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Directors Report of Cera Sanitaryware Ltd.

Mar 31, 2016

The Directors have pleasure in submitting the Annual Report together with the Statement of Accounts of your Company for the year ended 31st March, 2016.

Performance

The summary of your Company''s financial performance is given below:

(Rs. in lacs) Year ended Year ended March 31, 2016 March 31, 2015

Profit before Depreciation and Taxes & Exceptional item 14578.40 11638.71

Deducting there from Depreciation of 1631.98 1546.09

Profit before Tax 12946.42 10092.62

Deducting there from taxes of:

- Current Year 3943.12 2525.25

- Deferred Tax 656.88 800.92

Profit after Tax 8346.42 6766.45

Add: Balance brought forward from previous year 5000.00 3000.00

Amount available for Appropriations 13346.42 9766.45

The proposed appropriations are:

1. Proposed Dividend 1170.53 812.87

2. Tax on Proposed Dividend 244.67 165.48

3. General Reserve 3931.22 3788.10

4. Balance carried forward 8000.00 5000.00

Total 13346.42 9766.45

Transfer to Reserves

The Company has transferred a sum of Rs. 3931.22 Lacs to General Reserve in the current year (previous year Rs. 3788.10 Lacs).

Highlights / Performance of the Company

Turnover of the Company for the year increased by 13.63% to Rs. 933.69 Cr. as compared to Rs. 821.67 Cr. previous year.

Profit before tax for the year increased by 28.26% to Rs. 129.46 Cr. as compared to Rs. 100.93 Cr. previous year.

Profit after tax for the year increased by 23.35% to Rs. 83.46 Cr. as compared to Rs. 67.66 Cr. previous year.

The Directors are pleased to inform you that your Company has continued to grow despite adverse market conditions in 2015-16 due to its customer loyalty, distribution strength, product quality, brand equity and after-sales service.

The well-entrenched distribution network of your Company is being supplemented with an array of CERA Style Studios and CERA Style Galleries in different towns, which showcase your Company''s products in an exclusive ambience.

Sanitaryware Unit

During the year the plant had run at its optimum capacity. The focus of your Company now is on premiumisation by producing more of high value items now onwards, thus maximizing its optimum capacity.

Faucetsware Unit

The new ranges and designs of Faucets have been well accepted by the market. The expansion plan of the Company has been attained in the year. Owing to this success, the Company has plans for premiumisation by producing more of high value items.

Bathware Unit

Your Company has continued to market products like kitchen sinks and mirrors to its range besides products like shower cubicles, shower panels, steam cubicles, whirlpools and importing & marketing high-end wellness range under the brand name CERA.

Tiles Unit

Your Company has successfully launched CERA tiles in all markets. The exclusive tie up with manufacturers of tiles has helped your Company maintain its quality standards which distinguishes CERA tiles.

Joint Ventures

Your Company has entered into a Joint Venture with Anjani Tiles Limited at Andhra Pradesh with 51% Equity and 55.92% Preference Share holding amounting to Rs. 19.64 Cr. for producing Vitrified Floor Tiles of 10,000 Sq. Mtr. per day having total project cost of Rs. 68 Cr. The commercial production of tiles from this plant has started from 1st April, 2016.

Green Energy Unit

As a part of national policy and Green initiative,company has stabilized power cost by generation of electricity through non- conventional sources for captive use.

The installed capacity of Non-conventional Energy unit of the Company now stands at 12.825 M.W.

The non-conventional Wind and Solar Power has produced 2,03,37,139 KWH for captive use against 1,03,61,993 KWH in the previous year.

Packaging Unit

Your Company is also proposing to enter into Joint Venture for packaging unit for manufacture of corrugated boxes with an equity of 51%. The total project outlay will be Rs. 2.70 Cr.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

Conservation of energy

The Company has two sources of energy i.e. Natural Gas is being supplied by GAIL & Sabarmati Gas Ltd., for operating the plant. The pricing and quantity of the gas is based on the availability, international pricing and contract with the company. For energy conservation Company has installed fuel efficient burners to control gas consumption and every technological development is being taken care of.

Second source of energy for running machineries is electricity supplied by local Discom. To compensate within the energy consumption by way electricity, the Company has set up Wind Turbines of 11.825 MW and 1.00 MW Solar Plant which will generate about 90% of the requirements and it will offset against monthly consumption of energy bill.

Technology absorption and foreign exchange earnings and outgo

The information on technology absorption and foreign exchange earnings and outgo stipulated under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith as a separate Annexure-I.

Subsidiary Company

The Company has one Subsidiary company namely Anjani Tiles Limited which became subsidiary of the company w.e.f. 23rd November, 2015. It has started commercial production from 1st April, 2016. There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). Further there has been no material change in the nature of business of the subsidiary.

Those Shareholders who are interested in obtaining a copy of the audited annual accounts of the subsidiary company may write to the Company.

In terms of proviso to sub section (3) of Section 129 of the Act, the salient features of the financial statement of the subsidiaries is set out in the prescribed form AOC - 1, which is attached herewith as a separate Annexure - II.

Particulars of contracts or arrangements with related parties

All transactions entered into with Related parties as defined under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 during the financial year were in the ordinary course of business and on an arm''s length basis and do not attract the provisions of Section - 188 of the Act.

There were no materially significant related party transactions made by the Company with Directors, Key Managerial Personnel or other designated Persons which may have a Potential Conflict with the interest of the Company at large. All related party transactions were placed before the Audit Committee and also the Board for approval. The Policy on related Party transactions as approved by the Board is uploaded on the Company''s website i.e. www.cera- india.com.

