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Century Enka Ltd.

BSE: 500280 Sector: Industrials
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OPEN 395.25
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P/E 10.03
Mkt Cap.(Rs cr) 866
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Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 395.25
CLOSE 399.10
52-Week high 454.00
52-Week low 209.55
P/E 10.03
Mkt Cap.(Rs cr) 866
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Century Enka Ltd. (CENTENKA) - Director Report

Company director report


Dear Shareholders

Your Directors present the 50th Annual Report and Audited FinancialStatements of the Company for the year ended 31st March 2016.

Profit after Finance Cost but Before Tax has increased by 42% during the year. This wasdue to overall improvement in all spheres be it plant operations including reduction inenergy cost higher sales quantitative term and lower finance cost.


Rs./ Lacs
This Year Previous Year
Net Sales / Income from Operations
(Less Excise Duty) 114364 121853
Profit before Depreciation Finance
Cost Exceptional Item and Tax 14609 12269
Add / (Less) :
Depreciation (4024) (4275)
Finance Cost (956) (1732)
Exceptional Item (Note - 1) (754) --
Taxation (Net) (2929) (2605)
Net Profit 5946 3657
Add : Balance brought forward from previous year 29179 27470
Profit available for appropriation 35125 31127
Less : Dividend 1639 1311
Tax on Dividend 333 267
General Reserve 600 370
Balance carried forward to next year 32553 29179

Note 1: Value of Continuous Polyester Polymerisation Unit (CPU) write down.


We recommend a dividend at the rate of 75% (i.e. Rs. 7.50 per Equity Share of Rs. 10/-each) for the year ended 31st March 2016 which includes Special Dividend at the rate of15% (i.e. Rs. 1.50 per Equity Share) to commemorate Golden Jubilee Year (Previousyear at the rate of 60% i.e. Rs. 6/- per Equity Share of Rs. 10/- each).


The Management’s Discussion and Analysis Report as required under the Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 is forming a part of this report and gives the state of affairs of the business ofthe Company. The performance of your Company improved in line with the businessengineering work undertaken in the previous year. Few more polyester spinning lines atBharuch site were converted for producing Nylon Filament Yarn. The demand of NylonFilament Yarn has witnessed a good growth due to lower raw material prices. In case ofNylon Tyre Cord Fabric after conversion of two step process machines into one stepprocess machines and enhanced dipping capacity the Company has been able to increase itscustomer base and could sell higher quantity. One of the important factor which improvedthe performance of the Company was savings in energy cost due to access to open powerpurchase at Pune site and generation of power from own DG sets at Bharuch site.


The Company has filed an appeal against the order of Commissioner of Central Excise forthe alleged excise duty demand of Rs. 22927 lacs equal amount of penalty and interest onduty amount before Customs Excise and Service Tax Appellate Tribunal (CESTAT) Mumbaidenying benefit of Notification No. 6/2000 CE dated 01.03.2000 for specific excise duty.The appeal has been admitted and on pre-deposit of Rs. 700 lacs stay granted. Anapplication has been made for early hearing of the appeal and Appellate Authority concededthe request. Your Company has been advised by the legal experts that it has a fair chanceof ultimately succeeding in the matter and accordingly no provision is required to bemade in books of account.


The Company is cautiously watching development in Synthetic Yarn Industry imports fromChina high dependency on raw material imports and single source of domestic supply andwith this background the Company is evaluating various options which could be availableto it for its growth strategy. Until such time it will continue to put its thrust onre-engineering of its existing operations and carry on balancing investment inmodification of existing equipments and some fresh investments in energy conservationschemes.


The report on Management’s Discussion and Analysis includes observations onhealth safety and environment compliances by the Company. All Plant sites of the Companyare environment regulations compliant.


Particulars in respect of conservation of energy technology absorption and foreignexchange earnings and outgo as required under Section 134(3)(m) of the Companies Act2013 read with the Companies (Accounts) Rules 2014 are set out in a separate statementattached hereto and forming part of the report. (Annexure-I).


Your Company reaffirms its commitment to Corporate Governance and is fully compliantwith the conditions of Corporate Governance stipulated in Clause ‘C’ of ScheduleV on Annual Report pursuant to Regulations 34(3) of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015. A separatesection of disclosure on Corporate Governance and a Certificate from the firm ofPractising Company Secretaries dated 4th May 2016 in this regard is annexed herewith andforms a part of the Report.


(including criteria for determining qualification positive attributes independence ofa Director policy relating to remuneration for Directors Key Managerial Personnel andother employees)

Policy on Directors’ Appointment

Policy on Directors’ appointment is to follow the criteria as laid down under theCompanies Act 2013 and the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015. Emphasis is given to persons from diversefields or professions.

