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DIRECTOR'S REPORT

Crew B.O.S Products Ltd.

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Market Cap. (₹) 3.67 Cr. P/BV -0.06 Book Value (₹) -43.98
52 Week High/Low (₹) 8/3 FV/ML 10/1 P/E(X) 0.00
Bookclosure 07/11/2013 EPS (₹) 0.00 Div Yield (%) 0.00
Year End :2013-03 
To the Members of Crew B.O.S. Products Limited

The Directors have pleasure in presenting this Twenty- Fourth Annual Report and Audited Accounts for the financial year ended 31st March, 2013.

FINANCIAL RESULTS

                                        (Rs.In Lacs)

Particulars                      Year ended   Year ended
                                 March 31,    March 31,  
                                 2013 (Rs. )  2012 (Rs. )

Net Sales /Income from
operations                         26,794.99   42,742.39

Other Income                          209.04       52.28

Total Revenue                      27,004.03   42,794.67

Total Expenses                     35,057.07   41,789.77
Profit/(Loss) from operations before exceptional and Extraordinary items and tax (8,053.05) 1004.90

Exceptional Items prior
period Expenses                       260.17      143.03
Profit/(Loss) before Extraordinary items and tax (8,313.22) 861.87

Extraordinary items               (13,697.10)    (213.53)
Profit/(Loss) before tax (22,010.32) 648.35

Tax Expenses

1.  Current Tax                                   205.00
2. Income Tax for

previous years                        464.11 

3.  Deferred Tax                    (1856.08)     (77.00)
Net Profit/(Loss) after Tax (20,618.36) 520.35

Net Profit/(Loss) for the period (20,618.36) 520.35

PERFORMANCE REVIEW

Since the onset of the global meltdown, we have all been expecting a turnaround in the global economy. It has become a continual wait. There are definitely some signs of the global economic recovery in certain quarters with the US economy showing signs of growth; as against that, the EU is yet to come back on track with the GDP still in the negative zone. Indian Economy continues to oscillate over policy issues. Investment climate is still a challenge with credit availability and cost of capital adversely impacting new project build rate.

FY12-13 was a year in which Crew B.O.S. was trying to consolidate its business into more efficient, productive factories. During the year we continued to expand our capacities in hand bags and shoes. Crew B.O.S. is forging

long term and strategic relationships with customers to best utilize the capacities it has created. However, an increase in the total expenditure (with increased interest costs, finance charges, higher depreciation and staff and other costs going up) affected net profits during the year under review. Your Company is confident of increasing its business during the current fiscal and steps taken in the form of consolidations plans encompassing the high adherence to world class quality standards shall contribute in realizing its aspirations. The present year has had its share of misfortune in the international trade and your company suffered heavily due to non realization of debts from exports /domestic trades due to the economic downturn in the Global economy. Coupled with this the company was led to believe by its senior financial head to enter into very ambitious transactions which led to quantum losses and devastating financial collapse. The company had no options but to accept these losses in its overseas business and in its subsidiaries. The company had to take far reaching and urgent measures by removing the Chief Financial Officer and have started serious investigation into the frauds and misappropriation in such dealing. The matter is being investigated by the law enforcement authorities of the country. In spite of these drastic setbacks your company is confident that the inherent robustness and corrective actions will pave the path of recovery though slow.

The Net Loss after tax is ' 20, 618.37 Lakhs during the year as against the Net profit after tax of ' 520.32 Lakhs in the previous financial year.

DIVIDEND

As the Company has continued to incur heavy losses in the last financial year due to adverse factors as stated above, hence the board of directors does not recommend any dividend for the financial year ended on 31st March 2013.

REFERENCE TO B.I.F.R.

Section 15(1) of the Sick Industrial Companies (Special Provisions)Act, 1985 provides that where an Industrial Company has become a Sick Industrial Company, the Board of Directors of the Company, shall, within 60 days from the date of finalization of the duly audited accounts of the Company for the financial year as at the end of which the company has became Sick Industrial Company, make a reference to the Board for Industrial and Financial Reconstruction (BIFR) for determination of measures which shall be adopted with respect to the Company. The loss of the company for the financial year ended 31st March, 2013 have resulted in erosion of entire Net Worth of company and the company is to make a reference to Board for Industrial and Financial Reconstruction (BIFR).

The main reasons for the loss are as under.