The particulars of contracts or arrangements with related parties as per Section 188(1) of the Companies Act, 2013, including arm''s length transactions as per Form No.AOC-2 are enclosed as separate Annexure – III.

Corporate Social Responsibility

Your Company has always laid emphasis on progress with social commitment. We believe strongly in our core values of empowerment and betterment of not only the employees but also our communities. Following this principle the Company had laid the foundation of a comprehensive approach towards promoting and facilitating various aspects of our surrounding communities.

The Board has approved a policy for Corporate Social Responsibility and same has been uploaded on the website i.e. www.cera- india.com

As required under Section 135 of the Companies Act, 2013 and to demonstrate the responsibilities towards Social upliftment in structured way, the Company has formed a Policy to conduct the task under CSR, during the year.

The report on Corporate Social Responsibility (CSR) Activities along with Annexure as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as a separate Annexure – IV.

Directors'' Responsibility Statement

In compliance of Section 134 (5) of the Companies Act, 2013, the Directors of your Company confirm:

that in the preparation of annual accounts, the applicable accounting standards have been followed and there are no material departures;

that such accounting policies have been selected and applied 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 as on March 31, 2016 and of the Profit of the Company for the year ended on that date.

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;

that the annual accounts have been prepared on a going concern basis.

that internal financial controls have been laid down to be followed by the company and that such internal financial controls are adequate and were operating effectively.

that proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Managerial Remuneration and Employees

Details required pursuant to Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are enclosed as a separate Annexure –V.

Details of employees required pursuant to Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as a separate Annexure – VI.

Company has not offered its shares to its employees under ESOS during the year under review.

Company has not sanctioned loan to any of its employees for purchase of company''s shares under any scheme.

Corporate Governance and Management Discussion and Analysis

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, report on Corporate Governance along with the Auditors'' statement on its compliance and Management discussion and Analysis have been includedin this Annual Report as per separate Annexure -VIII and Annexure-A respectively.

Number of Meetings of the Board

The Board of Directors, during the financial year 2015-16 duly met 5 times on 23.04.2015, 11.06.2015, 15.07.2015, 23.10.2015 and 02.02.2016 in respect of which meetings, proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purpose.

Extract of Annual Return

The details forming part of the extract of the annual return in Form No. MGT-9 is annexed herewith as a separate Annexure - VII.

Particulars of Loans, guarantees or investments u/s 186.

The loans if any, made by the Company are within the limits prescribed u/s 186 of the Companies Act, 2013 and no guarantee or security is provided by the Company.

Details of Investments covered u/s 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

Risk Management Policy

The Board has approved and implemented risk management Policy of the Company including identification and element of risks.

The Risk Management is overseen by the Audit Committee / Board of Directors of the Company on a continuous basis. The Committee oversees Company''s process and policies for determining risk tolerance and review management''s measurement and comparison of overall risk tolerance to established levels. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuous basis. For details please refer to the Management Discussion and Analysis enclosed as separate Annexure - A to this report.

Audit Committee

The Company has constituted Audit Committee. For details please refer Corporate Governance Report attached as a separate Annexure- VIII.

Internal Control System and its adequacy

The Company has internal control system commensurate with the size, scale and complexity of its business operations. The scope and functions of Internal Auditor are defined and reviewed by the Audit committee. The Internal Auditor reports to the Chairman of the Audit Committee. The Internal Auditor assesses opportunities for improvement of business processes, systems and controls, to provide recommendations, which can add value to the organization.

Dividend

Your Directors recommend a dividend of Rs. 9.00/- per share (180%) (Previous year Rs. 6.25/- per share) (125%) on 1,30,05,874 equity shares of Rs. 5/- each fully paid for the year ended 31.03.2016, to be paid subject to approval by the members at the ensuing Annual General Meeting.

During the year, the unclaimed dividend pertaining to the financial year ending 2007-08 were transferred to the Investor Education and Protection Fund.

Share Capital

The paid up Equity Share Capital as on 31st March, 2015 was Rs. 650.29 lacs. During the year under review the Company has not issued any equity shares. As on 31st March, 2016 the Share Capital was Rs. 650.29 lacs.

No shares with differential voting rights, stock or sweat equity shares were issued by the Company during the year under review.

Exchequer

The Company has contributed Rs. 142.40 Crores to the exchequer by way of excise duty, customs duty, service tax, income tax, VAT, sales tax and other fiscal levies.

Deposits

The Company has discontinued its Fixed Deposit Scheme from the Financial Year 2012-13. Despite efforts to identify and repay the unclaimed deposits, the total amount of Fixed Deposit matured and remaining unclaimed with the Company as on 31st March, 2016 was Rs. 1.34 lacs.

The Company has not accepted fixed deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014. There have been no default in repayment of deposits or payment of interest thereon during the year.

Finance

During the year under review, the Company repaid loans of Rs. 890.30 Lacs to Financial Institutions and Banks.

Directors

Members at the Annual General Meeting held on 22-08-2014 have appointed Shri Ashok Chhajed, Shri Sajan Kumar Pasari, Shri Govindbhai P. Patel and Shri Lalit Kumar Bohania as Independent Directors of the Company to hold office for five consecutive years for a term up to 31st March, 2019 (they will not retire by rotation).

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013. The company keeps informed independent directors about changes in the Companies Act, 2013 and rules from time to time and their role, duties and responsibilities.

