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Bombay Burmah Trading Corporation Ltd.

BSE: 501425 Sector: Agri and agri inputs
NSE: BBTC ISIN Code: INE050A01025
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OPEN 1559.80
CLOSE 1548.30
VOLUME 9018
52-Week high 1820.00
52-Week low 855.60
P/E
Mkt Cap.(Rs cr) 10,695
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bombay Burmah Trading Corporation Ltd. (BBTC) - Director Report

Company director report

Your Directors hereby present their 153rd Annual Report together withAudited Financial Statements for the year ended 31st March 2018:

I. Financial Performance: a) standalone Financial results

(` in Lakhs)

Particulars

31.03.2018

31.03.2017

Total Revenue

24725

31852

Profit/(Loss) Before Tax

(3091)

(356)

Profit/(Loss) After Tax

(2583)

(320)

Retained Earnings

9744

13408

Dividend (including tax thereon)

841

841

b) Overview of Performance

During the Financial Year 2017-18 the Corporation achieved a grossincome of ` 24725 lakhs compared to ` 31853 lakhs in Financial Year 2016-17. Thisincludes income of ` 1312 lakhs on account profit on the sale of residentialpremises as compared to the income of ` 2480 lakhs on account of profit on the sale ofresidential premises/shares in the previous year. The gross income of ` 23413 lakhs atoperating level was lower compared to ` 29372 lakhs for the previous year.

The overall performance was severely impacted due to the underperformance of the Corporation's plantation divisions i.e. Tea and Coffee.

The total Tea production was adversely impacted by the un-precedentedincident of tea mosquito bugs due to erratic weather conditions and curtailment of BoughtLeaf operations due to quality of Bought Leaf during the year. This resulted in lowerproduction of Tea by 19% over the previous year. With regard to Coffee the year underreview was an unusual year during which the production across Coorg region was lower byalmost 50% on account of continuous drought like condition during the growing period overlast 2 years. Your Corporation's production of Coffee at 273 tonnes was the lowest overpast few decades. The overall coffee production was lower by 37% over the previous year.This severely impacted the performance of Coffee.

Electromags division though it continued to operate profitably couldnot grow due to migration to Bharat Stage IV norms for vehicles and pressure from OEMcustomers for price reduction in spite of increase in the cost of raw materials likecopper brass steel etc.

Dental Product division performed satisfactorily in both impressionmaterial and polymer business despite the drop the sale of alloys.

As a result the overall loss for the year was substantially higher at` 2583 lakhs as compared to a loss of ` 320 lakhs for the previous year. However theloss for the year excluding profit on the sale of assets/shares amounted to ` 3895lakhs compared to a loss of

` 2799 lakhs for the previous year.

No material changes and commitments have occurred after the closure ofyear under review till the date of this report which would affect the financial positionof the Corporation.

Division wise performance: i. Tea:

Production of own Tea at South

India Plantation was 46.49 lakhs kgs as against 47.62 lakhs kgs forthe previous year. Overall production including Bought Leaf was lower at

52.32 lakhs kgs compared to 64.41 lakhs kgs for the previous year dueto lower production and curtailment of

Bought Leaf operations. This resulted in lower turnover of ` 65.62crores compared to ` 79.96 crores in the previous year. The average selling price of teaper kg was at ` 124 per kg against `123 per kg for the previous year. As a result theincrease in wage costs and other input costs over previous year were required to beabsorbed in the working.

Production of Tea at Tanzania Estate was 7.57 lakhs kgs as against 5.44lakhs kgs for the previous year. The turnover of ` 6.20 crores as against

` 4.79 crores of previous year and the average selling price of `89 perkg as against ` 80 per kg for the previous year resulted in the better performance.

ii. Coffee:

The Corporation's Coffee production for the year was 273 tonnes ascompared to 669 tonnes for the previous year. The production for the year has been lowestin recent history due to unfavourable weather conditions all across the Coorg coffeeplantation. The Corporation to augment the lower production procured 150 tonnes fromoutsourced Beans as against no outsourced Beans in the previous year. Despite the downwardpricing trend for coffee in Europe the Corporation has been able to achieve marginallyhigher selling prices at `

2 lakhs /tonnes compared to ` 1.6 lakhs/tonnes in the previous year.

