum lease payments under non-cancellable leases are Nil.

ii. Amounts recognised in profit or loss


31.03.2018 As at

31.03.2017Lease expense 134.20 250.12 Contingent rent expense - -

134.20 250.12

Initial direct costs incurred on these leasing transactions have been recognised in the Profit and Loss Account.

NOTE 39: CONTINGENT LIABILITIES NOT PROVIDED FOR : ( ` In Lacs)Sr. No.


As at 31.03.2017

a) Estimated amount of contracts remaining to be executed on capital account

970.00 970.00

b) Uncalled liability on investments in preference shares partly paid 1,275.00 1,275.00 c) Sales Tax Liability contested in appeals 115.49 97.08 d) Stamp Duty Liability not acknowledged as debt 10.00 10.00 e) Pending the final disposal of the matter, which is presently before

the Supreme Court in respect of levy of service tax on renting of immovable properties given for commercial use, retrospectively w.e.f. June 01, 2007, the Company continues not to provide for the retrospective levy aggregating to ` 279.47 lacs for the period June 01, 2007 to September 30, 2011. (The Company has paid ` 139.73 lacs under protest and has furnished solvency surety for the balance ` 139.74 lacs pursuant to the Interim Order dated October 14, 2011 passed by the Hon'ble Supreme Court of India)

279.47 279.47

f) Disputed demand of income Tax 292.57 600.96 g) Claims against the Company, not acknowledged as debt 285.11 165.96



NOTE 40 : EMPLOYEE BENEFIT EXPENSES ( ` In Lacs)

Post Employment Benefit Plans :

Defined Contribution SchemeAmount recognised in the Statement of Profit and Loss 2017-18 2016-17Contribution to Provident fund and others 29.14 22.80

Defined Benefit Plans

The Company has the following Defined Benefit Plans:

Gratuity: In accordance with the applicable laws, the Company provides for gratuity, a defined benefit retirement plan (“The Gratuity Plan”) covering eligible employees. The Gratuity Plan provides for a lump sum payment to vested employees on retirement (subject to completion of five years of continuous employment), death, incapacitation or termination of employment that are based on last drawn salary and tenure of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation on the reporting date and the Company makes annual contribution to the gratuity fund administered by life Insurance Companies under their respective Group Gratuity Schemes.

The disclosure in respect of the defined Gratuity Plan are given below:Particulars Defined Benefit Plans

As at 31.03.2018

As at 31.03.2017

Present value of funded obligations 62.32 58.90 Fair Value of plan assets 14.62 13.73 Net (Asset)/Liability recognised 47.70 45.17

Movements in plan assets and plan liabilitiesParticulars Present

value of obligations


As at 1st April 2017 58.90 13.73 Current service cost 7.26 Transfer in/(out) obligation 0.21 - Past service cost 0.72 Interest Cost/(Income) 3.64 0.91 Return on plan assets excluding amounts included in net finance income - (0.022)Actuarial (gain)/loss arising from changes in financial assumptions (1.93)Actuarial (gain)/loss arising from experience adjustments (5.55)Employer contributions - Benefit payments (0.92)As at 31st March 2018 62.32 14.62

Particulars Present value of

obligations


As at 1st April 2016 48.20 12.73 Current service cost 4.76 - Past service cost - - Interest Cost/(Income) 5.96 1.00 Return on plan assets excluding amounts included in net finance income - (0.003)Actuarial (gain)/loss arising from changes in financial assumptions 2.40 - Actuarial (gain)/loss arising from experience adjustments (0.17) - Employer contributions - - Benefit payments (2.25) - As at 31st March 2017 58.90 13.73

144


Statement of Profit and Loss

Employee benefit expenses : 2017-2018 2016-2017Current Service cost 7.26 6.84 Interest cost/(Income) 2.72 2.33 Past service cost and loss/(gain) on curtailments and settlement 0.89 - Expected return on Plan Assets - Total amount recognised in Statement of P&L 10.88 9.17 Remeasurement of the net defined benefit liability : Return on plan assets excluding amounts included in net finance income/(cost)

