Rossell India Ltd

REPORT OF THE BOARD OF DIRECTORS FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2024

Dear Members,

Your Directors are pleased to present their Thirtieth Annual Report together with the Audited Accounts for the year ended 31st March, 2024.

Financial Summary Highlights

Share Capital

The issued, subscribed and paid up Share Capital of the Company as on 31st March, 2024 was at Rs.753.93 lakhs divided into 3,76,96,475 Equity Shares of Rs.2 each.

During the year under review, there has been no change in the Share Capital of the Company.

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 2023-2024, an amount of Rs.1,000 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 Rs.185.96 lakhs was kept as retained earnings.

Dividend

Your Directors are pleased to recommend to the Members, for their approval, a Dividend of Rs.0.30 per Equity Share of Rs.2 each (i.e 15% on the paid up capital) (2023 - 20%) in the Company for the year ended 31st March, 2024.

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 3.67% at Rs.36,657.70 lakhs as against Rs.35,358.32 lakhs for the previous financial year 2022-2023.

Rossell Tea

While the Directors' were concerned with Rossell Tea Divisions below par performance for the financial year 2023-24 they are encouraged that it remains one of the best in the industry. Extreme weather conditions were experienced with low rainfall and increased pest activity which led to a significant drop in production. We were able to produce 46.60 lakh kgs own crop and 5.07 lakh kgs from bought leaf totaling to 51.67 lakh kgs. Despite adverse weather conditions, high quality Orthodox and CTC compliant teas were outturned.

CTC production was maximized as the price realization of this category was much higher than the Orthodox variety for which the demand remained muted with significantly lower prices.

The CTC prices which opened lower in the beginning of the year, moved up slightly in May and June due to the lower production in April/ May. Thereafter the CTC prices were lower till October with a slight uptick in November. Subsequently till the end of the season the prices kept dropping owing to overproduction and less demand & consumption.

The Orthodox market opened low initially due to over production. Prices kept falling till end January with a slight movement upward in Feb/March. The overall Orthodox prices were lower by Rs.61.91 per kg for the industry. Orthodox production was curtailed to 19.97 lakh kilograms as compared to 30.58 lakh kilograms in the previous year. We produced 31.70 lakh kilograms of CTC tea as compared to 26.02 lakh kilograms in the previous year.

Our Orthodox sale averages are Rs.254.24 per kg as against Rs.301.65 per kg in the previous year and in the CTC category Rs.287.56 per kg as against Rs.284.03 per kg.

It is worthy to note, that in both the categories of tea our averages are significantly higher than the Industry averages for the Assam Valley which are Rs.220.78 per kg for Orthodox and Rs.213.09 per kg for CTC. Thereby making our realization for orthodox approximately 15% higher and CTC approximately 35% higher than the industry average for the Assam Valley.

Our sale average of Rs.274.26 per kg for our teas is the 3rd highest ever achieved.

Our exports recorded an increase of 46% during the financial year, from 6.32 lakh kilograms in the previous year to 9.22 lakh kilograms. Overall exports out of India have been dropping in favour of the African teas which are much cheaper and logistically better located. Another factor which has contributed to the lower exports is the ongoing Ukraine/Russia conflict and the conflicts in West Africa which have led to high inflation and recession worldwide. In spite of these factors, your company's exports were significantly higher to the UK, UAE, and Germany in the financial year 2023-2024.

Our product-mix allowed us to realize the best possible value for our teas. Improved productivities and efficiency, helped to obviate the wage cost which was increased from 1st October 2023 to some extent but the costs went up due to the lower production.

The total income has reduced from Rs.168.90 crores to Rs.150.80 crores on the backdrop of lower production and lower Orthodox prices.

Rossell Techsys

Rossell Techsys has achieved a 16.37% growth in Operational Revenue in the Financial Year 2023-2024, from Rs.186.37 Crores in Financial Year 2022-2023 to Rs.216.88 Crores in Financial Year 2023-2024. The Operating profit (EBITDA) has grown by 13.62%, from Rs.31.27 Crores in Financial Year 2022-2023 to Rs.35.53 Crores in Financial Year 2023-2024. The PBT has also grown by 21.88%, from Rs.12.02 Crores in Financial Year 2022-2023 to Rs.14.65 Crores in Financial Year 2023-2024.

