Dear members,
Yours Directors have pleasure in presenting their 55th
Board's Report together with the Annual Audited Financial Statements of the Company for
the year ended 31 March, 2023.
FINANCIAL HIGHLIGHTS
(' in Lakhs)
| Particulars |
Standalone |
Consolidated |
|
Year Ended |
Year Ended |
Year Ended |
Year Ended |
|
31 March, 2023 |
31 March, 2022 |
31 March, 2023 |
31 March, 2022 |
| Revenue from operations |
244,270.07 |
207,380.24 |
247,850.73 |
209,446.05 |
| Other Income |
2,768.14 |
2,211.57 |
1,454.27 |
1,341.92 |
| Expenses (except Depreciation, Finance cost) |
229,605.98 |
192,355.56 |
228,980.33 |
188,792.51 |
| Profit Before Depreciation, Interest and Taxes (Before
exceptional item) |
17,432.23 |
17,236.25 |
20,324.67 |
21,995.46 |
| Profit before Tax (after Exceptional item) |
12,191.58 |
11,695.55 |
9,285.75 |
12,636.25 |
| Tax Expenses |
3,183.11 |
2,916.78 |
2,594.09 |
3,294.62 |
| Profit After Tax |
9,008.47 |
8,778.77 |
6,691.66 |
9,341.63 |
| Profit After Tax (attributable to controlling interest) |
9,008.47 |
8,778.77 |
7,149.16 |
8,868.71 |
| Profit After Tax (attributable to non-controlling interest) |
- |
- |
(457.50) |
472.92 |
| Transferred to General Reserve |
- |
- |
- |
- |
FINANCIAL REVIEW
(The financial discussion is based on Standalone Financial Statements)
There were lot of challenges on account of economic uncertainties all
around the world including severe volatility in gas prices. These uncertainties led to a
significant increase in input costs in general and energy cost in particular. This
affected the financial performance of your Company adversely, causing pressure on margins.
Despite all the odds your Company was able to end the year on a positive note and
demonstrated the resilience of brand SOMANY.
Our revenue increased by 17.8% to Rs 2,44,270.07 Lakhs in 2022-23 from
Rs 2,07,380.24 Lakhs in FY22 in line with the improvement in overall market demand. The
Profit before Interest, Depreciation and Tax and exceptional item, Profit before Tax (PBT)
after Exceptional item and Profit after Tax (PAT) for the year under review, were Rs
17,432.23 Lakhs, Rs 12,191.58 Lakhs and Rs 9,008.47 Lakhs respectively.
The marginal decline in profit margin is on account of the sharp
increase in inputs costs primarily led by gas price. On the Balance Sheet front, your
Company's Net Worth increased to Rs 78,320.80 Lakhs in 2022-23 as compared to Rs 70,403.15
Lakhs in FY22. The Company's total debt decreased to Rs 17,612.9 Lakhs in 2022-23 as
compared to Rs 21,484.11 Lakhs during FY22 on repayment of term loan and reduction in
short term borrowings. The net block of your Company marginally increased to Rs 46,247.79
Lakhs during 2022-23 as compared to Rs 45,854.58 Lakhs during FY22. The long-term
investment increased to Rs 13,159.78 Lakhs in 2022-23 from Rs 9, 619.78 Lakhs in FY22
primarily due to investments in a new subsidiary, which is setting up manufacturing plant
of large format tiles/ slabs.
The Company's net current assets (adjusted) increased to Rs 13,570.57
Lakhs during 2022-23 from Rs 11,774.71 Lakhs during FY22, inline with the increase in the
scale of operations.
CORPORATE HIGHLIGHTS Access to Capacity
During the year under review, your Company had increased its capacity
in tiles significantly by way of expansion/ modernisation at three different locations. As
a result, the access to tile capacity increased to ~76 million square meters (msm) divided
amongst its own plants (33.45 msm), subsidiaries/associates (28.41 msm) and other
outsourcing tie-ups (~14 msm).
In the Bathware segment, your Company had manufacturing capacity of
0.78 million pieces per annum of sanitaryware and 1.13 million pieces per annum of bath
fitting items in its subsidiaries. The capacity of bath fittings plant doubled from 0.65
to 1.13 million pieces per annum during the year.
Capital Expenditure
Your Company continues to invest in additional capacity and upgrading
its plant & machinery and infrastructure. Gross block increased (including capital
work-in-progress) by ' 3228.34 Lakhs (previous year ' 7,569.15 Lakhs) on account of
addition in fixed assets.
Branding and Distribution
The era of COVID-19 pandemic has accelerated the shift towards digital
marketing and performance marketing. We are also increasing targeted local marketing and
footprint expansion of franchised stores for experiential purchase. The focus has been to
build top-of-mind recall and brand awareness through advertising with a data-driven
approach, leveraging multiple mediums and channels that resonates with our target audience
and differentiates us from the competition.
