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Directors Report of Bombay Rayon Fashions Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Twenty Second Annual Report of the Company together with the Audited Annual Accounts for the year ended 31st March, 2015.

1. FINANCIAL AND OPERATIONAL PERFORMANCE:

a. Financial Results

Financial and Operational Results of the Company for the year ended 31st March, 2015 as compared to the previous financial year, is summarized below:

(Rs. in crores)

Particulars 31-03-15 31-03-14

Revenue from Operations 3532.67 2907.36

Profit before Interest, 602.88 451.65 Depreciation and Tax

Less: Interest 557.60 450.19

Profit before Depreciation 45.28 1.46 and Tax

Less: Depreciation 166.33 275.76

Profit / (Loss) before (121.05) (274.30) Extraordinary Items and Tax

Exceptional Items - Prior - 3.80 Period items (net)

Extra Ordinary Items

- Stock valuation difference - (258.36) written off

- Foreign Exchange Rate - (90.92) fluctuation Loss

Less: Provision for taxes 42.31 209.91 (Deferred Tax)

Profit / (Loss) after tax (78.74) (409.87)

b. Operations:

The total sales of the Company for the year increased to Rs. 3533.04 Crores. Though the exports have declined to Rs. 395.55 Crores in comparison to Rs. 473.20 Crores in 2013-14, the domestic sales was higher by 31.21% from Rs. 2285.87 Crores to Rs. 2999.32 Crores. The net loss for the year has come down to Rs. 78.74 Crores for the year in comparison to Rs. 409.87 Crores for the year 2013-14.

c. Report on Performance of Subsidiaries:

A report on the performance and financial position of each of the subsidiaries for the year ended 31st March 2015 is provided as Annexure - I and forms part of this report.

None of the Company's Subsidiaries ceased to be a subsidiary during the year under report.

Additional information on Subsidiary companies:

(i) Bombay Rayon Holdings Limited (BRHL).

BRHL holds 100% Equity of foreign subsidiaries BRFL Europe B.V., Netherlands & BRFL Italia S.r.l., Italy.

BRHL has registered a Net Profit of R 1.82 crores for the year ended March 31, 2015.

(ii) DPJ Clothing Ltd, U.K.

DPJ Clothing Limited is engaged in business of wholesale marketing and distribution of clothing products. The said subsidiary is assisting in getting many mid-size retailers of Europe by providing the services either by direct import or by import and delivery basis.

DPJ Clothing Ltd has registered loss of R 1.73 crores for the year ended March 31, 2015.

(iii) BRFL Europe B.V., Netherlands.

BRFL Europe B.V. at Netherlands curtailed its operations to save costs and most of the larger customers are directly dealt from well-established service facilities from India offices.

BRFL Europe B.V. has registered a loss of R 0.04 crores for the year ended March 31, 2015.

(iv) BRFL Italia S.r.l, Italy.

The Company owns the popular 'GURU' brand and is into the business of retailing of ready-made garments as well as other accessories in Europe.

The retail operations being not viable in the current prevailing economic scenario, are totally closed and the brand 'GURU' is put on license model for various popular products.

BRFL Italia S.r.l, Italy has registered a net loss of R 4935.26 lacs of for the year ended December 31, 2014.

(v) STI India Limited (STI).

The Company is running the unit of STI on job work basis for the manufacturing of yarn and knitted fabric. The part of manufactured yarn is used for captive consumption and balance is sold.

STI has incurred a net Loss of R 4.78 crores for the year ended March 31, 2015.

(vi) BRFL Bangladesh Private Limited (BRFL Bangladesh).

The Company has not taken up any operations yet.

d. Dividend:

Considering the loss incurred in the current financial year, your Directors have not recommended any dividend for the financial year ended March 31, 2015.

2. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:

The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. During the year under review, no material or serious observation has been received from the Internal Auditors of the Company for inefficiency or inadequacy of such controls.

3. PARTICULAR OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES:

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. None of the transactions entered in to by the Company with related party were material in nature exceeding the limit 10% of annual standalone/consolidated turnover of the company.

The particulars of contracts or arrangements with related parties are forming part of notes to Accounts in this Annual Report.

All Related party transactions are placed before the Audit Committee and subsequently before the Board for its approval. Omnibus approval is obtained on a yearly basis for transactions which are of repetitive nature as per the policy on Materiality of and Dealing with Related Party Transactions. The policy on related party transactions as approved by the Board of Directors has been uploaded on the website of the Company.

4. INCREASE OF BORROWING LIMITS AND LIMITS FOR PLEDGE/HYPOTHECATION/ MORTGAGE OF COMPANY'S ASSETS/PROPERTIES:

With a view to accommodate the need for long term/short term borrowings for working capital requirement for the business the Company proposes to increase its borrowing limits and consequently the limits for pledge/hypothecation/ mortgage of its assets/properties upto R 7000 crores pursuant to the provisions of Section 180(1) (a) and Section 180(1) (c) of the Companies Act, 2013 by seeking your approval by way of passing the Special Resolution at the ensuing Annual General Meeting of the Company.

5. INCREASE IN AUTHORISED CAPITAL:

In order to keep the provision for issue of new shares as may be required to meet the requirement of minimum public shareholding, it is proposed to increase Authorised Capital of the Company from the present, R 150,00,00,000 (Rupees One Hundred Fifty Crores only) divided into 15,00,00,000 (Fifteen Crores) Equity Shares of R 10/- each to R 200,00,00,000 (Rupees Two Hundred Crores only) divided into 20,00,00,000 (Twenty Crores) Equity Shares of R 10/,ranking pari passu with the existing shares in the Company

6. PAYMENT TO BANKERS AND STATUTORY AUTHORITIES:

During the year under review, there were delays in payment of dues to Bankers as well as to statutory authorities.

7. MATTERS RELATED TO CHANGE IN DIRECTORS AND KEY MANAGERIAL PERSONNEL AND DECLARATION BY INDEPENDENT DIRECTORS:

a. Changes in Board of Directors & Key Managerial Personnel:

I. Vacation of Office

A. Directors -

During the Financial Year 2014-2015 following nominee directors vacated the office due to withdrawal of nomination:-

(i) Mr. Mukul Sarkar with effect from 28th November, 2014 on account of withdrawal of his nomination by Export-Import Bank of India;

(ii) Mr. Babu Nambiar with effect from 30th January, 2015 on account of withdrawal of his nomination by IDBI Bank Limited.

B. Company Secretary

Ms. Shivangi Sharma was appointed as the Company Secretary & Compliance Officer of the Company with effect from 12th February, 2015, and subsequently tendered her resignation on 20th March, 2015.

II. Appointments

(i) Mr. John Mathew (DIN: 01632626), appointed as an Additional Director (Independent category) on the Board with effect from 22nd May, 2015 to hold office upto the date of ensuing Annual General Meeting;

(ii) Ms. Prachi Deshpande (DIN: 0295271) was appointed as an additional Director on the Board designated as Director - Secretarial & Corporate Affairs with effect from 1st June, 2015 to hold office upto the date of ensuing Annual General Meeting.

Ms. Prachi Deshpande was also appointed as the Company Secretary & Compliance Officer of the Company, Pursuant to the provisions of Section 203 (1) (ii) of the Companies Act, 2013.

