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CCL Products (India) Ltd.

BSE: 519600 Sector: Agri and agri inputs
NSE: CCL ISIN Code: INE421D01022
BSE LIVE 15:40 | 17 Nov 306.80 0.20
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OPEN 305.70
PREVIOUS CLOSE 306.60
VOLUME 3960
52-Week high 371.80
52-Week low 233.00
P/E 36.65
Mkt Cap.(Rs cr) 4,082
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 305.70
CLOSE 306.60
VOLUME 3960
52-Week high 371.80
52-Week low 233.00
P/E 36.65
Mkt Cap.(Rs cr) 4,082
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

CCL Products (India) Ltd. (CCL) - Director Report

Company director report

Your Directors submit their report for the financial year ended 31.03.2017:

(Rs in Lakhs)

Particulars 2016-17 2015-16
Revenue from operations 70739 67719
Profit for the year after meeting all expenses (before Interest Depreciation & Tax) 17050 14040
Less:
Interest 683 430
Depreciation and other write offs 1067 984
Provision for Taxation 5431 4432
Net Profit 9869 8194
Balance brought forward 13189 8998
Balance available for appropriation 23058 17192
Provision for dividend - 3326
Provision for dividend tax - 677
Transfer to General Reserve - -
Balance carried forward to Balance sheet 23058 13189

Company Performance Your Company posted good financial the year under review.Turnover of the Company has increased from Rs 67719 Lakhs to Rs 70739 Lakhs and the netprofit of the Company increased from Rs 8194 Lakhs to Rs 9869 Lakhs.

Transfer of amount to General Reserve

No amount has been transferred to reserves during the year.

Dividend

Your Directors are pleased to recommend a final dividend of Rs 2.50/- per equity shareof Rs 2/- each for the year 2016-17 subject to the approval of shareholders.

Subsidiaries

Jayanti Pte Limited (Singapore)

Jayanti Pte Limited is a wholly owned subsidiary of the Company incorporated inSingapore for the purpose of promoting instant coffee projects in various countries. Thisis only an investment Company hence no operational performance is reported.

Grandsaugreen SA (Switzerland)

Grandsaugreen SA is a wholly owned subsidiary of Jayanti Pte Limited and step downsubsidiary of the Company incorporated in Switzerland. This is an agglomeration andpacking unit and a brief operational performance of the Company is as below:

Particulars 2016-17 2015-16
Revenue from operations 2282 8572
Profit for the year after meeting all expenses (before Interest Depreciation & Tax) (54) 159
Less:
Interest 14 22
Depreciation and other write offs 483 480
Provision for Taxation 21 32
Net Profit/Loss (572) (375)

Ngon Coffee Company Limited (Vietnam)

Ngon Coffee Company Limited is a wholly owned subsidiary jointly owned by CCL andJayanti Pte Limited. This is an instant coffee manufacturing unit and a brief operationalperformance is as below: (` in Lakhs)

Particulars 2016-17 2015-16
Revenue from operations 26353 24376
Profit for the year after meeting all expenses (before Interest Depreciation & Tax) 6711 6405
Less:
Interest 421 629
Depreciation and other write offs 1774 1375
Provision for Taxation - -
Net Profit/Loss 4516 4401

Continental Coffee Private Limited

Continental Coffee Private Limited is a wholly owned subsidiary of the Company whichhas been established with an objective of promoting instant coffee brands of the Companyin the domestic market and a brief operational performance is as below: (` in Lakhs)

Particulars 2016-17 2015-16
Revenue from operations 277 12
Profit for the year after meeting all expenses (before Interest Depreciation & Tax) (371) (2)
Less:
Interest - -
Depreciation and other write offs - -
Provision for Taxation - -
Net Profit/Loss (371) (2)

The statement containing the salient features of the financial statement ofsubsidiaries as per sub-section (3) of Section 129 of the Companies Act 2013 in FormAOC-1 is herewith annexed as ‘Annexure I' to this report.

