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Cera Sanitaryware Ltd.

BSE: 532443 Sector: Consumer
NSE: CERA ISIN Code: INE739E01017
BSE 00:00 | 03 Oct 5415.05 -10.75
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OPEN 5457.90
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VOLUME 2572
52-Week high 6430.45
52-Week low 3518.60
P/E 39.11
Mkt Cap.(Rs cr) 7,040
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Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 5457.90
CLOSE 5425.80
VOLUME 2572
52-Week high 6430.45
52-Week low 3518.60
P/E 39.11
Mkt Cap.(Rs cr) 7,040
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Cera Sanitaryware Ltd. (CERA) - Director Report

Company director report

To

The Members

The Directors have pleasure in submitting the 24th Annual Report together with theAudited financial statements of your Company for the year ended 31st March 2022.

Performance

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

( Rs in Lakhs)
Standalone Year ended 31st March 2022 Year ended 31st March 2021
Revenue from Operations 144175.57 120170.67
Profit (EBIDTA) before Interest 24402.76 17174.29
Depreciation Taxes &
Exceptional Item
Interest 458.71 426.77
Depreciation 3043.00 3323.04
Profit before taxes and 20901.05 13424.48
Exceptional Item
Exceptional Item (573.80) -
Profit before tax 20327.25 13424.48
Tax Expense:
- Current Year 5197.72 3279.05
- Deferred Tax 193.55 15.10
Profit for the year 14935.98 10130.33

The summary of your Company's financial performance on consolidated basis is givenbelow:

( Rs in Lakhs)
Consolidated Year ended 31st March 2022 Year ended 31st March 2021
Revenue from Operations 144583.00 122432.68
Profit (EBIDTA) before Interest 25238.00 18321.92
Depreciation Taxes &
Exceptional Item
Interest 528.15 972.86
Depreciation 3240.74 3957.09
Profit before taxes and 21469.11 13391.97
Exceptional Item
Exceptional Item (573.80) -
Profit before tax 20895.31 13391.97
Tax Expense:
- Current Year 5391.30 3366.04
- Deferred Tax 209.53 35.26
Profit for the year 15294.48 9990.67
Add: Share of Profit / (Loss) 0.76 4.76
from Associate
Profit for the Year 15295.24 9995.43

Transfer to Reserves

The Company has transferred a sum of Rs 3439.58 Lakhs to General Reserve in thecurrent year (previous year Rs 5460.46 Lakhs).

Highlights / Performance of the Company

Turnover (Net of GST) of the Company for the year increased by 19.92% to Rs 143826.26Lakhs as compared to Rs 119934.60 Lakhs previous year.

Profit before Depreciation and Taxes & Exceptional Items for the year increased by42.97% to Rs 23944.05 Lakhs as compared to

Rs 16747.52 Lakhs previous year.

Profit after Tax for the year increased by 47.44% to Rs 14935.98 Lakhs as compared toRs 10130.33 Lakhs previous year.

Exceptional Item :

Pursuant to the Memorandum of Understanding (MOU) executed on 17th August 2021 SharePurchase Agreement executed on 26th August 2021 and Share Escrow Agreement executed withFederal 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 AnjaniTiles Limited (ATL) (Subsidiary company) for the transfer / divestment of entire stake inEquity and Preference Shares of Anjani Tiles Limited for the total consideration of Rs2869.20 lakhs the Company's shareholdings as at 31st March 2022 in Equity andPreference shares in ATL have been presented as Non-current Assets classified as held forsale as on 31st March 2022 as per Indian Accounting Standard–105–"Non-current Assets Held for Sale and Discontinued Operations".Accordingly Equity shares are measured at the lower of their carrying amount and fairvalue less costs to sell and Preference shares are measured at fair value which isequivalent to carrying amount as at 31st March 2022. Due to above arrangementsimpairment loss of Rs 573.80 lakhs has been recognised in the Statement as ExceptionalItem.

Dividend Final Dividend :

Your Directors recommended a dividend of Rs 20/- per share (400%) [Previous yearDividend of Rs 13/- per share (260%)] on 13005874 equity shares of Rs 5/- each fullypaid for the year ended 31.03.2022 to be paid subject to the approval of the members atthe ensuing Annual General Meeting.

