BBTC AGM experience

AGM of BBTC

BBTC AGM experience

Article published as on Tuesday, 10^th 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.

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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.)