We have pleasure in presenting the 120th Annual Report of the Company alongwith the audited statement of accounts for the year ended 31st March 2017. Thefinancial results for the year are shown below. The working and operational parameters ofall the plants of the Company were quite satisfactory during the year. The overallprofitability for the accounting year 2016-17 has improved as compared to the last yearafter charging all expenses interest etc. Labour relations at all the plants are cordialand an atmosphere of mutual trust and confidence prevails.
1. SUMMARISED FINANCIAL RESULTS AS PER IND-AS:
| ||2016-17 ||2015-16 |
|Earnings before finance cost tax depreciation and amortisation ||976.56 ||728.21 |
|(EBITDA) || || |
|Less: || || |
|Finance Cost ||550.75 ||587.65 |
|Profit after Finance Cost ||425.81 ||140.56 |
|Less: || || |
|Depreciation ||314.11 ||283.09 |
|Profit / (Loss) before tax ||111.70 ||(142.53) |
|Less: || || |
|(Excess) / Short Provision for tax adjustments in respect of earlier years (Net) ||- ||(0.76) |
|Deferred Tax Debit / (Credit) ||6.71 ||(46.77) |
| ||6.71 ||(47.53) |
|Net Profit / (Loss) ||104.99 ||(95.00) |
|Retained Earnings || || |
|Balance brought forward ||74.14 ||155.60 |
|Profit for the year ||104.99 ||(95.00) |
|Other Comprehensive Income ||6.11 ||0.05 |
| ||185.24 ||60.65 |
|Available Profit & (transfers) dealt as under: || || |
|Transfer to/(from) General Reserve ||- ||(80.69) |
|Equity Dividend paid ||61.43 ||55.83 |
|Tax on equity dividend ||12.52 ||11.37 |
|Transfer from Debenture Redemption Reserve ||(17.89) ||- |
|Balance carried forward ||129.18 ||74.14 |
| ||185.24 ||60.65 |
The performance of each business segment of the Company has been comprehensivelydiscussed in the Management Discussion and Analysis Report (forming part of thisDirectors' Report) based on the reports of the Senior President/CEO of each of the unitsof the Company.
The Board of Directors has recommended a dividend of 55% i.e. ' 5.50 (Rupees five andpaise fifty) per share of the face value of ' 10/- each for the approval of theshareholders. Last year the dividend was paid at the same rate. This dividend will be paidwhen declared by the shareholders in accordance with law and will be free of tax in thehands of the shareholders. The Company will have to pay dividend distribution tax plusapplicable surcharge education cess and/or any other cess applicable on the dividenddistribution tax at the time of declaration and payment of dividend.
3. SHARE CAPITAL:
There is no change in the Share Capital of the Company during the year under review.
The total exports of the Company amounted to ' 454 crores (Previous year ' 504crores) representing about 5 percent of the gross sales.
5. EXPANSION & MODERNISATION:
a) Rayon Tyre Cord & Chemicals
Installation of 9 PSY machines for production of more Super Fine Deniers andprocess debottlenecking for increasing production.
Installation and commissioning of Air Texturising Yarn facility.
Modernisation of Water Treatment Plant to comply with the new regulations ofMPCB for water discharge.
Modernisation & Technological upgradation programmes continue at all the units ofthe Company to maintain competitiveness and achieve better quality. Stringent costcontrol measures remain in place in all possible areas and are regularly reviewed. Specialemphasis is being given to water and energy conservation.
(a) Pursuant to the provisions of Section 152 of the Companies Act 2013 Smt.Rajashree Birla (DIN 00022995) retires by rotation as Director at the ensuing AnnualGeneral Meeting and being eligible offers herself for the re-appointment. The Boardrecommends her re-appointment.
(b) Board Evaluation
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations the Board has carried out an annual performanceevaluation of its own performance of the Directors individually as well as theevaluation of the working of its Audit Nomination & Remuneration and other Committeesof the Board.
