Roadshow Presentation 140907 by zdn12589

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									TRULY   GLOBAL
Today's Discussion
                                                        TRULY   GLOBAL




    Who We Are




    How Are We Uniquely Positioned




    How We Can Continue To Grow Rapidly




    Our Impressive Financial Track Record And Outlook




                                                                   1
Today's Discussion
                                                        TRULY   GLOBAL




    Who We Are




    How Are We Uniquely Positioned




    How We Can Continue To Grow Rapidly




    Our Impressive Financial Track Record And Outlook




                                                                   2
House of Pearl Fashions Is A Global Apparel Company
                                                                                  TRULY   GLOBAL




    We are an Indian-Multinational company in the ready-to-wear apparel
    business offering total supply chain solutions to our customers


    We have an integrated business model with three distinct business streams -
    Manufacturing, Marketing Distribution and Branding & Sourcing


    We offer multi-country, multi-gender and multi-product options in each
    business stream to our customers


    In the post-quota regime, our strategy to emerge as a "One Stop Shop" for
    customers enables us to deliver strong revenue and profit growth



                                Well Poised to Scale Up




                                                                                             3
We Have An Integrated Business Model
                                                                                                               TRULY   GLOBAL




                                                                                     FOB*
                                                 Manufacturing


                                                                                                                  R
                                                                                                                  E
                                                                                                                  T
                                                                                                       LDP**      A
              Design and                     Marketing, Distribution             Logistics and
                                                                                                                  I
             Development                         and Branding                    Warehousing
                                                                                                                  L
                                                                                                                  E
                                                                                                                  R
                                                                                                                  S


                                                    Sourcing
                                                                                     FOB*




                          Distinctive business model offering multiple sourcing options to customers

Notes:
1. FOB: Free on Board Basis
2. LDP: Landed Duty Paid Basis

                                                                                                                          4
We Have A Presence In Higher-End Of Apparel Value Chain
                                                                                                                     TRULY   GLOBAL




     Apparel Retail Value Chain
     Apparel Retail Value Chain                                HoPF’s Comprehensive Presence
                                                               HoPF’s Comprehensive Presence

                                                                             Design & Development
                                           Retailing
                                                                            Dedicated teams at each
                                                                            manufacturing location
                             HoPF’s Segments
                                Branding, Distribution


                                                           Branding & Retailing                        Manufacturing
                                Sourcing
                                                         Own brands ‘DCC’ and ‘Kool              Own facilities for Knits,
                                                         Hearts’ retailing in US                 sweaters, wovens, bottoms



               Apparel Manufacturing


                                                                Warehousing                               Sourcing
                    Fabric                               Own warehousing and                     Teams in China, India and
                                                         processing facilities in US             Bangladesh accessing 150 3rd
                                                         and UK                                  party manufacturing units


             Yarn

                                                                                       Distribution

     Fibre                                                                  Distribution offices in US, UK,
                                                                            Hong Kong; Merchandising
                                                                            teams across Canada,
                                                                            Europe, Hong Kong, UK, US



                                                                                                                                5
We Have A Global Infrastructure
                                                                                        TRULY   GLOBAL




                      Design and Development

                        • Dedicated design and product development facilities at each
                          manufacturing location
                        • 182 employees in design and development, including international
                          designers, focused on providing design and product development
                          support globally
                        • Cross-Country Exchange of Design Ideas, Speed to Market Solutions
                        • Dedicated fabric development and sampling unit in China and India


                     Manufacturing and Sourcing

                         • 10 modern ready-to-wear apparel manufacturing facilities with a
                           capacity of 20 million pieces per annum - 6 in North India, 1 in
                           South India, 2 in Bangladesh and 1 in Indonesia
                         • Manufacture a broad range of products, for both men and women
                           across all ages, comprising of Knits, Woven, Sweaters, Bottoms
                         • Source products from over 150 third-party apparel manufacturing
                           units in China, Bangladesh and India with access to additional
                           manufacturing capacities of over 120 million pieces per annum
                         • Strict compliance with international quality and labour standards


