BRFL Fulll A B.docx

A PROJECT REPORT ON BOMBAY RAYON FASHION LTD

CHAPTER-1

INDUSTRY PROFILE

THE TEXTILE INDUSTRY

The information presented in this section has been extracted from publicly

available documents which have not been prepared or independently verified by the

Company, the Lead Manager, or any of their respective affiliates or advisors.

Overview of Global Textile Industry

The global textile and clothing industry was a US$453 billion business and

Comprised approximately 5.1% of total international merchandise trade. The garment

industry, one segment of the textile industry, was a US$258 billion business in 2004

and comprised approximately 2.9% of total international merchandise trade. The

textile and garment sectors are closely related, with textiles providing the major input

to the garment industry.

The labour intensive nature of the textile industry has caused it to shift its

manufacturing base several times during the last fifty years, ultimately concentrating

in those countries that offered the most competitive labour cost structure. Developed

markets such as in the U.S. and Europe have started downsizing capacities in view of

their higher manufacturing costs compared to countries such as India, Pakistan, China

and Indonesia. This relocation of the industry is expected to provide developing

countries with an opportunity to penetrate U.S. and European markets and to enhance

their export share in these markets. The migration of textile capacity, however, will be

influenced by objective competitive factors, and may be hampered by domestic

challenges and the relatively weaker infrastructure of the developing countries.


The Agreement on Textiles and Clothing (ATC) has also created opportunities for

developing countries. With full implementation of the ATC on January 1, 2005, all

trade barriers (both tax and non-tax) imposed by the developed countries on imports

from developing countries were eliminated, giving way for a free trade regime in the

global textile trade. The ATC has opened the way for the most competitive

Developing countries to develop stronger clusters of textile operations. Developing

countries that have both downstream and upstream facilities in textiles have an

opportunity to prosper in this new competitive environment.

Overview of Indian Textile Industry

The Indian textile industry occupies a unique position in the Indian economy. Not

only does it provide one of the most basic needs of people, it operates as a self-reliant

industry, from the production of raw materials to the delivery of finished products,

with substantial value-additions at each stage. Textiles also contribute significantly to

the country’s overall economy. Currently, the textile industry accounts for some 14%

of industrial production and about 4% of India’s GDP. The textile industry is the

second largest provider of employment in India after agriculture, providing direct 106

employments to about 35 million people. Moreover, due to its close linkage with

agriculture, the textile industry also has immense potential for employment

generation, particularly in the rural and remote areas of the country, textile and

garments account for 16.63%. Consequently, growth and development of this industry

may have a significant bearing on the overall development of the Indian economy.

The India textile industry has been fragmented historically. Recognizing the

importance of this sector, the Indian government adopted a separate policy for

development of the Indian textile industry in 1985. Further, in 2000 the government


formulated a comprehensive textile policy aimed at developing a globally competitive

textile industry in India through modernization and consolidation. This policy was

called Vision 2010 and is intended to take advantage of the free quota regime and

increase India’s export turnover to US$50 billion by 2010.

Quota Regimes in the Textile Industry and Removal of Quotas

Textiles constitute an important segment of global trade. Until very recently, however,

global trade in textiles was subject to many tax and non-tax based trade barriers and

had experienced various transitional phases, which can be broadly summarized as

follows: In 1995, the Uruguay Round of the World Trade Organization brought the

Multi- Fibre Agreement (MFA) to an end, giving way for a free trade regime in the

global textiles trade to emerge. When the ATC came into existence on January 1,

1995, it provided that restrictions on the textile trade imposed by World Trade

Organization members be phased out in four steps over a period of 10 years, starting

in January of 1995. Date Minimum Volume Integrated Accumulated Volume.

THE INDIAN TEXTILE INDUSTRY

The textile industry is one of the oldest and largest industries in India and is highly

fragmented. It is divided into four segments: spinning, weaving, processing and

garmenting. The Indian textile industry is also comprised generally of two sectors.

The First, the organized sector, consists of modern and highly mechanized mills. The

second, the unorganized sector, consists of the small-scale power loom operators and

the highly fragmented handloom (hand spinning and hand weaving) operators. The

unorganized textile sector has dominated the industry in India for several years and

accounts for some 93% of the country’s total fabric production. The preferences and

protections accorded to this sector by the government, however, are being 109


eliminated now to give way for integrated players in the organized sector, which will

be able to modernize and improve the quality of the weaving sector and give the

industry a major boost.

Cotton abundance

India is the third largest producer of cotton, with the largest area under cultivation, in

the world. Since cotton is the key raw material for the textile industry, India enjoys an

advantage as a producer of low cost raw material compared to other countries.

Low-cost skilled labour

In developed countries, the average cost of labour in weaving is around 39% of the

Manufacturing costs of a finished product, which is substantially higher than the

labour cost in India. Labour costs in India are some of the lowest in the world. India’s

lower labour costs give the Indian textile industry an edge.

Designing skills and Fashion capabilities

It is generally difficult to forecast the demand for garments on a global basis, and

Buyers therefore prefer to place small orders tied to seasonal trends. Order flow in the

Industry depends upon the ability of manufacturers to recommend design changes that

match trends in the marketplace. Skilled designers play an important role by analysing

existing trends and creating new designs to suit the preferences of end users. India’s

ability to effectively translate the latest fashion trends into final products gives the

Indian textile industry an edge over other countries.

Fabric Production


Since 1999, the proportion of man-made fibers in India’s total fabric production has

continually increased. Total production of different types of fabric along with their

growth rates are shown in the following table:

THE GARMENT INDUSTRY

The garment industry is one of the fastest growing industries in India. This industry is

structurally a labour-intensive, low wage industry with some variations across market

segments. Pricing in the industry depends upon the extent of value addition in the end

product, the more the value addition the higher per unit price realization. The

competitive advantage of companies in this market segment is related to their ability

to create designs that capture tastes and preferences, and even better – influence such

tastes and preferences – in addition to cost effectiveness. This industry has also seen a

significant amount of relocation of production and outsourcing to lower-cost

producers. The size of the Indian textile and clothing market is currently estimated to

be US$46 billion. The domestic market accounts for approximately US$30 billion and

the export market is approximately US$16 billion.


COMPANY PROFILE.

Company History - Bombay Rayon Fashions Our Company was incorporated as

Mudra Fabrics Private Limited (MFL) on May 21, 1992. On October 13, 1992 our

Company was converted into a public limited company. Subsequently, on September

30, 2004, name of our Company was changed to Bombay Rayon Fashions Limited

(BRFL). In March 2005, with a view to consolidate business of our Group, Bombay

Rayon Private Limited (BRPL) was amalgamated with our Company and two

partnership firms of the Group, i.e, B R Exports and Garden City Clothing were taken

over by BRPL and our Company respectively.

The Bombay Rayon Group

The Bombay Rayon Group started in 1986 with the incorporation of BRPL. The

Group is in the textile industry having facilities for manufacture of fabrics, garments,

design development, sampling etc. Presently, our Group is engaged in carrying out the

activities of manufacture of fabrics for domestic sale and export and manufacture of

garments for export.

The Bombay Rayon Group was promoted by Mr. Janardan Agrawal. Subsequently

Mr. Aman Agrawal and Mr. Prashant Agarwal, sons of Mr. Janardan Agrawal joined

the Group and are now in charge of the management of the Company as well as our

Group companies. Key Events in the History of the Bombay Rayon Group/BRFL

Year Key Events 1986 Bombay Rayon Private Limited, the first company of

Bombay Rayon Group incorporated for undertaking the business of manufacture of

woven fabric

Back ground and inception of the company:-


The Company is vertically integrated businesses engaged in the manufacture of a

variety of fabrics and garments and have state of the art, modern production facilities.

Its business was founded by Mr. Janardan Agrawal in 1986, with the incorporation of

Bombay Rayon Private Limited. The Company started out producing cotton,

manmade and blended fabrics and has since expanded into manufacturing garments,

predominantly designer shirts for men, women and children. The business has also

commenced the manufacture of home textiles. The business is focused on capitalizing

on the vertical integration of our production process, from initial design to fabric

production to the manufacture of garments, taking advantage of the higher profit

margins offered by the designer shirt segment and the elimination of quotas in the

international marketplace. The Company is currently one of the largest shirt

manufacturers in India. At present, the Company exports all of our garments to the

U.S. and Europe. It also sells fabrics in the domestic and international markets. The

Company has positioned itself as a multi-product, multi-fibre and multi-market

player, ensuring that our target market is a diverse mix of the domestic fabrics market

and the international fabrics and garments market. Our eight manufacturing units are

located in Navi Mumbai, Silvassa, Sonale in the Thane district and Bangalore. Each

of these units are fully supported by facilities for product development, design studios

and efficient sampling infrastructure, which allow us to provide quality services to our

customers in India and abroad. We currently employ over 5,800 people. With our

current manufacturing capacity, we can produce some 50 million meters of fabric and

12 million garments annually.

