Century Plyboards (India) Ltd Management Discussions.


Global economic overview

The global economy reported de-growth of 3.3% in 2020 compared to a growth of 2.9% in 2019, the sharpest contraction since World War II. This decline was largely due to the outbreak of the novel coronavirus and the consequent suspension of economic activities across the world. This led to global supply chain disruptions, resulting in a de-growth in some of the largest global economies. Consequently, global FDI reported a significant decline from $1.5 trillion in 2019 to $859 billion in 2020, the lowest since the 1990s and more than 30% below the investment trough that followed the 2008-09 global financial meltdown.

Regional growth % 2020 2019
World output (3.3) 2.9
Advanced economies (4.9) 1.7
Emerging and developing economies (2.4) 3.7

Performance of some major economies

United States: The country witnessed a GDP de-growth of 3.4% in 2020 compared to a growth of 2.3% in 2019. China: The countrys Gross Domestic Product grew 2.3% in 2020 compared to 6.1% in 2019 despite being the epicentre of the outbreak of the novel coronavirus.

United Kingdom: Britains GDP shrank 9.9% in 2020 compared to 1.4% growth in 2019, 2x the annual contraction recorded in the aftermath of the global meltdown in 2009. Japan: Japan witnessed a contraction of 4.8% in 2020, the first instance of a contraction since 2009. The global economy is projected to grow by 5.5% in 2021 largely due to the successful roll-out of vaccines across the globe, coupled with policy support in large economies.

Indian economic overview

The Indian economy passed through one of the volatile periods in living memory in 2020-21. At the start of 2020, India was among five largest global economies; its economic growth rate was the fastest among major economies (save China); its market size at 1.38 billion was the second largest in the world; its rural population of the under-consumed was the largest in the world. The Indian government announced a complete lockdown in public movement and economic activities from the fourth week the lockdown had a devastating impact on an already-slowing economy as 1.38 billion Indians were required to stay indoors - one of the most stringent lockdowns enforced in the world. The outbreak of the novel coronavirus and the consequent suspension of economic activities due to the pandemic-induced lockdown, coupled with muted consumer sentiment and investments, had a severe impact on the Indian economy during the first quarter of the year under review. The Indian economy de-grew 23.9 per cent in the first quarter of 2020-21, the sharpest de-growth experienced by the country since the index was prepared. The Indian and state governments partially lifted controls on movement, public gatherings and events from June 2020 onwards, each stage of lockdown relaxation linked to economic recovery. Interestingly, as controls relaxed what the country observed was a new normal: individuals were encouraged to work from home; inter-city business travel was replaced by virtual engagement; a greater premium was placed on the ownership of personal mobility modes (cars and two-wheelers); there was a sharp increase in home purchase following the need to accommodate an additional room for home working. The result is that Indias relief consumption, following the lifting of social distancing controls, translated into a full-blown economic recovery. A number of sectors in India – real estate, steel, cement, home building products and consumer durables, among others - reported unprecedented growth. India de-grew at a relatively improved 7.5 per cent in the July-September quarter and reported 0.4 per cent growth in the October-December quarter and a 1.6% growth in the last quarter of the year under review. The result is that Indias GDP contracted 7.3% during 2020-21, largely on account of the sharp depreciation of the first two quarters. This sharp Indian recovery – one of the most decisive among major economies – validated Indias robust long-term consumption potential.

Y-o-Y growth of the Indian economy

FY18 FY19 FY20 FY21
Real GDP growth (%) 7 6.1 4.2 (7.3)

Growth of the Indian economy, 2020-21

Q1, FY21 Q2, FY21 Q3, FY21 Q4, FY21
Real GDP (23.9) (7.5) 0.4 1.6
growth (%)

Indian economic reforms and recovery

There were a number of positive features of the Indian economy during the year under review.

