Directors Report of Kajaria Ceramics Ltd.

Mar 31, 2025

The Company''s financial performance for the financial year ended on 31^st March 2025 is summarised below:

(B in Crores)

Particulars	Standalone		Consolidated
	2024-25	2023-24	2024-25	2023-24
Revenue from Operations	4219	4103	4635	4474
Other Income	68	69	43	46
Profit Before Depreciation and Interest	490	562	626	707
Profit Before Tax and Exceptional Items for continuing operations	431	512	484	588
Exceptional Items	112	-	-	-
Profit before Tax for continuing operations	319	512	484	588
Tax Expense	115	131	136	144
Profit After Tax for continuing operations	204	381	348	444
Loss for discontinuing operations	-	-	48	12
Profit After Tax (before Minority interest)	204	381	300	432
Minority Interest	-	-	6	10
Profit After Tax (after Minority interest)	204	381	294	422

Financial highlights and State of affairs of the
Company

FY25 tested the Company''s resilience amid challenging
market dynamics. An oversupply in the domestic market
led to pricing pressures, adversely affecting profitability.
Despite these challenges, revenue improved by 2%
over the previous year. However, EBITDA and net profit
saw a decline.

The EBITDA margin reduced from 15.28% in FY24 to
12.76% in FY25. The reasons for decline in margin are:
another muted year of the bathware division, some
loss in UK operations and provision of doubtful debts
in plywood division as we have decided to close this
division. Profit after tax for FY 25 declined to H 294 Crore
compared to H 422 Crore in FY24.

Further details on the Company''s performance,
strategic initiatives, and forward-looking plans are
available in the Management Discussion and Analysis
section of this report.

Your Directors are pleased to present the 39^th
Annual Report together with the Audited Financial
Statements of your Company for the financial year
ended 31^st March 2025.

Outlook

India''s tile industry may grow better than earlier years
after many years of slow growth, driven by sustained
economic expansion, rising disposable incomes, and
accelerating real estate development in Tier 2 and Tier
3 cities. On the global front, as geopolitical tensions
ease and trade agreements gain traction, tile exports
from India are expected to improve.

Internally, the Company''s focused cost optimisation
initiatives, intensified marketing efforts, and exit from
non-viable ventures are expected to support a recovery
in business growth and profitability. Enhanced utilisation
of existing assets is set to unlock operating leverage,
while disciplined working capital management will
strengthen liquidity and operational efficiency.

This combination of sectoral tailwinds and strategic
streamlining positions the Company to deliver improved
profitability in the current fiscal year.

Dividend

Your Directors have recommended to the shareholders
a final dividend of H 4/- (i.e. 400%) per equity share of
H 1/- each fully paid-up for the financial year ended
31^st March, 2025, if approved at the ensuing Annual
General Meeting (‘AGM'').

During the year 2024-25, the Company has also paid
Interim Dividend of H 5/- (i.e. 500%) per equity share
of H 1 each fully paid-up aggregating to H 79.64 Crores
thereby making the total Dividend (Interim Dividend &
Final Dividend) of H 9/- per equity share of H 1/- each
fully paid-up (previous year H 12/- per equity shares of
H 1/- each fully paid-up) aggregating to H 143.35 Crores.

Consolidated Financial Statements

The Company adopted Indian Accounting Standard
(Ind-AS) from 1^st April, 2016 and accordingly, the
Consolidated Financial Statements have been prepared
in accordance with the Accounting Standard notified
under Section 133 of the Companies Act, 2013 (‘the Act'')
and the relevant rules issued thereunder read with the
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 (‘the Listing Regulations'') and the
other accounting principles generally accepted in
India. The Consolidated Financial Statements form part
of the Annual Report.

There are no material changes and commitments
affecting the financial position of the Company and also
no change in the nature of business of the Company.

Holding, Subsidiaries, Associate, Joint Venture
Companies and their performance

During the financial year 2024-25, Kajaria Surfaces
Private Limited (formerly known as Keronite Tiles
Private Limited) and Kajaria Adhesive Private Limited
have become subsidiary(ies) of the Company.

A report on performance and financial position (Form
AOC-1) of each of the subsidiaries/joint venture as per
the Act is provided as Annexure-1.

Share Capital

As on 31^st March, 2025, the Authorised Share Capital
of the Company is H154,10,00,000 (Rupees One
Hundred Fifty Four Crores Ten Lacs only) divided
into 77,00,00,000 (Seventy Seven Crores) Equity
Shares of H 1/- each (Rupee One Only) aggregating to
H 77,00,00,000 (Rupees Seventy Seven Crores Only)

and 77,10,000 (Seventy Seven Lacs Ten Thousand)
Redeemable Preference Shares of H 100/- each (Rupees
One Hundred Only) aggregating to H 77,10,00,000
(Rupees Seventy Seven Crores Ten Lacs Only).

During the financial year 2024-25, the Company''s
paid up share capital has been increased by issue
and allotment of 13,990 equity shares of H 1/- each
pursuant to the Kajaria Employee Stock Option Scheme
2015. Accordingly, as on 31^st March, 2025, the paid-
up and subscribed share capital of the Company is
15,92,72,290 equity shares of H 1 each.

The Company has not issued shares with differential
voting rights or sweat equity shares during the
financial year 2024-25. As on 31^st March, 2025, none
of the Directors of the Company hold any instruments
convertible into equity shares of the Company.

Employee Stock Option Scheme

Kajaria Employee Stock Option Scheme 2015 (‘ESOP
Scheme 2015'') was approved by the shareholders of
the Company on 7^th September, 2015 for issue and
allotment of options exercisable into not more than

10.62.000 equity shares of H 1 each (Originally the
ESOP Scheme 2015 was for 5,31,000 equity shares of
H2 each) to eligible employees of the Company and its
subsidiaries. The shareholders of the Company had
further increased the stock options under the ESOP
Scheme 2015 from 10,62,000 to 15,87,000 equivalent
to 15,87,000 equity shares of H 1/- each by addition of

5.25.000 options on 24^th March, 2022.

The ESOP Scheme 2015 is administered by the
Nomination and Remuneration Committee of the
Board of Directors (‘the Board'') of the Company. The
exercise period for 4,58,000 options granted on 20^th
October 2015 to the employees of the Company and its
subsidiaries in 1^st Tranche has been competed on 19^th
October, 2023.

The Company had further granted 8,37,600 options
equivalent to 8,37,600 equity shares of H 1/- each to the
eligible employees of the Company and its subsidiaries
in 2^nd Tranche and 3^rd Tranche. Details regarding the
ESOP Scheme 2015 are given at Note No. 43 to the
Financial Statements.

In 2^nd Tranche and 3^rd Tranche under the ESOP Scheme
2015, total 1,42,190 (55,690 options during the year
2024-25, 55,500 options during the year 2023-24 and

31,000 options during the year 2022-23) have been
forfeited/lapsed due to resignation/retirement of ESOP
Option holders.

After closure of the financial year 2024-25, the
Company has also granted 6,35,000 options equivalent
to 6,35,000 equity shares of H 1/- each to the eligible
employees of the Company in 4^th & 5^th Tranches on 30^th
May, 2025 and 22^nd July, 2025.

During the year under review, there are no material
changes in the ESOP Scheme 2015 and the same is
in compliance with the SEBI (Share Based Employee
Benefits and Sweat Equity) Regulations, 2021 (‘ESOP
Regulations''). The disclosures under Regulations 14
of ESOP Regulations is uploaded on the Company''s
website viz.: https://www.kajariaceramics.com/pdf/
Disclosure pursuant to Reg 14 of SEBI SBEB and
SE Reg 2021 for FY 2024 25.pdf

Transfer to Reserves

During the year under review, there is no transfer of
fund to the Company''s General Reserve Account.

Directors’ Responsibility Statement

In terms of the provisions of the Companies Act, 2013,
the Directors confirm that:

i) In the preparation of the annual accounts for the
year ended on 31^st March, 2025, the applicable
accounting standards have been followed and no
material departures have been made from the same;

ii) Appropriate accounting policies have been
selected and applied consistently and judgments
and estimates made are reasonable and prudent so
as to give a true and fair view of the state of affairs
of the Company as on 31^st March, 2025 and of the
profit of the Company for the period ended 31^st
March, 2025;

iii) Proper and sufficient care has been taken for the
maintenance of adequate accounting records in
accordance with the provisions of the Companies
Act, 2013 for safeguarding the assets of the
Company and for preventing and detecting fraud
and other irregularities;

iv) The annual accounts have been prepared on a
going concern basis;

v) The Company is following up the proper Internal
financial controls and such internal financial controls
are adequate and are operating effectively; and

vi) The Company has devised proper systems to
ensure the Compliance with the provisions of all
the applicable laws and that such systems are
adequate and operating effectively.

Corporate Governance

The Company has complied with the Corporate
Governance requirements as stipulated under
the Listing Regulations. A separate section on
corporate governance, along with a certificate from
M/s Chandrasekaran Associates, Company Secretaries
confirming the compliance, is annexed and forms part
of the Annual Report.

Management Discussion and Analysis Report

Management Discussion and Analysis on matters
related to the business performance as stipulated in
the Listing Regulations, is given as a separate section
in the Annual Report.

Related Party Transactions

For all related party transactions, prior approvals of the
Audit Committee and the Board of Directors, as may
be required under the applicable laws, were obtained.
Further, the omnibus approvals of Audit Committee
and the Board of Directors, as may be required under
the applicable laws, are usually obtained on yearly
basis, which are of a foreseen and repetitive nature
and such approval is in the interest of the Company.
The transactions entered into, pursuant to the omnibus
approvals so granted, were placed before the Audit
Committee by way of a statement giving details of all
related party transactions for its review. All related
party transactions are disclosed in Note No. 40 to the
Financial Statements. The particulars of contracts or
arrangements with related parties referred to in sub¬
section (1) of Section 188 of the Act in the prescribed
Form AOC-2 is annexed as Annexure- 2.

The Related Party Transactions Policy is uploaded on the
Company''s website i.e. https://www.kajariaceramics.
com/pdf/RelatedPartyTransactionPolicy.pdf

Corporate Social Responsibility Initiatives

In terms of provisions of Section 135 of the Act read
with the Companies (Corporate Social Responsibility

Policy) Rules, 2014 [‘the CSR Rules''], the Company
has formulated a Corporate Social Responsibility Policy
(‘CSR Policy'') indicating the activities to be undertaken
by the Company. The constitution of the Corporate
Social Responsibility Committee (‘CSR Committee'') is
disclosed in the Annual Report on CSR Activities as an
Annexure - 3 of this report.

The Corporate Social Responsibility (‘CSR'') Policy may
be accessed on the Company''s website i.e. https://
www.kajariaceramics.com/pdf/CSR Policy.pdf

Your Company strives to make a difference in the lives of
people with a special focus on neighbouring and local
areas of the Company''s manufacturing locations. Your
Company has implemented various CSR programmes/
projects which made positive impacts mainly in the
areas of health, sanitation, social relief, environment,
sports and education, etc. During the year under
review, the CSR programmes/activities initiated by the
Company includes taking steps for Swachh Bharat,
preventive health care, constructing sanitation facilities
in the schools, etc., contributing to the education,
environment, sports, protection of national heritage, etc.
These CSR initiatives are implemented directly and/or
through trusts/societies/NGOs. These projects/activities
are also in accordance with Schedule VII of the Act.

The Annual Report on CSR activities as prescribed
under the CSR Rules is set out as Annexure-3, forming
part of this Report.

During the year 2024-25, the Company has incurred
CSR expenditures of H 925.21 Lacs and H 47 Lacs are
yet to be incurred to the ongoing CSR activity(ies)/
project(s), as not fully completed during the financial
year 2024-25. The said CSR activity(ies)/project(s) will
be completed during the financial year 2025-26. Further,
the excess CSR expenditures of H 1.52 Lacs incurred
in previous years has also been utilised towards the
CSR obligations of the Company for the financial year
2024-25. Accordingly, the actual CSR obligation of the
Company for the financial year 2024-25, was as under:

(A) CSR obligation of the Company as per the Companies Act, 2013	969.00
(B) Less: Excess CSR expenditure incurred in previous years	1.52
(C) CSR obligation of the Company for the year 2024-25 (A-B)	967.48

However, the Company had incurred CSR expenditures
of H 972.21 Lacs [i.e. H 925.21 Lacs and H 47 Lacs] during
the financial year 2024-25. Accordingly, the Company
has incurred excess amount of CSR expenditures of
H 4.73 Lacs, which would be carried forward to next
year(s) and the same would also be available to set¬
off the CSR obligations of the Company as per the
provisions of the Act read with CSR Rules.

The Company has also completed the ongoing CSR
project(s)/activity(ies) of H 60.24 Lacs pertaining to the
financial year 2023-24.

Risk Management

Your Company understands the importance of
various risks faced by it and has adopted a Risk
Management Policy which establishes various levels
of accountability within the Company. The Company
has also constituted a Risk Management Committee
which ensures that the Company has appropriate and
effective risk management systems which carries out
risk identification, assessment and ensures that risk
mitigation plans are in place. The Risk Management
Committee identifies, from time to time, various risks to
which the Company is subject to and has accordingly,
aligned the concerned departments to take the
necessary mitigating steps. Risk management has
been inter-linked with the annual planning exercise
where each function and business carries out
fresh risk identification, assessment and draws up
treatment plans.

A Risk Management Policy in terms of provisions
of Section 134(3)(n) of the Act read with the Listing
Regulations is in place and is uploaded on the
Company''s website i.e. https://www.kajariaceramics.
com/pdf/Risk Management Policy.pdf

Internal Control Systems and their adequacy

The Company believes in a strong internal control
framework, which is necessary for business efficiency,
management effectiveness and safeguarding assets.
The Company has a well-defined internal control system
in place, which is designed to provide reasonable
assurance related to operation and financial control.
The Management of the Company is responsible for
ensuring that Internal Financial Control has been laid
down in the Company and that controls are adequate
and operating adequately.

Internal Audit of the Company''s operations are
carried out by the Internal Auditors and periodically
covers different areas of business. The audit scope,
methodology to be used, reporting framework are
defined well in advance, subject to consideration of the
Audit Committee of the Company. The Internal Auditors
evaluates the efficacy and adequacy of internal control
system, its compliance with operating systems and
policies of the Company and accounting procedures at
all the locations of the Company. Based on the report
of the Internal Auditors, process owners undertake
corrective action in their respective areas and thereby
strengthen the controls. Significant audit observations
and corrective actions thereon are placed before the
Audit Committee of the Company. The Internal Audit
also continuously evaluates the various processes
being followed by the Company and suggests value
addition, to strengthen such processes and make them
more effective.

Internal Controls with respect to financial
statements

The Company has an adequate system of internal
financial control in place with reference to Financial
Statements. The Company has policies and procedures
in place for ensuring proper and efficient conduct of its
business, the safeguarding of its assets, the prevention
and detection of frauds and errors, the accuracy and
completeness of the accounting records and the timely
preparation of reliable financial information.

Directors and Key Managerial Personnel

Mrs. Sushmita Singha has completed her tenure as the
Independent Director of the Company on 29^th March,
2025 and accordingly, she ceased to be the Independent
Director of the Company w.e.f. 30^th March, 2025.

Mrs. Ambika Sharma has been appointed as the
Independent Director of the Company for the period
of five consecutive years effective from 30^th March,
2025 upto 29^th March, 2030 and the shareholders of
the Company have accorded their approval(s) through
Postal Ballot on 26^th June, 2025 for appointment of
Mrs. Ambika Sharma as the Independent Director of
the Company.

During the year under review, Mr. Rajender Mohan Malla
has also been appointed as the Independent Director
of the Company for the period of five consecutive years

effective from 1^st April, 2024 upto 31^st March, 2029 and
the shareholders of the Company have accorded their
approval(s) through Postal Ballot on 20^th June, 2024
for appointment of Mr. Rajender Mohan Malla as the
Independent Director of the Company.

Mr. Dev Datt Rishi, who is liable to retire by rotation,
has offered himself for re-appointment as the Director
at the ensuing AGM of the Company. The Board
recommends for his re-appointment in the ensuing
AGM of the Company.

All Independent Directors of the Company have given
declarations that they meet the criteria of independence
as prescribed under Section 149(6) of the Act read with
Regulations 16(1)(b) & 25(8) of the Listing Regulations
and in the opinion of the Board of the Company, all
Independent Directors of the Company have integrity,
expertise, experience and proficiency as prescribed
under the Companies (Appointment and Disqualification
of Directors) Rules, 2014 read with the Companies
(Accounts) Rules, 2014 (including amendment thereof).

All Directors of the Company have also given
declarations that they are not debarred from holding
the office of Director by virtue of any SEBI order or any
other such statutory authority as required under the
Circular dated 20^th June, 2018 issued by BSE Limited
and National Stock Exchange of India Limited.

Further, except as stated above there is no other change
in the composition of the Directors and Key Managerial
Personnel of the Company.

Performance Evaluation

The Board of the Company, on recommendation of
the Nomination and Remuneration Committee and in
line with the Nomination and Remuneration Policy of
the Company, has carried out an annual performance
evaluation of the Board as a whole, its Committees and
all Directors including the Chairman.

The manner in which the annual performance
evaluation has been carried out has been explained in
the Corporate Governance Report.

Nomination and Remuneration Policy

On the recommendation of the Nomination and
Remuneration Committee, the Board has framed a
policy for selection and appointment of Directors, Senior

Management including Key Managerial Personnel and
their remuneration. The Nomination and Remuneration
Policy includes the criteria for determining qualification,
positive attributes, independence, etc. is placed on the
Company''s website, i.e. https://www.kajariaceramics.
com/pdf/Nomination Remuneration Policy.pdf

Details of remuneration under Section 197 of the Act and
read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 is
stated in Annexure- 4, which forms part of this report.

Statutory Audit

M/s Walker Chandiok & Co LLP, Chartered Accountants,
(Firm Registration Number 001076N/N500013), the
Statutory Auditors of the Company has given their
report(s) on the Financial Statements (Standalone &
Consolidated) of the Company for the financial year
ended 31^st March, 2025, which form part of the Annual
Report. There is no qualification, reservation, adverse
remark, comments, observations or disclaimer given
by the Statutory Auditors in their report(s). There were
no frauds reported by the Statutory Auditors under the
provisions of Section 143 of the Act.

M/s Walker Chandiok & Co LLP, Chartered Accountants
(Firm Registration Number 001076N/N500013),
were re-appointed as the Statutory Auditors of the
Company at the 36^th AGM of the Company held on 23^rd
September, 2022, for second term of five consecutive
years to hold office from the conclusion of the 36^th AGM
of the Company till the conclusion of the 41^st AGM of the
Company. Hence, the tenure of the existing Statutory
Auditors of the Company would expire at the conclusion
of the 41^st AGM of the Company.

M/s Walker Chandiok & Co LLP, Chartered Accountants
are eligible to continue as the Statutory Auditors of the
Company for the remaining term in accordance with the
provisions of the Act read with rules made thereunder
and applicable laws.

Secretarial Audit

Pursuant to the provisions of Section 204 of the
Act read with the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014,
M/s Chandrasekaran Associates, Company Secretaries,
were appointed as the Secretarial Auditors, to undertake
the Secretarial Audit of the Company for the year ended

31^st March 2025. The Report of the Secretarial Audit is
annexed herewith as Annexure 5.

There are no qualifications, reservations, adverse
remarks, comments, observations or disclaimer made
by the Secretarial Auditors in their report. There were no
frauds reported by the Secretarial Auditors under the
provisions of Section 143 of the Act.

In accordance with the provisions of Regulation
24A of the Listing Regulations read with the
Section 204 of the Act and rules made thereunder,
M/s Chandrasekaran Associates, a Peer Reviewed Firm
of Company Secretaries (Firm Registration Number:
P1988DE002500) has been appointed as the Secretarial
Auditors of the Company for a period of five consecutive
years commencing from the financial year 2025-26 till
the financial year 2029-30, subject to approval of the
shareholders of the Company at the ensuing AGM of
the Company. The Board recommends for their re¬
appointment in the ensuing AGM of the Company.

Disclosures under the Companies Act, 2013 and
rules made thereunder:

Annual Return

The Annual Return in Form MGT-7 is available at
https://www.kaiariaceramics.com/pdf/Annual Return
Form 2024-25.pdf

Compliance of the Secretarial Standards

During the year under review, the Company has
complied with the applicable provisions of the
Secretarial Standard on meeting of the Board of
Directors (‘SS-1'') and the Secretarial Standard on
General Meetings (‘SS-2'') issued by the Institute of
Company Secretaries of India.

Particulars of Loans, Investments and Guarantees

Particulars of Loans, Investments and Guarantees,
covered under the provisions of Section 186 of the
Act are given in the Notes Nos. 6, 7, and 40 to the
Financial Statements.

Conservation of energy, technology absorption
and foreign exchange earnings & outgo

The particulars relating to conservation of energy,
technology absorption, foreign exchange earnings and
outgo as required to be disclosed under the Act are
provided in Annexure - 6 to this report.

Number of complaints of sexual harassment received during the year 2024-25	Nil
Number of complaints of sexual harassment dispose off during the year 2024-25	Nil
Number of complaints of sexual harassment pending for more than 90 days	Nil

the meaning of applicable laws and regulations. Actual
results could differ materially from those expressed or
implied. Important factors that could make difference
to the Company''s operations include raw material/
fuel availability and its prices, cyclical demand and
pricing in the Company''s principle markets, changes
in the Government regulations, tax regimes, economic
developments within India and the countries in
which the Company conducts business and other
ancillary factors.

Appreciation and Acknowledgement

The Directors take this opportunity to express their
deep sense of gratitude to the Banks, Central and State
Governments and their Departments and the Local

Meetings of Board

The Board of the Company met five (5) times during
the financial year 2024-25 on 7^th May, 2024, 23^rd July,
2024, 27^th August, 2024, 22^nd October, 2024 and 4^th
February, 2025. Details of the meetings of the Board
of Directors held during the financial year 2024-25
and attendance thereof are disclosed in the Corporate
Governance Report.

Audit Committee

The Composition of Audit Committee is disclosed
in the Corporate Governance Report. All the
recommendations made by the Audit Committee were
accepted by the Board.

Vigil Mechanism

The Company has established a Vigil Mechanism
for the Directors and Employees of the Company by
adopting the Whistle Blower Policy to report about
the genuine concerns, unethical behaviour, fraud or
violation of Company''s Code of Conduct and leakage/
suspected leakage of Unpublished Price Sensitive
Information with respect to the Company. The Whistle
Blower Policy may be accessed on the website of the
Company i.e. https://www.kajariaceramics.com/pdf/
whistel blowing policy.pdf

Maintenance of Cost Records

The Company is not required to maintain the cost
records as per sub-section (1) of Section 148 of the Act.

Sexual Harassment of Women at Workplace
(Prevention, Prohibition & Redressal), Act, 2013
and Maternity Benefit Act, 1961

The Company has in place a Policy on Prevention of
Sexual Harassment at the Workplace in line with the
requirements of the Sexual Harassment of Women at
Workplace (Prevention, Prohibition & Redressal) Act,
2013. This Policy may be accessed on the Company''s
website i.e. https://www.kajariaceramics.com/pdf/
prevention of sexual harassment at workplace.pdf

Internal Complaints Committee has been set up
to redress complaints received regarding sexual
harassment. All employees (Permanent, Contractual,
Temporary and Trainees) are covered under this Policy.
Details of complaints of sexual harassment during the
year 2024-25 are as under:

The Company has also complied with the provisions of
the Maternity Benefit Act, 1961.

Particulars of Employees

The information required pursuant to Section 197 of the
Act read with Rule 5(2) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules,
2014 in respect of employees of the Company is
attached as Annexure- 7 to this Report.

Deposits

The Company has not invited/accepted any deposit
within the meaning of Section 73 of the Act and the
rules made thereunder.

Proceeding under Insolvency and Bankruptcy
Code, 2016

No application or any proceeding has been filed against
the Company under the Insolvency and Bankruptcy
Code, 2016, during the financial year 2024-25.

Details of difference between amount of the
valuation done at the time of one-time settlement
and the valuation done while taking loan from
the banks or financial institutions along with the
reasons thereof

The Company has not made any one-time settlement,
therefore, the same is not applicable.

Significant and material orders passed by the
regulators or courts or tribunals

There is no significant and material order passed by
the regulators or courts or tribunals impacting the going
concern status and the Company''s operations in future.

Cautionary Statement

Statements in this Directors'' Report & the Management
Discussion and Analysis describing the Company''s
objectives, projections, estimates, expectations or
predictions may be forward looking statements within

Authorities for their continued guidance and support.

Your Directors would also like to record their appreciation
for the support and cooperation your Company has
been receiving from its suppliers, dealers, business
partners and others associated with the Company.

Your Directors place on record their sincere
appreciation to the employees at all levels for their hard
work, dedication and commitment. The enthusiasm and
unstinting efforts of the employees have enabled the
Company to remain as industry leader.

And to you, our shareholders, we are deeply grateful
for the confidence and faith that you have always
reposed in us.

For and on behalf of the Board
Ashok Kajaria

Place: New Delhi Chairman and Managing Director

Date: 22^nd July, 2025 DIN: 00273877

---

Mar 31, 2024

Your Directors are pleased to present the 38^th Annual Report together with the audited financial statements of your Company for the financial year ended 31^st March 2024.

Financial Results

The Company''s financial performance for the financial year ended on 31^st March 2024 is summarised below:

(B in Crores)

Particulars	Standalone		Consolidated
	2023-24	2022-23	2023-24	2022-23
Revenue from Operations	4103	3971	4578	4382
Profit Before Other Income, Exceptional Items, Depreciation, Interest and taxes	562	514	700	592
Profit before Tax	512	463	576	462
Tax Expense	131	119	144	116
Profit After Tax (before Minority interest)	381	344	432	346
Minority Interest	-	-	10	2
Profit After Tax (after Minority interest)	381	344	422	345

Financial highlights and state of Affairs of the Company

The company achieved a commendable performance in considerable volatile environment. Our top line surpassed B4,500 Crore during a period where tile offtake was tepid. The Company attained a year-on-year volume and revenue growth of 6% and 4% respectively, underscoring the resilience of the organisation and the strength of the brand.

