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Bombay Rayon Fashions Ltd.

BSE: 532678 Sector: Industrials
NSE: BRFL ISIN Code: INE589G01011
BSE LIVE 15:47 | 22 Sep 125.90 -2.25






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OPEN 128.25
52-Week high 170.00
52-Week low 118.35
Mkt Cap.(Rs cr) 3,754
Buy Price 0.00
Buy Qty 0.00
Sell Price 125.90
Sell Qty 75324.00
OPEN 128.25
CLOSE 128.15
52-Week high 170.00
52-Week low 118.35
Mkt Cap.(Rs cr) 3,754
Buy Price 0.00
Buy Qty 0.00
Sell Price 125.90
Sell Qty 75324.00

Bombay Rayon Fashions Ltd. (BRFL) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the Twenty Third Annual Report of theCompany together with the Audited Annual Accounts for the year ended 31stMarch 2016.


a. Financial Results

Financial and Operational Results of the Company for the year ended 31stMarch 2016 as compared to the previous financial year is summarized below:

(Rs. in crores)
Particulars 31-03-16 31-03-15
Revenue from Operations 4171.62 3532.67
Profit before Interest Depreciation & Amortization and Tax 812.14 602.88
Less: Interest 596.65 557.60
Profit before Depreciation & Amortization and Tax 215.49 45.28
Less: Depreciation & Amortization 161.23 166.33
Profit / (Loss) before Tax 54.26 (121.05)
Current Tax (12.22) _
Deferred Tax (4.93) 42.31
MAT Credit Entitlement 11.74 _
Profit / (Loss) after tax 48.85 (78.74)

b. Operations:

The total sales of the Company for the year under review were amounted to Rs. 4172.08Crores as against Rs. 3532.67 crores of previous financial year registering a growth of18%. The exports sales have increased to Rs. 661.43 Crores in comparison to Rs. 395.55Crores in 2014-15 the domestic sales was higher by 11.89% from Rs. 3137.49 Crores to Rs.3510.65 Crores. The Company has earned a profit of Rs. 48.85 Crores for the year 2015-16in comparison to the loss incurred of Rs. 78.74 Crores for the year 2014-15.

c. Report on Performance of Subsidiaries:

A report on the performance and financial position of each of the subsidiaries for theyear ended 31st March 2016 is provided as Annexure - I and forms part ofthis report.

None of the Company’s Subsidiaries ceased to be a subsidiary and no other companyhas become subsidiary of the Company during the year under review.

Additional information on Subsidiary companies: (i) Bombay Rayon Holdings Limited(BRHL)

BRHL holds 100% Equity of foreign subsidiaries BRFL Europe B.V. Netherlands & BRFLItalia S.r.l. ItalyBRFL Italia Licensee S.R.L

BRHL has registered a Net Profit of Rs. 2.31 crores for the year ended March 31 2016

(ii) DPJ Clothing Ltd U.K.

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

DPJ Clothing Ltd has registered loss of Rs. 0.51 crores for the year ended March 312016.

(iii) BRFL Europe B.V. Netherlands.

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

BRFL Europe B.V. has registered a loss of Rs.5.10 crores for the year ended March 312016.

(iv) BRFL Italia S.R.L Italy.

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

The retail operations being not viable in the current prevailing economic scenario aretotally closed and the brand ‘GURU’ is put on license model for various popularproducts.

BRFL Italia S.r.l Italy has registered a net loss of Rs. 10.50 crores for the yearended December 31 2015.

(v) BRFL Italia Licensee S.R.L

During the year under review the BRFL Italia Licensee S.R.L. has registered loss ofRs. 5.20 crore as on December 31 2015. BRHL had subscribed in the equity shares of BRFLItalia licensee S.R.L a company whom licence for brand ‘GURU’ has beentransferred.

(vi) STI India Limited (STI).

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

STI has incurred a net Profit of Rs. 24.00 crores for the year ended March 31 2016.

(vii) BRFL Bangladesh Private Limited (BRFL Bangladesh).

The Company has not taken up any operations yet.

d. Consolidated Accounts

The Consolidated Financial Statements of your Company for the financial year 2015-16are prepared in compliance with applicable provisions of the Companies Act 2013 read withthe Rules issued thereunder applicable Accounting Standards and the provisions of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 (hereinafter referredto as the "Listing Regulations"). The consolidated financial statements havebeen prepared on the basis of audited/provisional financial statements of your Companyits subsidiaries and as approved by the respective Board of Directors.

e. Dividend:

Considering the requirement for working capital after the operations of the Company itwas decided to retain the profit earned in the Company for the financial year ended March31 2016.

f. Transfer to reserves:

The Board of Directors has not recommended transfer of any amount of profit to reservesduring the year under review. Hence the entire amount of profit for the year under reviewhas been carried forward to the statement of profit and loss.


