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    BOMBAY RAYON FASHIONS LTD

    PRESIDENCY COLLEGE 1

    CHAPTER-1

    INDUSTRY PROFILE

    THE TEXTILE INDUSTRY

    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.

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    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

    countrys overall economy. Currently, the textile industry accounts for

    some 14% of industrial production and about 4% of Indias 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 textileindustry 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

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    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 Indias export turnover

    to US$50 billion by 2010.

    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 countrys 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.

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    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 issubstantially higher than the labour cost in India. Labour costs in India

    are some of the lowest in the world. Indias 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 aglobal 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. Indias ability to effectively translate the latest fashion trends into

    final products gives the Indian textile industry an edge over other

    countries.

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    Fabric Production

    Since 1999, the proportion of man-made fibers in Indias 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 industrywith 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.

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    COMPANY PROFILE

    Company History - Bombay Rayon Fashions Company was

    incorporated as Mudra Fabrics Private Limited (MFL) on May 21, 1992.

    On October 13, 1992 Company was converted into a public limited

    company. Subsequently, on September 30, 2004, name of the Company

    was changed to Bombay Rayon Fashions Limited (BRFL). In March

    2005, with a view to consolidate business of the Group, Bombay Rayon

    Private Limited (BRPL) was amalgamated with the Company and two

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

    Clothing were taken over by BRPL and BRFL 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, BRFL 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 BRFL 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.

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    Background 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

    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 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 target market

    is a diverse mix of the domestic fabrics market and the international

    fabrics and garments market. BRFL eight manufacturing units are

    located in Navi Mumbai, Silvassa, and 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 to provide quality services to customers in

    India and abroad. BRFL currently employ over 5,800 people. With

    current manufacturing capacity, we can produce some 50 million meters

    of fabric and 12 million garments annually.

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    Nature of business

    BRFL is a vertically integrated company engaged in the

    manufacture of a variety of fabrics and garments at modern production

    facilities.

    Manufacture of Woven Fabric

    For nearly two decades BRFL have been manufacturing woven

    fabric. BRFL 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, BRFL have also invested in and installed at

    plants modern preparatory machines used for winding, sizing, and directand sectional warping. The table below lists some of BRFL

    manufacturing equipment.

    Procurement of Grey Yarn and Yarn Dyeing

    BRFL 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.

    BRFL use grey or dyed yarn depending on the nature of the orders

    receives. If the yarn needs to be dyed, BRFL currently outsource that

    process.

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    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. BRFL 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.

    BRFL inspect the grey fabric and mend blemishes wherever required.

    Afterwards, BRFL pack the fabric and send it to the process house.

    Fabric Processing and Finished Fabric Checking

    BRFL 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.

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    Procurement of fabric

    Depending on the customer order and design, 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 BRFL use comes

    from integrated manufacturing facility in Bangalore. Depending on

    demand, BRFL 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/designdepartment. 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 labelled 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,

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    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. BRFL also use thread-removal machines, which vacuum

    loose, superfluous thread from the shirt.

    Final Inspection

    All the garments BRFL manufacture are subjected to stringentquality 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.

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    Product Profile

    FABRIC

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    Every fabric in the Bombay Rayon collection must pass the

    ultimate comfort test. Thats why we take the time and expense to

    ensure it stays so unbelievably soft and comfortable. BRFL commitment

    to genuine Bombay Rayon quality shows in the fabrics used. Along with

    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. Bombay Rayon

    understands the needs of this exciting industry and is committed to

    supporting customer requirements. BRFL line combines quality and style

    with an extensive offering of mens styling.

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    Comfortable, pure and simple thats what the Apparel Collection

    from Bombay Rayon is all about. Great clothes in easy, contemporary

    styles made from soft, durable fabrics that youll enjoy wearing to the

    office, on the road and over the weekendwhenever and wherever your

    active life takes you.

    BRFL 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, are

    proud to offer apparels of the highest quality, with construction details

    that are evident in every style we make. BRFL 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, BRFL are 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 collection.

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    Brief Description of different steps involved in garmentmanufacturing 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. BRFL have a team of skilled

    professionals who makes this assessment. BRFL 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

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    4. Final checking of garments

    BRFL subject 100% of the garments that 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 have ventured into thevalue 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.

    CUSTOMERS PROFILE

    U S A

    U S A

    U S A

    U S A

    U S A

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    MARK ECKO U S A

    Italy

    Italy

    Germany

    Otto's Germany & Switzerland

    Germany

    France

    Italy

    UK

    UK

    UK

    Kickers UK

    UK

    UK

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    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.

