Crew Pgs 21-56 (Main) Report 2006-07.pdf · Annual Report 2006-07 Crew B.O.S. Products ......

Goingbeyond

Annual Report 2006-07

Crew B.O.S. Products Limited

Goingbeyond

ContentsDelivering on our promises 4

Financial summary 6

Letter from Managing Director 8

Strategic Business Units 13

Springboard to volume driven business 14

Going the retail way 17

Crew B.O.S. Academy 18

DirectorsÊ Report 21

Corporate Governance 25

MDA 33

AuditorsÊ Report 37

Financial Section 40

1

Crew B.O.S. Products Limited (herewith referred to as CrewB.O.S.) designs, manufactures and exports leather andleather-based fashion accessories and footwear. TheCompanyÊs diverse product range of belts, bags, wallets,footwear and small leather goods represents theinternational pulse of fashion as it is supplied to some of theworldÊs best and most renowned international brands andretail chains such as

ACCESSORIZE, MONSOON,

FOSSIL, MARKS & SPENCER,

ESPRIT, NEXT,

GAP, BANANA REPUBLIC,

CHICO'S, FAT FACE,

DEBENHAMS, J JILL,

AEO, ARMANI

to name just a few. Crew B.O.S. also has to its credit the unique distinction of producing cost-effective,international-grade „Italian‰ quality leather which has beenvery well appreciated in the international market. Thisleather manufacturing plant is unique in India and Asia for thesheer diversity of products & quality that it can produce.

An ISO 9001:2000 certified Company, Crew B.O.S. has sixstate-of-the-art manufacturing units including a world-classleather finishing unit located at Manesar (Haryana) equippedwith hi-end Italian machineries and Italian leather processingtechnology. The Company also has a tannery at Jalandhar(Punjab) and is also fast developing an exclusive footwearmanufacturing unit at the Mahindra SEZ in Chennai (TamilNadu).

Headquartered in Delhi (India), Crew B.O.S. also has anoutsourcing and marketing office in Hong Kong (China),marketing office in Milano (Italy) and a resourcing office inCairo (Egypt). The CompanyÊs Operations in Hong Kong andItaly are conducted through its wholly owned subsidiaries.

The CompanyÊs shares are listed on the Bombay StockExchange and National Stock Exchange of India Limited andthrough its GDR issue listed on the Luxembourg StockExchange.

3

Fashion we believe is all about evolving style. What'sin, what's out. What's new, what's passé? What's hot,what's not? People canÊt turn over an entire wardrobebased on changing styles every season and everyyear. Rather they update looks with a fresh purchaseof fashion accessories and footwear. All major fashionand luxury brands today are giving a more prominentrole to accessories thereby presenting an everincreasing opportunity for Crew B.O.S. to cater to thisincreasing demand.

This is just where Crew B.O.S. steps in. With productsthat complement every facet of the customerÊslifestyle - at work, leisure and fun. To do so, CrewB.O.S. is going beyond the ordinary to design andmanufacture high quality fashion accessories that promise to play an important role in enhancing the style quotient of customers around the globe.

Again, the Company is going far beyond merely visualizingambitious projects and has embarked on robust strategicplans to ramp up its core capabilities and forged a strategictie-up to gain invaluable experience in the footwear segment.

Going beyond, Crew B.O.S. will be travelling a

path that promises to take the Company closer to

its journey to be the best. The success of some of

the initiatives promise to generate a whole new

level of opportunities for Crew B.O.S. and

simultaneously create a cutting edge for the entire

leather industry in India.

Crew B.O.S. is also going beyond seasonal trends andcreating a niche in the footwear segment which enjoysa year around demand.

Going beyond

4

Delivering on our promises While we are going beyond in every sphere of our business, the soundness of our business modelcan be judged from our ability to deliver on the promises we make.

5

Promises made 2005-06 Promises delivered 2006-07

"We will grow at a very health pace...⁄"

"Ramp up capacities to foray into the footwearsegment "

"ERP will be fully functional⁄stepping stone to receiving theISO certification⁄"

„Expanding operations of subsidiaries and increasing ourworldwide sourcing capabilities‰

Net sales increased by 38 per cent to Rs 1847.26 mn (2006: Rs 1346.60 mn).

PAT up by 43 per cent to Rs 222 mn (2006: Rs 155.2 mn)

EBIDTA up from Rs 236.9 mn in 2005-06 to Rs 340.9 mnin 2006-07.

EPS increased from Rs 12.67 to Rs 17.28.

Setting up a 4 lane production line.

Real-time web-enabled ERP system operational.

Received the ISO 9001:2000 certification.

Setting up a new wholly owned subsidiary - "Iguvium" which will enable the Company to actively participate in the European marketsand serve as the CompanyÊs marketing arm in Italy.

Setting up a Sourcing office in Egypt.

Setting up a Hong kong subsidiary to resource and market.

6

Financial summary

Particulars 2003-04 2004-05 2005-06 2006-07

SOURCES OF FUNDS

Equity Share Capital 69.99 110.00 128.18 158.03

Reserves & Surplus 68.64 238.18 575.10 774.64

Total Shareholders Funds 138.63 348.18 703.28 932.67

Loan 140.68 309.34 451.76 732.31

Total Liabilities 279.31 657.52 1155.04 1664.98

APPLICATION OF FUNDS

Gross Block 166.90 345.82 537.44 919.33

(including Capital Work in Progress)

Less : Depreciation 36.83 50.76 79.58 114.86

Net Block 130.07 295.06 457.86 804.47

Deferred Tax Asset/ (Liability) (5.01) (3.58) 2.69 (2.71)

Total Fixed Assets 130.07 295.06 457.86 804.47

Investments 0.85 35.06 92.09 9.30

Gross Current Assets Block 238.43 522.64 804.65 1118.27

Less : Current Liabilities & Provision 89.83 200.07 213.92 274.46

Net Current assets 148.60 322.57 590.73 843.82

Miscellaneous Expenditure 4.80 7.87 11.67 10.10

Total Assets 279.31 657.52 1155.04 1664.98

Net Worth 133.83 340.31 691.61 922.57

(Rs mn)

8

Dear Shareholders,It gives me great pleasure to welcome you to yet another year of excellent performance at Crew B.O.S. The continued strengthand momentum of our business is reflected in our financial results as our revenues soared new heights. With a sharply focusedresolve, the Company embarked on large-scale business plans and passionately pursued a multiple strategic growth path tostrengthen every sphere of the business.

Industry overview

As I write this letter to you, one of the major concerns expressed is the competitiveness of the export industry due to theweakening of the U.S. currency. At Crew B.O.S. we believe that addressing this dynamic external factor is as much as a partof our business and we accept this challenge in the right spirit and will devote the right energies and attention to manage itwell.

As they often say every cloud has a silver lining, so while the industry was wondering, how it would cope with this newchallenge against a "China" that has more contents to its business, came some good news that will help us to get greater attentionfrom buyers whose honeymoon a rather long one with China is ending. The Leather industry in China is being challenged by newlaws and policies that will erode its competitiveness.

A combination of a moving Yuan (about 4 per cent) , reduction of subsidies ( about 7 per cent to 10 per cent), increasing dutieson leather, increasing wages and a shortage of skilled work force puts more opportunity at IndiaÊs door without the peer pressurenormally associated with competing with „China‰.

This development is truly a brilliant opportunity which the Indian leather industry has to grab to perform the role of a reliablesupplier. Crew B.O.S. by the prudent use of resources has done exactly that and today has world class infrastructure to acceptand explore this opportunity. Increasingly, the better customers are recognizing this change and progress at „Crew B.O.S‰. AndI believe a new era has begun that will take your Company to new heights.

Financial & business review

The CompanyÊs net income rose from Rs 1314.69 mn to Rs 1847.26 mn while profitability grew by 43 per cent. Bags and beltscontinue to be the major revenue earners and accounted for more than 55 per cent of the total revenues. We are happy toreport a growth of nearly 85 per cent in the footwear segment while the finishing unit which commenced a full year ofoperations in this fiscal, recorded revenues of Rs 225 mn. The ability to manufacture „Italian‰ quality leather provided theCompanyÊs prestigious international brand of customers yet another compelling reason to select Crew B.O.S. as their trustedpartner in success. The superior leather finishing abilities also coincided perfectly with the prevailing trend of clean and classiclooks for leather fashion accessories segment in 2006-07.

To pursue higher growth opportunities, promote higher operational efficiency and profitability, Crew B.O.S. has taken a consciousdecision to develop each of the CompanyÊs six core product streams into distinct strategic business units. In this direction, oneof the important measures to enable the management and various business-heads get a 360-degree view of the businessoperations has been the installing of a powerful ERP system. The key developments across each of our business units; is discussedseparately in the pages following this communiqué, I briefly touch upon here.

Footwear segment

We at Crew B.O.S. believe that this segment is poised to rapidly change and expect to see a huge transformation over thenext few years. On one hand, leading international brands are looking at India for their sourcing while on the other thedevelopments in the domestic market present tremendous opportunities to build and create a special brand.

9

Shoe Division South

Gauging this, Crew B.O.S. is approaching this new era of opportunities where global leather and lifestyle product manufacturersmove base to India, with a clear plan and strategies. We have joined hands as 51: 49 JV with Leather Crafts (India) Pvt. Ltd(LCIL), a respected Chennai-based leather exporting house servicing the renowned American brand, „Hush Puppies‰.Crew B.O.S. brings to the collaborative venture strong in house design capabilities and quality consciousness associated withservicing large branded customers. Crew B.O.S. will be providing designing inputs for nearly 50 per cent of this prestigious orderwhich entails designing closed shoes for men and women.

To cater to such voluminous demand, Crew B.O.S. has decided to ramp up its manufacturing capacities. Crew B.O.S. has purchased 6 acres of land at Mahindra World City Developers Ltd., SEZ at Chennai where the Company will be setting upa new plant to produce 10,000 pairs of full shoes per day by mid 2009. The setting of this plant will take the CompanyÊsmanufacturing prowess to a whole new scale and place in a leadership position in the industry as this will be amongst the biggestplants in India.

Shoe Division North

Our shoe unit at Mansard has a current installed capacity of producing 1800 pairs of full shoes per day. Looking at theopportunities, Crew B.O.S. is planning to enhance the existing capacity to produce 5,000 pairs of full shoes per day by 2009.This plant will be focused on servicing existing as well as some new clients producing thereby mid and premium segment shoes.

City of Excellence at Neemrana

The footwear infrastructure in India is fairly evolved but the country still lack some truly „best-in-class‰ component manufacturingcapabilities. To evolve such a facility, Crew B.O.S. has acquired 30 acres of land at Neemrana in the state of Rajasthan. CrewB.O.S. will be identifying world class sole, hardware, leather, manufacturing companies around the world and bring theirmanufacturing technologies through business ventures / associations (with these companies) to India.

This new manufacturing base combined with international grade manufacturing technologies will provide top reputed internationalbrands yet another compelling reason to approach Crew B.O.S. for a one stop solution for all their leather manufacturing needs.This unique combination of services will create the „stickiness‰ with the top customers thus easing the entry barriers leading tothe creation of an organization that is strong in manufacturing and equally strong in servicing.

10

Retail foray

A revolution is brewing in the Indian retail space and almost every industry major is investing into retail ventures tempted by theincreased disposable income of the spending public in our country. In this space, designing, manufacturing and servicing form thecore essentials and Crew B.O.S with its very talented team is in the perfect place to launch its own „brand‰ of products in thedomestic market. The Company has in place strategic marketing plans to drive this venture and launch two brands from theCrew B.O.S. banner ÂTEMPESTAÊ and ÂCREW REPUBLICAÊ towards the last quarter of this year. With right retail strategies andour international grade of designing, manufacturing and quality consciousness, we are confident of meeting customers acceptancein the domestic market and in years to come will be grow these brands internationally. As Crew B.O.S. stands at critical junctionin this business segment, I am confident with our sharply focused business planning and execution capabilities, the success in theretail segment will take the Crew B.O.S. banner to great heights.

Crew BOS Academy

One of the important developments during the year, which I would like to touch on, is the setting up of the Crew B.O.S.Academy in October 2006. This Academy has been formed with the aim to be the source to recruit and build a trained,efficient and talented pool of committed workers across all our divisions. In order to uplift the skill levels to a global standard,the Crew B.O.S. Academy has hired highly experienced technical trainers from Romania and Italy. Apart from being technicallysound, these trainers bring with them a work discipline which when imbibed in the new trained workforce will result in greateroperational efficiencies and reduce wastage of material and man-hours.

The Academy will also retrain old workers to improve and update their skills. In the future, the Academy aims to increase itscapacity to train workers in the field of leather products manufacturing and be a one-point source for well trained persons tothe leather industry in India.

Reengineering exercise

While Crew B.O.S. uses world class machinery and production technology, being an inherently labour-intensive industry, theCompany constantly looks at ways and means to improvise production and operational efficiencies to ensure that the vital cost-efficiency edge is always maintained. As a step in this direction, Crew B.O.S has embarked upon a scientific industrial reengineeringexercise supported by strong HR policies to strengthen our peopleÊs competencies, match the right skills to the right job andmaintain a high-performance ethics.

The industrial engineering cell established in the belt unit assisted the Company in „process stream mapping‰ and setting up of„production efficiency‰ targets. By customizing an ERP program, we were able to capture real-time data that has helped us providemeaningful management information for maintaining productivity, quality and cost control. Along with this, through constantengineering training Crew B.O.S. has been able to effectively reduce changeover time, to be more responsive to customer needsand identify wasted time by analyzing our current routine.

11

We also have been able to transform hard-to-define organizational concepts into a practical management agenda that has helpedus to focus on avoiding the pervasive pitfalls that often limit team performance. Crew B.O.S, through mature continuousimprovement programs has motivated its workforce to support and maintain improvement strategies. By using predictive andpreventive maintenance techniques, Crew B.O.S. has been able to end to crisis maintenance.

We are happy to report that Crew B.O.S. has achieved tremendous success in the reengineering exercise carried out first in thebelt division. As the core management team has successfully gone through the learning curve in our belt unit and workers havewholeheartedly accepted these initiatives and marked the positive differences, we are confident of undertaking similar reengineeringexercises across all our divisions at a much faster pace in the forthcoming year.

HR initiatives

As the Company climbs the volume and value curve, Crew B.O.S. has in place a highly well-experienced and professional qualifiedmanagement team at the helm to ensure it is a smooth and unhindered march. However, expanding this team, attracting andretaining the right management team and employees are critical. Crew B.O.S. is in the process of formulating and implementingattractive reward and retention schemes for them such as Employees Stock Option Schemes (ESOPs), performance linkedincentives, loyalty bonuses, etc. which will help Crew B.O.S. to attract and retain the best talent across the industry around theworld.

Commitment to quality Quality is the backbone of our commitment to customers. And no matter where Crew B.O.S. travels in its future journey andhowever, fast we grow, cost-competitiveness and quality will always remain the bedrock of all that we do. To further enhance,the CompanyÊs quality control process, we have set up a full-fledged 28-member quality control team employing senior personnelwith rich-hands on experience in the leather industry. The CompanyÊs comprehensive commitment to quality in architecting anagile organization is vindicated by it being awarded the prestigious ISO 9001:2000 certification.

Social Compliances

As the Corporate India marches ahead, it is increasingly been accepted that we as responsible citizens need to participate inthe all round welfare and development of the society. We believe our training school in many ways provides fresh and youngpeople a base to be trained and explore employment opportunities on a strong footing. Crew B.O.S. also runs a Child EducationCentre to assist children of our employees with their studies after school hours to upgrade their general awareness.At the same time, Crew B.O.S. is making a conscious effort to empower women by providing them with training and employmentin a safe environment. At Crew B.O.S. we make every effort to make our facilities and working environment safe and these areequipped with medical rooms to take care of first aid needs in case of emergencies. Keeping employees interests in mind andthe intensity of work, we have also established canteen facilities.

Looking aheadWe see opportunities for tremendous growth in front of us. The Crew B.O.S. team that is in place today is significantly strongerthan at any other time in the past and I am confident together we will take the Company to great heights. With our strategicbusiness initiatives and strong marketing initiatives in place, at Crew B.O.S. we believe, we are well-positioned for success. Weforesee, 2007-08 to be a year of growth in terms of revenue, profitability and market share. At Crew B.O.S. we are committedto deliver growth across all our business units in the export market and resolutely positioning ourselves to capitalize on the domesticretail market. We are committed to continuing to deliver results and increasing shareholders value in the future.

I would like to take this opportunity to commend our management team and every member of Crew B.O.S. for their continuedcommitment and dedication. Lastly, I would like to thank our shareholders and most importantly extend a special recognition andthanks to our prestigious customers for their support. Thank you for your trust.

I remain, yours truly, Tarun OberoiManaging Director

13

Strategic Business Units

One of the significant steps that will provide Crew B.O.S. an important experience in gearing its volume-based structure isthe servicing of the renowned American brand „Hush Puppies‰. Hush Puppies is a division of Wolverine Worldwide, aninternational brand of contemporary, casual footwear for men, women and children which markets or licenses footwear inover 100 countries across the globe.

This milestone project has come to Crew B.O.S. due to the Joint Venture entered with Leather Crafts (India) Pvt. Ltd (LCIL).Crew B.O.S. brings to this collaborative venture strong in house design capabilities and quality consciousness. Crew B.O.S.would also provide design inputs for nearly 50 per cent of the order which entails designing closed shoes for men andwomen. The „Italian‰ finish leather from the finishing unit promises to provide a strong impetus to this project.

Springboard to

volume driven business

14

Manufacturing capacities

With all compliance norms under process, the Joint Venture has begun operations on the existing lines since June 2007. To caterto demand of Hush Puppies, the Joint Venture has decided to ramp up its manufacturing capacities at Mahindra SEZ in Chennai.This facility is located in the 1300 acres plus Mahindra World City sited on one of the fast developing industrial corridor ofChennai, Tamil Nadu. This new facility would have 12 lines of production which would collectively have an installed capacity ofmanufacturing 10,000 shoes a day. Part production from this new facility is likely to begin by December 2007 and the productionfacility is expected to be fully operational by December 2008.

While this order is the first of its kind in the closed footwear variety for Crew B.O.S., the Company is confident thatthe Hush Puppies order will be the stepping stone to acquire more volume driven collaborative orders and theCompany is already actively negotiating with other renowned and very reputed international hi-end premium brands.

15

17

Crew B.O.S. is a frontrunner in servicing global brands and takes great pride in helping international brands maintainthe aura of the luxury brand they represent. With the right mix of manufacturing capabilities, design aesthetics,beauty and luxury, the Company believes that the foray of Crew B.O.S. into the retail segment is on a solidfoundation.

RETAILSTRATEGY

Going theretail way

Establish itsown

chain of stores

Launch its brands CrewRepublica and

Tempesta

Establish a distribution

network

Multi brandshops

Shopin

shops

Future roadmap

As we embody and align the focal points of our retail strategies and unfurl the captivating Italian finish „Crew Republica and Tempesta,‰ range of branded products to our esteemed domestic customers, we areconfident of discovering new horizons in the future.

18

Crew B.O.S. has established a training academy for designing excellence and to build a valuable resource pool for both itself and togear the industry as it forges ahead to be the leather manufacturing destination for the world.

Started withFootwear and Bag division

Impart training tothe entire workforce of theCompany

Build a human resource baseand pool which will provide anedge to the leather industry

321

Designing edge

From futurism to vintage charm, designers at Crew B.O.S. offer bold, clean and classic styles that fit right in with professional looks,and elevate weekend wear to pure chic. Innovation and creativity, international exposure and being hands-on with the latest trendsenables designers to design and develop products that customers around the world can connect with.

It is to the CompanyÊs unique distinction that nearly 50 per cent of the products manufactured for its branded customers are designedin house. To introduce a specialization in skills, the Company is devising product category wise design verticals.

Crew B.O.S. has set up a Centre for designing excellence to develop designing specialization and mould professionaldesigners to customize their creative ability to the exciting medium of leather. The Company is confident that the trainingwill take off in a big way in the forth coming year and will over years become the country’s design and resource pool.

Crew B.O.S. Academy to augment human talent

and design capabilities

19

Crew B.O.S. AcademyLow cost labour has given Crew B.O.S. a unique cost advantage and now as the Company marches towards a better tomorrow, theCompanyÊs academy aims to educate young and fresh workers in various production processes to ensure that speed; agility and qualityare consistently maintained. The school trains young workers, men and women not only production skills but aims at refining their softerskills right and developing a positive attitude to work.

The training school set up in Manesar has been operational since October 2006.

To bring in an international level of training, Crew B.O.S. has taken on board a training team which includes experienced Romanianand Italian trainers who have earlier acquired their skills by working for long years with world renowned brands like Prada and Gucci.

Crew B.O.S. through its training school will also be investing in upgrading the skills of older employees.

The Company has successfully trained 350-400 workers during the past four months. The Company also intends to scale its batchsize from the current level and has set an ambitious target of training 2500 new workers in the next three years.

Within the coming 12-14 months, the entire workforce of Crew B.O.S. shall have undergone training through the Academy.

The initiative is set with the long term objective of pioneering a change in the resource pool across the leather industry inIndia, so that Crew B.O.S. becomes the industry’s recognized supplier of talent human capital.

Board of Directors

Company Secretary

Auditors

Bankers

Registrar & Share

Transfer Agent

Registered Office

Corporate Office

Mr. Tarun Oberoi Managing Director

Mr. Robin Bartholomew Whole Time Director

Mr. Deepak Manchanda Independent Director

Mr. Gautam Nair Independent Director

Mr. Jitindar Bir Singh Independent Director

Mr. Naveen Ganzu Independent Director

Mr. Sanjeev Kumar Bajaj

Anil K. Goyal & Associates

Chartered Accountants

204-206, Siddharth Chambers,

Hauz Khas, New Delhi - 110 016

Citi Bank N.A.

The Karur Vysya Bank Ltd.

UTI Bank Ltd.

Skyline Financial Services Pvt. Ltd

246, 1st Floor, Sant Nagar,

East of Kailash, New Delhi -110 065

Tel.: 011-26292682/83, Fax: 011-26292681

813/C, Jaina Tower-I, District-Centre

Janak Puri, New Delhi - 110058

Tel.: 011-45530149 Fax : 011-45530148

199, Udyog Vihar, Phase - I,

Gurgaon - 122 016, Haryana (India)

Tel: 0124-4139400 Fax : 0124-4005011

E-mail : [email protected]

Web : www.crewbos.com

CORPORATE INFORMATION

20

21

CREW B.O.S. PRODUCTS LIMITED

The Gross income from operation increased by 53.10% to

Rs. 2053.85 million. Profit before tax increased by 50.37% to

Rs. 234.85 million and Profit after tax at Rs. 221.46 million

registered a growth of 42.71%.

The Company expects to keep up the healthy trend in the

financial year 2007-08 on the basis of diversified product range.

DIVIDEND

Your Directors in their meeting held on 27th January, 2007

approved payment of an interim dividend of 7.5% i.e. Rs. 0.75

per share on 1,28,18,200 equity shares of Rs. 10/- each for the

financial year 2006-07, considering the financial results of the

Company for the nine months period ended on 31st December,

2006. The Company, accordingly, made payment of interim

dividend to the equity shareholders of the Company whose

names appeared on the Register of Members as on the record

date on 15th February, 2007.

Your Directors have recommended a final dividend of 7.5%

i.e. Rs. 0.75 per equity share on 1,28,18,200 equity share of

Rs. 10/- each for the financial year ended 31st March, 2007.

The total dividend on equity shares for the financial year ended

31st March, 2007, accordingly, totals to 15% as compared to

12.50% declared and paid in the last year.

The final dividend of Rs. 0.75 as recommended by the Board

of Directors, if approved at the forthcoming Annual General

Meeting, will be paid to all those shareholders whose names

appear in the Register of Members on 10th September, 2007.

In case of shares held in dematerialized form, the dividend

shall be payable on the basis of beneficial ownership as at the

end of 8th September, 2007 as per the details furnished by

National Securities Depository Ltd. and Central Depository

Services (India) Ltd for the purpose, as on date.

The said dividend would be tax free in hands of the Members.

The total outgo on account of dividend including dividend tax

is Rs.21.92 million (Previous year Rs. 18.27 million) which

represents 9.90% of the Profit after tax.

PREFERNTIAL ALLOTMENT OF EQUITY WARRANTS

During the year the Company has issued 12,50,000 warrants

convertible into Equity Shares of the Company on preferential

basis at a price of Rs. 178/- per warrant, which will entitle the

holder to subscribe to one Equity Share of the face value of Rs.

10/-, at a price not being less than Rs. 178/- (including premium

of Rs. 168/-) per Equity Share of the Company against each

warrant. The holder of the warrants will have an option to

apply for and be allotted one Equity Share of the Company per

warrant at any time after the date of allotment but on or before

the expiry of 18 months from the date of allotment, in one or

more tranches. The warrants were issued to the promoters and

other private business investors for the working capital

To,

The Members,

Your Directors have pleasure in presenting this Eighteenth

Annual Report and Audited Accounts for the financial year

ended 31st March, 2007.

FINANCIAL RESULTS

(Rs. In Million)

Year ended Year ended

March 31, 2007 March 31, 2006

Income from Operation 2053.85 1341.47

Profit before interest and

depreciation 337.75 234.91

Less: Interest 70.30 49.14

Depreciation 32.60 29.59

Profit before taxation 234.85 156.18

(Less) : Provision for taxation (7.77) (5.71)

Add / (Less) :

Deferred tax liability (5.40) 6.27

Add / (Less) :

Tax adjustment for prior years (0.07) 0.32

Add / (Less) :

Adjustment for prior years (0.15) (1.88)

Profit after taxation 221.46 155.18

Add Balance in

Profit and Loss account 243.74 110.70

Balance available for

appropriations : 465.20 265.88

Appropriation

Proposed Dividend 9.61 6.41

Interim Dividend 9.61 9.61

Transfer to General Reserve 11.08 3.88

Dividend tax 1.35 1.35

Provision for tax on

proposed Dividend 1.35 0.90

Balance carried to

Balance Sheet 432.20 243.73

PERFORMANCE REVIEW

Your company is engaged in fashion accessories products,

footwear and finished leather business. The Company is

growing on consistent basis and year 2006-07 is not an

exception to the same.

Directors'Report

22 CREW B.O.S. PRODUCTS LIMITED

requirements of the Company. As on date no holder of warrants

has exercised the option.

The proceeds of the warrant of Rs. 298.50 Lakhs have been

utilized in the working capital requirements of the Company.

DIRECTORS

Mr. Naveen Ganzu, Independent Director, retires by rotation

and being eligible offers himself for re-appointment.

Mr. Gautam Nair was appointed as an Additional Director of

the Company w.e.f. 15th December, 2006 to hold office till

the date of this Annual General Meeting. He is the Non-

Executive and Independent Director of the Company.

The notices together with money deposit have been received

under Section 257 of the Companies Act, 1956, from the

members proposing the candidature of Mr. Gautam Nair as a

Director of the Company. Requisite approval of Shareholders

for his appointment is being sought at the ensuing Annual

General Meeting.

Brief profile of the Directors who are appointed / reappointed

is given in the Corporate Governance Report given as Annexure

3 to this Report.

During the period under review, Mr. Naveen Anand resigned

from the Directorship of the Company w.e.f 25th October, 2006

and Mr. Puneet Nikore resigned from the Directorship of the

Company w.e.f. 15th December, 2006 due to their other higher

commitments. Your Directors would like to place on record

their warm appreciation of the valuable contributions made

by them during their tenure as the Directors of the Company.

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, 2007, the applicable accounting

standards have been followed along with proper

explanation;

(b) Prudent accounting policies have been selected and have

made judgments 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, 2007 and of the

Profit of the Company for the financial year ended 31st

March, 2007.

(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

The Statutory Auditors of the Company, M/s Anil K. Goyal &

Associates, Chartered Accountants holds office until the

conclusion of this Annual General Meeting and being eligible

offer themselves for re-appointment. They have furnished a

certificate that their appointment, if made, shall be within the

statutory limits as specified in Section 224(1B) of the Companies

Act, 1956.

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 Statutory Auditors

of the Company is annexed to this Report. (Annexure-3)

MANAGEMENT DISCUSSION & ANALYSIS

The Report as required by Clause-49 of the Listing Agreement

is annexed herewith. (Annexure-4)

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 Ltd. Global Depository Receipts are listed

on the Stock Exchange at Luxembourg. The Annual Listing Fees

for the year 2006-07 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

i) Conservation of Energy

The manufacturing operations of the Company are not

energy intensive and do not consume high level of power,

however the Company has undertaken appropriate steps

to conserve the energy.

ii) Technology absorption

Your Company has set up a Finishing Unit at Manesar to

convert semi-finished leather into finished leather with

the help of Italian Technology and absorbed technology

to keep the manufacturing process more automated

resulting in shorter lead time and better quality of products.

23


Your Company regularly reviews and tries to upgrade itself

to the pertinent development as they occur.

iii) Foreign Exchange Earnings and Outgo

The Company's products continue to be well accepted in

the overseas market due to its unique quality and diversified

range. The Company is further pursuing its initiatives

vigorously to further increase its presence in the overseas

market through tapping new customers and new markets.

The information on Foreign Exchange earnings and outgo

are contained in note no. 25 in the notes to the accounts.

SUBSIDIARY COMPANIES

Crew Home Products Limited.

Crew 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 and the

Company has achieved a turnover of Rs. 1.35 million and the

profit after tax is Rs. 0.08 million.

Crew B.O.S. Far East Limited

The wholly owned subsidiary incorporated in Hong-Kong is

engaged in trading of watch strap business.

The Company achieved a turnover of Rs. 22.76 million and

the profit after tax is Rs. 0.14 million in the year ended on 31st

December, 2006.

Crew MAG Exports Limited

Crew B.O.S. Products Limited has entered into Memorandum

of Understanding with Leather Crafts India (Private) Limited to

manufacture and export all kinds of footwear and footwear

components. The name of the Joint venture Company is Crew

MAG Exports Limited which was incorporated on 17th

November, 2006. Crew B.O.S. Products Limited holds 51%

equity in the Joint Venture Company. The financial statements

of this Joint Venture Company forms the integral part of this

Annual Report.

The Company has not started commercial production during

the year ended on 31st March, 2007.

La Tatva S.r.l. (Italy)

The wholly owned subsidiary could not commence commercial

operations due to increased cost of production in Italy on

account of precarious labour market, high labour cost,

strengthening of EURO against Dollar and high export duties

making the export from Italy too expensive. Due to the afore

stated reasons, the Subsidiary Company is under the process

of liquidation.

As per Italian laws, audit of companies, incorporated in Italy,

is mandatory if the Company is listed on the Italian Stock

Exchange. Therefore, the Auditors' Report of La Tatva S.r.l. is

not appended.

As required under the provisions of Section 212 of the

Companies Act, 1956, the Audited accounts together with

Directors' Report and Auditors' Report of the Subsidiary

Company is appended and forms part of the Annual Report.

The statement pursuant to section 212 of the Companies Act,

1956 is attached as Annexure-1 to this Report.

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 RESULTS

As required by Clause-32 of the Listing Agreement Consolidated

Results and Cash Flow Statement are appended.

PARTICULARS OF EMPLOYEES

As required by the provisions of Section 217(2A) of the

Companies Act, 1956, read with Companies (Particulars of

Employees) Rules, 1975 as amended, the name and other

particular of the employee is set out in the Annexure-2

appended to the Directors' Report.