Rossell Techsys produced a total of 43,303 units in a single year, an increase of over 5,600 units from the previous year. The delivered goods have been a very high product mix, with varied complexities, and low volumes, a key aspect of the business. All such deliveries were for major military platforms for leading US based Original Equipment Manufacturers, for the Us government and for their Foreign Military Sales commitments, through the major Tier I OEMs. Rossell Techsys successfully expanded its capabilities into Fiber optic harnesses and has delivered orders recently, to the US Government, through federal sourcing entities, as well as for the Israeli Aerospace Industry. The Division also expanded its customer and geographic base, with total customers exceeding twenty-six (26).

In the financial year 2023-2024, Rossell Techsys has registered a record level of approximately Rs.638 Crores of confirmed POs. This takes the total confirmed POs to approximately Rs.900 Crores. Additionally, the Division has entered into Long-term Strategic Agreements with global customers to an extent of over Rs.2,800 Crores. Such strategic agreements are with customers like Boeing, Lockheed Martin, Honeywell and Israeli Aerospace Industries. The purchase orders include a product mix of Electrical Wiring and Interconnect System (EWIS) sub-assemblies, Electrical Panel Assemblies (EPAs), Test Systems and Systems Integrated units.

Rossell Techsys continued to deliver to consistently high quality and delivery ratings and maintain its brand credibility of being uniquely different and refreshing to work with. The strategy of making investments in the initial stages of development or in enabling source transition, has been extremely encouraging in terms of long-term prospects.

On the Human Capital front, Rossell Techsys continued to maintain staffing levels commensurate with its revenue and growth needs. It has also focused on diversity and employment of people with disabilities under its diversity and Inclusion initiatives. The diversity stands at around 31% out of a total staff strength of 602, with differently abled, PWD candidates accounting for around 4% in the diversity mix. It has been able to contain attrition without major impact to its capacity, by focusing more on people agnostic processes to address the impact of attrition.

Rossell Techsys continues to maintain its leadership position in certifications that are crucial for operational excellence and covers diverse aspects from quality, environment, organizational health and safety, information systems, risk management and ethical transactions. It has successfully gone through recertification processes for several of its existing operational certifications. The Division is the only Indian company to have forty-six (46) special processes certified as part of its NADCAP AC7121 certification. The Division also successfully set up its metrology and calibration lab, certified to ISO/IEC 17025:2017.

Rossell Techsys continues its research and development recognition by the Department of Scientific and Industrial Research (DSIR) as an Industrial R&D unit. The Division shall continue to invest in R&D initiatives, alongside initiating the process of exploring external or government funding under the "Make in India" vision.

:Prospects Rossell Tea

The Orthodox market opened quite firm on the backdrop of lower production in India and Sri Lanka. A large number of producers in India have reverted back to CTC in the first flush, leading to lower Orthodox production by 2.2 million kgs. This has resulted in higher price realization for high quality and compliant orthodox teas produced by Rossell Tea.

The CTC market too has opened strong owing to lower crop. Also, what is being noticed this year is more teas are getting tested and that compliant and good quality teas are getting a premium. This clearly is advantageous for Rossell Tea.

Production in Sri Lanka in the beginning of the season is lower by 2 million kgs from last year.

However, production in Africa is on the rise and Kenya is significantly higher by 26 million kgs till end February. The latest available report indicates that the production in East Africa is increasing but there has been a decline in quality which has resulted in substantial quantity of over 45% of the offerings remaining unsold. To-date price average at Mombasa auctions is $2.11 as compared to $2.16 last year.

In Sri Lanka due to shortage of teas on offer, the average price at the auctions has shot up substantially and is around Rs.120 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 with aggressive buying from most of the importers.

In conclusion good quality and compliant CTC would continue to sell at remunerative prices and anything below good will decline in prices as arrivals increase. The Orthodox category is likely to remain firm as there is strong demand and production is low. Thus, prices will certainly be better than last year and in line with 2022.