iii. Electromags:

The turnover for the year was lower at ` 97.6 crores compared to

` 100.8 crores for the previous year. The performance of the divisionwas impacted due to migration to

Bharat Stage IV norms resulting in lower turnover almost by ` 4 croresparticularly in exports as domestic sales were almost same as last year. Further higherraw material costs and pressure on selling price by the customers affected profitability.

iv. Health Care:

Dental products business performed satisfactorily and reportedmarginally lower turnover of ` 24.5 crores compared to ` 25.4 crores in the previousyear.

c) subsidiaries and associate Companies Financial Performance

A report on the financial performance 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 Indiansubsidiary viz. Britannia Industries Limited.

Significant year

During the year under review N. W.

Exports Limited (‘NWE') and Sunflower Investments & TextilesLimited (‘SITL') merged with Nowrosjee Wadia & Sons Ltd. (‘NWS') pursuant toa Scheme of Arrangement and the shares held by NWE and SITL in the Corporation vested inthe name of NWS. NWS hold 23353225 equity shares of the Corporation representing 33.47%of it's paid-up share capital. Accordingly your Corporation is an associate of NWS.

d) Consolidated Financial results

The Corporation has prepared Consolidated Financial Statements inaccordance with the applicable Accounting Standards as prescribed under the Companies(Accounts) Rules 2014 of the Companies Act 2013. The Consolidated Financial Statementsreflect the results of the Corporation and those of its subsidiaries and associates. Asrequired under Regulation 33 of the Listing Regulations the Audited Consolidated FinancialStatements together with the Independent Auditors' Report thereon are annexed and formpart of this Annual Report.

In the Consolidated Financial Statements the comparative informationpresented for the year ended 31st March 2017 has been restated to give effect to theadjustments arising from the acquisition of additional equity shares of

The Bombay Dyeing and Manufacturing Company Limited (‘BDMC') bythe

Corporation on 20th March 2017 which resulted in BDMC becoming anassociate of the Corporation effective that date in accordance with equity methodprescribed under Ind AS 28 - ‘Investments in Associates and Joint Ventures' as statedin the Notes forming part of the Consolidated Financial Statements.

Consolidated sale of products and services of the Corporation for theyear ended 31st March 2018 was

` 1031581 lakhs compared to with ` 971288 lakhs in 2016-2017registering a growth of 6.21%. Consolidated Net

Profit for the year ended 31st March 2018 has been at ` 77 265 lakhscompared to ` 85846 lakhs for the previous year.

In accordance with Section 136 of the Companies Act 2013 the auditedfinancial statements of the Corporation including the consolidated financial statementsand the audited accounts of all the subsidiary are available on the

Corporation's website http://bbtcl.com/investor-relations/annual-reports/.

e) share Capital

The issued subscribed and paid-up Share Capital of the Corporationstood at ` 1395.44 lakhs as at 31st March 2018 comprising of 69771900 Equity Sharesof ` 2 each fully paid-up. There was no change in share capital during the year underreview.

f) Non-Convertible debentures:

During the year under review the Corporation issued 1500 SecuredRedeemable Non-Convertible Debentures

(‘NCDs') of the face value of ` 1000000 each aggregating `150Crores on a private placement basis. The said NCDs bear interest rate of 8.44% p.a. andare redeemable on 30th April 2020. The said

NCDs are listed on WDM Segment of BSE

Limited.

g) Dividend

Your Directors are pleased to recommend a dividend of ` 1 per share ofthe face value of ` 2 each (previous year ` 1 per share). The dividend if approved by theshareholders at the ensuing Annual General Meeting will be paid to those shareholderswhose names appear in the Register of Members of the Corporation as on the Book ClosureDate. The total dividend payout amounts to ` 839.78 lakhs including dividend distributiontax of ` 142.06 lakhs.

h) Secretarial standards

The Directors state that applicable Secretarial Standards i.e. SS-1and

SS-2 relating to ‘Meetings of the Board of Directors' and‘General Meetings' respectively have been duly complied with by the Corporation.

II. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO

Information pertaining to conservation of energy technology absorptionand foreign exchange earnings and outgo in accordance with the provisions of clause (m) ofsub- section (3) of Section 134 of the Companies Act 2013 read with Rule 8(3) of theCompanies (Accounts) Rules 2014 is appended as annexure a to this Report.

