Annual Report 2006-07crew Bos

8/7/2019 Annual Report 2006-07crew Bos

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Goingbeyond

Annual Report 2006-07

Crew B.O.S. Products Limited

Goingbeyond


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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

Directors Report 21

Corporate Governance 25

MDA 33

Auditors Report 37

Financial Section 40


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1

Crew B.O.S. Products Limited (herewith referred to as Crew

B.O.S.) designs, manufactures and exports leather and

leather-based fashion accessories and footwear. The

Companys diverse product range of belts, bags, wallets,

footwear and small leather goods represents the

international pulse of fashion as it is supplied to some of the

worlds best and most renowned international brands and

retail 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 been

very well appreciated in the international market. This

leather manufacturing plant is unique in India and Asia for the

sheer diversity of products & quality that it can produce.

An ISO 9001:2000 certified Company, Crew B.O.S. has six

state-of-the-art manufacturing units including a world-class

leather finishing unit located at Manesar (Haryana) equippedwith hi-end Italian machineries and Italian leather processing

technology. The Company also has a tannery at Jalandhar

(Punjab) and is also fast developing an exclusive footwear

manufacturing unit at the Mahindra SEZ in Chennai (Tamil

Nadu).

Headquartered in Delhi (India), Crew B.O.S. also has an

outsourcing and marketing office in Hong Kong (China),

marketing office in Milano (Italy) and a resourcing office in

Cairo (Egypt). The Companys Operations in Hong Kong and

Italy are conducted through its wholly owned subsidiaries.

The Companys shares are listed on the Bombay Stock

Exchange and National Stock Exchange of India Limited and

through its GDR issue listed on the Luxembourg Stock

Exchange.


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Fashion we believe is all about evolving style. What's

in, what's out. What's new, what's pass? What's hot,what's not? People cant turn over an entire wardrobe

based on changing styles every season and every

year. Rather they update looks with a fresh purchase

of fashion accessories and footwear. All major fashion

and luxury brands today are giving a more prominent

role to accessories thereby presenting an ever

increasing opportunity for Crew B.O.S. to cater to this

increasing demand.

This is just where Crew B.O.S. steps in. With products

that complement every facet of the customers

lifestyle - at work, leisure and fun. To do so, CrewB.O.S. is going beyond the ordinary to design and

manufacture 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 visualizing

ambitious projects and has embarked on robust strategic

plans to ramp up its core capabilities and forged a strategic

tie-up to gain invaluable experience in the footwear segment.

Going beyond, Crew B.O.S. will be travelling apath that promises to take the Company closer toits journey to be the best. The success of some ofthe initiatives promise to generate a whole newlevel of opportunities for Crew B.O.S. andsimultaneously create a cutting edge for the entireleather industry in India.

Crew B.O.S. is also going beyond seasonal trends and

creating a niche in the footwear segment which enjoys

a year around demand.

Going beyond


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Delivering on our promisesWhile 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.


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Promises made 2005-06 Promises delivered 2006-07

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

"Ramp up capacities to foray into the footwear

segment "

"ERP will be fully functionalstepping stone to receiving the

ISO 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 mn

in 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 willenable the Company to actively participate in the European markets

and serve as the Companys marketing arm in Italy.

Setting up a Sourcing office in Egypt.

Setting up a Hong kong subsidiary to resource and market.


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6

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

SOURCES OF FUNDSEquity Share Capital 69.99 110.00 128.18 158.03

Reserves & Surplus 68.64 238.18 575.10 774.64Total 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 FUNDSGross 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 10.10Total Assets 279.31 657.52 1155.04 1664.98

Net Worth 133.83 340.31 691.61 922.57

(Rs mn)


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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 focused

resolve, the Company embarked on large-scale business plans and passionately pursued a multiple strategic growth path tostrengthen every sphere of the business.

Industry overviewAs I write this letter to you, one of the major concerns expressed is the competitiveness of the export industry due to the

weakening 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 attention

from buyers whose honeymoon a rather long one with China is ending. The Leather industry in China is being challenged by new

laws 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 Indias door without the peer pressure

normally 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 reviewThe Companys net income rose from Rs 1314.69 mn to Rs 1847.26 mn while profitability grew by 43 per cent. Bags and belts

continue 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 theCompanys 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 Companys 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 communiqu, I briefly touch upon here.

Footwear segmentWe 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 the

developments in the domestic market present tremendous opportunities to build and create a special brand.


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Shoe Division SouthGauging 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 design ing 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 Companysmanufacturing prowess to a whole new scale and place in a leadership position in the industry as this will be amongst the biggest

plants in India.

Shoe Division NorthOur 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 NeemranaThe footwear infrastructure in India is fairly evolved but the country still lack some truly best-in-class component manufacturing

capabilities. 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.


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Retail forayA 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 TEMPESTA and CREW REPUBLICA towards the last quarter of this year. With right retail strategies and

our 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 AcademyOne 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 to

the leather industry in India.

Reengineering exerciseWhile 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 peoples 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.


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We also have been able to transform hard-to-define organizational concepts into a practical management agenda that has helped

us 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 have

wholeheartedly 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 initiativesAs the Company climbs the volume and value curve, Crew B.O.S. has in place a highly well-experienced and professional quali fiedmanagement 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 the

world.

