Your Directors hereby present their Annual Report together with Audited FinancialStatements for the year ended 31st March 2017:
I. Financial Results:
(a) Standalone Financial Results
| || ||(Rs in Lakhs) |
|Particulars ||31.03.2017 ||31.03.2016 |
|Total Revenue ||31853 ||27559 |
|Profit Before Tax ||(356) ||(3216) |
|Profit After Tax ||(320) ||(3271) |
|Retained Earnings ||13408 ||14585 |
|Dividend (including taxthereon) ||840 ||840 |
(b) Overview of Performance
The Corporation achieved a gross income of Rs 31853 lakhs compared to Rs 27559 lakhsfor 2015-16. This includes income of Rs 2470 lakhs on account of profit on sale ofasset/shares. The gross income of Rs 29383 lakhs at operating level excluding the saidprofit was higher compared to Rs 27559 lakhs for previous year representing a growth of6% over the previous year.
The overall performance has shown improvement over the previous year as the loss forthe year excluding the profit on sale of assets/shares amounted to Rs 2826 lakhscompared to Rs 3216 lakhs for the previous year. Number of steps were taken to reducelosses by closing down uneconomical Bought Leaf operations for tea and Bought Beansoperations for Coffee at plantations division.
Despite lower production of tea and coffee and lower bought leaf/beans operationshigher wage costs and unfavourable weather conditions the overall losses at plantationdivision were brought down substantially compared to previous year.
Health care and Electromags division registered a marginal increase in turnover butreported marginally lower profits. However both these divisions continued to performsatisfactorily.
The current financial year also witnessed the transition from IGAAP to IND AS. TheCorporation is required to prepare the Financial Statements as per IND AS. As a result thetotal comprehensive income amounted to Rs 6103 lakhs as against negative comprehensiveincome of Rs 8044 lakhs for previous year. The substantial increase in the comprehensiveincome for the year was primarily due to changes in fair value of investment of equityshares.
The CorporationRss loss for the year excluding the other comprehensive income wassubstantially lower at Rs 320 lakhs as compared to the loss of Rs 3271 lakhs for theprevious year.
Division wise performance:
(i) Tea :
Production of own Tea was 48 lakh kgs against 45 lakh kgs of the previous year. Overallproduction of tea including bought leaf was lower at 64 lakh kgs compared to 74 lakh kgsin the previous year. Average selling price per kg of tea was higher at Rs 121 per Kgcompared to Rs 110 per kg in the previous year
(ii) Coffee :
Own coffee production for the year was at 667 tons compared to 625 tons in the previousyear. There was no production of coffee from outsourced beans as against 981 tons inprevious year. The sales turnover for the year at 2467 tons was substantially highercompared to 975 tons in the previous year following the liquidation of high inventories ofcoffee in the previous year. Average selling prices were marginally lower at Rs 1.60 lakhsper ton compared to 1.86 lakh per ton in the previous year.
The turnover for the year was marginally higher at Rs 10938 lakhs compared to Rs10664 lakhs in the previous year. However the results were marginally impacted due tohigher input cost and pressure on selling prices and effects of demonetization anddownward trend in the diesel car segment.
(iv) Health Care
Dental product business under healthcare division performed satisfactorily and reportedmarginally higher turnover of Rs 2541 lakhs compared to Rs 2396 lakh in the previousyear.
(c) Subsidiaries and Associate Companies Financial Performance
A report on the performance and financial position of each of the Subsidiaries andAssociates included in the Consolidated Financial Statements is provided in Form AOC-1 andforms part of this Annual Report.
The Corporation has only one material listed Indian subsidiary viz. BritanniaIndustries Limited.
Significant Developments during the year
The CorporationRss wholly owned subsidiary Leila Lands Sdn. Bhd. Malaysia set up inMauritius an Investment Company viz. Baymanco Investments Limited and holds 100% Equityshare capital of the said Company. As a result Baymanco Investments Limited has become astep down subsidiary of the Corporation.
The Corporation and Baymanco Investments Limited acquired 49218338 sharesrepresenting 23.84% of the paid up share capital of The Bombay Dyeing & ManufacturingCompany Limited (BDMC). The CorporationRss existing holding of 29639375 sharesrepresenting 14.35% together with the further acquisition of additional Equity shares bythe Corporation and its subsidiary now constitute 38.18% of the paid up share capital ofBDMC. As a result BDMC has become an Associate of the Corporation with effect from 20thMarch 2017.
