Bloom Dekor Ltd Management Discussions.


Indian economic overview

India has emerged as the fastest growing major economy in the world as per the Central Statistics Organization (CSO) and International Monetary Fund (IMF) and it is expected to be one of the top three economic powers of the world over the next 10-15 years, backed by its strong democracy and partnerships. The Survey of Indian Economy forecasts a growth rate of 7 to 7.5 per cent for FY19, as compared to the expected growth rate of 6.75 per cent in FY18, while saying that the rising crude oil price has become a major concern and is expected to grow by average 12% in the FY19. Focus on private investments and exports, two truly sustainable engines of economic growth, will be crucial in improving the climate for rapid economic growth.

The Economic Survey report 2017-18 also said that private investment is poised to rebound in the fiscal year 2019 and employment, education and agriculture will remain the focus in the medium term. The survey also said that exports will the biggest source of upside potential for the economy.

Market size

Indias gross domestic product (GDP) at constant prices grew by 7.2 per cent in September-December 2017 quarter as per the Central Statistics Organization (CSO). Corporate earnings in India are expected to grow by 15-20 per cent in FY 2018-19 supported by recovery in capital expenditure, according to JM Financial.

The tax collection figures between April, 2017 to February, 2018 show an increase in net direct taxes by 19.5 per cent year-on-year and an increase in net direct taxes by 22.2 per cent year-on-year.

India has retained its position as the third largest startup base in the world with over 4,750 technology startups, with about 1,400 new start-ups being founded in 2016, according to a report by NASSCOM.

Indias labour force is expected to touch 160-170 million by 2020, based on rate of population growth, increased labour force participation, and higher education enrolment, among other factors, according to a study by ASSOCHAM and Thought Arbitrage Research Institute.

Indias foreign exchange reserves were US$ 422.53 billion in the week up to March 23, 2018, according to data from the RBI.

Government Initiatives

The Union Budget for 2018-19 was announced by Mr. Arun Jaitley, Union Minister for Finance, Government of India, in Parliament on February 1, 2018. This years budget will focus on uplifting the rural economy and strengthening of the agriculture sector, healthcare for the economically less privileged, infrastructure creation and improvement in the quality of education of the country. As per the budget, the government is committed towards doubling the farmers income by 2022. A total of Rs. 14.34 lakh crore (US$ 225.43 billion) will be spent for creation of livelihood and infrastructure in rural areas. Budgetary allocation for infrastructure is set at Rs. 5.97 lakh crore (US$ 93.85 billion) for 2018-19. All-time high allocations have been made to the rail and road sectors.

Indian Door Market

Increasing consumer spending on construction and renovation of commercial & residential buildings will drive Indian doors market growth. Booming demand for energy efficient and impact resistant housing infrastructure will lead industry towards more innovative product materials. As per IBEF, Indian real estate industry is expected to reach USD 180 billion by 2020. Housing sector alone accounts for 5-6% of the Indian GDP. Private equity investment in real estate reached over USD 6 billion in 2016. Government initiatives across the countries for smart cities development will support the Indian doors market penetration.

Shifting consumer preference towards economical housing solutions has encouraged manufacturers towards product innovations to fulfil the customers demand. Emerging demand for uPVC and WPC doors due to their advantageous properties including enhancing strength, versatility, limited maintenance, high insulation against noise and resistance to moisture along at affordable prices. High demand for sliding and designer doors coupled with rising urbanization is likely to escalate Indian doors market growth over the coming years. Rapid economic growth has led to the construction of supermarkets, cinema, sports, and recreational complexes will positively influence demand.

Increasing central & state government finances for infrastructure development projects, public funding, and a decline in the construction material prices will boost the product market growth. In addition, private and public partnerships projects to support infrastructure development in rural areas are expected to induce immense potential to the industry size till 2024. Product price is highly influenced by the design and material along with the type of raw material grade used. Government involvement in terms of setting raw material price including aluminum, steel, and wood will impact Indian door market price trend.

Indian Laminate Market

The demand for decorative laminates is relatively high in developing countries such as India and China in the Asia Pacific region. One of the major reasons behind the growth of the market in these two countries is a rapid increase in the population accompanied by expansion of the economy that ultimately results in increase in per capita income. This increasing disposable income leads to an increase in the spending ability on home interiors. This factor is boosting the growth of the decorative laminates market across the Asia Pacific region.

