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Bombay Dyeing & Manufacturing Company Ltd.

BSE: 500020 Sector: Industrials
NSE: BOMDYEING ISIN Code: INE032A01023
BSE 00:00 | 24 Apr Bombay Dyeing & Manufacturing Company Ltd
NSE 05:30 | 01 Jan Bombay Dyeing & Manufacturing Company Ltd
OPEN 55.80
PREVIOUS CLOSE 54.50
VOLUME 164239
52-Week high 138.40
52-Week low 36.20
P/E 0.71
Mkt Cap.(Rs cr) 1,070
Buy Price 51.80
Buy Qty 106.00
Sell Price 51.80
Sell Qty 6601.00
OPEN 55.80
CLOSE 54.50
VOLUME 164239
52-Week high 138.40
52-Week low 36.20
P/E 0.71
Mkt Cap.(Rs cr) 1,070
Buy Price 51.80
Buy Qty 106.00
Sell Price 51.80
Sell Qty 6601.00

Bombay Dyeing & Manufacturing Company Ltd. (BOMDYEING) - Director Report


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Company director report

to the members

Your Directors have pleasure in presenting their Report on the business and operationsof the Company along with the audited financial statements for the year ended 31stMarch 2019.

1. FINANCIAL RESULTS (Rs. in crore)
Particulars

Financial Year ended

Standalone

Consolidated

31/03/2019 31/03/2018 31/03/2019 31/03/2018
GROSS TURNOVER AND OTHER INCOME 4469.98 2744.00 4469.98 2744.00
Profit before Finance Cost Depreciation Amortization expenses and Exceptional item 1751.39 632.83 1751.39 632.83
Less: Finance Costs 489.70 412.51 489.70 412.51
Profit/(Loss) before Depreciation Amortization expenses and Exceptional item 1261.69 220.32 1261.69 220.32
Less: Depreciation and Amortization expenses 29.79 29.88 29.79 29.88
PROFIT/(LOSS) BEFORE TAX AND EXCEPTIONAL ITEM 1231.90 190.44 1231.90 190.44
Add/(Less): Exceptional item 3.87 (153.25) 3.87 (153.25)
Add: Share of profit of equity accounted investees. - - 0.13 0.77
PROFIT/(LOSS) BEFORE TAX 1235.77 37.19 1235.90 37.96
Less: Tax (net) 5.79 2.78 5.79 2.78
PROFIT / (LOSS) FROM CONTINUNING OPERATIONS AFTER TAX 1229.98 34.41 1230.11 35.18
PROFIT / (LOSS) from DISCONTINUED OPERATIONS - - (190) -
Add: Other Comprehensive Income 111.19 284.76 110.02 284.76
Total Comprehensive Income 1341.17 319.17 1338.23 319.94
Add: Balance in Statement of Profit and Loss of Previous Year (Incl. OCI) 276.05 (25.72) 276.28 (26.26)
Ind AS 115 Adjustment (1773.23) - (1773.23) -
SURPLUS AVAILABLE FOR APPROPRIATIONS
Appropriations to:
Dividend (20.65) (14.46) (20.65) (14.46)
Dividend Distribution Tax (4.25) (2.94) (4.25) (2.94)
Balance carried to Balance Sheet (Incl. OCI) (180.90) 276.05 (183.62) 276.28

Previous year figures have been regrouped where necessary and have been re-stated asper INDAS.

2. COMPANY RESULTS AND DIVIDEND

Company's turnover and other income for the year was '4469.98 crore as against र .2744 crore in the previous year. The profit after tax is र . 1229.98crore as against a profit of र . 34.41 crore in the previous year.

The Accounts for the year has been drawn up in conformity with the new AccountingStandard Ind AS 115. The impact of the adoption of Ind AS 115 has been mainly on therevenue and the results of Bombay Realty. This has been spelt out in detail elsewhere inthe Report. Consequently turnover and profit figures given in the earlier paragraph arenot strictly comparable.

The construction of the two towers at Island City Center ("ICC") Dadar byBombay Realty is nearing completion and Company has received part occupancy certificates("OC") for the project. The Company has started handover to the customers andpayments received from them towards agreed milestones of OC will generate cash flowsthereby easing the Company's debt burden.

The Polyester Division ("PSF Division") achieved a turnover of र . 1439.28crores during the year ended 31st March 2019 as compared to र . 1251.95crore in the previous year. In volume terms there was an increase of slightly over 15%.The average capacity utilization was 89% which though slightly lower than last year onaccount of overall preventive maintenance as also introduction of additional capacities bycompetitors was significantly better than the industry average capacity utilization ofbelow 80%.

