for the Year Ended 31st March 2020
Your Directors present the 54th Annual Report and Audited FinancialStatements of the Company for the year ended 31st March 2020.
| ||This Year ||Previous Year |
|Net Revenue from Operations ||142348 ||179138 |
|Profit before Depreciation Finance Cost Exceptional Items and Tax ||13544 ||17214 |
|Add/(Less): || || |
|Depreciation ||(4550) ||(4504) |
|Finance Cost ||(349) ||(346) |
|Exceptional Item (Note 1) ||- ||(454) |
|Taxation (Net) ||908 ||(4252) |
|Net Profit ||9553 ||7658 |
Note 1: Exceptional item in the previous year represents write down in carryingvalue of machinery not in use.
We recommend a dividend at the rate of 80% (i.e. Rs 8.00 per equity share of Rs 10/-each) for the year ended 31st March 2020 (previous year dividend at the rate of 70% i.e.Rs 7.00 per equity share of Rs 10/- each).
TRANSFER TO RESERVES
It is proposed to transfer Rs 1000 Lacs (previous year Rs 1000 Lacs) to GeneralReserve.
COURSE OF BUSINESS
Net Revenue from Operations decreased by 20.54% from Rs 179138 Lacs to Rs 142348Lacs due to lower volume and realisation. The profit before depreciation finance costexceptional items and tax (PBIDT) was also lower by 21.32% from Rs 17214 Lacs to Rs13544 Lacs. The Company's operating performance was impacted due to lower demand of NylonTyre Cord Fabric (NTCF) caused by slowdown in automobile sector drop in Nylon FilamentYarn (NFY) prices due to dumping of NFY by China and other countries and volatility in rawmaterial prices. The net profit increased by 24.75% from Rs 7658 Lacs to Rs 9553 Lacsdue to lowering of corporate income tax rate by the Government.
IMPACT OF COVID-19
To contain the spread of Covid-19 the Government of India imposed nationwide lockdownfrom 24th March 2020. Your Company's plants at Bharuch and Pune sites were shut downtemporarily from 29th March 2020 and 24th March 2020 respectively. The plants receivedapproval for resuming operations from 27th April 2020 for Bharuch site and 17th May2020 for Pune site. Production at both the plants started in gradual manner afterimplementing necessary precautions as per various guidelines issued by the Government.Since there is significant uncertainty with respect to complete opening up of the economyit is difficult to ascertain the extent of impact of Covid-19 on performance of theCompany in the year 2020-21.
EXCISE DUTY DEMAND
The Appellate Tribunal (CESTAT) vide its order dated 20th December 2019 inthe Company's Appeal against the demand of Rs 229.27 Crs. raised by the Commissioner ofCentral Excise of Mahad Site (Konkan Synthetic Fibers - Processed Yarn) denied the benefitof Notification No. 6/2000-CE dated 1st March 2000 which permit specificcentral excise duty of Rs 2.87 per kg on texturised yarn as against ad-valorem duty at therate of 36.80% with CENVAT/ MODVAT benefit. The Tribunal in its order considered thatKSF-POY and KSF-Processed Yarn is a composite factory and not two separate factories. TheTribunal in view of denying the benefit of above notification directed the Commissionerof Central Excise to compute the correct excise duty demand on assessable value extendthe credit of CENVAT/ MODVAT which would be permissible as Central Excise is to be leviedat ad-valorem and other legitimate expenditures like sales tax rebate discount andtextile committee cess.
As regards penalty the Tribunal considered to continue to levy of penalty that wouldbe equal to demand of excise duty as determined on recomputation. Also levy of interest onrecomputed excise duty demand. The Company has filed an appeal against the Order ofTribunal before the Hon'ble Supreme Court of India which awaits admission.
The legal experts have advised that the Company has a good case to succeed.
EXPANSION AND MODERNISATION
Thrust of the Company during the year was on modernisation debottlenecking and energyconservation. Capital expenditure was incurred for acquiring cable corders and loom fordebottlenecking in NTCF conversion capacity replacement of winders control panels andprogrammable logic control (PLC) among others for modernisation and equipment for energyconservation.
Both the plant sites of the Company are environment compliant in terms of environmentregulations.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
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 Companies (Accounts) Rules 2014 are set out in a separate statementattached hereto as Annexure-I and forming part of the report.
MANAGEMENT'S DISCUSSION AND ANALYSIS
The Management's Discussion and Analysis Report for the year under review asstipulated under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 forms a part of the Annual Report.
Your Company reaffirms its commitment to Corporate Governance and is fully compliantwith the requirements relating to Corporate
Governance. A report on Corporate Governance pursuant to Schedule V of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 forms a part of the AnnualReport.
Policy on Directors' Appointment and Remuneration (Including criteria fordetermining qualification positive attributes independence of a Director policyrelating to remuneration for Directors Key Managerial Personnel and other employees).
Policy on Directors' Appointment
Policy on Directors' appointment is to follow the criteria as laid down under theCompanies Act 2013 and Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015. Emphasis is given to people 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 operates taking into account theperformance leverage and such factors so as to attract and retain quality talent.
For Directors it is based on the shareholders resolutions provisions of the CompaniesAct 2013 and Rules framed thereunder circulars and guidelines issued by the CentralGovernment and other authorities from time to time.
ANNUAL EVALUATION BY THE BOARD OF ITS OWN PERFORMANCE ITS COMMITTEES AND INDIVIDUALDIRECTORS
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 meet the requirement of the Company.
