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Bombay Dyeing & Manufacturing Company Ltd.

BSE: 500020 Sector: Industrials
NSE: BOMDYEING ISIN Code: INE032A01023
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VOLUME 206704
52-Week high 101.75
52-Week low 36.20
P/E
Mkt Cap.(Rs cr) 1,467
Buy Price 70.80
Buy Qty 1064.00
Sell Price 71.00
Sell Qty 178.00
OPEN 71.90
CLOSE 71.35
VOLUME 206704
52-Week high 101.75
52-Week low 36.20
P/E
Mkt Cap.(Rs cr) 1,467
Buy Price 70.80
Buy Qty 1064.00
Sell Price 71.00
Sell Qty 178.00

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

Company auditors report

To the Members of The Bombay Dyeing and Manufacturing Company Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of The BombayDyeing and Maunfacturing Company Limited ("the Company") which comprise theBalance Sheet as at March 31 2020 the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of Changes in Equity the Statement of Cash Flows forthe year then ended and notes to the Standalone Financial Statements including a summaryof the significant accounting policies and other explanatory information (hereinafterreferred to as ‘the standalone financial statements').

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 as amended ("the Act") in the manner so required andgive a true and fair view in conformity with the Indian Accounting Standards prescribedunder Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended ("Ind AS") and other accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2020 its profit andtotal comprehensive income the changes in equity and its cash flows for the year ended onthat date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the "Auditor'sResponsibilities for the Audit of the Standalone Financial Statements" section of ourreport. We are independent of the Company in accordance with the "Code ofEthics" issued by The Institute of Chartered Accountants of India ("ICAI")together with the ethical requirements that are relevant to our audit of the standalonefinancial statements under the provisions of the Act and the Rules thereunder and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the standalone financialstatements.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole for the year ended March 31 2020 and in forming our opinionthereon and we do not provide a separate opinion on these matters. We have determined thematters described below to be the key audit matters to be communicated in our report:

