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Notes to Accounts of Cera Sanitaryware Ltd.

Mar 31, 2016

1. Transfer of Ceramic Division from Madhusudan Industries Limited (MIL)

The Honourable High Court of Judicature at Gujarat vide its order dated 30.10.2001 has sanctioned the Scheme of Arrangement (the Scheme) U/s. 391-394 of the Companies Act, 1956 between Madhusudan Industries Limited ("MIL") and the Company under which all the assets, liabilities and debts of the Ceramic Division as defined in the Scheme ("the Undertaking") of "MIL" comprising of Ceramic Division have been transferred to the Company at net book value with effect from 01.04.2001.

The Name of the Company had been changed from Madhusudan Oils And Fats Limited to Cera Sanitaryware Limited with effect from 01-11-2002 consequent upon the fresh certificate of Incorporation, issued by the Registrar of Companies, Gujarat State, Ahmedabad.

2. The Company is receiving balance confirmations from various parties. Due adjustments will be made on receipt thereof, if necessary.

3. Lease of an asset whereby the lessor essentially remains the owner of the asset is classified as operating lease. The payments made by the company as Lessee in accordance with operational leasing contracts or rental agreements are expensed proportionally during the lease or rental period respectively. These are generally cancellable and are renewable by mutual consent on mutually agreed terms.

4. Employee Benefits

The Company in pursuance to Accounting Standard 15, Employee Benefits (revised 2005) [''the revised AS 15''], notified under sub- section (3C) of section 211 of the Companies Act,1956 obtained acturial reports and based on these reports, following disclosures have been made in the financial statements for the year ended 31st March, 2016.

1) Brief description of the plans :

The Company has various schemes for long-term benefits such as Provident Fund, Gratuity and Leave Encashment. In case of funded schemes, the funds are recognised by income tax authorities and administered through trustees/appropriate authorities.

The Company''s defined contribution plans are Provident Fund (exempted employees) recognised by the Income Tax Authorities and administered through trustees. The Company has no further obligation beyond making contributions and interest shortfall. Further the pattern of investment for investible funds is as prescribed by the Government. Accordingly other related disclosures in respect of Provident Fund have not been made.

The Company''s contribution plans are Provident Fund (non exempted employees), Employees'' pension scheme (under the Provisions of the Employees'' Provident Funds and Miscellaneous Provisions Act,1952), state Employees'' plans namely Employees'' State Insurance Fund. The Company has no further obligation beyond making contributions.

The Company''s defined benefit plans also include Gratuity and leave Encashment for all its employees. Gratuity fund recognised by the Income Tax Authorities is administered through trustees. Liability for Defined Benefit Plan is provided on the basis of valuations, as at Balance sheet date, carried out by an independent actuary. The actuarial valuation method used by independent actuary for measuring the liability is the projected unit credit method.

2) The Company has provided upto 31.03.2016 Rs. 614.42 Lacs (Rs. 510.65 Lacs) being increment of discounted value of liability for unavailed leave of the employees determined as per Acturial Valuation.

5. The Company is to apply 2% of average net profits towards Corporate Social Responsibilty (CSR) as per section 135 of the Companies Act, 2013. The Company has utilised during the year 2015-16 Rs. 165.81 Lacs (previous year Rs. 87.89 Lacs) for CSR activities.

6. a) The Company has entered into Joint Venture through a Subsidiary Company, Anjani Tiles Limited, incorporated under the Companies Act, 2013 into tiles manufacturing business in Andhra Pradesh. The estimated project cost is Rs. 68 crores. Anjani Tiles Limited has commenced manufacturing tiles from 1st April, 2016. CERA has invested Rs. 5.10 crores by taking 51,00,000 Equity Shares and Rs. 14.54 crores in 1% Cummulative Redeemable Preference Shares of Rs. 10/- each.

b) The Company has entered into a Memorandum of Understanding with foreign partners to invest and participate in Joint Venture to expand company''s business in UAE. Company has joined with 25% share in "Cera Sanitaryware Trading LLC", a limited liability Company in UAE - Dubai, on 21st December, 2015 for Tiles, Flooring materials and Sanitaryware trading.

c) The Company has entered into a Memorandum of Understanding with foreign partners to invest and participate in Joint Venture to expand company''s business in Sharjah. Company has joined with 50% share in "Cera Sanitaryware Limited FZC", a limited liability Company at Hamriyah Free Zone Authority of Government of Sharjah for Tiles, Flooring materials and Sanitaryware trading.