0.02 0.003

Change in Financial Assumptions (4.39) 3.14 Experience gains/(losses) (5.55) (0.17)Total amount recognised in Other Comprehensive Income (9.92) 2.98

Investment pattern for Fund as onCategory of Asset As at

31.03.2018 As at

31.03.2017Government of India Securities 0% 0%State Government Securities 0% 0%High quality corporate bonds 0% 0%Equity shares of listed companies 0% 0%Property 0% 0%Special Deposit Scheme 0% 0%Policy of insurance 100% 100%Bank Balance 0% 0%Other Investments 0% 0%Total 100% 100%

Assumptions

With the objective of presenting the plan assets and plan liabilities of the defined benefits plans at their fair value on the balance sheet, assumptions under Ind AS 19 are set by reference to market conditions at the valuation date.

The significant actuarial assumptions were as follows:

Financial Assumptions As at 31.03.2018

As at 31.03.2017

Discount rate 7.55% 7.00%Salary growth rate 5.10% 5.10%Expected Rate of ReturnWithdrawal Rates 10% at all

ages10% at all

ages




Demographic Assumptions

Mortality in service : Indian Assured Lives Mortality (2006-08)

Sensitivity

The sensitivity of the overall plan liabilities to changes in the weighted key assumptions are:

Particulars As at 31-Mar-18Increase/Decrease in liability

Discount rate varied by 0.5% 0.50% 58.20 -0.50% 61.61 Salary growth rate varied by 0.5% 0.50% 61.44 -0.50% 58.33 Withdrawal rate (W.R.) varied by 10% W.R.* 110% 60.44 W.R.* 90% 59.27

The sensitivity analyses above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the same method used to calculate the liability recognised in the balance sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous period.

The expected future cash flows as at 31st March 2018 were as follows:

Expected contribution Cash flow %Projected benefits payable in future years from the date of reporting2019 7.67 7.70%2020 6.54 6.60%2021 7.14 7.20%2022 5.88 5.90%2023 6.72 6.80%2024-2028 32.11 32.40%

NOTE 41 : SEGMENT REPORTING

(i) Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (“CODM”) of the group. The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Managing Director and CEO of the group.

The CODM examine the group performance from a geographic perspective and has identified two of its following business as identifiable segments:

a) Domestic

b) Export


146


Segment Reporting Results( ` In Lacs)


As at 31.03.2017

1. Segment Revenuea. Domestic 4,050.98 16,511.56 b. Exports 8,649.19 10,270.28 Gross Sales / Income from Operations 12,700.16 26,781.83 2. Segment ResultsProfit before tax and interest for each segment a. Domestic (12,783.12) (14,830.99)b. Exports (860.49) 15.24 Sub Total (13,643.61) (14,815.75)Less : i) Finance Cost 1,802.22 3,798.57 ii) Un-allocable expenses net off income (730.68) 895.26 iii) Exceptional Item 2,716.27 - Total Profit before Tax (17,431.42) (19,509.58)Less : Tax Expenses 217.13 212.15 Net Profit / (Loss) (17,648.56) (19,721.73)3. Segment Assetsa. Domestic 8,490.02 29,305.91 b. Exports 11,631.90 12,671.03 Unallocated 6,851.26 8,172.62 Total 26,973.18 50,149.55 4. Segment Liabilitiesa. Domestic 20,989.29 26,695.50 b. Exports 3,995.20 3,899.18 Unallocated - - Total 24,984.49 30,594.67

NOTE 42 : DISCLOSURES ON RELATED PARTY TRANSACTIONS

List of Related Parties and Relationships:

a) Key Management Personnel / Promoter Directors


Mr. Deep Gupta Whole Time Director & CFO


Mr. Salil Chaturvedi Director

Mr. Dinesh Arya Director

Ms. Gauri Pote Director

Mr. Hetal Hakani Director

Mr. Vishant Shetty Company Secretary



b) Enterprise having Common Key Managerial Personnel

i) Prozone Intu Properties Limited

( ` In Lacs)

Particulars Year ended 31st March, 2018 Year ended 31st March, 2017Total Amount Amount for