III. DIRECTORS

A) APPOINTMENT/RE-APPOINTMENT

During the year under review there was no change in the composition ofthe

Board of Directors.

In accordance with the applicable provisions of the Companies Act 2013

(‘the Act') and the Articles of Association of the CorporationMr. Jehangir N. Wadia Non-Executive Director retires by rotation at the ensuing AnnualGeneral Meeting and being eligible offers himself for re-appointment. Your Directorsrecommend the re-

19 appointment of Mr. Jehangir N. Wadia as a Director of theCorporation.

SEBI vide its Notification dated 9th May 2018 amended Regulation17(1A) of the SEBI (Listing Obligations and

Disclosure Requirements) Regulations

2015 (‘SEBI Listing Regulations 2015 or ‘SEBI (LODR)Regulations 2015') to state that a non-executive director who has attained the age of 75years shall be appointed or continue as a Director after obtaining approval ofshareholders by special resolution. The said amendment will be effective from 1st April2019. Accordingly it is proposed to place special resolutions before the shareholders ofthe Corporation for continuation of four Directors of the Corporation viz; Mr. A. K.Hirjee Mr. D. E. Udwadia Mr. M. L. Apte who are above the age of 75 years and Mr. NusliWadia Chairman of the Corporation who will attain the age of 75 years before 1st April2019.

B) DECLARATION BY INDEPENDENT DIRECTORS

The Corporation has received declarations from all the IndependentDirectors confirming that they meet the criteria of independence as prescribed both underof the Act and the SEBI

(LODR) Regulations 2015.

c) Board Evaluation

Pursuant to the applicable provisions of the Act and Regulation 19 ofthe SEBI

(LODR) Regulations 2015 the Board undertook an annual performanceevaluation of its performance and that of its Committees viz. Audit CommitteeStakeholders' Relationship Committee and Nomination and Remuneration Committee and of theindividual Directors. The manner in which the evaluation was carried out has beenexplained in the Corporate Governance

Report.

d) Nomination and remuneration Policy

The Board on the recommendation of the Nomination & Remuneration

Committee has formulated a Policy for the remuneration of Directorsand

Senior Management. Brief details of the Policy are provided in theCorporate Governance Report and also posted on the website of the Corporation (http://bbtcl.com/remuneration-policy/).

E) Directors' Responsibility Statement

Pursuant to Section 134(5) of the

Companies Act 2013 (‘the Act') the

Directors to the best of their knowledge and ability confirm that: i)in the preparation of the annual accounts the applicable accounting standards have beenfollowed along with proper explanation relating to material departures; ii) they haveselected such accounting policies and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Corporation at 31st March 2018 and of the loss of the Corporation forthe year ended on that date; iii) they have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Corporation and for preventing and detecting fraud andother 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 Corporation andthat 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 compliancesystems established and maintained by the Corporation reports of the internal statutorycost and secretarial auditors duly reviewed by the management and the Board including theAudit Committee the Board is of the opinion that the Corporation's internal financialcontrols were adequate and operating effectively during the financial year 2017-18.

IV. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Board constituted the Corporate Social Responsibility (‘CSR')Committee comprising of three Directors including two Independent Directors. The CSRPolicy of the Corporation and initiatives taken by the Corporation with respect toCorporate Social Responsibility during the year under review are in accordance with theCompanies (Corporate Social Responsibility Policy) Rules 2014. The requisite details areappended to this Report as annexure B. V. EMPLOYEES A) KEY MANAGERIAL PERSONNEL

Pursuant to Section 203 of the Act the Key Managerial Personnel(‘KMP') of the Corporation are Mr. Ness Wadia Managing Director and Mr. N. H.

Datanwala Vice President Corporate & Company Secretary. The otherKey

Managerial Personnel Mr. Amit Chhabra

Chief Financial Officer (‘CFO') of the

Corporation resigned from the services of the Corporation and ceased tobe the CFO and KMP of the Corporation with effect from close of business hours of 30thApril 2018.

b) Particulars of Employees

The information as per Section 197(12) of the Act 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 the Annual Report is being sent to the members and others entitledthereto excluding the information on employees' particulars as required under Rule 5(2)of the aforesaid Rules. The said information is available for inspection by the members atthe Registered Office of the Corporation during business hours on working days up to thedate of the ensuing Annual General Meeting. If any member is interested in obtaining acopy thereof such member may write to the Company Secretary and the same will befurnished on request.

