DIRECTOR'S REPORT To The Members The Directors of the Company present to you the 18th Annual Report of the Company, together with the Audited Balance Sheet as at 31st March, 2015 and the Statement of Profit and Loss for the year ending on 31st March, 2015. 1.1 FINANCIAL PERFORMANCE The Company has achieved Net sales of Rs. 678.53 Crores for the year ended 31st March, 2015 as compared to Rs.884.61 crores in the previous year. The Company has incurred a Net loss of Rs. 154.23 Crores as against a loss after taxes of Rs. 223.69 Crores in the previous year. The losses are attributable to high input costs, irregular supply of raw materials, high finance costs and unfavorable market conditions. 1.2 CORPORATE DEBT RESTRUCTURING (CDR) The year saw progressive implementation of / compliance with the approved CDR package / conditions. The statutory process is under process for the demat and trading approvals with listed stock exchanges. The company in spite of its constant efforts could not infuse funds as per the CDR requirements before 1st April 2015. The company could only infuse an amount to the tune of Rs 55 crores out of the sale of the company's Porur property. The rest of the amount is being converted into equity and has been allotted to the CDR lenders The company, as per the approved CDR package, should infuse funds to the tune of Rs.220 crores towards margins, reduction of debt and shoring up of working capital by 31 March 2015. The company has during the year infused Rs.54.45 crores (net of TDS). The CDR lenders have, in the event of infusion of funds not materializing, decided to convert the balance of loans due, as per CDR, on 1st April 2015 into equity of the Company, subject to the extant of statutory guidelines. 2. SHARE CAPITAL The paid up Equity Share Capital as on 31st March, 2015 is Rs. 36.96 Crores. During the year under report, the Company has not issued any shares with differential voting rights nor granted stock options nor sweat equity. 3. DIVIDEND Your Directors have not recommended any dividend for the financial year 2014-15 in view of the losses incurred and the need to conserve resources of the Company. The Company is also required to seek prior approval of the lenders for declaration of dividend, in terms of the Corporate Debt Restructuring package. 4. MANAGEMENT DISCUSSION AND ANALYSIS CONSTRUCTION INDUSTRY OUTLOOK: Construction Industry Overview The construction/infrastructure sector is likely to get major boost from the Government's focus on development of infrastructure in India. While the recovery in the sector is likely, it would be gradual as majority of players are still burdened with leveraged balance sheets and stalled or slow moving projects. Furthermore, if structural constraints like uncertainty in land acquisition, delays in approvals, and inadequacy of long term funding avenues are not tackled swiftly, the project implementation on the ground may not gather momentum, thereby delaying recovery in the infrastructure sector. In addition, aggressive bidding in the past and inability or limited ability to raise equity for back on topic projects have also impacted viability of infrastructure projects. These impediments need to be overcome for project implementation to gather pace. Difficulty in achieving financial closure and overall weak macro-economic environment had also reduced the risk appetite of developers towards new projects. These factors, amongst others, have resulted in relatively modest growth in Gross Fixed Capital Formation (GFCF) and Construction GVA (Gross Value Added) in 9 months of FY 14-15. With the political stability, sharper focus on infrastructure development and improvement in economy, new projects announcements are likely to pickup in FY 15-16. The construction industry is the second largest industry in India after agriculture. It accounts for about 11% of India as GDP. It makes significant contribution to the national economy and provides employment to large number of people. There are mainly three segments in the construction industry like real estate construction which includes residential and commercial construction; infrastructure building which includes roads, railways, power etc; and industrial construction that consists of oil and gas refineries, pipelines, textiles etc. Indian Construction Industry Outlook The recovery in the construction sector is expected to be gradual and would be linked with on-ground impact of the policy measures as well as availability of funding. With high leverage, ability to raise funds via stake sale in subsidiaries, monetization of assets, or dilution of equity will be key in improving liquidity and capital structure of construction companies that have been aggressive in the BOT space in past. Many companies have either raised or have plans of raising funds through equity route like Qualified Institutional Placement (QIP)/Rights issue/Warrants/Preference shares or sale of stake at the SPV or holding company level to reduce overall indebtedness at the Group level. The likely reversal in the interest rates cycle would also provide some respite. The