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Rossell India Ltd.

BSE: 533168 Sector: Agri and agri inputs
NSE: ROSSELLIND ISIN Code: INE847C01020
BSE 00:00 | 06 Dec 77.00 -1.90
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OPEN 78.20
PREVIOUS CLOSE 78.90
VOLUME 1196
52-Week high 91.15
52-Week low 33.40
P/E 12.56
Mkt Cap.(Rs cr) 283
Buy Price 76.15
Buy Qty 47.00
Sell Price 77.00
Sell Qty 300.00
OPEN 78.20
CLOSE 78.90
VOLUME 1196
52-Week high 91.15
52-Week low 33.40
P/E 12.56
Mkt Cap.(Rs cr) 283
Buy Price 76.15
Buy Qty 47.00
Sell Price 77.00
Sell Qty 300.00

Rossell India Ltd. (ROSSELLIND) - Director Report

Company director report

for the year ended 31st March 2018

Dear Members

Your Directors have pleasure in presenting their Twenty Fourth Annual Report togetherwith 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 1524.24 680.43
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 thecurrent Financial Year with transition date as at 1st April 2016. Financial statementsfor the year ended 31st March 2017 have been re-stated to conform to Ind AS. Note 47 tothe 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 nodisclosure 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 interms 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 interms 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 ownshares by employees or by trustees for the benefit of employees. Hence no disclosure isrequired 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 April2017 at Rs 733.93 lakhs divided into 36696475 Equity Shares of Rs 2 each remainedunchanged 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 ofthis no amount is available for appropriation during the Financial Year 2017-2018 fortransfer to General Reserve forming part of Other Equity.

DIVIDEND

Keeping the financial performance of the Company in view your Directors do notrecommend 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 avionicsequipment food and beverage as well as receipts from technical and support services andsale of food and beverages by Kebab Xpress has increased to Rs 19852.39 lakhs for theyear under review as against Rs 16324.96 lakhs in the previous year.

PERFORMANCE

Rossell Tea

Yours Directors feel that the performance of Rossell Tea Division for the financialyear 2017-2018 was satisfactory. The Division continued to reinforce its USP of being aquality producer of tea throughout the year in spite of inclement weather in Upper Assamwhere four Group Tea Estates are situated. The Division once again produced high qualityOrthodox teas for which ‘Rossell Tea' is the benchmark in the industry and alsoamongst the top in the CTC category with ‘Kharikatia' mark.

Tea production during the financial year was 53.25 lakh Kgs which was 8% higher thanthe previous year's production of 49.43 lakh Kgs. This is the highest crop produced by theDivision in the last 4 years.

The beginning of the year saw good opening levels for both CTC and Orthodox teas. Goodquality CTC prices ruled firm through the year and taking advantage of this the Companyproduced 25.97 lakh Kgs CTC teas against 18.76 lakh Kgs in the previous year. The Orthodoxmarket was a bit subdued during the year owing to excess production. Thus Orthodoxaverages for the year at Rs 229.21 per Kg. is lower than that of the previous year at Rs235.40 per Kg. however that of CTC is significantly higher at Rs 208.03 per Kg. ascompared to Rs 187.00 per kg. in the previous year.

In both the categories Orthodox and CTC the Division's averages are significantlyhigher than the Industry averages which are Orthodox at Rs 210.96 per Kg. and CTC at Rs149.90 per Kg.

On the export front the Company exported 9.40 lakh kilograms this year as against 8.90lakh kilograms in the previous year. The export offerings were effected owing to the poorand inclement weather conditions in the Upper Assam region

Our product-mix allowed us to realize the best possible value for our teas. Improvedproductivities and efficiency higher crop and stricter controls kept the costs undercheck and have helped in much better margins this year. The turnover has increased from Rs10886.94 lakhs in the previous financial year to Rs 11515.00 lakhs in the currentfinancial year.

Aviation Products and Services

Aerotech Services Division has four contracts for providing post sales technicalsupport for Original Equipment Manufacturers (OEMs) equipment fitted on various Indianplatforms of the three services viz Indian Air Force Indian Army Indian Navy andHindustan Aeronautics Ltd. The Division is also now working with Larsen & Toubro TATAand Mahindra on new projects which would lead to additional business in the future. TheField Service Engineers continue to enhance the skills and knowledge in the task assignedto the Division.

