Mar 31, 2018
Dear Members,
The are pleased to present the 30th Annual Report on the business and operations of your company along with audited financial statements, for the financial year ended March 31, 2018.
OVERVIEW OF COMPANYâS FINANCIAL AND OPERATIONAL PERFORMANCE
The Company has reported a sales turnover of Rs. 24273 lacs as against Rs. 20218 lacs in the previous financial year, recording increase of about 20.06%. The increase in sales turnover of 20.06% from previous year to this year due to the optimum utilization of production capacity, which resulting the increase in production throughout the year of the financial year 2017-18.
The Profit after Tax (PAT) for the financial year is Rs. 371 lacs as against profit of Rs. 135 lacs reflecting increase of about 174.81% in the financial performance of the Company.
(Rs. in Lacs, except per share data)
Particulars |
March 31, 2018 |
March 31, 2017 |
|
Revenue from operation (Gross) and other Income |
24,528 |
20,410 |
|
Profit before Tax |
436 |
147 |
|
Exceptional Items |
- |
6 |
|
Tax Expenses |
65 |
6 |
|
PAT |
371 |
135 |
|
Other Comprehensive Income/(Loss) for the year |
(07) |
3 |
|
Total Income for the year |
364 |
138 |
DIVIDEND AND RESERVE
In view of meeting the capital requirement of the Company through ploughing back of profit in the business, the Directors of your Company are intending the surplus profit in the business itself. Therefore, no dividend is being recommended by the Board of Directors of the Company.
As there in no statutory obligation for the Company to transfer a certain portion of its distributable profits for the year to General Reserve, the entire profits is proposed to be retained in the Statement of Profit and Loss.
SHARE CAPITAL
The Company has not issued and allotted any shares during the financial year ended 31 March, 2018. As on 31st March, 2018, the Authorised share capital of your Company stood at Rs. 12,00,00,000/- (Rupees Twelve Crores Only), comprising of 12,00,00,000 (Twelve Crores) number of Equity shares of Rs. 1/- each fully paid up. However the issued, subscribed and paid up share capital of your Company stood at Rs. 8,00,00,000/- (Rupees Eight Crores Only) comprising of 8,00,00,000 (Eight Crores) number of Equity shares of Rs.1/- each fully paid up.
HUMAN RESOURCE AND INDUSTRIAL RELATIONS
Through the year, your Company is recognized in the Aluminum Industry for the wealth of its human capital which is asset of the Company. Human resource management at the Company goes beyond the set of boundaries of compensation, performance reviews and development. The Company is focused on building a high performance culture with a growth mindset where employee are engaged and empowered to excel.
We are well focused to maintain positive workplace environment, which provides long lasting and fruitful career to our employee.
Our Company believes that targets of the Company can only be reached with efforts from all its employees called Century team. Our Company recognizes that job satisfaction requires congenial work environment that promotes motivation among employees and therefore results in enhanced productivity, and innovation and also provide avenues for employee training and development to identify their potential and develop their careers in the Company.
CORPORATE GOVERNANCE
The Company has complied with the Corporate Governance Code as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate section on Report on Corporate Governance, along with certificate from the auditors confirming the compliance of conditions of Corporate Governance, is annexed as Annexure-1, and forms part of the Annual Report.
BOARD MEETING
The Board met four times i.e. on 25.05.2017, 11.09.2017, 12.12.2017 and 12.02.2018 during the financial year 2017-18. However, the details are also given in the Corporate Governance Report that forms a part of the annual report.
DIRECTORS & KEY MANAGERIAL PERSONNEL
Under the Chairmanship of Shri Vikram Jhunjhunwala, the Company has an appropriate mix of Executive, Non-Executive and Independent Directors to maintain the independence of the Board and separate its functions of governance and management. Presently, the Board consists of five members which include Non Executive, Independent and Woman Director. The Number of Non-Executive Directors is more than fifty percent of total number of directors.
During the year, there was no changes occurred in composition of Board of Directors of the Company.
The Key Managerial Personnel appointed/ceased during the year are as under:
Sl No. |
Name |
Designation |
Date of Appointment |
Date of Cessation |
1 |
Mr. Vishal Sharma |
Company Secretary |
01-09-2016 |
31-12-2017 |
POLICY ON DIRECTORSâ APPOINTMENT AND REMUNERATION
The Company being a listed Company, Policy on Directorsâ appointment is to follow the criteria as laid down under the Companies Act, 2013 and the Listing Agreement with Stock Exchanges and good corporate governance practices. Emphasis is given to persons from diverse fields or professions.
The guiding Policy on remuneration of Directors, Key Managerial Personnel and employees of the Company is that:
- Remuneration to Key Managerial Personnel, Senior Executives, Managers, Staff and Workmen is commensurate with the industry standards in which it is operating taking into account the performance leverage and factors so as to attract and retain talent.
- For Directors, it is based on the Shareholdersâ resolutions, provisions of the Companies Act, 2013 and Rules framed therein, circulars, guidelines issued by the Central Government and other authorities from time to time.
INDEPENDENT DIRECTORS DECLARATION
The company has received the necessary declaration from each independent director in accordance with the section 149 (7) of the Companies Act 2013 that he/ she meets the criteria of independence as laid out in sub-section (6) of Section 149 of the Companies Act, 2013 and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
MANAGERIAL REMUNERATION -197(12)
Details of remuneration as required under section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure-2.
DIRECTORSâ RESPONSIBILITY STATEMENT
The Board of Directors of the Company confirms:
i. that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
ii. that the selected accounting policies were applied consistently and the directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit or loss of the Company for the year ended on that date;
iii. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other -irregularities;
iv. that the annual accounts have been prepared on a going concern basis.
v. The company has in place an established internal financial control system and the said systems are adequate and operating effectively. Steps are also being taken to further improve the same.
vi. The company has in place a system to ensure compliance with the provisions of all applicable laws and the system is adequate. Steps are also being taken to further improve the legal compliance monitoring.
AUDIT COMMITTEE
The constitution of the Audit Committee, Terms of Reference and the dates on which meetings of the Audit Committee were held are mentioned in the Corporate Governance Report for the FY 2017-18 forming part of this Annual Report. There has been no instance where Board has not accepted the recommendations of the Audit Committee during the year under review.
NOMINATION AND REMUNERATION COMMITTEE
The constitution of the Nomination and Remuneration Committee, Terms of Reference and the dates on which meetings of the Nomination and Remuneration Committee were held are mentioned in the Corporate Governance Report for the FY 2017-18 forming part of this Annual Report.
STAKEHOLDERS RELATIONSHIP COMMITTEE
The constitution of the Stakeholders Relationship Committee, Terms of Reference and the dates on which meetings of the Stakeholders Relationship Committee were held are mentioned in the Corporate Governance Report for the FY 2017-18 forming part of this Annual Report.
INTERNAL CONTROL SYSTEM
The Company has a strong and pervasive internal control system to ensure well-organized use of the Companyâs resources, their security against any unauthorized use, accuracy in financial reporting and due compliance of the Companyâs policies and procedures as well as the Statutes. Internal Audit reports are regularly placed before the Audit Committee and Management analysis of the same is done to ensure checks and controls to align with the expected growth in operations. The Internal audit is carried out by an independent firm of Chartered Accountants on regular basis and remedial actions are taken when any shortcomings are identified.
The Audit committee reviews the competence of the internal control system and provides its guidance for constant upgrading in the system.
INDIAN ACCOUNTING STANDARDS (IND AS)
The Ministry of Corporate Affairs (MCA) vide its notification has made the application of the Companies (Indian Accounting Standards) Rules, 2015 (Ind-AS Rules) for certain categories of Companies from accounting periods beginning on or after April 01, 2017.
The Audited Financial Statements of the Company drawn on standalone basis for the financial year ended 31st March, 2018 are in accordance with the requirements of Ind-AS Rules. Figure for the previous year have also been re-stated in line with the requirements of the above rules.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
Though our Company does not fall under the purview of Section 135 of the Companies Act, 2013, still it continues to undertake various activities for the welfare of the society by making contributions to educational institutions and for medical treatment of under-privileged children and other charitable causes.
The Company has constituted a Corporate Social Responsibility Committee to look after its CSR initiatives in order to integrate interest, welfare and aspirations of the community with those of the company itself in an environment of partnership and mutual trust for inclusive development.
RISK MANAGEMENT
Risk management is the process of identification, assessment and prioritization of risks followed by coordinated efforts to minimize, monitor and mitigate/ control the probability and / or impact of unfortunate events or to maximize the realization of opportunities.
Management of risk remains an integral part of your Companyâs operations and it enables your Company to maintain high standards of asset quality at time of rapid growth of its lending business. The objective of risk management is to balance the tradeoff between risk and return and ensure optimal risk-adjusted return on capital. It entails independent identification, measurement and management of risks across the businesses of your Company. Risk is managed through a framework of policies and principles approved by the Board of Directors supported by an independent risk function which ensures that your Company operates within a pre-defined risk appetite. The risk management function strives to proactively anticipate vulnerabilities at the transaction as well as at the portfolio level, through quantitative or qualitative examination of the embedded risks.
Your Company manages, monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. Your Companyâs management systems, organizational structures, processes, standards, code of conduct and behaviour governs how the Group conducts the business of the Company and manages associated risks. There are no risks which in the opinion of the Board may threaten the existence of the company.
RELATED PARTY TRANSACTIONS
Details of transaction with related parties in Form AOC-2 are given in Annexure-3. The Company has entered into the related party transaction as per section 188 of the Companies Act, 2013 read with Rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014. The details of transactions with related parties as per AS-18 are disclosed in notes to accounts.
WHISTLE BLOWER POLICY/VIGIL MECHANISM
The details of Whistle Blower Policy/Vigil Mechanism existing in the Company are mentioned in the Corporate Governance Report for the FY 2017-18 forming part of this Annual Report.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2014
Company has a stringent policy for prevention of sexual harassment of women at workplace and management takes a zero tolerance approach towards those indulging in any form of sexual misconduct. No instance of sexual harassment was reported during FY 2017-18.
AUDITORSâ REPORT
The Statutory Auditors Report on Standalone Financial statement and the Secretarial Audit Report for the financial year 2017-18 does not contain any qualification which warrants comments from the Board of Directors.
STATUTORY AUDITORS
M/s. A. K. Meharia & Associates, Chartered Accountant, (FRN - 324666E) Kolkata was appointed as the Statutory Auditors of the Company for the period of five year at the Annual General Meeting held on 12.08.2017. Further, In accordance with the provisions of the Companies Act, 2013, appointment of M/s A. K. Meharia & Associates as the statutory Auditor of the Company has to be ratified from the conclusion of this Annual General Meeting till the conclusion of next Annual General Meeting. The Board of Directors in its meeting held on 28th May, 2018, on the recommendation of the Audit Committee, and subject to the approval of the Shareholders, ratified the appointment of M/s. A. K. Meharia & Associates, Chartered Accountants (ICAI Firm Registration No. 324666E), as the statutory auditors of the Company for the next financial year. Therefore approval for ratification of the appointment of Statutory Auditor is being sought from the members of the Company at the ensuing Annual General Meeting.
There are no qualification(s), reservation(s) or adverse remarks or disclaimer in the Auditors Report to the Members on the Annual Financial Statements for the financial year ended 31st March, 2018. The notes on accounts referred to in the Auditorsâ Report are self explanatory and, therefore, do not call for any comments.
The Ministry of Corporate Affairs has notified amendments in the provisions of Section 139 of the Companies Act, 2013 and Rules made thereunder with effect from 7th May, 2018. Pursuant to the said amendments, the requirement for ratification of appointment of Statutory Auditors by the Shareholders at every subsequent Annual General Meeting till the conclusion of their tenure has been done away with.
COST AUDITORS
In terms of the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors of your Company have on the recommendation of the Audit Committee, re-appointed M/s. N. Radhakrishnan & Co., a firm of Cost Accountants, Kolkata, to conduct the Cost Audit of your Company for the financial year ending 31st March, 2019, at a remuneration as mentioned in the Notice convening the Annual General Meeting. As required under the Act, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a resolution seeking Memberâs ratification for the remuneration payable to Cost Auditors forms part of the Notice of the ensuing Annual General Meeting.
SECRETARIAL AUDITOR/AUDIT
In terms of Section 204 of the Companies Act, 2013, your Directors have appointed M/s. AL & ASSOCIATES, Company Secretaries of 24, N.S Road, 4th Floor, Kolkata-700001 in place of M/s. K. C. Khowala, as a Secretarial Auditors of the Company for the Financial Year 2018-19, to conduct the Secretarial Audit for the financial year ended March 31, 2019.
A Secretarial Audit was carried out by the Secretarial Auditor Mr. K.C. Khowala, Practicing Company Secretary pursuant to provisions of Section 204 of the Companies Act, 2013. The Secretarial Auditorâs Report for the financial year ended March 31, 2018 is attached as Annexure-4 and forms part of the Boardâs Report.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Board of Directors affirms that the Company has complied with the applicable Secretarial Standards issued by the Institute of Companies Secretaries of India (SS1 and SS2) respectively relating to meetings of the Board and its Committee which have mandatory application during the year under review.
EXTRACT OF ANNUAL RETURN (MGT-9)
Pursuant of section 92 (3), 134(3) (a) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, Extract of annual Return in Form MGT-9 is given in Annexure-5.
LEGAL ORDERS
There are no Significant/material orders of Courts/ tribunal/regulation affecting the Companyâs going concern status.
LOANS, GUARANTEES OR INVESTMENTS (186)
No Loans, Guarantees and investments as required under section 186 of the Companies Act, 2013 are made during the financial year 2017-18.
PUBLIC DEPOSITS
The Company did not invite or accept any deposit from the public under Section 73 of the Companies Act, 2013. PARTICULARS AS PER SECTION 134(3) OF THE COMPANIES ACT, 2013
The information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo required under Section 134 (3) of the Companies Act, 2013 read with Rule 8 (3) of Companies (Accounts) Rules, 2014, is set out in a separate statement attached to this report and forms part of it. (Annexure- 6)
ACKNOWLEDGEMENT
We express our sincere gratitude to our customers, vendors, investors and bankers for their continued support during the year. We place on record our sincere appreciation of the dedication and commitment of all employees in achieving excellence in all spheres of business activities.
We thank the Government of India, the Customs and Excise Departments, the Sales Tax Department, the Income Tax Department, the State Government and other Government agencies for their support, and look forward to their continued support in the future.
CAUTIONARY STATEMENT
Statements forming part of the Management Discussion and Analysis covered in this report may be forward-looking within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed in the statement. The Company takes no responsibility to publicly amend, modify or revise any forward looking statements on the basis of any subsequent developments, information or events.
For and on behalf of the Board of Directors
For, Century Extrusions Limited
Vikram Jhunjhunwala
Date: 28th May, 2018 Chairman & Managing Director
Mar 31, 2017
Dear Members,
The are pleased to present the 29th Annual Report on the business and operations of your company along with audited financial statements, for the financial year ended March 31, 2017.
FINANCIAL PERFORMANCE
The Company reported a sales turnover of Rs. 20352 lacs as against Rs. 18807 lacs in the previous financial year recording increase of about 8.21%. The increase in turnover of 8.21% from previous year to this year due to increment in production in the last quarter of the financial year 2016-17 and the market scenario of aluminum industry has changed and there is constant demand of aluminum in the market as compared to last year. The Power Transmission & Distribution Hardware (Power T & D Hardware) division registered a sale of Rs. 471 lacs as against Rs. 304 lacs in the previous financial year. The balance of the turnover was contributed by Companyâs principal business i.e. by Aluminium Extrusions Division.
The Profit after Tax (PAT) for the financial year is Rs. 122 lacs as against profit of Rs. 91 lacs reflecting increase of about 34% in the financial performance of the Company.
(Rs. in Lacs, except per share data)
PARTICULARS |
Year Ended |
|
31-Mar-2017 Audited |
31-Mar-2016 Audited |
|
Income from Operations |
||
Net Sales/ Income from Operation (Net of excise duty) |
18,189 |
16,797 |
Other Operating Income |
- |
- |
Total Income from operations (Net) |
18,189 |
16,797 |
Total Expenses except finance cost |
17,439 |
16,267 |
Profit/Loss from Operations before other income, interest & exceptional items |
750 |
530 |
Other Income |
159 |
247 |
Profit/Loss from ordinary activities before Interest & exceptional items |
909 |
777 |
Finance Cost |
730 |
695 |
Profit/Loss from Ordinary Activities after Interest but before exceptional items |
179 |
82 |
Exceptional Items |
6 |
- |
Profit/Loss from Ordinary Activities before Tax |
173 |
82 |
Tax Expenses - Deferred Tax Assets |
(12) |
35 |
Net Profit/Loss from Ordinary Activities after Tax |
161 |
117 |
Extraordinary items |
39 |
26 |
Net Profit/Loss for the period |
122 |
91 |
TRANSFER OF RESERVES
The Company has not transferred any amount to General Reserve during the financial year 2016-17.
DIVIDEND
Due to inadequacy of distributable profits during the fiscal under review, the Board of Directors regrets their inability to recommend a dividend payout.
OPERATION AND PERFORMANCE OF THE COMPANY
The year under review was one of the most difficult one for your company. Company performance suffered largely due to poor performance of the metals industries.. The Margins continue to be under pressure and the cash flow is also constrained as regular payments are not coming from customers on time. Various steps are to be taken for promotion of aluminium sector and facilitating its growth. All these factors indicate that there is a highly promising future for the aluminium industry in the country. Further in this connection, in the last quarter of the year under review has shown some improvement and market are started up and the management is expecting some good order from the new customers. The management is also giving special attention to cost reduction and collections to improve the financial performance.
HUMAN RESOURCE AND INDUSTRIAL RELATIONS
Human resource management at Century Extrusions Ltd. goes beyond the set of boundaries of compensation, performance reviews and development. We look at the employees entire lifecycle, to ensure timely interventions that help build a long lasting and fruitful career. With this in mind, we initiated several positive changes in our HR practice this year.
To foster a positive workplace environment, free from harassment of any nature, we have policies of Anti - Sexual Harassment through which we address complaints of sexual harassment at the work place.
Our Company believes that targets of the Company can only be reached with efforts from all its employees. Our Company recognizes that job satisfaction requires congenial work environment that promotes motivation among employees and therefore results in enhanced productivity, and innovation and also provide avenues for employee training and development to identify their potential and develop their careers in the Company.
The Company values contribution of its employees and follows the principle of informing all its employees about its future growth strategies.
CORPORATE GOVERNANCE
The Company has been proactive in following the principles and practices of good Corporate Governance as an important step towards building investor confidence, improve investorsâ protection and maximize long-term shareholder value.
The Company has complied with the Corporate Governance Code prescribed by the Stock Exchanges and also stringently followed the Corporate Governance Guidelines as stipulated by SEBI.
Our report on Corporate Governance for financial year ended March 31, 2017 forms part of this Annual Report.
AUDITORS CERTIFICATE ON CORPORATE GOVERNANCE
As required by the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Auditorsâ Certificate on Corporate Governance is enclosed as Annexure - 1 to the Boardâs Report. The Auditorsâ certificate for the year ended March 31, 2017 does not contain any qualification, reservation or adverse remark.
BOARD MEETING
The Board met four times during the year. The details are given in the Corporate Governance report that forms a part of the annual report.
DIRECTORS
The Company has an appropriate mix of Executive, Non Executive and Independent Directors to maintain the independence of the Board and separate its functions of governance and management. Currently, the Board consists of five members, one of whom is Executive or Managing Director and four Non-Executive Independent Directors including Woman Director. The Number of Non-Executive Directors is more than fifty percent of total number of directors. The Board periodically evaluates the need for change in its composition and size. Non- Executive Directors with their diverse knowledge, experience and expertise bring in independent judgment in the deliberations and decisions of the Board.
The details are given in the Corporate Governance report that forms a part of the annual report.
KEY MANAGERIAL PERSONNEL
The Key Managerial Personnel appointed/ceased during the year are as under:
Sl No. |
Name |
Designation |
Date of Appointment |
Date of Cessation |
1 |
Mr. Ashish Kumar Dhandhanya |
Company Secretary |
27-10-2015 |
15-08-2016 |
2 |
Mr. Vishal Sharma |
Company Secretary |
01-09-2016 |
Continuing |
POLICY ON DIRECTORSâ APPOINTMENT AND REMUNERATION
The Company being a listed Company, Policy on Directorsâ appointment is to follow the criteria as laid down under the Companies Act, 2013 and the Listing Agreement with Stock Exchanges and good corporate governance practices. Emphasis is given to persons from diverse fields or professions.
