Cera Sanitaryware Ltd.
|BSE: 532443||Sector: Consumer|
|NSE: CERA||ISIN Code: INE739E01017|
|BSE 00:00 | 21 Aug||2803.35||
|NSE 00:00 | 21 Aug||2797.35||
|Mkt Cap.(Rs cr)||3,644|
|Mkt Cap.(Rs cr)||3644.35|
Cera Sanitaryware Ltd. (CERA) - Director Report
Company director report
The Directors have pleasure in submitting the Annual Report together with the Statementof Accounts of your Company for the year ended 31st March 2018.
The summary of your Company's financial performance is given below:
(Rs. in Lakhs)
Transfer to Reserves
The Company has transferred a sum of' 5857.61 Lakhs to General Reserve in the currentyear (previous year ' 6359.68 Lakhs).
Highlights / Performance of the Company
Tu rnover (Net of GST/Excise) of the Company for the year increased by 17% to '117808.72 Lakhs as compared to '100917.03 Lakhs previous year.
The Directors are pleased to inform you that your Company has continued to grow in2017-18 due to the aggressive sales and marketing efforts combined with new productlaunches and improved product quality with induction of new technology in the productionprocess.
During the year the plant had run at its optimum capacity. The focus of your Companynow has shifted towards premiumization by producing more of high value items thusmaximizing its optimum capacity.
Your company has been constantly upgrading its technology for continuous improvement inproductivity and quality. 3D printing machines are helping your Company launch new designsfrom concept in a matter of weeks. The robotic glazing machines help evenness of glaze andalso saving in wastage of glaze.
In the Faucetware plant too technology upgradation has been helping your Company inproductivity and quality. During the year
Zamac plantfor manufacturing of Zamac handles has commissioned and commercialproduction commenced which has helped the Company to stop imports.
Continuous launch of new designs has helped your company garner larger market share. 3Dprinting robotic grinding and polishing low pressure die casting automated chromeplating etc. are helping your Company in providing quality products.
Your Company has launched new ranges of wellness kitchen sinks and mirrors which havebeen well accepted in the market.
Senator by CERA
Your Company recently launched a new brand SENATOR by CERA aimed at premium segmentand the response of SENATOR range was overwhelming.
Your Company also launched JEET sanitaryware range aimed at affordable segment whichis growing very fast.
The Italian luxury designer Sanitaryware ISVEA launched by CERA has now gainedmomentum in the market.
Your Company continues to strengthen its market reach in tiles. Apart from South I ndiathrough JV with Anjani Tiles Limited Company spread its wings in a good way in NorthWest and East too.
The launch of new exclusive design collection conceived by the design team was asuccess 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 gaininggrounds.
Your company has entered into a Joint Venture with Anjani Tiles Limited at AndhraPradesh with 51% Equity and 54% Preference Share holding in aggregate amounting to ' 2933Lakhs (Previous Year' 2678 Lakhs) for producing Vitrified Floor Tiles of 10000 Sq. Mtr.per day. The commercial production of tiles from this plant has started from 1stApril 2016.
The Joint Venture unit for manufacture of corrugated boxes has been doing well. Thecapacity utilization has increased considerably during the year. CERA holds an equity of51%.
Dubai & Sharjah operations
Company has started showroom in Dubai at main Sanitaryware market to have sale anddisplay of company's products. In addition to this company has opened warehousing facilityat Sharjah to cater UAE market and appointed dealers having CERA display gallery. Theoperations at Dubai & Sharjah are taking shape.
Green Energy Unit
As a part of national policy and Green initiative company has stabilized power cost bygeneration of electricity through nonconventional sources for captive use.
The company has installed and commissioned one more M.W Solar Energy unit during theyear. Thus the installed capacity of NonConventional Energy unit of the Company now standsto 13.825 M.W.
The non-conventional Wind and Solar Power has produced 178.06 lakhs KWH for captiveuse.
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 SabarmatiGas Ltd. for operating its sanitaryware plant. The pricing and quantity of the gas arebased on the availability international pricing and the contract into with thesesuppliers by the company. For energy conservation the company has installed fuelefficient burners to control gas consumption and in addition to this every effort is doneto adapt any technological developments in energy conservation by the Company.
The second energy viz. electricity required for running the machineries is suppliedby the local Discom. To compensate within the energy consumption by way electricity yourcompany has set up Wind Turbines of 11.825 MW and 2.00 MW Solar Plant which generatesabout 90% of the requirements and gets offset against monthly consumption of the energybill.
