Market & News

Transfer to Reserves

The Company has transferred a sum of ' 4383.93 Lakhs to General Reserve in the current year (previous year ' 3439.58 Lakhs).

Highlights / Performance of the Company

Turnover (Net of GST) of the Company for the year increased by 24.68% (' 1,79,324.33 Lakhs in FY 2022-23 as compared to ' 1,43,826.26 Lakhs in FY 2021-22).

EBITDA for the year increased by 32.19% (' 32,256.88 Lakhs in FY 2022-23 as compared to ' 24,402.76 Lakhs in FY 2021-22).

Profit after Tax for the year increased by 40.37% (' 20,965.58 Lakhs in FY 2022-23 as compared to ' 14,935.98 Lakhs in FY 2021-22).

Exceptional Item :

During the financial year 2018-19, the Company acquired share capital worth ' 806 Lakhs in M/s Milo Tile LLP ("Milo") which was a vendor of tiles for the company. During financial year 2022-23 Milo has been unable to maintain product quality parameters which has forced the Company to discontinue procuring tiles from Milo, and raise claims based on inferior quality products supplied by Milo. The Company has served Legal notices on Milo and the other LLP partners for violation of certain terms of the Investment Agreement.

Considering the above as well as other available information, as a matter of abundant caution, the management has decided to provide for an Impairment Loss of ' 500 Lakhs in the books of accounts which has been disclosed as an "Exceptional Item" in the financial statements. However, the Company is taking all necessary steps for recovery of the same.

Dividend

Your Directors recommended a dividend of ' 50/- per share (1000%) [Previous year Dividend of ' 20/- per share (400%) and Special dividend of ' 15/- per share ( 300%)] on 1,30,05,874 equity shares of ' 5/- each fully paid for the year ended 31.03.2023, to be paid subject to the approval of the members at the ensuing Annual General Meeting.

Pursuant to the requirements of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations'), the Dividend Distribution Policy of the Company is available on the Company's website at https://www.cera-india.com/policy-and- statutorv-documents/dividend-distribution-policv

During the year, the unclaimed dividend pertaining to the financial year ending 2014-15 were transferred to the Investor Education and Protection Fund.

Sanitaryware Unit

Your Company has increased its production volume based on the product demand generated from the market, utilizing all its available resources.

Active collaboration of workmen and staff in new initiatives on safety, quality, delivery, and cost have resulted into improved product yield and on time product delivery.

Your Company is following best manufacturing practices for building the culture of Continuous Improvement. The major activities that include waste elimination, KAIZEN, dedicated projects on cost saving and sustainability, has improved the utilization of deployed resources.

Your Company is committed towards developing new and innovative product design including one-piece EWC, high end and rimless Wall Hung EWC, Lustre series products etc, through its dedicated product NPD team.

Institutionalization of various knowledge sharing forums, review mechanisms, process controls and standard operating procedures has helped in achieving repeatability and reproductibility of new SKUs.

Workmen are actively participating in activities like sports day, counselling, reward and recognition and various continuous improvement activities, generating positive vibes and trust building at shop floor.

Your Company will continue to deliver the high-quality products to its valued customer as per demand, making optimum utilization of the resources.

Faucet ware Unit

Your Company has witnessed growth in terms of production and sales volume, which lead the company to reach to the optimum level of achievements. Company shall continue achieving the same through various debottlenecking projects, SOP compliances and automation of the processes.

Your Company expects even higher growth in the coming times in its Faucets business. With this in view, company has launched new colour faucet designs in line with the changing customer preferences and market need. A total of 330 new products were launched during the year.

Company will also emphasis the development and sale of WATER saving products which are very crucial for the sustenance of environment and preservation of ecosystem. There are close to 48% of products offering in the portfolio which can also be offered as water saving products.

Bathware Unit

Your Company continued launches of new products and designs. New technology-based products like Smart electronic toilet, Tankless Wall Hung closets and One Pc EWC's with Vibe sense touchless flushing technology and modern design table top basins along with wall hung closets for retail spaces were developed and launched.