Policy on Remuneration

Guiding Policy on remuneration of Directors Key Managerial Personnel and employees ofthe Company is that

• Remuneration to unionised workmen is based on the periodical settlement with theworkmen union.

• Remuneration to Key Managerial Personnel Senior Executives Managers Staff andWorkmen (non Unionised) is industry driven in which it is operating taking into accountthe performance leverage and such factors so as to attract and retain quality talent.

• For Directors it is based on the shareholders resolutions provisions of theCompanies Act 2013 and Rules framed therein circulars and guidelines issued by CentralGovernment and other authorities from time to time.


The Board of Directors of the Company has initiated and put in place evaluation of itsown performance its committees and individual directors. The results of the evaluationare satisfactory and adequate and meets the requirement of the Company.


Pursuant to Section 149(7) of the Companies Act 2013 Independent Directors of theCompany have made a declaration confirming the compliance of the conditions of theindependence stipulated in Section 149(6) of the Act.


Pursuant to the requirements of Section 134(1)(c) of the Companies Act 2013 and on thebasis of explanation and Company compliance certificate and subject to disclosures in theAnnual Accounts and also on the basis of discussions with the Statutory Auditors of theCompany from time to time we state as under :

a) that in the preparation of the annual accounts the applicable accounting standardshad been followed alongwith proper explanation relating to material departure;

b) that the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of Company for that period;

c) that the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

d) that the directors had prepared the annual accounts on a going concern basis;

e) that the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

f) that the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.


In accordance with Articles of Association of the Company Mr. B.K. Birla Director ofthe Company will retire by rotation and being eligible offers himself for re-appointment.Mr. G.M. Singhvi Whole-time Director of your Company whose tenure of 3 (three) yearscomes to an end on 15th May 2016 has been re-appointed by the Board ofDirectors in its meeting held on 2nd February 2016 for a period of 1 (one)year commencing from 16th May 2016 subject to approval of the shareholders ofthe Company at the forthcoming Annual General Meeting.


The Board of Directors have met five times and Independent Directors once during theyear ended 31st March 2016.


Composition of Audit Committee of Directors Nomination and Remuneration Committee ofDirectors and Stakeholders Relationship/Grievance Committee of Directors number ofmeetings held of each Committee during the financial year 2015-16 and meetings attended byeach member of the Committee as required under the Companies Act 2013 are provided inCorporate Governance Report and forming part of the report.

The recommendations of the Audit Committee as and when made to the Board has beenaccepted by it.


Mr. G.M. Singhvi the Whole-time Director of the Company has been re-appointed w.e.f.16th May 2016 subject to approval of the shareholders.

The other Key Managerial Personnel of the Company are Mr. S. Thapliyal President ofthe Company Mr. D.B. Roonghta Chief Financial Officer and Mr. C.B. Gagrani CompanySecretary.


There is no transaction with Related Party which requires disclosure under Section134(3)(h) of the Companies Act 2013 and Rule 8(2) of the Companies (Accounts) Rules2014.


There is no loan given investment made guarantee given or security provided by theCompany to any entity under Section 186 of the Companies Act 2013.


The Company is having in place Internal Financial Controls System. The InternalFinancial Controls with reference to the financial statements were adequate and operatingeffectively.


Your Company has not accepted any fixed deposits from the public during the financialyear ended 31st March 2016.


Your Company has developed and implemented a Risk Management Policy includingidentification of element of risk and the risk that may threaten the existence of theCompany. The Company has constituted a Risk Management Committee of Senior Executives toevaluate the risk and mitigation plan and monitor them. The Risk Management Committeeevaluated various risks and mitigation plans and monitored them. There is no element ofrisk identified by the Management that may in the opinion of the Board threaten theexistence of the Company. is given A detailed report on significant under the head RiskManagement in Management Discussions and Analysis.


Your Company has put in place Whistle Blower Mechanism. The detailed mechanism is givenin Corporate Governance Report forming part of this report.


Information on Corporate Social Responsibility (CSR) Policy and initiative taken by theCompany during the financial year 2015-16 pursuant to Section 135 of the Companies Act2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules2014 is annexed herewith and forming part of the report. (Annexure-II).


Pursuant to Rule 5 of the Companies (Appointment and Remuneration) Rules 2014 adisclosure on remuneration related information of employees Key Managerial Personnel andDirectors is annexed herewith and forming part of the report. (Annexure-III).


The tenure of M/s.Price Waterhouse the Statutory Auditors of the Company appointed in49th Annual General Meeting of the Company will come to an end on theconclusion of 50th Annual General Meeting of the Company.

