Bombay Burmah Trading Corporation Ltd Management Discussions

PLANTATION BUSINESS: TEA

INDUSTRY STRUCTURE AND DEVELOPMENTS:

The Corporations overall production dropped over the previous financial year by 15%. This was on account of lesser production in April 2024 and third quarter of FY 25 due to the impact of climate change. The shutting down of operations at the Singampatti Tea Estates also contributed to the lower production by approximately 2.25 lakh kgs.

From the 3rd quarter of FY 25 the industry saw a rapid increase in the realisation price of Tea across auction centres, the increase was more than 17% over the last fiscal year, with an overall impact of all categories of tea sales by more than 10% In terms of development, at the Mudis Tea Estate a new furnace was installed which has improved the efficiency of the factory by reducing Green House Gas with renewal source of fuel and improving the product.

SEGMENT-WISE PERFORMANCE: WORLD PRODUCTION

CROP - Mn kgs	CY 2024	CY 2023
India	1,284.78	1,367.70
South India (S. India)	226.8	235.99
North India (N. India)	1,057.98	1,131.71
Kenya	598.48	570.26
Sri Lanka	262.15	256.04
Bangladesh	93.04	102.95

INDIAN EXPORTS

YEAR	N. INDIA		S. INDIA		ALL INDIA
	Value Rs.Cr	Unit Sale Price Rs/kg	Value Rs.Cr	Unit Sale Price Rs/ kg	Value Rs.Cr	Unit Sale Price Rs/kg
CY 2024	4,833.12	312.2	2,278.31	228.15	7,111.43	279.24
CY 2023	4,010.83	291.59	2,042.06	225.99	6,052.89	265.58

Maximum Residue Levels in respect of Pyrrolizidine Alkaloids, continued to be a hindrance for all market players that are exporting teas to European markets, however teas from BBTCL cleared this hurdle and passed all analysis.

Orthodox whole leaf and brokens remained steady due to continued demand from Iraq and Russia though the availability dropped due to the long dry spell in South India.

Lipton Tea Infusions shipments were canceled owing to long delays caused by the issues faced due to Red sea conflict, we were able to realize better pricing and got better returns by diverting these shipments to China.

PRODUCTION: INDIA & SOUTHERN STATES – in Mn kgs

	APR 24 – 25	APR 23 – 24
Tamil Nadu	163.51	174.28
Kerala	57.30	65.09
Karnataka	4.49	5.51
Total S India	225.30	244.88
Total N. India	1069.24	1291.49

BBTC: KEY PERFORMANCE INDICATORS

	Apr 24 – Mar ‘25	Apr 23 – Mar ‘24
Production Own lk kgs	34.81	40.99
Production Bought lk kgs	1.25	1.29
Total Production lk kgs	36.06	42.28
Sales lk kgs	39.98	40.11
Sale Price Rs/kg	160.79	142.92
Tea Sales Rs. cr	64.28	57.32
Exports Rs. cr	11.56	16.83
Exports %	19%	29%

PRODUCTION:

Delayed rains in Q1 and aggressive rain in Q3 impacted the growing conditions and dropped overall made tea production, the Tea Division witnessed a shortfall in its total production by 6.18 lk kgs.

SALES REVENUE:

The Average Sale Price was higher than previous year by Rs. 14.92 Kg, mainly due to an increase in the auction price of 17% over last year.

The average sale price of BBTC teas continued to be around Rs.25.76 per kg higher than the average South Indian prices. The increase in sales price compensated for the loss in production above and the total revenue for FY 2024-25 was higher as compared to FY 2023-24

GLOBAL FORECAST:

The world average selling price of Tea was lower in caparison with Indian prices. The South Indian (SI) Export was severely affected as African Tea prices were lower, almost on par with SI prices, this impacted SI Tea exports. The export figure was 257 million kgs in 2024, which is higher than the previous years, on account of cheaper teas imported from Africa and re-exported. The exports will either fall or stagnate in Europes two largest tea markets, Russia & Turkey which together account for around 6% of total global consumption. The former, on account of the current geopolitical scenario and resultant struggling economy and the latter due to the saturated market and weak economic performance.