The guiding Policy on remuneration of Directors, Key Managerial Personnel and employees of the Company is that:
- Remuneration to Key Managerial Personnel, Senior Executives, Managers, Staff and Workmen is commensurate with the industry standards in which it is operating taking into account the performance leverage and factors so as to attract and retain talent.
- For Directors, it is based on the Shareholdersâ resolutions, provisions of the Companies Act, 2013 and Rules framed therein, circulars, guidelines issued by the Central Government and other authorities from time to time.
INDEPENDENT DIRECTORS DECLARATION
The company has received the necessary declaration from each independent director in accordance with the section 149 (7) of the Companies Act 2013 that he/ she meets the criteria of independence as laid out in sub-section (6) of Section 149 of the Companies Act, 2013 and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
MANAGERIAL REMUNERATION -197(12)
Details of remuneration as required under section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure-2.
DIRECTORSâ RESPONSIBILITY STATEMENT
The Board of Directors of the Company confirms:
i. that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
ii. that the selected accounting policies were applied consistently and the directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017 and of the profit or loss of the Company for the year ended on that date;
iii. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other -irregularities;
iv. that the annual accounts have been prepared on a going concern basis.
v. The company has in place an established internal financial control system and the said systems are adequate and operating effectively. Steps are also being taken to further improve the same.
vi. The company has in place a system to ensure compliance with the provisions of all applicable laws and the system is adequate. Steps are also being taken to further improve the legal compliance monitoring.
AUDIT COMMITTEE
The constitution of the Audit Committee, Terms of Reference and the dates on which meetings of the Audit Committee were held are mentioned in the Corporate Governance Report for the FY 2016-17 forming part of this Annual Report. There has been no instance where Board has not accepted the recommendations of the Audit Committee during the year under review.
NOMINATION AND REMUNERATION COMMITTEE
The constitution of the Nomination and Remuneration Committee, Terms of Reference and the dates on which meetings of the Nomination and Remuneration Committee were held are mentioned in the Corporate Governance Report for the FY 2016-17 forming part of this Annual Report.
STAKEHOLDERS RELATIONSHIP COMMITTEE
The constitution of the Stakeholders Relationship Committee, Terms of Reference and the dates on which meetings of the Stakeholders Relationship Committee were held are mentioned in the Corporate Governance Report for the FY 2016-17 forming part of this Annual Report.
INTERNAL CONTROL SYSTEM
The Company has a strong and pervasive internal control system to ensure well-organized use of the Companyâs resources, their security against any unauthorized use, accuracy in financial reporting and due compliance of the Companyâs policies and procedures as well as the Statutes.
Internal Audit reports are regularly placed before the Audit Committee and Management analysis of the same is done to ensure checks and controls to align with the expected growth in operations. The Internal audit is carried out by an independent firm of Chartered Accountants on regular basis and remedial actions are taken when any shortcomings are identified.
The Audit committee reviews the competence of the internal control system and provides its guidance for constant upgrading in the system.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
At Century Extrusions Ltd., Corporate Social Responsibility has always been an integral part of our corporate philosophy and it was followed much before the passing of the Companies Act, 2013. Aluminium being a green metal is less likely to cause environmental pollution as the processes employed are not harmful to the environment and are energy-efficient.
Our Company values safety as a prime concern. The manufacturing process and plant of our Company adhere to various safety standards laid down by regulatory authorities. Our Company has received the prestigious OHSAS 18001:2007 certification for its relentless commitment towards maintenance of Occupational Health and Safety Management System Standards.
Though our Company does not fall under the purview of Section 135 of the Companies Act, 2013, still it continues to undertake various activities for the welfare of the society by making contributions to educational institutions and for medical treatment of under-privileged children and other charitable causes.
The Company has constituted a Corporate Social Responsibility Committee to look after its CSR initiatives in order to integrate interest, welfare and aspirations of the community with those of the company itself in an environment of partnership and mutual trust for inclusive development.
RISK MANAGEMENT
Risk Management is a key attribute of the Corporate Governance Principles and Code of Conduct of our Company and it aims to deal with the governance practices across the Companyâs actions. Risk Management practices and policies enable the Company to proactively handle uncertainty and changes in the internal and external environment to limit negative impacts.
Your Company has a system based approach to business risk management. Backed by a well-planned internal control system, the current risk management agenda consists of the following elements:
- Enterprise Risk Management Policy manual clearly lays down the strategy, policy and initiatives in relation to risk management.
- A strong and independent Internal Audit Function carries out risk focused audits enabling identification of areas where risk management processes may need to be improved. The Audit Committee of the Board reviews Internal Audit findings and provides strategic guidance on internal controls. The Audit Committee closely monitors the internal control environment within the Company and ensures that Internal Audit recommendations are effectively implemented.
- The Senior Management of the Company periodically reviews the risk management framework to effectively address the emerging challenges in a dynamic business environment.
The Policy is in compliance with the SEBI Listing Regulations which requires the Company to lay down procedure for risk assessment and for mitigating risks.
RELATED PARTY TRANSACTIONS
Details of transaction with related parties in Form AOC-2 are given in Annexure-3. The Company has entered into the related party transaction as per section 188 of the Companies Act, 2013 read with Rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014.The details of transactions with related parties as per AS-18 are disclosed in notes to accounts.
WHISTLE BLOWER POLICY/VIGIL MECHANISM
The details of Whistle Blower Policy/Vigil Mechanism existing in the Company are mentioned in the Corporate Governance Report for the FY 2016-17 forming part of this Annual Report.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2014
Company has a stringent policy for prevention of sexual harassment of women at workplace and management takes a zero tolerance approach towards those indulging in any form of sexual misconduct. No instance of sexual harassment was reported during FY 2016-17.
AUDITORSâ REPORT
The Statutory Auditors Report on Standalone Financial statement and the Secretarial Audit Report for the financial year 2016-17 does not contain any qualification which warrants comments from the Board of Directors.
STATUTORY AUDITORS
M/s. A L P S & Co., Chartered Accountant, Kolkata was appointed as a Statutory Auditor of the Company at the Annual General Meeting of the Company held on 05.09.2016. Further, in accordance with the requirements of section 139 of the Companies Act, 2013, Company has to rotate its Statutory Auditors from the financial year 2017-18. The Company has received consent from M/s A. K. Meharia & Associates, Chartered Accountant Kolkata and it was proposed to appoint the aforesaid firm as the Statutory Auditor of the Company for the period of 5 years, subject to the provisions of section 139 of the Companies Act, 2013 and rules made there under. Therefore approval for appointment of Statutory Auditor is being sought from the members of the Company at the ensuing Annual General Meeting.
There are no qualification(s), reservation(s) or adverse remarks or disclaimer in the Auditors Report to the Members on the Annual Financial Statements for the financial year ended 31st March, 2017.
COST AUDITORS
In terms of Section 148 of the Companies Act, 2013, your Directors have re-appointed M/s. N. Radhakrishnan & Co., a firm of Cost Accountants, Kolkata, to conduct the Cost Audit for the financial year ended March 31, 2017. In terms of section 148 approvals of members is sought at the ensuing Annual General Meeting for payment of remuneration to the said auditors.
SECRETARIAL AUDITOR/AUDIT
In terms of Section 204 of the Companies Act, 2013, your Directors have re-appointed Mr. K. C. Khowala, Practicing Company Secretary, to conduct the Secretarial Audit for the financial year ended March 31,2018.
A Secretarial Audit was carried out by the Secretarial Auditor Mr. K.C. Khowala, Practicing Company Secretary pursuant to provisions of Section 204 of the Companies Act, 2013. The Secretarial Auditorâs Report for the financial year ended March 31, 2017 is attached as Annexure-4 and forms part of the Boardâs Report.
EXTRACT OF ANNUAL RETURN (MGT-9)
Pursuant of section 92 (3), 134(3) (a) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, Extract of annual Return in Form MGT-9 is given in Annexure-5.
LEGAL ORDERS
There are no Significant/material orders of Courts/ tribunal/ regulation affecting the Companyâs going concern status.
LOANS, GUARANTEES OR INVESTMENTS (186)
No Loans, Guarantees and investments as required under section 186 of the Companies Act, 2013 are made during the financial year 2016-17.
PUBLIC DEPOSITS
The Company did not invite or accept any deposit from the public under Section 73 of the Companies Act, 2013.
PARTICULARS AS PER SECTION 134(3) OF THE COMPANIES ACT, 2013
The information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo required under Section 134 (3) of the Companies Act, 2013 read with Rule 8 (3) of Companies (Accounts) Rules, 2014, is set out in a separate statement attached to this report and forms part of it. (Annexure- 6)
ACKNOWLEDGEMENT
We express our sincere gratitude to our customers, vendors, investors and bankers for their continued support during the year. We place on record our sincere appreciation of the dedication and commitment of all employees in achieving excellence in all spheres of business activities.
We thank the Government of India, the Customs and Excise Departments, the Sales Tax Department, the Income Tax Department, the State Government and other Government agencies for their support, and look forward to their continued support in the future.
CAUTIONARY STATEMENT
Statements forming part of the Management Discussion and Analysis covered in this report may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. The Company takes no responsibility to publicly amend, modify or revise any forward looking statements on the basis of any subsequent developments, information or events.
By order of the Board of Directors
For Century Extrusions Limited
Vikram Jhunjhunwala
Kolkata Chairman & Managing Director
Dated: 25.05.2017
Mar 31, 2016
Dear Members,
We are pleased to present the 28th Annual Report on the business and operations of your company along with audited financial statements, for the financial year ended March 31, 2016.
FINANCIAL PERFORMANCE
The Company reported a sales turnover of Rs. 18,807 lakhs as against Rs.19,438 lakhs in the previous financial year recording a decrease of about 3.25%. The reduction in the turnover was due to decrease in the price of the m during the financial year but the Company has achieved 14 % growth in the quantity dispatched during the financial year as compared to the previous financial year. The Power Transmission & Distribution Hardware (Power T & D Hardware) division recorded a sale of Rs.304 lakhs as against Rs. 202 lakhs in the previous financial year. The balance of the turnover was contributed by Companyâs principal business i.e. by Aluminum Extrusions Division
The Profit after Tax (PAT) for the financial year is Rs. 91 lakhs as against profit of Rs. 144 lakhs reflecting decrease of about 36% in the financial performance of the Company.
TRANSFER OF RESERVES
The Company has transferred Rs. 91 Lacs to the reserve and surplus during the financial year.
DIVIDEND
Due to inadequacy of distributable profits during the fiscal under review, the Board of Directors regrets their inability to recommend a dividend payout.
OPERATION AND PERFORMANCE OF THE COMPANY
The year under review was one of the most difficult one for the company. Company performance suffered largely due to poor performance of the metals industries. Order book is improving and the outlook for the financial year 2016-17 is better. However, margins continue to be under pressure and the cash flow is also constrained. The management is giving special attention on cost reduction and cost control to improve the financial performance.
(Rs. in Lacs, except per share data)
PARTICULARS |
Year Ended |
|
31-Mar-2016 Audited |
31-Mar-2015 Audited |
|
Income from Operations |
||
Net Sales/ Income from Operation (Net of excise duty) |
16,797 |
17,384 |
Other Operating Income |
- |
- |
Total Income from operations (Net) |
16,797 |
17,384 |
Total Expenses except finance cost |
16,267 |
16909 |
Profit/Loss from Operations before other income, interest & exceptional items |
530 |
475 |
Other Income |
247 |
372 |
Profit/Loss from ordinary activities before Interest & exceptional items |
777 |
847 |
Finance Cost |
695 |
746 |
Profit/Loss from Ordinary Activities after Interest but before exceptional items |
82 |
101 |
Exceptional Items |
- |
(3) |
Profit/Loss from Ordinary Activities before Tax |
82 |
104 |
Tax Expenses - Deferred Tax Assets |
(35) |
(40) |
Net Profit/Loss from Ordinary Activities after Tax |
117 |
144 |
Extraordinary items |
26 |
- |
Net Profit/Loss for the period |
91 |
144 |
Non- Executive Directors with their diverse knowledge, experience and expertise bring in independent judgment in the deliberations and decisions of the Board.
The details are given in the Corporate Governance report that forms a part of the annual report.
PRODUCTION
The Aluminium Extrusions Production for the year was 10202 MT as against 8938 MT in previous financial year.
CORPORATE GOVERNANCE
The Company has been proactive in following the principles and practices of good Corporate Governance as an important step towards building investor confidence, improve investorsâ protection and maximize long-term shareholder value.
The Company has complied with the Corporate Governance Code prescribed by the Stock Exchanges and also stringently followed the Corporate Governance Guidelines as stipulated by SEBI.
Our report on Corporate Governance for financial year ended March B\ 206 forms part of this Annual Report.
AUDITORS CERTIFICATE ON CORPORATE
GOVERNANCE
As required by the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Auditorsâ Certificate on Corporate Governance is enclosed as Annexure - 1 to the Boardâs Report. The Auditorsâ certificate for the year ended March 31, 2016 does not contain any qualification, reservation or adverse remark.
BOARD MEETING
The Board met six times during the year. The details ar given in the Corporate Governance Report that forms a part of the annual report.
DIRECTORS
The Company has an appropriate mix of Executive, Non-Executive and Independent Directors to maintain the independence of the Board and separate its functions of governance and management. Currently, the Board consists of five members, one of whom is Executive or Managing Director and four Non-Executive Independent Directors including a Woman Director. The Number of Non-Executive Directors is more than fifty percent of total number of Directors. The Board periodically evaluates the need for change in its composition and size.
APPOINTMENT / RE-APPOINTMENT
The Nomination & Remuneration Committee of the Board reviewed the appointment / re-appointment of the Directors, as follow:-
Mrs. Suhita Mukhopadhyay (DIN- 07144051) who was appointed as an additional director with effect from March 31, 2015 hold office upto the date of ensuing Annual General Meeting. Company has received notice along with requisite deposit from a member proposing her appointment as a director. Mrs. Suhita Mukhopadhyay has given declaration that she meets the criteria of independence as provided in section 149(6) of the Companies Act, 2013 read with clause 49 of the listing agreement. She was appointed as an independent director at the Annual General Meeting held on 07.09.205 for tenure of 5 years.
Mr. Madhab Prasad Jhunjhunwala (DIN-00169908), who tenure was expired on August 20, 2015 from the Managing Directorships of the Company, was reappointed by the Board of Directors for period of 3 years on July 2, 2015 which was subsequently approved by the shareholder at the Annual General Meeting held on 07.09.2015.
Mr. Vikram Jhunjhunwala, (DIN-00169833) was appointed as a Managing Director of the Company with effect from February 12, 2016, subject to approval of shareholders of the ensuing Annual General Meeting. It is proposed to appoint him as a Managing Director at the Annual General Meeting to be held in the financial Year 2016-17
RETIREMENT/RESIGNATION/CESSATION
Mr. Vijay Kumar Mushran was resigned from the directorships of the Company with effect from July 22, 2015.
The directors place on record their sincere appreciation of the contribution made by him during his tenure.
Due to sudden demise of Mr. Madhab Prasad Jhunjhunwala, he ceased from the directorships of the company with effect from November 8, 2015.
KEY MANAGERIAL PERSONNEL
The Key Managerial Personnel appointed/ceased during the year are as under:
Sl. No. |
Name |
Designation |
Date of Appointment |
Date of Cessation |
1 |
Mr. Madhab Prasad Jhunjhunwala |
Chairman and Managing Director |
02-07-205 |
13-11-2015 |
2 |
Mr. Vikram Jhunjhunwala |
Chairman and Managing Director |
12-02-205) |
Continuing |
B |
Mrs. Sumana Raychaudhuri |
Company Secretary |
06-12012 |
14-10-2015 |
4 |
Mr. Ashish Kumar Dhandhanya |
Company Secretary |
27-D-205 |
Continuing |
POLICY ON DIRECTORSâ APPOINTMENT AND REMUNERATION
The Company being a listed Company, Policy on Directorsâ appointment is to follow the criteria as laid down under the Companies Act, 2013 and the Listing Agreement with Stock Exchanges and good corporate governance practices. Emphasis is given to persons from diverse fields or professions.
The guiding Policy on remuneration of Directors, Key Managerial Personnel and employees of the Company is that:
- Remuneration to Key Managerial Personnel, Senior Executives, Managers, Staff and Workmen is commensurate with the industry standards in which it is operating taking into account the performance leverage and factors so as to attract and retain talent.
- For Directors, it is based on the Shareholdersâ resolutions, provisions of the Companies Act, 20B and Rules framed therein, circulars, guidelines issued by the Central Government and other authorities from time to time.
INDEPENDENT DIRECTORS DECLARATION
The company has received the necessary declaration from each independent director in accordance with the section 149 (7) of the Companies Act 2013 that he/ she meets the criteria of independence as laid out in sub-section (6) of Section 49 of the Companies Act, 20B and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
MANAGERIAL REMUNERATION -197(12)
Details of remuneration as required under section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure - 2.
DIRECTORSâ RESPONSIBILITY STATEMENT
The Board of Directors of the Company confirms:
i. that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
ii. that the selected accounting policies were applied consistently and the directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2016 and of the profit or loss of the Company for the year ended on that date;
iii. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other -irregularities;
iv. that the annual accounts have been prepared on a going concern basis.
v. The company has in place an established internal financial control system and the said systems are adequate and operating effectively. Steps are also being taken to further improve the same.
vi. The company has in place a system to ensure compliance with the provisions of all applicable laws and the system is adequate. Steps are also being taken to further improve legal compliance monitoring.
AUDIT COMMITTEE
The constitution of the Audit Committee, Terms of Reference and the dates on which meetings of the Audit Committee were held are mentioned in the Corporate Governance Report for the FY 15-16 forming part of this Annual Report. There has been no instance where Board has not accepted the recommendations of the Audit Committee during the year under review.
NOMINATION AND REMUNERATION COMMITTEE
The constitution of the Nomination and Remuneration Committee, Terms of Reference and the dates on which meetings of the Nomination and Remuneration Committee were held are mentioned in the Corporate Governance Report for the FY 15-16 forming part of this Annual Report.
STAKEHOLDERS RELATIONSHIP COMMITTEE
The constitution of the Stakeholders Relationship Committee, Terms of Reference and the dates on which meetings of the Stakeholders Relationship Committee were held are mentioned in the Corporate Governance Report for the FY 15-16 forming part of this Annual Report.
INTERNAL CONTROL SYSTEM
The Company has a strong and pervasive internal control system to ensure well-organized use of the Companyâs resources, their security against any unauthorized use accuracy in financial reporting and due compliance of the Companyâs policies and procedures as well as the Statutes. Internal Audit reports are regularly placed before the Audit Committee and Management analysis of the same is done to ensure checks and controls to align with the expected growth in operations. The Internal audit is carried out by an independent firm of Chartered Accountants on regular basis and remedial actions are taken when any shortcomings are identified.
The Audit committee reviews the competence of the internal control system and provides its guidance for constant upgrading in the system.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
At Century Extrusions Ltd., Corporate Social Responsibility has always been an integral part of our corporate philosophy and it was followed much before the passing of the Companies Act, 2013. Aluminium being a green metal is less likely to cause environmental pollution as the processes employed are not harmful to the environment and are energy-efficient.
Our Company values safety as a prime concern. The manufacturing process and plant of our Company adhere to various safety standards laid down by regulatory authorities. Our Company has received the prestigious OHSAS 18001:2007 certification for its relentless commitment towards maintenance of Occupational Health and Safety Management System Standards.
Though our Company does not fall under the purview of Section 35 of the Companies Act, 2013, still it continues to undertake various activities for the welfare of the society by making contributions to educational institutions and for medical treatment of under-privileged children and other charitable causes.
The Company has constituted a Corporate Social Responsibility Committee to look after its CSR initiatives in order to integrate interest, welfare and aspirations of the community with those of the company itself in an environment of partnership and mutual trust for inclusive development.
RISK MANAGEMENT
Risk Management is a key attribute of the Corporate Governance Principles and Code of Conduct of our Company and it aims to deal with the governance practices across the Companyâs actions. Risk Management practices and policies enable the Company to proactively handle uncertainty and changes in the internal and external environment to limit negative impacts.
