Directors Report of Cera Sanitaryware Ltd.
Mar 31, 2023
The Directors have pleasure in submitting the 25th Annual Report together with the Audited financial statements of your Company for the year ended 31st March, 2023.
The summary of your Company''s financial performance on standalone basis is given below:
|
('' in Lakhs) |
||
|
Standalone |
Yearended 31st March, 2023 |
Yearended 31st March, 2022 |
|
Revenue from Operations |
1,79,619.15 |
1,44,175.57 |
|
Profit (EBIDTA) before Interest, Depreciation, Taxes & Exceptional Item |
32,256.88 |
24,402.76 |
|
Interest |
540.07 |
458.71 |
|
Depreciation |
3,044.24 |
3,043.00 |
|
Profit before taxes and Exceptional Item |
28,672.57 |
20,901.05 |
|
Exceptional Item |
(500.00) |
(573.80) |
|
Profit before tax |
28,172.57 |
20,327.25 |
|
Tax Expense: |
||
|
- Current Year |
7,017.39 |
5,197.72 |
|
- Deferred Tax |
189.60 |
193.55 |
|
Profit for the year |
20,965.58 |
14,935.98 |
|
The summary of your Company''s financial performance on consolidated basis is given below: |
||
|
('' in Lakhs) |
||
|
Consolidated |
Year ended 31st March, 2023 |
Year ended 31st March, 2022 |
|
Revenue from Operations |
1,80,350.24 |
1,44,583.00 |
|
Profit (EBIDTA) before Interest, Depreciation, Taxes & Exceptional Item |
32,854.09 |
25,238.00 |
|
Interest |
604.83 |
528.15 |
|
Depreciation |
3,260.74 |
3,240.74 |
|
Profit before taxes and Exceptional Item |
28,988.52 |
21,469.11 |
|
Exceptional Item |
(500.00) |
(573.80) |
|
Profit before tax |
28,488.52 |
20,895.31 |
|
Tax Expense : |
||
|
- Current Year |
7,164.75 |
5,391.30 |
|
- Deferred Tax |
218.68 |
209.53 |
|
Profit for the year |
21,105.09 |
15,294.48 |
|
Add: Share of Profit / (Loss) from Associate |
- |
0.76 |
|
Profit for the Year |
21,105.09 |
15,295.24 |
The Company has transferred a sum of '' 4383.93 Lakhs to General Reserve in the current year (previous year '' 3439.58 Lakhs).
Highlights / Performance of the Company
T urnover (Net of GST) of the Company for the year increased by 24.68% ('' 1,79,324.33 Lakhs in FY 2022-23 as compared to '' 1,43,826.26 Lakhs in FY 2021-22).
EBITDA for the year increased by 32.19% ('' 32,256.88 Lakhs in FY 2022-23 as compared to '' 24,402.76 Lakhs in FY 2021-22).
Profit after Tax for the year increased by 40.37% ('' 20,965.58 Lakhs in FY 2022-23 as compared to '' 14,935.98 Lakhs in FY 2021-22).
During the financial year 2018-19, the Company acquired share capital worth '' 806 Lakhs in M/s Milo Tile LLP (âMiloâ) which was a vendor of tiles for the company. During financial year 2022-23 Milo has been unable to maintain product quality parameters which has forced the Company to discontinue procuring tiles from Milo, and raise claims based on inferior quality products supplied by Milo. The Company has served Legal notices on Milo and the other LLP partners for violation of certain terms of the Investment Agreement.
Considering the above as well as other available information, as a matter of abundant caution, the management has decided to provide for an Impairment Loss of '' 500 Lakhs in the books of accounts which has been disclosed as an âExceptional Itemâ in the financial statements. However, the Company is taking all necessary steps for recovery of the same.
Your Directors recommended a dividend of '' 50/- per share (1000%) [Previous year Dividend of '' 20/- per share (400%) and Special dividend of '' 15/- per share ( 300%)] on 1,30,05,874 equity shares of '' 5/- each fully paid for the year ended 31.03.2023, to be paid subject to the approval of the members at the ensuing Annual General Meeting.
Pursuant to the requirements of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulations''), the Dividend Distribution Policy of the Company is available on the Company''s website at https://www.cera-india.com/policy-and-statutorv-documents/dividend-distribution-policv
During the year, the unclaimed dividend pertaining to the financial year ending 2014-15 were transferred to the Investor Education and Protection Fund.
Sanitaryware Unit
Your Company has increased its production volume based on the product demand generated from the market, utilizing all its available resources.
Active collaboration of workmen and staff in new initiatives on safety, quality, delivery, and cost have resulted into improved product yield and on time product delivery.
Your Company is following best manufacturing practices for building the culture of Continuous Improvement. The major activities that include waste elimination, KAIZEN, dedicated projects on cost saving and sustainability, has improved the utilization of deployed resources.
Your Company is committed towards developing new and innovative product design including one-piece EWC, high end and rimless Wall Hung EWC, Lustre series products etc, through its dedicated product NPD team.
Institutionalization of various knowledge sharing forums, review mechanisms, process controls and standard operating procedures has helped in achieving repeatability and reproductibility of new SKUs.
Workmen are actively participating in activities like sports day, counselling, reward and recognition and various continuous improvement activities, generating positive vibes and trust building at shop floor.
Your Company will continue to deliver the high-quality products to its valued customer as per demand, making optimum utilization of the resources.
Your Company has witnessed growth in terms of production and sales volume, which lead the company to reach to the optimum level of achievements. Company shall continue achieving the same through various debottlenecking projects, SOP compliances and automation of the processes.
Your Company expects even higher growth in the coming times in its Faucets business. With this in view, company has launched new colour faucet designs in line with the changing customer preferences and market need. A total of 330 new products were launched during the year.
Company will also emphasis the development and sale of WATER saving products which are very crucial for the sustenance of environment and preservation of ecosystem. There are close to 48% of products offering in the portfolio which can also be offered as water saving products.
Your Company continued launches of new products and designs. New technology-based products like Smart electronic toilet, Tankless Wall Hung closets and One Pc EWC''s with Vibe sense touchless flushing technology and modern design table top basins along with wall hung closets for retail spaces were developed and launched.
Senator was re-introduced with latest collection of premium bathroom suites, bringing together sophisticated designs and quality sanitaryware products to create truly artistic spaces.
Lustre by Cera was yet another brilliant design innovation that your company is proud to have. A range of colour faucets, sanitaryware, showers and bath accessories designed to splash character and charisma into the modern Indian bathroom space.
Highest Share of voice in Media
Your company CERA used high impact media strategy to increase the brand reach and consumer exposure. A combination of GEC (General Entertainment Channels) - Impact properties and news program used to expose the new TV Campaign âThis is your space, Play it your wayâ on television to consumers. Campaign started in Oct 2022 end where we advertised our new Television Commercial Advertisement featuring brand ambassadors, style icons - Kiara Advani and Vijay Deverakonda. Our media mix had high frequency
Hindi / English news channels. For HSM (Hindi Speaking Market) market, your company took âKaun Banega Crorepatiâ the biggest show of Indian Television as associate sponsor, in addition CERA also sponsored popular show like âIndia Idolâ. For Non HSM market, Big Boss Season-6 Telugu version was sponsored for Telangana and Andhra Pradesh market, Big Boss Season - 9 Kannada as special partner sponsorship for Karnataka market, and in last quarter your company advertised heavily in News channels - Hindi, English and Regional languages.
India''s youth spend lot of time on social media, so to reach out to our young consumers your company also took lot of engagement initiatives such as social media topical / product post and consumer participation fun contest. Other initiatives were also taken to increase brand recall and search i.e. Google display ads, remarketing and sustenance campaigns, Search engine optimization, Search engine maximization and others.
Trade expansion and development with brand stores
A complete retail expansion program was launched with a view to increase exclusive / non-exclusive brand stores and deliver ultimate consumer experience.
CERA focused to support channel partners by helping them to build brand stores - Cera Style Galleries, Cera Style Hub, Cera Style Centre, Cera Tile Galleries and Cera Tile Centres. This created a strong brand visibility in the market and give our consumers an experience to remember and facilitate better decision making. CERA also revamped the Mumbai & Kadi company owned Style studio, and have plans for Chandigarh, Bengaluru and Morbi going ahead.
Our efforts will remain consistent and true to build our core businesses - Sanitaryware, Faucet and Tiles.
CERA Superstar, a loyalty program launched for retailer / sub dealer to reward the purchases made by Retailers from our CERA''s authorised dealers. The program became super successful and we build the community of 15000 retailers.
Skill development and Training
CERA rigorously conduct training sessions to upskill the knowledge of plumbers and masons. This enables them to get better wages, resolve customer query satisfactorily and install products hassle-free. CERA thrives to bring One Culture One Communication among all employees in the organisation, hence various training sessions organised for workers and employees on One culture.
CERA won the most affiliated awards such as âSuper brand 2023â and was also recognized for Realty INEX Awards 2023 Marketing Campaign of the Year and Brand of the Year.
Your Company made rapid strides in the Tiles segment by launching 500 new designs.
M/s Anjani Tiles Limited ceased to be a subsidiary of the Company effective from 23rd March, 2023 upon receiving the entire consideration as per the terms of MOU and SPA (Share Purchase Agreement) executed in FY 2021-22.
M/s Milo Tile LLP, an associate LLP of the Company, is in to manufacturing of high-end vitrified Tiles. During the current financial year, Milo has been unable to maintain product quality parameters which has forced the Company to discontinue procuring tiles from Milo, and raise claims based on inferior quality products supplied by Milo. The Company has served Legal notices on Milo and the other LLP partners for violation of certain terms of the Investment Agreement.
CERA holds 51% stake in Joint Venture unit i.e. Packcart Packaging LLP for manufacture of corrugated boxes which has now achieved full utilisation of production. The products are now available on a just in time basis, built to the exact specifications for the Company.
The Joint venture for Polymer Products unit i.e. Race Polymer Arts LLP for manufacturing of seat covers and cisterns has reached optimum capacity of its production during the year. Cera holds 51% Stake. The quality products are available and capacity utilization has increased gradually during the year.
As a part of national policy and Green initiative, which was initiated in 1995, Company has energy security and stabilized power cost by generation of electricity through non-conventional sources for captive use through wind and solar.
The current installed capacity of Non-Conventional Energy unit of the Company stands to 10.325 M.W.
The non-conventional Wind and Solar Power has produced 124.82 lakhs KWH for captive use.
Conservation of energy, technology absorption and foreign exchange earnings and outgo:Conservation of energy
The Company has two sources of its main energy, viz. Natural Gas - GAIL and Sabarmati Gas Ltd., for operating its Sanitaryware plant. The pricing of both sources differ, as GAIL sources gas from isolated wells in and around Cera''s manufacturing facility, and is able to contract gas at a lower price over prevailing market pricing. Medium term contracts with these suppliers are renewed on a periodic basis. For energy conservation, the company has installed fuel efficient burners to control gas consumption and in addition to this, every effort is made by the company to adapt any technological developments in energy conservation.
The second energy, viz. electricity, required for running the machineries, is supplied by the local Discom. To compensate the energy consumption by way of electricity, your Company has an installed capacity of Wind Turbines of 8.325 MW and Solar Plants of 2.00 MW which generates about most of the Company''s electricity requirement and this gets offset against monthly consumption of the 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- III.
Cera follows a holistic approach towards Environmental, Social and Governance matters. Cera values the trust reposed by its stakeholders including customers, the communities in which it operates and society at large and has strived hard to protect and preserve their interests.
Environment at Cera
Cera is highly committed to ensuring zero environmental impact due to its operations. The Company stringently adheres to norms governing reduction of emissions, pollution control and other environmental aspects. Some of the broad initiatives undertaken by the Company include:
⢠Installation of a rooftop solar power system (one of the largest in the Kadi region), which has gone a long way in substantially reducing the carbon footprint.
⢠Cera has managed to stabilize power cost by generating electricity through non-conventional sources (wind and solar) for captive use; as of FY23, its total installed non-conventional energy capacity stood at 10.325 MW, which produced 124.82 lakh units. Maximum of its energy needs are met through renewable energy.
⢠In its initiative to conserve biodiversity, the Company has undertaken plantation of over 10,000 plus trees.
⢠By successfully developing a fully functional rainwaterharvesting system, Cera has managed to reduce dependence on ground water usage. Further, by recycling water used for the manufacturing process the Company has reduced the water intensity of its operations.
⢠Cera Faucet ware has upgraded the Zero Liquid discharge plant to meet the requirement of higher norms of the government.
⢠Under the initiative of âWaste Minimization and Waste Utilization'', the Company has been undertaking numerous measures. Some of these measures include recycling of solid and liquid and ZLD (zero liquid discharge), high energy efficient rated machines, compliance to pollution norms and awareness generation among employees etc. Majority of the waste generated in the company''s operations is recycled and the balance is disposed-off safely. The Company has also installed a Effluent Treatment Plant at both of its facilities.
Social dimension at Cera
For the past several years, Cera has been actively involved in various social welfare activities. Over a span of 5 years, Cera has spent more than '' 15 crore for development within Kadi district (a tier 3 developing industrial area) and surrounding areas. Additionally, the Company at regular intervals provides necessary safety and skill up-gradation training to its permanent as well as its contractual employees. The Company has systems in place to ensure no child labour, forced or involuntary labour at its facilities. During the financial year 2022-2023, the Company has spent '' 300.03 Lakhs towards CSR activities mainly in the areas of education, healthcare, rural development, woman empowerment and eradicating hunger. Cera has received appreciation from Ex Dy CM of Gujarat for driving various CSR initiatives like promoting environment, propagating accident-free zones, educational facilities for the society, setting up health care facilities at various hospitals. Government authorities have appreciated CERA on World TB Day to serve the TB Patients; for setting up robust technological set up at ESIC hospitals & Bhagyoday Private hospital. Cera has been involved with Collector and Commissioners for excavating ponds at nearby villages.
