We have pleasure in presenting the 122nd Annual Report of the Company along with theaudited statement of accounts for the year ended 31st March 2019. The overallprofitability for the financial year 2018-19 has considerably improved as compared to thelast year after charging all expenses interest costs etc.
The summarised financial results are given below.
1. SUMMARISED FINANCIAL RESULTS:
| || || |
(Rs. in Crores)
|Particulars ||Consolidated ||Standalone |
| ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
|Earnings before finance cost tax depreciation and amortisation (EBITDA) ||1047.79 ||851.18 ||1060.19 ||851.18 |
|Less: Finance Cost ||95.89 ||211.81 ||95.89 ||211.81 |
|Profit after Finance Cost ||951.90 ||639.37 ||964.30 ||639.37 |
|Less: Depreciation ||193.00 ||199.31 ||193.00 ||199.31 |
|Profit before tax ||758.90 ||440.06 ||771.30 ||440.06 |
|Less: Deferred Tax Debit ||264.30 ||160.56 ||264.30 ||160.56 |
|Profit after tax from continuing operations ||494.60 ||279.50 ||507.00 ||279.50 |
|Add: Profit after tax from discontinued operations ||174.07 ||92.16 ||174.07 ||92.16 |
|Net Profit for the year ||668.67 ||371.66 ||681.07 ||371.66 |
|Other Comprehensive Income ||6.32 ||3.27 ||6.32 ||3.27 |
|Total Comprehensive Income for the year ||674.99 ||374.93 ||687.39 ||374.93 |
|Retained Earnings || || || || |
|Balance brought forward ||369.74 ||129.18 ||369.74 ||129.18 |
|Total comprehensive Income for the year ||674.99 ||374.93 ||687.39 ||374.93 |
|Equity Dividend ||(72.60) ||(61.43) ||(72.60) ||(61.43) |
|Tax on equity dividend ||(14.92) ||(12.52) ||(14.92) ||(12.52) |
|Transfer to Debenture Redemption Reserve ||(60.42) ||(60.42) ||(60.42) ||(60.42) |
|Balance carried forward ||896.79 ||369.74 ||909.19 ||369.74 |
The performance of each business segment of the Company has been comprehensivelydiscussed in the Management Discussion and Analysis Report (forming part of the AnnualReport) based on the reports of the Senior President/CEO of each of the units of theCompany.
The Board of Directors has recommended a dividend of 75% i.e. Rs 7.50 (Rupees seven andpaise fifty) per share of the face value of Rs 10/- each for the approval of theshareholders. Last year the dividend was paid @ 65%. This dividend will be paid whendeclared by the shareholders in accordance with law. The Company will have to paydividend distribution tax plus applicable surcharge education cess and/or any other cessapplicable on the dividend distribution tax at the time of declaration and payment ofdividend.
3. TRANSFER TO RESERVES:
Your Company proposes to transfer Rs 60.42 crore to the Debenture Redemption Reservesout of retained earnings.
4. SHARE CAPITAL:
The Company's paid up equity Share Capital continues to stand at Rs 111.69 crore as on31st March 2019. During the year the Company has not issued any Shares or ConvertibleSecurities.
The total exports of the Company amounted to Rs 508 crore (Previous year Rs 510 crore)representing about 6 percent of the gross sales.
6. CREDIT RATING:
CRISIL has given a credit rating of CRISIL AA' for long term and CRISIL A1+ forshort term financial instruments of the Company. This reaffirms the high reputation andtrust the Company has earned for its sound financial management and its ability to meetfinancial obligations.