India reported improving Goods and Services Tax (GST) collections month-on-month in the second half of 2020-21 following the relaxation of the lockdown, validating the consumption-driven improvement in the economy. The per capita income was estimated to have declined by 5% from Rs 1.35 lakh in 2019-20 to Rs 1.27 lakh in 2020-21, which was considered moderate in view of the extensive demand destruction in the first two quarters of 2020-21. A slowdown in economic growth and inflation weakened the countrys currency rate nearly 2.83% in 2020 from Rs 71.28 to Rs 73.30 to a US dollar before recovering towards the close of the financial year. Despite the gloomy economic scenario, foreign direct investments (FDI) in India increased 13% to US$57 billion in 2020. The gap between government expenditure and revenue was estimated at ~Rs 12 trillion due to increased borrowing by the government in May 2020 to address the COVID-19 outbreak. India jumped 14 places to 63 in the 2020 World Banks Ease of Doing Business ranking and was the only country in the emerging market basket that received positive FPIs of $23.6 billion in 2020; the country ranked eighth among the worlds top stock markets with a market capitalisation of $2.5 trillion in 2020. The Indian government initiated structural reforms in agriculture, labour laws and medium-small enterprise segments. The labour reforms were intended to empower MSMEs to increase employment, enhance labour productivity and wages. India extended the Partial Credit Guarantee Scheme by relaxing the criteria and allowing state-owned lenders more time to purchase liabilities of shadow banks. Under the Rs 45,000-crore partial credit guarantee scheme, announced as a part of the Atmanirbhar Bharat package, three additional months were given to banks to purchase the portfolio of non-banking financial companies. The government approved amendments to the Essential Commodities Act and brought an ordinance to allow farmers to selltheircroptoanyone;thechangestotheEssentialCommodities Act, 1955, were intended to ‘deregulate agricultural commodities (cereals, pulses, oilseeds, edible oils, onions and potatoes from stock limits). The government approved the Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020, to ensure barrier-free trade in agriculture produce. The Government relaxed foreign direct investment (FDI) norms for sectors like defence, coal mining, contract manufacturing and single-brand retail trading. The Union Cabinet approved the production-linked incentive (PLI) scheme for 10 sectors: pharmaceuticals, automobiles and auto components, telecom and networking products, advanced chemistry cell batteries, textile, food products, solar modules, white goods and specialty steel. These incentives could attract outsized investments, catalysing Indias growth journey.

Indias foreign exchange reserves continue to be in record setting mode – FY21 saw $101.5 billion dollars accretion in reserves, the steepest rise in foreign exchange reserves in any financial year; Indias forex reserves are ranked third after Japan and China and can cover more than a years import payments.


The outlook for the country appears to be improving following a sharp second surge of the pandemic in the first quarter of 2021-22. A medium-term optimism is that three down cycles – long-term, medium-term and short-term – could well be reversing at the same time. The long-term downtrend, as a result of non-performing assets, scams and overcapacity could be over; the medium-term downtrend that was caused by the ILFS crisis, select banks collapse and weakening NBFCs could well be over; the short-term downtrend on account of the pandemic has weakened following the acceleration of the vaccine. There is a possibility of each of these downtrends having played out, which could well lead to a multi-year revival in capital investments. Besides, a change in the US leadership could result in a revival in global, trade, benefiting Indian exporters.

The Indian government kept the inflation target of, the monetary policy framework unchanged at 2-6 % for the next five years, until the fiscal year 2025-26, measured in terms of consumer price index (CPI)-based inflation.

The Indian economy is projected to grow in the high single digit percentages in FY22 as per various institutional estimates, making it one of the fastest-growing economies. Indias growth journey could be the result of a culmination of favourable tailwinds like consistent agricultural performance, fiattening of the COVID-19 infection curve, increase in government spending, favourable reforms and an efficient roll-out of the vaccine, among others.


Indian furniture market overview

This prospects of the segment are being discussed in view of it being a prominent downstream customer for Century Plyboards. The Indian furniture market size was estimated at USD 55 billion and is expected to grow at a CAGR of 12.91% during the period 2020-2024, while the global furniture market was estimated at USD 1.1 trillion in 2020. The Indian furniture market accounted for 5% of the global demand, which indicates a growth potential especially at a time when a number of global buyers look forward to India as an alternative to China as a furniture manufacturing base.

