REPORT OF THE BOARD OF DIRECTORS DIRECTORS' REPORT To The Members of Cravatex Limited Your Directors present the audited Financial Statements of the Company including audited Balance Sheet and the Statement of Profit and Loss together with their Report for the year ended March 31, 2016. STATEMENT OF COMPANY AFFAIRS The turnover of the Company for the year under review was Rs.185,91 lacs as against Rs.185,73 lacs in previous year, while the earning before finance cost, depreciation and taxation stood at Rs.605 lacs as against Rs.1,618 lacs for the respective year. Loss after tax for the year was Rs 922.58 lacs as against the profit of Rs 227.90 lacs for previous year. DIVIDEND Since the company has reported losses, the Directors have decided not to recommend any dividend on the shares of the Company for the year ended March 31, 2016. SHARE CAPITAL The paid up equity share capital as on March 31, 2016 was Rs.2,58,41,600/-. During the financial year 2015-16 the Company has not issued any equity shares. The company had on April 12, 2016 allotted 90,00,000 4% Non - Convertible Cumulative Redeemable Preference shares to the Promoter Group on Private Placement basis. Consequently, the total issued, subscribed and fully paid up share capital of the Company w.e.f April 12, 2016 is Rs. 11,58,41,600/- divided into 25,84,160 equity shares of Rs. 10/- each and 90,00,000 4% Non - Convertible Cumulative Redeemable Preference shares of Rs. 10/- each. INCREASE IN AUTHORISED SHARE CAPITAL The authorized share capital of the Company w.e.f. April 2, 2016 increased from Rs.5,00,00,000/- divided into 48,50,000 Equity Shares of Rs.10/- each and 15,000 9.5% Cumulative Redeemable Preference Shares of Rs.100/- each to Rs.15,00,00,000/- divided into 48,50,000 Equity Shares of Rs.10/- each and 1,01,50,000 Preference shares of Rs. 10/- each. The existing 15,000 9.5% Cumulative Redeemable Preference Shares of Rs.100/- each has been reclassified and increased to 1,01,50,000 Preference Shares of Rs. 10/- each. TRANSFER TO RESERVES The company has not transferred any amount to the general reserves due to losses. FIXED DEPOSITS The Company had accepted unsecured fixed deposits from its various members under the provisions of erstwhile Section 58A of the Companies Act 1956 and the rules made thereunder. The Company does not invite or accept any fresh deposits from its member but renews the existing unsecured deposits as and when due for renewal. The total Unsecured Fixed Deposits stood at Rs.2,25,25,000/- as on March 31, 2016 and there were no unclaimed deposits as on that date. There has been no default in repayment of deposits or payment of interest thereon during the year and all deposits are in compliance with the requirements of Chapter V of the Companies Act, 2013 INSURANCE 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. DIRECTORS - Mr. Nabankur Gupta (DIN 00020125) is retiring by rotation and, being eligible, offer himself for re-appointment. - Mr. Rajesh Batra (DIN 00020764) was appointed as the Managing Director of the Company for a period of 5 (five) years with effect from June 1, 2011 upto May 31, 2016. It is proposed to re-appoint Mr. Rajesh Batra as the Managing Director of the Company for a further period of 3 (three) years with effect from June 1, 2016 and pay a remuneration upto Rs.42 lacs to Mr. Rajesh Batra. - Ms. Pheroza Jimmy Bilimoria (DIN 00191386) was appointed as an Independent Director for a period of 5 years from August 14, 2015 upto August 13, 2020 or upto the date 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 - Corporate Affairs of the Company w.e.f. December 7, 2015 and accordingly he ceased to be the Chief Financial 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 of independence as laid down under Section 149 (6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. AUDIT COMMITTEE The details pertaining to the composition of audit committee are included in the Corporate Governance Report, which forms part of this report. SUBSIDIARY BB (UK) Ltd., a wholly owned subsidiary of the Company completed its fifth year of operations. It operates the FILA license in parts of the UK, Ireland, Middle East and Africa. It also provides sourcing services to several FILA licensees across the world. In a very difficult economic environment, it achieved a turnover of Rs.6882.63 lacs (previous year Rs. 4682.45 lacs) and a profit before tax of Rs.157.93 lacs (previous year Rs.46.84 lacs). In accordance with the provisions of Section 129(3) of the Companies Act, 2013, the Company has prepared a consolidated financial statement of the Company and its subsidiary company, which is forming part of the annual report. The salient features of the financial statement of the subsidiary is set out in the prescribed Form AOC-1, which forms part of the annual report. The annual accounts of the subsidiary will also be kept open for inspection for the Members at the Registered Office of the Company during the Company's business hours on 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 had been followed along with proper explanation relating to material departures; (b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period; (c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. (f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. CORPORATE GOVERNANCE Your Company has taken adequate steps to ensure that all mandatory provisions of Corporate Governance in terms of Regulation 4(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been complied with. A separate report on Corporate Governance is being incorporated as a part of the Annual Report along with a Certificate from a Practicing Company Secretary. MANAGEMENT DISCUSSION AND ANALYSIS REPORT The Management Discussion and Analysis Report for the year under review, as stipulated under 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 with The 