To The Members of Cravatex Limited
Your Directors are pleased to present the 71st (Seventy First) Annual Report on the
business and operation of your Company together with the Audited Financial Statements of
the Company including Audited Balance Sheet and the Statement of Profit and Loss for the
financial year ended March 31, 2023.
|
Current Year |
Previous Year |
|
Rupees in Lacs |
Rupees in Lacs |
| FINANCIAL HIGHLIGHTS |
|
|
| Earnings before Finance Cost, Depreciation and Taxation |
710.74 |
651.95 |
| Less : Finance Cost |
136.05 |
72.12 |
| Less : Depreciation |
80.84 |
69.72 |
| Profit (Loss) before Exceptional Item |
493.85 |
510.11 |
| Exceptional Item |
(3,271.91) |
— |
| Profit (Loss) before Tax |
(2,778.06) |
510.11 |
| Tax Expense |
|
|
| Current Tax |
(32.38) |
(79.01) |
| Deferred Tax |
76.59 |
7.73 |
| Taxes of Earlier years |
19.74 |
— |
| Profit (Loss) after Taxation |
(2,714.11) |
438.83 |
| Other Comprehensive Income / (Loss) |
1.00 |
(0.77) |
| Total Comprehensive Income / (Loss) |
(2,713.11) |
438.06 |
STATEMENT OF COMPANY AFFAIRS
Trading, Leasing Income and Dividends are the major revenue sources. The Trading picked
up during the year resulting in improved revenues. Income from leasing was flat due to
contracted rentals. Dividend income was marginally higher than the previous year. During
the year, the company sold its 100% stake in Cravatex Brands Limited, a loss making
subsidiary. The one time loss arising from the sale is recognised in the Profit and Loss
account as an exceptional item.
PANDEMIC COVID-19
Various measures implemented across the country has helped reduce the trailing impact
of Covid-19. There has been an overall improvement in movement of goods and people. The
company has taken adequate precautions in protecting its employees. Movement of employees
were reduced on account of flexibility of options to work from home. However, the company
is sensitive to the Covid discipline to be followed as a precautionary measure. Although
with fading of Covid-19 the business is back to normal, the company is alert and in
readiness to overcome any similar eventuality in the near future.
DIVIDEND
The Directors are pleased to recommend dividend of Rs.0.40 (4%) per share of Rs.10/-
each on 4% Non-Convertible Cumulative Redeemable Preference Shares basis on pro-rata basis
for the financial year 2022-23, subject to tax deduction at source. The total outflow on
this dividend account will be Rs.19.26 lacs.
The Directors are also pleased to recommend final dividend of Rs.1.50 (15%) per equity
share of Rs.10/- each for the financial year 2022-23, subject to tax deduction at source.
The total outflow on this dividend account will be Rs.38.76 lacs.
EQUITY SHARE CAPITAL
The total issued, subscribed and fully paid up equity share capital of the Company
listed on BSE as on March 31, 2023 was Rs.2,58,41,600/- divided into 25,84,160 equity
shares of Rs. 10/- each.
PREFERENCE SHARES
The unlisted 4% Non-convertible Cumulative Redeemable Preference Shares (preference
shares) issued by the Company on private placement basis standing as on April 1, 2022 was
7,57,50,000/- divided into 75,75,000 preference shares of Rs. 10/- each.
The Board of Directors on July 15, 2022 redeemed 25,00,000 nos. of preference shares
and on January 13, 2023 redeemed the balance 50,75,000 nos. of preference shares of
Rs.10/- each aggregating to Rs.7,57,50,000/- out of the sum lying in the profit and loss
account of the Company.
Consequent to the said redemption, as on March 31, 2023, the total preference shares
issued by the Company stands fully redeemed.
TRANSFER TO RESERVES
The Company has not transferred any amount to the general reserves during the financial
year under review.
FIXED DEPOSITS
The Company does not have any fixed deposits covered under Chapter V of the Companies
Act, 2013 as on March 31, 2023 and accordingly, there were no unclaimed deposits as on
that date.
INSURANCE
The fixed assets of the Company have been adequately insured during the financial year
under review.
DIRECTORS & KMP
— Mr. Rohan Batra (DIN 02574195) is retiring by rotation and, being eligible,
offers himself for re-appointment.
— Mr. Divakar G. Kamath (DIN 08730430) is re-appointed as the Executive Director
& CFO of the Company for a further period of 3 (three) years with effect from April 1,
2023 consequent to expiry of his term on March 31, 2023.
