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Page 1: BOARD OF DIRECTORScorporate.provogue.com/media/provogue/pdf/annual... · Indian retail space in the past few months. India’s retail sector investments doubled to reach ` 1,300 Crore
Page 2: BOARD OF DIRECTORScorporate.provogue.com/media/provogue/pdf/annual... · Indian retail space in the past few months. India’s retail sector investments doubled to reach ` 1,300 Crore
Page 3: BOARD OF DIRECTORScorporate.provogue.com/media/provogue/pdf/annual... · Indian retail space in the past few months. India’s retail sector investments doubled to reach ` 1,300 Crore

Annual Report 20191

BOARD OF DIRECTORS:

Mr. Dinesh Arya, Chairman and Independent Director (Resigned w.e.f 30th March 2019)

Mr. Hetal Hakani, Independent Director

Ms. Gauri Pote, Woman Independent Director (Resigned w.e.f. 30th March 2019)

Mr. Nikhil Chaturvedi, Managing Director

Mr. Deep Gupta, Whole Time Director & CFO

Mr. Akhil Chaturvedi, Whole Time Director

Mr. Salil Chaturvedi, Non-executive Director

RESOLUTION PROFESSIONAL:

Mr. Amit Gupta

IBBI Registration No.: IBBI/IPA-001/IP-P00016/2016-17/10040

COMPANY SECRETARY:

Mr. Vishant Shetty (Resigned w.e.f. 17th April 2019)

Mr. Vishal Menon (Appointed w.e.f. 18th April 2019)

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: 022-68249000

Email ID: [email protected]

Website: www.provogue.com

CIN: L18101MH1997PLC111924

REGISTRAR AND SHARE TRANSFER AGENT

Link Intime India Private Limited

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

Vikhroli (West),

Mumbai - 400078

Phone : 022-49186000

CORPORATE INFORMATION

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2

CONTENTS

Reports

Management Discussion and Analysis Report 3

Notice 8

Directors' Report 16

Corporate Governance Report 41

Financials

Standalone Financial 56

Consolidated Financial 110

For Shareholders' Use

Proxy Form 163

Attendance Slip 165

E-mail Registration Form 167

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Annual Report 20193

INDIAN ECONOMIC OVERVIEW

India has emerged as the fastest-growing major economy and is expected to be one of the top three economic powers of the world over the next 10-15 years, led by its stable democracy and bourgeoning population. India’s real Gross Domestic Product (GDP) at constant (2011-12) prices in the year 2018-19 is estimated at 1,40,780 Billion, showing a growth rate of 6.81%. The nominal GDP for 2018-19 is estimated at ` 1,90,100 Billion, with a growth rate of 11.20% against ` 1,70,950 Billion for 2017-18. With an accelerating growth rate, India has retained its position as the third-largest start-up base in the world with over 4,750 technology start-ups. Its labour force is anticipated to touch 160-170 Million by 2020, helped by an increase in the rate of population growth; a more substantial labour force participation; and higher education enrolment; amongst other factors, according to a study by The Associated Chambers of Commerce of India (ASSOCHAM). The interim Union Budget for 2019-20, announced on 1st February 2019, focuses on supporting farmers, economically less privileged population, workers in the unorganised sector, and salaried employees, while continuing the Government of India’s focus on better physical and social infrastructure.

INDUSTRY OVERVIEW

Textile and Fashion Industry Overview

The fundamental strength of the textile industry in India is its strong production base of a wide range of fibre or yarns, from natural fibres like cotton, jute, silk and wool to synthetic or human-made fibres like polyester, viscose, nylon and acrylic.

The Textile & Garments industry in India is highly diversified with a wide range of segments ranging from products of traditional handloom, handicrafts, wool and silk products to the organised textile industry. The established textile industry is characterised by the use of capital-intensive technology for mass production of textile products and includes spinning, weaving, processing, apparel, and garment.

India’s textiles industry contributed 7% of the industry output (in value terms) of India in 2017-18 and also added 2% to the GDP of India while employing more than 45 Million people in 2017-18. Moreover, the sector contributed 15% to the export earnings of India in 2017-18.

Market Size

In 2018, the domestic Textile & Garments industry stood at US$ 140 Billion, out of which textiles worth US$100 Billion was consumed domestically. The remaining portion worth US$ 40 was exported to the

world market. Furthermore, domestic consumption was divided into household consumption at US$ 81 Billion and the technical textiles at US$ 19 Billion. While exports comprised of textile exports at US$ 22 Billion and apparel exports at US$ 18 Billion.

INDIA’S TEXTILE MARKET SIZE (US$ BILLION)

250

200

150

100

50

02009 2010 2011 2014 2015 2016 2017* 2021F

223.

0

150.

0

137.

0

108.

5

99.0

89.0

78.0

70.0

CAGR 10.14%

The increased penetration of organised retail, favourable demographics, and rising income levels are likely to drive demand for textiles. Going forward, the domestic textile industry in India is estimated to reach US$ 223 Billion by 2021F from US$ 150 Billion in November 2017, growing at a CAGR of 10.14% between 2009-21. Moreover, the new textile policy aims to achieve US$ 300 Billion worth of textile exports by 2024-25 and create an additional 35 Million jobs.

Investments

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$ 3.12 Billion from April 2000 to March 2018.

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

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

• The Government of India announced a Special Package to boost exports by US$ 31 Billion, create one crore job opportunities and attract investments worth ` 800.00 Billion (US$ 11.93 Billion) during 2018-2020. As of August 2018, it generated additional investments worth ` 253.45 Billion (US$ 3.78 Billion) and exports worth ` 57.28 Billion (US$ 854.42 Million).

MANAGEMENT DISCUSSION AND ANALYSIS

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4

Growth Drivers

Inviting

Resulting in

Growing Demand

Rising demand in exports.

Increasing demand in domestic market due to

changing taste and preference

Growing population driving demand for textiles.

Policy Support

Growing domestic and foreign investments.

Government setting up SITPs and Mega Cluster

Zones.

Increasing loans under TUF.

Increasing Investments

100% FDI in textile sector.

US$ 140 Billion of foreign investments are expected.

Government investment schemes (TCIDS and APES).

Note: TCIDS - Textile Centre Infrastructure Development Scheme, APES - Apparel Park for Exports Scheme

Source: Ministry of Textiles, Aranca Research

Government Initiatives

The Indian government has come up with several export promotion policies for the textiles sector. It has also allowed 100% FDI in the Indian textiles sector under the automatic route.

Initiatives taken by the Government of India are:

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

• As of August 2018, the Government of India has increased the basic customs duty to 20% from 10% on 501 textile products, to boost Make in India and indigenous production.

• The Government of India announced a Special Package to boost exports by US$ 31 Billion, create one crore job opportunity and attract investments worth ` 80,000 Crore (US$ 11.93 Billion) during 2018-2020. As of August 2018, it generated additional investments worth ` 25,345 Crore (US$ 3.78 Billion) and exports worth ` 57.28 Billion (US$ 854.42 Million).

• The Government of India has taken several measures including Amended Technology Up-gradation Fund Scheme (A-TUFS). The scheme is estimated to create employment for 35 Lac people and enable investments worth ` 95,000 Crore (US$ 14.17 Billion) by 2022.

• Integrated Wool Development Programme (IWDP) approved by Government of India to provide support to the wool sector starting from wool rearer to end consumer, which aims to enhance the quality and

increase the production during 2017-18 and 2019-20.

• 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.

The future for the Indian textile industry looks promising, buoyed by both healthy domestic consumption as well as export demand. With consumerism and disposable income on the rise, the retail sector has experienced 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 growth has led to a rise in demand for products creating a vast domestic market.

RETAIL INDUSTRY OVERVIEW

The Indian retail industry is one of the fastest growing in the world and is the fifth largest preferred retail destination globally. It accounts for over 10% of the country’s Gross Domestic Product (GDP) and around 8% of the employment.

Market Size

The total market size of the Indian retail industry reached US$ 672 Billion in 2017. It is forecasted to increase to US$ 1,200 Billion by 2021 and 1,750 Billion by 2026. India will become a favourable market for fashion retailers on the back of a large young adult consumer base, increasing disposable incomes and relaxed FDI norms.

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Annual Report 20195

MARKET SIZE OVER THE PAST FEW YEARS (US$ BILLION)

2000

2002

2004

2006

2008

2010

2012

2013

2014

2015

2016

2017

2021

F

2026

F1,

750

1.20

0

672

641

600

534

490

518

424

368

321

278

238

204

2,000

1,800

1,600

1,400

1,200

1,000

800

600

400

200

0

CAGR 10.14%

Source: indiaretailing.com, BMI Research, Consumer Leads report by FICCI and Deloitte - October 2018

The luxury market of India is expected to grow to US$ 30 Billion by the end of 2018 from US$ 23.8 Billion 2017 supported by the increasing exposure of international brands amongst Indian youth and higher purchasing power of the upper class in tier 2 and 3 cities, according to Assocham.

India’s population is taking to online retail in a big way. Online retail sale is forecasted to grow at a rate of 31% to reach US$ 32.70 Billion in 2018, according to eMarketer. Revenue generated from online retail is projected to grow to US$ 60 Billion by 2020. Organised retail penetration is expected to increase to 18% in 2021 from an estimated 9% in 2017. India is expected to become the world’s third-largest consumer economy, reaching US$ 400 Billion in consumption by 2025. According to the Boston Consulting Group, increasing participation from foreign and private players has given a boost to the Indian retail industry. India’s price competitiveness attracts large retail players to use it as a sourcing base. Global retailers such as Walmart, GAP, Tesco and JC Penney are increasing their sourcing from India and are moving from third-party buying offices to establishing their own wholly owned/wholly managed sourcing and buying offices.

Investment

The Indian retail trading has received Foreign Direct Investment (FDI) equity inflows totalling US$ 1.66 Billion during April 2000–March 2019, according to the Department of Industrial Policies and Promotion (DIPP).

With the rising need for consumer goods in different sectors, including consumer electronics and home appliances, many companies have invested in the Indian retail space in the past few months. India’s retail sector investments doubled to reach 1,300 Crore (US$ 180.18 Million) in 2018.

Government Initiatives

The Government of India has taken various initiatives to improve the retail industry in India. Some of them are listed below:

• The Government of India may change the Foreign Direct Investment (FDI) rules in food processing, in a bid to permit e-commerce companies and foreign retailers to sell Made in India consumer products.

• Government of India has allowed 100% Foreign Direct Investment (FDI) in the online retail of goods and services through the automatic route, thereby providing clarity on the existing businesses of e-commerce companies operating in India.

E-commerce is expanding steadily in the country. Customers have the ever-increasing choice of products at the lowest rates. E-commerce is probably creating the biggest revolution in the retail industry, and this trend would continue in the years to come. India’s e-commerce industry is forecasted to reach US$ 53 Billion by 2018. Retailers should leverage the digital retail channels (e-commerce), which would enable them to spend less money on real estate while reaching out to more customers in Tier-II and Tier-III cities.

It is projected that by 2021, traditional retail will hold a significant share of 75%, the organised retail share will reach 18%, and e-commerce retail’s share will reach 7% of the total retail market.

Nevertheless, the long-term outlook for the industry is positive, supported by rising incomes, favourable demographics, entry of foreign players, and increasing urbanisation.

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 organisational 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 continually 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 e-commerce portal, Provogue.com and e-commerce partners.

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6

FINANCIAL PERFORMANCE

Standalone:

The Company’s gross (total) income for the fiscal year ended 31st March, 2019 stood at ` 7,282.22 Lacs against ` 9,758.87 Lacs during the previous year, and the Company was able to decrease the loss before tax implication to ` 5,459.05 Lacs from ` 22,556.89 Lacs as recorded during the last year. The loss after tax implication stood at ` 6,313.54 Lacs as against a loss of ` 22,617.77 Lacs in the previous year.

Consolidated

The Consolidated gross (total) income of the Company has reduced to ` 9,095.76 Lacs from ` 12,918.52 Lacs during the previous year. The loss before tax implication decreased to ` 8,108.63 Lacs from ` 24,500.77 Lacs as recorded during the last year. The loss after tax implication minority interest stood at ` 9,244.76 Lacs as against a loss of ` 24,324.78 Lacs in the previous year.

Key Financial Ratios:

In the financial year 2017-18 the company had reported substantial financial losses, therefore net worth of the company was got eroded. Further, Corporate Insolvency Resolution Process (CIRP) was initiated against the Company vide order dated 25th July, 2018 passed by Hon’ble National Company Law Tribunal, Mumbai Bench and subsequently in the financial year 2018-19 the company has reported Net Losses and the net worth was already been eroded, hence there are no comparable figures to be given hereunder excluding the following;

FY 19 FY 18 Change%Debtors Turnover (Days)

193.94 168.28 15%

Inventory Turnover (Days)

105.54 237.10 -55%

Current Ratio (Times)

0.21 0.27 -23%

OUTLOOK

Diversification into new retail formats and channels along with having a strong brand image positions the Company as an integrated player in the growing domestic consumption story. With the Indian economy on a firm foundation and the organised retail industry surging, the Company is confident that it is well placed to take advantage of the growth opportunities in the coming years.

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. A 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 with immense opportunities. Our secure brand positioning further helps us to leverage this position.

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

Threats

Apart from ever moving fashion trends and the emergence of new e-commerce players, the 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 top market lifestyle products associated with high advertisement costs and risk related to brand management. The inventory cost related to lifestyle garments is traditionally a matter of risk. However, through effective inventory management, the Company has reduced the risk to a minimal level.

The Company has a low debt-equity ratio and is well placed to take care of its borrowings. The foreign exchange transactions of the Company are suitably covered, and there are no materially significant exchange rate risks associated with international trade.

Fashion Risk

This risk would arise through the 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. It also has a talented design team in place that is in step with the latest national and international fashion trends. Though the Company has its mitigation plans in place, fashion risk cannot be eliminated.

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Annual Report 20197

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 is compromised within the Company’s communication to its customers. The Company also gives a comprehensive 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.

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 the 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.

HUMAN RESOURCES

The domain knowledge and experience of the Company’s Promoters and management team provides it with a significant competitive advantage as it seeks to grow in the existing markets and enter new geographies. As the Company regards its human resources as

amongst its most valuable assets, it proactively reviews policies and processes by creating a work environment that encourages initiative, provides challenges and opportunities while recognising the performance and potentials of its employees. The overall employee engagement has allowed the Company to retain the top talent within it.

Some of the key highlights of the ongoing HR activities include focused and organised investment in training and development, the continuance of productivity improvement efforts and employee satisfaction surveys. The total number of employees of the Company as on 31st March, 2019 stood at 86.

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 a 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 several 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 entirety 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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8

PROVOGUE (INDIA) LIMITEDRegd. Office: 105/106 Provogue House, 1st Floor, Off New Link Road, Andheri (W), Mumbai 400 053

Ph: + 91-22-6824 9000 Email: [email protected] Website: www.provogue.comCorporate Identification Number: L18101MH1997PLC111924,

NOTICENotice is hereby given that the 23rd Annual General Meeting of the shareholders of Provogue (India) Limited (a Company under Corporate Insolvency Resolution Process vide Hon’ble National Company Law Tribunal, Mumbai Bench Order dated 25th July, 2018) will be held on Monday, 30th September, 2019, at 4:00 p.m. at Esquire Hall, The Classique Club, Behind Infinity Mall, Off 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, 2019 including audited Balance Sheet as at 31st March, 2019 and the Statement of Profit & Loss and Cash Flow Statement, Notes and Annexures thereto together with the Reports of the Directors’ and Auditors’ thereon.

2. To appoint a Director in place of Mr. Akhil Chaturvedi (DIN: 00004779), who retires by rotation and being eligible, offers himself for re-appointment.

As Special Business:

3. 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 (“The Act”) and all other applicable provisions of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification or amendments thereof, for the time being in force),the remuneration of ` 75,000 (Rupees Seventy Five Thousand Only) plus applicable taxes thereon payable to M/s. Ketki D. Visariya & Co. (Firm Registration No. 000362), Cost Accountants, Mumbai, for conducting Audit of the Cost Records maintained by the Company for the Financial Year 2019-20 be and is hereby approved.

Resolved further that the Company Secretary 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 as per direction of the Resolution Professional.”

4. To reappoint Mr. Hetal Hakani (DIN: 06878540) as an Independent Director:

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

“Resolved that pursuant to the provisions of Section 149 and 152 read with Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014 and the applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, Mr. Hetal Hakani (DIN: 06878540), who had been appointed as Independent Director and who holds office as an Independent Director up to 25th May, 2019 and being eligible, be reappointed as an Independent Director of the Company w.e.f. 26th May, 2019, not liable to retire by rotation and to hold office for a second term of 5 (five) consecutive years, i.e. up to 25th May, 2024.”

By Order of the Resolution ProfessionalFor Provogue (India) Limited

(A Company under Corporate Insolvency Resolution Process by Hon’ble NCLT, Mumbai

Bench order dated 25th July 2018)

Sd/-Date : 13.08.2019 Vishal MenonPlace: Mumbai Company Secretary

NOTES:

1. The Explanatory Statement pursuant to Section 102 of the Companies Act, 2013, and Secretarial Standard-2 issued by the institute of Company Secretaries of India, setting out material facts concerning the Special Business to be transacted at the meeting is annexed and forms part of this notice.

2. The requirement to place the matter relating to appointment of Statutory Auditors for ratification by members at every Annual General Meeting has been done away with vide notification No. S.O. 1833 (E) dated 7th May, 2018 issued by the Ministry of Corporate Affairs, Government of India. Accordingly, no resolution is proposed for ratification of appointment of M/s Ajay Shobha & Co., Chartered Accountants (ICAI Firm Registration No. 317031E), Statutory Auditors who had been appointed at the 22nd Annual General Meeting held on 29th September, 2018 to hold office from the conclusion of 22nd AGM till the conclusion of 27th AGM of the Company to be held in the year 2023.

3. IN TERMS OF PROVISIONS OF SECTION 105 OF THE COMPANIES ACT, 2013 READ WITH RULE 19 OF COMPANIES (MANAGEMENT AND ADMINISTRATION) RULES, 2014. A SHAREHOLDER ENTITLED TO ATTEND AND

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Annual Report 20199

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(s) 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 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 2010-11, 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 29th September, 2018 (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_2018.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 2018-19, 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. 31st October, 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/unpaid for a period of 7 years or more and transferred to Investor Education and Protection Fund Authority 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 forClaiming Dividend

31.03.2012 28.09.2012 29.10.201931.03.2013 30.09.2013 01.10.202031.03.2014 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 2011-12 and/or any subsequent years are requested to write to

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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/confirmation at the ensuing 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 2018-19 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 23rd August, 2019.

15. The entry to the meeting venue will be regulated by means of attendance slips, which is annexed to the Annual Report. 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 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 23rd 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 27th September, 2019 from 10.00 a.m. and ends on 29th September, 2019 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.

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23rd September, 2019 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. 23rd September, 2019, 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.

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

For Shareholders holding shares in Demat Form and Physical Form

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

l 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

l 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.

l 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.

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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

l 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.

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

l 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.

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

l 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 23rd 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 23rd 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. Akhil Chaturvedi, Whole-time DirectorDate of Birth 20th April, 1965Date of first appointment 17th November, 1997Qualification MBAShareholding of directors 28,84,330 equity sharesDirectors Inter-se relationship He is brother of Mr. Nikhil Chaturvedi and Mr. Salil Chaturvedi.Years of experience 20+No. of Board Meeting attended in FY 4Area of expertise Mr. Akhil Chaturvedi leads retail activities of the Provogue Brand, driving

future expansion plans, new product category development, sales and operating strategies and new retail product and channel initiatives.

Other public limited companies* in which directorship held

a. Acme Advertisements Private Limitedb. Millennium Accessories Limitedc. Provogue Personal Care Private Limited

Chairman/ member of Committees of Board of other Companies

Provogue (India) Limitedl Audit Committee- Memberl Stakeholders Relationship Committee – Member

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Annual Report 201913

Name of the Director Mr. Hetal Hakani, Independent DirectorDate of Birth 03rd May, 1971Date of first appointment 26th May, 2014Qualification Chemical EngineerShareholding of directors NilDirectors Inter-se relationship N.A.Years of experience 20+No. of Board Meeting attended in FY 21

Area of expertise Mr. Hetal Hakani is a business entrepreneur with expertise in manufacturing, marketing and general business development areas. He holds a degree in chemical engineering from The Bombay Institute of Technology and brings a fresh and approach and contribution to the Board. The Company benefits significantly from his advices and experience.

Other public limited companies2 in which directorship held

a. Provogue (India) Limitedb. Garbi Finvest Limited

Chairman/ member of Committees of Board of other Companies

Provogue (India) Limitedl Nomination and Remuneration Committee - Chairmanl Audit Committee- Memberl CSR Committee-Member

1 Hon’ble National Company Law Tribunal, Mumbai Bench, Mumbai (“NCLT”), vide its order dated 25th July, 2018 had admitted the reference for initiation of Corporate Insolvency Resolution Process (“CIRP”) in respect of the Company under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) and pursuant to the said order, Mr. Jitendrakumar Rambaran Yadav (IP Registration No IBBI/IPA-003/IP-N00022/2017-18/10169) had been appointed as an Interim Resolution Professional (“IRP”) from the date of said order to manage affairs, business and assets of the Company.

The members of Committee of Creditors in the first meeting held on 24th August, 2018 approved the appointment of Mr. Amit Gupta (IBBI Registration No.: IBBI/IPA-001/IP-P00016/2016-17/10040) as the Resolution Professional (“RP”) replacing Mr. Jitendra Kumar Yadav, IRP. Further, vide order dated 26th September, 2018 the Hon’ble NCLT, Mumbai Bench approved the appointment of Mr. Amit Gupta (IBBI Registration No.: IBBI/IPA-001/IP-P00016/2016-17/10040) as the Resolution Professional of Provogue (India) Limited which was uploaded on IBBI website on 4th October, 2018. The Resolution Professional took charge of the operations of the Company from 4th October, 2018 itself. However, the certified true copy of the Hon’ble NCLT order dated 26th September, 2018 was received on 11th October, 2018.

As per terms of Section 23 of Code, the management and operations of the Company are being managed by Resolution Professional on a Going Concern Basis.

2 The details of Directorships as on 31st March, 2019, 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).

By Order of the Resolution Professional

For Provogue (India) Limited(A Company under Corporate Insolvency Resolution Process by

Hon’ble NCLT, Mumbai Bench order dated 25th July, 2018)

Sd/-Date : 13.08.2019 Vishal MenonPlace: Mumbai Company Secretary

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

Item No 3

The Board has approved the appointment of M/s. Ketki D. Visariya & Co. (Firm Registration No. 000362), Cost Accountants in Whole-time Practice as Cost Auditor of the Company for the financial year ending on 31st March, 2020, 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. 3 of the Notice for ratification of the remuneration payable to the Cost Auditors.

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

Item No 4:

Mr. Hetal Hakani (DIN: 06878540) is an independent director of the Company and holds his office as an independent director up to 25th May, 2019 (first term).

Pursuant to provisions of Section 149(10) of the Companies Act 2013, an independent director shall hold office for a term up to five consecutive years on the Board of a Company, but he shall be eligible for re-appointment by passing a special resolution in General Meeting of members of the Company.

The Board based on the performance evaluation, is of view that given his background and experience and the valuable contribution made by him during his tenure, the continued association of Mr. Hetal Hakani would be beneficial to the Company. Accordingly, the Board recommends to reappoint Mr. Hetal Hakani as an independent director of the Company, not liable to retire by rotation, for a second term of 5 (five) consecutive years on the Board of the Company with effect from 26th May, 2019 to 25th May, 2024 by passing a SPECIAL RESOLTION.

By Order of the Resolution Professional

For Provogue (India) Limited(A Company under Corporate Insolvency Resolution Process by

Hon’ble NCLT, Mumbai Bench order dated 25th July, 2018)

Sd/-Date : 13.08.2019 Vishal MenonPlace: Mumbai Company Secretary

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Annual Report 201915

ROUTE MAP TO THE VENUE OF THE AGM

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To

The Members

Provogue (India) Ltd

Your Directors have pleasure in presenting the 23rd Annual Report on the business and operations of your Company for the year ended 31st March, 2019.

The members are hereby informed that the Company is undergoing Corporate Insolvency Resolution Process (“CIRP”) under section 7 of the Insolvency & Bankruptcy Code, 2016 (‘Code’). Andhra Bank, the Financial Creditor of Provogue (India) Limited had filed an application with Hon’ble National Company Law Tribunal, Mumbai Bench (“NCLT”) for Initiation of Corporate Insolvency Resolution Process. The application was admitted by the Hon’ble NCLT on 25th July, 2018 and pursuant to the said order Mr. Jitendra Kumar Yadav was appointed as the Interim Resolution Professional (“IRP”) in the said matter.

The members of COC in the first meeting held on 24th August, 2018 approved the appointment of Mr. Amit Gupta (IBBI Registration No.: IBBI/IPA-001/IP-P00016/2016-17/10040) as the Resolution Professional

(“RP”) replacing Mr. Jitendra Kumar Yadav, IRP. Further, vide order dated 26th September, 2018 the Hon’ble NCLT, Mumbai Bench approved the appointment of Mr. Amit Gupta (IBBI Registration No.: IBBI/IPA-001/IP-P00016/2016-17/10040) as the Resolution Professional of Provogue (India) Limited which was uploaded on IBBI website on 4th October, 2018. The Resolution Professional took charge of the operations of the Company from 4th October, 2018 itself. However, the certified true copy of the Hon’ble NCLT order dated 26th September, 2018 was received on 11th October, 2018.

As per terms of Section 23 of Code, the management and operations of the Company are being managed by Resolution Professional on a Going Concern Basis.

