A premier tea manufacturing company, Rossell Industries slipped into the red during 1999, posting a Rs 5.18 crore net loss for the year to December 31, 1999, against a profit after tax of Rs 5.70 crore profit in the previous fiscal. It was owned by YK Modi via UK-based Jokai Tea Holdings Ltd.

Rossell Industries changed hands when Jokai Tea sold its 65.03 per cent stake to Unilever Holdings at a price of Rs 173 per share. Unilever Holdings has already acquired 37 lakh shares from Jokai Tea and 15.80 lakh has been acquired by a wholly-owned subsidiary Lipton India Exports in India.

The company is awaiting the approval of the Foreign Investment Promotion Board to acquire another 37.88 lakh shares held by YK Modi and associates. All four members of the board are now Unilever nominees, those of Modi having resigned. The last to quit was managing director Deepak Atal earlier this month.

The new management has stated in its report to the shareholders that the company made a capital profit of Rs 15.03 crore from the sale of Koliamari tea estate. But it also took a Rs 17.18 crore charge on account of certain extraordinary and exceptional items arising from the diminution in the value of investments.

Cash inflow from the estate sale was used to pay Rs 19.68 crore due to financial institutions like Industrial Development Bank of India, Industrial Investment Bank of India and Industrial Finance Corp of India.

The repayments reduced the interest payout to Rs 4.72 crore in 1999 from Rs 6.91 crore the previous year.

Turnover dipped to Rs 65.27 crore in the year to December 31, 1999, from Rs 75.07 crore in the previous fiscal. The management attributed this to the drop in production after the sale of its Koilamari estate in April.

In addition to this, an unprecedented drought in Assam and West Bengal affected production last year.

Under its restructuring programme, the management shifted its subsidiaries Rossell Financial Services, RIL Investments Ltd, Bokel Investments Ltd, Modi Korea Telecommunications Ltd and Great Eastern Energy Corp out of its fold.Under the YK Modi-led management, the company had advanced Rs 30.62 crore as loans, advances and investments to businesses outside its core area to Rossell Financial Services and RIL Investments. The shareholders of the parent were issued one Rs 10 equity share in the subsidiary for every two Rs 10 fully paid-up equity shares held by them. The new management has noted that the loans, advances and investments of Rs 30.62 crore have been transferred and the corresponding equivalent amount has been adjusted against its general reserve.

Rossell Industries has written off Rs 13.04 crore in respect of investments and pre-paid lease rentals. Another Rs 41.06 lakh expenses made for a granite project, stated to be recoverable by the earlier management, has been also written off. In all, the company has made a Rs 16.37 crore provision in fiscal 1999 for other extra-ordinary, prior-period and non-recurring items.

Under loans and advances recoverable, the new management has listed Rs 13.58 lakh dues from managing director, Rs 3.12 lakh from executive vice chairman and another Rs 16.70 lakh from other directors. It has made Rs 15 lakh provision for doubtful advances in 1999.