To maintain our leadership position we adopted an advertising strategy
that focuses on expanding our market reach to new markets and customers in tier 3 and 4
markets using traditional media. In the FY 2022-23, we showcased our TVC with celebrity
Salman Khan for a period of 5-weeks on air TV campaign in the News Genre, targeting
channels in HSM (Hindi Speaking markets). The campaign started on 12 November, 2022 and
was aired across leading News channels, including Aaj Tak, India TV, News 18, Zee News,
ABP news, Kanak News, O TV, PTC News, Republic Bharat, Saam TV and TV 9. The campaign went
live with a 360-degree approach across multiple platforms, including TV, digital &
social media, and outdoors, and was successful in reaching our target audience and
attracting newer prospects to grow our captive base and increase overall market
penetration. The campaign gained significant eyeballs which helped to elevate top of mind
brand recall and drive consideration.
In the field of digital, we have focused on social media engagement,
display & search, performance marketing and revamped our website with user friendly
interface and experience, making it more engaging, informative, and easy to navigate. Our
efforts have been directed towards making our creatives more aspirational, resulting in
improved overall engagement. We have also implemented a CRM process to deliver and nurture
leads in realtime in collaboration with our CRM team. Furthermore, we have executed Hero
Hub campaigns, including TVC ads targeted at select geo-tagged audience, resulting in a
reach of 10.5 million people, 60 million impressions, and 4.60 lakh clicks, with around 26
million video views. Similarly, we have run multiple hub campaigns on Temp Shield tiles,
Slipshield tiles and VC
Shield tiles. We have run several social campaigns evoking general
interest and engagement like "Ek Aur Diya Campaign" wherein we promoted. The use
of earthen diyas, which got good appreciation from the audience.
In the last financial year, brand SOMANY was conferred with series of
awards, including ET Best Brands award in Building material and ET Iconic brands of India
award. We also went aggressive with our PR effectively using local media to propagate the
launches of our franchise store, product launches and also facilitated management
interactions with media.
We continued expansion of our Experience centers and Franchised
showrooms providing customers with an immersive brand experience that goes beyond
traditional advertising methods. These centers are designed to engage customers and
provide them with a unique experience that helps to build brand loyalty and generate
revenue. These centers have proven to be highly effective in premiumizing the brand with
many customers willing to pay a premium for the opportunity to engage with brands in a
more meaningful way. We now have 486 franchise outlets and 17 company-owned display
centers all across India.
To enhance brand recall, we have strategically placed hoardings
pan-India at major dealer points in Tier 3 and Tier 4 towns. We also piloted a mobile
experiential activity, wherein we showcased our products in a moving vehicle which
travelled to MBO's and dealer points, showcasing our vivid range of products in Punjab.
The activity elicited a positive response.
To boost the brand imagery and for impact advertising, we continued
with our airport OOH campaign at the 5 major airports in India. Branding & POSM (Point
of Sale Material) was made available and plastered across dealer touch points throughout
the year, covering around 14000+ dealers & sub dealers.
We also launched our new series of Tile designs, called Repliq, through
a pan India product launch, and showcased it to our dealers. To further promote our
products, we conducted approximately 90 meets with masons and plumbers, with an average of
30 attendees per meeting.
In Bathware, the major focus was on the launch of the new French
collection. The launch event saw participation of over 300+ Bathware channel partners. We
created 90 Shop-In-shop customized product range displays at dealer points across India.
BTL branding was executed across 900 stores pan-India and deployed flanges across 500+
retail counters. To increase awareness amongst the Bathware influencers, specific displays
and exhibits were set up at national and international events, like at ISH Frankfurt,
world's largest exhibition for sanitaryware & bath fittings, IIA Latitude, Aces of
Spaces Award show etc. Presence on social media was upped this year with dedicated social
handles for Bathware for targeted content and engagement with specific audience with
intent on increasing awareness for the Bathware segment.
During this financial year, we have increased our footprints for Ezy
Fix adhesives. To promote Ezy Fix adhesives, we have installed unique cassette display at
all our franchise showrooms, dealer points and company owned experience centers showcasing
the complete range of adhesive products.
In conclusion, our advertising strategy has been successful in
expanding our market reach to new markets and new customers in tier 3 and 4 markets while
consolidating in the existing base using traditional media. By investing in celebrity
endorsements, innovative campaigns, and digital platforms, we have been able to
differentiate ourselves from the competition and have elicited interest for our products
amongst the new age buyers. With our focus on quality, innovation, and customer
engagement, we are well-positioned to maintain our leadership position in the industry and
confident to grow our market share.
INDIAN ECONOMY & INDUSTRY SCENARIO AND OUTLOOK Economy
Despite challenges such as disruptions in supply chains, global
monetary policy tightening, and inflationary pressures, India's economy showed resilience
and made steady progress in its recovery in 2022-23. Driven by robust domestic demand,
significant infrastructure investments, and strong private consumption, India's real GDP
grew by 7% in 202223. Inflation remained high, hovering above the Reserve Bank of India's
(RBI's) upper range at 6.8% for 2022-23 driven largely by steep increases in commodity,
food, and fuel prices. However, the RBI's aggressive interest rate hikes totaling 425
basis points since March 2022, have shown signs of reining in inflation and bringing it
back within the target band of 2% to 6%.