Home & You the Company's Retail business will be investing in design expansionowning the digital printing space through TVC media campaigns to reinforce its leadershipposition. Sales channels proliferation will be a thrust area. The Company would belaunching a new franchise model and will explore high volume institutional business in thecurrent year.

There has also been an upward revision in the Company's Credit Ratings during the year.

Having regard to the above your Directors have recommended a dividend of र . 1.50per equity share of र . 2/- each which is subject to shareholders' approval. Notransfer to Reserves has been proposed.

3. CONSOLIDATED FINANCIAL RESULTS

As stipulated by Regulation 33 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations 2015") the Company hasprepared Consolidated Financial Statement in accordance with the applicable accountingstandards as prescribed under the Companies (Accounts) Rules 2014 of the Companies Act2013 ("the Act"). The Consolidated Financial Statement reflects the results ofthe Company and that of its and subsidiary and associates. As required under Regulation 34of Listing Regulations 2015 the Audited Consolidated Financial Statements together withthe Independent Auditors' Report thereon is annexed and forms part of this Report.

The summarized Consolidated Financial Statements is provided above in point No. 1 ofthis Report.

4. BOMBAY REALTY

Bombay Realty has made good progress this year. With the receipt of the regulatoryapprovals the Division will complete the handover to its customers as per schedule.

With receipt of occupancy certificates the Company is also well placed to sell itsbalance inventory at nil GST for the OC received inventory which will help reduce theoverall investment amount for the customer and will help drive sales in a buyers' market.

As mentioned earlier during the year your Company adopted new Accounting StandardINDAS 115 and accordingly recognition of "Revenue from Contracts with Customers"is applicable w.e.f. 1st April 2018. The Company has reported thereforerevenues as per the said Accounting Standard. The new standard has brought comprehensiveframework for evaluation measurement recognition and disclosures of revenues based onsatisfaction of performance obligation over time or at a point in time. Accordingly yourCompany has evaluated all its Realty Division contracts through a leading audit firm andthen opted to apply the modified retrospective approach to contracts which were notcompleted as on 1st April 2018. The cumulative effect of applying thisstandard is recognised at the date of initial application i.e. 1st April 2018by reducing the opening balance of Retained Earnings as per the requirements of the IndAS 115 pertaining to recognition of revenue.

The revenues from real estate activity as per INDAS reporting for FY 2018-19 adoptedduring the year were र . 2727.48 crore as compared to र . 1182.91crore in FY 2017-18 reporting a growth of 131% over last year. The business is poised tobecome the single largest revenue earning division of the Company on topline basis and asubstantial contributor to its bottom line.

The Division is complying with RERA requirements in giving the clients transparent andfully compliant project information the promise of timely delivery with world classconstruction quality and amenities. With part occupancy approvals coming for the two ICCtowers development of the balance of the project will proceed at faster speed enablingthe completion of the towers in record time.

The Division is well poised to monetise its assets both in ICC and WIC and with the DCR2034 enhancing the land potential for development; it is looking at forging additionalprojects in the coming year.

5. HOME & YOU

For first time in 4 years the operations of division has resulted in a profit mainlybecause of margin expansion aggressive control on non-required expenditures and otherrelated income. Also reengineering of quality and structural transformation of vendorproduction management in current year will bear fruit in future years enabling thedivision to consolidate its leadership position.

6. POLYESTER DIVISION

PSF industry saw a sluggish growth of 2.5% in volume in the country which was mainlymet through existing capacities. Continuing cheap imports from China disrupted thedomestic market impacting the Company's PSF business. New capacities of around 11% ofexisting capacity became operational in the country towards the end of the financial yearresulting in growth of installed capacity far exceeding the growth in domestic demand.

The raw material and PSF prices remained volatile during the year tracking the movementin petrochemicals and crude oil prices. Increased volatility in raw material prices hasposed challenges to the Company's Polyester business which it has sought to counteractwith innovative product mix and cost reduction initiatives.

7. SUBSIDIARIES AND ASSOCIATES

Pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5 of the Companies(Accounts) Rules 2014 the statement containing salient features of the financialstatements of the Company's subsidiary and associates (in Form AOC-1) is forming part ofthe Consolidated Financial Statements.