The Rossell Techsys Division continues its focus on export oriented businessopportunities in the aerospace and defense domain with target global Original EquipmentManufacturers (OEMs) and has successfully added on a new customer Lockheed Martin withexciting future prospects. The emphasis on local domestic business continues to be minimalat the moment and confined to opportunities that provide skill development for anticipatedfuture export business. All business obtained by the Division is on the basis of a highlyprice sensitive global competition basis.

The Division successfully maintains its certifications such as AS 9100 ISO 9001 ISO14001 ISO 27001 and the BS 18001. During the year it acquired the distinction of beingthe first Aerospace and Defense Company in India to achieve full compliance to the ISO31000 standards for risk mitigation and management. The Division is also accredited byCEMILAC India's only military airworthiness certification body.

Rossell Hospitality

During the year under review Kebab Xpress started a Delivery point from its Basekitchen in Okhla and de-commissioned one store owing to low footfalls at the mall. Therevenue jumped by approx. 12% over that of the previous financial year. All Energies arecurrently engaged towards building the delivery side of business which is lookingpromising.

PROSPECTS

Rossell Tea

Major producers Sri Lanka and Kenya have had a good start to their 2018 season. TillMarch 2018 Sri Lanka crop is 8 million kgs more than the previous year and Kenya up toFebruary 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 thatthe 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 teaswhich are predominantly exported it is too early to predict and many external factorscould influence the price.

USA pulling out of the Iran Nuclear Deal and also imposing sanctions on Iran may have adetrimental effect on the exports to Iran. We are however hopeful that the IndianGovernment shall have a payment in Rupee terms as was done earlier. Exports are a criticalarea of performance for the Company and we are looking to export to new geographies andbuyers and thereby increase the basket. The Government has also enhanced the incentive toexport by 2% from November 2017 under the MEIS scheme.

The weakening of the Rupee against the western currencies should help enhancing ourexport earnings. In the financial year 2018- 2019 we are confident that the exports willincrease significantly over that in earlier years.

From the arrivals in the Auction Centers it is again seen that the volumes of theOrthodox variety have increased for the fourth year running.

The minimum wages being discussed not only by the Government of Assam but by theCentral Government as well can definitely have an impact on all industries including theTea industry.

Aviation Products and Services

Aerotech Services has signed a new contract for three years w.e.f 1st April 18. Thiswould help increase our revenue. SAFRAN has involved the Division in providingdemonstration of a new equipment to the private sector firms. On acceptance of thisequipment we are likely to get new contracts for support services.

Rossell Techsys Division maintains a healthy open order book with the order of $42Million to be executed over the next 4 to 5 years. The total strategic agreements signedby the Division are of the order of close to $120M to be executed over the next 4 to 5years. These strategic agreements translate to a potential of enhanced business ofapproximately another $40M to $50M over the next 4 to 5 years. As much of the strategicagreements are linked to the US government spend actual realization is dependent on thesocio-politico-economic Th situation of the US. erefore this may be viewed with necessarycaution. e Division has performed exceedingly well this financial year and has reportedincome from operations of Rs 5793.97 lakhs for the year as against Rs 2282.51 lakhs inthe previous financial year. This has been the best financial year since the inception ofthe Division.

Rossell Hospitality

The emergence of digital technologies is changing the opportunity landscape for thefood industry. Digital solutions are being used by businesses and brands to connect withconsumers. Online ordering with integrated payment options provides a completely newdimension to consumer experience. The ground work done by in-house team and externalagency during the Q1 and Q2 clearly indicate business buoyancy towards the digital sideand the stage-wise implementation of all findings were plugged during the latter twoquarters which has resulted in growth of revenues by over 19% and reduction in losses by54%. 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 continueto 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 incompliance 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- CompanySecretary (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 therecommendation of Nomination and Remuneration Committee as well as the Audit Committee ofthe Board for a period of 3 (Three) years commencing from 9th February 2018 till 8thFebruary 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 asSpecial 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 Yearended 31st March 2018 are mentioned in the Extracts of the Annual Return in Form MGT-9which 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 theIndependent Directors of the Company confirming that they meet the criteria ofindependence as prescribed under Section 149(6) of the Companies Act 2013 was dulyreceived by the Company.

