Annual Report 2007-08

Cera Sanitaryware Limited

SANITARYWARE | TILES | TAPS
 Cera Sanitaryware Limited
Board of Directors
Shri Vikram Somany Chairman-cum-Managing Director
Shri Sajan Kumar Pasari
Dr. Abraham Koshy
Dr. K. N. Maiti
Shri Shree Narayan Mohata
Shri Vidush Somany Executive Director
Shri S. C. Kothari Sr. Wholetime Director

Bankers
State Bank of Saurashtra
ICICI Bank Ltd.

Auditors
M/s. H. V. Vasa & Co.,
Chartered Accountants,
B-2, "Usha Kiran", Opp. Khanpur Gate,
Ahmedabad - 380 001.

Registered Office
9, GIDC Industrial Estate, Kadi-382 715,
Dist. Mehsana, Gujarat, India.

Works
1) 9, GIDC Industrial Estate, Kadi-382 715, Dist. Mehsana, Gujarat.
2) Wind Farms :
a) Vill. Lamba & Patelka, Tal. Kalyanpur, Dist. Jamnagar, Gujarat.
b) Vill. & Tal. Kalyanpur, Dist. Jamnagar, Gujarat.
c) Vill. Kadoli, Tal. Abdasa, Dist. Kutchh, Gujarat.

Corporate Office
"Madhusudan House", Opp. Navrangpura Telephone Exchange, Ahmedabad - 380 006.

Registrar & Share Transfer Agent

MCS Limited,
101, Shatdal Complex, 1st Floor,
Opp. Bata Show Room, Ashram Road,
Ahmedabad - 380 009.

Contents Page No.

Notice 2
Directors' Report 11
Corporate Governance Report 16. •
Auditors' Report 20
Balance Sheet 22
Profit & Loss Account 23
Schedules 1 to 18 24
Cash Flow Statement 35
General Business Profile 36

Annual General Meeting at 11.30 a m. on Friday,

the 12th day of September, 2008 at the Registered Office.
Annual Report 2007-2008,
NOTICE
Notice is hereby given that the Tenth Annual General Meeting of the
Members of CERA SANITARYWARE LIMITED will be held at 11.30
a.m. on Friday, the 12th day of September, 2008 at the Registered
Office of the Company at 9, GIDC Industrial Estate, Kadi - 382 715,
Dist. Mehsana, to transact the following business:
ORDINARY BUSINESS
1. To consider and adopt Audited Profit and Loss Account for the
year ended 31st March, 2008 and Balance Sheet as at that
date and the Directors' and Auditors' Reports thereon.
' Somany.
2. To declare dividend on Equity Shares.
3. To appoint a director in place of Shri Sajan Kumar Pasari, who
retires by rotation and being eligible, offers himself for
reappointment.
4. To appoint a director in place of Shri S. N. Mohata, who retires
by rotation and being eligible, offers himself for reappointment.
5. To appoint Auditors to hold office from the conclusion of this
Annual General Meeting till the conclusion of the next Annual
General Meeting and to fix their remuneration.
SPECIAL BUSINESS
6. To consider and, if thought fit, to pass with or without
modification the following resolution as an ordinary resolution.
RESOLVED THAT Dr. Abraham Kpshy appointed as an
Additional Director of the Company by Board of Directors and
who ceased to hold the office at this meeting u/s. 260 of the
Companies Act, 1956 and in respect of whom the Company
has received notice in writing u/s. 257 of the Companies Act,
1956 proposing his candidature for the office of the director be
and is hereby appointed as director of the Company.
7. To consider and, if thought fit, to pass with or without
modification the following resolution as an ordinary resolution.
RESOLVED THAT Dr. K. N. Maiti appointed as an Additional
Director of the Company by Board of Directors and who
ceased to hold the office at this meeting u/s. 260 of the
Companies Act, 1956 and in respect of whom the Company
10.
has received notice (n writing u/s. 257 of the Companies Act,
1956 proposing his candidature for the office of the director be
and is hereby appointed as director of the Company.
8. To consider and, if thought fit, to pass with or without
modification the following resolution as an ordinary resolution.
RESOLVED THAT Shri Santosh Kumar Nema appointed as
an Additional Director of the Company by Board of Directors
and who ceased to hold the office at this meeting u/s. 260 of
the Companies Act, 1956 and in respect of whom the Company
has received notice in writing u/s. 257 of the Companies Act,
1956 proposing his candidature for the office of the director be
and is hereby appointed as director of the Company.
To consider and, if thought fit, to pass with or without
modification the following resolution as a special resolution.
RESOLVED THAT approval of the members be and is hereby
accorded in terms of Sections 198, 269, 309, 311, 349, 350,
Schedule XIII and other applicable provisions, if any, of the
Companies Act, 1956 for the re-appointment of and for the
remuneration payable to Shri Vikram Somany as Chairman-
cum-Managing Director of the Company for a period of three
years w. e. f. 13.08.2008 in terms of agreement entered into
by the Board of Directors of the Company with Shri Vikram
RESOLVED FURTHER THAT Shri Vikram Somany,
Chairman-cum-Managing Director will not be liable to retire by
rotation.
RESOLVED FURTHER THAT the Chairman-cum-Managing
Director is also entitled to the benefits as per the rules of the
Company, which the other employees of the Company are
entitled to.
RESOLVED FURTHER THAT total remuneration payable to
all the working directors including Shri Vikram Somany shall
not exceed 10% of the net profit of the company in any financial
year, calculated in accordance with the provisions of Section
198, 309, 349, 350, Schedule XIII and other applicable
provisions, if any, of the Companies Act, 1956.
RESOLVED FURTHER THAT in the event of absence or
inadequacy of profit in any financial year during the tenure of
his appointment, total remuneration payable shall not exceed
the maximum limit prescribed under Schedule XIII of the
Companies Act, 1956 and any amendment thereof from time
to time, if and to the extent with necessary approvals.
RESOLVED FURTHER THAT the Board of Directors of the
Company be and is hereby authorized to alter and vary the
terms and conditions of the said appointment and / or
agreement in such a manner in terms of sections 198, 269,
309,311,349,350 read with Schedule XIII and other applicable
provisions, if any, of the Companies Act, 1956 being in force
as may be agreed between the Board of Directors and
Chairman-cum-Managing Director.
To consider and, if thought fit, to pass with or without
modification the following resolution as a special resolution.
RESOLVED THAT approval of the members be and is hereby
accorded in terms of Sections 198, 269, 309, 311 ,'349, 350,
Schedule XIII and other applicable provisions, if any, of the
Companies Act, 1956 for the appointment of and for the
remuneration payable to Shri S. K. Nema as Whole Time
Director and designated as CEO-cum-Whole Time Director
of the Company for a period of three years w. e. f. 1.07.2008
in terms of agreement entered into by the Board of Directors
of the Company with Shri S. K. Nema.
RESOLVED FURTHER THAT Shri S. K. Nema, Whole Time
Director will be liable to retire by rotation.

RESOLVED FURTHER THAT the Whole Time Director is
also entitled to the benefits as per the rules of the Company,
which the other employees of the Company are entitled to.
RESOLVED FURTHER THAT total remuneration payable to
all the working directors including Shri S. K. Nema shall not
exceed 10% of the net profit of the" company in any financial
year, calculated in accordance with the provisions of Section
198, 309, 349, 350, Schedule XIII and other applicable
provisions, if any, of the Companies Act, 1956.
RESOLVED FURTHER THAT in the event of absence or
inadequacy of profit in any financial year during the tenure of
his appointment, total remuneration payable shall not exceed
the maximum limit prescribed under Schedule XIII of the
Companies Act, 1956 and any amendment thereof from time
to time, if and to the extent with necessary approvals.
RESOLVED FURTHER THAT Shri S. K. Nema, Whole Time
Director appointed herein above be and is hereby appointed
as an "Occupier" of the Company as defined under Section 2
of the Factories Act.
RESOLVED FURTHER THAT the Board of Directors of the
Company be and is hereby authorized to alter and vary the
terms and conditions of the said appointment and / or
agreement in such a manner in terms of sections 198, 269,
309,311,349,350 read with Schedule XIII and other applicable
provisions, if any, of the Companies Act, 1956 being in force
as may be agreed between the Board of Directors and Whole
Time Director.
11. To consider and, if thought fit, to pass with or without
modification the following resolution as a special resolution.
RESOLVED THAT in supersession of the resolution passed
by the members at the Annual General Meeting held on
26.09.2007, approval of the members be and is hereby
accorded in terms of Sections 198, 269, 309, 311, 349, 350,
Schedule XIII and other applicable provisions, if any, of the
Companies Act, 1956 for the re-appointment of and for the
remuneration payable to Shri Vidush Somany as Executive
Director, of the Company for a period of three years w. e. f.
1.07.2008 in terms of agreement entered into by the Board of
Directors of the Company with Shri Vidush Somany.
RESOLVED FURTHER THAT Shri Vidush Somany, Executive
Director will not be liable to retire by rotation.
RESOLVED FURTHER THAT the Executive Director is also
entitled to the benefits as per the rules of the Company, which
the other employees of the Company are entitled to.
RESOLVED FURTHER THAT total remuneration payable to
all the working directors including Shri Vidush Somany shall
not exceed 10% of the net profit of the company in any financial
year, calculated in accordance with the provisions of Section
198, 309, 349, 350, Schedule XIII and other applicable
provisions, if any, of the Companies Act, 1956.
RESOLVED FURTHER THAT in the event of absence or
inadequacy of profit in. any financial year during the tenure of
his appointment, total remuneration payable shall not exceed
the maximum limit prescribed under Schedule XIII of the
Cera Sanitaryware Limited
Companies Act, 1956 and any amendment thereof from time
to time, if and to the extent with necessary approvals.
RESOLVED FURTHER THAT the Board of Directors of the
Company be and is hereby authorized to alter and vary the
terms and conditions of the said appointment and / or
agreement in such a manner in terms of sections 198, 269,
309,311,349,350 read with Schedule XIII and other applicable
provisions, if any, of the Companies Act, 1956 being in force
as may .be agreed between the Board of Directors and
Executive Director.
12. To consider and, if thought fit, to pass with or without
modification the following resolution as a special resolution.
RESOLVED THAT pursuant to the provisions of Section
309(4) and other applicable provisions, if any of the Companies
Act, 1956 a sum not exceeding 1 % p.a. of the net profits of the
Company calculated in accordance with the provisions of
Sections 198, 309, 349 and 350 of the Companies Act, 1956
be paid to and distributed among the directors not in whole
time employment of the Company in such manner, as the
Board of Directors may from time to time determine and in
default equally in each financial year of the company for a
period of 5 years, commencing from 1sl April, 2008 upto 31s'
March, 2013.
By Order of the Board of Directors
Kadi-382 715 Narendra N. Patel
10th June, 2008 G. M. & Company Secretary
NOTES
1. A MEMBER ENTITLED TO ATTEND AND VOTE IS
ENTITLED TO APPOINT PROXY TO ATTEND AND VOTE
INSTEAD OF HIM SELF AND SUCH PROXY NEED NOT BE
AMEMBEROFTHE COMPANY.
2. Members are requested to notify immediately the change of
address, if any, to the Company or M/s. MCS Limited,
Registrar and Share Transfer Agent.
3. The Register of Members and Share transfer book of the
Company will remain closed from 01.09.2008 to 12.09.2008
(both days inclusive).
4. The Board of Directors has recommended 30% dividend on
fully paid Equity Shares of Rs.5/- each for the year ended
31.03.2008.
5. Members / Proxies should bring the attendance slip sent
herewith duly filled in for attending the meeting.
6. Members are requested to send their queries atleast ten days
before the date of the meeting so that the information can be
made available at the meeting.
7. Explanatory statement u/s. 173(2) of the Companies Act, 1956
is annexed hereto.
8. Shareholders holding shares in Electronic Form may note
that their bank account details as furnished by their depositories
to the Company will be printed on their dividend warrants as
Annual Report 2007-2008,
per the applicable regulations of the depositories and the Company will not entertain any direct request from such shareholders for deletion
of / change in such bank details. Shareholders who wish to change such Bank Account details are, therefore, requested to advise their
Depository Participants about such change, with complete details of bank account.

9. All the documents referred to in this notice and explanatory statement are available for inspection of the members at the registered office
of the Company on any working day except Saturday, between 11:00 a.m. to 1:00 p.m. up to the conclusion of this meeting.

10. Brief resumes of directors, who are proposed to be appointed / reappointed at this meeting are given below:
Name of Director Shri S.K. Pasari Shri S. N. Mohata Dr. Abraham Koshy
Date of Birth 21.02.1947 3-12-1944 18-10-1953
Date of Appointment 15.06.2004 7-05-2005 31-10-2007
Expertise in Specific Businessman Administration/Commercial Marketing
Functional Areas

List of other Regent Estates Ltd.
Directorships Bajrang Factory Ltd.
Assam Roofing Ltd.
India Automobiles (1 960) Ltd.
The Chamong Tea Co. Ltd.
Merrygold Properties Pvt. Ltd.
Kiwi Estates Pvt. Ltd.
Parmeshwar Estates Pvt. Ltd.
I A Builders Pvt. Ltd.
I A Property Developers Pvt. Ltd.
Priyanka Overseas Pvt. Ltd.
Chairman / Member of the - \
Committees of the Board of
other Companies
Shareholding in the Company 1,28,570
Madhusudan Industries Ltd. The Federal Bank Ltd.
Madhusudan Holdings Ltd. Malayala Manorama Co. Ltd.
Autoline Industries Ltd.
Deepak Cements &
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Bammo Polymers Ltd.
S. B. Press (Private) Ltd.
Risk Management Committee
H R Committee
Customer Care Committee
50 . •

Name of Director ShriS.K.Nema Shri Vikram Somany Shri Vidush Somany Dr. K. N. Maiti
Date of Birth 6.06.1959 26.08.1949 09.03.1981 23.09.1946
Date of Appointment 1.07.2008 27.11.2001 15.06.2004 24.05.2008
Expertise in Specific Marketing & Industrialist Industrialist Ceramic Scientist
Functional Areas Commercial

List of other Madhusudan Fiscal Ltd. Asopalav Plantations Decolight Ceramics Ltd.
Directorships Pvt. Ltd.
Indian Council of
Sanitaryware "
Manufacturers