Senator by CERA

Senator was re-introduced with latest collection of premium bathroom suites, bringing together sophisticated designs and quality sanitaryware products to create truly artistic spaces.

Lustre by CERA

Lustre by Cera was yet another brilliant design innovation that your company is proud to have. A range of colour faucets, sanitaryware, showers and bath accessories designed to splash character and charisma into the modern Indian bathroom space.

Highest Share of voice in Media

Your company CERA used high impact media strategy to increase the brand reach and consumer exposure. A combination of GEC (General Entertainment Channels) - Impact properties and news program used to expose the new TV Campaign ‘This is your space, Play it your way? on television to consumers. Campaign started in Oct 2022 end where we advertised our new Television Commercial Advertisement featuring brand ambassadors, style icons - Kiara Advani and Vijay Deverakonda. Our media mix had high frequency

Hindi / English news channels. For HSM (Hindi Speaking Market) market, your company took "Kaun Banega Crorepati" the biggest show of Indian Television as associate sponsor, in addition CERA also sponsored popular show like "India Idol". For Non HSM market, Big Boss Season-6 Telugu version was sponsored for Telangana and Andhra Pradesh market, Big Boss Season - 9 Kannada as special partner sponsorship for Karnataka market, and in last quarter your company advertised heavily in News channels - Hindi, English and Regional languages.

Brand CERA in Digital Media

India's youth spend lot of time on social media, so to reach out to our young consumers your company also took lot of engagement initiatives such as social media topical / product post and consumer participation fun contest. Other initiatives were also taken to increase brand recall and search i.e. Google display ads, remarketing and sustenance campaigns, Search engine optimization, Search engine maximization and others.

Trade expansion and development with brand stores

A complete retail expansion program was launched with a view to increase exclusive / non-exclusive brand stores and deliver ultimate consumer experience.

CERA focused to support channel partners by helping them to build brand stores - Cera Style Galleries, Cera Style Hub, Cera Style Centre, Cera Tile Galleries and Cera Tile Centres. This created a strong brand visibility in the market and give our consumers an experience to remember and facilitate better decision making. CERA also revamped the Mumbai & Kadi company owned Style studio, and have plans for Chandigarh, Bengaluru and Morbi going ahead.

Core Business

Our efforts will remain consistent and true to build our core businesses - Sanitaryware, Faucet and Tiles.

Loyalty Program

CERA Superstar, a loyalty program launched for retailer / sub dealer to reward the purchases made by Retailers from our CERA's authorised dealers. The program became super successful and we build the community of 15000+ retailers.

Skill development and Training

CERA rigorously conduct training sessions to upskill the knowledge of plumbers and masons. This enables them to get better wages, resolve customer query satisfactorily and install products hassle- free. CERA thrives to bring One Culture One Communication among all employees in the organisation, hence various training sessions organised for workers and employees on One culture.

Awards

CERA won the most affiliated awards such as "Super brand 2023" and was also recognized for Realty + INEX Awards 2023 Marketing Campaign of the Year and Brand of the Year.

Tiles Unit

Your Company made rapid strides in the Tiles segment by launching 500+ new designs.

Joint Ventures

M/s Anjani Tiles Limited ceased to be a subsidiary of the Company effective from 23^rd March, 2023 upon receiving the entire consideration as per the terms of MOU and SPA (Share Purchase Agreement) executed in FY 2021-22.

M/s Milo Tile LLP, an associate LLP of the Company, is in to manufacturing of high-end vitrified Tiles. During the current financial year, Milo has been unable to maintain product quality parameters which has forced the Company to discontinue procuring tiles from Milo, and raise claims based on inferior quality products supplied by Milo. The Company has served Legal notices on Milo and the other LLP partners for violation of certain terms of the Investment Agreement.