CORPORATE GOVERNANCE

The Company has complied with the Corporate Governance requirements under the CompaniesAct 2013 and as stipulated under Regulations 17 to 27 of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 (SEBI Listing Regulations) read withschedule II thereof. A separate report on Corporate Governance in terms of Regulation34(3) read with clause C of Schedule V of the SEBI Listing Regulations along withcertificate from the Practicing Company Secretary confirming the compliance is annexed asAnnexure-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 onvarious 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 GovernanceReport.

COMMITTEES OF THE BOARD

a. Audit Committee

The Board has constituted the Audit Committee which comprises of the followingDirectors :

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 theAudit Committee.

Further details of Audit Committee related to dates of Meeting held during the yearattendance of Directors etc. are given separately in the attached Corporate GovernanceReport.

b. Nomination and Remuneration Committee

The Nomination and Remuneration Committee of the Board has been constituted by thefollowing 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 Meetingheld during the year attendance of Directors etc. are given separately in the attachedCorporate Governance Report.

c. Corporate Social Responsibility Committee

The Corporate Social Responsibility Committee of the Board has been constituted by thefollowing 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 Rresponsibility Committee related to dates ofMeeting held during the year attendance of Directors etc. are given separately in theattached Corporate Governance Report.

The Committee had framed the CSR policy and the same was approved by the Board at itsMeeting held on 6th August 2014. The CSR Policy is available on Company's website atwww.rossellindia.com. The CSR budget for the financial year 2017-2018 was prepared inaccordance with the provisions of Section 135 (5) of the Companies Act 2013 read with theCompany's CSR Policy. The amount so budgeted was fully spent on or before 31st March2018 the detailed report on CSR Activities/ Initiatives is enclosed as Annexure-2which forms part of this Report.

d. Stakeholders' Relationship Committee

The Stakeholders Relationship Committee of the Board has been constituted by thefollowing 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 heldduring the year attendance of Directors etc. are given separately in the attachedCorporate Governance Report.

e. Risk Management Committee

Your Board has voluntarily constituted the Risk Management Committee in the mannerprescribed in Regulation 21 of the SEBI Listing Regulations consisting of the followingDirectors:

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 duringthe year attendance of Directors etc. are given separately in the attached CorporateGovernance Report.

ANNUAL PERFORMANCE EVALUATION

In terms of the relevant provisions of the Companies Act 2013 and SEBI ListingRegulations the Board had carried out an annual evaluation of its own performance andthat of its Committees as well as individual Directors.

A structured questionnaire as prepared in terms of the criteria specified by SEBI videits circular no. SEBI/HO/CFD/CMD/ CIR/P/2017/004 dated 5th January 2017 and approved bythe Nomination and Remuneration Committee of the Board were circulated to all theDirectors to obtain their valuable feedback. After taking into consideration differentviews expressed by the Directors covering various aspects of the Board's functioning suchas adequacy of the Board's composition and structure Board's culture execution andperformance of specific duties obligations and governance effectiveness of Boardprocesses etc. the evaluation of the Board were conducted.

During the year the performance evaluation was done at two levels - by the Board aswell as by the Independent Directors at their separate Meeting. First the Board at theirMeeting held on 9th February 2018 reviewed the performance of the Board as a whole itsCommittees and the individual Directors with reference to the aforesaid questionnaire.

Similarly the Independent Directors at their separate Meetings held thereafter on thesame day reviewed the performance of the Executive Chairman of the Board and otherNon-Independent Directors as specified by SEBI in its aforesaid circular dated 5thJanuary 2017. Th ey also assessed the quality quantity and timeliness of flow ofinformation 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 rule12(1) of the Companies (Management and Administration) Rules 2014 extract of AnnualReturn is given as Annexure- 3.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

Pursuant to Section 177(9) read with Regulation 22 of the SEBI Listing Regulationsyour Company has duly established Vigil Mechanism for Directors and employees to reportconcerns about unethical behavior actual or suspected fraud or violation of company'scode of conducts or ethics policy. Audit Committee of the Board monitors and oversee thevigil mechanism.

The detailed policy related to this vigil mechanism is available in the Company'swebsite at www.rossellindia.com.