Smt. Deepshikha Khaitan is due to retire at the end of the ensuing Annual General Meeting and being eligible, offers herself for re- appointment. Brief resume of Smt. Deepshikha Khaitan as required as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in the notice convening the Annual General Meeting of the Company. Shri Ashok Chhajed ceased to be a director of the company w.e.f. 23.04.2016 on his resignation.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Rules made thereunder, Schedule - IV of the Act and SEBI (LODR) Regulations, 2015, the Board has carried the evaluation of its own performance, Individual Directors, its Committees, on the basis of attendance, contribution and various criteria as recommended by the Nomination and Remuneration Committee of the Company.

The performance of each of the non-independent directors (including the chair person) was also evaluated by the Independent Directors at the separate meeting held of Independent Directors of the Company.

Policy on Directors appointment and remuneration

Criteria determining the qualifications, positive attributes and independence of Directors

Independent Directors

- Qualifications of Independent Director

An Independent director shall possess appropriate skills, qualifications, experience and knowledge in one or more fields of finance, law, management, marketing, administration, corporate governance, operations or other disciplines related to the Company''s business.

- Positive attributes of Independent Directors

An independent director shall be a person of integrity, who possesses knowledge, qualifications, experience, expertise in any area, integrity, level of independence from the Board and the Company etc. Independent Directors are appointed on the basis of requirement of the Company, qualifications & experience, association with the Company etc. He should also devote sufficient time to his professional obligations for informed and balanced decision making; and assist the company in implementing the best corporate governance practices.

- Independence of Independent Directors

An Independent director should meet the requirements of Section 149(6) of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

Other Directors and Senior Management

The Nomination and Remuneration Committee shall identify and ascertain the qualifications, expertise and experience of the person for appointment as Director or at Senior Management level and recommend to the Board his / her appointment.

The Company shall not appoint or continue the employment of any person as Whole-time Director or Senior Management Personnel if the evaluation of his performance is not satisfactory.

Other Details are disclosed in the Corporate Governance Report under the head Nomination and Remuneration Committee and details of Remuneration (Managing Director / Whole Time Director and Non- Executive Directors).

Remuneration / commission from Holding or Subsidiary Company

Managing Director or Whole Time Director is not receiving any remuneration / commission from any Holding Company or Subsidiary Company.

Remuneration Policy

It is separately disclosed in the Corporate Governance Report attached as a separate Annexure - VIII to this Report.

Auditors and their Observations:

H.V. Vasa & Co., Statutory Auditors of the company retire at the end of forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends their re-appointment at the ensuing Annual General Meeting.

The Auditors'' Report and Secretarial Audit Report to the members for the year under review does not contain any qualification, reservation or adverse remarks or disclaimer.

The Statutory Auditors have not reported any fraud during the year under review.

Cost Auditors

Company has appointed K.G.Goyal & Co., as Cost Auditors for conducting cost audit for the year 2016-17.

Secretarial Audit

Pursuant to provisions of Section 204 of Companies Act, 2013 and rules made there under, the Company has appointed Umesh Parikh and Associates, Practicing Company Secretaries to undertake the Secretarial Audit of the Company for the year 2016-17.

The Secretarial Audit Report given by Umesh Parikh and Associates, Company Secretaries in practice is annexed with this report.

Insurance

Your Company has adequately insured all its properties including Plant and Machinery, Building and Stocks.

Industrial Relations

Your Company''s relations with its employees remained cordial throughout the year. The Directors wish to place on record their deep appreciation for the services rendered by workers, staff members and executives of the Company.

Your Company has taken adequate steps for the health and safety of its employees, as required under the Gujarat Factories Rules, 1963. The Company has not received any complaint under The Sexual Harassment of women at Workplace (prevention, prohibition and redressal) Act, 2013 and the Company has organized three workshops under the said Act.

Material Changes Affecting Financial Position of the Company

No material changes or commitments, affecting the financial position of the Company have occurred between the end of the financial year of the company to which the financial statements relate, i.e. 31st March, 2016 and the date of the Board''s Report.

Change in nature of business

No changes has been made in nature of business carried out by the company during the financial year 2015-16.

Orders passed by Regulatory Bodies or Courts

No regulatory body or court or tribunal has passed any significant and material orders impacting the going concern status and operations of the Company.

Vigil Mechanism

The company has implemented Vigil Mechanism. For details please refer Corporate Governance Report attached as a separate Annexure - VIII.

Appreciation

Your Directors thank the Financial Institutions and Bankers for extending timely assistance in meeting the financial requirements of the Company. They would also like to place on record their gratitude for the co-operation and assistance given by State Bank of India, Yes Bank Ltd., Kotak Mahindra Bank Ltd. and various departments of both State and Central Governments.

For and on behalf of the Board of Directors,

Kolkata. Vikram Somany

3rd May, 2016 Chairman and Managing Director


Mar 31, 2015

The Members,

The Directors have pleasure in submitting the Annual Report together with the Statement of Accounts of your Company for the year ended 31st March, 2015.

Performance

The summary of your Company''s financial performance is given below:

(Rsin lacs) Year ended Year ended March 31,2015 March 31, 2014

Profit before Depreciation and Taxes & Exceptional item 11638.71 9464.65

Deducting there from Depreciation of 1546.09 1224.70

Profit before Tax 10092.62 8239.95

Deducting there from taxes of:

- Current Year 2525.25 2651.35

- Deferred Tax 800.92 398.04

Profit after Tax 6766.45 5190.56

Add: Balance brought forward from previous year 3000.00 1900.00

Amount available for Appropriations 9766.45 7090.56

The proposed appropriations are:

1. Proposed Dividend 812.87 632.74

2. Tax on Proposed Dividend 165.48 111.45

3. General Reserve 3788.10 3346.37

4. Balance carried forward 5000.00 3000.00

Total 9766.45 7090.56

Highlights / Performance of the Company

Turnover of the Company for the year increased by 23.80% to Rs. 821.67 Cr. as compared to Rs. 663.69 Cr. previous year.