At the meeting of the Board all the relevant factors that are material for evaluatingthe performance of individual Directors the Board and its various Committees werediscussed in detail. A structured questionnaire each in line with circular issued by SEBIfor evaluation of the Board its various Committees and individual Directors was preparedand recommended to the Board by the Nomination & Remuneration Committee for doing therequired evaluation after taking into consideration the inputs received from theDirectors covering various aspects of the Board's functioning such as adequacy of thecomposition of the Board and its Committees execution and performance of specific dutiesobligations and governance etc.
A separate exercise was carried out to evaluate the performance of individualDirectors including the Chairman of the Board who were evaluated on parameters such aslevel of engagement and contribution independence of judgment safeguarding the interestof the Company and its minority Shareholders etc. The performance evaluation of theindependent Directors was carried out by the entire Board excluding the Director beingevaluated. The performance evaluation of the Chairman and non-independent Directors wasalso carried out by the Independent Directors at their separate meeting. The Directorsexpressed their satisfaction with the evaluation process.
During the year five Board meetings were convened and held. The details thereof aregiven in the Corporate Governance Report. The intervening gap between the Meetings waswithin the period prescribed under the Companies Act 2013.
7. AWARDS CERTIFICATES PRIZES:
Various Divisions of the Company have received notable awards / certificates asmentioned below:-
Birla Century is the first integrated fabric manufacturing unit in India whichcleared Sustainable Textile Production (STeP) certification with highest rating fromHohenstein (Germany).
Birla Century also qualified as the first unit in textile sector for Made InGreen (MIG) Tag from Hohenstein (Germany).
The above denotes that the products manufactured by the plant are Eco-friendly andunder Green & sustainable environment.
(b) Rayon Tyre Cord & Chemicals:
CII Certificate for Excellence in energy Management 2016 received for being the"Energy Efficient Unit" in the competition held at Hyderabad.
2 Gold (1st Place) and 2 Silver (2nd Place) were achievedby 4 quality circles who participated at QCFI's Chapter and National Convention 2016.
3 "Sujhav Ratan" Awards from INSSAN (Indian National SuggestionSchemes' Association) were received at the 18th Creativity Summit held at NewDelhi in August 2016.
Oeko Tex Certificate received for upgradation from Product Class II to Class I(suitable even for Baby Skin).
The ISO 9001 has been updated to 2015 version for Manufacture & Supply ofIndustrial Chemicals by TUV Nord. ISO 9001: 2008 exists for the manufacture of viscosefilament yarn.
(c) Century Cement:
First Prize for "Overall Performance" and "Storage Transport& Use of Explosive" for the limestone mines during Annual Safety Celebrations -2016 held under the aegis of Directorate General of Mines Safety Bilaspur and RaigarhRegion.
First Prize for "Reclamation & Rehabilitation" for its limestonemines in the category of mechanized mines Chhattisgarh during the Mines Environment andMineral Conservation Week Raipur Region 2016-17 from the Indian Bureau of Mines Raipur.
(d) Maihar Cement:
First Prize for the "Overall Performance" and "Systematic andScientific Development" for its limestone mines in the category of mechanized minesduring the 26th Mines Environment and Mineral Conservation Week 2016-17 fromthe Indian Bureau of Mines Jabalpur region.
(e) Manikgarh Cement:
First Prize for the "Overall Performance" for its limestone mines inthe category of highly mechanized mines during the Mines Environment and MineralConservation Week 2016-2017 held under the aegis of Controller General Indian Bureau ofMines Nagpur.
(f) Century Pulp & Paper (CPP):
During the year Century Pulp & Paper Lalkuan participated in 100thand 101st "Agro-industrial Exhibition - 2016 and 2017" organised byand held at G B Pant University of Agriculture & Technology Pant Nagar and CenturyPulp & Paper has been adjudged First position.
During last eleven consecutive such exhibitions ten times Century Pulp & Paper hasstood First.