Corporate Social Responsibility

The Company as part of its Corporate Social Responsibility (CSR) initiative undertookmany projects like promotion of education in rural areas infrastructure and sanitationdevelopment welfare of girl child facilitating pure drinking water to the identifiedrural areas in and around the factory at Duggirala Guntur District Andhra Pradesh andalso rural women empowerment and rural youth skill development programmes in rural areasaround Hyderabad.

The Annual Report on CSR activities is annexed herewith as ‘Annexure II' to thisreport. The CSR Policy is posted on the website of the Company and the web link ishttp://cclproducts.com/assets/csr-policy22.pdf

Internal Control Systems & their adequacy

The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies safeguarding ofits assets prevention and detection of frauds and errors accuracy and completeness ofthe accounting records and timely preparation of reliable financial disclosures.

Statutory Auditors

The Shareholders in their meeting held on 19th July 2014 approved the appointment M/s.M. Anandam & Co. Chartered Accountants Hyderabad as the Statutory Auditors of theCompany toholdofficetill the conclusion of 56th Annual General Meeting. The Board ofDirectors based on the recommendation of Audit Committee considered the appointment ofM/s. Ramanatham & Rao Chartered Accountants Secunderabad (Registration No. 002934S)as Statutory Auditors of the Company from the conclusion of 56th Annual General Meetingtill the conclusion of 61st Annual General Meeting subject to approval of shareholders inthe 56th Annual General Meeting and thereafter ratification of their appointment by themembers in every Annual General Meeting. Accordingly a resolution seeking Members'appointment for M/s. Ramanatham & Rao Chartered Accountants as the StatutoryAuditors of the Company is included in the Notice convening the Annual General Meeting forapproval of the shareholders.

Internal Auditors

The Board of Directors based on the recommendation of the Audit Committee havere-appointed M/s. Ramesh & Co. Chartered Accountants Hyderabad as the InternalAuditors of your Company. The Internal Auditors are submitting their reports on quarterlybasis.

Cost Auditors

In accordance with Section 148(3) and other applicable provisions if any of theCompanies Act 2013 and The Companies (Cost Records and Audit) Rules 2014 the AuditCommittee has recommended and the Board of Directors had appointed M/s. Kapardi &Associates Cost Accountants Hyderabad being eligible and having sought re-appointmentas Cost Auditors of the Company to carry out the cost audit of the products manufacturedby the Company during the financial year 2017-18 on a remuneration of Rs 150000/-. Theremuneration payable to the cost auditor is required to be placed before the Members inthe general meeting for their ratification. Accordingly a Resolution seeking Membersratification for the remuneration payable to M/s. Kapardi & Associates CostAccountants is included in the Notice convening the Annual General Meeting.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. P.S.Rao & Associates a firm of Company Secretaries in Practice toundertake the Secretarial Audit of the Company.

The Secretarial Audit Report is annexed herewith as ‘Annexure III' to this report.

Directors and Key Managerial Personnel

Based on the recommendation of Nomination and Remuneration Committee and subject toapproval of the shareholders in the ensuing Annual General Meeting the Board of Directorshave appointed Mr. B.Mohan Krishna as Whole Time Director of the Company for a period oftwo years designated as Director-Operations whose office is liable to retire byrotation. Accordingly resolutions seeking approval of Shareholders are included in theNotice convening the Annual General Meeting.

In accordance with the provisions of Section 152 of the Companies Act 2013 Ms.Shantha Prasad Challa and Mr.B.Mohan Krishna Directors of the Company retire by rotationand being eligible have offered themselves for re-appointment.

All the Independent Directors have given declarations stating that they meet thecriteria of independence as per the provisions of Section 149 of the Companies Act 2013and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. There was noresignation / appointment and removal of any Key Managerial Personnel during the year.

A Brief Profile of the Directors of the Company is annexed IV' to this report. withas‘Annexure

Meetings of the Board

Four meetings of the Board of Directors were held during the year. The details of theBoard and Committee meetings are given in the Corporate Governance Report which form partof this Annual Report.