Your Company has a system based approach to business risk management. Backed by a well-planned internal control system, the current risk management agenda consists of the following elements:
- Enterprise Risk Management Policy manual clearly lays down the strategy, policy and initiatives in relation to risk management.
- A strong and independent Internal Audit Function carries out risk focused audits enabling identification of areas where risk management processes may need to be improved. The Audit Committee of the Board reviews Internal Audit findings and provides strategic guidance on internal controls. The Audit Committee closely monitors the internal control environment within the Company and ensures that Internal Audit y recommendations are effectively implemented.
- The Senior Management of the Company periodically reviews the risk management framework to effectively address the emerging challenges in a dynamic business environment.
The Policy is in compliance with the Listing Agreement with Stock Exchanges which requires the Company to lay down procedure for risk assessment and for mitigating risks.
RELATED PARTY TRANSACTIONS
Details of transaction with related parties in Form AOC- 2 are given in Annexure-3. The Company has entered into the related party transaction as per section 138 of the Companies Act, 2013 read with Rule 5 of the Companies (Meetings of Board and its Powers) Rules, 2014.The details of transactions with related parties as per AS-18 are disclosed in notes to accounts.
EXTRACT OF ANNUAL RETURN (MGT-9)
Pursuant of section 92 (3), 134(3) (a) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, Extract of annual Return in Form MGT-9 is given in Annexure-5.
WHISTLE BLOWER POLICY/VIGIL MECHANISM
The details of Whistle Blower Policy/Vigil Mechanism existing in the Company are mentioned in the Corporate Governance Report for the FY 15-16 forming part of this Annual Report.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2014
Company has a stringent policy for prevention of sexual harassment of women at workplace and management takes a zero tolerance approach towards those indulging in any form of sexual misconduct. No instance of sexual harassment was reported during FY15-16.
AUDITORSâ REPORT
The Statutory Auditors Report on Standalone Financial statement and the Secretarial Audit Report for the financial year 2015-16 does not contain any qualification which warrants comments from the Board of Directors.
STATUTORY AUDITORS
The existing Auditors, M/s A L P S & Co, Kolkata, Chartered Accountants, retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Your Company has received a certificate from the Auditors to the effect that they are eligible for re-appointment and the applicable provisions of the Companies Act, 2013. Members are requested to reappoint the said Auditors for further period of one year i.e for the financial year 2016-17 at the Annual General Meeting and to authorize the Boa of Directors to fix their remuneration as mutually agreed upon between the Board and the Auditors.
COST AUDITORS
In terms of Section 148 of the Companies Act, 2013, your Directors have re-appointed M/s. N. Radhakrishnan & Co., a firm of Cost Accountants, Kolkata, to conduct the Cost Audit for the financial year ended March 31, 2016.
In terms of section 148 approvals of members is sought at the ensuing Annual General Meeting for payment c remuneration to the said auditors.
SECRETARIAL AUDITOR/AUDIT
In terms of Section 204 of the Companies Act, 2013, your Directors have re-appointed Mr. K. C. Khowala, Practicing Company Secretary, to conduct the Secretarial Audit for t financial year ended March 31, 2016.
A Secretarial Audit was carried out by the Secretary Auditor Mr. K.C. Khowala, Practicing Company Secretary pursuant to provisions of Section 204 of the Companies Act, 2013. The Secretarial Auditorâs Report is attached as Annexure-4 and forms part of the Boardâs Report.
EXTRACT OF ANNUAL RETURN (MGT-9)
Pursuant of section 92 (3), 134(3) (a) of the Companies Act, "2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, Extract of annual Return in Form MGT-9 is given in Annexure-5.
LEGAL ORDERS
There are no Significant/material orders of Courts/ tribunal/regulation affecting the Companyâs going concern status.
LOANS, GUARANTEES OR INVESTMENTS (186)
No Loans, Guarantees and investments as required under section B6 of the Companies Act, 20B are made during the financial year 2015-16.
PUBLIC DEPOSITS
The Company did not invite or accept any deposit from the public under Section 186 of the Companies Act, 2013.
PARTICULARS AS PER SECTION 134(3) OF THE COMPANIES ACT, 2013
The information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo required under Section 134 (3) of the Companies Act, 2013 read with Rule 8 (3) of Companies (Accounts) Rules, 2014, is set out in a separate statement attached to this report and forms part of it. (Annexure- 6).
r ACKNOWLEDGEMENT
We express our sincere gratitude to our customers, vendors, investors and bankers for their continued support during the year. We place on record our sincere appreciation of the dedication and commitment of all employees in achieving excellence in all spheres of business activities.
We thank the Government of India, the Customs and Excise Departments, the Sales Tax Department, the Income Tax Department, the State Government and other Government agencies for their support, and look forward to their continued support in the future.
For and on behalf of
the Board of Directors
Date: 21st May, 2016 Vikram Jhunjhunwala
Place : Kolkata Chairman & Managing Director
Mar 31, 2015
Dear Members,
We are pleased to present the 27th Annual Report of the Company for the
year 2014 - 2015.
Growth of the Indian economy
The world economy grew at a faster pace in 2014-15 as modest revival in
the Euro zone and pick up in India aided in off-setting slowdowns in
China and Japan. According to the Organization for Economic Cooperation
and Development (OECD), the gross domestic output of the Group of 20
largest economies (G-20), which accounts for more than 90% of world
economic output, expanded to 3.4% in 2014-15 as compared to 3.2% in
2013-14.
According to World Economic Surveys conducted by International Monetary
Fund (IMF), acute risks have decreased, but risks have not disappeared.
In the United States the recovery seems solidly grounded. Geopolitical
risks have arisen, although they have not yet had global macroeconomic
repercussions.
Potential growth in many advanced economies is still low, this is bad
on its own, but it also makes fiscal adjustments more difficult. Global
activity in many developed economies have strengthened and improved
further in 2014-15 compared to 2013-14. Inflation in these economies,
have however undershot projections, reflecting still-large output gaps
and recent commodity price declines. Activity in many emerging market
economies has disappointed in a less favourable external financial
environment, although they continue to contribute more than two-thirds
of global growth.
IMF says that, "Finally, as the effects of the financial crisis slowly
diminish, another trend may come to dominate the scene, namely,
increased income inequality. Though inequality has always been
perceived to be a central issue, until recently it was not believed to
have major implications for macroeconomic developments." Overall, the
global growth was not upto expectation in 2014-15, but it is expected
to rise moderately in 2015-16.
In its latest World Economic Outlook in April 14,2015 IMF states that
"India's growth is expected to strengthen from 7.2 percent in 2014 to
7.5 percent in 2015. Growth will benefit from recent policy reforms, a
consequent pick-up in investments and lower oil prices." India is set
to become the world's fastest growing economy by 2016 ahead of China,
says IMF. India's macro-economic prospects have strengthened and the
country is best positioned among emerging market economies.
The Scenario of the Aluminum Extrusion Industry
Aluminium is truly versatile, most sustainable and industry appealing
metal. Aluminium's unique properties, i.e., light- weightedness, high
strength and resistance to corrosion give it an edge over steel in
conventional and novel applications. The metal, which is only one-third
the weight of steel, is non-magnetic, non-combustible and is non-toxic
as well as impervious, the reason why it has extensive use in the food
and packing industry. Other properties are high reflectivity and rapid
heat dissipation. It is malleable and can be easily worked by the
common manufacturing and shaping processes.
According to the Department of Mines, Government of India, India's
aluminium production was lower by 16.5% at 1.72 MT in 2013-14 fiscal
compared to the target of 2.06 MT. Industry sources state that the
non-availability of bauxite on time for some of the units has crippled
production and falling global prices of the metal also contributed to
the non-achievement of target.
For the period between 2010 and 2016, India would be the only country
in the world registering a compounded annual growth rate in the
consumption of aluminium. India is endowed with rich Bauxite reserve
which is approx. 6.76% of the world total and ranks 5th among the world
bauxite reserve base.
According to Aluminium Association of India, India has produced nearly
8% of the total world production as compared to China's 44%, USA's 11%
and Japan's 4%.
Companies in India are investing heavily in the aluminium sector.
Hindalco Industries Ltd which is Asia's largest integrated primary
producer of aluminium, has already made a capital expenditure of US$
5.5 billion, since 2009. This is a sure sign of dynamism in this
sector.
The rapid growth of the emerging nations led by China and India is
expected to drive aluminium consumption in the future. Aluminium
consumption in BRIC nations alone is expected to increase at a CAGR of
9% over the period 2007-2020. Demand in the fast-growing Chinese market
is expected to reach 40.8 MT by 2020. The gradual recovery of the
recession-hit world markets, especially the construction and
transportation sectors, would facilitate further expansion of aluminium
consumption.
FINANCIAL PERFORMANCE
The Company reported a sales turnover of Rs. 19438 lacs as against
Rs.21300 lacs in the previous financial year recording a decrease of
about 8.75%.The Power Transmission & Distribution Hardware Power T&D
(Rs.in lacs, except per share data)
Year ended March 31 2015 2014
Sales 19438 21300
Profit before Interest,
Depreciation and impairment
of Assets 1073 869
Interest 632 682
Profit before Depreciation and
Impairment of Assets 441 187
Depreciation and Impairment
of Assets 337 441
Net Profit 104 (254)
Provision of Taxation 40 (150)
Profit after Tax 144 (104)
Profit brought forward 1647 1751
Balance carried to Balance Sheet 1738 1647
Hardware) division registered a sale of Rs.378 lacs as against Rs. 201
lacs in the previous financial year. The balance of the turnover was
contributed by Company's principal business i.e. by Aluminium
Extrusions Division.
The Profit after Tax (PAT) for the financial year is Rs.144 lacs as
against loss of Rs. 104 lacs reflecting moderate improvement in the
financial performance.
Spiraling costs resulted in increased cost of production. Our
Company's cost control initiatives helped in mitigating inflationary
pressures and curbed overall cost increases.
DIVIDEND
Due to inadequacy of distributable profits during the fiscal under
review, the Board of Directors regrets their inability to recommend a
dividend payout.
PRODUCTION
The Aluminium Extrusions production for the year was 8938 MT as against
10833 MT in previous financial year.
COMPANY OVERVIEW AND GROWTH STRATEGY
Effective and timely customer service-oriented approach has been our
strength for business development.
Success Drivers
Our Legacy: A rich experience of 24 years is an asset to the Company
and furthermore our Company enjoys a number of first mover advantages
comprising a comprehensive understanding of aluminium and aluminium
extrusions market, reputed brand and a strong customer base.
Integration: We possess in-house facilities for -
* Melting and casting of billets, Homogenizing
* Extrusions manufacturing with three press lines
* Complete Die manufacturing,
* Manufacturing various 'value-added' products of extrusions for
engineering applications, and
* Manufacturing Power Transmission & Distribution Hardware.
With 3 extrusion press lines, the Company has a capacity to produce
15000MT of Aluminium Extrusions, which as per the information available
with the Company, is the 3rd largest facility in India as on date.
Die Library. The Company possesses an inventory of more than 4500 dies
to manufacture over 3000 profiles. The Company maintains back-up dies
for meeting the requirements of fast moving profiles.
Availability of raw- material: The Company accesses raw material
(aluminium ingots and billets) from three renowned and proximate
primary metal manufacturers- Vedanta Aluminium, Nalco and Hindalco, The
Company is one of India's largest institutional aluminum ingot/billets
consumers with corresponding purchase economies.
Quality assurance: The Company's manufacturing facility is accredited
with the prestigious ISO-9001:2008 certification endorsing its strong
quality systems. Our Company continues to emphasize on maintaining the
utmost quality and safety standards in its factory. Our unit is also
ISO 14001:2004 and OHSAS18001:2007 certified.
The Company supplies extrusions as per tolerances laid down by the
Bureau of Indian Standards in accordance with BIS: 2673-1979,
BIS:3965-1981 and BIS : 6477-1983, and with even tighter tolerances as
per customer needs.
The sharp focus on Quality in all its initiatives has enabled our
Company to launch some specific value-added services
Product applications: We manufacture extruded products for varied
applications, viz. :
- Profiles for Architectural Applications such as Building Systems,
Structural Glazing, Curtain Walls, Aluminium Rolling Shutters, Windows,
Doors, Partitions, False Ceilings, Tower Bolts, Hand Rails, Door
Handles, Hinges, Drapery Rods, Modular Furniture, etc.;
- Profiles for Aluminium Form work;
- Profiles for Road Transport;
- Profiles for Rail Coach Windows & Doors;
- Profiles for manufacture of Automobile Components;
- Profiles for Heat Transfer in Electronics & Electrical Gadgets;
- Profiles for Electrical applications such as Tubes and Flats for Bus
Bars;
- Transmission Line Hardware such as P.G. Clamps, H-Connectors, Repair
Sleeves, Lugs, Solar Panels etc.;
- Profiles for Engineering Applications such as FHP Motor Housings,
Hydraulic Gear Pump Casings, Ferrules, A.C.Louvres, Machinery Parts,
Elevators, Pneumatic Actuators, Pneumatic Cylinders, Valve Bodies, etc.
- Profiles for Defence Applications and many more.
The Company also has necessary set up to supply extruded and cold drawn
round bars and hexagonal bars in straight lengths for various
engineering applications. It also has a set up to supply extruded and
cold drawn rods/wires in coil form to be used as armour rods, lamp pin
stock, metallizing wire, rivet stock, welding filler wire, etc.
Customer profile: The Company possesses a portfolio of over 500 reputed
customers. The Company has retained most of the customers over a period
of 24 years.
Our Company is in a position to supply Extruded Aluminum Profiles in
Alloys lxxx to 7xxx series. This is our major competency. Our business
strategy is to book maximum part of our installed capacity for supply
directly to end- users.
Company's Presence across several verticals
The company's product portfolio comprises of extrusions in soft, medium
and high strength aluminium alloys. It manufactures aluminium profiles
for architectural applications such as windows, doors, door handles,
modular furniture etc. Its profiles are also used in Aluminium Form-
work. Its products are used in rail coach windows & doors, electrical
gadgets, transmission line hardware, hydraulic gear pumps, elevators,
pneumatic cylinders and defence applications. Along with diversified
end-user industries the company has strong client base. Its top 10
clients do not account for more than 25% and no single client accounts
for more than 10% of its total revenues. The company's diverse customer
base provides revenue stability and risk mitigation to a slowdown in
any particular sector.
The Company enters into long-term contracts with its suppliers for its
annual raw material requirements, and receives cumulative annual
discounts from Vedanta Aluminium Ltd and. National Aluminium Company
Ltd on lifting pre-specified quantities.
Rich Market Presence
Our company markets its entire product range through a nationwide
network of regional marketing offices and sales units. Their reach and
prompt action helps the Company to supply timely to local markets.
The Company possesses a portfolio of over 500 reputed customers. Nearly
80 to 85% of the revenues in 2014-15 was derived out of sales to
age-old customers. Vast number of customers spread across the country
is our Company's forte.
FUTURE OUTLOOK
Extrusions
Our Company has an installed capacity to produce 15000MT of extrusions
per annum. As against this, our production for the year 2014-15 was
only 8938 MT. We thus have a significant spare capacity to increase
production and sales volume.
The economic environment in the coming decade in India is likely to be
highly conducive to the growth of aluminium extrusion sector thanks to
the reviving fortunes of building and construction sector, massive
thrust towards use of solar energy, new applications in the
transportation sector, etc. The future of the aluminium industry is
intrinsically related to the issue of global warming and emission of
greenhouse gases. Production of aluminium is an energy intensive
process and as per the International Aluminium Institute (IAI), new
stocks of aluminium accounts for 1 % of total greenhouse gas emissions
by humans. Therefore, a key focus of the industry is the reduction in
emissions by promoting aluminium recycling and expanding use of the
metal in automobiles, trains and aircrafts. Estimates provided by the
IAI depict that every kilogram of a heavier material that is replaced
by aluminium, in a vehicle results in the reduction of 22 kilograms of
carbon dioxide over the lifetime of the vehicle.
Innovative products and solutions are also central to the future demand
for aluminium and growth of the industry. Fuel-cell powered cars are
promising applications that can potentially become a high growth
segment for the aluminium industry. This is because aluminium could be
used to produce hydrogen fuel efficiently, which would help in the
growth of fuel-cell powered cars and thereby arrest greenhouse
emissions.
The segment-wise expected demand growth is given hereunder:
1. Power Sector -
In India, the electrical sector is the largest consumer of this metal.
Bulk of the Aluminium usage is in overhead conductors and power cables
used in transmission and distribution of electricity. Aluminium is used
in switchboards, coil windings, capacitors and many other applications
as well. The strongly growing LED lights market in India will drive the
demand for heat sinks, along with several other applications in
electrical and electronic sectors.
2. The vibrant Real Estate Sector in our country -
Investments in infrastructure and housing segments are likely to boost
demand for aluminium extruded profiles. Customers worldwide are
growing ecologically conscious and are keen on using environmentally
sustainable products coupled with rising incomes and demand for
enhanced quality. Aluminium extrusions are being used in commercial and
residential buildings as well as in shopping centers, bridges and
stadiums, and also in restoring and reconstructing historical
buildings.
3. Rapidly growing Automobile Industry
- The Automobile sector in India has been the key force behind the
demand for aluminium castings. India's emergence as a hub for the
manufacture of automobiles and the global trend towards reducing the
weight of automobiles, is acting as growth factor in this area.
4. Engineering Applications -
The engineering sector is one of the largest sectors in Indian
industry. Aluminium is widely used in engineering applications,
machinery and equipment in India.
5. The Sustained Agriculture Emphasis in our Country
- The usage of Aluminium is on a constant rise in the agricultural
sector in this country as aluminium extruded agricultural pipes are
popular due to their versatility and affordability.
6. Solar Energy Industry -
Aluminum extrusions is aiding in converting sunlight to green power
with strong and light-weight frames and structures.Aluminium extrusions
can be used to create a comprehensive framework for solar panels in a
variety of situations, including frames, supports and connectors. The
versatility of aluminium extrusions makes them the preferred choice over
other metals in this sector.
7. Indian Defence Sector -
Missiles, rockets and spacecraft, all use Aluminium. In this sector,
aluminium also finds its usage in the construction of bridges,
pre- fabricated houses, etc.
The Indian Aluminium extrusions industry is fast becoming vibrant with
strong growth prospects and high demand. Conventional applications
such as curtain walls, windows and doors as well as new applications
such as formwork and scaffolding are the driving factors behind demand
for aluminium extrusions in India.
Power Transmission & Distribution
India is the fourth largest in power generation in the world.
Presently, India has more than 144,565MW in installed capacities and a
250,000 ckt. kms in power transmission lines. It is the sixth largest
consumer of electricity in the world with rapid rise in consumption
growth (avg. Growth rate of consumption around 14%). Thermal power
plants constitute 66% of the installed capacity, hydroelectric about
19% and rest being a combination of wind, small hydro, biomass,
electricity from waste and nuclear.
The largest utilization area of the aluminum in this field is the power
transmission lines. The steel-core aluminum conductors have become the
only material preferred for the high voltage power transmission lines.
Aluminum is widely used in the underground cables, electrical cable
ducts and motor coil windings as well. In electronics, the frames,
chips, transistor heat sinks, data recording systems and the electronic
equipment cases are inducted in the utilization areas of aluminum.
Wireless communication with wireless sensors is another promising
alternative medium for transmission and distribution systems.
Power Transmission and Distribution Hardware Fittings are required for
use on Overhead Transmission and Distribution Lines for connecting
Insulators with Tower/ Pole Cross Arms and Insulators with conductors.
The Company has manufacturing facilities for casting of Aluminium
Alloys, manufacturing of Extruded products in Aluminium & its Alloys,
Wire Drawing, Helical Products, Fabrication of Ferrous & Non-Ferrous
Components, Argon Welding, Electric Arc Welding, Machining, Bundle
Spacer Assembly, Vibration Damper Assembly, Conductor Accessories,
Clamp Connectors for Hardware Assembly, and manufacturing of Tools,
Dies & Moulds.
Aluminium is also used in insulated and underground cables laid in
large populated urban areas and in reserved forests (to avoid
deforestation), Round Tubes are used for corona control rings, grading
rings, mid-span compression joints, dead-end clamps and jointing
sleeves, among others, signifying huge opportunities for extrusions in
the power sector.
