T R U L Y G L O B A LT R U L Y G L O B A L
T R U L Y G L O B A LT R U L Y G L O B A L
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Today's Discussion
Who We Are
How Are We Uniquely Positioned
How We Can Continue To Grow Rapidly
Our Impressive Financial Track Record And Outlook
T R U L Y G L O B A LT R U L Y G L O B A L
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Today's Discussion
Who We Are
How Are We Uniquely Positioned
How We Can Continue To Grow Rapidly
Our Impressive Financial Track Record And Outlook
T R U L Y G L O B A LT R U L Y G L O B A L
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House of Pearl Fashions Is A Global Apparel Company
Well Poised to Scale Up
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
T R U L Y G L O B A LT R U L Y G L O B A L
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We Have An Integrated Business Model
Design and
Development
Logistics and
Warehousing
Marketing, Distribution
and Branding
Manufacturing
Sourcing
LDP**
FOB*
FOB*
R
E
T
A
I
L
E
R
S
Notes:
1. FOB: Free on Board Basis
2. LDP: Landed Duty Paid Basis
Distinctive business model offering multiple sourcing options to customers
T R U L Y G L O B A LT R U L Y G L O B A L
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We Have A Presence In Higher-End Of Apparel Value Chain
SourcingSourcing
Teams in China, India and Bangladesh accessing 150 3rd
party manufacturing units
DistributionDistribution
Distribution offices in US, UK, Hong Kong; Merchandising teams across Canada, Europe, Hong Kong, UK, US
WarehousingWarehousing
Own warehousing and processing facilities in US and UK
Branding & RetailingBranding & Retailing
Own brands ‘DCC’ and ‘Kool Hearts’ retailing in US
ManufacturingManufacturing
Own facilities for Knits, sweaters, wovens, bottoms
Design & DevelopmentDesign & Development
Dedicated teams at each
manufacturing location
HoPF’s Comprehensive PresenceHoPF’s Comprehensive Presence
Fibre
Yarn
Fabric
Apparel ManufacturingApparel Manufacturing
SourcingSourcing
Branding, DistributionBranding, Distribution
Retailing
HoPF’s Segments
Apparel Retail Value ChainApparel Retail Value Chain
T R U L Y G L O B A LT R U L Y G L O B A L
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We Have A Global Infrastructure
• 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
• 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
Design and Development
Manufacturing and Sourcing
T R U L Y G L O B A LT R U L Y G L O B A L
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We Have A Global Infrastructure
• 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
• 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
Marketing, Distribution and Branding
Logistics and Warehousing
T R U L Y G L O B A LT R U L Y G L O B A L
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Today's Discussion
Who We Are
How Are We Uniquely Positioned
How We Can Continue To Grow Rapidly
Our Impressive Financial Track Record And Outlook
T R U L Y G L O B A LT R U L Y G L O B A L
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House of Pearl Fashion’s Has A Unique Global Footprint
Ontario, CanadaMarketing &
Distribution
New Jersey, USWarehousing &
Logistics
New York, US
Branding, Marketing &
Distribution
Madrid, Spain
Marketing &
Distribution
Milton Keynes, UKWarehousing,
Processing & Logistics
Watford & Cheshire, UK
Marketing &
Distribution
Chennai, India
Manufacturing
(3 mm pieces pa,
Bottoms)
Gurgaon, India
Manufacturing
(9 mm pieces pa*,
Woven/Knits)
Dhaka,
Bangladesh
Sourcing
Semarang, Indonesia
Manufacturing
(2 mm pieces pa,
Woven)
Kowloon, Hong
Kong
Marketing &
Distribution
Hangzhou, China
Sourcing
Comilla & Gazipur,
Bangladesh
Manufacturing(6 mm pieces pa, Knits &
Sweaters)
Marketing, Distribution & Sourcing
Manufacturing
6,335 Employees in India and 4,193 Employees Globally, at 11 Strategic Locations Across 10 Countries
* As at August 31, 2006
T R U L Y G L O B A LT R U L Y G L O B A L
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6054
40
0
15
30
45
60
FY04 FY05 FY06
We Have Long Standing Relationships With Leading Customers
10
7
7
5
5
5
4
4
2
2
2
Johnsons
Name of the Entity / BrandDuration of Relationship
(No. of Years)Increasing Customer Diversity
Trend Towards Vendor Consolidation
“Strategic Vendor” for JC Penney and ASDA Wal-Mart
10%
80%
90%
20%0
25
50
75
100
Current 3-4 Years Hence
Transational Vendors Strategic Partners
Source KSA Technopak
T R U L Y G L O B A LT R U L Y G L O B A L
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Geographically Diverse Customer Base
U.K.
