DIRECTORS' REPORT Your Directors hereby present their Annual Report together with Audited Financial Statements for the year ended 31st March, 2016: 2. Division wise Performance: (a) South India Estates: i) Tea : Production of own Tea was lower at 45 Lakh kgs against the already low 51 lakh kgs of the previous year. Overall production of Tea including bought leaf was marginally higher at 74.18 lakh kgs compared to 72.08 lakh kgs. Average selling price per kg of Tea was marginally lower at Rs.110/- compared to Rs.115/- in the previous year. The wage rate per day also went up during the year. All these factors adversely impacted the overall Tea business. ii) Coffee : Own Coffee production for the year was at 625 Tons compared to 670 Tons in the previous year. Production of Coffee from outsourced beans was higher at 981 Tons as compared to 835 Tons in the previous year. The sales turnover for the year at 975 Tons was almost at same level compared to 1022 Tons in the previous year. Average selling prices were lower at Rs.1.86 Lakhs per Ton compared to Rs.2.13 Lakhs per Ton in the previous year. Further, weak coffee markets and lower production of pepper affected the profitability of Coffee business. (b) Tanzanian Estates: The crop for the year under review at 4.85 lakh kgs was lower compared to 5.67 lakh kgs. achieved in 2014-15. Sales were at Rs. 342 lakhs compared to Rs.446 lakhs in the previous year. As a result, the working of the Division was adversely impacted. (c) Electromags - Auto Electric Components Division The turnover for the year was marginally higher at Rs.10,418 lakhs compared to Rs.10,171 Lakhs in 2014-15. However, the results were marginally impacted due to increase in wages and pressure on selling prices. (d) Healthcare Division: Healthcare Division performed satisfactorily and reported marginally higher turnover at Rs.2370 lakhs compared to Rs.2190 lakhs of previous year. Profit margins have also improved due to product mix and lower raw material cost. 3. Consolidated Financial Results The Corporation has prepared Consolidated Financial Statements in accordance with the applicable Accounting Standards as prescribed under the Companies (Accounts) Rules, 2014 of the Companies Act, 2013. The Consolidated Financial Statements reflect the results of the Corporation and those of its subsidiaries and associates. As required under Regulation 33 of the Listing Conditions, the Audited Consolidated Financial Statements together with the Independent Auditors' Report thereon are annexed and form part of this Annual Report. Consolidated sale of products and services of the Corporation for the year ended 31st March, 2016 was Rs. 896,896 lakhs as compared with Rs. 812,338 lakhs in 2014-2015, registering a growth of 10 %. Consolidated Net Profit forthe year ended 31st March 2016 was higher by 6.75 % at Rs. 38,096 lakhs compared with Rs. 35,687 lakhs in the previous year Subsidiaries and Associate Companies Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, the statement containing the salient features of the financial statements of the Corporation's subsidiaries and associates , the accounts of which have been consolidated with that of the Corporation, forms part of the consolidated financial statements. The said statement also provides the details of performance and financial position of each of the subsidiaries/associates. The Corporation has only one material listed Indian subsidiary, viz. Britannia Industries Limited. In accordance with Section 136 of the Companies Act, 2013, the audited financial statements of the Corporation including the consolidated financial statements, and the audited accounts of each subsidiary, are available on the Corporation's website (<http://bbtcl.com/investor-relations/> annual-reports/) 4. Dividend Your Directors have recommended payment of dividend @ 50 % i.e Rs.1.00/- per share of Rs.2/-each (Previous year Rs.1.00/- per share). The dividend, if approved by the shareholders at the Annual General Meeting, will be paid to those shareholders whose names appear on the Register of Members of the Corporation at the close of business on 29th July, 2016. 5. Internal Financial Controls The Corporation maintains adequate and effective internal control systems which are commensurate with the nature, size and complexity of its business and ensure orderly and efficient conduct of the Corporation's business. The internal control systems in all Divisions of the Corporation including the Head office are routinely tested and verified by independent Internal Auditors and significant audit observations and follow-up actions are reported to the Audit Committee . The Audit Committee reviews the adequacy and effectiveness of the Corporation's internal control requirement and monitors the implementation of audit recommendations. The Corporation has in place adequate Internal Financial Controls with reference to Financial Reporting which ensure adherence to the Corporation's policies, safeguarding of its assets, maintaining proper accounting records and providing reliable financial information. During the year, such controls were tested and no reportable material weaknesses in design or operation were observed. 6. Risk Management Policy The Corporation has formulated a Risk Management Policy. Major risks identified by each of the businesses and functions are systematically addressed through mitigating actions on a continuing basis and are reported periodically to the Audit Committee and the Board. The details of the Risk Management functions are covered in the Corporate Governance Report. 7. Insurance The Corporation's plant and machinery, building, stocks and assets are adequately insured. 8. 