better expressed as...

CLASSY • Admirably Skilful and Graceful

EXQUISITE • Pleasing Through Beauty and Perfection

RITZY • Ostentatiously Fancy and Stylish

AWESOME • Inspiring Feelings of Wonder and Awe

CERA IS THE STAR SME

An accolade that celebrates our spirit of The award jury cited CERA’s discipline in financial metrics and its
excellence and enterprise. continuous growth in market share. It also made a special
mention about CERA’s strategy for changing consumer
“Cera Sanitaryware bagged the ‘Star SME’ award conferred by
preferences. “CERA's revenue CAGR during the past three
the Business Standard Group as part of its Business Standard
years has been over 37 per cent, much above the industry
annual awards 2015 edition held at the Crystal room of
average of 12-14 per cent.
the Taj, Mumbai. Every year the Business Standard group
The main thing that seems to have worked out in favour of
celebrates leadership that treads alternate paths than
Cera is its strategy to adapt to changing consumer preferences
the traditional ones.
and the positioning of the company as a bathroom solutions
The award trophy was presented to CERA’ Chairman &
provider instead of just sanitary ware. Also, its investment in
Managing Director Mr. Vikram Somany, by Chief Guest
brand-building and customer satisfaction paid off big time.
Mr. Nandan Nilekani – co-founder of Infosys and former
chairman of the Unique Identification Authority of India.

ANNUAL REPORT 2O15-16

From
Chairman’s Desk...
Dear Patrons, Stakeholders and Friends, As you flip through the pages the cumulative result is for
all to see. Our growth saga continues despite subdued
When your efforts are well intended you are aptly rewarded market conditions. We could achieve good set of numbers
for it. It rings true for us as well. During the course of the year, primarily on account of our continued efforts in leveraging
we received several coveted awards for our performance — the brand value and product optimization. Sales and
Star SME from Business Standard, Business Knights award marketing strategies that helped us largely was based on
from Economic Times, Best Mid-sized Company award from our focussed and intensified efforts to promote faucet ware
Nav Gujarat Samay, Gujarat Ratna award from CNBC, Trusted and sanitary ware with sustained business in tiles which
Brand award from Reader’s Digest, Asia’s Most Promising after our new Joint Venture in Southern India - Anjani Tiles
Brand award from WCRC, etc. to just name a few. Limited, certainly gives us an edge in competitive market
The economy was reported as progressive with sustained with much better volume growth in time to come.
and at times impressive GDP, when compared with global With enlarged product basket and truly meeting the
scenario. The year in fact passed by with a note of subdued expectations of a reliable 'bathroom solutions' provider,
business. Despite, the Realty and Construction business along with deeper penetration in tier II markets has seen
witnessed sluggishness all throughout the year, the entire the company doing relatively well sustained demands
trade expects good days ahead. These expectations are scenario. Combined with our excellent after-sales service
based committed Government policies and some initiatives riding on a backbone of a very loyal distribution network
in right direction. Housing for all by 2022 and 'RERA' - across the country and you have winning formulae in
Real Estate Regulatory Authority Bill are important such hand, year after year.
initiatives by Central Government. Another and much
discussed GST - Goods and Service Tax is in the offing and We also launched an initiative to give our customers a
days are not too far where this will see the light of the tactile experience; CERA Style Studios born out of this
day as with time economic and development reasons urge to give a touch and feel experience is now available
would prevail over political ambitions. As opined by in upmarket locations in Ahmedabad, Mumbai, Kochi,
economic pundits a quite a bit depends on how the onset Bengaluru, Hyderabad, Gurgaon, Chandigarh, Chennai,
of good the monsoon is going to be in coming months, Thiruvananthapuram. To strengthen our footprints in
the weather forecast has raised very good hopes for many Eastern India, a new CERA Style studio was recently opened
of us. All these in turn, are expected to give much needed in Kolkata. We have earned kudos for this initiative and
fillip to the economy and consumer goods more in life style also gathered useful feedback from prospective customers.
and housing products. CERA is gearing up on this with We also now have a dedicated display and sales touch
more focussed efforts to build and enhance manufacturing points called CERA Style Galleries owned and managed by
capacities and inner strengths to control cost and be consistent its trade partners. As of today there are 200 of these which
on quality parameters with use of latest technologies are soon to increase. For smaller retail partners we
including robotic where applicable. have encouraged and promoted the CERA Style Centre.
The year has whizzed past and its results time at CERA This has helped visibility of the brand in smaller towns
again. When we sit back and look at the report card. and outlets. We have even gone a step forward with
What emerges is one strong point; acceptability of our CERA Style Studios on Wheels, bringing the products to
entire product range and brand power. These are fully the doorsteps of key decision makers like architects,
backed up by our responsible approach to end users and developers, etc. And finally our after sales service is
channel partners. further strengthened with CERA Care wherein new
technicians have been inducted for taking care of services
The process of development of new designs modules in all key cities of the country.
continues in every business segment. This has not only
won us new customers and markets but also helped to With continued support from talented actor & Bollywood
retain loyal customers year after year. And all this wouldn’t style and fashion icon Ms. Sonam Kapoor as our Brand
have been possible without the commitment, dedication Ambassador, the brand visibility has become phenomenally
and hard work of our team, from production to marketing, eye-catching. We are garnering through high decibel
from design and sales and service. When it comes to television campaigns on national and regional channels
CERA products range we are one of the best in the quality showcasing sanitary ware, faucets wares and tiles. The
we offer.

02
television campaign was supplemented by print
advertisements in magazines. The exercise did make
heads turn as we are now a notch above the rest. ‘ ’
With so much going we are also broadening our horizon
with an exclusive tie up with Italian luxury designer At CERA, we see ourselves taking
sanitaryware brand, ISVEA, to market their luxury range
of sanitaryware in India. With this we make our much
the next big leap. Having established
awaited entry into the luxury segment. ourselves as a consistent player in the
We are also fully committed to Our Hon’ble Prime Minister, sanitaryware segment we are now
Shri Narendra Modi’s ‘Make in India’ initiative of transforming looking at much higher growth through
India into a global manufacturing hub. We reiterate our
commitment to his vision of making India self-sufficient
new products and range of newly
and self – reliant. As we leap ahead I believe that we developed designs.. expanding our
shall grow from strength to strength and emerge as a truly market footprint by entering the luxury
global brand one day. Blending Indian values with
international quality, design and style. segment soon.
Que CERA CERA, the future is ours to see!
Till we meet again, here’s to happy times!
Thank you.
Vikram Somany, Chairman

ANNUAL REPORT 2O15-16

Team
and Corporate Information
PRESENT BOARD OF DIRECTORS
Name of Director Designation
• Shri Vikram Somany Chairman and Managing Director
• Smt. Deepshikha Khaitan Vice Chairperson (Non-Executive)
• Shri Sajan Kumar Pasari Independent Director
• Dr. K.N. Maiti Director
• Shri Govindbhai P. Patel Independent Director
• Shri Lalit Kumar Bohania Independent Director
• Shri Atul Sanghvi Executive Director
Shri S C Kothari - Chief Executive Officer
Shri Bharat Mody - Strategic Advisor
Shri R B Shah - Chief Financial Officer
Shri Narendra N. Patel - President - Company Secretary & Compliance Officer
REGISTERED OFFICE
9, GIDC Industrial Estate, Kadi - 382 715 Dist. Mehsana, Gujarat, India.
CORPORATE OFFICE
Mudgal Lounge, 2nd Floor, 23, Chetla Central Road, Opp. Chetla Central Park,
Kolkata - 700 027. Tel.: +91-33-24484222, 24484223, 24484224.
E-mail: corporateoffice@cera-india.com
SALES & MARKETING OFFICE
“Madhusudan House”, Opp. Navrangpura Telephone Exchange, Ahmedabad - 380 006
WORKS
I. Sanitaryware and Faucet ware Plants: 9, GIDC Industrial Estate, Kadi- 382 715,
Dist. Mehsana, Gujarat.
II. Wind Farms
w Village Patelka & Lamba, Taluka Kalyanpur, District Jamnagar, Gujarat.
w Village & Taluka Kalyanpur, District Jamnagar, Gujarat.
w Village Kadoli, Taluka Abdasa, District Kutch, Gujarat.
w Village Jivapar (Anandpar), Taluka Chotila, District Surendranagar, Gujarat.
w Village Mota Gunda, Taluka Bhanwad, District Devbhumi Dwarka, Gujarat.
w Village Navagam, Taluka Bhanwad, District Devbhumi Dwarka, Gujarat.
BANKERS
State Bank of India
AUDITORS
H. V. Vasa & Co., Chartered Accountants,
B-2 “Usha Kiran”, Opp. Khanpur Gate, Ahmedabad 380 001
REGISTRAR & SHARE TRANSFER AGENT
MCS Share Transfer Agent Limited,
201, Shatdal Complex, 2nd Floor, Opp. Bata Showroom, Ashram Road,
Ahmedabad - 380 009