Nature of business


We are a vertically integrated company engaged in the manufacture of a variety of

fabrics and garments at modern production facilities.

Our Manufacturing Capacities

We are primarily in the business of manufacturing woven fabrics and garments for

export. We currently have facilities for yarn-dyeing, weaving, processing grey fabric

and manufacture of garments, including the packaging thereof. We are also expanding

our current manufacturing capacity by constructing an additional manufacturing unit

in Bangalore which is expected to become operational by December, 2010. It will

help us increase our current production by some 22,000 pieces of garments per day.

Manufacture of Woven Fabric

For nearly two decades we have been manufacturing woven fabric. We currently have

weaving machines at three locations: the village of Sonale in Thane district, Navi

Mumbai and Silvassa. These facilities manufacture woven fabric (both shirting and

suiting) of different varieties using cotton, man-made fibres and their blends. All of

these manufacturing facilities use modern, imported technology. In addition to the

weaving machines, we have also invested in and installed at our plants modern

preparatory machines used for winding, sizing, and direct and sectional warping. The

table below lists some of our manufacturing equipment.

Procurement of Grey Yarn and Yarn Dyeing


We purchase grey yarn from various suppliers, depending on the order volume for the

manufacture of woven fabric. After procurement, the yarn is inspected for quality and

stored in the warehouse.

We use grey or dyed yarn depending on the nature of the orders we receive. If the

yarn needs to be dyed, we currently outsource that process.

Sizing and Warping

Some man-made warp yarns are sized to improve their strength and to minimize

breakage before weaving. The threads are compressed to the proper size as they pass

between rollers and then dried with large, steam heated cylinders. Warping is a

process by which yarn is assembled onto a beam to be used on weaving machines. We

use humidification plants to eliminate excess heat and provide humidity in the

weaving sections.

Weaving and Grey Fabric Inspection

After warping, the beam is put on the weaving machines, which produce woven

fabric. The fabric produced by weaving is grey in nature and is not suitable for

garment production or for any other purpose. It has to be processed further to give it

both an attractive look and stability. We inspect the grey fabric and mend blemishes

wherever required. Afterward, we pack the fabric and send it to the process house.

Fabric Processing and Finished Fabric Checking

Our Integrated Facility contains a modern process house, which has facilities for

washing, bleaching, mercerising, printing, dyeing, calendaring, treating brightness,


shrinkage and wrinkling. After such processing, the fabric is sent to the packing units,

where it is re-inspected for quality and then packed and dispatched.

Procurement of fabric

Depending on the customer order and design, we determine the appropriate fabric and

fabric source and assess the quantity required, based the consumption of fabric per

garment. This assessment is made by a team of skilled professionals. Most of the

fabric we use comes from our integrated manufacturing facility in Bangalore.

Depending on demand, we also may source grey fabric from the local market or

finished fabrics from overseas markets.

Fabric Checking

The procured fabric is checked for both quality and quantity with the aid of machines

that help to visualise the extent of any damage that may have been caused to the fabric

and to minimise waste. The fabric is then approved by the quality control department,

which ensures that the fabric matches the specifications stipulated by the

production/design department. Fabric accessories are also thoroughly checked for

damage and defects.

Fabric Cutting and Garment Stitching

The fabric is laid on a cutting table and then plotted according to the specific patterns

using CAD/CAM machinery. The system ensures optimum usage of fabric, keeping

cutting wastage at a minimum level. After plotting, the fabric is cut by cutting

machines. The component parts of the shirt are then labeled for identification of size

and shade. This process is known as sorting. The sorted fabric is then bundled and


sent for fusing of the three main components, collars, cuffs and plackets. The collars

and cuffs are then attached to the main body of the shirt, completing the first stage.

Then buttonholes are made and the buttons are attached. This is performed with the

help of specialized machinery. After the manufacturing process is completed, the

finishing process begins. The shirt is manually checked for loose threads and other

blemishes. We also use thread-removal machines, which vacuum loose, superfluous

thread from the shirt.

Final Inspection

All the garments we manufacture are subjected to stringent quality control measures

to ensure that every piece is manufactured in accordance with the order specifications

and requisite quality standards. A separate quality assurance department is solely

responsible for ensuring that all finished goods are inspected and free from defects

and stitched according to specification. Any piece that varies from acceptable limits is

rejected.

Finishing and packing

After the products pass the quality inspection, they are then folded as specified in the

fold diagrams given to the factory. The necessary folding accessories, such as

stiffeners, colour inserters and barcodes, are inserted, and the products are then

packed in appropriately sized vinyl zipper bags. The packaged pieces are placed in

cartons for shipping. In some cases, the goods are bulk-packed and shipped.

Product Profile


FABRIC

Every fabric in the Bombay Rayon collection must pass the ultimate comfort test.

That’s why we take the time and expense to ensure it stays so unbelievably soft and

comfortable. Our commitment to genuine Bombay Rayon quality shows in the fabrics we use.

Along with our incredible fabrics and size offerings, at Bombay Rayon you'll find colour!

Vibrant and subdued, classic and contemporary, be on the watch for the new Summer-

Monsoon collection to unfurl short Bombay Rayon is a leading supplier of quality fabrics

worldwide. We at Bombay Rayon understand the needs of this exciting industry and are

committed to supporting our customers’ requirements. Our line combines quality and style

with an extensive offering of men’s styling.

You're sure to find the perfect jacket while browsing through our on-line catalogue. We offer

a large variety of fabrics to choose from and pricing options to fit every budget. We feature

premium Shirting, Suiting, Voiles and Fashion Garments - all of which co-ordinate

wonderfully with every fabric.

APPAREL

Comfortable, pure and simple - that’s what the Apparel Collection from Bombay Rayon is all

about. Great clothes in easy, contemporary styles made from soft, durable fabrics that you’ll

enjoy wearing to the office, on the road and over the weekend…whenever and wherever your

active life takes you.

Our collections are made up of true wardrobe essentials for today’s work environment.

Whether you need a uniform for your team, a gift or program item, Bombay Rayon’s apparel

collection has just the right looks to fit both casual and more formal occasions.

The corporate casual collection reduces the time and effort spent in looking great with natural

coordinating combinations you'll love for both work and leisure. In this collection of Bombay


Rayon apparel, we're proud to offer apparels of the highest quality, with construction details

that are evident in every style we make. Our styles have the look and functionality of outdoor

apparel, but are made in everyday friendly fabrics that easily transition into the workplace.

And the best part is, we're priced right. Value is a large part of the equation that's kept the

Bombay Rayon Apparel Collection so popular over the years. You can afford the best! For

the most comprehensive selection of quality corporate casual apparels, take a close look at our

collection.

Brief Description of different steps involved in garment manufacturing is as

follows.

1. Procurement of fabric

Based on the order and design, the fabric and appropriate fabric source are

identified and the quantity required is assessed based on the consumption of fabric per

garment,. We have a team of skilled professionals who makes this assessment. We

source majority of the fabric required from our fabrics weaving plants at village

sonale in Thane district, Navi Mumbai and silvassa.

2. Fabric checking

Besides fabric, the accessories are also thoroughly checked for defects and damages.

3. Fabric cutting and garment stitching

The fabric is laid on the cutting table and then plotted with the help of CAD /CAM

machinery as per the specific patterns. This is a system for consumption planning and

ensures optimum usage of fabric keeping the cutting wastage at the minimum level.

After plotting the fabric is cut with the help of cutting machines. Different parts of

shirt are then stickered for identification of size and shade. This process is known as

sorting of fabric. The sorted fabric is then


bundled and sent for fusing of the three main parts namely collars and plackets. Then

collars and cuffs are attached to the main body completing the first stage

4.Final checking of garments

We subject 100% of the garments that we manufacture to stringent quality control

measures. To ensure that every piece manufactured is as per specification and the

required quality standards, responsible for ensuring that all finished goods are free

from defects and stitched as per measurement. This team compares the final product

with the measurement chart and style chart given by the design department. Any

variance beyond acceptable limits is rejected.

Manufacture of Made Ups Very recently we have ventured into the value –added

segment of home textiles i.e. Bed sheets, fitted sheets, pillow covers, Quilt covers,

Duvet covers etc. mainly for direct exports. The size of global trade in this segment is

expected to be over US 12 billion. The market for home textile products as been

growing at a rapid pace over the last few years. With the removal of quota restriction

the segment offers great opportunity for growth.