The Company has received notices from shareholders along with requisite deposit proposing the candidature of Mr. John Mathew and Ms. Prachi Deshpande for their appointment as Directors at the ensuing Annual General Meeting.

III. Directors Retiring by Rotation

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Janardhan Agrawal and Mr. A. R. Mundra will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, have offered themselves for re-appointment. In accordance with the provisions of the Act, none of the Independent Directors is liable to retire by rotation.

IV. Application to Central Government

The Company is in the process of submitting application as required pursuant to Section 197 read with Schedule V of the Companies Act, 2013 with regard to remuneration payable to Mr. Aman Agrawal & Mr. Prashant Agrawal.

b. Declaration by Independent Directors:

The Company has received and taken on record the declarations received from all the Independent Directors of the Company in accordance to Section 149(6) of the Companies Act, 2013 confirming their independence vis-a- vis the Company.

8. DISCLOSURES RELATED TO BOARD,COMMITTEES AND POLICIES:

a. Board Meetings:

Four meetings of Board of Directors were convened during the financial year under review i.e. on 5th June, 2014, 30th July, 2014, 11th November, 2014, and 12th February, 2015.

b. Director's Responsibility Statement:

In terms of Section 134(5) of the Companies Act, 2013, in relation to the audited Annual Financial Statements of the Company for the year ended 31st March, 2015, the Board of Directors hereby confirms that:

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

b. such accounting policies have been selected and applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015, and of the loss of the Company for that year;

c. proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the annual accounts of the Company have been prepared on a going concern basis;

e. internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

f. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

c. Committees :

(I) Audit Committee:

The Audit Committee of Directors was constituted pursuant to the provisions of Section 177 of the Companies Act, 2013 read with Clause 49(III)(A) of the Listing Agreement.

The composition of the Audit Committee is in conformity with the provisions of the said section. The Audit Committee comprises of:

1. Mr. A. Arumugham, Chairman, Independent Director

2. Mr. Suresh Vishwasrao, Independent Director

3. Mr. Naseer Ahmed, Independent Director*

4. Mr. A. R. Mundra, Executive Director- Finance

5. Mr. John Mathew, Independent Director**

* till 22nd May, 2015

** Appointed on 22nd May, 2015

The scope and terms of reference of the Audit Committee have been amended in accordance with the Act and the Listing Agreement entered into with the Stock Exchanges. During the year under review, the Board of Directors of the Company had accepted all the recommendations of the Committee.

(II) Nomination and Remuneration Committee:

The Nomination and Remuneration Committee of Directors as constituted by the Board of Directors of the Company is in accordance with the requirements of Section 178 of the Act.

The composition of the committee is as under:

1. Mr. Naseer Ahmed,Chairman, Independent Director

2. Mr. Suresh Vishwasrao, Independent Director

3. Mr. A. Arumugham, Independent Director

4. Mr. John Mathew, Independent Director*

* Appointed on 22nd May, 2015

The Board, on recommendation of the Nomination and Remuneration Committee, has approved a policy setting out the criteria for review of responsibilities of the Directors positive attributes, independence of a Director and policy relating to remuneration for Directors, Key Managerial Personnel and other employees in accordance with the provisions of Section 178 of the Act.

(III) Stakeholders Relationship Committee:

The Stakeholder Relationship Committee of Directors was constituted pursuant to the provisions of Section 178 of the Companies Act, 2013.

The composition of the committee is as under:

1. Mr. Janardhan Agrawal, Chairman

2. Mr. Prashant Agrawal, Managing Director

3. Mr. A.R. Mundra, Executive Director- Finance

The Company Secretary acts as the Secretary of the Stakeholders' Relationship Committee.

d. Policies:

(I) Vigil Mechanism Policy:

In compliance of the requirements of section 177 of the companies Act, 2013, Clause 49 of the listing Agreement and as measure of good Corporate Governance practice, the Board has formulated a Vigil Mechanism Policy. The policy comprehensively provides an opportunity for any employee/ Director of the Company to raise any issue concerning breaches, accounting policies or any act resulting in financial or reputation loss and misuse of office or suspected or actual fraud. The policy is a adequate safeguard against victimization.

The Board of Directors of the Company has, pursuant to the provisions of Section 178(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, framed "Vigil Mechanism Policy" for Directors and Employees of the Company to provide a mechanism which ensures adequate safeguards to employees and Directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any, financial statements and reports, etc. and the same is also hosted on the website of the Company.

The employees of the Company have the right/option to report their concern/grievance to the Chairman of the Audit Committee.

The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations.

(II) Risk Management Policy:

The Board of Directors of the Company has designed Risk Management Policy and Guidelines to avoid events, situations or circumstances which may lead to negative consequences on the Company's businesses, and define a structured approach to manage uncertainty and to make use of these in their decision making pertaining to all business divisions and corporate functions. Key business risks and their mitigation are considered in the annual/strategic business plans and in periodic management reviews.

(III) Corporate Social Responsibility Policy:

As per the provisions of Section 135 of the Act read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee as under:

1. Mr. Suresh Vishwasrao - Independent Director (Chairman)

2. Mr. A. Arumugham- Independent Director

3. Mr. A. R. Mundra - Executive Director

The Company has drafted the Corporate Social Responsibility Policy which may be accessed on the web-site of the Company i.e. www.bombayrayon.com.

Since, the Company has incurred losses in FY 2013-14 & FY 2014-15, the Company has not spent any amount towards Corporate Social Responsibility activities.

e. Annual Evaluation of Directors, Committee and Board:

Independent Directors had reviewed the performance of the Chairman and Executive Directors considering the performance of the Company during the FY 2014-15. Board of Directors in their meeting has reviewed the contribution made by each Independent Director in the performance of the Company by way of their timely advice. Due to losses for FY 2014-15 there is no change in the remuneration payable to the Directors for next FY 2015-16 neither the Chairman will receive any commission.

f. Details with Respect to the Programme for Familiarisation of Independent Directors:

The details of programme for familiarization of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company.

g. Internal Control Systems:

Adequate internal control systems commensurate with the nature of the Company's business and size and complexity of its operations are in place has been operating satisfactorily. Internal control systems comprising of policies and procedures are designed to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected.

9. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

Pursuant to the Provisions of section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the requisite details are annexed herewith vide Annexure II and are also available at the Registered Office of Company for inspection during its working hours and any member interested in obtaining such information may directly write to the Company Secretary of Company and the same shall be provided on such request.

10. AUDITORS AND REPORTS:

a. Statutory Auditors:

The observations made by the Statutory Auditors in their Report read with the relevant notes as given in the Notes to Accounts for the year ended March 31, 2015, are self-explanatory and therefore do not call for any further comments under Section 134(3) of the Companies Act, 2013. The Auditors' Report does not contain any qualification, reservation and adverse remark.

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, M/s. V.K. Beswal & Associates, Chartered Accountants, Mumbai (Firm Registration Number: 101083W),the Statutory Auditors of the Company, hold office upto the conclusion of the ensuing Annual General Meeting. The consent of the Auditors along with certificate under Section 139 of the Act have been obtained from the Auditors to the effect that their appointment, if made, shall be in accordance with the prescribed conditions and that they are eligible to hold the office of Auditors of the Company. The Board recommends the appointment of M/s. V.K. Beswal & Associates, Chartered Accountants, Mumbai (Firm Registration Number: 101083W), as the Statutory Auditors of the Company for the financial year 2015-2016.

