Cravatex Ltd. — Annual Report 2021

Aug 5, 2021

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Digitally signed by SUDHANSHU NAMDEO DN: c=IN, o=Personal,

2.5.4.20=925a3182dfaeb944aef04c2182756 SUDHANSH 96ed8797edcd95692041189f0d7dbd75ba8, postalCode=410218, st=Maharashtra, serialNumber=ed5747e3e6b898fec2d2218 U NAMDEO 61890d0b5acbfee35124932f1bd649a2993918105, cn=SUDHANSHU NAMDEO Date: 2021.08.05 14:47:15 +05'30'

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69th Annual Report 2020 - 21

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CRAVATEX LIMITED

BOARD OF DIRECTORS AND GENERAL INFORMATION

Board of Directors

– Rajesh Batra Chairman & Managing Director S. D. Israni – Independent Director N. Santhanam – Independent Director – Pheroza Jimmy Bilimoria Independent Director Divakar G. Kamath – Executive Director and CFO Rohan Batra – Non Executive Director

Auditors

GPS & Associates 105-106, Shyamkamal, ‘D’ Building Agarwal Market Vile Parle (East), Mumbai-400 057.

Bankers

HDFC Bank Limited

Chief Financial Officer

Divakar G. Kamath

Registrars & Share Transfer Agents

(from August 29, 2020) Link Intime India Private Limited C 101, 247 Park, LBS Marg Vikhroli (West), Mumbai-400 083.

(Upto August 28, 2020) Sharex Dynamic (India) Private Limited C 101, 247 Park, LBS Marg Vikhroli (West), Mumbai-400 083.

Company Secretary

Sudhanshu Namdeo

Registered Office

(from October 1, 2020) Ground Floor (East Wing), Forbes Building Charanjit Rai Marg, Fort, Mumbai-400 001.

(Upto September 30, 2020) 2nd Floor, Matulya Center Senapati Bapat Marg Lower Parel (West), Mumbai-400 013.

Contents

Financial Highlights	2	Cash Flow Statement	55
Notice	3	Notes to Financial Statement	56
Board’s Report	13	Consolidated Auditors’ Report	89
Management Discussion & Analysis Report	29	Consolidated Balance Sheet	94
Report on Corporate Governance	31	Consolidated Profit and Loss Statement	95
Auditors’ Report	45	Consolidated Cash Flow Statement	97
Balance Sheet	52	Notes to the Consolidated Statement	98
Profit & Loss Statement	53

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69TH ANNUAL REPORT

FINANCIAL HIGHLIGHTS

(Rs. in Lacs)

	2020-21	2019-20	2018-19	2017-18	2016-17
			IND AS
Equity Share Capital	258	258	258	258	258
Reserves and Surplus	3598	3049	2926	2727	2659
Net Worth	3856	3307	3184	2986	2918
Fixed Assets*	1464	1621	1646	2260	2265
Depreciation*	623	789	714	1234	1144
Net Block*	841	832	932	1026	1120
Turnover	231	242	104	74	15697
Earning / (Loss) before Taxes	619	255	295	32	(660)
Final Dividend	78	26	52	26	—
	(30%)	(10%)	(20%)	(10%)	—
Interim Dividend	—	52	—	—	—
	—	(20%)	—	—	—
Earning / (Loss) Per Share	22.31	8.98	8.76	1.63	(12.20)

• Includes Tangible Assets, Intangible Assets & Investment Property

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CRAVATEX LIMITED

NOTICE OF ANNUAL GENERAL MEETING

NOTICE

NOTICE is hereby given that the 69th (Sixty Nineth) Annual General Meeting of the Members of CRAVATEX LIMITED will be held on Friday, August 27, 2021 at 3.30 p.m. IST through Video Conferencing (“VC”) / Other Audio Visual Means (“OAVM”) to transact the business as mentioned below. The venue of the meeting shall be deemed to be at the Registered Office of the Company at Ground Floor (East Wing), Forbes Building, Charanjit Rai Marg, Fort, Mumbai - 400 001.

ORDINARY BUSINESS

1. To consider and adopt :

2. (a) the Audited Financial Statements of the Company for the financial year ended March 31, 2021 including Audited Balance Sheet as at March 31, 2021 and the Statement of Profit and Loss, Cash Flow Statement for the year ended on that date together with Reports of the Directors and Auditors thereon; and

3. (b) the Audited Consolidated Financial Statements of the Company for the financial year ended March 31, 2021 including Audited Balance Sheet as at March 31, 2021 and the Statement of Profit and Loss, Cash Flow Statement for the year ended on that date together with Reports of the Auditors thereon

4. To declare a final dividend on 4% Non-convertible Cumulative Redeemable Preference Shares for the financial year 2020-21.

5. To declare a final dividend on the Equity Shares for the financial year 2020-21.

6. To appoint a Director in place of Mr. Rohan Batra (DIN 02574195) who retires by rotation and, being eligible, offers himself for re-appointment.

By Order of the Board of Directors For Cravatex Limited

Sudhanshu Namdeo Company Secretary

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 Email: investors@cravatex.com Website: www.cravatex.com

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NOTICE OF ANNUAL GENERAL MEETING

NOTES

1. In view of the continuing Covid-19 pandemic, the Ministry of Corporate Affairs (“MCA”) has vide its circular dated May 5, 2020 read with circulars dated April 8, 2020, April 13, 2020, June 15, 2020, September 28, 2020 and January 13, 2021 (“MCA Circulars”) and SEBI vide its circulars dated May 12, 2020 and January 15, 2021 (“SEBI Circulars”) permitted the holding of the Annual General Meeting (“AGM”) through Video Conferencing (VC) / Other Audio Visual Means (OAVM), without the physical presence of the Members at a common venue. In compliance with the provisions of the Companies Act, 2013 (“Act”), SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (“SEBI Listing Regulations”) and MCA Circulars, the AGM of the Company is being held through VC / OAVM.

2. National Securities Depositories Limited (‘NSDL’) will be providing facility for voting through remote e-voting, for participation in the AGM through VC / OAVM facility.

3. Since this AGM is being held pursuant to the MCA and SEBI Circulars through VC / OAVM, physical attendance of Members has been dispensed with. Accordingly, the facility for appointment of proxies by the Members will not be available for the AGM and hence the Proxy Form and Attendance Slip are not annexed to this Notice.

4. A statement giving the details of the Director seeking re-appointment under Item No. 4 of the accompanying Notice, as required under Regulation 26(4), Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and other requisite information as per Clause 1.2.5 of Secretarial Standard-2 on General Meetings, are provided in annexure attached herewith.

5. SEBI Vide Notification No. SEBI/LAD-NRO/GN/2018/24 dated June 8, 2018 and further amendment vide Notification No. SEBI/ LAD-NRO/GN/2018/49 dated November 30, 2018, any request for effecting transfer of securities (except in case of transmission or transposition of securities) shall not be processed from April 1, 2019 unless the securities are held in the dematerialized form with the depositories. Therefore, members are requested to take action to dematerialize their Equity Shares in the Company, promptly, if the Equity Shares are held in physical form.

6. The Register of Members and Share Transfer Books of the Company will remain closed from Saturday, August 21, 2021 to Friday, August 27, 2021 (both days inclusive) for the purpose of determining Members eligible for dividend on Equity Shares, if approved by the Members.

7. The dividend on Equity Shares, if declared at the Annual General Meeting, will be paid on or after August 27, 2021 to Members whose names appear on the record of Depositories [National Securities Depository Limited and Central Depository Services (India) Limited] on August 20, 2021 (for shares held in demat mode) and in the Register of Members of the Company (for shares held in physical mode) updated as on August 20, 2021. The dividend will be paid to the Members within the stipulated time.

8. Members are requested to immediately notify any change in their name, registered address, email id, telephone/mobile numbers, permanent account number (PAN), nominations, power of attorney, bank mandate viz. name and address of the branch of the bank, MICR code of the branch, account number with blank cancelled cheque to their Depository Participant (DP) quoting their Client IDs in case of shares held in demat form and to the Registrars and Share Transfer Agents of the Company quoting their Folio Number in case of shares held in physical form.

9. Members seeking any information with regard to the accounts or any matter to be placed at the AGM, are requested to write to the Company at least 7 days before the Annual General Meeting through email on investors@cravatex.com. The same will be replied by the Company suitably.

10. Unclaimed dividends for the financial year ended March 31, 2014 shall be transferred to the Investor Education and Protection Fund (IEPF) of the Central Government in terms of the provisions of Section 124 of the Companies Act 2013.Those members who have so far not encashed the dividend(s) from the financial year ended March 31, 2014 till the financial year ended March 31, 2020 are requested to approach the Registrars and Share Transfer Agents of the Company for payment. The Company has not declared any dividend for the financial year ended March 31, 2016 and March 31, 2017.

In terms of the IEPF (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the information in respect of the unclaimed dividends as on the date of the 68th Annual General Meeting (AGM) held on August 13, 2020, on the website of the IEPF viz. www.iepf.gov.in and also under the “Investors Section” on the website of the Company viz. www.cravatex.com .

1. Members holding shares in physical form may nominate a person in respect of all the shares held by them whether singly or jointly. Members who hold shares singly are advised to avail of nomination facility in their own interest. Members holding shares in demat form may contact their respective Depository Participants for recording of nomination.

2. In compliance with the aforesaid MCA and SEBI Circulars. Notice of the AGM along with the Annual Report 2020-21 is being sent only through electronic mode to those Members whose email addresses are registered with the Depository Participant

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NOTICE OF ANNUAL GENERAL MEETING

(DP)/Registrar & Share Transfer Agents. Members may note that the Notice and Annual Report 2020-21 will also be available on the Company’s website www.cravatex.com, websites of the Stock Exchange i.e. BSE Limited at www.bseindia.com and on the website of NSDL https://www.evoting.nsdl.com. Members who have not registered their email address so far are requested to register their e-mail address with the Depository Participant (DP)/Registrar & Share Transfer Agents of the Company for receiving all communications from the Company electronically. In case you have not registered your email id with the Company / Depository Participant please access the link https://linkintime.co.in/EmailReg/Email_Register.html to temporarily register your email id for obtaining Annual Report 2020-21 and e-voting login details therein.

1. Members attending the AGM through VC / OAVM shall be counted for the purpose of reckoning the quorum under Section 103 of the Act.

2. Pursuant to Finance Act 2020, dividend income will be taxable in the hands of Members w.e.f. April 1, 2020 and the Company is required to deduct tax at source from dividend paid to Members at the prescribed rates. For the prescribed rates for various categories, the Members are requested to refer to the Finance Act, 2020 and amendments thereof. The Members are requested to update their PAN with the Registrar and Share Transfer Agents (in case of shares held in physical mode) and with Depository Participant (in case of shares held in demat mode).

A Resident individual shareholder with PAN and who is not liable to pay income tax can submit a yearly declaration in Form No. 15G/15H, to avail the benefit of non-deduction of tax at source by August 20, 2021 by accessing the link https:// linkintime.co.in/formsreg/submission-of-form-15g-15h.html. Members are requested to note that in case their PAN is not registered, the tax will be deducted at a higher rate of 20%.

Non-resident Members can avail beneficial rates under tax treaty between India and their country of residence, subject to providing necessary documents i.e. No Permanent Establishment and Beneficial Ownership Declaration, Tax Residency Certificate, Form 10F, any other document which may be required to avail the tax treaty benefits by August 20, 2021 by accessing the link https://linkintime.co.in/formsreg/submission-of-form-15g-15h.html.

1. The Members can join the AGM in the VC/OAVM mode 15 minutes before and after the scheduled time of the commencement of the Meeting by following the procedure mentioned in the Notice. The facility of participation at the AGM through VC/OAVM will be made available for 1000 members on first come first served basis. This will not include large Members (Members holding 2% or more shareholding), Promoters, Institutional Investors, Directors, Key Managerial Personnel, the Chairpersons of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee, Auditors etc. who are allowed to attend the AGM without restriction on account of first come first served basis.

2. Since the AGM will be held through VC / OAVM, the Route Map is not being annexed to this Notice.

3. Pursuant to the provisions of Section 108 of the Companies Act, 2013 read with Rule 20 of the Companies (Management and Administration) Rules, 2014 (as amended) and Regulation 44 of SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 (as amended), and the Circulars issued by the Ministry of Corporate Affairs dated April 08, 2020, April 13, 2020, May 05, 2020, June 15, 2020, September 28, 2020 and January 13, 2021 the Company is providing facility of remote e-voting to its Members in respect of the business to be transacted at the AGM. For this purpose, the Company has entered into an agreement with National Securities Depository Limited (NSDL) for facilitating voting through electronic means, as the authorized agency. The facility of casting votes by a member using remote e-voting system as well as e- voting on the date of the AGM will be provided by NSDL.

4. The members who have cast their vote by remote e-voting prior to the AGM may also attend the AGM but shall not be entitled to cast their vote again.

5. The remote e-voting period commences on Tuesday, August 24, 2021 (9:00 a.m. IST) and ends on Thursday, August 26, 2021 (5:00 p.m. IST). During this period, Members holding shares either in physical form or in dematerialized form, as on Friday, August 20, 2021 i.e. cut-off date, may cast their vote electronically.

The e-voting module shall be disabled by NSDL for voting after the above stated ending time on that date. Those Members, who will be present in the AGM through VC / OAVM facility and have not cast their vote on the Resolutions through remote e-voting and are otherwise not barred from doing so, shall be eligible to vote through e-voting system during the AGM.

Members will be provided with a facility to attend the AGM through VC / OAVM through the NSDL e-voting system. Members may access the same at https://www.evoting.nsdl.com under Members login by using the remote e-voting credentials. The link for VC / OAVM will be available in Members login where the EVEN of Company will be displayed. Please note that the Members who do not have the User ID and Password for e-voting or have forgotten the User ID and Password may retrieve the same by following the remote e-voting instructions mentioned in the notice. Further Members can also use the OTP based login for logging into the e-voting system of NSDL.

1. The voting rights of members shall be in proportion to their shares of the paid up equity share capital of the Company as on the cut-off date i.e Friday, August 20, 2021.

2. A person, whose name is recorded in the register of members or in the register of beneficial owners maintained by the

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69TH ANNUAL REPORT

NOTICE OF ANNUAL GENERAL MEETING

depositories as on the cut-off date i.e. Friday, August 20, 2021 only shall be entitled to avail the facility of remote e-voting as well as attending and e-voting at the AGM.

1. Any person, who acquires shares of the Company and become member of the Company after dispatch of the notice and holding shares as on the cut-off date i.e. Friday, August 20, 2021, may obtain the login ID and password by sending a request at evoting@nsdl.co.in or rnt.helpdesk@linkintime.co.in.

However, if the person is already registered with NSDL for remote e-voting then the person can use the existing User ID and password for casting the vote.

1. The Instructions for Members for Remote E-Voting are as under:

The way to vote electronically on NSDL e-Voting system consists of “Two Steps” which are mentioned below:

Step 1: Access to NSDL e-Voting system

• (A) Login method for e-Voting and joining virtual meeting for Individual shareholders holding securities in demat mode

• (B) Login Method for shareholders other than Individual shareholders holding securities in demat mode and shareholders holding securities in physical mode.

Step 2: Cast your vote electronically on NSDL e-Voting system.

Details on Step 1 is mentioned below:

(A) Login method for e-Voting and joining virtual meeting for Individual shareholders holding securities in demat mode

In terms of SEBI circular dated December 9, 2020 on e-Voting facility provided by Listed Companies, Individual shareholders holding securities in demat mode are allowed to vote through their demat account maintained with Depositories and Depository Participants. Shareholders are advised to update their mobile number and email Id in their demat accounts in order to access e-Voting facility.

Login method for Individual shareholders holding securities in demat mode is given below:

Type of shareholders

Login Method

Individual Shareholders holding securities in demat mode with NSDL.

1. If you are already registered forNSDL IDeAS facility, please visit the e-Services website of NSDL. Open web browser by typing the following URL: https:// eservices.nsdl.com/ either on a Personal Computer or on a mobile. Once the home page of e-Services is launched, click on the“Beneficial Owner”icon under “Login” which is available under“IDeAS”section. A new screen will open. You will have to enter your User ID and Password. After successful authentication, you will be able to see e-Voting services. Click on “Access to e-Voting” under e-Voting services and you will be able to see e-Voting page. Click on options available against company name ore-Voting service provider - NSDLand you will be re-directed to NSDL e-Voting website for casting your vote during the remote e-Voting period or joining virtual meeting & voting during the meeting. 2. If the user is not registered for IDeAS e-Services, option to register is available at https://eservices.nsdl.com. Select“Register Online for IDeAS”Portal or click at https://eservices.nsdl.com/SecureWeb/IdeasDirectReg.jsp 3. Visit the e-Voting website of NSDL. Open web browser by typing the following URL: https://www.evoting.nsdl.com/ either on a Personal Computer or on a mobile. Once the home page of e-Voting system is launched, click on the icon “Login” which is available under ‘Shareholder/Member’ section. A new screen will open. You will have to enter your User ID (i.e. your sixteen digit demat account number held with NSDL), Password/OTP and a Verification Code as shown on the screen. After successful authentication, you will be redirected to NSDL Depository site wherein you can see e-Voting page. Click on options available against company name ore-Voting service provider - NSDLand you will be redirected to e-Voting website of NSDL for casting your vote during the remote e-Voting period or joining virtual meeting & voting during the meeting.

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CRAVATEX LIMITED

NOTICE OF ANNUAL GENERAL MEETING

Type of shareholders	Login Method
Individual Shareholders holding securities in demat mode with CDSL	1. Existing users who have opted for Easi / Easiest, they can login through their user id and password. Option will be made available to reach e-Voting page without any further authentication. The URL for users to login to Easi / Easiest are https:// web.cdslindia.com/myeasi/home/login or www.cdslindia.com and click on New System Myeasi. 2. After successful login of Easi/Easiest the user will be also able to see the E Voting Menu. The Menu will have links ofe-Voting service provider i.e. NSDL. Click on NSDLto cast your vote. 3. If the user is not registered for Easi/Easiest, option to register is available at https:/ /web.cdslindia.com/myeasi/Registration/EasiRegistration 4. Alternatively, the user can directly access e-Voting page by providing demat Account Number and PAN No. from a link in www.cdslindia.com home page. The system will authenticate the user by sending OTP on registered Mobile & Email as recorded in the demat Account. After successful authentication, user will be provided links for the respective ESP i.e.NSDLwhere the e-Voting is in progress.
Individual Shareholders (holding securities in demat mode) login through their depository participants	You can also login using the login credentials of your demat account through your Depository Participant registered with NSDL/CDSL for e-Voting facility. Once login, you will be able to see e-Voting option. Once you click on e-Voting option, you will be redirected to NSDL/CDSL Depository site after successful authentication, wherein you can see e-Voting feature. Click on options available against company name ore-Voting service provider-NSDLand you will be redirected to e-Voting website of NSDL for casting your vote during the remote e-Voting period or joining virtual meeting & voting during the meeting.

Important note: Members who are unable to retrieve User ID/ Password are advised to use Forget User ID and Forget Password option available at abovementioned website.

Helpdesk for Individual Shareholders holding securities in demat mode for any technical issues related to login through Depository i.e. NSDL and CDSL.

Login type	Helpdesk details
Individual Shareholders holding securities in demat mode with NSDL	Members facing any technical issue in login can contact NSDL helpdesk by sending a request at evoting@nsdl.co.in or call at toll free no.: 1800 1020 990 and 1800 22 44 30
Individual Shareholders holding securities in demat mode with CDSL	Members facing any technical issue in login can contact CDSL helpdesk by sending a request at helpdesk.evoting@cdslindia.com or contact at 022- 23058738 or 022-23058542-43

• (B) Login Method for shareholders other than Individual shareholders holding securities in demat mode and shareholders holding securities in physical mode.

How to Log-in to NSDL e-Voting website?

1. Visit the e-Voting website of NSDL. Open web browser by typing the following URL: https://www.evoting.nsdl.com/ either on a Personal Computer or on a mobile.

2. Once the home page of e-Voting system is launched, click on the icon “Login” which is available under ‘Shareholder/ Members’ section.

3. A new screen will open. You will have to enter your User ID, your Password/OTP and a Verification Code as shown on the screen.

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69TH ANNUAL REPORT

NOTICE OF ANNUAL GENERAL MEETING

Alternatively, if you are registered for NSDL eservices i.e. IDEAS, you can log-in at https://eservices.nsdl.com/ with your existing IDEAS login. Once you log-in to NSDL eservices after using your log-in credentials, click on e-Voting and you can proceed to Step 2 i.e. Cast your vote electronically.

1. Your User ID details are given below :

Your User ID details are given below :
Manner of holding shares i.e. Demat (NSDL or CDSL) or Physical	Your User ID is:
(a) For Members who hold shares in demat account with NSDL.	8 Character DP ID followed by 8 Digit Client ID For example if your DP ID is IN300 and Client ID is 12 then your user ID is IN30012**.
(b) For Members who hold shares in demat account with CDSL.	16 Digit Beneficiary ID For example if your Beneficiary ID is 12** then your user ID is 12**
(c) For Members holding shares in Physical Form	EVEN Number followed by Folio Number registered with the company, For example if folio number is 001 and EVEN is 101456 then user ID is 101456001

1. Password details for shareholders other than Individual shareholders are given below:

2. (a) If you are already registered for e-Voting, then you can user your existing password to login and cast your vote.

3. (b) If you are using NSDL e-Voting system for the first time, you will need to retrieve the ‘initial password’ which was communicated to you. Once you retrieve your ‘initial password’, you need to enter the ‘initial password’ and the system will force you to change your password.

4. (c) How to retrieve your ‘initial password’?

   • (i) If your email ID is registered in your demat account or with the company, your ‘initial password’ is communicated to you on your email ID. Trace the email sent to you from NSDL from your mailbox. Open the email and open the attachment i.e. a .pdf file. Open the .pdf file. The password to open the .pdf file is your 8 digit client ID for NSDL account, last 8 digits of client ID for CDSL account or folio number for shares held in physical form. The .pdf file contains your ‘User ID’ and your ‘initial password’.

   • (ii) If your email ID is not registered, please follow steps mentioned below in process for those Members whose email ids are not registered.

5. If you are unable to retrieve or have not received the “Initial Password” or have forgotten your password:

6. (a) Click on “Forgot User Details/Password?”(If you are holding shares in your demat account with NSDL or CDSL) option available on www.evoting.nsdl.com.

7. (b) Physical User Reset Password?” (If you are holding shares in physical mode) option available on www.evoting.nsdl.com.

8. (c) If you are still unable to get the password by aforesaid two options, you can send a request at evoting@nsdl.co.in mentioning your demat account number/folio number, your PAN, your name and your registered address etc.

9. (d) Members can also use the OTP (One Time Password) based login for casting the votes on the e-Voting system of NSDL.

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CRAVATEX LIMITED

NOTICE OF ANNUAL GENERAL MEETING

1. After entering your password, tick on Agree to “Terms and Conditions” by selecting on the check box.

2. Now, you will have to click on “Login” button.

3. After you click on the “Login” button, Home page of e-Voting will open.

Step 2: Cast your vote electronically and join General Meeting on NSDL e-Voting system.

Details on Step 2 is given below:

How to cast your vote electronically and join General Meeting on NSDL e-Voting system?

1. After successful login at Step 1, you will be able to see all the companies “EVEN” in which you are holding shares and whose voting cycle and General Meeting is in active status.

2. Select “EVEN” of company for which you wish to cast your vote during the remote e-Voting period and casting your vote during the General Meeting. For joining virtual meeting, you need to click on “VC/OAVM” link placed under “Join General Meeting”.

3. Now you are ready for e-Voting as the Voting page opens.

4. Cast your vote by selecting appropriate options i.e. assent or dissent, verify/modify the number of shares for which you wish to cast your vote and click on “Submit” and also “Confirm” when prompted.

5. Upon confirmation, the message “Vote cast successfully” will be displayed.

6. You can also take the printout of the votes cast by you by clicking on the print option on the confirmation page.

7. Once you confirm your vote on the resolution, you will not be allowed to modify your vote.

23. General Guidelines for Members

1. Institutional Members (i.e. other than individuals, HUF, NRI etc.) are required to send scanned copy (PDF/JPG Format) of the relevant Board Resolution/ Authority letter etc. with attested specimen signature of the duly authorized signatory(ies) who are authorized to vote, to the Scrutinizer by e-mail to hemanshu@hkacs.com with a copy marked to evoting@nsdl.co.in.

2. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential. Login to the e-voting website will be disabled upon five unsuccessful attempts to key in the correct password. In such an event, you will need to go through the “Forgot User Details/Password?” or “Physical User Reset Password?” option available on www.evoting.nsdl.com to reset the password.

3. In case of any queries, you may refer the Frequently Asked Questions (FAQs) for Members and e-voting user manual for Members available at the download section of www.evoting.nsdl.com or call on toll free no.: 1800-1020-990 and 1800 22 44 30 or send a request to Ms. Pallavi Mhatre, Manager, NSDL,at evoting@nsdl.co.in.

4. Process for those Members whose email ids are not registered with the depositories for procuring user id and password and registration of e mail ids for e-voting for the resolutions set out in this notice :

5. In case shares are held in physical mode please provide Folio No., Name of shareholder, scanned copy of the share certificate (front and back), PAN (self attested scanned copy of PAN card), AADHAR (self attested scanned copy of Aadhar Card) by email to rnt.helpdesk@linkintime.co.in.

6. In case shares are held in demat mode, please provide DPID-CLID (16 digit DPID + CLID or 16 digit beneficiary ID), Name, client master or copy of Consolidated Account statement, PAN (self attested scanned copy of PAN card), AADHAR (self attested scanned copy of Aadhar Card) to rnt.helpdesk@linkintime.co.in. If you are an Individual shareholders holding securities in demat mode, you are requested to refer to the login method explained at step 1 (A) i.e. Login method for e-Voting and joining virtual meeting for Individual shareholders holding securities in demat mode.

7. Alternatively member may send an e-mail request to evoting@nsdl.co.in for obtaining User ID and Password by proving the details mentioned in Point (1) or (2) as the case may be.

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69TH ANNUAL REPORT

NOTICE OF ANNUAL GENERAL MEETING

1. In terms of SEBI circular dated December 9, 2020 on e-Voting facility provided by Listed Companies, Individual shareholders holding securities in demat mode are allowed to vote through their demat account maintained with Depositories and Depository Participants. Shareholders are required to update their mobile number and email ID correctly in their demat account in order to access e-Voting facility.

2. The Instructions for Members for E-Voting on the day of the AGM are as under :

3. The procedure for e-Voting on the day of the AGM is same as the instructions mentioned above for remote e-Voting.

4. Only those Members who will be present in the AGM through VC/OAVM facility and have not casted their vote on the Resolutions through remote e-Voting and are otherwise not barred from doing so, shall be eligible to vote through e-Voting system in the AGM.

5. Members who have voted through Remote e-Voting will be eligible to attend the AGM. However, they will not be eligible to vote at the AGM.

6. The details of the person who may be contacted for any grievances connected with the facility for e-Voting on the day of the AGM shall be the same person mentioned for Remote e-voting.

7. The Instructions for Members for Attending the AGM through VC/OAVM are as under:

8. Member will be provided with a facility to attend the AGM through VC/OAVM through the NSDL e-Voting system. Members may access by following the steps mentioned above for Access to NSDL e-Voting system. After successful login, you can see link of “VC/OAVM link” placed under “Join General meeting” menu against company name. You are requested to click on VC/OAVM link placed under Join General Meeting menu.. The link for VC/OAVM will be available in shareholder/members login where the EVEN of Company will be displayed.

Please note that the members who do not have the User ID and Password for e-Voting or have forgotten the User ID and Password may retrieve the same by following the remote e-Voting instructions mentioned in the notice to avoid last minute rush.

1. Members are encouraged to join the Meeting through Laptops for better experience.

2. Further Members will be required to allow Camera and use Internet with a good speed to avoid any disturbance during the meeting.

3. Please note that Participants Connecting from Mobile Devices or Tablets or through Laptop connecting via Mobile Hotspot may experience Audio/Video loss due to Fluctuation in their respective network. It is therefore recommended to use Stable Wi-Fi or LAN Connection to mitigate any kind of aforesaid glitches.

4. Members who would like to express their views/ask questions during the meeting may register themselves as a speaker may send their request mentioning their name, demat account number/folio number, email id, mobile number at investors@cravatex.com.

5. Those Members who have registered themselves as a speaker will only be allowed to express their views/ask questions during the meeting.

6. Mr. Hemanshu Kapadia (FCS: 3477 and CP: 2285), Proprietor of M/s. Hemanshu Kapadia & Associates, Practicing Company Secretaries, Mumbai has been appointed as the Scrutinizer for providing facility to the members of the Company to scrutinize the voting and remote e-voting process in a fair and transparent manner.

7. The Chairman shall, at the AGM, allow voting with the assistance of scrutinizer, through e-voting facility as provided by NSDL for all those members who are present at the AGM but have not casted their votes by availing the remote e-voting facility.

8. The Scrutinizer shall after the conclusion of voting at the general meeting, will first count the votes cast at the meeting and thereafter unblock the votes cast through remote e-voting and shall make, not later than 48 hours of the conclusion of the AGM, a consolidated scrutinizer’s report of the total votes cast in favour or against, if any, to the Chairman or a person authorized by him in writing, who shall countersign the same and declare the result of the voting forthwith.

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CRAVATEX LIMITED

NOTICE OF ANNUAL GENERAL MEETING

The Results declared alongwith the report of the Scrutinizer shall be placed on the website of the Company www.cravatex.com and on the website of NSDL immediately after the declaration of result by the Chairman or a person authorized by him in writing. The results shall also be immediately forwarded to the BSE Limited, Mumbai.

By Order of the Board of Directors For Cravatex Limited

Sudhanshu Namdeo Company Secretary

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 Email: investors@cravatex.com Website: www.cravatex.com

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69TH ANNUAL REPORT

NOTICE OF ANNUAL GENERAL MEETING

ANNEXURE TO NOTICE

Details of Directors seeking re-appointment pursuant to Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard on General Meetings (SS-2).

