Notes to Accounts of Cera Sanitaryware Ltd.

Mar 31, 2025

3.7 Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past events
and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and
a reliable estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects,
when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the
passage of time is recognised as a finance cost. Provisions are reviewed at each Balance Sheet date and adjusted to
reflect the current best estimates.

Contingent liability is disclosed in the case of:

* a present obligation arising from past events, when it is not probable that an outflow of resources will be required
to settle the obligation.

* a present obligation arising from past events, when no reliable estimate is possible.

Contingent assets are not recognised in the financial statements however, contingent assets, if any, are disclosed in the
financial statements.

3.8 Earnings Per Share

Basic earnings per equity share is calculated by dividing the net profit after tax for the year attributable to equity
shareholders of the Company by the weighted average number of equity shares outstanding during the year.

Diluted earnings per equity share is computed by dividing adjusted net profit after tax by the aggregate of weighted
average number of equity shares and dilutive potential equity shares during the year.

3.9 Foreign Currency Transactions and Translations
Initial Recognition

The Company’s financial statements are presented in INR, which is also the Company’s functional currency. Transactions
in foreign currencies are recorded on initial recognition in the functional currency at the exchange rates prevailing on
the date of the transaction.

In case of advance receipts/payments in a foreign currency, the spot exchange rate to use on initial recognition of the
related asset, expense or income on the derecognition of a non-monetary asset or non-monetary liability relating to
advance consideration, shall be the date when an entity has received or paid advance consideration in a foreign currency.

Measurement at the Balance Sheet Date

Foreign Currency monetary items of the Company, outstanding at the Balance Sheet date are restated at the year-end
rates. Non-monetary items which are carried at historical cost denominated in a foreign currency are reported using
the exchange rate at the date of the transaction. Non-monetary items measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair value is determined.

Treatment of exchange difference

Exchange differences that arise on settlement of monetary items or on reporting at each Balance Sheet date of the
Company’s monetary items at the closing rate are recognised as income or expenses in the period in which they arise.

3.10 Revenue from Contracts with Customers

The Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount
that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.
Further, the Company evaluates the performance obligations being distinct to enable separate recognition and can
impact timing of recognition of certain elements of multiple element arrangements.

Revenue arises from sale of goods and rendering of services.

Sale of Goods

Most of the Company’s revenue is derived from selling goods with revenue recognised at a point in time when control of
the goods is transferred to the customer and retains none of the significant risks and rewards of the goods in question.

The Company recognises revenue from the sale of goods upon transfer of control of promised products to customers.
Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price allocated to
that performance obligation, in accordance with Ind AS 115 " Revenue from contract with customers". Amounts disclosed
as revenue are net of returns and allowances, trade discounts, volume rebates and value added taxes/ Goods and
service tax.

As per Ind AS 115, the Company determines whether there is a significant financing component in its contracts. However,
the Company has decided to use practical expedient provided in Ind AS 115 and not to adjust the promised amount of
consideration for the effects of a significant financing components in the contracts, where the Company expects, at
contract inception that the period of completion of contract terms are one year or less. Therefore, for short-term
advances, the company does not account for a financing component. No long - term advances from customers are
generally received by the Company.

The Company provides for warranties for general repairs and replacement which will be assurance-type warranties
under Ind AS 115, which will continue to be accounted for under Ind AS 37 "Provisions, Contingent Liabilities and
Contingent Assets", consistent with its current practice.

Rendering of Services

The Company is rendering after sales services for its sold products. The after sales services is rendered against
independent contracts with customers or against assurance type warranty for goods sold. Revenue from sale of services
is recognised at an amount entitled in exchange for transferring services at a point in time to a customer.

Interest and Dividends and Other Income

Interest income is reported on an accrual basis using the effective interest method. Dividends are recognised at the time
the unconditional right to receive payment is established. Other income is recognised on accrual basis except where the
receipt of income is uncertain.

3.11 Exceptional Items

An item of income or expense which by its size, nature, type or incidence requires disclosure in order to improve
an understanding of the performance of the Company is treated as an exceptional item and disclosed as such in the
financial statements.

3.12 Leases

The Company’s lease asset classes primarily consist of leases for land and buildings. The Company evaluates if an
arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification of a lease requires significant
judgment. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for
a period of time in exchange for consideration. The determination of whether an arrangement is (or contains) a lease

is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if
fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right
to use the asset or assets, even if that right is not explicitly specified in an arrangement.

Company as a lessee

The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if
the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

(i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits
from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.
The Company uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable
discount rate. The determination of whether an arrangement is (or contains) a lease is based on the substance of the
arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is
dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if
that right is not explicitly specified in an arrangement.

At the date of commencement of the lease, the Company recognizes a right-of-use asset (“ROU”) and a corresponding
lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less
(short-term leases) and low value leases.

For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a
straight-line basis over the term of the lease. The right-of-use assets are initially recognized at cost, which comprises
the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of
the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated
depreciation and impairment losses. Right-of-use assets are depreciated from the commencement date on a straight¬
line basis over the lease term and useful life of the underlying asset. The lease liability is initially measured at amortized
cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit
in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these
leases. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Company
changes its assessment if whether it will exercise an extension or a termination option. Lease liability and ROU asset
have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
Further, refer Note No. 46, classification of leases and other disclosures relating to leases.

Company as a lessor

Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are
classified as operating leases. Rental income from operating lease is recognised on a straight-line basis over the term of
the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying
amount of the leased asset and recognised over the lease term on the same basis as rental income. Leases are classified
as finance leases when substantially all of the risks and rewards of ownership transfer from the Company to the lessee.
Amounts due from lessees under finance leases are recorded as receivables at the Company’s net investment in the
leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the
net investment outstanding in respect of the lease.

3.13 Employee Benefits

Employee benefits include provident fund, pension fund, gratuity and compensated absences and Share based Payments.
Defined Contribution Plans

The Company’s contribution to provident fund and pension fund is considered as defined contribution plan and is
charged as an expense as they fall due based on the amount of contribution required to be made and when services are
rendered by the employees. The Company has no legal or constructive obligation to pay contribution in addition to its
fixed contribution.

Defined Benefit Plans

The Company operates a defined benefit Gratuity Plan with approved Gratuity Fund and contributions are made to a
separately administered approved Gratuity Fund. For defined benefit plans in the form of gratuity, the cost of providing
benefits is determined using ‘the Projected Unit Credit method’, with actuarial valuations being carried out at each
Balance Sheet date. Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding
amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts

included in net interest on the net defined benefit liability), are recognised immediately in the Balance Sheet with a
corresponding debit or credit to retained earnings through other comprehensive income in the period in which they
occur. Remeasurements are not reclassified to the Statement of Profit and Loss in subsequent periods. The retirement
benefit obligation recognised in the Balance Sheet represents the present value of the defined benefit obligation as
adjusted for unrecognised past service cost.

Short-term Employee Benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered
by employees are recognised during the year when the employees render the service. These benefits include salaries,
wages, performance incentive and compensated absences which are expected to occur within twelve months after
the end of the period in which the employee renders the related service. The cost of such compensated absences is
accounted as under:

(a) in case of accumulated compensated absences, when employees render the services that increase their entitlement
of future compensated absences; and

(b) in case of non-accumulating compensated absences, when the absences occur.

Long-term Employee Benefits

Compensated absences and other benefits like gratuity which are allowed to be carried forward over a period in excess
of twelve months after the end of the period in which the employee renders the related service are recognised as a
non-current liability at the present value of the defined benefit obligation as at the Balance Sheet date out of which the
obligations are expected to be settled.

Share Based Payments

The Company recognizes compensation expense relating to share- based payment in statement of profit and loss using
fair value in accordance with Ind AS 102, "Share-based Payments".

Equity- settled share-based payments to employees are measured at the fair value of the employee stock options at the
grant date using an appropriate valuation model which is dependent on the terms and conditions of the grant.

The fair value determined at the grant date of the equity-settled share-based payments is amortised over the vesting
period, based on the Company’s estimate of equity instruments that will eventually vest, with a corresponding increase
in equity.

At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected
to vest. The impact of the revision of the original estimates, if any, is recognised in the Statement of Profit and Loss
such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-settled
employee benefits reserve.

Treasury shares

The Company has formed the Cera Sanitaryware Limited Employee Welfare Trust (“ESOP trust”) for purchasing the
Company’s shares to be allotted to eligible employees under Employee Stock Options Scheme, 2024. The Company has
considered the said Employee Welfare Trust as its extension and shares held by the Trust is treated as Treasury Shares.
As per Ind AS 32, the consideration paid for treasury shares including any directly attributable incremental cost is
presented as a deduction from total equity, until they are cancelled, sold or reissued.

3.14 Taxes on Income

Income tax comprises Current and Deferred Tax. It is recognised in the Statement of Profit or Loss except to the extent
that it relates to business combination or to an item recognised directly in equity or in other comprehensive income.

(a) Current Tax

Current income tax assets and/or liabilities comprise those obligations to, or claims from, fiscal authorities
relating to the current or prior reporting periods, that are unpaid at the reporting date. Current tax is payable on
taxable profit, which differs from profit or loss in the financial statements. Calculation of current tax is based on
tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.

Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the
recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.

(b) Deferred Tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable
profit will be available against which the deductible temporary differences, and the carry forward of unused tax
credits and unused tax losses can be utilised. Deferred tax liabilities are generally recognised in full.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the
asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the Balance Sheet date.

Tax relating to items recognised directly in equity/ other comprehensive income is recognised in respective head
and not in the Statement of Profit & Loss.

The carrying amount of deferred tax assets is reviewed at each Balance Sheet date and is adjusted to the extent that
it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered.

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same
taxation authority.

3.15 Fair Value Measurement

The Company measures financial instruments such as investments in mutual funds, certain other investments etc. at
fair value at each Balance Sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability at the measurement date. All
assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the
fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement
as a whole.

* Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

* Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable.

* Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of
the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

3.16 Financial Instruments

I. Financial Assets

(a) Initial Recognition and Measurement

All financial assets are recognised initially at fair value plus, in case of financial assets not recorded at fair
value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset,
which are not at fair value through profit and loss, are added to fair value on initial recognition. Transaction
costs of financial assets carried at fair value through profit or loss are expensed in Statement of Profit
and Loss.

(b) Subsequent Measurement

(i) Financial assets carried at amortised cost

A financial asset is subsequently measured at amortised cost if it is held within a business model whose
objective is to hold the asset in order to collect contractual cash flows and the contractual terms of
the financial asset give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.

(ii) Financial assets at fair value through Other Comprehensive Income (FVOCI)

A financial asset is subsequently measured at fair value through other comprehensive income if it is
held within a business model whose objective is achieved by both collecting contractual cash flows
and selling financial assets and the contractual terms of the financial asset give rise on specified dates
to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(iii) Financial assets at fair value through Profit or Loss (FVTPL)

A financial asset which is not classified in any of the above categories are subsequently fair valued
through Statement of Profit and Loss.

(c) Impairment of Financial Assets

The Company assesses on a forward looking basis the Expected Credit Losses (ECL) associated with its assets
measured at amortised cost and assets measured at fair value through other comprehensive income. The
impairment methodology applied depends on whether there has been a significant increase in credit risk.

(d) Derecognition of Financial Assets

A financial asset is derecognised when:

* The Company has transferred the right to receive cash flows from the financial assets or

* Retains the contractual rights to receive the cash flows of the financial assets, but assumes a contractual
obligation to pay the cash flows to one or more recipients.

Where the Company transfers the financial asset, it evaluates the extent to which it retains the risk and
rewards of the ownership of the financial assets. If the Company transfers substantially all the risks
and rewards of ownership of the financial asset, the Company shall derecognise the financial asset and
recognise separately as assets or liabilities any rights and obligations created or retained in the transfer. If
the Company retains substantially all the risks and rewards of ownership of the financial asset, the Company
shall continue to recognise the financial asset.

Where the Company has neither transferred a financial asset nor retains substantially all risks and rewards
of the ownership of the financial asset, the financial asset is derecognised if the Company has not retained
control of the financial assets. Where the Company retains control of the financial assets, the asset is
continued to be recognised to the extent of continuing involvement in the financial asset.

II. Financial Liabilities

Initial Recognition and Subsequent Measurement

All financial liabilities are recognised initially at fair value and in case of borrowings and payables, net of directly
attributable cost.

Financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and
other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair
value due to the short maturity of these instruments. Changes in the amortised value of liability are recorded as
finance cost.

III. Fair Value of Financial Instruments

In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions
that are based on market conditions and risks existing at each reporting date. The methods used to determine fair
value include discounted cash flow analysis, available quoted market prices. All methods of assessing fair value
result in general approximation of value, and such value may vary from actual realization on future date.

IV. Offsetting of Financial Instruments

Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet, if there is a
currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis,
to realise the assets and settle the liabilities simultaneously.

V. Investment in Subsidiaries, Joint Ventures and Associates

The Company has accounted for its investment in subsidiaries, joint ventures and associates at cost less impairment
loss, if any.

3.17 Significant Judgments, Estimates and Assumptions

The preparation of the Company’s financial statements requires management to make judgments, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, the accompanying disclosures,
and the disclosure of contingent liabilities at the date of the financial statements. Estimates and assumptions are
continuously evaluated and are based on management’s experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances. Uncertainty about these assumptions and estimates
could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in
future periods.

In particular, the Company has identified the following areas where significant judgments, estimates and assumptions are
required. Further information on each of these areas and how they impact the various accounting policies are described
below and also in the relevant notes to the financial statements. Changes in estimates are accounted for prospectively.

Judgments

In the process of applying the Company’s accounting policies, management has made the following judgments, which
have the most significant effect on the amounts recognised in the financial statements.

Contingencies

Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company,
including legal, contractor, land access and other claims. By their nature, contingencies will be resolved only when
one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of
contingencies inherently involves the exercise of significant judgments and the use of estimates regarding the outcome
of future events.

Estimates and Assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year, are described below. The Company based its assumptions and estimates on parameters available when the
standalone financial statements were prepared. Existing circumstances and assumptions about future developments,
however, may change due to market change or circumstances arising beyond the control of the Company. Such changes
are reflected in the assumptions when they occur.

(a) Impairment of Non-financial Assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If
any indication exists, or when annual impairment testing for an asset is required, the Company estimates the
assets’ recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs
of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount
of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its
recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no
such transactions can be identified, an appropriate valuation model is used. The calculations are corroborated
by valuation multiples, quoted share prices for publicly traded securities or other available fair value indicators.

(b) Estimation of Defined Benefit Obligations

The cost of the defined benefit plan and other post-employment benefits and the present value of such obligation
are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may
differ from actual developments in the future. These include the determination of the discount rate, future salary
increases, mortality rates and attrition rate. Due to the complexities involved in the valuation and its long term
nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are
reviewed at each reporting date.

(c) Fair Value Measurement of Financial Instruments

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured
based on quoted prices in active market, their fair value is measured using valuation techniques including the

DCF model. The inputs to these models are taken from observable markets where possible, but where this is
not feasible, a degree of judgment is required in establishing fair values. Judgements include considerations of
inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the
reported fair value of financial instruments.

(d) Estimation of Current Tax and Deferred Tax

Management judgment is required for the calculation of provision for income - taxes and deferred tax assets
and liabilities. The Company reviews at each Balance Sheet date the carrying amount of deferred tax assets. The
factors used in estimates may differ from actual outcome which could lead to adjustment to the amounts reported
in the financial statements.

(e) Impairment of Financial Assets

The impairment provisions for financial assets are based on assumptions about risk of default and expected
credit loss rates (ECL). The Company uses judgments in making these assumptions and selecting the inputs to the
impairment calculation, based on Company’s past history, existing market conditions as well as forward looking
estimates at the end of each reporting period.

(f) Impairment of Investments in Subsidiaries, Joint Ventures and Associates

The Company reviews its carrying value of investments carried at cost (net of impairment, if any) annually. If
the estimated recoverable amount is less than its carrying amount, the impairment loss is accounted for in the
statement of profit and loss.

(g) Useful lives of property, plant and equipment, and intangible assets

Property, plant and equipment, and intangible assets represent a significant proportion of the asset base of the
Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s
expected useful life and the expected residual value at the end of its life. The useful lives and residual values of
Company''s assets are determined by the management at the time the asset is acquired and reviewed periodically,
including at each financial year end. The lives are based on historical experience with similar assets as well as
anticipation of future events, which may impact their life, such as changes in technology.

(h) Share based Payments

The Company measures the cost of equity-settled transactions with employees using Black-Scholes model to
determine the fair value of the liability incurred on the grant date. Estimating fair value for share-based payment
transactions requires determination of the most appropriate valuation model, which is dependent on the
terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs
to the valuation model including the expected life of the share option, volatility and dividend yield and making
assumptions about them. The assumptions and models used for estimating fair value for share-based payment
transactions are disclosed in Note 34.2.

3.18 Standards issued but not yet effective

Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time to time. As on March 31, 2025 there were no material
amendments to the Companies (Indian Accounting Standards) Rules issued by the MCA which were not yet effective.

7.1 (D) The Company acquired share capital worth Rs. 806 Lakhs for 26% stake in M/s Milo Tile LLP (""Milo"") in FY 2018-19.
During FY 2022-23 Milo had been unable to maintain product quality parameters which has forced the Company to
discontinue procuring tiles from Milo, and raise claims based on inferior quality products supplied by Milo.