Chairman / Member of the - - - .. • -

Committees of the Board of
other Companies
Shareholding in the Company • 4,58,264 6,83,260 . -
 Cera Sanitaryware Limited
Explanatory Statement pursuant to Section 173(2) of the of members of the Company at the General Meeting. Shri Vikram
Companies Act, 1956. Somany as Chairman-cum-Managing Director shall discharge every
duty and function subject to the superintendence, direction and control
Item No. 6
of the Board of Directors of the Company. The Company has entered
The Board of Directors has appointed Dr. Abraham Koshy as an into agreement with Shri Vikram Somany for his re-appointment as
Additional Director with effect from 31.10.2007 u/s. 260 of the Chairman-cum-Managing Director.
Companies Act, 1956. As per the provisions of the said section he Shri Vikram Somany, Chairman-cum-Managing Director will not be
will hold office till this Annual General Meeting. However, being eligible liable to retire by rotation.
for re-appointment he offers himself for the same. The Company
has also received notice from a member of the Company signifying However, Shri Vikram Somany shall not exercise the following powers
his intention to propose Dr. Abraham Koshy being appointed as as Chairman-cum-Managing Director.
director of the Company under the provisions of Section 257 of the
(a) make calls on shareholders in respect of moneys unpaid on
companies Act, 1956. It is in the interest of the Company to have the
the shares of the Company;
benefit of the services of Dr. Abraham Koshy, as director, who is
expert in marketing field. (b) issue debentures, and
Your directors commend the resolution as per item no. 6 of the (c) except as may be specifically delegated by the Board under
notice for passing by members. Section 292 of the Companies Act, 1956, invest the funds of
the Company or make loans and borrow moneys.
Except, Dr. Abraham Koshy, none of your directors is concerned or
interested in the said resolution. The main terms and conditions for the appointment of Shri
- Vikram Somany as Chairman-cum-Managing Director are as
Item No. 7
follows:
The Board of Directors has appointed Dr. K. N. Maiti as an Additional
1. Period of Appointment: 3 years w. e. f. 13.08.2008
Director with effect from 24.05.2008 u/s. 260 of the Companies Act,
1956. As per the provisions of the said section he will hold office till 2. Remuneration
this Annual General Meeting. However, being eligible for
re-appointment he offers himself for the same. The Company has I) Salary : In the range of Rs. 3,15,000 —
also received notice from a member of the Company signifying his Rs.4,50,000 per month. The next increment of
intention to propose Dr. K. N. Maiti being appointed as director of the salary will be due w.e.f. 01.04.2009.
Company under the provisions of Section 257 of the companies Act, II) Perquisites:
1956. It is in the interest of the Company to have thg benefit of the
technical services of Dr. K. N. Maiti, as director, who is Ceramic Category - A
Scientist. a) Accommodation: Free furnished housing
Your directors commend the resolution as per item no. 7 of the accommodation or house rent allowance
notice for passing by members. as may be mutually agreed by both the
parties.
Except, Dr. K. N. Maiti, none of your directors is concerned or
interested in the said resolution. b) Facilities of gas, electricity, water and
furnishings : The expenditure incurred by
Item No. 8 the company on gas, electricity, water and
furnishings shall be valued as per Income-
The Board of Directors has appointed Shri S. K. Nema as an Additional
tax Rules, 1962. This shall, however, be
Director and whole time director with effect from 1.07.2008 u/s. 260
subject to a ceiling of 10% of the salary of
of the Companies Act, 1956. As per the provisions of the said section
he will hold office till this Annual General Meeting. However, being the appointee.
eligible for re-appointment he offers himself for the same. The c) Medical benefit: Medical reimbursement
Company has also received notice from a member of the Company including Mediclaim for self and family
signifying his intention to propose Shri S. K. Nema being appointed subject to one month's salary in a year or
as director of the Company under the provisions of Section 257 of three months' salary over a period of three
the companies Act, 1956. It is in the interest of the Company to have years.
the benefit of the services of Shri S. K. Nema, as director, who is well
experienced in marketing and commercial fields. d) Leave Travel Concession : For self and
family once in a year to and fro any place in
Your directors commend the resolution as per item no. 8 of the India in accordance with the Rules of the
notice for passing by members. company.
Except, Shri S. K. Nema, none of your directors is concerned or e) Club Fees : Annual fees of club subject to
interested in the said resolution. a maximum of two clubs. This will not
include admission and life membership fee.
Item No. 9
f) Insurance : Personal Accident Insurance
Shri Vikram Somany was appointed as Chairman-cum-Managing
of an amount annual premium of which
Director of the Company for period of three years with effect from
does not exceed Rs.6,000/-
13.08.2005, which come to end on 12.08.2008.
g) Bonus : As per rules of the Company as
Shri Vikram Somany has been re-appointed as Managing Director
applicable to other executives/ employees
and designated as Chairman-cum-Managing Director of the Company
of the Company.
for a period of three years with effect from 13.08.2008 by the Board
of Directors at their meeting held on 24.05.2008, subject to approval
Annual Report 2007-2008,
h) Special Allowance: As may be decided by
Board of Directors.
i) Performance Incentive: As may be decided
by Board of Directors.
Category - B
Contribution to Provident Fund or Annuity Fund:
As per the rules of the Company as applicable to
other executive / employees of the Company.
Category - C
a) Free telephone facility at residence and a
mobile telephone. Personal long distance
calls on telephone will be billed by the
company to the appointee.
b) Free use of Car with driver for company's
work only. The use of car for private
purpose shall be billed by the company to
the appointee.
Others
a) The Chairman-cum-Managing Director is also
entitled to the benefits as per the rules of the
Company, which the other executives / employees
of the Company are entitled to.
b) . He will not be entitled to Sitting Fee for attending
the meetings of the Board of Directors or
Committee(s) thereof.
The Board or Committee thereof, in its absolute discretion will
fix within the range stated above the remuneration payable to
the chairman-cum-Managing Director depending on the
performance of the Chairman-cum-Managing Director, size,
of operations, profitability and other relevant factors annually.
However, total remuneration payable to all the working directors
including Shri Vikram Somany shall not exceed 10% of the net
profit of the company in any financial year, calculated in
accordance with the provisions of Section 198, 309,349,350,
Schedule XIII and other applicable provisions, if any, of the
Companies Act, 1956. In the event of absence or inadequacy
of profit in any financial year during the tenure of his
appointment, total remuneration payable shall not exceed the
maximum limit prescribed under Schedule XIII of the Companies
Act, 1956 and any amendment thereof from time to time, if ancj
to the extent with necessary approvals.
3. The terms and conditions of the said appointment and / or
agreement may be altered and varied from time to time by the
Board as it may, in its discretion deem fit, including the
maximum remuneration payable to the Chairman-cum-
Managing Director in accordance with section 198, 269, 309,
349, 350, Schedule XIII and other applicable provisions, if
any, of the Companies Act, 1956 or any amendments made
thereafter in this regard from time to time.
4. If at any time Shri Vikram Somany ceases to be a Director of
the Company for any cause whatsoever, he will cease to be
the Chairman-cum-Managing Director.
5. This may be treated as an amendment to the abstract of
the agreement between the Company and Shri Vikram
Somany already sent to the members u/s. 302 of the
Companies Act, 1956.
The copy of agreement entered into with Shri Vikram Somany
,is open for inspection at the registered office of the Company
between 11.00 a.m. to 1.00 p.m. on any working day except
Saturday upto the date of ensuing Annual General Meeting.
Appointment and remuneration payable to Shri Vikram Somany
is approved by the remuneration committee by resolution at
the meeting held on 24.05.2008.
Your directors commend the resolution as per item no. 9 of
the notice for passing by the members.
Except, Shri Vikram Somany and Shri Vidush Somany, none
of your directors is concerned or interested in the said
resolution. Shri Vikram Somany is the father of Shri Vidush
Somany, Executive Director of the company.
Item No. 10
Shri S. K. Nema was appointed as Whole Time Director and
designated as CEO-cum-Whole Time Director at the meeting of
Board of Directors held on 11.04.2008 subject to the approval of the
Central Government.
At the meeting of Board of Directors held on 24.05.2008, it was
proposed that Shri S.K. Nema be appointed as Whole Time Director
as per the provisions of Section 198, 269, 309, 349, 350, Schedule
XIII and other applicable provisions, if any, of the Companies Act,
1956 without making application to the Central Government for prior
approval.
It was also proposed that managerial remuneration payable to all the
working directors including Shri S.K. Nema shall not exceed 10% of
the net profit in any financial year calculated in accordance with the
provisions of Sections 198, 309, 349, 350, Schedule XIII and other
applicable provisions, if any, of the Companies Act, 1956.
Shri S. K. Nema has been appointed as Whole Time Director and
designated as CEO-cum-Whole Time Director of the Company for a
period of three years w.e.f. 1.07.2008 by the Board of Directors at
their meeting held on 24.05.2008, subject to approval of members of
the Company and shall discharge every duty and function subject to
the superintendence, direction and control of the Board of Directors
of the Company and / or Chairman-cum-Managing Director. The
Company has entered into an agreement with Shri S. K. Nema for his
appointment as Whole Time Director.
Shri S. K. Nema ,Whole Time Director will be liable to retire by rotation.
However, Shri S. K. Nema shall not exercise the following powers as
Whole Time Director:
(a) make calls on shareholders in respect of moneys unpaid on
the shares of the Company;
(b) issue debentures, and
(c) except as may be specifically delegated by the Board under
Section 292 of the Companies Act, 1956, invest the funds of
the Company or make loans and borrow moneys.
Shri S. K. Nema, Whole Time Director be appointed as an "Occupier"
of the Company, as defined under section 2 of the Factories Act.
The main terms and conditions for the appointment of Shri S. K.
Nema as Whole Time Director are as follows:
1. Period of Appointment: 3 years w.e.f. 1.07.2008.
2. Remuneration
I) Salary: In the range of Fls.2,05,000 — Rs.3,20,000 per
month, w.e.f. 1.07.2008. The next increment of salary
will be due w.e.f. 01.04.2009.