Particulars	Mr. Rohan Batra
DIN	02574195
Age	34 years
Qualifications	Graduated with a First Class Honors Degree from Cass Business School, City University, London in Management and Systems Science.
Nationality	Indian
Experience/Expertise	Mr. Rohan Batra is at present the Managing Director of Cravatex Brands Limited, a subsidiary of the Company and R.B. Fitness and Trading Pvt. Ltd., the holding Company. He has been actively involved in creating a centralised group support infrastructure and information technology backbone. He also is part of the planning for group strategy, financial planning and new business development.
Terms and Conditions of Appointment / Reappointment	To be re-appointed as a Director liable to retire by rotation.
Remuneration last drawn for the financial year 2020-21	Sitting Fees of Rs.1.60 lacs for Board Meeting
Remuneration proposed to be paid	Rs.40,000/- sitting fees for each Board Meeting or such as may be approved by the Board.
Date of first appointment on the Board	01/04/2020
Shareholding in the Company as on March 31, 2021	10 Equity Shares of Rs.10/- each
Relationship with other Directors/ Key Managerial Personnel	Son of Mr. Rajesh Batra, Chairman and Managing Director of the Company.
No. of Board Meetings attended during the Financial Year 2020-21.	4/4
Directorships of other Boards.	1. Cravatex Brands Limited 2. R.B. Fitness and Trading Pvt. Ltd.
Membership / Chairmanship of Committees of other Boards.	1. None

By Order of the Board of Directors For Cravatex Limited Sudhanshu Namdeo Company Secretary

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 Email: investors@cravatex.com Website: www.cravatex.com

12

CRAVATEX LIMITED

REPORT OF THE BOARD OF DIRECTORS

BOARD’S REPORT

To The Members of Cravatex Limited

Your Directors are pleased to present the 69th (Sixty Nineth) 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, 2021.

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

STATEMENT OF COMPANY AFFAIRS

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

The total revenue from operations of the Company for the year under review was Rs.230.76 lacs as against Rs.242.07 lacs in the previous year. The revenue mainly 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 as against Rs.420.23 lacs for the previous year, mainly due to dividend received from the overseas subsidiary.

PANDEMIC COVID-19

The COVID-19 disease which was declared as global pandemic in March 2020 continued during the year with severe adverse impact on people’s health and the overall economy as well. The lockdown across the country resulted in to restricted operations and logistics. The business operations were shut down during most part of the year. For ensuring safety of employees, work from home policy was implemented. All the government advisories/compliances and disciplines were followed meticulously. The management continued to work very hard for keeping the company and its subsidiaries ready and fit for operations as and when the normalcy returns post lifting of lockdown.

DIVIDEND

The Directors are pleased to recommend dividend of Rs.0.40 (4%) per share of Rs.10/- each on 75,75,000 4% Non-Convertible Cumulative Redeemable Preference Shares basis for the financial year ended 2020-21, subject to tax deduction at source. The total 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 tax deduction at source. The total outflow on this dividend account will be Rs.77,52,480/- lacs.

EQUITY SHARE CAPITAL

The total issued, subscribed and fully paid up equity share capital of the Company as on March 31, 2021 was Rs.2,58,41,600/ - divided into 25,84,160 equity shares of Rs. 10/- each (listed on BSE).

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69TH ANNUAL REPORT

REPORT OF THE BOARD OF DIRECTORS

PREFERENCE SHARES

As on March 31, 2021, the unlisted 4% Non-convertible Cumulative Redeemable Preference Shares (preference shares) issued by the Company on private placement basis was Rs. 7,57,50,000/- divided into 75,75,000 preference shares of Rs. 10/- each.

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, 2021 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. Divakar G. Kamath (DIN : 08730430) was appointed as the Executive Director and CFO with effect from April 1, 2020.

• Mr. Rohan Batra (DIN : 02574195) was appointed 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 himself for re-appointment.

Dr. S.D. Israni, Mr. N. Santhanam and Mrs. Pheroza Jimmy Bilimoria, 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 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.

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

During the year under Report, No Company have become or ceased to be any Subsidiaries, Joint Ventures or Associate Companies. However, the Company have the following Subsidiaries:

(I) CRAVATEX BRANDS LTD (CBL)

Cravatex Brands Limited is a material Subsidiary of the Company. CBL’s revenue is contributed by Sports Goods consisting of apparel, footwear, accessories etc. and Fitness Equipment business mainly consisting of Gym equipment. The consumer demand for sports goods was severely affected due to lock down. Retail outlets remained shut for most part of the year. Online revenue was badly hit by low demand and also restrictions on delivery of non-essential goods. Gym equipment business was adversely impacted by slump in real 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 of which 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 CBL was finally concluded with effect from FY 2020-21. The apparel business of PIL fared reasonably well in the lockdown situation during the year though on lower operations and margins compared to the previous year.

The post-merger operating income of CBL for FY 2020-21 was Rs.13,018 lacs vis a vis Rs.23,839 lacs in the previous year. PIL business contributed operating revenue of Rs.5,627 lacs during the year. Major source of revenue was from online sales which was also impacted due to muted demand and restrictions on movement and door delivery. CBL posted loss before finance cost, depreciation and tax of Rs.2,136 lacs as against the profit of Rs.372 lacs for the previous year. Despite strict control/reduction

14

CRAVATEX LIMITED

REPORT OF THE BOARD OF DIRECTORS

in costs across expenses heads, CBL posted a net loss before tax of Rs.4,975 lacs due to steep fall in revenues as against the net loss of Rs.2,144 lacs for previous year.

The management and the promoters are working hard taking every possible steps including the infusion of funds, to support CBL for survival in the current unprecedented difficult situation. With continuing of Covid-19 pandemic related setbacks and curbs across the country, the industry faces enormous challenges in the immediate future.

(II) BB (UK) Limited (BBUK)

BB(UK) Limited, incorporated in United Kingdom, is a 100% subsidiary of the Company. The principal activity of BBUK is designing, sourcing, manufacturing, e-commerce and wholesale of Branded goods especially “Fila” and “Sergio Tacchini” sportswear, casual wear and life style products such as footwear and accessories.

Severe disturbance was caused during the year due to the continuing Covid-19 pandemic with consequential impact on sales and supply chain. Order book was under severe pressure vis a vis the previous year. However, the margins in percentage terms 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.39,927.61 lacs vis a vis Rs.62,383.63 lacs in the previous year. Profit before tax was Rs.1,921.64 lacs vis a vis Rs.1,912.99 lacs in the previous year indicating an improvement in percentage terms over the previous year.

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

Implementation of Brexit in UK was expected to cause consequences for business entities in UK. Hence with a view to avoiding the potential outcome, our subsidiary BB(UK) has formed a 100% subsidiary in Eschweiler, Germany viz. “BB Europe GmbH” on 23rd December 2020, to deal with the consequences of Brexit and to be able to trade seamlessly with its European clients. The nature of business will be same as the holding company BB UK, and the business will be operational in the FY 2021-22.

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, 2021 will be kept open for inspection for the Members at the website of the Company at http://cravatex.com/investor-relations/subsidiary-information 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 continues to take 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.

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69TH ANNUAL REPORT

REPORT OF THE BOARD OF DIRECTORS

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

Due to the continued Covid-19 pandemic along with second wave, the company’s operations are expected to be further impacted vis-à-vis the previous year. Except this 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 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-2020-21.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 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 4 (four) Board Meetings during the Financial Year 2020 - 21. These were on June 29, 2020, August 14, 2020, November 12, 2020 and February 12, 2021.

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.

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CRAVATEX LIMITED

REPORT OF THE BOARD OF DIRECTORS

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-andRemuneration-Policy-New.pdf.

RELATED PARTY TRANSACTIONS

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 arm’s length during the financial year 2020-21. 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 2020-21 are provided in Note 37 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 Company’s Policy on Materiality of related party transactions and dealing with related party transactions is available on the Company’s website at http://cravatex.com/investor-relations/Policy-on-Materiality-of-Events-New.pdf.

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69TH ANNUAL REPORT

REPORT OF THE BOARD OF DIRECTORS

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

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

Consequent to the net profits for the financial year 2020-21 exceeding Rs.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 Company from financial year 2021-22.

SECRETARIAL AUDIT

In terms of Section 204 of the Companies Act, 2013, and the 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 2020-21. The secretarial audit report is included as Annexure III and forms a 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 Company, namely, Cravatex Brands Ltd. is included as Annexure IV and forms 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:

Sr. No.	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.

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 under Section 134(3)(f) of the Companies Act, 2013.

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

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 65th Annual General Meeting of the Company to hold office for a period of 5 years from the conclusion of the 65th Annual General Meeting until the conclusion of the 70th Annual General Meeting. The said Statutory Auditor shall hold office until the conclusion of the 70th Annual General Meeting.

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CRAVATEX LIMITED

REPORT OF THE BOARD OF DIRECTORS

PREVENTION OF SEXUAL HARASSMENT

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, the Company is not required 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 shareholders 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 29, 2020 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 29, 2020 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, 2,004 Equity Shares of the Company have been transferred to the Investor Education and Protection Fund (IEPF) during the financial year 2020-21 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.

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 : 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 Email: investors@cravatex.com Website: www.cravatex.com

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69TH ANNUAL REPORT

REPORT OF THE BOARD OF DIRECTORS

Annexure I

ANNEXURE TO THE DIRECTORS’ REPORT

Additional information as required under The Companies (Accounts) Rules, 2014.

A. CONSERVATION OF ENERGY

• (a) The steps taken on conservation of energy :

The consumption of electricity/energy is restricted to its office premises. The Company has been making optimum use of electrical energy by regular maintenance of office electrical installations. Regular monitoring is done for preventing wastage of energy.

• ( b) Impact on conservation of energy:

Not discernable

• (c) The steps taken by the company for utilising alternate sources of energy

None as the Company is not engaged in any manufacturing activities and the energy consumption is restricted for its office premise and it is insignificant.

(d) The capital investment on energy conservation equipments:

None presently.

B. TECHNOLOGY ABSORPTION

• (i) The efforts made towards technology absorption;

Not Applicable as the Company is not engaged in any Hitech or Manufacturing Activities.

• (ii) The benefits derived like product improvement, cost reduction, product development or import substitution; Not Applicable

• (iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year)-

• (a) the details of technology imported;

• (b) the year of import;

• (c) whether the technology been fully absorbed;

• (d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof; and

• Not Applicable

• (iv) The expenditure incurred on Research and Development.

None

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflows are as follows:

Earnings: Dividend Income from BB (UK) Limited (Subsidiary of the company) Expenditure:	2020-21 Rupees in Lacs 534.33 —	2019-20 Rupees in Lacs 266.93 —

20

CRAVATEX LIMITED

REPORT OF THE BOARD OF DIRECTORS

ANNEXURE II

DISCLOSURE PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT, 2013 AND RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

1. The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year;

Sr.	Name of the Director	Ratio of the remuneration
No.		of each director to the
		median remuneration
1.	Rajesh Batra	2.37
2.	Divakar G. Kamath	2.04

NOTE :

• a) Apart from Mr. Rajesh Batra, Managing Director and Mr. Divakar G. Kamath, Executive Director and CFO, no other Director was entitled for remuneration in financial year 2020-21 and other Directors were paid Sitting Fees for attending Board/Committee Meetings.

• The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any in the financial year :

Sr.	Name	Designation	%
No.
i.	Rajesh Batra	Managing Director	-25.37
ii.	Divakar Kamath	Executive Director and CFO	-11.67
iii.	Sudhanshu Namdeo	Company Secretary	-11.67

1. The percentage increase/(decrease) in the median remuneration of employees in the financial year : -5.83%

2. The number of permanent employees on the rolls of company as on 31/03/2021: 6

3. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration :

				%
				Change
Remuneration paid to	employees	excluding	managerial personnel	-2.46
Remuneration paid to	managerial	personnel		-17.12

1. It is hereby affirmed that the remuneration paid is within the Remuneration Policy of the Company for Directors, Key Managerial Persons and Employees.

2. (i) The name of employees who if employed throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was not less than one crore two lakh rupees : None

3. (ii) The name of employees who if employed for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than eight lakh and fifty thousand rupees per month ; None

4. The name of every employee of the company who if employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the managing director : None

5. The managing or executive director of the company does not receive any remuneration or commission from any holding or subsidiary of the company.

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69TH ANNUAL REPORT

REPORT OF THE BOARD OF DIRECTORS

ANNEXURE III

Form No. MR-3

SECRETARIAL AUDIT REPORT

For the Financial year ended 31st March 2021 [Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014]

To The Members Cravatex Limited

I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Cravatex Limited (hereinafter called “the company”) CIN: L93010MH1951PLC008546. Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on my verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit the explanations and clarifications given to us and the representations made by the Management, I hereby report that in my opinion, the Company has, during the audit period covering the financial year ended on 31st March, 2021 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliancemechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

I have examined the books, papers, minute books, forms and returns filed and other records maintained by Cravatex Limited for the financial year ended on 31st March, 2021, according to the provisions of:

• (i) The Companies Act, 2013 (the Act) and the rules made thereunder;

• (ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder; (iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

• (iii) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;

• (iv) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):

• (a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

• (b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015

• (c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (Not Applicable to the Company during the Audit period as the Company has not issued any new securities) ;

• (d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (Not Applicable to the Company during the Audit period as the Company has not issued any securities under Employee Stock Option Scheme) ;

• (e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (Not Applicable to the Company during the Audit period as the Company has not issued any Debt instruments/ Securities) ;

• (f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

• (g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (Not Applicable to the Company during the Audit period as delisting of securities did not take place) ; and

• (h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 (Not Applicable to the Company during the Audit period as the Company has not Bought back its securities) ;

• (i) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;

The Management has confirmed that the Company is engaged in trading activity only and therefore there is no sector specific law applicable to the Company.

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CRAVATEX LIMITED

REPORT OF THE BOARD OF DIRECTORS

We have also examined compliance with the applicable clauses of the following:

• (i) Secretarial Standards (SS-1 and SS-2) issued by The Institute of Company Secretaries of India.

During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above read with the Companies Act, 1956 (wherever applicable) except for 1 request for 80 shares each for transmission of shares, name change and name deletion which were dispatched by the RTA beyond the time limit specified. As explained to us the above delays were due to current COVID pandemic situation;

We further report that the Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

Majority decision is carried out unanimously and therefore the question of capturing the views of dissenting members does not arise.

We further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that during the audit period, there were no instances of:

• (i) Public/Rights/Bonus issue of shares/debentures/sweat equity.

• (ii) Buy-back of securities.

• (iii) Merger/amalgamation/reconstruction etc.

• (iv) Foreign technical collaborations.

For Hemanshu Kapadia & Associates Practising Company Secretaries

Hemanshu Kapadia Proprietor C.P. No. 2285 Membership No. 3477 UDIN: F003477C000574905

Place : Mumbai Dated : June 29, 2021

This report is to be read with our letter of even date which is annexed as Annexure A and forms an integral part of this report.

23

69TH ANNUAL REPORT

REPORT OF THE BOARD OF DIRECTORS

Annexure A

To The Members Cravatex Limited

• My report of even date is to be read along with the letter.

• Maintenance of secretarial record is the responsibility of the management of the company. My responsibility is to express an opinion on these secretarial records based on our audit.

• I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. I believe that the processes and practices, I followed provide a reasonable basis for our opinion.

• I have not verified the correctness and appropriateness of financial records and Books of Accounts of the company.

• Wherever required I have obtained the Management representation about the compliance of laws, rules and regulations and happenings of events etc.

• The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. My examination was limited to the verification of procedures on test basis.

• The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the company.

For Hemanshu Kapadia & Associates Practising Company Secretaries

Hemanshu Kapadia Proprietor C.P. No. 2285 Membership No. 3477 UDIN: F003477C000574905

Place : Mumbai Dated : June 29, 2021

24

CRAVATEX LIMITED

REPORT OF THE BOARD OF DIRECTORS

ANNEXURE IV

Form No. MR-3

SECRETARIAL AUDIT REPORT

For the Financial year ended 31st March 2021 [Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014]

To The Members Cravatex Brands Limited

I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Cravatex Brands Limited (CIN U51909MH2016PLC288788) (hereinafter called “the Company”). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on my verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit the explanations and clarifications given to us and the representations made by the Management, I hereby report that in my opinion, the Company has, during the audit period covering the financial year ended on 31st March, 2021 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

I have examined the books, papers, minute books, forms and returns filed and other records maintained by Cravatex Brands Limited for the financial year ended on 31st March 2021, according to the provisions of:

• (i) The Companies Act, 2013 (the Act) and the rules made thereunder;

• (ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder: (Not applicable to the Company as it is an Unlisted Public Limited Company)

• (iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder:

• (iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings:

• (Not Applicable to the Company during the Audit period as there were no Foreign Direct Investments, Overseas Direct Investments in the Company and no External Commercial Borrowings were made by the Company);

• (v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):

• (Not applicable to the Company as it is an Unlisted Public Limited Company)

• (a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

• (b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992;

• (c) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

• (d) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;

• (e) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999;

• (f) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;

• (g) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

• (h) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; and

• (i) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998;

• (j) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;

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69TH ANNUAL REPORT

REPORT OF THE BOARD OF DIRECTORS

• (vi) The Management has confirmed that the Company is engaged in trading activity only and therefore there is no sector specific law applicable to the Company.

We have also examined compliance with the applicable clauses ofthe following:

• (i) Secretarial Standards (SS-1 and SS-2) issued by The Institute of Company Secretaries of India;

During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, Articles of Association of the Company etc. mentioned above, subject to the following observations:

1. The Company was required to appoint 4 Independent Directors as required under clause 3.1 of the Articles of Association of the Company. However, the Company had appointed only 3 Independent Directors. The Company is yet to appoint one more Independent Director.

I further report that there were no changes in the composition of the Board of Directors that took place during the period under review.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and as confirmed by the management, a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. The decisions were carried through and there is mechanism to capture the dissenting members’ views and record them as part of the minutes in case such instance arise.

I further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

I further report that during the audit period, the Hon’ble National Company Law Tribunal vide its order dated 25th March, 2021, has sanctioned the Scheme of Amalgamation of Proline India Limited with the Company. Also there was issue of Compulsory Convertible Preference Shares ona Preferential Basis through Private Placement to Paragon Partners Growth Fund – I.

Further there were no instances of:

• (i) Public/Rights/Bonus issue of shares/sweat equity, etc.

• (ii) Redemption/buy-back of securities.

• (iii) Foreign technical collaborations.

For Hemanshu Kapadia & Associates Practising Company Secretaries

Hemanshu Kapadia Proprietor C.P. No. 2285 Membership No. 3477 UDIN: F003477C000718411

Place : Mumbai Dated : June 22, 2021

This report is to be read with our letter of even date which is annexed as Annexure A and forms an integral part of this report.

26

CRAVATEX LIMITED

REPORT OF THE BOARD OF DIRECTORS

Annexure A

To The Members Cravatex Brands Limited

• My report of even date is to be read along with the letter.

• Maintenance of secretarial record is the responsibility of the management of the company. My responsibility is to express an opinion on these secretarial records based on our audit.

• I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. I believe that the processes and practices, I followed provide a reasonable basis for our opinion.

• I have not verified the correctness and appropriateness of financial records and Books of Accounts of the company.

• Wherever required I have obtained the Management representation about the compliance of laws, rules and regulations and happenings of events etc.

• The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. My examination was limited to the verification of procedures on test basis.

• The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the company.

For Hemanshu Kapadia & Associates Practising Company Secretaries

Hemanshu Kapadia Proprietor C.P. No. 2285 Membership No. 3477 UDIN: F003477C000718411

Place : Mumbai Dated : June 22, 2021

27

69TH ANNUAL REPORT

REPORT OF THE BOARD OF DIRECTORS

Annexure V

Form AOC-I

[Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014]

Statement containing salient features of the financial statement of subsidiaries companies for the financial year ended March 31, 2021.

Part “A”: Subsidiaries

==> picture [485 x 316] intentionally omitted <==

----- Start of picture text -----

||||||
|---|---|---|---|---|
|Amount in Lacs|
|1.|Name of the subsidiary|Cravatex Brands Limited|BB (UK) Ltd.|BB Europe GmbH|
|(Step down|
|subsidiary|
|2.|Reporting period for the subsidiary concerned,|Same as Holding|Same as Holding|Same as Holding|
|if different from the holding company’s|
|reporting period.|
|3.|Reporting currency and Exchange rate as on|N.A.|(GBP) Rs.100.95|(EURO) Rs.86.10|
|the last date of the relevant Financial year|
|in the case of foreign subsidiaries|
|4.|Share Capital|5290.91|41.85|22.11|
|5.|Reserves & Surplus|(12,543.48)|6,399.91|(25.86)|
|6.|Total Assets|23,194.99|13,803.25|692.11|
|7.|Total Liabilities|30,234.04|7,361.49|717.97|
|8.|Investments|756.86|22.11|NIL|
|9.|Turnover|13,599.66|39,927.61|12.26|
|10.|Profit/(Loss) before Taxation|(4,975.03)|1,921.64|(26.08)|
|11.|Provision for Taxation|2.41|42.69|NIL|
|12.|Profit/(Loss) after Taxation|(4977.44)|1,878.95|(26.08)|
|13.|Proposed Dividend|NIL|534.33|NIL|
|14.|% of Shareholding|99.997%|100%|N.A.|
|Notes:|The following information shall be furnished at the end of the statement:|
|1.|Names of subsidiaries which are yet to commence operations.|NIL|
|2.|NIL|

----- End of picture text -----

1. Names of subsidiaries which have been liquidated or sold during the year.

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

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 Email: investors@cravatex.com Website: www.cravatex.com

Rajesh Batra

Chairman & Managing Director DIN: 00020764

Divakar Kamath Executive Director & CFO DIN: 08730430

N. Santhanam Independent Director DIN: 00027724

Sudhanshu Namdeo Company Secretary Membership No. A17132

28

CRAVATEX LIMITED

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

(a) Industry Structure and Development

Major area of operations of the company and its subsidiaries fall under discretionary consumer segment. During the year, overall the discretionary consumer segment was severely impacted due to Covid-19 pandemic induced lockdown implemented by the Government across the country. Although the company’s income from lease was not affected, revenue from trading was marginally impacted due to lockdown restricted activity.

The lockdown and restrictions severely affected consumer demand within this industry in particular. The Consumer Brands business in subsidiaries slowed down during the year. Closure of malls, retail stores and the restricted online sales during most part of the year severely impacted the subsidiaries. Activity in domestic subsidiary was affected the most. The overall muted demand situation in the previous year continued with much more severity during the year. Marginal recovery during Q3 was inadequate to offset the overall loss of revenue during the year. As a result the revenue and the profitability during the year declined compared to the previous year.

Overseas subsidiary BBUK delivered a reasonable performance despite the disturbance caused during the year due to the continuing pandemic and the consequential sales and supply chain impacts. Apparel business of Proline brand which was in the process of merger with the company fared reasonably well during the lockdown year with lower operations and margins on account of lockdown situation.

(b) Opportunity and Threats

With exit of marginal players in the apparel and footwear segment, stronger players are expected to gain and grab the market after the easing of lockdown. With the addition of the Proline brand to the stable of brands, the domestic subsidiary has the opportunity to operate across all price points in the consumer market. Survival during the pandemic phase and ability to meet the working capital requirement are crucial. Threat of Covid-19 pandemic has already become a reality. With slow down of economic activity and delayed vaccination across the country, revival of the business activity is uncertain in the immediate future.

(c) Performance and outlook:

The Annual report covers the company’s performance for the year. Although the long term outlook is expected to be positive, the short term outlook is challenging and uncertain unless the pandemic is contained soon.

(d) Risks and concerns

The company has adequate process for mitigation of various known risks. However, the prevailing Covid-19 pandemic situation continues to be the risk which has led to the business uncertainty.

(e) Internal control system and their adequacy

The company has adequate and appropriate procedures, internal controls and monitoring system for safety and security of its business and assets. Adhering to the structured SOPs is accorded high importance. The Internal Audit is carried out by external firm of Chartered Accountants who evaluates the functioning and quality of internal controls. Improvement advises if any are implemented from time to time.

(f) Discussion on financial performance with respect to operational performance

The company’s income from lease rentals was broadly unchanged vis-a-vis the previous year. However, the trading income was marginally impacted due to the lock down situation. Since the lockdown situation prevailed during most part of the year, real time operations were affected although the employees were following work from home. Detailed financials of the company are reported in the annual report and the financial performance of subsidiaries is discussed elsewhere in the report.

(g) Material developments in Human Resources/Industrial Relations front, including number of people employed

There is no material development impacting the company in Human Resources/Industrial Relations front. The overall industrial relations had been satisfactory. The company has 6 of employees on its rolls as at 31st March 2021.

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69TH ANNUAL REPORT

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios and change in return on net worth along with detailed explanations therefor is as follows :

Ratio Analysis 1 Debtors Turnover Ratio (times) 2 Inventory T/O Ratio (Day’s COGS)* 3 Interest Coverage Ratio 4 Debt to Equity Ratio 5 Operating Profit Margin 6 Net Profit Margin 7 Return on net Worth	2020-21 15.10 2.07 836.99 — 4.78% 46.76% 14.95%	2019-20 3.85 2.00 28.04 0.003 4.53% 24.35% 7.02%

• inventory turnover for previous financial year 2019-20 has been restated.

Reasons for change in ratios as on 31st March, 2021 vis a vis the previous year are as follows :

1. Debtors turnover ratio has improved as on 31st March, 2021 due to lower outstanding debtors mainly due to subdued activity in the second half of the year.

2. The Company is debt free and hence the debt to equity ratio for 2020-21 is nil.

3. The net profit margin and return on new worth have improved on account of higher dividend income received from overseas subsidiary.

30

CRAVATEX LIMITED

REPORT ON CORPORATE GOVERNANCE

REPORT ON CORPORATE GOVERNANCE

The Board has taken necessary steps to ensure that all regulatory and mandatory provisions of Corporate Governance have been complied with. The Board furnishes the following relevant information for the benefit of the Members.

1. Company’s Philosophy on Code of Governance

Your Company believes in fair, transparent and ethical governance practices. The Company strives to achieve excellence in all aspects of the business, help the people succeed by providing them support and feedback and build teams that collaborate and contribute to their success. Every employee of the Company is not just an employee but an important resource and part of the family. The company’s philosophy on corporate governance ensures accountability, ethical corporate behavior and fairness to all stakeholders which include regulators, customers, vendors investors and employees.

2. Board of Directors

Composition/Category of Directors, Attendance, No. of Board/Committees No. of Shares as on March 31, 2021

			Board	Meetings	Last	No. of	Member of	No. of
Directors	Designation		————————————		AGM	Other	Committees/	Equity
			Held	Attended	Attended	Directorships1	(Chairman)2	Shares
Executive Directors:
Mr. Rajesh Batra	Managing		4	4	Yes	5	4	703
(Chairman)	Director					(chairman of 2)	(chairman of 1)
Mr. Divakar G.	Executive		4	4	Yes	0	0	100
Kamath	Director & CFO
Non Executive Directors:
Dr. S. D. Israni	Independent		4	4	Yes	3	4	0
	Director						(chairman of 1)
Mr. N. Santhanam	Independent		4	4	Yes	1	1	0
	Director						(chairman of 1)
Mrs. Pheroza	Independent		4	4	Yes	0	2	0
Jimmy Bilimoria	Director
Mr. Rohan Batra	Director		4	4	Yes	2	0	10

1 excludes alternate directorship, directorship in section 8 companies, foreign companies and private companies which are neither a subsidiary nor a holding company of a public company.

2 includes audit committee & stakeholders relationship committees of public companies.

3 includes 20 equity shares each held on behalf of partnership firm and trust.

None of the Directors are related to any other Director on the Board, except Mr. Rajesh Batra and Mr. Rohan Batra, who are related to each other as Father and Son.

31

69TH ANNUAL REPORT

REPORT ON CORPORATE GOVERNANCE

The name of the other listed entities in which the Director is also a Director and the category of Directorship as on March 31, 2021 are as follows :

Name of the Director	Name of the Other Listed Entity	Category of
		Directorship
Mr. Rajesh Batra	National Peroxide Limited	Independent Director
	Bombay Burmah Trading Corporation Limited	Independent Director
Dr. S.D. Israni	Modern India Limited	Independent Director
	Advani Hotels and Resorts (India) Limited	Independent Director
Mr. N. Santhanam	N.A.	N.A.
Mrs. Pheroza Jimmy Bilimoria	N.A.	N.A.
Mr. Divakar G. Kamath	N.A.	N.A.
Mr. Rohan Batra	N.A.	N.A.

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 12, 2021.

The details of familiarization programmes imparted to the Independent Directors are available at the weblink http://cravatex.com/ investor-relations/familiarisation-programmes.

The matrix of core skills/expertise/competencies identified by the Board of directors as required in the context of its business and sector for it to function effectively and those actually available with the Board are

Skills	Rajesh Batra	S.D. Israni	N. Santhanam	Pheroza Jimmy Billimoria	Divakar G. Kamath	Rohan Batra
Industry Knowledge	�			�		�
Finance & Accounts	�		�		�	�
Risk Management	�	�	�		�
International Business	�		�	�		�
Marketing/Sales	�			�		�
Legal/Regulatory		�	�		�
Business Operations	�			�		�
Corporate Leadership	�	�	�	�	�	�

In the opinion of the Board all the independent directors meet the criteria of independence as prescribed under sub-section (6) of Section 149 of the Act and Regulation 16(1)(b) of the Listing Regulations and are independent of the management of the Company.

None of the Independent Directors have resigned before the expiry of their tenure during the financial year ended March 31, 2021.

There are no convertible instruments issued by the Company and hence none of the Directors hold any convertible instruments.

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3. Audit Committee

The committee is formed in terms of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

(a) Terms of Reference

The role and terms of reference of the Audit Committee include oversight of financial reporting process, review of Internal Audit Reports and the Statutory Auditors’ Report on the financial statements, general interaction with the Internal Auditors and Statutory Auditors, selection and establishment of accounting policies, review of financial statements, both quarterly and annual, before submission to the Board, review of management discussion and analysis of financial condition and results of operations and review of performance of statutory and internal auditors and adequacy of internal control systems, approve policies in relation to the implementation of Insider Trading Code and supervise its implementation and other matters specified under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015.