(d) Consolidated Financial Results
The Corporation has prepared Consolidated Financial Statements in accordance with theapplicable Accounting Standards as prescribed under the Companies (Accounts) Rules 2014of the Companies Act 2013. The Consolidated Financial Statements reflect the results ofthe Corporation and those of its subsidiaries and associates. As required under Regulation33 of the Listing Conditions the Audited Consolidated Financial
Statements together with the Independent AuditorsRs Report thereon are annexed and formpart of this Annual Report.
BDMC an Associate of the Corporation with effect from 20th March 2017sought extension of time until July 2017 for presenting its annual accounts for the yearended 31st March 2017 so as to give effect to the merger of its wholly ownedsubsidiary Archway Investment Company Limited with effect from 1st April2016. The merger petition is pending the final order of the HonRsble National Company LawTribunal (RsNCLTRs). In view of the above and the resultant non-availability of thefinancial statements of BDMC for the year ended 31st March 2017 theconsolidated results of the Corporation have been prepared without giving effect to theadjustments on application of the equity method under IND AS 28. The impact of suchnon-adjustment is currently not ascertainable. The Independent AuditorsRs Report on theconsolidated accounts has been qualified to this effect which is self-explanatory.
Consolidated sale of products and services of the Corporation for the year ended 31stMarch 2017 was Rs 971288 lakhs as compared with Rs 899820 lakhs in 2015-2016registering a growth of 8%. Consolidated Net Profit for the year ended 31stMarch 2017 was higher by 8% at Rs 85846 lakhs compared with Rs 79198 lakhs in theprevious year.
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements of the Corporation including the consolidated financial statements and theaudited accounts of each subsidiary are available on the CorporationRss website(http://bbtcl.com/ investor-relations/annual-reports/)
Your Directors have recommended payment of dividend @ 50% i.e. Rs 1 per share of Rs 2/-each (Previous year Rs 1 per share). The dividend if approved by the shareholders at theAnnual General Meeting will be paid to those shareholders whose names appear on theRegister of Members of the Corporation at the close of business on 22nd July2017.
II. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
Information pertaining to conservation of energy technology absorption and foreignexchange earnings and outgo in accordance with the provisions of clause (m) of sub-section(3) of Section 134 of the Companies Act 2013 read with Rule 8(3) of The Companies(Accounts) Rules 2014 is appended as Annexure A to this Report.
During the year under review Dr.(Mrs.) Sheela Bhideresignedasan Independent Directorof the Corporation with effect from 31st December 2016. The Board places onrecord its appreciation of the services rendered by her during her tenure as a Director ofthe Corporation.
Dr.(Mrs.) Minnie Bodhanwala and Mr. Rajesh Batra were appointed as Additional Directorsrespectively with effect from 30th March 2017. Additional Directors holdoffice only upto the ensuing Annual General Meeting but are eligibile for and seekreappointment as in the case of Dr. (Mrs.) Minnie Bodhanwala as a Director liable toretire by rotation whereas in the case of Mr. Rajesh BatraRss appointment as anIndependent Director for the period of 5 years from 3rd August 2017 not beingliable to retire by rotation. The Corporation has received notices in writing from aMember proposing their candidature to the office of Director of the Corporation. Theirappointment as Directors of the Corporation is subject to approval of shareholders at theensuing Annual General Meeting. The Board recommends Dr.(Mrs.) Minnie BodhanwalaRssappointment as a Director of the Corporation liable to retire by rotation and Mr. RajeshBatraRss appointment as an Independent Director for a term of 5 years from 3rdAugust 2017 and he not being liable to retire by rotation.
In accordance with the applicable provisions of the Companies Act 2013 (Rsthe ActRs)and the Articles of Association of the Corporation Mr. Nusli Wadia retires by rotationat the ensuing Annual General Meeting and being eligible offers himself forre-appointment. Your Directors recommend the reappointment of Mr. Nusli Wadia as Directorof the Corporation.
Necessary resolutions for the appointment of Dr.(Mrs.) Minnie Bodhanwala and Mr. RajeshBatra and
the re-appointment of Mr. Nusli Wadia have been included in the Notice convening theensuing Annual General Meeting and requisite details have been provided in the Statementof Material facts under section 102 of the Act and annexed to the Notice.