The Covid-19 induced lockdown emerged as a game-changer for furniture demand. The current situation transformed consumer preferences as the demand for multi-functional, comfortable and aesthetic furniture increased, a trend likely to extend into 2021. An increasing focus on sustainability and recycling is making customers informed in substituting plastic furniture with engineered wooden/ refurbished equivalents. A rise in e-retail, rental furniture demand and supportive logistics infrastructure is expected to drive growth as well.

The Indian furniture market is estimated to have reached a value of US$ 2.22 billion in FY21 and projected to reach US$ 3.49 billion by FY26. One of the biggest game-changers was the sudden emergence of the Indian work-from-home (WFH) industry. The outbreak of the novel coronavirus and the resulting lockdown resulted companies opting for the work-from-home model for their employees. This resulted in the immediate increase in the sales of furniture products like study table, chairs and recliners, among others. Out of these, the largest share constituted study tables and tables in 2020.

Indian plywood market overview

This business accounted for 53 per cent of the revenues of Century Plyboards in 2020-21. The Indian plywood market was estimated at Rs 222.5 billion in 2020. Plywood is manufactured by aggregating thin layers of wood veneers using powerful adhesives. Softwood, hardwood (or a combination of both), like several varieties of maple, mahogany, oak, pine, cedar, spruce etc., are used in producing plywood for various applications. The softwood plywood sheets are designed for installation on a structures exterior, whereas, the hardwood plywood is used in manufacturing furniture and for other interior applications. In India, plywood is largely used for the manufacturing furniture, accounting for two-thirds of all the wood consumption.

On the basis of end use, the market is segmented into two parts- commercial and residential. The residential sector is the largest consumer for Indian plywood, constituting over 50% share of the market.

In the last few years, the expenditure on furniture increased as a result of increasing incomes, urbanisation, real estate investments and western influence. The introduction of new designs and diverse furniture product range helped in creating demand among consumers. The expansion of distributor network and exclusive outlets of furniture manufacturers also catalysed growth. Based on this reality, the market is expected to reach a value of USD 5.7 billion by 2024.

Indian wood and laminate flooring market overview

This business accounted for 20 per cent of the revenues of Century Plyboards in 2020-21. The Indian wood and laminate flooring market was estimated USD 3.09 billion in 2020 and is anticipated to expand at a CAGR of 6.4% over the next seven years. The introduction of engineered wood and laminates floors are emerging as alternatives for hardwood flooring, expected to grow the segment. The superiority in durability and quality and its easy maintenance function are expected to increase traction. Moreover, advancements in designing and printing technologies have enhanced the aesthetics and textures of the products, widening opportunities.

Ease of installation and requirement of less-skilled labourers of wood and laminate flooring (compared to conventional flooring materials like ceramic and stone tiles) are expected to influence product acceptance. The segment is also emerging as one of the biggest do-it-yourself flooring materials in the country.

Natural timber species like teak, maple, oak, rosewood, walnut, and bamboo are utilised in the production of wood and laminate flooring, offering high versatility. Wood and laminate flooring is resistant to stain warranting lower maintenance, favouring their use in commercial applications.

Growing population and urbanization have catalyzed construction for corporate offices, retail spaces, educational facilities, government buildings, hotels, lodging spaces, medical and healthcare units, industrial spaces and commercial utilities. This, in turn, is expected to influence the ofitake of wood, laminate and flooring products.

High penetration of ceramic tiles in the Indian market is anticipated to be one of the major challenges for wood and laminates flooring acceptance. The incidence of tropical temperatures could act as a bottleneck.

Particle board and medium density _bre (MDF) board in India

This business accounted for 21% of the revenues of Century Plyboards in 2020-21. The medium-density _bre board (MDF) is an engineered wooden product, created by crushing softwood into wood _bres and integrating it with wax and resin; thereafter panels are formed by applying high pressure at high temperatures. MDF is a building material similar in application to plywood but made of segmented _bres.

The Indian particle board market is anticipated to grow at a CAGR of 11.21% between 2021 and 2024. The key factor driving the market is the rising demand for furniture in the office and hospitality sectors. The increasing preference for medium-density _breboard (MDF) is expected to stagger the growth of the segment. In the raw material segment, wood dominated the market and is expected to grow even as bagasse is expected to report the fastest resource growth. Upcoming construction and infrastructure projects are emerging as opportunities.

