Notes to Accounts of Somany Ceramics Ltd.

Mar 31, 2025

2.14 Provisions, Contingent Liabilities

Based on the best estimate provisions are recognized when there is
a present obligation (legal or constructive) as a result of a past event
and it is probable ("more likely than not") that it is required to settle
the obligation, and a reliable estimate can be made of the amount of
the obligation at reporting date.

A contingent liability is a possible obligation that arises from a past
event, with the resolution of the contingency dependent on uncertain
future events, or a present obligation where no outflow is probable.
Major contingent liabilities are disclosed in the financial statements
unless the possibility of an outflow of economic resources is remote.

2.15 Measurement of fair value
a) Financial instruments

The estimated fair value of the Company’s financial instruments
is based on market prices and valuation techniques. Valuations
are made with the objective to include relevant factors that
market participants would consider in setting a price, and
to apply accepted economic and financial methodologies
for the pricing of financial instruments. References for less
active markets are carefully reviewed to establish relevant and
comparable data.

b) Marketable and non-marketable equity securities

Fair value for quoted securities is based on quoted market prices
as of the reporting date. Fair value for unquoted securities is
calculated based on commonly accepted valuation techniques
utilizing significant unobservable data. If fair value cannot be
measured reliably unlisted shares are recognized at cost.

2.16 Financial instruments

A Financial Assets

i) Initial recognition and measurement

Financial assets (except trade receivables) are measured
initially at fair value adjusted for transaction costs, except
for those carried at fair value through profit or loss
which are measured initially at fair value. However, trade
receivables that do not contain a significant financing
component are measured at transaction price.

ii) Classifications and Subsequent measurement

The Company classifies its financial assets as
subsequently measured at either amortized cost or fair
value depending on the Company’s business model for
managing the financial assets and the contractual cash
flow characteristics of the financial assets.

a) Financial assets at amortized cost

A financial asset is measured at amortized cost only
if both of the following conditions are met:

- it is held within a business model whose
objective is to hold assets in order to collect
contractual cash flows.

- the contractual terms of the financial assets
represent contractual cash flows that are solely
payments of principal and interest.

After initial measurement, such financial assets are
subsequently measured at amortized cost using the
Effective Interest Rate (''EIR’) method. Amortized cost
is calculated by taking into account any discount or
premium on acquisition and fees or costs that are

an integral part of the EIR. The EIR amortization is
included as finance income in the Statement of Profit
& Loss. The losses arising from impairment are
recognized in the Statement of Profit & Loss.

b) Financial assets at fair value through Profit & Loss
(FVTPL)

Financial assets, which does not meet the criteria for
categorization as at amortized cost or as FVOCI, are
classified as at FVTPL.

I n addition, the Company may elect to classify a
Financial assets, which otherwise meets amortized
cost or FVOCI criteria, as at FVTPL. However,
such election is allowed only if doing so reduces
or eliminates a measurement or recognition
inconsistency (referred to as ''accounting
mismatch’).

Financial assets included within the FVTPL category
are measured at fair value with all changes recognized
in the Statement of Profit & Loss.

All other Financial Instruments are classified as
measured at FVTPL except investment in equity
instruments of subsidiaries and associates which
are carried at cost less provision for impairment, if
any.

iii) Derecognition of financial assets

A financial asset (or, where applicable, a part of a financial
asset or part of a group of similar financial assets) is
primarily derecognized (i.e. removed from the Company’s
balance sheet) when:

- The rights to receive cash flows from the asset have
expired, or

- The Company has transferred its rights to receive
cash flows from the asset or has assumed an
obligation to pay the received cash flows in full
without material delay to a third party under a ''pass¬
through’ arrangement; and either (a) the Company
has transferred substantially all the risks and
rewards of the asset, or (b) the Company has neither

transferred nor retained substantially all the risks and
rewards of the asset, but has transferred control of
the asset.

When the Company has transferred its rights to receive
cash flows from an asset or has entered into a pass¬
through arrangement, it evaluates if and to what extent it
has retained the risks and rewards of ownership. When
it has neither transferred nor retained substantially all
of the risks and rewards of the asset, nor transferred
control of the asset, the Company continues to recognize
the transferred asset to the extent of the Company’s
continuing involvement. In that case, the Company also
recognizes an associated liability. The transferred asset
and the associated liability are measured on a basis that
reflects the rights and obligations that the Company has
retained.

Continuing involvement that takes the form of a guarantee
over the transferred asset is measured at the lower of the
original carrying amount of the asset and the maximum
amount of consideration that the Company could be
required to repay.

