Century Enka

The Directors present the 42nd Annual Report and Audited Statements of
 Accounts of the Company for the year ended 31st March, 2008. The
 turnover increased by 21% and profit before depreciation, interest and
 taxation increased by 19%. However, increased depreciation charge, high
 interest cost and adverse conditions, such as over supply of Polyester
 POY, high raw material and energy cost, cheap import of Nylon Tyre Cord
 Fabric (NTCF) continued through- out the year have affected the
 profitability. Despite these adverse conditions, your Company
 maintained its market position and achieved these results.
 
 FINANCIAL RESULTS
                                                         Rs. / Crores
                                               This        Previous
                                               Year            Year
 
 Income from Operations (Gross)             1313.34         1089.85
 Profit before Depreciation,
 Interest and Taxation                       113.25           94.95
 Add/(Less) :
 Depreciation                                (59.02)         (54.20)
 Interest (Net)                              (30.62)         (17.97)
 Taxation (Net) (including
 deferred and fringe benefits tax)            (7.60)          (6.06)
 Voluntary Retirement Scheme
 compensation                                 (2.60)            -
 Net Profit                                   13.41           16.72
 Add : Balance brought forward
 from previous year                          112.77          112.12
 Profit available for appropriation          126.18          128.84
 Less : Dividend                              10.03           12.03
 Tax on Dividend                               1.70            2.04
 General Reserve                               1.35            2.00
 Balance carried forward to
 next year                                   113.10          112.77
 
 DIVIDEND
 
 We recommend a dividend of Rs. 5.00 per Equity Share of Rs.10/- each
 for the year ended 31st March, 2008 (Previous year Rs. 6.00 per Equity
 Share of Rs. 10/- each).
 
 COURSE OF BUSINESS AND OUTLOOK
 
 The Managements Discussion and Analysis Report, as required under
 Corporate Governance, forming a part of this report, is a reflection of
 the current state of business. It also deals with the opportunities and
 threats faced by your Company and the Company outlook.
 
 The demand growth of Polyester POY is good.  Polyester being cheap yarn
 among the synthetic yarns and having better properties is a preferred
 yam for textiles, catering to both low and high income group.  However,
 over supply position of Polyester POY coupled with high and volatile
 crude oil prices which moved during the year 2007-08 between U.S.
 Dollar 76 per barrel in July 2007 to U.S. Dollar 110 per barrel in
 March 2008 and high energy cost have considerably affected margins.
 
 The demand for Nylon Tyre Cord Fabric (NTCF) is also good. Despite good
 demand, the margins have been affected due to cheap imports. It is
 expected that demand for NTCF would continue to grow with large
 expansion announced by tyre industry.
 
 Efforts are made to improve margins by rationalisation of work force,
 improvement of plant productivity, cost control, product mix and saving
 in interest cost. Your Directors are cautiously optimistic for improved
 performance.
 
 Your Companys thrust on modernisation and debottlenecking of plant
 continued to improve plant efficiency and quality of products to
 compete with products manufactured from latest technology plants.
 
 EXPANSION
 
 The capacity expansion of NTCF of 8000 M.T. per annum completed in the
 quarter ended 31st March, 2007 has been stabilised and operating at
 full capacity.  The product is commanding preferential choice of
 customers.
 
 HUMAN RESOURCE DEVELOPMENT AND ENVIRONMENT
 
 The report on Managements Discussion and Analysis includes its
 observations on human relations, approach to human resource
 development, safety, health and environment.
 
 The fast changing business scenario has brought HRD functions on
 forefront. The existing performance appraisal system has been fine
 tuned so that talented and capable employees are identified,
 appropriately rewarded and groomed for higher level.
 
 The Board wishes to place on record its deep appreciation for sincerity
 and commitment of its employees to the organisation.
 
 AWARD
 
 We are glad to report that your factory Rajashree Polyfil, Bharuch has
 been conferred National Safety Award for Accident Free Year 2005 from
 National Safety Council and for the fifth consecutive year Gujarat
 State Safety Award for maintaining lowest Disability Injury Index (DM)
 for the year 2006.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 Energy conservation measures, progress made in technology absorption
 and foreign exchange earnings and outgo, as required by the Companies
 (Disclosure of Particulars in the Report of Board of Directors) Rules,
 1988 are set out in a separate statement attached hereto and forming
 part of the report.
 
 CORPORATE GOVERNANCE
 
 Your Company reaffirm its commitment to Corporate Governance and is
 fully compliant with the conditions of Corporate Governance stipulated
 in clause 49 of the Listing Agreement with Stock Exchanges. A separate
 section on compliance with the conditions of Corporate Governance and a
 Certificate from the firm of practising Company Secretaries dated 5th
 May, 2008 in this regard is annexed hereto and forms a part of the
 Report.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to the requirements of Section 217(2AA) of the Companies Act,
 1956 and on the basis of explanation and compliance certificate given
 by the executives of the Company and subject to disclosures in the
 Annual Accounts and also on the basis of discussions with the Statutory
 Auditors of the Company from time to time, we state as under:
 
 (i) that in the preparation of the annual accounts, the applicable
 accounting standards had been followed;
 
 (ii) that the directors had selected such accounting policies and
 applied them consistently and 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 at the end of the financial year and of the
 profit of the Company for that period;
 
 (iii) that the directors had taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 safeguarding the assets of the
 Company and for preventing and detecting fraud and other
 irregularities; and
 
 (iv) that the directors had prepared the annual accounts on a going
 concern basis.
 
 DIRECTORS
 
 In accordance with Articles of Association of the Company, Mr. B.K.
 Birla and Mr. V. Dixit, Directors of the Company will retire by
 rotation and being eligible, offer themselves for re-appointment.
 
 
 AUDITORS
 
 Messrs. Price Waterhouse, the Auditors of the Company will retire from
 the office of the Auditors and being eligible offer themselves for
 re-appointment.  Their remuneration for the current year is to be fixed
 by you.
 
 COST AUDITORS
 
 The Cost Accounts Records maintained by your Company for both the
 products - Polyester and Nylon are subject to yearly audit by qualified
 Cost Auditors.  Your Company has appointed M/s. N.I. Mehta & Co., a
 firm of Cost Auditors for conducting the audit of such records for the
 financial year 2007-08.
 
 PARTICULARS OF EMPLOYEES
 
 Details of remuneration paid to employees as required by Section
 217(2A),of the Companies Act, 1956 are set out in a separate statement
 annexed hereto and forms a part of the report.
 
                         For and on behalf of the Board of Directors
 
                                            B. K. BIRLA
 Place : Mumbai                           G. M. SINGHVI
 Date  : 5th May, 2008                        Directors