Indian logistics industry overview

This business accounted for 4 per cent of the revenues of Century Plyboards in 2020-21. The logistics industry experienced a year challenged by irregular manufacturing and buying patterns, disrupted trade environment and lack of predictability. With increase in spread of the Covid-19 pandemic, the containerised trade witnessed a massive downfall with the exports during the first half of 2020, with Q2 CY20 experiencing a considerable decline of 34%. This went through an upturn in second half of the calendar year as the relaxations in lockdown brought back the normality in trade. Not only did the increase in the exports from Q2 to Q3 saw a sharp upward trajectory but the Q3 level increased by 14% YoY. However, the economic impact on consumers led to substantially lower imports, which dropped by 28 per cent as compared to the same period of 2019.

The fourth quarter of 2020 showed growth in imports and exports, moving the containerised trade towards normalcy. The demand for Indian exports continued to remain exceptionally strong, with most of it coming from consumer demand in North America and Europe.

During 2020, the Indian containerised trade business witnessed a major decline in its exports in the first half, but on the other hand, went through massive upside during the second half of the year, resulting in an ultimate rise of 1% in the annual exports. On the other hand, with contractions measured in the first 3 quarters, followed by a 36.3% QoQ growth in Q4 2020, the imports in this business experienced an overall decline of 14% in 2020

Growth drivers

Rising population: Indias population is anticipated to rise from 1.38 billion people in 2020 to 1.52 billion people by 2036, driving the need for homes and corresponding furniture.

Demographic dividend: The Indian populations median age is expected to reach 28 years in 2022 as against a global average of 30 years, indicating a youthful population willing to spend. Urbanisation: Indias urban population is anticipated to rise from 34.47% in 2020 to 39% by 2036 on a larger population count, strengthening the demand for housing and furniture.

Development of the real estate sector: The Indian real estate sector is expected to grow from USD 180 billion in 2020 to USD 1 trillion by 2030, catalysing the demand for furniture.

Pradhan Mantri Awas Yojana (PMAY): Under the PMAY scheme, 1.12 crore urban houses were sanctioned, creating a larger furniture demand.

Policy support: With Government initiatives like ‘Make in India and ‘Vocal for local, the Indian manufacturing sector has gained momentum; the Government of India aims to increase the share of the manufacturing sector from 16% to 25% by 2025.

Rental furniture: Due to increased financial uncertainty and economic contraction in the first half of FY 2020-21, the younger population opted to rent furniture from online portals instead of buying outright.



• The Company enjoys global prospects in addition to a growing presence in India

• The Company possess a wide product portfolio addressing diverse customer segments

• The Company has a deep and wide distribution channel that ensures consistent product availability

• The Company enjoys organized market leadership due to a strong brand

• The Company enjoys strategic presence of manufacturing plants, empowering quick product turnaround

• The company is present in businesses marked by a high entry cost for intending entrants


• Competition is strong especially from unorganized players in the lower priced segment

• Decision making is largely influenced by architects, carpenters and other opinion makers

• Excess of supply over demand in various product segments is putting margins under pressure


• Growth in the national per capita income (except for 2020-21)

• Rising demand for engineered wood products

• A young Indian population

• Increased penetration of the organized furniture sector following GST introduction


• Products are available at lower prices from unorganized players

• Lower availability of raw materials

• Reluctance of timber-rich countries to permit export without value-addition

• Rise in the cost of raw materials



• The company retained its leadership of this segment

• Revenue of the segment declined by 9% during the year under review, valued at Rs 1123.17 crore in comparison to Rs 1,234.29 crore during FY 2019-20.

• EBITDA margin stood at 10.8% as against 9.1% in FY 2019-20.

• Average realisations per unit of the end product strengthened 1.2% over the last year

• Capacity utilization was 68%


• Revenue of the segment declined from Rs 463.34 crore in FY 2019-20 to Rs 415.02 crore

• EBITDA margin of the segment increased from 13.5% in FY 2019-20 to 17.9%

• Average realisations per unit of the end product remained unchanged compared to last year

• Capacity utilization was 74%

Medium Density Fibre board

• Revenue from the segment increased 2.47% to Rs 359.40 crore in comparison to Rs 350.52 crore in FY 2019-20

• EBITDA margin stood at 25.8% as against 24.7% in FY 2019-20.