During the financial year 2014-15 the Company recorded a sales turnover
of T & D Hardware amounting to Rs. 201 lacs (approx.) against Rs. 378
lacs in the previous financial year. The Company has successfully
registered itself as a supplier of its products with a number of State
Electricity Boards during the year and the process is continuing. The
process will get further momentum as company achieves requirements of
minimum years of supply track record and experience, with each passing
year.
Challenges in the Indian extrusions market
There are a number of disadvantages in the Indian aluminum extrusions
industry amongst which cost is a key issue. High operational costs,
higher administrative expenses per unit of manufacturing and sale of
finished products are major hindrances.
However, there are certain other issues which the aluminium industry in
India needs to address such as availability and quality of billets,
especially in hard alloys. There is a perception in some quarters that
the quality of billets that are imported from Dubai, Qatar or from
Europe is significantly higher than what is available locally. The
development of extrusion business depends on the ability of an extruder
to source the high quality billets in multiple alloys and the ability
to get manufacturing waste recycled locally. From the environmental
perspective, it is important to have recycling plants that produce high
quality billets from both manufacture waste and end of life scrap. Many
Indian extrusion manufacturers do not have their own finishing lines
for powder coating or anodising and depend on external resources for
this value addition. Yet another issue facing the Indian aluminium
extrusion sector is the lack of scale with far too many small players
scattered across the country and there are just a handful of large
players who can invest in the latest technology. Hence, it is time for
the stakeholders of the aluminium extrusion sector in India, viz. the
extruders, primary aluminium producers, recyclers and the end users to
converge and put this sector firmly on the high growth trajectory.
RISKS AND AREAS OF CONCERN
Our Company has formulated a well-defined risk- management strategy to
detect areas of risks at an early hour and thereby mitigating them
promptly and efficiently and this is in conformity with the new
regulatory requirements. The Company perceives the following risks and
concerns :
a) Market Competition : Operating in a dynamic market environment with
fluctuating price risks combined with competition from new entrants in
the field of extrusion manufacturing is posing as a hindrance to the
growth prospects of our Company.
Our Company is deliberately venturing into innovative avenues of
aluminium extrusion alloys in order to set its mark in the emerging
markets where demand is higher and return is reasonable.
b) Government Policy risk: The Government policies in the present
economic state of affairs are pro-industry and pro-growth which
minimizes the inherent policy risk. But at times there are delays in
clearances /approvals by Govt, agencies in obtaining lease renewals for
land mortgaged with financial institutions and banks. This adversely
affects the financial facilities obtained from the Banks. A little
attention towards development and budgetary support from the government
will help in a big way to the overall benefit of the economy, as well
as our Company.
c) Competition from local manufacturers: The Aluminium extrusions
industry in this country is highly fragmented. Local market is growing
at a rapid pace as customers prefer local extruders for faster supplies
which save both time and cost. Competition with local extruders has
compelled us to sacrifice our margin to counteract the effect of higher
Freight and Central Sales Tax. Our location in a relatively
under-developed part of the country and the demand in this part are not
good enough to account for our capacity. We have to sell a substantial
quantity (over 65%) in other parts of India where our realization is
lower compared to local supplies due to impact of the high freight and
Central Sales Tax.
d) Retention of experienced manpower: Our Company believes without the
efforts of its employees it is not possible to accomplish
organizational goals. A training oriented employee skill-development
approach coupled with innovation and motivation aids the Company to
retain its valued human resources.
e) Price Fluctuation Risk: Price is the major driving factor,
particularly the price of raw materials, and India is one of the most
price sensitive markets in the world. Regular supervision of aluminium
metal inventory in order to get maximum benefit or alternatively to
curtail loss by monitoring inventory levels in each circumstance is a
major challenge, and this is regularly scrutinized at the highest level
in the Company.
f) Trade Union Activities: Our Company's Workmen's unions operate under
the control of three different political parties. It is a challenge to
meet the growing demands from the Unions, who at times put irrational
burden on the management due to inter-union enmity in a bid to secure
the support of larger number of workmen.
RISK MANAGEMENT
Risk Management is a key attribute of the Corporate Governance
Principles and Code of Conduct of our Company and it aims to deal with
the governance practices across the Company's actions. Risk Management
practices and policies enable the Company to proactively handle
uncertainty and changes in the internal and external environment to
limit negative impacts.
Your Company has a system based approach to business risk management.
Backed by a well-planned internal control system, the current risk
management agenda consists of the following elements:
- Enterprise Risk Management Policy manual clearly lays down the
strategy, policy and initiatives in relation to risk management.
- A strong and independent Internal Audit Function carries out risk
focused audits enabling identification of areas where risk management
processes may need to be improved. The Audit Committee of the Board
reviews Internal Audit findings and provides strategic guidance on
internal controls. The Audit Committee closely monitors the internal
control environment within the Company and ensures that Internal Audit
recommendations are effectively implemented.
- The Senior Management of the Company periodically reviews the risk
management framework to effectively address the emerging challenges in
a dynamic business environment.
The Policy is in compliance with amended Clause 49 of the Listing
Agreement with Stock Exchanges which requires the Company to lay down
procedure for risk assessment and for mitigating risks.
SEGMENT-WISE / PRODUCT-WISE PERFORMANCE
The Company has two business segments i.e. manufacturing of Aluminum
Extruded Products and manufacturing of Power Transmission and
Distribution Line Hardware. However, the Company does not fall under
any of the criteria laid down under AS-17 and hence Segment Reporting
is not applicable.
INTERNAL CONTROL SYSTEM
The Company has a strong and pervasive internal control system to
ensure well-organized use of the Company's resources, their security
against any unauthorized use, accuracy in financial reporting and due
compliance of the Company's policies and procedures as well as the
Statutes. Internal Audit reports are regularly placed before the Audit
Committee and management analysis of the same is done to ensure checks
and controls to align with the expected growth in operations. The
Internal audit is carried out by an independent firm of Chartered
Accountants on regular basis and remedial actions are taken when any
shortcomings are identified.
The Audit Committee reviews the competence of the internal control
system and provides its guidance for constant upgrading in the system.
INFORMATION TECHNOLOGY
The Company is continuously working on the Information Technology to
get the maximum benefits for the Organization. The Company is
successfully using a software system which is single, comprehensive,
integrated solution called SAP Business One application. With the use
of this integrated software there have been profound improvements in
all spheres of its activities.
HUMAN RESOURCE AND INDUSTRIAL RELATIONS
Our Company believes that targets of the Company can only be reached
with efforts from all its employees. Our Company recognizes that job
satisfaction requires congenial work environment that promotes
motivation among employees and therefore results in enhanced
productivity, and innovation and also provide avenues for employee
training and development to identify their potential and develop their
careers in the Company.
The Company values contribution of its employees and follows the
principle of informing all its employees about its future growth
strategies.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
At Century Extrusions Ltd., Corporate Social Responsibility has always
been an integral part of our corporate philosophy and it was followed
much before the passing of the Companies Act, 2013. Aluminium being a
green metal is less likely to cause environmental pollution as the
processes employed are not harmful to the environment and are
energy-efficient.
Our Company values safety as a prime concern. The manufacturing process
and plant of our Company adhere to various safety standards laid down
by regulatory authorities. Our Company has received the prestigious
OHSAS 18001:2007 certification for its relentless commitment towards
maintenance of Occupational Health and Safety Management System
Standards.
Though our Company does not fall under the purview of Section 135 of
the Companies Act, 2013, still it continues to undertake various
activities for the welfare of the society by making contributions to
educational institutions and for medical treatment of under-privileged
children and other charitable causes.
The Company has constituted a Corporate Social Responsibility Committee
to look after its CSR initiatives in order to integrate interest,
welfare and aspirations of the community with those of the company
itself in an environment of partnership and mutual trust for inclusive
development. The Chairman of the Committee is the Board Chairman and
other Members include Mr. M.G. Todi, Mr. V. Jhunjhunwala, Mr. R.K.
Sharma and Mr. A.K. Hajra.
DIRECTORS
Mr. M.G. Todi, Mr. V.K. Mushran, Mr. R.K. Sharma and Mr. A.K. Hajra
being re-appointed as Independent Directors for a term of 5years at the
Annual General Meeting (AGM) held on 5th September, 2014 are not liable
to retire by rotation at this AGM.
Mr. V. Jhunjhunwala retires from directorship of the Company by
rotation, and being eligible, offers himself for re-appointment.
The Companies Act, 2013 requires that a Woman Director should be a
member of the Board of Directors. Ms. Suhita Mukhopadhyay has been
appointed as an Additional Director of the Company w.e.f. 31st March,
2015 and her appointment is subject to the approval of Members of the
Company at the ensuing AGM.
Brief resume of the Directors proposed to be appointed/re- appointed,
nature of their expertise in specific functional area and the names of
the Companies in which they hold directorship and
membership/chairmanship of Board Committees, as stipulated under Clause
49 of the Listing Agreement with the Stock Exchanges, are provided as
an annexure to the Notice convening the Annual General Meeting.
KEY MANAGERIAL PERSONNEL
Mr. M.P. Jhunjhunwala, Chairman & Managing Director of the Company who
is also a Whole-Time Director (WTD) and Ms. Sumana Raychaudhuri,
Company Secretary both have been appointed before commencement of the
Companies Act, 2013 and are the Key Managerial Personnel.,
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Company being a listed Company, Policy on Directors' appointment is
to follow the criteria as laid down under the Companies Act, 2013 and
the Listing Agreement with Stock Exchanges and good corporate
governance practices. Emphasis is given to persons from diverse fields
or professions.
The guiding Policy on remuneration of Directors, Key Managerial
Personnel and employees of the Company is that:
* Remuneration to Key Managerial Personnel, Senior Executives,
Managers, Staff and Workmen is commensurate with the industry standards
in which it is operating taking into account the performance leverage
and factors so as to attract and retain talent.
* For Directors, it is based on the Shareholders' resolutions,
provisions of the Companies Act, 2013 and Rules framed therein,
circulars, guidelines issued by the Central Government and other
authorities from time to time.
DIRECTORS' RESPONSIBILITY STATEMENT
The Board of Directors of the Company confirms:
i. that in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
ii. that the selected accounting policies were applied consistently and
the directors made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at March 31, 2015 and of the profit or loss of the
Company for the year ended on that date;
iii. that proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for
preventing and detecting fraud and other -irregularities;
iv. that the annual accounts have been prepared on a going concern
basis.
BRICKWORK RATING
BRICKWORK has assigned its 'BWR BBB-' rating to the cash credit
facility of Century Extrusions Ltd (CEL) and affirmed its rating on
CEL's letter of credit, bank guarantee and term loan facilities at 'BWR
A3'. The ratings upgrade has factored, inter alia, experience of the
promoters in manufacturing aluminium and allied products, long standing
corporate relationship with reputed customer base, consistent operating
performance with cash profits and moderate gearing level. BWR has also
positively taken note of the developments regarding repayment of a loan
availed by West Bengal Industrial Development Corporation (WBIDC). The
rating is, however, constrained by volatility associated with raw
materials and finished goods prices and consequent inadequate debt
protection ratios
AUDITORS / AUDITORS' REPORT
The auditors, M/s. ALPS & Co., Chartered Accountants, retire at the
ensuing Annual General Meeting and have confirmed their eligibility and
willingness to accept office, if re-appointed. There are no
qualifications or adverse remarks in the Auditors' Report, which
require any clarification/explanation.
COST AUDITORS
As per the directive of Central Government pursuant to the provisions
of Section 148(3) of the Companies Act, 2013, your Directors have
re-appointed M/s. N Radhakrishnan & Co., a firm of Cost Accountants, to
conduct the audit for the year ended 31st March, 2015. E-Form CRA-2 has
been filed to give effect to the appointment of cost auditors.
PUBLIC DEPOSITS
The Company did not invite or accept any deposit from the public under
Section 73 of the Companies Act, 2013
PARTICULARS AS PER SECTION 134(3) OF THE COMPANIES ACT, 2013
The information relating to Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo required under
Section 134(3) of the Companies Act, 2013 read with Rule 8(3) of
Companies (Accounts) Rules, 2014, is set out in a separate statement
attached to this report and forms part of it. The Company had no
employee of the category indicated under section 134(3) (q) of the
Companies Act, 2013.
CORPORATE GOVERNANCE
The Company has been proactive in following the principles and
practices of good Corporate Governance as an important step towards
building investor confidence, improve investors' protection and
maximize long-term shareholder value.
The Company has complied with the Corporate Governance Code prescribed
by the Stock Exchanges and also stringently followed the Corporate
Governance Guidelines as stipulated by SEBI. A detailed report on
Corporate Governance along with Auditors' Certificate on compliance
with the mandatory recommendations on Corporate Governance is annexed
to this report.
SECRETARIAL AUDIT
A Secretarial Audit was carried out by the Secretarial Auditor Mr. K.C.
Khowala, Practicing Company Secretary pursuant to provisions of Section
204 of the Companies Act, 2013. The Secretarial Auditor's Report is
annexed herewith and forms part of the Director's Report.
ACKNOWLEDGEMENT
We express our sincere gratitude to our customers, vendors, investors
and bankers for their continued support during the year. We place on
record our sincere appreciation of the dedication and commitment of all
employees in achieving excellence in all spheres of business
activities.
We thank the Government of India, the Customs and Excise Departments,
the Sales Tax Department, the Income Tax Department, the State
Government and other Government agencies for their support, and look
forward to their continued support in the future.
CAUTIONARY STATEMENT
Statements forming part of the Management Discussion and Analysis
covered in this report may be forward- looking within the meaning of
applicable securities laws and regulations. Actual results may differ
materially from those expressed in the statement. The Company takes no
responsibility to publicly amend, modify or revise any forward looking
statements on the basis of any subsequent developments, information or
events.
For and on behalf of
the Board of Directors
M P Jhunjhunwala
Chairman & Managing Director
Date: 2nd July, 2015
Place: Kolkata
Mar 31, 2014
Dear Members,
FINANCIAL PERFORMANCE
The Company realized a sales turnover of Rs.21300 lacs as against Rs.
19944 lacs in the previous financial year recording an increase of
about 6.8%. The Power
Transmission & Distribution Hardware (Power T & D Hardware) division
registered a sale of Rs.347 lacs as against Rs.239 lacs in the previous
year. The balance of the turnover was contributed by Company''s
principal business i.e. by Aluminium Extrusions Division.
The Loss after Tax (LAT) for the year is Rs.104 lacs as against Rs.2
lacs for the previous financial year 2012-13 reflecting decline in
financial performance due to:
a) Significant increase in Electricity tariff and fuel cost.
b) Significant increase in Finance Cost due to hardening of interest
rates in India.
c) Apparent slowdown in general economic activity.
Cost control being the basis of its operations and to raise its output
of value-added products, the Company is always committed to alleviate
costs in all spheres of its operations basically to retain higher
returns. The Company continually invests in upgradation of Technology
for cost reduction & improved performance.
(Rs.in lacs, except per share data)
Year ended March 31 2014 2013
Sales 21300 19944
Profit before Interest, Depreciation
and impairment of Assets 869 1194
Interest 682 713
Profit before Depreciation and Impairment of Assets 187 421
Depreciation and Impairment of Assets 441 442
Net Profit (254) (21)
Provision of Taxation (150) (19)
Profit after Tax (104) (2)
Profit brought forward 1751 1753
Balance carried to Balance Sheet 1647 1751
DIVIDEND
Due to absence of distributable profits during the year under review
the Board of Directors do not recommend a dividend payout.
PRODUCTION
The Aluminium Extrusions production for the year was 10833 MT as
against 10086 MT in previous financial year showing a growth of 7.4 %.
The Power T & D Hardware achieved production of Rs.347 Lacs during the
year as against Rs.239 Lacs during the previous year. The industry has
a longer gestation period
of roughly 4 to 6 years primarily because the prospective customers,
mainly the State Power Distribution Companies require prior supply
experience before they allow fresh participants in their tenders. The
Company has already completed five financial years of operation in the
Power T & D Hardware business and expects this division to contribute
higher turnover and profitability from 2014-15 onwards.
COMPANY OVERVIEW AND GROWTH STRATEGY
Customer-centric approach and customer focused service have been our
continued endeavour for business development. The customer demand in
the infrastructure area, under the wings of which one can put
everything from the real estate to power plants, is healthy in the
medium to long term business planning.
Success Drivers
Our Legacy: With an experience spanning a rich 23 years, our Company
enjoys a number of first mover advantages comprising a comprehensive
understanding of the aluminium and aluminium extrusions market, reputed
brand and a strong customer base.
Integration: We possess in-house facilities for -
- Melting, casting and homogenization of billets;
- Extrusions manufacturing with three press lines;
- Die manufacturing,;
- Manufacturing various value added products of extrusions for
engineering applications, and
- Manufacturing Power Transmission & Distribution Hardware
With 3 extrusion press lines, the Company has a capacity to produce
15000MT of Aluminium Extrusions, which as per the information available
with the Company, is the 3rd largest facility in India as on date.
Die Library: The Company possesses an inventory of more than 5000 dies
to manufacture over 3500 profiles. The Company maintains back-up dies
for meeting the requirements of fast moving profiles.
Availability of raw material: The Company accesses raw material
(aluminium ingots and billets) from three renowned and proximate
primary metal manufacturers- Vedanta Aluminium, Nalco and Hindalco, The
Company is one of India''s largest institutional aluminum
ingot/billets consumers with corresponding purchase economies.
Quality assurance: The Company''s manufacturing facility is accredited
with the prestigious ISO-9001:2008 certification endorsing its strong
quality systems. Or Company continues to emphasize on maintaining the
utmost quality and safety standards in its factory. Our Company is also
ISO 14001:2004 and OHSAS 18001:2007 certified.
The Company supplies extrusions as per tolerances laid down by the
Bureau of Indian Standards in accordance with BIS: 2673-1979,
BIS:3965-1981 and BIS : 6477-1983, and with even tighter tolerances as
per customer needs.
The sharp focus on Quality in all its initiatives has enabled our
Company to launch some specific value-added services
Product applications: We manufacture extruded products for varied
applications, viz. :
- Profiles for Architectural Applications such as Building Systems,
Structural Glazing, Curtain Walls, Aluminium Rolling Shutters, Windows,
Doors, Partitions, False Ceilings, Tower Bolts, Hand Rails, Door
Handles, Hinges, Drapery Rods, Modular Furniture, etc.
- Profiles for Aluminium F orm Work
- Profiles for Road Transport Sections
- Profiles for Rail Coach Windows & Doors
- Profiles for manufacture of Automobile Components
- Profiles for Heat Transfer in Electronics & Electrical Gadgets
- Profiles for Electrical applications such as Tubes and Flats for Bus
Bars, Transmission Line Hardware such as P.G. Clamps, H-Connectors,
Repair Sleeves, Lugs, Solar Panels etc.
- Profiles for Engineering Applications such as Motor Housings, Gear
Pump Casings, Ferrules, A.C.Louvres, Machinery Parts, Elevators,
Pneumatic Actuators, Pneumatic Cylinders, Valve Bodies, etc.
- Profiles for various Defence Applications and many more.
The Company also has necessary set up to supply extruded and cold drawn
round bars and hexagonal bars in straight lengths for various
engineering applications. It also has a set up to supply extruded and
cold drawn rods/wires in coil form to be used as armour rods, lamp pin
stock, metallizing wire, rivet stock, welding filler wire (MIG & TIG),
etc.
Customer profile: The Company possesses a portfolio of over 500 reputed
customers. The Company has retained most of the customers over a period
of 23 years.
Our Company is in a position to supply Extruded Aluminum Profiles in
Alloys 1xxx to 7xxx series. This is our major strength. Our Business
strategy is to book maximum part of our installed capacity for supply
directly to end-users.
Company''s Presence across several verticals
The company''s product portfolio comprises of extrusions in soft,
medium and high strength aluminium alloys. It manufactures aluminium
profiles for architectural applications such as windows, doors, door
handles, modular furniture etc. Its products are used in rail coach
windows and doors, electrical gadgets, transmission line hardware, gear
pumps, elevators, pneumatic cylinders and defense applications. Along
with diversified end- user industries the company has strong client
base. Its top 10 clients account for more than 25% and no single client
accounts
for more than 10% of its total revenues. The company''s diverse
customer base provides revenue stability and risk mitigation to a
slowdown in any particular sector.
The Company enters into long-term contracts with its suppliers for its
annual raw material requirements, and receives discounts from Vedanta
Aluminium Ltd and. National Aluminium Company Ltd on lifting
pre-specified quantities.