Audit Committee

The Board has constituted Audit Committee as per the provisions of Section 177 of theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. The composition attendance powers and role of the Audit Committee areincluded in Corporate Governance Report. All the recommendations made by the AuditCommittee were accepted by the Board of Directors.

Policy on Director's Appointment Remuneration and other matters

(a) Procedure for Nomination and Appointment of Directors:

The Nomination and Remuneration Committee has been formed pursuant to and in compliancewith Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 and pursuant to Section 178 of the Companies Act 2013. The main object of thisCommittee is to identify persons who to are qualified become directors and who may beappointed in senior management of the Company recommend to the Board their appointmentand removal and to carry out evaluation of every Director's performance recommend theremuneration package of both the Executive and the Non-Executive Directors on the Boardand also the remuneration of Senior Management one level below the Board. The Committeereviews the remuneration package payable to Executive Director(s) and recommends to theBoard the same and acts in terms of reference of the Board from time to time.

On the recommendation of the Nomination and Remuneration Committee the Board hasadopted and framed a Remuneration Policy for the Directors Key Managerial Personnel andother Employees pursuant to the provisions of the Companies Act 2013 and SEBI (LODR)Regulations 2015.

The remuneration determined for Executive/Independent Directors is subject to therecommendation of the Nomination and Remuneration Committee and approval of the Board ofDirectors. The Non-Executive

Directors are compensated by way of profit sharing Commission and the Non-ExecutiveDirectors are entitled to sitting fees for the Board/Committee Meetings. The remunerationpaid to Directors Key Managerial Personnel and all other employees is in accordance withthe Remuneration Policy of the Company.

The Nomination and Remuneration Policy and other matters provided in Section 178(3) ofthe Act and Regulation 19 of SEBI Listing Regulations have been disclosed in the CorporateGovernance Report which forms part of this Report.

(b) Familiarisation/Orientation program for Independent Directors: A formalfamiliarization programme was conducted about the amendments in the Companies Act 2013Rules prescribed thereunder SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and all other applicable laws of the Company.

It is the general practice of the Company to notify the changes in all the applicablelaws from time to time in every Board Meeting conducted.

The details of such familiarization programmes for Independent Directors are posted onthe website of the Company and web link ishttp://cclproducts.com/assets/familiarization-programme-for-independent-directors-123.pdf

Annual Evaluation of Board Performance and Performance of its Committees and ofDirectors

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out the annualperformance evaluation of its own performance the Directors individually as well as theevaluation of the working of its Audit and other Committees.

A structured questionnaire was prepared after taking into consideration inputs receivedfrom the Directors covering various aspects of the Board's functioning such as adequacyof the composition of the Board and its Committees Board culture execution andperformance of specific duties obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who were evaluated on parameters such as level ofengagement and contribution independence of judgement safeguarding the interest of theCompany and its minority shareholders etc. The performance evaluation of the IndependentDirectors was carried out by the entire Board. The performance evaluation of the Chairmanand the Non Independent Directors was carried out by the Independent Directors who alsoreviewed the performance of the Secretarial Department. The Directors expressed theirsatisfaction with the evaluation process.

Particulars of Loans Guarantees and Investments

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.

Fixed Deposits

Your Company has not accepted any fixed deposits and as such no principal or interestwas outstanding as on the date of the Balance sheet.

Capex

The Company has spent `1719.62 Lakhs towards plant & machinery and other equipmentduring the year.

Directors' Responsibility Statement

Pursuant to Section 134 (5) of the Companies Act 2013 your Directors confirm that tothe best of their knowledge and belief and according to the information and explanationobtained by them

i) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;

ii) Such accounting policies as mentioned financial statements have beenselected the notes to the and applied consistently and judgments and estimates that arereasonable and prudent made so as to give a true and fair view of the state of affairs ofthe company at the end of the financial year 2016-17 and of the profit or loss of thecompany for that period;

iii) Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;

iv) The annual accounts for the year 2016-17 have been prepared on a going concernbasis.

v) That proper internal financial controls were in place and that the financial andwere operating effectively.

vi) That systems to ensure compliance with the provisions of all applicable laws werein place and were adequate and operating effectively.