The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are adequate. During the year under review no material orserious observation has been received from the Internal Auditors of the Company forinefficiency or inadequacy of such controls.


Full Particulars of Loans & Guarantees Given Investments made and Securitiesprovided along with the purpose for which the loan or guarantee or security is proposed tobe utilized by the recipient are provided in the financial statement (Please refer to Note11121317 of the Financial Statement.)


All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm’slength basis. None of the transactions entered in to by the Company with related partywere material in nature exceeding the limit 10% of annual standalone/consolidated turnoverof the Company. The particulars of contracts or arrangements with related parties areforming part of notes to Accounts in this Annual Report.

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


During the year under review there were delays in payment of dues to bankers as wellas to statutory authorities


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

I. Vacation of Office

During the year none of the Directors or Key Managerial Personnel of the Companyvacated the office.

II. Appointments

During the year Mr. Narayanan Raja was appointed as a Nominee Director on the Board ofthe Company with effect from 15thFebruary 2016 as per the recommendation ofState Bank of India.

III. Directors Retiring by Rotation

Pursuant to the provisions of Section 152 of the Companies Act 2013 Mr. Aman Agrawaland Mr. Prashant Agrawal will retire by rotation at the ensuing Annual General Meeting ofthe Company and being eligible have offered themselves for re-appointment. In accordancewith the provisions of the Act none of the Independent Directors is liable to retire byrotation.

IV. Re-appointment of Directors

Pursuant to the provision of section 196 197198 and 203 of the Companies Act 2013.The term of appointment of whole time Directors. viz Mr. Aman Agrawal as Vice chairmanMr. Prashant Agrawal as the Managing Director Mr. A. R. Mundra Executive Director-Finance Ms. Prachi Deshpande Director-Secretarial & Corporate Affairs expired on31st May 2016. The Board recommends for their re-appointment for further tenure of threeyears commencing from 1st June 2016.

b. Declaration by Independent Directors:

The Company has received and taken on record the declarations received from all theIndependent Directors of the Company in accordance to Section 149(6) of the Companies Act2013 confirming their independence visa-vis the Company.

The Company is in the process of appointing one more Independent Director for complyingwith Regulation 17(1) of listing regulation. The Nomination and Remuneration Committee ofthe Company is in the process of identifying a suitable person having requisiteprofessional qualification knowledge and experience who fulfills the criteria asspecified under Listing obligation and Disclosure Requriements regulation 2015 as well assection 149(6) read with Schedule IV of the Companies Act 2013.


a. Board Meetings: Six meetings of Board of Directors were convened during thefinancial year under review i.e. on 22nd May 2015 14th August2015 29th September2015 10th November2015 15thFebruary2016 and 30th March 2016 b. Director’s Responsibility Statement:In terms of Section 134(5) of the Companies Act 2013 in relation to the audited AnnualFinancial Statements of the Company for the year ended 31st March 2016 theBoard of Directors hereby confirms that: a. in the preparation of the annual accounts forthe year ended 31stMarch 2016 the applicable accounting standards have beenfollowed along with proper explanation relating to material departures;

b. such accounting policies have been selected and applied consistently and theDirectors made judgments and estimates that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at 31st March2016 and of the Profit of the Company for that year;

c. proper and sufficient care was taken for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of theCompany 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 andthat such internal financial controls are adequate and were operating effectively;

f. proper systems have been devised to ensure compliance with the provisions of allapplicable 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 Section177 of the Companies Act 2013 read with Securities Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015.

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

1. Mr. A. Arumugham Chairman Independent Director

2. Mr. Suresh Vishwasrao Independent Director

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

4. Mr. John Mathew Independent Director

The scope and terms of reference of the Audit Committee have been amended in accordancewith the Act and with Securities Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015. During the year under review the Board ofDirectors 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 ofDirectors 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 AhmedChairman Independent Director

2. Mr. Suresh Vishwasrao Independent Director

3. Mr. A. Arumugham Independent Director

4. Mr. John Mathew Independent Director

The Board on recommendation of the Nomination and Remuneration Committee has approveda policy setting out the criteria for review of responsibilities of the Directors positiveattributes independence of a Director and policy relating to remuneration for DirectorsKey Managerial Personnel and other employees in accordance with the provisions of Section178 of the Act.