Our competitive Strengths

1. Experience of our promoters

2. Flexibility in manufacture of garments

3. Designing capabilities

4. Lower turnaround time

5. low labour cost

6. Economies of sale


7. High productivity

8. Quality assurance

9. Sampling capabilities


Our promoters and we have adequate experience in the textile industry and

we have successfully implemented expansion project earlier.

We also have adequate technical and commercial staff to handle

implementation of the proposed new expansion project


We are in the business of manufacture of woven fabric and for the last

fifteen years it as been our main stay. We have over the period of time developed

expertise in the manufacture of any customer desired variety involving complex

design of woven fabrics of superior quality.


Designing is a critical element of fabrics and garments both. Development

of innovative designs is one of our main strengths. It is also our USP (UNIQUE

SELLING PROPOSITION) . We are into the high end products we have in –

house teams of experienced designers in weaving garmenting and home textiles.

We have installed software packages CAD/CAM systems for generating designs

on computers .At least 4-5 new designs are developed on a daily basis in each of

the divisions.



Garment manufacturing is highly fashion oriented. Fashion is time bound and

delay in meeting deadlines results in loss of businesses. Meeting customer

deadlines on a consistent basis is important for business. Our in house facilities of

design studio, sampling of fabrics and garments, weaving, and garmenting allows

us to plan and deliver the order in shortest turnaround time.

5. Low labour cost

We are located on the outskirts of Bhiwandi, where skilled labour is

available in abundance. Thus our labor costs are maintained at realistic levels. Added

to that we have kept ourselves updated on the latest available technologies and

continuously look for new attachments and value adding equipment to enhance the

performance of our machines such that the labor input required is maintained while

the production/ productivity is improve

1. Economies of scale

The company‘s production capacity in each of our units / divisions can be

considered mid to large size. It allows us the advantage of economies of scale.

Although the units are spread over different locations, the raw material procurement

and purchase functions are centralized. we can therefore take advantages of bulk

discounts



High level of modernization, trained work force and managerial expertise results

in consistent high level productivity. We have established modern production

facilities at each of our plant and we are continuously on the lookout for new /

updated technologies. Our investment in value adding equipments/ attachments to our

machines as resulted in twin benefits of consistent high quality and improves

productivity


Each of the company’s products passes through stringent quality checks. The

quality assurance measures taken by the company include through checking of all raw

material and other inputs right down to finished goods to ensure quality, statistical

methods to identify and analysis areas of improvement, experienced man power for

quality assurance activities, creation of data base for future reference and analysis etc.

9. Sampling Capabilities.

We have all the facilities like desk looms, sample dyeing, sample printing,

washing and processing facilities to produce fabric samples per designs developed by

our design studio. In the initial stages of the order the design and sampling department

continuously interacts with the buyers till the fabric sample is approved. Sample

Yardages are made for making garments and in our dedicated fabric sampling unit,

garment samples are made, remade, design changes are incorporated till the customer


finally approves the garment sample. This entire process is very time consuming and

can take 2 months our dedicated in house facilities enable us to compress this time

substantially.

CUSTOMERS PROFILE

Federated stores – U S A

V F (WRAGLER) – U S A

Liz Claiborne – U S A

DKNY – U S A

ECKO – U S A

MARK ECKO – U S A

Guess – Italy

Roberto Cavalli – Italy

Tom Tailor – Germany

Otto’s – Germany & Switzerland

C & A Chain of Stores – Germany

Kiabi Stores – France

WR Replay – Italy

BHS – UK

Burtons – UK

Topman - UK

Kickers – UK

Next – UK

GEORGE – UK


Business Operations

Yarn Dyeing

The Company’s yarn dyeing operations are carried out at the integrated textile unit in

Doddabalapur, Bangalore. Nearly 1.4 million kgs of yarn (approx. 4,000 kgs a day) is

dyed annually at this facility. The expansion programme initiated by the Company

will by setting up new facilities in Maharashtra see a further increase in capacity to

the extent of 10.5 million kgs, totaling the capacity to 11.9 million kgs per annum.

Fabric Processing

Fabric processing of largely woven fabrics is carried out at the Company’s integrated

manufacturing facilities in Bangalore having capacity of producing 55 million meters

per annum. The expansion programme being set up in Maharashtra is expected to

increase the capacity by a further 180 million meters per annum. The weaving

facilities for grey fabrics are located at Thane, Silvassa, Navi Mumbai and Bangalore.

New greenfield facilities are now coming up in Maharashtra. Finished fabrics are

supplied in the domestic market through 70 distributors and

more than 2000 retailers under the brand name ‘Bombay Rayon’ and to the

manufacturers of garments as per their required specifications and designs. Exports

are largely to the Middle-East and EU countries. Bombay Rayon Fashions Limited

(BRFL) is India’s foremost, vertically integrated textile group, engaged in the

manufacture, exports and retail of high-end designer ranges of fabrics and garments.

BRFL enjoys a strong presence

across the entire value chain of yarn dyeing, weaving, fabric processing, design,

garment manufacturing and retail. The Company owns 13 manufacturing facilities,

including 1 sampling unit across the country.


Garment Manufacturing

Casual and formal wear garments for men and women are manufactured at different

locations in Bangalore. These are exported to international buying houses and retailers

across the EU and USA. While the current facilities produce 30 million pieces per

annum, our various acquisitions and expansion programme will substantially add to

the existing capacity. Leela Scottish Lace (P) Ltd, which was acquired in August 2007

has 16 facilities at different locations with a total capacity of more than 50,000 pieces

per day. LNJ Apparel of RSWM Ltd, whose operations we acquired in October 2007

has a capacity to produce 8000 pieces of casual and formal trousers, while at Maryan

Apparels Private Limited, which we acquired in March 2008, has a capacity of 8,000

pieces per day. With the expansion programme, the total capacity will reach to 75

million pieces per annum.

Retail

The Company recently acquired the European brand ‘GURU’ and other retail

business of Jam Session Holding S.r.l (Jam). This acquisition will enable BRFL to set

its footprints into the global retail scenario and move up the value chain to emerge as

a significant global

textile entity.

Awards and Achievement:-

BRFL was aptly honoured as the 'largest shirt maker in India'. We also received

Dun & Bradstreet - Rolta Corporate Award as one of India's top 500 companies.

Our Doddaballapur mill won the Prestigious National safety Award for

"Outstanding Performance in Industrial safety as winner for the performance year


2008 based on the lowest average frequency rate." This award was presented by

Mr. Mallikarjuna Kharge, honorable Minister for Labour and Employment -

Government of India which was received by our Vice President Mr M Gopi on 27

Sept 2010 at New Delhi.

MILESTONES OF THE BRFL

1986 Mr. Janardhan Agrawal establishes the Bombay Rayon Group.

1990 Maharashtra gets its first fabric manufacturing facility.

1998 Bombay Rayon group commences export of fabrics.

2001 Launch of the Garment Division.

2005 Bombay Rayon Groups business is consolidated into BRFL.

2005The company makes a successful IPO with a listing on all the stock exchanges

in India.

2005 BRFL acquires DPJ Clothing UK, supplying to high street retailers in UK.

2005Set up of 7 garment manufacturing facilities in Bangalore with around 7000

machines.

2007 BRFL acquires "Leela Scottish Lace", one of the largest garment manufacturing

units set up in India, making BRFL one of the largest apparel groups in India.

2007 BRFL acquires "LNJ Apparel" a 1000 machine specialized bottoms plant.

2007 BRFL marks the commencement of the mega USD 250 million Textile and

Garment Project under a special MOU signed with the government of

Maharashtra.

2007 BRFL establishes a fully integrated textile mill in Doddaballapura, Bengaluru


with a capacity to process 1 lakh meters/day.

2008 BRFL acquires the iconic brand “Guru”.

2009 BRFL is sanctioned the project under the Scheme for Integrated Textile Park

(SITP) by the Govt. of India.

2010BRFL establishes the world’s largest fabric processing capacity of 5 lakh

meters/day at Tarapore.

2010 BRFL acquires STI India Ltd, a world class producer of 100% cotton yarn.


Management Pattern by Bombay Rayon

Si. No. Name Designation

01 Janardan Agrawal Chairman / Chair Person

02 Naseer Ahmed Jt. Vice Chairman

03 A R Mundra Executive Director

04 B S Bhesania Director

05 Pravin P Shah Director

06 Mukul Sarkar Nominee Director

07 Aman Agrawal Vice Chairman

08 Prashant Agrawal Managing Director

09 Uday Mogre Executive Director

10 S B Agarwal Director

11 Suresh Vishwasrao Director

12 M M Agrawal Director

Area of Operations

Bombay Rayon Fashions Limited (BRFL) is India’s foremost, vertically

integrated textile group, engaged in the manufacture, exports and retail of high-end

designer ranges of fabrics and garments. BRFL enjoys a strong presence across the

entire value chain of yarn dyeing, weaving, fabric processing, design, garment

manufacturing and retail. The Company owns 13 manufacturing facilities, including 1

sampling unit across the country.