(b) DirectorsRs Responsibility Statement
Pursuant to Section 134(5) of the Companies Act 2013 ("the Act") theDirectors to the best of their knowledge and ability confirm that:
(i) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
(ii) 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 Corporation at the end of the financial year and of theprofit of the Corporation for that period ;
(iii) 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 Corporation and for preventing and detecting fraud and other irregularities;
(iv) they have prepared the annual accounts on a going concern basis;
(v) they have laid down internal financial controls to be followed by the Corporationand that such internal financial controls are adequate and were operating effectively; and
(vi) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Corporation reports of the internal statutory costand secretarial auditors duly reviewed by the management and the Board including the AuditCommittee the Board is of the opinion that the CorporationRss internal financial controlswere adequate and operating effectively during the financial year 2016-17.
IV. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Board of Directors constituted the Corporate Social Responsibility (CSR) Committeein accordance with Section 135 of the Companies Act 2013 comprising of three Directorsincluding two Independent Directors. The CSR Policy of the Corporation and initiativestaken by the Corporation with respect to Corporate Social Responsibility during the yearunder review are in accordance with the Companies (Corporate Social Responsibility Policy)Rules 2014. The requisite details are appended to this Report as Annexure B.
(a) Key Managerial Personnel
Pursuant to Section 203 of the Act the Key Managerial Personnel (KMP) of theCorporation are Mr. Ness Wadia Managing Director Mr. Amit Chhabra Chief FinancialOfficer and Mr. N. H. Datanwala Vice President Corporate & Company Secretary. Therehas been no change in KMPs during the year.
(b) Particulars of Employees
The information as per Section 197(12) of the Companies Act 2013 read with Rule 5(1)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isappended to this Report as Annexure C.
Having regard to the provisions of the first proviso to Section 136(1) of the Act theAnnual Report is being sent to the members and others entitled thereto excluding theinformation on employeesRs particulars as required under Rule 5(2) of the aforesaid Rules.The said information is available for inspection by the members at the Registered Officeof the Corporation during business hours on working days up to the date of the ensuingAnnual General Meeting. If any member is interested in obtaining a copy thereof suchmember may write to the Company Secretary and the same will be furnished on request.
(c) Disclosure on Sexual Harassment of Women at Workplace
The Corporation has set up an Internal Complaints Committee for providing a redressalmechanism pertaining to sexual harassment of women employees at workplace. There was nocase of sexual harassment reported during the year under review.
VI. MANAGEMENT DISCUSSION & ANALYSIS
In terms of the provisions of Regulation 34 of the SEBI(LODR) Regulations2015 theManagement Discussion & Analysis forms part of the Annual Report.
VII.GOVERNANCE / SECRETARIAL
(a) Corporate Governance Report
In accordance with the provisions of the SEBI (LODR) Regulations 2015 a separatereport on Corporate Governance along with the AuditorsRs Certificate on compliance of theconditions of Corporate Governance is appended to this Report as Annexure D.
(b) Business Responsibility Report
Pursuant to Regulation 34(2)(f) of SEBI (LODR) Regulations 2015 the BusinessResponsibility Report of the Corporation for the Financial Year 2016-17 forms part of thisAnnual Report.
(c) Extract of Annual Return
The details forming part of the extract of the Annual Return in Form MGT 9 pursuant tothe provisions of section 92 of the Act read with Rule 12 of the Companies (Management andAdministration) Rules 2014 is appended to this Report as Annexure E.
(d) Board Evaluation
Pursuant to the provisions of the Companies Act 2013 and Regulation 19 of the ListingRegulations2015 the Board carried out an annual performance evaluation of its ownperformance and that of its Committees viz. Audit Committee StakeholdersRs RelationshipCommittee and Nomination and Remuneration Committee and of the individual Directors. Themanner in which the evaluation has been carried out has been explained in the CorporateGovernance Report.
(e) Nomination and Remuneration Policy
The Board on the recommendation of the Nomination & Remuneration Committee hasformulated a Policy for the remuneration of Directors and Senior Management. Brief detailsof the Policy is provided in the Corporate Governance Report and also posted on thewebsite of the Corporation (http:// bbtcl.com/remuneration-policy/)
(f) Declaration by Independent Directors
The Corporation has received necessary declaration from each Independent Director underSection 149(7) of the Companies Act 2013 that he/ she meets the criteria ofindependence laid down in Section 149 (6) of the Act and the Listing Regulations.
(g) Board Meetings:
During the year six Board Meetings were duly convened and held. The details of Boardand its Committees meetings are given in Clause No. 2 & 3 of the Corporate GovernanceReport that forms part of this Annual Report. The intervening gap between any two meetingswas within the period described under the Companies Act 2013.
(h) Whistle Blower Policy
The details of Whistle Blower Policy are given in the Clause No. 3(a) of the CorporateGovernance Report.
