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Cravatex Ltd.

BSE: 509472 Sector: Others
NSE: N.A. ISIN Code: INE145E01017
BSE 00:00 | 08 Dec 346.00 9.00






NSE 05:30 | 01 Jan Cravatex Ltd
OPEN 325.20
52-Week high 479.00
52-Week low 211.00
P/E 9.72
Mkt Cap.(Rs cr) 89
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 325.20
CLOSE 337.00
52-Week high 479.00
52-Week low 211.00
P/E 9.72
Mkt Cap.(Rs cr) 89
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Cravatex Ltd. (CRAVATEX) - Director Report

Company director report


To The Members of Cravatex Limited

Your Directors are pleased to present the 69th (Sixty Nineth) AnnualReport on the business and operation of your Company together with the Audited FinancialStatements of the Company including Audited Balance Sheet and the Statement of Profit andLoss for the financial year ended March 31 2021.

Current Year Previous Year
Rupees in Lacs Rupees in Lacs
Earnings before Finance Cost Depreciation and Taxation 757.56 420.23
Less : Finance Cost 65.34 80.07
Less : Depreciation 73.59 84.87
Profit (Loss) before Exceptional Item 618.63 255.29
Exceptional Item -
Profit (Loss) before Tax 618.63 255.29
Tax Expense
Current Tax (81.50) (44.53)
Deferred Tax Asset / (Liability) 39.50 21.39
Excess Tax Provision for Earlier years -
Profit (Loss) after Taxation 576.63 232.15
Other Comprehensive Income / (Loss) (1.96) (5.32)
Total Comprehensive Income / (Loss) 574.67 226.83


The overall market witnessed a lower operating activity due torestrictions on account of Covid-19 lockdown across the country. While the revenue fromlease rental was intact the garment trading operation continued to be affected andrecorded marginally lower revenue vis a vis the previous year.

The total revenue from operations of the Company for the year underreview was Rs.230.76 lacs as against Rs.242.07 lacs in the previous year. The revenuemainly consists of income from trading business lease rent and dividend from subsidiary.The profit before finance cost depreciation and taxation stood at Rs.757.56. lacs asagainst Rs.420.23 lacs for the previous year mainly due to dividend received from theoverseas subsidiary.


The COVID-19 disease which was declared as global pandemic in March2020 continued during the year with severe adverse impact on people s health and theoverall economy as well. The lockdown across the country resulted in to restrictedoperations and logistics. The business operations were shut down during most part of theyear. For ensuring safety of employees work from home policy was implemented. All thegovernment advisories/compliances and disciplines were followed meticulously. Themanagement continued to work very hard for keeping the company and its subsidiaries readyand fit for operations as and when the normalcy returns post lifting of lockdown.


The Directors are pleased to recommend dividend of Rs.0.40 (4%) pershare of Rs.10/- each on 7575000 4% Non-Convertible Cumulative Redeemable PreferenceShares basis for the financial year ended 2020-21 subject to tax deduction at source. Thetotal outflow on this dividend account will be Rs.30.30 lacs.

The Directors are also pleased to recommend final dividend of Rs.3/-(30%) per equity share of Rs.10/- each for the financial year 2020-21 subject to taxdeduction at source. The total outflow on this dividend account will be Rs.7752480/-lacs.


The total issued subscribed and fully paid up equity share capital ofthe Company as on March 31 2021 was Rs.25841600/ - divided into 2584160 equityshares of Rs. 10/- each (listed on BSE).


As on March 31 2021 the unlisted 4% Non-convertible CumulativeRedeemable Preference Shares (preference shares) issued by the Company on privateplacement basis was Rs. 75750000/- divided into 7575000 preference shares of Rs. 10/-each.


The Company has not transferred any amount to the general reservesduring the financial year under review.


The Company does not have any fixed deposits covered under Chapter V ofthe Companies Act 2013 as on March 31 2021 and accordingly there were no unclaimeddeposits as on that date.


