Mar 31, 2022
Your Directors have pleasure in presenting their Twenty Eighth Annual Report together with the Audited Accounts for the year ended 31st March, 2022.
Financial Summary Highlights ''in Lakhs |
||
Year ended 31st March 2022 |
Year ended 31st March 2021 |
|
Total Income |
30,328.59 |
32,428.40 |
Profit before finance cost and Depreciation |
4,908.21 |
7,045.08 |
Less : Finance Cost |
998.94 |
1,643.79 |
Profit before Depreciation |
3,909.27 |
5,401.29 |
Less : Depreciation |
1,245.12 |
1,193.32 |
Profit before Exceptional Items |
2,664.15 |
4,207.97 |
Less : Exceptional Item |
- |
112.21 |
Profit before Extraordinary Item and Tax |
2,664.15 |
4,095.76 |
Add: Extraordinary Item |
658.78 |
- |
Profit before Taxation |
3,322.93 |
4,095.76 |
Less : Provision for Current Taxation |
300.00 |
370.00 |
Deferred Taxation Adjustment |
46.66 |
434.61 |
Profit After Taxation |
2,976.27 |
3,291.15 |
Other Comprehensive Income (Net of Tax) |
151.99 |
(217.57) |
Total Comprehensive Income |
3,128.26 |
3,073.58 |
The issued, subscribed and paid up share capital of the Company as on 31st March, 2022 was at '' 733.93 lakhs divided into 3,66,96,475 Equity Shares of '' 2 each. During the year under review, the Company has not issued any shares with differential voting rights, employee stock options and sweat equity shares.
Your Directors at its Meeting held on 22nd March, 2022, proposed the issue of 10,00,000 0.01% Compulsorily Convertible Preference Shares (CCPS) of face value of '' 10 each at an issue price of '' 156 per CCPS including securities premium of '' 146 per CCPS on preferential basis for cash consideration to BMG Enterprises Limited, Holding Company, being part of the Promoters Group, subject to approval of the Members. Accordingly, an Extraordinary General Meeting of the Members of the Company was convened and held on 21st April, 2022, wherein the Members of the Company approved the proposal by Special Resolution. In terms of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, the allotment was due to be made on or before 6th May, 2022. However, due to non-receipt of certain regulatory approvals from the concerned authorities, the allotment could not be made as yet.
Appropriation Of Profit After Tax For Transfer To Reserves
During the Financial Year 2021-2022, an amount of '' 2,500 lakhs was separately transferred to General Reserve in terms of the first proviso to section 123(1) of the Companies Act, 2013 and a sum of '' 628.26 was kept as retained earnings.
Your Directors are pleased to recommend to the Members, for their approval, a Dividend of '' 0.30 per Equity Share of '' 2 each (i.e.15% on the paid up capital) in the Company for the year ended 31st March, 2022.
The State Of Company''s Affairs
The gross revenue of your Company including sale of Tea, Black Pepper, Avionics Equipment as well as Receipt for Technical and Support Services have been marginally less at '' 29,902.80 lakhs from '' 32,228.31 lakhs for the previous financial year 2020-2021.
The Directors'' view with satisfaction the performance of Rossell Tea Division for the financial year 2021-2022. Despite the extreme and adverse weather conditions in Upper Assam, we were able to produce 48.88 lakh kgs own crop and 3.25 lakh kgs from bought leaf. High quality Orthodox and CTC compliant teas were outturned and "Rossell Teaâ is clearly the benchmark for the Industry in both the categories for its customers in the domestic and global markets.
CTC production was maximized as the price realization of this category was much higher than the Orthodox variety.
Both the CTC and Orthodox categories opened firm in the beginning of the year, however the Orthodox prices dropped during the peak period due to sanctions imposed by USA on Iran. The CTC prices were very firm till May and started dropping from July once larger volumes came into the auctions.
The Orthodox market remained subdued due to the sanctions on Iran and also due to the Global trade being impacted owing to the Pandemic. A number of producers shifted to CTC production due to the high CTC prices in the Domestic market. This is the 2nd year running wherein the CTC prices have outstripped the Orthodox prices by a large margin. We too curtailed our Orthodox production and made more CTC at our estates for better Value. Orthodox production was 22.03 lakh kgs as compared to 23.80 lakh kgs (without Bokakhat) in the previous year. CTC production was 29.46 lakh kgs as compared to 26.66 lakh kgs.
Our Orthodox sale averages are '' 249.73 as against '' 275.12 per kg in the previous year and in the CTC category '' 291.70 as against '' 286.63 per kg.
In both the categories of Tea our averages are significantly higher than the Industry averages for Assam estates which are '' 227.83 for Orthodox and '' 219.31 for CTC.
Exports during the year was 6.83 lakh kgs as against 9.48 lakh kgs in the previous year. Exports were lower due to the global trade being affected owing to the Pandemic and also owing to no exports to Iran on account of the sanctions imposed by the US. Exports out of India have been dropping in favor of the African teas as the teas are much cheaper and also due to the logistic location. This is however limited to the medium category as the best quality where our teas fit in continue to be exported to the Continent and beyond.
Our product-mix allowed us to realize the best possible value for our teas. Improved productivities and efficiency, and the higher production allowed us to absorb and obviate the wage cost which was significantly higher.
The Income has decreased from '' 15,804.85 lakhs to '' 14,644.76 lakhs as we have exited 1 estate Bokakhat with effect from 1st April, 2021. Rossell Techsys
In general, the Aerospace and Defense industry has shown signs of recovery from the effects of the pandemic on travel. The Division has actually done reasonably well, given the global challenges and continued to maintain order intake. The Division continued to maintain its high credibility and brand image, even in these challenging times. It is heartening to report that more than 23,000 manufactured parts were delivered in the year, maintaining consistently high standards of quality and delivery.
The Division has continued to receive opportunities in the competition route. Many of these RFP''s indicate diverse interests in Electrical Wiring and Interconnect Systems (EWIS), Complex Consoles, Box builds, Automatic Test Equipment (ATE) and Electrical Panel Assemblies. It has received multiple RFPs from various divisions of Boeing, Lockheed Martin, Honeywell, and BLAGSS. The Division has submitted significantly large size bids in response to multiple RFPs, competing with global companies, with most of these bids, scheduled to reach production starting in 2024 / 2025.
In line with its forward-looking philosophy, the Division continues to look beyond the near term, capitalizing on its strong brand and credibility. It is pursuing organic and inorganic growth, domestically as well as globally, in existing as well as in adjacent competency areas and based on opportunities presented by its customers. It has obtained R&D certification from DSIR and has also initiated certifications for CAR 21 and CAR145, which will enable it to make inroads into product support and aftermarket.
The total revenue for the financial year 2021-2022 stands at '' 153 Crores. On the domestic business front, the Division recorded Rs 5.96 crores sales for the full year. The Division added orders worth '' 166 crores. The domestic business has been executed through EOU during the FY 2021-2022. At the end of FY 2021-2022, cumulative NFE (4th September 2014 to 31st March 2022) stood at '' 262 Crores or 40.49% of cumulative export turnover. Division is consistent in reporting positive NFE, a key performance indicator for an EOU.
The year 2022 has started with conducive growing conditions in Assam resulting in good cropping during the period of January to March 2022 when North India produced 53.58 million Kgs.
Owing to ongoing problem in Sri Lanka, their crop has been lower by 11.79 million kgs for January to March 2022. Kenya is marginally behind by 3 million kgs till end February.
The latest available report indicates that the production in East Africa is overall improving and the cropping is favorable, but there has been a decline in quality which has resulted in the latest auction witnessing selective demand at easier rates, with substantial quantity of 30% of the offerings remaining unsold.
On the other side, owing to the ongoing problem in Sri Lanka and shortage of teas on offer, the average price at Sri Lanka auction has shot up substantially by over '' 100 per kg and as per the latest information available even at the recent auctions held in Colombo, the market was very strong with aggressive buying from most of the importers in spite of the ongoing conflict between Russia and Ukraine. This is perhaps owing to the apprehension of even lower quantity of teas being available in the coming weeks.
In India, with good weather condition at the beginning of the season, the cropping for the period of January to March 2022, Assam Valley crop is at 23.75 million kgs which is 22.42% ahead of last year and the entire North India crop at 53.58 million kgs is ahead by 9.24% over last year. However, owing to the incessant rainfall from the third week of March 2022 till almost end of April 2022, whilst good cropping continued because of conducive weather condition, quality took an overall dip. Available figures received so far indicates that North India would be substantially higher than last year in its cropping by end April, 2022. As the last year had finished on buoyant note for CTC, most producers chose to begin with CTC category, resulting in surplus in availability of CTC Tea, thus lower quantity of Orthodox was produced, resulting in lower arrivals at the auction centers.
The CTC market which had started on a buoyant note initially started declining owing to large availability and lower quality and resulted in very high out-lots at the auctions. The current levels are almost at par with last year.
Taking three major factors into consideration, ongoing conflict between Russia and Ukraine, problem at Sri Lanka and Covid-19 still continues to exist, it seems that the demand at remunerative prices will primarily exist for quality CTC produce with strong support from western Indian major packeteers'' whilst the other categories would continue to follow trends in line with quality. In the Orthodox category, the market across all sections are likely to see an upward trend as the 2nd flush approaches with strong demand from Middle East, Continent, Japan and other buyers.
The latest report indicates that the Sri Lankan crop for the month of April 2022 is lower by 25 % than last year, owing to which the strong demand in the Orthodox category is likely to continue for Assam even after the 2nd flush period. Perhaps we would be witnessing more aggressive buying by Iran, Saudi Arabia and CIS countries. Some buyers for Sri Lankan teas who normally do not operate on Indian teas actively like Turkey, might be compelled to start buying Assam Orthodox.
So to conclude good quality CTC would continue to sell at remunerative prices and anything below good will decline in prices. The Orthodox category will continue to be in strong demand and will command healthy premium for the premium category.
We at Rossell Tea continue to be in touch with all our customers in UK, Germany and the Middle East. We have already been able to generate interest from the Middle East and the UK buyers and have some enquiry in hand from UAE as well. We are happy to state that we have been able to conclude a contract for a significant quantity of our CTC produce from Romai TE with the most reputed buyer, Taylors of Harrogate - UK at an average which is at par with the last year, in spite of declining trend in the CTC market owing to surplus availability and overall lower quality. We are very hopeful that with progress of the season, we would be able to procure more export orders from Germany, UAE, UK, Iran and Saudi Arabia. However, with the huge increase in the ocean freight charges as against last year, which is likely to go up further as oil becomes expensive, the conclusion of the export contracts would depend upon the buyers'' willingness to accept the escalated freight charges and to meet our quotes accordingly. If that does not happen, we would perhaps divert some of our produce, particularly Orthodox for auction sales where buoyancy is expected, owing to the reasons mentioned earlier.
In the CTC segment, we would emphasize on quality produce at our two Estates, Kharikatia and Nagrijuli, and try to procure maximum orders possible from overseas. If that does not happen owing to the reasons mentioned earlier, we would try to get some private contracts with reputed buyers like HUL, Wagh Bakri, etc. to be able to book the price points, in order to avoid volatility in the CTC market trend, that might be witnessed in the coming months, particularly post quality period.
The Indian Tea Industry is faced with a number of issues, some of them are highlighted hereunder.
. Due to the ongoing conflict between Ukraine and Russia, there is a huge supply chain issue and prices of Gas, Oil, Coal, Fertilisers, Chemicals etc. have gone up significantly.
. Imbalance in supply and demand domestically has a direct impact on the Tea prices.
. Climate change and vagaries of nature/extreme weather is effecting the production and Quality.
. Low per capita consumption of Tea.
. Input costs have gone up substantially.
. Increasing production in the STG segment, over supply of average/medium quality of tea.
. Exports dropping in favor of countries like Africa, Nepal, Vietnam etc.
To summarize we see the production being more than the previous year and may be in line with 2019.
CTC prices may not be higher than last year, but the Orthodox prices will be higher than the previous year and in line with the levels in 2019.
Overall, the prices are expected to be higher than last year.
The biggest challenge will be to rein in the escalating costs of Gas, Oil, Coal, Fertilisers, Chemicals and other inputs.
The costs of all inputs particularly fuels, fertilizers have shot up significantly and so also the staff salary. The COP therefore is expected to be higher than last year impacting the profitability adversely which would be offset by the higher crop, prices and improved efficiency.
Rossell Techsys
The Division has recently been declared the winner for providing Electrical Wiring and Interconnect Systems (EWIS) assemblies to the T7-A platform that is expected to be in service for the next 30 years at the least. It is the first digitally designed and manufactured aircraft by Boeing, starting off from a clean sheet. The Division had participated in early stages by a no-cost, no-commitment association to build 6 ship sets for the Engineering and Manufacturing Development (EMD) and Flight Test (FT) platforms for this aircraft. Post this participation, the Division had submitted a bid to supply EWIS parts for this platform for the next 10 years. The Division has been awarded this contract, via a total strategic agreement value in excess of $100M.
The Division has also submitted large size bids to various OEMs. The bids are in excess of $750M for various Boeing commercial aircrafts, Israel Aerospace Industries and Lockheed Martin Platforms. These bids are for EWIS and Electrical Panel Assemblies (EPA) for deliveries over a period of 2024 through 2029. The decision is expected in the next two quarters.
The total confirm purchase contracts are in excess of $50M, and total confirmed strategic agreements in excess of $200M. These contracts are to be executed over the next 5 years.
Change in Nature of Business
During the year, there has been no change in any business and all the Divisions of the Company continue to concentrate on their own business with growth plans in short to medium terms.
As also reported in the previous year, consequent upon the expiry of all related agreements with foreign Original Equipment Manufacturers (OEMs), the Aerotech Services Division of the Company have discontinued its operation and closed down with effect from 1st April, 2021.
Sale and Disposal of Bokakhat Tea Estate
As reported in the previous year, Bokakhat Tea Estate, the smallest Tea Estate of the Company was sold and disposed as a going concern on and from 1st April, 2021. The Profit booked on such sale amounting to '' 658.78 lakhs has been treated as Extraordinary Item and shown accordingly in Profit and Loss Statement.
Thus, the Company is now having 6 (Six) Tea Estates, all located in Assam and on the look out to acquire bigger Tea Estates for the future growth of Rossell Tea Division of the Company.
Upon completion of his first term, the re-appointment of Mr. Krishan Katyal (DIN: 00765487) was made on 21st March, 2022 as an Independent Director of the Company, for a second term of 5 consecutive years with effect from 1st April, 2022, to hold office till 31st March, 2027. The appointment was made by the Board on the recommendation of the Nomination and Remuneration Committee and was approved by the Members of the Company at the Extraordinary General Meeting of the Company held subsequently on 21st April, 2022.
Mr. Ajai Shukla retired from the office of Independent Director of the Company, upon completion of his second term of two consecutive years on 31st March, 2022. Thus, he ceased to be a Director of the Company from 1st April, 2022.
The Board places on record its appreciation for the valuable contribution made to the Company by Mr. Ajai Shukla, during his tenure of as an Independent Director of the Company.
The re-appointment of Mr. H M Gupta (DIN: 00065973) as the Managing Director of the Company designated as Executive Chairman made on 8th February, 2021 by the Board for a further period of 3(three) years commencing from 1st April, 2021 to 31st March, 2024, on the recommendation of the Nomination and Remuneration Committee, was approved by the Members of the Company in the 27th Annual General Meeting held on 9th September, 2021.
The re-appointment of Mr. R M Gupta (DIN: 05259454) as Whole Time Director of the Company made on 8th February, 2021 by the Board for a further period of 3 (three) years commencing from 9th February, 2021 to 8th February, 2024, on recommendation of the Nomination and Remuneration Committee, was approved by the Members of the Company in the 27th Annual General Meeting held on 9th September, 2021.
Mr. N. K. Khurana, being the rotational director of the Company under Section 152 (6) of the Companies Act, 2013 (the Act) retires by rotation and being eligible offers himself for re-appointment.
The detailed composition of the Board of Directors has been provided in the Report on Corporate Governance.
The following persons continued as Key Managerial Personnel of the Company in compliance with the provisions of Section 203 of the Act:
a) Mr. H. M. Gupta -Managing Director - Chief Executive Officer (CEO)
b) Mr. N. K. Khurana - Director (Finance) - Chief Financial Officer-cum- Company Secretary (CFO cum CS)
c) Mr. R. M. Gupta - Whole Time Director
Remuneration and other details of the Key Managerial Personnel for the Financial Year ended 31st March, 2022 are mentioned in Clause 5.3 of the Report on Corporate Governance as well as in the Annual Return of the Company, in the prescribed format, which is available on the website of the Company at https://www.rossellindia.com/investor-information/.
In terms of the provisions of clause (e) of section 134(3) read with Section 178(3) of the Act, the Nomination and Remuneration Committee, while appointing a Director, take into account the following criteria for determining qualifications, positive attributes and independence:
Qualification: Diversity of thought, experience, industry knowledge, skills and age.
Positive Attributes: Apart from the statutory duties and responsibilities, the Directors are expected to demonstrate high standard of ethical behavior, good communication, leadership skills and give impartial judgement.
Independence: A Director is considered Independent if he/she meets the criteria laid down in Section 149(6) of the Act, the Rules framed thereunder and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations).
Board and Committee Meetings
The Board met eight times during the year further details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Act and SEBI Listing Regulations. The details of all Committees of the Board and their Meetings have been given in the Report on Corporate Governance.
Independent Director''s Declaration
The Declarations, required under Section 149(7) of the Act and Regulation 25(8) of SEBI Listing Regulations from all the Independent Directors of the Company confirming that they meet the criteria of independence, were duly received by the Company.
The Company has complied with the Corporate Governance requirements under the Act and as stipulated under Regulations 17 to 27 of the SEBI Listing Regulations read with schedule II thereof. A separate report on Corporate Governance in terms of Regulation 34(3) read with clause C of Schedule V of the SEBI Listing Regulations along with certificate from the Practicing Company Secretary confirming the compliance, is annexed as Annexure-1 and forms part of this Report.
Corporate Social Responsibility
The Company has a Policy on Corporate Social Responsibility (CSR) duly approved by the Board and the same has been hosted on Company''s website at www.rossellindia.com/divisions/. The CSR budget for the Financial Year 2021-2022 was prepared in accordance with the provisions of Section 135 (5) of the Act read with the Company''s CSR Policy. The amount so budgeted was fully spent on or before 31st March, 2022. The Chief Financial Officer of the Company has certified to the Board in this regard in terms of Rule 4(5) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 (as amended). A detailed report on CSR Activities/ Initiatives is enclosed as Annexure-2 which forms part of this Report.
In terms of the relevant provisions of the Act and SEBI Listing Regulations, the Board had carried out an annual evaluation of its own performance and that of its Committees as well as individual Directors.
During the year, the performance evaluation was done at two levels - by the Independent Directors at their separate Meeting as well as by the Board. First, the Independent Directors at their separate Meeting held on 21st March, 2022 reviewed the performance of the Executive Chairman and other Executive Directors with reference to the questionnaire prepared in terms of the Criteria specified by SEBI vide its circular no. SEBI/HO/CFD/CMD/CIR/P/2017/004 dated 5th January, 2017. They also assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board.
Subsequently, the Board at its Meeting held thereafter on the same day reviewed the performance of the Board as a whole, its Committees and individual Independent Directors of the Board as specified by SEBI in its aforesaid circular dated 5th January, 2017.
In compliance with Section 134(3) of the Act, the Annual Return of the Company, in the prescribed format, is available on the website of the Company at https://www.rossellindia.com/investor-information/
Vigil Mechanism/ Whistle Blower Policy
Pursuant to Section 177(9) read with Regulation 22 of the SEBI Listing Regulations, your Company has duly established Vigil Mechanism for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of Company''s code of conducts or ethics policy. Audit Committee of the Board monitors and oversee the vigil mechanism.
The detailed policy related to this vigil mechanism is available in the Company''s website at www.rossellindia.com/divisions/.
The Board of Directors acknowledges the responsibility for ensuring compliance with the provisions of Section 134(3) (c) read with Section 134(5) of the Act and confirm that:
(a) in the preparation of the annual accounts for financial year ended 31st March, 2022, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;
(b) the Directors had selected such accounting policies and applied them 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 for the financial year ended 31st March, 2022 and of the profit of the Company for that period;
(c) the Directors had 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 Directors had prepared the annual accounts for the Financial Year ended 31st March, 2022 on a ''going concern basis'';
(e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
(f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
M/s. Khandelwal Ray & Co., Chartered Accountants, existing Statutory Auditors of the Company appointed in the 23rd Annual General Meeting of the Company held on 4th August, 2017 for a period of 5 years commencing from the financial year 2017-2018, would retire at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment for a second term of 5 consecutive years commencing from the conclusion of ensuing Annual General Meeting of the Company.
The Audit Committee and the Board at their meeting held on 27th May, 2022 has considered and recommended the re-appointment of M/s. Khandelwal Ray & Co. Chartered Accountants, as Statutory Auditors of the Company for a second term of 5 consecutive years commencing from the conclusion of the 28th Annual General Meeting till the conclusion of the 33rd Annual General Meeting.
The report given by the Auditors on the Financial Statement of the Company for the year under review, forms part of this Annual Report. There has been no qualification, reservation or adverse remark or disclaimer given by the Auditors in their report.
The Notes to the Financial Statements are also self-explanatory and do not call for any further comments.
Pursuant to Section 148 of the Act read with Rule 4 of the Companies (Cost Records and Audit) Amendment Rules, 2014, your Company is required to have the audit of its cost accounting records relating to products manufactured by Rossell Tea Division and Rossell Techsys Division. Accordingly, M/s. Shome & Banerjee, Cost Accountants, conducted this audit for the Previous Financial Year ended 31st March, 2021 (Firm Registration No. 000001) and submitted their report to the Central Government on 29th September, 2021.
In terms of Section 148(3) of the Act, read with the Companies (Cost Records and Audit) Rules, 2014, the Board of Directors of the Company has, on the recommendation of the Audit Committee, re-appointed M/s. Shome & Banerjee, Cost Accountants as the Cost Auditor of the Company for the financial year 2022-2023.
Their remuneration is required to be ratified by the Members in the ensuing Annual General Meeting.
In terms of Section 204 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed M/s. A.K. Labh & Co., Practicing Company Secretaries as the Secretarial Auditors of the Company for the financial year 2021-2022. The report of the Secretarial Auditors in Form MR-3 is enclosed as Annexure-3 to this report.
The report confirms that the Company had complied with the statutory provisions listed under Form MR-3 and the Company has also in place the proper Board Processes and Compliance Mechanism. The Report does not contain any qualification, reservation or adverse remark or disclaimer, which requires any further comments or explanations in this report.
|Related Party Transactions
All the related party transactions are entered on arm''s length basis and are in the ordinary course of business, in compliance with the applicable provisions of the Act and SEBI Listing Regulations. There are no significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the Company at Large. All related party transactions are presented to the Audit Committee and the Board, if required for approval. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. Policy on Related party transactions, as approved by the Board is uploaded on the Company''s website at the web link: https://www.rossellindia.com/divisions/.
Necessary disclosure of Related Party Transactions in terms of clause (h) of sub-section (3) of Section 134 of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is given in Form AOC-2 as Annexure-4 to this report.
|Loans, Guarantees or Investments
During the year under review, your Company has not granted any inter-corporate loan, neither provided any Guarantee in connection with any loan to any party nor made any investment in terms of the provisions of Section 186 of the Act, except as stated hereunder.
During the year, the Company made the following further investments:
6,634 Preference Shares of USD 1 each in RV Enterprizes Pte. Ltd., Singapore - '' 5.02 lakhs
292 Equity Shares of No Par value in Rossell Techsys Inc., USA, the Wholly Owned Subsidiary - '' 75.06 lakhs
During the year under review, the Company repaid in full the inter-corporate loan taken from BMG Enterprises Ltd (Holding Company) and BMG Investments Pvt. Ltd. in compliance with the provisions of Section 186 of the Act.
Your Company has formed a Wholly Owned Subsidiary namely Rossell Techsys Inc. in the State of Delaware, USA on 6th August, 2020 for expansion of operation of Rossell Techsys Division of the Company.
The accompanying Note 49 to the Audited Accounts contains detailed financials of the said Subsidiary.
In view of this, Consolidated Financial Statements have also been prepared and forms part of Annual Report of the Company.
Your Company do not have any Joint Venture or Associate Company within the meaning of Section 2(6) of the Act.
|Risk Management Policy
Your Company''s business faces various risks - strategic as well as operational in respect of all its Divisions. The Company has an adequate risk management system, which takes care of identification, assessment and review of risks as well as their mitigation plans put in place by the respective risk owners. The risks which were being addressed by the Company during the year under review included risks relating to market conditions, environmental, information technology etc. The Company has developed and implemented the Risk Management Policy with an objective to provide a more structured framework for proactive management of all risks related to the business of the Company and to make it more certain that growth and earnings targets as well as strategic objectives are met.
The major risks and concerns being faced by various business segments of the Company are discussed in report on Management Discussion and Analysis, forming part of this Report as Annexure-7.
Your Company has constituted Risk Management Committee of the Board in the manner stated under Regulation 21 of SEBI Listing Regulations, as amended vide SEBI notification dated 5th May, 2021. The Risk Management Committee reviews the risk assessment and minimization procedure in the light of the Risk Management Policy of the Company and enables the Board to discharge its responsibility of framing, implementing and monitoring risk management plan of the Company.
In the opinion of the Board, there is no such element of risk which may threaten the present existence of the Company.
Remuneration Policy
The Company follows a policy on Remuneration of Directors and Senior Management Employees. The policy is approved by the Nomination and Remuneration Committee and the Board. Further details on the same have been given in the Report on Corporate Governance.
The required disclosure under Section 197 (12) of the Act read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given as Annexure- 5 to this report.
Your Company treats its "human resourcesâ as one of the most important assets. The Management of the Company lays continuous focus on human resources, who are trained and updated on various issues from time to time to attain the required standards. The correct recruitment practices are in place to attract the best technical manpower to ensure that the Company maintains its competitive position with respect to execution. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis.
As of 31st March 2022, the total number of employees for the Aerospace and Defense business, including contract technical staff and consultants, stands at 489. Out of this pool, members directly contributing to revenue are 289. No efforts have been spared to provide the highest levels of safety, security and hygiene to all staff members during the pandemic and to comply with period directives from the Government of India.
Industrial relations at all the units remain satisfactory, your Company employed 5,485 personnel on its permanent roll as on 31st March, 2022 including that of Rossell Techsys Division shown above.
Details of employee remuneration as required to be provided in terms of the provisions of Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure- 6, forming part of this Report.
The Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Separate Internal Complaint Committees have been set up in for every Divisions of the Company to redress complaints received regarding sexual harassment in respect of each Divisions. However, during the year under review, the Company has not received any complaint of alleged sexual harassment in any of its Divisions.
Awards and Recognition
No new award or recognition was received by any of the Divisions of the Company during the year.
Significant and Material Orders passed by the regulators
There is no significant or material order passed by any Regulators or Courts or Tribunals impacting the going concern status and Company''s operations in future.
Internal Financial Controls
Your Company has adequate Internal Financial Control System at all levels of Management and they are reviewed from time to time. The Internal Audit of Rossell Tea Division of the Company are carried out by firms of Chartered Accountants and the Internal Audit of Rossell Techsys Division is conducted by Mazars Business Advisors Private Limited, an International Audit, Tax and Advisory Company. The Audit Committee of the Board looks into Auditorâs review, which is deliberated upon and corrective action taken, wherever required.
Transfer of Unclaimed Dividend and Shares to Investor Education and Protection Fund (IEPF)
In compliance with the provisions of Section 124 (5) of the Act read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules 2016, a sum of '' 1,86,830 being the dividend lying unclaimed out of the dividend declared by the Company for the Financial Year 2013-2014 were transferred to IEPF on 22nd September, 2021. The details of the said unclaimed dividend transferred is available at the website of the Company at https://www.rossellindia.com/investor-information/.
Similarly, During the period under review 20,810 Equity Shares pertaining to financial year 2013-2014 have been transferred to IEPF Authorities vide Corporate Action dated 1st October, 2021 in compliance with the provisions of Section 124 of the Act and Rule 6 of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 after sending letters to those Shareholders and also making an advertisement in the newspapers in this regard. Details of these shares transferred to IEPF are available on the website of the Company at https://www.rossellindia.com/investor-information/.
Deposits
Your Company has not accepted any deposits from public in terms of provisions contained in Chapter V of the Act, or in terms of corresponding provisions of the Companies Act, 1956.
[Management Discussion and Analysis
A report on the Management Discussion and Analysis concerning all the business segments of the Company is given as Annexure - 7 to this report.
Business Responsibility Report
In compliance with Regulation 34(2)(f) of SEBI Listing Regulations, as amended vide SEBI notification SEBI/LAD-NRO/GN/2021/22 dated 5th May, 2021, ''Business Responsibility Report''(BRR) describing the initiatives taken by the Company from an environmental, social and governance perspective is annexed as Annexure - 8 to this report in the format as specified by the Board from time to time.