(b) Composition

The Audit Committee consists of the following Non-executive Directors during the financial year 2020-21:

• (1) Mr. N. Santhanam (Chairman), Independent Director

• (2) Dr. S.D. Israni, Independent Director

• (3) Mrs. Pheroza Jimmy Bilimoria, Independent Director and

• Mr. Sudhanshu Namdeo, Company Secretary acts as the Secretary to the Committee.

(c) Number of Meetings, Attendance

The Company held 4 (four) Audit Committee Meetings during the Financial Year 2020 - 21. These were on June 29, 2020, August 14, 2020, November 12, 2020 and February 12, 2021. The details of attendance of the Audit Committee Members during the financial year 2020 - 21 are given below :

Name	No. of Meetings Held	No. of Meetings Attended
Mr. N. Santhanam	4	4
Dr. S. D. Israni	4	4
Mrs. Pheroza Jimmy Bilimoria	4	4

4. Nomination and Remuneration Committee

The committee is constituted in terms of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

(a) Terms of Reference

Broad terms of reference of the Committee include recommendation to the Board the set up and composition of the Board and its committees, identification of persons who are qualified to become directors and who may be appointed in KMP/ senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal and carry out evaluation of every director’s performance and recommend to the Board the remuneration Policy for Directors, KMP/senior management personnel and other employees.

(b) Composition

The Nomination and Remuneration Committee consists of the following Non-executive Directors during the financial year 2020 - 21:

• (1) Dr. S.D. Israni (Chairman), Independent Director

• (2) Mr. N. Santhanam, Independent Director and

• (3) Mrs. Pheroza Jimmy Bilimoria, Independent Director

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(c) Number of Meetings and Attendance

The Company held 2 (two) Nomination and Remuneration Committee Meeting on June 29, 2020 and February 11, 2021. The details of attendance of the Nomination & Remuneration Committee Members during the financial year 2020 - 21 are given below :

Name	No. of Meetings Held	No. of Meetings Attended
Dr. S. D. Israni	2	2
Mr. N. Santhanam	2	2
Mrs. Pheroza Jimmy Bilimoria	2	2

(d) Performance Evaluation

The performance evaluation criteria for independent directors is determined by the Nomination and Remuneration Committee. The Board monitors and reviews the Board evaluation framework.

Pursuant to the provisions of the Companies Act, 2013 and Regulation 4(2) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, the Board is required to carry out the evaluation of its annual performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration and CSR Committees and other committees. The Board has adopted a formal mechanism for evaluating its performance as well as that of its Committees and individual Directors, including Chairman of the Board. Accordingly the exercise was carried out through a structured evaluation process covering various aspects of the Boards functioning such as composition of the Board & committees, experience & competencies, performance of specific duties & obligations, governance issues etc.

The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. A separate exercise was carried out to evaluate the performance of individual Directors including the Board Chairman who were evaluated on parameters such as attendance, contribution at the meetings and otherwise, independent judgment, safeguarding of minority shareholders interest etc. The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company.

The Board also carried out the performance evaluation of the Independent Directors. The Directors expressed their satisfaction with the evaluation process.

5. Stakeholders Relationship Committee

The committee is constituted in terms of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

(a) Terms of Reference

Broad terms of reference of the Stakeholders Relationship Committee are to approve and issue/register the transfers and/or transmission of equity shares of the Company, redressal of grievances/complaints of security holders. The Stakeholders Relationship Committee is headed by Dr. S.D. Israni, Independent Non-executive Director of the Company.

(b) Composition

The Stakeholders Relationship Committee consists of the following Directors for the financial year 2020-21:

• (1) Dr. S.D. Israni - Independent Non-executive Director (Chairman)

• (2) Mrs. Pheroza Jimmy Bilimoria - Independent Non-executive Director and

• (3) Mr. Rajesh Batra - Managing Director

(c) Compliance Officer

• Mr. Sudhanshu Namdeo, Company Secretary is designated as the Compliance Officer.

(d) No. of Shareholders Complaints Received, Not Resolved and Pending

There were no investor complaints received during the financial year 2020 - 21. There were no unresolved complaints and no complaints were pending at the end of the Financial Year ended March 31, 3021.

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6. Risk Management Committee

The provisions of Regulation 21 of SEBI (LODR) Regulations, determined on the basis of market capitalisation as at the end of the immediate previous financial year, for constitution of Risk Management Committee are not applicable to the Company.

Remuneration of Directors

The Non-executive Directors are paid remuneration by way of sitting fees. The details of sitting fees paid to the Non-executive Directors during the financial year 2020 - 21 are given below :

Name	Sitting Fees
	(Rs.)
Dr. S. D. Israni	1,60,000/-
Mr. N. Santhanam	1,60,000/-
Mrs. Pheroza Jimmy Bilimoria	1,60,000/-
Mr. Rohan Batra	1,60,000/-

The details of sitting fees paid to the Audit Committee Members during the financial year 2020 - 21 are given below :

Name	Sitting Fees
	(Rs.)
Mr. N. Santhanam	80,000/-
Dr. S. D. Israni	80,000/-
Mrs. Pheroza Jimmy Bilimoria	80,000/-

The details of sitting fees paid to the Nomination & Remuneration Committee Members during the financial year 2020 - 21 are given below :

Name	Sitting Fees
	(Rs.)
Dr. S. D. Israni	40,000/-
Mr. N. Santhanam	40,000/-
Mrs. Pheroza Jimmy Bilimoria	40,000/-

The details of sitting fees paid to the Stakeholders Relationship Committee Members during the financial year 2020 - 21 are given below :

Name	Sitting Fees
	(Rs.)
Dr. S. D. Israni	20,000/-
Mrs. Pheroza Jimmy Bilimoria	20,000/-

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The appointment of Mr. Rajesh Batra, Managing Director and Mr. Divakar G. Kamath, Executive Director and CFO is governed by the recommendation of the Nomination and Remuneration Committee, Resolutions passed by the Board of Directors and Members of the Company, which covers the terms of such appointment and remuneration payable. The details of remuneration paid to Mr. Rajesh Batra, Managing Director and Mr. Divakar G. Kamath, Executive Director and CFO during the financial year 2020 - 21 are given below:

(Amount in Rs.)

Name	Basic	HRA	Conveyance	Special	Medical	LTA	Bonus	Total
				Allowance
Mr. Rajesh Batra	21,65,200	1,52,500	8,000	42,159	6,250	55,000	33,600	24,62,709
Mr. Divakar G. Kamath	17,25,100	97,350	—	29,967	—	27,085	33,600	19,13,102

Presently, the Company does not have a scheme for grant of stock options either to the Directors or to the employees.

The criteria for payment to non-executive Directors is in line with practices followed by similar sized Companies keeping in view the role, responsibilities and contribution of the non-executive Directors. Apart from receiving sitting fees, none of the non-executive Directors or their relatives have any pecuniary relationship or transactions with the Company.

Details of Service Contracts, Notice Period, etc. of all the Directors for the financial year ended March 31, 2021:

Directors	Contract Period (Tenure)	Service Contract	Notice Period & Severance Fees
Managing Director	3 years w.e.f June 1, 2019 to May 31, 2022	Yes	Six months’ notice or six months’ salary, in lieu thereof
Executive Director and CFO	3 years w.e.f April 1, 2020 to March 31, 2023	Yes	Three months’ notice
Non-Executive, Non-Independent Director	None. The Non-Executive Directors, liable to retire by rotation, get re-appointed as per the provisions of Articles of Association of the Company and the Companies Act, 2013.	No	None
Non–Executive, Independent Director	None. The Non-Executive Independent Directors are appointed for a fixed term of 5 years.	No	None

Independent Directors’ Meeting:

As a part of healthy Corporate Governance, as mandated under Schedule IV of the Companies Act 2013 and the Rules thereunder the independent directors met on February 11, 2021 without the presence of Managing Director, Non- Independent Directors and Management Team. The meeting was attended by all Independent Directors and was convened to enable independent directors to discuss matters pertaining to the Company’s affairs and put forth their combined views to the Board of Directors of the Company. At the meeting, they

(i) reviewed the performance of non-independent directors and the Board as a whole;

• (ii) reviewed the performance of the Chairperson of the Company, taking into account the views of other directors;

(iii) assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board and its committees that is necessary for the Board to effectively and reasonably perform their duties

The independent directors present in the meeting held an unanimous opinion that the Non-Independent Directors, including the Managing Director bring to the Board, abundant knowledge in their respective fields and are experts in their areas. Besides, they are insightful, convincing, astute, with a keen sense of observation, mature and have a deep knowledge of the Company. The Board as a whole is an integrated, balanced and cohesive unit where diverse views are expressed and dialogued when required, with each Director bringing professional domain knowledge to the table. All Directors are participative, interactive and communicative. The Chairperson has abundant knowledge, experience, skills and understanding of the Board’s functioning, possesses a mind for detail, is meticulous to the core and conducts the Meetings with poise and maturity.

The information flow between the Company’s Management and the Board is complete, timely with good quality and sufficient quantity.

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7. General Body Meetings

• (a) Location and time where last three AGMs were held:

	I		II		III
	(AGM)	(AGM)		(AGM)
Date	13/08/2020	14/08/2019		17/09/2018
Venue	N.A.	Textiles Committee		Textiles Committee
	Through Video Conference /	P. Balu Road, Prabhadevi Chowk		P. Balu Road, Prabhadevi Chowk
	Other Audio Visual Mode	Prabhadevi		Prabhadevi
	of NSDL	Mumbai–400	025	Mumbai–400	025
Time	3.30 p.m.	10.30 a.m.		10.30 a.m.

• (b) Whether any Special Resolutions were passed in the previous three AGMs?

Yes

• (c) Whether any Special Resolutions were passed last year through postal ballot - details of voting pattern.

No

• (d) Person who conducted the postal ballot exercise ? N.A.

• (e) Whether any Special Resolution is proposed to be conducted through postal ballot this year ?

No

• (f) Procedure for Postal Ballot:

The procedure for conducting the postal ballot exercise followed by the Company is as per the Companies (Management and Administration) Rules, 2014 read with Section 110 of the Companies Act, 2013 and as mentioned in the Secretarial Standard 2 issued by Institute of Company Secretaries of India.

8. Means of Communication

• (a) Quarterly, half yearly and annual financial results are announced as stipulated under Regulation 33 of SEBI (LODR) Regulation 2015.:

• (b) Newspapers wherein results published:

Business Standard (in English) and Sakal (in Marathi)

• (c) Any website, where displayed:

www.cravatex.com

• (d) Whether website also displays official news releases: No

• (e) Whether presentations made to institutional investors or to the analysts : No

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9. General Shareholder Information

• (a) Annual General Meeting will be held on Friday, August 27, 2021 at 3.30 p.m. through VC/OAVM of NSDL.

• (b) Financial Year Annual General Meeting 2020-21

Results for quarter ending June 30, 2021 Results for quarter ending September 30, 2021 Results for quarter ending December 31, 2021 Results for the year ending March 31, 2022

• (c) Dividend Payment Date

• (d) Listing on Stock Exchange

• (e) Stock Code SYMBOL

• Demat ISIN

• (f) Market Price Data (Financial Year 2020 – 21)

• : April 1 to March 31 : Friday, August 27, 2021 : Second week of August, 2021 : Second week of November, 2021 : Second week of February, 2022 : On or Before May 30, 2022 : On or before September 25, 2021 : Company’s shares are listed on BSE Ltd. located at Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001.

The Company has paid the listing fees for financial year 2020-21 to BSE on 15/04/2020. : 509472 : CRAVATEX : INE145E01017 : High: Rs.360.00 (23/06/2020) Low: Rs.230.00 (30/07/2020)

High, Low and Number of Shares Traded during each month in the financial year 2020-21 on BSE Limited :

Month	High	Low	No. of	No. of	Total Turnover
	(Rs.)	(Rs.)	Shares	Trades	(Rs.)
Apr-20	322.00	280.00	1,182	61	3,44,926
May-20	294.20	243.20	469	35	1,22,456
Jun-20	360.00	240.00	4,944	170	14,52,707
Jul-20	295.90	230.00	7,705	267	20,16,704
Aug-20	358.20	235.00	9,053	246	27,44,929
Sep-20	335.00	264.60	4,203	93	12,88,225
Oct-20	304.00	266.00	5,717	84	16,06,957
Nov-20	304.00	250.75	3,842	151	10,31,321
Dec-20	307.90	254.20	9,386	372	26,09,955
Jan-21	305.80	246.20	7,595	387	20,45,835
Feb-21	314.55	246.00	3,423	298	9,39,202
Mar-21	310.00	253.00	9,831	415	28,53,098

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• (g) Stock Performance in Comparison to BSE Sensex :

==> picture [369 x 228] intentionally omitted <==

• (h) None of the Securities of the Company have been suspended from trading by BSE.

• (i) Registrars & Share Transfer Agents: Link Intime India Private Limited C 101, 247 Park, LBS Marg, Vikhroli (West), Mumbai - 400 083 Tel No. : +91 22 49186000 Fax No.: +91 22 49186060 Email Id : rnt.helpdesk@linkintime.co.in Website : https://linkintime.co.in/

• (j) Share Transfer System:

• 96.03% of the equity shares of the Company are in electronic form. Transfer of these shares are done through the depositories with no involvement of the Company. The share transfers received in physical form are processed and share certificates are returned within a period of 15 days from the date of receipt, subject to the transfer instruments being valid and complete in all respects.

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(k)	Distribution of Shareholding as on March 31, 2021 :	Distribution of Shareholding as on March 31, 2021 :
	No. of Equity	No. of	% of	No. of	% of
	Shares held	Shareholders	Shareholders	Shares Held	Shareholding
	Upto 100	1,408	75.50	62,484	2.42
	101 to 200	182	9.76	29,042	1.12
	201 to 500	147	7.88	46,979	1.82
	501 to 1000	63	3.38	48,904	1.89
	1001 to 5000	49	2.63	97,836	3.78
	5001 to 10000	4	0.21	27,300	1.06
	10001 to 100000	11	0.59	3,50,045	13.55
	10001 and above	1	0.05	19,21,570	74.36
	Total	1,865	100.00	25,84,160	100.00

Shareholding Pattern as on March 31, 2021

Equity Share Capital (Listed on BSE)

		Year 2020-21
Category	No. of	% To Equity
	Shares	Paid-up Capital
Promoters	19,38,120		75.00
Bodies Corporate	17,618		0.68
Public	5,62,120		21.75
NRI	7,176		0.28
HUF	17,601		0.68
IEPF	41,456		1.60
ClearingMember	69		0.01
Total Equity Capital	25,84,160		100.00

4% Non-Convertible Cumulative Redeemable Preference Shares (Unlisted)

		Year 2020-21
Category	No. of	% To	Preference
	Shares	Paid-up Capital
Promoters	75,75,000		100.00
Total Preference Capital	75,75,000		100.00

• (l) Dematerialisation of equity shares and liquidity

The Equity Shares of the Company are available for dematerialisation (holding of shares in electronic form) on both the depositories viz. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

Of the Company’s total shareholding, (96.03%) equity shares were held in dematerialised mode by the Members of the Company of which 23,25,415 (89.99%) equity shares were under National Securities Depository Limited (NSDL) and balance 1,56,079 (6.04%) equity shares under Central Depository Services (I) Limited (CDSL) as on March 31, 2021.

• (m) Outstanding global depository receipts or American depository receipts or warrants or any other convertible instruments, conversion date and likely impact on equity : None

• (n) Commodity price risk or foreign exchange risk and hedging activities : None

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REPORT ON CORPORATE GOVERNANCE

• (o) Plant Location

None

• (p) Address for Correspondence

Registered Office: (w.e.f. October 1, 2020) Ground Floor (East Wing) Forbes Building, Charanjit Rai Marg Fort, Mumbai - 400 001 Tel. No.: 022-6666 7474 E-mail : investors@cravatex.com

(Upto September 30, 2020) Unit No.201, 2nd Floor Matulya Centre, Senapati Bapat Marg Lower Parel (West) Mumbai - 400 013

• (q) Credit ratings obtained by the entity along with any revisions thereto during the relevant financial year, for all debt instruments of such entity or any fixed deposit programme or any scheme or proposal of the listed entity involving mobilization of funds, whether in India or abroad : None

10. Other Disclosures:

• (a) There are no material related party transactions during the year under review that has conflict with the interests of the Company. The transactions entered into with related parties during the financial year were in ordinary course of business and at arm’s length basis and were approved by the Audit Committee.

• (b) Details of non-compliance by the Company, penalties, strictures imposed on the Company by Stock Exchange or SEBI or any statutory authority, on any matter related to capital markets, during the last three years : None

• (c) The Company has adopted the Whistle Blower Policy and Vigil Mechanism in terms of Regulation 22 of SEBI Listing Regulation. The Company does not deny access to any personnel to approach the audit committee on any issue. The policy has been uploaded on the Company’s website.

• (d) The Company has complied with all the mandatory requirements under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has not adopted any of the non-mandatory requirements.

• (e) The policy on dealing with material subsidiaries is available on the website of the Company under section Policies and Procedures at http://cravatex.com/investor-relations/Policy-on-Material-Subsidiaries-New.pdf.

• (f) The policy on dealing with related party transactions is available on the website of the Company under section Policies and Procedures at http://cravatex.com/investor-relations/RPT-Policy-New.pdf.

• (g) Commodity price risks and commodity hedging activities : None

• (h) Details of utilization of funds raised through preferential allotment or qualified institutional placement as specified under regulation 32(7A) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 : Not Applicable.

• (i) A certificate has been obtained from a company secretary in practice that none of the directors on the Board of the company have been debarred or disqualified from being appointed or continuing as directors of companies by the Board/ Ministry of Corporate Affairs or any such statutory authority.

• (j) The Board had not accepted any recommendation of any committee of the Board which is mandatorily required, in the relevant financial year : None

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• (k) Total fees for all services paid by the listed entity and its subsidiaries, on a consolidated basis, to the statutory auditor and all entities in the network firm/network entity of which the statutory auditor is a part is as follows :

Sr.	Name of the Company	Relationship	Name of the	Amount Paid
No.			Statutory Auditor
1.	Cravatex Limited	N.A.	GPS & Associates	Rs.6.00 lacs
2.	Cravatex Brands Limited	Subsidiary	B S R & Co. LLP	Rs.33.00 lacs
3.	BB (UK) Limited	Foreign Subsidiary	SRV Delson	GBP 27,250
4.	BB GMBH	Foreign Subsidiary	Arne Grobmann	Euro 1,260
		of BB (UK) Limited

11. Disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

• (a) number of complaints filed during the financial year : Nil

• (b) number of complaints disposed of during the financial year : Nil

• (c) number of complaints pending as on end of the financial year : Nil

12. Non-compliance of any requirement of corporate governance report of Schedule V, Para C, sub-paras (2) to (10)of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 : None

13. Extent to which discretionary requirements as specified in Part E of Schedule II have been adopted : None

14. The company has complied with corporate governance requirements specified in regulation 17 to 27 and clause b to I of sub-regulation (2) of regulation 46 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

15. The Managing Director and Chief Financial Officer have certified to the Board in accordance with Regulation 17(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

16. Demat Suspense Account / Unclaimed Suspense Account : None

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 Email: investors@cravatex.com Website: www.cravatex.com

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DECLARATION FOR COMPLIANCE WITH CODE OF CONDUCT

This is to confirm that as provided under Regulation 26(3) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, all Board of Directors and Senior Management of the Company have affirmed Compliance with the Code of Conduct for the Financial Year ended March 31, 2021.

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 Email: investors@cravatex.com Website: www.cravatex.com

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REPORT ON CORPORATE GOVERNANCE

CERTIFICATE ON CORPORATE GOVERNANCE TO THE MEMBERS OF CRAVATEX LIMITED

I have examined the compliance of the conditions of Corporate Governance by Cravatex Limited (‘the Company’) for the financial year ended on 31st March, 2021, as stipulated under Regulation 17 to Regulation 27, clauses (b) to (i) of sub-regulation (2) of Regulation 46 and Para C, D and E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") as amended from time to time.

The compliance of the conditions of Corporate Governance is the responsibility of the management. My examination was limited to a review of procedures and implementation thereof, as adopted by the Company for ensuring compliance to the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In my opinion and to the best of my information and according to the explanations given to me and the representations made by the Directors and the management, I certify that the Company has complied with the conditions of Corporate Governance as stipulated under Regulation 17 to Regulation 27, clauses (b) to (i) of sub-regulation (2) of Regulation 46 and Para C, D and E of Schedule V of the SEBI Listing Regulations.

I further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For Hemanshu Kapadia & Associates Practising Company Secretaries

Hemanshu Kapadia Proprietor C.P. No. 2285 Membership No.: F3477 UDIN: F003477C000574916

Place : Mumbai Dated : June 29, 2021

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CRAVATEX LIMITED

AUDITORS’ REPORT

INDEPENDENT AUDITOR’S REPORT

To the Members of Cravatex Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Cravatex Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2021, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “the standalone financial statements”).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2021, the profit and total comprehensive income/expense, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the independence requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Sr.	Key Audit Matter	Auditor’s Response
No.
1	Accuracy of writing-off of Fixed asset	Principal Audit Procedures
	As at March 31, 2021, some of the fixed assets	We have evaluated the written off fixed assets on the
	were written off.	basis of Managements evaluation of its usefulness and
		formed an opinion on accuracy of entries passed in the books
		of accounts.

Information Other than the Standalone Financial Statements and Auditor’s Report Thereon

The Company’s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Board’s Report including Annexures to Board’s Report, Business Responsibility Report, Corporate Governance and Shareholder’s Information, but does not include the standalone financial statements and our auditor’s report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

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69TH ANNUAL REPORT

AUDITORS’ REPORT

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

46

CRAVATEX LIMITED

AUDITORS’ REPORT

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act, based on our audit we report that:

2. a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

3. b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

4. c. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the relevant books of account.

5. d. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

6. e. On the basis of the written representations received from the directors as on March 31, 2021 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2021 from being appointed as a director in terms of Section 164 (2) of the Act.

7. f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.

8. g. With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of section 197(16) of the Act, as amended:

   • In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

9. h. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:

   • (i) The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements.

   • (ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts.

   • (iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

10. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.

For GPS & Associates Chartered Accountants Firm Registration No. 121344W

H. Y. Gurjar Partner Membership No. 032485 “UDIN: 21032485AAAABV1989”

Place : Mumbai Dated : June 29, 2021

47

69TH ANNUAL REPORT

AUDITORS’ REPORT

Annexure “A” to the Independent Auditor’s Report

(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report to the Members of CRAVATEX LIMITED of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of CRAVATEX LIMITED (“the Company”) as of March 31, 2021 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained, is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Standalone Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Standalone Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the Standalone Ind AS financial statements.

Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

48

CRAVATEX LIMITED

AUDITORS’ REPORT

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2021, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For GPS & Associates Chartered Accountants Firm Registration No. 121344W

H. Y. Gurjar Partner Membership No. 032485 “UDIN: 21032485AAAABV1989”

Place : Mumbai Dated : June 29, 2021

49

69TH ANNUAL REPORT

AUDITORS’ REPORT

Annexure “B” to the Independent Auditor’s Report

(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements’ section of our report to the Members of Cravatex Limited of even date)

• (i) In respect of Company’s Fixed Assets:

• (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

• (b) According to the information and explanations given to us, the assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets.

• (c) According to the information and explanations given to us, the title deeds of immovable properties are held in the name of the company.

• (ii) As explained to us, the inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable and the discrepancies noticed on verification between the physical stock and the inventory records have been appropriately accounted for in the books of account of the company.

• (iii) The Company has not granted any loans secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013.

• (iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Act in respect of grant of loans, making investments and providing guarantees and securities, as applicable.

• (v) The Company has not accepted any deposits from the public and therefore the provisions of the Clause 3(v) of the Order are not applicable to the Company.

• (vi) The maintenance of cost records has not been specified by the Central Government under section 148(1) of the Companies Act, 2013 for the business activities carried out by the Company. Thus, reporting under clause 3(vi) of the order is not applicable to the Company.

• (vii) According to the information and explanations given to us, in respect of statutory dues:

• (a) the Company has generally been regular in depositing undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, Goods and Service Tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues applicable to it with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of such statutory dues were in arrears as on 31st March, 2021 for a period of more than six months from the date they became payable.

• (b) According to the records of the Company, there are no dues of income-tax or sales tax or service tax or duty of customs or duty of excise or value added tax or cess which have not been deposited on account of any dispute.

• (viii) As per information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowing from banks.

• (ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments). The term loans taken during the year were applied for the purpose for which they were raised.

• (x) According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

• (xi) According to the records maintained by the Company and as per information and explanations given to us the managerial remuneration has been paid in accordance with the requisite approvals as required under section 197 read with Schedule V to the Companies Act, 2013.

• (xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, reporting under Clause 3(xii) of the Order is not applicable to the Company.

50

CRAVATEX LIMITED

AUDITORS’ REPORT

• (xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the standalone Ind AS financial statements.

• (xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly paid convertible debentures and hence reporting under clause 3 (xiv) of the Order is not applicable to the Company.

• (xv) As per information and explanations given to us the Company has not entered into any non-cash transactions with its Directors or persons connected to its directors and hence provisions of section 192 of the Companies Act, 2013 are not applicable to the Company.

• (xvi) As explained to us, the Company is not required to be registered under section 45-1A of the Reserve Bank of India Act, 1934 as this is not applicable to the Company.

For GPS & Associates Chartered Accountants Firm Registration No. 121344W

H. Y. Gurjar Partner Membership No. 032485 “UDIN: 21032485AAAABV1989”

Place : Mumbai Dated : June 29, 2021

51

69TH ANNUAL REPORT

BALANCE SHEET

BALANCE SHEET AS AT 31 MARCH, 2021

Particulars		Note No.		As at			As at
				March 31, 2021			March 31, 2020
				Rs. in Lacs			Rs. in Lacs
(A) ASSETS
(1) Non-Current assets
(a)	Property, Plant and Equipment	3		41.43			110.33
(b)	Investment Property	3		624.34			640.73
(c)	Right of use asset	42		112.70			—
(d)	Other Intangible Assets	3		62.75			80.53
(e)	Financial Assets
	(i) Investments	4		3,312.85			3,312.85
	(ii) Loans	5		30.50			8.16
(f)	Other Non-Current Assets	6		13.50			13.50
Total Non - Current Assets				4,198.07			4,166.09
(2) Current Assets
(a)	Inventories	7		1.25			1.26
(b)	Financial Assets
	(i) Investments	8		722.51			197.58
	(ii) Trade receivables	9		15.28			62.85
	(iii) Cash and cash equivalents	10		51.69			13.67
	(iv) Bank balances other than (iii) above	11		5.20			6.90
	(v) Others	12		12.92			3.67
(c)	Current Tax Assets (Net)	13		60.57			74.91
(d)	Other current assets	14		13.35			13.04
Total Current Assets				882.77			373.89
Total Assets				5,080.84			4,539.98
(B) EQUITY	AND LIABILITIES
(1) EQUITY
(a)	Equity Share capital	15		258.42			258.42
(b)	Other Equity	16		3,598.06			3,049.22
Total Equity				3,856.48			3,307.64
(2) LIABILITIES
(I)	Non-Current Liabilities
(a)	Financial Liabilities
	(i) Borrowings	17		398.83			388.88
	(ii) Others	18		215.48			28.20
(b)	Deferred tax liabilities (Net)	19		45.54			85.03
(c)	Other Non-Current Liabilities	20		325.22			328.94
(d)	Provisions	21		5.11			5.08
Total Non Current Liabilities				990.18			836.13
(II)	Current Liabilities
(a)	Financial Liabilities
	(i) Borrowings	22		—			9.92
	(ii) Trade payables	23		—			—
	(a) Due of Micro and small enterprises			—			—
	(b) Due of creditors other than micro and small enterprises			9.34			80.59
**(III) **	Others	24		196.55			287.58
(b)	Other Current Liabilities	25		27.92			17.81
(c)	Provisions	26		0.37			0.31
Total Current Liabilities				234.18			396.21
Total Equity and Liabilities				5,080.84			4,539.98
Corporate Information		1
Significant accounting policies		2
Notes forming part of the Financial Statements		33-47

As per our report of even date For and on behalf of the Board of CRAVATEX LTD. For GPS & ASSOCIATES Chartered Accountants Firm Registration No. 121344W Rajesh Batra

Chairman & Managing Director DIN: 00020764

H.Y. Gurjar Partner Membership No. 032485

Divakar Kamath Executive Director & CFO DIN: 08730430

Place : Mumbai Dated : June 29, 2021

N. Santhanam

Independent Director DIN: 00027724

Sudhanshu Namdeo Company Secretary Membership No.: A17132

52

CRAVATEX LIMITED

PROFIT AND LOSS STATEMENT

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH, 2021

Particulars		Note No.		For the Year			For the Year
				2020-2021			2019-2020
				Rs. in Lacs			Rs. in Lacs
INCOME
Revenue from operations		27		230.76			242.07
Other Income		28		1,002.39			711.44
	TOTAL INCOME			1,233.15			953.51
EXPENSES
Purchase of Stock-in-Trade				219.73			228.33
Change in Inventories		29		0.01			2.78
Employee benefits expense		30		94.48			114.81
Finance costs		31		65.34			80.07
Depreciation		3 & 42		73.59			84.87
Other expenses		32		161.37			187.36
	TOTAL EXPENSES			614.52			698.22
Profit / (Loss) before exceptional items				618.63			255.29
Exceptional items
Profit / (Loss) before tax				618.63			255.29
Tax expense :
Current Tax		35		(81.50)			(44.53)
Deferred tax		35		39.50			21.39
Profit / (Loss) for the period				576.63			232.15
Other Comprehensive Income/(loss) for the	period :
Items that will not be reclassified to profit or loss
(i) Re-measurements of the net defined benefit plans				(1.96)			(5.32)
Total Comprehensive Income/(loss) for the	period			574.67			226.83
Basic and Diluted Earnings per Equity share (In Rs)		34		22.31			8.98
Corporate Information		1
Significant accounting policies		2
Notes forming part of the Financial Statements		33-47

As per our report of even date For GPS & ASSOCIATES Chartered Accountants Firm Registration No. 121344W

H.Y. Gurjar Partner Membership No. 032485

Place : Mumbai Dated : June 29, 2021

For and on behalf of the Board of CRAVATEX LTD.