construction industry in India is highly fragmented. There are number of unorganized players in the industry which work on the subcontracting basis. To execute more critical projects, nowadays bids are increasing placed in consortium. But the profitability of the construction projects varies across different segments. Complex technology savvy projects can fetch higher profit margins for construction companies as compared to low technology projects like road construction. Various projects in Construction industry are working capital intensive. Working capital requirement for any company depends on the order mix of the companies. The construction industry operates on the basis of contractual agreements. Over the years different types of contracts have been developed. It mainly depends on the magnitude and nature of work, special design needs, and annual requirements of funds and complexities of job. Construction projects can be materialized through number of smaller contracts which mainly depends upon size of the project and diversified nature of activities to be carried out in the project. As a result, Subcontracting is a common phenomenon in the construction industry. Provisions for Infrastructure sector in Budget 2015-16 In the Budget 2015-16, the capital outlays for roads, and railways have been increased by Rs.140.3 billion and Rs.100.5 billion respectively which along with significantly higher Road Cess will enable higher public spending towards these infrastructure projects. In total, investment in infrastructure is proposed to increase by Rs.700 billion in FY16 (BE) over FY15 (RE). Recognizing the need of reviving private sector participation in infrastructure projects, Budget has proposed rebalancing of risks in PPP projects with Government taking up major risks, appointing an Expert Committee for analysing the possibility of and replacing multiple prior permissions with a pre-existing regulatory mechanism, and rationalizing dispute resolution mechanism. The budget also proposes to set-up 5 Ultra Mega Power Projects totaling 20 GW in the plug-and-play mode wherein all clearances and linkages will be obtained before the award of project. It has also announced its intent towards some large infrastructure projects like building 100 smart cities and Sardar Patel Urban Housing Mission, which will provide long term infrastructure opportunities. In the railways sector, the focus is on faster execution of Dedicated Freight Corridor (DFC) which is an important on-going project. Investments & Government Initiatives: International investment FDI regulations in India were relaxed in late 2014, making it easier for international companies to invest in the nation's construction industry. As of December 3rd 2014, the minimum thresholds for contributing to Indian projects have been significantly reduced. Foreign firms can contribute to any projects with a minimum built area of 20,000 sq m, whereas before that threshold was 50,000 sq m. Similarly, the minimum capital investment by foreign firms has been halved from $10 million to $5 million. Government Initiatives The Indian Government is taking every possible initiative to boost the infrastructure sector. Some of the steps taken in the recent past are being discussed hereafter. The Reserve Bank of India (RBI) has notified 100 per cent foreign direct investment (FDI) under automatic route in the construction development sector. The new limit is effective 2 December 2014, RBI said in a notification on its website. Recently, the Government has relaxed rules for FDI in the construction sector by reducing minimum built-up area as well as capital requirement and liberalized the exit norms. The Cabinet has also approved the proposal to amend the FDI policy. India and the US have signed a memorandum of understanding (MoU) in order to establish Infrastructure Collaboration Platform. The document showcases the relationship between both the Governments which intend to facilitate US industry participation in Indian infrastructure projects to improve the bilateral commercial relationship and benefit both the Participants' economies. The MoU's scope envisages efforts in the areas of Urban Development, Commerce and Industry, Railways, Road Transport and Highways, Micro Small and Medium Enterprises, Power, New & Renewable Energy, Information and Broadcasting, Communications & Information Technology, Water Resources, River Development and Ganga Rejuvenation. Challenges: Despite the rapidly recovering construction market, many companies are still finding it difficult to be successful. Margins are tighter than ever and a lot of companies are trading dollars, but not finding the success they are seeking. 