"The pursuit towards attaining excellence in fashion is ever-demanding andnever-ending"
Rupa is a pioneer in improvising its process to optimize its operational efficiency toachieve excellence in fashion and comfort. The Company is focusing to restructure itsbusiness processes in all streams from sales distribution marketing productioncelebrity endorsement human resource development new business initiatives &trademark protection for continued growth and development.
FY 2016-17 has been another year of meaningful progress towards our objective of beingthe best innerwear company in India. During the year under review we maintained focus ontwo long-term growth strategies - enhance our core business and expanding the premiumvertical of our product portfolio to newer destinations which has resulted in strongvalue creation. We are doing all of this while upholding our unwavering commitment todeliver profits.
The existing landscape
Retailing in Indian landscape is nothing new with small and big stores in every city -whether Tier I II III and even Tier IV. But with the advent of large format retailstores and branding of products through various modes of media consumer sentiments havestarted shifting to products which not only offer value in terms of comfort & costbut also in terms of qualitative brand aspiration. Innerwear products have now become astyle quotient. Branded innerwear products are becoming a staple product for everywardrobe in India .
Our premeditated initiatives
We are fairly optimistic about the prospects of the domestic innerwear industry whichhas always been a guiding force towards the expansion of our Company with new products andnewer geographies. We feel proud that one of our Wholly- owned Subsidiary (WOS) hasentered into exclusive licensing agreements with French Connection Limited to developmanufacture market and sell their innerwear and related products with the brand name'FCUK' in India and with Fruit of the Loom INC a New York Corporation (WOS of BerkshireHathaway Company) to manufacture distribute advertise and sell innerwear and outerwearproducts for men boys women girls and toddler in India under their brand names &marks 'Fruit of the Loom'. These strategic collaborations of our WOS would give Rupagroup an upper hand in the ever demanding premium and super-premium innerwear casual wearand fashion wear markets domestically.
Tier II and below cities are now becoming a catalyst of growth of the Indian economyand they are seeing a paradigm shift in the consumer sentiments and behaviors. We havealways focused at the niche and with same vision we are adding new dealers and stores insuch towns and cities to gain the maximum.
We have with us on board leading celebrities like Hrithik Roshan Ranveer SinghSiddharth Malhotra and Bipasha Basu to endorse our products.
With these initiatives we are driving productivity to improve our overallcompetitiveness. These changes will make us more competitive in the marketplace -improving our agility and enabling us to focus on innovation.
Sense of satisfaction
The increasing relevance of our brands and their global acceptance is a outcome of ourbelief that fashion for a cause is a people friendly proposition that will find farreaching acceptance. With innovative designs improved & integrated manufacturingfacilities marketing expanded network of retail outlets financial strength andmanagerial bandwidth to operate in multiple and diverse geographies we are confident toachieve our strategic vision. Our focus on delivering with the above strategies is a keydriver of our continued growth and development. Despite the volatile geo-politicalenvironment we remain committed to drive the business towards delivering consistentcompetitive profitable and responsible growth. Our strong fiscal position and efficientcost structure enable us to become a sustainable value creator for shareholders. Wedelivered a competitive total return to our shareholders both in the short and long term.We also proposed a dividend of Rs. 2.75 per share (i.e. 275%) for FY 2016-17.
Looking to future
Going forward we believe that the introduction of the Goods and Services Tax (GST)will not only address structural taxation bottlenecks that impede the free movement ofgoods between states and reduce our overall cost structure but also reduce transit timein getting products from their points of origin to consumption. Plus in a highlyunorganised innerwear industry with 50% market share going to such players GST is a boonfor company like ours which would make us more competitive. Post implementation webelieve that not only the manufacturing cost would reduce but we would also get set-offon service tax towards advertisement expenses.
Message to stakeholders
"Rupa" is geared for greater success and our people are inspired to build abrand that the stakeholders can rely upon. We will continue to invest in enhancing theskills of our people so that we can continue to deliver products that are in line withinternational standards.
As responsible corporate citizens we promote various community well-being projects andprogrammes directly or indirectly and through the Rupa Foundation. The Foundation worksin the realms of healthcare education and community development amongst others. We aresteadfast to build a company which consistently grows in step with aspirational India andwe seek the support of all our stakeholders in this undertaking.
'Rupa' is not only a Company of strongly-held convictions but also with the abilityand willingness to act on those convictions to maintain its value proposition with all itsstakeholders.
On behalf of the entire leadership team at Rupa we thank our people and all those whohave a stake in our progress.
Prahlad Rai Agarwala
Ghanshyam Prasad Agarwala
Kunj Bihari Agarwal