STATEMENT OF COMPANY AFFAIRS

The trading activity, which was one of the revenue sources, was lower due to subdued demand. However, the income from lease improved to the extent of annual increase in contracted lease agreements. Lower dividend from overseas subsidiary vis a vis the previous year shrank the other income. Post the sale of 100% stake in Cravatex Brands Ltd. in the previous year, the company posted profit vis a vis the last year's net loss. The overall operations and financials of the company were considered as reasonable.

DIVIDEND

The Directors are pleased to recommend final dividend of Rs.3/- (30%) per equity share of Rs.10/- each for the financial year 2023-24, subject to tax deduction at source. The total outflow on this dividend account will be Rs.78 lakhs.

EQUITY SHARE CAPITAL

The total issued, subscribed and fully paid up equity share capital of the Company listed on BSE as on 31^st March, 2024 was Rs.2,58,41,600/- divided into 25,84,160 equity shares of Rs. 10/- each.

TRANSFER TO RESERVES

During the financial year debit balance of retained earnings amounting to Rs.11,81,40,192/- has been transferred to the general reserves.

FIXED DEPOSITS

The Company does not have any fixed deposits covered under Chapter V of the Companies Act, 2013 as on 31^st March, 2024 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 & KEY MANAGERIAL PERSONNEL

Dr. S.D. Israni (DIN 00125532) ceased to be an Independent Director of the Company with effect from 31^st January, 2024 consequent to his resignation due to his advanced age and ill-health. Dr. Israni has confirmed that there is no material reasons for his resignation other than those provided.

Mr. N. Santhanam (DIN 00027724) ceased to be an Independent Director of the Company with effect from 31^st March, 2024 consequent to expiry of his second term on 31^st March, 2024.

Mr. Satyan Shivkumar Israni (DIN 01174081) is appointed as a Non-executive Independent Director of the Company for the first term of consecutive period of 5 (five years) from 12^th February, 2024 till 11^th February, 2029.

Mr. Nakul Toshniwal (DIN 00350112) is appointed as a Non-executive Independent Director of the Company for the first term of consecutive period of 5 (five years) from 15^th February, 2024 till 14^th February, 2029.

Ms. Pheroza Jimmy Bilimoria (DIN 00191386), Mr. Satyan Shivkumar Israni (DIN 01174081) and Mr. Nakul Toshniwal (DIN 00350112) Independent Directors, have registered themselves for inclusion of their name in the Independent Directors Data Bank of The Indian Institute of Corporate Affairs. In the opinion of the Board the said Independent Directors have the integrity, expertise and experience as Independent Directors in the Company.

The Company conducts familiarization programs for Independent Directors with regard to their roles, rights, responsibilities towards the Company. Detailed presentations are made to the Board and its Committees from time to time on various matters such as business, regulatory, litigation, CSR update etc.

There are no appointment/cessation of the Key Managerial Personnel (KMP) during the financial year ended 31^st March, 2024.

DECLARATION BY INDEPENDENT DIRECTORS

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

AUDIT COMMITTEE

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

SUBSIDIARY

BB (UK) Limited (BBUK)

BB (UK) Limited (BBUK) is a 100% subsidiary of the Company incorporated in United Kingdom. The principal activity of BB(UK) is designing, sourcing and marketing of the Fila and Sergio Tacchini brand.

BB (UK) limited (BBUK) is a 100% subsidiary of the company incorporated in the United Kingdom. The company operates a license of FILA brand for specific distribution in the UK and the Middle East. It also has license for the Sergio Tacchini brand in the UK. A slowdown in retail spending in the UK, coupled with the cost of living crisis has seen several companies and retailers facing very difficult times. This has led to closure of several stores and muted demand.

The company has been cautious in its approach and in spite of challenging circumstances has delivered a profit before tax (PBT) of GBP 4.20 lacs (2.06%) on a lower revenue of GBP 203.55 lacs vis a vis a PBT of 2.26% in previous year. This has been achieved by a tight control on costs.

The demand for the FILA brand is still muted however the outlook for the near future remains stable.

The salient features of the financial statement of the subsidiary is set out in the prescribed Form AOC-1 as Annexure IV, which forms part of the board report.

The financial statement of the subsidiary for the financial year ended 31^st March, 2024 will be kept open for inspection for the Members at the website of the Company at https://cravatex.com/investor-relations/BBUK-Financial-Statements-2023-24.pdf upto and including the date of the Annual General Meeting.

DIRECTORS' RESPONSIBILITY STATEMENT

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

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

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

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

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

(e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

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

CORPORATE GOVERNANCE

Your Company have taken all the necessary steps for ensuring compliance of all mandatory provisions of Corporate Governance in terms of Regulation 4(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate report on Corporate Governance is incorporated as a part of the Annual Report along with a Certificate from a Practicing Company Secretary.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

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

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

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

CHANGES IN THE NATURE OF BUSINESS

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

MATERIAL CHANGES AND COMMITMENTS

There have been no significant material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

CONSOLIDATED ACCOUNTS

The Company had adopted the Indian Accounting Standards (IND AS) from 1^st April, 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-2023-24.pdf.