The fixed assets of the Company have been adequately insured during thefinancial year under review.


Mr. Divakar G. Kamath (DIN : 08730430) was appointed as the ExecutiveDirector and CFO with effect from April 1 2020. Mr. Rohan Batra (DIN : 02574195) wasappointed as a Director liable to retire by rotation with effect from April 1 2020. Mr.Rohan Batra (DIN : 02574195) is retiring by rotation and being eligible offers himselffor re-appointment.

Dr. S.D. Israni Mr. N. Santhanam and Mrs. Pheroza Jimmy BilimoriaIndependent Directors have registered themselves for inclusion of their name in theIndependent Directors Data Bank of The Indian Institute of Corporate Affairs. In theopinion of the Board the said Independent Directors have the integrity expertise andexperience for their re-appointment as Independent Directors in the Company.

There are no appointment/cessation of the Key Managerial Persons (KMP)during the financial year ended March 31 2021.


All Independent Directors have given declarations that they meet thecriteria of independence as laid down under Section 149 (6) of the Companies Act 2013 andRegulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.


The details pertaining to the composition of audit committee areincluded in the Corporate Governance Report which forms part of this report.


During the year under Report No Company have become or ceased to beany Subsidiaries Joint Ventures or Associate Companies. However the Company have thefollowing Subsidiaries:


Cravatex Brands Limited is a material Subsidiary of the Company. CBL srevenue is contributed by Sports Goods consisting of apparel footwear accessories etc.and Fitness Equipment business mainly consisting of Gym equipment. The consumer demand forsports goods was severely affected due to lock down. Retail outlets remained shut for mostpart of the year. Online revenue was badly hit by low demand and also restrictions ondelivery of non-essential goods. Gym equipment business was adversely impacted by slump inreal estate market and closure of Gyms across the country due to Covid-19 restrictions.The overall economic activity was muted for this sector during FY 2020-21 as a result ofwhich the CBL s revenue for FY 2020-21 recorded almost half of the previous year revenue.

The ongoing process of merger of Proline India Limited (PIL) with CBLwas finally concluded with effect from FY 2020-21. The apparel business of PIL faredreasonably well in the lockdown situation during the year though on lower operations andmargins compared to the previous year.

The post-merger operating income of CBL for FY 2020-21 was Rs.13018lacs vis a vis Rs.23839 lacs in the previous year. PIL business contributed operatingrevenue of Rs.5627 lacs during the year. Major source of revenue was from online saleswhich was also impacted due to muted demand and restrictions on movement and doordelivery. CBL posted loss before finance cost depreciation and tax of Rs.2136 lacs asagainst the profit of Rs.372 lacs for the previous year. Despite strict control/reductionin costs across expenses heads CBL posted a net loss before tax of Rs.4975 lacs due tosteep fall in revenues as against the net loss of Rs.2144 lacs for previous year.

The management and the promoters are working hard taking every possiblesteps including the infusion of funds to support CBL for survival in the currentunprecedented difficult situation. With continuing of Covid-19 pandemic related setbacksand curbs across the country the industry faces enormous challenges in the immediatefuture.

(II) BB (UK) Limited (BBUK)

BB(UK) Limited incorporated in United Kingdom is a 100% subsidiary ofthe Company. The principal activity of BBUK is designing sourcing manufacturinge-commerce and wholesale of Branded goods especially Fila and Sergio Tacchini sportswearcasual wear and life style products such as footwear and accessories.

Severe disturbance was caused during the year due to the continuingCovid-19 pandemic with consequential impact on sales and supply chain. Order book wasunder severe pressure vis a vis the previous year. However the margins in percentageterms recorded improvement over previous year due to a strict control over other expenses.Total revenue during the FY 2020-21 in INR terms was Rs.39927.61 lacs vis a visRs.62383.63 lacs in the previous year. Profit before tax was Rs.1921.64 lacs vis a visRs.1912.99 lacs in the previous year indicating an improvement in percentage terms overthe previous year.