Opening of overseas offices

Our first wholly owned subsidiary was incorporated in the Netherlands under the

trade name of BRFL Europe B.V. BRFL Europe B.V. has a showroom in Almere,

which mainly caters to the needs of our European customers.

We intend to open more overseas offices to make products more readily available and

accessible to our customers. Our strategy is to give our overseas buyers the comfort

and benefit of dealing with a company with an international presence.

Competition

In the domestic market we face competition from other corporate textile companies

and from businesses that have capacity in fibres (natural and manmade), yarn

(spinning and text rising), weaving, processing (yarns and fabrics) and garments but

which do not have a vertically integrated capacity in all areas (the "Non-Corporate

Sector"). There are many medium and small size units manufacturing synthetic

blended/cotton fabrics in India. Our products face competition from this large number

of fabrics manufacturers in the Non-Corporate Sector. Further, in the free trade

regime phased in by the Agreement on Textile and Clothing, there has been intense

competition in the international markets. Mexico, Turkey and Eastern Europe benefit

from their proximity to our main target markets of the U.S. and Europe and have the

ability to deliver products to these customers in shorter turnaround times. Here our

competitive strengths are significantly lower labour costs in India and our economies

of scale.


We also face competition from manufacturers in other cost efficient supplier

countries such as China, Pakistan, Bangladesh, Sri Lanka and Vietnam. We are able

to compete more effectively with such countries due to our quick turnaround times

supported by our in-house sampling capabilities. We intend to meet and overcome

this competition through product differentiation (offering a value added, design based

product in the mid-to-high end market segment), establishing state-of-the-art facilities

across the textile chain (from weaving to processing to garmenting), and expanding

into home textiles (an area of potential growth in the free trade regime).

Our Marketing and Sales

Our Customers

Our fabric customers include leading garment exporters in India, leading garment

makers in the overseas markets, domestic garment manufacturers, domestic

wholesalers and traders, and retailers. In addition, we have developed a strong

network of marketing agents who sell fabrics to various small sized units and traders,

thereby ensuring greater penetration of the retail market. Our garment customers

include top brands from the U.S. and Europe.

Our Market Segments

The following table indicates our presence by market segment:

Our Distribution channels


Products/market segments Distribution channel

Fabrics-Domestic sale

Fabrics-Exports

Germents-Exprot

BRFL-Marketing agents/wholesalers/Garment

manufactures/Retailers

BRFL- overseas garment manufacture/ Exporters/

International buying houses

BRFL- Buying Houses /international brands/

Retailers

Domestic Sale of Fabrics to Readymade Garment Manufacturers/Exporters

This is a fast growing market segment for the sale of fabrics. The fabric is custom-

made for garment manufacturers/exporters. These are often bulk and repeat orders. In

many cases, once the exporters have approved the fabric, they refer the manufacturers

directly to us for their orders.

Domestic Sale of Fabrics to Readymade Garment Manufacturers operating in

the

Domestic Market

This is another segment gathering significance in the domestic garment industry. With

the popularity of readymade garments on the rise and with the increase of retail

shopping malls, the demand for fabrics from this segment has increased.

Domestic Sale of Fabric to the Retail Market

The local retail market is well developed and we have been catering to this market for

two decades. We have a network of over 10 agents and 70 distributors catering to

more than 2,000 retailers throughout India.


Export of Fabric

We are an established fabrics exporter to various overseas markets. Suiting fabrics are

exported to Europe and shirting fabrics to countries in the Middle East and to Europe.

Export of Garments

Our strategy for the export of garments is to focus on medium-to-high class garment

labels to ensure our per unit price realization is maximised. We offer garments based

on seasonal fashion trends and colour choices. Our expertise in the design of fabrics

to customer specifications, garment designs and garment samples meeting stringent

quality standards has helped us to attract well-known brands from Europe and the

U.S. We regularly participate in international trade fairs to develop new relationships

and to keep abreast of contemporary fashion trends.

Use of Information Technology ("IT")

We are a technology-oriented organisation and use information systems extensively

across our operations. Most of our critical functions, such as operations, supply chain,

finance and accounts and human resources, are linked through a computer network.

This has enabled us to improve operational efficiency, reduce our costs of operations,

and enhance overall cost efficiency.

Fabrics Division: In our fabrics divisions, we have implemented a Textile Enterprise

Resource Package software system designed and customized by M/S Prime

Technologies, Coimbatore, India. The system has fully integrated modules covering:


• Indenting and Purchase

• Stores Inventory

• Production Planning and Order Tracking

• Job work

• Costing

• Finished Product Inventory

• Dispatch and Invoicing

• Supplier and Customer Ledgers

The system covers all of our operating units involved in the fabrics line, such as yarn

dyeing, weaving and fabric processing and all six of our fabrics warehouses, including

grey yarn and finished yarn stores, general stores and spares, dyes and chemicals

stores, grey fabrics, and finished fabrics stores. The system has been implemented at

our Integrated Facility at Doddaballapur.

Garment Division: In our garment divisions, we are in the process of implementing

an Enterprise Resource Package software system developed by TAAB Software and

Solutions Pvt. Limited, New Delhi This system has following fully integrated

modules:

• Costing and Quotation

• Sample Order Processing

• Purchase Order and Progress Monitoring

• Merchandise Suite

• Procurement Manager (Bill of Material)

• Material Inventory and Audit


• Production Suite

• Invoice and Packing List

• Management Information System Reports

• Business Accounting

The system will link the marketing office and production units through two sets of

Servers and will provide for on-line interactions. The system is under implementation

and will be ready for testing and roll out by January 31, 2007. Data transfer linkages

Between the fabrics division’s Prime Technology software and the garments

division’s TAAB software is under implementation

Longitudinal Cutting

Packing

Inspection

Longitudinal Hemming

Cross Cutting

Cross Hemming


Work flow Model


The Environment

Good environmental practice has always been a primary consideration in the

development of our business, leading us to seek practical and environmentally sound

solutions to avoid waste production. Our business activity inevitably has an impact on

the environment. We seek to minimise this impact as far as possible by operating a

policy of sustainable development and constantly researching new ways to reduce

pollution, wastage and the amount of resources used, while recycling as much as we

can. Our environmental approach comprises the following:

We are committed to actions to restore and preserve the environment;

We are committed to developing safe and clean technologies using the best

environmental practices;

We are committed to minimizing waste and pollutants, conserving resources,

and recycling materials at every stage of the product life-cycle;

We will continue to work with customers and public authorities, vigorously

pursuing the development and implementation of improved technologies and

products to minimize impact on the environment; and

We will develop effective methods and procedures, and will promote a culture

in which all employees share their commitment.

Future Prospects Of The Company

Bombay Rayon Fashions Ltd plans to invest Rs 1,100 crore in Maharashtra for

setting up fabric and garment making facilities. The company signed a

memorandum of understanding with the Government of Maharashtra. New


facilities will come up at Tarapur, Islampur, Ichalkaranji, Latur, Nanded,

Osmanabad and Amravati.About 32,000 direct and 50,000 indirect jobs will be

created. The company has Rs 400 crore as equity capital, the balance will be

obtained as debt, which has already been tied up. Yarn dyeing and fabric

processing will see an investment of Rs 450 crore each while garment

manufacturing will get Rs 200 crore. Production at two of the garment plants at

Osmanabad and Ichalkaranji in Maharashtra has already started.


CHAPTER 3

ORGANISATIONAL REVIEW

According to Waterman, organization change is not simply a matter of

structure, although structure is significant variable in the management of change.

Again it is also not a simple relationship between strategy and structure, although

strategy is also a critical aspect. In their view effective organizational change may be

understood to be a complex relationship between strategy, structure, system, style,

skills & shared values. The first three elements-strategy, structure &system are

considered the "hardware" of success. The next four – style skills, staff, and shared

values are called the "software".

BRFL STRATEGY:

1. To strengthen the fabric business in order to have full control of entire fabric

supply chain- from yarn dyeing, weaving to processing of fabrics. They intend to

achieve this through implementation of new project facilities. This would not

only help them to achieve total quality control at each stage, it would enable them

to cut out delays in delivery of fabrics to their garment units. These apart there

stress on building & enhancing their design capabilities enables them to present

their own collections & offer total package solutions to the customers.

2. To rapidly expand garments capacity to meet the growing opportunity in the

market place and in the process actively consumes 30-50% of their own

production of fabric.


3. Position there selves in the mid to high end garment segment such that they

enhance their acceptance and improve their capabilities to meet the stringent

compliance stipulated by such customers once this is achieved, entering the

commodity market would pose little difficulty.