Necessary resolution for appointment of the said Auditors is included in the Notice of Annual General Meeting for seeking approval of members.

b. Secretarial Audit Report for the year ended 31st March, 2015:

The Board had appointed Rathi & Associates, Company Secretaries as Secretarial auditors for the financial year 2014- 15. Secretarial Audit Report issued by Rathi & Associates in form MR-3 for the FY 2014-15 forms part of this report and marked as Annexure III.

As mentioned hereinabove in this report the Company is in the process of submitting application as required pursuant to Section 197 read with Schedule V of the Companies Act, 2013 with regard to remuneration payable to Vice Chairman & Managing Director.

The company and the promoters are in the process to take action to comply with the regulations of Securities and Exchange Board of India related to Minimum public Shareholding (MPS) to increase the public shareholding to 25%.

c. Cost Auditors:

Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with Notifications/Circulars issued by the Ministry of Corporate Affairs from time to time, as per the recommendation of the Audit Committee, the Board of Directors at their meeting dated 22nd May, 2015, appointed M/s. K. S. Kamalakara & Company, Cost Accountants as the Cost Auditors of the Company for the financial year 2015-16 at annual audit fee of R 5,00,000/- .

d. Internal Audit and Control:

M/s Venkatram & Co., Firm Registration No. 004656S, Chartered Accountants, Internal Auditors of the Company have carried out internal audit and the findings of the Internal Auditors in their reports are discussed on an on-going basis in the meetings of the Audit Committee and corrective actions are taken as per the directions of the Audit Committee.

11. OTHER DISCLOSURES:

Other disclosures as per provisions of Section 134 of the Act read with Companies (Accounts) Rules, 2014 are furnished as under:

a. Extract of Annual Return:

Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, Extract of the Annual Return for the financial year ended 31st March, 2015 made under the provisions of Section 92(3) of the Act is attached as Annexure IV which forms part of this Report.

b. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

The particulars as required under the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo etc. are furnished in Annexure V which forms part of this Report.

c. Corporate Governace and Management Discussion & Analysis Reports:

The Company is committed to maintain the high standards of Corporate Governance and adheres to its requisites set out by the respective authorities. The report on Corporate Governance as stipulated under the Listing Agreement is annexed vide Annexure VI and forms an integral part of this Annual Report.

Requisite certificate from the Auditors of the Company M/s V. K. Beswal & Associates, Chartered Accountants,(Firm Registration Number: 101083W), confirming compliance with the conditions of Corporate Governance as stipulated under Clause 49 of Listing Agreement is appended herewith vide Annexure VI(A) and forms an integral part of this Annual Report.

Certificate issued by Managing Director and Executive Director of Company with regard to certification on Audited Financial Statement of the Company for F. Y. 2014-15 is also annexed herewith vide Annexure VI (B) and forms an integral part of this Annual Report.

The Company has suitably laid down the Code of Conduct for all Board Members and Senior Management personnel of the Company. The declaration by CEO i.e. Managing Director of company related to the compliance of aforesaid Code of Conduct is also attached herewith vide Annexure VI(C) and forms an integral part of this Annual Report.

Management Discussion and Analysis Report for the year under review, as required pursuant to the provisions of Clause 49 of the Listing Agreement, is annexed herewith vide Annexure VII and forms part of this Annual Report.

d. General Disclosures:

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions pertaining to these matters during F.Y. 2014-15:

a. Details relating to acceptance of deposits covered under Chapter V of the Companies Act, 2013.

b. Issue of equity shares with differential rights as to dividend, voting or otherwise.

c. Issue of shares (including sweat equity shares and ESOS) to employees of the Company under any scheme.

d. Instances with respect to voting rights not exercised directly by employees of the Company.

e. There was no revision of the financial statements for the year under review.

f. During the financial year company has neither provided any loans and guarantees nor made any investments.

Your Directors further state that:

g. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of the subsidiary Company.

h. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

i. Except as disclosed elsewhere in this report, no material changes and commitments which could affect the Company's financial position, have occurred between the end of the financial year of the Company and date of this Annual Report.

j. There was no change in the nature of business of company during F. Y. 2014-15.

k. Pursuant to the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, no case pertaining to sexual harassment at workplace has been reported to company during F.Y. 2014-15.

12. ACKNOWLEDGEMENTS AND APPRECIATION:

Your Directors take this opportunity to thank the customers, shareholders, suppliers, bankers, business partners/ associates, financial institutions and Central and State Governments for their consistent support and encouragement to the Company.

Your Directors records with sincere appreciation the valuable contribution made by employees at all levels and looks forward to their continued commitment to achieve further growth and take up more challenges that the Company has set for the future.

For and on behalf of the Board of Directors

Janardhan Agrawal

Chairman

DIN:00019497

Place: Mumbai

Date: August 14, 2015

Registered Office Address:

D 1st Floor, Oberoi Garden Estates, Chandivali Farms,

Chandivali, Andheri (East), Mumbai - 400072

CIN:L17120MH1992PLC066880

TEL No: 91 22 39858800

Fax No : 39858700

Mail:investors@bombayrayon.com

Website: www.bombayrayon.com


Mar 31, 2014

Dear Shareholders,

The Directors have pleasure in presenting their Report on the operations of the Company together with the Annual Audited Accounts for the financial year ended March 31, 2014.

(Rs. in crores) Particulars March31 March 31 2014 2014

Revenue from Operations 2907.36 3194.79

Profit before Interest, 451.65 820.95

Depreciation and Tax

Less: Interest 450.19 239.81

Profit before Depreciation 1.46 581.14

and Tax

Less: Depreciation 275.76 271.22

Profit / (Loss) before (274.30) 309.92

Extraordinary Items and

Tax

Less: Excess Provision for - (13.94)

FBT written back

Exceptional Items - Prior 3.80 - Period items (net)

Extra Ordinary Items

- Stock valuation difference (258.36) - written off

- Foreign Exchange Rate (90.92) - fluctuation Loss

Less: Provision for taxes 209.91 (107.22) (Deferred Tax)

Profit / (Loss) after tax (409.87) 188.76

EPS(Rs.) - Basic - 14.02

EPS(Rs.) - Diluted - 14.02

During the year under review, the Company''s debts availed from the Banks/ financial institutions were restructured due to which flow of orders from overseas customers slowed down as the customers were awaiting the status of the Company post implementation of debt restructuring package by the bankers. On account of the same, export sales of the Company has declined substantially from Rs. 1227.17 crores in FY 2012-13 to Rs. 473.20 crores in FY 2013-14.

However though, the Company has strived to enhance the growth of its domestic sales from Rs. 1972.85 crores in FY 12-13 to Rs. 2434.16 crores in FY 13-14, resulting in an increase by almost 23%. Total revenue from operations has reduced to Rs. 2907.62 crores from Rs. 3194.79 crores in FY

2012-13. The net loss incurred for the year was Rs. 409.87 crores after Extra-ordinary items of Rs. 349.28 crores.