The economy is expected to grow by 6.5%, signaling a continued upward
trajectory for India's economy despite past challenges in 2023-24. India's prospects for
sustained growth are bolstered by ongoing structural reforms and policies aimed at
promoting investment, productivity and controlling inflationary pressures. The Union
Budget for the year 202324 outlined key priorities, which encompassed green growth, youth
empowerment, the financial sector, inclusive development, infrastructure investment, and
unlocking the potential of various sectors. A significant highlight of the budget was the
notable increase in the capital expenditure allocation, which surged by 33% to reach 3.3%
of the GDP totaling INR 10 Lakh Crore.
Industry
The Indian ceramic industry is poised to become the world's largest
ceramic producer in coming years. The sector has already established itself as a major
global player in the ceramic tile market, ranking just after to China
in terms of manufacturing, consumption, and export. This expansion is
being driven by India's expanding urbanization and construction activity, which is
increasing demand for tiles, namely glazed vitrified tiles. These tiles are popular among
customers because they are incredibly durable and have a visually attractive appearance.
The development of glazed vitrified and full-body vitrified tiles has given the industry a
huge boost, with vitrified tiles being referred to as the "tiles of the future."
Construction sector has started picking up after a long time of slump,
which will be a key driving force behind the expansion of the ceramic tiles market in
India. Furthermore, the Government of India's (GOI) various programs and investments to
support infrastructure development are adding to the market's growth. The GOI's
implementation of programs such as the Pradhan Mantri Awas Yojana (PMAY) and the Smart
Cities Mission, in particular, are expected to boost demand for ceramic tiles in India.
DIVIDEND
Based on the Company's performance during the period under review, your
Board of Directors recommends a dividend of 150% i.e. Rs 3/- per equity share for the year
ended 31 March, 2023 (previous year@ 150% i.e. Rs 3/- per share). This represent a payout
ratio of 14.1% (as against 14.5% in the previous year).
DIVIDEND DISTRIBUTION POLICY
Pursuant to Regulation 43A of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, the dividend declared by the Company is in accordance
with the Company's Dividend Distribution Policy. The Dividend Distribution Policy is
available on the website of the Company at the web link:
https://somany-uat.s3.amazonaws.com/investorrelations/
d/i/dividend_distribution_policy_scl.pdf.
RESERVES
No amount has been transferred to any reserve.
PUBLIC DEPOSITS
Your Company has not accepted any deposits within the meaning of
Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits)
Rules, 2014.
SHARE CAPITAL
As on 31 March, 2023, the Authorized Share Capital of the Company stood
at ' 32,30,00,000/- divided into 16,15,00,000 equity shares of ' 2/- each.
The Issued, Subscribed and paid up Equity Share Capital of the Company
as on 31 March, 2023 was ' 8,49,48,416/- divided into 4,24,74,208 equity shares of ' 2/-
each.
SUBSIDIARY / ASSOCIATE / JOINT VENTURE COMPANIES
During the year, the Board of Directors reviewed the affairs of its
subsidiaries and associate Companies. In accordance with Section 129(3) of the Companies
Act, 2013, the consolidated financial statements of the Company, incorporating financials
of all its subsidiaries and associate Companies, which forms part of this Annual Report,
have been prepared.
During the year under review, a wholly owned subsidiary namely Somany
Max Private Limited became the subsidiary Company w.e.f 2 June, 2022.
Furthermore, your Company has disinvested its entire equity
shareholding in its subsidiary company namely, Amora Ceramics Private Limited
("ACPL') w.e.f. 1 July, 2022 vide agreement dated 21 September, 2022, thereby ACPL
ceased to be subsidiary of the Company.
In accordance with Section 136 of the Companies Act, 2013, the audited
financial statements, including the consolidated financial statements along with related
information of the Company and audited accounts of each of its subsidiaries, are available
on Company's website at https://www.somanyceramics.com. These documents will also be
available for inspection at the registered office of the Company at 2, Red Cross Place,
Kolkata - 700001, India between 3:00 pm and 5:00 pm in working days till the date of
ensuing Annual General Meeting (AGM).
The statement required under Section 134 of the Companies Act, 2013 in
respect of the Subsidiary, Associates and Joint Venture Companies in the form AOC-1 is
provided at Annexure - 1 to this report, which comprises performance and financial
position of each of Subsidiaries, Associates and Joint Venture. Refer para on Subsidiary
Companies in the Corporate Governance Report for additional details.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
All contracts/ arrangements/ transactions entered by the Company during
2022-23 with related parties were on an arm's length basis and in the ordinary course of
business. During the year, pursuant to approval of shareholders dated 23 September, 2022,
under Regulation 23 of the SEBI Listing Regulations, your Company entered into Material
Related Party Transactions with its Subsidiary Company M/s Sudha Somany Ceramics Private
Limited ("SSCPL"). Further, approval of the Audit Committee was sought for all
related party transactions. Certain transactions which were repetitive in nature were
approved through omnibus route.
All related party transactions were in compliance with the applicable
provisions of the Companies Act 2013 and SEBI Listing Regulations. Details with respect to
transaction(s) with the Related Party(ies) entered into by the Company during the
reporting period are disclosed in the accompanying Financial Statements and the details
pursuant to clause (h) of Section 134(3) of Act and Rule 8(2) of the Companies
(Accounts) Rules, 2014 are given in Form AOC-2 which is annexed as
Annexure - 2.