Subsequently, the matter was referred to arbitration in accordance with the terms of the agreement between the
parties. However, during the mediation process, both parties agreed to an amicable settlement in March 2025
whereby CERA retired from the LLP without any claim on its capital or share of profits in the LLP and also paid an
amount of Rs. 160 Lakhs as full and final settlement against the Trade Payables due to Milo.

Pursuant to this settlement, the entire investment of Rs. 806 lakhs in Milo Tile LLP was not recoverable, hence
written off by adjusting against the impairment Loss provided (Rs. 500.00 Lakhs in FY 2022-23, Rs. 155.57 Lakhs in
FY 2023-24 and remaining amount of Rs. 150.43 Lakhs in FY 2024-25) and disclosed as an exceptional item in the
respective periods.

18.2 Terms / Rights attached to Equity Share :

The Company has only one class of Equity Shares having a par value of Rs. 5/- per share. Each holder of Equity is entitled
to one vote per share and each equity share carries an equal right to dividend. The dividend proposed by the Board of
Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of Interim
dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company
after distribution of all preferential amounts, in proportion to their shareholding.

Refer Note 53 for the particulars of Dividend Paid / proposed during the year.

18.3 The Board of Directors of the Company at its meeting held on 5^th August, 2024 approved the proposal of buyback 1,08,333
fully paid-up Equity Shares of the Company on a proportionate basis, through the tender offer route, at a price of
Rs. 12000/- per Equity Share payable in cash for an amount aggregating to Rs. 12,999.96 Lakhs (excluding transaction
cost and taxes). The Company bought back 1,08,333 fully paid-up Equity Shares and settled all valid bids and extinguished
equity shares bought back during the year.

Nature and purpose of Other Reserves

a) Securities Premium

Securities Premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the
provisions of the Companies Act, 2013.

b) General Reserve

General Reserve is created out of profit after tax earned by the Company by way of transfer from surplus in the statement
of profit and loss. The Company can use this Reserve for payment of dividend and issue of fully paid-up shares. As
General Reserve is created by transfer of one component of equity to another and is not an item of other comprehensive
income, items included in the General Reserve will not be subesquently reclassified to statement of profit and loss.

c) Treasury Shares

Treasury Shares represents cost of shares of the Company purchased by "Cera Sanitaryware Limited Employees Welfare
Trust" to be utilized for the purpose of granting ESOPs to the eligible employees of the Company.

d) Retained Earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends
or other distributions paid to shareholders. Retained earnings is a free reserve available to the Company.

e) Capital Redemption Reserve

In accordance with Section 69 of the Companies Act, 2013, the Company has created capital redemption reserve equal to
the nominal value of the shares bought back as an appropriation from the General Reserve.

f) Share Options Outstanding Reserve

Share Options Outstanding Reserve is created as required by Ind AS 102, ''Share Based Payments'' on the employee stock
option scheme operated by the Company for its eligible employees. The share-based payment reserve is used to recognise
the value of equity-settled share-based payments provided to employees, including key management personnel, as part
of their remuneration.

* includes Compensation Expenses under ESOP Scheme Rs. 308.84 Lakhs (PY - Nil). Refer note 34.2

34.1 As per Ind AS 19 “Employee Benefits”, the disclosures of employee benefits as defined in the Indian Accounting Standard
are given below:

A. Defined Contribution Plan

The Company''s Contribution to provident fund and pension fund is considered as Defined Contribution Plan and is
recognised as expenses for the year.

B. Defined Benefit Plan

The Company operates a Defined Benefit Gratuity plan with approved Gratuity Fund and contributions are made to
a separately administered approved Gratuity Fund. The present value of obligation is determined based on actuarial
valuation using the Projected Unit Credit method, which recognizes each period of service as giving rise to additional unit
of employee benefit entitlement and measures each unit separately to build up the final obligation.

Note - 41: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Overview

The Company’s Risk Management framework encompasses practices relating to the identification, analysis, evaluation,
treatment, mitigation and monitoring of the strategic, external and operational controls risks to achieving the Company’s
business objectives. It seeks to minimize the adverse impact of these risks, thus enabling the Company to leverage market
opportunities effectively and enhance its long-term competitive advantage. The focus of risk management is to assess risks
and deploy mitigation measures.

The Company''s activities expose it to variety of financial risks namely market risk, credit risk and liquidity risk. The Company
has various financial assets such as deposits, trade and other receivables and cash and bank balances directly related to the
business operations. The Company''s principal financial liabilities comprise of trade and other payables. The Company''s senior
management''s focus is to foresee the unpredictability and minimize potential adverse effects on the Company''s financial
performance. The Company''s overall risk management procedures to minimize the potential adverse effects of financial
market on the Company''s performance are outlined hereunder:

The Company''s Board of Directors have overall responsibility for the establishment and oversight of the Company''s risk
management framework.

The Company''s risk management is carried out by the management in consultation with the Board of Directors and the Risk
Management Committee. They provide principles for overall risk management, as well as policies covering specific risk areas.

The note explains the sources of risk which the entity is exposed to and how the entity manages the risk.

(A) Credit Risk:

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises principally from the Company''s receivables from customers and from its financial
activities including deposits with banks and other financial instruments. The Company establishes an impairment
allowance based on Expected Credit Loss model that represents its estimate of incurred losses in respect of trade and
other receivables, advances and investments.

(i) Trade Receivables:

The Company extends credits to customers in normal course of the business. The Company considers the factors
such as credit track record in the market of each customer and past dealings for extension of credit to the customers.
The Company monitors the payment track record of each customer and outstanding customer receivables are
regularly monitored. The Company evaluates the concentration of risk with respect to trade receivables as low, as
its customers are located at several jurisdictions and industries and operate in large independent markets. The
Company also takes advances and security deposits from customers which mitigate the credit risk to an extent.

The average credit period taken on sales of goods is 30 to 60 days. Generally, no interest has been charged on
the receivables. Allowances against doubtful debts are recognised against trade receivables based on estimated
irrecoverable amounts determined by reference to past default experience of the counterparty and an analysis of the
counterparty''s current financial position.

Before accepting any new customer, the Company uses an internal credit system to assess the potential customer''s
credit quality and defines credit limit of customer. Limits attributed to customers are reviewed periodically. There
are no customers who represent more than 5 per cent of total net revenue from operations.

The Company generally does not hold any collateral or other credit enhancements over any of its trade receivables
excepting a small amount in the nature of security deposits from its dealers, nor does it have a legal right of offset
against any amounts owed by the Company to the counterparty.

Expected Credit Loss (ECL):

The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables
based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted
for internal and external information. The expected credit loss allowance is based on the ageing of the days the
receivables are due and the rates as per the Company’s provision matrix.

(i) Cash and cash equivalents and short-term investments:

The Company considers factors such as track record, size of institution, market reputation and service standard to
select the banks with which deposits are maintained. The Company does not maintain significant deposit balances
other than those required for its day to day operations. Credit risk on cash and cash equivalents is limited as these
are generally held or invested in deposits with banks and financial institutions with good credit ratings.

(B) Liquidity Risk:

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The
Company’s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due
without incurring unacceptable losses. In doing this, management considers both normal and stressed conditions.

The Company''s objective is to maintain optimum levels of liquidity to meet its cash and collateral requirements. The
Company relies on a mix of borrowings, capital and excess operating cash flows to meet its needs for funds. The current
committed lines of credit are sufficient to meet its short to medium term expansion needs. The Company monitors rolling
forecasts of its liquidity requirements to ensure that it has sufficient cash to meet operational needs while maintaining
sufficient headroom on its undrawn committed borrowing facilities so that it does not breach borrowing limits.

The details of the contractual maturities of significant liabilities are shown below

(C) Market Risk:

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in market prices. Market risk comprises three types of risks: foreign currency risk, interest risk and other price risk such
as commodity risk.

(i) Foreign Currency Risk:

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of
changes in foreign exchange rates and arises where transactions are done in foreign currencies. It arises mainly
where receivables and payables exist due to transactions entered in foreign currencies. The Company evaluates
exchange rate exposure arising from foreign currency transactions and follows approved policy parameters utilizing
forward foreign exchange contracts whenever felt necessary. The Company does not enter into financial instrument
transactions for trading or speculative purpose.

The Company transacts business primarily in Indian Rupees, USD, Euro and GBP. The Company has foreign
currency trade payables and receivables and is therefore, exposed to foreign exchange risk. Certain transactions
of the Company act as a natural hedge as a portion of both assets and liabilities are denominated in similar foreign
currencies. For the remaining exposure to foreign exchange risk, the Company adopts a policy of selective hedging
based on risk perception of the management.

(ii) Interest Rate Risk:

The Company''s exposure to the risk of changes in market interest rates relates primarily to long term debts having
floating rate of interest. Its objective in managing its interest rate risk is to ensure that it always maintains sufficient
headroom to cover interest payment from anticipated cashflows which are regularly reviewed by the Board. However,
the risk is very low due to negligible borrowings by the Company.

The Company’s non-current borrowings from banks are Nil as at 31^st March, 2025 and 31^st March, 2024 respectively.
Other non-current financial liabilities have fixed rate of interest where the risk of changes in the interest rates is
almost nil. As a result, the sensitivity affecting the profit before tax due to the Company’s exposure to the risk of
changes in market interest rates is almost nil.

(iii) Commodity Risk:

The Company is exposed to the movement in the price of key raw materials and other traded goods in the domestic
and international markets. The Company has in place policies to manage exposure to fluctuation in prices of key
raw materials used in operations. The Company enters into contracts for procurement of raw materials and traded
goods, most of the transactions are short term fixed price contracts and a few transactions are long term fixed
price contracts.

Capital Management:

The Company manages its capital to be able to continue as a going concern while maximising the returns to
shareholders through optimisation of the debt and equity balances. The capital structure consists of debt which
includes the borrowings as disclosed in Note 23, cash and cash equivalents and current investments and equity
attributable to equity holders of the Company, comprising issued share capital, reserves and retained earnings as
disclosed in the Statement of Changes in Equity. For the purpose of calculating gearing ratio, debt is defined as non
current and current borrowings (excluding derivatives). Equity includes all capital and reserves of the Company
attributable to equity holders of the Company. The Company is not subject to externally imposed capital requirements.
The Board reviews the capital structure and cost of capital on an annual basis but has not set specific targets for
gearing ratios. The risks associated with each class of capital are also considered as part of the risk reviews presented
to the Audit Committee and the Board of Directors.

Notes:

43.1 All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy,
described as follows, based on the lowest level input that is insignificant to the fair value measurements as a whole.

Level 1 : quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2 : valuation techniques for which the lowest level inputs that has a significant effect on the fair value measurement
are observable, either directly or indirectly.

Level 3 : valuation techniques for which the lowest level input which has a significant effect on fair value measurement
is not based on observable market data.

There have been no transfers between Level 2 and Level 3 during the period.

43.2 The management assessed that fair value of short term financial assets and liabilities significantly approximate their
carrying amounts largely due to the short term maturities of these instruments. The fair value of the financial assets
and liabilities is included at the amounts at which the instrument could be exchanged in a current transaction between
willing parties, other than in a forced or liquidation sale.

43.3 The Company determines fair values of financial assets or liabilities by discounting the contractual cash inflows /
outflows using prevailing interest rates of financial instruments with similar terms. The initial measurement of financial
assets and financial liabilities is at fair value.

43.4 The fair value of investments in mutual funds is determined using net assets value of the funds. Further, the subsequent
measurements of all assets and liabilities (other than investments in mutual funds) is at amortised cost, using effective
interest rate method.

43.5 The following methods and assumptions were used to estimate the fair values:

- The fair value of the Company’s interest bearing borrowings are determined using discount rate that reflects the
entity’s discount rate at the end of the reporting period. The own non-performance risk as at the reporting period
is assessed to be insignificant.

- The fair value of unquoted instruments and other financial assets and liabilities is estimated by discounting future
cash flows using rates currently applicable for debt on similar terms, credit risk and remaining maturities.

Note - 49. NOTE ON CORPORATE SOCIAL RESPONSIBILITY :

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of
its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities.
The areas for CSR activities are community healthcare, free food, sanitation & hygiene, environmental sustainability and
education. A CSR committee has been formed by the Company as per the Act. The funds were primarily utilized through the
year on these activities which are specified in Schedule VII of the Companies Act, 2013

Note-51. OPERATING SEGMENTS:

The Company operates mainly in manufacturing of Building Products and all other activities are incidental thereto, which
have similar risk and return. Accordingly, there are no separate reportable Segments as required under IND AS 108 "Operating
Segment". The Revenue from transactions with the single external customer amounting to 10% or more of the Company''s
Revenue is Nil.

Note-52.

In the opinion of the Management, current assets have a value on realisation in the ordinary course of business at least equal
to the amount at which they are stated except where indicated otherwise.

Note - 54. ADDITIONAL REGULATORY INFORMATION

The following additional disclosures are made pursuant to notification of Ministry of Corporate Affairs dated 24^th March 2021.

1. Title deeds of Immovable Properties

The title deeds of all the immovable properties(other than properties where the Company is the lessee and the lease
agreements are duly executed in favour of the lessee) are held in the name of the company itself.

2. Revaluation of Property, Plant & Equipment

The company has not carried out revaluation of items of Property, Plant & Equipment during the year and accordingly
the disclosure as to whether the revaluation is based on the valuation by a registered valuer as defined under rule 2 of the
Companies (Registered Valuers and Valuation) Rules, 2017 is not applicable.

3. Loans / Advances in the nature of loans to Promoters, Directors, KMP''s and Related Parties

The Company has not made any loans or advances in the nature of loans to Promoters, Directors, KMP''s and the related
parties which are outstanding as at the end of the current year and previous year.

4. Details of Benami Property held

No proceedings have been initiated or pending against the company for holding any benami property under the Benami
Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

5. Wilful Defaulter

None of the banks, financial institutions or other lenders from whom the company has borrowed funds has declared the
company as a wilful defaulter at any time during the current year or in previous year.

6. Relationship with Struck off Companies

The company has not undertaken any transactions with companies struck off under section 248 of the Companies Act
2013 or section 560 of Companies Act 1956 during the current year or in previous year.

7. Registration of charges or satisfaction with Registrar of Companies (ROC)

All the charges or satisfaction of which is required to be registered with Registrar of Companies(ROC) have been duly
registered within the statutory time limit provided under the provisions of Companies Act 2013 and rules made thereunder.

8. Compliance with number of layers of companies

The company does not have investment in subsidiary companies and accordingly the disclosure as to whether the
company has complied with the number of layers of companies prescribed under clause (87) of section 2 of the Act read
with the Companies (Restriction on number of Layers) Rules, 2017 is not applicable.

9. Compliance with Approved Scheme of Arrangements

No scheme of compromise or arrangement has been proposed between the company & its members or the company & its
creditors under section 230 of the companies act 2013("The Act") and accordingly the disclosure as to whether the scheme
of compromise or arrangement has been approved or not by the competent authority in terms of provisions of sections
230 to 237 of the act is not applicable.

10. Borrowing from Banks and Financial Institutions for Specific Purpose

All the borrowings from banks and financial institutions have been used for the specific purposes for which they have
been obtained.

11. Utilisation of Borrowed funds and Share Premium

a) The company has not advanced or loaned or invested funds to any other persons or entities, including foreign
entities (Intermediaries) with the understanding, whether recorded in writing or otherwise, that the Intermediary
shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the company (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the
Ultimate Beneficiaries.

b) The company has not received any fund from any persons or entities, including foreign entities (Funding Party) with
the understanding , whether recorded in writing or otherwise, that the company shall directly or indirectly lend or
invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate
Beneficiaries) or provide any guarantee, security or the like on behalf o

---

Mar 31, 2024

a. Fair value of the above investment property as at 31^st March, 2024 is '' 161.02 lakhs (31^st March, 2023 : '' Nil) based on external valuation. The fair valuation is based on current prices in the active market for similar properties. The main inputs used are quantum, area, location, demand, age of building and trend of fair market rent in village Bhiwadi area.The fair value of investment property is based on the valuation by a registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017.

b. The Company has not earned any rental income on the above properties.

7.1(D) The Company acquired share capital worth '' 806.00 Lakhs for 26% stake in M/s. Milo Tile LLP (“Milo”) in FY 2018-19. During FY 2022-23 Milo had been unable to maintain product quality parameters which has forced the Company to discontinue procuring tiles from Milo, and raise claims based on inferior quality products supplied by Milo. As a matter of abundant caution, the Company has fully provided impairment of its investment in Milo (net of payables) to the tune of '' 655.57 Lakhs ('' 500.00 Lakhs in FY 2022-23 and '' 155.57 Lakhs in FY 2023-24). The same is disclosed as an “Exceptional Item” in the Statement of Profit & Loss. Without prejudice to the above, the Company is taking all necessary steps for recovery of its Equity investment including legal recourse.

Recently, the Hon''ble High Court of Gujarat has appointed an arbitrator to adjudicate the case and the first hearing in the matter is yet to be held.