DIVIDEND

Considering the loss for the FY 2013-14, your Directors have decided not to recommend any dividend for the year ended 31st March, 2014.

RESTRUCTURING OF DEBTS:

Your Company has carried out various expansions since 2005 and all the expansions were completed by the FY. 2012-13. During the execution of various projects, there was huge inventory generated which was required to put at its realizable value. The Management of the Company carried out extensive exercise for valuation of its inventories in the first quarter of FY 2013-14 and an amount of Rs. 258.36 crores was written off as valuation difference. Further, in the same quarter Rs. 90.92 crores was also written off being loss on exchange fluctuation on outstanding working capital limits under foreign currency.

In addition to losses incurred in the first quarter of the financial year, there were other factors which have adversely impacted the profitability and cash flows of the Company like:

- Slowdown in European and US Markets

- Large Scale Expansion

- Advances to Subsidiaries

- Redemption of Commercial Papers

- Delay in receipt of TUFS subsidy and other refunds

- Increase in debt and Financing Cost

resulting in delay in fulfilling the commitment with lenders. On account of the same, the Company approached the lenders and they had referred their total debt of around Rs. 4000 crores to the Corporate Debt Restructuring (CDR) Cell. The CDR Empowered Group formally accepted the Company''s proposal on September 26, 2013. Under the regulatory frame work of the Reserve Bank of India (RBI), the CDR forum caters to an official platform for both the lenders and borrowers to amicably and collectively evolve policies for working out debt restructuring plans. The broad contours of this restructuring exercise involves restructuring of repayment schedule for term loans under Technology Upgradation Funds Scheme (TUFS) and Non -TUFS Term Loans, reduction in interest rates, additional facilities in the form of Working Capital Term Loan (WCTL) & Funded Interest Term Loan (FITL) and reduction in interest rate. This debt restructuring will provide the company with breathing space to work on improving operational margins.

DIRECTORS:

Dr. B. S. Bhesania and Dr. S. B. Agarwal have stepped down from the Company''s Board w.e.f August 12, 2013 and August 22, 2013 respectively. Mr. UdayMogre has resigned as Whole - time Director designated as Executive Director - Corporate

w.e.f December 31, 2013. The Board places on record their appreciation for the valuable guidance and services rendered by the three Directors.

In accordance with the provisions of Section 149 and 152 of the Companies Act, 2013, Independent Directors are required to be appointed for a term of five consecutive years and shall not be liable to retire by rotation. Accordingly, the Company seeks your approval for appointment of Mr. Naseer Ahmed, Mr. Suresh Vishwasrao, Mr. M. M. Agrawal and Mr. A. Arumugham as Independent Directors for the period upto March 31, 2019.

The Company has received Notices under Section 160 of the Companies Act, 2013 from members proposing the appointment of Mr. Naseer Ahmed, Mr. Suresh Vishwasrao, Mr. M. M. Agrawal and Mr. A. Arumugham as Independent Directors of the Company together with requisite deposit.

The Company has also received the requisite disclosures from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under both sub-section (6) of section 149 of the Companies Act, 2013 and under clause 49 of the Listing Agreement with Stock Exchanges.

Mr. Aman Agrawal and Mr. Prashant Agrawal retire by rotation at the ensuing Annual General Meeting, and being eligible, have offered themselves for re-appointment.

The information to shareholders pursuant to the applicable provisions of the Companies Act, 2013 read with Clause 49 of the Listing Agreement of all the above mentioned Directors is annexed hereto and forms part of this Annual Report.

INCREASE OF BORROWING LIMITS AND LIMITS PERTAINING TO PLEDGE/HYPOTHECATION OF COMPANY''S ASSETS:

On account of Corporate Debt Restructuring, the Company increased its borrowing powers and the limits pertaining to pledge/hypothecation of its assets upto v5500 crores pursuant to the provisions of Section 180(1) (a) and Section 180(1)(c) of the Companies Act, 2013 by seeking your approval by way of passing of Special Resolution at the Extra-ordinary General Meeting held on 30th September, 2013.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm the following:

1. That in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures.

2. That they have selected such accounting policies in consultation with Statutory Auditors and other experts and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year viz March 31, 2014 and of the Loss of the Company for that year.

3. That they have taken proper and sufficient care to the best of their knowledge and ability 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.

4. That they have prepared the attached Statement of Accounts for the year ended March 31, 2014 on a going concern basis.

CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION & ANALYSIS REPORT:

Report on the Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges along with a certificate from M/s. V. K. Beswal & Associates, Chartered Accountants, (Firm Registration Number: 101083W), Statutory Auditors confirming compliance is set out in the annexure forming part of this Report. The Management Discussion and Analysis Report on the operations of the Company as required under the Listing Agreement with the Stock Exchanges is also annexed hereto and forms part of this Report.

AUDITORS:

The Statutory Auditors of the Company, M/s V. K. Beswal & Associates, Chartered Accountants, Mumbai (Firm Registration Number: 101083W) shall hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. M/s V. K. Beswal & Associates, Chartered Accountants have expressed their willingness to act as the Statutory Auditors of the Company, and furnished to the Company a certificate that their appointment, if made, would be in conformity with the provisions of Section 139(1) of Companies Act, 2013.

AUDITORS'' REPORT:

The observations made by the Statutory Auditors in their Report read with the relevant notes as given in the Notes to Accounts for the year ended March 31, 2014, are self-explanatory and therefore do not call for any further comments under Section 217(3) of the Companies Act, 1956.

PARTICULARS OF EMPLOYEES:

The information required under section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and the other particulars of the employees are set out in the annexure to the Directors'' Report. Having regard to Section 219(1)(b) (iv) of the said Act, Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto.

Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars as prescribed under section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, are set out in annexure to this report.

PUBLIC DEPOSITS:

The Company has not accepted any amount falling within the purview of "Public Deposit" as per the provisions of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposit) Rules, 1975.

SUBSIDIARY COMPANIES:

(i) Bombay Rayon Holdings Limited (BRHL).

BRHL holds 100% Equity of foreign subsidiaries, BRFL Europe B.V., Netherlands & BRFL Italia S.r.l., Italy.

BRHL has registered a Net Profit of v 2.74 crores for the year ended March 31, 2014.

(ii) DPJ Clothing Ltd, U.K.

DPJ Clothing Limited is engaged in business of wholesale marketing and distribution of clothing products. The said subsidiary is assisting in getting many mid-size retailers of Europe by providing the services either by direct import or by import and delivery basis.

DPJ Clothing Ltd has registered loss of GBP 330,903 for the year ended March 31, 2014.

(iii) BRFL Europe B.V., Netherlands.

BRFL Europe B.V. at Netherlands curtailed its operations to save costs and most of the larger customers are directly dealt from well established service facilities from India offices.

BRFL Europe B.V. has registered a loss of Euro 5.418 for the year ended March 31, 2014.

(iv) BRFL Italia S.r.l, Italy.

The Company owns the popular ''GURU'' brand and is into the business of retailing of ready-made garments as well as other accessories in Europe.

The retail operations being not viable in the current prevailing economic scenario are totally closed and the brand ''GURU'' is put on license model for various popular products.