This Report was discussed in a meeting held with the Key Management persons and thereafter taken on record by the Resolution Professional. Accordingly, Report for the year ended 31st March, 2019 is as under.

FINANCIAL RESULTS & OPERATIONS

(` in Lacs)

Particulars Standalone Consolidated

31.03.2019 31.03.2018 31.03.2019 31.03.2018

Income from Operations 7,260.98 9,177.80 8,975.33 12,685.03

Add: Other Income 21.24 581.05 120.43 233.49

Total Income 7,282.22 9,758.85 9,095.76 12,918.52

Less: Total Expenditure 11,602.48 25,341.37 13,815.80 29,450.68

Less : Exceptional item 1,138.79 6,974.38 3,388.79 7,968.61

Profit/ (loss) before Tax (5,459.05) (22,556.89) (8,108.63) (24,500.77)

Less: Deferred Tax and Taxes 854.50 60.89 1400.96 217.13

Profit/ (loss) after Tax for the year (6,313.54) (22,617.77) (9,509.59) (24,717.90)

Less: Minority Interest - - - -

Profit/ (loss) after Tax for the year (6,313.54) (22,617.77) (9,509.59) (24,717.90)

STATE OF COMPANY’S AFFAIRS / FINANCIAL PERFORMANCE

Standalone:

The Company’s gross (total) income for the financial year ended 31st March, 2019 stood at ` 7,282.22 Lacs against ` 9,758.85 Lacs during the previous year and the Company was able to decrease the loss before tax implication to ` 5,459.05Lacs from ` 22,556.89 Lacs as recorded during previous year. The loss after tax implication stood at ` 6,313.54 Lacs as against a loss of ` 22,617.77 Lacs in the previous year.

Consolidated:

The Consolidated gross (total) income of the Company has reduced to ` 9,095.76 Lacs from ` 12,918.52 Lacs during the previous year. The loss before tax implication decreased to ` 8,108.63 Lacs from ` 24,500.77 Lacs as recorded during previous year. The loss after tax implication was stood at ` 9,509.59 Lacs as against a loss of ` 24,717.90 Lacs in the previous year.

DIVIDEND & TRANSFER TO RESERVES

In view of the Company’s carried forward and current losses your company does not recommend any

DIRECTORS’ REPORT

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Annual Report 201917

dividend for the year under review. Hence, no amount was transferred to the general reserves.

SHARE CAPITAL

The paid-up equity share capital of your company stood at ` 2,333.82 Lacs consisting of 23,33,81,827 equity shares of ` 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, 2019, 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 2019-20 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 review.

SUBSIDIARY, JOINT VENTURE COMPANIES AND ASSOCIATES COMPANIES:

As on 31st March, 2019, the Company has 10 subsidiaries including 1 Step-down subsidiary, 1 foreign subsidiary 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

Associate Companies:

i. ProSFL Private Limited (Joint venture)

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

The Resolution Professional (“RP”) 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 Company’s internal financial control systems are commensurate with the nature of its business and the size and complexity of its operations. The Board had 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. During the year under report, the Company has, in all material respects, an adequate internal financial control system over financial reporting and the same are operating effectively.

SIGNIFICANT AND MATERIAL ORDERS

1. Pursuant to an application made by Andhra Bank under Section 7 of the Code the Hon’ble NCLT vide its order dated 25th July, 2018, initiated Corporate Insolvency Resolution Process of the Company

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in accordance with the provisions of the Code. Pursuant to the said order Mr. Jitendra Kumar Yadav was appointed as the Interim Resolution Professional (“IRP”) in the said matter.

The members of COC in the first meeting held on 24th August, 2018 approved the appointment of Mr. Amit Gupta (IBBI Registration No.: IBBI/IPA-001/IP-P00016/2016-17/10040) as the Resolution Professional (“RP”) replacing Mr. Jitendra Kumar Yadav, IRP. Further, vide order dated 26th September, 2018 the Hon’ble NCLT, Mumbai Bench approved the appointment of Mr. Amit Gupta (IBBI Registration No.: IBBI/IPA-001/IP-P00016/2016-17/10040) as the Resolution Professional of Provogue (India) Limited which was uploaded on IBBI website on 4th October, 2018. The Resolution Professional took charge of the operations of the Company from 4th October, 2018 itself. However, the certified true copy of the Hon’ble NCLT order dated 26th September, 2018 was received on 11th October, 2018.

In terms of Section 23 of the Code read with Section 25 of the Code, the powers of the Board of Directors stand suspended and the management of the affairs of the Company vests in the Resolution Professional of the Company i.e. Mr. Amit Gupta.

2. Further, vide order dated 22nd January, 2019 and 10th June, 2019 the Hon’ble NCLT, Mumbai Bench granted an extension of CIRP period by a further period of 90 days and an exclusion of 47 days respectively. Therefore, the last date for completion of CIRP period was 10th June, 2019.

3. Further, during the CIRP period the Resolution Professional received two Resolution Plans of which one of the Resolution Plan put forth for voting was not voted in favour by the Committee of Creditors. Hence, the RP filed an application before the Hon’ble NCLT, Mumbai Bench for the Liquidation of the Company. The said Application is pending adjudication before the Hon’ble NCLT, Mumbai Bench. The outcome of the same will have a bearing on the Company’s future operations.

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

The CIRP was initiated against the Company on 25th July, 2018 and pursuant to Section 17 of the Code, the powers of the Board of Directors of the Company stood suspended, and such powers are vested with the Resolution Professional, Mr. Amit Gupta.

l Resignation, subsequent re-appointment and retirement by rotation during the CIRP period:

During the year, Mr. Dinesh Arya and Ms. Gauri Pote, Non Executive Independent Directors of the Company have resigned from the Board with effect from 30th March, 2019. The Board places on record its sincere appreciation for the valuable service rendered by them during their entire tenure.

Pursuant to the provisions of section 152 of the Companies Act, 2013, the office of Mr. Akhil Chaturvedi, (DIN: 00004779) 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.

The first term of office of Mr. Hetal Hakani (DIN : 06878540), an Independent Director has expired on 25th May, 2019. The Board recommends his re-appointment for a second term of five consecutive year i.e. upto 25th May, 2024 for the approval of members in the forthcoming annual general meeting of the Company.

A brief resume along with other details about Mr. Akhil Chaturvedi and Mr. Hetal Hakani 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.

l Declaration by Independent Directors:

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

l Key Managerial Personnel:

There has been no change in Key Managerial Personnel during the financial year 2018-19. As on 31st March, 2019, the following are the Key Managerial Personnel of the Company

Name Designation

Mr. Nikhil Chaturvedi Managing Director

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

Mr. Vishant Shetty1 Company Secretary and Compliance Officer

1 Mr. Vishant Shetty, Company Secretary and Compliance Officer of the Company has resigned w.e.f. 17th April, 2019 and Mr. Vishal Menon has been appointed as Company Secretary and Compliance Officer of the Company at his place w.e.f. 18th April, 2019.

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l Board evaluation:

In terms of SEBI (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2018, a company undergoing Corporate Insolvency process (“CIRP”) is not required to comply with the requirement of conducting evaluation of the independent directors. Therefore, subsequent to commencement of the CIRP process the evaluation of the independent directors of the Company was not required to be carried out under the provisions of the Regulation 17(10) of SEBI LODR Regulations. Further, in accordance with Rule 8(4) of Companies (Accounts) Rules, 2014, the board of directors of a company are required to evaluate its own performance and that of its committees and individual directors. However, pursuant to Section 17 of the Code on the commencement of the CIRP process of the Company, the powers of the board of directors stand suspended and are exercised by the Interim Resolution Professional/ Resolution Professional, as the case may be, in accordance with the provisions of the Code.

l 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 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:

Pursuant to Section 134(5) of the Companies Act, 2013, based on internal financial controls, work performed by the internal, statutory, cost and secretarial auditors and external agencies, the reviews performed by the management and with the concurrence of the Audit Committee prior to commencement of CIRP and subsequently of the RP, that for the year ended 31st March, 2019, the confirmation is hereby given for the Company having:

a. followed in the preparation of the annual accounts for the year ended 31st March, 2019, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed along with proper explanation relating to material departures, if any;

b. 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 31st March, 2019 and of the loss of the Company for the year ended on that date;

c. 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;

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

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

DETAILS OF FRAUDS REPORTED BY AUDITORS OTHER THAN REPORTABLE TO THE CENTRAL GOVERNMENT:

No fraud/ misconduct was detected at the time of statutory audit by the auditors of the Company for the financial year ended 31st March, 2019.

COMMITTEES OF THE BOARD:

The Board of Directors of the Company has the following committees as on 31st March, 2019;

1. Audit Committee;

2. Nomination and Remuneration Committee;

3. Stakeholders Relationship Committee; and

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:

The members of the Company in their Annual General Meeting held on 29th September, 2018, appointed M/s Ajay Shobha & Co, Chartered Accountants, (Firm Reg. No. 317031E), as Statutory Auditor of the Company for the period of five financial years from 2017-2018 to 2022-2023 to hold the office from 22nd Annual General

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Meeting till the conclusion of 27th Annual General Meeting of the Company.

However, the Ministry of Corporate Affairs vide its notification S.O. 1833(E) dated 7th May, 2018 notified the amendment in section 139 of the Companies Act 2013, pursuant to which the appointment of Statutory Auditors is not required to be ratified by the members every year during the tenure of Statutory Auditors once approved by the members in their Annual General Meeting.

The observations and comments given by the Auditors in their report read together with notes to Accounts are self explanatory and hence do not require any further comments under section 134 (3) (f) of the Companies Act, 2013.

Auditors’ Observation 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 auditor’s qualification on standalone and consolidated financial and management response thereto are as under:

a. Standalone financials: The Company has a financial involvement aggregating ` 11,256.31 Lacs via investments I loans in various subsidiaries I step-down subsidiaries I Joint Venture. These Subsidiaries have made heavy losses and have uncertainity regards to realisation of assets of subsidiaries and the net worth of few subsidiaries have substantially eroded.

b. Consolidated financials: The Company has a financial involvement aggregating ` 4,814.50 Lacs via investments I loans in various subsidiaries I step-down subsidiaries I Joint Venture. These Subsidiaries have made heavy losses and have uncertainity regards to realisation of assets of subsidiaries and the net worth of few subsidiaries have substantially eroded.

Management response: The Company is in Corporate Insolvency Resolution Process to revamp its business in the Group, accordingly no provision is made against the aforesaid amounts at this stage.

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 for the financial year ended 31st March, 2019. The Secretarial Auditor’s Report is attached to this report as ‘Annexure 2’. The Secretarial Audit Report is self explanatory and thus does not require any further comments.

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 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 2019-20. 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, 2018 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 31st March, 2019 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

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Annual Report 201921

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 Lacs)

Particulars 2018-19 2017-18

Foreign Exchange Earnings 3,487.67 4,933.15

Foreign Exchange outgo - 4.41

DISCLOSURES UNDER COMPANIES ACT 2013:

l 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.

l 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.

l 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:

Committee Name

Composition of the Committee

Audit Committee

1. Mr. Dinesh Arya, Chairman (Till 30th March, 2019)

2. Mr. Hetal Hakani, Member

3. Mr. Akhil Chaturvedi, Member

Nomination & Remuneration Committee

1. Mr. Hetal Hakani, Chairman

2. Mr. Dinesh Arya, Member (Till 30th March, 2019)

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

l 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.

l 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.

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l 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.

l 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.

l Transfer to Reserves:

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

l Material changes and commitments:

There were no material changes and commitments which adversely affected the financial position of the Company after the end of Financial Year to the date of report except the Hon’ble NCLT, Mumbai Bench order(s) related to CIRP Process issued from time to time.

l Corporate Social Responsibility:

There has been no change in constitution of the Corporate Social Responsibility Committee as on 31st March, 2019. 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.

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 Services (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, as amended from time to time, 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 ` 1,44,155/-, in respect of the financial year 2010-11 was transferred to the IEPF on 21st November, 2018. The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 29th September, 2018 (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 2011-12 must be claimed by the concerned shareholders on or before 29th October, 2019, 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 2010-11. Further dividend which remains unclaimed for the last 7 years since 2011-12 must be claimed by the concerned shareholders on or before 29th October, 2019 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 29th September, 2018 (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

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Annual Report 201923

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 Directors

Sd/- Sd/- Sd/-Amit Gupta Nikhil Chaturvedi Deep GuptaResolution Professional Managing Director Whole-time DirectorIBBI Registration No.: IBBI/IPA-001/IP-P00016/2016-17/10040

DIN : 00004983 DIN : 00004788

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ANNEXURE 1

REMUNERATION POLICYPreamble

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 endeavour 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

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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.

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.

………………..

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Annexure 2

FORM NO. MR-3SECRETARIAL AUDIT REPORTFOR FINANCIAL YEAR ENDED ON 31st MARCH, 2019

[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]

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, 2019, 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, 2019, as per the provisions of:

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

II. The Securities Contracts (Regulation) Act, 1956 (“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. Since, the Company is not carrying out any manufacturing activity and prominently in trading business, no environmental laws applicable on the Company could be identified by the management.

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

• The Company’s credit facilities are classified as sub-standard (Non Performing Assets) as per RBI guideline and the lenders have filed a petition under Insolvency and Bankruptcy Code, 2016 (IBC) with the Hon’ble National Company Law Tribunal, Mumbai Bench (NCLT). This indicates existence of a

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material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern.

• The Company has not made any provision with regard to impairment of its financial involvement aggregating to ` 11,256.31 Lacs in its subsidiaries and joint venture companies and, contingent service tax liability of 279.47 Lacs under litigation. This may have material impact on the financial statements of the Company.

• There was delay of one day in publishing financial results of quarter ended June, 2018. We were informed that delay caused due to press holiday on 15th August, 2018 being national holiday.

• There was delay in filing of shareholding pattern for quarter ended March, 2018 for which Company incurred a penalty levied by Stock Exchanges.

• The Corporate Insolvency Resolution Process (CIRP) was initiated against the Company vide order dated 25th July, 2018 passed by Hon’ble National Company Law Tribunal, Mumbai Bench. There was delay in dissemination of certain information to the Stock Exchanges as required under Para A of Part A of Schedule III read with Reg. 30(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. However the same was disseminated later to the Stock Exchanges vide letter dated 12th June, 2019 except brief particulars of invitation of resolution plans due to confidentiality reasons.

We further report that:

Prior to the commencement of CIRP, the Board of Directors of the Company was 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 prior to the commencement of CIRP.

Prior to the commencement of CIRP, adequate notice is given to all Directors to schedule the Board Meeting, 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 during the audit period,:-

1. The Hon’ble NCLT, Mumbai Bench vide order dated 25th July, 2018 has admitted the initiation of Corporate Insolvency Resolution Process under section 7 of the Insolvency and Bankruptcy Code 2016 (IBC). Consequently, as per section 17 of the IBC, 2016, the powers of the Board of Directors (including any committee thereof) of the Company were suspended and such powers vested with Mr. Jitendra Kumar Yadav Interim Resolution Professional (‘IRP’) w.e.f 1st August, 2018. However, the Hon’ble NCLT Mumbai Bench with the approval of COC has approved the appointment of the CA Amit Gupta as resolution professional vide order dated 26th September, 2018 in place of Mr. Jitendra Kumar Yadav. Further, the Resolution Professional (‘RP’) has invited for Expression of Interests on 23rd October, 2018.The Resolution Professional filed an application for extension of Corporate Insolvency Resolution Process (CIRP) by 90 days with effect from 21st January, 2019 with the approval of Committee of Creditors following which the this Hon’ble NCLT, Mumbai Bench extended the Insolvency Resolution by 90 days from 22nd January, 2019 to 22nd April, 2019. There were 10(Ten) COC meetings held during the reporting period.

For HS AssociatesCompany Secretaries

Sd/-Mr. Hemant S. Shetye

Date: 13.08.2019 PartnerPlace: Mumbai FCS No: 2827

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.

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28

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 applicable laws, rules, regulations, standards is the responsibility of Management. Any fraud, error, misstatements arising, if any would be the responsibility of the Board and 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/-Mr. Hemant S. Shetye

Date: 13.08.2019 PartnerPlace: Mumbai FCS No: 2827

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Annual Report 201929

ANNEXURE 3

FORM NO. MGT 9

EXTRACT OF ANNUAL RETURNas on financial year ended on 31.03.2019

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 6823 9000/6823 9071

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 - 400 083 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 99.71%

III PARTICULARS OF HOLDING, SUBSIDIARY & ASSOCIATE COMPANIES

SL. No.

Name & Address of the Company

CIN/GLN HOLDING/SUBSIDIARY/ASSOCIATE

% OF SHARES

HELD

APPLICABLE SECTION

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.

LtdU74999MH2006PTC165054 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 Standard Mall Pvt Ltd* U45200MH2007PTC174152 Subsidiary 100% 2(87)10 Sporting and Outdoor Ad

Agency Pvt Ltd.U74999MH2007PTC171265 Associate

Company47.50% 2(6)

11 Elite Team (HK) Limited FOREIGN COMPANY Foreign Subsidiary

100% 2(87)

12 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)

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30

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 3,46,27,659 0 3,46,27,659 14.84 3,46,23,720 0 3,46,23,720 14.84 0.00b) Central Govt. or State Govt. 0 0 0 0 0 0 0 0 0.00c) 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 1,25,39,640 0 1,25,39,640 5.37 1,25,39,640 0 1,25,39,640 5.37 0.00SUB TOTAL:(A)(1) 4,71,67,299 0 4,71,67,299 20.21 4,71,63,360 0 4,71,63,360 20.21 0.00(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)*

4,71,67,299 0 4,71,67,299 20.21 4,71,63,360 0 4,71,63,360 20.21 0.00

B. PUBLIC SHAREHOLDING(1) Institutionsa) Mutual Funds 0 0 0 0.00 0 0 0 0 0.00b) Banks/FI 11,99,61,238 0 11,99,61,238 51.40 11,98,33,684 0 11,98,33,684 51.35 -0.05c) Central 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 57,12,435 0 57,12,435 2.45 57,12,435 0 57,12,435 2.45 0.00h) Foreign Venture Capital Funds 0 0 0 0.00 0 0 0 0 0.00i) Others (specify) 0 0 0 0.00 0 0 0 0.00 0.00 Central Government/ State

Government(s)/ President of India

0 0 0 0 0 0 0 0 0

SUB TOTAL (B)(1): 12,56,73,673 0 12,56,73,673 53.85 12,55,46,119 0 12,55,46,119 53.79 -0.03(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 Lac

29359147 63137 29422284 12.61 31040204 57,887 3,10,98,091 13.32 0.72

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

9323460 0 9323460 3.99 10409542 0 1,04,09,542 4.46 0.47

c) Others (specify) IEPF1 40,973 0 40973 0.02 98,891 0 98891 0.04 Hindu Undivided Family 1269716 0 1269716 0.54 1471472 0 1471472 0.63 0.09 Foreign Companies 6000000 0 6000000 2.57 6000000 0 6000000 2.57 0.00 Foreign Nationals 0 0 0 0.00 0 0 0 0.00 0.00 Non Resident Indians (Non

Repat)264410 0 264410 0.11 166963 0 166963 0.07 -0.04

Non Resident Indians (Repat) 1752027 0 1752027 0.75 1748158 0 1748158 0.75 0.00 Clearing Member 2135401 0 2135401 0.91 1087382 0 1087382 0.47 -0.45 NBFCs registered with RBI 0 0 0 0.00 6980 0 6980 0.00 0.00 Bodies Corporate 10399884 0 10399884 4.46 8584869 0 8584869 3.68 -0.78SUB TOTAL (B)(2): 6,05,45,018 63,137 6,06,08,155 25.97 6,06,14,461 57,887 6,06,72,348 26.00 0.78Total Public Shareholding (B)= (B)(1)+(B)(2)

18,62,18,691 63,137 18,62,81,828 79.82 18,61,60,580 57,887 18,62,18,467 79.79 0.75

C. Shares held by Custodian for GDRs & ADRs

0 0 0 0.00 0 0 0 0 0.00

Grand Total (A+B+C) 23,33,18,690 63,137 23,33,81,827 100.00 23,33,23,940 57,887 23,33,81,827 100.00 0.75

1Shares, 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

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Annual Report 201931

(ii) Share Holding of Promoters

Sl. No.

Shareholders Name Shareholding at the beginning of the year

(01.04.2018)

Shareholding at the end of the year

(31.03.2019)

% 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 80,85,806 3.46 0.00 80,85,806 3.46 0.00 0.00

2 Mr. Salil Anupendra Chaturvedi 1,02,95,135 4.41 0.00 1,02,94,816 4.41 0.00 0.00

3 Mr. Rakesh Rawat 41,11,750 1.76 0.00 41,11,750 1.76 0.00 0.00

4 Mr. Deep Subash Gupta 56,73,445 2.43 0.00 56,73,445 2.43 0.00 0.00

5 Mr. Nigam Patel 27,13,222 1.16 0.00 27,13,222 1.16 0.00 0.00

6 Mr. Akhil Anupendra Chaturvedi 28,84,330 1.24 0.00 28,84,330 1.24 0.00 0.00

7 Ms. Anisha Chaturvedi 1,66,260 0.07 0.00 5,83,560 0.25 0.00 0.18

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

9 Ms. Vandana Vaidh 3,620 0.00 0.00 0 0.00 0.00 0.00

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

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

12 Ms. Bala Chhabra 25,000 0.01 0.00 0 0.00 0.00 -0.01

13 Mr. Sushant Chhabra 67,300 0.03 0.00 0 0.00 0.00 -0.0314 Mr. Virendra Chhabra 3,92,300 0.17 0.00 0 0.00 0.00 -0.1715 Meerut Festival City LLP 14,99,640 0.64 0.00 14,99,640 0.64 0.00 0.00

16 Floro Mercantile LLP 62,40,000 2.67 0.00 62,40,000 2.67 0.00 0.00

17 Topspeed Trading Company LLP 48,00,000 2.06 0.00 48,00,000 2.06 0.00 0.00

18 Mr. Subhash Gupta 5,685 0.00 0.00 5,685 0.00 0.00 0.0019 Mrs. Santosh Subhash Gupta 10,000 0.00 0.00 10,000 0.00 0.00 0.00

20 Ms. Ruchi Chhabra 67,300 0.03 0.00 1,34,600 0.06 0.00 0.03

Total 4,71,67,299 20.21 0.00 4,71,63,360 20.15 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

company1 Mrs. Bala Chhabra

At the beginning of the year 25,000 0.01% 25,000 0.01%Transfer on 02.06.2018 -25,000 -0.01% 0 0.00%At the end of the year - 0 0.00%

2 Mrs. Vandana Vaidh At the beginning of the year 3,620 0.00% 3,620 0.00%Transfer on 30.06.2018 -3,620 0.00% 0 0.00%At the end of the year - 0 0.00%

3 Mr. V K ChhabraAt the beginning of the year 3,92,300 0.17% 3,92,300 0.17%Transfer on 31.05.2018 -3,92,300 -0.17% 0 0.00%At the end of the year - 0 0.00%

4 Mr. Sushant ChhabraAt the beginning of the year 67,300 0.03% 67,300 0.03%Transfer on 19.07.2018 -67,300 -0.03% 0 0.00%At the end of the year - 0 0.00%

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32

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

company5 Mr. Anisha Chaturvedi

At the beginning of the year 1,66,260 0.07% 1,66,260 0.07%Transfer on 31.05.2018 3,92,300 0.17% 5,58,560 0.24%Transfer on 02.06.2018 25,000 0.01% 5,83,560 0.25%At the end of the year - 5,58,560 0.24%

6 Mrs. Ruchi ChhabraAt the beginning of the year 67,300 0.03% 67,300 0.03%Transfer on 19.07.2018 67,300 0.03% 1,34,600 0.06%At the end of the year - 1,34,600 0.06%

7 Mr. Salil ChaturvediAt the beginning of the year 1,02,95,135 4.41% 1,02,95,135 4.41%Transfer on 13.07.2018 319 0.00% 1,02,94,816 4.41%At the end of the year - 1,02,94,816 4.41%

Note : Except above there is no change in shareholding of remaining Promoter & Promoter Group

(iv) Shareholding Pattern of top ten Shareholders (other than Direcors, 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

No of shares % of total shares of the

company

1 Andhra Bank*At the beginning of the year 4,64,29,315 19.89 4,64,29,315 19.89%Transfer on 06.04.2018 (4,64,29,315) -19.89 0 0.00%Transfer on 20.04.2018 4,64,29,315 19.89 4,64,29,315 19.89%At the end of the year 4,64,29,315 19.89%

2 Bank Of India*At the beginning of the year 2,01,29,375 8.63 2,01,29,375 8.63%Transfer on 06.04.2018 (2,01,29,375) -8.63 -2,01,29,375 -8.63%Transfer on 20.04.2018 2,01,29,375 8.63 0 0.00%At the end of the year 0 0.00%

3 Corporation Bank* At the beginning of the year 1,97,91,443 8.48 1,97,91,443 8.48%Transfer on 06.04.2018 (1,97,91,443) -8.48 0 0.00%Transfer on 20.04.2018 1,97,91,443 8.48 1,97,91,443 8.48%Transfer on 22.12.2018 (66,500) -0.03 1,97,24,943 8.45%Transfer on 08.03.2019 (10,000) 0.00 1,97,14,943 8.45%Transfer on 22.03.2019 (51,054) -0.02 1,96,63,889 8.43%At the end of the year 1,96,63,889 8.43%

4 Central Bank Of India*At the beginning of the year 1,60,08,968 6.86 1,60,08,968 6.86%Transfer on 06.04.2018 (1,60,08,968) -6.86 0 0.00%Transfer on 20.04.2018 1,60,08,968 6.86 1,60,08,968 6.86%At the end of the year 1,60,08,968 6.86%

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Annual Report 201933

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

No of shares % of total shares of the

company

5 Punjab National Bank* At the beginning of the year 1,29,62,512 5.55 1,29,62,512 5.55%Transfer on 06.04.2018 (1,29,62,512) -5.55 0 0.00%Transfer on 20.04.2018 1,29,62,512 5.55 1,29,62,512 5.55%At the end of the year 1,29,62,512 5.55%

6 Nailsfield Limited (FPI & FII Holding)At the beginning of the year 1,14,15,000 4.89 1,14,15,000 4.89%Transfer on 06.04.2018 (1,14,15,000) -4.89 0 0.00%Transfer on 20.04.2018 1,14,15,000 4.89 1,14,15,000 4.89%Transfer on 18.05.2018 -54,15,000 -2.32 60,00,000 2.57%At the end of the year 60,00,000 2.57%

7 Intu India (Portfolio) LimitedAt the beginning of the year 0 0.00 0 4.89%Transfer on 18.05.2018 54,15,000 2.32 54,15,000 2.32%At the end of the year 54,15,000 2.32%

8 Unique Estates Development Company LtdAt the beginning of the year 24,89,600 1.07 24,89,600 1.0706.04.2018 -24,89,600 -1.07 0 0.00%20.04.2018 24,89,600 1.07 24,89,600 1.07%At the end of the year 24,89,600 1.07%

9 Indusind Bank Limited Treasury Dept*At the beginning of the year 21,55,605 0.92 21,55,605 0.92%06.04.2018 -21,55,605 -0.92 0 0.00%20.04.2018 21,55,605 0.92 21,55,605 0.92%At the end of the year 21,55,605 0.92%

10 Small Industries Development Bank of India*At the beginning of the year 15,47,514 0.66 15,47,514 0.66%06.04.2018 -15,47,514 -0.66 0 0.00%20.04.2018 15,47,514 0.66 15,47,514 0.66%At the end of the year 15,47,514 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 : Shareholding is consolidated based on permanent account number (PAN) of the shareholder.