5 challenges the construction industry is facing right now. Undercapitalization—Operating money is critical to achieve success. Do not underestimate the capital needed to pursue the most profitable projects and have the cash necessary to fund those projects until draws can be obtained. Many bad decisions are made while companies are in panic mode due to their cash being unavailable. Bad Cash Flow—we all know that getting paid gets harder and harder all the time. Submitting for draws and having an understanding of how each particular client pays is critical to maintaining a positive cash flow into your businesses. A missed draw or poor paying clients has caused many problems in our industry. Stay on top of your cash flow and draw dates. Inadequate Planning—Understanding your manpower and cash issues can determine the success or failure of any project. Do not overestimate your capabilities or underestimate your cash flow. Map out the details of all of the projects going on and what you are bidding that could happen in the nearfuture. Know who you are and what you can do. Inflexibility—Map out your plan and continually review your plan versus reality. Be willing to make changes when you see your plan is failing. Working without a plan or refusing to gauge success against that plan has doomed many companies to continue down a road to failure. Have a willingness to change the plan and learn. If you haven't failed, you have not done much. However, learn from failures and incorporate that knowledge into the next plan Uncontrolled Growth—Know who you are, who works for you, and what all of your capabilities are. When growth is not controlled, we lose site of who we are and what we are capable of. Set realistic goals and allow your company to grow at the same rate as your capabilities. We hope some of these suggestions will help every one of our clients realize the success hard work should deliver. Unfortunately, sometimes working harder is not the answer. We need to work smarter. Future Outlook of the Industry India's construction sector is forecast to grow at 7-8 percent each year over the next decade following the election of a new government, according to a news report by an international consultancy giant. The country will see increased economic growth, and the removal of barriers to foreign investment will "spur demand for construction" over the coming 12 to 18 months, says PricewaterhouseCoopers India report. The report has been prepared for The Big 5 Construct India exhibition in September and offers a snapshot of the US$157 billion Indian construction sectorfollowing the May elections. "With a new government having been formed at the Centre, with a strong mandate to stimulate economic growth, the outlookfor the sector appears positive," it says. An estimated US$1 trillion is being spent on infrastructure over the five years to 2017 and there is increased investment in industrial projects by the government. But it is the private housing sector that the PwC report highlights as a key growth area. It says, "Demand for real estate has been one of the drivers of construction sector growth over the last 10 year. Improvement in economic conditions has the potential to drive demand for real estate, as housing continues to be a favoured investment asset among Indian households." The report's positive forecast is reflected in a strong increase in interest for this year's Big 5 Construct India show in Mumbai, said Muhammed Kazi, Senior Project Manager of the Big 5 Construct India, which runs from September 11 to 13 at the Bombay Exhibition Centre in Mumbai. He said, "The country of 1.2 billion people is set to undergo a boost in the construction sector and this new report gives a snapshot of where the country is heading. "The Big 5 Construct India is organised by the Federation of Indian Chambers of Commerce and Industry (FICCI), Ministry of Urban Development, in association with dmg events, will bring together suppliers and contractors for three days. Alongside the products, there will be the opportunity to examine a range of key industry issues, from sustainability and equipment to building regulations and alternative technologies, through workshops and seminars." The total construction market in India for FY2014 was US$157 billion, an increase of US$4 billion over FY2013. Infrastructure accounts for49 percent, housing and real estate42 percent and industrial projects 9 percent CCCL COMPANYSCENARIO Performance Highlights In an adverse environment the company had been successfully executed the projects. Company began the current financial year with an order book which stood at Rs .43315.80 Lacs. The size and structure of the organisation was geared for catering to take up larger projects but with economic slowdown and lower order booking coupled with slower project execution the asset base and the fixed cost structure which was built up affected the company's profitability. The lower turnover and operating margins in an environment of high interest costs severely affected the Company's profitability. In addition, further litigation and non payments of claims adversely affected the Company's liquidity. Company's revenue growth and profitability was muted in the last few quarters due to order execution-related issues. CCCL's revenue declined in FY 2015 due to slowdown in order execution. Delay due to exogenous factors such as delay in procuring environmental approvals, land acquisition and government decision making have adversely affected