Provogue (India) Ltd Directors Report.


The Members, Provogue (India) Ltd

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


(Rs. In Lakhs)
Particulars Standalone Consolidated
31.03.2018 31.03.2017 31.03.2018 31.03.2017
Income from Operations 9,177.80 21353.10 12,685.03 26,781.83
Add: Other Income 581.05 498.98 233.49 348.19
Total Income 9,758.85 21852.08 12,918.52 27130.02
Less: Total Expenditure 23,524.35 39957.40 27,633.67 46639.59
Less : Exceptional item 1,722.04 - 2,716.27 -
Profit/ (loss) before Tax (15,487.54) (18,105.32) (17,431.42) (19,509.57)
Less: Deferred Tax and Taxes 60.89 (124.60) 217.13 212.15
Profit/ (loss) after Tax for the year (15,548.43) (17,980.72) (17,648.55) (19,721.73)
Less: Minority Interest - - (393.12) (238.51)
Profit/ (loss) after Tax for the year (15,548.43) (17,980.72) (17,255.43) (19483.23)



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


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


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


Pursuant to the Strategic Debt Restructuring (SDR) Scheme invoked by the SDR Lenders in terms of Reserve Bank of India (RBI) Circular no. DBR.BP.BC. No.101/21.04.132/2014_15 dated 8th June 2015 and members approval for conversion of debt into equity, the Company on 9th August 2016 allotted 11,90,24,732 fully paid up equity share of face value of Re. 1/_ each at a price of 7.66/_ per share to SDR Lenders on preferential basis against the conversion of outstanding dues of 91.17 Crore out of total outstanding loan of 305.35 Crore payable to SDR Lenders on the reference date (i.e., 25th January 2016), enabling the SDR Lenders collectively to hold not less than 51% of the total paid up equity share capital of the Company. The said shares were subject to lock in requirement till 25th August 2017.


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


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


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


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

Indian Subsidiary Companies:

i) Acme Advertisements Pvt. Ltd.

ii) Brightland Developers Pvt. Ltd.

iii) Faridabad Festival City Pvt. Ltd

iv) Millennium Accessories Ltd.

v) Profab Fashions (India) Ltd.

vi) Provogue Infrastructure Pvt. Ltd.

vii) Pro_ippers India Private Limited

viii) Provogue Personal Care Private Limited

Step-down Subsidiary:

i) Standard Mall Private Limited

Foreign Subsidiaries:

i) Elite Team (HK) Ltd, Hong Kong

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

Associate Companies:

i. ProSFL Private Limited (Joint venture)

ii. Sporting and Outdoor Ad Agency Pvt Ltd. (w.e.f 17th October 2017) In addition to above during the year Pronet Interactive Pvt. Ltd ceased to be a subsidiary Company with effect from 18th August 2017 due to its conversion into Limited Liability Partnership.

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

In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited financial statements of each of its subsidiaries, are made available on our website 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.


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.


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.


The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys 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


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


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.


Director retire by rotation :

Pursuant to the provisions of section 152 of the Companies Act, 2013, the office of Mr. Salil Chaturvedi, (DIN: 00004768) is liable to retire by rotation at the ensuing Annual General Meeting, and being eligible, has offered himself for re-appointment. Accordingly, the proposal of his re-appointment has been included in the Notice convening the Annual General Meeting of the Company A brief resume of Mr. Salil Chaturvedi as per the requirements of Reg. 36(3) of the SEBI (LODR)

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

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

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

Declaration by Independent Directors:

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

Annual Familiarization Programme

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

Key Managerial Personnel:

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

Name Designation
Mr. Nikhil Chaturvedi Managing Director
Mr. Deep Gupta Whole-time Director & Chief Financial Officer
Mr. Vishant Shetty Company Secretary and Compliance Officer

Board evaluation

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

The Board based on evaluation criteria recommended by the ‘Nomination and Remuneration Committee and ‘Code for Independent Directors and pursuant to applicable regulations of Chapter II and Chapter IV read with schedule IV to SEBI (LODR) Regulations, 2015, evaluated the performance of Board members.

