CORPORATE GOVERNANCE REPORT
1. Corporation's Philosophy on Corporate Governance:
The Corporation believes that good Corporate Governance is a pre-requisite for achieving sustainable corporate growth and enhancing value for all stakeholders in the business.
Good corporate governance emerges from transparency in business dealings and having in place robust systems and processes defining accountability, integrity, fairness and ethics in business practices, thereby fulfilling the responsibilities of corporate citizenship.
2. Board of Directors:
The Board of Directors of the Corporation, headed by Mr. Nusli N. Wadia, Non-Executive Promoter Director, comprises of eminent persons with considerable professional experience and expertise in diverse business areas. As on 31 st March, 2016, the Board comprised of seven (7) Directors out of which four (4) are Independent Directors ( including Woman Director) and one (1) is Executive Director.
Note: Mr Nusli N. Wadia, Mr. Jeh Wadia and Mr. Ness Wadia are relatives as per section 2(77) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014.
Mr. A K Hirjee, Mr. M L Apte and Mr. D E Udwadia were appointed as Independent directors at the 149th Annual General Meeting of the Corporation held on 13th August, 2014 for a period of five years upto 12th August, 2019. Dr.(Mrs) Sheela Bhide was appointed as Independent Director at the 150th Annual General Meeting of the Corporation held on 5th August, 2015 for a period of five years upto 4th August,2020.
3. Committees of the Board :
The Board has four Committees: the Audit Committee, the Nomination and Remuneration Committee, the Stakeholders' Relationship Committee and the Corporate Social Responsibility (CSR) Committee.
(a) Audit Committee:
The composition, powers, role and terms of reference of the Audit Committee are in accordance with the requirements of section 177 of the Companies Act, 2013 and the Rules made thereunder read with Regulation 18 and Part C of Schedule II of the SEBI (LODR) Regulations, 2015.
The Audit Committee comprises of 3 Independent Directors:
• Mr. M. L. Apte ( Chairman)
• Mr. D. E. Udwadia
• Mr. A. K. Hirjee
Mr. Ness Wadia, Managing Director, Mr Amit Chhabra, Chief Financial Officer, Statutory Auditors and Internal Auditors attend Audit Committee meetings as Invitees. Mr. N H Datanwala, Vice President Corporate and Company Secretary, acts as the Secretary to the Committee.
The role of the Audit Committee flows directly from the Board of Directors' overview function on corporate governance, which holds the management accountable to the Board and the Board accountable to the stakeholders. The terms of reference of the Audit Committee broadly includes review of the Corporation's financial statements, internal financial reporting process, internal financial controls, the audit process, adequacy, reliability and effectiveness of the internal control systems and risk management process, vigil mechanism, related party transactions, monitoring process for compliance with laws and regulations and the Code of Conduct. The Audit Committee also reviews management letters and the responses thereto by the management.
During the year under review, eight (8 ) Meetings of the Audit Committee were held, the dates being 29th April, 2015; 18th May, 2015; 22nd May, 2015; 31st July, 2015; 7th October, 2015; 30th October, 2015; 5th February, 2016 and 12th March, 2016.
Internal Audit and Control:
M/s. S. Pi Paramasivan & Co. and M/s. Shanp & Tannan, Goa were the internal auditors up to 30th September 2015 for the plantation & other Division respectively.
M/s. Ernst & Young, LLP were appointed as the internal auditors of the Corporation with effect from 1st October, 2015.
The appointment and remuneration of the internal auditors and the internal audit plan are approved by the Audit Committee.
The reports and findings of the internal auditor and the internal control system are periodically reviewed by the Audit Committee.
Vigil Mechanism/ Whistle Blower Policy:
The Corporation believes in the conduct of the affairs of its constituents in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behavior. Towards this end, the Corporation has implemented a Whistle Blower Policy, with a view to provide a mechanism for employees and Directors of the Corporation to approach the Ethics Committee or Chairman of the Audit Committee of the Corporation to report instances of violations of laws, rules and regulations, unethical behavior, actual or suspected, fraud or violation of the Corporation's code of conduct or ethics policy. The vigil mechanism also provides adequate safeguards against victimisation of persons who use such mechanisms and also to ensure direct access to the Ethics Committee or Chairman of the Audit Committee in appropriate or exceptional cases.
(b) Nomination and Remuneration Committee:
The composition, powers, role and terms of reference of the Committee are in accordance with the requirements mandated under Section 178 of the Companies Act, 2013 and Regulation 19 read with Part D of Schedule II of the SEBI (LODR) Regulations, 2015.
