DIRECTORS' REPORT Your Directors submit their report for the financial year ended 31.03.2015 Company Performance Your Company posted good financial results during the year under review. Turnover of the Company has increased from Rs. 61,110 Lakhs toRs. 67,198 Lakhs and the net profit of the Company increased from Rs. 7,326 Lakhs to Rs. 7,466 Lakhs. Dividend Your Directors are pleased to recommend a dividend of Rs. 1.50/- per equity share of Rs. 2/- each for the year 2014-15 subject to the approval of shareholders. Subsidiaries Jayanti Pte Limited (Singapore) Jayanti Pte Limited is a wholly owned subsidiary of the Company incorporated in Singapore for the purpose of promoting projects in various countries. This is only an investment subsidiary, hence no operational performance is reported. Grandsaugreen SA (Switzerland) Grandsaugreen SA is a wholly owned subsidiary of Jayanti Pte Limited and step down subsidiary of the Company incorporated in Switzerland. This is an agglomeration and packing unit and a brief operational performance of the Company is as below: Continental Coffee Private Limited Continental Coffee Private Limited is a wholly owned subsidiary of the Company, which has been established with an objective of promoting instant coffee brands of the Company in the domestic market. The Statement containing the salient feature of the financial statement of subsidiaries as per sub-section (3) of Section 129 of the Companies Act, 2013 in Form AOC-1 is herewith annexed as 'Annexure I' to this report. Corporate Social Responsibility The Company as part of its Corporate Social Responsibility (CSR) initiative, undertook many projects like promotion of education in rural areas, infrastructure and sanitation development, welfare of girl child, facilitating pure drinking water to the identified rural areas in and around the factory at Duggirala, Guntur District, Andhra Pradesh. The Company also contributed towards improvement of health and sanitation to set up Green Toilets at several places throughout Guntur District. The Company also took the initiative to construct houses to the Hudhud cyclone victims at Visakhapatnam District of Andhra Pradesh. The Annual Report on CSR activities is annexed herewith as "Annexure II" to this report and CSR Policy is posted on the website of the Company and the web link is <http://cclproducts.com/wp-content/> uploads/2015/05/CSR-Policy.pdf In furtherance of its commitment to the society, during the year under review, your Company other than those covered under CSR, has donated Rs. 213 Lakhs to many welfare and philanthropic activities in the areas of education, sports, culture, construction of houses to weaker sections and other charitable purposes. Statutory Auditors The shareholders in their meeting held on 19th July, 2014 approved the appointment of M/s. M. Anandam & Co., Chartered Accountants, Hyderabad, as the Statutory Auditors of the Company to hold office till the conclusion of 56th Annual General Meeting subject to ratification of shareholders in every Annual General Meeting. Accordingly, a resolution seeking Members' ratification on appointment of M/s. Anandam & Co., Chartered Accountants, Hyderabad, as the Statutory Auditors of the Company for the financial year 2015-16 is included at Item No.4 of the Notice convening the Annual General Meeting. As required under Clause 49 of the Listing Agreement. Internal Auditors The Board of Directors based on the recommendation of the Audit Committee have re-appointed M/s. Ramesh & Co., Chartered Accountants, Hyderabad, as the Internal Auditors of your Company. The Internal Auditors are submitting their reports on quarterly basis. Cost Auditors In accordance with Section 148(3) and other applicable provisions, if any, of the Companies Act, 2013 and The Companies (Audit and Auditors) Rules, 2014, the Audit Committee has recommended and the Board of Directors had appointed M/s. Kapardi & Associates, Cost Accountants, Hyderabad, being eligible and having sought re-appointment, as Cost Auditors of the Company, to carry out the cost audit of the products manufactured by the Company during the financial year 2015-16 on a remuneration of Rs.1,00,000/- . The remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a resolution seeking Members' ratification for the remuneration payable to M/s. Kapardi & Associates, Cost Accountants, is included at Item No.7 of 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 has appointed M/s. P.S.Rao & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as "Annexure III" to this report. Directors The Board of Directors have appointed Mr. G.V. Krishna Rau, IAS (Retd.) as an Additional Director of the Company who holds office till the ensuing Annual General Meeting. The Board, based on the recommendation of Nomination and Remuneration Committee considered the appointment of Mr. G.V.Krishna Rau as an Independent Director subject to approval of shareholders. Accordingly a resolution seeking approval of shareholders for his appointment as an Independent Director for a period of five years is included at Item No.5 of the Notice convening the Annual General Meeting. The Board of Directors have appointed Ms. Kulsoom Noor Saifullah as an Additional Director of the Company who holds office till the Annual General Meeting. The Board, based on the recommendation of Nomination and Remuneration Committee considered the appointment of Ms. Kulsoom Noor Saifullah as a Non-Executive Director subject to approval of shareholders. Accordingly a resolution seeking approval of shareholders for her appointment as a Non-Executive Director whose office is liable to retire by