The Directors have pleasure in presenting their Eighteenth Annual
Report together with the Audited Accounts for the year ended 31st
FINANCIAL RESULTS Rs. in Lakhs
Year ended Year ended
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
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.
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.
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
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
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.
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
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
Aerotech Services has been approached by new OEMs to provide product
support services for their equipment fitted on various platforms.
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.
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
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:
To adopt environmental friendly agriculture and manufacturing policies.
Well equipped schools for workers'' children at all Estates.
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.
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.
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
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.
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.
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