04
INDEX
VISION – AIMING HIGH! 10 AWARDS 44
MISSION CLEAR CUT FOCUS 11 CRISIL - IER - INDEPENDENT EQUITY RESEARCH 44
SOLID TRACK RECORD; BASE FOR SUSTAINING GROWTH MODEL 13 COMPANY OVERVIEW 47-51
THESE HELP US TO BALANCE GROWTH AND MARGINS 14-35 STYLE - NOW THINK OUT OF THE BOX
01) STRATEGIC LEADERSHIP TRAILBLAZING NEW AVENUES
02) BRAND ‘CERA’ DETERMINED TO CHANGE EQUATIONS
03) PRODUCT BASKET SUSTAINING GROWTH MODEL
04) REVENUE STREAMS OUR FOCUS
05) PRODUCTION EFFICIENCIES FINANCIAL FINESSE 53-57
06) COST MANAGEMENT BUSINESS PLAN & STRATEGICS
07) PRODUCT QUALITY 5 YEARS’ HISTORICAL – WHAT IS ON THE ANVIL
08) CAPACITY BUILDING WHERE WILL CERA POSSIBLY BE IN NEXT FIVE YEARS
09) PRODUCT POSITIONING & PREMIUMISATION EXPANSION & CAPEX FUNDING
10) ENHANCING DISTRIBUTION REACH OUR IDENTITY 58-59
11) OPTIMIZATION PACKING PLENTY OF PUNCH
12) DEBT FREE STRUCTURE ADDING MORE GLAMOUR TO BRAND CERA
13) WORKING CAPITAL GOING FAR TO COME CLOSER
14) NEW INITIATIVES PRODUCT LINES AND BUSINESS 60-62
CHAIRMAN’S CLUB SANITARYWARE
A NEW SHOWCASE TO A WORLD OF EXCELLENCE FAUCETWARE
SAP - ERP LIFESTYLE PRODUCTS
THE INNOVATIVENESS TILES
E-COMMERCE OUR STRENGTHS 63-65
ANJANI TILES THE BRAND CERA
ISVEA INVESTMENT IN TECHNOLOGY
FINANCIAL BRAND - INVESTOR’S RELATION AND 36 PEOPLE STRENGTH
CREDIBLE BUSINESS STRATEGIES
ASSET UTILIZATION
THE MACRO VIEW OF ECONOMY 38
THE STRONG FINANCIALS
SWACHH BHARAT ABHIYAN 39-40
CSR & WOMEN EMPOWERMENT 66
GROWTH FOR THE INDUSTRY IN GENERAL
MESSAGE TO SHAREHOLDERS AND 68
SANITATION PLUS INVESTING COMMUNITY AT LARGE
PREFERRED EMPLOYERS 42 DISCLAIMER 68
GOVERNANCE AND TRANSPARENCY 43 NOTICE 69

ANNUAL REPORT 2O15-16

 Mrs. Deepshikha Khaitan
Vice Chairperson - Non-Executive

06
SPARKLING JOURNEY
Inventing Brighter Future

ANNUAL REPORT 2O15-16

GROWTH IS A
CONTINUOUS PROCESS...

14%
TOP LINE
GROWTH

23%
BOTTOM LINE
GROWTH

08
 180%
DIVIDEND

Rs. 53.36
EPS

WE REINFORCE THIS
WITH OUR ENDEAVOURS.

ANNUAL REPORT 2O15-16

 Mr. S C Kothari
Chief Executive Officer

Vision
AIMING HIGH!
• Brand Power
• Product positioning
• Endeavour to generate and sustain ‘Returns on Investment’ for the
organization as well for Share holders
• Always eager to establish benchmark in upholding the highest
standards of business ethics and corporate governance
• Endeavour to enhance support system to CERA’s business associates

...And lead a way in fulfilling corporate social responsibilities.

Reinforcing the foundation for growth...

‘ ’
in every home...!

10
Leadership by

Mr. Atul Sanghvi

Executive Director

Mission
CLEAR CUT FOCUS
• Focus on Top line as well as on Bottom line. To create and build
platform for sustainable top line and bottom line growth
• To strengthen company’s position as a market leader across product
basket so to say as total bathroom solution provider
• To implement the best practices in areas of product quality standards
as well as in health and safety for all our employees
• To become a preferred brand for real estate developers as well as
that for retail customers
• To be known as an efficient brand
• Excellent after sales service
• Easy availability through extensive network
• Helping customers choose the right product
• Friendly and responsible workforce

..In the footprints to sustain growth.

ANNUAL REPORT 2O15-16

12
SOLID TRACK RECORD
BASE FOR SUSTAINING GROWTH MODEL
We lay more emphasis on ‘Business Model’ that we perceive; expand the product basket, in FY 2012-13 the company
a ‘Powerful Manufacturing Base’ with world class technology also forayed into Tile business purely on ‘Outsourcing’
at Single Location and ‘Outsourcing’ domestically as well as business model riding high on brand image. As a way
from overseas are two main pillars for sustaining growth forward, ‘CERA’ during FY 2015-16 entered into JV – Joint
and margins amidst relatively subdued realty market. Venture; arrangement with controlling stake of 51% in
The track record of consistency in performance woven with Anjani Tiles Limited.
responsible attitudes and credibility has helped relationships A meticulously chalked out strategies of expansion -
extend beyond market dynamics during the long journey of diversification with enlarged product basket and aptitude of
around 36 years. strong customer focussed business approach, the company
Over these many years, the Company has been successful in has exceeded the expectation of industry watchers by
establishing brand, widespread distribution network and recording growth in top line of nearly 13.63% and in bottom
pioneering initiatives which have evolved 'CERA' from a pure line of 23.35%. The top line CAGR of last Five (5) years,
Sanitary ware manufacturing company to complete status too remained fairly healthy at 30.76%.
of a bathroom solutions provider. Strengthening of quality product basket, intensifying and
'CERA', during FY 2009-10 made a modest beginning in further enlarging distribution reach with noteworthy visibility,
this direction and had put up a state of the art is expected to help sustain growth model to outpace
manufacturing of Faucet ware. Continuing these efforts to general industry growth rate.

ANNUAL REPORT 2O15-16

 1 STRATEGIC LEADERSHIP 8 CAPACITY BUILDING

2 BRAND ‘CERA’ 9 PRODUCT POSITIONING & PREMIUMISATION

3 PRODUCT BASKET 10 ENHANCING DISTRIBUTION REACH

4 REVENUE STREAMS 11 OPTIMISATION

5 PRODUCTION EFFICIENCIES 12 DEBT FREE STRUCTURE

6 COST MANAGEMENT 13 WORKING CAPITAL

7 PRODUCT QUALITY 14 NEW INITIATIVES

These help us to balance

Growth and Margins

14
1 STRATEGIC LEADERSHIP
The leadership that has ethical values to inspire trust with straight forward but courageous and
imaginative action plans based on good values of honesty and integrity.
The management skills of decision making with enterprising temperament are true characteristics
that go to build the organization.
'CERA' is blessed with all these traits..!
The efficient board of Directors led by Mr. Vikram Somany - the CMD, a born entrepreneur; ably
assisted by Mr. S C Kothari as CEO, a veteran of sanitary ware industry and Mr. Atul Sanghvi
as Executive Director, a marketing and management wizard, Ms Deepshkha Khaitan holding degree
in economics and law and Mr Bharat Mody as Strategic Advisor, a senior CA and law graduate
with considerable of experience in corporate affairs including general management and
value creation who have together successfully built the organization on ethics and good values.

Successful organizations can only be

built only with visionary leadership.

ANNUAL REPORT 2O15-16

 2 BRAND The brand that one can rely

Brand ‘CERA’ is one of the main pillars on which customer satisfaction rests on Price and Value
its growth plan rests. that conforms to high class quality standards
across product range. All these backed up by
As part of its value system, the company responsible attitudes.
believes in exceeding expectation by achieving
benchmark in transparency, reliability and integrity ‘CERA’ over a period of times has passed all
with disciplined and customer focused approach. these many tests to emerge as one of the most
We have always been striving for excellence reliable brands in its product category.
through product innovativeness. We deliver
what we promise. With Bollywood celebrity Miss Sonam Kapoor –
the brand ambassador for the company, the
OUR USER CUSTOMERS HAVE FOUND THIS brand has become more visible over past
TRAIT IN US ! few years that too with a cautiously controlled
outlay on media and advertisement expenses.
The entire credibility of product quality moves Company’s efforts to garner share in premium
around how good the brand is perceived. The segment with single brand too, has been
brand perception for ‘CERA’ has been continuously acknowledged by the industry.
on a rise. Brand signifies that the product
Yes, these all contribute to the -
specifications are uniform. The product quality
‘BRAND YOU CAN RELY!’
one can rely on consistent basis. The level of

16
3 PRODUCT BASKET
‘CERA’, way back in 1980 began its journey as purely a sanitaryware
manufacturing company.