Packaging Unit

CERA holds 51% stake in Joint Venture unit i.e. Packcart Packaging LLP for manufacture of corrugated boxes which has now achieved full utilisation of production. The products are now available on a just in time basis, built to the exact specifications for the Company.

Polymer Unit

The Joint venture for Polymer Products unit i.e. Race Polymer Arts LLP for manufacturing of seat covers and cisterns has reached optimum capacity of its production during the year. Cera holds 51% Stake. The quality products are available and capacity utilization has increased gradually during the year.

Green Energy Unit

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

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

The non-conventional Wind and Solar Power has produced 124.82 lakhs KWH for captive use.

Conservation of energy

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

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

Technology absorption and foreign exchange earnings and outgo

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

Environmental Social Governance (ESG)

Cera follows a holistic approach towards Environmental, Social and Governance matters. Cera values the trust reposed by its stakeholders including customers, the communities in which it operates and society at large and has strived hard to protect and preserve their interests.

Environment at Cera

Cera is highly committed to ensuring zero environmental impact due to its operations. The Company stringently adheres to norms governing reduction of emissions, pollution control and other environmental aspects. Some of the broad initiatives undertaken by the Company include:

• Installation of a rooftop solar power system (one of the largest in the Kadi region), which has gone a long way in substantially reducing the carbon footprint.

• Cera has managed to stabilize power cost by generating electricity through non-conventional sources (wind and solar) for captive use; as of FY23, its total installed non-conventional energy capacity stood at 10.325 MW, which produced 124.82 lakh units. Maximum of its energy needs are met through renewable energy.

• In its initiative to conserve biodiversity, the Company has undertaken plantation of over 10,000 plus trees.

• By successfully developing a fully functional rainwaterharvesting system, Cera has managed to reduce dependence on ground water usage. Further, by recycling water used for the manufacturing process the Company has reduced the water intensity of its operations.

• Cera Faucet ware has upgraded the Zero Liquid discharge plant to meet the requirement of higher norms of the government.

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

Social dimension at Cera

For the past several years, Cera has been actively involved in various social welfare activities. Over a span of 5 years, Cera has spent more than ' 15 crore for development within Kadi district (a tier 3 developing industrial area) and surrounding areas. Additionally, the Company at regular intervals provides necessary safety and skill up-gradation training to its permanent as well as its contractual employees. The Company has systems in place to ensure no child labour, forced or involuntary labour at its facilities. During the financial year 2022-2023, the Company has spent ' 300.03 Lakhs towards CSR activities mainly in the areas of education, healthcare, rural development, woman empowerment and eradicating hunger. Cera has received appreciation from Ex Dy CM of Gujarat for driving various CSR initiatives like promoting environment, propagating accident-free zones, educational facilities for the society, setting up health care facilities at various hospitals. Government authorities have appreciated CERA on World TB Day to serve the TB Patients; for setting up robust technological set up at ESIC hospitals & Bhagyoday Private hospital. Cera has been involved with Collector and Commissioners for excavating ponds at nearby villages.

Governance at Cera

Adhering to the best Corporate Governance practices has been a strong endeavor of the Company since its inception. The organization strongly believes that there is a direct association between good corporate governance practices and stakeholder value enhancement. To ensure protection of interests of all stakeholders of the Company, Cera has adopted various strict governance related policies to the best governance practices. Its policy relating to ethics, bribery and corruption serves as the guiding philosophy for its employees. The Company also has a whistle blower policy in place, which provides a platform to all employees, vendors and customers to report any suspected fraud or error or confirmed incident of fraud / misconduct. Through prudent strategies the Company has optimized asset utilization and preserved the collective funds at its disposal by avoiding unrelated diversification or over-ambitious expansion. By ensuring fair and ethical dealings with all stakeholders, the Company has a robust track record of Corporate Governance practices.

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

Subsidiary Company

The Company has two Subsidiary LLPs namely Packcart Packaging LLP & Race Polymer Arts LLP.

