Dividend Distribution Policy

Dividend Distribution Policy

CERA SANITARYWARE LIMITED

DIVIDEND DISTRIBUTION POLICY 

  1. Background and applicability

SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Regulations”), require the Company to formulate and disclose a Dividend Distribution Policy in the annual report and on the corporate website. The Board of Directors (“Board”) of Cera Sanitaryware Limited (“Company”) has adopted this Dividend Distribution Policy to comply with these requirements.

Dividend represents the profit of the Company, which is distributed to shareholders in proportion to the amount paid-up on shares they hold. Dividend includes Interim Dividend.

  1. Dividend distribution philosophy

The Company is deeply committed to driving superior value creation for all its stakeholders. The focus will continue to be future growth and long term interests of the Company as well as its shareholders. Accordingly, the Board would continue to adopt a progressive dividend policy, ensuring the immediate as well as long term needs of the business.

  1. Statutory and Regulatory Parameters

The Company shall declare dividend only after ensuring compliance with the requisite regulations and directions as stipulated under the provisions of the Companies Act, 2013 and rules made thereunder,  SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended from time to time, other SEBI regulations and any other regulations as may be applicable from time to time.

  1. Circumstances under which shareholders may or may not expect Dividend

The Board will assess the Company’s financial requirements, including present and future organic and inorganic growth opportunities, government policies & regulations and other relevant factors (as mentioned elsewhere in this policy) and accordingly declare dividend in any financial year.

The shareholders of the Company may not expect dividend under certain circumstances including the following,

  • In the event of inadequacy of profits or whenever the Company has incurred losses;
  • Significant cash flow requirements towards  higher working capital requirements / tax demands / or others , adversely impacting free cash flows;
  • An impending / ongoing  capital expenditure program or  any acquisitions or investment in joint ventures requiring significant allocation of capital;
  • Allocation of cash required for buy-back of securities;
  • Any of the internal or external factors restraining the Company from considering dividend.

 

  1. Financial parameters and other internal and external factors that would be considered for declaration of dividend:

The Board will consider various parameters as mentioned below before arriving at a decision on declaration of dividend:

  • Current year’s Profit/ Inadequacy of profit
  • Accumulated reserves
  • Distributable surplus available as per the various Acts and Regulations
  • The Company’s liquidity position and future cash flow needs
  • Track record of Dividends distributed by the Company
  • Capital expenditure requirements considering the expansion and acquisition opportunities
  • Cost and availability of alternative sources of financing
  • Funds requirement for contingencies and unforeseen events with financial implications
  • Capital market scenario
  • Shareholders expectations
  • Government Policies
  • Macro- economic conditions
  • Stipulations/ Covenants of loan agreements
  • Prevailing Taxation Policy or any amendments expected thereof, with respect to dividend distribution
  • Payout ratios considering probabilities of its consistency in coming time
  • Any other relevant factors that the Board may deem fit to consider before declaring Dividend.

 

  1. Utilization of retained earnings

Retained earnings shall be utilized in accordance with prevailing regulatory requirements, creating reserves for specific objectives, fortifying the balance sheet against contingencies, generating higher returns for shareholders through reinvestment of profits for future growth and expansion and any other specific purpose as approved by the Board of Directors of the Company. The Company shall endeavor to utilize retained earnings in a manner that shall be beneficial to both, the interests of the Company and its stakeholders.

  1. Parameters with regard to various classes

Presently, the issued and paid-up share capital of the Company comprises of equity shares only. In case, the Company issues other kind of shares, the Board may suitably amend this Policy.

  1. Conflict in policy

In the event of a conflict between this policy and the existing statutory regulations, the statutory regulations will prevail. 

  1. Modification of the Policy

The Board is authorized to change/amend this policy from time to time at its sole discretion and/or in pursuance of any amendments made in the Companies Act, 2013, SEBI and other Regulations, etc.

  1. Reviewand Disclosure of Policy

The Board may review the Dividend Distribution Policy of the Company periodically. The Dividend Distribution Policy shall be disclosed in the Annual Report of the Company and placed on the Company’s website, www.cera-india.com.

 

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