8. DEMERGER

The Mumbai Bench of Hon'ble National Company Law Tribunal (NCLT) vide its order dated21st February 2019 approved the Scheme of Arrangement between Scal ServicesLimited ("Demerged Company") and The Bombay Dyeing and Manufacturing CompanyLimited ("Resulting Company") and their respective Shareholders("Scheme") with effect from the Appointed Date of 1st July 2018pursuant to Sections 230 to 232 and other applicable provisions of the Companies Act2013. As per the Scheme of Arrangement 3 (Three) fully paid up 8% RedeemableNon-convertible Non-Cumulative Preference Shares of र . 100 each of theResulting Company were to be issued and allotted for every 1 (One) equity share of र .100 each held in the Demerged Company (other than the Resulting Company being a memberin the Demerged Company) as consideration. Accordingly 388800 8% RedeemableNon-Convertible NonCumulative Preference Shares of र . 100 each fully paid up wereissued and allotted to the shareholders of the Demerged Company.

Pursuant to Scheme becoming effective authorised capital of the Company has beenreclassified whereby the existing authorised share capital of the Company of 20000000(Two Crore) equity shares of face value of र . 2 each has been reclassified to'1060000000/- (Rupees One Hundred Six Crores only) divided into 510000000 (Fifty OneCrore) Equity Shares of र . 2 each and 400000 (Four Lakh) Preference Shares ofर . 100 each. Memorandum and Articles of Association of the Company has been amendedto incorporate the change in authorised capital.

9. FIXED DEPOSITS

During the year the Company repaid the deposits aggregating to र . 75.14 crore.Total deposits outstanding as on 31st March 2019 amounted to र . 1.95crore out of which 165 deposits aggregating '1.37 crore had matured but remainedunclaimed.

10. CREDIT RATING

Brickwork Ratings India Pvt. Ltd has assigned and upgraded the ratings of bank loanfacilities and fixed deposit instrument of the Company as follows:

Facility Tenure Previous Ratings Current Ratings
Fund Based Term Loan Cash Credit Long Term BWR BBB+ (Pronounced as BWR Triple B Plus) Outlook: Stable BWR A (Pronounced as BWR A) Outlook: Stable Assign/Upgrade
Non Fund Based Letter of Credit/ Bank Guarantee Short Term BWR A3+ (Pronounced as BWR A Three Plus) BWR A2+ (Pronounced as BWR A Two Plus) Assign/Upgrade
Non Fund Based Fixed Deposit Long Term BWR FBBB+ (Pronounced as BWR F Triple B Plus) Outlook: Stable BWR FA (Pronounced as BWR FA) Outlook: Stable Upgrade

11 CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO

The information pertaining to conservation of energy technology absorption foreignexchange earnings and outgo as required under Section 134 of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as "Annexure- A".

12. RELATED PARTY TRANSACTIONS

There were no materially significant transactions with related parties during thefinancial year under review which were in conflict with the interest of the Company. Allthe transactions entered into by the Company with Related Parties during year under reviewwere at arms-length basis. Suitable disclosure as required by the Accounting Standard (INDAS 24) have been made in the notes to the Financial Statement.

As required under Regulation 23 of SEBI (Listing Obligations and Disclosures)Regulations 2015 the Company has formulated a policy on materiality of Related PartyTransactions and on dealing with Related Party Transactions which has been put up on thewebsite of the Company: http://www.bombaydyeing.com/pdfs/corporate/corporatepdf11.pdf

13. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the Notes to the Financial Statement.

14. INSURANCE

All the properties including buildings plant and machinery and stocks have beenadequately insured.

15. REPORTING OF FRAUDS BY AUDITORS

During the year under review neither the statutory auditors or the secretarialauditors have reported to the audit committee under Section 143 (12) of the CompaniesAct 2013 any instances of fraud committed against the Company by its officers oremployees the details of which would need to be mentioned in the Director's Report.

16. ANNUAL RETURN

Pursuant to the provisions of Section 134(3)(a) and Section 92 of the Companies Act2013 read with Rule 12 of the Companies (Management and Administration) Rules 2014 AnnualReturn of the Company as at 31st March 2019 is uploaded on the website of theCompany at www.bombaydyeing.com

17. DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year Mr. S. S. Kelkar and Mr. S. M. Palia stepped down from the Board of theCompany w.e.f. 8th August 2018. The Board places on record its appreciationtowards valuable contribution made by them during their tenure as Directors of theCompany.

Mr. R. A. Shah and Mr. A. K. Hirjee have expressed their desire not to seekre-appointment for a second term on the completion of their current term which is upto 7thAugust 2019.

Mr. S. Ragothaman who was appointed as an Independent Director of the Company for aterm of five years up to 7th August 2019 by the members at the 134thAnnual General Meeting in terms of Section 149 of the Companies Act 2013 is beingre-appointed as an Independent Director of the Company for a second term of threeconsecutive years commencing from 8th August 2019 upto 7th August2022 not liable to retire by rotation.