The Committee has also adopted the NRC Charter.
The Nomination and Remuneration Committee (NRC) comprises of 3 Independent Directors and 1 Non-Executive Promoter Director:
• Mr. M. L. Apte (Chairman)
• Mr. Nusli N. Wadia
• Mr. A. K. Hirjee
• Mr. D. E. Udwadia
The broad terms of reference of the Nomination and Remuneration Committee include :
• Recommend the set up and composition of the Board, its committees and the leadership team of the Corporation comprising of Key Managerial Personnel ("KMP") as defined by the Companies Act, 2013) and executive team (as defined by the Committee);
• Evaluation of performance of the Board, its committees and individual directors;
• Appointment and Remuneration of directors, KMP and KRAs for the Business Heads Oversight of the familiarisation programme of directors.
• Oversight of the HR Philosophy, HR and People Strategy and key HR practices.
• Board Performance Evaluation.
During the year under review, 3 meetings of the Committee were held on 22nd May, 2015, 5th February, 2016 and 23rd March, 2016.
Pursuant to the provisions of the Companies Act, 2013 and Regulation 19 of the SEBI(LODR) Regulations,2015, the Remuneration Policy was formulated and adopted by the NRC/ Board.
The broad objectives of the Policy are :
• to evaluate the performance of the members of the Board and provide necessary report to the Board for further evaluation of the Board;
• to recommend to the Board on Remuneration payable to the Directors, Key Managerial Personnel and Senior Management;
• to provide to Key Managerial Personnel and Senior Management reward linked directly to their effort, performance, dedication and achievement relating to the Corporation's operations; and
• to retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.
(i) Remuneration to Executive Directors :
The remuneration structure of Managing Director comprises of basic salary, special allowance, perquisites and retiral benefits and performance bonus as may be decided by the NRC, subject to the overall limits of remuneration governed by the respective shareholders' approval.
The Corporation has not granted any stock options to its wholetime directors during the year. Mr. Ness Wadia holds 5000 Shares in the Corporation.
Although there has been no increase in the remuneration paid to Mr. Ness Wadia in the FY 2015-2016, in view of inadequacy of profits, the Corporation has applied to the Central Government for approval to the payment of the same remuneration to Mr. Ness Wadia as it is in excess of the limits prescribed by Schedule V of the Companies Act, 2013.
The application has been made as Mr. Ness Wadia holds direct and indirect interest in the capital of the Corporation, although the condition of holding professional qualification is satisfied under the aforesaid Circular.
(ii) Remuneration to Non- Executive Directors:
The Non-Executive Directors do not draw any remuneration from the Corporation other than sitting fees and such commission not exceeding 1% of the net profits of the Corporation as approved by the shareholders and computed in the manner laid down in section 198 of the Companies Act, 2013, as may be determined by the Board from time to time. In view of inadequacy of profits, no commission has been paid to the Non-Executive Directors.
During the year ended 31st March, 2016, the Corporation paid Rs. 1,10,000/- to the law firm M/s. Udwadia & Co. as fees for professional services provided by it from time to time. Mr. D. E. Udwadia is the proprietor of the above concern. The Corporation has received confirmation from M/s. Udwadia & Co. that the professional fees paid during the year ended 31 st March, 2016 to it is less than 10% of the gross turnover of the firm.
Evaluation of Performance of the Board, Its Committees and Individual Directors
Pursuant to the provisions of the Companies Act, 2013 ("Act") and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (as may be applicable), the Board of Directors ("Board") has carried out an annual evaluation of its own performance, and that of its Committees and individual directors.
The performance of the Board and individual directors was evaluated by the Board seeking inputs from all the Directors. The performance of the Committees was evaluated by the Board seeking inputs from the Committee members. The Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual Directors. A separate meeting of Independent Directors was also held to review the performance of non-independent Directors, performance of the Board as a whole and performance of the Chairman of the Corporation, taking into account the views of executive Directors and non-executive Directors. This was followed by a Board meeting that discussed the performance of the Board, its Committees and individual Directors.
The criteria for performance evaluation of the Board included aspects like Board composition and structure, effectiveness of Board processes, information and functioning etc. The criteria for performance evaluation of Committees of the Board included aspects like composition of committees, effectiveness of committee meetings etc. The criteria for performance evaluation of the individual directors included aspects on contribution to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings etc. In addition, the Chairman was also evaluated on the key aspects of his role.
(c) Stakeholders' Relationship Committee:
The composition, powers, role and terms of reference of the Committee are in accordance with the requirements mandated under Section 178 of the Companies Act, 2013 and Regulation 20 of the Listing Regulations, 2015.