Major Parties*Total Amount Amount for

Major Parties*(I) TransactionsRemuneration to Key Management Personnel

58.80 58.80

Mr. Deep Gupta 54.00 54.00 Mr. Vishant Shetty 5.80 4.80 Sale of Goods/ServicesProzone Intu Properties Limited 36.00 36.00 Director Sitting fees paid 2.2 Mr. Dinesh Arya 1.00 Ms. Gauri Pote 0.40 Mr. Hetal Vasant Hakani 1.00(II) Balance outstanding at

the end of the yearReceivablesEnterprises under significant influence

85.73 61.08

Prozone Intu Properties Limited 85.73 61.08

Note: Related Parties are as disclosed by the Management and relied upon by the auditors.

148


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NO

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44

: FI

NA

NC

IAL

INS

TR

UM

EN

TS

– F

AIR

VA

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S A

ND

RIS

K M

AN

AG

EM

EN

T

A

. A

cco

unti

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lass

ifica

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d f

air

valu

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The

Gro

up u

ses

the

follo

win

g hi

erar

chy

for

dete

rmin

ing

and

disc

losi

ng th

e fa

ir va

lue

of fi

nanc

ial i

nstr

umen

ts b

y va

luat

ion

tech

niqu

e:

Le

vel 1

: quo

ted

(una

djus

ted)

pric

es in

act

ive

mar

kets

for

iden

tical

ass

ets

or li

abilit

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Leve

l 2: o

ther

tech

niqu

es fo

r w

hich

all

inpu

ts w

hich

hav

e a

sign

ifica

nt e

ffect

on

the

reco

rded

fair

valu

e ar

e ob

serv

able

, eith

er d

irect

ly o

r in

dire

ctly.

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l 3: t

echn

ique

s w

hich

use

inpu

ts th

at h

ave

a si

gnifi

cant

effe

ct o

n th

e re

cord

ed fa

ir va

lue

that

are

not

bas

ed o

n ob

serv

able

mar

ket d

ata.

The

follo

win

g ta

ble

show

s th

e ca

rryi

ng a

mou

nts

and

fair

valu

es o

f fin

anci

al a

sset

s an

d fin

anci

al li

abilit

ies,

incl

udin

g th

eir

leve

ls in

the

fai

r va

lue

hier

arch

y. It

doe

s no

t in

clud

e fa

ir va

lue

info

rmat

ion

for

finan

cial

ass

ets

and

finan

cial

liab

ilitie

s no

t m

easu

red

at fa

ir va

lue

if th

e ca

rryi

ng a

mou

nt is

a

reas

onab

le a

ppro

xim

atio

n of

fair

valu

e.( `

In L

acs)

Fina

ncia

l Ass

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Lia

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as

at 3

1st M

arch

201

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on

Cur

rent

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fit

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at

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vel 1

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nanc

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( ` in

lakh

s)Fi

nanc

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sset

& L

iab

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es a

s at

31st

Mar

ch 2

017

No

n C

urre

ntC

urre

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tal

Ro

uted

thr

oug

h P

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t &

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ssR

out

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IC

arri

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t A

mo

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ost

Tota

l A

mo

unt

Leve

l 1Le

vel 2

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l 3Le

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l 2Le

vel 3

Fina

ncia

l ass

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ents

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ash

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3 -

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2

9,65

1.43

2

9,65

1.43

150


B. Measurement of fair values

Valuation techniques and significant unobservable inputs

The Fair Value of the Financial Assets & Liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group is exposed to interest rate risk through the impact of rate changes on interest-bearing liabilities and assets. The Group manages its interest rate risk by monitoring the movements in the market interest rates closely.

Exposure to interest rate risk

Group’s interest rate risk arises primarily from borrowings. The interest rate profile of the Group’s interest-bearing financial instruments is as follows.