DECLARATION OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS
Declarations have been received from Independent Directors confirming meeting of thecriteria and conditions of independence stipulated under sub-section (6) of Section 149 ofthe Companies Act 2013 and Regulation 25(8) of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirements of Section 134(3)(c) of the Companies Act 2013 and onthe basis of explanation and compliance certificate given by the executives of theCompany and subject to disclosures in the Annual Accounts and also on the basis ofdiscussions with the Statutory Auditors of the Company from time to time we state asunder:
a) that in the preparation of the annual accounts the applicable accounting standardshad been followed along with 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 the 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.
Mr. K. S. Thar has been reappointed w.e.f. 27th November 2019 as Non-ExecutiveIndependent Director of the Company for a term of five years by passing a SpecialResolution by the Members of the Company in the 53rd Annual General Meeting of the Companyheld on 13th July 2019.
Mrs. Usha Sangwan was appointed as a Non-Executive Independent Director of the Companyon 5th February 2020 having integrity requisite expertise and experience. She resignedw.e.f. 16th May 2020 due to personal and health reason. The Board of Directors placed onrecord its appreciation for her valuable contribution.
In accordance with Section 152 of the Companies Act 2013 and the Articles ofAssociation of the Company Mrs. Rajashree Birla Director of the Company will retire byrotation and being eligible offers herself for re-appointment.
NUMBER OF MEETINGS OF BOARD OF DIRECTORS
The Board of Directors met 6 times. A meeting of the Independent Directors during theyear ended 31st March 2020 was held over mobile phone due to lock-down imposed in thecountry by the Government of India to control Covid-19 pandemic.
DETAILS OF COMMITTEES OF DIRECTORS
Composition of Audit Committee of Directors Nomination and Remuneration Committee ofDirectors Corporate Social Responsibility Committee of Directors StakeholdersRelationship Committee of Directors and Share Transfer Committee of Directors number ofmeetings held of each Committee of Directors during the financial year 2019-20 andmeetings attended by each member of the Committee as required under the Companies Act2013 are provided in Corporate Governance Report forming a part of Annual Report.
The recommendations of the Audit Committee as and when made to the Board have beenaccepted by it.
KEY MANAGERIAL PERSONNEL
Following are the Key Managerial Personnel of the Company:
Mr. O. R. Chitlange - Managing Director Mr. K. G. Ladsaria - Chief FinancialOfficer Mr. C. B. Gagrani - Company Secretary
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
There are no transactions with related parties which require disclosure under Section134(3)(h) of the Companies Act 2013 read with Rule 8 (2) of the Companies (Accounts)Rules 2014.
LOANS INVESTMENTS AND GUARANTEES BY THE COMPANY
There are no loans given investments made guarantees given or securities provided bythe Company to any entity under Section 186 of the Companies Act 2013.
INTERNAL FINANCIAL CONTROLS
The Company is having in place Internal Financial Control 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 2020 and there are no outstanding deposits in terms of theCompanies (Acceptance of Deposits) Rules 2014.
COMPLIANCE OF SECRETARIAL STANDARDS
Your Company complied with the applicable Secretarial Standards.
Your Company has developed and implemented a Risk Management Policy includingidentification of elements of risk and their severity that may impact the existence ofthe Company. A dedicated Risk Management Committee of Senior Executives has been appointedby the Company to evaluate the risk and mitigation plan and monitor them regularly. Basedon their evaluation there is no element of risk identified by the Management that may inthe opinion of the Board threaten the existence of the Company.
WHISTLE BLOWER MECHANISM
Your Company has put in place Whistle Blower Mechanism. The detailed mechanism is givenin Corporate Governance Report.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
The Company has formulated a policy in respect of Sexual Harassment of Women atWorkplace as per the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013. There was no complaint received bythe Company during the financial year 2019-20 under the aforesaid Act. The Company underthe said Act has constituted internal committees for complaints.
CORPORATE SOCIAL RESPONSIBILITY
Information on Corporate Social Responsibility (CSR) Policy and initiative taken by theCompany during the financial year 2019-20 pursuant to Section 135 of the Companies Act2013 read with Rule 8 of the Companies (CSR Policy) Rules 2014 is annexed herewith asAnnexure-II and forming a part of the report.
ANALYSIS OF REMUNERATION
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 as Annexure-III and forming part of the report.
M/s. Khimji Kunverji & Co. Chartered Accountants have been appointed as theAuditors of the Company to hold office for a term of 5 (five) consecutive years from theconclusion of 50th Annual General Meeting held on 15th July 2016 until the conclusion ofthe 55th Annual General Meeting.
The Cost Accounts records maintained by your Company for Nylon and Polyester Productsare subject to yearly audit by the Cost Accountant in practice. Your Company appointedM/s. D.C. Dave & Co. a firm of Cost Auditors for conducting the audit of suchrecords for the financial year 2019-20.
The cost records as specified by the Central Government under Subsection (1) of Section148 of the Companies Act 2013 are made and maintained.
SECRETARIAL AUDIT REPORT
A Secretarial Audit Report for the year ended 31st March 2020 in prescribed formduly audited by a firm of Practising Company Secretaries M/s. Sanjay Sangani & Co.forms a part of the Annual Report.
PARTICULARS OF EMPLOYEES
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 as Annexure-IV and forming part of the report.
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 the Annual Return isannexed herewith as Annexure - V and forming part of the report.
The web link for the Annual Return placed on the Company's website iswww.centuryenka.com/investor-relations/index.html
BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34(2)(f) of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 a Business ResponsibilityReport forms a part of the Annual Report.
| ||For and on behalf of the Board of Directors |
| ||S. K. Jain |
| ||DIN : 02843676 |
|Place : Mumbai ||O.R. Chitlange |
|Date : 9th June 2020 ||DIN : 00952072 |