Vigil Mechanism / Whistle Blower Policy

The Company has a Whistle Blower Policy framed to deal with instance of fraud andmismanagement if any in the Group. The details of the Policy are explained in theCorporate Governance Report and also posted on the website of the Company and the web linkis http://cclproducts.com/assets/whistle-blower-policy4.pdf

Risk Management

The Company has constituted a Risk Management Committee and formulated a policy on theRisk Management. The details of Committee and its terms of reference are set out in theCorporate Governance Report forming part of the Board's Report. The Risk Management Policyof the Company is posted on the website of the Company and the web link ishttp://cclproducts.com/assets/risk-management-policy4.pdf

Related Party Transactions

All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large.

All related party transactions are placed before the Audit Committee as also the Boardfor approval. Prior omnibus approval of the Audit Committee is obtained as per SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 for the transactionswhich are of a foreseen and repetitive nature.

The Company has developed a Policy on Related Party Transactions for the purpose ofidentification and monitoring of such transactions.

None of the transactions with related parties falls under the scope of section 188(1)of the Companies Act 2013. Information on transactions with related parties pursuant tosection 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules 2014are given in ‘Annexure V' in Form AOC-2 and forms part of this report.

The policy on Related Party Transactions as approved by the Board is uploaded on thewebsite of the Company and the web link ishttp://cclproducts.com/assets/policy-on-related-party-transactions22.pdf

Policy on Material Subsidiaries

The Policy on Material Subsidiaries as per SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 as approved by the Board is uploaded on the website of theCompany and the web link ishttp://cclproducts.com/assets/policy-on-material-subsidiary4.pdf

Extract of Annual Return

Pursuant to Section 92(3) of the Companies Act 2013 and Rule 12(1) of the Companies(Management and Administration) Rules 2014 the details forming part of the extract ofthe Annual Return in form MGT 9 is annexed herewith as ‘Annexure VI' to this report.

Management Discussion & Analysis

Pursuant to the provisions of Regulation 34(2) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a report on Management Discussion &Analysis is herewith annexed as "Annexure

VII" to this report.

Particulars of Employees

The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company is herewith annexed as ‘Annexure VIII' to this report.

Corporate Governance

The Company has been making every endeavor to bring more transparency in the conduct ofits business. As per the requirements of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a compliance report on Corporate Governance for the year2016-17and Certificate from the Auditors of the Company are furnished which form part ofthis Annual Report.

Human Resources

Your Company considers its Human Resources as the key to achieve its objectives.Keeping this in view your Company takes utmost care to attract and retain qualityemployees. The employees are sufficiently empowered and such work environment propels themto achieve higher levels of performance. The employees is the driving force behind theCompany's vision. Your Company unflinching appreciates the spirit of its dedicatedemployees.

Policy on Prevention Prohibition and Redressal of Sexual Harassment at Work place:

Your Company strongly supports the rights of all its employees to work in anenvironment free from all forms of harassment. The Company has adopted a Policy onPrevention Prohibition and Redressal of Sexual Harassment at workplace as per theprovisions of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and the Rules made thereunder. The policy aims to provide protectionto Employees at the workplace and prevent and redress complaints of sexual harassment andfor matters connected or incidental thereto with the objective of providing a safeworking environment where Employees feel secure. The Company has also constituted anInternal Committee known as Anti Sexual Harassment Committee to address the concerns andcomplaints of sexual harassment and to recommend appropriate action.

The Company has not received any complaint on sexual harassment during the year.

Energy conservation technology absorption and foreign exchange earnings and outgo

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Rules 2014 is annexed herewith as ‘Annexure IX'to this report.

Significant and material orders passed by the regulators or courts

There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.