[Conservation of energy, technology absorption, foreign exchange earnings and outgo
(a) Conservation of energy
Rossell Tea
(i) |
The steps taken or impact on conservation of energy |
Machinery up-gradation is a regular process at all the Tea factories of Rossell Tea Division, with a view to conserve Fuel, Electrical Energy and other resources. Initiatives undertaken during the financial year 2021-2022 are as follows; |
|
a) |
Installation of new CTC 3-cut CTC machine at Nagrijuli to augment capacity and improve Quality. |
||
b) |
Refurbishing of old Gas Generators and their respective Health Checks, with an idea of load bearing ability and increase of productivity using Natural Gas. |
||
c) |
Improvement in the Electrical system by reduction of high Motor damage, by installing single phase preventers. |
||
d) |
Color Sorters, because of their age, have been spruced with spares change, for improved Sorting of Orthodox teas and higher productivity. |
Conservation of energy, technology absorption, foreign exchange earnings and outgo (contd.) |
||
(i) |
The steps taken or impact on conservation of energy (contd...) |
e) Enhancement in Mechanization of pruning operations- additional pruning machines were provided for improving pruning/work standards and timely completion. f) Auto Power Factor controller installed at Romai for improving power utilization, to get maximum rebate on electricity bills. g) Hydraulic testing of gas supply pipeline was conducted for all Estates receiving Gas. Leaking / worn out valves were replaced to ensuring no loss of Gas. h) Gas burners have been recalibrated to get blue flame which indicates optimum combustion of Gas. i) There has been a substantial saving of HSD used by the Gensets of 53% wherein 1.42 lakh liters was consumed as compared to 3.02 lakh liters in the previous year. |
(ii) |
The steps taken by the Company for utilizing alternate sources of energy |
Study of the possibility of using Solar power at two Estates of Rossell Tea Division continues. |
(iii) |
The capital investment on energy conservation equipment. |
All inter-Estate transfer with new acquisitions is planned with a view towards energy and fund conservation. |
Rossell Techsys |
||
(i) |
The steps taken or impact on conservation of energy |
The Aerospace and Defense Division conducts business with largely a manual assembly process and does not use heavy power consuming machinery. Most of the infrastructure utilizes single phase power. The total contracted power for the facility in Bangalore is about 750KVA. The facility itself, with a total built up space of 225,000 sft is based on an energy efficient design. It reduces the usage of power by enabling maximum use of natural light. The green space uses special plants, tropical plants that do not need use of water and are solely dependent upon natural rain water. The work spaces in the facility are airy and well laid out. The facility has been granted the IGBC - GOLD rating for environment consciousness and sustainable development In the next phase of construction that shall be taken up based on business prospects, the Company has an objective to reach PLATINUM rating by use of renewable sources of energy such as Solar Cells, contracting power through the grid from hydro, solar cell, wind energy sources. |
(ii) |
The steps taken by the Company for utilizing alternate sources of energy |
Not Applicable at present. |
(iii) |
The capital investment on energy conservation equipment. |
Not Applicable at present. |
(b) Technology absorption |
||
Rossell Tea |
||
(i) |
the efforts made towards technology absorption |
Discussion with experts and training programs have been ongoing for innovative ideas of production and knowledge updating. The concerned staff members are also sponsored to attend various seminars and workshops for their improvement in various aspects of functioning of the Tea Estate. |
(ii) |
the benefits derived like product improvement, cost reduction, product development or import substitution |
There has been an overall improvement in product quality and labour productivity, resulting in economy of cost, and improved operational efficiencies. |
(iii) |
in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)- (a) the details of technology imported (b) the year of import; (c) whether the technology been fully absorbed (d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof |
No new import of technology done during this financial year. No technology imported. Not Applicable Not Applicable Not Applicable |
(iv) |
The expenditure incurred on Research and Development |
The Company is a Member of Tea Research Association, Kolkata, which is registered under Sec. 35 (1) (ii) of the Income Tax Act, 1961. A contribution of '' 19.99 lakhs was made during the year towards subscription by the Division. |
Rossell Techsys |
||
(i) |
the efforts made towards technology absorption |
Through close association with its Customers on Build to Print (BTP) activities in EWIS, ESSI and ATE competencies, the Division has gained significant know-how in terms of technology, infrastructure and skill. The Division has added 3D printing facilities, initiated expansion into Fiber Optics, and enhancing the level of skill in engineering tools for EWIS products. |
(ii) |
the benefits derived like product improvement, cost reduction, product development or import substitution |
The Division has now reached a level of maturity that is on par with the more developed world. There is still more to be achieved and this is being executed in a planned way. The objective is to move to Industry 4.0 and hence the Division has embarked on a journey of business excellence that would culminate in the Company having its own operational system, called ROSE - or the Rossell Operating System for Excellence. |
(iii) |
in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)- (a) the details of technology imported (b) the year of import; (c) whether the technology been fully absorbed (d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof |
There is no import of technology, only know-how assimilation took place. Not Applicable Not Applicable Not Applicable Not Applicable |
(iv) |
The expenditure incurred on Research and Development |
The Company is a Member of RTCA, the premier engineering body that drives global standards in Aerospace and Defense. It is also a Member of IPC, the industry body that drives standards in EWIS activity. |
The Expenditure incurred on Research and Development ('' in Lakhs) 2021- 2022 For In house R&D: Capital Expenditure 375.47 Recurring Expenditure 95.30 Total In house R&D Expenditure 470.77 R&D Expenditure as % on Turnover 3% |
(c) Foreign exchange earnings and Outgo
During the year, the total foreign exchange used was '' 680.35 lakhs on account of various expenses and '' 7,905.41 lakhs for imports of raw materials, stores as well as capital goods. The total foreign exchange earned was '' 16,976.11 lakhs.
|Material Changes and Commitments
You Directors confirm that there are no material changes and commitments, affecting the financial position of the Company which has occurred between the end of the financial year of the Company and the date of this report.
|Application/Proceeding pending under the Insolvency and Bankruptcy Code, 2016
Your Company has neither made any application nor is any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the financial year 2021-2022.
Your Company has not made any one-time settlement against loans taken from the Banks or Financial Institutions during the financial year 2021-2022.
Your Directors place on record their appreciation for employees at all levels, who continue to contribute towards the growth and performance of your Company.
Your Directors also thank the business associates, financing banks, shareholders and other stakeholders of the Company for their continued support.
For and on behalf of the Board Rossell India Limited H.M. Gupta
Place : Delhi Executive Chairman
Date : 27th May, 2022 DIN : 00065973
Mar 31, 2018
Report of the Board of Directors
for the year ended 31st March, 2018
Dear Members,
The Directors have pleasure in presenting their Twenty Fourth Annual Report together with the Audited Accounts for the year ended 31st March, 2018.
FINANCIAL SUMMARY HIGHLIGHTS
Rs, in Lakhs
Particulars |
Year ended 31st March 2018 |
Year ended 31st March 2017 |
Profit before finance cost and Depreciation |
1,524.24 |
680.43 |
Less : Finance Cost |
718.40 |
589.50 |
Profit before Depreciation |
805.84 |
90.93 |
Less : Depreciation |
967.08 |
880.64 |
Profit (Loss) before Exceptional Items |
(161.24) |
(789.71) |
Exceptional Items |
- |
- |
Profit before Taxation |
(161.24) |
(789.71) |
Less : Provision for current Taxation |
35.00 |
- |
Deferred Taxation adjustment |
(220.46) |
(658.93) |
Profit (Loss) After Taxation |
24.22 |
(130.78) |
Other Comprehensive Income (Net of Tax) |
(28.95) |
(336.95) |
Total Comprehensive Income |
(4.73) |
(467.73) |
Your Company has adopted "Ind AS" with effect from 1st April 2017 in the current Financial Year with transition date as at 1st April,
2016. Financial statements for the year ended 31st March, 2017 have been re-stated to conform to Ind AS. Note 47 to the Financial Statement provides further explanation on the transition to Ind AS.
SHARE CAPITAL
During the year under review:
a. No Equity shares have been issued with differential voting rights. Hence, no disclosure is required in terms of Rule 4 (4) of Companies (Share Capital and Debentures) Rules, 2014.
b. No issue of Sweat Equity Share has been made. Hence, no disclosure is required in terms of Rule 8 (13) of Companies (Share Capital and Debentures) Rules, 2014.
c. There was no issue of Employee Stock Option. Hence, no disclosure is required in terms of Rule 12 (9) of Companies (Share Capital and Debentures) Rules, 2014.
d. There was no provision made by the Company for any money for purchase of its own shares by employees or by trustees for the benefit of employees. Hence, no disclosure is required in terms of Rule 16 (4) of Companies (Share Capital and Debentures) Rules, 2014.
e. The issued, subscribed and paid up share capital of the Company as on 1st April, 2017 at Rs, 733.93 lakhs divided into 3,66,96,475 Equity Shares of Rs, 2 each remained unchanged as on 31st March, 2018.
APPROPRIATION OF PROFIT AFTER TAX FOR TRANSFER TO RESERVES
As per Audited Accounts of the Company, profit after tax is not significant. In view of this, no amount is available for appropriation during the Financial Year 2017-2018 for transfer to General Reserve forming part of Other Equity.
DIVIDEND
Keeping the financial performance of the Company in view, your Directors do not recommend any Dividend, for the Financial Year 2017-2018.
THE STATE OF COMPANY''S AFFAIRS REVENUE
The gross revenue from operations of your Company including sale of Tea, avionics equipment, food and beverage as well as receipts from technical and support services and sale of food and beverages by Kebab Xpress has increased to Rs, 19,852.39 lakhs for the year under review as against Rs, 16,324.96 lakhs in the previous year.
PERFORMANCE Rossell Tea
Yours Directors feel that the performance of Rossell Tea Division for the financial year 2017-2018 was satisfactory. The Division continued to reinforce its USP of being a quality producer of tea throughout the year in spite of inclement weather in Upper Assam, where four Group Tea Estates are situated. The Division once again produced high quality Orthodox teas, for which ''Rossell Tea'' is the benchmark in the industry, and also amongst the top in the CTC category with ''Kharikatia'' mark.
Tea production during the financial year was 53.25 lakh Kgs which was 8% higher than the previous year''s production of 49.43 lakh Kgs. This is the highest crop produced by the Division in the last 4 years.
The beginning of the year saw good opening levels for both CTC and Orthodox teas. Good quality CTC prices ruled firm through the year and taking advantage of this, the Company produced 25.97 lakh Kgs CTC teas against 18.76 lakh Kgs in the previous year. The Orthodox market was a bit subdued during the year owing to excess production. Thus, Orthodox averages for the year at Rs, 229.21 per Kg. is lower than that of the previous year at Rs, 235.40 per Kg., however that of CTC is significantly higher at Rs, 208.03 per Kg. as compared to Rs 187.00 per kg. in the previous year.
In both the categories, Orthodox and CTC, the Division''s averages are significantly higher than the Industry averages, which are, Orthodox at Rs, 210.96 per Kg. and CTC at Rs, 149.90 per Kg.
On the export front, the Company exported 9.40 lakh kilograms this year as against 8.90 lakh kilograms in the previous year. The export offerings were effected owing to the poor and inclement weather conditions in the Upper Assam region
Our product-mix allowed us to realize the best possible value for our teas. Improved productivities and efficiency, higher crop and stricter controls kept the costs under check and have helped in much better margins this year. The turnover has increased from Rs, 10,886.94 lakhs in the previous financial year to Rs, 11,515.00 lakhs in the current financial year.
Aviation Products and Services
Aerotech Services Division has four contracts for providing post sales technical support for Original Equipment Manufacturers (OEMs) equipment fitted on various Indian platforms of the three services viz Indian Air Force, Indian Army, Indian Navy and Hindustan Aeronautics Ltd. The Division is also now working with Larsen & Toubro, TATA and Mahindra on new projects which would lead to additional business in the future. The Field Service Engineers continue to enhance the skills and knowledge in the task assigned to the Division.
The Rossell Techsys Division continues its focus on export oriented business opportunities, in the aerospace and defense domain, with target global Original Equipment Manufacturers (OEMs) and has successfully added on a new customer, Lockheed Martin, with exciting future prospects. The emphasis on local domestic business continues to be minimal at the moment and confined to opportunities that provide skill development for anticipated future export business. All business obtained by the Division is on the basis of a highly price sensitive global competition basis.
The Division successfully maintains its certifications, such as AS 9100, ISO 9001, ISO 14001, ISO 27 0 01, and the BS 18001. During the year, it acquired the distinction of being the first Aerospace and Defense Company in India to achieve full compliance to the ISO 31000 standards for risk mitigation and management. The Division is also accredited by CEMILAC, India''s only military airworthiness certification body.
Rossell Hospitality
During the year under review, Kebab Xpress started a Delivery point from its Base kitchen in Okhla and de-commissioned one store owing to low footfalls at the mall. The revenue jumped by approx. 12% over that of the previous financial year. All Energies are currently engaged towards building the delivery side of business, which is looking promising.
PROSPECTS
Rossell Tea
Major producers, Sri Lanka and Kenya have had a good start to their 2018 season. Till March, 2018 Sri Lanka crop is 8 million kgs more than the previous year and Kenya up to February is 13 million kgs ahead with good cropping continuing thereafter as well.
In India too, the crop to March-end is ahead by 3 million kgs and it is expected that the April crop will add to it. Our estates too have recorded a good harvest in April.
This year we expect Quality CTC teas to command a premium. As regards the Orthodox teas which are predominantly exported, it is too early to predict and many external factors could influence the price.
USA pulling out of the Iran Nuclear Deal and also imposing sanctions on Iran may have a detrimental effect on the exports to Iran. We are, however, hopeful that the Indian Government shall have a payment in Rupee terms as was done earlier. Exports are a critical area of performance for the Company and we are looking to export to new geographies and buyers, and thereby increase the basket. The Government has also enhanced the incentive to export by 2% from November, 2017 under the MEIS scheme.
The weakening of the Rupee against the western currencies should help enhancing our export earnings. In the financial year 20182019, we are confident that the exports will increase significantly over that in earlier years.
From the arrivals in the Auction Centers, it is again seen that the volumes of the Orthodox variety have increased for the fourth year running.
The minimum wages being discussed not only by the Government of Assam but by the Central Government as well can definitely have an impact on all industries including the Tea industry.
Aviation Products and Services
Aerotech Services has signed a new contract for three years w.e.f 1st April, 18. This would help increase our revenue. SAFRAN has involved the Division in providing demonstration of a new equipment to the private sector firms. On acceptance of this equipment, we are likely to get new contracts for support services.
Rossell Techsys Division maintains a healthy open order book with the order of $42 Million to be executed over the next 4 to 5 years. The total strategic agreements signed by the Division are of the order of close to $120M to be executed over the next 4 to 5 years. These strategic agreements translate to a potential of enhanced business of approximately another $40M to $50M over the next
4 to 5 years. As much of the strategic agreements are linked to the US government spend, actual realization is dependent on the socio-politico-economic situation of the US. Therefore, this may be viewed with necessary caution.
The Division has performed exceedingly well this financial year and has reported income from operations of Rs, 5,793.97 lakhs for the year as against Rs, 2,282.51 lakhs in the previous financial year. This has been the best financial year since the inception of the Division.
Rossell Hospitality
The emergence of digital technologies is changing the opportunity landscape for the food industry. Digital solutions are being used by businesses and brands to connect with consumers. Online ordering with integrated payment options provides a completely new dimension to consumer experience. The ground work done by in-house team and external agency during the Q1 and Q2 clearly indicate business buoyancy towards the digital side and the stage-wise implementation of all findings were plugged during the latter two quarters which has resulted in growth of revenues by over 19% and reduction in losses by 54%. The Division focused to capitalize on the dynamic change in the market place.
CHANGE IN NATURE OF BUSINESS, IF ANY
There has been no change in any business and all the Divisions of the Company continue to concentrate on their own business with growth plans in short to medium terms.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The following persons continued as Key Managerial Personnel of the Company in compliance with the provisions of Section 203 of the Companies Act, 2013 :
a) Mr. H. M. Gupta -Managing Director - Chief Executive Officer (CEO)
b) Mr. N. K. Khurana - Director (Finance) - Chief Financial Officer-cum- Company Secretary (CFO cum CS)
The Board at its Meeting held on 9th February 2018, has elevated Mr. R. M. Gupta (DIN - 05259454) to the Board by appointing him as Whole Time Director of the Company upon the recommendation of Nomination and Remuneration Committee as well as the Audit Committee of the Board for a period of 3 (Three) years commencing from 9th February 2018 till 8th February, 2021, subject to the approval of the Members in the 24th Annual General Meeting.
Accordingly, appointment of Mr. R. M. Gupta as Whole Time Director have been included as Special Business in the Notice calling the 24th Annual General Meeting of the Company.
Remuneration and other details of the Key Managerial Personnel for the Financial Year ended 31st March, 2018 are mentioned in the Extracts of the Annual Return in Form MGT-9 which is enclosed as Annexure - 3 and forms part of this Report.
INDEPENDENT DIRECTOR''S DECLARATION
The Declarations required under Section 149(7) of the Companies Act, 2013 from the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013, was duly received by the Company.
CORPORATE GOVERNANCE
The Company has complied with the Corporate Governance requirements under the Companies Act, 2013 and as stipulated under Regulations 17 to 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations) read with schedule II thereof. A separate report on Corporate Governance in terms of Regulation 34(3) read with clause C of Schedule V of the SEBI Listing Regulations along with certificate from the Practicing Company Secretary confirming the compliance, is annexed as Annexure-1 and forms part of this Report.
DETAILS OF BOARD MEETINGS
The Board of Directors met 5 (Five) times during the financial year 2017-2018 on various dates as given here-in-below:
Sl No. |
Date of the meeting |
No. of Directors attended the meeting |
1. |
25th May, 2017 |
6 |
2. |
4th August, 2017 |
6 |
3. |
7th November, 2017 |
6 |
4. |
9th February, 2018 |
6 |
5. |
27th March, 2018 |
7 |
Further details on Board of Directors are provided in the attached Corporate Governance Report. COMMITTEES OF THE BOARD a. Audit Committee
The Board has constituted the Audit Committee, which comprises of the following Directors :
Sl. No. |
Name |
Category of Director |
Chairman/ Members |
1. |
Dr. S.S. Baijal |
Non-Executive-Independent |
Chairman |
2. |
Mr. H. M. Parekh |
Non-Executive-Independent |
Member |
3. |
Mr. V. P. Agarwal |
Non-Executive-Independent |
Member |
4. |
Ms. Nayantara Palchoudhuri |
Non-Executive Independent |
Member |
During the year under review, the Board accepted all the recommendations made by the Audit Committee.
Further details of Audit Committee related to dates of Meeting held during the year, attendance of Directors etc. are given separately in the attached Corporate Governance Report.
b. Nomination and Remuneration Committee
The Nomination and Remuneration Committee of the Board has been constituted by the following Directors:
Sl. No. |
Name |
Category of Director |
Chairman/ Members |
1. |
Mr. H. M. Parekh |
Non-Executive-Independent |
Chairman |
2. |
Dr. S.S. Baijal |
Non-Executive-Independent |
Member |
3. |
Mr. V. P Agarwal |
Non-Executive-Independent |
Member |
Further details of Nomination and Remuneration Committee related to dates of Meeting held during the year, attendance of Directors etc. are given separately in the attached Corporate Governance Report.
c. Corporate Social Responsibility Committee
The Corporate Social Responsibility Committee of the Board has been constituted by the following Directors:
Sl. No. |
Name |
Chairman/ Members |
1. |
Dr. S.S. Baijal |
Chairman |
2. |
Mr. V. P Agarwal |
Member |
3. |
Mr. N. K. Khurana |
Member |
Further details of Corporate Social Responsibility Committee related to dates of Meeting held during the year, attendance of Directors etc. are given separately in the attached Corporate Governance Report.
The Committee had framed the CSR policy and the same was approved by the Board at its Meeting held on 6th August, 2014. The CSR Policy is available on Company''s website at www.rossellindia.com. The CSR budget for the financial year 2017-2018 was prepared in accordance with the provisions of Section 135 (5) of the Companies Act, 2013 read with the Company''s CSR Policy. The amount so budgeted was fully spent on or before 31st March, 2018, the detailed report on CSR Activities/ Initiatives is enclosed as Annexure-2 which forms part of this Report. d. Stakeholders'' Relationship Committee
The Stakeholders Relationship Committee of the Board has been constituted by the following Directors:
Sl. No. |
Name |
Chairman/ Members |
1. |
Mr. H. M. Parekh |
Chairman |
2. |
Mr. V. P Agarwal |
Member |
3. |
Mr. N. K. Khurana |
Member |
Further details of Stakeholders Relationship Committee related to dates of Meeting held during the year, attendance of Directors etc. are given separately in the attached Corporate Governance Report.
e. Risk Management Committee
Your Board has voluntarily constituted the Risk Management Committee in the manner prescribed in Regulation 21 of the SEBI Listing Regulations consisting of the following Directors:
Sl. No. |
Name |
Chairman/ Members |
1. |
Mr. H. M. Parekh |
Chairman |
2. |
Ms. Nayantara Palchoudhuri |
Member |
3. |
Mr. N. K. Khurana |
Member |
Further details of Risk Management Committee related to dates of Meeting held during the year, attendance of Directors etc. are given separately in the attached Corporate Governance Report.
ANNUAL PERFORMANCE EVALUATION
In terms of the relevant provisions of the Companies Act 2013 and SEBI Listing Regulations, the Board had carried out an annual evaluation of its own performance and that of its Committees as well as individual Directors.
A structured questionnaire as prepared in terms of the criteria specified by SEBI vide its circular no. SEBI/HO/CFD/CMD/ CIR/P/2017/004 dated 5th January, 2017 and approved by the Nomination and Remuneration Committee of the Board, were circulated to all the Directors to obtain their valuable feedback. After taking into consideration different views expressed by the Directors, covering various aspects of the Board''s functioning such as adequacy of the Board''s composition and structure, Board''s culture, execution and performance of specific duties, obligations and governance, effectiveness of Board processes etc., the evaluation of the Board were conducted.
During the year, the performance evaluation was done at two levels - by the Board as well as by the Independent Directors at their separate Meeting. First, the Board, at their Meeting held on 9th February, 2018 reviewed the performance of the Board as a whole, its Committees and the individual Directors with reference to the aforesaid questionnaire.
Similarly, the Independent Directors at their separate Meetings held thereafter on the same day reviewed the performance of the Executive Chairman of the Board and other Non-Independent Directors as specified by SEBI in its aforesaid circular dated 5th January, 2017. They also assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board.
EXTRACT OF ANNUAL RETURN
Pursuant to section 92(3) of the Companies Act, 2013 (''the Act'') read with rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of Annual Return is given as Annexure- 3.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
Pursuant to Section 177(9) read with Regulation 22 of the SEBI Listing Regulations, your Company has duly established Vigil Mechanism for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of company''s code of conducts or ethics policy. Audit Committee of the Board monitors and oversee the vigil mechanism.
The detailed policy related to this vigil mechanism is available in the Company''s website at www.rossellindia.com.
DIRECTORS'' RESPONSIBILITY STATEMENT
The Board of Directors acknowledges the responsibility for ensuring compliance with the provisions of Section 134(3) (c) read with Section 134(5) of the Companies Act, 2013 and confirm that :
(a) in the preparation of the annual accounts for financial year ended 31st March, 2018, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;
(b) the Directors had selected such accounting policies and applied them 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 for the financial year ended 31st March, 2018, and of the profit and loss of the Company for that period;
(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors had prepared the annual accounts on a going concern basis;
(e) the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
(f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
AUDITORS, THEIR REPORT AND NOTES TO FINANCIAL STATEMENTS
M/s. Khandelwal Ray & Co. Chartered Accountants, Kolkata (Firm Regn. No. 302035E), were appointed as the Auditors of your Company at the 23rd Annual General Meeting, held on 4th August, 2017 for a term of five consecutive Financial Years pursuant to Section 139 of the Companies Act, 2013 read with Rule 6 of the Companies (Audit and Auditors) Rules, 2014.
The report given by the Auditors on the Financial Statement of the Company for the year under review, forms part of this Annual Report. There has been no qualification, reservation or adverse remark or disclaimer given by the Auditors in their report.
The Notes to the Financial Statements are also self-explanatory and do not call for any further comments.
COST AUDIT
Pursuant to Section 148 of the Companies Act, 2013 read with Rule 4 of the Companies (Cost Records and Audit) Amendment Rules, 2014, your Company is required to have the audit of its cost accounting records relating to products manufactured by Rossell Tea Division and Rossell Techsys Division. M/s. Shome & Banerjee, Cost Accountants, conducted this audit for the Previous Financial Year ended 31st March, 2017 and submitted their report to the Central Government on 1st September, 2017.
In terms of Section 148(3) of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the Board of Directors of the Company has, on the recommendation of the Audit Committee, re-appointed M/s. Shome & Banerjee, Cost Accountants as the Cost Auditor of the Company for the Financial Year 2018-2019.
Their remuneration is required to be ratified by the Members in the ensuing Annual General Meeting.
SECRETARIAL AUDIT
In terms of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed M/s. A.K. Labh & Co., Practicing Company Secretaries as the Secretarial Auditors of the Company for the Financial Year 2017-2018. The report of the Secretarial Auditors in Form MR-3 is enclosed as Annexure-4 to this report.
The report confirms that the Company had complied with the statutory provisions listed under Form MR-3 and the Company also has proper Board Processes and Compliance Mechanism. The Report does not contain any qualification, reservation or adverse remark or disclaimer, which requires any further comments or explanations in this report.
RELATED PARTY TRANSACTIONS
All the related party transactions are entered on arm''s length basis and are in the ordinary course of business, in compliance with the applicable provisions of the Companies Act, 2013 and SEBI Listing Regulations. There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the Company at large. All related party transactions are presented to the Audit Committee and the Board, if required for approval. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. Policy on Related party transactions, as approved by the Board is uploaded on the Company''s website at the weblink:http://www. rossellindia.com/financialresult/Policy%20on%20Related%20Party%20Transactions.pdf
Necessary disclosure of Related Party Transactions in terms of clause (h) of sub-section (3) of Section 134 of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is given in Form AOC-2 as Annexure-5 to this report.
LOANS, GUARANTEES OR INVESTMENTS
During the year under review, your Company has not granted any inter-corporate loan, neither provided any Guarantee in connection with any loan to any party, nor made any investment in terms of the provisions of Section 186 of the Companies Act, 2013. However, during the year under review, your Company has taken inter-corporate loan from BMG Investments Pvt. Ltd. in compliance with the provisions of Section 186 of the Companies Act, 2013, outstanding amount as on 31st March, 2018 being '' 310 lakhs. Particulars of existing Investments made by the Company, as required to be disclosed in terms of Section 134 (1) (g) of the Companies Act, 2013 is given in the accompanying financial statement (Note Nos. 5 and 6).
STATEMENTS OF SUBSIDIARIES / JOINT VENTURES
The wholly owned subsidiary, CAE Rossell India Limited, did not carry out any activity during the year under review. Your Company has a Joint venture entity named RV Enterprises Pte. Ltd., Singapore in which the Equity holding is 26%.
Accompanying Consolidated Financial Statement contains details financials of the Subsidiary / Associate Company (Joint Venture).
RISK MANAGEMENT POLICY
Your Company''s business faces various risks - strategic as well as operational in respect of all its Divisions. The Company has an adequate risk management system, which takes care of identification, assessment and review of risks as well as their mitigation plans put in place by the respective risk owners. The risks which were being addressed by the Company during the year under review included risks relating to market conditions, environmental, information technology etc. The Company has developed and implemented the Risk Management Policy with an objective to provide a more structured framework for proactive management of all risks related to the business of the Company and to make it more certain that growth and earnings targets as well as strategic objectives are met.
The major risks and concerns being faced by various business segments of the Company are discussed in report on Management Discussion and Analysis, forming part of this Report.
Your Company has constituted Risk Management Committee of the Board in the manner stated in Regulation 21 of the SEBI Listing Regulations, 2015. The Risk Management Committee reviews the risk assessment and minimization procedure in the light of the Risk Management Policy of the Company.
In the opinion of the Board, there is no such element of risk which may threaten the present existence of the Company. REMUNERATION POLICY
The Company follows a policy on Remuneration of Directors and Senior Management Employees. The policy is approved by the Nomination and Remuneration Committee and the Board. Further details on the same have been given in the Report on Corporate Governance, which forms part of this report.
The required disclosure under Section 197 (12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given as Annexure- 6 to this report.
HUMAN RESOURCES
Your Company treats its "human resources" as one of the most important assets. The Management of the Company lays continuous focus on human resources, who are trained and updated on various issues from time to time to attain the required standards. The correct recruitment practices are in place to attract the best technical manpower to ensure that the Company maintains its competitive position with respect to execution. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis.
Industrial relations at all the units remain satisfactory, your Company employed 6,333 personnel on its role as on 31st March, 2018.
Details of employee remuneration as required to be provided in terms of the provisions of Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure- 7, forming part of this Report.
The total remuneration drawn by the Managing Director and Key Managerial Personnel forms part of Extracts from the Annual Return in Form MGT-9. Mr. H. M. Gupta, Executive Chairman in his capacity as the Chairman and Managing Director of BMG Enterprises Ltd., the Holding Company drew a remuneration of '' 6.00 lakhs as consolidated salary pursuant to Section 197 (14) of the Companies Act, 2013.
PREVENTION OF SEXUAL HARASSMENT
The Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Separate Internal Complaint Committees have been set up in for every Divisions/ Tea Estates of the Company to redress complaints received regarding sexual harassment in respect ofeach Divisions/ Tea Estates. However, during the year under review, the Company has not received any complaint of alleged sexual harassment from any of its Divisions/ Tea Estates.
AWARDS AND RECOGNITION
Rossell Techsys Division has been nominated for the "Boeing supplier of the year" for the fourth time running but missed out on receiving the award due to intense global competition. However, it more than made up for this miss by winning another prestigious award in the Aerospace and Defense global industry by winning the "supplier excellence award" from the American Helicopter Society. The Division has the distinction of being the first Indian company to win this prestigious award. This award has been received very recently by Mr. Rishab Mohan Gupta, Whole Time Director of the Company and Mr. Prabhat Kumar Bhagvandas, Chief Executive Officer of the Division on the 16th May 2018, at a ceremony held at Phoenix, USA.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
There is no significant or material order passed by any Regulators or Courts or Tribunals impacting the going concern status and Company''s operations in future.