Owing to an upsurge in the utilization of ready-to-assemble floorings as well as furniture and cabinets, the demand for high pressure laminates is likely to increase at a stable pace during the assessed period. Moreover, advanced functional properties such as scratch resistance, chemical resistance, anti-microbial and anti-fingerprint are further leading to an increase in the demand for high pressure laminates. Besides, by facilitating advanced R & D initiatives to foster innovation, manufacturers of high pressure laminates are able to develop newer and more advanced products. Manufacturing of eco-friendly decorative laminates is expected to present lucrative growth opportunities for manufacturers to enhance the existing customer base and augment market value share.

Digital laminates are customized laminates available according to individual consumer needs to enable specific designs, graphics, and patterns to be directly printed on laminates. With the use of latest technologies, the designers concept can now be transferred digitally and directly to the company facilities, which can further produce different digital sheets of any product type. Such laminates can be applied directly on walls, multipurpose furniture, stands, exhibition stalls, pictures, doors and other areas.

"Rapid growth in the residential sector in urban as well as semi-urban areas in North America and Europe is expected to contribute significantly to overall market growth. Substantial growth in the services and manufacturing sector has led to strong growth in the global GDP in the past. This, in turn, has had a positive impact on the decorative laminates market." Indias annual disposable income was over 1,600 billion in 2015. Rise in disposable income is likely to positively influence customers to spend on home decor, furniture, and furnishings.

Industry growth enablers

Increase in disposable incomes

The disposable income of the young Indian population has increased significantly. This has led to higher aspiration levels and has kindled the desire to improve home furniture.

Robust real estate growth

The real estate sector in India is expected to reach market size of $180 billion by FY 2020. Rising demand in the residential and commercial space in Tier II cities, and expansion of retail and hospitality sectors around the country is aiding growth of the laminate and doors.

Government initiatives

The Government policies are proving to be instrumental to the growth of the industry. 100% FDI has been allowed for township and settlements development projects. The ‘Housing For All scheme proposes 6 crore houses be built – 4 crore in rural areas and 2 crore in cities – by FY 2022. Also, the project to 100 smart cities is strengthening infrastructure development, in turn growing the demand for laminate and doors.

Rise in nuclear families

The rise in smaller families in India has led to an increase in spends and a better lifestyle. This population is looking beyond necessity and has built a taste for superior and luxury products. This trend has been encouraging for the organised players in the industry.

Emerging furniture replacement demand

Higher aspiration levels and disposable incomes are engendering a culture of faster furniture replacement, leading to rise in innovative products and better designs.


Revival of Real Estate: With signs of revival of the real estate market in addition to the reduced risk in the industry thanks to the real estate regulations latest act, the delayed projects are now resuming and picking up pace thus forming a positive outlook in the coming future.

E-way bill: With e-way bill underway, the gap between the unorganized and the organized sector will definitely reduce thus giving way to a more organized larger market share.

Exports: With still a largely untapped market, Blooms efforts in reviving its export share are underway which will lead to increased Profitability, better cash flows owing to more secured payments, natural hedging against import of raw material and a larger percentage of capacity utilization due to the size of the orders. All these factors will improve the per sheet realizations as well.


Raw Material: The increase in oil prices is directly proportional to the raw material prices that are used in the making of the laminates. This continuous increase in RM prices has lowered the margins significantly. The inconsistent availability of timber and ever increasing prices have affected the doors vertical Profitability.

External factors: The last year has been a turbulent year as the rapid change in policies have given way to uncertainities and reduced liquidity in the market. The latest policy change of withdrawal of LoUs and thus buyers credit has given a strong blow to the cash flow overnight. Without an alternative solution, such decisions create a big impact on immediate operations. Depreciation of rupee has also contributed significantly to the forex losses and will conitinue to negatively affect as most raw materials are of an import nature as well.


The Segment wise performance of the Company is given in the notes to account of the Financial Statement forming part of this annual report.


An increasing shift towards the organised sector is foreseen in the industry. Growing customer awareness, brand consciousness and a plethora of choices at the disposal of consumers is encouraging product innovation and quality focus from the organised players. However, high price differentiation between the unorganised and organised segment persists. The industry is hopeful that the implementation of E-Way Bill system will bridge this price gap and lead to formalization of the industry.