performance. Delayed project execution has in turn affected payment from clients and the Company's cash flows. The year under review has seen enhanced working capital requirements. This has been due to clients delaying payments. Amounts due from clients have shot up to Rs. 1070.18 crores ( including retention of Rs.168.95. Crores.) as the recovery has been slow. In certain cases we have initiated legal action for recovering these dues. Dues from clients for completed major projects to the tune of Rs.102.57 crores has added to liquidity crunch. The Infrastructure sector is facing strong headwinds, including slowdown in order booking caused by shortfall in investments in the infrastructure sector, increased commodity prices and high interest rate scenario. As a consequence of certain unexpected developments which were beyond the control of management, mainly delays in decision making by the Company's major clients and delays in settlement of claims, the expected cash flows have not materialized for the Company. These factors coupled with slowdown in Infrastructure industry has resulted in lower turnover, lower operating margins and high interest costs for the Company which has consequently led the Company to incur net loss for the first time since its inception. STEPS TAKEN OR PROPOSED TO BE TAKEN FOR IMPROVEMENT: Company has taken view of all these factors seriously and to overcome the above challenges, has proactively undertaken the following steps directed at improving its operational efficiencies: Claims Realisation: Persistent efforts are being made by Company to collect dues and claims. The Company has set up a strategic senior management team to recover dues and claims outstanding from Clients. Total outstanding as of 31st March 2015 is Rs.107018.17/- lacs (including retention of Rs.16895/- lacs).Overdue outstanding more than 180 day is Rs.1073.05/- Lacs. Cost optimisation: Over the past 12 months, Company has implemented cost optimization measures such as cutting overheads and rationalization of human resources. These internal cost cutting has brought down the overhead cost to the tune of Rs.38.29 crores. Reduction in Working Capital: Insistence on higher advances from customers and better credit terms with suppliers are being negotiated. Monetization of assets: Company is proactively exploring monetization of assets either at the parent level or in its subsidiaries / step down subsidiaries. Bidding for Jobs: The Company has been careful in bidding for new jobs and is taking jobs only on a selective basis. CAUTIONARY STATEMENT It is explicitly states that some of the statements in the Management Discussion and Analysis report are likely to be forward looking and it may so happen that the actual events or results may differ from what the Board of Directors/ Management perceive in terms of the future performance and outlook due to factors having a bearing on them and which are beyond precise perception. Company's operations may be affected with supply and demand situations, input prices and their availability, changes in government regulations and policies, tax laws and other factors such as Industrial relations, fund constraints and macro economic development. UNLOCKING INVESTMENTS IN SUBSIDIARIES Particulars of Loans and Advances in the nature of loans as required by clause 32 of the Listing Agreement. CCCL has made total investments of Rs.534.24 Crores in its subsidiaries viz. CCCL Infra (Rs. 22.91 Crores), NCGL (Rs. 1.65 Crores) .These investments are yet to yield returns. While the investment decision is sound, the execution of these businesses have faced various bottlenecks in the form of non- availability of working capital, un-favourable market conditions, other macroeconomic issues. These have stressed the cash flows of the parent company, CCCL presently, we are in advanced discussions with various investors. Going forward, it is proposed to unlock their value by divesting majority equity stake in these companies. The Board of Directors of CCCL has in principle approved the divestment of its subsidiary viz; M/s. CCCL Infrastructure Limited. 5. SUBSIDIARIES In accordance with the General Circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. However, the financial information of the subsidiary companies is disclosed in the Annual Report in compliance with the said circular. Consolidated Interiors Ltd: The focus has been to complete the jobs on hand and wait for the right opportunities till the market stabilizes. Due to sluggishness in the environment there is not much headway with the progress. However, the situation is expected to improve by the second half of 2015-16. Noble Consolidated Glazings Ltd. (NCGL) The glazing market being a sub set of the construction industry, the various factors discussed above drastically affected the operations of NCGL. Completion of projects on hand and collection of receivables and optimization of costs had been the priority in 2014-15. With the much awaited economic stability expected in 2015-16 and the resultant market improvement better days are foreseen. The company is not able to meet its