31.03.2018 As at

31.03.2017 Borrowing bearing variable interest rate 21,563.80 25,673.02 Total of Variable Rate Financial Liabilities 21,563.80 25,673.02

Cash flow sensitivity analysis for variable-rate instruments

The sensitivity analysis below have been determined based on the exposure to interest rates for financial instruments at the end of the reporting year and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period in the case of instruments that have floating rates. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates :

Cash flow sensitivity (net) Profit or loss50 bp

increase50 bp

decrease31st March 2018Variable-rate loan instruments (107.82) 107.82 Cash flow sensitivity (net) (107.82) 107.82 31st March 2017Variable-rate loan instruments (128.37) 128.37 Cash flow sensitivity (net) (128.37) 128.37




Market risk

Market Risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: currency risk and interest rate risk.

Currency risk

The Group is exposed to currency risk on account of its operating and financing activities. The functional currency of the Group is Indian Rupee. Our exposure are mainly denominated in U.S. dollars. The USD exchange rate has changed substantially in recent periods and may continue to fluctuate substantially in the future. The Group’s business model incorporates assumptions on currency risks and ensures any exposure is covered through the normal business operations. This intent has been achieved in all years presented. The Group has put in place a Financial Risk Management Policy to Identify the most effective and efficient ways of managing the currency risks.

Exposure to currency risk

The currency profile of financial assets and financial liabilities as at March 31, 2018, and March 31, 2017 are as below:

(Foreign Currency in Lacs)31st March, 2018 USD EUROFinancial assets Trade receivables 48.31 0.84 Net exposure for assets 48.31 0.84 Financial liabilities Foreign Currency Borrowings (Including Current Maturities) - - Net exposure for liabilities - - Net exposure (Assets - Liabilities) 48.31 0.84

(Foreign Currency in Lacs)31st March, 2017 USD EUROFinancial assets Trade receivables 41.79 1.50 Net exposure for assets 41.79 1.50 Financial liabilities Foreign Currency Borrowings (Including Current Maturities) 1.27 - Net exposure for liabilities 1.27 - Net exposure (Assets - Liabilities) 40.52 1.50

Sensitivity analysis

A reasonably possible strengthening / (weakening) of the Indian Rupee against US dollars at 31st March would have affected the measurement of financial instruments denominated in US dollars and affected profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases. In cases where the related foreign exchange fluctuation is capitalised to fixed assets or recognised direclty in reserves, the impact indicated below may affect the Group’s income statement over the remaining life of the related fixed assets or the remaining tenure of the borrowing respectively.


152




(b) Particulars of hedged and unhedged foreign currency exposures as at the reporting date

As at 31st March 2018(Foreign Currency in Lacs)

Particulars USD EUROTrade Receivables 48.31 0.84 Less : Foreign currency forward contracts (Sell) 44.17 Unhedged Receivable 4.14 0.84 Borrowings - Less : Foreign currency forward contracts (Buy) - - Unhedged Payable - -

As at 31st March 2017

(Foreign Currency in Lacs)Particulars USD EUROTrade Receivables 41.79 1.50 Less : Foreign currency forward contracts (Sell) 41.45 - Unhedged Receivable 0.34 1.50 Borrowings 1.27 - Less : Foreign currency forward contracts (Buy) - - Unhedged Payable 1.27 -

The Group measures the expected credit loss of trade receivebles and loan from individual customers based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, loss on collection of receivable is not material hence no additional provision considered.

Ageing of Accounts receivables :( ` in Lacs)


As at 31.03.2017

0 - 6 months 4,734.70 4,403.19 6 - 12 months 1,570.99 2,926.49 Beyond 12 months 601.51 1,125.77 Total 6,907.20 8,455.45




Movements in provision of doubtful debts


31.03.2018 As at

31.03.2017 Opening provision 996.00 69.55 Add : Additional provision made / reversed / written off (130.66) 725.90 Closing provisions 865.34 996.00

NOTE 45 : CAPITAL MANAGEMENT

For the purpose of the Group’s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Group. The Group strives to safeguard its ability to continue as a going concern so that they can maximise returns for the shareholders and benefits for other stake holders. The aim to maintain an optimal capital structure and minimise cost of capital.

The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Group may return capital to shareholders, issue new shares or adjust the dividend payment to shareholders (if permitted). Consistent with others in the industry, the Group monitors its capital using the gearing ratio which is total debt divided by total capital plus total debt.


