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| AGM of BBTC |
BBTC AGM experience
Article published as on Tuesday, 10th
April, 2020 at 7:48 p.m.
The Annual General Meeting was held on
12th August 2019, 3:45 p.m. at Y.B. Chauhan Auditorium, Nariman Point, Mumbai.
I was first one to reach out at venue
well ahead of time, finally the executives of Karvy (now known
as KFin TECH ) R&TA (Registrar and transfer agent)
arrived, having finished my registration process I climbed up the stairs,
entering the hall.
Subsequently, other shareholders and
participants started coming in and with 60 participants, finally the AGM began.
The Chairperson Mr. Nusli Wadia began
his speech, quoting: Well we don’t have anything to say, everything is already
available in the report, let us proceed to the question and answers.
Observing the body language and tone of
speech I thought how boring!
The board of
Management seamed very dull.
The first Speaker was Ms.Ashalata- an
elderly lady who you will find in almost all AGM's conducted in Mumbai, she
started by reciting her poetry praising the management.
I also got an opportunity to be a
speaker where I gave the suggestion of turning around BBTC by branding it
to Britannia’s Biscuit, Tea and Coffee (BBTC) and start making flavoured coffee and
enter into B2C markets.
Well sadly my suggestion was
ignored. (As I got no response to it till the end)
Some speakers were irritating and
annoying as they merely greeted or spoke few words such as:
'good afternoon, thanks for sending
annual reports on time, I receive them on time every year'
But some of them were insight-full,
like-
A Gentleman asked about what was the
collateral security taken by BBTC against ICD (inter corporate
deposit) given to Go-Air (their group company which is into aviation)
The Management explained that ICD has NO
SECURITY, and they were taking interest arbitrage benefit onto it.
In the end we left with a refreshment
of tea/coffee and with this the AGM was concluded.
The term ICD led
me into thinking into another aspect.
BBTC is listed as a Plantation company
and not as NBFC. So they qualify to avail the loans from Banks under the
category of priority sector lending at lower interest rates than normal Loans.
So they take loans showing themselves
as plantation company on lower rates and give same loan to Go-Air (without
security) at marginally higher rate.
This is a common practice observed in
many Companies and, there is nothing wrong in this, the only Concern is
Promoters are using these Public companies for benefit of their Privately Owned
Companies.
This is not a big corporate governance
issue as everyone knows about it, yet it makes me cautious and
raises a red
flag.
Positives
The Companies setup is a proxy play to
Britannia as it owns 50.70% stake in it. It trades at 75% discount to holding
value of stocks mainly in Britannia and Bombay dyeing.
Management is having experience of many
years into running business.
Wadias, they also do a charity.
Negatives
Very dull management they are surviving
just because of holding of Britannia, maybe.
Successor to Mr.Nusli Wadia is his son
Mr.Ness Wadia, his image as successor worries many (charges of being caught
with drugs in Japan).
Overall to conclude there is not any
serious issue, and by Indian standards 'saab standard hai.' (Everything is
sub-standard)
If you have to choose between the two
choose of investing in Shares of Britannia or BBTC?
I would prefer to Invest in Britannia
(they are more professionally managed than BBTC)
But in current scenario I would
altogether avoid this corporate group of Wadia's for now until we see some
positive changes.
(This is just my experience of
attending AGM, and my understanding through it.)
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