The broad terms of reference of the said Committee are as follows:
i) To look into the redressal of grievances such as transfer of security, non-receipt of annual reports, dividends, interest etc. of shareholders of the Corporation;
ii) To approve and monitor transfers, transmission, splitting, consolidation, dematerialisation, rematerialisation of securities issued by the Corporation;
iii) To carry out the functions as envisaged under the Code of Conduct to regulate, monitor and report trading by insiders and code of practices and procedures for fair disclosures of unpublished price sensitive information adopted by the Corporation in terms of Regulations 8(1), 9(1) and 9(2) of SEBI (Prohibition of Insider Trading) Regulations, 2015.
The Stakeholders' Relationship Committee (SRC) comprises of two Independent Directors and 1 Promoter-Executive Director :
• Mr. A. K. Hirjee (Chairman)
• Mr. M. L. Apte
• Mr. Ness Wadia
(d) Corporate Social Responsibility (CSR) Committee:
The CSR Committee's constitution and terms of reference are in compliance with provisions of the Section 135 of the Companies Act, 2013.
The CSR Committee consists of two Independent Directors and one Promoter Non- Executive Director :
Mr. A. K. Hirjee (Chairman) Mr. M. L. Apte Mr. Jeh Wadia
During the year, one meeting of the CSR Committee was held on 23rd March,2016 wherein all the members were present
The broad terms of reference of the CSR Committee include:
(i) formulate and recommend to the Board, a Corporate Social Responsibility (CSR) Policy which shall indicate the activities to be undertaken by the Corporation as specified in Schedule VII;
(ii) recommend the amount of expenditure to be incurred on the activities referred to in clause (i); and
(iii) monitor the CSR Policy of the Corporation from time to time.
(e) Independent Directors' Meeting:
During the year under review, a separate meeting of the Independent Directors was held on March 23, 2016, inter alia, to discuss:
• performance of non- independent Directors and the Board as a whole;
• performance of the Chairman;
• the quality, quantity and timelines of flow of information between the management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
The meeting was attended by all the Independent Directors to enable them discuss matters pertaining to the Corporation's affairs and put forth their combined views to the Board of Directors.
Familiarisation program for Independent Directors
The Board members are provided with necessary documents, reports and internal policies to enable them familiarize themselves with the Corporation's procedures and practices. Detailed presentations on the overall business, division-wise performance, business strategy, risks involved and mitigation measures adopted are made at Board / Audit Committee meetings. Details of the familiarization module are given in the Corporation's website <http://bbtcl.com/> corporate-governance/
5. Other Disclosures:
(a) Related Party Transactions :
The Corporation has formulated a policy on Related Party Transactions and also on dealing with Related Party Transactions. The policy is disclosed on the website of the Corporation <http://bbtcl.com/related-party-transaction-policy/>. All transactions entered into with Related Parties as defined under the Companies Act, 2013 and Regulation 23 of the Listing Regulations,2015 during the financial year were in the ordinary course of business and on an arms' length basis and do not attract the provisions of Section 188 of the Companies Act, 2013. However in compliance with the requirement of the aforesaid Regulation 23, prior approval of the Audit Committee was sought for entering into the Related Party Transactions wherever required.
All transactions with related parties are reported to the Audit Committee periodically. None of the transactions during the year under review was in conflict with the interests of the Corporation. Suitable disclosure as required by AS-18 has been made under Note No. 34 of the Notes to Standalone Financial Statements for the year 2015-16.
(b) Accounting Treatment :
In the preparation of the financial statements, no treatment materially different from that prescribed in Accounting Standards had been followed.
(c) Risk Management:
A detailed review of business risks and the Corporation's plan to mitigate them is presented to the Audit Committee and Board. The Corporation has been taking steps to mitigate foreseeable business risks. Business risk evaluation and management is an ongoing and continuous process within the Corporation and regularly updated to the Audit Committee and Board.
(d) Code of Conduct:
The Corporation has laid down a Code of Conduct for the members of the Board as well as for all employees of the Corporation. The Code has also been posted on the Corporation's website - <http://bbtcl.com/corporate-governance/>
The Managing Director has confirmed and declared that all members of the Board and Senior Management have affirmed compliance with the Code of Conduct.
(e) Details of non-compliance by the Corporation, penalties, and strictures imposed on the Corporation by Stock Exchange or Securities and Exchange Board of India or any statutory authority, on any matter related to capital markets, during the last three years: None.