31.03.2018 As at

31.03.2017 Total Debt 21,563.80 25,673.02 Total Equity (787.71) 16,776.58 Total debt to equity ratio (Gearing ratio) 1.04 0.60

NOTE 46 : During the financial year 2015-16, the credit facilities of the Company have been classified under SMA-2 category with banks. On December 16, 2015, Joint Lender’s Forum (JLF) was formed for corrective action plan. As per the discussions in JLF meeting held on 25th January, 2016, it was decided to invoke Strategic Debt Restructuring (SDR) as per RBI guidelines. Pursuant to SDR Scheme, the Company on August 09, 2016 allotted 11,90,24,732 equity shares of Re. 1/- per share to SDR Lenders at a price of ` 7.66 per share entitling them to collectively hold 51% of post allotment paid up share capital of the Company. The said allotted shares were subject to the lock-in requirement up to August 25, 2017. The investors proposal under SDR was not approved by lenders. Accordingly, the Company has reversed interest expense provided post SDR amounting to ` 5252.34 lacs, since lenders have classified credit facilities as sub standard due to expiry of stipulated time for SDR as per RBI guidelines.

NOTE 47: The Company has regrouped, reclassified and/ or rearranged previous year figures, wherever necessary to conform to current year classification.






154154

Annexure I

Statement on Impact of Audit Qualifications (for audit report with modified opinion) submitted along-with Annual Audited Financial Results (Consolidated)

Statement on Impact of Audit Qualifications for the Financial Year ended March 31, 2018

[See Regulation 33 / 52 of the SEBI (LODR) (Amendment) Regulations, 2016]

I. SN Particulars Audited Figures (as reported before adjusting

for qualifications) (` in Lakhs)

Adjusted Figures (audited figures after adjusting for qualifications) (` in Lakhs)

1. Turnover / Total income 12,918.52 12,918.52 2. Total Expenditure 27,633.67 29,114.67 3. Net Profit/(Loss) after taxes, minority

interest and share of profit / (loss) of associates

(17,255.43) (23,988.77)

4. Earnings Per Share (7.56) (10.51)5. Total Assets 26,973.17 26,973.17 6. Total Liabilities 24,984.49 31,717.83 7. Net Worth 1,988.68 (4,744.66)8. Any other financial item(s) (as felt

appropriate by the management)Nil Nil

II. Audit Qualification (each audit qualification separately):a. Details of Audit Qualification: As explained in the note 5(i) to the Result, the Company has not provided interest for the quarter and

year ended March 31, 2018 amounting to ` 740.50 lacs and ` 1481.00 lacs respectively and reversed interest provided post SDR amounting to ` 5,252.34 lacs payable to various lenders since the credit facilities are classified as sub-standard as per RBI guidelines. Had the Company provided interest for the quarter and year ended March 31, 2018, finance cost would have been higher by ` 740.50 lacs and ` 1481.00 lacs respectively and had the Company had not reversed post SDR interest, net loss would have been higher by ` 740.50 lacs and 6733.34 lacs for the quarter and year ended March 31, 2018.

b. Type of Audit Qualification : Qualified Opinion / Disclaimer of Opinion / Adverse Opinionc. Frequency of qualification: Whether appeared first time / repetitive / since how long continuing :d. For Audit Qualification(s) where the impact is quantified by the auditor, Management’s Views: The Company is in discussion with the bankers for a resolution plan, hence Company has not accrued

interest for the period post SDR date and the same will be accounted on finalisation of resolution plan.e. For Audit Qualification(s) where the impact is not quantified by the auditor: (i) Management’s estimation on the impact of audit qualification: Not Applicable (ii) If management is unable to estimate the impact, reasons for the same: : Not Applicable (iii) Auditors’ Comments on (i) or (ii) above: : Not Applicable

III Signatories:Mr. Nikhil Chaturvedi, Managing DirectorMr. Deep Gupta, Whole-time Director & CFO Mr. Dinesh Arya, Audit Committee ChairmanStatutory Auditor For Ajay Shobha & Co.