We are happy to state that for the 1st time we have been able to conclude a contract for March/April teas from Romai TE with the most reputed buyer, Taylors of Harrogate, UK at remunerative prices and the firm contract from May to October would be signed off soon. Also, we are likely to sign additional contract with Taylors for supply of Orthodox teas from Dikom and another milestone is being achieved as Nagrijuli is being added to their list of suppliers and, for a start, 5 containers are being contracted. Another contract has been made with Ahmad Tea for supply of 1.60 lakh kgs tea from Dikom, Kharikatia and Nagrijuli. We are very hopeful that with progress of the season, we would be able to procure more export orders from Germany, UAE, UK and Saudi Arabia.

To summarize, we see the production being lower than last year due to adverse weather conditions. Since more testing of teas is being undertaken, this will restrict the use of chemicals and availability of compliant teas.

Thus, the orthodox prices will be better than the previous year. Similarly, CTC prices may be somewhat similar to last year but marginally better for us owing to our compliance and quality.

Rossell Techsys

The Financial Year 2024-2025 has every indication of reporting better results for the Rossell Techsys. The number of customers that should be added further could be more than 30%. The Division continues to receive opportunities in diverse areas in Electrical Wiring and Interconnect Systems, Complex Consoles, Box builds, Automatic Test Equipment, Electrical Panel Assemblies and After Market product support services. The philosophy of risk sharing on the right opportunity and for new customers has had its rewards. This has provided Rossell Techsys the opportunity to further enhance its skill and capability in electrical panel assemblies and systems integration.

The long-term outlook for Rossell Techsys is optimistic, and further major investment decisions will be undertaken after the segregation of the Division is complete. These investments shall be to tap the enormous potential, by building more capacity and capability. The Division has signed up with third party entities for providing expanded global sales support in Israel, Europe and the US. It is expected that with these new relationships, Rossell Techsys shall be able to make further breakthroughs with more customers and in adjacent technology areas, domains and geographies. The outlook is extremely positive with enormous confidence that the Division shall see significant growth levels. A total of Rs.1,000 Crores worth of bids remain to be decided and has been delayed on account of leadership and executive changes within the customer organizations. It is expected that in the next 6 months, decisions on these bids would be taken. Therefore, Rossell Techsys is confident of adding more orders.

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.

However, the Hon'ble National Company Law Tribunal, Kolkata Bench has pronounced its final Order very recently for sanction of the Scheme of Arrangement between Rossell India Limited ('the Demerged Company or "the Company") and Rossell Techsys Limited ('Resulting Company1).

In accordance with the aforesaid Order, Rossell Techsys Division (Demerged Undertaking) would be demerged from the Company and vest with Resulting Company on going concern basis immediately upon the said Scheme become effective.

The Scheme will become effective from the date on which the certified true copy of the said Order would be filed with the Registrar of Companies, Kolkata, which is awaited.

Directors and Key Managerial Personnel

As reported in the previous year, the Board of Directors at its meeting held on 27th May, 2023, on the 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 with effect from 1st April, 2024, to hold office till 31st March, 20 27. This reappointment was approved by the Members of the Company at 29th Annual General Meeting of the Company held on 3rd August, 2023.

Also reported in the previous year, the Board of Directors at its meeting held on 27th May, 2023, on the recommendation of the Nomination and Remuneration Committee, has re-appointed 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 with effect from 1st September, 2023 to hold office till 31st August, 2026. This re-appointment was approved by the Members of the Company at 29th Annual General Meeting of the Company held on 3rd August, 2023.

Upon completion of her first term, Ms. Nayantara Palchoudhuri (DIN: 00581440) was re-appointed on 8th February, 2023 as an Independent Director of the Company for a second term of 5(five) consecutive years with effect from 9th February, 2023, to hold office till 8th February, 2028. 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 on 23rd April, 2024 through Postal Ballot by way of remote e-Voting process only.

