Rossell India Ltd
Directors Reports
For The Financial Year Ended 31st March, 2023
Dear Members,
Your Directors are pleased to present their Twenty Ninth Annual Report
together with the Audited Accounts for the year ended 31st March, 2023.
Financial Summary Highlights
| Particulars |
Year ended 31st March 2023 |
Year ended 31st March 2022 |
| Total Income |
35,753.68 |
30,328.59 |
| Profit before finance cost and Depreciation |
5,647.17 |
4,908.21 |
| Less : Finance Cost |
1,177.55 |
998.94 |
| Profit before Depreciation |
4,469.62 |
3,909.27 |
| Less : Depreciation |
1,373,24 |
1,245.12 |
| Profit before Extraordinary Item |
3,096.38 |
2,664.15 |
| Add: Extraordinary Item |
- |
658.78 |
| Profit before Taxation |
3.096.38 |
3,322.93 |
| Less : Provision for Current Taxation |
300.00 |
300.00 |
| Deferred Taxation Adjustment |
59.34 |
46.66 |
| Profit After Taxation |
2,737,04 |
2,976.27 |
| Other Comprehensive Income (Net of Tax) |
(132,81) |
151.99 |
| Total Comprehensive Income |
2,604.23 |
3,128.26 |
Share Capital
The issued, subscribed and paid up share capital of the Company as on
31st March, 2023 was at ' 753.93 lakh divided into 3,76,96,475 Equity Shares of ' 2 each.
During the year under review, the Board of Directors by adopting a
Resolution through Circulation on 27th June, 2022, allotted 10,00,000 0.01% Compulsory
Convertible Preference Shares(CCPS) of face value of ' 10 each at an issue price of ' 156
including securities premium of ' 146 per CCPS aggregating to ' 15,60,00,000 (Fifteen
Crores Sixty Lakhs Only) on preferential basis to BMG Enterprises Limited, Holding Company
('Allottee'), being part of the Promoters Group, in terms of approval obtained from
Members of the Company by way of Special Resolution at the Extra-ordinary General Meeting
held on 21st April, 2022.
Further, pursuant to the option exercised by the Allottee as per terms
of issue of CCPS, the Board of Directors at its Meeting held on 16th December, 2022
approved the conversion of entire CCPS into Equity Shares and allotted 10,00,000 Equity
Shares of ' 2 each, ranking pari passu in all respect with the existing Equity Shares of
the Company.
In compliance with the applicable provisions of SEBI (Issue of Capital
and Disclosure Requirements) Regulations, 2018 and guidelines issued by BSE Limited (BSE)
and National Stock Exchange of India Limited (NSE), the Trading Approval for 10,00,000
Equity Shares of ' 2 each arising from conversion of aforesaid CCPS were obtained from
both the Stock Exchanges viz. BSE and NSE on 3rd March, 2023, which became effective from
6th March, 2023.
Post aforesaid approval of Stock Exchanges, the total listed paid-up
Share Capital of the Company on BSE and NSE stands increased from ' 7,33,92,950 comprising
of 3,66,96,475 Equity Shares of ' 2 each to ' 7,53,92,950 comprising of 3,76,96,475 Equity
Shares of ' 2 each.
Apart from above, the Company has not issued any shares with
differential voting rights, employee stock options and sweat Equity Shares.
Appropriation Of Profit After Tax For Transfer To Reserves
During the Financial Year 2022-2023, 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 ' 126.95 lakhs was kept as retained earnings.
Dividend
Your Directors are pleased to recommend to the Members, for their
approval, a Dividend of Re.0.40 per Equity Share of ' 2 each (i.e 20% on the paid up
capital) in the Company for the year ended 31st March, 2023.
The Dividend recommended is in accordance with the Company's Dividend
Distribution Policy as framed by the Board of Directors on 9th February, 2022. This
Dividend Distribution Policy of the Company is available on the Company's website and can
be accessed at
https://www.rossellindia.com/wp-content/uploads/2022/07/Dividend-Distribution-Policy.pdf.
The State Of Company's Affairs Revenue
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 higher
by 18.24% at ' 35,358.32 lakhs as against ' 29,902.80 lakhs for the previous financial
year 2021-2022.
Performance
Rossell Tea
Your Directors' are extremely satisfied with the excellent performance
of Rossell Tea Division for the financial year 2022-23. Even though extreme weather
conditions were experienced with excessive rainfall, we were able to produce 51.99 lakh
kgs own crop and 4.61 lakh kgs from bought leaf aggregating to 56.60 lakh kgs, which
happens to be the highest crop ever produced from the existing 6 Tea Estates. High quality
Orthodox and CTC compliant teas were outturned and "Rossell Tea" continues to be
the benchmark for the Industry in both the categories for its customers in the domestic
and global markets.
