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The Directors have pleasure in presenting the Twenty Fifth Annual Report of the Company together with the Audited Annual Accounts for the year ended 31st March, 2018.
1. FINANCIAL AND OPERATIONAL PERFORMANCE:
a. Financial Results
Financial and Operational Results of the Company for the year ended 31st March, 2018 as compared to the previous financial year, is summarized below:
(Rs. in crores)
Standalone For the Financial Year Ended
Revenue from Operations
Profit before Interest, Depreciation and Tax
Profit/(Loss) before Depreciation and Tax
Less: Depreciation and Amortization
Profit / (Loss) before Tax
Profit / (Loss) after tax
The total sales of the Company for the year under review were Rs. 3088.36 crores as compared to Rs. 3876.96 Crores in previous financial year lower by approx. 20%. The reduction in sales is due to general market conditions and stress on working capital. The net loss after tax for the year under review was Rs.282.07 crores, compared to loss of Rs. 151.23 crores of previous financial year.
c. Report on Performance of Subsidiaries:
A report on the performance and financial position of each of the subsidiaries are provided as Annexure - I and forms part of this report.
Additional information on Subsidiary companies:
i. Bombay Rayon Holdings Limited (BRHL)
BRHL holds 100% Equity of foreign subsidiaries i.e. BRFL Italia S.R.L. &, BRFL Italia Licensee S.R.L.
BRHL registered a net Profit of Rs. 3.77 crores for the year ended March 31, 2018.
ii. 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 manufactured yarn is used for captive consumption and some part is sold in the open market.
STI registered a net Loss of Rs. 7.33 crores for the year ended March 31, 2018.
iii. DPJ Clothing Ltd, U.K.
DPJ Clothing Limited is engaged in business of wholesale marketing and distribution of clothing products. However, at present, there are no operations being conducted.
iv. BRFL Italia S.R.L, Italy.
The Company owns the brand ‘GURU’ for readymade garments as well as for other accessories.
The retail operations, being not viable in the current prevailing economic scenario, are totally closed and the company is in process of rearrangements.
v. BRFL Italia Licensee S.R.L, Italy.
BRFL Italia licensee S.R.L is presently having the licenses for brand ‘GURU.’ The operations are presently suspended.
vi. BRFL Bangladesh Private Limited.
The Company has not commenced its operations.
d. Consolidated Accounts
The Consolidated Financial Statements of your Company for the financial year 2017-18 have been prepared in compliance with applicable provisions of the Companies Act, 2013 read with the Rules issued thereunder, applicable Accounting Standards and the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as the “Listing Regulations”). The consolidated financial statements have been prepared on the basis of audited financial statements of your Company and audited and/or provisional financial statements of its subsidiaries, as approved by the Board of Directors of the said Companies. The Consolidated Financial Statement does not include the financials of BRFL Italia S.r.l, BRFL Italia Licensee S.r.l, DPJ Clothing Limited & BRFL Bangladesh Pvt Limited as the financials statements of these companies are not available due to suspension of operations.
In view of the losses incurred during the year under review, the Board of Directors have not recommended any dividend for the financial year ended March 31, 2018.
f. Transfer to reserve:
In view of loss incurred during the year under review, the Board of Directors has not recommended any amount to be transferred to Reserves.
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. PARTICULARS OF LOANS, GUARANTEES,
INVESTMENTS AND SECURITIES:
Full Particulars of Loans & Guarantees Given, Investments made and Securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the financial statement (Please refer to Notes of the Standalone Financial Statements.)
4. PARTICULARS OF CONTRACTS/ ARRANGEMENTS/ TRANSACTIONS WITH RELATED PARTIES:
All contracts / arrangements / transactions, falling within the purview of Section 188 of the Companies Act, 2013, entered into 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 into 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 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.
5. 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.
6. 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
During the year, there were no changes in the Directors or Key Managerial Personnel of the Company.
After the end of the financial year, Mr. Janardhan Agrawal, Chairman, due to his age & health factors, has expressed his inability to continue as the Chairman & Director in the Company and has tendered his resignation w.e.f 19th April 2018. Mr. Janardhan Agrawal was the founder of Bombay Rayon and has steered the growth of the Company. The Board of Directors placed on record, the fact that Mr. Janardhan Agrawal the founder of the Bombay Rayon has remained a guiding strength to make the company as a force to reckon by his leadership in the textile industry of India and expressed its gratitude and appreciation for his contribution and guidance in building up the Organisation.