ACKNOWLEDGEMENTS

Your Directors place on record their sincere gratitude to the

continuing patronage of our valued customers, bankers and

financial institutions, business associates, shareholders,

suppliers and other statutory authorities who have extended

their valuable sustained support and encouragement to your

company. Your Directors look forward to your continued

support and understanding in the years to come.

Your Directors also place on record, their sincere appreciation

to the dedication and commitment of its employees for the

growth of the Company. This has understandably, been

significant for the Company's success.

For and on behalf of the Board

(Tarun Oberoi) (Robin Bartholomew)

Managing Director Director

Place : Gurgaon

Date : 9th June, 2007


Statement Pursuant to Section 212 of the Companies Act, 1956

relating to Subsidiary Companies

1. Name of the Subsidiary Crew Home Latatva Srl* Crew B.O.S. Crew MAGProducts Limited Far East Limited** Exports Limited ^

2. Financial year of the subsidiary ended on 31-3-2007 31-12-2006 31-12-2006 31-3-2007

3. Holding Company's interest 50000 Equity shares 10000 EURO 1000 Ordinary shares 25500 Equity sharesNumber of shares of Rs. 10/- each of USD 1.00 each of Rs. 10/- each

Extent of Holding 100% 100% 100% 51%

4. The net aggregate amount of thesubsidiary's profit less losses so far asit concerns members of HoldingCompany and is not dealt with in theHolding Company's accounts.

(i) at the end of the financial year of RS. 85886.00 EURO ## HK $ 24721 # NILthe subsidiary (5605)

(ii) for the previous financial years of RS. 206861.00 EURO ## HK $ 12723 # NILthe subsidiary since it became the (9531)Holding Company's subsidiary

5. The Net aggregate amounts of the Profitless losses of the subsidiary dealt with inthe Company's accounts

(i) for the financial year NIL NIL NIL NILof the subsidiary.

(ii) for the previous financial year of the NIL NIL NIL NILsubsidiary since it become theHolding Company.

6. No material changes have occurred between the end of the financial year or of the last financial years of the Subsidiary and the end of theHolding Company's financial year, in respect of the subsidiary 's :-

i) Fixed Assetsii) Investmentiii) Moneys lent by it.iv) Moneys borrowed by it for any purpose other than that of meeting current liabilities

There has been no change in the Holding Company's Interest in the Subsidiary Company (s) between the end of the financial years of theSubsidiary and end of the Holding's Company financial year.

Note * Incorporated in Italy and is in the liquidation mode.** Incorporated in Hong Kong# 1 HK $ is equal to Rs. 5.68## 1 EURO is equal to Rs. 58.12^ Crew MAG Exports Limited has not started any commercial operation till 31st March, 2007 being the initial period of operations.

For and on behalf of the BoardDate : 9th June, 2007 (Tarun Oberoi) (Robin Bartholomew)Place : Gurgaon Managing Director Director

(K.V. Ganesh) (Sanjeev Kr. Bajaj)Chief Financial Officer Company Secretary

ANNEXURE - 1

ANNEXURE-2

Statement of particulars of employees pursuant to the provisions of Section 217(2A) of the Companies Act, 1956read with the with Companies (Particulars of Employees) Rules, 1975 and forming part of the Directors’ reportfor the year ended March 31, 2007.

Part – A : Employed for the part of the financial year under review and was in receipt of remuneration in aggregate of notless than Rs. 2,00,000/- per month.

S. Name of Designation Remuneration Nature of Nature of Qualifications Date of The age The last TheNo. the Employee of the received employment, duties of and experience commencement of the employment percentage

Employee. (In Rs.) whether the employee of the of employment employee held by of equitycontractual employee (DOB) such employee shares heldor otherwise before joining by the

the Company employee

1 Mr. K.V. Chief 8,72,027/- Regular Head of B.Com (H), 7.12.2006 44(03.09.62) Corpus NILGanesh Financial Appointment the sector ACA, ACS, Software

Officer (Payroll) /division DTM (ICA) Private Limited

Note : The aforesaid employee is not related to any Director of the Company.

25


CorporateGovernance

ANNEXURE - 3

1. COMPANY'S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE

Corporate Governance is continuous process that needs to be comprehensive to attain the highest standards of corporatevalues and ethics. The Company constantly strives for corporate excellence to ensure high level of transparency, fairnessand accountability in its functioning and conduct of business with due emphasis on regulatory compliances so as to generatesustainable economic value for all its stakeholders. The Board of Directors seeks to discharge its operational, strategic andfiduciary responsibilities in all fairness to ensure good management practices.

The Company duly recognizes the importance of the Code and is strongly committed to good Corporate Governancepractices. The Company endeavors to maximize the value in terms of maximization of wealth, returns and growth of itsstakeholders, customers, shareholders, employees, government, and lenders including the society of which the Company isa part and believes in information to all stakeholders on the performance of the Company.

Your Company is complying with the norms of corporate governance, as defined by Clause 49 of the Listing Agreement ofStock Exchanges and a report on the same is as under:

2. BOARD OF DIRECTORS

a) Composition

The Board of Directors, comprises of Six (6) Directors, out of which Four (4) are Non-Executive Independent Directors.All statutory and material information is made available to the Board of Directors to ensure adequate disclosures andtransparent decision making.

None of the Directors is a member of more than ten (10) Committees, or acts as Chairman of more than five (5) Committees,across all companies in which they are Directors.

b) Board Meetings

During the year ended 31st March, 2007, the Board met 7 times on 3rd June, 2006, 23rd June 2006, 28th July 2006,16th September 2006, 26th October, 2006, 15th December, 2006 and 27th January, 2007.

The composition of Board of Directors, Attendance of Directors at the Board Meeting and Last Annual General Meeting,Directorship in other Public Limited Companies and Membership in Committees as on 31st March, 2007 are as follows:

Name of Directors Category of No. of Attendance No. of No. ofDirectorship / Board at Last Directorship CommitteePromoters/ Meetings AGM held held in other MembershipsIndependent Attended on 28th Companies* held in otherDirector July, 2006 Companies^

Mr. Tarun Oberoi Promoter / Executive Director 6 Yes 2 NIL

Mr. Robin Bartholomew Promoter / Executive Director 7 Yes 2 NIL

Mr. Puneet Nikore # Executive Director 5 Yes NIL NIL

Mr. Naveen Anand ## Non Executive IndependentDirector 2 Yes NIL NIL

Mr. Deepak Manchanda Non Executive IndependentDirector 6 Yes NIL NIL

Mr. Naveen Ganzu Non Executive IndependentDirector 3 Yes 2 NIL

Mr. Jitindar Bir Singh Non Executive IndependentDirector 4 Yes NIL NIL

Mr. Gautam Nair@ Non Executive IndependentDirector 1 No 2 NIL

* Excluding private, foreign and companies registered under section 25 of the Companies Act, 1956

## Resigned from the directorship of the Company w.e.f. 25th October, 2006.

# Resigned from the directorship of the Company w.e.f. 15th December, 2006.

@ Appointed as an Independent Director of the Company w.e.f. 15th December, 2006.

^ Committees here means the Audit and Shareholders'/Investors' Grievance Committee.


c) Brief resume of Directors seeking re-appointment / appointment

In accordance with the provisions of the Companies Act, 1956, one third of its rotational Directors retire every year andif, eligible offers themselves for re-election at every Annual General Meeting of the Company. Consequently, Mr.Naveen Ganzu would retire this year and being eligible, offers himself for re-appointment.

In accordance with the provisions of the Companies Act, 1956, Additional Director of the Company appointed by theBoard during the year can hold office only up to the date of Annual General Meeting of the Company. Consequently,Mr. Gautam Nair would be appointed as Director, liable to retire by rotation in the ensuing Annual General Meeting ofthe Company.

(i) Mr. Naveen Ganzu : Mr. Naveen Ganzu, aged 45 years, holds Post-Graduate qualification in management from IMI,India and the University of St. Gallen (HSG), Switzerland. He is the President of Warman International (India); part ofthe Scotland based global engineering firm, The Weir Group PLC. He has held various managerial positions and havingexpertise in manufacturing and Assembly operation, Automative/Engineering Industry, Greenfield Operations Start-up,Joint Venture and Diversification, Marketing and Communication, Project Management and Product Launch, PeopleDevelopment and Business Process Reengineering.

Mr. Naveen Ganzu does not hold any shares in the Company.

(ii) Mr. Gautam Nair : Mr. Gautam Nair, aged 50, is a Graduate in Economics (Hons) from St. Stephens College, Universityof Delhi and an MBA from the Indian Institute of Management, Ahmedabad (1976-78). He set up Matrix Clothing Pvt.Ltd. in 1980 and has been in the apparel manufacturing and export business since then. He is Managing Director ofMatrix clothing which manufactures both woven and knitted garments and supplies to some of the top brands in USAand Europe including Calvin Klein, Reebok, Greg Norman Collection, Timberland, Old Navy, Next and Esprit. His fieldof specialization includes Business Development, Client Servicing, Supply Chain Management and Finance.

Mr. Gautam Nair does not hold any shares in the Company.

Details of directorship and membership of Committees of Board apart from Crew B.O.S. Products Limited.

Name of the Director Directorship Committee Membership Committee Chairmanship

Mr. Naveen Ganzu 1. Weir Engineering Services NIL NIL(India) Limited

2. Beacon Weir Limited

Mr. Gautam Nair 1. Tex Corp Limited NIL NIL

2. Matrix Zippers Limited

3. AUDIT COMMITTEE

(a) Terms of reference

The terms of reference of the Audit Committee are in line with those specified under Section 292A of the CompaniesAct, 1956 and under revised Clause 49 of the Listing Agreement. The Audit Committee provides direction to the auditfunction in the Company and monitors/reviews the quality of financial management and internal audit. It also overseesthe financial reporting process for proper disclosure in the financial statements and recommends appointment, re-appointment and removal of the auditors and about fixing their remuneration. The Committee also reviews the quarterly,half yearly as well as annual financial statements before the same are submitted to the Board, with particular referenceto matters to be included in Directors' Responsibility Statement, changes, if any, in the accounting policies and practices,major accounting entries involving estimates based on exercise of judgment by the management, significant adjustmentsmade in financial statements, compliance with listing and other legal requirements relating to financial statements,disclosure of related party transactions, qualifications, if any, in the draft audit report etc. It also oversees the workingof the internal audit report system, including the internal control mechanism of the Company.

b) Composition, meetings and attendance:

The Audit Committee comprises of three (3) members, all being Independent Non-Executive Directors.

Name Category Number of meetings attended

Mr. Deepak Manchanda Independent Non-Executive 5

Mr. Naveen Anand ## Independent Non-Executive 4

Mr. Puneet Nikore # Executive Director 4

Mr. Naveen Ganzu Independent Non-Executive Nil

Mr. Gautam Nair Independent Non-Executive 1

## Resigned from the directorship of the Company w.e.f. 25th October, 2006.# Resigned from the directorship of the Company w.e.f. 15th December, 2006.

27


Mr. Deepak Manchanda is the Chairman of the Audit Committee. Company Secretary acts as the Secretary of theCommittee. All the members of the Audit Committee have accounting and financial management knowledge.

During the financial year 2006-2007, the Committee met five (5) times as per detail given below and a time gapbetween two Audit Committee meetings was less than four months:

Date of the Meeting Purpose of the meeting

10th April, 2006 Appointment of the Statutory Auditors and Internal Auditors of the Company.

3rd June, 2006 To review the Audited Financial Results for the Year/Quarter ended on 31st March, 2006.

28th July, 2006 To review the Un-audited Financial Results for the Quarter ended on 30th June, 2006.

25th October, 2006 To review the Un-audited Financial Results for the Quarter/half year ended on 30th September,2006.

27th January, 2007 To review the Un-audited Financial Results for the Quarter /Nine months ended on 31stDecember, 2006.

4. REMUNERATION COMMITTEE.

a Terms of reference

The Remuneration Committee, inter alia, recommends for appointment on the Board, grant of remuneration to theManaging Director/Whole Time Director(s) etc, evaluation of their performance and also framing any remuneration(s)policy in relation thereto.

b) Composition, meetings and attendance

The Remuneration Committee comprises of Mr. Deepak Manchanda, Mr. Naveen Ganzu and Mr. Jitindar Bir Singh, allbeing Non-Executive Independent Directors. Mr. DeepakManchanda is the Chairman of the Committee.

During the year under review, 1 (One) Committee meeting was held on 15th December, 2006 to discuss and torecommend increase in the Remuneration package of theExecutive Directors of the Company.

c) Remuneration Policy

The Executive Directors of the Company are paid, as approved by the Board of Directors, onthe recommendation ofthe Remuneration Committee. The remuneration is decided considering various factors such as qualification, experience,expertise, remuneration prevailing in the industry, financial position of the Company etc.

d) Details of Remuneration to Directors

(i) The following payments are being paid to the Executive Directors of the Company for the financial year2006-2007.

Name Sitting Fees Salary & Perquisites TotalAllowances (Rs.) (Rs.)

(Rs.)

Mr. Tarun Oberoi NIL 3165177/- 977340/- 4142517/-

Mr. Robin Bartholomew NIL 1949150/- 341500/- 2290650/-

Mr. Puneet Nikore# NIL 315350/- 162920/- 478270/-

# Resigned from the directorship of the Company w.e.f. 15th December, 2006.

(ii) The Non Executive Directors do not have any pecuniary relationship or transaction with the Company and are paidthe Sitting Fees (except Mr. Naveen Ganzu) to attend the meetings of the Board of Directors and / or its Committees.

Name Sitting Fees (Rs.)

Mr. Naveen Anand 6600/-

Mr. Deepak Manchanda 14300/-

Mr. Naveen Ganzu –

Mr. Jitindar Bir Singh 6600/-

Mr. Gautam Nair 2200/-

(iii) Non Executive Directors of the Company do not hold any shares in the Company.


5. SHAREHOLDERS' / INVESTORS' GRIEVANCE COMMITTEE.

(a) Terms of reference

The Committee supervises the mechanism for redressal of investor grievances and ensures cordial investor relations,apart from looking into redressal of shareholders' and investors' complaints like transfer of shares, non-receipt of annualreports, non-receipt of dividend and allied matters.

(b) Composition, meetings and attendance

The Committee comprises of 3 (Three) members, majority being Independent NonExecutive Directors. Mr. DeepakManchanda, Independent Director is the Chairman of the Committee. During the financial year 2006-2007, the Committeemet 1 (one) time on 27th January, 2007. The Composition and member's attendance at the Committee meetings ispresented below:

S Name Category Number of meetings attendedNo.

1. Mr. Tarun Oberoi Executive 1

2. Mr. Deepak Manchanda Independent Non-Executive 1

3. Mr. Naveen Anand ## Independent Non-Executive Nil

4. Mr. Jitindar Bir Singh Independent Non-Executive 1

## Resigned from the directorship of the Company w.e.f. 25th October, 2006.

During the financial year ended 31st March, 2007, the Company received 22 requests from the shareholders of theCompany for revalidation of dividend warrant and for issue of demand draft in lieu of non credit of dividend amountthrough Electronic Clearing System,which were disposed off to the satisfaction of Shareholders. The details ofcorrespondence of shareholders / SEBI / Stock Exchanges are being provided to the Committee along with MIS.

6. GENERAL BODY MEETINGS

Details of the last 5 (Five) General Meetings of shareholders held during the last three years are as follows:

Year Date and Category Venue Details of Special Resolution passedTime Resolutions passed through postal ballot

2006-07 08.01.2007 EGM Sri Sathya Sai International Issue of Warrants NIL11.00 A.M. Centre, Pragati Vihar, Lodhi convertible into equity

Road, New Delhi-110003 shares of the Company

Raising of long termfunds though ADR/GDR/QIP issue etc.

2006-07 28.07.2006 AGM Air Force Auditorium, Raising of funds NIL03.00 P.M. Subroto Park, Dhaula Kuan, through issue of

New Delhi-110010 securities in theInternational, DomesticMarket

Raising of FII's limit up to49% of the paid up equitycapital of the Company.

2005-06 28.07.2005 AGM FICCI Auditorium, NIL NIL03.30 P.M. Federation House,

Tansen Marg,New Delhi-110001

2005-06 19.04.2005 EGM Air Force Auditorium, Raising of funds NIL11.00 A.M. Subroto Park, Dhaula Kuan, through issue of

New Delhi-110010 securities in theInternational Market

2004-05 27.05.2004 AGM M-16, 1st Floor, NIL NIL11.00 A.M. Commercial Complex,

Greater Kailash-II,New Delhi-110048

29


7. DISCLOSURES

During the year ended 31st March, 2007, there has been no materially significant transaction entered by the Company withany party, which is considered to have potential conflict with the interest of the Company at large.

There has not been any non-compliance, and no penalties or strictures imposed on the Company by the Stock Exchanges, SEBIor any statutory authority, or any matter relating to the capital markets, since 24th September, 2004, i.e. the date of listing.

The Company has not yet put in place a Whistle Blower Policy. However, no employee has been denied access to the AuditCommittee of the Board of Directors of the Company.

The Company has fully complied with the Mandatory Requirements of Clause 49 of the Listing Agreement, as revised /amended till date.

The Company also partly complies with the Non-Mandatory Requirements of the Listing Agreements such as the RemunerationCommittee of the Independent and Non-executive Directors has been formed to determine on their behalf with agreedterms of reference, the company's policy on specific remuneration packages for executive directors including anycompensation payment.

DISCLOSURES OF ACCOUNTING TREATMENT

While in the preparation of the Financial Statements, the Accountant Standards, issued by The Institute of CharteredAccountants of India (ICAI), have been strictly followed and there is no deviation in any respect.

CEO / CFO CERTIFICATION

The Managing Director and the Chief Financial Officer of the Company have given requisite Certificate to the Board ofDirectors of the Company in terms of Clause V of Clause 49 of the Listing Agreement.

8. MEANS OF COMMUNICATION

The quarterly un-audited results are published in prominent daily newspapers, viz. Economic Times" and "Business Standard"in English and in "Navbharat Times", "Hari Bhoomi", "Jansatta" in Hindi and are also posted on the Company's websitewww.crewbos.com. The quarterly un-audited results and other pertinent communiqués pursuant to the requirements ofthe Listing Agreement are sent by fax as well as by courier, to the Bombay Stock Exchange Limited and National StockExchange of India Limited, where shares of the Company are listed.

The financial results of the Company are also posted on the SEBI's EDIFAR (ElectronicData Information Filing and Retrieval)System and the same can be viewed on the SEBI'S website www.sebiedifar.nic.in.

9. GENERAL INFORMATION FOR SHAREHOLDERS.

a. 18th Annual General Meeting:

Date and Time : 17th Day of September, 2007 at 10.00.A.M.

Venue : Sri Sathya Sai International Centre, Pragati Vihar, Lodhi Road, New Delhi-110003

b. Financial Calendar 2007-2008: (tentative and subject to change)

S. No. Event On or before

1. Results for the 1st Quarter ended 30th June, 2007 31st July, 2007

2. Results for the 2nd Quarter ended 30th September, 2007 31st October, 2007

3. Results for the 3rd Quarter ended 31st December, 2007 31st January, 2008

4. Audited / Quarterly results for the year / quarter ended on 31st March, 2008 30th June, 2008

c. Book Closure Period: Monday, 10th Day of September, 2007, till Monday, 17th Day of September, 2007, (both days inclusive)

d. Dividend:

(i) Payment date :

Dividend, if declared at the Annual General Meeting, will be paid between 24th day of September, 2007to 17th Day of October, 2007

(ii) Payment entitlement :

Dividend will be paid to those members whose names would appear:

– For shares in demat form : as beneficial owner as at the end of business hours on 8th day of September,2007 as per list to be provided by the Depositories of the Company.

– For shares in physical form : as appear in the Register of Members as on 10th day of September, 2007.


e. Listing on Stock Exchanges:

The shares of the Company are listed on the Bombay Stock Exchange Limited and National Stock Exchange of IndiaLimited.

The annual listing fees for the financial year 2006-2007 have been paid to these Stock Exchanges.

f. Stock Code:

1. Bombay Stock Exchange Limited : 532542

2. National Stock Exchange of India Limited : CREWBOS

g. Stock Market Price data:

The monthly high and low quotations of shares traded on the Bombay Stock Exchange Limited and National StockExchange of India Limited, during the period under review are as follows:

Bombay Stock Exchange National Stock Exchange

Month High (Rs.) Low (Rs.) Volumes High (Rs.) Low (Rs.) Volumes

April, 2006 219.00 180.00 977597 217.00 173.60 1236647

May, 2006 256.50 143.00 963823 258.70 141.50 2941303

June, 2006 169.00 76.00 890113 169.95 90.00 982235

July, 2006 168.90 132.55 202840 169.00 121.65 269574

August, 2006 189.50 145.00 603552 189.90 142.60 996978

September, 2006 178.50 152.15 518096 178.00 152.00 901699

October, 2006 194.10 158.00 958394 194.70 159.00 1820464

November, 2006 187.00 154.00 288105 187.50 162.10 758586

December, 2006 268.80 163.50 652995 268.55 165.00 8786934

January, 2007 267.00 229.00 2544972 269.00 227.25 2718882

February, 2007 290.00 183.00 3022501 294.90 183.60 3518833

March, 2007 213.00 163.00 342726 213.00 165.05 10982953

[Source: www.bseindia.com, www.nseindia.com ]

31


h. Registrar and Share Transfer Agents:

M/s Skyline Financial Services Private Limited is the Registrar and Share Transfer Agent of the Company in respect ofshares held in physical and de-mat form.

M/s Skyline Financial Services Private Limited246, 1st Floor, Sant Nagar,East of Kailash,New Delhi- 110 065E-mail: [email protected]

i. Share Transfer System:

M/s Skyline Financial Services Private Limited (RTA) process the share transfer / transmission on fortnightly basis andthe share transfers in the physical form are approved by the Share Transfer Committee.

The Company has Share Transfer Committee consisting of 2 (Two) members, viz. Mr. Tarun Oberoi, Managing Director,Mr. Robin Bartholomew, Director. The Company Secretary acts as Secretary to the Committee. Committee meetings areconvened on the requirement basis to approve the share transfers.

j. Distribution of Shareholding as at 31st March, 2007

No. of Shares No. of Shareholders % of Shareholders Total Shares % of Shareholding

Upto -500 3093 91.15 288200 2.25

501-1000 153 4.48 124018 0.96

1001-2000 56 1.65 83559 0.65

2001-3000 27 0.8 70206 0.55

3001-4000 13 0.39 46706 0.36

4001-5000 8 0.25 37786 0.30

5001-10000 11 0.33 83209 0.65

10001 & above 32 0.95 12084516 94.28

Total 3393 100.00 12818200 100.00

k. Shareholding Pattern as at 31st March, 2007

Category No. of Shares % of Paid up Capital

Promoters Holding 6625261 51.69

Persons acting in concert – –

Mutual Funds 848925 6.62

Banks/Financial Institutions/Insurance Companies 20 0.00

FII's 3810186 29.72

Private Corporate Bodies 329130 2.56

Indian Public 805083 6.28

NRI's 35971 0.29

GDRs 363624 2.84

Total 12818200 100.00

l. De-materialisation of Shares & liquidity

Equity shares of your company are in compulsory de-mat settlement mode and can betraded only in de-mat form.Except 1953 Equity Shares out of total issued capital of the Company, all the shares of the Company are in de-mat form.

As on 31st March, 2007, 128,162,47 Equity Shares of the Company, forming 99.98% of the Share capital of the Companystands Dematerialized.

International Securities Identification Number (ISIN) allotted to the Company by NSDLand CDSL is : INE 514G01019

m. Plant locations :

(i) 172, Udyog Vihar, Phase-1, Gurgaon (Haryana)

(ii) 214, Udyog Vihar, Phase-1, Gurgaon (Haryana)

(iii) Plot No. 8 & 9, Sector-7, IMT, Manesar, Gurgaon (Haryana)

(iv) Plot No. 37, Sector-4, IMT, Manesar, Gurgaon (Haryana)

(v) Plot No. 357 Phase-6, Pace City II, Sector 37, Gurgaon (Haryana)

(vi) Plot No. 162, Sector-4, IMT, Manesar, Gurgaon (Haryana)


Auditors' certificate on compliance of conditions of Corporate GovernanceTo the Members,


We have examined the compliance of conditions of Corporate Governance by Crew B.O.S. Products Ltd. (“the Company”) for the

year ended on March 31, 2007, as stipulated in Clause 49 of the Listing Agreement of the Company with the Stock Exchange(s).

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to

procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate

Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of information and explanation provided to us, we certify that the Company has complied with the

conditions of Corporate Governance as stipulated under abovementioned clause of the Listing Agreement.

We state that no investor’s grievances are pending for a period exceeding one month as per the records placed before the

Shareholders’/Investors’ Grievance Committee.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or

effectiveness with which the management has conducted the affairs of the Company.

For Anil K. Goyal & Associates

Chartered Accountant

(Anil K. Goyal)

Proprietor

FCA. 71221


Place : Gurgaon

(vii) Plot No. 88, Sector-4, IMT, Manesar, Gurgaon (Haryana)

(viii) Plot No. 153, Sector-4, IMT, Manesar Gurgaon (Haryana)

(ix) 140, Leather Complex, Jalandhar (Punjab)

(x) Plot No. 3, Sector-3, IMT, Manesar Gurgaon (Haryana)

n. Outstanding GDRs/ADRs/Warrants/Options/FCCBs

Out of total GDRs issued by the Company, 363624 GDRs, each representing 1 equity shares of Rs. 10/- each areoutstanding as on 31st March, 2007.

The Committee of directors has issued 12,50,000 warrants, convertible into equity shares of the Company on preferentialbasis to promoters and others at a premium of Rs. 168/- per share on the face value of Rs. 10/- each on 22nd January,2007, pursuant to shareholders'approval granted in the EGM held on 8th January, 2007. As on 31st March, 2007, noneof the holder of warrants has exercised an option.

o. Address for Correspondence

The Company Secretary199, Udyog Vihar, Phase-1, Gurgaon-122016Tel: 0124-4139400, Fax: 0124-4005011,Email : [email protected]

10. CODE OF CONDUCT:

As per the requirement of the Listing Agreement, Company has formulated Code of Conduct for the Board members andSenior Management Personnel of the Company so that the Company's business be conducted in an efficient and transparentmanner without having any conflict of personal interests with the interests of the Company. The code of conduct is availableon the website of the Company www.crewbos.com. All Board members and Senior Management Personnel have affirmedcompliance with the Code of Conduct.

Declaration under clause 49 I(D) of the listing agreement regarding adherence to the Code of Conduct

It is hereby declared that the Company has obtained from each individual member of theBoard of Directors and the SeniorManagement, a confirmation that none of them has violated the conditions of the said Code of Conduct.

For Crew B.O.S. Products Limited

(Tarun Oberoi)Managing Director

33


The hard work complemented by the down to earth practicality,lateral thinking has started giving definite shape and form toour vision. The road to excellence from 1989 has crossed animportant milestone and taken your company to a new level.Your company has become one of the leaders in its sector andis on track to achieve its bigger vision of being the leadingmanufacturer and supplier of finished leather, leatheraccessories, bags & closed and open footwear in the country.

The developed world is faced with continual rising labour costs,slow population growth rates and youngsters not keen tocontinue in family owned leather businesses. Italy is seeingclosure of traditional leather business particularly in the shoemaking Industry. Your company firmly believes that everychallenge in the Western World is an opportunity and hasdrawn out a clear plan to capitalise on this great offering.

The company believes that luxury shoe manufacturing willhave to shift from the Italy to the developing countries. Keepingin mind the inevitable your company is taking all initiative intrying to shift the centre of excellence from Italy to India. Itsvision to make India the hub for manufacturing luxury brandswhich would be spearheaded by Crew B.O.S. is going fullthrottle ahead.

The company has taken initiatives in further improving andupgrading their manufacturing and management systems andstaying abreast with modern technology. Your company hasachieved this growth by judicious management, increasedefficiencies and optimal utilisation of manpower and machines.

SYNOPSIS OF THE INDUSTRY

The fashion design industry has always been extremelycompetitive, but with globalization, ever expanding mediaoutlets and conforming social pressure, fashion design hasbecome even more cut-throat in recent years.

Fashion design is largely regarded as extremely glamorous andexciting, and as a result, India has been sole and a chiefexporter for providing ethnic designs and accessories in globalfashion market. Although India continues to be globallyacknowledged as a country for its rich textile heritage, thefashion industry still faces infrastructural and businesschallenges. Crew B.O.S substantiates its growth and maintainsits position as a leading manufacturer through its enormousabilitities, skills and talents.

The leather industry's exports stood at $3.1 billion in 2006-07against $ 2.7 billion in 2005-06. Reports suggest that theprospective plans are developed to increase the exports to thetune of US$ 7 billion by 2010-11 and as per estimates aboutRs. 7,300 Crores would be required in the form of investmentsin the next five to six years. The USA, UK, Italy, Germany,France, Spain, Netherlands, Australia, Denmark are the majormarkets for Indian Leather goods accounting for a share of75% in India's total leather goods export.

FUTURE PROSPECTS

The Company is in an immense way ahead to enlarge itsbusiness and commerce by joining hands with the leadingupmarket fashion houses and entering into the profitable jointventures. The Company is likely to augment the market in

International globus by setting up its twigs all around. Lookingover the constant and continuous development and demandsin the domestic market, the Company is focusing the retailmarkets as well.

Our exports are rising fast and will be a key facet in theapproaching future. With the diversified range of products andcontinuously building the strong relations with the customers,the Company is in the process of achieving the enormous meansof success at the forefront.

VISIONS AND INTIMIDATION

The opportunities far outweigh the threats in this fast growingindustry. The developed world is facing its own intricacy inthe manufacturing sector and the decline of the shoe makingindustry in Italy is imminent. China, though a major competitor,is slowly losing its edge due to the Western World Customersfinding it very hard to do business because of the lack ofadequate protection of Intellectual property rights and languageissues. The initiatives taken by Council of Leather Exports ofIndia to grow this Industry and incentives provided for theleather Industry is helping us to be more competitive. Nichemanufactures all over the world are looking more towards Indiathan China to produce top end luxury brands due similarity inideologies.

Though high volume low value business is still controlled byChina and Vietnam, your company is intentionally moving outof this segment and concentrating on high end products whichprovide greater contribution and statistics show that thissegment is continuously growing in the fast growing luxurygoods. Technology advancement and innovation have alwaysbeen the key areas of focus for the company to overcomepossible threats. Your company keeps abreast with the dynamicfashion industry by employing a vibrant team of extremelytalented designers who keep themselves updated with the latestin fashion, which gives us a clear edge over our competitors.

RISK AND CONCERNS

Leather being a natural product requires great skill sets for itsprocurement. No two leather hides are identical and leather isall touch and feel. To get the correct skill set could be achallenge but your company has launched a Crew B.O.S.Academy which has a faculty of International and Nationaltrainers who impart training to carefully selected students whoare after completing successful training are absorbed by thecompany. Change in fashion trends is an additionalindispensable concern associated with the industry.

Foreign Exchange exposure is an integral part of our businessand we along with the assistance of reputed consultants takereasonable measures to mitigate our risks.