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.60 lacs per annum or more and none of the employee employed for part of the financial year was in receipt of remuneration of Rs.5 lacs per month or more. During the financial year ended 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 with rules made thereunder forms part of this report. However, as per provision of Section 136(1) of the Companies Act, 2013 the accounts are being sent to all Members excluding the statement of particulars of employees under Section 197(12) of the Act. The company will make available the particulars available to the Members, seeking such information at any point of time. The particulars of the employees u/s 136(1) will also be kept open for inspection for the Members at the Registered Office of the Company during the Company's business hours on any working day upto and including the date of the Annual General 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 its Subsidiary. The Company has not changed the class of business in which the Company has an interest. MATERIAL CHANGES AND COMMITMENTS There have been no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report. CONSOLIDATED ACCOUNTS The consolidate financial statements of the Company are prepared in accordance with the relevant accounting standards viz AS-21, AS-23 and AS-27 issued by the Institute of Chartered 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 required under Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014 is included in this report as Annexure II and forms a part of this report. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Regulation 4(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a structured questionnaire was prepared after taking into consideration the various aspects of the Board functioning, composition and the Board and its committee, culture, execution and performance of specific duties, obligations and governance. The performance evaluation of the Independent Directors was completed. The performance of the Chairman and Non-Independent Directors were carried out by the Independent Directors. 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. These were 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 Companies Act, 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. The whistle 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 to remuneration 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 ordinary course of business and that the provisions of section 188 of the Companies Act, 2013 were not attracted. Hence, disclosure under Form AOC - 2 is not required. Further there are no material related party transactions during the year under review with the Promoters, Key Managerial Persons and Senior Management Personnel. The Company has developed a related party transactions framework through standard operating procedures for the purpose of identification and monitoring of such transactions. All related party transactions are placed 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 or tribunals impacting the going concern status and company's operations in future. CORPORATE SOCIAL RESPONSIBILITY The Company is committed to support the underprivileged sections of the society and thereby undertakes Corporate Social Responsibility initiatives in accordance with the terms of Section 135 of the Companies Act, 2013 and the guidelines stated in Schedule VII of 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 of this report. SECRETARIAL AUDIT In terms of Section 204 of the Companies Act, 2013, and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company has appointed M/s. Hemanshu Kapadia & Associates, Practising Company Secretary, to conduct the Secretarial Audit for the financial year 2015-16. The secretarial audit report is included as Annexure IV and forms a part of this report. INTERNAL CONTROL SYSTEMS Objective evaluation of adequacy and efficiency of internal controls and systems are done by qualified audit firm and monitored closely by the top management. Present control systems are considered as adequate though constantly improved up on. AUDITORS' REPORT There are no qualifications, reservation, adverse remark or disclaimer made by the Auditors and do not call for any explanation or comment under Section 134(1)(f) of the Companies Act, 2013. STATUTORY AUDITORS M/s. S. P. Chopra & Co. (Registration No.101911W), Chartered Accountants, will retire at the conclusion of this Annual General Meeting and are eligible for re-appointment as auditors of the Company. PREVENTION OF SEXUAL HARASSMENT The Company is committed to provide a safe and conductive work environment to all women employees. The Company strive's hard to ensure that all women employees are treated with dignity and respect, and are committed to providing a work environment free of sexual harassment. Pursuant to the Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013 and rules made thereunder, the Company has a Policy for prevention of Sexual Harassment in the Company. This policy is applicable to all categories of employees of the Company, including permanent management, temporary staff, trainees and employees on contract at its workplace. During the financial year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013. ACKNOWLEDGEMENT Your directors wish to place on record their appreciation for the efforts, hard work, dedication and commitment put by employees at all levels as also for the valuable support extended by the Members, Bankers and other business associates. For and on behalf of the Board of Directors Rajesh Batra Chairman & Managing Director Place : Mumbai Dated : May 27, 2016 CIN : L93010MH1951PLC008546 Registered Office: Sahas, 4th Floor, 414/2, Veer Savarkar Marg, Prabhadevi, Mumbai-400 025. Tel. No.: +91 22 66667474, Fax No.: +91 22 24313210 E-mail: investors@cravatex.com Website: www.cravatex.com |