Rajesh Batra

Chairman & Managing Director DIN: 00020764

Divakar Kamath Executive Director & CFO DIN: 08730430

N. Santhanam

Independent Director DIN: 00027724

Sudhanshu Namdeo Company Secretary Membership No.: A17132

53

69TH ANNUAL REPORT

STATEMENT OF CHANGES IN EQUITY

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED ON MARCH 31, 2021

(A) EQUITY SHARE CAPITAL

(A) EQUITY SHARE CAPITAL Particulars At the commencement of the year Add: Shares issued during the year At the end of the year	31 March 2021	31 March 2020
	Number of Amount Shares Rs. in Lacs 25.84 258.42 — — 25.84 258.42	Number of Amount Shares Rs. in Lacs 25.84 258.42 — — 25.84 258.42

(B) OTHER EQUITY

								Rs. in Lacs
				Reserves and surplus
								Total
						Capital		attributable
						Redemp-	Export	to equity
			Retained	General	Capital	tion	Profit	share-
Particulars			Earnings	Reserve	Reserve	Reserve	Reserve	holders
(a)	Balance at 31 March 2019		292.14	2,564.79	18.92	48.25	1.68	2,925.76
	Profit for the year		232.15	—	—	—	—	232.15
	Other comprehensive income
	for the year		(5.32)	—	—	—	—	(5.32)
	Equity Dividend Paid during the year		—	(103.37)	—	—	—	(103.37)
	Transferred from General reserve		—	—	—	94.25	—	94.25
	Transferred to Capital Redemption
	Reserve		—	(94.25)	—	—	—	(94.25)
(b)	Total comprehensive income
	for the year		226.83	(197.62)	—	94.25	—	123.46
(c)	Balance at 31 March 2020 (a) + (b)		518.97	2,367.17	18.92	142.50	1.68	3,049.22
	Profit for the year		576.63	—	—	—	—	576.63
	Other comprehensive income for the year		(1.96)	—	—	—	—	(1.96)
	Equity Dividend Paid during the year		—	(25.84)	—	—	—	(25.84)
(d)	Total comprehensive income
	for the year		574.67	(25.84)	—	—	—	548.83
(e)	Balance at 31 March 2021 (c) + (d)		1,093.64	2,341.33	18.92	142.50	1.68	3,598.06

As per our report of even date For GPS & ASSOCIATES Chartered Accountants Firm Registration No. 121344W

H.Y. Gurjar Partner Membership No. 032485

Place : Mumbai Dated : June 29, 2021

For and on behalf of the Board of CRAVATEX LTD.

Rajesh Batra

Chairman & Managing Director DIN: 00020764

Divakar Kamath Executive Director & CFO DIN: 08730430

N. Santhanam

Independent Director DIN: 00027724

Sudhanshu Namdeo Company Secretary Membership No.: A17132

54

CRAVATEX LIMITED

CASH FLOW STATEMENT

CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2021

PARTICULARS A Cash flow from operating activities Net profit before tax Adjustments for: Depreciation Interest income Rent Income Gain on Investments Loss on debts measured at fair value Fixed assets written off Loss on sale of Property, Plant and Equipment Balances Written off/(Written Back) Dividend Income Investment measured at fair value Finance Cost Operating profit before working capital changes Adjustments for: (Increase)/Decrease in Trade Receivables (Increase)/Decrease in Inventories (Increase)/Decrease in Loans & Advances (Increase)/Decrease in Other Assets Increase/(Decrease) in Trade Payable Increase/(Decrease) in Other Liabilities Increase/(Decrease) in Provisions Cash generated from operations Direct taxes Refund/(paid) Net cash from operating activities B Cash flow from investing activities Additions to Fixed assets Purchase of Investments Sale of Fixed assets Gain on Investments Other Bank Balances Dividend Income Rent Income Interest received Net cash from / (used in) investing activities C Cash flow from financing activities Repayment from Long-term Borrowings Repayment of Short-term Borrowings Interest Paid Dividend Paid Net cash from / (used in) financing activities D Net cash flows during the year (A+B+C) Cash and cash equivalents (opening balance) Cash and cash equivalents (closing balance) (Refer Note-10)	For the year ended 31st March 2021 Rs. in Lacs 618.63 73.59 (4.26) (332.12) — 65.27 33.85 10.89 (11.00) (540.81) (9.02) 0.07 (94.90) 47.57 0.02 (22.34) (9.56) (60.25) 4.44 0.09 (134.93) (67.15) (202.08) (4.42) (524.93) 4.25 9.02 1.70 540.81 332.12 4.26 362.81 (86.88) (9.92) (0.07) (25.84) (122.71) 38.02 13.67 51.69	For the year ended 31st March 2020 Rs. in Lacs 255.28 84.87 (2.42) (331.94) (0.54) 54.03 16.54 — 35.00 (274.70) 0.55 8.20 (155.11) (39.75) 2.78 — 0.09 65.28 (21.30) (4.28) (152.29) (52.04) (204.33) (1.03) (97.36) — 0.54 0.66 274.70 331.94 2.42 511.86 (156.00) (109.69) (8.20) (103.37) (377.25) (69.72) 83.39 13.67

Notes:

1. The above cashflow statement has been prepared under ‘indirect Method’ as set out in in the Indian Accounting standard-7 on Statement on Cash Flows.

As per our report of even date For GPS & ASSOCIATES Chartered Accountants Firm Registration No. 121344W

H.Y. Gurjar Partner Membership No. 032485

Place : Mumbai Dated : June 29, 2021

For and on behalf of the Board of CRAVATEX LTD.

Rajesh Batra

Chairman & Managing Director DIN: 00020764

Divakar Kamath Executive Director & CFO DIN: 08730430

N. Santhanam Independent Director DIN: 00027724

Sudhanshu Namdeo Company Secretary Membership No.: A17132

55

69TH ANNUAL REPORT

NOTES TO FINANCIAL STATEMENT

NOTE 1 — CORPORATE INFORMATION

Cravatex Limited (“the Company”) was incorporated on 22nd June, 1951 under the Companies Act, 1913 (“the Act”) domiciled in India and headquartered in Mumbai. Cravatex Limited is the Holding Company of two subsidiaries viz. BB (UK) London (BBUK) and Cravatex Brands Ltd Mumbai (CBL). The Company along with its subsidiaries is engaged in the business of Branded sports goods, wellness and fitness equipment with servicing.

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES:

a) Statement of Compliance:

These Ind AS financial statements of the Company have been prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standards (herein referred to as ‘Ind AS’) notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time, the relevant provisions of the Companies Act, 2013 (the Act) and guidelines issued by the Securities and Exchange Board of India (SEBI), as applicable.

b) Basis of preparation and presentation:

Statement of compliance with Ind AS:

These financial statements are prepared on going concern basis in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on accrual basis except for certain financial instruments which are measured at fair value and the provisions of the Companies Act, 2013 (‘Act’). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

Historic cost convention:

The financial statements have been prepared on historic cost basis except for certain financial liabilities that are measured at fair value.

Functional and Presentation Currency:

The financial statements are presented in Indian Rupees (INR), which is the functional currency of the Company. All amounts have been rounded off to the nearest lacs. Amount below the rounded off norms have been reflected as “0” in the relevant notes.

Classification of Assets and Liabilities into Current/Non-Current:

The Company has ascertained its operating cycle as twelve months for the purpose of Current/ Non-Current classification of its Assets and Liabilities.

For the purpose of Balance Sheet, an asset is classified as current if:

• i. It is expected to be realised, or is intended to be sold or consumed, in the normal operating cycle; or

• ii. It is held primarily for the purpose of trading; or

• iii. It is expected to realise the asset within twelve months after the reporting period; or

• iv. The asset is a cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

Similarly, a liability is classified as current if:

• i. It is expected to be settled in the normal operating cycle; or

• ii. It is held primarily for the purpose of trading; or

• iii. It is due to be settled within twelve months after the reporting period; or

• iv. The Company does not have an unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could result in its settlement by the issue of equity instruments at the option of the counterparty does not affect this classification.

All other liabilities are classified as non-current.

56

CRAVATEX LIMITED

NOTES TO FINANCIAL STATEMENT

c) Property, Plant and Equipment (PPE):

The initial cost of PPE comprises of its purchase price, including import duties and non-refundable purchase taxes, and any directly attributable costs of bringing an asset to working condition and location for its intended use, including relevant borrowing costs and any expected costs of decommissioning, less accumulated depreciation and accumulated impairment losses, if any.

Subsequent expenditure relating to PPE are capitalised only when it is probable that future economic associated with these will flow to the Company and cost of the item can be measured reliably. Repairs and maintenance cost are charged to the Statement of Profit and Loss in the period in which the costs are incurred.

If significant parts of an item of PPE have different useful lives, then they are accounted for as separate items (major components) of PPE.

Material items such as spare parts, stand-by equipment and service equipment are classified as PPE when they meet the definition of PPE as specified in Ind AS 16 - Property, Plant and Equipment.

d) Investment Property:

Investment properties are properties (land or a building-or part of a building-or both) held to earn rentals and/or for capital appreciation (including property under construction for such purposes). Investment properties are measured initially at cost including purchase price, borrowing costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation and impairment, if any.

An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal.

Any gain or loss arising on derecognition of the property is included in the statement of profit and loss in the period in which the property is derecognised.

e) Depreciation:

The depreciable amount of an item of PPE is allocated on a systematic basis over its useful life. The Company provides depreciation on the straight line method over the useful lives as prescribed under Schedule II of the Act as per technical assessment. The Company believes that straight line method reflects the pattern in which the asset’s future economic benefits are expected to be consumed by the Company. The residual values, useful lives and method of depreciation are reviewed at least at each financial year-end and adjusted prospectively, if appropriate.

Depreciation on additions/ (disposals) are provided on a pro-rata basis i.e. from/ (up to) the date on which the asset is ready to use/ (disposed off).

f) Intangible Assets and Amortization:

Intangible assets with finite useful life that are acquired separately are stated at acquisition cost less accumulated amortization and impairment losses, if any. The Company determines the useful life as the period over which the future economic benefits will flow to the Company after taking into account all relevant facts and circumstances. The estimated useful life and amortization method is reviewed periodically, with the effect of any changes in estimate being accounted for on a prospective basis.

g) Impairment of Non-Financial Assets:

The Company’s non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset exceeds its estimated recoverable amount. Impairment losses are recognised in the statement of profit and loss.

The recoverable amount is the higher of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

In respect of the assets for which impairment loss has been recognised in prior periods, the Company reviews at each reporting date whether there is any indication that the loss has decreased or no longer exists. When there is indication that an impairment loss recognised for an asset (other than a revalued asset) in earlier accounting periods which no longer exists or may have decreased, impairment loss is reversed to the extent the amount was previously charged to the statement of profit and loss. In case of revalued assets, such reversal is not recognised.

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69TH ANNUAL REPORT

NOTES TO FINANCIAL STATEMENT

h) Inventories:

Inventories comprise of stock-in-trade which are carried at the lower of cost and net realisable value. Cost is determined on moving weighted average basis.

Cost of stock-in-trade comprises of all costs of purchase, duties, taxes (other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing the inventory to their present location and condition.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs necessary to make sale.

i) Borrowing Costs:

Borrowing costs are interest and other costs incurred by the Company in connection with the borrowing of funds. Borrowing costs directly attributable to acquisition or construction of those property, plant and equipment which necessarily take a substantial period of time to get ready for their intended use are capitalised. Other borrowing costs are recognised as an expense in the Statement of Profit and Loss of the period in which they are incurred.

j) Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects current market assessment of time value of money and, where appropriate, the risks specific to the liability. Unwinding of the discount is recognised in the Statement of Profit and Loss as a finance cost. Provisions are reviewed at each reporting date and are adjusted to reflect the current best estimate.

A present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is disclosed as a contingent liability. Contingent liabilities are also disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non -occurrence of one or more uncertain future events not wholly within the control of the Company.

Claims against the Company where the possibility of any outflow of resources in settlement is remote, are not disclosed as contingent liabilities.

Contingent assets are not recognised in financial statements since this may result in the recognition of income that may never be realised. However, when the realization of income is virtually certain, then the related asset is not a contingent asset and is recognised.

k) Revenue Recognition:

Effective April 1, 2018, the Company has applied Ind AS 115: Revenue from Contracts with Customers which establishes a comprehensive framework for determining whether, how much and when revenue is to be recognised. Ind AS 115 replaces Ind AS 18 Revenue. The impact of the adoption of the standard on the financial statements of the Company is insignificant.

• a. Revenue from sale of goods is recognised when control of the goods are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. The Company assesses promises in the contract that are separate performance obligations to which a portion of transaction price is allocated.

• b. Revenue is measured at fair value of the consideration received or receivable, after deduction of any trade discounts, allowances and any taxes or duties collected on behalf of the government such as goods and services tax, etc. Accumulated experience is used to estimate the provision for discounts, probable saleable and non-saleable return of goods from the customers. Revenue is only recognised to the extent that it is highly probable a significant reversal will not occur.

• c. Income from services rendered is recognised based on agreements/arrangements with the customers as the service is performed and there are no unfulfilled obligations.

• d. Interest income is recognised using the effective interest rate (EIR) method.

l) Lease:

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as Operating Leases.

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CRAVATEX LIMITED

NOTES TO FINANCIAL STATEMENT

Operating Lease:

Lease rentals are charged or recognised in the Statement of Profit and Loss on a straight-line basis over the lease term, except where the payments are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increase.

m) Employee Benefit Expense:

i) Short-term Employee Benefits:

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid e.g., under short-term cash bonus, if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.

ii) Post-employment benefits:

Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. The eligible employees of the Company are entitled to receive post-employment benefits in respect of provident, in which both the employees and the Company make monthly contributions at a specified percentage of the employees’ eligible salary (currently 12% of employees’ eligible salary). The contributions are made to the Regional Provident Fund Commissioner (RPFC) which are charged to the Statement of Profit and Loss as incurred.

Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company’s net obligation in respect of defined benefit plans is calculated by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan (‘the asset ceiling’). In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised in Other Comprehensive Income. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in Statement of Profit and Loss.

Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service. The Company has obtained insurance policies with the Life Insurance Corporation of India (LIC) and makes an annual contribution to LIC for amounts notified by LIC. The Company accounts for gratuity benefits payable in future based on an independent external actuarial valuation carried out at the end of the year using the projected unit credit method. Actuarial gains and losses are recognised as Other Comprehensive Income.

iii) Other Long-term employee benefits - Compensated Absences:

The Company provides for encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment / availment. The Company makes provision for compensated absences based on an independent actuarial valuation carried out at the end of the year. Actuarial gains and losses are recognised in the Statement of Profit and Loss.

n) Income Taxes:

Income tax comprises of current and deferred tax. It is recognised in Statement of Profit and Loss except to the extent that it relates to a business combination or to an item recognised directly in Equity or in Other Comprehensive Income.

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NOTES TO FINANCIAL STATEMENT

Current tax

Current tax comprises expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date.

Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognised in respect of carried forward tax losses and tax credits.

Deferred tax is not recognised for:

• i. temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss at the time of the transaction;

• ii. taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which they can be used. The existence of unused tax losses is strong evidence that future taxable profit may not be available. Therefore, in case of a history of recent losses, the Company recognises a deferred tax asset only to the extent that it has sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable profit will be available against which such deferred tax asset can be realised. Deferred tax assets - unrecognised or recognised, are reviewed at each reporting date and are recognised/ reduced to the extent that it is probable / no longer probable respectively that the related tax benefit will be realised.

Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

o) Foreign Currency Transactions:

Foreign currency transactions are recorded at exchange rate prevailing on the date of the transaction. Foreign currency denominated monetary assets and liabilities are restated into the functional currency using exchange rates prevailing on the Balance sheet date. Gains and losses arising on settlement and restatement of foreign currency denominated monetary assets and liabilities are recognised in the statement of profit and loss. Non- monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined.

Non-Monetary items that are measured in terms of historical cost in a foreign currency are translated using exchange rate as at the date of initial transactions.

p) Earnings Per Share:

The Company calculates earnings per share amounts for profit or loss attributable to ordinary equity shareholders.

The basic Earnings Per Share (“EPS”) is computed by dividing the net profit / (loss) after tax for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, net profit/(loss) after tax for the year attributable to the equity shareholders and the weighted average number of equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

q) Financial Instruments:

i) Recognition and Initial Measurement

Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument.

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CRAVATEX LIMITED

NOTES TO FINANCIAL STATEMENT

A financial asset or financial liability is initially measured at fair value plus, for an item not at Fair Value through Profit and Loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.

ii) Classification and Subsequent Measurement

Financial assets

On initial recognition, a financial asset is classified as measured at

• Amortised cost;

• Fair Value through Other Comprehensive Income (FVOCI) - debt investment;

• Fair Value through Other Comprehensive Income - equity investment; or

• FVTPL

Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

• the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

• A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

• the asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’s fair value in OCI (designated as FVOCI - equity investment). This election is made on an investmentby-investment basis.

All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Financial assets: subsequent measurement and gains and losses -

Financial assets at FVTPL These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss.

Financial assets at amortised cost These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.

Debt investments at FVOCI These assets are subsequently measured at fair value. Interest income under the effective interest method, foreign exchange gains and losses and impairment are recognised in profit or loss. Other net gains and losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.

Equity investments at FVOCI These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are not reclassified to profit or loss.

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69TH ANNUAL REPORT

NOTES TO FINANCIAL STATEMENT

Financial liabilities: Classification, subsequent measurement and gains and losses

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held for trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in Statement of Profit and Loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in Standalone Statement of Profit and Loss. Any gain or loss on derecognition is also recognised in Statement of Profit and Loss.

iii) De-recognition

Financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers not retains substantially all of the risks and rewards of ownership but does not retain control of the financial asset.

If the Company enters into transactions whereby it transfers assets recognized on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognized.

Financial liabilities

The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expired.

The Company also derecognises a financial liability when it terms are modified and the cash flow under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in profit or loss.

iv) Off setting

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

Equity Instrument

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

Measurement of fair values

The Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

The Company has an established control framework with respect to the measurement of fair values. The Company regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the Company assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which the valuations should be classified.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: inputs for asset or liability that are not based on observable market data (unobservable inputs).

62

CRAVATEX LIMITED

NOTES TO FINANCIAL STATEMENT

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

r) Cash and cash equivalents

Cash and cash equivalents in the Balance Sheet comprise cash at bank and in hand that are readily convertible into cash which are subject to insignificant risk of changes in value and are held for the purpose of meeting short-term cash commitments.

s) Segment Reporting - Identification of Segments:

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the company’s management to make decisions for which discrete financial information is available.

Based on the management approach as defined in Ind AS 108, the management evaluates the Company’s performance and allocates resources based on an analysis of various performance indicators by business segments and geographic segments.

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69TH ANNUAL REPORT

NOTES TO FINANCIAL STATEMENT

NOTES — Contd.

NOTE 3(a) Property, plant and equipment

Following are the changes in the carrying value of property, plant and equipment for the year ended on March,31 2021

(Rs. in Lacs)	(Rs. in Lacs)	(Rs. in Lacs)	(Rs. in Lacs)	(Rs. in Lacs)	(Rs. in Lacs)	(Rs. in Lacs)	(Rs. in Lacs)	(Rs. in Lacs)
Description	Spa / Fitness Equipment	Air- conditioning Plant & Units	Furniture, Fixtures & Fittings	Motor Vehicles	Electrical Fittings	Office Equipment	Leasehold Improvement	Total
Gross carrying value (at deemed cost) Balance as at 31 March 2019 Additions Deletions / discarded / adjustments Balance as at 31 March 2020 Additions Deletions / discarded / adjustments Balance as at 31 March 2021 Accumulated depreciation Balance as at 31 March 2019 Charge for the year Deletions/Adjustments Balance as at 31 March 2020 Charge for the year Deletions/Adjustments Balance as at 31 March 2021 Net carrying amount As at 31 March 2020 As at 31 March 2021	36.74 — —	76.03 — —	179.19 1.03 —	12.46 — —	58.89 — —	10.39 — —	48.62 — 8.48	422.32 1.03 8.48
	36.74	76.03	180.21	12.46	58.89	10.39	40.14	414.88
	— 36.74	— 63.82	— 113.07	— —	0.80 47.58	— 4.68	3.62 23.46	4.42 289.35
	—	12.21	67.15	12.46	12.11	5.72	20.30	129.95
	29.92 4.98 —	43.26 13.15 —	95.87 17.84 —	9.23 2.62 —	32.61 5.64 —	8.10 1.78 —	42.37 4.49 7.30	261.36 50.49 7.30
	34.90	56.41	113.71	11.84	38.25	9.88	39.56	304.55
	— 34.90	3.81 53.42	15.42 88.96	— —	3.96 35.15	0.20 4.45	0.93 23.46	24.32 240.34
	—	6.80	40.17	11.84	7.06	5.63	17.02	88.52
	1.84	19.62	66.51	0.61	20.64	0.51	0.59	110.33
	—	5.41	26.98	0.61	5.05	0.09	3.28	41.43

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CRAVATEX LIMITED

NOTES TO FINANCIAL STATEMENT

NOTES — Contd.

NOTE 3(b) Investment Property

Following are the changes in the carrying value of Investment Property for the year ended on March,31 2021

Description Gross carrying value (at deemed cost) Balance as at 31 March 2019 Additions Deletions / discarded / adjustments Balance as at 31 March 2020 Additions Deletions / discarded / adjustments Balance as at 31 March 2021 Accumulated depreciation Balance as at 31 March 2019 Charge for the year Deletions/Adjustments Balance as at 31 March 2020 Charge for the year Deletions/Adjustments Balance as at 31 March 2021 Net carrying amount As at 31 March 2020 (Fair Market Value Rs.6,159.59 Lacs) As at 31 March 2021 (Fair Market Value Rs.6,159.59 Lacs)	Building 1,036.71 — 17.52 1,019.19 — — 1,019.19 364.01 16.60 2.15 378.46 16.39 — 394.85 640.73 624.34	(Rs. in Lacs) Total 1,036.71 — 17.52 1,019.19 — — 1,019.19 364.01 16.60 2.15 378.46 16.39 — 394.85 640.73 624.34

The fair value of investment property has been determined having reference to the market values as prescribed under the ready reckoner published by a competent authority, as the company believes that the current market price of similar properties in the vicinity is the best evidence of the fair value of such investment property.

Note: Amounts recognized in profit and loss in respect of investment property

		(Rs. in Lacs)
Particulars	As at March	As at March
	31, 2021	31, 2020
Rent Income	332.12	331.94
Less: Depreciation	(16.39)	(16.60)
Less: Society charges & others	(22.37)	(41.54)
Profit	293.36	273.80

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69TH ANNUAL REPORT

NOTES TO FINANCIAL STATEMENT

NOTES — Contd.

NOTE 3(c) Other Intangible assets

Following are the changes in the carrying value of Intangible Assets for the year ended on March,31 2021

			(Rs. in Lacs)
Description	Software		Total
Gross carrying value (at deemed cost)
Balance as at 31 March 2019	186.85		186.85
Additions	—		—
Deletions / discarded / adjustments	—		—
Balance as at 31 March 2020	186.85		186.85
Additions	—		—
Deletions / discarded / adjustments	—		—
Balance as at 31 March 2021	186.85		186.85
Accumulated depreciation
Balance as at 31 March 2019	88.54		88.54
Charge for the year	17.78		17.78
Deletions/Adjustments	—		—
Balance as at 31 March 2020	106.32		106.32
Charge for the year	17.78		17.78
Deletions/Adjustments	—		—
Balance as at 31 March 2021	124.10		124.10
Net carrying amount
As at 31 March 2020	80.53		80.53
As at 31 March 2021	62.75		62.75

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CRAVATEX LIMITED

NOTES TO FINANCIAL STATEMENT

NOTES — Contd.

Particulars NOTE 4 — NON CURRENT FINANCIAL INVESTMENTS Unquoted 50000 ordinary shares of £ 1 each of BB(UK) Ltd 32,71,000 Equity shares of Rs. 100 each of Cravatex Brands Ltd Total NOTE 5 — NON-CURRENT FINANCIAL LOANS (Unsecured, considered good) Security Deposites & Others Total NOTE 6 — OTHER NON-CURRENT ASSETS (Unsecured, Considered Good) Advance with Customs authorities [Refer Note No 33(6) Total NOTE 7 — INVENTORIES Stock-in-Trade (At lower of cost and net realisable value) Total NOTE 8 — CURRENT FINANCIAL INVESTMENTS Investment measured at fair value through profit and loss Investment in Mutual Fund Total Aggregate book value of unquoted investments NOTE 9 — TRADE RECEIVABLES (Unsecured, considered good) Debts outstanding for a period exceeding six months Other Trade Receivables Total	As at 31st March 2021 Rs. in Lacs 41.85 3,271.00 3,312.85 30.50 30.50 13.50 13.50 1.25 1.25 722.51 722.51 713.39 — 15.28 15.28	As at 31st March 2020 Rs. in Lacs 41.85 3,271.00 3,312.85 8.16 8.16 13.50 13.50 1.26 1.26 197.58 197.58 197.03 — 62.85 62.85

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69TH ANNUAL REPORT

NOTES TO FINANCIAL STATEMENT

NOTES — Contd.

Particulars NOTE 10 — CASH AND CASH EQUIVALENTS (a) Balances with banks in: Current accounts Deposits having Maturity less than 3 Months (b) Cash on hand Total NOTE 11 — OTHER BANK BALANCES Unpaid dividend accounts Total NOTE 12 — OTHER CURRENT FINANCIAL ASSETS (Unsecured, considered good) Due from Subsidiary Company Total NOTE 13 — CURRENT TAX ASSETS Taxes Paid Net of Provisions Total NOTE 14 — OTHER CURRENT ASSETS Prepaid expenses Total	As at 31st March 2021 Rs. in Lacs 36.27 15.40 0.02 51.69 5.20 5.20 12.92 12.92 60.57 60.57 13.35 13.35	As at 31st March 2020 Rs. in Lacs 13.59 — 0.08 13.67 6.90 6.90 3.67 3.67 74.91 74.91 13.04 13.04

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CRAVATEX LIMITED

NOTES TO FINANCIAL STATEMENT

NOTES — Contd.

Particulars NOTE 15 — EQUITY Authorised: 48,50,000 (2020- 48,50,000) Equity shares of Rs.10 each 1,01,50,000 (2020- 1,01,50,000) Preference Shares of Rs. 10 each Total Issued, Subscribed and fully paid up: 25,84,160 (2020- 25,84,160) Equity shares of Rs.10 each Total	As at 31st March 2021 Rs. in Lacs 485.00 1,015.00 1,500.00 258.42 258.42	As at 31st March 2020 Rs. in Lacs 485.00 1,015.00 1,500.00 258.42 258.42

Notes:

1) Reconciliation of Number of Shares:

Particulars Equity Shares of Rs.10 each Shares outstanding at the beginning of the year Shares Issued during the year Shares outstanding at the end of the year	As at 31st March 2021 Number of Amount Shares Rs. in Lacs 2,584,160 258.42 — — 2,584,160 258.42	As at 31st March 2020 Number of Amount Shares Rs. in Lacs 2,584,160 258.42 — — 2,584,160 258.42

Name of the Shareholders 2) The details of the Shareholders holding more than 5% 1) R. B. Fitness & Trading Pvt. Ltd. No. of shares % held	As at 31st March 2021 Rs. in Lacs 1,921,570 74.36%	As at 31st March 2020 Rs. in Lacs 1,921,570 74.36%

Terms/rights attached to the Equity Shares

The Company has only one class of equity shares having at par value of Rs.10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution to all preferential holders. The distribution will be in proportion to the number of equity shares held by the shareholders.

69

69TH ANNUAL REPORT

NOTES TO FINANCIAL STATEMENT

NOTES — Contd.

NOTE 16 — OTHER EQUITY Capital Reserve Export Profit Reserve Capital Redemption Reserve General Reserve Retained Earnings Total Particulars	18.92 1.68 142.50 2,341.32 1,093.64 3,598.06 As at 31st March 2021 Rs. in Lacs	18.92 1.68 142.50 2,367.17 518.96 3,049.22 As at 31st March 2020 Rs. in Lacs

Description of nature and purpose of each reserve

Capital Reserve

Capital reserve represents amount received from Government of Karnataka.

Export Profit Reserve

Export profit reserve represents the amount earned from export sales and is to be utilised for the purpose of exports.

Capital Redemption Reserve

Capital Redemption Reserve has been created out of free reserves of the Company on account of redemption of preference shares.

General Reserve

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. There is no policy of regular transfer.

Retained Earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.

Particulars NOTE 17 — NON CURRENT FINANCIAL BORROWINGS (a) Unsecured 75,75,000 (2020 — 85,17,500), 4 % Non-convertible Cumulative Redeemable Preference shares of Rs.10 each Total	As at 31st March 2021 Rs. in Lacs 398.83 398.83	As at 31st March 2020 Rs. in Lacs 388.88 388.88

70

CRAVATEX LIMITED

NOTES TO FINANCIAL STATEMENT

NOTES — Contd.

NOTES:

Terms/rights attached to the 4% Non-convertible Cumulative Redeemable Preference shares of Rs.10 each

The Company has issued 4% Non-convertible redeemable preference share having a face value of Rs.10/- per each redeemable after a period of 20 years. Preference shareholders shall rank for dividend in priority to the equity shares. The Preference shareholder shall be eligible for 4% fixed cumulative preferential dividend.