18.2 Terms / Rights attached to Equity Share :

The Company has only one class of Equity Shares having a par value of '' 5/- per share. Each holder of Equity is entitled to one vote per share and each equity share carries an equal right to dividend. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of Interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Nature and purpose of Other Reserves

(a) Securities Premium

Securities Premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

(b) General Reserve

General Reserve is created out of profit after tax earned by the Company by way of transfer from surplus in the statement of profit and loss. The Company can use this Reserve for payment of dividend and issue of fully paid-up shares. As General Reserve is created by transfer of one component of equity to another and is not an item of other comprehensive income, items included in the General Reserve will not be subesquently reclassified to statement of profit and loss.

(c) Retained Earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings is a free reserve available to the Company.

23.1 Primary Security

Cash Credit facilities from State Bank of India (SBI) are secured by exclusive hypothecation over entire Current Assets of the Company comprising stock of raw materials, work in process, finished goods, stock in trade, stores & spares and receivables, both present and future.

23.2 Rate of interest on various cash credit facilities from State Bank of India chargeable at 0.15% above 6 months MCLR (Present effective rate 8.70% p.a.) and rate of interest on export packing credit faciltiy is chargeable at ARR 2 bps for 90 days.

23.3 Rate of interest on overdraft working capital facility from HDFC Bank Ltd. is 9.43% p.a..

23.4 Quarterly statements of current assets filed by the company with banks are in agreement with the books of account.

34.1 As per Ind AS 19 “Employee Benefits”, the disclosures of employee benefits as defined in the Indian Accounting Standard are given below:

A. Defined Contribution Plan :

The Company''s Contribution to provident fund and pension fund is considered as Defined Contribution Plan and is recognised as expenses for the year.

B. Defined Benefit Plan :

The Company operates a Defined Benefit Gratuity plan with approved Gratuity Fund and contributions are made to a separately administered approved Gratuity Fund. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation for leave encashment is recognized as expense for the year.

Note - 41 : FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES Overview :

The Company''s Risk Management framework encompasses practices relating to the identification, analysis, evaluation, treatment, mitigation and monitoring of the strategic, external and operational controls risks to achieving the Company''s business objectives. It seeks to minimize the adverse impact of these risks, thus enabling the Company to leverage market opportunities effectively and enhance its long-term competitive advantage. The focus of risk management is to assess risks and deploy mitigation measures.

The Company''s activities expose it to variety of financial risks namely market risk, credit risk and liquidity risk. The Company has various financial assets such as deposits, trade and other receivables and cash and bank balances directly related to the business operations. The Company''s principal financial liabilities comprise of trade and other payables. The Company''s senior management''s focus is to foresee the unpredictability and minimize potential adverse effects on the Company''s financial performance. The Company''s overall risk management procedures to minimize the potential adverse effects of financial market on the Company''s performance are outlined hereunder:

The Company''s Board of Directors have overall responsibility for the establishment and oversight of the Company''s risk management framework.

The Company''s risk management is carried out by the management in consultation with the Board of Directors and the Risk Management Committee. They provide principles for overall risk management, as well as policies covering specific risk areas.

The note explains the sources of risk which the entity is exposed to and how the entity manages the risk.

(A) Credit Risk :

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and from its financial activities including deposits with banks and other financial instruments. The Company establishes an impairment allowance based on Expected Credit Loss model that represents its estimate of incurred losses in respect of trade and other receivables, advances and investments.

(i) Trade Receivables :

The Company extends credits to customers in normal course of the business. The Company considers the factors such as credit track record in the market of each customer and past dealings for extension of credit to the customers. The Company monitors the payment track record of each customer and outstanding customer receivables are regularly monitored. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located at several jurisdictions and industries and operate in large independent markets. The Company also takes advances and security deposits from customers which mitigate the credit risk to an extent.

The average credit period taken on sales of goods is 30 to 60 days. Generally, no interest has been charged on the receivables. Allowances against doubtful debts are recognised against trade receivables based on estimated irrecoverable amounts determined by reference to past default experience of the counterparty and an analysis of the counterparty''s current financial position.

Before accepting any new customer, the Company uses an internal credit system to assess the potential customer''s credit quality and defines credit limit of customer. Limits attributed to customers are reviewed periodically. There are no customers who represent more than 5 per cent of total net revenue from operations.

The Company generally does not hold any collateral or other credit enhancements over any of its trade receivables excepting a small amount in the nature of security deposits from its dealers, nor does it have a legal right of offset against any amounts owed by the Company to the counterparty.

Expected Credit Loss (ECL) :

The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for internal and external information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as per the Company''s provision matrix.

(ii) Cash and cash equivalents and short-term investments :

The Company considers factors such as track record, size of institution, market reputation and service standard to select the banks with which deposits are maintained. The Company does not maintain significant deposit balances other than those required for its day to day operations. Credit risk on cash and cash equivalents is limited as these are generally held or invested in deposits with banks and financial institutions with good credit ratings.

(B) Liquidity Risk :

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company''s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses. In doing this, management considers both normal and stressed conditions.

The Company''s objective is to maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company relies on a mix of borrowings, capital and excess operating cash flows to meet its needs for funds. The current committed lines of credit are sufficient to meet its short to medium term expansion needs. The Company monitors rolling forecasts of its liquidity requirements to ensure that it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities so that it does not breach borrowing limits.

(C) Market Risk :

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risks : foreign currency risk, interest risk and other price risk such as commodity risk.

(i) Foreign Currency Risk :

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates and arises where transactions are done in foreign currencies. It arises mainly where receivables and payables exist due to transactions entered in foreign currencies. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows approved policy parameters utilizing forward foreign exchange contracts whenever felt necessary. The Company does not enter into financial instrument transactions for trading or speculative purpose.

The Company transacts business primarily in Indian Rupees, USD, Euro and NPR. The Company has foreign currency trade payables and receivables and is therefore, exposed to foreign exchange risk. Certain transactions of the Company act as a natural hedge as a portion of both assets and liabilities are denominated in similar foreign currencies. For the remaining exposure to foreign exchange risk, the Company adopts a policy of selective hedging based on risk perception of the management.

Sensitivity Analysis :

The following table demonstrates the sensitivity of profit and equity in USD, Euro and NPR to the Indian Rupee with all other variables held constant. The impact on the Company''s profit before tax and other comprehensive income due to changes in the fair value of monetary assets and liabilities is given below:

This is mainly attributable to the exposure outstanding on foreign currency receivables and payables in the Company at the end of each reporting period.

(ii) Interest Rate Risk :

The Company''s exposure to the risk of changes in market interest rates relates primarily to long term debts having floating rate of interest. Its objective in managing its interest rate risk is to ensure that it always maintains sufficient headroom to cover interest payment from anticipated cashflows which are regularly reviewed by the Board. However, the risk is very low due to negligible borrowings by the Company.

The Company''s non-current borrowings from banks are Nil as at 31^st March, 2024 and 31^st March, 2023 respectively. Other non-current financial liabilities have fixed rate of interest where the risk of changes in the interest rates is almost nil. As a result, the sensitivity affecting the profit before tax due to the Company''s exposure to the risk of changes in market interest rates is almost nil.

(iii) Commodity Risk :

The Company is exposed to the movement in the price of key raw materials and other traded goods in the domestic and international markets. The Company has in place policies to manage exposure to fluctuation in prices of key raw materials used in operations. The Company enters into contracts for procurement of raw materials and traded goods, most of the transactions are short term fixed price contracts and a few transactions are long term fixed price contracts.

Capital Management :

The Company manages its capital to be able to continue as a going concern while maximising the returns to shareholders through optimisation of the debt and equity balances. The capital structure consists of debt which includes the borrowings as disclosed in Note 23, cash and cash equivalents and current investments and equity attributable to equity holders of the Company, comprising issued share capital, reserves and retained earnings as disclosed in the Statement of Changes in Equity. For the purpose of calculating gearing ratio, debt is defined as non current and current borrowings (excluding derivatives). Equity includes all capital and reserves of the Company attributable to equity holders of the Company. The Company is not subject to externally imposed capital requirements. The Board reviews the capital structure and cost of capital on an annual basis but has not set specific targets for gearing ratios. The risks associated with each class of capital are also considered as part of the risk reviews presented to the Audit Committee and the Board of Directors.

43.1 All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is insignificant to the fair value measurements as a whole.

Level 1 : quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2 : valuation techniques for which the lowest level inputs that has a significant effect on the fair value measurement are

observable, either directly or indirectly.

Level 3 : valuation techniques for which the lowest level input which has a significant effect on fair value measurement is not based

on observable market data.

There have been no transfers between Level 2 and Level 3 during the period.

43.2 The management assessed that fair value of short term financial assets and liabilities significantly approximate their carrying amounts largely due to the short term maturities of these instruments. The fair value of the financial assets and liabilities is included at the amounts at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

43.3 The Company determines fair values of financial assets or liabilities by discounting the contractual cash inflows / outflows using prevailing interest rates of financial instruments with similar terms. The initial measurement of financial assets and financial liabilities is at fair value.

43.4 The fair value of investments in mutual funds is determined using net assets value of the funds. Further, the subsequent measurements of all assets and liabilities (other than investments in mutual funds) is at amortised cost, using effective interest rate method.

43.5 The following methods and assumptions were used to estimate the fair values :

- The fair value of the Company''s interest bearing borrowings are determined using discount rate that reflects the entity''s discount rate at the end of the reporting period. The own non-performance risk as at the reporting period is assessed to be insignificant.

- The fair value of unquoted instruments and other financial assets and liabilities is estimated by discounting future cash flows using rates currently applicable for debt on similar terms, credit risk and remaining maturities.

Note - 47. COMMITMENTS AND CONTINGENCIES			('' in lakhs)
	Particulars	31st March, 2024	31st March, 2023
(a)	Commitments
	Estimated Amount of contracts remaining to be executed on capital account and not provided for (Net of Advances)	538.06	3,539.64
(b)	Contingent Liabilities Claims against the Company not acknowledged as debts (Net of Payments) Letters of Credit (Foreign & Inland) opened and guarantees given (Net)	204.97 588.92	79.44 674.86

Note - 49. NOTE ON CORPORATE SOCIAL RESPONSIBILITY

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are community healthcare, free food, sanitation & hygiene, environmental sustainability and education. A CSR committee has been formed by the Company as per the Act. The funds were primarily utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013

Note - 51. OPERATING SEGMENTS

The Company operates mainly in manufacturing of Building Products and all other activities are incidental thereto, which have similar risk and return. Accordingly, there are no separate reportable Segments as required under Ind AS 108 “Operating Segment". The Revenue from transactions with the single external customer amounting to 10% or more of the Company''s Revenue is Nil.

Note - 52.

In the opinion of the Management, current assets have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated except where indicated otherwise.

Note - 54. ADDITIONAL REGULATORY INFORMATION

The following additional disclosures are made pursuant to notification of Ministry of Corporate Affairs dated 24^th March, 2021.

1. Title deeds of Immovable Properties

The title deeds of all the immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) are held in the name of the company itself.

2. Revaluation of Property, Plant & Equipment

The company has not carried out revaluation of items of Property, Plant & Equipment during the year and accordingly the disclosure as to whether the revaluation is based on the valuation by a registered valuer as defined under rule 2 of the Companies (Registered Valuers and Valuation) Rules, 2017 is not applicable.

3. Loans / Advances in the nature of loans to Promoters, Directors, KMP’s and Related Parties

The Company has not made any loans or advances in the nature of loans to Promoters, Directors, KMP''s and the related parties which are outstanding as at the end of the current year and previous year.

4. Details of Benami Property held

No proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

5. Wilful Defaulter

None of the banks, financial institutions or other lenders from whom the company has borrowed funds has declared the company as a wilful defaulter at any time during the current year or in previous year.

6. Relationship with Struck off Companies

The company has not undertaken any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956 during the current year or in previous year.

7. Registration of charges or satisfaction with Registrar of Companies (ROC)

All the charges or satisfaction of which is required to be registered with Registrar of Companies (ROC) have been duly registered within the statutory time limit provided under the provisions of Companies Act, 2013 and rules made thereunder.

8. Compliance with number of layers of companies

The company does not have investment in subsidiary companies and accordingly the disclosure as to whether the company has complied with the number of layers of companies prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017 is not applicable.

9. Compliance with Approved Scheme of Arrangements

No scheme of compromise or arrangement has been proposed between the company & its members or the company & its creditors under section 230 of the Companies Act, 2013 (“The Act”) and accordingly the disclosure as to whether the scheme of compromise or arrangement has been approved or not by the competent authority in terms of provisions of sections 230 to 237 of the act is not applicable.

10. Borrowing from Banks and Financial Institutions for Specific Purpose

All the borrowings from banks and financial institutions have been used for the specific purposes for which they have been obtained.

11. Utilisation of Borrowed funds and Share Premium

a) The Company has not advanced or loaned or invested funds to any other persons or entities, including foreign entities (Intermediaries) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

b) The company has not received any fund from any persons or entities, including foreign entities (Funding Party) with the understanding, whether recorded in writing or otherwise, that the Company shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

12. Borrowings on the basis of security of Current Assets

The Company has working capital facilities from banks on the basis of security of current assets & are submitting periodically Financial Information as per the terms & conditions of sanction letters.There are no material discrepancies in the amount of current assets between quarterly Financial Information and books of accounts.

13. There were no transactions which have not been recorded in the books of account, have been surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961 (43 of 1961) during the year.

Note - 55.

Consequent to the introduction of Goods and Service Tax (GST) with effect from 1^st July, 2017, Central Excise, Value Added Tax (VAT) etc.

have been subsumed into GST. In accordance with relevant Indian Accounting Standard and Schedule III to the Companies Act, 2013, unlike

Excise Duties, levies like GST, VAT etc. are not part of Revenue from Operations. Revenue for the year ended 31^st March, 2024 and

31^st March, 2023 are net of GST. The following additional information is being provided to facilitate such understanding.

Note - 56.

Previous period figures have been regrouped, re-classified and re-arranged wherever considered necessary to confirm to the current year''s classification.

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Mar 31, 2023

Nature and purpose of Other Reserves

(a) Securities Premium

Securities Premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

(b) General Reserve

General Reserve is created out of profit after tax earned by the Company by way of transfer from surplus in the statement of profit and loss. The Company can use this Reserve for payment of dividend and issue of fully paid-up shares. As General Reserve is created by transfer of one component of equity to another and is not an item of other comprehensive income, items included in the General Reserve will not be subesquently reclassified to statement of profit and loss.

22.1 Primary Security

Cash Credit facilities from State Bank of India (SBI) are secured by exclusive hypothecation over entire Current Assets of the Company comprising stock of raw materials, work in process, finished goods, stock in trade, stores & spares and receivables, both present and future.

22.2 Rate of interest on various cash credit facilities from State Bank of India chargeable at 0.15% above 6 months MCLR (Present effective rate 8.55% p.a.) and rate of interest on export packing credit faciltiy is chargeable at ARR 2 bps for 90 days.

22.3 Rate of interest on overdraft working capital facility from HDFC Bank Ltd. is 9.20% p.a.

22.4 Quarterly statements of current assets filed by the company with banks are in agreement with the books of account.

33.1 As per Ind AS 19 “Employee Benefits”, the disclosures of employee benefits as defined in the Indian Accounting Standard are given below:

Defined Contribution Plan :

The Company''s Contribution to provident fund and pension fund is considered as Defined Contribution Plan and is recognised as expenses for the year.

Defined Benefit Plan :

The Company operates a Defined Benefit Gratuity plan with approved Gratuity Fund and contributions are made to a separately administered approved Gratuity Fund. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation for leave encashment is recognized as expense for the year.

The Methods and types of assumptions used in preparing the sensitivity analysis did not change compared to prior period.

Funding arrangements and funding policy :

Gratuity liability is funded whereas leave Benefits Liability is not funded. There are no minimum funding requirements for Leave benefits plans in India and there is no compulsion on the part of the Company to fully pre fund the liability. The Company has purchased an insurance policy to partly provide for payment of gratuity to the employees. The trustees of the plan also make investments in Central / State Govt. securities, high quality Corporate bonds, special deposit scheme etc., as per rules and regulations. Every year, the actuary carries out a funding valuation based on the latest employee data provided by the Company. Any deficit in the assets arising as a result of such valuation is funded by the Company.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Company''s policy for plan assets management.

Note - 40 : FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES Overview :

The Company''s Risk Management framework encompasses practices relating to the identification, analysis, evaluation, treatment, mitigation and monitoring of the strategic, external and operational controls risks to achieving the Company''s business objectives. It seeks to minimize the adverse impact of these risks, thus enabling the Company to leverage market opportunities effectively and enhance its long-term competitive advantage. The focus of risk management is to assess risks and deploy mitigation measures.

The Company''s activities expose it to variety of financial risks namely market risk, credit risk and liquidity risk. The Company has various financial assets such as deposits, trade and other receivables and cash and bank balances directly related to the business operations. The Company''s principal financial liabilities comprise of trade and other payables. The Company''s senior management''s focus is to foresee the unpredictability and minimize potential adverse effects on the Company''s financial performance. The Company''s overall risk management procedures to minimize the potential adverse effects of financial market on the Company''s performance are outlined hereunder:

The Company''s Board of Directors have overall responsibility for the establishment and oversight of the Company''s risk management framework.

The Company''s risk management is carried out by the management in consultation with the Board of Directors and the Risk Management Committee. They provide principles for overall risk management, as well as policies covering specific risk areas.

The note explains the sources of risk which the entity is exposed to and how the entity manages the risk.