                                                                                                   6
We Have A Global Infrastructure
                                                                                                     TRULY   GLOBAL




                   Marketing, Distribution and Branding

                          •       Marketing and distribution offices located in U.S., U.K. and Hong Kong
                                  oversee marketing and merchandizing teams in Canada, Europe, Hong
                                  Kong, U.K. and U.S.
                          •       U.S. company engaged in the private label business and also sells apparel
                                  under its own brands - DCC and Kool Hearts
                          •       Experience in branding enables us to better understand the requirements of
                                  our retail customers




                       Logistics and Warehousing

                              •    Own warehousing and processing units in the U.K. and the U.S
                              •    Combined capability to handle over 2 million garments per month
                              •    Warehouses linked to the buyer's inventory system deliver apparel based
                                   on customers' requirements across all warehouses
                              •    Warehouses deliver ready for sale garments after performing pre-retailing
                                   processes like Logistics and transportation, Garment processing and
                                   ironing, Quality control, Reverse logistics and Shipping and forwarding




                                                                                                                7
Today's Discussion
                                                        TRULY   GLOBAL




    Who We Are




    How Are We Uniquely Positioned




    How We Can Continue To Grow Rapidly




    Our Impressive Financial Track Record And Outlook




                                                                   8
House of Pearl Fashion’s Has A Unique Global Footprint
                                                                                                                                                    TRULY   GLOBAL



                                                                                                               Gurgaon, India
                                                                                        Watford &
                                                                                                                Manufacturing
                                                        Milton Keynes, UK              Cheshire, UK
                                                                                                              (9 mm pieces pa*,
                            New Jersey, US                 Warehousing,                 Marketing &
                                                                                                                Woven/Knits)      Hangzhou, China
                            Warehousing &              Processing & Logistics           Distribution
                                                                                                                                     Sourcing
                               Logistics
   Ontario, Canada
     Marketing &
     Distribution


                                                                                                                                                     Kowloon, Hong
                                                                                                                                                          Kong
                                                                                                                                                      Marketing &
                                                                                                                                                       Distribution


       New York, US
         Branding,
        Marketing &
        Distribution




                                                                                                                                                        Dhaka,
                                                                                                                                                      Bangladesh
                                                                                                                                                       Sourcing




                                                                                                                                              Comilla & Gazipur,
                                                                                                                                                Bangladesh
                                                                                                                                                Manufacturing
                                                      Madrid, Spain
                                                                                                                                           (6 mm pieces pa, Knits &
                                                       Marketing &               Chennai, India                                                  Sweaters)
                                                       Distribution               Manufacturing
                                                                                                          Semarang,
       Marketing, Distribution & Sourcing                                       (3 mm pieces pa,
                                                                                                          Indonesia
                                                                                    Bottoms)
                                                                                                         Manufacturing
       Manufacturing                                                                                   (2 mm pieces pa,
                                                                                                            Woven)




                6,335 Employees in India and 4,193 Employees Globally, at 11 Strategic Locations Across 10 Countries

  * As at August 31, 2006


                                                                                                                                                                  9
We Have Long Standing Relationships With Leading Customers
                                                                                                                                 TRULY   GLOBAL




                             Duration of Relationship                   Increasing Customer Diversity
Name of the Entity / Brand        (No. of Years)
                                                                                                                          60
                                                         60                                    54
                                        10
                                                         45            40

                                        7
                                                         30

                                                         15
                                        7
                                                          0
                                        5                             FY04                    FY05                        FY06



                                        5                             “Strategic Vendor” for
                                                                   JC Penney and ASDA Wal-Mart
         Johnsons                       5
                                                                   Trend Towards Vendor Consolidation
                                        4                100
                                                                              10%