Technology absorption and foreign exchange earnings and outgo
The information on technology absorption and foreign exchange earnings and outgostipulated under Section 134 (3)(m) of the Companies Act 2013 read with Rule 8 of theCompanies (Accounts) Rules 2014 is annexed herewith as a separate Annexure- III.
The Company has one Subsidiary Company namely Anjani Tiles Limited which becamesubsidiary of the company w.e.f. 23rd November 2015. It has started commercialproduction from 1st April 2016. The company has also another subsidiary LLPviz. Packcart Packaging LLP. There are no associate companies within the meaning ofSection 2(6) of the Companies Act 2013 ("Act"). Furtherthere has been nomaterial change in the nature of business of the subsidiary.
The Company does not have any material subsidiary. The Policy on Material Subsidiaryframed by the Board of Directors of the Company is available on Company's website at thelink https://
Those Shareholders who are interested in obtaining a copy of the audited annualaccounts of the subsidiary may write to the Company.
In terms of provisions of sub section (3) of Section 129 of the Act the salientfeatures of the financial statement of the Subsidiary Company is set out in the prescribedform 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 during thefinancial 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 Companywith Directors Key Managerial Personnel or other designated persons which may have apotential conflict with the interest of the Company at large. All related partytransactions were placed before the Audit Committee and also the Board for approval. ThePolicy on related Party transactions as approved by the Board is uploaded on the Company'swebsite i.e. www.cera- india.com .
The particulars of contracts or arrangement with related parties as per Section 188(1)of the Companies Act 2013 and SEBI (LODR) Regulations 2015 including arm's lengthtransactions 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 believestrongly in our core values of empowerment and betterment of not only the employees butalso our communities. Following this principle the Company had laid the foundation of acomprehensive approach towards promoting and facilitating various aspects of oursurrounding communities.
The Board has approved a policy for Corporate Social Responsibility and same has beenuploaded on the website i.e. www.cera- india.com
As required under Section 135 of the Companies Act 2013 and to demonstrate theresponsibilities towards Social upliftment in structured way the Company has formed aPolicy to conduct the task under CSR during the year.
The report on Corporate Social Responsibility (CSR) activities along with Annexure asper Rule 8 of Companies (Corporate Social Responsibility Policy) Rules 2014 is annexed asa separate Annexure-VI.
Directors' Responsibility Statement
In compliance of Section 134 (5) of the Companies Act 2013 the Directors of yourCompany confirm:
that in the preparation of annual accounts the applicable accounting standardshave been followed and there are no material departures;
V that such accounting policies have been selected and applied consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as on 31st March 2018 and of the Profitof the Company for the year ended on that date.
V that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
V that the annual accounts have been prepared on a going concern basis.
that internal financial controls have been laid down to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
that proper systems have been devised to ensure compliance with the provisionsof 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 Remunerationof Managerial Personnel) Rules 2014 are enclosed as a separate Annexure - VII.
Details of employees required pursuant to Rule 5 (2) of the Companies (Appointment andRemuneration 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 underreview.
Company has not sanctioned loan to any of its employees for purchase of Company'sshares under any scheme.
Corporate Governance and Management Discussion and Analysis
Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015report on Corporate Governance along with Practicing Company Secretary's Certificate onits compliance and Management discussion and Analysis have been included in this AnnualReport as per separate Annexure - X and Annexure - I respectively.
Business Responsibility Reporting
As required under Regulation 34(2)(f) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 Business Responsibility Report forms part of theDirectors' 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 on04-05-2017 30-08-2017 02-11 -2017 and 01 -02-2018 in respect of which meetings propernotices were given and the proceedings were properly recorded and signed in the MinutesBook maintained for the purpose.
Extract of Annual Return
The details forming part of the extract of the annual return in Form No. MGT-9 isannexed 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 theCompanies 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 thenotes to the Financial Statements.
Risk Management Policy
The Board has approved and implemented risk management Policy of the Company includingidentification and element of risks.
The Risk Management is overseen by the Audit Committee / Board of Directors of theCompany on a continuous basis. The Committee oversees Company's process and policies fordetermining risk tolerance and review management's measurement and comparison of overallrisk tolerance to established levels. Major risks identified by the businesses andfunctions are systematically addressed through mitigating actions on a continuous basis.For details please refer to the Management Discussion and Analysis enclosed as separateAnnexure -1 to this report.
