Cera Sanitaryware Ltd Management Discussions.

As you are aware, your Company was in an unprecedented situation, like almost all other manufacturing companies, in the fiscal year 2020-21. Your Company quickly adapted to the new norms and made it the new normal, which helped your Company overcome the situation with minimal effect.

Firstly, there was a nation-wide lockdown, bringing the production and sales to a grinding halt. Your Company used work from home situation to its advantage, creating awareness about the pandemic not only amongst its employees but also its business associates—suppliers, trade partners, designers, architects, consultants, developers, and end-users. Digital campaigns were used extensively for creating this awareness.

Once the lockdown was lifted partially and production and sales resumed, the emphasis was on safety of workforce and traders. The entire factory and office premises were periodically sanitised and all employees were screened at the entrance. All Covid-19 protocols like social distancing, wearing of mask, temperature check, hand sanitisation, etc. were strictly followed in manufacturing units as well as sales offices.

Your Company had nurtured suppliers because of which even when own production was affected due to an illegal strike resorted to by a section of workforce which lasted 85 days, the supplies to market was less impacted. The entire workforce restarted the work, after the Hon’ble High Court of Gujarat issued an order to the leaders of the striking section of workers that the production cannot be hampered.

Your Company helped Covid warriors by keeping its canteen in the factory working throughout the lockdown period. Your Company also contributed Rs. 24.69 Lakhs to PM Cares Fund.

Since physical travels and personal meetings were not advisable even after the lockdown was lifted, your Company continued the new normal of digital meetings with employees, trade partners, designers and even end users for introducing new products.

Cera Style Studios, your Company’s display centres, changed as online display portal. Anyone could book an appointment and see the products online through a guided video call.

Digital platforms like MS Teams were used for imparting training to your Company’s technicians and sales personnel and also to sales personnel of trade partners. These digital platforms were also used for dissemination of information on new product developed and launched by your Company to even designers, architects, builders and consultants.

With these concentrated efforts, your Company was able to attain the topline matching to previous fiscal, despite unprecedented halts in production and sales for several months.

1. Right product mix:

Your Company was quick in conceiving, developing, manufacturing and rolling out Covid-appropriate products in the shortest time, like:

a) Sensor faucets

b) Foot operated faucets

c) Anti-bacterial seat covers

d) Rimless WCs

e) Sensor urinals

2. Use of high tech in manufacturing:

Your Company has been in the forefront of co-creating indigenous technology for production, like 3D printing, robotic glazing, etc.

Your Company also implemented high pressure casting, for high end wall hung WCs, which could produce thirty pieces from one mould in a day, as compared to one piece by one worker in a day from conventional casting systems.

In Faucetware too, induction of high tech machines has helped increase production.

3. Constant brand promotion:

Your Company continued its brand promotion using television as well as digital platforms. Digital platforms were used to narrow-cast its ads to relevant target audience, thereby reducing the media wastage.

Making the product and brand visible through retail outlets has always been your Company’s motto. Your Company does periodic audit of its retail outlets to ensure that the branding and product display are intact.

4. After-Sales Service:

Your Company’s CERA Care team of technicians, with a 24-hour toll free call centre, and timely on-site service from the technicians to individual customers, has been one of its key strengths in generating customer loyalty and helping it garnerword of mouth publicity.

Even during lockdown, CERA Care team members continued to connect to the needy customers and provide online solutions.

5. Company Display Centres:

For providing touch and feel experience to customers, the Company - managed large format CERA Style Studios in selected cities, while dealers own and operate CERA Style Galleries and CERA Tile Galleries. In case of retailers owned customer touch points, CERA Style Centres and CERA Tile Centres provide customers not only an insight of your Company’s products, but also a delightful shopping experience.

The CERA Style Studios operated as digital display centres with guided tour of the products for customers who did not want to visit the showrooms.

6. Manpower Training:

Your Company constantly imparts training to not only its own sales and service teams, but also to its dealers’ and sub-dealers’ salesmen. During the lockdown period and also in subsequent period, the training was conducted digitally.

7. Industry Structure and Developments:

Your Company is present in all segments—from affordable to luxury.

8. Opportunities and Threats:

After the lockdown was lifted, there was surge in demand. With the second wave of Covid (and presumably another third wave expected in the second half of this year), there would be an increase in demand for housing, giving the boost to the demand of your Company’s products.

9. Outlook:

Your Company has been a preferred partner of CREDAI (Confederation of Real Estate Developers Associations of India), the apex body of developers, for the last seven years. Your Company also works closely with influencers and their associations like IIA (Indian Institute of Architects), IIID (Institute of Indian Interior Designers) and IPA (Indian Plumbing Association).