(i) Related Party Transactions
The Corporation has formulated a Policy on Related Party Transactions which isdisclosed on its website (http://bbtcl . com/related-party-transaction-policy/)
All transactions entered into with related parties as defined under the Companies Act2013 and Regulations 2(1)(zc) and 23 ofthe SEBI (LODR) Regulations 2015 during the yearunder review were in the ordinary course of business and on an armsRs length basis anddid not attract the provisions of Section 188 of the Companies Act 2013. With regard totransactions with Related parties under the provisions of Regulation 23 of the ListingRegulations 2015 prior approval of the Audit Committee was obtained wherever required.
During the year under review the Corporation had not entered into any contract/arrangement /transactions with related parties which could be considered as material innature. Accordingly there are no material related party transactions to be reported inForm AOC-2.
Disclosures pertaining to transactions with related parties are given in Note no. 50 ofthe Notes forming part of the Standalone Financial Statements for the year 2016-2017.
(j) Risk Management Policy
The Corporation has formulated a Risk Management Policy. Major risks identified by eachof the businesses and functions are systematically addressed through mitigating actions ona continuing basis and are reported periodically to the Audit Committee and the Board. Thedetails of the Risk Management functions are covered in the Corporate Governance Report.
The CorporationRss plant and machinery building stocks and assets are adequatelyinsured.
(l) Particulars of Loans Guarantees and Investments
The details of Loans Guarantees and Investments covered under the provisions ofSection 186 of the Companies Act 2013 are given in Note no. 48 forming part of theStandalone Financial Statements for the year 20162017.
(m) Significant & Material Orders Passed By The Regulators
There are no significant and material orders passed by the Regulators or Courts orTribunals impacting the going concern status and the CorporationRss operations in future.
(a) Statutory Auditors
Pursuant to the provisions of Section 139 of the Companies Act 2013 ("theAct") and the Rules made thereunder Messrs. B S R & Co. LLP Mumbai CharteredAccountants were appointed as Statutory Auditors of the Corporation for a period of fiveyears at the Annual General Meeting held on 13th August2014 subject to ratification bythe members at every Annual General Meeting. M/s. B S R & Co. LLP have submitted awritten consent that they are eligible to hold office as Statutory Auditors of theCorporation in terms of Section 139 of the Act and that they also satisfy the criteriaprovided in Section 141 of the Act. The Auditors have confirmed that they hold a validCertificate issued by the Peer Review Board of the Institute of Chartered Accountants ofIndia as required under Regulation 33(1)(d) ofthe SEBI (LODR) Regulations2015.
Their appointment will require to be ratified by the Members at the ensuing AnnualGeneral Meeting.
(b) Cost Audit
Pursuant to the provisions of Section 148 of the Companies Act 2013 ("theAct") read with the relevant Rules the Board of Directors on the recommendation ofAudit Committee appointed M/s GLS & Associates(GLS) as Cost Auditors of thePlantations and Auto Electric Components divisions of the Corporation for the financialyear 2017-18 at a remuneration of Rs 200000/- (Rupees Two lakhs only) plus such taxes asapplicable and reimbursement of actual out of pocket expenses. The remuneration payable tothem is required to be ratified by the shareholders at the ensuing Annual General Meeting.
(c) 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 theCorporation appointed Mr. Tushar Shridharani Practicing Company Secretary as SecretarialAuditor for the year 2016-2017. The Report of the Secretarial Auditor is appended asAnnexure F.
(d) Internal Auditors
Pursuant to the provisions of Section 138 of the Companies Act 2013 read with theCompanies (Accounts) Rule 2014 Messers Ernst & Young LLP were appointed as InternalAuditors of the Corporation for the Financial Year 201617. The Board has re-appointed themas Internal Auditors for the Financial Year 2017-2018.
(e) Auditors' Qualifications
There were no qualifications reservations adverse remarks or disclaimers made by theStatutory or the Secretarial Auditors in their respective reports on Standalone FinancialStatements.
The AuditorsRs Qualification on consolidated accounts with regard to non-availabilityof financial statements of BDMC for the year ended 31 March 2017 has been dealt with inpara (d)
IX. INTERNAL FINANCIAL CONTROLS
The Corporation maintains adequate and effective internal control systems which arecommensurate with the nature size and complexity of its business and ensure orderly andefficient conduct of the CorporationRss business. The internal control systems in allDivisions of the Corporation including the Head office are routinely tested and verifiedby independent Internal Auditors and significant audit observations and follow-up actionsare reported to the Audit Committee. The Audit Committee reviews the adequacy andeffectiveness of the CorporationRss internal control requirement and monitors theimplementation of audit recommendations.