Chartered AccountantsFirm’s Registration No.317031E

Date: 11th May, 2018.Place: Mumbai

Ajay Gupta, PartnerMem. No. 053071


FOR

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FORM NO. MGT – 11 PROXY FORM

[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the

Companies (Management and Administration) Rules, 2014]


Regd. Office: 105/106, Provogue House, 1st Floor, Off New Link Road, Andheri (West) Mumbai, 400053Ph: +91-22-30680560 Fax: +91-22-30680570 Email: [email protected], Website: www.provogue.com

Name of the Member(s) :

Registered Address :

Folio No/ Client id :

DP ID :

Email ID :

I/ We being the member(s) of shares of the above named Company, hereby appoint

1. Name:

Address

Email Id Signature , or failing him

2. Name:

Address

Email Id Signature

as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 22nd Annual General Meeting of members of the Company, to be held on Saturday, 29th September 2018 at Eden Hall, The Classique Club, Behind Infinity Mall, New Link Road, Andheri (West), Mumbai - 400053 at 11.00 a.m. and at any adjournment thereof in respect of such resolutions as are indicated below:

Res. No

Description

1 To receive, consider and adopt the audited Financial Statements of the Company on a standalone and consolidated basis, for the financial year ended 31st March 2018 including audited Balance Sheet as at 31st March 2018 and the Statement of Profit & Loss and Cash Flow Statement for the year ended on that date along with the Reports of the Directors’ and Auditors’ thereon.

2 To appoint a Director in place of Mr. Salil Chaturvedi (DIN: 00004768), who retires by rotation and being eligible, offers himself for re-appointment.

3 To re-appoint Statutory Auditor of the Company and fix their remuneration.

4 To consider and approve the payment of remuneration to the Cost Auditors

5 To approve the payment of remuneration to Mr. Deep Gupta Whole-time Director for remaining period of two years of his tenure year with effect from 1st April 2018 till 31st March, 2020.

Signed this day of 2018

Signature of the shareholder

Signature of the Proxy Holder(s)

[Note: This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the

Company, not less than 48 hours before the commencement of the Meeting.]

Signature across Revenue Stamp

Affix One Rupee

Revenue Stamp



Regd. Office: 105/106, Provogue House, 1st Floor, Off New Link Road, Andheri (West), Mumbai 400053.Ph: +91-22-30680560 Fax: +91-22-30680570 Email: [email protected], Website: www.provogue.com

22nd Annual General Meeting

ATTENDANCE SLIP

Folio/ DP & Client ID No. No. of shares held

Mr./Ms./Mrs.

Address:

I hereby record my presence at the 22nd Annual General Meeting of the Company held at Eden Hall, The Classique Club, Behind Infinity

Mall, New Link Road, Andheri (W) Mumbai - 400 053 at 11.00 a.m. on Saturday, 29th September 2018

(Proxy’s Name in Block letters)

(Member’s /Proxy’s Signature)

1. Strike out whichever is not applicable

2. Please fill in this Attendance Slip and hand it over at the entrance of the meeting hall. Joint shareholders may obtain additional

Attendance Slip on request


Regd. Office: 105/106, Provogue House, 1st Floor, Off New Link Road, Andheri (West), Mumbai 400053.Ph: +91-22-30680560 Fax: +91-22-30680570 Email: [email protected], Website: www.provogue.com

To, Date: …………………………

Link Intime India Private Limited

Unit: Prozone Intu Properties Limited

C 101, 247 Park, LBS Marg, Vikhroli West,

Mumbai 400 083

Sub: Service of Documents through Electronic Mode (Registration Form Electronic Communication)

I, ……………………………………………… (name of first/individual shareholder) holding ……………………….. (no. of shares) equity

shares vide folio no./DP & Client ID No. ……………………….. in the Company, would like to register below mentioned e-mail ID for

receiving all the communications/ documents/notices/correspondences from the Company in electronic mode instead of getting

physical copies of the same. Kindly register the same.

Email Address: _______________________________________

Thanking you,

Yours truly,Name of Sole / First Holder _______________________________________

Signature: _____________________________

www.provogue.com

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