Gillanders Arbuthnot & Company Ltd Management Discussions.

Managements Discussion and Analysis Report for the year under review, as stipulated under Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations) is presented in a separate section forming part of the Annual Report. The industry structure, development, performance, opportunities, threats, outlook, risk and concerns, internal control systems and its adequacy, financial performance with respect to operational performance and material developments in human resource and industrial relations have been discussed in the paragraphs to follow.

Textile Division

The textile industry in general and spinning industry in particular has been passing through a huge crisis mainly due to poor demand in both the domestic and international markets. The cotton spinning mills are highly dependent on the export of yarn, which was down by about thirty percent in the year under review, as compared to previous year, resulting in big crisis for the spinning mills. The synthetic spinning mills also faced a crisis as the import of synthetic yarn increased as compared to previous year.

Covid19 came as a big blow to the already struggling industry with unprecedented crisis in both the domestic and international markets, as most of the countries resorted to lockdown. The lockdown has resulted in total disruption to the businesses and destruction of demand across the world.

India has imposed continuous lockdown in the month of April and May with negligible activity in the textile sector. After initial phase of complete lockdown the industry has been allowed to function with substantially reduced capacity which is not sustainable and viable. The industry will have to deal with the totally uncertain environment with regard to government directives and restrictions, unpredictable demand scenario, erratic and uncertain labour availability. The industry is expected to encounter unprecedented challenges in the current year. Your Directors are closely monitoring the situation and will take all necessary steps to minimize the impact.

Tea Division

The Global Tea Production (Excluding China) in the financial year 2019-20 was at par with 2018-19. All India Tea Production during 2019-20 is 1360.10 million kgs compared to 1349.60 million kgs in the previous financial year.

Your Division reported a production of 9.2 million kgs, which is marginally lower than the previous year. Adverse weather condition during the early part of the year and sale of Jutlibari Tea Estate during the last quarter of the financial year have resulted in lower production .Further, rapid spread of Covid 19 pandemic across the world, including India, followed by Lockdowns have impacted the production in the month of March 2020 .

Average Tea Prices at auction centers in North India witnessed a decrease of 3.00 per kg compared to the previous year, primarily due to decrease in price of non quality Tea. Price realization of our Bulk Tea is at par when compared with previous year.

During the year under review, Jutlibari Tea Estate, one of the tea estates of the Company, was sold to Jutlibari Tea and Plantations LLP, Assam in order to reduce the debts and improve the overall profitability of the Company.

During the period under review, the performance of the Export Division is stable. During the current year with an increased price in domestic market, economic slowdown in importing countries and lower price in African teas due to higher production may cause challenges for Indian tea export market. However, your Division is hopeful of maintaining its performance in the coming year.

All seven factories of your Division are certified under ISO 22000-2005 and are also certified under Trustea. Your Division also enjoys RFA certification in its three Tea Estates located in the Golaghat districts.

During the current year, due to Covid19 production of Tea is adversely affected till date, resulting in loss of revenue, increased cost of production, which would adversely impact the profitability of the Division. However, due to lower tea in supply chain, prices have firm up and shall remain buoyant during the year. The Division is continuing its focus on quality and mechanization and expects that the performance to be stable in the current year.

Engineering (MICCO) Division

MICCO (Engineering) Division is engaged mainly in the execution of EPC projects and different job work in the field of structural, mechanical, piping & electrical in different steel plants of India.

During the year under review, steel sector units are under stress due to worldwide low demand and falling price of steel products. During, the year under review, MICCO, having a good track record continued to remain adequately engaged in Tata Kalinganagar, RINL as well as in JSW Dolvi plant.

There has been impact of pandemic on progress of job during the current year resulting in slight increase in cost. However, your Directors are hopeful that with gradual opening up of the economy, demand shall improve and expects that the steel producers will proceed with expansion program albeit at a lower pace, which will help in procuring sufficient orders.Your Directors expect performance of this Division to be stable during the current year.

Property Division

The Division has reported revenue of 919.95 lakhs, which is 11.31% higher compared to previous year. The increase in Revenue was due to induction of new tenants and renewal of tenancy at increased rates. Comprehensive fire safety policy is rigorously implemented with installation of fire safety equipments and conducting of fire safety drills at regular intervals.

Due to Covid19 and slowing down of economic activities, the performance of this Division may be adversely affected. However, continuous efforts would be made to increase occupancy and rationalize cost.

Internal financial control systems and their adequacy

Your Company has adequate Internal Financial Control Systems in all areas of operation. Your Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its businesses, including adherence to the Companys policies, safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures. Internal Audits are conducted by Independent firms of Chartered Accountants and the reports are discussed with the operational heads by the CFO, Managing Director and Executive Director & CEO of the Company, and thereafter, placed before the Meetings of the Audit Committee of the Board of Directors. Representatives of the Statutory Auditors, Cost Auditors and Internal Auditors are also invited at the Meetings of the Audit Committee as and when required. Corrective measures suggested at the Audit Committee Meetings are duly implemented.