HUMAN RESOURCES

Crew B.O.S. has very cordial Industrial and labour relations.We continue to believe in the importance of people being akey resource for the success of our business. We take all possiblemeasure to make Crew B.O.S a great place to work. Crew B.O.SAcademy is churning out highly skilled and motivatedemployees. The company has recruited 598 persons in theprevious year with keeping an eye on its future expansions

ManagementDiscussion & Analysis

ANNEXURE - 4


and developments and reaching at level of 2666 employeesinclusive of Contractual employees.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Crew B.O.S. has an adequate internal audit and control system.The system is vetted by the Board of Directors and its AuditCommittee, reaches down to all levels of management andfunctions, and provide reasonable assurance regarding theeffectiveness and efficiency of operations, reliability of financialreporting and compliance with applicable laws and regulation.The internal audit process is conducted internally and throughexternal auditors. We believe that Crew B.O.S. internal controlsystems are adequate & effective for the current size and natureof its operations and are aligned with global best practices.

FINANCIAL COMPARISON OF FISCAL YEAR 2007 WITH2006

The Company's Financial Statements have been prepared inaccordance with the requirements of Indian GenerallyAccepted Accounting Principles (GAAP) and the CompaniesAct, 1956 in India. The Crew B.O.S. Management acceptsresponsibility for the integrity and objectives of these financialstatements.

Fiscal Year 2007 pertains to the year that commenced on April1, 2006 and ended on March 31, 2007. Fiscal Year 2006pertains to the Year that commenced on April 1, 2005 andended on March 31, 2006.

More than the physical and tangible strengths, our intellectualwealth is playing a crucial role in sustaining our growth. Theadvantages that have accrued as a result are apparent and forall to see.

1. Income from operations

Total Income from operations for the Fiscal Year 2007aggregated to Rs. 2053.8 million, representing an increaseof 53.1% from Rs. 1341.5 million in fiscal year 2006. Table1 presents a break - up of total income from operations forfiscal year 2007 and 2006.

Year Ended March 31

Particulars 2007 2006 Growth

(Rs. Million) % (Rs. Million) % %

Exports 2024.2 98.6 1300.1 96.9 55.7

Domestic 5.8 0.3 23.1 1.7 (74.9)

Duty Drawback 23.8 1.2 18.3 1.4 30.1

Total 2053.8 100.0 1341.5 100.0 53.1

Table 1: Break-up of total income from operations for fiscalyear 2007 and 2006

(i) Export Sales

Export sales are primarily generated from export of fashionaccessories. Export sales for fiscal year 2007 stood at Rs.2024.2 million, representing an increase of 55.7% fromRs. 1300.1 million in fiscal year 2006.

- Sales Breakup

The company's sales generated from export of fashionaccessories and leather can be classified into followingproduct categories:

a) Fashion Bags

b) Fashion Belts

c) Fashion Footwear

d) Wallets

e) Gift & Home items and other small goods

f) Finished Leather

The break-up of sales from these product categories hasbeen reflected below:

Year Ended March 31

Particulars 2007 2006 Growth

(Rs. Million) % (Rs. Million) % %

Fashion Bags 703.8 34.7 472.4 35.7 49.0

Fashion Belts 494.4 24.4 411.0 31.1 20.3

FashionFootwear 364.2 17.9 208.7 15.8 74.5

Wallets 128.7 6.3 33.3 2.5 286.5

Gift & Homeitems andsmall goods 111.0 5.5 140.8 10.6 (21.2)

Finished Leather 227.9 11.2 56.9 4.3 300.5

Total 2030.0 100.0 1323.1 100 53.4

During the fiscal year 2007, fashion bags and belts businessamounted to Rs. 703.8 million and Rs. 494.44 millionrespectively as compared to Rs. 472.4 million and Rs. 411million respectively in the fiscal year 2006. There wasincrease in volumes from strategic customers and additionof new customers in the Crew B.O.S. basket of customer.During the year almost 3 % of export sales came fromaddition of new customers.

The list of top ten customers and their % contribution to exportsales are:

Sr. No. Name of Customer % Contribution

1 The Gap Inc. 23.08

2 Fossil Retail Stores. 18.43

3 William Sonoma Inc. 12.23

4 Chicos Retail Services Inc. 8.88

5 Debenhams Retail Plc 6.45

6 Next Retail Plc 3.78

7 Monsoon Accessories Ltd. 3.72

8 Esprit Canada Wholesale Ltd. 3.34

9 Liz Claiborne Canada Inc. 2.33

10 Fat Face Ltd. 2.32

Continued efforts of the Company to de - risk its dependenceon few customers have yielded good results in fiscal year.During the current year Company added new customersto its customer list i.e. Humphreys Acessorise LLC, DillardsStore Services Inc., Carsil venere SPA etc.

Crew B.O.S. continues to focus on strengthening itspresence in Europe and the rest of the world.

35


2. Expenditure

i. Material Manufacturing and Other ManufacturingExpenses

The total material manufacturing and othermanufacturing expenses has reduced to 69.58% ofincome from operation in the fiscal year 2007 from70.15% of income from operations in fiscal year 2006.The following factors resulted in improvement in grossmargins.

ii) Backward Integration

The backward integration strategy has increased its payoffs, during the fiscal year 2007, leather divisionsupplied leather worth Rs. 204.6 million for in-houseconsumption. There is reduction in import of finishedleathers, as the finishing unit has increased itsproduction and also due to the development/improvement in the technical processing capabilitiesin India.

iii) Contract Manufacturing

The outsourced processes has helped in developing newvendors/partners accordingly resulting into costefficiency simultaneously our in-house QualityAssurance Team ensures that there are no compromiseswith regard to the quality of the product.

iv) Consolidation of Operations

During the fiscal year 2007, the Company hadconsolidated its four separate units of Fashion bagsunder one roof in Manesar, Gurgaon and is in theprocess of further consolidating the operations to fetchhigher efficiency in productivity and lower cost ofproduction.

v) Investment in Fixed Assets

The Company has invested Rs. 381.9 million in theFixed Assets to make its manufacturing processesmechanized there by reduction in the cost of productionleading to better product at cheaper cost.

vi) Personnel, Administrative & Selling Expenses

Personnel, Administrative expenses stood at 14.82%of Income from operations in the fiscal year 2007 ascompare to 14.41% in fiscal year 2006. The increase ismainly due to:

a) Increase in Personnel Department's Costs where inthe manpower was increased and required rise weregiven to meet the expansion plans.

b) Increase in Security & Office Expenses to bring thebetter control in place and to improve the workenvironment.

vii)Interest and Finance Charges

The interest and finance charges are 3.81% of theincome from operations in the fiscal year 2007 ascompare to 3.74% of the income from operations inthe fiscal year 2006. The average interest cost has comedown to 7.24% of average borrowings in fiscal year2007 from 8.2% of average borrowings in Fiscal year2006. The decrease was due to term loan borrowedfrom Citi Bank N.A. for Rs. 24.6 million at rates lowerthan the rates enjoyed in the fiscal year 2006.

The company is in the expansion phase and would needsupplementary funds for enhancement of its existingfacilities, Finishing unit, and the new project to beinitiated at Neemrana, Rajasthan and also fordiversification purposes. The requirement of the fundsis proposed to be met by Internal Accruals and freshborrowings on long term basis.

viii)Taxation

Current Income tax has been provided on income notexempted under the tax laws. Approximately 89% ofthe turnover came from 100% EOU facilities which areexempt under section 10 B of the Income tax Act, 1961.

The FBT for the fiscal year 2007 was Rs. 2.5 millionwhile the same has an impact of Rs. 2.7 million for thefiscal year 2006.

3. Earnings before Interest, Depreciation, Taxation andAmortization (EBIDTA)

The Operating Profit for the fiscal year 2007 (EBIDTA) wasRs. 340.9 million, representing 18.45% of income fromoperations as against Rs. 236.9 million, representing18.02% of income from operations for the fiscal year 2006.

4. Profit after Tax

Profit after tax for the fiscal year 2007 grew to Rs. 221.5million from Rs. 155.2 million in the fiscal year 2006representing an increase of 42.72 % over the fiscal year 2006.

5. New Developments

In Jan' 2007, the company has issued 12,50,000 sharewarrants @ Rs. 178 having face value of Rs. 10 eachconvertible into equity share capital in the period of 18months to arrange Rs. 222.5 millions for the requirementof the company of which Rs. 29.85 millions are receivedin the fiscal year 2007.

The Company has entered into a Joint Venture forproduction of Fashion & leather Footwear with 51% sharecontribution in Crew MAG Exports Pvt. Ltd. in associationwith Leather Crafts (India) Pvt. Ltd. the contributor of 49%.

The Company has also incorporated an entity in Italy bythe name of "Iguvium Srl" with the objective to enhancethe stake of the Company in the Fashion accessories andfrills in the International Markets.

6. Financial Position

i) Share Capital

The Company increased its Authorized Share Capital toRs. 200,000,000/- comprising of 19,000,000 EquityShares of Rs. 10/- each and 1,000,000 Preference Sharesof Rs. 10/- Each during the fiscal year 2007 from theexisting level of Rs. 165,000,000 comprising of16,000,000 Equity Shares of Rs. 10/- each and 500,000Preference Shares of Rs. 10/- each in the fiscal year 2006.

The paid up capital of the company stood at Rs. 128.2million for the fiscal year 2007 i.e. the same as of fiscalyear 2006. The Company has issued 1250,000 sharewarrants convertible into equity shares of Rs. 10 each


at a premium of Rs. 168 of which Rs. 29.85 millions arereceived to meet the requirements in fiscal year 2007.

ii) Reserves and Surplus

During the fiscal year 2007, addition to the Reserve &Surplus is due to surplus available in Profit & LossAccount and transfer to General Reserve.

iii) Secured Loans

The overall secured loan for the year stood at Rs. 732.3million as compared to Rs. 451.8 million in the previousyear. The changes are due to:

a) Increase in the working capital limit because ofsignificant increase in the export turnover.

b) Term Loan from HSIDC sanctioned in the fiscal year2007 amounted to Rs. 82.4 million as compared toRs. 44.1 million in the fiscal year 2006.

c) Disbursement of Term Loan from Citi Bank NAsanctioned in the previous year with an outstandingstood at Rs. 24.6 million at the end of the year.

d) Decrease in Hire purchase obligations on accountof fresh assets financed during the year.

e) Reduction in the Term Loans from Citibank andKarur Vysya Bank Limited on account of repayment/prepayment made during the year.

iv) Fixed Assets

The company invested an amount of Rs. 381.9 millionin capital assets in the Fiscal year 2007 as compared toRs. 191.6 million in the Fiscal Year 2006. The increasein fixed assets during fiscal year 2007 was due toinvestment in expansion plan and development of ERPsystem.

v) Investments

The investments at the end of the year stood at Rs. 9.3million representing the amount invested in thesubsidiaries.

vi) Inventories

Inventories stood at Rs. 647.7 million in the Fiscal Year2007 as against Rs. 444.6 million in the Fiscal Year2006. The inventories to export turnover has comedown from 34 percent to 32 percent. The inventorydays were 115 days in the fiscal year 2007 from 123days in the Fiscal Year 2006.

vii)Sundry Debtors

Sundry Debtors as of March 31, 2007 were Rs. 257.6million as against Rs. 184.6 million as of March 31,2006. These debtors are considered good andrealizable. There has been decrease in number of daysoutstanding of debtors to 46 days in fiscal year 2007from 51 days in the fiscal year 2006.

viii)Cash & Bank Balances

Cash and Bank Balances stood at Rs. 23.5 million forthe fiscal year 2007 as against Rs. 43.3 million in theFiscal year 2006 to improve the operations of the funds.

ix) Loans and Advances

Loan and advances as of March 31, 2007 haveincreased to Rs. 189.6 million from Rs. 132.1 millionas at the end of Fiscal year 2006. The increase is mainlyon account of:

a) Expenses incurred for subsidiary, Crew MAG ExportsLimited

b) Duty Drawback Receivable on deemed exports

c) Advances to Wholly owned subsidiary, Crew HomeProducts Limited.

d) Security Deposits

e) Advances to staff

f) Advance income tax

x) Sundry Creditors

Sundry Creditors include amount payable to vendorsfor supply of goods and services and amount accruedfor operational expenses.

The average credit period for the fiscal year 2007 stoodat 58 days as compared to 59 days in the financial year2006.

xi) Miscellaneous Expenditure

Miscellaneous Expenditure stood at Rs. 10.1 million infiscal year 2007, as against Rs. 11.7 million in fiscalyear 2006. The decrease is due to charging off theproportion which exceeds the expenditure incurredtowards the proposed QIP issue and GDR issueamounting to Rs. 1.83 million.

Cautionary Statement

Statements in the Management Discussion and Analysis reportand other Sections relating to the Company's Objectives,projections, outlook, expectations etc. may be forward lookingstatements within the meaning of applicable law andregulations. Actual results could differ materially from thoseexpressed or implied. Several factors could make significantdifference to the Company's operations. These include climaticconditions, economic conditions, government rules andregulations, economic developments, natural calamities, etc.over which the Company does not have the direct control.

37


d) In our opinion, the Balance Sheet, Profit and LossAccount and Cash Flow Statement dealt with by theReport comply with the accounting standards referredto in Sub-Section (3C) of Section 211 of the CompaniesAct, 1956.

e) On the basis of written representation received fromthe directors and taken on record by the Board ofDirectors, we report that none of the Directors isdisqualified as on 31st March, 2007 from beingappointed as a Director in terms of clause (g)of subsection (1) of section 274 of the Companies Act, 1956.

(f) In our opinion and to the best of our knowledge andinformation and according to the explanations givento us, the accounts give the information required bythe Companies Act, 1956, in the manner so requiredand give a true and fair view :-

(i) In the case of the Balance Sheet, of the state ofaffairs of the Company as at March 31st, 2007.

(ii) In the case of the Profit & Loss Account of theprofit for the year ended on that date.

(iii) In the case of the Cash Flow Statement, on thecash flows for the year ended on that date.



(Anil K. Goyal)ProprietorFCA 71221

Date : 9th June, 2007Place : Gurgaon

To the Members,


We have audited the attached Balance Sheet of Crew B.O.S.Products Limited, as at 31st March, 2007 and Profit & LossAccount and Cash Flow Statement for the year ended on thatdate annexed thereto. These financial statements are theresponsibility of the Company's Management. Our responsibilityis to express an opinion on these financial statements based onour audit.

We conducted our audit in accordance with auditing standardsgenerally accepted in India. Those standards require that weplan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of materialmisstatements. An audit also includes assessing the accountingprinciples used and significant estimates made by management,as well as evaluating the overall financial statement presentation.We believe that our audit provides a reasonable basis for ouropinion.

1. As required by the Companies (Auditors report) Order,2003 issued by the Central Government of India in termsof Section 227(4A) of the Companies Act, 1956, we annexhereto a statement on the matters specified in paragraph 4& 5 of the said order.

2. Further to our comments in the annexure referred to inparagraph 1 above :-

a) We have obtained all the information and explanationswhich to the best of our knowledge and belief werenecessary for the purpose of our audit.

b) In our opinion, proper books of account, as requiredby Law, have been kept by the Company so far asappears from our examination of the books.

c) The Balance Sheet, Profit and Loss Account and CashFlow Statement dealt with by this report are inagreement with the books of account.

Auditors'Report


1) a) The Company has generally maintained proper

records showing full particulars including

quantitative details and situation of Fixed Assets.

b) The management has physically verified the Fixed

Assets at reasonable intervals and no material

discrepancies are reported to have been observed onsuch verification as compared to book records.

c) In our opinion, and according to the information and

explanations given to us, the company has not

disposed off a substantial part of fixed assets during

the year and therefore paragraph 4(i) (c) of theCompanies (Auditor 's Report) Order, 2003

(hereinafter referred to as the Order) is not

applicable.

2) a) The Inventory have been physically verified by the

management during the year. In our opinion thefrequency of verification is reasonable.

b) In our opinion, the procedures of physical

verification of inventory followed by the

Management are reasonable and adequate in

relation to the size of the company and the nature ofits business.

c) On the basis of our examination of the inventory

records, in our opinion, the company is maintaining

proper records of inventory. The discrepancies

noticed on physical verification of inventory ascompared to book records were not material.

3) The Company has granted unsecured loan to its onesubsidiary company amounting to Rs. 221.14 lacs. The

terms and conditions thereof are not prejudicial to the

interest of the company. The company has not taken anyloans secured or unsecured, to/from companies, firms or

other parties covered in the register maintained under

section 301 of the Act.

4) In our opinion, and according to information and

explanations given to us, there are adequate internal

control procedure commensurate with the size of theCompany and the nature of its business for the purchase of

stores & spare parts, fixed assets , and with regard to sale of

products and there are no major internal control

weaknesses in regard thereto.

5) The transactions that need to be entered into a register inpursuance of section 301 of the Companies Act have been

entered. According to the information and explanations

given to us , purchase of goods and sale of services

aggregating during the year to Rs. 5,00,000/- or more in

respect of a party in pursuance of contracts or

arrangements entered into the register maintained under

section 301 of the Companies Act, 1956 have been made

at prices which are reasonable having regard to prevailingmarket prices at the relevant time for such goods.

6) In our opinion and according to the information andexplanations given to us, as the Company has not

accepted deposits from the public, paragraph 4(vi) of the

Order is not applicable.

7) In our opinion the Company has an internal audit system

that is commensurate with the size and nature of itsbusiness.

8) We are informed that maintenance of cost records has not

been prescribed by the Central Government under Section

209(1)(d) of the Companies Act, 1956 in respect of

activities of the company and therefore paragraph 4(viii) ofthe Order is not applicable.

9) In our opinion and according to the information and

explanations given to us, the company is generally regular

in depositing undisputed statutory dues including

Provident Fund, employees' state insurance, investoreducation and protection fund, income tax, sales tax,

wealth tax, service tax, custom duty, excise duty ,cess, and

other statutory dues, as applicable to its activities, with

appropriate authorities. There are no arrears of outstandingstatutory dues as at 31st March, 2007 for a period of more

than six months from the date they became payable. As

explained to us, the Company did not have any dues on

account of investor education and protection fund. Asexplained to us, there are no disputed dues of sales tax,

income tax, customs duty, wealth tax, service tax, excise

duty and cess that have not been deposited on account of

any dispute and therefore paragraph 4(ix)(b) of the Order isnot applicable.

10) The company has neither accumulated losses as at the end

of the financial year nor it incurred cash losses in the

current financial year as well as in the immediately

preceding financial year.

11) According to the records of the company examined by usand the information and explanations given to us, the

Company has not defaulted in repayment of dues to any

financial institutions or bank.


explanations given to us the Company has not granted any

loans or advances on the basis of security by way of pledgeof shares, debentures and other securities and therefore

paragraph 4(xii)of the Order is not applicable.

Annexures referred to in para 1 of the Auditors' Report to the Members of Crew

B.O.S. Products Limited Accounts for the year ended March 31st, 2007

39



explanations given to us, the provisions of any specialstatute applicable to chit fund and nidhi/mutual benefit

fund/society are not applicable to the company and

therefore paragraph 4(xiii) of the Order is not applicable.

14) In our opinion the company has maintained proper

records of transaction of investments in mutual funds. Thecompany is not dealing or trading in shares, securities and

debentures.

15) According to the information and explanations given to us,

the company has not given any guarantee for loans taken

by others from banks or financial institutions during the

year.

16) The company has availed term loans from a bank/financialinstitutions. According to the information and explanation

given and in our opinion these term loans were applied for

the purpose for which the loans were obtained except

External Commercial Borrowings of Rs. 819.27 lacs whichas explained, pending utilization is lying in Nostro

Account.

17) Based on examination of documents and records made

available and on the basis of information and explanations

given to us, the company has not used funds raised onshort term basis for long term investments and vice versa.

18) In our opinion and based on the information and

explanations given to us, during the year the Company has

made preferential allotment of shares / warrants on private

placement basis to parties and companies covered in the

Register maintained under section 301 of the Companies

Act, 1956 and shares / warrants have been issued at a pricewhich is not prejudicial to the interest of the Company.

19) The company has not issued any debentures during the

year and therefore paragraph 4(xix) of the Order is not

applicable.

20) During the year under review, no money was raised by

public issue and as such disclosure of end use of moneyraised is not applicable.

21) During the course of our examination of the books andrecords of the company, carried out in accordance with the

auditing standards generally accepted in India, we have

neither come across any instance of fraud on or by the

company, noticed or reported during year nor we havebeen informed of such case by the Management.



(Anil K. Goyal)

Proprietor

FCA 71221



Balance Sheet

Schedule Amount (Rs.) Amount (Rs.)31-Mar-2007 31-Mar-2006

SOURCES OF FUNDS

SHAREHOLDERS FUNDS

Share Capital 1 128,182,000 128,182,000

Equity Warrants Issued and Subscribed 29,850,000 –(Refer Note No. 9)

Reserves & Surplus 2 774,637,317 575,099,072

LOAN FUNDS :

Secured Loan 3 732,306,613 451,760,463

DEFERRED TAX LIABILITY / (ASSET) 2,706,518 (2,693,482)

TOTAL 1,667,682,448 1,152,348,053


Fixed Assets :

Gross Block 4 919,324,934 537,438,805

Less : Depreciation (114,856,258) (79,584,927)

Net Block 804,468,676 457,853,878

INVESTMENTS 5 9,301,250 92,087,460

Current Assets, Loan & Advances

Inventories 6 647,656,013 444,632,351

Sundry Debtors 7 257,546,472 184,579,932

Cash & Bank Balances 8 23,517,985 43,339,602

Loan & Advances 9 189,550,398 132,095,601

1,118,270,868 804,647,486

Less : Current Liabilities & Provisions

Current Liabilities 10 250,011,975 200,898,356

Provisions 11 24,443,065 13,019,977

274,455,040 213,918,333

NET CURRENT ASSETS 843,815,828 590,729,153

Miscellaneous Expenditure 8,929,467 9,926,719(to the extent not written off or adjusted)

Deferred Revenue Expenditure 1,167,227 1,750,843

TOTAL 1,667,682,448 1,152,348,053

Significant Accounting Policies and 17Notes forming part of the AccountsCash Flow Statement

as per our report of even date attached.

For Anil K. Goyal & Associates For and on behalf of the BoardChartered Accountants

(Anil K. Goyal) (Tarun Oberoi) (Robin Bartholomew)Proprietor Managing Director DirectorFCA 71221

Date : 9th June, 2007 (K.V. Ganesh) (Sanjeev Kr. Bajaj)Place : Gurgaon Chief Financial Officer Company Secretary

as at March 31, 2007

41





Profit and Loss AccountFor The Year Ended March 31, 2007

Schedule Amount (Rs.) Amount (Rs.)31-Mar-2007 31-Mar-2006

INCOME

Income from Operations 12 2,053,849,534 1,341,468,667

Less : Inter-unit Transfer(s) 206,585,240 26,780,454

Net Income from Operations 1,847,264,294 1,314,688,213

Other Income 13 5,919,140 4,591,852

Increase / (Decrease) in Stocks 14 43,790,170 27,324,398

TOTAL 1,896,973,604 1,346,604,463

EXPENDITURE

Material Manufacturing & Others 15 1,285,380,239 922,194,085

Personnel, Administration & Selling 16 273,837,258 189,479,891

Interest & Finance Charges 70,299,875 49,145,598

Depreciation 32,604,716 29,595,502

TOTAL 1,662,122,088 1,190,415,076

Profit Before Taxation 234,851,516 156,189,387

(Less) : Provision for Taxation (7,769,100) (5,712,000)

Add / (Less) : Deferred Tax Liability (5,400,000) 6,269,843

221,682,416 156,747,230

Add / (Less) : Tax Adjustments of Prior Years (70,440) 315,920

Add / (Less) : Adjustments of Prior Years (149,803) (1,879,046)

Profit After Taxation 221,462,173 155,184,104

Balance in Profit and Loss Account 243,738,135 110,703,574

Profit available for Appropriation 465,200,308 265,887,678

APPROPRIATIONS

Proposed Dividend 9,613,650 6,409,100

Interim Dividend 9,613,650 9,613,650

Transfer to General Reserve 11,073,109 3,879,603

Provision for Tax on Proposed Dividend 1,348,315 1,348,314

Tax on Interim Dividend 1,348,314 898,877

Balance Carried to Balance Sheet 432,203,270 243,738,135

465,200,308 265,887,678

E.P.S. [Basic] In Rs. 17.28 12.67

E.P.S. [Diluted] In Rs. 16.96 12.67

Significant Accounting Policies and 17

Notes forming part of the Accounts

Cash Flow Statement

as per our report of even date attached.


Cash Flow StatementFor The Year Ended 31st March, 2007

Amount (Rs.) Amount (Rs.)31-Mar-2007 31-Mar-2006

A. Cash flow from operating activities:

Net (loss)/profit before tax but after exceptional/extraordinary items 234,851,519 156,189,387Adjustments for:

Depreciation 32,604,713 29,595,502Interest Expense 70,299,875 49,145,598Interest Income (1,356,830) (3,045,650)Income from Investment - Dividends/Mutual Funds (1,690,009) (1,209,952)(Profit)/Loss on Fixed Assets sold 458,969 54,130(Profit/Loss on sale of Investments (2,739,125) (336,251)Deferred revenue expenditure written off 3,122,768 1,968,140Unrealised foreign exchange (gain) /loss 1,060,403 –

Operating profit before working capital changes 336,612,283 232,360,904Adjustments for changes in working capital :– (INCREASE)/DECREASE in Sundry Debtors (70,510,929) (58,390,098)– (INCREASE)/DECREASE in Other Receivables (51,558,823) (43,206,159)– (INCREASE)/DECREASE in Inventories (203,023,662) (169,253,743)– INCREASE/(DECREASE) in Trade and Other Payables 49,070,528 17,665,979Cash generated from operations 60,589,396 (20,823,116)– Taxes (Paid) / Received (Net of TDS) (6,881,861) (5,325,641)– Prior Period (Expenses)/Income (Net) (220,243) (1,563,127)Net cash from operating activities 53,487,292 (27,711,884)

B. Cash flow from Investing activities:

Purchase of fixed assets (383,895,903) (192,687,837)Proceeds from Sale of fixed assets 744,500 247,159Proceeds from Sale of Investments 93,714,835 336,251Purchase of Investments (8,189,500) (56,489,224)Miscellaneous Expenditure (1,541,900) (5,773,144)Interest Received (Revenue) 2,342,717 1,945,447Dividend Received 1,690,009 1,209,952Net cash used in investing activities (295,135,242) (251,211,396)

C. Cash flow from financing activities:

Proceeds from fresh issue of Share Capital (including Share Premium) 29,850,000 218,184,000Proceeds from long term borrowings 58,012,813 12,628,641Proceeds from short term borrowings 222,533,337 129,789,768Interest Paid (70,299,875) (49,145,598)Dividend Paid (16,022,750) (20,613,650)Dividend Tax Paid (2,247,191) (2,785,877)Net cash used in financing activities 221,826,334 288,057,285Net Increase/(Decrease) in Cash & Cash Equivalents (19,821,617) 9,134,005Cash and cash equivalents as at 31.03.2006 43,339,602 34,205,597Cash and Cash Equivalents Acquired on Acquisition – –Cash and cash equivalents as at 31.03.2007 23,517,985 43,339,602Cash and cash equivalents compriseCash, Cheques & Drafts (in hand) and Remittances in Transit 2,032,210 2,901,728Balance with Scheduled Banks 21,485,775 40,437,874

23,517,985 43,339,602

Notes :1. The above Cash flow statement has been prepared under the indirect method setout in AS-3 issued by the Institute of Chartered Accountants

of India.2. Figures in brackets indicate cash outgo.3. Previous period figures have been regrouped and recast wherever necessary to conform to the current period classification.




43


SchedulesForming Part of the Financial Statements

(Secured by hypothecation of all the inventories, book debts including receivables, lien on other current assets of the Companyand further collaterally secured by a first charge on the fixed assets at Head Office and Factories at Gurgaon (Haryana) andpersonal guarantee by Promoter Directors and by Corporate Guarantee of the Associate Companies and Demand Promissory Notesigned by Promoter Directors on behalf of the Company.)


SCHEDULE : 1

SHARE CAPITAL

AUTHORISED SHARE CAPITAL

19,000,000 Equity Shares of Rs. 10/- each 190,000,000 160,000,000(Previous year 16,000,000 Equity Shares of Rs 10/- each)

1,000,000 Preference Share of Rs 10/- each 10,000,000 5,000,000(Previous year 500,000 Preference Shares of Rs 10/- each)

TOTAL 200,000,000 165,000,000

ISSUED, SUBSCRIBED & PAID UP

12,818,200 Equity Shares of 128,182,000 128,182,000Rs. 10/- each fully paid up.

TOTAL 128,182,000 128,182,000

SCHEDULE : 2

RESERVES & SURPLUS

GENERAL RESERVE

Opening Balance 31,340,838 27,461,235

Transferred from Profit & Loss a/c 11,073,109 3,879,603

42,413,947 31,340,838

SECURITY PREMIUM

Opening Balance 300,020,100 100,018,100

Add : Received on account of issue of GDR/Equity Shares – 200,002,000

300,020,100 300,020,100

Surplus in Profit & Loss Account 432,203,270 243,738,135

TOTAL 774,637,317 575,099,072

SCHEDULE : 3

SECURED LOANS

Packing Credit Limit 490,452,488 274,016,618

Foreign Bills Purchased by Bank 129,522,974 123,425,507

Vehicle / Equipment Loans 5,379,978 10,261,306

Term Loan from Citi Bank NA 24,572,700 –

Term Loan from HSIDC 82,378,473 44,057,032

TOTAL 732,306,613 451,760,463


SC

HED

ULE :

4

FIX

ED

/IN

TA

NG

IBLE A

SSETS

Am

ount

(Rs.