Particulars NOTE 18 — OTHER NON-CURRENT FINANCIAL LIABILITIES Lease liability (Refer Note-42) Security Deposit Received Total NOTE 19 — DEFERRED TAX LIABILITIES (NET) Deferred tax liabilities: Deferred tax liabilities Total NOTE 20 — OTHER NON-CURRENT LIABILITIES Deferred Income Total NOTE 21 — NON-CURRENT PROVISIONS Provision for employee benefits: Compensated absences Total NOTE 22 — CURRENT FINANCIAL BORROWINGS Current Maturities of Long Term Borrowings Total	As at 31st March 2021 Rs. in Lacs 93.86 121.62 215.48 45.54 45.54 325.22 325.22 5.11 5.11 — —	As at 31st March 2020 Rs. in Lacs — 28.20 28.20 85.03 85.03 328.94 328.94 5.08 5.08 9.92 9.92

NOTES:

Current Maturities of Long Term Borrowings:

• Secured by first charge on the lease rentals from Company’s property at Nariman point, Mumbai and mortgage extended over the company’s property at Nariman point, Mumbai.

• Rate of interest is 11.25% p.a. (linked to 1 year MCLR)

• Repayable in 34 monthly installment starting from July 2017 with last installment payable in April 2020

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69TH ANNUAL REPORT

NOTES TO FINANCIAL STATEMENT

NOTES — Contd.

Particulars NOTE 23 — TRADE PAYABLES Due to Micro and small enterprises Due to creditors other than micro and small enterprises Total	As at 31st March 2021 Rs. in Lacs — 9.34 9.34	As at 31st March 2020 Rs. in Lacs — 80.59 80.59

There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2021, and no interest payment made during the year to any Micro and Small Enterprises. This information, as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006, has been determined to the extent such parties have been identified on the basis of information available with the Company.

Particulars NOTE 24 — OTHER CURRENT FINANCIAL LIABILITIES Security Deposits Received Lease Liability Interest Accrued but not due Unpaid Dividend Other Liabilities Others Total NOTE 25 — OTHER CURRENT LIABILITIES Other Liabilities(including Statutory dues) Deferred Lease Income Gratuity Obligation (Net)(Refer Note-36) Total NOTE 26 — CURRENT PROVISIONS Provision for employee benefits: Compensated absences Total	As at 31st March 2021 Rs. in Lacs 104.36 19.34 30.30 5.20 37.35 196.55 4.27 19.45 4.20 27.92 0.37 0.37	As at 31st March 2020 Rs. in Lacs 227.67 — 41.01 6.90 12.00 287.58 7.44 7.54 2.83 17.81 0.31 0.31

72

CRAVATEX LIMITED

NOTES TO FINANCIAL STATEMENT

NOTES — Contd.

Particulars NOTE 27 — REVENUE FROM OPERATIONS Sale of products Total NOTE 28 — OTHER INCOME Interest Income Bank & Other Interest Financial Instruments carried at amortised cost Dividend Income License fees Miscellaneous income Gain on Sale of Investments Total NOTE 29 — CHANGE IN INVENTORIES OF STOCK-IN-TRADE Opening stock Stock-in-trade Closing stock Stock-in-trade Total NOTE 30 — EMPLOYEE BENEFITS EXPENSES Salaries and wages (including bonus and gratuity) Contributions to: Provident, Family Pension and other Funds Staff welfare expenses Total NOTE 31 — FINANCE COSTS Interest expense Other borrowing costs Total	2020-2021 Rs. in Lacs 230.76 230.76 4.26 56.30 540.81 332.12 68.89 — 1,002.39 1.26 1.26 1.25 1.25 0.01 88.29 5.24 0.95 94.48 0.74 64.60 65.34	2019-2020 Rs. in Lacs 242.07 242.07 2.42 48.05 274.70 331.94 53.79 0.54 711.44 4.04 4.04 1.26 1.26 2.78 107.99 5.63 1.19 114.81 9.44 70.63 80.07

73

69TH ANNUAL REPORT

NOTES TO FINANCIAL STATEMENT

NOTES — Contd.

Particulars			2020-2021	2020-2021	2020-2021						2019-2020
			Rs.		in Lacs						Rs. in Lacs
NOTE 32 — OTHER EXPENSES
Insurance					1.91						2.00
Rates and taxes					30.87						9.31
Printing and stationery					1.69						2.93
Communications					0.32						1.18
Repairs & Maintenance					29.27						30.38
Advertisement and publicity					1.95						1.82
Travelling and conveyance					1.47						2.95
Commission and brokerage					2.58						10.66
Professional, Legal and Consultancy charges					21.07						43.77
Directors fees					11.00						13.60
Auditors’ remuneration (Refer Note Below)					6.00						6.75
Bank Charges not related to borrowings					1.13						0.52
Loss on sale of asset					10.89						—
Bad Debts					—						35.00
Other expenses					41.20						26.49
Total					161.37						187.36
					As at						As at
Particulars			31st March 2021					31st March 2020
			Rs.		in Lacs						Rs. in Lacs
PAYMENT TO AUDITORS
Statutory Audit fees					4.00						4.00
Tax Audit Fees					—						0.75
Others					2.00						2.00
Total					6.00						6.75
	Reference				As at						As at
			No.		31st March						31st March
						2021					2020
					Rs. in	Lacs					Rs. in Lacs
NOTE 33 — CONTINGENT LIABILITIES (to the extent not provided for)
A. Contingent Liabilities
Other money for which the Company is contingently liable
1) Demands under Wealth Tax Act			1			51.25					51.25
2) Demands under Income Tax Act		2, 3 & 4				25.17					25.43
3) Demands under VAT/CST Act			5 & 6		202.73						—
4) Demands under Customs Act			7 & 8		133.50						133.50
Total					412.65						210.18

74

CRAVATEX LIMITED

NOTES TO FINANCIAL STATEMENT

NOTES — Contd.

Notes:

1. Demands for Wealth Tax for the assessment years 1997-98 & 1998-99 amounting to Rs.51,25,378 was raised by the Tax authorities in earlier years which had been disputed by the Company and appeals filed with the Hon. High Court, Mumbai. The Company however deposited the demanded amounts in full with the tax authorities.

2. For the assessment years 2000-2001, 2002-2003 and 2003-2004 the Income-tax Appellate Tribunal had given relief of Rs.8,74,254 which had been accounted for in an earlier year. The tax authorities had subsequently filed an appeal with the Hon. High Court, Mumbai against the relief of Rs.8,74,254. The matter was set aside by Hon. High Court, in an earlier year and the matter was restored to the Tribunal for disposal. The matter is still pending with the tax authorities.

3. The tax authorities had raised a demand for the assessment year 2013-14 u/s 143 (3) for Rs.16,43,120. The company has disputed this demand and has filed an appeal with the Commissioner (Appeals) of Income- tax Mumbai against this demand.

4. The tax authorities had raised a demand of Rs.25,163/- for the assessment year 2011-12 as per order u/s 201(1)/(1A) dtd. 29.03.2018 on account of short deduction of TDS & interest thereon. The company had disputed this demand and had filed an appeal with the Commissioner (Appeals) of Income- tax Mumbai against this demand. A favorable order has been received against this and the demand stands deleted.

5. VAT assessment order of Karnatak state for FY 2015-16 was passed raising demand totalling to Rs.15,35,487/- (TaxRs.7,59,150/-, Interest-Rs.7,00,422/-, Penalty Rs.75,915/-).The Company has filed an appeal against this order and paid full amount of Rs.15,35,487/-

6. CST assessment order of Delhi location of the company for FY 2016-17 was passed raising demand totalling to Rs.1,87,36,493/ - (Tax-Rs.1,13,64,635/-, Interest-Rs.73,71,858/-).The Conpany has filed an appeal against this order.

7. Demand of Rs.13,50,000 raised in an earlier year by the customs authorities for goods imported had been disputed by the Company against which the full amount had been deposited under protest. The matter is still pending with the Customs authorities.

8. Bond for Rs.1.20 crore executed with the Customs authorities for demand raised by the authorities in an earlier year which had been disputed and challenged by the Company. This Bond is to remain in force till finalisation of the value by the Customs authorities of the goods imported by the Company.

9. The Hon’ble Supreme Court of India (“SC”) by their order dated February 28, 2019, in the case of Surya Roshni Limited & others v/sEPFO, set out the principles based on which allowances paid to the employees should be identified for inclusion in basic wages for the purposes of computation of Provident Fund contribution. Subsequently, a review petition against this decision has been filed and is pending before the SC for disposal.

In view of the management, the liability for the period from date of the SC order to 31 March 2019 is not significant. Further, pending decision on the subject review petition and directions from the EPFO, the impact for the past period, if any, is not ascertainable and consequently no effect has been given in the accounts.

B. Guarantees/Commitments

1. Guarantees given by the Company in respect of loans obtained by its subsidiary company “Cravatex Brands Limited” and outstanding as on March 31, 2021 - Rs. 6500 Lakhs. The said guarantee has been given by way of creating a mortgage charge on the investment properties held by the company.

Particulars NOTE 34 — EARNING PER SHARE (Disclosure Pursuant to Ind AS-33) Net Profit/(Loss) as per Profit and Loss Account Weighted Average Number of Equity Shares Basic/ Diluted Earning per shares Nominal Value per Share (Rs.)	2020-2021 Rs. in Lacs 576.63 2,584,160 22.31 10.00	2019-2020 Rs. in Lacs 232.15 2,584,160 8.98 10.00

75

69TH ANNUAL REPORT

NOTES TO FINANCIAL STATEMENT

NOTES — Contd.

Particulars NOTE 35 — INCOME TAXES (A) Tax expense recognised in profit and loss Current tax Current tax Excess Tax Provision for Earlier years Deferred Tax (net) Deferred tax (credit) / charge Tax expense for the year (B) Reconciliation of Effective Tax Rate: Profit before tax Applicable Tax Rate Income tax expense calculated at above rate Adjustment for income taxable at lower rates Tax Loss for which no deferred income tax was recognised Tax effects of amounts which are not deductible (taxable) in calculating taxable income Income tax expense recognised in profit and loss	FY 2020-2021 Rs. in Lacs 81.50 — (39.50) 42.00 618.63 25.17% 155.71 (53.00) (39.50) (21.21) 42.00	FY 2019-2020 Rs. in Lacs 44.53 — (21.39) 23.14 255.29 25.17% 64.26 (22.63) (18.49) — 23.14

(C) Deferred tax assets / liabilities (net):

(C) Deferred tax assets / liabilities (net):	(C) Deferred tax assets / liabilities (net):	(C) Deferred tax assets / liabilities (net):
(Rs. in Lacs) As at Recognised Recognised As at Particulars 31st March in Statement in OCI 31st March 2020 of Profit & 2021 Loss Account Others 85.03 39.50 — 45.54 Deferred tax liabilities 85.03 39.50 — 45.54
	Recognised in OCI —	As at 31st March 2021 45.54 45.54
	—

(D) Impact of IND AS adjustments on Tax computation:

1. Section 5 of the Income Tax Act states that profits are chargeable only when they accrue, arise or are received. Based on this provision of the Income Tax Act, it is a settled proposition that tax can be levied on real income and not any hypothetical or illusionary income – Shoorji vallabhdas & Co – (1962) 46 ITR 144 (SC) and Godhra Electricity Co. Ltd. - (1997) 225 ITR 746 (SC). These principles have been reiterated in ICDS-IV for revenue recognition under the Income Tax Act.

2. The Supreme Court in Indorama Synthetics India Ltd. – 330 ITR 263 held that the objective of the provisions of Minimum Alternate Tax (MAT) is to bring out real profits of the company, wherein, the thrust was to find out real working results of the company. Based on this decision, several ITATs have held that what is not income which is chargeable to tax also cannot be included for the purposes of book profit or computing of book profit u/s.115JB.

3. Under IND-AS accounting framework, there are certain mandatory adjustments to incomes and expenditures, which are only conceptual and do not reflect real income/expenditure as per prevailing provisions of the Income Tax Act.

76

CRAVATEX LIMITED

NOTES TO FINANCIAL STATEMENT

NOTES — Contd.

Particulars Fair Valuation of Preference Shares Amortisation of Notional Income on Security Deposits Taken Amortisation of Term Loan processing fees Amortisation of Security Deposits Given Fair Valuation of Preference Shares Notional Income on Security Deposite Taken Amortisationof lease liabilities for Security Deposite Taken Total Net Impact in statement of profit & Loss	Debit — — 0.67 17.75 40.25 — 6.60 65.27 17.98	(Rs. in Lacs) Credit 27.42 19.47 — — — 0.40 — 47.29 —

NOTE 36 — EMPLOYEE BENEFITS

a. Defined Benefit Plans:

Gratuity:

The gratuity payable to employees is based on the employee’s service and last drawn salary at the time of leaving the services of the Company and is in accordance with the rules of the Company for payment of gratuity.

Inherent Risk on above:

The plan is defined in nature which is sponsored by the Company and hence it underwrites all the risks pertaining to the plan. In particular, this exposes the Company to actuarial risk such as adverse salary growth, change in demographic experience, inadequate return on underlying plan assets. This may result in an increase in cost of providing these benefits to the employees in future. Since the benefits are lump sum in nature, the plan is not subject to any longevity risk.

Particulars (i) Change in Defined Benefit Obligation Balance at the beginning of the year Adjustment of: Current Service Cost Liability transferred out/ Divestments Past Service cost Interest Cost Actuarial (gains)/losses recognised in Other Comprehensive Income: — Change in Financial Assumptions — Change in Demographic Assumptions — Experience Changes Benefits Paid Balance at the end of the year (ii) Change in Fair value of assets Balance at the beginning of the year Assets transferred out/ Divestments Expected Return on Plan Assets excluding interest income Interest Income Re-measurements due to: Actual Return on Plan Assets less interest on Plan Assets Contribution by the employer Benefits Paid Balance at the end of the year	31st March 2021 Gratuity Rs. in Lacs 38.85 3.15 — — 2.50 0.16 — (2.17) (2.84) 39.65 36.02 — (0.05) 2.32 — — (2.84) 35.45	31st March 2020 Gratuity Rs. in Lacs 29.86 1.56 — — 2.10 1.18 — 4.15 — 38.85 33.63 — 0.01 2.38 — — — 36.02

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69TH ANNUAL REPORT

NOTES TO FINANCIAL STATEMENT

NOTES — Contd.

(iii) Net Asset / (Liability) recognized in the Balance Sheet Present value of the funded defined benefit obligation at the end of the period Fair Value of Plan Assets Net Asset / (Liability) in the Balance Sheet (iv) Expenses recognized in the Statement of Profit & Loss Current Service Cost Interest Cost Past Service Cost Expected Return on Plan Assets Amount charged to the Statement of Profit and Loss (v) Re-measurements recognized in Other Comprehensive Income (OCI): Actual Gain/Losses on Obligation Return on plan assets, Excluding Interest Income Amount recognized in Other Comprehensive Income (OCI) (vi) Maturity Profile of Defined Benefit Obligation: Within the next 12 months Between 1 and 5 years Between 6 and 10 years 11 Years and above (vii) Sensitivity analysis for significant assumptions: Increase/(Decrease) on present value of defined benefits obligation at the end of the year 1% increase in discount rate 1% decrease in discount rate 1% increase in salary escalation rate 1% decrease in salary escalation rate 1% increase in employee turnover rate 1% decrease in employee turnover rate The major categories of plan assets as a percentage of total plan: Insurer Managed Funds Actuarial Assumptions: Discount Rate (p.a.) Expected Return on Plan Assets (p.a.) Turnover Rate Mortality tables Salary Escalation Rate (p.a.) Retirement age Weighted Average duration of Defined benefit obligation (years) Particulars*	(39.65) 35.45 (4.20) 3.15 0.18 — — 3.33 (2.01) 0.05 (1.96) 1.72 21.70 20.24 15.42 39.65 (2.07) 2.28 1.40 1.38 0.23 (0.26) 35.45 6.43% 6.43% 20% and 7% Indian Assured Lives Mortality (2006-08) 6.00% 60 and 65 7 31st March 2021 Gratuity Rs. in Lacs	(38.85) 36.02 (2.83) 1.56 (0.27) 0.79 — 1.29 5.34 (0.02) 5.32 3.26 12.56 30.18 9.45 38.85 (1.82) 1.98 1.47 (1.47) 0.15 (0.17) 36.02 6.43% 6.43% 20% and 7% Indian Assured Lives Mortality (2006-08) 6.00% 60 and 65 6 31st March 2020 Gratuity Rs. in Lacs

• The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

78

CRAVATEX LIMITED

NOTES TO FINANCIAL STATEMENT

NOTES — Contd.

The sensitivity analysis presented above may not be representative of the actual change in the projected benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the projected benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the projected benefit obligation as recognised in the balance sheet.

Basis used to determine Expected Rate of Return on Plan Assets: The overall expected rate of return on assets is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

Salary Escalation Rate: The past experience and industry practice considering promotion and demand and supply of employees.

Asset Liability matching strategy: The money contributed by the Company to the Gratuity fund to finance the liabilities of the plan has to be invested.

The trustees of the plan have outsourced the investment management of the fund to an insurance Company. The insurance Company in turn manages these funds as per the mandate provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance regulations. Due to the restrictions in the type of investments that can be held by the fund, it is not possible to explicitly follow an asset liability matching strategy.

There is no compulsion on the part of the Company to fully prefund the liability of the Plan. The Company’s philosophy is to fund these benefits based on its own liquidity and the level of underfunding of the plan.

b. Defined Contribution Plans:

Amount recognized as an expense and included in Note 30 under the head “Contribution to Provident and other Funds” of Statement of Profit and Loss is:

Particulars Provident, Family Pension and other Funds Employees State Insurance Scheme Superannuation Scheme Total	31st March 2021 Rs. in Lacs 5.24 — — 5.24	31st March 2020 Rs. in Lacs 5.63 — — 5.63

Compensated Absences:

The liability towards compensated absences is provided for based on actuarial valuation carried out by using Projected Accured Benefit Method.

79

69TH ANNUAL REPORT

NOTES TO FINANCIAL STATEMENT

NOTES — Contd.

NOTE 37 — RELATED PARTY DISCLOSURES

Name of Related Parties

Nature of Relationship

(A) List of parties excercising control:

R.B Fitness & Trading Private Limited

Holding Company

(B) List of Related Parties where control exists:

Cravatex Brands Limited BB UK Ltd. BB Europe GmbH SD Enterprises Proline India Ltd. (Now merged with Cravatex Brands Ltd.) Tecfin Consultancy Services LLP Proline Exports Pvt Ltd. Crav Apparels Private Limited

Subsidiary Company Subsidiary Company Fellow Subsidiary Company Director’s relative interest

Enterprises where common control exists

(C) Key Management Personnel:

Mr. Rajesh Batra Chairman & Managing Director Mr. Divakar Kamath Executive Directors & Chief Financial Officer (CFO) Mr. N. Santhanam Independent Director Ms. Pheroza Jimmy Bilimoria Independent Director Mr. Rohan Batra Director Mr. Sudhanshu Namdeo Company Secretary

(D) The following transactions were carried out with the related parties in the ordinary course of business:

Nature of Transaction/Relationship Dividend Received BB UK Ltd. Service Charges Received on SAP Cravatex Brands Limited Proline India Ltd. (Now merged with Cravatex Brands Ltd.) Combined Office Administrative Charges Tecfin Consultancy Services LLP Rent Income Cravatex Brands Limited Sale of Stock in Trade Crav Apparels Private Limited Director Sitting Fee	As at 31 March 2021 Rs. in Lacs 534.33 36.34 15.33 4.63 17.45 125.33 11.00	As at 31 March 2020 Rs. in Lacs 266.93 37.47 16.32 — 17.20 39.60 13.60

80

CRAVATEX LIMITED

NOTES TO FINANCIAL STATEMENT

NOTES — Contd.

(E) Outstanding balances: Trade Receivables — Cravatex Brands Limited Trade Payables (F) Compensation of Key Management Personnel of the Company: Short Term Employee Benefits Other Long Terms Benefits Total Compensation Nature of Transaction/Relationship	12.92 — 64.48 2.69 67.17 As at 31 March 2021 Rs. in Lacs	3.67 — 78.07 3.90 81.97 As at 31 March 2020 Rs. in Lacs

Terms and condition of transaction with related parties:

All related party transactions entered during the year are in ordinary course of the business and are on arm’s length basis.

Particulars NOTE 38 — FINANCIAL INSTRUMENTS Classification of Financial Assets and Liabilities: Financial assets at Amortized cost: Loans (Non Current) Trade Receivables Cash and Cash Equivalents Other Bank Balances Other Current Financial Assets Financial assets at Fair Value through Profit and Loss Account: Investment (Current) Financial assets at Fair Value through Other Comprehensive Income: Investment (Non Current) Total Financial Liabilities at Amortized cost: Borrowings (Non Current) Borrowings (Current) Other Non Current Financial Liabilities Trade Payables Other Current Financial Liabilities Total	As at 31 March 2021 Rs. in Lacs 30.50 15.28 51.69 5.20 12.92 722.51 3,312.85 4,150.95 398.83 — 215.48 9.34 196.55 820.20	As at 31 March 2020 Rs. in Lacs 8.16 62.85 13.67 6.90 3.67 197.58 3,312.85 3,605.68 388.88 9.92 28.20 80.59 287.58 795.17

81

69TH ANNUAL REPORT

NOTES TO FINANCIAL STATEMENT

NOTES — Contd.

Carrying amount of Investment, Trade Receivables, Cash and Cash Equivalent, Bank balances, Other financial Assets, Trade payables and Other financial liabilities as at 31st March, 2021, and 31st March, 2020 approximate the Fair Value because of their short term nature. Difference between carrying amount and fair values of bank deposits, other financial assets, other financial liabilities and borrowings subsequenty measured at amortised cost is not significant each of year presented.

NOTE 39 — FAIR VALUE MEASUREMENT

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company has established the following fair value hierarchy that categorizes the values into 3 levels. The inputs to valuation techniques used to measure fair value of financial instruments are:

Level 1: This hierarchy uses quoted (unadjusted) prices in active markets for identical assets or liabilities. The Company has recognised short term investment in mutual funds under this category amounting to Rs. 722.51 lakhs.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on company specific estimates.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3. The investments included in Level 3 of fair value hierarchy have been valued using the cost approach to arrive at their fair value. The cost of unquoted investements approximate the fair value because there is a wide range of possible fair value measurements and the cost represents estimate of fair value within that range.

The management assessed that cash and bank balances, trade payables, and other financial asset and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

NOTE 40 — FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company’s principal financial liabilities comprise of Borrowings. The main purpose of these financial liabilities is to finance and support the Company’s operations. The Company’s principal financial assets include Investments, Loans and Other receivables, Cash and Cash Equivalents, Other Bank Balances that directly derive from its operations.

The Company is exposed to Market Risk, Credit Risk and Liquidity Risk. The Company’s senior management oversees the management of these risks. The Company’s senior management ensures that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives.

(A) Market Risk:

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument.

The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and borrowings.

(1) Foreign Currency Risk:

Foreign currency risk is the risk of impact related to fair value or future cash flows of an exposure in foreign currency, which fluctuate due to changes in foreign exchange rates.

(2) Interest Rate Risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s short term borrowing with floating interest rates. The Company constantly monitors the credit markets and rebalances its financing strategies to achieve an optimal maturity profile and financing cost.

82

CRAVATEX LIMITED

NOTES TO FINANCIAL STATEMENT

NOTES — Contd.

(a) Fixed Rate Non Current Borrowings Current Borrowings (b) Fluctuating Rate Non Current Borrowings Current Borrowings Particulars	757.50 — — — As at 31st March 2021 Rs. in Lacs	757.50 — — 9.92 As at 31st March 2020 Rs. in Lacs

Interest rate sensitivities for unhedged exposure (impact on increase in 100 bps):

Particulars Non Current Borrowings Current Borrowings	As at 31st March 2021 Rs. in Lacs — —	As at 31st March 2020 Rs. in Lacs — 0.10

Note: If the rate is decreased by 100 bps profit will increase by an equal amount.

(B) Credit Risk:

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating (primarily Trade Receivables), investing and financing activities including Bank Balance, Deposits with Bank, Security Deposits, Loans to Employees and other financial instruments.

Trade Receivables :

Trade receivables are consisting of a large number of customers. The Company has credit evaluation policy for each customer and based on the evaluation credit limit of each customer is defined.

Trade receivables are typically unsecured and are derived from revenue earned from customers. Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business. The company allows credit period ranging from 30 days to 180 days, subject to reasonableness of the receivable. There is no concentration of customers and receivable amount.

Investments, Cash and Cash Equivalent and Bank Deposit:

Credit Risk on cash and cash equivalent is generally low, as the said deposits have been made with the banks/financial institutions who have been assigned high credit rating by international and domestic rating agencies.

Investments of surplus funds are made only based on Investment Policy of the Company. Investments consists of Investments in Subsidiaries & Investment in Short Term liquid Mutual Funds.

C) Liquidity Risk:

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of credit facilities to meet obligations when due. The Company’s treasury team is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company’s liquidity position through rolling forecasts on the basis of expected cash flows.

83

69TH ANNUAL REPORT

NOTES TO FINANCIAL STATEMENT

NOTES — Contd.

The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments.

				(Rs. in Lacs)
	Less than	1 to 5	More than	Total
As at 31st March 2021	1 Year	Years	5 Years
Trade Payables	9.34	—	—	9.34
Borrowings (including current maturities of long term debt)	—	—	757.50	757.50
Other Financial Liabilities	172.01	240.02	—	412.03
				(Rs. in Lacs)
	Less than	1 to 5	More than	Total
As at 31st March 2020	1 Year	Years	5 Years
Trade Payables	80.59	—	—	80.59
Borrowings (including current maturities of long term debt)	9.92	—	757.50	767.42
Other Financial Liabilities	280.68	35.10	—	315.78

NOTE 41 — CAPITAL MANAGEMENT

The Company’s objectives when managing capital are to

(a) maximise shareholder value and provide benefits to other stakeholders and

(b) maintain an optimal capital structure to reduce the cost of capital.

For the purposes of the Company’s capital management, capital includes issued capital, share premium and all other equity reserves attributable to the equity holders.

The Company monitors capital using debt-equity ratio, which is total debt less investments divided by total equity.

Particulars (A) Total Debt (B) Cash and Marketable securities (C) Net Debt (A-B) (D) Total Equity as per Balance Sheet Debt to Equity (Net) (C/D)	As at 31st March 2021 Rs. in Lacs 398.83 774.20 (375.36) 3,856.48 (0.10)	As at 31st March 2020 Rs. in Lacs 398.80 211.25 187.55 3,307.64 0.06

In addition the Company has financial covenants relating to the borrowing facilities that it has taken from the lenders like interest coverage service ratio, Debt to EBITDA, etc. which is maintained by the Company

84

CRAVATEX LIMITED

NOTES TO FINANCIAL STATEMENT

NOTES — Contd.

NOTE 42 — LEASES

The company has taken on lease office premises . The lease runs for the period of 5 years.

Information about leases for which the company is lessee is presented below:

Particulars (A) Right of use assets Balance at April 1, 2020 Additions Disposal / Derecognized during the year Balance at March 31, 2021 (B) Accumulated depreciation Balance at April 1, 2020 Depreciation expense Disposal / Derecognized during the year Balance at March 31, 2021 (C) Lease liabilities Balance at April 1, 2020 Addition Accredition of interest Payments Balance at March 31, 2021 Current Non-current (D) Amounts recognised in profit and loss Depreciation expense of right-of-use assets Interest expense on lease liabilities Total	As at 31st March 2021 Rs. in Lacs — 127.80 — 127.88 — 15.10 — 15.10 — 123.64 6.60 17.04 113.20 19.34 93.86 15.18 6.60 21.78	As at 31st March 2020 Rs. in Lacs — — — — — — — — — — — — — — — — — —

NOTE 43 — RECENT ACCOUNTING PRONOUNCEMENTS

New and amended standards adopted by the Company: In the current year, the Company has applied the below amendments to Ind AS 116 that are effective for an annual period that begins on or after 1 April 2020:

The Company has adopted the amendments to Ind AS 116 for the first time in the current year. The amendments provide practical relief to lessees in accounting for rent concessions occurring as a direct consequence of COVID-19, by introducing a practical expedient to Ind AS 116. The practical expedient permits a lessee to elect not to assess whether a COVID-19-related rent concession is a lease modification. A lessee that makes this election shall account for any change in lease payments resulting from the COVID-19-related rent concession the same way it would account for the change applying Ind AS 116 if the change were not a lease modification. The practical expedient applies only to rent concessions occurring as a direct consequence of COVID19 and only if all of the following conditions are met:

• The change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;

85

69TH ANNUAL REPORT

NOTES TO FINANCIAL STATEMENT

NOTES — Contd.

• Any reduction in lease payments affects only payments originally due on or before 30 June 2021 (a rent concession meets this condition if it results in reduced lease payments on or before 30 June 2021 and increased lease payments that extend beyond 30 June 2021); and

• There is no substantive change to other terms and conditions of the lease. The Company has applied the practical expedient retrospectively to all eligible rent concessions and has not restated prior period figures.

There is no impact of these amendments on the Company as the Company did not have any leased assets.

New Standards or other amendments issued but not yet effective: Ministry of Corporate Affairs (“MCA”) regularly notifies new standard or amendments to the existing standards. There is no such notification which would have been applicable from April 1, 2021.