BRFL Italia S.r.l, Italy has registered a net loss of Euro 8.284 thousand for the year ended December 31, 2013.

(v) STI India Limited (STI).

The Company is running the unit of STI on job work basis for the manufacturing of yarn and knitted fabric. The part of manufactured yarn is used for captive consumption and balance is sold.

STI has incurred a net Loss of v 6.67 crores for the year ended March 31, 2014.

(vi) BRFL Bangladesh Private Limited (BRFL Bangladesh).

The Company has not taken up any operations yet.

In accordance with general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet & Profit and Loss Account of the subsidiary companies are not attached. However, the financial information of the Subsidiary Company is disclosed in the Annual Report in compliance with the said circular.

ACKNOWLEDGEMENTS:

YourDirectors wishes to express its sincere appreciation and thanks to our Bankers, Regulatory authorities, State Government and Central Government, Customers, Suppliers and other stakeholders for their consistent support and cooperation.

Your Directors appreciate the contribution made by the employees of the Company and acknowledge their hard work and dedication. The Directors are thankful to the esteemed shareholders for their support and the confidence reposed in the Company.

For and on behalf of the Board

Janardhan Agrawal Chairman

Place: Mumbai Date: July 30, 2014


Mar 31, 2013

Dear Shareholders,

The Directors have pleasure in presenting their Report on the operations of the Company together with the Audited Accounts for the financial year ended 31st March, 2013.

(Rs. in crores)

Particulars 31st March, 2013 31st March, 2012

Sales 3194.79 2734.96

Profit before Interest, 820.95 713.12 Depreciation and Tax

Less: Interest 239.81 188.25

Profit before Depreciation 581.14 524.87 and Tax

Less: Depreciation 271.22 217.23

Profit before Extraordinary 309.92 307.64 Items and Tax

Less: Excess/(Short) (13.94) 0.11 Provision for FBT written back

Less: Provision for taxes 107.22 101.24 (including deferred)

Profit after tax 188.76 206.51

- Basic 14.02 15.50

- Diluted 14.02 14.67

During the year under review, all the ongoing projects of the Company have fully commenced and have started commercial operations. The revenue from operations has increased to Rs. 3194.79 Crores from Rs. 2734.96 Crores in previous year. An increase in revenue is mainly due to jump in fabric sale in local markets, by 36% as compared to previous year.

DIVIDEND

With a view to conserve the resources for the Company''s business operations, your directors have deemed it prudent not to recommend any dividend for the year ended 31st March, 2013.

CONSOLIDATION OF BUSINESS:

In the past years the company has set up additional manufacturing facilitates at various locations in the State of Maharashtra and Karnataka. During the year under review the Company had focused in consolidating the business operations at various locations to get the optimum advantage of the set up facilities.

DIRECTORS:

During the period under review, Dr. Pravin P Shah Independent director of the board had passed away on 4th December, 2012. The Board expresses its deep condolence on the sudden demise of Dr. Pravin R Shah.

Dr. S. B. Agarwal and Dr. B. S. Bhesania stepped down from the Company''s Board with effect from 12th August, 2013 and 22nd August, 2013 respectively.

Further, in accordance with the provisions of Section 255 read with Section 266 the Companies Act, 1956 and the Company''s Articles of Association, Mr. Janardhan Agrawal, Mr. Naseer Ahmed, and Mr. A. R. Mundra Directors of the Company shall retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

Furthermore, the tenure of Mr. Aman Agrawal as the Whole- time Director, designated as Vice Chairman, Mr. Prashant Agrawal as the Managing Director, Mr. Uday Mogre as the Whole-time Director, designated as Executive Director - Corporate and Mr. A. R. Mundra as the Whole-time Director, designated as Executive Director - Finance expired on 31st May, 2013. The Board recommends their respective re-appointment a further tenure of three years commencing from 1st June, 2013.

Also, Mr. AArumugham and Mr. Babu Nambiar were inducted on the Company''s Board with effect from 22nd August, 2013.

The information to shareholders pursuant to Clause 49 of the Listing Agreement pertaining to brief resume, expertise in functional areas, names of Companies in which all the above mentioned Directors are interested respectively etc. forms part of this Annual Report.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm the following:

1. that in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

2. that they have selected such accounting policies in consultation with Statutory Auditors and other Experts and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year viz 31st March, 2013 and of the Profit of the Company for that year.

3. that they have taken proper and sufficient care to the best of their knowledge and ability 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.

4. that they have prepared the attached Statement of Accounts for the year ended 31st March, 2013 on a going concern basis.

CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION & ANALYSIS REPORT:

A report on the Corporate Governance as stipulated under clause 49 of the Listing Agreement with the Stock Exchanges along with a certificate from M/s. V. K. Beswal & Associates, Chartered Accountants, Statutory Auditors confirming compliance is set out in the annexure forming part of this Report. The Management Discussion and Analysis Report on the operations of the Company as required under the Listing Agreement with the Stock Exchanges is also annexed hereto and forms part of this Report.

AUDITORS:

The Statutory Auditors of the Company, M/s V. K. Beswal & Associates, Chartered Accountants, Mumbai (Firm Registration Number: 101083W) shall hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. M/s V. K. Beswal & Associates, Chartered Accountants have expressed their willingness to act as the Statutory Auditors of the Company, and furnished to the Company a certificate from that their appointment, if made, would be in conformity with the provisions of Section 224 (1B) of Companies Act, 1956.

AUDITORS'' REPORT:

The observations made by the Statutory Auditors in their Report read with the relevant notes as given in the Notes to Accounts for the year ended 31st March, 2013, are self-explanatory and therefore do not call for any further comments under Section 217(3) of the Companies Act, 1956.

PARTICULARS OF EMPLOYEES:

The information required under section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and the other particulars of the employees are set out in the annexure to the Directors'' Report. Having regard to section 219 (1) (b) (iv) of the said Act, Annual Report excluding the aforesaid information is being sent to all the members of the Company and other entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars as prescribed under section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, are set out in annexure to this report.

PUBLIC DEPOSITS:

The Company has not accepted any amount falling with the purview of "Public Deposit" as per the provisions of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975.

SUBSIDIARY COMPANIES:

(i) Bombay Rayon Holdings Limited (BRHL).

BRHL holds 100% equity of foreign subsidiaries BRFL Europe B.V., Netherlands & BRFL Italia S.r.l., Italy.

BRHL has registered a net profit of f 2.41 Crores for the year ended 31st March, 2013.

(ii) DPJ Clothing Ltd, U.K.

DPJ Clothing Limited is engaged in business of wholesale marketing and distribution of clothing Products. The said subsidiary is assisting in getting many mid size retailers of Europe by providing the services either by direct import or by import and delivery basis. Your Company continued to reap benefits in expanding its business in Europe.

DPJ Clothing Ltd has registered loss of GBP 293,383 for the year ended 31st March, 2013.

(iii) BRFL Europe B.V., Netherlands.

BRFL Europe B.V. at Netherlands curtailed its operations to save costs and most of the larger customers are directly dealt from well established service facilities from India offices.

BRFL Europe B.V. has registered a loss of Euro 4,465 for the year ended 31st March, 2013.

(iv) BRFL Italia S.r.l, Italy.