7. Significant accounting policies and practices adopted by the Company are disclosed in the statement annexed to these financial statement as Annexure - I.


Mar 31, 2014

1. Transfer of Ceramic Division from Madhusudan Industries Limited (MIL)

The Honorable High Court of Judicature at Gujarat vide its order dated 30.10.2001 has sanctioned Scheme of Arrangement (the Scheme) U/s. 391 -394 of the Companies Act. 1956 between Madhusudan Industries Limited ("MIL") and the Company under which all the assets, liabilities and debts of the Ceramic Division as defined in (he Scheme {"the Undertaking") of "MIL" comprising of Ceramic Division have been transferred to the Company al net book value with effect from 01.04.2001.

The Name of the Company had been changed from Madhusudan Oils And Fats Limited to Cera Sanitary ware Limited with effect from Of .1 f .2002 consequent upon the fresh certificate of Incorporation, issued by the Registrar of Companies, Gujarat Stale, Ahmadabad.

2. Contingent liability in respect of :

As on As on 31-03-2014 31-03-2013



a. Claims against the Company not acknowledged as debts (Net of Paymenls). 52.11.760 52,11,780

b. Estimated amount of contracts remaining lo be executed on 5,22,80,444 7,13,93,146 capital account not provided for (Net of advance).

c. Letters of Credit opened and guarantees given by the Bank in favour of 7,80,97,241 5,02.32.172 Parties and Government Authorities.

3. The company is receiving balance confirmations from various parties. Due adjustments will be made on receipt thereof, if necessary.

4. Pursuant lo notification dl.3tsl March 2009 (Further amended by Notification date 29lh December2011} issued by the Ministry of Corporate Affairs. the Company had exercised the option available under the newly inserted Paragraph 46A (1) to the AS-11.

The effect of changes in foreign exchange rates is to add/deduct the foreign exchange fluctuation to capital cost of the asset. Accordingly the net foreign exchange fluctuation loss amounting to 7 0.02 Cr. (P Y Loss amounting to T 0.11 Cr.} has been deducted ,'' (added) respectively lo the cost of capital assets.

5. Employee Benefits

The Company in pursuance to Accounting Standard 15, Employee Benefits (revised 2005) |1he revised AS 15''], notified under sub- section (3C) o! section 211 of the companies Act,1956 obtained actuarial reports and based on these reports, (allowing disclosures have been made in the financial statements for the year ended 31st March, 2014.

1) Brief description of the plans :

The Company has various schemes for long-term benefits such as Provident Fund, Gratuity and Leave Encashment. In case of funded schemes, the funds are recognised by income tax authorities and administered through trustees/appropriate authorities.

The Company''s defined contribution plans are Provident Fund (exempted employees) recognised by the Income Tax Authorities and administered through trustees. The company has no further obligation beyond making contributions and interest shortfall. Further the pattern ol investment for inveslible funds is as prescribed by the Government. Accordingly other related disclosures in respect of Provident Fund have not been made.

The Company''s contribution plans are Provident Fund (non exempted employees), Employees'' pension scheme {under the Provisions of the employees'' Provident Funds and Miscellaneous Provisions Act,1952), state plans namely Employee''s State Insurance Fund. The Company has no further obligation beyond making contributions.

The Company''s defined benefit plans also include Gratuity and Leave Encashment for all its employees. Gratuity fund recognised by the Income Tax Authorities is administered through trustees. Liability for Defined Benefit Plan is provided on the basis of valuations, as at Balance sheet date, carried out by an independent actuary. The actuarial valuation method used by independent actual-y for measuring the liability is the projected unit credit method.


Mar 31, 2013

1. Transfer of Ceramic Division from Madhusudan Industries Limited (MIL)

The Honourable High Court of Judicature at Gujarat vide its order dated 30.10.2001 has sanctioned Scheme of Arrangement (the Scheme) U/s. 391-394 of the Companies Act, 1956 between Madhusudan Industries Limited ("MIL") and the Company under which all the assets, liabilities and debts of the Ceramic Division as defined in the Scheme ("the Undertaking") of "MIL" comprising of Ceramic Division have been transferred to the Company at net book value with effect from 01.04.2001.

