Your Directors are pleased to present the Company's Thirty-ninth Annual Report andAudited Financial Statements (standalone and consolidated) for the Financial Year ended 31stMarch 2020. The consolidated performance of the Company and its subsidiaries has beenreferred to wherever required.
The Company's financial performance for the year ended 31st March 2020 issummarised below:
H in crore
|Particulars ||STAND ALONE || ||CONSOLIDATED || |
| ||2019-20 || |
|2019-20 || |
|Gross Income ||2293.76 ||2269.88 ||2329.79 ||2287.54 |
|Profit before Depreciation Interest & Tax ||315.17 ||306.42 ||292.43 ||308.75 |
|Depreciation ||67.55 ||49.99 ||76.31 ||59.48 |
|Interest & Finance Charges ||37.24 ||44.58 ||38.90 ||46.94 |
|Profit before Tax ||210.38 ||211.86 ||177.22 ||202.33 |
|Tax Expenses ||52.21 ||53.10 ||51.93 ||53.46 |
|Profit after Tax ||158.17 ||158.76 ||125.29 ||148.87 |
|Attributable to: || || || || |
|Owners of the Company ||158.17 ||158.76 ||150.58 ||148.45 |
|Non-controlling interests ||- ||- ||(25.29) ||0.42 |
|Other Comprehensive Income (net of taxes) ||(0.35) ||(0.80) ||18.31 ||1.70 |
|Total Comprehensive Income for the year ||157.82 ||157.96 ||143.60 ||150.57 |
|Attributable to: || || || || |
|Owners of the Company ||157.82 ||157.96 ||168.89 ||150.08 |
|Non-controlling interests ||- ||- ||(25.29) ||0.49 |
|Opening balance in Retained Earnings ||914.37 ||783.19 ||912.85 ||791.84 |
|Adjustment with other equity ||(0.35) ||(0.80) ||(0.34) ||(0.65) |
|Adjustment on acquisition of subsidiary ||- ||- ||0.37 ||- |
|Amount available for appropriation ||1072.19 ||941.15 ||1063.46 ||939.64 |
|Final Dividend- FY 2018-19 (FY 2017-18) ||22.22 ||22.22 ||22.22 ||22.22 |
|Tax on Dividend- FY 2018-19 (FY 2017-18) ||4.57 ||4.57 ||4.57 ||4.57 |
|Interim Dividend- FY 2019-20 ||22.22 ||- ||22.22 ||- |
|Tax on Interim Dividend- FY 2019-20 ||4.57 ||- ||4.57 ||- |
|Closing Balance in Retained Earnings ||1018.62 ||914.37 ||1009.88 ||912.85 |
OVERVIEW OF THE COMPANY'S FINANCIAL PERFORMANCE
The standalone Revenue from operations and Gross Income for Financial Year 2019-20 atH2282.68 crore and H2293.76 crore respectively were both marginally higher over thecorresponding figures for Financial Year 2018-19 which stood at H2263.83 crore andH2269.88 crore respectively.
During the Financial Year ended 31st March 2020 your Company recorded aProfit before tax of H210.38 crore as against H211.86 crore in the last year. Net Profitafter tax was H158.17 crore compared to H158.76 crore in previous year.
On consolidated basis the revenue from operations for Financial Year 2019-20 atH2317.03 crore was higher by 2% over the last year (H 2280.39 crore in Financial Year2018-19). Profit before tax and Profit after tax were lower by 12% and 16% respectivelycompared to the previous year.
The operations and financial results of the Company are elaborated in the annexedManagement Discussion and Analysis.
IMPACT OF COVID-19
The COVID-19 pandemic developed rapidly into a global crisis since the last month ofMarch 2020 forcing governments to enforce lock-downs of all economic activity. YourCompany immediately shifted their focus towards ensuring the health and well-being of allemployees staffs and workers engaged across the offices and units in India. In the lastweek of March 2020 the Company suspended its production and distribution facilitiesacross India temporarily and moved to work from home' policy for all its employeesand thereby reducing potential risk to them during the spread of the disease. With thechanging Government of India and State Government's guidelines the Company's operationswere resumed partially from first week of May at various locations across India aftertaking requisite measures for ensuring safety and well-being of employees and workers.Although there are uncertainties due to the pandemic the Company is hopeful that it's thestrong balance sheet position and inherent resilience of the business model will assistthe Company navigate the challenges ahead and gain its market share.
Based on the Company's performance and in conformity with its Dividend DistributionPolicy the Board of Directors of the Company by Circular Resolution passed on 13thFebruary 2020 declared an Interim Dividend of H1.00 (exclusive of dividend distributiontax) per equity share of H1/- each fully paid up for the financial year ending 31stMarch 2020. Interim Dividend in respect of Equity Shares held in physical form has beenpaid to those Members whose names appeared on the Company's Register of Members at theclose of business hours on 21st February 2020 and in respect of Equity sharesheld in electronic form to all those beneficial owners as on 21st February2020 whose details have been furnished by NSDL and CDSL for this purpose.
In view of the ongoing expansion plans coupled with business uncertainties resultingout of the Covid-19 pandemic your Directors have considered it financially prudent in thelong-term interests of the Company to reinvest the profits into the business of theCompany. As such no further dividend has been recommended for the year ended 31stMarch 2020 and that the aforesaid interim dividend be treated as the final dividend. TheCompany continued to balance the dual objectives of appropriately rewarding shareholdersthrough dividends and retaining profits in order to maintain a healthy capital adequacyratio to support future growth. The Dividend Distribution Policy of the Company is annexedto this Report as Annexure 6' and is also available on the Company's website at:https://www.centuryply.com/codes-policies/CPIL-Dividend-Distribution-Policy.pdf.
TRANSFER TO RESERVES
The Reserves and Surplus of your Company has increased to H1051.13 crore in the year2019-20 as compared to H946.87 crore in the year 2018-19. Your Directors have proposed notto transfer any sum to the General Reserve during the Financial Year 2019-20.
As on 31st March 2020 the Company's paid-up Equity Share Capital wasH222527240/-comprising of 222172990 Equity Shares of Face Value of H1/- each andH354250 received on account of 1380000 (post-split) forfeited shares. There has notbeen any change in the Equity Share Capital of the Company during the Financial Year ended31st March 2020. During the Financial Year 2019-20 your Company has neitherissued any shares or convertible securities nor has granted any stock options or sweatequity.
INDIAN ECONOMY AND STATE OF AFFAIRS
The Indian economy has been experiencing significant slowdown over the past fewquarters. The year 2019-20 was challenging for the Indian economy owing to thedecelerating growth rate experienced in the first half of the financial year. In the thirdquarter of the current fiscal the economy grew at a six-year low rate of 4.7%. Amongstthe various reforms introduced during the year to promote growth and investment reductionin corporate income tax rate was a major structural reform. Investment and consumptiondemand had been languishing and a number of stimulus measures have been taken to bringback the economy on a growth path. While the country's development trajectory is strongchallenges remain.
There was a strong hope of recovery in the last quarter of the current fiscal. Howeverthe new Covid-19 pandemic has made the recovery extremely difficult in the near to mediumterm. The outbreak has presented fresh challenges for the Indian economy now causingsevere disruptive impact on both demand and supply side elements which has the potentialto derail India's growth story. Greater uncertainty about the future course andrepercussion of Covid-19 has also made the financial market extremely volatile leading tohuge crashes and wealth erosion which in turn is impacting consumption levels. Suspensionof operations in most sectors has adversely affected demand across all segments.Consumption is also getting impacted due to job losses and decline in income levels ofpeople due to slowing down of activities in several sectors including retailconstruction entertainment etc. With widespread fear and panic now increasing amongpeople overall confidence level of consumers has dropped significantly leading topostponement of their spending decisions.
On the supply side shutting down of factories and the resulting delay in supply ofgoods from overseas has affected many manufacturing sectors in India which are facing animminent raw material and component shortage. This has hampered business sentiment andaffected investment and production schedules of companies. Given the challenges that thebusinesses and people are facing currently the Indian economy is most likely toexperience a lower growth during the last quarter of the current fiscal. In case thespread of Covid-19 continues growth may remain subdued in the first quarter of FY 20-21as well. Most multilateral agencies and credit rating agencies have therefore revisedtheir 2020 and 2021 growth projections for India keeping in view the negative impact ofCovid-19 induced travel restrictions supply chain disruptions subdued consumption andinvestment levels on the growth of both global and the Indian economy.
The World Economic Outlook (WEO) update of January 2020 published by InternationalMonetary Fund (IMF) had projected India's real GDP to grow at 5.8 per cent in 2020-21. InApril 2020 the IMF again issued a report considering the impact of COVID-19 pandemic onthe growth of the economies which forecasted that the growth rates in India will bemodest.
Growth in the real estate and building material sector which has been struggling overthe past 3-4 years due to issues like demonetisation RERA GST and the NBFC fundingcrisis would now need to cope with the COVID-19 impact. The sector's growth which hasalready been substantially impacted due to muted real estate growth over FY17-FY20 wouldpossibly witness further deceleration with renovation demand likely to shrink in the nearterm.