The management team is working very hard for restoring the normaloperations during the current continuing pandemic period. With continued restrictedbusiness operations in FY 2021-22 there is a continued effort to improve the performance.

Implementation of Brexit in UK was expected to cause consequences forbusiness entities in UK. Hence with a view to avoiding the potential outcome oursubsidiary BB(UK) has formed a 100% subsidiary in Eschweiler Germany viz. BB Europe GmbHon 23rd December 2020 to deal with the consequences of Brexit and to be able to tradeseamlessly with its European clients. The nature of business will be same as the holdingcompany BB UK and the business will be operational in the FY 2021-22.

The salient features of the financial statement of the subsidiary isset out in the prescribed Form AOC-1 as Annexure V which forms part of the board report.

The financial statement of the subsidiaries for the financial yearended March 31 2021 will be kept open for inspection for the Members at the website ofthe Company at upto andincluding the date of the Annual General Meeting.


As required under Section 134(5) of the Companies Act 2013 theDirectors state that:

(a) in the preparation of the annual accounts the applicableaccounting standards had been followed along with proper explanation relating to materialdepartures;

(b) the directors had selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;

(d) the directors had prepared the annual accounts on a going concernbasis; and

(e) the directors had laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively.

(f) the directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.


Your Company continues to take necessary steps for ensuring complianceof all mandatory provisions of Corporate Governance in terms of Regulation 4(2) of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. A separatereport on Corporate Governance is incorporated as a part of the Annual Report along with aCertificate from a Practicing Company Secretary.


The Management Discussion and Analysis Report for the year underreview as stipulated under Regulation 34(2)(e) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is annexed and forms a part of this report.


Information required pursuant to Section 134(3)(m) of the CompaniesAct 2013 read with The Companies (Accounts) Rules 2014 is given in the Annexure I tothis Report.


There is no change in the nature of business carried on by the Companyand of its Subsidiaries. The Company has not changed the class of business in which theCompany has interest.


Due to the continued Covid-19 pandemic along with second wave thecompany s operations are expected to be further impacted vis--vis the previous year.Except this there have been no material changes and commitments affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany to which the financial statements relate and the date of the report.


The Company had adopted the Indian Accounting Standards (IND AS) fromApril 1 2017 and accordingly the consolidated financial statements have been preparedin accordance with the recognition and measurement principles in IND AS Interim FinancialReporting and those prescribed under the Companies Act 2013 read with the relevant rulesissued thereunder and the other accounting principles issued by the Institute of CharteredAccountants of India.


The annual return in Form MGT-7 referred to in Section 92(3) of theCompanies Act 2013 is placed on the website of the Company at


The Information required under Section 197(12) of the Companies Act2013 read with rules made thereunder is included in the board report as Annexure II andforms part of this report.


Pursuant to the provisions of the Companies Act 2013 and the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 an annual performanceevaluation of the Board is undertaken. The Board formally assesses its own performancewith an aim to improve the effectiveness of the Board and the Committees. During the yearthe evaluation was completed by the company. A structured questionnaire was prepared aftertaking into consideration the various aspects of the Board functioning composition andthe Board and its committees culture execution and performance of specific dutiesobligations and governance.

In case Independent Directors the performance evaluation wasundertaken based on various criteria such as their delivery contribution to theBoard/Committees attendance at the respective meetings sharing of best practicesengaging with top management team etc.. The performance of the Chairman andNon-Independent Directors were also carried out by the Independent Directors.

As an outcome of the above exercise it was noted that the functioningof the Board as a whole Independent Directors Non Independent Directors and the Chairmanwas satisfactory and well conducted.


The Company held 4 (four) Board Meetings during the Financial Year 2020- 21. These were on June 29 2020 August 14 2020 November 12 2020 and February 122021.