(A) Credit Risk :

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and from its financial activities including deposits with banks and other financial instruments. The Company establishes an impairment allowance based on Expected Credit Loss model that represents its estimate of incurred losses in respect of trade and other receivables, advances and investments.

(i) Trade Receivables :

The Company extends credits to customers in normal course of the business. The Company considers the factors such as credit track record in the market of each customer and past dealings for extension of credit to the customers. The Company monitors the payment track record of each customer and outstanding customer receivables are regularly monitored. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located at several jurisdictions and industries and operate in large independent markets. The Company also takes advances and security deposits from customers which mitigate the credit risk to an extent.

The average credit period taken on sales of goods is 30 to 60 days. Generally, no interest has been charged on the receivables. Allowances against doubtful debts are recognised against trade receivables based on estimated irrecoverable amounts determined by reference to past default experience of the counterparty and an analysis of the counterparty''s current financial position.

Before accepting any new customer, the Company uses an internal credit system to assess the potential customer''s credit quality and defines credit limit of customer. Limits attributed to customers are reviewed periodically. There are no customers who represent more than 5 per cent of total net revenue from operations.

The Company generally does not hold any collateral or other credit enhancements over any of its trade receivables excepting a small amount in the nature of security deposits from its dealers, nor does it have a legal right of offset against any amounts owed by the Company to the counterparty.

Expected Credit Loss (ECL) :

The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for internal and external information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as per the Company''s provision matrix.

(ii) Cash and cash equivalents and short-term investments :

The Company considers factors such as track record, size of institution, market reputation and service standard to select the banks with which deposits are maintained. The Company does not maintain significant deposit balances other than those required for its day to day operations. Credit risk on cash and cash equivalents is limited as these are generally held or invested in deposits with banks and financial institutions with good credit ratings.

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company''s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses. In doing this, management considers both normal and stressed conditions.

The Company''s objective is to maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company relies on a mix of borrowings, capital and excess operating cash flows to meet its needs for funds. The current committed lines of credit are sufficient to meet its short to medium term expansion needs. The Company monitors rolling forecasts of its liquidity requirements to ensure that it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities so that it does not breach borrowing limits.

The table below provides undiscounted cash flows towards non-derivative financial assets / (liabilities) into relevant maturity based on the remaining period at the Balance Sheet date to the contractual maturity date and where applicable, their effective interest rates.

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risks : foreign currency risk, interest risk and other price risk such as commodity risk.

(i) Foreign Currency Risk :

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates and arises where transactions are done in foreign currencies. It arises mainly where receivables and payables exist due to transactions entered in foreign currencies. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows approved policy parameters utilizing forward foreign exchange contracts whenever felt necessary. The Company does not enter into financial instrument transactions for trading or speculative purpose.

The Company transacts business primarily in Indian Rupees, USD, Euro and GBP. The Company has foreign currency trade payables and receivables and is therefore, exposed to foreign exchange risk. Certain transactions of the Company act as a natural hedge as a portion of both assets and liabilities are denominated in similar foreign currencies. For the remaining exposure to foreign exchange risk, the Company adopts a policy of selective hedging based on risk perception of the management.

This is mainly attributable to the exposure outstanding on foreign currency receivables and payables in the Company at the end of each reporting period.

(ii) Interest Rate Risk :

The Company''s exposure to the risk of changes in market interest rates relates primarily to long term debts having floating rate of interest. Its objective in managing its interest rate risk is to ensure that it always maintains sufficient headroom to cover interest payment from anticipated cashflows which are regularly reviewed by the Board. However, the risk is very low due to negligible borrowings by the Company.

The Company''s non-current borrowings from banks are Nil as at 31^st March, 2023 and 31^st March, 2022 respectively. Other non-current financial liabilities have fixed rate of interest where the risk of changes in the interest rates is almost nil. As a result, the sensitivity affecting the profit before tax due to the Company''s exposure to the risk of changes in market interest rates is almost nil.

(iii) Commodity Risk :

The Company is exposed to the movement in the price of key raw materials and other traded goods in the domestic and international markets. The Company has in place policies to manage exposure to fluctuation in prices of key raw materials used in operations. The Company enters into contracts for procurement of raw materials and traded goods, most of the transactions are short term fixed price contracts and a few transactions are long term fixed price contracts.

Capital Management :

The Company manages its capital to be able to continue as a going concern while maximising the returns to shareholders through optimisation of the debt and equity balances. The capital structure consists of debt which includes the borrowings as disclosed in Note No. 22, cash and cash equivalents and current investments and equity attributable to equity holders of the Company, comprising issued share capital, reserves and retained earnings as disclosed in the Statement of Changes in Equity. For the purpose of calculating gearing ratio, debt is defined as non current and current borrowings (excluding derivatives). Equity includes all capital and reserves of the Company attributable to equity holders of the Company. The Company is not subject to externally imposed capital requirements. The Board reviews the capital structure and cost of capital on an annual basis but has not set specific targets for gearing ratios. The risks associated with each class of capital are also considered as part of the risk reviews presented to the Audit Committee and the Board of Directors.

42.1 All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is insignificant to the fair value measurements as a whole.

Level 1 : quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2 : valuation techniques for which the lowest level inputs that has a significant effect on the fair value measurement are observable, either directly or indirectly.

Level 3 : valuation techniques for which the lowest level input which has a significant effect on fair value measurement is not based

on observable market data.

There have been no transfers between Level 2 and Level 3 during the period.

42.2 The management assessed that fair value of short term financial assets and liabilities significantly approximate their carrying amounts largely due to the short term maturities of these instruments. The fair value of the financial assets and liabilities is included at the amounts at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

42.3 The Company determines fair values of financial assets or liabilities by discounting the contractual cash inflows / outflows using prevailing interest rates of financial instruments with similar terms. The initial measurement of financial assets and financial liabilities is at fair value.

42.4 The fair value of investments in mutual funds is determined using net assets value of the funds. Further, the subsequent measurements of all assets and liabilities (other than investments in mutual funds) is at amortised cost, using effective interest rate method.

42.5 The following methods and assumptions were used to estimate the fair values :

- The fair value of the Company''s interest bearing borrowings are determined using discount rate that reflects the entity''s discount rate at the end of the reporting period. The own non-performance risk as at the reporting period is assessed to be insignificant.

- The fair value of unquoted instruments and other financial assets and liabilities is estimated by discounting future cash flows using rates currently applicable for debt on similar terms, credit risk and remaining maturities.

Note - 45. COMMITMENTS AND CONTINGENCIES (a) Leases The Company has adopted Ind AS 116, effective from annual reporting period beginning 1st April, 2019 and applied the Standard to its leases, using the modified restrospective method, with the cumulative effect of initially applying the Standard, recognised on the date of initial application (1st April, 2019). (i) Changes in the carrying value of right-of-use assets : ('' in lakhs)
Particulars	Category of Right-of-use asset
	Land	Buildings
Balance as at 1st April, 2021	8.66	1,281.68
Additions during the year	-	1,028.51
Termination during the year	-	(110.13)
Depreciation	(0.60)	(670.51)
Remeasurement of lease liability due to lease modifications	-	(18.25)
Balance as at 31st March, 2022	8.06	1,511.30
Additions during the year	-	1,727.76
Termination during the year	-	(85.31)
Depreciation	(0.59)	(693.09)
Balance as at 31st March, 2023	7.47	2,460.66

Note - 47. NOTE ON CORPORATE SOCIAL RESPONSIBILITY

In accordance with the provisions of Section 135 of the Companies Act, 2013, Schedule VII and Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended, the Board of Directors of the Company had constituted a Corporate Social Responsibility (CSR) Committee. In terms of the provisions of the said Act, the Company was required to spend '' 298.36 lakhs (previous year '' 289.56 Lakhs) towards CSR activities during the year ended 31^st March, 2023. The Company has spent following amounts towards CSR activities for the benefit of general public and in the neighbourhood of the manufacturing facilities of the Company.

Note - 49. DEFICIT DUE TO SURRENDER OF EXEMPTION GRANTED TO PF TRUST

1 The Company was granted Exemption for certain employees under Para 27 of the Employees'' Provident Fund Scheme,1952. (EPF Scheme, 1952).

2 Because of drastic reduction in rate of return on investments as compared to the rate declared by the Government for employees Provident Fund in last 3 to 4 years, the Company had to make additional Contribution / provision for the deficit sustained, as a legal or constructive obligation. Furthur, credit risk, interest risk, default risk also increased in the recent past in Bond market.

3 The Company had therefore submitted application dated 14^th February, 2022 for surrender of exemption granted w.e.f. 1^st March, 2022 pursuant to resolution passed by the Board of Directors of the Company on 26^th October, 2021, followed by resolution passed by the Board of Trustees of Madhusudan Provident Fund Institution (MPFI) on 28^th November, 2021.

4 By an Order dated 9^th March, 2022, the Regional Provident Fund Commissioner withdrew the exemption granted under Para 27 of the Employees'' Provident Scheme (EPF Scheme) with effect from 1^st March, 2022. The Trust was also required to transfer the Corpus in the name of Central Board of Trustees, EPFO and any loss incurred by MPFI was borne by the Company as per the Order of RPFC. The Company was also directed to comply as an un-exempted establishment w.e.f. 1^st March, 2022. In this process, the Company incurred loss of '' 328.47 lakhs on liquidation of the securities comprised in the Corpus of MPFI which is recognised in Note No. 36 in F.Y. 2021-22.

Note - 50. OPERATING SEGMENTS

The Company operates mainly in manufacturing of Building Products and all other activities are incidental thereto, which have similar risk and

return. Accordingly, there are no separate reportable Segments as required under IND AS 108 “Operating Segment". The Revenue from

transactions with the single external customer amounting to 10% or more of the Company''s Revenue is Nil.

Note - 51.

In the opinion of the Management, current assets have a value on realisation in the ordinary course of business at least equal to the amount

at which they are stated except where indicated otherwise.

Note - 53. ADDITIONAL REGULATORY INFORMATION

The following additional disclosures are made pursuant to notification of Ministry of Corporate Affairs dated 24^th March, 2021.

1. Title deeds of Immovable Properties

The title deeds of all the immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) are held in the name of the company itself.

2. Revaluation of Property, Plant & Equipment

The company has not carried out revaluation of items of Property, Plant & Equipment during the year and accordingly the disclosure as to whether the revaluation is based on the valuation by a registered valuer as defined under rule 2 of the Companies (Registered Valuers and Valuation) Rules, 2017 is not applicable.

3. Loans / Advances in the nature of loans to Promoters, Directors, KMP’s and Related Parties

The Company has not made any loans or advances in the nature of loans to Promoters, Directors, KMP''s and the related parties which are outstanding as at the end of the current year and previous year.

4. Details of Benami Property held

No proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

5. Wilful Defaulter

None of the banks, financial institutions or other lenders from whom the company has borrowed funds has declared the company as a wilful defaulter at any time during the current year or in previous year.

6. Relationship with Struck off Companies

The company has not undertaken any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956 during the current year or in previous year.

7. Registration of charges or satisfaction with Registrar of Companies (ROC)

All the charges or satisfaction of which is required to be registered with Registrar of Companies(ROC) have been duly registered within the statutory time limit provided under the provisions of Companies Act, 2013 and rules made thereunder.

8. Compliance with number of layers of companies

The company does not have investment in subsidiary companies and accordingly the disclosure as to whether the company has complied with the number of layers of companies prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017 is not applicable.

9. Compliance with Approved Scheme of Arrangements

No scheme of compromise or arrangement has been proposed between the company & its members or the company & its creditors under section 230 of the Companies Act, 2013 (“The Act”) and accordingly the disclosure as to whether the scheme of compromise or arrangement has been approved or not by the competent authority in terms of provisions of sections 230 to 237 of the act is not applicable.

10. Borrowing from Banks and Financial Institutions for Specific Purpose

All the borrowings from banks and financial institutions have been used for the specific purposes for which they have been obtained.

11. Utilisation of Borrowed funds and Share Premium

a) The company has not advanced or loaned or invested funds to any other persons or entities, including foreign entities (Intermediaries) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

b) The company has not received any fund from any persons or entities, including foreign entities (Funding Party) with the understanding, whether recorded in writing or otherwise, that the company shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

12. Borrowings on the basis of security of Current Assets

The Company has working capital facilities from banks on the basis of security of current assets & are submitting periodically Financial Information as per the terms & conditions of sanction letters. There are no material discrepancies in the amount of current assets between quarterly Financial Information and books of accounts.

13. There were no transactions which have not been recorded in the books of account, have been surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961 (43 of 1961) during the year.

Note - 54.

Consequent to the introduction of Goods and Service Tax (GST) with effect from 1^st July, 2017, Central Excise, Value Added Tax (VAT) etc.

have been subsumed into GST. In accordance with relevant Indian Accounting Standard and Schedule III to the Companies Act, 2013, unlike

Excise Duties, levies like GST, VAT etc. are not part of Revenue from Operations. Revenue for the year ended 31^st March, 2023 and

31^st March, 2022 are net of GST. The following additional information is being provided to facilitate such understanding.

Note - 55.

Previous period figures have been regrouped, re-classified and re-arranged wherever considered necessary to confirm to the current year''s classification.

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Mar 31, 2022

a. Previous period''s figures have been re-grouped / re-classified wherever required to current year''s classification.

b. Items of Property, Plant & Equipment situated at 9, GIDC Industrial Estate & Residential Colony - Kadi (Survey No. 417/2 & 420/1,2) are mortgaged (EM) / hypothecated and fixed assets at Kadoli and Kalyanpur Windmills are hypothecated with State Bank of India against working capital facilities availed. (Refer Note No. 22.1)

c. Cost of Buildings includes ownership offices in co-operative societies for '' 2,179.55 lakhs (Previous year '' 2,179.55 lakhs) including 40 shares of '' 50/- each and 10 shares of '' 50/- each in respective Co-operative societies.

d. The amount of Contractual Commitments (Net of Advances) for the acquisition of Property, Plant & Equipment is '' 170.82 lakhs as on 31^st March, 2022 & '' 94.37 lakhs as on 31^st March, 2021. [Refer Note No. 45(b)]

16.1 Pursuant to the Resolution passed at the Board Meeting held on 5^th August, 2021 for consideration of the proposal and in principle approval for divestment of the Company''s entire stake in Anjani Tiles Limited, a subsidiary company, a Memorandum of Understanding (MOU) was executed on 17^th August, 2021 by and amongst Cera Sanitaryware Limited (Cera), Anjani Vishnu Holdings Ltd (AVHL) (Joint Venture Partner and Acquirer Company) and Anjani Tiles Limited (ATL) (Subsidiary Company) for the transfer / divestment of entire stake in Anjani Tiles Limited, consisting of 1,02,00,000 Equity shares of '' 10/- each and 2,42,30,000 1% Cumulative Redeemable Preference shares of '' 10/- each on a fully diluted basis, for a total consideration of '' 2,869.20 Lakhs.

16.2 The Company, AVHL and ATL also entered in to Share Purchase Agreement (SPA) dated 26^th August, 2021 pursuant to which the Company agreed to sell all the Equity and Preference Shares held by it in ATL to AVHL.

16.3 Total consideration as referred above, will be received by the Company in one or more tranches, beginning from 30^th September, 2021 and completing on 31^st March, 2023 through an escrow mechanism and as per the Payment Schedule set out in the MOU. Accordingly, the first tranche of '' 643.00 Lakhs has been received on 28^th September, 2021 from the Acquirer Company and 64,30,000 Preference Shares of ATL have been transferred (off market) to AVHL on 29^th September, 2021.

16.4 Further, pursuant to the MOU and SPA, the Share Escrow Agreement was executed by the Company, AVHL and ATL with Federal Bank Ltd. (Escrow Agent) jointly on 23^rd November, 2021. Both Cera and AVHL have transferred their respective entire Equity shareholding and their respective balance Preference shareholding to the Escrow Account in January, 2022 with lien marked in favour of the Escrow Agent.

16.5 Company''s shareholdings in Equity and Preference shares in ATL have been presented as Non-current Assets classified as Held for Sale as on 31^st March, 2022 as per Indian Accounting Standard - 105 - “Non-current Assets Held for Sale and Discontinued Operations”, measured at the lower of its carrying amount and fair value less costs to sell in respect of Equity shares and at fair value in respect of Preference shares as at 31^st March, 2022. The impairment loss of '' 573.80 Lakhs on Equity Shares (Preference shares to be transferred at fair value which is equivalent to carrying amount) due to above arrangements has been recognised in the Statement of Profit and Loss as Exceptional Item.

17.2 Terms / Rights attached to Equity Share :

The Company has only one class of Equity Shares having a par value of '' 5/- per share. Each holder of Equity is entitled to one vote per share and each equity share carries an equal right to dividend. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of Interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

22.1 (a) Primary Security

Cash Credit facilities from State Bank of India (SBI) are secured by exclusive hypothecation over entire Current Assets of the Company.

(b) Collateral Security

(i) Hypothecation of entire Fixed Assets including Plant and Machinery situated at Plot no. 9 GIDC, Industrial Estate, Kadi and windmills located at Village Kadoli, Dist: Kutch and at Kalyanpur, Dist: Jamnagar.

(ii) Equitable mortgage on land and buildings of Residential Colony at Kadi and factory land and buildings situated at Kadi factory.