Our focus on value addition and dedicated efforts towards cost optimisation helped overcome the price erosion owing to throttled demand. Your Company reported a Net Profit of B422 Crore in FY24 - an increase of 23% over the previous year.

The State of Affairs of the Company is detailed in the ''Management Discussion and Analysis'' section, which forms part of this report.

Outlook

Having retained its position as the fastest-growing major economy for a consecutive year, India seems poised for another year of robust economic progress. The positivity in the external environment reduced inflation, and stable interest rates have strengthened consumer confidence and suggest a promising year.

The resurgence in the real estate sector is expected to gain momentum in the current year with a strong project launch pipeline for residential and commercial projects. Moreover, with economic prosperity cascading to tier 2 and 3 cities, considerable business opportunities should emerge from these locations.

Furthermore, the Government''s sustained efforts on ideating and developing world-class infrastructure which is most prominently visible in airport development and railway station modernisation is expected to drive demand over the medium term. Accelerated investment by the private sector in infrastructure creation evidenced in extending hospital chains to Tier 2 and 3 cities should provide impetus to the demand for tiles and other products.

Mindful of the widening opportunities, we are making significant investments in augmenting capacities for all our product verticals. Moreover, we are also extending our footprint beyond the domestic boundaries to explore and capitalise on growth opportunities overseas.

Dividend

Your Directors have recommended to the shareholders a final dividend of B6/- (i.e. 600%) per equity share of B1/- each fully paid-up for the financial year ended March 31, 2024, if approved at the ensuing Annual General Meeting (''AGM'').

During the year 2023-24, the Company has also paid Interim Dividend of B6/- (i.e. 600%) per equity share of B1 each fully paid-up aggregating to B95.55 Crores thereby making the total Dividend (Interim Dividend & Final Dividend) of B12/-per equity share of B1/- each fully paid-up (previous year B9/-per equity shares of B1/- each fully paid-up) aggregating to B191.11 Crores.

Consolidated Financial Statements

The Company adopted Indian Accounting Standard (Ind-AS) from 1^st April, 2016 and accordingly, the Consolidated Financial Statements have been prepared in accordance with the Accounting Standard notified under Section 133 of

the Companies Act, 2013 (''the Act'') and the relevant rules issued thereunder read with the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (''the Listing Regulations'') and the other accounting principles generally accepted in India. The Consolidated Financial Statements form part of the Annual Report.

There are no material changes and commitments affecting the financial position of the Company and also no change in the nature of business of the Company.

Holding, Subsidiaries, Associate, Joint Venture Companies and their performance

After the closure of the year 2023-24, Keronite Tiles Private Limited has become a subsidiary of the Company, on May 20, 2024.

A report on performance and financial position (Form AOC-1) of each of the subsidiaries / joint venture as per the Act is provided as Annexure-1.

Share Capital

As on 31^st March, 2024, the Authorised Share Capital of the Company is B 154,10,00,000 (Rupees One Hundred Fifty Four Crores Ten Lacs only) divided into 77,00,00,000 (Seventy Seven Crores) Equity Shares of B1/- each (Rupee One Only) aggregating to B77,00,00,000 (Rupees Seventy Seven Crores Only) and 77,10,000 (Seventy Seven Lacs Ten Thousand) Redeemable Preference Shares of B100/- each (Rupees One Hundred Only) aggregating to B77,10,00,000 (Rupees Seventy Seven Crores Ten Lacs Only).

During the financial year 2023-24, the Company''s paid up share capital has been increased by issue and allotment of 25,750 equity shares of B1/- each pursuant to the Kajaria Employee Stock Option Scheme 2015. Accordingly, as on 31^st March, 2024, the paid-up and subscribed share capital of the Company is 15,92,58,300 equity shares of B1 each.

The Company has not issued shares with differential voting rights or sweat equity shares during the financial year 202324. As on 31^st March, 2024, none of the Directors of the Company hold any instruments convertible into equity shares of the Company.

Employee Stock Option Scheme

Kajaria Employee Stock Option Scheme 2015 (''ESOP Scheme 2015'') was approved by the shareholders of the Company on 7^th September, 2015 for issue and allotment of options

exercisable into not more than 10,62,000 equity shares of B1 each (Originally the ESOP Scheme 2015 was for 5,31,000 equity shares of B2 each) to eligible employees of the Company and its subsidiaries. The shareholders of the Company had further increased the stock options under the ESOP Scheme 2015 from 10,62,000 to 15,87,000 equivalent to 15,87,000 equity shares of B1/- each by addition of 5,25,000 options on 24^th March, 2022.

The ESOP Scheme 2015 is administered by the Nomination and Remuneration Committee of the Board of Directors (''the Board'') of the Company. The exercise period for 4,58,000 options granted on 20^th October 2015 to the employees of the Company and its subsidiaries in 1^st Tranche has been completed on 19^th October, 2023.

The Company had further granted 8,37,600 options equivalent to 8,37,600 equity shares of B1/- each to the eligible employees of the Company and its subsidiaries in 2^nd Tranche and 3^rd Tranche. Details regarding the ESOP Scheme 2015 are given at Note No. 43 to the financial statements.

In 2^nd Tranche and 3^rd Tranche under the ESOP Scheme 2015, total 86,500 equity shares of B1 each (55,500 equity shares during the year 2023-24 and 31,000 equity shares during the year 2022-23) have been forfeited/lapsed due to resignation/ retirement of ESOP Option holders.

During the year under review, there are no material changes in the ESOP Scheme 2015 and the same is in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (''ESOP Regulations''). The disclosures under Regulations 14 of ESOP Regulations is uploaded on the Company''s website viz.: https://www.kajariaceramics.com/ pdf/disclosure_pursuant_to_Reg_14_of_SEBI_SBEB_n_SE_ Reg_2021_for_FY_2023_24.pdf

Transfer to Reserves

During the year under review, there is no transfer of fund to the Company''s General Reserve Account.

Directors'' Responsibility Statement

In terms of the provisions of the Companies Act, 2013, the Directors confirm that:

i) In the preparation of the annual accounts for the year ended on 31^st March, 2024, the applicable accounting standards have been followed and no material departures have been made from the same;

ii) Appropriate accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31^st March, 2024 and of the profit of the Company for the period ended 31^st March, 2024;

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The annual accounts have been prepared on a going concern basis;

v) The Company is following up the proper Internal financial controls and such internal financial controls are adequate and are operating effectively; and

vi) The Company has devised proper systems to ensure the Compliance with the provisions of all the applicable laws and that such systems are adequate and operating effectively.

Corporate Governance

The Company has complied with the Corporate Governance requirements as stipulated under the Listing Regulations. A separate section on corporate governance, along with a certificate from M/s Chandrasekaran Associates, Company Secretaries confirming the compliance, is annexed and forms part of the Annual Report.

Management Discussion and Analysis Report

Management Discussion and Analysis on matters related to the business performance as stipulated in the Listing Regulations, is given as a separate section in the Annual Report.

Related Party Transactions

For all related party transactions, prior approvals of the Audit Committee and the Board of Directors, as may be required under the applicable laws, were obtained. Further, the omnibus approvals of Audit Committee and the Board of Directors, as may be required under the applicable laws, are usually obtained on yearly basis, which are of a foreseen and repetitive nature and such approval is in the interest of the Company. The transactions entered into, pursuant to the omnibus approvals so granted, were placed before the Audit Committee by way of a statement giving details of all related party transactions for

its review. All related party transactions are disclosed in Note No. 40 to the financial statements. The particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 of the Act in the prescribed Form AOC-2 is annexed as Annexure- 2.

The Related Party Transactions Policy is uploaded on the Company''s website i.e. https://www.kajariaceramics.com/pdf/ RelatedPartyTransactionPolicy.pdf

Corporate Social Responsibility Initiatives

In terms of provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 [''the CSR Rules''], the Company has formulated a Corporate Social Responsibility Policy (''CSR Policy'') indicating the activities to be undertaken by the Company. The constitution of the Corporate Social Responsibility Committee (''CSR Committee'') is disclosed in the Annual Report on CSR Activities as an Annexure - 3 of this report.

The Corporate Social Responsibility (''CSR'') Policy may be accessed on the Company''s website i.e. https://www. kajariaceramics.com/pdf/CSR_Policy.pdf

Your Company strives to make a difference in the lives of people with a special focus on neighbouring and local areas of the Company''s manufacturing locations. Your Company has implemented various CSR programmes/projects which made positive impacts mainly in the areas of health, sanitation, social relief, environment, sports and education, etc. During the year under review, the CSR programmes/activities initiated by the Company includes taking steps for Swachh Bharat, preventive health care, constructing sanitation facilities in the schools, etc. near the manufacturing facilities, contributing to the education, social welfare, environment, sports, protection of national heritage, etc. These CSR initiatives are implemented directly and/or through trusts/societies/NGOs. These projects/ activities are also in accordance with Schedule VII of the Act.

The Annual Report on CSR activities as prescribed under the CSR Rules is set out as Annexure-3, forming part of this Report.

During the year 2023-24, the Company has incurred CSR expenditures of B842.36 Lacs and B60.24 Lacs are yet to be incurred to the ongoing CSR activity(ies)/project(s), as not fully completed during the financial year 2023-24. The said CSR activity(ies)/project(s) will be completed during the financial year 2024-25. Further, the excess CSR expenditures of B7.92 Lacs incurred in previous years has also been utilised towards the CSR obligations of the Company for the financial

year 2023-24. Accordingly, the actual CSR obligation of the Company for the financial year 2023-24, was as under:

CSR obligation of the Company as per the Act	909.00
Less: Excess CSR expenditure incurred in	7.92
previous years
CSR obligation of the Company for the year	901.08
2023-24

However, the Company has incurred B902.60 Lacs [i.e. B842.36 Lacs and B60.24 Lacs] during the financial year 2023-24. Accordingly, the Company has incurred excess amount of CSR expenditures of B 1.52 Lacs, which would be available to set-off the CSR obligations of the Company as per the provisions of the Act read with CSR Rules.

The Company has also completed the ongoing CSR project/ activity of B88.10 Lacs pertaining to the financial year 2022-23.

Risk Management

Your Company understands the importance of various risks faced by it and has adopted a Risk Management Policy which establishes various levels of accountability within the Company. The Company has also constituted a Risk Management Committee which ensures that the Company has appropriate and effective risk management systems which carries out risk identification, assessment and ensures that risk mitigation plans are in place. The Risk Management Committee identifies, from time to time, various risks to which the Company is subject to and has accordingly, aligned the concerned departments to take the necessary mitigating steps. Risk management has been inter-linked with the annual planning exercise where each function and business carries out fresh risk identification, assessment and draws up treatment plans.

A Risk Management Policy in terms of provisions of Section 134(3)(n) of the Act read with the Listing Regulations is in place and is uploaded on the Company''s website i.e. https:// www.kajariaceramics.com/pdf/Risk_Management_Policy.pdf

Internal Control Systems and their adequacy

The Company believes in a strong internal control framework, which is necessary for business efficiency, management effectiveness and safeguarding assets. The Company has a well-defined internal control system in place, which is designed to provide reasonable assurance related to operation and financial control. The Management of the Company is responsible for ensuring that Internal Financial

Control has been laid down in the Company and that controls are adequate and operating adequately.

Internal Audit of the Company''s operations are carried out by the Internal Auditors and periodically covers different areas of business. The audit scope, methodology to be used, reporting framework are defined well in advance, subject to consideration of the Audit Committee of the Company. The Internal Auditors evaluates the efficacy and adequacy of internal control system, its compliance with operating systems and policies of the Company and accounting procedures at all the locations of the Company. Based on the report of the Internal Auditors, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are placed before the Audit Committee of the Company. The Internal Audit also continuously evaluates the various processes being followed by the Company and suggests value addition, to strengthen such processes and make them more effective.

Internal Controls with respect to financial statements

The Company has an adequate system of internal financial control in place with reference to financial statements. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

Directors and Key Managerial Personnel

Mr. H. Rathnakar Hegde has completed his tenure as the Independent Director of the Company on March 31,2024 and accordingly, he ceased to be the Independent Director of the Company w.e.f. April 1,2024.

Mr. Rajender Mohan Malla has been appointed as the Independent Director of the Company for the period of five consecutive years effective from April 1, 2024 upto March 31, 2029 and the shareholders of the Company have accorded their approval(s) through postal ballot on June 20, 2024 for appointment of Mr. Rajender Mohan Malla as the Independent Director of the Company.

The shareholders of the Company have also accorded their approval(s) through the postal ballot on June 20, 2024, for continuation of Mr. Dev Datt Rishi and Mr. Rajender Mohan

Malla as the Non-executive Director and the Independent Director of the Company, respectively, even after attaining the age of seventy-five years.

Mr. Chetan Kajaria and Mr. Rishi Kajaria, who are liable to retire by rotation, have offered themselves for re-appointment(s) as the Director(s) at the ensuing AGM of the Company. The Board recommends for their re-appointment(s) in the ensuing AGM of the Company.

All Independent Directors of the Company have given declarations that they meet the criteria of independence as prescribed under Section 149(6) of the Act read with Regulations 16(1 )(b) & 25(8) of the Listing Regulations and in the opinion of the Board of the Company, all Independent Directors of the Company have integrity, expertise, experience and proficiency as prescribed under the Companies (Appointment and Disqualification of Directors) Rules, 2014 read with the Companies (Accounts) Rules, 2014 (including amendment thereof).

All Directors of the Company have also given declarations that they are not debarred from holding the office of Director by virtue of any SEBI order or any other such statutory authority as required under the Circular dated 20^th June, 2018 issued by BSE Limited and National Stock Exchange of India Limited.

Further, except as stated above there is no other change in the composition of the Directors and Key Managerial Personnel of the Company.

Performance Evaluation

The Board of the Company, on recommendation of the Nomination and Remuneration Committee and in line with the Nomination and Remuneration Policy of the Company, has carried out an annual performance evaluation of the Board as a whole, its Committees and all Directors including the Chairman.

The manner in which the annual performance evaluation has been carried out has been explained in the Corporate Governance Report.

Nomination and Remuneration Policy

On the recommendation of the Nomination and Remuneration Committee, the Board has framed a policy for selection and appointment of Directors, Senior Management including Key Managerial Personnel and their remuneration. The Nomination and Remuneration Policy includes the criteria for determining

qualification, positive attributes, independence, etc. is placed on the Company''s website, i.e. https://www.kajariaceramics. com/pdf/Nomination_Remuneration_Policy.pdf

Details of remuneration under Section 197 of the Act and read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is stated in Annexure- 4, which forms part of this report.

Statutory Audit

M/s Walker Chandiok & Co LLP, Chartered Accountants, (Firm Registration Number 001076N/N500013), the Statutory Auditors of the Company has given their report(s) on the financial statements (Standalone & Consolidated) of the Company for the financial year ended 31^st March, 2024, which form part of the Annual Report. There is no qualification, reservation, adverse remark, comments, observations or disclaimer given by the Statutory Auditors in their report(s). There were no frauds reported by the Statutory Auditors under the provisions of Section 143 of the Act.

M/s Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration Number 001076N/N500013), were re-appointed as the Statutory Auditors of the Company at the 36^th AGM of the Company held on 23^rd September, 2022, for second term of five consecutive years to hold office from the conclusion of the 36^th AGM of the Company till the conclusion of the 41^st AGM of the Company. Hence, the tenure of the existing Statutory Auditors of the Company would expire at the conclusion of the 41^st AGM of the Company.

M/s Walker Chandiok & Co LLP, Chartered Accountants are eligible to continue as the Statutory Auditors of the Company for the remaining term in accordance with the provisions of the Act read with rules made thereunder and applicable laws.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s Chandrasekaran Associates, Company Secretaries, Delhi were appointed as the Secretarial Auditors, to undertake the Secretarial Audit of the Company for the year ended 31^st March 2024. The Report of the Secretarial Audit is annexed herewith as Annexure- 5.

There are no qualifications, reservations, adverse remarks, comments, observations or disclaimer made by the Secretarial Auditors in their report. There were no frauds reported by the Secretarial Auditors under the provisions of Section 143 of the Act.

Disclosures under the Companies Act, 2013 and rules made thereunder:

Annual Return

The Annual Return in Form MGT-7 is available at https://www. kajariaceramics.com/pdf/Annual_Return_Form_2023-24.pdf

Compliance of the Secretarial Standards

During the year under review, the Company has complied with the applicable provisions of the Secretarial Standard on meeting of the Board of Directors (''SS-1'') and the Secretarial Standard on General Meetings (''SS-2'') issued by the Institute of Company Secretaries of India.

Particulars of Loans, Investments and Guarantees

Particulars of Loans, Investments and Guarantees, covered under the provisions of Section 186 of the Act are given in the Notes Nos. 6, 7 and 40 to the Financial Statements.

Conservation of energy, technology absorption and foreign exchange earnings & outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed under the Act are provided in Annexure - 6 to this report.

Meetings of Board

The Board of the Company met six (6) times during the financial year 2023-24 on 16^th May, 2023, 26^th July, 2023, 28^th August, 2023, 20^th October, 2023, 28^th December, 2023, 31^st January, 2024. Details of the meetings of the Board of Directors held during the financial year 2023-24 and attendance thereof are disclosed in the Corporate Governance Report.

Audit Committee

The Composition of Audit Committee is disclosed in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.

Vigil Mechanism

The Company has established a Vigil Mechanism for the Directors and Employees of the Company by adopting the Whistle Blower Policy to report about the genuine concerns, unethical behaviour, fraud or violation of Company''s Code of Conduct and leakage/suspected leakage of Unpublished Price Sensitive Information with respect to the Company. The Whistle Blower Policy may be accessed on the website of the Company i.e. https://www.kajariaceramics.com/pdf/whistel_ blowing_policy.pdf

Maintenance of Cost Records

The Company is not required to maintain of cost records as per sub-section (1) of Section 148 of the Act.

Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal), Act, 2013

The Company has in place a Policy on Prevention of Sexual Harassment at the Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. This Policy may be accessed on the Company''s website i.e. https://www. kajariaceramics.com/pdf/prevention_of_sexual_harassment_ at_workplace.pdf

Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (Permanent, Contractual, Temporary and Trainees) are covered under this Policy. The Company has not received any sexual harassment complaints during the year 2023-24 nor any complaint is pending at the end of the year 2023-24.

Particulars of Employees

The information required pursuant to Section 197 of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is attached as Annexure-7 to this Report.

Deposits

The Company has not invited/accepted any deposit within the meaning of Section 73 of the Act and the rules made thereunder.

Proceeding under Insolvency and Bankruptcy Code, 2016

No application or any proceeding has been filed against the Company under the Insolvency and Bankruptcy Code, 2016, during the financial year 2023-24.

Details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof

The Company has not made any one-time settlement, therefore, the same is not applicable.

Significant and material orders passed by the regulators or courts or tribunals

There is no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and the Company''s operations in future.

Cautionary Statement

Statements in this Directors'' Report & the Management Discussion and Analysis describing the Company''s objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make difference to the Company''s operations include raw material/ fuel availability and its prices, cyclical demand and pricing in the Company''s principle markets, changes in the Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other ancillary factors.

Appreciation and Acknowledgement

The Directors take this opportunity to express their deep sense of gratitude to the Banks, Central and State Governments and their Departments and the Local Authorities for their continued guidance and support.

Your Directors would also like to record their appreciation for the support and cooperation your Company has been receiving from its suppliers, dealers, business partners and others associated with the Company.

Your Directors place on record their sincere appreciation to the employees at all levels for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain as industry leader.

And to you, our shareholders, we are deeply grateful for the confidence and faith that you have always reposed in us.

For and on behalf of the Board

Ashok Kajaria

Chairman & Managing Director DIN: 00273877

Place: New Delhi Date: 23^rd July, 2024

---

Mar 31, 2023

Your Directors are pleased to present the 37th Annual Report together with the audited financial statements of your Company for the financial year ended 31st March 2023.

Financial Results

The Company''s financial performance for the financial year ended on 31st March 2023 is summarised below:

(C in Crores)
PARTICULARS	Standalone		Consolidated
	2022-23	2021-22	2022-23	2021-22
Revenue from Operations	3971	3299	4382	3705
Profit Before Other Income, Exceptional Items, Depreciation, Interest and taxes	514	532	592	611
Profit before Tax	463	485	462	510
Tax Expense	119	123	116	127
Profit After Tax (before Minority interest)	344	362	346	383
Minority Interest	-	-	2	-6
Profit After Tax (after Minority interest)	344	362	345	377

Financial highlights and state of Affairs of the Company

We reported a healthy performance in difficult times. Having crossed C3,000 crore mark comprehensively in FY22, we scaled past the C4,000 crore milestone in FY23. We achieved volume and revenue growth of 11% and 18% y-o-y, respectively showcasing the organisation''s resilience and brand''s strength.

Spiraling gas prices, impacted business profitability of all tile majors and Kajaria. Our focus on value-addition helped cushion the drop in profitability. Your Company reported a Net Profit of C345 crore in FY23. We sustained our deleveraged position which strengthens our ability to undertake capital projects over the coming years to capitalise on growth opportunities.

The State of Affair of the Company is detailed in the ''Management Discussion and Analysis'' section which forms part of this report.

Outlook

The positivity in the external environment coupled with reduced inflation suggest a promising current year.

The healthy uptick in the real estate sector across India coupled with the Government''s impetus to creating world-class infrastructure is expected to fuel demand over the medium term.

Further, Government agencies have decided to offer large land parcels for real estate development which adds to the optimism of the tile sector.

After a lag of a few years, residential housing is growing rapidly as cities widen their municipal limits and Tier 2 and 3 towns emerge as new residential hubs. Additionally, demand for Grade-A office space is growing at a healthy pace as global conglomerates are looking to set shop in India. Further, realty creation has gained steam in other segments such as warehouses, data, centers retail segment and hospitality.

From an organisational standpoint, our recently commissioned capacities coupled with our reduced reliance on natural gas (owing to the use of bio mass) should help in sustaining profitable business growth.

Dividend

Your Directors have recommended to the shareholders a final dividend of C3/- (i.e. 300%) per equity share of C1/- each fully paid-up for the financial year ended March 31, 2023, if approved at the ensuing Annual General Meeting (''AGM'').

During the year 2022-23, the Company has also paid Interim Dividend of C6/- (i.e. 600%) per equity share of C1 each fully paid-up

aggregating to C95.54 crores thereby making the total Dividend (Interim Dividend & Final Dividend) of C9/- per equity share of C1/- each fully paid-up (previous year C11/- per equity shares of C1/- each fully paid-up) aggregating to C 143.31 crores.

Consolidated Financial Statements

The Company adopted Indian Accounting Standard (Ind-AS) from 1st April, 2016 and accordingly, the Consolidated Financial Statements have been prepared in accordance with the Accounting Standard notified under Section 133 of the Companies Act, 2013 (''the Act'') and the relevant rules issued thereunder read with the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (''the Listing Regulations'') and the other accounting principles generally accepted in India. The Consolidated Financial Statements form part of the Annual Report.

There are no material changes and commitments affecting the financial position of the Company and also no change in the nature of business of the Company.

Holding, Subsidiaries, Associate, Joint Venture Companies and their performance

During the year under review, Kajaria International DMCC and South Asian Ceramic Tiles Private Limited have become a wholly-owned subsidiary and a subsidiary of the Company, respectively.

Vennar Ceramics Limited ceased to be a subsidiary of the Company pursuant to the Company''s Board approval to dispose offthe entire stake of the Company in Vennar Ceramics Limited, in a phased manner.

On 3rd November 2022, the Company entered into a Joint Venture Agreement with various individuals affiliated with Ramesh Corp, Nepal to establish a manufacturing facility in Nepal for Ceramic Floor/Wall Tiles and glazed vitrified tiles in equal ratio. Accordingly, a Joint Venture Company (''JVC'') named Kajaria Ramesh Tiles Limited has been incorporated in Nepal, which is yet to commence its commercial production.

A report on performance and financial position (Form AOC-1) of each of the subsidiaries / joint venture as per the Act is provided as Annexure-1.

Share Capital

As on 31st March, 2023, the Authorised Share Capital of the Company is C 154,10,00,000 (Rupees One Hundred Fifty Four Crores Ten Lacs only) divided into 77,00,00,000 (Seventy Seven Crores) Equity Shares of C1/- each (Rupee One Only) aggregating to C77,00,00,000 (Rupees Seventy Seven Crores Only) and 77,10,000 (Seventy Seven Lacs Ten Thousand) Redeemable Preference

Shares of C100/- each (Rupees One Hundred Only) aggregating to C 77,10,00,000 (Rupees Seventy Seven Crores Ten Lacs Only).

During the financial year 2022-23, the Company''s paid up share capital has been increased by issue of 28,500 equity shares of C1/-each pursuant to the Kajaria Employee Stock Option Scheme 2015. Accordingly, as on 31st March, 2023, the paid-up and subscribed share capital of the Company is 15,92,32,550 equity shares of C1 each.

After the closure of the financial year 2022-23, the Company''s paid up share capital has further been increased by issue of 25,750 equity shares of C1/- each pursuant to the Kajaria Employee Stock Option Scheme 2015. Thus, presently, the paid up share capital of the Company is 15,92,58,300 equity shares of C1 each.

The Company has not issued shares with differential voting rights or sweat equity shares during the financial year 2022-23. As on 31st March, 2023, none of the Directors of the Company hold any instruments convertible into equity shares of the Company.

Employee Stock Option Scheme

Kajaria Employee Stock Option Scheme 2015 (''ESOP Scheme 2015'') was approved by the shareholders of the Company on 7th September, 2015 for issue and allotment of options exercisable into not more than 10,62,000* equity shares of C1 each (Originally the ESOP Scheme 2015 was for 5,31,000 equity shares of C2 each) to eligible employees of the Company and its subsidiaries. The ESOP Scheme 2015 is administered by the Nomination and Remuneration Committee of the Board of Directors (''the Board'') of the Company. On 20th October 2015, the Nomination and Remuneration Committee of the Company had granted 4,58,000* equity shares of C1 each (''Stock option'') to the employees of the Company and its subsidiaries.