The Name of the Company had been changed from Madhusudan Oils And Fats Limited to Cera Sanitaryware Limited with effect from 01-11-2002 consequent upon the fresh certificate of Incorporation, issued by the Registrar of Companies, Gujarat State, Ahmedabad.

2. Contingent liability in respect of :

As on As on 31-03-2013 31-03-2012 Rs. Rs.

a. Claims against the Company not acknowledged as debts (Net of Payments). 52,11,780 35,68,274

b. Estimated amount of contracts remaining to be executed on 7,13,93,146 8,65,92,646 capital account not provided for (Net of advance).

c. Letters of Credit opened and guarantees given by the Bank in favour of 5,02,32,172 7,27,09,618 Parties and Government Authorities.

3. The Company is receiving balance confirmations from various parties. Due adjustments will be made on receipt thereof, if necessary.

4. Persuant to notification dt.31st March, 2009 (Further amended by Notification dt. 29 December, 2011) issued by the Ministry of Corporate Affairs, the company had exercised the option available under the newly inserted Paragraph 46A (1) to the AS-11.

The effect of changes in foreign exchange rates is to add/deduct the foreign exchange fluctuation to capital cost of the asset. Accordingly the net foreign exchange fluctuation loss amounting to Rs. 0.11 Cr. (PY Loss amounting to Rs. 0.53 Cr.) has been deducted / (added) respectively to the cost of capital assets.

5. Employee Benefits

The company has with effect from 1st April, 2007, adopted Accounting Standard 15, Employee benefits (revised 2005), issued by the Institute of Chartered Accountants of India.The disclosure required is as under :

1) Brief description of the plans :

The company has various schemes for long-term benefits such as provident fund, gratuity and leave encashment. In case of funded schemes, the funds are recognised by income tax authorities and administered through trustees/appropriate authorities.

The company''s defined contribution plans are Provident Fund (exempted employees) recognised by the Income Tax Authorities and administered through trustees. The company has no further obligation beyond making contributions and interest shortfall. Further the pattern of investment for investible funds is as prescribed by the Government. Accordingly other related disclosures in respect of Provident Fund have not been made.

The company''s contribution plans are Provident Fund (non exempted employees), Employees'' pension scheme (under the Provisions of the employees'' Provident Funds and Miscellneous Provisions Act,1952), state plans namely Employee''s State Insurance Fund. The company has no further obligation beyond making contributions.

The company''s defined benefit plans also include Gratuity and leave Encashment for all its employees. Gratuity fund recognised by the Income Tax Authorities is administered through trustees. Liability for Defined Benefit Plan is provided on the basis of valuations, as at Balance sheet date, carried out by an independent actuary. The actuarial valuation method used by independent actuary for measuring the liability is the projected unit credit method.


Mar 31, 2012

1. Transfer of Ceramic Division from Madhusudan Industries Limited (MIL)

The Honourable High Court of Judicature at Gujarat vide its order dated 30.10.2001 sanctioned Scheme of Arrangement (the Scheme) U/s. 391-394 of the Companies Act, 1956 between Madhusudan Industries Limited ("MIL") and the Company {Madhusudan Oils and Fats Limited) (MOFL)} under which all the assets, liabilities and debts of the Ceramic Division of MIL as defined in the Scheme ("the Undertaking") has been transferred to the Madhusudan Oils and Fats Limited (MOFL) at net book value with effect from 01.04.2001.

The Name of the Company has been subsequently changed from Madhusudan Oils And Fats Limited to Cera Sanitaryware Limited with effect from 01.11.2002 consequent upon the fresh certificate of Incorporation, issued by the Registrar of Companies, Gujarat State, Ahmedabad.

2. Contingent liability in respect of : As at As at 31-03-2012 31-03-2011 Rs. Rs.

a. Claims against the Company not acknowledged as debts (Net of Payments). 35,68,274 1,13,52,708

b. Estimated amount of contracts remaining to be executed on 8,65,92,646 38,51,330 capital account not provided for (Net of advance).

c. Letters of Credit opened and guarantees given by the Bank in favourof 7,27,09,618 2,63,10,744 Parties and Government Authorities.