Commitment to qualityQuality is the backbone of our commitment to customers. And no matter where Crew B.O.S. travels in its future journey and

however, fast we grow, cost-competitiveness and quality will always remain the bedrock of all that we do. To further enhance,the Companys quality contro l process, we have set up a full-fledged 28-member quality control team employing senior personnel

with rich-hands on experience in the leather industry. The Companys comprehensive commitment to quality in architecting anagile organization is vindicated by it being awarded the prestigious ISO 9001:2000 certification.

Social CompliancesAs 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 employment

in 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 and

the 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 stronger

than 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


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Strategic Business Units


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One of the significant steps that will provide Crew B.O.S. an important experience in gearing its volume-based structure is

the servicing of the renowned American brand Hush Puppies. Hush Puppies is a division of Wolverine Worldwide, an

international brand of contemporary, casual footwear for men, women and children which markets or licenses footwear in

over 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 and

women. The Italian finish leather from the finishing unit promises to provide a strong impetus to this project.

Springboardtovolume drivenbusiness

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Manufacturing capacitiesWith all compliance norms under process, the Joint Venture has begun operations on the existing lines since June 2007. To cater

to 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 of

Chennai, Tamil Nadu. This new facility would have 12 lines of production which would collectively have an installed capacity of

manufacturing 10,000 shoes a day. Part production from this new facility is likely to begin by December 2007 and the production

facility 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.

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Crew B.O.S. is a frontrunner in servicing global brands and takes great pride in helping international brands maintain

the 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 solid

foundation.

RETAILSTRATEGY

Going theretail way

Establish itsown

chain of stores

Launch itsbrands CrewRepublica and

Tempesta

Establisha distribution

network

Multi brandshops

Shopin

shops

Future roadmapAs 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 are

confident of discovering new horizons in the future.


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Crew B.O.S. has established a training academy for designing excellence and to build a valuable resource pool for both itself and to

gear the industry as it forges ahead to be the leather manufacturing destination for the world.

Started with

Footwear andBag division

Impart training tothe entire workforce of theCompany

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

31Designing edgeFrom 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 trends

enables designers to design and develop products that customers around the world can connect with.

It is to the Companys unique distinction that nearly 50 per cent of the products manufactured for its branded customers are designed

in 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 countrys design and resource pool.

Crew B.O.S. Academy toaugment human talentand design capabilities


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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, the

Companys academy aims to educate young and fresh workers in various production processes to ensure that speed; agility and quality

are consistently maintained. The school trains young workers, men and women not only production skills but aims at refining their softer

skills 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 Romanian

and 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 batch

size 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 industrys recognized supplier of talent human capital.


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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 DirectorMr. 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

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CREW B.O.S. PRODUCTS LIMITED

The Gross income from operation increased by 53.10% toRs. 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) whichrepresents 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 6.41Interim 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


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22 CREW B.O.S. PRODUCTS LIMITED

requirements of the Company. As on date no holder of warrantshas 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 yearended 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 inaccordance 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 concernbasis

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 OFPARTICULARS 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 withthe help of Italian Technology and absorbed technology

to keep the manufacturing process more automated

resulting in shorter lead time and better quality of products.


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Your Company regularly reviews and tries to upgrade itselfto 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, 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.

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 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.

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 processof 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 : GurgaonDate : 9th June, 2007


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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 # NIL

the 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 liabilitiesThere 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 NIL

Ganesh Financial Appointment the sector ACA, ACS, SoftwareOfficer (Payroll) /division DTM (ICA) Private Limited

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


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25


CorporateGovernance

ANNEXURE - 3

1. COMPANY'S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCECorporate 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.

2. BOARD OF DIRECTORS

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.

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. of Directorship / 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


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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, People

Development 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) Limited2. Beacon Weir Limited

Mr. Gautam Nair 1. Tex Corp Limited NIL NIL

2. Matrix Zippers Limited

3. AUDIT COMMITTEE

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 reference

to 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.

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 NilMr. 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.


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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 31st

December, 2006.

4. REMUNERATION COMMITTEE.

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.

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 di scuss and torecommend increase in the Remuneration package of theExecutive Directors of the Company.

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.

(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.


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5. SHAREHOLDERS' / INVESTORS' GRIEVANCE COMMITTEE.(a)

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)

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 passed

Time 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 the

International, 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


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7. DISCLOSURESDuring 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 any

compensation 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 communiqus pursuant to the requirements of

the 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.


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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 ]


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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 2.84Total 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)


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

Crew B.O.S. Products Limited

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 investors 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)

ProprietorFCA. 71221

Date : 9th June, 2007

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


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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 every

challenge 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, increased

efficiencies 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 business

challenges. 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 in

the 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 a

challenge 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


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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 Bagsb) 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. 411

million 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.


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2. Expenditurei. Material Manufacturing and Other Manufacturing

Expenses

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-house

consumption. 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 had

consolidated 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 as

compare 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 come

down 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 million

while 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 by

the 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


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

Documents

Annual Report 2006-07crew Bos