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34

(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

No. of shares % of total shares of the

company

No of shares % of total shares of the

company1 Mr. Nikhil Chaturvedi

Managing DirectorAt the beginning of the year 80,85,806 7.07% 80,85,806 3.46%At the end of the year - 80,85,806 3.46%

2 Mr. Akhil ChaturvediWhole-time DirectorAt the beginning of the year 28,84,330 2.52% 28,84,330 1.24%At the end of the year - 28,84,330 1.24%

3 Mr. Salil ChaturvediNon-Executive DirectorAt the beginning of the year 1,02,95,135 9.00% 1,02,95,135 4.41%At the end of the year - 1,02,94,816 4.41%

4 Mr. Deep GuptaWhole-time Director & CFOAt the beginning of the year 56,73,445 4.96% 56,73,445 2.43%At the end of the year - 56,73,445 2.43%

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

V. INDEBTEDNESS

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

Secured Loans

excluding deposits

Unsecured Loans

Deposits Total Indebtedness

Indebtness at the beginning of the financial yeari) Principal Amount 17,809.93 17,809.93 ii) Interest due but not paid - iii) Interest accrued but not dueTotal (i+ii+iii) 17,809.93 17,809.93 Change in Indebtedness during the financial year - Additions 10,408.15 10,408.15 ReductionNet Change 10,408.15 10,408.15 Indebtedness at the end of the financial yeari) Principal Amount 15,853.70 15,853.70 ii) Interest due but not paid 12,364.38 12,364.38 iii) Interest accrued but not dueTotal (i+ii+iii) 28,218.08 28,218.08

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Annual Report 201935

VI REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

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

(` in Lacs)Sl. No.

Particulars of Remuneration Name of the MD/WTD/Manager

Total Amount

Mr. Nikhil Chaturvedi, Managing Director

Mr. Deep Gupta,

WTD & CFO

Mr. Salil Chaturvedi,

Non-Executive Director

1 Gross salary(a) Salary as per provisions contained

in section 17(1) of the Income Tax. 1961.

Nil 56.34 Nil

(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) Reimbursement of Expenses 3.502 Stock option - - - -3 Sweat Equity - - - -4 Commission - - - -

as % of profit - - - -others (specify) - - - -

5 Others, please specify - - - -Total (A) - 59.84 - -Ceiling as per the Act Within the prescribed limits

B. Remuneration to other directors:

(` in Lacs)Sl. No.

Particulars of Remuneration Name of the Directors Total Amount

paid/payable

Hetal Vasant Hakani

Dinesh Arya

Gauri Sanjay Pote

1 Independent Directors(a) Fee for attending board /

committee meetings0.50 0.50 0.20 1.20

(b) Commission - - - - - -(c) Others, please specify - - - - - -(d) Reimbursement of ExpensesTotal (1) 0.50 0.50 0.20 - - 1.20

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 - - - - - -Overall Cieling as per the Act. Within the prescribed limits

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36

C. Remuneration to Key Managerial Personnel other than MD/MANAGER/WTD

(` in Lacs)Sl. No.

Particulars of Remuneration Key Managerial Personnel TotalCFO* Company

Secretary1 Gross Salary 56.34 7.04 63.38

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

(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) Reimbursement of Expenses 3.50 3.50

2 Stock Option3 Sweat Equity4 Commission

as % of profitothers, specify

5 Others, please specifyTotal 59.84 7.04 66.88

* 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.

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)

Appeall made if any (give details)

A. COMPANY Penalty - - - - - Punishment - - - - - Compounding - - - - -B. DIRECTORS Penalty - - - - - Punishment - - - - - Compounding - - - - -C. OTHER OFFICERS IN DEFAULT Penalty - - - - - Punishment - - - - - Compounding - - - - -

For and on behalf of Board of Director

Sd/-Amit Gupta

Date: 13.08.2019 Resolution ProfessionalPlace: Mumbai IBBI Registration No.: IBBI/IPA-001/IP-P00016/2016-17/10040

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Annual Report 201937

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term

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is t

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from

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ulat

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23 o

f SE

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LOD

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ntity

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olu

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lace

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Page 40: BOARD OF DIRECTORScorporate.provogue.com/media/provogue/pdf/annual... · Indian retail space in the past few months. India’s retail sector investments doubled to reach ` 1,300 Crore

38

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Page 41: BOARD OF DIRECTORScorporate.provogue.com/media/provogue/pdf/annual... · Indian retail space in the past few months. India’s retail sector investments doubled to reach ` 1,300 Crore

Annual Report 201939

CE

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40

ANNEXURE 6

PARTICULARS OF EMPLOYEES AND RELATED DETAILS(Pursuant to section 197(2) 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 19.23:1

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

Mr. Nikhil Chaturvedi, MD NA

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

Mr. Deep Gupta, WTD & CFO No increase

Mr. Vishant Shetty, CS 24.14%

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

There was 37.55% increase 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 79 employees as on 31st March, 2019

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 11.81%. 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.

For and on behalf of Board of Director

Amit Gupta Nikhil Chaturvedi Deep GuptaDate: 13.08.2019 Resolution Professional Managing Director Whole time DirectorPlace: Mumbai IBBI Registration No.:

IBBI/IPA-001/IP-P00016/2016-17/10040DIN: 00004983 DIN:00004788

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Annual Report 201941

CORPORATE GOVERNANCE REPORT

The Board present the Company’s Report on Corporate Governance for the year ended 31st March, 2019, 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 CODE OF 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:

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

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

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

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

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

However, the Hon’ble National Company Law Tribunal, Mumbai Bench, Mumbai (“NCLT”), vide its order dated 25th July, 2018 had admitted the reference for initiation of Corporate Insolvency Resolution Process (“CIRP”) in respect of the Company under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) and pursuant to the said order, Mr. Jitendrakumar Rambaran Yadav (IP Registration No IBBI/IPA-003/IP-N00022/2017-18/10169) had been appointed as an Interim Resolution Professional (“IRP”) from the date of said order to manage affairs, business and assets of the Company. Further, in terms of IBC and pursuant to initiation of CIRP in the Company, the management of affairs and powers of the board of directors of the Company were suspended and stood vested in the IRP/ RP.

Further the Committee of Creditors in its meeting held on 24th August, 2018 decided to replace Mr. Jitendrakumar Yadav, interim resolution professional with CA Amit Gupta, having registration no IBBI/IPA-001/IP-P00016/2016-17/10040, as a Resolution Professional in accordance with section 22(2) of the code, which was subsequently accorded by the Hon’ble NCLT, Mumbai Bench vide order dated 26th September, 2018

SEBI vide its notification no. SEBI/LAD-NRO/

GN/2018/21 dated 31st May, 2018 had made the following amendments through SEBI (LODR) (Third Amendment) Regulations, 2018 for listed entities which are undergoing corporate insolvency resolution process under the Insolvency Code:

“The provisions as specified in regulation 17 shall not be applicable during the insolvency resolution process period in respect of a listed entity which is undergoing corporate insolvency resolution process under the Insolvency Code: Provided that the role and responsibilities of the board of directors as specified under regulation 17 shall be fulfilled by the interim resolution professional or resolution professional in accordance with sections 17 and 23 of the Insolvency Code.

The provisions as specified in regulations 18, 19, 20 and 21 shall not be applicable during the insolvency resolution process period in respect of a listed entity which is undergoing corporate insolvency resolution process under the Insolvency Code: Provided that the roles and responsibilities of the committees specified in the respective regulations shall be fulfilled by the interim resolution professional or resolution professional.”

2. BOARD OF DIRECTORS:

a. Composition of the Board:

Prior to the initiation of the CIRP dated 25th July, 2018, the Board had optimum combination of Executive and Non- Executive Directors. During CIRP process, Mr. Dinesh Arya, Chairman and Independent Director and Ms. Gauri Pote, Independent Woman Director resigned from the Board of the Company due to some personal reasons and other preoccupations.

Prior to the initiation of the CIRP Mr. Dinesh Arya, Independent Director was 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.

Prior to the initiation of the CIRP, the Board met once on 11th May, 2018 to approve the audited financial statements of the Company for the year ended 31st March, 2018 and other business items as per the agenda. During the year under review no resolution was passed through circulation.

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

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42

with the approval of the Board. This ensures

timely and informed decisions by the Board.

The Board reviewed the performance of the

Company vis-à-vis the budgets/targets .

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

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 Arya11 C & ID 1 No 1 1 0Mr. Hetal Hakani ID 1 No 26 0 1Ms. Gauri Pote12 ID 1 No 1 - -Mr. Nikhil Chaturvedi MD 1 Yes 27 - 1Mr. Deep Gupta WTD 1 Yes 38 - 1Mr. Akhil Chaturvedi WTD 1 Yes 49 - 2Mr. Salil Chaturvedi NED 0 No 410 1 2

Post CIRP process other three meetings were held and convened by the concerned IRP/RP on 14th August, 2018, 14th November, 2018 and 14th February, 2019 and the intervening gap between two meetings did not exceed one hundred twenty days.

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

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 brother, no other Directors are related to each other.

6. Mr. Hetal Hakani’s number of Directorship includes two listed Companies viz; Provogue (India) Limited and Garbi Finvest Limited holding position as Independent Director and Director respectively.

7. Mr. Nikhil Chaturvedi’s number of Directorship includes two listed Companies viz; Prozone Intu Properties Limited and Provogue (India) Limited holding position as Managing Director and managing Director respectively.

8. Mr. Deep Gupta’s number of Directorship includes one listed Company viz; Provogue (India) Limited holding position as Whole Time Director.

9. Mr. Akhil Chaturvedi’s number of Directorship includes One listed Company viz; Provogue (India) Limited holding position as Whole Time Director.

10. Mr. Salil Chaturvedi’s number of Directorship includes two listed Companies viz; Prozone Intu Properties Limited and Provogue (India) Limited holding position as Dy. Managing Director and Non Executive Director respectively.

11. Mr. Dinesh Arya resigned from the Directorship of the Company w.e.f. 30th March, 2019 due to personal reasons and other preoccupations and there were no any material reasons other than provided.

12. Ms. Gauri Pote resigned from the Directorship of the Company w.e.f. 30th March, 2019 due to personal reasons and other preoccupations and there were no any material reasons other than provided.

b. Independent Director:

In opinion of the Board, the Independent Directors fulfills the conditions of independence specified in Section 149 and Schedule IV of the Companies Act, 2013 and Regulation 16 (1) (b) of the Listing Regulation and are independent of the management. A formal letter of appointment to Independent Director

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Annual Report 201943

as provided in Companies Act, 2013 and the Listing Regulation has been issued on their appointment. In the opinion of the board, the independent directors fulfill the conditions specified in these regulations and are independent of the management.

c. Meetings of Independent Directors:

Pursuant to initiation of Corporate Insolvency Resolution Process (CIRP) in the Company, the powers of the Board were to be exercised by IRP and hence the meeting of the Independent Directors does not take place during the financial year 2018-19.

Pursuant to provisions of Section 149(8) read with Schedule IV of the Companies Act, 2013 and Reg. 25 of SEBI (LODR) Regulation 2015 pertaining to meeting of Independent Directors is not applicable to the Company.

d. Familiarization Programme for Independent Directors:

Pursuant to initiation of Corporate Insolvency Resolution Process (CIRP) in the Company, the powers of the Board were to be exercised by

IRP and hence the meeting of the Independent Directors did not take place during the financial year 2018-19. So, the Familiarization Programme for Independent Directors was not conducted.

The details of Familiarization Programmes held before CIRP process have been hosted on website. Link: www.provogue.com.

e. Payment of compensation to Non-Executive directors:

During the financial year 2018-19, no amount has been paid to Non-Executive Directors of the Company except sitting fees for attending the Board / Committee Meetings.

f. Chart or matrix setting out skills/expertise/competence of the Board of Directors

A matrix setting out the core skills/ expertise/ competence as required in the context of the business or sector for the Company to function effectively in comparison with core skills/ expertise/ competence actually available with the Board of Directors of the Company as on 31st March, 2019 are stated hereunder:

SN List of core skills/ expertise/ competence Availability of the core skills/ expertise/ competence as on 31st March, 2019

1 Industry experience and Knowledge √2 Sales and Marketing Functions √3 Management of Business Operations √4 Business Development and Strategy Formation √5 Planning, Sourcing and Costing √6 Strategy/M&A/Restructuring √7 Finance and Accounting √8 Risk and compliance oversight √9 Corporate Governance √10 Human Resource Management √11 Information technology strategy √

COMMITTEES OF THE BOARD:

The Board of Directors had constituted Committees to deal with specific areas and activities which concern the Company and requires a closer review. The Committees were 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 met once on 11th May, 2018 and took 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.

Prior to the commencement of CIRP, the Committee’s composition met 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.

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a. Composition:

Prior to the commencement of CIRP, Mr. Dinesh Arya, Independent Director was 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;

Ø 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,

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

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

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

Ø Reviewing the adequacy of internal audit function,

Ø 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 meeting of the audit committee was 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 Minute of every Audit Committee were discussed and taken note by the Board of Directors in subsequent meeting.

Prior to the commencement of CIRP, the Audit Committee met once during the financial year 2018-19 i.e. on 11th May, 2018. In view of commencement of CIRP with effect from 25th July, 2018, the Audit Committee was convened by the concerned IRP/RP on 14th August, 2018, however, no members of the Audit Committee were present and subsequently no meeting of Audit Committee members were held.

The details of attendance of the Members in meeting prior to the commencement of CIRP is as follows:

Name of the Member

Category1 Position Audit Committee Meetings

Held Attended Mr. Dinesh Arya2

I & NED Chairman 12 12

Mr. Hetal Hakani

I & NED Member 1 1

Mr. Akhil Chaturvedi

WTD Member 1 1

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

2. Mr. Dinesh Arya resigned from the Directorship of the Company w.e.f. 30th March, 2019 due to personal reasons and other preoccupations.

Prior to the commencement of CIRP, 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

4. NOMINATION AND REMUNERATION COMMITTEE:

Prior to the commencement of CIRP, 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:

Prior to the commencement of CIRP, the Committee comprised of three members

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Annual Report 201945

namely, Mr. Hetal Hakani, Chairman (Independent Director), Mr. Dinesh Arya, Member (Independent Director-till 30th March, 2019) and Mr. Salil Chaturvedi, Member (Non- Executive Director).

b. Meeting of Committee:

During the year under review no meeting was held.

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;

Ø 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;

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

Ø Devising a policy on diversity of Board of Directors;

Ø 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;

Ø 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 initiation of the Corporate Insolvency Resolution Process and as the same is still in process, the powers of the Board of Directors stand suspended from 25th July, 2018. Accordingly, the Annual evaluation of Board, its committees and individual directors as required under Section 134 (p) could not be carried out.

The Remuneration policy covers the following Criteria for evaluation of performance of Independent Directors:

a. Knowledge and skills in accounting and finance, business judgement, general

management practices, crisis response and management, industry knowledge, strategic planning etc.

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

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

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

e. Awareness of the Company’s responsibilities to its customers, employees, suppliers, regulatory bodies, and the communities in which it operates

f. 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 the Corporate Governance requirements prescribed under Clause 49 of the Listing Agreement

iii. Accountability under the Directors’ Responsibility Statement

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

5. REMUNERATION TO DIRECTORS:

Prior to the commencement of CIRP, Executive directors of the Company were appointed by the Board of Directors subject to the approval of shareholders in the General Meeting. The remuneration package of the Executive Directors was determined by the Nomination and Remuneration Committee within the permissible limits, subject to approval of the Board and shareholders in their respective meetings 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 2018-19 are as under:

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46

Name of the Director Basic Salary Paid (`)

Allowances & perquisites

(`)

Sitting Fees paid (`)

Total Remuneration

(`)*1 Mr. Dinesh Arya - - 50,000 -2 Mr. Hetal Hakani - - 50,000 -3 Ms. Gauri Pote - - 20,000 -4 Mr. Nikhil Chaturvedi ** - - - -5 Mr. Salil Chaturvedi ** - - - -6 Mr. Deep Gupta 56,34,000 -- - 56,34,0007 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:

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

a. Composition:

Prior to the commencement of CIRP ,the Stakeholders Relationship Committee, comprises of two executive directors viz. Mr. Akhil Chaturvedi and Mr. Deep Gupta and one non-executive director namely, Mr. Salil Chaturvedi.

Prior to the commencement of CIRP Mr. Salil Chaturvedi, Non-executive Director was the Chairman of the Committee. The 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:

Prior to the commencement of CIRP, the Committee met once on 11th May, 2018. In view of commencement of CIRP with effect from 25th July, 2018, no meeting of Stakeholders Relationship Committee of the Company was held.

The details of attendance of the members in meeting was as follows:

Name of the Member

Category1 Position Stakeholders Relationship Committee Meetings

Held Attended Mr. Salil Chaturvedi

NED Chairman 1 0

Mr. Deep Gupta

WTD Member 1 1

Mr. Akhil Chaturvedi

WTD Member 1 1

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

d. Name and Designation of Compliance Officer:

The Company Secretary acts as Compliance Officer of the Company.

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Annual Report 201947

On 17th April, 2019 Mr. Vishant Shetty resigned from the post of Company Secretary of the Company and accordingly he ceased to be the Compliance officer and Key Managerial Personnel of the Company with simultaneous effect. Further, Mr. Vishal Menon appointed as Company Secretary and Compliance Officer of the Company with effect from 18th April, 2019 in place of Mr. Vishant Shetty in terms of provision of section 203 of the Companies Act 2013 read with regulation 6 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

e. 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, 2019

Nil

Number not resolved to the satisfaction of the shareholders as on 31st March, 2019

Nil

Number of pending complaints as on 31st March, 2019

Nil

7. 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

passedAnnual General Meetings:2015-16 30.09.16 11.00 a.m. Eden Hall, The Classique Club, Behind Infinity mall,

New Link Road, Andheri (W), Mumbai- 400 0530

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

2017-18 29.09.18 11.00 a.m. Eden Hall, The Classique Club, Behind Infinity mall, New Link Road, Andheri (W), Mumbai- 400 053

1

l None of the items transacted at the last Annual General Meeting held on 29th September, 2018 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 2018-2019, no resolution was passed by the Company through postal ballot.

8. 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.

9. GENERAL SHAREHOLDERS INFORMATION:

Annual General Meeting: Date, Time and Venue:

As indicated in the notice accompanying this Annual Report, the Twenty Third Annual General Meeting of the Company will be held on 30th September, 2019 at 4:00 pm at Esquire Hall, The Classique Club, Behind Infinity Mall, New Link Road, Andheri (West), Mumbai – 400053.

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48

Financial Year:

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

Dividend:

The Company has not recommended any dividend for the financial year 2018-19.

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

Stock Exchanges Stock CodeBSE Ltd Listing Department P. J. Towers, Dalal Street, Fort Mumbai 400 001

532647

National Stock Exchange of India Limited Exchange Plaza, Bandra 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 2019-20.

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

Un-audited results Q1 ending 30.06.2019

On or before 14th August, 2019

Un-audited results Q2/half year ending 30.09.2019

On or before 14th November, 2019

Un-audited results Q3/Nine months ending 31.12.2019

On or before 14th February, 2020

Audited Results for the year ending 31.03.2020

On or before 30th May, 2020

Book Closure Date:

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

Market Price Data:

Month BSE NSEShare Price (in Rs) Sensex Share Price (in Rs) Nifty

High Low Close Close High Low Close CloseApr-18 5.79 4.00 4.87 35,160.36 5.85 3.95 4.95 10739.35May-18 5.38 4.42 4.60 35,322.38 5.15 4.50 4.60 10736.15Jun-18 4.69 3.80 3.80 35,423.48 4.70 3.70 3.85 10714.30Jul-18 4.99 3.41 3.79 37,606.58 4.95 3.45 3.75 11356.50Aug-18 4.45 3.45 3.48 38,645.07 4.45 3.45 3.55 11680.50Sep-18 3.65 2.93 3.09 36,227.14 3.65 2.80 2.95 10930.45Oct-18 3.10 2.40 2.65 34,442.05 3.20 2.30 2.65 10386.60Nov-18 3.29 2.40 2.99 36,194.30 3.10 2.60 2.95 10876.75Dec-18 3.10 2.40 2.75 36,068.33 3.05 2.55 2.80 10862.55Jan-19 3.94 1.70 1.74 36,256.69 3.85 1.75 1.75 10830.95Feb-19 1.71 1.02 1.40 35,867.44 1.70 1.10 1.40 10792.50Mar-19 1.65 1.13 1.23 38,672.91 1.60 1.10 1.20 11623.90

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

PROVOGUE’s price comparision with SENSEX Index of BSE

33,000.0034,000.0035,000.0036,000.0037,000.0038,000.0039,000.00

0

2

4

6

8

APR MAY JUN JUL AUG SEPT OCT NOV DEC JAN FEB MAR

SENSEX Index PIL Price

PROVOGUE’s price comparision with Nifty 50

9500.00

10000.00

10500.00

11000.00

11500.00

12000.00

0.001.002.003.004.005.006.00

APR MAY JUN JUL AUG SEPT OCT NOV DEC JAN FEB MAR

SENSEX Index PIL Price

The securities of the Company are not suspended from trading.

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.

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 demat form) and 30 days respectively from the receipt of documents complete in all respects. Company has Link Intime

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Annual Report 201949

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.

Distribution of Shareholding as on 31st March, 2019:

Share holding Share Holders SharesNo. of Shares Number % to

total share capital

No. of Shares

% to totalshare capital

(1) (2) (3) (4) (5)upto-500 21548 72.35 3530974 1.51501-1000 3367 11.31 2950227 1.261001-2000 1978 6.64 3194327 1.372001-3000 812 2.73 2156999 0.923001-4000 365 1.23 1347200 0.584001-5000 418 1.40 2014061 0.865001-10000 615 2.06 4665967 2.0010001- above 680 2.28 213522072 91.49Total 29783 100.00 233381827 100.00

Categories of Shareholders as on 31.03.2019:

Category No. of Shares

% of Shareholding

Promoters & Promoter Group

47163360 20.21

Nailsfield Limited 6000000 2.57Intu India (Portfolio) Limited 5415000 2.32Banks & Financial Institutions

119833684 51.35

Foreign Portfolio Investor 297435 0.13Bodies Corporate 8584869 3.68Others 46087479 19.75Total 233381827 100.00

20.21%

2.57%2.32%

51.35%

0.13%3.68%

19.75%

Promoters & Promoter Group 20.21%

Nailsfield Limited 2.57%

Intu India (Portfolio) Limited 2.32%Banks & Financial Institutions 51.35%Foreign Portfolio Investor 0.13%Bodies Corporate 3.68%

Others 19.75%

SHAREHOLDING PATTERN AS ON 31.03.2019

Dematerialization of shares:

Break up of shares in physical and demat form as on 31st March, 2019

Particulars No. of Shares % of Shares Physical segment 57,887 0.02%

Demat segment a) NSDL 19,13,34,956 81.99%b) CDSL 4,19,88,984 17.99%Total 23,33,81,827 100.00%

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.

Outstanding GDRs/ ADRs/ Warrants or any Convertible instruments:

As of 31st March, 2019 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: 022-6824 9000/9071, Email id for investors: [email protected]

Credit Ratings: The Company has not obtained any credit rating.

10. OTHER DISCLOSURES:

a. Related Party Transactions [RPTs]:

Prior to the commencement of CIRP, all Related Party Transactions are placed before

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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.

b. 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 except the following:

1. There was delay in filing of shareholding pattern for quarter ended March, 2018 for which Company incurred a penalty levied by Stock Exchanges.

2. The Corporate Insolvency Resolution Process (CIRP) was initiated against the

Company vide order dated 25th July, 2018 passed by Hon’ble National Company Law Tribunal, Mumbai Bench. There was delay in dissemination of certain information to the Stock Exchanges as required under Para A of Part A of Schedule III read with Reg. 30(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. However the same was disseminated later to the Stock Exchanges vide letter dated 12th June 2019 except brief particulars of invitation of resolution plans due to confidentiality reasons.

