Century Extrusions’ record carries two material concerns that sit outside the profit-and-loss statement: a ₹111 crore subsidy write-off routed through reserves while a Supreme Court challenge keeps recovery alive, and quarterly bank returns that have not agreed with the books for five years running. The rest of the picture is a disclosed, low-cash-conversion business with a pending rights issue, a modest pile of disputed tax dues, and a stable promoter holding.
Key findings
- A ₹111.1 crore subsidy write-off bypassed the P&L, though a Supreme Court challenge could reverse it
Major- The company wrote off a ₹111.1 crore subsidy receivable directly against accumulated reserves in FY2025-26, after the West Bengal Government retrospectively withdrew the Industrial Promotion Scheme 2004 via a notification dated 19 March 2025. The company has filed an adjoiner application before the Supreme Court against the withdrawal, meaning the entire amount could reverse if the challenge succeeds. The write-off exceeds FY26 profit after tax of ₹10.97 crore many times over, yet it never touched the income statement. - Quarterly bank returns on working capital have not agreed with the books for five consecutive years
Major- The CARO report states that quarterly returns of current assets filed with banks for working capital limits exceeding ₹5 crore were “not in agreement” with the books of accounts as of 31 March 2026, contradicting management’s own statement in the notes that they were materially in agreement. This mismatch has appeared in every year from FY2022 through FY2026. As of 31 March 2024, the gap between book values and lender-submitted values widened from ₹322 lacs in June 2023 to ₹393 lacs in March 2024, attributed to “exclusion of certain current asset with the lenders”. - Disputed statutory dues rose from nil to ₹7.6 crore in five years, with a ₹6.46 crore Entry Tax demand under Supreme Court appeal
Minor- Disputed statutory dues not deposited grew from nil in FY2020 and FY2021 to ₹7.6 crore in FY2026. The largest component is a ₹6.46 crore Entry Tax demand for FY2012-13 to Q1 FY2017-18, confirmed by the Divisional Bench of the Calcutta High Court and now under appeal to the Supreme Court. A GST demand of ₹45 lacs for FY2019-20 is under appeal to the First Appellate Authority, and an additional GST demand of ₹8 lacs for FY2018-19 was newly disclosed in FY2025-26. - Operating cash flow has been persistently weak, covering only 44% of EBITDA over ten years, and no dividend has been paid for at least six years
Minor- Cumulative cash flow from operations of ₹83 crore covered only 44% of cumulative EBITDA of ₹189 crore over the ten years to FY26. In FY26, CFO was ₹4.05 crore against a profit after tax of ₹10.97 crore, a cash conversion ratio of 0.37x. No dividend was recommended for FY26, FY25, FY24, FY23, or FY21; profits were proposed to be reinvested. - A pending ₹45 crore rights issue will repay unsecured borrowings, based on unaudited management estimates
Minor- The Board approved a rights issue to raise up to ₹45 crore on 11 February 2026; the Draft Letter of Offer states net proceeds will repay unsecured borrowings of ₹14 crore and fund working capital of approximately ₹20 crore for a brownfield expansion at Kharagpur. The objects, including the repayment of unsecured borrowings and working capital deployment, are based on management estimates and have not been appraised. Working capital loans as of 31 March 2026 are additionally secured by the personal guarantees of the Chairman and Managing Director. - NSE fined the company ₹10.86 lakh for board-composition non-compliance, and promoter demat accounts remain frozen
Minor- NSE imposed penalties of ₹5,42,800 (including GST) for the quarter ended September 2021 and ₹5,42,800 (including GST) for the quarter ended December 2021 for non-compliance with SEBI (LODR) Regulation 17(1) regarding the minimum number of six directors on the board. The demat accounts of all promoters were frozen as a result, and the company’s waiver applications to the exchanges remained unresolved as of the report date. - Promoter family executed a generational succession in June 2025, while shareholding and pledge levels stayed flat
Clean- Promoter shareholding was 52.04% as of 31 March 2026, unchanged from the prior year, with 13.54% of promoter shares pledged, also unchanged year-on-year. Mr. Vikram Jhunjhunwala resigned as Chairman and Managing Director effective 2 June 2025, and his son Mr. Shivanshu Jhunjhunwala was appointed as Chairman and Managing Director effective 3 June 2025 for a three-year term. Mr. Sanjeev Kishore, Non-Executive Independent Director, resigned effective 7 April 2026, citing a decision to explore new professional opportunities. - Revenue recognition was a Key Audit Matter only in FY2019-20, and the company discloses lower realisations in distant geographies
Clean- The auditor identified revenue recognition as a Key Audit Matter, an area needing the most judgement, in FY2019-20 due to the risk of revenue being recorded before control is transferred under Ind AS 115. The company has disclosed each year from FY2019-20 through FY2022-23 that it sells over 70% of its output in parts of India other than its local region, where realisation is lower due to high freight and Central Sales Tax or GST. Trade receivables stood at ₹35.62 crore as of FY2025-26, with receivables days of 27.17 days.
What to watch
- Supreme Court adjoiner application. The outcome of the company’s application against the retrospective withdrawal of the West Bengal Industrial Promotion Scheme 2004 could reverse the ₹111.1 crore write-off.
- Rights issue approval. In-principle approval for the ₹45 crore rights issue was pending from stock exchanges as of the FY26 Board Report date.
- Disputed statutory dues. Resolution of the ₹7.6 crore in disputed dues was pending before appropriate authorities as reported in the FY2025-26 Annual Report.
- NSE penalty waiver. The waiver applications submitted to the exchanges for the penalties imposed for the quarters ended September 2021 and December 2021 remained unresolved as disclosed in the FY2022-23 AGM notice.
- Quarterly bank return mismatches. Rectification of the differences flagged under CARO clause 2(b) was noted in the FY2025-26 Annual Report.
Bottom line: This is a disclosed record with a stable promoter group and a clean audit opinion, but two items sit outside the income statement and deserve the reader’s full attention. The ₹111 crore subsidy write-off through reserves is the largest single number in the file, and its fate rests with the Supreme Court. The five-year run of bank-return mismatches is a recurring control gap over secured working capital. Watch those two, the rights-issue approval, and the frozen promoter demat accounts.