7 (a) Demerger of Cement Divisions:
As you are aware the Board of Directors of the Company at its meeting held on 20thMay 2018 had approved a Scheme of demerger between the Company UltraTech Cement Ltd.(UltraTech) and their Shareholders & Creditors ("Scheme") for the demergerof its Cement Divisions and its merger into UltraTech. Further the shareholders of theCompany at the meeting of the Shareholders held on 24th October 2018 convenedas per the directions of the National Compnay Law Tribunal Mumbai (NCLT) have alsoapproved the aforesaid Scheme of demerger of its Cement Divisions. Accordingly theshareholders of the Company will get 1 (one) new equity share of UltraTech for every 8(eight) equity shares held in the Company. After this demerger the Company will havethree Divisions (Textiles Pulp & Paper and Real Estates) and the Cement Divisionswill be demerged along with associated liabilities including debt of around ` 3000 crore.The matter of demerger is with National Company Law Tribunal at Mumbai and it is expectedthat the full process of demerger will be completed by the first quarter of the financialyear 2019-20.
This transaction aims at deleveraging Company's Balance Sheet and creating anopportunity for its new phase of growth in the remaining businesses with a primary focuson real estate. It also achieves unlocking of the value of the Cement Divisions to itsshareholders through issuance of equity shares of UltraTech directly to the shareholdersof the Company. UltraTech is the largest and one of the most valuable cement manufacturersand suppliers in India and the shareholders of the Company will continue to have anexposure to cement through their equity shareholding in UltraTech.
(b) Century Yarn and Century Denim:
During the financial year 2017-18 the Company had recognized the sale of its Yarn andDenim units (Y&D units) (included in textile segment). Pursuant to the objectionsraised in the Court against the transaction by the workers of the Y&D units duringthe year the Company has terminated the Business Transfer Agreement and has taken backpossession of the Y&D units. The Company is exploring various alternatives fordisposal of the units. Accordingly the assets and liabilities of the Y&D units areclassified as assets held for disposal and the operations have been classified asdiscontinued operations.
8. EXPANSION & MODERNISATION:
(a) Pulp and Paper:
The Company has undertaken a project to expand the Prime Grade Tissue Paper Plantcapacity from 100 tonnes per day to 200 tonnes per day with an Anchor GSM of 19 grams at atotal capital outlay of ` 100 crores at the existing Pulp and Paper Plant at LalkuaDistrict Nainital Uttarakhand. The project is expected to be commissioned and operationalin the 2nd quarter of FY 21.
(b) Modernization & Technological upgradation programmes continue at all theunits of the Company to maintain competitiveness and achieve better quality. Stringentcost control measures remain in place in all possible areas and are regularly reviewed.Special emphasis is being given to water and energy conservation.
(a) The Directors express their profound grief at the sad demise of Shri D.K.Agrawal (DIN: 00040123) their esteemed erstwhile colleague who was President (CorporateAffairs) and Whole-time Director of the Company on 24th August 2018 and place on recordtheir deep sense of appreciation for the invaluable services rendered by him during hisassociation as Senior Executive and Whole-time Director of the Company.
(b) (i) Shri B. K. Birla (DIN: 00055856) who has attained the age of 75(Seventy five) years continues to be a Director of the Company with effect from 1st April2019 till he retires by rotation.
(ii) Shri P. K. Daga (DIN: 00040692) who has attained the age of 75 (Seventy five)years continues to be an Independent Director of the Company with effect from 1st April2019 till the completion of his present term i.e. upto 24th July 2019.
(c) Shri R.K. Dalmia (DIN: 00040951) Senior President Textile Divisions of theCompany has been appointed as a Whole-time Director of the Company with effect from 15thSeptember 2018. A suitable resolution in this behalf is being proposed at the forthcomingAnnual General Meeting of the Company for the approval of the Members for his appointmentas a Whole-time Director of the Company.
(d) Pursuant to the provisions of Section 149 of the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) (Amendment) Regulations 2018 Ms.Preeti Vyas (DIN: 02352395) an entrepreneur in the field of Design and CommunicationConsultancy and having rich business experience has been appointed as an IndependentDirector on the Board of the Company for a term of five consecutive years from 1st April2019 till 31st March 2024 subject to the approval of the Members. The advantage of hervast experience will be available for the benefit of the Company. The requisite resolutionfor approving the appointment of Ms. Preeti Vyas as an Independent Director of the Companyis being placed before the Members at the ensuing 122nd Annual General Meeting of theCompany.