The Company has constituted Audit Committee. For details please refer CorporateGovernance Report attached as a separate Annexure- X.
Internal Control System and its adequacy
The Company has internal control system commensurate with the size scale andcomplexity of its business operations. The scope and functions of Internal Auditor aredefined and reviewed by the Audit committee. The Internal Auditor reports to the Chairmanof the Audit Committee. The Internal Auditor assesses opportunities for improvement ofbusiness processes systems and controls to provide recommendations which can add valueto the organization.
Your Directors recommended a dividend of' 12/-per share (240%) (Previous year ' 12/-per share (240%) on 13005874 equity shares of' 5/- each fully paid for the year ended31st March 2018 to be paid subject to the approval of the members at theensuing Annual General Meeting.
During the year the unclaimed dividend pertaining to the financial year ending 2009-10were transferred to the Investor Education and Protection Fund.
The paid-up Equity Share Capital as on 31st March 2017 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 bythe Company during the year under review.
During the year the company has transferred 42473 Equity Shares to Investor Educationand Protection Fund pursuant to the provisions of Section 124 & 125 of the CompaniesAct 2013 and InvestorEducation and Protection Fund (Accounting Audit Transfer andRefund) Rules 2016.
The Company has contributed ' 18131.00 Lakhs to the exchequer by way of GST exciseduty customs duty service tax income tax VAT sales tax and other fiscal levies.
The Company has discontinued its Fixed Deposit Scheme from the Financial Year 2012-13.During the year unclaimed deposits of ' 1.34 lakhs have been transferred with accruedinterest to "Investor Education and Protection fund" in July-2017.
The Company has not accepted fixed deposit from the public falling within the ambit ofSection 73 of the Companies Act 2013 and The Companies (Acceptance of Deposits) Rules2014. There have been no defaults in repayments of deposits or payment of interest thereonduring the year.
During the year under review the Company has repaid loans of ' 533.53 Lakhs toFinancial Institutions and Banks.
Members at the Annual General Meeting held on 22nd August 2014 haveappointed Shri Sajan Kumar Pasari Shri Govindbhai P. Patel and Shri Lalit Kumar Bohaniaas Independent Directors of the Company to hold office for five consecutive years for aterm up to 31st March 2019. Similarly Shri J.K. Taparia was appointed asIndependent Director at Annual General Meeting held on 27th July 2017 to holdoffice for five consecutive years upto 31st March 2022 (they will not retireby rotation). Shri Sajan Kumar Pasari and Shri Lalit Kumar Bohania are proposed to bere-appointed as Independent Directors for further term of Five years at the ensuing AGM.
All Independent Directors have given declarations that they meet the criteria ofindependence 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 nochange in the circumstances which may affect their status as Independent director duringthe year under review. The Company keeps informed independent directors about changes inthe Companies Act 2013 and rules from time to time and their role duties andresponsibilities.
Shri Ayush Bagla (DIN: 01211591) and Shri Surendra Singh Baid (DIN: 02736988) wereappointed as Additional Directors (Independent) on the Board of the Company w.e.f. 18thApril 2018 to hold office up to the ensuing Annual General Meeting. Shri Ayush Bagla andShri Surendra Singh Baid are proposed to be appointed as Independent Directors for fiveconsecutive years at the ensuing Annual General Meeting of the Company.
Shri Govindbhai P. Patel has resigned as Director of the Company w.e.f. 18thApril 2018 and Dr. K.N. Maiti has ceased to be a director due to his death on 14thDecember 2017. Your directors wish to place on record their appreciation for thecontributions made by them to the company.
Smt. Deepshikha Khaitan (DIN: 03365068) is due to retire at the end of the ensuingAnnual General Meeting and being eligible offers herself for re-appointment.
Brief resumes of the Directors who are proposed to be appointed/ reappointed at theensuring Annual General meeting as required as per SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is provided in the notice convening the AnnualGeneral Meeting of the Company.
Pursuant to the provisions of the Companies Act 2013 and Rules made thereunderSchedule - IV of the Act and SEBI (LODR) Regulations 2015 the Board has carried theevaluation of its own performance individual Directors its Committees and Key ManagerialPersonnel on the basis of attendance contribution and various criteria as recommended bythe Nomination and Remuneration Committee of the Company.