Adhering to the best Corporate Governance practices has been a strong endeavor of the Company since its inception. The organization strongly believes that there is a direct association between good corporate governance practices and stakeholder value enhancement. To ensure protection of interests of all stakeholders of the Company, Cera has adopted various strict governance related policies to the best governance practices. Its policy relating to ethics, bribery and corruption serves as the guiding philosophy for its employees. The Company also has a whistle blower policy in place, which provides a platform to all employees, vendors and customers to report any suspected fraud or error or confirmed incident of fraud / misconduct. Through prudent strategies the Company has optimized asset utilization and preserved the collective funds at its disposal by avoiding unrelated diversification or over-ambitious expansion. By ensuring fair and ethical dealings with all stakeholders, the Company has a robust track record of Corporate Governance practices.
Going ahead, the Company aspires to continue deepening its focus towards the environmental social governance (ESG) aspect in the organization and create a sustainable future for all its stakeholders.
The Company has two Subsidiary LLPs namely Packcart Packaging LLP & Race Polymer Arts LLP.
There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 (âActâ). Further there has been no material change in the nature of business of the subsidiary. The Company does not have any material subsidiary. The Policy on Material Subsidiary framed by the Board of Directors of the Company is available on Company''s website at the link https:// www.cera-india.com/corporate/policv-for-determining-materialsubsidiary
Those Shareholders who are interested in obtaining a copy of the audited annual financial statements of the subsidiary may write to the Company. The Audited financial statements of subsidiaries are available on the website of the Company www.cera-india.com
Pursuant to the provisions of Section 129, 134 and 136 of the Companies Act, 2013 with rules made thereunder and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has prepared consolidated financial statements of the Company and salient features of the financial statement of the subsidiaries is set out in the prescribed form AOC-1 forming part of this Annual Report.
Pursuant to the Resolution passed at the Board Meeting held on 5th August, 2021 the Company had decided to divest the Company''s entire stake in Anjani Tiles Limited, a subsidiary company and accordingly a Memorandum of Understanding (MOU) was executed on 17th August, 2021 by and amongst Cera Sanitaryware Limited (Cera), Anjani Vishnu Holdings Ltd (AVHL) (Joint Venture Partner and Acquirer Company) and Anjani Tiles Limited (ATL) (Subsidiary Company) for a total consideration of '' 2,869.20 Lakhs.
The Company, AVHL and ATL also entered in to Share Purchase Agreement (SPA) dated 26th August, 2021 pursuant to which the Company agreed to sell all the Equity and Preference Shares held by it in ATL to AVHL.
As on 31st March, 2022, the Company''s shareholdings in Equity and Preference shares in ATL were presented as Non-current Assets classified as Held for Sale as per Indian Accounting Standard - 105 - âNon-current Assets Held for Sale and Discontinued Operationsâ.
The consequential impairment loss of '' 573.80 Lakhs due to above arrangements was recognised in the Statement of Profit and Loss as Exceptional Item in the financial year ended 31st March, 2022.
As on 31st March, 2023, the total consideration of '' 2,869.20 Lakhs has been fully realised ('' 643 Lakhs in financial year 2021-22 and the balance consideration of '' 2,226.20 Lakhs in financial year 2022-23).
Accordingly, Anjani Tiles Limited has ceased to be a subsidiary of the Company. Apart from this, no other company has become or ceased to be subsidiaries, joint ventures or associate companies during the financial year 2022-23.
Particulars of contracts or arrangements with related parties
All transactions entered 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, the details of which are included in the notes forming part of the financial statements.
There were no material related party transactions entered during the year. Accordingly, information in form AOC - 2 is not annexed. Further no materially significant related Party transactions were made by the Company with Directors, Key Managerial Personnels 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 Company has framed a policy on RPTs for the purpose of identification, approval and monitoring of such transactions. The policy on Related Party Transactions is hosted on the Company''s website at https://www.cera-india.com/policy-and-statutory-documents/related-party-transaction
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.
CERA believes that real progress occurs when privileges are balanced with the responsibilities towards society. CERA has always laid emphasis on progress with a social commitment. CERA believe strongly in core values of empowerment and betterment of not only their employees but also of society/ communities. Following this principle, Late Shri Vidush Somany, our Company''s Executive Director had laid the foundation of a comprehensive approach towards promoting and facilitating various aspects of surrounding communities. CERA CSR Policy focuses on six thrust areas in which CSR activities are planned - a) eradicating hunger and malnutrition b) promoting healthcare including preventive health care c) promoting education, including special education d) employment enhancing vocational skills among women e) empowering rural women f) Rural Development. Following this principle the Company had laid the foundation of a comprehensive approach towards promoting and facilitating various aspects of our surrounding communities.
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 Board has approved a policy for Corporate Social Responsibility and same has been uploaded on the website i.e. https://www.cera-india.com/policy-and-statutory-documents/corporate-social-responsibility-policy
A brief Report on Corporate Social Responsibility (CSR) Activities alongwith Annexure as per Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as a separate Annexure-IV and separate activity wise CSR Report has been annexed as Annexure -II to this report..
During the year under review and upon the recommendation of Nomination and Remuneration Committee Shri Ravi Bhamidipaty has been appointed as an Independent Directors of the Company w.e.f. 4th August, 2022 for the term of 3 years and subsequently his appointment was approved by the members of the Company through Postal ballot process on 21st October, 2022. Accordingly, the Board is comprising of five Independent Directors namely, Shri Sajan Kumar Pasari, Shri Lalit Kumar Bohania, Shri Surendra Singh Baid, Ms. Akriti Jain and Shri Ravi Bhamidipaty.
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 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and there has been no change in the circumstances which may affect their status as Independent director during the year under review and have also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence. The Company keeps informed independent directors about changes in the Companies Act, 2013 and rules and other related laws from time to time and their role, duties and responsibilities. Term of Ms. Akriti Jain an Independent Director will expire on 31st March, 2024, necessary resolution proposing her reappointment as Independent Director for further term of five years is proposed for the approval by the members at the ensuing Annual General meeting of the Company. The Board recommends her appointment for approval of the members of the Company.
The Board of Directors have appointed Shri Anupam Gupta as an Executive Director (Technical) of the Company for period of 3 years w.e.f. 15th October, 2021 and Shri Ayush Bagla as an Executive Director for a period of three years w.e.f. 14th May, 2022 and Shri Vikram Somany as Chairman and Managing Director for a period of five years w.e.f. 1st July, 2022 and simultaneously the members at their 24th Annual General Meeting held on 30th June, 2022 approved their appointments/re-appointments.
Shri Ayush Bagla, is liable to retire at the ensuing Annual General Meeting and being eligible, offers himself for reappointment.
The resolutions proposing the reappointment of the Directors are set out in the notice convening Annual General Meeting for approval of members. The Board recommends for approval of the same.
Brief resume of the director who are proposed to be reappointed at the ensuring Annual General meeting, as required as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard is provided in the notice convening this Annual General Meeting of the Company.
Shri Rajesh B. Shah, Chief Financial Officer of the Company who had attained the age of superannuation, has retired from the services w.e.f. close of working hours of 31st March, 2023. The Board of Directors have appointed Shri Vikas Kothari (who was working as Deputy Chief Financial Officer), as Chief Financial Officer of the Company w.e.f. 1st April, 2023.
Number of Meetings of the Board
The Board of Directors, during the financial year 2022-23 duly met 4 times on 10th May, 2022, 4th August, 2022, 7th November, 2022, and 2nd February, 2023 in respect of these meetings, proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purpose.
Audit Committee
The Company has constituted Audit Committee in terms of the requirements of the Act and rules framed thereunder and applicable listing regulations. For details please refer Corporate Governance Report attached as a separate Annexure-VI.
Directorsâ 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 31st March, 2023 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.
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 and Key Managerial Personnel, on the basis of attendance, contribution and various criteria as recommended by the Nomination and Remuneration Committee of the Company.
The performance of Non-Independent Directors (including the chairperson) and the Board as whole was also evaluated by the Independent Directors at the separate meeting of Independent Directors of the Company. The Directors expressed their satisfaction with the evaluation process.
Policy on Directors appointment and remuneration
Criteria determining the qualifications, positive attributes and independence of 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 specific area of business, 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, expertise in any area of business, association with the Company etc. He / She should also devote sufficient time to his/her 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 and give declaration to the Board of Directors for the same every year.
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 for 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 / her 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(s) and Non-Executive Directors) are attached as a separate Annexure- VI to this Report.
Familiarisation Programme for Independent Directors
The Directors are regularly informed during meetings of the Board and Committees on the business strategy, business activities, manufacturing operations, regulatory updates and issues faced by the ceramic industry. The Directors when they are appointed are given a detailed orientation on the Company, industry, regulatory matters, business & financial matters, human resource matters and corporate social responsibility. The details of Familiarisation programmes provided to the Independent Directors of the Company are available on the Company''s website https://www.cera-india.com/ policv-and-statutorv-documents/familiarization-programme
Remuneration / Commission from Holding or Subsidiary Company
Managing Director or Whole Time Director are not receiving any remuneration / commission from any Holding Company or Subsidiary Company.
This Nomination and Remuneration Policy (âPolicyâ) provides the framework and key guiding principles to be followed in for appointment and determination of remuneration of Directors, Key Managerial Personnel and Senior management personnel.
This Policy is to establish and govern the procedure applicable:
a) To evaluate the performance of the members of the Board.
b) To ensure remuneration to Directors, KMP and Senior Management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.
c) To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.
The said Policy is available on the website of the Company http:/ www.cera-india.com/sites/default/files/2022-05/Nomination-and-Remuneration-policy.pdf
Managerial Remuneration and Employees
Details required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are enclosed separate as an Annexure-V.
Details of employees required pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed as a separate Annexure, however it is not being sent along with this annual report to the members of the Company in line with the provisions of Section 136 of the Companies Act, 2013 and rules made there under. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The aforesaid Annexure is also available for inspection by members at the Registered Office of the Company, 21 days before and up to the date of the ensuing Annual General Meeting during the business hours on working days.
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 and Management discussion and Analysis have been included in this Annual Report per separate Annexure-VI and Annexure-I respectively.
Business Responsibility and Sustainability Report (âBRSRâ)
As required under Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, Business Responsibility and Sustainability Report forms part of the Directors'' Report and is enclosed as separate Annexure-VII.
Pursuant to Section 134(3)(a) and Section 92(3) of the Act, the Copy of Annual Return of the Company for the financial year ended 31st March, 2023 will be placed on the Company''s website at www.cera-india.com.
Particulars of Loans, guarantees or investments u/s 186.
No loan, guarantee or security has been provided by the Company during the year under review. Details of Investments covered u/s 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.
The Board has approved and implemented Risk Management Policy of the Company including identification and element of risks. Pursuant to amendments in SEBI (Listing Obligations and Disclosure Requirements Regulations), 2015, the Board of Directors of the Company has constituted the Risk Management Committee having its scope and functions as per Risk Management policy. The Committee shall also review cyber security matters of the company at various levels and also take necessary actions from time to time to mitigate the cyber risk to the Company in accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness.
The risk management system is designed to safeguard the organisation from various risks through adequate and timely action. It is designed to anticipate, evaluate and mitigate risks in order to minimise its impact on the business.
The Risk Management system is also overseen by the Audit Committee / Board of Directors of the Company on a continuous basis. The major risks identified by the businesses are systematically addressed through mitigation actions on a continual basis.
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.
Share Capital
The paid-up Equity Share Capital as on 31st March, 2023 was '' 650.29 Lakhs. During the year under review the Company has not issued any shares. No shares with differential voting rights, stock or sweat equity shares were issued by the Company during the year under review.
During the year the Company has transferred 5031 Equity Shares to Investor Education and Protection Fund, pursuant to the provisions of sections 124 & 125 of the Companies Act, 2013 and Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016.
The Company has contributed '' 20,658.61 Lakhs to the exchequer by way of GST, customs duty, Income tax, VAT and other fiscal levies.
The Company has not accepted and not renewed any deposits 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 does not have any long term loans/debts from Financial Institutions and Banks. The Company is availing Working Capital facility from State Bank of India.
During the year there is no default in payment of loan facility availed from Bank or Financial Institution, therefore details of difference between amount of valuation done at the time of one time settlement and valuation done while taking loan from bank or financial institutions is not applicable.
Statutory Auditors and their Observations
Singhi & Co., Chartered Accountants are the statutory auditors of the Company. They are appointed for a period of five years, from the conclusion of 24th AGM till the conclusion of the 29th AGM (AGM of financial year 2026-27).
The Auditors'' Report to the members for the financial year under review does not contain any qualification, reservation or adverse remark or disclaimer.
Cost Records and Cost Auditors
The Company is required to maintain cost records under Companies (Cost Records and Audit) Rules, 2014. Accordingly, cost records have been maintained by the Company. The Company has appointed K.G. Goyal & Co., as Cost Auditors for conducting cost audit for the year 2023-24.
As required by the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the members in General Meeting for their ratification. Accordingly, a resolution seeking ratification of the remuneration payable to M/s. K.G. Goyal & Co., as approved by the Audit Committee and Board is included in the Notice convening the Annual General Meeting of the Company.