)

PA

RTIC

ULA

RS

GR

OSS

BLO

CK

DEP

REC

IATIO

N /

AM

OR

TIS

ATIO

NN

ET B

LOC

K

AD

DIT

ION

SD

ELET

ION

S/FO

RO

N D

ELET

ION

S/

FIX

ED A

SSET

SA

S O

ND

UR

ING

SALE

SA

S O

NA

S O

NTH

ESA

LES/

AS

ON

AS

ON

AS

ON

01/0

4/2

006

TH

E Y

EAR

AD

JUST

MEN

T31/0

3/2

007

01/0

4/0

6Y

EAR

AD

JUST

MEN

T31/0

3/2

007

31/0

3/2

007

31/0

3/2

006

FAC

TOR

Y L

AN

D 3

5,69

6,63

7 –

–35,6

96,6

37

– –

– –

35,6

96,6

37

35,

696,

637

FAC

TOR

Y B

UIL

DIN

G 1

57,5

12,0

86 2

1,06

4,33

4 –

178,5

76,4

20

15,

417,

606

10,

527,

900

– 2

5,9

45,5

06

152,6

30,9

14

142

,094

,480

CO

MPU

TER

14,

782,

387

9,9

76,2

32 –

24,7

58,6

19

8,4

92,5

06 3

,481

,424

– 1

1,9

73,9

30

12,7

84,6

89

6,2

89,8

81

ELEC

TRIC

AL

FITT

ING

S 1

3,45

9,34

9 2

,010

,838

–15,4

70,1

87

4,4

70,3

23 1

,196

,899

– 5

,667,2

22

9,8

02,9

65

8,9

89,0

26

FUR

NIT

UR

E &

FIX

TUR

ES 1

7,91

4,71

4 6

,729

,175

–24,6

43,8

89

7,5

14,8

88 2

,846

,297

– 1

0,3

61,1

85

14,2

82,7

04

10,

399,

826

PLA

NT

& M

AC

HIN

ERIE

S 1

35,3

14,6

19 1

6,48

0,42

4 1

0,39

3151,7

84,6

50

27,

380,

773

11,

075,

280

354

38,4

55,6

99

113,3

28,9

51

107

,933

,846

VEH

ICLE

S 1

7,31

4,35

2 4

,017

,231

1,9

99,3

8119,3

32,2

02

7,6

62,0

00 2

,839

,620

805

,951

9,6

95,6

69

9,6

36,5

33

9,6

52,3

52

OFF

ICE

EQU

IPM

ENTS

16,

395,

232

4,2

74,8

20–

20,6

70,0

52

4,4

51,0

99 1

,937

,885

– 6

,388,9

84

14,2

81,0

68

11,

944,

133

TO

TA

L 4

08,3

89,3

76

64,5

53,0

54

2,0

09,7

74

470,9

32,6

56

75,3

89,1

95

33,9

05,3

05

806,3

05

108,4

88,1

95

362,4

44,4

61

333,0

00,1

81

INTA

NG

IBLE

ASS

ETS

CO

MPU

TER

SO

FTW

AR

E 4

,369

,297

5,7

57,7

30 –

10,1

27,0

27

2,8

98,7

81 8

75,3

80 –

3,7

74,1

61

6,3

52,8

66

1,4

70,5

16

TEC

HN

ICA

L R

ECIP

ES &

FOR

MU

LAE

12,

969,

505

– –

12,9

69,5

05

1,2

96,9

51 1

,296

,951

– 2

,593,9

02

10,3

75,6

03

11,

672,

554

TO

TA

L 1

7,3

38,8

02

5,7

57,7

30

–23,0

96,5

32

4,1

95,7

32

2,1

72,3

31

– 6

,368,0

63

16,7

28,4

69

13,1

43,0

70

CA

PIT

AL

AD

VA

NC

ES &

WIP

CA

PITA

L A

DV

AN

CES

& W

IP 1

11,7

10,6

27 3

35,3

02,7

42 2

1,71

7,62

3425,2

95,7

46

––

– –

425,2

95,7

46

111

,710

,627

TO

TA

L 1

11,7

10,6

27

335,3

02,7

42

21,7

17,6

23

425,2

95,7

46

– –

– –

425,2

95,7

46

111,7

10,6

27

GR

AN

D T

OTA

L(R

s.)

537,4

38,8

05

405,6

13,5

26

23,7

27,3

97

919,3

24,9

34

79,5

84,9

27

36,0

77,6

36

806,3

05

114,8

56,2

58

804,4

68,6

76

457,8

53,8

78

PREV

IOU

S Y

EAR

345

,820

,167

343

,321

,648

151

,703

,010

537,

438,

805

50,

757,

335

29,

595,

502

767

,910

79,

584,

927

457,

853,

878

295

,062

,832

45



SCHEDULE : 5

INVESTMENTS

Unquoted-Long Term (Non-Trade)Investment in subsidiary Company

i) 10,000 Shares of Euro one each 568,500 568,500La Tatva s.r.l., Italy

ii) 50,000 Equity Shares of Rs 10.00 each in 500,000 500,000Crew Home Products Ltd.

iii) 1,000 Equity Shares of USD 1.00 each in 43,250 43,250Crew B O S Far East Ltd., Hong Kong

iv) a) 25,500 Equity Shares @ Rs 10/- each in 255,000 –Crew MAG Exports Ltd.

b) Share application money towards –750,000 Equity Share of Rs 10/- each in 7,500,000Crew MAG Exports Ltd.

v) 7,900 Equity Shares of Euro 1/- each in 434,500 –IGUVIUM Srl, Italy

Quoted-Current (Non-Trade)Mutual Funds – 90,975,710

TOTAL 9,301,250 92,087,460

SCHEDULE : 6

INVENTORIES

(As certified by the Management)Raw Material : Imported 119,276,819 35,558,736

: Indigenous 379,198,023 303,685,672

Semi Finished Goods 141,001,499 86,736,701

Finished Goods 22,100 26,100

Goods-in-Transit : Raw Material 3,058 –

: Finished Goods 8,154,514 18,625,142

TOTAL 647,656,013 444,632,351

SCHEDULE : 7

SUNDRY DEBTORS

(Unsecured, Considered Good)Debts Outstanding for a period exceeding six months 11,780,005 8,326,328

*Others Debts 245,766,467 176,253,604

TOTAL 257,546,472 184,579,932

* Note : Includes Rs 2,267,519/- (Previous year Rs. 2,863,434/-)due from subsdiary - Crew BOS Far East Limited.

SCHEDULE : 8

CASH & BANK BALANCES

Cash in Hand 2,032,210 2,901,728

Bank Balance with Scheduled Banks 3,589,190 18,699,846

In Margin Money accounts 12,317,085 9,945,894

Bank Deposits 5,579,500 11,792,134

TOTAL 23,517,985 43,339,602




SCHEDULE : 9

LOANS & ADVANCES

(Unsecured, Considered good)Advances recoverable in cash or in kindor for value to be received 3,362,557 5,123,069

Advance to W.O.S., La Tatva s.r.l., Italy 680,216 680,216

Advance to W.O.S., Crew BOS Far East Limited, Hong Kong 1,276,593 438,330

Advance to W.O.S., Crew Home Products Limited 23,964,620 21,892,283

Advance to Crew MAG Exports Limited 22,113,622 –

Advance to Staff 9,246,934 6,252,426

Security Deposit 16,197,558 12,796,458

Advance Income Tax and TDS 13,145,523 6,263,662

Duty Drawback Receivable 36,332,816 20,642,951

Interest/Dividend/Other Receivable 126,225 1,112,112

Refundable VAT 6,224,951 3,286,455

Refundable Sales Tax 24,915,145 15,360,788

Cenvat Recoverable 15,880,512 6,773,326

Advances to Suppliers / Capital Advance 14,695,835 30,666,976

Prepaid Expenses 1,387,291 806,549

TOTAL 189,550,398 132,095,601

SCHEDULE : 10

CURRENT LIABILITIES

Credit Balance in Bank Current Accounts 53,553,259 33,263,562

Sundry Creditors 171,093,744 151,019,306

Other Liabilities 25,329,096 16,597,117

Unpaid Dividend 35,876 18,371

TOTAL 250,011,975 200,898,356

SCHEDULE : 11

PROVISIONS

Provision for Income Tax 13,481,100 5,712,000

Provision for Proposed Dividend 9,613,650 6,409,100

Provision for Tax on Proposed Dividend 1,348,315 898,877

TOTAL 24,443,065 13,019,977

SCHEDULE : 12

INCOME FROM OPERATIONS

Export Sales (FOB) 2,024,238,844 1,300,108,261

Domestic Sales 4,619,391 23,079,451

Job Work (Inter-Unit) 1,235,511 –

Duty Drawback 23,755,788 18,280,955

TOTAL 2,053,849,534 1,341,468,667

SCHEDULE : 13

OTHER INCOME

Interest 1,356,830 3,045,650

Dividend Income 1,690,009 1,209,951

Income on Redumption of Mutual Funds 2,739,125 336,251

Sale of DEPB License 133,176 –

TOTAL 5,919,140 4,591,852


47



SCHEDULE : 14

INCREASE/DECREASE(-) IN STOCKSClosing StockFinished Goods 22,100 26,100Semi Finished Goods 141,001,499 86,736,701Goods-in-Transit : Finished Goods 8,154,514 18,625,142

149,178,113 105,387,943Less : Opening StockFinished Goods 26,100 26,100Semi Finished Goods 86,736,701 74,058,306Goods-in-Transit : Finished Goods 18,625,142 3,979,139

105,387,943 78,063,545TOTAL 43,790,170 27,324,398

SCHEDULE : 15

MATERIAL, MANUFACTURING & OTHERSRaw Material Consumed : Indigenous 831,703,672 508,409,831

: Imported 137,358,763 83,973,324Consumables Stores : Indigenous 71,875,519 50,474,617

: Imported 9,522,356 10,960,583Electricity, Water & Fuel Charges 26,743,026 18,222,389Fabrication and Processing 144,696,001 205,099,541Repair and Maintenance 8,549,730 12,162,147Freight, Cartage and Clearing 43,439,721 21,795,074Discount and Rebate 11,491,451 11,096,579

TOTAL 1,285,380,239 922,194,085

SCHEDULE : 16

PERSONNEL, ADMINISTRATION & SELLING EXPENSESWages, Salary & Bonus 97,987,447 61,003,904Contribution to Provident Fund 4,656,973 2,030,036Contribution to E.S.I. Fund 2,195,311 688,382Staff Welfare Expenses 12,562,338 7,615,455Freight Outward and Packaging 34,863,900 24,941,159Directors Remuneration 6,941,137 5,115,414Travelling and Conveyance 22,257,889 15,617,831Printing and Stationery 4,744,071 3,574,033Communication & Courier 17,684,028 13,026,960Consultancy & Professional 3,661,178 5,163,125Books & Periodicals 139,824 101,322Sales Promotion 4,112,545 7,354,248Security & Office Expenses 14,185,927 3,642,731Vehicle Running & Maintenance 4,308,764 3,813,866Insurance Charges 5,004,170 4,557,751Payments to Auditors 672,604 484,840Fees & Subscriptions 2,265,099 2,217,161Testing Expenses 5,890,610 5,228,971Miscellenous Expenses 3,367,817 2,957,001Loss on Sale of Fixed Assets 458,969 54,130Rent 22,753,889 18,323,431Deferred Revenue Expenditure Written Off 3,122,768 1,968,140

TOTAL 273,837,258 189,479,891



SCHEDULE : 17

SIGNIFICANT ACCOUNTING POLICIES AND NOTES

A. SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Accounting

The Financial Statement are prepared on accrual basis under the historical cost convention in accordance with applicableAccounting Standards issued by The Institute of Chartered Accountants of India and relevant presentational requirementsof the Companies Act, 1956.

2. Revenue Recognition

Sales are recognized upon the transfer of significant risks and rewards of ownership to the customers. Cost of samplesdeveloped and supplied is recognized on accrual basis net of recoveries.

3. Fixed Assets

Fixed Assets are stated at actual cost of acquisition inclusive of taxes, duties, freight and other incidental expensesincluding interest related to acquisition, net of Grants.

Intangible assets are recognized at cost which comprises of purchases price (including taxes and duties, if any) and anydirectly attributable expenditure on making the assets ready for their intended use.

Fixed assets are reviewed for impairment on each balance sheet date, in accordance with the accounting standard AS28 issued by The Institute of Chartered Accountants of India.

4. Depreciation

Depreciation on fixed assets used in Fashion Accessories Business is provided on WDV Method & Depreciation onfixed assets used in Leather Business is provided on SLM Method at the rates and in the manner as prescribed inSchedule XIV of the Companies Act, 1956.

Intangible Assets are being amortized on a straight line method over the estimated useful lives of ten years, in line withthe accounting standard AS 26 issued by The Institute of Chartered Accountants of India.

All assets costing Rs 5,000 or below are depreciated in full by way of a one time depreciation charge.

Leasehold improvements are amortized over the period of lease, including the optional period of lease.

5. Inventories

a. Raw materials are valued at weighted average cost.

b. Semi finished goods are valued at cost upto estimated stage of process.

c. Finished Goods are valued at lower of cost and net realizable value.

6. Foreign Exchange Transactions

Transactions in foreign currencies are recorded at the rate prevailing on the date of the transactions. Monetary items aretranslated at the exchange rates prevailing at the end of the year and the gain/loss arising on such translation is credited/charged to the profit and loss account. Exchange differences, relating to fixed assets are adjusted to the carrying cost ofthe assets.

In case of Forward Exchange Contract, the cost of contract is amortized over the period of contract. Any profit or lossarising on the cancellation or renewal of a forward exchange contract is recognized as income or expense for the year,except in case of forward exchange contract relating to liabilities incurred for acquiring fixed assets from outside India,in which case, such profit or loss is adjusted in the cost of fixed assets.

7. Retirement Benefits

The Company's contribution to defined contribution schemes such as provident fund and family pension fund arecharged to the profit and loss account as incurred. The Company also provides gratuity benefit to the employees, whichis funded through a LIC group gratuity scheme. The Liability at the year-end for the same is determined by an actuarialvaluation done at year-end and shortfall/surplus over the amount contributed to the scheme is charged off to the profitand loss account. Provision for Leave Encashment is made on accrual basis and charged to profit and loss account.

8. Borrowing Costs

The borrowing costs on funds other than those directly attributable to the acquisition of a qualifying asset i.e. assets thatnecessarily takes a substantial period of time to get ready for its intended use, are charged to revenue in the period inwhich they are incurred.

The borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets arecapitalized as part of the cost of that asset.


49


9. Investments

Current Investments are carried at lower of cost and fair value. Fair value in the case of quoted investments refer to themarket value of the investments arrived at on the basis of last traded prices as at the year end.

10. Taxation

Current Tax

Provision for current tax is computed on the basis of tax payable on estimated taxable income and fringe benefitcomputed in accordance with the applicable provisions of Income Tax Act 1961, after considering the benefit availableunder the said Act.

Deferred Tax

In accordance with Accounting Standard -22 "Accounting for Taxes on Income", issued by the Institute of CharteredAccountants of India, the deferred tax for timing differences between the book and tax profits for the year is accountedfor using the tax rates and laws that have been enacted or substantially enacted as of the balance sheet date.

Deferred Tax Assets arising from temporary timing differences are recognized to the extent there is reasonable certaintythat the asset can be realized in future.

11. Export benefits i.e. Duty Drawback are accounted for on accrual basis. Duty Drawback on Deemed Exports benefit to100% Export Oriented Unit (EOU) is accounted for when the amount is quantified upon receipt of disclaimer certificatesfrom Domestic Tariff Area (DTA) suppliers.

12. Prior Period items

Income and expenses which arise in the current year as a result of errors or omissions in the preparation of financialstatements of one or more prior periods are shown as prior periods Adjustments.

13. Contingent Liabilities

Contingent liabilities are disclosed after a careful evaluation of the facts and legal aspects of the matter involved.

B. NOTES TO THE ACCOUNTS

1. Contingent liabilities in the respect of : Amount (Rs. in Lakhs)

For the year ended For the year endedMarch 31, 2007 March 31, 2006

a) Guarantees given by Bankers 22.62 26.25

b) Corporate Guarantee for its wholly owned subsidiary. Nil Nilc) Claims not acknowledge as Debt Nil Nild) Excise Duty, Sales Tax, Income Tax levied, not acknowledged as debt Nil Nile) Capital Commitments (Net of Advance) 412.64 681.84f) I) Bonds given to Excise authorities for Unit at 199, Nil Nil

Phase - 1 Udyog Vihar, Gurgaon.II) Bonds given to Excise authorities for 214

Phase-I, 258 Phase-IV, Udyog Vihar, Plot -37Sector -4, & Plot 8-9, Sector 7, IMT, Manesar, Gurgaon. 1076.70 258.03

g) Letter of credit established by bank 94.27 336.61h) Claims made by certain workers terminated by the Company are referred in the industrial tribunals. Any liability

which may arise out of awards from Tribunal is Contingent and shall be account for in the year of settlement of case.

2. Deferred Tax Liability/Asset as at 31st March, 2007 comprises the following:Amount (Rs. in Lakhs)

For the year ended For the year endedMarch 31,2007 March 31,2006

Timing differences on account of: Deferred Tax Assets Deferred Tax Deferred Tax Assets Deferred TaxLiability Liability

a) Depreciation – 33.30 24.27 –

b) Employees Benefits 6.24 – 2.67 –

Total 6.24 33.30 26.94 –

Net Deferred TaxLiability / Asset – 27.06 26.94 –



3. In the opinion of the Board of Directors the current assets, loan and advances have a value on realization in the ordinarycourse of business at least equal to the amount at which they are stated in the Balance Sheet and provision for all knownliabilities have been made.

4. The various Debit & Credit balances are subject to confirmation.

5. The small scale industrial undertakings to whom the Company owes and which is outstanding for more than 30 days asat March 31, 2007 are:

YKK India Pvt. Ltd., M/s Krishna Packaging, M/s K.K.Tanners, M/s Kataria Rubber Solution, M/s Khurana Casting &Pentography, M/s Rider Tanning Industries, M/s Tryca Products, M/s Unique (India), M/s Ajanta Art Dyer, M/s KalsiSports, M/s R.K.Enterprises, Abhi Fab Private Limited, S.K. Dyeing Finishing Mills Private Limited and Sky IndustriesLimited.

The above information regarding small scale industrial undertaking has been determined to the extent such parties havebeen identified on the basis of information available with the Company

6. Crew B.O.S. Products Limited has entered into Memorandum of Understanding with Leather Crafts India (Private)Limited to manufacture and export all kinds of footwear and footwear components. The name of the Joint ventureCompany is Crew MAG Exports Limited which was incorporated on 17th November, 2006. Crew B.O.S. ProductsLimited holds 51% equity in the JV Company. The account of this JV Company is appended herewith.

7. The Company has also incorporated an entity in Italy by the name of "Iguvium Srl" on 19th March, 2007, the objectivebeing to market footwear and other leather articles such as bags, wallets, purses etc., in the international market. TheCompany holds 79% of the equity in the subsidiary and the remaining 21% equity is being held by local Italian individualhaving 16 years of experience in the footwear industry. Since the commercial operations have not started in this companytherefore the accounts of this company has not been appended herewith. The Company has incurred EURO 60990towards equity subscription and other pre-operative expenses.

8. The Company has been granted External Commercial Borrowing (ECB) loan of US $ 5000000 (INR 2225 Lakhs) inJapanese Yen (JPY) for the modernization and expansion plans of the Company, by Citibank N.A. London. The rate of theinterest on the same is 6.95% and out of which 0.75% was paid upfront till 31st March, 2007. The moratorium periodof the loan is until 30th June, 2008. The Company has drawn down Rs. 1065.35 Lakhs till 31st March, 2007 and theutilized amount till that date was Rs. 245.73 Lakhs.

9. During the year the Company has issued 1250000 warrants convertible into equity shares of the Company on preferentialbasis at a price of Rs. 178/- per warrant, which will entitle the holder to subscribe to one equity share of the face valueof Rs. 10/-, at a price not being less than Rs. 178/- (including premium of Rs. 168/-) per equity share of the Companyagainst each warrant. The holder of the warrants will have an option to apply for and be allotted one equity share of theCompany per warrant at any time after the date of allotment but on or before the expiry of 18 months from the date ofallotment, in or more tranches. The warrants were issued to the promoters and other private business investors for theworking capital requirements of the Company. As on date no holder of warrants has exercised the option. The amountreceived of Rs. 298.50 Lakhs against the allotted warrants have been utilized in the working capital requirements of theCompany

10. During the year under review the Company has increased its Authorised Share Capital from Rs. 16.50 Crores to Rs.20.00 Crores (3000000 equity shares of Rs. 10/- each and 500000 preference share of Rs. 10/- each) . Filing fees &stamping charges amounting to Rs. 2.28 Lakhs incurred for the same have been charged to the Profit and Loss account.

11. During the year the Company has incurred Rs. 15.42 Lakhs on the Qualified Institutional Placement (QIP) issue, whichwas not completed till 31st March, 2007. The expenditure incurred on the same has been capitalized and it will beamortized, once the issue gets completed.

12. The company had incurred Rs 2.75 lakhs being expenses on proposed Joint Venture in Hong Kong. These expenses areshown under the head Loans & Advances being recoverable in future from the Joint Venture.

13. The Company has amortized Rs. 12.97 lakhs ( Previous Year Rs 12.97 lakhs) being one-tenth of 129.70 lakhs ondevelopment of new recipes and formulation for its leather finishing unit at Manesar. The total expenses incurred inearlier years.

14. Depreciation on factory building includes Rs. 38.22 Lakh (Previous year 20.35 Lakh) being the amount of amortizationon lease hold property over the lease period.

15. Capital advances WIP includes Rs. 2174.36 Lakh (Previous year Rs. 996.94/- Lakh) on account of building underconstruction, Rs. 61.33 Lakh (Previous year Rs. 32.15 Lakh) for software under developments.

16. The Company has amortized Rs. 5.84 lakhs ( Previous Year Rs. 5.84 lakhs) being one-fifth of the total expenses incurredin shoe division in earlier years.

17. Income from operations includes Duty Drawback Income of Rs. 105.90 lakhs for the financial year 2005-06 which hasbeen recognized during this year being benefit of duty drawback on deemed export on purchases of goods made by100% Export Oriented Unit (EOU) as per provisions of chapter 8 of Foreign Trade Policy.


51


18. Auditors’ remuneration Amount (Rs. in Lakhs)

Particulars For the year ended For the year endedMarch 31,2007 March 31,2006

a) Audit Fee 4.00 2.70

b) Limited review of quarterly results 1.00 0.90

c) Tax Audit Fees 0.60 0.45

d) Others 1.12 0.80

TOTAL 6.72 4.85

19. During the year company has sold all the investments of face value of Rs 909.76 Lacs in Mutual Funds at a profit ofRs. 27.39 Lacs.

20. Export Sales includes Rs. 194.39 Lakhs inter-segment sales being considered as deemed Exports from one EOU toanother EOU of the Company.

21. Earning Per Share (E.P.S)

The basic/diluted earning per share calculated as per Accounting Standard- 20 issued by The Institute of CharteredAccountants of India is as under:

Particulars Current Year Previous Year

a) Net Profit after tax available for equity shareholders(Rs in Lakhs) 2214.62 1551.84

b) Weighted average no of equity shares outstandingduring the year 13054501 12245343

c) Basic earning per Rs. Share (a / b) 17.28 12.67

d) *Diluted earning per Rs. Share (a / b) 16.96 12.67

*The Company has allotted 1250000 share warrants convertible into Equity Share of the Company. The warrants as ondate have not been converted into Equity Shares of the Company.

22. Segment Accounting Policies:

In addition to the significant accounting policies as per Note 1 of A, Schedule 17, the accounting policies in relation tosegment accounting are as under.

i) Identification of Segment

For management purposes, the Company is organized in two major operating divisions - Fashion Accessories &Leather. These divisions are the basis on which the Company reports its primary segment information.

ii) Segment Assets and Liabilities

All Segments assets and liabilities are directly attributable to the segment. Segment assets include all operatingassets used by the segment and consist primarily of fixed assets, inventories, sundry debtors, loans and advancesand operating cash and bank balances. Segment liabilities and all operating liabilities and consist primarily ofcreditors and accrued liabilities. Segment assets and liabilities do not include investments, miscellaneous expenditure,and current income tax and deferred tax.

iii) Inter Segment Transfers

Segment revenues and segment results include transfers between business segments. Inter segment sales to leatherare accounted for at cost of production. These transfers are eliminated on consolidation.

iv) Segment revenues and expenses

Joint expenses are allocated to business segments on a reasonable basis. All other revenues and expenses aredirectly attributable to the segments. They do not include interest income and interest expenses.



Segment Reporting

a) Reportable Business Fashion Leather Total Fashion Leather Total

Segment Accessories 31-03-2007 Accessories 31-03-2006

Rs. Rs. Rs. Rs. Rs. Rs.

Revenue

Sales 1,826,441,439 227,408,095 2,053,849,534 1,284,736,788 56,731,879 1,341,468,667

Less : Inter-Segment Sales – 206,585,240 206,585,240 – 26,780,454 26,780,454

Net Sales 1,826,441,439 20,822,855 1,847,264,294 1,284,736,788 29,951,425 1,314,688,213

Other Income – – 5,919,140 – – 4,591,852

Total Revenue 1,826,441,439 20,822,855 1,853,183,434 1,284,736,788 29,951,425 1,319,280,065

Result

Segment Result 348,938,390 10,652,427 359,590,817 223,196,109 (1,344,514) 221,851,595

Operating Profit 359,590,817 221,851,595

Other Income 5,919,140 4,591,852

Interest (63,144,399) (24,470,292)

Unallocable Expenditure (67,663,842) (47,662,814)

Provision for Taxation 7,769,100 (5,712,000)

Deferred Tax (5,400,000) 6,269,843

Prior Period Tax Adjustments (70,440) 315,920

Net Profit After Tax 237,000,376 155,184,104

Other Information

Segment Assets 1,114,165,855 372,326,417 1,486,492,272 744,933,694 298,814,207 1,043,747,902

Unallocated Assets – – 455,645,216 – – 322,518,485

Deferred Tax Asset / (Liability) 2,693,482

Total Assets 1,114,165,855 372,326,417 1,942,137,488 744,933,694 298,814,207 1,368,959,869

Segment Liabilities 1,049,124,594 372,326,417 1,421,451,011 134,651,715 65,279,754 199,931,469

Unallocated Liabilities – – 359,947,959 – – 465,747,327

Share Capital & Reserves 158,032,000 703,281,072

Total Liabilities 1,049,124,594 372,326,417 1,939,430,970 134,651,715 65,279,754 1,368,959,869

b) Information about Secondary Geographical Segment Amount (Rs.)

2006-07 2005-06

Location Revenue Revenue

Exports 2,024,238,844 1,273,471,131

Domestic 4,619,391 49,716,581

Total 2,028,858,235 1,323,187,712

Less: Inter Segment Sales 205,349,729 26,780,454

Total Revenues 1,823,508,506 1,296,407,258


53


23. Related Party Disclosures :

Related party disclosures, as required by AS – 18 “Related Party Disclosures” are given below:

Amount (Rs. in Lakhs)

Name of the Party Nature of relationship Nature of transaction 2006-07 2005-06

Crew Home Products Ltd. Wholly Owned Subsidiary Rent 17.72 18.00

Raw Material Purchased 9.86 26.91

Advance 20.73 61.64

Crew B.O.S Far East Ltd. Wholly Owned Subsidiary Advance – 4.38

Sales 62.42 91.00

Capital Contribution – 0.43

Reimbursement of Expenses 10.13 8.45

La Tatva S. r. l, Italy Wholly Owned Subsidiary Advance 4.35 2.75

Crew Concepts and

Technology Pvt. Ltd. Wholly Owned Subsidiary Dividend 18.50 27.13

Crew Trade Post Pvt. Ltd. Wholly Owned Subsidiary Dividend 12.34 19.91

Crew MAG Exports Limited Joint Venture Capital Contribution 2.55 –

Reimbursement of Expenses 212.87 –

Advance 75.00 –

Mr. Tarun Oberoi Key Managerial Personnel Director's remuneration 41.42 28.55

Mr. Robin Bartholomew Key Managerial Personnel Director's remuneration 22.91 15.77

Mr. Puneet Nikore Key Managerial Personnel Director's remuneration 4.78 6.46

Mrs. Shallay Bartholomew Key Managerial Personnel Remuneration 5.26 5.82

24. Directors remuneration

(a) Total remuneration comprising of: Amount (Rs.)

Particulars 2006-2007 2005-2006

Salary 3,905,667 2,452,314

Allowances & Perquisites 3,005,770 2,624,600

Sitting Fees 29,700 38,500

Total 6,941,137 5,115,414

(b) Computation of Net profit in accordance with Section 198 read with Section 349 & 350 of the Companies Act 1956.

Amount (Rs.)

Particulars 2006-2007 2005-2006

Profit before taxation as per Profit & Loss A/c 234,851,519 156,189,387

Add:

(1) Loss on sale of Fixed Assets 458,969 54,130

(2) Directors Remuneration 6,911,437 5,076,914

(3) Directors Sitting Fee 29,700 38,500

Total 242,251,625 161,358,931

Less:

Profit on sale of Investments 2,739,125 336,251

Total 2,739,125 336,251

Profit u/s 349 of the Companies Act 1956 for

Calculation of remuneration payable to Directors 239,512,500 161,022,680

Maximum amount Payable as per ceiling specified u/s 309(3)

of the Companies Act, 1956 (10% of net profit) 23,951,250 16,102,268



25. Foreign Currency Transactions Amount (Rs.)

2006-2007 2005-2006

A. Expenditure / Outflow

Foreign Travelling Expense 5,143,163 4,750,323Subscription Expenses 415,123 106,894Pre-operative Expenses – 780,220Advance to W.O.S., La Tatva s.r.l., Italy – 275,000Investment in IGUVIUM 434,500 –Advance to W.O.S., Crew BOS Far East Limited, Hong Kong – 438,330GDR Issue Expenses – 4,997,670Raw-Material 230,161,797 95,657,608Rebates & Discounts 367,632 11,096,579Capital Goods 81,752,196 25,128,781Machine Spares 5,441,358 333,203

B. Earnings

Export Sales (FOB) 1,818,889,115 1,273,471,131Interest Received – 1,678,150

C. Dividends remitted in Foreign Currency

The Company did not make any direct remittance of dividends in foreign currency. The Company remit fundsequivalent of the dividend payable to the holders of GDR’s in Indian Rupees to the depository bank, which is theregistered shareholder on records for all GDR owners of the Company. The depository Bank purchase the foreigncurrency and remitted dividend to the GDR holders amounting to Rs 4.55 lakhs during the year (Previous year Rs2.73 Lakhs).

26. Additional information pursuant to paras 3, 4C & 4D of Part II of Schedule VI of the Companies Act, 1956.

A) Licensed and installed capacity and production (As Certified by the Management)

Description Current Year Previous Year Current Year Previous YearLicensed Capacity Installed Capacity Production Production

(Qty. in No.) (Qty. in No.)

Bags N.A. Not Ascertainable 595,222 982,215

Belts N.A. Not Ascertainable 1,427,362 1,339,433

Wallets N.A. Not Ascertainable 673,992 187,623

Footwear N.A. Not Ascertainable 978,203 822,098

Finished Leather N.A. Not Ascertainable 172,185 953,184

Others N.A. Not Ascertainable 283,733 7,128,805

B. Raw Material Consumed

Product Consumption ConsumptionCurrent Year Previous Year

Unit Qty. Amount (Rs.) Qty. Amount (Rs.)

Leather Sqft 15,226,416 578,698,022 6,871,509 272,354,034

Fabrics Meter 1,896,556 112,326,264 1,311,378 86,125,745

Others 285,343,781 233,903,376

Total 976,368,067 592,383,155

(C ) Composition of Raw Material Consumed

Current Year Previous Year

% Amount ( Rs.) % Amount ( Rs.)

Indigenous 85.83% 831,703,672 85.82% 508,409,831

Imported 14.17% 137,358,763 14.18% 83,973,324

Total 100.00% 969,062,435 100.00% 592,383,155


55


Sch

ed

ule

s Fo

rmin

g P

art

of

the F

ina

nci

al S

tate

ments

For A

nil K

. G

oyal &

Ass

ocia

tes

Char

tere

d A

ccounta

nts

For

and o

n b

ehalf o

f th

e B

oard

(Anil K

. G

oyal)

(Taru

n O

bero

i)(R

obin

Bart

holo

mew

)

Pro

pri

etor

Man

agin

g D

irec

tor

Dir

ecto

r

FCA

71221

Dat

e:

9th June,

2007

(K.V

. G

anesh

)(S

anje

ev K

r. B

aja

j)

Pla

ce:

Gu

rgao

nC

hie

f Fi

nan

cial

Offic

erC

om

pan

y Se

cret

ary

E.

Deta

il o

f tr

aded i

tem

s.A

mount (in R

s.)