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 been followed along with proper explanation relating to material departures; ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Corporation at the end of the financial year and of the loss of the Corporation for that period; iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets 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 Corporation and 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 all applicable laws and that such systems were adequate and operating effectively. Based on the framework of internal financial controls and compliance systems established and maintained by the Corporation , reports of the internal, statutory, cost and secretarial auditors duly reviewed by the management and the Board including the Audit Committee, the Board is of the opinion that the Corporation's internal financial controls were adequate and operating effectively during the financial year 2015-16. 9. 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 Annual Report. 10. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo Information pertaining to conservation of energy , technology absorption and foreign exchange 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. 11. Related Party Transactions The Corporation has formulated a Policy on Related Party Transactions which is disclosed on its website (<http://bbtcl.com/> related-party-transaction-policy/) All transactions entered into with related parties as defined under the Companies Act, 2013 , Clause 49 of the Listing Agreement and Regulation 2(1)(zc) and Regulation 23 of the SEBI (LODR) Regulations,2015 during the year under review, were in the ordinary course of business and on an arms' length basis and did not attract the provisions of Section 188 of the Companies Act, 2013. With regard to transactions with Related parties under the provisions of Regulation 23 of the Listing Regulations,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 in nature. Disclosures pertaining to transactions with related parties are given in Note no. 34 of the Notes forming part of the Standalone Financial Statements for the year 2015-2016. 12. Particulars of Loans, Guarantees and Investments The details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in Note nos.12,13, and 18 forming part of the Standalone Financial Statements for the year 2015-2016. 13. Directors Dr. (Mrs.) Sheela Bhide was appointed as Independent Woman Director of the Corporation for a period of five years from 5th August, 2015 to 4th August, 2020 at the Annual General Meeting held on 5th August, 2015. In accordance with the provisions of Section 152 of the Companies Act, 2013 ('the Act') and the Articles of Association of the Corporation, Mr. Jeh Wadia, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. Necessary resolution for his re-appointment as Director has been included in the Notice convening the ensuing Annual General Meeting and requisite details have been provided in the Statement of Material facts under section 102 of the Act and annexed to the Notice. Your Directors recommend the re-appointment of Mr Jeh Wadia as Director of the Corporation. During the year under review, Mr. Ashok Panjwani resigned as Managing Director and Director of the Corporation. The Board places on record its appreciation of the services rendered by Mr Panjwani during his tenure as Managing Director of the Corporation. Mr Ness Wadia was re-appointed as Managing Director of the Corporation for a term of five years with effect from 1st April, 2016 by the Board of Directors subject to the approval of the shareholders, which is being sought at the ensuing Annual General Meeting. Necessary information with respect to the re-appointment of Mr Ness Wadia as Managing Director has been provided in the Statement of material facts under section 102 of the Act and annexed to the Notice . Declaration by Independent Directors: The Corporation has received necessary declaration from each Independent Director under Section 149(7) of the Companies Act, 2013 , that he/ she meets the criteria of independence laid down in Section 149 (6) of the Act and the Listing Regulations. Board Meetings : During the year, five Board Meetings were duly convened and held, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed under the Companies Act, 2013. 14. Key Managerial Personnel Mr Amit Chhabra was appointed as Chief Financial Officer of the Corporation with effect from 8th February,2016. 15. Board Evaluation Pursuant to the provisions of the Companies Act, 2013, and Regulation 19 of the Listing Regulations,2015, the Board carried out an annual performance evaluation of its own performance and that of its Committees viz. Audit Committee, Stakeholders' Relationship Committee and Nomination and Remuneration Committee , and of the individual Directors. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. 16. Nomination and Remuneration Policy The Board, on the recommendation of the Nomination & Remuneration Committee, has formulated a Policy for the remuneration of Directors and Senior Management. Brief details of the Policy is provided in the Corporate Governance Report and also posted on the website of the Corporation (<http://bbtcl.com/remuneration-policy/>) 17. Statutory Auditors Pursuant to the provisions of Section 139 of the Companies Act, 2013 ("the Act") and the Rules made thereunder, Messrs. B S R & Co. LLP, Mumbai, Chartered Accountants, were appointed as Statutory Auditors of the Corporation for a period of five years at the Annual General Meeting held on 13th August,2014, subject to ratification by the members at every Annual General Meeting. M/s. B S R & Co., LLP have submitted a written consent that they are eligible to hold office as Statutory Auditors of the Corporation in terms of Section 139 of the Act and that they also satisfy the criteria provided in Section 141 of the Act. The Auditors have confirmed that they hold a valid Certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India as required under Regulation 33(1)(d) of the SEBI (LODR) Regulations,2015. Their appointment will be required to be ratified by the Members at the ensuing Annual General Meeting. 