The Company owns the popular ''GURU'' brand and is into the business of retailing of ready-made garments as well as other accessories in Europe.

The economic environment in that part of world is gloomy and to keep the business operations fit, the activities are being restructured, putting the license model for the brand at place for various modals.

BRFL Italia S.r.l, Italy has registered a net loss of Euro 7.267 thousand for the period ended 31st December, 2012.

(V) STI India Limited (STI).

The Company is running the unit of STI on job work basis for the manufacturing of yarn and knitted fabric. The part of manufactured yarn is used for in-house consumption and balance is sold.

STI has registered a net Loss of Rs. 9.33 Crores ended 31st March, 2013.

(vi) BRFL Bangladesh Private Limited (BRFL Bangladesh).

The Company has been incorporated for activities in Bangladesh, but operations presently not commenced due to unfavorable business environments.

The Company has availed exemption pursuant to the General Circular No. 2/2011 dated 8th February, 2011 issued by the Ministry of Corporate Affairs; from attaching the Annual Accounts of its subsidiaries vide its Board''s approval on 22nd August, 2013. The Company undertakes that the annual accounts of the subsidiary companies and the related detailed information shall be made available to the shareholders of the holding and subsidiary companies seeking such information at any point of time. The annual accounts of the subsidiary companies are available for inspection by the shareholders at the Registered Office of the Company and its Subsidiaries.

ACKNOWLEDGEMENTS:

Your Directors express sincere appreciations for the co-operation and support from our Regulatory Authorities, Shareholders, Bankers, Suppliers, Customers, and other Stakeholders. We look forward to receiving their continued support and encouragement.

The Board of Directors expresses its gratitude and records its sincere appreciation of the dedicated efforts and commitment of all the employees.

For and on behalf of the Board

Place: Mumbai Janardhan Agrawal

Date: 22nd August, 2013 Chairman


Mar 31, 2012

Dear Shareholders,

The Directors have pleasure in presenting their Report on the operations of the Company together with the Audited Accounts for the financial year ended March 31, 2012.

(Rs. in crores)

Particulars As at March As at March 31,2012 31,2011

Sales 2734.96 2254.84

Profit before Interest, 746.40 564.36 Depreciation and Tax

Less: Interest 221.53 145.21

Proft before Depreciation 524.87 419.15 and Tax

Less: Depreciation 217.23 136.67

Profit before Extraordinary 307.64 282.48 Items and Tax

Less: Excess Provision for -0.11 - FBT written back

Profit Before Tax 307.75 282.48

Less: Provision for taxes (101.24) 55.78 (including deferred)

Profit after tax 206.51 226.69

Basic 15.50 19.06

Diluted 14.67 17.70

Your Company has achieved commencement of yarn dyeing & fabric weaving facilities at Tarapur and weaving at Islampur in Maharashtra during the FY 2011-12. The total turnover has increased to Rs. 2734.96 crores as compared to Rs. 2254.84 crores in the previous year. Exports were higher at Rs. 1323.11 crores as against Rs. 1110.70 crores previous year an increase of 19%.

The operating margins were improved but the net profit was under stress due to increased financial costs and depreciations because of expansion pans and higher interest rates.

DIVIDEND

With a view to conserve the resources for the Companys business operations, your Directors have deemed it prudent not to recommend any dividend for the year ended March 31, 2012.

BUSINESS DEVLOPMENT:

1. Completion of expansion of manufacturing facilities:

The Directors are pleased to inform that during the year under review, your Company has successfully commenced the commercial production of its last phase of expansion projects of yarn dyeing at Tarapur & weaving at Islampur & Tarapur and consequently completing the all ongoing expansion projects.

The cost of the expansion project was funded partly by equity capital already raised and the balance by way of term loans under Technology Upgradation Fund Scheme (TUFs) entitling the Company an interest subsidy of 5% and in addition capital subsidy of 10% on the total investment in Processing & Garment Machineries.

2. Changes in Share Capital and Shareholding Pattern:

(i) Changes in Share Capital

During the year under review your company has allotted - 42.00.000 equity shares to Reynold Shirting Limited, a promoter group company on exercise of option for conversion of warrants into equal number of equity shares at an exercise price of Rs. 193/- per share.

25.00.000 equity shares to B. R. Machine Tools Private Limited, a promoter group company on exercise of option for conversion of warrants into equal number of equity shares at an exercise price of Rs. 263/- per share.

Consequent to conversion the paid up capital of the Company increased from Rs. 127.90 crores consisting of 12,79,00,000 equity shares of Rs. 10/- each to Rs. 134.60 crores consisting of 13,46,00,000 equity shares of Rs. 10/- each.

(ii) Changes in Shareholding Pattern

During the year under review on of the shareholder of the Company, AAA United B. V, a Company incorporated under the Laws of Netherlands (AAA) has opted for conversion of 3,30,00,000 Global Depository Receipts (GDRs) into equal number of equity shares which triggered an open offer to the existing shareholders. On the closure of open offer an Indian company, Ashwell Holding Company Pvt. Ltd. has acquired 2,84,20,000 equity shares, making the shareholding of promoters and persons acting in concert at 93.15% of the total paid up capital of the company.

DIRECTORS:

Mr. Mukul Sarkar, a Nominee Director has been appointed by Export Import Bank of India on June 26, 2011 in place of Mr. K. Muthukumaran.

In accordance with the provisions of Section 255 read with Section 266 the Companies Act, 1956 and the Companys Articles of Association, Mr. Suresh Vishwasrao, Mr. Uday Mogre and Mr. M. M. Agrawal, Directors of the Company shall retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

The information to shareholders pursuant to Clause 49 of the Listing Agreement pertaining to brief resume, expertise in functional areas, names of Companies in which Mr. Suresh Vishwasrao, Mr. Uday Mogre and Mr. M. M. Agrawal ,are Directors respectively is forming part of the Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm the following:

1. that in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

2. that they have selected such accounting policies in consultation with Statutory Auditors and other Experts and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year viz March 31, 2012 and of the Profit of the Company for that year.

3. that they have taken proper and sufficient care to the best of their knowledge and ability 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.

4. that they have prepared the attached Statement of Accounts for the year ended March 31, 2012 on a going concern basis.

CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION & ANALYSIS REPORT:

A report on the Corporate Governance as stipulated under clause 49 of the Listing Agreement with the Stock Exchanges along with a certificate from M/s. V. K. Beswal & Associates, Chartered Accountants, Statutory Auditors confirming compliance is set out in the annexure forming part of this Report. The Management Discussion and Analysis Report on the operations of the Company as required under the Listing Agreement with the Stock Exchanges is also annexed hereto and forms part of this Report

AUDITORS:

The Statutory Auditors of the Company, M/s V. K. Beswal & Associates, Chartered Accountants, Mumbai (Firm Registration Number: 101083W) shall hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. M/s V. K. Beswal & Associates, Chartered Accountants have expressed their willingness to act as the Statutory Auditors of the Company, and furnished to the Company a certificate from that their appointment, if made, would be in conformity with the provisions of Section 224 (1B) of Companies Act, 1956.

AUDITORS REPORT:

The observations made by the Statutory Auditors in their Report read with the relevant notes as given in the Notes to Accounts for the year ended March 31, 2012, are self- explanatory and therefore do not call for any further comments under Section 217(3) of the Companies Act, 1956.