NOTE 44 — SEGMENT INFORMATION

The Company has determined following reporting segments based on the information reviewed by the Company’s Chief Operating Decision Maker (‘CODM’)

• (A) Trading - Trading in Sports Goods and Textiles

• (B) Unallocable - Others

Particulars	For the year Ended 31 March 2021	For the year Ended 31 March 2021	For the year Ended 31 March 2021	For the year Ended 31 March 2020	For the year Ended 31 March 2020	For the year Ended 31 March 2020
	Trading	Unallocable	Total	Trading	Unallocable	Total
Segment Revenue (Revenue from Sales, Services & Other Operating Revenue) Revenue from Sale of products Revenue from Services Other Operating Revenue Total Revenue (A) Less: Inter Segment Revenue if any (B) Total Segment Revenue (C = A-B) Segment Results (Profit / (Loss) Before Interest, Depreciation Tax & Exceptional Items) Less: Exceptional Items Segment Results (Profit / (Loss) Before Interest, Depreciation & Tax) Less: Depreciation & Amortization Total Segment Result (D) Less: Finance Costs Add: Other Income Profit/(Loss) Before Tax Tax Expenses — Current Tax — Deferred Tax Charge/(Credit) — Excess Tax Provision for Earlier years Profit for the year	230.76 — —	— — —	230.76 — —	242.07 — —	— — —	242.07 — —
	230.76	—	230.76	242.07	—	242.07
	—	—	—	—	—	—
	230.76	—	230.76	242.07	—	242.07
	11.03 — 11.03 —	(255.85) — (255.85) (73.59)	(244.82) — (244.82) (73.59)	10.95 — 10.95 —	(302.17) — (302.17) (84.87)	(291.21) — (291.21) (84.87)
	11.03	(329.44)	(318.42)	10.95	(387.04)	(376.08)
	— —	(65.34) 1,002.39	(65.34) 1,002.39	— —	(80.07) 711.44	(80.07) 711.44
	11.03	607.60	618.63	10.95	244.33	255.29
	— — —	(81.50) 39.50 —	(81.50) 39.50 —	— — —	(44.53) 21.39 —	(44.53) 21.39 —
	11.03	565.60	576.63	10.95	221.18	232.15

86

CRAVATEX LIMITED

NOTES TO FINANCIAL STATEMENT

NOTES — Contd.

Segment Reporting Format for Business Segment as per IND AS 108

Particulars Segment Assets — Trading Add: Unallocable Segment Assets Total Assets Segment Liabilities — Trading Add: Unallocable Segment Liabilities Total Liabilities	As on 31st March 2021 Rs. in Lacs 15.28 5,065.56 5,080.84 9.34 1,215.02 1,224.36	As on 31st March 2020 Rs. in Lacs 62.85 4,477.13 4,539.98 80.59 1,151.75 1,232.34

The geographical information analyses the Company’s revenues and non-current assets by the company’s country of domicile (i.e. India) and other countries. In presenting the geographical information, segment revenue has been based on the geographical location of customers and segment assets have been based on the geographic location of the assets.

Particulars A. Revenue from operations — Domestic — International B. Non-current assets — Domestic — International	As on 31st March 2021 Rs. in Lacs 230.76 — 4,198.07 —	As on 31st March 2020 Rs. in Lacs 242.07 — 4,166.09 —

NOTE 45 — SUBSEQUENT EVENT

Dividends paid during the year ended March 31, 2021 includes an amount of Rs. 1 per equity share towards final dividend for the year ended March 31, 2020.

Dividends declared by the Company are based on the profit available for distribution. Distribution of dividends out of general reserve and retained earnings is subject to applicable Tax Deducted at Source. On 29.06.2021, the Board of Directors of the Company have proposed a final dividend of Rs.3/- per share in respect of the year ended March 31, 2021 subject to the approval of shareholders at the Annual General Meeting. The proposal is subject to the approval of shareholders at the Annual General Meeting, and if approved, would result in a cash outflow of approximately Rs.77.52 Lacs.

87

69TH ANNUAL REPORT

NOTES TO FINANCIAL STATEMENT

NOTES — Contd.

NOTE 46 — CORPORATE SOCIAL RESPONSIBILITY

The provisions of Section 135 of the Companies Act, 2013 are not applicable to the Company as it does not fall under the class of Companies specified under the section.

NOTE 47 — PREVIOUS YEAR’S COMPARABLES

Previous year’s figures have been reCompanyed/reclassified wherever necessary, to confirm with current years classification/ disclosure.

SIGNATURES TO NOTES FORMING PART OF THE FINANCIAL STATEMENTS FROM “1” TO “47”

As per our report of even date For GPS & ASSOCIATES Chartered Accountants Firm Registration No. 121344W

H.Y. Gurjar Partner Membership No. 032485

Place : Mumbai Dated : June 29, 2021

For and on behalf of the Board of CRAVATEX LTD.

Rajesh Batra

Chairman & Managing Director DIN: 00020764

Divakar Kamath

Executive Director & CFO DIN: 08730430

N. Santhanam

Independent Director DIN: 00027724

Sudhanshu Namdeo

Company Secretary Membership No.: A17132

88

CRAVATEX LIMITED

CONSOLIDATED AUDITORS’ REPORT

INDEPENDENT AUDITOR’S REPORT

To the Members of Cravatex Limited

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the accompanying consolidated financial statements of Cravatex Limited (“the Company”) and its subsidiaries (the Company and its subsidiaries together referred to as “the Group”), which comprise the Consolidated Balance Sheet as at March 31, 2021, the Consolidated Statement of Profit and Loss (including Other Comprehensive Income/Expense), the Consolidated Statement of Changes in Equity and the Consolidated Statement of Cash Flows for the year ended on that date, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “the consolidated financial statements”).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated financial statements give the information required by the Companies Act, 2013 (the “Act”) in the manner so required and give a true and fair view in conformity with Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended (“Ind AS”) and other accounting principles generally accepted in India, of the consolidated state of affairs of the Group as at March 31, 2021, the consolidated profit, consolidated total comprehensive income, consolidated changes in equity and its consolidated cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the consolidated financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the independence requirements that are relevant to our audit of the consolidated financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Sr.	Key Audit Matter	Auditor’s Response
No.
1	Accuracy of writing-off of Fixed asset	Principal Audit Procedures
	As at March 31, 2021, some of the fixed assets	We have evaluated the written off fixed assets on the basis
	were written off.	of Managements evaluation of its usefulness & formed an
		opinion on accuracy of entries passed in the books of
		accounts.

Information Other than the Consolidated Financial Statements and Auditor’s Report Thereon

The Company’s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Board’s Report including Annexures to Board’s Report, Business Responsibility Report, Corporate Governance and Shareholder’s Information, but does not include the consolidated financial statements and our auditor’s report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

89

69TH ANNUAL REPORT

CONSOLIDATED AUDITORS’ REPORT

Management’s Responsibility for the Consolidated Financial Statements

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance, consolidated total comprehensive income, consolidated changes in equity and consolidated cash flows of the Group in accordance with the Ind AS and other accounting principles generally accepted in India. The respective Board of Directors of the companies included in the Group are responsible for maintenance of the adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error which have been used for the purpose of preparation of the consolidated financial statements by the management and Board of Directors of the Holding Company, as aforesaid.

In preparing the consolidated financial statements, the respective Board of Directors of the companies included in the Group are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

The respective Board of Directors of the companies included in the Group are also responsible for overseeing the financial reporting process of the Group.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company and its subsidiary companies which are companies incorporated in India, has adequate internal financial controls system in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the audit of the financial statements of such entities included in the consolidated financial statements.

• Materiality is the magnitude of misstatements in the consolidated financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

90

CRAVATEX LIMITED

CONSOLIDATED AUDITORS’ REPORT

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act, based on our audit we report that:

2. a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements.

3. b. In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books.

4. c. The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss including (including Other Comprehensive Income), Consolidated Statement of Changes in Equity and the Consolidated Statement of Cash Flows dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements.

5. d. In our opinion, the aforesaid consolidated financial statements comply with the Ind AS specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

6. e. On the basis of the written representations received from the directors of the Company as on March 31, 2021 taken on record by the Board of Directors of the Company and its subsidiaries incorporated in India and the reports of the statutory auditors of its subsidiary companies incorporated in India, none of the directors of the Group companies incorporated in India is disqualified as on March 31, 2021 from being appointed as a director in terms of Section 164 (2) of the Act.

7. f. With respect to the adequacy of the internal financial controls over financial reporting and the operating effectiveness of such controls, refer to our separate Report in “Annexure A” which is based on the auditor’s reports of the Company and its subsidiary companies incorporated in India. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the internal financial control over financial reporting of those companies, for reasons stated therein.

8. g. With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of section 197(16) of the Act, as amended:

   • In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

9. h. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:

   • (i) The consolidated financial statements disclose impact of pending litigations on the consolidated financial position of the Group.

   • (ii) Provision has been made in the consolidated financial statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts.

   • (iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company and its subsidiary companies incorporated in India.

For GPS & Associates Chartered Accountants Firm Registration No. 121344W

H. Y. Gurjar Partner Membership No. 032485 UDIN: 21032485AAAABW5754

Place : Mumbai Dated : June 29, 2021

91

69TH ANNUAL REPORT

CONSOLIDATED AUDITORS’ REPORT

Annexure “A” to the Independent Auditor’s Report

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

In conjunction with our audit of the consolidated Ind AS financial statements of the Company as of and for the year ended 31 March 2021, we have audited the internal financial controls over financial reporting of Cravatex Limited (“the Holding Company”) and its subsidiary company which is a company incorporated in India, as of that date.

Management’s Responsibility for Internal Financial Controls

The respective Board of Directors of the Holding Company and its subsidiary company, which is a company incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note issued by the ICAI and the Standards of Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

92

CRAVATEX LIMITED

CONSOLIDATED AUDITORS’ REPORT

Opinion

In our opinion, to the best of our information and according to the explanations given to us and based on the consideration of report of other auditor, as referred to in the Other Matters paragraph, the Holding Company and its subsidiary which is incorporated in India, have, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2021, based on the internal control over financial reporting criteria established by the respective Companies considering the essential components of internal control stated in the Guidance Note.

Other Matters

Our aforesaid report under section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting in so far as it relates to consolidated/standalone financial statements of its subsidiary which is a company incorporated in India, is based on the corresponding reports of the auditor of such company.

For GPS & Associates Chartered Accountants Firm Registration No. 121344W

H. Y. Gurjar Partner Membership No. 032485 UDIN: 21032485AAAABW5754

Place : Mumbai Dated : June 29, 2021

93

69TH ANNUAL REPORT

CONSOLIDATED BALANCE SHEET

CONSOLIDATED BALANCE SHEET AS AT 31 MARCH, 2021

Particulars		Note No.		As at			As at
				March 31, 2021			March 31, 2020
				Rupees in Lacs			Rupees in Lacs
(A) ASSETS
(1) Non-Current assets
(a)	Property, Plant and Equipment	3(a)		1,471.17			1,767.21
(b)	Investment Property	3(b)		624.34			640.73
(c)	Right to lease asset	44		3,047.37			3,908.15
(d)	Other Intangible Assets	3(c)		2,502.84			2,898.13
(e)	Financial Assets
	(i) Loans	4		577.27			595.82
	(ii) Others	5		29.08			30.34
(f)	Other Non-Current Assets	6		62.74			273.61
Total Non - Current Assets				8,314.81			10,113.99
(2) Current Assets
(a)	Inventories	7		8,500.38			8,161.33
(b)	Financial Assets
	(i) Investments	8		1,479.38			2,455.87
	(ii) Trade receivables	9		14,305.11			16,942.71
	(iii) Cash and cash equivalents	10		3,524.69			3,922.78
	(iv) Bank Balances other than Cash and Cash Equivalents	11		82.62			1,008.77
	(v) Other Financial Assets	12		759.91			454.57
(c)	Loans and advances	13		323.42			305.85
(d)	Current Tax Assets (Net)	14		60.57			74.91
(e)	Other current assets	15		1,159.60			749.73
Total Current Assets				30,195.68			34,076.52
Total Assets				38,510.49			44,190.51
(B) EQUITY	AND LIABILITIES
(1) EQUITY
(a)	Equity Share capital	16		258.42			258.42
(b)	Other Equity	17		(3,086.65)			(360.77)
Equity attributable to shareholders of the Company				(2,828.24)			(102.35)
Non-controlling interests				7,524.06			7,109.37
Total Equity				4,695.82			7,007.02
(2) LIABILITIES
(I)	Non-Current Liabilities
(a)	Financial Liabilities
	(i) Borrowings	18		8,416.74			8,328.88
	(ii) Others	19		2,666.66			3,434.88
(b)	Provisions	20		204.24			219.54
(c)	Deferred tax liabilities (Net)	21		82.97			119.55
(d)	Other Non-Current Liabilities	22		778.40			721.28
Total Non Current Liabilities				12,149.01			12,824.13
(II)	Current Liabilities
(a)	Financial Liabilities
	(i) Borrowings	23		7,049.41			7,742.40
	(ii) Trade payables	24		2,297.11			4,207.35
	(iii) Others	25		3,582.45			3,280.88
(b)	Other Current Liabilities	26		8,103.89			8,829.67
(c)	Provisions	27		632.81			299.06
Total Current Liabilities				21,665.67			24,359.36
Total Equity and Liabilities				38,510.49			44,190.51
Corporate Information		1
Significant accounting policies		2
Notes forming part of the Financial Statement		34-53

As per our report of even date For and on behalf of the Board of CRAVATEX LTD. For GPS & ASSOCIATES Chartered Accountants Firm Registration No. 121344W Rajesh Batra

Chairman & Managing Director DIN: 00020764

H.Y. Gurjar Partner Membership No. 032485

Divakar Kamath Executive Director & CFO DIN: 08730430

Place : Mumbai Dated : June 29, 2021

N. Santhanam

Independent Director DIN: 00027724

Sudhanshu Namdeo Company Secretary Membership No.: A17132

94

CRAVATEX LIMITED

CONSOLIDATED PROFIT AND LOSS STATEMENT

CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH, 2021

Particulars Note No. INCOME Revenue from operations 28 Other Income 29 TOTAL INCOME EXPENSES Purchase of Stock-in-Trade Change in Inventories of Stock in Trade 30 Employee benefits expense 31 Finance costs 32 Depreciation and amortisation expense 3 & 44 Other expenses 33 TOTAL EXPENSES Profit / (Loss) before tax Tax expense : Current Tax Deferred tax Asset/(Liability) Excess Tax Provision for Earlier years Profit /(Loss) for the period Other Comprehensive Income/(loss) for the period : Items that will not be reclassified to profit or loss (i) Re-measurements of the net defined benefit Plans Total Other Comprehensive Income/(loss) for the period Total Comprehensive Income/(loss) for the period Net profit attributable to: Owners of the Holding Company Non-controlling Interest Other Comprehensive Income/(loss) attributable to: Owners of the Holding Company Non-controlling Interest Total Comprehensive Income/(loss) attributable to: Owners of the Holding Company Non-controlling Interest Basic and Diluted Earnings per Equity share (In Rs) 49	For the Year 2020-2021 Rupees in Lacs 53,187.67 1,431.32 54,618.99 36,765.03 (339.06) 6,416.33 1,432.14 1,744.23 11,575.60 57,594.26 (2,975.28) (445.04) 39.50 319.76 (3,061.06) (52.63) (52.63) (3,113.69) (3,060.91) (0.15) (3,061.06) (52.63) (0.00) (52.63) (3,113.54) (0.15) (3,113.69) (118.45)	For the Year 2019-2020 Rupees in Lacs 86,464.73 525.79 86,990.52 59,313.08 1,252.40 7,098.86 1,320.10 1,498.04 16,750.57 87,233.05 (242.53) (587.01) 21.39 336.68 (471.47) (13.36) (13.36) (484.83) (471.41) (0.07) (471.47) (13.36) (0.00) (13.36) (484.77) (0.07) (484.83) (18.24)

As per our report of even date

For GPS & ASSOCIATES Chartered Accountants Firm Registration No. 121344W

H.Y. Gurjar Partner Membership No. 032485

Place : Mumbai Dated : June 29, 2021

For and on behalf of the Board of CRAVATEX LTD.

Rajesh Batra

Chairman & Managing Director DIN: 00020764

Divakar Kamath Executive Director & CFO DIN: 08730430

N. Santhanam

Independent Director DIN: 00027724

Sudhanshu Namdeo Company Secretary Membership No.: A17132

95

69TH ANNUAL REPORT

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED ON MARCH 31, 2021

(A) EQUITY SHARE CAPITAL

(A) EQUITY SHARE CAPITAL Particulars At the commencement of the year Add: Shares issued during the year At the end of the year	31 March 2021	31 March 2020
	Number of Amount Shares Rs. in Lacs 2,584,160 258.42 — — 2,584,160 258.42	Number of Amount Shares Rs. in Lacs 2,584,160 258.42 — — 2,584,160 258.42

(B) OTHER EQUITY

					Reserves	and surplus
										Total
		Foreign						Amalgamation		attributable
		Currency					Capital	Adjustment	Export	to equity
		Translation	Retained	General	Capital	Security	Redemption	Deficit	Profit	share-
Particulars		Reserve	Earnings	Reserve	Reserve	Premium	Reserve	Account	Reserve	holders
(a)	Balance at 31 March 2019	46.48	1,597.93	2,061.42	240.76	7.55	116.98	(5,306.74)	6.03	(1,229.59)
	Profit for the year	—	(471.41)	—	—	—	—	—	—	(471.41)
	Other comprehensive
	income for the year	—	(13.36)	—	—	—	—	—	—	(13.36)
(b)	Total comprehensive
	income for the year	—	(484.77)	—	—	—	—	—	—	(484.77)
(c)	Effect during the year	74.44	(15.82)	(194.32)	—	1,395.04	94.25		—	1,353.59
(d)	Balance at 31 March 2020
	(a+b+c)	120.92	1,097.34	1,867.10	240.76	1,402.59	211.23	(5,306.74)	6.03	(360.77)
	Profit for the year	—	(3,060.91)	—	—	—	—	—	—	(3,060.91)
	Other comprehensive income
	for the year	—	(52.63)	—	—	—	—	—	—	(52.63)
(e)	Total comprehensive
	income for the year	—	(3,113.54)	—	—	—	—	—	—	(3,113.54)
(f)	Effect during the year	126.01	—	(23.46)	—	285.12	—	—	—	387.66
(g)	Balance at 31 March 2021
	(d+e+f)	246.92	(2,016.20)	1,843.64	240.76	1,687.71	211.23	(5,306.74)	6.03	(3,086.65)

As per our report of even date For GPS & ASSOCIATES Chartered Accountants Firm Registration No. 121344W

H.Y. Gurjar Partner Membership No. 032485

Place : Mumbai Dated : June 29, 2021

For and on behalf of the Board of CRAVATEX LTD.

Rajesh Batra

Chairman & Managing Director DIN: 00020764

Divakar Kamath Executive Director & CFO DIN: 08730430

N. Santhanam

Independent Director DIN: 00027724

Sudhanshu Namdeo Company Secretary Membership No.: A17132

96

CRAVATEX LIMITED

CONSOLIDATED CASH FLOW STATEMENT

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2021

PARTICULARS A Cash flow from operating activities Net profit before tax Adjustments for: Depreciation Interest income Rent Income Gain on Investments Dividend Income Finance Cost Unrealised exchange gain (net) Profit / (Loss) on sale of Fixed Assets Fixed Assets Written off Loss on debt instruments measured at FVTPL Bad Debts & Provision for bad debts MTM loss on derivative contracts Current Year gain/loss on translation of currencies Operating profit before working capital changes Adjustments for: (Increase)/Decrease in Trade Receivables (Increase)/Decrease in Inventories (Increase)/Decrease in Loans & Advances (Increase)/Decrease in Other Assets Increase/(Decrease) in Trade Payable Increase/(Decrease) in Other Liabilities Increase/(Decrease) in provisions Cash generated from operations Direct taxes Paid/(Refund received) Net cash from operating activities B Cash flow from investing activities (Purchase)/Sale of Fixed assets Sale/(Purchase) of investments Deposits relating to investment property Gain on sale of Investments Movement in Other Bank Balances Dividend Income Rent Income Interest received Net cash from / (used in) investing activities C Cash flow from financing activities Proceeds of Issue of preference shares by subsidiary Company Dividend Paid Cash payment for principal portion of lease liabilty Proceeds from/ (Repayment) of long-term Borrowings Proceeds from/ (Repayment) of Short-term Borrowings Interest Paid Net cash from / (used in) financing activities D Net cash flows during the year (A+B+C) Cash and cash equivalents (opening balance) Cash and cash equivalents (closing balance)	As at 31st March 2021 Rs. in Lacs (2,975.28) 1,744.23 (122.04) (314.67) (34.12) (6.48) 1,432.14 (3.22) 89.66 33.85 67.90 625.12 (0.75) 126.01 662.37 2,012.48 (339.05) (17.56) (504.35) (1,907.01) (449.48) 268.15 (274.44) (108.01) (382.46) (267.79) 978.50 18.55 34.12 926.14 6.48 314.67 44.75 2,055.42 700 (25.84) (640.00) 87.85 (760.89) (1,432.14) (2,071.04) (398.08) 3,922.78 3,524.69	As at 31st March 2020 Rs. in Lacs (242.53) 1,498.04 (113.47) (314.74) (0.54) (7.77) 1,320.10 80.19 — 16.54 29.00 218.17 (31.59) 74.44 2,525.85 1,368.83 1,252.40 (156.86) (693.90) 619.68 (892.11) (564.66) 3,459.22 (256.87) 3,202.35 (810.37) (2,322.52) (61.05) 0.54 (881.35) 7.77 314.74 18.75 (3,733.47) 3,000 (119.19) (470.00) (73.32) 2,725.63 (1,320.10) 3,743.01 3,211.89 710.88 3,922.78

Note: The above Cash Flow Statement has been prepared under the ‘Indirect Method’ as set out in the Indian Accounting Standard (IND AS) 7 – “Statement of Cash Flows”

As per our report of even date For GPS & ASSOCIATES Chartered Accountants Firm Registration No. 121344W

H.Y. Gurjar Partner Membership No. 032485

Place : Mumbai Dated : June 29, 2021

For and on behalf of the Board of CRAVATEX LTD.

Rajesh Batra

Chairman & Managing Director DIN: 00020764

Divakar Kamath Executive Director & CFO DIN: 08730430

N. Santhanam

Independent Director DIN: 00027724

Sudhanshu Namdeo Company Secretary Membership No.: A17132

97

69TH ANNUAL REPORT

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED ON MARCH 31, 2021

NOTE 1 — COMPANY OVERVIEW

Cravatex Limited (“the Company”) incorporated on 22nd June, 1951 under the Companies Act, 1913 (“the Act”) is a public limited BSE listed Company, incorporated and domiciled in India. The Company is a subsidiary of holding company, R.B. Fitness and Trading Private Limited incorporated and domiciled in India. Cravatex Limited is the Holding Company of two subsidiaries viz. BB (UK) London (BBUK) and Cravatex Brands Ltd Mumbai (CBL) and one fellow subsidiary viz BB Europe Gmbh. The Company along with its subsidiaries is engaged in the business of Branded sports goods, wellness and fitness equipment with servicing. Details of the shareholding in subsidiaries are as under:

Proportion of Ownership Name of the Subsidiary Country As at As at 31st March 2021 31st March 2020 Rupees in Lacs Rupees in Lacs Cravatex Brands Limited India 99.997% 99.997% BB (UK) Limited United Kingdom 100% 100%	Proportion of Ownership Name of the Subsidiary Country As at As at 31st March 2021 31st March 2020 Rupees in Lacs Rupees in Lacs Cravatex Brands Limited India 99.997% 99.997% BB (UK) Limited United Kingdom 100% 100%	Proportion of Ownership Name of the Subsidiary Country As at As at 31st March 2021 31st March 2020 Rupees in Lacs Rupees in Lacs Cravatex Brands Limited India 99.997% 99.997% BB (UK) Limited United Kingdom 100% 100%	Proportion of Ownership Name of the Subsidiary Country As at As at 31st March 2021 31st March 2020 Rupees in Lacs Rupees in Lacs Cravatex Brands Limited India 99.997% 99.997% BB (UK) Limited United Kingdom 100% 100%
		As at 31st March 2021 Rupees in Lacs 99.997% 100%	As at 31st March 2020 Rupees in Lacs 99.997% 100%

NOTE 2(A): Significant Accounting Policies

The consolidated financial statements have been prepared on the historical cost basis except for the following assets and liabilities which have been measured at fair value amount:

• I. Certain financial assets and liabilities (including derivative instruments),

• II. Defined benefit plan’s - plan assets and

• III. Equity settled share based payments

The consolidated financial statements of the Group have been prepared to comply with the Indian Accounting standards (‘Ind AS’), including the rules notified under the relevant provisions of the Companies Act, 2013.

The figures for the previous period have been restated, regrouped and reclassified wherever required to comply with the requirement of Ind AS and Schedule III. The Company’s consolidated financial statements are presented in Indian Rupees in lakhs up to two decimals.

NOTE 2(B): Principles of Consolidation

The consolidated financial statements relate to Cravatex Limited (‘the Company’) and its subsidiary companies. The consolidated financial statements have been prepared on the following basis:

• I. The financial statements of the Company and its subsidiaries are combined on a line by line basis by adding together like items

• II. Profits or losses resulting from intra-group transactions that are recognised in assets, such as inventory and property, plant & equipment, are eliminated in full.

• III. In case of foreign subsidiaries, revenue items are consolidated at the average rate prevailing during the year. All assets and liabilities are converted at rates prevailing at the end of the year. Any exchange difference arising on consolidation is recognised in the Foreign Currency Translation Reserve.

• IV. Offset (eliminate) the carrying amount of the parent’s investment in each subsidiary and the parent’s portion of equity of each subsidiary.

• V. The difference between the proceeds from disposal of investment in subsidiaries and the carrying amount of its assets less liabilities as on the date of disposal is recognised in the Consolidated Statement of Profit and Loss being the profit or loss on disposal of investment in subsidiary.

• VI. Non-Controlling Interest’s share of profit / loss of consolidated subsidiaries for the year is identified and adjusted against the income of the group in order to arrive at the net income attributable to shareholders of the Company.

• VII. Non-Controlling Interest’s share of net assets of consolidated subsidiaries is identified and presented in the Consolidated Balance Sheet separate from liabilities and the equity of the Company’s shareholders.

NOTE 2(C): Other Significant Accounting Policies

These are set out under “Significant Accounting Policies” as given in the Company’s standalone financial statements.

98

CRAVATEX LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

NOTE 3(a) Property, plant and equipment

Following are the changes in the carrying value of property, plant and equipment for the year ended on March,31 2021

(Rs. in Lacs)	(Rs. in Lacs)	(Rs. in Lacs)	(Rs. in Lacs)	(Rs. in Lacs)	(Rs. in Lacs)	(Rs. in Lacs)	(Rs. in Lacs)	(Rs. in Lacs)	(Rs. in Lacs)	(Rs. in Lacs)	(Rs. in Lacs)
Description	Freehold Land	Building	Spa / Fitness Equipment	Air- conditioning Plant & Units	Furniture, Fixtures & Fittings	Motor Vehicles	Electrical Fittings	Office Equipment	Leasehold Improve- ment	Computers	Total
Gross carrying value (at cost) Balance as at 31 March 2019 Additions Deletions / discarded / adjustments Balance as at 31 March 2020 Additions Deletions / discarded / adjustments Balance as at 31 March 2021 Accumulated depreciation Balance as at 31 March 2019 Charge for the year Deletions/Adjustments Balance as at 31 March 2020 Charge for the year Deletions/Adjustments Balance as at 31 March 2021 Net carrying amount As at 31 March 2020 As at 31 March 2021	5.14 — —	374.19 41.81 —	36.74 — —	75.58 — —	1,386.69 667.74 —	34.79 — —	208.60 30.98 —	109.84 43.12 0.07	95.16 — 8.48	91.97 14.67 —	2,418.70 798.30 8.55
	5.14	415.99	36.74	75.58	2,054.43	34.79	239.58	152.89	86.68	106.64	3,208.46
	— —	11.25 —	— 36.74	— 63.82	202.02 303.58	7.02 16.51	4.82 115.12	6.49 33.18	3.62 67.97	8.49 23.21	243.72 660.13
	5.14	427.25	—	11.76	1,952.87	25.30	129.28	126.21	22.33	91.92	2,792.05
	— — —	118.04 21.60 2.24	29.92 4.98 —	43.26 13.15 —	518.93 263.48 8.65	25.68 6.07 0.01	137.05 20.41 —	64.69 17.27 —	88.90 4.49 7.30	68.51 13.02 —	1,094.98 364.47 18.20
	—	137.40	34.90	56.41	773.76	31.74	157.46	81.96	86.09	81.53	1,441.25
	— —	32.82 5.60	— 34.90	3.81 53.42	350.64 234.36	2.81 16.38	13.11 87.98	18.87 32.40	0.93 67.97	12.51 22.87	435.50 555.88
	—	164.62	—	6.80	890.04	18.17	82.59	68.43	19.05	71.17	1,320.87
	5.14	278.59	1.84	19.17	1,280.67	3.06	82.12	70.93	0.59	25.10	1,767.21
	5.14	262.63	—	4.96	1,062.82	7.13	46.69	57.77	3.28	20.75	1,471.17

99

69TH ANNUAL REPORT

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

NOTE 3(b) Investment Property

Following are the changes in the carrying value of Investment Property for the year ended on March,31 2021

			(Rs. in Lacs)
Description	Building		Total
Gross carrying value (at cost)
Balance as at 31 March 2019	1,036.71		1,036.71
Additions	—		—
Deletions / discarded / adjustments	17.52		17.52
Balance as at 31 March 2020	1,019.19		1,019.19
Additions	—		—
Deletions / discarded / adjustments	—		—
Balance as at 31 March 2021	1,019.19		1,019.19
Accumulated depreciation
Balance as at 31 March 2019	364.01		364.01
Charge for the year	16.60		16.60
Deletions/Adjustments	2.15		2.15
Balance as at 31 March 2020	378.46		378.46
Charge for the year	16.39		16.39
Deletions/Adjustments	—		—
Balance as at 31 March 2021	394.85		394.85
Net carrying amount
As at 31 March 2020	640.73		640.73
As at 31 March 2021	624.34		624.34

The fair value of investment property has been determined having reference to the market values as prescribed under the ready reckoner published by a competent authority, as the company believes that the current market price of similar properties in the vicinity is the best evidence of the fair value of such investment property.