                                                          75
                                        4
                                                                                                                  80%
                                                          50
                                                                              90%
                                        2
                                                          25
                                                                                                                  20%
                                        2                  0
                                                                             Current                       3-4 Years Hence

                                        2                                     Transational Vendors   Strategic Partners

                                                        Source   KSA Technopak



                                                                                                                                           10
We Have A Risk Diversified Revenue Stream(1)
                                                                                                                                                                       TRULY   GLOBAL




    Manufacturing: 28% of Revenue; Sourcing, Distribution, Branding, Marketing: 72% of Revenue
    Manufacturing: 28% of Revenue; Sourcing, Distribution, Branding, Marketing: 72% of Revenue

             Geographically Diverse Customer Base                                                        Geographically Diverse Asset Base
                                        % of Revenue                                                                           % of Revenue
                         Other                                  U.S.                                                            Others
                                                                                                                                                U.S.
                        Countries                               26%                                                              5%
                                                                                                                Bangladesh                      13%
                          20%
                                                                                                                   8%

                                                                                                                    India
                                                                                                                    19%
                                                                                                                                                       U.K.
                                                                                                                                                       29%
                                                                                                                Hong Kong
                                     U.K.
                                                                                                                  26%
                                     54%


                        Multi Product Capability                                                         Well Spread Manufacturing Facilities
     2,000                                              1,879                        (Rs in MM)    70%                      % of Total Capacity                60%
                             1,532                                                                 60%
     1,500
                                                                                                   50%
                                                                                                   40%                                   30%
     1,000                                                                             832                                                                    Gurgaon
                                                                                                   30%
       500                                                                                         20%                               Gazipur
                                                 243                      207 229                             10%
                       82                   90
                  7                                                                                10%                               Comilla                  Chennai
         0                                                                                                 Semarang
                      FY05                       FY06                  Half Year Ended Sept. 30,   0%
                                                                                 2006                       Indonesia              Bangladesh                  India
                                     Sw eaters   Knits     Wovens
Notes:
1. Consolidated financials for 6 months ended Sept. 30, 2006

                                                                                                                                                                                 11
Our Team is Stable and Experienced
                                                                                                                           TRULY   GLOBAL




                                          Strong Corporate Leadership

       Mr. Deepak Seth                                 Mr. Pallak Seth                                Mr. Pulkit Seth
       Non-Executive Chairman                          Non-Executive Vice-Chairman                    Managing Director




       Mr. Samar Ballav Mohapatra                      Mr. Chittranjan Dua                            Mr. Tom Tar Singh
       Independent Director                            Independent Director                           Independent Director
       Secretary, Ministry of Textiles                 Corporate Lawyer                               Founder, New Look, U.K.
       (Retired)




                                         Strong Operational Leadership
     Mr. S. M. Vij                       Mr. Vineet Mathur                    Mr. Rajesh Ajwani                  Mr. Sandeep Malhotra
     Director and President              Group Financial                      CEO                                CEO
     Depa, U.S.                          Controller                           PT Norwest, PGL South              Norwest, Hong Kong




     Mr. Venkat Nagan                    Mr. Ezio Antoniol                     Mr. Anuj Banaik                   Mr. Paritosh Nath
     Executive Director                  Country Manager                       General Manager                   Chief Operating Officer
     Norwest, China                      Bangladesh                            Poeticgem, U.K.                   HoPF, U.S.