• Total volume witnessed a decrease of 3.87% during the year under review, with the current level standing at 147251 cbm.

• Capacity utilization was 72%

Particle board

• Revenue from the segment declined 9.1% to Rs 90.08 crore as against Rs 99.11 crore in FY 2019-20

• EBITDA margin was 20.1% as against 24.3% in FY 2019-20

• Total volume decreased 12.39% to 54971 cbm.

• Capacity utilization was 102%


• Revenues decreased from Rs 86.50 crore in FY 2019-20 to Rs 82.33 crore in FY 2020-21.

• EBITDA margin was 29.4% as against 33.8% in FY 2019-20


Balance Sheet

• Total borrowings including buyers credit for FY2020-21 stood at Rs 124.53 crore compared to Rs 253.12 crore during FY2019-20

• Total net fixed assets for FY2020-21 stood at H681.72 crore compared to Rs 721.10 crore in FY2019-20

• Net worth stood at Rs 1261.21 crore as on 31st March, 2021 compared to Rs 1069.71 crore as on 31st March, 2020, an increase of 17.90%.

• Inventories decreased by 6.8% from Rs 354.10 crore as on 31st March, 2020 to Rs 330.16 crore as on 31st March 2021.

Profit and loss statement

• Revenues from operations decreased 7.4% from Rs 2282.68 crore in FY2019-20 to Rs 2113.48 crore in FY2020-21

• EBITDA increased to Rs 334.25 crore in FY2020-21 compared to Rs 315.18 crore in FY2019-20

• Profit after tax was witnessed at Rs 192.07 crore in FY2020-21, with an increase of 21.4%

• Depreciation and amortisation stood at H62.63 crore in

FY2020-21 compared to H67.55 crore in FY2019-20 CENTURY PLYBOARDS (INDIA) LIMITED


Ratio FY2020-21 FY2019-20
Debtors Turnover (Days) 51 41
Inventory Turnover 57 57
(34 days for raw material and 23 (30 days for raw material and
days for 27 days for finished goods)
finished goods)
Interest Coverage Ratio 25.17 times 6.65 times
Current Ratio (with short term borrowings)> 1.87 1.49
Debt Equity Ratio 0.09 0.22
Operating Profit Margin (%) (EBIT Margin) 12.85% 10.85%
Net Profit Margin (%) / PAT 9.09% 6.90%
Return on Net Worth/ Average Equity 16.43% 15.49%
EBITDA Margin 15.82% 13.80%
Earnings per share (H) 8.64 7.12
Fixed Asset Turnover Ratio 3.01 3.13
Return on Average capital employed 20% 17.60%

Details of significant changes in the key financial ratios: (i.e. change of 25% or more as compared to the immediately previous financial year)

(1) Interest Coverage Ratio: Ratio has significantly improved due to substantial reduction in debt resulting in lower interest payment and increased in profitability (2) Current Ratio: Ratio has significantly improved due to a substantial reduction in debt (3) Net Profit Margin: This has increased significantly due to higher profits resulting out of cost reduction and improved realizations (4) Return on Net Worth/ Average Equity: This has improved due to increased profitability Apart from this, there has not been a change of 25% or more in any of the aforesaid key financial ratios.


Risk management

Risks are an integral part for a business. However, effective risk management is fundamental to the business activities of a company. Effective risk management comprises reducing the element of surprise, improve services, ensuring proactive change management, sourcing resources efficiently, optimized utilisation, leakage prevention and reduced wastage. While we remain committed to increasing shareholder value by developing and growing our business within our Board-determined risk appetite, we are mindful of achieving this objective in line with the interests of all stakeholders.

How Century Plyboards has created a progressively de-risked model


In a world marked by Black Swans and economic slowdowns, there is a growing priority on profit protection over linear growth. This priority brings into play the need for comprehensive risk management and mitigation. The objective of this de-risking commitment is to protect business viability during periods of economic uncertainty and initiate a rebound during economic revival.