Pursuant to provisions of Section 204 of Companies Act, 2013 and rules made there under, the Company had appointed Parikh Dave & Associates, Practicing Company Secretaries a peer reviewed firm to undertake the Secretarial Audit of the Company for the year 2022-23. The Secretarial Audit Report for the year 2022-23 given by Parikh Dave & Associates, Company Secretaries in practice is attached as a separate Annexure VIII. The Secretarial Audit Report do not contain any qualification, reservation or adverse remark for the financial year ended on 31st March, 2023.
During the year under review, the Statutory Auditors, Cost Auditors and Secretarial Auditors have not reported any instances of fraud committed in the Company by its Officers or Employees to the Audit Committee and / or Board under section 143(12) of the Act.
The Company is complying with the applicable Secretarial Standards.
Your Company has adequately insured all its properties including Plant and Machinery, Building and Stocks.
The Company had executed bilateral agreement for duration of four year with workmen with detailed quantification of fixed and variable wages. A similar agreement on completion of the previous agreement''s tenure was signed under section 2(p) 18(1) of Industrial Disputes Act, 1947, for 4 years with workers Union on 4th August,
2021 which became effective from 1st September, 2021. The new wage agreement was executed in harmonious environment.
The Company has adequate skilled & trained workforce for its various areas of operations and the skills upgradation of which is being done on continuous basis for improving the plant operations and quality process.
The Company has taken sufficient measures to maintain Industrial Health and Safety at its workplace for employees as laid in the Gujarat State Factories Rules, 1963. The Company is also complying and maintaining all applicable Industrial and Labour laws / rules.
The Company has in place a Policy against Sexual Harassment at workplace in line with the requirement of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committees have been set up to redress complaints received regarding sexual harassment. The Company has not received any complaints during the year under the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has organized 2 workshops under the said Act during the year under review.
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, 2023 and the date of the Board''s Report.
There is no application pending under the Insolvency and Bankruptcy Code 2016 against the Company.
No changes have been made in nature of business carried out by the Company during the financial year 2022-23.
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-VI.
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 and various departments of both State and Central Governments.
For and on behalf of the Board of Directors, For Cera Sanitaryware Limited Vikram Somany
Ahmedabad. Chairman and Managing Director
10th May, 2023 (DIN:00048827)
Mar 31, 2022
The Directors have pleasure in submitting the 24th Annual Report together with the Audited financial statements of your Company for the year ended 31st March, 2022.
The summary of your Company''s financial performance on standalone basis is given below:
|
('' in Lakhs) |
||
|
Standalone |
Yearended 31st March, 2022 |
Yearended 31st March, 2021 |
|
Revenue from Operations |
1,44,175.57 |
1,20,170.67 |
|
Profit (EBIDTA) before Interest, Depreciation, Taxes & Exceptional Item |
24,402.76 |
17,174.29 |
|
Interest |
458.71 |
426.77 |
|
Depreciation |
3,043.00 |
3,323.04 |
|
Profit before taxes and Exceptional Item |
20,901.05 |
13,424.48 |
|
Exceptional Item |
(573.80) |
- |
|
Profit before tax |
20,327.25 |
13,424.48 |
|
Tax Expense: |
||
|
- Current Year |
5,197.72 |
3,279.05 |
|
- Deferred Tax |
193.55 |
15.10 |
|
Profit for the year |
14,935.98 |
10,130.33 |
|
The summary of your Company''s financial performance on consolidated basis is given below: |
||
|
('' in Lakhs) |
||
|
Consolidated |
Year ended 31st March, 2022 |
Year ended 31st March, 2021 |
|
Revenue from Operations |
1,44,583.00 |
1,22,432.68 |
|
Profit (EBIDTA) before Interest, Depreciation, Taxes & Exceptional Item |
25,238.00 |
18,321.92 |
|
Interest |
528.15 |
972.86 |
|
Depreciation |
3,240.74 |
3,957.09 |
|
Profit before taxes and Exceptional Item |
21,469.11 |
13,391.97 |
|
Exceptional Item |
(573.80) |
- |
|
Profit before tax |
20,895.31 |
13,391.97 |
|
Tax Expense: |
||
|
- Current Year |
5,391.30 |
3,366.04 |
|
- Deferred Tax |
209.53 |
35.26 |
|
Profit for the year |
15,294.48 |
9,990.67 |
|
Add: Share of Profit / (Loss) from Associate |
0.76 |
4.76 |
|
Profit for the Year |
15,295.24 |
9,995.43 |
The Company has transferred a sum of '' 3,439.58 Lakhs to General Reserve in the current year (previous year '' 5,460.46 Lakhs).
Highlights / Performance of the Company
T urnover (Net of GST) of the Company for the year increased by 19.92% to '' 1,43,826.26 Lakhs as compared to '' 1,19,934.60 Lakhs previous year.
Profit before Depreciation and Taxes & Exceptional Items for the year increased by 42.97% to '' 23,944.05 Lakhs as compared to '' 16,747.52 Lakhs previous year.
Profit after Tax for the year increased by 47.44% to '' 14,935.98 Lakhs as compared to '' 10,130.33 Lakhs previous year.
Exceptional Item :
Pursuant to the Memorandum of Understanding (MOU) executed on 17th August, 2021, Share Purchase Agreement executed on 26th August, 2021 and Share Escrow Agreement executed with Federal Bank Ltd. on 23rd November, 2021, by and amongst Cera Sanitaryware Limited (CERA), Anjali Vishnu Holdings Ltd (AVHL) (Joint venture partner and acquirer company) and Anjani Tiles Limited (ATL) (Subsidiary company) for the transfer / divestment of entire stake in Equity and Preference Shares of Anjani Tiles Limited for the total consideration of '' 2,869.20 lakhs, the Company''s shareholdings as at 31st March, 2022 in Equity and Preference shares in ATL have been presented as Non-current Assets classified as held for sale as on 31st March, 2022 as per Indian Accounting Standard -105-âNon-current Assets Held for Sale and Discontinued Operationsâ. Accordingly, Equity shares are measured at the lower of their carrying amount and fair value less costs to sell and Preference shares are measured at fair value which is equivalent to carrying amount as at 31st March, 2022. Due to above arrangements, impairment loss of '' 573.80 lakhs has been recognised in the Statement as Exceptional Item.
Your Directors recommended a dividend of '' 20/- per share (400%) [Previous year Dividend of '' 13/- per share (260%)] on 1,30,05,874 equity shares of '' 5/- each fully paid for the year ended 31.03.2022, to be paid subject to the approval of the members at the ensuing Annual General Meeting.
Special Dividend :
Your Directors recommended a special dividend of '' 15/- per share (300%) (Previous year Dividend - Nil) on 1,30,05,874 equity shares of '' 5/- each fully paid for the year ended 31.03.2022 considering Company''s highest growth in terms of turnover and net profit since last 20 years of its operation, to be paid subject to the approval of the members at the ensuing Annual General Meeting.
During the year, the unclaimed dividend pertaining to the financial year ending 2013-14 were transferred to the Investor Education and Protection Fund.
The management has considered the impact of Covid-19 on its profitability, liquidity, supply chain, receivables, inventories, other financial assets and investments.
Even after the second wave and the third wave of Covid-19, your Company has witnessed a surge in consumer demand, both on the new build and the existing home improvement category.
The management will continue to closely monitor any material changes to future economic conditions.
Sanitaryware Unit
Post Covid-19, your company started ramping up production volumes to its optimum capacity to monetise the sustainable demand generated by the end user for home upgradation, in every geographic location across the country.
Workmen engagement activities like sports day, counselling, reward & recognition schemes have been started which has resulted into positiveness and trust at the shop floor.
Various new initiatives on safety, quality, cost and delivery and compliances on SOP have been implemented resulting into improvement in manufacturing yields and production volume.
In order to have repeatability and reproducibility of new SKU and designed product, Standardization of process and its control have been institutionalized.
Good manufacturing practices like waste reduction, KAIZEN, cost saving, and sustainability projects have been implemented to improve the utilization of deployed resources.
Your company continued to develop new/latest designs of one-piece WCs and high-end wall hung WCs to reduce dependency on imports.
Several Covid-appropriate products like rimless WCs, sensor urinals, etc. were rolled out by Sanitaryware unit.
In order to increase the touch points and to enhance the customer experience, your Company has invested in increasing the Cera Style Centres, owned and managed by retailers, in many towns.
Your Company has been in the forefront of technology and automation. After successful implementation of 3D printing and robotic glazing technologies, your Company has now added high pressure casting system. These will give your Company a technological edge.
Your company will continue optimum utilization resources and deliver high level of quality product as per customer expectations.
Your Company has witnessed growth in terms of production and sales volume, which lead the company to reach to the higher level of achievements. Company could achieve the same through various debottlenecking projects, adding balancing equipment, SOP compliances and automation of the processes.
Your Company expects even higher growth in the coming times in its Faucets business. With this in view, company is launching new colour faucet designs in line with the changing customer preferences and market need. A total of 47 new products were launched during the year.
Company will also emphasis the development and sale of WATER saving products which are very crucial for the sustenance of environment and preservation of ecosystem. 47.44% of products in the portfolio are water saving products.
Several Covid-appropriate products like sensor faucets, foot-operated taps, etc. were conceived, developed, and produced by Faucetware division.
Your Company continued launches of new products and designs with 25 new products launched during the year. New Covid-appropriate products like anti-bacterial seat covers were developed and launched.
Distribution of your Company''s premium offering, Senator, aimed at discerning customers has been widened, to reach more customers.
New products have been added in JEET, your Company''s sanitaryware range aimed at affordable segment.
Unboxing Smiles
Since its inception, your company CERA is known for its unique sensibility, cutting-edge designs and modern technology when it comes to its products, which forever appeals to the customers evolving needs. Continuing this philosophy of utmost care and precision, CERA ushered its newest product range by launching it under the theme - Unboxing Smiles - on 15th December 2021 in Delhi. This versatile range of products unboxes Modern Living, Style, Functionality as well as Customers'' Expectations.
From superior design and aesthetics to awe-inspiring styles, futuristic products to the most competitive prices, Unboxing Smiles has everything covered.
The products are smartly segregated into different categories viz. Unboxing Style - which will redefine bathing experience, Unboxing Functionality - which lets you experience never seen before purposefulness, Unboxing Modern Living - which offers classy & elegant designs along with premium pricing and maintenance and Unboxing Customersâ Expectations - which showcases irresistible & innovative designs to make the best use of space.
Highest Share of voice in Media
Your company CERA used high impact media strategy to increase the brand reach and consumer exposure. A combination of GEC (General Entertainment Channels) - Impact properties and news program used to expose âKuch Pal GharKe Naamâ on television to consumers. Campaign started in May 2021 where we had advertised our three ads Television Commercial Advertisement in high frequency on 31 Hindi / English news channels. For HSM (Hindi Speaking Market) market, in the month of August 2021 your company took âKaun Banega Crorepatiâ the biggest show of Indian Television as associate sponsor, in addition CERA also sponsor popular dance show âIndia''s best dancerâ. For Non HSM market, Big Boss Season-5 Telugu version was sponsored for Telangana and Andhra Pradesh market, Co-powered sponsorship in OruChiriIruChiri Bumper Chiri and Star Singer for Kerala market and in last quarter your company advertised heavily in News channels - Hindi, English and Regional languages and covered elections in UP, Punjab, Goa, Manipur & Uttrakhand.
CERA was the most visible brand last year in television and have highest share of voice. 7 out of 10 ads seen (in Sanitaryware category) were of CERA.
Brand CERA in Digital Media
We understand today consumer spends lot of time on social media. Digital campaigns which include series of Product films covering Sanitaryware /Faucetware /Tiles categories - âTested by expertâ and âNo Compromiseâ conceptualised and launched which helped brand to gain lot of popularity and increased consumer engagement. Other initiatives also taken to increase brand recall and search i.e. Google display ads, remarketing and sustenance campaigns, Search engine optimization, Search engine maximization and others.
Trade expansion and development with brand stores
A complete retail expansion program was launched with a view to increase exclusive / non-exclusive brand stores and deliver ultimate consumer experience.
CERA focused to support channel partners by helping them to build brand stores - Cera Style Galleries, Cera Style Hub, Cera Style Centre, Cera Tile Galleries and Cera Tile Centres. This created a strong brand visibility in the market and also give our consumers an experience to remember and facilitate better decision making. CERA also revamped company owned display centre âCera Style Studioâ in Kolkata to support trade.
Product Category Consolidation
CERA also consolidated product categories so that we can deliver better service & meet market expectations. Going forward our efforts will be to build our core businesses - Sanitaryware, Faucet and Tiles.
Retailer Loyalty Programme
CERA Superstar retailer / sub dealer loyalty program was launched towards the purchases made by associate partners (Retailers) from CERA''s authorised dealers. The purpose of this program is to strengthen the relationship with the Retailers and provide transparent communication.
Skill development and Training
CERA rigorously conduct training sessions to upskill the knowledge of plumbers and masons. This enables them to get better wages , resolve customer query satisfactorily and install products hassle-free.
CERA won the most affiliated awards consecutively for the third time in a row such as âTrusted brandâ and âSuper brandâ.
Your company made rapid strides in the Tiles segment by launching new designs Slabs, large format sizes of 1200x2400mm, 1200x1200mm and 800x1600mm and also new designs and sizes in both floor and wall categories.