There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 ("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/policv-for-determining- materialsubsidiary

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

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

Pursuant to the Resolution passed at the Board Meeting held on 5^th August, 2021 the Company had decided to divest the Company's entire stake in Anjani Tiles Limited, a subsidiary company and accordingly a Memorandum of Understanding (MOU) was executed on 17^th August, 2021 by and amongst Cera Sanitaryware Limited (Cera), Anjani Vishnu Holdings Ltd (AVHL) (Joint Venture Partner and Acquirer Company) and Anjani Tiles Limited (ATL) (Subsidiary Company) for a total consideration of ' 2,869.20 Lakhs.

The Company, AVHL and ATL also entered in to Share Purchase Agreement (SPA) dated 26^th August, 2021 pursuant to which the Company agreed to sell all the Equity and Preference Shares held by it in ATL to AVHL.

As on 31^st March, 2022, the Company's shareholdings in Equity and Preference shares in ATL were presented as Non-current Assets classified as Held for Sale as per Indian Accounting Standard - 105 - "Non-current Assets Held for Sale and Discontinued Operations".

The consequential impairment loss of ' 573.80 Lakhs due to above arrangements was recognised in the Statement of Profit and Loss as Exceptional Item in the financial year ended 31^st March, 2022.

As on 31^st March, 2023, the total consideration of ' 2,869.20 Lakhs has been fully realised (' 643 Lakhs in financial year 2021-22 and the balance consideration of ' 2,226.20 Lakhs in financial year 2022-23).

Accordingly, Anjani Tiles Limited has ceased to be a subsidiary of the Company. Apart from this, no other company has become or ceased to be subsidiaries, joint ventures or associate companies during the financial year 2022-23.

Particulars of contracts or arrangements with related parties

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

There were no material related party transactions entered during the year. Accordingly, information in form AOC - 2 is not annexed. Further no materially significant related Party transactions were made by the Company with Directors, Key Managerial Personnels or other Designated Persons, which may have a potential conflict with the interest of the Company at large. All related party transactions were placed before the Audit Committee and also the Board for approval. The Company has framed a policy on RPTs for the purpose of identification, approval and monitoring of such transactions. The policy on Related Party Transactions is hosted on the Company's website at https://www.cera-india.com/policy- and-statutory-documents/related-party-transaction

Corporate Social Responsibility

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

CERA believes that real progress occurs when privileges are balanced with the responsibilities towards society. CERA has always laid emphasis on progress with a social commitment. CERA believe strongly in core values of empowerment and betterment of not only their employees but also of society/ communities. Following this principle, Late Shri Vidush Somany, our Company's Executive Director had laid the foundation of a comprehensive approach towards promoting and facilitating various aspects of surrounding communities. CERA CSR Policy focuses on six thrust areas in which CSR activities are planned - a) eradicating hunger and malnutrition b) promoting healthcare including preventive health care c) promoting education, including special education d) employment enhancing vocational skills among women e) empowering rural women f) Rural Development. Following this principle the Company had laid the foundation of a comprehensive approach towards promoting and facilitating various aspects of our surrounding communities.

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

A brief Report on Corporate Social Responsibility (CSR) Activities alongwith Annexure as per Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as a separate Annexure-IV and separate activity wise CSR Report has been annexed as Annexure -II to this report..

Directors and KMP

During the year under review and upon the recommendation of Nomination and Remuneration Committee Shri Ravi Bhamidipaty has been appointed as an Independent Directors of the Company w.e.f. 4^th August, 2022 for the term of 3 years and subsequently his appointment was approved by the members of the Company through Postal ballot process on 21^st October, 2022. Accordingly, the Board is comprising of five Independent Directors namely, Shri Sajan Kumar Pasari, Shri Lalit Kumar Bohania, Shri Surendra Singh Baid, Ms. Akriti Jain and Shri Ravi Bhamidipaty.