Indian Accounting Standard (Ind AS) has become effective from 1st April 2016 andkeeping in view the changing profile of your Company's business with decline in PolyesterTextile Yarn business and considering all aspect of the matter your Board has decided torecommend the appointment of M/s. Khimji Kunverji & Co. as Statutory Auditors of theCompany under Section 139 of the Companies Act 2013. The Board placed on record itsappreciation of the services of the retiring Auditors M/s. Price Waterhouse who have beenAuditors of the Company right from the inception.


A Secretarial Audit Report for the year ended 31st March 2016 in prescribedform duly audited by the Practising Company Secretary M/s. Sanjay Sangani & Co. isannexed herewith and forming part of the report.


Pursuant to the provisions of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the names and other particulars of employees are set out in aseparate statement attached herewith and forming part of the report. (Annexure-IV).


Pursuant to Section 134(3)(a) of the Companies Act 2013 read with Rule 12(1) of theCompanies (Management and Administration) Rules 2014 the extract of annual return isannexed herewith and forming part of the report. (Annexure-V).

For and on behalf of the Board of Directors
Place : Mumbai G.M. SINGHVI
Date : May 04 2016 Directors


Information on Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo pursuant to Section 134(3)(m) of the Companies Act 2013 read with Rule8 of the Companies (Accounts) Rules 2014


The Company is engaged in the continuous process of energy conservation throughimproved operational and maintenance practices: i. Steps taken or impact onconservation of energy

Steps taken Impact (Annualised Savings)
Electricity KWh/ Lacs
a. Installation of energy efficient compressor. 17.50
b. Replacement of conventional lights with LED lights 3.29
c. Power optimization of HTM heater 2.60
d. Installation of Fan less cooling tower for compressed air system. 2.52
e. Installation of heat pump in DG jacket water preheating. 1.88
f. Pumping power optimization in cooling tower 1.12
g. Optimisation of compressed air pressure in lactam melter 1.05
h. Conversion of Industrial Yarn Spinning machine from two step to one step process 12.50
i. Conversion of electrical heating to thermic fluid heating of Dow system 4.90

ii. Steps taken for Utilisation of alternate sources of energy

a. Conversion of electrical heating to thermic fluid heating for Dowtherm system.

b. Installation of heat pumps for water preheating system.

iii. Capital investments on energy conservation equipments during 2015-16: Rs. 280 Lacs(previous year Rs. 313 Lacs)


i Efforts made towards technology absorption:

1. in air conditioning system to improve process conditions.

2. in existing machines for high value and new products developments including processsimplification.

3. in Industrial Yarn Spinning machine for process improvement from two step to onestep.

4. Installation of PLC based control system for Boiler.

5. Upgradation of switch yard transformer for auto operation.

6. Upgradation of control system of after-treatment machines.

ii Benefits derived as a result of the above efforts :

1. New product developments

2. Improvement in quality

3. Cost reduction

4. Improvement in operating performance

iii Information regarding imported technology

[Imported during the last 3 years (from the beginning of the financial year)]

1. Technology Imported : NIL
2. Year of Import : Not applicable
3. Has the technology been fully absorbed : Not applicable

iv Expenditure on Research & Development

( Rs./ Lacs)
Particulars 2015-16 2014-15
1. Capital See Note Below
2. Recurring 161 221
3. Total 161 221
4. Total R & D expenditure as a Percentage of total revenue from Operation (Net) 0.14% 0.18%

Note: The Company has spent Rs. 324 Lacs (Previous year Rs. 253 Lacs) and shown asnormal Capital Expenditure although it is also used for R&D activities.


Total foreign exchange used and earned is contained in Note 42(c)(d)(e) and (f) tothe financial statement.


Annexure - II

Statement containing information as per Section 135 read with the Rule 8 of theCompanies (Corporate Social Responsibility) Rules 2014 and forming part ofDirectors’ Report for the year ended 31st March 2016.

1. The Company’s Corporate social Responsibility policy is multifaceted to coverprojects and programmes in the field of education healthcare rural infrastructure anddevelopment sanitation and environment. The Company’s CSR projects and programmesare carried out within the CSR policy framework. The core focus area of the Companyremains on supporting educational facilities more specifically for skill development(vocational training). The Company continued to support the establishment of a Governmentrecognised Industrial Training Institute (ITI) near its Bharuch site in Gujarat. InMaharashtra support was provided for development of school infrastructure in Thanedistrict. Under healthcare the Company carried out camps for blood donation eye checkup& cataract operations dental checkup & primary treatment for tribal children nearits Bharuch site. Rural community welfare projects such as street lighting building roads& pathways descaling of ponds and water bodies etc were carried out in the villagesnear the Company’s Bharuch site.