(e) Shri Yazdi P. Dandiwala (DIN: 01055000) and Shri Rajan A. Dalal (DIN:00546264) will complete their first term of appointment on 24th July 2019 as IndependentDirectors and they have been re-appointed on the recommendation of Nomination &Remuneration Committee for another term of five consecutive years by the Board with effectfrom 25th July 2019 subject to the approval of the members by Special Resolution. ShriSohanlal K. Jain (DIN: 02843676) will complete his first term of appointment on 30thOctober 2019 as an Independent Director and he has been re-appointed on therecommendation of Nomination & Remuneration Committee for another term of fiveconsecutive years by the Board with effect from 31st October 2019 subject to the approvalof the Members by Special Resolution. The said Directors have given their consent forre-appointment and have confirmed that they still retain their status as IndependentDirectors and that they do not suffer from any disqualification for re-appointment. Theirre-appointment is based on the evaluation of their performance carried out by the Boardother than the persons evaluated. Approval of the Members by Special Resolution forre-appointment of the aforesaid persons as Independent Directors for a further term offive consecutive years has been sought in the Notice convening the forthcoming AnnualGeneral Meeting of the Company.
Shri Pradip Kumar Daga (DIN: 00040692) will complete his first term of appointment asan Independent Director on 24th July 2019. Shri Pradip Kumar Daga has expressed hisdesire not to continue further as a Director after the end of his present term asmentioned above. The Board places on record its deep sense of appreciation for theinvaluable services being rendered by him as a Director of the Company.
(f) Pursuant to the provisions of Section 152 of the Companies Act 2013 ShriKumar Mangalam Birla (DIN: 00012813) retires by rotation as Director at the ensuingAnnual General Meeting and being eligible offers himself for re-appointment. The Boardrecommends his re-appointment.
(g) Familiarisation Programme for the Independent Directors:
The Company has over the year developed a robust familiarisation process for thenewly appointed Directors with respect to their roles and responsibilities. The processhas been aligned with the requirement under the Companies Act 2013. The process interalia includes providing an overview of the Textile Pulp & Paper Cement and RealEstate Industries the Company's business the risks and opportunities etc.
(h) Board Evaluation:
Pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 (SEBI LODR Regulations) the Board hascarried out an annual performance evaluation of its own performance of the Directorsindividually as well as the evaluation of the working of its Audit Nomination &Remuneration and other Committees of the Board.
At the meeting of the Board all the relevant factors that are material for evaluatingthe performance of individual Directors the Board and its various Committees werediscussed in detail. A structured questionnaire each in line with the circular issued bySEBI for evaluation of the Board its various Committees and individual Directors wasprepared and recommended to the Board by the Nomination & Remuneration Committee fordoing the required evaluation after taking into consideration the inputs received fromthe Directors covering various aspects of the Board's functioning such as adequacy ofthe composition of the Board and its Committees execution and performance of specificduties obligations and governance etc.
A separate exercise was carried out to evaluate the performance of individualDirectors including the Chairman of the Board who were evaluated on parameters such aslevel of engagement and contribution independence of judgement safeguarding the interestof the Company and its minority Shareholders etc. The performance evaluation of theIndependent Directors was carried out by the entire Board excluding the Director beingevaluated. Independent Directors fulfil the criteria of independence and they areindependent of management. The performance evaluation of the Chairman and non-independentDirectors was also carried out by the Independent Directors at their separate meeting. TheDirectors expressed their satisfaction with the evaluation process.
During the year ten Board meetings were convened and held. The details thereof aregiven in the Corporate Governance Report. The intervening gap between the Meetings waswithin the period prescribed under the Companies Act 2013.