This commitment to comprehensive de-risking has been drawn from the multi-decade experience of the Century Plyboards management, pivoted across the following priorities:

• Grow at the lowest cost, strengthening competitiveness across market cycles

• Grow with checks and balances

• Engaged in interior infrastructure products

• Presence in product spaces marked by a large operating headroom

• Recognition that growth represents potent de-risking

• Sustain growth even during economic slowness

Speed and security

At Century Plyboards, we are not as driven by ‘How fast can we grow? as much as ‘How fast can we grow without compromising our security? We have always believed that structured growth is a result of robust processes and systems. The most credible index of our governance is reflected in our credit rating, moderating debt cost and perpetuation long-term profitability.

Centurys risk management framework has translated into growth (assets, revenues, profits and cash flows) coupled with resistance to economic troughs. This attribute was validated in a volatile 2020-21 when the Indian economy de-grew, but Century not only managed to retain its revenues substantially but also increase profitability.

How we manage risks in our business

At Century Plyboards, sustainability is derived through the identification of probable business downsides and their proactive de-risking. This aspect is gaining increased relevance in a world where businesses and realities are marked by a larger number of uncertainties (Black Swans). The more competently we manage these risks, the stronger our capability to weather market cycles and the various unforeseens. The ‘how influences the ‘what: the process influences the effectiveness of risk mitigation at our company.

This is particularly critical in the interior infrastructure sector warranting technology intensity and process consistency. At Century Plyboards, we believe that this consistency is derived from a corporate consistency: the enunciation of a stable corporate strategy, focus on long-term business sustainability over short-term profitability and a clear understanding across all stakeholders of the doables and non-doables within the companys operating matrix.

At Century Plyboards, our risk management practices are founded on our guiding principles, which we consistently strive to apply across all our risk categories. The purpose of Companys Risk Management Committee is to ensure that the executive management team has a risk management framework in place that includes policy, procedures and assessment methodologies that helps the Company monitor and manage organizational risks effectively.

This predictability has enhanced process stability, effort outcomes and strengthened corporate sustainability. In view of this, risk management is not peripheral to the Companys existence but integral to it; it is not just a short-term priority but a long-term essential.


At Century Plyboards, we believe that a documented framework represents the heart of our governance commitment.

This documentation of our intent is a statement of all that we stand for and how we intend to conduct business. Over the years, we have documented this intent through various policies addressing all our stakeholders. On the one hand, we have created overarching conduct on how we – collectively and individually – will engage across a range of operations. Besides, we have dovetailed this process roadmap with an extensive documentation discipline that has not only enhanced traceability but also strengthened a review process that has helped correct deviations with speed, shrunk the learning curve, enhanced process predictability and identified benchmarks leading to sustainable improvement. The result is a systems-driven organization, enhancing business sustainability.

Strategic implementation and the risk management cycle

The Company addresses risk management from the strategic to the operational level - risk identification, measurement, analysis and assessment; our risk reporting, limitation (reduction to a level we have deemed appropriate) and monitoring enables us to closely follow all major risks.

Risk identification: At Century Plyboards, risks are identified with the help of relevant systems and indicators (quantitative component). Besides, our intrinsic reporting protocol makes it possible for our executives to report risks as and when they recognize.

Risk measurement: We consistently reinforce our risk measurement tools for each business function. The risks are measured at organizational and functional levels based on the risk perception of the functional teams.

Analysis and assessment: At Century Plyboards, it is vital that our risk management practices are efficient enough to enhance our financial performance. In this way our financial performance is a testimony of the efficiency of our risk management and operating model.

Risk reporting: At Century Plyboards, we periodically evaluate and report the effectiveness of our risk management to the Risk Management and other Committees covering category wise risk and the overall risks. This will potentially generate early alerts that make it possible to engage proactively in initiatives to counter the risks.

Risk management system

In 2020-21, Century Plyboards continued to strengthen its comprehensive system to promptly identify risks, assess their materiality and take measures to minimise their likelihood and losses. Risk management was applied across all management levels and functional areas.

Risk management framework objectives

Our risk management framework prescribes protocols for business conduct that seek to ensure that the risks influencing our business are competently addressed to achieve our objectives.