The company’s CSR policy is

2. Composition of CSR Committee:

Mr . B.S. Mehta (Independent Director and Chairman) Mr . S.K. Jain (IndependentDirector) and Mr . G.M. Singhvi (Whole-time Director).

3. The Average Net Profit of the Company for last three financial years is Rs. 6587Lacs.

4. Prescribed CSR Expenditure for the financial year 2015 16 is Rs. 131.74 Lacs(Previous Year Rs. 90.92 Lacs) (Being (CSR)two percent of the amount as in item 3 above)

5. Details of CSR spent during the year

( Rs./ Lacs)
Financial Year
Particulars 2015 – 16 2014 – 15 Cumulative
i. Total amount to be spent for the financial year 131.74 90.92 222.66
ii. Amount Spent 131.14 94.37 225.51
iii. Amount (Unspent)/ Overspent if any (0.60) 3.45 2.85
iv. Manner in which the amount is spent during the Financial Year is detailed in statement herein below.

6. Reasons for shortfall in prescribed CSR expenditure: On account of necessaryapproval not being received the educational institutions from the concerned authorities.

7. The CSR committee confirms that the implementation monitoring of the CSR policy isin compliance with the CSR objectives and policy of the Company.

G.M. Singhvi B.S.Mehta
(Whole-time Director) (Chairman CSR Committee)
Place: Mumbai
Date: May 04 2016

Annexure - III


Details pertaining to remuneration as required under Section 197(12) of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 for the year ended 31st March 2016

i. The percentage increase in remuneration of each Director President Chief FinancialOfficer the financial year 2015-16 ratio of the remuneration of each Director to themedian remuneration of the employees of the Company for the financial year 2015-16 and thecomparison of remuneration of each Key Managerial Personnel (KMP) against the performanceof the Company are as under:

2015-16 ( Rs./ Lacs) 2014-15( Rs./ Lacs)
S.No Name of Director / KMP Designation Remuneration* of Director / KMP for the Financial Year % Increase in Remuneration in the Financial Year Ratio of Remuneration of each Director to Median Remuneration of Employees Remuneration* of Director / KMP for the Financial Year % Increase in Remuneration in the Financial Year Ratio of Remuneration of each Director to Median Remuneration of Employees
1 Mr. B.K. Birla Chairman 5.45 2.83 1.44 5.30 (1.85) 1.46
2 Mrs. Rajashree Birla Vice Chairman 4.99 ** 1.32 - - -
3 Mrs. Saraladevi Birla Director - - - 4.78 ** 1.31
4 Mr. B.S. Mehta Independent Director 11.55 2.39 3.05 11.28 87.92 3.10
5 Mr. S.K. Jain Independent Director 6.40 3.23 1.69 6.20 6.90 1.70
6 Mr. K.S. Thar Independent Director 6.45 ** 1.70 2.19 ** 0.60
7 Mr. R.A. Shah Independent Director - - - 3.50 ** 0.96
8 Mr. G.M. Singhvi Whole time Director 191.58 14.94 50.55 166.68 23.19 45.79
9 Mr. S. Thapliyal President 101.27 17.32 NA 86.32 34.58 NA
10 Mr. D.B. Roonghta Chief Financial Officer 70.05 22.72 NA 57.08 42.26 NA
11 Mr. C.B. Gagrani Company Secretary 36.96 18.39 NA 31.22 36.56 NA

* Directors Remuneration is including sitting fees

** Details not given as these directors were on the Board only for the part of thefinancial

ii. The median remuneration of employees of the during the financial year was Rs. 3.79Lacs (Previous Year Rs. 3.64 Lacs)

iii. During the financial year there was an increase of 4.00% in the medianremuneration of employees (Previous Year 21.90%)

iv. Number of permanent employees on the rolls of the Company as on 31st March 2016was 1500 Nos. and as on 31st March 2015 was 1496 Nos.

v. Relationship between average increase in remuneration and Company performance:- (SeeNote vi (a) (b) & (c)) During the financial year the Profit before InterestDepreciation Exceptional items and Tax increased by 19.07% whereas the increase in medianremuneration was 4.00%. In the previous year the Profit before Interest DepreciationExceptional Item and Tax was decreased by 35.30% whereas the increase in medianremuneration was 21.90%.