In July 2019 the Union Budget 2019- 20 had articulated the vision of the Hon'ble PrimeMinister to make India a US$ 5 trillion economy by 2024-25. However as per the economicsurvey amidst a weak environment for global manufacturing trade and demand the Indianeconomy slowed down and the milestone of making India a US$ 5 trillion economy by 2024-25was challenged. Despite the above facts the economy is poised for a rebound towards theUS$ 5 trillion goal on the back of its proven record of growth with macroeconomicstability over the last five years.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
No material changes or commitments have occurred between the end of the financial yearon 31st March 2020 and the date of this Report which may affect the financialposition of the Company save and except the close-down resulting due to the pandemicCovid-19 impact whereof is unascertainable.
Nowadays consumers are replacing their furniture more frequently than in the pastwhich is largely due to increasing standards of living and a steady increase in disposableincome thereby boosting the demand for wood panel products. Moreover aesthetic reasonscoupled with the need and desire for comfort also contribute to the constant growth ofthis market.
With the revenue in the Furniture market amounting to US$205395 Million in the year2020 it is expected that the furniture market will grow annually by 5.1% (CAGR2020-2023).
The sales in decorative veneers and highlighters have seen flatness that may be due tosteep pressure on consumers due to economic slowdown. The Panel manufacturing industry andthe wholesale community have been under tremendous stress since a couple of years butthere is optimism building for the coming years.
The impact of Covid-19 pandemic is visible on industrial sectors across the productsincluding wood panel decorative and raw materials. The entire industry and tradetransactions and transport is expected to hit badly which may jeopardize many companiessupply chain and businesses. Besides its worrying effects on human life the novel strainof coronavirus has significantly slowed down the global economy. Retailers and dealersstruggled to maintain their sales tally in present slowdown because there is over-supplyscenario in entire decorative and wood panel products. Plywood industry is facing a cut-throat competition. The Company has been able to counter the threat posed by progressivecommoditization of plywood by garnering increased realizations from its well establishedbrands enabling the Company's products.
The housing and real estate sectors has been one of the major contributors to theeconomy not only by itself but also because of the support it lends to innumerableancillary industries like cement paint plywood laminate etc. This sector is thebiggest demand driver of wood panel products. With the advent of the Pradhan Mantri AwasYojana Urban (PMAY-U) intending to provide pucca house with basic amenities to alleligible urban poor it is expected to fuel demand for most building products withPlywood products being one of them. Out of 1.03 crore houses approved under the PMAY-Uscheme 60 lakhs have been grounded for construction out of which 32 lakh houses havebeen completed and delivered. Urban habitats and cities are the epicenters of economicgrowth and have contributed significantly to the Indian economy. On the other hand asmany as 5151 projects worth more than H2 lakh crore are being implemented in 100 citiesunder the government's smart city mission (SCM). As on November 14 2019 4154 SCMprojects worth H1.49 lakh crore (72 per cent of the total proposals) have been tenderedof which 3359 projects worth H1.05 lakh crore (51 per cent of total proposals) have beenissued work orders. Both PMAY-U and the SCM are expected to maintain the buoyancy indemand for panel products in the years to come. With the introduction of GST (Goods andServices Tax) and reduced tax rate on plywood i.e. from 28% to 18% the Indian plywoodmarket has been gradually moving from an unorganized state to an organized state. In orderto boost the demand of real estate sector with effect from 1st April 2019GST at an effective rate of 1% without Input Tax Credit on affordable residentialapartments and 5% without Input Tax Credit on residential apartments outside affordablesegment has been levied. The reduced GST rates for under-construction properties has tosome extent given the much awaited fillip to the real estate sector which was otherwisewitnessing adversities. There is a marginal increase of 5 percent in customs duty onimport of furniture. With this the demand of Make in India' customized furniturewill be fueled. After customs duty hike net effect would be around 6 to 7 percentincrease in price for the end customers. However the increase being nominal in natureseems to be manageable.
The share of the organised wood panel market has already started expanding on accountof the various reforms of the Government backed by high brand aspirations of theconsumers. A constant shift towards the organised sector is being witnessed owing to brandand quality awareness wider choice of products product innovation and warranty.Centuryply has been the front-runner when it comes to implementing innovative practices atwork. Overall we are optimistic of carving out a progressively larger market and revenueshare increasing margins and value in a sustainable way across the future. The buyingcapacity of people is likely to increase in the years to come and this will have apositive impact on furniture industry. With the right process and systems brand imageregional plant set-ups adequate cash flow there is no point uncovered that does notextend advantage to an organized brand like CenturyPly. The Company forayed into newcategories and new variants in existing categories of its products.
A new concept of customization of its economical variant of Sainik' plywood wasintroduced by the Company branded as Sainik OEM' to service OEM's with theirspecific requirements. Sainik MR Pro' was introduced to specifically service largeprojects. The Company's premium brand Architect ply' was also revamped with absolutefire retardant properties and other features. Apart from this the Company enhancedwarranty on its Club Prime Bond 710 and Sainik 710 brand of products by improvising theirquality.
FUTURE PLANS OF EXPANSION
The Company's Medium Density Fiber (MDF) Board unit at Hoshiarpur in Punjab whichstarted operations during FY 2017-18 with an installed capacity of 198000 cbm per yearmanaged to attain a capacity utilisation of 65% during FY 2018-19 and the same is expectedto be around 85% during FY 2019-20.
The Company's Particle Board unit at Chennai which had started operations in July 2016with an installed capacity of 54000 cbm per year attained full capacity utilisation duringFY 2018-19. With growing demand for the Company's particle board viability for increasingthe capacity of this unit is being assessed.
The Company has incorporated a subsidiary in Gabon Africa in the name of Century GabonSUARL to take advantage of availability of Okoume timber for meeting its face veneerrequirements. The Company is already having similar backward integration in Myanmar andLaos for securing availability of raw material. The Company is also analysing theviability of setting-up and operating a MDF and Particle Board manufacturing unit in UttarPradesh. Availability of adequate raw-material pro-activeness of the U.P. Government inpromoting wood-based industries in the State and locational advantage in terms of marketfor MDF and Particle Board are some of favourable factors being considered for thispurpose. The Board had already granted its in-principle approval for the proposed project.Traditionally the Company has been operating in prime or upper segment of plywood market.Over the recent past growth in this segment has been almost flat. With Government's focusalso shifting towards affordable housing the Company with its economy segment productlike Bond 710' Sainik' and Sainik 710' is constantly increasing itscapacities and penetrating the mid-market and affordable segments. The Company expects tocontinue its focus in this segment to widen its customer base. Your Company is alsoinvesting heavily on brand positioning for ensuring that the Centuryply brand occupies adistinct position relative to competing brands in the mind of the customers.
CHANGE IN NATURE OF BUSINESS IF ANY
There has not been any change in the nature of business of the Company during the FYended 31st March 2020.
CHANGES IN SUBSIDIARIES
As on 31st March 2020 your Company had 11 subsidiaries and 3 step-downsubsidiaries. There are no associate companies or joint venture companies within themeaning of Section 2(6) of the Companies Act 2013 as amended from time to time. Therehas been no material change in the nature of the business of the subsidiaries.
During the year under review your Company incorporated a wholly owned subsidiary on 19thFebruary 2020 in the name of Century Panels Limited' having registered office atKolkata with the object of manufacturing and trading of Particle Board MDF and otherrelated products. Further M/s. Auro Sundram Ply & Door Pvt. Ltd your Company'sSubsidiary acquired the shareholding in another Company viz. Asis Plywood Ltd.'which was undergoing corporate insolvency proceedings. Consequently Asis Plywood Ltd. alsobecame a step-down subsidiary of your Company with effect from 28th January2020. Taking into account the above as on 31st March 2020 your Company'ssubsidiaries were Auro Sundram Ply & Door Pvt. Ltd. Century MDF Ltd. Ara SuppliersPvt. Ltd. Arham Sales Pvt. Ltd. Adonis Vyaper Pvt. Ltd. Apnapan Viniyog Pvt. Ltd.Century Infotech Ltd. Century Panels Ltd. Centuryply Myanmar Pvt. Ltd. Century Ply(Singapore) Pte. Ltd. and Century Gabon SUARL and its step-down subsidiaries were AsisPlywood Ltd. Century Ply Laos Co. Ltd. Century Huesoulin Plywood Lao Co. Ltd. YourCompany does not have any material subsidiary whose net worth exceeds 10% of theconsolidated net worth of the Company in the immediately preceding financial year or hasgenerated 10% of the consolidated income of the Company during the previous financialyear.
There has been no material change in the nature of the business of the subsidiaries/step-down subsidiaries during the year under review.