Profit before tax for the year increased by 22.48% to Rs. 100.93 Cr. as compared to Rs. 82.40 Cr. previous year.

Profit after tax for the year increased by 30.36% to Rs. 67.66 Cr. as compared to Rs. 51.90 Cr. previous year.

The Directors are pleased to inform you that your Company has continued to grow despite adverse market conditions in 2014-15 due to its distribution strength, product quality, brand equity and after-sales service.

The well-entrenched distribution network of your Company is being supplemented with an array of CERA Style Studios and CERA Style Galleries in different towns, which showcase your Company''s products in an exclusive ambience.

Sanitaryware Unit

Your Company has expanded its annual production capacity to 3.0 Mn. Pcs. for meeting the increased demand of its products. During the year the plant had run at its optimum capacity despite being affected by the flooding due to heavy rains. Further, by adding balancing equipments, the company aims to achieve production of 3.2 Mn. Pcs. p.a.

Faucetsware Unit

The new ranges and designs of Faucets have been well accepted by the market. The company attained its full capacity in the year. Owing to this success, the company has further expanded its capacity to 2.34 Mn. Pcs. p.a.

Bathware Unit

Your Company has continued to market products like kitchen sinks and mirrors to its range besides products like shower cubicles, shower panels, steam cubicles, whirlpools and importing & marketing high-end wellness range under the brand name CERA.

Tiles Unit

Your Company has successfully launched CERA tiles in all markets. The exclusive tie up with manufacturers of tiles has helped your Company maintain its quality standards which distinguishes CERA tiles.

Green Energy Unit

As a part of national policy and Green initiative, generation of electricity through non-conventional sources and to stabilize power cost, company has installed two WIND-TURBINES of 4.00 MW and SOLAR ENERGY of 1.00 MW capacity at Dist. Jamnagar & Dist. Mehsana respectively in Gujarat during the year.

Thereby the installed capacity of Non-conventional Energy unit of the company now stands at 12.825 MW from 7.825 MW.

The non-conventional Wind and Solar Power has produced 1,03,61,993 KWH against 62,85,830 KWH in the previous year.

Corporate Governance and Management Discussion and Analysis

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, report on Corporate Governance along with the Auditors'' statement on its compliance and Management discussion and Analysis have been included in this Annual Report as a separate annexure.

Corporate Social Responsibility

The report on Corporate Social Responsibility (CSR) Activities alongwith Annexure as per Rule 9 of The Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as a separate Annexure.

Directors'' Responsibility Statement

In compliance of Section 134 (5) of the Companies Act, 2013, the Directors of your Company confirm:

- that in the preparation of annual accounts, the applicable accounting standards have been followed and there are no material departures;

- that such accounting policies have been selected and applied 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 as on March 31,2015 and of the Profit of the Company for the year ended on that date.

- 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;

- that the annual accounts have been prepared on a going concern basis.

- that internal financial controls have been laid down to be followed by the company and that such internal financial controls are adequate and were operating effectively.

- that proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Dividend

Your Directors recommend a dividend of Rs. 6.25/- per share (125%) (Previous year Rs. 5/- per share (100%) on 1,30,05,874 (1,26,54,874) equity shares of Rs. 5/- each fully paid for the year ended 31.03.2015, to be paid subject to approval by the members at the ensuing Annual General Meeting.

During the year, the unclaimed dividend pertaining to the financial year ending 2006-07 was transferred to the Investor Education and Protection Fund.

Share Capital

The paid up Equity Share Capital as on 31st March, 2014 was Rs. 632.74 lacs. During the year under review the Company has issued 3,51,000 equity shares on preferential basis. As on 31st March, 2015 the Share Capital was Rs. 650.29 lacs. Since the shares on preferential basis were issued in March 2015, funds could not be utilized for the objects for which the same were raised. Hence, it is parked temporarily with the Bankers and in market securities.

No shares with differential voting rights, stock option or sweat equity shares were issued by the Company during the year under review.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

Conservation of energy:

The Company has two sources of energy i.e. Natural Gas is being supplied by GAIL & Sabarmati Gas Ltd., for running the Kilns. The pricing and quantity of the gas is based on the availability, international pricing and contract with the company. For energy conservation company has installed fuel efficient burners to control gas consumption and every technological development is being taken care of.

Second source of energy for running machineries are electricity supplied by local Discom. To compensate within the energy consumption by way of electricity, the Company has set up Wind Turbines of 11.825 MW and 1.00 MW Solar Plant which will generate about 90 % of the requirements and it will offset against monthly consumption of energy bill.

The Company has spent Rs. 36.08 crores for setting up 4.00 MW wind turbines and 1.00 MW solar energy during the year.

The information on technology absorption and foreign exchange earnings and outgo stipulated under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as a separate Annexure.

Exchequer

The Company has contributed Rs. 121.34 Crores to the exchequer by way of excise duty, customs duty, service tax, income tax, VAT, sales tax and other fiscal levies.

Deposits

The Company has discontinued its Fixed Deposit Scheme from the Financial Year 2012-13. Despite efforts to identify and repay the unclaimed deposits, the total amount of Fixed Deposits matured and remaining unclaimed with the Company as on 31st March, 2015 was Rs. 2.74 lacs.

The Company has not accepted fixed deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.