3. The financial results of Quarter ended June 2018 was published by the newspaper agency with a delay of 1 day due to public holiday on 15th August, 2018 being press was closed.

c. 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.

d. 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.

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

SN Particulars Remarks1 The Board The Company does not reimburse expenses incurred, if any, by the Non-Executive

Chairman for maintenance of a separate Chairman’s Office.2 Shareholders’

RightsQuarterly 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 is sent to every shareholder of the Company

3 Audit qualifications

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

a. Standalone financials: The Company has a financial involvement aggregating ` 11,256.31 Lacs via investments I loans in various subsidiaries I step-down subsidiaries I Joint Venture. These Subsidiaries have made heavy losses and have uncertainty regards to realisation of assets of subsidiaries and the net worth of few subsidiaries have substantially eroded.

b. Consolidated financials: The Company has a financial involvement aggregating ` 4,814.50 Lacs via investments I loans in various subsidiaries I step-down subsidiaries I Joint Venture. These Subsidiaries have made heavy losses and have uncertainty regards to realisation of assets of subsidiaries and the net worth of few subsidiaries have substantially eroded.

Management response: The Company is in Corporate Insolvency Resolution Process to revamp its business in the Group, accordingly no provision is made against the aforesaid amounts at this stage.

4 Reporting of Internal Auditor

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

e. Subsidiary monitoring framework:

As on 31st March, 2019 the Company had 10 subsidiary companies including 1 foreign subsidiary, 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:

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

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

f. The Policy on dealing with related party transactions: Link http://corporate.provogue.com/media/provogue/pdf/corp_govern/Policy_Governing_Related_Party_Transactions.pdf

g. Disclosure of commodity price risks and commodity hedging activities: Not applicable

h. Details of utilization of funds raised through preferential allotment or qualified institutions placement: Not Applicable

i. A certificate from M/s HS Associates, Practicing Company Secretaries stating that none of the directors on the board of the company have been debarred or disqualified from being appointed or continuing as directors of companies by the Board/Ministry of Corporate Affairs or any such statutory authority is a forming part of this Corporate Governance Report.

j. Disclosure where the board had not accepted any recommendation of any committee of the board which is mandatorily required, in the relevant financial year: Not applicable

k. The Company has paid total fees of ` 13.48 Lacs for all services paid by the Company and its subsidiaries, on a consolidated basis, to their respective Statutory Auditors and all entities in the network firm/network entity of which the statutory auditor is a part.

l. Disclosures under the Sexual Harassment of Women at Workplace (prevention, prohibition and redressal) act, 2013

The Company has been employing women employees in various cadres within its

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corporate office and in branch offices. 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.

a. number of complaints filed during the financial year

NIL

b. number of complaints disposed of during the financial year

NIL

c. number of complaints pending as on end of the financial year.

NIL

11. Non Compliance of any requirement of Corporate Governance Report of sub paras (2) to (10) above, with reasons thereof: Not Applicable

12. The corporate governance report shall also disclose the extent to which the discretionary requirements as specified in part E of schedule II have been adopted: Please refer point 10(d)

13. The disclosure of the compliance with corporate governance requirements specified in regulation 17 to 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 shall be made in the section on corporate governance of the annual report:

The Company is in compliance with applicable provisions specified in regulation 17 to 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 of SEBI (LODR) Regulation, 2015.

14. 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.

15. 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 31st March, 2019.”

For Provogue (India) Limited

Sd/-Nikhil Chaturvedi,

Date: 13th August, 2019 Managing DirectorPlace: Mumbai DIN: 00004983

16. 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 1,44,155/-, in respect of the financial year 2010-11 was transferred to the IEPF on 19th November, 2018. The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 29th September, 2018 (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 2011-12 must be claimed by the concerned shareholders on or before 29th October, 2019, 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 2010-11. Further dividend which is lying unclaimed for the last 7 years since 2011-12 must be claimed by the concerned shareholders on or before 29th October, 2019 for which Company has sent the reminder letters to them. If the shareholders fail 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 29th September, 2018 (date of the previous Annual General Meeting), are provided on the website, at link: http://corporate.provogue.com/media/provogue/pdf/unpaid_shareholders/Statement_of_unclaimed_and_unpaid_dividends_AGM_2018.pdf

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

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There are no demat suspense account and/ or unclaimed suspense account in the Company. As the shares/ dividend earlier lying in demat suspense account pertaining to IPO period, had already been transferred to IEPF Account after completion of seven years being remained unpaid/ unclaimed.

17. 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.

18. RISK MANAGEMENT:

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

GOVERNANCE CODES

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.

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

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:

l Centralized database of all complaints,

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

l 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.

For Provogue (India) Limited

Sd/-Amit Gupta

Resolution ProfessionalIBBI Registration No.:

IBBI/IPA-001/IP-P00016/2016-17/10040

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54

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 period 1st April, 2018 to 24th July, 2018, stipulated 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 National Company Law Tribunal (NCLT) vide order dated 25th July, 2018, has initiated Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 for the Company. Further, vide the above mentioned NCLT order and pursuant to Section 17 of the IBC, the powers of the Board of Directors of the Company stood suspended and such powers were vested with the Interim Resolution Professional (IRP)/ Resolution Professional (RP). Prior to the date of commencement of CIRP, the Board of Directors was responsible for complying with the conditions of Corporate Governance as stipulated under chapter IV of the Listing Regulations.

In our opinion and to the best of our information and according to the explanations and information furnished to us, we hereby certify that the Company has complied with all the conditions of Corporate Governance as stipulated in the said Listing Regulations, referred to in paragraph 1 above. Subsequent to the date of commencement of CIRP, complying with the provisions as stipulated in the said Listing Regulations, referred to in paragraph above, were not applicable on account of suspension of the powers of the Board of Directors and its Committees thereof, however, requirements of such provisions were fulfilled by the concerned IRP/RP to the extent deemed appropriate.

We hereby state that our examination has been limited to a review of the procedures and implementations thereof, adopted by the Company for ensuring the compliance with the conditions of Corporate Governance as stipulated under the aforesaid Chapter. It is neither an audit nor an expression of opinion on the financial statements of the Company.

We further state that such compliance 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: 13th August, 2019 FCS–2827Place: Mumbai COP– 1483

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Certificate of Non-Disqualification of Directors(Pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the SEBI

(Listing Obligations and Disclosure Requirements) Regulations, 2015)

To,

The Members of

PROVOGUE (INDIA) LIMITED,

105/106, Provogue House, Off. New Link Road, Andheri West, Mumbai - 400 053.

We have examined the relevant registers, records, forms, returns and disclosures received from the Directors of PROVOGUE (INDIA) LIMITED having CIN: L18101MH1997PLC111924 and having registered office at 105/106, Provogue House, Off. New Link Road, Andheri West, Mumbai - 400 053 (hereinafter referred to as ‘the Company’), produced before us by the Company for the purpose of issuing this Certificate, in accordance with Regulation 34(3) read with Schedule V Para-C Sub clause 10(i) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In our opinion and to the best of our information and according to the verifications (including Directors Identification Number (DIN) status at the portal www.mca.gov.in) as considered necessary and explanations furnished to us by the Company & its officers, we hereby certify that none of the Directors on the Board of the Company as stated below for the Financial Year ending on 31st March, 2019 have been debarred or disqualified from being appointed or continuing as Directors of companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs, or any such other Statutory.

Sr. No.

Name of Director DIN Date of appointment in

Company1. Mr. Salil Anupendra Chaturvedi 00004768 Since Incorporation2. Mr. Akhil Anupendra Chaturvedi 00004779 Since Incorporation3. Mr. Deep Subhash Gupta 00004788 Since Incorporation4. Mr. Nikhil Anupendra Chaturvedi 00004983 Since Incorporation5. Mr. Hetal Vasant Hakani 06878540 26/05/20146. Mr. Dinesh Triloknath Arya* 02704435 26/05/20147. Ms. Gauri Sanjay Pote* 07301254 30/09/2015

*Mr. Dinesh Triloknath Arya and Ms. Gauri Sanjay Pote resigned w.e.f. 30th March, 2019.

Ensuring the eligibility of for the appointment / continuity of every Director on the Board is the responsibility of the management of the Company. Our responsibility is to express an opinion on these based on our verification. This certificate 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.

Thanking You,For HS AssociatesCompany Secretaries

Hemant ShetyePartner FCS: 2827CP No: 1483

Date: 13th August, 2019Place: Mumbai

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INDEPENDENT AUDITOR’S REPORT

To

The Members Provogue (India) Limited

Report on the Audit of the Standalone Ind AS Financial Statements

Qualified Opinion

We have audited the Standalone Ind AS financial statements of Provogue (India) Limited (“the Company”), which comprise the balance sheet as at 31st March, 2019, and the statement of Profit and Loss (Including Other Comprehensive Income), statement of cash flows and statement of changes in equity for the year then ended, and notes to the Standalone financial statements, including a summary of significant accounting policies and other explanatory information.

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, 2019, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Material Uncertainty Related to Going Concern

Attention is invited to Note No. 47 in the standalone financial statements which indicate that the Company has incurred losses during the current and previous years, the Company has accumulated losses and its net worth has been fully eroded. Further, the credit facilities of the Company have also been classified as sub-standard (Non Performing Assets) as per RBI guidelines and the lenders have filed a petition under Insolvency and Bankruptcy Code, 2016 (IBC) with the Hon’ble National Company Law Tribunal, Mumbai Bench (NCLT). These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern. However, the financial statements of the Company have been prepared on a going concern basis for the reasons stated in the said note in respect of initiation of Corporate Insolvency Resolution Process (CRIP).

Basis for Qualified Opinion

As explained in Note 46 to the Ind AS financial standalone statements regarding the Company’s financial involvement aggregating ` 11256.31 Lacs in various subsidiaries / step-down subsidiaries and Joint Ventures. These Subsidiaries have made heavy losses and have uncertainty regards to realisation of assets and the net worth of few subsidiaries have substantially

eroded. The Company has not provided any provision regards to impairment of these assets as stated in the note. Accordingly, we are unable to comment upon the resultant effect of same on the Assets, Liability and Loss of the company

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the Standalone financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone financial statements of the current period. These matters were addressed in the context of our audit of the Standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. During the course of our audit, we have determined that there are no key audit matters to be communicated in our report except for the matters prescribed in Basis of Qualified Opinion & Material Uncertainty Related to Going Concern section.

Information Other than the Financial Statements and Auditor’s Report Thereon

The Company’s Board of Directors / Management is responsible for the other information. The other information comprises the information included in the Board / Management Report, Report on Corporate governance and Business Responsibility report but does not included in the Standalone financial statements and our auditor’s report thereon.

Our opinion on the Standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. If, based on the

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work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

In accordance with the applicable provisions of the Insolvency and Bankruptcy Code 2016, (IBC), The Andhra Bank, in its capacity as financial creditor has filed a petition under IBC with the Honorable National Company Law Tribunal, Mumbai Bench (NCLT). The NCLT vide its order dated 25th July, 2018 admitted the Corporate Insolvency Resolution Process (CIRP) in respect of the Company and appointed Mr. Jitendra R Yadav, as the Interim Resolution Professional (IRP) in terms of the IBC. However, the committee of creditors in the first meeting held on 24th August, 2018 decided to appoint Mr. Amit Gupta, as the Resolution Professional (‘RP’) of the Company. The appointment of Mr. Amit Gupta was confirmed by NCLT order dated 26th September, 2018. On appointment of the RP under the Code, the powers of the Board of Directors of the Company were suspended.

The Company’s Board of Directors / Management is responsible for the matters stated in section 134(5) 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 Ind AS and accounting principles generally accepted in India, including the IND AS specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The management is also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

1. Our objectives are to obtain reasonable assurance about whether the Standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone financial statements.

2. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also :

• Identify and assess the risks of material misstatement of the Standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our

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auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the Standalone financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

3. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

4. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

5. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Emphasis of Matter

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

i) We draw attention to Note 47 of the standalone financial statements in respect of initiation of Corporate Insolvency Resolution Process (CRIP) and the preparation of standalone financial results on going concern basis for the reasons stated therein.

ii) Note 39 (e) to the Standalone financial statements regarding non provision of service tax for the period from 1st June, 2007 to 30th September, 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 terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure A statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2 As required by Section 143(3) 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) Except the possible effects of the matter described in the Basis for Qualified Opinion paragraph, 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 Standalone Ind AS financial statements dealt with by this Report are in agreement with the books of account.

(d) Except the possible effects of the matter described in the Basis for Qualified Opinion paragraph, in our opinion, the aforesaid Standalone financial statements comply with the IND AS as specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) The matter described in the Basis for Qualified Opinion, Emphasis of Matters and Material uncertainty relating to going concern assumption 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, 2019, none of the directors is disqualified as on 31st March, 2019 from being appointed as a director in terms of Section 164 (2) of the Act. However, this was not taken on record by the Board of Directors as Corporate Insolvency Resolution process (CIRP) is initiated against the Company and the powers of the Board are suspended during the CIRP.

(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”.

(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

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information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations if any, on its financial position in its Standalone financial statements (Refer Note 39 of the Ind AS 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 have been no delays in transferring amounts which were required to be transferred to the Investor Education and Protection Fund by the company.

3. In our opinion and according to the information and explanations given to us, the remuneration paid by

the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.

For Ajay Shobha & Co.

Chartered Accountants

Firm Reg. No. 317031E

Ajaykumar Gupta

Place : Mumbai Partner

Date : 30th May, 2019 Mem. No. : 53071

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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, 2019.

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) As explained to us, the fixed assets have been physically verified by the management in accordance with a phased program of verification, which in our opinion is reasonable, considering the size of the Company and the nature of its assets. In accordance with this program certain fixed assets were verified during the year. The frequency of verification is reasonable and 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. Discrepancies noticed on physical verification of inventories as compared to book records were not material and have been properly dealt with in the books of account.

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

a) According to the information and explanations given to us, in our opinion, the terms and conditions on which the unsecured loans have been granted to the companies covered in the register maintained under Section 189 of the Act were not, prima facie, prejudicial to the interest of the Company;

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) In our opinion and according to the information and explanation given to us, in respect of loans, investments, guarantees, and security, the Company has complied with the provisions of section 185 and 186 of the Companies Act, 2013.

(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 Customs, duty of Excise, Value Added Tax, Cess, Goods and Service Tax and other statutory dues wherever applicable have regularly been 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, 2019 for a period more than six months from the date they became payable.

(b) According to the information and explanations given to us, dues of income tax, sales tax, value added tax, service tax, duty of customs, duty of excise, Goods and Service Tax which have not been deposited on account of any dispute with the relevant authorities are as under:

Name of Statute

Amount (` in

Lacs)

Period to which amount relates

Forum where dispute is

pending

Sales Tax

134.73 2006-07 to 2015-16

Deputy/ Joint Commissioner – Appeals

Service Tax

36.42 2010-11 to 2012-13

Service Tax Department

Income Tax

15.93 2012-13 Commissioner of Income Tax (Appeals)

32.76 2013-14316.89 2015-16

Tax Deducted at Source (Income Tax)

189.12 2007-08 to 2018-19

Assistant Commissioner of Income Tax (TDS)

ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT

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Annual Report 201961

(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 (Non Performing Assets) due to expiry of stipulated time for SDR and further, Corporate insolvency resolution process (“CIRP”) under the IBC Code, 2016 (“IBC”) was initiated against the company vide an order of Mumbai bench of National company Law Tribunal (“NCLT”) dated 25th July, 2018.

The amount outstanding at the end of the year are as under :

Particulars ` In LacsAndhra Bank 8721.79Corporation Bank 4288.71Punjab National Bank 4054.07Indusind Bank 672.11Central Bank of India 4490.61Small Industries Development Bank of India

419.29

Bank of India 5571.50 28218.08

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

(ix) The Company has not raised any money by way of initial public offer, further public offer (including debt instruments) and term loans during the year. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.

(x) According to the information and explanations given to us, no material 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

requisite approvals mandated by the provisions of section 197 read with Schedule V to 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, 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.

For Ajay Shobha & Co.

Chartered Accountants

Firm Reg. No. 317031E

Ajaykumar Gupta

Place : Mumbai Partner

Date : 30th May, 2019 Mem. No. : 53071

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62

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

We have audited the internal financial controls over financial reporting of Provogue (India) Limited (“the Company”) as of 31st March, 2019 in conjunction with our audit of the Ind AS standalone 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”).

Auditor’s 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 Ind AS 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 Ind AS 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 Ind AS standalone 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.

ANNEXURE “B” TO THE INDEPENDENT AUDITOR’S REPORT of even date on the Standalone Ind AS financial statements of Provogue (India) Limited for the year ended 31st March, 2019.

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Annual Report 201963

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, 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, 2019, 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..

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

Ajaykumar Gupta

Place : Mumbai PartnerDate : 30th May, 2019 Mem. No. : 53071

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64

BALANCE SHEET as at 31st March, 2019

(` In Lacs) Particulars Notes As at

31.03.2019 As at

31.03.2018ASSETSNon-current assetsProperty, Plant and Equipment 2 786.60 821.41Investment Property 3 318.99 334.73Other Intangible assets 4 0.01 5.77Financial Assets Non Current Investments 5 11,362.06 12,247.42 Loans 6 3,344.23 3,256.21 Other financial assets 7 79.60 79.60Deferred tax assets (net) 8 - 854.97Income tax assets (Net) 9 441.01 398.08

16,332.49 17,998.18Current assets Inventories 10 1,096.54 1,673.27Financial Assets Current Investments 11 38.07 400.70 Trade receivables 12 3,995.54 3,720.73 Cash and cash equivalents 13 558.61 543.48 Bank balances other than cash and cash equivalents 14 121.87 115.56 Other financial assets 15 368.56 425.94Other current assets 16 217.61 371.30

6,396.80 7,250.98 22,729.29 25,249.17EQUITY AND LIABILITIESEQUITYEquity Share capital 17 2,333.82 2,333.82Other Equity 18 (10,011.58) (3,698.90)

(7,677.76) (1,365.08)LIABILITIES Non-current liabilities Financial Liabilities Non Current Borrowings 19 - - Other financial liabilities 20 23.38 33.84Provisions 21 46.70 37.95

70.08 71.79Current liabilities Financial Liabilities Current Borrowings 22 12,285.59 12,424.92 Trade payables 23 1,873.41 1,730.98 Other financial liabilities 24 15,932.49 11,965.05Other current liabilities 25 205.46 382.61Provisions 26 40.02 38.90

30,336.97 26,542.4622,729.29 25,249.17

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

As per our report of even date attached

For Ajay Shobha & Co. For Provogue (India) LimitedChartered Accountants

Ajaykumar Gupta CA Amit Gupta Nikhil Chaturvedi Deep GuptaPartner Resolution Professional Managing Director Whole-time Director & CFO Mem. No. : 53071 R. No.: IBBI/IPA-001/IP-

P00016/2016-17/10040DIN No. : 00004983 DIN No. : 00004788

Place : Mumbai Vishal MenonDate : 30th May, 2019 Company Secretary

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Annual Report 201965

(` In Lacs)

Particulars Notes Year ended 31.03.2019

Year ended 31.03.2018

INCOME

Revenue from operations 27 7,260.98 9,177.80

Other income 28 21.24 581.07

Total income 7,282.22 9,758.87

EXPENSES

Cost of materials consumed 29 2,175.09 4,172.31

Purchases of stock - in - trade 30 1,992.61 2,746.69

Changes in inventories of finished goods, work in process and stock in trade

31 621.83 9,795.46

Employee benefits expense 32 443.29 538.61

Finance costs 33 4,154.54 3,277.13

Depreciation and amortisation expense 34 59.65 257.37

Other expenses 35 2,155.47 4,553.80

Total expenses 11,602.48 25,341.37

Profit / (Loss) before exceptional items and tax (4,320.25) (15,582.50)

Exceptional items 36 1,138.79 6,974.38

Profit / (Loss) before tax (5,459.05) (22,556.89)

Less : Tax expenses

- Current tax - -

- Deferred tax 854.50 60.89

Total tax expense 854.50 60.89

Profit / (loss) for the year (6,313.54) (22,617.77)

Other Comprehensive Income

Items that will not be reclassified subsequently to profit or loss

Remeasurement benefit of defined benefit plan 1.34 9.93

Income tax on above (0.47) (2.47)

0.87 7.46

Total comprehensive income for the year (6,312.68) (22,610.31)

Earnings per equity share 37

Nominal value of share `1 : Basic (2.71) (9.69)

: Diluted (2.71) (9.69)

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

As per our report of even date attached

For Ajay Shobha & Co. For Provogue (India) LimitedChartered Accountants

Ajaykumar Gupta CA Amit Gupta Nikhil Chaturvedi Deep GuptaPartner Resolution Professional Managing Director Whole-time Director & CFO Mem. No. : 53071 R. No.: IBBI/IPA-001/IP-

P00016/2016-17/10040DIN No. : 00004983 DIN No. : 00004788

Place : Mumbai Vishal MenonDate : 30th May, 2019 Company Secretary

STATEMENT OF PROFIT AND LOSS for the year ended 31st March, 2019

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66

(` In Lacs)

Particulars Year ended 31.03.2019

Year ended 31.03.2018

OPERATING ACTIVITIES

Profit / (Loss) before exceptional items and tax (4,320.25) (15,582.50)

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

Finance Cost 4,154.54 3,277.13

Depreciation and amortisation expense 59.65 257.37

Loss on sale / discard of fixed assets (6.11) 136.06

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

Interest Income (6.62) (28.70)

Dividend income on Current investments (6.75) (24.21)

Unrealised (gain) / loss on foreign exchange fluctuation 214.21 8.97

Working capital adjustments:-

(Increase) / Decrease in Inventories 576.73 11,393.97

(Increase) / Decrease in Trade Receivables (489.02) 1,012.48

(Increase) / Decrease in Other Assets 211.07 (290.28)

Increase / (Decrease) in Trade Payables (146.36) (1,225.96)

Increase / (Decrease) in Provisions 11.21 25.23

Increase / (Decrease) in Other Liabilties (190.15) (153.98)

62.15 204.41

Income taxes refund /(paid) (42.93) (22.11)

Net cash flow from operating activities 19.22 182.30

INVESTING ACTIVITIES

Purchase of property, plant and equipment (4.22) (1.99)

Sale of property, plant and equipment 7.00 54.07

Balances with banks to the extent held as margin money (6.31) 375.06

Grant/(Refund) of Loan (88.02) (36.94)

Sale/(Purchase) of Investments 397.99 (163.40)

Interest Income 6.62 28.70

Dividend income on Current investments 6.75 24.21

Net cash flow used in investing activities 319.81 279.71

CASH FLOW STATEMENT for the year ended 31st March, 2019

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Annual Report 201967

(` In Lacs)

Particulars Year ended 31.03.2019

Year ended 31.03.2018

FINANCING ACTIVITIES

Repayment of short term borrowings (net) (323.90) (577.18)

Net cash flow from financing activities (323.90) (577.18)

Increase in cash and cash equivalents 15.13 (115.17)

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

Cash and cash equivalents at the end of the year (note 13) 558.61 543.48

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 accompanying notes are an integral part of these standalone financial statements

As per our report of even date attached

For Ajay Shobha & Co. For Provogue (India) LimitedChartered Accountants

Ajaykumar Gupta CA Amit Gupta Nikhil Chaturvedi Deep GuptaPartner Resolution Professional Managing Director Whole-time Director & CFO Mem. No. : 53071 R. No.: IBBI/IPA-001/IP-

P00016/2016-17/10040DIN No. : 00004983 DIN No. : 00004788

Place : Mumbai Vishal MenonDate : 30th May, 2019 Company Secretary

CASH FLOW STATEMENT for the year ended 31st March, 2019

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68

STANDALONE STATEMENT OF CHANGES IN EQUITY for the year ended 31st March, 2019

(` In lacs) EQUITY SHARE CAPITAL : Balance

as at 1st April, 2017

Changes in during the

year

Balance as at

31st March, 2018

Changes in during the

year

Balance as at

31st March, 2019

Paid up Capital (Refer Note 17 ) 2,333.82 - 2,333.82 - 2,333.82

(` In lacs)OTHER EQUITY :Particulars Reserves and Surplus Total

Capital Reserve

Securities Premium Reserve

Capital Redemption

Reserve

General Reserve

Retained Earnings

Other Comprehensive

Income

Balance as at 1st April, 2017 1,842.22 44,095.28 1,184.56 400.00 (28,620.43) 9.78 18,911.41Total Comprehensive Income for the year

- (22,617.77) 7.46 (22,610.31)

Balance as at 31st March, 2018 1,842.22 44,095.28 1,184.56 400.00 (51,238.20) 17.24 (3,698.90)Total Comprehensive Income for the year

- (6,313.54) 0.87 (6,312.68)

Balance as at 31st March, 2019 1,842.22 44,095.28 1,184.56 400.00 (57,551.75) 18.11 (10,011.58)

Nature and Purpose of ReservesCapital ReserveCapital reserve will be utilised in accordance with provision of the Act.

Capital Redemption ReserveThe 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 ReserveSecurities 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 ReserveGeneral Reserve represents appropriation of retained earnings and are available for distribution to shareholders

Retained EarningsRetained 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 statements

As per our report of even date attached

For Ajay Shobha & Co. For Provogue (India) LimitedChartered Accountants

Ajaykumar Gupta CA Amit Gupta Nikhil Chaturvedi Deep GuptaPartner Resolution Professional Managing Director Whole-time Director & CFO Mem. No. : 53071 R. No.: IBBI/IPA-001/IP-

P00016/2016-17/10040DIN No. : 00004983 DIN No. : 00004788

Place : Mumbai Vishal MenonDate : 30th May, 2019 Company Secretary

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Annual Report 201969

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

NOTE 1: SIGNIFICANT ACCOUNTING POLICIES:

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 30th May, 2019.