During the year 2021-22, the stock options under the ESOP Scheme 2015 have further been increased from 10,62,000 options to

15.87.000 options equivalent to 15,87,000 equity shares of C1/- each by addition of 5,25,000 options through the shareholders'' approval obtained on 24th March, 2022. Further, the Company has granted 8,37,600 options equivalent to 8,37,600 equity shares of C1/- each to the eligible employees of the Company and its subsidiaries @ C980 per option in two tranches and the same will be vested within 5 years of the grant date. Details regarding the ESOP Scheme 2015 are given at Note No. 43 to the financial statements.

Total 1,49,700 equity shares of C1 each (12,000 equity shares during the year 2022-23, 11,700 equity shares during the year 2020-21,

29.000 equity shares during the year 2019-20, 44,000 equity shares during the year 2018-19, 13,000 equity shares during the year 2017-18 and 40,000 equity shares during the year 2016-17) had

been forfeited/lapsed due to resignation/death of ESOP Option holders.

During the year under review, there are no material changes in the ESOP Scheme 2015 and the same is in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (''ESOP Regulations''). The disclosures under Regulations 14 of ESOP Regulations is uploaded on the Company''s website viz.: https://www.kajariaceramics.com/pdf/Disdosure_pursuant_to_ Reg_14_of_SEBI_SBEB_SE_Reg_2021_for_FY_2022_23.pdf

* During the year 2016-17, equity shares of the Company had been sub-divided from C2 per share to C1 per share.

Transfer to Reserves

During the year under review, there is no transfer of fund to the Company''s General Reserve Account.

Directors'' Responsibility Statement

In terms of the provisions of the Companies Act, 2013, the Directors confirm that:

i) In the preparation of the annual accounts for the year ended on 31st March, 2023, the applicable accounting standards have been followed and no material departures have been made from the same;

ii) Appropriate accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2023 and of the profit of the Company for the period ended 31st March, 2023;

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The annual accounts have been prepared on a going concern basis;

v) The Company is following up the proper Internal financial controls and such internal financial controls are adequate and are operating effectively; and

vi) The Company has devised proper systems to ensure the Compliance with the provisions of all the applicable laws and that such systems are adequate and operating effectively.

Corporate Governance

The Company has complied with the Corporate Governance requirements as stipulated under the Listing Regulations. A separate section on corporate governance, along with a certificate from M/s Chandrasekaran Associates, Company Secretaries confirming the compliance, is annexed and forms part of the Annual Report.

Management Discussion and Analysis Report

Management Discussion and Analysis on matters related to the business performance as stipulated in the Listing Regulations, is given as a separate section in the Annual Report.

Related Party Transactions

For all related party transactions, prior approvals of the Audit Committee and the Board of Directors, as may be required under the applicable laws, were obtained. Further, the omnibus approvals of Audit Committee and the Board of Directors, as may be required under the applicable laws, are usually obtained on yearly basis, which are of a foreseen and repetitive nature and such approval is in the interest of the Company. The transactions entered into, pursuant to the omnibus approvals so granted, were placed before the Audit Committee by way of a statement giving details of all related party transactions for its review. All related party transactions are disclosed in Note No. 40 to the financial statements. The particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 of the Act in the prescribed Form AOC-2 is annexed as Annexure- 2.

During the year under review, the Related Party Transaction Policy of the Company has been revised in order to ensure compliance of the provisions of the Listing Regulations and circulars, issued by the SEBI, from time to time. The Related Party Transaction Policy is uploaded on the Company''s website i.e. https:// www.kajariaceramics.com/pdf/RelatedPartyTransactionPolicy.pdf

Corporate Social Responsibility Initiatives

In terms of provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 [''the CSR Rules''], the Company has formulated a Corporate Social Responsibility Policy (''CSR Policy'') indicating the activities to be undertaken by the Company. The constitution of the Corporate Social Responsibility Committee (''CSR Committee'') is disclosed in the Annual Report on CSR Activities as an Annexure - 3 of this report.

The Corporate Social Responsibility (''CSR'') Policy may be accessed on the Company''s website i.e. https://www.kajariaceramics.com/ pdf/CSR_Policy.pdf

Your Company strives to make a difference in the lives of people with a special focus on neighbouring and local areas of the Company''s manufacturing locations. Your Company has implemented various CSR programmes/projects which made positive impacts mainly in the areas of health, sanitation, social relief and education, etc. During the year under review, the CSR programmes/activities initiated by the Company includes taking steps for Swachh Bharat, preventive health care, constructing sanitation facilities in the schools, etc. near the manufacturing facilities, contributing to the education, social welfare and social economic development of under privileged children, etc. These CSR initiatives are implemented directly and/or through trusts/ societies/NGOs. These projects/activities are also in accordance with Schedule VII of the Act.

The Annual Report on CSR activities as prescribed under the CSR Rules is set out as Annexure-3, forming part of this Report.

The Company has incurred CSR expenditures of C743.34 Lacs during the year 2022-23. However, C88.10 Lacs are yet to be incurred to the CSR activity(ies)/project(s) as that were not fully completed during the financial year 2022-23, being ongoing activity(ies)/project(s). The said CSR activity(ies)/project(s) would be completed during the financial year 2023-24 and onwards and the unspent amounts of C88.10 Lacs towards the said CSR activity(ies)/project(s) has been carried over to the financial year 2023-24 and onwards, in accordance with the provisions of the Act read with CSR Rules.

The Company has also completed the ongoing CSR project/activity of C54 Lacs pertaining to the financial year 2021-22.

Risk Management

Your Company understands the importance of various risks faced by it and has adopted a Risk Management Policy which establishes various levels of accountability within the Company. The Company has also constituted a Risk Management Committee which ensures that the Company has appropriate and effective risk management systems which carries out risk identification, assessment and ensures that risk mitigation plans are in place. The Risk Management Committee identifies, from time to time, various risks to which the Company is subject to and has accordingly, aligned the concerned departments to take the necessary mitigating steps. Risk management has been inter-linked with the annual planning exercise where each function and business carries out fresh risk identification, assessment and draws up treatment plans.

A Risk Management Policy in terms of provisions of Section 134(3)(n) of the Act read with the Listing Regulations is in

place and is uploaded on the Company''s website i.e. https:// www.kajariaceramics.com/pdf/Risk_Management_Policy.pdf

Internal Control Systems and their adequacy

The Company believes in a strong internal control framework, which is necessary for business efficiency, management effectiveness and safeguarding assets. The Company has a well-defined internal control system in place, which is designed to provide reasonable assurance related to operation and financial control. The Management of the Company is responsible for ensuring that Internal Financial Control has been laid down in the Company and that controls are adequate and operating adequately.

Internal Audit of the Company''s operations are carried out by the Internal Auditors and periodically covers different areas of business. The audit scope, methodology to be used, reporting framework are defined well in advance, subject to consideration of the Audit Committee of the Company. The Internal Auditors evaluates the efficacy and adequacy of internal control system, its compliance with operating systems and policies of the Company and accounting procedures at all the locations of the Company. Based on the report of the Internal Auditors, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are placed before the Audit Committee of the Company. The Internal Audit also continuously evaluates the various processes being followed by the Company and suggests value addition, to strengthen such processes and make them more effective.

Internal Controls with respect to financial statements

The Company has an adequate system of internal financial control in place with reference to financial statements. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

Directors and Key Managerial Personnel

Mr. Raj Kumar Bhargava and Mr. Debi Prasad Bagchi completed their tenure as the Independent Director(s) of the Company and accordingly, they ceased to be the Independent Director(s) of the Company from the conclusion of the 36th Annual General Meeting held on 23rd September, 2022.

During the year 2022-23, the shareholders of the Company has accorded their approval(s) at the 36th Annual General Meeting (''AGM'') of the Company held on 23rd September, 2022 for appointment(s) of Dr. Lalit Kumar Panwar and Mr. Sudhir Bhargava

Details of remuneration under Section 197 of the Act and read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is stated in Annexure- 4, which forms part of this report.

Statutory Audit

M/s Walker Chandiok & Co LLP, Chartered Accountants, (Firm Registration Number 001076N/N500013), the Statutory Auditors of the Company has given their report(s) on the financial statements (Standalone & Consolidated) of the Company for the financial year ended 31st March, 2023, which form part of the Annual Report. There is no qualification, reservation, adverse remark, comments, observations or disclaimer given by the Statutory Auditors in their report(s). There were no frauds reported by the Statutory Auditors under the provisions of Section 143 of the Act.

M/s Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration Number 001076N/N500013), were re-appointed as the Statutory Auditors of the Company at the 36th Annual General Meeting of the Company held on 23rd September, 2022, for second term of five consecutive years to hold office from the conclusion of the 36th Annual General Meeting of the Company till the conclusion of the 41st Annual General Meeting of the Company. Hence, the tenure of the existing Statutory Auditors of the Company would expire at the conclusion of the 41st Annual General Meeting of the Company.

M/s Walker Chandiok & Co LLP, Chartered Accountants are eligible to continue as the Statutory Auditors of the Company for the remaining term in accordance with the provisions of the Act read with rules made thereunder and applicable laws.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s Chandrasekaran Associates, Company Secretaries, Delhi were appointed as the Secretarial Auditors, to undertake the Secretarial Audit of the Company for the year ended 31st March 2023. The Report of the Secretarial Audit is annexed herewith as Annexure 5.

There are no qualifications, reservations, adverse remarks, comments, observations or disclaimer made by the Secretarial Auditors in their report. There were no frauds reported by the Secretarial Auditors under the provisions of Section 143 of the Act.

as the Independent Director(s) for a period of five consecutive years effective from the conclusion of the 36th AGM of the Company.

Mr. Dev Datt Rishi, who is liable to retire by rotation, has offered himself for re-appointment as the Director at the ensuing AGM of the Company. The Board recommends for his re-appointment in the ensuing Annual General Meeting of the Company.

All Independent Directors of the Company have given declarations that they meet the criteria of independence as prescribed under Section 149(6) of the Act read with Regulations 16(1)(b) & 25(8) of the Listing Regulations and in the opinion of the Board of the Company, all Independent Directors of the Company have integrity, expertise, experience and proficiency as prescribed under the Companies (Appointment and Disqualification of Directors) Rules, 2014 read with the Companies (Accounts) Rules, 2014 (including amendment thereof).

All Directors of the Company have also given declarations that they are not debarred from holding the office of Director by virtue of any SEBI order or any other such statutory authority as required under the Circular dated 20th June, 2018 issued by BSE Limited and National Stock Exchange of India Limited.

Further, except as stated above there is no other change in the composition of Key Managerial Personnel of the Company.

Performance Evaluation

The Board of the Company, on recommendation of the Nomination and Remuneration Committee and in line with the Nomination and Remuneration Policy of the Company, has carried out an annual performance evaluation of the Board as a whole, its Committees and all Directors including the Chairman.

The manner in which the annual performance evaluation has been carried out has been explained in the Corporate Governance Report.

Nomination and Remuneration Policy

On the recommendation of the Nomination and Remuneration Committee, the Board has framed a policy for selection and appointment of Directors, Senior Management including Key Managerial Personnel and other Senior Management and their remuneration. The Nomination and Remuneration Policy includes the criteria for determining qualification, positive attributes, independence, etc. is placed on the Company''s website, i.e. https:// www.kajariaceramics.com/pdf/Nomination_Remuneration_ Policy.pdf

Disclosures under the Companies Act, 2013 and rules made thereunder:

Annual Return

The Annual Return in Form MGT-7 is available at https:// www.kajariaceramics.com/pdf/Annual_Return_Form_2022-23. pdf

Compliance of the Secretarial Standards

During the year under review, the Company has complied with the applicable provisions of the Secretarial Standard on meetings of the Board of Directors (''SS-1'') and the Secretarial Standard on General Meetings (''SS-2'') issued by the Institute of Company Secretaries of India.

Particulars of Loans, Investments and Guarantees

Particulars of Loans, Investments and Guarantees, covered under the provisions of Section 186 of the Act are given in the Notes Nos. 6, 7, and 40 to the Financial Statements.

Conservation of energy, technology absorption and foreign exchange earnings & outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed under the Act are provided in Annexure - 6 to this report.

Meetings of Board

The Board of the Company met six (6) times during the financial year 2022-23 on 17th May, 2022, 21st July, 2022, 3rd October, 2022, 2nd November, 2022, 28th January, 2023 and 25th March, 2023. Details of the meetings of the Board of Directors held during the financial year 2022-23 and attendance thereof are disclosed in the Corporate Governance Report.

Audit Committee

The Composition of Audit Committee is disclosed in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.

Vigil Mechanism

The Company has established a Vigil Mechanism for the Directors and Employees of the Company by adopting the Whistle Blower Policy to report about the genuine concerns, unethical behaviour, fraud or violation of Company''s Code of Conduct and leakage/ suspected leakage of Unpublished Price Sensitive Information with respect to the Company. The Whistle Blower Policy may be accessed on the website of the Company i.e. https:// www.kajariaceramics.com/pdf/whistel_blowing_policy.pdf

Maintenance of Cost Records

The Company is not required to maintain cost records as per sub-section (1) of Section 148 of the Act.

Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal), Act, 2013

The Company has in place a Policy on Prevention of Sexual Harassment at the Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. This Policy may be accessed on the Company''s website i.e. https://www.kajariaceramics.com/ pdf/prevention_of_sexual_harassment_at_workplace.pdf

Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (Permanent, Contractual, Temporary and Trainees) are covered under this Policy. The Company has not received any sexual harassment complaints during the year 2022-23 nor any complaint is pending at the end of the year 2022-23.

Particulars of Employees

The information required pursuant to Section 197 of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is attached as Annexure- 7 to this Report.

Deposits

The Company did not invite/accept any deposit within the meaning of Section 73 of the Act and the rules made thereunder.

Proceeding under Insolvency and Bankruptcy Code, 2016

No application or any proceeding has been filed against the Company under the Insolvency and Bankruptcy Code, 2016, during the financial year 2022-23.

Details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof

The Company has not made any one-time settlement, therefore, the same is not applicable.

Significant and material orders passed by the regulators or courts or tribunals

There is no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and the Company''s operations in future.

Cautionary Statement

Statements in this ''Director''s Report'' & ''Management Discussion and Analysis'' describing the Company''s objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make difference to the Company''s operations including raw material/fuel availability and its prices, cyclical demand and pricing in the Company''s principle markets, changes in the Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other ancillary factors.

Appreciation and Acknowledgement

The Directors take this opportunity to express their deep sense of gratitude to the Banks, Central and State Governments and their Departments and the Local Authorities for their continued guidance and support.

Your Directors would also like to record their appreciation for the support and cooperation your Company has been receiving from its suppliers, dealers, business partners and others associated with the Company.

Your Directors place on record their sincere appreciation to the employees at all levels for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain as industry leader.

And to you, our shareholders, we are deeply grateful for the confidence and faith that you have always reposed in us.

For and on behalf of the Board Ashok Kajaria

Chairman & Managing Director DIN:00273877

Place: New Delhi Date: 26^th July, 2023

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Mar 31, 2022

Your Directors are pleased to present the 36^th Annual Report together with the audited financial statements of your the Company for the financial year ended 31^st March 2022.

Financial Results

The Company''s financial performance for the year ended on 31^st March 2022 is summarized below:

(I in Crores)
	Standalone		Consolidated
Particular	Year ended 31st March 2022 31st	Year ended March 2021	Year ended 31st March 2022	Year ended 31st March 2021
Revenue from Operations	3,299	2,523	3,705	2,781
Profit Before Other Income, Exceptional Items, Depreciation, Interest and taxes	532	460	611	509
Profit before Tax	485	413	510	413
Tax Expense	123	105	127	104
Profit After Tax (before Minority interest)	362	308	383	309
Minority Interest	-	-	(6)	(1)
Profit After Tax (after Minority interest)	362	308	377	308

Financial highlights and state of Affairs of the Company

In a fiscal marked with ups and downs, Kajaria remained steadfast on its resolve to sustain its momentum.

Despite the rather bumpy start to FY22, Kajaria remained resilient with disciplined determination to report a stellar performance. The cohesive team worked relentlessly on widening the reach and uplifting the aesthetic quotient of its product offering which allowed it to capitalise on the burgeoning opportunities in the residential housing and commercial office space sectors.

As a heartening fallout, the Company''s revenue crossed the C3,000 crore mark for the first time in its illustrious journey, C3,705 crore.

The Company reported a Net Profit of C376.98 crore, an increase of 22% over the previous year.

The State of Affair of the Company is detailed in the ''Management Discussion and Analysis'' section which forms part of this report.

Outlook

The outlook for FY23 appears considerably promising owing to the sustained demand from the real estate sector both residential and commercial. Also, the Government''s thrust on creating world-class infrastructure is further fueling demand for tiles.

The residential space continues to grow at a healthy uptick in Tier 2 and 3 towns owing to the intensifying reverse-migration trends in the post-pandemic era. Further, the home improvement space continues to generate increasing opportunities as millennials have expressed their preference in staying in lesser cluttered pin codes. Thus we see accelerated traction not just from new projects but also from increased application of tiles in replacement and renovation projects. In fact, we expect strong momentum from the replacement market also going forward.

The commercial office space, which was stagnant post pandemic era, is also gaining significant traction as India continues to remain in the global spotlight as a reliable sourcing base for advanced economies.

These are medium term trends that are expected to continue over coming years, creating healthy growth opportunities over the foreseeable future.

Additionally, with the Morbi cluster strengthening its focus on becoming stronger in the global marketplace, have opened a sizeable market for the branded player to capitalise upon.

The combination of these factors augur well for the leading tile the Company of India.

The only challenge that could impact the business fortunes for FY23 are the inflationary headwinds owing to the Russia-Ukraine crisis that could impact overall business profitability. The Company is working relentlessly on optimising its cost structure to de-risk its business profitability.

Dividend

Your Directors have recommended to the shareholders a final dividend of 73/- (i.e. 300%) per equity share of 71/- each fully paid-up for the financial year ended March 31, 2022, if approved at the ensuing Annual General Meeting (''AGM'').

During the year 2021-22, the Company has also paid Interim Dividend of 78/- (i.e. 800%) per equity share of 71 each fully paid-up aggregating to C127.34 crores thereby making the total Dividend (Interim Dividend & Final Dividend) of 711/- per equity share of 71/- each fully paid-up (previous year 710/- per equity shares of 71/- each fully paid-up) aggregating to C175.09 crores.

Consolidated Financial Statements

The Company adopted Indian Accounting Standard (Ind-AS) from 1^st April, 2016 and accordingly, the Consolidated Financial Statements have been prepared in accordance with the Accounting Standard notified under Section 133 of the Companies Act, 2013 (''the Act'') and the relevant rules issued thereunder read with the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (''the Listing Regulations'') and the other accounting principles generally accepted in India. The Consolidated Financial Statements form part of the Annual Report.

During the year under review, there are no material changes and commitments affecting the financial position of the Company and also no change in the nature of business of the Company.

Holding, Subsidiaries, Associate, Joint Venture Companies and their performance

During the year under review, Kajaria Tiles Private Limited, wholly-owned subsidiary, has been amalgamated with the Company pursuant to the order of the National Company Law Tribunal, Chandigarh Bench dated November 26, 2021.

A report on performance and financial position (Form AOC-1) of each of the subsidiaries as per the Act is provided as Annexure-1.

Share Capital

During the financial year 2021-22, the Authorised Share Capital of the Company has been increased by way of amalgamation of Kajaria Tiles Private Limited with the Company in accordance with the Scheme of Amalgamation as approved by the National the Company Law Tribunal, Chandigarh Bench. Accordingly, the Authorised Share Capital of the Company is 7154,10,00,000 (Rupees One Hundred Fifty Four Crores Ten Lacs only) divided into 77,00,00,000 (Seventy Seven Crores) Equity Shares of 71/-each (Rupee One Only) aggregating to 777,00,00,000 (Rupees Seventy Seven Crores Only) and 77,10,000 (Seventy Seven Lacs Ten Thousand) Redeemable Preference Shares of 7100/- each (Rupees One Hundred Only) aggregating to 777,10,00,000 (Rupees Seventy Seven Crores Ten Lacs Only).

During the year 2021-22, the Company''s paid up share capital has also been increased by issue of 1,23,050 equity shares of 71/- each pursuant to the Kajaria Employee Stock Option Scheme 2015. Accordingly, as on 31^st March, 2022, the paid-up share capital of the Company is 15,92,04,050 equity shares of 71 each.

The Company has not issued shares with differential voting rights or sweat equity shares during the year 2021-22. As on 31^st March, 2022, none of the Directors of the Company hold any instruments convertible into equity shares of the Company.

Employee Stock Option Scheme

Kajaria Employee Stock Option Scheme 2015 (''ESOP Scheme 2015'') was approved by the shareholders of the Company on 7^th September, 2015 for issue and allotment of options exercisable into not more than 10,62,000* equity shares of C1 each (Originally the ESOP Scheme 2015 was for 5,31,000 equity shares of C2 each) to eligible employees of the Company and its subsidiaries. The ESOP Scheme 2015 is administered by the Nomination and Remuneration Committee of the Board of Directors (''the Board'') of the Company. On 20^th October 2015, the Nomination and Remuneration Committee of the Company had granted 4,58,000* equity shares of C1 each (''Stock option'') to the employees of the Company and its subsidiaries. 1,37,700 equity shares of C1 each (11,700 equity shares during the year 2020-21, 29,000 equity shares during the year 2019-20, 44,000 equity shares during the year 201819, 13,000 equity shares during the year 2017-18 and 40,000 equity shares during the year 2016-17) had been forfeited/lapsed due to resignation/death of ESOP Option holders.

During the financial year 2021-22, the stock options under the ESOP Scheme 2015 has been increased from 10,62,000 options to 15,87,000 options equivalent to 15,87,000 equity shares of C1/- each by addition of 5,25,000 options through the shareholders'' approval obtained on 24^th March, 2022. Further, the Company has granted 8,37,600 options equivalent to 8,37,600 equity shares of C1/- each to the eligible employees of the Company and its subsidiaries @ C980 per options in two tranches and the same will be vested within 5 years of the grant date. Details regarding the ESOP Scheme 2015 are given at Note No. 43 to the financial statements.

During the year under review, there are no material changes in the ESOP Plan 2015 and the same is in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (''ESOP Regulations''). The disclosures under Regulations 14 of ESOP Regulations is uploaded on the Company''s website viz.: https://www.kajariaceramics.com/pdf/Disclosure_pursuant_to_ Reg_14_of_SEBI_SBEB_SE_Reg_2021_for_FY_2021_22_june22. pdf

*During the year 2016-17, equity shares of the Company had been sub-divided from C2 per share to C1 per share.

Transfer to Reserves

During the year under review, there is no transfer of fund to the Company''s General Reserve Account.

Directors'' Responsibility Statement

In terms of the provisions of the Companies Act, 2013, the Directors confirm that:

i) In the preparation of the annual accounts for the year ended on 31^st March, 2022, the applicable accounting standards have been followed and no material departures have been made from the same;

ii) Appropriate accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31^st March, 2022 and of the profit of the Company for the period ended 31^st March, 2022;

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The annual accounts have been prepared on a going concern basis;

v) The Company is following up the proper Internal financial controls and such internal financial controls are adequate and are operating effectively; and

vi) The Company has devised proper systems to ensure the Compliance with the provisions of all the applicable laws and that such systems are adequate and operating effectively.

Corporate Governance

The Company has complied with the Corporate Governance requirements as stipulated under the Listing Regulations. A separate section on corporate governance, along with a certificate from M/s Chandrasekaran Associates, the Company Secretaries confirming the compliance, is annexed and forms part of the Annual Report.

Management Discussion and Analysis Report

Management Discussion and Analysis on matters related to the business performance as stipulated in the Listing Regulations, is given as a separate section in the Annual Report.

Related Party Transactions

For all related party transactions, prior omnibus approvals of the Audit Committee and the Board of Directors, as may be required under the applicable laws, are usually obtained on yearly basis, which are of a foreseen and repetitive nature and such approval is in the interest of the Company. The transactions entered into, pursuant to the omnibus approvals so granted, were placed before the Audit Committee by way of a statement giving details of all related party transactions for its review. All related party transactions are disclosed in Note No. 40 to the financial

statements. The particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 of the Act in the prescribed Form AOC-2 is annexed as Annexure- 2.

The Board of the Company has, at its meeting held on 17^th May, 2022, on recommendation of the Audit Committee, approved the revised the Related Party Policy of the Company, in order to ensure compliance of the provisions of the Listing Regulations and circulars, issued by the SEBI, from time to time. The Related Party Transactions Policy is uploaded on the Company''s website i.e. https://www. kajariaceramics.com/pdf/RelatedPartyTransactionPolicy.pdf

Corporate Social Responsibility Initiatives

In terms of provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 [''the CSR Rules''], the Company has formulated a Corporate Social Responsibility Policy (''CSR Policy'') indicating the activities to be undertaken by the Company. The constitution of the Corporate Social Responsibility Committee (''CSR Committee'') is disclosed in the Annual Report on CSR Activities as an Annexure - 3 of this report.

During the financial year 2021-22, the CSR Policy of the Company has been revised as per the amendments in Section 135 and other applicable provisions, if any, of the Act, read with CSR Rules, notified on 22^nd January, 2021.

The Corporate Social Responsibility (''CSR'') Policy may be accessed on the Company''s website i.e. https://www.kajariaceramics.com/ pdf/CSR_Policy.pdf

Your Company strives to make a difference in the lives of people with a special focus on neighbouring and local areas of the Company''s manufacturing locations. Your Company has implemented various CSR programmes/projects which made positive impacts mainly in the areas of health, sanitation, social relief and education, etc. During the year under review, the CSR programmes/activities initiated by the Company includes taking steps for Swachh Bharat, preventive health care, constructing sanitation facilities in the schools, etc. near the manufacturing facilities, contributing to the education and social economic development of under privileged children and steps towards protections from Covid-19, etc. These CSR initiatives are implemented directly and/or through trusts/ societies/NGOs. These projects/activities are also in accordance with Schedule VII of the Act.

