CCL International Ltd Management Discussions.

Readers are cautioned that this Discussion and Analysis contains forward-looking statements that involve risks and uncertainties. When used in this discussion, the words "anticipate", believe", "estimate", intend, "will", and "expected" and other similar expressions as they relate to the Company or its business are intended to identify such forward looking statements. The Company undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of performances or achievements and risks and opportunities could differ materially from those expressed or implied in such forward looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their date.

The following discussion and analysis should be read in conjunction with the Companys financial statements included and notes thereto.

Industry Structure & Future Outlook

India being a fastest growing economy in the world. Infrastructure sector is a key driver for the Indian economy. The sector is highly responsible for propelling Indias overall development and enjoys intense focus from Government for initiating policies that would ensure time-bound creation of world class infrastructure in the country. Infrastructure sector includes power, bridges, dams, roads and urban infrastructure development. In 2018, India ranked 44th out of 167 countries in World Banks Logistics Performance Index (LPI) 2018.

Infrastructure continues to be the key focal point of the incoming NDAgovernment, in its second term & thus, several infrastructure reforms are expected to come in over the next 5 years. The last term of the NDA government was characterized by massive allocation of funds to the infrastructure sector, year after year, in the Union Budgets. FY20 is expected to continue on that trajectory, especially as the BJPs manifesto promised to invest 7100 trillion in infrastructure across the next five years. Accordingly to the Ministry of Infrastructure & Transport, India is expected to become the third largest construction market globally by 2022, driven by an investment requirement of over US$ 700 Billion, to have sustainable development in the country. The government is aiming to create several new smart cities in India, improve connectivity across the country especially to border roads & rural towns as well as invest in technology to create world-class infrastructure in the urban pockets of the country.

As the infrastructure sector is a key driver for the Indian economy, increasing impetus to develop infrastructure in the country is attracting major global player. The country is witnessing significant interest from institutional investors in the infrastructure sector. India has the largest road network globally and carries almost 90% of the countrys passenger traffic. To increase private sector participation in the road sector, the government has laid down comprehensive policy guidelines for private sector participation. Over the years, the speed of road construction had become the benchmark for a countrys infrastructure creation. The new integrated infrastructure programme which involves building of roads, railways, water ways and airports will play a pivot role in leveraging cost and facilitate in achieving the growth of infrastructure sector. Some of the key developments/incentives taken by the government in road sectors are:

i. The Government has allocated Rs. 1.12 trillion under Ministry of Roads & Highways

ii. PM Gram Sadak Yogna (PMGSY) is the scheme for the development of rural roads. The government has allocated Rs. 19,000 crores under PMGSY

iii. The government is taking major steps in upgrading highways and expressways.

iv. The government has set up the India Infrastructure Finance Co. to provide long term funding for infrastructure projects

v. Government is encouraging the development of this sector by providing subsidies, tax exemptions and duty free imports of high- capacity road construction equipment..


CCL International Limited (CCL) with its strong and timely executional capabilities, over the last five year, leveraged its experience and established its market position in civil construction projects. With Large fleet of sophisticated construction equipments, CCLs has an ability to execute with quality, technically complex and high value road construction projects. In recent years the Company has executed and commenced a number of prestigious and praiseworthy projects in the states of Meghalaya, Assam, Mizoram, Haryana and Uttarakhand. Immense opportunities are available to Company in its core competence area of civil engineering projects particularly in the roads and highways sectors.


During the year under review, the company bagged number of new projects in vertical it operates its Business activity regardless of uncertainties and challenges arising in the market conditions; the company has successfully demonstrated strong value addition in the infrastructure sector. In the year under review, the company has not only accomplished the ongoing projects in an efficient manner but has also acquired various new and innovative projects in the field of Infrastructure Segment. Your Company as a group offers the vast spectrum of infrastructure services in the areas of Construction of bridges, Construction of roads, and Construction of highways. During the year under review, the Company stepped in contracts with various other organizations like Border Road Organization, Government of Assam, PWD Department Government of Meghalaya which would surely enhance the growth, goodwill and public reputation of your company and would prove out to be more profitable in the coming months.