They will not retire by rotation. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and there has been no change in the circumstances which may affect their status as Independent director during the year under review and have also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence. The Company keeps informed independent directors about changes in the Companies Act, 2013 and rules and other related laws from time to time and their role, duties and responsibilities. Term of Ms. Akriti Jain an Independent Director will expire on 31^st March, 2024, necessary resolution proposing her reappointment as Independent Director for further term of five years is proposed for the approval by the members at the ensuing Annual General meeting of the Company. The Board recommends her appointment for approval of the members of the Company.

The Board of Directors have appointed Shri Anupam Gupta as an Executive Director (Technical) of the Company for period of 3 years w.e.f. 15^th October, 2021 and Shri Ayush Bagla as an Executive Director for a period of three years w.e.f. 14^th May, 2022 and Shri Vikram Somany as Chairman and Managing Director for a period of five years w.e.f. 1^st July, 2022 and simultaneously the members at their 24^th Annual General Meeting held on 30^th June, 2022 approved their appointments/re-appointments.

Shri Ayush Bagla, is liable to retire at the ensuing Annual General Meeting and being eligible, offers himself for reappointment.

The resolutions proposing the reappointment of the Directors are set out in the notice convening Annual General Meeting for approval of members. The Board recommends for approval of the same.

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

Shri Rajesh B. Shah, Chief Financial Officer of the Company who had attained the age of superannuation, has retired from the services w.e.f. close of working hours of 31^st March, 2023. The Board of Directors have appointed Shri Vikas Kothari (who was working as Deputy Chief Financial Officer), as Chief Financial Officer of the Company w.e.f. 1^st April, 2023.

Number of Meetings of the Board

The Board of Directors, during the financial year 2022-23 duly met 4 times on 10^th May, 2022, 4^th August, 2022, 7^th November, 2022, and 2^nd February, 2023 in respect of these meetings, proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purpose.

Audit Committee

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

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 31^st March, 2023 and of the Profit of the Company for the year ended on that date;

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

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

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

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

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

Policy on Directors appointment and remuneration

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

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/her professional obligations for informed and balanced decision making; and assist the Company in implementing the best corporate governance practices.

• Independence of Independent Directors.

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

Other Directors and Senior Management

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

The Company shall not appoint or continue the employment of any person as Whole-time Director or Senior Management Personnel if the evaluation of his / her performance is not satisfactory. Other details are disclosed in the Corporate Governance Report under the head Nomination and Remuneration Committee and details of Remuneration (Managing Director / Whole Time Director(s) and Non-Executive Directors) are attached as a separate Annexure- VI to this Report.

Familiarisation Programme for Independent Directors

The Directors are regularly informed during meetings of the Board and Committees on the business strategy, business activities, manufacturing operations, regulatory updates and issues faced by the ceramic industry. The Directors when they are appointed are given a detailed orientation on the Company, industry, regulatory matters, business & financial matters, human resource matters and corporate social responsibility. The details of Familiarisation programmes provided to the Independent Directors of the Company are available on the Company's website https://www.cera-india.com/ policv-and-statutorv-documents/familiarization-programme

Remuneration / Commission from Holding or Subsidiary Company

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

Remuneration Policy

This Nomination and Remuneration Policy ("Policy") provides the framework and key guiding principles to be followed in for appointment and determination of remuneration of Directors, Key Managerial Personnel and Senior management personnel.

This Policy is to establish and govern the procedure applicable:

a) To evaluate the performance of the members of the Board.

b) To ensure remuneration to Directors, KMP and Senior Management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

c) To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.

The said Policy is available on the website of the Company http:/ www.cera-india.com/sites/default/files/2022-05/Nomination-and- Remuneration-policy.pdf

Managerial Remuneration and Employees

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

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

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

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

Corporate Governance and Management Discussion and Analysis

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, report on Corporate Governance and Management discussion and Analysis have been included in this Annual Report per separate Annexure-VI and Annexure-I respectively.