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    Garment Manufacturing

    Casual and formal wear garments for men and women are

    manufactured at different locations in Bangalore. These are exported tointernational buying houses and retailers across the EU and USA. While

    the current facilities produce 30 million pieces per annum, BRFL 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 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.

    RetailThe 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 honored as the 'largest shirt maker in India'. BRFL

    also received Dun & Bradstreet - Rolta Corporate Award as one of

    India's top 500 companies.

    BRFL 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

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    frequency rate." This award was presented by Mr. Mallikarjuna

    Kharge, honorable Minister for Labour and Employment -

    Government of India which was received by Vice President Mr. M

    Gopi on 27 Sept 2010 at New Delhi.

    Management Pattern by Bombay Rayon

    SL. 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

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    Area of Operations

    Bombay Rayon Fashions Limited (BRFL) is Indias foremost,

    vertically integrated textile group, engaged in the manufacture, exportsand 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

    BRFL 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

    European customers.

    BRFL intend to open more overseas offices to make products

    more readily available and accessible to customers. BRFL strategy is to

    give 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

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    penetration of the retail market. BRFL garment customers include top

    brands from the U.S. and Europe.

    BRFL Market Segments

    The following table indicates BRFL presence by market segment:

    BRFL Distribution channels

    Products/market segments Distribution channel

    Fabrics-Domestic sale

    Fabrics-Exports

    Garments-Exports

    BRFL-Marketing

    agents/wholesalers/garmentmanufacturers/retailers

    BRFL-Overseas garmentmanufacture/exporters/internationalbuying houses

    BRFL-Buying houses/internationalbrands/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 company for

    their orders.

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    trade fairs to develop new relationships and to keep abreast of

    contemporary fashion trends.

    Use of Information Technology ("IT")

    BRFL are a technology-oriented organisation and use information

    systems extensively across our operations. Most of critical functions,

    such as operations, supply chain, finance and accounts and human

    resources, are linked through a computer network. This has enabled to

    improve operational efficiency, reduce costs of operations, and enhance

    overall cost efficiency.

    Fabrics Division: In fabrics divisions, BRFL 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 operating units involved in the fabrics

    line, such as yarn dyeing, weaving and fabric processing and all six of

    fabrics warehouses, including grey yarn and finished yarn stores,

    general stores and spares, dyes and chemicals stores, grey fabrics, and

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    WORKFLOW MODEL

    Longitudinal cutting

    Longitudinal Hemming

    Cross Cutting

    Cross Hemming

    Inspection

    Packing

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    The Environment

    Good environmental practice has always been a primary

    consideration in the development of business, leading to seek practicaland environmentally sound solutions to avoid waste production. BRFL

    business activity inevitably has an impact on the environment. BRFL

    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. BRFL environmental approach comprises

    the following:

    BRFL are committed to actions to restore and preserve the

    environment;

    BRFL are committed to developing safe and clean technologies using

    the best environmental practices;

    BRFL are committed to minimizing waste and pollutants, conserving

    resources, and recycling materials at every stage of the product life-

    cycle;

    BRFL 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

    BRFL will develop effective methods and procedures, and will promote

    a culture in which all employees share their commitment.

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    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. Thecompany 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 aninvestment 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.

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    PRESIDENCY COLLEGE 33

    CHAPTER 2

    ORGANISATIONAL STRUCTURE

    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 areconsidered 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

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    ORGANISATIONAL STRUCTURE

    MANAGING DIRCTOR

    GENERAL MANAGER

    PURCHASE

    DEPT

    ERCHA

    DISER

    EPT

    HRDSTORES

    DEPT

    MRKTNG

    DEPT

    MAINTAINA

    NCE DEPT

    PRODN

    DEPT

    FINANCE

    DEPT

    QC

    DEPT

    MASTER

    TAILOR

    HELPER

    MASTER

    HELPER

    SENIOR

    MERCHAND

    ASST MERCMANAGERS

    STAFF

    ASSISTANTS

    CHECKINGDEPT

    EACH BATCH

    CHECKING DEPT

    DEPT-TOTAL BATCH

    SUPERVISORS

    MANAGER FINISHIN

    INCHARGE

    IRON

    DEPT

    CHECKIN

    DEPT

    STAIN REMOVER

    KHAJA &BOTTON DEPT

    PACKING

    DEPT

    ADMIN

    TRIM

    DEPT

    FABRIC

    MAINTAI

    NANCE

    MEDICAL

    TEAM

    MANAGE

    RS ASSIST

    FINISHIN

    G DEPT

    PRODUCTI

    ON BATCH

    CUTTING

    SECTION

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    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

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    different languages. Its customers include some of the worlds largest

    and most important textile manufacturers. Datatex serves its

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

    Germany and Switzerland.