The Audit Committee of the Board also reviews the adequacy of Internal Financial Control Systems at regular intervals. No fraud has been reported by the Statutory Auditor, Secretarial Auditor, Cost Auditors or Internal Auditors of the Company.

Human Resources and Industrial Relations

The Company has laid down the process for attracting, retaining and recognizing talent as it acknowledges the importance of good Human Resources. Company has cordial relation with employees and there is mutual respect and admiration for each other. The Directors wish to record their appreciation for the co-operation received from all employees. Industrial relation was good.

Caution Statement

Management Discussion and Analysis Report contains forward-looking statements, which are based on certain assumptions and expectations of future events. The Companys actual results and performance may differ from those projected due to unforeseen circumstances viz., political, economic, pandemic etc., over which the Company does not have any control. The Company assumes no responsibility to publicly amend, modify or revise any such statements on the basis of subsequent developments, information or events. Readers are advised to apply their diligence and independent judgment.


Consolidated financial statements for the financial year ended on 31st March, 2020, prepared as per the provisions of the Companies Act, 2013 (hereinafter referred to as the Act), Rules framed therein and the applicable Accounting Standards are provided in the Annual Report.


Gillanders Holdings (Mauritius) Limited, Mauritius, the Direct Foreign Subsidiary, reported a loss before tax of 52.15 lakhs, against profit of 19.39 lakhs, during the previous year. No significant operational activities have been undertaken by the said Subsidiary during the year under review.

For the financial year ended on 31st March, 2020, Namingomba Tea Estates Limited, Malawi (NTEL), a step down Foreign Subsidiary, has reported a profit before tax of 1,050.38 lakhs, against a reported profit of 1,371.83 lakhs for the previous year.

NTEL is engaged in growing and processing of Tea and Macadamia. NTEL is a material step down subsidiary of the Company, and it has not sold, disposed off or leased any asset of more than 25% of the assets on an aggregate basis during the year under review.

Tea production of NTEL for the year under review was 2.33 million kgs, compared to last years production of 2.53 million kgs.

During the year, Macadamia (N I H) production of NTEL was 2.07 million kgs against last years production of 2.22 million kgs. Further, we have done extension planting of 124.55 Hectares of macadamia and will continue extension plans in coming years.

During the year under review, your Company did not have associate/joint venture. A separate section on the performance and financial position of the Subsidiaries in Form AOC-1 is part of the Annual Report and is annexed to the Report.


The Company is eligible to invite, accept or renew deposits under the provisions of the Act and Rules framed therein.

As on 31st March, 2020 an amount of 3,786.12 lakhs was outstanding as fixed deposit from the public and Shareholders of your Company out of which 1,953.74 lakhs were accepted / renewed during the year.

During the year under review, your Company has accepted / renewed deposits aggregating to 1,953.74 lakhs, which comprise of Fixed Deposit for 459.04 lakhs and Cumulative Deposit for 1,494.70 lakhs.

Matured Fixed Deposits for 18.64 lakhs remained unpaid and unclaimed as on 31st March, 2020, out of which Fixed Deposit for 13.48 lakh has been claimed and were repaid till date. There is no default in repayment of deposits and in payment of interest thereon.

All Fixed Deposits have been accepted in compliance with the requirements of the Companies Act, 2013 and Rules framed therein. No order has been passed by the National Company Law Tribunal/National Company Law Appellate Tribunal for extension of time for repayment nor has any penalty been imposed by the said Authorities.


Mr. Mahesh Sodhani will retire in the ensuing 86th Annual General Meeting, and being eligible, offers himself, for reappointment. The Board of Directors recommends his re-appointment.

The Company has received declarations from all Independent Directors of the Company, that they meet the criteria of Independence and they have complied with the Code for Independent Directors, as prescribed both under the Act and SEBI Listing Regulations, and the Code of Conduct for Directors and Senior Management personnel, formulated by the Company.

The Board of Directors at its Meeting held on 28th May, 2019 had recommended the appointment of Mr. Charudatta Raghvendra Prayag and Mr. Kothaneth Ashok as Independent Directors for consecutive period of 5 (five) years each with effect from 28th May, 2019. Further, the Board of Directors had also recommended the re-appointment of Mr. Naresh Pachisia as an Independent Director of the Company for second term of 5 (five) consecutive years with effect from 9th August, 2019. The aforesaid appointments / re-appointment were approved at the 85th Annual General Meeting held on 9th August, 2019.

The details of programmes for familiarization/training of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters can be accessed on the website of the Company at the link: policy/Familiarization%20Programme%20for%20Independent%20Director.pdf


Your Directors state that:

a) in the preparation of the annual accounts for the financial year ended on 31st March, 2020, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

b) such accounting policies have been selected and applied 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 Company as on 31st March, 2020 and of the loss of the Company for the year ended on that date;

c) the Directors 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 Company and for preventing and detecting fraud and other irregularities;

d) the annual accounts has been prepared on a going concern basis;

e) internal financial controls has been laid down so that the same can be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) proper systems has been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.