DIRECTORS' RESPONSIBILITY STATEMENT

The Board of Directors acknowledges the responsibility for ensuring compliance with theprovisions of Section 134(3) (c) read with Section 134(5) of the Companies Act 2013 andconfirm that :

(a) in the preparation of the annual accounts for financial year ended 31st March2018 the applicable accounting standards had been followed along with proper explanationrelating to material departures if any;

(b) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company for the financial year ended 31st March2018 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 adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 theCompany and that such internal financial controls are adequate and were operatingeffectively; and

(f) The Directors had devised proper systems to ensure compliance with the provisionsof 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 on4th August 2017 for a term of five consecutive Financial Years pursuant to Section 139 ofthe Companies Act 2013 read with Rule 6 of the Companies (Audit and Auditors) Rules2014.

The report given by the Auditors on the Financial Statement of the Company for the yearunder review forms part of this Annual Report. There has been no qualificationreservation 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 anyfurther 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 auditof its cost accounting records relating to products manufactured by Rossell Tea Divisionand Rossell Techsys Division. M/s. Shome & Banerjee Cost Accountants conducted thisaudit for the Previous Financial Year ended 31st March 2017 and submitted their report tothe Central Government on 1st September 2017.

In terms of Section 148(3) of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 the Board of Directors of the Company has on therecommendation of the Audit Committee re-appointed M/s. Shome & Banerjee CostAccountants as the Cost Auditor of the Company for the Financial Year 2018-2019.

Th eir remuneration is required to be ratified by the Members in the ensuing AnnualGeneral Meeting.

SECRETARIAL AUDIT

In terms of Section 204 of the Companies Act 2013 read with Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors had appointedM/s. A.K. Labh & Co. Practicing Company Secretaries as the Secretarial Auditors ofthe Company for the Financial Year 2017-2018. The report of the Secretarial Auditors inForm MR-3 is enclosed as Annexure-4 to this report.

The report confirms that the Company had complied with the statutory provisions listedunder 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 ordisclaimer 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 theordinary course of business in compliance with the applicable provisions of the CompaniesAct 2013 and SEBI Listing Regulations. There are no materially significant related partytransactions made by the Company with Promoters Directors or Key Managerial Personneletc. which may have potential conflict with the interest of the Company at large. Allrelated party transactions are presented to the Audit Committee and the Board if requiredfor approval. Omnibus approval is obtained for the transactions which are foreseen andrepetitive in nature. Policy on Related party transactions as approved by the Board isuploaded 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) ofsub-section (3) of Section 134 of the Companies Act 2013 read with Rule 8(2) of theCompanies (Accounts) Rules 2014 is given in Form AOC-2 as Annexure-5 to thisreport.

LOANS GUARANTEES OR INVESTMENTS

During the year under review your Company has not granted any inter-corporate loanneither provided any Guarantee in connection with any loan to any party nor made anyinvestment in terms of the provisions of Section 186 of the Companies Act 2013. Howeverduring the year under review your Company has taken inter-corporate loan from BMGInvestments Pvt. Ltd. in compliance with the provisions of Section 186 of the CompaniesAct 2013 outstanding amount as on 31st March 2018 being Rs 310 lakhs. Particulars ofexisting Investments made by the Company as required to be disclosed in terms of Section134 (1) (g) of the Companies Act 2013 is given in the accompanying financial statement(Note Nos. 5 and 6).

STATEMENTS OF SUBSIDIARIES / JOINT VENTURES

TThe wholly owned subsidiary CAE Rossell India Limited did not carry out any activityduring the year under review. Your Company has a Joint venture entity named RV EnterprisesPte. Ltd. Singapore in which the Equity holding is 26%.

Accompanying Consolidated Financial Statement contains details financials of theSubsidiary / Associate Company (Joint Venture).

RISK MANAGEMENT POLICY

Your Company's business faces various risks - strategic as well as operational inrespect of all its Divisions. The Company has an adequate risk management system whichtakes care of identification assessment and review of risks as well as their mitigationplans put in place by the respective risk owners. The risks which were being addressed bythe Company during the year under review included risks relating to market conditionsenvironmental information technology etc. The Company has developed and implemented theRisk Management Policy with an objective to provide a more structured framework forproactive management of all risks related to the business of the Company and to make itmore 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 Companyare discussed in report on Management Discussion and Analysis forming part of thisReport.

Your Company has constituted Risk Management Committee of the Board in the mannerstated in Regulation 21 of the SEBI Listing Regulations 2015. The Risk ManagementCommittee reviews the risk assessment and minimization procedure in the light of the RiskManagement Policy of the Company.

