Bright Brothers Limited

DIRECTOR'S REPORT

Dear Shareholders,

On behalf of the Board of Directors, it is our pleasure to present the 69th Annual Report together with the Audited Statement of Accounts of Bright Brothers Limited ("the Company") for the year ended 31st March, 2016.

Summary of Operations:

The total operational income for the year ended 31st March, 2016 stood at Rs. 15,441.56 lakhs as against Rs. 16,242.22 lakhs in the previous year resulting in a decrease of Rs. 800.66 lakhs as compared to the previous year.

The Operating Profit before Depreciation, Finance Cost and Tax for the year ended 31st March, 2016 amounted to Rs. 179.03 lakhs as against Rs. 534.68 lakhs in the previous year showing a decrease of 66.52% due to changes in the product mix, pricing, increase in operating costs and provisions.

The Year in Retrospect:

In 2015, global economic activity remained subdued. Growth in emerging markets and developing economies, while still accounting for over 70% of global growth, declined for the fifth consecutive year.

Three key transitions continue to influence the global outlook:

(1) The gradual slowdown and rebalancing of economic activity in China away from investment and manufacturing towards consumption and services;

(2) Lower prices for energy and other commodities; and

(3) A gradual tightening in monetary policy in the United States in the context of a resilient U.S. recovery as several other major advanced economy central banks continue to ease monetary policy.

Outlook for the current year:

In the midst of a weak global economy and the crash of the Chinese stock market, India's economic growth rate has eclipsed all others. The Indian economic outlook for 2016 is bright relative to the global economy with businesses expressing enormous faith in the economic policies of the NDA government.

Notwithstanding delays in domestic policy reforms, "India's economy is slowly gaining momentum, with an expected GDP growth of 7.3% and 7.5% in 2016 and 2017, respectively. Despite some delays in domestic policy reforms and enduring fragilities in the banking system, investment demand is supported by the monetary easing cycle, rising FDI and government efforts towards infrastructure investments and public-private partnerships."

Your Company has been making sustained efforts to improve sales and capacity utilisation which is expected to give better results in the next financial year.

Material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year till the date of report:

There is no material event that has occurred from the end of the financial year till the date of the Director's Report.

Dividend and Reserves:

Your Directors are pleased to recommend a dividend of Rs. 2 per Equity Share on 56,80,235 Equity Shares of Rs. 10 each for the financial year ended 31st March, 2016. The said dividend, if approved by the members, would involve a cash outflow Rs. 136.73 lakhs comprising of Rs. 113.60 lakhs as dividend and Rs. 23.13 lakhs as tax on dividend.

The dividend will be paid subject to the approval of shareholders at the forthcoming Annual General Meeting to those Shareholders whose names appear on the Register of Members of the Company as on the specified date.

During the year under review, no amount was transferred to General Reserves.

Share Capital:

The paid up Equity Share Capital as on 31st March, 2016 was Rs. 567.60 lakhs. During the year, the Company has not issued any shares.

Loans, guarantees or investments:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes accompanying the financial statements.

Fixed Deposits:

Your Company has not accepted any deposits from public.

However, the Company has deposits accepted from its members.

There has been no deposit which was unpaid or unclaimed as at the end of the year.

There has not been any default in repayment of deposits or payment of interest thereon during the year.

The Company is holding deposits of Rs. 1,37,80,000/- accepted from members as at the end of the year.

Related party transactions:

All transactions entered with related parties for the year under review were on arm's length basis and in the ordinary course of business and the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus, disclosure in AOC-2 is not required. Further, there are no material related party transactions during the year under review with the Promoters, Directors, and Key Managerial Personnel.

All Related Party Transactions are placed before the Audit Committee as also before the Board for approval. Omnibus approval was obtained for transactions which are repetitive in nature. A statement giving details of all the transactions entered into pursuant to omnibus approval are placed before the Audit Committee and Board for their review.

The policy on Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the Company. None of the Directors have any pecuniary relationships or transactions vis-a vis the Company.

Insurance:

All the assets of the Company are fully insured against major risks. Internal financial controls:

The internal financial controls with reference to the Financial Statements are commensurate with the size and nature of business of the Company.

Significant and material orders passed by the regulators:

During the year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and Company's operations.

Director's Responsibility Statement:

Pursuant to the requirement clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, your Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors have prepared the annual accounts on a going concern basis;

(e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Management Discussion and Analysis:

Management Discussion and Analysis of the financial conditions and result of operations of the Company for the period under review as required under Regulation 34(2)(e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is given in a separate statement in the Annual Report in Annexure I.

Corporate Governance:

A separate report on Corporate Governance is set out in Annexure II.

Extract of Annual Return:

Pursuant to Section 92(3) of the Companies Act, 2013 ('the Act') and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of the annual return is annexed as Annexure III.

Meetings of the Board and its Committees:

The details of the Board meetings and various Committee meetings have been mentioned in the Report of Corporate Governance annexed as Annexure II.

Report of the Statutory Auditors and Notes to Financial Statements:

In the 67th Annual General Meeting held on 4th September, 2014, M/s. Desai Saksena & Associates, Chartered Accountants (FRN: 102358W) have been appointed as Statutory Auditors of the Company to hold office from the conclusion of the 67th Annual General Meeting till the conclusion of the 70th Annual General Meeting. Ratification for appointment of Statutory Auditors is being sought from the members of the Company at the ensuing Annual General Meeting.

Further, the report of the Statutory Auditors alongwith notes to Schedules is enclosed to this report. The observations made in the Auditor's Report are self-explanatory and therefore, do not call for any further comments.

Cost Audit:

As per the requirement of the Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost records and Audit) Rules, 2014 as amended from time to time, your Company needs to conduct a Cost Audit for the financial year ending on 31st March, 2017.