1. Debts/Receivable/Sales:- Due to misfortune in the international trade, company suffered heavily due to non realization of debts from exports/domestics trades due to economic downturn in the Global Economy. Coupled with this company was led to believe by its financial head to enter into very ambitious transactions which led to quantum losses and resulting in devastating financial collapse and with no option for the company but to accept these losses in its overseas business and it its subsidiaries. Further the company had taken far reaching and urgent measures by removing the Chief Financial Officer and has started serious investigation into the frauds and misappropriation in such dealings. The company has also started legal cases and against those overseas parties against whom amounts are pending/due.

2. Loss on Inventories:- Written-off/disposal of the obsolete and rejected WIP/Finished Goods due to

(a) cancellation and delay of lifting ordered quantity due economic slowdown. (b) large scale rejection by foreign buyers on pretext of bad workmanship and quality factors. (c) change of fashion by European buyers in the past for which large stock holding of finished products were retained in the hope of alternate buyers at cheaper prices. These stocks later became hazardous to store and were required to be destroyed and burnt. Company had to take a huge decision in destroying these stocks as they became pollution and health hazard problem. (d) Market value of saleable items tailor made to customers' requirements and had to be valued at prices less than cost there was substantial loss on this account. In totality losses on stock had to be corrected as otherwise the accounts would not reflect true and correct view, The Company has taken the assistance of the Chartered Engineer to value of the stock at realistic values.

3. Substantial Operating loss:- There was substantial fall in Net Income from operation turnover in current year with tune of ' 159.47 crore which is 37.31% as compared to previous year figure. As such there was substantial operating loss in the current year.

4. Delay in execution of orders in hand:- On account of the uncertainty and delayed payments, the suppliers were not willing to provide credit or accept letter of credits for fear of default. This is turn resulted in customer order getting delayed and even getting cancelled. Due to delay in completion of order, shipments were not lifted thus reducing into operational loss in the current year.

5. Loss on account of foreign exchange fluctuation:- Due to adverse foreign currency fluctuation, company incurred huge losses in forward and derivative contracts. Similarly there has been increase in prices of imported raw material resulting a reduction in gross margin

6. Increase burden of finance cost:- To curb rising prices, the Reserve Bank of India has lifted interest rates, caused affecting the company's overall profitability. Due to this high interest cost wherein due to limited price elasticity, it was not possible to pass the higher cost to buyers thus it has increasingly becoming difficult to sustain company operations at present cost of capital.

DIRECTORS

Mr. Gautam Nair, Independent Director of the Company has resigned from the post of Directorship and approve the same by Board of Directors of the Company during the year.

CAPITAL STRUCTURE

Authorised Capital

During the year there is no change in the authorised capital of the Company, hence it remains the same i.e. INR 30 Crores.

Paid Up Capital

During the year there is no change in the Paid Up capital of the Company, hence it remains the same i.e. INR 139934670/- comprising of 13993467 equity shares of ' 10/- each

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors to the best of their knowledge and belief confirm that:

(a) In the preparation of the annual accounts for the year ended 31st March, 2013, the applicable accounting standards have been followed along with proper explanation;

(b) Prudent accounting policies have been selected and have made judgements and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at 31st March, 2013 and of the Profit of the Company for the financial year ended 31st March, 2013;

(c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) Annual accounts have been prepared on a going concern basis.

AUDITORS & AUDITOR'S OBSERVATION

M/s. Anil K. Goyal & Associates, Chartered Accountants,

New Delhi Statutory auditors of the Company have communicated that they do not wish to offer themselves for reappointment at the conclusion of their present term of appointment, at the ensuing Annual General Meeting of the Company, which has been accepted by the Board of Directors of the Company.

Further, the Company has received consent letter from Mr. Atish Kumar Shaw, Chartered Accountant indicating his willingness to serve as the statutory auditor of the Company, if appointed at the ensuing Annual General Meeting. They have confirmed that if he is appointed as the Statutory Auditor of the Company, his appointment will be in accordance with the limits specified u/s 224(1B) of the Companies Act, 1956.

The Board recommends the appointment of Mr. Atish Kumar Shaw, Chartered Accountant as the Statutory Auditor of the Company.

The Board recommends the ordinary resolution set forth at item no 3 of the notice for the approval of the members.

The observation of the Auditors in the Auditors' Report is explained, wherever necessary, in the appropriate notes to the accounts.