Auro Sundram Ply & Door Pvt. Ltd. is engaged in the manufacturing of plywood andallied products from eco-friendly agro-forestry timber and operating a plywood unit atRoorkee in Uttarakhand. Century Infotech Ltd. is engaged in the business of e-commercee-shopping online information services online application integration including buyingselling marketing trading and dealing in various kinds of products and services.
Centuryply Myanmar Pvt. Ltd. is operating a veneer and plywood unit near Yangon city inMyanmar and is supplying the same primarily to our Company.
Century Ply (Singapore) Pte. Ltd. is undertaking trading in veneer and plywood. It hasentered into arrangements with various entities in Laos whereby it has provided them withplant and machinery for manufacture and supply of veneer and plywood to it. Century PlyLaos Co. Ltd. is engaged in the manufacturing veneer in Attapeu province in Laos out ofraw material sourced locally while Century Huesoulin Plywood Lao Co. Ltd. is manufacturingplywood at its unit in Savannakhet Province in Laos. However due to administrativerestrictions imposed by the Laos Government the operations of these step-downsubsidiaries and consequently that of Century Ply (Singapore) Pte. Ltd. remained suspendedduring the financial year under review.
Ara Suppliers Pvt. Ltd. Arham Sales Pvt. Ltd. Adonis Vyaper Pvt. Ltd. and ApnapanViniyog Pvt. Ltd. jointly own and hold some land in Kolkata which is yet to be developed.Century MDF Ltd. and Century Panels Limited are presently not operational.
Adhering to the guidelines issued by the governing authorities of the respectivecountries and also with the intent of ensuring the health and well-being of all employeesstaffs and workers engaged across the offices and units both in India and abroad in thewake of Covid-19 the Company's Subsidiaries also suspended their production anddistribution facilities temporarily and moved to work from home' policy for all itsemployees thereby reducing potential risk to them during the spread of the disease.Gradually with the changing directives their operations were resumed partially fromfirst week of May after taking requisite measures for ensuring safety and well-being ofemployees and workers.
POLICY FOR DETERMINING MATERIAL SUBSIDIARIES
In accordance with Regulation 16(1)(c) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (Listing Regulations') as amended from time totime the Company has a policy for determining material subsidiaries and the same isavailable on the website of the Company at https://www.centuryply.com/codes-policies/CPIL-Policy-on-material-subsidiary.pdf.
FINANCIAL POSITION & PEFORMANCE
The Company monitors performance of subsidiary companies inter alia by the followingmeans:
Financial statements of the subsidiary companies are reviewed by the Company'sAudit Committee.
Major investments made by the subsidiaries are reviewed quarterly by theCompany's Audit Committee.
Minutes of Board meetings of subsidiary companies are placed before theCompany's Board regularly.
Significant transactions and arrangements entered into by subsidiary companiesare placed before the Company's Board.
In accordance with the proviso to Section 129(3) of the Companies Act 2013 read withRule 5 of the Companies (Accounts) Rules 2014 a Statement in the prescribed Form AOC-1containing the salient features of the financial statements of each of your Company's
Subsidiaries is appended as Annexure 1' to this Report.
The Contribution of the subsidiaries to the overall performance of the Company duringthe year is given in note no. 48 of the Consolidated Financial Statement.
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to Section 129(3) of the Companies Act 2013 and Regulation 34(2) of ListingRegulations the Consolidated Financial Statements prepared in accordance with theapplicable provisions of the Companies Act 2013 read with the Companies (Accounts) Rules2014 Companies (Indian Accounting Standards) Rules 2015 and other applicable provisionsalong with Auditor's Report thereon forms part of this Annual Report. The same includesthe financial details of all the subsidiaries of the Company.
The Annual Report of the Company containing therein its standalone and consolidatedfinancial statements together with other documents required to be attached thereto hasbeen placed on the website of the Company www.centuryply.com. The Audited FinancialStatements of each of the Subsidiaries detailing their respective performances have alsobeen placed on the website of your Company at www.centuryply.com under theInvestors' section. The Financial Statements along with audit reports thereto inrespect of the Company's subsidiaries are available for inspection by the Members at theRegistered Office of the Company and that of the respective subsidiaries during workingdays between 11.00 A.M. and 1.00 P.M. Shareholders interested in obtaining a copy of theaudited financial statements of the subsidiary companies may write to the CompanySecretary at the Company's registered office.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
Particulars of loans guarantees given and investments made during the year inaccordance with Section 186 of the Companies Act 2013 are given in Annexure- 2'hereto and forms a part of this Report. The aggregate of loans guarantees given andinvestments made by the Company in accordance with Section 186 of the Companies Act 2013does not exceed the higher of sixty percent of its paid-up share capital free reservesand securities premium account or one hundred percent of its free reserves and securitiespremium account.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts/ arrangements/ transactions with related parties entered into ormodified by the Company during the Financial Year 2019-20 as referred in Section 188(1)of the Companies Act 2013 read with Rules thereunder were on an arm's length basis. Thesaid transactions with Related Parties were entered into for the benefit and in theinterest of your Company and its stakeholders. These transactions were inter alia based onvarious considerations such as business exigencies synergy in operations the policy ofthe Company and resources of the Related Parties. There was no material related partytransaction made by the Company during the year requiring shareholders' approval underRegulation 23(4) of the Listing Regulations or Section 188 of the Companies Act 2013 readwith Rules made thereunder.
All transactions with Related Parties are placed before the Audit Committee as also theBoard for approval. Prior omnibus approval of the Audit Committee is obtained for thetransactions which are foreseeable and of a repetitive nature. A statement of transactionsentered into pursuant to the approvals so granted is placed before the Audit Committee andthe Board of Directors on a quarterly basis. During the year the Company had not enteredinto any contract/ arrangement / transaction with related parties which could beconsidered material in terms of the Company's Policy on Materiality of and dealing withRelated Party Transactions. Accordingly the disclosure of Related Party Transactions asrequired under Section 134(3) (Rs.) of the Companies Act 2013 read with Rule 8 of theCompanies (Accounts) Rules 2014 in Form AOC-2 is not applicable. The Related PartyDisclosures in terms of Regulation 34(3) read with Part A of Schedule V of the ListingRegulations is provided under note no. 41 of the Notes to the Financial Statements. Thereare no materially significant transactions with related party which may have a potentialconflict with the interest of the Company at large. Your Company's Policy on materialityof and dealing with Related Party Transactions as formulated and adopted by the Board ofDirectors in terms of Regulation 23(1) of the Listing Regulations may be accessed on theCompany's website at: https://www.centuryply.com/codes-policies/Policy-on-Materiality-of-and-dealing-with-related-party-transcations.pdf.The Policy intends to regulate transactions between the Company and its Related Partiesbased on the applicable laws and regulations and also lays down mechanism foridentification approval review and reporting of such transactions.
During the Financial Year 2019-20 the Company has not invited accepted or renewed anypublic deposits covered under Section 73 of the Companies Act 2013 read with theCompanies (Acceptance of Deposits) Rules 2014. As such no amount on account of principalor interest on public deposits was outstanding as on the date of the Balance Sheet.
M/s Singhi & Co Chartered Accountants (ICAI Firm Registration No. 302049E) hasbeen your Company's Auditors since 2014. In terms of the provisions of Section 139 of theCompanies Act 2013 read with provisions of the Companies (Audit and Auditors) Rules2014 as amended the Members at the Thirty-Eighth Annual General Meeting held on 4thSeptember 2019 approved their reappointment as Statutory Auditors of the Company for asecond term of five consecutive years i.e. from the conclusion of the Thirty-eighthAnnual General Meeting until the conclusion of Forty-third Annual General Meeting to beheld in the calendar year 2024. Your Company has received a confirmation from M/s. Singhi& Co. Chartered Accountants confirming their eligibility to continue as Auditors ofthe Company in terms of Section 141 of the Companies Act 2013 and the Rules framedthereunder and that their appointment is within the limits prescribed under Section 141(3)(g) of the Companies Act 2013. M/s. Singhi & Co. have also confirmed that they havebeen subjected to the peer review process of the Institute of Chartered Accountants ofIndia (ICAI) and holds a valid certificate issued by the Peer Review Board of ICAI asrequired under Regulation 33(1)(d) of the Listing Regulations.
STATUTORY AUDITORS' REPORT
The Auditors' Reports issued by the Statutory Auditors M/s. Singhi & Co on theStandalone and Consolidated Financial Statements of the Company for the Financial Yearended 31st March 2020 is set out in the Financial Statements and forms part ofthis Annual Report. The Statutory Auditors have issued an unmodified audit opinion on theCompany's Financial Statements for the year ended 31st March 2020. There areno qualifications or reservations or adverse remarks or disclaimers in the said Report.
There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit Committee and / or the Board of Directors orCentral Government under Section 143(12) of the Companies Act 2013 read with Rule 13 ofThe Companies (Audit and Auditors) Rules 2014. The Notes on Financial Statements referredto in the Auditors' Report are self-explanatory and do not call for any further comments.