Finance

During the year under review, the Company repaid loans of Rs. 675.02 lacs to Financial Institutions and Banks.

Managerial Remuneration and Employees

Details required pursuant to Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are enclosed as a separate Annexure.

Details of employees required pursuant to Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as a separate Annexure.

Directors

Members at the Annual General Meeting held on 22-08-2014 have appointed Shri Ashok Chhajed, Shri Sajan Kumar Pasari, Shri Govindbhai P. Patel and Shri Lalitkumar Bohania as Independent Directors of the Company to hold office for five consecutive years for a term up to 31st March, 2019 (they will not retire by rotation). Members have also appointed Smt. Deepshikha Khaitan as Director and Shri Atul Sanghvi as Director & Executive Director and Shri Vikram Somany as Chairman and Managing Director.

Dr. K.N. Maiti is due to retire at the end of the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Brief resume of Dr. K.N. Maiti as required as per clause 49 of the Listing Agreement executed with the Stock Exchanges is provided in the notice convening the Annual General Meeting of the Company.

All independent directors have given declarations that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013. The company keeps informed independent directors about changes in the Companies Act, 2013 and rules from time to time and their role, duties and responsibilities.

Auditors

H.V. Vasa & Co., Statutory Auditors of the company retire at the end of forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends their re-appointment at the ensuing Annual General Meeting.

Cost Auditors

The Company has appointed K.G. Goyal & Co., as Cost Auditors for conducting cost audit for the year.

Secretarial Audit

Secretarial Audit Report given by Umesh Parikh and Associates, Company Secretaries in practice is annexed with this report.

Extract of Annual Return

The details forming part of the extract of annual return in Form No.MGT-9 is annexed herewith as a separate Annexure.

Particulars of loans, guarantees or investments under section 186

The loans if any, made by the Company are within the limits prescribed u/s 186 of the Companies Act, 2013 and no guarantee or security is provided by the Company.

Details of Investments covered u/s 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

Particulars of contracts or arrangements with related parties

Particulars of contracts or arrangements with related Parties as per Section 188(1) of Companies Act, 2013, including arm''s length transactions are enclosed as a separate Annexure in Form No.AOC-2 .

There are no materially significant related Party transactions made by the Company with Directors, Key Managerial Personnel or other designated Persons which may have a Potential Conflict with the interest of the Company at large. All related party transactions were placed before the Audit Committee and also the Board for

approval. The Policy on related Party transactions as approved by the Board is uploaded on the Company''s website.

Insurance

Your Company has adequately insured all its properties including Plant and Machinery, Buildings and Stock.

Industrial Relations

Your Company''s relations with its employees remained cordial throughout the year. The Directors wish to place on record their deep appreciation for the services rendered by workers, staff members and executives of the Company.

Your Company has taken adequate steps for the health and safety of its employees, as required under the Gujarat Factories Rules, 1963. The Company has not received any complaint under The Sexual Harassment of women at Workplace (prevention, prohibition and redressal) Act, 2013 and the Company has organized three workshops under the said Act.

Appreciation

Your Directors thank the Financial Institutions and Bankers for extending timely assistance in meeting the financial requirements of the Company. They would also like to place on record their gratitude for the co-operation and assistance given by State Bank of India, Kotak Mahindra Bank Ltd, Yes Bank Ltd and various departments of both State and Central Governments.

For and on behalf of the Board of Directors,

Ahmedabad. Vikram Somany 23rd April, 2015 Chairman and Managing Director


Mar 31, 2014

The Directors have pleasure in submitting the Annual Report together with the Statement of Accounts of your Company for the year ended 31E March, 2014.

Performance

The summary of your Company''s financial performance is given below;:

(? in lacs)

Year ended Year ended March 31,2014 March 31,2013

Profit before Depreciation and Taxes & Exceptional item 9494.65 7723.22

Deducting There From Depreciation of 1224.70 942.23

Profit before Tax 8239.95 6780.99

Deducting there from taxes of:

- Current Year 2651.35 1900.40

- Deferred Tax 398.04 260.00

Profit after Tax 5190.56 4620.59

Add: Balance brought forward from previous year 1900.00 1400.00

Amount available lo r Appropriations 7090.56 5020.59

The proposed appropriations are:

1. Proposed Dividend 632.74 506.19

2. Tax on Proposed Dividend 111.45 82.12

3. General Reserve 3346.37 3532.26

4. Balance carried forward 3000.00 1900.00

Total 7090.56 6020.59

The Directors are pleased to inform you that your Company has continued to grow substantially in 2013-14 due to its distribution strength, product qualify, brand equity and after-sales service.

The well-entrenched distribution network of your Company is being supplemented with an array of CERA Style Studios and CERA Style Gallenes in different towns, which showcase your Company''s products in an exclusive ambience.

Sanitary ware Unit

your Company has expanded its annual production capacity to 2.7 Mn. Pes. for meeting the increased demand of its products. During the year the plant had run at its optimum capacity. Further, by adding balancing equipments, the Company aims to achieve production of 3.0 Mn. Pes. In the current year.

Faucet ware Unit

The new ranges and designs of Faucets have been well accepted by the market. The Company could attain its full capacity by Ihe year end. Owing to this success, the Company now plans lo lurther expand its capacity threefold in a phased manner.

Bathware Unit

Vour Company has added other products like kitchen sinks and mirrors to its range besides products like shower cubicles, shower panels, steam cubicles and whirlpools.

Vour Company Continues lo import and market high-end wellness range under the brand name CERA.