Special Dividend :

Your Directors recommended a special dividend of Rs 15/- per share (300%) (Previousyear Dividend - Nil) on 13005874 equity shares of Rs 5/- each fully paid for the yearended 31.03.2022 considering Company's highest growth in terms of turnover and net profitsince last 20 years of its operation to be paid subject to the approval of the members atthe ensuing Annual General Meeting.

During the year the unclaimed dividend pertaining to the financial year ending 2013-14were transferred to the Investor Education and Protection Fund.

Covid-19

The management has considered the impact of Covid-19 on its profitability liquiditysupply chain receivables inventories other financial assets and investments.

Even after the second wave and the third wave of Covid-19 your Company has witnessed asurge in consumer demand both on the new build and the existing home improvementcategory.

The management will continue to closely monitor any material changes to future economicconditions.

Sanitaryware Unit

Post Covid-19 your company started ramping up production volumes to its optimumcapacity to monetise the sustainable demand generated by the end user for homeupgradation in every geographic location across the country.

Workmen engagement activities like sports day counselling reward & recognitionschemes have been started which has resulted into positiveness and trust at the shopfloor.

Various new initiatives on safety quality cost and delivery and compliances on SOPhave been implemented resulting into improvement in manufacturing yields and productionvolume. In order to have repeatability and reproducibility of new SKU and designedproduct Standardization of process and its control have been institutionalized.

Good manufacturing practices like waste reduction KAIZEN cost saving andsustainability projects have been implemented to improve the utilization of deployedresources.

Your company continued to develop new/latest designs of one-piece WCs and high-end wallhung WCs to reduce dependency on imports.

Several Covid-appropriate products like rimless WCs sensor urinals etc. were rolledout by Sanitaryware unit.

In order to increase the touch points and to enhance the customer experience yourCompany has invested in increasing the Cera Style Centres owned and managed by retailersin many towns. Your Company has been in the forefront of technology and automation. Aftersuccessful implementation of 3D printing and robotic glazing technologies your Companyhas now added high pressure casting system. These will give your Company a technologicaledge.

Your company will continue optimum utilization resources and deliver high level ofquality product as per customer expectations.

Faucet ware Unit

Your Company has witnessed growth in terms of production and sales volume which leadthe company to reach to the higher level of achievements. Company could achieve the samethrough various debottlenecking projects adding balancing equipment SOP compliances andautomation 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 thechanging customer preferences and market need. A total of 47 new products were launchedduring the year.

Company will also emphasis the development and sale of WATER saving products which arevery crucial for the sustenance of environment and preservation of ecosystem. 47.44% ofproducts in the portfolio are water saving products.

Several Covid-appropriate products like sensor faucets foot-operated taps etc. wereconceived developed and produced by Faucetware division.

Bathware Unit

Your Company continued launches of new products and designs with 25 new productslaunched during the year. New Covid-appropriate products like anti-bacterial seat coverswere developed and launched.

Senator by CERA

Distribution of your Company's premium offering Senator aimed at discerning customershas been widened to reach more customers.

JEET

New products have been added in JEET your Company's sanitaryware range aimed ataffordable segment.

Unboxing Smiles

Since its inception your company CERA is known for its unique sensibilitycutting-edge designs and modern technology when it comes to its products which foreverappeals to the customers evolving needs. Continuing this philosophy of utmost care andprecision CERA ushered its newest product range by launching it under the theme –Unboxing Smiles – on 15th December 2021 in Delhi. This versatile range of productsunboxes Modern Living Style Functionality as well as Customers' Expectations.

From superior design and aesthetics to awe-inspiring styles futuristic products to themost 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 – whichlets you experience never seen before purposefulness Unboxing Modern Living –which offers classy & elegant designs along with premium pricing and maintenance and

Unboxing Customers' 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 andconsumer exposure. A combination of GEC (General Entertainment Channels) – Impactproperties and news program used to expose "Kuch Pal GharKe Naam" on televisionto consumers. Campaign started in May 2021 where we had advertised our three adsTelevision 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"Kaun Banega Crorepati" the biggest show of Indian Television as associatesponsor in addition CERA also sponsor popular dance show "India's best dancer".For Non HSM market Big Boss Season-5 Telugu version was sponsored for Telangana andAndhra Pradesh market Co-powered sponsorship in OruChiriIruChiri Bumper Chiri and StarSinger for Kerala market and in last quarter your company advertised heavily in Newschannels – Hindi English and Regional languages and covered elections in UP PunjabGoa Manipur & Uttrakhand.