• Catalyse executive management in decision-making

• Mitigate the impact of threats and adverse impacts on the business

• Capitalise with speed on opportunities


During the period under review, the Risk Management Committee held one meeting.

The Companys Board-approved Risk Management Policy comprised material risks faced by the Company that were identified and assessed. The Company set up a policy framework for ensuring better management of project profile.

The Company provided importance to prudent project (conceptualization, implementation and sustenance) practices, putting in place suitable risk mitigation measures.

The risk management framework of Century Plyboards sought to minimize the adverse impact of risks on key business objectives and enabled the Company to leverage opportunities.

The mitigation of our prominent risks, 2020-21

Risks Potential consequences Likelihood of sustained risk occurrence External stimulus and our strategic response
Macro-economic risk: The business that we are in is largely influenced by economic factors • Can potentially stagger our companys growth Low • The Indian economy is one of the fastest growing among major economies
– national and regional • Can affect our competitiveness • The consumption-driven Indian economy is extensively under-consumed across products and resources especially related to interior infrastructure
– completely outside our control • Can affect our relevance within our region and sector • The company has consistently established its presence as an outperformer, accounting for the largest share of the organized market in India
Risks Potential consequences Likelihood of sustained risk occurrence External stimulus and our strategic response
Political risk: This comprises the risk of a change in the government that could review existing policies • A rethink of existing government policies could affect prospects of all related players Low • The Indian government announced long- term policies that have enhanced the relevance of the housing and interior infrastructure sector in India
• This could affect the companys credit rating, which represents the highlight of its corporate standing • The government has enunciated the need to accelerate housing for all, which provides the company with a robust foundation on which to grow in a sustainable manner
Regulatory risk: The business is marked by permissions and restrictions especially related to resources and raw material • This could potentially translate into censure and operational slowdown Low • We have positioned ourselves across products, customers and markets that address a growth in humankinds needs for a better living
• This could affect the companys credit-rating • We do believe that regulation in a core industry can streamline a largely unorganised sector, widening the market size and opportunity
• The companys strategies are in line with the national direction as far as interior infrastructure investments are concerned
Competition risk: The business could attract a sharp increase in competitive ports for cargo • Increased competition could affect growth and hence, margins Low • The company is the largest Indian interior infrastructure player on the strength of the largest capacity and the lowest operating costs
• The company has established a respect for enhancing the appearance and longevity of the interiors of its customers
Geographic focus risk: The business focus on select geographies could expose it to risks of change in weather patterns, affecting access to resources. • This could moderate operational and logistical competitiveness Low • The company invested in years of data- based research before it arrived at the selection of the geographies of its presence (manufacturing and resource access)
• This, in turn, could affect stakeholder confidence • The company has not yet faced any decline in productivity based on erratic (though fleeting) weather patterns
• The Company had invested in 7 manufacturing locations across 7 Indian States at the close of 2020-21, including 1 through its Subsidiary
Project management risk: An inability to commission projects on schedule could affect the companys reputation and market standing • This could stagger revenue inflow Low • The company coordinated across resource assessment, land acquisition, construction readiness, technical studies and supply chain management, resulting in projects being implemented quicker than the sectorial benchmark
• This could increase project cost and affect long-term project viability • The company drew on its long-standing projects management experience to commission projects on schedule and within budgeted cost
Receivables risk: An inability to sell products to credible customers could affect receivables and revenues. • Making low quality sales could results in slower inflows and probable default, necessitating provisions and write-o_s Low • The Company worked with credible customers resulting in timely cash flows and virtually no payment defaults
• A low revenue visibility could enhance the risk quotient of sales • The company worked with a receivables cycle of 51 days in 2020-21 compared with 41 days in 2019-20
Debt repayment risk: Any failure in repayment or servicing could affect reputation and prospects • This could affect the possibility of raising additional debt Low • The Company worked with virtually no debt on its books
• This could affect the companys credit and its prospects in mobilising debt at a low cost for onward expansion • The Company did not miss a single payment to lenders in nearly three decades of business existence
• The companys interest cover was a high 25.17 in 2020-21, indicating virtually the absence of debt