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 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.

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70

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

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.

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.

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Annual Report 201971

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

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:

has a legally enforceable right to set off the recognized amounts; and

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:

Entity has a legally enforceable right to set off current tax assets against current tax liabilities; and

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 1st 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 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.

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NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

(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.

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.

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Annual Report 201973

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

xiv) Financial Liabilities

a) Initial recognition and measurement

All financial liabilities are recognised initially at fair value net of transaction costs that are attributable to the respective liabilities.

b) Subsequent measurement

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 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:

Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

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.

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NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

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 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

Transactions denominated in foreign currency are normally accounted for at the exchange rate prevailing at the time of transaction.

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.

Exchange differences’ arising on account of fluctuations in the rate of exchange is recognized in the statement of Profit & Loss.

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.

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Annual Report 201975

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

Non-monetary items are reported at the exchange rate at the date of transaction.

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 suchforward 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.

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.

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76

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

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Annual Report 201977

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

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78

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

NOTE 3 : INVESTMENT PROPERTY

Following are the changes in the carrying value of investment property for the year ended 31st March, 2019:

(` In Lacs)Particulars Building Gross carrying value as of 1st April, 2018 619.45Additions -Deletion -Gross carrying value as of 31st March, 2019 619.45Accumulated amortization as of 1st April, 2018 284.72Amortization expense 15.74Deletion -Accumulated amortization as of 31st March, 2019 300.46Carrying value as of 31st March, 2019 318.99

Following are the changes in the carrying value of investment property for the year ended 31st March, 2018:

(` In Lacs)Particulars Building Gross carrying value as of 1st April, 2017 619.45Additions -Deletion -Gross carrying value as of 31st March, 2018 619.45Accumulated amortization as of 1st April, 2017 268.86Amortization expense 15.86Deletion -Accumulated amortization as of 31st March, 2018 284.72Carrying value as of 31st March, 2018 334.73Carrying value as of 1st April, 2017 350.59

i) Amount recognised in profit and loss for investment properties

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Rental Income 36.00 43.50Direct 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 36.00 43.50Depreciation 15.74 15.86Profit from Investment Properties 20.26 27.64

ii) Fair Value

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Investment Properties 2,546.91 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 is based on the published Ready Reckoner rates, the company has classified the same under Level 2 of Fair value hierarchy.

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Annual Report 201979

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

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:

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Within one year 36.00 36.00Later than one year but not later than 5 years 57.00 93.00Later than 5 years - -

Initial direct costs incurred on these leasing transactions have been recognised in the Statement of Profit and Loss.

NOTE 4 : OTHER INTANGIBLE ASSETS

Following are the changes in the carrying value of acquired intangible assets for the year ended 31st March, 2019:

(` In Lacs)Particulars Trade Mark

- Provogue UK

Computer Software

Total

Gross carrying value as of 1st April, 2018 57.89 167.27 225.16Additions - - -Deletion - - -Gross carrying value as of 31st March, 2019 57.89 167.27 225.16Accumulated amortization as of 1st April, 2018 52.11 167.27 219.38Amortization expense 5.77 - 5.77Deletion -Accumulated amortization as of 31st March, 2019 57.88 167.27 225.15Carrying value as of 31st March, 2019 0.01 (0.00) 0.01

Following are the changes in the carrying value of acquired intangible assets for the year ended 31st March, 2018:

(` In Lacs)Particulars Trade Mark

- Provogue UK

Computer Software

Total

Gross carrying value as of 1st April, 2017 57.89 167.27 225.16 Additions - Deletion/Retirement - Gross carrying value as of 31st March, 2018 57.89 167.27 225.16 Accumulated amortization as of 1st April, 2017 46.33 167.25 213.58 Amortization expense 5.79 0.02 5.81 Deletion/Retirement - Accumulated amortization as of 31st March, 2018 52.12 167.27 219.39 Carrying value as of 31st March, 2018 5.77 (0.00) 5.77 Carrying value as of 1st April, 2017 11.56 0.02 11.58

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80

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

NOTE 5 : NON CURRENT INVESTMENTS

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Traded, Unquoted(Valued at cost unless stated otherwise)Investment in equity instruments of subsidiaries(All at face value of `10 each fully paid unless stated otherwise)Sporting & Outdoor Ad-Agency Private Limited # 125.98 125.984,18,102 Equity SharesMillenium Acessories Limited 1,559.79 1,559.7915,50,000 Equity SharesProfab Fashions Private Limited 505.00 505.004,50,000 Equity SharesProvogue Infrastructure Private Limited 6,195.38 6,195.3845,10,000 Equity SharesProvogue Holding Limited (Singapore) 4.44 4.449385 Ordinary Shares of S$ 1 fully paid upFaridabad Festival City Private Limited 441.01 441.014,11,355 Equity SharesAcme Adertisments Private Limited 1.00 1.0010,000 Equity SharesProvogue Personal Care Private Limited 132.84 132.8410,000 (PY 10,000) Equity SharesBrightland Developers Private Limited 21.31 21.3110,000 Equity SharesElite Team HK Limited 1,344.34 1,344.3452,90,425 (PY 50,00,000) Equity SharesProskins Fashions Private Limited (Formerly known as Proskins Fashions Limited)

5.00 5.00

50,000 Equity SharesInvestment in equity instruments of joint venturesProSFL Private Limited 5.67 5.6750,000 Equity SharesInvestment in equity instruments of step-down subsidiariesStandard Mall Private Limited 66.94 66.9410,000 Equity SharesInvestment in Limited Liability PartnershipPronet Interactive LLP 0.96 0.96Investment in Preference sharesSudharshan Procon Private Limited - 850.00(1,06,25,000 0% Non-Cumulative Compulsory Convertible Preference Shares of ` 10 each `8 paid up) (Refer Note 36(i))Investment in Debentures of SubsidiaryProvogue Personal Care Private Limited 1,003.11 1,003.11One 0% Fully Convertible Debenture of ` 650 Lacs each fully paid upNon-trade, QuotedInvestment in equity instrumentsAndhra Bank 1.27 1.874,505 Equity Shares of face value of ` 10 each fully paid up

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Annual Report 201981

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Prozone Intu Properties Limited 74.00 108.762,50,000 Equity Shares of `2 each

11,488.04 12,373.40Provision for permenent diminution in the value of investments # (125.98) (125.98)

(125.98) (125.98)11,362.06 12,247.42

Note:Aggregate Value of Unquoted Investments 11,286.79 12,136.79Aggregate Value of Quoted Investments 75.27 110.63Market Value of Quoted Investments 94.98 110.63

NOTE 6 : LOANS

Unsecured, considered good unless stated otherwise

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Loans and advances to related parties Unsecured, Considered Good 3,344.23 3,256.21 Unsecured, Considered Doubtful 61.77 61.77

3,406.00 3,317.98 Add / (Less) Provision for doubtful advances (61.77) (61.77)

(61.77) (61.77)3,344.23 3,256.213,344.23 3,256.21

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Details of Loans and advances to related parties : Unsecured, Considered Good- To subsidiary companies Faridabad Festival City Private Limited 146.15 56.07 Millennium Accessories Limited 56.55 58.60 Brightland Developers Private Limited 31.17 31.17 Provogue Infrastructure Pvt Ltd 1,080.03 1,080.03 Elite Team HK Limited (Hongkong) 1,882.83 1,882.83

- To step down subsidiary company Standard Mall Private Limited 145.58 145.58

- To Joint venture company ProSFL Private Limited 1.92 1.92

3,344.23 3,256.21

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NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Unsecured, Considered Doubtful- To subsidiary (Upto 17.10.2017) / associate (from 18.10.2017) Sporting and Outdoor Ad Agency Private Limited 61.77 61.77

3,406.00 3,317.98

NOTE 7 : OTHER FINANCIAL ASSETS

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Security Deposits 79.60 79.60

79.60 79.60

NOTE 8 : TAX EXPENSE

(a) Amounts recognised in Statement of Profit and Loss

(` In Lacs)Particulars 2018-19 2017-18 Deferred tax expense Origination and reversal of temporary differences 854.50 60.89Tax expense recognised in the statement of profit and loss 854.50 60.89

(b) Amounts recognised in other comprehensive income

Particulars 2018-19 2017-18 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

1.34 (0.47) 0.87 9.93 (2.47) 7.46

1.34 (0.47) 0.87 9.93 (2.47) 7.46

(c) Reconciliation of effective tax rate

(` In Lacs)Particulars 2018-19 2017-18Profit before tax (5,459.05) (22,556.89)Tax using the Company’s domestic tax rate (Current year 29.12% and Previous Year 27.55%)

(1,589.67) (6,214.99)

Tax effect of :Tax effect on reversal due to losses by the company 1,589.67 6,214.99Others 854.50 60.89Tax expense as per Statement of Profit & Loss 854.50 60.89Effective tax rate (15.65) (0.27)

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Annual Report 201983

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

(d) Movement in deferred tax balances

Particulars Net balances

at 1st April, 2018

Recognised in the

statement of profit and

loss

Recognised in OCI

Balance at 31st March, 2019 Net Deferred

tax assetDeferred

tax liabilities

Property, Plant and Equipments, investment property and intangible assets

1,224.16 1,224.16 - - - -

Financial assets (209.85) (209.85) - - - -Other Liabilities / provisions 25.12 25.12 - - - -Investments (184.46) (184.46) - - - -Borrowings - 0.47 (0.47) - - -Tax assets (liabilities) before set-off

854.97 855.43 (0.47) - - -

Set-off of deferred tax liabilities -Net deferred tax assets/ (liabilities)

-

Particulars Net balances

at 1st April, 2017

Recognised in the

statement of profit and

loss

Recognised in OCI

Balance at 31st March, 2018 Net Deferred

tax assetDeferred

tax liabilities

Property, Plant and Equipments, investment property and intangible assets

1,093.74 (130.42) - 1,224.16 1,224.16 -

Financial assets (19.40) 190.45 - (209.85) - 209.85Other Liabilities / provisions 20.94 (4.18) - 25.12 25.12 -Investments (177.88) 6.58 - (184.46) - 184.46Borrowings (1.54) (1.54) 2.47 - - -Tax assets (liabilities) before set-off

915.85 60.89 2.47 854.97 1,249.28 394.31

Set-off of deferred tax liabilities (394.31)Net deferred tax assets/ (liabilities)

854.97

(e) Tax Losses

(` In Lacs)Particulars 2018-19 2017-18Unused tax losses for which no deferred tax asset has been recognised

35,073.73 40,532.78

Potential tax benefit @ 29.12% (PY 27.55%) 10,213.47 11,167.79

NOTE 9 : INCOME TAX ASSETS (NET)

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Advance Tax & TDS (net of provision for tax) 441.01 398.08

441.01 398.08

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NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

NOTE 10 : INVENTORIES

(Valued at lower of cost or Net Realisable Value)

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Raw materials and components 688.92 643.60Finished goods 112.02 185.00Stock in trade 287.76 836.61Accessories & packing materials 7.84 8.06

1,096.54 1,673.27

NOTE 11 : CURRENT INVESTMENTS

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Unquoted Investments(valued at lower of cost and fair value, unless stated otherwise)Investments in Mutual Funds3,776.68 (PY 39,676) units of Reliance Money Manager Fund 38.07 400.70

38.07 400.70

Aggregate Value of Unquoted Investments 38.07 400.70

NOTE 12 : TRADE RECEIVABLES

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Unsecured, Considered Good 3,995.54 3,720.73Unsecured, Considered Doubtful 66.30 746.79

4,061.84 4,467.52Less : Provision for Doubtful Debts 66.30 746.79

3,995.54 3,720.73

NOTE 13 : CASH AND CASH EQUIVALENTS

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Balances with Banks in Current Accounts 556.51 541.00Cash on Hand 2.10 2.48

558.61 543.48

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Annual Report 201985

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

NOTE 14 : BANK BALANCES OTHER THAN CASH AND CASH EQUIVALENTS

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Balances with banks to the extent held as margin money 121.87 115.56

121.87 115.56

NOTE 15 : OTHER FINANCIAL ASSETS

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018GST refund receivable on export 122.06 31.13Export benefit receivable 220.70 269.08Other receivables 25.80 125.73

368.56 425.94

NOTE 16 : OTHER CURRENT ASSETS

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Service Tax Deposit under protest 139.74 139.74Input GST Credit 23.56 32.64Advance recoverable in cash or kind or for value to be received 50.61 176.08Prepaid expenses 3.70 6.64Premium on forward contract - 16.20

217.61 371.30

NOTE 17 : EQUITY SHARE CAPITAL

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Authorised3300.00 Lacs Equity Shares of `1 each 3,300.00 3,300.00

Issued, Subscribed and Fully Paid Up2333.82 Lacs 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

(` In Lacs)Particulars As at 31.03.2019 As at 31.03.2018

No. in Lacs ` In Lacs No. in Lacs ` In LacsEquity SharesAt the beginning of the year 2,333.82 2,333.82 1,143.57 1,143.57Issued during the year - - 1,190.25 1,190.25Outstanding at the end of the year 2,333.82 2,333.82 2,333.82 2,333.82

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NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

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:

(` In Lacs)Particulars As at 31.03.2019 As at 31.03.2018

No. in Lacs % holding No. in Lacs % holding Andhra Bank 464.29 19.89 464.29 19.89Bank of India 201.29 8.63 201.29 8.63Corporation Bank 196.64 8.43 197.91 8.48Central Bank of India 160.09 6.86 160.09 6.86Punjab National Bank 129.63 5.55 129.63 5.55

d) Other Information

(i) 29.00 Lacs 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 Lacs 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 Lacs 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 Lacs 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 Lacs Equity Shares of `2/- each have been reduced to 1143.57 Lacs Equity Shares of Re.1/- each

(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 9th August, 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 25th August, 2017.

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Annual Report 201987

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

NOTE 18 : OTHER EQUITY

(` In lacs)OTHER EQUITY :Particulars Reserves and Surplus Total

Capital Reserve

Securities Premium Reserve

Capital Redemption

Reserve

General Reserve

Retained Earnings

Other Comprehensive

Income

Balance as at 1st April, 2017

1,842.22 44,095.28 1,184.56 400.00 (28,620.43) 9.78 18,911.41

Total Comprehensive Income for the year

- (22,617.77) 7.46 (22,610.31)

Balance as at 31st March, 2018

1,842.22 44,095.28 1,184.56 400.00 (51,238.20) 17.24 (3,698.90)

Total Comprehensive Income for the year

- (6,313.54) 0.87 (6,312.68)

Balance as at 31st March, 2019

1,842.22 44,095.28 1,184.56 400.00 (57,551.75) 18.11 (10,011.58)

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

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

NOTE 19 : NON CURRENT BORROWINGS

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Term loan from banks (Secured) [Refer note 47] 3,568.11 3,568.11Less: Current maturities of long term debt (disclosed under other current liabilities)

3,568.11 3,568.11

- -

Term Loans from Banks includes :

3568.11 Lacs (PY ` 3568.11 Lacs) term loan from Bank of India carries interest @ Base Rate + 2.50% per annum. The loan is repayable in 60 stepped up monthly instalments 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.

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NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

NOTE 20 : OTHER FINANCIAL LIABILITIES

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Trade deposits 23.38 33.84

23.38 33.84

NOTE 21 : PROVISIONS

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Provision for gratuity 46.70 37.95

46.70 37.95

NOTE 22 : CURRENT BORROWINGS

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Working capital loans from banks [Refer note 47]Secured 12,285.59 12,424.92

12,285.59 12,424.92

Working Capital Loans from Banks includes:

Secured :

(a) Cash Credit Loan:

9086.82 Lacs (PY ` 9555.54 Lacs) (excluding interest)- 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:

2924.14 Lacs (PY `2,590.21 Lacs) (excluding interest) – 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) 274.63 Lacs (PY ` 279.17 Lacs) (excluding interest) 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)Particulars As at

31.03.2019 As at

31.03.2018Due to Micro, Small & Medium Enterprises 28.45 28.45Due to Others 1,844.96 1,702.53

1,873.41 1,730.98

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Annual Report 201989

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

The company had sought confirmation 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 :

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018The 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

NOTE 24 : OTHER FINANCIAL LIABILITIES

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Current maturities of long term debts 3,568.11 3,568.11Interest accrued & due on borrowing 12,364.38 8,394.41Trade deposits - 2.53

15,932.49 11,965.05

NOTE 25 : OTHER CURRENT LIABILITIES

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Employee benefits payable 144.37 146.92Duties & taxes payable 35.79 15.62Advance from customers 25.30 220.07

205.46 382.61

NOTE 26 : PROVISIONS

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Provision for leave encashment 11.39 10.86Provision for gratuity 7.35 7.29Provision for expenses 21.28 20.75

40.02 38.90

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NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

NOTE 27 : REVENUE FROM OPERATIONS

(` In Lacs)Particulars Year ended

31.03.2019Year ended 31.03.2018

Revenue from operations (gross)Sale of products 6,590.86 8,668.02

Other operating revenueRoyalty income 333.03 143.63Export benefits & incentives 141.85 366.15Gain on foreign exchange fluctuations (net) 195.24 -

7,260.98 9,177.80

NOTE 28 : OTHER INCOME

(` In Lacs)Particulars Year ended

31.03.2019Year ended 31.03.2018

Interest income on Bank deposits 6.62 28.70Dividend income on Current investments 6.75 24.21Net gain on sale of current investments 0.84 -Rent income 36.00 43.50Fair value gain / (loss) on Investments carried at fair value through profit & loss

(35.29) 14.90

Notional Interest income on financial assets carried at amortised cost - 434.72Notional Income on Corporate Guarantee Given - 5.00Profit on sale of fixed assets 6.11 -Miscellaneous Income 0.21 30.03

21.24 581.07

NOTE 29 : COST OF MATERIALS CONSUMED

(` In Lacs)Particulars Year ended

31.03.2019Year ended 31.03.2018

Raw Materials (Fabric)Opening stocks 643.60 2,232.70Add : Purchases 2,182.60 2,533.51

2,826.20 4,766.21Less : Closing stocks 688.92 643.60

2,137.28 4,122.61

Accessories & Packing MaterialsOpening Stocks 8.07 17.47Add : Purchases 37.59 40.30

45.66 57.77Less : Closing Stocks 7.85 8.07

37.81 49.70

2,175.09 4,172.31

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Annual Report 201991

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

NOTE 30 : PURCHASES OF STOCK - IN - TRADE

(` In Lacs)Particulars Year ended

31.03.2019Year ended 31.03.2018

Purchases of stock - in - trade 1,992.61 2,746.691,992.61 2,746.69

NOTE 31 : CHANGES IN INVENTORIES OF FINISHED GOODS, WORK IN PROCESS AND STOCK IN TRADE

(` In Lacs)Particulars Year ended

31.03.2019Year ended 31.03.2018

Opening 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

Less : Loss on sale of Obsolete inventories disclosed as exceptional items - 6,974.38Less : Closing Stocks - Work in Process - -- Finished Goods 112.02 185.00- Stock in trade 287.76 836.61

399.78 1,021.61621.83 9,795.46

NOTE 32 : EMPLOYEE BENEFITS EXPENSE

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Salaries, wages & bonus 400.50 437.74Directors' remuneration 13.47 54.00Contribution to provident & other funds 16.75 25.55Workmen & staff welfare 12.57 21.32

443.29 538.61

NOTE 33 : FINANCE COSTS

(` In Lacs)Particulars Year ended

31.03.2019Year ended 31.03.2018

Interest expense 4,131.01 3,193.62Bank Charges 23.53 83.51

4,154.54 3,277.13

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NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

NOTE 34 : DEPRECIATION AND AMORTISATION EXPENSE

(` In Lacs)Particulars Year ended

31.03.2019Year ended 31.03.2018

Depreciation of Property,Plant & Equipment 38.14 235.70Depreciation on Investment Property 15.74 15.86Amortisation on Intangible Assets 5.77 5.81

59.65 257.37

NOTE 35 : OTHER EXPENSES

(` In Lacs)Particulars Year ended

31.03.2019Year ended 31.03.2018

Processing charges 1,281.68 1,588.83Rent 140.95 139.04Rates & taxes 35.69 75.62Insurance 33.08 45.92Repairs and maintenance 19.11 35.46Electricity charges 42.89 53.33Common area maintenance expenses 37.06 31.64Studio expenses 3.50 7.53Printing & stationery 12.30 20.37Communication costs 20.04 43.51Legal & professional fees 150.26 128.14Travelling & conveyance 58.74 83.24Commission 59.29 79.65Advertisement & sales promotion expenses 35.11 109.93Auditors' remuneration 10.00 10.00Transportation, freight & handling charges 202.63 331.36Loss on sale/discard of fixed assets - 136.06Loss on sale of investments - 7.26Loss on foreign exchange fluctuations (net) - 175.21Provision for doubtful advances - 850.00Advances and other financial assets no longer recoverable written off - 541.58Interest and penalties on delay in payment of statutory dues 0.51 21.41Miscellaneous expenses 12.63 38.71

2,155.47 4,553.80

Payments to Auditor

(` In Lacs)Particulars Year ended

31.03.2019Year ended 31.03.2018

Audit fees 10.00 10.0010.00 10.00

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Annual Report 201993

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

NOTE 36 : EXCEPTIONAL ITEMS

(` In Lacs)Particulars Year ended

31.03.2019Year ended 31.03.2018

i) Loss on forfeiture of investments in partly paid up 0% Non-Cumulative Compulsory Convertible Preference Shares

850.00 -

ii) Claims admitted during CIRP period which were written back in earlier years

288.79 -

iii) Loss on sale of obsolete inventories - 6,974.381,138.79 6,974.38

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)Particulars Year ended

31.03.2019Year ended 31.03.2018

i) Weighted average number of Equity Shares of ` 1 each a) Number of shares at the beginning of the year 2,333.82 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 2,333.82

ii) Net Profit after tax available for equity shareholders (6,313.54) (22,617.77)iii) Basic Earning Per Share (2.71) (9.69)iv) Diluted Earning Per Share (2.71) (9.69)

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 38 : 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

ii. Amounts recognised in profit or loss

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Lease expense 140.95 139.04Contingent rent expense - -

140.95 139.04

Initial direct costs incurred on these leasing transactions have been recognised in the Profit and Loss Account.

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NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

NOTE 39 : CONTINGENT LIABILITIES NOT PROVIDED FOR :

(` In Lacs)Sr. No.