10. AWARDS CERTIFICATES PRIZES:
Various Divisions of the Company have received notable awards/certificates as mentionedbelow:-
(a) Century Cement:
First Prize for "Maintenance of Heavy Earth Moving Machinery (HEMM) &Workshop" "Welfare Amenities & Occupational Health & Safety (OHS)Facility" "Crushing & Screening Plant" and "Afforestation"for its limestone mines during annual safety celebration -2018 held under the aegis ofDirectorate General of Mines Safety Bilaspur & Raigarh Region.National Federation ofIndian Mineral Industries (FIMI) - Gem Granites Environment Award 2017-18 for significantcontribution to environment protection & sustainable mining from Hon'ble Minister ofMines Govt. of India.
(b) Maihar Cement:
First Prize for "Overall Performance" "Safety Education""Use of Explosives & Dust Suppression" "House Keeping &Supervision" and "Standard of Working" for its limestone mines in thecategory of fully mechanized mines during "Metalliferous Mines Safety Week 2018"held under the aegis of the Directorate General of Mines Safety Jabalpur Region.
First Prize for "Overall Performance" and "Systematic & ScientificDevelopment" for its limestone mines in the category of fully mechanized mines during"Mines Environment & Mineral Conservation Week 2018-19" from the Khan KhanijPradushan Niyantran Evam Paryavaran Vikas Samiti Jabalpur Region.
First Prize for "Water Positivity" for its limestone mines during "MinesEnvironment & Mineral Conservation Week 2018-19" from the Khan Khanij PradushanNiyantran Evam Paryavaran Vikas Samiti Jabalpur Region.5 Star rating awarded for"Sustainable Development Framework" for its limestone mines during "MinesEnvironment & Mineral Conservation Week 2018-19" from the Khan Khanij PradushanNiyantran Evam Paryavaran Vikas Samiti Jabalpur Region.
Maihar Cement Employees' Provident Fund has received Certificate of Appreciation forBest Performing Exempted Trust 2018 from the Employees' Provident Fund OrganisationMinistry of Labour & Employment Government of India.
(c) Manikgarh Cement:
First Prize for "Overall Performance" "Mines Plan & Records"and "Storage Transport and use of Explosives" for its limestone mines duringthe Metalliferous Opencast Mines Safety Week 2018 under the aegis of the Director Generalof Mines Safety Nagpur.
First Prize for "Mineral Benefication" and "EnvironmentalMonitoring" for its limestone mines during Mines Environment & MineralConservation Week 2018-19 under the aegis of Indian Bureau of Mines Nagpur. GodavariAward for the exemplary work done by Mechanized Mines in the Overall EnvironmentalMonitoring.
(d) Sonar Bangla Cement:
Gold award to our "Sonartari" team for quality circle case study presentationat Chapter Convention on Quality Concept (CCQC) 2018 Durgapur Chapter.
Gold award to our "Eagle" team for 5S case study presentation at the ChapterConvention on Quality Concept (CCQC) 2018 Durgapur Chapter.
Distinguish award to our "Sonartari" team for the quality circle case studypresentation at the National Convention on Quality Concept (NCQC) 2018 held at Gwalior inDecember 2018.
Excellence award to our "Eagle" team for the 5S case study presentation atthe National Convention on Quality Concepts (NCQC) 2018 held at Gwalior in December 2018.
(e) Century Pulp & Paper:
Energy Efficient Unit Award: During the last 4 years consecutively for the fourth timein a row won the Confederation of Indian Industry (CII) National Award for"Excellent Energy Efficient Unit" held in its 19th National level competitionfor "National Energy Management Award - 2018".
National Energy Conservation Award: Awarded First Prize in the Pulp & Paper Sectorby the Bureau of Energy Efficiency Ministry of Power Government of India at the NationalEnergy Conservation Award - 2018.
Export-Import Awards: Recognised for outstanding contribution in Export & Import bythe Container Corporation of India Ltd (CONCOR) in "CONCOR Award - 2018" for1st position in Imports and 2nd position in Exports Segment in the Northern Region.