FIXED DEPOSITS:

The Company has not accepted or renewed any deposit from public during the year under review.

PARTICULARS OF EMPLOYEES:

The information required under section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and the other particulars of the employees are set out in the annexure to the Directors Report. Having regard to section 219 (1) (b) (iv) of the said Act, Annual Report excluding the aforesaid information is being sent to all the members of the Company and other entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars as prescribed under section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, are set out in annexure to this report.

DEPOSITORY SYSTEM:

Your Companys Equity Shares are available for dematerialization through National Securities Depository Limited and Central Depository Services (India) Limited. As on March 31, 2012, 99.97% of the Equity Shares of the Company were in dematerialized form.

CONVERSION OF GDRS/WARRANTS AND OTHER MAJOR CORPORATE ACTIVITY DURING THE YEAR SUBSIDIARY COMPANIES:

(i) Bombay Rayon Holdings Limited (BRHL).

BRHL holds 100% equity of foreign subsidiaries BRFL Europe B.V., Netherlands & BRFL Italia S.r.l., Italy.

BRHL has registered a net profit of Rs. 2.28 crores for the year ended March 31, 2012.

(ii) DPJ Clothing Limited, U.K.

DPJ Clothing Limited is engaged in business of wholesale marketing and distribution of clothing Products. The said subsidiary is assisting in getting many mid size retailers of Europe by providing the services either by direct import or by import and delivery basis. Your Company continued to reap benefits in expanding its business in Europe.

DPJ Clothing Ltd has registered loss of GBP 221,000 for the year ended March 31, 2012.

(iii) BRFL Europe B.V., Netherlands.

BRFL Europe B.V. at Netherlands curtailed its operations to save costs and most of the larger customers are directly dealt from well established service facilities from India offices.

BRFL Europe B.V. has registered a loss of Euro 10,716 for the year ended March 31, 2012.

(iv) BRFL Italia S.r.l, Italy.

The Company owns the popular GURU brand and is into the business of retailing of readymade garments as well as other accessories in Europe.

The economic environment in that part of world is gloomy and to keep the business operations fit, the activities are restructured.

BRFL Italia S.r.l, Italy has registered a net loss of Euro 6.09 million for the year ended March 31, 2012.

(v) STI India Limited (STI).

The Company is running the unit of STI on job work basis for the manufacturing of yarn and knitted fabric. The part of manufactured yarn is used for in-house consumption and balance is sold.

STI has registered a net profit of Rs. 15.18 lacs ended March 31, 2012.

(vi) BRFL Bangladesh Private Limited (BRFL Bangladesh).

The Company has been incorporated but operations yet to commence.

In accordance with general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the Subsidiary Companies and the related detailed information to any member of the Company and the Subsidiaries who may be interested in obtaining the same.

The necessary disclosures are made in respect of the subsidiaries in this Annual Report alongwith the statement pursuant to Section 212 of the Companies Act, 1956.

Ds required by Section 212 of the Companies Act, 1956, the Statement of holding in subsidiaries and Consolidated Accounts pursuant to Accounting Standard (AS 21) issued by the Institute of Chartered Accountant of India, including the financial accounts of the subsidiary companies are forming part of the Annual Report. The Annual Accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies.

ACKNOWLEDGEMENTS:

Your Directors express sincere appreciations for the co- operation and support from our Bankers, Securities and Exchange Board of India ("SEBI"), Stock Exchanges and other Regulatory authorities, State Government and Central Government and above all, our Customers.

We look forward to receiving their continued support and encouragement.

The Board of Directors express its gratitude and record its sincere appreciation of the dedicated efforts and commitment of all the employees. The directors are thankful to the esteemed shareholders for their support and the confidence reposed in the Company.

For and on behalf of the Board

Place: Mumbai Janardan Agrawal

Date: July 06, 2012 Chairman


Mar 31, 2011

Dear Shareholders,

The Directors have great pleasure to present their Report together with the Audited Accounts for the year ended March 31, 2011.

FINANCIAL RESULTS AND OPERATIONS:

(Rs. in Lacs)

31-03-2011 31-03-2010

Sales 225483.63 161476.59

Profit before Interest, Depreciation and Tax 56435.48 40317.86

Less: Interest 14520.64 9354.37

Profit before Depreciation and Tax 41914.84 30963.49

Less: Depreciation 13667.05 6806.53

Profit before Tax 28247.79 24156.96

Less: Provision for Taxes (including Deferred) 5577.89 6565.05

Profit after Tax 22669.90 17591.91

Add: - Balance brought forward 44493.67 29765.52

- Profit available for appropriations 67163.57 47357.43

APPROPRIATIONS:

Less: - Transfer to General Reserve 1200.00 900.00

- Proposed Dividend 1981.50 1678.50

- Corporate Dividend Tax 329.10 285.26

- Balance Carried forward 63652.97 44493.67

Eps(Rs.)

- Basic 19.06 18.90

- Diluted 17.70 187.59

Your Company has achieved commencement of its largest fabric processing plant at Tarapur and other facilities during the FY 2010-11. The production is gearing up resulting into increase in topline by 8.63% and PAT by 5.41%

During the year under review, the export turnover has increased to Rs. 109465.00 lacs as compared to Rs. 100410.21 lacs of the previous year.

DIVIDEND:

Your Directors recommend a dividend of Rs. 1.50/- per Equity Share (15%) aggregating to Rs. 2310.60 lacs (including Corporate Dividend Tax) for the financial year 2010-11, subject to the approval of the members at the ensuing Annual General Meeting.

The dividend pay out as proposed is in accordance with the Company's policy to pay sustainable dividend linked to the long term performance, keeping in view the capital needs for the Company's growth plans and the intent to optimal financing of such plans through internal accruals.

SHARE CAPITAL:

During the year, the Authorised Share Capital of the Company has increased from Rs. 1200000000 consisting of 12,00,00,000 equity shares of Rs. 10 /- each to Rs. 1500000000 consisting of 15,00,00,000 equity shares of Rs. 10/-each.

Your Company has raised equity by -

(i) Issue of 1,60,00,000 Global Depository Receipts (GDR) representing equivalent number of underlying equity shares at the rate of US $ 6.60 per GDR (Rs. 292.69/- per GDR of face value of Rs. 10/-) to the persons resident outside India raising an aggregate of US $ 105.600 million ( Rs. 46,830.72 lacs). Pursuant to aforesaid, the Company's GDRs have been listed on the Singapore Stock Exchange with effect from October 27, 2010.

(ii) Issue and allotment of 1,00,00,000 Optionally Convertible Warrants, each warrant convertible into one equity share at the rate of Rs. 263/- per share (face value of Rs. 10/-) to B R Machine Tools Private Limited, an entity belonging to the promoter/ promoter group of the Company.

BUSINESS DEVLOPMENT:

1. Expansion of Yarn Dyeing, Weaving, Processing & Garmenting capacities:

During the year under review, your Company has successfully commenced the commercial production of its expansion project:

- Under Phase V consisting of manufacturing facilities of Processing, Knit Processing at Tarapur and setting up of balancing machineries for increasing efficiency of garmenting at Bangalore.