II) Perquisites:
Category - A
a) Accommodation: Free furnished housing
accommodation or house rent allowance as may
be mutually agreed by both the parties.
b) Medical benefit: Medical reimbursement including
Mediclaim for self and family subject to one
month's salary in a year or three months' salary
over a period of three years.
c) Leave Travel Concession: For self and family
once in a year to and fro any place in India in
accordance with the Rules of the company.
d) Club Fees: Annual fee of one club. This will not
include admission and life membership fee.
e) Insurance: Personal Accident Insurance of an
amount annual premium of which does not exceed
Rs.6,000/-
f) Bonus: As per rules of the Company as applicable
to other executives/employees of the Company.
g) Special Allowance: As may be decided by Board
of Director and / or the Chairman -cum-Managing
Director.
h) Performance Incentive: As may be decided by
Board of Directors and / or the Chairman -cum-
Managing Director.
Category - B
a) Contribution to Provident Fund or Annuity Fund:
As per the rules of the Company as applicable to
other executives / employees of the Company.
b) Gratuity : Gratuity payable in accordance with
the company's scheme thereof as applicable to
other executives / employees of the company.
Category - C
a) Free telephone facility at residence and a mobile
telephone. Personal long distance calls on
telephone will be billed by the company to the
appointee.
b) Free use of Car with driver for company's work
only. The use of car for private purpose shall be
billed by the company to the appointee.
Others
a) The Whole Time Director is also entitled to the
benefits as per the rules of the Company, which
the other executives / employees of the Company
are entitled to.
b) He will not be entitled to Sitting Fee for attending
the meetings of the Board of Directors or
Committee(s) thereof.
The Board or Committee thereof, in its absolute
discretion will fix within the range stated above the
remuneration payable to the CEO-cum-Whole Time
Director depending on the performance of the CEO-
curn-Whole Time Director, size of operations, profitability
and other relevant factors annually.
Cera Sanitaryware Limited
However, total remuneration payable to all the working
directors including Shri S.K. Nema shall not exceed
10% of the net profit of the company in any financial
year, calculated in accordance with the provisions of
Section 198, 309, 349, 350, Schedule XIII and other
applicable provisions, if any, of the Companies Act, 1956.
In the event of absence or inadequacy of profit in any
financial year during the tenure of his appointment, total
remuneration payable shall not exceed the maximum
limit prescribed under Schedule XIII of the Companies
Act, 1956 and any amendment thereof from time to
time, if and to the extent with necessary approvals.
3. The terms and conditions of the said appointment and /
or agreement may be altered and varied from time to
time by the Board as it may, in its discretion deem fit,
including the maximum remuneration payable to the
CEO-cum-Whole Time Director in accordance with
section 198,269,309,349,350, Schedule XIII and other
applicable provisions, if any, of the Companies Act, 1956
or any amendments made thereafter in this regard from
time to time.
4. If at any time Shri S. K. Nema ceases to be a Director of
the Company for any cause whatsoever, he will cease
to be the Whole Time Director.
5. If at any time Shri S. K. Nema ceases to be (in the
employment of the Company for any cause whatsoever,
he will cease to be a Director and Whole Time Director
of the Company and if at anytime Shri S. K. Nema ceases
to be a Whole Time Director for any cause whatsoever,
he will cease to be in the employment of the Company.
6. Whole Time Director may resign from the service of the
Company by giving three months notice in advance.
Similarly, the Company has the right to terminate the
service of Whole Time Director at any time by giving
three months notice in writing.
7. This may be treated as an amendment to the
abstract of the agreement between the Company
and Shri S. K. Nema already sent to the members
u/s. 302 of the Companies Act, 1956.
The copy of agreement entered into with Shri S. K. Nema is
open for inspection at the registered office of the Company
between 11.00 a.m. to 1.00 p.m. on any working day except
Saturday upto the date of ensuing Annual General Meeting.
Appointment and remuneration payable to Shri S. K. Nema is
approved by the remuneration committee by resolution at the
meeting held on 24.05.2008.
Your directors commend the resolution as per item no. 10 of
the notice for passing by the members.
Except, Shri S. K. Nema, none of your directors is concerned
or interested in the said resolution.
Item No. 11
Shri Vidush Somany was appointed as Executive Director of the
Company for period of three years with effect from 15.06.2007. His
appointment and remuneration was fixed as per the provisions of
schedule XIII and other applicable provision, if any of the Companies
Act, 1956.
The members of the Board felt that remuneration payable to all the
working directors including Shri Vidush Somany shall not exceed
10% of net profit in any financial year calculated in accordance with
the provisions of section 198, 309, 311, 349, 350, schedule XIII and
Annual Report 2007-2008
other applicable provisions, if any of the companies act, 1956.
Accordingly, Shri Vidush Somany has been re-appointed as Executive
Director of the Company for a period of three years with effect from
1.07.2008 by the Board of Directors at their meeting held on
24.05.2008, subject to approval of members of the Company at the
General Meeting. Shri Vidush Somany as Executive Director shall
discharge every duty and function subject to the superintendence,
direction and control of the Board of Directors of the Company and /
or Chairman-cum-Managing Director. The Company has entered
into agreement with Shri Vidush Somany for his re-appointment as
Executive Director.
Shri Vidush Somany, Executive Director will not be liable to retire by
rotation.
However, Shri Vidush Somany shall not exercise the following powers
as Executive Director.
(a) make calls on shareholders in respect of moneys unpaid on
the shares of the Company;
(b) issue debentures, and
(c) except as may be specifically delegated by the Board under
Section 292 of the Companies Act, 1956, invest the funds of
the Company or make loans and borrow moneys.
The main terms and conditions for the appointment of Shri
Vidush Somany as Executive Director are as follows:
1. Period of Appointment: 3 years w. e. f. 1.07.2008
2. Remuneration
I) Salary : In the range of Rs. 1,35,000 —
Rs.2,50,000 per month. The next increment of
salary will be due w.e.f. 01.04.2009.
II) Perquisites:
Category - A
a) Accommodation : Free furnished housing
accommodation or house rent allowance
as may be mutually agreed by both the
parties.
b) Facilities of gas, electricity, water and
furnishings : The expenditure incurred by
the company on gas, electricity, water and
furnishings shall be valued as per Income-
tax Rules, 1962. This shall, however, be
subject to a ceiling of .10% of the salary of
the appointee. ' •
c) Medical benefit: Medical reimbursement
including Mediclaim for self and family
subject to one month's salary in a year or
three months' salary over a period of three
years.
d) Leave Travel Concession : For self and
. family once in a year to and fro any place in
India in accordance with the Rules of the
company.
e) Club Fees : Annual fees of club subject to
a maximum of two clubs. This will not
include admission and life membership fee.
f) Insurance : Personal Accident Insurance
of an amount annual premium of which
does not exceed Rs.6,000/-
g) Bonus : As per rules of the Company as
applicable to other executives/ employees
of the Company.
h) Special Allowance: As may be decided by
• Board of Directors and / or Chairman-cum-
Managing Director.
i) Performance Incentive: As may be decided
by Board of Directors and / or Chairman-
cum-Managing Director.
Category - B
Contribution to Provident Fund or Annuity Fund:
As per the rules of the Company as applicable to
other executives / employees of the Company.
Category - C
a) Free telephone facility at residence and a mobile
telephone. Personal long distance calls on
telephone will be billed by the company to the
appointee.
b) Free use of Car with driver for company's work
only. The use of car for private purpose shall be
billed by the company to the appointee.
Others
a) The Executive Director is also entitled to the
benefits as per the rules of the Company, which
the other executives / employees of the Company
are entitled to.
b) He will not be entitled to Sitting Fee for attending
the meetings of the Board of Directors or
Committee(s) thereof.
The Board or Committee thereof, in its absolute
discretion will fix within the range stated above the
remuneration payable to the Executive Director
depending on the performance of the Executive
Director, size of operations, profitability and other
relevant factors annually.
However, total remuneration payable to all the working
directors including Shri Vidush Somany shall not exceed
10% of the net profit of the company in any financial
year, calculated in accordance with the provisions of
Section 198, 309, 349, 350, Schedule XIII and other
applicable provisions, if any, of the Companies Act, 1956.
In the event of absence or inadequacy of profit in any
financial year during the tenure of his appointment, total
remuneration payable shall not exceed the maximum
limit prescribed under Schedule XIII of the Companies
Act, 1956 and any amendment thereof from time to
time, if and to the extent with necessary approvals.
3. The terms and conditions of the said appointment and /
or agreement may be altered and varied from time to
time by the Board as it may, in its discretion deem fit,
including the maximum remuneration payable to the
Executive Director in accordance with section 198,269,
309, 349, 350, Schedule XIII and other applicable
provisions, if any, of the Companies Act, 1956 or any
amendments made thereafter in this regard from time
to time.
4. If at any time Shri Vidush Somany ceases to be a
Director of the Company for any cause whatsoever, he
will cease to be the Executive Director.
 Cera Sanitaryware Limited
5. This may be treated as an abstract of the agreement (Rs. in lacs)
between the Company and Shri Vidush Somany
u/s. 302 of the Companies Act, 1956. PA R T I C U L A R S Audited
for the
The copy of agreement entered into with Shri Vidush Somany year ended
is open for inspection at the registered office of the Company
31.03.2008
between 11.00 a.m. to 1.00 p.m. on any working day except
Saturday upto the date of ensuing Annual General Meeting. 12 Reserves excluding
revaluation reserve 5881.66
Appointment and remuneration payable to Shri Vidush Somany
is approved by the remuneration committee by resolution at (as per balance sheet)
the meeting held on 24.05.2008. 13 a) Basic EPS (in Rs.) 16.36
Your directors commend the resolution as per item no. 11 of b) Diluted EPS (in Rs.) 16.06
the notice for passing by the members. c) Cash EPS (in Rs.) 29.57
Except, Shri Vidush Somany and Shri Vikram Somany, none 14 Public Shareholding
of your directors is concerned or interested in the said - No. of shares 2787034
resolution. Shri Vidush Somany is the son of Shri Vikram - Percentage of shareholding 45.06
Somany, Chairman-cum-Managing Director of the company.
Note:
Statement as required under schedule XIII of the Companies The Board of Directors has recommended dividend of
Act, 1956. (For item nos. 9,10 & 11 of notice) 30% (Rs.1.50 per fully paid Equity Share of Rs.5 each)
I. General Information : for the year 2007-08.
(5) Exports of Goods on F.O.B. basis during the financial
(1) Nature of Industry: Manufacturing of Sanilarywares, year 2007-08 of the Company was Rs.279.12 lacs.
trading of Bathroom accessories and Captive Non-
conventional Energy. (6) The Company has no foreign investment. However,
the Company has allotted 5,50,000 Equity Shares to
(2) The commercial production began 27 years ago. Mauritius based strategic investor.
(3) The Company is not a new Company. Information about the appointees:
(1) Background Details:
(4) Financial Performance :as on 31st March, 2008
SHRI VIKRAM SOMANY
(Rs. in lacs)
Shri Vikram Somany has'set up Ceramic Division of
PARTICULARS Audited Madhusudan Industries Limited (now known as Cera
for the Sanitaryware Limited after de-merger). He is Chairman-
year ended cum-Managing Director of Cera Sanitaryware Limited.
31.03.2008 SHRI S. K. NEMA
1 Gross Sales 13936.45 Shri S.K. Nema, B.E. (Mech.) and PGDM, IIM,
Less : Excise Duty 1131.42 Ahmedabad, is having 25 years of experience in various
Net Sales 12805.03 fields including marketing. He is Chief Executive Officer
of the Company. He is appointed as Whole Time Director
2 Other Income 237.08 w.e.f. 01.07.2008.
3 Total Income 13042.11 SHRI VIDUSH SOMANY
4 Expenditure Shri Vidush Somany is a young entrepreneur having
a) Increase / decrease in -456.07 bachelors Degree in Management Studies from Franklin
stock in trade and & Marshal College, Pennsylvania, U.S.A. He is
work in progress Executive Director of the Company w.e.f. 15.06.2004.
b) Consumption of raw materials 1308.97 (2) Past Remuneration:
c) Purchases (outsourcing) 3831 .79 In the year 2007-08, remuneration paid by the Company
d) Power & Fuel 580.36 was as under:
e) Employee Cost 2014.96 Shri Vikram Somany - Rs. 44.75 Lacs
Shri S. K. Nema - Rs. 39.47 Lacs
f) Depreciation 494.14
Shri Vidush Somany - Rs. 20.36 Lacs
g) Other expenditure 3396.93
(3) Recognition or awards : Nil
h) Total 11171.08
(4) Job profile and his suitability
5 Interest 317.21
Shri Vikram Somany, Chairman-cum-Managing Director
6 Profit before tax 1553.82 is responsible for managing the affairs of the Company
7 Tax Expenses 548.91 subject to the superintendence, control and direction of
10 Net Profit (+)/Loss (-) 1004.91 the Board of Directors. His experience and knowledge
has helped the Company to a great extent. It is under
Operating Profit 2365.17
his guidance that the Company could survive the stiff
Cash Profit 1815.95 competition and withstand adverse marketing conditions
11 Paid-up equity share capital 309.25 and pay consistent dividend and hopes to improve the
(Face Value Rs. 5/- each) performance further.
Annual Report 2007-2008,
Shri S. K. Nema, Whole Time Director and Chief
Executive Officer, is responsible for managing the affairs
of the Company subject to the superintendence, control
and direction of the Board of Directors and/or Chairman-
cum-Managing Director. His rich experience in
marketing field will benefit the Company immensely.
Shri Vidush Somany, Executive Director is responsible
for managing the affairs of the Company subject to the
superintendence, control and direction of the Board of
Directors and/or Chairman-cum-Managing Director.
His educational background coupled with managerial/
executive experience and very positive approach is
very helpful to the Company,
(5) Remuneration proposed :
The Company proposes to pay remuneration for next
three years as under:
Shri Vikram Somany : Basic salary in the scale of
Rs.3,15,000 - 4,50,000 p.m. plus perquisites &
allowances.
Shri S.K. Nema: Basic salary in the scale of Rs.2,05,000
- 3,20,000 p.m. plus perquisites & allowances.
Shri Vidush Somany : Basic salary in the scale of
R's.1,35,000 - 2,50,000 p.m. plus perquisites and
allowances.
However, total remuneratilon payable to all the working
directors shall not exceed 10% of the net profit of the
company in any financial year, calculated in accordance
with the provisions of Section 198, 309, 349, 350,
Schedule XIII and other applicable provisions, if any, of
the Companies Act, 1956. In the event of absence or
inadequacy of profit in any financial year during the
tenure of his appointment, total remuneration payable
shall not exceed the maximum limit prescribed under
Schedule XIII of the Companies Act, 1956 and any
amendment thereof from time to time, if and to the extent
with necessary approvals.
(6) The comparative remuneration payable to Chairman-
cum-Managing Director, Whole Time Director and
Executive Director in similar industries is quite higher in
comparison to what has been proposed in the present
case. The remuneration proposed is quite moderate.
(7) Shri Vikram Somany and Shri Vidush Somany being
members of Promoter Group along with Promoter
Companies and relatives, hold 33,97,980 Equity Shares
of the Company.
Shri S.K. Nema has no pecuniary relation directly or
indirectly with the Company or with managerial personnel.
Other Information
(1) Reasons of loss or inadequate profits :
Presently the profit of the Company is adequate and it
proposes to pay remuneration to the working directors
of the Company as per Section-l, Part-ll of Schedule
XIII of the Companies Act, 1956 i.e. 10% of net profits
pursuant to Section 198 & 309 of the Companies Act.
In case of no profit or inadequacy of profit in future
during the tenure of working directors, the Company
proposes to pay minimum remuneration as per Section-
II, Part-ll of Schedule XIII of the Companies Act, 1956
and any amendment thereof from time to time, if and to
the extent with necessary approvals.
10
(2) Steps taken or proposed to be taken for improvement:
The Company has hired a leading ceramic scientist for
developing new body to meet international standard and
to reduce the cost. The benefits will be reflected in the
current year.
(3) Expected increase in productivity & profit in measurable
terms :
The company has completed expansion cum
modernisation programme during the year by installing
and commissioning fuel efficient tunnel kiln and other
utilities like gas based captive power plant thereby
reduced cost of production and increased the efficiency
of the plant.
IV. Disclosures:
(1) Remuneration Package:
It is as stated in Explanatory Statement of Item No. 9,
10 and 11 of the Notice of Annual General Meeting.
(2) The Company has made all necessary disclosures in
the Directors' Report under a separate Corporate
Governance Report, which is attached with the Annual
Report for the year 2007-08.
(3) Stock Option :
Shri Vikram Somany and Shri Vidush Somany were not
given any stock option being members of Promoters
Group. Shri S.K. Nema is granted 15000 stock options
in January, 2008 at a price of Rs.61/- per share (at 50%
discount of then prevailing market price when the
Employee Stock Option Scheme was framed) which
will be vested in him over a period of 3 years (1/3rd
every year) after one year's vesting period. Vested
options can be exercised by him within 18 months from
the date of vesting of options.
Itenyjo. 12
Section 309(4) of the Companies Act, 1956; provides that in the
case of the directors who are not in the whole-time employment of
the Company, the shareholders, may by Special Resolution, authorise
the payment of commission for a period of five years, '
Taking into account the increase in the responsibilities shouldered
by the directors, it is proposed that the directors other than the
Whole Time Directors be paid commission not exceeding 1 % of the
net profits of the Company, calculated in accordance with the
provisions of Sections 198, 309, 349 & 350 of the Companies Act,
1956 for a period of 5 years from 01.04.2008. This amount will be
distributed among all or some of the non working Directors in such
manner, as the Board of Directors may from time to time determine
and in default equally, in each financial year.
Your directors commend the resolution as per item no. 12 of the
notice for passing by the members.
All the Directors except Shri Vikram Somany, Shri Vidush Somany,
Shri S. C. Kothari and Shri S. K. Nema, may be deemed to be interested
or concerned in the said resolution.
By. Order of the Board of Directors
Kadi-382 715 Narendra N. Patel
10th June, 2008 G. M. & Company Secretary
 Cera Sanitaryware Limited
Directors' Report

