However, since April 29, the scrip has been steadily moving northwards. In the last 14 trading sessions, while the BSE Sensex has climbed up by around 25 per cent to 4,079 points, Century has appreciated by more than 150 per cent to Rs 53.75 on the back of heavy volumes which have shot up from 88,450 shares on April 29 to 1,953,410 shares on May 20.

Operationally, during the first nine months of fiscal 1999, Century incurred a loss of Rs 86 crore, which is almost equal to the previous full year. The company's board is meeting on May 27 to consider the audited results for the full year. Though the fourth-quarter performance is expected to be better, it is quite unlikely that the company would be able to post any profit for fiscal 1999.

In other words, to remain on the dividend list, Century will have to dipinto its reserves this year as well. It is indeed ironical that Century is beginning its second century on a disastrous note. Barely two years ago, while celebrating the centenary year, the company's longest serving chairman, BK Birla, sounded exuberant. "Century has withstood history. Each day in its hundred years has been a stepping stone, each step a turning point. The vision of those who nurtured the company has transformed an ordinary textile mill into a multi-product, multi-locational global conglomerate. Yet, the core ideals have remained the same: Nation's prosperity, customer satisfaction, happiness of the employees and shareholders. Century is destined to achieve greater heights in the next millennium. I feel privileged in guiding such a multi-faceted company over 45 years," said he in the centenary year.

A year later in its 101st year, which is incidentally the `silver jubilee' year of BK Birla's chairmanship in the company, Century has slashed the dividend by a `golden' 50 points. Century paid adividend of just 10 per cent for fiscal 1998 as against 60 per cent in 1997. In fact, this was the lowest dividend from the company for very many years. And, even this small dividend was paid out of reserves as the company incurred a whopping loss of over Rs 86 crore in fiscal 1998.

It may be interesting to know that Century was actually founded by the promoter of Bombay Dyeing, which is presently a major competitor of Century in cotton fabrics. Bombay Dyeing was incorporated in 1879 and Century in 1897. Century commenced operations in June 1899. After the death of its founder Nowrosjee Wadia in 1905, Century went to his first born, Cursetjee (Cusrow) Wadia. In 1935, Cusrow sold Century and its managing agency to Chunnilal Mehta who nurtured the company for about 15 years.

Rameshwar Dasji Birla started acquiring shares of Century in 1945, though he himself didn't have any idea of the potential golden goose status of the company. In 1951, RD Birla became the chairman and the company took off on a newchapter of growth and diversification.

Meanwhile, RD Birla roped in his brother GD Birla for his wisdom and experience to guide the company. He also involved GD's youngest son, BK Birla, to look after the affairs of the company. BK took over as chairman in May, 1973. Century, which was well entrenched in its traditional business of cotton textiles for half a century, made its foray into man-made fibres in 1954, that is, after the Birlas took over management control.

The company's rayon division, which manufactures viscose filament yarn, commenced operations in 1956. Century successfully diversified further into non-textile related fields like cement in 1974, shipping in 1982 and paper in 1984. The textile division of Century reportedly has the largest composite mill in Asia producing over half a million square metres of fabrics along with about 82,000 kgs of cotton yarn each day. In 1990, a magazine from the Textile Institute in Manchester chose Century as the finest textile mill in the world.

Asregards asset creation, from less than Rs 25 lakh at the turn of this century (1899), Century's fixed assets have grown to whopping Rs 2,900 crore by March 1998. Since 1994, the company has more than doubled its assets. The company's reserves, which stood at Rs 2 crore in 1951 when the Birlas took over, grew to Rs 1,035 crore by March 1997. However, in fiscal 1998, reserves slipped to Rs 894 crore, partly due to a bonus issue and largely on account of the deficit in profit and loss account.

Coming to Century's disappointing recent performance, the directors' report for fiscal 1998 did say that working and operational parameters at all the plants of the company, barring the bagasse paper unit, were quite satisfactory but profitability was affected due to the continuing recession in the Indian economy. A close scrutiny of the company's working reveals that its operating profit margin had been on the decline since 1995. The margin, which was at 26 per cent in fiscal 1995, crashed to 12.5 per cent in 1998.Interest, too, shot up from 8.7 per cent to 9.6 per cent. This, coupled with an increase in depreciation from 6.6 per cent to 7.3 per cent, turned the bottomline negative.

In fact, Century had suffered a major setback in fiscal 1997 too with its net profit crashing from Rs 195.68 crore in the previous year to a meagre Rs 5.48 crore. Despite a minuscule profit, the company maintained the record dividend of 60 per cent in 1997, mainly in view of its centenary year. But in 1998, in the absence of any profit or celebration, the company drastically cut the dividend. This has certainly put the management under a cloud.

According to a shareholder, the management never gave any inkling of the impending disastrous performance in 1997 while celebrating the centenary year. Also, the fiscal 1998 directors' report exuded a bit of optimism about the next fiscal. But actually, the company has fared worse in fiscal 1999. As regards the long term, as the company has put on hold many of its capital expenditure programmes.Its future growth is bound to slow down.

Interestingly, while the company's own expansion plans are virtually stopped, it is liberally committing to promote the interests of the group companies. For instance, effective April 1, 1994, Kesoram's tyre division was leased out to an "Association of persons" under the umbrella of `Birla Tyres' whose consortium consisted of four BK Birla group companies of which Century alone staked in a major 60 per cent. As long as Century looked after its own growth plans, it remained the pride of the Birlas. But the day it was treated as a `cash cow' by the Birlas, it lost the blue chip status in the stock market.

(Arranged by Investar -- The Aarthik News & Research Syndicate)