CERA was the most visible brand last year in television and have highest share ofvoice. 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 campaignswhich include series of Product films covering Sanitaryware /Faucetware /Tiles categories- "Tested by expert" and "No Compromise" conceptualisedand launched which helped brand to gain lot of popularity and increased consumerengagement. Other initiatives also taken to increase brand recall and search i.e. Googledisplay ads remarketing and sustenance campaigns Search engine optimization Searchengine 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 TileCentres. This created a strong brand visibility in the market and also give our consumersan experience to remember and facilitate better decision making. CERA also revampedcompany owned display centre "Cera Style Studio" 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 purchasesmade by associate partners (Retailers) from CERA's authorised dealers. The purpose of thisprogram is to strengthen the relationship with the Retailers and provide transparentcommunication.

Skill development and Training

CERA rigorously conduct training sessions to upskill the knowledge of plumbers andmasons. This enables them to get better wages resolve customer query satisfactorily andinstall products hassle-free.

Awards

CERA won the most affiliated awards consecutively for the third time in a row such as"Trusted brand" and "Super brand".

Tiles Unit

Your company made rapid strides in the Tiles segment by launching new designs Slabslarge format sizes of 1200x2400mm 1200x1200mm and 800x1600mm and also new designs andsizes in both floor and wall categories.

Joint Ventures

In 2015 the company had entered into a Joint Venture with Anjani Tiles Ltd at AndhraPradesh with 51% Equity and Milo Tiles LLP (earlier Crown Ceramics–an establishedproduction facility) at Morbi Gujarat with 26% Equity (since 2019) for producing high endGlazed Vitrified Floor Tiles aggregating to 16000 Sq. Mtr. per day. With your companydeciding to monetise its equity in ATL the JV arrangement with ATL at Andhra Pradesh hascome to end by entering into MOU and SPA (Share Purchase Agreement) in August 2021. Theproceed 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 boxeswhich has now achieved full utilisation of production. The products are now available on ajust in time basis built to the exact specifications for the Company. The capacityutilization has increased considerably during the year.

Polymer Unit

The Joint venture for Polymer Products unit for manufacturing of seat covers andcisterns has reached optimum capacity of its production during the year. Cera holds 51%Equity. The quality products are available and capacity utilization has increasedgradually during the year.

Green Energy Unit

As a part of national policy and Green initiative which was initiated in 1995 Companyhas energy security and stabilized power cost by generation of electricity throughnon-conventional sources for captive use through wind and solar.

The current installed capacity of Non-Conventional Energy unit of the Company stands to10.325 M.W.

The non-conventional Wind and Solar Power has produced 156.88 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 of both sources differ asGAIL sources gas from isolated wells in and around Cera's manufacturing facility and isable to contract gas at a lower price over prevailing market pricing. Medium termcontracts with these suppliers are renewed on aperiodic basis. For energy conservationthe company has installed fuel efficient burners to control gas consumption and inaddition to this every effort is made by the company to adapt any technologicaldevelopments in energy conservation.

The second energy viz. electricity required for running the machineries is suppliedby the local Discom. To compensate the energy consumption by way of electricity yourCompany has an installed capacity of Wind Turbines of 8.325 MW and Solar Plants of 2.00 MWwhich generates about 70% of the company's electricity requirement and this gets offsetagainst monthly consumption of the energy bill.

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.

Environmental Social Governance (ESG)

Cera Sanitaryware follows a holistic approach towards Environmental Social andGovernance matters. Cera Sanitaryware values the trust reposed by its stakeholdersincluding customers the communities in which it operates and society at large and hasstrived 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 pollutioncontrol and other environmental aspects. Some of the broad initiatives undertaken by theCompany include:

? Installation of a rooftop solar power system (one of the largest in the Kadiregion) which has gone a long way in substantially reducing the carbon footprint.