In 2015 the company had entered into a Joint Venture with Anjani Tiles Ltd at Andhra Pradesh with 51% Equity and Milo Tiles LLP (earlier Crown Ceramics-an established production facility) at Morbi, Gujarat with 26% Equity (since 2019) for producing high end Glazed Vitrified Floor Tiles aggregating to 16000 Sq. Mtr. per day. With your company deciding to monetise its equity in ATL, the JV arrangement with ATL at Andhra Pradesh has come to end by entering into MOU and SPA (Share Purchase Agreement) in August 2021. The proceed of Preference and Equity Shares are being received in phased manner.
Packaging Unit
CERA holds an Equity of 51% in Joint Venture unit for manufacture of corrugated boxes which has now achieved full utilisation of production. The products are now available on a just in time basis, built to the exact specifications for the Company. The capacity utilization has increased considerably during the year.
Polymer Unit
The Joint venture for Polymer Products unit for manufacturing of seat covers and cisterns has reached optimum capacity of its production during the year. Cera holds 51% Equity. The quality products are available and capacity utilization has increased gradually during the year.
Green Energy Unit
As a part of national policy and Green initiative, which was initiated in 1995, Company has energy security and stabilized power cost
by generation of electricity through non-conventional sources for captive use through wind and solar.
The current installed capacity of Non-Conventional Energy unit of the Company stands to 10.325 M.W.
The non-conventional Wind and Solar Power has produced 156.88 lakhs KWH for captive use.
Conservation of energy, technology absorption and foreign exchange earnings and outgo:
Conservation of energy
The Company has two sources of its main energy, viz. Natural Gas - GAIL and Sabarmati Gas Ltd., for operating its Sanitaryware plant. The pricing of both sources differ, as GAIL sources gas from isolated wells in and around Cera''s manufacturing facility, and is able to contract gas at a lower price over prevailing market pricing. Medium term contracts with these suppliers are renewed on aperiodic basis. For energy conservation, the company has installed fuel efficient burners to control gas consumption and in addition to this, every effort is made by the company to adapt any technological developments in energy conservation.
The second energy, viz. electricity, required for running the machineries, is supplied by the local Discom. To compensate the energy consumption by way of electricity, your Company has an installed capacity of Wind Turbines of 8.325 MW and Solar Plants of 2.00 MW which generates about 70% of the company''s electricity requirement and this gets offset against monthly consumption of the 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- III.
Environmental Social Governance (ESG)
Cera Sanitaryware follows a holistic approach towards Environmental, Social and Governance matters. Cera Sanitaryware values the trust reposed by its stakeholders including customers, the communities in which it operates and society at large and has strived hard to protect and preserve their interests.
Environment at Cera Sanitaryware
Cera is highly committed to ensuring zero environmental impact due to its operations. The Company stringently adheres to norms governing reduction of emissions, pollution control and other environmental aspects. Some of the broad initiatives undertaken by the Company include:
¦ Installation of a rooftop solar power system (one of the largest in the Kadi region), which has gone a long way in substantially reducing the carbon footprint.
¦ Cera has managed to stabilize power cost by generating electricity through non-conventional sources (wind and solar) for captive use; as of FY22, its total installed non-conventional energy capacity stood at 10.325 MW, which produced 15.69mn unit. 70% of its energy needs are met through renewable energy.
¦ In its initiative to conserve biodiversity, the Company has undertaken plantation of over 10,000 plus trees.
¦ By successfully developing a fully functional rainwaterharvesting system, Cera has managed to reduce dependence on ground water usage. Further, by recycling water used for
the manufacturing process the Company has reduced the water intensity of its operations.
¦ Under the initiative of âWaste Minimization and Waste Utilization'', the Company has been undertaking numerous measures. Some of these measures include recycling of solid and liquid and ZLD (zero liquid discharge), high energy efficient rated machines, compliance to pollution norms and awareness generation among employees etc. Majority of the waste generated in the company''s operations is recycled and the balance is disposed-off safely. The Company has also installed a Effluent Treatment Plant at both of its facilities.
Social dimension at Cera Sanitaryware
For the past several years, Cera has been actively involved in various social welfare activities. Over a span of 5 years, Cera has spent more than '' 15 crore for development within Kadi district (a tier 3 developing industrial area) and surrounding areas. Additionally, the Company at regular intervals provides necessary safety and skill up-gradation training to its permanent as well as its contractual employees. The Company has systems in place to ensure no child labour, forced or involuntary labour at its facilities. During the financial year 2021-2022, the Company has spent '' 29.10mn towards CSR activities mainly in the areas of education, healthcare, rural development, woman empowerment and eradicating hunger.
Governance at Cera Sanitaryware
Adhering to the best Corporate Governance practices has been a strong endeavor of the Company since its inception. The organization strongly believes that there is a direct association between good corporate governance practices and stakeholder value enhancement. To ensure protection of interests of all stakeholders of the Company, Cera has adopted various strict governance related policies to the best governance practices. Its policy relating to ethics, bribery and corruption serves as the guiding philosophy for its employees as well as the employees of its subsidiary and JV companies. The Company also has a whistleblower policy in place, which provides a platform to all employees, vendors and customers to report any suspected fraud or error or confirmed incident of fraud/misconduct. Through prudent strategies the Company has optimized asset utilization and preserved the collective funds at its disposal by avoiding unrelated diversification or over-ambitious expansion. By ensuring fair and ethical dealings with all stakeholders, the Company has a robust track record of Corporate Governance practices.
Going ahead, the Company aspires to continue deepening its focus towards the environmental social governance (ESG) aspect in the organization and create a sustainable future for all its stakeholders.
Subsidiary Company
The Company has one Subsidiary Company and two Subsidiary LLP''s namely Anjani Tiles Limited and Packcart Packaging LLP & Race Polymer Arts LLP respectively.
There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 (âActâ). Further there has been no material change in the nature of business of the subsidiary. The Company does not have any material subsidiary. The Policy on Material Subsidiary framed by the Board of Directors of the Company is available on Company''s website at the link https:// www.cera-india.com/corporate/policv-for-determining-material-subsidiary/.
Those Shareholders who are interested in obtaining a copy of the audited annual financial statements of the subsidiary may write to the Company. The Audited financial statements of all subsidiaries are available on the website of the Company www.cera-india.com.
Pursuant to the provisions of Section 129, 134 and 136 of the Companies Act, 2013 with rules made thereunder and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has prepared consolidated financial statements of the Company and salient features of the financial statement of the subsidiaries is set out in the prescribed form AOC-1 forming part of this Annual Report.
Further, your Company has decided for divestment of entire stake in one of its Subsidiaries, viz Anjani Tiles Limited and pursuant to the Resolution passed at the Board Meeting held on 5th August, 2021 for consideration of the proposal and in principle approval for divestment of the Company''s entire stake in Anjani Tiles Limited, a subsidiary company, a Memorandum of Understanding (MOU) was executed on 17th August, 2021 by and amongst Cera Sanitaryware Limited (Cera), Anjani Vishnu Holdings Ltd (AVHL) (Joint Venture Partner and Acquirer Company) and Anjani Tiles Limited (ATL) (Subsidiary Company) for the transfer / divestment of entire stake in Anjani Tiles Limited , consisting of 1,02,00,000 Equity shares of '' 10/- each and 2,42,30,000 1% Cumulative Redeemable Preference shares of '' 10/- each on a fully diluted basis, for a total consideration of '' 2,869.20 Lakhs.
The Company, AVHL and ATL also entered in to Share Purchase Agreement (SPA) dated 26th August, 2021 pursuant to which the Company agreed to sell all the Equity and Preference Shares held by it in ATL to AVHL.
Total consideration as referred above, will be received by the Company in one or more tranches, beginning from 30th September, 2021 and completing on 31st March, 2023 through an escrow mechanism and as per the Payment Schedule set out in the MOU. Accordingly, the first tranche of '' 643.00 Lakhs has been received on 28th September, 2021 from the Acquirer Company and 64,30,000 Preference Shares of ATL have been transferred (off market) to AVHL on 29th September, 2021.
Further, pursuant to the MOU and SPA, the Share Escrow Agreement was executed by the Company, AVHL and ATL with Federal Bank Ltd. (Escrow Agent) jointly on 23rd November, 2021. Both Cera and AVHL have transferred their respective entire Equity shareholding and their respective balance Preference shareholding to the Escrow Account in January, 2022 with lien marked in favour of the Escrow Agent.
Company''s shareholdings in Equity and Preference shares in ATL have been presented as Non-current Assets classified as Held for Sale as on 31st March, 2022 as per Indian Accounting Standard -105 - âNon-current Assets Held for Sale and Discontinued Operationsâ, measured at the lower of its carrying amount and fair value less costs to sell in respect of Equity shares and at fair value in respect of Preference shares as at 31st March, 2022. The impairment loss of '' 573.80 Lakhs on Equity Shares (Preference shares to be transferred at fair value which is equivalent to carrying amount) due to above arrangements has been recognised in the Statement of Profit and Loss as Exceptional Item.
Particulars of contracts or arrangements with related parties
All transactions entered 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, the details of which are included in the notes forming part of the financial statements.
There were no material related party transactions entered during the year. Accordingly, information in form AOC - 2 is not annexed. Further no materially significant related Party transactions were made by the Company with Directors, Key Managerial Personnels
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. Pursuant to recent amendments in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 in respect of related party transactions, the Board of Directors have revised the Policy on related Party transactions w.e.f. 1st April, 2022 and the same is uploaded on the Company''s website i.e. www.cera-india.com.
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 Annual Report on Corporate Social Responsibility (CSR) Activities alongwith Annexure as per Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as a separate Annexure-IV and separate activity wise CSR Report has been annexed as per Annexure -II.
Shri Sajan Kumar Pasari, Shri Lalit Kumar Bohania, Shri Surendra Singh Baid and Ms. Akriti Jain are the Independent Directors of the Company and 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 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and there has been no change in the circumstances which may affect their status as Independent director during the year under review and have also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence. The Company keeps informed independent directors about changes in the Companies Act, 2013 and rules and other related laws from time to time and their role, duties and responsibilities. Shri Surendra Singh Baid is proposed to be re-appointed as Independent Director for further term of Five years at the ensuing Annual General meeting of the Company.
Due to personal reasons Shri Atul Sanghvi resigned as Executive Director & CEO of the Company from the end of 14th October, 2021. The Board placed its warm appreciation for the contribution made by him as an Executive director during the tenure on the Board of the Company.
Upon the recommendation of Nomination and Remuneration Committee, the Board of Directors has appointed Shri Anupam Gupta as an Additional Director of the Company w.e.f. 15th October, 2021. Subsequently at the same meeting, he was appointed as an Executive Director (Technical) of the Company for period of 3 years w.e.f. 15th October, 2021 subject to approval of the members at the ensuing Annual General meeting of the Company.
The Board of Directors has re-appointed Shri Ayush Bagla as an Executive Director for a period of three years w.e.f. 14th May, 2022
and Shri Vikram Somany as Chairman and Managing Director for a period of five years w.e.f. 1st July, 2022. Their appointments are subject to approval of the members at the ensuing Annual General Meeting of the Company.
Smt. Deepshikha Khaitan, is liable to retire at the end of the ensuing Annual General Meeting and being eligible, offers herself for reappointment.
The resolutions proposing the appointment/reappointment of the Directors are set out in the notice convening Annual General Meeting for approval of members.
Brief resume of the director who is proposed to be reappointed at the ensuring Annual General meeting, as required as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in the notice convening this Annual General Meeting of the Company.
There was no other change in the Key Managerial Personnel during the year under review except mentioned as above.
Number of Meetings of the Board
The Board of Directors, during the financial year 2021-22 duly met 6 times on 02.06.2021, 10.06.2021, 05.08.2021, 31.08.2021, 26.10.2021 and 24.01.2022 in respect of these meetings, proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purpose.
The Company has constituted Audit Committee in terms of the requirements of the Act and rules framed thereunder and applicable listing regulations. For details please refer Corporate Governance Report attached as a separate Annexure-VI.
Directorsâ 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 31st March, 2022 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.
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 and Key
Managerial Personnel, on the basis of attendance, contribution and various criteria as recommended by the Nomination and Remuneration Committee of the Company.
The performance of Non-Independent Directors (including the chairperson) and the Board as whole was also evaluated by the Independent Directors at the separate meeting of Independent Directors of the Company. The Directors expressed their satisfaction with the evaluation process.
Policy on Directors appointment and remuneration
Criteria determining the qualifications, positive attributes and independence of 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 specific area of business, 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, expertise in any area of business, association with the Company etc. He/She should also devote sufficient time to his/her 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 and give declaration to the Board of Directors for the same every year.
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 for 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/her 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(s) and Non-Executive Directors) are attached as a separate Annexure-VI to this Report.
Familiarisation Programme for Independent Directors
The Directors are regularly informed during meetings of the Board and Committees on the business strategy, business activities, manufacturing operations and issues faced by the ceramic industry. The Directors when they are appointed are given a detailed orientation on the Company, industry, regulatory matters, business & financial matters, human resource matters and corporate social responsibility. The details of Familiarisation programmes provided to the Independent Directors of the Company are available on the Company''s website www.cera-india.com.
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.
This Nomination and Remuneration Policy (âPolicyâ) provides the framework and key guiding principles to be followed in for appointment and determination of remuneration of Directors, Key Managerial Personnel and Senior management personnel.
This Policy is to establish and govern the procedure applicable:
a) To evaluate the performance of the members of the Board.
b) To ensure remuneration to Directors, KMP and Senior Management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.
c) To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.
The said Policy is available on the website of the Company www.cera-india.com
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 annexed as a separate Annexure, however it is not being sent along with this annual report to the members of the Company in line with the provisions of Section 136 of the Companies Act, 2013 and rules made there under. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The aforesaid Annexure is also available for inspection by members at the Registered Office of the Company, 21 days before and up to the date of the ensuing Annual General Meeting during the business hours on working days.