Pursuant to the provisions of Section 204 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 andRegulation 24A of the Listing Regulations the Board had appointed M/s MKB &Associates a firm of Company Secretaries in Practice as Secretarial Auditor to conductSecretarial Audit of the Company for the Financial Year 2019-20 and their report in FormMR-3 is appended hereto as Annexure 3'. The said Secretarial Audit Report for theFinancial Year 2019-20 does not contain any qualification reservation adverse remark ordisclaimer.
No frauds have been report by any of the Auditors of the Company during the year underreview.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
I. INDEPENDENT DIRECTORS:
(A) CHANGES IN INDEPENDENT DIRECTORS:
In terms of Section 149(11) of the Companies Act 2013 no
Independent Director shall hold office for more than two consecutive terms. The secondterm of Sri Mangilal Jain (DIN-00353075) as an Independent Director of the Company gotcompleted on 31st March 2020. The Directors wish to place on record theirappreciation for the contribution made by Sri Jain during his long association with theCompany.
Pursuant to recommendation of Nomination & Remuneration Committee the Board ofDirectors at its meeting held on 3rd February 2020 appointed Sri Amit KiranDeb (DIN- 02107792) as an Additional Director in the Independent category not liable toretire by rotation with effect from 1st pril 2020 for a term up to 30thSeptember 2023 in place of Sri Mangilal Jain whose second term expired on 31stMarch 2020 subject to regularisation/ approval of the shareholders of the Company at theensuing Annual General Meeting. The Board of Directors of your Company recommends hisappointment. Pursuant to the provisions of Section 149 and 152 read with Schedule IV ofthe Companies Act 2013 and the Rules thereunder the shareholders at the Annual GeneralMeeting held on 1st September 2017 inter-alia confirmed appointment of SriVijay Chhibber (DIN: 00396838) as an Independent Director with effect from 1stFebruary 2017 to 31st January 2020 that of Sri Sunil Mitra (DIN: 00113473)from 3rd August 2017 to 31st July 2020 and of Sri Debanjan Mandal(DIN: 00469622) from 1st August 2017 to 31st July 2020. As per theprovisions of Section 149(10) of the Companies Act 2013 Independent Directors can bere-appointed for a second term of up to five consecutive years on passing of specialresolution by shareholders of the Company and disclosure of such appointment in itsBoard's report. Accordingly in terms of Sections 149(10) and 149(11) of the CompaniesAct 2013 the first term of Sri Vijay Chhibber as Independent Director of the Companyexpired on 31st January 2020 and that of Sri Sunil Mitra and Sri DebanjanMandal is due to expire on 31st July 2020. The Board of Directors at itsmeeting held on 9th August 2019 after considering the recommendations of theNomination and Remuneration Committee and on the basis of the report of performanceevaluation of Independent Directors and their respective consents recommendedreappointment of Sri Vijay Chhibber for a second term from 1st February 2020to 31st January 2025 that of Sri Sunil Mitra and Sri Debanjan Mandal from 1stAugust 2020 to 31st July 2025 as Independent Directors on the Board of theCompany and the same was approved by the Shareholders by way of Special Resolution attheir Annual General Meeting held on 4th September 2019.
The Company had received a notice in writing from a member under Section 160 of theCompanies Act 2013 proposing the candidature of Sri Amit Kiran Deb for the office ofIndependent Director of the Company.
The Company had also received from Sri Amit Kiran Deb
(i) consent to act as Director in writing in Form DIR-2 pursuant to Rule 8 of Companies(Appointment and Qualification of Directors) Rules 2014
(ii) disclosure in Form DIR-8 pursuant to Rule 14(1) of the Companies (Appointment andQualification of Directors) Rules 2014 to the effect that he is not disqualified undersub section (2) of Section 164 of the Companies Act 2013 and
(iii) declaration to the effect that he meets the criteria of independence asprescribed both under sub-section (6) of Section 149 of the Act Rules thereunder andunder the Listing Regulations.
The detailed profile of Sri Amit Kiran Deb and particulars of his experience skill andattributes that qualify him for Board Membership together with other details as requiredunder the Companies Act 2013 Secretarial Standards and Listing Regulations are given inthe explanatory statement attached to the Notice of the ensuing Annual General Meeting.The said appointment is subject to the approval of shareholders.
(B) DECLARATION BY INDEPENDENT DIRECTORS
As per the provisions of Section 149 (7) of the Companies Act 2013 read with Rulesmade thereunder and as per Regulation 25(8) of Listing Regulations your Company hasreceived declarations from all the Independent Directors confirming that they meet thecriteria of independence as prescribed in Section 149(6) of the Companies Act 2013 andRegulation 16(1) (b) of the Listing Regulations. There has been no change in thecircumstances affecting their status as an Independent Director during the year. TheIndependent Directors have also confirmed that they are not aware of any circumstance orsituation which exist or may be reasonably anticipated that could impair or impact theirability to discharge their duties with an objective independent judgment and without anyexternal influence. The independent directors have complied with the Code of Conduct asformulated by the company and have also complied with Code for Independent Directorsprescribed in Schedule IV to the Companies Act 2013.
(C) FAMILIARIZATION PROGRAMME
Considering the diversified nature of the Company's business and also for facilitatingtheir active participation it is important that the Independent Directors are wellversed with the business and all the related activities including but not limited to thenature of industry products markets operations subsidiaries and its businessespolicies regulatory aspects affecting the Company etc. This is achieved through astructured familiarisation plan. In view of this and pursuant to provisions of Regulation25(7) of the Listing Regulations and Schedule IV of the Companies Act 2013 the Companyhas in place a structured Familiarization Programme for Independent Directors. The Programaims to provide insights into the Company to enable the Independent Directors understandtheir roles rights and responsibilities and to get updated on the Company's Business andOperations so that they may contribute significantly to the Company.
A detailed overview of the Company's familiarization program can be accessed throughweblink:https://www.centuryply.com/codes-policies/Familiarization-Programme-for-Independent-Directors.pdf.
Your Company conducted a familiarization programme for all its Independent Directors on3rd February 2020 wherein a visit to the Company's manufacturing facility atKolkata was organised. The Independent Directors were given an overview of the plantoperations production processes important raw materials finished goods health andsafety measures environmental and other applicable laws etc. Presentations during BoardMeetings were also made by the Company Secretary giving an overview of rolesresponsibilities and liabilities of Independent Directors along with an in-depth analysisof the latest regulatory amendments and requirements of the Companies Act and various SEBIRegulations. Further periodically the senior management of your Company makespresentation to apprise the Independent Directors of the domestic/ overseas industryscenario business model of the Company and its strategic priorities. The details of suchFamiliarization programme for the Independent Directors conducted during the year underreview has been uploaded on the website of the Company and is available at the weblink:https://www.centuryply.com/investor-information/Familiarisation-Programme-Detailsfi2019-20.pdf.
Your Company believes that a Board which is well informed will contribute significantlyto management of current and potential strategic issues. In pursuit to this your Companyendeavors to regularly update the Independent Directors by providing them with necessarypresentations documents reports internal policies and updates to familiarise them withthe Company's business policies procedures and practices at various Meetings held duringthe year. The Independent Directors are made aware of their role function duties andresponsibilities through a formal letter of appointment which also stipulates terms andconditions of their engagement. The Company conducts the orientation process forNon-Executive Independent Directors which includes interactive sessions with Board andCommittee members Business and Functional Heads Newly appointed Independent Directorsare provided an introductory kit containing Memorandum and Articles of Association of theCompany organisational structure set of major statutory and internal policies of theCompany Board and Committee structure and details about the Company's subsidiaries.Independent Directors are provided with necessary documents/brochures reports andpolicies to enable them to familiarize with the Company's procedures and practices.
Your Company hosts site visits to the Company's factory locations for the IndependentDirectors to enable them to understand the operations of the Company. Apart from in-houseprogramme the Independent Directors are also encouraged to participate in varioustraining sessions to update and refresh their skills and knowledge. Each Director of theCompany has complete access to any information relating to the Company. IndependentDirectors have the freedom at all times to interact with the Company's management. TheCompany's Board has open channels of communication with executive management which allowsfree flow of communication amongst Directors in terms of raising query and seekingclarifications.
(D) STATEMENT REGARDING INDEPENDENT DIRECTOR
The Board opined that your Company has been fortunate over the years to haveexperienced persons from diverse fields as Independent Directors on its Board. In theopinion of the Board the Independent Directors appointed during the year are highlyskilled and their expertise provides a unique contribution to the Board's overalleffectiveness. Further the Independent Directors maintained high standard of ethics anddemonstrated highest level of integrity including maintaining utmost confidentiality andidentifying disclosing and managing conflicts of interest.
Further the Independent Directors have also confirmed compliance with the provisionsof Rule 6(1) of the Companies (Appointment & Qualification of Directors) Rules 2014with respect to inclusion of their names in the data bank maintained by the IndianInstitute of Corporate Affairs at Manesar.