54%
Other
Countries
20%
U.S.
26%
% of Revenue
We Have A Risk Diversified Revenue Stream(1)
0%
10%
20%
30%
40%
50%
60%
70%
Indonesia Bangladesh India
% of Total Capacity 60%
30%
10%
SemarangComilla
Gazipur
Chennai
Gurgaon
Well Spread Manufacturing Facilities
Notes:
1. Consolidated financials for 6 months ended Sept. 30, 2006
790
20782
243 229
1,532
1,879
832
0
500
1,000
1,500
2,000
FY05 FY06 Half Year Ended Sept. 30,
2006Sw eaters Knits Wovens
Multi Product Capability
(Rs in MM)
India
19%
U.S.
13%
Hong Kong
26%
U.K.
29%
Bangladesh
8%
Others
5%
Geographically Diverse Asset Base
% of Revenue
Manufacturing: 28% of Revenue; Sourcing, Distribution, Branding, Marketing: 72% of RevenueManufacturing: 28% of Revenue; Sourcing, Distribution, Branding, Marketing: 72% of Revenue
T R U L Y G L O B A LT R U L Y G L O B A L
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Our Team is Stable and Experienced
Strong Corporate Leadership
Mr. Deepak Seth
Non-Executive Chairman
Mr. Pallak Seth
Non-Executive Vice-Chairman
Mr. Pulkit Seth
Managing Director
Mr. Samar Ballav MohapatraIndependent Director
Secretary, Ministry of Textiles(Retired)
Mr. Chittranjan DuaIndependent Director
Corporate Lawyer
Mr. Tom Tar SinghIndependent Director
Founder, New Look, U.K.
Strong Operational Leadership
Mr. Ezio AntoniolCountry Manager
Bangladesh
Mr. Anuj BanaikGeneral Manager
Poeticgem, U.K.
Mr. Rajesh AjwaniCEO
PT Norwest, PGL South
Mr. S. M. VijDirector and President Depa, U.S.
Mr. Vineet MathurGroup Financial Controller
Mr. Sandeep MalhotraCEONorwest, Hong Kong
Mr. Paritosh NathChief Operating Officer
HoPF, U.S.
Mr. Venkat NaganExecutive Director Norwest, China
T R U L Y G L O B A LT R U L Y G L O B A L
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Today's Discussion
Who We Are
How Are We Uniquely Positioned
How We Can Continue To Grow Rapidly
Our Impressive Financial Track Record And Outlook
T R U L Y G L O B A LT R U L Y G L O B A L
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We Have A Well Defined Growth Strategy
• Enhance the production capacity from the current 20 to 30 million pieces per annum
– Doubled production capacity in the last 6 months
Expand Existing Manufacturing Facilities and
Establish New Ones
Expand Existing Manufacturing Facilities and
Establish New Ones
30
16
10
20
Mar-06 Jun-06 Aug-06 Mar-10
Quadrupling Capacity
MM Pieces per Annum
• Add new product categories in order to increase the Company’s product offerings
– Planning to set up manufacturing of bottoms
• Expand network of third-party manufacturing units in India, Bangladesh and China
– 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
Enter New
Product Categories and Geographies
Enter New Product Categories and Geographies
• Enter into retailing in India
– Sell the products manufactured by the Company in India directly to Indian consumer
– US operations has developed brands “DCC” and “Kool Hearts”
Explore Opportunities
in the Retail Sector
Explore Opportunities
in the Retail Sector
T R U L Y G L O B A LT R U L Y G L O B A L
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We Will Focus On Improving Synergies and Efficiencies
• Consolidate functions and processes, such as freight
and cartage, to improve logistics
• Develop an enterprise resource planning system to
integrate global operations
• Improve production techniques and enhance training
to improve labor productivity
House of Pearl
Fashions Ltd (India)
House of Pearl
Fashions Ltd (India)
Pearl Global
Ltd* (India)
Pearl Global
Ltd* (India)
Multinational Textiles
Group Ltd (Mauritius)
Multinational Textiles
Group Ltd (Mauritius)
House of Pearl
Fashions (U.S.) Ltd
House of Pearl
Fashions (U.S.) Ltd
Nor-Pearl
Knitwear Ltd (Bangladesh)
Nor-Pearl
Knitwear Ltd (Bangladesh)
Norp Knit
Industries Ltd (Bangladesh)
Norp Knit
Industries Ltd (Bangladesh)
Global
Textiles Group Ltd (Mauritius)
Global
Textiles Group Ltd (Mauritius)
Norwest Industries Ltd (Hong Kong)
Norwest Industries Ltd (Hong Kong)
Poeticgem
Ltd
Poeticgem
Ltd
Depa International
Inc. (U.S.)