The Corporation has in place adequate Internal Financial Controls with reference toFinancial Reporting which ensure adherence to the CorporationRss policies safeguarding ofits assets maintaining proper accounting records and providing reliable financialinformation. During the year such controls were tested and no reportable materialweaknesses in design or operation were observed.
Your Directors thank all customers shareholders suppliers bankers employees and allother business associates for their continued support.
| ||On behalf of the Board |
| ||Nusli N Wadia |
|Mumbai; 30 May 2017 ||Chairman |
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION
FOREIGN EXCHANGE EARNINGS & OUTGO
(A) CONSERVATION OF ENERGY:
(1) Steps taken on conservation of Energy :
At Plantation Division :
a) Emphasis and close monitoring of maintenance of optimum Power factor at TeaFactories continued during the year.
b) Favourable result have been obtained after installation of MD controller at thefactories at Mudis and Singampatti Tea Estates.
c) Optimizing rating of Pump/Motors at the Estate for reduction in operationalpersonnel.
At Auto Electric Components:
Environment Management Programme was used to reduce consumption of energy. Also taken-up modification ofAuto Crimping Machine resulting in saving 60% ofthe current level.
(2) Steps taken for utilizing alternate sources of energy:
The CorporationRss Bio-Methanisation and Waste Water Treatment Plant at Coffee Estatenot only treat the effluent water but also uses Coffee mucilage for production of Bio-Gaswhich has enabled reduction in consumption of energy. Windmill in the wind belt of TamilNadu meets with approx. 60% of energy requirement at Tea Factories.
(B) TECHNOLOGY ABSORPTION:
(i) Efforts made towards Technology Absorption:
At Plantation Division:
The Corporation has undertaken a programme for development of the all season MechanisedIntelligent Tea Harvester for harvesting tea leaves. The validation of the development sofar carried out is being undertaken with the external agencies and the feasibilities isbeaing looked at.
At Auto Electric Components:
The new product development team is working on the segments like Break system ABS andAlternater Starter Motors to grow in passenger vehicle segments. It is also looking atnonauto segment for its product with the internal know-how technology.
(ii) Benefits derived like product improvement cost reduction product development orimport substitution:
Benefits from the above measures will be studied in the coming financial years
(iii) There was no import of technology during the last three years.
(C) FOREIGN EXCHANGE EARNING AND OUTGO:
(i) Foreign Exchange earned during the year in terms of actual inflows : Rs 39800Lakhs.
(ii) Foreign Exchange outgo during the year in terms of actual outflows : Rs 1443Lakhs.
Statement of Disclosure of Remuneration under Section 197 of Companies Act 2013 andRule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014
i. Ratio of the remuneration of each Managing Director to the median remuneration ofthe employees of the Corporation for the financial year 2016-17 the percentage increasein remuneration of Key Managerial Personnel during the financial year 2016-17.
|. Name of Director/ KMP ||Designation ||Ratio of remuneration of each Director to median remuneration of employees ||Percentage increase in Remuneration |
|1. Mr. Ness Wadia ||Managing Director ||319.03 ||Nil |
|2. Mr. N. H. Datanwala ||Vice President Corporate & Company Secretary ||Not Applicable ||Nil |
|3. Mr. Amit Chhabra ||Chief Financial Officer ||Not Applicable ||Nil |
a) The Non-Executive Directors of the Corporation were paid only sitting fees duringthe year under review the details of which are provided in the Corporate GovernanceReport and the Extract of Annual Return. The ratio of remuneration and percentage increasefor Non-Executive DirectorsRs Remuneration is therefore not considered for the purposeabove.
b) There was no increase in the remuneration of Managing Director in the financial year2016-17 as recommended by the Nomination and Remuneration Committee and approved by theBoard of Directors.
c) Employees for the purpose above includes all employees at all divisions of theCorporation.
ii. The percentage increase in the median remuneration of employees for the financialyear 2016-2017 was 5.5%.
iii. There are 5607 permanent employees on the pay roll of the Corporation as on 31stMarch 2017.
iv. Average percentage increase made in the salaries of employees other than theManagerial Personnel in the Financial Year 2016-17 on comparable basis was 5% overprevious year whereas there was no increase in the remuneration of Managing Director inthe financial year 2016-17 as recommended by the Nomination and Remuneration Committee andapproved by the Board of Directors.
v. The remuneration paid during the year 2016-2017 is as per the Remuneration Policy ofthe Corporation.