The Annual Report on CSR activities as prescribed under the CSR Rules is set out as Annexure-3, forming part of this Report. The Company had incurred CSR expenditure of C696.48 Lacs during the year 2021-22. The Company has further transferred C54 Lacs of the CSR budget for the financial year 2021-22, pertains to the

ongoing CSR projects/activities, which are to be incurred during the financial year 2022-23 and onwards, in accordance with the provisions of the Act read with the CSR Rules.

Scheme of Amalgamation

A Scheme of Arrangement adopted by the Board of Directors of the Company (''the Board'') during the year 2019-20, which provides for, inter-alia, the amalgamation of Kajaria Tiles Private Limited [''KTPL''] (Formerly known as Kajaria Floera Ceramics Private Limited), wholly-owned subsidiary with the Company with appointed date as 1^st April, 2019 (''Scheme'') and the same was filed before the Hon''ble National Company Law Tribunal, Chandigarh Bench (''NCLT'') vide application dated 26^th September, 2019 for approval under Sections 230-232 read with other applicable provisions of the Act and the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. During the year 2021-22, the NCLT has sanctioned the said Scheme (vide NCLT''s order dated November 26, 2021). Accordingly, KTPL has been amalgamated with the Company, pursuant to the approved Scheme as above said.

Risk Management

Your Company understands the importance of various risks faced by it and has adopted a Risk Management Policy which establishes various levels of accountability within the Company. The Company has also constituted a Risk Management Committee which ensures that the Company has appropriate and effective risk management systems which carries out risk identification, assessment and ensures that risk mitigation plans are in place. The Risk Management Committee identifies, from time to time, various risks to which the Company is subject to and has accordingly, aligned the concerned departments to take the necessary mitigating steps. Risk management has been inter-linked with the annual planning exercise where each function and business carries out fresh risk identification, assessment and draws up treatment plans.

A Risk Management Policy in terms of provisions of Section 134(3)(n) of the Act read with the Listing Regulations is in place and is uploaded on the Company''s website i.e. https://www. kajariaceramics.com/pdf/Risk_Management_Policy.pdf

Internal Control Systems and their adequacy

The Company believes in a strong internal control framework, which is necessary for business efficiency, management effectiveness and safeguarding assets. The Company has a well-defined internal control system in place, which is designed to provide reasonable assurance related to operation and financial control. The Management of the Company is responsible for ensuring that Internal Financial Control has been laid down in the Company and that controls are adequate and operating adequately.

Internal Audit of the Company''s operations are carried out by the Internal Auditors and periodically covers different areas of business. The audit scope, mythology to be used, reporting framework are defined well in advance, subject to consideration of the Audit Committee of the Company. The Internal Auditors evaluates the efficacy and adequacy of internal control system, its compliance with operating systems and policies of the Company and accounting procedures at all the locations of the Company. Based on the report of the Internal Auditors, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are placed before the Audit Committee of the Company. The Internal Audit also continuously evaluates the various processes being followed by the Company and suggests value addition, to strengthen such processes and make them more effective.

Internal Controls with respect to financial statements

The Company has an adequate system of internal financial control in place with reference to financial statements. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

Directors and Key Managerial Personnel

During the year 2021-22, the shareholders of the Company has accorded their approval(s) at the Annual General Meeting (AGM'') of the Company held on 28^th September, 2021 for the reappointments) of Mr. Ashok Kajaria as the Chairman & Managing Directors of the Company and Mr. Chetan Kajaria and Rishi Kajaria as the Joint Managing Director(s) of the Company, for the further period of five (5) years w.e.f. 1^st April, 2021 to 31^st March, 2026.

Mr. Chetan Kajaria and Mr. Rishi Kajaria, who are liable to retire by rotation, have offered themselves for re-appointment(s) as the Director(s) at the ensuing AGM of the Company. The Board recommends for their re-appointment(s) in the ensuing AGM of the Company.

The Board of Directors (''the Board'') has recomended appointment of Dr. Lalit Kumar Panwar as an Independent Director for a period of five consecutive years to be effective from the conclusion of the ensuring AGM of the Company, to the Shareholders of the Company for their approval at the ensuring AGM of the Company.

All Independent Directors of the Company have given declarations that they meet the criteria of independence as prescribed under Section 149(6) of the Act read with Regulations 16(1)(b) & 25(8) of the Listing Regulations and in the opinion of the Board of

the Company, all Independent Directors of the Company have integrity, expertise, experience as prescribed under the Companies (Appointment and Disqualification of Directors) Rules, 2014 read with the Companies (Accounts) Rules, 2014 (including amendment thereof).

All Directors of the Company have also given declarations that they are not debarred from holding the office of Director by virtue of any SEBI order or any other such statutory authority as required under the Circular dated 20^th June, 2018 issued by BSE Limited and National Stock Exchange of India Limited.

Further, except as stated above there is no other change in the composition of Key Managerial Personnel of the Company.

Performance Evaluation

The Board has, on recommendation of the Nomination and Remuneration Committee and in line with the Nomination and Remuneration Policy of the Company, carried out an annual performance evaluation of the Board as a whole, its Committees and all Directors including the Chairman.

The manner in which the annual performance evaluation has been carried out has been explained in the Corporate Governance Report.

Nomination and Remuneration Policy

On the recommendation of the Nomination and Remuneration Committee, the Board has framed a policy for selection and appointment of Directors, Senior Management including Key Managerial Personnel and other Senior Management and their remuneration. The Nomination and Remuneration Policy includes the criteria for determining qualification, positive attributes, independence, etc. is placed on the Company''s website, i.e. https:// www.kajariaceramics.com/pdf/Nomination_Remuneration_ Policy.pdf

Details of remuneration under Section 197 of the Act and read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is stated in Annexure- 4, which forms part of this report.

Statutory Audit

M/s Walker Chandiok & Co LLP, Chartered Accountants, (Firm Registration Number 001076N/N500013), the Statutory Auditors of the Company has given their report(s) on the financial statements of the Company for the financial year ended 31^st March, 2022, which forms part of the Annual Report. There is no qualification, reservation, adverse remark, comments, observations or disclaimer given by the Statutory Auditors in their report(s). There were no

frauds reported by the Statutory Auditors under the provisions of Section 143 of the Companies Act, 2013.

M/s Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration Number 001076N/N500013), were appointed as the Statutory Auditors of the Company at the 31^st Annual General Meeting (AGM'') of the Company held on August 10, 2017, for a period of five years effective from the conclusion of the 31^st AGM of the Company upto the conclusion of the 36^th AGM of the Company. Hence, the tenure of the existing Statutory Auditors of the Company would expire at the conclusion of the 36^th AGM of the Company.

Thus, subject to approval of the shareholders of the Company in the ensuing AGM of the Company, the Board, on the recommendation of Audit Committee, has approved and recommended the re-appointment of M/s Walker Chandiok & Co LLP, Chartered Accountants, as the Statutory Auditors of the Company for the second term of a further period of five years effective from the conclusion of the 36^th AGM of the Company till the conclusion of the 41^st AGM of the Company, on such remuneration as may be decided by the shareholders of the Company.

M/s Walker Chandiok & Co LLP, Chartered Accountants has also confirmed that their re-appointment, if made, would be in accordance with the conditions specified under the provisions of Sections 139, 141 of the Act read with the Companies (Audit and Auditors) Rules, 2014.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s Chandrasekaran Associates, Company Secretaries, Delhi were appointed as the Secretarial Auditors, to undertake the Secretarial Audit of the Company for the year ended 31^st March 2022. The Report of the Secretarial Audit is annexed herewith as Annexure 5.

There are no qualifications, reservations, adverse remarks, comments, observations or disclaimer made by the Secretarial Auditors in their report. There were no frauds reported by the Secretarial Auditors under the provisions of Section 143 of the Act.

Disclosures under the Companies Act, 2013 and rules made thereunder:Annual Return

The Annual Return in Form MGT-7 is available at https://www. kajariaceramics.com/pdf/Annual_Return_Form_MGT_7_2021-22. pdf

Compliance of the Secretarial Standards

During the year under review, the Company has complied with the applicable provisions of the Secretarial Standard on meetings of the Board of Directors (''SS-1'') and the Secretarial Standard on General Meetings (''SS-2'') issued by the Institute of Company Secretaries of India.

Particulars of Loans, Guarantees and Investments

Particulars of Loans, Guarantees and Investments, covered under the provisions of Section 186 of the Act are given in the Notes Nos. 6, 7, 38 and 40 to the Financial Statements.

Conservation of energy, technology absorption and foreign exchange earnings & outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed under the Act are provided in Annexure - 6 to this report.

Meetings of Board

The Board of Directors of the Company met four (4) times during the financial year 2021-22 on 14^th June, 2021, 3^rd August, 2021, 22^nd October, 2021 and 21^st January, 2022. Details of the meetings of the Board of Directors held during the financial year 2021-22 and attendance thereof are disclosed in the Corporate Governance Report.

Audit Committee

The Composition of Audit Committee is disclosed in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.

Vigil Mechanism

The Company has established a Vigil Mechanism for the Directors and Employees of the Company by adopting the Whistle Blower Policy to report about the genuine concerns, unethical behaviour, fraud or violation of the Company''s Code of Conduct and leakage/ suspected leakage of Unpublished Price Sensitive Information with respect to the Company. The Whistle Blower Policy may be accessed on the website of the Company i.e. https://www. kajariaceramics.com/pdf/whistel_blowing_policy.pdf

Maintenance of Cost Records

The Company is not required to maintain of cost records as per sub-section (1) of Section 148 of the Act.

Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal), Act, 2013

The Company has in place a Policy on Prevention of Sexual Harassment at the Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. This Policy may be accessed on the Company''s website i.e. https://www.kajariaceramics.com/pdf/ prevention_of_sexual_harassment_at_workplace.pdf

Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (Permanent, Contractual, Temporary and Trainees) are covered under this Policy. The Company has not received any sexual harassment complaints during the year 2021-22 nor any complaint is pending at the end of the year 2021-22.

Particulars of Employees

The information required pursuant to Section 197 of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is attached as Annexure- 7 to this Report.

Deposits

The Company did not invite/accept any deposit within the meaning of Section 73 of the Act and the rules made thereunder.

Proceeding under Insolvency and Bankruptcy Code, 2016

No application or any proceeding has been filed against the Company under the Insolvency and Bankruptcy Code, 2016, during the financial year 2021-22.

Details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof

The Company has not made any one-time settlement, therefore, the same is not applicable.

Significant and material orders passed by the regulators or courts or tribunals

There is no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and the Company''s operations in future.

Cautionary Statement

Statements in this ''Director''s Report'' & ''Management Discussion and Analysis'' describing the Company''s objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make difference to the Company''s operations including raw material/fuel availability and its prices, cyclical demand and pricing in the Company''s principle markets, changes in the Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other ancillary factors.

Appreciation and Acknowledgement

The Directors take this opportunity to express their deep sense of gratitude to the Banks, Central and State Governments and their Departments and the Local Authorities for their continued guidance and support.

Your Directors would also like to record their appreciation for the support and cooperation your Company has been receiving from its suppliers, dealers, business partners and others associated with the Company.

Your Directors place on record their sincere appreciation to the employees at all levels for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain as industry leader.

And to you, our shareholders, we are deeply grateful for the confidence and faith that you have always reposed in us.

For and on behalf of Board Ashok Kajaria

Place: New Delhi Chairman & Managing Director

Date: 21^st July, 2022 DIN: 00273877

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Mar 31, 2021

Your Directors are pleased to present the 35^th Annual Report together with the audited financial statements of your Company for the financial year ended 31^st March 2021.

FINANCIAL RESULTS

The Company''s financial performance for the year ended on 31st March 2021 is summarized below:				(B in Crores)
	Standalone		Consolidated
Particular	Year ended 31st March 2021	Year ended 31st March 2020	Year ended 31st March 2021	Year ended 31st March 2020
Revenue from Operations	2523	2572	2781	2808
Profit Before Other Income, Exceptional Items, Depreciation, Interest and taxes	433	376	509	416
Profit before Tax	406	339	413	312
Tax Expense	104	60	104	59
Profit After Tax (before Minority interest)	302	279	309	253
Minority Interest	-	-	(1)	(2)
Profit After Tax (after Minority interest)	302	279	308	255

Financial highlights and state of Affairs of the Company

In an unusual year, Kajaria demonstrated its resilience to report a good performance in the face of unprecedented headwinds.

A tepid start owing to the pandemic was followed by an unexpected upsurge in demand that sustained through most part of the second half of the year. Prudently prepared for this sudden shift in gears, Kajaria remained committed to delivering value to its customers and creating wealth for its shareholders.

Despite a marginal dip of 1% in revenue from operations, Net Profit increased by 21%. The Company reported a Net Profit in excess of A300 Crore for the first time in its history.

The State of Affair of the Company is detailed in the ''Management Discussion and Analysis'' section which forms part of this report.

Outlook

The start to the new fiscal almost mirrored with that of FY21. The only difference was that the second wave was even more aggressive in its spread and fatal in its consequence. Even as the country endured the pain of immense loss of lives and livelihood, the resurgent Indian flattened the pandemic curve in a shorter time span. The journey of economic progress has restarted once again.

The uptick in consumer confidence has helped in kick starting commercial activity. Moreover, the aggressive vaccination drive across districts and cities suggest that India should be lesser impacted for a third wave, if any.

Moreover, with the Morbi cluster focused on exports, the vacuum created in the domestic market augurs well for the national brands to widen their presence and increase market share. Additionally,

the Government thrust on investment in infrastructure creation is expected to open new growth vistas.

Over the medium term, the growing prevalence and increasing acceptance of working from anywhere culture promises to reduce urbanization. The workforce would prefer to stay in Tier II, III and IV towns. These towns could then emerge as new construction hubs dotting the Indian landmass. When this transpires, demand for tiles, the preferred flooring and cladding solution, will continue to move northward.

Dividend

The Board of Directors of the Company had declared Interim Dividend of B10/- (i.e. 1000%) per equity share for the year ended 31^st March, 2021 at their meeting held on 21^st January, 2021 and accordingly, during the year 2020-21, the Company had paid the Interim Dividend for the year ended 31^st March, 2021 aggregating to B 159.08 Crores. The said Interim Dividend shall be deemed to be Final Dividend for the financial year ended 31^st March, 2021. In view of same, your Directors have not recommended final dividend for the financial year ended on 31^st March 2021.

Consolidated Financial Statements

The Company adopted Indian Accounting Standard (Ind-AS) from 1^st April, 2016 and accordingly, the Consolidated Financial Statements have been prepared in accordance with the Accounting Standard notified under Section 133 of the Companies Act, 2013 (''the Act'') and the relevant rules issued thereunder read with the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 ('' the Listing Regulations'') and the other accounting principles generally accepted in India. The Consolidated Financial Statements form part of the Annual Report.

During the year under review, there are no material changes and commitments affecting the financial position of the company and also no change in the nature of business of the company.

Holding, Subsidiaries, Associate, Joint Venture Companies and their performance

During the year under review, no new company has become or ceased as subsidiary of the Company. A report on performance and financial position (Form AOC-1) of each of the subsidiaries as per the Act is provided as Annexure-1.

Share Capital

The Authorised Share Capital of the Company is B 129,10,00,000 (Rupees One Hundred Twenty Nine Crores Ten Lakh only) divided into 52,00,00,000 (Fifty Two Crores) Equity Shares of B1/- each (Rupee One) aggregating to B52,00,00,000 (Rupees Fifty Two Crores Only) and 77,10,000 (Seventy Seven Lakhs Ten Thousand

Only) Redeemable Preference Shares of B100/- each (Rupees One Hundred Only) aggregating to B77,10,00,000 (Rupees Seventy Seven Crores Ten Lakh Only).

During the year 2020-21, the Company''s paid up share capital has been increased by issue of 1,23,800 equity shares of B1/- each pursuant to the Kajaria Ceramics Employee Stock Option Plan 2015. Accordingly, the paid up share capital of the Company, as on 31^st March, 2021, was 15,90,81,000 equity shares of B1 each.

After the closure of the financial year 2020-21, the Company''s paid up share capital has further been increased by issue of 86,350 equity shares of B1/- each pursuant to the Kajaria Ceramics Employee Stock Option Plan 2015. Thus, presently, the paid up share capital of the Company is 15,91,67,350 equity shares of B1 each.

The Company has not issued shares with differential voting rights or sweat equity shares during the year 2020-21. As on 31^st March, 2021, none of the Directors of the Company hold any instruments convertible into equity shares of the Company.

Employee Stock Option Scheme

Kajaria Ceramics Employee Stock Option Plan 2015 (''The ESOP Plan 2015'') was approved by the shareholders of the Company on 7^th September, 2015 for issue and allotment of options exercisable into not more than 10,62,000* equity shares of B1 each (Originally the ESOP Plan 2015 was for 5,31,000 equity shares of B 2 each) to eligible employees of the Company and its subsidiaries. The ESOP Plan 2015 is administered by the Nomination and Remuneration Committee of the Board of Directors (''the Board'') of the Company. On 20^th October 2015, the Nomination and Remuneration Committee of the Company had granted 4,58,000* equity shares of B1 each (''Stock option'') to the employees of the Company and its subsidiaries. 1,37,700 equity shares of B1 each (11,700 equity shares during the year 2020-21, 29,000 equity shares during the year 2019-20, 44,000 equity shares during the year 2018-19, 13,000 equity shares during the year 2017-18 and 40,000 equity shares during the year 2016-17) had been forfeited/lapsed due to resignation/death of ESOP Option holders. Details regarding the ESOP Plan 2015 are given at Note No. 43 to the financial statements.

During the year under review, there are no material changes in the ESOP Plan 2015 and the same is in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014 (''ESOP Regulations''). The disclosures under Regulations 14 of ESOP Regulations is uploaded on the Company''s website viz.: https://www.kajariaceramics.com/pdf/disclosure_pursuant_to_ sebi_2020_21.pdf

* During the year 2016-17, equity shares of the Company had been sub-divided from B2 per share to B1 per share.

Transfer to Reserves

During the year under review, there is no transfer of fund to the Company''s General Reserve Account.

Directors'' Responsibility Statement

In terms of the provisions of the Companies Act, 2013, the Directors confirm that:

i) In the preparation of the annual accounts for the year ended on 31^st March, 2021, the applicable accounting standards have been followed and no material departures have been made from the same;

ii) Appropriate accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31^st March, 2021 and of the profit of the Company for the period ended 31^st March, 2021;

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The annual accounts have been prepared on a going concern basis;

v) The Company is following up the proper Internal financial controls and such internal financial controls are adequate and are operating effectively; and

vi) The Company has devised proper systems to ensure the Compliance with the provisions of all the applicable laws and that such systems are adequate and operating effectively.

Corporate Governance

The Company has complied with the Corporate Governance requirements as stipulated in the Listing Regulations. A separate section on corporate governance, along with a certificate from M/s Chandrasekaran Associates, Practicing Company Secretary confirming the compliance, is annexed and forms part of the Annual Report.

Management Discussion and Analysis Report

Management Discussion and Analysis on matters related to the business performance as stipulated in the Listing Regulations is given as a separate section in the Annual Report.

Related Party Transactions

For all related party transactions, prior omnibus approvals of

the Audit Committee and the Board of Directors, as may be required under the applicable laws, are usually obtained on yearly basis, which are of a foreseen and repetitive nature and such approval is in the interest of the Company. The transactions entered into, pursuant to the omnibus approvals so granted, are placed before the Audit Committee by way of a statement giving details of all related party transactions for its review. All related party transactions are disclosed in Note No. 40 to the financial statements. Material related party transactions with subsidiaries which are at arm''s length price are disclosed in Form AOC-2 annexed as Annexure- 2. The Related Party Transactions Policy is uploaded on the Company''s website i.e. https://www. kajariaceramics.com/pdf/RelatedPartyTransactionPolicy.pdf

Corporate Social Responsibility Initiatives

In terms of provisions of Section 135 of the Companies Act, 2013 (''the Act'') read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 [''the CSR Rules''], the Company has formulated a Corporate Social Responsibility Policy (''CSR Policy'') indicating the activities to be undertaken by the Company. The constitution of the Corporate Social Responsibility Committee (''CSR Committee'') is disclosed in the Annual Report on CSR Activities as an Annexure-3 of this report.

The Board, at its meeting held on June 14, 2021, has approved the revised CSR Policy of the Company, as per the amendments in Section 135 and other applicable provisions, if any, of the Act, read with CSR Rules, notified on 22^nd January, 2021

The Corporate Social Responsibility (''CSR'') Policy may be accessed on the Company''s website i.e. https://www.kajariaceramics.com/ pdf/CSR_Policy.pdf

Your Company strives to make a difference in the lives of people with a special focus on neighbouring and local areas of the Company''s manufacturing locations. Your Company has implemented various CSR programmes / projects which made positive impacts mainly in the areas of health, sanitation, conservation of natural resources, social relief, promoting sports, rural development and education, etc. During the year under review, the CSR programmes initiated by the Company includes taking steps for Swachh Bharat, preventive health care, constructing sanitation facilities in the schools, etc. near the manufacturing facilities, contributing to the education and social economic development of under privileged children and for rural area development. These CSR initiatives are implemented directly and through various trusts / societies / NGOs. These projects are also in accordance with Schedule VII of the Act.

The Annual Report on CSR activities as prescribed under the CSR Rules is set out as Annexure-3, forming part of this Report. The

Company had incurred CSR expenditure of B 666 Lakhs during the year 2020-21. The remaining amount of the CSR budget for the financial year 2020-21 (i.e. B 67 Lakhs), pertains to the ongoing CSR projects/activities, which is to be incurred during the financial year 2021-22 and onwards, in accordance with the provisions of the Act read with the CSR Rules.

The unspent amount of B 67 Lakhs which pertains to unspent CSR amount for the financial year 2020-21 towards ongoing CSR projects/activities had been carried over to the financial year 2021-22 and onwards, in accordance with the provisions of the Act read with the CSR Rules.

Scheme of Amalgamation

A Scheme of Arrangement adopted by the Board of the Company (''the Board'') during the year 2019-20, which provides for, inter-alia, the amalgamation of Kajaria Tiles Private Limited (Formerly known as Kajaria Floera Ceramics Private Limited), wholly-owned subsidiary with the Company with appointed date as 1^st April, 2019 (''Scheme'') and the same was filed before the Hon''ble National Company Law Tribunal, Chandigarh Bench (''NCLT'') vide application dated 26^th September, 2019 for approval under Sections 230-232 read with other applicable provisions of the Companies Act, 2013 and the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. The Company had received the order dated 3^rd February, 2020 from the NCLT with respect to the first motion application filed by the Company. The Company has filed the Second Motion Application with the NCLT and the same is pending before the NCLT.

Risk Management

Your Company understands the importance of various risks faced by it and has adopted a Risk Management Policy which establishes various levels of accountability within the Company. The Company has also constituted a Risk Management Committee which ensures that the Company has appropriate and effective risk management systems which carries out risk identification, assessment and ensures that risk mitigation plans are in place. The Risk Management Committee identifies, from time to time, various risks to which the Company is subject to and has accordingly, aligned the concerned departments to take the necessary mitigating steps. Risk management has been interlinked with the annual planning exercise where each function and business carries out fresh risk identification, assessment and draws up treatment plans.

A Risk Management Policy in terms of provisions of Section 134(3) (n) of the Companies Act, 2013 read with the Listing Regulations is in place and is uploaded on the Company''s website i.e. https:// www.kajariaceramics.com/pdf/Risk_Management_Policy.pdf

Internal Control Systems and their adequacy

The Company believes in a strong internal control framework, which is necessary for business efficiency, management effectiveness and safeguarding assets. The Company has a well-defined internal control system in place, which is designed to provide reasonable assurance related to operation and financial control. The Management of the Company is responsible for ensuring that Internal Financial Control has been laid down in the Company and that controls are adequate and operating adequately.

Internal Audit of the Company''s operations are carried out by the Internal Auditors and periodically covers different areas of business. The audit scope, mythology to be used, reporting framework are defined well in advance, subject to consideration of the Audit Committee of the Company. The Internal Auditors evaluates the efficacy and adequacy of internal control system, its compliance with operating systems and policies of the Company and accounting procedures at all the locations of the Company. Based on the report of the Internal Auditors, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are placed before the Audit Committee of the Company. The Internal Audit also continuously evaluates the various processes being followed by the Company and suggests value addition, to strengthen such processes and make them more effective.

Internal Controls with respect to financial statements

The Company has an adequate system of internal financial control in place with reference to financial statements. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

Directors and Key Managerial Personnel

The term of Mr. Ashok Kajaria as the Chairman & Managing Directors of the Company expired on 31^st March, 2021. The Board has re-appointed him as the Chairman & Managing Director of the Company for the further period of five (5) years w.e.f. 1^st April, 2021 to 31^st March, 2026, subject to the approval of members of the Company at the ensuing Annual General Meeting (''AGM'') of the Company.

The terms of Mr. Chetan Kajaria and Rishi Kajaria as the Joint Managing Directors of the Company expired on 31^st March, 2021. The Board has re-appointed them as the Joint Managing Directors of the Company for the further period of five (5) years w.e.f. 1^st April,

2021 to 31^st March, 2026, subject to the approval of members of the Company at the ensuing AGM of the Company.

Mr. Dev Datt Rishi, who is liable to retire by rotation, has offered himself for re-appointment as the Director at the ensuing AGM of the Company. The Board recommends for his re-appointment in the ensuing AGM of the Company.

Subject to the approval of shareholders by way of a special resolution, it is also proposed to appoint Mr. Dev Datt Rishi as the Independent Director for a period effective from the conclusion of the 35^th Annual General Meeting of the Company upto the conclusion of the 39^th Annual General Meeting of the Company. The requisite disclosures/declarations including a declaration that he meets the criteria for independence as provided in Section 149(6) of the Act read with the Listing Regulations, have been received.

The Nomination and Remuneration Committee and the Board have also recommended appointment of Mr. Dev Datt Rishi for the above said period.

During the above said proposed term, age of Mr. Dev Datt Rishi will also exceed 75 years. Accordingly, approval of members of the Company, by way of a special resolution would also be required for the above purpose.