4. Our marketing and selling strategy

We have positioned our company in a reasonably strong position in all the business

segments in which we operate due to our quality, consistency, pricing and delivery

schedules. Our customer profile for fabrics include leading garment exporters in

India. Leading garment makers in the overseas markets, domestic garment

manufactures, domestic wholesalers and traders and retailers. In addition, we have

developed a strong network of marketing agents who sell fabrics to various small

sized units and traders thereby ensuring greater penetration of markets. As far as

garment customers go, top labels in garments in the European and US markets are on

our customer list.


Organisational Structure:

Senior Factory Manager

Cutting

Manager

Pattern master

In charge

cutters

C A D

Q C

Later

Relayes

Helpers

H R D

Manager

H R Executi

ves

H R Assista

nt

welfare

Nurse

Printing

Encharge

Operators

Q C

Helpers

E M B

Manager]

Supervisors

operators

Helpers

Designer

Designer Assistan

t Designer

Dispatch

Dispatch Runner Framer

s

Washing

Manager

BoilerOperat

ors

Chemical

StoreHelper

Helpers

Fabric

Manager

Encharge

Assistants

Runner

Helpers.


Organisational System:

At BRFL, internal control systems and procedure are adequately commensurate with the

size and structure of the business. The operating and business control procedures have been

planned and implemented in a manner that ensures efficient use of resources, as well as

compliance with procedures and regulatory requirements. The Company has set up its own

internal audit department and has also engaged a firm of Internal Auditors to carry out

audits extensively throughout the year with the objective of testing the adequacy and

effectiveness of internal controls and recommending improvements. The Audit Committee

hold discussions with auditors periodically about internal control systems, the scope of audit

including the observations and reviews of the quarterly, half yearly and annual financial

statements before submission to the Board. The Audit Committee ensures compliance of

internal control systems.

Management system for Human Resources:

Facilities seeking to gain and maintain certification must go beyond simple compliance to

integrate the standard into their management systems and practices.

Technology Initiatives:

Bombay Rayon Fashions Limited has partnered with Datatex and SAP to implement a

companywide Enterprise Resource Planning tool (ERP) to cover all textiles and garmenting

processes under one roof. Datatex specializes in the Textile and Garment industry.

Today there are over 11500 workstations using datatex ERP in 38 countries in 14

different languages. Its customers include some of the world's largest and most


important textile manufacturers. Datatex serves its international customers through

its offices in Italy, Israel, the USA, Germany and Switzerland.

FINANCE DEPARTMENT

Sanctions Rs. 400 m loan for project Exim Bank invests Rs. 50 mn in Bombay Rayon

Fashions Equity

MUMBAI, 25th July 2005: Bombay Rayon Fashions Ltd. becomes the first Indian

company to receive direct Equity Investment of Rs. 50 million from Export Import

Bank of India (Exim Bank). “The Bank is subscribing 10,00,000 equity shares of Rs.

10 each at a premium of Rs. 40 per share,” announced Mr. S. Sridhar, ED of Exim

Bank, here today.

Bombay Rayon Fashions Ltd., a Rs.150 crore company engaged in Manufacturing of

fabrics and garments for Exports, is setting up Rs.161 crore greenfield integrated

textiles Unit with production Facilities for yarn dyeing, weaving, processing and

garment mfg. at Apparel Park, Doddabarllapur and Bangalore. Exim Bank has also

sanctioned a term loan of Rs. 40 crore for this Project.

Bombay Rayon Fashions Ltd. (BRFL) has been allocated 20.26 acres of land in

Industrial Township developed by Karnataka Government at Doddaballarpur Apparel

Park, 30kms from Bangalore. The Apparel Park has been modeled on international

lines with modern infrastructure and dedicated power and water supply and common


effluent treatment plant. The other leading companies coming up to set up their

projects in the Park includes Raymonds, Gokaldas Images and Himatsingka Seide.

Bombay Rayon Group established by Mr. Janardan Agarwal in 1986 with a modest

beginning in manufacturing of fashion fabrics at present is considered amongst

India’s leading manufacturers and exporters of fashion fabrics and garments with a

State-of-the-art manufacturing facilities at New Mumbai, Silvassa, Sonale and

Bangalore fully backed by the facilities of product development, design studio and

efficient sampling infrastructure to provide the quality service to its customers in

India and abroad.

Presently the group has a strong presence in fashion fabrics and garment segment and

is catering to various international brands from Europe and U.S.A. such as C & A,

DKNY, Liz Claiborne, Wrangler (VF Group), Federated Stores, Tom Tailor, Guess

and Kiabi. With multifold expansion of garment capacity on the anvil, negotiations

are on with premium labels in international market,” said Bombay Rayon Fashions

MD Mr. Prashant Agarwal. “The main reason that the group is able to attract such

well known names in fashion garments, is the group’s ability to offer fabric

collections based on seasonal fashion trends and colour choices, expertise in design of

fabrics as specified by the customers, garment designs and samples meeting the

stringent quality required by discerning customers in Europe and U.S.A,” he added.

BRFL’s new project with integrated facilities of weaving, process house and garments

has been approved by the High Level Committee of Karnataka Government headed

by the Chief Minister. This project as Composite Textile Unit will have the

production capacity of 4000 kg. per day of yarn dyeing, 104 looms of weaving,

93,999 meters per day of processing and 22,000 pieces per day of garments. The total


cost of the project is envisaged at Rs. 246.72 crores as per the detailed Techno-

Economic Feasibility Report prepared by M/s. Gherzi Eastern Limited. The loans for

the project have been tied up with the Banks under TUFS making the Company

eligible for interest subsidy of 5% and for processing machinery a direct subsidy of

10% of the investment amount.7

Sanctions Rs. 400 m loan for project Exim Bank invests Rs. 50 mn in Bombay Rayon

Fashions Equity

Bombay Rayon Fashions Ltd. becomes the first Indian company to receive direct

Equity Investment of Rs. 50 million from Export Import Bank of India (Exim Bank).

“The Bank is subscribing 10,00,000 equity shares of Rs. 10 each at a premium of Rs.

40 per share,” announced Mr. S. Sridhar, ED of Exim Bank, here today.

Bombay Rayon Fashions Ltd., a Rs.150 crore company engaged in Manufacturing of

fabrics and garments for Exports, is setting up Rs.161 crore greenfield integrated

textiles Unit with production Facilities for yarn dyeing, weaving, processing and

garment mfg. at Apparel Park, Doddabarllapur and Bangalore. Exim Bank has also

sanctioned a term loan of Rs. 40 crore for this Project.

Bombay Rayon Fashions Ltd. (BRFL) has been allocated 20.26 acres of land in

Industrial Township developed by Karnataka Government at Doddaballarpur Apparel

Park, 30kms from Bangalore. The Apparel Park has been modeled on international

lines with modern infrastructure and dedicated power and water supply and common

effluent treatment plant. The other leading companies coming up to set up their

projects in the Park includes Raymonds, Gokaldas Images and Himatsingka Seide.


Bombay Rayon Group established by Mr. Janardan Agarwal in 1986 with a modest

beginning in manufacturing of fashion fabrics at present is considered amongst

India’s leading manufacturers and exporters of fashion fabrics and garments with a

State-of-the-art manufacturing facilities at New Mumbai, Silvassa, Sonale and

Bangalore fully backed by the facilities of product development, design studio and

efficient sampling infrastructure to provide the quality service to its customers in

India and abroad.

Presently the group has a strong presence in fashion fabrics and garment segment and

is catering to various international brands from Europe and U.S.A. such as C & A,

DKNY, Liz Claiborne, Wrangler (VF Group), Federated Stores, Tom Tailor, Guess

and Kiabi. With multifold expansion of garment capacity on the anvil, negotiations

are on with premium labels in international market,” said Bombay Rayon Fashions

MD Mr. Prashant Agarwal. “The main reason that the group is able to attract such

well known names in fashion garments, is the group’s ability to offer fabric

collections based on seasonal fashion trends and colour choices, expertise in design of

fabrics as specified by the customers, garment designs and samples meeting the

stringent quality required by discerning customers in Europe and U.S.A,” he added.

BRFL’s new project with integrated facilities of weaving, process house and garments

has been approved by the High Level Committee of Karnataka Government headed

by the Chief Minister. This project as Composite Textile Unit will have the

production capacity of 4000 kg. per day of yarn dyeing, 104 looms of weaving,

93,999 meters per day of processing and 22,000 pieces per day of garments. The total

cost of the project is envisaged at Rs. 246.72 crores as per the detailed Techno-

Economic Feasibility Report prepared by M/s. Gherzi Eastern Limited. The loans for


the project have been tied up with the Banks under TUFS making the Company

eligible for interest subsidy of 5% and for processing machinery a direct subsidy of

10% of the investment amount.7

Marketing Department

Marketing and Selling strategy

The company in a reasonably strong position in the entire business segment in

which we operate due to our quality, consistency, pricing and delivery schedules

our customer profile for fabrics include leading garment exporters in India.