Agro-Industrial Exhibition Award: In the 104th and 105th "All India Farmers' Fairand Agro-Industrial Exhibition" 2018 and 2019 respectively organised by and held atthe G B Pant University of Agriculture & Technology Pantnagar Uttarakhand theDivision has received First prize. During last fifteen consecutive exhibitions fourteentimes the Century Pulp & Paper Division was adjudged First position.
SRBC & Co. LLP Chartered Accountants (ICAI Firm Registration No. 324982E/E300003)who are the Statutory Auditors of the Company were appointed as the Statutory Auditors fora term of five years at the Annual General Meeting of the Company held on 28th July 2016subject to ratification of their appointment by the Members at every intervening AnnualGeneral Meeting held thereafter. The requirement of seeking ratification of the Membersfor continuance of their appointment has been withdrawn consequent upon changes made bythe Companies (Amendment) Act 2017 and pursuant to resolution passed by the Shareholdersat the 121st Annual General Meeting held on 31st July 2018. Hence the resolution seekingratification of the Members for their appointment is not being placed at the ensuingAnnual General Meeting.
12. AUDITORS' REPORT:
The Auditors' Report to the Shareholders does not contain any reservationqualification or adverse remark.
13. COST AUDITORS AND COST AUDIT REPORT:
Pursuant to Section 148 of the Companies Act 2013 read with The Companies (CostRecords and Audit) Rules 2014 the accounts and records are required to be maintained bythe Company in respect of various manufacturing activities and are required to beaudited. Accordingly such accounts and records are maintained in respect of variousmanufacturing activities. The cost audit report for the financial year 2017-18 was filedwith the Ministry of Corporate Affairs on 27th August 2018.
Your Directors have on the recommendation of the Audit Committee appointed M/s. R.Nanabhoy & Co. Cost Accountants to audit the cost accounts of the Textiles Cementand Pulp & Paper products of the Company for the financial year 2019-20 at aremuneration of Rs 3.01 lac.
As required under the Companies Act 2013 the remuneration payable to the cost auditoris required to be placed before the members in a general meeting for their ratification.Accordingly a resolution seeking the members' ratification for the remuneration payableto M/s. R. Nanabhoy & Co. Cost Auditors in terms of the resolution proposed to bepassed is included in the Notice convening the Annual General Meeting of the Company.
14. SECRETARIAL AUDIT:
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. Gagrani & Gagan Company Secretaries in practice (CP No. 1388) toundertake the Secretarial Audit of the Company for the year ending 31st March 2020. TheSecretarial Audit Report for the year ended 31st March 2019 is annexed herewith as AnnexureI'to this Report. The Company has complied with all applicable Secretarial Standards. TheSecretarial Audit Report does not contain any adverse qualification reservation orremark.
15. FIXED DEPOSITS:
During the year the Company has not accepted any deposits from the public and thereare no outstanding deposits in terms of the Companies (Acceptance of Deposits) Rules2014.
16. LOANS GUARANTEES AND INVESTMENTS:
The details of loans guarantees and investments covered under the provisions ofSection 186 of the Companies Act 2013 are given in the consolidated and standaloneFinancial Statements.
17. DIRECTORS' RESPONSIBILITY STATEMENT:
The Board of Directors acknowledge the responsibility for ensuring compliance with theprovisions of Section 134(3)(c) read with Section 134(5) of the Companies Act 2013 in thepreparation of the annual accounts for the year ended on 31st March 2019 and state that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) the directors had prepared the annual accounts on a going concern basis;
(e) the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
18. KEY MANAGERIAL PERSONNEL:
During the year Shri D.K. Agrawal ceased to be a Whole-time Director of the Companydue to his sad demise on 24th August 2018. Shri R.K. Dalmia has been appointed as aWhole-time Director of the Company with effect from 15th September 2018 and he has ceasedto be Chief Financial Officer of the Company from the said date.