(III) Stakeholders Relationship Committee:

The Stakeholder Relationship Committee of Directors was constituted pursuant to theprovisions 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’ RelationshipCommittee.

d. Policies:

(I) Vigil Mechanism Policy:

In compliance of the requirements of section 177 of the companies Act 2013 SecuritiesExchange Board of India (Listing Obligations And Disclosure Requirements) Regulations2015 and as measure of good Corporate Governance practice the Board has formulated aVigil Mechanism Policy. The policy comprehensively provides an opportunity for anyemployee/ Director of the Company to raise any issue concerning breaches accountingpolicies or any act resulting in financial or reputation loss and misuse of office orsuspected 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 itsPowers) Rules 2014 framed "Vigil Mechanism Policy" for Directors and Employeesof the Company to provide a mechanism which ensures adequate safeguards to employees andDirectors from any victimization on raising of concerns of any violations of legal orregulatory requirements incorrect or misrepresentation of any financial statements andreports 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 tothe Chairman of the Audit Committee.

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

(II) Risk Management Policy:

The Board of Directors of the Company has designed Risk Management Policy andGuidelines to avoid events situations or circumstances which may lead to negativeconsequences on the Company’s businesses and define a structured approach to manageuncertainty and to make use of these in their decision making pertaining to all businessdivisions and corporate functions. Key business risks and their mitigation are consideredin 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 SocialResponsibility Policy) Rules 2014 the Board of Directors has constituted a CorporateSocial 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 beaccessed on the web-site of the Company i.e. As there is net averageloss incurred by the Company during the three preceding financial years the company hasnot spent any amount towards Corporate Social Responsibility activities.


As per requirements of provisions of SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015 the Company has adopted the following policies:

• Policy for Preservation of Documents. (Regulation 9)

• Policy for determination and Disclosure of material Events. (Regulation 30 (4)(ii))

• Archival Policy ( Regulation 30 (8)

• Policy on Material Related Party Transactions. (Regulation 23)

e. Annual Evaluation of Directors Committee and Board:

Independent Directors had reviewed the performance of the Chairman and ExecutiveDirectors considering the performance of the Company during the financial year 2015-16.The Board of Directors in their meeting has reviewed the contribution made by eachIndependent Director by way of their timely advice for better corporate governance andcompliances under the provisions of the laws as applicable to the Company. There is nochange in the remuneration payable to the Directors for next financial year 2016-17. Nocommission is proposed to be paid to the Chairman or any of the Directors of the Companyfor financial year 2015-16.

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

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

g. Internal Control Systems:

Adequate internal control systems commensurate with the nature of the Company’sbusiness and size and complexity of its operations are in place has been operatingsatisfactorily. Internal control systems comprising of policies and procedures aredesigned to ensure reliability of financial reporting timely feedback on achievement ofoperational and strategic goals compliance with policies procedure applicable laws andregulations and that all assets and resources are acquired economically used efficientlyand adequately protected.

8. Particulars of Employees and Related Disclosures:

Pursuant to the Provisions of section 197(12) of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014the requisite details are annexed herewith vide Annexure II and are also availableat the Registered Office of Company for inspection during its working hours and any memberinterested in obtaining such information may directly write to the Company Secretary ofCompany and the same shall be provided on such request.

9. Preferential allotment:

The shareholders of the Company at their Extra-ordinary General Meeting held on May 92016 have approved the issue and allotment of 54470553 fully paid-up equity shares ofthe Company having face value of Rs. 10/- each at a price of Rs. 165.88 per sharepursuant to the decision of CDR EG vide their letter dated 3rd February 2016to the Lenders of the Company by converting the Funded Interest Term Loan (FITL) andWorking Capital Term Loan (WCTL) aggregating to Rs. 9035576868 in accordance with theSection 62(1)(c) and other applicable provisions of the Companies Act 2013 and rules madethere under and provisions of Chapter VII- "Preferential issue" of the SEBI(Issue of Capital and Disclosure Requirements) Regulation 2009

Allotments of shares pursuant to above referred Preferential issue were made infollowing three tranches:

1. June 15 2016 for allotment of 46677611 equity shares;

2. June 16 2016 for allotment of 560042 equity shares;

3. June 27 2016 for allotment of 1164618 equity shares.

Post allotment the public shareholding of the Company has now been increased to 32.30%of the total paid-up share capital in compliance with the Regulation 38 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 which prescribesminimum public shareholding.


a. Statutory Auditors:

The observations made by the Statutory Auditors in their Report read with the relevantnotes as given in the Notes to Accounts for the year ended March 31 2016 areself-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 qualificationreservation 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 CharteredAccountants Mumbai (Firm Registration Number: 101083W)the Statutory Auditors of theCompany hold office upto the conclusion of the ensuing Annual General Meeting. Theconsent of the Auditors along with certificate under Section 139 of the Act have beenobtained from the Auditors to the effect that their appointment if made shall be inaccordance with the prescribed conditions and that they are eligible to hold the office ofAuditors of the Company. The Board recommends the appointment of M/s. V.K. Beswal &Associates Chartered Accountants Mumbai (Firm Registration Number: 101083W) as theStatutory Auditors of the Company for the financial year 2016-17.