(c) As per the sanction letter of SBI dated 28^th January, 2022, the competent authority of the Bank has approved the release of above collateral securities if ECR does not fall below “AA” and the Company submitting negative Lien and Free Access Letter to the Bank in respect of factory land and buildings situated at Kadi factory. Accordingly, the Mortgage Release Deed has been executed by SBI on 29^th April, 2022. Original documents of title of above properties will be handed over by the Bank in near future.

22.2 Rate of interest on various cash credit facilities from State Bank of India chargeable at 0.15% above 6 months MCLR (Present effective rate 7.10 % p.a.) and rate of interest on export packing credit faciltiy is chargeable at ARR 2 bps for 120 days.

22.3 Rate of interest on overdraft working capital facility from HDFC Bank Ltd is 6.95% p.a.

22.4 Monthly statements of current assets filed by the company with banks are in agreement with the books of account.

Funding arrangements and funding policy :

Gratuity liability is funded whereas leave Benefits Liability is not funded. There are no minimum funding requirements for Leave benefits plans in India and there is no compulsion on the part of the Company to fully pre fund the liability. The Company has purchased an insurance policy to partly provide for payment of gratuity to the employees. The trustees of the plan also make investments in Central / State Govt. securities, high quality Corporate bonds , special deposit scheme etc., as per rules and regulations. Every year , the actuary carries out a funding valuation based on the latest employee data provided by the Company. Any deficit in the assets arising as a result of such valuation is funded by the Company.

39.6 Sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31^st March, 2022, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31^st March, 2021: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

Overview:

The Company''s Risk Management framework encompasses practices relating to the identification, analysis, evaluation, treatment, mitigation and monitoring of the strategic, external and operational controls risks to achieving the Company''s business objectives. It seeks to minimize the adverse impact of these risks, thus enabling the Company to leverage market opportunities effectively and enhance its long-term competitive advantage. The focus of risk management is to assess risks and deploy mitigation measures.

The Company''s activities expose it to variety of financial risks namely market risk, credit risk and liquidity risk. The Company has various financial assets such as deposits, trade and other receivables and cash and bank balances directly related to the business operations. The Company''s principal financial liabilities comprise of trade and other payables. The Company''s senior management''s focus is to foresee the unpredictability and minimize potential adverse effects on the Company''s financial performance. The Company''s overall risk management procedures to minimize the potential adverse effects of financial market on the Company''s performance are outlined hereunder:

The Company''s Board of Directors have overall responsibility for the establishment and oversight of the Company''s risk management framework.

The Company''s risk management is carried out by the management in consultation with the Board of Directors and the Risk Management Committee. They provide principles for overall risk management, as well as policies covering specific risk areas.

The note explains the sources of risk which the entity is exposed to and how the entity manages the risk.

(A) Credit Risk:

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and from its financial activities including deposits with banks and other financial instruments. The Company establishes an impairment allowance based on Expected Credit Loss model that represents its estimate of incurred losses in respect of trade and other receivables, advances and investments.

(i) Trade Receivables:

The Company extends credits to customers in normal course of the business. The Company considers the factors such as credit track record in the market of each customer and past dealings for extension of credit to the customers. The Company monitors the payment track record of each customer and outstanding customer receivables are regularly monitored. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located at several jurisdictions and industries and operate in large independent markets. The Company also takes advances and security deposits from customers which mitigate the credit risk to an extent.

The average credit period taken on sales of goods is 30 to 60 days. Generally, no interest has been charged on the receivables. Allowances against doubtful debts are recognised against trade receivables based on estimated irrecoverable amounts determined by reference to past default experience of the counterparty and an analysis of the counterparty''s current financial position.

Before accepting any new customer, the Company uses an internal credit system to assess the potential customer''s credit quality and defines credit limit of customer. Limits attributed to customers are reviewed periodically. There are no customers who represent more than 5 per cent of total net revenue from operations.

The Company generally does not hold any collateral or other credit enhancements over any of its trade receivables excepting a small amount in the nature of security deposits from its dealers, nor does it have a legal right of offset against any amounts owed by the Company to the counterparty.

(ii) Cash and cash equivalents and short-term investments:

The Company considers factors such as track record, size of institution, market reputation and service standard to select the banks with which deposits are maintained. The Company does not maintain significant deposit balances other than those required for its day to day operations. Credit risk on cash and cash equivalents is limited as these are generally held or invested in deposits with banks and financial institutions with good credit ratings.

(B) Liquidity Risk:

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company''s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses. In doing this, management considers both normal and stressed conditions.

The Company''s objective is to maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company relies on a mix of borrowings, capital and excess operating cash flows to meet its needs for funds. The current committed lines of credit are sufficient to meet its short to medium term expansion needs. The Company monitors rolling forecasts of its liquidity requirements to ensure that it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities so that it does not breach borrowing limits.

The table below provides undiscounted cash flows towards non-derivative financial assets/ (liabilities) into relevant maturity based on the remaining period at the Balance Sheet date to the contractual maturity date and where applicable, their effective interest rates.

(C) Market Risk:

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risks : foreign currency risk, interest risk and other price risk such as commodity risk.

(i) Foreign Currency Risk:

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates and arises where transactions are done in foreign currencies. It arises mainly where receivables and payables exist due to transactions entered in foreign currencies. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows approved policy parameters utilizing forward foreign exchange contracts whenever felt necessary. The Company does not enter into financial instrument transactions for trading or speculative purpose.

The Company transacts business primarily in Indian Rupees, USD, Euro and GBP. The Company has foreign currency trade payables and receivables and is therefore, exposed to foreign exchange risk. Certain transactions of the Company act as a natural hedge as a portion of both assets and liabilities are denominated in similar foreign currencies. For the remaining exposure to foreign exchange risk, the Company adopts a policy of selective hedging based on risk perception of the management.

This is mainly attributable to the exposure outstanding on foreign currency receivables and payables in the Company at the end of each reporting period.

(ii) Interest Rate Risk:

The Company''s exposure to the risk of changes in market interest rates relates primarily to long term debts having floating rate of interest. Its objective in managing its interest rate risk is to ensure that it always maintains sufficient headroom to cover interest payment from anticipated cashflows which are regularly reviewed by the Board. However, the risk is very low due to negligible borrowings by the Company.

The Company''s non-current borrowings from banks are Nil as at 31^st March, 2022 and 31^st March, 2021 respectively. Other non-current financial liabilities have fixed rate of interest where the risk of changes in the interest rates is almost nil. As a result, the sensitivity affecting the profit before tax due to the Company''s exposure to the risk of changes in market interest rates is almost nil.

(iii) Commodity Risk:

The Company is exposed to the movement in the price of key raw materials and other traded goods in the domestic and international markets. The Company has in place policies to manage exposure to fluctuation in prices of key raw materials used in operations. The Company enters into contracts for procurement of raw materials and traded goods, most of the transactions are short term fixed price contracts and a few transactions are long term fixed price contracts.

Capital Management:

The Company manages its capital to be able to continue as a going concern while maximising the returns to shareholders through optimisation of the debt and equity balances. The capital structure consists of debt which includes the borrowings as disclosed in Note 22, cash and cash equivalents and current investments and equity attributable to equity holders of the Company, comprising issued share capital, reserves and retained earnings as disclosed in the Statement of Changes in Equity. For the purpose of calculating gearing ratio, debt is defined as non current and current borrowings (excluding derivatives). Equity includes all capital and reserves of the Company attributable to equity holders of the Company. The Company is not subject to externally imposed capital requirements. The Board reviews the capital structure and cost of capital on an annual basis but has not set specific targets for gearing ratios. The risks associated with each class of capital are also considered as part of the risk reviews presented to the Audit Committee and the Board of Directors.

42.1 All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is insignificant to the fair value measurements as a whole.

Level 1 : quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2 : valuation techniques for which the lowest level inputs that has a significant effect on the fair value measurement are observable, either directly or indirectly.

Level 3 : valuation techniques for which the lowest level input which has a significant effect on fair value measurement is not based

on observable market data.

There have been no transfers between Level 2 and Level 3 during the period.

42.2 The management assessed that fair value of short term financial assets and liabilities significantly approximate their carrying amounts largely due to the short term maturities of these instruments. The fair value of the financial assets and liabilities is included at the amounts at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

42.3 The Company determines fair values of financial assets or liabilities by discounting the contractual cash inflows / outflows using prevailing interest rates of financial instruments with similar terms. The initial measurement of financial assets and financial liabilities is at fair value.

42.4 The fair value of investments in mutual funds is determined using net assets value of the funds. Further, the subsequent measurements of all assets and liabilities (other than investments in mutual funds) is at amortised cost, using effective interest rate method.

42.5 The following methods and assumptions were used to estimate the fair values:

- The fair value of the Company''s interest bearing borrowings are determined using discount rate that reflects the entity''s discount rate at the end of the reporting period. The own non-performance risk as at the reporting period is assessed to be insignificant.

- The fair value of unquoted instruments and other financial assets and liabilities is estimated by discounting future cash flows using rates currently applicable for debt on similar terms, credit risk and remaining maturities.

Note - 49. DEFICIT DUE TO SURRENDER OF EXEMPTION GRANTED TO PF TRUST

1 The Company was granted Exemption for certain employees under Para 27 of the Employees'' Provident Fund Scheme,1952. (EPF Scheme, 1952).

2 Because of drastic reduction in rate of return on investments as compared to the rate declared by the Government for employees Provident Fund in last 3 to 4 years, the Company had to make additional Contribution / provision for the deficit sustained, as a legal or constructive obligation. Furthur, credit risk, interest risk, default risk also increased in the recent past in Bond market.

3 The Company had therefore submitted application dated 14^th February, 2022 for surrender of exemption granted w.e.f. 1^st March, 2022 pursuant to resolution passed by the Board of Directors of the Company on 26^th October, 2021, followed by resolution passed by the Board of Trustees of Madhusudan Provident Fund Institution (MPFI) on 28^th November, 2021.

4 By an Order dated 9^th March, 2022, the Regional Provident Fund Commissioner withdrew the exemption granted under Para 27 of the Employees'' Provident Scheme (EPF Scheme) with effect from 1^st March, 2022. The Trust was also required to transfer the Corpus in the name of Central Board of Trustees, EPFO and any loss incurred by MPFI was borne by the Company as per the Order of RPFC. The Company was also directed to comply as an un-exempted establishment w.e.f. 1^st March, 2022. In this process, the Company incurred loss of '' 328.47 lakhs on liquidation of the securities comprised in the Corpus of MPFI which is recognised in Note No. 36.

Note - 50. OPERATING SEGMENTS

The Company operates mainly in manufacturing of Building Products and all other activities are incidental thereto, which have similar risk and

return. Accordingly, there are no separate reportable Segments as required under IND AS 108 “Operating Segment". The Revenue from

transactions with the single external customer amounting to 10% or more of the Company''s Revenue is Nil.

Note - 51

In the opinion of the Management, current assets have a value on realisation in the ordinary course of business at least equal to the amount

at which they are stated except where indicated otherwise.

Note - 54.

Previous period figures have been regrouped, re-classified and re-arranged wherever considered necessary to confirm to the current year''s classification.

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Mar 31, 2019

1. Corporate Information

Cera Sanitaryware Limited (the “Company”) is a public limited company domiciled in India having its registered office situated at 9, GIDC Industrial Estate, Kadi - 382715, Dist. Mehsana, Gujarat, India. The Company was incorporated on 17^th July,1998, under the provisions of the Companies Act applicable in India and its equity shares are listed on the National Stock Exchange of India Limited (NSE) and BSE Limited. The Company is engaged in the business of manufacturing, selling and trading of building products and is having non-conventional wind & solar power for captive use in the State of Gujarat.

2. Basis of Preparation

2.1 Statement of Compliance with Ind AS.

The Standalone Financial Statements of the Company are prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 and the subsequent amendments from time to time, notified under Section 133 of the Companies Act, 2013 (the “Act”) and other relevant provisions of the Act.

These Standalone Financial Statements of the Company as at and for the year ended 31^st March, 2019 (including comparatives) were approved and authorised for issue by the Board of Directors of the Company on 14^th May, 2019.

2.2 Functional and Presentation Currency

These Standalone Financial Statements are presented in Indian Rupees (INR), which is also a functional currency. All the values have been rounded off to the nearest lakh, unless otherwise indicated.

2.3 Basis of Measurement

These Standalone Financial Statements have been prepared on a historical cost convention except certain financial assets and liabilities have been measured at fair value as under:-

Notes:

a. Previous period’s figures have been re-grouped / re-classified wherever required to current year’s classification.

b. Items of Property, Plant & Equipment situated at 9, GIDC Industrial Estate & Residential Colony - Kadi are mortgaged (EM) and fixed assets at Kadoli and Kalyanpur Windmills are hypothecated with State Bank of India against working facilities availed.

c. Cost of Buildings includes ownership offices in co-operative societies for Rs. 2,179.55 Lakhs (Previous year Rs. 343.35 Lakhs) including 40 shares of Rs. 50/- each and 10 shares of Rs. 50/- each in respective co-operative societies.

d. Capital work-in-progress mainly comprises of costs incurred on Plant & Equipments, Buildings and Furniture & Fixtures which are currently under installation / construction.

e. The amount of Contractual Commitments (Net of Advances) for the acquisition of Property, Plant & Equipment is Rs. 2,192.33 Lakhs as on 31.03.2019 and Rs. 2,642.35 Lakhs as on 31.03.2018.

Notes :

3.1 Trade Receivables are hypothecated to secure working capital facilities from State Bank of India.

3.2 No Trade or other receivables are due from directors or other officers of the Company either severally or jointly with any other person.

3.3 No Trade or other receivables are due from firms or private companies in which any director is a partner, director or a member.

3.4 Trade Receivables are non-interest bearing and are generally on credit terms of 30 to 60 days.

3.5 Refer to Note No. 38 for dues from an Associate. (Unsecured, considered good)

4.1 Terms / Rights attached to Equity Share :

The Company has only one class of Equity Shares having a par value of Rs. 5/- per share. Each holder of Equity is entitled to one vote per share and each equity share carries an equal right to dividend. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

4.2 There are no shares issued pursuant to contract without payment being received in cash, allotted as fully paid up by way of bonus shares and bought back during the last 5 years.

Nature and purpose of Other Reserves

a) Securities Premium

Securities Premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act.

b) General Reserve

General Reserve is created out of profits earned by the Company by way of transfer from surplus in the statement of profit and loss. The Company can use this reserve for payment of dividend and issue of statement of profit and loss. The Company can use this reserve for payment of dividend and issue of fully paid-up shares. As General Reserve is created by transfer of one component of equity to another and is not an item of other comprehensive income, items included in the General Reserve will not be subesquently reclassified to statement of profit and loss.

4.3 The impairment loss recognised on receivables arising from the Company’s contracts with customers is disclosed in Note No. 11.

4.4 The opening and closing balances of receivables and contract liabilities from contracts with customers are disclosed in Notes No. 11 and 24 respectively. Revenue recognised from opening balance of contract liability is disclosed in Note No. 24.1.

4.5 No amount of the transaction price allocated to the performance obligations are unsatisfied as at the end of the reporting period.

4.6 The impact of application of Ind AS 115 “Revenue from Contracts with Customers” on the financial statements of the Company for the reporting period is insignificant.

Note :

5.1 As per Ind AS 19 “Employee Benefits”, the disclosures of employee benefits as defined in the Indian Accounting Standard are given below:

Defined Contribution Plan :

The Company’s Contribution to provident fund and pension fund is considered as Defined Contribution Plan and is recognised as expenses for the year.

Defined Benefit Plan :

The Company operates a Defined Benefit Gratuity plan with approved Gratuity Fund and contributions are made to a separately administered approved Gratuity Fund.The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separtely to build up the final obligation.

The obligation for leave encashment is recognized as expense for the year.

Funding arrangements and funding policy :

Gratuity liability is funded whereas leave Benefits Liability is not funded. There are no minimum funding requirements for Leave benefits plans in India and there is no compulsion on the part of the Company to fully pre fund the liability. The Company has purchased an insurance policy to partly provide for payment of gratuity to the employees. The trustees of the plan also make investments in Central / State Govt. securities, high quality Corporate bonds, special deposit scheme, mutual funds etc., as per rules and regulations. Every year, the actuary carries out a funding valuation based on the latest employee data provided by the Company. Any deficit in the assets arising as a result of such valuation is funded by the Company.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Company’s policy for plan assets management.

5.2 Sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31^st March, 2019, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31^st March, 2018: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

Note - 6 : FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Overview:

The Company’s Risk Management framework encompasses practices relating to the identification, analysis, evaluation, treatment, mitigation and monitoring of the strategic, external and operational controls risks to achieving the Company’s business objectives. It seeks to minimize the adverse impact of these risks, thus enabling the Company to leverage market opportunities effectively and enhance its long-term competitive advantage. The focus of risk management is to assess risks and deploy mitigation measures.

The Company’s activities expose it to variety of financial risks namely market risk, credit risk and liquidity risk. The Company has various financial assets such as deposits, trade and other receivables and cash and bank balances directly related to the business operations. The Company’s principal financial liabilities comprise of trade and other payables. The Company’s senior management’s focus is to foresee the unpredictability and minimize potential adverse effects on the Company’s financial performance. The Company’s overall risk management procedures to minimise the potential adverse effects of financial market on the Company’s performance are outlined hereunder:

The Company’s Board of Directors have overall responsibility for the establishment and oversight of the Company’s risk management framework.