INTERNAL FINANCIAL CONTROLS
Your Company has adequate Internal Financial Control System at all levels of Management and they are reviewed from time to time. The Internal Audit is carried out in house as well as by firms of Chartered Accountants for all the Divisions of the Company. The Audit Committee of the Board looks into Auditorâs review, which is deliberated upon and corrective action taken, where ever required.
TRANSFER OF UNCLAIMED DIVIDEND AND SHARES TO INVESTOR EDUCATION AND PROTECTION FUND
In compliance with the provisions of Section 124 (5) of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, a sum of '' 81,097 being the dividend lying unclaimed out of the dividend declared by the Company for the Financial Year 2009-2010 were transferred to IEPF on 31st August, 2017. The details of the said unclaimed dividend transferred is available at the website of the Company at http://www.rossellindia.com/financials.html.
Similarly, during the period under review, (a) 1,72,925 shares pertaining to financial year 2008-2009 and (b) 18,240 shares pertaining to financial year 2009-2010 have been transferred to IEPF Authorities on 22nd November, 2017 and 12th January, 2018 respectively in compliance with the provisions of Section 124 of the Companies Act, 2013 and Rule 6 of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, after sending letters to those Shareholders and also making advertisement in the newspapers in this regard. Details of these shares transferred to IEPF are available on the website of the Company at http://www.rossellindia.com/financials.html.
DEPOSITS
Your Company has not accepted any deposits from public in terms of provisions contained in Chapter V of the Companies Act, 2013, or in terms of corresponding provisions of the Companies Act, 1956.
MANAGEMENT DISCUSSION AND ANALYSIS
A report on the Management Discussion and Analysis concerning all the business segments of the Company is given as Annexure-8 to this report.
(a) Conservation of energy
(i) |
the steps taken or |
impact on |
Machinery up-gradation and replacement of equipment is an ongoing process at |
|
conservation of energy |
the Tea factories of Rossell Tea Division, with a view to conserve Fuel, Electrical |
|||
Energy and other resources. Initiatives undertaken during the financial year 20172018 are as follows; |
||||
a) |
Installation of Power Capacitors in the 400 V panel board to improve the power factor of the Electrical System and reduce line losses. |
|||
b) |
Replacement of low efficiency and many times rewound induction motors of Dryers with IE2 motors of 15 HP and 30 HP towards energy conservation and savings in power. |
|||
c) |
Installation of Gas Flow meter for Monitoring Natural Gas utilization. |
|||
d) |
Replacement of Flat belt transmission to Gearbox transmission with a view to remove belt slippage and loss of power. |
|||
e) |
Rossell Hospitality Division continue to replace Conventional lighting with LED lights which is brighter and also saves energy and are Eco friendly. |
|||
f) |
Waste water from the RO is saved and stored for flushing and cleaning. |
(ii) |
the steps taken by the company for utilizing alternate sources of energy |
Rossell Tea Division has implemented an alternate source of energy provision at one of their factories, for withering and drying of teas by Natural Gas. This has replaced the use of coal, thereby reduction in cost as well as provision of clean operation. Study of the possibility of using Solar power at two Estates of Rossell Tea Division continues. Rossell Hospitality Division continue to replace Conventional lighting with LED lights which is brighter and also saves energy and are Eco friendly. |
(iii) |
the capital investment on energy conservation equipment |
All Machinery movement and new acquisition is planned with the concept of energy conservation and fuel savings. |
(b) Technology absorption |
||
(i) |
the efforts made towards technology absorption |
In-house seminar, discussions with experts and training programmes has been ongoing for innovative ideas of production and knowledge updating. The concerned staff members are also sponsored to attend various seminars and workshops for their improvement in various aspects of functioning of the Company. |
(ii) |
the benefits derived like product improvement, cost reduction, product development or import substitution |
There has been an overall improvement in quality of product and labour productivity, which results in economy of cost. |
(iii) |
in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)- |
Imported one Color Sorter Machine, Jiexun Anysort from China, for Orthodox Sorting operation at one of the Estate. |
(a) the details of technology imported |
NA |
|
(b) the year of import; |
NA |
|
(c) whether the technology been fully absorbed |
NA |
|
(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof |
NA |
|
(iv) |
the expenditure incurred on Research and Development |
The Company is a Member of Tea Research Association, Kolkata, which is registered under Sec. 35 (1) (ii) of the Income tax Act, 1961. A contribution of '' 10.98 lakhs was made during the year towards subscription by Rossell Tea Division. |
(c) Foreign Exchange Earnings and Outgo
During the year, the total foreign exchange used was '' 123.57 lakhs on account of various expenses and '' 4,365.20 lakhs for imports of raw materials, stores as well as capital goods. The total foreign exchange earned was '' 8,620.70 lakhs.
MATERIAL CHANGES AND COMMITMENTS
You Directors confirm that there are no material changes and commitments, affecting the financial position of the company, which has occurred between the end of the financial year of the Company and the date of this report.
ACKNOWLEDGEMENT
Your Directors place on record their appreciation for employees at all levels, who have contributed to the growth and performance of your Company.
Your Directors also thank the business associates, shareholders and other stakeholders of the Company for their continued support.
For and on behalf of the Board Rossell India Limited
Place : Kolkata H.M.Gupta
Date : 24th May, 2018 Executive Chairman
Mar 31, 2017
For the year ended 31st March, 2017
Dear 9Members,
Your Directors have pleasure in presenting their Twenty Third Annual Report together with the Audited Accounts for the year ended 31st March, 2017.
FINANCIAL SUMMARY HIGHLIGHTS
Rs. in Lakhs
Particulars |
Year ended 31st March 2017 |
Year ended 31st March 2016 |
Profit before finance cost and Depreciation |
801.90 |
2,850.11 |
Less : Finance Cost |
661.78 |
691.48 |
Profit before Depreciation |
140.12 |
2,158.63 |
Less : Depreciation |
886.17 |
953.01 |
Profit/(Loss) before Exceptional Items |
(746.05) |
1,205.62 |
Exceptional Items |
- |
- |
Profit/(Loss) before Taxation |
(746.05) |
1,205.62 |
Less : Provision for current Taxation |
|
|
Current year |
- |
300.00 |
Earlier Years |
- |
100.00 |
Deferred Taxation adjustment |
191.00 |
(151.84) |
Profit/(Loss) After Taxation |
(555.05) |
957.46 |
Add : Balance brought forward |
486.99 |
450.36 |
Transfer from General Reserve |
156.39 |
- |
Profit available for appropriation |
88.33 |
1,407.82 |
Appropriated as under : |
|
|
General Reserve |
- |
700.00 |
Dividend on Equity Shares |
|
|
Interim Dividend (2016- 25%) |
- |
183.48 |
Final Dividend Proposed (2017- 10%) |
73.39 |
- |
Tax on Dividend |
14.94 |
37.35 |
Balance carried forward |
- |
486.99 |
|
88.33 |
1,407.82 |
SHARE CAPITAL
During the year under review:
a. No Equity shares have been issued with differential voting rights. Hence, no disclosure is required in terms of Rule 4 (4) of Companies (Share Capital and Debentures) Rules, 2014.
b. No issue of Sweat Equity Share has been made. Hence, no disclosure is required in terms of Rule 8 (13) of Companies (Share Capital and Debentures) Rules, 2014.
c. There was no issue of Employee Stock Option. Hence, no disclosure is required in terms of Rule 12 (9) of Companies (Share Capital and Debentures) Rules, 2014.
d. There was no provision made by the Company for any money for purchase of its own shares by employees or by trustees for the benefit of employees. Hence, no disclosure is required in terms of Rule 16 (4) of Companies (Share Capital and Debentures) Rules, 2014.
e. The issued, subscribed and paid up share capital of the Company as on 1st April, 2016 at Rs. 733.93 lakh divided into 3, 66, 96,475 of Rs. 2 each remained unchanged as on 31st March, 2017.
APPROPRIATION OF PROFIT AFTER TAX FOR TRANSFER TO RESERVES
As per Audited Accounts of the Company, profit after tax has resulted in a loss. In view of this, no amount is available for appropriation for the Financial Year 2016-2017 for transfer to Reserves.
However, considering the loss for the year as a temporary phenomenon for the Company, your Directors considered it appropriate to declare dividend out of past profits transferred to General Reserve. Accordingly an amount of Rs. 156.39 lakhs has been retrieved from General Reserve for payment of dividend as per second proviso to Section 123 (1) of the Companies Act, 2013 ("the Act") read with Rule 3 of the Companies (Declaration and Payment of Dividend) Rules, 2014.
DIVIDEND
Your Directors are pleased to recommend to the Members, for their approval, a dividend of Rs. 0.20 per Equity Share of Rs. 2 each in the Company for the year ended 31st March, 2017.
THE STATE OF COMPANY''S AFFAIRS REVENUE
The gross revenue from operations of your Company including sale of Tea, avionics equipment, receipts from technical and support services and sale of food and beverages by Kebab Xpress together with other income were slightly higher at Rs. 16,682.25 lakhs for the year under review as against Rs. 16,636.67 lakhs in the previous year.
PERFORMANCE Rossell Tea
The Directors'' view with satisfaction the performance of Rossell Tea Division for the financial year 2016-17. Despite it being a difficult year in more ways than one, the Division continued to reinforce its USP of a quality product through the year. We continued to produce benchmark teas as we have done all these years.
The financial year 2016-17 began on the back of excellent winter rains in 2015 into early 2016. In April, at the start of the fiscal
2016-17, very wet and dull conditions were experienced, especially in upper Assam. This led to severe pest attacks and onset of fusarium, an airborne fungus, leading to crop losses and damage to large tea-bearing areas. This had a major impact on land productivity in terms of lower crops on Estates pushing up the cost of production.
The start of the season initially saw very large offerings of CTC teas carried over from the financial year 2015-16, due to a very high levels of production in March 2016. On arrival in the marketplace, CTC prices were pushed down to levels not seen for many years. The depressed prices continued through the season, especially for quality CTCs. Change in the buying pattern of major packeteers was also responsible for this. Ironically, the medium CTC continued to rule firm at their earlier levels.
Due to low CTC prices, producers moved to leverage this by increasing Orthodox capacities. The Orthodox came into a firm market except that levels for top quality whole leaf were lower. Medium Orthodox continued to rule firm.
Our Orthodox average for the period under review is Rs. 235.39 and the Assam district average of Rs. 212.80. For the CTC category also for the same reasons, our prices this year were Rs. 187.00 per kg, whilst overall Assam CTC average was Rs. 142.57. Close to 18% or more Orthodox was produced in Assam during 2016. In both categories, Orthodox and CTC, our averages were significantly higher than Assam averages.
On the export front, the challenges continued to be present. In Iran, LCs were taking longer than usual and payments were taking even longer. This caused producer-exporters to divert exportable teas to the auction system, which turned out to be beneficial. Your Company exported a total of 0.89 million kgs. We are optimistic that in the financial year 2017-18, we should be able to export 1.50 million kgs. or near thereto.
Our selling policies remained as before with our produce of quality CTC and Orthodox teas. With the market for CTC teas being weak, we maximized production of the Orthodox category and despite overall lower production in 2016-17; we produced 3.18 million kgs of Orthodox against 2.52 million kgs in the previous year.
Thus, prudent production mix allowed us to realize the best possible value for our teas. Our policy of prudent cost management, despite rising wages and burgeoning cost of production, helped us to realize the best possible margins under adverse conditions.
The Company continued with its programmed upgrades of its field assets and all programmes for uprooting and replanting were met in totality. The Company''s capital expenditure programme was also completed on schedule. Rossell continued to focus on its programmes and investments in the area of workers'' housing and hygiene. Irrigation is always a focus area and we are pleased to report that all Estates are now adequately equipped with Irrigation infrastructure. Modernization of factories remains our priorities as usual.
Aviation Products and Services
Aerotech Services Division continues to provide techno-logistic support under 4 different long term contracts. The work requirement continues to be the same of providing support services to the global Original Equipment Manufacturers (OEMs) for its equipment fitted on various Indian platforms. The support services are provided to IAF, Indian Navy, Indian Army and Hindustan Aeronautics Ltd. as and when they require. The Field Service Engineers (FSEs) strive to achieve the highest standards in knowledge and work execution.
In the Financial year 2016-2017, Rossell Techsys has grown by over 100% in its export business. It has also strengthened its'' order book with a total potential of close to USD 100 Million to be executed over the next five to seven years. It has achieved significant credibility and reputation in the Aerospace business. It has the distinction of being nominated in three consecutive years, 2014, 2015 and 2016, as the ''Boeing Supplier of the year''. It won this award for the year 2015. Further, it is also the recipient of the "Boeing Performance Excellence Award" two years in a row, the Gold category in 2015 and Silver category in 2016. The Division was also the recipient of the "Excellence in Aerospace Indigenization Award" instituted by SIATI (Society for Indian Aerospace and Technologies Industries) for the projects executed for the Indian Air force, resulting in significant foreign exchange savings for the country. The Division continues to maintain very high customer ratings on quality and delivery and maintains AS: 9100, ISO: 9001, ISO: 27 0 01 and BS: 18001 (OHSAS) certifications. It has also embarked on getting ISO 31000 compliance, another first to its credit. The Division operates out of two buildings in the same vicinity in the total area aggregating to 87,000 Sq. ft.
Rossell Hospitality
During the year under review, Kebab Xpress added three outlets, one each in Noida, South Delhi and North Delhi taking the total count to 13 outlets with revenues enhancement of 15% from Rs. 1,150.85 lakhs in the preceding financial year to Rs. 1,325.02 lakhs in the current financial year. Energies were engaged to consolidate the business across outlets and focused approach towards delivery is yielding encouraging trends.
PROSPECTS
Rossell Tea
Major producers, Sri Lanka and Kenya have had a very poor start to their 2017 season. Till March, Sri Lanka was 3.90 million kgs behind the previous year. Kenya too has built up a deficit of 49.50 million kgs over 2016. The Indian tea belt in Assam, where all our Estates are located has had a steady start to the season, where crops have been stable and prices too are superior to 2016 so far. Overall fundamentals are strong.
As it appears, prices tend to settle down after the first flush in May, going into the second flush. As far as the market is concerned as of now, we expect prices to be stable. There is one discerning factor, last year for the first time, top quality teas CTC and Orthodox actually showed a decline in their value in the market place, while medium teas appreciated within their price bands. This year we expect a reversal of this trend with prices for quality teas being higher.
Exports have always been a critical area of performance and we have a fair idea of quality and quantity trends in the sophisticated continental markets. In Iran, a more robust trading platform for Indo-Iranian trade needs to be set in place. The threat of US sanction against Iran continues to be a dampener. However, with a new government in place in Iran, we expect a smoother year of trade.
Finally, we have indications from arrivals at the auction centers, that Orthodox production out of Assam is likely to be significantly higher than last year, indicating year on year increase in this category for 3 years in succession. Thus, there are all the more reasons that tea trade between India and Iran has to be smooth.
Aviation Products and Services
Aerotech Services Division expects a new long term contract to be finalized in the next few months. The Division has achieved all the laid down milestones. Foreign OEMs continue to appreciate the work done by FSEs in completing complex tasks to the satisfaction of the customer.
Rossell Techsys Division expect to witness significant increase in revenue in the financial year 2017-18 through financial years 2021-22 not only on account of various strategic agreements signed with its existing customers and also increased traction with new customers in the domain. The Division has also won its first contract in the build to print of electrical panel assemblies that is expected to fuel in-house competency growth in small sheet metal and precision machining.
Rossell Hospitality
The Division has appointed Ernst and Young (EY) to conduct a detailed study on the format including competition analysis and draw out a map for revenue enhancement starting June, 2017 across all outlets. They shall also be looking at critical cost parameters and processes.
All the outlets are on a cusp of delivering significant revenue enhancement in view of critical changes like increase in portion sizes, new Kebab Xpress look, introduction of new products, renewed Menu presentation, price revision of core products, bundling food items and customer loyalty programme.
CHANGE IN NATURE OF BUSINESS, IF ANY
There has been no change in any business and all the Divisions of the Company continue to concentrate on their own business with growth plans in short to medium terms.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The following persons continued as Key Managerial Personnel of the Company in compliance with the provisions of Section 203 of the Act :
a) Mr. H. M. Gupta - Chief Executive Officer (CEO)
b) Mr. C.S. Bedi - Managing Director, and
c) Mr. N. K. Khurana - Chief Financial Officer-cum- Company Secretary
However, at the Board Meeting held on 25th May, 2017, Mr. C. S. Bedi, Managing Director sought retirement from his office with effect from 1st September, 2017, for personal reasons. Accordingly, Mr. Bedi has given the Notice of 3 Months'' to the Company, to be made effective from 1st June, 2017 as per terms of service. This Notice was duly accepted and taken on record by the Board of Directors.
At the same Meeting, upon the recommendation of the Nomination and Remuneration Committee, the Board decided to elevate Mr. N. K. Khurana, Chief Financial Officer-cum-Company Secretary, to the Board with effect from 1st September, 2017 with the designation, Director (Finance) and Company Secretary, subject to the approval from the Members of the Company in the General Meeting. A Notice has also been received under Section 160 (1) of the Act along with the requisite deposit, from one of the Members of the Company signifying their intention to propose the appointment of Mr. N. K. Khurana as a Director of the Company. Accordingly, appointment of Mr. N. K. Khurana as a Director and Whole time Director has been included as Special Business in the Notice calling the forthcoming Annual General Meeting of the Company.
Remuneration and other details of the Key Managerial Personnel for the Financial Year ended 31st March, 2017 are mentioned in the Extracts of the Annual Return in Form MGT-9 which is enclosed as Annexure - 3 and forms part of this Report.
INDEPENDENT DIRECTOR''S DECLARATION
The Declarations required under Section 149(7) of the Act from the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act, was duly received by the Company.
CORPORATE GOVERNANCE
The Company has complied with the Corporate Governance requirements under the Act and as stipulated under Regulations 17 to 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations) read with schedule II thereof. A separate report on Corporate Governance in terms of Regulation 34(3) read with Clause C of Schedule V of the SEBI Listing Regulations along with certificate from the Practicing Company Secretary confirming the compliance, is annexed as Annexure-1 and forms part of this Report.
DETAILS OF BOARD MEETINGS
The Board of Directors met 7 (Seven) times during the financial year 2016-2017 on various dates as given here-in-below:
Sl No. |
Date of the meeting |
No. of Directors attended the meeting |
1. |
1st April, 2016 |
7 |
2. |
30th May, 2016 |
7 |
3. |
3rd August, 2016 |
7 |
4. |
19th September, 2016 |
7 |
5. |
11th November, 2016 |
7 |
6. |
31st January, 2017 |
7 |
7. |
29th March, 2017 |
7 |
Further details on Board of Directors are provided in the Corporate Governance Report.
COMMITTEES OF THE BOARD a. Audit Committee
The Board has constituted the Audit Committee which comprises of the following Directors:
Sl. No. |
Name |
Category of Director |
Chairman/ Members |
1. |
Dr. S. S. Baijal |
Non-Executive-Independent |
Chairman |
2. |
Mr. H. M. Parekh |
Non-Executive-Independent |
Member |
3. |
Mr. V. P. Agarwal |
Non-Executive-Independent |
Member |
4. |
Ms.Nayantara Palchoudhuri |
Non-Executive Non-Independent |
Member |
During the year under review, the Board accepted all the recommendations made by the Audit Committee.
Further details of Audit Committee related to dates of Meeting held during the year, attendance of Directors etc. are given separately in the attached Corporate Governance Report. b. Nomination and Remuneration Committee
The Nomination and Remuneration Committee of the Board has been constituted by the following Directors:
Sl. No. |
Name |
Category of Director |
Chairman/ Members |
1. |
Mr. H. M. Parekh |
Non-Executive-Independent |
Chairman |
2. |
Dr. S.S. Baijal |
Non-Executive-Independent |
Member |
3. |
Mr. V. P Agarwal |
Non-Executive-Independent |
Member |
Further details of Nomination and Remuneration Committee related to dates of Meeting held during the year, attendance of Directors etc. are given separately in the attached Corporate Governance Report. c. Corporate Social Responsibility Committee
The Corporate Social Responsibility Committee of the Board has been constituted by the following Directors:
Sl. No. |
Name |
Chairman/ Members |
1. |
Dr. S. S. Baijal |
Chairman |
2. |
Mr. V. P Agarwal |
Member |
3. |
Mr. C. S. Bedi |
Member |
Further details of Corporate Social Responsibility Committee related to dates of Meeting held during the year, attendance of Directors etc. are given separately in the attached Corporate Governance Report.
The Committee had framed the CSR Policy and the same was approved by the Board at its Meeting held on 6th August, 2014. The CSR Policy is available on Company''s website at www.rossellindia.com. of Section 135 (5) of the Act read with the Company''s CSR Policy. The amount The CSR budget for the financial year 2016-2017 was prepared in accordance with the provisions so budgeted was fully spent on or before 31st March, 2017, the detailed report on CSR Activities/ Initiatives is enclosed as Annexure-2 which forms part of this Report.
d. Stakeholders'' Relationship Committee
The Stakeholders Relationship Committee of the Board has been constituted by the following Directors:
Sl. No. |
Name |
Chairman/ Members |
1. |
Mr. H. M. Parekh |
Chairman |
2. |
Mr. V. P Agarwal |
Member |
3. |
Mr. C. S. Bedi |
Member |
Further details of Stakeholders Relationship Committee related to dates of Meeting held during the year, attendance of Directors etc. are given separately in the attached Corporate Governance Report.
e. Risk Management Committee
Your Board has voluntarily constituted the Risk Management Committee in the manner prescribed in Regulation 21 of the SEBI Listing Regulations consisting of the following Directors:
Sl. No. |
Name |
Chairman/ Members |
1. |
Mr. H. M. Parekh |
Chairman |
2. |
Ms. Nayantara Palchoudhuri |
Member |
3. |
Mr. C. S. Bedi |
Member |
Further details of Risk Management Committee related to dates of Meeting held during the year, attendance of Directors etc. are given separately in the attached Corporate Governance Report.
ANNUAL PERFORMANCE EVALUATION
In terms of the relevant provisions of the Act and SEBI Listing Regulations, the Board had carried out an annual evaluation of its own performance and that of its Committees as well as individual Directors.
A structured questionnaire was prepared in terms of the criteria specified by SEBI vide its Circular No. SEBI/HO/CFD/CMD/ CIR/P/2017/004 dated 5th January, 2017. The Questionnaire for the Evaluation of the Board as a whole, the Questionnaire for the Evaluation of the Committees of the Board and the Questionnaire for the Evaluation of Individual Director were circulated to all the Directors and feedback obtained. After taking into consideration different views expressed by the Directors, covering various aspects of the Board''s functioning such as adequacy of the Board''s composition and structure, Board''s culture, execution and performance of specific duties, obligations and governance, effectiveness of Board processes etc., the evaluation of the Board was conducted.
The performance of the Committees was evaluated by the Board based on the aforesaid Questionnaire, seeking inputs from the Committee Members on the basis of the criteria such as the composition of Committees, effectiveness of Committee Meetings, etc.
The Board and the Nomination and Remuneration Committee reviewed the performance of the individual Directors on the basis of the criteria as mentioned above. In addition, the Executive Chairman was also evaluated on the key aspects of his role.
The Independent Directors also carried out the Performance Evaluation in terms of Clause VII (3) of Schedule IV to the Act read with Regulation 25(3) of the SEBI Listing Regulations at their separate Meeting held on 31st January, 2017.
EXTRACT OF ANNUAL RETURN
Pursuant to section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of Annual Return is given as Annexure- 3.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
Pursuant to Section 177(9) of the Act read with Regulation 22 of the SEBI Listing Regulations, your Company has duly established Vigil Mechanism for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of Company''s Code of Conducts or ethics Policy. The Audit Committee of the Board monitors and oversee the vigil mechanism.
The detailed Policy related to this vigil mechanism is available in the Company''s website at www.rossellindia.com.
DIRECTORS'' RESPONSIBILITY STATEMENT
The Board of Directors acknowledges the responsibilities for ensuring compliance with the provisions of Section 134(3) (c) read with Section 134(5) of the Act and confirm that:
(a) In the preparation of the Annual Accounts for Financial Year ended 31st March, 2017, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any;
(b) the Directors had selected such accounting policies and applied them 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 for the Financial Year ended 31st March, 2017, and of the Profit and Loss of the Company for that period;
(c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) The Directors had prepared the Annual Accounts on a going concern basis;
(e) the Directors, had laid down Internal Financial Controls to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and
(f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
STATUTORY AUDITORS, THEIR REPORT AND NOTES TO FINANCIAL STATEMENTS
In terms of Section 139(2) of the Act, M/s. S. S. Kothari & Co., Chartered Accountants, existing Statutory Auditors of the Company have completed their tenure of two terms of five consecutive years at the commencement of the Act on 1st April, 2014 and an additional period of 3 years as stipulated under third proviso of Section 139(2) read with Rule 6 of the Companies (Audit and Auditors) Rules, 2014. Accordingly, they will vacate the office at the conclusion of the forthcoming Annual General Meeting.
In view of above, the Company is proposing to appoint M/s. Khandelwal Ray & Co. Chartered Accountants, Kolkata (Firm Regn. No. 302035E) as the Statutory Auditors for a period of 5 years commencing from the conclusion of the 23rd Annual General Meeting till the conclusion of the 28th Annual General Meeting. M/s. Khandelwal Ray & Co. have given their consent to the said appointment and confirmed that their appointment, if made, would be within the limits mentioned under Section 141(3) (g) of the Act.
The Audit Committee and the Board recommend the appointment of M/s. Khandelwal Ray & Co. Chartered Accountants, as Statutory Auditors of the Company for a period of 5 years commencing from the conclusion of the 23rd Annual General Meeting till the conclusion of the 28th Annual General Meeting.
The Board places on record its appreciation for the contribution of M/s. S. S. Kothari & Co., Chartered Accountants during their tenure as the Statutory Auditors of your Company.
The report of the Statutory Auditors during the year under review does not contain any qualification, reservation or adverse remark or disclaimer, which requires any further comments or explanations in this report. The Notes to the Financial Statements are also self-explanatory and do not call for any further comments.
COST AUDIT
Pursuant to Section 148 of the Act read with Rule 4 of the Companies (Cost Records and Audit) Amendment Rules, 2014, your Company is required to have the audit of its cost accounting records relating to products manufactured by Rossell Tea Division and Rossell Techsys Division. M/s. Shome & Banerjee, Cost Accountants, conducted this audit for the previous Financial Year ended 31st March, 2016 and submitted their report to the Central Government on 2nd September, 2016.
In terms of Section 148(3) of the Act read with the Companies (Cost Records and Audit) Rules, 2014, the Board of Directors of the Company has, on the recommendation of the Audit Committee, re-appointed M/s. Shome & Banerjee, Cost Accountants as the Cost Auditor of the Company for the Financial Year 2017-2018.
Their remuneration is required to be ratified by the Members in the ensuing Annual General Meeting.
SECRETARIAL AUDIT
In terms of Section 204 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed M/s. A.K. Labh & Co., Practicing Company Secretaries as the Secretarial Auditors of the Company for the Financial Year 2016-2017. The report of the Secretarial Auditors in Form MR-3 is enclosed as Annexure-4 to this report.
The report confirms that the Company had complied with the statutory provisions listed under Form MR-3 and the Company also has proper Board Processes and Compliance Mechanism. The Report does not contain any qualification, reservation or adverse remark or disclaimer, which requires any further comments or explanations in this report.
RELATED PARTY TRANSACTIONS
All the Related Party Transactions are entered on arm''s length basis and are in compliance with the applicable provisions of the Act and SEBI Listing Regulations. There are no materially significant Related Party Transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the Company at large. All Related Party Transactions are presented to the Audit Committee and the Board, if required for approval. Omnibus Approval is obtained for the transactions, which are foreseen and repetitive in nature. Policy on Related Party Transactions, as approved by the Board is uploaded on the Company''s website at the web link: http://www.rossellindia.com/financialresult/Policy%20on%20Related%20 Party%20Transactions.pdf.
Necessary disclosure of Related Party Transactions in terms of Clause (h) of sub-section (3) of Section 134 of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is given in Form AOC-2 as Annexure-5 to this Report.
LOANS, GUARANTEES OR INVESTMENTS
Your Company has not provided any Guarantee for any party. During the year under review, neither any inter-corporate loan was granted by the Company, nor any investment made, in terms of the provisions of Section 186 of the Act. Particulars of existing Investments made by the Company, as required to be disclosed in terms of Section 134 (1) (g) of the Act is given in the accompanying Financial Statement (Note No. L).
STATEMENTS OF SUBSIDIARIES / JOINT VENTURES
The wholly owned subsidiary, CAE Rossell India Limited, did not carry out any activity during the year under review. Your Company has a Joint Venture entity named RV Enterprises Pte. Ltd., Singapore in which Company holds 26% Equity Share.
Accompanying Consolidated Financial Statement contains details financials of the Subsidiary / Joint Venture.
RISK MANAGEMENT POLICY
Your Company''s business faces various risks - strategic as well as operational in respect of all its Divisions. The Company has an adequate risk management system, which takes care of identification, assessment and review of risks as well as their mitigation plans put in place by the respective risk owners. The risks which were being addressed by the Company during the year under review included risks relating to market conditions, environmental, information technology etc. The Company has developed and implemented the Risk Management Policy with an objective to provide a more structured framework for proactive management of all risks related to the business of the Company and to make it more certain that growth and earnings targets as well as strategic objectives are met.