(f) CEO/ CFO Certification:
Mr. Ness Wadia, Managing Director, and Mr. Amit Chhabra, CFO, have provided the Certificate to the Board in accordance with Regulation 33 of the Listing Regulations, 2015 pertaining to CEO/ CFO certification for the financial year ended 31st March, 2016.
(g) Code for Prevention of Insider Trading:
The Corporation has adopted a Code of Conduct to regulate, monitor and report trading by insiders and code of practices and procedures for fair disclosures of unpublished price sensitive information in terms of Regulations 8(1), 9(1) and 9(2) of SEBI (Prohibition of Insider Trading) Regulations, 2015. The Code has also been posted on the Corporation's website <http://bbtcl.com/corporate-governance/>
All Promoters, Directors, Key Managerial Persons and other Specified persons who could have access to unpublished price sensitive information of the Corporation are governed by this Code.
(h) Disclosures under the Prevention of Sexual Harassment of Women at Workplace( Prevention, Prohibition and Redressal) Act, 2013;
The Corporation has zero tolerance for sexual harassment at workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder for prevention and redressal of complaints of sexual harassment at workplace.
The Corporation has not received any complaint on sexual harassment during the financial year 2015-2016.
(i) Details of compliance with mandatory requirements and discretionary requirements Revelation 27:
The Corporation has complied with all the mandatory requirements of Corporate Governance. As regards the discretionary requirements, the extent of compliance has been stated in this report against each item.
6. Means of Communication:
(i) Quarterly/ Annual results :
The unaudited quarterly and half yearly results are announced within forty-five days from the end of the quarter/half-year and the audited annual results within sixty days from the end of the last quarter as stipulated under the Listing Agreement with the Stock Exchanges and are sent to the Stock Exchanges immediately after these are approved by the Board.
(ii) Publication of Quarterly/Annual results:
The results are sent to the Stock Exchanges immediately on approval by the Board and are published in The Free Press Journal (English) and Navshakti ( Marathi).
(iii) Website where displayed: <http://www.bbtcl.com>
(iv) Whether website also displays official news releases: As and when applicable.
(v) Whether presentations made to institutional investors or to the analysts: No
(vi) Whether Management Discussion and Analysis Report forms part of the Annual Report : Yes
7. General Shareholder Information :
(a) AGM : Date, Time and Venue:
Friday, 5th August, 2016 at 4.00 pm at Rama & Sundri Watumull Auditorium, K.C. College, Dinshaw Wachha Road, Mumbai 400020.
Financial reporting for the quarter ending June, 2016 : By 15th August, 2016
Financial reporting for the quarter ending September, 2016 : By 15th November, 2016
Financial reporting for the quarter ending December, 2016 : By 15th February, 2017
Financial reporting for the year ending 31st March, 2017 : By 30th May, 2017
Annual General Meeting for the year ending 31st March, 2017 : Last week of July/first week of August, 2017
(c) Book closure period: 30th July, 2016 to 5th August, 2016 (both days inclusive).
(d) Dividend payment date: 10th August, 2016.
(e) Listing on Stock Exchanges: The Corporation's Securities are listed at
(1) BSE Limited, Mumbai; and
(2) The National Stock Exchange of India Ltd., Mumbai.
Listing fees as prescribed, have been paid to the aforesaid Stock Exchanges up to March, 2017.
(f) Stock Code:
BSE Ltd. : 501425
National Stock Exchange of India Ltd. : BBTC EQ
(g) Stock Market Data: Please see Annexure 1.
(h) Stock Performance: Please see Annexure 2.
(i) Registrar & Transfer Agents:
The Corporation's agreement with M/s. Sharepro Services(India) Ltd. (Sharepro) to act as Registrar & Transfer Agent ended on 31st March, 2016. In view of SEBI's Order against Sharepro, the Corporation has initiated the process of share audit, the report of which is awaited as at the date of this Report.
Karvy Computershare Pvt. Ltd were appointed as the Registrar and Transfer Agent (R&TA) with effect from 1st April, 2016 to handle the entire share registry work, both physical and electronic. Accordingly, all documents, transfer deeds, demat requests and other communications in relation thereto should be addressed to the R&TA at its following offices:
Karvy Computershare Pvt. Ltd.