The Board of Directors, on recommendation of the Audit Committee, has appointed M/s. S. R. Singh & Co., Cost Accountants, as Cost Auditor to audit the cost accounts of the Company for the financial year 2016-17 at a remuneration of Rs. 1,50,000/- plus service tax as applicable and reimbursement of out of pocket expenses. As required under Companies Act, 2013, a resolution seeking members approval for the remuneration payable to the Cost Auditor forms part of the Notice convening Annual General Meeting.

Secretarial Audit:

In terms of Section 204 of the Act and Rules made there under, M/s. Kiran Golla & Associates, Practicing Company Secretary have been appointed Secretarial Auditor of the Company. The report of the Secretarial Auditor is enclosed as Annexure IV to this report.

The report is self-explanatory and does not call for any further comments:

Report under Regulation 30(1) and 30(2) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 have been submitted in the old format.

Whistle Blower Policy:

Pursuant to the requirement of the Act, the Company has approved its Whistle Blower Policy. This is also called a vigil mechanism.

This mechanism enables directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Company's code of conduct or ethics policy.

Risk Management Policy:

The Company has developed and implemented the Risk Management Policy.

The Company considers ongoing risk management to be a core component of the Management of the Company and understands that the Company's ability to identify and address risk is central to achieving its corporate objectives.

The policy is in compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and provisions of the Companies Act, 2013 which requires the Company to lay down procedures about risk assessment and risk minimization.

Directors and Key Managerial Personnel:

Mr. Suresh Bhojwani, Whole Time Director of the Company will retire by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment.

Smt. Hira T. Bhojwani was appointed as Whole-time Director- Commercial in the 65th Annual General Meeting of the Company held on 3rd August, 2012 for a term of 3 (three) years. Her term of office expires on 31st March, 2016. Pursuant to the recommendations of the Nomination & Remuneration

Committee and subject to the approval of the Shareholders, Smt. Hira T. Bhojwani was re-appointed by the Board of Directors at its meeting held on 19th May, 2016 for a further period of 3 (three) years w.e.f 1st April, 2016.

The resolution seeking approval of members for re-appointment of Directors is incorporated in the notice of Annual General Meeting of the Company alongwith the brief details about them.

Mr. Chirag Shah - Senior General Manager (Finance & Accounts) has been appointed as Chief Financial Officer of the Company w.e.f. 1st June, 2015 and Ms. Sarita Magar has been appointed as Company Secretary & Compliance Officer w.e.f. 24th July, 2015.

Declaration by Independent Directors:

Mr. K. P. Rao, Dr. T. S. Sethurathnam and Mr. Byram Jeejeebhoy are Independent Directors on the Board of your Company. In the opinion of the Board and as confirmed by these Directors, they fulfill the conditions specified in section 149 of the Act and the Rules made thereunder about their status as Independent Directors of the Company.

Company's Policy on Appointment and Remuneration:

The objective of remuneration policy is to attract, motivate and retain qualified and expert individuals that the Company needs in order to achieve its strategic and operational objectives, whilst acknowledging the societal context around remuneration and recognizing interest of stakeholders.

Formal Annual Evaluation by the Board of its own performance and that of its Committees and individual Directors:

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 a structured questionnaire was prepared after taking into consideration the various aspects of the Board's functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance.

The performance evaluation of Independent directors was completed. The performance evaluation of the Chairman and the Non-independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

Separate meeting of Independent Directors was conducted during the year.

Transfer of Amounts to Investor Education and Protection Fund:

During the year, your Company has transferred funds lying unpaid or unclaimed for a period of seven years to the Investor Education and Protection Fund (IEPF).

Pursuant to the provisions of the Investor Education Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has filed the necessary form and uploaded the details of unpaid and unclaimed amounts lying with the Company as on 16th September, 2015 (the date of previous Annual General Meeting), with the Ministry of Corporate Affairs.

Particulars of Employees:

None of the employees of the Company is falling under the criteria as set out in Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 regarding remuneration.

Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annexure forming part of the Annual Report.

Having regard to the provisions of Section 136(1) read with its relevant proviso of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary.

Human Resources:

Your Company treats its "human resources" as one of its most important assets.

Your Company is focused on the promotion of talent internally through job rotation and job enlargement.

Prevention, Prohibition and Redressal of Sexual Harassment at Workplace:

Your Directors state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo:

Information given as required under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014.

A. Conservation of Energy:

Continuous monitoring and awareness amongst employees has helped to avoid wastage of energy. Various investments in reducing the consumption of energy has helped the Company to reduce the overall power consumption.

Continuous study and analysis for energy conservation, installation of energy efficient equipments has resulted into lower units of power consumption per kg production of finished products. Energy Conservation measures taken:

• Installation of Variable Frequency Drives (VFD) to reduce the power consumption of old machines.

• Energy efficient pump for cooling tower.

• Installation of servo drives in injection moulding machines to reduce power consumption.

• Replacement of higher HP motor with lower HP motor.

• Replacement of CFL with LED lights.

B. Technology Absorption, Adaptation and Innovation:

NOT APPLICABLE

C. Foreign Exchange Earnings and Outgo:

The particulars of foreign exchange utilised during the year are given in Clause a, b and c of Note No. 34 of Notes accompanying the financial statements.

Acknowledgement:

Your Directors place on record their appreciation for employees at all levels who have contributed to the growth and performance of your Company.

Your Directors also thank the clients, vendors, bankers, shareholders and advisers of the Company for their continued support.

Your Directors also thank the Central and State Government and other Statutory authorities for their continued support.

For and on behalf of the Board,

BRIGHT BROTHERS LIMITED

Suresh Bhojwani

Chairman & Managing Director

DIN 00032966

Place : Mumbai

Date : 19th May, 2016