commitments with respect to one of its bankers. The company has restructured its working capital limits sanctioned by other banks to ease its liquidity. The Company has streamlined its operations and expected to perform better in the near future. CCCL Infrastructure Ltd. In view of the impetus to green power the company is looking for a strategic/financial partner to increase the capacity of solar power generation. Currently the 5 MW solar power plant is consistent in power generation. CCCL Pearl city Food port SEZ Ltd. This is the step down subsidiary of CCCL Infrastructure Ltd. The company is on the lookout for a strategic/financial partner for sprucing up the operations. The much expected, revival of the tax concessions to SEZ and the general economic scene, we believe, shall make this viable. Delhi South Extension Car Park Ltd. The Concession fee paid to Delhi Municipal Corporation has been refunded in view of project cancellation. The company has certain claims against Delhi Municipal Corporation for the cancellation. The same is under consideration by Delhi Municipal Corporation. A Statement Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014 containing salient features of the financial statement of subsidiaries/associate companies/joint ventures in Form AOC-1 is annexed to this report as "Annexure A". OPPORTUNITIES Construction opportunities have almost doubled for this period from the infrastructure projects lined up across various sub-segments of Power, Roads, Railways, Irrigation & water supply, Ports and Airports. There is a long-term demand for quality infrastructure construction, mainly emanating from housing, transportation and urban development segments that far exceed the supply, even though there has been a substantial increase in the number of contractors and builders, especially in housing and road construction segment. 7. THREAT PERCEPTION • Despite the prospects, the sector continues to face challenges from land acquisition issues, adverse political and structural changes, shortage of talent, design and constructability issues, and rising material and labor costs. However, the land acquisition and environment related issues are being addressed on warfooting basis to ease the constraints. • Policy bottlenecks, slow clearance of projects and rising inflation have dampened private sector sentiments and have stifled investments in Capital expenditure. A high level committee has been constituted for speedy clearance of stalled projects and monitoring the implementation. • Working capital cycle has been elongated mainly due to stretched receivables, which has affected the cash flow position of the companies in the sector. Many of the companies have been forced to draw their full limits with the Banking system or restructure the facilities. • Lengthy dispute resolution mechanism in the sector is yet another major factor affecting the cash flows of the construction companies • This coupled with rising interest rates have led to a drop in the PAT margin and deterioration of debt coverage ratios of construction companies 8. RISK PERCEPTION The Directors are constantly assessing the business risks pertaining to the performance of the Company. The following are the important risks perceptions: • Quality Maintenance of the work. • Adequate availability of Raw Materials • Removal of Transport Bottlenecks • Sudden Increase in Prices of Inputs • Customers Default- • Inadequacy of Finance Arrangement • Statutory Policies • Events Due to Unforeseen Circumstances • Volatility in domestic construction environment. Your Directors are fully conscious of the various business risks and have taken adequate care to tackle any situation. Strict controls are enforced on all matters for smooth operation of the projects 9. INTERNAL CONTROLSYSTEM AND THEIRADEQUACY The Company has a sound internal control system. All transactions are subject to proper scrutiny. The Management takes immediate corrective action wherever it is being pointed out to help streamline the internal control process. The management shall ensure the effectiveness of the working of such policy. 10. CONSOLIDATED FINANCIAL STATEMENTS In accordance with the Accounting Standard (AS)-21 on Consolidated Financial Statements read with AS -23 on Accounting for Investments in Associates and AS - 27 on Financial Reporting of Interests in Joint Ventures, the audited consolidated financial statements is provided in the Annual Report. 