CORPORATE GOVERNANCE

As required by Clause - 49 of the Listing Agreement, a Report on Corporate Governance along with Certificate on Corporate Governance confirming compliances with the conditions of Corporate Governance obtained from the Practicing Company Secretary is annexed to this Report. (Annexure-1)

MANAGEMENT DISCUSSION & ANALYSIS

The Report as required by Clause-49 of the Listing Agreement is annexed herewith. (Annexure-2)

LISTING AT STOCK EXCHANGE

The Equity Shares of the Company continues to be listed on Bombay Stock Exchange Limited and The National Stock Exchange of India Limited. Global Depository Receipts are listed on the Stock Exchange at Luxembourg. The Annual Listing Fees for the financial year 2013-14 have been paid to the Stock Exchanges.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO UNDER SECTION 217(1)(e)OF THE COMPANIES ACT, 1956, READ WITH THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988

Information in accordance with the provisions of section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding conservation of Energy, technology absorption, foreign exchange earnings and outgo is given in the `Annexure A' forming part of this report.

SUBSIDIARY COMPANIES

VOGUE HOME PRODUCTS LIMITED

Vogue Home Products Limited, wholly owned subsidiary of Crew B.O.S. Products Limited is engaged in manufacture and export of home furnishing and small leather goods.

CREW B.O.S. ENTERPRISES LIMITED

This is a wholly owned subsidiary of Crew B.O.S. Products Limited, carrying on the business of creative and stylish designing of lifestyle products, wearing apparels made of leather or non leather, consumer products, cosmetics, artificial furniture, beauty products and designer goods and furnishing.

EMPORIO B.O.S. DESIGN LIMITED

A wholly owned subsidiary of Crew B.O.S. Products Limited, with the main objects of carrying on the business of creative and stylish designing of lifestyle products, wearing apparels made of leather or non leather, consumer products, cosmetics, artificial furniture, beauty products and designer goods and furnishing.

CREW ROR PRODUCTS LIMITED

Incorporated as a wholly owned subsidiary of Crew B.O.S. Products Limited with the main objects of carrying on the business of manufacturing and trading including import and export of all kinds of fashion accessories made from leather, wood, metal, poly-urythene and fabrics including leather bags, portfolios, travel bags, shoes, wallets, leather garments and belts of all kinds, wearing apparel of leather and fabric, garments, textile, furniture.

CREW REPUBLICA RETAIL LIMITED

Incorporated as a subsidiary of Crew B.O.S. Products Limited with the main objects to establish/manage/carry retail business or trade in India through retail outlets, showrooms for retailing in house manufactured leather goods and apparels as well as manufactured by other popular brands.

CREW P.P.O LEATHERS LIMITED

Incorporated as a wholly owned subsidiary of Crew B.O.S. Products Limited with the main objects to carry on the manufacturing of leather products and accessories

CREW MAG EXPORTS LIMITED

Crew MAG Exports Ltd. is a subsidiary of the Crew B.O.S. Products Limited and it is engaged in the manufacturing of leather footwear.

I.BIZ TRADE POST

The wholly owned subsidiary incorporated in Mauritius is engaged in International trading.

ALCHEMY TRADE POST

The wholly owned subsidiary incorporated in Mauritius is engaged in International trading.

CREW B.O.S. PRODUCTS (INT) PTE LIMITED

The wholly owned subsidiary incorporated in Singapore is engaged in International trading.

I. CONECT TRADE POST

The wholly owned subsidiary incorporated in Mauritius is engaged in International trading.

JOINT VENTURE COMPANIES

CENTRE OF EXCELLENCE IN DESIGN LIMITED

Centre of Excellence in Design Limited is a joint venture between the Crew B.O.S. Products Limited and Matrix Clothing Pvt Ltd. The object of the Company is to carry on the business of creative and stylish designing of lifestyle products, retailing, processing, assembling and crafting all type of apparel and wearing apparels made from all type of leather and non leather materials.

PUBLIC DEPOSIT

The Company has neither invited/nor accepted any deposits during the year within the meaning of Section

58A of the Companies Act, 1956, read with Companies (Acceptance of Deposit) Rules, 1975.

CONSOLIDATED FINANCIALS

As required by Accounting Standard-21 on Consolidation of Financial Statements, Consolidated Financial Statements and Cash Flow Statement are appended.

PARTICULARS OF EMPLOYEES

During the year under review no employee, whether employed whole or part of the year, was drawing remuneration exceeding the limits as laid down under Section 217(2A) of the Companies act,1956 read with Companies (Particulars of Employees)Amendment Rules,2011

ACKNOWLEDGEMENTS

Your Directors place on record their deep sense of appreciation for the contribution of employees at all levels and for the support from our valued customers, bankers and financial institutions, business associates, shareholders, suppliers and other statutory authorities.

                               For and on behalf of the Board

                              Sd/-         Sd/-

                      Tarun Oberoi  Robin Bartholomew

                  (Managing Director) (Director)
Place : Gurgaon

Date : 30/09/2013

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