The major risks and concerns being faced by various business segments of the Company are discussed in report on Management Discussion and Analysis, forming part of this Report.
Your Company has constituted Risk Management Committee of the Board in the manner stated in Regulation 21 of the SEBI Listing Regulations. The Risk Management Committee reviews the risk assessment and minimization procedure in the light of the Risk Management Policy of the Company.
In the opinion of the Board, there is no such element of risk which may threaten the present existence of the Company. REMUNERATION POLICY
The Company follows a policy on Remuneration of Directors and Senior Management Employees. The policy is approved by the Nomination and Remuneration Committee and the Board. Further details on the same have been given in the Report on Corporate Governance, which forms part of this Report.
The required disclosure under Section 197 (12) of the Act read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given as Annexure- 6 to this Report.
HUMAN RESOURCES
Your Company treats its "human resources" as one of the most important assets. The Management of the Company lays continuous focus on human resources, who are trained and updated on various issues from time to time to attain the required standards. The correct recruitment practices are in place to attract the best technical manpower to ensure that the Company maintains its competitive position with respect to execution. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis.
Industrial relations at all the units remain satisfactory, your Company employed 6,278 personnel on its roll as on 31st March, 2017.
For the year under review, the particulars of the Executive Chairman, who was in receipt of remuneration, which in the aggregate was not less than rupees one crore two lakh and employed throughout the financial year is given in Annexure- 7 to this Report. There was no other employee in this category. Thus, particulars of other top 9 employees are not required to be disclosed.
The Company did not have any employee on its payroll, who:
a. if employed for a part of the Financial Year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than Eight Lakh Fifty Thousand rupees per month;
b. if employed throughout the Financial Year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the Managing Director or Whole-Time Director or Manager and holds by himself or along with his spouse and dependent children, not less than two percent of the Equity Shares of the Company.
The total remuneration drawn by the Managing Directors and Key Managerial Personnel forms part of Extracts from the Annual Return in Form MGT-9. Mr. H. M. Gupta, Executive Chairman in his capacity as the Chairman and Managing Director of BMG Enterprises Ltd., the Holding Company drew a remuneration of Rs. 6.00 lakhs as consolidated salary pursuant to Section 197 (14) of the Act.
AWARDS AND RECOGNITION
Your Directors are pleased to advise that during the year under review, Rossell Techsys Division of the Company received the following awards:
> Emerging Company of the Year 2017 by the International Aerospace Magazine (SAP Media).
> Excellence in Aerospace Indigenization - 2016 by SIATI (Society for Indian Aerospace Technologies and Industries)
> Boeing Performance Excellence Award (BPEA)-2016 - Silver Category.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
There is no significant or material order passed by any Regulators or Courts or Tribunals impacting the going concern status and Companyâs operations in future.
INTERNAL FINANCIAL CONTROLS
Your Company has adequate Internal Financial Control System at all levels of Management and they are reviewed from time to time. The Internal Audit is carried out in house as well as by firms of Chartered Accountants for all the Divisions of the Company. The Audit Committee of the Board looks into Auditor''s review, which is deliberated upon and corrective action taken, wherever required.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
In compliance with the provisions of Section 124 (5) of the Act read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules 2016, the following amounts were transferred to Investor Education and Protection Fund of the Central Government during 2016-2017:
a) A sum of Rs. 1,22,881 being the dividend lying unclaimed out of the dividend declared by the Company for the Financial Year 2008-2009 were transferred to the IEPF on 3rd September, 2016.
b) A sum of Rs. 64,384 being the dividend lying unclaimed out of the interim dividend declared by the Company for the Financial Year 2009-2010 were transferred to IEPF on 15th December, 2016.
Equity Shares corresponding to the dividend unclaimed for seven consecutive years will also be transferred to the IEPF Suspense Account in terms of Section 124 and 125 of the Act read with Rule 6 of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016. Further details in this respect are given separately in the attached Corporate Governance Report marked as Annexure-1 of this Report.
DEPOSITS
Your Company has not accepted any deposits from public in terms of provisions contained in Chapter V of the Act, or in terms of corresponding provisions of the Companies Act, 1956.
MANAGEMENT DISCUSSION AND ANALYSIS
A Report on the Management Discussion and Analysis concerning all the business segments of the Company is given as Annexure-8 to this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
(a) Conservation of energy
(i) |
the steps taken or conservation of energy |
impact on |
Machinery up-gradation and replacement of low performing equipment is an ongoing process at the Tea factories of Rossell Tea Division, with a view to conserve |
|||
|
|
|
Fuel, Electrical Energy and other resources. Initiatives undertaken during the |
|||
|
|
|
Financial Year 2016-17 are as follows; |
|||
|
|
|
a) |
Replacement of old and obsolete Diesel Generators of 365 KVA and 160 KVA respectively has been done with higher capacity sets. The new sets have the ability of better capacity utilization and improved units per Liter of fuel. |
||
|
|
|
b) |
Replacement of old inefficient Axial Flow Fans attached to Energy Efficient Motors for higher volumes of air availability with reduced energy consumption has been done at one of the factories. This would be taken up in other factories in phases. |
||
|
|
|
c) |
Installation of improved Irrigation facility with underground piping and voltage regulators for full utilization of the sprinklers for greater coverage of command area. |
||
|
|
|
d) |
Installation of wind propelled ventilators on factory roof which helps in maintaining the quality of produce and also provide better working environment inside the factory. |
||
|
|
e) Installation of improved gas burners for Dryers at 2 factories which has the ability to operate at low pressures keeping constant temperature with inbuilt safety of operation. f) Installation of static Power Capacitors to improve the Plant Power Factor thereby reduce losses incurred in the State Board Power Supply. Rossell Hospitality Division has taken the following initiatives since the last few years: a) Great deal of focus on OEE (Overall Equipment Efficiency) to optimize productivity. b) Driving sustainable development programme for water and power. c) Replaced conventional lighting with LED lights which are not only brighter but also save energy and are Eco friendly. d) Waste water from RO is saved and stored for flushing and cleaning. |
||||
(ii) |
the steps taken by the Company for utilizing alternate sources of energy |
Rossell Tea Division has arranged for alternate source of energy provision for withering and drying of teas by supply of Natural Gas at one of the Factories. This would replace the use of solid fuel thereby reduction of cost. Study of the possibility of using Solar power at two Estates of Rossell Tea Division continues. Rossell Techsys Division is constrained to adopt alternative source of energy, as it is currently operating from leased premises in Bangalore. The owners of the premises are not motivated enough to invest in these alternative sources of energy. |
||||
(iii) |
the capital investment on energy conservation equipments |
All the equipment and machinery are being acquired with energy conservation in view. Hence the extent of investment cannot be separately quantified. However, the capital investment during the year under review on acquisition of energy conservation equipment in particular was Rs. 79.78 Lakhs in Rossell Tea. |
||||
(b) Technology absorption |
||||||
(i) |
the efforts made towards technology absorption |
In-house seminars, discussions with experts and training programme were held for innovative ideas of production and to update the staff. The concerned staff members are also sponsored to attain various seminars and workshops for updating themselves in various technological advancements concerning the functioning of the Company. |
||||
(ii) |
the benefits derived like product improvement, cost reduction, product development or import substitution |
There has been an overall improvement in quality of product and labour productivity, which results in economy in cost. |
||||
(iii) |
in case of imported technology (imported during the last three years reckoned from the beginning of the Financial Year)- |
Not Applicable |
||||
(a) the details of technology imported |
||||||
(b) the year of import; |
||||||
(c) whether the technology been fully absorbed |
||||||
(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof |
||||||
(iv) |
the expenditure incurred on Research and Development |
The Company is a Member of Tea Research Association, Kolkata, which is registered under Sec. 35 (1) (ii) of the Income tax Act, 1961. A contribution of Rs. 14.59 lakhs during the year towards subscription by Rossell Tea Division. All the Research and Development work done in Rossell Techsys Division is customer specific and for their exclusive purpose. Thus the cost thereof is absorbed by the respective project cost and not required to be accumulated separately. |
||||
(c) Foreign Exchange Earnings and Outgo
During the year, the total foreign exchange used was Rs. 104.15 lakhs on account of various expenses and Rs. 2,619.99 lakhs for imports of raw materials, stores as well as capital goods. The total foreign exchange earned was Rs. 6,409.17 lakhs (Note No. 10 to the Financial Statements)
MATERIAL CHANGES AND COMMITMENTS
You Directors confirm that there are no material changes and commitments, affecting the financial position of the Company which has occurred between the end of the Financial Year of the Company and the date of this Report.
ACKNOWLEDGEMENT
Your Directors place on record their appreciation for employees at all levels, who have contributed to the growth and performance of your Company.
Your Directors also thank the business associates, shareholders and other stakeholders of the Company for their continued support.
For the year ended 31st March, 2017
Dear 9Members,
Your Directors have pleasure in presenting their Twenty Third Annual Report together with the Audited Accounts for the year ended 31st March, 2017.
FINANCIAL SUMMARY HIGHLIGHTS
Rs. in Lakhs
Particulars |
Year ended 31st March 2017 |
Year ended 31st March 2016 |
Profit before finance cost and Depreciation |
801.90 |
2,850.11 |
Less : Finance Cost |
661.78 |
691.48 |
Profit before Depreciation |
140.12 |
2,158.63 |
Less : Depreciation |
886.17 |
953.01 |
Profit/(Loss) before Exceptional Items |
(746.05) |
1,205.62 |
Exceptional Items |
- |
- |
Profit/(Loss) before Taxation |
(746.05) |
1,205.62 |
Less : Provision for current Taxation |
|
|
Current year |
- |
300.00 |
Earlier Years |
- |
100.00 |
Deferred Taxation adjustment |
191.00 |
(151.84) |
Profit/(Loss) After Taxation |
(555.05) |
957.46 |
Add : Balance brought forward |
486.99 |
450.36 |
Transfer from General Reserve |
156.39 |
- |
Profit available for appropriation |
88.33 |
1,407.82 |
Appropriated as under : |
|
|
General Reserve |
- |
700.00 |
Dividend on Equity Shares |
|
|
Interim Dividend (2016- 25%) |
- |
183.48 |
Final Dividend Proposed (2017- 10%) |
73.39 |
- |
Tax on Dividend |
14.94 |
37.35 |
Balance carried forward |
- |
486.99 |
|
88.33 |
1,407.82 |
SHARE CAPITAL
During the year under review:
a. No Equity shares have been issued with differential voting rights. Hence, no disclosure is required in terms of Rule 4 (4) of Companies (Share Capital and Debentures) Rules, 2014.
b. No issue of Sweat Equity Share has been made. Hence, no disclosure is required in terms of Rule 8 (13) of Companies (Share Capital and Debentures) Rules, 2014.
c. There was no issue of Employee Stock Option. Hence, no disclosure is required in terms of Rule 12 (9) of Companies (Share Capital and Debentures) Rules, 2014.
d. There was no provision made by the Company for any money for purchase of its own shares by employees or by trustees for the benefit of employees. Hence, no disclosure is required in terms of Rule 16 (4) of Companies (Share Capital and Debentures) Rules, 2014.
e. The issued, subscribed and paid up share capital of the Company as on 1st April, 2016 at Rs. 733.93 lakh divided into 3, 66, 96,475 of Rs. 2 each remained unchanged as on 31st March, 2017.
APPROPRIATION OF PROFIT AFTER TAX FOR TRANSFER TO RESERVES
As per Audited Accounts of the Company, profit after tax has resulted in a loss. In view of this, no amount is available for appropriation for the Financial Year 2016-2017 for transfer to Reserves.
However, considering the loss for the year as a temporary phenomenon for the Company, your Directors considered it appropriate to declare dividend out of past profits transferred to General Reserve. Accordingly an amount of Rs. 156.39 lakhs has been retrieved from General Reserve for payment of dividend as per second proviso to Section 123 (1) of the Companies Act, 2013 ("the Act") read with Rule 3 of the Companies (Declaration and Payment of Dividend) Rules, 2014.
DIVIDEND
Your Directors are pleased to recommend to the Members, for their approval, a dividend of Rs. 0.20 per Equity Share of Rs. 2 each in the Company for the year ended 31st March, 2017.
THE STATE OF COMPANY''S AFFAIRS REVENUE
The gross revenue from operations of your Company including sale of Tea, avionics equipment, receipts from technical and support services and sale of food and beverages by Kebab Xpress together with other income were slightly higher at Rs. 16,682.25 lakhs for the year under review as against Rs. 16,636.67 lakhs in the previous year.
PERFORMANCE Rossell Tea
The Directors'' view with satisfaction the performance of Rossell Tea Division for the financial year 2016-17. Despite it being a difficult year in more ways than one, the Division continued to reinforce its USP of a quality product through the year. We continued to produce benchmark teas as we have done all these years.
The financial year 2016-17 began on the back of excellent winter rains in 2015 into early 2016. In April, at the start of the fiscal
2016-17, very wet and dull conditions were experienced, especially in upper Assam. This led to severe pest attacks and onset of fusarium, an airborne fungus, leading to crop losses and damage to large tea-bearing areas. This had a major impact on land productivity in terms of lower crops on Estates pushing up the cost of production.
The start of the season initially saw very large offerings of CTC teas carried over from the financial year 2015-16, due to a very high levels of production in March 2016. On arrival in the marketplace, CTC prices were pushed down to levels not seen for many years. The depressed prices continued through the season, especially for quality CTCs. Change in the buying pattern of major packeteers was also responsible for this. Ironically, the medium CTC continued to rule firm at their earlier levels.
Due to low CTC prices, producers moved to leverage this by increasing Orthodox capacities. The Orthodox came into a firm market except that levels for top quality whole leaf were lower. Medium Orthodox continued to rule firm.
Our Orthodox average for the period under review is Rs. 235.39 and the Assam district average of Rs. 212.80. For the CTC category also for the same reasons, our prices this year were Rs. 187.00 per kg, whilst overall Assam CTC average was Rs. 142.57. Close to 18% or more Orthodox was produced in Assam during 2016. In both categories, Orthodox and CTC, our averages were significantly higher than Assam averages.
On the export front, the challenges continued to be present. In Iran, LCs were taking longer than usual and payments were taking even longer. This caused producer-exporters to divert exportable teas to the auction system, which turned out to be beneficial. Your Company exported a total of 0.89 million kgs. We are optimistic that in the financial year 2017-18, we should be able to export 1.50 million kgs. or near thereto.
Our selling policies remained as before with our produce of quality CTC and Orthodox teas. With the market for CTC teas being weak, we maximized production of the Orthodox category and despite overall lower production in 2016-17; we produced 3.18 million kgs of Orthodox against 2.52 million kgs in the previous year.
Thus, prudent production mix allowed us to realize the best possible value for our teas. Our policy of prudent cost management, despite rising wages and burgeoning cost of production, helped us to realize the best possible margins under adverse conditions.
The Company continued with its programmed upgrades of its field assets and all programmes for uprooting and replanting were met in totality. The Company''s capital expenditure programme was also completed on schedule. Rossell continued to focus on its programmes and investments in the area of workers'' housing and hygiene. Irrigation is always a focus area and we are pleased to report that all Estates are now adequately equipped with Irrigation infrastructure. Modernization of factories remains our priorities as usual.
Aviation Products and Services
Aerotech Services Division continues to provide techno-logistic support under 4 different long term contracts. The work requirement continues to be the same of providing support services to the global Original Equipment Manufacturers (OEMs) for its equipment fitted on various Indian platforms. The support services are provided to IAF, Indian Navy, Indian Army and Hindustan Aeronautics Ltd. as and when they require. The Field Service Engineers (FSEs) strive to achieve the highest standards in knowledge and work execution.
In the Financial year 2016-2017, Rossell Techsys has grown by over 100% in its export business. It has also strengthened its'' order book with a total potential of close to USD 100 Million to be executed over the next five to seven years. It has achieved significant credibility and reputation in the Aerospace business. It has the distinction of being nominated in three consecutive years, 2014, 2015 and 2016, as the ''Boeing Supplier of the year''. It won this award for the year 2015. Further, it is also the recipient of the "Boeing Performance Excellence Award" two years in a row, the Gold category in 2015 and Silver category in 2016. The Division was also the recipient of the "Excellence in Aerospace Indigenization Award" instituted by SIATI (Society for Indian Aerospace and Technologies Industries) for the projects executed for the Indian Air force, resulting in significant foreign exchange savings for the country. The Division continues to maintain very high customer ratings on quality and delivery and maintains AS: 9100, ISO: 9001, ISO: 27 0 01 and BS: 18001 (OHSAS) certifications. It has also embarked on getting ISO 31000 compliance, another first to its credit. The Division operates out of two buildings in the same vicinity in the total area aggregating to 87,000 Sq. ft.
Rossell Hospitality
During the year under review, Kebab Xpress added three outlets, one each in Noida, South Delhi and North Delhi taking the total count to 13 outlets with revenues enhancement of 15% from Rs. 1,150.85 lakhs in the preceding financial year to Rs. 1,325.02 lakhs in the current financial year. Energies were engaged to consolidate the business across outlets and focused approach towards delivery is yielding encouraging trends.
PROSPECTS
Rossell Tea
Major producers, Sri Lanka and Kenya have had a very poor start to their 2017 season. Till March, Sri Lanka was 3.90 million kgs behind the previous year. Kenya too has built up a deficit of 49.50 million kgs over 2016. The Indian tea belt in Assam, where all our Estates are located has had a steady start to the season, where crops have been stable and prices too are superior to 2016 so far. Overall fundamentals are strong.
As it appears, prices tend to settle down after the first flush in May, going into the second flush. As far as the market is concerned as of now, we expect prices to be stable. There is one discerning factor, last year for the first time, top quality teas CTC and Orthodox actually showed a decline in their value in the market place, while medium teas appreciated within their price bands. This year we expect a reversal of this trend with prices for quality teas being higher.
Exports have always been a critical area of performance and we have a fair idea of quality and quantity trends in the sophisticated continental markets. In Iran, a more robust trading platform for Indo-Iranian trade needs to be set in place. The threat of US sanction against Iran continues to be a dampener. However, with a new government in place in Iran, we expect a smoother year of trade.
Finally, we have indications from arrivals at the auction centers, that Orthodox production out of Assam is likely to be significantly higher than last year, indicating year on year increase in this category for 3 years in succession. Thus, there are all the more reasons that tea trade between India and Iran has to be smooth.
Aviation Products and Services
Aerotech Services Division expects a new long term contract to be finalized in the next few months. The Division has achieved all the laid down milestones. Foreign OEMs continue to appreciate the work done by FSEs in completing complex tasks to the satisfaction of the customer.
Rossell Techsys Division expect to witness significant increase in revenue in the financial year 2017-18 through financial years 2021-22 not only on account of various strategic agreements signed with its existing customers and also increased traction with new customers in the domain. The Division has also won its first contract in the build to print of electrical panel assemblies that is expected to fuel in-house competency growth in small sheet metal and precision machining.
Rossell Hospitality
The Division has appointed Ernst and Young (EY) to conduct a detailed study on the format including competition analysis and draw out a map for revenue enhancement starting June, 2017 across all outlets. They shall also be looking at critical cost parameters and processes.
All the outlets are on a cusp of delivering significant revenue enhancement in view of critical changes like increase in portion sizes, new Kebab Xpress look, introduction of new products, renewed Menu presentation, price revision of core products, bundling food items and customer loyalty programme.
CHANGE IN NATURE OF BUSINESS, IF ANY
There has been no change in any business and all the Divisions of the Company continue to concentrate on their own business with growth plans in short to medium terms.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The following persons continued as Key Managerial Personnel of the Company in compliance with the provisions of Section 203 of the Act :
a) Mr. H. M. Gupta - Chief Executive Officer (CEO)
b) Mr. C.S. Bedi - Managing Director, and
c) Mr. N. K. Khurana - Chief Financial Officer-cum- Company Secretary
However, at the Board Meeting held on 25th May, 2017, Mr. C. S. Bedi, Managing Director sought retirement from his office with effect from 1st September, 2017, for personal reasons. Accordingly, Mr. Bedi has given the Notice of 3 Months'' to the Company, to be made effective from 1st June, 2017 as per terms of service. This Notice was duly accepted and taken on record by the Board of Directors.
At the same Meeting, upon the recommendation of the Nomination and Remuneration Committee, the Board decided to elevate Mr. N. K. Khurana, Chief Financial Officer-cum-Company Secretary, to the Board with effect from 1st September, 2017 with the designation, Director (Finance) and Company Secretary, subject to the approval from the Members of the Company in the General Meeting. A Notice has also been received under Section 160 (1) of the Act along with the requisite deposit, from one of the Members of the Company signifying their intention to propose the appointment of Mr. N. K. Khurana as a Director of the Company. Accordingly, appointment of Mr. N. K. Khurana as a Director and Whole time Director has been included as Special Business in the Notice calling the forthcoming Annual General Meeting of the Company.
Remuneration and other details of the Key Managerial Personnel for the Financial Year ended 31st March, 2017 are mentioned in the Extracts of the Annual Return in Form MGT-9 which is enclosed as Annexure - 3 and forms part of this Report.
INDEPENDENT DIRECTOR''S DECLARATION
The Declarations required under Section 149(7) of the Act from the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act, was duly received by the Company.
CORPORATE GOVERNANCE
The Company has complied with the Corporate Governance requirements under the Act and as stipulated under Regulations 17 to 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations) read with schedule II thereof. A separate report on Corporate Governance in terms of Regulation 34(3) read with Clause C of Schedule V of the SEBI Listing Regulations along with certificate from the Practicing Company Secretary confirming the compliance, is annexed as Annexure-1 and forms part of this Report.
DETAILS OF BOARD MEETINGS
The Board of Directors met 7 (Seven) times during the financial year 2016-2017 on various dates as given here-in-below:
Sl No. |
Date of the meeting |
No. of Directors attended the meeting |
1. |
1st April, 2016 |
7 |
2. |
30th May, 2016 |
7 |
3. |
3rd August, 2016 |
7 |
4. |
19th September, 2016 |
7 |
5. |
11th November, 2016 |
7 |
6. |
31st January, 2017 |
7 |
7. |
29th March, 2017 |
7 |
Further details on Board of Directors are provided in the Corporate Governance Report.
COMMITTEES OF THE BOARD a. Audit Committee
The Board has constituted the Audit Committee which comprises of the following Directors:
Sl. No. |
Name |
Category of Director |
Chairman/ Members |
1. |
Dr. S. S. Baijal |
Non-Executive-Independent |
Chairman |
2. |
Mr. H. M. Parekh |
Non-Executive-Independent |
Member |
3. |
Mr. V. P. Agarwal |
Non-Executive-Independent |
Member |
4. |
Ms.Nayantara Palchoudhuri |
Non-Executive Non-Independent |
Member |
During the year under review, the Board accepted all the recommendations made by the Audit Committee.
Further details of Audit Committee related to dates of Meeting held during the year, attendance of Directors etc. are given separately in the attached Corporate Governance Report. b. Nomination and Remuneration Committee
The Nomination and Remuneration Committee of the Board has been constituted by the following Directors:
Sl. No. |
Name |
Category of Director |
Chairman/ Members |
1. |
Mr. H. M. Parekh |
Non-Executive-Independent |
Chairman |
2. |
Dr. S.S. Baijal |
Non-Executive-Independent |
Member |
3. |
Mr. V. P Agarwal |
Non-Executive-Independent |
Member |
Further details of Nomination and Remuneration Committee related to dates of Meeting held during the year, attendance of Directors etc. are given separately in the attached Corporate Governance Report. c. Corporate Social Responsibility Committee
The Corporate Social Responsibility Committee of the Board has been constituted by the following Directors:
Sl. No. |
Name |
Chairman/ Members |
1. |
Dr. S. S. Baijal |
Chairman |
2. |
Mr. V. P Agarwal |
Member |
3. |
Mr. C. S. Bedi |
Member |
Further details of Corporate Social Responsibility Committee related to dates of Meeting held during the year, attendance of Directors etc. are given separately in the attached Corporate Governance Report.
The Committee had framed the CSR Policy and the same was approved by the Board at its Meeting held on 6th August, 2014. The CSR Policy is available on Company''s website at www.rossellindia.com. of Section 135 (5) of the Act read with the Company''s CSR Policy. The amount The CSR budget for the financial year 2016-2017 was prepared in accordance with the provisions so budgeted was fully spent on or before 31st March, 2017, the detailed report on CSR Activities/ Initiatives is enclosed as Annexure-2 which forms part of this Report.
d. Stakeholders'' Relationship Committee
The Stakeholders Relationship Committee of the Board has been constituted by the following Directors:
Sl. No. |
Name |
Chairman/ Members |
1. |
Mr. H. M. Parekh |
Chairman |
2. |
Mr. V. P Agarwal |
Member |
3. |
Mr. C. S. Bedi |
Member |
Further details of Stakeholders Relationship Committee related to dates of Meeting held during the year, attendance of Directors etc. are given separately in the attached Corporate Governance Report.
e. Risk Management Committee
Your Board has voluntarily constituted the Risk Management Committee in the manner prescribed in Regulation 21 of the SEBI Listing Regulations consisting of the following Directors:
Sl. No. |
Name |
Chairman/ Members |
1. |
Mr. H. M. Parekh |
Chairman |
2. |
Ms. Nayantara Palchoudhuri |
Member |
3. |
Mr. C. S. Bedi |
Member |
Further details of Risk Management Committee related to dates of Meeting held during the year, attendance of Directors etc. are given separately in the attached Corporate Governance Report.
ANNUAL PERFORMANCE EVALUATION
In terms of the relevant provisions of the Act and SEBI Listing Regulations, the Board had carried out an annual evaluation of its own performance and that of its Committees as well as individual Directors.
A structured questionnaire was prepared in terms of the criteria specified by SEBI vide its Circular No. SEBI/HO/CFD/CMD/ CIR/P/2017/004 dated 5th January, 2017. The Questionnaire for the Evaluation of the Board as a whole, the Questionnaire for the Evaluation of the Committees of the Board and the Questionnaire for the Evaluation of Individual Director were circulated to all the Directors and feedback obtained. After taking into consideration different views expressed by the Directors, covering various aspects of the Board''s functioning such as adequacy of the Board''s composition and structure, Board''s culture, execution and performance of specific duties, obligations and governance, effectiveness of Board processes etc., the evaluation of the Board was conducted.
The performance of the Committees was evaluated by the Board based on the aforesaid Questionnaire, seeking inputs from the Committee Members on the basis of the criteria such as the composition of Committees, effectiveness of Committee Meetings, etc.
The Board and the Nomination and Remuneration Committee reviewed the performance of the individual Directors on the basis of the criteria as mentioned above. In addition, the Executive Chairman was also evaluated on the key aspects of his role.
The Independent Directors also carried out the Performance Evaluation in terms of Clause VII (3) of Schedule IV to the Act read with Regulation 25(3) of the SEBI Listing Regulations at their separate Meeting held on 31st January, 2017.
EXTRACT OF ANNUAL RETURN
Pursuant to section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of Annual Return is given as Annexure- 3.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
Pursuant to Section 177(9) of the Act read with Regulation 22 of the SEBI Listing Regulations, your Company has duly established Vigil Mechanism for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of Company''s Code of Conducts or ethics Policy. The Audit Committee of the Board monitors and oversee the vigil mechanism.
The detailed Policy related to this vigil mechanism is available in the Company''s website at www.rossellindia.com.
DIRECTORS'' RESPONSIBILITY STATEMENT
The Board of Directors acknowledges the responsibilities for ensuring compliance with the provisions of Section 134(3) (c) read with Section 134(5) of the Act and confirm that:
(a) In the preparation of the Annual Accounts for Financial Year ended 31st March, 2017, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any;
(b) the Directors had selected such accounting policies and applied them 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 for the Financial Year ended 31st March, 2017, and of the Profit and Loss of the Company for that period;
(c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) The Directors had prepared the Annual Accounts on a going concern basis;
(e) the Directors, had laid down Internal Financial Controls to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and
(f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
STATUTORY AUDITORS, THEIR REPORT AND NOTES TO FINANCIAL STATEMENTS
In terms of Section 139(2) of the Act, M/s. S. S. Kothari & Co., Chartered Accountants, existing Statutory Auditors of the Company have completed their tenure of two terms of five consecutive years at the commencement of the Act on 1st April, 2014 and an additional period of 3 years as stipulated under third proviso of Section 139(2) read with Rule 6 of the Companies (Audit and Auditors) Rules, 2014. Accordingly, they will vacate the office at the conclusion of the forthcoming Annual General Meeting.
In view of above, the Company is proposing to appoint M/s. Khandelwal Ray & Co. Chartered Accountants, Kolkata (Firm Regn. No. 302035E) as the Statutory Auditors for a period of 5 years commencing from the conclusion of the 23rd Annual General Meeting till the conclusion of the 28th Annual General Meeting. M/s. Khandelwal Ray & Co. have given their consent to the said appointment and confirmed that their appointment, if made, would be within the limits mentioned under Section 141(3) (g) of the Act.
The Audit Committee and the Board recommend the appointment of M/s. Khandelwal Ray & Co. Chartered Accountants, as Statutory Auditors of the Company for a period of 5 years commencing from the conclusion of the 23rd Annual General Meeting till the conclusion of the 28th Annual General Meeting.
The Board places on record its appreciation for the contribution of M/s. S. S. Kothari & Co., Chartered Accountants during their tenure as the Statutory Auditors of your Company.
The report of the Statutory Auditors during the year under review does not contain any qualification, reservation or adverse remark or disclaimer, which requires any further comments or explanations in this report. The Notes to the Financial Statements are also self-explanatory and do not call for any further comments.