Dr. S.D. Israni (DIN 00125532), Mr. N. Santhanam (DIN 00027724) and Mrs. Pheroza Jimmy
Bilimoria (DIN 00191386), Independent Directors, have registered themselves for inclusion
of their name in the Independent Directors Data Bank of The Indian Institute of Corporate
Affairs. In the opinion of the Board the said Independent Directors have the integrity,
expertise and experience as Independent Directors in the Company.
The Company conducts familiarization programs for Independent Directors with regard to
their roles, rights, responsibilities towards the Company. Detailed presentations are made
to the Board and its Committees from time to time on various matters such as business,
regulatory, litigation, CSR update etc.
There are no appointment/cessation of the Key Managerial Persons (KMP) during the
financial year ended March 31, 2023.
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
(I) CRAVATEX BRANDS LIMITED
The Board of Directors of your Company had approved the sale / transfer / disposal /
divestment of its 100% shareholding held in Cravatex Brands Limited (CBL) to Metro Brands
Limited (MBL) at its Meeting held on October 19, 2022 which was then approved by the
Members by passing a Special Resolution through Postal Ballot on November 20, 2022.
Accordingly, your Company had completed the transfer of CBL to MBL on December 1, 2022.
Therefore, CBL ceased to be the subsidiary of the Company with effect from December 1,
2022. Necessary disclosures and explanatory statement has been uploaded on BSE and Company
website as mandated.
Other than CBL none of the Company have become or ceased to be any Subsidiary, Joint
Venture or Associate Company during the financial year ended March 31, 2023. The Company
has the following Subsidiary:
(II) BB (UK) Limited (BBUK)
BB (UK) Limited (BBUK) is a 100% subsidiary of the Company incorporated in United
Kingdom. The principal activity of BB(UK) is designing, sourcing and marketing of the Fila
and Sergio Tacchini brand.
Post Brexit and Covid-19, the continuing impact of supply chain issues had its effect
on the business in terms of margin and extended lead-times. Interest rates in UK have also
risen sharply increasing the cost of doing business. The pressure on margins for retailers
in general has led to closure of many independent stores. High inflation leading to a cost
of living crisis has impacted demand significantly. However, despite these disturbances
and the consequential sales and supply chain impacts, the business during this year has
delivered a reasonable performance. The consolidated turnover of BBUK for the year was
marginally lower by around 7% vis a vis the previous year with a profit after tax at GBP
903 Lacs versus 1398 lacs in the previous year. The business environment is expected to
remain competitive and challenging due to the impacts of the global factors, Brexit and
economic uncertainty. However the company is adequately equipped to overcome the situation
by taking various counter measures and deliver a reasonable performance in the near term.
The salient features of the financial statement of the subsidiary is set 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 year ended March 31, 2023
will be kept open for inspection for the Members at the website of the Company at
https://cravatex.com/investor-relations/BBUK-Financial-Statements-2022-23.pdf 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 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 have taken all the necessary steps for ensuring compliance of all
mandatory provisions of Corporate Governance in terms of Regulation 4(2) of the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate report on
Corporate Governance is 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.
CHANGES IN THE NATURE OF BUSINESS
There is no change in the nature of business carried on by the Company and of its
Subsidiaries. The Company has not changed the class of business in which the Company has
interest.
MATERIAL CHANGES AND COMMITMENTS
There have been no significant 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 Company had adopted the Indian Accounting Standards (IND AS) from April 1, 2017,
and accordingly, the consolidated financial statements have been prepared in accordance
with the recognition and measurement principles in IND AS Interim Financial Reporting and
those prescribed under the Companies Act, 2013 read with the relevant rules issued
thereunder and the other accounting principles issued by the Institute of Chartered
Accountants of India.
ANNUAL RETURN
The annual return in Form MGT-7 referred to in Section 92(3) of the Companies Act, 2013
is placed on the website of the Company at
http://cravatex.com//investor-relations/annual-return-2022-23.pdf.
PARTICULARS OF THE EMPLOYEES
The Information required under Section 197(12) of the Companies Act, 2013 read with
rules made thereunder is included in the board report as Annexure II and forms part of
this report.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, an annual performance evaluation of the
Board is undertaken. The Board formally assesses its own performance with an aim to
improve the effectiveness of the Board and the Committees. During the year, the evaluation
was completed by the company. A structured questionnaire was prepared after taking into
consideration the various aspects of the Board functioning, composition and the Board and
its committees, culture, execution and performance of specific duties, obligations and
governance.
In case of Independent Directors, the performance evaluation was undertaken based on
various criteria such as their delivery, contribution to the Board/Committees, attendance
at the respective meetings, sharing of best practices, engaging with top management team
etc.. The performance of the Chairman and Non-Independent Directors were also carried out
by the Independent Directors.