Particulars As at 31.03.2019

As at 31.03.2018

a) Guarantee given by Banks on behalf of the Company - 649.98b) Corporate Guarantee given on behalf of a Subsidiary Company 500.00 500.00c) Uncalled liability on investments in preference shares partly paid - 212.50d) Sales Tax Liability contested in appeals 134.73 115.49e) 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. 1st June, 2007, the Company continues not to provide for the retrospective levy aggregating to ` 279.47 Lacs for the period 1st June, 2007 to 30th September, 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 14th October, 2011 passed by the Hon'ble Supreme Court of India)

279.47 279.47

f) Disputed demand of income Tax 365.58 292.57g) Disputed demand of Tax Deducted at Source (TDS) 189.12 189.12h) Disputed demand of Service Tax 36.42 36.42i) Claims against the Company, not acknowledged as debt 1,427.69 285.11

NOTE 40 : EMPLOYEE BENEFIT EXPENSES

Post Employment Benefit Plans:

Defined Contribution Scheme

(` In Lacs)Amount recognised in the Statement of Profit and Loss 2018-19 2017-18Contribution to Provident fund and others 16.75 25.55

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:

(` In Lacs)Particulars Defined Benefit Plans

As at 31.03.2019

As at 31.03.2018

Present value of funded obligations 69.90 59.86Fair Value of plan assets 15.85 14.62Net (Asset)/Liability recognised 54.05 45.24

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Annual Report 201995

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

Movements in plan assets and plan liabilities

(` In Lacs)Particulars Present

value of obligations

Fair Value of plan assets

As at 1st April, 2018 59.86 14.62Current service cost 5.70 -Transfer in/(out) obligation 1.31 -Past service cost - -Interest Cost/(Income) 4.23 1.09Return on plan assets excluding amounts included in net finance income

- 0.14

Actuarial (gain)/loss arising from changes in financial assumptions 1.24 -Actuarial (gain)/loss arising from experience adjustments (2.44) -Employer contributions - -Benefit payments - -As at 31st March, 2019 69.90 15.85

(` In Lacs)Particulars 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

- (0.02)

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

Statement of Profit and Loss

(` In Lacs)Employee benefit expenses : 2018-19 2017-18Current Service cost 5.70 7.26Interest cost/ (Income) 3.14 2.72Past service cost and loss/(gain) on curtailments and settlement - 0.89Expected return on Plan Assets - -Total amount recognised in Statement of P&L 8.84 10.88Remeasurement of the net defined benefit liability : Return on plan assets excluding amounts included in net finance income/(cost)

(0.14) 0.02

Change in Financial Assumptions 1.24 (1.93)Experience gains/(losses) (2.44) (5.55)Total amount recognised in Other Comprehensive Income (1.34) (7.46)

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96

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

Investment pattern for Fund as on

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Government 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:

(` In Lacs)Financial Assumptions As at

31.03.2019 As at

31.03.2018Discount rate 7.20% 7.55%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 31.03.2019Increase/Decrease in liability

Discount rate varied by 0.5%0.50% 68.14-0.50% 71.75Salary growth rate varied by 0.5%0.50% 71.39-0.50% 68.16Withdrawal rate (W.R.) varied by 10%W.R.* 110% 70.40W.R.* 90% 69.34

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Annual Report 201997

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

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, 2019 were as follows:

(` In Lacs)Expected contribution Cashflow %Projected benefits payable in future years from the date of reporting2020 8.17 8.00%2021 6.70 6.70%2022 6.60 6.50%2023 7.48 7.30%2024 6.31 6.20%2025-2029 39.62 38.70%

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

Segment Reporting Results

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.20181. Segment Revenuea. Domestic 3,351.89 3,792.46b. Exports 3,909.09 5,385.34Gross Sales / Income from Operations 7,260.98 9,177.80

2. Segment Results Profit before tax and interest for each segment a. Domestic 174.32 (10,235.14)b. Exports 417.53 (9.51)Sub Total 591.85 (10,244.65)Less : i) Finance Cost 4,154.54 3,277.13 ii) Un-allocable expenses net off income 757.56 2,072.68 iii) Exceptional Item 1,138.79 6,974.38Total Profit before Tax (5,459.05) (22,568.84)Less : Tax Expenses 854.50 60.89Net Profit / (Loss) (6,313.54) (22,629.73)

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98

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.20183. Segment Assetsa. Domestic 1,390.47 1,566.05b. Exports 6,292.48 6,645.42Unallocated Capital Employed 15,046.34 16,996.72Total 22,729.29 25,208.19

4. Segment Liabilitiesa. Domestic 26,961.03 23,926.27b. Exports 3,446.02 3,138.96Unallocated Capital Employed - -Total 30,407.05 27,065.23

NOTE 42 : RELATED PARTY DISCLOSURES AS REQUIRED UNDER INDIAN ACCOUNTING STANDARD 24, “RELATED PARTY DISCLOSURES” ARE GIVEN BELOW:

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)

A) Key Management Personnel (KMP) and their relatives

Mr. Nikhil Chaturvedi Managing Director Mr. Deep Gupta Whole Time Director & CFO Mr. Akhil Chaturvedi Whole Time Director Mr. Salil Chaturvedi Director Mr. Dinesh Arya (up to 30th March, 2019) Director Ms. Gauri Pote (up to 30th March, 2019) Director Mr. Hetal Vasant Hakani Director Mr. Vishant Shetty (up to 17th April, 2019) Company Secretary Mr. Vishal Menon (from 18th April, 2019) Company Secretary

b) Subsidiaries / Step down Subsidiaries :- 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)

c) Joint Ventures/ Associates

ProSFL Private Limited Sporting and Outdoor Ad Agency Private Limited (From 17th October, 2017)

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Annual Report 201999

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

d) Entity having common Key Managerial Personnel

Prozone Intu Properties Limited

Particulars 31.03.2019 31.03.2018

(I) Transactions

Purchase of Goods /Services

Subsidiaries

Provogue Personal Care Private Limited 7.22 5.29

Acme Advertisement Private Limited 9.85

Sale of Goods / Services

Subsidiaries

Proflippers India Pvt Ltd 25.00

Entity having common Key Managerial Personnel

Prozone Intu Properties Limited 36.00 36.00

Remuneration to Key Management Personnel

Mr. Deep Gupta 56.34 54.00

Mr. Vishant Shetty 7.04 4.80

Loans given

Subsidiaries

Provogue Personal Care Private Limited - 75.29

Faridabad Festival City Private Limited 90.08 -

Provogue Infrastructure Private Limited - 72.73

Repayments of Loans given

Subsidiaries

Millennium Accessories Limited 2.05 32.00

Brightland Developers Private Limited - 38.50

Elite Team HK Limited - 29.11

Faridabad Festival City Private Limited - 10.55

Director Sitting fees paid

Mr. Dinesh Arya 0.50 1.00

Ms. Gauri Pote 0.20 0.40

Ms. Hetal Vasant Hakani 0.50 0.75

(II) Balance outstanding at the end of the year

Receivables

Entity having common Key Managerial Personnel

Prozone Intu Properties Limited 25.80 85.73

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100

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

Particulars 31.03.2019 31.03.2018

Loans given Subsidiaries Faridabad Festival City Private Limited 146.15 56.07 Millennium Accessories Limited 56.55 58.60 Brightland Developers Private Limited 31.17 31.17 Provogue Infrastructure Pvt Ltd 1,080.03 1,080.03 Elite Team HK Limited (Hongkong) 1,882.83 1,882.83 Standard Mall Private Limited 145.58 145.58

Associate Company Sporting and Outdoor Ad Agency Private Limited 61.77 61.77

Joint Ventures ProSFL Private Limited 1.92 1.92

Payables Key Managerial Personnel Mr. Nikhil Chaturvedi 17.45 17.45 Mr. Salil Chaturvedi 22.48 22.48 Mr. Deep Gupta 3.56 3.56

Note: Related Parties are as disclosed by the Management and relied upon by the auditors.

NOTE 43 : 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.

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Annual Report 2019101

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

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102

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

NOTE 43 : 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)Particulars As at

31.03.2019 As at

31.03.2018Borrowing bearing variable interest rate 28,218.08 24,387.44Total of Variable Rate Financial Liabilities 28,218.08 24,387.44

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 lossINR 50 bp

increase50 bp

decrease31st March, 2019Variable-rate loan instruments (141.09) (141.09)Cash flow sensitivity (net) (141.09) (141.09)

31st March, 2018Variable-rate loan instruments (121.94) (121.94)Cash flow sensitivity (net) (121.94) (121.94)

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.

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Annual Report 2019103

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

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 31st March, 2019 and 31st March, 2018 are as below:

(Foreign Currency in Lacs)31st March, 2019 USD EUROFinancial assets Trade receivables 46.82 0.71Net exposure for assets 46.82 0.71

Financial liabilities Foreign Currency Borrowings (Including Current Maturities) - -Net exposure for liabilities - -Net exposure (Assets - Liabilities) 46.82 0.71

(Foreign Currency in Lacs)31st March, 2018 USD EUROFinancial assets Trade receivables 48.31 0.84Net 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

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 directly 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.

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104

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

Profit or lossEffect in INR (before tax) Strengthening WeakeningFor the year ended 31st March, 20195% movement USD 161.93 (161.93)EURO 2.76 (2.76)

164.69 (164.69)

Profit or lossEffect in INR (before tax) Strengthening WeakeningFor the year ended 31st March, 20185% movementUSD 156.54 (156.54)EURO 2.90 (2.90)

159.44 (159.44)

Particulars of hedged and unhedged foreign currency exposures as at the reporting date

As at 31st March, 2019

(Foreign Currency in Lacs)USD EURO

Trade Receivables 46.82 0.71Less : Foreign currency forward contracts (Sell) - -Unhedged Receivable 46.82 0.71

Borrowings - -Less : Foreign currency forward contracts (Buy) - -Unhedged Payable - -

As at 31st March, 2018

(Foreign Currency in Lacs)USD EURO

Trade Receivables 48.31 0.84Less : Foreign currency forward contracts (Sell) 44.17Unhedged Receivable 4.14 0.84

Borrowings - -Less : Foreign currency forward contracts (Buy) - -Unhedged Payable - -

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.

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Annual Report 2019105

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

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 instruments covered below is restricted to their respective carrying amount.

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 probability 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 occurring 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 increase 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 attempt to recover the receivable due, When recoverables are made, these are recognised as income in the statement of profit and loss.

The Company measures the expected credit loss of trade receivables 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

31.03.2019 As at

31.03.20180 - 6 months 2,854.35 3,672.896 - 12 months 887.43 38.27Beyond 12 months 320.06 9.57Total 4,061.84 3,720.73

Financial Assets are considered to be of good quality and there is no significant increase in credit risk.

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106

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

Movements in provision of doubtful debts

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Opening provision 746.79 894.12Add : Additional provision made / reversed / written off (680.48) (147.33)Closing provisions 66.31 746.79

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, 2019 Total Upto 1

year1-5 years More

than 5 years

Borrowings 12,285.59 12,285.59 - -Trade and other payables 1,873.41 1,873.41 - -Other Financial Liabilities (Current & Non Current) 15,955.87 15,932.49 23.38 -

31st March, 2018 Total Upto 1 year

1-5 years More than 5 years

Borrowings 12,424.92 12,424.92 - -Trade and other payables 1,730.98 1,730.98 - -Other Financial Liabilities (Current & Non Current) 11,998.89 11,965.05 33.84 -

NOTE 44 : 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 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.

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Total Debt 28,218.08 24,387.44Total Equity (7,677.76) (1,365.08)Total debt to equity ratio (Gearing ratio) 1.37 1.06

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Annual Report 2019107

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

NOTE 45 : DISCLOSURE WITH REGARDS TO SECTION 186 (4) OF THE COMPANIES ACT, 2013 :

i) For Investment refer note no. 05

ii) For Corporate Guarantees given refer note no. 39(b)

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 :

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Wholly Owned Subsidiaries 3,196.16 3,198.21Subsidiaries and Joint Ventures / associates 209.84 119.77Total 3,406.00 3,317.98

NOTE 46 :

The Company has a financial involvement aggregating 11,256.31 Lacs via investments / loans in various subsidiaries / step-down subsidiaries / Joint Venture. These Subsidiaries have made heavy losses and have uncertainity regards to realisation of assets of subsidiaries and the net worth of few subsidiaries have substantially eroded. The Company is in Corporate Insolvency Resolution Process to revamp its business in the Group, accordingly no provision is made against the aforesaid amounts at this stage. The Auditor has also provided a modified opinion in this regard.

NOTE 47 :

The Company has incurred losses during the current and previous years, the Company has accumulated losses and its net worth has been fully eroded. During the financial year 2015-16, the credit facilities of the Company have been classified under SMA-2 category with banks. On 25th January, 2016, vide Joint Lender’s Forum (JLF) meeting, Strategic Debt Restructuring (SDR) has been invoked as per RBI guidelines. Pursuant to SDR Scheme, the Company on 9th August, 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 25th August, 2017. The investors proposal under SDR was not approved by lenders.

Further, In accordance with the applicable provisions of the Insolvency and Bankruptcy Code 2016, (IBC), the Andhra Bank, in its capacity as financial creditor has filed a petition under IBC with the Honourable National Company Law Tribunal, Mumbai Branch (NCLT). The NCLT vide its order dated 25th July, 2018 admitted the Corporate Insolvency Resolution Process (CIRP) in respect of the Company and appointed Mr. Jitendra R Yadav, as the Interim Resolution Professional (IRP) in terms of the IBC. However, the committee of creditors in the first meeting held on 24th August, 2018 decided to appoint Mr. Amit Gupta, as the Resolution Professional (‘RP’) of the Company. The appointment of Mr. Amit Gupta was confirmed by NCLT order dated 26th September, 2018. On appointment of the RP under the Code, the powers of the Board of Directors of the Company were suspended.

NOTE 48 :

During the year, the Company has retrospectively provided interest on the borrowings outstanding which have been classified as "Non-Performing Assets" (NPA) by the banks and reinstated finance cost along with corresponding impacts as follows :

(` In Lacs) Particulars As reported Adjustments As

reinstated Finance costs 1,480.55 (1,796.58) 3,277.13Exceptional items 1,722.04 (5,252.34) 6,974.38Net Profit / (Loss) for the period (15,548.42) 7,081.31 (22,629.73)Total Comprehensive Income (15,540.96) 7,081.31 (22,622.27)Other Equity 2,878.50 6,577.40 (3,698.90)Borrowings 14,241.93 1,817.01 12,424.92Other financial liabilities (Interest accrued) 3,570.64 (8,394.41) 11,965.05

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108

NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2019

NOTE 49 :

The Company has regrouped, reclassified and/ or rearranged previous year figures, wherever necessary to conform to current year classification

As per our report of even date attached

For Ajay Shobha & Co. For Provogue (India) LimitedChartered Accountants

Ajaykumar Gupta CA Amit Gupta Nikhil Chaturvedi Deep GuptaPartner Resolution Professional Managing Director Whole-time Director & CFO Mem. No. : 53071 R. No.: IBBI/IPA-001/IP-

P00016/2016-17/10040DIN No. : 00004983 DIN No. : 00004788

Place : Mumbai Vishal MenonDate : 30th May, 2019 Company Secretary

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Annual Report 2019109

ANNEXURE-IStatement of Impact of Audit Qualification (for audit report with modified opinion) submitted along-with

Annual Audited Financial Results - Standalone

Statement of Impact of Audit Qualification for the Financial Year ended 31st March, 2019 [See Regulation 33/52 of the SEBI (LODR) (Amendment) Regulations, 2016]

I. Sr No

Particulars Audited Figures (as reported

before adjusting for qualifications)

Adjusted Figures (as reported before

adjusting for qualifications)*

1 Turnover / Total income 7,282.22 7,282.222 Total Expenditure 11,602.48 11,602.483 Net Profit/(Loss) (6,313.54) (6,313.54)4 Earnings Per Share (2.71) (2.71)5 Total Assets 22,729.29 22,729.296 Total Liabilities 30,407.05 30,407.057 Net Worth (7,677.76) (7,677.76)8 Any other financial item(s) (as felt appropriate by the

management)

* Unable to estimate the impact

II. Audit Qualification:

a. Details of Audit Qualification : The Company has a financial involvement aggregating ` 11,256.33 Lacs via Investment/loans in various subsidiaries/ step-down subsidiaries/ Joint Venture. These subsidiaries have made heavy losses and have uncertainty regards to realisation of assets of subsidiaries and the net worth of few subsidiaries have substantially eroded.

b. Type of Audit Qualification : Qualified Opinion

c. Frequency of qualification : First Time

d. For Audit Qualification(s) where the impact is quantified by the auditor, Management’s Views: Not Quantified

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management’s estimation on the impact of audit qualification:

ii. If management is unable to estimate the impact, reasons for the same: The Company is under Corporate Insolvency Resolution Process to revamp its business in the Group, accordingly no provisions is made against the aforesaid amounts at this stage.

iii. Auditors’ Comments on (i) or (ii) above : We are unable to comment on this.

III. Signatories: For Ajay Shobha & CoChartered Accountants

Firm Registration No. 317031ESd/-CA. Amit Gupta Sd/-309, Crescent Business Park, Ajay GuptaSakinaka Telephone Exchange Lane, Sakinaka, PartnerAndheri (East), Mumbai-400072 Mem. No.053071Email: [email protected]@gmail.com Date : 30-05-2019IBBI Registration No.: IBBI/IPA-001/IP-P00016/2016-17/10040 Place: Mumbai

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110

INDEPENDENT AUDITOR’S REPORT

To

the Members of Provogue (India) Limited

Report on the Audit of the Consolidated Ind AS Financial Statements

Qualified Opinion

We have audited the accompanying consolidated Ind AS financial statements of Provogue (India) Limited (hereinafter referred to as the ‘Holding Company”) and its subsidiaries (Holding Company and its subsidiaries together referred to as “the Group”), its associates and jointly controlled entities, which comprise the consolidated Balance Sheet as at 31st March, 2019, and the consolidated statement of Profit and Loss (including other comprehensive income), the consolidated cash flows Statement the consolidated statement of changes in equity for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies (hereinafter referred to as “the consolidated financial statements”).

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 31st March, 2019, and their consolidated profit (including other comprehensive income), their consolidated cash flows and consolidated changes in equity for the year ended on that date.

Material Uncertainty Related to Going Concern

Attention is invited to Note No. 48 in the consolidated financial statements which indicate that the Company has incurred losses during the current and previous years, the Company has accumulated losses and its net worth has been fully eroded. Further, the credit facilities of the Company have also been classified as sub-standard (Non Performing Assets) as per RBI guidelines and the lenders have filed a petition under Insolvency and Bankruptcy Code, 2016 (IBC) with the Hon’ble National Company Law Tribunal, Mumbai Branch (NCLT). These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern. However, the financial statements of the Company have been prepared on a going concern basis for the reasons stated in the said note in respect of initiation of Corporate Insolvency Resolution Process (CRIP).

Basis for Qualified Opinion

As explained in Note 47 to the consolidated financial statements regarding the Company’s financial

involvement aggregating ` 4814.50 Lacs in the investments / advances through a subsidiary which have an uncertainty regards to realization of the said assets. The Company has not provided any provision regards to impairment of these assets as stated in the note. Accordingly, we are unable to comment upon the resultant effect of same on the Assets, Liability and Loss of the company

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies act, 2013. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Code of Ethics issued by ICAI together with the ethical requirements that are relevant to our audit of the Consolidated Financial Statements under the provisions of the Act and the rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with the provisions of the Companies Act, 2013. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. During the course of our audit, we have determined that there are no key audit matters to communicate in our report except for the matters prescribed in Basis of Qualified Opinion & Material Uncertainty Related to Going Concern section.

Information Other than the Financial Statements and Auditor’s Report Thereon

The Holding Company’s Board of Directors / Management is responsible for the other information. The other information comprises the information included in the Board / Management Report, Report on Corporate governance and Business Responsibility report but does not include the Consolidated Financial Statements and our auditor’s report thereon.

Our opinion on the Consolidated Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Consolidated Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the

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Annual Report 2019111

Consolidated Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

In accordance with the applicable provisions of the Insolvency and Bankruptcy Code 2016, (IBC), The Andhra Bank, in its capacity as financial creditor has filed a petition under IBC with the Honorable National Company Law Tribunal, Mumbai Banch (NCLT). The NCLT vide its order dated 25th July, 2018 admitted the Corporate Insolvency Resolution Process (CIRP) in respect of the Company and appointed Mr. Jitendra R Yadav, as the Interim Resolution Professional (IRP) in terms of the IBC. However, the committee of creditors in the first meeting held on 24th August, 2018 decided to appoint Mr. Amit Gupta, as the Resolution Professional (‘RP’) of the Holding Company. The appointment of Mr. Amit Gupta was confirmed by NCLT order dated 26th September, 2018. On appointment of the RP under the Code, the powers of the Board of Directors of the Holding Company were suspended.

The Holding Company’s Board of Directors / Management is responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these consolidated financial statements in term of the requirements of the Companies Act, 2013 that give a true and fair view of the consolidated state of affairs (consolidated financial position), consolidated profit or loss (Consolidated financial performance including other comprehensive income), consolidated changes in equity and consolidated cash flows of the Group including its Associates and Jointly controlled entities in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act. The respective Board of Directors / Management of the companies included in the Group and of its associates and jointly controlled entities 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 accuracy and completeness of the accounting records, relevant to the preparation and presentation of the 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 financial statements by the Directors / Management of the Holding Company, as aforesaid.

In preparing the consolidated financial statements, the respective Board of Directors of the companies included in the Group and of its associates and jointly controlled entities are responsible for assessing the ability of the Group and of its associates and jointly controlled entities to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. The management is also responsible for overseeing the Company’s financial reporting process.

The respective Board of Directors of the companies included in the Group and of its associates and jointly controlled entities are responsible for overseeing the financial reporting process of the Group and of its associates and jointly controlled entities.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

1. Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

2. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the Group has adequate internal financial controls system in place and the operating effectiveness of such controls.

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112

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group and its associates and jointly controlled entities to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group and its associates and jointly controlled entities to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group and its associates and jointly controlled entities to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the audit of the financial statements of such entities included in the consolidated financial statements of which we are the independent auditors. For the other entities included in the consolidated financial statements, which have been audited by other auditors, such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion.

3. We communicate with those charged with governance of the Holding Company and such other entities included in the consolidated financial statements of which we are the independent auditors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

4. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to

bear on our independence, and where applicable, related safeguards.

5. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matters

We did not audit the financial statements of one subsidiaries viz Elite Team (HK) Limited (Hong Kong) whose financial statements reflect total assets of ` 4482.47 Lacs as at 31st March, 2019, total revenues of ` 1675.57 Lacs and net cash inflows amounting to ` 65.25 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.

Emphasis of Matter

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

i) We draw attention to Note 48 of the consolidated financial statements in respect of initiation of Corporate Insolvency Resolution Process (CRIP) and the preparation of consolidated financial statements on going concern basis for the reasons stated therein.

ii) Note 40 (d) to the consolidated financial statements regarding non provision of service tax for the period from 01st June, 2007 to 30th September, 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.

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Annual Report 2019113

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act, 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 financial statements.

b. Except the possible effects of the matter described in the Basis for Qualified Opinion paragraph, in our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated 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, and the Consolidated Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements.

d. Except the possible effects of the matter described in the Basis for Qualified Opinion paragraph, in our opinion, the aforesaid consolidated financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.

e. The matter described in the Basis for Qualified Opinion, Emphasis of Matters and Material uncertainty relating to going concern assumption paragraph above, in our opinion, may have an adverse effect on the functioning of the Group;

f. On the basis of the written representations received from the directors of the Holding Company as on 31st March, 2019 and the reports of the statutory auditors of its subsidiary companies, associate companies and jointly controlled companies incorporated in India, none of the directors of the Group companies, its associate companies and jointly controlled companies incorporated in India is disqualified as on 31st March, 2019 from being appointed as a director in terms of Section 164 (2) of the Act. However, this was not taken on record by the Board of Directors of the Holding Company as Corporate Insolvency Resolution process (CIRP) is initiated against the Holding Company and the powers of the Board are suspended during the CIRP.

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 internal financial controls over financial reporting of the Group and the operating effectiveness of such controls, refer to our separate report in Annexure A.

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 Auditor’s) 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, its associates and jointly controlled entities– Refer Note 40 to the consolidated financial statements.

ii. The Group, its associates and jointly controlled entities did not have any material foreseeable losses on long-term contracts including derivative contracts.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Holding Company and its subsidiary companies, associate companies and jointly controlled companies incorporated in India.

2. In our opinion and according to the information and explanations given to us and the reports of the statutory auditors of its subsidiary companies, associate companies and jointly controlled companies incorporated in India, the remuneration paid by the Group Companies to its directors, if any, during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director, if any, is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.

For Ajay Shobha & Co.

Chartered Accountants

Firm Reg. No. 317031E

Ajaykumar Gupta

Place : Mumbai Partner

Date : 30th May, 2019 Mem. No. : 53071

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114

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 31st March, 2019, 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 Controls

The 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 Responsibility

Our 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 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 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.

ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT

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Annual Report 2019115

Opinion

In our opinion, to the best of our information and according to the explanations given to us, 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 31st March, 2019, 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.

