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Notes to Accounts of Bombay Rayon Fashions Ltd.

Mar 31, 2015

Note 1: 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%.

Note 2: Corporate debt restructuring (CDR):

1 During the FY 2013-14, the Company's proposal for restructuring of its debts was approved by Corporate Debt Restructuring Cell ("CDR Cell") vide Letter of Approval (LOA) dated September 27, 2013. The cut off date (COD) for implementation of CDR was 1st April, 2013. The Company has executed Master Restructuring Agreement ('MRA') with CDR Lenders on September 30, 2013. The details of the Restructuring package as approved by CDR Cell are as under :- a) 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)

b) The promoters were required to bring contribution equivalent to 25% of the sacrifice amount by lenders. Accordingly promoters have brought in an amount of R 96.66 crores as unsecured loan

c) Lenders with the approval of CDR EG shall have the right to recompense the reliefs/ sacrifices/ waivers extended by respective CDR Lenders as per the CDR guidelines. The recompense payable is contingent on various factors including improved performance of the Company and many other conditions, the outcome of which is currently materially uncertain. Tentative recompense amount comes to R 526.98 crores.

Note 3: Promoters and Subsidiary companies have provided personal/corporate guarantee & collaterals for securing the term loans and working capital loan facilities availed by the company restricted upto the realizable value of assets provided as security.

Note - 4 : Contingent Liabilities Not Provided For :

(Rs. in Crores)

As on As on Particulars March 31, 2015 March 31, 2014

a) Bills Discounted with Banks under Letter of credits or otherwise. 107.53 67.10

b) Bank Guarantee 2.97 3.34

c) Demand outstanding related to Income tax 2.29 4.78

Note - 5 : Note on CSR

Pursuant to section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 including further amendments thereto, a company has to spend, in every financial year, atleast 2% of the average net profits of the company made during the last three years immediately preceding financial year, as per the objects mentioned in the Rules.

The company has suffered a net loss for the current year and having no average net profits during the immediately preceding last three financial years, the provisions of section 135 of the Companies Act, 2013 are not applicable.

Note - 6 : Note on Managerial Remuneration

In view of net losses incurred during the year the managerial remuneration paid exceeds the limits as mentioned under section 197 of the Companies Act, 2013 read with Schedule V. The company is in the process of obtaining the necessary approvals for the same.

Note 7: Previous year figures have been re-grouped / reclassified wherever/necessary to make them comparable with current year.


Mar 31, 2014

Note 1: In the first quarter of the financial year, an extensive exercise of review of inventory was undertaken by the management to put its present realizable value after completion of all expansion projects and Rs.258.36 crores was written off as valuation difference under extraordinary item.

Note 2: In the first quarter of the financial year, the loss on foreign exchange fluctuation on outstanding working capital limits under foreign currency due to exchange rate difference of Rs.90.92 crores was accounted for under extra-ordinary item.

Note 3: In the month of March, 2014, the Company had declared lock –out at Mill Division located at Dodaballapur, Bengaluru as a part of restructuring exercise. The operations at the said unit were re-started in the month of May, 2014.

Note 4: To comply with the regulations of Securities and Exchange Board of India related to Minimum Public Shareholding (MPS) the company and the promoters of the company have initiated the steps to increase the public shareholding to 25%.

Note 5: Corporate debt restructuring (CDR):

1 During the year, the Company''s proposal for restructuring of its debts was approved by Corporate Debt Restructuring Cell ("CDR Cell") vide Letter of Approval (LOA) dated September 27, 2013. The cut off date (COD) for implementation of CDR was 1st April, 2013. The Company has executed Master Restructuring Agreement (''MRA'') with CDR Lenders on September 30, 2013. The details of the Restructuring package as approved by CDR Cell are as under :–

a) 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)

b) The promoters to bring contribution equivalent to 25% of the sacrifice amount by lenders. Accordingly promoters have brought in an amount of v 89.19 crores as unsecured loan

c) Lenders with the approval of CDR EG shall have the right to recompense the reliefs/ sacrifices/ waivers extended by respective CDR Lenders as per the CDR guidelines. The recompense payable is contingent on various factors including improved performance of the Company and many other conditions, the outcome of which is currently materially uncertain. Tentative recompense amount comes to v 526.98 crores.

