To The Members of Cravatex Limited
Your Directors present the audited Financial Statements of the Company includingaudited Balance Sheet and the Statement of Profit and Loss together with their Report forthe year ended March 31 2016.
| ||Current Year ||Previous Year |
| ||Rupees ||Rupees |
|FINANCIAL RESULTS || || |
|Earnings before Finance Cost Depreciation and Taxation ||60467587 ||161758760 |
|Less: Finance Cost ||119778663 ||95476644 |
|Less: Depreciation ||30836271 ||35903459 |
|Profit before Taxation ||(90147347) ||30378663 |
|Provision for Taxation: || || |
|Current Tax || ||(6500000) |
|MAT Credit Entilements || ||3900000 |
|Deferred Tax Credit/(Debit) ||(2110836) ||(4988769) |
|Profit after Current Taxation ||(92258183) ||22789894 |
|Add : Brought forward from Previous Year ||20163231 ||17463991 |
|Balance available for Appropriation/ (Deficit) ||(72094952) ||40253885 |
|Add : Debit Balance adjusted by transfer from general reserve ||72094952 || |
| || ||40253885 |
|Less: Appropriations || || |
|Adjustments relating to Fixed Assets || ||3870012 |
|Proposed Dividend || ||5168320 |
|Tax on Proposed Dividend || ||1052322 |
|Amount transferred to General Reserve || ||10000000 |
|Balance in Profit and Loss Account || ||20163231 |
STATEMENT OF COMPANY AFFAIRS
The turnover of the Company for the year under review was Rs.18591 lacs as againstRs.18573 lacs in previous year while the earning before finance cost depreciation andtaxation stood at Rs.605 lacs as against Rs.1618 lacs for the respective year. Loss aftertax for the year was Rs 922.58 lacs as against the profit of Rs 227.90 lacs for previousyear.
Since the company has reported losses the Directors have decided not to recommend anydividend on the shares of the Company for the year ended March 31 2016.
The paid up equity share capital as on March 31 2016 was Rs.25841600/-. During thefinancial year 2015-16 the Company has not issued any equity shares.
The company had on April 12 2016 allotted 9000000 4% Non - Convertible CumulativeRedeemable Preference shares to the Promoter Group on Private Placement basis.Consequently the total issued subscribed and fully paid up share capital of the Companyw.e.f April 12 2016 is Rs. 115841600/- divided into 2584160 equity shares of Rs.10/- each and 9000000 4% Non Convertible Cumulative Redeemable Preference sharesof Rs. 10/- each.
INCREASE IN AUTHORISED SHARE CAPITAL
The authorized share capital of the Company w.e.f. April 2 2016 increased fromRs.50000000/- divided into 4850000 Equity Shares of Rs.10/- each and 15000 9.5%Cumulative Redeemable Preference Shares of Rs.100/- each to Rs.150000000/- divided into4850000 Equity Shares of Rs.10/- each and 10150000 Preference shares of Rs. 10/-each. The existing 15000 9.5% Cumulative Redeemable Preference Shares of Rs.100/- eachhas been reclassified and increased to 10150000 Preference Shares of Rs. 10/- each.
TRANSFER TO RESERVES
The company has not transferred any amount to the general reserves due to losses.
The Company had accepted unsecured fixed deposits from its various members under theprovisions of erstwhile Section 58A of the Companies Act 1956 and the rules madethereunder. The Company does not invite or accept any fresh deposits from its member butrenews the existing unsecured deposits as and when due for renewal.
The total Unsecured Fixed Deposits stood at Rs.22525000/- as on March 31 2016 andthere were no unclaimed deposits as on that date.
There has been no default in repayment of deposits or payment of interest thereonduring the year and all deposits are in compliance with the requirements of Chapter V ofthe Companies Act 2013
The fixed assets of the Company have been adequately insured.
ISO 9001 : 2008
The Company successfully conducted the Surveillance Audit for year 2015 under ISO 9001: 2008 certification for its Fitness division.
Mr. Nabankur Gupta (DIN 00020125) is retiring by rotation and being eligibleoffer himself for re-appointment.
Mr. Rajesh Batra (DIN 00020764) was appointed as the Managing Director of theCompany for a period of 5 (five) years with effect from June 1 2011 upto May 31 2016. Itis proposed to re-appoint Mr. Rajesh Batra as the Managing Director of the Company for afurther period of 3 (three) years with effect from June 1 2016 and pay a remunerationupto Rs.42 lacs to Mr. Rajesh Batra.