Tiles Unit

Your Company has successfully launched CERA tiles in select markets. Your Company will now be launching ties in more markets. The exclusive tie up with manufacturers of tiles has helped your Company maintain its quality standards which distinguishes CERA tiles.

Power Unit

The non-convention a! wind power has produced 62.65,830 KWH against 52,74,331 KWH in the previous year. As a part of Company''s green initiative and to reduce power cost. Company''s two Wind- Turbines of 2.850 MW capacity had been commissioned during the yearat Disl. SurendranagarS Dist. Jamnagar in Gujarat Thereby the installed capacity dI wind power unit of the Company now slands at7.625 MW.

Further Company has finalized the root top Solar Power Plant of 0.500 MW for captive use at Kadi during the current year.

Corporate Governance and Management Discussion and Analysis

Pursuant lo Clause 49 of the Listing Agreement with the Stock Exchanges. Report on Corporate Governance along with the Auditors'' statement on its compliance and Management discussion and Analysis have been included in this Annual Report as a separate Annexure.

Corporate Social Responsibility

A report on CSR has been included initias is Annual Report as a separate Annexure.

Director''s Responsibility Statement

In compliance of Section 217 (2AA)of the Companies Act. 1956, the Directors of your Company confirm:

-that in the preparation of annual accounts, (he applicable accounting standards have been followed and there are no material departures.

-that such accounting policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent So as to give a true and fair view of the slate of affairs of the Company as on March 31, 2014 and of the Profit of the Company tor the year ended on that date.

v that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Ac!, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

v that the annual accounts have been prepared on a going concern basis.

Dividend

Your Directors recommend a dividend of ? 5/- per share (100%) (Previous year 7. AS- per share (30%} on 1.26.54,874 equity shares of 7 5/- each fully paid for the year ended 31.D3.2014, to be paid subject to approval by the members at the ensuing Annual General Meeting.

Energy Conservation, Technology Absorption, R&D Cell and Foreign Exchange Earnings & Outgo

The details required under the Companies (Disclosure of particulars in the Report of Board of Directors) Rules. 198B are annexed to this report.

Exchequer

The Company has contributed ? 112.98 Crores lo the exchequer by way ol excise duly, customs duly, service tax, income tax, VAT, sales lax and other fiscal levies.

Fixed Deposits

Fixed deposits from the Public outstanding as on 31.03.2014 was ? 2.74 Lacs. There were 6 Fixed Deposit holders with ? 2.74 Lacs of unclaimed /unrenewed deposits as on 31.03.2014.

Finance

During the year under review, the Company repaid loans of

? 610.00 Lacs to Financial Institutions and Banks.

Employees

Information as per sub-section (2 A) of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 forming part of the Directors" Report for the year ended 31s1 March, 2014 is annexed.

Directors

Shri Shree N a ray an Mohata has resigned as Director w.e.f. 11.07.2013. The term Dt Shfi Mahendra Kumar Bhandari, Director - Technical has come to an end on 31.03.2014 as per the agreement with him. Your Directors wish lo place on record their appreciation for the contributions made by them to the Company.

Snn Ltit Kuna'' Bonama has cean appom''ed as an additional Director w.e.l. 11.07.2013, Smt. Deepshikha Khaitan has been appointed as an additional Director w.e.f. 29.03.2014 and Shri Alul Sanghvi has been appointed as additional Director and Executive Director w.e.f. 01.04.2014.

Shri Ashok Chhajed and Dr. K.N. Maiti are due to retire at the end of the ensuing Annual General Meeting and being eligible, offered themselves for re-appointments. Brief resumes of directors, as required as per clause 49 of the Listing Agreement executed with the Stock Exchanges are provided in the Notice convening the Annual General Meeting of the Company.

Auditors

H.V. Vasa ft Co., Statutory Auditors of the Company retire at the end of forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends their reappointment at the ensuing Annual General Meeting.

Cost Auditors

The Company has appointed K. G. Goyal &. Co., as Cost Auditors for conducting cost audit for the year.

Insurance

Your Company has adequately insured all its properties including Plant and Machinery, Buildings and Stocks.

industrial Relations

Your Company''s relations with its employees remained cordial throughout the year. The Directors wish to place on record their deep appreciation for the services rendered by workers, staff members and executives of (he Company.

Your Company has taken adequate steps for the health and safety of its employees, as required under the Gujarat Factories Rules, 1963.

Appreciation

Your Directors thank the Financial Institutions and Bankers for extending timely assistance in meeting the financial requirements of (he Company. They would also like to place on record their gratitude for the co-operation and assistance given by State Bank of India, Yes Bank Ltd. and various departments of both Stale and Central Governments.