Orthodox production was maximized as the price realization of this
category was much higher than the CTC variety on the back drop of lower Orthodox
production at Sri Lanka.
The CTC prices which opened firm in the beginning of the year, dropped
and were lower in May and June due to the high production in April/ May. Thereafter the
CTC prices were quite firm till October and again started dropping from November till the
end of the season owing to overproduction and less demand and consumption.
The Orthodox market opened low initially due to the sanctions on Iran
and also due to the global trade being impacted owing to the pandemic. However, once the
shortfall in crop started emanating from Sri Lanka, the prices were spiraling. A number of
producers shifted to Orthodox production due to the high Orthodox prices in the Domestic
market. We too curtailed our CTC production and made more Orthodox at our Estates for
better value. Orthodox production was 30.58 lakh kgs as compared to 22.29 lakh kgs in the
previous year. CTC production was 26.02 lakh kgs as compared to 29.44 lakh kgs.
Our Orthodox sale averages are ' 301.65 per kg as against ' 249.73 in
the previous year and in the CTC category ' 284.03 as against ' 291.70 per kg.
In both the categories of teas our averages are significantly higher
than the Industry averages for Assam estates, which are ' 282.69 for Orthodox and ' 224.53
for CTC.
We have achieved the highest ever sale average of ' 290.29 per kg for
our teas.
Exports during the financial year was 6.32 lakh kgs as against 6.83
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
their teas are much cheaper and also due to the logistic location. Another factor which
has contributed to the lower exports is the ongoing Ukraine conflict which has led to high
inflation and recession worldwide.
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 total income of the Division has increased from ' 14,644.76 lakhs
to ' 16,689.79 lakhs which is the highest ever turnover recorded for the Division.
Rossell Techsys
It can now be confidently stated that the Aerospace and Defense
industry has emerged out of the effects of the pandemic. In addition, it can also be
stated that in 2024 the industry would have exceeded the pre-pandemic levels. The
Division's largest customer has shown a very encouraging and positive trend of growing by
over 12% in 2022-2023. Most of the Division's customers forecast that 2024 will be a year
of complete turnaround. The three major Original Equipment Manufacturers (OEMs), Boeing,
Lockheed Matin and Honeywell, contribute close to 85% of the Division's revenue. Of the
three OeM's Honeywell business has grown by over 100%. The Division has been successful in
capturing new customers, commencing mid of 2022 and through the first quarter of 2023. The
new customers are IAI in Israel, SFC in Germany, Telair (a Transdigm company) in Germany,
and has positive signs of adding new major OEMs in 2023. IAI, the Division's newest
customer, shows exceptional growth rates predicted in 2024 and beyond. The timing for
acquiring IAI as a customer has been significant and can turn out to be a booster
opportunity for further growth for the Division.
The Division, being in the electrical sub-assembly business, is bound
to experience this same buoyancy in 2024-2025. The Division has posted a significant
increase in revenue in the fiscal year 2022-2023. The growth has been around 22%. The
Division continued to maintain its high credibility and brand image across the board and
has established itself as leader in its competencies. The Division delivered more than
22,000 manufactured parts in the year, maintaining consistently lofty standards of quality
and delivery. The key factor in the year 2022-2023 has been the rise in product mix to
cover niche areas of critical aircraft engine harnesses, in a "Built to
Specification" model, significantly enhancing the design and engineering capabilities
of the Division. This has opened out further avenues not only with existing customers but
also with new customers.
The Division has experienced an increase of 12% in Request for
Proposals (RFPs) from customers. This has resulted in an increase in order booking for FY
2022-2023 by over 16%. The number of customers has increased by over 50% and the customer
count at the close of the fiscal year stood at 20.
Prospects Rossell Tea
The year 2023 has started with conducive growing conditions in Assam as
well as West Bengal resulting in good cropping during the period of January to March 2023,
wherein the production in North India stands at 66 million kgs as compared to 54 million
kgs last year.
Production in Sri Lanka for January to March 2023 period is lower by
4.80 million kgs from last year and compared to 2021 is 16.00 million kgs lower. Kenya is
marginally behind by 2.00 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 35% of the offerings remaining unsold. To-date price
average at Mombasa auctions is $2.16 as compared to $2.42 last year. The prices are low
due to over- supply and weaker demand.