Mr. R M Gupta (DIN: 05259454) (RMG) has retired from the office of Whole time Director of the Company w.e.f. 9th February, 2024, in terms of the special resolution passed at 27th Annual General Meeting of the Company held on 9th September, 2021.

Keeping in view the object of Scheme of Arrangement between Rossell India Limited (Demerged Company) and Rossell Techsys Limited (Resulting Company) to take over the existing business undertaking of Rossell Techsys Division of the Company and proposal from the Board of Directors of Rossell Techsys Limited to appoint him as the Managing Director of the Company, rMg considered it prudent to vacate the office of Director of Rossell India Limited.

Accordingly, he submitted his resignation letter to the Board of Directors for his resignation from the office of the Director of the Company w.e.f. 9th February, 2024. The Board, at its meeting held on 5th February, 2024 has accepted his resignation as a Director of the Company. Thus, he ceased to be the Director of the Company w.e.f 9th February, 2024.

In keeping with the requirement of Regulation 17(1) (a) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Board, at its meeting held on 5th February, 2024 has elevated Ms. Samara Gupta (DIN: 09801530) to the Board by appointing her as Whole time Director of the Company upon recommendation of the Nomination and Remuneration Committee as well as Audit Committee, for a period of 3 (three) consecutive years commencing from 9th February, 2024. The Members approved the said appointment by passing special resolution on 7th April, 2024 through Postal Ballot by way of remote e-Voting System only.

Mr. N. K. Khurana, being the rotational director of the Company under Section 152 (6) of the Companies Act, 2013 (the Act) retires by rotation and being eligible offers himself for re-appointment.

The detailed composition of the Board of Directors has been provided in the Report on Corporate Governance.

The following persons continued as Key Managerial Personnel of the Company in compliance with the provisions of Section 203 of the Act:

a) Mr. H. M. Gupta -Managing Director - Chief Executive Officer (CEO)

b) Mr. N. K. Khurana - Director (Finance) - Chief Financial Officer-cum- Company Secretary (CFO cum CS)

c) Ms. Samara Gupta - Whole Time Director

Remuneration and other details of the Key Managerial Personnel for the Financial Year ended 31st March, 2024 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 five 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 given as Annexure-1 and forms part of this Report.

Corporate Social Responsibility

The Company has a Policy on Corporate Social responsibility (CSR) duly approved by the Board and the same has been hosted on Company's website at www.rossellindia.com/divisions/. The CSR budget for the Financial Year 2023-2024 was prepared in accordance with the provisions of Section 135 (5) of the Act read with the Company's CSR Policy. The amount so budgeted was fully spent on or before 31st March, 2024. 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 5th February, 2024 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 www.rossellindia.com/wp-content/uploads/2022/01/vigil-mechanism-whistle-blower-policy.pdf.

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 financial year ended 31st March, 2024, 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, 2024 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, 2024 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, 2023 (Firm Registration No. 000001) and submitted their report to the Central Government on 25th September, 2023.

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 2024-2025.

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 2023-2024. 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 the investments made by the Company in the Units of Mutual Funds during the financial year 2023-2024 as considered in Note 15 as Current Investments.

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 Aerospace and Defense vertical with focused attention on the Aerospace and Defense business.

The Hon'ble National Company Law Tribunal, Kolkata Bench has pronounced its final order very recently for sanction of the Scheme of Arrangement between Rossell India Limited ('the Demerged Company or "the Company") and Rossell Techsys Limited ('Resulting Company).

Pursuant to the aforesaid Order, Rossell Techsys Division (Demerged Undertaking) would be segregated from the Company and vest with Resulting Company on going concern basis immediately upon the said Scheme become effective.

The Scheme will become effective on the date on which the certified true copy of the said Order would be filed with the Registrar of Companies, Kolkata, which is awaited.

In terms of the aforesaid Scheme, the existing total paid-up share capital of the Resulting Company held by the Company as on the effective shall stand cancelled without any further act immediately upon the Scheme become effective and allotment of Equity Shares by Resulting Company to the Shareholders of the Company. Thereafter, the Resulting Company shall cease to be the Wholly Owned Subsidiary of the Company.