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    BOMBAY RAYON FASHIONS LTD

    PRESIDENCY COLLEGE 41

    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 Indias 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 groups 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.

    BRFLs 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

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    BOMBAY RAYON FASHIONS LTD

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    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.

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    BOMBAY RAYON FASHIONS LTD

    PRESIDENCY COLLEGE 43

    BALANCE SHEET OF BOMBAY RAYON FASHIONS LTD (IN CRORES)

    Mar 12 Mar11 Mar10

    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

    Net worth 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

    Mar12 Mar11 Mar11

    12 mths 12 mths 12 mths

    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

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    BOMBAY RAYON FASHIONS LTD

    PRESIDENCY COLLEGE 53

    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:-BRFLS 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

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    PRESIDENCY COLLEGE 57

    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, BRFL aim to have an environmental performance & can be

    proud of, to earn the confidence and respect of customers,

    shareholders, and society at large, and to contribute to sustainable

    development.

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    BOMBAY RAYON FASHIONS LTD

    PRESIDENCY COLLEGE 63

    Concentration Risk

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

    business.

    The Companys 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 Companyssales. Besides, BRFLs 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 Companys 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.

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    BOMBAY RAYON FASHIONS LTD

    PRESIDENCY COLLEGE 65

    CHAPTER-4

    SWOT ANALYSIS

    Strengths

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

    to garments/home textiles

    -largest textile producer in the world

    Adequate raw material supplies

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    PRESIDENCY COLLEGE 70

    CHAPTER 5

    FINDINGS & SUGGESTIONS, RECOMMENDATIONS

    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.

    company over the period of study which is just satisfactory.is found that number of direct labour employees has increased in

    3years in both production houses.

    the future.

    for maximization of the returns for the company this has to increaseaccordingly.

    at levels higher than production a need better control.

    the second year. Growth

    refers to continuous increase in profits also which is not the present

    case.

    from the date of purchase.

    he cost price

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    BOMBAY RAYON FASHIONS LTD

    PRESIDENCY COLLEGE 72

    SUGGESTIONS:

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

    better rate when compared to the present.

    which the case with the company as now is. A higher increase in the

    sales would better the companys prospects of contributing towards the

    profit.

    and fixed cost needs a better

    control so that the BEP can be improvised upon for the growth of the

    company.

    check the growing costs to improve the contribution for the company.

    ve to be put in by the company to enhance profits every year

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

    sales.

    has to increase the production and implement various core control

    methods and techniques.

    usage to get the maximum profits.

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    BOMBAY RAYON FASHIONS LTD

    BIBLIOGRAPHY

    NEWS PAPERS AND MAGAZINES

    COMPANY RECORDS AND REPORTS

    LIBRARIES VISITED ---------- COLLEGE LIBRARY

    BOOKS REFERRED

    1. HUMAN RESOURCE MANAGEMENT -- ASHWATHAPPA.KMcGraw-HillEducation-2010

    2. FINANCE MANAGEMENT ---PRASANNA CHANDRATata McGraw-HillEducation-2008

    3. HUMAN RESOURCE MANAGEMENT --V S P RAO---2nd edition-excelpublications

    4. MARKETING MANAGEMENT ---PHILIPS KOTLER4th edition-Pearson2011

    Website

    http://www.researchandmarkets.com/research/ssnxqf/bombay_rayon

    http://www.bombayrayon.com/source/social.html

    http://www.researchandmarkets.com/reports/2336396/bombay_rayon_fashion_limited_funda

    http://www.researchandmarkets.com/research/ssnxqf/bombay_rayonhttp://www.researchandmarkets.com/research/ssnxqf/bombay_rayonhttp://www.bombayrayon.com/source/social.htmlhttp://www.bombayrayon.com/source/social.htmlhttp://www.researchandmarkets.com/reports/2336396/bombay_rayon_fashion_limited_fundamental_company.htmlhttp://www.researchandmarkets.com/reports/2336396/bombay_rayon_fashion_limited_fundamental_company.htmlhttp://www.bombayrayon.com/source/social.htmlhttp://www.researchandmarkets.com/research/ssnxqf/bombay_rayon