Cera Sanitaryware Ltd Directors Report.


The Members,

The Directors have pleasure in submitting the 23rd Annual Report together with the Audited financial statements of your Company for the year ended 31st March, 2021.


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

(Rs. in Lakhs)

Year ended March 31, 2021 Year ended March 31, 2020
Profit before Depreciation and
Taxes & Exceptional item 16,747.52 17,328.16
Deducting there from Depreciation of 3,323.04 3,267.32
Profit before Tax 13,424.48 14,060.84
Deducting there from taxes of:
- Current Year 3,279.05 3,712.25
- Deferred Tax 15.10 (1,245.64)
Profit for the year 10,130.33 11,594.23
Add/Less: Other comprehensive
Income (Net of tax) 20.44 (148.66)
Total Comprehensive
Income for the year. 10,150.77 11,445.57

Transfer to Reserves

The Company has transferred a sum of Rs. 5460.46 Lakhs to General Reserve in the current year (previous year Rs. 5967.05 Lakhs).

Highlights / Performance of the Company

Turnover (Net of GST) of the Company for the year decreased by 0.40% to Rs. 1,19,934.60 Lakhs as compared to Rs. 1,20,412.13 Lakhs previous year.

Profit before Depreciation and Taxes & Exceptional Items for the year decreased by 3.35% to Rs. 16,747.52 Lakhs as compared to Rs. 17,328.16 Lakhs previous year.

Profit after Tax for the year decreased by 12.63% to Rs. 10,130.33 Lakhs as compared to Rs. 11,594.23 Lakhs previous year.


The outbreak of COVID-19 pandemic globally and in India is causing significant disturbance and slowdown of economic activity. The operations of the Company were impacted due to nationwide lockdown imposed by the Government of India from 25th March, 2020 and continued upto 18th May, 2020, after which the lockdown was lifted in a phased manner. The manufacturing and sales activities came to a grinding halt.

Your Company was able to overcome the unprecedented situation by adapting quickly to the new norms of functioning and bringing out Covid-appropriate products.

The management has considered the impact of COVID-19 on its profitability, liquidity, supply chain, receivables, inventories, other financial assets and investments.

Even after the on-going second wave of COVID-19 and the expected third wave, your Company believes that the recovery of economy in general and housing construction in particular will be better. Based on the internal and external sources of information including credit reports and related information and economic forecasts, the management believes that the impact is likely to be short term in nature and there does not seem to be any medium to long term risks in the Company’s ability to recover the carrying amount of these assets in near future.

However, the management will continue to closely monitor any material changes to future economic conditions.

The implications of COVID-19 are not consistent among different countries or even among different regions of India, making it extremely difficult to project an outlook. Therefore, it is not possible at this point of time to provide business outlook of the industry in post lockdown situation in the country.

Sanitaryware Unit

During the year, your Company’s growth was affected due to the nation-wide lockdown after the outbreak of COVID-19.

After the lifting of lockdown, shortage of workforce restricted its production from reaching its optimum capacity. There was also an illegal stoppage of work by a section of workforce for 85 days, which ended with the Hon’ble High Court’s order for resumption of work.

Your company continued to develop new designs of one piece WCs and high-end wall hung WCs, thereby reducing the dependence on import of such products.

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

In order to increase the touch points and to enhance the customer experience, your Company has invested in increasing the Cera Style Centres, owned and managed by retailers, in more towns.

Your Company has been in the forefront of technology and automation. After successful implementation of 3D printing and robotic glazing technologies, your Company has now added high pressure casting system. These will give your Company a technological edge.

Faucetsware Unit

Your Company expects higher growth in the coming times in its Faucets business. With this in view, launching of new designs is being done at regular intervals, in tune with the changing market needs.

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

Bathware Unit

Your Company continued launches of new products and designs.

New Covid-appropriate products like anti-bacterial seat covers were developed and launched.

Senator by CERA

Distribution of your Company’s premium offering, Senator, aimed at discerning customers has been widened, to reach more customers.


New products have been added in JEET, your Company’s sanitaryware range aimed at affordable segment.


The Italian luxury designer sanitaryware, ISVEA, launched by your Company, exclusively in India, is expected to take off in sales after the Covid pandemic.

Modular Kitchens

Sales of Senator Cucine, Italian modular kitchens, launched by your Company, should hopefully take off after the pandemic.