The company for the first time and so early in those days came
out with a concept – 'Your Bathroom is a Room too !' - identified
the bathroom as high potential business possibilities and beyond
only sanitaryware.

Over the years, the need was felt to enlarge the product basket.
The objective is to garner larger share of the bathroom products
and help the company to grow faster.

With synergy in terms of end-users and almost same distribution

channel, the company cautiously ventured in a phased manner
into other products such as Faucets and Tiles besides lifestyle
range of products.

Versatile stylist designs backed up by introduction of innovative

manoeuvrability in faucets have helped the company establishing
as one of the major force.

Riding high on established brand image and to fall in line with

new business equations with number bathroom being used more
as business matrix rather than number of sanitary ware or faucet ware
per bathroom, company also entered in the business of Tiles.

After testing the water and initially relying on 'Outsourcing'

business model for tiles business, the company cautiously has
stepped up into JV business model at a more favourable location
to garner larger benefits on freight cost.

With all collective efforts and composite product basket, the company
has been able to gather much more competitive strengths to
sustain growth in cyclical and at times even volatile realty market.

ANNUAL REPORT 2O15-16

 4 REVENUE STREAMS

Revenue stream is largely based on business model perceived by ‘CERA’.

An optimal mix of 'manufacturing' and 'outsourcing' of products keeping in mind
different contributory margins.
A new initiative during FY 2015-16 is taken to enter into JV with controlling
interest for manufacturing tiles.

REVENUE STREAMS

MANUFACTURING OUTSOURCING

JOINT VENTURE
TILES

Imported Sanitaryware

Lifestyle products like

In-House Mfg. Contract Mfg. Shower Temple &
Bath Cubicles, PVC Cisterns,
Seat Coves etc.
and other Accessories
Sanitaryware Sanitaryware
Vitrified and
Ceramic Tiles
Commissioned a state-of-art CP Fittings / CP Fittings /
manufacturing plant for faucet ware. Faucets Faucets
Initial capacity of 2,500 pcs per day is
now raised to over 7200 pcs per day and Existing production capacity of
further scalable to 10000 Pcs. per day sanitaryware close to 3.00 mn pcs pa

18
5 PRODUCTION EFFICIENCIES
Production efficiencies or productivity is of vital concern at manufacturing operations.
The EBDITA margins are greatly influenced with change in productivity.
This area therefore is of a high critical relevance to sustainable margins. CERA
management has never undermined its due importance and constantly endeavours
to remain extremely vigilant.
The use of Robotic technology, 3 D Printers, computer aided new technology and
system integration are some of ongoing preventive measures in vogue at
manufacturing processes not only help controlling consistency in quality but also help
enhancing productivity.

ANNUAL REPORT 2O15-16

 6 COST MANAGEMENT
The largest manufacturing plant at one location has its inherent and innumerable cost
management advantages.
The rationalization of manufacturing overheads has emerged as one of the key cost control
measures. It not only neutralizes the cost of relatively higher freight to feed market across
pan India but more than this has resulted into cost savings.

ENERGY, GAS AND POWER

Energy efficient firing Kiln
Firing kilns installed in sanitaryware division have its base
of technology from Europe or Australia. One of the
major criteria of selection is efficiency and energy cost.

Energy – Gas and Power

Availability of Natural Gas
Natural Gas is available to the company at APM -
Administered Price Mechanism from some of the isolated
wells. This is a fairly long term arrangement.
The company, for years, has been taking advantage of
alternative sources of energy to support its cost control
measures. As part of Green Initiatives, company, during
FY 2014-15, has further added two Wind Turbine
Generators having 4.00 MW capacity each taking the total
tally of wind mills to 20 generating total 11.825 MW
power generation.
Additionally, company has taken unprecedented
initiative to go for Rooftop Solar Power generation plant
for captive use, a 1.00 MW plant to supplement power
generation with alternative energy source.
With this, the company is almost self sufficient in
generating its own power requirements

20
7 PRODUCT QUALITY
Investment in Technology is what ‘CERA’ thrives at.
Following international ISO standards on quality, environment and safety standards -
some of the benchmark achievements in early stages are few of many ‘Firsts’ that
CERA has.
Initiative to form ‘Quality Circles’ for awareness that percolates to the deepest of
the roots in manufacturing process layers with skilled and semi-skilled work force backed
up by ongoing training to improvise further are steps in positive direction and help
building responsible attitudes.
The established manufacturing process parameters with ongoing product development
efforts, use of latest technology, experienced team of senior management and
skilled supervisory staff have taken ‘CERA’ to achieve some noteworthy benchmarks
in consistently producing high class quality products.

ANNUAL REPORT 2O15-16

 8 CAPACITY BUILDING
Commissioned a state-of-art manufacturing plant for faucet ware.
Initial capacity of 2,500 pcs. per day is now raised to over 7200 pcs.
per day. This is further scalable to 10000 pcs. per day.
Existing production capacity of sanitary ware close to 3.00 mn pcs pa CERA
also entered into JV business model for manufacturing of tiles at Dist Nellore
in Andhra Pradesh with initial capacity of 10000 sq.mtrs. per day. The
encouraging part is that the capacity of manufacturing tiles can be scaled up
at least three times at the same location.
A combination of in-house manufacturing as well as contract manufacturing
with ‘outsourcing’ and under JV Arrangement - This strategy in turn offers flexibility
in weathering potential cyclical volatility.
However, ‘CERA’ focuses more on in-house capacity building for its core
product sanitaryware. Casting facilities in green ware; mould making for
attractive designs & efficient firing kiln are of international standards in
sanitaryware.
The faucet ware plant is equipped with VMC’s / CNC, high tech energy
saving induction furnaces, gravity die-casting machines, high pressure testing
facilities, auto polishing machines, robotic controlled grinding machines,
auto-plating nickel-chrome plant and some special purpose machines to
produce quality conforming products.

22
 CERA GROWTH
TRAJECTORY
Capacity expansion in SW from
0.3 mn pcs. pa in 1979-80 to
3.0 mn pcs. pa achieved in 2014-15

Entered into Joint Venture

arrangements with Anjani
Tiles Ltd for manufacturing
Tiles at Dist Nellore Andhra
Pradesh with initial capacity
of 10000 sq mtrs. Per day.
CERA has controlling interest
of 51% in the JV.

2015-16

2010-11 & 2014-15

2007-08
Successfully commissioned
manufacturing plant for
Installed Captive Power Faucet ware with initial
2006-07
Plant (gas based) at Kadi capacity of 2500 pcs.
Undertook expansion of and wind turbine per day. This is raised to
2005-06
`127 Mn. And increased 7200 pcs. per day
generator for `312 Mn
Undertook expansion and further scalable to
2001-02 capacity to and increased capacity to 10,000 pcs. per day.
of `140 Mn. And 13,75,000 pcs. pa.
Demerger of Madhusudan 20,00,000 pcs. pa.
1995-96 started the concept of
Industries and transfer of
The company established Bath Studios with the
1979-80 business of Ceramic
its outsourcing division first Studio at
Incorporation as division to form
with the initial turnover of Ahmedabad.
Madhusudan Ceramics, CERA Sanitaryware Ltd.
a Unit of Madhusudan `13.72 Mn. Manufacturing
Industries Ltd. consisting capacity increased to
of Oil division and Ceramic 12,50,000 pcs pa.
division with capacity of
3,00,000 pcs. Pa
Net Sales (` in Crores)
1000.00
933.69
800.00 821.67
600.00 663.69
Over the decades, the Company has progressed 400.00 487.87
from a sanitaryware manufacturer to a provider
of Bathroom and Kitchen solutions by
200.00
Capitalizing on a strong brand image. 0.00 2012-13 2013-14 2014-15 2015-16

ANNUAL REPORT 2O15-16

 9 PRODUCT POSITIONING & PREMIUMISATION

K ET
AR T HI
M EN SE GH E
S M GM N
AS EG EN D
M S T

LOWER & UPPER

MIDDLE SEGMENT

Despite only a single brand, ‘CERA’ products have The customer satisfaction for his spending is close
significant acknowledgment for its product portfolio to our heart as we offer Value for Money in every
and its presence across the all market segments; product category.
be it for the elite class in premium range or for The company steadily has been enhancing its
upper upper and upper lower in middle class or presence in premium segment while keeping its
in mass market. feet firmly grounded in mass market as well as
The vision is to find ‘CERA’ in every home ! for upper and lower middle range segments.