As an outcome of the above exercise, it was noted that the functioning of the Board as
a whole, Independent Directors, Non Independent Directors and the Chairman was
satisfactory and well conducted.
NUMBER OF BOARD MEEETINGS
The Company held 6 (six) Board Meetings during the Financial Year 2022-23. These were
on May 30, 2022, July 28, 2022, August 12, 2022, October 19, 2022, November 11, 2022 and
February 13, 2023.
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 adopted a whistle blower policy as part of mechanism to provide a fair
avenues to the Directors and employees for reporting genuine concerns or grievances on any
issue which is perceived to be in violation/conflict with the Code of the Company. The
Policy has been posted on the website of the Company.
NOMINATION AND REMUNERATION POLICY
Pursuant to the provisions of Section 178 of the Companies Act, 2013 and Regulation 19
of the SEBI (LODR) Regulations, 2015, the Remuneration Policy has been formulated and
adopted by the Board. The salient features are as follows:
PURPOSE OF THE POLICY
(a) To provide guidelines to the Board while identifying persons for appointment as
directors / for positions in senior management
(b) To identify and evaluate the suitability of persons for recommending them to the
Board for their appointment as directors including managing directors and executive
directors, as also persons who may be appointed in senior management positions.
(c) To recommend to the Board the Remuneration payable to the Directors, Key Managerial
Personnel and Senior Management.
The terms of remuneration shall be based keeping in view various aspects including
qualifications, experience, performance, commitment, leadership skills, etc.
(d) To devise plans from time to time to motivate, retain and promote talent so as to
ensure long term continuity of such personnel and in the process creating competitive
advantage for the Company.
ROLE OF THE COMMITTEE
(a) To identify persons who are suitable for appointment as directors.
(b) To recommend the remuneration policy for the directors, KMP and senior management.
(c) To formulate the criteria for evaluation of Independent Directors and the Board; (d)
To devise a policy on Board diversity.
(e) To disclose the remuneration policy and the evaluation criteria in its 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 sufficient to
attract, retain and motivate directors of the quality required to run the company
successfully;
— relationship of remuneration to performance is clear and meets appropriate
performance benchmarks.
The entire policy is also disseminated on the website of the Company at
http://cravatex.com/investor-relations/Nomination-and-Remuneration-Policy.pdf.
RELATED PARTY TRANSACTIONS
As a part of healthy corporate governance and strict compliance discipline, all related
party transactions are placed before the audit committee and board for approval.
The Company has not entered into any contract/arrangement/transaction with its related
parties, which is not in the ordinary course of business or not at arms length during the
financial year 2022-23. There are no material contract/arrangement/transaction with
related parties at arms length basis during the year under review. Accordingly, the
disclosure relating to Form AOC-2 is not attached separately.
The Company has laid down policies and processes/procedures so as to ensure compliance
to Section 188 of the Companies Act, 2013 and the corresponding Rules. The details of
related party transactions for the financial year 2022-23 are provided in Note 36 of the
audited financial statements.
There are no transactions during the financial year under review with any person or
entity belonging to the promoter/promoter group which hold(s) 10% or more shareholding in
the listed entity.
The Companys Policy on Materiality of related party transactions and dealing with
related party transactions is available on the Companys website at
http://cravatex.com/investor-relations/Policy-on-Materiality-of-Events.pdf.
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 companys operations in future.
SECRETARIAL AUDIT
In terms of Section 204 of the Companies Act, 2013, Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24 of the SEBI (LODR)
Regulations, 2015, the Company had appointed M/s. Hemanshu Kapadia & Associates,
Practicing Company Secretary, to conduct the Secretarial Audit for the financial year
2022-23. The secretarial audit report is included as Annexure III and forms a part of this
report.
CORPORATE SOCIAL RESPONSIBILITY
The Company believes in its responsibilities towards the betterment of society in
general and needy in particular.
Consequent to the net profits for the financial year 2021-22 exceeding Rs.5 crores, the
provisions of Section 135 of the Companies Act, 2013 and Companies (Corporate Social
Responsibility Policy) Rules, 2014 is applicable to the Company for the financial year
2022-23.
In terms of Section 135 of the Companies Act, 2013 read with CSR Rules and in
accordance with the CSR Policy and the Annual Action Plan, the Company has during the
financial year 2022-23 spent over two percent of the average net profits of your Company
during the three preceding financial years. The details are provided in the Annual Report
on CSR activities. The Company has also formulated a CSR Policy, which is available on the
website of the Company at http://cravatex.com/investor-relations/CSRPolicy.pdf. Annual
Report on CSR activities as required under the Companies (Corporate Social Responsibility
Policy) Rules, 2014, as amended ("CSR Rules") is annexed as Annexure IV and
forms an integral 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 for the size of business.