Your Directors draw attention of the shareholders to the financial
statements which set out related party disclosures. A Policy on Related Party Transactions
as approved by the Board has been uploaded on the Company's website
https://www.somanyceramics.com/ at the web link:
https://d3bvng1ozw4ph9.cloudfront.net/media/investorrelation/r/p/rpt_ policy_w.pdf.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The Disclosure pursuant to Section 134(3)(g) of the Companies Act, 2013
regarding Particulars of Loans, Guarantees and Investments covered under Section 186 of
the Companies Act, 2013 are provided in the notes to Financial Statements (Standalone)
forming part of this Annual Report.
RISK MANAGEMENT
The Company has Risk Management Systems in place in accordance to
Section 134(3)(n) of the Companies Act, 2013. Risk Management Policy of the Company is
also in place and necessary steps have been taken from time to time to strengthen it
further. The Risk Management process is followed to identify, assess and prioritize risks
that need to be minimized, monitored and mitigated and is quite elaborate. These measures
help in reducing and controlling the impact of adverse events and maximize the realization
of opportunities. Major risks are identified systematically and mitigated on a continuous
basis.
The Risk Management Policy as approved by the Board has been uploaded
on the Company's website https://www.somanyceramics.com/ at the web link:
https://somany-uat.s3.amazonaws.com/investorrelations/r/i/
risk_management_policy_scl_-_website.pdf.
INVESTOR EDUCATION & PROTECTION FUND (IEPF)
Pursuant to Sections 124 and 125 of the Act read with the Investor
Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules,
2016 ("IEPF Rules"), the amount of dividend, if not claimed for a period of
seven years from the date of transfer to Unpaid Dividend Account of the Company, is liable
to be transferred to Investor Education & Protection Fund.
Further, all the shares in respect of which dividend has remained
unclaimed for seven consecutive years or more from the date of transfer to Unpaid Dividend
Account shall also required to be transferred to the demat account of IEPF Authority. The
said requirement does not apply to shares in respect of which there is a specific order of
Court, Tribunal or Statutory Authority, restraining any transfer of the shares.
In the interest of the shareholders, the Company sends periodical
reminders to the shareholders to claim their dividend in order to avoid transfer of
dividend/shares to IEPF Authority. Notice in this regard was
also published in the newspapers and the details of unclaimed dividend
and shareholders whose shares are liable to be transferred to the IEPF Authority, are
uploaded on the Company's website.
In light of the aforesaid provisions, the unpaid/ unclaimed dividend
which was declared for the year ended 31 March, 2016 is due for transfer to IEPF on or
after 6 October, 2023.
During the period, under review, the Company transferred 4,650 Equity
Shares of ' 2/- each, on which dividend of the year 2015 remained unclaimed for seven
consecutive years, to Investor Education and Protection Fund (IEPF) pursuant to Section
124 (6) of the Companies Act, 2013 within the scheduled time.
Further, a Dividend amount of ', 6,36,440/- which remained unclaimed
against dividend of the year 2015, was transferred to IEPF pursuant to Section 124 of the
Companies Act, 2013 within the Scheduled time.
STATEMENT ON COMPLIANCES OF APPLICABLE SECRETARIAL STANDARDS
In requirement of Para 9 of revised Secretarial Standards on Board
Meeting i.e. SS-1, your Directors state that they have devised proper systems to ensure
compliance with the provisions of applicable Secretarial Standards and that such systems
are adequate and operating effectively.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of the knowledge and belief of the Directors of the Company
and according to the information and explanations obtained by them, your Directors make
the following statement in terms of Section 134(3) (c) and Section 134 (5) of the
Companies Act, 2013:
a) In the preparation of the annual accounts for the year ended 31
March, 2023, the applicable accounting standards, had been followed with proper
explanation and there are no material departures;
b) The Directors had selected such accounting policies, applied them
consistently and made judgments and estimates that were reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company as at 31 March, 2023 and
of the profit of the Company for the year ended on that date.
c) The Directors had taken proper and sufficient care 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.
d) The Directors had prepared the annual accounts on a going concern
basis.
e) The Directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are adequate and are
operating effectively; and
f) The Directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems are adequate and operating
effectively.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements have been prepared in accordance
with applicable Accounting Standards. The audited consolidated financial statements
together with Auditors' Report forms part of this Annual Report.