24
10 ENHANCING DISTRIBUTION REACH

Works
Marketing Office
Sales Office
Bath Studios (Company Display Centre)
Company Stock Points

(THE MAP IS INDICATIVE AND NOT TO THE SCALE)

‘CERA’ enjoys a strong distribution network with close to

1500 Distributors / dealers (authorized stockiest) and
15,000 retailers.
To supplement the distribution channel, the company has
more than 20 major stock points all over India. Cera also has
10 zonal offices, service offices and 10 studios across
the country.
A major marketing of expanding dealers / retailers network
is an ongoing process which intensifies Cera’s presence in
already strong territories besides entering newer territories
where its products have acknowledged acceptance.

ANNUAL REPORT 2O15-16

 11 OPTIMIZATION
The entire business strategies are resting on this concept.
There has been a constant endeavour to optimize every
revenue centre be it the products; territories or the dealers.
The concept of optimization gets further expanded with
managerial personnel when KRAs are drawn to get what
best they can deliver to the organization with matching
remuneration policies to motivate them.
The asset utilization are optimized to make full use of the
capacities built. The working capital cycle is constantly
monitored with an eagle's eye on inventory and debtors
and consequent use of the funds to have one of best return
on share holders' funds.

26
12 DEBT-FREE STRUCTURE
'CERA', with its wholesome conservative policies, has
judiciously used dose of long term debts as and when
needed. This in turn helped achieving what perhaps many
Indian conglomerates would really look forward to settle
at - 'Virtually a debt free company'! In fact your company
enjoys comfort of some money lying in bank deposits or
liquid funds. Ideally, this may become handy in unforeseen
rainy days or even become helpful in catching up with
possibilities of some favorable business opportunities at
appropriate time.
Majorly, over the years, the CAPEX has been funded with
internal accruals.

450.00
421.02
400.00

350.00 351.71

300.00

250.00
223.97
200.00
179.50

150.00 139.18

100.00

50.00 23.14
18.00 18.70 14.89 14.25
0.00
2011-12 2012-13 2013-14 2014-15 2015-16
Networth Long Term Debt

ANNUAL REPORT 2O15-16

 13 WORKING CAPITAL

The Working Capital cycle is constantly

monitored with an eagle's eye on
Inventory and Receivable Management...
28
14 NEW INITITATIVES

This is a novel concept for the entire industry.

The simple rationale behind this initiative and mooting this concept of forming
'Cera Chairman's Club' is to improve Interaction with channel partners and resultantly

CHAIRMAN's to help company knowing ground realities far more better. Eventually this to help
upgrading and modifying business plans to suit market conditions from strategic
and product mix perspectives; intensifying distribution reach further with larger

CLUB penetration besides help percolating CERA’s business philosophy down the line to all
channel partners and ultimately to the Customers.
A performance based entry would make the top nationwide 50 distributors - dealers
eligible to find their berth in this elite 'Chairman's club' as they stand to benefit quite
a bit; would have direct access to the management team for guidance to the
business; receive priorities in deliveries and at times getting performance based
better deals from the company which generate healthy competition !
A workable model is created comprising of senior management team to ensure
healthy interactions and successful implementation newer business ideas to establish
‘Connect’ at every level with clarity and commitments. These efforts, when done
with continuity, is expected to strengthens loyalty in entire distribution channel.
For distributors and dealers it is a matter of reorganization.

ANNUAL REPORT 2O15-16

 A NEW
SHOWCASE TO
A WORLD OF
EXCELLENCE
CERA opens CERA Style
Studio in Kolkata
A touch and feel display centre ‘CERA Style
Studio’ has been launched by CERA in
Kolkata at Topsia Crossing. The studio is
spread over 4,500 square feet, showcasing
the latest range of sanitary ware, faucets,
tiles and kitchen sinks along with our
complete span of wellness products.

30
SAP - ERP
Rather than viewing IT as a set of tools necessary for
doing business, CERA is looking to gain value from IT
investments. It is focusing on business process re-engineering
and optimizing support processes and on driving IT to
enabled businesses processes and improve its overall
efficiencies in operations.
SAP - ERP, has reasonably high level of standardization, a
minimum of application and solution installation with
limited system customization help CERA to establish and
drive effective control of IT and business costs.
As the company is growing rapidly, the need is felt for
making the systems to be 'fail-safe'. After thorough
evaluation, it was decided to implement SAP.

ANNUAL REPORT 2O15-16

 THE INNOVATIVENESS...

Product Innovations that improve manoeuvrability,

functional ease and also reduces product cost is a key
to success. When these innovative efforts get reflected
into elegant designs and styles it adds more flavour.

CERA's Water Saving

Mission Continues...
CERA is known for its innovation since its inception. Almost 15
years back, when CERA introduced twin-flush in India, it was
a revolutionary concept for water-saving. Today, almost 100%
of one-piece and two-piece WCs from every manufacturer
come with twin-flush option. That was CERA's truly trendsetting
innovation.

32
 E - Commerce

The buying habits of Indian customers are changing

more so in consumer goods. ‘On-Line’ trade has
done phenomenally good these days with growing
interests in quite a few product categories.
CERA’s products are classified under consumer
durables and fits in to the category of ‘E Commerce’
business platform. Serious efforts are being worked
out to structure modality in providing a wide range of
products across the overcoming geographical
barriers with service supports.
CERA is the first to initiate and provide on its website
‘On –line’ support to a concept – ‘DESIGN YOUR
OWN BATHROOM’ with 3-D designing concept and
has found favors with many end user customers.
CERA is currently using the E Com platforms such as
Amazon, Snap-deal and Flip-kart to sell its products.
These platforms, more than generating sales
volumes, offer good visibility to the brand.

ANNUAL REPORT 2O15-16

 Cera, as policy, has decided to ride high on its strong ‘Brand’

ANJANI TILES LTD. image and perceptions, more so in case of product such as TILES
where manufacturing is well supported by trusted international
technology.
The industry has witnessed, for many years, a proven business
model of Joint Venture - 'JV' and the same is successfully
practiced by industry leaders in this country.
After testing the market for more than three consecutive years
with encouraging growth on pure ‘outsourcing’ business model,
the management is convinced that the base needs to be
enlarged with manufacturing and capacity building under
its control.
'Cera' found promoters of Anjani Tiles a perfect set of people to
become 'JV' partners who possess solid experience and capability
in manufacturing tiles of every category. 'CERA' has settled
with controlling interest in ATL leaving operational
manufacturing responsibility with the other partner as it would
buy out entire production to be marketed under brand CERA
thru its wide spread distribution network.
The plant is commissioned for commercial production on
April 01, 2016 with initial capacity of 10,000 sq mtrs. per day and
is located at Dist Nellore in Andhra Pradesh more close to Chennai
as primarily it would help serving southern market with many
commercial advantages.
What is more encouraging is the scalability at the same location.

34
The rational for a tie-up with ISVEA is to add flavor in a As a brand, especially widespread in Southern Italy, it
step towards product premiumization more so with has found a place among the top 10 producers in the
Sanitaryware to help enhance CERA's strengths further to market. - ISVEA”
combat competition from global players. With the advent Cera is sole distributors in India with right to select exclusive
of several MNC brands, the luxury segment of sanitary ware designs from wide range of product mix.
was being captured by them. It was, therefore, necessary for
CERA to protect its turf in the luxury arena to bring in an
international brand, and thus ISVEA was brought in.
ISVEA is a 55 year old Italian luxury designer sanitary ware and
complements CERA perfectly by competing with other
international brands.
"The brand, which has successfully passed through many
stages, and symbolized by the Phoenix, telling us that what
we are searching for at far away distances is actually very
close, inside us, and representing rejuvenation - aiming to
offer a completely different bathroom experience - ISVEA."
"The Italian ISVEA has been founded in 1962, in the
surroundings of Eusanio Del Sangro at a distance of 200 km
to Rome. It has started production as the 7th vitrified
ceramic company of Italy, which is the world leader in the
field of ceramics, and has continued its activities as a
typical Italian producer.