Consequent to the resignation of Mr. Janardhan Agrawal, Mr. Aman Agrawal has been appointed as the Chairman of the Company by the Board of Directors in its meeting held on 29th May, 2018.
II. Directors Retiring by Rotation
Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Aman Agrawal and Mr. Prashant Agrawal Directors shall 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.
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.
7. DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES:
a. Board Meetings:
Six meetings of Board of Directors were convened during the financial year under review details of which are furnished in the Corporate Governance report forming part of Annual report.
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 financial year ended March 31, 2018, the Board of Directors hereby confirms that:
a. in the preparation of the annual accounts for the financial year ended March 31, 2018, the applicable accounting standards have 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 March 31, 2018, 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.
(I) Audit Committee:
The Audit Committee of Directors was constituted pursuant to the provisions of Section 177 of the Companies Act, 2013 read with Regulation 18 of the Listing Regulations.
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. John Mathew, Independent Director
4. Mr. A. R. Mundra, Executive Director- Finance
The scope and terms of reference of the Audit Committee has been amended in accordance with the Act and with Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. 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 Companies Act, 2013 and Regulations 19 of the Listing Regulations.
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
The Board on recommendation of the Nomination and Remuneration Committee has approved the 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 Companies Act, 2013.
(III) Stakeholders’ Relationship Committee:
The Stakeholders Relationship Committee of Directors was constituted pursuant to the provisions of Section 178 of the Companies Act, 2013 and Regulation 20 of the Listing Regulations.
The composition of the committee is as under:
1. Mr. Janardhan Agrawal : Chairman
2. Mr. Prashant Agrawal : Member
3. Mr. A. R. Mundra : Member
Stakeholders’ Relationship committee was reconstituted by the Board of Directors in its meeting held on 29th May 2018:
1. Mr. Suresh Vishwasrao: Chairman
2. Mr. Prashant Agrawal: Member
3. Mr. A.R. Mundra: Member
4. Ms. Prachi Deshpande: Member
The Company Secretary acts as the Secretary of the Stakeholders’ Relationship Committee
(I) Vigil Mechanism Policy:
In compliance with the requirements of section 177 of the companies Act, 2013 & Regulation 22 of Listing Regulations 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 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. The Board has constituted Risk Management Committee of following Directors
1. Mr. Aman Agrawal: Chairman
2. Mr. Prashant Agrawal: Member
3. Mr. A R Mundra: Member
(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 - Chairman
2. Mr. A. Arumugham - Member
3. Mr. A. R. Mundra - Member
The Company’s Corporate Social Responsibility Policy is available on the web-site of the Company i.e. www.bombayrayon.com .
However, the company do not incur any expenditure towards CSR activities during the year under review the Company has incurred losses during three preceding financial years.
e. Annual Evaluation of Directors, Committee and Board:
Independent Directors had done the annual evaluation of the Directors considering the business operations the Company for the financial year 2017-18. The Board of Directors in their meeting has reviewed the contribution made by each Independent Director by way of their timely advice for better corporate governance and compliances under the provisions of the laws as applicable to the Company. No commission is proposed to be paid to the Chairman or any of the Directors of the Company for financial year 2017-18.
f. Details with respect to the Programme for Familiarisation of Independent Directors:*
Independent Directors were made familiar with situation of the company time to time in duly held Board Meetings during the FY 2017-18. The policy of the Company on Familiarisation of Independent Director is put up on the website of the Company i.e. www.bombayrayon.com.
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 and have 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.
8. 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.
The Company has no employee coming under the preview of requirement as mentioned in Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company. In terms of Section 136 (1) of the Companies Act, 2013, the report and the Accounts are being sent to the members. Any member interested in obtaining copy of the same any write to the Company Secretary at the Registered Office of the Company.