Ms. Pheroza Jimmy Bilimoria (DIN 00191386) was appointed as an IndependentDirector for a period of 5 years from August 14 2015 upto August 13 2020 or upto thedate of Annual General Meeting to be held in the calendar year 2020 whichever is earlier.
Mr. Divakar Kamath was promoted and re-designated as President - CorporateAffairs of the Company w.e.f. December 7 2015 and accordingly he ceased to be the ChiefFinancial Officer of the Company w.e.f. December 7 2015.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149 (6) of the Companies Act 2013 and Regulation16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
The details pertaining to the composition of audit committee are included in theCorporate Governance Report which forms part of this report.
BB (UK) Ltd. a wholly owned subsidiary of the Company completed its fifth year ofoperations. It operates the FILA license in parts of the UK Ireland Middle East andAfrica. It also provides sourcing services to several FILA licensees across the world. Ina very difficult economic environment it achieved a turnover of Rs.6882.63 lacs (previousyear Rs. 4682.45 lacs) and a profit before tax of Rs.157.93 lacs (previous year Rs.46.84lacs).
In accordance with the provisions of Section 129(3) of the Companies Act 2013 theCompany has prepared a consolidated financial statement of the Company and its subsidiarycompany which is forming part of the annual report.
The salient features of the financial statement of the subsidiary is set out in theprescribed Form AOC-1 which forms part of the annual report.
The annual accounts of the subsidiary will also be kept open for inspection for theMembers at the Registered Office of the Company during the Companys business hourson any working day upto and including the date of the Annual General Meeting.
DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 134(5) of the Companies Act 2013 the Directors state that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis; and
(e) the directors in the case of a listed company had laid down internal financialcontrols to be followed by the company and that such internal financial controls areadequate and were operating effectively.
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Your Company has taken adequate steps to ensure that all mandatory provisions ofCorporate Governance in terms of Regulation 4(2) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 has been complied with. A separate report onCorporate Governance is being incorporated as a part of the Annual Report along with aCertificate from a Practicing Company Secretary.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34(2)(e) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is annexed and forms a part of this report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information required pursuant to Section 134(3)(m) of the Companies Act 2013 read withThe Companies (Accounts) Rules 2014 is given in the Annexure I to this Report.
PARTICULARS OF THE EMPLOYEES
There was only 1 person employed throughout the year who was in receipt of of Rs.60lacs per annum or more and none of the employee employed for part of the financial yearwas in receipt of remuneration of Rs.5 lacs per month or more. During the financial yearended March 31 2016 the company had 304 permanent employees on the rolls of company.
The Information required under Section 197(12) of the Companies Act 2013 read withrules made thereunder forms part of this report. However as per provision of Section136(1) of the Companies Act 2013 the accounts are being sent to all Members excluding thestatement of particulars of employees under Section 197(12) of the Act. The company willmake available the particulars available to the Members seeking such information at anypoint of time. The particulars of the employees u/s 136(1) will also be kept open forinspection for the Members at the Registered Office of the Company during theCompanys business hours on any working day upto and including the date of the AnnualGeneral Meeting or any adjournment or adjournments thereof.
CHANGES IN THE NATURE OF BUSINESS
There is no change in the nature of business carried on by the Company and of itsSubsidiary. The Company has not changed the class of business in which the Company has aninterest.
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of the report.
The consolidate financial statements of the Company are prepared in accordance with therelevant accounting standards viz AS-21 AS-23 and AS-27 issued by the Institute ofChartered Accountants of India and forms a part of this report.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the annual return in Form MGT-9 as requiredunder Section 92(3) of the Companies Act 2013 and Rule 12(1) of the Companies (Managementand Administration) Rules 2014 is included in this report as Annexure II and forms a partof this report.
Pursuant to the provisions of the Companies Act 2013 and Regulation 4(2) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 a structuredquestionnaire was prepared after taking into consideration the various aspects of theBoard functioning composition and the Board and its committee culture execution andperformance of specific duties obligations and governance.
The performance evaluation of the Independent Directors was completed. The performanceof the Chairman and Non-Independent Directors were carried out by the IndependentDirectors. The Board of Directors express their satisfaction with the evaluation process.
NUMBER OF BOARD MEEETINGS
The Company held 4 (four) Board Meetings during the Financial Year 2015 - 16. Thesewere on May 29 2015 August 14 2015 November 6 2015 and February 12 2016.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of loans guarantees and investments covered under section 186 of the CompaniesAct 2013 are given in the notes to the financial statement.