ANNUAL REPORT 2O15-16

FINANCIAL BRAND
INVESTOR'S RELATION AND
CREDIBLE BUSINESS STRATEGIES
THE VISION THAT CREATES SUSTAINABLE VALUE..
SOME INVESTMENTS ARE FOREVER !!
The Four 'C's that depict long term investments that
create wealth are found in diamonds.

‘CLARITY'
The Clarity in Vision

'CUT' -
The Cutting Edge over Competition

'CARAT' - One of the best Mid-sized

building material companies with
strong fundamentals

'COLOR' -
The Transparency

36
Needless to add, 'CERA' now is a preferred
investment destination for many years in
sanitary ware industry and also in Building
Material space especially in domestic
bourses with clarity, cut, carats and color.
‘CERA', a product brand in its own right,
has now evolved into a financial brand
too with its consistent record of higher
earnings.
PAT also the EPS. Noteworthy it is; every
important financial parameter remained
almost steady with whopping growth of
around 13.63 % over FY 2014-15 in the
top line and of 23% in the bottom line !
The Credible Business Plan - Leading
towards Growth & Value Creation.

ANNUAL REPORT 2O15-16

THE MACRO VIEW OF ECONOMY
PROSPECTS
The sanitary ware industry as a whole is very likely to get a tremendous boost with Prime Minister's drive
on much needed improvement in sanitation conditions across the nation. Initially the unorganized sector
should benefit more than the organized sector players. As the momentum picks up the dearth of enough
capacity would force the drive to use better product.
The corporate India under its mandatory CSR activities is expected to take a lot more initiative to support
the Prime Minister’s ambitious drive.
The plan to build 100 smart cities across India will offer a lot more opportunities to the organized payers.
'CERA' slowly has been building capacities to meet with challenging demand fulfilment situations.

The Times of India – New Delhi

12 March, 2016
Business Standard – New Delhi High-end toilets at 94 sites
21 March, 2016
High-end toilet complexes will be developed at 94
RAISING A TOAST TO INDIA sites, tenders for design-build-operate-and-transfer
INC'S TOP ACHIEVERS: Mint (DBOT) basis project are to be floated soon. South
Celebrating the spirit of 23 February, 2016 Corporation will only provide the land; private
entrepreneurship agencies will bear the cost of developing these
Infra sector: issues and expect
toilets and maintain them for 10 years. 300 Sq. Ft. at
The 16th edition of ‘The Business Standard Annual The Government has increased public investment in each of the complexes will also be earmarked for
Award – 2015’, gave a unique opportunity for India infrastructure, announced measures to address advertisements.
INC to discuss balance between development, issues impeding the sector, such as access to long-
security needs and environment conservation. Not term funding, inequitable risk allocation in public-
only the leaders of today, but the leaders of private partnership (PPP) projects & adequate
tomorrow shared the dais as well. The winners were The Economic Times [Gujarati] -
institutional capacity. Business Sectors like Ports,
decided by a distinguished jury led by G N Bajpai, Mumbai
Roads, Aviation, Railways, etc. will be the catalyst for
former chairman of the Securities and Exchange 15 March, 2016
the much needed boost for Infrastructure.
Board of India. The others in the jury were IL&FS Real Estate Bill to boost FDI,
director & group CIO Vibhav Kapoor, IndAsia Fund NDA Government has been successful in identifying
Advisors chairman Pradip Shah and Ashvin Parekh and formulating long-term and visionary bring in more transparency
Advisory Services LLP managing partner Ashvin infrastructure development initiatives, addressing The Realty sector is hopeful about ‘Real Estate Bill’,
Parekh. The jury bestowed CERA Sanitaryware with languishing projects, and pushing certain policy as the changes in the legislations is expected to bring
Star SME award at the BS Awards. initiatives in areas like coastal shipping, aviation and momentum to the real estate sector. The legislation
inland waterways. would bring more transparency, strict monitoring and
Business Standard [Link: http://www.business-
timely revamp of real estate sector in India. The
standard.com/article/companies/bs-awards-2014-
biggest beneficiaries would be some well-
and-the-winners-are-%E2%80%A6-
established property developers like Oberoi Realty,
115032401039_1.html]
Prestige Estates & Godrej Properties, who compete in
the Unorganised Market. They would be the first ones
to recover from the shock.

38
S±ÓÀ |¢¢Ú¼ ç}¢à¢Ý
S±ÓÀ |¢¢Ú¼ The Hindu/ Deccan herald/ Financial Express
»ÜU ÜUÎ}¢ S±ÓÀ¼¢ ÜUè ¥¢ïÚ
26 February, 2016

What it Means – The essentials of a good CSR

programme

SWACHH BHARAT Swachh Bharat Abhiyaan, launched with much fanfare last year, seems to be slowing
down with every passing day. The most of the 122 lakh toilets, still lie unused, raising

ABHIYAN
questions on the very basic element. INR 1917 Cr. have been collected from the
citizens & corporates, by the means of Swachh Bharat Cess. The article outlines
requisite characters for a good CSR programme.

AS AN OPPORTUNITY Business Connect – CSR in alignment with core business interests of the organisation;
Brand Architecture – CSR must create impact on the brand value; Local Relevance –
Local areas specific schemes and plans, while checking its continuity; Effective
Measuring – an effective system of monitoring grants & infrastructure; Dedicated
CSR Professionals to execute etc.
Reliance has emerged as the top company in terms of corporate social responsibility
(CSR), having spent over INR 760 crore, out of the total of 460 listed firms. RIL was
followed by ONGC, Infosys, TCS and ITC. Other companies in the top 10 include NTPC,
NMDC, Tata Steel, Oil India and Wipro. Other companies that managed in the top 20
are Indian Oil, BHEL, Mahindra & Mahindra, Larsen & Toubro, GAIL and Hindustan Zinc.
One of the big challenge before the government is the "deeply entrenched norms and
facilitating behavioural change."
• The Hindu [Link: http://www.thehindu.com/news/cities/mumbai/business/the-
essentials-of-a-good-csr-programme/article8283444.ece]
• Deccan Herald [Link: http://www.deccanherald.com/content/531299/use-
maintain-toilets-village-swachh.html]
• The Financial Express [Link: http://epaper.financialexpress.com/733272/
Ahmedabad/27-February,-2016#page/3/1]

Mint
04 March, 2016

CSR MISSION - How corporate India tackled the

sanitation challenge
Created in Swachh Bharat Abhiyaan, most of the 122 lakh toilets,
still lie unused, raising questions on the very basic element. INR
1917 Cr. have been collected from the citizens & corporates, by the
GROWTH FOR THE means of Swachh Bharat Cess.
One of the big challenge before the initiative is the ‘deeply
INDUSTRY IN GENERAL entrenched norms and facilitating behavioural change.’ The need to
find sanitation solutions which address the whole value
Indian Council of Sanitaryware Manufacturers (INCOSAMA) chain—from building physical structure, advocating the hygiene
welcomes the Prime Minister's vision of Swachh Bharat. benefits, changing behaviour, waste management and
Together with its member partners INCOSAMA pledges its
maintenance. CSR in alignment with core business interests of the
support to translate this vision into reality and took a step
organisation; impact on the brand value; Local Relevance and
forward on the auspicious occasion of Mahatma Gandhi's
birth anniversary.
specific schemes and plans, Effective system of monitoring grants
& infrastructure; Dedicated CSR Professionals to execute etc.

ANNUAL REPORT 2O15-16

 B
U
T

M
B
Build : Build adequate infrastructure for Sanitation
U
Use : Promote utilization and behaviour change
M
Maintain : Maintain Infrastructure, Cleanliness and Safety
T
Treat : Process the sludge generated

SANITATION "Swacch Bharat' on way to switch to a broader understanding of what will make
India truly Swacch."
Nearly 18 months have passed since Prime Minister Narendra Modi launched

PLUS 'Swacch Bharat' Abhiyan on October 02,2014. Riding high on this momentum, the
nation has an unprecedented discourse from vast media campaigns to the Swachh
Bharat Cess on services is welcome move to build greater momentum around a
broader understanding of what will make India truly Swachh.
Indeed the Govt. has clearly emphasized focus on behaviour change and the usage
of toilet. The infrastructure creation is a pre-requisite as we move forward, albeit away
from merely the provision of toilets to toilets that are used, maintained and where
all human waste is safely treated and disposed. There is a need to build
greater momentum around a broader understanding of what will make India
truly Swachh.
We now have a historic opportunity to address the problem of sanitation in its
entirety and use the momentum generated by SBM to realize the ambitions of
sustainable sanitation.
There is significant discussion around engaging corporate India through the SBM.
Many companies have come forward and have contributed particularly through
the infrastructure creation. Government seems to be committed to provide enabling
framework to create business model for sanitation that is economically viable,
socially acceptable and environmentally sound by harnessing the expertise of
the corporate across value chain.