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

Ajaykumar Gupta

Place : Mumbai PartnerDate : 30th May, 2019 Mem. No. : 53071

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116

CONSOLIDATED BALANCE SHEET as at 31st March, 2019

(` In Lacs) Particulars Notes As at

31.03.2019 As at

31.03.2018ASSETSNon-current assetsProperty, Plant and Equipment 2 2,546.84 2,663.75Investment Property 3 445.71 464.66Other Intangible assets 4 - 5.77Goodwill on Consolidation 2,776.39 2,776.39Financial Assets Non Current Investments 5 1,275.26 4,410.62 Other financial assets 6 80.60 80.60Deferred tax assets (net) 7 - 1,421.99Income Tax Assets (net) 8 462.11 411.00Other non-current assets 9 691.35 704.80

8,278.25 12,939.58Current assets Inventories 10 1,102.73 1,743.63Financial Assets Current Investments 11 37.99 587.26 Loans 12 33.74 287.23 Trade receivables 13 6,788.84 6,907.20 Cash and cash equivalents 14 615.97 680.78 Bank balances other than Cash and cash equivalents 15 312.60 294.31 Other financial assets 16 368.56 425.94Other current assets 17 484.66 3,107.25

9,745.09 14,033.60 18,023.34 26,973.18EQUITY AND LIABILITIESEQUITYEquity Share capital 18 2,333.82 2,333.82Other Equity 19 (15,748.29) (6,100.08)Equity attributable to Owners (13,414.47) (3,766.26)Non Controlling interest (258.69) (822.45)Total Equity (13,673.16) (4,588.71)LIABILITIES Non-current liabilities Financial Liabilities Non Current Borrowings 20 - 2,863.89 Other financial liabilities 21 23.38 36.34Provisions 22 46.70 40.41

70.08 2,940.64Current liabilities Financial Liabilities Current Borrowings 23 12,975.57 13,314.79 Trade payables 24 2,336.27 2,639.87 Other financial liabilities 25 16,021.53 11,965.05Provisions 26 40.03 60.62Other current liabilities 27 253.02 640.92

31,626.42 28,621.25 18,023.34 26,973.18

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

As per our report of even date attached

For Ajay Shobha & Co. For Provogue (India) LimitedChartered Accountants

Ajaykumar Gupta CA Amit Gupta Nikhil Chaturvedi Deep GuptaPartner Resolution Professional Managing Director Whole-time Director & CFO Mem. No. : 53071 R. No.: IBBI/IPA-001/IP-

P00016/2016-17/10040DIN No. : 00004983 DIN No. : 00004788

Place : Mumbai Vishal MenonDate : 30th May, 2019 Company Secretary

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Annual Report 2019117

(` In Lacs) Particulars Notes Year ended

31.03.2019Year ended 31.03.2018

INCOMERevenue from operations 28 8,975.33 12,685.03Other income 29 120.43 233.49Total income 9,095.76 12,918.52

EXPENSESCost of materials consumed 30 2,175.09 4,172.32Purchases of stock - in - trade 31 3,596.93 6,125.28Changes in inventories of finished goods, work in process and stock in trade

32 686.00 8,917.48

Employee benefits expense 33 550.57 668.32Finance costs 34 4,377.79 3,598.80Depreciation and amortisation expense 35 144.96 369.83Other expenses 36 2,284.26 5,598.65Total expenses 13,815.60 29,450.68Profit / (Loss) before exceptional items and tax (4,719.84) (16,532.16)Exceptional items 37 3,388.79 7,968.61Profit / (Loss) before tax (8,108.63) (24,500.77)Less : Tax expenses - Current tax - - - Deferred tax liability / (asset) 1,421.99 183.35 - Tax of earlier years (21.03) 33.78Total tax expense 1,400.96 217.13Profit / (Loss) for the year (9,509.59) (24,717.90)Other Comprehensive IncomeA) Items that will not be reclassified subsequently to profit or lossActuarial gain or loss on defined benefit plan transferred from profit and loss

1.34 9.93

Income tax on above (0.47) (2.47)0.87 7.46

Other comprehensive income for the year 0.87 7.46Total comprehensive income for the year (9,508.72) (24,710.44)Net Profit/(Loss) attributable to :- Owners (9,244.76) (24,324.78)- Non Controlling Interest (264.83) (393.12)Total comprehensive income/ (loss) attributable to :- Owners (9,243.89) (24,317.32)- Non Controlling Interest (264.83) (393.12)Earnings per equity share 38Nominal value of share `1 : Basic (4.07) (10.59) : Diluted (4.07) (10.59)

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

As per our report of even date attached

For Ajay Shobha & Co. For Provogue (India) LimitedChartered Accountants

Ajaykumar Gupta CA Amit Gupta Nikhil Chaturvedi Deep GuptaPartner Resolution Professional Managing Director Whole-time Director & CFO Mem. No. : 53071 R. No.: IBBI/IPA-001/IP-

P00016/2016-17/10040DIN No. : 00004983 DIN No. : 00004788

Place : Mumbai Vishal MenonDate : 30th May, 2019 Company Secretary

CONSOLIDATED STATEMENT OF PROFIT AND LOSS for the year ended 31st March, 2019

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118

(` In Lacs) Particulars Year ended

31.03.2019 Year ended 31.03.2018

OPERATING ACTIVITIESProfit / (Loss) before exceptional items and tax (4,719.84) (16,532.16)

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

Finance Cost 4,377.79 3,598.80Depreciation and Amortisation expenses 144.96 369.83(Profit)/ Loss on sale / discard of fixed assets (6.11) 142.75

Provision for Doubtful Debts - 48.76Advances and other financial assets no longer recoverable written off 10.38 1,993.71Interest Income (21.68) (56.74)Dividend Income (7.71) (29.67)Liabilities no longer payable written back (5.60) (0.45)Bad debts - 148.78Income on Investments carried at fair value through profit & loss 35.36 (14.91)Interest received on financial assets carried at amortised cost - (8.36)Net (Gain)/Loss on investments (0.71) 23.87Exchange differences on translation of assets and liabilities 131.29 28.05Unrealised (Gain)/Loss on foreign exchange fluctuations (net) 5.31 8.97

Working capital adjustments:-(Increase) / Decrease in Other Assets (8.47) 881.17(Increase) / Decrease in Inventories 640.90 10,515.99(Increase) / Decrease in Non- current Financial Asset - (1,724.14)(Increase) / Decrease in Trade and other Receivables 113.05 1,341.74(Increase) / Decrease in Bank balances other than Cash and cash equivalents

(18.29) 352.30

Increase / (Decrease) in Other Financial Liabilities (15.49) (220.06)Increase / (Decrease) in Provisions (12.96) (45.56)Increase / (Decrease) in Trade and other Payables (586.79) (1,079.16)Increase / (Decrease) in Other Current Liabilities (387.90) (156.05)

(332.52) (412.54)Income taxes paid (30.08) 131.30

Net cash flow from operating activities (362.60) (281.24)

INVESTING ACTIVITIESPurchase of property, plant and equipment (4.22) (2.24)Sale of property, plant and equipment 7.00 54.07Investment Property - 19.23Intangible assets - 5.81Sale/(Purchase) of Investments 549.98 67.14(Increase) / Decrease in Loans 253.49 84.57Interest Income 21.68 56.74Dividend income on Current investments 7.71 29.67

Net cash flow used in investing activities 835.64 314.99

CONSOLIDATED CASH FLOW STATEMENT for the year ended 31st March, 2019

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Annual Report 2019119

(` In Lacs) Particulars Year ended

31.03.2019 Year ended 31.03.2018

FINANCING ACTIVITIESRepayment of Borrowings (537.85) (638.67)

Net cash flow from financing activities (537.85) (638.67)

Net Increase/(Decrease) in cash and cash equivalents (64.81) (604.91)Add: Cash and cash equivalents at the beginning of the year 680.78 1,285.69Cash and cash equivalents at the end of the year 615.97 680.78

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

As per our report of even date attached

For Ajay Shobha & Co. For Provogue (India) LimitedChartered Accountants

Ajaykumar Gupta CA Amit Gupta Nikhil Chaturvedi Deep GuptaPartner Resolution Professional Managing Director Whole-time Director & CFO Mem. No. : 53071 R. No.: IBBI/IPA-001/IP-

P00016/2016-17/10040DIN No. : 00004983 DIN No. : 00004788

Place : Mumbai Vishal MenonDate : 30th May, 2019 Company Secretary

CONSOLIDATED CASH FLOW STATEMENT for the year ended 31st March, 2019

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120

(` In lacs) EQUITY SHARE CAPITAL : Balance

as at 1st April, 2017

Changes in during the

year

Balance as at

31st March, 2018

Changes in during the

year

Balance as at

31st March, 2019

Paid up Capital (Refer Note 17 ) 2,333.82 - 2,333.82 - 2,333.82

(` In lacs)

OTHER EQUITY :

Particulars Reserves and Surplus Total

Equity component of financial liabilities

Capital Redemption

Reserve

Securities Premium Reserve

Capital Reserve

General Reserve

Retained Earnings

Foreign Currency

Translation Reserve

Other Compre-hensive Income

Balance as at 1st April, 2017 535.60 1,184.56 44,086.07 1,842.22 400.00 (30,539.27) 670.23 9.78 18,189.19

Total Comprehensive Income/ (loss) for the year

(24,324.78) 7.46 (24,317.32)

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 (54,864.05) 698.28 17.24 (6,100.08)

Total Comprehensive Income/ (loss) for the year

(535.60) (9,244.76) 0.87 (9,779.49)

Exchange differences on translation of foreign operations

- - - - - - 131.29 - 131.29

Balance as at 31st March, 2019 (0.00) 1,184.56 44,086.07 1,842.22 400.00 (64,108.81) 829.57 18.11 (15,748.29)

Nature and Purpose of Reserves

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

Capital Redemption ReserveThe 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 ReserveSecurities 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 ReserveGeneral Reserve represents appropriation of retained earnings and are available for distribution to shareholders.

Retained EarningsRetained 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

As per our report of even date attached

For Ajay Shobha & Co. For Provogue (India) LimitedChartered Accountants

Ajaykumar Gupta CA Amit Gupta Nikhil Chaturvedi Deep GuptaPartner Resolution Professional Managing Director Whole-time Director & CFO Mem. No. : 53071 R. No.: IBBI/IPA-001/IP-

P00016/2016-17/10040DIN No. : 00004983 DIN No. : 00004788

Place : Mumbai Vishal MenonDate : 30th May, 2019 Company Secretary

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31st March, 2019

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Annual Report 2019121

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

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.

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 30th May, 2019.

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 de-consolidated 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 Incorporation

% Voting Power held

As on 31.03.2019

% Voting Power held

As on 31.03.2018

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 Limited 24-Mar-08 India 100.00 100.00Profab Fashions (India) Limited 20-Feb-08 India 100.00 100.00Provogue Infrastructure Private Limited 10-Jul-08 India 100.00 100.00Flowers, Plants & Fruits Private Limited 06-Feb-09 India - -Faridabad Festival City Private Limited 14-Sep-07 India 73.00 73.00Acme Advertisements Private Limited 01-Apr-09 India 100.00 100.00BrightLand Developers Private Limited 10-Jan-11 India 100.00 100.00Classique Creators Private Limited 18-Aug-11 India - -Proflippers India Private Limited 23-Jul-11 India 100.00 100.00Provogue Personal Care Private Limited 26-Jul-13 India 51.00 51.00Elite Team (HK) Limited 01-Jun-09 Hong Kong 100.00 100.00

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122

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

Name of Company Date of Becoming Subsidiary

Country of Incorporation

% Voting Power held

As on 31.03.2019

% Voting Power held

As on 31.03.2018

Provogue Holding Limited 02-Sep-08 Singapore 100.00 100.00Standard 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 31.03.2019

% Voting Power held

As on 31.03.2018

ProSFL Private Limited India 50.00 50.00Sporting Outdoor Ad Agency Private Limited (From 17th October, 2017)

India 47.50 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.

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Annual Report 2019123

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

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.

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.

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124

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

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

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 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:

l The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

l 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.

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Annual Report 2019125

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

- 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:

l The asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets

l 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.

- 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

• 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

a) Initial recognition and measurement

All financial liabilities are recognised initially at fair value net of transaction costs that are attributable to the respective liabilities.

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126

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

b) Subsequent measurement

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.

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Annual Report 2019127

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

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 thecontract. 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.

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.

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128

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

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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Annual Report 2019129

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

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130

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

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Annual Report 2019131

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

NOTE 3 : INVESTMENT PROPERTY

Following are the changes in the carrying value of investment property for the year ended 31st March, 2019:

(` In Lacs)Particulars Land Building Total Gross carrying value as of 1st April, 2018 64.30 469.72 534.02Additions - - -Deletion - - -Gross carrying value as of 31st March, 2019 64.30 469.72 534.02Accumulated amortization as of 1st April, 2018 - 69.37 69.37Depreciation - 18.95 18.95Deletion - - -Accumulated amortization as of 31st March, 2019 - 88.31 88.31Carrying value as of 31st March, 2019 64.30 381.41 445.71

Following are the changes in the carrying value of investment property for the year ended 31st March, 2018:

(` In Lacs)Particulars Land Building Total Gross carrying value as of 1st April, 2017 64.30 469.72 534.02Additions - - -Deletion - - -Gross carrying value as of 31st March, 2018 64.30 469.72 534.02Accumulated amortization as of 1st April, 2017 - 50.13 50.13Depreciation - 19.23 19.23Deletion - - -Accumulated amortization as of 31st March, 2018 - 69.37 69.37Carrying value as of 31st March, 2018 64.30 400.36 464.66

i) Amount recognised in profit and loss for investment properties

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Rental Income 36.00 43.50Direct 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 36.00 43.50Depreciation 15.74 19.23Profit from Investment Properties 20.26 24.27

ii) Fair Value

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Investment Properties 2,474.14 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.

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132

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

iii) Leasing arrangements

T"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:"

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Within one year 36.00 36.00Later than one year but not later than 5 years 93.00 93.00Later than 5 years - -

Initial direct costs incurred on these leasing transactions have been recognised in the Statement of Profit and Loss.

NOTE 4 : OTHER INTANGIBLE ASSETS

Following are the changes in the carrying value of acquired intangible assets for the year ended 31st March, 2019:

(` In Lacs)Particulars Trade Mark

- Provogue UK

Computer Software

Total

Gross carrying value as of 1st April, 2018 23.16 0.36 23.51Additions -Deletion -Gross carrying value as of 31st March, 2019 23.16 0.36 23.51Accumulated amortization as of 1st April, 2018 17.38 0.36 17.74Amortization expense 5.78 5.78Deletion -Accumulated amortization as of 31st March, 2019 23.16 0.36 23.51Carrying value as of 31st March, 2019 - - -

Following are the changes in the carrying value of acquired intangible assets for the year ended 31st March, 2018:

(` In Lacs)Particulars Trade Mark

- Provogue UK

Computer Software

Total

Gross carrying value as of 1st April, 2017 23.16 0.36 23.51Additions -Deletion -Gross carrying value as of 31st March, 2018 23.16 0.36 23.51Accumulated amortization as of 1st April, 2017 11.59 0.34 11.93Amortization expense 5.79 0.02 5.81Deletion -Accumulated amortization as of 31st March, 2018 17.38 0.36 17.74Carrying value as of 31st March, 2018 5.78 - 5.77Carrying value as of 31st March, 2018 5.82 - 5.82

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Annual Report 2019133

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

NOTE 5 : NON CURRENT INVESTMENTS

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018

Unquoted, Fully paid up(Valued at cost unless stated otherwise)Investments 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 125.98 125.98Add : Share in post acquisition profit/ (loss) (125.98) (125.98)(Reported at Nil Value as the Company's share of losses exceeds carrying value)

- -

Investment 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) (Refer Note 37(i))

- 2,500.00

Solaris Developers Private Limited3,75,000 0% Compulsory Convertible Preference Shares of ` 10/- each (` 5/- paid up) (Refer Note 37(i))

- 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

Quoted,Fully Paid UpInvestment in equity instruments at fair value through Profit and Loss Andhra Bank 1.26 1.87(4,505 Shares of face value of ` 10 each fully paid up)Prozone Intu Properties Limited 74.00 108.752,50,000 Equity Shares of `2 each fully paid up

1,275.26 4,410.62Note:Aggregate Value of Unquoted Investments 1,200.00 4,300.00Aggregate Value of Quoted Investments 9.05 110.62Market Value of Quoted Investments 70.86 110.62

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134

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

NOTE 6 : OTHER FINANCIAL ASSETS

(Unsecured, Considered Good)

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Security Deposits 80.60 80.60

80.60 80.60

NOTE 7 : TAX EXPENSE

(a) Amounts recognised in Statement of Profit and Loss

(` In Lacs)Particulars 2018-19 2017-18 Current tax expense Current year - - Short/(Excess) provision of earlier years (21.03) 33.78

Deferred tax expense Origination and reversal of temporary differences 1,421.99 183.35

Tax expense recognised in the statement of profit and loss 1,400.96 217.13

(b) Amounts recognised in other comprehensive income

Particulars 2018-19 2017-18 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 loss Remeasurements of the defined benefit plans

1.34 (0.47) 0.87 9.93 (2.47) 7.46

1.34 (0.47) 0.87 9.93 (2.47) 7.46

(c) Reconciliation of effective tax rate

(` In Lacs)Particulars 2018-19 2017-18Profit before tax (14,715.15) (24,500.77)Tax using the Company’s domestic tax rate (Current year 27.75% and Previous Year 27.55%)

(4,083.45) (6,749.96)

Tax effect of : Tax effect on reversal due to losses by the company 4,083.45 6,749.96Others 1,421.99 183.35Tax expense as per Statement of Profit & Loss 1,421.99 183.35Effective tax rate -9.66% -0.75%

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Annual Report 2019135

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

(d) Movement in deferred tax balances

Particulars Net balances

at 1st April, 2018

Recognised in the

statement of profit and

loss

Recognised in OCI

Balance at 31st March, 2019 Net Deferred

tax assetDeferred

tax liabilities

Property, Plant and Equipments, investment property and intangible assets

1,224.16 (1,224.16) - - - -

Financial assets 192.99 (192.99) - - - -Other Liabilities / provisions 25.12 (25.12) - - - -Investments (20.28) 20.28 - - - -Borrowings - - (0.74) - - -Tax assets (liabilities) before set-off

1,421.99 (1,421.99) (0.74) - - -

Set-off of deferred tax liabilities -Net deferred tax assets/ (liabilities)

-

Particulars Net balances

at 1st April, 2017

Recognised in the

statement of profit and

loss

Recognised in OCI

Balance at 31st March, 2018 Net Deferred

tax assetDeferred

tax liabilities

Property, Plant and Equipments, investment property and intangible assets

1,093.74 (130.42) - 1,224.16 1,224.16 -

Financial assets 520.46 327.47 - 192.99 192.99 -Other Liabilities / provisions 20.94 (4.18) - 25.12 25.12 -Investments (28.26) (7.98) - (20.28) - 20.28Borrowings (1.54) (1.54) 2.47 - - -Tax assets (liabilities) before set-off

1,605.34 183.35 2.47 1,421.99 1,442.27 20.28

Set-off of deferred tax liabilities 20.28Net deferred tax assets/ (liabilities)

1,421.99

(e) Tax Losses

(` In Lacs)Particulars 2018-19 2017-18Unused tax losses for which no deferred tax asset has been recognised

57,534.99 42,819.84

Potential tax benefit @ 27.75% (PY 27.55%) 14,815.26 11,797.94

NOTE 8 : INCOME TAX ASSETS (NET)

(Unsecured, Considered Good)

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Advance Tax & TDS (net of Advance Tax & TDS (net of provision for tax) 462.11 411.00

462.11 411.00

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136

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

NOTE 9 : OTHER NON-CURRENT ASSETS

(Unsecured, Considered Good)

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Advance recoverable in cash or kind or for value to be received 576.93 579.46Capital advances 69.65 69.65Input credit receivable of indirect taxes 44.77 55.69

691.35 704.80

NOTE 10 : INVENTORIES

(Valued at lower of cost or Net Realisable Value)

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Raw materials and components 688.92 643.60Finished goods 112.02 185.00Stock in trade 293.95 906.97Accessories & packing materials 7.84 8.06

1,102.73 1,743.63

NOTE 11 : CURRENT INVESTMENTS

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Quoted Investments(Valued at lower of cost or fair value, unless stated otherwise)Investments in Mutual Funds3776.68 (PY 58,183.75) units of Reliance Money Manager Fund 37.99 587.26

37.99 587.26

NOTE 12 : LOANS

(Unsecured, considered good)

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Loans and advances 29.00 282.56Loan to employees 4.74 4.67

33.74 287.23

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Annual Report 2019137

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

NOTE 13 : TRADE RECEIVABLES

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Considered Good 6,788.84 6,907.20Considered Doubtful 184.86 865.34

6,973.70 7,772.54Less : Provision for doubtful debts 184.86 865.34

6,788.84 6,907.20

NOTE 14 : CASH AND CASH EQUIVALENTS

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Balance with Banks in Current Accounts 597.06 664.51Cash on hand 18.91 16.27

615.97 680.78

NOTE 15 : BANK BALANCES OTHER THAN CASH AND CASH EQUIVALENTS

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Balance with banks to the extent held as margin money 312.60 294.31

312.60 294.31

NOTE 16 : OTHER FINANCIAL ASSETS

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Other receivables 25.80 125.73GST refund on Export 122.06 31.13Export incentive receivable 220.70 269.08

368.56 425.94

NOTE 17 : OTHER CURRENT ASSETS

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Premium on forward contract receivable - 16.20Advance recoverable in cash or in kind 341.16 2,944.45Prepaid expenses 3.76 6.86Service Tax Deposit under protest 139.74 139.74

484.66 3,107.25

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138

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

NOTE 18 : EQUITY SHARE CAPITAL

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Authorised3300.00 Lacs Equity Shares of `1 each 3,300.00 3,300.00

Issued, Subscribed and Fully Paid Up2333.82 Lacs 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

(` In Lacs)Particulars As at 31.03.2019 As at 31.03.2018

No. in Lacs ` In Lacs No. in Lacs ` In LacsEquity SharesAt the beginning of the year 2,333.82 2,333.82 2,333.82 2,333.82Issued during the year - - - -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:

(` In Lacs)Particulars As at 31.03.2019 As at 31.03.2018

No. in Lacs % holding No. in Lacs % holding Andhra Bank 464.29 19.89 464.29 19.89Bank of India 201.29 8.63 201.29 8.63Corporation Bank 197.91 8.48 197.91 8.48Central Bank of India 160.09 6.86 160.09 6.86Punjab National Bank 129.63 5.55 129.63 5.55

d) Other Information

(i) 29.00 Lacs 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 Lacs 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 Lacs 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.

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(v) 20.50 Lacs 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 Lacs Equity Shares of `2/- each have been reduced to 1143.57 Lacs Equity Shares of ` 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 09th August, 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 are subject to the lock in requirements upto 25th August, 2017.

NOTE 19 : OTHER EQUITY

(` In lacs)

OTHER EQUITY :

Particulars Reserves and Surplus TotalEquity

component of financial liabilities

Capital Redemption

Reserve

Securities Premium Reserve

Capital Reserve

General Reserve

Retained Earnings

Foreign Currency

Translation Reserve

Other Com-prehensive

Income

Balance as at 1st April, 2017

535.60 1,184.56 44,086.07 1,842.22 400.00 (30,539.27) 670.23 9.78 18,189.19

Total Comprehensive Income/ (loss) for the year

(24,324.78) 7.46 (24,317.32)

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 (54,864.05) 698.28 17.24 (6,100.08)

Total Comprehensive Income/ (loss) for the year

(535.60) (9,244.76) 0.87 (9,779.49)

Exchange differences on translation of foreign operations

- - - - - - 131.29 - 131.29

Balance as at 31st March, 2019

(0.00) 1,184.56 44,086.07 1,842.22 400.00 (64,108.81) 829.57 18.11 (15,748.29)

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

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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

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.

NOTE 20 : NON CURRENT BORROWINGS

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Term loan from banks (Secured) [Refer Note 48] 3,568.11 3,568.11Less: Current maturities of long term debt (3,568.11) (3,568.11)(disclosed under other current liabilities)

- -Debentures (Unsecured) 0% Fully Convertible Debenture of ` 2,999.04 Lacs each fully paid up - 2,863.89

- 2,863.89

a) 3568.11 Lacs Lacs (PY 3568.11 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 Nil (PY ` 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 and other performance terms and conditions.

NOTE 21 : OTHER FINANCIAL LIABILITIES

(Non Current)

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Trade deposits 23.38 36.34

23.38 36.34

NOTE 22 : PROVISIONS

(Non Current)

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Provision for gratuity 46.70 40.41

46.70 40.41

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NOTE 23 : CURRENT BORROWINGS

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018SecuredWorking Capital Loans (Refer note 48) 12,793.17 12,951.57UnsecuredIntercorporate deposits 182.40 363.22

12,975.57 13,314.79

Working Capital Loans from Banks includes:

Secured :

(a) Cash Credit Loan:

9086.82 Lacs (PY ` 9555.54 Lacs) (excluding interest)- 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:

2924.14 Lacs (PY `2,590.21 Lacs) (excluding interest) – 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) 274.63 Lacs (PY ` 279.17 Lacs) (excluding interest) suppliers bills discounting limit from SIDBI, secured by residual charge on movable and current assets of the Company carrying interest @ 13% p.a.

(d) 507.58 Lacs (PY ` 526.65 Lacs ) Working Capital Loan form Bank is secured by hypothecation of stocks and book debt and carrying interest 2.9% over Base rate.

NOTE 24 : TRADE PAYABLES

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Due to Micro, Small & Medium Enterprises (Refer note below) 30.81 28.57Others 2,305.46 2,611.30

2,336.27 2,639.87

The Company had sought confirmation 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 :

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018The principal amount remaining unpaid to any supplier as at the end of accounting year ;

30.81 28.79

Interest due thereon remaining unpaid at the end of accounting year; * - -

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018The 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.

NOTE 25 : OTHER FINANCIAL LIABILITIES

(Current)

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Current maturities of long term debt 3,568.11 3,568.11Interest accrued but not due on borrowings 12,453.42 8,394.41Trade deposits - 2.53

16,021.53 11,965.05

NOTE 26 : PROVISIONS

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Provision for leave encashment 11.39 10.86Provision for gratuity 7.35 7.29Provision for expenses 21.29 22.05Provision for Tax (Net of Advance Tax & TDS) - 20.42

40.03 60.62

NOTE 27 : OTHER CURRENT LIABILITIES

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Duties & taxes payable 36.67 17.61Advance from customers 43.56 442.85Employee benefits payable 172.79 180.46

253.02 640.92

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

NOTE 28 : REVENUE FROM OPERATIONS

(` In Lacs)Particulars Year ended

31.03.2019Year ended 31.03.2018

Revenue from operations (gross)Sale of products 8,276.12 12,059.35Advertisement Sales-News Papers 18.88 70.73

Other operating revenueExport benefits & incentives 141.85 366.15Gain on foreign exchange fluctuations (net) 195.24 31.38Others 343.24 157.42

8,975.33 12,685.03

NOTE 29 : OTHER INCOME

(` In Lacs)Particulars Year ended

31.03.2019Year ended 31.03.2018

Interest income on- Bank deposits 21.47 42.32- Loans & advances - 0.12- Others 0.21 14.30

21.68 56.74Dividend income on current investments 7.71 29.67Liabilities no longer payable written back 5.60 0.45Rent income 36.00 43.50Income on Investments carried at fair value through profit & loss (35.36) 14.91Interest received on financial assets carried at amortised cost - 8.36Profit on sale of investment 0.71 0.22Profit on sale of Fixed Assets 6.11 -Miscellaneous income 77.98 79.64

120.43 233.49

NOTE 30 : COST OF MATERIALS CONSUMED

(` In Lacs)Particulars Year ended

31.03.2019Year ended 31.03.2018

Raw Materials (Fabric)Opening stocks 643.60 2,232.70Add : Purchases 2,182.60 2,533.51

2,826.20 4,766.21Less : Closing stocks 688.92 643.60

2,137.28 4,122.61Accessories & Packing MaterialsOpening Stocks 8.06 17.47Add : Purchases 37.59 40.30

45.65 57.77Less : Closing Stocks 7.84 8.06

37.81 49.712,175.09 4,172.32

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

NOTE 31 : PURCHASES OF STOCK - IN - TRADE

(` In Lacs)Particulars Year ended

31.03.2019Year ended 31.03.2018

Purchases of traded goods 3,578.42 6,089.10Advertisement Purchases 18.51 36.18

3,596.93 6,125.28

NOTE 32 : CHANGES IN INVENTORIES OF FINISHED GOODS, WORK IN PROCESS AND STOCK IN TRADE

(` In Lacs)Particulars Year ended

31.03.2019Year ended 31.03.2018

Opening Stocks- Work in Process - 58.08- Finished Goods 185.00 3,685.99- Stock in trade 906.97 14,233.99

1,091.97 17,978.06Less : Loss on sale of Obsolete inventories disclosed as exceptional items - 7,968.61Closing Stocks- Finished Goods 112.02 185.00- Stock in trade 293.95 906.97

405.97 1,091.97686.00 8,917.48

NOTE 33 : EMPLOYEE BENEFITS EXPENSE

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Salaries, wages & bonus 428.24 492.26Directors' remuneration 89.96 124.82Contribution to provident & other funds 19.49 29.14Workmen & staff welfare expenses 12.88 22.10

550.57 668.32

NOTE 34 : FINANCE COSTS

(` In Lacs)Particulars Year ended

31.03.2019Year ended 31.03.2018

Interest expense on bank loans 4,227.56 3,267.60Interest expense on debentures carried at amortised cost 122.59 236.47Interest expense on financial liabilities carried at amortised cost - 4.65Other borrowing costs 23.56 85.09Bank charges 4.08 4.99

4,377.79 3,598.80

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NOTE 35 : DEPRECIATION AND AMORTISATION EXPENSE

(` In Lacs)Particulars Year ended

31.03.2019Year ended 31.03.2018

Depreciation of Property,Plant & Equipment 120.24 344.79Depreciation on Investment Property 18.95 19.23Amortisation on Intangible Assets 5.78 5.81

144.96 369.83

NOTE 36 : OTHER EXPENSES

(` In Lacs)Particulars Year ended

31.03.2019Year ended 31.03.2018

Processing charges 1,281.68 1,591.39Rent (Net) 140.95 134.20Rent expense on discounted security deposits - 6.04Rates and taxes 69.08 124.11Insurance 34.20 51.61Repairs and maintenance - Others 20.25 51.72Electricity charges 42.89 54.42Common area maintenance expenses 37.06 31.64Studio expenses 3.50 7.53Printing & stationery 13.13 20.95Communication costs 23.89 53.08Legal & professional fees 154.68 140.94Travelling & conveyance 69.99 150.23Brokerage & commission 68.00 89.65Advertisement & business promotion expenses 37.59 120.92Auditors' remuneration 13.48 12.74Transportation, freight & handling charges 205.56 350.20Provision for doubtful debts - 48.76Bad debts written off 10.38 1,993.71Loss on sale/discard of fixed assets - 142.75Interest and penalties on delay in payment of statutory dues 0.51 21.41Foreign exchange gain loss 5.31 175.21Provision for Expected Credit Loss 28.61 -Loss on sale of investments in subsidiary - 24.09Bad debts - 148.78Miscellaneous expenses 23.52 52.57

2,284.26 5,598.65

Payments to Auditor

(` In Lacs)Particulars Year ended

31.03.2019Year ended 31.03.2018

Audit fees 13.48 12.7413.48 12.74

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

NOTE 37 : EXCEPTIONAL ITEMS

(` In Lacs)Particulars Year ended

31.03.2019Year ended 31.03.2018

i) Loss on forfeiture of investments in partly paid up 0% Non-Cumulative Compulsory Convertible Preference Shares

3,100.00 -

ii) Claims admitted during CIRP period which were written back in earlier years

288.79 -

iii) Loss on sale of obsolete inventories - 7,968.613,388.79 7,968.61

NOTE 38 : 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.