? Cera has managed to stabilize power cost by generating electricity throughnon-conventional sources (wind and solar) for captive use; as of FY22 its total installednon-conventional energy capacity stood at 10.325 MW which produced 15.69mn unit. 70% ofits energy needs are met through renewable energy.

? In its initiative to conserve biodiversity the Company has undertaken plantation ofover 10000 plus trees.

? By successfully developing a fully functional rainwater-harvesting system Cera hasmanaged to reduce dependence on ground water usage. Further by recycling water used forthe manufacturing process the Company has reduced the water intensity of its operations.

? Under the initiative of ‘Waste Minimization and Waste Utilization' the Companyhas been undertaking numerous measures. Some of these measures include recycling of solidand liquid and ZLD (zero liquid discharge) high energy efficient rated machinescompliance to pollution norms and awareness generation among employees etc. Majority ofthe waste generated in the company's operations is recycled and the balance isdisposed-off safely. The Company has also installed a Effluent Treatment Plant at both ofits facilities.

Social dimension at Cera Sanitaryware

For the past several years Cera has been actively involved in various social welfareactivities. Over a span of 5 years Cera has spent more than Rs 15 crore for developmentwithin Kadi district (a tier 3 developing industrial area) and surrounding areas.Additionally the Company at regular intervals provides necessary safety and skillup-gradation training to its permanent as well as its contractual employees. The Companyhas systems in place to ensure no child labour forced or involuntary labour at itsfacilities. During the financial year 2021-2022 the Company has spent Rs 29.10mn towardsCSR activities mainly in the areas of education healthcare rural development womanempowerment and eradicating hunger. Governance at Cera Sanitaryware Adhering to the bestCorporate Governance practices has been a strong endeavor of the Company since itsinception. The organization strongly believes that there is a direct association betweengood corporate governance practices and stakeholder value enhancement. To ensureprotection of interests of all stakeholders of the Company Cera has adopted variousstrict governance related policies to the best governance practices. Its policy relatingto ethics bribery and corruption serves as the guiding philosophy for its employees aswell as the employees of its subsidiary and JV companies. The Company also has awhistleblower policy in place which provides a platform to all employees vendors andcustomers to report any suspected fraud or error or confirmed incident offraud/misconduct. Through prudent strategies the Company has optimized asset utilizationand preserved the collective funds at its disposal by avoiding unrelated diversificationor over-ambitious expansion. By ensuring fair and ethical dealings with all stakeholdersthe Company has a robust track record of Corporate Governance practices.

Going ahead the Company aspires to continue deepening its focus towards theenvironmental social governance (ESG) aspect in the organization and create a sustainablefuture for all its stakeholders.

Subsidiary Company

The Company has one Subsidiary Company and two Subsidiary LLP's namely Anjani TilesLimited and Packcart Packaging LLP & Race Polymer Arts LLP respectively.

There are no associate companies within the meaning of Section 2(6) of the CompaniesAct 2013 ("Act"). Further there has been no material change in the nature ofbusiness of the subsidiary. The Company does not have any material subsidiary. The Policyon Material Subsidiary framed by the Board of Directors of the Company is available onCompany'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 annualfinancial statements of the subsidiary may write to the Company. The Audited financialstatements of all subsidiaries are available on the website of the Companywww.cera-india.com.

Pursuant to the provisions of Section 129 134 and 136 of the Companies Act 2013 withrules made thereunder and Regulation 33 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has prepared consolidated financialstatements of the Company and salient features of the financial statement of thesubsidiaries 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 itsSubsidiaries viz Anjani Tiles Limited and pursuant to the Resolution passed at the BoardMeeting held on 5th August 2021 for consideration of the proposal and in principleapproval for divestment of the Company's entire stake in Anjani Tiles Limited asubsidiary company a Memorandum of Understanding (MOU) was executed on 17th August 2021by and amongst Cera Sanitaryware Limited (Cera) Anjani Vishnu Holdings Ltd (AVHL) (JointVenture Partner and Acquirer Company) and Anjani Tiles Limited (ATL) (Subsidiary Company)for the transfer / divestment of entire stake in Anjani Tiles Limited consisting of10200000 Equity shares of

Rs 10/- each and 24230000 1% Cumulative Redeemable Preference shares of Rs 10/- eachon a fully diluted basis for a total consideration of Rs 2869.20 Lakhs.