To encouraging results. In this category, there is one strong

The Members, Indian brand, followed by mediocre brands.
The Directors have pleasure in submitting the Annual Report together Soon, your company will also enter premium tile segment,
with the Statement of Accounts of your Company for the year ended through outsourcing.
31 "March, 2008. (b) Opportunities and Threats
Performance The construction industry, which is booming in the country, in
The summary of your Company's financial performance is given not only large towns, but even in small towns, gives ample
below: opportunity for your company to maintain a healthy growth
(Rs. in lacs) rate. The construction industry too has got majorly
Yearended Year ended corporatized, which also helps your company, because of the
March 31,2008 March 31, 2007 emphasis on quality and brand.
(c) Outlook
Profit before Depreciation and Taxes 2047.96 1752.43
The continuous brand building done by your company has
Deducting there from Depreciation of 494.14 354.10
helped it easy entry into any major market or segment.
Profit before tax 1553.82 1398.33 Simultaneous thrust on increase in distribution network to make
Deducting therefrom taxes of: brand visible in more outlets, coupled with focus on key markets
- Current Tax 215.50 390.12 and key corporate builders are yielding growth. Your company
- Fringe Benefit Tax 16.51 19.50 will continue this exercise in the ensuing months and years.
- Deferred Tax 316.90 82.06 The continuous efforts to improve quality and productivity have
Prof it after Tax 1004.91 906.65 put your company at par with the comparable International
Add: Balance brought forward from ' companies. The innovations of the past by your company, like
one-piece WCs and water-saving twin-flush cisterns have today
previous year 500.00 400.00
become industry norms.
Amount available for Appropriations 1504.91 1306.65 Your company's growth continues to be much above the
The proposed appropriations are: - industry growth, year after year, which is testimony to its
;
1. Proposed Dividend 92.78 66.83 marketing success.
2. Tax on Proposed Dividend 15.77 11.35 The successful display centre concept of your company,
3. General Reserve 796.36 728.47 introduced through Cera Bath Studios in several cities, is now
4. Balance carried forward 600.00 500.00 being extended in the form of Cera Bath Galleries with its retail
partners. In Cera Bath Gallery, the customers can not only
Total 1504.91 1306.65 touch and feel the Cera range, but also can purchase it. After
its success in Delhi, this year, Cera Bath Galleries will come up
Sanitaryware Unit in several towns across the country.
Looking to the growth of the market, the company completed (d) Risks and Concerns
expansion programme, increasing the installed capacity to 24,000
MTPA from 16,500 MTPA. The expansion has been completed in Any drastic change in the Government Policy may affect the
October, 2007. Sanitaryware manufacturers.
The company continues to make efforts in improving the Plant which (e) Internal Control Systems and their adequacy
has resulted in higher production by 21.23%. The turnover of the The Company has adequate system of internal control relating
Company in the year under review increased by 20%. to the purchase of stores, raw materials, plant & machineries,
equipments and various components and for the sale of goods
Power Unit
commensurate with the size of the Company and the nature of
The non-conventional wind power generation in the year was business.
44,66,638 KWH against 40,31,005 KWH in the previous year. The The system of internal control of the Company is adequate
company added 1 WTG (1.25 M.W) at Vill. Kadoli, Kutehh, Gujarat, keeping in mind the size and complexity of your Company's
during the previous year which had increased the installed capacity business. Systems are regularly reviewed to ensure
of power unit to 4.975 M.W. effectiveness.
Management Discussion and Analysis Report (f) Financial performance with respect to operational performance
(a) Industry Structure and Developments is discussed in the main part of the Report.
Sanitaryware industry in India has evolved over the past 50 (g) Material Developments in Human Resources / Industrial
years. Today, only three major Indian manufacturers are in the Relations
organized sector. Foreign players have been eyeing India as a The Company continues to invest in training and education of
major opportunity. Some companies are already setting up their its employees and has been organizing various training
manufacturing bases in India. Apart from Indian companies and programme from time to time.
those foreign companies manufacturing or importing and selling
The Company emphasizes training and motivation as it is the
Sanitaryware in India, there is a third category in the industry—
key to improved productivity. Intensive Induction program of
those innumerable units which manufacture low value, low quality
new recruits and skill based training programs are being carried
Sanitaryware. Collectively, all three segments, put together
out. HR policies are being aligned with the current trends in the
• constitutes less than Rs. 1,000 crores.
market. Various welfare activities and incentives are being
Your company is also planning a major foray into taps, another carried out for staff and workers alike, making CERA an
major product category in the bathroom solutions. The test enjoyable place to be associated with. Cera maintains cordial
marketing done, through outsourced products, has shown relations with labours.
11
Annual Report 2007-2008
(h) Preferential Allotment
During the year company allotted 1,10,000 equity shares to
promoters in pursuance to 6,00,000 preferential warrants
granted to them. These proceeds have been utilized towards
expansion programme and long term working capital of the
Company. Additional 10,00,000 warrants to issue an equity
share at Rs.162/- per share to the promoters on preferential
basis have not been subscribed by them.
(i) Employees Stock Option Scheme
Pursuant to the authority of the members granted at the Extra
- Ordinary General Meeting of your Company held on 6th
January, 2007, the company has framed the Employees Stock
Option scheme 2007 (ESOS - 2007). Accordingly, 15000
options were granted to the eligible employees during the year
under review. During the year 70,631 options were vested with
the eligible employees, but no option is exercised and hence,
no shares are issued under the scheme.
Details required to be provided pursuant to clause 12 of the
Securities and Exchange Board of India (Employees Stock
Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999 are set out in Annexure to this Report.
Corporate Governance
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, Report on Corporate Governance along with the Auditors'
statement on its compliance has been included in this Annual Report
as a separate section.
Directors' Responsibility Statement
In compliance of Section 217 (2AA) of the Companies Act, 1956, the
Directors of your Company confirm:
•> that the applicable accounting standards have been followed in
the preparation of final accounts and that there are no material
departures;
<• that such accounting policies have been selected and applied
consistently, and such judgements and estimates made are
reasonable and prudent so as to give a true and fair view of the
state of affairs of the Company as at March 31, 2008, and of
the profit of the Company for the year ended on that date;
* that proper and sufficient care has been taken for the
maintenance of adequate accounting records in accordance
with the provisions of the Companies Act, 1956 for safeguarding
the assets of the Company and for preventing and detecting
fraud and other irregularities;
* that the annual accounts have been prepared on a going
concern basis.
Dividend
Your Directors recommend a dividend of 30% (Rs. 1.50 per share)
(previous year Rs.1.10) on 61,85,014 (Previous year 60,75,014)
Equity Shares of Rs.5/- each fully paid for the year ended 31.03.2008,
to be paid subject to approval by the members at the ensuing Annual
General Meeting.
Energy Conservation, Technology Absorption, R & D Cell and
Foreign Exchange Earnings & Outgo
The details required under the Companies (Disclosure of particulars
in the Report of Board of Directors) Rules, 1988 are annexed to this
report.
Exchequer
The Company has contributed Rs.21.39 Crores to the exchequer
by way of excise duty, customs duty, income tax, VAT, sales tax,
and other fiscal levies.
Fixed Deposit
Fixed deposits from the Public, outstanding as on 31.03.2008 was
Rs.54.68 lacs. There were 14 Fixed Deposit holders with Rs 3.55
12
Lacs of unclaimed / unrenewed deposits as on 31.03.2008. The
Company, on the basis of the working results during the year under
review can accept deposits from the Public as well as from the
shareholders to the extent of Rs. 2058.58 lacs.
Finance '
During the year under review, the Company repaid loans of Rs.315.62
Lacs to Financial Institutions and the Government of Gujarat.
Employees
Information as per sub-section (2A) of Section 217 of the Companies
Act, 1956 read with the Companies (Particulars of Employees) Rules,
1975 forming part of the Directors' Report for the year ended 31s1
March, 2008 is annexed.
Directors
Shri O. P. Bhandari and Shri D. P. Goyal have resigned as Directors
w.e.f. 31/10/2007 and 24/05/2008 respectively. Your Board of
Directors placed on record its appreciation for the contribution made
by them to the company. . ..
Dr. Abraham Koshy and Dr. K. N. Maiti have been appointed as
additional Directors w.e.f 31/10/2007 and 24/05/2008 respectively.
Shri Vikram Somany has been re-appointed as Chairman-cum-
Managing Director for a period of 3 years w.e.f. 13.08.2008, subject
to approval of members.
Shri S.K. Nema has been appointed as additional Director and Whole
Time Director for a period of 3 years w.e.f. 1.07.2008, subject to
approval of members. ' '
Shri Vidush Somany has been re-appointed as Executive Director
w.e'.f. 1.07.2008 with modified terms & conditions, subject to approval
of members. '•
Shri Sajan Kumar Pasari and Shri S. N. Mohata are due to retire by
rotation'at the end of ensuing Annual General Meeting and being
eligible offered themselves for reappointment.
Brief resumes of directors proposed to be appointed / re-appointed
as required under clause 49 of the Listing Agreement executed with
the Stock Exchanges is provided in the notice convening the Annual
General Meeting of the Company.
Auditors
M/s H.V. Vasa & Co., Statutory Auditors of the company retire at the
end of forthcoming Annual General Meeting and being eligible, offer
themselves for re-appointment. The Board recommends their
re-appointment at the ensuing Annual General Meeting.
Insurance
The Company has adequately insured all its properties including
Plant and Machinery, Buildings and Stocks.
Industrial Relations • .
The Company's relations with its employees remained cordial
throughout the year. The-directors wish to place on record their
deep appreciation for the services rendered by workers, staff
members and executives of the Company.
The Company has taken adequate steps for the health and safety of
its employees, as required under the Gujarat Factories Rules, 1963.
Appreciation . •
Your Directors thank the Financial Institutions and Bankers for
extending timely assistance in meeting the financial requirements of
the Company .'They would also like to place on record their'gratitude
for the co-operation and assistance given by State Bank of Saurashtra,
ICICI Bank Limited, and various departments of both State and Central
Governments.
. For and on behalf of the Board of Directors,
Ahmedabad - • . •. Vikram Somany
24th May, 2008 Chairman-curn-Managing Director
 Cera Sanitaryware Limited
Annexure to the Directors' Report
Information to be disclosed under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999.
(a)- Options Granted 2,26,878
(b) The Pricing Formula The Second tranche of the stock options granted during the year
under review were priced at Rs. 61/- per share excluding FBT.
(c) Options Vested 70,631
(d) Options Exercised Nil
(e) The total number of shares arising as a result of exercise 2,68,000 equity shares of Rs. 51- each will arise on exercise of options
of options
(f) Options lapsed 12,123
(9) Variation of terms of options Nil
(h) Money realized by exercise of options Nil
(i) Total number of options in force 2,26,878
(i) Employee wise details of options granted to :
I) Senior managerial personnel As per statement attached
ii) Any other employee who received a grant in any Shri S. K. Nema- 15,000 options.
one year of options amounting to 5% or more of
options granted during that year,
iii) Identified employees who were granted options, Nil
during any one year, equal to or exceeding 1%
of the issued capital (excluding outstanding
warrants and conversions) of the Company at the
time of grant.
(k) Diluted Earning Per Share (EPS) pursuant to issue of Rs. 16.06
shares on exercise of option calculated in accordance
with Accounting Standard (AS) 20 "Earnings Per Share"
(I) Where the Company has calculated the employee The Company has calculated the employee compensation cost using
compensation cost using the intrinsic value of the stock the intrinsic value of stock options. Had the fair value method been
options, the difference between the employee used, in respect of stock options granted, the employee compensation
compensation cost so computed and the employee cost would have been lower by Rs. 122.31 (Rs. 106.51) lacs, Profit
compensation cost that shall have been recognized if it after tax higher by Rs. 80.73 (Rs. 70.65) Lacs and the basic and
had used the fair value of the options. The impact of this diluted earning per share would have been higher by Rs. 1 .31 (Rs.
difference on profits and on EPS of the company. 1.30) and Rs.1.29 (Rs. 1.29) respectively.
(m) Weighted - average exercise prices and weighted - Not Applicable
average fair values of options shall be disclosed separately
for options whose exercise price either equals or exceeds
or is less than the market price of the stock.
(n) A description of the method and significant assumptions Black-Scholes Model
used during the year to estimate the fair values of options,
including the following weighted-average information:
i) risk free interest rate 8%
ii) expected life 24 Months
iii) expected Volatility 32%
iv) expected dividend 18%
v) The price of the underlying share in market at the Rs. 140.80 &Rs. 190.05
time of option grant
Statement attached to Annexure to the Directors' Report for the year ended on 31st March, 2008.
Name of senior Managerial Persons to whom Stock Options have been granted Number of option granted
Shri S. K. Nema 15000
Shri S. C. Kothari 15000
Shri M K. Bhandari 10815
Shri S. K. Ghatak 10185
Shri Atul Sanghvi 10500
Shri Parthiv Dave 8325
Shri P K Shashidharan 8550
Shri Rajesh B Shah 6675
Shri Narendra N Patel 6675
Shri V K Jain 7500
13
Annual Report 2007-2008 __ .
Annexure to the Directors' Report
Disclosure of particulars with respect to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo as required
under the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Report of the Board of
Directors for the year ended 31st March, 2008.
A. Energy Conservation
Form - A : Not Applicable
B. Technology Absorption
Form B
Research and Development (R & D)
1. Specific areas in which R & D is carried out The Company's Research & Development Unit is recognized by the
Department of Scientific and Industrial Research, Government of India,
since 1993. It has been constantly working for improvement in quality of
products to keep company ahead in market competition.
R & D Centre was successful in the following areas :-
•:• Development of new white glaze for wide market acceptance.
•:• Improved quality of colour glazes for more stability during refiring process.
•> Import substitution for some glaze raw materials and pigments.
* Better method for reprocessing final products to reduce refiring cost.
* Hired Scientist and Ceramist for developing new Body and Glaze to
meet International Standard and to reduce cost.
2. Benefit derived as a result With the introduction of hew sources and import substitution of raw materials,
colours, the quality of sanitarywares have improved and dependence on
imported material has reduced.
3. Future plan of action To minimize imports by developing substitution in India for better inventory
management and cost reduction. To develop glazes for matching quality of
reputed International brands.
4. Expenditure on R & D
a) Capital Rs. 3.83 Lacs
b) Recurring Rs. 55.15 Lacs
c) Total Rs. 58.98 Lacs
d) Total R & D Expenditure as a
percentage of total turnover 0.46%
Technology Absorption, Adaptation & Innovation Nil
C. Foreign Exchange earnings and outgo
The Company has continued to maintain focus and avail of export opportunities based on economic considerations. During the year the
Company has earned and used foreign exchange as under:
Total foreign exchange use,d : Rs.1501.15 Lacs
Total foreign exchange earned : Rs. 279.12 Lacs

14
 Cera Sanitaryware Limited

Annexure to the Directors' Report

Information as per Section 217(2A) read with the Companies (Particulars of Employees) Rules, 1975 and forming part of the Directors' Report
for the year ended 31st March, 2008.
A. Names of Employees employed through out the year and were in receipt of remuneration of not less than Rs.24,00,000/-
during the year:
Sr. Name & Age Designation/ Remuneration Qualifications & Date of Last Employment,
No. (Years) Nature of Duties (Rs.) Experience(Years) commencement Name of employer,
of Post held and
employment period (Years)
0) (2) (3) (4) (5) (6) (7)
1 Shri Vikram Somany Chairman-cum- Rs.44,74,668 B.Sc., FCMI (U.K.) 13.08.2002 Madhusudan Industries
(58 years) Managing Director (34 years) Limited
Chairman-cum-
Managing Director
(1 year)
2 Shri Subhash Chandra Whole time Rs.31, 16,523 B.com.LLB.FCA 01.06.1985 CCDC Construction
Kothari (63 years) Director (39 years) Pvt. Ltd. (1 year)

B. Names of Employees employed for part of the year and were in receipt of remuneration of not less than Rs.2,00,000/- per month:
Sr. Name & Age Designation/ Remuneration Qualifications & Date of Last Employment,
No. (Years) Nature of Duties (Rs.) Experience(Years) commencement Name of employer,
of Post held and
employment period (Years)

(1) (2) - (3) (4) (5) (6) (7)

1 Shri Santoshkumar Chief Operating Rs.39,47,013 B.E (Mech.), 24.05.2007 Samsons Group of
Nema (49 years) Officer PGDM (IIM-A) Companies —
(25 years) Group President Marketing
( 4 years )

Notes :
1. Gross remuneration as above includes Salary, Company's contribution to Provident Fund, Gratuity, Leave Encashment, Leave Travel
Reimbursement, Medical Expenses Reimbursement, House Rent Allowance, Housing Accommodation and Monetary value of perquisites
calculated in accordance with the provisions of Income Tax Act, 1961 and Rules made thereunder.
2. Shri Vikram Somany is father of Shri Vidush Somany, Executive Director of the Company.

15
Annual Report 2007-2008
Annexure to the Directors' Report . Goyal, and Dr. Abraham Koshy. Shri Vikram Somany CMD of
the Company is also a member of Committee. During the year,
CORPORATE GOVERNANCE REPORT four Audit Committee Meetings were held on 15.05.2007,
(As required by Clause 49 of the Listing Agreement of the 24.07.2007,31.10.2007 and 18.01.2008.
Stock Exchanges) Terms of reference:
1) Company's Philosophy The role and terms of reference of the Audit Committee cover the
The Company believes in the practice of good Corporate matters specified for Audit Committees under Clause 49 of Listing
Governance and acting as a good corporate citizen. Agreement and Section 292A of the Companies Act, 1956.
The spirit of Corporate Governance has been prevailing in the 4) Remuneration Committee
Company. The Company believes in the values of transparency, The Remuneration Committee, consists of Three independent
professionalism and accountability. The Company recognizes directors namely, Shri Shree Narayan Mohata - Chairman, Shri
the accountability of the Board and importance of its decisions D. P. Goyal and Dr. Abraham Koshy.
on its customers, dealers, employees, shareholders, and with The Committee fixes the Remuneration of Whole Time Directors,
every individual, who comes in contact with the Company. which include all elements of remuneration package i.e. salary,
2) Board of Directors benefits, bonus, pension, retirement scheme, stock options and
The Board comprises of a Chairman-cum-Managing Director, such other benefits.
a Executive Director, a Whole Time Director and four non- The Committee also decides the fixed component and
executive directors. performance linked incentives, performance criteria, service
contracts, notice period, severance fees etc. of the remuneration
The Company did not have any pecuniary relationship or.
package of working directors, as may be necessary. During
transactions with the non-executive directors during the period
the year under review, one meeting was held on 16.05.2007.
under review.
5) Remuneration Policy
During the year, seven Board Meetings were held on 16.05.2007,
25.07.2007, 23.08.2007, 31.10.2007, 22.12.2007, 18.01.2008 Remuneration of employees largely consists of basic
and 23.02.2008. remuneration and perquisites.
None of the directors on the Board are members in more than The component of the total remuneration varies for different
ten committees and they do not act as Chairmen of more than grades and is governed by Industry pattern, qualifications and
five committees across all companies in which they are directors. experience of the employee, responsibilities handled by him
and his individual performance, etc.
The composition of Directors and their attendance at the Board
meetings during the year and at the last Annual General Meeting The objectives of the remuneration policy are to motivate
as also number of other directorships and Committee employees to excel in their performance, recognize their
Memberships are given below: contribution and to retain talent in the organization and accord
ST. Nameof Category of No.ot Atten- No. of No. of
merit.
No. Director Directorship Board dance. Oher OHier Employees Stock Option Scheme (ESOS)
Meetings At last director- Committee
attended AGM ships Memberships The company has introduced Employees Stock Option Scheme
(ESOS 2007) for the employees of the Company.
1. Shri Vikram Somany Chairman-cum-
Managing Director 7 NO 2 — 6) Details of remuneration for the year ended 31.03.2008
2. Shri Vidush Somany Executive Director 7 NO — — (i) Managing Director / Wholetime Directors
3. Shri S. C. Kothari Sr. Whole Time Director 4 YES 1 —
4. Shri D. P. Goya! ' Non-Executive Director 4 NO — — Name Salary (Rs.) Perquisites
5. Dr. Abraham Koshy+ Non-Executive Director 1 NO — — and Retirement
6. ShriO.P.Bhandari" Non-Executive Director — NO 1 — benefits (Rs.)
7. Shri Sajan Kumar Pasari Non-Executive Director 4 NO' 11 — Shri Vikram Somany 38,64,0007- 6,10,668/-
8. Shri Shree Narayan Mohata Non-Executive Director 4 NO 2 — Chairman-cum-
9. Dr. K. N. Maiti ++ Non-Executive Director — - 1 - Managing Director
+ appointed w.e.f. 31.10.2007. , Shri Vidush Somany 15,24,000/- 5,12,256/-
++ appointed w.e.f. 24.05.2008. Executive Director
* resigned w.e.f. 24.05.2008.
" resigned w.e.f. 31.10.2007. Shri S. C. Kothari 22,42,800/- 8,73,723/-
Whole Time Director
Code of Conduct
The Company has finalized model code of conduct for the Board The Company has entered into contract with the above
members and senior Officers of the Company. The code of directors. Their appointments are for a period of 3 years.
conduct has been posted on the website of the Company The Whole Time Directors, except Chairman-cum-
www.cera-india.com Managing Director and Executive Director may resign from
the services of the Company by giving three months notice
CEO/CFO certification in advance. Similarly, the Company has the right to terminate
As per the revised clause 49 of listing agreement entered with the services of Whole Time Director at any time by giving
the stock exchanges, a certificate from CEO/CFO has been three months notice in writing.
obtained.
The Whole Time Directors are also entitled to the benefits
Whistle Blower Policy as per the Rules of the Company which the other employees
The Company has not implemented a whistle-Blower policy. / executives of the Company are entitled to.
3) Audit Committee During the year, No Stock option was issued but 5,000
The Audit Committee, consists of 3 independent directors, options were vested to Shri S C Kothari, Whole Time
namely Shri Shree Narayan Mohata - Chairman, Shri D. P. Director of the Company and no equity shares have been
16
 Cera Sanitaryware Limited
issued to him under Employees Stock Option Scheme. 10) Shareholders' / Investors' Grievance Committee
ESOS does not form a part of contract with the Company. The Shareholders' / Investors' Grievance Committee, consists
The Whole Time Directors are not entitled to the sitting of three directors namely Shri S. C. Kothari - Chairman, Shri
fees for attending the Board Meetings. Vidush Somany and Shri D. P. Goyal.
(ii) Non-Executive Directors All investor complaints, which cannot be settled at the level of
Remuneration by way of sitting fees for attending Board / Company Secretary and Compliance Officer, are forwarded to
Committee Meetings have been paid to the non-executive the Shareholders' Grievance Committee for final settlement.
directors. No other remuneration by way of commission or During the year 2007-08, the Company had received 154
otherwise was paid to them during the year. The details of complaints / queries from the Shareholders.
remuneration paid to them during the year are as under:
All the complaints received from the Shareholders were
Name Sitting Fees resolved. There is no complaint pending as of 31.03.2008, which
Paid (Rs.) is not attended / replied by the Company.
Shri D. P. Goyal 8,000 The Company confirms that there were no share transfers
Dr. Abraham Koshy* 2,000 lying pending as on date which were received upto 31.03.2008
Shri O. P. Bhandari" and all requests for dematerialisation and rematerialisation of
Shri Sajan Kumar Pasari 8,000 shares as on that date were confirmed / rejected Into the NSDL/
Shri Shree Narayan Mohata 8,000 CDSL system.
Total 26,000 During the year, one meeting was held on 16.05.2007.
* appointed w.e.f. 31.10.2007 11) General Body Meetings
** resigned w.e.f. 31.10.2007.
The last three Annual General Meetings were held as under:
(Mi) Shareholding of Non-Executive Directors
Name No. of % of toteiT Financial Date Time Venue
Shares held shareholding Year ended