Key Audit Matters How was the matter addressed in our audit
Revenue Recognition for Real Estate Development activity
Ind AS 115 on "Revenue from Contracts with Customers" inter alia could have the significant impact on the manner in which an entity in real estate industry recognises its revenue. Under Ind AS 115 revenue is recognised over a period (as known as Percentage of Completion Method - POCM) or at a point in time (as known as Project Completion Method - PCM). Our audit procedures included among others the following:
To determine the revenue to be recognised under Ind AS 115 and the impact thereof the management undertook assessment of its contracts with customers that were not completed and more particularly for its ongoing Real Estate Development Project ("the ongoing project"). • Evaluated the design of the internal controls in terms of the requirements of Ind AS 115 for the manner of recognising revenue;
• Evaluated the accounting policy of recognising revenue;
On assessment the management considered to recognise revenue from the ongoing project at a point in time (PCM) that is upon receipt of Occupation Certificate ("OC"). • Evaluated its existing contracts with customers and the analysis performed by management for each contract by selecting samples for such contracts with customers;
• Based on the evaluation of contracts assessed the appropriateness to adopt PCM as policy for revenue recognition for the ongoing project;
• Examined the process and related documents (like phase wise OC possession letters) to determine the satisfaction of performance obligations of contracts under ongoing project during the year;
For its ongoing project the Company received OC for the first phase and second phase during the year ended March 31 2019 and March 31 2020 respectively. Accordingly on satisfying performance obligations under contracts the Company has recognised revenue as per PCM that is at a point in time. For the part of the project for which Occupancy Certificate is yet to be received the amount is carried as Work-in-progress. • Evaluated the appropriateness and assessed the completeness of disclosures in accordance with the requirements of Ind AS 115.
Revenue Recognition for Real Estate Development activity
The application of Ind AS 115 is complex and involve certain key judgements relating to appropriateness of the basis used to recognise revenue and more particularly for its ongoing project and hence the same is considered to be a key audit matter.
[Refer Note "o" to significant accounting policy and Notes 11 and 34 to the standalone financial statements]
Deferred Tax Assets ("DTA") on Unabsorbed Depreciation and Brought Forward Business Losses
The Company has recognised DTA for the carryforward of unused tax losses in the form of unabsorbed depreciation and brought forward business losses to the extent it is probable that the future taxable profits will be available against which such unused tax losses can be utilised (before the expiry period thereof for its utilisation). The recognition is based on the projected profitability. The Company has recognised DTA based on the revised rate of tax as per Section 115BAA of the Income-tax Act 1961. Our audit procedures included the following:
Such recognition of DTA is a key audit matter as the recoverability of tax losses within the time frame allowed involves significant estimate of the financial projections availability of sufficient taxable income in the future and significant judgements in the interpretation of tax regulations and tax positions adopted by the Company. • Considered the Company's accounting policies with respect to recognition of tax credits in accordance with Ind AS 12 on "Income Taxes";
[Refer Note "x" to significant accounting policy and Note 17 to standalone financial statements] • Evaluated the Company's tax positions by comparing it with prior years and past precedents;
• Obtained the projected profitability statements of the Company;
• Evaluated the estimates of profitability made by the management on the basis of which it is considered probable that the Company will have sufficient taxable income against which the unused tax losses will be utilised and also within the expected timing of utilisation;
• Discussed with the management the future business plans and financial projections and underlying assumptions used based on which the estimate of profitability is made;
• Assessed the disclosures in accordance with the requirements of Ind AS 12.
Transferable Development Rights (TDR)/Floor Space Index (FSI)
During the year ended March 31 2019 on entering the agreement with Municipal Corporation of Greater Mumbai entitlement of Floor Space Index (FSI) in lieu of lands earmarked and handed over to MCGM under the Integrated Development Scheme as per the provisions of Development Control Regulatory (DCR) 58. Our audit procedures included among others the following: • Evaluated the details of entitlement by way additional FSI;
Further in lieu of lands earmarked and handed over to MCGM under the Integrated Development Scheme earlier as per the amended Development Control and Promotion Regulation (DCPR) 2034 as supported by the certificate from an architect the Company is entitled to additional FSI (i.e 1.17 times). • Evaluated the management's review of valuations for additional FSI provided by external experts that is independent valuers as also their competence;
Based on Valuation of Reports of Registered Valuers the value of entitlement of FSI has been recognised as Revenue from Real Estate Development activity and added to inventories. • Evaluated the valuation reports of external experts for the basis adopted for fair valuation of additional FSI benchmarks used the assumptions applied;
During the year since the Net Realisable Value of Transferable Development Rights (TDR) was lower than the amount at which it was valued and carried the carrying value of TDR lying as inventory was written down. • Evaluated the accounting treatment of Additional FSI as also valuation of TDR whether the same is in compliance with the related Ind AS;
• Assessed whether the disclosures in relation to TDR/FSI are in accordance with the related Ind AS.
Considering the materiality of the amounts as also the valuation of TDR/FSI involve significant judgements and assumptions and the accounting thereof this matter is considered to be key audit matter.
[Refer Note 11 and 47 to the standalone financial statements]
Uncertain tax positions Direct and Indirect Taxes
The Company has uncertain tax matters pending litigations under direct tax and various indirect tax laws. The litigation involves significant judgement to determine the possible outcome based on which accounting treatment is given to the disputed amount. Our audit procedures include the following:
These matters are considered to be key audit matter given the magnitude of potential outflow of economic resources and uncertainty of potential outcome. • Obtained details of uncertain tax position and gained understanding thereof;
[Refer Notes 17 29 and 41 to the standalone financial statements] • Obtained details of completed tax assessments and also demands raised;
• Read and analysed relevant communication with the authorities and legal consultants;
• Considered the legal advice obtained by the management on possible outcome of the litigation;
• Discussed with senior management and evaluated management's assumptions regarding provisions made;
• Assessed the disclosures in accordance with the requirements of Ind AS 37 on "Provisions Contingent Liabilities and Contingent Assets".
Physical Verification of Inventories
The Company's inventories include raw materials work-inprogress finished goods stock-in-trade stores spares and catalysts. PSF Division has its inventories at one location that is at its manufacturing operations at Patalganga. Retail Division has its Stock-in-trade located at warehouse as well as stores located across India. Since it was impracticable for us as auditors to attend in the physical verification of inventories our alternative audit procedures to obtain sufficient appropriate audit evidence regarding the existence and condition of inventories include the following:
The Company has adequate inventory records and system as also internal controls over inventory movements and records. The Company has established procedures to carry out physical inventories during the year as also at the year-end for Retail Division and at the year-end for PSF Division. Accordingly physical verification of inventories of Retail Division was carried out during the year and details thereof were provided to us auditors. Due to various restrictions imposed under COVID-19 outbreak physical verification could not be carried out at the year-end but the same was carried out subsequent to the year-end. At the time of such subsequent verification it was impracticable for us auditors to physically attend the inventory counting and hence alternative audit procedures were performed. • Evaluated the control design in respect of inventory process and testing (encompass the processes around inventory movements) whether such controls have operated effectively during the period of audit;
This matter is considered to be key audit matter given the circumstances of physical verification of inventories under COVID-19 vis-a-vis non-COVID-19 scenario. • Obtained details/documents of existence and condition of physical inventories as carried out by the management during the year and subsequent to the year-end as the case may be;
[Refer Note "j" to significant accounting policy and Note 11 of the standalone financial statements] • Observed the inventory counting remotely subsequent to the year- end via video call; considered the related practical constraints while counting remotely;
• For verification of stock-in-trade subsequent to the year-end where physical verification was attended by other firm of Chartered Accountants remote access technologies such as mobile based video conferencing were used for supervision and review of the work so performed;
• The count was carried for all items of inventories on sample basis and in some cases of on the best judgement basis as also on the basis of previous experience of conducting inventory count;
• Rollback procedures were applied to arrive at the inventories as verified by the Company as at the year-end;
• Related documents were verified that indirectly support and corroborate the existence of inventories at the year-end;
• Obtained direct confirmation from third party warehouses for the existence of inventories held by them as at the year end;
• Employed appropriate cut-off procedures as also verified documentary records for inventories in-transit.
External Confirmations
COVID-19 has impacted the procedure of external confirmation request to vendors and customers at the year-end and therefore positive external confirmation request was sent through electronic mode. However due to suspension of business activities of the many confirming parties most confirmations were not received. Our audit procedures included among others the following:
The Company seeks and had sought confirmations from vendors and customers during the year. • Revised assessed risk and modify our audit procedures to mitigate these risks;
In such events we auditors performed alternative audit procedures. • Obtained a reliable assurance pertaining to transactions with confirming parties in sense for accurate and complete process of routine and significant classes of transactions such as revenue purchases etc.;
This matter is considered to be key audit matter given the circumstances of the year-end confirmations under COVID-19 vis-a-vis non-COVID-19 scenario. • Selected samples and tested the effectiveness of controls related to accuracy and completeness of transactions in totality considering the frequency and regularity of transactions;
• Performed alternative audit procedures like
- For accounts receivable balances : scrutiny of ledger accounts and verification of subsequent receipts;
- For accounts payable balances : scrutiny of ledger accounts and other documents/records such as bills from vendors supported by goods received notes.