II. NON- INDEPENDENT DIRECTORS:
(A) CHANGES IN NON-INDEPENDENT DIRECTORS:
There has not been any appointment/ retirement/ resignation of Non-independentDirectors during the Financial Year ended 31st March 2020.
(B) RETIREMENT BY ROTATION:
Pursuant to the provisions of Section 152(6)(c) of the Companies Act 2013 Sri HariPrasad Agarwal (DIN: 00266005) and Sri Prem Kumar Bhajanka (DIN: 00591512) being longestin office retire by rotation and being eligible offer their candidature forre-appointment as Directors. In view of their considerable experience and contribution tothe Company the Board recommends their re-appointment. The detailed profiles of theaforesaid Directors and particulars of their experience skill and attributes that qualifythem for Board Membership together with other details as required under the Companies Act2013 Secretarial Standards and Listing Regulations are given in the explanatorystatement attached to the Notice of ensuing Annual General Meeting of the Company.
III. KEY MANAGERIAL PERSONNEL
There has not been any appointment/ retirement/ resignation of Key Managerial Personnelduring the Financial Year ended 31st March 2020.
IV. INTER-SE RELATIONSHIPS BETWEEN THE DIRECTORS
None of the Directors of the Company are related inter-se except for Sri KeshavBhajanka who is the son of Sri Sajjan Bhajanka Chairman and Managing Director and Smt.Nikita Bansal who is the daughter of Sri Sanjay Agarwal CEO & Managing Director.
MEETINGS OF BOARD OF DIRECTORS
During the year under review the Board met four times i.e. on 27th May2019 9th August 2019 8th November 2019 and 3rdFebruary 2020. The maximum time gap between any two consecutive Board meetings did notexceed 120 days. The details of the Meetings held during the year are given in theCorporate Governance Report forming part of the Annual Report.
MEETINGS OF INDEPENDENT DIRECTORS
During the year under review the Independent Directors met once on 3rdFebruary 2020 without the presence of Non-Independent Directors and members of theManagement inter alia to:
Review the performance of Non-Independent Directors the Board as a whole andthat of its Committees;
Review the performance of the Chairman of the Company taking into account theviews of Executive Directors and Non-Executive Directors; and
Assess the quality content and timeliness of flow of information between theCompany's management and the Board which is necessary for the Board to effectively andreasonably perform its duties.
PARTICULARS OF MANAGERIAL REMUNERATION
Information as required under Section 197 (12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is annexed to the Board's Report and marked as Annexure 4'.
Your Directors state that none of the Executive Directors of the Company received anyremuneration or commission from any of its Subsidiaries.
PARTICULARS OF EMPLOYEES
The statement in respect of employees as required under Section 197 of the CompaniesAct 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is given in Annexure 4' forming part of thisReport. There was also no employee receiving remuneration during the year in excess ofthat drawn by the Managing Director or Whole-time Director and holding by himself or alongwith his spouse and dependent children not less than two percent of the equity shares ofthe Company.
CORPORATE GOVERNANCE MEASURES
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) and 134(5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and belief states that it had:-
(i) followed the applicable accounting standards in the preparation of the AnnualAccounts for the year ended 31st March 2020 along with proper explanationsrelating to material departures if any;
(ii) selected such accounting policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company as at the end of the Financial Year 31st March2020 and of the profit of the Company for that period;
(iii) taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(iv) prepared the Annual Accounts of your Company for the Financial Year ended 31stMarch 2020 on a going concern' basis;
(v) laid down internal financial controls to be followed by the Company and that suchinternal financial controls are adequate and were operating effectively; and
(vi) devised proper systems to ensure compliance with the provisions of all applicablelaws and that such systems were adequate and were operating effectively.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis report capturing your Company's performanceindustry trends and other material changes with respect to your Company and itssubsidiaries is presented in a separate section forming part of the Annual Report. TheReport provides a consolidated perspective of economic social and environmental aspectsmaterial to our strategy and our ability to create and sustain value to our keystakeholders and includes aspects of reporting as required by Regulation 34(2)(e) readwith Schedule V of the Listing Regulations.
Your Company's philosophy on Corporate Governance mirrors its belief that principles oftransparency fairness and accountability towards the stakeholders are the pillars of agood governance system. The Company's business structures values cultures policies andprocedures are designed to ensure that the Company is managed in a manner that meetsstakeholder's aspirations and societal expectations. The Company believes in achievingbusiness excellence and optimizing long-term value for its shareholders on a sustainedbasis through ethical business conduct.
Your Company is committed to adopt best Corporate Governance practices to boostlong-term shareholder value without compromising the rights of the minority shareholders.Your Company complies with the applicable provisions of the Companies Act 2013 andapplicable Secretarial Standards issued by the Institute of Company Secretaries of India.Apart from complying with the mandatory requirements your Company also complies withcertain discretionary requirements of Corporate Governance as specified in Part E ofSchedule II of the Listing Regulations.
In compliance with the provisions of Regulation 34 of the Listing Regulations read withSchedule V of Listing Regulations a Report on Corporate Governance for the Financial Yearended 31st March 2020 along with a Certificate issued by M/s. MKB andAssociates Company Secretaries in Practice confirming compliance with the requirementsof Corporate Governance forms a part of the Annual Report.
CEO & CFO CERTIFICATION
In terms of Regulation 17(8) read with Schedule II Part B of the Listing Regulations acertificate from the Chief Executive Officer and Chief Financial Officer of the Companyaddressed to the Board of Directors inter alia confirming the correctness of thefinancial statements and cash flow statements for the Financial Year ended 31stMarch 2020 adequacy of the internal control measures and reporting of matters to theAudit Committee is provided elsewhere in this Annual Report.
INTERNAL CONTROLS/ INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
Your Company has established a robust framework of Internal Financial Control whichincludes a combination of Entity level controls Process level controls and IT generalcontrols for ensuring the orderly and efficient conduct of business including adherenceto the Company's policies prevention and detection of frauds and errors accuracy andcompleteness of accounting records and timely preparation of reliable financialdisclosures. In compliance with the provisions of the Companies Act 2013 your Companyhas laid down requisite system of internal controls commensurate with the nature of itsbusiness the size and complexity of its operations. These are designed to providereasonable assurance with regard to recording and providing reliable financial andoperational information complying with applicable statutes safeguarding assets fromunauthorised use executing transactions with proper authorisation and ensuring complianceof corporate policies. Unit heads are responsible to ensure compliance with the policiesand procedures laid down by the management. The Internal Control Systems are beingperiodically reviewed and updated with new / revised standard operating procedures inorder to align the same with the changing business environment. To further strengthen theInternal Financial Controls your Company uses a state-of-the-art enterprise resourceplanning (ERP) system as a business enabler to inter-alia record data for accountingconsolidation and management information purposes and connects to different locations forefficient exchange of information. This system has inbuilt transactional controls tieredapproval mechanisms and maintenance of supporting records. Standard operating procedureshave been laid down to guide the operations of the business. Robust and continuousinternal monitoring mechanisms and review processes ensure that such systems arereinforced on an ongoing basis. Such controls have been tested during the year and noreportable material weakness or significant deficiencies in the design or operation ofinternal financial controls was observed. The internal control systems of your Company aremonitored and evaluated by an external consultant and their audit reports are periodicallyreviewed by the Audit Committee which suggests improvements thereto. It also regularlyreviews the budgetary control system of the Company as well as system for cost controlfinancial controls accounting controls physical verification controls etc. to assessthe adequacy and effectiveness of the internal control systems. Regular review of theestablished internal controls system of the Company were undertaken and deficiencies inthe design or operation of such control if any was discussed with the Auditors and theAudit Committee and suitable actions to rectify those deficiencies were recommended forimplementation. Your Board is of the opinion that the Internal Financial Controlsaffecting the Financial Statements of your Company for the Financial Year ended 31stMarch 2020 were adequate and are operating effectively.
Your Directors understand that Performance evaluation is a key to identify areas forpotential adjustment and address the drawbacks that may improve the group dynamics. Theevaluation process improves the leadership teamwork accountability decision-makingcommunication and efficiency of the Board Committees and Directors. In accordance withthe Board Evaluation Policy' of the Company as laid down by the Nomination andRemuneration Committee and adopted by the Board the Independent Directors at theirseparate Meeting held on 3rd February 2020 collectively reviewed theperformance of the non-independent Directors the Board as a whole and that of itsCommittees. At the said Meeting they also reviewed the performance of the Chairman of theCompany after taking into account the views of executive directors and non-executivedirectors and assessed the quality quantity and timeliness of flow of information betweenthe Company's management and the Board.