VI. MANAGEMENT DISCUSSION & ANALYSIS

In terms of the provisions of Regulation 34 of the SEBI (LODR)Regulations 2015 the Management Discussion & Analysis forms part of the AnnualReport.

VII.GOVERNANCE / SECRETARIAL

A) CORPORATE GOVERNANCE REPORT

In accordance with the provisions of the SEBI (LODR) Regulations

2015 a separate report on Corporate Governance along with theAuditors'

Certificate on conditions of Corporate Governance is appended to thisReport as annexure d.

b) Business responsibility report

Pursuant to Regulation 34(2)(f) of SEBI

(LODR) Regulations 2015 the Business

Responsibility Report of the Corporation for the Financial Year 2017-18forms part of this Annual Report.

c) Extract of annual return

The details forming part of the extract of the Annual Return in FormMGT 9 pursuant to the provisions of section 92 of the Act read with Rule 12 of theCompanies (Management and Administration) Rules 2014 is appended to this Report as annexureE.

d) Board Meetings:

During the year five Board Meetings were duly convened and held. Thedetails of Board and its Committees meetings are given in the Corporate Governance Reportthat forms part of this Annual Report.

e) Whistle Blower Policy

The details of the Whistle Blower Policy are given in the CorporateGovernance Report.

f) Related Party Transactions

The Corporation has formulated a Policy on Related Party Transactionswhich is disclosed on its website (http://bbtcl. com/related-party-transaction-policy/)

All transactions entered into with related parties as defined under theAct Indian Accounting Standards (Ind AS 24) and Regulations 2(1)(zc) and 23 of the SEBI

(LODR) Regulations 2015 during the year under review were in theordinary course of business and on an arms' length basis and did not attract theprovisions of Section 188 of the Act. With regard to transactions with Related partiesunder the provisions of Regulation 23 of the Listing Regulations 2015 prior approval ofthe Audit Committee was obtained wherever required.

During the year under review the Corporation had not entered into anycontract/ arrangement /transactions with related parties which could be considered asmaterial in nature. Accordingly there are no material related party transactions to bereported in Form AOC-2.

Disclosures pertaining to transactions with related parties are givenin Note no. 48 of the Notes forming part of the Standalone Financial Statements for theyear 2017-2018.

g) Risk Management

Your Corporation has a well-defined risk management framework in placeand robust organizational structure for managing and reporting risks periodically to theAudit Committee and to Board. The details of the Risk

Management functions are covered in the Corporate Governance Report.

h) Insurance

The Corporation's plant and machinery building stocks and assets areadequately insured.

i) Particulars of Loans Guarantees and Investments

The details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Act are given in Note No.46 forming part of theStandalone Financial Statements.

j) Significant & the regulators

There are no significant orders passed by the Regulators or Courts orTribunals impacting the going concern status and the Corporation's operations in future.

' k) Singampatti Land Matter

Some significant however with regard to one of the estates viz.Singampatti Tea Estate in Tamil Nadu are enumerated hereunder. The Corporation in theyear 1929 acquired leasehold rights in land for cultivation of tea coffee cardamom etc.under a valid lease for a period of 99 years from the Zamindar of Singampatti. TheCorporation has been cultivating and carrying on all its plantation activities at theabove Tea Estate since then.

The leased land has been classified as forest land during the year andalso covered as Tiger Reserve under the Wildlife Protection Act despite the fact that theCorporation has a bustling township on the leased land. The Tamil Nadu GovernmentAuthorities have excluded the leased land and permitted the Corporation to continue itsplantation activities during the tenure of the Lease. The Corporation is howevercontesting these matters before the Madras High Court.

Also the Government Authorities in Tamil Nadu during the year demandedincreased lease rentals in respect of the leased land retrospectively from the year 1958.The Corporation has challenged the said demand by way of Writ Petition before Madras HighCourt. The said Writ has been admitted and stay granted.