Tiles Unit

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

Joint Ventures

Company has entered into a Joint Venture with Anjani Tiles Ltd at Andhra Pradesh with 51% Equity (since 2015) and Milo Tiles LLP (earlier Crown Ceramics–an established production facility) at Morbi, Gujarat with 26% Equity (since 2019) for producing high end Glazed Vitrified Floor Tiles aggregating to 16000 Sq. Mtr. per day.

Packaging Unit

The Joint Venture unit for manufacture of corrugated boxes has now achieved stabilized production. The products are now available on a just in time basis, built to the exact specifications for the Company. The capacity utilization has increased considerably during the year. CERA holds an Equity of 51%.

Polymer Unit

The Joint venture for Polymer Products unit for manufacturing of seat covers and cisterns has stabilised its production during the year. Cera holds 51% Equity. The quality products are available and capacity utilization has increased gradually during the year.

Dubai operations

As business conditions in the Gulf Countries have changed, so has the company’s strategy. The Company owned (25% share) Cera Sanitaryware Trading LLC - Dubai, UAE is no more required. The Board of Directors at their meeting held on 5th August, 2020 had approved discontinuance of the business operations of Cera Sanitaryware Trading LLC - Dubai, UAE and now all formalities for its closure have been started and it is in process.

Green Energy Unit

As a part of national policy and Green initiative, which was initiated in 1995, Company has stabilized power cost by generation of electricity through non-conventional sources for captive use through wind and solar.

The current installed capacity of Non-Conventional Energy unit of the Company stands to 10.325 M.W.

The non-conventional Wind and Solar Power has produced 140.81 lakhs KWH for captive use.

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

Conservation of energy

The Company has two sources of its main energy, viz. Natural Gas - GAIL and Sabarmati Gas Ltd., for operating its Sanitaryware plant. The pricing of both sources differ, as GAIL sources gas from isolated wells in and around Cera’s manufacturing facility, and is able to contract gas at a lower price over prevailing market pricing. Medium term contracts with these suppliers are renewed on a periodic basis. For energy conservation, the company has installed fuel efficient burners to control gas consumption and in addition to this, every effort is made by the company to adapt any technological developments in energy conservation.

The second energy, viz. electricity, required for running the machineries, is supplied by the local Discom. To compensate the energy consumption by way of electricity, your Company has an installed capacity of Wind Turbines of 8.325 MW and Solar Plants of 2.00 MW which generates about 95% of the company’s electricity requirement and this gets offset against monthly consumption of the energy bill.

Technology absorption and foreign exchange earnings and outgo

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

Subsidiary Company

The Company has one Subsidiary Company namely Anjani Tiles Limited which became subsidiary of the Company w.e.f. 23rd November, 2015. The Company also has two subsidiary LLP viz. Packcart Packaging LLP and Race Polymer Arts LLP.

There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). Further there has been no material change in the nature of business of the subsidiary. The Company does not have any material subsidiary. The Policy on Material Subsidiary framed by the Board of Directors of the Company is available on Company’s website at the link https:// www.cera-india.com/corporate/policy-for-determining-material-subsidiary/.

Those Shareholders who are interested in obtaining a copy of the audited annual financial statements of the subsidiary may write to the Company. The Audited financial statements of all subsidiaries are available on the website of the Company www.cera-india.com

Pursuant to the provisions of Section 129, 134 and 136 of the Companies Act, 2013 with rules made thereunder and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has prepared consolidated financial statements of the Company and salient features of the financial statement of the subsidiaries is set out in the prescribed form AOC-1 attached herewith as a separate Annexure - IV to this Annual Report.

Particulars of contracts or arrangements with related parties

All transactions entered with Related parties as defined under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 during the financial year were in the ordinary course of business and on an arm’s length basis, the details of which are included in the notes forming part of the financial statements.

There were no material related party transactions entered during the year. Accordingly, information in form AOC - 2 is not annexed. Further no materially significant related Party transactions were made by the Company with Directors, Key Managerial Personnel or other designated Persons, which may have a potential conflict with the interest of the Company at large. All related party transactions were placed before the Audit Committee and also the Board for approval. The Policy on related Party transactions as approved by the Board is uploaded on the Company’s website i.e. www.cera-india.com.

Corporate Social Responsibility

Your Company has always laid emphasis on progress with social commitment. We believe strongly in our core values of empowerment and betterment of not only the employees but also our communities.