                                                                                                                                       12
Today's Discussion
                                                        TRULY   GLOBAL




    Who We Are




    How Are We Uniquely Positioned




    How We Can Continue To Grow Rapidly




    Our Impressive Financial Track Record And Outlook




                                                                  13
We Have A Well Defined Growth Strategy
                                                                                                                       TRULY   GLOBAL




                         • Add new product categories in order to increase the Company’s product offerings
     Enter New
      Enter New            – Planning to set up manufacturing of bottoms
 Product Categories
 Product Categories
  and Geographies        • Expand network of third-party manufacturing units in India, Bangladesh and China
   and Geographies
                           – Establish a network in Vietnam for supply of various product categories
                         • Expand business to new geographic locations
                           – Recently established marketing and distribution base in Canada

                                                                                                Quadrupling Capacity
  Expand Existing
   Expand Existing       • Enhance the production capacity from the current 20 to 30                 MM Pieces per Annum
   Manufacturing
    Manufacturing          million pieces per annum                                                                            30
    Facilities and
     Facilities and        – Doubled production capacity in the last 6 months
 Establish New Ones
 Establish New Ones                                                                                       16
                                                                                                                  20

                                                                                                10


                                                                                              Mar-06    Jun-06   Aug-06    Mar-10



                         • Enter into retailing in India
       Explore
        Explore
    Opportunities          – Sell the products manufactured by the Company in India directly to Indian consumer
     Opportunities
 in the Retail Sector
  in the Retail Sector     – US operations has developed brands “DCC” and “Kool Hearts”




                                                                                                                                    14
   We Will Focus On Improving Synergies and Efficiencies
                                                                                                                                                      TRULY   GLOBAL




                Integrating All Businesses Under HoPF
                Integrating All Businesses Under HoPF                                                             Improve Operating Efficiencies
                                                                                                                  Improve Operating Efficiencies
                                                                                                          • Consolidate functions and processes, such as freight
                                               House of Pearl
                                               House of Pearl                                               and cartage, to improve logistics
                                                Fashions Ltd
                                                Fashions Ltd
                                                   (India)
                                                    (India)
                                                                                                          • Develop an enterprise resource planning system to
        62.8%                 100%                100%                 99.9%             98%
                                                                                                            integrate global operations
                                House of
                                 House of         Multinational
                                                  Multinational
        Pearl Global
        Pearl Global                                                      Nor-Pearl
                                                                          Nor-Pearl        Norp Knit
                                                                                           Norp Knit
                                   Pearl
                                   Pearl             Textiles
                                                     Textiles
            Ltd*
             Ltd*                                                       Knitwear Ltd
                                                                         Knitwear Ltd   Industries Ltd
                                                                                         Industries Ltd
                                Fashions
                                 Fashions          Group Ltd
                                                    Group Ltd
          (India)
           (India)                                                     (Bangladesh)
                                                                        (Bangladesh)    (Bangladesh)
                                                                                         (Bangladesh)
                                (U.S.) Ltd
                                 (U.S.) Ltd        (Mauritius)
                                                    (Mauritius)                                           • Improve production techniques and enhance training
                                               100%             85%                                         to improve labor productivity
                                           Global
                                            Global             Norwest
                                                               Norwest
                                           Textiles
                                           Textiles        Industries Ltd
                                                            Industries Ltd
                                         Group Ltd
                                          Group Ltd         (Hong Kong)
                                                             (Hong Kong)
                                         (Mauritius)
                                          (Mauritius)

                    75%                 100%                          100%
                        Depa
                         Depa                               PT Norwest
                                                            PT Norwest
                    International
                     International       Poeticgem
                                         Poeticgem           Industries
                                                              Industries
                          Inc.
                           Inc.             Ltd
                                             Ltd            (Indonesia)
                                                             (Indonesia)
                        (U.S.)
                         (U.S.)