PARTICULARS OF THE EMPLOYEES

The Information required under Section 197(12) of the Companies Act, 2013 read with rules made thereunder is included in the board report as Annexure II and forms part of this report.

BOARD EVALUATION

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

In case of Independent Directors, the performance evaluation was undertaken based on various criteria such as their delivery, contribution to the Board/Committees, attendance at the respective meetings, sharing of best practices, engaging with top management team etc.. The performance of the Chairman and Non-Independent Directors were also carried out by the Independent Directors.

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

NUMBER OF BOARD MEEETINGS

The Company held 4 (four) Board Meetings during the Financial Year 2023-24. These were on 26^th May, 2023, 14^th August, 2023, 9^th November, 2023 and 14^th February, 2024.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

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

WHISTLE BLOWER POLICY

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

NOMINATION AND REMUNERATION POLICY

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

PURPOSE OF THE POLICY

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

(b) To identify and evaluate the suitability of persons for recommending them to the Board for their appointment as directors including managing directors and executive directors, as also persons who may be appointed in senior management positions.

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

The terms of remuneration shall be based keeping in view various aspects including qualifications, experience, performance, commitment, leadership skills, etc.

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

ROLE OF THE COMMITTEE

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

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

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

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

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

— the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully;

— relationship of remuneration to performance is clear and meets appropriate performance benchmarks.

The entire policy is also disseminated on the website of the Company at http://cravatex.com/investor-relations/Nomination-and-Remuneration-Policy.pdf.

RELATED PARTY TRANSACTIONS

All related party transactions are placed before the audit committee and board for approval in compliance with regulatory requirement and a healthy corporate discipline.

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 2023-24. 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 2023-24 are provided in Note 34 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 Company.

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.pdf.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future.

SECRETARIAL AUDIT

In terms of Section 204 of the Companies Act, 2013, Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24 of the SEBI (LODR) Regulations, 2015, the Company had appointed M/s. Hemanshu Kapadia & Associates, Practicing Company Secretary, to conduct the Secretarial Audit for the financial year 2023-24. The secretarial audit report is included as Annexure III and forms a part of this report.

CORPORATE SOCIAL RESPONSIBILITY

Since the company not being a specified class of Company, the provisions of Section 135 of the Companies Act, 2013 were not applicable to the Company during the financial year 2023-24.

Consequent to the net profits for the financial year 2023-24 not exceeding Rs.5 crores, the provisions of Section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014 will not be applicable to the Company for the financial year 2024-25.

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 including internal financial controls with reference to financial statement and operating effectively.

RISK MANAGEMENT

AUDITORS' REPORT

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

There are no qualifications, reservation, adverse remark or disclaimer made by the Auditors of the Company in his report and by the Company Secretary in Practice in his secretarial audit report under Section 134(3)(f) of the Companies Act, 2013.

STATUTORY AUDITORS

M/s. GPS and Associates, Chartered Accountants, Mumbai (Firm Regd. No. 121344W) were appointed as the Statutory Auditors of the Company in the 70^th Annual General Meeting of the Company to hold office for a second term from the conclusion of the 70^th Annual General Meeting until the conclusion of the 75^th Annual General Meeting. The said Statutory Auditor shall hold office until the conclusion of the 75^th Annual General Meeting to be held in the year 2027.

PREVENTION OF SEXUAL HARASSMENT

The Company encourages and supports Women employees at work place in terms of their safety and protection.

Under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 every specified Company is required to adopt policy for prevention of Sexual Harassment of Women at workplace set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee. As the number of employees in the Company is less than ten, it is not mandatory to adopt policy for prevention of Sexual Harassment of Women at workplace and set up Committee for implementation of said policy. However, the spirit of the regulation is taken note of in case of any event for appropriate action in the interest of a healthy corporate governance.

TRANSFER OF UNCLAIMED SHARES TO IEPF

Section 124(6) of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2017 and General Circular No.12/2017 dated 16^th October, 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.

As the Company had not declared any dividend for the financial year ended 31^st March, 2017 there was no unclaimed dividend for the said financial year to be transferred to the Investor Education and Protection Fund (IEPF) of the Central Government in terms of the provisions of Section 125 of the Companies Act 2013 in financial year 2023-24.

SECRETARIAL STANDARDS

The Company has complied with all the applicable secretarial standards issued by The Institute of Company Secretaries of India and notified by the Central Government.

COST RECORDS

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

MISCELLANEOUS

There is no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year.

There is nothing to report regarding difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof.

There is nothing to report regarding voting rights which are not directly exercised by the employees in respect of shares for the subscription/purchase of which loan was given by the Company as there is no such scheme as envisaged under Section 67(3) of the Companies Act, 2013.

ACKNOWLEDGEMENT