A well-defined risk management mechanism covering the risk mapping and trend analysis, risk exposure, potential impact and risk mitigation process is in place. The objective of the mechanism is to minimize the impact of risks identified and taking advance actions to mitigate it. The mechanism works on the principles of probability of occurrence and impact, if triggered. A detailed exercise is being carried out to identify, evaluate, monitor and manage both business and non-business risks.


Equipping Bloom with an engaged and productive workforce is essential to our success. We look for commitment, skills and innovative approach in people. In assessing capability, we consider technical skills and knowledge that have been acquired through experience and practice, along with mental processing ability, social process skills and their application.

We continue to invest in developing a pipeline of future talent and nurture them. As part of this process, we provide development and training opportunities to our workforce, which motivates and encourages them to grow in their work.

As on March 31, 2018 the company has 118 employees at its manufacturing plants and administrative Office. The Company has been maintaining cordial and healthy Industrial Relations, which has helped to a great extent in achieving the upper growth.


The Net revenue from operations decreased to Rs. 6,631.76 lakh as against Rs. 7702.88 Lakh in the previous Year showing a downward trend of 13.90% due to decrease in domestic sales of laminates. The major decrease in the revenue is attributable to presence of captive consumption and excise duty in revenue from operations pertaining to financial year 2016-17. However, the concept of captive consumption has been done away with implementation of GST rollout and excise portion up to June 30, 2017 was only included in the revenue from operation pertaining to financial year 2017-18.

The loss before Tax for the current year is Rs. 369.95 lakh as against the loss before tax of Rs. 322.59 lakh in the previous year resulted into loss after tax of Rs. 150.93 Lakh compared to loss after tax of previous year Rs. 277.63 Lakh.

The reason for going down in the Profit after tax is increase in the employment cost and raw material consumption cost as well finance cost.

During the financial year 2017-18, the companys major loss is attributed to the Investments made to lay the foundation for a revenue enhancement strategy along with sustainable growth. As part of this strategy, the company has opened up its own depots carrying full stock at various new locations thereby affecting the inventory in the short term but giving it a huge competitive advantage in the longer run. However, the government has declared GST rollout to be made effective from July 1, 2017. This implementation made our whole exercise and depots redundant since with the implementation, the tax structure now is the same throughout the country. The expenses incurred in launching and opening the depots also added to the losses.


The Company has aligned its current systems of internal financial control with the requirement of Companies Act 2013. The Internal Control is intended to increase transparency and accountability in an organizations process of designing and implementing a system of internal control. The Company has successfully laid down the framework and ensured its effectiveness. The Company has in place a well-defined system to record data for accounting and management information purposes and connects to different locations for efficient exchange of information. It has continued its efforts to align all its processes and controls with global best practices.

Though the various risks associated with the business cannot be eliminated completely, all efforts are made to minimize the impact of such risks on the operations of the Company. Necessary internal control systems are also put in place by the Company on various activities across the organization to ensure that business operations are directed towards attaining the stated organizational objectives with optimum utilization of the resources. Apart from these internal control procedures, a well-defined and established system of internal audit is in operation to independently review and strengthen these control measures, which is carried out by a reputed firm of Chartered Accountants. The audit is based on an internal audit plan, which is reviewed each year in consultation with the statutory auditors of the Company and the audit committee. The conduct of internal audit is oriented towards the review of internal controls and risks in its operations.

The audit committee reviews the action taken reports submitted by the management, audit reports submitted by internal auditors and statutory auditors. Suggestions for improvement are considered by the board and the audit committee follows up on corrective action. The audit committee also meets the statutory auditors of the Company to ascertain, inter alia, their views on the adequacy of internal control systems and keeps the board of directors informed of its major- observations periodically. Based on its evaluation (as defined in section 177 of Companies Act 2013), our audit committee has concluded that, as of March 31, 2018, our internal financial controls were adequate and operating effectively.


This report contains statements that may be "forward looking" including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to Companys future business developments and economic performance. While these forward looking statements indicate our assessment and future expectations concerning the development of our business, a number of risks, uncertainties and other unknown factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, general market, macroeconomic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments, and other key factors that could affect our business and financial performance. Company undertakes no obligation to publicly revise any forward looking statements to reflect future/likely events or circumstances.