In the opinion of the Board there is no such element of risk which may threaten thepresent existence of the Company.

REMUNERATION POLICY

The Company follows a policy on Remuneration of Directors and Senior ManagementEmployees. The policy is approved by the Nomination and Remuneration Committee and theBoard. Further details on the same have been given in the Report on Corporate Governancewhich forms part of this report.

e required disclosure under Section 197 (12) of the Companies Act 2013 read with Rule5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is given as Annexure- 6 to this report.

HUMAN RESOURCES

Your Company treats its "human resources" as one of the most importantassets. The Management of the Company lays continuous focus on human resources who aretrained 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 toensure that the Company maintains its competitive position with respect to execution. YourCompany continuously invests in attraction retention and development of talent on anongoing basis.

Industrial relations at all the units remain satisfactory your Company employed 6333personnel on its roll as on 31st March 2018.

Details of employee remuneration as required to be provided in terms of the provisionsof Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is given in Annexure- 7 forming part of this Report.

The total remuneration drawn by the Managing Director and Key Managerial Personnelforms part of Extracts from the Annual Return in Form MGT-9. Mr. H. M. Gupta ExecutiveChairman 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 pursuantto 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 therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. Separate Internal Complaint Committees have been set up in for everyDivisions/ Tea Estates of the Company to redress complaints received regarding sexualharassment in respect of each Divisions/ Tea Estates. However during the year underreview the Company has not received any complaint of alleged sexual harassment from anyof its Divisions/ Tea Estates.

AWARDS AND RECOGNITION

Rossell Techsys Division has been nominated for the "Boeing supplier of theyear" for the fourth time running but missed out on receiving the award due tointense global competition. However it more than made up for this miss by winning anotherprestigious award in the Aerospace and Defense global industry by winning the"supplier excellence award" from the American Helicopter Society. The Divisionhas the distinction of being the first Indian company to win this prestigious award. Thisaward has been received very recently by Mr. Rishab Mohan Gupta Whole Time Director ofthe Company and Mr. Prabhat Kumar Bhagvandas Chief Executive Officer of the Division onthe 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 orTribunals 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 Managementand they are reviewed from time to time. The Internal Audit is carried out in house aswell as by firms of Chartered Accountants for all the Divisions of the Company. The AuditCommittee of the Board looks into Auditor's review which is deliberated upon andcorrective 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 readwith Investor Education and Protection Fund Authority (Accounting Audit Transfer andRefund) Rules a sum of Rs 81097 being the dividend lying unclaimed out of the dividenddeclared by the Company for the Financial Year 2009-2010 were transferred to IEPF on 31stAugust 2017. The details of the said unclaimed dividend transferred is available at thewebsite of the Company at http://www.rossellindia.com/financials.html. Similarly duringthe period under review (a) 172925 shares pertaining to financial year 2008-2009 and(b) 18240 shares pertaining to financial year 2009-2010 have been transferred to IEPFAuthorities on 22nd November 2017 and 12th January 2018 respectively in compliance withthe provisions of Section 124 of the Companies Act 2013 and Rule 6 of Investor Educationand Protection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 aftersending letters to those Shareholders and also making advertisement in the newspapers inthis regard. Details of these shares transferred to IEPF are available on the website ofthe Company at http://www.rossellindia.com/financials.html.

DEPOSITS

Your Company has not accepted any deposits from public in terms of provisions containedin Chapter V of the Companies Act 2013 or in terms of corresponding provisions of theCompanies Act 1956.

MANAGEMENT DISCUSSION AND ANALYSIS

A report on the Management Discussion and Analysis concerning all the business segmentsof the Company is given as Annexure-8 to this report.

(a) Conservation of energy

(i) the steps taken or impact conservation of energy on Machinery up-gradation and replacement of 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 2017- 2018 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 Th ere 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 Rs 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 Rs 123.57 lakhs on account ofvarious expenses and Rs 4365.20 lakhs for imports of raw materials stores as well ascapital goods. The total foreign exchange earned was Rs 8620.70 lakhs.

MATERIAL CHANGES AND COMMITMENTS

You Directors confirm that there are no material changes and commitments affecting thefinancial position of the company which has occurred between the end of the financialyear of the Company and the date of this report.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation for employees at all levels who havecontributed to the growth and performance of your Company.

Your Directors also thank the business associates shareholders and other stakeholdersof 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