10. Risks and Concerns:

Any drastic change in Government policy may affect your Company.

11. Internal Control Systems and their adequacy:

The Company has an adequate system of internal financial controls with reference to the financial statements and also relating to the purchase of stores, raw materials, plant & machineries, equipment and various components and for the sale of goods commensurate with the size of the Company and the nature of business.

The system of internal control of the Company is adequate keeping in mind the size and complexity of your Company’s business. Systems are regularly reviewed to ensure effectiveness. The internal auditors monitor and evaluate the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report on the internal audit function, necessary corrective actions in the respective areas are taken and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the audit committee of the board.

12. Key Financial Ratios: (in times / %)

Ratio 2020-21 2019-20
1. Debtors Turnover 6.61 5.49
2. Inventory Turnover 3.46 3.05
3. Interest Coverage Ratio 32.46 32.94
4. Current Ratio 2.60 2.52
5. Debt Equity Ratio 0.47 0.46
6. Operating Profit Margin % 11.53% 11.99%
7. Net Profit Margin % 8.43% 9.59%
8. Return on Net Worth % 11.58% 15.00%

13. Financial performance with respect to operational performance is discussed in the main part of the Report.

14. Material Developments in Human Resources, Industrial Relations, Environment, Health & Safety:

Faced with the shortage of quality manpower, the thrust of your Company has been on talent improvement through training programmes.

Your Company continues to invest in training and development of its employees and has been organizing various training programmes from time to time. CERA’s manpower strength as on March 31, 2021 stands at 2473.

The Company is ISO9001, 14001 and BS 18001 certified.

Your Company is also a member of Indian Green Building Council (IGBC), promoted by Confederation of Indian Industry (CII).

Vikram Somany

Chairman and Managing Director

(DIN : 00048827)


10th June, 2021

Activity wise Corporate Social Responsibility (CSR) initiatives:

Empowering Society; Empowering Ourselves

Real progress occurs when privileges are balanced with the responsibilities towards society. Your Company has always laid emphasis on progress with a social commitment. Your Company believe strongly in core values of empowerment and betterment of not only the employees but also communities. Following this principle, Late Shri Vidush Somany your Companys Executive Director had laid the foundation of a comprehensive approach towards promoting and facilitating various aspects of surrounding communities.

During the financial year CERA has undertaken following projects:

- Contributed Rs. 24.69 lakhs to PM Cares Fund in support of the objective of the fund to strengthening the fight against COVID-19.

- Continued the support to Bhagyoday Hospital Kadi in memory of Late Shri Vidush Somany for the welfare of poor and needy patients of Kadi & from nearby area. This year the contribution was used for installing Oxygen Generator Plant which was the need of the hour due to ongoing COVID-19 pandemic.

- Contributed Rs. 230 lakhs out of total committed Rs. 650 lakhs towards construction of new engineering college named as "Vidush Somany Institute of Technology and Research" in the campus of "Sarva Vidyalaya Kelavani Mandal". Kadi (SVKM) with a total capital outlay of Rs. 4212 Lakhs. The total committed contribution has been paid in full. This institute will conduct initially five branches of engineering, viz. Ceramic Technology, Computer Engineering, Information Technology, Civil and Mechanical Engineering. The said college is in full operations. The new branches will be added after the year as per the guidelines of AICTE.

- Undertaken about 10000 plus plantation and maintenance on road divider about 11 K.M. from Chhatral to Kadi.

- Continued the contribution to "Annamrita Foundation"- Kolkata, for providing mid-day meals to 1100 needy children daily.

- Contribution to Rotary Children’s Welfare Trust to create facilities for underprivileged children, renovation of building for women empowerment training, providing benches & medical equipment for children.

- Contribution made to Basu Foundation for upliftment of Arts.

- Contribution made for the support to Old Age and Widows, provided daily lunch to needy and support given to Girls hostel for education and food.

Cera initiated " Swatchh Bharat Abhiyan" programme in the month of December 2019 at Kadi–Chhatral highway, which was further supported by local Nagar Palica, APMC and local students. Total 300 plus collage students have participated in this mission.

Due to COVID-19 pandemic which prevailed during the entire year, our regular CSR activities to various agencies like vocational coaching for students, women empowerment in nearby areas, Divyanagri Program for upliftment of children from slum etc could not take place in support of the guidelines issued by State & Central Government.

Vikram Somany

Chairman and Managing Director



10th June, 2021