Details of loans guarantees and investments covered under section 186of the Companies Act 2013 are given in the notes to the financial statement.


The Company has adopted a whistle blower policy as part of mechanism toprovide a fair avenues to the Directors and employees for reporting genuine concerns orgrievances on any issue which is perceived to be in violation/conflict with the Code ofthe Company. The Policy has been posted on the website of the Company.


Pursuant to the provisions of Section 178 of the Companies Act 2013and Regulation 19 of the SEBI (LODR) Regulations 2015 the Remuneration Policy has beenformulated and adopted by the Board. The salient features are as follows:


(a) To provide guidelines to the Board while identifying persons forappointment as directors / for positions in senior management

(b) To identify and evaluate the suitability of persons forrecommending them to the Board for their appointment as directors including managingdirectors and executive directors as also persons who may be appointed in seniormanagement positions.

(c) To recommend to the Board the Remuneration payable to theDirectors Key Managerial Personnel and Senior Management.

The terms of remuneration shall be based keeping in view variousaspects including qualifications experience performance commitment leadership skillsetc.

(d) To devise plans from time to time to motivate retain and promotetalent so as to ensure long term continuity of such personnel and in the process creatingcompetitive advantage for the Company.


(a) To identify persons who are suitable for appointment as directors.

(b) To recommend the remuneration policy for the directors KMP andsenior management. (c) To formulate the criteria for evaluation of Independent Directorsand the Board; (d) To devise a policy on Board diversity.

(e) To disclose the remuneration policy and the evaluation criteria inits Annual Report.

(f) To recommend Board about the appointment and removal of directors.

(g) While formulating such a policy the Committee shall ensure that:

the level and composition of remuneration is reasonable and sufficientto attract retain and motivate directors of the quality required to run the companysuccessfully;

relationship of remuneration to performance is clear and meetsappropriate performance benchmarks.

The entire policy is also disseminated on the website of the Company at


All related party transactions are placed before the audit committeeand board for approval.

The Company has not entered into any contract/arrangement/transactionwith its related parties which is not in the ordinary course of business or not at arm slength during the financial year 2020-21. There are no materialcontract/arrangement/transaction with related parties at arms length basis during the yearunder review. Accordingly the disclosure relating to Form AOC-2 is not attachedseparately.

The Company has laid down policies and processes/procedures so as toensure compliance to Section 188 of the Companies Act 2013 and the corresponding Rules.The details of related party transactions for the financial year 2020-21 are provided inNote 37 of the audited financial statements.

There are no transactions during the financial year under review withany person or entity belonging to the promoter/promoter group which hold(s) 10% or moreshareholding in the listed entity.

The Company s Policy on Materiality of related party transactions anddealing with related party transactions is available on the Company s website at


There are no significant and material orders passed by the regulatorsor courts or tribunals impacting the going concern status and company s operations infuture


Since the company not being the specified class of Company theprovisions of Section 135 of the Companies Act 2013 were not applicable to the Companyduring the financial year 2020-21.

Consequent to the net profits for the financial year 2020-21 exceedingRs.5 crores the provisions of Section 135 of the Companies Act 2013 and Companies(Corporate Social Responsibility Policy) Rules 2014 will become applicable to the Companyfrom financial year 2021-22.


In terms of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and Regulation 24 ofthe SEBI (LODR) Regulations 2015 the Company had appointed M/s. Hemanshu Kapadia &Associates Practicing Company Secretary to conduct the Secretarial Audit for thefinancial year 2020-21. The secretarial audit report is included as Annexure III and formsa part of this report.

Pursuant to the amendment in Regulation 24(1) of the SEBI (LODR)Regulations 2015 the secretarial audit report of the material subsidiary of the Companynamely Cravatex Brands Ltd. is included as Annexure IV and forms part of this report.


Objective evaluation of adequacy and efficiency of internal controlsand systems are done by qualified audit firm and monitored closely by the top management.Present control systems are considered as adequate for the size of business.