In accordance with the Board Evaluation Policy' of the Company and based on thecriteria and framework for Performance Evaluation laid down by the Nomination andRemuneration Committee and adopted by the Board the Independent Directors at theirseparate meeting evaluated the performance of Non- Independent Directors the Board as awhole and that of its Committees. Performance of the Chairperson of the Company was alsoevaluated taking into account the views of Executive Directors and Non-ExecutiveDirectors. The Nomination and Remuneration Committee carried out evaluation of performanceof all Independent Directors. The Independent Directors have expressed their satisfactionat the robustness of the evaluation process outcome thereof the Board's freedom toexpress its views on matters transacted at the Meetings and the openness and transparencywith which the Management discusses various subject matters specified on the agenda ofmeetings. They were of the view that the Board and its Committees were functioningproperly under the guidance of the Chairperson of the Board/ respective Committees.Further each Director contributed effectively and demonstrated commitment to their roles.Parameters and process applied for carrying out the evaluation has been discussed indetail in the Corporate Governance Report. The Board at its meeting held on 3rdFebruary 2020 discussed and took on record the performance evaluation carried out by theIndependent Directors and by the Nomination and Remuneration Committee. Thereafter theBoard carried out an evaluation of its own performance and that of its Committees. Theindividual performance of all Directors (including the Independent Directors) was alsocarried out by the entire Board without the presence and participation of the Directorbeing evaluated. Based on the evaluations the performance of the Board its Committeesand Individual Directors (including Independent Directors) was found to be satisfactory.The Board and its Committees had been highly effective in achieving their respectivecharters of monitoring the overall performance of the Company overseeing the performanceof the management and thus overall upholding high standards of corporate governance. Theboard meetings were well run and the members of the Board acted with sufficient diligenceand care.
It was unanimously opined that each of the Directors perform to their optimumcapabilities. Each Director participates constructively in the Meetings of the Board andthe Committees in which they are a member. These meetings witnessed open discussionshealthy debate and constructive contribution by each participant without any fear orfavour. The Directors apply their independent judgement and effectively deploy theirexpertise and knowledge in Board/ Committee proceedings while keeping the interest of allthe Stakeholders at the fore-front. Non- Independent Directors including the Chairman andManaging Directors are insightful and convincing besides having in-depth knowledge of theCompany and the environment in which it operates. The Chairman is responsible forfostering and promoting the integrity of the Board while nurturing a culture where theBoard works harmoniously for the long-term benefit of the Company and all itsstakeholders. The Chairman guides the Board for effective governance structure in theCompany displaying professionalism efficient leadership and decisiveness in hisjudgements.
The Board as a whole is integrated and balanced where diverse views are expressed anddiscussed with each Director bringing to the table knowledge and expertise key to his orher profile. All Directors are participative interactive and communicative. Besides theChairman has abundant knowledge experience skill and understanding of the Board'sfunctioning and conducts the meetings with poise and maturity.
Information is provided to the Board and Committee Members on a continuous basis fortheir review inputs and approval from time to time. The Independent Directors reviewedthe quality content and timeliness of the flow of information between the Management andthe Board and its Committees and unanimously opined that the same is proper adequate andtimely.
The evaluation process endorsed the Board Members' confidence in the ethical standardsof the Company cohesiveness amongst the Board Members constructive relationship betweenthe Board and the Management and the openness of the Management in sharing strategicinformation to enable Board Members to discharge their responsibilities.
COMMITTEES OF BOARD OF DIRECTORS
As on the date of this Report the Board has seven Committees out of which five havebeen mandatorily constituted in compliance with the requirements of Companies Act 2013and Listing Regulations while two non-mandatory Committees have been constituted to assistit in the management of the day-to-day affairs of the Company and to increase the efficacyof governance. The Board has adopted charters setting forth the roles and responsibilitiesof each of the Committees. The Board has constituted following Committees to deal withmatters and to monitor activities falling within their respective terms of reference:-
Nomination and Remuneration Committee
Stakeholders Relationship Committee
Risk Management Committee
Corporate Social Responsibility Committee
Share Transfer Committee
Details of composition of the above Committees their terms of reference number ofmeetings held during the year attendance therein and other related aspects are providedin the Corporate Governance Report forming part of the Annual Report. There has been noinstance where the Board has not accepted the recommendations of its Committees.
POLICIES AND CODES
In terms of Section 178 of the Companies Act 2013 your Company has adopted aRemuneration Policy' providing a framework for appointment and remuneration ofDirectors Key Managerial Personnel and Senior Management Personnel together with criteriafor determining qualifications positive attributes and independence of a Director. Interms of the proviso to Section 178 (4) of the Companies Act 2013 the Company'sRemuneration Policy is available on it's website athttps://www.centuryply.com/codes-policies/Remuneration-policy.pdf. The same is alsoappended as Annexure 5' to this Report. During the year under review there was nochange in the Company's Remuneration Policy. Your Company's Remuneration Policy isdirected towards providing a well-balanced and performance-related compensation packagetaking into account shareholder interests industry standards and relevant Indiancorporate regulations. Further it aims attract retain and motivate highly qualifiedmembers for the Board and other executive level and ensure their long term sustainability.The Policy is designed to ensure that:
a) the company is able to attract retain and motivate highly qualified members for theBoard and other executive level and ensure their long term sustainability.
b) the company is able to provide a well-balanced and competitive compensation packageto its Executives taking into account their roles and position shareholder interestsindustry standards and relevant regulations.
c) remuneration of the Directors and other Executives are aligned with the businessstrategy and risk tolerance objectives vision values and long-term interests of thecompany.
BOARD DIVERSITY POLICY
Your Company recognizes and embraces the importance of a diverse Board in its successand aims to attract and maintain a Board which has an appropriate mix of diversityskills experience and expertise. The Board composition as on the date of this reportmeets the above objective. Your Company believes that attracting recruiting and retaininga diverse team at the Board level will enhance Company's reputation and will help theCompany in furtherance of its objectives. Your Company has over the years been fortunateto have eminent persons from diverse fields as Directors on its Board. The Companybelieves that a truly diverse Board leverages differences in thought perspectiveknowledge skill regional and industry experience cultural and geographical backgroundage ethnicity and gender that will help the Company retain its competitive advantage. TheCompany has formulated and adopted a Policy on Board Diversity as required underRegulation 19 read with Part D of Schedule II of Listing Regulations. The Board DiversityPolicy adopted by the Company sets out its approach to diversity. This policy aims toaddress the importance of a diverse Board in harnessing the unique and individual skillsand experiences of the members in a way that collectively benefits the organisation andbusiness as a whole. The said Policy makes the Nomination and Remuneration Committee ofthe Company responsible for monitoring and assessing the composition and performance ofthe Board as well as identifying appropriately qualified persons to occupy Boardpositions. The Board Diversity Policy is available on our website at https://www.centuryply.com/codes-policies/Board-Diversity-Policy.pdf.
WHISTLE BLOWER POLICY/ VIGIL MECHANISM
Your Company encourages honesty from and among its Employees by promoting a transparentstructure and effective communication. The Company promotes ethical behaviour in all itsbusiness activities and has put in place a mechanism for reporting illegal or unethicalbehaviour. Your Company promotes zero tolerance towards corruption illegal and unethicalbehaviour and has always been in forefront in encouraging a corruption free ethicalworking environment. To maintain these standards your Company has a well-documentedwhistle blower policy with clear and adequate safeguards against victimization of whistleblowers.
Your Company's Whistle Blower Policy/ Vigil mechanism provides a channel to theEmployees and Directors of the Company to report genuine concerns about unethicalbehaviour actual or suspected incidents of fraud or instances of leakage/ suspectedleakage of unpublished price sensitive information or violation of the Company's Code ofConduct and/ or the Insider Trading Code adopted by the Company that could adverselyimpact the Company's operations business performance and reputation that could adverselyimpact the Company's operations business performance and / or reputation. Further thePolicy provides complete confidentiality of the matter so that no unfair treatment ismeted out to the Whistle Blower for reporting any concern. The Policy provides that theVigilance and Ethics Officer of the Company investigates such incidents when reported inan impartial manner and takes appropriate action to ensure that requisite standards ofprofessional and ethical conduct are always upheld. The Audit Committee oversees theimplementation of the Whistle Blower Policy which provides for direct access to theChairman/ CEO/ Chairman of the Audit Committee in exceptional cases. The saidpolicy has been posted on the Company's website at:https://www.centuryply.com/codes-policies/Vigil-Mechanism-Policy-CPIL.pdf. During theFinancial Year ended 31st March 2020 no case was reported under this policy.Further no employee or Director was denied access to the Audit Committee or its Chairman.
RISK MANAGEMENT POLICY
Your Company has a comprehensive risk management framework in place and a robustorganizational structure for managing and reporting risks. Your Company is conscious thathow better risk management techniques may provide early signals of probable threats to theCompany so that they may be addressed in time. Your Company has a dedicated RiskManagement Committee to implement monitor and review the risk management plan. Riskmanagement process has been established across your Company and is designed to identifyassess and frame a response to threats that may affect achievement of its objectives. TheAudit Committee has additional oversight in the area of financial risks and controls. Therisk management process begins with identification of risks analysing the risk factorsmaking assessment of the same and thereafter formulation of processes to mitigate thesame.