In Sri Lanka due to shortage of teas on offer, the average prices at
the auctions has shot up substantially and is around ' 130 per kg more than the prevailing
orthodox prices in India. As per the latest information available even at the last auction
held in Colombo, the market was very strong though slightly lower than the earlier weeks
with aggressive buying from most of the importers in spite of the ongoing conflict between
Russia and Ukraine. Sri Lanka seems to have entered into some kind of a barter system with
Iran for its Tea exports. The largest importers of Tea from Sri Lanka this year are
Turkey, Russia and Iraq.
In India the Orthodox market has been very sluggish as Iran which is
the largest importer of Indian orthodox tea has not been issuing fresh orders since
December 2022 as inflation has hit their economy severely. The inflation is around 48% and
the sanctions have crippled their economy.
Moreover, seeing the firm market for orthodox teas in 2022 a large
number of producers in India maximized orthodox production in the 1st flush of 2023
resulting in over 3 million kgs more of Orthodox production.
The CTC market which had started on a slightly subdued note initially
due to carry forward stocks and lower demand should start perking up from June on the
backdrop of a lower April crop and improved quality of tea. Thus, to conclude good quality
CTC would continue to sell at remunerative prices and anything below good will decline in
prices. The Orthodox category will remain subdued though there will be higher demand
during the 2nd flush from the continent.
We at Rossell Tea in spite of the adversity, 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 .We are happy to state that we
have been able to conclude a contract for significant quantity of our CTC produce from
Romai TE with the most reputed buyer, Taylors of Harrogate, UK at an average which is at a
much higher rate than the previous year. Another contract has been made with Ekaterra for
supply of our CTC teas to Egypt. We are very hopeful that with progress of the season, we
would be able to procure sufficient export orders from Germany, UAE, UK, and Saudi Arabia.
The Indian Tea Industry is faced with a number of issues, some of them
are highlighted hereunder.
. Due to the very high inflation in Iran and shortage of currency the
demand for Orthodox teas is lacking and resulting in low prices. . 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.
. High inflation in the domestic market as well as globally has led to
lower demand.
. 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.
. There is likelihood of an interim wage hike for the daily rated
workers from June and in early 2024, we may see the minimum wages being rolled out.
. To summarize we feel that the production may be more than the
previous year and could be in line with 2019. As a result, CTC prices may be somewhat
similar to last year, the orthodox prices will be much lower than the previous year.
However, the biggest challenge will be to rein in the escalating costs
particularly wages and fuel.
Rossell Techsys
In just the first two months of the fiscal year, the number of RFPs has
increased significantly over the previous year. The Division is confident that the number
of customers will also increase. The Division continues to receive opportunities in
diverse areas in Electrical Wiring and Interconnect Systems (EWIS), Complex Consoles, Box
Builds, Automatic Test Equipment (ATE's), Electrical Panel Assemblies (EPAs), After Market
product support services. The philosophy of risk sharing on the right opportunity and for
new customers has had its rewards.
The Division won a large size strategic contract for a new airborne
military platform, the T7-A trainer, for which the Division had proactively invested in.
The value of this single strategic agreement is more than $100 Million. It was also
declared one of the winners for the F16 platform for Electrical Panels. This is in
addition to the Wire harnesses that are already being delivered for the F16. The key
aspect of this win is that it provides the Division with the opportunity to further
enhance its skill and capability in electrical panel assemblies.
The Division is expected to be a significant contributor of EWIS and
EPA parts for the coming decade. The long-term outlook is positive. 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 decision points in the
fiscal year 2023-2024. If won, these bids offer huge production revenue starting in
20242025 and through 2032.
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.
Directors and Key Managerial Personnel
As reported in the previous year, the Board of Directors at its Meeting
held on 21st March, 2022 re-appointed Mr. Krishan Katyal (DIN: 00765487) 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. This appointment was approved by the
Members of the Company at the Extraordinary General Meeting of the Company held on 21st
April, 2022.
Upon completion of his first term, the re-appointment of Mr. Rahul
Bhatnagar (DIN: 07268064) was made on 27th May, 2022 as an Independent Director of the
Company for a second term of 5 (five) consecutive years with effect from 9th August, 2022,
to hold office till 8th August, 2 0 27. The re-appointment was made by the Board of
Directors on the recommendation of Nomination and Remuneration Committee and was approved
by the Members of the Company at the 28th Annual General Meeting held on 9th August, 2022.