18. Cost Audit Pursuant to the provisions of Section 148 of the Companies Act, 2013 ("the Act") read with the relevant Rules, the Board of Directors on the recommendation of Audit Committee, appointed M/s GLS & Associates,(GLS) as Cost Auditors of the Plantations and Auto Electric Components divisions of the Corporation for the financial year 2016-17 at a remuneration of Rs.200,000/-(Rupees Two lakhs) plus service tax as applicable and reimbursement of actual out of pocket expenses. The remuneration payable to them is required to be ratified by the shareholders at the ensuing Annual General Meeting. 19. Secretarial Audit Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Corporation appointed Mr. Tushar Shridharani, Practicing Company Secretary as Secretarial Auditor for the year 20152016. The Report of the Secretarial Auditor is appended as Annexure B. With respect to the observation in the Secretarial Audit Report on the office of the Chief Financial Officer having remained vacant for a period of more than six months, it is hereby informed that this was due to non-availability of appropriate candidatures with the requisite qualifications and abilities. The Corporation has applied to the Central Government for approval of payment of remuneration to Mr. Ness Wadia for the financial years 2014-2015 and 2015-2016 in excess of limits prescribed under the Act and the requisite approvals are awaited. 20. Internal Auditors M/s Ernst & Young LLP were appointed Internal Auditors of the Corporation with effect from 1st October, 2015. The Board has re-appointed them as Internal Auditors for the Financial year 2016-2017. 21. Auditors' Qualifications There were no qualifications, reservations, adverse remarks or disclaimers made by the Statutory auditors, Internal Auditors or the Secretarial Auditors in their respective reports. The observation of the Secretarial Auditors have been dealt with appropriately in this Report. 22. Corporate Governance Report In accordance with the provisions of the SEBI (LODR) Regulations, 2015, a separate report on Corporate Governance along with the Auditors' Certificate on compliance of the conditions of Corporate Governance is appended to this Report as Annexure C. 23. Corporate Social Responsibility The Board of Directors constituted the Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013 comprising of three directors including two Independent Directors. The CSR Policy of the Corporation and initiatives taken by the Corporation with respect to Corporate Social Responsibility during the year under review are in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014. The requisite details are appended to this Report as Annexure D. 24. Audit Committee The composition, powers, role and terms of reference of the Audit Committee are in accordance with the requirements mandated under Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI (LODR) Regulations, 2015. The details of the Audit Committee along with number of meetings held during the period under review are covered in the Corporate Governance Report. The Corporation has established a vigil mechanism through the Audit Committee, wherein genuine concerns of employees and other Directors could be redressed. Accordingly, a Whistle Blower Policy has been formulated which also provides for adequate safeguards against victimization of employees who express their concerns. The details of the Whistle Blower Policy is covered in the Corporate Governance Report. The said Policy is available on the website of the Company (<http://www.bbtcl>. com/ whistle blower policy ). 25. 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, is appended to this Report as Annexure E. 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 entitled thereto, 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 at the Registered Office of the Corporation during business hours on working days up to the date of the ensuing Annual General Meeting. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary and the same will be furnished on request. 26. Significant & Material Orders Passed By The Regulators There are no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and the Corporation's operations in future. 27. Extract Of Annual Return The details forming part of the extract of the Annual Return in Form MGT 9 pursuant to the provisions of section 92 of the Act read with Rule 12 of the Companies ( Management and Administration) Rules, 2014 is appended to this Report as Annexure F. 28. Business Responsibility Report Pursuant to Regulation 32(2)(f) of SEBI(LODR) Regulations, 2015, the Business Responsibility Report of the Corporation for the Financial Year 2015-16 forms part of this Annual Report. 29. Change of Registrar And Share Transfer Agent Securities and Exchange Board of India (SEBI) vide its Order PR No. 66/2016 dated 22nd March, 2016 had passed an interim order against the Corporation's Registrar & Transfer Agent, Sharepro Services (India) Pvt. Ltd. ("Sharepro"), inter-alia restraining Sharepro and several entities linked with the management of Sharepro from buying, selling or dealing in the securities market or associating themselves with securities market, either directly or indirectly, in any manner, till further directions. Companies who were clients of Sharepro were also advised by SEBI to change the Registrars. In line with the SEBI directive and in view of the fact that the Corporation's existing agreement with Sharepro came to an end on 31st March, 2016, the Board appointed M/s. Karvy Computershare Private Limited, ("Karvy") having its Registered Office at "Karvy House" No 46, Avenue 4, Street No. 1, Banjara Hills, Hyderabad 500 034, as the Corporation's Registrar and Transfer Agent with effect from 1st April, 2016. 30. Acknowledgements Your Directors would like to thank all customers, shareholders, suppliers, bankers, employees and all other business associates for their continued support. On behalf of the Board Nusli N Wadia Chairman Place : Mumbai; date : 27 May, 2016 |