9. CHANGE IN CAPITAL:
During the year the company has allotted 131482286 equity shares of Rs.10 each & 4101824 Optionally Convertible Debentures (OCDs) of Rs.1000/ each to the lenders of the Company pursuant to Implementation of Corporate Debt restructuring or Scheme for Sustainable Structuring of Stresses Assets (S4A).
10. AUDITORS AND REPORTS:
a. Statutory Auditors:
The shareholders of the company in the Annual General Meeting held on 26th September, 2017 has appointed PR Agrawal & Awasthi, Chartered Accountants (ICAI Firm Registration Number 117940 W) as the statutory auditors of the Company for the period of 5 years i.e. for the period from FY 2017-18 till FY 2021-22.
The Report of the Statutory Auditors on the financial statement for the year ended 31st March 2018 does not contain any qualification.
b. Secretarial Audit Report for the year ended 31stMarch, 2018
The Board had appointed M/s. Rathi & Associates, Company Secretaries as Secretarial auditors for the financial year 2017-18. The Secretarial Audit Report issued by Rathi & Associates in Form MR-3 forms part of this report and has been marked as Annexure III.
The Report of the Secretarial Auditors on the financial statement for the year ended 31st March 2018 does not contain any qualification
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 held on 29 May, 2018, appointed M/s. K. S. Kamalakara & Company, Cost Accountants as the Cost Auditors of the Company for the financial year 2018-19 at an audit fee of Rs. 2,00,000/ subject to approval of the shareholder in ensuing Annual General Meeting.
d. Internal Audit and Control:
M/s. Venkatram & Co., Firm Registration No. 004656S, Chartered Accountants, Internal Auditors of the Company has carried out internal audit and the findings of the Internal Auditors in their reports are discussed regularly in the meetings of the Audit Committee and corrective actions are taken as per the directions of the Audit Committee members.
11. FRAUD REPORTING:
There have been no instances of fraud reported by the Statutory Auditors under Section 143(12) of the Act and Rules framed thereunder either to the Company or to the Central Government.
12. 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, 2018 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 Governance 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 Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed vide Annexure VI and forms an integral part of this Annual Report.
On 19th April, 2018, Mr. Janardhan Agrawal, Chairman and Director of the Company has tendered his resignation and further Mr. Aman Agrawal was appointed as the Chairman of the Company. Consequent to that the strength of the Board has reduced to 10 and is now comprised of requisite number of Directors and Independent Directors.
Requisite certificate from the Auditors of the Company M/s. P R Agrawal & Awasthi , Chartered Accountants, (ICAI Firm Registration Number 117940 W), confirming compliance with the conditions of Corporate Governance as stipulated in Chapter IV of Securities Exchange Board of India (Listing Obligations And Disclosure Requirements) Regulations, 2015 by the Company is attached as Annexure VI (A) and forms an integral part of this Annual Report.
The Company has 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 the Company related to the compliance of aforesaid Code of Conduct is also attached herewith vide Annexure VI(b) and forms an integral part of this Annual Report.
Certificate issued by Managing Director and Executive Director-Finance of Company with regard to certification on Audited Financial Statement of the Company for financial year 2017-18 is also annexed 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 Regulation 34 (Schedule V (B) of SEBI (LODR)Regulations,2015) 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. 2017-18:
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.
Your Directors further state that:
f. Neither the Managing Director nor the Whole-time Directors of the Company have received any remuneration or commission from any of the subsidiary Company.
g. 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.
h. 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.
i. There was no change in the nature of business of company during F.Y. 2017-18.
j. 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. 2017-18.
13. CAUTIONARY STATEMENT:
Statements in the Directors’ Report and Management Discussion & Analysis describing the company’s objectives, projections, estimates, expectations or predication may be “forward-looking statements’ within the meaning of applicable securities laws and regulations, actual results could differ materially for those expressed or implied, important factors that could make difference to the company’s operations include raw material availability and its prices, cyclical demand and pricing in the company’s principle markets, changes in government regulations, tax regimes ,economic developments within India and the countries in which the company conducts business and other ancillary factors.
14. 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 business of 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
Date: 29th May, 2018
Registered Office Address:
D 1st Floor, Oberoi Garden Estates,Chandivali Farms,
Chandivali, Andheri (East), Mumbai - 400072
TEL No: 91 22 71068800 /61068800 Fax No: 61068830