All Independent Directors of the Company have given declarations that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 read with Regulations 16(1)(b) & 25(8) of the Listing Regulations and in the opinion of the Board of the Company, all Independent Directors of the Company have integrity, expertise, experience as prescribed under the Companies (Appointment and Disqualification of Directors) Rules, 2014 read with the Companies (Accounts) Rules, 2014 (including amendment thereof).

All Directors of the Company have also given declarations that they are not debarred from holding the office of Director by virtue of any SEBI order or any other such statutory authority as required under the Circular dated 20^th June, 2018 issued by BSE Limited and National Stock Exchange of India Limited.

Further, there is no change in the composition of Key Managerial Personnel of the Company.

Performance Evaluation

The Board has, on recommendation of the Nomination and Remuneration Committee and in line with the Nomination and Remuneration Policy of the Company, carried out an annual performance evaluation of the Board as a whole, its Committees and all Directors including the Chairman.

The manner in which the annual performance evaluation has been carried out has been explained in the Corporate Governance Report.

Nomination and Remuneration Policy

On the recommendation of the Nomination and Remuneration Committee, the Board has framed a policy for selection and appointment of Directors, Senior Management including Key Managerial Personnel and other Senior Management and their remuneration. The Nomination and Remuneration Policy includes the criteria for determining qualification, positive attributes, independence, etc. is placed on the Company''s website, i.e. https:// www.kajariaceramics.com/pdf/Nomination_Remuneration_ Policy.pdf

Details of remuneration under Section 197 of the Companies Act, 2013 and read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is stated in Annexure- 4 which forms part of this report.

Statutory Audit

M/s Walker Chandiok & Co LLP, Chartered Accountants, (Firm Registration Number 001076N/N500013), the Statutory Auditors of the Company has given their report on the financial statements of the Company for the financial year ended 31^st March, 2021, which forms part of the Annual Report. There is no qualification, reservation, adverse remark, comments, observations or disclaimer given by the Statutory Auditors in their report. There were no frauds reported by the Statutory Auditors under Section 143(12) of the Companies Act, 2013.

M/s Walker Chandiok & Co LLP, Chartered Accountants, had been appointed as the Statutory Auditors of the Company at the 31^st AGM of the Company held on 10^th August, 2017, for a period of five years effective from the conclusion of the 31^st AGM of the Company upto the conclusion of the 36^th AGM of the Company, subject to ratification by the shareholders of the Company at each AGM of the Company.

The shareholders of the Company had, at the 32^nd AGM of the Company held on 27^th August, 2018, approved that the annual ratification of appointment of M/s Walker Chandiok & Co LLP, Chartered Accountants, for their remaining term shall be done, if so required under the Companies Act, 2013. The provisions of the Companies Act, 2013, now does not require the said annual ratification of the Statutory Auditors of the Company.

M/s Walker Chandiok & Co LLP, Chartered Accountants are eligible to continue as the Statutory Auditors of the Company for the remaining term in accordance with the provisions of the Companies Act, 2013 read with rules made thereunder and applicable laws.

Audit Committee

The Composition of Audit Committee is disclosed in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.

Vigil Mechanism

The Company has established a Vigil Mechanism for the Directors and Employees of the Company by adopting the Whistle Blower Policy to report about the genuine concerns, unethical behaviour, fraud or violation of Company''s Code of Conduct and leakage/ suspected leakage of Unpublished Price Sensitive Information with respect to the Company. The Whistle Blower Policy may be accessed on the website of the Company i.e. https://www. kajariaceramics.com/pdf/whistel_blowing_policy.pdf

Maintenance of Cost Records

The Company is not required to maintain of cost records as per sub-section (1) of Section 148 of the Companies Act, 2013.

Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal), Act, 2013

The Company has in place a Policy on Prevention of Sexual Harassment at the Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. This Policy may be accessed on the Company''s website i.e. https://www.kajariaceramics.com/pdf/ prevention_of_sexual_harassment_at_workplace.pdf

Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (Permanent, Contractual, Temporary and Trainees) are covered under this Policy. The Company has not received any sexual harassment complaints during the year 2020-21.

Particulars of Employees

The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is attached as Annexure- 7 to this Report.

Deposits

The Company did not invite/accept any deposit within the meaning of Section 73 of the Companies Act, 2013, and the rules made thereunder.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s Chandrasekaran Associates, Company Secretaries, Delhi were appointed as the Secretarial Auditors, to undertake the Secretarial Audit of the Company for the year ended 31^st March 2021. The Report of the Secretarial Audit is annexed herewith as Annexure 5.

There are no qualifications, reservations, adverse remarks, comments, observations or disclaimer made by the Secretarial Auditors in their report. There were no frauds reported by the Secretarial Auditors under Section 143(12) of the Companies Act, 2013.

Disclosures under the Companies Act, 2013 and rules made thereunder:Annual Return

The Annual Return in Form MGT-7 is available at https://www.kajariaceramics.com/pdf/Annual_Return_Form_ MGT_7_2020-21.pdf.

Compliance of the Secretarial Standards

During the year under review, the Company has complied with the applicable provisions of the Secretarial Standard on meetings of the Board of Directors (''SS-1'') and the Secretarial Standard on General Meetings (''SS-2'') issued by the Institute of Company Secretaries of India.

Particulars of Loans, Guarantees and Investments

Particulars of Loans, Guarantees and Investments, covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes Nos. 6, 7, 38 and 40 to the Financial Statements.

Conservation of energy, technology absorption and foreign exchange earnings & outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed under the Companies Act, 2013 are provided in Annexure - 6 to this report.

Meetings of Board

The Board of the Company met four (4) times during the financial year 2020-21 on 26^th June, 2020, 7^th August, 2020, 20^th October, 2020 and 21^st January, 2021. Details of the meetings of the Board of Directors held during the financial year 2020-21 and attendance thereof is disclosed in the Corporate Governance Report.

Proceeding under Insolvency and Bankruptcy Code, 2016

No application or any proceeding has been filed against the Company under the Insolvency and Bankruptcy Code, 2016 during the financial year 2020-21.

Details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof

The Company has not made any one-time settlement, therefore, the same is not applicable.

Significant and material orders passed by the regulators or courts or tribunals

There is no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and the Company''s operations in future.

Cautionary Statement

Statements in this ''Director''s Report'' & ''Management Discussion and Analysis'' describing the Company''s objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make difference to the Company''s operations including raw material/

fuel availability and its prices, cyclical demand and pricing in the Company''s principle markets, changes in the Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other ancillary factors.

Appreciation and Acknowledgement

The Directors take this opportunity to express their deep sense of gratitude to the Banks, Central and State Governments and their Departments and the Local Authorities for their continued guidance and support.

Your Directors would also like to record its appreciation for the support and cooperation your Company has been receiving from its suppliers, dealers, business partners and others associated with the Company.

Your Directors place on record their sincere appreciation to the employees at all levels for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain as industry leader.

And to you, our shareholders, we are deeply grateful for the confidence and faith that you have always reposed in us.

For and on Behalf of Board Ashok Kajaria

Place: New Delhi Chairman & Managing Director

Date: 3^rd August, 2021 DIN: 00273877

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Mar 31, 2018

Dear shareholders,

The Directors are pleased to present the 32nd Annual Report together with the audited financial statements of your Company for the financial year ended 31st March 2018.

FINANCIAL RESULTS

The Company’s financial performance for the year ended 31st March 2018 is summarised below:

(Rs. in crores)

	Standalone		Consolidated
Particular	Year ended 31st March 2018	Year ended 31st March 2017	Year ended 31st March 2018	Year ended 31st March 2017
Revenue from Operations (net of Excise)	2581	2528	2711	2550
Profit Before Other Income, Depreciation, Interest and taxes	424	439	456	496
Profit before Tax	382	407	355	396
Tax Expense	129	137	127	142
Profit After Tax (before Minority interest)	252	270	229	254
Minority Interest	-	-	(6)	1
Profit After Tax (after Minority interest)	252	270	235	253
Transferred to General Reserve	-	75	-	75

Financial highlights & State of Affairs of the Company

(The financial discussion is based on Standalone Financial Statements)

The overhang of policy disruptions and upheaval in the banking sector continued to dampen consumer sentiment across India which resulted in postponing discretionary expenditure. Tiles purchases happen to feature in this basket. As a result, offtake of tiles remained subdued during 2017-18.

Against these headwinds, your Company registered a 6% growth in sales volumes while net revenue increased by 2% (not comparable due to inclusion of excise duty in outsourced products) from RS.2528 crore in 2016-17 to RS.2581 crore in 2017-18 -an increase driven by a prudent mix of growing volume and increasing value derived from the successful launch of innovative designs and larger sizes.

The Company reported an EBIDTA of RS.424 crore in 2017-18 against RS.439 crore in 2016-17. The profit after tax stood at RS.252 crore in 2017-18 against RS.270 crore in 2016-17.

The State of affairs of the Company is detailed in the “Management Discussion & Analysis” section which forms part of this report.

Outlook

The Government’s efforts to improve lives and livelihood through employment generating initiatives coupled with an estimate for normal monsoon augurs well for uplifting consumer sentiment for discretionary purchases. In addition, the reduction in GST rates on tiles and implementation of the e-way bill is expected to improve prospects for national brands.

Growth drivers

India is forging ahead as the world’s fastest growing major economy. Urban clusters are driving this growth, more consumers and more purchasing power is emerging beyond the metros, particularly in Tier II/III cities. A report by Ernst & Young titled ‘India’s Growth Paradigm - How Markets Beyond Metros Have Transformed’ recognises 42 ‘new wave’ cities - of these, there are two new metros - Jaipur and Surat, followed by 10 high potential cities and 30 emerging markets. Widening of the market potential across the expansive Indian landmass augurs well for the tile industry in general and the organised sector in particular.

During the year under review, there are no material changes and commitments affecting the financial position of the Company and also no change in the nature of business of the Company.

Dividend

Your Directors have recommended a dividend of RS.3 (i.e. 300%) on equity shares (previous year RS.3 per equity share) of a face value of RS.1 each fully paid up for the financial year ended on 31st March 2018. If approved, the total payout is expected to be RS.57.49 crore (including dividend distribution tax of RS.9.80 crore). The dividend payout for the year under review has been formulated in accordance with the Company’s Policy, to pay sustainable dividend keeping in mind linked to its long-term growth aspiration of the Company.

Consolidated Financial Statements

The Company adopted Indian Accounting Standard (Ind-AS) from April 1, 2016 and accordingly, the Consolidated Financial Statements have been prepared in accordance with the Accounting Standard notified under Section 133 of the Companies Act, 2013 and the relevant rules issued thereunder read with the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (‘SEBI (LODR) Regulations, 2015’) and the other accounting principles generally accepted in India. The Consolidated Financial Statements form part of the Annual Report.

Holding, Subsidiaries, Associate, Joint Venture Companies and their performance

During the year under review, Taurus Tiles Private Limited ceased to be the subsidiary of the Company and no new company has become subsidiary of the Company.

A report on performance and financial position (Form AOC-1) of each of the subsidiaries as per the Companies Act, 2013 is provided as Annexure-1.

Share Capital

During the year under review, pursuant to the Scheme of Arrangement between Kajaria Securities Private Limited (‘KSPL’) and Kajaria Ceramics Limited (the ‘Company’) and their respective shareholders and creditors, as approved by the Hon’ble National Company Law Tribunal, Chandigarh Bench (‘NCLT’) on February 6, 2018, the Authorised Share Capital of the Company has been increased to RS.129,10,00,000 (Rupees One Hundred Twenty Nine Crore Ten Lakh only) divided into 52,00,00,000 (Fifty Two Crore) Equity Shares of RS.1/- each (Rupee One Only) aggregating to RS.52,00,00,000 (Rupees Fifty Two Crore Only) and 77,10,000 (Seventy Seven Lakh Ten Thousand) Redeemable Preference Shares of RS.100/- each (Rupees One Hundred Only) aggregating to RS.77,10,00,000 (Rupees Seventy Seven Crore Ten Lakh Only).

During the year under review, the paid up share capital of the Company is increased to 15,89,50,300 equity shares of RS.1 each (In previous year, the paid up share capital was 15,89,38,000 equity shares of RS.1/- each) due to allotment of 12,300 equity shares of RS.1 each, pursuant to the Kajaria Ceramics Employee Stock Option Plan 2015.

The Company has not issued shares with differential voting rights. As on 31st March 2018, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

Employee Stock Option Scheme

Kajaria Ceramics Employee Stock Option Plan 2015 (‘The ESOP Plan 2015’) was approved by the Board of Directors and the shareholders on 7th September, 2015 for issue and allotment of options exercisable into not more than 10,62,000* equity shares of RS.1 each (Originally ESOP Plan 2015 was for 5,31,000 equity shares of RS.2 each) to eligible employees of the Company and its subsidiaries. The ESOP Plan 2015 is administered by the Nomination and Remuneration Committee of the Board of Directors of the Company. On 20th October 2015, the Nomination and Remuneration Committee of the Company had granted 4,58,000* equity shares of RS.1 each (Originally granted equity shares were 2,29,000 equity shares of RS.2 each) stock options to the employees of the Company and its subsidiaries. 53,000 equity shares of RS.1 each (40,000 equity shares during the year 2016-17 and 13,000 equity shares during the year 201718) had been forfeited due to resignation of ESOP Option holders. Details regarding the ESOP Plan 2015 are given at Note No. 40 to the financial statements.

During the year under review, there are no material changes in ESOP Plan 2015 and the ESOP Plan 2015 is in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014 (‘ESOP Regulations’) and options for 12,300 equity shares of RS.1 each were exercised and allotted pursuant to the ESOP Plan 2015. The disclosures under Regulations 14 of ESOP Regulations is uploaded on the Company’s website viz; www.kajariaceramics.com

* During the year 2016-17, equity shares of the Company had been sub-divided from RS.2 per share to RS.1 per share.

Transfer to Reserves

During the year under review, there is no transfer of fund to the Company’s General Reserve Account.

Directors’ Responsibility Statement

In terms of the provisions of the Companies Act, 2013, the Directors confirm that:

i) In the preparation of the annual accounts for the year ended on 31st March, 2018, the applicable accounting standards have been followed and no material departures have been made from the same;

ii) Appropriate accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March 2018 and the profit and cash flow of the Company for the period 31st March 2018;

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The annual accounts have been prepared on a going concern basis;

v) The Company is following up the proper Internal financial controls and such internal financial controls are adequate and are operating effectively; and

vi) The Company has devised proper system to ensure the Compliance with the provisions of all the applicable laws and that such systems are adequate and operating effectively.

Corporate Governance

The Company has complied with the Corporate Governance requirements as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulation’). A separate section on corporate governance, along with a certificate from the Practicing Company Secretary confirming the compliance, is annexed and forms part of the Annual Report.

Management Discussion and Analysis Report

Management Discussion and Analysis on matters related to the business performance as stipulated in the Listing Regulations is given as a separate section in the Annual Report.

Related Party Transactions

For all related party transactions, prior omnibus approvals of the Audit Committee and the Board of Directors are obtained on a yearly basis for the transactions which are of a foreseen and repetitive nature and such approval is in the interest of the Company. The transactions entered into, pursuant to the omnibus approvals so granted, are audited and a statement giving details of all related party transactions is also placed before the Audit Committee for their review. All related party transactions are disclosed in Note No. 37 to the financial statements. Material related party transactions with subsidiaries which are at arm’s length price are disclosed in Form AOC-2 annexed as Annexure- 2.

The Related Party Transactions Policy as approved by the Board is uploaded on the Company’s website i.e. https://www. kajariaceramics.com/pdf/RelatedPartyTransactionPolicy.pdf

Corporate Social Responsibility Initiatives

In terms of provisions of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Corporate Social Responsibility (CSR) Committee has formulated a CSR Policy indicating the activities to be undertaken by the Company. The constitution of CSR Committee is disclosed in Corporate Governance Report.

The CSR policy may be accessed on the Company’s website i.e. https://www.kajariaceramics.com/pdf/CSR_Policy.pdf

Your Company strives to make a difference in the lives of people with a special focus on neighboring and local areas of the Company’s manufacturing locations. Your Company has implemented various CSR programmes / projects which made positive impacts mainly in the areas of health, sanitation, conservation of natural resources, sports and promoting education. During the year under review, the CSR programmes initiated by the Company includes taking steps for Swatch Bharat, preventive health care, constructing sanitation facilities in the schools near the manufacturing facilities, contributing to the education and social economic development of under privileged children and for slum area / rural area development. These CSR initiatives are implemented directly and through various trusts / societies / NGOs.

These projects are in accordance with Schedule VII of the Companies Act, 2013.

The Annual report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out as Annexure-3 forming part of this Report. The Company has incurred CSR expenditure of RS.3.98 crore during the current financial year being about 59.40% of RS.6.70 crore (i.e. the amount to be spent during the year). The shortfall of 40.60% in the required expenditure on CSR was due to non-identification of appropriate projects / activities / programmes in line with the CSR policy of the Company.

Scheme of Arrangement

During the year 2016-17, the Board of Directors had adopted a Scheme of Arrangement, which provides for, inter-alia, the amalgamation of Kajaria Securities Private Limited (‘KSPL’) with the Company with appointed date as closing hours of business on 31st March, 2017 (‘Scheme’) and the same was filed before the Hon’ble National Company Law Tribunal, Chandigarh Bench (‘NCLT’) vide application dated 16th March, 2017, for approval under Sections 230-232 and 66 read with other applicable provisions of the Companies Act, 2013 and the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016.

During the year under review, the Scheme has been approved by the NCLT on February 6, 2018. Pursuant to the Scheme, KSPL amalgamated into the Company and 6,46,69,867 fully paid up equity shares of face value RS.1 each of the Company held by KSPL, have been cancelled/extinguished. Further, 6,46,69,867 fully paid up equity shares of face value RS.1 each have been allotted, to the shareholders of KSPL, in proportion of their respective shareholding in KSPL. However, there is no change in the paid up share capital of the Company, after the above said cancellation/allotment.

Pursuant to the Scheme, all the properties, assets, rights, claims and obligations of KSPL have been transferred and vested in the Company on a going concern basis with effect from the Appointed Date, i.e. closing hours of business on 31st March, 2017.

Risk Management

Your Company understands the importance of various risks faced by it and has adopted a Risk Management Policy which establishes various levels of accountability within the Company. The Company had also constituted a Risk Management Committee which ensures that the Company has appropriate and effective risk management systems which carries out risk identification, assessment and ensures that risk mitigation plans are in place. The Risk Management Committee has identified various risks to which the Company is subject to and has accordingly aligned the concerned departments to take the necessary mitigating steps. Risk management has been interlinked with the annual planning exercise where each function and business carries out fresh risk identification, assessment and draws up treatment plans.

A Risk Management Policy in terms of provisions of Section 134(3)(n) of the Companies Act, 2013 is in place and is uploaded on the website of the Company i.e. www. kajariaceramics.com

Internal Control Systems and their adequacy

The Company believes that a strong internal control framework is necessary for business efficiency, management effectiveness and safeguarding assets. The Company has a well-defined internal control system in place, which is designed to provide reasonable assurance related to operation and financial control. The Management of the Company is responsible for ensuring that Internal Financial Control has been laid down in the Company and that controls are adequate and operating adequately.

Internal Audit is carried out by external auditors and periodically covers all areas of business. The audit scope, methodology to be used and the reporting framework is defined in charter of the Internal Audit, which is approved by the Audit Committee. The Internal Auditors evaluates the efficacy and adequacy of internal control system, its compliance with operating systems and policies of the Company and accounting procedures at all the locations of the Company. Based on the report of the Internal Auditors, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are placed before the Audit Committee. The Internal Audit also continuously evaluates the various processes being followed by the Company and suggests value addition, to strengthen such processes and make them more effective.

Internal Controls with respect to financial statements

The Company has an adequate system of internal financial control in place with reference to financial statements. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

Directors and Key Managerial Personnel

Mr. Chetan Kajaria and Mr. Rishi Kajaria, who are liable to retire by rotation, offered themselves for re-appointment at the ensuing Annual General Meeting (‘AGM’). The Board recommends for their re-appointments in the ensuing Annual General Meeting.

The term of Mr. Chetan Kajaria and Rishi Kajaria as the Joint Managing Directors of the Company expired on 31st March, 2018. The Board has re-appointed them as the Joint Managing Directors of the Company for the further period of 3 years w.e.f. 1st April, 2018 to 31st March, 2021, subject to the approval of members of the Company at the ensuing Annual General Meeting.

The tenure of Mr. H. Rathnakar Hegde as the Independent Director of the Company will expire on 31st March, 2019. Subject to the approval of shareholders by way of a special resolution, it is proposed to re-appoint Mr. H. Rathnakar Hegde as the Independent Director for a further period of 5 consecutive years effective from 1st April, 2019 to 31st March, 2024. The requisite disclosures/declarations including a declaration that he meets the criteria for independence as provided in Section 149(6) of the Companies Act, 2013 read with the Listing Regulations, have been received.

The Nomination and Remuneration Committee and the Board have also recommended re-appointment of Mr. H. Rathnakar Hegde for the second term for a period of 5 consecutive years effective from 1st April, 2019 upto 31st March, 2024.

All other Independent Directors have given declarations that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 read with the Listing Regulations.

Mr. Dev Datt Rishi resigned from the position of ‘Director-Technical’ and continued to be the Non-executive Director of the Company effective form 1st July, 2017.

Further, there is no change in the composition of Key Managerial Personnel of the Company.

Board Evaluation

The Board has carried out an annual performance evaluation of its own performance, its Committees and the Directors including Chairman.

The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

Nomination and Remuneration Policy

On the recommendation of the Nomination and Remuneration Committee, the Board has framed a policy for selection and appointment of Directors, Senior Management including Key Management Personnel and other Senior Management and their remuneration. The Nomination and Remuneration Policy including the criteria for determining qualification, positive attributes & independence is placed on the website of the Company i.e. http://www.kajariaceramics. com/pdf/nomination_remuneration_policy.pdf

Details of remuneration under Section 197 of the Companies Act, 2013 and read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is stated in Annexure- 4 which forms part of this report.

Statutory Audit

The report given by M/s Walker Chandiok & Co. LLP, Chartered Accountants, (Firm Registration Number 001076N/N500013), the Statutory Auditors of the Company on the financial statements of the Company for the financial year ended 31st March, 2018 is a part of the Annual Report. There has been no qualification, reservation, adverse remark, comments, observations or disclaimer given by the Auditors in their report. There were no frauds reported by the Statutory Auditors under sub-section 12 of Section 143 of the Companies Act, 2013.

In compliance with the applicable provisions of the Companies Act, 2013 and rules made thereunder (including statutory modification (s) or re-enactment(s) thereof, for the time being in force, the Board recommends for ratification of appointment of M/s Walker Chandiok & Co LLP as the Statutory Auditors of the Company to hold the office from the conclusion of the ensuing Annual General Meeting (‘AGM’) till the conclusion of the 33rd AGM and they have consented for the said ratification of appointment and confirmed their eligibility under Sections 139 & 141 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s Chandrasekaran Associates, a firm of Company Secretaries in Practice, were appointed, to undertake the Secretarial Audit of the Company for the year ended 31st March 2018. The Report of the Secretarial Audit is annexed herewith as Annexure 5.

There are no qualifications, reservations, adverse remarks, comments, observations or disclaimer made by the Secretarial Auditors in their report.

Disclosures under the Companies Act, 2013 and rules thereunder:

Extract of Annual Return

The extract of the Annual Return in form MGT 9 is annexed herewith as Annexure- 6.

Compliance of the Secretarial Standards

During the year under review, the Company has complied with the applicable provisions of the Secretarial Standard on meetings of the Board of Directors (‘SS-1’) and the Secretarial Standard on General Meetings (‘SS-2’) issued by the Institute of Company Secretaries of India.

Particulars of Loans, Guarantee and Investments

Particulars of Loans, Guarantees and Investments, covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes Nos. 6, 7, 35 to the Financial Statements.

Conservation of energy, technology absorption and foreign exchange earnings/ outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed under the Companies Act, 2013 are provided in Annexure - 7 to this report.

Meetings of Board

The Board of Directors met 7 (Seven) times during the financial year 2017-18 on 15th May 2017, 29th June 2017, 10th August 2017, 30th October 2017, 8th December 2017, 31st January 2018 and 14th March 2018. Details of the meetings of the Board of Directors held during the financial year 2017-18 and attendance thereof is disclosed in the Corporate Governance Report.

Audit Committee

The Composition of Audit Committee is disclosed in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.

Vigil Mechanism

The Company has established a Vigil Mechanism for directors and employees by adopting the Whistle Blower Policy to report genuine concerns or grievances. The Whistle Blower Policy may be accessed on the website of the Company i.e. https://www.kajariaceramics.com/pdf/whistel_blowing_ policy.pdf

Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal), Act, 2013

The Company has in place a Policy on Prevention of Sexual Harassment at the Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. This policy may be accessed on the Company’s website i.e. https://www.kajariaceramics. com/pdf/prevention_of_sexual_harassment_at_workplace. pdf

Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (Permanent, Contractual, Temporary, Trainees) are covered under this Policy. The Company has not received any sexual harassment complaints during the year 2017-18.

Particulars of Employees

The information required pursuant to Section 197 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is attached as Annexure- 8 to the Directors Report.

Deposits

The Company did not invite/accept any deposit within the meaning of Section 73 of the Companies Act, 2013, and the rules made thereunder.

Significant and material orders passed by the regulators or courts

There is no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and the Company’s operations in future.

Cautionary Statement

Statements in this ‘Director’s Report’ & ’Management Discussion and Analysis’ describing the Company’s objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make difference to the Company’s operations including raw material/ fuel availability and its prices, cyclical demand and pricing in the Company’s principle markets, changes in the Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other ancillary factors.

Appreciation and Acknowledgement

The Directors take this opportunity to express their deep sense of gratitude to the Banks, Central and State Governments and their Departments and the Local Authorities for their continued guidance and support.

Your Directors would also like to record their appreciation for the support and cooperation your Company has been receiving from its suppliers, dealers, business partners and others associated with the Company.

Your Directors place on record their sincere appreciation to the employees at all levels for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain as industry leader.

And to you, our shareholders, we are deeply grateful for the confidence and faith that you have always reposed in us.