COST AUDIT
Pursuant to Section 148 of the Act read with Rule 4 of the Companies (Cost Records and Audit) Amendment Rules, 2014, your Company is required to have the audit of its cost accounting records relating to products manufactured by Rossell Tea Division and Rossell Techsys Division. M/s. Shome & Banerjee, Cost Accountants, conducted this audit for the previous Financial Year ended 31st March, 2016 and submitted their report to the Central Government on 2nd September, 2016.
In terms of Section 148(3) of the Act read with the Companies (Cost Records and Audit) Rules, 2014, the Board of Directors of the Company has, on the recommendation of the Audit Committee, re-appointed M/s. Shome & Banerjee, Cost Accountants as the Cost Auditor of the Company for the Financial Year 2017-2018.
Their remuneration is required to be ratified by the Members in the ensuing Annual General Meeting.
SECRETARIAL AUDIT
In terms of Section 204 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed M/s. A.K. Labh & Co., Practicing Company Secretaries as the Secretarial Auditors of the Company for the Financial Year 2016-2017. The report of the Secretarial Auditors in Form MR-3 is enclosed as Annexure-4 to this report.
The report confirms that the Company had complied with the statutory provisions listed under Form MR-3 and the Company also has proper Board Processes and Compliance Mechanism. The Report does not contain any qualification, reservation or adverse remark or disclaimer, which requires any further comments or explanations in this report.
RELATED PARTY TRANSACTIONS
All the Related Party Transactions are entered on arm''s length basis and are in compliance with the applicable provisions of the Act and SEBI Listing Regulations. There are no materially significant Related Party Transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the Company at large. All Related Party Transactions are presented to the Audit Committee and the Board, if required for approval. Omnibus Approval is obtained for the transactions, which are foreseen and repetitive in nature. Policy on Related Party Transactions, as approved by the Board is uploaded on the Company''s website at the web link: http://www.rossellindia.com/financialresult/Policy%20on%20Related%20 Party%20Transactions.pdf.
Necessary disclosure of Related Party Transactions in terms of Clause (h) of sub-section (3) of Section 134 of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is given in Form AOC-2 as Annexure-5 to this Report.
LOANS, GUARANTEES OR INVESTMENTS
Your Company has not provided any Guarantee for any party. During the year under review, neither any inter-corporate loan was granted by the Company, nor any investment made, in terms of the provisions of Section 186 of the Act. Particulars of existing Investments made by the Company, as required to be disclosed in terms of Section 134 (1) (g) of the Act is given in the accompanying Financial Statement (Note No. L).
STATEMENTS OF SUBSIDIARIES / JOINT VENTURES
The wholly owned subsidiary, CAE Rossell India Limited, did not carry out any activity during the year under review. Your Company has a Joint Venture entity named RV Enterprises Pte. Ltd., Singapore in which Company holds 26% Equity Share.
Accompanying Consolidated Financial Statement contains details financials of the Subsidiary / Joint Venture.
RISK MANAGEMENT POLICY
Your Company''s business faces various risks - strategic as well as operational in respect of all its Divisions. The Company has an adequate risk management system, which takes care of identification, assessment and review of risks as well as their mitigation plans put in place by the respective risk owners. The risks which were being addressed by the Company during the year under review included risks relating to market conditions, environmental, information technology etc. The Company has developed and implemented the Risk Management Policy with an objective to provide a more structured framework for proactive management of all risks related to the business of the Company and to make it more certain that growth and earnings targets as well as strategic objectives are met.
The major risks and concerns being faced by various business segments of the Company are discussed in report on Management Discussion and Analysis, forming part of this Report.
Your Company has constituted Risk Management Committee of the Board in the manner stated in Regulation 21 of the SEBI Listing Regulations. The Risk Management Committee reviews the risk assessment and minimization procedure in the light of the Risk Management Policy of the Company.
In the opinion of the Board, there is no such element of risk which may threaten the present existence of the Company. REMUNERATION POLICY
The Company follows a policy on Remuneration of Directors and Senior Management Employees. The policy is approved by the Nomination and Remuneration Committee and the Board. Further details on the same have been given in the Report on Corporate Governance, which forms part of this Report.
The required disclosure under Section 197 (12) of the Act read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given as Annexure- 6 to this Report.
HUMAN RESOURCES
Your Company treats its "human resources" as one of the most important assets. The Management of the Company lays continuous focus on human resources, who are trained and updated on various issues from time to time to attain the required standards. The correct recruitment practices are in place to attract the best technical manpower to ensure that the Company maintains its competitive position with respect to execution. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis.
Industrial relations at all the units remain satisfactory, your Company employed 6,278 personnel on its roll as on 31st March, 2017.
For the year under review, the particulars of the Executive Chairman, who was in receipt of remuneration, which in the aggregate was not less than rupees one crore two lakh and employed throughout the financial year is given in Annexure- 7 to this Report. There was no other employee in this category. Thus, particulars of other top 9 employees are not required to be disclosed.
The Company did not have any employee on its payroll, who:
a. if employed for a part of the Financial Year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than Eight Lakh Fifty Thousand rupees per month;
b. if employed throughout the Financial Year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the Managing Director or Whole-Time Director or Manager and holds by himself or along with his spouse and dependent children, not less than two percent of the Equity Shares of the Company.
The total remuneration drawn by the Managing Directors and Key Managerial Personnel forms part of Extracts from the Annual Return in Form MGT-9. Mr. H. M. Gupta, Executive Chairman in his capacity as the Chairman and Managing Director of BMG Enterprises Ltd., the Holding Company drew a remuneration of Rs. 6.00 lakhs as consolidated salary pursuant to Section 197 (14) of the Act.
AWARDS AND RECOGNITION
Your Directors are pleased to advise that during the year under review, Rossell Techsys Division of the Company received the following awards:
> Emerging Company of the Year 2017 by the International Aerospace Magazine (SAP Media).
> Excellence in Aerospace Indigenization - 2016 by SIATI (Society for Indian Aerospace Technologies and Industries)
> Boeing Performance Excellence Award (BPEA)-2016 - Silver Category.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
There is no significant or material order passed by any Regulators or Courts or Tribunals impacting the going concern status and Companyâs operations in future.
INTERNAL FINANCIAL CONTROLS
Your Company has adequate Internal Financial Control System at all levels of Management and they are reviewed from time to time. The Internal Audit is carried out in house as well as by firms of Chartered Accountants for all the Divisions of the Company. The Audit Committee of the Board looks into Auditor''s review, which is deliberated upon and corrective action taken, wherever required.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
In compliance with the provisions of Section 124 (5) of the Act read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules 2016, the following amounts were transferred to Investor Education and Protection Fund of the Central Government during 2016-2017:
a) A sum of Rs. 1,22,881 being the dividend lying unclaimed out of the dividend declared by the Company for the Financial Year 2008-2009 were transferred to the IEPF on 3rd September, 2016.
b) A sum of Rs. 64,384 being the dividend lying unclaimed out of the interim dividend declared by the Company for the Financial Year 2009-2010 were transferred to IEPF on 15th December, 2016.
Equity Shares corresponding to the dividend unclaimed for seven consecutive years will also be transferred to the IEPF Suspense Account in terms of Section 124 and 125 of the Act read with Rule 6 of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016. Further details in this respect are given separately in the attached Corporate Governance Report marked as Annexure-1 of this Report.
DEPOSITS
Your Company has not accepted any deposits from public in terms of provisions contained in Chapter V of the Act, or in terms of corresponding provisions of the Companies Act, 1956.
MANAGEMENT DISCUSSION AND ANALYSIS
A Report on the Management Discussion and Analysis concerning all the business segments of the Company is given as Annexure-8 to this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
(a) Conservation of energy
(i) |
the steps taken or conservation of energy |
impact on |
Machinery up-gradation and replacement of low performing equipment is an ongoing process at the Tea factories of Rossell Tea Division, with a view to conserve |
|||
|
|
|
Fuel, Electrical Energy and other resources. Initiatives undertaken during the |
|||
|
|
|
Financial Year 2016-17 are as follows; |
|||
|
|
|
a) |
Replacement of old and obsolete Diesel Generators of 365 KVA and 160 KVA respectively has been done with higher capacity sets. The new sets have the ability of better capacity utilization and improved units per Liter of fuel. |
||
|
|
|
b) |
Replacement of old inefficient Axial Flow Fans attached to Energy Efficient Motors for higher volumes of air availability with reduced energy consumption has been done at one of the factories. This would be taken up in other factories in phases. |
||
|
|
|
c) |
Installation of improved Irrigation facility with underground piping and voltage regulators for full utilization of the sprinklers for greater coverage of command area. |
||
|
|
|
d) |
Installation of wind propelled ventilators on factory roof which helps in maintaining the quality of produce and also provide better working environment inside the factory. |
||
|
|
e) Installation of improved gas burners for Dryers at 2 factories which has the ability to operate at low pressures keeping constant temperature with inbuilt safety of operation. f) Installation of static Power Capacitors to improve the Plant Power Factor thereby reduce losses incurred in the State Board Power Supply. Rossell Hospitality Division has taken the following initiatives since the last few years: a) Great deal of focus on OEE (Overall Equipment Efficiency) to optimize productivity. b) Driving sustainable development programme for water and power. c) Replaced conventional lighting with LED lights which are not only brighter but also save energy and are Eco friendly. d) Waste water from RO is saved and stored for flushing and cleaning. |
||||
(ii) |
the steps taken by the Company for utilizing alternate sources of energy |
Rossell Tea Division has arranged for alternate source of energy provision for withering and drying of teas by supply of Natural Gas at one of the Factories. This would replace the use of solid fuel thereby reduction of cost. Study of the possibility of using Solar power at two Estates of Rossell Tea Division continues. Rossell Techsys Division is constrained to adopt alternative source of energy, as it is currently operating from leased premises in Bangalore. The owners of the premises are not motivated enough to invest in these alternative sources of energy. |
||||
(iii) |
the capital investment on energy conservation equipments |
All the equipment and machinery are being acquired with energy conservation in view. Hence the extent of investment cannot be separately quantified. However, the capital investment during the year under review on acquisition of energy conservation equipment in particular was Rs. 79.78 Lakhs in Rossell Tea. |
||||
(b) Technology absorption |
||||||
(i) |
the efforts made towards technology absorption |
In-house seminars, discussions with experts and training programme were held for innovative ideas of production and to update the staff. The concerned staff members are also sponsored to attain various seminars and workshops for updating themselves in various technological advancements concerning the functioning of the Company. |
||||
(ii) |
the benefits derived like product improvement, cost reduction, product development or import substitution |
There has been an overall improvement in quality of product and labour productivity, which results in economy in cost. |
||||
(iii) |
in case of imported technology (imported during the last three years reckoned from the beginning of the Financial Year)- |
Not Applicable |
||||
(a) the details of technology imported |
||||||
(b) the year of import; |
||||||
(c) whether the technology been fully absorbed |
||||||
(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof |
||||||
(iv) |
the expenditure incurred on Research and Development |
The Company is a Member of Tea Research Association, Kolkata, which is registered under Sec. 35 (1) (ii) of the Income tax Act, 1961. A contribution of Rs. 14.59 lakhs during the year towards subscription by Rossell Tea Division. All the Research and Development work done in Rossell Techsys Division is customer specific and for their exclusive purpose. Thus the cost thereof is absorbed by the respective project cost and not required to be accumulated separately. |
||||
(c) Foreign Exchange Earnings and Outgo
During the year, the total foreign exchange used was Rs. 104.15 lakhs on account of various expenses and Rs. 2,619.99 lakhs for imports of raw materials, stores as well as capital goods. The total foreign exchange earned was Rs. 6,409.17 lakhs (Note No. 10 to the Financial Statements)
MATERIAL CHANGES AND COMMITMENTS
You Directors confirm that there are no material changes and commitments, affecting the financial position of the Company which has occurred between the end of the Financial Year of the Company and the date of this Report.
ACKNOWLEDGEMENT
Your Directors place on record their appreciation for employees at all levels, who have contributed to the growth and performance of your Company.
Your Directors also thank the business associates, shareholders and other stakeholders of the Company for their continued support.
By Order of the Board
N K Khurana
Place: Delhi Chief Financial Officer
Date: 25th May, 2017 - cum-Company Secretary
Mar 31, 2016
Dear Members,
The Directors have pleasure in presenting their Twenty Second Annual Report together with the Audited Accounts for the year ended 31st March, 2016.
FINANCIAL SUMMARY HIGHLIGHTS
Rs. in Lakhs
Particulars |
Year ended |
Year ended |
31st March 2016 |
31st March 2015 |
|
Profit before finance cost and Depreciation |
2,850.11 |
2,255.81 |
Less : Finance Cost |
691.48 |
724.45 |
Profit before Depreciation |
2,158.63 |
1,531.36 |
Less : Depreciation |
953.01 |
956.41 |
Profit before Exceptional Items |
1,205.62 |
574.95 |
Exceptional Items |
â |
â |
Profit before Taxation |
1,205.62 |
574.95 |
Less : Provision for current Taxation |
||
Current year |
300.00 |
170.00 |
Earlier Years |
100.00 |
â |
Deferred Taxation adjustment |
(151.84) |
4.48 |
Profit After Taxation |
957.46 |
400.47 |
Add : Balance brought forward |
450.36 |
370.06 |
Profit available for appropriation |
1,407.82 |
770.53 |
Appropriated as under : |
||
General Reserve |
700.00 |
100.00 |
Dividend on Equity Shares |
||
Interim Dividend @ 25% |
183.48 |
â |
Final Dividend Proposed Nil (2015-25%) |
â |
183.48 |
Tax on Dividend |
37.35 |
36.69 |
Balance carried forward |
486.99 |
450.36 |
1,407.82 |
770.53 |
SHARE CAPITAL
During the year under review:
a. No Equity shares have been issued with differential voting rights. Hence, no disclosure is required in terms of Rule 4 (4) of Companies (Share Capital and Debentures) Rules, 2014.
b. No issue of Sweat Equity Share has been made. Hence, no disclosure is required in terms of Rule 8 (13) of Companies (Share Capital and Debentures) Rules, 2014.
c. There was no issue of Employee Stock Option. Hence, no disclosure is required in terms of Rule 12 (9) of Companies (Share Capital and Debentures) Rules, 2014.
d. There was no provision made by the Company for any money for purchase of its own shares by employees or by trustees for the benefit of employees. Hence, no disclosure is required in terms of Rule 16 (4) of Companies (Share Capital and Debentures) Rules, 2014.
e. The issued, subscribed and paid up share capital of the Company as on 1st April, 2015 at Rs. 733.93 lakhs divided into 3,66,96,475 of Rs. 2 each remained unchanged as on 31st March, 2016.
APPROPRIATION OF PROFIT AFTER TAX FOR TRANSFER TO RESERVES
Your Directors proposed to transfer a sum of Rs. 700 lakhs to General Reserve before declaration of any dividend in terms of first proviso to Sec. 123(1) of the Companies Act, 2013.
DIVIDEND
The Company has paid an interim dividend of Rs. 0.50 per Equity Share of Rs. 2 each during the year under review. With a view to conserve resources for the future requirements, your Directors have not recommended any final dividend for approval of the Members. Therefore, the interim dividend of Rs. 0.50 per Equity Share of Rs. 2 each, as declared by the Board at their Meeting held on 16th March, 2016 is the total dividend on the Equity Shares of the Company for the financial year ended 31st March, 2016.
THE STATE OF COMPANY''S AFFAIRS REVENUE
The gross revenue from operations of your Company including sale of tea, avionics equipment, receipts from technical and support services and sale of food and beverages by Kebab Xpress was higher at Rs. 15,751.98 lakhs for the year under review as against Rs. 14,049.96 lakhs in the previous year. The Company has also sold for the first time, Black Pepper worth Rs. 4.35 lakhs in the year under review.
PERFORMANCE Rossell Tea
The Directors view with great satisfaction the performance of Rossell Tea Division for the year 2015-2016. The Division continued to produce teas which achieved once again, the highest quality and price standards in the tea industry, in keeping with its past performance. Our teas continued to be a benchmark for top quality teas out of Assam be it orthodox or CTC.
The year 2015 began on the back of very poor winter rains, with the dry period extending from October 2014 - March 2015. Cropping therefore, was poor in the first quarter. A poor June 2015 crop translated into smaller second flush offers for export to the continent. Thereafter due to heavy rains on some estates and poor precipitation on others, crops fell away through to November. Earlier in the year Romai T.E. was hit by a severe hailstorm and the crop loss was ascertained at 1.30 lakh kgs. i.e. 21% of the estate crop.
Between October 2015 and March 2016 tea growing areas in Assam, with few exceptions had useful winter rains. This resulted in a near record crop in March 2016, which to an extent salvaged the crop situation and the Division finished the year 3.87% i.e. 1.89 lakh kgs. ahead of 2014-2015. This is a satisfactory situation given Romai T.E.''s loss due to hailstorm of 1.30 lakh kgs. Overall the Division''s improved performance on the crop front, was foreshadowed by the crop loss due to hail damage at Romai.
The start of the season saw large offerings prior to the implementation of the Plant Protection Code. These volumes were carried into the new season depressing the market. Thereafter, the market quickly segmented itself and the better produce of CTC teas of the new season met with strong demand and were clearly rewarded. The orthodox market, where the carry-forward stock was negligible at the auction centers, started on a subdued note, owing to high stock in the Middle Eastern countries. As the season progressed, we continued to see a strong demand and better price realization for quality CTC teas, but reduced demand for quality orthodox whole leaf grades in particular, which sold at lower levels than 2014. The Euro being weaker against previous year, also affected the export price realization of orthodox category to the European markets. Year 2015 also saw production of about 5.00 million kgs. extra orthodox tea in Assam, increasing the availability and making the competition more severe than other years.
However, despite of all these odds, our orthodox average for the period under review is Rs. 261.06 against Rs. 249.20 per kg. of last year and the Assam district orthodox average of Rs. 219.61 clearly indicating Rossell''s capability of producing premium quality of orthodox backed with strong marketing abilities. In the CTC category, our average for the same period was Rs.221.17 against Rs.196.83 per kg. of last year and Assam district average of Rs.153.76 per kg., which is indicative of the fact that your Company produced some excellent quality CTC, as well, during 2015, which was amply rewarded by the buyers.
On the export front, the Division performed under several challenges, owing to availability of more quantity of orthodox. The Euro was weak during the quality period and thereafter, there was very slow opening of LCs from Iran as also delayed payments. This Division constantly fought the odds and finished the year with 1.48 million kgs. of export, which is marginally behind last year''s figure of 1.51 million kgs. However, our quantity of exports increased to the quality conscious markets in Germany, UK and USA, and we have initiated shipments to a new buyer in UAE. The marginal shortfall is owing to slightly lower shipments to Iran. The price realization, however, increased by Rs. 12.04 per kg. over the previous year.
At Rossell Tea, as in the past, we continued to maintain a judicious product-mix. This allowed each estate to perform to its core competence and to sustain the profitability. Our policy of prudent cost management and productivity enhancement despite lower crop, has helped us to negate the inflationary pressures.
Aided by erratic weather, pest activity was heightened through the year and due to climate change and continuing deforestation along the tea belt, this has become a major cost sink. Climate change poses its unique challenges to the cultivation of tea, in as much increasing temperatures and declining water tables during the dry months majorly affect crop. Erratic rainfall in the monsoon continues to lead to increased flooding as well as water logging and loss of quality at times.
The Company has during the year continued to strengthen its assets through up gradation. Investments in the areas of worker housing and hygiene saw a further increase. Modernization and up gradation in factories continued in this financial year 2015-2016. The Company entered its 15th year of uprooting and replanting activity. This is a part of a long term strategy to strengthen the tea fields and improve the quality quotient in the field. Further enhancement of irrigation assets was undertaken at Dikom and Nokhroy T.Es.
Aviation Products and Services
Aerotech Services continues to provide techno-logistic support to global Original Equipment Manufacturers (OEMs) for their equipment fitted on various Indian platforms. During the year under review we were approached by an existing OEM for providing logistic support on another project and the same has been contracted for a period of 5 years. For the contracts signed in recent years, our Field Service Engineers (FSEs) have been trained by the OEMs and are performing well. The Division continues to enhance its business to the satisfaction of the OEMs and customers.
In the financial year 2015-2016, the Rossell Techsys Division enhanced its overseas business and strengthened its relationship with its overseas customers. It expended resources, finances and energies to increase the spread of business across multiple platforms. The Division continues its strategy to gain foreign, export oriented business and to acquire domestic business only where it would gain access to skill building avenues that could thereafter, be utilized in gaining more foreign OEM business. The Division revenues increased by over 123% as compared to the FY 2014-2015 and order booking were substantially higher at 62%. There were also a lot of gains in intangible terms. The Division has now firmly established itself with respect to repute, capability, capacity and reliability in the wire harness and looming competency.
The Division is certified to AS:9100, ISO:9001, ISO:14001, ISO:27001 and OHSAS:18001. The Division is also CEMILAC approved. It has achieved Gold rating both on quality and delivery with its premiere US based A&D customer Boeing for the last two years and also won the ''Supplier of the Year'' award in the Pathfinder Category out of more than 13,000 active suppliers worldwide.
Rossell Techsys has established itself as an Indian supplier that is truly global, with its quality, timeliness, people, processes and infrastructure credentials.
Rossell Hospitality
During the year under review, Kebab Xpress is getting a better footprint in the market and its brand recognition is being felt. The Division''s Same Stores Sales (SSS), year on year, have grown by substantially. The brand ''Kebab Xpress'' is strengthening its digital presence by completely revamping the brand website and engaging the customers on social media platforms with innovative, relevant and engaging content. As on 31st March, 2016 Kebab Xpress has its 10 operating outlets in NCR as compared to 9 outlets that of the previous year.
Consistency in quality, excellent service, conducive ambience and high level of hygiene at the outlets are well appreciated by the customers. Thus, Sales during the year was Rs. 1,150.85 lakhs against Rs. 878.19 lakhs in the previous year, indicating the growth of 31.05%.
PROSPECTS Rossell Tea
Most tea growing areas had favourable growing conditions for the first three months of 2016. This has resulted in Kenyan crop for the first two months itself being higher by 28.35 million kgs. Sri Lankan crop for January and February are at par with last year.
We expect price levels to settle down by early June, 2016 and prospects for quality teas will be good. ''Quality'' will continue to be rewarded and the quality segmentation seen last year will continue. The estates continue to perform to their quality potential, be it CTC or orthodox. Our performance in fiscal 2015-2016 indicates that we are well armed to outperform the market and retain our standing as one of the most profitable enterprises in the Assam tea industry.
Exports will continue to be a key area despite 2015 being a highly competitive and difficult year. While strengthening our traditional markets, we are also exploring new markets with the objective of increasing value and volumes.
There are of course two concerns emerging:
i) Tea growing being an agro horticultural activity, needs stable climate conditions i.e. temperatures and well distributed rainfall. This, as has been reported earlier, has now been vitiated by climate change and hence these concerns exist.
ii) Increase in cost of production is also an emerging concern. Labour wages and cost of other inputs such as food grains, could put pressure on performance, unless of course higher prices are forthcoming.
These concerns, nonetheless, are seen as an opportunity and a challenge to perform better, much like this Division has done in the years gone by.
Aviation Products and Services
Aerotech Services is currently executing five techno-logistic product support contracts. The Government of India has accorded highest priority for "Make in India" initiative, which focuses on making India a global manufacturing hub.
In the coming years, with greater participation of Indian industry, manufacturing defense equipment in India, opportunities will also arise for product maintenance support, repair and overhaul of the equipment.
Rossell Techsys Division has created a niche for itself in the wire harness competency, by virtue of its quality credentials in executing orders from foreign OEMs. The Division is projected to experience enhanced traction in its wire harness competency due to its association with companies like Boeing, the Division should see significant increase in revenue in years 2016-2017 onwards. The number of RFPs being received from foreign OEMs has increased significantly with a success rate of 75%. The Division is attempting to improve its prospects on adjacent business opportunities such as electrical panels.
The growth prospects have resulted in the Division adding additional space, the total now being approximately 75,000 square feet. Rossell Hospitality
The Division intends operating a total of 30 outlets in NCR in the financial year 2016-2017 with 2 outlets already made operational as of now and target to achieve at least double the turnover.
CHANGE IN NATURE OF BUSINESS, IF ANY
There has been no change in any business and all the Divisions of the Company continue to concentrate on their own business with growth plans in short to medium terms.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The tenure of office of Mr. C. S. Bedi, Managing Director, will expire on 30th September, 2016. Accordingly, the Board on recommendation of the Nomination and Remuneration Committee, at its meeting held on 30th May, 2016 has re-appointed Mr. C.
S. Bedi as Managing Director for a further period of 3 years from 1st October, 2016 to 30th September, 2019, subject to approval by the Members of the Company by way of Special Resolution, in the ensuing 22nd Annual General Meeting in terms of Section 188, 196, 197 read with Sec I and Sec II, Part II of Schedule V and other applicable provisions, if any, of the Companies Act, 2013 and in accordance with the Policy of the Company on Related Party Transactions.
The following persons continued as Key Managerial Personnel of the Company in compliance with the provisions of Section 203 of the Companies Act, 2013 :
a) Mr. H. M. Gupta - Chief Executive Officer (CEO)
b) Mr. C. S. Bedi - Managing Director, and
c) Mr. N. K. Khurana - Chief Financial Officer-cum- Company Secretary
Remuneration and other details of the Key Managerial Personnel for the Financial Year ended 31st March, 2016 are mentioned in the Extracts of the Annual Return in Form MGT-9 which is enclosed as Annexure - 3 and forms part of this Report.
INDEPENDENT DIRECTOR''S DECLARATION
The Declarations required under Section 149(7) of the Companies Act, 2013 from the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013, was duly received by the Company.
CORPORATE GOVERNANCE
The Company has complied with the Corporate Governance requirements under the Companies Act, 2013 and as stipulated in Clause 49 of the Listing Agreement till 30th November, 2015 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 from 1st December, 2015 onwards.
A separate report on Corporate Governance in terms of Regulation 34(3) read with clause C of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, along with certificate from the Practicing Company Secretary confirming the compliance, is annexed as Annexure-1 and forms part of this Report.
DETAILS OF BOARD MEETINGS
The Board of Directors met 5 (five) times during the financial year 2015-2016 on various dates as given here-in-below:
Sl No. |
Date of the meeting |
No. of Directors attended the meeting |
1. |
29th May, 2015 |
6 |
2. |
30th July, 2015 |
6 |
3. |
2nd November, 2015 |
6 |
4. |
10th February, 2016 |
6 |
5. |
16th March, 2016 |
6 |
Further details on Board of Directors are provided in the Corporate Governance Report. COMMITTEES OF THE BOARD a. Audit Committee
The Board has constituted the Audit Committee which comprises of the following Directors:
Sl. No. |
Name |
Category of Director |
Chairman/ Members |
1. |
Dr. S. S. Baijal |
Non-Executive-Independent |
Chairman |
2. |
Mr. H. M. Parekh |
Non-Executive-Independent |
Member |
3. |
Mr. V. P. Agarwal |
Non-Executive-Independent |
Member |
4. |
Ms. Nayantara Palchoudhuri |
Non-Executive Non-Independent |
Member |
During the year under review, the Board has accepted all the recommendations made by the Audit Committee.
Further details of Audit Committee related to dates of Meeting held during the year, attendance of Directors etc. are given separately in the attached Corporate Governance Report. b. Nomination and Remuneration Committee
The Nomination and Remuneration Committee of the Board has been constituted by the following Directors:
Sl. No. |
Name |
Category of Director |
Chairman/ Members |
1. |
Mr. H. M. Parekh |
Non-Executive-Independent |
Chairman |
2. |
Dr. S. S. Baijal |
Non-Executive-Independent |
Member |
3. |
Mr. V. P Agarwal |
Non-Executive-Independent |
Member |
Further details of Nomination and Remuneration Committee related to dates of Meeting held during the year, attendance of Directors etc. are given separately in the attached Corporate Governance Report. c. Corporate Social Responsibility Committee
The Corporate Social Responsibility Committee of the Board has been constituted by the following Directors:
Sl. No. |
Name |
Chairman/ Members |
1. |
Dr. S. S. Baijal |
Chairman |
2. |
Mr. V. P Agarwal |
Member |
3. |
MR. C. S. Bedi |
Member |
Further details of Corporate Social Responsibility Committee related to dates of Meeting held during the year, attendance of Directors etc. are given separately in the attached Corporate Governance Report.
The Committee had framed the CSR policy and the same was approved by the Board at its Meeting held on 6th August, 2014. The CSR Policy is available on Company''s website at www.rossellindia.com. The CSR budget for the financial year 2015-2016 was prepared in accordance with the provisions of Section 135 (5) of the Companies Act, 2013 read with the Company''s CSR Policy. The amount, so budgeted, was fully spent on or before 31st March, 2016. The detailed report on CSR Activities/ Initiatives is enclosed as Annexure-2 which forms part of this Report.
d. Stakeholders'' Relationship Committee
The Stakeholders Relationship Committee of the Board has been constituted by the following Directors:
Sl. No. |
Name |
Chairman/ Members |
1. |
Mr. H. M. Parekh |
Chairman |
2. |
Mr. V. P Agarwal |
Member |
3. |
MR. C. S. Bedi |
Member |
Further details of Stakeholders Relationship Committee related to dates of Meeting held during the year, attendance of Directors etc. are given separately in the attached Corporate Governance Report.
e. Risk Management Committee
Your Board at its meeting dated 14th November, 2014, has constituted Risk Management Committee of the Board consisting of the following Directors:
Sl. No. |
Name |
Chairman/ Members |
1. |
Mr. H. M. Parekh |
Chairman |
2. |
Ms. Nayantara Palchoudhuri |
Member |
3. |
MR. C. S. Bedi |
Member |
Further details of Risk Management Committee related to dates of Meeting held during the year, attendance of Directors etc. are given separately in the attached Corporate Governance Report.