The consolidated net profit (attributable to controlling interest) of
your Company was Rs 7,149.16 Lakhs in the year under review compared to Rs 8,868.71 Lakhs
in the previous year.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The list of Directors and Key Managerial Personnel at the end of the
reporting period is as under:
| Name |
Designation |
Category |
| Mr. Shreekant Somany (DIN: 00021423) |
Chairman & Managing Director |
Executive |
| Mr. Abhishek Somany (DIN: 00021448) |
Managing Director & Chief Executive Officer (CEO) |
Executive |
| Mr. Salil Singhal (DIN: 00006629) |
Independent Director |
Non-Executive |
| Mr. Rameshwar Singh Thakur (DIN: 00020126) |
Independent Director |
Non-Executive |
| Mr. Ravinder Nath (DIN: 00062186) |
Independent Director |
Non-Executive |
| Mrs. Rumjhum Chatterjee (DIN: 00283824) |
Independent Director |
Non-Executive |
| Mr. Vineet Agarwal (DIN: 00380300) |
Independent Director |
Non-Executive |
| Mr. Siddharath Bindra (DIN: 01680498) |
Independent Director |
Non-Executive |
| Mr. Ghanshyam Girdharbhai Trivedi (DIN: 00021470) |
Non-Independent Director |
Non-Executive |
| Mr. Sailesh Raj Kedawat |
Chief Financial Officer (CFO) |
Key Managerial Personnel |
| Mr. Ambrish Julka |
Company Secretary and Compliance Officer |
Key Managerial Personnel |
Mr. Abhishek Somany (DIN: 00021448) was re-designated as Managing
Director and CEO of the Company w.e.f. 10 August, 2022. The current term of Mr. Abhishek
Somany (DIN: 00021448) as Managing Director and CEO is going to be completed on 31 May,
2023. He was however, re-appointed as Managing Director and CEO for another term of 3
years commencing from 1 June, 2023 till 31 May, 2026 with the approval of shareholders in
their 54th Annual General Meeting ("AGM") held on 23 September, 2022.
Further, Mr. Abhishek Somany (DIN: 00021448) retires by rotation at the ensuing Annual
General Meeting and being eligible has offered himself for re-appointment.
Mr. Rameshwar Singh Thakur (DIN: 00020126), Independent Director and
Mrs. Rumjhum Chatterjee (DIN: 00283824) Independent Director will be completing their
current term on 23 May, 2023 and 31 August, 2023, respectively. However, with the approval
of shareholders in their 54th AGM held on 23 September, 2022 they were
re-appointed as Independent Directors for second term of 5 years w.e.f 24 May, 2023 and 1
September, 2023, respectively.
Mr. Shreekant Somany (DIN: 00021423), Chairman & Managing Director
and Mr. Vineet Agarwal (DIN: 00380300), Independent Director of the Company will be
completing their current term on 31 August, 2023 and 30 April, 2024, respectively .
However, your Board of Directors has recommended their re-appointment w.e.f. 1 September,
2023 and 1 May, 2024, respectively, to the shareholders for their approval in their
ensuing Annual General Meeting.
The disclosures required pursuant to Regulation 36 of the SEBI Listing
Regulations and the Secretarial Standards on General Meetings ('SS-2') were given in the
Notice of 55th AGM.
Mr. Saikat Mukhopadhyay resigned from the position of CFO w.e.f. 31
May, 2022 and Mr. Sailesh RajKedawat was appointed as Chief Financial Officer
("CFO") of the Company w.e.f. 10 November, 2022 in his place.
DECLARATION OF INDEPENDENCE
All Independent Directors of the Company have given requisite
declarations under Section 149(7) of the Companies Act 2013, ("ACT") that they
meet the criteria of independence as laid down under Section 149(6) of the Act alongwith
Rules framed thereunder, Regulation 16(1 )(b) of SEBI Listing Regulations and have
complied with the Code of Conduct of the Company as applicable to the Board of Directors
and Senior Management Personnel. In terms of Regulation 25(8) of the SEBI Listing
Regulations, the Independent Directors have confirmed that they are not aware of any
circumstance or situation, which exists or may be reasonably anticipated, that could
impair or impact their ability to discharge their duties with an objective independent
judgement and without any external influence. The Company has received confirmation from
all the Independent Directors of their registration on the Independent Directors Database
maintained by the Indian Institute of Corporate Affairs, in terms of Section 150 read with
Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.
The Independent Directors of the Company have complied with the Code
for Independent Directors as prescribed in Schedule IV to the Act. In the opinion of the
Board, the Independent Directors possess the requisite expertize and experience and are
persons of high integrity and repute. They fulfill the conditions specified in the Act as
well as the Rules made thereunder and are independent of the management.
BOARD EVALUATION
Pursuant to the provisions of the Act and SEBI (LODR) Regulations, 2015
evaluation has been carried out by the Board, Nomination and Remuneration Committee (NRC)
and by the Independent Directors. The Board has carried out an annual performance
evaluation of its own, individual Directors including Independent Directors (excluding the
director being evaluated) and its Committees. Board evaluation was carried out on the
basis of questionnaire, prepared after considering various inputs received from the
Directors, covering various aspects revealing the efficiency of the Board's functioning
such as development of suitable strategies and business plans, size, structure and
expertize of the Board and their efforts to learn about the Company and its business,
obligations and governance.
Performance evaluation of every Director was carried out by Board and
Nomination and Remuneration Committee on parameters such as appropriateness of
qualification, knowledge, skills and experience, time devoted to Board deliberations and
participation in Board functioning, extent of diversity in the knowledge and related
industry expertize, attendance and participations in the meetings and workings thereof and
initiative to maintain high level of integrity & ethics.
In their separate meeting, the Independent Directors had carried out
performance evaluation of Non-Independent Directors, the Board as a whole and the
Chairman, taking into account the views of Executive and Non-Executive Directors. The
quality, quantity and timeliness of flow of information between the Company Management and
the Board which is necessary for the Board to effectively and reasonably perform their
duties were also evaluated in the said meeting.