The Company AVHL and ATL also entered in to Share Purchase Agreement (SPA) dated 26thAugust 2021 pursuant to which the Company agreed to sell all the Equity and PreferenceShares held by it in ATL to AVHL.

Total consideration as referred above will be received by the Company in one or moretranches beginning from 30th September 2021 and completing on 31st March 2023 throughan escrow mechanism and as per the Payment Schedule set out in the MOU. Accordingly thefirst tranche of Rs 643.00 Lakhs has been received on 28th September 2021 from theAcquirer Company and 6430000 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 theCompany AVHL and ATL with Federal Bank Ltd. (Escrow Agent) jointly on 23rd November2021. Both Cera and AVHL have transferred their respective entire Equity shareholding andtheir respective balance Preference shareholding to the Escrow Account in January 2022with lien marked in favour of the Escrow Agent.

Company's shareholdings in Equity and Preference shares in ATL have been presented asNon-current Assets classified as Held for Sale as on 31st March 2022 as per IndianAccounting Standard -105 - "Non-current Assets Held for Sale and DiscontinuedOperations" measured at the lower of its carrying amount and fair value less coststo sell in respect of Equity shares and at fair value in respect of Preference shares asat 31st March 2022. The impairment loss of Rs 573.80 Lakhs on Equity Shares (Preferenceshares to be transferred at fair value which is equivalent to carrying amount) due toabove arrangements has been recognised in the Statement of Profit and Loss as ExceptionalItem.

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 thedetails of which are included in the notes forming part of the financial statements.

There were no material related party transactions entered during the year. Accordinglyinformation in form AOC - 2 is not annexed. Further no materially significant relatedParty transactions were made by the Company with Directors Key Managerial Personnels orother Designated Persons which may have a potential conflict with the interest of theCompany at large. All related party transactions were placed before the Audit Committeeand also the Board for approval. Pursuant to recent amendments in the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 in respect of related partytransactions the Board of Directors have revised the Policy on related Party transactionsw.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 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 theCompanies Act 2013 and to demonstrate the responsibilities towards Social upliftment instructured way the Company has formed a Policy to conduct the task under CSR during theyear. The Annual Report on Corporate Social Responsibility (CSR) Activities alongwithAnnexure as per Rule 8 of Companies (Corporate Social Responsibility Policy) Rules 2014is annexed as a separate Annexure–IV and separate activity wise CSR Report hasbeen annexed as per Annexure -II.

Directors and KMP

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 byrotation. 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 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 and have also confirmed that they are not aware of any circumstanceor situation which exist or may be reasonably anticipated that could impair or impacttheir ability to discharge their duties with an objective independent judgment and withoutany external influence. The Company keeps informed independent directors about changes inthe Companies Act 2013 and rules and other related laws from time to time and their roleduties and responsibilities. Shri Surendra Singh Baid is proposed to be re-appointed asIndependent Director for further term of Five years at the ensuing Annual General meetingof the Company.

Due to personal reasons Shri Atul Sanghvi resigned as Executive Director & CEO ofthe Company from the end of 14th October 2021. The Board placed its warm appreciation forthe contribution made by him as an Executive director during the tenure on the Board ofthe Company.

Upon the recommendation of Nomination and Remuneration Committee the Board ofDirectors 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 ExecutiveDirector (Technical) of the Company for period of 3 years w.e.f. 15th October 2021subject 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 aperiod of three years w.e.f. 14th May 2022 and Shri Vikram Somany as Chairman andManaging Director for a period of five years w.e.f. 1st July 2022. Their appointments aresubject 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 GeneralMeeting and being eligible offers herself for reappointment.

The resolutions proposing the appointment/reappointment of the Directors are set out inthe notice convening Annual General Meeting for approval of members.

Brief resume of the director who is proposed to be reappointed at the ensuring AnnualGeneral meeting as required as per SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is provided in the notice convening this Annual General Meeting of theCompany.

There was no other change in the Key Managerial Personnel during the year under reviewexcept mentioned as above.