Leading garment makers in the overseas markets, domestic garment

manufacturers, domestic wholesalers and traders and retailers. in addition, we

have developed a strong network of marketing agents who sells fabrics to various

small sized unit and traders there by ensuring greater penetration of markets. As

far as garment customers go, top labels in garments in the European and US

markets are on our customer list.

The local retail market is well developed and we have been catering to this

market for almost 2 decades. We have a network of over 10 agents and 70

distributors catering to network of more than 2000 retailers spread across

India. Presently in the domestic retail division, we have a turnover of around Rs

200 lacks per month, which we plant to increase to Rs. 300 lacks per month.

The weaving capacity is to be increased by 48 machines to 198. The garment

capacity win go up more than four times to 28,000 pieces per day. The

prospectus also mentions that, along with other intermittent expansions, the

garment capacity win increase 10 times to 60,000 pieces per day by April 2006.

Presently BRFL exporting 100% of our garments. However supply fabrics to the


domestic garment exporters we have positioned ourselves as a multi product,

multi fiber and multi market player ensuring that our target market is a diverse

mix of the domestic fabrics market, garment export trade and international

market. Our manufacturing facilities are spread across four locations at Navy

Mumbai, silvers, Somali in Thane district and Bangalore, fully backed by the

facilities for product development, design studio and efficient sampling

infrastructure to provide quality services to its customers in India and abroad. We

currently employed over 5000 people.

Presently BRFL has 250 weaving machines producing approximately 20 million

meters of woven fabric. Per annum 2800 sewing machine with production

capacity of 8-4 millions garments per annum.

A functional structure is well uniting to organizations which have a single or

dominant core product because each subunit becomes extremely adept at performing

its particular portion of the process. The organization is structured according to

functional areas instead of product lines. The functional structure groups specialize in

similar skills in separate units. This structure is be t used when creating specific,

uniform product_ they are economically efficient, but lack flexibility. Communication

between functional areas can become efficient if there is proper coordination between

HR, Customer Service & Operation, IT, Finance, Sales and Marketing team etc

GENERAL MANAGER

MANAGING DIRECTOR

MANAGER

ASST.GENERAL MANAGER

MANAGER-HR PERSONAL OFFICER

HR-EXECUTIVEWELFARE OFFICER PERSONAL ASSUSTANTPERSONAL ASSISTANT

SUPERITENDENT

SECTION HEAD

MANAGER-ASSISTANT

CEO

ASSISTANTWORKER


HUMAN RESOURCES

MANAGER-HR

HR-EXECUTIVE


HR structure of the company

Human resources are an integral and important part of any organization. One of the

key pillars of the Company’s success has been its people. BRFL has always

recognized the importance of human capital and valued it highly. The Company has

put in place sound policies for the growth and progress of its employees. Lot of

emphasis and efforts are made to create a working environment that will encourage

innovation, enhance work satisfaction and build a merit driven organization. The

Company’s human resource vision is to create a committed workforce through people

enabling 43 processes and knowledge sharing practices based upon its value system.

As on 31st March 2008, BRFL consolidated had 24,233

Skills

Employee Development Policy and Training

WELFARE OFFICER


Our human resource vision is to create a committed workforce through people

enabling processes and knowledge sharing practices based upon our value system. We

believe that learning and development is an integral part of our business. We have

annual assessment processes for every level within the organization, including top130

level management. Under this system, employees are subject to performance appraisal

and are assessed on specific skill requirements. For each employee, areas of

development are identified and training is given in those areas, based on the

employee's career plan. We also use these assessment processes to carry out

promotions at all levels, through a completely transparent process.

Compensation Policy

Our compensation policy is based on the qualifications, age, experience and level of

the employees. The policy also takes into account standards industry practices.

Compensation is serves as main tool attract and retain talent in the Company.

Health and Safety

We follow a strict code of health and safety practices in the workplace. The code is

monitored regularly by internal management reviews, which involve representatives

from all areas of the business. The Company reviews and updates the code regularly,

ensuring that new legislation and recommended practices are incorporated and

followed. We constantly strive to remain eco-friendly by adhering to the highest

international standards of manufacturing, effluent treatment and by using azo-free


dyes and chemicals to ensure the welfare of our consumers and the sanctity of our

natural environment.

Initiatives

i. Social initiatives:-

Bombay Rayon has initiated the implementation of SA8000 for its

Doddaballapur Mill. SA8000 is a global social accountability standard for decent

working conditions, developed and overseen by Social Accountability International

(SAI). SAI offers training in SA8000 and other workplace standards to managers,

workers and auditors. It contracts with a global accreditation agency, Social

Accountability Accreditation Services (SAAS) that licenses and oversees auditing

organizations to award certification to employer that comply with SA8000.

SA8000 is based on the UN Universal Declaration of Human Rights, Convention on

the Rights of the Child and various International Labour Organization (ILO)

conventions. SA8000 covers the following areas of accountability:

Child labour:- No workers under the age of 15; minimum lowered to 14 for countries

operating under the ILO Convention 138 developing-country exception; remediation

of any child found to be working.

Forced labour:- No forced labor, including prison or debt bondage labor; no lodging

of deposits or identity papers by employers or outside recruiters.

Workplace safety and health:- Provide a safe and healthy work environment; take

steps to prevent injuries; regular health and safety worker training; system to detect

threats to health and safety; access to bathrooms and potable water.


Freedom of Association and Right to Collective Bargaining: Respect the right to

form and join trade unions and bargain collectively; where law prohibits these

freedoms, facilitate parallel means of association and bargaining.

Discrimination: No discrimination based on race, caste, origin, religion, disability,

gender, sexual orientation, union or political affiliation, or age; no sexual harassment

Discipline: No corporal punishment, mental or physical coercion or verbal abuse

Working hours:- Comply with the applicable law but, in any event, no more than 48

hours per week with at least one day off for every seven day period; voluntary

overtime paid at a premium rate and not to exceed 12 hours per week on a regular

basis; overtime may be mandatory if part of a collective bargaining agreement.

Remuneration: Wages paid for a standard work week must meet the legal and

industry standards and be sufficient to meet the basic need of workers and their

families; no disciplinary deductions.

Management system for Human Resources:- Facilities seeking to gain and

maintain certification must go beyond simple compliance to integrate the standard

into their management systems and practices.

Health and Safety:- We follow a strict code of Health & Safety practices at

conditions in the workplace and beyond. The code is monitored continually by

internal management reviews, which involve representatives from all areas of the

business. The group also reviews and updates the code regularly. Ensuring that all

legislation and recommended practice is complied with. We constantly strive to

remain eco-friendly by adhering to the highest international standards of


manufacturing, effluent treatment and by using azo-free dyes and chemicals to ensure

the welfare of our consumers and the sanctity of our natural environment.

The Environment:- Good environmental practice has always been a prime

consideration in Bombay Rayon’s development, leading us to seek practical solutions

to avoid the production of waste. Our business activity inevitably has an impact on the

environment. We seek to minimize this impact as far as possible by operating a policy

of sustainable development and constantly researching new ways to reduce pollution,

wastage and the amount of resources used, while recycling as much as we can.

We view all environmental regulations and legislation as the minimum standard to be

attained and strive to exceed them significantly where possible as the needs of the

retail industry have changed. Bombay Rayon has worked closely with our retail

partners to develop economic and environmentally friendly solutions to their waste

problems.

In The Community:- We take our responsibility to contribute to the community in

which we operate seriously. We make every effort to support our staff and the wider

society in improving our local community. The company has always taken an active

role in local communities in which it operates, supporting many worthy causes.

Bombay Rayon recognizes that its employees have an important role to play within

the wider community and seeks to provide every effort to support its staff with

charitable endeavors and local community initiatives. These activities have included

promoting and sponsorship of individual and social activities, fund raising for

hospitals and schools and coordinating with aid agencies and local authorities for

projects around the nation.


Corporate Values:- We are committed to actions to restore and preserve the

environment. We are committed to developing safe and clean technologies using the

best environmental practices. We are committed to minimizing waste and pollutants,

conserving resources, and recycling materials at every stage of the product life cycle.

We will continue to work with customers and public authorities, vigorously pursuing

the development, and implementation of improved technologies and products by

minimizing their impact on the environment. We will develop effective methods and

procedures, and will promote a culture in which all employees share this commitment.

Technology

Bombay rayon fashions limited has partnered with datatex & SAP to

implement a company wide enterprise resources planning tool (ERP) to cover all

textile & garmenting processes under one roof..