11. HUMAN RESOURCES The Management envisions trained and motivated employees as the backbone of the Company. Special attention is given to recruit trained and experienced personnel in business development, finance and accounts. The Management strives to retain and improve employee morale. The Company has total staff strength of about 800 employees. The Company has streamlined its manpower strength at the Chennai offices including the corporate head office. As a result of manpower rationalization exercise, the monthly payroll has been optimized. The decision for rationalization of labour has enabled the company to curtail fixed manpower costs. However, the core technical expert team is retained to guide the Company to achieve higher and efficient level of performance. CORPORATE GOVERNANCE The Directors pay special attention to ensure that the guidelines given for the corporate governance are strictly adhered to. All possible steps are taken to adhere to the requirements set out by SEBI Guidelines on Corporate Governance. The Company is also aligning itself to implement global corporate governance practices. This is ensured by taking ethical business decisions and conducting business with a firm commitment to values, while meeting stakeholder's expectations. At CCCL, it is imperative that the company affairs are managed in a fair and transparent manner. This is vital to gain and retain the trust of our stakeholders. A separate report on the Corporate Governance also forms part of the Annual Report. Requisite certificates from the Auditors of your Company regarding compliance of the conditions of the corporate governance as stipulated under Clauses 49 of the Listing Agreement with the Stock Exchanges is also attached to the corporate governance report. With regard to the Business Responsibility Report, the Company is not covered in the top 100 listed entities, based on the market capitalization at BSE & NSE, in terms of SEBI Circular CIR/CFD/DIL/8/2012dated August 13,2012. 12. CORPORATE SOCIAL RESPONSIBILITYCOMMITTEE The Board of Directors has constituted a Corporate Social Responsibility Committee (CSR Committee) in compliance with the provisions under the Companies Act, 2013. The committee comprises of Shri Mr.R.Sarabeswar as the Chairman, Mr.S.Sivaramakrishnan, Shri.Mr.Jayaram Rangan as its other members. The said Committee has been entrusted with the responsibility of formulating and recommending to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, monitoring the implementation of the framework of the CSR Policy and recommending the amount to be spent on CSR activities. Since the company is making losses for the past three years, CSR spend does not apply to the company for the financial year 2014-15. Hence submission of a report on CSR activities does not apply. 13. SEXUAL HARASSMENT POLICY The Company had adopted the sexual harassment policy and subsequently also formed a committee for the same. DEPOSITORY SYSTEM/E-VOTING MECHANISM: The Company has entered into a Tripartite Agreement with both the Depositories viz. National Securities Depository Limited (NSDL) and Central Depository Services (I) Ltd (CSDL) along with Registrars M/s Karvy Computershare Pvt. Ltd. , Chennai for providing electronic connectivity for dematerialization on the Company's shares facilitating the investors to hold the shares in electronic form and trade in those shares. The shares of your Company are being traded now on the Bombay Stock Exchange and National Stock Exchange under compulsory demat form. Further, in accordance with provisions stipulated under Companies Act, 2013, the facility of e-voting is also made available to all shareholders of the Company. The instructions regarding e-voting is enclosed along with this report. All shareholders are also requested to update their email ids with the Company orour RTA M/s. Karvy Computershare Pvt. Ltd. . 14. TRANSFEROFAMOUNTSTOINVESTOREDUCATIONAND PROTECTION FUND Pursuant to the provisions of Section 205A(5) and 205Cof the Companies Act, 1956, relevant amounts which remained unpaid or unclaimed for a period of seven years have been transferred by the Company, from to time to time on due dates, to the Investor Education and Protection Fund. The details of the same are covered under the Corporate Governance Report. 15. AUDITORS STATUTORY AUDITORS M/s. ASA & Associates LLP, Chartered Accountants, Chennai having firm registration number 009571N/N500006, Statutory Auditor hold office up to the conclusion of the 18h AGM and are eligible for re-appointment subject to ratification of members in the each annual general meeting. Further, the company had received letters to the effect that their re-appointment, if made, would be within the prescribed limits under Section 141(3) (g) of the Companies Act, 2013 and that they are not disqualified for such re-appointment. Your Board of Directors recommends their re-appointment as Statutory Auditors to hold office from the conclusion of the 18th AGM till the conclusion of the 19th AGM of the Company. 16. AUDITORS REPORT AND MANAGEMENT'S RESPONSE TO AUDITORS OBSERVATIONS The Auditors do not have any qualification in their report. INTERNAL AUDITOR The Board has appointed Mr. Rengaraj, an employee of the group company as the Internal Auditor of the Company pursuant to Section 138 of Companies Act, 2013 and Rule No. 13 of The Companies (Accounts of Companies) Rules, 2014 forthe financial year 2015-16. Mr. Rengaraj is a qualified Cost Accountant and Company Secretary having expertise in finance and Accounts. The Internal Audit would ensure that strong internal control mechanism is put in place in the Company as per the recommendations and guidance ofAudit Committee. COST AUDITOR The Board of Directors had appointed M/s SS & Associates (Firm Registration No 000513) as the Cost Auditors of the Company to audit the cost accounting records of the Company for the financial year 2015-16. 