ANNUAL PERFORMANCE EVALUATION
In terms of the relevant provisions of the Companies Act 2013, and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board had carried out an annual evaluation of its own performance and that of its Committees as well as individual Directors.
A structured questionnaire was prepared after taking into consideration different views received from the Directors, covering various aspects of the Board''s functioning such as adequacy of the Board''s composition and structure, Board''s culture, execution and performance of specific duties, obligations and governance, effectiveness of Board processes etc. The performance of the Committees was evaluated by the Board after seeking inputs from the Committee Members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.
The Board and the Nomination and Remuneration Committee reviewed the performance of the individual Directors on the basis of the criteria such as the contribution of the individual Director to the Board and committee meetings like attendance in the meeting, preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Executive Chairman was also evaluated on the key aspects of his role.
The Independent Directors also carried out the Performance Evaluation in terms of Clause VII (3) (c) of Schedule IV to the Companies Act, 2013 read with Regulation 25(3) of the SEBI ( Listing Obligations and Disclosure Requirements) Regulations, 2015 at their separate Meeting held on 9th February, 2016.
EXTRACT OF ANNUAL RETURN
Pursuant to section 92(3) of the Companies Act, 2013 (''the Act'') read with rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of annual return is given as Annexure- 3.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
Pursuant to Section 177(9) read with Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has duly established Vigil Mechanism for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of company''s code of conducts or ethics policy. Audit Committee of the Board monitors and oversee the vigil mechanism.
The detailed policy related to this vigil mechanism is available in the Company''s website at www.rossellindia.com.
DIRECTORS'' RESPONSIBILITY STATEMENT
The Board of Directors acknowledges the responsibility for ensuring compliance with the provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 and confirm that:
(a) in the preparation of the annual accounts for financial year ended 31st March, 2016, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;
(b) the Directors had selected such accounting policies and applied them 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 for the financial year ended 31st March, 2016, and of the profit and loss of the Company for that period;
(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors had prepared the annual accounts on a going concern basis;
(e) the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
(f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
STATUTORY AUDITORS, THEIR REPORT AND NOTES TO FINANCIAL STATEMENTS
M/s. S. S. Kothari & Co., Chartered Accountants, Statutory Auditors of the Company will retire at the forthcoming Annual General Meeting. In terms of third proviso to Sec. 139 (2) of the Companies Act, 2013, they are eligible to be re-appointed and accordingly, they offer themselves for re-appointment. The Audit Committee has recommended their appointment as Statutory Auditors of the Company to hold office till the conclusion of the 23rd Annual General Meeting.
The report of the Statutory Auditors does not contain any qualification, reservation or adverse remark or disclaimer, which requires any further comments or explanations in this report. The Notes to the Financial Statements are also self-explanatory and do not call for any further comments.
COST AUDIT
Pursuant to Section 148 of the Companies Act, 2013 read with Rule 4 of the Companies (Cost Records and Audit) Amendment Rules, 2014, your Company is required to have the audit of its cost accounting records relating to plantations product manufactured by Rossell Tea Division. M/s. Shome & Banerjee, Cost Accountants, conducted this audit for the Previous Financial Year ended 31st March, 2015 and submitted their report to the Central Government on 19th November, 2015.
In terms of Section 148(3) of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the Board of Directors of the Company had, on the recommendation of the Audit Committee, re-appointed M/s. Shome & Banerjee, Cost Accountants as the Cost Auditor of the Company for the financial year 2016-2017.
Their remuneration is required to be ratified by the Members in the ensuing Annual General Meeting.
SECRETARIAL AUDIT
In terms of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed M/s. A.K. Labh & Co., Practicing Company Secretaries as the Secretarial Auditors of the Company for the financial year 2015-2016. The report of the Secretarial Auditors in Form MR-3 is enclosed as Annexure-4 to this report.
The report confirms that the Company had complied with the statutory provisions listed under Form MR-3 and the Company also has proper board processes and compliance mechanism. The Report does not contain any qualification, reservation or adverse remark or disclaimer, which requires any further comments or explanations in this report.
RELATED PARTY TRANSACTIONS
All the related party transactions are entered on arm''s length basis and are in compliance with the applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the Company at large. All related party transactions are presented to the Audit Committee and the Board, if required for approval. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. Related party transactions policy as approved by the Board is uploaded on the Company''s website at the web link:http://www.rossellindia.com/financialresult/Policy%20on%20Related%20Party%20Transactions.pdf
Necessary disclosure of Related Party Transactions in terms of clause (h) of sub-section (3) of Section 134 of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is given in Form AOC-2 as Annexure-5 to this report.
LOANS, GUARANTEES OR INVESTMENTS
Your Company has not provided any Guarantee for any party. During the year under review, the Board has approved to grant an inter-corporate loan, repayable on demand, to CAE Rossell India Ltd., Wholly Owned Subsidiary, up to a sum not exceeding Rs.10 lakhs carrying an interest @ 10% p.a. being not lower than prevailing yield of 5 years Government Security, in terms of the provisions of Section 186 of the Companies Act, 2013.
Out of the above limit sanctioned by the Board, an amount of Rs. 5 lakhs was actually disbursed to CAE Rossell India Ltd during the year and the same remain outstanding as on 31st March, 2016. (Note No. L) Particulars of investments under section 186 of the
Companies Act, 2013, as required to be disclosed in terms of Section 134(1)(g) of the Act, has been provided in the accompanying financial statement (Note No. K).
STATEMENTS OF SUBSIDIARIES / JOINT VENTURES
The wholly owned subsidiary, CAE Rossell India Limited, did not carry out any activity during the year under review. However, it had received a Request for Proposal (RFP) from Boeing for P-8i POSEIDON Program for "Visual Database" which is required for P-8i Aircraft, purchased by the Indian Navy. Your Directors look forward to the new project in the years ahead.
Your Company has a Joint venture entity named RV Enterprises Pte. Ltd., Singapore in which Company holds 26% Equity Share.
Accompanying Consolidated Financial Statement contains details financials of the Subsidiary / Joint Venture.
RISK MANAGEMENT POLICY
Your Company''s business faces various risks - strategic as well as operational in respect of all its Divisions. The Company has an adequate risk management system which takes care of identification, assessment and review of risks as well as their mitigation plans put in place by the respective risk owners. The risks which were being addressed by the Company during the year under review included risks relating to market conditions, environmental, information technology etc. The Company has developed and implemented the Risk Management Policy with an objective to provide a more structured framework for proactive management of all risks related to the business of the Company and to make it more certain that growth and earnings targets as well as strategic objectives are met.
The major risks and concerns being faced by various business segments of the Company are discussed in report on Management Discussion and Analysis, forming part of this Report.
Your company has constituted Risk Management Committee of the Board in the manner stated in Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Risk Management Committee periodically reviews the risk assessment and minimization procedure in the light of the Risk Management Policy of the Company.
In the opinion of the Board, there is no such element of risk which may threaten the present existence of the Company.
REMUNERATION POLICY
The Company follows a policy on Remuneration of Directors and Senior Management Employees. The policy is approved by the Nomination and Remuneration Committee and the Board. Further details on the same have been given in the Report on Corporate Governance, which forms part of this report.
The required disclosure under Section 197 (12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given as Annexure- 6 to this report.
HUMAN RESOURCES
Your Company treats its "human resources" as one of the most important assets. The Management of the Company lays continuous focus on human resources, who are trained from time to time to attain the required standards. The correct recruitment practices are in place to attract the best technical manpower to ensure that the Company maintains its competitive position with respect to execution. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis.
Industrial relations at all the units remain satisfactory. Your Company employed 6,201 personnel on its role as on 31st March, 2016.
For the year under review, the particulars of employees who were in receipt of remuneration which is the aggregate was not less than rupees sixty lakhs and employed throughout the financial year is given in Annexure- 7 to this report.
The Company did not have any employee on its payroll, who:
a. if employed for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than five lakh rupees per month;
b. if employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company.
The total remuneration drawn by the Managing Directors and Key Managerial Personnel forms part of Extracts from the Annual Return in Form MGT-9. Mr. H. M. Gupta, Executive Chairman in his capacity as the Chairman and Managing Director of BMG Enterprises Ltd., the Holding Company drew a remuneration of Rs. 6.00 lakhs as consolidated salary pursuant to Section 197 (14) of the Companies Act, 2013.
AWARDS AND RECOGNITION
Your Directors are pleased to advise that during the year under review, the Company has bagged several awards, for performance of its various Divisions, as mentioned hereunder:
- The National Magazine ''Business Today has awarded the Company in respect of its Rossell Tea Division as "India''s Best SME - Agriculture (Total income Rs. 101 Crores - Rs. 250 Crores) categoryâ in a ceremony held in Delhi on 23rd September, 2015.
- Rossell Techsys Division of the Company has been awarded as "Fastest Growing SME of the Year 2015 in Customer Satisfaction in Defense and Aerospace Sectorâ - by Karnataka Small and Medium Business Owners Association (KSMBOA) under the Business Excellence and Achievement awards 2015.
- Rossell Techsys Division of the Company has been honored with the "Supplier Appreciation Awardâ conferred by Boeing for Maintaining Gold Rating for Quality & Delivery for the years 2014 & 2015.
- The Institute of Cost Accountants of India (ICAI-CMA) in association with ASSOCHAM, has honored the Rossell Techsys Division of the Company with the "Best SME of the year award for 2015" award, under the event SMEs excellence award 2015.
- Rossell Techsys Division of the Company has achieved its biggest award yet - "The Boeing SUPPLIER OF THE YEAR in the PATHFINDER categoryâ in a glittering ceremony held in Seattle, USA during April, 2016.
- The Rossell Hospitality Division of the Company, operating brand Kebab Xpress, has been honored with "IMAGES Most Admired Food Service Retailer of the year Award : Supply Chain Management'' at the 9th Annual Mega Congregation of the India Food Forum at the Coca Cola Golden Spoon Awards (CCGSA , 2016 ).
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
There is no significant or material order passed by any Regulators or Courts or Tribunals impacting the going concern status and Company''s operations in future.
INTERNAL FINANCIAL CONTROLS
Your Company has adequate Internal Financial Control System at all levels of Management and they are reviewed from time to time. The Internal Audit is carried out in house as well as by a firm of Chartered Accountants. The Audit Committee of the Board looks into Auditor''s review which is deliberated upon and corrective action taken, where ever required.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
In compliance with the provisions of Sub-Section 5 of Section 124 of the Companies Act, 2013 read with Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001 a sum of Rs. 67,815, being the dividend lying unclaimed out of the dividend declared by the Company for the Financial Year 2007-2008, has been transferred to the Investor Education and Protection Fund of the Central Government during September, 2015.
DEPOSITS
Your Company has not accepted any deposits from public in terms of provisions contained in Chapter V of the Companies Act, 2013, or in terms of corresponding provisions of the Companies Act, 1956.
MANAGEMENT DISCUSSION AND ANALYSIS
A report on the Management Discussion and Analysis concerning all the business segments of the Company is given as Annexure-8 to this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
(a) Conservation of energy
(i) |
the steps taken or impact on conservation of energy |
In various Tea Factories of Rossell Tea Division, machinery up-gradation and |
|
replacement of low performing equipment is an ongoing process with a view to conserve Fuel, Electrical Energy and other resources. Initiatives undertaken during the financial year 2015-2016 are as follows; |
|||
a) |
Replacement of old and obsolete Gas Generators of 250 KVA and 125 KVA respectively has been done. The new sets have the ability of better capacity utilization. |
||
b) |
Replacement of Axial Flow Fans attached to Energy Efficient Motors for higher volumes of air availability with reduced energy consumption done at one of the factories. |
||
c) |
Up-gradation of plant motorization with high efficiency IE3 energy efficient motors. |
||
d) |
Installation of Demand Monitoring Control units to control the factory electrical demand on the State Board Power Supply. |
||
e) |
Installation of Voltage Monitoring Relays on motors to eliminate motor damages due to single phasing and surges in the State Board Power Supply. |
||
f) |
Installation of wind propelled ventilators on factory roof which helps in maintaining the quality of produce and also provide better working environment inside the factory. |
||
g) |
Installation of individual gas burners based on the gas pressure available to |
||
the withering trough fans, replacing the bulk supply of hot air. This conversion eliminates the wastage of Natural Gas as the requirement is need based along with saving in energy of running 17.5 HP motor with blower. The new system also prevents loss of Natural Gas by activation of a solenoid shut-off valve during power outages. |
|||
h) |
Installation of static power capacitors to improve the power factor of the plant and reduce losses incurred in the State Board Power Supply. |
||
Rossell Hospitality Division has taken the following initiatives: |
|||
(i) Great deal of focus on "OEE" (Overall Equipment Efficiency to optimize |
|||
productivity). |
|||
(ii) Driving sustainable development programme for water and power. |
|||
(iii) Replaced Conventional lighting with LED lights which are not only brighter but |
|||
also save energy and are Eco friendly. |
|||
(iv) Waste water from the RO is saved and stored for flushing and cleaning. |
(ii) |
the steps taken by the company for utilizing alternate sources of energy |
Rossell Tea Division is arranging for alternate source of energy provision for drying of teas by furnace oil. This is being done in view of any unfortunate circumstance that could arise in sudden breakdown of the supply of Natural gas. Study of the possibility of using Solar power at two Estates of Rossell Tea Division continues. Rossell Techsys Division is constrained to adopt alternate sources of energy as it is currently operating from leased premises in Bangalore. The owners of the premises are not motivated enough to invest in these alternate sources of energy. |
(iii) |
the capital investment on energy conservation equipments |
All the equipment and machinery are acquired with energy conservation in view. Hence the extent of investment cannot be separately quantified. However, the capital investment during the year ended 31st March 2016 on acquisition of energy conservation equipment in particular was Rs.83.73 Lakhs in Rossell Tea. |
(b) |
Technology absorption |
|
(i) |
the efforts made towards technology absorption |
In-house seminars, discussions with experts and training programme were held for innovative ideas of production and to update the staff. The concerned staff members are also sponsored to attain various seminars and workshops for updating themselves in various aspect of the functioning of the Company. |
(ii) |
the benefits derived like product improvement, cost reduction, product development or import substitution |
There has been an overall improvement in quality of product and labour productivity, which results in economy in cost. The Rossell Hospitality Division tried different versions of imported equipment to rationalize capex costs for certain products and are currently trying a version for soft serve machine, investment on which is much lower compared to the ones procured earlier. |
(iii) |
in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)- |
Not Applicable |
(a) the details of technology imported |
||
(b) the year of import; |
||
(c) whether the technology been fully absorbed |
||
(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof |
||
(iv) |
the expenditure incurred on Research and Development |
The Company is a Member of Tea Research Association, Kolkata, which is registered under Sec. 35 (1) (ii) of the Income tax Act, 1961. A contribution of Rs. 10.98 lakhs was made during the year towards subscription by Rossell Tea Division. All the Research and Development work done in Rossell Techsys Division is customer specific and for their exclusive purpose. Thus the cost thereof is absorbed by the respective project cost and not required to be accumulated separately. |
(c) Foreign exchange earnings and Outgo
During the year, the total foreign exchange used was Rs. 144.45 lakhs on account of various expenses and Rs. 1,158.68 lakhs for imports of raw materials, stores as well as capital goods. The total foreign exchange earned was Rs. 6,977.13 lakhs (Note No. 10 to the financial statements)
MATERIAL CHANGES AND COMMITMENTS
You Directors confirm that there are no material changes and commitments, affecting the financial position of the Company which has occurred between the end of the financial year of the Company and the date of this report
ACKNOWLEDGEMENT
Your Directors place on record their appreciation for employees at all levels, who have contributed to the growth and performance of your Company.
Your Directors also thank the business associates, shareholders and other stakeholders of the Company for their continued support.
For and on behalf of the Board
Rossell India Limited
Place : Delhi H.M.Gupta
Date : 30th May, 2016 Executive Chairman
Mar 31, 2015
Dear Members,
The Directors have pleasure in presenting their Twenty First Annual
Report together with the Audited Accounts for the year ended 31st
March, 2015.
FINANCIAL SUMMARY HIGHLIGHTS
Rs in Lakhs
Particulars Year ended Year ended
31st March 2015 31st March 2014
Profit before Finance Cost and Depreciation 2,255.81 4,173.74
Less : Finance Cost 724.45 884.55
Profit before Depreciation 1,531.36 3,289.19
Less : Depreciation 956.41 416.00
Profit before Exceptional Items 574.95 2,873.19
Exceptional Items  Â
Profit before Taxation 574.95 2,873.19
Less : Provision for current Taxation 170.00 650.00
Deferred Taxation adjustment 4.48 183.00
Profit After Taxation 400.47 2,040.19
Add : Balance brought forward 370.06 344.53
Profit available for appropriation 770.53 2,384.72
Appropriated as under :
General Reserve 100.00 1,800.00
Dividend on Equity Shares - Proposed @ 25 % 183.48 183.48
(2014-25%)
Tax on Dividend 36.69 31.18
Balance carried forward 450.36 370.06
770.53 2,384.72
SHARE CAPITAL
During the year under review:
a. No Equity shares have been issued with differential voting rights.
Hence, no disclosure is required in terms of Rule 4 (4) of Companies
(Share Capital and Debentures) Rules, 2014.
b. No issue of Sweat Equity Share has been made. Hence, no disclosure
is required in terms of Rule 8 (13) of Companies (Share Capital and
Debentures) Rules, 2014.
c. There was no issue of Employee Stock Option. Hence, no disclosure is
required in terms of Rule 12 (9) of Companies (Share Capital and
Debentures) Rules, 2014.
d. There was no provision made by the Company for any money for
purchase of its own shares by employees or by trustees for the benefit
of employees. Hence, no disclosure is required in terms of Rule 16 (4)
of Companies (Share Capital and Debentures) Rules, 2014.
e. The issued, subscribed and paid up share capital of the Company as
on 1st April, 2014 at Rs. 733.93 lakhs divided into 3,66,96,475 of Rs. 2
each remained unchanged as on 31st March, 2015.
APPROPRIATION OF PROFIT AFTER TAX FOR TRANSFER TO RESERVES
Your Directors proposed to transfer a sum of Rs. 100 lakhs to General
Reserve before declaration of any dividend in terms of first proviso to
Sec. 123(1) of the Companies Act, 2013.
DIVIDEND
Your Directors are pleased to recommend to the Members, for their
approval, a dividend of Rs. 0.50 per Equity Share of Rs. 2 each in the
Company for the year ended 31st March, 2015.
THE STATE OF COMPANY'S AFFAIRS
REVENUE
The gross revenue from operations of your Company including sale of
Tea, avionics equipment, receipts from technical and support services
and sale of food and beverages by Kebab Xpress declined marginally to Rs.
14,049.96 lakhs for the year under review as against Rs. 14,142.72 lakhs
in the previous year.
PERFORMANCE
Rossell Tea
During the year 2014-15, your company continued to lay emphasis an
quality crop. However, the year was one of the most difficult years
experienced. The year began with an acute drought going into May 2014
and then deficit rainfall every alternate month thereafter. From early
October 2014 to almost end- March 2015 there was very poor
precipitation. Crop intakes therefore were poorer than expected.
However, on the quality front Rossell continued to hold its pole
position as a producer of top quality teas. The Division's average
sales realization in the year under review was Rs.223.83 per kg. as
against Rs. 220.70 per kg in the year 2013-14 and Rs.210.22 per kg in the
year 2012-13. Whilst the overall increase is not significant, it is
nonetheless a fine performance, given the difficult market conditions
that prevailed. This average sales realization reflects consistent
quality.
The drought at the start of the year continued into April and May,
recording in effect, the lowest rainfall, on some Estates in 80 years.
The tea bushes weakened by the drought struggled through the year.
Further due to continuing degradation of forests more and more pests
are seen in the tea areas resulting in additional expenditure on pest
control.
The orthodox market started season 2014-15 on a depressed note with
Iran, a major market, being in an overbought situation. This resulted
in nearly 25% less orthodox being produced in the year and the industry
average for orthodox teas also being lower at Rs.198.31 per kg., than
that of the previous year by Rs.5.49 per kg. It is pertinent to mention
that our all in average for orthodox teas was Rs.249.20 per kg. i.e.
Rs.2.13 over the previous year and Rs.50.89 per kg. over the Assam average.
The CTC market was buoyant through the year till November,2014 due to
the decline in the Assam production by almost 6%. Significantly the
best quality levels continued to witness new price benchmarks. The CTC
average for Assam settled at year end at Rs.151.66 per kg. as against
Rs.144.44 per kg. in the year 2013-14. Again significantly Rossell's CTC
average was Rs.196.79 i.e. Rs.10.62 per kg. over the previous year and
Rs.44.13 per kg. over the Assam district average. Your Directors view
this as good performance, despite many odds and difficult market
conditions. The outperforming of the market yet again represents
Rossell's resolve to excel.
The season 2014-15 saw a robust performance on the export front.
Exports registered an increase of 17.93%, reaching 15.12 lakh kgs. i.e.
30.93% of our production. This increase took place in spite of our crop
for the season being 12% lower, as a consequence of the severe drought.
The export turnover is Rs.41.31 crores against Rs.36.27 crores in the
previous year. The continual and aggresive trust on exports has been
the highlight of the Division's performance, notwithstanding the
uncertain market situations, especially in Iran.
Your Directors have been for the last few years reporting on 'climate
change' as aberrations in climate are now increasingly impacting
production. Whilst climatically the year 2013-14 was excellent in every
sense, the year 2014-15 was the opposite, with deficit and ill
distributed rainfall, causing crop losses hitherto not seen in the
group. This naturally has had an impact on profitability, due to higher
costs. Norms on depreciation in the new Companies Act, 2013 further
exacerbated the situation. Wage increase of Rs.21 per man day i.e. 22%
along with its attendant statutory outgoes, with effect from 1st
January 2015 has also impacted the bottom-line.
Combating climate has become a major challenge to the Tea Planters.
During the year, cultural and other agricultural operations were
strengthened to mitigate the ill effects of global warming. Irrigation
facilities were further strengthened and expanded at Dikom, Namsang,
Kharikatia and Nagrijuli Tea Estates. This has helped us combat a
nearly five months' dry period between October 2014 and end-February
2015.
The Division continued to strengthen its assets, through modernization
and upgradation on all Estates. All Estates received their FSSC 22000
certification during the year, a notable achievement in the area of
'food safety standards'. We also continued our uprooting and replanting
programme insuring improvement in the bush health and potential in
keeping with our sustainability policies of a robust future. Our
targets in this area were fully met for the year under review.
The Division continued with its judicious product mix of orthodox and
CTC Teas this year. This has helped us as in previous years to exploit,
to the hilt the core competence of each Estate.
Our crop for the year under review was 48.42 lakh kgs. as against 54.82
lakh kgs. in the year 2013-14 and 43.54 lakh kgs. in 2012- 13 including
bought leaf, the total production in 2014-15 was 48.89 lakh kgs.as
against 55.59 lakh kgs. in the year 2013- 14.
AVIATION PRODUCTS AND SERVICES
Aerotech Services continues to provide product support services for
Original Equipment Manufacturers (OEMs) on their equipment fitted on
aircrafts, helicopters, ships and other platforms operating in India.
During the year under review, the Division was approached by another
OEM for technical product support and has signed a long term Agreement
with them for seven and half years. The Division continues to achieve
very high customer and OEM satisfaction levels.
Rossell Techsys Division's resources were utilized to the maximum
extent to gain foreign, export oriented business. Domestic business was
pursued only for skill building, thus leading to gaining more foreign
OEM business. The financial performance has been very close to plan.
The Division grew by over 200% in terms of revenue and about 150% in
terms of order book value. The Division acquired four more contracts
from foreign OEMs and has established itself as an Indian supplier with
excellent quality, people, process and infrastructure credentials. It
has achieved the GOLD rating with its premier, US based, aerospace and
defense customer. The Division has adopted a two pronged strategy for
certifications, at the division level and individual level. The
division is certified to AS9100, IS9001, ISO14001 and ISO27001. The
division is also CEMILAC approved. The OHSAS 18001 certification is in
progress. The division was also awarded the best SME in the aerospace
and defense sector for the year 2015, just prior to the Aero India
2015.
ROSSELL HOSPITALITY
During the year under review, the Division continues to expand and
opened three more outlets of Kebab Xpress in NCR and closed down one at
M Block, Connaught Place, Delhi. This makes a total of 9 operating
outlets as on 31st March, 2015. Consistency in quality, excellent
service, conducive ambience and high level of hygiene at the outlets
are well appreciated by the customers.
PROSPECTS Rossell Tea
World crops in 2015 reflect an initial shortfall in Kenyan crops by 31
million kgs. On the back of two record years, Malawi is currently
behind by 3.30 million kgs. Sri Lanka is ahead by 5.30 million kgs
compared to 2014 for the same period.
Indian crops have, however, despite an initial drought in 2015,
rebounded, especially in Assam and Dooars (West Bengal). Given
reasonably good weather we expect the crops to revert to their 2013
levels. This is more plausible as the monsoon is hopefully likely to be
normal in NE India as per the latest meteorological forecasts.
The current tea market in India has strong fundamentals with production
looking strong, the consumption showing a growth at 3.50% levels on an
annual basis and the quality segmentation which is occurring, augurs
well for quality producers like your Company.
Prospects for quality CTC produce are good and there are clear signals
to this effect. Orthodox levels should move up with the onset of the
2nd flush and enquiry from our traditional markets on the Continent,
Iran as also Russia should be forthcoming. As of now, your Company
continues to perform to its core competency. Our CTC Estates are
maximizing production of this category and getting attractive prices.
Similarly, the Orthodox category continues to rule strong on our
Orthodox producing Estates. Finally, Exports will continue to be a key
area and we are optimistic that 15.12 lakh kgs exported in 2014-15
should be exceeded both in quantitative and value terms.
With the options open to us, whether CTC or Orthodox, the Company is
confident of outperforming the market and retaining its status of being
one of the most profitable companies, in the Assam Tea Industry.
Aviation Products and Services
Aerotech Services is currently executing 4 technical product support
contracts. Another long term contract for 5 years is being signed,
which will become effective from 1st June 2015.
The new Government at the center has given tremendous impetus to 'Make
in India', particularly, for the defense and aerospace sector. As
recently reported, for the first time a contract is being awarded to a
private Indian MNC for manufacturing aircrafts in India. Against
several tenders, equal opportunity is now being accorded to private
sector industry for manufacturing in India. The Government is also
reviewing the Defense Procurement Policy (DPP) and simplifying the
same.
With the government opening the Defense sector for private companies,
Aerotech Services Division foresees greater opportunities for business
growth in providing technical product support.
Rossell Techsys Division has created bright prospects for itself by
virtue of its quality credentials in executing orders to time and
quality to foreign OEMs. Interest levels from more foreign OEMS is on
the rise and there is a good chance that the Division may see a
geographic spread of customers from US, Europe as well as Israel. The
number of RFPs being received from foreign OEMs is at the rate of one
per month and with a success rate of over 75%. For domestic business,
repeat order traction has just begun and the financial year 2015-2016
should see a marked improvement over the last few years.
The growth prospects have prompted the Division to add additional
space, to the extent of approximately 25,000 square feet more. The
total space with the division is now 59,000 square feet.
Rossell Hospitality
The Division intends operating a total of 25 outlets in NCR in the
financial year 2015-16. The relevant Agreements for 9 additional
outlets have already been signed. Once the possession is given by the
builders, after obtaining necessary clearances, our outlets will become
operational there. This should be in phases during the course of the
year. Further, 7 outlets would also be identified soon to make them
operational as soon as possible. The outlets are coming up in High
Streets and Malls.
The Division will be commencing Kebab Xpress operations outside NCR
too. Initial target is to open with a new commissary and 5 outlets by
March, 2016.
We expect store level sales to enhance in the medium term and then our
objective is to target towards breakeven point at outlet level.
CHANGE IN NATURE OF BUSINESS, IF ANY
There has been no change in any business and all the Divisions of the
Company continue to concentrate on their own business with growth plans
in short to medium terms.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review, Ms. Nayantara Palchoudhuri was inducted
to the Board as an Additional Director in the category of
Non-Independent Woman Director on and from 6th August, 2014, pursuant
to Section 161 read with the second proviso of Section 149 of the
Companies Act, 2013 and sub clause II.A of clause 49 of the Listing
Agreement.
In terms of Section 161 of the Companies Act 2013, Ms. Palchoudhuri
shall hold office up to the date of the ensuing Annual General meeting.
The Company has received notice in writing along with the requisite
deposit pursuant to Section 160 of Companies Act, 2013, proposing her
appointment as Director of the Company. Your Board, based on the
recommendation of the Nomination and Remuneration Committee of the
Board has recommended the appointment of Ms. Nayantara Palchoudhuri as
a Non-independent Director of the Company liable to retire by rotation
in terms of Section 152 (6) of the Companies Act, 2013.
The tenure of office of Mr. H.M. Gupta, Executive Chairman expired on
30th April 2015. The Board, on recommendation of the Nomination and
Remuneration Committee, at its meeting held on 30th March, 2015 has
re-appointed Mr. H. M. Gupta as Managing Director (designated as
Executive Chairman) for a further period of 2 years 11 months w.e.f.
1st May, 2015 till 31st March, 2018
subject to approval by the Members at the ensuing Annual General
Meeting in terms of Section 188, 196, 197 read with Sec II, Part II of
Schedule V and other applicable provisions, if any, of the Companies
Act, 2013.
Mr. H. M. Gupta is also subject to re-appointment as Director in the
ensuing Annual General Meeting, consequent upon his retirement as a
Director by rotation in terms of Section 152(6) of the Companies Act,
2013.