The Company during the period under review mainly concentrated on the Infrastructure business. As a result of which, a substantial portion of companys revenues are derived from infrastructure projects, these projects provide opportunities for large revenue and profit contributions. The performance of the Company in the current financial year is satisfactory considering the challenges faced by the construction industry.



a. Equity Share Capital: During the current year no change in share capital.

b. Other Equity: the Other Equity of the company has gone up from Rs. Rs. 2228.47 Lakh to Rs. 2413.87 in 2018-19.

c. Networth: The Companys net worth increased from Rs. 4147.73 lakh to Rs. 4333.13 lakh.


a. Property, Plant & Equipment (PPE): The Companys PPE increased by Rs. 170.68 Lakh in 2018-19 from Rs. 2275.14 Lakh to Rs. 2445.82 Lakh.

b. Non-Current Investments: The investments increased by Rs. 39. 28 Lakh from Rs. 326. 94 to Rs. 366.22 Lakh during theyear2018-19.

c. Inventories: Inventories comprises Work- inprogress. In the current year, the Work- in-progress has been shown separately under other current assets. The Inventories is decreased from Rs. 935.15 Lakh to Rs. 852.83 Lakh.

d. Trade Receivables: The Companys trade receivables increased by Rs. 390.87 Lakh in 2018-19 from Rs. 719.86 Lakh to Rs. 1110.74 Lakh.


a. Revenue from Operations: The Company has reported a Revenue from Operations of Rs. 3710.88 Lakh during the year2018-19 as against Rs. 3321.87 Lakh in the previous year, resulting a growth of 11.71%.

b. Other Income: The other income of the company for the year Rs. 123.11 Lakh as against Rs. 78.20 Lakh of last year. Other income comprises of Interest on bank deposits, interest on income tax refund and miscellaneous income.

c. Finance cost: The Finance cost is Rs. 153.21 Lakh for the year under review as against Rs. 154.91 Lakh in the previous year.

d. Depreciation: The Companys depreciation for the year has increased from Rs. 182.22 Lakh to Rs. 229.77 Lakh

e. EBIDTA: The Company has reported an EBIDTA of Rs. 605.25 Lakh against Rs. 356.98 Lakh in the previous year. The increase primarily on account of steep increase in Turnover.


Key financial ratios are given below:

Year Ended

Particulars 2018-19 2017-18
Debtors Turnover 28.97 21.17
Inventory Turnover 22.24 27.50
Interest Coverage Ratio 2.45 1.13
Current Ratio 1.93 2.06
Debt Equity Ratio 0.48 0.31
Net Profit Margin (%) 5.24% 0.25%


Your Company presently maintains conservative financial profile so as to build its future based on


The Company is exposed to certain financial risks, principally interest rate risk, construction risk and risks associated with competition among others. Your Company recognizes the need to control and limit risk, which it faces in day to day course of the business. These risks are managed through risk management policies that are designed to minimize the potential adverse effects of these risks on financial performance of the Company. The following section discusses some of these risks and steps taken by CCL to mitigate such risks.

• Competition Risk - With increased project awarding by the government, the road and construction industry is expected to attract several domestic as well as international players. This increase in competition may lead to an aggressive bidding environment, resulting in price cut and low operating margins as well as lower market share of project awards. Risk Mitigation - With five years of industry experience and led by a proven management team, who have honed their project managing skills right from the drawing board to the final execution, the Company is confident of meeting present and future competition and enjoy continued growth. To further mitigate this risk, where considered prudent, the Company forms strategic partnerships and joint ventures with quality players. This facilitates synergies both in the financial and technical and enables it to compete with the larger players.

• Slow-down in Road Sector - Any slowdown on part of the government to award road projects could adversely affect growth prospects. Risk Mitigation - The present government has taken focused steps to ensure that infrastructure creation moves at an accelerated pace, thus reducing the possibility of this risk to a considerable extent. Moreover, the Company already has sufficient order backlog to ensure growth momentum in the medium term.