According to the Vietnam tea association in 2024, the countrys total tea cultivation area reached 128000 hectares with 230000 tons of dried tea and 185000 tons of finished tea produced.

Despite this, export revenue was only USD 250 million with an average price of USD 1.75 per kilogram far lower than that of major tea exporting nations like India and Sri Lanka.

Tea consumption in India accounts for about 19% of global demand and is expected to rise by 3.8% in 2025.

OPPORTUNITIES:

1) A well-diversified portfolio of various categories of tea, both conventional and organic, which would cater to different markets to realize optimum sale average and reduce dependence on one/two channels of sale.

2) Scope to improve the harvesting cycle by mechanization and deployment of additional man- days.

3) Automation in factories to reduce costs and improve product safety and quality.

THREATS, RISKS AND CONCERNS:

1) Being an agriculture base produce, unpredictable and unseasonal weather leads to an erratic production schedule. Studies also suggest that unusual climatic shifts due to global warming also affect the incidence and population of the various pests and diseases affecting plant productivity and costs. Specifically, the

Tea Mosquito Bug could cause almost a 25% crop loss in a matter of 1-2 months.

2) Ageing work force and unavailability of manpower puts pressure on timely field operations affecting productivity, production and quality.

3) The four-year compulsory wage settlement in respect of plantation workers increases wages between 15% to 25% with no co-relation to existing profitability or productivity improvement.

4) Orthodox production and export subsidies were stopped by the Tea Board, reducing the potential for optimizing returns on this variety of tea and reducing the incentive to export.

OUTLOOK:

MID – LONG TERM STRATEGY:

1) Improving Land Productivity: Integrated nutrient management using conventional and organic inputs to improve soil fertility and plant resistance to pests and diseases.

2) Alternates for conventional fertilizers reducing inputs like Urea and Muriate of Potash and inclusion of bio fertilizers to restore soil health.

3) Greater emphasis on marketing organic teas by direct and frequent interaction with overseas buyers. Visibility of our organic niche product with sustained interaction is required to beat competition.

4) Automation in factories to reduce costs and improve product safety and quality.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY.

The Corporation has a proper and adequate system of internal controls. These controls ensure transactions are authorized, recorded and reported correctly and assets are safeguarded and protected against loss from unauthorized use or disposition. Your Corporation has an extensive program of internal audits and management reviews which supplement the process of internal financial control framework.

Documented policies, guidelines and procedures are in place for effective management of internal financial controls. The internal financial control framework design ensures that financial and other records are reliable for preparing financial and other statements. The Internal auditors also perform an independent check of effectiveness of key controls in identified areas of internal financial control reporting. The Statutory Auditors Report include a report on the internal financial controls over financial reporting. To maintain objectivity and independence, Internal Auditor reports to the Chairperson of Audit Committee of the Board. Internal Auditor monitors and evaluates the efficacy and adequacy of internal control systems in the Corporation, its compliances with the operating systems, accounting procedures and policies at all locations of the Corporation. Based on the report of Internal Auditor, the plantations undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and necessary corrective actions are presented to the Audit Committee.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

The employees in general have stayed with your Corporation and have a long-dedicated service. The management ensures all-round comfort levels to its employees, including the required training at all levels. The co-operation and support of workmen represented by the employees Unions in this regard is praiseworthy. The management has a strong belief that the industrial relations will remain cordial and harmonious in the year ahead.

During the year, Voluntary Retirement Scheme was offered to the employees at Singampatti Tea Estates on account of the closure of operations in lieu of the lease tenure coming to an end.

As on 31st March 2025, total employee strength at the Tea Estates 1571.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Climate change is impacting the production of tea across the globe. The average drop in the South Indian plantations is in the vicinity of less than 8% and resulting in drop in overall production for your Corporations Tea was around 9% for the current financial year. Improvements in harvesting and efficiencies have reduced the total operational expenses, which has resulted in higher sales revenue.