Pursuant to Section 203 of the Companies Act, 2013 the Company has
appointed following Key Managerial Personnel with effect from 1st
April, 2014:
Mr. H. M. Gupta - Chief Executive Officer (CEO)
Mr. C.S. Bedi - Managing Director, and
Mr. N. K. Khurana - Chief Financial Officer-cum- Company Secretary
STATEMENT ON DECLARATIONS GIVEN BY INDEPENDENT DIRECTORS
The Declarations required under Section 149(7) of the Companies Act,
2013 from the Independent Directors of the Company confirming that they
meet the criteria of independence as prescribed under Section 149(6) of
the Companies Act, 2013 as well as under Clause 49.II.B of the Listing
Agreement with the Stock Exchanges, were duly received by the Company.
CORPORATE GOVERNANCE
The Company has complied with the Corporate Governance requirements
under the Companies Act, 2013 and as stipulated in the Clause 49
(Revised) under the listing agreement with the stock exchanges.
A separate report on Corporate Governance under the listing agreement,
along with certificate from the Practicing Company Secretary confirming
the compliance, is annexed as Annexure-1.
DETAILS OF BOARD MEETINGS
The Board of Directors met 6 (six) times during the financial year
2014-2015 on various dates as given here-in-below:
Date of the meeting No. of Directors attended the meeting
1st April, 2014 6
16th May,2014 6
6th August, 2014 6
14th November, 2014 6
4th February, 2015 3
30th March, 2015 6
Further details on Board of Directors are provided in the Corporate
Governance Report. COMMITTEES OF THE BOARD a. Audit Committee
The Board has constituted the Audit Committee which comprises of the
following Directors:
Name Category of Director Chairman/ Members
Dr. S.S. Baijal Non-Executive-Independent Chairman
Mr. H. M. Parekh Non-Executive-Independent Member
Mr. V. P. Agarwal Non-Executive-Independent Member
Ms. Nayantara Non-Executive Non-Independent
Palchoudhuri Director Member
*Appointed as Additional Director by the Board on 06.08.2014.
The Board has accepted all the recommendations made by the Audit
Committee during the year.
Further details on the functioning of the Audit Committee are given in
the Corporate Governance Report.
b. Nomination & Remuneration Committee
Name Category of Director Chairman Member
Mr. H. M. Parekh Non-Executive-Independent Chairman
Dr. S.S. Baijal Non-Executive-Independent Member
Mr. V. P Agarwal Non-Executive-Independent Member
Further details of Nomination and Remuneration Committee are given in
the Corporate Governance Report.
c. Corporate Social Responsibility Committee
Name Chairman / Member
Dr. S. S. Baijal Chairman
Mr. V. P Agarwal Member
Mr. C. S. Bedi Member
Further details of Corporate Social Responsibility Committee are
available in the Report on Corporate Governance.
The Committee had approved the CSR policy and the Budget for the
financial year 2014-2015 prepared in accordance with the provisions of
Section 135 (5)of the Companies Act, 2013. The amount so budgeted was
fully spent on or before 31st March, 2015.
The CSR policy is uploaded on Company's website at www.rossellindia.com
and the Report on CSR Activities/ Initiatives is enclosed as
Annexure-2.
d. Stakeholders Relationship Committee
Name Chairman / Member
Mr. H. M. Parekh Chairman
Mr. V. P Agarwal Member
Mr. C. S. Bedi Member
Further details of Stakeholders Relationship Committee are available in
the Report on Corporate Governance.
e. Risk Management Committee
Your Board at its meeting dated 14th November, 2014, has constituted
Risk Management Committee of the Board in terms of Clause VI.C of
Revised Clause 49 of the Listing Agreement.
Name Chairman / Member
Mr. H. M. Parekh Chairman
Ms. Nayantara Palchoudhuri Member
Mr. C. S. Bedi Member
Further details of Risk Management Committee are available in the
Report on Corporate Governance.
ANNUAL PERFORMANCE EVALUATION
In terms of the relevant provisions of the Companies Act, 2013 and
Revised Clause 49.II.B.6 of the Listing Agreement, the Board had
carried out an annual evaluation of its own performance and that of its
Committees as well as individual Directors.
A structured questionnaire was prepared after taking into consideration
different views received from the Directors, covering various aspects
of the Board's functioning such as adequacy of the Board's composition
and structure, Board's culture, execution and performance of specific
duties, obligations and governance, effectiveness of Board processes
etc. The performance of the Committees was evaluated by the Board after
seeking inputs from the Committee Members on the basis of the criteria
such as the composition of committees, effectiveness of committee
meetings, etc.
The Board and the Nomination and Remuneration Committee reviewed the
performance of the individual Directors on the basis of the criteria
such as the contribution of the individual Director to the Board and
Committee Meetings like attendance in the meeting, 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 by the Independent Directors.
The Independent Directors also carried out the Performance Evaluation
in terms of Clause VII (3) (c) of Schedule IV to the Companies Act,
2013 in their separate Meeting held on 30th March, 2015.
EXTRACT OF ANNUAL RETURN
Pursuant to section 92(3) of the Companies Act, 2013 ('the Act') read
with rule 12(1) of the Companies (Management and Administration) Rules,
2014, extract of annual return is given as Annexure-3.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
Pursuant to Section 177(9) read with Rule 7 (Meeting of Board and its
Power) Rules, 2014 and Clause 49. II. F of the Listing Agreement, your
Company has duly established Vigil Mechanism for Directors and
employees to report concerns about unethical behavior, actual or
suspected fraud or violation of company's code of conducts or ethics
policy. Audit Committee of the Board monitors and oversee the vigil
mechanism.
The detailed policy related to this vigil mechanism is available in the
Company's website at www.rossellindia.com and the same is given as
Annexure-4.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement of clause (c) of sub-section (3) of Section
134 of the Companies Act, 2013, your Directors confirm that:
(a) in the preparation of the annual accounts for the financial year
ended 31st March, 2015, the applicable accounting standards had been
followed along with proper explanation relating to material departures,
if any;
(b) the Directors had selected such accounting policies and applied
them 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 for the financial year ended 31st March, 2015, and of
the profit and loss of the Company for that period;
(c) the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
(d) the Directors had prepared the annual accounts on a going concern
basis;
(e) the Directors, had laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and were operating effectively; and
(f) the Directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
STATUTORY AUDITORS, THEIR REPORT AND NOTES TO FINANCIAL STATEMENTS
M/s. S. S. Kothari & Co., Chartered Accountants, Auditors of the
Company will retire at the forthcoming Annual General Meeting. In terms
of third proviso to Sec. 139 (2) of the Companies Act, 2013, they are
eligible to be re-appointed and accordingly, they offer themselves for
re-appointment. The Audit Committee has recommended their appointment
as Auditors of the Company to hold office till the conclusion of the
next Annual General Meeting.
The report of the Auditors does not contain any qualification,
reservation or adverse remark or disclaimer, which requires any further
comments or explanations in this report. The Notes to the Financial
Statements are also self-explanatory and do not call for any further
comments.
COST AUDIT
In terms of Section 148(3) of the Companies Act, 2013 read with the
Companies (Cost Records and Audit) Rules, 2014, M/s. Shome & Banerjee,
Cost Accountants has been re-appointed as the Cost Auditor of the
Company for the financial year 2015-2016 based on the recommendations
of the Audit Committee, by the Board of Directors in its meeting held
on 29th May, 2015. Their remuneration is required to be ratified by the
Members in the ensuing Annual General Meeting.
SECRETARIAL AUDIT
In terms of Section 204 of the Companies Act, 2013 read with Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014,
M/s. A.K. Labh & Co., Practicing Company Secretaries have been
appointed Secretarial Auditors of the Company for
the financial year ended 31st March, 2015. The report of the
Secretarial Auditors is enclosed as Annexure-5 to this report. The
Report does not contain any qualification, reservation or adverse
remark or disclaimer, which requires any further comments or
explanations in this report.
RELATED PARTY TRANSACTIONS
All the related party transactions are entered on arm's length basis
and are in compliance with the applicable provisions of the Companies
Act, 2013 and listing agreement. There are no materially significant
related party transactions made by the Company with Promoters,
Directors or Key Managerial Personnel etc. which may have potential
conflict with the interest of the Company at large. All related party
transactions are presented to the Audit Committee and the Board, if
required for approval. Omnibus approval is obtained for the
transactions which are foreseen and repetitive in nature. The Policy on
Related Party Transactions as approved by the Board is uploaded on the
Company's website at the web link:
http://www.rossellindia.com/financial-result/
Policy%20on%20Related%20Party%20Transactions.pdf
Necessary disclosure of related party transactions in terms of clause
(h) of sub-section (3) of Section 134 of the Companies Act, 2013 read
with Rule 8(2) of the Companies (Accounts) Rules, 2014 is given in Form
AOC-2 as Annexure-6 to this report.
LOANS, GUARANTEES OR INVESTMENTS
Your Company has not provided any Guarantee for any party. An interest
free Loan of Rs. 4.50 lakhs was paid to wholly owned subsidiary, CAE
Rossell India Ltd. in earlier years and the same remain outstanding as
on 31st March, 2015. (Note No. L) Particulars of investments under
section 186 of the Companies Act, 2013, as required to be disclosed in
terms of Section 134(1)(g) of the Act, has been provided in the
accompanying financial statement (Note No. K).
HUMAN RESOURCES
Your Company treats its "human resources" as one of the most important
assets. The Management of the Company lays continuous focus on human
resources, who are trained from time to time to attain the required
standards. The correct recruitment practices are in place to attract
the best technical manpower to ensure that the Company maintains its
competitive position with respect to execution. Your Company
continuously invests in attraction, retention and development of talent
on an ongoing basis.
Industrial relations at all the units remain satisfactory; your Company
employed 6,195 personnel on its roll as on 31st March, 2015.
During the year under review, the Company did not have any employee on
its payroll, who:
a. if employed throughout the financial year, was in receipt of
remuneration for that year which, in the aggregate, was not less than
sixty lakh rupees;
b. if employed for a part of the financial year, was in receipt of
remuneration for any part of that year, at a rate which, in the
aggregate, was not less than five lakh rupees per month;
c. if employed throughout the financial year or part thereof, was in
receipt of remuneration in that year which, in the aggregate, or as the
case may be, at a rate which, in the aggregate, is in excess of that
drawn by the managing director or whole-time director or manager and
holds by himself or along with his spouse and dependent children, not
less than two percent of the equity shares of the company.
The total remuneration drawn by the Managing Directors and Key
Managerial Personnel forms part of Extracts from the Annual Return in
Form MGT 9. Mr. H. M. Gupta, Executive Chairman in his capacity as the
Chairman and Managing Director of BMG Enterprises Ltd., the Holding
Company drew a remuneration of Rs. 6.50 lakhs as consolidated salary
pursuant to Section 197 (14) of the Companies Act, 2013.
STATEMENTS OF SUBSIDIARIES / JOINT VENTURES
The wholly owned subsidiary, CAE Rossell India Limited, did not carry
out any activity during the year under review.
Your Company has a Joint venture entity named R.V. Enterprizes Pte.
Ltd., Singapore, in which the Company holds 26% Equity Shares.
Accompanying Consolidated Financial Statement contains details
financials of the Subsidiary / Joint Venture.
RISK MANAGEMENT POLICY
In terms of the requirement of the Companies Act, 2013 and Clause 49.VI
of the Listing Agreement, the Company has developed and implemented the
Risk Management Policy. The Risk Management Committee of the Board
reviews the same periodically.
The major risks and concerns being faced by various business segments
of the Company are discussed in report on Management Discussion and
Analysis forming part of this Report.
In the opinion of the Board, there is no such element of risk which may
threaten the present existence of the Company. REMUNERATION POLICY
The Company follows a policy on Remuneration of Directors and Senior
Management Employees. The policy is approved by the Nomination and
Remuneration Committee and the Board. Further details on the same have
been given in the Report on Corporate Governance
The required disclosure under Section 197 (12) of the Companies Act,
2013 read with Rule 5 (1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 is given as
Annexure-7 to this report.
AWARDS AND RECOGNITION
Your Directors are pleased to advise that in the Gold Medal Tea
Competition held during the 5th North American Tea Conference in
September, 2014, in Niagara, Canada, the Tea produced by Dikom Tea
Estate of the Rossell Tea Division of the Company was placed "2nd" in
the worldwide category for black teas. This is the Second time in three
years that this estate has won this honour.
Further, Rossell Techsys Division of the Company has been awarded the
"Top Indian SME for Aerospace & Defense for the year 2015." The award
is instituted by International Aerospace Magazine (SAP Media).
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
There is no significant or material order passed by any Regulators or
Courts or Tribunals impacting the going concern status and Company's
operations in future.
INTERNAL FINANCIAL CONTROL
Your Company has adequate Internal Financial Control System at all
levels of Management and they are reviewed from time to time. The
Internal Audit is carried out in house as well as by a firm of
Chartered Accountants. The Audit Committee of the Board looks into
Auditor's review which is deliberated upon and corrective action
taken, where ever required.
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND
Your Company did not have any funds lying unpaid or unclaimed for a
period of seven years till 31st March 2015. Therefore, there were no
funds which were required to be transferred to Investor Education and
Protection Fund (IEPF) during the year under review.
DEPOSITS
Your Company has not accepted any deposits from public in terms of
provisions contained in Chapter V of the Companies Act, 2013, or in
terms of corresponding provisions of the Companies Act, 1956.
MANAGEMENT DISCUSSION AND ANALYSIS
A report on the Management Discussion and Analysis concerning all the
business segments of the Company is given as Annexure-8 to this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
(a) Conservation of energy
(i) the steps taken or impact on conservation of energy
In the various Tea Factories of Rossell Tea Division, replacement of
old and outdated equipment, wherever required with energy efficient
equipment giving higher output with less energy consumption is an
ongoing practice. Some of the steps taken and its impact during the
Financial Year 2014-2015 are as under:
- Replacement of old obsolete fuel in-efficient Generators were under
taken for 200 KVA and 100 KVA capacities. These have the ability to
perform on better units to fuel ratio with better capacity utilization
and are Central Pollution Control Board Stage II (CPCBII) compliant.
with regulated noise level at 75 db (A).
- Up-gradation of Plant Motorization to Energy Efficient Motors.
- Implementation of an Industrial Pressure Regulating System at one
of the Tea Factory. This has achieved a control on supply Pressure
thereby reducing the Natural gas consumption entailing conservation of
fuel.
- Installing individual DMC (Demand Monitoring Control) units at Tea
Factories. This instrumentation controls the consumption of Demand
power coupled with the facility of a command to avoid human error.
Rossell Techsys Division is currently operating out of leased premises
in Whitefield, Bangalore. The Division utilizes, largely, single phase
power, for its tools and equipment. However, the Division does have a
practice in place, as part of its ISO 14001 practices to regulate the
use of power during and outside regular working hours. There is a
standard operating practice in place for conserving of power using
diligence.
(ii) the steps taken by the company for utilizing alternate sources of
energy
Rossell Tea Division is studying the possibility of using solar panels
for generation of electricity at 2 of its Tea Estates in Assam. This is
in view of lower Solar Irradiance in the North East region of the
Country.
Rossell Techsys Division in view of certain restrictions in the leased
premises, cannot use solar panels or any other alternative source of
energy.
(iii) the capital investment on energy conservation equipments
All the equipment and machinery are acquired with energy conservation
in view. Thus the extent of investment cannot be separately quantified.
However, the capital investments during the year ended 31st March, 2015
on acquisition of energy conservation equipment in particular was '
23.52 lakhs in Rossell Tea.
(b) Technology absorption
(i) the efforts made towards technology absorption
In-house seminars, discussions with experts and training programme were
held for innovative ideas of production and to update the staff. The
concerned staff members are also sponsored to attain various seminars
and workshops for updating themselves in various aspects of the
functioning of the Company.
(ii) the benefits derived like product improvement, cost reduction,
product development or import substitution
There has been an overall improvement in quality of product and labour
productivity, which results in economy in cost.
(iii) in case of imported technology (imported during the last three
years reckoned from the beginning of the financial year)-
(a) the details of technology imported
(b) the year of import;
(c) whether the technology been fully absorbed
(d) if not fully absorbed, areas where absorption has not taken place,
and the reasons thereof
Not Applicable
(iv) the expenditure incurred on Research and Development
The Company is a Member of Tea Research Association, Kolkata, which is
registered under Sec. 35 (1) (ii) of the Income tax Act, 1961. A
contribution of Rs.11.00 lakhs during the year towards subscription by
Rossell Tea Division.
All the Research and Development work done in Rossell Techsys Division
is customer specific and for their exclusive purpose. Thus the cost
thereof is absorbed by the respective project cost and not required to
be accumulated separately.
For and on behalf of the Board
Place : Kolkata H. M. Gupta
Date : 29th May, 2015 Executive Chairman
Mar 31, 2014
Dear Shareholders,
The Directors have pleasure in presenting their Twentieth Annual Report
together with the Audited Accounts for the yearended 31st March, 2014.
FINANCIAL RESULTS Rs in Lakhs
Particulars Year ended Year ended
31 March, 2014 31 March, 2013
Profit before Finance Cost and
Depreciation 4,173.74 3,067.31
Less: Finance Cost 884.55 217.69
Profit before Depreciation 3,289.19 2,849.62
Less : Depreciation 416.00 306.86
Profit before Exceptional Items 2,873.19 2,542.76
Exceptional Item - 1,358.45
Profit before Taxation 2,873.19 3,901.21
Less: Provision for Current Taxation 650.00 820.00
Deferred Taxation adjustment 183.00 53.00
Profit after Taxation 2,040.19 3,028.21
Add: Balance Brought Forward 344.53 329.57
Profit available for Appropriation 2,384.72 3,357.78
Appropriated as under:
General Reserve 1,800.00 2,800.00
Dividend on Equity Shares
Proposed @ 25% (2013-25%) 183.48 183.48
Tax on Dividend 31.18 29.77
Balance Carried Forward 370.06 344.53
2,384.72 3,357.78
DIVIDEND
The Directors are pleased to recommend to the Members, for their
approval, a dividend of Rs 0.50 per Equity Share of Rs 2 each in the
Company for the year ended 31st March, 2014.
REVENUE
The gross revenue from operation of your Company including sale of tea,
receipts for technical and support services and those of Rossell
Hospitality division was Rs 14,142.72 lakhs for the current year as
against Rs 10,596.64 lakhs in the previous year. This represents an
increase of Rs 3,546.08 lakhs i.e. 33.46%
PERFORMANCE
Rossell Tea
The Directors view with great satisfaction your Company''s performance
for the year under review. The Tea Division achieved averages which
were among the highest in the industry. More importantly Rossell Tea''s
position as a producer of top quality teas was further reinforced.
Our teas continue to be a benchmark for top quality teas, out of Assam,
both Orthodox and CTC.
The Division''s average for its tea in 2013-14 was Rs 220.70 per kg.
against Rs 210.22 per kg. in 2012-13 and Rs 171.52 per kg. in
2011-12. This reflects an increase of Rs 10.48 per kg. i.e. 5.0% over
2012-13. Significantly the all in average for Assam teas in 2013-14 was
Rs 149.67 per kg. It was another year of consistent quality at Rossell.
After a slow start in March 2013, the tea harvest settled down quickly
to good intakes generally across Assam. Whilst CTC demand was a little
sluggish the orthodox market was buoyant, due to good demand from Iran
as also a more efficient LC trade. This in turn led to a higher
production in Assam by 28.02 million kgs. over the previous year.
Unlike 2012-13, orthodox market was strong and the additional quality
produced was easily absorbed. On the cue of a buoyant orthodox market
your Company''s product was readily accepted at attractive prices,
averaging Rs 247.07 per kg. against Rs234.85 per kg. last year and the
Assam average which was at a record high of Rs 200.61 per kg.
The CTC averages for Assam in 2013-14 were Rs 143.99.Your Company''s
averages were Rs 186.17 per kg. In a defining performance, yet again
Rossell Tea outperformed the market.
The Division''s exports were robust and grew to 1.24 million kgs. as
against 1.02 million kgs in 2012-13. In volume terms Rossell registered
a 21.70% increase. Per kg. realization was higher by 35.02%. This is on
the back of an outstanding performance in the previous year 2012-13.
As reported last year climatic aberrations are a part and parcel of
agricultural activity in North East India. Whilst 2012-13 can be
considered as overall one of the best years climatically, the year
ended with a very dry March 2014, impacting negatively an otherwise
excellent crop performance for the year.
In keeping with the increasing threat perception of erratic weather,
your Company has continued cultural and other operations to mitigate
the efforts of late rains. Whilst irrigation at Nagrijuli, Bokakhat and
Romai T.Es. was augmented, facilities at Dikom and Namsang were added
to cover 110 hectares of plantation on the both latter estates.
The Division in keeping with its long-term plan for asset strengthening
continued to upgrade and modernize its assets, especially at Namsang
and Dikom T.Es. The DivisionRs s uprooting and replanting development
plans are on course. At Rossell long-term goals are central to its
policy direction and this remains unchanged.
The Divisions product-mix has been an amalgam of orthodox and CTC, at
all times tied to individual estate''s core competence. This has
continued to pay dividends. Our policy of prudent product-mix, cost
management and productivity enhancement has helped us negate
inflationary pressures to an extent.
ACQUISITION
As reported in the previous year, Namsang T.E. and Kharikatia T.E were
acquired in June, 2012 and November 2012 respectively. Both the
Estates have overall performed well during the year under review,
despite suffering from a severe drought earlier in 2013. Both estates
added significantly to the Company''s top and bottom-line growth.
Our crop during the year under review was 54.82 lac kgs. as against
43.54 lac kgs. in the previous year. This crop included the production
of 5.73 lac kgs. from Namsang T.E. and 7.66 lac kgs. from Kharikatia
T.E. Including bought leaf, the total production was 55.59 lac kgs. in
2013-14.
AVIATION PRODUCTS AND SERVICES
Aerotech Services continues to provide product support services for
OEMs for the fifth year on their equipments fitted on aircraft,
helicopters, ships and other platforms in India. Aerotech Services has
been able to achieve very high customer and OEM satisfaction levels.
Rossell Techsys (RT) main thrust areas are manufacture of looms and
harnesses, design and development of automatic test benches, system
integration and embedded software solutions. The Division has achieved
certifications, which conform to international standard.
ROSSELL HOSPITALITY
Based on the encouraging response from the first two outlets of Rs
Kebab Xpress" (KX), Rossell Hospitality (RH) expanded the number of
outlets during the year from two to seven in the NCR Region.
Consistency in quality of our products, excellent service and high
level of hygiene are well appreciated by our customers in all the
outlets.
PROSPECTS
Rossell Tea
World black tea production in season 2013 was higher by 7.94% as
compared to season 2012. Production from Kenya in particular showed a
record surplus of 62.90 million kgs. increasing the overall supply of
CTC teas to the global market. Sri Lanka was higher by 11.90 million
kgs. adding to the increased orthodox production in India and thereby
increasing orthodox supply to the global market as well.
In India there was a record increase of 73.70 million kgs. over the
previous year resulting in the crop being 1,200 million kgs. as
against 1,126.30 million kgs. in 2012 i.e. 6.54% higher, with the major
increase coming from North India, which was 7.94% higher than 2012.
Overall the Indian production has been well absorbed by the markets.
The supply demand balance currently is equitable.
It appears from the product mix availability particularly at the
auctions that the major part of this increase came from the small
growers. The demand for quality tea was very strong which is reflective
with 10.92% of teas selling over Rs 195 per kg. as against only 6.98%
in the previous year. The bottom of the market showed an increase of
30.56% of teas selling below Rs 120 per kg. as against only 20.18% in
the previous year clearly indicating a preference for quality and
buyer''s willingness to pay premiums. Plainer varieties being
discounted in prices. This trend is being reinforced year after year.
Needless to mention that changing weather patterns are creating new
challenges every year whether they be in the form of drought, pest
infestation, high temperatures or excess rainfall. These factors are
preventing the entire tea industry from following traditional norms and
practices. Rising cost of all inputs, especially fertilizers and
pesticides, fluctuating power supply, hence more self-generation are
resulting in substantial increase in the cost. These challenges are
real and action to combat such a situation in an organized manner has
already been put in place. The start of season 2014 has been sluggish,
owing to late and inadequate rains in March and April. This has
affected the plantations with the late drought ensuring a poor cropping
April. Urgent precipitation is required for the bushes to recover.
AVIATION PRODUCTS AND SERVICES
The Government of India has issued new Defence Procurement Policy 2013.
The Govt. has made a major change whereby ''Make and Buy Indian'' has
been given the highest priority. Buy Global has been made the last
choice. The Govt. expects for greater
participation by the private sector in aerospace manufacture with the
objective of reducing imports.
Major OEMs are assessing Indian companies for JVs / partners for
growing their business by transferring technologies and enhancing
Indian manufacturing capabilities.
Another OEM has issued Request for Proposal (RFP) for providing support
for their equipment. We are in the process of finalizing these
agreements on long term basis. With the addition of these two
agreements, Aerotech Services revenue will grow up substantially.
In RT, all the hard work, investment and commitment to the offset
business in the aerospace and defence domain have begun reaping
benefits. We have also seen traction in 2 of the three main
competencies that we have invested in - wire harness and looms and test
solutions. In the wire harness and looming competency, the Division has
obtained its very first export order from the world''s largest
aircraft manufacturer, The Boeing Company. This breakthrough has paved
the way for more such orders in the future. Apart from the order that
we have received, we had received two more RFPs, one on a single source
basis and the other on a competition basis. We are in final stages of
discussions for the bid submitted on a single source basis and expected
the order to be placed by June, 2014. Deliveries against both these
orders are spread over 3 to 4 years. It is also to be noted that the
Division has started executing the first order and has established
strong credentials and a robust reputation for quality and on time
performance.
Thus, RT Division is well poised for growth in the next 3 to 5 years.
Prospects of rapid growth are now real. The coming year looks exciting
for growth. It also means that the Division will need to also invest in
land and other infrastructure to create the facilities to meet the
challenges of growth.
ROSSELL HOSPITALITY
The QSR Industry in India has undergone significant changes. The
eating habits and preferences of people in India have seen a
significant shift. The industry is experiencing a new era because of
changes in the attitude of the consumers, who wishes to try a new
variety of dishes and food items.
In spite of this current economic scenario, RH is expecting its sales
to be higher in coming months. RH has put forward a strong foothold in
Quick food sector and the prospects are promising. We are delighted to
report that the Division fared reasonably well in the financial year
2013-14 even in the midst of rough macroeconomic headwinds and
intensifying competition, thanks to a visionary foundation and strong
business model, both of which kept us poised to seize the attractive
growth opportunities that came your way.
SUBSIDIARY COMPANY
The fully owned Subsidiary, CAE Rossell India Ltd. did not carry out
any activity during the year under review.
STAFF WELFARE AND SOCIAL ACTIVITIES
The Company continues to espouse the principles of welfare safety and
health of its working force in a clean and congenial environment.
Worker''shealth and well-being continues to be a priority with your
Company. The infrastructure in the areas of welfare schemes, health,
hygiene, education and a clean potable water supply continues to be
strengthened. The sanitation initiative of the UNICEF has been taken
forward very strongly in the last few years. Sanitation for all is a
focus area with your Company.
Your Company is fully aware of its corporate social responsibilities
and our emphasis in respect thereof is briefly enumerated below:
a. Environment
To further enhance this perspective the Company has decided to go in
for Rainforest Alliance for its estates. Sustainable Agriculture,
environmental protection and societal development are its main thrust
areas. At Rossell we would further reinforce these imperatives.
b. Education
Well equipped schools for workers children at all estates.
c. Health
i. Clean potable water for the entire population where our estates are
located.
ii. Well equipped hospital with trained and dedicated staff.
iii. Regular monitoring of pre and post natal care for mother and
child.
iv. A sanitation scheme in partnership with UNICEF.
v. Organizing camps for eye care, pulse polio and regular sterilization
camps.
vi. AIDS awareness
vii. At the grass root level mother''s clubs to disseminate
information on health, hygiene and alcoholism.
viii. Vocational centers for knitting and tailoring
ix. Malaria prevention scheme.
d. Other Areas
The Company is putting in place plans for skill development programmes,
and women empowerment projects.
DIRECTOR''S RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956 (the Act), your
Directors state and confirm the following:
(i) That in preparation of the Company''s Annual Accounts for the year
ended 31st March, 2014 the applicable accounting standards have been
followed and proper explanations have been provided for material
departures, where applicable.
(ii) That the Directors have selected such accounting policies and
applied them 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 at the end of the financial year ended 31st
March, 2014 and of the Profit of the Company for that financial year.
(iii) That 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 irregularity.
(iv) That the Directors have prepared the Annual accounts for the year
ended 31st March, 2014 on a going concern basis.
CORPORATE GOVERNANCE
Your Company is complying with the Corporate Governance Code as
prescribed in Clause 49 (Revised) of the Listing Agreement with the
Stock Exchanges. A separate report on Corporate Governance along with
the Auditor''s Certificate on its compliance is annexed to this report.
DIRECTORS
Mr. P.L. Agarwal, an Independent Director on the Board of the Company
tendered his resignation and ceased to be a Director on and from 28th
March, 2014. Your Directors put on record their gratitude for the
valuable advices given by Mr. Agarwal from time to time during his
tenure as Director.
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet with the criteria of
independence as prescribed under Section 149(6) of the Companies Act,
2013 as well as under Clause 49 of the Listing Agreement
Dr. S. S. Baijal, an Independent Director on the Board of the Company,
re-appointed in the Annual General Meeting held on 11th August, 2011
retires by rotation as per the provisions of Section 256 of the
Companies Act, 1956. Dr. Baijal, being eligible to be an Independent
Director of the Company is proposed to be re-appointed for the period
from the date of the Annual General Meeting to 31st March, 2019,
pursuant to Section 149 (10) of the Companies Act, 2013.