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Board's Report including Annexuresto Board's Report Management Discussion and Analysis Corporate Governance andShareholder's Information and Business Responsibility Report but does not include thestandalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation and presentation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance (including other comprehensive income) changes in equity and cash flows ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the Ind AS specified under Section 133 of the Act read with the Companies(Indian Accounting Standards) Rules 2015 as amended.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgements and estimates that are reasonable andprudent; and the design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements the Board of Directors is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgement andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act we report that:

a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;

b. In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

c. The Balance Sheet the Statement of Profit and Loss (including Other ComprehensiveIncome) the Statement of Changes in Equity the Statement of Cash Flows and notes to thestandalone financial statements dealt with by this Report are in agreement with the booksof account;

d. In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended;

e. On the basis of written representations received from the directors as on March 312020 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2020 from being appointed as a director in terms of Section 164(2) of theAct;

f. With respect to the internal financial controls with reference to financialstatements of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure A";

g. With respect to the matters to be included in the Auditor's Report in accordancewith requirement of Section 197(16) of the Act as amended

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid during the current year by the Company to its directorsis in accordance with the provisions of Section 197 of the Act. The remuneration paid toany director is not in excess of the limit laid down under Section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) whichare required to be commented upon by us.

h. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements - Refer Note 41 to the standalonefinancial statements;

ii. The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses as required under the applicable law oraccounting standards;

iii. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company during the year ended March 312020.

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Section 143(11) of the Act weenclose in the "Annexure B" a statement on the matters specified in paragraphs3 and 4 of the Order to the extent applicable.

For BANSI S. MEHTA & CO.
Chartered Accountants
Firm Registration No.100991W
PARESH H. CLERK
Partner
PLACE : Mumbai Membership No. 36148
DATED : June 9 2020 UDIN : 20036148AAAABI4404

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 1 (f) under the heading of "Report on Other Legal andRegulatory Requirements" in our Independent Auditor's Report of even date on theStandalone Financial Statements for the year ended March 31 2020.