Shri Sajan Kumar Pasari 1 ,28,570 2.08 31.03.2007 26.09.2007 11.30 a. m. 9, GIDC Industrial Estate
Dr. Abraham Koshy* Nil Nil Kadi-382 715,
Shri O. P. Bhandari** 100 0.00 Dist. Mehsana.
Shri Shree Narayan Mohata 50 0.00 31.03.2006 30.06.2006 11.30 a. m. 9, GIDC Industrial Estate
Shri D. P. Goyal 2 0.00 Kadi-382 715,
* appointed w.e.f. 31.10.2007 Dist. Mehsana.
** resigned w.e.f. 31.10.2007. 31.03.2005 01.09.2005 11.30a.m. 9, GIDC Industrial Estate
7) Compensation Committee Kadi-382 715,
Board of Directors has formed compensation committee for Dist. Mehsana.
formulation and administration of Employees Stock Option 12) Disclosures
Scheme. The Compensation Committee consists of three 1. There were no transactions of material nature with the
directors, Shri Shree Narayan Mohata - Chairman, Shri D. P. directors or the management or their subsidiaries or
Goyal and Shri S. C. Kothari. During the year under review, one relatives etc. during the year, which could have potential
meeting was held on 10.01.2008. conflict with the interests of the Company at large.
8) Preferential Issue Committee
2. There were no instances of non-compliance of any matter
Members of the Company at their Extra - Ordinary General related to the capital market, during the last three years.
Meeting held on 06.01.2007 have decided to issue and allot
13) Means of Communication
6,00,000 warrants / Equity shares to the promoters group on
preferential basis. For the administrative convenience, Board . 1. Quarterly results are published in leading daily newspapers
of Directors has formed Preferential Issue Committee for issue viz. Financial Express / Economic Times / Indian Express
and allotment of aforesaid equity shares of the company. and a local language newspaper viz. Jai Hind/ Loksatta /
Preferential Issue Committee consist of five directors Shri Vikram Economic Times / Financial Express. The annual results
Somany - Chairman, Shri Vidush Somany, Shri Sajan Kumar (annual reports) are posted to all the members of the
Pasari, Shri D. P. Goyal and Shri S. C. Kothari. During the year Company.
under review, no committee meeting was held. 2. Management Discussion & Analysis forms part of this
9) Share Transfer Committee annual report, which is also being posted to all the members
In accordance with the Listing Agreement of the Stock of the Company.
Exchanges, the Board had delegated the powers of share 3. The official news releases, if any, are given directly to the
transfers to the Share Transfer Committee. In order to expedite press.
the process of share transfers / transmissions/ splits /
consolidation, the Committee meets at least once in a fortnight. 4. The Company uploads its financial results, Shareholding
pattern and other information on the EDIFAR website
The Share transfer committee, consists of three directors maintained by National Informatics Center (NIC), which
namely Shri S. C. Kothari - Chairman, Shri Vidush Somany and can be accessed through the website, of the Securities and
Shri D.P. Goyal. Exchange Board of India (SEBI): http:/www.sebi.gov.in.
Share Transfer Agent This information is also made available by the Bombay
The Company has appointed M/s. MCS Limited, Ahrnedabad, a Stock Exchange Limited, Mumbai on website http://
SEBI registered Share Transfer Agent as Registrar and Share www.bseindia.com and by National Stock Exchange of
Transfer Agent w.e.f. 01.03.2003. India Limited on website http://www.nseindia.com.
17
Annual Report 2007-2008,
14) General Shareholders' Information 7. Share Transfer
1. Annual General Meeting : Entire Share Transfer work and dematerialisation /.
Date and Time : 12th September, 2008 :11.30 a.m. rematerialisation work is assigned to R & T Agent, M/s.
Venue : 9, GIDC Industrial Estate, MCS Limited, Ahmedabad, a SEBI registered Share
Kadi - 382 715, Dist. Mehsana. Transfer Agent.- Request for Share transfer,
dematerialisation and rematerialisation should be sent
2. Financial Calendar 2008-09 (tentative) : directly to M/s. MCS Limited, 101, Shatdal Complex, 1st
Annual General Meeting 3rd / 4th week of September, Floor, Opp. Bata Show Room, Ashram Road, Ahmedabad-
2009 380 009. Shareholders have option to open their accounts
Results for quarter ending By last week of with either NSDL or CDSL as the Company has entered
June 30, 2008 July 2008 into agreements with both of these depositories.
September 30, 2008 October 2008 15) Share Transfer System
December 31, 2008 January 2009 The share transfer/s is normally effected within a period of 15-20
Results for year ending 3rd / 4th week of June 2009 days from the date of receipt, provided the documents being
March 31, 2009 (Audited) complete in all respects. The Company has formed Share
Transfer Committee of directors, which meets atleast once in a
3. Book Closure date 1.09.2008 to12.09.2008. fortnight for effecting transfer of shares and other related matters.
(both days inclusive)
16) Distribution of Shareholding as on 31.03.2008
4. Dividend payment by the Company: Nominal value No. of Total No.
Dividend for the year ended 31.03.2008 will be paid to of shares (Rs.) Shareholders of Shares
the members whose names will appear in the register 679182
Upto 5,000 5154
of members of the Company, on 12.09.2008 after giving
5,001-10,000 43 64555
effect to all valid transfer of shares in physical form
10,001-20,000 22 60877
lodged with the Company on or before 31.08.2008 at
20,001-30,000 08 39526
the end of business hours, and 35087
30,001-40,000 05
in respect of shares held in demat form, the members 40,001-50,000 03 30000
whose names appear on the statement of beneficial 50,001 -1,00,000 09 140990
ownership furnished by NSDL and CDSL at the end of 1,00,001 and above 29 5134797
business hours on 31.08.2008.
Total 5273 6185014
Dividend will be paid within 30 days from the date of
approval by the members at the Annual General Meeting. 17) Pattern of Shareholding as on 31.03.2008
Sr. Category No. of Shares
5. Listing on Stock Exchanges No.
The Company's shares are listed at Bombay Stock 1. NRI 554190 8.96
exchange Limited and National Stock Exchange of India 2. Financial Institutions/ Banks 2725 0.04
Limited. During the year, Company's shares have been 3. Mutual Funds 325 0.01
listed at National Stock Exchange of,India Limited w.e.f. 4. Promoters 3397980 54.94
02.11.2007. The company has paid listing fees for the year 5. Body Corporate 392955 6.35
2007-08 and 2008-09 to the Exchanges. 6. Others - 1836839 29.70
The shares of the Company are voluntarily delisted from Total 6185014 100.00
The Calcutta Stock Exchange Association Ltd. w.e.f. 18) Dematerialisation of Shares as on 31.03.2008
21.05.2008 under SEBI (Delisting of Securities) Guidelines, As on 31.03.2008, 71.47 % of the Company's total shares
2003. representing 44,20,574 Shares were held in dematerialized form
Stock CodeiTrading Symbol - Bombay Stock Exchange and the balance 28.53 % representing 17,64,440 shares were
Limited: 532443 CERASANITDM. in paper form.
TradingSymbol-NatJonalStockExchangeoflndialJmitediCERA. The ISIN Number in NSDL and CDSL is "INE 739E01017".
6. Share price at Bombay Stock Exchange Limited and 19) Plant Locations
National Stock Exchange of India Limited, Mumbai. The Company's plants are located at the following places:
1. 9, GIDC Industrial Estate, Kadi - 382 715, Dist. Mehsana,
Month BSE BSE NSE NSE
Gujarat.
High Low High Low
2. Wind Farms:
(Rs.) (Rs.) (Rs.) (Rs.)
1. Village Patelka & Lamba, Taluka Kalyanpur, District
April 2007 138.50 117.00 - - Jamnagar, Gujarat
May 2007 170.00 121.70 '- - 2. Village & Taluka Kalyanpur, District Jamnagar, Gujarat.
June 2007 153.75 138.75 - - 3. Vill. Kadoli, Tal. Abdasa, District Kutchh, Gujarat
July 2007 164.90 141.00 - -
20) Address for Correspondence
August 2007 145.00 ' 119.75 - - The Company's Registered Office is situated at 9, GIDC
September 2007 160.00 127.10 - - • Industrial Estate, Kadi-382715, District Mehsana, Gujarat.
October 2007 157.00 134.00 - -
Shareholders' correspondence should be addressed either to
November 2007 155.00 137.00 158.95 122.75 the Registered Office of the Company as stated above and / or
December 2007 210.00 125.00 210.00 116.10 to the Ahmedabad Office of the Company at "Madhusudan
January 2008 228.00 120.00 229.00 119.00 House", Opp. Navrangpura Telephone Exchange, Ahmedabad
February 2008 171.00 121.00 177.50 110.05 - 380 006 or to the Registrar and Share Transfer Agent, M/s.
March 2008 144.50 103.25 135.00 102.00 MCS Limited, 101, Shatdal Complex, 1st Floor, Opp. Bata Show
Room, Ashram Road, Ahmedabad-380009.
18
 Cera Sanitaryware Limited

AUDITOR'S CERTIFICATE

To,
The Members of Cera Sanitaryware Limited
We have examined the compliance of conditions of Corporate Governance by Cera Sanitaryware Limited, for the year ended 31st March 2008,
as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchange(s).
The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and
implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an
audit nor an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the
conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.
As required by the Guidance Note issued by the Institute of Chartered Accountants of India, we have to state that no investor grievances were
pending for a period of one month against the Company as per the records maintained by the Shareholders'/ Investors' Grievance Committee.
We further state that such compliance is neither an assurance as to the future viability of the company nor the efficiency or effectiveness with
which the management has conducted the affairs of the Company.

For and on Behalf of

H.V.Vasa&Co.
Chartered Accountants
Ahmedabad Tushar H. Vasa
24th May, 2008 ' - Proprietor
Membership No. 16831

19
Annual Report 2007-2008,
Auditors' Report to the Members
We have audited the attached Balance Sheet of CERA
SANITARYWARE LIMITED, as at 31st March, 2008 and also the
Profit and Loss Account and the Cash Flow Statement of the
Company for the year ended on that date annexed thereto. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan
and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
As required by the Companies (Auditor's Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the annexure
a statement on the matters specified in paragraphs 4 and 5 of the
said Order.
Further to our comments in the Annexure referred to in the paragraph
above, we report that:
(1) We have obtained all the information and explanations which,
to the best of our knowledge and belief, were necessary for
the purpose of our audit;
(2) In our opinion, proper books of accounts as required by law,
have been kept by the Company so far as appears from our
examination of those books;
(3) The Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report comply with the Accounting
Standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956;
(4) The Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the
books of accounts;
(5) As per the written representation made by the directors as on
31st March, 2008 and taken on record by the Board of Directors
and the information and explanations given to us, none of the
Directors is, as at 31st March, 2008, prima-facie disqualified
from being appointed as Director in terms of clause (g) of sub-
section (1) of Section 274 of the Companies Act, 1956;
(6) In our opinion and to the best of our information and according
to explanations given to us, the said accounts read with
significant accounting policies and other notes thereon in
Schedule 18, give the information required by the Companies
Act, 1956, in the manner so required and give a true and fair
view in conformity with the accounting principles generally
accepted in India:
(a) in so far as it relates to the Balance Sheet, of the state of
affairs of the Company as at March 31, 2008, and
(b) in so far as it relates to the Profit and Loss Account, of the
profit of the Company for the year ended on that date.
(c) in case of Cash Flow Statement, of the cash flows for
the year ended on that date.
For and on Behalf of
H. V. Vasa & Co.
Chartered Accountants
Tushar H. Vasa
Ahmedabad Proprietor
24th May, 2008 Membership No. 16831
20
Annexure to the Auditors.' Report
As required by the Companies (Auditors' Report) Order, 2003, issued
by the Central Government of India in terms of Section 227(4A) of
the Companies Act, 1956, we have annexed hereto a statement on
the matters specified in paragraphs 4 and 5 of the said Order.
1. In respect of its fixed assets:
a. The Company has maintained proper records, showing
full particulars including quantitative details and situation
of its fixed assets on the basis of available information,
other than furniture and fixtures.
b. As explained to us, the fixed assets have been physically
verified by the management during the year in a phased
periodical manner, which in our opinion is reasonable,
having regard to the size of the Company and the nature
of its assets. No material discrepancies between the
book records and the physical inventory have been
noticed in respect of the assets physically verified.
c. In our opinion, there was no substantial disposal of fixed
assets during the year, which would affect the going
concern of the company.
2. In respect of its inventories :
a. As explained to us, inventories have been physically
verified by the management at regular intervals during
the year.
b. In our opinion and according to the information and
explanations given to us, the procedures of physical
verification of inventories followed by the management
are reasonable and adequate in relation to the size of the
Company and the nature of its business.
c. The Company has maintained proper records of
inventories. As explained to us, there were no material
discrepancies noticed on physical verification of inventory
as compared to the book records.
3. In respect of loans, secured or unsecured, granted or taken
by the Company to / from companies, firms or other parties
covered in the register maintained under Section 301 of the
Companies Act, 1956:
a. The Company has not granted any loans, secured or
unsecured to companies, firms or other parties covered
in the register maintained under section 301 of the
Companies Act, 1956. As the company has not granted
any loans secured or unsecured, to parties listed in the
register maintained under Section 301 of the Companies
Act, 1956, paragraphs 4 (iii)(b), (c) and (d) of the Order
are not applicable.
b. The Company had taken unsecured loans aggregating
to Rs. 228 Lacs from three companies covered in the
register maintained under section 301 of the Act. The
maximum amount involved during the year was Rs. 408
Lacs and at the year end balance of loans taken from
such companies was Rs. 228 Lacs.
c. In our opinion and according to the information and
explanations given to us, the rate of interest and other
terms and conditions on which the loans have been taken
from companies listed in the register maintained under
section 301 of the Companies Act, 1956 are not, prima
facie, prejudicial to the interest of the Company.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems
commensurate with its size of the Company and the nature of