Further Shri Snehal Shah was appointed as Chief Financial Officer of the Company witheffect from 1st October 2018. Shri Atul K. Kedia is the Secretary of the Company.
19. CORPORATE GOVERNANCE:
A separate report on Corporate Governance is enclosed as a part of this Annual Report.A certificate from the Auditors of the Company regarding compliance with the CorporateGovernance norms stipulated is annexed to the Report on Corporate Governance.
20. AUDIT COMMITTEE VIGIL MECHANISM & RISK MANAGEMENT:
The Audit Committee comprises of four members and all members are IndependentDirectors. The Company Secretary is the Secretary of the Committee. All transactions withrelated parties are on an arm's length basis. During the year there are no instanceswhere the Board had not accepted the recommendations of the Audit Committee. The Companyhas in place a vigil mechanism for Directors and Employees to report genuine concernsabout any wrongful and any unethical conduct with respect to the Company or its businessor affairs. This policy covers malpractices misuse or abuse of authority fraudviolation of the Company's policies or Rules manipulations negligence causing danger topublic health and safety misappropriation of monies unethical behaviour and othermatters or activity on account of which the interest of the Company is affected or islikely to be affected and formally reported by whistle blowers. The Policy provides thatall Protected Disclosures can be addressed to the Vigilance and Ethics Officer of theCompany or to the Chairman of the Audit Committee/Whole-time Director in exceptionalcases. All protected disclosures under this policy will be recorded and thoroughlyinvestigated. If an investigation leads the Vigilance and Ethics Officer/Chairman of theAudit Committee to conclude that an improper or unethical act has been committed theVigilance and Ethics Officer/Chairman of the Audit Committee shall recommend to themanagement of the Company to take such disciplinary or corrective action as he may deemfit. The details of the vigil mechanism are also available on the Company's websitewww.centurytextind.com
Your Company has constituted a Risk Management Committee mandated to review the riskmanagement plan/process of the Company. The Risk Management Committee identified potentialrisks and assessed their potential impact with the objective of taking timely action tomitigate the risks.
The Audit Committee has also been delegated with the responsibility of monitoring andreviewing risk management assessment and minimization procedures developingimplementing and monitoring the risk management plan and identifying reviewing andmitigating all elements of risks which the Company may be exposed to.
The key risks identified by the Company include competition cyber security financialrisk and compliance of all applicable statutes and regulations. The Company has welldefined policies/mechanism to mitigate competition cyber security and financial risks.The Company reviews the policies/mechanism periodically to align with the changes inmarket practices and regulations. The Company has in place a data protection Policy.Compliance risks have been mitigated through periodical monitoring and review of theregulatory framework to ensure complete compliance with all applicable statutes andregulations.
21. CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE:
In terms of the provisions of section 135 of the Companies Act 2013 read withCompanies (Corporate Social Responsibility Policy) Rules 2014 the Board of Directors ofyour company has constituted a Corporate Social Responsibility ("CSR")Committee. The composition and terms of reference of the CSR Committee are provided in theCorporate Governance report which forms part of this report.
Your Company has also in place a CSR Policy and the same is available on your Company'swebsite: www.centurytextind. com. During the year your Company has spent Rs 3.18 Crorestowards CSR activities. Your Company reached out to around 85 locations across 6 States.The Company's key objective is to actively contribute to the social and economicdevelopment of the communities in which it operates.
As a socially responsible caring Company we are committed to play a larger role inbuilding a better sustainable way of life for the weaker and marginalised sections of thesociety and raise the country's human development index.
The particulars required to be disclosed pursuant to the Companies (Corporate SocialResponsibility Policy) Rules 2014 are given in Annexure II' forming part ofthis Report.
22. NOMINATION AND REMUNERATION COMMITTEE:
The Nomination and Remuneration Committee comprises of five members of which fourincluding the Chairman of the Committee are Independent Directors.