The Board, at its Meeting held on 27th May, 2023, on recommendation of
the Nomination and Remuneration Committee, has re-appointed Mr. H. M Gupta (DIN: 00065973)
as the Managing Director designated as Executive Chairman for a further period of 3
(Three) consecutive years commencing from 1st April, 2024, subject to the approval of the
Members of the Company at the 29th Annual General Meeting.
The Board, at its Meeting held on 27th May, 2023, on recommendation of
the Nomination and Remuneration Committee, has also reappointed Mr. N. K. Khurana (DIN:
00123297) as a Whole time Director designated as Director (Finance) and Company Secretary
for a further period of 3 (Three) consecutive years commencing from 1st September, 2023
subject to the approval of the Members of the Company at the 29th Annual General Meeting.
Mr. H. M. Gupta, 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, 2023 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/.
Criteria for determining Qualifications, Positive Attributes,
Independence and Other Matters concerning a Director
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 judgment.
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 Obligations and Disclosure Requirements) Regulations,
2015 from all the Independent Directors of the Company confirming that they meet the
criteria of independence, were 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 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 https://www.rossellindia.com/divisions/.
The CSR budget for the Financial Year 2022-2023 was prepared in accordance with the
provisions of Section 135 (5) of the Companies Act, 2013 (the Act) read with the Company's
CSR Policy. The amount so budgeted was fully spent on or before 31st March, 2023, 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.
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.
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 Meetings held on 23rd March, 2023 reviewed the
performance of the Executive Chairman, other Whole time Non-Independent Directors and the
Board of Directors as a whole 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.
Annual Return & Extracts of Annual Return
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 https://www.rossellindia.com/divisions/. 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 Act
and confirm that:
(a) in the preparation of the annual accounts for the Financial Year
ended 31st March, 2023, 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, 2023 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, 2023 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.
Auditors, their Report and Notes to Financial Statements
The Statutory Auditor of your Company M/s. Khandelwal Ray & Co.,
Chartered Accountants, Kolkata (Firm Regn No. 302035E), were reappointed for a second term
of 5 consecutive years at 28th Annual General Meeting of the Company held on 9th August,
2022 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 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, 2022 (Firm
Registration No. 000001) and submitted their report to the Central Government on 7th
September, 2022.
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 2023-2024.
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 2022-2023. 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 an investment of ' 1.00 lakh in
Rossell Techsys Limited, Wholly Owned Subsidiary by way of subscription money towards the
entire Paid-up Share Capital of ' 1,00,000 divided into 50,000 Equity Shares of ' 2 each.
Statements of subsidiaries / Joint Ventures
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.
Your Company further formed a Wholly Owned Subsidiary namely Rossell
Techsys Limited on 6th December, 2022 for the purpose of segregation of the Rossell
Techsys Division from the Company into a separate Company by way of demerger and to create
a dedicated A & D vertical with focused attention on the Aerospace and Defense
business.
The accompanying Note 50 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 during the year under review.
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 Obligations and Disclosure
Requirements) Regulations, 2015, 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.
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.
No efforts have been spared to provide the highest levels of safety,
security and hygiene to all staff members and to comply with various legislation from the
Government of India/ State Governments.
Industrial relations at all the units remain satisfactory, your Company
employed 5,478 personnel on its permanent roll as on 31st March, 2023 including that of
Rossell Techsys Division.
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.
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 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
During the year under review, The Economic Times in consultation with
Association of Corporate Advisers & Executives (ACAE) have awarded your Company,
Rossell India Limited, the ET BENGAL CORPORATE AWARDS, 2023 in the category- Fastest
Growing Organisation between ' 100 to ' 500 Crores.
Rossell Techsys Division was recognized as one of the 'World's Best
Emerging Brands 2022' in WCRCFEST (World Consulting and Research Corporation) 2022
Organised in London, England.
Rossell Techsys won the Skit event organised by its key customer Boeing
India Ltd. among all its supplier partners, as part of World Quality Month celebration,
appreciating our focus on world-class quality.
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 Baker Tilly, an
International Audit, Tax and Advisory Company. 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 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) Rule, 2016, a sum of ' 2,36,391 being the dividend lying unclaimed out of the
dividend declared by the Company for the Financial Year 2014-2015 were transferred to IEPF
on 14th September, 2022. 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 21,104 Equity Shares
pertaining to Financial Year 2014-2015 have been transferred to IEPF Authorities vide
Corporate Action dated 24th September, 2022 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 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-7 to this Report.