The Board has appointed Mr. Sunil S. Lalbhai and Ms. Gauri Kirloskar as AdditionalDirectors of the Company with effect from 5th February 2019 who hold officeup to the date of ensuing AGM of the Company in terms of Section 161 of the Companies Act2013 ("Act") and are eligible for appointment.

In line with the provisions of Sections 149 160 and other applicable provisions of theCompanies Act 2013 read with applicable rules made thereunder Mr. Sunil S. Lalbhai andMs. Gauri Kirloskar Additional Directors of the Company are being appointed asIndependent Directors for five consecutive years from their respective date of appointmentby the Board.

In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Ness N. Wadia retires by rotation and is eligible forre-appointment.

Necessary resolutions for the appointment/ re-appointment of the aforesaid Directorshave been included in the Notice convening the ensuing AGM and requisite details have beenprovided in the explanatory statement of the Notice. The Board recommends theirappointments / re-appointment.

All the Independent Directors have given a declaration that they meet the criteria ofindependence as laid down under Section 149 of the Act and affirmed compliance with WadiaCode of Ethics and Business Principles as required under Regulation 26(3) of SEBI (LODR)Regulations 2015.

For the Non - Executive Directors apart from reimbursement of expenses incurred in thedischarge of their duties the remuneration that these Directors were entitled to underthe Act as Non-Executive Directors and the remuneration that a NonExecutive Director mayreceive for professional services rendered to the Company through a firm in which he is apartner none of these Directors have any other pecuniary relationships with your Company.

Five Board Meetings were duly convened and held during the year and the details ofBoard/Committee meetings held are provided in the Corporate Governance Report. The gapbetween meetings was within the period prescribed under the Companies Act 2013 andListing Regulations 2015.

Mr. Vishnu Sundararajan Peruvemba Chief Financial Officer of the Company has given anotice of resignation from the services of the Company citing personal reasons which hasbeen accepted by the Company. He will continue in his current position as Chief FinancialOfficer and Key Managerial Personnel till 31st August 2019.

Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and Regulation 17 of ListingRegulations 2015 the Board has carried out an annual performance evaluation of its ownperformance and that of its statutory committees viz. Audit Committee StakeholderRelationship Committee Nomination and Remuneration Committee and Corporate SocialResponsibility Committee and that of the individual Directors. The manner in which theevaluation has been carried out has been explained in the Corporate Governance Report.

Nomination and Remuneration Policy

The Board has adopted on recommendation ofthe Nomination and Remuneration Committee apolicy for selection and appointment of Directors Senior Management and theirremuneration. A brief detail of the policy is given in the Corporate Governance Report andalso posted on the website of the Company: http://www .bombaydyeing.com/pdfs/corporate/corporatepdf09.pdf

18. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that:

a) in the preparation of the Annual Accounts the applicable accounting standards havebeen followed and there are no material departures;

b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitof the Company for that period;

c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) they have prepared the Annual Accounts on a going concern basis;

e) they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and are operating effectively; and

f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.

Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory costand secretarial auditors and external consultant(s) and the reviews performed byManagement and the relevant Board Committees including the Audit Committee the Board isof the opinion that the Company's internal financial controls were adequate and effectiveduring the financial year 2018-19.

19. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 17(7) of Listing Regulations 2015 Management Discussion andAnalysis Report is given in "Annexure B" to this Report.

20. CORPORATE GOVERNANCE

A separate report on Corporate Governance pursuant to Regulation 34(3) of ListingRegulations 2015 read with Part C of Schedule V thereof along with a certificate fromthe Statutory Auditors of the Company regarding compliance of the conditions of CorporateGovernance are annexed to this Report as "Annexure C".

21. BUSINESS RESPONSIBILITY REPORT

Pursuant to Regulation 34(2) of Listing Regulations 2015 the Business ResponsibilityReport ("BRR") of the Company for FY 2018-19 is forming part of this Report as"Annexure D".

22. PARTICULARS OF EMPLOYEES

Details of remuneration of Directors KMPs and employees as per Section 197 of theCompanies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 forms part of this Report as "Annexure E".However as per the provisions of Section 136 of the Act the Annual Report is being sentto the Members and others entitled thereto excluding the information on employees'remuneration particulars as required under Rule 5 (2) & (3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 which is available forinspection by the Members at the Registered Office /Corporate Office of the Company duringbusiness hours on working days of the Company up to the date of the ensuing Annual GeneralMeeting. If any Member is interested in obtaining a copy thereof such Member may write tothe Company in this regard.