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 Practicing Company Secretary''s Certificate on its compliance and Management discussion and Analysis have been included in this Annual Report as per separate Annexure-VI and Annexure-I respectively.
Business Responsibility Reporting
As required under Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, Business Responsibility Report forms part of the Directors'' Report and is enclosed as separate Annexure-VII.
Pursuant to Section 134(3)(a) and Section 92(3) of the Act, the Copy of Annual Return of the Company for the financial year ended March 31, 2022 will be placed on the Company''s website at www.cera-india.com.
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.
The Board has approved and implemented Risk Management Policy of the Company including identification and element of risks. Pursuant to amendments in SEBI (Listing Obligations and Disclosure Requirements Regulations), 2015, the Board of Directors of the Company has constituted the Risk Management Committee having its scope and functions as per Risk Management policy. The Committee shall also review cyber security matters of the company at various levels and also take necessary actions from time to time to mitigate the cyber risk to the Company in accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness.
The Risk Management system is also overseen by the Audit Committee / Board of Directors of the Company on a continuous basis. The major risks identified by the businesses are systematically addressed through mitigation actions on a continual basis.
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.
The paid-up Equity Share Capital as on 31st March, 2022 was Rs.650.29 Lakhs. During the year under review the Company has not issued any shares.
No shares with differential voting rights, stock or sweat equity shares were issued by the Company during the year under review.
During the year the Company has transferred 4746 Equity Shares to Investor Education and Protection Fund, pursuant to the provisions of sections 124 & 125 of the Companies Act, 2013 and Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016.
The Company has contributed '' 16,131 Lakhs to the exchequer by way of GST, customs duty, service Tax, income tax, VAT, salestax and other fiscal levies.
Deposits
The Company has not accepted and not renewed any deposits falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.
During the year under review, the Company does not have any long term loans/debts from Financial Institutions and Banks. The Company is availing Working Capital facility from State Bank of India.
During the year there is no default in payment of loan facility availed from Bank or Financial Institution, therefore details of difference between amount of valuation done at the time of one time settlement and valuation done while taking loan from bank or financial institutions is not applicable.
Auditors and their Observations
N.M. Nagri & Co., Chartered Accountants were appointed as Auditors at 19th Annual General Meeting (âAGM'') held on 27th July, 2017 to hold the office of the Auditors up to the conclusion of the 24th Annual General Meeting.
The existing Auditor''s firm has completed terms of five consecutive years pursuant to Section 139(2) of the Companies Act, 2013. The Audit Committee and the Board of Directors have recommended appointment of Singhi & Co., Chartered Accountants (Firm Registration No.302049E) as the Statutory Auditors of the Company for a term of five years from the conclusion of 24th AGM till the conclusion of the 29th AGM (AGM of Financial year 2026-27) subject to the approval of the members at the ensuing Annual General meeting.
Singhi & Co., Chartered Accountants, have consented to the said appointment and confirmed that their appointment, if made, would be within the limits specified under Section 141(3)(g) of the Act. They have further confirmed that they are not disqualified to be appointed as statutory auditors in terms of the provisions of the proviso to Section 139(1) and Section 141(3) of the Act and the provisions of the Companies (Audit and Auditors) Rules, 2014.
The Auditors'' Report and Secretarial Audit Report to the members for the financial year under review does not contain any qualification, reservation or adverse remark or disclaimer.
The Statutory Auditors have not reported any fraud during the year under review.
Cost Records and Cost Auditors
The Company is required to maintain cost records under Companies (Cost Records and Audit) Rules, 2014. Accordingly, cost records have been maintained by the Company. The Company has appointed K.G. Goyal & Co., as Cost Auditors for conducting cost audit for the year 2022-23.
Pursuant to provisions of Section 204 of Companies Act, 2013 and rules made there under, the Company had appointed Parikh Dave & Associates, Practicing Company Secretaries to undertake the Secretarial Audit of the Company for the year 2021-22. The Secretarial Audit Report for the year 2021-22 given by Parikh Dave & Associates, Company Secretaries in practice is annexed with this report.
The Company is complying with the applicable Secretarial Standards.
Insurance
Your Company has adequately insured all its properties including Plant and Machinery, Building and Stocks.
The Company has in the past signed bilaterally negotiated four year wage agreements with workmen with detailed quantification of fixed and variable wages. A similar agreement on completion of the previous agreement''s tenure was signed under section 2(p) 18(1) of Industrial Disputes Act, 1947, for 4 years with workers Union on 4th August, 2021 which took effect on 1st September, 2021. The new wage agreement was executed in harmonious environment and without any labour unrest and loss of production.
The Company has adequate skilled & trained workforce for its various areas of operations and the skills upgradation of which is being done on continuous basis for improving the plant operations and quality process.
The Company has taken sufficient measures to maintain Industrial Health and Safety at its workplace for employees as laid in the Gujarat State Factories Rules, 1963. The Company is also complying and maintaining all applicable Industrial and Labour laws/ rules.
The Company has in place a Policy against Sexual Harassment at workplace in line with the requirement of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committees have been set up to redress complaints received regarding sexual harassment. The Company has not received any complaints during the year under the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has organized 2 workshops under the said Act during the year under review.
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, 2022 and the date of the Board''s Report.
There is no application pending under the Insolvency and Bankruptcy Code 2016 against the Company.
No changes have been made in nature of business carried out by the Company during the financial year 2021-22.
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-VI.
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 and various departments of both State and Central Governments.
For and on behalf of the Board of Directors, For Cera Sanitaryware Limited Vikram Somany
Ahmedabad. Chairman and Managing Director
10th May, 2022 (DIN:00048827)
Mar 31, 2019
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, 2019.
Performance
The summary of your Companyâs financial performance is given below:
(Rs. in Lakhs)
|
Year ended Year ended March 31, 2019 March 31, 2018 |
||
|
Profit before Depreciation and Taxes & Exceptional item |
20301.36 |
17679.44 |
|
Deducting there from Depreciation of 2284.83 |
2235.76 |
|
|
Profit before Tax |
18016.53 |
15443.68 |
|
Deducting there from taxes of: |
||
|
- Current Year |
6015.29 |
5009.99 |
|
- Deferred Tax |
495.91 |
408.54 |
|
Profit for the year |
11505.33 |
10025.15 |
|
Add/Less: Other comprehensive Income (Net of tax) |
(103.68) |
(90.21) |
|
Total Comprehensive Income for the year. |
11401.65 |
9934.94 |
Transfer to Reserves
The Company has transferred a sum of Rs. 5857.61 Lakhs to General Reserve in the current year (previous year Rs. 6359.68 Lakhs).
Highlights / Performance of the Company
Turnover (Net of GST / Excise) of the Company for the year increased by 13.70% to Rs. 133943.49 Lakhs as compared to Rs. 117808.72 Lakhs previous year.
Profit before Depreciation and Taxes & Exceptional Items for the year increased by 14.83% to Rs. 20301.36 Lakhs as compared to Rs. 17679.44 Lakhs previous year.
Profit after Tax for the year increased by 14.76% to Rs. 11505.33 Lakhs as compared to Rs. 10025.15 Lakhs previous year.
Sanitaryware Unit
During the year, the Company continued with its dominant position in the Indian market place. The Companyâs plant continued to operate at an optimum mix of high capacity utilization and production of technologically complex products. The Company continues to capitalize on evolving consumer tastes by introduction of differentiated products and maximise the use of Company owned experience center which serve as a large format consumer touch point.
Your Company has been constantly upgrading its technology, increasing automation, upgrading consumer visible manufacturing processes via robotic glazing machines which help in evenness of glaze and also save glaze, your Company is now going in for further mechanization of casting. The Company developed 3D printing machines allow designs to be prototypes in a manner of weeks, facilitating quicker time to market of new designs.
Faucetsware Unit
The business has attained critical mass, the product offerings span most consumer tastes in price and design. In Faucetware manufacturing, continuous technology upgradation programs have enabled higher productivity and minimum human intervention in the manufacturing process. Commissioning of the Zamac plant, has substituted imported zamac handles. Your Company has now embarked on further mechnisation and automation of production process.
Launch of new prototypes many of which are launched as products with the help of 4 axis 3D printing and robotic grinding and polishing, your Company has been able to differentiate products based on design, finish and consumer preferences.
Bathware Unit
Yoour Company continued its aggressive launches. This year the Company launched water heaters, which have been well accepted in the market.
Senator by CERA
Your Company premium offering, Senator by CERA aimed at discerning customers has been received overwhelmingly in the market. Senator consists of Sanitaryware, faucets, mirrors and wellness.
JEET
JEET, your Companyâs sanitaryware range aimed at affordable segment, has been readied for relaunch.
ISVEA
The Italian luxury designer sanitaryware, ISVEA, launched by your Company, exclusively in India, has established with over 50 showrooms.
Modular Kitchens
Your Company entered modular kitchens market, with the launch of Senator Cucine, in CERA Style Studio in Kochi, in the presence of over 400 trade associates, developers and architects. Senator cucine is made to measure in Italy.
Tiles Unit
Your company had a megs launch of new range of tiles, which was witnessed by over 500 dealers and 200 architects from all over India. The event established CERAâs supremacy in range and quality of tiles.
Apart from the existing JV with Anjani Tiles Limited in Andhra Pradesh, your Company also entered into a JV with Milo Tiles LLP in Morbi, thus helping it in reaching out to West, North and East markets.
Joint Ventures
During the year company has entered into a Joint Venture with Milo Tiles LLP (Earlier Crown Ceramics - an established production facility since 2015) at Morbi, Gujarat with 26% Equity amounting to Rs. 806 Lakhs for producing high end Glazed Vitrified Floor Tiles of 7000 Sq. Mtr. per day.
Packaging Unit
The Joint Venture unit for manufacture of corrugated boxes has now achieved stabilised production. The products are now available on a just in time basis, built to the exacting specifications for the Company. The capacity utilization has increased considerably during the year. CERA holds an equity of 51%.
Polymer Unit
Your Company has entered into Joint venture for Polymer Products unit for manufacture of seat covers and cisterns with 51% Equity amounting to Rs. 370 Lakhs.
Dubai & Sharjah operations
As business conditions in the Gulf Countries have changed, so has the companyâs strategy. The focus of the company will be township projects sourced by the companyâs dealers, and the need to use the company owned Cera Sanitaryware Ltd FZC- Sharjah, UAE will no more be required.The Board of Directors at their meeting held on 14th May, 2019 have approved to discontinue the business operations of Cera Sanitaryware Ltd FZC- Sharjah, UAE.
Green Energy Unit
As a part of national policy and Green initiative, which was initiated in 1995, Company has stabilized power cost by generation of electricity through non-conventional sources for captive use through wind and solar.
The installed capacity of Non-Conventional Energy unit of the company was 13.825 M.W, out of which a portion of 3.5 M.W Wind Power unit at Vill.Patelka and Vill.Lamba - Dist.Porbandar, Gujarat were sold due to completion of their useful life. The current installed capacity of Non-Conventional Energy unit of the Company stands to 10.325 M.W.
The non-conventional Wind and Solar Power has produced 188.27 lakhs KWH for captive use.
Conservation of energy, technology absorption and foreign exchange earnings and outgo:
Conservation of energy
The Company has two sources of its main energy, viz. Natural Gas - GAIL and Sabarmati Gas Ltd., for operating its sanitaryware plant. The pricing of both sources differ, as GAIL sources gas from isolated wells in and around Ceraâs manufacturing facility, and is able to contract gas at a lower price over prevailing market pricing. Medium term contracts with these suppliers are renewed on a periodic basis. For energy conservation, the company has installed fuel efficient burners to control gas consumption and in addition to this, every effort is done to adapt any technological developments in energy conservation by the Company.
The second energy, viz. electricity, required for running the machineries, is supplied by the local Discom. To compensate within the energy consumption by way of electricity, your Company has an installed capacity of Wind Turbines of 8.325 MW and 2.00 MW Solar Plant which generates about 90% of the requirements and gets offset against monthly consumption of the 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- III.
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. The Company has also two subsidiary LLP viz. Packcart Packaging LLP and Race Polymer Arts LLP. During the year Race Polymer Arts LLP was incorporated with 51% capital contribution by the Company for manufacturing of polymer products like seat cover, cistern, fittings and other products made from polypropylene (PP).
There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 (âActâ). Further there has been no material change in the nature of business of the subsidiary.
The Company does not have any material subsidiary. The Policy on Material Subsidiary framed by the Board of Directors of the Company is available on Companyâs website at the link https:// www.cera-india.com/corporate/policy-for-determining-material-subsidiary/.
Those Shareholders who are interested in obtaining a copy of the audited annual accounts of the subsidiary may write to the Company.
In terms of provisions of 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 attached herewith as a separate Annexure - IV to this Annual Report.
Particulars of contracts or arrangements with related parties
All transactions entered 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 armâs length basis, the details of which are included in the notes forming part of the financial statements.
There were no material related party transactions entered during the year. Accordingly, information in form AOC - 2 is not annexed. Further no materially significant related Party transactions were 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 Companyâs website i.e. www.cera-india.com.
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 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as a separate Annexure - V.
Directorsâ 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 31st March, 2019 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 - VI.
Details of employees required pursuant to Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed as a separate Annexure, however it is not being sent along with this annual report to the members of the company in line with the provisions of Section 136 of the Companies Act, 2013 and rules made there under. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The aforesaid Annexure is also available for inspection by members at the Registered Office of the Company, 21 days before and up to the date of the ensuing Annual General Meeting during the business hours on working days.