Item

sO

penin

g S

tock

Purc

hase

Turn

over

Clo

sing S

tock

Curr

ent

Year

Pre

vio

us

Year

Curr

ent

Year

Pre

vio

us

Year

Curr

ent

Year

Pre

vio

us

Year

Curr

ent

Year

Pre

vio

us

Year

Qty

Am

ount

Qty

Am

ount

Qty

Am

ount

Qty

Am

ount

Qty

Am

ount

Qty

Am

ount

Qty

Am

ount

Qty

Am

ount

Bel

ts 1

16

26,1

00

11

6 2

6,1

00

––

––

––

––

11

6 2

6,1

00

11

6 2

6,1

00

Leat

her

(Sq

ft)

5,4

48

339,6

42

5,4

48

339,6

42

– –

––

––

––

5,4

48

339,6

42

5,4

48

339,6

42

Fabri

cs(M

eter

)–

– –

––

––

––

––

––

––

–

Tota

l 3

65,7

42

365,7

42

––

– 3

65,7

42

365,7

42

27.

The

corr

espondin

g figu

res

of

pre

vious

year

hav

e bee

n r

egro

uped

, re

arra

nge

d w

her

ever

nec

essa

ry

D.

Sta

tem

ent

of

Openin

g S

tock,

Sale

& C

losi

ng S

tock O

f Fin

ished G

oods

of

Manufa

ctu

ring i

tem

sA

mount (in R

s.)

Item

sU

nit

Openin

g S

tock

Turn

over

Clo

sing S

tock

Curr

ent

Year

Pre

vio

us

Year

Curr

ent

Year

Pre

vio

us

Year

Curr

ent

Year

Pre

vio

us

Year

Qty

Am

ount

Qty

Am

ount

Qty

Am

ount

Qty

Am

ount

Qty

Am

ount

Qty

Am

ount

Bag

sN

os 6

,497

4,4

57,0

37 6

,888

3,3

57,6

12 6

01,7

07 7

03,7

95,2

70 9

82,6

06 4

72,4

38,5

19 1

2 2

6,97

3 6

,497

4,4

57,0

37

Bel

tsN

os 2

5,27

0 6

,127

,490

1,4

64 5

19,6

60 1

,440

,485

494

,436

,807

1,3

15,6

27 4

10,9

89,3

16 1

2,14

7 4

,290

,339

25,

270

6,1

27,4

90

Wal

lets

Nos

400

44,

838

600

101

,867

674

,392

128

,675

,007

187

,823

33,

298,

534

– –

400

44,

838

Foot

wea

rPa

ir 2

1,01

5 7

,427

,685

– –

987

,063

364

,196

,991

801

,083

208

,682

,592

12,

155

3,5

07,0

82 2

1,01

5 7

,427

,685

Fini

shed

Lea

ther

Sqft

– –

– –

172

,185

16,

812,

539

953

,184

56,

951,

880

– –

– –

Oth

ers

Nos

750

568

,095

– –

281

,683

110

,972

,501

7,1

28,0

55 1

40,8

26,8

71 2

,800

330

,120

750

568

,095

Tota

l 1

8,6

25,1

45

3,9

79,1

39

1,8

18,8

89,1

15

1,3

23,1

87,7

12

8,1

54,5

14

18,6

25,1

45


Balance Sheet Abstract and Company’s General business profile (Amount in Rs. Thousands)

I. Registration Details

Registration No. 34472

State Code 55

Balance Sheet Date 31.03.2007

II. Capital raised during the year (Amount in Rs. Thousands)

Public Issue NIL

Rights Issue NIL

Bonus Issue NILPrivate Placement (Equity Warrants) 29850

III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)

Total Liabilities 1,667,682

Total Assets 1,667,682

Source of Funds

Paid-up Capital 128,182

Equity Warrants Subscribed 29,850

Reserves & Surplus 774,637

Secured Loans 732,307

Unsecured Loans NIL

Deferred Tax Liability 2,706

Application of Funds

Net Fixed Assets 804,469

Investments 9,301

Net Current Assets 843,816

Misc. Expenditure 8,929

Deferred Revenue Expenditure 1,167

Accumulated Losses NIL

IV. Performance of Company (Amount in Rs. Thousands)

Turnover 1,896,974

Total Expenditure 1,662,122

Profit/(Loss) before tax 234,851

Profit/(Loss) after tax 221,462

Earning per Share (Basic) in Rs. 17.28

Earning Per Share (Diluted) in Rs. 16.96

Dividend rate % (inclusive of Interim Dividend @ 7.5%) 15

V. Generic Names of Three Principal Products/Services of Company

Item Code No. (ITC Code) Product Description

420211 Travel Goods

420330 Belts

420100 Articles of Leather


For Anil K. Goyal & Associates (Tarun Oberoi) (Robin Bartholomew)Chartered Accountants Managing Director Director

(Anil K. Goyal) (K.V. Ganesh) (Sanjeev Kr. Bajaj)Proprietor Chief Financial Officer Company SecretaryFCA 71221


Additional Information Pursuantto the provisions of part-iv of schedule vi of the companies act, 1956.

57


Statements, issued by the Institute of Chartered Accountants ofIndia and on the basis of separate audited financial statementsof the Company and its subsidiaries included in the consolidatedfinancial statements.

On the basis of the information and explanations given to usand on the consideration of the separate audit reports onindividual audited financial statements of the Company and itssubsidiaries, we are of the opinion that the said consolidatedfinancial statements give a true and fair view of confirmativewith the accounting principles generally accepted in India;

(i) In the case of the Consolidated Balance Sheet, of theconsolidated state of affairs of the Company and itssubsidiaries as at March 31st, 2007.

(ii) In the case of the Consolidated Profit & Loss Account ofthe consolidated results of operations of the companyand its subsidiaries for the year ended on that date.

(iii) In the case of the Consolidated Cash Flow Statement, ofthe consolidated cash flows for the year ended on thatdate.

For Anil K. Goyal & AssociatesChartered Accountants

(Anil K. Goyal)ProprietorFCA 71221


To the Board of Directors,

Crew B.O.S. Products Ltd.

We have examined the attached Consolidated Balance Sheet ofCrew B.O.S. Products Limited, as at 31st March, 2007 and theConsolidated Profit & Loss Account for the year ended on thatdate annexed thereto and the consolidated Cash Flow Statementfor the year ended on that date. These Financial Statements arethe responsibility of the Company's Management. Ourresponsibility is to express an opinion on these financialstatements based on our audit.

We conducted our audit in accordance with auditing standardsgenerally accepted in India. Those standards require that weplan and perform the audit to obtain reasonable assurance aboutwhether the Financial Statements are free of materialmisstatements. An audit also includes assessing the accountingprinciples used and significant estimates made by Management,as well as evaluating the overall financial statement presentation.We believe that our audit provides a reasonable basis for ouropinion.

We did not audit the financial statements of foreignsubsidiaries, whose financial statement reflect total assets (net)of Rs. 318,351/- as at 31st March, 2007 and total revenue ofRs. 2,38,04,923/- for the year ended on that date. These financialstatements have been audited by other auditors (except twosubsidiaries whose accounts being not compulsory to be auditedas per rules prevailing in that country), whose reports have beenfurnished to us, and our opinion, insofar as it relates to theamounts included in respect of these consolidated entities, isbased solely on the report of the other auditors

We report that the Consolidated Financial Statements have beenprepared by the Company in accordance with the requirementsof Accounting Standard (AS) 21, Consolidated Financial

Auditors’ Reporton Consolidated Financial Statements


Schedule Amount (Rs.) Amount (Rs.)

31-Mar-2007 31-Mar-2006

SOURCES OF FUNDS

SHAREHOLDERS FUNDS

Share Capital 1 128,182,000 128,182,000

Equity Warrants Issued and Subscribed 29,850,000 –

Reserves & Surplus 2 771,757,233 572,526,453

LOAN FUNDS:

Secured Loan 3 732,306,613 451,760,463

Unsecured Loan 4 23,111,029 3,169,094

Minority Interest 245,000 –

TOTAL 1,685,451,875 1,155,638,010


Fixed Assets : 5

Gross Block 950,484,120 562,316,167

Less : Depreciation (119,902,756) 82,686,329

Net Block 830,581,364 479,629,838

Investments 6 – 90,975,710

Deferred Tax Asset/ (Liability) (2,809,550) 2,653,827

TOTAL (2,809,550) 93,629,537

Current Assets, Loan & Advances

Inventories 7 651,120,449 449,011,650

Sundry Debtors 8 258,935,769 185,546,269

Cash & Bank Balances 9 27,006,291 46,060,286

Loan & Advances 10 152,205,129 110,930,871

1,089,267,638 791,549,076

Less : Current Liabilities & Provisions


Provisions 12 25,092,278 13,584,292

281,229,857 221,293,798


Miscellaneous Expenditure 9,123,343 10,372,514(to the extent not written off or adjusted)

Pre operative Expenses 18 39,351,709 –

Deferred Revenue Expenditure 1,167,227 1,750,843

TOTAL 1,685,451,875 1,155,638,010

Significant Accounting Policies and 19Notes forming part of the AccountsConsolidared Cash Flow Statement

As per our report of even date attached.

Consolidated Balance SheetAs At March 31, 2007

For Anil K. Goyal & AssociatesChartered Accountants For and on behalf of the Board of Directors



59


For Anil K. Goyal & AssociatesChartered Accountants For and on behalf of the Board of Directors

(Anil K. Goyal) (Tarun Oberoi) (Robin Bartholomew)Proprietor Managing Director Director

FCA 71221


Consolidated Profit And Loss AccountFor The Year Ended March 31, 2007

Schedule Amount (Rs.) Amount (Rs.)

31-Mar-2007 31-Mar-2006

INCOME

Income from Operations 13 2,078,845,685 1,363,490,065

Less : Interunit & Co. Sales 216,277,372 26,780,454

Net Income from Operations 1,862,568,313 1,336,709,611

Other Income 14 8,338,940 5,169,589

Increase/ (Decrease) in Stocks 15 41,637,510 26,300,268

TOTAL 1,912,544,763 1,368,179,468

EXPENDITURE

Material Manufacturing & Others 16 1,292,664,196 942,390,482

Personnel, Administration & Selling 17 279,935,626 192,940,155

Interest & Finance Charges 70,319,847 49,858,670

Depreciation 34,549,811 31,643,879

TOTAL 1,677,469,480 1,216,833,185

Profit Before Taxation 235,075,283 151,346,283

(Less) : Provision for Taxation (7,894,600) (5,925,891)

Add / (Less) : Deferred Tax Liability (5,451,133) 6,308,016

221,729,550 151,728,408

Add / (Less) : Tax Adjustments of Prior Years (133,793) 315,919

Profit After Taxation 221,595,757 152,044,327

Balance in Profit and Loss Account 240,618,048 110,717,931

Profit available for Appropriation 462,213,805 262,762,258

APPROPRIATIONS

Proposed Dividend 9,613,650 6,409,100

Interim Dividend 9,613,650 9,613,650

Transfer to General Reserve 11,073,109 3,879,603

Capital Reserve – 595,086

Dividend Tax 1,348,314 1,348,314


Balance Carried to Balance Sheet 429,216,767 240,017,628

462,213,805 262,762,258

E.P.S. [Basic] In Rs. 17.29 12.42

E.P.S. [Diluted] In Rs. 16.97 11.65

Significant Accounting Policies and 19Notes forming part of the AccountsConsolidated Cash Flow Statement

As per our report of even date attached.


Consolidated Cash Flow StatementFor The Year Ended 31st March, 2007

Amount (Rs.) Amount (Rs.)

31-Mar-2007 31-Mar-2006

A. Cash flow from operating activities:Net (loss)/profit before tax but after exceptional/extraordinary items 235,075,283 153,225,329Adjustments for

Depreciation 34,549,811 31,643,879Interest Expense 70,319,847 49,858,670Interest Income (1,356,830) (3,195,509)Income from Investment - Dividends (1,690,009) (1,209,952)(Profit)/Loss on Fixed Assets sold 458,969 54,130(Profit/Loss on sale of Investments (2,739,125) (336,251)Deferred revenue expenditure written off 3,122,768 1,968,140Any other non cash Item (428,804) (39,574)

Operating profit before working capital changes 337,311,909 231,968,863Adjustments for changes in working capital :– (INCREASE)/DECREASE in Sundry Debtors (73,389,500) (55,396,907)– (INCREASE)/DECREASE in Other Receivables (34,945,011) (36,509,328)– (INCREASE)/DECREASE in Inventories (202,108,799) (163,483,092)– INCREASE/(DECREASE) in Trade and Other Payables 48,428,074 14,496,647Cash generated from operations 75,296,672 (8,923,819)– Taxes (Paid) / Received (Net of TDS) (7,355,736) (6,134,860)– Prior Period (Expenses)/Income (Net) (133,793) (1,563,127)Net cash from operating activities 67,807,144 (16,621,805)

B. Cash flow from Investing activities:Purchase of fixed assets (390,177,727) (195,009,303)Proceeds from Sale of fixed assets 744,500 712,530Proceeds from Sale of Investments 93,714,835 (56,109,723)Pre Operative (35,878,789) –Miscellaneous Expenditure (1,289,981) (6,218,938)Interest Received (Revenue) 2,342,717 2,471,645Dividend Received 1,690,009 1,209,952Net cash used in investing activities (328,854,436) (252,943,839)

C. Cash flow from financing activities:Proceeds from fresh issue of Share Capital – 218,184,000Investments from Minorities 245,000 –Equity Warrants Issued and Subscribed 29,850,000 –Proceeds from long term borrowings 77,954,748 3,288,770Proceeds from short term borrowings 222,533,337 128,832,942Interest Paid (70,319,847) (49,858,670)Dividend Paid (16,022,750) (20,613,650)Dividend Tax Paid (2,247,191) (2,785,877)Net cash used in financing activities 241,993,297 277,047,516Net Increase/(Decrease) in Cash & Cash Equivalents (19,053,995) 7,481,872Cash and cash equivalents as at 31.03.2006 46,060,286 38,578,414Cash and cash equivalents as at 31.03.2007 27,006,291 46,060,286Cash and cash equivalents compriseCash, Cheques & Drafts (in hand) and Remittances in Transit 2,872,145 3,016,041Balance with Banks 24,134,146 43,044,245

27,006,291 46,060,286

Notes :1. The above Cash flow statement has been prepared under the indirect method setout in AS-3 issued by the Institute of Chartered

Accountants of India.

2. Figures in brackets indicate cash outgo.

3. Previous period figures have been regrouped and recasted wherever necessary to conform to the current period classification.

This is the Consolidated Cash Flow Statement referred to in our report of even date.

For Anil K. Goyal & AssociatesChartered Accountants For and on behalf of the Board



61


Consolidated SchedulesForming Part of The Balance Sheet


SCHEDULE : 1

SHARE CAPITAL


19,000,000 Equity Shares of Rs. 10/- each 190,000,000 160,000,000

(Previous year 11500000 Equity Shares of Rs, 10/- each)

1000,000 Preference Share of Rs. 10/- each 10,000,000 5,000,000

(Previous year 500000 preference sharesof Rs, 10/- each)

TOTAL 200,000,000 165,000,000


12,818,200 Equity Shares of Rs. 10/- each fully paid up. 128,182,000 128,182,000

TOTAL 128,182,000 128,182,000

SCHEDULE : 2

RESERVES & SURPLUS

GENERAL RESERVE

Opening Balance 31,340,838 27,461,235

Transferred from Profit & Loss Account 11,073,109 3,879,603

42,413,947 31,340,838

SECURITY PREMIUM

Opening Balance 300,020,100 100,018,100

Add: Received on account of issue of GDRs / Equity Shares – 200,002,000

Share Premium Account 300,020,100 300,020,100

Capital Reserve 595,086 595,086

Foreign Exchange Translation Reserve (488,668) (47,618)

Surplus in Profit & Loss Account 429,216,767 240,618,047

TOTAL 771,757,233 572,526,453

SCHEDULE : 3

SECURED LOANS

Packing Credit Limit 490,452,488 274,016,618

Foreign Bills Purchased by Bank 129,522,974 123,425,507

Vehicle / Equipment Loans 5,379,978 10,261,306

Building Term Loan from Bank 24,572,700 –

Term Loan from HSIDC 82,378,473 44,057,032

TOTAL 732,306,613 451,760,463

(Secured by hypothecation of all the inventories, book debts including receivables, lien on other current assets of the Company

and further collaterally secured by a first charge on the fixed assets at Head Office and Factories at Gurgaon (Haryana) and

guarantees by Promoter Directors and Demand Promissory Note signed by Promoter Directors on behalf of the Company.)

SCHEDULE : 4Unsecured Loans

Loan from Directors 569,094 3,169,094

Leather Craft (India) Pvt. Ltd. 22,541,935 –

TOTAL 23,111,029 3,169,094


Co

nso

lida

ted

Sch

ed

ule

s Fo

rmin

g P

art

of

The B

ala

nce

Sheet

SCH

EDU

LE : 5

FIX

ED/ IN

TA

NG

IBLE

ASS

ETS

Am

ount

(Rs.

)

GRO

SS B

LOC

KD

EPRE

CIA

TIO

N /

AM

ORT

ISA

TIO

NN

ET B

LOC

K

PAR

TIC

ULA

RS

OPE

NIN

GA

DD

ITIO

NS

DEL

ETIO

NS/

OPE

NIN

GFO

RO

N D

ELET

ION

S/A

S O

ND

UR

ING

SALE

S/A

S O

NA

S O

NTH

ESA

LES/

AS

ON

AS

ON

AS

ON

01/0

4/20

06TH

E Y

EAR

AD

JUST

MEN

T31

/03/

2007

01/0

4/20

06Y

EAR

AD

JUST

MEN

T31

/03/

2007

31/0

3/20

0731

/03/

2006

FIX

ED A

SSET

S

FAC

TOR

Y L

AN

D 3

9,43

4,94

7–

–39,4

34,9

47

– –

– –

39,4

34,9

47

39,

434,

947

FAC

TOR

Y B

UIL

DIN

G 1

73,8

08,4

28 2

6,39

7,76

6 –

200,2

06,1

94

17,

835,

111

12,

135,

927

– 2

9,9

71,0

38

170,2

35,1

56

155

,973

,317

CO

MPU

TER

14,

896,

155

10,

580,

232

–25,4

76,3

87

8,5

27,6

49 3

,530

,174

– 1

2,0

57,8

23

13,4

18,5

64

6,3

68,5

06

ELEC

TRIC

AL

FITT

ING

S 1

3,58

0,20

1 2

,042

,838

–15,6

23,0

39

4,4

97,9

72 1

,209

,864

– 5

,707,8

36

9,9

15,2

03

9,0

82,2

29

FUR

NIT

UR

E &

FIX

TUR

ES 1

8,21

1,33

2 6

,729

,175

–24,9

40,5

07

7,6

04,8

21 2

,883

,707

– 1

0,4

88,5

28

14,4

51,9

79

10,

606,

511

PLA

NT

& M

AC

HIN

ERIE

S 1

36,9

25,7

74 1

6,48

0,42

4 1

0,39

3153,3

95,8

05

27,

734,

177

11,

254,

575

354

38,9

88,3

98

114,4

07,4

07

109

,191

,597

VEH

ICLE

S 1

7,64

1,19

9 4

,413

,231

1,9

99,3

8120,0

55,0

49

7,8

10,8

39 2

,885

,706

805

,951

9,8

90,5

94

10,1

64,4

55

9,8

30,3

60

OFF

ICE

EQU

IPM

ENTS

16,

528,

303

4,3

34,8

20 –

20,8

63,1

23

4,4

80,0

28 1

,950

,448

6,4

30,4

76

14,4

32,6

47

12,

048,

275

TO

TA

L 4

31,0

26,3

37 7

0,97

8,48

6 2

,009

,774

499,9

95,0

49

78,

490,

597

35,

850,

401

806

,305

113,5

34,6

93

386,4

60,3

57

352

,535

,741

INTA

NG

IBLE

ASS

ETS

CO

MPU

TER

SO

FTW

AR

E 4

,408

,266

5,7

57,7

30 –

10,1

65,9

96

2,8

98,7

81 8

75,3

80 –

3,7

74,1

61

6,3

91,8

35

1,5

09,4

85

TEC

HN

ICA

L R

ECIP

ES

& F

OR

MU

LAE

12,

969,

505

– –

12,9

69,5

05

1,2

96,9

51 1

,296

,951

– 2

,593,9

02

10,3

75,6

03

11,

672,

554

TO

TA

L 1

7,37

7,77

1 5

,757

,730

– 2

3,1

35,5

01

4,1

95,7

32 2

,172

,331

– 6

,368,0

63

16,7

67,4

38

13,

182,

039

CA

PIT

AL

AD

VA

NC

ES &

WIP

CA

PITA

L A

DV

AN

CES

& W

IP 1

13,9

12,0

59 3

37,3

60,5

66 2

3,91

9,05

5427,3

53,5

70

– –

–427,3

53,5

70

113

,912

,059

TO

TA

L 1

13,9

12,0

59 3

37,3

60,5

66 2

3,91

9,05

5 4

27,3

53,5

70

– –

– –

427,3

53,5

70

113

,912

,059

GR

AN

D T

OTA

L (R

s.)

562

,316

,167

414

,096

,782

25,

928,

829

950,4

84,1

20

82,

686,

329

38,

022,

732

806

,305

119,9

02,7

56

830,5

81,3

65

479

,629

,839

PREV

IOU

S Y

EAR

368

,841

,434

345

,643

,114

152

,168

,381

562,

316,

167

51,

810,

360

31,

643,

879

767

,910

82,

686,

329

479,

629,

839

317

,031

,074

63



SCHEDULE : 6

INVESTMENTS

Current Investment (Quoted - Non Trade)

Mutual Funds – 90,975,710

TOTAL – 90,975,710

SCHEDULE : 7

INVENTORIES

(As certified by the Management)

Raw Material : Imported 121,501,156 35,558,736

: Indigenous 376,506,775 302,958,286



Goods-in-Transit : Raw Material 3,058 –

: Finished Goods 8,381,329 19,591,464

TOTAL 651,120,449 449,011,650

SCHEDULE : 8

SUNDRY DEBTORS

(Unsecured, Considered Good)

Debts Outstanding for a period exceeding six months 11,262,338 8,844,080

* Others Debts 247,673,431 176,702,189

TOTAL 258,935,769 185,546,269

SCHEDULE : 9


Cash in Hand 2,872,145 3,016,042

Bank Balance with Scheduled Banks 5,902,315 21,306,217

Bank Balance with Other Banks 335,246 9,945,894

In Margin Money accounts 12,317,085 11,792,134

Bank Deposits 5,579,500 –

TOTAL 27,006,291 46,060,286




SCHEDULE : 10

LOANS & ADVANCES

(Unsecured, Considered good)

Advances recoverable in cash or in kind 3,362,557 5,587,584

or for value to be received – –

Advance to Staff 9,256,973 6,275,465

Security Deposit 17,628,021 13,082,078

Advance Income Tax and TDS 14,401,469 7,086,335

Duty Drawback Receivable 36,390,138 20,700,273

Interest/Dividend/Other Receivable 126,225 1,112,112

Cenvat/ Sales Tax/ VAT Recoverable 15,892,930 25,558,508

Refundable Sales Tax 25,053,084 –

Refundable Vat 6,224,951 –

Advances to Suppliers 14,696,544 30,721,967

Prepaid Expenses 1,422,239 806,549

Advance Against Land 7,500,000 –

Rent Advance 250,000 –

TOTAL 152,205,131 110,930,871

SCHEDULE : 11

CURRENT LIABILITIES

Advances from Customers 415,572 –

Credit Balance in Bank Current Accounts 53,553,259 33,263,562


Other Liabilities 26,966,595 20,260,083

Unpaid Dividend 35,876 18,371

TOTAL 256,137,579 207,709,505

SCHEDULE : 12

PROVISIONS

Provision for Taxation 14,130,313 6,276,315

Provision for Proposed Dividend 9,613,650 6,409,100


TOTAL 25,092,278 13,584,292

SCHEDULE : 13


Exports Sales (FOB) 2,047,890,013 1,321,831,799

Domestic Sales 5,964,373 23,079,451

Duty Drawback 23,755,788 18,578,815

Job Work (Inter-Unit) 1,235,511 –

TOTAL 2,078,845,685 1,363,490,065


65



SCHEDULE : 14

OTHER INCOME

Interest 1,356,830 3,195,509

Rental Income 1,772,148 –

Dividend Income 1,690,009 1,209,952

Income on Mutual Funds Redemption/ Sale of Shares 2,739,125 336,251

Miscellaneous Income 640,702 427,878

Exchange Difference 6,951 –

Sale of DEPB License 133,176 –

TOTAL 8,338,940 5,169,589

SCHEDULE : 15

INCREASE/DECREASE(-) IN STOCKS

Closing Stock



Goods-in-Transit : Finished Goods 8,154,514 19,298,390

: Semi Finished Goods 3,704,532 5,410,759

153,109,460 111,471,950

Less : Opening Stock



Goods-in-Transit : Finished Goods 18,625,142 3,979,139

: Semi Finished Goods 4,813,611 –

111,471,950 84,498,434

TOTAL 41,637,510 26,973,516

SCHEDULE : 16

MATERIAL, MANUFACTURING & OTHERS

Raw Material Consumed : Indigenous 838,799,640 527,616,593

: Imported 137,358,763 83,973,324

Consumables Stores : Indigenous 71,833,519 50,511,017

: Imported 9,522,356 10,960,583

Electricity, Water & Fuel Charges 26,755,941 18,258,729

Fabrication and Processing 144,696,001 205,201,495

Repair and Maintenance 8,555,637 12,183,779

Freight, Cartages and Clearing 43,608,888 22,588,382

Discount and Rebates 11,491,451 11,096,579

TOTAL 1,292,622,196 942,390,482




SCHEDULE : 17

PERSONNEL, ADMINISTRATION & SELLING

Wages, Salary & Bonus 99,756,126 61,469,131

Contribution to Provident Fund 4,729,606 2,041,692

Contribution to E.S.I. Fund 2,195,859 690,982

Staff Welfare Expenses 12,563,571 7,637,072

Freight Outward and Packaging 34,863,900 24,956,455

Directors Remuneration 6,941,137 5,115,414

Traveling and Conveyance 22,731,810 16,473,892

Printing and Stationery 4,752,606 3,594,451

Communication & Courier 17,832,997 13,227,554

Consultancy & Professional Charges 4,441,865 5,841,237

Books & Periodicals 139,824 101,322

Commission & Brokerage Expense – 5,718,604

Sales Promotion 5,377,829 1,680,488

Security Expenses 14,185,927 3,642,731

Vehicle Running & Maintenance 4,309,073 3,815,584

Insurance Charges 5,037,727 4,593,583

Payments to Auditors 787,085 628,381

Fees & Subscriptions 2,306,370 2,251,136

Testing Expenses 5,890,610 5,228,971

Miscellaneous Expenses 3,469,692 3,173,919

Loss on Sale of Fixed Assets 458,969 54,130

Rent 23,335,468 17,156,239

Deferred Revenue Expenditure Written Off 3,122,768 1,968,140

Expenses of Prior Period 746,807 1,879,046

TOTAL 279,977,626 192,940,155

SCHEDULE : 18

PRE - OPERATIVE EXPENSES

Auditor's Remuneration 33,672 –

Board Meeting 11,504 –

Business Promotion 43,000 –

Communication 156,333 –

Consultancy 2,820,996 –

Electricity, Power & Fuel 335,000 –

Foreign Travelling 1,369,179 –

Guest House 68,749 –

Trial & Machine Setup Charges 16,346,562 –

Printing & Stationary 2,100 –

Preliminary Expenses 27,600 –

Rent 3,811,871 –

Repair & Maintenance 197,000 –

Salary 8,429,241 –

Sample Development Charges 5,564,902 –

Telephone Expenses 83,000 –

Travelling & Conveyance 51,000 –

TOTAL 39,351,709 –


67


SCHEDULE : 19

SIGNIFICANT ACCOUNTING POLICIES AND NOTES



The Financial Statements are prepared on accrual basis under the historical cost convention in accordance with applicableAccounting Standards issued by The Institute of Chartered Accountants of India and relevant presentational requirementsof the Companies Act, 1956.

2. Principles of Consolidation

The Consolidated Financial Statements relate to Financial Statements of Crew B.O.S. Products Limited and it's SubsidiaryCompanies.

The Consolidated financial statements have been prepared on the following basis:

The Subsidiaries have been consolidated by applying Accounting Standard 21" Consolidated Financial Statements."

Subsidiaries are consolidated from the date on which effective control is transferred to the Group and are no longerconsolidated from the date of disposal.

The financial statements of the Company and its Subsidiaries Companies have been combined on a line-by-line basis byadding together the book value of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances & intra-group transactions resulting in unrealized profits or losses.

The excess of the Company's portion of equity and reserves of the Subsidiaries Companies as at the time of its investmentis recognized in the financial statements as Capital Reserve.

The Consolidated financial statements have been prepared using uniform accounting policies for like transactions andother events in similar circumstances and are presented to the extent possible, in the same manner as the Company'sseparate financial statements.


Sales are recognized upon the transfer of significant risks and rewards of ownership to the customers. Cost of samplesdeveloped and supplied is recognized on accrual basis net of recoveries.

4. Fixed Assets

Fixed Assets are stated at actual cost of acquisition inclusive of taxes, duties, freight and other incidental expensesincluding interest related to acquisition, net of Grants.

Intangible assets are recognized at cost which comprises of purchases price (including taxes and duties, if any) and anydirectly attributable expenditure on making the assets ready for their intended use.

Fixed assets are reviewed for impairment on each balance sheet date, in accordance with the accounting standard AS28 issued by The Institute of Chartered Accountants of India.

5. Depreciation

Depreciation on fixed assets used in Fashion Accessories Business is provided on WDV Method & Depreciation on fixedassets used in Leather Business is provided on SLM Method at the rates and in the manner as prescribed in Schedule inSchedule XIV of the Companies Act, 1956

Intangible assets are being amortized on a straight line method over the estimated useful lives of ten years, in line withthe accounting standard AS 26 issued by the institute of Chartered Accountants of India

All assets costing Rs 5000/- or below are depreciated in full by way of a one time depreciation charge.

Leasehold improvements are amortized over the period of lease, including the optional period of lease.

6. Inventories


b. Semi finished goods are valued at cost up to estimated stage of process.



Transactions in foreign currencies are recorded at the rate prevailing on the date of the transactions. Monetary items aretranslated at the exchange rates prevailing at the end of the year and the gain/loss arising on such translation is credited/charged to the profit and loss account. Exchange differences, relating to fixed assets are adjusted to the carrying cost ofthe assets.



In case of Forward Exchange Contract, the cost of contract is amortized over the period of contract. Any profit or lossarising on the cancellation or renewal of a forward exchange contract is recognized as income or expense for the year,except in case of forward exchange contract relating to liabilities incurred for acquiring fixed assets from outside India,in which case, such profit or loss is adjusted in the cost of fixed assets.

For the purpose of consolidation, being the non-integral foreign operations, the Company has translated Assets andLiabilities of subsidiaries outside India at the year-end exchange rate and Income and Expenditure items at an averagerate that approximates to the exchange rate prevailing on the date of transactions. The resultant translation adjustmentis reflected as a separate component of Shareholders' funds as "Foreign Exchange Translation Reserve".


The Company's contribution to defined contribution schemes such as provident fund and family pension fund arecharged to the profit and loss account as incurred. The Company also provides gratuity benefit to the employees, whichis funded through a LIC group gratuity scheme. The Liability at the year-end for the same is determined by an actuarialvaluation done at year-end and shortfall/surplus over the amount contributed to the scheme is charged off to the profitand loss account. Provision for Leave Encashment is made on the basis of accrual basis and charged to profit and lossaccount.