For and on behalf of the Board

Ashok Kajaria

Place : New Delhi Chairman & Managing Director

Date: May 8, 2018 DIN:00273877

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Mar 31, 2017

The Directors are pleased to present the 31st Annual Report together with the audited financial statements of your Company for the financial year ended 31st March 2017.

Financial Results

The Company''s financial performance for the year ended on 31st March 2017 is summarized below:

(Rs. in crore)

Particular	Standalone		Consolidated
	Year ended 31st March 2017	Year ended 31st March 2016	Year ended 31st March 2017	Year ended 31st March 2016
Revenue (Net Sales)	2526	2441	2546	2409
Profit Before Depreciation, Interest and taxes	439	384	496	457
Profit before Tax	407	355	396	361
Tax Expense	137	118	142	125
Profit After Tax (before Minority interest)	270	237	254	236
Minority Interest	-	-	1	5
Profit After Tax (after Minority interest)	270	237	253	231
Transferred to General Reserve	75	60	75	60

Financial highlights & State of Affairs of the Company

(The financial discussion is based on Standalone Financial Statements)

Your Company registered 3.48% growth in net sales from Rs. 2441 crores in 2015-16 to Rs. 2526 crores in 2016-17 despite the subdued sentiment prevailing in the real estate industry and the temporary disruption in the cash economy due to demonetization. This uptick largely owned to new product launches during the year under review which were well received by customer pan-India.

Earnings before interest depreciation and tax (EBIDTA) increased by 14% from Rs. 384 crore in 2015-16 to Rs. 439 crore in 201617 due to increased sales of value-added tiles, cost optimization arising from shopfloor efficiencies. The profit after tax grew by 14% from Rs. 237 crore in 2015-16 to Rs. 270 crore in 2016-17. The earnings per share (basic) increased from Rs. 14.87 in 201516 to Rs. 16.96 in 2016-17.

The State of affairs of the Company is detailed in the "Management Discussion & Analysis” section which forms part of this report.

Outlook

Investment-inducing and business-strengthening Government policies coupled with growing affluence and soaring aspiration are expected to sustain the sectoral growth momentum over the coming years. Further, the promise of industry consolidation arising out of Government policies, raises the hopes for widening growth opportunities over the medium term.

Growth drivers

The Indian tile industry is poised to experience significant growth over the coming year. This optimism stems from the important realities that are expected to catalyse tile demand pan-India.

Rollout of GST: This most significant fiscal policy announcement post Independence is expected to create a level playing field between the informal players and the organized segment of the Indian tile industry - making branded tiles affordable which should enhance consumer pull.

Housing sector: According to credible opinion makers, the housing sector is at a tipping point and will be the economy''s next big growth driver. According to CLSA, India expects to build 60 million new homes to be built between 2018 and 2024. In addition, declining home finance rates and increasing funding options are expected to catalyse the demand for housing over the coming years.

Policy driven demand: The number of ambitious programmes launched in the last two years by the Centre, like Smart Cities Mission, Swachh Bharat Abhiyaan (Sanitation for All by 2019), Atal Mission for Rejuvenation, Urban Transformation (AMRUT) and Housing for all by 2022 is expected to provide significant impetus to the demand for tiles.

During the year under review, there are no material changes and commitments affecting the financial position of the Company and also no change in the nature of business of the Company.

Dividend

Your Directors have recommended a dividend of Rs. 3 (i.e. 300%) on equity shares (previous year Rs. 5.00 per equity share of a face value of Rs. 2 each fully paid up) of a face value of Re. 1 each fully paid-up for the financial year ended on 31st March 2017. If approved, the total payout is expected to be Rs. 57.39 crore (including dividend distribution tax of Rs. 9.71 crore). The dividend payout for the year under review has been formulated in accordance with the Company''s Policy - to pay sustainable dividend keeping in mind linked to its long-term growth aspiration of the Company.

Consolidated Financial Statements

The Company adopted Indian Accounting Standard (Ind-AS) from April 1, 2016 and accordingly, the Consolidated Financial Statements have been prepared in accordance with the Accounting Standard notified under Section 133 of the Companies Act, 2013 and the relevant rules issued there under read with the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (''SEBI (LODR) Regulations, 2015'') and the other accounting principles generally accepted in India. The Consolidated Financial Statements form part of the Annual Report.

Holding, Subsidiaries, Associate, Joint Venture Companies and their performance

During the year under review, no new company has become subsidiary of the Company. Kajaria Ceramics Kazakhstan, LLP (UIN: KAWAZ20140481) has ceased to be the subsidiary of the Company.

A report on performance and financial position (Form AOC-1) of each of the subsidiaries as per the Companies Act, 2013 is provided as Annexure-1.

Share Capital

The Authorized Share Capital of the Company is Rs. 35.00 Crores comprising of 25.00 Crores of equity shares of Re. 1 each and 10 Lakh preference shares of Rs. 100 each. The paid up equity share capital of the Company as on 31st March 2017 was Rs. 15.89 Crores divided into 15,89,38,000 equity shares of Re. 1 each.

During the year under review, the equity shares of the Company have been sub-divided from Rs. 2 per share to Re. 1 per share (w.e.f. October 4, 2016). Accordingly, the fully paid equity shares of Re. 1 each is 15,89,38,000 equity shares.

During the year under review, the Company has not issued shares with differential voting rights. As on 31st March 2017, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

Employee Stock Option Scheme (ESOP 2015)

The ESOP 2015 was approved by the Board of Directors and the shareholders on 7th September, 2015 for issue and allotment of options exercisable into not more than 10,62,000* of Re. 1 each (Originally ESOP Plan was for 5,31,000 shares of Rs. 2 each) to eligible employees of the Company and its subsidiaries. The ESOP 2015 is administered by the Nomination and Remuneration Committee of the Board of Directors of the Company. On 20th October 2015, the Nomination and Remuneration Committee of the Company had granted 4,58,000* of Re. 1 each (Originally granted shares were 2,29,000 of Rs. 2 each) stock options to the employees of the Company. During the year 2016-17, 40,000 shares of Re. 1 each have been forfeited due to resignation of ESOP holders. Details regarding ESOP 2015 are given at Note No. 38 to the financial statements.

There is no material change in the scheme and the scheme is in compliance with the SEBI (SBEB) Regulations, 2014. Further the details required under SEBI (SBEB) Regulations, 2014 are disclosed on the website of the Company and the same can be accessed at www.kajariaceramics.com

* During the year under 2016-17, the equity shares of the Company have been sub-divided from Rs. 2 per share to Re. 1 per share (w.e.f. October 4, 2016).

Transfer to Reserves

A sum of Rs. 75.00 Crores has been transferred to the Company''s General Reserve account and the balance has been carried to surplus in statement of profit and loss.

Directors’ Responsibility Statement

In terms of the provisions of the Companies Act, 2013, the Directors confirm that:

i) In the preparation of the annual accounts for the year ended on 31st March, 2017, the applicable accounting standards have been followed and that no material departures have been made from the same;

ii) Appropriate accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March 2017 and the profit and cash flow of the Company for the period 31st March 2017;

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The annual accounts have been prepared on a going concern basis;

v) The Company is following up the proper Internal financial controls and such internal financial controls are adequate and are operating effectively; and

vi) The Company has devised proper system to ensure the Compliance with the provisions of all the applicable laws and that such systems are adequate and operating effectively.

Corporate Governance

The Company has complied with the Corporate Governance requirements as stipulated under the SEBI (LODR) Regulations 2015. A separate section on corporate governance, along with a certificate from the Practicing Company Secretary confirming the compliance, is annexed and forms part of the Annual Report.

Management Discussion and Analysis Report

Management Discussion and Analysis on matters related to the business performance as stipulated in the SEBI (LODR) Regulations, 2015 is given as a separate section in the Annual Report.

Related Party Transactions

For all related party transactions prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are of a foreseen and repetitive nature and such approval is in the interest of the Company. The transactions entered into, pursuant to the omnibus approval so granted, are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval. All related party transactions are disclosed in Note No. 35 to the financial statements. Material related party transactions with subsidiaries which are at arm''s length price are disclosed in Form AOC-2 annexed as Annexure- 2.

The Related Party Transactions Policy as approved by the Board is uploaded on the Company''s website i.e. https://www. kajariaceramics.com/pdf/relatedpartytransactionpolicy.pdf

Corporate Social Responsibility Initiatives

In terms of provisions of Section 135 of the Companies Act,

2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Corporate Social Responsibility Committee (''CSR Committee'') has formulated a CSR Policy indicating the activities to be undertaken by the Company. The constitution of CSR Committee is disclosed in Corporate Governance Report.

The CSR policy may be accessed on the Company''s website i.e. https://www.kajariaceramics.com/pdf/csr_policy.pdf

Your Company strives to make a difference in the lives of people with a special focus on neighboring and local areas of the Company''s manufacturing locations. Your Company has implemented various CSR programmes / projects which made positive impacts mainly in the areas of health, sanitation, conservation of natural resources, sports and promoting education. The CSR programmes initiated by the Company includes taking steps for Swatch Bharat, preventive health care, constructing sanitation facilities in the schools near the manufacturing facilities, contributing to the education and social economic development of under privileged children and for slum area / rural area development. These CSR initiatives are implemented directly and through various trusts / societies / NGOs.

These projects are in accordance with Schedule VII of the Companies Act, 2013.

The Annual report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules,

2014 is set out as Annexure-3 forming part of this Report. The Company has incurred CSR expenditure of Rs. 3.37 Crores during the current financial year. The Company has spent about 65% of the proposed CSR Budget. The shortfall of 35% on CSR was due to non-identification of appropriate projects / activities in line with the CSR policy of the Company.

Scheme of Arrangement

During the year under review, the Board of Directors has adopted a Scheme of Arrangement, which provides for, inter-alia, the amalgamation of Kajaria Securities Private Limited with the Company with appointed date as closing hours of business on March 31, 2017 ("Scheme”). The Company has filed the Scheme for approval under Sections 230-232 and 66 read with other applicable provisions of the Companies Act, 2013 and the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 before the Chandigarh Bench of the National Company Law Tribunal ("NCLT”) vide application dated March 16, 2017.

Risk Management

Your Company understands the importance of various risks faced by it and has adopted a Risk Management Policy which establishes various levels of accountability within the Company. The Company had also constituted a Risk Management Committee which ensures that the Company has appropriate and effective risk management systems which carries out risk identification, assessment and ensures that risk mitigation plans are in place. The Risk Management Committee has identified various risk to which the Company is subject to and has accordingly aligned the concerned departments to take the necessary mitigating steps. Risk management has been interlinked with the annual planning exercise where each function and business carries out a fresh risk identification, assessment and draws up treatment plans.

A Risk Management Policy in terms of provisions of Section 134(3)(n) of the Companies Act, 2013 is in place and is uploaded on the website of the Company i.e. www.kajariaceramics.com

Internal Control Systems and their adequacy

The Company believes that a strong internal control framework is necessary for business efficiency, management effectiveness and safeguarding assets. The Company has a well-defined internal control system in place, which is designed to provide reasonable assurance related to operation and financial control. The Management of the Company is responsible for ensuring that Internal Financial Control has been laid down in the Company and that controls are adequate and operating adequately.

Internal Audit is carried out by external auditors and periodically covers all areas of business. The audit scope, mythology to be used, reporting framework is defined in charter of the Internal Audit, which is approved by the Audit Committee of the Board of Directors. The Internal Auditors evaluates the efficacy and adequacy of internal control system, its compliance with operating systems and policies of the Company and accounting procedures at all the locations of the Company. Based on the report of the Internal Auditors, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are placed before the Audit Committee of the Board. The Internal Audit also continuously evaluates the various processes being followed by the Company and suggests value addition, to strengthen such processes and make them more effective.

Internal Controls with respect to financial statements

The Company has an adequate system of internal financial control in place with reference to financial statements. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

Directors and Key Managerial Personnel

Mr. Dev Datt Rishi (DIN: 00312882) is liable to retire by rotation and being eligible offered himself for re-appointment at the ensuing Annual General Meeting.

The Board recommends for his re-appointment in the forthcoming Annual General Meeting.

All Independent directors have given declarations that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015.

During the financial year under 2016-17, Mr. Sandeep Singhal (DIN: 00040491) has resigned from the Directorship of the Company w.e.f. 7th February, 2017. Further, there is no change in the composition of Key Managerial Personnel of the Company.

Board Evaluation

The Board has carried out an annual performance evaluation of its own performance, its Committees and the Directors including Chairman.

The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

Nomination and Remuneration Policy

On the recommendation of the Nomination and Remuneration Committee, the Board has framed a policy for selection and appointment of Directors, Senior Management and their remuneration. Nomination and Remuneration Policy including the criteria for determining qualification, positive attributes & independence is placed on the website of the Company i.e. https://www.kajariaceramics.com/pdf/nomination_

remuneration_ policy.pdf

Details of remuneration under Section 197 of the Companies Act, 2013 and read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is stated in Annexure- 4 which forms part of this report.

Statutory Audit

The report given by M/s O.P. Bagla & Co., Chartered Accountants, the Statutory Auditors of the Company on the financial statements of the Company for the financial year ended March 31, 2017 is a part of the Annual Report. There has been no qualification, reservation, adverse remark, comments, observations or disclaimer given by the Auditors in their report. There were no frauds reported by the Statutory Auditors under sub-section 12 of Section 143 of the Companies Act 2013.

M/s O.P. Bagla & Co., Chartered Accountants were appointed as the Statutory Auditors of the Company and they have completed more than ten years and also additional period of 3 years as stipulated under Section 139 of the Companies Act, 2013 read with the rules made there under. M/s O.P. Bagla & Co., Chartered Accountants, will thus be holding the office of the Statutory Auditors up to the conclusion of the ensuing Annual General Meeting.

The Board places on record its appreciation for the contribution of M/s O.P. Bagla & Co., Chartered Accountants, during their tenure as the Statutory Auditors of the Company.

Thus, pursuant to the provisions of the Companies Act, 2013 read with the rules made there under, the Board has recommended M/s Walker Chandiok & Co LLP (Firm Registration Number 001076N/N500013) to be appointed as the Statutory Auditors of the Company, in place of M/s O. P. Bagla & Co., Chartered Accountants, to hold the office for a period of five years commencing from the conclusion of the ensuing Annual General Meeting till the conclusion of the Annual General Meeting for the financial year 2021-22.

They have consented for the said appointment and confirmed their eligibility under Sections 139 & 141 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s Chandrasekaran Associates, a firm of Company Secretaries in Practice, were appointed, to undertake the Secretarial Audit of the Company for the year ended on 31st March 2017. The Report of the Secretarial Audit Report is annexed herewith as Annexure 5.

There are no qualifications, reservations, adverse remarks, comments, observations or disclaimer made by the Secretarial Auditors in their report.

Disclosures under the Companies Act, 2013 and rules there under:

Extract of Annual Return

The extract of the Annual Return in form MGT 9 is annexed herewith as Annexure- 6.

Meetings of the Board

The Board of Directors met 7 (seven) times during the year 2016

17. Details of the number of Meetings of Board held during the financial year 2016-17 forms part of the Report on Corporate Governance.

Particulars of Loans, Guarantee and Investments

Particulars of Loans, Guarantees and Investments, covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes Nos. 5, 6, 11, 31 and 34 to the Financial Statements.

Conservation of energy, technology absorption and foreign exchange earnings/outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed under the Companies Act, 2013 are provided in Annexure - 7 to this report.

Audit Committee

The Composition of Audit Committee is disclosed in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.

Vigil Mechanism

The Company has established a Vigil Mechanism for directors and employees by adopting the Whistle Blower Policy to report genuine concerns or grievances. The Whistle Blower Policy may be accessed on the website of the Company i.e. https://www. kajariaceramics.com/pdf/whistle_blowing_policy.pdf

Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal), Act 2013

The Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. This policy may be accessed on the Company''s website i.e. https://www.kajariaceramics.com/pdf/prevention_ of_sexual_harassment_at_workplace.pdf

Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, Contractual, temporary, trainees) are covered under this policy. The Company has not received any sexual harassment complaints during the year 2016-17.

Particulars of Employees

The information required pursuant to Section 197 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is attached as Annexure- 8 to the Directors Report.

Deposits

The Company did not invite/accept any deposit within the meaning of Section 73 of the Companies Act, 2013, and the rules made there under.

Significant and material orders passed by the regulators or courts

There is no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and the Company''s operations in future.

Cautionary Statement

Statements in this "Director''s Report” & "Management Discussion and Analysis” describing the Company''s objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make difference to the Company''s operations including raw material/ fuel availability and its prices, cyclical demand and pricing in the Company''s principle markets, changes in the Government regulations, tax regimes, economic developments within India and the Countries in which the Company conducts business and other ancillary factors.

Appreciation and Acknowledgement

The directors take this opportunity to express their deep sense of gratitude to the banks, Central and State Governments and their departments and the local authorities for their continued guidance and support.

Your directors would also like to record its appreciation for the support and cooperation your Company has been receiving from its suppliers, dealers, business partners and other associated with the Company.

Your directors place on record their sincere appreciation to the employees at all levels for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain as industry leader.

And to you, our shareholders, we are deeply grateful for the confidence and faith that you have always reposed in us.

For and on behalf of the Board

Ashok Kajaria

Place: New Delhi Chairman & Managing Director

Date: 15th May, 2017 DIN: 00273877

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Mar 31, 2015

Dear Members,

The Directors are pleased to present the 29th Annual Report together with the audited financial statements of your Company for the financial year ended 31st March, 2015.

FINANCIAL RESULTS

The Company's financial performance for the year ended on 31st March, 2015 is summarised below :

(Rs. Crore)

Particulars Standalone

Year ended Year ended 31st March 31st March 2015 2014

Revenue (Net Sales) 2224 1875

EBIDTA (Operating Profit) 286 237

Profit before Tax 243 177

Tax Expense 75 60

Profit After Tax (before Minority interest) 168 117

Minority Interest - -

Profit After Tax (after Minority interest) 168 117

Balance of Profit & Loss brought forward from previous 263 207 year

Profit available for appropriation 431 324

APPROPRIATIONS

Proposed Dividend 32 26

Dividend Distribution Tax 6 4

Transferred to General Reserve 40 30

Surplus Credited to Balance Sheet 353 263



Particulars Consolidated

Year ended Year ended 31st March 31st March 2015 2014

Revenue (Net Sales) 2175 1829

EBIDTA (Operating Profit) 354 285

Profit before Tax 270 199

Tax Expense 85 68

Profit After Tax (before Minority interest) 185 131

Minority Interest 9 7

Profit After Tax (after Minority interest) 176 124

Balance of Profit & Loss brought forward from previous 274 211 year

Profit available for appropriation 450 335

APPROPRIATIONS

Proposed Dividend 32 26

Dividend Distribution Tax 6 4

Transferred to General Reserve 40 30

Surplus Credited to Balance Sheet 372 274

Financial Highlights and State of Affairs of the Company

(The financial discussion in this section is based on Standalone Financial Statements)

Your Company reported an industry-beating performance in an otherwise sluggish housing sector. The Company's net sales grew by 19% from Rs.1875 crore in 2013-14 to Rs. 2224 crore in 2014-15.

The team's efforts in raising shop-floor efficiencies and marketing effectiveness facilitated in improving business profitability despite inflationary headwinds. EBIDTA grew by 20% from Rs. 237 crore in 2013-14 to Rs. 286 crore in 2014-15 and the EBIDTA margin stood at 12.86% in 2014-15 against 12.66% in 2013-14.

Profit after tax grew by 44% from Rs. 117 crore in 2013-14 to Rs. 168 crore in 2014-15. The earnings per share (basic) increased from Rs. 15.70 in 2013-14 to Rs. 21.80 in 2014-15; the book value per share grew from Rs. 68.46 in 2013-14 to Rs. 90.89 in 2014-15.

No material change have incurred after close of the year till the date of this report, which have effect the financial position of the Company. The Company has an adequate internal financial control commensurate with the size, scale and complexity of operations. State of Affairs of the Company is disclosed in the management discussion analysis section which forms part of this report.

Outlook

The Indian tile Industry is expected to witness better days over the medium-term. This optimism is based on important realities.

Increasing urbanisation: Over the last two decades, India's urban population increased from 217 million to 377 million and this is expected to reach 600 million, or 40% of the population by 2031. By then, India is expected to have 68 cities with population of more than one million - driving housing demand.

Interest rate reduction: The recent reduction in interest rates augurs well for the housing sector. Beside, declining commodity prices are expected to reduce inflationary pressure on the Indian economy, creating a foundation for further interest rate reduction. This should improve housing demand.

Cost reduction: Reduction in international crude prices should optimise the energy bill strengthening business profitability.

Policy-driven growth: The Government's decision to develop, Housing for all by 2022, Swachh Bharat campaign (Sanitisation for all by 2019), Smart City Mission is expected to create an interesting growth opportunity for the Indian ceramic tile industry.

Growth Drivers

Capacity augmentation: The Company is increasing its operational capacity in a phased manner facilitating seamless absorption of the additional volumes:

Our joint venture partner Taurus commissioned its 5 MSM facility in June 2015. Our brownfield expansion of 3 MSM of ceramic floor tiles is scheduled to commence operations in September/ October 2015. We raised the capacity of our greenfield facility at Rajasthan from the initially budgeted 5 MSM to 6.5 MSM - this unit will kickstart operations in Q4 of this fiscal. We also forged a joint venture alliance with Floera Tiles Private limited, which will add 5.7 MSM vitrified tile capacity in Andhra Pradesh - this unit is expected to come on stream in 2016-17.

Shelf-space increase: We are increasing shelf space with existing dealing and progressively adding new dealers and sub-dealers, largely in Tier-II and Tier-III locations for wider reach and deeper penetration into demand pockets pan-India.

Consolidated Financial Statements

The Consolidated Financial Statements of the Company prepared in accordance with relevant Accounting Standards (AS) viz. AS-21, AS-23 and AS-27 issued by the Institute of Chartered Accountants of India form part of this Annual Report.

Holding, Subsidiaries, Associate Companies and their Performance

During the year under review, following companies have become the subsidiaries of the Company:

1. Taurus Tiles Private Limited

2. Kajaria Ceramics Kazakhstan, LLP

3. Kajaria Bathware Private Limited

During the year under review Kajaria Sanitaryware Private Limited ceases to be the subsidiary of the Company and become the step down subsidiary of the Company i.e (subsidiary of Kajaria Bathware Private Limited).

A report on performance and financial position (form AOC-1) of each of the subsidiaries as per the Companies Act, 2013 is provided as "Annexure-I".

Dividend

Your Directors have recommended a dividend of Rs. 4 (i.e 200%) on equity shares (previous year Rs. 3.50 per equity share) of face value of Rs.2 each for the financial year ended on 31st March 2015. The total pay-out will be '38.15 Crore (including dividend distribution tax of Rs. 6.36 Crore).

The dividend pay-out for the year under review has been formulated in accordance with the Company's Policy to pay sustainable dividend linked to long term growth objectives of the Company to be met by internal cash accruals.

Share Capital

The Authorised Share Capital of the Company is Rs. 35 Crore comprising of 12.50 crore of equity shares of Rs. 2 each and 10 lakh preference shares of Rs. 100 each. The paid up capital of the Company as on 31st March 2014 was Rs. 15.12 Crore divided into 75583580 equity shares of Rs. 2 each. As per the resolution passed by the shareholders in general meeting held on 6th November 2013 authorising the Board to issue the shares after conversion of warrants on preferential basis, during the year under review, on exercising the option, the Company has issued 3885420 equity shares to M/s WestBridge Crossover Fund, LLC. These shares would be pari passu with the existing equity shares of the Company. The Equity Share capital of the Company as on 31st March 2015 was Rs. 15.89 Crore divided into 79469000 equity shares of Rs. 2 each.

During the year under review, the Company has neither issued shares with differential voting rights nor granted stock options/ sweat equity. As on 31st March 2015, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

Transfer to Reserves

A sum of Rs. 40 Crore has been transferred to the Company's General Reserve account and the balance has been carried to surplus in statement of profit and loss which now has a balance of '352.81 Crore.

Directors' Responsibility Statement

In terms of the provisions of the Companies Act, 2013, the Directors confirm that:

i) In the preparation of the annual accounts for the year ended on March 31, 2015, the applicable accounting standards had been followed and that no material departures have been made from the same.

ii) Appropriate accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March 2015 and the profit and loss and cash flow of the Company for the period 31st March 2015.

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The annual accounts have been prepared on a going concern basis.

v) The Company is following up the proper internal financial controls laid down by the Directors of the Company and such internal financial controls are adequate and are operating effectively and

vi) the Company has devised proper system to ensure the compliance with the provisions of all the applicable laws and that such systems are adequate and operating effectively.

Corporate Governance

The Company has complied with the Corporate Governance requirements as stipulated under the Listing Agreement with the Stock Exchanges. A separate section on corporate governance, along with a certificate from the Practicing Company Secretary confirming the compliance, is annexed and forms part of the Annual Report.

Management Discussion and Analysis Report

Management discussion and analysis on matters related to the business performance as stipulated in clause 49 of the Listing Agreement with the Stock Exchanges is given as a separate section in the Annual Report.

Related Party Transactions

All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors and Key Managerial Personnel which may have a potential conflict with the interest of the Company at large.

For all related party transactions prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are of a foreseen and repetitive nature and such approval is in the interest of the Company. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval. All transactions entered with related parties during the year under review were on arm's length basis and in ordinary course of business. All related parties transactions are disclosed in Note number 42 to the financial statements. Material related party transactions which are at arm's length are disclosed in form AOC-2 annexed as "Annexure-2".

The Company has developed a related party transactions policy for purpose of identification and monitoring of such related party transactions, which may be accessed on the Company's website at weblink i.e. http://www.kajariaceramics.com/pdf/ RelatedPartyTransactionPolicy.pdf

Corporate Social Responsibility Initiatives

In terms of provisions of Section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014, the Corporate Social Responsibility Committee has formulated and recommended to the Board a CSR policy indicating the activities to be undertaken by the Company, which has been approved by the Board. The constitution of CSR Committee is disclosed in Corporate Governance Report

The CSR policy may be accessed on the Company's website i.e http://www.kajariaceramics.com/pdf/CSR_Policy.pdf

As a part of initiative of CSR drive, the Company has undertaken the project of building / renovation of sanitation facilities in the schools near the manufacturing facilities. The Company has also taken steps for preventive health care by organising the camps through various agencies / trusts, contributing to the education and social economic development of under privileged children and for slum area / rural area development.