                               100%                      100%

                                Pacific
                                 Pacific            Poeticgem
                                                    Poeticgem
                              Logistics Ltd
                              Logistics Ltd       (Canada) Ltd
                                                   (Canada) Ltd
                                 (U.K.)
                                  (U.K.)            (Canada)
                                                     (Canada)




* Listed in India



                                                                                                                                                                15
We Will Use Acquisitions Selectively
                                                                                       TRULY   GLOBAL




              Clear M&A Strategy                            Proven Track Record

                                                 Depa, Poeticgem: Acquired in FY2005
   Acquisitions focused on:
                                               – Redefined their business strategies
    - Adding complementary product lines
                                               – Net profit margins improved 3x
    - Foray into Retail

                                                 Launched New Brand, Kool Hearts
   Acquisitions not a substitute for organic
                                               – Promising response
   growth

                                                 Augmented Marketing & Distribution
   Pursue targeted acquisitions of apparel     Capabilities
   companies or brands, strategic
   partnerships or joint ventures




                                                                                                 16
Use of Proceeds
                                                                                                              TRULY   GLOBAL




                                                                                    Estimated Total   Contribution
         Use of Proceeds                                                            Cost              from the Issue
                                                                                    (Rs Mn)           (Rs Mn)

Increase Production Capacity by establishment of manufacturing facilities at
  SIPCOT Industrial Park, Irungattukottai, India - Woven
 Narsingpur, Gurgaon, Haryana, India - Wovens and Knits
 Khandsa, Gurgaon, Haryana, India – Knits
 Dhaka, Bangladesh – Knits                                                                 1,118             578


Establishment of a Design Centre and corporate Office in Gurgaon                            143              38
Setting up an integrated Information Technology System                                      143              143
Pre-payment of certain term loans availed by Company & Subsidiaries                         550              550
Investment in Subsidiary for payment of purchase consideration for group                    511              511
companies
Setting up a domestic branded apparel retail business                                       733              545
Acquisition of an existing brand in the U.K. or the U.S. for retail outside India           400              400
General Corporate purposes
Use of Proceeds*                                                                           3,598            2,765



                                                                                                                        17
Today's Discussion
                                                        TRULY   GLOBAL




    Who We Are




    How Are We Uniquely Positioned




    How We Can Continue To Grow Rapidly




    Our Impressive Financial Track Record And Outlook




                                                                  18
Presentation of Financial Statements
                                                                                         TRULY   GLOBAL




• Integration of international businesses under HoPF (Issuer): Key Dates
   – March 28, 2006: Nor-Pearl Knitwear, Bangladesh; Norp Knit Industries, Bangladesh
   – March 31, 2006: Depa International Inc, US; Poeticgem, UK; PT Norwest Industries,
     Indonesia; Pacific Logistics, UK; Poeticgem, Canada
   – June 1, 2006: Norwest Industries, Hong Kong
   – August 1, 2006: HoPF, US


• For FY2005 and FY2006, Audited Consolidated Financial Statements of HoPF
   – Includes only Pearl Global and its subsidiaries
   – Does not include figures for global businesses


• For 6 months ended September 30, 2006, Audited Consolidated Financial Statements HoPF
   – Includes the 6 month figures for Nor-Pearl Knitwear, Bangladesh; Norp Knit Industries,
     Bangladesh; Depa International Inc, US; Poeticgem, UK; PT Norwest Industries, Indonesia;
     Pacific Logistics, UK; Poeticgem, Canada
   – Includes figures for Norwest Industries, Hong Kong from June 1, 2006 only
   – Includes figures for HoPF, US from August 1, 2006 only


                                                                                                   19
Rapid Growth in Profitability
                                                                                                                                                                                                                TRULY     GLOBAL




                              Revenue Growth(1)(2)(3)                                                                                                      PAT Growth(1)(2)(3)

         (Rs in MM)                                                                                                            (Rs in MM)


                                                                                                                                                                                    526
                                                            9,525


                                     7,734
              7,153



                                                                                                                                                              251



                                                                                  2,800                                                                                                                  147
                                                                                                                                          96




                                                                                                                                        FY05                 FY06                  FY07                Q1 F8
              FY05                   FY06                   FY07                  Q1 F8