The performance of Committees were evaluated on parameters such as
whether the Committees of the Board are appropriately constituted, Committees has an
appropriate number of meetings each year to accomplish all of its responsibilities,
Committees maintain the confidentiality of their discussions and decisions. Committee
conducts a self-evaluation at least annually and make periodically reporting to the Board
along with its suggestions and recommendations.
Independent Director's performance evaluation was carried out on
parameters such as Director upholds ethical standards of integrity, the ability of the
Director to exercise objective and independent judgment in the best interest of Company,
the level of confidentiality maintained. The Directors expressed their satisfaction with
the evaluation process.
The Board found the evaluation satisfactory and no observations were
raised during the said evaluation in current year as well as in previous year.
NOMINATION AND REMUNERATION POLICY
Your Company has formulated the nomination and remuneration policy
("NRC policy") for its Directors, Key Managerial Personnel and other Employees
of the Company. This Policy sets out the guiding principles for Nomination and
Remuneration Committee of the Company for recommending to the Board the appointment and
remuneration of the Directors, Key Managerial Personnel, Senior Management and other
employees of the Company. The Policy also includes criteria for determining
qualifications, positive attributes, independence of a director and other matters provided
under sub-section (3) of section 178.
The Nomination and Remuneration Committee shall identify and ascertain
the integrity, qualification, positive attributes, expertize and experience of the person
for appointment as Director, KMP or at Senior Management level and recommend to the Board
their appointment based upon the need of the Company.
The NRC policy is available for the stakeholders on the website of the
Company and same is accessible at web link https://somany-
uat.s3.amazonaws.com/investorrelations/n/o/nomination_and_
remuneration_policy_revised.pdf.
MEETINGS OF THE BOARD
During the year, Four (4) meetings of Board of Directors were held,
i.e., on 18 May, 2022, 10 August, 2022, 10 November, 2022 and 7 February, 2023. For
details, please refer to the Report on Corporate Governance, which forms a part of this
Annual Report.
COMMITTEES OF THE BOARD
During the year, Four (4) meetings of Nomination and Remuneration
Committee, Four (4) meetings of Stakeholders Relationship Committee, Four (4) meetings of
Audit Committee, Four (4) meetings of Corporate Social Responsibility Committee, Twelve
(12) meetings of Share Transfer Committee, Three (3) meetings of Company Administrative
Committee and Three (3) meetings of Risk Management Committee were held, the details of
which are given in the Corporate Governance Report forming part of this Annual Report.
AUDIT COMMITTEE
The Audit Committee of the Company consists of Mr. Rameshwar Singh
Thakur, as Chairman of the Committee and Mr. Salil Singhal, Mr. Vineet Agarwal and Mr.
Ghanshyam Girdharbhai Trivedi as members of the Committee.
Mr. Ambrish Julka, Company Secretary, acts as secretary to the Audit
Committee.
All the recommendations made by the Audit Committee were accepted by
the Board during the year.
AUDITORS Statutory Auditor
M/s. Singhi & Co., Chartered Accountants, having Firm Registration
No. 302049E, were re-appointed at the 54th Annual General Meeting (AGM) held on
23 September, 2022, for a term of 5 years from the conclusion of 54th AGM till
the conclusion of the 59th AGM to be held in the year 2027.
The observations of the Auditors, if any, are explained wherever
necessary, in the appropriate notes to the accounts. The Statutory Auditor's report does
not contain any qualifications, reservations, adverse remarks or disclaimers, which would
be required to be dealt with in the Boards' Report.
Pursuant to provisions of the Section 143(12) of the Companies Act,
2013, the Statutory Auditors has not reported any incident of fraud during the year under
review.
Secretarial Auditor
M/s Pinchaa & Co., Company Secretaries, having Unique Code Number
(U.C.N.) P2016RJ051800 was appointed to conduct Secretarial Audit under the provisions of
Section 204 of the Companies Act, 2013 for the financial year ended 31 March, 2023. The
Secretarial Audit Report for the financial year ended 31 March, 2023 is annexed and marked
as Annexure - 3 to this Report. The Secretarial Audit Report does not contain any
qualification, reservation or adverse remark.
Pursuant to provisions of the Section 143(12) of the Companies Act,
2013, the Secretarial Auditor has not reported any incident of fraud during the year under
review.
Further, the Board has re-appointed M/s Pinchaa & Co., Company
Secretaries, having U.C.N. P2016RJ051800 as Secretarial Auditor of the Company for the
2023-24.
Internal Auditors
Your Board of Directors, during the year under review, has re-appointed
M/s. Grant Thorton Bharat LLR (LLPIN: AAA-7677), to act as the Internal Auditors of the
Company for the financial year 2023-24 pursuant to Section 138 of the Companies Act, 2013
read with the Companies (Accounts) Rules, 2014.
ANNUAL RETURN
Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act,
2013, the Company has placed a copy of the Annual Return as at 31 March, 2023 on its
website at https://somany-uat.s3.amazonaws. com/investorrelations/MGT-7-FY-2022-23.pdf
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has in place a Corporate Social Responsibility Policy
("CSR policy") in accordance with the provisions of Section 135 of the Companies
Act, 2013 read with The Companies (Corporate Social Responsibility Policy) Rules, 2014 on
recommendation of Corporate Social Responsibility Committee ("CSR Committee")
and on approval of the Board of Directors of the Company.