PERSONNEL
Your Directors record their appreciation for contribution and
co-operation of all the employees.
Particulars required to be furnished as per Section 217(2A) of the Act,
read with the Companies (Particulars of Employees) Rules, 1975 (as
amended) in respect of employees of the Company, who were in receipt of
remuneration exceeding Rs 60.00 lakhs per annum where employed for full
year or Rs 5.00 lakhs per month where employed for a part of the year,
are given in Annexure II to this Report.
AUDITORS
M/s. S. S. Kothari & Co., Chartered Accountants, Auditors, retire at
the forthcoming Annual General Meeting and being eligible offer
themselves for re-appointment. The Audit Committee has recommended
their appointment as Auditors of the Company.
For and on behalf of the Board
Place : Delhi
Date : 16th May, 2014 H. M. Gupta
Executive Chairman
Mar 31, 2012
The Directors have pleasure in presenting their Eighteenth Annual
Report together with the Audited Accounts for the year ended 31st
March, 2012.
FINANCIAL RESULTS Rs. in Lakhs
Year ended Year ended
31.03.2012 31.03.2011
Profit before Interest
and Depreciation 2,604.43 2,736.49
Less: Interest (Net of subsidy) 56.17 139.68
Profit before Depreciation 2,548.26 2,596.81
Less : Depreciation 195.74 180.10
Profit before Exceptional Item 2,352.52 2,416.71
Exceptional Item 72.00 -
Profit before Taxation 2,280.52 2,416.71
Less : Provision for
Current Taxation 475.00 485.00
Deferred Taxation adjustment (65.00) 5.00
Profit after Taxation 1,870.52 1,926.71
Add: Balance Brought Forward 429.65 474.11
Profit available for Appropriation 2,300.17 2,400.82
Appropriated as under :
General Reserve 1,800.00 1,800.00
Dividend on Equity Shares
Proposed @ 20% (2011-20%) 146.79 146.79
Tax on Dividend 23.81 24.38
Balance Carried Forward 329.57 429.65
2,300.17 2,400.82
DIVIDEND
Your Directors are pleased to recommend to the Members, for their
approval, a dividend of Rs.0.40 per Equity Share of Rs.2 each in the
Company for the year ended 31st March, 2012.
TURNOVER
The gross turnover of your Company including the receipts for technical
and support services was Rs.7,983.43 lakhs for the current year as
against Rs. 7,593.25 lakhs in the previous year.
Own crop during the year was 39.43 lakh kgs. as against 39.66 lakh kgs.
in the previous year. The total crop inclusive of bought leaf
production was 39.93 lakh kgs., as against 40.03 lakh kgs. in the
previous year. The marginal decline in crop is attributable to adverse
weather conditions in the later part of the year under review.
PERFORMANCE
Rossell Tea
The Directors view with utmost satisfaction your Company's performance
during the year under review. The Company once again achieved averages
which were amongst the highest in the industry and continued to
consolidate its position as amongst the best quality tea producers in
Assam.
The Company's averages for its produce for the year under review was
Rs. 171.52 as against Rs. 170.45 in the previous year. The average for
Assam stood at Rs.122.64 per kg. These averages continue to reflect the
high quality management and efforts that go into making tea at Rossell.
The year 2011 - 12 saw steady CTC prices whilst orthodox prices in the
auctions declined sharply by Rs. 22 per kg. on the back of payment
problems in Iran and teething problems following the introduction of
the e-auction for orthodox teas. However, outperforming the market
your Company achieved averages marginally higher than previous year.
This was made possible by higher exports of orthodox teas during the
year and this, under the given circumstances, was a noteworthy
performance. Exports grew 58% in volume terms, whilst realization
values were higher by 9.76%.
Climate change continued to affect production levels. The period
October 2011 to March 2012 saw one of the driest periods in the history
of tea cultivation and this resulted in a very poor back end crop. In
March 2012, with the continuing drought the Company's production was
again affected resulting in a total annual production of 39.93 lac kgs
for the year under review. However, our investments in the area of
irrigation helped restrict the impact of the drought to a great extent.
During the year, the Company continued to upgrade and modernize its
assets. Field development continued with uprooting and replanting
targets being fully met. The Company has over the years continued to
take a long term development perspective and this policy continues
unchanged.
Our continuing policy of a prudent product mix once again paid
dividends and helped in maintaining profitability at around 2010-11
levels. However 2011-12 saw very high inflationary levels with costs of
all inputs rising to unexpected levels. The recent wage agreement in
Assam will further affect the cost of production.
Aviation Products and Services
During the year under review, Vankesh Avionics Technologies Division
has been rechristened as Rossell Techsys in May 2011. Simultaneously, a
new world class facility has been setup in Bangalore which is involved
in customized engineering solutions. The Company's main thrust areas
are manufacture of loom and harnesses, design and development of
automatic test equipment, system integration and embedded software
solutions. Rossell Techsys has achieved international quality standards
by getting AS 9100 Rev C and supplied equipments to various Public
Sector Undertakings and Defense Research & Development Organizations.
Ameritech Services continues to provide product support services for OEM
equipments fitted on various aircraft, helicopters and ships in India.
As per the long term contract, the quantum of work has increased adding
ground based platforms.
Russell Hospitality
A new Division known as Rossell Hospitality was created on and from 1st
December, 2011. This Division of the Company has decided to start an
Indian Quick Service Restaurant (QSR) chain which would be called
"Kebab Xpress".
PROSPECTS Rossell Tea
World Black Tea production in 2011 has been lower by 25.75 million kgs.
compared to 2010. African production was lower across the board, led by
Kenya which saw a decline of 21.10 million kgs. Indian production of
988 million kgs. though higher by 22 million kgs. over the previous
year, belied the early season hope of achieving 1.0 billion kgs. of
production for the year, due to very dry conditions from October 2011
to March 2012. The opening to the new season globally, has been slow
and all major black tea producing countries i.e. India, Sri Lanka and
Kenya are running behind last year.
Poor back end crops have resulted in very tight opening stocks in the
new season especially for CTC teas. The cumulative shortage in the
market clearly indicates that CTC prices will be very buoyant and
prices thus far confirm this. We expect CTCs to sell well through the
year. There will be a large price concertina difference between medium
and good teas. Orthodox too should sell well at levels higher than the
previous year. Quality would continue to be the buzzword through 2012,
along with the rising consumption trends in India.
Each year presents new challenges, be it drought, erratic weather
patterns, or uncertain conditions in major orthodox consuming countries
or rising cost of production. However, your Directors still view the
year ahead with cautious optimism.
Aviation Products and Services
Rossell Techsys has signed a Memorandum of Understanding (MOUs) as an
offset partner with Original Equipment Manufacturers (OEMs) against
various defense and aviation contracts already signed between Ministry
of Defiance and foreign OEMs. We envisage significant growth in the
offset segment.
Aerotech Services has been approached by new OEMs to provide product
support services for their equipment fitted on various platforms.
Rossell Hospitality
Your Company initially proposes to open outlets in Delhi and will
expand within India and thereafter globally. With a population of 1.2
Billion, India represents one of the largest consumer markets in the
world. Additionally, the country enjoys one of the largest and most
balanced demographics in terms of age, as India has more than 50% of
its population below the age of 25 and more than 65% is below the age
of 35. The tremendous growth in its population of young people is
likely to bring about a shift in the Indian food service trends, as the
young population drives the demand for processed foods. This would
provide an impetus for the growth of the food service industry. The
quick service restaurant landscape is dominated by western food chains
offering western food with very limited Indianisation of the menu. Two
income families and larger disposable income in India have generated
demand for different type of food services, and QSR format addresses an
important need of customers. The growth opportunities for Indian Fast
Food has great potential in both India and globally.
SUBSIDIARY COMPANIES
During the year under review the entire shareholdings of Sigma
Microsystems Private Limited was divested and sold on 29th June, 2011.
Consequently, this Company ceased to be a Subsidiary of the Company
thereafter.
Rossell Aviation Private Limited, the fully owned Subsidiary of your
Company as on 31st March, 2012, entered into a Joint Venture Agreement
with CAE International Holdings Ltd., Canada on 4th August, 2011,
subject to approval from the Foreign Investment Promotion Board (FIPB).
The required approval has since been received. The Company is in the
process of changing its name to CAE Rossell India Ltd.
Upon implementation of the said Agreement, the Company will provide
training solutions for projects primarily related to the Offset
obligations that foreign OEMs need to fulfill under their contract with
the Ministry of Defence. The Company will undertake installation,
maintenance and operation of Simulators for the life of the program.
DIVESTMENT IN LEMON TREE HOTELS
As you will observe from the accounts, your Company had invested Rs.
2,947.51 lakhs as on 31st March, 2012 in Lemon Tree Hotels. Your
Company has since sold and transferred its entire shareholding in Lemon
Tree Hotels on 30th April, 2012 at an attractive price.
ACQUISITION OF NAMSANG TEA ESTATE
Your Company has signed an agreement dated 20th April, 2012 with
Dhunseri Petrochem & Tea Ltd., Kolkata to purchase and acquire their
Namsang T. E., Dibrugarh, Assam as a going concern in June, 2012.
This will enlarge the production base of your Company, which would
surpass 5 million kgs. shortly.
Keeping in view our expansion plans, your Directors are on the look out
for more Tea Estates both in India and overseas.
STAFF WELFARE AND SOCIAL ACTIVITIES
The Company has always espoused the principles which encompass welfare,
health and safety of the employees at all levels. Workers health and
well-being continues to be a priority with your Company. The
infrastructure in the areas of welfare schemes, health, hygiene,
education and water supply is being further upgraded. The sanitation
initiative undertaken with UNICEF has been taken to the next level in
the year under review.
Your Company is fully aware of its Corporate Social Responsibilities
and our emphasis in respect thereof is briefly enumerated below:
a. Environment
To adopt environmental friendly agriculture and manufacturing policies.
b. Education
Well equipped schools for workers' children at all Estates.
c. Health
i. Clean potable water for the entire population in the area where our
Estates are located.
ii. Well equipped hospital with trained staff.
iii. A sanitation scheme in partnership with UNICEF.
iv. Organizing camps for eye care, pulse polio for children and
regular camps for sterilization.
v At the grass root level, mothers club to disseminate information on
health, hygiene and alcoholism.
vi. Vocational centre's for knitting and tailoring.
vii. Malaria prevention scheme.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956 (the Act), your
Directors state and confirm the following:
(i) That in preparation of the Company's Annual Accounts for the year
ended 31st March, 2012 the applicable accounting standards have been
followed and proper explanations have been provided for material
departures, where applicable.
(ii) That the Directors have selected such accounting policies and
applied them 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 at the end of the financial year ended 31st
March, 2012 and of the Profit of the Company for that financial year.
(iii) That 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 irregularity.
(iv) That the Directors have prepared the Annual Accounts for the year
ended 31st March, 2012 on a going concern basis.
CORPORATE GOVERNANCE
Your Company is complying with the Corporate Governance Code as
prescribed in Clause 49 (Revised) of the Listing Agreement with the
Stock Exchanges. A separate report on Corporate Governance along with
the Auditors' Certificate on its compliance is annexed to this report.
DIRECTORS
In accordance with the provisions of Article 150 of the Articles of
Association of the Company, Mr. V. P. Agarwal retires at the
forthcoming Annual General Meeting, but being eligible offers himself
for re-appointment.
The terms of appointment of Mr. H. M. Gupta, Executive Chairman expired
on 30th April, 2012. Accordingly, in the Meeting of the Board of
Directors held on 17th April, 2012 and 17th May, 2012, he was
re-appointed as Executive Chairman for a further period of three years
from 1st May, 2012 to 30th April, 2015, subject to approval by the
Members of the Company in the ensuing Annual General Meeting.
COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF
DIRECTORS) RULES, 1988
Your Directors are pleased to provide the information required to be
disclosed in accordance with Section 217(1)(e) of the Act, read with
the above Rules, in Annexure I hereto forming part of the Report.
PERSONNEL
Your Directors record their appreciation for contribution and
co-operation of all the employees.
Particulars required to be furnished as per Section 217(2A) of the Act,
read with the Companies (Particulars of Employees) Rules, 1975 (as
amended) in respect of employees of the Company, who were in receipt of
remuneration exceeding Rs.60.00 lakhs per annum where employed for full
year or Rs.5.00 lakhs per month where employed for a part of the year,
are given in Annexure II to this Report.
AUDITORS
M/s. S. S. Kothari & Co., Chartered Accountants, Auditors, retire at
the forthcoming Annual General Meeting and being eligible offer
themselves for re-appointment. The Audit Committee has recommended
their appointment as Auditors of the Company.
For and on behalf of the Board
Place : Kolkata H. M. Gupta
Date : 17th May, 2012 Executive Chairman
Mar 31, 2011
The Directors have pleasure in presenting their Seventeenth Annual
Report together with the Audited Accounts for the year ended 31st
March, 2011.
CHANGE OF NAME OF THE COMPANY
As approved by you by way of Special Resolutions passed by Postal
Ballot on 7th April, 2011, the name of the Company has been changed to
ROSSELL INDIA LIMITED as per the Fresh Certificate of Incorporation
consequent upon Change of Name dated 19th April, 2011 issued by the
Assistant Registrar of Companies, West Bengal.
SUB DIVISION OF EQUITY SHARES
As approved by you by way of Ordinary Resolutions passed by Postal
Ballot on 21st December, 2010, each Equity Share of Rs.10 each of the
Company was sub divided into 5 Equity Shares of Rs. 2 each. The new
Equity Shares were allotted on 22nd January, 2011.
FINANCIAL RESULTS Year ended Year ended
31.03.2011 31.03.2010
Rs. in Lacs Rs. in Lacs
Profit before Interest and Depreciation 2,735.15 2,890.37
Less: Interest (Net of subsidy) 138.34 227.11
Profit before Depreciation 2,596.81 2,663.26
Less : Depreciation 180.10 164.17
Profit before Taxation 2,416.71 2,499.09
Less : Provision for Current Taxation 485.00 500.00
Deferred Taxation adjustment 5.00 68.00
Profit after Taxation 1,926.71 1,931.09
Add : Balance Brought Forward 474.11 214.75
Profit available for Appropriation 2,400.82 2,145.84
Appropriated as under :
General Reserve 1,800.00 1,500.00
Dividend on Equity Shares
-Interim Paid @ Nil
(2010-10% on Equity Share Rs. 10 ) - 73.39
- Final proposed @ 20%
(2010-10% on Equity Share Rs. 10 ) 146.79 73.39
Tax on Dividend 24.38 24.95
Balance Carried Forward 429.65 474.11
2,400.82 2,145.84
DIVIDEND
Your Directors are pleased to recommend to the Members, for their
approval, a dividend of Rs.0.40 per Equity Shares of Rs.2 each in the
Company for the year ended 31st March, 2011.
TURNOVER
The gross turnover of your Company including the receipts for technical
and support services was Rs.7,593.25 lac for the current year as
against Rs. 7,646.41 lac in the previous year.
Own crop during the year was 39.66 lac kgs. as against 42.67 lac kgs.
in the previous year. The total crop inclusive of bought leaf
production was 40.03 lac kgs., as against 42.89 lac kgs. in the
previous year. The decline in crop is attributable directly to very
adverse weather conditions and severe pests infestation on the South
Bank Estates during the year under review.
PERFORMANCE Rossell Tea
The Directors view with great satisfaction your Companys performance
for the year under review. Company achieved averages which were the
highest in the industry and continued to retain its position as amongst
the best quality producers of Orthodox Tea.
Companys average for its produce for the year 2010-11 was Rs. 170.45
per kg. as against Rs.159.68 per kg. registering an increase of 6.75%.
The average for Assam stood at Rs.129.00 per kg. These averages reflect
the effort and standards that go into making tea at Rossell.
Company continued to upgrade and modernize its assets and facilities.
The Companys policy of uprooting and replanting to replace ageing
bushes in the field continues to be an ongoing developmental policy
with a long term perspective.
Inclement weather conditions followed by a widespread attack of
helopeltis in June 2010 hit all Estates in Upper Assam. As with all
other companies, this resulted in a loss of valuable second flush crop
on all Estates located in the area. Company was able to overcome these
negatives and this loss was minimized. Our continued policy of
maximizing quality orthodox production, resulted in maintaining
profitability almost at the same levels as the previous year inspite of
7.05% lower crop for the year and rising prices of all inputs and
resultant inflationary pressures.
Aviation Products and Services
During the year 2010-11 the turnover of the company from Aviation
Products and Services was Rs.835.89 lacs as against Rs.839.24 lacs in
the year 2009-10.The profit before interest and tax was Rs.347.97 lacs
as against Rs.446.74 lacs in the previous year.
Aerotech Services Division as per the long term agreements signed with
multi national companies, continued providing product support services
for their equipments fitted on various aircraft, helicopters and ships
in India.
Vankesh Avionics Technologies is involved in design, development and
production. It has continued with its main thrust areas, namely,
harnessing and loom manufacture, testing and integration, systems
integration, design and development of Automatic Test Equipment.
Company has supplied equipments to various Public Sector Undertakings
and various Defence Research & Development Organisations.
PROSPECTS
Rossell Tea
With pipeline stocks very tight and a cumulative shortage internally of
over 80 million kgs, fuelled by rising consumption, the Indian market
continues to be demand led. The shortfall in the global tea market
eased significantly in 2010 on the back of large increase in production
out of Kenya and Sri Lanka. On the domestic front in 2010, the Indian
production was 966 million kgs. as against 979 million kgs. in 2009.
Overall the prospects in 2011 reflect a strong market for CTC teas
which we expect will sell strongly through the year at most
satisfactory levels.
The orthodox teas have started season 2011 strongly. We look forward to
the Government of India resolving the banking imbroglio for continued
exports to Iran. Nonetheless a quality product will continue to sell
well, be it CTC or Orthodox. Your directors view the year ahead with
cautious optimism.
Aviation Products and Services
Against various defence and aviation contracts already signed between
Ministry of Defence and foreign Original Equipment Manufacturers
(OEMs), we envisage that from the second half of this year, these
foreign companies will now start giving offset contracts to Indian
companies.
STAFF WELFARE AND SOCIAL ACTIVITIES
The Company continues to espouse the principles of welfare, safety and
health of its working force in a clean and congenial environment.
Workers health and well-being continues to be a priority with your
Company. The infrastructure in the areas of welfare schemes, health,
hygiene, education and a clean potable water supply continues to be
strengthened. The sanitation initiative of the UNICEF has been taken
forward very strongly in the year under review. Sanitation for all is a
focus area with your Company.
Your Company is fully aware of its corporate social responsibilities
and our emphasis in respect thereof is briefly enumerated below :
a. Environment
To adopt a holistic approach towards the protection of the environment,
through sustainable pursuit of agriculture as also through good
manufacturing practices. Awareness camps on the environment are held
regularly on all estates.
b. Education
Well equipped schools for workers children at all Estates.
c. Health
i. Clean potable water for the entire population where our Estates are
located.
ii. Well equipped hospital with trained and dedicated staff.
iii. Regular monitoring of pre and post natal care for mother and
child.
iv. A sanitation scheme in partnership with UNICEF.
v. Organizing camps for eye care, pulse polio and regular
sterilization camps.
vi. AIDS awareness.
vii. At the grass root level mothers clubs to disseminate information
on health, hygiene and alcoholism.
viii. Vocational centers for knitting and tailoring.
ix. Malaria prevention scheme.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956 (the Act), your
Directors state and confirm the following:
(i) That in preparation of the Companys Annual Accounts for the year
ended 31st March, 2011 the applicable accounting standards have been
followed and proper explanations have been provided for material
departures, where applicable.
(ii) That the Directors have selected such accounting policies and
applied them consistently and made judgements and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year ended 31st
March, 2011 and of the Profit of the Company for that financial year.
(iii) That 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 irregularity.
(iv) That the Directors have prepared the Annual Accounts for the year
ended 31st March, 2011 on a going concern basis.
CORPORATE GOVERNANCE
Your Company is complying with the Corporate Governance Code as
prescribed in Clause 49 (Revised) of the Listing Agreement with the
Stock Exchanges. A separate report on Corporate Governance along with
the Auditors Certificate on its compliance is annexed to this report.
DIRECTORS
In accordance with the provisions of Article 150 of the Articles of
Association of the Company, Dr. S.S. Baijal retires at the forthcoming
Annual General Meeting, but being eligible offers himself for
re-appointment.
COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF
DIRECTORS) RULES, 1988
Your Directors are pleased to provide the information required to be
disclosed in accordance with Section 217(1)(e) of the Act, read with
the above Rules, in Annexure I hereto forming part of the Report.
For and on behalf of the Board
H. M. Gupta
Executive Chairman
Place : Kolkata
Date : 18th May, 2011
Mar 31, 2010
The Directors have pleasure in presenting their Sixteenth Annual
Report together with the Audited Accounts for the year ended 31st
March, 2010.
FINANCIAL RESULTS
Year ended Year ended
31.03.2010 31.03.2009
Rs. in Lacs Rs. in Lacs
Profit before Interest and Depreciation 2,890.37 1,352.82
Less: Interest (Net of subsidy) 227.11 209.53
Profit before Depreciation 2,663.26 1,143.29
Less: Depreciation 164.17 136.61
Profit before Taxation 2,499.09 1,006.68
Less: Fringe Benefit Tax - 12.50
Provision for Current Taxation 500.00 185.00
Deferred Taxation adjustment 68.00 113.00
Profit after Taxation 1,931.09 696.18
Balance Brought Forward 214.75 356.76
Transfer from Exchange Rate Variation Reserve - 90.61
Profit available for Appropriation 2,145.84 1,143.55
Appropriated as under:
General Reserve 1,500.00 800.00
Dividend on Equity Shares
- Interim Paid @ 10% 73.39 -
- Final proposed @ 10% (2009-15%) 73.39 110.09
Tax on Dividend 24.95 18.71
Balance Carried Forward 474.11 214.75
2,145.84 1,143.55
DIVIDEND
Your Directors at its Meeting held on 28th October, 2009 declared an
interim dividend of Rs.1.00 per Equity Share of Rs.10 each in the
Company. The Directors are now pleased to recommend to the Members, for
their approval, a dividend of Rs.1.00 per Equity Shares of Rs.10 each
in the Company aggregating Rs.2.00 per Equity Share i.e. 20% on the
Equity Share Capital of the Company for the year ended 31st March,
2010, as against 15% paid for the year ended 31st March, 2009.
TURNOVER
The gross turnover of your Company, including the receipts for
technical and support services was Rs.7,646.41 lacs for the current
year as against Rs.5,751.78 lacs in the previous year.
Own crop during the year was 42.67 lac kgs. against 41.52 lac kgs. of
the previous year. The total crop inclusive of bought leaf production
was 42.89 lac kgs. as against 41.67 lac kgs. of the previous year.
PERFORMANCE
Rossell Tea
The Directors view with utmost satisfaction your Companys performance
during the year under review. The Company continued to build on the
good performance of the recent past and achieved price averages which
were among the highest in the Industry. With consistent quality levels
your Company outperformed the market.
The Company continued its focus on the quality standards of its produce
and maximized production of Orthodox Teas, which constitutes nearly 75%
of its annual production. The CTC Teas produced during the year also
met with good demand.
The Company continued to upgrade and modernize its manufacturing
facilities. The Companys policy of uprooting and replanting to replace
ageing bushes on the field is an ongoing development activity.
The Companys average for its produce for the year 2009-10 was Rs.
159.68 per kg. as against Rs. 128.46 for the year 2008-09, an increase
of Rs.31.22 per kg. or 24.30% in 2009-10 over that of 2008-09. The
average for Assam for the year 2009-10 stood at Rs.121.06 per kg. The
averages fetched by the Company reflect the high quality standards
achieved over the years.
Aviation Products and Services
During the year 2009-10, the turnover of the Company from Aviation
Products and Services was Rs.839.24 lacs as against Rs.388.26 lacs in
year 2008-09, indicating a growth of more than 116%. The profit before
interest and tax also increased substantially to Rs.446.74 lacs as
against a profit of Rs.87.54 lacs only in the previous year.
Aerotech Services Division has successfully signed long term agreement
with multi national companies for providing product support services
for their equipments fitted on various aircrafts, helicopters and ships
in India. It is also involved in integration and installation of
navigation equipments at more than 50 different locations all over
India.
Vankesh Avionics Technologies became a Division of the Company in
October, 2008 and was primarily involved in design and development.
However, since the Companys take over, it has been converted into a
production unit. Its main thrust areas are harness and loom
manufacturing, testing and integration, system integration, design and
development of Automatic Test Equipments (ATEs) for ground testing of
aircraft and spacecraft sub- systems.
PROSPECTS
The season 2010 - 11 commenced with a very large global mismatch of
supply and demand due to poor crops in 2009 - 10 in Kenya and Sri
Lanka. However in a matter of months the crop situation reversed itself
in India, Kenya and Sri Lanka, and by end - March, 2010 world crops
were +82.9 million kgs. (+35%). This has to an extent changed the
scenario somewhat on the supply side despite reports of a drought in
China. Demand thus far has been good and prices overall higher than
last year for the orthodox categories, whilst CTCs are marginally
lower.
In the immediate term we expect prices to rule firm during June and
July, 2010. However as larger quantities come to the market, August,
2010 onwards, quality will determine price levels. Your Company feels
the continued emphasis on a quality product could alleviate any
negative trends due to larger crops worldwide.
Despite the changed scenario your Directors view the year ahead with
cautious optimism.
Aviation Products and Services
Vankesh Avionics Technologies Division is supplying equipments to
various Public Sector Undertakings such as Bharat Dyamics Ltd., Bharat
Electronics Ltd., Hindustan Aeronautics Ltd, various Defence Research &
Development Organisations etc. As stated earlier Aerotech Services
already has certain long-term agreements in place.
We expect to avail further opportunities that are emerging from the
Government of Indias Defence offset rules for multinational companies
through our avionics related products.
Thus, the overall performance of Aviation Products and Services
business segments of the Company is expected to be good in the medium
to long term.
STAFF WELFARE AND SOCIAL ACTIVITIES
The Company has always espoused the principles which encompass welfare,
health and safety of the employees at all levels. Workers health and
well-being continues to be a priority with your Company. The
infrastructure in the areas of welfare schemes, health, hygiene,
education and water supply is being further upgraded. The sanitation
initiative undertaken with UNICEF has been taken to the next level in
the year under review.
Your Company is fully aware of its Corporate Social Responsibilities
and our emphasis in respect thereof is briefly enumerated below:
a. Environment
To adopt environmental friendly agriculture and good manufacturing
practices.
b. Education
Well equipped schools for workers children at all Estates.
c. Health
i. Clean potable water for the entire population in the area where our
Estates are located.
ii. Well equipped hospital with trained staff.
iii. A sanitation scheme in partnership with UNICEF.
iv. Organizing camps for eye care, pulse polio for children and
regular camps for sterilization.
v. At the grass root level mothers club to disseminate information on
health, hygiene and alcoholism.
vi. Vocational centres for knitting and tailoring.
vii. Malaria prevention scheme.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956 (the Act), your
Directors state and confirm the following:
(i) That in preparation of the Companys Annual Accounts for the year
ended 31st March, 2010 the applicable accounting standards have been
followed and proper explanations have been provided for material
departures, where applicable.
(ii) That the Directors have selected such accounting policies and
applied them consistently and made judgements and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year ended 31s1
March, 2010 and of the Profit of the Company for that financial year.
(iii) That 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 irregularity.
(iv) That the Directors have prepared the Annual Accounts for the year
ended 31st March, 2010 on a going concern basis.
CORPORATE GOVERNANCE
Your Company is complying with the Corporate Governance Code as
prescribed in Clause 49 (Revised) of the Listing Agreement with the
Stock Exchanges. A separate report on Corporate Governance along with
the Auditors Certificate on its compliance is annexed to this report.
DIRECTORS
The terms of appointment of Mr. C. S. Bedi, Managing Director is due to
expire on 30th September, 2010. Accordingly, at the Meeting of the
Board of Directors held on 26th May, 2010 it was proposed that he be
re- appointed for a further period of three years from 1st October,
2010 to 30th September, 2013, subject to your approval in the ensuing
Annual General Meeting.
In accordance with the provisions of Article 150 of the Articles of
Association of the Company, Mr. H. M. Parekh and Mr. P. L. Agarwal
retire at the forthcoming Annual General Meeting, but being eligible
offer themselves for re- appointment.
COMPANIES (DISCLOSURE OF PARTICULARS INTHE REPORT OFTHE BOARD OF
DIRECTORS) RULES, 1988
Your Directors are pleased to provide the information required to be
disclosed in accordance with Section 217(1 )(e) of the Act, read with
the above Rules, in Annexure I hereto forming part of the Report.
PERSONNEL
Your Directors record their appreciation for contribution and
co-operation of all the employees.
Particulars required to be furnished as per Section 217(2A) of the Act,
read with the Companies (Particulars of Employees) Rules, 1975 (as
amended) in respect of employees of the Company, who were in receipt of
remuneration exceeding Rs.24.00 lacs per annum where employed for full
year or Rs.2.00 lacs per month where employed for a part of the year,
are given in Annexure II to this Report.
AUDITORS
M/s. S. S. Kothari & Co., Chartered Accountants, Auditors, retire at
the forthcoming Annual General Meeting and being eligible offer
themselves for re-appointment. The Audit Committee has recommended
their appointment as Auditors of the Company.
For and on behalf of the Board
Place : Kolkata H.M.Gupta
Date : 26th May, 2010 Executive Chairman
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article