Locational risk: The company could invest in the wrong manufacturing location, a risk that is difficult to correct • The company could be affected by a decline in investment payback that could affect overall margins Low • The company conducts extensive studies across locations for port proximity, land costs and hinterland demand to arrive at an informed decision
• The risk could affect the companys brand and organisational morale • The robustness of the companys decision making capability is reflected in each of its plants being profitable and growing year- on-year
Demand risk: There is a risk that emerging product demand may not materialize the way once forecasted Erratic demand patterns can affect plant utilization and revenue predictability Low • Each of the companys product segments was selected based on a relatively under- explored demand pattern that has only grown over time
• The company has selected to deal in a product mix whose relevance is only likely to increase in a prosperous India
People risk: The company could fail to attract or retain competent professionals This could affect the companys ability to leverage knowledge, affecting its brand, productivity and profitability Low • The company is a preferred industry employer
• The companys talent retention is the highest within its sector
• The company offers unmatched professional and personal growth opportunities within its sector
Environment risk: The company may find it difficult to match tightening global ESG standards This could invite censure, criticism and the prospect of some environmentally- conscious OEM customers moving their business to competing companies Low • The company has made extensive investments in moderating its carbon footprint and extending beyond regulatory requirements of the day
• The company expects to derive 25 per cent of its electricity requirements from renewable energy by FY 2022-23
Safety risk: The business of manufacturing and transportation could be affected by low safety standards • Low safety could affect the companys respect Low • The company has invested extensively in mechanization to enhance physical safety
• Human injury could affect worker morale • The company deepened its safety orientation an overarching culture, training and SOP-based processes
Liquidity risk: The companys Balance Sheet may be stretched following increasing investment requirements • This may affect the companys liquidity and gearing Low • The company possesses adequate liquidity to fund existing growth needs without drawing debt or compromising Balance Sheet integrity
• In turn, this may affect the companys credit rating and the capacity to mobilise low cost resources for onward investment • The company is virtually debt-free, which is fiscally prudent and comfortable
Innovation risk: The company could face brand erosion if it does not introduce new products Slow portfolio rejuvenation could affect the companys brand among trade partners, resulting in a lower engagement Low The Companys R&D team consistently introduces new products that keeps trade channels energized and the end consumer engaged.
Distribution risk: Dependence on one geographic region could be a hindrance in the Companys growth if that • This could affect the Companys pan-India presence Low Centurys products enjoy national availability through 28 marketing offices, covering almost all the cities and townships. The Company enjoys a presence in more than a dozen
particular region faces a demand slowdown. • This could in turn and over time affect the Companys ability to capitalise on pockets of demand upturn countries.
Forex fluctuation risk: This is associated with fluctuations in foreign currency exchange rates. Volatility in currency valuations could impact the bottom-line. Medium The Company manages the currency risk by monitoring exposures and then hedging the forex exposure. The Company avails overseas buyers credit, on a case-to-case basis to benefit from extended credit periods as well as manage long-term fluctuations.


The Company has created an enabling working environment where employees are selectively recruited, trained and provided with superior career growth. During the year under review, the Company organised various training programmes with a focus on enhancing functional and behaviourial competencies. The Company enjoys a harmonious relationship with factory workers; it comprises a blend of millennial and experienced employees. The Companys employee strength stood at 6365 as on 31st March 2021.


The Company has put in place an effective internal control system which undergoes continuous review. Additionally, corrective measures are taken to enhance efficiency levels, if and when required. The Company has been accredited with ISO 9001 and ISO 14001 certifications, indicating the keen emphasis it has laid on quality management and eco-friendly processes. The Companys SAP-based ERP system has been upgraded to SAP HANA which offers inexhaustible possibilities to define queries for detection of exceptions and/or detection of deviating transactions, real-time analytics on transactional data, unmatched flexibility when changing reporting structures and even instantaneous simulation of business scenarios.


The statements in the ‘management discussion and analysis section describing the Companys objectives, projections, estimates and prediction may be considered as forward looking statements. All statements that address expectations or projections about the future, including but not limited to statements about the Companys strategy for growth, product development, market positioning, expenditures and financial results are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statement on the basis of any subsequent developments, information or events.