40
ACHIEVING NEARLY
SELF-SUFFICIENCY IN
POWER CONSUMPTION WITH
WIND POWER AND
SOLAR POWER GENERATION

ANNUAL REPORT 2O15-16

 PREFERRED We feel proud when we hear –
'Once a Ceraite; Always a Ceraite’
EMPLOYERS Faced with the economical dilemma of the times, the thrust
has been on talent acquisition and improving the mind set
in the industry. The Company has emerged as an equal
opportunity and progressive employer in the industry. On the
whole, all the efforts have been towards aligning your
Company with the global norms, with a mix of progressive
and welfare activities viz. training and development,
motivation, re-skilling and others so that Company is seen
as a preferred employer in the industry.
The Company continues to invest in training and
development of its employees and has been organizing
various programs from time to time.

42
GOVERNANCE & 'CERA' and its entire management team firmly
believes and practices philosophy of transparency.
TRANSPARENCY Be it a customer, trade partners, stakeholders, bankers
or the Govt., sharing of every legitimate information
is done with a view to enhance credibility and
foster confidence.
An in-house 'Fair Business Practice' mechanism
prevails across the organization. This is aimed to
provide an effective solution to issues that may
have situational importance. Annual accounts are
drawn as per regulatory authorities guide lines and
in accordance with accounting standards.

ANNUAL REPORT 2O15-16

AWARDS

Some noteworthy extracts;

“CRISIL Research has assigned a fundamental grade of
4/5 as well 4/5 for Valuation to Cera Sanitaryware Ltd. on

CRISIL the back of a wide appeal for the CERA brand, established
position in the organized sanitary ware industry, an
extensive distribution network and stable cash flows.
INDEPENDENT EQUITY CRISIL expects the sanitary ware business to grow at 20%

RESEARCH (IER) CAGR in the next two-three years. Simultaneously, entry into
faucet ware appears positive; as it provides a scalable
growth opportunity. ”

“ Expansion in its product suite has benefited CERA as tiles and faucets
powered the growth engine amidst moderation in sanitaryware...
these segments are expected to fuel growth even going forward.”

44
BRAND
AMBASSADOR

ANNUAL REPORT 2O15-16

46
 COMPANY
OVERVIEW

ANNUAL REPORT 2O15-16

STYLE
NOW THINK OUT OF THE BOX

Design that inspires awe

CERA, synonymous with stylish ranges & innovative designs, reflects

this thought with a new logo.

CERA, the creator of imaginative bathroom solutions, starts on an

exciting new journey, where the spirit of freshness crafts waves of
spectacular style.

CERA, Same innovative spirit. Fresh new look.

48
TRAILBLAZING
NEW AVENUES
CERA' is a leading ISO 9001, ISO 14001 and OHSAS 18001 • 'CERA' has been steadfastly moving towards its
compliant sanitary ware and faucet ware manufacturing mission of becoming a force to be reckoned in the
Company, with plant located in Kadi, District total bathroom solution providers.
Mehsana Gujarat.
• Encouraged by market response, during FY 2014-15,
• LAUNCHED IN 1980, 'CERA' IS A PIONEER in the CERA raised its manufacturing capacity to 3.00 mn pcs
Sanitaryware segment in India. The first Sanitaryware p.a. from 2.70 mn pcs. During FY 2014-15, this
Company to use natural gas, 'CERA' has been on the increased capacity utilization almost reached to 95%+.
forefront of launching a versatile colour range and
• The same holds good for Faucet ware also. CERA now
introducing the bath suite concept. It also launched
has built the capacity to produce 7200 pcs. per day
innovative designs and water-saving products.
from current manufacturing capacity of 2500 pcs per
• 'CERA', in 2011-12 ventured into commissioning its day. This is further scalable to 10000 pcs per day.
state-of-the-art faucet ware manufacturing facility where
• 'CERA' entered into JV arrangement with controlling
only quality products, new designs and innovation are
interest in Anjani Tiles Ltd for manufacturing high quality
the focal points.
tiles. Current manufacturing capacity of 2500 pcs per
• During last quarter of FY 2012-13, 'CERA' forayed into day. This is further scalable to 10000 pcs. per day.
ceramic, vitrified and digital tiles for floor as well as
for walls.

ANNUAL REPORT 2O15-16

DETERMINED TO
CHANGE EQUATIONS
The Company had made a modest beginning in
early 80's by putting up a manufacturing facility of
0.3 million pieces p.a. of Sanitary ware. Over the
years, the manufacturing capacity was raised to
2.00 million pieces p.a.
During FY 2012-13, 'CERA' further raised its production
capacity of sanitary ware up to 2.7 million pcs. per
annum. The company has been experimenting in more
than one way involving technological advancement
and improvising process parameters to optimize so to
help achieve a well balanced 'Plant Capacity' to raise
this capacity to 3.00 million pcs per annum and
possibly beyond this… say 3.3 mn pcs p.a.
As for the faucet ware, besides improvement in
product designs with matching quality standards using
its full capacity production of nearly 2500 pcs per day
was taken up as challenge. The results of these efforts
the capacity utilization is nearing 100 % during fiscal
year FY 2013-14. The size of the market of faucet ware
is almost three times the size of the sanitary ware;
albeit with relatively low margins. The company during
2014-15 has raised the capacity to 7200 pcs. per day.
The product synergy, brand and distribution network are
some of cannons on which the company is driving high to
sustain reasonable but better than average industry
growth to support financial results. Over the decades,
the Company has progressed from a Sanitaryware
manufacturer to a provider of Bathroom solutions by
capitalizing on a strong brand image.

SUSTAINING GROWTH MODEL

Being an entrepreneur with distinct characteristics; 'CERA' management is aiming
to enhance market share across a time-frame of the next 3 to 5 years as the company
has the urge to become the leader in the industry. The management is confident that
the company has matching strengths.
The right kind of product basket; distribution reach; emphasis on consistent quality
and innovativeness; responsible attitudes; a well balanced mix of revenue stream
between own manufacturing and outsourcing AND above all an urge to become
a market leader in product category are some of the fundamentals on which the
entire business model has become growth-prone.
The right strategies; a well structured business plan and well defined KRAs (key
Result Areas) are at the foundation on which CERA's business model rests.

50
OUR FOCUS
'CERA', at current manufacturing location, the company
has been continuously striving to build a world class
technology base in the sanitaryware industry; with well-
established process parameters and stringent quality
norms. The efforts are further extended in building and
strengthening a dependable brand image, as we are
known for excellence through product quality, pioneer in
innovativeness and proactive in servicing.
The brand that essentially caters to customers' needs
across length and breadth of market in the segments of
Sanitaryware, Faucet ware, and Life style products, the
Company has made stable arrangements in China and
other parts of South- East Asia for complete outsourcing of
some of the premium range of Sanitary ware and life style
bath ware products, which would complement its
domestic production. These products are manufactured by
Chinese / South-East Asian vendors under CERA's
stringent quality norms as they are marketed and serviced
under banner of brand 'CERA'.
Leveraging on strong brand image; enlargement of product
basket; formatting a revenue model with emphasis on
product-outsourcing backed up by stringent quality norms;
an eagle eye on 'above industry average ROE' and
empowering the human talent are some of the focussed
areas as identified for focussed efforts.

ANNUAL REPORT 2O15-16

 MOVING FORWARD WITH THE SPIRIT OF EXCELLENCE

52
FINANCIAL FINESSE
A FRIEND IN NEED is a FRIEND INDEED,
this is an old saying;

INTERNAL AND EXTERNAL

STAKEHOLDERS
'CERA' has successfully created a remarkable fulfilment
of customers' expectations and resultant brand acceptance,
which we continuously strive to achieve. We believe in
proliferating by way of technology, high quality standards
and sustainable business expansion. Our work environment
and support to retail establishments in nationwide distribution
network incorporate spatial planning to create favorable
ambience for every home as well as business. This has
become possible with dedicated continuous support from
every stakeholder, be it internal or external.

BUSINESS PLAN & STRATEGIES

An elaborate business plan, strong execution abilities,
adaptability to market dynamics, strict monitoring and
an eagle’s eye right on the target over contributory
factors that has bearing over growth vis-a-vis
sustainable margins – just to mention a few that go
to create and build a strong long term.