Rich Market Presence
Our company takes pride in establishing strong bonding with all its
customers and vendors as we think they are our partners-in-progress. We
relentlessly work towards building deep ties with our vendors to
develop specialized products in order to cater to diverse and evolving
needs of our clientele.
A network of branches and sales offices in close proximity to the
customers enable us to ensure efficient, effective and timely service.
The Company possesses a portfolio of over 500 reputed customers. The
real potency of the Company lies in its large number of customers in
different customer segments spread in different geographical locations
in a developing economy like India.
INFORMATION TECHNOLOGY
The Company is continuously working on the Information Technology to
get the maximum benefits for the Organization. The Company is
successfully using a sofware system which is single, comprehensive,
integrated solution called SAP Business One application. With the use
of this integrated software there have been profound improvements in
all spheres of its activities.
HUMAN RESOURCE AND INDUSTRIAL RELATIONS
Human Resource is the most valuable asset in this planet. Our Company
believes in providing a congenial and healthy work environment and
emphasizes on performance appraisal and on-the-job trainings to value
and retain talented manpower.
Our Company appreciates that individual efforts combined with
integrated teamwork facilitate a concern to reach its defined targets
Effective human resource management systems and practices are developed
and followed by the organization to create a proactive work culture to
ingrain core values.
Our Company believes that employees are the backbone of the
organization. The relations with employees have throughout the year
remained cordial.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
The fundamental corporate philosophy of our Company is the guiding
force behind ensuring sound Corporate Social Responsibility (CSR). The
Aluminum Sector is one of the industries that cause least environmental
pollution. The Aluminum production methods do not harm the environment
as they are energy efficient.
Safety is an integral art of your Company''s operations and is viewed
with prime concern. The manufacturing process and plant of our Company
adhere to various safety standards laid down by regulatory authorities.
Our Company has received the prestigious OHSAS 18001:2007 certification
for its relentless commitment towards maintenance of Occupational
Health and Safety Management System Standards.
Our Company continues to undertake various activities for the welfare
of the society by making contributions to educational institutions and
for medical treatment of under- privileged children and other
charitable causes.
The Company has over the years pursuing as part of its corporate
philosophy, an unwritten CSR policy voluntarily which goes beyond mere
cosmetic philanthropic gestures and integrates interest, welfare and
aspirations of the community with those of the company itself in an
environment of partnership and mutual trust for inclusive development.
Even though our Company has always been conscious about its carbon
footprint on the environment, CSR activities in its true sense
haven''t been initiated, but being a responsible corporate citizen our
Company however is greatly committed to conservation of environment and
ensures to conduct all its industrial operations with minimal impact on
the environment.
DIRECTORS
Mr. V. Jhunjhunwala retire from directorship of the Company by
rotation, and being eligible, offer themselves for re- appointment.
In strict compliance with Section 149 of the Companies Act, 2013 Mr.
V.K. Mushran, Mr. M.G. Todi, Mr. R.K. Sharma and Mr. A.K. Hajra retire
from directorship at the upcoming Annual General Meeting and being
eligible offer themselves for appointment. They will be designated as
"Independent director and their tenure of directorship as an
Independent Director, if approved by the Members of the Company will be
for a term of 5 years commencing on and from the date of the Annual
General Meeting in which they are elected by Members of the Company.
Brief resume of the Directors proposed to be appointed/re- appointed,
nature of their expertise in specific functional area and the names of
the Companies in which they hold directorship and
membership/chairmanship of Board Committees, as stipulated under clause
49 of the listing agreement with the Stock Exchanges, are provided as
an annexure to the Notice convening the Annual General Meeting.
BRICKWORK RATING
BRICKWORK has assigned its ''BWR BB /Stable'' rating to the cash
credit facility of Century Extrusions Ltd (CEL) and affirmed its rating
on CEL''s letter of credit, bank guarantee and term loan facilities at
''BWR BB /Stable/A4 ''. The ratings continue to reflect CEL''s
healthy financial risk profile, marked by a low gearing and healthy
interest coverage ratio, diversified end-user profile, and established
relationships with its suppliers. These rating strengths are partially
offset by CEL''s large working capital requirements, and
susceptibility to volatility in raw material prices.
DIRECTORS'' RESPONSIBILITY STATEMENT
The Board of Directors of the Company confirms:
i. that in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
ii. that the selected accounting policies were applied consistently and
the directors made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at March 31, 2014 and of the profit or loss of the
Company for the year ended on that date;
iii. that proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv. that the annual accounts have been prepared on a going concern
basis.
AUDITORS / AUDITORS'' REPORT
The auditors, M/s. ALPS & Co., Chartered Accountants, retire at the
ensuing Annual General Meeting and have confirmed their eligibility and
willingness to accept office, if re-appointed. There are no
qualifications or adverse remarks in the Auditors'' Report, which
require any clarification/ explanation.
COST AUDITORS
As per the directive of Central Government pursuant to the provisions
of Section 233B of the Companies Act, 1956, our Directors have
re-appointed M/s. N Radhakrishnan & Co. a firm of Cost Accountants, to
conduct the cost audit for the year ended 31st March, 2014.
PUBLIC DEPOSITS
The Company did not invite or accept any deposit from the public under
Section 58A of the Companies Act, 1956.
PARTICULARS AS PER SECTION 217 OF THE COMPANIES ACT, 1956
The information relating to Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo required under
section 217 (1) (e) of the Companies Act,1956, is set out in a separate
statement attached to this report and forms part off it. The Company
had no employee of the category indicated under Section 217(2A) of the
Companies Act, 1956.
CORPORATE GOVERNANCE
The Company has been proactive in following the principles and
practices of good Corporate Governance as an important step towards
building investor confidence, improve investors'' protection and
maximize long-term shareholder value.
The Company has complied with the Corporate Governance code prescribed
by the Stock Exchanges. A detailed report on corporate Governance along
with Auditors'' Certificate
on compliance with the mandatory recommendations on Corporate
Governance is annexed to this report. ACKNOWLEDGEMENT
We thank our customers, vendors, investors and bankers for their
continued support during the year. We place on record our appreciation
of the contribution made by employees at all levels.
We thank the Government of India, the Customs and Excise Departments,
the Sales Tax Department, the Income Tax Department, the State
Government and other Government agencies for their support, and look
forward to their continued support in the future.
For and on behalf of
the Board of Directors
Date: 27th May 2014 M P Jhunjhunwala
Place: Kolkata Chairman & Managing Director
Mar 31, 2013
Dear Members,
The are pleased to present the 25tt Annual Report of the Company for
the year 2012 - 2013.
Growth of the Indian economy
The world economy is yet to recover from the crisis of 2008- 2009 as
the global growth rate dropped to 3% in 2012. This slowdown is expected
to continue. Unlike in 2010 and 2011, emerging markets did not pick up
the slack in 2012. The sluggish pace of the world economy can well be
attributed to the uncertainties in different parts of the globe, i.e.,
post- election ''fiscal debate'' question in the United States to the
Chinese leadership transition and reforms in the Euro-Asia. Majority
of the European nations are trapped under vicious circles of debt, low
growth and massive unemployment.
Indian economy is growing steadily despite the economic crisis that has
engulfed the major economies of the world. Grand Thornton Global
Dynamism Index has denoted India as the fifth best country in the world
for dynamic growing businesses. A drop in private investment over
rising policy uncertainty exacerbated supply blockage in India, which
consequently led to headline inflation that was high compared to most
Asian economies in 2012.
According to CR1SIL, India''s economic growth is expected to accelerate
to 6.7 % in 2013-14 from the projected rate of 5 % in the current
financial year on a revival of consumption. Factors like pick-up in
agriculture, predictions about normal monsoon, increased welfare
expenditure, moderation in inflation, lower interest rates and higher
government spending all of which in a combined way contributing to the
private consumption demand. Moreover these factors have benefited
sectors such as consumer durables, hotels & restaurants and financial
services.
The growth in GDP during 2012-13 is estimated at 5% as compared to a
growth rate of 6.2 % in 2011-12 and is the lowest in a decade on
account of poor performance of manufacturing, agriculture and services
sector..
The Scenario of the Aluminum Extrusion Industry
Our country is signified as the fifth largest producer of aluminium in
the world. Aluminium is the biggest non- ferrous industry in the world
economy and one of the leading industries in the Indian economy.
Aluminium has uses in sectors like automotive, transportation,
packaging, building & construction, marine, consumer durables, solar,
industrial equipments, defence security equipments and electricity and
among all these in India, the power sector is the largest consumer of
the metal closely followed by building & construction and automotive
sectors.
The building & construction and automotive sectors have always been
major patrons of aluminium extruded products.
Aluminum being lightweight, durable and anti-corrosive is used in large
quantities for cladding the roofs and facades of the buildings and for
manufacturing the doors and windows, stairs, roof frames, scaffolding,
form work and green houses. Furthermore, utilization of aluminum is
increasing in the highway traffic and direction signalization systems
as well as expressway parapet walls and bridges. In the marine craft,
especially in the boats, the center of gravity of the aluminum
superstructures being less, the balance of the hull is improved,
allowing for a larger functional volume. The sail masts of the smaller
boats and yachts are made of aluminium. 70% of the weight of an
airplane is aluminum. Aluminum has provided the largest contribution to
the development of the airplanes, more so to the aviation sector, due
to its lightness along with its durability.
Indian aluminium extrusion industry expanded at a swift pace during the
last two decades. Infrastructural changes in the country like
construction of shopping malls and high- rise buildings, whether
residential or commercial have led to a surge in demand of aluminium
extruded products. Teaming up with these sectors, are defence and
railway requirements. Its utility and versatility coupled with
affordable production cost marks it as one of the most sought after
commodity in this country. However, extrusions industry like other
industries could not combat the general recession and hence the demand
for extrusions slightly subdued.
FINANCIALPERFORMANCE
The Company achieved a sales turnover of Rs. 19944 lakhs as against Rs.
21192 lakhs in the previous financial year recording a fall of about 6
%. The Power Transmission & Distribution Hardware (Power T & D
Hardware) division registered a sale of Rs.239 lakhs as against Rs.459
lakhs in the previous financial year. The balance of the turnover was
contributed by Company''s principal business i.e. by Aluminium
Extrusions Division.
The Losses for the year is Rs. 2 lakhs as against Profit after Tax of
Rs. 320 lakhs in the previous financial year reflecting decline in
financial performance. The decline in performance during the year is
mainly due to the following factors:
(1) Due to continued slowdown in general economic activity, the Company
has not been able to increase prices in spite of increase in
manufacturing cost for following reasons:
a) Payment on account of Entry Tax pursuant to the West Bengal Tax on
Entry of Goods Into Local Areas Act, 2012;
b) Significant increase in Electricity tariff and fuel cost;
(2) Production loss on account of replacement of extrusions handling
system.
Cost control being the basis of its operations and to raise its output
of value-added products, the Company is always committed to mitigate
costs in all spheres of its operations in order to maintain higher
returns. The Company continually invests in upgradation of Technology
for cost reduction & improved performance. The Company has taken steps
to counter the above factors as have been mentioned elsewhere and
expects to achieve higher Sales Turnover as well as profitability in
the next financial year.
(Rs. in lacs, except per share data)
Year ended March 31 2013 2013
Revenue from Operations 19944 21192
Profit before Interest & Depreciation 1194 1433
Interest & Finance Charges 713 749
Profit before Depreciation 421 684
Depreciation 442 413
Net Profit/(Loss) (21) 271
Tax Expenses (19) (49)
Profit/(Loss) after Tax (2) 320
Profit brought forward 1753 1433
Balance carried to Balance Sheet 1751 1753
DIVIDEND
Due to losses in the year under review, the Board regrets their
inability to recommend any dividend for the year 2012-13.
COMPANY OVERVIEW AND GROWTH STRATEGY
Improved service, prompt response and wider reach to dealers,
distributors and the satisfaction of customers have been our continued
endeavour for business development.
Success Drivers
Our Legacy: With an experience spanning a rich 22 years, our Company
enjoys a number of first mover advantages comprising a comprehensive
understanding of the aluminium and aluminium extrusions market, reputed
brand and a strong customer base.
Integration: We possess in-house facilities for -
- Melting, casting and homogenization of billets,
- Extrusions manufacturing with three press lines Die manufacturing,
- Manufacturing various value added products of extrusions for
engineering applications, and
- Manufacturing Power Transmission & Distribution Hardware
With 3 extrusion press lines, the Company has a capacity to produce
15000MT of Aluminium Extrusions, which as per the information available
with the Company, is the 3rd largest facility in India as on date.
Die Library: The Company possesses an inventory of more
than 5000 dies to manufacture over 3500 profiles. The Company maintains
back-up dies for meeting the requirements of fast moving profiles.
Availability of raw material: The Company accesses raw material
(aluminium ingots and billets) from three renowned and proximate
primary metal manufacturers- Vedanta Aluminium, Nalco and Hindalco, The
Company is one of India''s largest institutional aluminum ingots/billets
consumers with corresponding purchase economies.
Quality assurance: The Company''s manufacturing facility is accredited
with the prestigious ISO-9001:2008 certification endorsing its strong
quality systems. Our Company continues to emphasize on maintaining the
utmost quality and safety standards in its factory. Our Company is also
ISO 14001:2004 and OHSAS 18001:2007 certified.
The Company supplies extrusions as per tolerances laid down by the
Bureau of Indian Standards in accordance with BIS: 2673-1979,
BIS:3965-1981 and BIS: 6477-1983, and with even stringent tolerances as
per customer needs based on mutual agreement.
The sharp focus on Quality in all its initiatives has enabled our
Company to launch some specific value-added services
Product applications: We manufacture extruded products for varied
applications, viz.:
- Profiles for Architectural Applications such as Building Systems,
Structural Glazing, Curtain Walls, Aluminium Rolling Shutters, Windows,
Doors, Partitions, False Ceilings, Tower Bolts, Hand Rails, Door
Handles, Hinges, Drapery Rods, Modular Furniture, etc.
- Profiles for Aluminium Form work
- Profiles for Road Transport Sections
- Profiles for Rail Coach Windows & Doors
Profiles for manufacture of Automobile Components
Profiles for Heat Transfer in Electronics & Electrical Gadgets
- Profiles for Electrical applications such as Tubes and Flats for Bus
Bars, Transmission Line Hardware such as P.O. Clamps, H-Connectors,
Repair Sleeves, Lugs, Solar Panels etc.
- Profiles for Engineering Applications such as Motor Housings, Gear
Pump Casings, Ferrules, A.C.Louvres, Machinery Parts, Elevators,
Pneumatic Actuators, Pneumatic Cylinders, Valve Bodies, etc.
- Profiles for various Defence Applications and many more.
The Company also has necessary set up to supply extruded & cold drawn
round bars and hexagonal bars in straight lengths for various
engineering applications. It also has a set up to supply extruded &
cold drawn rods/wires in coil form to be used as armour rods, lamp pin
stock, metallizing wire, rivet stock, welding filler wire (MIG & TIG),
etc.
Customer profile: The Company possesses a portfolio of over 500 reputed
customers. The Company has retained most of the customers over a period
of 22 years.
Our Company is in a position to supply Extruded Profiles in Aluminum
Alloys ranging from lxxx to 7xxx series. This is our major competency.
Our Business strategy is to book maximum part of our installed capacity
for supply directly to end-users.
Company''s Presence across several verticals
The company''s product portfolio comprises of extrusions in soft, medium
and high strength aluminium alloys. It manufactures aluminium profiles
for architectural applications such as windows, doors, doorhandles,
modular furniture etc. Its products are used in rail coach windows and
doors, electrical gadgets, transmission line hardware, gear pumps,
elevators, pneumatic cylinders and defence applications. Along with
diversified end- user industries the company has strong client base.
Its top 10 clients do not account for more than 25% and no single
client accounts for more than 10% of its total revenues. The company''s
diverse customer base provides revenue stability and risk mitigation to
a slowdown in any particular sector.
The Company enters into long-term contracts with its suppliers for its
annual raw material requirements, and receives cumulative annual
discounts from Vedanta Aluminium Ltd and National Aluminium Company Ltd
on lifting pre-specified quantities.
Rich Market Presence
Robust presence across the value chain and synergies in operations has
given our Company a leading position in the domestic value-added
products market.
A network of regional marketing offices and sales offices in close
proximity to the customers enable us to ensure efficient, effective and
timely service. The Company possesses a portfolio of over 550 reputed
customers. Nearly 97 % of the revenues in 2012-13 were derived out of
sales to long- standing customers. The real strength of the Company
lies in its large number of customers in different segments spread in
different geographical locations in a developing economy like India.
We at Century Extrusions Limited believe in growth-oriented business
approach through sustainable use of human and natural resources which
provide us the strength to reach new heights in the forthcoming years.
Our forte is constant progress by identifying the areas of expansion.
FUTURE OUTLOOK
Extrusions
The Company has an installed capacity to produce 15000MT of extrusions
per annum. As against this, our production for the year 2012-13 was
10086 MT. We thus have a significant spare capacity to increase
production and sales volume.
The last decade witnessed the sudden upsurge in the demand for
aluminium extrusions. The per capita consumption of aluminium in India
remains abysmally low at 1.2 kg compared to 15-18 kg in the European
countries and nearly 10 kg in China. Of late, the slower growth rate in
China and the debt crisis in the euro zone have cast their shadow on
the market. India is also stalled with many issues severely affecting
her economic growth. Amidst all these, the physical demand for
aluminium extruded products remains strong. The low per capita
consumption in the country coupled with high quality Bauxite reserves,
promises good future for the aluminium industry.
The segment-wise expected demand growth is given hereunder:
1. Power Sector - Power is the largest consumer of aluminium (about 48%
of total).India has been facing very anomalous situation wherein
investment in generation of power and execution of power plants has
resulted in substantial growth in power generation. But attention
towards evacuation of power plants through transmission and
distribution system is not too adequate. Aluminium finds itself in the
prime position in this sector and therefore deserves special attention
in terms of incentives and benefits. Deemed export in this sector will
be a boom to cable and conductor industry.
2. The vibrant Real Estate Sector in our country -
Construction sector is the major consumer of extrusions. Recent
emphasis on ''Green'' or ''eco-friendly'' building applications will keep
aluminium in the forefront of this emerging market. Commercial and
residential building exteriors and solar panels make this metal highly
popular. But, the high initial cost of aluminium has stood in the way
of widely replacing the conventionally used materials like wood, steel,
plastic and brick in building & construction applications.
The demand for aluminium composite panels cladding is increasing in
urban areas primarily because it is less time consuming and highly
appealing. It is used for front cladding as well as interior walls,
partitions, false ceilings, etc. With the real estate sector and the
national economy going through turbulent times, the momentum of growth
in this sector has slowed down a bit.
The strength, low density, anti-corrosive and design flexibility of
aluminum extrusion alloys make aluminium ideal for building &
construction ranging from a louvre blade in an air-conditioning system
to a structural support in a roofing system. At one third the weight of
steel and extensive design options, Aluminium is the ideal solution for
the building & construction industry
3. Rapidly growing Automobile Industry - Use of aluminium extruded
products in the automobile sector is still at a nascent stage primarily
because the rise in energy costs and the need for emission reduction
world over have made aluminium more attractive to automobile industry
than steel. Aluminium is finding extensive use in light-weight vehicles
without compromising on quality and performance as mankind is becoming
more and more concerned about fuel-efficiency with stricter
environmental pollution norms to reduce greenhouse gas emissions.
4. EngineeringApplications-AluminiumExtrusionsisvery much appreciated
in various mechanical applications, particularly for components of
moving machines, such as engines and robotic devices.
5. The Sustained Agriculture Emphasis in our Country -
Aluminium is also of relevance in the agriculture sector as aluminium
extruded pipes are used in farming. However, owing to increase in the
rates of aluminium
pipes, the farmers are now opting for cheaper P VC pipes even though
their shelf life is less. Exemption of aluminium irrigation pipes from
excise duty will benefit this sector.
6. Solar Energy Industry is a promising sector, solar energy being a
clean, renewable source of energy abundantly available during daytime.
There are undoubtedly excellent opportunities for the use of aluminium
extrusions in solar power applications. Solar power sector utilizes
large quantities of aluminium extrusions for framing and mounting solar
panels on commercial and residential building roof-tops and for ground
and pole-mount applications. Improved extruded framing and mounting
systems indicates more inroads into the sector.