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 Mr. N. Balachandran, Practising Company Secretary, Chennai to undertake the Secretarial Audit of the Company. The report of the Secretarial Audit Report is annexed herewith as "Annexure B" MANAGEMENT'S RESPONSE TO SECRETARIAL AUDITOR'S OBSERVATIONS 1. The Companies Act.2013 (the Act) and the rules made there under; - There are instances that certain forms, returns, documents and resolutions required to be filed with the Registrar Of Companies is either filed with delay or in some cases it is yet to be filed. • Due to the financial constraints of the Company, some compliance could not be met on time. However the Company has initiated steps to ensure the compliance of the above is complied on time. 2. The Listing Agreements entered into by the Company with National Stock Exchange and Bombay Stock exchange. During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above except there are few instances of delayed filings. • As per the requirements of listing agreement with stock exchanges, the Company has thrived to comply with all the clauses on time. However there are few instances of delayed filings due to various reasons. The Company endeavour's to ensure that the compliance of listing agreement is complied on time. 3. The company is not regular in depositing the statutory dues including Provident Fund (PF), Employees State Insurance ( ESI), Income Tax, Sales Tax/Value Added Tax (VAT), Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues as applicable with the appropriate authorities during the year under audit. • Due to the paucity of cash flows, the Company could not deposit its statutory dues on time. However efforts are being made to bring the statutory dues on line. 17. DIRECTORS: The following changes have occurred in the Board of Directors during the financial year 2014-2015: 17.1 INDUCTIONS/CHANGE IN DESIGNATION On the recommendations of the nomination and remuneration committee, the Board appointed Mrs. Hastha Shivaramakrishnan as Additional Director in the category of Independent Director of the Company effective March 30, 2015. We seek your support in confirming the appointment of Mrs. Hastha Shivaramakrishnan in the ensuing Annual General Meeting. 17.2 DECLARATION BY INDEPENDENT DIRECTORS All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. 17.3 RESIGNATIONS Mr. Ninder Singh Chohan is been relieved from the position of Directorship of the Company with effect from August 4,2014 17.4 RE-APPOINTMENTS In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum & Articles of Association of the Company, At the ensuing 18th Annual General Meeting, Shri. R.Sarbeswar Whole Time Director of the Company is liable to retire by rotation and being eligible offer himself for re-appointment. The Board recommends his re-appointment. The Companies Act, 2013, provides for the appointment of independent directors. Sub section (10) of Section 149 of the Companies Act, 2013 provides that independent directors shall hold office for a term of up to five consecutive years on the board of a company; and shall be eligible for re-appointment on passing a special resolution by the shareholders of the Company. Accordingly all independent directors except for Mrs. Hastha Shivaramakrishnan , who was appointed as additional director on March 30, 2015 were appointed by the shareholders at the General Meeting as required under Section 149(10). Further, according to sub section (11) of Section 149, no independent director shall be eligible for appointment for more than two consecutive terms of five years. Sub section (13) states that the provisions of retirement by rotation as defined in Sub section (6) and (7) of Section 152 of the Act shall not apply to such independent directors. None of the independent directors will retire at the ensuing Annual General Meeting. 17.5 BOARD EVALUATION Pursuant to the provisions of Clause 49 of the Listing Agreement, the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the director being evaluated. The Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. 17.6 TRAINING OF INDEPENDENT DIRECTORS Every new independent director of the Board attends an orientation program. To familiarize the new inductees with the strategy, operations and functions of our Company, the executive directors/senior managerial personnel make presentations to the inductees about the Company's strategy, operations, product and service offerings, markets, organization structure, finance, human resources, technology, quality, facilities and risk management. 17.7 REMUNERATION POLICY The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. All remuneration paid to the Directors, Key Managerial Personnel and senior management personnel are as per the remuneration policy of the Company. 