ANNUAL REPORT 2O15-16

5 YEARS' HISTORICAL –
WHAT IS ON THE ANVIL

5 YEAR FINANCIAL OVERVIEW

Particulars 2011-12 2012-13 2013-14 2014-15 2015-16

Net Income 319.39 487.87 663.69 821.67 933.69

Other Income 6.85 8.99 6.15 6.58 9.97
Total Income 326.24 496.86 669.84 828.25 943.66
EBITDA (excluding other Income) 53.36 75.33 94.94 117.54 141.28
Depreciation 7.71 9.42 12.25 15.46 16.32
Finance Charges 4.00 7.09 6.44 7.73 5.46
Profit Before Tax 48.50 67.81 82.40 100.93 129.46
Profit After Tax and minority interest 32.04 46.20 51.91 67.66 83.46

Financial Position [Rs. In Crore (except number of shares)

Particulars 2011-12 2012-13 2013-14 2014-15 2015-16

Equity Share Capital 6.33 6.33 6.33 6.50 6.50

Reserve and Surplus 132.85 173.17 217.64 345.21 414.52
Networth 139.18 179.50 223.97 351.71 421.02
Gross Block 132.41 175.29 211.68 287.92 310.53
Net Block (incl. Capital WIP ) 101.21 129.38 156.90 222.34 230.04
Investments 1.09 1.38 12.13 47.76 47.47
Cash & Bank Balance 31.30 40.35 30.71 29.53 59.39
Net Current Assets 70.27 86.70 103.35 174.27 224.34
No. of Shares 1,26,54,874 1,26,54,874 1,26,54,874 1,30,05,874 1,30,05,874

Ratios % (except EPS)

Particulars 2011-12 2012-13 2013-14 2014-15 2015-16

EBITDA margin 18.85 17.28 15.23 15.11 16.20

PAT margin 10.03 9.47 7.82 8.24 8.94
Return on Capital Employed (ROCE) 26.20 26.98 31.51 25.47 29.14
Return on Net Worth (RONW) 23.03 25.74 23.17 19.24 19.82
Earnings Per Share (in Rs.) 25.32 36.51 41.02 53.36 64.17
Dividend Per Share (in Rs.) 3.00 4.00 5.00 6.25 9*
* Subject to approval from Share Holders in the ensuing Annual General Meeting

NSE Ticker Trading symbol [CERA]

BSE Ticker [scrip code 532443] [scrip ID CERASAN]
ISIN No in NSDL & CDSL INE 739E01017

54
 2011-12 2012-13 2013-14 2014-15 2015-16

Net
Income 319.39 487.87 663.69 821.67 933.69

2011-12 2012-13 2013-14 2014-15 2015-16

Net
Worth 139.18 179.50 223.97 351.71 421.02

2011-12 2012-13 2013-14 2014-15 2015-16

Gross
Block 132.41 175.29 211.68 287.92 310.53

2011-12 2012-13 2013-14 2014-15 2015-16

PAT 32.04 46.20 51.91 67.66 83.46

2011-12 2012-13 2013-14 2014-15 2015-16

EBITDA 53.36 75.33 94.94 117.54 141.28

ANNUAL REPORT 2O15-16

 WHERE WILL CERA
POSSIBLY BE
IN NEXT 5 YEARS

The Sanitaryware industry is generally growing at

average rate of 14-16 per cent, annually. The year under
review - FY 2015-16 was exceptionally subdued due to
various economic reasons more for the entire realty and
construction industry across pan India with growth
percentage coming down drastically.
Despite, 'CERA' during FY 2015-16 registered top line
growth of around 13.63% amidst subdued business
conditions. The efforts are on not only to sustain CAGR
last 3 years but also to improve upon.
The trend for 'lifestyle-plus living' is quite upbeat, given
the rise in 'disposable incomes' as also higher levels
of education. This scenario is expected to sustain for a
long period. Despite quite a few foreign brands
entering the Indian market, brand 'CERA' enjoys its
own niche place in the market, with customer loyalty
demonstrated through recall values. 'CERA' is expecting
a larger share from the market on the back of the
national priority on improvements in sanitation
conditions and housing boom. 'CERA' is looking forward
to expand its capacities not only in Sanitaryware but
also finds good opportunity to do so in Faucet ware
as well. Besides this, the enlargement of product basket
with emphasis on outsourcing business model and
leveraging on a strong brand image as thickening
revenue streams is a path charted out for now. With all
these in place, it is expected to enhance 'CERA'
market penetration across the nation.
What adds to the scenario is that the entire Capex
funding has been planned largely with internal accruals
generated through our own operations; the balance
with support from our existing bankers. This financial
structure is expected to lay solid foundations for a much
stronger growth in time to come.

56
 EXPANSION &
CAPEX FUNDING
As part of our growth strategy, we have chalked out 'Three
Year Rolling Plan' of CAPEX of around Rs. 180 Cr.-200 Cr.
spread over next three years.
This, essentially is envisaged to be used to add on further
manufacturing capacities in Sanitaryware and Faucet ware
besides strengthening the brand 'CERA' to help leverage its
marketing efforts with other products having synergy. The
way pattern of CAPEX funding as planned, is expected to
add further values to already existing strong fundamentals.

ANNUAL REPORT 2O15-16

OUR IDENTITY
PACKING PLENTY OF PUNCH
The launch of CERA Studios a decade long ago in different
cities, where the consumers, influencers and trade could
come, look, touch and feel the entire high-end ranges of
CERA has played an immense role in bringing up the
brand image of CERA.
The CERA Bath Studio was later renamed as CERA Style
Studio, in tune with the new communication strategy.
Over a period of time, the need for much larger CERA
Style Studios was felt and almost all of them were re-located
to more upcoming areas of the city or made bigger in
size-starting with the one in Kochi to around 9,000 sq. ft.,
followed by relocation of Bangalore Style Studio to
Indiranagar. The Delhi CERA Style Studio started functioning
from an independent building in Gurgaon, while in
Mumbai, it was relocated to the Western Suburb on Veera
Desai Road in Andheri. The Hyderabad CERA Style
Studio doubled its size while the Ahmedabad CERA Style
Studio was relocated to a much visible and larger premises
in Acropolis Mall, on S.G. Highway. A new such style
studio was opened in Kolkata mainly to concentrate focus
in Eastern Indian market.

ADDING MORE GLAMOUR

TO BRAND CERA
While Bollywood actress Ms. SONAM KAPOOR,
fashion icon for the young generation and a
well-known celebrity from the film fraternity has
been roped in as CERA's brand ambassador to
supplement the visibility. The three CERA ads for
its sanitaryware, faucets and tiles featuring
Ms. SONAM KAPOOR unleashed on satellite
television channels has created a flutter.

58
 'CERA' has a noteworthy nationwide presence for the
entire product portfolio.
Over the years, the Company has opened up its own
display centres – 'CERA Style Studio' in Ahmedabad,
Bengaluru, Chandigarh, Kochi, Hyderabad, Kolkata, Gurgaon,
Chennai, Thiruvananthapuram and Mumbai besides it has
'CERA Style Galleries' in Andhra Pradesh, Chandigarh /
Haryana / Punjab, Delhi, Gujarat, Karnataka, Kerala,
Maharashtra, Tamil Nadu, Uttar Pradesh, Bihar, Goa,
GOING FAR TO Himachal Pradesh, Jammu & Kashmir, Madhya Pradesh,
Sikkim, Rajasthan and Telangana.
COME CLOSER For CERA, its responsibility does not end by manufacturing
quality products. A team of over 120 technicians across
India provides prompt after-sales services to its customers.
CERA also provides unique support to its customers during
the designing phase itself through an interactive website. At
CERA's website, customers design their own bathrooms in
2D and 3D, and also can place orders online, a first of its
kind initiative in the building material industry.

ANNUAL REPORT 2O15-16

PRODUCT LINES & BUSINESS
'CERA' has four product lines which majorly contribute to the
business and the top line revenue stream :

SANITARYWARE
Though there are no authentic data available, according We have a very modern plant located at GIDC Kadi,
to reliable sources, the size of Indian market is estimated District, Mehsana, Gujarat. At the current capacity we are
around Rs. 3500 to Rs. 4000 Crores. Further, the sources manufacturing 3.00 million pieces p.a. The plant is
indicate that the market in India is growing at steady operated almost at 98 % of this capacity installed.
pace of 8%-12 % annually. Whilst the small producers of
This capacity was raised to 3.00 mn pcs p.a.. during the
sanitaryware from unorganized sectors used to have a larger
FY 2014-15 The products largely include variety of
share of the business, the trend is steadily shifting towards
sanitaryware with a wide colour range. The technology
'branded' products.
used is of international class and has been acknowledged
CERA' is favourably positioned with its product portfolio in by some of the world leaders in Sanitaryware segments
upper - upper and upper - lower segments of the market like 'American Standard' who earlier had preferred 'CERA'
pyramid. We are one of the three large organized units to help them establishing in Indian Market with
catering to Indian market and have consistently reported manufacturing some of their sanitaryware models.
growth exceeding 35 %, much higher than industry standards.