The average increase in median remuneration was with remuneration policy of theCompany.

vi. Comparison of Remuneration of the Key Managerial Personnel against the performanceof the Company: (See Note (a) (b) & (c))

In the current financial year the total remuneration Key Managerial Personnelincreased by 17.16% from Rs. 341.31 lacs to Rs. 399.86 lacs whereas the Profitafter Tax increased by 62.59% from Rs. 3657 lacs to Rs. 5946 lacs. In the previousfinancial year the total remuneration of Key Managerial Personnel increased by 30.06%from Rs. 262.42 lacs to Rs. 341.31 lacs whereas the Profit after Tax decreased by41.89% from Rs. 6293 lacs to Rs. 3657 lacs.

(a) Remuneration to employees and directors of the Company is in line with remunerationpolicy of the Company as per competitive market scenario and sustainability in the mediumto long run.

(b) There is no direct relationship between the remuneration and average increase inthe remuneration of employees and Key Managerial Personnel with year to year financialperformance of in line the Company.

(c) For computing average increase in only employees who have worked for the completeFinancial Year 2014-15 and 2015-16 have been considered to make the figures comparable.

vii. (a) Variations in the market capitalisation of the Company: The marketcapitalisation as on 31st March 2016 was Rs. 38002.35 lacs vis-a-vis Rs. 33087.25 lacsas on 31st March 2015. In the previous financial year market capitalisationas on 31st March 2015 was Rs. 33087.25 lacs vis-a-vis Rs. 30916.39 lacs as on31st March 2014.

(b) Price Earnings Ratio of the Company was 6.39 as at 31st March 2016 andwas 9.04 as at 31st March 2015.

(c) Percentage increase over decrease in the market quotations of the shares of theCompany in comparison to the rate at which the Company came out with last public offer (inthe year 1967 at par) as on 31st March 2016 : 1639.20% and 1414.30% as on 31stMarch 2015.

viii A verage percentage increase made in the salaries of employees other than themanagerial personnel in the financial year 2015-16 and 2014-15 was 11.66% and 19.52%respectively and the increase in the managerial remuneration for the financial year2015-16 and 2014-15 was 14.94% and 23.19% respectively.

ix. There are no variable component of remuneration to the directors during thefinancial year 2015-16 and 2014-15.

x. The ratio of the remuneration of the highest paid to that of the employees who arenot directors but receive remuneration in excess of the highest paid director during theyear: None of the employees has remuneration more than the highest paid director duringthe financial year 2015-16 and 2014-15.

xi. It is hereby affirmed that the remuneration paid is as per the RemunerationPhilosophy / Policy of the Company.

Annexure - IV


Statement containing information as per Section 197(12) read with the Rules 5(2) and5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014and forming part of Directors' Report for the year ended 31st March 2016.

Name Designation Remuneration Received (` ) Nature of Employment QualificationExperience(Years) Date of Commencement of Employment Age(Years) Last Employment heldEquity Share held in the Company (Percentage)

(a) Employed throughout the financial year and was in receipt of remuneration for theyear in aggregate of not less than Rs. 6000000.

1. G. M. Singhvi Whole-time Director Rs. 19158107 Contractual B. Com. LL.B.F.C.A. 50 11.09.1997 74 Practicing Management Service NIL.

2. Sanjay Thapliyal President Rs. 10126968 Non-Contractual B. Tech (Textile) 2916.02.2006 52 Pioneer Embroideries Limited NIL.

3. D. B. Roonghta Chief Financial Officer Rs. 7004817 Non-Contractual B. Com. C.A. 28 01.05.1989 51 Nandi Palace NIL (Number of Equity Shares held 4).

4. Atul Bhadri Executive President-Commercial Rs. 6216581 Non-Contractual B.Sc.36 02.06.2007 57 NRC Ltd. NIL .

(b) Employed for a part of the financial year and was in receipt of remuneration at arate in aggregate not less than Rs. 500000 per month.


(c) Employed throughout the financial year or part thereof was in receipt ofremuneration in the year which in the aggregate or at a rate which in the aggregate wasin excess of that drawn by the Whole time Director and holds by himself or along with hisspouse and dependent children not less than 2% of the equity shares of the Company.



1. Remuneration includes salaries house rent allowance personal allowance ex-gratiaperformance allowance leave travel assistance encashment of leave medical expenses /allowances accident insurance premium Company's Contribution to Provident &Superannuation Funds and the monetary value of perquisites calculated in accordance withthe provisions of the Income-tax Act1961 and the Rules made there under and excludesprovision for retiring gratuity for which separate figure not available.

2. The above employees are not relative of any Director of the Company.

For and on behalf of the Board of Directors
Place : Mumbai G.M. SINGHVI
Date : May 04 2016 Directors