17.8 DIRECTORS'RESPONSIBILITY STATEMENT To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors, make the following statement in terms of Section 134 (3) (c) of the Companies Act, 2013: (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (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 at the end of the financial year and of the profit and loss 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 this 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 on a going concern basis; and (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. (f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 18 CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION Astatement containing the particulars relating to conservation of energy, research and development and technology absorption as required under Section 134 (3) (m) of the Companies Act, 2013 and Rule 8 (3) (A), (3) (B) and 3 (A) (C) of The Companies (Accounts) Rules, 2014 is annexed to this report as "Annexure C" 19 PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDERSECTION186 OF COMPANIES ACT, 2013 Details of Loan, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to financial statements. PARTICULARS OF EMPLOYEES The information required pursuant to Section 197 of the Companies Act 2013 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of the employees of the company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard. 21 DEPOSITS Your Company has not accepted any deposits from the public during the year under review. 22 MEETINGS During the year eight Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013. 24 AUDIT COMMITTEE Currently, the Company has an independent and qualified Audit Committee as per the provisions of Section 177 (8) of the Companies Act, 2013 and Rule 7 of The Companies (Meetings of Board and its Powers) Rules, 2014 and Clause 49 of the Listing Agreement, the following is the current composition of Audit Committee 25 VIGIL MECHANISM/WHISTLE BLOWER POLICY The Company has a vigil mechanism/whistle blower Policy to deal with instance of fraud and mismanagement, if any. The details of the vigil mechanism Policy is explained in the Corporate Governance Report and also posted on the website of the Company. 26 PARTICULARS OF CONTRACTS OR ARRAGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1) OF THE COMPANIES ACT, 2013: 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. The Company is in the process of developing a Related Party Transactions Manual, Standard Operating Procedures for purpose of identification and monitoring of such transactions. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company. Particulars of Contracts or arrangement with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed FormAOC-2, is appended as Annexure "D" to the Board's Report. 27 ENHANCING SHAREHOLDER VALUE Your Company believes that its Members are among its most important stakeholders. Accordingly your company's operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation. Your company is also committed to creating value for its other stakeholders by ensuring its corporate actions positively impact the socio-economic and environmental dimensions and contribute to sustainable growth and development. 28 EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure E". 29 GREEN INITIATIVES During fiscal 2014-15, we started a sustainability initiative with the aim of going green and minimizing our impact on the environment. This year, we are publishing only the statutory disclosures in the print version of the Annual Report. Additional information is available on ourwebsite, www.ccclindia.com Electronic copies of the Annual Report 2014-15 and Notice of the 18th Annual General Meeting are sent to all the members whose email addresses are registered with the Company/Depository Participant(s). For members who have not registered their email addresses, physical copies of the Annual Report 2015 and the Notice of 18th Annual General Meeting are sent in the permitted mode. Members requiring physical copies can send a request to the Company. 30 ACKNOWLEDGEMENT The Board of Directors of the Company wishes to express their deep sense of appreciation and offer their sincere thanks to all the Shareholders of the Company for their unstinted support to the Company. The Board also wishes to express their sincere thanks to all the esteemed Customers for their support to the Company's business. The Board would also like to place on record their deep sense of gratitude to the various Central and State Government Departments, Organizations and Agencies for the continued help and co-operation extended by them. The Directors also gratefully acknowledge and thank all financial institutions and banks for their timely support in restructuring the Company's debt under the CDR mechanism failing which the Company would have succumbed to the recession faced by the Construction Industry. In the end, the Board would like to place on record their deep sense of appreciation to all the executives, officers, employees, staff members, and workers at the various sites. For and on behalf of the Board of Directors R.Sarabeswar Chairman (DIN: 00435318) S.Sivaramakrishnan Managing Director (DIN: 00431791) Place: Chennai Date: August31, 2015 |