9. Borrowing Costs

The borrowing costs on funds other than those directly attributable to the acquisition of a qualifying asset i.e. assets thatnecessarily takes a substantial period of time to get ready for its intended use, are charged to revenue in the period inwhich they are incurred.

The borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets arecapitalized as part of the cost of that asset.

10. Investments

Current Investments are carried at lower of cost and fair value. Fair value in the case of quoted investments refer to themarket value of the investments arrived at on the basis of last traded prices as at the year end.

11. Taxation

Current Tax

Provision for current tax is computed on the basis of tax payable on estimated taxable income and fringe benefitcomputed in accordance with the applicable provisions of Income Tax Act 1961, after considering the benefit availableunder the said Act.

Deferred Tax

In accordance with Accounting Standard -22 "Accounting for Taxes on Income", issued by the Institute of CharteredAccountants of India, the deferred tax for timing differences between the book and tax profits for the year is accountedfor using the tax rates and laws that have been enacted or substantially enacted as of the balance sheet date.

Deferred Tax Assets arising from temporary timing differences are recognized to the extent there is reasonable certaintythat the asset can be realized in future.

12. Export Benefits

Export benefits i.e. Duty Drawback are accounted for on accrual basis. Duty Drawback on Deemed Exports benefits to100% Export Oriented Unit (EOU) is accounted for when the amount is quantified upon receipt of disclaimer certificatesfrom Domestic Tariff Area(DTA) suppliers.

13. Prior Period items

Income and expenses which arise in the current year as a result of errors or omissions in the preparation of financialstatements of one or more prior periods are shown as prior periods adjustments except rebate & discount which areaccounted for by the Company in the year of acceptance thereof.

14. In the opinion of the board of directors the current assets, loan and advances have a Value on realization in the ordinarycourse of business at least equal to the amount at which they are stated in the Balance Sheet and provision for all knownliabilities have been made.


16. The small scale industrial undertakings to whom the Company owes and which is outstanding for more than 30 days asat March 31, 2007 are:

YKK India Pvt. Ltd., M/s Krishna Packaging, M/s K.K.Tanners, M/s Kataria Rubber Solution, M/s Khurana Casting &Pentography, M/s Rider Tanning Industries, M/s Tryca Products, M/s Unique (India), M/s Ajanta Art Dyer, M/s KalsiSports, M/s R.K.Enterprises, Abhi Fab Private Limited, S.K. Dyeing Finishing Mills Private Limited and Sky IndustriesLimited,


69


The above information regarding small scale industrial undertaking has been determined to the extent such parties havebeen identified on the basis of information available with the Company

17. Crew B.O.S. Products Limited has entered into Memorandum of Understanding with Leather Crafts India (Private)Limited to manufacture and export all kinds of footwear and footwear components. The name of the Joint ventureCompany is Crew MAG Exports Limited which was incorporated on 17th November, 2006. Crew B.O.S. ProductsLimited holds 51% equity in the JV Company. The account of this JV Company is appended herewith.

18 The Company has also incorporated an entity in Italy by the name of "Iguvium Srl" on 19th March, 2007, the objectivebeing to market footwear and other leather articles such as bags, wallets, purses etc., in the international market. TheCompany holds 79% of the equity in the subsidiary and the remaining 21% equity is being held by local Italian individualhaving 16 years of experience in the footwear industry. Since the commercial operations have not started in this companytherefore the accounts of this company has not been appended herewith. The Company has incurred EURO 60990towards equity subscription and other pre-operative expenses.

19. The Company has been granted External Commercial Borrowing (ECB) loan of US $ 5000000 (INR 2225 Lakhs) inJapanese Yen (JPY) for the modernization and expansion plans of the Company, by Citibank N.A. London. The rate of theinterest on the same is 6.95% and out of which 0.75% was paid upfront till 31st March, 2007. The moratorium periodof the loan is until 30th June, 2008. The Company has drawn down Rs. 1065.35 Lakhs till 31st March, 2007 and theutilized amount till that date was Rs. 245.73 Lakhs.

20. During the year the Company has issued 1250000 warrants convertible into equity shares of the Company on preferentialbasis at a price of Rs. 178/- per warrant, which will entitle the holder to subscribe to one equity share of the face valueof Rs. 10/-, at a price not being less than Rs. 178/- (including premium of Rs. 168/-) per equity share of the Companyagainst each warrant. The holder of the warrants will have an option to apply for and be allotted one equity share of theCompany per warrant at any time after the date of allotment but on or before the expiry of 18 months from the date ofallotment, in or more tranches. The warrants were issued to the promoters and other private business investors for theworking capital requirements of the Company. As on date no holder of warrants has exercised the option. The amountreceived of Rs. 298.50 Lakhs against the allotted warrants have been utilized in the working capital requirements of theCompany.

21. During the year under review the Company has increased its Authorised Share Capital from Rs. 16.50 Crores to Rs.20.00 Crores (3000000 equity shares of Rs. 10/- each and 500000 preference share of Rs. 10/- each) . Filing fees &stamping charges amounting to Rs. 2.28 Lakhs incurred for the same have been charged to the Profit and Loss account.

22. During the year the Company the Company has incurred Rs. 15.42 Lakhs on the Qualified Institutional Placement (QIP)issue, which was not completed till 31st March, 2007. The expenditure incurred on the same has been capitalized andit will be amortized, once the issue gets completed.

23. The company had incurred Rs 2.75 lakhs being expenses on proposed Joint Venture in Hong Kong. These expenses areshown under the head Loans & Advances being recoverable in future from the Joint Venture.

24. The Company has amortized Rs. 12.97 lakhs ( Previous Year Rs 12.97 lakhs) being one-tenth of 129.70 lakhs ondevelopment of new recipes and formulation for its leather finishing unit at Manesar. The total expenses incurred inearlier years.

25. Depreciation on factory building includes Rs 38.22 Lakh (Previous year 20,35Lakh) being the amount of amortizationon lease hold property over the lease period over the lease period.

26. Capital advances WIP includes Rs 2174.36Lakh (Previous year Rs 996.94/- Lakh) on account of building underconstruction, Rs. 61.33 Lakh (Previous year Rs 32.15 Lakh) for software under developments.

27. The Company has amortized Rs. 5.84 lakhs ( Previous Year Rs 5.84 lakhs) being one-fifth of the total expenses incurredin shoe division in earlier years.

28. Income from operations includes Duty Drawback Income of Rs. 105.90 lakhs for the financial year 2005-06 which hasbeen recognized during this year being benefit of duty drawback on deemed export on purchases of goods made by100% Export Oriented Unit (EOU) as per provisions of chapter 8 of Foreign Trade Policy.

29. During the year company has sold all the investments of face value of Rs 909.76 Lacs in Mutual Funds at a profit of Rs27.39 Lacs.

Export Sales includes Rs 194.39 Lakhs inter-segment sales being considered as deemed Exports from one EOU toanother EOU of the Company.




1. Contingent Liabilities: (Rs. in Lakhs)

For the year ended For the year endedMarch 31, 2007 March 31, 2006

a) Guarantees given by Bankers 22.62 26.25

b) Corporate Guarantee for its wholly owned subsidiary. Nil Nil

c) Claims not acknowledge as Debt Nil Nil

d) Excise Duty, Sales Tax, Income Tax levied, not acknowledge as debt Nil Nil

e) Capital Commitments (Net of Advance) (Out of aboveINR 0.89 lacs pertans to the JV Crew MAG Exports Ltd.) 412.64 681.84

f) I) Bonds given to Excise authorities for Unit at 199,Phase - I Udyog Vihar, Gurgaon. Nil Nil

II) Bonds given to Excise authorities forEOU unit at 214 Phase-I, 258 Phase-IV, and Plot -37Sector -4, & Plot 8-9, Sector -7, IMT, Manesar, Gurgaon 1076.70 258.03

g) Letter of credit established by bank 94.27 336.61

2. The consolidated financial statements present the consolidated accounts of Crew B.O.S. Products Limited with its followingsubsidiaries:

Name of Subsidiary Country of Proportion of Year RemarksIncorporation Ownership Ending

Indian Subsidiary

Crew Home Products Limited India 100% 31.03.2007 For the Period 1st April 2006 to31st March, 2007

Crew MAG Exports Limited India 51% 31.03.2007 For the Period 17th November 2006to 31st March, 2007

Foreign Subsidiary

La Tatva S.r.l Italy 100% 31.12.2006 No Significant transaction after theBalance Sheet Date. ProvisionalFinancial Statements for the periodJan - Mar 07

Crew B.O.S. Far East Limited Hong-Kong 100% 31.12.2006 Audited by Chan & Man for theperiod 1st January, 2006 to 31stDecember, 2007. ProvisionalFinancial Statements for the periodJan - Mar 07.

3. Deferred Tax Liability as at 31st March, 2007 comprises the following:(Rs. in Lakhs)

For the year ended For the year ended31st March, 2007 31st March, 2006

Timing differences on account of: Deferred Tax Assets Deferred Tax Liability Deferred Tax Assets Deferred Tax Liability

a) Depreciation 34.37 24.27 1.15

b) Employees Benefits 6.24 – 3.38

c) Miscellaneous Expenditure 0.04 0.04

Total 6.28 34.37 27.69 1.15

Net Deferred Tax Liability 28.09 26.54

4. Auditors’ remuneration(Rs. In Lakhs)

Particulars For the year ended For the year endedMarch 31, 2007 March 31, 2006

a) Audit Fee 7.87 3.78b) Limited review of un-audited results 1.00 0.90c) Income Tax Matters 0.60 0.78e) Other 1.12 0.82

TOTAL 10.59 6.28

Consolidated SchedulesForming Part of the Balance Sheet

71



The basic/diluted earning per share calculated as per Accounting Standard-20 issued by The Institute of CharteredAccountants of India is as under: (Rs. in Lakhs)

Current Year Previous Year(Rs.in Lakhs) (Rs.in Lakhs)

a) Net Profit after tax available for equity shareholders 2215.96 1520.44

b) Weighted average no of equity shares outstanding during the year 182.44 122.45

Basic / Diluted earning (in Rs.) per share (a / b ) 17.29 /- 16.97/-

12.42 /- 11.65 /-

The Company has allotted 1250000 share warrants convertible into Equity Share of the Company. The warrants as ondate have not been converted into Equity Shares of the Company.

6. Related Party DisclosuresRelated party disclosures, as required by AS – 18 “Related Party Disclosures” are given below:

(Rs. in Lakhs)

Name of the Party Nature of relationship Nature of transaction 2006-07 2005-06

Crew Home Products Ltd. Wholly Owned Subsidiary Rent 17.72 18.00

Raw Material Purchased 9.86 26.91

Advance 20.73 61.64

Crew B.O.S Far East Ltd. - Do - - Do - – 4.38

Sales 62.42 91.00

Capital Contribution – 0.43

Reimbursement of Expenses 10.13 8.45

La Tatva S. r. l, Italy - Do - Advance 4.35 2.75

Crew Concepts andTechnology Pvt. Ltd. - Do - Dividend 18.50 27.13

Crew Trade Post Pvt. Ltd. - Do - - Do - 12.34 19.91

Crew MAG Exports Limited Joint Venture Capital Contribution 2.55 –

Reimbursement of Expenses 212.87

Advance 75.00 –

Mr. Tarun Oberoi Key Managerial Personnel Director's remuneration 41.42 28.55

Mr. Robin Bartholomew - Do - - Do - 22.91 15.77

Mrs. Shallay Bartholomew - Do - Remuneration 5.26 5.82

7. Segment Information:

a) Information about primary Business Segment (Rs. in Lakhs)

PARTICULARS Consolidated 31-03-2007

Segment Revenue

(a) Fashion Accessories 18474.54

(b) Leather 2313.91

Net Income from Operations 20788.45

Less: Inter Segment Sales 2162.77

Other Income 83.39

Total Revenues 18709.07

Segment Result (Profit/loss before tax & interest from each Segment)


(b) Leather 106.52

Total 3714.80



Less :

Interest 703.20

Other un-allocable expenditure net of un-allocable income 653.38

Total Profit before Tax 2358.22

Capital Employed (Segment assets - Segment Liabilites)


(b) Leather 3485.56

(c) Un-allocable Assets less Liabilities 3549.13

Total 16854.52

b) Information about Secondary Business Segment (Rs. in Lakhs)

Location Revenues

Exports 20728.81

Domestic 59.64

Total 20788.45

Less: Inter Segment Sales 2162.77

Net Income from Operations 18625.68

Segment Accounting Policies:

In addition to the significant accounting policies as per Schedule 17, the accounting policies in relation to segment accountingare as under

i) Identification of Segment

For management purposes, the Company is organised in two major operating divisions - Fashion Accessories & Leather.These divisions are the basis on which the Company reports its primary segment information.

ii) Segment Assets and Liabilities

All Segments assets and liabilities are directly attributable to the segment. Segment assets include all operating assetsused by the segment and consist primarily of fixed assets, inventories, sundry debtors, loans and advances and operatingcash and bank balances. Segment liabilities all operating liabilities and consist primarily of creditors and accruedliabilities. Segment assets and liabilities do not include investments, miscellaneous expenditure, current income tax anddeferred tax.

iii) Inter Segment Transfers

Segment revenues and segment results include transfers between business segments Inter segment sales to leather areaccounted for at cost of production. These transfers are eliminated on consolidation.

iv) Segment revenues and expenses

Joint expenses are allocated to business segments on a reasonable basis. All other revenues and expenses are directlyattributable to the segments. They do not include interest income and interest expenses.

8. This is the first financial year of the Segment Reporting, therefore corresponding amount for immediately preceding financialyear has not been given.

9. Previous year figures have been regrouped and re-arranged where ever necessary so as to make it comparable with thecurrent year figures.


PARTICULARS Consolidated 31-03-2007

For Anil K Goyal and Associates For and on behalf of the BoardChartered Accountants



73

CREW HOME PRODUCTS LIMITED

Directors'

Report

To the Members,

Your Directors have pleasure in presenting the Third Annual

Report and Audited Accounts for the year ended 31st March,

2007 and the Auditors' Report thereon.

Financial Results

(Rs. in Million)

Year ended Year ended

March 31, 2007 March 31, 2006

Income from Operation 1.34 7.45

Profit before interest and

depreciation 2.19 2.88

Less: Interest 0.00 0.69

Depreciation 1.90 2.04

Profit before taxation 0.29 0.15

(Less) : Provision for taxation 0.12 0.16

Profit after taxation 0.17 (0.01)

Add / (Less) :

Deferred tax liability (0.05) 0.04

Add:

Tax Adjustments of Prior years (0.04) –

Balance carried to

Balance Sheet 0.08 0.03

Performance Review

Your Company is engaged in Home furnishing business. The

Company has achieved a turnover of Rs. 1.34 million and

achieved a profit of Rs. 0.08 million during the year under review.

The Company shall continue to act as Contract manufacturer

for the parent Company.

Dividend

In order to conserve the financial resources of the Company

your Directors do not recommend any dividend for the financial

year ended on 31st March, 2007.

Directors

Mr. Umesh Oberoi, Director retires by rotation and being eligible

offer himself for reappointment.

Mr. Munish Sharma and Mr. Pradeep Kumar Bindra were

appointed as the Additional Directors of the Company in the

Board Meeting of the Directors held on 1st day of May, 2007.

As per Section 260 of the Companies Act, 1956, the Additional

Directors holds office upto the date of the forthcoming Annual

General Meeting of the Company and on being eligible, they

have offered themselves for re-appointment as Director of the

Company. The notices together with money deposit have been

received under Section 257 of the Companies Act, 1956, from

the Members proposing the candidature of Mr. Munish Sharma

and Mr. Pradeep Kumar Bindra as the Directors of the Company.

During the period under review, Mr. Tarun Oberoi resigned from

the Directorship of the Company w.e.f 1st day of May, 2007

and Mr. Robin Bartholomew resigned from the Directorship of

the Company w.e.f. 1st day of May, 2007 due to their other

commitments. Your Directors would like to place on record their

warm appreciation of the valuable contributions made by them

during their tenure as the Directors of the Company.

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, the applicable

accounting standards have been followed along with

proper explanation;

(b) prudent accounting policies have been selected and have

made judgments 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, 2007 and of the Profit of

the Company for the financial year ended 31st March,

2007.

(c) proper and sufficient care has been taken for the


accordance with the provisions of the Companies Act,

1956, for safeguarding the assets of the company and for

preventing and detecting fraud and other regularities;

(d) annual accounts have been prepared on a going concern

basis

Auditors & Auditors observation

The auditors of the Company M/s Anil K. Goyal & Associates,

Chartered Accountants hold office until the conclusion of this

Annual General Meeting, and being eligible offer themselves

for re-appointment. They have furnished a certificate that their

appointment if made shall be within the statutory limits specified

in Section 224(1B) of the Companies Act, 1956.

The observation of the Auditors in the Auditors' Report is

explained, wherever necessary, in the appropriate notes to the

accounts.

74 CREW HOME PRODUCTS LIMITED

Energy Conservation, Technology absorption and Foreign

Exchange earnings and outgo under Section 217 (1) (e) of

the Companies Act, 1956, read with Companies (Disclosure

of Particulars in the Report of Board of Directors) Rules,

1988

i) Conservation of Energy





ii) Technology absorption

The manufacturing process does not involve any major

technology absorption.

iii) Foreign Exchange Earnings and Outgo

There is no Foreign Exchange earning and outgo during

the year under review. The Company shall take proper

and vigorous initiatives to increase the Foreign Exchange

earnings and mitigations ofrisk involved.

Public Deposit

The company has neither invited/nor accepted any deposits

during the year within the meaning of Section 58 A of the

Companies Act, 1956, read with Companies (Acceptance of

Deposit) Rules, 1975.

Particulars of Employees

The Company has no employee in respect of whom the

statement under section 217(2A) of the Companies Act, 1956 is

required to be annexed.

Acknowledgements

Your Directors place on record their sincere gratitude to the

continuing patronage of our valued customers, bankers,

Shareholders who have sustained their support and

encouragement to your company.

Your Directors also place on record, their sincere appreciation

to the dedication and commitment of its staff at all levels, who

have together been responsible for the growth of the Company.


(Umesh Oberoi) (Munish Sharma)

Director Director

Place : Gurgaon


75


To the Members,

Crew Home Products Limited,

We have audited the attached Balance Sheet of Crew Home

Products Limited, as at 31st March, 2007 and Profit & Loss

Account and Cash Flow Statement for the year ended on that

date annexed thereto. These financial statements are the

responsibility of the Company's Management. Our responsibility

is to express an opinion on these financial statements based on

our audit.

We conducted our audit in accordance with auditing standards

generally accepted in India. Those standards require that we

plan and perform the audit to obtain reasonable assurance about

whether the financial statements are free of material

misstatements. An audit also includes assessing the accounting

principles used and significant estimates made by management,

as well as evaluating the overall financial statement presentation.

We believe that our audit provides a reasonable basis for our

opinion.

1. As required by the Companies (Auditors report) Order, 2003

issued by the Central Government of India in terms of

Section 227(4A) of the Companies Act, 1956, we annex

hereto a statement on the matters specified in paragraph 4

& 5 of the said order.

2. Further to our comments in the annexure referred to in

paragraph 1 above :-

a) We have obtained all the information and

explanations which to the best of our knowledge and

belief were necessary for the purpose of our audit.

b) In our opinion, proper books of account, as required

by Law, have been kept by the Company so far as

appears from our examination of the books.

c) The Balance Sheet, Profit and Loss Account and Cash

Flow Statement dealt with by this report are in

agreement with the books of account.

d) In our opinion, the Balance Sheet, Profit and Loss

Account and Cash Flow Statement dealt with by the

Report comply with the accounting standards referred

to in Sub-Section (3C) of Section 211 of the Companies

Act, 1956.

e) On the basis of written representation received from

the directors and taken on record by the board of

directors, we report that none of the directors is

disqualified as on 31st March, 2007 from being

appointed as a director in terms of clause (g) of sub

section (1) of section 274 of the Companies Act, 1956.

(f) In our opinion and to the best of our knowledge and

information and according to the explanations given

to us, the accounts give the information required by

the Companies Act, 1956,in the manner so required

and give a true and fair view :-

(i) In the case of the Balance Sheet, of the state of

affairs of the Company as at March 31st, 2007.

(ii) In the case of the Profit & Loss Account of the

profit for the year ended on that date.

(iii) In the case of the Cash Flow Statement, on the

cash flows for the year ended on that date.



(Anil K. Goyal)

Proprietor

FCA 71221


Place : Gurgaon

Auditors’

Report


5) The transactions that need to be entered into a register in

pursuance of section 301 of the Companies Act, 1956 have

been entered. According to the information and

explanations given to us , purchase of goods and sale of

goods and services aggregating during the year to Rs.

5,00,000/- or more in respect of a party in pursuance of

contracts or arrangements entered into the register

maintained under section 301 of the Companies Act, 1956

have been made at prices which are reasonable having

regard to prevailing market prices at the relevant time for

such goods.


explanations given to us, as the Company has not accepted

deposits from the public, paragraph 4(vi) of the Order is

not applicable.


that is commensurate with the size and nature of its

business.



209(1)(d) of the Companies Act, 1956 in respect of activities

of the company and therefore paragraph 4(viii) of the Order

is not applicable.


explanations given to us, the company is generally regular

in depositing undisputed statutory dues including Provident

Fund, Employees' State Insurance, Income Tax, Wealth Tax,

Service Tax, Sales Tax, Custom Duty, Excise Duty, Cess,

and other statutory dues, as applicable to its activities, with

appropriate authorities. There are no arrears of outstanding

statutory dues as at 31st March, 2007 for a year of more


explained to us, there are no disputed dues of Sales Tax,

Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise

Duty and Cess that have not been deposited on account of

any dispute and therefore paragraph 4(ix)(b) of the Order

is not applicable.

10) The company has no accumulated losses as at the end of

the financial year and the company has not incurred cash

1) a) The Company has generally maintained proper records

showing full particulars including quantitative details

and situation of Fixed Assets.



discrepancies are reported to have been observed on

such verification as compared to book records.

c) The Company has not disposed off a substantial part of

fixed assets during the year and therefore paragraph

4(i) (c) of the Companies (Auditor's Report) Order, 2003

(hereinafter referred to as the Order) is not applicable.

2) a) The Inventory has been physically verified by the

management during the year. In our opinion the

frequency of verification is reasonable.

b) In our opinion, the procedures of physical verification

of inventory followed by the Management are

reasonable and adequate in relation to the size of the

company and the nature of its business.


records, in our opinion, the company is maintaining

proper records of inventory. The discrepancies noticed

on physical verification of inventory as compared to

book records were not material.

3) The Company has taken advance from its directors in the

nature of interest free unsecured loan amounting to Rs.

5.69 lacs. The terms and conditions thereof are not prima

facie prejudicial to the interest of the company. The

company has not granted any loans secured or unsecured,

to companies, firms or other parties covered in the register

maintained under section 301 of the Act and therefore

paragraph 4(iii) of the order is not applicable.


explanations given to us, there are adequate internal control

procedure commensurate with the size of the Company

and the nature of its business for the purchase of stores &

spare parts, fixed assets , and with regard to sale of products

and there are no major internal control weaknesses in

regard thereto.

Annexures referred to in para 1 of the Auditors' Report to the Members of Crew

Home Products Limited accounts for the year ended March 31st, 2007

77


losses in the current financial year as well as in the

immediately preceding financial year.

11) The Company has not defaulted in repayment of dues to

the bank.

12) The Company has not granted any loans or advances on

the basis of security by way of pledge of shares, debentures

and other securities and therefore paragraph 4(xii)of the


13) The provisions of any special statute applicable to chit

fund and nidhi/mutual benefit fund/society are not

applicable to the company and therefore paragraph 4(xiii)

of the Order is not applicable.

14) The Company is not dealing or trading in shares, securities,

debentures and other investments and therefore paragraph

4(xiv) of the Order is not applicable.

15) According to the information and explanations given to

us, the company has not given any guarantee for loans

taken by others from bank or financial institutions and

therefore paragraph 4(xv) of the Order is not applicable.

16) The company has not availed any term loans from the bank

during the year and there is no outstanding of such loans

at the end of the year. According to the information and

explanation given and in our opinion the term loans

obtained in earlier years were applied for the purpose for

which the loans were obtained.



given to us, the company has not used funds raised on

short term basis for long term investments and vice versa.


us, the company has not made any preferential allotment

of shares during the year to parties and companies covered

in the Register maintained under section 301 of the

Companies Act, 1956 and therefore paragraph 4(xviii) of

the Order is not applicable.

19) The company has not issued any debentures during the


applicable.

20) The company has not raised any money by way of public

issue during the year and therefore paragraph 4(xx) of the


21) During the course of our examination of the books and

records of the company, carried out in accordance with

the auditing standards generally accepted in India, we have


company, noticed or reported during year nor we have

been informed of such case by the Management.



(Anil K. Goyal)

Proprietor

FCA 71221


Place : Gurgaon


Schedule Amount (Rs.) Amount (Rs.)March 31, 2007 March 31, 2006

SOURCES OF FUNDS

SHAREHOLDERS FUNDS

Share Capital 1 500,000 500,000

Reserves & Surplus 2 856,830 770,944

LOAN FUNDS

Secured Loans – –

Unsecured Loans 3 24,533,714 25,061,377

DEFERRED TAX LIABILITY 89,339 38,206

TOTAL 25,979,883 26,370,527


FIXED ASSETS 4

Gross Block 26,815,152 24,757,328

Less : Depreciation 4,995,908 3,097,981

Net Block 21,819,244 21,659,347

CURRENT ASSETS, LOANS & ADVANCES

Inventories 5 3,704,532 4,813,611

Sundry Debtors 6 517,752 517,752

Cash & Bank Balances 7 507,504 579,610

Loans & Advances 8 1,668,432 1,338,464

6,398,220 7,249,437

LESS : CURRENT LIABILITIES & PROVISIONS


Provisions 10 630,000 720,404

2,237,581 2,538,257


TOTAL 25,979,883 26,370,527

Significant Accounting Policies and Notes forming part ofthe Accounts 16

The Schedules referred to above form an integral part ofthe Balance Sheet.



(Anil K. Goyal) (Umesh Oberoi) (Munish Sharma)Proprietor Director DirectorFCA 71221

Place : GurgaonDate : 9th June, 2007

Balance Sheet

79


As per our report of event date attached.


(Anil K. Goyal) (Umesh Oberoi) (Munish Sharma)

Proprietor Director Director

FCA 71221

Place : Gurgaon


Profit and Loss Account

for the Year Ended March 31, 2007

Schedule Amount (Rs.) Amount (Rs.)March 31, 2007 March 31, 2006

INCOME

Income from Operations 11 1,344,982 7,455,807

Other Income 12 2,266,046 2,377,737

Increase in Stocks 13 (1,109,079) (2,294,526)

TOTAL 2,501,949 7,539,018

EXPENDITURE

Material Manufacturing & Others 14 5,907 3,997,934

Personnel, Administration & Selling 15 302,295 656,490

Interest & Finance Charges 730 686,126

Depreciation 1,897,927 2,044,956

TOTAL 2,206,859 7,385,506

Profit Before Taxation 295,090 153,512

Less: Provision for Taxation 120,000 160,000

Less: Fringe Benefit Tax 5,500 –

Less/(Add) : Deferred Tax Liability 51,133 (39,622)

Profit After Taxation 118,457 33,134

Add : Tax Adjustments of Prior Years – –

Add / (Less) : Adjustments of Prior Years 32,571 –

Profit After Taxation 85,886 33,134

Add : Balance brought forward from previous year 770,944 737,810

856,830 770,944

E.P.S. [Basic & Diluted] In Rs. 1.72 0.66

Significant accounting Policies and Notes forming part ofthe Accounts 16

The Schedules referred to above form an integral part ofthe Profit & Loss Account.


Cash Flow Statement

for the Period Ended March 31, 2007

Amount (Rs.) Amount (Rs.)March 31, 2007 March 31, 2006


Net (loss)/profit before tax but after exceptional/extraordinary items 295,090 153,512

Adjustments for:

Depreciation 1,897,928 2,044,956

Interest Expense 730 686,126

Interest Income – (149,859)

Provision for Gratuity & Leave Encashment – (111,324)

Operating profit before working capital changes 2,193,748 2,623,411

Adjustments for changes in working capital :

– (INCREASE)/DECREASE in Sundry Debtors – 3,349,493

– (INCREASE)/DECREASE in Other Receivables 67,703 404,753

– (INCREASE)/DECREASE in Inventories 1,109,079 5,336,336

– INCREASE/(DECREASE) inTrade and Other Payables (210,272) (7,632,676)

Cash generated from operations 3,160,258 4,081,317

– Taxes (Paid) / Received (Net of TDS) (613,576) (809,643)

– Prior Period (Expenses)/Income (Net) (32,571) –

Net cash from operating activities 2,514,111 3,271,674


Purchase of fixed assets (2,057,824) (2,201,432)

Interest Received (Revenue) – 450,132

Net cash used in investing activities (2,057,824) (1,751,300)


Proceeds from long term borrowings – (7,854,765)

Proceeds from short term borrowings (527,663) 3,720,517

Interest Paid (730) (686,126)

Net cash used in financing activities (528,393) (4,820,374)

Net Increase/(Decrease) in Cash & Cash Equivalents (72,106) (3,300,000)

Cash and cash equivalents as at 01.04.2006 579,610 3,879,610

Cash and cash equivalents as at 31.03.2007 507,504 579,610

Cash and cash equivalents comprise

Cash, Cheques & Drafts (in hand) and Remittances in Transit 40,760 41,079

Balance with Scheduled Banks 466,744 538,531

Cash and cash equivalents as at 31.03.2006 507,504 579,610

Notes :

1. The above Cash flow statement has been prepared under the indirect method setout in AS-3 issued by the Institute ofChartered Accountants of India.





81


Schedules

Forming part of the Financial Statements


March 31, 2007 March 31, 2006

SCHEDULE : 1

SHARE CAPITAL


1,00,000 Equity Shares of Rs. 10/- each 1,000,000 1,000,000

TOTAL 1,000,000 1,000,000


50,000 Equity Shares of Rs. 10/- each fully paid up. 500,000 500,000

TOTAL 500,000 500,000

SCHEDULE : 2

RESERVES & SURPLUS

Profit & Loss Account 856,830 770,944

TOTAL 856,830 770,944

SCHEDULE : 3

UNSECURED LOANS

Crew B.O.S Products Ltd.( Holding Company ) 23,964,620 21,892,283

Loans From Directors 569,094 3,169,094

TOTAL 24,533,714 25,061,377


SC

HED

ULE : 4

FIX

ED

ASSETS

Am

ount

(Rs.