23. AUDITORS

Statutory Auditors

Pursuant to Section 139 of the Companies Act 2013 and Rules made thereunder theCompany at its 138th AGM appointed M/s. Bansi S. Mehta & Co. (FirmRegistration No. 100991W) as the Statutory Auditors of the Company for a period of 5 yearsfrom the conclusion of 138th AGM until the conclusion of 143rd AGMof the Company.

Pursuant to amendments in Section 139 of the Companies Act 2013 the requirements toplace the matter relating to such appointment for ratification by members at every annualgeneral meeting has been done away with.

The Report given by M/s. Bansi S. Mehta & Co. Chartered Accountants on thefinancial statements of the Company for FY 2018 - 19 is part of the Annual Report.

Cost Auditors

Pursuant to Section 148 of the Companies Act 2013 read with Rule 14 of the Companies(Cost Records and Audit) Amendment

Rules 2014 the cost audit records of the Company are required to be audited. TheDirectors on the recommendation of the Audit Committee appointed M/s. D. C. Dave &Co. (Firm Registration No. 000611) Cost Accountants to audit the cost accounts of theCompany for the financial year ending 31st March 2019 on a remuneration of र .550000/- (Rupees Five Lakh Fifty Thousand) plus out of pocket expenses andapplicable taxes. The remuneration payable to the Cost Auditor is required to be ratifiedby the shareholders at the ensuing AGM.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 andRegulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Company has appointed Parikh & Associates a firm of Company Secretaries inPractice to undertake the Secretarial Audit of the Company. The Report of the SecretarialAuditor is annexed herewith as "Annexure F".

Internal Auditors

At the Board Meeting held on 2nd May 2019 M/s. Ernst & YoungChartered Accountants were re-appointed as the Internal Auditors of the Company forfinancial year 2019-20.

24. SIGNIFICANT OR MATERIAL ORDERS

There were no significant and material orders passed by the regulators or courts ortribunals which would impact the going concern status and the Company's operations infuture.

25. MATERIAL CHANGES

There was no reportable material event in the Company during the year.

26. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Internal Audit plays a key role in providing an assurance to the Board of Directorswith respect to the Company having adequate Internal Financial Control Systems. TheInternal Financial Control systems provide among other things reasonable assurance ofrecording the transactions of its operations in all material respects and of providingprotection against significant misuse or loss of Company's assets. Details about theadequacy of Internal Financial Controls are provided in the Management Discussion andAnalysis Report.

27. CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted a Corporate Social Responsibility (CSR) Committee inaccordance with Section 135 of the Companies Act 2013 comprising of three Directorsincluding Independent Directors.

For the current financial year 2018-19 as the average profit for the last three yearsis negative the Company decided not to spend any amount on CSR. Report on CorporateSocial Responsibility is attached herewith as "Annexure - G"

28. AUDITORS QUALIFICATIONS

Statutory Auditors' Report and Secretarial Auditors' Report do not contain anyqualification reservation or adverse remarks.

29. RISK MANAGEMENT

The Company has formulated a Risk Assessment & Management Policy. Your attention isdrawn to the Report on Corporate Governance for details.

In compliance with the requirement of SEBI (Listing Obligations and DisclosureRequirements) (Amendment) Regulations 2018 which is effective from 1st April2019 the Board has constituted a Risk Management Committee at its Meeting held on 13thNovember 2018.

30. AUDIT COMMITTEE

The Audit Committee of the Company comprises of five Independent Directors. Thecomposition of directors and other details are provided in the Corporate Governance Reportof the Company. The Company has established a vigil mechanism through the Committeewherein the genuine concerns can be expressed by the employees and directors. The Companyhas also provided adequate safeguards against victimisation of employees who express theirconcerns. The Company has provided the details of the vigil mechanism in the WhistleBlower Policy in the Corporate Governance Report and also posted these on the website ofthe Company: http://www.bombaydyeing.com/pdfs/corporate/Whistle_Blower_Policy.pdf

31. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL MEETINGS.

The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Board meetings and Annual General Meetings.

32. APPRECIATION

The Directors express their appreciation to all employees of the various divisions fortheir diligence and contribution to performance. The Directors also record theirappreciation for the support and co-operation received from franchisees dealers agentssuppliers bankers and all other stakeholders. Last but not the least the Directors wishto thank all shareholders for their continued support.

On behalf of the Board of Directors
Place: Mumbai NUSLI N.WADIA
Date: 27th June 2019. Chairman