Datatex specializes in the textile & garment industry. Today there are over 11500

workstation using datatex ERP in 38 countries in 14 different languages. Its customers

include some of the world\s largest & most important textile manufacturers. Datatex

serves its international customers through its offices in Italy, Israel, the USA,

Germany & Switzerland.

The financial expertise will come from SAP through their SAP FKO module. The

ERP will sit on state of the art IBM servers which will be housed in fully redundant in

house data center in the Doddaballapur facility.

BRFL plans to invest Rs 1100crore in Maharashtra for setting of fabric &

garments making facilities. The company signed a memorandum of understanding

with the government of Maharashtra. New facilities will come up at Tarapur,


Islampur, Ichalkaranji, Latur, Nanded, Osamabad, & Amaravati about 32000 direct &

50000 indirect jobs will be created the company has Rs 400 crore as equity capital

the balance will be obtained as dedt. Which has already been tied up. Yarn dyeing &

fabric processing will see an investment of Rs 450 crore each while garment

manufacturing will get Rs 200 crore. Production at two of the garment plants at

Osamanabad and Ichalkaranji in Maharashtra has already started the Greenfield units

at Tarapur, Islampur, Latur & Nanded would raise the company’s daily fabric

processing capacity by 500000 metres & garment capacity by 100000 units.

Shared Values

We are committed to give back to the society. Our employees in the factory or office

are of utmost priority. We strive to provide them with a sound work environment.

We are committed to actions to restore and preserve the environment. We are

committed to developing safe and clean technologies using the best environmental

practices. We are committed to minimizing waste and pollutants, conserving

resources, and recycling materials at every stage of the product life cycle. We will

continue to work with customers and public authorities, vigorously pursuing the

development, and implementation of improved technologies and products by

minimizing their impact on the environment. We will develop effective methods and

procedures, and will promote a culture in which all employees share this commitment.

In this way, we aim to have an environmental performance we can be proud of, to

earn the confidence and respect of customers, shareholders, and society at large, and

to contribute to sustainable development.


Balance Sheet of Bombay Rayon Fashions------------------- in Rs. Cr.

-------------------

Mar '12 Mar '11 Mar '10

12 mths 12 mths 12 mths

Sources Of Funds

Total Share Capital 134.60 127.90 111.90

Equity Share Capital 134.60 127.90 111.90

Share Application Money 49.31 86.02 20.27

Preference Share Capital 0.00 0.00 0.00

Reserves 2,797.86 2,451.24 1,797.42

Revaluation Reserves 0.00 0.00 0.00

Networth 2,981.77 2,665.16 1,929.59

Secured Loans 2,869.74 2,765.55 2,146.72

Unsecured Loans 364.10 364.24 333.42

Total Debt 3,233.84 3,129.79 2,480.14

Total Liabilities 6,215.61 5,794.95 4,409.73

Mar '12 Mar '11 Mar '10


Application Of Funds

Gross Block 4,243.50 3,169.81 2,091.44

Less: Accum. Depreciation 518.67 301.63 165.52

Net Block 3,724.83 2,868.18 1,925.92

Capital Work in Progress 51.75 637.57 554.26

Investments 168.41 222.72 439.48

Inventories 1,773.10 1,262.87 695.58

Sundry Debtors 461.07 479.12 377.25


Cash and Bank Balance 118.48 7.08 3.06

Total Current Assets 2,352.65 1,749.07 1,075.89

Loans and Advances 1,006.15 817.46 680.88

Fixed Deposits 0.00 27.84 23.02

Total CA, Loans & Advances 3,358.80 2,594.37 1,779.79

Deffered Credit 0.00 0.00 0.00

Current Liabilities 1,051.33 478.50 267.19

Provisions 36.85 49.41 22.52

Total CL & Provisions 1,088.18 527.91 289.71

Net Current Assets 2,270.62 2,066.46 1,490.08

Miscellaneous Expenses 0.00 0.00 0.00

Total Assets 6,215.61 5,794.93 4,409.74

Contingent Liabilities 21.77 91.77 158.62

Book Value (Rs) 217.86 201.65 170.63

Interpretation:-

From the above we can observe that total share capital of the firm is increased year to

year, due to expansions of business operation in the year 2009-2011. BRF Ltd firm

has to be increased outside Debt Loans to meet the Liquidity Requirements of the

firm. Firm also a increase the Fixed assets and Current Assets has to be continually

increases year to year.


Bombay Rayon FashionsProfit & Loss account ------------------- in Rs. Cr. -------------------

Mar '12 Mar '11 Mar '10


Income

Sales Turnover 2,737.13 2,254.84 1,614.77

Excise Duty 2.17 0.00 0.00

Net Sales 2,734.96 2,254.84 1,614.77

Other Income 14.31 23.42 14.21

Stock Adjustments 321.51 205.66 150.05

Total Income 3,070.78 2,483.92 1,779.03

Expenditure

Raw Materials 1,771.96 1,462.63 1,020.20

Power & Fuel Cost 70.67 72.05 40.23

Employee Cost 230.16 212.80 172.93

Other Manufacturing Expenses 5.03 68.27 48.83

Selling and Admin Expenses 0.00 80.59 72.82

Miscellaneous Expenses 246.55 23.22 20.82

Preoperative Exp Capitalised 0.00 0.00 0.00

Total Expenses 2,324.37 1,919.56 1,375.83

Mar '12 Mar '11 Mar '10


Operating Profit 732.10 540.94 388.99

PBDIT 746.41 564.36 403.20


Interest 221.53 145.21 93.54

PBDT 524.88 419.15 309.66

Depreciation 217.23 136.67 68.07

Other Written Off 0.00 0.00 0.00

Profit Before Tax 307.65 282.48 241.59

Extra-ordinary items 0.11 0.00 -0.32

PBT (Post Extra-ord Items) 307.76 282.48 241.27

Tax 101.24 55.78 65.33

Reported Net Profit 206.51 226.70 175.91

Total Value Addition 552.41 456.92 355.64

Preference Dividend 0.00 0.00 0.00

Equity Dividend 0.00 19.82 16.79

Corporate Dividend Tax 0.00 3.29 2.85

Per share data (annualised)

Shares in issue (lakhs) 1,346.00 1,279.00 1,119.00

Earning Per Share (Rs) 15.34 17.72 15.72

Equity Dividend (%) 0.00 15.00 15.00

Book Value (Rs) 217.86 201.65 170.63

From the above Table analyses that Profit and Loss Account showing the overall

financial position of Company. The BRF Ltd showing the increasing the overall

financial position of the company. Textiles industry growth trend in present scenario,

also wide demanded for garments products.


RISKS AND CONCERNS

As the Company gets into the expansion mode in a competitive environment, it is

bound to undertake risks as it capitalizes on several new opportunities. The Company

ensures that the risks it assumes are commensurate with better returns.

Economic Risk

The business is substantially affected by the prevailing economic conditions in

India.

Factors that may adversely affect the Indian economy and in turn the business include

slowdown in GDP growth, rise in interest rates, inflation, changes in tax, trade, fiscal

and monetary policies, etc. However, given the estimate of at least 8% growth in the

economy till 2010, rising per capita disposable income, burgeoning consumer

spending, rapid change in consumer preference towards high-end, value added

products and increased organized retail penetration with global majors sourcing from

and setting up base in India, the Company does not expect to be significantly affected

by this risk.

Labour Risk

This risk arises from being a labour intensive business and consequently being

exposed to the vagaries of the work force.

India is one of the cheapest countries in the world in terms of labour cost. Over the

years, the Company has had no history of labour disputes. All of its units enjoy

cordial industrial relations. Thus, the Company feels that the risk is substantially

mitigated, if not completely.

Fashion Risk


This risk arises as the Company is in the fashion business where designs have a

short shelf life.

BRFL has an in-house Design Unit where a team of designers come out with 5 new

designs on a daily basis, based on current fashion trends in the domestic and

international market. The Company has a lower lead time of 60 days in comparison to

the industry average of 90 days, which for fast track delivery is even lower at 30 days.

BRFL’s manufacturing diversity implies that machines are compatible with a wide

variety of fabrics including cotton, nylon, polyester, linen and blends, thus

always retaining full capacity. This hedges against changing trends in fashion. BRFL

also works closely with its customers. Thus, the Company believes it has sufficient

mitigation in place.

Currency Risk

This risk arises from the exposure to foreign currency and the volatility

associated with the underlying currencies.

The Company follows the normal prudence of hedging it receivables. Short order lead

times also protect the Company from the effects of currency fluctuations. Further,

BRFL is working towards reducing contract cycles as well as the cost of production.

Simultaneously, the Company is entering into forward contracts and increasing prices

and raw material imports as measures to mitigate currency risk.