3. As notified by Ministry of Corporate Affairs, revised Schedule VI under the Companies Act, 1956 is applicable to the financial statements for the financial year commencing on or after 1st April, 2011. Accordingly, the financial statements for the period ended 31st March, 2012 are prepared in accordance with the revised Schedule VI. The amounts and disclosures included in the financial statements of the previous year have been reclassified to conform to the requirements of revised Schedule VI. Figures in brackets relate to previous year.

4. The company has continous practice to obtain balance confirmations from various parties. Due adjustments on reconciliation will be made on receipt thereof, if necessary.

5. Persuant to notification dt. 31st March, 2009 (Further amended by Notification dt. 29th December, 2011) issued by the Ministry of Corporate Affairs, the company had exercised the option available under the newly inserted Paragraph 46A (1) to the AS-11. The effect of changes in foreign exchange rates is to add/deduct the foreign exchange fluctuation to the cost of capital assets.

Accordingly, the net foreign exchange fluctuation loss amounting to Rs. 0.53 Cr. ((P Y Gain amounting to Rs. 0.09 Cr, Gain amounting to Rs. 1.59 Cr in FY 11 & F Y 10 and Loss amounting to Rs. 1.96 Cr. in FY 08 & FY 09 (net of trf. from General Reserve)) has been deducted/(added) respectively to the cost of capital assets.

6. Employee Benefits

The company has with effect from 1st April, 2007, adopted Accounting Standard 15, Employee benefits (revised 2005), issued by the Institute of Chartered Accountants of India. The disclosure required are as under :

1) Brief description of the plans :

The company has various schemes for long-term benefits such as provident fund, gratuity and leave encashment. In case of funded schemes, the funds are recognised by income tax authorities and administered through trustees/appropriate authorities. The company's defined contribution plans are Provident Fund (exempted employees) recognised by the Income Tax Authorities and administered through trustees. Since the company has no further obligation beyond making contributions and interest shortfall.

Further the pattern of investment for investible funds is as prescribed by the Government. Accordingly, the other related disclosures in respect of Provident Fund have not been made.

The company's other defined contribution plans are Provident Fund (non exempted employees), Employees' pension scheme (under the Provisions of the employees' Provident Funds and Miscellaneous Provisions Act,1952), state plans namely Employees' State Insurance Fund, Since company has no further obligation beyond making contributions.

The company's defined benefit plans are Gratuity and Leave Encashment for all its employees. Gratuity fund is recognised by the Income Tax Authorities and is administered through trustees.

Liability for Defined Benefit Plan is provided on the basis of valuations, as at Balance sheet date, carried out by an independent actuary. The actuarial valuation method used by independent actuary for measuring the liability is the projected unit credit method.

(4) The Company has provided upto 31.03.2012 Rs. 244.71 Lacs (Rs. 179.70 Lacs) being increment of discounted value of liability for unavailed leave of the employees determined as per Acturial Valuation.


Mar 31, 2010

1. Transfer of Ceramic Division from Madhusudan Industries Limited (MIL)

The Honourable High Court of Judicature at Gujarat vide its order dated 30.10.2001 has sanctioned Scheme of Arrangement (the Scheme) U/s. 391 -394 of the Companies Act, 1956 between Madhusudan Industries Limited ("MIL") and the Company under which all the assets, liabilities and debts of the Ceramic Division as defined in the Scheme ("the Undertaking") of "MIL" comprising of Ceramic Division have been transferred to the Company at net book value with effect from 01.04.2001.

The Name of the Company has been changed from Madhusudan Oils And Fats Limited to Cera Sanitaryware Limited with effect from 01-11-2002 consequent upon the fresh certificate of Incorporation, issued by the Registrar of Companies, Gujarat State, Ahmedabad.

2. Impairment of Assets

Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the amount may not be recoverable. An impairment loss is recognized for the amount by which the assets carrying amount exceeds its recoverable amount. The recoverable amount is the higher of the assets net selling price and its value in use.