60
FAUCETWARE
The manufacturing facilities at Faucet ware division is well day. This is further scalable to 10000 pcs per day across a
equipped in many aspects. The Design dept. is well time span of two-three years.
supported by CAD/CAM & 3D printer for developing
The market size of Faucet ware, according to sources, is
prototypes and reduce time element and control potential
more than three times that size of sanitary ware.
process losses to major extent.
Faucet ware has synergies with CERA's current product
The plant is equipped with VMC's/CNC, high tech energy
range, which largely goes into the bathroom. We have
saving induction furnaces, gravity die-casting machines,
been servicing the market with quality outsourced product
high pressure testing facilities, auto polishing machines,
for the last few years under our brand name - effectively,
robotic controlled grinding machines, auto-plating nickel-
we tested the market and the business. . The market is
chrome plant and some special purpose machines to produce
fairly large and can be estimated as being around
quality conforming products.
Rs. 10,000 Cr. + .
The QC laboratory has latest equipment to test metal
We entered Faucet ware manufacturing with our own facility
composition and other testing facilities for consistency and
at Kadi in North Gujarat. Our current capacity and market
uniformity to help reduce process losses and providing
share is only a fraction of this large sized market. This
quality controlled products, using eco-friendly chemicals to
leaves a good scope for expanding capacity, given the
keep environment clean.
credibility that the brand enjoys.
Our Faucet laboratory is also approved & certified by IAPMO
All the designs are modern, user friendly, aqua dynamic
India (The International Association of Plumbing and
and are latest, unique, durable and easy to maintain.
Mechanical Officials).
The product range consists of single levers, quarter turns,
We added Faucet ware to our manufacturing range. The
and half turns which use the best raw material compositions
current manufacturing capacity is raised to 7200 pcs per
and are capable of sustained.

ANNUAL REPORT 2O15-16

LIFE STYLE PRODUCTS
'CERA' range of wellness and life style products include
steam shower rooms, shower rooms, shower cubicles,
shower partitions, whirlpool bath tubs, normal bath tubs
and shower panels.
Bath tubs are made from high quality acrylic with Ceramic
light finish, which is environment friendly and light weight.
Water inlets and outlets are designed to ensure complete
water drainage after use. Stainless steel frame with
height adjustable ensure levelling on any floor. Safety
protections like fire retardant acrylic material, overflow,
and auto shut down and automatic malfunction deduction
ensure trouble-free performance.

TILES
Based on the strong brand image and wide distribution
network, the company has entered into Tiles business. The
business model rests totally on CERA's outsourcing strengths
and leveraging on strong brand image using widespread
distribution network across the nation.
'CERA' has launched tiles, which consisted of HD digital
wall tiles with matching floor tiles besides digital polished
glazed vitrified tiles. In addition to this, the normal vitrified
tiles with Nano technology are also offered by CERA.
To strengthen its manufacturing base, ‘CERA’ has entered into
JV arrangements with controlling interest of 51% in Anjani
Tiles Ltd. at Dist. Nellore in Andhra Pradesh. The plant
is commissioned and commercial production has started.

62
 OUR
STRENGTHS THE BRAND CERA
CERA's strength lies in offering innovative and high quality
products with disciplined approach, responsible and
customer focused attitudes – always striving for excellence,
all at a price that is – Value for Money .
We always deliver what we promise…. What we do, we
do well, challenging our own performance.
The Brand which inspires creativity, passion and optimism.

INVESTMENT IN TECHNOLOGY
At 'CERA', we have been continuously making significant shower partitions, whirlpool bath tubs, normal bath tubs
investments in technology, enhancing manufacturing capacity, and shower panels.
developing capabilities and establishing high quality control
Bath tubs are made from high quality acrylic with Ceramic
systems to enable desired results on schedule.
light finish, which is environment friendly and light weight.
'CERA' range of wellness and life style products include Water inlets and outlets are designed to ensure complete
steam shower rooms, shower rooms, shower cubicles, water drainage after use. Stainless steel frame.

ANNUAL REPORT 2O15-16

PEOPLE
STRENGTH

CERA considers its trade partners as its extended family.

The trade has been CERA's backbone and with their unstinted

EXTENDED support, CERA has been able to wither out the worst of
economic downturns.
FAMILY CERA felicitated top 100 dealers of CERA at a function
recently held in April 2016 at Mumbai.

64
ASSET
UTILIZATION

SANITARYWARE
At 'CERA', we believe in optimum utilization of assets. The manufacturing team is
well experienced to ensure best technical output and yield on product recovery
keeping stringent quality norms close to the heart.
The process parameters, as established, in production are outcome of years of
experiments and development efforts by dedicated team of technologists. The
equipments comprise of general purpose sanitary ware machineries; specially
Mr. Vivek Tiwari
President - Works developed machines to suit some of the processes and high Tech Kilns in
sanitaryware division.

FAUCETWARE
The same is true for Faucet ware with addition of the CNC machines and special
purpose machines.
The Faucet ware too, is equipped with high tech induction furnaces, gravity
die-casting machine, pressure testing facilities, mould making machines to ensure
Mr. I. J. Singh quality and consistency of its products.
V.P.-Works (Faucet ware)

'CERA' is virtually a debt free company. Its sound

THE STRONG financial position backed up by efficient cost management

has helped to establish some 'benchmark' financial

FINANCIALS parameters and ratio which have been found favourite

by many. It is an enterprise with interesting
fundamentals creating value for its investors. The
company has been posting consistent higher earnings
Mr. R. B. Shah and so the profits after tax. These contribute a lot to make
CFO the company the most attractive investment destination
when compared within the Indian sanitaryware industry.

ANNUAL REPORT 2O15-16

CSR & CSR Initiatives
WOMAN EMPOWERMENT Activities carried out in and around Kadi Factory in nearby villages
1. Promoting awareness amongst people and educating them to
change the mindset on sanitation to accept this as a basic need
to enhance value to infrastructure development program.
2. Promoting and imparting vocational guidance to youths on ceramic
technology and take up this job oriented vocational courses.
3. Promoting Women empowerment. Providing training to have
equal opportunities to stand on their own feet and support
their family with employment potentials within ceramic industry.

66
YES..

..WE HAVE MANY

FEATHERS IN OUR CAP !!

ANNUAL REPORT 2O15-16

 MESSAGE TO
SHAREHOLDERS & INVESTING
COMMUNITY AT LARGE

The management would like to remind 'CERA' shareholders that at

the macro level, the sanitation condition in India is pathetic. Our line
of business offers ample scope to grow, so the outlook is bright.
At 'CERA', we respect the holdings and investments by our shareholders.
We are working hard to create and sustain value for our stakeholders.
We believe that the investing community would appreciate our efforts.

DISCLAIMER
Certain statements in this release concerning our future growth prospects are forward-looking
statements within the meaning of applicable securities laws and regulations. These statements
involve a number of risks and uncertainties, beyond the control of the Company that could cause
actual results to differ materially from those appearing in such forward-looking statements. The risks
and uncertainties relating to these statements include, but are not limited to, risks and uncertainties
regarding fluctuations in earnings, our ability to manage growth, intense competition including those
factors which may affect our cost advantage, wage increases, our ability to attract and retain highly
skilled professionals, political instability, managerial limitations and legal restrictions of acquiring
companies outside India, and unauthorized use of our intellectual property and general economic
conditions affecting our industry.
CERA Sanitaryware Ltd. may, from time to time, make additional written and oral forward looking
statements, including our reports to shareholders. The Company does not undertake to update any
forward-looking statement that may be made from time to time by or on behalf of the company,
as a sequel to or in continuation of these statements.
The Company also expects the media to have access to all or parts of this release and the
management's commentaries and opinions thereon, based on which the media may wish to comment
and/or report on the same. Such comments and/or reporting maybe made only after taking due
clearance and approval from the Company's authorized personnel.
The Company does not take any responsibility for any interpretations / views / commentaries / reports
which may be published or expressed by any media agency, without prior authorization of the
Company's authorized personnel.

68
 CERA Sanitaryware Limited
Designed by ‘Sobhagya’ Ph : 079-26584264

CIN : L26910GJ1998PLC034400
Regd. Office: 9, GIDC Industrial Estate, Kadi-382 715, Dist. Mehsana, Gujarat.
Phone: (02764) 242329, 262619, 262638, Fax: (02764) 242465
E-mail: kadi@cera-india.com

www.cera-india.com