7. Indian Defence Sector: Aluminium extrusions are consumed in a wide
range of applications in this sector, comprising tail-end fuse
connectors for detonator shells and grenades, frame-work for tents and
as roll-over carpets for tanks to navigate difficult terrains. Our
Company supplies rods/bars and tubes in medium and high-strength alloys
to the defence sector. Our Company also supplied about 100 MT of rods
in high- strength alloys to be used as forging stock and for making
precision machined components to M/s. Brahmos Aerospace Limited for
their missile indigenisation mission.
Given the significant supply deficits, high growth potential and
conducive government policies, a large opportunity exists for the
Aluminum extrusions suppliers including our Company.
The above projection of robust demand growth is however tempered by the
fact that the extrusions industry is fragmented, and significant
competition exists among players in the industry. As a result, the
bargaining power of industry players is moderate.
Power Transmission & Distribution
Out of the entire aluminum utilization in the world, 10% is used in the
electrical & electronics sector in Europe, 9% in the USA and 7% in
Japan. The largest utilization area of the aluminum in this field is
the power transmission lines. The steel-core aluminum conductors have
become the only material preferred for the high voltage power
transmission lines. Aluminum is widely used in the underground cables,
electrical cable ducts and motor coil windings as well. In electronics,
the frames, chips, transistor heat sinks, data recording systems and
the electronic equipment cases are included in the utilization areas of
aluminum.
Power Transmission and Distribution Hardware Fittings are required for
use on Overhead Transmission & Distribution Lines for connecting
Insulators with Tower/Pole Cross Arms and Insulators with conductors.
The Company has manufacturing facilities for casting of Aluminium
Alloys, manufacturing of Extruded products in Aluminium & its Alloys,
Wire Drawing, Helical Products, Fabrication of Ferrous & Non-Ferrous
Components, Argon Welding, Electric Arc Welding, Machining, Bundle
Spacer Assembly, Vibration Damper Assembly, Conductor Accessories,
Clamp Connectors for Hardware Assembly, and manufacturing of Tools,
Dies & Moulds.
Aluminium is also used in insulated and underground cables laid in
large populated urban areas and in reserved forests (to avoid
deforestation), Round Tubes are used for corona control rings, grading
rings, mid-span compression joints, dead-end clamps and jointing
sleeves, among others, signifying huge opportunities for extrusions in
the power sector.
During the financial year 2012-13 the Company recorded a sales turnover
of T & D Hardware amounting to Rs.239 lakhs (approx. ) against Rs. 459
lakhs in the previous financial year. The Company has successfully
registered itself as a supplier of its products with a number of State
Electricity Boards during the year and the process is continuing. The
process will get further momentum as company achieves requirements of
minimum years of supply track record and experience, with each passing
year. The Company has received substantial orders from the said State
Electricity Boards and State based utilities and Erection Contractors.
As the Company gets itself registered as a supplier with more
electricity utility companies, the order book will become better and
stronger, and the growth in the coming years is likely to be in
multiples of the previous year performance.
Challenges in the Indian extrusions market
In spite of economic fluctuations the world over, demand for aluminium
extruded products is on the rise. Though building & construction sector
proves to be the most valued consumer of aluminium, an insight into the
future prospects of aluminium extrusion industry will highlight its
growing demand in the solar industry and automobile industry. In India,
the aluminium industry is highly fragmented owing to presence of nearly
75 manufacturers. Volatility in the raw material prices and foreign
exchange fluctuations has been affecting the growth of aluminium
industry to a large extent. Construction sector with a massive
population and vast open spaces / areas is an ideal choice for solar
energy production. Aluminium is the most preferred metal in the
manufacture of solar panels. Indian aluminium extrusion manufacturers
need to stress on innovation and new design options and move further
down the value chain through sharing of knowledge based information
with consumers. This is mainly because in U.S.A. and European
countries, extrusion manufacturers went further down the value chain
and supplied fabricated products to customers. This growing trend is
slowly gaining momentum in India also as new players are competing with
the key ones.
RISKS AND AREAS OFCONCERN
Business ethics and core values are two locomotives that drive our
Company to detect areas of risks at an early stage and thereby
extenuating them promptly and efficiently. The potential of our Company
to evaluate and cope with business risks is imperative in realization
of the desired goals. The Company perceives the following risks and
concerns.
a) Market Competition: The Company is operating in a fiercely
competitive market as market dynamics are forever changing with entry
of new players in the field of extrusion manufacturing. New players are
targeting resellers. Consequently, old players who were earlier in
reseller markets are turning towards end users creating competition for
the Company.
In India, wider market accessibility and a liberal economy has paved
the pathway for easy availability of world- class imported extrusions
in the local market. Need of the hour is continual technological
upgradation for Indian extrusion manufacturers to preclude the headwind
of emerging market economies from sweeping it of its firm foothold in
near future.
Our Company is consciously attempting to foray into new vistas of
aluminium extrusion alloys in order to put its footprint in the growing
markets where demand is higher and return is reasonable.
b) Government Policy risk: The Government policies in the present
economic state of affairs are pro-industry and pro-growth which
minimizes the inherent policy risk. But at times there are delays in
clearances / approvals by Govt, agencies in obtaining lease renewals
for land mortgaged with financial institutions and banks.
This adversely affects the financial facilities obtained from the
Banks. A little attention towards development and budgetary support
from the government will help in a big way to the overall benefit of
the economy.
Entry Tax: The West Bengal Government has introduced "The West Bengal
Tax on Entry of Goods onto local Areas Act, 2012" w.e.fO 1 /04/2012.
This will increase the cost of raw material and other inputs procured
from outside West Bengal by 1% thus lowering the profit margins.
c) Competition from local manufacturers: Local Extruders are expanding
their capacities and have also started the production of extrusions in
medium strength alloys. Some of the customers choose local suppliers
for quicker deliveries. Further to compete with local suppliers, we
have to sacrifice our margin to neutralize the effect of higher cost of
packing, Freight & Central Sales Tax. Our location is in a relatively
under-developed part of the country and the demand in this part is not
good enough to account for our capacity. We have to sell a substantial
quantity (over 65%) in other parts of India where our realization is
lower compared to local supplies due to impact of the higher cost of
packing, freight & Central Sales Tax and the newly introduced Entry Tax
by the West Bengal Government.
d) Retention of experienced manpower: Our Company has always valued
manpower as one of its greatest assets. Pool of talented, committed,
and zealous workforce is the driving power behind its rapid growth. A
dynamic and amicable work environment coupled with innovation and
motivation aids the Company to maintain its treasured manpower.
e) Price Fluctuation Risk: Spiraling raw material prices have been
looming large over the extrusion industry for the last couple of years
Continuous supervision of aluminium metal inventory in order to get
maximum benefit or alternatively to curtail loss by monitoring
inventory levels in each circumstance is a major challenge, and this is
regularly scrutinized at the highest level in the Company.
i) Trade Union Activities: Our Workmen''s unions operate under the
control of three different political parties .It is a challenge to meet
the ever-increasing expectations from the Unions, who at times put
unreasonable demands due to inter-union rivalry in a bid to secure the
support of large number of workmen.
R1SKMANAGEMENT
We believe that -"The first step to the risk management process is to
acknowledge the reality of risk. Denial is a common tactic that
substitutes deliberate ignorance for thoughtful planning ". Our Company
has a system based approach to business risk management. Backed by a
well- planned internal control system, the current risk management
agenda consists of the following elements:
- Enterprise Risk Management Policy manual clearly lays down the
strategy, policy and initiatives in relation to risk management.
- A strong and independent Internal Audit Function carries out risk
focused audits enabling identification of areas where risk management
processes may need to be improved. The Audit Committee of the Board
reviews Internal Audit findings and provides strategic guidance on
internal controls. The Audit Committee closely monitors the internal
control environment within the Company and ensures that Internal Audit
recommendations are effectively implemented.
- The Senior Management of the Company periodically reviews the risk
management framework to effectively address the emerging challenges in
a dynamic business environment.
The Company strives to identify opportunities that enhance
Organizational values while managing & mitigating risks that can
adversely impact its future performance.
SEGMENT-WISE / PRODUCT-WISE PERFORMANCE
The Company has two business segments i.e. manufacturing of Aluminum
Extruded Products and manufacturing of Power Transmission &
Distribution Line Hardware. However, the Company does not fall under
any of the criteria laid down under AS-17 and hence Segment Reporting
is not applicable.
INTERNAL CONTROL SYSTEM
The Company has an adequate internal control system to ensure proper
and efficient use of the Company''s resources, their protection against
any unauthorized use, accuracy in financial reporting and due
compliance of the Company''s policies and procedures as well as the
Statutes. Internal Audit reports are regularly placed before the Audit
committee and management analysis of the same is done to ensure checks
and controls to align with the expected growth in operations. The
Internal audit is carried out by an independent firm of Chartered
Accountants on a regular basis and corrective actions are taken when
any shortcomings are identified.
The Audit committee reviews the adequacy of the internal control system
and provides its guidance for constant improvement in the system.
INFORMATIONTECHNOLOGY
The Company is continuously working on the Information Technology to
get the maximum benefits for the Organization. The Company is
successfully using a software system which is single, comprehensive,
integrated solution called SAP Business One application. With the use
of this integrated software there have been profound improvements in
all spheres of its activities.
HUMAN RESOURCE AND INDUSTRIAL RELATIONS
Of all the valuable assets on Earth Human Resource is the most valuable
one. Keeping in view this perspective, our Company endeavours to
provide a congenial and healthy work environment and emphasizes on
performance appraisal and on-the-job trainings to value talented
manpower.
Our Company appreciates that individual efforts combined with
integrated teamwork facilitate a concern to reach its defined targets.
Effective human resource management systems and practices are developed
and followed by the organization to create a proactive work culture to
ingrain core values
Our Company wishes to put on record its sincere appreciation for
teamwork and efforts of all employees for the betterment of the
organization.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
All industrial applications make an impact on the environment. The
Aluminum Sector is one of the industries that affects the environment
least. The Extrusion production methods do not harm the environment.
The wastes generated in such facilities are at a level, which is not
harmful for the environment.
Our Company is committed to ensure adequate Health and Safety
Standards. It is noteworthy that the Company has received the
prestigious OHSAS 18001:2007 certification for its relentless
commitment towards maintenance of Occupational Health and Safety
Management System Standards.
Furthermore, our Company embraces its responsibility
towards impact of its operations on the society. In 2012-13, our
Company made contribution towards blood donation, medical treatment for
children belonging to poor families, child education and other
charitable causes.
The Company over the years is pursuing as part of its corporate
philosophy, an unwritten CSR policy voluntarily which goes beyond mere
cosmetic philanthropic gestures and integrates interest, welfare and
aspirations of the community with those of the company itself in an
environment of partnership and mutual trust for inclusive development.
Even though your Company has always been conscious about its carbon
footprint on the environment, CSR activities in its true sense haven''t
been initiated, the Company however has always strived to be a
responsible corporate citizen to create an eco-friendly impact.
DIRECTORS
Mr. M.G. Todi and Mr. A.K. Hajra retire from directorship of the
Company by rotation, and being eligible, offer themselves for
re-appointment.
Brief resume of the Directors proposed to be appointed/re- appointed,
nature of their expertise in specific functional area and the names of
the Companies in which they hold directorship and
membership/chairmanship of Board Committees, as stipulated under clause
49 of the listing agreement with the Stock Exchanges, are provided as
an annexure to the Notice convening the Annual General Meeting.
CRISILRATING
CRISIL believes that Century Extrusions Ltd (CEL) will maintain its
financial risk profile over the medium term supported by its moderate
capital structure and low gearing. CRISIL has assigned its ''CRISIL
BBB-/Stable'' rating to the cash credit facility of CEL and reaffirmed
its rating on CEL''s letter of credit, bank guarantee and term loan
facilities at ''CRISIL BBB-/Stable/CRISIL A3'' on December 26,2012. The
ratings continue to reflect CEL''s healthy financial risk profile,
marked by a low gearing and healthy interest coverage ratio,
diversified end-user profile, and established relationships with its
suppliers. These rating strengths are partially offset by CEL''s large
working capital requirements, and susceptibility to volatility in raw
material prices.
DIRECTORS''RESPONSIBILrrYSTATEMENT
The Board of Directors of the Company confirms:
i. that in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
ii. that the selected accounting policies were applied consistently and
the directors made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at March 31, 2013 and of the profit or loss of the
Company for the year ended on that date;
iii. that proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv. that the annual accounts have been prepared on a going concern
basis.
AUDITORS /AUDITORS'' REPORT
The auditors, M/s. A L P S & Co., Chartered Accountants, retire at the
ensuing Annual General Meeting and have confirmed their eligibility and
willingness to accept office, if re-appointed. There are no
qualifications or adverse remarks in the Auditors'' Report, which
require any clarification/ explanation.
COSTAUDITORS
As per the directive of Central Government pursuant to the provisions
of Section 23 3B of the Companies Act, 1956, your Directors have
re-appointed M/s. N Radhakrishnan & Co. a firm of Cost Accountants, to
conduct the audit for the year ended 31st March, 2013.
PUBLIC DEPOSITS
The Company did not invite or accept any deposit from the public under
Section 58Aof the Companies Act, 1956.
PARTICULARS AS PER SECTION 217 OF THE COMPANIES ACT, 1956
The information relating to Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and
Outgo required under section 217 (1) (e) of the Companies Act, 1956, is
set out in a separate statement attached to this report and forms part
it. The Company had no employee of the category indicated under section
217(2A) of the Companies Act, 1956.
CORPORATE GOVERNANCE
The Company has been proactive in following the principles and
practices of good Corporate Governance as an important step towards
building investor confidence, improve investors'' protection and
maximize long-term shareholder value.
The Company has complied with the Corporate Governance code prescribed
by the Stock Exchanges. A detailed report on Corporate Governance along
with Auditors'' Certificate on compliance with the mandatory
recommendations on Corporate Governance is annexed to this report.
ACKNOWLEDGEMENT
We thank our customers, vendors, investors and bankers for their
continued support during the year. We place on record our appreciation
of the contribution made by employees at all levels.
We thank the Government of India, the Customs & Excise Departments, the
Sales Tax Department, the Income Tax Department, the State Government
and other Government agencies for their support, and look forward to
their continued support in the future.
CAUTIONARYSTATEMENT
Statements forming part of the Management Discussion and Analysis
covered in this report may be forward-looking within the meaning of
applicable securities laws and regulations. Actual results may differ
materially from those expressed in the statement. The Company takes no
responsibility to publicly amend, modify or revise any forward looking
statements on the basis of any subsequent developments, information or
events.
For and on behalf of the Board of Directors
Date: 28thMay 2013 MP Jhunjhunwala
Place: Kolkata Chairman & Managing Director
Mar 31, 2012
The are pleased to present the 24th Annual Report of the Company for the
year 2011-2012.
Growth of the Indian economy
The Global Economy has entered into a very difficult phase
characterized by significant downside risks and fragility. The
financial mayhem generated by the deepening of the fiscal crisis in
Europe has spread to both developing and high income countries and is
generating significant headwinds.
Against a backdrop of an uncertain global environment, the Indian
economy faced twin macroeconomic challenges of managing growth and
containing inflation during the fiscal 2011-12. The factors which
influenced the current macroeconomic climate in India and interrupted
recovery were intensification of debt crises in Euro zone, political
turmoil in Middle East, fluctuating global commodity prices, hardening
of international prices of crude oil, stagnation in Japan, etc..
GDP is estimated to grow by 6.9 per cent in 2011-12, after having grown
at 8.4 per cent in preceding two years. Slowdown in comparison to
preceding two years is primarily due to deceleration in industrial
growth. India however remained front runner in economic growth in any
cross-country comparison. India's GDP growth in 2012-13 is expected to
be 7.6 per Cent.
The Scenario of the Aluminum Extrusion Industry
The Aluminium Extrusion industry is characterized by high entry
barriers, due to the capital-intensive nature of the business. The
domestic primary aluminum industry is around 4-5 per cent of the global
aluminum industry. The Indian aluminum extrusions market has an
installed capacity of about 5,20,000 Metric Tonnes (MT) per annum. which
is likely to see a double digit growth over the next few years due to
robust demand from all its consumer segments, particularly Building &
construction, power and electrical and automobile sectors.
Architectural, building and construction sectors are the major users of
aluminium extrusions in India. The vibrant real estate sector will
increase the demand for extrusions in the coming years. Automotive
sector is growing at around 15% per annum and is expected to witness
similar growth trend for the next few years. Large investments are
proposed in the power sector and significant development is taking
place in the electronics sector. In India, mega and ultra-mega power
projects are being set up with a vision to make the country self
reliant in electricity. Some of the key applications for extrusion
include flat and tubular busbars, solar panels and heat sinks, etc.
Solar frames and mounting systems are also emerging as key applications
and the demand from this sector is expected to increase rapidly in the
next few years. Demand for extrusions is expected to grow at 12-15%
during the next five years There is increasing emphasis on high quality
extrusions in terms of specifications as well as aesthetics.
The Indian extrusion industry offers unlimited possibilities in terms
of shapes and sizes for use across various industrial sectors, which
has opened up a plethora of new applications.
FINANCIAL PERFORMANCE
The Company achieved a sales turnover of Rs. 21192 lacs as against Rs.
17961 lacs in the previous financial year recording an increase of
about 18%. The Power Transmission & Distribution Hardware (Power T & D
Hardware) division registered a sale of Rs. 400 lacs as against Rs. 216
lacs in the previous year. The balance of the turnover was contributed
by Company's principal business i.e. by Aluminium Extrusions Division.
The Profit After Tax (PAT) for the year is Rs. 320 lacs as against Rs.
58 lacs showing moderate improvement in financial performance. The gain
from higher volumes has been offset by:
(a) Significant increase in Electricity tariff and fuel cost..
(b) Significant increase in Finance Cost due to hardening of interest
rates in India.
(c) Apparent slowdown in general economic activity.
The Company had continued to keep cost control as the cornerstone of
its operations and to raise its output of value-added products. The
Company continues to invest in upgradation of Technology for cost
reduction & improved performance. The Company has taken steps to
counter the above factors and expects to achieve higher Sales Turnover
as well as profitability in the next financial year.
(Rs. in lacs, except per share data)
Year ended March31 2012 2011
Sales 21192 17961
Profit before Interest, Depreciation and
impairment of Assets 1290 963
Interest 606 493
Profit before Depreciation and Impairment
of Assets 684 470
Depreciation and Impairment of Assets 413 404
Net Profit 271 66
Provision of Taxation (-)49 8
Profit after Tax 320 58
Profit brought forward 1433 1375
Balance carried to Balance Sheet 1753 1433
DIVIDEND
The Company's inadequate profits does not justify a dividend payout.
Hence to conserve our reserves we are unable to recommend any dividend
for the year under review.
PRODUCTION
The Aluminium Extrusions production for the year 11086 MT as against
10033 MT in previous financial year showing a growth of 10.50%.
The Power T & D Hardware achieved production of 233 MT during the year
as against 133MT during the previous year. The industry has a longer
gestation period of roughly 4 to 6 years mainly because the prospective
customers, mainly the State Power Distribution Companies require prior
supply experience before they allow new vendors to participate in their
tenders. The Company has already completed four financial years of
operation in the Power T & D Hardware business and expects this
division to contribute higher turnover and profitability from 2013-14
and onwards.
COMPANY OVERVIEW AND GROWTH STRATEGY
While we succeed only as an enterprise by serving our customers to
their satisfaction, our relentless focus will remain on value creation.
Success Drivers
Our Legacy: With an experience spanning a rich 21 years, our Company
enjoys a number of first mover advantages comprising a comprehensive
understanding of the aluminium and aluminium extrusions market, reputed
brand and a strong customer base.
Integration: We possess in-house facilities for -
- Melting and casting of billets, Homogenizing.
- Extrusions manufacturing with three press lines.
- Complete Die manufacturing,
- Manufacturing various value added products of extrusions for
engineering applications, and
- Manufacturing Power Transmission & Distribution Hardware.
With 3 extrusion press lines, the Company has a capacity to produce
15000MT of Aluminium Extrusions, which as per the information available
with the Company, is the 3rd largest facility in India as on date.
Die Library: The Company possesses an inventory of more than 5000 dies
to manufacture over 3750 profiles. The Company maintains back-up dies
for meeting the requirements of fast moving profiles.