For and on behalf of the Board of Directors,



Ahmedabad. Vikram Somany

25"1 April, 2014 Chairman and Managing Director


Mar 31, 2013

To The Members, The Directors have pleasure in submitting the Annual Report together with the Statement of Accounts of your Company for the year ended 31st March, 2013. Performance The summary of your Company's financial performance is given below: (Rs. in lacs) Year ended Year ended March 31, 2013 March 31, 2012 Profit before Depreciation and Taxes & Exceptional item 7723.22 5620.60 Deducting there from Depreciation of 942.23 770.52 Profit before Tax 6780.99 4850.08 Deducting there from taxes of: - Current Tax 1900.40 1670.00 - Deferred Tax 260.00 (23.57) Profit after Tax 4620.59 3203.65 Add: Balance brought forward from previous year 1400.00 1100.00 Amount available for Appropriations 6020.59 4303.65 The proposed appropriations are: 1. Proposed Dividend 506.19 379.64 2. Tax on Proposed Dividend 82.12 61.59 3. General Reserve 3532.28 2462.42 4. Balance carried forward 1900.00 1400.00 Total 6020.59 4303.65 Your Company has continued to grow substantially due to the concerted marketing efforts in brand building and distribution initiatives. The well-entrenched distribution network of your Company is being supplemented with an array of CERA Style Galleries in different towns, which showcase your Company's products in an exclusive ambience. Sanitaryware Unit Your Company has expanded its production capacity, to meet the increasing demand. The production capacity has increased to 2.7 million pieces per annum from 2.0 million pieces on completion of expansion programme. Faucetware Unit The plant is now producing high end single lever series also. Installation of automatic CNC machines and automatic polishing machine has facilitated the plant to produce more such premium ranges. Bathware Unit Your Company continues to import and market, under the brand name CERA, wellness range, consisting of products like shower cubicles, shower panels, steam cubicles, and whirlpools in addition to high end sanitaryware. Your Company has also added other products like kitchen sinks, mirrors and sensor products to its range under Bathware. Power Unit The non-conventional wind power generation in the year was 52,74,331 kWH against 52,55,614 kWH in the previous year. The installed capacity of wind power unit of the Company is 4.975 M.W. Corporate Governance and Management discussion and Analysis Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Report on Corporate Governance along with the Auditors' statement on its compliance and Management discussion and Analysis have been included in this Annual Report as a separate annexure. Corporate Social Responsibility A report on CSR has been included in this Annual Report as a separate annexure. Directors' Responsibility Statement In compliance of Section 217 (2AA) of the Companies Act, 1956, the Directors of your Company confirm: ? that in the preparation of annual accounts, the applicable accounting standards have been followed and there are no material departures; ? that such accounting policies have been selected and applied 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 as at March 31, 2013 and of the Profit of the Company for the year ended on that date; ? 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; ? that the annual accounts have been prepared on a going concern basis. Dividend Your Directors recommend a dividend of Rs. 4/- per share (80%) (Previous year Rs. 3/- per share (60%) on 1,26,54,874 equity shares of Rs. 5/- each fully paid for the year ended 31.03.2013, to be paid subject to approval by the members at the ensuing Annual General Meeting. Energy Conservation, Technology Absorption, R & D Cell and Foreign Exchange Earnings & Outgo The details required under the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 are annexed to this report. Exchequer The Company has contributed Rs. 96.29 Crores to the exchequer by way of excise duty, customs duty, service Tax, income tax, VAT, sales tax, and other fiscal levies. Fixed Deposit Fixed deposits from the Public outstanding as on 31.03.2013 was Rs. 2.74 lacs. There were 6 Fixed Deposit holders with Rs. 2.74 lacs of unclaimed / unrenewed deposits as on 31.03.2013. The Company, on the basis of the working results during the year under review can accept deposits from the Public as well as from the shareholders to the extent of Rs. 62.83 cr. Finance During the year under review, the Company repaid loans of Rs. 607.63 lacs to Financial Institutions and Banks. Employees Information as per Sub-section (2A) of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 forming part of the Directors' Report for the year ended 31st March, 2013 is annexed. Directors Your Directors inform with deep sorrow the sudden and sad demise of Shri Vidush Somany, Executive Director of the Company on 25.08.2012. He was one of the promoters of the Company. Your Directors express their gratitude for the invaluable services rendered by him to the Company and also note that due to his enormous efforts in last few years the Company has reached to its present level. The Faucetsware plant is a tribute to Shri Vidush Somany's ambitious and visionary plans. His passion to steer the Company to great heights saw the capacity expansion of the Sanitaryware plant to 2.7 million pieces per annum. His constant quest to make the brand modern and youthful reflected in the new logo and thus charted new paths of growth for the brand. As a peoples person he has touched a million hearts, be it dealers, architects, employees or financial analysts. Shri Mahendra Kumar Bhandari and Shri Govindbhai P. Patel are due to retire at the end of ensuing Annual General Meeting and, being eligible, offered themselves for re-appointment. Brief resumes of Shri Mahendra Kumar Bhandari and Shri Govindbhai P. Patel as required under clause-49 of the Listing Agreement executed with the Stock Exchanges are provided in the notice convening the Annual General Meeting of the Company. Auditors M/s H.V. Vasa & Co., Statutory Auditors of the company retire at the end of forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends their re-appointment at the ensuing Annual General Meeting. Cost Auditors The Company has appointed M/s K.G.Goyal & Co., as Cost Auditors for conducting cost audit for the year. Insurance Your Company has adequately insured all its properties including Plant and Machinery, Buildings and Stocks. Industrial Relations Your Company's relations with its employees remained cordial throughout the year. The Directors wish to place on record their deep appreciation for the services rendered by workers, staff members and executives of the Company. Your Company has taken adequate steps for the health and safety of its employees, as required under the Gujarat Factories Rules, 1963. Appreciation Your Directors thank the Financial Institutions and Bankers for extending timely assistance in meeting the financial requirements of the Company. They would also like to place on record their gratitude for the co-operation and assistance given by State Bank of India, ICICI Bank Limited, Yes Bank Ltd and various departments of both State and Central Governments. For and on behalf of the Board of Directors, Ahmedabad. Vikram Somany 25th April, 2013 Chairman and Managing Director


Mar 31, 2012

The Directors have pleasure in submitting the Annual Report together with the Statement of Accounts of your Company for the year ended 31st March, 2012.