Note: Amounts recognised in profit and loss in respect of investment property

		Rupees in Lacs
Particulars	As at March	As at March
	31, 2021	31, 2020
Rent Income	332.12	331.94
Less: Depreciation	(16.39)	(16.60)
Less: Society charges & others	(22.37)	(41.54)
Profit	293.36	273.80

100

CRAVATEX LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

NOTE 3(c) Other Intangible assets

Following are the changes in the carrying value of Intangible Assets for the year ended on March,31 2021

								(Rs. in Lacs)
Description		Licenses,		Software		Web site		Total
	Sublicenses &
		Franchise
Gross carrying value (at cost)
Balance as at 31 March 2019		3,929.86		226.39		22.80		4,179.05
Additions		—		0.43		—		0.43
Deletions / discarded / adjustments		—		—		—		—
Balance as at 31 March 2020		3,929.86		226.82		22.80		4,179.48
Additions		—		4.00		—		4.00
Deletions / discarded / adjustments		—		9.40		—		9.40
Balance as at 31 March 2021		3,929.86		221.42		22.80		4,174.08
Accumulated depreciation
Balance as at 31 March 2019		754.99		105.48		22.80		883.27
Charge for the year		373.15		24.94		—		398.09
Deletions/Adjustments		—		—		—		—
Balance as at 31 March 2020		1,128.14		130.42		22.80		1,281.36
Charge for the year		373.50		25.29		—		398.79
Deletions/Adjustments		—		8.90		—		8.90
Balance as at 31 March 2021		1,501.64		146.80		22.80		1,671.24
Net carrying amount
As at 31 March 2020		2,801.72		96.40		—		2,898.12
As at 31 March 2021		2,428.22		74.62		—		2,502.84

101

69TH ANNUAL REPORT

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

Particulars NOTE 4 — NON CURRENT LOANS (Unsecured, Considered Good) Security & Other Deposits Total NOTE 5 — OTHER NON-CURRENT FINANCIAL ASSETS Bank deposits with orginal maturity beyond 12 months Total NOTE 6 — OTHER NON-CURRENT ASSETS (Unsecured, Considered Good) Other Loans and Advances Prepaid Expenses Total NOTE 7 — INVENTORIES Stock-in-Trade Stores and Spares (valued at lower of cost and net realisable value) Total NOTE 8 — CURRENT INVESTMENTS Investment measured at fair value through profit and loss Investment in Mutual Funds (quoted) Total Aggregate book value of unquoted investments NOTE 9 — TRADE RECEIVABLES Secured, considered good Unsecured, considered good Credit impaired Less: Loss Allowance Total*	As at 31st March 2021 Rupees in Lacs 577.27 577.27 29.08 29.08 62.74 — 62.74 8,413.04 87.34 8,500.38 1,479.38 1,479.38 713.39 227.75 14,077.36 781.58 (781.58) 14,305.11	As at 31st March 2020 Rupees in Lacs 595.82 595.82 30.34 30.34 63.07 210.54 273.61 8,020.18 141.16 8,161.33 2,455.87 2,455.87 2,447.03 118.84 16,823.87 152.60 (152.60) 16,942.71

Receivable from related parties {Refer note 39}

102

CRAVATEX LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

Particulars NOTE 10 — CASH AND BANK BALANCES (A) Cash & Cash Equivalents (a) Balances with banks: Current accounts Deposite accounts (b) Cash in hand Total NOTE 11 — BANK BALANCES OTHER THAN CASH AND CASH EQUIVALENTS Fixed Deposit of original maturity of more than 3 Months but within 12 months Unpaid Dividend Total NOTE 12 — OTHER CURRENT FINANCIAL ASSETS Advance with Government Authorities Other Loans and Advances Total NOTE 13 — CURRENT LOANS & ADVANCES (Unsecured,considered good) Deposits Advance to Related Party Employee advances Total NOTE 14 — CURRENT TAX ASSETS (Unsecured, considered good) Current Tax Assets (Net) Total NOTE 15 — OTHER CURRENT ASSETS (Unsecured, considered good) Advance to vendors Prepaid expenses Balance with Government Authorities Advance to others Total	As at 31st March 2021 Rupees in Lacs 2,765.09 749.88 9.72 3,524.69 77.42 5.20 82.62 743.27 16.64 759.91 271.55 9.38 42.49 323.42 60.57 60.57 146.36 420.81 589.10 3.34 1,159.60	As at 31st March 2020 Rupees in Lacs 3,910.52 — 12.25 3,922.78 1,001.87 6.90 1,008.77 454.57 — 454.57 275.44 8.65 21.76 305.85 74.91 74.91 117.29 143.34 479.24 9.86 749.73

103

69TH ANNUAL REPORT

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

Particulars NOTE 16 — EQUITY SHARE CAPITAL Authorised Equity Share of Rs. 10/- each Preference Shares of Rs. 10 each Preference Shares of Rs. 100 each Total Issued, Subscribed and fully paid up: Equity Share of Rs. 10/- each Total	As at 31st March 2021	As at 31st March 2020
	Number of Shares Amount 4,850,000 485.00 10,150,000 1,015.00 — — 15,000,000 1,500.00 2,584,160 258.42 2,584,160 258.42	Number of Shares Amount 4,850,000 485.00 10,150,000 1,015.00 — — 15,000,000 1,500.00 2,584,160 258.42 2,584,160 258.42

Notes:

1) Reconciliation of Number of Shares:

1) Reconciliation of Number of Shares:
Particulars Shares outstanding at the beginning of the year Shares Issued during the year Shares outstanding at the end of the year	As at 31st March 2021	As at 31st March 2020
	Number of Shares Amount 2,584,160 258.42 — — 2,584,160 258.42	Number of Shares Amount 2,584,160 258.42 — — 2,584,160 258.42

2) The details of the Shareholders holding more than 5%

Particulars 1) R. B. Fitness & Trading Pvt. Ltd. No. of shares % held	As at 31st March 2021 Rupees in Lacs 1,921,570 74.36%	As at 31st March 2020 Rupees in Lacs 1,921,570 74.36%

3) Terms/rights attached to the Equity Shares

The Company has only one class of equity shares having a par value of Rs.10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution to all preferential holders. The distribution will be in proportion to the number of equity shares held by the shareholders.

104

CRAVATEX LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

NOTE 17 — OTHER EQUITY Capital Reserve Securities Premium Capital Redemption Reserve Foreign Currency Translation Reserve Amalgamation Adjustment Deficit Account General reserve Export Profit Reserve Retained Earnings Total Particulars	240.76 1,687.71 211.23 246.92 (5306.74) 1,843.64 6.03 (2016.20) (3086.65) As at 31st March 2021 Rupees in Lacs	240.76 1,402.59 211.23 120.92 (5306.74) 1,867.10 6.03 1,097.34 (360.77) As at 31st March 2020 Rupees in Lacs

Description of nature and purpose of each reserve

Capital Reserve

Capital reserve represents amount received from Government of Karnataka.

Securities Premium

The amount received in excess of face value of the equity and compulsory convertible preference shares is recognised in Securities Premium.

Capital Redemption Reserve

Capital Redemption Reserve has been created out of free reserves of the Company on account of redemption of preference shares.

Foreign Currency Translation Reserve

For the purpose of consolidation of subsidiaries with the financial statement of the holding company, income and expenses are translated at average rates and the assets and liabilities are stated at closing rate. Use of such different rates for translation gives rise to exchange difference which is accumulated in Foreign Currency Translation Reserve. The movement in this reserve is due to fluctuation in exchange rates of currencies.

General Reserve

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. There is no policy of regular transfer.

Export Profit Reserve

Export profit reserve represents the amount earned from export sales and is to be utilised for the purpose of exports.

Retained Earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.

105

69TH ANNUAL REPORT

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

NOTE 18 — NON CURRENT FINANCIAL BORROWINGS (a) Secured Term Loans from Bank (b) Unsecured 75,75,000 (2020 — 75,75,000), 4 % Non-convertible Cumulative Redeemable Preference shares of Rs.10 each 18,00,000 (2020 — 18,00,000) Optionally Convertible Debentures (OCD) 57,00,000 (2020 — 57,00,000) 0.01% Compulsory Convertible Preference Shares (CCPS) Total Particulars	10.00 398.83 2,228.58 5,779.33 8,416.74 As at 31st March 2021 Rupees in Lacs	— 388.88 1,910.00 6,030.00 8,328.88 As at 31st March 2020 Rupees in Lacs

Secured:

• Group has availed Working Capital Term Loan from HDFC Bank under Emergency Credit Line Guarantee Scheme (ECLGS), Ministry of Finance.

• Total sanction under ECLGS is of INR 1,083 lakhs out of which INR 10 lakhs has been disbursed during FY 2020-21.

• Tenor of the loan is 5 years with 1 year moratorium period

• The above facility from HDFC Bank is secured through

• (a) This facility is covered by 100% guarantee from Ministry of Finance, Govt of India.

• (b) Second pari-passu charge as follows:

• (1) by way of hypothecation on entire current assets of the Company including stock and book debts, present and future.

• (2) by way of equitable mortgage of property of Cravatex Limited (Holding Company) at Nariman point, Mumbai.

• (3) by way of hypothecation on entire movable fixed assets of the Company, both present and future except vehicles.

The above borrowings carry a rate of interest ranging between 8% to 9%.

Unsecured:

Terms/rights attached to the 4% Non-convertible Cumulative Redeemable Preference shares of Rs.10 each

The Company has issued 4% Non-convertible redeemable preference share having a face value of Rs.10/- per each redeemable after a period of 20 years. Preference shareholders shall rank for dividend in priority to the equity shares. The Preference shareholder shall be eligible for 4% fixed cumulative preferential dividend.

Terms of Optionally Convertible Debentures (OCD):

• The Company has issued following Unsecured Optionally Convertible Debentures. Debentures are alloted on 27 March, 2017.

• The OCDs shall be convertible to any time at the option of the holder into such number of fully paid Shares (Base Number) as represents the proportion of the equity share capital of the Company (on a Fully Diluted Basis, post conversion of the CCPS and OCDs) obtained by dividing Rs. 1,800 lacs by the Adjusted Post Money Valuation.

• Under all circumstances, the aggregate number of Shares into which the OCD shall convert shall not exceed 16,79,799 Equity Shares.

• The OCDs shall be converted at any time at the option of the Investor.

• The OCD has been fair valued through profit and loss using Black and Scholes Model - Option Pricing Method at Rs. 2,229 lakhs (31 March 2020 - Rs. 1,910 lakhs)

106

CRAVATEX LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

Terms of 0.001% Compulsory Convertible Preference shares of Rs.100 each (CCPS):

• The Company has only one class of Preference shares i.e. Compulsory convertible preference share having a face value of Rs.100/- per each.

• The CCPS shall be convertible into Equity Shares at any time at the option of their holder.

• The CCPS shall convert into Equity Shares of the Company as follows:

• Unless otherwise provided hereunder the CCPS shall convert into the number of Equity Shares (Base Common Shares) which represents the proportion of the share capital of the Company (on a Fully Diluted Basis, post conversion of CCPS and OCDs) obtained by dividing Rs. 5,700 lacs by Adjusted Post Money Valuation;

• Under all circumstances, the aggregate number of Shares into which the CCPS shall convert shall not exceed 53,19,364 Equity Shares.

• The CCPS has been fair valued through profit and loss using Black and Scholes Model - Option Pricing Method at Rs. 5,779 lakhs (31 March 2020 - Rs. 6,030 lakhs)

NOTE 19 — OTHER NON-CURRENT FINANCIAL LIABILITIES

Particulars Security deposits Received Lease Liability Total NOTE 20 — NON-CURRENT PROVISIONS Provision for employee benefits: Gratuity Compensated absences Total NOTE 21 — DEFERRED TAX LIABILITIES (NET) Deferred tax liabilities: Others Total NOTE 22 — OTHER NON-CURRENT LIABILITIES Security Deposits from Dealers & Distributors Deferred Income Total NOTE 23 — CURRENT FINANCIAL BORROWINGS From Banks Current maturities of long-term borrowing Total	As at 31st March 2021 Rupees in Lacs 121.62 2,545.04 2,666.66 99.71 104.53 204.24 82.97 82.97 453.18 325.22 778.40 7,049.41 — 7,049.41	As at 31st March 2020 Rupees in Lacs 28.20 3,406.68 3,434.88 105.55 113.99 219.54 119.55 119.55 392.34 328.94 721.28 7,732.49 9.92 7,742.40

107

69TH ANNUAL REPORT

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

From Banks:

• A) The Overdraft and Working Capital Demand Loan facilities taken by the Company are availed from HDFC Bank and have been secured by:

I) First pari-passu charge as follows:

• 1) by way of hypothecation on entire current assets of the Company including stock and book debts, present and future.

• 2) by way of equitable mortgage of property of Cravatex Limited (Holding Company) at Nariman point, Mumbai.

• 3) by way of hypothecation on entire movable fixed assets of the Company, both present and future except vehicles.

II) Second pari-passu charge on commercial Office located at 4th Floor Sahas, Prabhadevi, Mumbai of Cravatex Limited (Holding Company).

• B) The Overdraft and Working Capital Demand Loan facilities taken by the Company are availed from Saraswat Co-operative Bank Ltd (Scheduled Bank) and have been secured by:

I) First pari-passu charge as follows:

• 1) by way of hypothecation on the entire current assets of the Company including stock and book debts, present and future.

• 2) by way of equitable mortgage of property of Proline India Limited at No. 70, JC Industrial Estate, Kanakapura Road, Bangalore and Shop No. 768 & 769, at Spencer Plaza, Anna Salai, Chennai.

• 3) by way of Fixed deposit of Rs 52.79 lacs in the name of M/s Proline Exports Pvt. Ltd. and Corporate Guarantee from M/ s Proline Exports Pvt. Ltd for Rs 500 lacs.

• 4) by way of hypothecation of furniture and fixtures and other fixed assets of the Company at various locations.

• The above borrowings carry a rate of interest ranging between 10% to 12%.

Current Maturities of Long Term Borrowings:

Secured by first charge on the lease rentals from Company’s property at Nariman point, Mumbai and mortgage extended over the company’s property at Nariman point, Mumbai.

Rate of interest is 11.25% p.a. (linked to 1 year MCLR)

Repayable in 34 monthly installment starting from July 2017 with last installment payable in April 2020.

108

CRAVATEX LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

Particulars NOTE 24 — TRADE PAYABLE Due to Micro and small enterprises Due to Creditors other than Micro and small enterprises Total NOTE 25 — OTHER CURRENT FINANCIAL LIABILITIES Security deposits Received For rental of property Employee benefits payable Lease Liability Other liabilities Unpaid Dividend Interest accrued but not due Total NOTE 26 — OTHER CURRENT LIABILITIES Advances received against supplies and services Unearned revenue Deferred Income Others (including statutory dues) Total NOTE 27 — CURRENT PROVISIONS Gratuity Compensated absences Provision for Sales Return Provision for warranty Provision for tax Total NOTE 28 — REVENUE FROM OPERATIONS Sale of products Sale of services Other operating income Total	As at 31st March 2021 Rupees in Lacs 520.58 1,776.53 2,297.11 100.90 189.94 700.75 2,555.36 5.20 30.30 3,582.45 471.91 65.48 19.03 7,547.47 8,103.89 85.43 21.40 326.26 25.90 173.82 632.81 52,970.38 207.78 9.51 53,187.67	As at 31st March 2020 Rupees in Lacs — 4,207.35 4,207.35 223.78 133.03 714.29 2,161.87 6.90 41.01 3,280.88 409.55 166.17 7.54 8,246.41 8,829.67 117.19 29.82 91.00 23.22 37.83 299.06 85,962.83 497.13 4.77 86,464.73

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69TH ANNUAL REPORT

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

NOTE 29 — OTHER INCOME Interest Income Interest income on fair valuation Dividend Income License fees (Rental income) Profit on sale of investments Mark to Market loss on outstanding derivative contracts Miscellaneous Income Total NOTE 30 — CHANGE IN INVENTORIES OF STOCK-IN-TRADE Opening stock Stock-in-trade (including goods in transit) Stores and spares Closing stock Stock-in-trade (including goods in transit) Stores and spares Increase/(decrease) in stock NOTE 31 — EMPLOYEE BENEFITS EXPENSE Salaries and wages Contributions to: Provident, Family Pension and other Funds Staff welfare expenses Total NOTE 32 — FINANCE COST Interest expense on borrowings & Others Other Interest Expenses Total Particulars	44.75 77.29 6.48 314.67 34.12 0.75 953.27 1,431.32 8,020.17 141.16 (8,413.04) (87.35) (339.06) 6,199.03 191.66 25.64 6,416.33 1,342.24 89.90 1,432.14 As at 31st March 2021 Rupees in Lacs	18.75 94.71 7.77 314.74 0.54 31.59 57.68 525.79 9,249.28 164.45 (8,020.18) (141.16) 1,252.40 6,836.75 201.19 60.92 7,098.86 1,214.97 105.13 1,320.10 As at 31st March 2020 Rupees in Lacs

110

CRAVATEX LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

NOTE 33 — OTHER EXPENSES Stores, spares and packing materials consumed Electricity charges Warehouse expenses Rent Insurance Rates and taxes Printing and stationery Communication expenses Repairs and maintenance Advertisement and publicity Sublicence fees Travelling and conveyance Commission and brokerage Transportation and octroi charges Legal and Professional Charges Bank Charges not related to borrrowings Fair value loss on debt instruments measured at FVTPL Directors fees Fair Valuation of Debt Instruments Payment to auditors Bad Debts Provision for Bad & Dobutful Debts Loss on sale of Property, Plant and Equipment Foreign exchange fluctuation (Net) Charity & Donation (CSR Activities) Other expenses Total PAYMENT TO AUDITORS Statutory Audit fees Tax Audit Fees Others Total Particulars	32.08 72.73 891.33 722.91 126.91 68.81 30.36 137.62 129.69 3,030.78 1,360.26 188.80 1,212.06 407.23 1,463.85 41.99 67.90 11.00 — 74.92 7.13 628.99 89.66 2.76 — 763.83 11,563.60 72.92 — 2.00 74.92 As at 31st March 2021 Rupees in Lacs	41.91 108.09 979.67 817.86 122.29 69.00 60.57 106.02 160.45 4,213.56 2,502.54 769.39 1,937.28 570.95 2,522.81 73.83 — 13.60 29.00 51.50 77.38 140.79 — 148.00 8.39 1,225.71 16,750.57 48.14 0.75 2.61 51.50 As at 31st March 2020 Rupees in Lacs

111

69TH ANNUAL REPORT

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

NOTE 34 — CONTINGENT LIABILITIES (TO THE EXTENT NOT PROVIDED FOR) A. Other money for which the Company is contingently liable 1) Demands under Wealth Tax Act 1 2) Demands under Income Tax Act 2, 3 & 4 3) Demands under VAT/CST Act 5 & 6 4) Demands under Customs Act 7 & 8 Total Sr. No. Particulars Reference No	51.25 25.17 202.73 133.50 412.65 As at 31st March 2021 Rupees in Lacs	51.25 25.43 — 133.50 210.18 As at 31st March 2020 Rupees in Lacs

Notes:

1. Demands for Wealth Tax for the assessment years 1997-98 & 1998-99 amounting to Rs.51,25,378 was raised by the Tax authorities in earlier years which had been disputed by the Company and appeals filed with the Hon. High Court, Mumbai. The Company however deposited the demanded amounts in full with the tax authorities.

2. For the assessment years 2000-2001, 2002-2003 and 2003-2004 the Income-tax Appellate Tribunal had given relief of Rs.8,74,254 which had been accounted for in an earlier year. The tax authorities had subsequently filed an appeal with the Hon. High Court, Mumbai against the relief of Rs.8,74,254. The matter was set aside by Hon. High Court, in an earlier year and the matter was restored to the Tribunal for disposal. The matter is still pending with the tax authorities.

3. The tax authorities had raised a demand for the assessment year 2013-14 u/s 143 (3) for Rs.16,43,120. The company has disputed this demand and has filed an appeal with the Commissioner (Appeals) of Income- tax Mumbai against this demand.

4. The tax authorities had raised a demand of Rs.25,163/- for the assessment year 2011-12 as per order u/s 201(1)/(1A) dtd. 29.03.2018 on account of short deduction of TDS & interest thereon. The company had disputed this demand and had filed an appeal with the Commissioner (Appeals) of Income- tax Mumbai against this demand. A favorable order has been received against this and the demand stands deleted.

5. VAT assessment order of Karnatak state for FY 2015-16 was passed raising demand totalling to Rs.15,35,487/- (TaxRs.7,59,150/-, Interest-Rs.7,00,422/-, Penalty Rs.75,915/-).The Company has filed an appeal against this order and paid full amount of Rs.15,35,487/-

6. CST assessment order of Delhi location of the company for FY 2016-17 was passed raising demand totalling to Rs.1,87,36,493/ - (Tax-Rs.1,13,64,635/-, Interest-Rs.73,71,858/-).The Conpany has filed an appeal against this order.

7. Demand of Rs.13,50,000 raised in an earlier year by the customs authorities for goods imported had been disputed by the Company against which the full amount had been deposited under protest. The matter is still pending with the Customs authorities.

8. Bond for Rs.1.20 crore executed with the Customs authorities for demand raised by the authorities in an earlier year which had been disputed and challenged by the Company. This Bond is to remain in force till finalisation of the value by the Customs authorities of the goods imported by the Company.

9. The Hon’ble Supreme Court of India (“SC”) by their order dated February 28, 2019, in the case of Surya Roshni Limited & others v/sEPFO, set out the principles based on which allowances paid to the employees should be identified for inclusion in basic wages for the purposes of computation of Provident Fund contribution. Subsequently, a review petition against this decision has been filed and is pending before the SC for disposal.

In view of the management, the liability for the period from date of the SC order to 31 March 2019 is not significant. Further, pending decision on the subject review petition and directions from the EPFO, the impact for the past period, if any, is not ascertainable and consequently no effect has been given in the accounts.

NOTE 35 — GUARANTEES/COMMITMENTS

• a. The Subsidiary Company has issued corporate guarantees to the extent of INR 19 lakhs (31 March 2020 - INR 25 lakhs)

• b. Letter of credit outstanding to the extent of INR 1,224 lakhs (31 March 2020 - INR 1,748 lakhs)

112

CRAVATEX LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

Particulars NOTE 36 — INCOME TAXES A. Tax expense recognised in profit and loss Current tax Current tax Excess Tax Provision for Earlier years Deferred Tax (net) Deferred tax (credit) / charge Tax expense for the year Particulars B. Reconciliation of Effective Tax Rate: Profit before tax Applicable Tax Rate Income tax expense calculated at above rate Tax effect of profit arising to subsidiary company Effect of deductible / non-deductible expense Adjustments for current tax of prior period Income tax expense recognised in profit and loss	For the year 31st March 2021 Rs. in lacs 445.04 (319.76) (39.50) 85.78 Year ended 31st March 2021 Rs. in lacs (2,975.28) 25.71% — 282.04 123.50 (319.76) 85.78	Year ended 31st March 2020 Rs. in lacs 587.01 (336.68) (21.39) 228.94 Year ended 31st March 2020 Rs. in lacs (242.53) 25.71% — 329.86 235.76 (336.68) 228.94

NOTE 37 — MICRO AND SMALL ENTERPRISES

Under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) which came into force from 2 October 2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises.

Particulars Principal amount and interest due thereon remaining unpaid to any supplier as at the year end Amount of interest paid by the Company in terms of section 16 of the Micro, Small and Medium Enterprises Development Act, 2006 (‘MSMED Act’), along with the amount of the payment made to the supplier beyond the appointed day during the accounting year Amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under the MSMED Act Amount of interest accrued and remaining unpaid at the end of the accounting year	31st March 2021 Rs. in lacs 520.58 — 10.27 10.27	31 March 2020 Rs. in lacs — — — —

There is no principal amount and interest overdue to Micro and Small Enterprises. During the year no interest has been paid to such parties. This information has been determined to the extent such parties have been identified on the basis of information available with the Company and the same has been relied upon by the auditors.

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69TH ANNUAL REPORT

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

NOTE 38 — EMPLOYEE BENEFITS

a. Defined Benefit Plans:

Gratuity:

The gratuity payable to employees is based on the employee’s service and last drawn salary at the time of leaving the services of the Group and is in accordance with the rules of the Company for payment of gratuity.

Inherent Risk on above:

The plan is defined in nature which is sponsored by the Group and hence it underwrites all the risks pertaining to the plan. In particular, this exposes the Group to actuarial risk such as adverse salary growth, change in demographic experience, inadequate return on underlying plan assets. This may result in an increase in cost of providing these benefits to the employees in future. Since the benefits are lump sum in nature, the plan is not subject to any longevity risk.

Particulars (i) Change in Defined Benefit Obligation Balance at the beginning of the year Adjustment of: Current Service Cost Benefit paid directly by the employer Liability transferred in/(out) Past Service cost Interest Cost Actuarial (gains)/losses recognised in Other Comprehensive Income: — Change in Financial Assumptions — Change in Demographic Assumptions — Experience Changes Benefits Paid Balance at the end of the year (ii) Change in Fair value of assets Balance at the beginning of the year Assets transferred in/(out) Expected Return on Plan Assets excluding interest income Interest Income Re-measurements due to: Actual Return on Plan Assets less interest on Plan Assets Employer contributions Benefits payments from plan assets Balance at the end of the year (iii) Net Asset / (Liability) recognized in the Balance Sheet Present value of the funded defined benefit obligation at the end of the period Fair Value of Plan Assets Net Asset / (Liability) in the Balance Sheet	For the year 31st March 2021 Gratuity Rs. in lacs 521.60 47.14 (136.56) — — 35.01 3.17 — 28.66 (114.88) 384.15 298.86 — (16.88) 19.81 — — (114.88) 199.00 (384.15) 199.00 (185.15)	For the year 31st March 2020 Gratuity Rs. in lacs 453.94 39.76 (1.94) — — 33.82 10.66 — 0.08 (14.72) 521.60 285.14 — (2.53) 20.97 — — (14.72) 298.86 (521.60) 298.86 (222.74)

114

CRAVATEX LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

(iv) Expenses recognized in the Statement of Profit & Loss Current Service Cost Net Interest Cost Past Service Cost Amount charged to the Statement of Profit and Loss (v) Re-measurements recognized in Other Comprehensive Income (OCI): Changes in Financial Assumptions Changes in Demographic Assumptions Experience Adjustments Actual return on Plan assets less interest on plan assets Amount recognized in Other Comprehensive Income (OCI) (vi) Maturity Profile of Defined Benefit Obligation: Within the next 12 months Between 1 and 5 years Between 6 and 10 years 11 Years and above (vii) Sensitivity analysis for significant assumptions: Increase/(Decrease) on present value of defined benefits obligation at the end of the year 1% increase in discount rate 1% decrease in discount rate 1% increase in salary escalation rate 1% decrease in salary escalation rate 1% increase in employee turnover rate 1% decrease in employee turnover rate The major categories of plan assets as a percentage of total plan: Insurer Managed Funds Actuarial Assumptions: Discount Rate (p.a.) Expected Return on Plan Assets (p.a.) Turnover Rate Mortality tables Salary Escalation Rate (p.a.) Retirement age Weighted Average duration of Defined benefit obligation (years) Particulars*	47.42 14.91 — 62.33 3.01 — 28.82 16.88 48.72 50.95 118.88 189.17 299.75 384.15 (23.97) 27.23 26.24 (20.83) 0.52 (0.65) 199.00 7% 7% 20% and 7% Indian Assured Lives Mortality (2006-08) 6.00% 60 and 61 8 For the year 31st March 2021 Gratuity Rs. in lacs	39.29 24.27 — 63.56 9.27 — 1.27 2.52 13.06 44.09 97.50 169.45 285.19 521.60 (21.74) 24.81 24.23 (21.69) 0.65 (0.80) 298.86 7% 7% 20% and 7% Indian Assured Lives Mortality (2006-08) 6.00% 60 and 65 8 For the year 31st March 2020 Gratuity Rs. in lacs

• The Sensitivity Analysis have been calculated to show the movement in defined benefit obligation in isolation and assuming there are no other changes in market conditions at the accounting date. There have been no changes from the previous periods in the methods and assumptions used in preparing the sensitivity analysis.

The sensitivity analysis presented above may not be representative of the actual change in the projected benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

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69TH ANNUAL REPORT

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

Furthermore, in presenting the above sensitivity analysis, the present value of the projected benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the projected benefit obligation as recognised in the balance sheet.

Basis used to determine Expected Rate of Return on Plan Assets: The overall expected rate of return on assets is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

Salary Escalation Rate: The past experience and industry practice considering promotion and demand and supply of employees.

Asset Liability matching strategy: The money contributed by the Group to the Gratuity fund to finance the liabilities of the plan has to be invested.

The trustees of the plan have outsourced the investment management of the fund to an insurance Company. The insurance Company in turn manages these funds as per the mandate provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance regulations. Due to the restrictions in the type of investments that can be held by the fund, it is not possible to explicitly follow an asset liability matching strategy.

There is no compulsion on the part of the Group to fully prefund the liability of the Plan. The Group’s philosophy is to fund these benefits based on its own liquidity and the level of underfunding of the plan.