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 Companyâs 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 Practicing Company Secretaryâs Certificate on its compliance and Management discussion and Analysis have been included in this Annual Report as per separate Annexure - VIII and Annexure - I respectively.
Business Responsibility Reporting
As required under Regulation 34(2)(F) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, Business Responsibility Report forms part of the Directorsâ Report and is enclosed as separate Annexure - IX.
Number of Meetings of the Board
The Board of Directors, during the financial year 2018 - 19 duly met 5 times on 18-04-2018, 03-05-2018, 09-08-2018, 01-11-2018 and 29-01-2019 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, as per provisions of Section 92 of the Companies Act, 2013 read with Rules made thereunder.
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 Companyâs process and policies for determining risk tolerance and review managementâs 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 - I to this report.
Pursuant to amendments in SEBI(LODR) Regulations, 2015, the Board of Directors of the Company has constituted the Risk Management Committee on 29th January, 2019.
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 recommended a dividend of Rs. 13/- per share (260%) (Previous year Rs. 12/- per share (240%)) on 1,30,05,874 equity shares of Rs. 5/- each fully paid for the year ended 31.03.2019, to be paid subject to the approval of the members at the ensuing Annual General Meeting.
During the year, the unclaimed dividend pertaining to the financial year ending 2010-11 were transferred to the Investor Education and Protection Fund.
Share Capital
The paid-up Equity Share Capital as on 31st March, 2019 was Rs. 650.29 Lakhs. During the year under review the Company has not issued any shares.
No shares with differential voting rights, stock or sweat equity shares were issued by the Company during the year under review.
During the year the Company has transferred 45,501 Equity Shares to Investor Education and Protection Fund, pursuant to the provisions of sections 124 & 125 of the Companies Act, 2013 and Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016.
Exchequer
The Company has contributed Rs. 17918 Lakhs to the exchequer by way of GST, 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. 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 defaults in repayments of deposits or payment of interest thereon during the year.
Finance
During the year under review, the Company does not have any long term loans/debts from Financial Institutions and Banks.
Directors and KMP
Members at the Annual General Meeting held on 30-08-2018 have re-appointed Shri Sajan Kumar Pasari and Shri Lalit Kumar Bohania as Independent Directors of the Company to hold office for further period of five consecutive years for a term up to 31st March, 2024. Similarly, Shri J. K. Taparia was appointed as Independent Director at Annual General Meeting held on 27.07.2017 to hold office for five consecutive years up to 31.03.2022 (they will not retire by rotation). Shri Ayush Bagla and Shri Surendra Singh Baid were appointed as Independent Directors at the Annual General meeting held on 30.08.2018 to hold office for period of Five consecutive years upto 31.03.2023.
Ms. Akriti Jain (DIN: 08259413) was appointed as Additional Woman Director (Independent) on the Board of the Company w.e.f. 1st November, 2018 to hold office up to the ensuing Annual General Meeting. Ms. Akriti Jain is proposed to be appointed as Independent Director for five consecutive years at the ensuing 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 and SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 and there has been no change in the circumstances which may affect their status as Independent director during the year under review and have also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact his ability to discharge his duties with an objective independent judgment and without any external influence. The Company keeps informed independent directors about changes in the Companies Act, 2013 and rules and other related laws from time to time and their role, duties and responsibilities.
The Board of Directors has appointed Shri Ayush Bagla as Executive Director for a period of 3 years w.e.f. 14.05.2019, subject to approval of the members at the ensuing Annual General meeting. Upon appointment as Executive Director, Shri Ayush Bagla ceased to be Independent Director of the Company.
Shri Govindbhai P. Patel has resigned as Director of the Company w.e.f. 18th April, 2018. Shri S.C. Kothari has retired w.e.f. 1st April, 2019 as CEO of the Company. Your directors wish to place on record their appreciation for the contributions made by them to the Company.
Shri Atul Sanghvi has been appointed as Chief Executive officer of the Company and designated as Executive Director and Chief Executive Officer (ED & CEO) of the Company and considered as Key Managerial Personnel of the Company pursuant to section 203 of the Companies, Act, 2013. Shri Atul Sanghvi (DIN:00045903) is due to retire at the end of the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
Brief resumes of the directors who are proposed to be appointed/ reappointed at the ensuring Annual General meeting, as required as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in the notice convening this Annual General Meeting of the Company.
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 and Key Managerial Personnel, 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 Independent Director and Non-Independent Director (including the chairperson) was also evaluated by the Independent Directors at the separate meeting 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 Companyâs business.
- Positive attributes of Independent Directors
An independent director shall be a person of integrity, who possesses knowledge, qualifications, experience, expertise in any specific area of business, 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, expertise in any area of business, 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 and give declaration every year to the Board of Directors for the same.
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(s) and non-executive directors) are attached as a separate Annexure - VIII to this Report.
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
N.M. Nagri & Co., Chartered Accountants are the statutory auditors of the Company. They are appointed for a period of five years, from the conclusion of 19th AGM till the conclusion of the 24th AGM (AGM of financial year 2021-22).
Pursuant to amendment to section 139 of the Companies Act, 2013 effective from May 7, 2018, ratification of Statutory Auditorsâ appointment is not required at every Annual General Meeting. Accordingly, resolution for ratification of Statutory Auditors is not proposed.
The Auditorsâ Report and Secretarial Audit Report to the members for the financial 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 Records and Cost Auditors
The Company is required to maintain cost records under Companies (Cost Records and Audit) Rules, 2014. Accordingly, cost records have been maintained by the Company.
The Company has appointed K.G. Goyal & Co., as Cost Auditors for conducting cost audit for the year 2019-20.
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 2019-20.
The Secretarial Audit Report for the year 2018-19 given by Umesh Parikh and Associates, Company Secretaries in practice is annexed with this report.
The Company is complying with the applicable Secretarial Standards.
Insurance
Your Company has adequately insured all its properties including Plant and Machinery, Building and Stocks.
Industrial Relations
The Company has successfully signed a Long-Term Settlement (LTS) under section 12(3) of Industrial Disputes Act,1947, for 4 years with workers Union on 4th August, 2017 which was due on 01st September, 2017. The LTS was signed in harmonious environment and without any labour unrest and loss of production. The next LTS will fall due on 01st September, 2021. The industrial relations in the Companyâs plant had been cordial and peaceful throughout the year.
The Company has adequate skilled & trained workforce for its various areas of operations and the skills upgradation of which is being done on continuous basis for improving the plant operations and quality process.
The Company has taken sufficient measures to maintain Industrial Health and Safety at its workplace foremployees as laid in the Gujarat State Factories Rules, 1963. The Company is also complying and maintaining all applicable Industrial and Labour laws / rules.
The Company has in place a Policy against Sexual Harassment at workplace in line with the requirement of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committees have been set up to redress complaints received regarding sexual harassment. The Company has received two complaints during the year under the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 and the same were resolved. The Company has organized 2 workshops under the said Act during the year.
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, 2019 and the date of the Boardâs Report.
Change in nature of business
No changes have been made in nature of business carried out by the Company during the financial year 2018-19.
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. and various departments of both State and Central Governments.
For and on behalf of the Board of Directors,
For Cera Sanitaryware Limited
Ahmedabad. Vikram Somany
14th May, 2019 Chairman and Managing Director
(DIN:00048827)
Mar 31, 2018
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, 2018.
Performance
The summary of your Companyâs financial performance is given below:
(Rs. in Lakhs)
|
Year ended March 31, 2018 |
Year ended March 31,2017 |
||
|
Profit before Depreciation and Taxes & Exceptional item |
17679.44 |
17656.61 |
|
|
Deducting there from Depreciation of 2235.76 |
1811.95 |
||
|
Profit before Tax |
15443.68 |
15844.66 |
|
|
Deducting there from taxes of: |
|||
|
- Current Year |
5009.99 |
5143.71 |
|
|
- Defe rred Tax |
408.54 |
303.55 |
|
|
Profit for the year |
10025.15 |
10397.40 |
|
|
Add/Less: Other comprehensive Income (Net of tax) |
(90.21) |
(115.01) |
|
|
Total Comprehensive Income for th e year. |
9934.94 |
1 0282.39 |
|
Transfer to Reserves
The Company has transferred a sum of Rs.5857.61 Lakhs to General Reserve in the current year (previous year Rs.6359.68 Lakhs).
Highlights / Performance of the Company
Turnover (Net ofGST/Excise) of the Company for the year increased by 17% to Rs.117808.72 Lakhs as compared to Rs.10091 7.03 Lakhs previous year.
The Directors are pleased to inform you that your Company has continued to grow in 2017-18 due to the aggressive sales and marketing efforts combined with new product launches and improved product quality with induction of new technology in the production process.
Sanitaryware Unit
During the year, the plant had run at its optimum capacity. The focus of your Company now has shifted towards premiumization by producing more of high value items thus maximizing its optimum capacity.
Your company has been constantly upgrading its technology for continuous improvement in productivity and quality. 3D printing machines are helping your Company launch new designs from concept in a matter of weeks. The robotic glazing machines help evenness of glaze and also saving in wastage of glaze.
Faucetsware Unit
In the Faucetware plant too, technology upgradation has been helping your Company in productivity and quality. During the year
Zamacplantfor manufacturing ofZamachandles has commissioned and commercial production commenced which has helped the Company to stop imports.
Continuous launch of new designs has helped yourcompany garner largermarket share. 3Dprinting, robotic grinding and polishing, low pressure die casting, automated chrome plating, etc. are helping your Company in providing quality products.
Bathware Unit
Your Company has launched new ranges ofwellness, kitchen sinks and mirrors, which have been well accepted in the market.
Senator by CERA
Your Company recently launched a new brand, SENATOR by CERA aimed at premium segment and the response of SENATOR range was overwhelming.
JEET
Your Com pany also launched JEET, sanitaryware range aimed at affordable segment, which is growing very fast.
ISVEA
The Italian luxury designer Sanitaryware, ISVEA, launched by CERA has now gained momentum in the market.
Tiles Unit
Your Company continues to strengthen its market reach in tiles. Apart from South India through JVwithAnjani Tiles Limited, Company spread its wings in a good way in North, West and East too.
The launch of new exclusive design collection, conceived by the design team, was a success which helped CERA establish as a front runner in tiles.
CERA Home Upgrage
CERA home upgrade has added new products like construction chemicals, which are gaining grounds.
Joint Ventures
Your company has entered into a Joint Venture with Anjani Tiles Limited at Andhra Pradesh with 51% Equity and 54% Preference Share holding in aggregate amounting to Rs.2933 Lakhs (Previous YearRs.2678 Lakhs) for producing Vitrified FloorTiles of 10000 Sq. Mtr. per day. The commercial production of tiles from this plant has started from 1st April, 2016.
Packaging Unit
The Joint Venture unit for manufacture of corrugated boxes has been doing well. The capacity utilization has increased considerably during the year. CERA holds an equity of 51%.
Dubai & Sharjah operations
Company has started showroom in Dubai at main Sanitaryware market to have sale and display of companyâs products. In addition to this company has opened warehousing facility at Sharjah to cater UAE market and appointed dealers having CERA display gallery. The operations at Dubai & Sharjah are taking shape.
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 company has installed and commissioned one more M.W Solar Energy unit during the year. Thus the installed capacity of Non-Conventional Energy unit of the Company now stands to 13.825 M.W.
The non-conventional Wind and Solar Power has produced 1 78.06 lakhs KWH for captive use.
Conservation of energy, technology absorption and foreign exchange earnings and outgo:
Conservation of energy
The Company has two sources of its main energy, viz. Natural Gas - GAIL and Sabarmati Gas Ltd., for operating its sanitaryware plant. The pricing and quantity of the gas are based on the availability, international pricing and the contract into with these suppliers by the company. For energy conservation, the company has installed fuel efficient burners to control gas consumption and in addition to this, every effort is done to adapt any technological developments in energy conservation by the Company.
The second energy, viz. electricity, required for running the machineries, is supplied by the local Discom. To compensate within the energy consumption byway electricity, your company has set up Wind Turbines of 11.825 MW and 2.00 MW Solar Plant which generates about 90% of the requirements and gets offset against monthly consumption of the 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, 201 3 read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as a separate Annexure- III.
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. The company has also another subsidiary LLP viz. Packcart Packaging LLP. There are no associate companies within the meaning of Section 2(6) of the Companies Act, 201 3 (âActâ). Furtherthere has been no material change inthe nature ofbusiness of the subsidiary.
The Company does not have any material subsidiary. The Policy on Material Subsidiary framed by the Board of Directors of the Company is available on Companyâs website at the link https:// www.cera-india.com/corporate/policy-for-determining-material-subsidiary/.
Those Shareholders who are interested in obtaining a copy of the audited annual accounts of the subsidiary may write to the Company.
In terms of provisions of sub section (3) of Section 129 of the Act, the salient features of the financial statement of the Subsidiary Company is set out inthe prescribed form AOC -1 attached herewith as a separate Annexure - IV to this Annual Report.
Particulars of contracts or arrangements with related parties
All transactions entered with Related parties as defined under the Companies Act, 2013and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 duringthe financial year were in the ordinary course of business and on an armâs length basis.
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 Companyâs website i.e. www.cera-india.com.
The particulars of contracts orarrangement with related parties as per Section 188(1) of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 including armâs length transactions, if any, as per Form No. AOC - 2 are enclosed as separate Annexure -V.
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 notonly 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 policyfor 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 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as a separate Annexure -VI.
Directors âResponsibility 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 31st March, 2018 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 - VII.