Notes:
1.   For FY05 and FY06, the audited restated consolidated results of HoPFL represent the consolidation of only Pearl Global and its subsidiaries during the applicable periods. HoPF’s subsidiaries in Bangladesh were
     acquired on March 28, 2006; subsidiary in Mauritius, Multinational Textiles, was incorporated on March 28, 2006; and other overseas Subsidiaries, other than Norwest Industries (HK) and HoP (U.S.), were acquired
     on March 31, 2006. The consolidated information of HoPFL does not include income and expenses in respect of these entities for fiscal 2006.
2.   For the 6 months ended September 30, 2006, the audited consolidated information of HoPFL includes the income and expenses of Multinational Textiles, Nor Pearl, Norp Knit, Global Textiles Group, Poeticgem, PT
     Norwest, Depa U.S., Poeticgem Canada and Pacific Logistics. The results of Norwest Industries (HK) and HoP (U.S.) is included with effect from June 1, 2006 and August 1, 2006 respectively.
3.   FY05 PAT excludes the extraordinary loss of Rs. 40 mn on sale of sweater division of erstwhile subsidiary Pearl Style Ltd.



                                                                                                                                                                                                                            20
Improving Margins
                                                                                                                                                                                                                TRULY     GLOBAL




                            Gross Profit(1)(2)(3)                                           SG&A Costs(1)(2)(3)                                                           EBITDA Margins(1)(2)(3)
                               (% of Revenue)                                                 (% of Revenue)                                                                     (% of Revenue)


                                            21.5%

                             19.3%                          19.3%
             17.6%

                                                                                   14.2%

                                                                                                  11.9%           11.5%
                                                                                                                                   9.6%                                                       10.4%
                                                                                                                                                                                                           9.4%
                                                                                                                                                                                   7.4%


                                                                                                                                                                      3.4%




                                                                                   FY05            FY06            FY07          Q1 FY08                              FY05         FY06        FY07         Q1
              FY05           FY06            FY07         Q1 FY08              •    Progressive reduction in sample development                                                                            FY08
                                                                               •    Reduction in sourcing cost; Own office
                                                                                    established in Bangladesh
                                                                               •    Fixed cost not increasing in proportion to
                                                                                    increase in revenues


Notes:
1.   For FY05 and FY06, the audited restated consolidated results of HoPFL represent the consolidation of only Pearl Global and its subsidiaries during the applicable periods. HoPF’s subsidiaries in Bangladesh were
     acquired on March 28, 2006; subsidiary in Mauritius, Multinational Textiles, was incorporated on March 28, 2006; and other overseas Subsidiaries, other than Norwest Industries (HK) and HoP (U.S.), were acquired
     on March 31, 2006. The consolidated information of HoPFL does not include income and expenses in respect of these entities for fiscal 2006.
2.   For the 6 months ended September 30, 2006, the audited consolidated information of HoPFL includes the income and expenses of Multinational Textiles, Nor Pearl, Norp Knit, Global Textiles Group, Poeticgem, PT
     Norwest, Depa U.S., Poeticgem Canada and Pacific Logistics. The results of Norwest Industries (HK) and HoP (U.S.) is included with effect from June 1, 2006 and August 1, 2006 respectively.
3.   FY05 PAT excludes the extraordinary loss of Rs. 40 mn on sale of sweater division of erstwhile subsidiary Pearl Style Ltd.




                                                                                                                                                                                                                            21
Well Positioned To Capture The Market Opportunity
                                                                                   TRULY   GLOBAL




     We are an Indian-Multinational company in the ready-to-wear apparel
     business capable of offering total supply chain solutions to our customers


     We have an integrated business model with three distinct business streams -
     Manufacturing, Marketing Distribution and Branding & Sourcing


     We offer multi-country, multi-gender and multi-product options in each
     business stream to our customers


     In the post-quota regime, our strategy to emerge as a "One Stop Shop" for
     customers enables us to deliver strong revenue and profit growth



             Invest in Growth, Invest in House of Pearl Fashions



                                                                                             22
                 TRULY   GLOBAL




TRULY   GLOBAL




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