The CSR Committee undertakes CSR activities in accordance with its (CSR
Policy) which is uploaded on the Company's website at www.somanyceramics.com at the web
link: https://d3bvng1ozw4ph9. cloudfront.net/media/investorrelation/c/o/corporate_social_
responsibility_policy_revised_16-06-2021.pdf.
The 2% of the average net profit, as calculated pursuant to the
provisions Companies Act, 2013 for the FY 2022-23 was Rs 147.87 Lakhs which was spent
during the year itself. A detailed report on CSR activities is enclosed as Annexure - 4 to
this report.
INTERNAL CONTROL SYSTEMS
The Company has an effective Internal Control System in place
considering the size, scale and complexity of operations. The internal control is
supplemented by the detailed internal audit program, reviewed by management and by the
Audit Committee and documented Policies, SOPs, Guidelines and Procedures.
The Internal Audit monitors and evaluates the efficacy and adequacy of
internal control system in the Company, its compliance with operating systems, accounting
procedures and policies at all locations of the Company.
INTERNAL FINANCIAL CONTROL
The Company has an adequate Internal Financial Control (IFC) System in
accordance with the Section 134(5)(e) of the Companies Act, 2013
for ensuring the orderly and efficient conduct of its business
including adherence to company polices safeguarding of its assets, prevention &
deduction of frauds and errors, accuracy & completeness of accounting records and
timely preparation of reliable financial information.
The standard controls defined in the IFC framework are reviewed by the
Internal Auditors, External Consultants and Management concurrently to strengthen the
existing processes and activities of the Company by way of formulating new guidelines and
incorporating necessary changes in the SOP
HUMAN RESOURCE (HR)
Like each new year brings its unique set of opportunities and
challenges, this year has been a unique and different experience for Somany, both in terms
of its business growth and development of its people capabilities. This year enabled us to
drive talent development and performance enhancing strategies and reach significant
business milestones, backed by insightful talent analytics, effective talent management
and strategic business partnering. To cater our existing and futuristic growth plans, we
developed effective talent acquisition strategies, including proactive talent forecasting,
niche talent sourcing and employer branding. To validate integrity and ethics of new
hires, we further strengthened our background verification process, making it more
comprehensive, insightful and proactive in monitoring performance and conduct related
concerns.
Furthermore, in response to the changing landscape of business
environment and our fast growth momentum, we recognized the need to develop a futuristic
talent pipeline, as one to our key business priority. In view of this, we focused on
developing capabilities of our existing team with revamped Learning & Development
(L&D) solutions, new age technical skills and success enabling behaviors. Considering
L&D as the most powerful talent engagement & retention tool, our L&D
strategies have become more focused on encouraging consistent upskilling and offering
customized learning experiences to each Learner. A notable addition to our L&D
initiatives, is the relaunch of our Employee On- boarding and induction program, now known
as AAGMAN. This 4-day program has been redesigned completely to elevate the on-boarding
experience and orienting new hires with important skills/knowhow, with engaging learning
strategies and tools. We also developed tailored practice modules/workbooks for our
different business lines, which cover important technical, sales and commercial aspects.
By acquainting new employees with comprehensive knowledge and Somany's value system from
the start, we aim to enhance their integration into our organization culture and expedite
their contributions to our overall success.
Our change-fostering powerful learning programs, such as "Design
Thinking for success" and "The Productivity Enhancer" effectively
enriched innovative thinking, growth mind-set, resilience and problem
solving capabilities of participants. These Organization development interventions not
only offer tools and techniques to foster non-linear growth, but also cultivate a culture
of innovation, talent empowerment and continuous improvement.
In addition, Somany's much-loved Children's Day painting competition
crossed its 10th year with an enchanting name "Kalakriti" to signify
the uniqueness, exceptional talent and creativity of children. The previous iteration of
this competition over last decade, saw overwhelming participation from across the nation.
It was a pleasure to see so many children demonstrate their artistic temperament, and
their creations have been published within the organization in celebration of their
artistic accomplishments.
Finally, as a platform to share glimpses of the diverse initiatives and
events taking place within the organization, our quarterly HR Newsletter (HRSprx) has also
been redesigned and presented with more exciting content and name "Somany
Vibes." The revitalized newsletter aims to capture the essence and significance of
these activities and occasions, reflecting the moments that resonate with "life at
Somany" and fostering a sense of unity and appreciation among our Team. Through the
new "Somany Vibe", we hope to amplify the unique experiences of our team and
create a platform for us to come together and celebrate as one, "Somany
Parivar"!
WHISTLE BLOWER POLICY/ VIGIL MECHANISM
The Company has a Vigil Mechanism/ Whistle Blower Policy in line with
Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015 and in terms of Section 177(9) of the Companies Act, 2013. The policy enables the
stakeholders (including Directors and employees) to report their concern about unethical
behavior, actual or suspected fraud or violation of the Company's Code of Conduct.