RISK MANAGEMENT
The risks that the Company is exposed to in the normal circumstance and the 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 Covid related lockdown |
Loss of business due to restricted operations and employee absentism |
Strengthening of relationship in the market for support and internal cost control for
maintaining margins. Encouraging employees to take vaccines and other precautions. Option
to work from home enabled. |
AUDITORS REPORT
The are no fraud to be reported as required under Section 134(3)(ca) of the Companies
Act, 2013.
There are no qualifications, reservation, adverse remark or disclaimer made by the
Auditors of the Company in his report and by the Company Secretary in Practice in his
secretarial audit report under Section 134(3)(f) of the Companies Act, 2013.
STATUTORY AUDITORS
M/s. GPS and Associates, Chartered Accountants, Mumbai (Firm Regd. No. 121344W) were
appointed as the Statutory Auditors of the Company in the 70th Annual General Meeting of
the Company to hold office for a second term from the conclusion of the 70th Annual
General Meeting until the conclusion of the 75th Annual General Meeting. The said
Statutory Auditor shall hold office until the conclusion of the 75th Annual General
Meeting to be held in the year 2027.
PREVENTION OF SEXUAL HARASSMENT
The Company encourages and supports Women employees at work place in terms of their
safety and protection.
Under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013 every Company is required to adopt policy for prevention of Sexual
Harassment of Women at workplace set up an Internal Complaints Committee to look into
complaints relating to sexual harassment at work place of any women employee. As the
number of employees in the Company is less than ten, it is not mandatory to adopt policy
for prevention of Sexual Harassment of Women at workplace and set up Committee for
implementation of said policy. However, the spirit of the regulation is taken note of in
case of any event for appropriate action in the interest of a healthy corporate
governance.
TRANSFER OF UNCLAIMED SHARES TO IEPF
Section 124(6) of the Companies Act, 2013 read with the Investor Education and
Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, Investor
Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment
Rules, 2017 and General Circular No.12/2017 dated October 16, 2017, stipulated that shares
on which dividend has not been paid or claimed for 7 consecutive years 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 Act, 2013.
Accordingly, the Company had sent individual notices to the respective Members at their
latest available address in the records of Company and Depositories providing the details
of shares which are due for transfer requesting them to claim their unpaid dividends on or
before September 16, 2022 and avoid the transfer of their shares to IEPF. The Company had
also published a newspaper notice in Business Standard in English Language and in Sakal in
Marathi Language to this effect. In case where no valid claim was received on or before
September 16, 2022 the Company would take necessary steps to issue duplicate share
certificate (for the shares held in physical mode) and issue delivery instruction slip
(for the shares held in demat mode) and transfer the shares to IEPF account. Accordingly,
1,858 Equity Shares of the Company have been transferred to the Investor Education and
Protection Fund (IEPF) during the financial year 2022-23 in accordance with Section 125 of
the Companies Act, 2013 read with the rules made thereunder.
SECRETARIAL STANDARDS
The Company has complied with all the applicable secretarial standards issued by The
Institute of Company Secretaries of India and notified by the Central Government.
COST RECORDS
As per Section 148(1) of the Act read with the Companies (Cost Records and Audit)
Rules, 2014, the maintenance of cost records is not mandated for the Company.
MISCELLANEOUS
There is no application made or any proceeding pending under the Insolvency and
Bankruptcy Code, 2016 (31 of 2016) during the financial year.
There are no details to be provided for difference between amount of the valuation done
at the time of one time settlement and the valuation done while taking loan from the Banks
or Financial Institutions along with the reasons thereof.
There are no details to be provided for voting rights which are not directly exercised
by the employees in respect of shares for the subscription/purchase of which loan was
given by the Company as there is no such scheme as envisaged under Section 67(3) of the
Companies 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 |
|
For Cravatex Limited |
|
Rajesh Batra |
|
Chairman & Managing Director |
|
DIN: 00020764 |
| Place : Mumbai |
|
| Dated : May 26, 2023 |
|
| CIN : L93010MH1951PLC008546 |
|
| Registered Office: |
|
| Ground Floor (East Wing) |
|
| Forbes Building, Charanjit Rai Marg |
|
| Fort, Mumbai – 400 001 |
|
| Tel No.: +91 22 66667474 |
|
| Email: investors@cravatex.com |
|
| Website: http://cravatex.com |
|
+91-9892691696
