Good
afternoon Ladies and Gentlemen. It is my pleasure to welcome you all to the 20th
Anniversary / AGM today. The year 2013 -
14 was a landmark year for your Company not only for its financials but also
for the diversification drive that we have undertaken. The highlight of our working was that we
continued to invest in businesses of the future with the objective of broad
basing our revenues, addressing larger opportunities and de-risking our business
model from an excessive dependence on any one segment. I shall now address our areas of business
individually.
Tea
The
Directors view with great satisfaction your Company’s performance for the year
under review. The Tea Division, on the
back of good weather and well distributed rainfall earlier in fiscal 2013 - 14,
produced a record crop of 5.56 million kgs. 27.67% higher than in the previous
year. The price averages continued to be
the highest in the industry for Assam Assam
The
year 2013-14 began on a sluggish note and quickly settled down as heavier
harvests came in. Demand for CTC teas
was slow to gain ground, whilst orthodox teas came to a buoyant market due to
good as also early demand from Iran Assam Assam Assam
Exports
The
Division’s exports were robust and grew to 1.24 million kgs. as against 1.02
million kgs. in 2012-13. In volume terms
this represents a growth of 21.70%, and in value per kg. realization was higher
by 35.02%. This is on the back of an
outstanding performance in fiscal 2012-13.
Quality
Your
Company’s commitment to consistent quality in all its areas of operation has
paid handsome dividends by way of continual enhanced recognition of its brand
equity. Rossell is seen as a responsible
and ethical producer of quality teas; we recognize tea as a food product and
are committed to meet the highest safety norms in the industry. To ensure this we are in the process of
completing the FSSC : 22000, the world’s highest certification for food
processing units.
Whilst
we are extremely positive of the Division’s continual and aggressive growth
both in the quality and quantity segments, we must recognize the existing
concerns which are omnipresent. The acceleration in cost of production despite
improved productivity indices is one of them. Manpower migration continues
unabated across the north eastern tea belt and your Company is similarly
affected; with worker outturn being lower than the previous year on some
estates. Mechanical harvesting
experiments continue at Nagrijuli T.E. Climate change and its impact witnessed
over the last few years has affected production estimates repeatedly.
Development
Modernization
and upgradation of assets continue at Rossell.
The well defined policy of uprooting and replanting on the Company’s
estates is progressing well. In a
significant move, given the climate change aberrations, it was decided to
introduce irrigation facilities at Dikom, Namsang, Kharikatia and Romai
T.Es. These will be further augmented in
2014-15. The Company is committed to
improving the workers’ housing and sanitary framework and this was further
improved in fiscal 2013-14. Workers
appreciation has been forthcoming, which is gratifying. Rossell has a long-term perspective in all
areas of development; this is not only continuing but is being reinforced
further.
International crop situation
Across
the major black tea producing countries till June there is a deficit of 37
million kgs. of which India Bangladesh is (-)7.3
million kgs., Kenya and Sri Lanka
Prospects
As mentioned
earlier, the very dry conditions pertaining since November 2013 into May 2014,
have resulted in a very severe drought into the new season. This has affected harvests severely and crops
have declined sharply in April and May, whilst June and July have shown
marginal declines over last year. It is
hoped that cropping from hereon will be normal.
It has
been a difficult start as the second flush production was truncated and quality
was affected due to a delay in its onset in June, 2014. Your Company is clear that quality will pay
in this scenario as evidenced by the segmentation of the quality, which is
being well rewarded both in the CTC and orthodox categories. Price-wise
the latter category has been impacted due to high stocks in Iran
The
Tea Division’s performance in 2013 – 14 was exemplary and outstanding. This has been the result of incisive
planning, action and implementation. We
continue to build on our core competence with great success.
Outlook
Going
ahead, the Company intends to counter climatic changes, rising fertilizer costs
and wage increases through sustainable agricultural practices leading to
enhanced quality, productivity, revenues and profits. Since consistent growth has been its driving
force the Company is on the lookout for acquisitions. To conclude on the Tea
Division, the prospects of the Indian tea industry, despite a poor start this
year, are bright for some pertinent reasons: a growing national population, an
established tea drinking tradition, low per capital consumption that is
expected to rise in line with enhanced incomes, and finally increased
preference for quality. Whilst tea is a
cyclical industry, in the medium term the industry will remain demand driven
and hence remunerative.
Aerotech
Services
I would like to inform you that Aerotech Services is in its ninth year
of providing product support services for Original Equipment Manufacturers
(OEMs). During the year your company has
continued to fulfill its commitments towards the highest level of satisfaction
of both the OEM and the customer.
Your company is continuing to enhance the quality of product support for
the equipment fitted on various Indian platforms in the three services.
Based on your company’s performance we are in advance stages of signing
more contracts with other OEMs.
Rossell
Techsys
I am pleased to inform you that the
efforts engaged in developing Rossell Techsys are now paying. Rossell Techsys received its first export
order from the world’s leading aerospace company Boeing of USA for the F-18
Super Hornet aircraft for the US Navy.
We have already started executing delivery against the said order which
have been well received by Boeing. Our
on time deliveries with highest quality and no rejection has fetched us a Gold
rating.
In Jun’14, RT has received another
order from Boeing for F-15 Super Eagle aircraft. The deliveries will start in Sept’15 and will
be done over a period of 36 months.
We are also responding to other RFPs
from the same company and are hopeful to win more orders.
Your company has also been selected
as a Key Industrial Partner (KIP) from another major European OEM and have also
received an order from them.
RT keeps working towards additional
accreditations and is now an ISO :14001 and ISO : 27001 company as well.
Seeing the growth opportunities with
various OEMs, Rossell Techsys is investing in creating its own state of the art
infrastructure to meet the future requirements.
Rossell
Hospitality
I am
pleased to inform you that your company’s division Rossell Hospitality is going
from strength to strength. I am happy to
inform all the Members that today ‘Kebab Xpress’ has 8 operational outlets in
strategic locations across NCR.
The
brand has decent presence and is looked at as a strong and vibrant Indian
QSR. The Same Store Sales have seen a
good double digit growth and the entire team is steering the format for
enduring business growth.
The
business development team is aggressively identifying good potential sites in
high streets, office complexes and food courts to achieve the target of opening
20 outlets by the end of current financial year 2014-15.
To
achieve our objective of taking Kebab Xpress pan India ,
next year we intend to open 10 outlets in a new city
New
product launches, ‘new centralized delivery’ and existing interior design
concepts will boost sales and enrich our customer’s eating out experience. In this ever challenging environment the
company has been able to competitively manage it costs through dynamic supply
chain and maintain a low attrition rate compared to the industry.
Conclusion
To conclude, we are optimistic of our prospects as each of our new
businesses are perched at the bottom-end of a long industry curve, while our
mature tea business continues to report profitable growth.
As a growth-driven corporate, we will continue focusing on enhancing our
profitability in our existing businesses with the objective to accelerate
momentum and enhance stakeholder value.
Going ahead, I am confident that our performance will validate our
business strategy to enter relatively unconnected businesses in response to
overarching national and sectoral opportunities.
Thank you,
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