WHISTLE BLOWER POLICY
The Company has a whistle blower policy to report genuine concerns or grievances. Thewhistle blower policy has been posted on the website of the Company.
NOMINATION AND REMUNERATION POLICY
The Board of Directors have framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Persons and Senior Management of the Company.This policy also lays down criteria for selection and appointment of Board Members.
RELATED PARTY TRANSACTIONS
All transaction entered with related parties were on arms length basis in the ordinarycourse of business and that the provisions of section 188 of the Companies Act 2013 werenot attracted. Hence disclosure under Form AOC - 2 is not required. Further there are nomaterial related party transactions during the year under review with the Promoters KeyManagerial Persons and Senior Management Personnel. The Company has developed a relatedparty transactions framework through standard operating procedures for the purpose ofidentification and monitoring of such transactions. All related party transactions areplaced before the audit committee and board for approval.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and companys operations in future.
CORPORATE SOCIAL RESPONSIBILITY
The Company is committed to support the underprivileged sections of the society andthereby undertakes Corporate Social Responsibility initiatives in accordance with theterms of Section 135 of the Companies Act 2013 and the guidelines stated in Schedule VIIof the Companies Act 2013. The report on CSR activites as required under Companies(Corporate Social Responsibility) Rules 2014 is set out at annexure III and forms part ofthis report.
In terms of Section 204 of the Companies Act 2013 and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company has appointed M/s. HemanshuKapadia & Associates Practising Company Secretary to conduct the Secretarial Auditfor the financial year 2015-16. The secretarial audit report is included as Annexure IVand forms a part of this report.
INTERNAL CONTROL SYSTEMS
Objective evaluation of adequacy and efficiency of internal controls and systems aredone by qualified audit firm and monitored closely by the top management. Present controlsystems are considered as adequate though constantly improved up on.
The risks that the Company is exposed to and the measures taken by the Company totackle the same are as follows:
|Sr. No. ||Risk Description ||Key Risk Matrix ||Mitigation Measure |
|1 ||Increase in cost of goods due to adverse movement of foreign exchange rates. ||Reduction in profit margin. ||Open position is monitored daily and hedging is done by way of forward cover. |
|2 ||Destruction of properties and assets due to fire etc ||Loss of assets resulting in financial loss. ||Comprehensive insurance is taken and monitored from time to time for adequacy. We have tied up with a corporate insurance consultant for all our insurance needs. |
|3 ||Termination of licenses/selling arrangements ||Discontinuation of business in related specified product ||1. FILA License: A comprehensive document listing all compliance parameters with name of persons responsible is in place. |
| || || ||2. Johnsons Distribution Arrangement: Achieving of annual sales target is the main compliance parameter which is discussed with the licensor and complied with. |
| || || ||3. Wilson Distribution Arrangement: Achieving of annual sales target is the main compliance parameter which is discussed with the licensor and complied with. |
There are no qualifications reservation adverse remark or disclaimer made by theAuditors and do not call for any explanation or comment under Section 134(1)(f) of theCompanies Act 2013.
M/s. S. P. Chopra & Co. (Registration No.101911W) Chartered Accountants willretire at the conclusion of this Annual General Meeting and are eligible forre-appointment as auditors of the Company.
PREVENTION OF SEXUAL HARASSMENT
The Company is committed to provide a safe and conductive work environment to all womenemployees. The Company strives hard to ensure that all women employees are treatedwith dignity and respect and are committed to providing a work environment free of sexualharassment. Pursuant to the Sexual Harassment of Women at Workplace (ProhibitionPrevention and Redressal) Act 2013 and rules made thereunder the Company has a Policyfor prevention of Sexual Harassment in the Company. This policy is applicable to allcategories of employees of the Company including permanent management temporary stafftrainees and employees on contract at its workplace.
During the financial year under review there were no cases filed pursuant to theSexual Harassment of Women at Workplace (Prohibition Prevention and Redressal) Act 2013.
Your directors wish to place on record their appreciation for the efforts hard workdedication and commitment put by employees at all levels as also for the valuable supportextended by the Members Bankers and other business associates.
For and on behalf of the Board of Directors
Chairman & Managing Director
Place : Mumbai
Dated : May 27 2016
CIN : L93010MH1951PLC008546
Sahas 4th Floor 414/2 Veer Savarkar Marg
Prabhadevi Mumbai-400 025.
Tel. No.: +91 22 66667474 Fax No.: +91 22 24313210