The risks that the Company is exposed to in the normal circumstance andthe measures taken by the Company to tackle the same are as follows:

Risk Description Key Risk Matrix Mitigation Measure
1 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.
2 Loss of income from office premises Fall in rentals in the market Premises falling vacant A duly registered Leave and License is contracted with reputed Licensee for a certain period.
3 Pandemic Loss of business due to restricted operations and economic slow down Continuous monitoring of the situation internal controls preventive measures for employees and cost control for maintaining margins.


The are no fraud to be reported as required under Section 134(3)(ca) ofthe Companies Act 2013.

There are no qualifications reservation adverse remark or disclaimermade by the Auditors of the Company under Section 134(3)(f) of the Companies Act 2013.

The Secretarial Auditors have pointed out delay in issue of sharecertificates which as explained by the RTA was due to current covid pandemic situation.


M/s. GPS and Associates Chartered Accountants Mumbai (Firm Regd. No.121344W) were appointed as the Statutory Auditors of the Company in the 65th AnnualGeneral Meeting of the Company to hold office for a period of 5 years from the conclusionof the 65th Annual General Meeting until the conclusion of the 70th Annual GeneralMeeting. The said Statutory Auditor shall hold office until the conclusion of the 70thAnnual General Meeting.


Under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 every Company is required to adopt policy forprevention of Sexual Harassment of Women at workplace set up an Internal ComplaintsCommittee to look into complaints relating to sexual harassment at work place of any womenemployee. As the number of employees in the Company is less than ten the Company is notrequired to adopt policy for prevention of Sexual Harassment of Women at workplace and setup Committee for implementation of said policy. However the spirit of the regulation istaken note of in case of any event for appropriate action in the interest of a healthycorporate governance.


Section 124(6) of the Companies Act 2013 read with the InvestorEducation and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules2016 Investor Education and Protection Fund Authority (Accounting Audit Transfer andRefund) Amendment Rules 2017 and General Circular No.12/2017 dated October 16 2017stipulated that shares on which dividend has not been paid or claimed for 7 consecutiveyears or more are to be transferred to the Investor Education and Protection Fund (IEPF)a Fund constituted by the Government of India under Section 125 of the Companies Act2013.

Accordingly the Company had sent individual notices to the respectiveshareholders at their latest available address in the records of Company and Depositoriesproviding the details of shares which are due for transfer requesting them to claim theirunpaid dividends on or before September 29 2020 and avoid the transfer of their shares toIEPF. The Company had also published a newspaper notice in Business Standard in EnglishLanguage and in Sakal in Marathi Language to this effect. In case where no valid claim wasreceived on or before September 29 2020 the Company would take necessary steps to issueduplicate share certificate (for the shares held in physical mode) and issue deliveryinstruction slip (for the shares held in demat mode) and transfer the shares to IEPFaccount. Accordingly 2004 Equity Shares of the Company have been transferred to theInvestor Education and Protection Fund (IEPF) during the financial year 2020-21 inaccordance with Section 125 of the Companies Act 2013 read with the rules madethereunder.


The Company has complied with all the applicable secretarial standardsissued by The Institute of Company Secretaries of India and notified by the CentralGovernment.


As per Section 148(1) of the Act read with the Companies (Cost Recordsand Audit) Rules 2014 the maintenance of cost records is not mandated for the Company.


Your directors wish to place on record their appreciation for theefforts hard work dedication and commitment put by employees at all levels as also forthe valuable support extended by the Members Bankers and other business associates.

For and on behalf of the Board of Directors
For Cravatex Limited
Rajesh Batra

Chairman & Managing Director

DIN: 00020764
Place : Mumbai
Dated : June 29 2021
CIN : L93010MH1951PLC008546
Registered Office:
Ground Floor (East Wing)
Forbes Building Charanjit Rai Marg
Fort Mumbai - 400 001
Tel No.: +91 22 66667474