Business Responsibility and Sustainability Report ("BRSR")

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

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 31^st March, 2023 will be placed on the Company's website at www.cera-india.com.

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

No loan, guarantee or security has been provided by the Company during the year under review. Details of Investments covered u/s 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

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 designed to safeguard the organisation from various risks through adequate and timely action. It is designed to anticipate, evaluate and mitigate risks in order to minimise its impact on the business.

The Risk Management system is also overseen by the Audit Committee / Board of Directors of the Company on a continuous basis. The major risks identified by the businesses are systematically addressed through mitigation actions on a continual basis.

Internal Control System and its adequacy

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

Share Capital

The paid-up Equity Share Capital as on 31^st March, 2023 was ' 650.29 Lakhs. During the year under review the Company has not issued any shares. No shares with differential voting rights, stock or sweat equity shares were issued by the Company during the year under review.

During the year the Company has transferred 5031 Equity Shares to Investor Education and Protection Fund, pursuant to the provisions of sections 124 & 125 of the Companies Act, 2013 and Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016.

Exchequer

The Company has contributed ' 20,658.61 Lakhs to the exchequer by way of GST, customs duty, Income tax, VAT and other fiscal levies.

Deposits

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

Finance

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

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

Statutory Auditors and their Observations

Singhi & Co., Chartered Accountants are the statutory auditors of the Company. They are appointed for a period of five years, from the conclusion of 24^th AGM till the conclusion of the 29^th AGM (AGM of financial year 2026-27).

The Auditors' Report to the members for the financial year under review does not contain any qualification, reservation or adverse remark or disclaimer.

Cost Records and Cost Auditors

The Company is required to maintain cost records under Companies (Cost Records and Audit) Rules, 2014. Accordingly, cost records have been maintained by the Company. The Company has appointed K.G. Goyal & Co., as Cost Auditors for conducting cost audit for the year 2023-24.

As required by the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the members in General Meeting for their ratification. Accordingly, a resolution seeking ratification of the remuneration payable to M/s. K.G. Goyal & Co., as approved by the Audit Committee and Board is included in the Notice convening the Annual General Meeting of the Company.

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 a peer reviewed firm to undertake the Secretarial Audit of the Company for the year 2022-23. The Secretarial Audit Report for the year 2022-23 given by Parikh Dave & Associates, Company Secretaries in practice is attached as a separate Annexure VIII. The Secretarial Audit Report do not contain any qualification, reservation or adverse remark for the financial year ended on 31^st March, 2023.

Reporting of Frauds

During the year under review, the Statutory Auditors, Cost Auditors and Secretarial Auditors have not reported any instances of fraud committed in the Company by its Officers or Employees to the Audit Committee and / or Board under section 143(12) of the Act.

Secretarial Standards

The Company is complying with the applicable Secretarial Standards.

Insurance

Your Company has adequately insured all its properties including Plant and Machinery, Building and Stocks.

Industrial Relations

The Company had executed bilateral agreement for duration of four year with workmen with detailed quantification of fixed and variable wages. A similar agreement on completion of the previous agreement's tenure was signed under section 2(p) 18(1) of Industrial Disputes Act, 1947, for 4 years with workers Union on 4^th August, 2021 which became effective from 1^st September, 2021. The new wage agreement was executed in harmonious environment.

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

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

The Company has in place a Policy against Sexual Harassment at workplace in line with the requirement of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committees have been set up to redress complaints received regarding sexual harassment. The Company has not received any complaints during the year under the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has organized 2 workshops under the said Act during the year under review.

Material changes affecting financial position of the Company

No material changes or commitments, affecting the financial position of the Company have occurred between the end of the financial year of the Company to which the financial statements relate, i.e. 31^st March, 2023 and the date of the Board's Report.

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

Change in nature of business

No changes have been made in nature of business carried out by the Company during the financial year 2022-23.

Orders passed by Regulatory Bodies or Courts

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

Vigil Mechanism

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

Appreciation

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