Availability of raw material: The Company accesses raw material
(aluminium ingots and billets) from three renowned and proximate
primary metal manufacturers- Vedanta Aluminium, Nalco and Hindalco, The
Company is one of India's largest institutional aluminum ingot/billets
consumers with corresponding purchase economies.
Quality assurance: The Company's manufacturing facility is accredited
with the prestigious ISO-9001:2008 certification endorsing its strong
quality systems. Your Company continues to focus on maintaining the
highest quality and safety standards in its factory. The Company is
presently in process of upgrading its Quality Management System to
become compliant with Environmental Management System ISO 14001:2004 &
Occupational Health & Safety Assessment Series OHSAS 18001:2007.
The Company supplies extrusions as per tolerances laid down by the
Bureau of Indian Standards in accordance with BIS: 2673-1979,
BIS:3965-1981 and BIS:6477-1983, and with even tighter tolerances as
per customer needs.
The sharp focus on Quality in all its initiatives has enabled our
Company to launch some specific value-added services
Product applications: We manufacture extruded products for varied
applications, viz.:
- Profiles for Architectural Applications such as Building Systems,
Structural Glazing, Curtain Walls, Aluminium Rolling Shutters,
Windows,Doors, Partitions, False Ceilings, Tower Bolts, Hand Rails,
Door Handles, Hinges, Drapery Rods, Modular Furniture, etc.
- Profiles for Road Transport Sections.
- Profiles for Rail Coach Windows & Doors.
- Profiles for manufacture of Automobile Components.
- Profiles for Heat Transfer in Electronics & Electrical Gadgets
- Profiles for Electrical applications such as Tubes and Flats for Bus
Bars, Transmission Line Hardware such as P.G. Clamps, H-Connectors,
Repair Sleeves, Lugs, Solar Panels etc.
- Profiles for Engineering Applications such as Motor Housings, Gear
Pump Casings, Ferrules, A.C.Louvers, Machinery Parts, Elevators,
Pneumatic Actuators, Pneumatic Cylinders, Valve Bodies, etc.
- Profiles for various Defence Applications and many more.
The Company also has necessary set up to supply extruded and cold drawn
round bars and hexagonal bars in straight lengths for various
engineering applications. It also has a set up to supply extruded and
cold drawn rods/wires in coil form to be used as armour rods, lamp pin
stock, metallizing wire, rivet stock, welding filler wire etc.
Customer profile: The Company possesses a portfolio of over 600 reputed
customers. The Company has retained most of the customers over a period
of 21 years.
Our Company is in a position to supply Extruded Aluminum Profiles in
Alloys 1xxx to 7xxx series. This is our major competency. Our Business
strategy is to book maximum part of our installed capacity for supply
directly to end-users.
Company's Presence across several verticals
The company's product portfolio comprises of extrusions in soft, medium
and high strength aluminium alloys. It manufactures aluminium profiles
for architectural applications such as windows, doors, door handles,
modular furniture etc. Its products are used in rail coach windows and
doors, electrical gadgets, transmission line hardware, gear pumps,
elevators, pneumatic cylinders and defense applications. Along with
diversified end-user industries the company has strong client base.
Its top 10 clients do not account for more than 25% and no single
client accounts for more than 10% of its total revenues. The company's
diverse customer base provides revenue stability and risk mitigation to
a slowdown in any particular sector.
The Company enters into long-term contracts with its suppliers for its
annual raw material requirements, and receives cumulative annual
discounts from Vedanta Aluminium Ltd and. National Aluminium Company
Ltd on lifting pre-specified quantities. Our revenues have registered a
compound annual growth rate (CAGR) of 13.41 % over the past five years
Rich Market Presence
Times are changing and markets are changing. The good thing is that a
change is always a chance. This brings new expectations to the table
that needs to be satisfied. The Company is committed to understand
customer requirements and deliver products in totality. Prudent and
conscious efforts are made with a dedicated team of professionals to
satisfy the customers. High levels of ethics and transparency are
maintained in dealing with the clients to improve their confidence in
the brand and the Company.
A network of branches and sales offices in close proximity to the
customers enable us to ensure efficient, effective and timely service.
The Company possesses a portfolio of over 600 reputed customers. Nearly
87% of the revenues in 2011-12 were derived out of sales to
long-standing customers. The real strength of the Company lies in its
large number of customers in different customer segments spread in
different geographical segments in a growing economy like India.
We at Century Extrusions Limited are looking forward to the forthcoming
challenges and are confident to meet your expectations through
continuous development of customer-optimised solutions.
FUTURE OUTLOOK
Extrusions
The Company has an installed capacity to produce 15000MT of extrusions
per annum. As against this, our production for the year 2011-12 was
11086 MT. We thus have a significant spare capacity to increase
production and sales volume.
The demand for aluminium extrusions has been growing in double digits
for past few years. However, even today the present per capita
consumption of aluminium in India is very low at below 2 kg. against
over 10 kg. in developed countries. Due to this very low present
consumption, meaning a low base, the demand growth for extrusions is
likely to remain buoyant over many years to come.
The segment-wise expected demand growth is given hereunder:
1. Power Sector-Power and infrastructure sectors in India are
witnessing and would continue to witness strong growth in the coming
years with the boost from policy measures and budgetary allocations.
Our country faces continuing power shortage. More investments to plug
the gap means more aluminium extrusions.
2. The vibrant Real Estate Sector in our country-Building industry
is the largest consumer of extrusions. Construction is now moving
heavily into Tier II and Tier III cities in addition to Tier I cities.
Current demand for extrusions from this sector is largely for simple
door & window sections. The usage of building systems and Unitized
systems are yet to gain large scale acceptance in the market.
Triggered by growth opportunities in the construction sector with
increasing government budgetary support for the housing sector, the
Company eyes for a wider market as more homes and offices mean more
aluminium extrusions.
The light weight, high strength and durability of aluminum alloys make
aluminum attractive for building and construction. At one third the
weight of steel and extensive design options, Aluminium is the ideal
solution for the building & construction industry.
3. Rapidly growing Automobile Industry - A bright perspective in
consumption of aluminium extrusions is seen in the automobile industry.
Aluminium extrusion is used in the manufacture of select automotive
parts such
as small Chassis, suspension, bumper, exteriors, interiors, body
structure and steering. Aluminium extrusion in automotive space frames
is an upcoming application and is being used in high end cars of Audi,
BMW and others. Some of the key applications of aluminium extrusions in
passenger cars include: Structural Parts, Safety Parts and Heat
Exchangers: More road and more vehicles mean more aluminium extrusions.
The Growing Vehicular aluminium content for light weighting of vehicles
to save fuel will drive aluminium demand further.
4. Engineering Applications- Aluminium Extrusions are increasingly
being used to manufacture forged & machined components for use as parts
of machinery, fasteners, rivets, wire rope ferrules, motor housings for
domestic water pumps, hydraulic gear pump casings, heat sinks, ladders,
elevators, etc.
5. The Sustained Agriculture Emphasis in our Country -
More investments in irrigation mean more aluminium extrusions
6. Solar Energy Industry is an emerging opportunity, which implies
significant consumption opportunities for aluminium extrusions from
solar panels over the years to come.
7. Indian Defence Sector: Aluminium extrusions are consumed in a wide
range of applications in this sector, comprising tail-end fuse
connectors for detonator shells and grenades, frame-work for tents and
as a roll-over carpets for tanks to navigate difficult terrains.
Given the significant supply deficits, high growth potential and
conducive government policies, a large opportunity exists for the
Aluminum extrusions suppliers including our Company.
The above projection of robust demand growth is however tempered by the
fact that the extrusion industry is fragmented, and significant
competition exists among players in the industry. As a result, the
bargaining power of industry players is moderate.
Power Transmission & Distribution
The power sector provides one of the most important inputs for the
development of a country and availability of reliable and inexpensive
power is critical for its sustainable economic development. India today
stands at the threshold of being an economic superpower. Power is one
of the key requirements to support and sustain our economic growth.
India's electricity demand is expected to grow at an average annual
rate of 7.4% in the next 25 years. Power is a key ingredient in driving
growth in manufacturing & services. Aluminium finds growing use in
this space as it is directly used in the overhead transmission and
distribution lines.
Power Transmission and Distribution Hardware Fittings are required for
use on Overhead Transmission and Distribution Lines for connecting
Insulators with Tower/Pole Cross Arms and Insulators with conductors.
The Company has manufacturing facilities for casting of Aluminium
Alloys, manufacturing of Extruded products in Aluminium & its Alloys,
Wire Drawing, Helical Products, Fabrication of Ferrous & Non-Ferrous
Components, Argon Welding, Electric Arc Welding, Machining, Bundle
Spacer Assembly, Vibration Damper Assembly, Conductor Accessories,
Clamp Connectors for Hardware Assembly, and manufacturing of Tools,
Dies & Moulds.
Aluminium is also used in insulated and underground cables laid in
large populated urban areas and in reserved forests (to avoid
deforestation), Round Tubes are used for corona control rings, grading
rings, mid-span compression joints, dead-end clamps and jointing
sleeves, among others, signifying huge opportunities for extrusions in
the power sector.
During the financial year 2011-12 the Company recorded a sales turnover
of T & D Hardware amounting to Rs. 400 lacs (approx) as against Rs. 216
lacs in the previous financial year. The Company has successfully
registered itself as a supplier of its products with a number of State
Electricity Boards during the year and the process is continuing. The
process will get further momentum as company achieves requirements of
minimum years of supply track record and experience, with each passing
year. The Company has received substantial orders from the said State
Electricity Boards and State based utilities and Erection Contractors.
As the Company gets itself registered as a supplier with more
electricity utility companies, the order book will become better and
stronger, and the growth in coming few years is likely to be in
multiples of the previous year performance.
Challenges in the Indian Extrusions market
The outlook for aluminium extrusions demand this year has weakened
mainly due to sovereign debt crisis in Europe. However the medium term
outlook is still firm. The automobile sector will see solid gains in
both the developed and developing world. Aluminium is still used only
for simple applications at present in India. Complex applications a
small market by itself, is catered to through imports. Technical know
how is significantly lesser than in Europe & USA. Customers prefer to
buy "off the shelf products; This will have to change with more
industrial applications coming in. Price is a key driving factor and
India is amongst the most price sensitive markets in the world. Quality
extrusions will cost more, but pays in the long run. It needs to
evaluate the whole life costs while deciding where to buy from.
Building & Construction sector is becoming more quality conscious.
Architects/Big builders are directly interacting with Extruder's for
supply of profiles.
Some of changes happening are:
- Wider sections.
- More complex shapes.
- Tighter tolerances
- Focus towards buying 'Solutions' rather than 'off the shelf profiles'
is increasing.
RISKS AND AREAS OF CONCERN
The Company's operations and value are continuously protected by
identifying risks at an early stage which facilitates managing them
better. The Company's capability to assess and manage business risks is
crucial in achieving targets. The Company perceives the following risks
and concerns.
a) Market Competition: The Company is operating in a highly competitive
market as market dynamics are forever changing with entry of new
players in the field of extrusion manufacturing. New players are
targeting resellers consequently old players who were earlier in
reseller markets are turning towards end users creating competition for
the Company.
With free market economy now prevailing in India, high quality imported
extrusions are freely available in the local market. Hence unless
Indian Extrusion Industry, particularly in the unorganized sector
undertakes technological up-gradation in the foreseeable future, over
next five years, this sector may be wiped out of the market by
availability of cheaper and superior quality imported products.
The Company is striving to developing extrusions in new alloys and can
grasp the niche market where competition is still less and margins are
higher.
b) Government Policy risk: The Government policies in the present
economic scenario are pro-industry and pro- growth which minimizes the
inherent policy risk. But at times there are delays in
clearances/approvals by Govt. agencies in obtaining lease renewals for
land mortgaged with financial institutions and banks. This adversely
affects the financial facilities obtained from the Banks.
Entry Tax: The West Bengal Government has introduced "The West Bengal
Tax on Entry of Goods onto local Areas Act, 2012" w.e.f 01/04/2012.
This will increase the cost of raw material and other inputs procured
from outside West Bengal by 1%.
c) Competition from local manufacturers: Local Extruders are expanding
their capacities and have also started the production of extrusions in
medium strength alloys. Some of the customers prefer local suppliers
for faster deliveries. Further to compete with local suppliers, we have
to sacrifice our margin to neutralize the effect of higher Freight and
Central Sales Tax. We are located in a comparatively under-developed
part of the country and the demand in this part is not good enough to
account for our capacity. We have to sell a substantial quantity (over
70%) in other parts of India where our realization is lower compared to
local supplies due to impact of the high freight and Central Sales Tax
and the newly introduced Entry Tax by the West Bengal Government.
d) Retention of experienced manpower: Company faces a challenge in
retaining the trained work force. The Company has created employee
friendly policies and a conducive environment for work-life balance.
e) Price Inflation Risk: Fluctuating raw material prices have been
witnessed too often over the past few years. Continuous monitoring of
aluminium metal inventory in order to get maximum benefit or
alternatively to minimize loss by keeping ideal inventory levels in
each circumstance is a major challenge, and this is regularly monitored
at the highest level in the Company.
f) Trade Union Activities: Our Workmen's unions operate under the
control of three different political parties. It is a challenge to meet
the ever-increasing expectations from the Unions, who at times put
unreasonable demands due to inter-union rivalry in a bid to secure the
support of larger number of workmen.
RISK MANAGEMENT
There is a quote which says "What gets measured is managed". Your
Company has a system based approach to business risk management. Backed
by a strong internal control system, the current risk management
framework consists of the following elements:
Enterprise Risk Management Policy manual clearly lays down the
strategy, policy and initiatives in relation to risk management.
A strong and independent Internal Audit Function carries out risk
focused audits enabling identification of areas where risk management
processes may need to be improved. The Audit Committee of the Board
reviews Internal Audit findings and provides strategic guidance on
internal controls. The Audit Committee closely monitors the internal
control environment within the Company and ensures that Internal Audit
recommendations are effectively implemented.
The Senior Management of the Company periodically reviews the risk
management framework to effectively address the emerging challenges in
a dynamic business environment.
The Company strives to identify opportunities that enhance
Organizational values while managing & mitigating risks that can
adversely impact its future performance.
SEGMENT-WISE/PRODUCT-WISE PERFORMANCE
The Company has two business segments i.e. manufacturing of Aluminum
Extruded Products and manufacturing of Power Transmission and
Distribution Line Hardware. However, the Company does not fall under
any of the criteria laid down under AS-17 and hence Segment Reporting
is not applicable.
INTERNAL CONTROL SYSTEM
The Company has an adequate internal control system to ensure proper
and efficient use of the Company's resources, their protection against
any unauthorized use, accuracy in financial reporting and due
compliance of the Company's policies and procedures as well as the
Statutes. Internal Audit reports are regularly placed before the Audit
committee and management analysis of the same is done to ensure checks
and controls to align with the expected growth in operations. The
Internal audit is carried out by an independent firm of Chartered
Accountants on regular basis and corrective actions are taken when any
shortcomings are identified.
The Audit committee reviews the adequacy of the internal control system
and provides its guidance for constant improvement in the system.
INFORMATION TECHNOLOGY
The Company is continuously working on the Information Technology to
get the maximum benefits for the Organization. The Company is
successfully using a software system which is single, comprehensive,
integrated solution called SAP Business One application. With the use
of this integrated software there have been profound improvements in
all spheres of its activities.
HUMAN RESOURCE AND INDUSTRIAL RELATIONS
Your Company recognizes the importance of people in its growth and has
been progressing with the unflinching commitment of the dedicated team
of employees. The Company's recruitment practices ensure that suitable
candidates with merit are recruited and provided with the right
opportunities to grow within the Organization. The Company has
developed an HR strategy comprising need based training. Employees are
encouraged to attend seminars, lectures, and training. Key performance
indicators by department heads were subject to regular management
review meetings.
There was a contract labour unrest demanding revision of daily wage
rate as a result of increase by the Government of West Bengal. They
went on strike for a few days which was then resolved after successful
negotiations. Our Casual workers who are getting wages less than
contract workers have also demanded increase in the wages.
Developing a learning culture has always been and will continue to be
our uppermost priority. Our efforts in the coming years will be to
enable our employees to continually grow and build a competitive edge
by translating the learnings into positive actions. Several trainings
were conducted during the year under review. We believe that together
we can and will make the Company achieve its corporate mission.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
The Company has over the years pursuing as part of its corporate
philosophy, an unwritten CSR policy voluntarily which goes beyond mere
cosmetic philanthropic gestures and integrates interest, welfare and
aspirations of the community with those of the company itself in an
environment of partnership and mutual trust for inclusive development.
Even though your Company has always been conscious about its footprint
on the environment, CSR activities in its true sense haven't been
initiated, the Company however has always strived to be a responsible
corporate citizen.
DIRECTORS
Mr. V K Mushran, Mr. Vikram Jhunjhunwala and Mr. RK Sharma retire from
directorship of the Company by rotation, and being eligible, offer
themselves for re-appointment.
Mr. R N Das, Independent Non-Executive director has tendered his
resignation with effect from 28 May 2012. Mr. Arun Kumar Hazra was
inducted as an additional director in the Board Meeting held on
28.05.2012. Mr. Hazra will hold office till the date of the forthcoming
Annual General meeting and a notice has been received from a member
proposing the candidature of Mr. Hazra, being appointed as a Director
of the Company.
Brief resume of the Directors proposed to be appointed/re-appointed,
nature of their expertise in specific functional area and the names of
the Companies in which they hold directorship and
membership/chairmanship of Board Committees, as stipulated under clause
49 of the listing agreement with the Stock Exchanges, are provided as
an annexure to the Notice convening the Annual General Meeting.
CRLSIL RATING
CRISIL has assigned its 'CRISIL BBB-/Stable' rating to the cash credit
facility of Century Extrusions Ltd (CEL) and reaffirmed its rating on
CEL's letter of credit, bank guarantee and term loan facilities at
'CRISIL BBB-/Stable/CRISIL A3'.
The ratings continue to reflect CEL's healthy financial risk profile,
marked by a low gearing and healthy interest coverage ratio,
diversified end-user profile, and established relationships with its
suppliers. These rating strengths are partially offset by CEL's large
working capital requirements, and susceptibility to volatility in raw
material prices.
DIRECTORS' RESPONSIBILITY STATEMENT
The Board of Directors of the Company confirms:
i. That in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
ii. That the selected accounting policies were applied consistently and
the directors made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at March 31, 2012 and of the profit or loss of the
Company for the year ended on that date;
iii. That proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv. That the annual accounts have been prepared on a going concern
basis.
AUDITORS/AUDITORS' REPORT
The auditors, M/s. A L P S & Co., Chartered Accountants, retire at the
ensuing Annual General Meeting and have confirmed their eligibility and
willingness to accept office, if re-appointed. There are no
qualifications or adverse remarks in the Auditors' Report, which
require any clarification/explanation.
COST AUDITORS
As per the directive of Central Government pursuant to the provisions
of Section 233B of the Companies Act, 1956, your Directors have
re-appointed M/s. N Radhakrishnan & Co. a firm of Cost Accountants, to
conduct the audit for the year ended 31st March, 2013.
PUBLIC DEPOSITS
The Company did not invite or accept any deposit from the public under
Section 58A of the Companies Act, 1956.
PARTICULARS AS PER SECTION 217 OF THE COMPANIES ACT, 1956
The information relating to Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo required under
section 217 (1) (e) of the Companies Act, 1956, is set out in a
separate statement attached to this report and forms part it. The
Company had no employee of the category indicated under section 217(2A)
of the Companies Act, 1956.
CORPORATE GOVERNANCE
The Company has been proactive in following the principles and
practices of good Corporate Governance as an important step towards
building investor confidence, improve investors' protection and
maximize long-term shareholder value.
The Company has complied with the Corporate Governance code prescribed
by the Stock Exchanges. A detailed report on corporate Governance along
with Auditors' Certificate on compliance with the mandatory
recommendations on Corporate Governance is annexed to this report.
ACKNOWLEDGEMENT
We thank our customers, vendors, investors and bankers for their
continued support during the year. We place on record our appreciation
of the contribution made by employees at all levels.
We thank the Government of India, the Customs and Excise Departments,
the Sales Tax Department, the Income Tax Department, the State
Government and other Government agencies for their support, and look
forward to their continued support in the future.