The operating expenses for FY25 are lower than last fiscal year, by 5% with a 12% increase in revenue despite lower crop. The

PBIT improved over the last fiscal year by 33% on account of the closure of Singampatti Tea Estates.

AUTO ELECTRIC COMPONENT BUSINESS (ELECTROMAGS) INTRODUCTION: INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian automotive component industry forms a critical part of the manufacturing sector, contributing over 2.3% to Indias GDP. The segment is closely linked with trends in the automotive OEM sector andisinfluenced by global supply chains, EV adoption, and regulatory shifts.

Key industry developments during FY25:

EV Shift: Accelerated transition towards electrification is influencing demand for next-gen electrical components and motor-control systems.

PLI Scheme: Governments Production Linked Incentive (PLI) schemes are catalyzing localization and investments in technology upgrades.

Export Momentum: Indian auto component exports continued to grow, particularly in the US and Europe, driven by cost competitiveness and quality.

OEM Platform Consolidation: Automotive OEMs are moving towards platform standardization, impacting component complexity and ordering volumes.

OPPORTUNITIES AND THREATS

Opportunities

Rising EV demand leading to higher need for electric actuators, BLDC motor components	EV disruption may reduce volumes for traditional ICE-based components
Growth in Tier-1 exports from India due to cost and quality edge	Volatility in raw material prices (copper, steel, rare-earths)
OEM preference for local sourcing – “Make in India” push	Exchange rate fluctuations impacting margins in import/export
Synergy potential with Wadia Group companies for new product development	OEM price pressures and cost-down demands
Demand for smart sensors and integrated electronics in vehicles	Competition from global and regional players with deeper pockets

SEGMENT-WISE / PRODUCT-WISE PERFORMANCE

Product Segment	Key Customers	FY25 Volume Trend	YoY Growth (%)
Starter Motor Assembly & Holder	Cap Sona BLW Forging Brush	High Growth	70%	Value up the supply chain. FY24vs FY25 14.6 Vs 24.79
FLWI & Float	Brakes India Group, HL Mando Group	Steady	3%	Vehicle demand in market has marginally grown by 3 4%
Switches	Hero Motocorp, TVS Motors	Steady	3%	Demand of Electromags customer remains flat in market
Solenoid Valve, valve	Drain ZF-AG	Declining	-13%	Business drop in drain valve & commerical vehicle segment remains flat in market
Plastic Parts, Slip Rings	Assembled Lucas TVS	High Growth	16%	Focus on additional part of other models. FY24vs FY25 15.7 Vs 18.15
Electronics	TVS Motors	Declining	-15%	OEM has removed from direct plant assembly to aftermarket.

OUTLOOK

The medium-term outlook for EAPL remains positive, supported by:

Strong OEM Order Pipeline: Visibility into new business awards in the passenger vehicle (PV) and electric 2W/3W segments. Technology Transition: Investments in R&D for BLDC motors and intelligent electronic modules are expected to yield high-margin opportunities.

Operational Efficiency: Cost-optimization programs and capacity de-bottlenecking initiated in FY25 will continue delivering margin expansion in FY26.

Growth Outlook FY26 (Indicative)

Metric	FY25 Actual	FY26E (Projected)	Growth %
Revenue (INR Cr)	175	190	9%
EBITDA Margin (%)	6.6%	6.2%	>
Export Share of Revenue (%)	17%	15%	?
Capacity Utilization (%)	92%	92%	>

The company also expects to diversify customer mix, reduce dependence on legacy products, and further engage in the EV ecosystem.