Number of Meetings of the Board

The Board of Directors during the financial year 2021-22 duly met 6 times on02.06.2021 10.06.2021 05.08.2021 31.08.2021 26.10.2021 and 24.01.2022 in respect ofthese meetings proper notices were given and the proceedings were properly recorded andsigned in the Minutes Book maintained for the purpose.

Audit Committee

The Company has constituted Audit Committee in terms of the requirements of the Act andrules framed thereunder and applicable listing regulations. For details please referCorporate Governance Report attached as a 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 accountingstandards have been followed and there are no material departures; ? that such accountingpolicies have been selected and applied consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company as on 31st March 2022 and of the Profit of the Company for the year ended onthat date; ? that proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; ? that the annual accounts have been prepared on a goingconcern basis; ? that internal financial controls have been laid down to be followed bythe company and that such internal financial controls are adequate and were operatingeffectively; ? that proper systems have been devised to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

Board Evaluation

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

Managerial Personnel on the basis of attendance contribution and various criteria asrecommended by the Nomination and Remuneration Committee of the Company.

The performance of Non-Independent Directors (including the chairperson) and the Boardas whole was also evaluated by the Independent Directors at the separate meeting ofIndependent Directors of the Company. The Directors expressed their satisfaction with theevaluation process.

Policy on Directors appointment and remuneration

Criteria determining the qualifications positive attributes and independence ofDirectors.

Independent Directors

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/She should also devote sufficienttime to his/her professional obligations for informed and balanced decision making; andassist 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 CompaniesAct 2013 and SEBI (LODR) Regulations 2015 and give declaration to the Board of Directorsfor the same every year.

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 for 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/her performance is notsatisfactory. Other details are disclosed in the Corporate Governance Report under thehead Nomination and Remuneration Committee and details of Remuneration (Managing Director/ Whole Time Director(s) and Non-Executive Directors) are attached as a separate Annexure-VIto this Report.

Familiarisation Programme for Independent Directors

The Directors are regularly informed during meetings of the Board and Committees on thebusiness strategy business activities manufacturing operations and issues faced by theceramic industry. The Directors when they are appointed are given a detailed orientationon the Company industry regulatory matters business & financial matters humanresource matters and corporate social responsibility. The details of Familiarisationprogrammes provided to the Independent Directors of the Company are available on theCompany's website www.cera-india.com.

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.

Remuneration Policy

This Nomination and Remuneration Policy ("Policy") provides the framework andkey guiding principles to be followed in for appointment and determination of remunerationof Directors Key Managerial Personnel and Senior management personnel. This Policy is toestablish and govern the procedure applicable: a) To evaluate the performance of themembers of the Board. b) To ensure remuneration to Directors KMP and Senior Managementinvolves a balance between fixed and incentive pay reflecting short and long-termperformance objectives appropriate to the working of the Company and its goals. c) Toretain motivate and promote talent and to ensure long term sustainability of talentedmanagerial 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 Remunerationof Managerial Personnel) Rules 2014 are enclosed as a separate Annexure-V.

Details of employees required pursuant to Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed as a separate Annexurehowever it is not being sent along with this annual report to the members of the Companyin line with the provisions of Section 136 of the Companies Act 2013 and rules made thereunder. Members who are interested in obtaining these particulars may write to the CompanySecretary at the Registered Office of the Company. The aforesaid Annexure is alsoavailable for inspection by members at the Registered Office of the Company 21 daysbefore and up to the date of the ensuing Annual General Meeting during the business hourson working days.

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-VI 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-VII.

Annual Return

Pursuant to Section 134(3)(a) and Section 92(3) of the Act the Copy of Annual Returnof the Company for the financial year ended March 31 2022 will be placed on the Company'swebsite 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 theCompanies Act 2013 and no guarantee or security is provided by the Company. Details ofInvestments covered u/s 186 of the Companies Act 2013 are given in the notes to theFinancial Statements.

Risk Management Policy

The Board has approved and implemented Risk Management Policy of the Company includingidentification and element of risks. Pursuant to amendments in SEBI (Listing Obligationsand Disclosure Requirements Regulations) 2015 the Board of Directors of the Company hasconstituted the Risk Management Committee having its scope and functions as per RiskManagement policy. The Committee shall also review cyber security matters of the companyat various levels and also take necessary actions from time to time to mitigate the cyberrisk to the Company in accordance with SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The committee is responsible for reviewing the riskmanagement plan and ensuring its effectiveness.