Report on the Internal Financial Controls with reference to Financial Statements underClause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls with reference to standalone financialstatements of The Bombay Dyeing and Maunfacturing Company Limited ("theCompany") as of March 31 2020 in conjunction with our audit of the standalonefinancial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal financial controls with reference tofinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting ("the Guidance Note") issued by the Instituteof Chartered Accountants of India ("ICAI"). These responsibilities include thedesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing issued by ICAI anddeemed to be prescribed under Section 143(10) of the Act to the extent applicable to anaudit of internal financial controls with reference to financial statements. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to financial statements were established and maintainedand if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of internal financial controls withreference to financial statements assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgement includingthe assessment of the risks of material misstatement of the standalone financialstatements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls withreference to financial statements.

Meaning of Internal Financial Controls with reference to Financial Statements

A company's internal financial control with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements includes those policies and procedures that

a. pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

b. provide reasonable assurance that transactions are recorded as necessary to permitpreparation of the financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

c. provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects internal financial controls withreference to the standalone financial statements and such internal financial controls withreference to standalone financial statements were operating effectively as at March 312020 based on the internal controls over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote.

For BANSI S. MEHTA & CO.
Chartered Accountants
Firm Registration No. 100991W
PARESH H. CLERK
Partner
PLACE : Mumbai Membership No. 36148
DATED : June 9 2020 UDIN : 20036148AAAABI4404

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 2 under the heading of "Report on Other Legal andRegulatory Requirements" of our Independent Auditors' Report of even date on theStandalone Financial Statements for the year ended March 31 2020.

Report on the Companies (Auditor's Report) Order 2016 issued in terms of Section143(11) of the Companies Act 2013 ("the Act") of The Bombay Dyeing andMaunfacturing Company Limited ("the Company"):

i. a. The Company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant and Equipment ("PPE"). Therecords of certain assets need to be assimilated to make identification possible.

b. PPE have been physically verified by the management according to a phased programmedesigned to cover all the PPE over a period of three years which in our opinionprovides for physical verification of all the items of PPE at reasonable intervals. Thediscrepancies reported on such verification are not material and have been properly dealtwith in the books of account.

c. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties asincluded in Note 3 to the standalone financial statements are held in the name of theCompany.

ii. Inventories (excluding stocks lying with third parties) have been physicallyverified by the management during the year. In respect of inventories lying with thirdparties these have substantially been confirmed by them. In our opinion the frequency ofverification is reasonable. The discrepancies noticed on verification between physicalstock and book records were not material in relation to the operations of the Company andthe same have been properly dealt with in the books of account.

iii. The Company has granted unsecured loans and an interest-free shareholders' depositto its Subsidiary Company covered in the register maintained under Section 189 of the Act.

a. The terms and conditions of the grant of such loans are not prima facie prejudicialto the interest of the Company;

b. The principal amount of the loans and shareholders' deposit and interest thereon wasnot repaid as due against which the adequate provision has been made.

c. The loans and shareholder's deposit and interest aggregating to Rs.54.29 Crore areoverdue for more than ninety days.

iv. The Company has obtained a legal opinion that it can avail the exemption providedin Section 186 (11) of the Act and that by virtue of such exemption the provisions ofSection 186 (2) of the Act are not applicable to the Company. Based on the legal opinionand according to the information and explanations given to us the Company has compliedwith the provisions of Sections 185 and 186 of the Act with respect to grant of loansinvestments made guarantees given and securities provided.

v. In our opinion and according to the information and explanations given to us theCompany has complied with directives issued by Reserve Bank of India and the provision ofSections 73 to 76 or any other relevant provisions of the Act and the Companies(Acceptance and Deposits) Rules 2014 as amended with regard to deposit accepted fromthe public. According to the information and explanations given to us no order has beenpassed by the Company Law Board or National Company Law Tribunal or Reserve Bank of Indiaor any Court or any other Tribunal.

vi. We have broadly reviewed the books of account and records maintained by the Companypursuant to the Companies (Cost Records and Audit) Rules 2014 as specified by the CentralGovernment for maintenance of cost records under Section 148(1) of the Act in respect ofthe products manufactured by the Company and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. However we have not made adetailed examination of the said accounts and records with a view to determine whetherthey are accurate or complete.

vii. a. According to the information and explanations given to us and on the basis ofthe books and records examined by us the Company has been regular in depositingundisputed statutory dues including Provident Fund Income-tax Goods and Service TaxDuty of Customs Employees' State Insurance Cess and other material statutory dues asapplicable to it with the appropriate authorities. There are no arrears of outstandingstatutory dues on the last day of the financial year for a period of more than six monthsfrom the date they become payable.

b. According to the information and explanations given to us and on the basis of thebooks and records of the Company examined by us as may be applicable given herein beloware the details of dues of Income-tax Goods and Service