RISKS AND CONCERNS

Key risks facing EAPL and mitigation approaches:

Risk	Potential Impact
OEM Price Reduction Pressure	Margin compression	Cost optimization programs, VA/VE, higher value offerings
Commodity Price Volatility	Increased input cost	Hedging strategies, alternate sourcing, indexed pricing
Technology Obsolescence (ICE vs EV)	Reduced demand for legacy parts	Product diversification into EV- compatible components
Supply Chain Disruptions	Delays in production, higher costs	Multi-sourcing, inventory buffers for critical items
Talent Retention in Key Functions (R&D, Ops)	Impact on innovation and continuity	Career development programs, incentives, culture building

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Electromags (EAPL), a key segment of the automotive components division of BBTCL, maintains a robust system of internal controls designed to ensure the accuracy and reliability of financial reporting, compliance with applicable laws and regulations, efficiency of operations, and safeguarding of assets.

The internal control framework at EAPL is commensurate with the size and complexity of its operations and is aligned with the requirements of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. These controls have been integrated across all functional areas including production, supply chain, finance, HR, sales, and engineering to support the achievement of operational and strategic objectives.

Key features of EAPLs internal control system include:

- Structured Delegation of Authority with defined financial limits.

- Documented Policies and Standard Operating Procedures (SOPs) covering key business processes and updated periodically.

- ERP-based transaction processing to minimize manual interventions and strengthen audit trails.

- Internal Audit conducted by an independent firm of Chartered Accountants reporting directly to the Audit Committee of BBTCL. Focus areas include operational compliance, risk mitigation, and process efficiency.

- Quarterly Risk Review to identify control gaps and initiate timely corrective actions.

- Statutory and Regulatory Compliance Tracking System to monitor adherence to applicable laws across plants and offices.

The internal control systems have been reviewed for their adequacy and effectiveness by both the internal and statutory auditors during the year. Based on their observations and managements assessment, no material weaknesses were identified that could impact the reliability of financial reporting or operational controls.

Management remains committed to continuous improvement of the internal control environment through digitization, automation, and capability building.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

Parameter	FY25	FY24
Headcount	181	187
Industrial Relations	Cordial	Cordial

FINANCIAL AND OPERATIONAL PERFORMANCE DISCUSSION

During the year under review, the automotive industry experienced a mixed operating environment marked by a sustained rise in input costs, tight cost of capital, and evolving customer expectations. Against this backdrop, the division delivered a resilient operational performance, although key financial indicators reflected near-term challenges.

While revenue growth remained largely stable, the financial performance was impacted by external cost pressures, particularly:

Notable fluctuations in raw material and component costs, driven by global commodity price trends and supply-side constraints.

Higher operating expenses, primarily due to inflationary wage adjustments, increased freight and energy costs, and strategic investments in new program ramp-ups.

EBITDA and Profit Before Tax (PBT) were consequently lower than the previous year.

Despite these short-term headwinds, the Company maintained its focus on operational efficiency and customer delivery commitments.

Key mitigation initiatives included:

Re-negotiation of select procurement contracts to mitigate raw material inflation.

• Strategic cost control initiatives across overheads and indirect spends.

• Operational productivity enhancements at plant level through layout optimization and improved manpower planning.

Management is actively implementing a margin restoration plan, including price recovery discussions with OEMs, deepening localization, and introducing automation in high-impact areas. In parallel, the Company continues to invest in long-term capabilities, including EV-ready components and enhanced validation infrastructure to support future program wins.

As the macroeconomic and supply-chain environment stabilizes, these initiatives are expected to support recovery in profitability and strengthen the divisions competitive position within the automotive components sector.

HEALTH CARE BUSINESS

INDUSTRY STRUCTURE AND DEVELOPMENT

The Indian dental industry is evolving into a significant component of the countrys healthcare ecosystem. Characterized by rapid growth, increasing patient awareness, and technological adoption, the sector presents substantial opportunities for investors and stakeholders. With India emerging as a global hub for affordable, high-quality dental care, the market is positioned for sustained growth backed by robust domestic demand and a thriving medical tourism sector. Emphasis is now placed on patient education, early intervention, and routine maintenance to avoid more invasive procedures down the line.

PERFORMANCE HIGHLIGHT:

The Dental division reported ~13.59% growth at a turnover of Rs. 34.75 cr. FY25 in compared to Rs. 30.59 cr. in FY24.