Performance

The summary of your Company's financial performance is given below:

(Rs. in lacs)

Year ended Year ended March 31, 2012 March 31, 2011

Profit before Depreciation and Taxes & Exceptional item 5620.60 4805.18

Deducting there from Depreciation of 770.52 653.03

Profit before Tax 4850.08 4152.15

Deducting there from taxes of:

- Current Tax 1670.00 1432.03

- Deferred Tax (23.57) 66.04

Profit after Tax 3203.65 2654.08

Add: Balance brought forward from previous year 1100.00 900.00

Amount available for Appropriations 4303.65 3554.08

The proposed appropriations are:

1. Proposed Dividend 379.64 316.37

2. Tax on Proposed Dividend 61.59 51.32

3. General Reserve 2462.42 2086.39

4. Balance carried forward 1400.00 1100.00

Total 4303.65 3554.08

Your Company has continued to grow substantially due to brand building and distribution initiatives.

The well-entrenched distribution network of your Company is getting a boost by opening of CERA Bath Galleries in different towns.

Sanitaryware Unit

Your Company is expanding its production capacity, to meet the increasing demand. The production capacity will go up to 2.7 million pieces per annum from 2.0 million pieces on completion of expansion programme, which is under progress.

Faucetware Unit

Your Company's Faucetware plant has already gone on -stream in September 2010. After successful production of half-turn series and quarter-turn series, the plant is now producing high end single lever series. Automatic CNC machines and automatic polishing machine were installed, which facilitates the plant to produce more premium ranges.

Bathware Unit

Your Company continues to import and market, under the brand name CERA, wellness range, consisting of products like shower cubicles, shower panels, steam cubicles in addition to high end sanitaryware.

Your Company has also added other products like kitchen sinks, mirrors and sensor products to its range under Bathware.

Power Unit

The non-conventional wind power generation remained at 52,55,614 KWH against 43,81,473 KWH in the previous year. The installed capacity of wind power unit of the company is 4.975 M.W.

Corporate Governance and Management discussion and Analysis

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Report on Corporate Governance along with the Auditors' statement on its compliance and Management discussion and Analysis have been included in this Annual Report as a separate section.

Directors' Responsibility Statement

In compliance of Section 217 (2AA) of the Companies Act, 1956, the Directors of your Company confirm:

- that in the preparation of annual accounts, the applicable accounting standards have been followed and there are no material departures;

- that such accounting policies have been selected and applied 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 as at March 31, 2012 and of the Profit of the Company for the year ended on that date.

- 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;

- that the annual accounts have been prepared on a going concern basis.

Dividend

Your Directors recommend a dividend of Rs. 3.00 per share (60%) (Previous year Rs. 2.50 per share (50%)) on 1,26,54,874 equity shares of Rs. 5/- each fully paid for the year ended 31.03.2012, to be paid subject to approval by the members at the ensuing Annual General Meeting.

Energy Conservation, Technology Absorption, R & D Cell and Foreign Exchange Earnings & Outgo

The details required under the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 are annexed to this report.

Exchequer

The Company has contributed Rs. 64.92 Crores to the exchequer by way of excise duty, customs duty, income tax, VAT, sales tax, and other fiscal levies.

Fixed Deposit

Fixed deposits from the Public outstanding as on 31.03.2012 was Rs. 3.52 lacs. There were 06 Fixed Deposit holders with Rs. 2.74 Lacs of unclaimed / unrenewed deposits as on 31.03.2012. The Company, on the basis of the working results during the year under review can accept deposits from the Public as well as from the shareholders to the extent of Rs. 4871.33 lacs.

Finance

During the year under review, the Company repaid loans of Rs. 692.00 Lacs to Financial Institutions and Banks.

Employees

Information as per sub-section (2A) of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 forming part of the Directors' Report for the year ended 31st March, 2012 is annexed.

Employees Stock Option Scheme

Pursuant to the authority of the members granted at the Extra - Ordinary General Meeting of your Company held on 6th January, 2007, the company has framed the Employees Stock Option scheme 2007 (ESOS - 2007).

No eligible employee exercised options during the year. 32 options were lapsed due to non-exercise by employees. The exercise period of all options have expired on 09.07.2011 and no granted options are outstanding after that date under Employees Stock Option Scheme 2007 (ESOS 2007).

Directors

Dr. K.N. Maiti and Shri Sajan Kumar Pasari are due to retire at the end of ensuing Annual General Meeting and being eligible offered themselves for re-appointment.

Brief resumes of Dr. K.N. Maiti and Shri Sajan Kumar Pasari, Directors as required under clause 49 of the Listing Agreement executed with the Stock Exchanges are provided in the notice convening the Annual General Meeting of the Company.

Auditors

M/s H.V Vasa & Co., Statutory Auditors of the company retire at the end of forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends their re-appointment at the ensuing Annual General Meeting.

Insurance

The Company has adequately insured all its properties including Plant and Machinery, Buildings and Stocks.

Industrial Relations

The Company's relations with its employees remained cordial throughout the year. The directors wish to place on record their deep appreciation for the services rendered by workers, staff members and executives of the Company.

The Company has taken adequate steps for the health and safety of its employees, as required under the Gujarat Factories Rules, 1963.

Appreciation

Your Directors thank the Financial Institutions and Bankers for extending timely assistance in meeting the financial requirements of the Company. They would also like to place on record their gratitude for the co-operation and assistance given by State Bank of India, ICICI Bank Ltd, Yes Bank Ltd and various departments of both State and Central Governments.

For and on behalf of the Board of Directors,

Ahmedabad. Vikram Somany

11th July 2012 Chairman and Managing Director

 
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