This Note of defined benefit plan includes disclosures of liabilities pertaining to Holding Company & it’s Indian Subsidiary.

b. Defined Contribution Plans:

Amount recognized as an expense and included in Note 31 under the head “Contribution to Provident and other Funds” of Statement of Profit and Loss is :

Particulars Provident, Family Pension and other Funds Employees State Insurance Scheme Total	31st March 2021 Rs. in lacs 186.17 5.49 191.66	31st March 2020 Rs. in lacs 192.14 9.24 201.38

Compensated Absences:

The liability towards compensated absences for the year ended 31 March 2021 is based on actuarial valuation carried out by using Projected Accured Benefit Method amounting to Rs. 125.93 lacs (31 March 2020 - Rs.143.81 lacs).

a. Financial assumptions:

Particulars Discount Rate (p.a.) Salary Escalation Rate (p.a.) b. Demographic assumptions: Mortality tables Turnover Rate Leave Availment ratio	31st March 2021 Rs. in lacs 6.57% 6.00% Indian Assured Lives Mortality (2006-08) 20% and 7% 2%	31st March 2020 Rs. in lacs 6.70% 6.00% Indian Assured Lives Mortality (2006-08) 20% and 7% 2%

116

CRAVATEX LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

NOTE 39 — RELATED PARTY DISCLOSURES

(A) List of Related Parties

Name of Related Parties

R.B Fitness & Trading Private Limited

Nature of Relationship Holding Company

(B) List of Related Parties where control exists:

Name of Related Parties

SD Enterprises Proline India Limited (Now Merged with Cravatex Brands Ltd) Proline Exports Private Limited Tecfin Consultancy Services LLP Crav Apparels Private Limited Rudy and Sons

Nature of Relationship Director’s relative interest

Enterprises over which Directors are able to exercise significant influence

(C) Key Management Personnel:

Name of Related Parties

Mr. Rajesh Batra Mr. Rohan Batra

Mr. Rajiv Batra Mr. S.D. Israni Ms. Pheroza Jimmy Bilimoria Mr. N. Santhanam Mr. Sandeep Mukim Mr. N.R. Mahalingam Ms. Rupa Vora Mr. Sumit Nindrajog Mr. Niten Lalpuria Mr. Anuj Rakhiyan Mr. Sanjay Mariwala Mr. P. Rudran Mr. Divakar Kamath Mr. Ankur Sharma Mr. H. S. Devaprasad Mr. Sudhanshu Namdeo Ms. Apurva Parulekar

Nature of Relationship

Chairman & Managing Director Director (with effect from 01.04.2020) Managing Director of Subsidiary Company Director of Wholly Owned Subsidiary Company Independent Director Independent Director Independent Director Director of Subsidiary Company Managing Director for Proline India Limited (Merged entity) Director for Proline India Limited (Merged entity) Director of Subsidiary Company Director of Subsidiary Company Director of Subsidiary Company Director of Subsidiary Company Director of Subsidiary Company Director of Wholly Owned Subsidiary Company Executive Director & Chief Financial Officer Chief Financial Officer of Subsidiary Copmany Chief Financial Officer for Proline India Limited (Merged entity) Company Secretary Company Secretary of Subsidiary Company

Relatives of KMP:

Mrs. Amrita Mukim Mrs. Aparna Devaprasad

Wife of Mr. Sandeep Mukim Wife of Mr. H S Devaprasad

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69TH ANNUAL REPORT

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

(D) The following transactions were carried out with the related parties in the ordinary course of business:

Name of Related Parties Combined Office Administrative Charges Tecfin Consultancy Services LLP Reimbursement of expenses Mr. Rajesh Batra (for Proline India Limited) Conslutancy charges Mrs. Amrita Mukim (relative of KMP) Mrs. Aparna Devaprasad (relative of KMP) Advertisement Ms. Kopal Mukim (relative of KMP) Purchase of stock in trade Crav Apparels Private Limited Sale of stock in trade Crav Apparels Private Limited Fees, expenses and Subsistence Rudy & Company Director Sitting Fee (E) Outstanding balances: Name of Related Parties Trade Payables — Crav Apparels Private Limited (F) Compensation of Key Management Personnel of the Company: Short Term Employee Benefits Other Long Terms Benefits Total Compensation	31 March 2021 Rs. in lacs 4.63 — 17.04 16.41 — 34.16 125.33 146.02 14.30 31 March 2021 Rs. in lacs 93.49 873.85 18.61 892.45	31 March 2020 Rs. in lacs — 0.63 17.04 17.40 18.00 156.14 39.60 134.87 17.30 31 March 2020 Rs. in lacs 158.12 1,258.31 44.85 1,303.15

Terms and condition of transaction with related parties:

All related party transactions entered during the year are in ordinary course of the business and are on arm’s length basis.

118

CRAVATEX LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

NOTE 40 — FINANICAL INSTRUMENTS

a. Classification of Financial Assets and Liabilities:

Particulars Financial assets at Amortized cost: Loans (Non Current) Trade Receivables Cash and Cash Equivalents Other Bank Balances Other Non Current Financial Assets Other Current Financial Assets Financial assets at Fair Value through P&L: Investment (Current) Total Financial liabilities at Amortized cost: Trade Payables Cash Credits/Working Capital Borrowings Other Current Financial Liabilities Non-Current Borrowings Other Non Current Financial Liabilities 75,75,000 (2019 – 85,17,500;), 4% Non-convertible Cumulative Redeemable Preference Shares – Level 3 Financial liabilities at FVTPL: Borrowings – Non-current Total	As at 31 March 2021 Rs. in lacs 577.27 14,305.11 3,524.69 82.62 29.08 759.91 1,479.38 20,758.06 2,297.11 7,049.41 3,582.45 10.00 2,666.66 398.83 8,007.90 24,012.37	As at 31 March 2020 Rs. in lacs 595.82 16,942.71 3,922.78 1,008.77 30.34 454.57 2,455.87 25,410.85 4,207.35 7,742.40 3,280.88 — 3,434.88 388.88 7,940.00 26,994.40

Carrying amount of Investment, Trade Receivables, Cash and Cash Equivalent, Bank balances, Other financial Assets, Trade payables and Other financial liabilities as at 31st March, 2021 & 31st March, 2020 approximate the Fair Value because of their short term nature. Difference between carrying amount and fair values of bank deposits, other financial assets, other financial liabilities and borrowings subsequenty measured at amortised cost is not significant each of year presented.

NOTE 41 — FAIR VALUE MEASUREMENT

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Group has established the following fair value hierarchy that categorizes the values into 3 levels. The inputs to valuation techniques used to measure fair value of financial instruments are:

Level 1: This hierarchy uses quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on Group specific estimates.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.

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69TH ANNUAL REPORT

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

Financial Asset at Fair Value through profit or loss: Current Investments – Level 1 Total Financial Liabilities at Fair Value through profit or loss: Optionally Convertible Debentures (OCD) – Level 3 Compulsory Convertible Preference Shares (CCPS) – Level 3 Total Particulars	1,479.38 1,479.38 2,228.58 5,779.33 8,007.90 As at 31st March 2021 Rs. in lacs	2,455.87 2,455.87 1,910.00 6,030.00 7,940.00 As at 31st March 2020 Rs. in lacs

The management has assessed that cash and bank balances, trade payables, and other financial asset and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The following methods and assumptions were used to estimate the fair values:

The fair values of the quoted units of mutual fund schemes are based on net asset value at the reporting date.

The fair value of Optionally Convertible Debentures (OCD) and Compulsory Convertible Preference Shares (CCPS) is determined using Black and Scholes Option Pricing Method.

The fair value of forward foreign exchange contracts is calculated as the present value determined using forward exchange rates and interest rate curve of the respective currencies.

The significant unobservable inputs used in the fair value measurement of the fair value hierarchy together with a quantitative sensitivity analysis as at 31 March 2021 and 31 March 2020 are as shown below:

Description of significant unobservable inputs to valuation:

Particulars	Valuation Technique	Significant unobservable inputs
Optionally Convertible Debentures (OCD)	Option Pricing Method	Equity value of the Subsidiary
Compulsory Convertible Preference Shares (CCPS)	Option Pricing Method	Equity value of the Subsidiary

NOTE 42 — FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s principal financial liabilities comprise of trade payables, borrowings and other payables. The main purpose of these financial liabilities is to finance and support the Company’s operations. The Company’s principal financial assets include Investments, Loans, Trade receivables and Other receivables, Cash and Cash Equivalents, Other Bank Balances that directly derive from its operations.

The Group’s activites are exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Company’s senior management ensures that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Group’s policies and risk objectives.

120

CRAVATEX LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

A) Market Risk:

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument.

The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and borrowings.

a) Foreign Currency Risk:

Foreign currency risk is the risk of impact related to fair value or future cash flows of an exposure in foreign currency, which fluctuate due to changes in foreign exchange rates. The Group exposure to the risk of changes in foreign exchange rates relates primarily to the import of fila and fitness and exports of FILA and fitness and exports of FILA.

When a derivative is entered into for the purpose of being a hedge, the Group negotiates the terms of those derivatives to match the terms of the hedged exposure.

The Group evaluates exchange rate exposure arising from foreign currency transactions. The Group follows established risk management policies and standard operating procedures. It uses derivative instruments like forwards contracts to hedge exposure to foreign currency risk.

Outstanding Foreign Currency Exposure (gross) Trade Receivables USD Trade Payables USD CNY	As at 31st March 2021 Rs. in lacs 0.08 7.35 —	As at 31st March 2020 Rs. in lacs — 23.65 —

Foreign Currency Sensitivity on unhedged exposure:

1% increase in foreign exchange rate will have the following impact on loss before tax:

Particulars USD CNY	As at 31st March 2021 Rs. in lacs 5.27 —	As at 31st March 2020 Rs. in lacs 17.83 —

Note: If the rate is decreased by 100 bps loss will decrease by an equal amount.

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NOTES — Contd.

b) Interest rate risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group exposure to the risk of changes in market interest rates relates primarily to the Group borrowing with floating interest rates. The Group constantly monitors the credit markets and rebalances its financing strategies to achieve an optimal maturity profile and financing cost.

Particulars (a) Fixed Rate Borrowings (b) Fluctuating Rate Borrowings Interest rate sensitivities for unhedged exposure (impact on increase in 100 bps): Borrowings	As at 31st March 2021 Rs. in lacs 7,049.41 — 70.49	As at 31st March 2020 Rs. in lacs 7,742.40 — 77.42

Note: If the rate is decreased by 100 bps profit will increase by an equal amount.

B) Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operarting (primarily Trade Receivables), investing and financing activities including Mutual Fund Investments, Investment in Debt Securities, Bank Balance, Deposits with Bank, Security Deposits, Loans to Employees and other financial instruments.

Trade Receivables:

Trade receivables are consisting of a large number of customers. The Group has credit evaluation policy for each customer and based on the evaluation credit limit of each customer is defined.

Trade receivables are typically unsecured and are derived from revenue earned from customers. Credit risk has always been managed by the Group through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to which the Group grants credit terms in the normal course of business. The Group allows credit period ranging from 60 days to 180 days, subject to reasonableness of the receivable. There is no concentration of cusotmers and receivable amount.

	Rs. in lacs
Particulars	Amount
Movement of allowance for doubtful debts
Balance as 31 March 2019	11.81
Add: Provisions	140.79
Balance as 31 March 2020	152.60
Add: Provisions	628.99
Balance as 31 March 2021	781.58

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CRAVATEX LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

Investments, Cash and Cash Equivalent and Bank Deposit:

Credit Risk on cash and cash equivalent, deposits with the banks/financial institutions is generally low as the said deposits have been made with the banks/financial institutions who have been assigned high credit rating by international and domestic rating agencies.

Investments of surplus funds are made only based on Investment Policy of the Group. Investments primarily include investment in units of mutual funds. These Mutual Funds and Counterparties have low credit risk.

C) Liquidity Risk:

Liquidity risk is defined as the risk that the Group will not be able to settle or meet its obligations on time or at reasonable price. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of credit facilities to meet obligations when due. The Group’s treasury team is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Group’s liquidity position through rolling forecasts on the basis of expected cash flows.

The table below provides details regarding the remaining contractual maturities of financial liabilities and investments at the reporting date based on contractual undiscounted payments.

date based on contractual undiscounted payments.
					Rs. in lacs
	Less than	1	to 5	More than
	1 Year	Years		5 Years	Total
As at 31st March 2021
Trade Payables	2,297.11		—	—	2,297.11
Borrowings (including current maturities of long term debt)	7,049.41		—	8,416.74	15,466.15
Other Financial Liabilities	3,582.45	2,666.66		—	6,249.11
Investments	1,479.38		—	—	1,479.38
As at 31st March 2020
Trade Payables	4,207.35		—	—	4,207.35
Borrowings (including current maturities of long term debt)	7,742.40		—	8,328.88	16,071.29
Other Financial Liabilities	3,280.88	3,434.88		—	6,715.76
Investments	2,455.87		—	—	2,455.87

NOTE 43 — CAPITAL MANAGEMENT

The Group’s objectives when managing capital are to

• (a) maximise shareholder value and provide benefits to other stakeholders and

• (b) maintain an optimal capital structure to reduce the cost of capital.

For the purposes of the Group’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders.

The Group monitors capital using debt-equity ratio, which is total debt and bank deposits less investments divided by total equity.

Particulars A. Total Debt B. Cash and Marketable securities C. Net Debt (A-B) D. Total Equity Debt to Equity (Net) (C/D)	As at 31st March 2021 Rs. in lacs 15,466.15 5,086.69 10,379.45 (2,828.24) (3.67)	As at 31st March 2020 Rs. in lacs 16,071.29 7,387.41 8,683.87 (102.35) (84.84)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

In addition the Group has financial covenants relating to the borrowing facilities that it has taken from the lenders like interest coverage service ratio, Debt to EBITDA, etc. which is maintained by the Company.

NOTE 44 — LEASES

The Group has taken on lease retail stores, office premises and warehouses. The lease typically run for the period between 12 month to 60 months . Previously these leases were classified as operating leases under Ind AS 17.

Information about leases for which the company is lessee is presented below:

Particulars (A) Right of use assets Opening Balance Additions Disposal / Derecognized during the year Closing Balance (B) Accumulated depreciation Opening Balance Depreciation expense Disposal / Derecognized during the year Opening Balance (C) Lease liabilities Opening Balance Addition Accredition of interest Payments Adjustments for Disposals Opening Balance Current Non-current (D) Amounts recognised in profit and loss Depreciation expense of right-of-use assets Interest expense on lease liabilities Total	As at 31st March 2021 Rs. in lacs 3,908.15 112.70 973.48 3,047.37 717.70 892.16 — 1,609.87 4,120.97 123.64 424.27 1,071.60 (351.78) 3,245.49 700.75 2,545.04 892.16 424.27 1,316.43	As at 31st March 2020 Rs. in lacs 2,070.79 1,837.36 — 3,908.15 — 717.70 — 717.70 2,070.79 2,519.70 382.28 851.81 — 4,120.97 714.29 3,406.68 717.70 382.28 1,099.99

124

CRAVATEX LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

NOTE 45 — STATEMENT OF NET ASSETS, PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME ATTRIBUTABLE TO OWNERS AND NON-CONTROLLING INTEREST

Name of the entity	Country of incorpo- ration	% of voting power as at 31st March 2020	% of voting power as at 31st March 2019	Net Assets (Total assets minus total liabilities)	Net Assets (Total assets minus total liabilities)	Share in profit and loss	Share in profit and loss	Share in Other comprehensive income	Share in Other comprehensive income	Share in Total comprehensive income	Share in Total comprehensive income
				As % of consoli- dated net assets	Amount (Rs. in Lacs)	As % of consoli- dated net assets	Amount (Rs. in Lacs)	As % of consoli- dated other compre- hensive income	Amount (Rs. in Lacs)	As % of Total compre- hensive income	Amount (Rs. in Lacs)
1 Cravatex Ltd. 2 Cravatex Brands Ltd. 3 BB UK Ltd. 4 Total Eliminations	India India UK —	— 99.997% 100.000% —	— 99.997% 100.000% —	-136.36% 61.81% -226.86% 401.40%	3,856.48 (1,748.13) 6,416.08 (11,352.67)	-7.58% 162.62% -61.23% 6.20%	232.15 (4,977.79) 1,874.44 (189.84)	23.55% 76.45% — —	(5.32) (17.27) — —	-7.28% 160.42% -60.20% 7.06%	226.83 (4,995.06) 1,874.44 (219.87)
				100.00%	(2,828.25)	100.00%	(3,061.06)	100.00%	(22.59)	100.00%	(3,113.69)

NOTE 46 — RECENT STANDARDS

New and amended standards adopted by the Group: In the current year, the Group has applied the below amendments to Ind AS 116 that are effective for an annual period that begins on or after 1 April 2020:

The Group has adopted the amendments to Ind AS 116 for the first time in the current year. The amendments provide practical relief to lessees in accounting for rent concessions occurring as a direct consequence of COVID-19, by introducing a practical expedient to Ind AS 116. The practical expedient permits a lessee to elect not to assess whether a COVID-19-related rent concession is a lease modification. A lessee that makes this election shall account for any change in lease payments resulting from the COVID-19-related rent concession the same way it would account for the change applying Ind AS 116 if the change were not a lease modification. The practical expedient applies only to rent concessions occurring as a direct consequence of COVID19 and only if all of the following conditions are met:

• The change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;

• Any reduction in lease payments affects only payments originally due on or before 30 June 2021 (a rent concession meets this condition if it results in reduced lease payments on or before 30 June 2021 and increased lease payments that extend beyond 30 June 2021); and

• There is no substantive change to other terms and conditions of the lease. The Group has applied the practical expedient retrospectively to all eligible rent concessions and has not restated prior period figures.

There is no impact of these amendments on the Group.

New Standards or other amendments issued but not yet effective: Ministry of Corporate Affairs (“MCA”) regularly notifies new standard or amendments to the existing standards. There is no such notification which would have been applicable from April 1, 2021.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

NOTE 47 — SEGMENT INFORMATION

The Group has determined following reporting segments based on the information reviewed by the Group’s Chief Operating Decision Maker (‘CODM’)

A) Sports - Trading of footwear, apparels and accessories

B) Wellness - Gym equipments and accessories

Particulars	For the year Ended 31 March 2021	For the year Ended 31 March 2021	For the year Ended 31 March 2021	For the year Ended 31 March 2021	For the year Ended 31 March 2020	For the year Ended 31 March 2020	For the year Ended 31 March 2020	For the year Ended 31 March 2020
	Sports	Wellness	Unallocable	Total	Sports	Wellness	Unallocable	Total
Segment Revenue (Revenue from Sales, Services & Other Operating Revenue) Revenue from Sale of products Revenue from Services Other Operating Revenue Total Revenue (A) Less: Inter Segment Revenue if any (B) Total Segment Revenue (C = A-B) Segment Results (Profit / (Loss) Before Interest, Depreciation & Tax) Less: Exceptional Items Segment Results (Profit / (Loss) Before Interest, Depreciation & Tax) Less: Depreciation & Amortization Total Segment Result (D) Less: Finance Costs Add: Other Income Loss Before Tax Tax Expenses – Current Tax – Deferred Tax Charge/(Credit) — Taxes of Earlier years Profit for the year	50,785.06 — 5.35	1,954.68 207.78 4.10	230.71 — —	52,970.45 207.78 9.44	82,173.54 — —	3,549.93 497.13 4.77	239.37 — —	85,962.83 497.13 4.77
	50,790.41	2,166.55	230.71	53,187.67	82,173.54	4,051.83	239.37	86,464.73
	—	—	—	—	—	—	—	—
	50,790.41	2,166.55	230.71	53,187.67	82,173.54	4,051.83	239.37	86,464.73
	(546.76) — (546.76) (770.43)	(247.23) — (247.23) (114.59)	(436.24) — (436.24) (859.21)	(1,230.23) — (1,230.23) (1,744.23)	2,763.02 — 2,763.02 (905.04)	51.24 — 51.24 (218.83)	(764.43) — (764.43) (374.18)	2,049.83 — 2,049.83 (1,498.04)
	(1,317.19)	(361.82)	(1,295.45)	(2,974.46)	1,857.98	(167.58)	(1,138.61)	551.78
	(604.99) —	(28.27) —	(798.88) 1,431.32	(1,432.14) 1,431.32	(448.89) —	(103.51) —	(767.70) 525.79	(1,320.10) 525.79
	(1,922.18)	(390.09)	(663.01)	(2,975.28)	1,409.09	(271.09)	(1,380.53)	(242.53)
	— — —	— — —	(445.04) 39.50 319.76	(445.04) 39.50 319.76	— — —	— — —	(587.01) 21.39 336.68	(587.01) 21.39 336.68
	(1,922.18)	(390.09)	(748.79)	(3,061.06)	1,409.09	(271.09)	(1,609.47)	(471.47)

126

CRAVATEX LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

Segment Reporting Format for Business Segment as per IND AS 108

Particulars Segment Assets — Sports — Wellness Add: Unallocable Segment Assets Total Assets Segment Liabilities — Sports — Wellness Add: Unallocable Segment Liabilities Total Liabilities	As at 31st March 2021 Rs. in Lacs 34,143.48 1,442.71 2,924.30 38,510.49 17,870.09 1,241.20 14,703.38 33,814.68	As at 31st March 2020 Rs. in Lacs 37,529.48 2,418.02 4,243.02 44,190.51 19,485.19 1,876.28 15,822.02 37,183.49

The geographical information analyses the group’s revenues and non-current assets by the company’s country of domicile (i.e. India) and other countries. In presenting the geographical information, segment revenue has been based on the geographical location of customers and segment assets have been based on the geographic location of the assets.

Particulars A. Revenue from operations — Domestic — International B. Non-current assets — Domestic — International	As at 31st March 2021 Rs. in Lacs 13,084.73 40,102.94 53,187.67 8,016.29 298.52 8,314.81	As at 31st March 2020 Rs. in Lacs 23,790.22 62,674.51 86,464.73 9,746.60 367.39 10,113.99

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69TH ANNUAL REPORT

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

NOTE 48 — REVENUE FROM CONTRACT WITH CUSTOMER

A. Disaggregation of revenue

The management determines that the segment information reported under Note 47 "Segment reporting" is sufficient to meet the disclosure objective with respect to disaggregation of revenue under Ind AS 115 Revenue from contract with Customers. Hence, no seperate disclosures of disaggregated revenues are reported. Following table provides a reconciliation of revenue reported under segment information and revenue recognised in Statement of Profit and Loss as revenue from contracts with customers:

Particulars Segment revenue Adjustments Total revenue from contract with customers	Sports 50,790.41 — 50,790.41	Wellness 2,166.55 — 2,166.55	Unallocable 230.71 — 230.71	Rs. in Lacs Total 53,187.67 — 53,187.67

B. Contract balances:

The following table provides information about receivables, contract assets and contract liabilities from the contracts with customers.

Particulars Trade receivables (Refer note 9) Deferred Revenue (Refer note 26)	As at 31st March 2021 Rs. in Lacs 14,305.11 65.48	As at 31st March 2020 Rs. in Lacs 15,003.10 166.17

The contract assets primarily relate to the Company's right to consideration for work completed but not billed at the reporting date. The contract assets are transferred to receivables when the rights become unconditional. This usually occurs when the Company issues an invoice to the Customer. The contract liabilities primarily relate to the advance consideration received from the customers.

Significant changes in contract liabilities during the year:

Particulars Opening Balance of Unearned revenue Less: revenue recognised that was included in the contract liability balance at the beginning of the period Add: revenue transferred unearned revenue Closing Balance of Unearned revenue	For the year ended 31st March 2021 Rs. in Lacs 167.17 (138.83) 37.14 65.48	For the year ended 31st March 2020 Rs. in Lacs 224.17 (191.00) 134.00 167.17

C. Reconciliation the amount of revenue recognised in the statement of profit and loss with the contracted price:

Particulars Revenue as per contracted price Adjustments Sales return (Incl provision for sales return) Discounts Revenue from contract with customers	As at 31st March 2021 Rs. in Lacs 57,616.76 (2,637.49) (1,791.60) 53,187.67	As at 31st March 2020 Rs. in Lacs 93,218.06 (2,558.96) (4,194.36) 86,464.73

128

CRAVATEX LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

NOTE 49 — EARNINGS PER SHARE (EPS)

Particulars Basic / Diluted EPS (i) Net Profit / (Loss) attributable to Equity Shareholders (ii) Weighted average number of Equity Shares outstanding (Nos.) Basic / Diluted Earnings Per Share (i/ii)	For the year 31st March 2021 Rs. in Lacs (3,061.06) 2,584,160 (118.45)	For the year 31st March 2020 Rs. in Lacs (471.47) 2,584,160 (18.24)

NOTE 50 — SCHEME OF ARRANGEMENT (‘THE SCHEME’)

Merger of Proline India Limited with Cravatex Brands Limited (Subsidiary Company)

• (i) Pursuant to the scheme of Arrangement (‘the Scheme’) approved by the National Company Law Tribunal (‘the NCLT’), Mumbai Bench vide its order dated March 25 , 2021, Proline India Limited (the Merged Undertaking) sister concern of the Company, merged with the Cravatex Brands Ltd (‘Subsidiary Company) with effect from April 1, 2020 (‘the appointed date’). As per Appendix C of Ind AS 103 - Business Combinations, the financial information in the standalone financial statements of the Subsidiary Company in respect of prior periods is restated as if the business combination had occured from the beginning of the preceding period in the financial statements, irrespective of the actual date of the combination. Accordingly, business combination is accounted with effect from April 1 2019 in standalone accounts of the subsidary company as well as consolidated accounts of Cravatex Ltd (‘The Company’).

• (ii) The Merged Undertaking has its own brand namely “PROLINE” and has been engaged in retailing and trading “PROLINE” branded apparel. The merger is in-line with the Subsidiary Company’s strategy to grow the business and saving in costs of operations.

• (iii) Accounting treatment of the arrangement

Business combination is accounted for using the ‘pooling of interests’ method as per Appendix C of Ind AS 103 - Business Combinations as notified under Section 230 to 232 of the Companies Act, 2013 which involves the following:

• (a) The financial information in the financial statements in respect of prior periods is restated as if the business combination had occured from the beginning of the preceding period in the financial statements, irrespective of the actual date of the combination. Accordingly, business combinations is accounted with effect from April 1 2019.

• (b) The Subsidiary Company has recorded the asset and liabilities of the Merged Undertaking vested in it pursuant to this Scheme at the respective book values appearing in the books of the Merged Undertaking.

• (c) No adjustments are made to reflect fair values, or recognise any new assets or liabilities.

• (d) In Consideration of merger, Compulsory Convertible Prefrence shares (CCPS) are issued by the Subsidiary Company to the existing shareholders of Proline India Limited (merged entity).

• (e) The difference between the net assets of the Merged Undertaking transferred to Subsidiary Company, after making adjustment specified in (b) and (d) is recognised in ‘Other Equity’ of the Subsidiary Company.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

• (iv) Accordingly, the merger has resulted in transfer of assets and liabilities in accordance with the terms of the Scheme at the following summarised values:

Particulars ASSETS Non-Current Assets (a) Property, plant and equipment (b) Right of use Assets (c) Other intangible assets (d) Financial Assets (i) Loans (ii) Other financial assets (f) Non-current tax assets Total Non-Current Assets Current Assets (a) Inventories (b) Financial assets (i) Trade receivables (ii) Cash and cash equivalents (iii) Loans (iv) Other financial assets (c) Other current assets Total Current Assets TOTAL ASSETS EQUITY AND LIABILITIES EQUITY (a) Other Equity (b) Money received against share warrants Total Equity LIABILITIES Non-Current Liabilities (a) Financial Liabilities (i) Other financial liabilities (b) Provisions (c) Other non-current liabilities Total Non-Current Liabilities Current Liabilities (a) Financial Liabilities (i) Borrowings (ii) Trade payables: a. Due of Micro and small enterprises b. Due of creditors other than micro and small enterprises (iii) Other financial liabilities (b) Other current liabilities (c) Provisions Total Current Liabilities TOTAL EQUITY AND LIABILITIES	As at 31st March 2021 Rs. in Lacs 628.35 675.37 5.36 265.62 0.32 26.51 1,601.50 1,025.27 5,171.24 314.36 0.25 — 161.47 6,670.99 8,272.48 2,738.04 0.78 2,738.81 594.14 29.64 74.26 698.04 1,879.22 — 1,469.90 1,233.14 30.86 27.34 4,640.46 8,077.32	As at 31st March 2020 Rs. in Lacs 512.96 155.58 8.44 248.01 0.32 5.95 931.27 1,042.05 3,526.61 310.48 0.25 137.74 28.82 5,045.94 5,977.21 2,361.65 1.00 2,362.65 144.47 28.69 72.26 245.42 1,721.65 — 1,252.37 14.24 92.02 96.63 3,176.90 5,784.97

130

CRAVATEX LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

NOTES — Contd.

• (v) As per the approved Scheme of merger of Proline India Limited and with the Subsidiary Company, vide National Company Law Tribunal (‘the NCLT’), Mumbai Bench order dated March 25 , 2021, 55,04,435 Compulsory Convertible Preference Shares (CCPS) of Rs. 100 each of the company will be issued to the shareholders of Proline India Limited as consideration, the same has been shown as “Shares to be issued on account of merger” on the face of the Balance Sheet. These shares will be issued post a certified copy is filed by the Company with the Registrar of Companies. The differential of net assets and consideration has been recognized in Amalgamation Adjustment Deficit Account under Other equity as per the requirements of paragraph 12 of the Appendix C to Ind AS 103.

NOTE 51 — CORPORATE SOCIAL RESPONSIBILITY

The provisions of Section 135 of the Companies Act, 2013 are not applicable to the Group as it does not fall under the class of Companies specified under the section.

NOTE 52 — PREVIOUS YEAR’S COMPARABLES

Previous year’s figures have been regrouped/reclassified wherever necessary, to confirm with current years classification/ disclosure.

NOTE 53 — IMPACT OF COVID-19

In February 2020, the World Health Organization (the “WHO”) declared COVID-19 a Public Health Emergency of International Concern. The Group’s operations were impacted from 17th March, 2020 till the first week of May 2020 as the COVID-19 pandemic had disrupted demand and supply chains across industries, impacting the business of companies. More recently, the second wave of the pandemic has impacted India more significantly than ever before and the Group is monitoring the situation closely taking into account the increasing level of infections in India and directives from the various state Governments. The Group has considered the possible effects that may result from the pandemic relating to COVID-19 on the financial results. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the Group has at the date of approval of these financial statements used internal and external sources of information. The Group has performed an analysis on the assumptions used and based on current estimates expects the carrying amount of its assets will be recovered. The Group has considered the impact to the extent known and available currently. Since the Group is engaged in trading of basic clothing and sportswear products, the demand for the same is expected to increase gradually with lockdown relaxations coming into effect. The Group looks forward to sizable increase in demand as the markets and offices are gradually operating and logistics get normalised.

SIGNATURES TO THE NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS FROM “1” TO “53”

As per our report of even date For GPS & ASSOCIATES Chartered Accountants Firm Registration No. 121344W

H.Y. Gurjar Partner Membership No. 032485

Place : Mumbai Dated : June 29, 2021

For and on behalf of the Board of CRAVATEX LTD.

Rajesh Batra

Chairman & Managing Director DIN: 00020764

Divakar Kamath

Executive Director & CFO DIN: 08730430

N. Santhanam

Independent Director DIN: 00027724

Sudhanshu Namdeo

Company Secretary Membership No.: A17132

131

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