)

PA

RTIC

ULA

RS

GR

OSS B

LO

CK

DEPR

EC

IATIO

NN

ET B

LO

CK

AD

DIT

ION

SD

EPR

EC

IATIO

ND

EPR

EC

IATIO

N

RA

TE O

FA

S O

ND

UR

ING

SA

LES/

AS O

NA

S O

NFO

R T

HE

ON

SA

LES/

AS O

NA

S O

NA

S O

N

DEPR

.01/0

4/2

006

TH

E Y

EA

RA

DJU

STM

EN

T31/0

3/2

007

01/0

4/0

6Y

EA

RA

DJU

STM

EN

T31/0

3/2

007

31/0

3/2

007

31/0

3/2

006

FAC

TO

RY

LA

ND

0.0

0%

3,7

38

,31

0–

3,7

38,3

10

––

––

3,7

38,3

10

3,7

38

,31

0

FAC

TO

RY

BU

ILD

ING

10

.00

% 1

6,2

96

,34

2 2

,20

1,4

32

– 1

8,4

97,7

74

2,4

17

,50

5 1

,60

8,0

27

– 4

,025,5

32

14,4

72,2

42

13

,87

8,8

37

CO

MP

UT

ER

40

.00

% 4

9,9

50

– 4

9,9

50

35

,14

3 5

,92

3 –

41,0

66

8,8

84

14

,80

7

ELEC

TR

ICA

L F

ITT

ING

S1

3.9

1%

12

0,8

52

– 1

20,8

52

27

,64

9 1

2,9

65

– 4

0,6

14

80,2

38

93

,20

3

FU

RN

ITU

RE &

FIX

TU

RES

18

.10

% 2

96

,61

8 –

296,6

18

89

,93

3 3

7,4

10

– 1

27,3

43

169,2

75

20

6,6

85

PLA

NT

& M

AC

HIN

ER

Y1

3.9

1%

1,6

11

,15

5 –

1,6

11,1

55

35

3,4

04

17

4,9

53

– 5

28,3

57

1,0

82,7

98

1,2

57

,75

1

VEH

ICLES-S

CO

OT

ER

25

.89

% 4

0,7

62

– 4

0,7

62

18

,56

2 5

,74

8 –

24,3

10

16,4

52

22

,20

0

VEH

ICLES-

MO

TO

R C

AR

25

.89

% 2

86

,08

4 –

286,0

84

13

0,2

77

40

,33

8 –

170,6

15

115,4

69

15

5,8

07

OFFIC

E E

QU

IPM

EN

TS

13

.91

% 1

15

,82

3 –

115,8

23

25

,50

8 1

2,5

63

– 3

8,0

71

77,7

52

90

,31

5

TO

TA

L 2

2,5

55

,89

6 2

,20

1,4

32

– 2

4,7

57,3

28

3,0

97

,98

1 1

,89

7,9

27

– 4

,995,9

08

19,7

61,4

20

19

,45

7,9

15

CA

PIT

AL W

OR

K

IN P

RO

GR

ESS

2,2

01

,43

2 2

,05

7,8

24

2,0

57,8

24

– –

– 2

,057,8

24

2,2

01

,43

2

GR

AN

D T

OTA

L 2

4,7

57

,32

8 4

,25

9,2

56

– 2

6,8

15,1

52

3,0

97

,98

1 1

,89

7,9

27

– 4

,995,9

08

21,8

19,2

44

21

,65

9,3

47

PR

EV

IOU

S Y

EA

R 2

2,5

55

,89

6 –

– 2

2,5

55,8

96

1,0

53

,02

5 2

,04

4,9

56

– 3

,097,9

81

21,6

59,3

47

21

,50

2,8

71

Sche

dule

s form

ing

pa

rt o

f th

e F

ina

nci

al S

tate

ments

83


Amount (Rs.) Amount (Rs.)March 31, 2007 March 31, 2006

SCHEDULE : 5

INVENTORIES(As certified by the Management)

Raw Material – 673,248


TOTAL 3,704,532 4,813,611

SCHEDULE : 6

SUNDRY DEBTORS

(Unsecured, Considered Good)

Debts Outstanding for a period exceeding six months 517,752 517,752

TOTAL 517,752 517,752

SCHEDULE : 7


Cash in Hand 40,760 41,079

Bank Balance with Scheduled Banks 466,744 538,531

TOTAL 507,504 579,610

SCHEDULE : 8

LOANS & ADVANCES(Unsecured, Considered good)

Advance to Staff 10,039 23,039

Security Deposit 212,500 242,500

Advance Income Tax and TDS 1,220,344 822,673

Duty Drawback Receivable 57,322 57,322

Refundable Sales Tax 137,939 137,939

Advances to Suppliers 710 54,991

Prepaid Expenses 29,578 –

TOTAL 1,668,432 1,338,464

SCHEDULE : 9

CURRENT LIABILITIES

Advances from Customers 415,571 415,571


Other Liabilities 74,625 231,916

TOTAL 1,607,580 1,817,853

SCHEDULE : 10

PROVISION

Provision towards Gratuity and Leave Encashment – 210,404

Provision for Taxation 630,000 510,000

TOTAL 630,000 720,404

SCHEDULE : 11


Exports Sales (FOB) – 4,466,699

Domestic Sales 1,344,982 2,691,248

Duty Drawback – 297,860

TOTAL 1,344,982 7,455,807

Schedules




March 31, 2007 March 31, 2006

SCHEDULE : 12

OTHER INCOME

Interest – 149,859

Rental Income 1,772,148 1,800,000

Foreign Exchange Fluctuation – 412,878

Misc. Income /S.balance w/off 493,898 15,000

TOTAL 2,266,046 2,377,737

SCHEDULE : 13

INCREASE/DECREASE(-) IN STOCKS

Closing Stock


3,704,532 4,140,363

Less : Opening Stock


Goods-in-Transit : Finished Goods – –

: Semi Finished Goods – –

4,813,611 6,434,889

TOTAL (1,109,079) (2,294,526)

SCHEDULE : 14

MATERIAL, MANUFACTURING & OTHERS

Raw Material Consumed : Indigenous – 3,041,810

Raw Material Consumed : Imported – –

Consumables Stores : Indigenous – 36,400

Electricity, Water & Fuel Charges – 36,340

Fabrication and Processing – 101,954

Repair and Maintenance 5,907 21,632

Freight, Cartages and Clearing – 759,798

TOTAL 5,907 3,997,934

SCHEDULE : 15

PERSONNEL, ADMINISTRATION & SELLING

Wages, Salary & Bonus 149,305 194,431

Contribution to Provident Fund 31,543 11,656

Contribution to E.S.I. Fund 548 2,600

Staff Welfare Expenses – 21,617

Freight Outward and Packaging – 15,296

Travelling and Conveyance 30,535 46,278

Printing and Stationery 50 13,520

Consultancy & Professional Charges 25,645 251,141

Vehicle Running & Maintenance 309 1,718

Insurance Charges 33,557 35,832

Payments to Auditors 22,803 54,948

Fees & Subscriptions 8,000 4,330

Miscellanous Expenses – 3,123

TOTAL 302,295 656,490

Schedules


85


SCHEDULE : 16

SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF THE ACCOUNTS



The Financial Statement are prepared on accrual basis under the historical cost convention in accordance with applicable

Accounting Standards issued by The Institute of Chartered Accountants of India and relevant presentational requirements

of the Companies Act, 1956.


Sales are recognized upon the transfer of significant risks and rewards of ownership to the customers. Cost of samples

developed and supplied is recognized on accrual basis net of recoveries.

3. Fixed Assets

Fixed Assets are stated at actual cost of acquisition inclusive of taxes, duties, freight and any directly attributable cost of

bringing the assets to their working condition for intended use.

4. Depreciation

Depreciation on fixed assets is provided on the WDV Method at the rates and in the manner prescribed in Schedule XIV


5. Inventories


b. Semi finished goods are valued at cost upto estimated stage of process.



Transactions in foreign currencies are recorded at the rate prevailing on the date of the transactions. Monetary items are

translated at the exchange rates prevailing at the end of the year and the gain/loss arising on such translation is credited/

charged to the profit and loss account. Exchange differences, relating to fixed assets are adjusted to the carrying cost of

the assets.


The company's contribution to defined contribution schemes such as provident fund and family pension fund are

charged to the profit and loss account as incurred. Provision for liabilities in respect of gratuity & leave encashment

benefit are made on accrual basis and charged to profit and loss account.

8. Taxation

Current Tax

Provision for current tax is computed on the basis of tax payable on estimated taxable income computed in accordance

with the applicable provisions of Income Tax Act 1961, after considering the benefit available under the said Act.

Deferred Tax

In accordance with Accounting Standard -22 Accounting for Taxes on Income, issued by the Institute of Chartered

Accountants of India, the deferred tax for timing differences between the book and tax profits for the year is accounted

for using the tax rates and laws that have been enacted or substantially enacted as of the balance sheet date.

Deferred Tax Assets arising from temporary timing differences are recognized to the extent there is reasonable certainty

that the asset can be realized in future.

9. Borrowing Costs

Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the

cost of such assets. A qualifying assets is one that necessarily takes substantial period of time to get ready for its intended

use. All other borrowing costs are charged to revenue.

Schedules




1. Deferred Tax Liability as at 31st March, 2007 comprises the following: (Amount in Rs.)

Particulars For the year endedMarch 31, 2007

Timing differences Deferred Tax Deferred Taxon account of: Assets Liability

a) Depreciation – 93,241

b) Miscellaneous Expenditure 3,902 –

Net Deferred Tax Liability 89,339

2. In the opinion of the board of directors the current assets, loan and advances have a value on realization in the ordinarycourse of business at least equal to the amount at which they are stated in the Balance Sheet and provision for all knownliabilities have been made.


The basic/diluted earning per share calculated as per Accounting Standard- 20 issued by The Institute of CharteredAccountants of India is as under: (Amount in Rs.)

Particulars For the year EndedMarch 31, 2007

a) Net Profit after tax available for equity shareholders 85,886

b) Weighted average no. of equity shares outstanding during the year 50,000

c) Basic / Diluted earning per share Rs. (a / b ) 1.72


5. The small scale industrial undertakings to whom the Company owes and which is outstanding for more than 30 days asat March 31, 2007 is Habib Tannery (P) Ltd.

The above information regarding small scale industrial undertaking has been determined to the extent such parties havebeen identified on the basis of information available with the Company.

6. Payment to Auditors (including service tax) : (Amount in Rs.)

Particulars For the year EndedMarch 31, 2007

Audit Fee 20,000

Income Tax Matters Nil

Other Matters Nil

Service Tax 2,448

TOTAL 22,448

7. Related Party Disclosure: (Amount in Rs.)

Name of the Party Nature of Relationship Nature of Transaction For the year EndedMarch 31, 2007

Crew B.O.S Products Ltd. Holding Company Rent Received & Receivable 17,72,148

Sales of Raw Material 9,86,132

Advance 2,39,64,620

8. Additional information pursuant to paragraph 3, 4C & 4D of Part II of Schedule VI of the Companies Act, 1956.


Description Current Year Current YearLicensed Capacity Production(Qty. in No.)

Home Furnishing N.A WIP

Others N.A WIP

Schedules


87


B) Raw Material Consumed/Sales. (Amount in Rs.)

Product Unit Consumption/Sales

For the year EndedMarch 31, 2007

Qty. Amount

Leather Sqft. 370 13,025

Fabrics Meter 7,173 3,21,873

Others 6,77,803

Total 10,12,702

C) Composition of Raw Material consumed/Sales (Amount in Rs.)

For the year Ended For the year EndedMarch 31, 2007 March 31, 2006

% Value (Rs.) % Value (Rs.)

Indigenous 98.71% 9,99,677 100% 30,42,010

Imported 1.29% 13,025 0%

Total 100 % 10,12,702 100 % 30,42,010

D) Statement of Sales & Closing Stock of Finished Goods of Manufacturing items (Amount in Rs.)

For the year Ended March 31, 2007

Item Opening Stock Turnover Closing Stock

Unit Qty. Amount Qty. Amount Qty. Amount

Home Furnishing Nos. – – Not Not – –Applicable Applicable

Others Nos. – – Not Not – –Applicable Applicable

Total – – – – – – –

E) Expenditure and Earnings in Foreign Currency

There were no transactions in Foreign Currency during the financial year.

For Anil K. Goyal & Associates For and on behalf of the Board


(Anil K. Goyal) (Umesh Oberoi) (Munish Sharma)

Proprietor Director Director

FCA 71221


Place : Gurgaon

Schedules






State Code 55


II. Capital raised during the year (Amount in Rs. Thousands)

Public Issue NIL

Rights Issue NIL

Bonus Issue NILPrivate Placement NIL


Total Liabilities 25,980

Total Assets 25,980

Source of Funds

Paid-up Capital 500

Reserves & Surplus 857

Secured Loans NIL

Unsecured Loans 24,534

Deferred Tax Liability 89



Investments NIL


Misc. Expenditure NIL



Turnover 2,502

Total Expenditure 2,207

Profit/(Loss) before tax 295

Profit/(Loss) after tax 86

Earning per Share (Basic& Diluted)) in Rs. 1.72

Dividend rate % NIL



420100 Articles of Leather

630400 Other Furnishing Articles






89

CREW MAG EXPORTS LTD.

Directors'

Report

To the Members,

Your Directors have pleasure in presenting their 1st Annual

Report of the Company together with the Audited Accounts and

Auditors' Report thereon for the period ended 31st March 2007.

Operational & Financial Review

Your Company was incorporated under the Companies Act,

1956 on 17th November, 2006 as a Private Limited Company

with the objective of carrying out the business of manufacturing

all kinds of footwear and footwear components made out of

leather and non-leather materials. During the period under

review, your Company became subsidiary of Crew B.O.S

Products Limited (51% holding) and pursuant to Section 3(1)

(IV) ( c ) of the Companies Act, 1956 changed its status from

Private Limited to Public Limited Company w.e.f 13th January,

2007.

The Company has not started any Commercial Production till

31st March, 2007 being the initial period of operations.

Dividend

Since this is the first year of operation of the Company, your

Directors have not recommended any dividend for the financial

year ended 31st March, 2007.

Directors

Mr. Robin Bartholomew, Director retires by rotation and being

eligible offers himself for reappointment.

Mr. Ajit Singh was appointed as an Additional Director of the

Company in the Board Meeting of the Directors held on 2nd

March, 2007. As per Section 260 of the Companies Act, 1956,

the Additional Director holds office upto the date of the

forthcoming Annual General Meeting of the Company and on

being eligible, he has offered himself for re-appointment as

Director of the Company. The notices together with money

deposit have been received under Section 257 of the Companies

Act, 1956, from the members proposing the candidature of Mr.

Ajit Singh as a Director of the Company.

Directors' Responsibility Statement

Pursuant to sub-section (2AA) of Section 217 of the Companies

Act, 1956 it is hereby stated and confirmed that:

1. in the preparation of the Annual Accounts for the financial

year ended 31st March 2007, all applicable Accounting

Standards have been followed along with proper

explanation relating to material departures;

2. the appropriate accounting policies have been selected

and applied 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 as at 31st March

2007 and of the profit of the Company for the period ended

31st March 2007;.

3. the proper and sufficient care has been taken for


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;

4. the annual accounts for the year ended 31st March 2007

have been prepared on a going concern basis.

Auditors

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

Delhi, the Statutory Auditors of the Company will retire at the

conclusion of the ensuing Annual General Meeting and being

eligible, offered them-selves for re-appointment. Further, M/s

Guru Ram & Co. Chartered Accountants, Chennai, shall be

appointed as the Joint Statutory Auditor, at the ensuing Annual

General Meeting to hold office till the conclusion of next Annual

General Meeting. The Company has received the certificates

from the Auditors to the effect that the re-appointment/

appointment, if made, would be in accordance with Section

224(1B) of the Companies Act, 1956. The Board recommends

the aforesaid re-appointment /appointment of the Joint Statutory

Auditors.

The observations of the Auditors’ have been explained wherever

necessary in the appropriate notes to the Accounts and do not

call for any further comments.

Public Deposits

The Company has not invited or accepted any Deposits from

the public during the period under review.

Conservation of Energy, Technology Absorption and Foreign

Exchange Earnings and Outgo under Section 217 (1)(e) of the

Companies Act, 1956, read with Companies (Disclosure of

Particulars in the Report of Board of Directors) Rules, 1988.

1) Conservation of Energy





2) Technology Absorption

The Company is not engaged into any technology

absorption transaction.

90 CREW MAG EXPORTS LTD.

3) Foreign Exchange Earnings and Outgo

There is no information to be provided under the captioned

head as there is no Foreign Exchange Earnings and Outgo

during the period under review. The Company shall take

appropriate initiatives and measures for the same.

Particulars of Employees

The Company has no employee in respect of whom the

statement under section 217(2A) of the Companies Act, 1956 is

required to be annexed.

Acknowledgement

Your Directors take this opportunity to convey their gratitude

and sincere thanks for the unstinted co-operation & assistance,

valuable guidance and the continued support of the Central

Government, State Government, Customers, Bankers, and

Suppliers/Vendors and other business partners.

Your Directors take note of sincere efforts of the dedicated

employees at all levels who have been responsible for the growth

of the Company.


(Tarun Oberoi) (Mohan Goenka)

Director Director

Place : Gurgaon


91


Auditors'

Report

To The Members of

Crew Mag Exports Limited

We have audited the attached Balance Sheet of Crew MAG

Exports Limited, as at 31st March, 2007 and Profit & Loss

Account and Cash Flow Statement for the year ended on that

date annexed thereto. These financial statements are the

responsibility of the Company's Management. Our responsibility

is to express an opinion on these financial statements based on

our audit.

We conducted our audit in accordance with auditing standards

generally accepted in India. Those standards require that we

plan and perform the audit to obtain reasonable assurance about

whether the financial statements are free of material

misstatements. An audit also includes assessing the accounting

principles used and significant estimates made by management,

as well as evaluating the overall financial statement presentation.

We believe that our audit provides a reasonable basis for our

opinion.

1. As required by the Companies (Auditors report) Order, 2003

issued by the Central Government of India in terms of

Section 227(4A) of the Companies Act, 1956, we annex

hereto a statement on the matters specified in paragraph 4

& 5 of the said order.

2. Further to our comments in the annexure referred to in

paragraph 1 above :-

a) We have obtained all the information and

explanations which to the best of our knowledge and

belief were necessary for the purpose of our audit.

b) In our opinion, proper books of account, as required

by Law, have been kept by the Company so far as

appears from our examination of the books.

c) The Balance Sheet, Profit and Loss Account and Cash

Flow Statement dealt with by this report are in

agreement with the books of account.

d) In our opinion, the Balance Sheet, Profit and Loss

Account and Cash Flow Statement dealt with by the

Report comply with the accounting standards referred

to in Sub-Section (3C) of Section 211 of the Companies

Act, 1956.

e) On the basis of written representation received from

the Directors and taken on record by the Board of

Directors, we report that none of the Directors is

disqualified as on 31st March, 2007 from being

appointed as a Director in terms of clause (g)of sub

section (1) of section 274 of the Companies Act, 1956.

(f) In our opinion and to the best of our knowledge and

information and according to the explanations given

to us, the accounts give the information required by

the Companies Act, 1956,in the manner so required

and give a true and fair view :-

(i) In the case of the Balance Sheet, of the state of

affairs of the Company as at March 31st, 2007.

(ii) In the case of the Profit & Loss Account of the

profit for the year ended on that date.

(iii) In the case of the Cash Flow Statement, on the

cash flows for the year ended on that date.

For ANIL K. GOYAL & ASSOCIATES


(ANIL K. GOYAL)

Proprietor

FCA 71221

Place : Gurgaon



1) a) The Company has generally maintained proper

records showing full particulars including quantitative

details and situation of Fixed Assets.



discrepancies are reported to have been observed on

such verification as compared to book records.

c) The Company has not disposed off a substantial part

of fixed assets during the year and therefore paragraph

4(i) (c) of the Companies (Auditor's Report) Order,

2003 (hereinafter referred to as the Order) is not

applicable.

2) a) The Inventory has been physically verified by the

Management during the year. In our opinion the

frequency of verification is reasonable.

b) In our opinion, the procedures of physical verification

of inventory followed by the Management are

reasonable and adequate in relation to the size of the

Company and the nature of its business.


records, in our opinion, the Company is maintaining

proper records of inventory. The discrepancies noticed

on physical verification of inventory as compared to

book records were not material.

3) The Company has taken interest free unsecured loan

amounting to Rs. 436.14 lacs from its parent companies.

The terms and conditions thereof are not prima facie

prejudicial to the interest of the Company. The Company

has not granted any loans secured or unsecured, to

companies, firms or other parties covered in the register

maintained under section 301 of the Act and therefore

paragraph 4(iii) of the order is not applicable.


explanations given to us, there are adequate internal control

procedure commensurate with the size of the Company

and the nature of its business for the purchase of stores &

spare parts, fixed assets , and with regard to sale of products

and there are no major internal control weaknesses in

regard thereto.

5) The transactions that need to be entered into a register in

pursuance of section 301 of the Companies Act, 1956 have

been entered. According to the information and

explanations given to us, purchase of goods and sale of

goods and services aggregating during the year to

Rs.5,00,000/- or more in respect of a party in pursuance of

contracts or arrangements entered into the register

maintained under section 301 of the Companies Act, 1956

have been made at prices which are reasonable having

regard to prevailing market prices at the relevant time for

such goods.


explanations given to us, as the Company has not accepted

deposits from the public, paragraph 4(vi) of the Order is

not applicable.


that is commensurate with the size and nature of its

business.



209(1)(d) of the Companies Act, 1956 in respect of activities

of the Company and therefore paragraph 4(viii) of the Order

is not applicable.


explanations given to us, the Company is generally regular

in depositing undisputed statutory dues including Provident

Fund, Employees' State Insurance, Income Tax, Wealth Tax,

Service Tax, Sales Tax, Custom Duty, Excise Duty, Cess,

and other statutory dues, as applicable to its activities, with

appropriate authorities. There are no arrears of outstanding

statutory dues as at 31st March, 2007 for a period of more


explained to us, there are no disputed dues of Sales Tax,

Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise

Duty and Cess that have not been deposited on account of

any dispute and therefore paragraph 4(ix)(b) of the Order

is not applicable.

10) The Company has no accumulated losses as at the end of

the financial year and the Company has not incurred cash

losses in the current financial year as well as in the

immediately preceding financial year.

11) The Company has not taken any loan from bank/financial

institution and therefore paragraph 4(xi) of the Order is

not applicable.

Annexures Referred to in Para 1 of the Auditor's Report to the Members of Crew

Mag Exports Limited Accounts for the Year Ended March 31st, 2007

93


12) The Company has not granted any loans or advances on

the basis of security by way of pledge of shares, debentures

and other securities and therefore paragraph 4(xii)of the


13) The provisions of any special statute applicable to chit fund

and nidhi/mutual benefit fund/society are not applicable

to the Company and therefore paragraph 4(xiii) of the Order

is not applicable.

14) The Company is not dealing or trading in shares, securities,

debentures and other investments and therefore paragraph

4(xiv) of the Order is not applicable.


us, the Company has not given any guarantee for loans

taken by others from bank or financial institutions and

therefore paragraph 4(xv) of the Order is not applicable.

16) The Company has not availed any term loans from the

bank during the year and therefore paragraph 4(xvii) of




given to us, the Company has not used funds raised on

short term basis for long term investments and vice versa.


us, the Company has not made any preferential allotment

of shares during the year to parties and companies covered

in the Register maintained under section 301 of the

Companies Act, 1956 and therefore paragraph 4(xviii) of


19) The Company has not issued any debentures during the


applicable.

20) The Company has not raised any money by way of public

issue during the year and therefore paragraph 4(xx) of the


21) During the course of our examination of the books and

records of the Company, carried out in accordance with

the auditing standards generally accepted in India, we have


Company, noticed or reported during year nor we have

been informed of such case by the Management.

For ANIL K. GOYAL & ASSOCIATES


(ANIL K. GOYAL)

Proprietor

FCA 71221

Place : Gurgaon



Schedule Amount (Rs.)March 31, 2007

SOURCES OF FUNDS

SHAREHOLDERS FUNDS

Share Capital(including share application money of Rs. 75,00,000) 1 8,000,000

Reserves & Surplus –

LOAN FUNDS

Secured Loans –

Unsecured Loans 2 44,655,557

DEFERRED TAX LIABILITY –

TOTAL 52,655,557


FIXED ASSETS 3

Gross Block 4,224,000

Net Block 4,224,000

CURRENT ASSETS, LOANS & ADVANCES

Inventories –

Sundry Debtors –

Cash & Bank Balances 4 441,246

Loans & Advances 5 8,950,000

9,391,246

LESS : CURRENT LIABILITIES & PROVISIONS

Current Liabilities 6 311,398

Provisions –

311,398

NET CURRENT ASSETS 9,079,848

TOTAL ASSETS 13,303,848

MISCELLANEOUS EXPENDITURE

Pre - operative Expenses 7 39,351,709

Profit & Loss Account –

TOTAL 39,351,709

TOTAL 52,655,557

Significant Accounting Policies and Notes formingpart of the Accounts 8

The Schedules referred to above form an integralpart of the Balance Sheet.



(Anil K. Goyal) (Tarun Oberoi) (Mohan Goenka)Proprietor Director DirectorFCA 71221


Balance Sheet

95





Cash Flow Statement

For The Period Ended 31st March, 2007

Amount (Rs.)31-Mar-2007


Net (loss)/profit before tax but after exceptional/extraordinary items –

Adjustments for:

Any other non cash Item –

Operating profit before working capital changes –

Adjustments for changes in working capital :

– (INCREASE)/DECREASE in Other Receivables (8,950,000)

– (INCREASE)/DECREASE in Inventories –

– INCREASE/(DECREASE) in Trade and Other Payables 311,398

Cash generated from operations (8,638,602)

Net cash from operating activities (8,638,602)


Purchase of fixed assets (4,224,000)

Pre - Operative Expenses (39,351,709)

Net cash used in investing activities (43,575,709)


Proceeds from fresh issue of Share Capital (including Share Premium ) 8,000,000

Proceeds from long term borrowings 44,655,557

Net cash used in financing activities 52,655,557

Net Increase/(Decrease) in Cash & Cash Equivalents 441,246

Cash and cash equivalents as at 17.11.06 –

Cash and cash equivalents as at 31.03.2007 441,246

Cash and cash equivalents comprise

Cash, Cheques & Drafts (in hand) and Remittances in Transit 106,000

Balance with Banks 335,246

Cash and cash equivalents as at 31.03.2007 441,246

Notes :

1. The above Cash flow statement has been prepared under the indirect method setout in AS-3 issued by the Instituteof Chartered Accountants of India.



Schedules


Amount (Rs.)

March 31, 2007

SCHEDULE : 1

SHARE CAPITAL


70,00,000 Equity Shares of Rs. 10/- each 70,000,000

TOTAL 70,000,000


50,000 Equity Shares of Rs. 10/- each fully paid up. 500,000

Share Application Money 7,500,000

TOTAL 8,000,000

SCHEDULE : 2

RESERVES & SURPLUS

Crew BOS Product Ltd 22,113,622

Leather Crafts (India) P. Ltd 22,541,935

TOTAL 44,655,557

97


SC

HED

ULE : 3

FIX

ED

ASSETS

Am

ount

(Rs.

)

PA

RTIC

ULA

RS

GR

OSS B

LO

CK

DEPR

EC

IATIO

NN

ET B

LO

CK

AD

DIT

ION

SD

EPR

EC

IATIO

ND

EPR

EC

IATIO

N

RA

TE O

FA

S O

ND

UR

ING

SA

LES/

AS O

NA

S O

NFO

R T

HE

ON

SA

LES /

AS O

NA

S O

N

DEPR

.01/0

4/2

006

TH

E Y

EA

RA

DJU

STM

EN

T31/0

3/2

007

01/0

4/0

6Y

EA

RA

DJU

STM

EN

T31/0

3/2

007

31/0

3/2

007

FAC

TO

RY

BU

ILD

ING

3.3

4%

3,1

32

,00

0–

3,1

32

,00

0–

– 3

,13

2,0

00

CO

MP

UT

ER

16

.21

% 6

04

,00

0–

60

4,0

00

––

60

4,0

00

ELEC

TR

ICA

L F

ITT

ING

S6

.33

% 3

2,0

00

– 3

2,0

00

––

32

,00

0

VEH

ICLES-

MO

TO

R C

AR

9.5

0%

39

6,0

00

– 3

96

,00

0–

– 3

96

,00

0

OFFIC

E E

QU

IPM

EN

TS -

Ph

on

es

16

.21

% 6

0,0

00

– 6

0,0

00

––

60

,00

0

TO

TAL

– 4

,22

4,0

00

– 4

,22

4,0

00

––

––

4,2

24

,00

0

PR

EV

IOU

S Y

EA

R–

––

––

––

––

Sche

dule

s form

ing

pa

rt o

f th

e F

ina

nci

al S

tate

ments


Amount (Rs.)March 31, 2007

SCHEDULE : 4


Cash in Hand 106,000

Bank Balance with Citi Bank 335,246

TOTAL 441,246

SCHEDULE : 5

LOANS & ADVANCES(Unsecured, Considered good)

Rent Deposit 1,200,000

Advance Against Land 7,500,000

Rent Advance 250,000

TOTAL 8,950,000

SCHEDULE : 6

CURRENT LIABILITIES

Sundry Creditors 2,800

Other Liabilities 308,598

TOTAL 311,398

SCHEDULE : 7

Pre-operative Expenses

Auditor's Remuneration 33,672

Board Meeting 11,504

Business Promotion 43,000

Communication 156,333

Consultancy 2,820,996

Electricity, Power & Fuel 335,000

Foreign Travelling 1,369,179

Guest House 68,749

Trial & Machine Setup Charges 14,330,290

Printing & Stationary 2,100

Preliminary Expenses 27,600

Rent 3,811,871

Repair & Maintenance 197,000

Salary 8,429,241

Sample Development Charges 5,564,902

Telephone Expenses 83,000

Travelling & Conveyance 51,000

Trial Run 2,016,273

TOTAL 39,351,709

Schedules


99


SCHEDULE : 8

SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF THE ACCOUNTS



The Financial Statement are prepared on accrual basis under the historical cost convention in accordance with applicable

Accounting Standards issued by The Institute of Chartered Accountants of India and relevant presentational requirements


The Company has not started commercial production henceforth the expenses incurred by the company are appropriately

recorded as Pre - operative expenses.


Sales are recognized upon the transfer of significant risks and rewards of ownership to the customers. Cost of samples

developed and supplied is recognized on accrual basis net of recoveries. However the company has not started commercial

production .Sample development and delivery costs with recoveries are booked at net.

3. Fixed Assets

Fixed Assets are stated at actual cost of acquisition inclusive of taxes, duties, freight and any directly attributable cost of

bringing the assets to their working condition for intended use.

4. Depreciation

Depreciation on fixed assets is provided on the SLM Method at the rates and in the manner prescribed in Schedule XIV of

the Companies Act, 1956. Since the company has not started commercial production the same are recorded as pre-

operative expenses.

5. Inventories


b. Semi finished goods are valued at cost up to estimated stage of process.


However the company has not started commercial production and no inventory was lying with it.


Transactions in foreign currencies are recorded at the rate prevailing on the date of the transactions. Monetary items are

translated at the exchange rates prevailing at the end of the year and the gain/loss arising on such translation is credited /

charged to the profit and loss account. Exchange differences, relating to fixed assets are adjusted to the carrying cost of the

assets.

In case of Forward Exchange Contract, the cost of contract is amortized over the period of contract. Any profit or loss

arising on the cancellation or renewal of a forward exchange contract is recognized as income or expense for the year,

except in case of forward exchange contract relating to liabilities incurred for acquiring fixed assets from outside India, in

which case, such profit or loss is adjusted in the cost of fixed assets.


The company's contribution to defined contribution schemes such as provident fund and family pension fund are debited

to pre-operative expenses. Provision for liabilities in respect of gratuity & leave encashment benefit are made on accrual

basis and debited to pre-operative expenses.