Unit: The Bombay Burmah Trading Corporation, Limited
Karvy Selenium Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad - 500 032 Email Id: firstname.lastname@example.org Phone: +91 40 6716 2222; Fax No: +91 40 2342 0814 Website: www.karvycomputershare.com E-mail: email@example.com
(j) Share Transfer System:
Share transfers in physical form are registered within a period of 7 to 15 days from the date of receipt in case documents are complete in all respects. The total number of transfers/ transmissions received and total number of shares transferred/transmitted during the year 1st April, 2015 to 31st March, 2016 were:
(k) Dematerialisation of shares:
The Corporation's shares are available for dematerialization with both the Depositories i.e., National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). 87.80 % of the paid-up capital of the Corporation were held in dematerialized form as on 31st March, 2016.
*Promoter Group includes Mr. Nusli N. Wadia and his relatives in terms of Section 2 (77) of the Companies Act, 2013, Archway Investments Company Limited, Nowrosjee Wadia & Sons Limited, N W Exports Limited, National Peroxide Limited, Naperol Investments Limited, Sunflower Investments & Textiles Pvt. Ltd., Wadia Investments Limited, Go Investment & Trading Pvt. Ltd., Nesville Trading Pvt. Ltd. And Varnilam Investment & Trading Co. Ltd.
(m) Audit of Reconciliation of Share Capital:
As stipulated by SEBI, a qualified Practicing Company Secretary carries out the Audit of Reconciliation of Share Capital to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued and paid up capital. This audit is carried out every quarter and the report there on is submitted to the Stock Exchanges, NSDL and CDSL and is placed before the Board. The audit, inter alia, confirms that the total issued and paid up capital of the Corporation is in agreement with the aggregate of the total number of shares in dematerialized form held with NSDL and CDSL and total number of shares in physical form.
(n) Unpaid Dividend :
In terms of Section 205C of the Companies Act, 1956 read with the Investor Education and Protection Fund (Awareness and Protection of Investor) Rules, 2001, during the year ended 31 March 2016, the Corporation has transferred an amount of Rs.619,891/- being unpaid dividend pertaining to the FY 2007-2008 to the Investor Education and Protection Fund (IEPF).
(o) Plant Locations:
Tea and Coffee Estates 1) Mudis Group of Estates, Mudis P.O., Coimbatore Dist. Tamil Nadu, 642117
2) Singampatti Group of Estates, Manjolai P.O Tirunelveli Dist. Tamil Nadu, 627420
3) Dunsandle Estate, Dunsandle P.O., Ootacamund, Nilgiri Dist., Tamil Nadu 643 005
4) Elk Hill Group of Estates, PO. Box No.12, Sidapur P & T.O., South Coorg, Karnataka 571253
5) Usambara Group, Marvera & Herkulu Estate, P.O. Box 22, Soni, Tanzania
Auto Ancillary Division Plot no. 128-133, IIIrd Cross Street, Nehru Nagar, Kottivakkam, Tiruvanmiyur, Chennai, Tamil Nadu 600041 Dental Products of India Plot No.161-B, Village Danpur, Rudrapur Kashipur Road, Division Paragana-Rudrapur, Tehsil Kichha, Udhamsingh Nagar, Uttarakhand 263153
Weighing Products Division Plot 304, New GIDC, Gundlav, Valsad, Gujarat 396035 Registered Office: 9, Wallace Street, Fort, Mumbai 400001. Email: firstname.lastname@example.org
(p) Green Initiative :
By virtue of Ministry of Corporate Affairs ("MCA") Circular Nos. 17/2011 and 18/2011 dated April 21, 2011 and April 29, 2011 respectively, read with Rule 11 of the Companies ( Accounts) Rules, 2014, service of documents may be made to members through electronic mode.
The Corporation has been sending Annual Reports in the past few years by email to all thosemembers whose email addresses are registered in the member records as maintained by the Registrar and Transfer Agent. Physical copies are also provided to such members on specific request.
We therefore appeal to the members to join the 'Green Initiative' and request the members to register their name for receiving the said documents in electronic mode by sending an email giving their Registered Folio Number and/or DP Id/Client ID to the Registrars, Karvy Computershare Pvt. Ltd. at email id: email@example.com
8. Discretionary Requirements :
1. Chairman's office expenses:
The Corporation reimburses secretarial and travel expenses incurred by the Chairman's office in the performance of his duties on time-spent basis.
2. Shareholder rights:
As the Corporation's quarterly and half yearly results are published in English and regional newspapers having adequate circulation and are also posted on its website, they are not sent separately to the shareholders other than on receipt of specific request from any shareholder in this regard.
3. Qualifications in Financial Statements :
There are no qualifications in the Auditors' Report on the accounts for the year 2015-2016.
4. Report of internal audit:
The Internal Auditors report directly to the Audit Committee.