The Board of Directors of your Company has framed and adopted a policy on RiskManagement to minimise the adverse consequence of risks on business objectives of theCompany. The Board is kept informed about the risk assessment and minimization procedures.The risk management framework is reviewed periodically by the Board and the AuditCommittee.
The development and implementation of Risk Management Policy has been covered in theManagement Discussion and Analysis which forms part of this report. In the opinion of theBoard the Company is not faced with any material risks that may threaten the existence ofthe Company.
POLICY ON PREVENTION OF SEXUAL HARASSMENT
Your Company is committed to provide a safe and secure workplace to all women therebypromoting gender-equality and socioeconomic development of the Country. Your Companyfirmly believes in providing a safe supportive and friendly workplace environment a workplace where our values come to life through underlying behaviour. Positive workplaceenvironment and a great employee experience are integral parts of our culture. YourCompany believes in providing and ensuring a workplace free from harassment andgender-based discrimination. The Company is an equal opportunity provider and continuouslystrives to build a work culture which promotes the respect and dignity of all employeesacross the Organization. In accordance with the provisions of the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 and Rules framedthereunder the Company has formulated a well-defined policy on prevention prohibitionand redressal of complaints relating to sexual harassment of women at the workplace. ThePolicy intends to provide a sense of security at the workplace which in turn improveswomen's participation in work resulting in their economic empowerment and inclusivegrowth. The Policy serves as a guide for employees to report sexual harassment cases atworkplace and our process ensures complete anonymity and confidentiality of information.The said Policy is available on your Company's website www.centuryply.com. Your Companyhas a robust mechanism in place to redress complaints reported under it. There is anInternal Complaints Committee (ICC) comprising of internal members and an external memberwho is a social worker working extensively towards women's empowerment. Adequateworkshops and awareness programme against sexual harassment are conducted across theorganization. Aggrieved woman may report complaints to the ICC formed for this purpose orto any member thereof or to the location head who is also a member of the ICC. During theyear no complaint regarding sexual harassment was received by the said Committee.
DIVIDEND DISTRIBUTION POLICY
Your Company is deeply committed to driving superior value creation for all itsstakeholders. It continuously focuses on sustainable returns through an appropriatecapital strategy for both medium term and longer term value creation.
In terms of Regulation 43A of the Listing Regulations your Company being one of thetop five hundred listed Company (based on market capitalisation) has formulated andadopted a progressive and dynamic Dividend Distribution Policy ensuring the immediate aswell as long term needs of the business. The same has been appended as Annexure 6'to this Report and is also available on the Company's website at:https://www.centuryply.com/codes-policies/ CPIL-Dividend-Distribution-Policy.pdf.
The objective of this Policy is to establish the parameters to be considered by theBoard of Directors of the Company before declaring or recommending dividend. The Policyacts as a guiding tool for the Board of Directors in arriving at a decision whether todistribute or retain its profits in the best interest of the shareholders. Through thispolicy the Company aims to maintain a consistent approach to dividend pay-out plans. ThePolicy lays down the principles and criteria to be considered by the Company whileascertaining the amount of dividend to be declared whilst maintaining a balance betweenthe payout ratio and retained earnings in order to address future needs of the Company.The intent of the Policy is to broadly specify the external and internal factors includingfinancial parameters that shall be considered while declaring dividend and thecircumstances under which the shareholders of the Company may or may not expect dividendand how the retained earnings shall be utilized etc.
POLICY FOR DETERMINING MATERIALITY OF EVENTS/ INFORMATION
In line with requirements under Regulation 30 of the Listing Regulations the Companyhas framed a Policy for determination of materiality of events/ information duly approvedby the Board of Directors and the same is available on the Company's website athttps://www.centuryply.com/codes-policies/CPIL's-Policy-for-Determination-of-Materiality.pdf.The Policy endeavours to promote transparency and ensures that the stakeholders areinformed regarding the major and material events of the Company. The objective of thispolicy is to have uniform disclosure practices and ensure timely adequate and accuratedisclosure of information on an ongoing basis.
Policy on Materiality of and dealing with Related Party Transactions Policy forPreservation of Documents Archival Policy and Anti-Bribery and Anti- Corruption Policyare some of the other policies formulated and adopted by the Board pursuant to therequirement of Listing Regulations. These policies may be accessed on the Company'swebsite www.centuryply.com.
CODE OF CONDUCT
In compliance with the provisions of Regulation 17(5) of the Listing Regulations yourCompany has in place a Code of Conduct for Directors and Senior ManagementPersonnel' incorporating therein the duties of Directors as laid down in the CompaniesAct 2013. It reflects the Company's underlying ethical values and commitment to laystandards of integrity transparency fairness accountability and pursuit for excellence.The Code intends to enhance integrity ethics & transparency in governance of theCompany and thereby reinforce the trust and confidence reposed in the Management of theCompany by the shareholders and other stakeholder. The Code has been displayed on theCompany's website www.centuryply. com and details thereof has also been included in theCorporate Governance Report forming part of the Annual Report. The Board of Directors andSenior Management of the Company have affirmed compliance with the Code.
CODE OF CONDUCT TO REGULATE MONITOR AND REPORT TRADING BY DESIGNATED PERSONS AND CODEOF PRACTICES AND PROCEDURES FOR FAIR DISCLOSURE OF UNPUBLISHED PRICE SENSITIVE INFORMATION
As per the provisions of SEBI (Prohibition of Insider Trading) Regulations 2015 asamended your Company has adopted a Code of Conduct to regulate monitor and reporttrading by Designated Persons'. This Code is applicable to all the Promoters Directorsand such other persons defined as designated persons and to their immediate relatives aswell. The key object of the Code is to promote transparency and fairness in dealings of inthe securities of the Company and in furtherance thereof the code lays down guidelineswhich advise on procedures to be followed and disclosures to be made while dealing inshares of the Company and cautions on the consequences of non-compliances. The Codeprohibits and deters the Directors of the Company and other specified employees and theirrelatives from dealing in the securities of the Company on the basis of any unpublishedprice sensitive information available to them by virtue of their position in the Company.The Code is available on the website of the Company www.centuryply.com. The CompanySecretary of the Company acts as the Compliance Officer for the purpose of the aforesaidCode to inter-alia monitor the adherence of PIT Regulations. Your Company has adopted aCode of Practices and Procedures for Fair Disclosure of Unpublished Price SensitiveInformation. This Code lays down principles and practices to be followed by the Companywith respect to adequate and timely disclosure of unpublished price sensitive information.The Designated Persons of the Company have provided annual disclosure of theirshareholding & other information in the format prescribed in the Code.
CORPORATE SOCIAL RESPONSIBILITY
Your Company is known for its tradition of philanthropy and community service. YourCompany has been taking several initiatives under Corporate Social Responsibility(CSR') for society at large well before it was prescribed through the CompaniesAct 2013. The Company has always earmarked a part of its income for carrying out itssocial responsibilities. Your Company believes that social responsibility is not just acorporate obligation that has to be carried out but it is more of a social and moralobligation. Your Company's CSR initiative aims at addressing social environmental andeconomic needs of the marginalised/ underprivileged sections of the society. In compliancewith Section 135 of the Companies Act 2013 read with Schedule VII thereof the Companyhas undertaken CSR activities projects and programs as provided in its CSR policyprimarily in the field of education healthcare environment sustainability and securingsustainable livelihoods while also pursuing CSR activities for the benefit of the localcommunity in the States in which it operates.
During the year the total CSR expenditure incurred by your Company was H4.45 crorewhich was higher than that statutorily required to be spent. Composition of CSR Committeeof your Company attendance at the said Meeting terms of reference of the CSR Committeeand other relevant details has been provided in the Corporate Governance Report formingpart of the Annual Report. The CSR Committee has confirmed that the implementation andmonitoring of CSR Policy is in conformity with CSR objectives and policy of the Companyand in compliance with Section 135 of the Companies Act 2013. Your Company's Policy onCorporate Social Responsibility can be accessed on the Company's website athttps://www.centuryply.com/ codes-policies/Policy-on-Corporate-Social-Responsibility.pdf.In terms of the requirements of Companies (Corporate Social Responsibility Policy) Rules2014 the Annual Report on CSR and the initiatives undertaken by the Company on CSRactivities during the Financial Year 2019-20 is appended hereto as Annexure 7' tothis Report.
The Company being one of the top 1000 companies in the Country in terms of marketcapitalization has drawn up its Business Responsibility Report as required underRegulation 34(2)(f) of the Listing Regulations. The Report is appended as Annexure8' to this Annual Report mapping the sustainability performance of your Companyagainst the reporting framework suggested by SEBI. The Report describes the initiativestaken by the Company from an environmental social and governance perspective to enableMembers to take well-informed decisions and to have a better understanding of theCompany's long term perspective. The Report also touches upon aspects such asOrganisation's strategy governance framework performance and prospects of value creationfor its stakeholders.