The Risk Management system is also overseen by the Audit Committee / Board of Directorsof the Company on a continuous basis. The major risks identified by the businesses aresystematically 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 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.

Share Capital

The paid-up Equity Share Capital as on 31st March 2022 was Rs.650.29 Lakhs. During theyear 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 4746Equity Shares to Investor Education and Protection Fund pursuant to the provisions ofsections 124 & 125 of the Companies Act 2013 and Investor Education and ProtectionFund (Accounting Audit Transfer and Refund) Rules 2016.

Exchequer

The Company has contributed Rs 16131 Lakhs to the exchequer by way of GST customsduty 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 ofSection 73 of the Companies Act 2013 and The Companies (Acceptance of Deposits) Rules2014.

Finance

During the year under review the Company does not have any long term loans/debts fromFinancial Institutions and Banks. The Company is availing Working Capital facility fromState Bank of India.

During the year there is no default in payment of loan facility availed from Bank orFinancial Institution therefore details of difference between amount of valuation done atthe time of one time settlement and valuation done while taking loan from bank orfinancial institutions is not applicable.

Auditors and their Observations

N.M. Nagri & Co. Chartered Accountants were appointed as Auditors at 19th AnnualGeneral Meeting (‘AGM') held on 27th July 2017 to hold the office of the Auditors upto the conclusion of the 24th Annual General Meeting.

The existing Auditor's firm has completed terms of five consecutive years pursuant toSection 139(2) of the Companies Act 2013. The Audit Committee and the Board of Directorshave recommended appointment of Singhi & Co. Chartered Accountants (Firm RegistrationNo.302049E) as the Statutory Auditors of the Company for a term of five years from theconclusion 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 andconfirmed that their appointment if made would be within the limits specified underSection 141(3)(g) of the Act. They have further confirmed that they are not disqualifiedto be appointed as statutory auditors in terms of the provisions of the proviso to Section139(1) and Section 141(3) of the Act and the provisions of the Companies (Audit andAuditors) Rules 2014. The Auditors' Report and Secretarial Audit Report to the membersfor the financial year under review does not contain any qualification reservation oradverse 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 andAudit) Rules 2014. Accordingly cost records have been maintained by the Company. TheCompany has appointed K.G. Goyal & Co. as Cost Auditors for conducting cost audit forthe year 2022-23.

Secretarial Audit

Pursuant to provisions of Section 204 of Companies Act 2013 and rules made thereunder the Company had appointed Parikh Dave & Associates Practicing CompanySecretaries to undertake the Secretarial Audit of the Company for the year 2021-22. TheSecretarial Audit Report for the year 2021-22 given by Parikh Dave & AssociatesCompany Secretaries in practice is annexed with this report.

Secretarial Standards

The Company is complying with the applicable Secretarial Standards.

Insurance

Your Company has adequately insured all its properties including Plant and MachineryBuilding and Stocks.

Industrial Relations

The Company has in the past signed bilaterally negotiated four year wage agreementswith workmen with detailed quantification of fixed and variable wages. A similar agreementon completion of the previous agreement's tenure was signed under section 2(p) 18(1) ofIndustrial Disputes Act 1947 for 4 years with workers Union on 4th August 2021 whichtook effect on 1st September 2021. The new wage agreement was executed in harmoniousenvironment and without any labour unrest and loss of production.

The Company has adequate skilled & trained workforce 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 in place a Policy against Sexual Harassment at workplace in line withthe requirement of Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. Internal Complaints Committees have been set up to redresscomplaints received regarding sexual harassment. The Company has not received anycomplaints during the year under the Sexual Harassment of Women at workplace (PreventionProhibition and Redressal) Act 2013. The Company has organized 2 workshops under the saidAct during the year under review.

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 2022 and the date of the Board's Report.

There is no application pending under the Insolvency and Bankruptcy Code 2016 againstthe Company.

Change in nature of business

No changes have been made in nature of business carried out by the Company during thefinancial year 2021-22.

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.

Vigil Mechanism

The Company has implemented Vigil Mechanism. For details please refer CorporateGovernance Report attached as a separate

Annexure-VI. Appreciation

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 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)

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