On derecognition of a financial asset, the difference
between the carrying amount of the asset (or the carrying
amount allocated to the portion of the asset derecognized)
and the sum of (i) the consideration received (including any
new asset obtained less any new liability assumed) and (ii)
any cumulative gain or loss that had been recognized in
OCI is recognized in the Statement of Profit & Loss.

v) Impairment of financial assets

The Company assesses on a forward looking basis the
expected credit losses associated with its assets carried at
amortized cost and FVOCI. The impairment methodology
applied depends on whether there has been a significant
increase in credit risk.

With regard to trade receivable and loans given, the
Company applies the simplified approach as permitted
by Ind AS 109, Financial Instruments, which requires
expected lifetime losses to be recognized from the initial
recognition of the trade receivables and loans given.

B Financial liabilities

i) Initial recognition and measurement

Financial liabilities are classified, at initial recognition,
as financial liabilities at fair value through profit or loss,
amortized cost, as appropriate.

All financial liabilities are recognized initially at fair
value and, in the case of amortized cost, net of directly
attributable transaction costs.

ii) Classifications and subsequent measurement

The measurement of financial liabilities depends on their
classification, as described below:

Financial Liabilities measured at amortized cost

After initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortized cost
using the EIR method. Gains and losses are recognized in
profit or loss when the liabilities are derecognized as well
as through the EIR amortization process.

Amortized cost is calculated by taking into account any
discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortization
is included as finance costs in the Statement of Profit &
Loss.

iii) Derecognition of financial liabilities

The Company derecognizes a financial liability when its
contractual obligations are discharged or cancelled, or
expired.

2.17 Income tax

Income tax expense comprises current and deferred tax. It is
recognized in the Statement of Profit & Loss except to the extent
that it relates to items recognized directly in Equity or in Other
Comprehensive Income.

Current tax

Current tax comprises the expected tax payable or receivable on the
taxable income or loss for the year and any adjustment to the tax
payable or receivable in respect of previous years. It is measured

using tax rates enacted or substantively enacted at the reporting
date. Current tax assets and liabilities are offset only if, the Company:

a) Has a legally enforceable right to set off the recognized
amounts; and

b) Intends either to settle on a net basis, or to realize the asset and
settle the liability simultaneously.

Deferred tax

Deferred tax is recognized on differences between the carrying
amounts of assets and liabilities in the balance sheet and the
corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are recognized for all taxable temporary
differences. Deferred tax assets are recognized for all deductible
temporary differences to the extent it is probable that taxable
profits will be available against which those deductible temporary
differences can be utilized. Such assets and liabilities are not
recognized if the temporary difference arises from initial recognition
of goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that
affects neither the taxable profit nor the accounting profit.

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

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

2.18 Leases

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

Company as a lessee

The Company assesses whether a contract is or contains a lease,
at inception of the contract. The Company recognizes a right-of-

use asset and a corresponding lease liability with respect to all
lease arrangements in which it is the lessee, except for short-term
leases (defined as leases with a lease term of 12 months or less)
and leases of low value assets, wherein, the Company recognizes
the lease payments as an operating expense on a straight-line
basis over the lease term, unless another systematic basis is more
representative of the time pattern in which economic benefits from
the leased assets are consumed. Contingent and variable rentals are
recognized as expense in the periods in which they are incurred.

Lease Liability

The lease payments that are not paid at the commencement date,
are discounted using the interest rate implicit in the lease. If that
rate cannot be readily determined, which is generally the case for
leases in the Company, the lessee’s incremental borrowing rate is
used, being the rate that the individual lessee would have to pay to
borrow the funds necessary to obtain an asset of similar value as
that of right-of-use asset in a similar economic environment with
similar terms, security and conditions.

Lease payments included in the measurement of the lease liability
comprise:

• Fixed lease payments (including in-substance fixed payments)
payable during the lease term and under reasonably certain
extension options, less any lease incentives;

• Payments of penalties for terminating the lease, if the lease
term reflects the exercise of an option to terminate the lease.

The lease liability is presented as a separate line in the Balance
Sheet.

The lease liability is subsequently measured by increasing the
carrying amount to reflect interest on the lease liability (using the
effective interest method) and by reducing the carrying amount to
reflect the lease payments made.

The Company remeasures the lease liability (and makes a
corresponding adjustment to the related right-of-use asset)
whenever:

• The lease term has changed or there is a change in the
assessment of exercise of a purchase option, in which case the
lease liability is remeasured by discounting the revised lease
payments using a revised discount rate.

not accounted for as a separate lease, in which case the
lease liability is remeasured by discounting the revised lease
payments using a revised discount rate.