The Company’s risk management is carried out by the management in consultation with the Board of Directors. The Board provides principles for overall risk management, as well as policies covering specific risk areas.

The note explains the sources of risk which the entity is exposed to and how the entity manages the risk.

(A) Credit Risk:

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s receivables from customers and from its financial activities including deposits with banks and other financial instruments. The Company establishes an impairment allowance based on Expected Credit Loss model that represents its estimate of incurred losses in respect of trade and other receivables.

(i) Trade Receivables:

The Company extends credits to customers in normal course of the business. The Company considers the factors such as credit track record in the market of each customer and past dealings for extension of credit to the customers. The Company monitors the payment track record of each customer and outstanding customer receivables are regularly monitored. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located at several jurisdiction and industries and operate in large independent markets. The Company also takes advances and security deposits from customers which mitigate the credit risk to an extent.

The average credit period taken on sales of goods is 30 to 60 days. Generally, no interest has been charged on the receivables. Allowances against doubtful debts are recognised against trade receivables based on estimated irrecoverable amounts determined by reference to past default experience of the counterparty and an analysis of the counterparty’s current financial position.

Before accepting any new customer, the Company uses an internal credit system to assess the potential customer’s credit quality and defines credit limit of customer. Limits attributed to customers are reviewed periodically. There are no customers who represent more than 5 per cent of total net revenue from operations.

The Company does not hold any collateral or other credit enhancements over any of its trade receivables nor does it have a legal right of offset against any amounts owed by the Company to the counterparty.

Expected Credit Loss (ECL):

The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in the provision matrix. The provision matrix at the end of the reporting period is as follows:

(ii) Cash and cash equivalents and Short-term investments:

The Company considers factors such as track record, size of institution, market reputation and service standard to select the banks with which deposits are maintained. The Company does not maintain significant deposit balances other than those required for its day to day operations. Credit risk on cash and cash equivalents is limited as these are generally held or invested in deposits with banks and financial institutions with good credit ratings.

(B) Liquidity Risk:

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company’s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses. In doing this, management considers both normal and stressed conditions.

The Company’s objective is to maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company relies on a mix of borrowings, capital and excess operating cash flows to meet its needs for funds. The current committed lines of credit are sufficient to meet its short to medium term expansion needs. The Company monitors rolling forecasts of its liquidity requirements to ensure that it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities so that it does not breach borrowing limits.

(C) Market Risk:

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risks: foreign currency risk, interest risk and other price risk such as commodity risk.

(i) Foreign Currency Risk:

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates and arises where transactions are done in foreign currencies. It arises mainly where receivables and payables exist due to transactions entered in foreign currencies. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows approved policy parameters utilizing forward foreign exchange contracts whenever felt necessary. The Company does not enter into financial instrument transactions for trading or speculative purpose.

The Company transacts business primarily in Indian Rupees, USD, Euro and GBP. The Company has foreign currency trade payables and receivables and is therefore, exposed to foreign exchange risk. Certain transactions of the Company act as a natural hedge as a portion of both assets and liabilities are denominated in similar foreign currencies. For the remaining exposure to foreign exchange risk, the Company adopts a policy of selective hedging based on risk perception of the management.

(ii) Interest Rate Risk:

The Company’s exposure to the risk of changes in market interest rates relates primarily to long term debts having floating rate of interest. Its objective in managing its interest rate risk is to ensure that it always maintains sufficient headroom to cover interest payment from anticipated cashflows which are regularly reviewed by the Board. However, the risk is very low due to negligible borrowings by the Company.

The Company’s non-current borrowings from banks are Nil as at 31^st March, 2019 and 31^st March, 2018 respectively. Other non-current financial liabilities have fixed rate of interest where the risk of changes in the interest rates is almost Nil. As a result, the sensitivity affecting the profit before tax due to the Company’s exposure to the risk of changes in market interest rates is almost Nil.

(iii) Commodity Risk:

The Company is exposed to the movement in the price of key raw materials and other traded goods in the domestic and international markets. The Company has in place policies to manage exposure to fluctuation in prices of key raw materials used in operations. The Company enters into contracts for procurement of raw materials and traded goods, most of the transactions are short term fixed price contracts and a few transactions are long term fixed price contracts.

Capital Management:

The Company manages its capital to be able to continue as a going concern while maximising the returns to shareholders through optimisation of the debt and equity balances. The capital structure consists of debt which includes the borrowings as disclosed in Note 21, cash and cash equivalents and current investments and equity attributable to equity holders of the Company, comprising issued share capital, reserves and retained earnings as disclosed in the Statement of Changes in Equity. For the purpose of calculating gearing ratio, debt is defined as non current and current borrowings (excluding derivatives). Equity includes all capital and reserves of the Company attributable to equity holders of the Company. The Company is not subject to externally imposed capital requirements. The Board reviews the capital structure and cost of capital on an annual basis but has not set specific targets for gearing ratios. The risks associated with each class of capital are also considered as part of the risk reviews presented to the Audit Committee and the Board of Directors.

The management assessed that fair value of short-term financial assets and liabilities significantly approximate their carrying amounts largely due to the short term maturities of these instruments. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company determines fair values of financial assets or liabilities by discounting the contractual cash inflows / outflows using prevailing interest rates of financial instruments with similar terms. The initial measurement of financial assets and financial liabilities is at fair value.

The fair value of investments in mutual funds is determined using net assets value of the funds. Further, the subsequent measurements of all assets and liabilities (other than investments in mutual funds) is at amortised cost, using effective interest rate method.

The following methods and assumptions were used to estimate the fair values:

- The fair value of the Company’s interest bearing borrowings are determined using discount rate that reflects the entity’s discount rate at the end of the reporting period. The own non-performance risk as at the reporting period is assessed to be insignificant.

- The fair value of unquoted instruments and other financial assets and liabilities is estimated by discounting future cash flows using rates currently applicable for debt on similar terms, credit risk and remaining maturities.

7.1 Fair Value Hierarchy

All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is insignificant to the fair value measurements as a whole.

Level 1 : Quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2 : Valuation techniques for which the lowest level inputs that has a significant effect on the fair value measurement are observable, either directly or indirectly.

Level 3 : Valuation techniques for which the lowest level input which has a significant effect on fair value measurement is not based on observable market data.

Note - 8. COMMITMENTS AND CONTINGENCIES

(a) Leases

Operating lease commitments

The Company has obtained some premises on operating leases. Few of the leases for premises are long term and are non - cancellable. Further, there is an escalation clause in the lease agreement.

Lease payments of Rs. 840.83 lakhs (previous year - Rs. 749.10 lakhs) have been recognized as an expense in the Statement of Profit and Loss during the year.

*The company has paid amounts towards its Capital Contribution.

** The company has given loans for following purposes:

(a) To Race Polymer Arts LLP towards Advance Capital Contribution.

(b) To Anjani Tiles Limited towards Working Capital requirement in F.Y. 2017-18

Note - 9. CORPORATE SOCIAL RESPONSIBILITY

In accordance with the provisions of Section 135 of the Companies Act, 2013, Schedule VII and Companies (Corporate Social Responsibility Policy) Rules, 2014 the Board of Directors of the Company had constituted a Corporate Social Responsibility (CSR) Committee. In terms of the provisions of the said Act, the Company was required to spend Rs. 302.07 lakhs (previous year Rs. 269.44 Lakhs) towards CSR activities during the year ended 31^st March, 2019. The Company has incurred following expenditure towards CSR activities for the benefit of general public and in the neighbourhood of the manufacturing facilities of the Company.

Note - 10. OPERATING SEGMENTS

The Company operates mainly in manufacturing of Building Products and all other activities are incidental thereto, which have similar risk and return. Accordingly, there are no separate reportable Segments as required under Ind AS 108 “Operating Segment”.

The Revenue from transactions with the single external customer amounting to 10% or more of the Company’s Revenue is Nil.

Note - 11.

Balances of certain debtors, creditors, loans & advances and deposits are subject to confirmation. Due adjustments will be made on receipt thereof, if necessary.

Note - 12.

In the opinion of the Management, current assets have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated except where indicated otherwise.

Note - 13.

Consequent to the introduction of Goods and Service Tax (GST) with effect from 1^st July, 2017, Central Excise, Value Added Tax (VAT) etc. have been subsumed into GST. In accordance with relevant Indian Accounting Standard and Schedule III to the Companies Act, 2013, unlike Excise Duties, levies like GST, VAT etc. are not part of Revenue from Operations. Revenue for the year ended 31^st March, 2019 and 31^st March, 2018 are net of GST. The following additional information is being provided to facilitate such understanding.

Note - 14.

Previous period figures have been regrouped, re-classified and re-arranged wherever considered necessary to confirm to the current year’s classification.

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Mar 31, 2018

1. Corporate Information

Cera Sanitaryware Limited (the “Company”) is a public limited company domiciled In India having its registered office situated at 9. GIDC

Industrial Estate, Kadi -382715, Dist. Mehsana, Gujarat, India. The Company was incorporated on 1 7^th July,1998, under the provisions of the Companies Act applicable in India and its equity shares are listed on the National Stock Exchange of India Limited (NSE) and BSE Limited. The Company is engaged in the business of manufacturing, selling and trading of building products and is having non-conventional wind & solar power for captive use in the State of Gujarat.

2. Basis of Preparation

2.1 Statement of Com pliance with Ind AS.

The Standalone Financial Statements of the Company are prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 and the Companies (Indian Accounting Standards) (Amendment) Rules, 2016 notified under Section 133 of the Companies Act, 2013 (the “Act”) and other relevant provisions of the Act.

The Company has adopted all the relevant Ind AS and the adoption was carried out in accordance with Ind AS 101, “First Time Adoption of Indian Accounting Standards”. Accordingly, these Standalone Financial Statements for the year ended 31^st March, 2018 are the Company’s First Ind AS Standalone Financial Statements.

For all periods up to and including the year ended 31^st March, 2017, the Company prepared its Standalone Financial Statements in accordance with Indian Accounting Principles generally accepted in India including Accounting Standards notified under Section 133of the Act read with paragraph 7 of the Companies (Accounts) Rules, 201 4 (Indian GAAP). Reconciliation and description of the effect of the transition have been summarised in Note No. 42.

The transition to Ind AS has resulted in changes in the presentation of the Financial Statements, disclosures in the notes thereto and accounting policies and principles.

These Standalone Financial Statements of the Company as at and for the year ended 31^st March, 2018 (including comparatives) were approved and authorised for issue by the Board of Directors of the Company on 3^rd May, 201 8.

2.2 Functional and Presentation Currency

These Standalone Financial Statements are presented in Indian Rupees (INR), which is also a functional currency. All the values have been rounded off to the nearest lakh, unless otherwise indicated.

2.3 Basis of Measurement

These Standalone Financial Statements have been prepared on a historical cost convention except where certain financial assets and liabilities have been measured at fair value as under:-

Notes:

a. Previous period’s figures have been re-grouped /re-classified wherever required to current year’s classification.

b. Items of Property, Plant & Equipment situated at9, GIDC Industrial Estate & Residential Colony - Kadi are mortgaged and fixed assets at Kadoli, Lamba, Patelka and Kalyanpur Windmills are hypothecated with State Bank of India against term loan availed.

c. Property at Acropolis Mall included in Land & Buildings was mortgaged with Kotak Mahindra Bank Ltd against term loan availed.

d. Capital work-in-progress mainly comprises of costs incurred on Plant & Equipments which are currently under installation/const ruction.

e. The amount of Contractual Commitments (Net of Advances) for the acquisition of Property, Plant & Equipment is Rs.2642.35 lakhs as on 31.03.2018, Rs.2535.60 lakhs as on 31^st March, 2017 and Rs.2044.48 lakhs as on 01^st April, 2016.

3.1 Terms / Rights attached to Equity Share :

The Company has only one class of Equity Shares having a pa rvalue ofRs.5/- per share. Each holder of Equity is entitled to one vote per share and each equity share carries an equal right to dividend. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liqudation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

3.2 There are no shares issued pursuant to contract without payment being received in cash, alloted as fully paid up by way of bonus shares and bought back during the last 5 years.

4.1 Terms of repayment of Term Loans from State Bank of India.

Term Loansfrom State Bank of India are secured by equitable mortgage of Leasehold land and Building situated at 9, GIDC Industrial Estate, Residential Colony at Kadi and charge by hypothecation of entire fixed assets of the Company including windmills situated at villages Kadoli, Lamba, Patelkaand Kalyanpur, repayable in20quarterly installments,from November, 2012 to August, 2017.

4.2 Terms of repayment of Term Loans from Kotak Mahindra Bank Ltd.

Term Loans from Kotak Bank are secured by equitable mortgage of property at Acropolis mall, Ahmedabad, repayable in 36 monthly installments, from December, 2014 to November, 2017.

5.1 Sale of products, include excise duty collected from customers ofRs.1059.66 lakhs (31^st March, 2017: Rs.4761.00 lakhs) Sale of products, net of excise duty is Rs.117808.72 lakhs (31^st March, 2017: Rs.100917.03 lakhs)

6.1 As per Ind AS 19 “Employee Benefits”, the disclosures of employee benefits as defined in the Indian Accounting Standard are given below:

Defined Contribution PlanThe Company’s Contribution to provident fund and pension fund is considered as Defined Contribution Plan and is recognised as expenses for the year.

Defined Benefit Plan T he Company operates a Defined Benefit Gratuity plan with approved Gratuity Fund and contributions are made to a separately administered approved Gratuity Fund.

The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separtely to build up the final obligation.

The obligation for leave encashment is recognized as expense for the year.

Gratuity :The benefits are governed by the Payment of Gratuity Act, 1 972. The key features are as under:

Funding arrangements and funding policy :

Gratuity liability is funded whereas leave Benefits Liability is not funded. There are no minimum funding requirements for Leave benefits plans in India and there is no compulsion on the part of the Company to fully pre fund the liability. The Company has purchased an insurance policy to partly provide for payment of gratuity to the employees. The trustees of the plan also make investments in Central / State Govt. securities, high quality Corporate bonds, special deposit scheme, mutual funds etc., as per rules and regulations. Every year, the actuary carries out a funding valuation based on the latest employee data provided by the Company. Any deficit inthe assets arising as a result of such valuation is funded by the Company.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Company’s policy for plan assets management.

7.1 Sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31^st March, 2018, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31^st March, 2017: Nil, 1^st April, 2016: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

Note - 8 : FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Overview:

The Company’s Risk Management framework encompasses practices relating tothe identification, analysis, evaluation, treatment, mitigation and monitoring of the strategic, external and operational controls risks to achieving the Company’s business objectives. It seeks to minimize the adverse impact of these risks, thus enabling the Company to leverage market opportunities effectively and enhance its long-term competitive advantage. The focus of risk management is to assess risks and deploy mitigation measures.

The Company’s activities expose it to variety of financial risks namely market risk, credit risk and liquidity risk. The Company has various financial assets such as deposits, trade and other receivables and cash and bank balances directly related to the business operations. The Company’s principal financial liabilities comprise of trade and other payables. The Company’s senior management’s focus is to foresee the unpredictability and minimize potential adverse effects on the Company’s financial performance. The Company’s overall risk management procedures to minimise the potential adverse effects of financial market on the Company’s performance are outlined hereunder:

The Company’s Board of Directors have overall responsibility for the establishment and oversight of the Company’s risk management framework.

The Company’s risk management is carried out by the management in consultation with the Board of Directors. The Board provides principles for overall risk management, as well as policies covering specific risk areas.

The note explains the sources of risk which the entity is exposed to and how the entity manages the risk.

(A) Credit Risk:

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and from its financial activities including deposits with banks and other financial instruments. The Company establishes an impairment allowance based on Expected Credit Loss model that represents its estimate of incurred losses in respect of trade and other receivables.

(i) Trade Receivables:

The Company extends credits to customers in normal course of the business. The Company considers the factors such as credit track record in the market of each customer and past dealings forextension of credit to the customers. The Company monitors the payment track record ofeach customer and outstanding customer receivables are regularly monitored. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located at several jurisdiction and industries and operate in large independent markets. The Company also takes advances and security deposits from customers which mitigate the credit risk to an exte nt.

The average credit period taken on sales of goods is 30 to 60 days. Generally, no interest has been charged on the receivables. Allowances against doubtful debts are recognised against trade receivables based on estimated irrecoverable amounts determined by reference to past default experience of the counterparty and an analysis of the counterparty’s current financial position.

Before accepting any new customer, the Company uses an internal credit system to assess the potential customer’s credit quality and defines credit limit of customer. Limits attributed to customers are reviewed periodically. There are no customers who represent more than 5 per cent of total net revenue from operations.

The Company does not hold any collateral or other credit enhancements overany of its trade receivables nordoes it have a legal right of offset against any amounts owed by the Company to the counterparty.

The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward- looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in the provision matrix. The provision matrix at the end of the reporting period is as follows:

(ii) Cash and cash equivalents and short-term investments:

The Company considers factors such as track record, size of institution, market reputation and service standard to select the banks with which deposits are maintained. The Company does not maintain significant deposit balances other than those required for its day to day operations. Credit risk on cash and cash equivalents is limited as these are generally held or invested in deposits with banks and financial institutions with good credit ratings.