At Centuryply we are committed to enhance value for its stakeholders together witheconomic and social well-being of the society and minimising the direct and indirectadverse impact of its operations on the environment. Your Company as a responsiblecorporate citizen recognizes that ethical conduct in all its functions and processes isthe cornerstone of a responsible business. Accordingly your Company has adopted variousCodes and Policies to discharge its social environmental and economic responsibilities.The Business Responsibility Policy adopted by your Company focuses on developing andintegrating a detailed sustainability vision into its long-term strategic plan in a waythat creates lasting value for its stakeholders whilst also building public trust. This ispremised on striking a proper balance between economic social and environmentalperformance in dealings with various stakeholders thereby ensuring sustainabledevelopment for the Company.
An extract of Annual Return as on the Financial Year ended 31st March 2020in Form No. MGT-9 as required under Section 92(3) of the Companies Act 2013 read withRule 12(1) of the Companies (Management and Administration) Rules 2014 is set out asAnnexure- 9' to the Board's Report. Further in terms of Section 134(3)(a) of theCompanies Act 2013 the Annual Return of the Company has been placed on the Company'swebsite and can be accessed at https://www.centuryply.com/investor-information/cpil-annual-return/MGT-7.pdf.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS / COURTS / TRIBUNALS
During the year under review there were no significant and material orders passed bythe Regulators or Courts or Tribunals impacting the going concern status and futureoperations of your Company. .
COMPLIANCE WITH SECRETARIAL STANDARDS AND INDIAN ACCOUNTING STANDARDS
The Board of Directors affirms that during the Financial Year 2019-20 the Company hascomplied with the applicable Secretarial Standards issued by the Institute of CompanySecretaries of India and approved by the Central Government under Section 118(10) of theCompanies Act 2013. In the preparation of the Financial Statements the Company has alsoapplied the Indian Accounting Standards (Ind AS) specified under Section 133 of theCompanies Act 2013 read with Companies (Indian Accounting Standards) Rules 2015.
During the year under review ICRA Limited has reaffirmed [ICRA] A1+ (pronounced ICRA Aone plus) rating for the Company in respect of short term credit facilities. The rating ofA1+ indicates very strong degree of safety regarding timely payment of financialobligations and carries the lowest credit risk.
The long term credit rating of the Company was affirmed/ assigned as "AA-"(pronounced ICRA double A minus). The rating of AA indicates high degree of safetyregarding timely servicing of financial obligations and very low credit risk. The outlookon the long-term rating has been revised from Stable to Positive. A Positive'outlook indicates an expected upgrade in the credit ratings in the medium term on accountof expected positive impact on the credit risk profile of the entity in the medium term.
ICRA has also reaffirmed [ICRA] A1+ (pronounced ICRA A one plus) rating for CommercialPaper (CP) programme of the Company.
GREEN INITIATIVES IN CORPORATE GOVERNANCE
In furtherance to the "Green Initiative in the Corporate Governance"undertaken by the Ministry of Corporate Affairs Government of India allowing paperlesscompliances by the Companies your Company is sending notices Annual Report and othercommunications through email to Members whose email IDs are registered with the Company/Depository Participant(s). Members requiring physical copies can send a request to theCompany. For Members who have not yet registered their email addresses physical copiesare sent through permitted mode. Shareholders who have not yet registered their e-mailaddresses are requested to register the same for receiving all communication includingAnnual Report Notices Circulars etc. from the Company electronically. Those holdingshares in demat form can register their e-mail address with their concerned DPs.Shareholders who hold shares in physical form are requested to register their e-mailaddresses with the RTA by sending a letter duly signed by the first/ sole holder quotingdetails of Folio number.
HUMAN RESOURCE DEVELOPMENT & INDUSTRIAL RELATIONS
Human resource has always been one of the most valued stakeholders for your Company.The Company is committed towards creating and maintaining an ideal work culture forengaged and capable workforce to deliver for the future. Our people practices have alwaysbeen centered around employee welfare and wellness creating an environment ofcollaboration and connect which has aided us to achieve industrial harmony since beginningof our operations.
The Company continuously invests in training and development to develop people to theirmaximum potential and to generate leadership. Focus on training and development continuedthrough a combination of functional technical and behavioural training programs. Duringthe year the Company maintained and enjoyed harmonious industrial relations at alllevels. The enthusiasm and unstinting efforts of the employees have enabled your Companyto remain at the forefront of the Industry. The Management has been focusing ondigitalisation since past few years. During the year under review the role ofdigitalization in providing a rich employee experience has been immense. The Companylaunched and moved to Adrenalin' a cloud-based HR portal which would facilitateend-to-end HR functioning including payroll and appraisals and with capabilities of beingintegrated seamlessly with the Company's present ERP system and accessibility throughmobile application. The Company's intranet portal centurion' continues to serve asan interactive platform bringing employees together and closer to the management besideskeeping them informed of the happenings in the Company. The Company aims to offer modernemployment conditions that ensure healthy long-term employability and are responsive tothe needs of both current and future employees. Your Company has been proactive inproviding its work-force with a right mix of challenges and opportunities learningplatforms and leading positions safe workplace and egalitarian work culture along withprofessional growth and personal development. Long-service award are being organised torecognize the loyalty and commitment of employees. Performance recognition throughinitiatives like representation on the Company's monthly merit board SarvadaSarvottam Ambassadors' and Star Centurion' are also being carried out on a regularbasis. All these initiatives coupled with quick grievance resolution mechanisms haveenabled the Company to create a highly motivated pool of professionals and skilledworkforce that share a passion and vision of the Company.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
In terms of Section 134(3)(m) of the Companies Act 2013 read with Rule 8(3) of theCompanies (Accounts) Rules 2014 information on conservation of energy technologyabsorption and foreign exchange earnings and outgo are provided in Annexure 10'hereto and forms a part of this Report.
INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Sections 124 and 125 of the Companies Act 2013 read withRules made thereunder any money transferred to the Unpaid Dividend Account of a Companywhich remains unpaid/ unclaimed for a period of seven years from the date of such transfershall be transferred by the Company along with interest accrued (if any) thereon toInvestors Education & Protection Fund' (IEPF) constituted by the CentralGovernment. Members are requested to note that dividends for the Financial Year 2012-13onwards if remaining unclaimed for 7 years will be transferred by the Company to IEPF onrespective due dates. Shareholders who have not claimed the dividend for this period arerequested to lodge their claim with the Company. The Company regularly sends reminderletters through electronic and/or physical means to all those shareholders whose dividendare lying unclaimed for any year/(s) during the last seven years requesting them to claimtheir dividend amounts.
Pursuant to Section 124(6) of the Companies Act 2013 read with Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 (IEPFRules') all shares on which dividend has not been paid or claimed for seven consecutiveyears or more are required to be transferred to IEPF. Accordingly as on date yourCompany has transferred 77671shares (on which dividend remained unpaid or claimed forseven consecutive years or more) held by 341 shareholders to the demat account of IEPFauthority.
In accordance with the provisions of Investor Education and Protection Fund(Accounting Audit Transfer and Refund) Rules 2016 the Company has also placed on itswebsite www.centuryply. com the information on dividends which remain unclaimed with theCompany as on 4th September 2019 i.e. the date of last Annual GeneralMeeting. The information is also available on the website of the Ministry of CorporateAffairs.
ANNEXURES FORMING PART OF THIS REPORT OF THE DIRECTORS
The Annexures referred to in this Report containing information required to bedisclosed are annexed as under:
1 Statement containing salient features of the financial statements of subsidiaries/associate companies/ joint ventures
2 Details of Loans Guarantees and Investments
3 Secretarial Audit Report
4 Particulars of Employees and Managerial Remuneration
5 Remuneration Policy
6 Dividend Distribution Policy
7 Report on Corporate Social Responsibility
8 Business Responsibility Report
9 Extract of Annual Return
10 Particulars of conservation of energy technology absorption and foreign exchangeearnings and outgo
APPRECIATIONS AND ACKNOWLEDGEMENTS
Your Directors wish to place on record their appreciation for the co-operation andsupport given to the Company by its customers vendors dealers business associatesconsultants bankers financial institutions auditors solicitors and other stakeholdersduring the year.
The Directors are also grateful to the diligent efforts made by the Employees atvarious levels of the organization without whose unswerving efforts it would not havebeen possible to realise new performance milestones and achieve organisational goals.
The Board would also like to thank the Government and concerned Government departmentsSecurities and Exchange Board of India BSE Ltd. National Stock Exchange of India Ltd.and other Regulatory bodies for their unstinted support provided to the Company.
The trust and confidence reposed by the customers in the Company and its products isespecially cherished. Your Directors also wish to express their profound gratitude to eachof the Shareholder for its support extended to the Company from time to time. YourDirectors look forward to your continued support.
|Kolkata 26th June 2020 ||For and on behalf of the Board of Directors |
| ||Sajjan Bhajanka |
| ||(DIN: 00246043) |
| ||Chairman & Managing Director |