Note 6: As per Accounting Standard 15 "Employee Benefits", the disclosure of Employee benefits as defined in the Accounting Standard are given below:

Note 34: Related Party Disclosure

Sr Name of Related Party Relationship

a) STI India Ltd. Subsidiary Company

b) DPJ Clothing Ltd. Subsidiary Company

c) Bombay Rayon Holdings Ltd. Subsidiary Company

d) BRFL Bangladesh Pvt. Ltd. Subsidiary Company

e) BRFL Europe B.V. Subsidiary Company

f) BRFL Italia S.R.L. Subsidiary Company

a) Latur Integrated Textile Park Pvt. Ltd. Other Related Parties

b) Islampur Integrated Textile Park Pvt. Ltd. Other Related Parties

c) STI Sanoh India Limited Other Related Parties

d) Kagal Industrial Textile Technology Park Pvt. Ltd. Other Related Parties

e) Reynold Shirting Ltd. Other Related Parties

f) Bombay Rayon Clothing Ltd. Other Related Parties

g) Bestsellers Retail India Pvt. Ltd. Other Related Parties

h) Best United Lifestyles Pvt. Ltd. Other Related Parties

i) Best United India Comforts Pvt. Ltd. Other Related Parties

j) Bestseller Wholesale India Pvt. Ltd. Other Related Parties

k) B. R. Machine Tools Pvt. Ltd. Other Related Parties

l) Ashwell Holding Company Pvt. Ltd. Other Related Parties

m) Arihant Organics Pvt. Ltd Other Related Parties

n) Clinvent Real Estates Pvt Ltd Other Related Parties

a) Mr. Janardan Agarwal, Non Executive Chairman Key Managerial Personnel

b) Mr. Aman Agarwal, Vice Chairman Key Managerial Personnel

c) Mr. Prashant Agarwal, Managing Director Key Managerial Personnel

d) Mr. Uday Mogre, Executive Director –Corporate (upto 31/12/2013) Key Managerial Personnel

e) Mr. A.R. Mundra, Executive Director –Finance Key Managerial Personnel

a) Mrs. Bimla Devi Agarwal Relative of KMP

b) Mrs. Vinita Agarwal Relative of KMP



Note 7: Promoters and Subsidiary companies have provided personal/corporate guarantee & collaterals for securing the term loans and working capital loan facilities availed by the company restricted upto the realizable value of assets provided as security.

Note - 8 : Contingent Liabilities Not Provided For : (Rs. in Crores) Particulars As on As on March 31,2014 March,2013

a) Bills Discounted with Banks under Letter of credit or otherwise. 67.10 7.14

b) Bank Guarantee 3.34 2.82

c) Disputed demand outstanding related to Income tax 4.78 60.02

(The matters are pending with Income Tax Authorities)

Note 9: Previous year figures have been re-grouped/reclassified wherever/necessary to make them comparable with current year.


Mar 31, 2013

Note 1:

Promoters and Subsidiary company provided personal/corporate guarantee & collaterals to the extent ot Rs. 1557.49 Crores for securing the Term Loan and working capital loan facilities obtained by the company from banks.

Note 2 : During the year Rs. 359.10 Crores being Trial Run Expenses for the company''s projects completed but as trials, were capitalized.

Note - 3 : Contingent Liabilities Not Provided For:

(Rs. in Crores)

As on As on Particulars March 31, 2013 March 31, 2012

(i) BHIs Discounted wfth Banks under Letter of credits or otherwise. 7.14 9.75

(ii) Bank Guarantee 2.82 7.76

(iii) Disputed demand outstanding related to Income tax

(The matters are pending with Income Tax Authorities) 60.02 1.97

Note 4: Previous year figures have been re-grouped/reclassified wherever/necessary to make them comparable with current year.


Mar 31, 2012

Note 1: Contingent Liabilities not provided for:

(Amount Rs. In Crores) As at As at 31.03.2012 31.03.2011

(i) Bills Discounted with Banks under Letter of credits or otherwise. 9.75 51.38

(ii) Bank Guarantee 7.76 3.93

(iii) Disputed demand outstanding related to Income tax 1.97 4.96 (The matters are pending with Income Tax Authorities)

Note 2: Previous year figures have been re-grouped / reclassified wherever necessary to make them comparable in accordance with revised schedule VI.


Mar 31, 2011

(Rs. in Lacs)

(1) Contingent Liabilities not provided for: 31.03.2011 31.03.2010

(a) Bills Discounted with Banks under Letter of Credits or otherwise. 5138.21 12202.99

(b) Bank Guarantees 392.71 -

(6) During the year, there was an increase in the share capital and reserves due to Issue & allotment of 1,60,00,000 Global Depository Receipts (GDRs) representing underlying equivalent number of equity shares to the persons resident outside India for US $ 6.60 per GDR (Rs. 292.69/- per GDR of face value of Rs. 10/- each) aggregating to Rs. 46830.72 lacs.