- Under Phase VA consisting of Yarn Dyeing at Tarapur.

The fabric weaving facilities are under erection and likely to be operational by the second quarter of FY 2011 -12

Facilities Contemplated increase Location Phase

Weaving 380 Looms Islampur V

Weaving 356 Looms Tarapur VA

The cost of the project is funded partly by equity capital already raised and the balance by way of term loans under Technology Upgradation Fund Scheme (TUFs) entitling the Company an interest subsidy of 5% and in addition capital subsidy of 10% on :he total investment in Processing & Garment Machineries.

2. Cotton Yam Spinning: (Backward Integration of Business):

During the year, your Company acquired 70.56% stake in Indore based Textile Company STI India Limited (STI), by acquiring the Equity Shares and Optionally Convertible Debentures alongwith underlying securities from the Overseas Private Investors for the total consideration of Rs. 70 crores. The said acquisition had triggered Open Offer to the existing shareholders of STI. Your Company has acquired 2,13,79,722 equity shares in the Open Offer raising the holding to 73.72% equity stake in STI. The equity shares of STI are listed on the BSE and the NSE.

STI has the business of manufacturing Cotton Yarn and Cotton knitted Fabrics and with a set up of 68,016 spindles and 16 knitting machines. The plant has been operating at high capacity utilization. This acquisition has helped the Company to complete the value chain from spinning to garmenting.

3. Setting up of Subsidiary in Bangladesh:

In FY 2009-10, your Company has set up a liaison office in Bangladesh to have added capabilities for more Garment business in International Market. To expand the operations further, during the current financial year your Company has incorporated it's wholly-owned subsidiary in the name of BRFL Bangladesh Private Limited with the paid - up capital of Tk 1,00,000 / -. (approxRs. 61, 240/-)

DIRECTORS:

Mr. A. Arumugham resigned as a Director of the Company with the effect from February 9, 2011. The Directors place on record their appreciation for the contributions made by Mr. A. Arumugham during his tenure.

Mr. M. M. Agrawal was appointed as an additional director during the year. Mr. M. M. Agrawal is B.E. & CAIIB - Part 1 and adviser to Axis Bank Ltd. At present he worked at various positions with AXIS Bank Ltd. and retired as Deputy Managing Director. He has earlier worked as Chief Manager - Credit in State Bank of Bikaner & Jaipur. His areas of interest are private equity, strategy, Corporate Governance, Corporate Finance & Corporate Social Responsibilities.

His experience would be of immense benefit to your Company and adds a valuable perspective in the Board of Directors. Mr. M. M. Agrawal holds the office till the date of the ensuing Annual General Meeting (AGM) of the Company. The Company has received a notice from a member of the Company proposing his candidature for appointment as a Director.

In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of Association, Mr. Janardan Agrawal, Mr. Naseer Ahmed and Mr. A. R. Mundra, Directors of the Company shall retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

CORPORATE GOVERNANCE:

A report on the Corporate Governance as stipulated under clause 49 of the Listing Agreement with the Stock Exchanges along with a certificate from the Statutory Auditors confirming compliance is set out in the annexure forming part of this Report along with a separate annexure giving the details of the Management Discussion and Analysis.

AUDITORS:

M/s V. K. Beswal & Associates, Chartered Accountants, having Firm Registration Number 101083W, the Statutory Auditors of the Company shall retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Necessary resolution in this regard is proposed at the forthcoming Annual General Meeting.

AUDITORS' REPORT:

There are no specific observation in the Auditors' Report requiring further comments under section 217 (3) of the Companies Act, 1956.

FIXED DEPOSITS:

The Company has not accepted or renewed any deposit from public during the year under review.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm the following:

1. In the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures.

2. They have selected such accounting policies in consultation with Statutory Auditors and other Experts and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year viz March 31, 2011 and of the Profit of the Company for that year.

3. They have taken proper and sufficient care to the best of their knowledge and ability 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.

4. They have prepared the attached Statement of Accounts for the year ended March 31, 2011 on a going concern basis.

PARTICULARS OF EMPLOYEES:

The information required under section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and the other particulars of the employees are set out in the annexure to the Directors' Report. Having regard to section 219 (1) (b) (iv) of the said Act, Annual Report excluding the aforesaid information is being sent to all the members of the Company and other entitled therto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN

EXCHANGE EARNINGS AND OUTGO;

The particulars as prescribed under section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, are set out in annexure to this report.

SUBSIDIARY COMPANIES:

(i) Bombay Rayon Holdings Limited (BRHL).

BRHL holds 100% equity of foreign subsidiaries BRFL Europe B.V., Netherlands & BRFL Italia S.r.L, Italy. BRHL has registered a net profit of Rs. 92.07 lacs for the year ended March 31, 2011.

(ii) DPJ Clothing Ltd, U.K.

DPJ Clothing Limited is engaged in business of wholesale marketing and distribution of clothing Products. The said subsidiary is assisting in getting many mid size retailers of Europe by providing the services either by direct import or by import and delivery basis. Your Company continued to reap benefits in expanding its business in Europe.

DPJ Clothing Ltd has registered a net profit of Rs. 199.61 lacs for the year ended March 31, 2011.

(iii) BRFL Europe B.V., Netherlands.

BRFL Europe B.V at Netherlands continued to play an important role for canvassing the business, services to customers on products and designs.

BRFL Europe B.V. has registered a loss of Rs. 49.95 lacs for the year ended March 31, 2011.

(iv) BRFL Italia S.r.l, Italy.

The Company owns the popular 'GURU' brand and is into the business of retailing of readymade garments as well as other accessories in Europe.

BRFL Italia S.r.l, Italy has registered a net loss of Rs. 4455.11 lacs for the year ended March 31, 2011.

(v) STI India Limited (STI).

After acquiring majority stake in STI, your Company has run the business for 4 months and for the year ended March 31, 2011, STI has registered a net profit of Rs. 1690.66 lacs ended March 31, 2011.

(vi) BRFL Bangladesh Private Limited (BRFL Bangladesh).

The Company has been incorporated but operations yet to commence.

In accordance with general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to aiy member of the Company who may be interested in obtaining the same.

The necessary disclosures are made in respect of the subsidiaries in this Annual Report alongwith the statement pursuant to Section 212 of the Companies Act, 1956.

As required by Section 212 of the Companies Act, 1956, the Statement of holding in subsidiaries and Consolidated Accounts pursuant to Accounting Standard (AS 21) issued by the Institute of Chartered Accountant of India, including the financial accounts of the subsidiary companies are forming part of the Annual Report. The Annual Accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies.

ACKNOWLEDGEMENTS:

Your Directors express sincere appreciations for the co-operation and support from our Bankers, Securities and Exchange Board of Indi a ("SEBI"), Stock Exchanges and other Regulatory authorities, State Government and Central Government and above all our Customer;. We look forward to receiving their continued support and encouragement.

The Board of Directors express its gratitude and record its sincere appreciation of the dedicated efforts and commitment of all the employees. The directors are thankful to the esteemed shareholders for their support and the confidence reposed in the Company.

For and on behalf of the Board

Place: Mumbai Janardan Agrawal

Date: June 04, 2011 Chairman

 
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