VIII. AUDITORS

A) STATUTORY AUDITORS

At the 149th Annual General Meeting ("AGM") held on 13thAugust 2014

Members had appointed M/s. BSR & CO. LLP (BSR) CharteredAccountants (ICAI Firm Registration Number 101248W/W-

100022) as Statutory Auditors of the

Corporation to hold office for a period of

5 years until the conclusion of the 154th AGM of your Corporation to beheld in the year 2019 subject to ratification of the appointment by the Members at everyAGM held thereafter. Pursuant to the Companies Amendment Act 2017 with effect from 7thMay 2018 the appointment of Statutory Auditors is no longer required to be ratified atevery

Annual General Meeting.

b) Cost audit

Pursuant to the provisions of Section 148 of the Act read with therelevant

Rules the Board of Directors on the recommendation of Audit Committeeappointed M/s GLS & Associates (GLS) as Cost Auditors of the Plantations and AutoElectric Components divisions of the Corporation for the financial year 2018-19 at aremuneration of `

200000 plus taxes as applicable and reimbursement of actual out ofpocket expenses. The remuneration payable to them is required to be ratified by theshareholders at the ensuing Annual General Meeting.

c) Secretarial audit

Pursuant to the provisions of Section 204 of the Act read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theCorporation appointed Mr. Tushar Shridharani Practicing Company Secretary as SecretarialAuditor for the year 2017-2018. The Secretarial Audit Report does not contain anyqualification reservation or adverse remark. The Report of the Secretarial Auditor isappended as annexure F.

d) Internal auditors

Pursuant to the provisions of Section 138 of the Act read with theCompanies

(Accounts) Rule 2014 Messers Ernst & Young LLP were appointed asInternal

Auditors of the Corporation for the

Financial Year 2017-18. The Board has re-appointed them as InternalAuditors for the Financial Year 2018-19.

e) Reporting of Frauds by auditors

During the year under review the Statutory Auditors Cost Auditors andSecretarial Auditor have not reported any instances of frauds committed in the

Corporation by its Officers or Employees to the Audit Committee undersection 143(12) of the Companies Act 2013 details of which needs to be mentioned in thisReport. f) Auditors' Qualifications

There were no qualifications reservations adverse remarks ordisclaimers made by the Statutory or the Secretarial Auditors in their respective reportson Standalone Financial Statements and Consolidated Financial Statements.

IX. DEPOSITS

Your Corporation has not accepted during the year any deposits from thepublic or its employees within the meaning of section 73 of the Act read with theCompanies (Acceptance of Deposits) Rules 2014.

X. INTERNAL FINANCIAL CONTROLS

The Corporation maintains adequate and effective internal controlsystems which are commensurate with the nature size and complexity of its business andensure orderly and efficient conduct of the Corporation's business. The internal controlsystems in all Divisions of the Corporation including the head office are routinely testedand verified by independent Internal Auditors and significant audit observations andfollow-up actions are reported to the Audit Committee. The Audit Committee reviews theadequacy and effectiveness of the Corporation's internal control requirement and monitorsthe implementation of audit recommendations.

The Corporation has in place adequate

Internal Financial Controls with reference to

Financial Reporting which ensure adherence to the Corporation'spolicies safeguarding of its assets maintaining proper accounting records and providingreliable financial information. During the year such controls were tested and noreportable material weaknesses in design or operation were observed.

XI. OTHERS

Your Directors state that no disclosure or reporting is required inrespect of the following items as there were no transactions pertaining to these itemsduring the year under review:

1. Details relating to deposits covered under Chapter V of the Act.

2. Issue of equity shares with differential rights as to dividendvoting or otherwise.

3. Issue of Shares (Including Sweat Equity

Shares) to employees of the Company under any Scheme.

4. Voting rights which are not directly exercised by the employees inrespect of shares for the subscription/ purchase of which loan was given by theCorporation (as there is no scheme pursuant to which such persons can beneficially holdshares as envisaged under section 67(3)(c) of the Companies Act 2013).

5. The Corporation does not have any scheme of provision of money forthe purchase of its own shares by employees or by trustees for the benefit of employees.

XII. ACKNOWLEDGMENTS

Your Directors thank all customers shareholders suppliers bankersemployees and other business associates for the continued support given by them.

On behalf of the Board

Nusli N Wadia Chairman Mumbai 21st May 2018 (DIN: 00015731)