Bombay Rayon Fashions Ltd Directors Report

Dear Members,

Your Directors are presenting the Twenty Ninth Annual Report of the Company together with the Audited Annual Accounts for the year ended 31^st March, 2022.

1. FINANCIAL AND OPERATIONAL PERFORMANCE:

a. Financial Results

Financial and Operational Results of the Company for the year ended 31^st March, 2022 as compared to the previous financial year, is summarized below:

(Rs. in crores)

Particulars	Standalone Financial For the Year Ended
	31-03-2022	31-03-2021
Revenue from Operations	83.08	108.77
Loss before Interest, Depreciation, Extraordinary items and Tax	(233.75)	(365.90)
Less: Interest	81.17	146.45
Less: Depreciation and Amortization	64.34	103.94
Loss before Tax	(379.26)	(616.29)
Less Extraordinary item	(888.07)	(51.35)
Loss before Tax	(1267.33)	(558.63)
Tax Provisions	(120.13)	258.68
Profit / (Loss) after tax	(1147.20)	(299.95)

b. Operations:

At present the Company is doing the business of weaving of fabrics and manufacturing of accessories for garments. The major business of manufacturing of finished fabrics was demerged by the Company during the FY 2020-21. The revenue generated from these businesses during the year under review is Rs. 83.08 crores. The second wave of COVID 19 pandemic had a major impact in Bangalore. The manufacturing unit had to suspend its operations at Bangalore unit for few months of beginning of FY 2021-22. The loss for the year has increased from Rs. 299.95 crores to Rs. 1147.20 crores which is mainly because of writing off of loss incurred by the company in value of obsolete & non- moving inventory and writing off of non- recoverable debts.

c. Suspension of Trading

After the year end, the Stock Exchanges has suspended trading of the securities since 23^rd May, 2022 due to non- compliances with the provisions of the SEBI Listing Regulations and non-payment of fines imposed by the Stock Exchanges on account of non-compliances as well as listing fees. The company has not paid listing fees of BSE Limited for FY 2021-22 and FY 2022-23. The listing fees of National Stock Exchange of India Limited is not paid for FY 2022-23.

d. Initiation of Corporate Insolvency Resolution Process (CIRP) in the Company

After the year end, on 07^th June, 2022, the Hon ble National Company Law Tribunal, Mumbai (NCLT) has admitted the petition filed by one of the operational creditor of the Company for initiation of Corporate Insolvency Resolution Process (CIRP) of the Company and appointed Mr. Santanu T. Ray as the Interim Resolution Professional was appointed by NCLT. One of the directors of the suspended Board of the Company, viz., Mr. Prashant Agrawal filed an appeal before Hon ble National Company Law Appellate Tribunal, New Delhi (NCLAT) which was dismissed by NCLAT by Order dated 15th July, 2022. The first meeting of Committee of Creditors (CoC) was held on 26th July, 2022. The CoC in its first meeting has considered and approved

amongst other matters, the appointment of Resolution Professional, viz., Mr. Satish Kumar Gupta, replacing the Interim Resolution Professional. The Hon ble NCLT vide its Order dated 04th August, 2022 has confirmed the appointment of Mr. Satish Kumar Gupta as the Resolution Professional.

e. 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 loss of Rs. 0.07 crores for the year ended March 31, 2022.

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 was used for captive consumption and some part wass sold in the open market. The unit is not operational at present.

The operations of the Company are temporarily suspended

iii. BRFL Textiles Private Limited

A recently incorporated Company in FY 2020-21 is carrying out the business of manufacturing of finished fabrics.

The net loss of the company as on 31^st march 2022 was Rs.218.42crores based on unaudited provisional financial statements of the company

iv. DPJ Clothing Ltd, U.K.

DPJ Clothing Limited is engaged in business of wholesale marketing and distribution of clothing products. However there are no major activities due to global economic conditions.

v. BRFL Italia S.R.L, Italy.

The Company owns the brand GURU for ready- made 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 re- arrangements.

vi. 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.

vii. BRFL Bangladesh Private Limited.

The Company has not commenced its operations.

f. Consolidated Accounts:

The Consolidated Financial Statements of your Company for the financial year 2021-22 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 financial statements of its subsidiary company, as approved by the Board of Directors of the said Company. The Consolidated Financial Statement does not include the financials of STI India Limited, BRFL Italia S.r.l, BRFL Italia Licensee S.r.l, DPJ Clothing Limited & BRFL Bangladesh Private Limited as the financials statements of these companies are not available with the company for

the reasons as mentioned hereinabove. With respect to BRFL Textiles Private Limited provisional financial statement for the year ended 31^st March, 2022 are considered.

g. Dividend:

In view of the losses incurred during the year under review, the Board of Directors has not recommended any dividend for the financial year ended March 31, 2022.

h. 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 are detailed in the financial statement.