Tax Sales-tax Duty of Customs Duty of Excise Value Added Tax which have not beendeposited on account of disputes and the forum where the dispute is pending:

Sr. No. Name of statute Nature of the dues Amount (Rs. in Crores) Period to which the Amount relates Forum where dispute is pending
1. Sales Tax and Value Added Tax Sales Tax 0.09 1999-2000 Maharashtra Sales Tax Tribunal
MVAT 0.38 2009-10 Maharashtra Sales Tax Tribunal
CST 1.80 2009-10 Maharashtra Sales Tax Tribunal
(*0.35)
CST 1.52 2009-10 Assistant Commissioner of Sales Tax New Delhi
CST 0.63 2012-13 Joint Commissioner of Sales Tax (Appeals) New Delhi
CST 0.18 2013-14 Joint Commissioner of Sales Tax (Appeals) Kerala
(*0.03)
CST 4.41 2013-14 Assistant Commissioner of Sales Tax (Appeals) New Delhi
CST 0.16 2014-15 Joint Commissioner of Sales Tax (Appeals) West Bengal
(*0.02)
CST 2.07 2014-15 Joint Commissioner of Sales Tax (Appeals) New Delhi
VAT 4.12 2014-15 Joint Commissioner of Sales Tax (Appeals) Haryana
VAT 1.07 2015-16 The Joint Commissioner of Sales Taxes Haryana
VAT 0.78 2015-16 Deputy Commissioner of Sales Tax Maharashtra
CST 0.27 2015-16 Deputy Commissioner of Sales Tax Maharashtra
CST 0.02 2016-17 The Joint Commissioner of Sales Taxes West Bengal
2. The Income-tax Act 1961 Income Tax 4.76 1989-90 High Court
(*4.76)
Income Tax 0.13 2009-10 Income Tax Appellate Tribunal
(*0.13)
Income Tax 0.27 2010-11 Commissioner of Income Tax (Appeal)
(*0.27)
Income Tax 4.63 2011-12 Commissioner of Income Tax (Appeal)
Income Tax 0.22 2011-12 Income Tax Appellate Tribunal
Income Tax 0.40 2013-14 Income Tax Appellate Tribunal
Income Tax 17.68 2013-14 Income Tax Appellate Tribunal
(*17.68)
Income Tax 25.44 2014-15 Income Tax Appellate Tribunal
(*25.44)
3. The Customs Act 1962 Customs duty 1.90 1995-2012 Commissioner of Customs (Appeals) Mumbai
(*0.95)
4. The Central Excise Act 1944 Excise Duty 0.16 1989-90 to 1995-96 Commissioner of Central Excise (Appeals) Mumbai
(*0.06)
Excise Duty 0.62 1995-96 to 1996-97 Deputy Commissioner of Central Excise
Excise Duty 0.03 1997-98 Deputy Commissioner of Central Excise
Service Tax 0.76 2003-04 to 2005-06 Commissioner of Service Tax Mumbai Tribunal

indicates amount deposited or paid under dispute

viii. According to the information and explanations given to us as also on the basisof the books and records examined by us the Company has not defaulted in repayment ofdues to financial institutions or banks. The Company has not taken any loan or borrowingfrom Government and has not issued any debenture during the year.

ix. According to the information and explanations given to us and on the basis of thebooks and records examined by us the Company has not raised any money by way of initialpublic offer or further public offer (including debt instruments) during the year.Accordingly paragraph 3 (ix) of the Order in respect thereof is not applicable. Moneysraised by way of term loans were applied for the purposes for which those are raised.

x. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe year in the course of our audit.

xi. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration during the financial year 2019-20 in accordance with the requisite approvalsmandated by the provisions of Section 197 read with Schedule V to the Act.

xii. The Company is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order isnot applicable to the Company.

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and the details of suchtransactions have been disclosed in the standalone financial statements as required by theapplicable accounting standards.

xiv. According to the information and explanations given to us and on the basis of thebooks and records examined by us the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the year.Accordingly reporting under paragraph 3(xiv) of the Order is not applicable.

xv. According to the information and explanations given to us and on the basis of thebooks and records examined by us the Company has not entered into non-cash transactionswith directors or persons connected with him. Accordingly paragraph 3(xv) of the Order isnot applicable.

xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly paragraph 3(xvi) of the Order is not applicable tothe Company.

For BANSI S. MEHTA & CO.
Chartered Accountants
Firm Registration No. 100991W
PARESH H. CLERK
Partner
PLACE : Mumbai Membership No. 36148
DATED : June 9 2020 UDIN : 20036148AAAABI4404