The performance of each of the Independent Director and NonIndependent Director(including the chairperson) wasalso evaluated by the Independent Directors at the separatemeeting of Independent Directors of the Company.
Policy on Directors appointment and remuneration
Criteria determining the qualifications positive attributes and independence ofDirectors
Qualifications of Independent Director
An Independent director shall possess appropriate skills qualifications experienceand knowledge in one or more fields of finance law management marketingadministration corporate governance operations or other disciplines related to theCompany's business.
Positive attributes of Independent Directors
An independent director shall be a person of integrity who possesses knowledgequalifications experience expertise in any specific area of business integrity levelof independence from the Board and the Company etc. Independent Directors are appointed onthe basis of requirement of the Company qualifications & experience expertise in anyarea of business association with the Company etc. He should also devote sufficient timeto his professional obligations for informed and balanced decision making; and assist theCompany in implementing the best corporate governance practices.
Independence of Independent Directors
An Independent director should meet the requirements of Section 149(6) of the CompaniesAct 2013 and SEBI (LODR) Regulations 2015.
Other Directors and Senior Management
The Nomination and Remuneration Committee shall identify and ascertain thequalifications expertise and experience of the person for appointment as Director or atSenior Management level and recommend to the Board his / her appointment.
The Company shall not appoint or continue the employment of any person as Whole-timeDirector or Senior Management Personnel if the evaluation of his performance is notsatisfactory.
Other Details are disclosed in the Corporate Governance Report under the headNomination 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/commissionfrom any Holding Company or Subsidiary Company.
It is separately disclosed in the Corporate Governance Report attached as a separateAnnexure - X 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 AGMtill the conclusion of the 24th AGM (AGM of Financial year 2021 -22).
The Auditors' Report and Secretarial Audit Report to the members for the financial yearunder review does not contain any qualification reservation or adverse remarks ordisclaimer.
The Statutory Auditors have not reported any fraud during the year under review.
The Company has appointed K.G.Goyal & Co. as Cost Auditors for conducting costaudit for the year 2018-19.
Pursuant to provisions of Section 204 of Companies Act 2013 and rules made thereunder the Company has appointed Umesh Parikh & Associates Practicing CompanySecretaries to undertake the Secretarial Audit of the Company for the year 2018-19.
The Secretarial Audit Report for the year 2017-18 given by Umesh Parikh &Associates Company Secretaries in practice is annexed with this report.
The Company is complying with the applicable Secretarial Standards.
Your Company has adequately insured all its properties including Plant and MachineryBuilding and Stocks.
The Company has successfully signed a Long-Term Settlement (LTS) under section 12(3) ofID Act 1947 for 4 years with workers Union on 4th August 2017 which was dueon 01st September 2017. The LTS was signed in harmonious environment andwithout any labour unrest and loss of production. The next LTS will fall due on 01stSeptember 2021.
The industrial relations in the company's plant had been cordial and peacefulthroughout the year.
The Company has adequate skilled & trained work force for its various areas ofoperations and the skills upgradation of which is being done on continuous basis forimproving the plant operations and quality process.
The Company has taken sufficient measures to maintain Industrial Health and Safety atits workplace for employees as laid in the Gujarat State Factories Rules 1963. TheCompany is also complying and maintaining all applicable Industrial and Labour laws/rules. The Company has received nil complaint during the year under The Sexual Harassmentof Women at workplace Act1913. The Company has organised two workshops under the saidAct.
Material changes affecting financial position of the Company
No material changes or commitments affecting the financial position of the Companyhave occurred between the end of the financial year of the company to which the financialstatements relate i.e. 31st March 2018 and the date of the Board's Report.
Change in nature of business
No changes have been made in nature of business carried out by the Company during thefinancial year 2017-18.
Orders passed by Regulatory Bodies or Courts
No regulatory body or court or tribunal has passed any significant and material ordersimpacting the going concern status and operations of the Company.
The Company has implemented Vigil Mechanism. For details please refer CorporateGovernance Report attached as a separate Annexure - X.
Your Directors thank the Financial Institutions and Bankers for extending timelyassistance in meeting the financial requirements of the Company. They would also like toplace on record their gratitude for the co-operation and assistance given by State Bank ofIndia Yes Bank Ltd and various departments of both State and Central Governments.
For and on behalf of the Board of Directors