Following this principle the Company had laid the foundation of a comprehensive approach towards promoting and facilitating various aspects of our surrounding communities.

The Board has approved a policy for Corporate Social Responsibility and same has been uploaded on the website i.e. www.cera-india.com. As required under Section 135 of the Companies Act, 2013 and to demonstrate the responsibilities towards Social upliftment in structured way, the Company has formed a Policy to conduct the task under CSR, during the year.

The Annual Report on Corporate Social Responsibility (CSR) Activities alongwith Annexure as per Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as a separate Annexure–V and separate activity wise CSR Report has been annexed as per Annexure -II.

Directors’ Responsibility Statement

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

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

that such accounting policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2021 and of the Profit of the Company for the year ended on that date.

that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

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

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

Managerial Remuneration and Employees

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

Details of employees required pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed as a separate Annexure, however it is not being sent along with this annual report to the members of the Company in line with the provisions of Section 136 of the Companies Act, 2013 and rules made there under. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The aforesaid Annexure is also available for inspection by members at the Registered Office of the Company, 21 days before and up to the date of the ensuing Annual General Meeting during the business hours on working days.

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

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

Corporate Governance and Management Discussion and Analysis

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, report on Corporate Governance along with Practicing Company Secretary’s Certificate on its compliance and Management discussion and Analysis have been included in this Annual Report as per separate Annexure-VII and Annexure-I respectively.

Business Responsibility Reporting

As required under Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, Business Responsibility Report forms part of the Directors’ Report and is enclosed as separate Annexure-VIII.

Number of Meetings of the Board

The Board of Directors, during the financial year 2020-21 duly met 5 times on 04.06.2020, 30.06.2020, 05.08.2020,10.11.2020 and 02.02.2021 in respect of these meetings, proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purpose.

Annual Return

Pursuant to Section 134(3)(a) and Section 92(3) of the Act, the Copy of Annual Return of the Company for the financial year ended March 31, 2021 will be placed on the Company’s website at www.cera-india.com.

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

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

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

Risk Management Policy

The Board has approved and implemented Risk Management Policy of the Company including identification and element of risks.

Pursuant to amendments in SEBI (Listing Obligations and Disclosure Requirements Regulations), 2015, the Board of Directors of the Company has constituted the Risk Management Committee having its scope and functions as per Risk Management policy. The Committee shall also review cyber security matters of the company at various levels and also take necessary actions from time to time to mitigate the cyber risk to the Company in accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness.

The Risk Management system is also overseen by the Audit Committee / Board of Directors of the Company on a continuous basis. The major risks identified by the businesses are systematically addressed through mitigation actions on a continual basis. For details please refer to the Management Discussion and Analysis enclosed as separate Annexure - I to this report.

Audit Committee

The Company has constituted Audit Committee in terms of the requirements of the Act and rules framed thereunder and applicable listing regulations. For details please refer Corporate Governance Report attached as a separate Annexure-VII.

Internal Control System and its adequacy

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


Your Directors recommended a dividend of Rs. 13/- per share (260%) (Previous year Interim Dividend of Rs. 13/- per share (260%)) on 1,30,05,874 equity shares of Rs. 5/- each fully paid for the year ended 31.03.2021, to be paid subject to the approval of the members at the ensuing Annual General Meeting.

During the year, the unclaimed dividend pertaining to the financial year ending 2012-13 were transferred to the Investor Education and Protection Fund.

Share Capital

The paid-up Equity Share Capital as on 31st March, 2021 was Rs. 650.29 Lakhs. During the year under review the Company has not issued any shares.

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

During the year the Company has transferred 4722 Equity Shares to Investor Education and Protection Fund, pursuant to the provisions of sections 124 & 125 of the Companies Act, 2013 and Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016.


The Company has contributed Rs. 12,846 Lakhs to the exchequer by way of GST, customs duty, service Tax, income tax, VAT, sales tax and other fiscal levies.


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


During the year under review, the Company does not have any long term loans/debts from Financial Institutions and Banks.

During the year there is not default in payment of loan from Bank or Financial Institution, therefore details of difference between amount of valuation done at the time of one time settlement and valuation done while taking loan from bank or financial institutions is not applicable.

Directors and KMP

Shri SajanKumar Pasari, Shri LalitKumar Bohania, Shri Surendra Singh Baid and Ms. Akriti Jain are the Independent Directors of the Company and they will not retire by rotation. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and there has been no change in the circumstances which may affect their status as Independent director during the year under review and have also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence. The Company keeps informed independent directors about changes in the Companies Act, 2013 and rules and other related laws from time to time and their role, duties and responsibilities.