8. Taxation

Current Tax

Provision for current tax is computed on the basis of tax payable on estimated taxable income and fringe benefit computed

in accordance with the applicable provisions of Income Tax Act 1961, after considering the benefit available under the

said Act.

Schedules



Deferred Tax

In accordance with Accounting Standard -22 "Accounting for Taxes on Income", issued by the Institute of Chartered

Accountants of India, the deferred tax for timing differences between the book and tax profits for the year is accounted for

using the tax rates and laws that have been enacted or substantially enacted as of the balance sheet date.

Deferred Tax Assets arising from temporary timing differences are recognized to the extent there is reasonable certainty

that the asset can be realized in future.

B. NOTES TO THE ACCOUNTS.

1. The Company was incorporated on November 17, 2006, as per Certificate of Incorporation issued by the Registrar of

Companies Delhi & Haryana, in the name & style M/s Crew MAG Exports Limited under Chapter IX of the Companies Act

1956. All the assets of the company has been provided by Crew B.O.S. Products Ltd and Leather Crafts (India) Pvt. Ltd.

The Expenses incurred by Leather Craft (India) Pvt. Ltd. & Crew B.O.S Products Ltd. on behalf of the company has been

accounted for by the company. No TDS has been deducted by the company as on these expenses as both Leather Craft

(India) Pvt. Ltd. and Crew B.O.S Products Ltd. has already deducted & deposited TDS there on. As per Legal opinion

obtain by the company no TDS is applicable on such expenses.

2. In the opinion of the Board of Directors the current assets, loan and advances have a value on realization in the ordinary

course of business at least equal to the amount at which they are stated in the Balance Sheet and provision for all known

liabilities have been made.

3. The Company has not started any commercial operation during the year therefore all the expenses including trial run &

Machinery set up has been considered as pre-operative and shall be capitalized upon start of commercial operation.

In view of the absence of Commercial Production, no Profit & Loss Account has been prepared.


There is no small scale undertaking to whom company owes and which is outstanding for more than 30 days as at March

31, 2007.

5. Payment to Auditors (including service tax) : (Amount in Rs.)

Particulars For the year endedMarch 31, 2007

Audit Fee 30,000.00

Income Tax Matters Nil

Other Matters Nil

Service Tax 3,672.00

TOTAL 33,672.00

6. Related Party Disclosure: (Amount in Lakhs)

Name of the Party Nature of Relationship Nature of Transaction For the year EndedMarch 31, 2007

Crew B.O.S Products Ltd. Holding Company Capital Contribution 2.55

Reimbursement of Expenses 212.87

Interest payment 6.48

Share application Money 75.00

Leather Craft (India) Pvt. Ltd. Associated Company Pre-operatives Exp. 163.42

Rent Deposit 12.00

Fixed Assets 42.24

Advance Rent 2.50

7. Additional information pursuant to paragraph 3, 4C & 4D of Part II of Schedule VI of the Companies Act, 1956.

The company is under the process of setting up plant & machinery henceforth the below mentioned paragraphs are notapplicable.

Schedules


101



Description Current Year Current YearLicensed Capacity Production(Qty. in No.)

Home Furnishing N.A. N.A.

Others N.A. N.A.

B) Raw Material Consumed

Product Unit Consumption

For the year EndedMarch 31, 2007

Qty. Amount

Leather Sqft. N.A. N.A.

Fabrics Meter N.A. N.A.

Others N.A. N.A.

C) Composition of Raw Material consumed

% Value (Rs.)

Indigenous N.A. N.A.

Imported N.A. N.A.

Total N.A. N.A.

D) Statement of Sales & Closing Stock of Finished Goods of Manufacturing items

For the year Ended March 31, 2007

Item Opening Stock Turnover Closing Stock

Unit Qty. Amount Qty. Amount Qty. Amount

Home Furnishing Nos. – – – – – –

Others Nos. – – – – – –

Total – – – – – – –

E). Expenditure in Foreign Currency

Expenditure For the year Ended March 31, 2007

Raw-Material –

F). Earning in Foreign Currency

Earnings For the year Ended March 31, 2007

Export Sales (FOB) –

8. This is the first financial year of the company therefore corresponding amount for immediately preceding financial yearhas not been given.

Schedules









State Code 55


II. *Capital raised during the year (Amount in Rs. Thousands)

Public Issue NIL

Rights Issue NIL

Bonus Issue NILPrivate Placement NIL


Total Liabilities 52,655

Total Assets 52,655

Source of Funds

Paid-up Capital 500

Share Application Money 7,500

Reserves & Surplus NIL

Secured Loans NIL

Unsecured Loans 44,655

Deferred Tax Liability NIL



Investments NIL


Misc. Expenditure 39,352



Turnover NIL

Total Expenditure NIL

Profit/(Loss) before tax NIL

Profit/(Loss) after tax NIL

Earning per Share (Basic& Diluted)) in Rs. NIL

Dividend rate % NIL



640320 Footwear

* The Company had issued 40,000 Equity Shares @ Rs. 10/- each to increase the paid up capital to Rupees 5 lacs pursuant tochange in status of the Company from "Private" to Public in terms of Section 3 (1)(iv) of the Companies Act, 1956.






103

CREW B.O.S. FAR EAST LIMITED, HONK-KONG

Directors'

Report

The directors have pleasure in submitting their report and the

audited financial statements for the year ended 31 December

2006.

PRINCIPAL ACTIVITY

The company was engaged in trading of leather watch-strap.

RESULTS AND APPROPRIATIONS

The results of the company for the year ended 31 December

2006 and the state of its affairs at that date are set out in the

financial statements on pages 105 to 108.

The Directors do not recommend the payment of dividend for

the year ended 31 December 2006.

PROPERTY, PLANT AND EQUIPMENT

Details of movements in the property, plant and equipment of

the company during the year are set out in note 6 to the financial

statements.

DIRECTORS

The Directors held office during the year and up to the report

date were as follows:-

BARTHOLOMEW, Robin

OBEROI, Tarun

NIKORE, Puneet (Resigned on 9 October 2006)

In accordance with Article 7 of the Company's Articles of

Association, all directors retire and, being eligible, offer

themselves for re-election.

Directors’ interest in contracts

Except as mentioned in note 11 of the financial statements, no

contracts of significance to which the Company was a party

and in which a director had a material interest, subsisted at the

end of the year or at any time during the year.

At no time during the year was the company a party to any

arrangements to enable the directors of the company to acquire

benefits by means of the acquisition of shares in, or debenture

of the company or any other body corporate.

AUDITORS

The financial statements have been audited by Messrs. Chan &

Man, Certified Public Accountants (Practising), who retire and,

being eligible, offer themselves for re-appointment.


Dated : 22nd May, 2007 (Tarun Oberoi)

Place : Gurgaon, India Chairman

104 CREW B.O.S. FAR EAST LIMITED, HONK-KONG

We have audited the financial statements of Crew B.O.S. Far

East Limited (the "company") set out on pages 105 to 106, which

comprise the company balance sheets as at 31 December 2006,

and the income statement, the statement of changes in equity

and the cash flow statement for the period then ended, and a

summary of significant accounting policies and other

explanatory notes.

Directors' responsibility for the financial statements

The directors of the company are responsible for the preparation

and the true and fair presentation of these financial statements

in accordance with Hong Kong Financial Reporting Standards

issued by the Hong Kong Institute of Certified Public Accountants

and the Hong Kong Companies Ordinance. This responsibility

includes designing, implementing and maintaining internal

control relevant to the preparation and the true and fair

presentation of financial statements that are free from material

misstatement, whether due to fraud or error; selecting and

applying appropriate accounting policies; and making

accounting estimates that are reasonable in the circumstances.

Auditors' responsibility

Our responsibility is to express an opinion on these financial

statements based on our audit. We conducted our audit in

accordance with Hong Kong Standards on Auditing issued by

the Hong Kong Institute of Certified Public Accountants. Those

standards require that we comply with ethical requirements and

plan and perform the audit to obtain reasonable assurance as to

whether the financial statements are free from material

misstatement.

Auditor's

Report

An audit involves performing procedures to obtain audit

evidence about the amounts and disclosures in the financial

statements. The procedures selected depend on the auditor's

judgment, including the assessment of the risks of material

misstatement of the financial statements, whether due to fraud

or error. In making those risk assessments, the auditor considers

internal control relevant to the entity's preparation and true and

fair presentation of the financial statements in order to design

audit procedures that are appropriate in the circumstances, but

not for the purpose of expressing an opinion on the effectiveness

of the entity's internal control. An audit also includes evaluating

the appropriateness of accounting policies used and the

reasonableness of accounting estimates made by the directors,

as well as evaluating the overall presentation of the financial

statements.

We believe that the audit evidence we have obtained is sufficient

and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements give a true and fair view

of the state of the company's affairs as at 31 December 2006

and of its profit and cash flows for the year then ended in

accordance with Hong Kong Financial Reporting Standards and

have been properly prepared in accordance with the Hong Kong

Companies Ordinance.

Certified Public Accountants

Dated: 22nd May, 2007 (Practising)

Place: Hong Kong Chan & Man

105


Income Statement

NOTE 01.01.2006 10.01.2005Particulars to 31.12.2006 to 31.12.2005

HK$ HK$

TURNOVER 2 3,959,871 3,972,298

COST OF SALES (3,075,875) (3,597,393)

GROSS PROFIT 883,996 374,905

OTHER REVENUE 29,866 –

ADMINISTRATIVE AND OPERATING EXPENSES (881,074) (353,330)

PROFIT FROM OPERATION 32,788 21,575

FINANCE COST 3 (2,823) (2,226)

PROFIT BEFORE TAXATION 4 29,965 19,349

TAXATION 5 (5,244) (6,626)

PROFIT FOR THE YEAR/PERIOD, ACCUMULATED 24,721 12,723

Balance Sheet as at 31 December, 2006Particulars NOTE 2006 2005

HK$ HK$

NON-CURRENT ASSETS

Properties, plant and equipment 6 13,719 2,400

CURRENT ASSETS

Stocks 7 875,945 683,340

Deposit paid 4,570 7,500

Trade receivables 534,455 1,659,122

Prepayment 1,000 –

Cash at bank 231,198 578,697

Tax prepaid 3,145 –

1,650,313 2,928,659

CURRENT LIABILITIES

Amounts due to the holding company 797,242 779,044

Trade payables 343,154 1,302,473

Accrued charges 476,175 822,443

Provision for taxation – 6,374

(1,616,571) (2,910,334)

NET CURRENT ASSETS 33,742 18,325

NON-CURRENT LIABILITIES

Deferred tax 8 (2,267) (252)

NET ASSETS 45,194 20,473

CAPITAL AND RESERVES

SHARE CAPITAL 9 7,750 7,750

ACCUMULATED PROFITS 37,444 12,723

SHAREHOLDERS' FUND 45,194 20,473

Approved by the Board of Directors on 22nd May 2007

(Tarun Oberoi) (Robin Bartholomew)Director Director

For the year ended 31 December, 2006(Expressed in HK$)


Cash Flow Statement

for the year ended 31 December, 2006

01.01.2006 10.01.2005Particulars to 31.12.2006 to 31.12.2005

HK$ HK$

OPERATING ACTIVITIES

Profit from operations 29,965 19,349

Adjustments for:

Depreciation 6,559 600

Operating cash flows before movements in working capital 36,524 19,949

Changes in stocks (192,605) (683,340)

Changes in deposit paid 2,930 (7,500)

Changes in trade receivables 1,124,667 (1,659,122)

Changes in prepayment (1,000) –

Changes in amount due to the holding company 18,198 779,044

Changes in trade payables (959,319) 1,302,473

Changes in and accrued charges (346,268) 822,443

Cash (used in)/from operations (316,873) 573,947

Profits tax paid (12,748) –

Net cash (used in)/from operating activities (329,621) 573,947

INVESTING ACTIVITIES

Purchases of fixed assets (17,878) (3,000)

FINANCING

Issue of ordinary shares – 7,750

NET INCREASE IN CASH AND CASH EQUIVALENTS (347,499) 578,697

CASH AND CASH EQUIVALENTS BROUGHT FORWARD 578,697 –

CASH AND CASH EQUIVALENTS CARRIED FORWARD 231,198 578,697

CASH AND CASH EQUIVALENTS AT END OF PERIOD

Cash at banks 231,198 578,697

Statement of changes in Equity

for the year ended 31 December, 2006Particulars Share Accumulated

Capital profits Total

HK$ HK$ HK$

Net profit for the period – 12,723 12,723

Issue of ordinary share 7,750 – 7,750

Balance at 31 December 2005 7,750 12,723 20,473

Net profit for the year – 24,721 24,721

Balance at 31 December 2006 7,750 37,444 45,194

107


1. PRINCIPAL ACCOUNTING POLICIES

(a) Basis of preparation

The significant accounting policies that have been usedin the preparation of these financial statements aresummarised below.

The financial statements have been prepared on thehistorical cost basis except for the revaluation of certainproperties and certain financial assets and liabilities.The measurement bases are fully described in theaccounting policies below.

It should be noted that accounting estimates andassumptions are used in preparation of the financialstatements. Although these estimates are based onmanagement's best knowledge of current events andactions, actual results may ultimately differ from thoseestimates.

(b) Revenue recognition

Sales of goods are recognised upon transfer of risk tothe customer and collectibility of the relatedreceivables is reasonably assured.

(c) Property, plant and equipment

Property, plant and equipment are stated at cost lessaccumulated depreciation. The cost of an assetcomprises its purchase price and any directlyattributable costs of bringing the assets to its workingcondition and location for its intended use.Expenditure incurred after the fixed assets have beenput into operation, such as repairs and maintenance,is normally charged to the profit and loss account inthe year in which it is incurred. In situations where itcan be clearly demonstrated that the expenditure hasresulted in an increase in the future economic benefitsexpected to be obtained from the use of the machinery,equipment and motor vehicle, the expenditure iscapitalised as an additional cost thereof.

Depreciation is calculated on the straight-line basis towrite off the cost of each asset over its estimated usefullife. The principal annual rates used for this purposeare as follows:

Office equipment 20%

Computer equipment 33.33%

(d) Foreign currencies

Foreign currency transactions are recorded at theapplicable rates of exchange ruling at the transactiondates. Monetary assets and liabilities denominated inforeign currencies at the balance sheet date aretranslated at the applicable rates of exchange ruling atthat date. Exchange differences are dealt with in theprofit and loss account.

(e) Impairment

At each balance sheet date, the company reviews thecarrying amounts of its tangible and intangible assetsto determine whether there is an indication that thoseassets have suffered any impairment loss. If the

Notes to the Financial Statements


recoverable amount of an assets is estimated to be lessthan its carrying amount, the carrying amount of theasset is reduced to its recoverable amount. Impairmentlosses are recognised as an expense immediately,unless the relevant asset is carried at a revalued amountunder another accounting standard, in which case theimpairment loss is treated as a revaluation decreaseunder that accounting standard.

(f) Stocks

Stocks are valued on the first-in, first-out basis, at thelower of cost and net realisable value, after makingdue allowance for any obsolete or slow-moving items.In the case of finished goods and work in progress,cost includes direct materials, direct labour and anappropriate proportion of manufacturing overheads.Net realisable value is determined by reference toestimated selling prices less all further costs tocompletion and costs to be incurred in selling anddistribution.

(g) Deferred taxation

Pursuant to the HKAS 12, deferred taxation is providedin full, using the liability method, for all temporarydifferences arising between the tax bases of assets andliabilities and their carrying values in the accounts.Deferred tax liabilities are provided in full on all taxabletemporary differences while deferred tax assets arerecognised to the extent that it is probable that futuretaxable profits will be available against which thedeductible temporary difference can be utilised.

(h) Cash equivalents

Cash equivalents represent short term highly liquidinvestments which are readily convertible into knownamounts of cash and which are within three months ofmaturity when acquired, less advances from banksrepayable within three months from the date of theadvance.

2. TURNOVERAn analysis of the Company’s revenue is as follows:

01.01.2006 10.01.2005to 31.12.2006 to 31.12.2005

HK$ HK$

Sales of goods 3,959,871 3,972,298

3. FINANCE COST

Bank charge 2,823 2,226

4. PROFIT BEFORE TAXATION

Profit before taxation is arrived at after charging/Crediting:

Auditors' remuneration 15,618 15,540

Consultancy fee 284,182 133,076

Depreciation 6,559 600

Finance cost (Note 3) 2,823 2,226

Exchange gain (4,555) –

Sundry income (25,311) –


5. TAXATION

Hong Kong profits tax has been provided at the rate of17.5% (2005: 17.5%) on the estimated assessable profitsarising in or derived from Hong Kong during the year.Overseas tax is provided in accordance with the legislationand tax rates prevailing in the respective overseas countries.

01.01.2006 10.01.2005to 31.12.2006 to 31.12.2005

HK$ HK$

Hong Kong profits tax 3,229 6,374

Deferred tax (note 8) 2,015 252

5,244 6,626

Reconciliation between the company's actual tax chargeand accounting profit at applicable tax rates:

Profit before tax 29,965 19,349

17.5% tax thereonprofit before tax 5,243 3,386

Tax effect of non-deductibleexpenses – 3,240

Other temporary differences (2,014) (252)

Actual tax expense 3,229 6,374

6. PROPERTIES, PLANT AND EQUIPMENT

Office Computerequipment equipment Total

HK$ HK$ HK$

Cost

As at 01.01.2006 3,000 – 3,000

Addition – 17,878 17,878

As at 31.12.2006 3,000 17,878 20,878

Accumulated depreciation

As at 01.01.2006 600 – 600

Charge for the year 600 5,959 6,559

As at 31.12.2006 1,200 5,959 7,159

Net book value

As at 31.12.2006 1,800 11,919 13,719

As at 31.12.2005 2,400 – 2,400

7. STOCKS

2006 2005

HK$ HK$

Raw materials 467,160 231,387

Work in progress 130,599 –

Finished goods 278,186 451,953

875,945 683,340

8. DEFERRED TAX

The deferred tax assets and liabilities are offset when thereis a legally enforceable right to set off and when the deferredincome taxes relate to the same fiscal authority. Thefollowing amounts determined after appropriate offsetting,are shown in the balance sheet:-

2006 2005

HK$ HK$

Deferred tax liabilities 2,267 252

Deferred tax assets – –

2,267 252

Movements in net deferred liabilities/(assets) are as follows:-

Balance brought forward 252 –

Transfer to income statement 2,015 252

Balance carried forward 2,267 252

Analysis of net deferred taxliabilities/(assets):-

Accelerated depreciationallowance 2,267 252

11.SHARE CAPITAL2006 2005

HK$ HK$

Authorised, issuedand fully paid:

1,000 Ordinary shares ofUSD1.00 each 7,750 7,750

12.DIRECTORS’ REMUNERATION

No remuneration was paid or payable to the directors whichneed to be disclosed pursuant to Section 161 of theCompanies Ordinance.

13.RELATED PARTY TRANSACTIONS

During the year, the company undertook the followingtransactions with related party in the normal course of itsbusiness:-

01.01.2006 10.01.2005to 31.12.2006 to 31.12.2005

HK$ HK$

Sale to the holding company 131,247 –Purchase from theholding company 1,087,717 1,394,100

Consultancy fee paidto holding company 282,182 133,076

14.HOLDING COMPANYThe directors consider the holding company to be CrewB.O.S. Products Limited, incorporated in India.

Notes to the Financial Statements


109

La Tatva S.r.l., Italy

Balance Sheet as at31 December, 2006

(Expressed in EURO)

Assets 31/12/2006 31/12/2005

Fixed assets

Intangible assets 8.225 8.225

8.225 8.225

Total fixed assets 8.225 8.225

Current assets

Accounts receivable

– falling due within one year 1.136 1.135

Liquid assets 3.079 7.485

Total current assets 4.215 8.620

Total assets 12.440 16.845

Liabilities

Shareholders' equity

I. Share capital 10.000 10.000

II. Other reserves 10 5.001

III. Retained earnings (loss ) carry forwards (2.270) (2.270)

IV. Profit (loss) for the year (5.605) (4.991)

Total shareholders' equity 2.135 7.740

Accounts Payables

– falling due within one year 10.305 9.105

10.305 9.105

Total shareholders' equity and liabilities 12.440 16.845

31/12/2006 31/12/2005

Revenues

Sales – –

Other Income 1 1

Total revenues 1 1

Expenses

Services 3.865 3.441

Miscellaneous running costs 1.391 1.220

Other extraordinary costs 24 5

Total expenses 5.280 4.666

Difference between revenues and expenses (5.279) (4.665)

Taxes on the income for the year, correnti, differite e anticipate

– Current taxes 326 326

326 326

Profit (loss) of the year (5.605) (4.991)

The Chairman of the Board of DirectorsTarun Oberoi

Profit and loss account for the period ended 31 December, 2006

110 La Tatva S.r.l., Italy

No depreciation has been calculated for these assets, becauseno revenue was made.

Receivables

They are entered at nominal value.

Payables

They are entered at nominal value.

Income tax

The provision for taxes has been set aside on an accruals' basisand includes accruals in respect of the taxes paid or to be paidfor the business year, determined in accordance with currentrules for non operating companies, on the basis of minimumincome determined on a lump sum basis according to art. 3,par. 37 of Law 662/96.

Furthermore we wish to point out that deferred tax assetsderiving from tax losses that can be carried forward have notbeen recorded for prudence.

Assets

A. Fixed assets

i. Intangible assets

Balance as at Balance as at Difference31/12/2006 31/12/2005

8.225 8.225 –

Development of intangible assets

Cost Value as Increase Decrease Depreciation Valuedescription 31/12/2005 of the of the of the 31/12/2006

year year year

Start-up 8.225 – – – 8.225andexpansion

8.225 – – – 8.225

The item is completely made up of charges regarding thesetting-up of the company.

No depreciation has been calculated on such charges, asexplained in another part of these Notes.

B. Current assets

ii. Receivables


1.135 1.135 1

The balance according to the expiry dates is a follows:

Description Within Beyond Beyond Total12 months 12 months 5 years

From parentcompany 1.135 – – 1.135

Per crediti tributari 1 – – 1

1.136 – – 1.136

Introduction

The company carries out activity of manufacture and sale onlyabroad of leather goods and by-products.

The Financial Statements as at December 31, 2006, of whichthe present Notes represent an integral part according to art.2423 of the Italian Civil Code, show a loss of Euro 5.605.

The loss pust the company in the position provided for by thearticle 2482-ter of the Civil Code.

Criteria for drawing up

These financial statements have been drawn up in anabbreviated form, as the requirements of article 2435 bis, sub-paragraph 1 of the Italian Civil Code are fulfilled; therefore theAnnual Management Report has not been drawn up.

In order to complete the necessary information we wish topoint out that according to article 2428, section 3) and 4) ofthe Italian Civil Code, the company does not own, neitherthrough a trust company nor a third party, shares of controllingcompanies, and that the company has not purchased or sold,neither through a trust company nor a third party, shares ofcontrolling companies during the business year.

Valuation criteria

The criteria used for drawing up the financial statements endedDecember 31, 2006 have been applied consistently with theprior year, in particular as regards valuation made andcontinuity of the same principles.

The valuation of the items of the financial statements has beenmade on a prudent and accrual basis.

Due to the application of the principle of prudence the elementsof the single items of assets or liabilities have been valuedindividually, in order to avoid compensation between lossesthat should have been acknowledged and income that shouldnot be acknowledged as it has not been realised.

In compliance with the principle of accounting on an accrualbasis, the effects of transactions and other events have beenrecorded in the accounts and attributed to the period saidtransactions and events refer to, and not to the one the relatingmovements are actually performed (collections and payments).

Continuity in the application of methods of allocation over aperiod of time in fact represents a necessary element for thepurposes of the comparability of a company's FinancialStatements over different financial periods.

Exceptions

There have been no exceptional cases that would have requiredexceptions according to art. 2423 of the Italian Civil Code fromthe provisions of law concerning Financial Statements.

In particular, the following criteria have been applied:

Fixed assets

Intangible assets

They are recorded at their purchase value.

Supplementary Notesto the Financial Statements as at December 31, 2006

111

La Tatva S.r.l., Italy

Changes occurred in the shareholder equity are set out in thetable below:

Share Legal Other Profit Result Totalcapital reserve reserves (loss) of the

carried yearforward

At the closingof the prioryear 10.000 – 5.001 (2.270) (4.991) 7.740

Appropriationof the resultof the year 4.991 4.991

– dividend payment –

– other appropriations –

Other changes (4.991) (4.991)

Result of current year (5.605) (5.605)

At the closingof the currentyear 10.000 – 10 (2.270) (5.605) 2.135

The share capital is composed as follows:

Quotas Nominal value in Euro

Quotas 10.000

10.000

The items of the shareholder equity are broken down as followsaccording to their origin, possible use, distributability and usemade in the three prior years.

Nature/ Amount Possible Available Amount Amountdescription use* amount used in the used in

3 prior years the 3 priorto cover years forlosses other reasons

Share capital 10.000 B 10.000 – –

Other reserves 10 A, B, C 10 4.991 –

Profit (loss)carriedforward (2.270)

Total 7.740

(*) A: for capital increase; B: for loss coverage; C: for distribution to shareholders

B. Payables


10.305 9.105 1.200

Payables are valued at nominal value and their expiry datesare as follows:

Description Within Beyond Beyond Total12 months 12 months 5 years

Trade payables 2.080 2.080

Controllingcompanies 8.225 8.225

10.305 10.305

The following table shows a break-down of the accountsreceivable as at December 31, 2006 by geographical area.

Receivables Trade Controlled Affiliated Parent Other Totalby geographical receivables companies companies companies receivablesarea

Extra UE – – – 1.135 – 1.135

Italia – – – – 1 1

Total – – – 1.135 1 1.136

Receivable for Euro 1.135 derives from payments made on

behalf of the parent company Crew B.O.S. Products Limited.

Receivable for Euro 1 derives from the result between the

advance payment of IRES and withholding taxes for Euro 327,

net of IRES tax debt for Euro 326.

There are no receivables in foreign currency that would have

required conversion as at December 31, 2006.

III. Liquidity position


3.079 7.485 (4.406)

Description 31/12/2006 31/12/2005

Bank Balance 3.079 7.485

3.079 7.485

The account shows the liquidity position, cash-on-hand andvalues at the balance sheet date.

Liabilities

A. Shareholders’ equity


2.135 7.740 (5.605)

Description 31/12/2005 Increase Decrease 31/12/2006

Share capital 10.000 – – 10.000

Other reserves

– Payments forloss coverage 5.000 – 4.990 10

– Euro rounding off 1 – 1 –

Profit (loss)carried forward (2.270) – – (2.270)

Profit (loss) ofthe period (4.991) 4.991 5.605 (5.605)

Total 7.740 4.991 10.596 2.135

The shareholders' meeting of April 28, 2006 approved the

Financial Statements as at December 31, 2005 and resolved to

carry forward the loss of the year 2005 equivalent to Euro

4.990.64 entered to the Financial Statements as Euro 4.991

using the item "Payments for loss coverage".


112 La Tatva S.r.l., Italy

The item trade payables is represented by commercial items.

Payables to controlling companies are due to the recharge ofthe expenses of setting-up carried out by the parent company.

The following table shows a break-down of the accountspayable as at December 31, 2006 by geographical area.

Payables by Trade From parent Totalgeographical area payables companies

Italy 2.080 – 2.080

Extra UE – 8.225 8.225

Total 2.080 8.225 10.305

Profit and Loss Account

A. Cost of production


5.256 4.661 595

Description 31/12/2006 31/12/2005 Difference

Services 3.865 3.441 424

Sundry operatingcharges 1.391 1.220 171

5.256 4.661 595

The item Costs of services mainly includes expenses for accountingand administrative consultancies.

The item Sundry operating charges includes, as most significantamounts, non deductible VAT of Euro 576, duties to the Chamberof Commerce of Euro 498 and government concession tax forEuro 310.

B. Financial income and charges


1 1 –

Other financial income

Description 31/12/2006 31/12/2005 Difference

Interest on bank 1 1 –deposits

1 1 –

C. Extraordinary income and charges


(24) (5) (19)

D. Income tax of the period


326 326 –

Taxes Balance as at Balance as at Difference31/12/2006 31/12/2005

Current taxes 326 326 –

IRES – corporate tax 326 326 –

326 326 –

Further information

No fees to the Directors have been resolved or paid.

Furthermore we wish to point out that the company has notrecorded any payables or receivables with expiry dates beyondfive years.

Dear Shareholders,

In conclusion of these Supplementary Notes to the FinancialStatements at December 31, 2006, I invite you to approve theFinancial Statements in the form presented and indicated aloss equivalent to Euro 5.605, which puts the company in theposition provided by article 2482-ter of the Civil Code.

The present Financial Statements composed of Balance Sheet,Profit and Loss Account and the Supplementary Notes,represent a true and fair view of the company's assets andliabilities, financial position and profit or loss for the periodand correspond to the results arising from the accounts.

For the Board of Directors

The ChairmanTarun Oberoi


I n ou r repor t we have d i sc losed fo rward- look ing i n fo rmat ion

so that i nvesto r s can bette r under s tand a Company ' s futu re

p ro spec t s and make i n fo rmed i nve s tment dec i s i on s . Th i s

annua l repor t and other wr i t ten and ora l s tatements that we

make f rom t ime to t ime con ta i n such fo rwa rd - l ook i ng

s ta tement s t ha t se t ou t an t i c i pa ted re su l t s ba sed on

management ' s p lans and assumpt ions . We have t r i ed ,

wherever poss ib le , to ident i fy such statements by us ing words

such as 'ant ic ipate ' , 'est imate ' , 'expects ' , 'p ro jects ' , ' i n tends ' ,

' p lans ' , 'be l i eves ' , and words and te rms of s im i l a r substance

i n connec t i on w i t h any d i s cu s s i on o f f u tu re ope ra t i ng o r

f i nanc ia l pe r fo rmance .

FORWARD LOOKING STATEMENT

We cannot guarantee that any forward- look ing statement wi l l

be rea l i zed , a l though we be l ieve we have been prudent in our

p l an s and a s sumpt ion s . Ach i evement o f f u tu re re su l t s i s

s ub j ec t to r i s k s , unce r ta i n t i e s and i naccu ra te a s sumpt ion s .

Shou ld known or unknown r i sks or uncerta int ies mater ia l i ze , or

shou ld under ly ing assumpt ions prove inaccurate , actua l resu l t s

cou ld va ry mate r i a l l y f rom those an t i c i pa ted , e s t imated o r

p ro jected . I nvesto r s shou ld bear th i s i n m ind as they cons ide r

fo rward- look ing s tatements . We under take no ob l i gat ion to

pub l i c ly update any forward- look ing statements , whether as a

resu l t of new in fo rmat ion , fu tu re events o r othe rw i se .

Rese

arch

& D

esig

n by

WYA

TT(in

fo@

wya

tt.in

)

Crew B.O.S. Products LimitedRegistered Office: 813/C, Jaina Tower-I, District Centre, Janakpuri, New Delhi-110 058

Tel.: 011-45530149 | Fax: 011-45530148

Corporate Office: 199, Udyog Vihar, Phase-I, Gurgaon-122016, Haryana (India)Tel.: 91-124-4139400 | Fax: 91-124-4005011

Email: [email protected] | Web: www.crewbos.com

Crew Pgs 21-56 (Main) Report 2006-07.pdf · Annual Report 2006-07 Crew B.O.S. Products ......

Documents

Transcript of Crew Pgs 21-56 (Main) Report 2006-07.pdf · Annual Report 2006-07 Crew B.O.S. Products ......