(B) Liquidity Risk

Liquidity risk is the risk that the Company will face in meetings its obligations associated with its financial liabilities. The Company’s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses. In doing this, management considers both normal and stressed conditions.

The Company’s objective is to maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company relies on a mix of borrowings, capital and excess operating cash flows to meet its needs for funds. The current committed lines of credit are sufficient to meet its short to medium term expansion needs. The Company monitors rolling forecasts of its liquidity requirements to ensure that it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities so that itdoes not breach borrowing limits.

The table below provides undiscounted cashflows towards non-derivative financial assets/ (liabilities) into relevant maturity based on the remaining period at the Balance Sheet date to the contractual maturity date and where applicable, their effective interest rates.

(C) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risks: foreign currency risk, interest risk and other price risk such as commodity risk.

(i) Foreign Currency Risk:

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates and arises where transactions are done in foreign currencies. It arises mainly where receivables and payables exist due to transactions entered in foreign currencies. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows approved policy parameters utilizing forward foreign exchange contracts whenever felt necessary. The Company does not enter into financial instrument transactions for trading or speculative purpose.

The Company transacts business primarily in Indian Rupees, USD, Euro and GBP. The Company has foreign currency trade payables and receivables and is therefore, exposed to foreign exchange risk. Certain transactions of the Company act as a natural hedge as a portion of both assets and liabilities are denominated in similar foreign currencies. For the remaining exposure to foreign exchange risk, the Company adopts a policy of selective hedging based on risk perception of the management.

This is mainly attributable to the exposure outstanding on foreign currency receivables and payables in the Company at the end of each reporting period.

(ii) Interest Rate Risk

The Company’s exposure to the risk of changes in market interest rates relates primarily to long term debts having floating rate of interest. Its objective in managing its interest rate risk is to ensure that it always maintains sufficient headroom to cover interest payment from anticipated cashflows which are regularly reviewed by the Board. However, the risk is very low due to negligible borrowings by the Company.

The Company’s non-current borrowings from banks are Nil as at 31^st March, 201 8and 31^st March, 201 7 respectively. Other non-current financial liabilities have fixed rate of interest where the risk of changes in the interest rates is almost nil. As a result, the sensitivity affecting the profit before tax due to the Company’s exposure to the risk of changes in market interest rates is almost nil.

(iii) Commodity Risk

The Company is exposed to the movement in the price of key raw materials and other traded goods in the domestic and international markets. The Company has in place policies to manage exposure to fluctuation in prices of key raw materials used in operations. The Company enters into contracts for procurement of raw materials and traded goods, most of the transactions are short term fixed price contracts and a few transactions are long term fixed price contracts.

Capital Management:

The Company manages its capital to be able to continue as a going concern while maximising the returns to shareholders through optimisation of the debt and equity balances. The capital structure consists of debt which includes the borrowings as disclosed in Note 18, 22 and 24, cash and cash equivalents and current investments and equity attributable to equity holders of the Company, comprising issued share capital, reserves and retained earnings as disclosed in the Statement of Changes in Equity. Forthe purpose of calculating gearing ratio, debt is defined as non current and current borrowings (excluding derivatives). Equity includes all capital and reserves of the Company attributable to equity holders of the Company.The Company is not subject to externally imposed capital requirements. The Board reviews the capital structure and cost of capital on an annual basis but has not set specific targets for gearing ratios. The risks associated with each class of capital are also considered as part of the risk reviews presented to the Audit Committee and the Board of Directors.

The following table summarizes the capital of the Company:

The management assessed that fair value of short term financial assets and liabilities significantly approximate their carrying amounts largely due to the short term maturities of these instruments. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company determines fair values of financial assets or liabilities by discounting the contractual cash inflows / outflows using prevailing interest rates of financial instruments with similarterms. The initial measurement of financial assets and financial liabilities is at fair value.

The fair value of investments in mutual funds is determined using net assets value of the funds. Further, the subsequent measurements of all assets and liabilities (other than investments in mutual funds) is at amortised cost, using effective interest rate method.

The following methods and assumptions were used to estimate the fair values:

- The fair value of the Company’s interest bearing borrowings are determined using discount rate that reflects the entity’s discount rate at the end of the reporting period. The own non-performance riskas at the reporting period isassessed to be insignificant.

- The fair value ofunquoted instruments and otherfinancial assets and liabilities is estimated by discounting future cash flows using rates currently applicable for debt on similarterms, credit riskand remaining maturities.

9.1 Fair Value Hierarchy

All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is insignificant to the fair value measurements as a whole.

Level 1 : Quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2 : Valuation techniques for which the lowest level inputs that has a significant effect on the fair value measurement are observable, either directly or indirectly.

Level 3 : Valuation techniques for which the lowest level input which has a significant effect on fair value measurement is not based on observable market data.

The following table provides the fair value measurement hierarchy of the Company’s assets.

Note - 10. FIRST TIME ADOPTION OF IND AS

These standalone financial statements, for the year ended 31^st March, 2018 are thefirst financial statements prepared by the Company in accordance with Ind AS. For periods up to and including the year ended 31^st March, 2017, the Company prepared its standalone financial statements in accordance with accounting standards notified under section 133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (‘Indian GAAP’ or previous GAAP)

Accordingly, the Company has prepared standalone financial statements which comply with Ind AS applicable for periods ended 31^st March, 2018 together with the comparative period data as at and for the year ended 31^st March, 2017 as described in the summary of Significant Accounting Policies. In preparing these financial statements, the Company’s opening Balance Sheet was prepared as at 1^st April, 2016 the Company’s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its previous GAAP standalone financial statements including the Balance Sheet as at 1^st April, 2016 and the standalone financial statements asat and for the year ended 31^st March, 2017.

The Company has applied Ind AS 101 in preparing these first standalone financial statements. The effect of transition to Ind AS on equity, total comprehensive income and reported cash flows are presented in this section and are further explained in the notes that accompany the tables.

Exemptions and Exceptions applied

Set out below are the applicable Ind AS 101 Optional Exemptions and Mandatory Exceptions applied in the transition from previous GAAP to Ind AS.

(A) Ind AS Optional Exemptions:

1. Business Combinations

The Company has elected not to apply Ind AS 103 Business Combinations retrospectively to the past business combinations that occurred before the transition date of 1^st April, 2016.

Consequently,

(i) The Company has kept the same classification for the past business combinations as in its previous GAAP financial statements.

(ii) The Company has excluded from its opening Balance Sheet those items recognized in accordance with previous GAAP that do notqualify for recognition as an asset or liability under Ind AS.

2. Deemed Cost - Property, Plant and Equipment and Intangible Assets:

As permitted by Ind AS 101, the Company has elected to continue with the carrying value of its property, plant and equipment and intangible assets recognized as of 1^st April, 201 6 (date of transition) measured as per the previous GAAP and used that carrying value as its deemed cost as of the date of transition.

3. Leases:

Appendix C to Ind AS 17, Leases, requires an entity to assess whether a contract or arrangement contains a lease. As per Ind AS 17, this assessment should be carried out at inception of the contract or arrangement. However, the Company has used Ind AS 101 exemption and assessed all arrangements based on conditions in place as at the date of transition.

4. Investments in Subsidiaries:

The Company has availed the optional exemption under Ind AS 101 forthe continuance of the carrying value of Investments in subsidiaries same as under the previous GAAP.

(B) Ind AS Mandatory Exceptions:

1. Es ti mates:

As per Ind AS 101, an entity’s estimates in accordance with Ind AS at the date of transition to Ind AS presented in the entity’s first Ind AS financial statements as the case may be, should be consistent with estimates made for the same date in accordance with the previousGAAP unless there is objective evidence that those estimates were in error. However, the estimates should be adjusted to reflect any differences in accounting policies.

As per Ind AS 1 01, where application of Ind AS requires an entity to make certain estimates that were not required under the previous GAAP, those estimates should be made to reflect conditions that existed at the date of transition (for preparing opening Ind AS Balance Sheet) or at the end of the comparative period (for presenting comparative information as per Ind AS).

The Company’s estimates underIndASareconsistent withthe above requirements. Key estimates considered in preparation of the financial statements that were not required underthe previous GAAP are listed below:

(i) Fair valuation of financial instruments carried at FVTPL and/or FVOCI.

(ii) Impairment of financial assets based on the Expected Credit Loss model.

(iii) Determination of the discounted value for financial instruments carried at amortised cost.

2. Derecognition of Financial Assets and Liabilities:

As per Ind AS 101, an entity should apply the derecognition requirements in Ind AS 101, Financial Instruments, prospectively for transactions occurring on orafter the date of transition to Ind AS.

However, an entity may apply the derecognition requirements retrospectively from a date chosen by it if the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognized as a result of past transactions was obtained at the time of initially accounting for those transactions.

The Company has elected to applythe derecognition principles of Ind AS 109 prospectively.

3. Classification and Measurement of Financial Assets:

Financial Instruments:

Financial assets like security deposits received and security deposits paid, have been classified and measured at amortised cost on the basis of the facts and circumstances that exist at the date of transition to Ind AS. Since, it is impracticable for the Company to apply retrospectively the effective interest method in Ind AS 109, the fairvalue of the financial asset or the financial liability at the date of transition to Ind AS by applying amortised cost method, has been considered as the new gross carrying amount of that financial asset or the financial liability at the date of transition to Ind AS.

11.1 Notes to First Time Adoption

(a) Investment :

Under Indian GAAP, investments in Mutual Funds were classified in to current Investments. Current Investments were carried at lower of cost and fair value. Under Ind AS these Investments are required to be measured at Fair Value either through OCI (FVTOCI) or through Profit & Loss (FVTPL). The Company has opted to Fair Value these Investments through Profit & Loss (FVTPL). Accordingly, resulting fairvalue change of these Investments have been recognised in retained earnings as at the date of transition and subsequently in the Statement of Profit & Loss for the year ended 31^st March, 2017.

(b) Deferred Taxes :

Under Indian GAAP, Deferred Taxes were recognised based on Profit & Loss approach i.e. tax impact on difference between the accounting income and taxable income. Under Ind AS, Deferred Tax is recognised by following Balance Sheet approach i.e. tax impact on temporary difference between the carrying value of assets and liabilities in the books and their respective tax base.

(c) Excise Duty :

Under Indian GAAP, revenue from Sale of Goods was presented exclusive of Excise Duty. Under Ind AS, revenue from Sale of Goods is presented inclusive of Excise Duty. The Excise Duty paid is presented on the face of the Statement of Profit & Loss as part of expenses.

(d) Remeasurement of Post Employment Benefit Obligations :

Under Indian GAAP, cost relating to Post Employment Benefit Obligations including actuarial gain /losses were recognised in Profit & Loss. Under Ind AS, actuarial gain / losses on the net Defined Benefit Liability are recognised in Other Comprehensive Income instead of Profit & Loss.

(e) Security Deposits :

Under Indian GAAP, interest free rent security deposits paid were reported at their nominal values. Under Ind AS, interest free security deposits are measured at fair value on intial recognition and at amortised cost on subsequent recognition.

The difference between the nominal value of such deposits and theirfair value is considered as additional rent payable.

This is expensed on a straight line basis over the term of the rent agreement. The Company also recognises interest income on the deposits using Effective Interest Rate (EIR) through Profit and Loss overthe life of the deposits.

Note - 12 MOVEMENT IN PROVISIONS

Disclosure of Movement in Provisions during the year as per Ind AS 37, Provisions, Contingent Liabilities and Contingent Assets :

Note - 13. COMMITMENTS AND CONTINGENCIES

(a) Leases

Operating lease commitments

The Company has obtained some premises on operating leases. Few of the leases for premises are long term and are non-cancellable. Further, there is an escalation clause in the lease agreement.

Lease payments ofRs.749.10 lakhs (previous year -Rs.652.02 lakhs) have been recognized as an expense in the Statement of Profit and Loss during the year.

Future minimum rentals payable under non-cancellable operating leases are as follows:

Note - 14. NOTE ON CORPORATE SOCIAL RESPONSIBILITY

In accordance with the provisions of Section 135 of the Companies Act, 2013, Schedule VII and Companies (Corporate Social Responsibility Policy) Rules, 2014 the Board of Directors of the Company had constituted a Corporate Social Responsibility (CSR) Committee. In terms of the provisions of the said Act, the Company was required to spend Rs.269.44 lakhs (previous yearRs.289.96 lakhs) towards CSR activities during the year ended 31^st March, 2018. The Company has incurred following expenditure towards CSR activities for the benefit of general public and in the neighbourhood of the manufacturing facilities of the Company.

Note - 15. OPERATING SEGMENTS

The Company operates mainly in manufacturing of Building Products and all other activities are incidental thereto, which have similar risk and return. Accordingly, there are no separate reportable Segment as required under Ind AS 108 “ Operating Segment “.

Note - 16.

Balances of certain debtors, creditors, loans & advances and deposits are subject to confirmation. Due adjustments will be made on receipt thereof, if necessary.

Note - 17.

In the opinion of the Management, current assets have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated except where indicated otherwise.

Note - 18.

The Company had changed the method of valuation of closing stock of raw materials, packing materials, stores and spares, chemicals and traded goods as at 31^st March, 201 7 to “Cost or net realisable value whichever is lower” following weighted average method which was earlier FIFO method. The effect of increase in consumption and decrease in profits in earlier financial years due to this change is not material and hence not recognised.

Note - 19.

Consequent to the introduction of Goods and Service Tax (GST) with effect from 1^st July, 2017, Central Excise, Value Added Tax (VAT) etc. have been subsumed into GST. In accordance with Indian Accounting Standard-18 on “Revenue” and Schedule III to the Companies Act, 2013, unlike Excise Duties, levies like GST, VAT etc. are not part of Revenue from Operations. Revenue forthe year ended 31^st March, 2018 and 31^st March, 2017 are net of GST. The following additional information is being provided to facilitate such understanding.

Note - 20.

The Company has reclassified Previous Year figures to conform to Ind AS classification.

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Mar 31, 2017

1. The company is receiving balance confirmations from various parties. Due adjustments will be made on receipt thereof, if necessary.

2. Lease of an asset whereby the lessor essentially remains the owner of the asset is classified as operating lease. The payments made by the company as lessee in accordance with operational leasing contracts or rental agreements are expensed proportionally during the lease or rental period respectively. These are generally cancellable and are renewable by mutual consent on mutually agreed terms.

3. Employee Benefits

Details of Employee Benefits as required by the Accounting Standard 15 (Revised) Employee benefits 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 recognized by income tax authorities and administered through trustees/appropriate authorities.

The Company''s defined contribution plans are Provident Fund (exempted employees) recognized by the Income Tax Authorities and administered through trustees. The company has 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 respect of Provident Fund have not been made.

The Company''s contribution plans are Provident Fund (non exempted employees), Employees'' pension scheme (under the Provisions of the employees'' Provident Funds and Miscellaneous Provisions Act,1952), state plans namely Employee''s State Insurance Fund. The company has no further obligation beyond making contributions.

The Company''s defined benefit plans also include Gratuity and leave Encashment for all its employees. Gratuity fund recognized by the Income Tax Authorities 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.

(4) The Company has provided up to 31.03.2017 Rs, 758.49 Lacs (Rs, 614.42 Lacs) being increment of discounted value of liability for unveiled leave of the employees determined as per Acturial Valuation.

* Included in Donation & CSR - Refer Note no-27

4. a) Anjani Tiles Limited, a company incorporated under the Companies Act, 2013; a Joint Venture Subsidiary company commenced manufacturing tiles from 1^st April, 2016. As on 31^st March, 2017, CERA has invested Rs, 510 Lacs in 51,00,000 Equity Shares and Rs, 2,168 Lacs in 21,680,000, 1% Cummulative Redeemable Preference Shares of Rs, 10/- each.

b) The company has joined on 24^th June, 2016, as 51% partner in Packcart Packaging LLP, manufacturing Corrugated Boxes.

The company purchases firm''s entire production at the rate agreed between the parties. As on 31^st March, 2017 the company''s contribution as capital is Rs, 90.78 Lacs. The Limited Liability Partnership has incurred loss of Rs, 47.94 Lacs. The company has not provided for firm''s loss of first year of business operations.

c) The company has invested and participated to expand Company''s business in UAE. Company has joined with 25% share in “Cera Sanitaryware Trading LLC”, a limited liability company in UAE - Dubai, since 21^st December, 2015 for Tiles, Flooring materials and sanitaryware trading.

d) The company has invested and participated to expand Company''s business in Sharjah. Company has 50% share in “Cera Sanitaryware Limited FZC”, a limited liability company at Hamriyah Free Zone Authority of Government of Sharjah for Tiles, Flooring materials and sanitaryware trading.

5. Disclosure of trade payables as defined under the Micro, Small and Medium Enterprises Development Act, 2006 is based on the information available with the company regarding the status of the suppliers.

6. Change in Stock Valuation Method

The company has changed method of valuing closing stock of Raw-materials, Packing Materials, Stores, Chemicals and traded goods as at 31^st March, 2017 to “Cost or Net Realizable Value whichever is lower” following Weighted Average Method which was earlier FIFO method.

The change in the method of Inventory valuation has resulted in increase of Rs, 5,286,385/- in the consumption and decrease of profits by Rs, 5,286,385/-.

7. Dividend Declaration for the year 2016-17

The Board has recommended dividend of Rs, 12/- Per Equity share of Rs, 5/- each - i.e. 240% (P.Y. Rs, 9/- per Equity share - i.e. 180%) for the year ended 31^st March, 2017 subject to the approval of the shareholders at the Annual General Meeting.