Due to personal reasons and other professional commitments, Shri J. K. Taparia has resigned as Director of the Company w.e.f. 6th February, 2021. The Board placed its warm appreciation for the contribution made by him as a director during the tenure on the Board of the Company.

Shri Ayush Bagla (DIN–01211591), is liable to retire at the end of the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

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

The resolutions proposing the reappointment of the Director is set in the notice convening Annual General Meeting for approval of members.

Board Evaluation

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

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

Policy on Directors appointment and remuneration

Criteria determining the qualifications, positive attributes and independence of Directors.

Independent Directors

• Qualifications of Independent Director

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

• Positive attributes of Independent Directors

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

• Independence of Independent Directors

An Independent director should meet the requirements of Section 149(6) of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 and give declaration every year to the Board of Directors for the same.

Other Directors and Senior Management

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

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

Other details are disclosed in the Corporate Governance Report under the head Nomination and Remuneration Committee and details of Remuneration (Managing Director / Whole Time Director(s) and Non-Executive Directors) are attached as a separate Annexure-VII to this Report.

Remuneration / commission from Holding or Subsidiary Company

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

Remuneration Policy

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

Auditors and their Observations

N. M. Nagri & Co., Chartered Accountants are the statutory auditors of the Company. They are appointed for a period of five years, from the conclusion of 19th AGM till the conclusion of the 24th AGM (AGM of financial year 2021-22).

Pursuant to amendment to section 139 of the Companies Act, 2013 effective from May 7, 2018, ratification of Statutory Auditors’ appointment is not required at every Annual General Meeting. Accordingly, resolution for ratification of Statutory Auditors is not proposed.

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

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

Cost Records and Cost Auditors

The Company is required to maintain cost records under Companies (Cost Records and Audit) Rules, 2014. Accordingly, cost records have been maintained by the Company.

The Company has appointed K.G. Goyal & Co., as Cost Auditors for conducting cost audit for the year 2021-22.

Secretarial Audit

Pursuant to provisions of Section 204 of Companies Act, 2013 and rules made there under, the Company had appointed Parikh Dave & Associates, Practicing Company Secretaries to undertake the Secretarial Audit of the Company for the year 2020-21.

The Secretarial Audit Report for the year 2020-21 given by Parikh Dave & 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 Machinery, Building and Stocks.

Industrial Relations

The Company has successfully signed a Long-Term Settlement (LTS) under section 12(3) of Industrial Disputes Act, 1947, for 4 years with workers Union on 4th August, 2017 which was due on 01st September, 2017. The LTS was signed in harmonious environment and without any labour unrest and loss of production. The next LTS will fall due on 01st September, 2021.

The Company has adequate skilled & trained workforce for its various areas of operations and the skills upgradation of which is being done on continuous basis for improving the plant operations and quality process.

The Company has taken sufficient measures to maintain Industrial Health and Safety at its workplace for employees as laid in the Gujarat State Factories Rules, 1963. The Company is also complying and maintaining all applicable Industrial and Labour laws/ rules.

The manufacturing activities in respect of Sanitaryware Unit have been materially affected, while that of Faucetware Unit have been affected marginally as a result of partial disruption by workers at the Company’s plant located at Kadi, from September 28, 2020 to December 22, 2020. During the said period, dispatches were continued as usual. This has moderately impacted the financial performance of the Company for the current financial year. The Company has in place a Policy against Sexual Harassment at workplace in line with the requirement of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committees have been set up to redress complaints received regarding sexual harassment. The Company has not received any complaints during the year under the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has organized 2 workshops under the said Act during the year under review.

Material changes affecting financial position of the Company

No material changes or commitments, affecting the financial position of the Company have occurred between the end of the financial year of the Company to which the financial statements relate, i.e. 31st March, 2021 and the date of the Board’s Report.

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

Change in nature of business

No changes have been made in nature of business carried out by the Company during the financial year 2020-21.

Orders passed by Regulatory Bodies or Courts

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

Vigil Mechanism

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

Annexure-VII. Appreciation

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

For and on behalf of the Board of Directors,

For Cera Sanitaryware Limited

Vikram Somany

Chairman and Managing Director



10th June, 2021