The salient features of Company's Remuneration Policy is attached as Annexure-III'and forms a part of this Report. The Remuneration Policy is available on the website ofthe Company viz. www.centurytextind.com.
23. RELATED PARTY TRANSACTIONS:
All transactions entered into with related parties as defined under the Companies Act2013 during the financial year were in the ordinary course of business and on an arm'slength pricing basis and do not attract the provisions of Section 188 of the CompaniesAct 2013. There were no materially significant transactions with the related partiesduring the financial year which were in conflict with the interest of the Company andhence enclosing of Form AOC-2 is not required. Suitable disclosure as required by theAccounting Standard (Ind-AS 24) has been made in the notes to the Financial Statements.
All Related Party Transactions are placed before the Audit Committee. Prior omnibusapproval of the Audit Committee is obtained on an yearly basis for the transactions whichare of a foreseen and repetitive nature. The transactions entered into pursuant to theomnibus approval so granted are audited and a statement giving details of all relatedparty transactions is placed before the Audit Committee for its approval on a quarterlybasis. The policy on Related Party Transactions as approved by the Board has been uploadedon the Company's website.
None of the Directors has any pecuniary relationships or transactions vis--vis theCompany.
The Solicitors for the Company M/s. Mulla & Mulla & Craigie Blunt & Caroeprovide the legal services required by the Company from time to time. The transactionswith the said firm are on an arm's length basis and in the ordinary course of business.Shri Yazdi P. Dandiwala one of the Directors of the Company is a Senior Partner in thesaid firm of Solicitors. Ms. Preeti Vyas has been appointed as an Independent Director onthe Board of the Company with effect from 1st April 2019. She had certain transactions inthe past with the Company however she fulfils the conditions specified in the CompaniesAct 2013 and the rules made thereunder as well as those required under the provisions ofSEBI LODR Regulations for her appointment as an Independent Woman Director of the Company.
24. DECLARATION BY INDEPENDENT DIRECTORS:
Necessary declarations have been obtained from all the Independent Directors that theymeet the criteria of independence under sub-section (6) of Section 149 of the CompaniesAct 2013 and as per Regulation 25 read with Regulation 16 of SEBI LODR Regulations.
25. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
As reported in detail in the reports of earlier years a penalty of Rs 274.02 crore waslevied on the Company by the Competition Commission of India (CCI) based on the complaintfiled by the Builders' Association of India for alleged violation of the provisions of theCompetition Act. The National Company Law Appellate Tribunal (NCLAT) vide its judgementdated 25th July 2018 has dismissed the appeal of the Company upholding levy of penaltyof Rs 274.02 crore as imposed by CCI vide its order dated 31st
August 2016. The Company has preferred an appeal before the Hon'ble Supreme Courtagainst the above order of NCLAT. The Hon'ble Supreme Court vide its order dated 5thOctober 2018 has admitted the Company's civil appeal and ordered for continuance of theinterim order passed by NCLAT vide its order dated 7th November 2016 towards stay ofdemand subject to deposit of 10% of penalty amount. The matter is still subjudice.
26. INTERNAL FINANCIAL CONTROL:
The Company has in place adequate internal financial control systems commensurate withthe size scale and complexity of its operations. During the year such controls weretested and no reportable material weakness in the operations was observed. The Company hasappropriate policies and procedures for ensuring the orderly and efficient conduct of itsbusiness including adherence of the Company's policies safeguarding of its assetsprevention and detection of frauds and errors accuracy and completeness of accountingrecords and timely preparation of reliable financial information. During the year underreview the Company has not come across any incidence of fraud. The internal auditormonitors and evaluates the efficacy and adequacy of internal control systems in theCompany. Based on the report of the internal auditor the respective departments undertakecorrective action in their respective areas and thereby strengthen the controls.Significant audit observations and corrective actions thereon are presented to the AuditCommittee of the Board.