Business Responsibility and Sustainability 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 and Sustainability Report(BRSR) 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 SEBI 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
the Tea factories of Rossell Tea Division, with a view to conserve Fuel, Electrical Energy
and other resources. Initiatives undertaken during the Financial Year 2022-2023 are as
follows; |
|
a) Consent for installing solar power sent to the
Government/APDCL. Installation of a 302.4 KWP Solar plant at Kharikatia under OPEX model
has been ordered in collaboration with Tata Power Solar. |
|
b) Conventional pipe Gas burners at Dikom
replaced for lowering consumption with better combustion/blue flame. |
|
c) Old gas pipeline replaced and put above the
ground at Dikom and Nokhroy for longevity. Hydraulic testing of gas supply pipeline was
conducted for all Estates receiving gas. Leaking/worn out valves were replaced to ensure
no loss of gas. |
|
d) Fuel efficient Gas burners at Nokhroy and
Romai have been recalibrated to get blue flame which indicates optimum combustion of gas. |
| (i) The steps taken or impact on conservation of
energy (contd...) |
e) Cleaning of old and installation of additional
perplex / transparent roof sheets to save on electricity. |
|
f) Enhancement in Mechanization of pruning
operations- additional pruning machines were provided for improving pruning/work standards
and timely completion. |
|
g) Halogen bulbs replacement with LED bulbs is
ongoing. |
|
Water flow meters have been installed to
measure and monitor water pumping. |
| (ii) The steps taken by the Company for
utilizing alternate sources of energy |
An agreement has been signed with Tata Power
Solar for setting up a Solar plant of 302.4KWP under OPEX. |
| (iii) the capital investment on energy
conservation equipment. |
All new acquisitions of Machinery are planned
with a view towards energy and fund conservation. |
Rossell Techsys
| (i) The steps taken or impact on conservation of energy |
The 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 is 740KVA. |
|
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. |
|
We have installed timers for all street lights and all
washbasin taps are self-closing. These are few additional steps taken to conserve energy. |
| (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 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
product quality and labor 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 |
No new import of technology done during
this Financial Year. |
| (b) the year of import; |
Not Applicable |
| (c) whether the technology been fully absorbed |
Not Applicable |
| (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 ' 19.18 lakhs was made during the year towards subscription by the
Rossell Tea Division of the Company. |
| Rossell Techsys |
|
| (i) the efforts made towards technology absorption |
Through close association with its
customers on Build to Print (BTP) activities in EWIS. |
|
Electronics Assemblies and ATE
competencies, the Division has strengthened its know-how in terms of technology,
infrastructure and skill. The Division has now started executing Build to Specification
(BTS) projects for its customers, which further enhances its competencies in design,
product and process qualifications. |
| (ii) the benefits derived like product improvement, cost
reduction, product development or import substitution |
The Division has now localised all
mechanical components with India based suppliers, which were previously imported from US
sources. This brings in part cost productivity to the tune of 25% and improved lead time
with better inventory controls. |
|
In production, the Division focused on
effort reduction across all products and achieved around 10% reduction from last year
baseline. As part of the continuous improvement efforts, the Division focused on single
piece flow for certain product lines, improving throughput and introduced pre fab methods
which helped improve infra utilisation, people efficiency and ergonomics. |
| (iii) in case of imported technology (imported during the
last three years reckoned from the beginning of the financial year)- |
There is no import of technology, only
know-how assimilation took place. |
| (a) the details of technology imported |
Not Applicable |
| (b) the year of import; |
Not Applicable |
| (c) whether the technology been fully absorbed |
Not Applicable |
| (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 Expenditure incurred on Research and
Development |
|
(' in Lakhs) |
|
2022- 2023 |
| For In house R&D: |
|
| Capital Expenditure |
454.14 |
| Recurring Expenditure |
213.30 |
| Total In house R&D Expenditure |
667.44 |
| R&D Expenditure as % on Turnover |
3.58% |
(c) Foreign exchange earnings and Outgo
During the year, the total foreign exchange used was ' 1,324.42 lakhs
on account of various expenses and ' 12,262.02 lakhs for imports of raw materials, stores
as well as capital goods.
The total foreign exchange earned was ' 20,079.01 lakhs.
Material Changes and Commitments
Your 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
2022-2023.
One-Time Settlement
You Company has not made any one-time settlement against loans taken
from the Banks or Financial Institutions during the Financial Year 2022-2023.
Acknowledgement
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, 2023 |
DIN : 00065973 |