3. Contingent liability in respect of : 31.03.2010 31.03.2009

Rs. Rs. a. Claims against the Company not acknowledged as debts. 35,67,974 52,55,266

b. Estimated amount of contracts remaining to be executed on 11,47,109 - capital account not provided for (Net of advance)

c. Letters of Credit opened and guarantees given by the Bank in favour 1,60,62,009 2,85,20,582 of Parties and Government Authorities.

4. Preferential Warrants for Equity Shares

During the year ended on 31 st March, 2009 the company has forfeited 3,40,000 Preferential Warrants issued to promoters on preferential basis ; since the option of conversion of warrants was not exercised by the due date 26.07.2008. Rs. 41.82 Lacs received as 10% of subscription value of preferential warrants is transferred to Share Premium Account.

5. Employees Stock Option Scheme

Employees Stock Options are evaluated and accounted on intrinsic value method as per the accounting treatment prescribed under Guidence Note on "Accounting for Employee Share-based payments" issued by ICAI read with SEBI ( Employee Stock Option Scheme & Employee Stock Purchase scheme) Guidelines, 1999 issued by Securities and Exchange Board of India. Accordingly the excess of market value of the stock options as on the date of grant over thfe exercise price of the option is recognised as deferred employee compensation and is charged to profit and loss account on graded vesting basis over the vesting period of the options. The unamortised portiontf the Deferred Employee Compantation is reduced from Employee Stock Option Outstanding which is shown under Reserves & Surplus.

Consequently an amount of Rs.4.56 (40.58) lacs has been amortised for the Current Year and the company has taken credit of Rs.40.28 lacs for 50471 options lapsed due to non exercise by employees during the exercise period (18 months) ended on 09.07.2009.

Notes :

(1) Above Remuneration includes payment as Directors and not for the period as an employee.

(2) As the liability for Gratuity and Leave Encashment is provided for on an Acturial Basis for the company as a whole, the amont pertaining to directors is not ascertainable and therefore not included.

Computation of Profit in accordance with section 309 read with section 349 of the Companies Act, 1956 for calculation of Managerial Remuneration

5. The exceptional item in previous year represents the one time, non recurring loss suffered by the company consequent to having entered into certain foreign currency swap transactions which have been settled during the year.

6. Persuantto notification dt.31st March, 2009 issued by the Ministry of Corporate Affairs, the company had exercised the option available under the newly inserted Paragraph 46 to the AS-11. The effect of changes in foreign exchange rates is to add/deduct the foreign exchange fluctuation to capital cost of the asset. Accordingly the net foreign exchange fluctuation gain amounting to Rs.1.50 Cr. ((PY. Loss amounting to Rs.1.96 Cr. (FY 08 & FY 09) (net of trf. from General Reserve)) has been deducted/(added) respectively to the cost of capital assets.

7. Employee Benefits

The Company has with effect from 1st April 2007, adopted Accounting Standard 15, Employee Benefits (revised 2005), issued by the Institute of Chartered Accountants of India. The disclosure as required are as under:

1) Brief description of the plans :

The Company has various schemes for long-term benefits such as provident fund.gratuity and leave encashment. In case of funded schemes, the funds are recognised by Income Tax Authorities and administered through trustees/appropriate authorities.

The Companys defined contribution plans are Provident Fund (exempted employees) recognised by the Income Tax Authorities and administered through trustees. Since the Company has no further obligation beyond making contributions and interest shortfall. Further the pattern of investment for investible funds is as prescribed by the Government. Accordingly other related disclosures in respect of Provident Fund have not been made.

The Companys other defined contribution plans are Provident Fund (non exempted employees), Employees Pension Scheme (under the Provisions of the employees Provident Funds and Miscellneous Provisions Act, 1952), state plans namely Employees State Insurance Fund, Since Company has no further obligation beyond making contributions.

The Companys defined benefit plans are Gratuity and leave Encashment for all its employees. Gratuity fund is recognised by the Income Tax Authorities and is administered through trustees.

Liability for Defined Benefit Plan is provided on the basis of valuations, as at Balance sheet date, carried out by an independent actuary. The actuarial valuation method used by independent actuary for measuring the liability is the projected unit credit method.



 
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