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 -VIII.
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 Companyâs 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 Practicing Company Secretaryâs Certificate on its compliance and Management discussion and Analysis have been included in this Annual Report as per separate Annexure - X and Annexure - I respectively.
Business Responsibility Reporting
As required under Regulation 34(2)(f) ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, Business Responsibility Report forms part of the Directorsâ Report and is enclosed as separate Annexure - XI.
Number of Meetings of the Board
The Board of Directors, during the financial year 2017-18 duly met 4 times on 04-05-2017, 30-08-2017, 02-11-2017 and 01-02-2018 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 - IX.
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 Companyâs process and policies for determining risk tolerance and review managementâs measurement and comparison of overall risk tolerance to established levels. Majorrisks 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 -1 to this report.
Audit Committee
The Company has constituted Audit Committee. For details please refer Corporate Governance Report attached as a separate Annexure - X.
Internal Control System and its adequacy
The Company has internal control system commensurate withthe 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 recommended a dividend ofRs.1 2/- per share (240%) (Previous year Rs.12/- per share (240%) on 1,30,05,874 equity shares ofRs.5/-each fully paid for the year ended 31st March, 2018, to be paid subject to the approval of the members at the ensuing Annual General Meeting.
During the year, the unclaimed dividend pertaining to the financial year ending 2009-10 were transferred to the Investor Education and Protection Fund.
Share Capital
The paid-up Equity Share Capital as on 31st March, 2017 was Rs.650.29 lakhs. During the year under review the Company has not issued any shares.
No shares with differential voting rights, stock or sweat equity shares were issued by the Company during the year under review.
During the year the company has transferred 42,473 Equity Shares to Investor Education and Protection Fund, pursuant to the provisions of Section 124 & 125 of the Companies Act, 2013 and Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016.
Exchequer
The Company has contributed Rs.181 31.00 Lakhs to the exchequer by way of GST, 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. During the year unclaimed deposits of Rs.1.34 lakhs have been transferred with accrued interest to âInvestor Education and Protection fundâ in July-201 7.
The Company has not accepted fixed deposit from the public falling within the ambit of Section 73 of the Companies Act, 201 3 and The Companies (Acceptance of Deposits) Rules, 2014. There have been no defaults in repayments of deposits or payment of interest thereon during the year.
Finance
During the year under review, the Company has repaid loans of Rs.533.53 Lakhs to Financial Institutions and Banks.
Directors
Members at the Annual General Meeting held on22nd August, 2014 have appointed 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. Similarly, Shri J.K. Taparia was appointed as Independent Director at Annual General Meeting held on 27th July, 2017 to hold office for five consecutive years upto 31st March, 2022 (they will not retire by rotation). Shri Sajan Kumar Pasari and Shri Lalit Kumar Bohan ia are proposed to be re-appointed as Independe nt Directors for further term of Five years at the ensuing AGM.
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 and under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and there has been no change in the circumstances which may affect their status as Independent director during the year under review. 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.
Shri Ayush Bagla (DIN: 01211591) and Shri Surendra Singh Baid (DIN: 02736988) were appointed as Additional Directors (Independent) on the Board of the Company w.e.f. 18th April, 2018 to hold office upto the ensuing Annual General Meeting. ShriAyush Bagla and Shri Surendra Singh Baid are proposed to beappointed as Ind epend ent Di rectors for five consecutive yea rs at the ensuing Annual General Meeting of the Company.
Shri Govindbhai P. Patel has resigned as Director of the Company w.e.f. 18th April, 2018and Dr. K.N. Maiti has ceased to be a director due to his death on 14th December, 2017. Your directors wish to place on record their appreciation for the contributions made by them to the company.
Smt. Deepshikha Khaitan (DIN: 03365068) is due to retire at the end of the ensuing Annual General Meeting and being eligible, offers herself for re-appointment.
Brief resumes of the Directors who are proposed to be appointed/ reappointed at the ensuring Annual General meeting, 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.
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 and Key Managerial Personnel, onthe basis of attendance, contribution and various criteria as recommended by the Nomination and Remuneration Committee of the Company.
The performance of each of the Independent Director and NonIndependent Director(including the chairperson) was also evaluated by the Independent Directors at the separate meeting 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 Companyâs business.
- Positive attributes of Independent Directors
An independent director shall be a person of integrity, who possesses knowledge, qualifications, experience, expertise in any specific area of business, 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, expertise in any area of business, 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, 201 3 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 personas 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(s) and non-executive directors) are attached as a separate Annexure - X to this Report.
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 -X to this Report.
Auditors and their Observations
N.M. Nagri &Co., Chartered Accountants are the statutory auditors of the com pany. They are appointed for a period of five years, from the conclusion of 19th AGM till the conclusion of the 24th AGM (AGM of Financial year 2021-22).
The Auditorsâ Report and Secretarial Audit Report to the members for the fin ancial ye ar un de r 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 Aud itors
The Company has appointed K.G.Goyal & Co., as Cost Auditors for conducting cost audit for the year 201 8-19.
Secretarial Audit
Pursuant to provisions of Section 204 of Companies Act, 2013 and rules made there under, the Company has appointed Umesh Parikh & Associates, Practicing Company Secretaries to undertake the Secretarial Audit of the Company for the year 2018-19.
The Secretarial Audit Report for the year 201 7-18given by Umesh Parikh & Associates, Company Secretaries in practice is annexed with this report.
The Company is complying with the applicable Secretarial Standards.
Insurance
Your Company has adequately insured all its properties including Plant and Machinery, Building and Stocks.
Industrial Relations
The Company has successfully signed a Long-Term Settlement (LTS) under section 12(3) of ID Act, 1947, for 4 years with workers Union on 4th August, 2017 which was due on 01st September, 2017. The LTS was signed in harmonious environment and without any labour unrest and loss of production. The next LTS will fall due on 01st September,2021.
The industrial relations in the companyâs plant had been cordial and peaceful throughout the year.
The Company has adequate skilled & trained work force for its various areas of operations and the skills upgradation of which is being done on continuous basis for improving the plant operations and quality process.
The Company has taken sufficient measures to maintain Industrial Health and Safety at its workplace for employees as laid in the Gujarat State Factories Rules, 1963. The Company is also complying and maintaining all applicable Industrial and Labour laws /rules. The Company has received nil complaint during the year under The Sexual Harassment of Women at workplace Act,1913.
The Company has organised two 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, 2018 and the date of the Boardâs Report.
Change in nature of business
No changes have been made in nature of business carried out by the Company during the financial year 2017-18.
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 -X.
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 and various departments of both State and Central Governments.
For and on behalf of the Board of Directors,
Ahmedabad. Vikram Somany
3rd May, 2018 Chairman and Managing Director
Mar 31, 2017
To
Directors Report
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, 2017.
Performance
The summary of your Company''s financial performance is given below:
(Rs, in lacs)
|
Year ended March 31, 2017 |
Year ended March 31, 2016 |
|
|
Profit before Depreciation and Taxes & Exceptional item |
17393.58 |
14578.40 |
|
Deducting there from Depreciation of |
1811.86 |
1631.98 |
|
Profit before Tax |
15581.72 |
12946.42 |
|
Deducting there from taxes of: |
||
|
- Current Year |
5318.23 |
3943.12 |
|
- Deferred Tax |
131.77 |
656.88 |
|
Profit after Tax |
10131.72 |
8346.42 |
|
Add: Balance brought forward from previous year |
8000.00 |
5000.00 |
|
Amount available for Appropriations |
18131.72 |
13346.42 |
|
The proposed appropriations are: |
||
|
1. Proposed Dividend |
- |
1170.53 |
|
2. Tax on Proposed Dividend |
- |
244.67 |
|
Add : Tax on Dividend - |
||
|
Excess Provision |
6.38 |
- |
|
3. General Reserve |
- |
3931.22 |
|
4. Balance carried forward |
18131.72 |
8000.00 |
|
Total |
18138.10 |
13346.42 |
Transfer to Reserves
The Company has not transferred any amount to General Reserve in the current year (previous year Rs, 3931.22 Lacs) in compliance with Revised AS-4 effective financial year 2016-17.
Highlights / Performance of the Company
Turnover of the Company for the year increased by 10% to Rs, 1009.17 Cr as compared to Rs, 917.24 Cr previous year.
Profit before tax for the year increased by 20% to Rs, 155.82 Cr as compared to Rs, 129.46 Cr previous year.
Profit after tax for the year increased by 21% to Rs, 101.32 Cr as compared to Rs, 83.46 Cr previous year.
The Directors are pleased to inform you that your Company has continued to grow in 2016-17 due to brand CERA''s increasing popularity and customer preference, backed by distribution strength, product quality, brand equity and after-sales service.
Sanitary ware Unit
During the year, the plant had run at its optimum capacity. The focus of your Company now is shifting towards premiumization by producing more of high value items like one-piece WCs, etc., thus maximizing its optimum capacity.
Your company has been constantly upgrading its technology for continuous improvement in productivity and quality.
Faucets ware Unit
In the Faucet ware plant too, technology up gradation has been helping your company in productivity and quality.
Several new ranges of faucets were conceived and launched in the market, which are now helping in driving the sales.
Bath ware Unit
Your Company has continued to market wellness range, consisting of shower panels, shower rooms, steam cubicles and whirlpools, and products like kitchen sinks and mirrors.
Tiles Unit
Your Company continued to spread its market reach in tiles. The JV with Anjani Tiles Limited has further strengthened its market penetration in South.
CERA Home Upgrade
Your Company expects that the renovation of bathrooms would go up in the coming years. To tap this growing business vertical, your Company has commenced CERA Home Upgrade in select cities of Ahmedabad, Mumbai, Pune and Bengaluru. It would be expanded to more cities.
Joint Ventures
Your company has entered into a Joint Venture with Anjani Tiles Limited at Andhra Pradesh with 51% Equity and 54% Preference Share holding in aggregate amounting to '' 26.78 Cr. (Previous Year '' 19.64 Cr.) for producing Vitrified Floor Tiles of 10000 Sq. Mtr. per day. 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 2,16,11,931 KWH for captive use against 2,03,46,390 KWH in the previous year.
Packaging Unit
Your Company has entered into Joint Venture for packaging unit for manufacture of corrugated boxes with an equity of 51%.
Dubai & Sharjah operations
Company has started Showroom in Dubai at main Sanitaryware market to have sale and display of Company''s products. In addition to this Company has opened warehousing facility at Sharjah to cater UAE market and appointed dealers having CERA display gallery.
Conservation of energy, technology absorption and foreign exchange earnings and outgo
Conservation of energy
The Company has two sources of its main energy, viz. Natural Gas
â GAIL and Sabarmati Gas Ltd., for operating its sanitary ware plant. The pricing and quantity of the gas are based on the availability, international pricing and the contract into with these suppliers by the company. For energy conservation, the company has installed fuel efficient burners to control gas consumption and in addition to this, every effort is done to adapt any technological developments in energy conservation by the company.
The second energy, viz. electricity, required for running the machineries, is supplied by the local Discom. To compensate within the energy consumption by way of electricity, your Company has set up Wind Turbines of 11.825 MW and 1.00 MW Solar Plant which generates about 90% of the requirements and it is being offset against monthly consumption of the 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
Anjani Tiles Limited 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 (âActâ). Further there has been no material change in the nature of business of the subsidiary.
The Company does not have any material subsidiary. The Policy on Material Subsidiary framed by the Board of Directors of the Company is available on Company''s website at the link https:// www.cera-india.com/corporate/policy-for-determining-material-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 subsidiary Company is set out in the prescribed form AOC - 1 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.
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 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as a separate Annexure - IV.
Directorsâ 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, 2017 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.
Number of Meetings of the Board
The Board of Directors, during the financial year 2016-17 duly met
5 times on 03.05.2016, 12.07.2016, 29.07.2016, 13.10.2016 and 07.02.2017 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.
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 included in this Annual Report as per separate annexure -VIII and annexure -A respectively.
Business Responsibility Reporting
As required under Regulation 34(2)(F) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, Business Responsibility Report forms part of the Directors'' Report and is enclosed as separate Annexure IX.
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 managements 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, 12/- per share (240%) (Previous year Rs, 9/- per share (180%) on 1,30,05,874 equity shares of Rs, 5/- each fully paid for the year ended 31.03.2017, 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 2008-09 were transferred to the Investor Education and Protection Fund.
Share Capital
The paid up Equity Share Capital as on 31st March, 2017 was Rs, 650.29 Lacs. During the year under review the Company has not issued any equity shares. As on 31st March, 2017 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, 166.65 Cr. 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 2017 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 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 and under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and there has been no change in the circumstances which may affect their status as Independent director during the year under review. 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.
Shri Jugal Kishore Taparia (DIN 07509049) was appointed as Additional Director (Independent) on the Board of the Company w.e.f. 29th July, 2016 to hold office up to the ensuing Annual General Meeting. Shri Jugal Kishore Taparia is proposed to be appointed as Independent Director for five consecutive years at the ensuing Annual General Meeting of the Company.
Shri Atul Sanghvi (DIN 00045903) is due to retire at the end of the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Shri Ashok Chhajed ceased to be a director of the company w.e.f. 23.04.2016 on his resignation.
The Board of Directors has re-appointed Shri Atul Sanghvi as Executive Director for a period of three years w.e.f. 01.04.2017 and Shri Vikram Somany as Chairman and Managing Director for five years w.e.f. 01.07.2017.