In pursuance to amended Companies (Accounting Standards) Rules, 2016 effective financial year 2016-17 and revised Accounting Standard-4 on “Contingencies and Events occurring after Balance Sheet Date”, the proposed dividend of Rs, 1560.70 Lacs and taxes of Rs, 317.72 Lacs thereon are not recognized as liability in the annual accounts of the financial year ending March 31, 2017.

8. Significant accounting policies and practices adopted by the company are disclosed in the statement annexed to these financial statement as Annexure I.

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Mar 31, 2016

1. 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 the 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 had 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.

2. The Company is receiving balance confirmations from various parties. Due adjustments will be made on receipt thereof, if necessary.

3. Lease of an asset whereby the lessor essentially remains the owner of the asset is classified as operating lease. The payments made by the company as Lessee in accordance with operational leasing contracts or rental agreements are expensed proportionally during the lease or rental period respectively. These are generally cancellable and are renewable by mutual consent on mutually agreed terms.

4. Employee Benefits

The Company in pursuance to Accounting Standard 15, Employee Benefits (revised 2005) [''the revised AS 15''], notified under sub- section (3C) of section 211 of the Companies Act,1956 obtained acturial reports and based on these reports, following disclosures have been made in the financial statements for the year ended 31st March, 2016.

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. The Company has 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 respect of Provident Fund have not been made.

The Company''s contribution plans are Provident Fund (non exempted employees), Employees'' pension scheme (under the Provisions of the Employees'' Provident Funds and Miscellaneous Provisions Act,1952), state Employees'' plans namely Employees'' State Insurance Fund. The Company has no further obligation beyond making contributions.

The Company''s defined benefit plans also include Gratuity and leave Encashment for all its employees. Gratuity fund recognised by the Income Tax Authorities 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) The Company has provided upto 31.03.2016 Rs. 614.42 Lacs (Rs. 510.65 Lacs) being increment of discounted value of liability for unavailed leave of the employees determined as per Acturial Valuation.

5. The Company is to apply 2% of average net profits towards Corporate Social Responsibilty (CSR) as per section 135 of the Companies Act, 2013. The Company has utilised during the year 2015-16 Rs. 165.81 Lacs (previous year Rs. 87.89 Lacs) for CSR activities.

6. a) The Company has entered into Joint Venture through a Subsidiary Company, Anjani Tiles Limited, incorporated under the Companies Act, 2013 into tiles manufacturing business in Andhra Pradesh. The estimated project cost is Rs. 68 crores. Anjani Tiles Limited has commenced manufacturing tiles from 1st April, 2016. CERA has invested Rs. 5.10 crores by taking 51,00,000 Equity Shares and Rs. 14.54 crores in 1% Cummulative Redeemable Preference Shares of Rs. 10/- each.

b) The Company has entered into a Memorandum of Understanding with foreign partners to invest and participate in Joint Venture to expand company''s business in UAE. Company has joined with 25% share in "Cera Sanitaryware Trading LLC", a limited liability Company in UAE - Dubai, on 21st December, 2015 for Tiles, Flooring materials and Sanitaryware trading.

c) The Company has entered into a Memorandum of Understanding with foreign partners to invest and participate in Joint Venture to expand company''s business in Sharjah. Company has joined with 50% share in "Cera Sanitaryware Limited FZC", a limited liability Company at Hamriyah Free Zone Authority of Government of Sharjah for Tiles, Flooring materials and Sanitaryware trading.

7. Significant accounting policies and practices adopted by the Company are disclosed in the statement annexed to these financial statement as Annexure - I.

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Mar 31, 2014

1. Transfer of Ceramic Division from Madhusudan Industries Limited (MIL)

The Honorable 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 (he Scheme {"the Undertaking") of "MIL" comprising of Ceramic Division have been transferred to the Company al net book value with effect from 01.04.2001.

The Name of the Company had been changed from Madhusudan Oils And Fats Limited to Cera Sanitary ware Limited with effect from Of .1 f .2002 consequent upon the fresh certificate of Incorporation, issued by the Registrar of Companies, Gujarat Stale, Ahmadabad.

2. Contingent liability in respect of :

As on As on 31-03-2014 31-03-2013



a. Claims against the Company not acknowledged as debts (Net of Paymenls). 52.11.760 52,11,780

b. Estimated amount of contracts remaining lo be executed on 5,22,80,444 7,13,93,146 capital account not provided for (Net of advance).

c. Letters of Credit opened and guarantees given by the Bank in favour of 7,80,97,241 5,02.32.172 Parties and Government Authorities.

3. The company is receiving balance confirmations from various parties. Due adjustments will be made on receipt thereof, if necessary.

4. Pursuant lo notification dl.3tsl March 2009 (Further amended by Notification date 29lh December2011} issued by the Ministry of Corporate Affairs. the Company had exercised the option available under the newly inserted Paragraph 46A (1) to the AS-11.

The effect of changes in foreign exchange rates is to add/deduct the foreign exchange fluctuation to capital cost of the asset. Accordingly the net foreign exchange fluctuation loss amounting to 7 0.02 Cr. (P Y Loss amounting to T 0.11 Cr.} has been deducted ,'' (added) respectively lo the cost of capital assets.

5. Employee Benefits

The Company in pursuance to Accounting Standard 15, Employee Benefits (revised 2005) |1he revised AS 15''], notified under sub- section (3C) o! section 211 of the companies Act,1956 obtained actuarial reports and based on these reports, (allowing disclosures have been made in the financial statements for the year ended 31st March, 2014.

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. The company has no further obligation beyond making contributions and interest shortfall. Further the pattern ol investment for inveslible funds is as prescribed by the Government. Accordingly other related disclosures in respect of Provident Fund have not been made.

The Company''s contribution plans are Provident Fund (non exempted employees), Employees'' pension scheme {under the Provisions of the employees'' Provident Funds and Miscellaneous Provisions Act,1952), state plans namely Employee''s State Insurance Fund. The Company has no further obligation beyond making contributions.

The Company''s defined benefit plans also include Gratuity and Leave Encashment for all its employees. Gratuity fund recognised by the Income Tax Authorities 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 actual-y for measuring the liability is the projected unit credit method.

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Mar 31, 2013

1. 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 had 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.

2. Contingent liability in respect of :

As on As on 31-03-2013 31-03-2012 Rs. Rs.

a. Claims against the Company not acknowledged as debts (Net of Payments). 52,11,780 35,68,274

b. Estimated amount of contracts remaining to be executed on 7,13,93,146 8,65,92,646 capital account not provided for (Net of advance).

c. Letters of Credit opened and guarantees given by the Bank in favour of 5,02,32,172 7,27,09,618 Parties and Government Authorities.

3. The Company is receiving balance confirmations from various parties. Due adjustments will be made on receipt thereof, if necessary.

4. Persuant to notification dt.31st March, 2009 (Further amended by Notification dt. 29 December, 2011) issued by the Ministry of Corporate Affairs, the company had exercised the option available under the newly inserted Paragraph 46A (1) to the AS-11.

The effect of changes in foreign exchange rates is to add/deduct the foreign exchange fluctuation to capital cost of the asset. Accordingly the net foreign exchange fluctuation loss amounting to Rs. 0.11 Cr. (PY Loss amounting to Rs. 0.53 Cr.) has been deducted / (added) respectively to the cost of capital assets.

5. Employee Benefits

The company has with effect from 1st April, 2007, adopted Accounting Standard 15, Employee benefits (revised 2005), issued by the Institute of Chartered Accountants of India.The disclosure required is 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. The company has 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 respect of Provident Fund have not been made.

The company''s 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. The company has no further obligation beyond making contributions.

The company''s defined benefit plans also include Gratuity and leave Encashment for all its employees. Gratuity fund recognised by the Income Tax Authorities 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.

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Mar 31, 2012

1. Transfer of Ceramic Division from Madhusudan Industries Limited (MIL)

The Honourable High Court of Judicature at Gujarat vide its order dated 30.10.2001 sanctioned Scheme of Arrangement (the Scheme) U/s. 391-394 of the Companies Act, 1956 between Madhusudan Industries Limited ("MIL") and the Company {Madhusudan Oils and Fats Limited) (MOFL)} under which all the assets, liabilities and debts of the Ceramic Division of MIL as defined in the Scheme ("the Undertaking") has been transferred to the Madhusudan Oils and Fats Limited (MOFL) at net book value with effect from 01.04.2001.

The Name of the Company has been subsequently 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.

2. Contingent liability in respect of : As at As at 31-03-2012 31-03-2011 Rs. Rs.

a. Claims against the Company not acknowledged as debts (Net of Payments). 35,68,274 1,13,52,708

b. Estimated amount of contracts remaining to be executed on 8,65,92,646 38,51,330 capital account not provided for (Net of advance).

c. Letters of Credit opened and guarantees given by the Bank in favourof 7,27,09,618 2,63,10,744 Parties and Government Authorities.

3. As notified by Ministry of Corporate Affairs, revised Schedule VI under the Companies Act, 1956 is applicable to the financial statements for the financial year commencing on or after 1st April, 2011. Accordingly, the financial statements for the period ended 31st March, 2012 are prepared in accordance with the revised Schedule VI. The amounts and disclosures included in the financial statements of the previous year have been reclassified to conform to the requirements of revised Schedule VI. Figures in brackets relate to previous year.

4. The company has continous practice to obtain balance confirmations from various parties. Due adjustments on reconciliation will be made on receipt thereof, if necessary.

5. Persuant to notification dt. 31st March, 2009 (Further amended by Notification dt. 29th December, 2011) issued by the Ministry of Corporate Affairs, the company had exercised the option available under the newly inserted Paragraph 46A (1) to the AS-11. The effect of changes in foreign exchange rates is to add/deduct the foreign exchange fluctuation to the cost of capital assets.

Accordingly, the net foreign exchange fluctuation loss amounting to Rs. 0.53 Cr. ((P Y Gain amounting to Rs. 0.09 Cr, Gain amounting to Rs. 1.59 Cr in FY 11 & F Y 10 and Loss amounting to Rs. 1.96 Cr. in FY 08 & FY 09 (net of trf. from General Reserve)) has been deducted/(added) respectively to the cost of capital assets.

6. Employee Benefits

The company has with effect from 1st April, 2007, adopted Accounting Standard 15, Employee benefits (revised 2005), issued by the Institute of Chartered Accountants of India. The disclosure required 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 has no further obligation beyond making contributions and interest shortfall.

Further the pattern of investment for investible funds is as prescribed by the Government. Accordingly, the other related disclosures in respect 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 Miscellaneous Provisions Act,1952), state plans namely Employees' 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.

(4) The Company has provided upto 31.03.2012 Rs. 244.71 Lacs (Rs. 179.70 Lacs) being increment of discounted value of liability for unavailed leave of the employees determined as per Acturial Valuation.

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Mar 31, 2011

1. 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.

2. Contingent liability in respect of :

31.03.2011 31.03.2010 Rs. Rs.

a. Claims against the Company not acknowledged as debts (Net of Payments). 1,13,52,708 35,67,974

b. Estimated amount of contracts remaining to be executed on 38,51,330 11,47,109 capital account not provided for (Net of advance)

c. Letters of Credit opened and guarantees given by the Bank in favour 2,63,10,744 1,60,62,009 of Parties and Government Authorities.

3. Previous year’s figures have been regrouped wherever necessary.

4 . The Company has yet to obtain balance confirmations from various parties. Due adjustments will be made on receipt thereof, if necessary.

5. Employees Stock Option Scheme

Employees Stock Options are evaluated and accounted on intrinsic value method as per the accounting treatment prescribed under Guidence Note on “Accounting for Employee Share-based payments” issued by ICAI read with SEBI (Employee Stock Option Scheme & Employee Stock Purchase scheme) Guidelines, 1999 issued by Securities and Exchange Board of India. Accordingly the excess of market value of the stock options as on the date of grant over the exercise price of the option is recognised as deferred employee compensation and is charged to profit and loss account on graded vesting basis over the vesting period of the options. The unamortised portion of the Deferred Employee Compantation is reduced from Employee Stock Option Outstanding which is shown under Reserves & Surplus.

Consequently an amount of Rs. Nil (Rs.4.56) lacs has been amortised for the Current Year and the company has taken credit of Rs.5.13 (Rs. 40.28) lacs for 6427 (50471) options lapsed due to non exercise by employees during the exercise period (18 months) ended on 09.07.2010.

6. Persuant to notification dt.31st March, 2009 (Further amended by notification dt.11th May, 2011) issued by the Ministry of Corporate Affairs, the company had exercised the option available under the newly inserted Paragraph 46 to the AS-11. The effect of changes in foreign exchange rates is to add/deduct the foreign exchange fluctuation to capital cost of the asset. Accordingly the net foreign exchange fluctuation gain amounting to Rs.0.09 Cr. ((PY. Gain amounting to Rs.1.50 Cr. and Loss amounting to Rs.1.96 Cr.in FY 08 & FY 09 (net of trf. from General Reserve)) has been deducted/(added) respectively to the cost of capital assets.

7. Employee Benefits

The Company has with effect from 1st April, 2007, adopted Accounting standard 15, Employee benefits (revised 2005), issued by the Institute of Chartered Accountants of India. The disclosure required 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 has 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 respect 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.

(4) The Company has provided upto 31.03.2011 Rs. 179.70 Lacs (Rs. 130.98 Lacs) being increment of discounted value of liability for unavailed leave of the employees determined as per Acturial Valuation.

8. Related party disclosures

Notes :

Names of related parties and description of relationship :

1. Fellow Subsidiaries -

2. Associates 1. Madhusudan Industries 4.Vikram Ltd. Investment Co. Ltd.

2. Madhusudan Fiscal Ltd. 5.Madhusudan Holdings Ltd.

3. Cera Foundation 6.Swadeshi Fan Ind.Ltd.

3.Key Management Personnel Vikram Somany, Vidush Somany,,Dr.K.N. Maiti & M. K. Bhandari

4.Relatives of Key Smiti Somany, Pooja Jain Management Personnel Somany

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Mar 31, 2010

1. 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.

2. 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.

3. Contingent liability in respect of : 31.03.2010 31.03.2009

Rs. Rs. a. Claims against the Company not acknowledged as debts. 35,67,974 52,55,266

b. Estimated amount of contracts remaining to be executed on 11,47,109 - capital account not provided for (Net of advance)

c. Letters of Credit opened and guarantees given by the Bank in favour 1,60,62,009 2,85,20,582 of Parties and Government Authorities.

4. Preferential Warrants for Equity Shares

During the year ended on 31 st March, 2009 the company has forfeited 3,40,000 Preferential Warrants issued to promoters on preferential basis ; since the option of conversion of warrants was not exercised by the due date 26.07.2008. Rs. 41.82 Lacs received as 10% of subscription value of preferential warrants is transferred to Share Premium Account.

5. Employees Stock Option Scheme

Employees Stock Options are evaluated and accounted on intrinsic value method as per the accounting treatment prescribed under Guidence Note on "Accounting for Employee Share-based payments" issued by ICAI read with SEBI ( Employee Stock Option Scheme & Employee Stock Purchase scheme) Guidelines, 1999 issued by Securities and Exchange Board of India. Accordingly the excess of market value of the stock options as on the date of grant over thfe exercise price of the option is recognised as deferred employee compensation and is charged to profit and loss account on graded vesting basis over the vesting period of the options. The unamortised portiontf the Deferred Employee Compantation is reduced from Employee Stock Option Outstanding which is shown under Reserves & Surplus.

Consequently an amount of Rs.4.56 (40.58) lacs has been amortised for the Current Year and the company has taken credit of Rs.40.28 lacs for 50471 options lapsed due to non exercise by employees during the exercise period (18 months) ended on 09.07.2009.

Notes :

(1) Above Remuneration includes payment as Directors and not for the period as an employee.

(2) As the liability for Gratuity and Leave Encashment is provided for on an Acturial Basis for the company as a whole, the amont pertaining to directors is not ascertainable and therefore not included.

Computation of Profit in accordance with section 309 read with section 349 of the Companies Act, 1956 for calculation of Managerial Remuneration

5. The exceptional item in previous year represents the one time, non recurring loss suffered by the company consequent to having entered into certain foreign currency swap transactions which have been settled during the year.

6. Persuantto notification dt.31st March, 2009 issued by the Ministry of Corporate Affairs, the company had exercised the option available under the newly inserted Paragraph 46 to the AS-11. The effect of changes in foreign exchange rates is to add/deduct the foreign exchange fluctuation to capital cost of the asset. Accordingly the net foreign exchange fluctuation gain amounting to Rs.1.50 Cr. ((PY. Loss amounting to Rs.1.96 Cr. (FY 08 & FY 09) (net of trf. from General Reserve)) has been deducted/(added) respectively to the cost of capital assets.

7. Employee Benefits

The Company has with effect from 1st April 2007, adopted Accounting Standard 15, Employee Benefits (revised 2005), issued by the Institute of Chartered Accountants of India. The disclosure as required 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 Companys defined contribution plans are Provident Fund (exempted employees) recognised by the Income Tax Authorities and administered through trustees. Since the Company has 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 respect of Provident Fund have not been made.

The Companys 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 Employees State Insurance Fund, Since Company has no further obligation beyond making contributions.

The Companys 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.