Right of Use (ROU) Assets

The ROU assets comprise the initial measurement of the
corresponding lease liability, lease payments made at or before
the commencement day and any initial direct costs. They are
subsequently measured at cost less accumulated depreciation and
impairment losses. Whenever the Company incurs an obligation for
costs to dismantle and remove a leased asset, restore the site on
which it is located or restore the underlying asset to the condition
required by the terms and conditions of the lease, a provision is
recognized and measured under Ind AS 37- Provisions, Contingent
Liabilities and Contingent Assets. The costs are included in the
related right-of-use asset.

ROU assets are depreciated over the shorter period of the lease term
or useful life of the underlying asset. If the Company is reasonably
certain to exercise a purchase option, the right-of-use asset is
depreciated over the underlying asset’s useful life. The depreciation
starts at the commencement date of the lease.

The ROU assets are presented as a separate line in the Balance Sheet
and details of assets are given ROU note under "Notes forming part
of the Financial Statement".

The Company applies Ind AS 36- Impairment of Assets to determine
whether a right-of-use asset is impaired and accounts for any
identified impairment loss as per its accounting policy on ''property,
plant and equipment’.

As a practical expedient, Ind AS 116 permits lessee not to separate
non-lease components when bifurcation of the payments is not
available between the two components, and instead account
for any lease and associated non-lease components as a single
arrangement. The Company has used this practical expedient.

Extension and termination options are included in many of the
leases. In determining the lease term the management considers
all facts and circumstances that create an economic incentive to
exercise an extension option, or not exercise a termination option.

2.19 Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand and
short-term deposits with an original maturity of three months or
less.

For the purposes of the Statement of Cash Flows, cash and cash
equivalents is as defined above, net of outstanding bank overdrafts.
In the balance sheet, bank overdrafts are shown within borrowings
in current liabilities.

2.20 Government Grants

Government grants are recognized at its fair value, where there
is a reasonable assurance that such grants will be received and
compliance with the conditions attached therewith have been met.
Grants such accured are credited to the statement of profit and loss.

Government grants related to expenditure on property, plant and
equipment are credited to the statement of profit and loss over the useful
lives of qualifying assets or other systematic basis representative of the
pattern of fulfillment of obligations associated with the grant received. "

2.21 Standard issued but not yet effective

Ministry of Corporate Affairs ("MCA") notifies new standard or
amendments to the existing standards under Companies (Indian
Accounting Standards) Rules as issued from time to time. During
the year ended 31 March, 2025, MCA has not notified any new
standards or amendments to the existing standards applicable to
the Company.

(ii) Equity shares extinguished on buy-back

The shareholders of the Company vide postal ballot notice dated 26 October, 2023 approved the proposal of buyback 14,70,588 fully paid-up
Equity Shares of the Company on a proportionate basis, through the tender offer route, at a price of '' 850/- per Equity Share payable in cash for
an aggregate amount not exceeding '' 12,500 Lakhs (excluding transaction cost and taxes) on 02 December, 2023. The Company bought back
14,70,588 fully paid-up Equity Shares and settled all valid bids and extinguished equity shares bought back during year ended 31 March, 2024.

g. shares reserved for issue under options

Information relating to Somany Ceramics Employee Stock Option Plan 2021 (ESOP 2021)and Somany Ceramics Employee Stock Option Plan 2023
(ESOP 2023), including details of options issued, exercised and lapsed during the financial year and options outstanding at the end of the reporting
period, is set out in note no. 48.

# Company has some subjudice labour dispute matters impact of which cannot be ascertained at this stage.

Pending resolution of the respective proceedings, it is not practicable for the Company to estimate the timings of cash outflows, if any, in respect
of the above as it is determinable only on receipt of judgments/ decisions pending with various forums/ authorities. However, the Company has
reviewed all its pending litigation and proceeding and has adequately provided for where provision required and disclosed as contingent liabilities
where applicable, in its financial statements. The Company does not expect the outcome of these proceeding to have a materially adverse effect on
its financial position. The Company does not expects any payment in respect of the above contingent liabilities.

B. Others

In light of judgment of Honorable Supreme Court dated 28 February, 2019 on the definition of "Basic Wages" under the Employees Provident Funds
& Misc. Provisions Act, 1952 and based on Company’s evaluation, there are significant uncertainties and numerous interpretative issues relating to
the judgement and hence, it is unclear as to whether the clarified definition of Basic Wages would be applicable prospectively or retrospectively. The
amount of the obligation therefore cannot be measured with sufficient reliability for past periods and hence has currently been considered to be a
contingent liability.