Brief resumes of the Directors who are proposed to be appointed/ reappointed at the ensuring Annual General meeting, 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.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Rules made there under, Schedule - IV of the Act and SEBI (LODR) Regulations, 2015, the Board has carried the evaluation of its own performance, individual Directors, its Committees and Key Managerial Personnel, 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 specific area of business, 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, expertise in any area of business, 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(s) 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 the ensuing Annual General Meeting.
As per second proviso to Section 139(2) of the Companies Act, 2013 (âthe Act''), a transition period of three years from the commencement of the Companies Act,2013, is provided to appoint a new auditor, when the existing Auditor''s firm has completed terms of Five consecutive years. Accordingly, the existing Auditors H.V. Vasa & Co has completed term of five consecutive years and as per the said requirements of the Act, N.M. Nagri & Co., Chartered Accountants are proposed to be appointed as auditors from the conclusion of 19th AGM till the conclusion of the 24th AGM (AGM of Financial year 2021-22), subject to ratification by members every year, as may be applicable.
The Audit Committee and the Board of Directors recommend the appointment of N.M. Nagri & Co., Chartered Accountants, as statutory auditors of the Company from the conclusion of the 19th AGM till the conclusion of 24th AGM, to the shareholders.
The Auditors'' Report and Secretarial Audit Report to the members for the financial year under review does not contain any qualification, reservation or adverse remark 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 2017-18.
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 2017-18.
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, 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. 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, 2017 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 2016-17.
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 and various departments of both State and Central Governments.
For and on behalf of the Board of Directors,
Ahmadabad. Vikram Somany
4th May, 2017 Chairman and Managing Director
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 Â
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 Â
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 ÂV.
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
Mar 31, 2011
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, 2011.
Performance
The summary of your CompanyÃs financial performance is given below:
(Rs. in lacs)
Year ended Year ended
March 31, March 31,
2011 2010
Profit before Depreciation and
Taxes & Exceptional item 4805.18 3600.02
Deducting there from Depreciation of 653.03 610.30
Profit before Tax 4152.15 2989.72
Deducting there from taxes of:
Current Tax 1432.03 1075.79
Deferred Tax 66.04 (47.18)
Profit after Tax 2654.08 1961.11
Add: Balance brought forward from
previous year 900.00 800.00
Amount available for Appropriations 3554.08 2761.11
The proposed appropriations are:
1. Proposed Dividend 316.37 157.25
2. Tax on Proposed Dividend 51.32 26.72
3. General Reserve 2086.39 1677.14
4. Balance carried forward 1100.00 900.00
Total 3554.08 2761.11
Your Company has continued to grow substantially due to brand building
and distribution initiatives. We are also supported by a buoyant
construction industry.
The well-entrenched distribution network of your Company is getting a
boost by opening of CERA Bath Galleries in different towns. This helps
CERA get high visibility and top of mind recall among influencers and
institutional buyers.
Sanitaryware Unit
Your Company is expanding its production capacity, to meet the
increasing demand. When the expansion is completed, the production
capacity will go up to 2.7 million pieces per annum from 2.0 million
pieces.
Faucetware Unit
Your CompanyÃs 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 C N C machines shall be installed, which will enable 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 low in the year at
43,81,473 KWH against 56,76,843 KWH in the previous year due to Low
wind, Heavy rain and natural disturbances in Kutch & Saurashtra area in
Gujarat where these Wind Turbine Generators are situated. The installed
capacity of wind power unit of the company is 4.975 M.W.
(h) Employees Stock Option Scheme
Puursuant 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).
Accordingly, NIL (previous year NIL) options were granted to the
eligible employees during the year under review. During the year NIL
(previous year 59,022) options were vested with the eligible employees
and 6,427 (Previous Year 60,471) options were lapsed due to non
exercise by employees. Further, during the year 37,615 (Previous Year
78,958) options were exercised and equal number of equity shares have
been issued towards second & third trenches under the scheme.
Details required to be provided pursuant to clause 12 of the Securities
and Exchange Board of India (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999 are set out in Annexure to this
Report.
Corporate Governance
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, Report on Corporate Governance along with the AuditorsÃ
statement on its compliance has been included in this Annual Report as
a separate section.
Directorsà 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, 2011 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.
Bonus Shares
With the approval of the members at last Annual General Meeting your
directors have issued Bonus shares in the proportion of 1 (one) Bonus
Share of Rs. 5/- each for every existing 1 (one) fully paid equity
share on 06.09.2010. The said Bonus Shares have been listed at BSE &
NSE.
Dividend
Your Directors recommend a dividend of Rs. 2.50 per share (50%)
(Previous year Rs. 2.50 per share (50%)) on 1,26,54,874 enhanced equity
shares (Previous year 62,89,822 equity shares) of Rs.5/- each fully
paid for the year ended 31.03.2011, 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. 45.49 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 31.03.2011 were
Rs.16.28 lacs. There were 11 Fixed Deposit holders with Rs. 3.43 Lacs
of unclaimed / unrenewed deposits as on 31.03.2011. 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. 3904.49 lacs.
Finance
During the year under review, the Company repaid loans of Rs.998.08
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 Directorsà Report for the year ended 31 st
March, 2011 is annexed.
Directors
Shri Govindbhai P. Patel was appointed as Additional Director w.e.f.
16-07-2010.
Shri Shree Narayan Mohata and Shri Ashok Chhajed are due to retire at
the end of ensuing Annual General Meeting and being eligible offered
themselves for reappointment.
Shri Vikram Somany and Shri Vidush Somany have been re-appointed as
Chairman and Managing Director & Executive Director respectively w.e.f.
01-07-2011 for the period of three years.
Brief resumes of Shri Shree Narayan Mohata, Shri Ashok Chhajed, Shri
Vikram Somany and Shri Vidush Somany, 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 CompanyÃs 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 Limited, Yes Bank Ltd and various departments of both State and
Central Governments.
For and on behalf of the Board of Directors,
Vikram Somany
Chairman and Managing Director
Kolkata
21st July, 2011
Mar 31, 2010
The Directors have pleasure in submitting the Annual Report together
with the Statement of Accounts of your Company for the year ended 31st
March, 2010.
Performance
The summary of your Companys financial performance is given below:
(Rs. in lacs)
Yearended Year ended
March 31,2010 March 31, 2009
Profit before Depreciation and
Taxes & Exceptional item 3600.02 2746.39
Deducting there from Depreciation 610.30 592.81
Profit before tax & Exceptional Item 2989.72 2153.58
Less: Exceptional Item - 163.20
Profit before Tax 2989.72 1990.38
Deducting there from taxes of:
- Current Tax 1075.79 508.05
- Fringe Benefit Tax - 31.69
- Deferred Tax (47.18) 139.79
Profit after Tax 1961.11 1310.85
Add: Balance brought forward from
previous year 800.00 600.00
Amount available for Appropriations 2761.11 1910.85
The proposed appropriations are:
1. Proposed Dividend 157.25 124.22
2. Tax on Proposed Dividend 26.72 21.11
3. General Reserve 1677.14 965.52
4. Balance carried forward 900.00 800.00
Total 2761.11 1910.85
Sanitaryware Unit
The recession in the housing construction in India has withered away,
which was evident from the last quarter of the financial year.
However, for your Company, like the previous financial year, when the
global recession was at its peak, the sales were well-insulated from
the slowdown, thanks to its quality, brand image, well-entrenched
distribution network and preference by a large number of builders.
This trend is apparent from the healthy growth in both the topline and
bottomline achieved by your Company. Buoyed by the changing market
scenario, your company is embarking on an expansion plan to increase
the sanitaryware production capacity from the current 2 million pieces
to 2.7 million pieces. This will entail addition a new fuel saving kiln
and installation of high-productivity pressure-casting system, and two
shuttle kilns. Your company is also Planning, construction of New
fireclay plant to produce large washbasins which otherwise cannot be
produced using ordinary raw materials.
Faucetware Unit
Your Company has already been marketing faucets during the p; few
years. After successful test marketing, now your Company entering
full-fledged manufacturing of faucets. The construction the plant is
underway in Kadi, adjacent to the existing sanitarywa plant. Soon, Cera
faucets will roll out from its own plant fro September 2010 with
initial capacity of 2500 pieces per day. Furth< this capacity will be
doubled to 5000 pieces a day in near future.
Bathware Unit
Your Company continues to market, under the brand name Cer imported
products like shower cubicles, shower panels, steal cubicles in
addition to sanitaryware. This has helped your Compar grow at a fast
pace.
Novellini
Your Company has made a strategic marketing alliance wit European
wellness leader, Novellini SpA of Italy to import and se their shower
products, consisting of steam cubicles, massage bat tubs, equipped
panels, shower cubicles, etc. in India. Novellini wi do the marketing,
while your Company will be responsible for logistic and sales
operations.
Power Unit
The non-conventional wind power generation in the year wa; 56,76,843
KWH against 59,65,534 KWH in the previous year. The installed capacity
of wind power unit of the company is 4.975 M.W.
Management Discussion and Analysis Report
(a) industry Structure and Developments
The 50-year old, Rs.1,600 crore sanitaryware industry in India has
evolved over a period of time. There are different sector now, as
compared to the previous era, when there were only two segmentsÃthe
organized and the unorganized sector. Now apart from these, there are
foreign players who were earlier importing and selling in India and
have now set up their own manufacturing facilities. Apart from this,
there are some brands which stiil continue to market their products in
India through imports. There is also large scale imports from china
sold by retailers.
However, since your Company has been investing, since its launch, in
brand building, CERA has been able to grow and prosper despite the
turbulence the industry has been going through.
Your Company has also expanded its brand presence to other related
categories like showers, faucets, PVC cistern - seat cover, etc. to
capitalize on the strength of the brand and also to accelerate your
Companys growth.
(b) Opportunities and Threats
The housing construction is on a recovery mode in India from the past
slowdown. This is an excellent opportunity for your Company to grow.
Though there are threats from foreign brands, CERAs brand equities and
service parameters makes it a tough competition.
(c) Outlook
Your Company has a strong brand equity and loyal distribution network.
Your Company has been making all out efforts
consistently increase the visibility of the brand and product even in
smaller towns, where there is huge untapped potential.
Your Company is also fortifying its relationship with housing
developers. Thus we are confident of increasing the growth rate in the
coming years.
The continuous efforts to improve quality and productivity have put
your company on par with global standards. The past innovations of the
Company, like one-piece WCs and water- saving twin-flush cisterns have
today become industry norms.
Your Companys growth continues to be much above the industry growth,
year after year, which is testimony to its product quality and
marketing success.
The successful display centre concept of your company, introduced
through Cera Bath Studios in several cities, is now being extended in
the form of Cera Bath Galleries with its retail partners.
(d) Risks and Concerns
Any drastic change in the Government Policy may affect the sanitaryware
manufacturers.
(e) Internal Control Systems and their adequacy
The Company has adequate system of internal control relating to the
purchase of stores, raw materials, plant & machineries, equipments and
various components and for the sale of goods commensurate with the size
of the Company and the nature of business.
The system of internal control of the Company is adequate keeping in
mind the size and complexity of your Companys business. Systems are
regularly reviewed to ensure effectiveness.
(f) Financial performance with respect to operational performance is
discussed in the main part of the Report.
(g) Material Developments in Human Resources / Industrial Relations
Faced with the shortage of quality manpower, the thrust of your Company
has been on talent improvement through training programmes.
Your Company continues to invest in training and development of its
employees and has been organizing various training programmes from time
to time.
(h) 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).
Accordingly, NIL (previous year NIL) options were granted to the
eligible employees during the year under review. During the year 59,022
(previous year 75,060) options were vested with the eligible employees
and 60.471 options were lapsed due to non exercise by employees.
Further, during the year 78,958 options were exercised and equal number
of equity shares have been issued towards second & third trench under
the scheme.
Details required to be provided pursuant to clause 12 of the Securities
and Exchange Board of India (Employees Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999 are set out in Annexure to this
Report.
Corporate Governance
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, Report on Corporate Governance along with the Auditors
statement on its compliance has 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, 2010 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.
Bonus Shares
Your directors are pleased to recommend, subject to the approval of
members at the General Meeting, issue of Bonus shares in the proportion
of 1 (one) Bonus Share of Rs. 5/- each for every existing 1 (one) fully
paid equity share of Rs. 5/- each held by the members on the "Record
Date".
Dividend
Your Directors recommend a dividend of 50% (Rs. 2.50 per share)
(Previous year 40%, Rs. 2.00 per share) on 62,89.822 (Previous year
62,10,864) Equity Shares of Rs. 5/- each fully paid for the year ended
31.03.2010, 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. 35.11 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 31.03.2010 was
Rs.18.10 lacs. There were 12 Fixed Deposit holders with Rs. 4.11
Lacs of unclaimed / unrenewed deposits as on 31.03.2010. 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. 2,987.95 lacs.
Finance
During the year under review, the Company repaid loans of Rs.577.25
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, 2010 is annexed.
Directors
Shri S.K. Nema has resigned as Director and whole-time Director w.e.f.
26-06-2009. Shri S.A.Trivedi was appointed as Additional Director
w.e.f. 26-06-2009 and resigned w.e.f. 19-04-2010. Dr. Abraham Koshy
has resigned as Director w.e.f. 19-04-2010. Your Board of Directors
places on record its appreciation for the contribution made by them to
the company.
Shri Mahendra Kumar Bhandari has been appointed as Additional Director
and Director -Technical w.e.f. 19-04-2010.
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 reappointment.
Brief resumes of Shri Mahendra Kumar Bhandari, 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 Companys 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 Limited, and various departments of both State and Central
Governments.
For and on behalf of the Board of Directors,
Kadi Vikram Somany
16th July, 2010 Chairman-cum-Managing Director
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