OPPORTUNITIES:

The dental industry is well-positioned for continued expansion across clinical, technological, and consumer-driven domains. Businesses that innovate in accessibility, prevention, digital tools, and patient-centered care are poised to capitalize on these emerging opportunities. Dental companies that focus on affordability, accessibility, and innovation, especially in underserved areas, are well-positioned to lead the next phase of industry development.

THREATS, RISK AND CONCERN:

While Indias dental industry presents significant growth opportunities, it also faces a range of operational and competitive threats, risk and concern that companies must navigate carefully like fragmented and largely unregulated market, low preventive awareness among the general population, limited insurance coverage, high cost of advanced technologies and intense price competition.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

During FY25, the price of silver—one of the key raw materials used in the production of Amalgam—increased by approximately 23% compared to the average price in FY24. Despite this sharp increase in input costs, the dental division were able to maintain the EBITDA margin at a level comparable to the previous year. This was primarily driven by improved realization from customers, achieved through a strategic reduction in product discounting and strong operational execution across the business.

OUTLOOK:

The business outlook for the dental business is optimistic, with strong growth anticipated in the coming years. Backed by increasing demand for quality dental care, preventive treatments, and cosmetic procedures, our Corporation is well-positioned to capitalize on evolving market trends. With a strategic focus on expanding into underserved regions, adopting modern technologies like digital dentistry, and delivering patient-centric services, we are steadily building a strong and trusted brand. Despite challenges such as regulatory complexity and market competition, our commitment to affordability, quality, and innovation continues to drive patient loyalty and operational success. As awareness and access to oral healthcare improve across India, we are confident that our dental business will see sustained growth and increased market presence in the near future.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The corporation has adequate internal control procedures commensurate with its size and nature of business. These business control procedures ensure efficient use and protection of the resources and compliance with the policies, procedures and statutory requirements. The internal control systems provide for well documented guidelines, authorization and approval procedures. The corporation carries out audit through external agencies throughout the year. The prime objective of such audit is to test the adequacy and effectiveness of all internal controls lay down by the management and to suggest improvements.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

The Corporation regards human resources as a valuable asset. The Corporation evaluates performance of all employees on a quarterly basis. Key result areas of all employees have been well defined. The corporation has initiated incentive schemes for all employees to reward exceptional performance. The training needs of all employees are periodically assessed, and training programs are conducted using internal resources and also by engaging external trainers/facilitators.

As on 31st March 2025, total employee strength at the Heath Care Division is 21.

KEY FINANCIAL RATIOS

Ratios	FY 2024-25	FY 2023-24	Change(%)	Reason for change
Debtors Turnover (in times)	4.93	4.83	2.03%	No material change in debtor turnover
Inventory Turnover	2.47	2.14	15.20%	Increase is on account of better turnaround in inventory in industrial divisions
Interest Coverage Ratio	4.77	1.19	300.84%	Reduction in loans and their interest cost
Current Ratio	0.44	0.48	-7.35%	Decrease is on account net current assets and current liabilities in current year
Debt Equity Ratio	1.71	1.81	-5.52%	Decrease is on account of repayment of debts in the current year
Return on Net Worth ratio	63%	-6.01%	-1149.77%	Increase is on account of dividend income received in current year

Operating Profit Before Interest, Depreciation and Tax (%) at Segment level

Ratios	FY 2024-25	FY 2023-24	Change(%)	Reason for change
Tea	-31.14%	-67.04%	115.28%	Decrease in losses due to discontinuation of operations at Singampatti Estates
Healthcare	16.00%	16.36%	-2.30%	No Major variance
Electromags	6.40%	10.36%	-61.85%	Higher operating cost - increased freight and energy cost coupled with inflationary wage adjustments

Cautionary Statement:

Statements in the Management Discussion and Analysis describing the Corporations objectives, projections, estimates and expectations may be ‘forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expected or implied. Important factors that could make a difference to the Corporations operations include economic conditions affecting demand/and overseas markets in which the Corporation operates, changes in the Government regulations, tax laws, vagaries of nature and other incidental factors