SRBC & Co. LLP Chartered Accountants (ICAI Firm Registration No. 324982E/E300003)who are Statutory Auditors of the Company were appointed as the Statutory Auditors for aterm of 5 years at the last Annual General Meeting of the Company. They have confirmedtheir eligibility under Section 141 of the Act and the Rules framed thereunder for theirappointment as Auditors of the Company. The Board recommends to the Shareholdersratification for their term of appointment as mentioned above at the ensuing AnnualGeneral Meeting of the Company. Such ratification will be obtained every year during theirterm of appointment.
9. AUDITORS' REPORT:
The Auditors' Report to the Shareholders does not contain any reservationqualification or adverse remark.
10. COST AUDITORS AND COST AUDIT REPORT:
Pursuant to Section 148 of the Companies Act 2013 read with The Companies (CostRecords and Audit) Rules 2014 the cost audit records maintained by the Company inrespect of various manufacturing activities are required to be audited. The cost auditreport for the financial year 2015-16 was filed with the Ministry of Corporate Affairs on6th September 2016. M/s. R. Nanabhoy & Co. Cost Accountants werenominated as the Company's Lead Cost Auditor.
Your Directors have on the recommendation of the Audit Committee appointed M/s. R.Nanabhoy & Co. Cost Accountants to audit the cost accounts of the Cement Paper andTextile products of the Company on a remuneration of ' 3.40 lacs and appointed Shri M.R.Dudani Cost Accountants to audit the cost accounts of the Rayon & Chemicals productson a remuneration of ' 2.08 lacs for the year 2017-18.
As required under the Companies Act 2013 the remuneration payable to the cost auditoris required to be placed before the members in a general meeting for their ratification.Accordingly a resolution seeking members' ratification for the remuneration payable toM/s. R. Nanabhoy & Co. and Shri M.R. Dudani Cost Auditors is included in the Noticeconvening the Annual General Meeting of the Company.
11. SECRETARIAL AUDIT:
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. Gagrani & Gagan Company Secretaries in practice (CP No.1388) toundertake the Secretarial Audit of the Company for the year ending 31st March2018. The Secretarial Audit Report for the year ended 31st March 2017 isannexed herewith as 'Annexure-I' to this Report. The Secretarial Audit Report doesnot contain any adverse qualification reservation or remark.
12. FIXED DEPOSITS:
During the year the Company has not accepted any deposits from the public and thereare no outstanding deposits in terms of the Companies (Acceptance of Deposits) Rules2014.
13. LOANS GUARANTEES AND INVESTMENTS:
It is the Company's policy not to give loans directly or indirectly to any person orother body corporate or give any guarantee or provide any security in connection with aloan to any other body corporate or person. The details of the investments covered underthe provisions of Section 186 of the Companies Act 2013 are given in the FinancialStatements.
14. DIRECTORS' RESPONSIBILITY STATEMENT:
The Board of Directors acknowledge the responsibility for ensuring compliance with theprovisions of Section 134(3)(c) read with Section 134(5) of the Companies Act 2013 in thepreparation of the annual accounts for the year ended on 31st March 2017 andstate that:
a. in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b. the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;
c. the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d. the directors had prepared the annual accounts on a going concern basis;
e. 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. the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
15. KEY MANAGERIAL PERSONNEL:
During the year there was no change in the Key Managerial Personnel.
16. CORPORATE GOVERNANCE:
A separate report on Corporate Governance is enclosed as a part of this Annual Report.A certificate from the Auditors of the Company regarding compliance with the CorporateGovernance norms stipulated is annexed to the Report on Corporate Governance.