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

Remuneration Policy

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

Secretarial Standards

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


Your Directors state that:

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

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

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

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

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

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


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

1. Audit Committee.

2. Nomination and Remuneration Committee.

3. Stakeholders Relationship Committee.

4. CSR Committee

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

AUDITORS Statutory Auditors:

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

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

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

Auditors observations and managements response to auditors observation:

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

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

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

Secretarial Auditor

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

Cost auditors

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

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

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

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


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.


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

A. Conservation of Energy:

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

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

iii) The capital investment on energy conservation equipments: Nil

B. Technology Absorption:

i) The efforts made towards technology absorption : The Company is monitoring the technological up-gradation taking place in other countries in the field of garment manufacturing and the same are being reviewed for implementation.

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

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

a) the details of technology Imported
b) the year of Import
c) whether the technology been fully absorbed Nil
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:

(Rs. In Lakhs)
Particulars 2017-18 2016-17
Foreign Exchange Earnings 4,933.15 4,900.22
Foreign Exchange outgo 4.41 36.48


Extract of Annual Return:

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

Number of meetings of the Board:

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

Committees of the Board:

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

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

Committee Name Composition of the Committee
Audit Committee 1. Mr. Dinesh Arya, Chairman
2. Mr. Hetal Hakani, Member
3. Mr. Akhil Chaturvedi, Member
Nomination & Remuneration Committee 1. Mr. Hetal Hakani, Chairman
2. Mr. Dinesh Arya, Member
3. Mr. Salil Chaturvedi, Member
Stakeholders Relationship Committee 1. Mr. Salil Chaturvedi, Chairman
2. Mr. Deep Gupta, Member
3. Mr. Akhil Chaturvedi, Member
CSR Committee 1. Mr. Deep Gupta, Chairman
2. Mr. Nikhil Chaturvedi, Member
3. Mr. Hetal Hakani, Member

Vigil Mechanism/ Whistle Blower Policy:

In conformity with the requirements of Section 177 of the Companies Act, 2013, the Company has devised Vigil Mechanism and has formal whistle blower policy under which the Company takes cognizance of complaints made by the employees and others and also provides for direct access to the Chairman of Audit Committee in deserving cases. Your Company hereby confirms that no directors/ employees were denied access to the Chairman of Audit Committee and that no complaints were received during the year under period.

The Whistle Blower Policy of the Company has been posted on the website of the Company and is available at investors.

Particulars of loans, guarantees and investments:

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

Particulars of material contracts or arrangements made with related parties:

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

Particulars of employees:

The table containing names and other particulars of Directors in accordance with the provisions of Section 197(12) of the Companies Act, 2013 read with rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is enclosed as Annexure 5 to the Board Report. The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure as appended as ‘Annexure 6 forming part of this report.

Transfer to Reserves:

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

Material changes and commitments:

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

Corporate Social Responsibility

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

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


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


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.


Unclaimed Dividends

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

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

In terms of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 as amended from time to time, the Company transferred the corresponding shares to IEPF, where the dividends which have been unclaimed by the concerned shareholders for the last seven consecutive years viz., since FY 2009-10. Further dividend which remains unclaimed for the last 7 years since 2010-11 must be claimed by the concerned shareholders on or before 24th October 2018 for which Company has sent reminder letter to them. If the shareholders fail to claim the dividend, the company will be transferring the unclaimed dividend and the corresponding shares to IEPF within a period of 30 days from the due date. Details of unpaid and unclaimed dividends lying with the Company as on 28th September 2017 (date of the previous Annual General Meeting), are provided on the website, at The shareholders are requested to verify their records and claim their unclaimed dividends for the past years, if not claimed.


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

For and on behalf of Board of Director

Sd/- Sd/-
Nikhil Deep
Date: 11th May 2018 Chaturvedi Gupta
Place: Mumbai Managing Whole time
Director Director
DIN: 00004983 DIN: 00004788