Further, in effect to the demerger of Rossell Techsys Division from the Company, Rossell Techsys Inc. USA which was incorporated for expansion of operation of Rossell Techsys Division of the Company, would also get separated from the Company and transferred to Resulting Company. Hence, Rossell Techsys Inc. USA would also ceased to be the Wholly Owned Subsidiary of the Company.

The accompanying Note 50 to the Audited Accounts contains detailed financials of the said Subsidiary.

Since the Scheme of Arrangement is yet to be effective, Consolidated Financial Statements have also been prepared and forms part of this Annual Report of the Company for the Financial Year 2023-2024.

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 5,619 personnel on its permanent roll as on 31st March, 2024 including that of Rossell Techsys Division shown above.

Details of employee remuneration as required to be provided in terms of the provisions of Rule 5(2) & 5(3) of the 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 (POSH Committee) 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. The POSH Committee does meet to deliberate proactively on measures and steps to avoid the occurrence of any instance of harassment. The constitution of the POSH Committee is as per prescribed norms.

Awards and Recognition

Rossell Tea received the following awards/recognition during 2023:

1. 2nd prize in the Indian Orthodox category to our Dikom TE at the 12th Annual North American Tea Conference's Gold Medal Tea Competition held from October 4th to 6th, 2023, in Miami, Florida.

2. The Appreciation Award from GAIN (Global Alliance for Improved Nutrition) in recognition of unwavering support and guidance provided to GAIN and its implementing partners in bringing nutritional shift among workers.

3. Dikom TE got the 2nd runner up award in the ABITA Family Welfare award for Zone 1.

Rossell Techsys has been awarded the prestigious Supplier Excellence Award for Quality by Honeywell during their Supplier Conference in Bangalore. It has achieved an enviable position on quality ratings of zero PPM thus far, having delivered more than 30,000 deliveries to Honeywell.

Further, Rossell Techsys was assessed and accredited in accordance with the standard ISO/IEC 17025:2017 ''General Requirements for the Competence of Testing & Calibration Laboratories'', valid till November, 2025. This certification allows the Division to perform in-house calibration of tools and instruments that are approved by NABL for the accreditation scope. The laboratory is operational with the required infrastructure and procedures.

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 CLA Global Indus Value Consulting (formerly known as Baker Tilly Advisory Services Private Ltd.), 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) Rules 2016, a sum of Rs.2,02,652 being the interim dividend lying unclaimed out of the dividend declared by the Company for the Financial Year 2015-2016 were transferred to IEPF on 30th April, 2023. 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 24,162 Equity Shares pertaining to Financial Year 2015-2016 have been transferred to IEPF Authorities vide Corporate Action dated 10th May, 2023 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 Board from time to time.

Rossell Tea

Conservation of energy, technology absorption, foreign exchange earnings and outgo (contd.)

Rossell Techsys

(b) Technology absorption Rossell Tea

Rossell Techsys

(c) Foreign exchange earnings and Outgo

During the year, the total foreign exchange used was Rs.1,293.67 lakhs on account of various expenses and Rs.12,627.82 lakhs for imports of raw materials, stores as well as capital goods.

The total foreign exchange earned was Rs.23,243.10 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.

However, the kind attention of the Members is drawn towards the following material events occurred between the end of the financial year and the date of this Report.

The Hon'ble National Company Law Tribunal, Kolkata Bench has pronounced its final Order very recently for sanction the Scheme of Arrangement between Rossell India Limited ('the Demerged Company or "the Company") and Rossell Techsys Limited ('Resulting Compan/). Pursuant to the aforesaid Order the Rossell Techsys Division would demerge from the Company and vest with Resulting Company on going concern basis with effect from 1st April, 2023 i.e. appointed date, once the aforesaid Scheme become effective.

The Scheme will become effective on the date on which the certified true copy of the said Order would be filed with the Registrar of Companies, Kolkata, which is awaited.

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 2023-2024.

One-Time Settlement

Your Company has not made any one-time settlement against loans taken from the Banks or Financial Institutions during the Financial Year 2023-2024.

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.