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

b. Secretarial Audit Report for the year ended 31stMarch 2016:

The Board had appointed Rathi & Associates Company Secretaries as Secretarialauditors for the financial year 2015-16. Secretarial Audit Report issued by Rathi &Associates in form MR-3 for the FY 2015-16 forms part of this report and marked as AnnexureIII.

With reference to observation about:-

(i) As regards the remuneration paid to Vice Chairman and Managing Director thecompany is in the process of filing of an application with Central Government for waiverof recovery of excess remuneration.

(ii) As a result of allotment of 48402271 equity shares pursuant to the provisions ofChapter VII of ICDR 2009 in the month of June 2016 the public share has increased to32.3% by which compliance with require to minimum public shareholding has been fulfilled.

(iii) The Company is in the process of appointing one more Independent Director forcomplying with Regulation 17(1) of listing regulation.

c. Cost Auditors:

Pursuant to the provisions of Section 148 of the Companies Act 2013 read withNotifications/Circulars issued by the Ministry of Corporate Affairs from time to time asper the recommendation of the Audit Committee the Board of Directors at their meetingheld on 5thAugust 2016 appointed M/s. K. S. Kamalakara & Company CostAccountants as the Cost Auditors of the Company for the financial year 2016-17 at annualaudit fee of Rs. 500000/-. Subject to approval of the shareholder in ensuing AnnualGeneral Meeting.

d. Internal Audit and Control:

M/s Venkatram & Co. Firm Registration No. 004656S Chartered Accountants InternalAuditors of the Company has carried out internal audit and the findings of the InternalAuditors in their reports are discussed regularly in the meetings of the Audit Committeeand corrective actions are taken as per the directions of the Audit Committee members.


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 ofthe Annual Return for the financial year ended 31st March 2016 made under theprovisions of Section 92(3) of the Act is attached as Annexure IV which forms partof this Report.

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

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

c. Corporate Governance and Management Discussion & Analysis Reports:

The Company is committed to maintain the high standards of Corporate Governance andadheres to its requisites set out by the respective authorities. The report on CorporateGovernance as stipulated under the Securities Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015. is annexed vide Annexure VI andforms 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) confirmingcompliance with the conditions of Corporate Governance as stipulated in Chapter IV ofSecurities Exchange Board of India (Listing Obligations And Disclosure Requirements)Regulations2015) the said company with stock exchanges Annexure VI(A) and formsan integral part of this Annual Report.

Certificate issued by Managing Director and Executive Director of Company with regardto certification on Audited Financial Statement of the Company for financial year 2015-16is also annexed herewith vide Annexure VI (B) and forms an integral part of thisAnnual Report.

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

Management Discussion and Analysis Report for the year under review as requiredpursuant to the provisions of Regulation 34 (Schedule V (B) of SEBI (Listing obligationand disclosure requirements) Regulations2015 is annexed herewith vide Annexure VIIand forms part of this Annual Report.

d. General Disclosures:

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions pertaining to these matters during F.Y.2015-16:

a. Details relating to acceptance of deposits covered under Chapter V of the CompaniesAct 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 Companyunder any scheme.

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

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

Your Directors further state that:

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

g. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company’s operations in future.

h. Except as disclosed elsewhere in this report no material changes and commitmentswhich could affect the Company’s financial position have occurred between the end ofthe financial year of the Company and date of this Annual Report.

i. There was no change in the nature of business of company during F.Y. 2015-16.

j. Pursuant to the provisions of Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 no case pertaining to sexual harassment at workplacehas been reported to company during F.Y. 2015-16.


Statements in the directors’ and management discussion and analysis describing thecompany’s objectives projections estimates expectations or predication may be"forward-looking statements’ within the meaning of applicable securities lawsand regulations actual results could differ materially for those expressed or impliedimportant factors that could make difference to the company’s operations include rawmaterial availability and its prices cyclical demand and pricing in the company’sprinciple markets changes in government regulations tax regimes economic developmentswithin India and the countries in which the company conducts business and other ancillaryfactors.


Your Directors take this opportunity to thank the customers shareholders suppliersbankers business partners/associates financial institutions and Central and StateGovernments for their consistent support and encouragement to the Company.

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

For and on behalf of the Board of Directors

Janardhan Agrawal


DIN: 00019497

Place: Mumbai

Date: 5th August 2016

Registered Office Address:

D 1stFloor Oberoi Garden Estates Chandivali Farms

Chandivali Andheri (East) Mumbai - 400072


TEL No:+91 22 39858800/61068800

Fax No : 39858700