• Construction Risk - Infrastructure projects involve complex design and engineering, significant procurement of equipment and supplies and extensive construction management and other activities conducted over extended time periods, sometimes in remote locations. This could lead to cost-time overruns, thereby impacting profitability. Risk Mitigation - CCL with its vast experience of project management, balanced capital structuring and efficient cost control measures is well geared to mitigate this risk.

• Input Risks - The availability of the right quality and quantity of resources (raw material and finances) is critical for the timely completion of infrastructure projects. Besides, cost escalation could affect profitability Risk Mitigation - The Company controls its projects directly - as opposed to subcontracting core infrastructure assignments - enabling it to ascertain when material would be required in what quantity and where. It procures key raw materials (steel and cement) directly from leading manufacturers for a more timely access. Moreover, most of the Companys contracts are protected with input escalation clauses, which protect profitability Manpower risk - Since people represent the most valuable asset in the business, any attrition could lead to a valuable loss of competitive edge. Recruitment and retention of specialized professionals is an industry wide problem. Risk Mitigation - The Company maintains a cordial and informal working environment. It delegates authority at all levels through a defined system of the scope of work, responsibility and reporting structure which results in leaders being grown at every tier. It remunerates employees according to the prevailing industry standards and conducts in- depth training - functional and attitudinal, leading to a low attrition rate.


The Company continued with efforts to ensure that its pool of human resources is "future ready" through its robust processes of learning & development, capability building and its development programmes. Efforts were taken to develop leadership lines as well as to enhance technical and functional capabilities with special focus on nurturing young talent, in order to face future challenges. It will ensure that the development initiatives result not just in better skills but in enhanced performance and higher engagement. The top management conducted several discussions with their employees to discuss multiple issues towards discussing leadership qualities, values, responsibilities, freedom to work and take decisions. Going ahead, the Company will continue to invest in its people to strengthen its delivery model.

Your Company maintains its focus on its Human Resources. It believes that peoples contribution is the main engine for growth. We deliver on the strength of our people and in a dynamic business environment. Company policy entrails looking for qualified, talented and enthusiastic individuals and building up of a rich human resource base. Our HR team focuses on employee training, inculcation of values and enhancing functional expertise.

Manpower is biggest strength in construction sector. The key HR objective is to ensure that our employees are aware of the role they are expected to play in the organization to be able to drive organizational momentum.

All employees are working in harmonious and teamwork atmosphere which are at all-time high. The Company has a team driven work process with completely flat organization structure. This not only helps us nurture leaders but also give us capable and assured colleagues at all levels.


The Company has a proper and adequate system of internal controls. This ensures that all transactions are authorized , recorded and reported correctly, and assets are safeguarded and protected against loss from unauthorized use or disposition. In addition there are operational controls and fraud risk controls, covering the entire spectrum of internal financial controls. Management reviews and supplements the process of internal financial control framework. The internal financial control framework has been designed to ensure that the financial and other records are reliable for preparing financial and other statements and for maintaining accountability of assets. In addition, the Company has identified and documented the risks and controls for each process that has a relationship to the financial operations and reporting


Your Company is continuously striving to create value in all spheres of its activities. This encompasses not only value for its customers but also for its stakeholders. The Company has adopted Accounting Standards incorporating best practices and have moved towards transparency in its reporting .We will continuously endeavor to provide insight on the operation of the Company to aid all stakeholders.

The Board would like to place on record its deep sense of appreciation for the continued confidence reposed in the company by the shareholders as well as the sincere efforts put in by the executives and staff at all levels for progress of the company.


Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be "forward looking statements" within the meaning of applicable laws or regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include, among others, economic conditions affecting demand/supply and price conditions, variation in prices of raw materials, changes in government regulations, tax regimes, economic developments and other incidental factors.

By Order of the Board of Director
Place: Delhi (Rama Gupta) Chairman
Dated: 30.08.2019 [DIN 00080613]