27. SUBSIDIARY & ASSOCIATE COMPANIES:
During the year 2018-19 the Company has incorporated a Wholly Owned Subsidiary viz.Birla Century Exports Private Ltd.' for the purpose of conducting distributionbusiness in the USA directly with brands and retailers. In addition to the above BirlaEstates Private Ltd. which was incorporated last year is a Wholly Owned Subsidiary ofthe Company. It has started its operations and is developing Company's land forresidential project viz. Birla Vanya at Kalyan. During the year Birla Estates Private Ltd.Registered a Loss of Rs 12.06 Crores (Previous year Loss of Rs NIL) and Birla CenturyExports Private Ltd. is yet to start its operations.
None of the Subsidiaries mentioned above is a material subsidiary as per the thresholdlimit laid down under the SEBI LODR Regulations.
In view of no business left to undertake the Board of Bander Coal Company PrivateLtd. your Company's associate is in the process of voluntary liquidation which isexpected to be completed shortly.
Industry House Ltd. in which your Company holds about 35% shares is an AssociateCompany. Despite this fact the accounts of Industry House Ltd. have not been consolidatedwith that of the Company as there is no requirement for the same as per the IND-AS 28.
28. CONSOLIDATED FINANCIAL STATEMENT:
The Directors also present the audited consolidated financial statements incorporatingthe duly audited financial statements of the subsidiares as prepared in compliance withthe Companies Act 2013 applicable Accounting Standards and other applicable laws ifany.
A separate statement containing the salient features of its subsidiaries and associatesin the prescribed form AOC-1 is annexed separately.
29. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8(3) of The Companies (Accounts) Rules 2014 is annexed herewith as Annexure-IV'.
30. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:
During the year under review your Company has received one complaint under the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 and thesame was investigeted in accordance with the procedures prescribed and has been disposedoff by taking appropriate action. The Company has also complied with the provisionsrelating to the constitution of an Internal Complaint Committee under the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
31. BUSINESS RESPONSIBILITY REPORTING:
A separate section of Business Responsibility forms part of this Annual Report asrequired under Regulation 34(2)(f) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
32. PARTICULARS OF EMPLOYEES:
The prescribed particulars of employees required under Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are attached as Annexure-V'and forms a part of this Report.
The information required under Section 197(12) of the Companies Act 2013 read withRule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 and forming part of the Directors' Report for the year ended 31st March 2019is given in a separate Annexure to this Report.
The said Annexure is not being sent along with this Report to the Members of theCompany in line with the provisions of Section 136 of the Companies Act 2013. Members whoare interested in obtaining these particulars may write to the Company Secretary at theRegistered Office of the Company. The aforesaid Annexure is also available for inspectionby the Members at the Registered Office of the Company 21 days before the 122nd AnnualGeneral Meeting and up to the date of the said Annual General Meeting during the businesshours on working days.
None of the employees listed in the said Annexure is a relative of any Director of theCompany. None of the employees hold (by himself or along with his/her spouse and dependentchildren) more than two percent of the equity shares of the Company.
33. EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in Form MGT-9 as requiredunder Section 92 of the Act is annexed as Annexure VI which forms an integral partof this Report and is also available on the Company's website viz. www.centurytextind.com.
Your Directors thank the various Central and State Government DepartmentsOrganizations and Agencies for the continued help and co-operation extended by them. TheDirectors also gratefully acknowledge all stakeholders of the Company viz. customersmembers dealers vendors banks and other business partners for the excellent supportreceived from them during the year. The Directors place on record their sincereappreciation to all employees of the Company for their unstinted commitment and continuedcontribution to the Company's well-being.
|Registered Office: ||On behalf of the Board || |
|Century Bhavan || || |
|Dr. Annie Besant Road || || |
|Worli Mumbai 400 030 ||R.K. DALMIA ||Y.P. DANDIWALA |
| ||Whole-time Director ||Director |
|Dated: 3rd May 2019 ||DIN: 00040951 ||DIN: 01055000 |