rotation is included at Item No.6 of the Notice convening the Annual General Meeting. In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. B. Mohan Krishna, Director of the Company retires by rotation and being eligible, has offered himself for re-appointment. Mr. Zafar Saifullah, IAS (Retd.), Director of the Company passed away on 25th July, 2014. He was associated with your Company as an Independent Director since 2007. Your Directors paid their tribute to him at their meeting held on 28th October, 2014. Mr. Jonathan T Feuer resigned from the office of the Director w.e.f 17th March, 2015. Every Independent Director, at the first meeting of the Board in which he participates as a Director and thereafter at the first meeting of the Board in every financial year, gives a declaration that he meets the criteria of independence as provided under the Companies Act, 2013. A Brief Profile of the Directors of the Company is annexed herewith as "Annexure IV" to this report. Particulars of Loans, Guarantees or Investments Details of Loans, Guarantees and Investments covered under the provisions of Section 186 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 interest was outstanding as on the date of the Balance sheet. Capex The Company has spent Rs.1,074 Lakhs towards balancing equipment during the year. Directors' Responsibility Statement Pursuant to Section 134 (5) of the Companies Act, 2013, your Directors confirm that to the best of their knowledge and belief and according to the information and explanation obtained by them, i) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; ii) Such accounting policies as mentioned in the notes to the financial statements have been selected and applied consistently and judgments and estimates that are reasonable and prudent made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2014-15 and of the profit or loss of the Company for that period; iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) The annual accounts for the year 2014-15 have been prepared on a going concern basis. v) That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. vi) That systems to ensure compliance with the provisions of all applicable laws were in 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 and mismanagement, if any in the Group. The details of the Policy are explained in the Corporate Governance Report and also posted on the website of the Company and the web link is < uploads/2015/05/Whistle-Blower-Policy.pdf Risk Management Pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has constituted a Risk Management Committee and formulated a policy on the Risk Management. The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board's Report. The Risk Management Policy of the Company is posted on the website of the Company and the web link is <http://cclproducts.com/wp-content/uploads/2015/05/Risk-Management-Policy.pdf> Related Party Transactions All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All related party transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained as per Clause 49 of the Listing Agreement for the transactions which are of a foreseen and repetitive nature. The Company has developed a Policy on Related Party Transactions for the purpose of identification and monitoring of such transactions. The Policy on Related Party Transactions as approved by the Board is uploaded on the website of the Company and the web link is <http://cclproducts.com/wp-content/uploads/2015/05/Policy-on-Related->Party-Transactions-.pdf The particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 in Form AOC-2 is herewith annexed as 'Annexure V' to this report. Policy on Material Subsidiaries The Policy on Material Subsidiaries as per Clause 49 of the Listing Agreement as approved by the Board is uploaded on the website of the Company and the web link is <http://cclproducts.com/wp-content/> uploads/2015/05/Policy-on-material-subsidiary.pdf Extract of Annual Return The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure VI" to this report. Management Discussion & Analysis Pursuant to the provisions of Clause 49 of the Listing Agreement, 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 employees of 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 of its business. As per the requirements of the Listing Agreement with the Stock Exchanges, a compliance report on Corporate Governance for the year 2014-15 and a Certificate from the Auditors of the Company are furnished which form part of this 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 quality employees. The employees are sufficiently empowered and such work environment propels them to achieve higher levels of performance. The unflinching commitment of the employees is the driving force behind the Company's vision. Your Company appreciates the spirit of its dedicated employees. Energy conservation, technology absorption and foreign exchange earnings and outgo The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 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 would impact the going concern status of the Company and its future operations. Acknowledgments Your Directors take this opportunity to express their sincere appreciation to the shareholders, customers, bankers, suppliers and other business associates for the excellent support and co-operation extended by them. Your Directors gratefully acknowledge the ongoing co-operation and support provided by the Central and State Governments, Stock Exchanges, SEBI, RBI and other Regulatory Bodies. On behalf of the Board Sd/- Challa Rajendra Prasad Executive Chairman Place : Hyderabad Date : 26th May, 2015 |