These projects are in accordance with Schedule VII of the Companies Act, 2013.

The Annual Report on CSR activities as required under the Company's (Corporate Social Responsibility Policy) Rules 2014 is set out as annexure-3 forming part of this Report. Being the initial year, the Company has incurred CSR expenditure of Rs. 109.66 lacs (as against Rs. 297.14 lacs) during the current financial year. The Company is in process of identifying the projects/activities for the benefit of the Public in general and neighbourhood of the manufacturing facilities in the best possible manner into various projects in future.

Risk Management

In terms of provisions of Section 134(3)(n) of the Companies Act, 2013, the Company, during the year under review, have framed and put in place a Risk Management policy to mitigate the risks, both internal and external, which the Company is exposed to.

Business Risk Assessment procedures have been set in place for self-assessment of business risks, operating controls and compliance with the Corporate Policies. The Company manages, monitors and reports on the principal risks and uncertainties that can impact the ability to achieve the objectives. This is an ongoing process to track the evaluation of risks and delivery of mitigating action plans. The risk management policy of the Company is uploaded on the website of the Company i.e www.kajariaceramics.com.

There is no identification of risks which in the opinion of the Board may threaten the existence of the Company

Internal Control and their adequacy

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit (IA) function is defined in the Internal Audit Program. To maintain its objectivity and independence, the internal auditors report to the Chairman of the Audit Committee of the Board.

The Internal auditors monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. Based on the report of internal audit, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board. The Committee reviews the adequacy and effectiveness of the Company's internal control environment.

Directors and Key Managerial Personnel

i. Mr. Chetan Kajaria (DIN: 00273928) and Mr. Rishi Kajaria (DIN: 00228455) - Joint Managing Directors of the Company were re-appointed as Joint Managing Directors of the Company by the Board of Directors in its meeting held on 30th March 2015 on the recommendation of Nomination and Remuneration Committee and subject to the approval of the members.

ii. Mr. Dev Datt Rishi (DIN: 00312882) was appointed as an additional director of the Company by the Board of Directors in its meeting held on 14th January 2015 on the recommendation of Nomination and Remuneration Committee, upto the conclusion of the ensuing Annual General Meeting of the Company. He has been appointed as Director -Technical of the Company by the Board of Directors and subject to the approval of the members.

iii. Mrs. Sushmita Shekhar (DIN: 02284266) was appointed as an additional Independent Director by the Board of Directors in its meeting held on 30th March 2015 on the recommendation of Nomination and Remuneration Committee, upto the conclusion of the ensuing Annual General Meeting of the Company. The appointment of Mrs. Sushmita Shekhar, as an Independent Director of the Company, is subject to the approval of the members.

iv. Mr. H. Rathnakar Hegde (DIN: 05158270), and Mr. Ram Ratan Bagri (DIN: 00275313) Directors of the Company, will be appointed as the Independent Directors of the Company w.e.f 1st April 2014 subject to the approval of the members.

All the Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

The Board recommends for their appointment / re-appointment in the forthcoming Annual General Meeting.

No director has resigned during the year under review.

At the Board Meeting held on 1st August 2014, Mr. Ram Chandra Rawat - Executive V.P. (A&T) & Company Secretary has been given the additional charge of CFO of the Company and he later on resigned from the post of CFO and Mr. Sanjeev Agarwal was appointed as CFO of the Company in accordance with the resolution passed by the Board in its meeting held on 29th April 2015.

Board Evaluation

The Board has carried out an annual performance evaluation of its own performance, the Directors, including Chairman individually as well as the evaluation of the working of its Committees.

The manner in which the evaluation has been carried out and the details of familiarisation programme has been explained in the Corporate Governance Report.

Remuneration Policy

On the recommendation of the Nomination & Remuneration Committee, the Board has framed a policy for selection and appointment of Directors, senior management and their remuneration. Nomination and Remuneration Policy including criteria for determining qualification, positive attributes & independence is also placed on the website of the Company i.e http://www.kajariaceramics.com/pdf/Nomination_ Remuneration_Policy.pdf and is also stated in the "Annexure-4" to this report.

Details of remuneration under Section 197 of the Companies Act, 2013 and details required under Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are stated in "Annexure-4" which forms part of this report.

Statutory Audit

M/s O P Bagla & Co. (Firm Regn. No. 000018N), Chartered Accountants, the auditors of the Company would retire at the ensuing Annual General Meeting. They have confirmed their eligibility under section 139 & 141 of the Companies Act, 2013 and willingness for re-appointment as statutory auditors of the Company. The Board of Directors recommends the re-appointment of M/s O.P.Bagla & Co. (Firm Regn. No. 000018N), as Statutory Auditors from the conclusion of ensuing Annual General Meeting till the conclusion of next Annual General Meeting.

The report given by the auditors on the financial statements of the Company is a part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their report. There were no frauds reported by the auditors under subsection 12 of section 143 of the Companies Act, 2013.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Chandrasekaran Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as "Annexure 5".

There is no qualification , reservation, adverse remark or disclaimer given by Secretarial Auditor in their report.

Disclosures:

Audit Committee:

The Composition of Audit Committee is disclosed in the Corporate Governance report. All the recommendations made by the Audit Committee were accepted by the Board.

Vigil Mechanism

The Company has established a Vigil Mechanism for Directors and employees by adopting the Whistle Blower Policy to report genuine concerns or grievances. The Whistle Blower Policy may be accessed on the website of the Company i.e http://www.kajariaceramics. com/pdf/whistel_blowing_policy.pdf

Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013

The Company has in place a policy for prevention of sexual harassment at workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act 2013. This policy may be accessed on the Company's website i.e. http://www.kajariaceramics.com/pdf/prevention_of_sexual_harassment.pdf.

Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. We have not received any sexual harassment complaints during the year 2014-15.

Meetings of the Board

The details of the number of Meetings of the Board held during the financial year 2014-2015 forms part of the Corporate Governance report.

Particulars of Loans, Guarantee and Investments

Particulars of Loans, Guarantees and Investments, covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes 13, 14, 27 & 42 to the Financial Statements.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo as required to be disclosed under the Act are provided in "Annexure-6" to this report.

Extract of Annual Return

The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure-7".

Particulars of employees

The information required pursuant to Section 197 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is attached as "Annexure-8" to the Directors Report.

Fixed Deposits

The Company did not invite/ accept any fixed deposit within the meaning of Section 73 of the Companies Act, 2013, and the rules made there under.

Significant and Material Orders passed by the Regulators or Courts

Regional Director -North has approved the transfer of registered office of the Company from the state of Uttar Pradesh to the state of Haryana vide its order dated 9 th June 2015. Besides this, there are no material and significant orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

Cautionary Statement

Statements in this Director's Report & Management Discussion and Analysis describing the Company's Objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make difference to the Company's operations including raw material/ fuel availability and its prices, cyclical demand and pricing in the Company's principle markets, changes in the government regulations, tax regimes, economic developments within India and the Countries in which the Company conducts business and other ancillary factors.

Appreciation and Acknowledgement

Your Directors place on record their deep appreciation to the employees at all levels for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain as industry leaders.

Your Directors would also like to record their appreciation for the support and cooperation your Company has been receiving from its suppliers, dealers, business partners and other associated with the Company.

Your Directors express their deep sense of gratitude to the banks, Central and State governments and their departments and the local authorities for their continued support.

And to you, our Shareholders, we are deeply grateful for the confidence and faith that you have always reposed in us.

For and on behalf of the Board

Ashok Kajaria Chairman & Managing Director DIN: 00273877

Place: New Delhi Date: 29th July 2015

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Mar 31, 2014

The Directors are pleased to present the 28th Annual Report together with the audited accounts of your Company for the financial year ended 31st March 2014.

(Rs. million)

Standalone Consolidated Particulars year ended Year ended year ended year ended 31st March 31st March 31st March 31st March 2014 2013 2014 2013

Revenue (Net Sales) 18779 15882 18400 15833

Profit Before Depreciation, Interest and taxes 2396 2249 2870 2477

Profit Before Tax 1768 1480 1992 1577

Tax Expense 601 475 678 499

Profit After Tax 1167 1005 1314 1078

Minority Interest - - 71 33

Profit After Tax and Minority Interest 1167 1005 1243 1045

Balance of Profit & Loss brought forward from 2068 1619 2109 1620 previous year

Profit available for appropriation 3235 2624 3352 2666

APPROPRIATIONS

Proposed Dividend 265 221 265 221

Dividend Distribution Tax 45 36 45 36

Transferred to General Reserve 300 300 300 300

Surplus Credited to Balance Sheet 2626 2068 2742 2109

Financial review

(The financial discussion in this section is based on the Standalone Financial Statements).

Your Company''s strong business model stood the test of challenges for another year. Despite the economic slowdown, policy paralysis and rising fuel prices which dampened industry prospects, your Company sustained its growth momentum.

Your Company''s ability in fueling and consistently delivering on customer''s aspiration resulted in a 18% growth in net sales from Rs.15882 million to Rs.18779 million. Its painstaking efforts in streamlining costs facilitated in a 6.51 % increase in EBIDTA from Rs.2249 million in 2012-13 to Rs.2396 million in 2013-14.

Profit after tax increased from Rs.1005 million to Rs.1167 million, a 16.11 % growth over the previous year. The earnings per share (basic) increased from Rs.13.66 to Rs.15.70 per share during the same period. The book value per share strengthened from Rs.48.49 as on 31st March 2013 to Rs.68.48 as on 31st March 2014.

Dividend

With significant expansion plans on the anvil, the Board needed to strike a prudent balance between dividend payout and reinvestment of business surplus for organisational growth. But considering robust business growth and improved profitability, the Board of Directors recommended 175% dividend on equity shares (Rs.3.50 per equity share, face value of Rs.2). The total payout will be Rs.309.50 million (including dividend distribution tax of Rs.44.96 million).

Corporate highlights

Inorganic growth: Jaxx Vitrified, a subsidiary of your Company acquired a unit proximate to its existing facility having 2.60 MSM capacity for manufacturing polished vitrified tile at an investment of Rs.350 million. The unit strengthened your Company presence in West and South India markets.

Value addition: Your Company also commissioned a 3.40 MSM glazed vitrified tile unit in the area vacated by the closure of the polished vitrified tile unit at our Sikandrabad facility. Your Company''s growing presence in the glazed vitrified tile segment will enhance realisation and strengthen business margins going ahead.

Visibility expansion: Your Company expanded its Kajaria Galaxy network by opening 25 state-of- the-showrooms in the last 24 months. These 4000 sq ft outlets exclusively feature the Kajaria product range comprising ceramic, polished vitrified and glazed vitrified tiles - providing the discerning customer with a multitude of décor solutions under one roof. This initiative will facilitate in achieving our business targets.

Investment: WestBridge Crossover Fund, LLc. agreed to invest Rs.1.50 billion in your Company. Kajaria issued 20 lac equity shares at a price of Rs.250/- aggregating to Rs.500 million and Rs.38.85 lac warrants convertible into equity shares of the Company at a price Rs.257.372433 per share aggregating to Rs.1 billion. These warrants are convertible by November 2014. The Company has received Rs.250 million as advance towards warrants.

Consolidated Financial Statements

In accordance with the Accounting Standards (AS-21) Consolidated Financial Statement are attached and form part of the Annual Report and Accounts.

Accounts of subsidiaries

Pursuant to the general circular no. 1/2011 issued by Ministry of Corporate Affairs, Government of India the Individual accounts of the five subsidiaries of the Company (M/s Soriso Ceramic Private Limited, M/s Jaxx Vitrified Private Limited, M/s Vennar Ceramics Limited, M/s Cosa Ceramics Private Limited, Kajaria Sanitary ware Private Limited) for the year ended on 31st March 2014 have not been attached to the Annual Report. However a statement giving information as required by the aforesaid circular is attached to the Annual Report. The Annual Accounts of the subsidiary companies will be available at the registered office of the Company and also at the venue during the Annual General Meeting. The Company shall provide free of cost the copy of Annual Accounts of its subsidiary companies to the shareholders upon their request.

Fixed deposits

The Company did not invite/accept any fixed deposit within the meaning of Section 58A of the Companies Act, 1956, and the rules made there under.

Outlook

The ''new urban'' consumption from Tier II and Tier III locations has significantly expanded the opportunity pie for the Indian tile sector. As India stands steadfast in its resolve to accelerate economic progress, demand for tiles will continue to increase over the foreseeable future.

Further, growing urbanisation, gravitation to the aesthetic, increasing aspiration towards brands and deeper penetration of distribution networks of organised players is expected to increase the off take of branded products.

Growth drivers for the current year

Your Company''s growth will be driven by a prudent volume-value play that will strengthen business profitability and facilitate in providing superior shareholder value.

Recent addition: The 5.60 MSM capacity addition in 2013-14 will be operational for the entire 2014-15 making a meaningful contribution to the Company''s growth target.

Capacity augmentation: Your Company is adding 4.50 MSM at Jaxx and 3 MSM capacity at Cosa units. Your Company is also analyzing the prospects of and studying the opportunities for adding capacity in the tile segment which would materialise in 2014-15.

Directors

Pursuant to the provisions of section 161 (1) of the Companies Act 2013 and articles of association of the Company, Mr. Sandeep Singhal - was appointed as an additional director, designated as independent director, by the Board of directors in its meeting held on 8th October 2013, up to the conclusion of the ensuing Annual General Meeting of the Company. The appointment of Mr. Sandeep Singhal, as an Independent Director of the Company, is subject to the approval of the members. The Company has received requisite notice in writing from a member proposing Mr. Sandeep Singhal for appointment as an Independent Director.

Mr. R. K. Bhargava and Mr. D. P. Bagchi, Directors of the Company, will retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment.

The Board recommends for their re-appointment.

The Company has received declarations from all independent directors of the Company confirming that they meet the criteria of independence as prescribed under section 149(6) of the Companies Act 2013 and under clause 49 of the Listing Agreement.

Auditors and their observations

M/s O P Bagla & Co., Chartered Accountants, the auditors of the Company would retire at the ensuing Annual General Meeting. The Company has received a letter from them that their re- appointment, if made, would be within the prescribed limits under section 141(3) (g) of the Companies Act 2013 and they are not disqualified for re-appointment.

The Board of Directors recommends the re- appointment of M/s O.P.Bagla & Company as Statutory Auditors from the Conclusion of ensuing Annual General Meeting till the Conclusion of next Annual General Meeting.

The notes on financial statements referred to in the Auditor''s report are self-explanatory and do not call for any further comments.

Cost Auditors and their observations

The Board of Directors on the recommendation of the Audit Committee appointed M/s. G T & Co. Cost Accountants, as the Cost Auditors of the Company for the Financial Year 2014-15. M/s. G T & Co. have confirmed that their appointment is within the limits of the Section 141(3) (g) of the Companies Act, 2013 and have also certified that they are free from any disqualifications.

The Audit Committee has also received a certificate from the Cost Auditor certifying their independence and arm''s length relationship with the Company. Pursuant to Cost Audit (Report) Rules 2001, the Compliance certificate for the financial year 2012-13 was filed on 04.09.2013 vide SRN S22118764 on the Ministry of Corporate Affairs website.

Particulars of Employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the annexure to the Directors'' Report. Having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and other entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

Directors'' responsibility statement

Pursuant to Section 217 (2AA) of the Companies Act 1956 as amended, Directors confirm that:

i) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures

ii) Appropriate accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March 2014 and the profit and cash flow of the Company for the period 31st March 2014.

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The annual accounts have been prepared on a going concern basis.

Corporate Governance Report

The Company has complied with the Corporate Governance requirements as stipulated under the listing agreement with the stock exchanges. A separate section on corporate governance, along with a certificate from the auditors confirming the compliance, is annexed and forms part of the Annual Report.

Management discussion and analysis report

Management discussion and analysis on matters related to the business performance, as stipulated in Clause 49 of the Listing Agreement with stock exchanges, is given as a separate section in the Annual Report.

Conservation of energy, technology absorption and foreign exchange earnings/ outgo

Information required under Section 217(1) (e) of the Companies Act, 1956, read with the Companies (disclosure on particulars in the Report on the Board of Directors) Rules, 1988 is given in Annexure-I and forms part of this Report.

Acknowledgment

Your Directors take this opportunity to express their deep sense of gratitude to the banks, Central and State governments and their departments and the local authorities for their continued guidance and support. We would also like to place on record our sincere appreciation for the commitment, dedication and hard work put in by every member of the Kajaria family. To them goes the credit for the Company''s achievements. And to you, our Shareholders, we are deeply grateful for the confidence and faith that you have always reposed in us.

For and on behalf of the Board

Place: New Delhi Ashok Kajaria

Date: 7th May 2014 Chairman and Managing Director

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Mar 31, 2013

Dear Shareholder''s

The Directors are pleased to present the 27th Annual Report together with the audited accounts of your Company for the financial year ended 31st March 2013.

(Rs. million)

Standalone

Particulars Year ended Year ended 31st March 2013 31st March 2012

Revenue (Net Sales) 15871 13114

Profit Before Depreciation, Interest 2249 2016 and taxes

Profit before Tax 1480 1175

Tax Expense 475 368

Profit After Tax 1005 807

Minority Interest 0 0

Profit after Tax & Minority Interest 1005 807

Balance of Profit & Loss brought 1619 1276 forward from previous year

Profit available for appropriation 2625 2083

APPROPRIATIONS

Proposed Dividend 221 184

Dividend Distribution Tax 36 30

Transferred to General Reserve 300 250

Surplus Credited to Balance Sheet 2068 1619

Consolidated

Particulars Year ended Year ended 31st March 2013 31st March 2012

Revenue (Net Sales) 16109 13115

Profit Before Depreciation, Interest and taxes 2477 2077

Profit before Tax 1577 1199

Tax Expense 499 381

Profit After Tax 1078 819

Minority Interest 33 10

Profit after Tax & Minority Interest 1045 809

Balance of Profit & Loss brought forward from previous year 1620 1275

Profit available for appropriation 2666 2084

APPROPRIATIONS

Proposed Dividend 221 184

Dividend Distribution Tax 36 30

Transferred to General Reserve 300 250

Surplus Credited to Balance Sheet 2109 1620

Financial review

(The financial discussion in this section is based on Standalone Financial Statements)

Your Company''s continuous endeavour towards meeting soaring customer aspirations with unique and value-added products enabled it to tide over a difficult year. Net sales grew 21% from Rs.13114 million to Rs.15871 million, a combination of volume growth and value addition. The EBIDTA increased from Rs.2016 million in 2011-12 to Rs.2249 in 2012-13.

The net profit after tax increased from Rs.807 million to Rs.1005 million, registering a 25% growth over the previous year. The earnings per share increased from Rs.10.97 to Rs.13.66 per share during the same period. The book value per share strengthened from Rs.38.31 as on 31st March 2012 to Rs.48.49 as on 31st March 2013. More importantly, every rupee invested in business delivered superior returns - reflected by the improved return on employed capital.

Dividend

Considering business growth and improved profitability, the Board of Directors recommended 150% dividend on equity shares (Rs.3 per equity share, face value of Rs.2). The Total Payout will be Rs.256.56 Million (including dividend distribution tax of Rs.35.81 million).

Corporate highlights

Inorganic growth: Your Company acquired a 51% stake in Vennar Ceramics Ltd., Andhra Pradesh having a 2.30 MSM ceramic wall tiles manufacturing facility. The unit commenced production on July 1, 2012 which facilitated your Company strengthen its foothold in the South Indian markets.

Further, your Company acquired a 51% stake in Cosa Ceramics, Gujarat, with an annual capacity of 2.70 MSM double charge vitrified tile - a premium segment. This allows your Company to cater to the well-heeled Western Indian markets with speed and increased product diversity. In addition, our subsidiary Jaxx Vitrified acquired a 2.60 MSM polished vitrified tile plant proximate to its existing facility in April 2013.

Your Company also converted the 3.00 MSM soluble salt (low-end PVT segment) manufacturing line to a glazed vitrified line which will produce polished GVT with nano- finish - a better value added product.

We expect these initiatives will strengthen our capability to provide better shareholder value, going ahead.

Consolidated Financial Statements

In accordance with the Accounting Standards (AS-21) Consolidated Financial Statement are attached and form part of the Annual Report and Accounts.

Accounts of subsidiaries

Pursuant to the general circular no. 1/2011 issued by Ministry of Corporate Affairs, Government of India the Individual accounts of the five subsidiaries of the Company (M/s Soriso Ceramic Private Limited, M/s Jaxx Vitrified Private Limited, M/s Vennar Ceramics Limited, M/s Cosa Ceramics Private Limited and M/s Kajaria Ceramics Addis plc, Ethiopia) for the year ended on 31st March 2013 have not been attached to the Annual Report. However a statement giving information as required by the aforesaid circular is attached to the Annual Report. The Annual Accounts of the subsidiary companies will be available at the registered office of the Company and also at the venue during the Annual General Meeting. The Company shall provide free of cost the copy of Annual Accounts of its subsidiary companies to the shareholders upon their request.

Fixed deposits

The Company did not invite/accept any fixed deposit within the meaning of Section 58A of the Companies Act, 1956, and the rules made there under.

Outlook

The spread of roads, telephones and electricity is driving productivity growth away from the big urban centres to Tier II and Tier III locations - India''s ''new urban areas''. Further, as wage growth at the lower end remains robust, goods in the "new urban" consumption basket (which includes tiles) should see robust demand.

About 80%-85% of tile demand is driven by new housing or first-time users, while the balance is derived from replacement. Interestingly, new housing demand is expected to emerge from non-metro locations (smaller urban centres, Tier-II and III towns) while replacement demand is expected to be largely a metro phenomenon.

This new phenomena will significantly expand the opportunity pie for the Indian tiles sector over the coming years.

Growth drivers for the current year

Your Company''s growth will be driven by a prudent volume- value play that will strengthen business profitability and facilitate in providing superior shareholder value.

Volume-led: Business volumes will expand with the acquisition of the new plant at Morbi, Gujarat by our subsidiary Jaxx Vitrified. Other volume addition would come from the full year operations of Vennar and Cosa units which operated for only a part of the year in 2012-13.

Value driven: We will continue to move up the tile value pyramid through the following initiatives which we expect will sustain our profitability in 2013-14.

- Sale of double-charge polished vitrified tiles (high value product) from Cosa Ceramics

- Replacement of 3.00 MSM soluble salt PVT capacity by GVT at our Sikandrabad unit - a margin-accretive initiative

- Increasing the proportion of digitally printed tiles by investing in additional digital printing machines

Directors

Mr. R. R. Bagri and Mr. B. K. Sinha, Directors of the Company, will retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment.

In accordance with Article 122 to 124 of the Articles of Association of the Company, Mr. B. K. Sinha, Director -

Technical was appointed for a period of 3 years and his tenure will expire on 30th April 2013. In view of the contribution made by, Mr. B. K. Sinha, Director - Technical, it is proposed to re-appoint for another period of three years w.e.f. 1st April 2013 on revised terms and conditions. His re-appointment is subject to the approval of the members.

The Board recommends their re-appointment.

Brief resumes of the directors being appointed/re-appointed together with other relevant details form part of the Notice of the ensuing Annual General Meeting.

Auditors and their observations

M/s O P Bagla & Co., Chartered Accountants, the auditors of the Company would retire at the ensuing Annual General Meeting. They have confirmed their eligibility under section 224 of the Companies Act 1956 and willingness for re- appointment as statutory auditors of the Company.

The Board of Directors recommends the re-appointment of M/s O P Bagla & Co. as Statutory Auditors from the Conclusion of ensuing Annual General Meeting till the Conclusion of next Annual General Meeting.

The observations of the auditors are suitably explained in the notes on accounts.

Particulars of Employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the annexure to the Directors'' Report. Having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and other entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

Directors'' responsibility statement

Pursuant to Section 217 (2AA) of the Companies Act 1956 as amended, Directors confirm that:

i) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures

ii) Appropriate accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March 2013 and the profit and cash flow of the Company for the period 31st March 2013.

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The annual accounts have been prepared on a going concern basis.

Corporate Governance Report

The Company has complied with the Corporate Governance requirements as stipulated under the listing agreement with the stock exchanges. A separate section on corporate governance, along with a certificate from the auditors confirming the compliance, is annexed and forms part of the Annual Report.

Management discussion and analysis report

Management discussion and analysis on matters related to the business performance, as stipulated in Clause 49 of the Listing Agreement with stock exchanges, is given as a separate section in the Annual Report.

Conservation of energy, technology absorption and foreign exchange earnings/ outgo

Information required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (disclosure on particulars in the Report on the Board of Directors) Rules, 1988 is given in Annexure ''I'' and forms part of this Report.

Acknowledgement

Your Directors would like to express their appreciation for the assistance and co-operation received from the banks, Government authorities, dealers, end consumers, suppliers and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the Company.

For and on behalf of the Board

Place: New Delhi Ashok Kajaria

Date: 30th April 2013 Chairman and Managing Director

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Mar 31, 2012

The Directors are pleased to present the 26th Annual Report together with the audited accounts of your Company for the financial year ended 31st March 2012.

(Rs million)

Particulars Standalone Consolidated Year ended Year ended Year ended Year ended 31st March 2012 31st March 2011 31st March 2012 31st March 2011

Gross Sales 14,003 10,046 14,072 10,051

Profit before interest, depreciation and tax 2,016 1,486 2,077 1,490

Financial charges 470 299 485 301

Depreciation 371 295 393 297

Profit before taxation 1,175 892 1199 892

Tax expenses 368 285 380 285

Minority interest - - 10 1

Profit after tax 807 607 809 607

Balance brought forward from the previous year 1,276 994 1,275 994

Profit available for appropriation 2,083 1,601 2,084 1,601

Transferred from debenture redemption reserve - (46) - (46)

Proposed dividend on equity shares 184 147 184 147

Corporate dividend tax 30 24 30 24

Transfer to General Reserve 250 200 250 200

Balance carried forward 1,619 1,276 1,620 1,276

2,083 1,601 2,084 1,601

Financial review

In 2011-12, your Company successfully implemented various strategic initiatives, improving business volumes and profitability, despite a challenging external environment plagued with stubborn inflation and rising interest rates.