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. The Company has obtained approval from the shareholders of the Company in the Annual General Meeting held on 31^st December, 2021 to enter into transaction with BRFL Textiles Private Limited up to a maximum aggregate value of Rs. 100 crores.

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 STATUTORY AUTHORITIES:

During the year under review, there were delays in payment of statutory dues. The statement of outstanding dues (excluding interest provision to the extent not provided) for more than six months as at 31st March 2022, given hereunder:

Sr. No Nature of Dues	Amount (Rs in crore)
1. Provident Fund	18.60
2. Employee State Insurance	4.46
3. Professional Tax	1.27
4. Property Tax	1.46
6. Tax Deducted & Collected at Source	12.18
7. Income Tax	12.22
8. VAT TDS	0.01
9. Service Tax	0.00
10. Labour Welfare Fund	0.02
11. Interest/Penalty/Demand on PF/ESIC/TDS	15.02

6. MATTERS RELATED TO DIRECTORS:

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

I. Changes in Directors and Key Managerial Personnel (KMP):

During the year under review Mr. A. R. Mundra a whole - time director of the company designated as Executive Director - Finance and Chief Financial Officer (CFO) of the Company pursuant to section 203 of the Companies Act, 2013 had relinquished his position as a whole-time director and consequent to that as a CFO on attaining his age of superannuation, w.e.f., 01^st January, 2022. The Board expressed its sincere gratitude towards his services as result oriented professional which was helpful to the organisation.

The company is in the process of appointing a key managerial person as a CFO as required to appoint under section 203 of the Companies Act, 2013.

b. Directors Retiring by Rotation:

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Aman Agrawal (DIN : 00019534) & Mr. Prashant Agrawal (DIN:00019464), 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 are liable to retire by rotation.

c. 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.

d. Re- appointment of Whole - Time Directors:

Pursuant to the provisions of Section 196, 197, 203 of the Companies Act, 2013, the terms of appointment of whole - time directors viz. Mr. Aman Agrawal, and Ms. Prachi Deshpande expired on 31^st May, 2022. The Board recommends their re- appointment for further tenure up to 31^st May, 2023 for Mr. Aman Agrawal and Ms. Prachi Deshpande. Necessary resolutions are included in the notice of ensuing annual general meeting for approval of members as per existing provisions.

7. DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES:

a) Board Meetings:

5 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) Board Committees:

Details of all the following committees constituted by the Board along with their composition; terms of reference and meetings held during the year are provided in the Report of Corporate Governance which forms part of this Report:

1. Audit Committee

2. Stakeholders Relationship Committee

3. Nomination and Remuneration Committee

4. Corporate Social Responsibility Committee

5. Risk Management Committee

c) 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, 2022, the Board of Directors hereby confirms that:

a. in the preparation of the annual accounts for the financial year ended March 31, 2022, 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, 2022, 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.

d) Policies:

(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 elevate 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.

(III) Corporate Social Responsibility Policy:

The Company has defined policy on Corporate Social Responsibility pursuant to the provisions of Section 135 of the Act read with Companies (Corporate Social Responsibility Policy) Rules, 2014.

The policy is hosted on the website of the Company i.e. www.bombayrayon.com. However, in view of losses, the Company was not required to spend any amount towards CSR activities during the year under review.

(IV) Remuneration Policy

The Company has adopted a Remuneration Policy pursuant to the provisions of section 178 of the Companies Act, 2013. The policy is hosted on the website of the Company i.e.www.bombayrayon.com

e) Annual Evaluation of Directors, Committee and Board:

Independent Directors had carried out the annual evaluation of the Directors for the financial year 2021-22. 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.

f) Details with respect to the Program for Familiarization of Independent Directors:

Independent Directors were made familiar with situation of the Company from time to time in duly held Board Meetings during the FY 2021-22. The policy of the Company on Familiarization of Independent Directors is placed 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 there was no change in capital structure of the Company.

10. AUDITORS AND REPORTS:

a. Statutory Auditors:

The shareholders of the Company in the Annual General Meeting held on 26^th September, 2017 had appointed M/s. 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 31^st March 2022 does not contain any qualification.