CAUTIONARY STATEMENT
Statements forming part of the Management Discussion and Analysis
covered in this report may be forward-looking within the meaning of
applicable securities laws and regulations. Actual results may differ
materially from those expressed in the statement. The Company takes no
responsibility to publicly amend, modify or revise any forward looking
statements on the basis of any subsequent developments, information or
events.
For and on behalf of the Board of Directors
M P Jhunjhunwala
Chairman & Managing Director
Date: 28th May 2012
Place: Kolkata
Mar 31, 2010
We are pleased to present the 22nd Annual Report of the Company for the
year 2009-10.
General Economic Recovery
The financial Year 2009-10 saw improvement in all sectors of Indian
economy with the global economy also showing signs of gradual recovery
from 2008-09 slowdown. In FY 2009-10, India pursued aggressive easing
of monetary policy, together with significantly higher public spending
to counter weak external demand. As a result, despite several
vulnerabilities, economic activity has shown signs of improvement,
particularly in industrial production, private business confidence,
access to foreign capital and exports. As per the Economic Survey 2010,
Indias GDP has been estimated to have grown at 7.2% during F.Y.
2009-10.
Investment in infrastructure especially in deficit regions like Asia is
growing at a phenomenal rate. Aluminium consumption in Asia will
continue to grow in FY 2010-11 as stimulus measures in China, the
worlds biggest metals consumer, India, a fast growing large economy,
and rest of the region lift demand for the metal. In India, mega and
ultra- mega power projects are being set up with a vision to make the
country self reliant in electricity. Large Construction projects have
revived with renewed focus on heavy investment projects like mega
housing projects, modernization of railways etc. where aluminum
consumption is very high, and therefore, the aluminium industry will
continue on high growth path in coming years.
The growth of primary aluminium industry over the past 5/6 years period
in Asia has been impressive with China being the major growth driver.
The growth of the industry in India has been impressive though at a
comparatively slower rate. This is set to change significantly in the
next few years as the manufacturers in India have lined up aggressive
growth plans. The primary Aluminium metal production in India is set to
grow to 3-folds its present size in less than 3 years from now.
During the FY 2009-10, aluminium production in India increased by 12.99
percent (from 1.34 Million MT in 2008-09 to 1.52 Million MT during FY
2009-10) contributed by all the primary producers in India, namely
Hindalco, Balco, Vedanta Aluminium and Nalco.
The Aluminium Extrusions industry has also recorded double digit growth
during 2009-10, and expected to continue growing in double digits
driven by demand growth, mainly from within India.
Financial Performance
The Company has performed reasonably well during the FY 2009-10. The
Sales turnover at Rs. 132.95 crores and PAT at Rs.5.35 crores show
increase of 20% and 91% respectively. This growth is mainly
attributable to higher volumes in Aluminum Extrusions resulting from
capacity expansion and the recovery in aluminium metal prices.
(Rs,000, except per share data)
Year ended March 31 2010 2009
Sales 1329491 1105676
Profit before Interest, Depreciation
and Impairment of Assets 127914 66684
Interest 26476 14482
Profit before Depreciation and
Impairment of Assets 101438 52202
Depreciation and Impairment of Assets 23925 6370
NetProfit 77513 45832
Provision for Taxation 24062 17804
Profit after Tax 53451 28028
Profit brought forward 93367 74699
Surplus available for Appropriation 146818 102727
Appropriations:
Proposed Dividend 8000 8000
Corporate Tax on Dividend 1329 1360
Balance carried to Balance Sheet 137489 93367
Dividend
Considering the financial performance of the Company for the year and
to appropriately reward the members while conserving resources to meet
the future financial requirements, we are pleased to recommend a
dividend of Re.0.10 per equity Share of Re.l/- each for the year ended
31 st March, 2010. This dividend is subject to approval of the members
at the forthcoming Annual General meeting.
Production
The Aluminium Extrusions production for the year was 8829MT in
comparison to 6338MT in previous financial year showing a growth of
39%. The growth has mainly come from capacity expansion of 7500MT per
annum. The expanded capacity commenced commercial production on 24th
August 2009. With full production capacity being available for whole of
the next financial year, the Company expects to achieve significantly
higher production and sales during the FY 2010-11.
The Power Transmission and Distribution Line Hardware (T&D Hardware)
achieved production of 48MT during the year as against 28MT during the
previous year. This industry has a longer gestation period of roughly 3
years mainly because the prospective customers, mainly the State Power
Distribution Companies require prior supply experience before they
allow new vendors to participate in their Tenders.
General Business Profile, Strengths and Strategy Initiatives
The Company with an experience spanning a rich 18 years enjoys a number
of first mover advantages comprising a comprehensive understanding of
the aluminium and aluminium extrusions market, reputed brand and a
strong customer base.
The Company possesses in-house facilities for die- manufacturing,
melting and casting of billets and the extrusions manufacturing
facility with three press lines. The Companys new state-of-the art
2700MT press line is automated to 90% and will cover the production of
a large product range. The Company enjoys easy raw material access. It
accesses the raw material from three renowned and proximate primary
metal manufacturers - Hindalco, Nalco, and Vedanta Aluminium. The
Company is one of Indias large institutional aluminium metal consumers
with corresponding purchase economies.
The Company manufactures and supplies extrusions for varied
applications (architectural, road transport vehicles, railways,
electrical and electronic applications, engineering applications,
automotive sector, consumer durables, Defence applications and
irrigation, among others). The power sector accounts for the largest
revenue proportion. The Company also has necessary set up to supply
value added extruded products for various engineering applications.
Rich Market Presence
A network of branches and sales offices in close proximity to the
customers enable us to ensure efficient, effective and timely service.
The Company possesses a portfolio of over 600 reputed customers.
Customer delight has been the Companys "Mantra" with a dedicated team
of professionals. Utmost importance is given to client satisfaction.
The Sales Team is fully qualified and trained to look after the
customers diverse requirements for their complete satisfaction. High
levels of ethics and transparency are maintained in dealing with the
clients to improve their confidence in the brand and the Company.
Nearly 86 % of the revenues in 2009-10 were derived out of sales to
long-standing customers. The real strength of the Company lies in its
large number of customers in different customer segments spread in
different geographical segments in a growing economy like India.
We manufacture extruded products for varied applications, viz.:
- Profiles for Architectural Applications such as Building Systems,
Structural Glazing, Curtain Walls, Aluminium Rolling Shutters, Windows,
Doors, Partitions, False Ceilings, Tower Bolts, Hand Rails, Door
Handles, Hinges, Drapery Rods, Modular Furniture, etc.
- Profiles for Road Transport Sections
- Profiles for Rail Coach Windows & Doors
- Profiles for manufacture of Automobile Components
- Profiles for Heat Transfer in Electronics & Electrical Gadgets
- Profiles for Electrical applications such as Tubes and Flats for Bus
Bars, Transmission Line Hardware such as P.G. Clamps, H-Connectors,
Repair Sleeves, Lugs, Solar Panels etc.
- Profiles for Engineering Applications such as Motor Housings, Gear
Pump Casings, Ferrules, A.C.Louvers, Machinery Parts, Elevators,
Pneumatic Actuators, Pneumatic Cylinders, Valve Bodies, etc.
- Profiles for various Defence Applications And many more.
On account of direct pass through of any increase / decrease in primary
aluminium prices to those for aluminium extrusions, the industry is
de-commoditised and relatively insulated from fluctuating primary
aluminium prices. With depreciated assets, efficient inventory turns
and relatively quicker receivable cycles, return-on-the-employed
capital is reasonably good. The Company reported an ROCE of 19.11% in
2009-10.
Future Outlook and New Business Opportunities
Extrusions
The Company has commenced commercial production from its new 2700 MT
Aluminium Extrusion press line on August 24,2009 and is able to produce
profiles of larger dimensions and more stringent tolerances. The new
expansion project put up at a capital investment of Rs.40 crores has
enhanced the installed capacity for manufacture of Aluminium Extrusions
from 7500 MT per annum to 15000 MT per annum. This would provide
opportunities to produce and supply larger product range to our
existing customers and also cater to the consumer segments where we had
been unable to supply due to our capacity limitations.
There are a number of attractive opportunities for developing further
value-added products of extrusions. The Company proposes to put up
facilities to manufacture value-added products of extrusions such as
anodizing and powder Coating facilities, door & window systems
manufacturing facility, and facility for producing components/finished
parts for auto, Solar panel and engineering industries in future. The
Company is geared up to avail emerging opportunities in the following
areas:
1. Power Sector - Our country faces continuing power shortage. More
investments to plug the gap means more aluminium extrusions.
2. The vibrant Real Estate Sector in our country - More homes and
offices mean more aluminium extrusions. Increasing government
budgetary support for the housing sector is expected to sustain.
3. Rapidly growing Transportation Sector - More road and more vehicles
mean more aluminium extrusions. The Growing Vehicular aluminium content
for light weighting of vehicles to save energy will drive aluminium
demand further.
4. The Sustained Agriculture Emphasis in our Country - More
investments in irrigation mean more aluminium extrusions
5. Solar Energy Industry is a big emerging opportunity, which implies
significant consumption opportunities for alurninium extrusions from
solar panels over the years to come.
6. Indian Defence Sector: Aluminium extrusions are consumed in a wide
range of applications in this sector, comprising tail-end fuse
connectors for detonator shells and grenades, frame-work for tents and
as a roll-over mattress for tanks to navigate difficult terrains.
The Companys debt-equity ratio of 0.72 indicates adequate potential
for funding growth. The Company enjoys an interest cover of 4.41 and
average borrowing cost of under
10% with term loans and working capital loans from banks as well as
subsidised loan from the West Bengal Government.
Power T & D Hardware
Despite 18 years of power reforms, over 40% of the countrys population
is still without electricity, 60 % of Indian firms and a large
percentage of homes rely on captive or back-up generation. The spot
rates for power have significantly increased in the last 12-18 months,
led by the sharp increase in the peak and energy deficit levels.
Aluminium finds growing use in this space as it is directly used in the
overhead transmission and distribution lines.
Our long experience and the robust credibility in the field of
manufacturing Aluminium extrusions, where we have significant presence
in making supplies to customers in Power Segment, encouraged us to
enter into the field of manufacturing Power Transmission and
Distribution Hardware.
Power Transmission and Distribution Hardware Fittings are required for
use on Overhead Transmission and Distribution Lines for connecting
Insulators with Tower/Pole Cross Arms and Insulators with conductors.
The Company has manufacturing facilities for casting of Aluminium
Alloys, manufacturing of Extruded products in Aluminium & its Alloys,
Wire Drawing, Helical Products, Fabrication of Ferrous & Non-Ferrous
Components, Argon Welding, Electric Arc Welding, Machining, Bundle
Spacer Assembly, Vibration Damper Assembly, Conductor Accessories,
Clamp Connectors for Hardware Assembly, and manufacturing of Tools,
Dies & Moulds. Aluminium is also used in insulated and underground
cables laid in large populated urban areas and in reserved forests (to
avoid deforestation), Round Tubes are used for corona control rings,
grading rings, mid- span compression joints, dead-end clamps and
jointing sleeves, among others, signifying huge opportunities for
extrusions in the power sector.
During the financial year 2009-10 the Company could make only a modest
sales turnover of T & D Hardware amounting to Rs. 69 lacs approx. The
Company is in the process of getting registered with various State
Electricity Boards and looks forward to receive substantial order from
State Electricity Boards, Transmission & Distribution Line State-based
Utilities, Erection Contractors, Transmission & Distribution line
hardware manufacturers, etc. in the coming years.
The Company remains focused in its objective to pursue the path of
profitability and sustained growth, maximize operational efficiency and
strategies to attain the highest standard of quality, safety and
productivity. Our attempts in optimizing the value of resources and
retaining talent will continue to serve us well in our journey to the
next level of growth.
Risks and Areas of Concern
Cost overrun in the Expansion project : The expansion project which was
initially estimated to be put up at a project cost of Rs.34.50 crores
absorbed around Rs.40 crores mainly due to depreciation of Indian
Currency against US Dollar as two of our equipment forming over 50% of
the project cost and sourced from Japan and USA were contracted in US
Dollars. The Project Cost increase was funded from higher Term Loan
borrowing and from Internal Accruals putting some pressure on the
Companys resources. Further a higher project cost means need for a
higher revenue to maintain the projected profitability.
Market Risk : Market dynamics are ever changing and competition is
increasing as more aluminum extrusion presses are coming all over the
country. New players are targeting resellers, consequently old players
who were earlier in reseller markets are turning towards end users
creating competition for the Company.
Competition from local manufacturers : Some of the customers prefer
local suppliers for faster deliveries. To compete with local suppliers,
we have to sacrifice our margin to neutralize the effect of higher
Freight and Central Sales Tax.
Employee Attrition : This is a risk for any industry where growth is in
double digits and the Company also faces a challenge in retaining its
trained personnel. The Company has created employee friendly policies
and a conducive environment for work life balance.
Trade union Activities: Our Workmens unions operate under the control
of three different political parties. It is a challenge to meet the
ever increasing expectations from Unions, who at times put unreasonable
demands due to inter-union rivalry in a bid to secure the support of
larger number of workmen.
The Company is addressing all these concerns in a structured manner and
various strategies are in place to overcome all challenges.
Managing Risk
The Company has formulated a comprehensive risk management policy with
the objective of providing a framework for the organization that
enables future activity to take place in a consistent and controlled
manner, contributing to effective use / allocation of capital and
resources within the organization. The Company has formulated systems
for regular identification and measurement of risks and measures to be
taken from time to time for avoidance, mitigation or reduction of
risks.
Segment-wise / Product-wise performance
The Company has two business segments i.e. manufacturing of Aluminium
Extruded Products and manufacturing of Power Transmission and Distri
-bution Line Hardware. However, the Company does not fall under any
of the criteria laid down under AS-17 and hence Segment Reporting is
not applicable.
Internal Control System and their adequacy
The Company has an adequate internal control system to ensure proper
and efficient use of the Companys resources, their protection against
any unauthorized use, accuracy in financial reporting and due
compliance of the Companys policies and procedures as well as the
Statutes. The internal audit is carried out by an independent firm of
Chartered Accountants on regular basis, and corrective actions are
taken where any shortcomings are identified.
The audit committee reviews the adequacy of the internal control system
and provides its guidance for constant improvement in the system.
Human Resources and Industrial Relations
The Company continues its focus on attracting and retaining the best
talent in the industry. The Company makes continuous effort to upgrade
the standard of present employees by conducting various training
programs.
As new business challenges emerge, there is a need to continue to be a
learning organization that supports operational excellence, continuous
improvement and rising standards of performance at all levels. Towards
this the Company reviews the HR Policies to accentuate performance-
linked rewards and professional growth.
A congenial work environment with proper infrastructure, continuous
training opportunities for its employees, future growth and development
opportunities and various welfare measures keep our employees
continuously motivated.
The Company focuses on ensuring that all new members of the company are
quickly assimilated into the organization by imbibing core
organizational values. The Induction Manual of the company has been
framed keeping the above in mind.
Developing a learning culture has always been and will continue to be
our uppermost priority. Our efforts in the coming years will be to
enable our employees to continually grow and build a competitive edge
by translating the learnings into positive actions.
Your company had a long term wage agreement with its workmen which was
valid till 31st October 2009. The negotiation for a new long term wage
agreement is in progress. Your company had employed 363 numbers of
permanent employees as on 3 Is1 March 2010.
We believe that together we can and together we will make the company
achieve its corporate mission.
Corporate Social Responsibility (CSR)
The Company is committed to being a good corporate citizenship and
believes in shouldering responsibility towards society, community and
environment. Unfortunately, the Company could not undertake any social
responsibility during the year 2009-10, about which we can write in
this Annual Report.
Directors
Mr. R.K.Sharma was appointed as Additional Director pursuant to the
provisions of section 260 of the Companies Act, 1956 on 27.10.2009. He
continues to hold office up to the date of the forthcoming Annual
General Meeting of the Company. The Company has received notice under
section 257 of the Act alongwith requiste deposit in respect of Mr.
Sharma proposing his appointment as Director of the Company. Resolution
seeking approval of the members for the appointment of Mr. R K Sharma
as Director of the Company has been incorporated in the Notice of the
forthcoming Annual General Meeting along with his brief details.
Mr.Vikram Jhunjhunwala and Mr. V K Mushran retire from directorship of
the Company by rotation, and being eligible, offer themselves for
re-appointment.
The Board of Directors of the Company has, at its meeting held on 20th
May, 2010 proposed for increase in the remuneration of Mr. M P
Jhunjhunwala, Chairman and Managing Director for the remaining tenure
of his service. The terms and conditions of his appointment, including
his remuneration, are subject to approval of the members. The
Supplemental Agreement to be entered into with him for increase in
remuneration is also subject to approval of the members.
Brief resume of the Directors proposed to be appointed/re- appointed,
nature of their expertise in specific functional area and the names of
the Companies in which they hold directorship and
membership/chairmanship of Board Committees, as stipulated under clause
49 of the listing agreement with the Stock Exchanges, are provided as
an annexure to the Notice convening the Annual General Meeting.
Credit Rating
During the year, CRiSIL, the Credit Rating Agency for the Companys
Banking facilities has revised its rating outlook on the Company Term
Loan to Stablefrom Negative, while reaffirming the rating at BB+.
The short-term rating has been reclassified as P4+ from P4. The
revision reflects CRISILs expectation that CEL will maintain its
moderate financial risk profile on the back of its established market
position, coupled with the benefits expected from the recently
increased capacities. The ratings continue to reflect CELs
susceptibility to stretched liquidity for the increased scale of
operations. The impact of these weaknesses is mitigated by CELs
diversified customer profile, which imparts stability to its revenues.
CEL will benefit from its increased capacity. A combination of benefits
of increased capacity and moderate financial risk profile will help the
company maintain its current credit risk profile.
Directors Responsibility Statement
The Board of Directors of the Company confirms:
L that in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
ii. that the selected accounting policies were applied consistently and
the directors made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at March 31, 2010 and of the profit or loss of the
Company for the year ended on that date;
iii. that proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv. that the annual accounts have been prepared on a going concern
basis.
Auditors / Auditors Report
The auditors, M/s. A L P S & Co., Chartered Accountants, retire at the
ensuing Annual General Meeting and have confirmed their eligibility and
willingness to accept office, if re-appointed. There are no
qualifications or adverse remarks in the Auditors Report, which
require any clarification/ explanation.
Cost Auditors
As per the directive of Central Government pursuant to the provisions
of Section 233B of the Companies Act, 1956, your Directors have
re-appointed M/s. N Radhakrishnan & Co. a firm of Cost Accountants, to
conduct the audit for the year ended 31st March, 2011.
Public Deposits
The Company did not invite or accept any deposit from the public under
Section 58A of the Companies Act, 1956.
Particulars as per Section 217 of the Companies Act, 1956
The information relating to Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo required under
section 217(1) (e) of the Companies Act, 1956, is set out in a separate
statement attached to this report and forms part of it.
Information in accordance with the provisions of section 217(2A) of the
Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 1975 as amended, regarding employees is given hereunder.
Corporate Governance
The Company has been proactive in following the principles and
practices of good Corporate Governance as an important step towards
building investor confidence, improve investors protection and
maximize long-term shareholder value.
The Company has complied with the Corporate Governance code prescribed
by the Stock Exchanges. A detailed report on corporate Governance along
with Auditors Certificate on compliance with the mandatory
recommendations on Corporate Governance is annexed to this report.
Corporate Governance Voluntary Guidelines 2009
The Company is yet to adopt the Corporate Governance Voluntary
Guidelines as issued by the Ministry of Corporate Affairs, Government
of India. However the Company is striving to achieve the highest
standards of corporate governance by adopting and implementing these
guidelines in a phased manner over a period of two to three years.
Acknowledgement
We thank our customers, vendors, investors and bankers for their
continued support during the year. We place on record our appreciation
of the contribution made by employees at all levels.
We thank the Government of India, the Customs and Excise Departments,
the Sales Tax Department, the Income Tax Department, the State
Government and other Government agencies for their support, and look
forward to their continued support in the future.
Cautionary Statement
Statements forming part of the Management Discussion and Analysis
covered in this report may be forward-looking within the meaning of
applicable securities laws and regulations. Actual results may differ
materially from those expressed in the statement. The Company takes no
responsibility to publicly amend, modify or revise any forward looking
statements on the basis of any subsequent developments, information or
events.
For and on behalf of the Board of Directors
Date: 20th May 2010 MP Jhunjhunwala
Place: Kolkata Chairman & Managing Director