Gross sales grew 39% from Rs 10,046 million to Rs 14003 million, facilitated by a robust growth in sales volume and an increased average realisation per sq mtr. The EBIDTA increased from Rs 1,486 million in 2010-11 to 2016 in 2011-12.

The net profit after tax increased from Rs 607 million to Rs 807 million, registering a 33% growth over the previous year. The earnings per share increased from Rs 8.24 to Rs 10.97 per share duringthe same period. The bookvalue per share strengthened from Rs 30.25 as on 31st March 2011 to Rs 38.31 as on 31st March 2012. More importantly, every rupee invested in business delivered superior returns - reflected by the improved return on employed capital.

Dividend

Considering business growth and improved profitability, the Board of Directors recommended a 125% dividend on equity shares (Rs 2.50 per equity share, face value of Rs 2.00). The total payout will be Rs 213.80 million (including dividend distribution tax of Rs 29-84 million).

Corporate highlights

Capacity addition: The Company embarked on a brownfield capacity expansion project (from 2.30 MSM to 4.60 MSM) at its Soriso unit at total investment of Rs 30 million, which is significantly lesser than the initial investment. The Company's 6 MSM high-end polished and glazed vitrified tile unit at the Gailpur unit (a brownfield expansion) commenced operations in March, 2011 and significantly contributed to the Company's growth.

Inorganic growth: The Company acquired 51% stake in Jaxx Vitrified Pvt. Ltd, Gujarat, with an annual capacity of 3.10 MSM of polished vitrified tiles at an investment of Rs 62.65 million. The unit commenced operations in March, 2012. The Company also acquired 51% stake in Vennar Ceramics (2.30 MSM high- end digitally printed ceramic tile capacity) on 9th April, 2012 which is expected to commence production in June, 2012 at an investment of Rs 136.50 million. The plant will cater to the South Indian markets.

Recognition: Awarded the 'Superbrand' status for the sixth consecutive time, emerging as the only Indian tile company to create this record.

Accounts of subsidiaries

Pursuant to the general circular no. 1/2011 dated 8th February, 2011, issued by Ministry of Corporate Affairs, Government of India the Individual accounts of the three subsidiaries of the Company (M/s Soriso Ceramic Private Limited, M/s Jaxx Vitrified Private Limited and M/s Kajaria Ceramics Addis PLC, Ethiopia) for the year ended on 31st March 2012 have not been attached to the Annual Report. However, a statement giving the information as required by the aforesaid Circular is attached to the Annual Report. The Annual Accounts of the subsidiary companies will be available at the registered office of the Company and also at the venue during the Annual General Meeting. The Company shall provide, free of cost, the copy Annual Accounts of its subsidiary companies to the shareholders upon their request.

Fined deposits

The Company did not invite/accept any fixed deposit within the meaning of Section 58A of the Companies Act, 1956, and the rules made thereunder.

Outlook

The outlook for the tile industry appears to be positive over the medium term given the rising aspirations and availability of high- end tiles with a wide range of finishes and designs. This optimism stems from certain credible estimates which highlight the likelihood of robust demand over the medium term.

Real estate growth: The real estate demand in Tier-11 and III cities in India is estimated to be 354 msf of residential space in the next three years. Also, the demand for premium housing and housing for investment purposes is also expected to witness a significant growth with the networth of HNIs expected to grow from Rs 45 trillion in 2010-11 to Rs 235 trillion in 2015-16. As per investment trends, a report by Kotak suggests that HNIs invest nearly 8% of wealth in the real estate segment.

Commercial segment demand: The demand for malls and retail space in the top seven cities in India is expected to reach 112.57 msf in 2015 from 57 msf in 2011. During the same period, office space supply is expected to reach 243.5 msf. This is expected to drive demand for large-format, value-added tiles for flooring solutions.

Social infrastructure creation: The healthcare sector in India is estimated to invest US$86 billion upto 2025 to add 1.8 million beds and 700,000 doctors. India, being a low-cost destination with an improving healthcare scenario is emerging as an attractive destination for medical treatment. The medical tourism in the country, pegged at US$2.5 billion, is growing at 25% annually. This necessitates growing alliances between hospitals and hoteliers to create better infrastructure to cater to the growth in the sector.

Growth drivers for the current year

Your Company expects to leverage this opportunity through a volume-value play in the current year to enhance revenues and margins and focus on strengthening shareholder value.

Volumes expansion: The product volumes are expected to expand substantially following the commissioning of a 2.30 MSM ceramic tiles capacity expansion at Soriso unit, commencement of 3.10 MSM vitrified tile capacity from Jaxx and 2.30 MSM ceramic tiles capacity from Vennar complemented with continued outsourcing from Europe/China and Gujarat.

Value enhancement: Your Company commissioned 6 MSM of value-added vitrified tile capacity in March, 2011, stabilising operations during the second half of the year. Its full impact will be felt in 2012-13. Vitrified tiles capacity of 2.30 MSM from Jaxx Vitrified is expected to generate a premium.

Duringthe year, your Company increased the proportion of digital printed tiles and also manufactured matching digital floor tiles. It introduced large format floor tiles (150x90cm,120x60cm, 80x80cm, 90x30cm,60x60 cm) and high definition digital vitrified tiles with various designs and finishes, offering better aesthetic appeal to customers.

Visibility: Expanded Kajaria World distribution network to seven-owned and 11 franchisees to market high-end tiles apart from widening its dealer network.

Directors

Appointment: Mr. H. Rathnakara Hegde was appointed as an Additional Director of the Company by the Board in its meeting held on 17th January 2012. It is proposed to appoint him as a Director of the Company, liable to retire by rotation, at the ensuing Annual General Meeting.

Retirement by rotation: In accordance with Article 100 of the Articles of Association of the Company, Mr. R. K. Bhargava and Mr. D. P. Bagchi, Directors of the Company, will retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment.

Cessation: Mr. R. P. Goyal passed away during the year 2011-12. He was an eminent member of the Company's Board of Directors. The Board extends its condolences to his family at this hour of bereavement.

Brief resumes of the directors being appointed/re- appointed together with other relevant details form part of the Notice of the ensuing Annual General Meeting. The Board recommends their appointment/ reappointment.

Auditors and their observations

M/s 0 P Bagla & Co., Chartered Accountants, the auditors of the Company retire at the ensuing Annual General Meeting and being eligible offer themselves for reappointment. The Company has received a certificate from the auditors to the effect of their reappointment. The observations of the auditors are suitably explained in the notes on accounts.

Personnel

Talent development remained a key focus during the year. Well structured HR systems were used for talent identification, development and retention. The organisation continues to develop home-grown leaders to support its growth and maintain its competitiveness and leadership in the industry. Systematic identification of successors to key positions enabled a proper succession plan with their respective development plans in place. The Company maintained cordial relations during the year under review. The information required to be furnished in terms of Section 217(2A) of the Companies (Particulars of Employees) Rules, 1975, as amended, is set out in the statement annexed hereto as Annexure-I, forming part of the Report.

Directors' responsibility statement

Pursuant to Section 217 (2AA) of the Companies Act 1956 as amended. Directors confirm that:

i) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures

ii) Appropriate accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March 2012 and the profit and cash flow of the Company for the period ended on 31st March 2012.

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The annual accounts have been prepared on a going concern basis.

Corporate Governance Report

The Company complied with the Corporate Governance requirements as stipulated under the Listing Agreement with the stock exchanges. A separate section on corporate governance, along with a certificate from the auditors confirming the compliance, is annexed and forms part of the Annual Report.

Management discussion and analysis report

Management discussion and analysis on matters related to the business performance, as stipulated in Clause 49 of the Listing Agreement with stock exchanges, is given as a separate section in the Annual Report.

Conservation of energy, technology absorption and foreign exchange earnings/outgo

Information required under Section 217(l)(e) of the Companies Act, 1956, read with the Companies (disclosure on particulars in the Report on the Board of Directors) Rules, 1988 is given in Annexure-II and forms part of this Report.

Acknowledgements

We would also like to place on record our sincere appreciation for the commitment, dedication and hard work put in by every member of the Kajaria Group. To them goes the credit for the Company's achievements.

Your Directors take this opportunity to express their deep sense of gratitude to the banks/ financial institutions. Central and state governments, customers, vendors and the society at large for their continued support.

And to you, our shareholders, we are deeply grateful for the confidence and faith that you have always reposed in us.



For and on behalf of the Board

Place: New Delhi Ashok Kajaria

Date: 27th April 2012 Chairman and Managing Director

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Mar 31, 2011

The Directors are pleased to present the 25th Annual Report together with the audited accounts of your Company for the financial year ended 31st March 2011.

(Rs. in million)

Particulars Standalone Consolidated Year ended Year ended Year ended 31st March 2011 31st March 2010 31st March 2011

Sales (net of excise duty) 9,523 7,355 9,523

Profit before interest, depreciation and tax 1,485 1,157 1,490

Financial charges 298 376 301

Depreciation 295 267 297

Profit before taxation 892 514 892

Tax expenses 285 156 285

Profit after tax 607 358 607

Balance brought forward from the previous year 994 819 994

Profit available for appropriation 1,601 1,177 1,601

Transferred from debenture redemption reserve (46) (2) (46)

Proposed dividend on equity shares 147 73 147

Corporate dividend tax 24 12 24

Transfer to general reserve 200 100 200

Balance carried forward 1,276 994 1,276

1,601 1,177 1,601

* consolidated results include the financial results of Soriso Ceramic Pvt Ltd (subsidiary) for the period 25.2.11 to 31.03.11.

Financial review

During the financial year under review your Company took various strategic initiatives to improve its volume and profitability, which helped the Company to achieve important milestones in the history of the Company.

Gross sales grew 31% from Rs.7,667.54 million to r10,045.71 million primarily due to increase in sales volume and ncrease in the average realisation per sq mtr. The EBIDTA ncreased from Rs.1157 million in 2009-10 to Rs.1,485 million in 2010-11.

The net profit after tax increased fromRs.358 million toRs.607 million registering a 69% growth over the previous year 2009-10. The earnings per share increased from Rs.4.87 to Rs.8.24 per sh a re during the same period. The book value per share strengthened from Rs.2573 as on 31st March 2010 to Rs.30.25 as on 31st March 2011. More importantly, every rupee nvested in business delivered much superior returns - reflected by the improved return on employed capital from 18.94% in 2009-10 to 24.94% in 2010-11.

Dividend

Considering the growth of business and the improved profitability, the Directors recommended a 100% dividend on equity shares (Rs.2/- per equity share, face value of Rs.2). The dividend, if approved, at the forthcoming Annual Genera Meeting, will be paid to all equity shareholders whose names appear in the Register of Members as on 21st May 2011.

Corporate highlights

Capacity addition: Commissioned our 6 MSM tiles brownfield expansion (polished and glazed vitrified) on 29th March 2011 at Gailpur with an investment of Rs.1,299 million and 2.60 MSM converted capacity of ceramic floor tile into vitrified tile manufacturing at Sikandrabad unit on 28th March 2011 with an investment of Rs.203 million. The total investment is being funded by debt and internal accruals.

Inorganic growth: Acquired a 51% stake in Soriso Ceramic Pvt. Ltd., a Gujarat-based floor tile manufacturing company (capacity 2.30 MSM per annum) forRs.56.20 million which is expected to increase the volumes of large format tiles and strengthen the Companys capability in catering to the West and South markets.

Gas connection: Received the gas connection from GAIL for our Gailpur facility replacing high-cost propane with R-LNG - significantly reducing the power and fuel cost for your Company.

Marketing Tie-up: The Company has entered into a marketing tieup with Eczacibasi Yapi Gerecleri A.S., a leading European manufacturer, for selling its high-end VitrA bathware products in India

Recognition: Awarded the Superbrand status for fifth consecutive time, emerging as the only Indian tile company to create this record.

Accounts of Subsidiaries

Pursuant to the general circular no. 1/2011 issued by the Ministry of Corporate Affairs, Government of India, the Individual Annual Accounts of the subsidiary (M/s Soriso Ceramic Private Limited) for the year ended on 31st March 2011, have not been attached to the Annual Report. Copies of these Annual Accounts and related information will be made available on request. The Annual Accounts of the subsidiary Company will be available at the registered office of the Company and also at the venue during the Annua General Meeting.

Fixed deposits

The Company did not invite/accept any fixed deposit within the meaning of Sect ion 58A of the Companies Act, 1956, and the rules made thereunder.

Outlook

The outlook for the tile industry appears to be positive over the medium term. This optimism stems from certain credible estimates which highlight the likelihood of robust demand over the medium term:

Real estate growth: Real estate plays a crucial role in the Indian economy. It is the second largest employer after agriculture and is slated to grow at 30% over the next decade. The Indian real estate market size is expected to touch $180 billion by 2020.

The housing sector alone contributes to 5-6% of the countrys GDP. Retail, hospitality and commercial real estate are also growing significantly, providing the much- needed infrastructure for Indias growing needs.

According to a study by ICRA, the construction industry ranks 3rd among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy. A unit increase in construction expenditure generates five times the income, having a multiplier effect across the board. With backward and forward linkages to over 250 ancillary industries, the positive effects of real estate growth spread far and wide. Truly, real estate is a growth engine for Indias economy.

Real estate developers play a leading role in the industry, bridging the gap between construction ability and the customers need. Developers offer value in terms of design, cost, functionality and location. They work hard to absorb international trends, analyse the customers expectations and deliver quality realty products based on their experience. In India, real estate developers fulfil a critical need for infrastructure to serve a growing economy in areas like housing, office space, retail and entertainment, among others.

Commercial segment demand: The share of organised retail in the total Indian retail trade pie is projected to grow at 40% per annum. The number of shopping malls is expected to increase at an 18.9% CAGR between 2007 and 2015. This is expected to drive the demand for large-format, value-added tiles for flooring solutions and high-end wall tiles for the external façade.

Social infrastructure creation: The healthcare sector is estimated to become a US$ 280 billion industry by 2020 from the current US$ 40 billion (source: ibef). With India emerging as a preferred destination for medical treatment, medical tourism in the country is expected to grow at a CAGR (2011-2013) of 26% to reach US$ 3 billion by 2013, reflecting the necessity to create world-class health infrastructure – accelerating the demand for value-added tiles.

Growth drivers for the current year

Your Company expects to leverage a volume-value play in the current year to accelerate its growth momentum and strengthen value creation for its valued shareholders.

Volumes expansion

The product volumes are expected to expand substantially following the commissioning of its brownfield expansion at Gailpur and conversion of part of ceramic tile manufacturing facility in to vitrified– adding a cumulative 8.60 MSM capacity.

Value enhancement

Your Company has added 8.6 MSM of vitrified tile capacity which provides superior realisation. Besides, the important change from importing these tiles to in-house manufacturing is expected to significantly strengthen business profitability.

Your Company developed a range of new value added products which are expected to be commercialised in 2011- 12, shoring margins. Wall tiles for exterior wall applications is one important development; digitally printed tiles in more than 10 designs (providing a natural stone look and feel) is the other – strengthening realisations and margins.

In addition, the trading models for bathware and wooden flooring solutions are expected to make sizeable contributions to the topline and business profitability

Directors

Mr. Ashok Kajaria has been re-appointed as Chairman and Managing Director of the Company, w.e.f 1st April 2011 subject to the approval of the members.

In accordance with Article 100 of the Articles of Association of the Company, Mr. R.P. Goyal and Mr. R. R. Bagri, Directors of the Company, retires by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

The details of their re-appointment together with nature of their expertise in specific functional areas and names of the companies in which they hold a Director or Chairman / membership of the committees of the Board are provided in the notice of the ensuing Annual General Meeting.

Auditors and their observations

M/s O P Bagla & Co., Chartered Accountants, the auditors of the Company retire at the ensuing Annual General Meeting and being eligible offer themselves for re- appointment. The Company received a certificate from the auditors to the effect of their re-appointment. The observations of the auditors are suitably explained in the notes on accounts.

Personnel

Your Company maintained cordial relations during the year under review. The Company continued its endeavour to grow the learning curve through regular training programmes for its team members enabling them to attain higher productivity and superior quality. The information required to be furnished in terms of Section 217(2A) of the Companies (Particulars of Employees) Rules, 1975, as amended, is set out in the statement annexed hereto as Annexure-I, forming part of the report.

Directors responsibility statement

Pursuant to the provisions of the Companies Act 1956, your Directors confirm that:

i) In the preparation of the annual accounts, the applicable accounting standards were followed along with proper explanations relating to material departures

ii) The Directors selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period.

iii) The Directors took proper and sufficient care to maintain adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The Directors prepared the annual accounts on a going concern basis.

Corporate Governance report

Pursuant to Clause 49 of the Listing Agreement with the stock exchanges, the Company has complied with the Corporate Governance. A separate section on Corporate Governance along with the certificate from auditors confirming the compliance is annexed and forms part of annual report.

Management discussion and analysis report

Management discussion and analysis on matters related to the business performance, as stipulated in Clause 49 of the Listing Agreement with stock exchanges, is given as a separate section in the annual report.

Conservation of energy, technology absorption and foreign exchange earnings/outgo

Information required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (disclosure on particulars in the report on the Board of Directors) Rules, 1988 is given in Annexure-II and forms part of this report.

Acknowledgement

The Board greatly appreciate the commitment and dedication of employees at all levels who have contributed on the growth and success of the Company. The credit for the Companys achievement goes to them.

We would also take this opportunity to offer thanks and deep sense of gratitude for the cooperation and support received from the central and state government authorities, financial institution/banks, customers, vendors, shareholders and the society at large.

We are deeply grateful to our shareholders for the confidence and faith reposed on us.

Your Company looks forward to their continued support in future.

For and on behalf of the Board

Place: New Delhi Ashok Kajaria

Date: 30th April, 2011 Chairman and Managing Director

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Mar 31, 2010

The Directors are pleased to present the 24th Annual Report together with the audited accounts of your Company for the

Financial year ended 31st March, 2010.

(in mn)

Particulars Year ended Year ended

31st March, 2010 31st March, 2009

Sales (net of excise duty) 7,355 6,649

Profit before interest, depreciation and tax 1,156 958

Financial charges 375 582

Depreciation 267 249

Profit before taxation 514 127

Provision for income tax 130 17

Provision for fringe benefit tax 0 8

Provision for deferred tax 14 12

Income tax adjustment 12 1

Profit after tax 358 89

Add: Balance brought forward from the previous year 819 728

Profit available for appropriation 1,177 817

Transferred from debenture redemption reserve (2) (19)

Proposed dividend on equity shares 73 15

Corporate dividend tax 12 2

Transfer to General Reserve 100 0

Balance carried forward 994 819

1,177 817

Financial review

The fiscal 2009-10 marks an important milestone in the history of your Company. Your Company recorded its best performance in its more than two decade history.

Gross sales grew 11% from 6,911.99 mn to 7, 667.54 mn. Improved operational efficiency, higher capacity utilisation and improved product quality facilitated in strengthening the EBIDTA. The EBIDTA increased from 959.26 mn in 2008-09 to 1156.72 mn in 2009-10 and EBIDTA margin improved by 130 bps during the same period.

Prudent financial management enabled your Company to reduce external debt by 623.39 mn. Besides, better working capital management and negotiation with the banks have resulted in decline in interest cost from 582.42 mn in FY 2008-09 to 375.24 mn in FY 2009-10 – improving your Company’s profitability.

The net profit increased by 303% from 88.99 mn in 2008-09 to 358.52 mn in 2009-10. The earnings per share increased from 1.21 to 4.87 per share during the same period. The book value per share strengthened from 22.02 as on 31st March, 2009 to 25.73 as on 31st March, 2010. More importantly, every rupee invested in business delivered much superior returns – reflected by the improved return on average capital employed from 14.50% in 2008-09 to 18.94% in 2009-10.

Dividend

The Directors recommended a 50% dividend on equity shares ( 1 per equity share, face value of 2). The dividend, if approved, at the forthcoming Annual General Meeting, will be paid to all equity shareholders whose names appear in the Register of Members as on 11th August, 2010.

Corporate highlights

Improved product offering: Your Company only increased its product offering in 2009-10; thereby strengthening its recall as an innovative tile manufacturer. The team developed more than 60 new design concepts in 2009-10; it introduced the paper finish and satin wall paper finish for its wall tiles; it introduced more than 40 designs for the powerline series, comprising large format tiles, where the floor tile design matched with that of wall tiles. In addition we ventured into manufacturing new dimension (15x60 cms) wall tiles with a wooden flooring look in December 2009.

New product vertical: Your Company commissioned its 2.40 mn sqm vitrified tile facility at Sikandrabad (Uttar Pradesh) in February 2010; adding a margin-accretive product vertical to the business model. This facility will replace some part of imports with in-house manufacturing, strengthening your Companys profitability.

Operational efficiency: Your Company improved the average capacity utilisation from 76% in 2008-09 to 94% in 2009-10.

Fixed deposits

The Company did not invite/accept any fixed deposit within the meaning of Section 58A of the Companies Act, 1956, and the rules made thereunder.

Outlook

The outlook for the tile industry appears to be positive over the medium term. This optimism stems from certain credible estimates which highlight the likelihood of robust demand over the medium term:

The real estate market is expected to grow at CAGR 15% to 16% over 2010 to 2015. Estimates suggest a shortage of an approximate 25 mn housing units in the middle and low income groups at the beginning of the Eleventh Plan. It is also expected that the medium housing segment will record around 25% CAGR while luxury housing will experience a 33% CAGR during 2009-13. More importantly, the prices of residential apartments increased considerably in recent times; reducing the flooring budget. Hence, the residence owners are looking for value-added products which would be in sync with the residential unit. This should result in increased demand of high-value products from the organised realty sector and the retail market. The organised retail market is expected to grow from present 5% to 10.4% of the retail market by 2012. The healthcare segment is also expected to further improve the demand for tiles

Growth drivers for your Company

Your Company expects to improve its performance in the current year. This assumption is based on the following realities:

Impact of new products: Your Company expects its new products (large format wall tile - 30x60 cm and 30x45 cm) and vitrified tiles launched in 2009-10 to contribute significantly to your Company’s performance in the coming years. The current year will mark the first full year of operations of the vitrified tile unit at Sikandrabad Fuel cost reduction: Your Company’s Gailpur plant received low cost natural gas from May 2010 against the high cost propane being used. This is expected to reduce power and fuel cost substantially.

New manufacturing line: In view of the future growth in the vitrified tile segment your Company is commissioning 6 mn sqm annual capacity of high end polished vitrified and glazed porcelain tiles at the existing location in Gailpur at an investment of 1,250 mn, which is being funded by debt and internal accruals. The plant is expected to commence operations by December 2010.

Directors

Mr. Chetan Kajaria and Mr. Rishi Kajaria were appointed as Joint Managing Directors of the Company, w.e.f 1st April, 2010 subject to the approval of the members.

Mr. B.K.Sinha has been appointed as additional Director to be designated as Director-Technical for a period of 3 years w.e.f. 1st May, 2010 whose appointment is subject to confirmation in the ensuing Annual General Meeting. He is liable to retire by rotation.

Mr. D. D. Rishi resigned from the Board of Directors w.e.f 30th April, 2010. Mr. D. D. Rishi joined Kajaria Group in January 1987 and was given the responsibility of both the plants (Sikandrabad and Gailpur). He managed all operations meticulously. The Board extends their best wishes to him.

In accordance with the Articles 100 of the Articles of Association of the Company, Shri R. K. Bhargava and Shri D. P. Bagchi, Directors of the Company, retires by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

The details of their re-appointment together with nature of their expertise in specific functional areas and names of the Companies in which they hold of a Director or Chairman / membership of the committees of the Board are provided in the notice of the ensuing Annual General Meeting.

Auditors and their observations

M/s O P Bagla & Co., Chartered Accountants, the auditors of the Company retire at the ensuing Annual General Meeting and being eligible offer themselves for reappointment. The Company received a certificate from the auditors to the effect of their reappointment. The observations of the auditors are suitably explained in the notes on accounts.

Personnel

Your Company maintained cordial relations during the year under review. The Company continued its endeavour to grow the learning curve through a regular training programmes for its team members enabling them to attain higher productivity and superior quality. The information required to be furnished in terms of Section 217(2A) of the Companies (Particulars of Employees) Rules, 1975, as amended, is set out in the statement annexed hereto as Annexure-I, forming part of the Report.

Directors responsibility statement

Pursuant to the provisions of the Companies Act 1956, your Directors confirm that:

i) In the preparation of the annual accounts, the applicable accounting standards were followed along with proper explanations relating to material departures

ii) The Directors selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period.

iii) The Directors took proper and sufficient care to maintain adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The Directors prepared the annual accounts on a going concern basis.

Corporate Governance Report

Pursuant to Clause 49 of the Listing Agreement with the stock exchanges, the Company complied with the Corporate Governance. A separate section on Corporate Governance along with the certificate from auditors confirming the compliance is annexed and forms part of Annual Report.

Management Discussion and Analysis Report

Management Discussion and Analysis on matters related to the business performance, as stipulated in Clause 49 of the Listing Agreement with stock exchanges, is given as a separate section in the Annual Report.

Conservation of energy, technology absorption and foreign exchange earnings/outgo

Information required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (disclosure on particulars in the Report on the Board of Directors) Rules, 1988 is given in Annexure-II and forms part of this Report.

Acknowledgements

Your Directors take this opportunity to offer their thanks and deep sense of gratitude for the cooperation and support received from the central and state government authorities, financial institution/banks, customers, vendors, shareholders and the society at large.

We would also like to place on record, our sincere appreciation for the total commitment, dedication, contribution and hard work of employees across all levels. The credit for the Company’s achievement goes to them.

We are deeply grateful to our shareholders for the confidence and faith reposed on us.

Your Company looks forward to their continued cooperation in realisation of the corporate goals in the years ahead.

For and on behalf of the Board

Place: New Delhi Ashok Kajaria

Date: 10th July, 2010 Chairman and Managing Director