business for the purchase of inventory, fixed assets and also
for sale of goods and services. Further, on the basis of our
examination, and according to the information and explanations
given to us, we have neither came across nor have we been
informed of any instance of major weaknesses in the aforesaid
internal control systems.
5. In respect of transactions covered under Section 301 of the
Companies Act, 1956:
a. In our opinion and according to the information and
explanations given to us, the particulars of contracts or
arrangements referred to in Section 301 of the Companies
Act, 1956 have been entered into in the register
maintained under that section.
b. In our opinion and according to the inforrricition and
explanations given to us, there are no transactions in
pursuance of contacts or arrangements entered in the
register maintained under Section 301 of the Companies
Act, 1956 aggregating during the year to Rs. 5,00,000/-
(Rupees Five Lakhs Only) or more in respect of any
party in the said financial year.
6. In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of
Sections 58A, 58AA or any other relevant provisions of the
Companies Act, 1956 and Companies (Acceptance of
Deposits) Rules, 1975 with regard to the deposits accepted
from the public. According to the information and explanations
given to us, in this regard, no order under the aforesaid sections
has been passed by the Company Law Board, or National
Company Law Tribunal or Reserve Bank of India or any Court
or any other Tribunal on the company.
7. In our opinion, the internal audit system of the Company is
commensurate with its size and the nature of its business.'
8. According to the information and explanations given to us, the
Central Government has not prescribed the maintenance of
cost records under clause (d) of sub-section (1) of Section
209 of the Companies Act, 1956 in respect of goods
manufactured by.the Company.
9. In respect of statutory dues:
a. According to the records of the Company, undisputed
statutory dues including Provident Fund, Investor
Education and Protection Fund, Employees' State
Insurance, Income-Tax, Sales-tax, Wealth Tax, Service
Tax, Custom Duty, Excise Duty, Cess and other statutory
dues have been generally regularly deposited with the
appropriate authorities. According to the information and
explanations given to us, no undisputed amounts payable
in respect of the aforesaid dues were outstanding as a:t
31st March, 2008 for a period of more than six months
from the date of becoming payable.
b. According to the information and explanations given to
us and the records of the company examined by us, the
particulars of duties, tax, excise duty, service tax, and
income-tax as at 31SI March, 2008 which have not been
deposited on account of dispute pending are as under:
Name of Nature of Amount Period to Forum where
the Statute disputed Rs in lacs which it dispute is
dues relates pending
Income-tax Additions 19.72 2004-2005 First
Act, 1961 made to Appellate
income Authority
disallowing
expenses
.and claims
21
Cera Sanitaryware Limited
10. The Company does not have accumulated losses as at 31st
March, 2008 and has not incurred any cash losses during the
financial year covered by our audit or in the immediately
preceding financial year.
11. As per the books and records maintained by the company
and according to the information and explanations, given to
us, we are of the opinion that the Company has not defaulted
in repayment of dues to bank.
12. In our opinion and according to the information and explanations
given to us, no loans and advances have been granted by the
Company on the basis of security by way of pledge of shares,
debentures and other investments.
13. In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund/ society. Therefore, clause 4(xii) of the
Companies (Auditor's Report) Order, 2003 is not applicable to
the Company.
14. In our opinion and according to the information and explanations
given to us, the Company has not dealt in or is trading in
shares, securities, debentures and other investments. The
company has invested surplus funds in marketable securities
and mutual funds. According to the information and explanations
given to us, proper records have been maintained of the
transactions and contracts and timely entries have been made
therein. The investments in marketable securities and mutual
funds have been held by the company in its own name.
15. According to the information and explanations given to us, the
Company has not given guarantee for loans taken by others
from banks.
16. In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purpose
for which they were raised.
17. According to the cash flow statement and other records
examined by us and the information and explanations given to
us, on an overall examination of the Balance Sheet of the
Company, we report that no funds raised on short term basis
have been used for long term investment (fixed assets, etc.).
18. The Company had made a preferential allotment of 6,00,000
share Warrants with a right to subscribe equal number of
shares as per the terms of resolution approved by company;
out of which during the year 1,10,000 Equity Shares have
been issued to a director and a company covered in the
Register maintained under Section 301 of the Companies Act,
1956. The allotment and pricing of these warrants is made in
accordance with the SEBI guidelines and the price at which
the Equity Shares are issued are not prima facie, prejudicial to
the interest of the Company.
19. As the Company has not issued any debentures, paragraph
(xix) of the order is not applicable to the company.
20. The Company has not raised any money by way of public
issue during the year.
21. In our opinion and according to the information and explanations
given to us, no fraud on or by the Company has been noticed
or reported during the year, that causes the financial statements
to be materially misstated.
For and on Behalf of
H. V. Vasa & Co.
Chartered Accountants
Tushar H. Vasa
Ahmedabad Proprietor
24th May, 2008 Membership No. 16831
 Balance Sheet as at 31st March, 2008
31-3-2008 31 -3-2007
Schedule Rs. Rs, Rs. Rs.
1. Sources of Funds
1. Shareholders' Funds
(a) Share Capital 1 3,51,07,070 3,59,10,070
(b) Reserves & Surplus 2 55,30,59,069 44,12,32,464
58,81,66,139 47,71 ,42,534
2. Loan Funds :
(a) Secured Loans 3 31,62,49,126 24,41,56,623
(b) Unsecured Loans 4 7,47,31,288 5,12,28,472
39,09,80,414 29,53,85,095
3. Deferred Tax Liability (Net) 12,26,75,220 9,09,84,794
Total 1,10,18,21,773 86,35,12,423
.-
II. Application of Funds
1. Fixed Assets : 5
(a) Gross Block 94,19,91,885 63,33,19,261
(b) Less : Depreciation 18,64,44,578 13,88,62,235
(c) Net Block 75,55,47,307 49,44,57,026
(d) Capital Work-in-progress 89,20,602 10,01,46,721
76,44,67,909 59,46,03,747
2. Investments 6 13,250 13,250
3. Current Assets, Loans & Advances
(a) Inventories 7 26,60,12,627 20,34,25,981
(b) Sundry Debtors 8 25,70,39,022 22,36,34,239
(c) Cash & Bank Balances 9 10,72,90,272 10,69,26,700
(d) Other Current Assets :
Interest accrued on deposits 61,53,642 3,38,836
(e) Loans & Advances 10 7,62,94,379 9,34,66,849
71,27,89,942 62,77,92,605
Less : Current Liabilities & Provisions
(a) Liabilities 11 31,18,62,263 28,62,44,899
(b) Provisions 12 6,46,65,811 7,39,56,373
37,65,28,074 36,02,01,272
33,62,61,868 26,75,91,333
4. Miscellaneous Expenditure 10,78,746 13,04,093
(To the extent not written off or adjusted)
Total 1,10,18,21,773 86,35,12,423
Notes forming part of the Accounts 18

As per our report of even date attached

For and on behalf of
H. V. Vasa & Co.
Vikram Somany Chairman-cum-Managing Director
Chartered Accountants
Tushar H. Vasa Rajesh B Shah .c Fo
Proprietor . ., _ ^ . Vidush Somany Executive Director
Membership No. 16831 Narendra N. Patel
G.M. & Company Secretary D. P. Goyal Director
Ahmedabad Ahmedabad
24th May, 2008 24th May, 2008 S. C. Kothari Sr. Whole time Director
22
 Profit and Loss Account: for the year ended 31st March, 2008
2007-08 2006-07
Schedule Rs. Rs. Rs. Rs.
Income
Sales 1,39,36,45,345 1,16,70,79,106
Less : Excise Duty 11,31,42,124 10,04,04,481
Net Sales 1,28,05,03,221 1,06,66,74,625
Other Income 13 " 2,37,08,470 89,86,962
1,30,42,11,691 1,07,56,61,587
Increase (Decrease) in Finished Goods and Work-in-process 14 4,56,07,336 2,96,76,278
1,34,98,19,027 1,10,53,37,865
Expenditure
Raw materials consumed 15 13,08,96,839 11,14,63,745
Purchases 38,31,79,546 31,70,25,216
Payments to and provision for Employees 16 20,14,96,183 15,15,84,444
Other Expenses 17 39,77,29,843 32,72,56,689
Interest :
on Term Loans 1,47,75,096 96,43,864
on Others 1,69,45,723 1,31,20,471
3,17,20,819 2,27,64,335
Depreciation 4,94,13,779 3,54,10,050
Total Expenditure 1,19,44,37,009 96,55,04,479
Profit before taxation 15,53,82,018 13,98,33,386
Provision for taxation
Current Tax 2,15,50,000 3,90,11,859
Deferred Tax 3,16,90,426 82,05,945
Fringe Benefit Tax 16,51,000 19,50,000
Profit after Taxation 10,04,90,592 9,06,65,582
Add : Surplus brought forward from previous year 5,00,00,000 4,00,00,000
Profit Available for Appropriations 15,04,90,592 13,06,65,582
Appropriations
Proposed Dividend 92,77,521 66,82,515
Tax on Proposed Dividend 15,76,715 11,35,694
Transferred to General Reserve 7,96,36,356 7,28,47,373
Balance Carried to Balance Sheet 6,00,00,000 5,00,00,000
15,04,90,592 13,06,65,582
Notes forming part of the Accounts 18
No. of Equity Shares (Face Value Rs. 5/- each) - Basic 61,41,735 54,08,987
Basic earning per share (in Rs.) 16.36 16.76
No. of Equity Shares (Face Value Rs. 5/- each) - Diluted 62,56,273 54,53,281
Diluted earning per share (in Rs.) 16.06 16.63

As per our report of even date attached

For and on behalf of
H.V.Vasa&Co.
Chartered Accountants Vita-am Somany Chairman-cum-Managing Director
Tushar H. Vasa Rajesh B shflh .c FQ
Proprietor Vldush Somany Executive Director
Membership No. 16831 Narendra N. Patel
G.M. & Company Secretary D. P. Goyal Director
Ahmedabad Ahmedabad
24th May, 2008 24th May, 2008 S. C. Kothari Sr. Whole time Director
23
 Schedules 1 to 18 Annexed to And Forming Part of The Accounts As At 31st March, 2008
31-3-2008 31-3-2007
Rs. Rs. Rs. Rs.
Share Capital
Authorised
2,00,00,000 (2,00,00,000) Equity shares of Rs. 51- each 10,00,00,000 10,00,00,000
Total 10,00,00,000 10,00,00,000
Issued, Subscribed & Paid Up
61 ,85,01 4 (60,75,01 4) Equity shares of Rs. 5/- each 3,09,25^070 3,03,75,070
Of the above
53,75,000 Equity Shares allotted as fully paid
pursuant to the scheme of arrangement.
Of the above
2,60,000 (1 ,50,000) Equity Shares allotted as fully paid
to Promotors on Preferential basis.
3,09,25,070 3,03,75,070
3,40,000 (4,50,000) Preferential Warrants to subscribe Equity Shares 41,82,000 55,35,000
@ Rs. 123/- per share. Rs. 12.30 per each warrant
paid up. (See note no. 5 of Schedule 1 8)
Total 3,51,07,070 3,59,10,070
Reserves and Surplus
General Reserve
As per last Balance Sheet 28,86,01 ,920 21,57,54,547
Add : Transferred from Profit and Loss Account 7,96,36,356 7,28,47,373
36,82,38,276 28,86,01 ,920
Share Premium Account
As per last Balance Sheet 10,02,00,000
Received/Transferred during the year 1,29,80,000 10,02;00,000
11,31,80,000 10,02,00,000
Employee Stock Options Outstanding
As per last Balance Sheet 1,78,75,280
Addition during the year 1 9,35,750 1 ,78,75,280
Deletion durinq the year (9,67,416)
1,88,43,614 1,78,75,280
Less : Deferred Employee Compensation Cost 72,02,821 1,54,44,736
(Refer Note No. 6 of Schedule-1 8) 1,16,40,793 24,30,544
Profit and Loss Account 6,00,00,000 5,00,00,000
Total 55,30,59,069 44,12,32,464
3. Secured Loans
From Banks
Cash /Packing Credit (see note 1) 9,64,90,649 7,89,58,146
Term Loans (see note 2) 21 ,97,58,477 16,51,98,477
31,62,49,126 24,41 ,56,623
Total 31,62,49,126 24,41 ,56,623
Notes :
1. Credit facilities from Banks are secured by hypothecation of Goods, Book Debts, all movable assets and Second Charge by way
of mortgage of Fixed Assets of the Company and guarantee of a Director.
2. Term Loans by Banks are secured by mortgage of Fixed Assets situated at 9, GIDC Industrial Estate, Kadi and Residential Colony,
Kadi and hypothecation of its movable assets.

Unsecured Loans
Fixed Deposits 54,68,000 1,31,24,000
Interest Accrued and Due ' 1,43,734 1,64,633
56,11,734 1,32,88,633
Inter Corporate Loans 2,28,00,000 2,10,00,000
Short Term Loans from Bank 4,00,00,000
Other Loans & Advances
1. From Banks - Finance Lease - Vehicles 22,31 ,605 34,90,136
(Secured by lien on vehicles acquired on finance lease)
2. Interest Free Loan (Sales-tax) from Govt, of Gujarat 40,87,949 1,34,49,703
63,19,554 1,69,39,839
Total 7,47,31,288 5,12,28,472
24
 Cera Sanitaryware Limited
5. Fixed Assets

Gross Block Depreciation Net Block

Sr. Nameof Assets Asat Adcflions Deducfare/ As at Asat Forthe Deductions/ Asat As on Ason
Not 142007 Acfustments 31-3-2008 31-3-2007 Seer Adjustments 31-3-2008 31-3-2008 31-3-2007

1. Land s
-Freehold 3633,677 1000000 50,000 45,83,677 - - 45,83,677 3633,677

-Leasehold 7,05384 9370 6,95,514 - - - 6,95,514 7,05384

2 Buildings 12,81,20,278 4,41,68,437 17,22,88,715 23539,559 98,44,489 - 3,34,34,048 13,88,54,667 10,45,30,719

a Plant SMachineiy 45,95,17,778 2427,68,175 70,22,85,953 9,93,45204 3,09,48,051 - 13,02,93,255 57,19,92,698 35,01,72,574

4. ElectncPlant&lnstallation 62,82,182 44,77504 1,07,59,686 9,66,948 336393 - 13,53,841 94,05,845 53,15234

a Laboiatoiy Equipments 1380 - 1,380 871 78 - 949 431 509

a WegirgMadTineiy 1,43,723 24,470 1,68,193 62391 13,391 - 76,282 91,911 80332

7. FutniluiB,Fixli 1 2,49,74383 1,13,49310 9,34,793 3,53,89,400 1,14,42,187 5126,175 6,48,785 1,59,19,577 1,94,69,823 135,32,696

a Vehicles 9939,976 81,46,416 22,67,025 1,58,19,367 3454575 30,94,702 1132,651 53,66,626 1,04,52,741 64,85,401

Total 6333,19,261 31,1934,312 32,61,688 94,19,91,885 1338,62235 4,94,13,779 1831,436 18,64,44,578 75,55,47,307 49,4457,026

Previous Year 51,03,08534 ,12,67,42,084 37,31,357 63,33,19,261 10,44,48,107 354,10,050 9,95,922 13,88,62,235 49,44,57,026

31-3-2008 31-3-2007
Rs. Rs.
6. Investments (At Cost)
A. Government Securities : (Unquoted)
(Deposited with Government Departments)
National Savings Certificates 13,000 13,000
B. Non-trade other investments (Unquoted)
In fully paid Equity Shares of Rs. 50A each
5 (5) Shares of Shivalik Co.Op. Hsg. Soc. Ltd. 250 250

Total 13,250 13,250

Aggregate Book Value - Quoted
- Unquoted 13,250 13,250
Aggregate Market Value - Quoted '
During the year, the following current investments were
purchased and sold/redeemed
Units of SBI Debt Fund Series - 90 Days (May 07) Dividend (40,00,000 Units
purchased, 76,684 Units cumulated, 40,76,684 Units sold during the year)
Units of SBI Magnum Insta Cash Fund - Daily Dividend Option (24,33,797.6036
Units purchased, 643.7157 Units cumulated, 24,34,441.3193 Units sold during
the year)

7. Inventories (Certified and valued by a Director)

(At lower of cost or net realisable value)
Stores, Chemicals & Coal etc. 3,86,50,339 3,00,75,679
Raw Materials 3,01,42,393 2,17,37,743
Finished Goods 19,10,30,159 14,65,27,211
Stock-in-process 61,89,736 50,85,348

Total 26,60,12,627 20,34,25,981

8. Sundry Debtors (Unsecured-Considered Good)

A. Debts outstanding for a period exceeding 6 months 1,80,28,041 1,17,49,192
B. Others 23,90,10,981 21,18,85,047
Total 25,70,39,022 22,36,34,239

25
Annual Report 2007-2008,
31-3-2008 31-3-2007
Rs. Rs. Rs. Rs.

9. Cash and Bank Balances

A. Cash on Hand (Including in transit and cheques on hand 4,31,655 15,16,193

Rs. Nil, Previous year Rs. 10,56,9867-)

B. Balances with Scheduled Banks:

On Current Accounts 3,83,83,345 3,34,00,241

On Unclaimed Dividend Accounts 6,32,006 4,79,488

On Fixed Deposit Accounts 6,78,43,266 7,15,30,778

10,68,58,617 10,54,10,507-

Total 10,72,90,272 10,69,26,700

10. Loans and Advances

(Unsecured-considered Good)
Advances recoverable in cash or in kind or for value 4,20,42,440 4,05,94,785
to be received
Advance payment of Income-tax 2,29,59,648 3,37,26,8t3
Balances with Excise Authorities 1,12,92,291 1,91,45,251

Total 7,62,94,379 9,34,66,849

11. Current Liabilities

Sundry Creditors 26,76,78,194 24,47,05,384
Advance from Customers 1,09,53,204 1,32,38,648
Unclaimed Dividend * 6,32,006 4,79,498
Deposit by Dealers 3,23,96,812 2,69,75,609
Interest accrued but not due 2,02,047 8,45,760
Total 31,18,62,263 28,62,44,899

* These figures do not include any amount, due and outstanding, to be

credited to Investors Education & Protection Fund.