17. AUDIT COMMITTEE VIGIL MECHANISM & RISK MANAGEMENT:
Audit Committee comprises of four members and all members are Independent Directors.The Company Secretary is the Secretary of the Committee. All transactions with relatedparties are on an arm's length basis. During the year there are no instances where theBoard had not accepted the recommendations of the Audit Committee. The Company has inplace a vigil mechanism for Directors and Employees to report genuine concerns about anywrongful conduct with respect to the Company or its business or affairs. This policycovers malpractices misuse or abuse of authority fraud violation of the Company'spolicies or Rules manipulations negligence causing danger to public health and safetymisappropriation of monies and other matters or activity on account of which the interestof the Company is affected or is likely to be affected and formally reported by whistleblowers. The Policy provides that all Protected Disclosures can be addressed to theVigilance and Ethics Officer of the Company or to the Chairman of the Audit Committee /Whole-time Director in exceptional cases. All protected disclosures under this policy willbe recorded and thoroughly investigated. If an investigation leads the Vigilance andEthics Officer / Chairman of the Audit Committee to conclude that an improper or unethicalact has been committed the Vigilance and Ethics Officer / Chairman of the Audit Committeeshall recommend to the management of the Company to take such disciplinary or correctiveaction as he may deem fit. The details of the vigil mechanism are also available on theCompany's website www.centurytextind.com
Your Company constituted a Risk Management Committee mandated to review the riskmanagement plan / process of your Company. The Risk Management Committee identifiedpotential risks and assessed their potential impact with the objective of taking timelyaction to mitigate the risks.
The Audit Committee has also been delegated with the responsibility of monitoring andreviewing risk management assessment and minimization procedures developingimplementing and monitoring the risk management plan and identifying reviewing andmitigating all elements of risks which the Company may be exposed to.
The key risks identified by the Company include competition financial risk andcompliance of all applicable statues and regulations. The Company has well definedpolicies/mechanism to mitigate competition and financial risks. The Company reviews thepolicies/mechanism periodically to align with the changes in market practices andregulations. Compliance risks have been mitigated through periodical monitoring and reviewof the regulatory framework to ensure complete compliance with all applicable statutes andregulations.
18. CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE:
The CSR Committee comprises of four members. Three members of the Committee areIndependent Directors.
Due to the average net profit for last three years being negative your Company is notrequired to spend any amount on CSR activities during the year under review.
The Committee met once during the year to review the Corporate Social ResponsibilityPolicy. The Annual Report on CSR containing the particulars specified in the Annexure tothe Companies (CSR Policy) Rules 2014 is annexed as 'Annexure-II' and forms a partof this Report.
19. NOMINATION AND REMUNERATION COMMITTEE:
The Nomination and Remuneration Committee comprises of five members of which fourincluding the Chairman of the Committee are Independent Directors.
The Company's Remuneration Policy is attached as 'Annexure-III' and forms a partof this Report.
20. RELATED PARTY TRANSACTIONS:
All transactions entered into with related parties as defined under the Companies Act2013 during the financial year were in the ordinary course of business and on an arm'slength pricing basis and do not attract the provisions of Section 188 of the CompaniesAct 2013. There were no materially significant transactions with the related partiesduring the financial year which were in conflict with the interest of the Company andhence enclosing of Form AOC-2 is not required. Suitable disclosure as required by theAccounting Standard (Ind-AS 24) has been made in the notes to the Financial Statements.
All Related Party Transactions are placed before the Audit Committee. Prior omnibusapproval of the Audit Committee is obtained on a yearly basis for the transactions whichare of a foreseen and repetitive nature. The transactions entered into pursuant to theomnibus approval so granted are audited and a statement giving details of all relatedparty transactions is placed before the Audit Committee for their approval on a quarterlybasis.
The policy on Related Party Transactions as approved by the Board has been uploaded onthe Company's website.
None of the Directors has any pecuniary relationships or transactions vis-a-vis theCompany.
The Solicitors for the Company M/s. Mulla & Mulla & Craigie Blunt & Caroeprovides the legal services required by the Company from time to time. The transactionswith the said firm are on an arm's length basis and in the ordinary course of business.Shri Yazdi P. Dandiwala one of the Directors of the Company is a Senior Partner in thesaid firm of Solicitors.
21. DECLARATION BY INDEPENDENT DIRECTORS:
Necessary declarations have been obtained from all the Independent Directors undersub-section (6) of Section 149 of the Companies Act 2013.
22. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
The Competition Appellate Tribunal ("COMPAT") by its order dated 11thDecember 2015 set aside the order of Competition Commission of India ("CCI")dated 20th June 2012 and remitted the matter to CCI for fresh adjudication ofthe issues involved. The amount of penalty deposited by the Company in compliance with theinterim order by COMPAT was subsequently refunded. CCI on hearing the arguments by itsorder dated August 31 2016 once again held that the cement companies and the CementManufacturers' Association (CMA) are guilty and in violation of the Sections 3(1) readwith 3(3)(a) and 3(3)(b) of the Competition Act and imposed the penalty which in the caseof the Company works out to ' 274.02 crores. The order for cease and desist was alsoimposed. The Company thereafter approached the COMPAT which by its order dated November7 2016 stayed the operation of the CCI order subject to a deposit of 10% of the penaltyamount within one month. The Company has accordingly deposited the said amount inDecember 2016 in the form of Fixed Deposit in favour of COMPAT on behalf of the Company.The case is now pending before the COMPAT.
23. INTERNAL FINANCIAL CONTROL:
The Company has in place adequate internal financial control systems commensurate withthe size scale and complexity of its operations. During the year such controls weretested and no reportable material weakness in the operations was observed. The Company hasappropriate policies and procedures for ensuring the orderly and efficient conduct of itsbusiness including adherence of the Company's policies safeguarding of its assetsprevention and detection of frauds and errors accuracy and completeness of accountingrecords and timely preparation of reliable financial information. The internal auditormonitors and evaluates the efficacy and adequacy of internal control systems in theCompany. Based on the report of the internal auditor respective departments undertakecorrective action in their respective areas and thereby strengthen the controls.Significant audit observations and corrective actions thereon are presented to the AuditCommittee of the Board.
24. INDIAN ACCOUNTING STANDARDS (IND AS)
IFRS CONVERGED STANDARDS:
The Ministry of Corporate Affairs vide its notification dated 16.02.2015 has notifiedthe Companies (Indian Accounting Standard) Rules 2015. In pursuance of this notificationthe Company has adopted IND AS with effect from 1st April 2016.
25. ASSOCIATE COMPANIES:
The Board of Bander Coal Co. Pvt. Ltd. your Company's associate has initiated theprocess of closure of the said associate as there is no business left with it.
26. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8(3) of The Companies (Accounts) Rules 2014 is annexed herewith as 'Annexure-IV'.
27. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORK PLACE:
During the year under review the Company has not received any complaint under theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
28. BUSINESS RESPONSIBILITY REPORTING:
A separate section of Business Responsibility forms part of this Annual Report asrequired under Regulation 34(2)(f) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
29. PARTICULARS OF EMPLOYEES:
The prescribed particulars of employees required under Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are attached as 'Annexure-V'and forms a part of this Report.
The information required under Section 197(12) of the Companies Act 2013 read withRule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 and forming part of the Directors' Report for the year ended 31stMarch 2017 is given in a separate Annexure to this Report.
The said Annexure is not being sent along with this Report to the Members of theCompany in line with the provisions of Section 136 of the Companies Act 2013. Members whoare interested in obtaining these particulars may write to the Company Secretary at theRegistered Office of the Company. The aforesaid Annexure is also available for inspectionby the Members at the Registered Office of the Company 21 days before the 120thAnnual General Meeting and up to the date of the said Annual General Meeting during thebusiness hours on working days.
None of the employees listed in the said Annexure is a relative of any Director of theCompany. None of the employees hold (by himself or along with his/her spouse and dependentchildren) more than two percent of the equity shares of the Company.
30. EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as 'Annexure-VI'.
Your Directors thank the various Central and State Government DepartmentsOrganizations and Agencies for the continued help and co-operation extended by them. TheDirectors also gratefully acknowledge all stakeholders of the Company viz. customersmembers dealers vendors banks and other business partners for the excellent supportreceived from them during the year. The Directors place on record their sincereappreciation to all employees of the Company for their unstinted commitment and continuedcontribution to the Company's well-being.
|Registered Office: ||On behalf of the Board |
|Century Bhavan || || |
|Dr. Annie Besant Road ||D.K. AGRAWAL ||Y.P. DANDIWALA |
|Worli Mumbai - 400 030 ||Whole-time Director ||Director |
|Dated: 12th May 2017 || || |