Material Changes and Commitments

There were no material changes and commitments affecting the financial position of theCompany that have occurred between the end of the Financial Year 2016-17 of the Companyand the date of the report.

Acknowledgments

Your Directors take this opportunity to express their sincere appreciation to theshareholders customers bankers suppliers and other business associates for theirexcellent support and cooperation extended by them.

Your Directors gratefully acknowledge the ongoing co-operation and support provided bythe Central and State Governments Stock Exchanges SEBI RBI and other Regulatory Bodies.

On behalf of the Board
Sd/-
Place : Hyderabad Challa Rajendra Prasad
Date : 22nd May 2017 Executive Chairman

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

[Section 134(3)(m) of The Companies Act 2013 read with Rule 8(3) of The Companies(Accounts) Rules 2014]

A. Conservation of Energy

Your Company is making investments to up-grade technology in various utilitiesequipment in the soluble coffee plant to conserve energy.

The steam boiler continues to be a major energy conserver to the Company. CCL iscontinuously striving for the sustainability conservative utilisation of energy availableand to minimize the ecological footprint by finding out ways to best utilise the wastegenerated in the process of manufacturing instant coffee. Coffee is a product where only40% can be derived from the coffee beans for the productive usage and the rest 60% is inthe form of solid waste. This solid waste generated on drying up has greater calorificvalue.

i) the steps taken or impact on conservation of energy

We at CCL addressed this with detailed discussions with our boiler suppliers. Thesolid waste on drying up not only has good calorific value but is with very low ashcontent. Thus jointly with the boiler suppliers viz.

Thermax we have got the fuel system redesigned so as to enable using this solid wasteas fuel for boilers. This has not only resulted in substantial savings on fuel costs butalso is environmental friendly as the ash content is very minimal. Thus this effort ofthe company has not only served as a substitute for fossil fuel but also is an effectivemethod for waste disposal.

ii) Steps taken by the Company for utilising alternate sources of energy

The Company has been continuously saving considerable fuel cost for its boiler by usingrice husk and recycled solid waste as fuel.

An Electrostatic Precipitator (ESP) was installed to curb pollution from the boilerwhich enhance eco friendly operations at the Plant.

iii) The capital investment on energy conservation equipments

The Company is making additional investments mainly to recycle solid waste generated toreduce consumption of fuel for the boiler and for upgradation of the ETP to ensure thatthe effluent water meets surface water parameters. Furthermore the Company is upgradingthe existing ETP that will make the plant a zero liquid discharge (ZLD) Unit.

After 10 years of establishment major refurbishment was undertaken for the FreezeDried Unit. This has improved the efficiency in productivity resulting in less wastage ofthe product during production process and led to effective utilization of energy (in theform of steam and electricity consumption.)

B) Technology Absorption

i) Efforts made towards technology absorption:

The best technology in the world for the manufacturing of quality coffee is being usedby your Company and strives continuously to upgrade the technology.

ii) Benefits derived like product improvement cost reduction product development orimport substitution:

The technology being used has improved the production standards and optimised theoperational costs.

iii) In case of imported technology (imported during the last 3 years reckoned from thebeginning of the financial year) following information may be furnished:

a) Technology imported No technology imported during the last 3 years
b) Y ear of Import NA
c) Has technology been fully absorbed NA
d) If not fully absorbed areas where this has not taken place reasons therefore and future plans of action NA

iv) Expenditure incurred on Research and Development:

Your Company has a strong quality and assurance department which continuously strivesto improve process methods quality parameters etc. resulting in better value addedproducts improvement in quantities etc.

This department is part of the Company's routine operations and hence no specificallocation to be identified under Research and development.

C) Foreign Exchange Earnings and Outgo:

Total foreign exchange ` in Crores
Used 371.61
Earned 639.23

 

On behalf of the Board
Place : Hyderabad
Date : 22nd May 2017 sd/-
Challa Rajendra Prasad
Executive Chairman