12. Provisions
Taxation 2,53,06,211 4,20,50,979
Proposed Dividend 92,77,521 66,82,515
Tax on Dividend 15,76,715 11,35,694
Retirement/Post Retirement Benefits and other employee benefits 2,85,05,364 2,40,87,185
Total 6,46,65,811 7,39,56,373

26
 Cera Sanitaryware Limited
2007-08 2006-07
Rs. Rs. Rs. Rs.
13. Other Income
Interest (Non Trade Investments) (Gross)
1. On Government Securities 714 985
2. From Others (including tax deducted at source 80,44,346 6,67,259
Rs. 16,68,7527- previous year Rs. 1,71,491/-) 80,45,060 6,68,244
Dividend (Gross) 7,77,622
Export Incentives 2,76,030
Claims Received 37,79,426 32,90,756
Miscellaneous Income 53,04,663 17,88,208
Items pertaining to previous years Unspent liabilities 58,01,699 29,63,724
and provisions no longer required written back (net)
Total 2,37,08,470 89,86,962

14. Increase (Decrease) in Finished Goods and Work-in Process

Stock at Commencement
Finished Goods 14,65,27,211 11,80,84,913
Stock in Process 50,85,348 38,51,368
15,16,12,559 12,19,36,281
Stock at Close
Finished Goods 19,10,30,159 14,65,27,211
Stock in Process 61,89,736 50,85,348
19,72,19,895 15,16,12,559
Total 4,56,07,336 2,96,76,278

15. Raw Materials Consumed

Opening Stock 2,17,37,743 • 2,25,77,080
Add: Purchases (Net of transfers) 13,93,01,489 11,06,24,408
16,10,39,232 13,32,01,488
Less: Closing Stock 3,01,42,393 2,17,37,743
Total 13,08,96,839 11,14,63,745

16. Payments to and Provision for Employees

Salaries, Wages and Bonus 17,31,50,868 12,74,51,464
Contribution to Provident and other funds 1,80,74;585 1,70,14,744
Staff and Labour Welfare Expenses 1,02,70,730 71,18,236
Total 20,14,96,183 15,15,84,444

17. Other Expenses

Stores, Spare Parts and Packing Materials 6,95,61,467 5,79,61,242
Excise Duty 89,71,955 18,94,782
Rent (Net) 73,44,205 67,82,501
Power and Fuel 5,80,35,069 4,41,52,444
Repairs to:
Buildings 18,93,805 45,72,405
Plant and Machinery 1,67,31,550 62,11,392
Others 27,48,705 29,90,597
2,13,74,060 1,37,74,394
Insurance 45,71,723 48,16,531
Rates and Taxes 4,24,768 3,61,762
Freight and Forwarding Expenses (net) 4,88,81,314 4,13,41,273
Brokerage, Commission and discounts on Sales 5,91,01,195 4,36,32,441
Publicity & Advertisement Expenses 4,66,64,302 4,13,67,367
Research & Development Expenses 55,15,116 33,34,672
Miscellaneous Expenses 6,67,55,385 6,72,79,913
Loss on sale of Fixed Assets 3,01,184 3,76,267
Donations 2,02,100 1,57,100
Directors' sitting Fees 26,000 24,000
Total 39,77,29,843 32,72,56,689

27
Annual Report 2007-2008 ; -
18. Notes forming part of the Accounts for the year ended 31st March, 2008.
1. Significant Accounting Policies
* Basis of Accounting
The Company prepares its financial statements on accrual basis in accordance with generally accepted accounting principles and
comply with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.
Sales
Sales include excise duty and net of discounts and sales-tax.
* Retirement Benefits
(i) Contribution to Provident Fund is made at applicable rates.
(ii) Contribution to approved Gratuity Fund is made of the present liability for future Gratuity as determined on an actuarial
valuation. The Company has no further obligation except contribution to the fund,
(iii) Leave encashment benefit is accounted for on the basis of actuarial valuation.
* Employees Stock Option Scheme
In accordance with the Securities and Exchange Board of India guidelines, the excess of the Market Price of the shares at the date
of grant of options under the Employee Stock Option Scheme, over the exercise price is treated as Employee Compensation and
amortised over the vesting period.
* Fixed Assets, Depreciation & Amortisation
(a) Fixed Assets transferred on demerger scheme are stated at cost-less accumulated depreciation. Acquisitions and additions
are stated at cost. The Company capitalizes all costs relating to the acquisition and installation of Fixed Assets on net of
MODVAT credits on the assets.
(b) Capital work in progress : Projects under commissioning and other capital work in progress are carried at cost, comprising
direct cost, related incidental expenses and attributable interest.
(c) Assets acquired under hire purchase instalment credit scheme, the cost of asset is capitalized while the annual financial
charges at equated instalments are charged to revenue.
(d) Depreciation for the year has been provided on net asset value at the rates and in the manner specified in Schedule-XIV of
the Companies Act, 1956 as under:
(1) On Plant & Machinery and Electric Plant & Installation on straight-line method.
(2) On other assets on written down value method.
(e) Leasehold land is amortized over the period of lease. In respect of other assets taken on lease before 01.04.2001, the value
thereof is not capitalized, but the contracted lease rentals are charged to revenue on accrual basis.
(f) The value of discarded Plant and Machinery has been written down to the lower of net book value and net realizable value.
* Inventories
(a) Raw-materials, packing materials, stores and chemicals are taken at lower of cost and net realizable value following FIFO method.
(b) Stock-in-Process is valued at lower of cost and net realizable value.
(c) Finished goods are valued at lower of cost and net realizable value.
(d) Excise duty on goods manufactured by the Company and remaining in inventory is included as a part of valuation of finished goods.
* .. Investments
Investments are stated at cost.
* Foreign Currency Transactions
Foreign currency transactions during the year are recorded at rates of exchange prevailing on the date of transaction.
Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities
denominated in foreign currencies are recognised in the profit and loss account. Exchange differences arising in respect of fixed
assets acquired from outside India on or before accounting period commencing before December 2006 were capitalised as part of
fixed assets.
Derivative transactions are considered as off-balance sheet items and cash flows arising therefrom are recognised in the books of
account as and when the settlements take place in accordance with the terms of the respective contracts over the tenor thereof.
Accounts Receivable in foreign currency are either represented by bills of exchange, which in many cases, are immediately
discounted with bankers, or accounted at realized amounts.
* 'Borrowing Cost
Borrowing costs that are attributable to the acquisition or construction of assets are capitalized as part of the cost of such assets.
* Taxation
Provision for tax for the year comprises current income-tax and fringe benefit tax determined to be payable in respect of taxable
income and deferred tax being the tax effect of timing differences representing the difference between taxable income and
accounting income that originate in one period, and are capable of reversal in one or more subsequent period(s).
* Earning per Share
The earnings considered in ascertaining the company's Earnings per Share (EPS) comprise the net profit after tax. The number of
shares used in computing Basic EPS is the Weighted average number of shares outstanding during the year.
The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares.
Contingent Liability
Contingent liabilities determined on the basis of available information; wherever material are provided for and Contingent liabilities not
provided for in the accounts are disclosed by way of notes to the accounts.
28
 Cera Sanitaryware Limited
2. Transfer of Ceramic Division from Madhusudan Industries Limited (MIL)
The Honourable High Court of Judicature at Gujarat vide its order dated 30.10.2001 has sanctioned Scheme of Arrangement (the
Scheme) U/s. 391 -394 of the Companies Act, 1956 between Madhusudan Industries Limited ("MIL") and the Company under which all the
assets, liabilities and debts of the Ceramic Division as defined in the Scheme ("the Undertaking") of "MIL" comprising of Ceramic Division
have been transferred to the Company at net book value with effect from 01.04.2001.
The Name of the Company has been changed from Madhusudan Oils And Fats Limited to Cera Sanitaryware Limited with effect from
01-11-2002 consequent upon the fresh certificate of Incorporation, issued by the Registrar of Companies, Gujarat State, Ahmedabad.
3. Impairment of Assets
Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the
amount may not be recoverable. An impairment loss is recognized for the amount by which the assets' carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of the assets' net selling price and its value in use.
4. Contingent liability in respect o f : 31.03.2008 31.03.2007
Rs. Rs.
a. Claims against the Company not acknowledged as debts. 80,16,921 73,33,799
b. Estimated amount of contracts remaining to be executed on 3,13,821 2,59,00,694
capital account not provided for (Net of advance)
c. Letters of Credit opened and guarantees given by the Bank in favour 3,67,40,995 2,26,82,902
of Parties and Government Authorities.
5. Preferential Warrants for Equity Shares
During the year, the company has allotted 1,10,000 (Previous Year 1,50,000) Equity shares out of 6,00,000 Preferential Warrants carrying
a right to subscribe an equal number of Eiquity shares, within 18 months from the issue of warrants, at the rate of Rs.123/- including
premium of Rs. 118/-. Promotors have not subscribed to further 10 lacs preferential Warrants offered them to issue a Equity Shares at
Rs.162/-for a Warrant.
6. Employees Stock Option Scheme
In respect of Option granted to employees during the year under the Employees Stock Option Scheme, in accordance with the guidelines
issued by Securities and Exchange Board of India, the accounting value of Options, based on Market Price of the shares on the date of
grant of the Option, is accounted as deferred Employee Compensation, which is amortied on a straight line basis over the vesting period.
Consequently an amount of Rs. 92.10 (24.31) lacs has been amortised for the Current Year.
7. Miscellaneous expenses include payment to Auditors as under: Current year Previous year
Rs. Rs.
Statutory Auditors
Audit Fees 1,00,000 1,00,000
Taxation work 1,55,500 22,000
Other Services 750 77,000
Expenses 22,000 15,000
2,78,250 2,14,000
8. (a) Managerial Remuneration to CMD, Executive Director and Whole time Director
under Section 198 of the Companies Act, 1956. (As per Schedule XIII of the Act) 2007-08 2006-07
Rs. Rs.
To CMD, Executive Director and Whole time Director
i. Salary 76,30,800 63,09,613
ii. Contribution to Provident and Other Funds 7,70,400 6,36,480
iii. Perquisites in cash or in kind 12,26,247 5,69,973
96,27,447 75,16,066
(b) Computation of Profit in accordance with section 198(1) read with Sec 309(5) of
the Companies Act, 1956 for calculation of Managerial Remuneration for 2007-08
Rs. Rs.
Profit before Taxation (as per books) 15,53,82,018
Add:' 1. Managerial Remuneration 96,27,447
2. Depreciation charged in the accounts 4,94,13,779
3. Directors' Sitting Fees 26,000
5,90,67,226
21,44,49,244
Less: Depreciation as per Section 350 of the Companies Act, 1956 4,94,13,779
Profit as per Section 198 of the Companies Act, 1956 16,50,35,465
10% of the above 1,65,03,547
Remuneration paid during the year 96,27,447

29
Annual Report 2007-2008
9. Particulars in respect < ods manufactured : (On triple shift basis in tons per annum)
Licensed Installed
(as certified by
Management)
1. anitaryware 24,000 24,000
(24,000) (16,500)
2. il Energy (WTG) 4.975 M.W.
(3.725 M.W.)
B. Actual Production (in M.T.)
1. Vitreous Chi anitaryware 18,402
(15,180)
2. Non Conver il Energy (WTG) (in units) •44,66,638
* (40,31 ,005)
* Under Energy banking system, electricity produced is for use by Ceramic Division at Kadi.
C. (a) Sales and Stock of Goods Manufactured and Traded
Opening Stock Closing Stock Sales
Quantity Value Quantity Value Quantity Value
Rs. Rs. Rs.
Vitreous China Sanitaryware (in M.T.) 1,760 4,47,96,161 3,243 7,89,04,247 16,919 82,90,47,961
(1,707) (4,02,84,474) (1,760) (4,47,96,161) (15,127) (73,46,88,362)
Outsourced :
- Bathware (in Nos.) 2,62,577 9,93,76,492 3,42,096 11,20,27,398 13,61,538 55,89,47,176
(2,00,395) (7,78,00,439) (2,62,577) (9,93,76,492)(11,51,294) (42,57,51,088)
- Others 23,54,558 98,514 56,50,207
(—) (23,54,558) (66,39,657)
1,39,36,45,345
.(1,16,70,79,106)
C. (b) Purchases
Quantity Value
Goods Rs.
Outsourced :
- Bathware (in Nos.) 14,41,057 38,04,18,185
(12,13,476) (30,78,83,993)
- Others 27,61,361
(91,41,223)
38,31,79,546
(31,70,25,216)
D. Itemwise Break-up of Raw Materials consumed
2007-08 2006-07
QTY. Value QTY. Value
M.T. Rs. M.T. Rs.
Sand, Sandstone, Clays & Chemicals 37,771 12,66,69,496 31,781 11,00,40,015
Accessories & Fitttings (Pcs) 2,20,109 42,27,343 34,328 14,23,730
13,08,96,839 11,14,63,745
E. Value of Imports on C.I.F. basis 2007-08 2006-07
Rs. Rs.
1. Raw Materials and Chemicals 59,78,919 45,96,145
2. Stores and Spare Parts & Fittings 60,42,181 99,28,986
3. Capital Goods 86,76,086 4,31,92,149
4. Outsourced 11,76,00,108 7,31 ,52,798
13,82,97,294 13,08,70,078
F. Value of Raw Materials, Stores & Spare Parts consumed
Raw Materials •Stores & Spare Parts
Rs. % Rs. %
1. Imported 80,12,826 6.12% 1,24,60,013 22.69%
(1,37,29,287) (12.32%) (47,51,553) (10.34%)
2. Indigenous 12,28,84,013 93.88% 4,24,51,693 77.31%
(9,77,34,458) (87.68%) (4,12,12,638) (89.66%)

30
 Cera Sanitaryware Limited
G. Expenditure in Foreign Currencies on Account of
Rs.
1. Travelling 16,31,705
(20,86,342)
2. Export Commission 8,93,958
(9,07,247)
3. Interest / Bank Charges 56,34,746
(19,45,297)
4. Technical know-how & Professional fees 15,70,242
(50,33,708)
5. Others 20,87,151
(19,60,899)
H. Amount remitted in Foreign Currency towards dividend during the year
2007-08
Final Dividend
Number of Shareholders
Number of Equity Shares held 5,50,000
Amount remitted (Rs.) 6,05,000
Year to which the dividend pertain 2006-07
I. Earnings in Foreign Exchange
Rs.
Exports of Goods on F.O.B. Basis 2,79,11,762
(2,56:42,056)
10. (a) Current liabilities - Sundry Creditors include amount payable to SSI Units : 31.03.2008 31.03.2007
Rs. Rs.
a. Amount due to SSI units 5,20,24,280 6,34,45,052
b. Others 21,56,53,914 18,12,60,332
c. Amount payable to SSI units :-
ABREF PRIVATE LTD., BAMMO POLYMERS LTD., BHAWANI STEELS, CLASSIC BATHROOM PRODUCTS PVT. LTD.,
CROWN CHEMICALS (INDIA), DEVILSON ENTERPRISES, DIP CRAFT INDUSTRIES, EMINENT COMPOSITES PVT
LTD., ESSEL BATH FITTINGS PVT. LTD., ESSEX FAUCET CO., ETHICAL POLYPAPER PVT.LTD., EUREKA POLY
PRODUCTS PVT LTD., FRIENDS ENTERPRISES, GARIMA ENTERPRISES, GULABCHAND KOCHAR, H.KUMAR & CO.,
HI LIFE MANUFACTURING CO., HIMACHAL POLY PRODUCTS, JAISHAL PLASTICS MUMBAI, JAS ENTERPRISES,
• JAYPEE ENTERPRISES, KANCHAN CERAMICS, LAXMI MINERALS, MAHAKAL INDUSTRIES, MATCHWELL PACKAGING
INDUSTRIES, MEGHDOOT ENTERPRISE (M), METALCO INDIA [P] LTD., NATIONAL TRADERS, PANAMA SALES
CORPORATION, PEARL INTERNATIONAL, PRIMA AUTOMATION (INDIA) PVT LTD., R. A. J. POLYMERS, R. C.
INDUSTRIES, RAMNATH INDUSTRIES, RAMNATH MARKETING, SHIV SHAKTI CHINA CLAY, SHREE GAYATRI
MINERALS, SHREE RAM CHINA CLAY, SHREE SHAKTI SALES COMPANY, SUPERFLO PVT LTD., VELPACK PAPER
PRODUCTS, VIKAS ENTERPRISES, YOGI PLAST SERVICES
(b) Disclosures required for Small enterprises and Micro enterprises for year ended March 31, 2008
Particulars As on 31 -03-2008 As on 31 -03-2007
* Principal Interest Principal Interest
Amt.(Rs.) Amt.(Rs.) Amt.(Rs.) Amt.(Rs.)
Unpaid Principal and Interest thereon as at March 31, 2008 5,20,24,280 Nil 6,34,45,052 Nil
Delayed payments due as at March 31, 2008 Nil Nil Nil Nil
Interest paid on delayed payment during the year Nil Nil Nil Nil
Interest due on principal amounts paid beyond the due date during the year • Nil Nil Nil Nil
Interest accrued but not due Nil Nil Nil Nil
Total Interest due but not paid Nil Nil Nil Nil

Note: The above disclosure has been made based on the information provided by the management.
11. Accounting Standard - 29 is applicable from 01.04.2009. The contingent liability on account of contractual obligation of derivative transaction
of currency swap with a bank maturing in 2008-09 has Mark to Market loss of Rs.213.42 Lacs as on 31.03.2008 ( Previous year - Nil).
The company is advised that no provision for liability (including for interest) is to be recognised / provided as it is a void /voidable contract.