Competition Risk

This risk arises from more players wanting a share in the same pie.

The textile and apparel industry in India is growing at a fast pace. With the phase-out

of the quota system since 1st January 2011 and the incentives given by the


Government, the industry has become even more competitive. BRFL has generated

considerable brand goodwill in the market. The Company’s significant market share,

long-term relationships with clients, high productivity, low labour costs, short lead

time, manufacturing flexibility, in-house Design Unit and experienced management

team give BRFL a considerable edge over its peers. Significance expansion of

capacities is also in the pipeline. The Company is also moving up the value chain by

offering higher value added products, thus differentiating itself from its competition.

Hence, BRFL believes that this risk is sufficiently mitigated.

Concentration Risk

This risk arises from excessive dependence on any customer or segment for

business.

The Company’s client base consists of garment manufacturers, retailers and dealers in

the domestic market as well as reputed international buying houses and retailers in the

overseas market. No buyer accounts for more than 10% of the Company’s sales.

Besides, BRFL’s multi-market, multi segment presence mitigates the risk of downturn

in demand from any particular market or segment. Thus, the Company does not

expect to be significantly affected by this risk. Concerns like shortage of skilled

manpower and technological obsolescence remain. However, these are threats faced

by the entire industry. With superior methodologies and innovative processes and

systems, the Company is well positioned to lead a high growth path.

Internal control systems and their adequacies

The Company’s well defined organizational structure, documented policy guidelines,

defined authority matrix and internal controls ensure efficiency of operations,


compliance with internal policies and applicable laws and regulations as well as

protection of resources. Moreover, the

Company continuously upgrades these systems in line with the best available

practices. The internal control system is supplemented by extensive internal audits,

regular reviews by management and standard policies and guidelines to ensure

reliability of financial and all other records to prepare financial statements and other

data.

8. Discussion on financial performance

Material developments in human resources Human resources are an integral and

important part of any organization. One of the key pillars of the Company’s

success has been its people. BRFL has always recognized the importance of human

capital and valued it highly. The Company has put in place sound policies for the

growth and progress of its employees. Lot of emphasis and efforts are made to create

a working environment that will encourage innovation, enhance work satisfaction and

build a merit driven organization. The Company’s human resource vision is to create

a committed workforce through people enabling processes and knowledge sharing

practices based upon its value system. As on 31st March 2008, BRFL consolidated

had 24,233 employees on its payrolls.

Cautionary statement

Statements in the Management Discussion and Analysis describing the Company’s

objectives, projections, estimates, expectations may be “forward-looking statements”

within the meaning of applicable securities laws and regulations. Actual results could

differ materially from those expressed or implied. Important factors that could make a

difference to the Company’s operations include economic conditions affecting


demand/supply and price conditions in the domestic and overseas markets in which

the Company operates changes in Government regulations, tax laws, statute and other

incidental factors.

Chapter-4

Vision, mission and Objectives

Vision:-

To be a Complete Fashion Apparel Company focused on Total Customer Orientation,

attaining a Position of Pride for stakeholders through creation of Congenial Business

Environment, offering Products and Services Par Excellence.

Mission:-

1. Enhancing our design capabilities enables us to present our own collections and offer a

total package solution to the customer

2. To rapidly expand garment capacity to meet the growing opportunity in the market place

and in the process actively consume 30-50% of our own production of fabrics.

3. Position ourselves in the mid to high end garment segment such that we enhance our

acceptance and improve our capabilities to meet the stringent.

4. Compliances stipulated by such customers once this is achieved, entering the commodity

market would pose little difficulty.

Objectives

Our corporate VISION is to be a complete apparel company. We have three pronged

strategy to realize our vision.

To be the-


• Most innovative - sought after Fashion Apparel and Fabrics Manufacturer.

• Most dependable for shortest turnaround time.

• Most reliable for quality, service and deliveries.

• Most permanently bonded with customers, suppliers and other stake holders.

• Most valued employer.

• Most looked up to for transparency, governance and social responsibility.

To strengthen our fabric business in order to have full control of entire fabric supply.

Chain- from yarn dyeing, weaving to processing of fabrics. We intend to achieve this

through implementation of new project facilities. This would not only help us achieve total

qualit5y control at each stage, it would enable us to cut out delays in delivery of fabrics to

our garment units.

Our competitive Strengths





5. Low labour cost

6. Economies of sale




9. Sampling capabilities

Quality Assurance:-

Internal quality control management systems and quality improvement systems exist

in all our plants. Quality audit teams review all aspects of quality assurance at all of

our units. Additionally, a dedicated in-house management team oversees our

implementation and adherence to stringent quality control policies across all of our

manufacturing facilities. Our quality assurance measures include:

standard operating procedures at each of our garmenting units to make them quality

compliant;

Statistical methods to identify and analyse areas of needed improvement;

A team of qualified and experienced professionals to manage quality control for

the entire manufacturing process, from the receipt of fabric to the dispatch of

garments; and

Compiling databases for future reference and analysis. Each of our divisions is

equipped with modern quality equipment to test for quality assurance and

functions in accordance with our philosophy of providing quality products to our

customers.


SWOT ANALYSIS

Strengths

Self reliant industry producing the entire supply chain from fiber/cotton to

garments/home textiles

Large and growing domestic market

Second-largest textile producer in the world

Adequate raw material supplies

Low labour cost and availability of skilled and Technical labour force

Excellence in fabric and garment designing.

Weakness

Small size and technologically outdated plants result in lack of economies of

scale, low productivity and weak quality control

Cotton availability is vulnerable to erratic monsoons and low per hectare yield

With the exception of spinning, other sectors are fragmented

Strength

WeaknessO

ppurtunity

Threats

S W O T

A N A L Y S I S


Labour laws and policies lack reforms

Infrastructure bottlenecks for handling large volumes

Opportunities

End of quota system and full integration of the textile industry.

Shift in domestic market towards readymade garments, and domestic textile

consumption increasing with growing disposable incomes.

Threats

Survival of the fittest-in terms of quality, size, delivery and cost

Pricing pressures

Stiff competition from other Asian countries

Increase in regional trade could reduce share of markets opened for India,

China and other countries.


FINDINGS:

The production of Garments has seen tremendous fluctuations over the period

and increased only during 2011-2012 and dropped off marginally in the

subsequent year.

There has been steady increase in the sales of BRF Ltd by the company over

the period of study which is just satisfactory.

It is found that number of direct labour employees has increased in 3years in

both production houses.

The BEP stands at (1.43%) level as of now and meets improvisation in the

future.

In comparison it production levels the BEP seems to be very moderate for

maximization of the returns for the company this has to increase accordingly.

On the expenses front both the variable and fixed cost have increased at levels

higher than production a need better control.

The profit on sales is stable except during the second year. Growth refers to

continuous increase in profits also which is not the present case.

All rejected materials will be sent back to the vendors within one week from

the date of purchase.

It is observed that transfer of price is based on the cost price


SUGGESTIONS:

The company should put in best efforts to increase production at a better rate

when compared to the present.

The increase in sales needs to be substantial and not just minimal which the

case with the company as now is. A higher increase in the sales would better

the company’s prospects of contributing towards the profit.

BEP being dependent on variable cost and fixed cost needs a better control so

that the BEP can be improvised upon for the growth of the company.

Different costing methods and techniques have to be adopted to check the

growing costs to improve the contribution for the company.

Efforts have to be put in by the company to enhance profits every year

continuously by bringing down costs, increase in production as well as sales.

If the company is looking at the prospect of increasing its efficiency, it has to

increase the production and implement various core control methods and

techniques.

In fierce competitive environment it has to put all resources to optimal usage

to get the maximum profits.


CONCLUSIONS

BRFL is an established organization. All the workers in the organization are

ground proud of the fact that, they are serving the number one company in the world

of garments production.

The main strength of the company is the manpower and the positive image

which they have towards the company. The employees in BRFL are dedicated and

determined in their job. They are actively participating with the management to

achieve the company’s goal. The employees have got such a positive image towards

the organization, it’s because the company takes due consideration for the Human

Resources.

BRFL Company Ltd. Is trying its best to make its employees happy, by

providing to make its employees happy, by providing statutory and non-statutory

welfare facilities because the company believes that “Productivity of an organization

depends upon the people who work in the unit”.

Management should create awareness among the employees regarding the

expenditure incurred on welfare facilities because most of the employees are not

aware of it, most of the employees have also agreed that, they are ready to share a

portion of expenditure with the management, increase of the management introduces

new welfare facilities.

This study mainly focuses on the importance of work environment and its

significances in the development of an organization and some important aspects to the

organization to maintain better work environment in an organization.

Documents

BRFL Fulll A B.docx