Particulars Year ended 31.03.2019

Year ended 31.03.2018

i) Weighted average number of Equity Shares of ` 1 eacha) Number of shares at the beginning of the year 1,143.57 1,143.57b) Number of shares at the end of the period 2,333.84 2,333.84c) Weighted average number of shares outstanding during the

year 2,333.84 2,333.84

ii) Net Profit \ (Loss) after tax available for equity shareholders (9,509.59) (24,717.90)iii) Basic Earning per share (in `) (4.07) (10.59)iv) Diluted Earning per share (in `) (4.07) (10.59)

NOTE 39 : 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

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Lease expense 140.95 134.20

140.95 134.20

Initial direct costs incurred on these leasing transactions have been recognised in the Profit and Loss Account.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

NOTE 40 : CONTINGENT LIABILITIES NOT PROVIDED FOR :

(` In Lacs)Sr. No.

Particulars As at 31.03.2019

As at 31.03.2018

a) Guarantee given by Banks on behalf of the Company - 649.98b) Uncalled liability on investments in preference shares partly paid - 1,275.00c) Sales Tax Liability contested in appeals 134.73 115.49d) 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. 01st June, 2007, the Company continues not to provide for the retrospective levy aggregating to ` 279.47 Lacs for the period 01st June, 2007 to 30th September, 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 14th October, 2011 passed by the Hon'ble Supreme Court of India)

279.47 279.47

e) Disputed demand of income Tax 365.58 292.57f) Disputed demand of Tax Deducted at Source (TDS) 189.12 189.12g) Disputed demand of Service Tax 36.42 36.42h) Claims against the Company, not acknowledged as debt 1,427.69 285.11

NOTE 41 : EMPLOYEE BENEFIT EXPENSES

Post Employment Benefit Plans:

Defined Contribution Scheme

(` In Lacs)Amount recognised in the Statement of Profit and Loss 2018-19 2017-18Contribution to Provident fund and others 19.49 29.14

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:

(` In Lacs)Particulars Defined Benefit Plans

As at 31.03.2019

As at 31.03.2018

Present value of funded obligations 69.90 62.32Fair Value of plan assets 15.85 14.62Net (Asset)/Liability recognised 47.70 45.17

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

Movements in plan assets and plan liabilities

(` In Lacs)Particulars Present

value of obligations

Fair Value of plan assets

As at 1st April, 2018 62.32 14.62Current service cost 5.70 -Past service cost 1.31 -Interest Cost/(Income)Return on plan assets excluding amounts included in net finance income

4.23 1.09

Actuarial (gain)/loss arising from changes in financial assumptions 0.14Actuarial (gain)/loss arising from experience adjustments 1.24 -Employer contributions (4.90) -Benefit paymentsAs at 31st March, 2019 69.90 15.85

(` In Lacs)Particulars Present

value of obligations

Fair Value of plan assets

As at 1st April, 2017 58.90 13.73Current service cost 7.26 -Transfer in/(out) obligation 0.21 -Past service cost 0.89 -Interest Cost/(Income) 3.64 0.91Return on plan assets excluding amounts included in net finance income - (0.02)Actuarial (gain)/loss arising from changes in financial assumptions (1.93) -Actuarial (gain)/loss arising from experience adjustments (5.55) -Employer contributions - -Benefit payments (1.09) -As at 31st March, 2018 62.32 14.62

Statement of Profit and Loss

(` In Lacs)Employee benefit expenses : 2018-19 2017-18Current Service cost 5.70 7.26Interest cost/ (Income) 3.14 2.72Past service cost and loss/(gain) on curtailments and settlement 0.89Expected return on Plan Assets -Total amount recognised in Statement of P&L 8.84 10.88Remeasurement of the net defined benefit liability : Return on plan assets excluding amounts included in net finance income/(cost)

(0.14) 0.02

Change in Financial Assumptions 1.24 (4.39)Experience gains/(losses) (2.44) (5.55)Total amount recognised in Other Comprehensive Income (1.34) (9.92)

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Investment pattern for Fund as on

(` In Lacs)Category of Asset As at

31.03.2019 As at

31.03.2018Government 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:

(` In Lacs)Financial Assumptions As at

31.03.2019 As at

31.03.2018Discount rate 7.20% 7.55%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 31.03.2019Increase/Decrease in liability

As at 31.03.2018Increase/Decrease in liability

Discount rate varied by 0.5%0.50% 68.14 58.20-0.50% 71.75 61.61Salary growth rate varied by 0.5%0.50% 71.39 61.44-0.50% 68.16 58.33Withdrawal rate (W.R.) varied by 10%W.R.* 110% 70.40 60.44W.R.* 90% 69.34 59.27

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

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 Cashflow %Projected benefits payable in future years from the date of reporting2020 8.17 8.00%2021 6.70 6.70%2022 6.60 6.50%2023 7.48 7.30%2024 6.31 6.20%2025-2029 39.62 38.70%

NOTE 42 : 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

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.20181. Segment Revenuea. Domestic 3,468.65 4,035.84b. Exports 5,506.68 8,649.19Gross Sales / Income from Operations 8,975.33 12,685.03

2. Segment ResultsProfit before tax and interest for each segment a. Domestic (62.85) (12,783.12)b. Exports 289.64 (860.49)Sub Total 226.79 (13,643.61)Less : i) Finance Cost 4,377.79 3,598.80 ii) Un-allocable expenses net off income 568.84 (710.25) iii) Exceptional Item 3,388.79 7,968.61Total Profit before Tax (8,108.63) (24,500.77)Less : Tax Expenses 1,400.96 217.13Net Profit / (Loss) (9,509.59) (24,717.90)

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(` In Lacs)Particulars As at

31.03.2019 As at

31.03.20183. Segment Assetsa. Domestic 2,763.21 8,490.02b. Exports 10,774.95 11,631.90Unallocated 4,485.18 6,851.26Total 18,023.34 26,973.18

4. Segment Liabilitiesa. Domestic 27,919.15 27,566.69b. Exports 3,777.35 3,995.20Unallocated - -Total 31,696.50 31,561.89

NOTE 43 : RELATED PARTY DISCLOSURES AS REQUIRED UNDER INDIAN ACCOUNTING STANDARD 24, “RELATED PARTY DISCLOSURES” ARE GIVEN BELOW:

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)

A) Key Management Personnel (KMP) and their relatives

Mr. Nikhil Chaturvedi Managing Director Mr. Deep Gupta Whole Time Director & CFO Mr. Akhil Chaturvedi Whole Time Director Mr. Salil Chaturvedi Director Mr. Dinesh Arya (up to 30th March, 2019) Director Ms. Gauri Pote (up to 30th March, 2019) Director Mr. Hetal Hakani Director Mr. Vishant Shetty (up to 17th April, 2019) Company Secretary Mr. Vishal Menon (from 18th April, 2019) Company Secretary

b) Entity having common Key Managerial Personnel

Prozone Intu Properties Limited

Particulars 31.03.2019 31.03.2018(I) Transactions Remuneration to Key Management Personnel Mr. Deep Gupta 56.34 54.00 Mr. Vishant Shetty 7.04 4.80

Sale of Goods /Services Entity having common Key Managerial Personnel Prozone Intu Properties Limited 36.00 36.00

Director Sitting fees paid Mr. Dinesh Arya 0.50 1.00 Ms. Gauri Pote 0.20 0.40 Ms. Hetal Vasant Hakani 0.50 0.75

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152

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

Particulars 31.03.2019 31.03.2018(II) Balance outstanding at the end of the year Receivables Entity having common Key Managerial Personnel Prozone Intu Properties Limited 25.80 85.73

Payables Key Managerial Personnel Mr. Nikhil Chaturvedi 17.45 17.45 Mr. Salil Chaturvedi 22.48 22.48 Mr. Akhil Chaturvedi 22.67 22.67 Mr. Deep Gupta 3.56 3.56

Note: Related Parties are as disclosed by the Management and relied upon by the auditors.

NOTE 44 : FINANCIAL INSTRUMENTS – FAIR VALUES AND RISK MANAGEMENT

A. Accounting classification and fair values

The Group 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.

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Annual Report 2019153

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

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154

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

NOTE 44 : 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 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

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Borrowing bearing variable interest rate 28,997.10 28,141.20Total of Variable Rate Financial Liabilities 28,997.10 28,141.20

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 lossINR 50 bp

increase50 bp

decrease31st March, 2018Variable-rate loan instruments (144.99) 144.99Cash flow sensitivity (net) (144.99) 144.99

31st March, 2017Variable-rate loan instruments (140.71) 140.71Cash flow sensitivity (net) (140.71) 140.71

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.

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Annual Report 2019155

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

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 31st March, 2019, and 31st March, 2018 are as below:

(Foreign Currency in Lacs)31st March, 2019 USD EUROFinancial assets Trade receivables 46.82 0.71Net exposure for assets 46.82 0.71

Financial liabilities Foreign Currency Borrowings (Including Current Maturities)Net exposure for liabilities - -Net exposure (Assets - Liabilities) 46.82 0.71

(Foreign Currency in Lacs)31st March, 2018 USD EUROFinancial assets Trade receivables 48.31 0.84Net 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

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 directly 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.

Profit or lossEffect in INR (before tax) Strengthening WeakeningFor the year ended 31st March, 20195% movementUSD 161.93 (161.93)EURO 2.76 (2.76)

136.48 (136.48)

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156

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

Profit or lossEffect in INR (before tax) Strengthening WeakeningFor the year ended 31st March, 20185% movement USD 156.54 (156.54)EURO 2.90 (2.90)

159.44 (159.44)

Particulars of hedged and unhedged foreign currency exposures as at the reporting date

As at 31st March, 2019

(Foreign Currency in Lacs)USD EURO

Trade Receivables 46.82 0.71Less : Foreign currency forward contracts (Sell) -Unhedged Receivable 46.82 0.71

Borrowings - -Less : Foreign currency forward contracts (Buy) - -Unhedged Payable - -

As at 31st March, 2018

(Foreign Currency in Lacs)USD EURO

Trade Receivables 48.31 0.84Less : Foreign currency forward contracts (Sell) 44.17Unhedged Receivable 4.14 0.84

Borrowings -Less : Foreign currency forward contracts (Buy) - -Unhedged Payable - -

Financial Risk Management

Risk management framework

A wide range of risks may affect the Group’s business and operational / financial performance. The risks that could have significant influence on the Group are market risk, credit risk and liquidity risk. The Group’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 Group’s operational and financial performance.

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s trade and other receivables, cash and cash equivalents and other bank balances. To manage this, the Group 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 instruments covered below is restricted to their respective carrying amount.

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Annual Report 2019157

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

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 Group grants credit terms in the normal course of business.

The Group considers the probability 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 Group compares the risk of default occurring 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 increase 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 Group. When loans or receivables have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivable due, When recoverables are made, these are recognised as income in the statement of profit and loss.

The Group measures the expected credit loss of trade receivables 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

31.03.2019 As at

31.03.20180 - 6 months 3,256.89 4,734.706 - 12 months 1,388.53 1,570.99Beyond 12 months 2,143.43 601.51Total 6,788.84 6,907.20

Movements in provision of doubtful debts

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Opening provision 865.34 996.00Add : Additional provision made / reversed / written off (680.48) (130.66)Closing provisions 184.86 865.34

Liquidity risk

Liquidity is defined as the risk that the Group will not be able to settle or meet its obligations on time or at a reasonable price. The Group’s management 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 Group’s net liquidity position through rolling forecasts on the basis of expected cash flows.

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158

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

The table below provides details regarding the contractual maturities of significant financial liabilities:

Maturity Analysis of Significant Financial Liabilities

(` In Lacs)31st March, 2019 Total Upto 1

year1-5 years More

than 5 years

Borrowings 12,975.57 - 12,975.57 -Trade and other payables 2,336.27 2,336.27 - -Other Financial Liabilities (Current & Non Current) 16,044.91 16,021.53 23.38 -

31st March, 2018 Total Upto 1 year

1-5 years More than 5 years

Borrowings 16,178.68 13,314.79 2,863.89 -Trade and other payables 2,639.87 2,639.87 - -Other Financial Liabilities (Current & Non Current) 12,001.39 11,965.05 36.34 -

NOTE 45 : DISCLOSURE OF ADDITIONAL INFORMATION PERTAINING TO THE PARENT COMPANY, SUBSIDIARIES AND JOINT VENTURES / ASSOCIATES

(` in Lacs)

Name of the Enterprises Net Assets (Total Assets) - (Total

Liabilities)

Share in Profit or loss Share in Other Comprehensive Income

Share in Total Comprehensive Income

As % of Consolidated

Net Assets

Net Assets As % of Consolidated Profit or Loss

Profit / (Loss)

As % of Consolidated Profit or Loss

Profit / (Loss)

As % of Consolidated Profit or Loss

Profit / (Loss)

Parent

Provogue (India) Limited 152.51 (20,853.09) 67.63 (6,431.22) 100.00 0.87 67.63 (6,430.35)

Indian Subsidiaries

Direct Subsidiaries

BrightLand Developers Private Limited

(0.00) 0.31 0.30 (28.78) - - 0.30 (28.78)

Pronet Interactive LLP (formerly known as Pronet Interactive Private Limited converted in to LLP from 17th August, 2017)

(0.07) 9.46 0.00 (0.25) - - 0.00 (0.25)

Profab Fashions (India) Limited (0.01) 1.15 0.00 (0.16) - - 0.00 (0.16)

Provogue Infrastructure Private Limited

(15.53) 2,123.86 23.70 (2,253.47) - - 23.70 (2,253.47)

Acme Advertisements Private Limited

(0.59) 80.17 (0.00) 0.02 - - (0.00) 0.02

Faridabad Festival City Private Limited

(0.66) 90.51 0.19 (17.76) - - 0.19 (17.76)

Millennium Accessories Limited

1.87 (255.27) 1.18 (111.96) - - 1.18 (111.96)

Proflippers India Private Limited (0.05) 7.36 0.01 (1.27) - - 0.01 (1.27)

Provogue Personal Care Private Limited

11.73 (1,603.22) 3.05 (289.78) - - 3.05 (289.78)

Indirect Subsidiaries

Standard Mall Private Limited (Held through Provogue Infrastructure Private Limited)

(20.72) 2,832.73 0.00 (0.18) - - 0.00 (0.18)

Foreign Subsidiaries

Elite Team (HK) Limited (30.36) 4,151.54 1.16 (109.97) - - 1.16 (109.97)

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Annual Report 2019159

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

(` in Lacs)

Name of the Enterprises Net Assets (Total Assets) - (Total

Liabilities)

Share in Profit or loss Share in Other Comprehensive Income

Share in Total Comprehensive Income

As % of Consolidated

Net Assets

Net Assets As % of Consolidated Profit or Loss

Profit / (Loss)

As % of Consolidated Profit or Loss

Profit / (Loss)

As % of Consolidated Profit or Loss

Profit / (Loss)

Minority Interest in all subsidiaries

1.89 (258.69) 2.78 (264.83) - - 2.79 (264.83)

Joint Venture / Associates (Indian)

ProSFL Private Limited - - - - - - - -

Sporting Outdoor Ad Agency Private Limited

- - - - - - - -

TOTAL 100.00 (13,673.16) 100.00 (9,509.59) 100.00 0.87 100.00 (9,508.72)

Note : The above figures are after eliminating intra group transactions and intra group balances

NOTE 46 : 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.

(` In Lacs)Particulars As at

31.03.2019 As at

31.03.2018Total Debt 28,997.10 28,141.20Total Equity (16,449.55) (7,365.10)Total debt to equity ratio (Gearing ratio) 2.31 1.35

NOTE 47 :

The Company has a financial involvement aggregating ` 4814.50 Lacs in the investments / advances through a subsidiary which have an uncertainty regards to realization of the said assets. The Company is in Corporate Insolvency Resolution Process to revamp its business in the Group, accordingly no provision is made against the aforesaid amounts at this stage. The Auditor has also provided a modified opinion in this regard.

NOTE 48 :

The Company has incurred losses during the current and previous years, the Company has accumulated losses and its net worth has been fully eroded. During the financial year 2015-16, the credit facilities of the Company have been classified under SMA-2 category with banks. On 25th January, 2016, vide Joint Lender’s Forum (JLF) meeting, Strategic Debt Restructuring (SDR) has been invoked as per RBI guidelines. Pursuant to SDR Scheme, the Company on 09th August, 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 25th August, 2017. The investors proposal under SDR was not approved by lenders.

Further, In accordance with the applicable provisions of the Insolvency and Bankruptcy Code 2016, (IBC), the Andhra Bank, in its capacity as financial creditor has filed a petition under IBC with the Honorable National Company Law Tribunal, Mumbai Banch (NCLT). The NCLT vide its order dated 25th July, 2018 admitted the Corporate Insolvency Resolution Process (CIRP) in respect of the Company and appointed Mr. Jitendra R Yadav, as the Interim Resolution

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160

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31st March, 2019

Professional (IRP) in terms of the IBC. However, the committee of creditors in the first meeting held on 24th August, 2018 decided to appoint Mr. Amit Gupta, as the Resolution Professional (‘RP’) of the Company. The appointment of Mr. Amit Gupta was confirmed by NCLT order dated 26th September, 2018. On appointment of the RP under the Code, the powers of the Board of Directors of the Company were suspended.

NOTE 49 :

During the year, the Company has retrospectively provided interest on the borrowings outstanding which have been classified as “Non-Performing Assets” (NPA) by the banks and reinstated finance cost along with corresponding impacts as follows :

(` In Lacs) Particulars As reported Adjustments As

reinstated Finance costs 1,802.22 (1,796.58) 3,598.80Exceptional items 2,716.27 (5,252.34) 7,968.61Net Profit / (Loss) for the period (17,648.54) 7,069.34 (24,717.88)Total Compre-hensive Income (17,641.08) 7,069.34 (24,710.42)Other Equity 477.32 6,577.40 (6,100.08)Borrowings 15,131.80 1,817.01 13,314.79Other financial liabilities (Interest accrued) 3,570.64 (8,394.41) 11,965.05

NOTE 50 :

The Company has regrouped, reclassified and/ or rearranged previous year figures, wherever necessary to conform to current year.

As per our report of even date attached

For Ajay Shobha & Co. For Provogue (India) LimitedChartered Accountants

Ajaykumar Gupta CA Amit Gupta Nikhil Chaturvedi Deep GuptaPartner Resolution Professional Managing Director Whole-time Director & CFO Mem. No. : 53071 R. No.: IBBI/IPA-001/IP-

P00016/2016-17/10040DIN No. : 00004983 DIN No. : 00004788

Place : Mumbai Vishal MenonDate : 30th May, 2019 Company Secretary

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Annual Report 2019161

ANNEXURE-IStatement of Impact of Audit Qualification (for audit report with modified opinion) submitted along-with

Annual Audited Financial Results - Consolidated

Statement of Impact of Audit Qualification for the Financial Year ended 31st March, 2019 [See Regulation 33/52 of the SEBI (LODR) (Amendment) Regulations, 2016]

I. Sr No

Particulars Audited Figures (as reported

before adjusting for qualifications)

Adjusted Figures (as reported before

adjusting for qualifications)*

1 Turnover / Total income 9,095.76 9,095.762 Total Expenditure 13,815.60 13,815.603 Net Profit/(Loss) (9,509.59) (9,509.59)4 Earnings Per Share (4.07) (4.07)5 Total Assets 18,023.34 18,023.346 Total Liabilities 31,696.50 31,696.507 Net Worth (13,673.16) (13,673.16)8 Any other financial item(s) (as felt appropriate by the

management)

* Unable to estimate the impact

II. Audit Qualification:

a. Details of Audit Qualification : The Company has a financial involvement aggregating ` 4,814.50 Lacs via Investment/loans in various subsidiaries/ step-down subsidiaries/ Joint Venture. These subsidiaries have made heavy losses and have uncertainty regards to realisation of assets of subsidiaries and the net worth of few subsidiaries have substantially eroded.

b. Type of Audit Qualification : Qualified Opinion

c. Frequency of qualification : First Time

d. For Audit Qualification(s) where the impact is quantified by the auditor, Management’s Views: Not Quantified

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management’s estimation on the impact of audit qualification:

ii. If management is unable to estimate the impact, reasons for the same: The Company is under Corporate Insolvency Resolution Process to revamp its business in the Group, accordingly no provisions is made against the aforesaid amounts at this stage.

iii. Auditors’ Comments on (i) or (ii) above : We are unable to comment on this.

III. Signatories: For Ajay Shobha & CoChartered Accountants

Firm Registration No. 317031ESd/-CA. Amit Gupta Sd/-309, Crescent Business Park, Ajay GuptaSakinaka Telephone Exchange Lane, Sakinaka, PartnerAndheri (East), Mumbai-400072 Mem. No.053071Email: [email protected]@gmail.com Date : 30-05-2019IBBI Registration No.: IBBI/IPA-001/IP-P00016/2016-17/10040 Place: Mumbai

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Annual Report 2019163

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]

PROVOGUE (INDIA) LIMITEDCIN: L18101MH1997PLC111924

Regd. Office: 105/106, Provogue House, 1st Floor, Off New Link Road, Andheri (West), Mumbai, 400053Ph: +91-22-68249000 Email: [email protected], Website: www.provogue.com

Name of The Member :

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 , or failing him

3. 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 23rd Annual General Meeting of members of the Company, to be held on Monday, 30th September, 2019 at Esquire Hall, The Classique Club, Behind Infinity Mall, Off New Link Road, Andheri (West), Mumbai - 400053 at 4.00 p.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, 2019 including audited Balance Sheet as at 31st March, 2019 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. Akhil Chaturvedi (DIN: 00004779), who retires by rotation and being eligible, offers himself for re-appointment.

3 To consider and approve the payment of remuneration to the Cost Auditors

4 To reappoint Mr. Hetal Hakani (DIN: 06878540) as an Independent Director and in this regard, to pass the resolution as a Special Resolution

Signed this day of 2019

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

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Annual Report 2019165

PROVOGUE (INDIA) LIMITEDCIN: L18101MH1997PLC111924

Regd. Office: 105/106, Provogue House, 1st Floor, Off New Link Road, Andheri (West), Mumbai, 400053Ph: +91-22-6824 9000 Email: [email protected], Website: www.provogue.com

23rd 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 23rd Annual General Meeting of the Company held on Monday, 30th September, 2019 at 4.00 p.m. at Esquire Hall, The Classique Club, Behind Infinity Mall, Off New Link Road, Andheri (W), Mumbai - 400 053.

(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.

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Annual Report 2019167

PROVOGUE (INDIA) LIMITEDCIN: L18101MH1997PLC111924

Regd. Office: 105/106, Provogue House, 1st Floor, Off New Link Road, Andheri (West), Mumbai, 400053Ph: +91-22-68249000 Email: [email protected], Website: www.provogue.com

To, Date:

Link Intime India Private Limited Unit: Provogue (India) Limited C-101, 247 Park, L.B.S. 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 ID :

Thanking you,

Yours truly,

Signature :

Name of Sole / First Holder :

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NOTES

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