(2) The Company had alloted 1,00,00,000 warrants on October 4, 2010 at Rs. 263 per warrant to B.R. Machine Tools Pvt Ltd. a promoter group company on receipt of 25% upfront money as per the provisions of SEBI Guidelines for Preferential Allotment. The aforesaid warrants at the option of the allottee is convertible into equivalent number of equity shares of the face value of Rs. 10/- each within a period of 18 months from the date of allotment.

(3) In accordance with the provisions of Section 78 (2)(b) and (c) of the Companies Act, 1956, Securities Premium Account has been utilised to write off expenses for share issue expenses(including expenses for increase in Authorised Capital) of Rs.. 208 lacs in respect of issue and allotment of GDRs.

(4) The Company has issued 42,00,000 equity shares of Rs. 10/- each fully paid up at a premium of Rs. 183/- per share on exercise of option for conversion of warrants to Reynold Shirting Ltd., after the balance sheet date. The Company has also considered the above shares for the purpose of proposed dividend.

(5) During the year,the Company has acquired 86,47,336 equity shares and 32,180,000 Optionally Convertible Debentures (OCDs) of the Company along with all the underlying security including the 1,18,14,114 equity shares held by the IDBI Trusteesh p Services Ltd from the Private Equity shareholders and OCD holders of Series 1, 2, 3 & 4 of Indore based Textile Company STI India Limited (STI), a Company listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited. Consequention acquisition,Open offer pursuant to SEBI (Acquisition and Takeover) Regulation, 1997 was triggered and at present the Compary is holding 2,13,79,722 constituting 73.72% of the equity capital of STI thereby becoming the Holding Company of STI.

(6) The Employees'Gratuity Fund Scheme, which is a defined plan, is managed by the Trust maintained with Life Insurance Corporation of India (LIC) and State Bank of India. The present value of obligation is determined based on actuarial valuation using Projected Unit Credit Method, which is recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

(7) Based on the information available with the Company, there are no suppliers who are registered as micro or small enterprises under The Micro, Small and Medium Enterprises Development Act, 2006, as at March 31, 2011.

(8) Related Party Disclosure

Name of the Related Party

(A) Subsidiary Companies

BRFL Europe B.V.

DPJ Clothing Ltd.

Bombay Rayon Holdings Ltd.

BRFL Italia S.r.l.

BRFL Bangladesh Pvt. Ltd.

STI India Ltd. (w.e.f. October 27, 2010)

(B) Other related parties

(a) Reynold Shirting Ltd.

(b) Bombay Rayon Clothing Ltd.

(c) Bestsellers Retail India Pvt. Ltd.

(d) Best United Lifestyles Pvt. Ltd.

(e) Best United India Comforts Pvt. Ltd.

(f) Bestseller Wholesale India Pvt. Ltd.

(g) B. R. Machine Tools Pvt. Ltd.

(C) Key Managerial Personnel

Name of Personnel Designation

(a) Mr. Janardan Agrawal Non Executive Chairman

(b) Mr. Aman Agrawal Vice Chairman

(c) Mr. Prashant Agrawal Managing Director

(d) Mr. Uday C. Mogre Executive Director -Corporate

(e) Mr. A. R. Mundra Executive Director -Finance

(9) Segmental Reporting

The Company is mainly engaged in the business of manufacturing of textiles consisting of fabrics and garments. Considering the nature of business and financial reporting of the Company, the Company has only one segment viz; textile as reportable segment. The Company operates in Local & Export segments Geographically. The sales for both is separately given, but due to the nature of business the assets/liabilities and expenses for these activities can not be bifurcated separately.

The Company is also engaged in Power generation through Wind Mills and manufacturing of Buttons, however the same are not considered as reportable segment in accordance with AS-17.

(10) The disclosures mandated by paragraphs 3(i)(a), 3(ii)(a), 3(ii)(b) and 3(ii)(d) of Part II, Schedule VI to the Companies Act, 1956 have not been provided in view of applicability of exemption vide General Notification No. S.O. 301(E) dated February 8, 2011 issued under Section 211(3) of the Companies Act, 1956 by The Ministry of Corporate Affairs, Government of India.

(11) Previous year figures have been regrouped/reclassified wherever necessary to make them comparable.

 
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