31
Annual Report 2007-2008 •
12. Basic & Diluted EPS 2007-08 2006-07
Basic Earning per share
Profit attributable to the shareholders A 10,04,90,592 9,06,65,582
Weighted average number of Equity shares outstanding during the year B 61,41,735 54,08,987
Nominal Value of Equity Shares Rs.5 Rs.5
Basic Earning per Share (F.V. Rs. 5 per share) A/B Rs. 16.36 Rs. 16.76
Diluted Earning per share
Profit attributable to the shareholders A 10,04,90,592 9,06,65,582
Weighted average number of Equity shares outstanding during the year B 62,56,273 54,53,281
Nominal Value of Equity Shares Rs.5 Rs.5
Diluted Earning per Share (F.V. Rs. 5 per share) A/B Rs. 16.06 Rs. 16.63
Number of shares for Basic & Dilutive EPS
Weighted average number of equity shares outstanding during the year for Basic EPS 61,41,735 54,08,987
Add : Dilutive potential Equity Shares 1,14,538 44,294
Weighted average number of equity shares outstanding during the year for Dilutive EPS 62,56,273 54,53,281
13. Employee Benefits
The company has with effect from 1 st April 2007,adopted Accounting standard 15, Employee benefits (revised 2005), issued by the Institute
of Chartered Accountants of lndia( the 'revised AS 15').Consequently,the disclosure as required as per revised AS 15 are as under:
1) Brief description of the plans :
The company has various schemes for long-term benefits such as provident fund.gratuity and leave encashment. In case of funded
schemes, the funds are recognised by income tax authorities and administered through trustees/appropriate authorities.
The company's defined contribution plans are Provident Fund (exempted employees) recognised by the Income Tax Authorities
and administered through trustees.Since the company no further obligation beyond making contributions and interest shortfall.
Further the pattern of investment for investible funds is as prescribed by the Government. Accordingly other related disclosures in
respact of provident fund have not been made.
The company's other defined contribution plans are Provident Fund (non exempted employees), Employees' pension scheme
(under the Provisions of the employees' Provident Funds and Miscellneous Provisions Act,1952), state plans namely Employee's
State Insurance Fund, Since company has no further obligation beyond making contributions.
The company's defined benefit plans are Gratuity and leave Encashment for all its employees.Gratuity fund is recognised by the
Income Tax Authorities and is administered through trustees.
Liability for Defined Benefit Plan is provided on the basis of valuations, as at Balance sheet date, carried out by an independent
actuary.The actuarial valuation method used by independent actuary for measuring the liability is the projected unit credit method.
2) Charge to the Profit and Loss Account based on contributions:
Amount (Rs.)
Provident fund • 48,77,054
Employees' Pension Scheme " 41,78,050
ESIC ' . 32,02,421
1,22,57,525
3) Disclosures for defined benefit plans based on actuarial reports as on 31st March, 2008
Amount (Rs.)
Gratuity Leave Encashment
Particulars " Funded Plan Non-funded Plan
Change in Defined Benefits Obligation
Opening defined benefits obligation 30595164 10082250
Current service cost 3001521 1880671
Interest cost 2447613 *>' 811621
Actuarial loss / (gain) 1521383 (145223)
Benefits paid 2261593 743347
Closing defined benefits obligation 35304088 11885972
Change in Fair value of Assets
Opening fair value of plan assets 30148396
Expected return on plan assets 2948315
Actuarial gain / (loss) (1017604)
Contributions by employer 5552205
Benefits paid 2261593
Closing fair value of plan assets 35369719
Movement in net liability recognized in Balance Sheet
Net opening liability 446768 10082250
P & L Charge 5039806 2547069
contribution Paid (5552205) (743347)
Closing Net (asset) / liability (65631) 11885972
32
 Cera Sanitaryware Limited
Amount (Rs.)
Expenses recognized in the Profit and Loss Account
Current Service cost 3001521 1880671
Interest on defined benefit obligation 2447613 811621
Expected return on plan assets (2948315)
Net actuarial loss / (gain) recognized in the current year 2538987 (145223)
Total Expenses 5039806 2547069
Assets Information
Government of India Securities 35%
Corporate Bonds 56%
Special Deposits Scheme
Others 9%
Principal actuarial assumption
Discount Rate (p.a) 8% 8.05%
Expected rate of return on plan assets (p.a) 9%
Annual Increase in Salary costs 6% 6%
Effect on the aggregate Service Cost & interest cost
Effect on defined benefit obligation
(4) The Company has provided Rs.118.86 Lacs (100.59 lacs) being increment of discounted value of liability for unavailed leave of the
employees determined as per Acturial Valuation.
14. Related party disclosures
Associates Key Management Relatives of Key Total
Type of Transaction Personnel Management
Personnel
(Rs.) (Rs.) (Rs.) (Rs.)
Purchases - Fixed Assets 67,114 67,114
(2,34,491) (2,34,491)
Sales - Fixed Assets 1,44,500 1,44,500
(...) (...)
Expenses - Remuneration — 96,27,447 1,19,754 97,47,201
(...) (75,16,066) (96,000) (76,12,066)
Lease Rent / Rent — —
(92,664) (92,664)
Interest paid 19,73,754 19,73,754
(22,94,011) (22,94,011)
Donation / Other Expenses 5,24,290 5,24,290
(4,48,763) (4,48,763)
Income
Finance •• Loans & Advances given 2,85,678 2,85,678
(...) (-)
Fixed Deposits / Loan Received 2,78,50,000 2,78,50,000
(4,20,62,531) (4,20,62,531)
Fixed Deposits / Loan repaid 2,60,50,000 2,60,50,000
(2,08,00,000) (2,08,00,000)
Balance at the end of the year
Loans & Advances 94,544 94,544
(...) (...)
Loans / Deposits 2,37,00,000 2,37,00,000
(2,24,35,678) (2,24,35,678)
Others
Equity Shares allotted against Preferential Warrants (Nos) 1,10,000 1,10,000
(1 ,50,000) (1,50,000)
. Preferential Warrants to subscribe for Equity Shares (Nos) ...
—
(4,50,000) (4,50,000)
Option granted and outstanding (Under ESOS) 30,000 30,000
(15,000) (15,000)
Notes :
Names of related parties and description of relationship :
1. Fellow Subsidiaries
2. Associates 1. Madhusudan Industries Limited 4. Vikram Investment Co. Ltd.
2. Madhusudan Fiscal Limited 5. Madhusudan Holdings Ltd.
3. Cera Foundation 6. Swadeshi Fan Ind. Ltd.
33
Annual Report 2007-2008
3. Key Management Personnel Vikram Somany, Vidush Somany & S. C. Kothari
4. Relatives of Key Management Personnel Smiti Somany

15. Note on deferred tax liability

The Deferred tax liabilities as at 31st March, 2008 comprise of'the following 31-03-2008 31-03-2007
Deferred Tax Liabilities on account of: Amount (Rs.) Amount (Rs.)
Depreciation 12,60,28,202 9,23,71,064
Deferred Expenses -31,68,573 -8,15,010
12,28,59,629 9,15,56,054
Less: Deferred Tax Assets on account of:
- Others 1,84,409 5,71,260
Total 12,26,75,220 9,09,84,794

(Figures in brackets relate to previous year)

As per our report of even date attached

For and on behalf of
H. V. Vasa & Co.
Vikram Somany Chairman-cum-Managing Director
Chartered Accountants
TusharH.Vasa Rajesh B. Shah - C.F.O. Vidush Somany Executive Director
Proprietor
Membership No. 16831 Narendra N. Patel
G.M. & Company Secretary D. P. Goyal Director
Ahmedabad Ahmedabad
24th May, 2008 24th May, 2008 S. C. Kothari Sr. Whole time Director

34
 Cera Sanitaryware Limited
Cash Flow Statement for the year ended 31st March, 2008
Year ended March 31, 2008 Year ended March 31, 2007
Rs. Rs. Rs. Rs.
A. Cash flow from operating activities
Net profit before tax & Extra-ordinary items 14,37,62,807 14,03,37,818
Adjusted for
Depreciation 4,94,13,779 3,54,10,050
Foreign Exchange 30,97,713 (7,96,409)
Investment Income
Interest Charged 3,17,20,819 2,27,64,335
8,42,32,311 5,73,77.976
Operating profit before working capital changes 22,79,95,118 19,77,15,794
Adjusted for
Trade and other receivables (2,69,22,694) (11,31,11,882)
Inventories (6,25,86,646) (3,13,26,440)
Trade Payable 3,00,35,543 10,69,39,804
(5,94,73,797) (3,74,98,518)
Cash generated from operation 16,85,21,321 16,02,17,276
Interest paid (3,17,20,819) (2,27,64,335)
Direct taxes paid (2,92,55,387) (3,58,60,722)
Cash flow before extra-ordinary items 10,75,45,115 10,15,92,219
Extra-ordinary items (55,89,459) (6,77,620)
Net Cash From Operating Activities Total (A) 10,19,55,656 10,09,14,599
B. Cash flow from Investing activities
Purchase of fixed assets (22,07,08,193) (22,38,13,355)
Sale of fixed assets 11,29,068 23,59,168
Purchase of Investments (6,250)
Sale of investments (net of loss)
Interest received 80,45,060 6,68,244
Dividend received 7,77,622
Net Cash Used in Investing Activities Total (B) (21,07,56,443) (22,07,92,193)
C. Cash flow from financing activities
Proceeds from issue of share capital 2,13,87,249 11,16,65,544
Right issue expenses
Proceeds from borrowings 9,55,95,319 9,45,43,070
Dividend paid (78,18,209) (55,15,974)

Net Cash Used in Financing Activities Total (C) 10,91,64,359 20,06,92,640

Net Changes in Cash & Cash Equivalents (A+B+C) 3,63,572 8,08,15,046
Cash & Cash equivalent - Opening Balance 10,69,26,700 2,61,11,654
Cash & Cash equivalent - Closing Balance 10,72,90,272 10,69,26,700

Vikram Somany Chairman-cum-Managing Director

Rajesh B. Shah - C. F. O.
Vidush Somany Executive Director
Narendra N. Patel - G. M. & Company Secretary
D. P. Goyal Director
Ahmedabad, 24th May, 2008 S. C. Kothari Sr. Whole time Director

Auditors' Certificate

We have verified the above cash flow statement of Cera Sanitaryware Limited derived from the audited annual financial statements for the years
ended March 31,2008 and March 31,2007 and found the same to be drawn in accordance therewith and also with the requirements of Clause
32 of the listing agreements with stock exchange(s).

As per our report of even date attached

For and on Behalf of
H. V. Vasa & Co.
Chartered Accountants
Tushar H. Vasa
Ahmedabad Proprietor
24th May, 2008 Membership No. 16831
35
Annual Report 2007-2008_
Balance Sheet Abstract and Company's General Business Profile

Registration Details
Registration No. : 34,400
State Code : 04
Balance Sheet Date " : 31-03-2008
Capital raised during the year (Amount in Rs. Thousands)
Public Issue : -
Right Issue :
Bonus Issue :
Private / Preferential Placement : 12,177
in. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)
Total Liabilities : 11,01,822
Total Assets : 11,01,822
Sources of Funds
Paid-up Capital : 35,107
Reserves & Surplus : 6,75,735
Secured Loans : 3,16,249
Unsecured Loans : 74,731
Application of Funds
Net Fixed Assets : 7,64,468
Investments ' : 13
Net Current Assets : 3,36,262
Misc. Expenditure : 1,079
Accumulated Losses
IV. Performance of Company (Amount in Rs. Thousands)
Turnover 13,04,212
Total Expenditure 11,48,830
Profit before tax (PBT) 1,55,382
Profit after tax (PAT) 1,00,491
Earning Per Share (Rs.) (PAT/No. of Shares) - Basic 16.36
Earning Per Share (Rs.) (PAT/No. of Shares) - Diluted 16.06
Dividend Rate 30%
v. Generic Names of Three Principal products/ Services of Company
i. Item Code No. (ITC CODE) 69101000
Product description Ceramic Sinks, Wash basins, Wash basin pedestals, baths, bidets, Water closet
pans, flushing cisterns, Urinals similar Sanitary fixtures

Vikram Somany Chairman-cum-Managing Director

Vidush Somany Executive Director

Rajesh B. Shah - C.F.O.

D. P. Goya) Director
Ahmedabad Narendra N. Patel
24th May, 2008 G.M. & Company Secretary S. C. Kothari Sr. Whole time Director
36
Cera Sanitaryware Limited
Madhusudon House, Opp. Navrangpura Telephone Exchange, Ahrnedabad-380 006
Phone: (079) 26449781, 26449789, 32205238 Fax: (079) 26569259 E-mail: ahmedabad@cera-india.com website: www.cera-india.com

.BathT
stea (Company Display Centres)
AHMEDABAD : 1 st Floor, Shivalik Arcade, Anand Nagar Cross Roads, 100 ft. Road, Ahmedabad 380 015
Phone : (079) 26931 140, 32205237 E-mail : bathstudio_ahd@cera-india.com
BANGALORE : 596/601 -47, 1st Floor, Dr. Rajkumar Road, Prakash Nagar, Opp. Andhra Bank, Bangalore 560 021
Phone : (080) 3291 7343 Telefax : (080) 23325622 E-mail : bangalore@cera-india.com
CHANDIGARH : SCO 3A, 1 st Floor, Sector 7-C, Chandigarh 160 01 9
Phone : (0172) 2795641, 3208093 Telefax : (0172) 2795641 E-mail : chandigarh@cera-india.com
COCHIN : 2nd Floor, Jacob's, 33-326B, Geetanjali Junction Chalikavattam Palarivattam-Vyttila NH By-Pass 47, Ernakulam, Cochin 682 019
Phone : (0484) 3232043, 3231446 Telefax (0484) 2805440 E-mail : cochin@cera-india.com
HYDERABAD : Plot No. 1 103, 2nd Floor, Food World Building, Jubilee Hills, Road No. 36, Hyderabad 500 033
Phone : (040) 32006845 Telefax : (040) 23546918 E-mail : hyderabad@cera-india.com
KOLKATA : Unit No. E 406, City Centre, DC Block, Sector-1, Salt Lake City Bidhannagar, Kolkata 700 064
Phone : (033) 32996221 E-mail : calcutta@cera-india.com
LUCKNOW : 1 st Floor, 1 -Sapru Marg, Above Sunny Toyota, Lucknow 226 001
Phone: (0522) 3211333 E-mail: lucknow@cera-india.com
MUMBAI : 'Mahavir Arcade', Shop No. 1, Ground Floor, Plot No. 286, Sector-28, Vashi, Navi Mumbai 400 703
Phone: (022) 32508669, 27801942 Fax: (022) 27802003 E-mail: mumbai@cera-india.com

CERAVQGUE
A-31, 1 st Floor, Firoz Gandhi Road, Lajpat Nagar - 2, New Delhi - 110024

Bath
(Exclusive Cera Retail Centre)

NEW DELHI: 1st Floor, 67/5356, Reghar Pura, Karol Bagh, New Delhi 110 005
Phone: (011) 28723040, 45052755 Telefax: (011) 28722178

REGD. OFFICE & WORKS :

9, GIDC Industrial Estate, Kadi 382 715 Dist. Mehsana, North Gujarat, India
Phone: (02764) 242329, 262619, 262638, 263874, 321949 Fax: (02764) 242465
E-mail: kadi@cera-india.com
BOOK-POST

To,

if undeliverd, please return to:

Cera Sanitaryware Limited

Madhusudan House, Opp. Navrangpura Telephone Exchange, Ahmedabad-380 006
Phone: (079) 26449781, 26449789, 32205238 Fax: (079) 26569259
E-mail: ahmedabad@cera-india.com website: www.cera-india.com