Depa International
Inc. (U.S.)
PT Norwest Industries
(Indonesia)
PT Norwest Industries
(Indonesia)
Pacific Logistics Ltd
(U.K.)
Pacific Logistics Ltd
(U.K.)
Poeticgem (Canada) Ltd
(Canada)
Poeticgem (Canada) Ltd
(Canada)
62.8% 100% 100% 99.9% 98%
100% 85%
75% 100% 100%
100% 100%
* Listed in India
Improve Operating EfficienciesImprove Operating EfficienciesIntegrating All Businesses Under HoPFIntegrating All Businesses Under HoPF
T R U L Y G L O B A LT R U L Y G L O B A L
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We Will Use Acquisitions Selectively
Clear M&A Strategy
� Acquisitions focused on:
- Adding complementary product lines
- Foray into Retail
� Acquisitions not a substitute for organic
growth
� Pursue targeted acquisitions of apparel
companies or brands, strategic
partnerships or joint ventures
Proven Track Record
� Depa, Poeticgem: Acquired in FY2005
– Redefined their business strategies
– Net profit margins improved 3x
� Launched New Brand, Kool Hearts
– Promising response
� Augmented Marketing & Distribution
Capabilities
T R U L Y G L O B A LT R U L Y G L O B A L
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Use of Proceeds
General Corporate purposes
2,7653,598Use of Proceeds*
400400Acquisition of an existing brand in the U.K. or the U.S. for retail outside India
545733Setting up a domestic branded apparel retail business
511511Investment in Subsidiary for payment of purchase consideration for group
companies
550550Pre-payment of certain term loans availed by Company & Subsidiaries
143143Setting up an integrated Information Technology System
38143Establishment of a Design Centre and corporate Office in Gurgaon
5781,118
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
Use of ProceedsEstimated Total Cost(Rs Mn)
Contribution from the Issue(Rs Mn)
T R U L Y G L O B A LT R U L Y G L O B A L
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Today's Discussion
Who We Are
How Are We Uniquely Positioned
How We Can Continue To Grow Rapidly
Our Impressive Financial Track Record And Outlook
T R U L Y G L O B A LT R U L Y G L O B A L
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Presentation of Financial Statements
• 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
T R U L Y G L O B A LT R U L Y G L O B A L
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Rapid Growth in Profitability
Revenue Growth(1)(2)(3)
7,1537,734
9,525
2,800
FY05 FY06 FY07 Q1 F8
(Rs in MM)
PAT Growth(1)(2)(3)
(Rs in MM)
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.
96
251
526
147
FY05 FY06 FY07 Q1 F8
T R U L Y G L O B A LT R U L Y G L O B A L
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Improving Margins
7.4%
10.4%9.4%
3.4%
FY05 FY06 FY07 Q1
FY08
EBITDA Margins(1)(2)(3)
(% of Revenue)
Gross Profit(1)(2)(3)
(% of Revenue)
SG&A Costs(1)(2)(3)
(% of Revenue)
17.6%
19.3%
21.5%
19.3%
FY05 FY06 FY07 Q1 FY08
14.2%
11.9% 11.5%
9.6%
FY05 FY06 FY07 Q1 FY08
• Progressive reduction in sample development
• 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.
T R U L Y G L O B A LT R U L Y G L O B A L
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Well Positioned To Capture The Market Opportunity
Invest in Growth, Invest in House of Pearl Fashions
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
T R U L Y G L O B A LT R U L Y G L O B A L
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T R U L Y G L O B A LT R U L Y G L O B A L