Subject to the approval of the Members, the Board of Directors of the Company has recommended the appointment of PR Agrawal & Awasthi Chartered Accountants (ICAI Firm Registration Number 117940 W) as the Statutory Auditors of the Company pursuant to Section 139 of the Companies Act, 2013 for the next tenure of five years. Accordingly, the Board recommends the resolution in relation to appointment of Statutory Auditors, for the approval by the shareholders of the Company.

b. Secretarial Audit Report for the year ended 31^stMarch, 2022:

The Board had appointed Sawant & Associates, Practising Company Secretaries as Secretarial auditors for the financial year 2021-22. The Secretarial Audit Report issued by them in Form MR-3 forms part of this report and has been marked as Annexure III.

The Report of the Secretarial Auditors for the year ended 31^st March 2022 contains few remarks, the Board of Directors would like to state that:

1) Due to financial stress on the company, the company could not make the payment of listing fees to BSE Limited;

2) The Company was looking for the suitable candidate to fill up the vacancy caused by resignation of two independent directors and also to ensure minimum six numbers of directors on the Board of the Company;

3) The gap between two board meeting as well as audit committee meeting inadvertently got extended beyond 120 days;

4) Due to the reasons beyond control of the company the report under regulation 24A of SEBI (Listing Obligations and Disclosures Requirement) Regulations 2015 could not get filed for the year ended 31st March, 2022;

5) The Company was looking for the suitable candidate to fill up the vacancy caused by resignation of independent director Mr. Vishal Kiran Sharma;

6) The delay in publication of financial results under regulation 33 of SEBI (Listing Obligations and Disclosures Requirement) Regulations 2015 for the year ended 31st March, 2021 and quarter ended 30th June, 2021 as well as quarter/half year ended 30th September, 2021 was due to delay in completion of transfer of business of tarapur undertaking and consequently completion and audit of accounts of the company;

7) Due to the reasons beyond control of the company the website of the company could not get updated as per the requirements of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013;

8) Accounts of subsidiaries could not get consolidated due to the reasons given hereunder:

a. BRFL Textiles Pvt. Ltd. - Financials not available

b. BRFL Bangladesh Pvt. Ltd. - No operations

c. BRFL Italia SRL - Business Closed

d. BRFL Italia Licenses SRL - Financials not available

e. STI India Ltd., Indian listed subsidiary - Financials not available

f. DPJ Clothing Limited - Financials not available

9) An intimation to Stock Exchange on 30th May, 2021 with regard to appointment of Mr. Devang Parekh was sent but Mr. A. R. Mundra -Executive Director - Finance of the Company continued to act as CFO under section 203 of the Companies Act, 2013 till 31st December, 2021;

10) The company is under process of filing the required form DIR 12 on cessation of Mr. A. R. Mundra as a CFO under section 203 of the Companies Act, 2013;

11) The company is in the process of appointing suitable candidate as key managerial personnel as CFO of the Company;

12) The company inadvertently is in the process of filing forms as required Order dated January 22, 2019 issued under Section 405 of the Companies Act, 2013 in respect to half yearly MSME Returns and Rule 16 of Companies (Acceptance of Deposits) Amendment Rules, 2019 in respect of return of Deposit and Particulars not considered as Deposit as on 31st March;

13) Due to unavailability of audited financial statements of foreign subsidiaries the company could not file Annual Return on Foreign Liabilities and Assets for Financial Year 2021-22 as required pursuant to the Reserve Bank of India s Circular No. 145 dated 18th June 2014.

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 30^th August, 2022, appointed Mr. Shankar Shriram Choudhari, Cost Accountants as the Cost Auditors of the Company for the financial year 2022-23 at an audit fee of Rs. 1,50,000/- subject to ratification for payment by shareholders.

d. Internal Audit and Control:

The Company has set up Internal Audit department for carrying out internal audit in the areas in consultation with the Audit Committee and the findings of the Internal Auditors in their reports are discussed regularly in the meetings of the Audit Committee as and when it is required.

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 31^st March, 2022 made under the provisions of Section 92(3) of the Act is attached as Annexure IV which forms part of this Report and also placed on the website of the Company www.bombavravon.com

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.

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. 2021-22:

a. 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. Revision of the financial statements pertaining to previous financial years during 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 the Company during the financial year under review.

j. Pursuant to the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and

Redressal) Act, 2013, there are no case pertaining to sexual harassment at workplace has been reported during F.Y.2021-22.

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 ANDAPPRECIATION:

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
	Aman Agrawal
	Chairman (DIN:00019534)
Place: Mumbai
Date: 30th August, 2022
Registered Office Address:
3rd floor, DLH MangalMurti Building,
Linking Road, Santacruz (West),Mumbai-400054.
CIN: L17120MH1992PLC066880
TEL No: +91 22 61068800 Fax No: 61068830
mail: investors@bombayrayon.com,
Website: www.bombayrayon.com