The Policy provides adequate safeguards against victimization of
Director(s)/ employee(s) and enables direct access to the Chairman of the Audit Committee
in exceptional cases. The protected disclosures, if any, reported under this Policy are
appropriately and expeditiously investigated by the Chairman. The details of the Whistle
Blower Policy are also explained in the Corporate Governance Report and the Policy is also
available on the website of the Company at the weblink: https://somany-
uat.s3.amazonaws.com/investorrelations/v/i/vigil_mechanism_whistle_
blower_policy_revised_16-06-2021.pdf.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report forms integral part of this
Annual Report.
CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY
ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, R&D, technology
absorption, foreign exchange earnings and outgo as required under Section 134 of the
Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 forms part of this
Report as Annexure - 5.
PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other details as required
under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided at Annexure
- 6.
In terms of the provisions of Section 197(12) of the Companies Act,
2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, a statement showing the names of employees and other
particulars of the top ten employees and employees drawing remuneration in excess of the
limits as provided in the said rules is provided at Annexure- 7.
EMPLOYEE STOCK OPTION
The Nomination and Remuneration Committee and Board of Directors of the
Company in their meeting held on 10 December, 2021 approved the Somany Ceramics Employee
Stock Plan 2021 (hereinafter to be referred as "Somany Ceramics Employee Stock Option
Plan 2021" or the "Plan" or "Scheme") for grant of 4,23,794
Options to Eligible Employees/ Directors of the Company and/or group companies including
Subsidiary or Associate Companies and recommended the same to the Shareholders of the
Company for their approval.
The Plan was approved by the shareholders of the Company on 7 April,
2022 through Postal Ballot. As per Regulation 12(3) of SEBI (Share Based Employee Benefits
and Sweat Equity) Regulations, 2021, the Company obtained in-principle approval of the
stock exchanges prior to the grant of options.
The Nomination and Remuneration Committee granted 3,50,102 options to
33 eligible employees of the Company on 29 April, 2022. The grant of options was done at
the latest available closing price prevailing on the National Stock Exchange of India
Limited being the Stock Exchange which recorded the highest trading volume in the Equity
Shares of the Company on 28 April, 2022 i.e. the previous trading day immediately
preceding the date on which the grant of Options was approved by the Committee. During the
year 34806 options lapsed/forfeited due to resignation of some of the employees of the
company. Further in the second tranche 1,01,107 options were granted to 13 eligible
employee on 7 February, 2023.
The scheme is in compliance with the SEBI (Share Based Employee
Benefits and Sweat Equity) Regulations, 2021.
The certificate from the Secretarial Auditor of the Company certifying
that the scheme is being implemented in accordance with the SEBI (Share Based Employee
Benefits and Sweat Equity) Regulations, 2021 and in accordance with resolution passed by
the Members in general meeting is received by the Company.
With regard to the above, the disclosures as stipulated under the SEBI
Regulations and Companies Act, 2013 as on 31 March, 2023 are provided in Annexure-8 to
this report. The details also available on the website of the Company at the weblink:
https://somany-uat. s3.amazonaws.com/investorrelations/cb5c5ad3-617d-4c1d-9756-
307fd317d4a7-1690635607759.pdf.
Further, your Board of Directors on recommendation of Nomination and
Remuneration Committee has approved and recommended to the shareholders the Somany
Ceramics Employee Stock Option Plan 2023 which will be considered by the shareholders in
their 55th AGM.
CORPORATE GOVERNANCE
Your Company has been following the principles and practices of good
Corporate Governance. A separate report on Corporate Governance and a certificate from the
Statutory Auditors confirming compliance with the Corporate Governance requirements forms
part of this Report as Annexure - 9.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)
In compliance with the SEBI Listing Regulations, the BRSR describing
the initiatives taken by the Company from environmental, social and governance
perspectives form part of this Annual Report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Your Company continues to follow robust policy on Prevention,
Prohibition and Redressal of Sexual Harassment of Women at Workplace. The Company has a
Policy on Prevention, Prohibition and
Redressal of Sexual Harassment of Women at Workplace and matters
connected therewith or incidental thereto covering all the aspects as contained under
"The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)
Act, 2013". The Company has complied with the provision relating to the constitution
of Internal Complaints Committee under the Sexual Harassment of Women at the Workplace
(Prevention, Prohibition and Redressal) Act, 2013. During the period under review, the
Company has not received any complaint under this Policy.
OTHER DISCLOSURES
I. There were no significant material orders passed by the Regulators /
Courts during the FY 2022-23 which would impact the going concern status of the Company
and its future operations.
II. There were no material changes and commitments in terms of Section
134(3)(l) of the Companies Act, 2013, affecting the financial position of the Company.
III. The maintenance of cost records as specified by the Central
Government under sub-Section (1) of Section 148 of the Companies Act, 2013 is not
applicable to the Company.
IV. There are no proceedings initiated/ pending against your Company
under the Insolvency and Bankruptcy Code, 2016 which materially impact the business of the
Company
V. There has been no change in the nature of business of the Company.
VI. There was no instance of one-time settlement with any Bank or
Financial Institution.
|
For and on behalf of the Board Somany Ceramics Limited |
| Place: Noida Dated: 23 May, 2023 |
Shreekant Somany Chairman and Managing Director DIN: 00021423 |
|