(ii) The Company, in terms of the Share Subscription cum Shareholders Agreements with subsidiary companies, may contribute funds (loan /
equity) in the proportion of its shareholding for the purpose of meeting repayment obligation to banks, financial institutions or other lenders,
any statutory liability, liabilities towards fuel suppliers or such other similar liabilities, fund requirement for expansion/ diversification, etc. The
Company shall not withdraw the funds so infused, if any, till the money remain due to bank.

(ii) Defined Benefit Plan:

The Company made provision for gratuity as per the Payment of Gratuity Act, 1972. The amount of gratuity payable on retirement/termination is
employee''s last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. Gratuity
liability is being contributed to the gratuity fund formed by the Company.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at 31
March, 2025. The present value of the defined benefit obligations and the related current service cost and past service cost, was measured using the
Projected Unit Credit Method.

B. Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are:

(a) recognized and measured at fair value and

(b) measured at amortized cost.

To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into
the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

II. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- credit risk;

- liquidity risk; and

- market risk

i. Risk management framework

The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework.
The board of directors has established the processes to control risks through defined framework.

The Company’s risk management policy is established to identify and analyse the risks faced by the Company, to set appropriate controls. Risk
management policy is reviewed by the board annually to reflect changes in market conditions and the Company’s activities.

The Company’s Audit Committee oversees compliance with the Company’s risk management policy, and reviews the adequacy of the risk
management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by Internal Audit.
Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the
Audit Committee.

KB FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT (CONTD.)

ii. Credit risk

Financial loss to the Company, arising, if a customer or counterparty to a financial instrument fails to meet its contractual obligations principally
from the Company’s receivables from customers and investments in debt securities.

The carrying amount of financial assets represents the maximum credit exposure. The Company monitor credit risk closely both in domestic
and export market.

Trade and other receivables

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers
the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.
The Company Management has established a credit policy under which each new customer is analyzed individually for creditworthiness before
the Company’s standard payment and delivery terms and conditions are offered. Sales credit limit are set up for each customer and reviewed
periodically. The credit risk from loans to other corporate is managed in accordance with the Company’s fund management policy that includes
parameters of safety, liquidity and post tax returns. The Company’s review includes market check, industry feedback, past financials and external
ratings, if they are available, and in some cases bank reference checks are also done.

The Company creates allowances for impairment that represents its expected credit losses in respect of trade and other receivables. The
management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables.

Investments and Cash Deposits

Credit risk from balances with banks is managed by the Company’s finance department.

Company invests in Bonds, Debentures, Liquid Mutual Funds, Equity instruments etc., in accordance with the Company’s Investment Policy that
includes parameters of safety, liquidity and post tax returns. Company avoids the concentration of credit risk by spreading them over several
counterparties with good credit rating profile and sound financial position as well as held to maturity policy. The Company’s exposure and
credit ratings of its counterparties are monitored on an ongoing basis. Based on historical experience and credit profiles of counterparties, the
Company does not expect any significant risk of default other than as disclosed.

iii. Liquidity risk

Liquidity risk is the risk that the Company may face difficulty in meeting the obligations associated with its financial liabilities that are settled
by delivering cash or another financial asset. The Company’s approach to manage liquidity is to ensure, as far as possible, sufficient liquidity to
meet its obligations, under both normal and stressed conditions.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an
adequate amount of committed credit facilities to meet obligations when due and to close out market positions.

Management monitors rolling forecasts of the Company’s liquidity position (comprising the undrawn borrowing facilities) and cash and cash
equivalents on the basis of expected future cash flows.

Maturities of financial liabilities

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and
exclude contractual interest payments and the impact of netting agreements.

iv. Market risk

Risk on account of changes in foreign exchange rates, interest rates etc. that may affect the Company’s income or the value of its holdings
of financial instruments. The objective of market risk is to optimize the return by managing and controlling the market risk exposures within
acceptable parameters.

v. Currency risk

Foreign exchange risk arises from future commercial transactions and recognized assets and liabilities denominated in a currency that is not the
Company’s functional currency (''). The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with
respect to the USD and small exposure in CNY, EURO & NPR. The risk is measured through a forecast of highly probable foreign currency cash
flows.The Company has no significant currency exposure.

Exposure to currency risk

The summary quantitative data about the Company’s exposure to currency risk as reported to the management of the Company is as follows
(Foreign currency in Lakhs).

47 Exceptional items

i. The Company has divested its investment in one of its subsidiary ""Acer Granito Private Limited"", w.e.f 01 December, 2024 through an agreement,
dated on 04 February, 2025, with the existing shareholders of the subsidiary resulting gain on divestment of '' 544.30 Lakhs, during the year
ended 31 March, 2025.

ii. The Company has divested its investment in one of its subsidiary "Amora Tiles Private Limited", w.e.f 01 December, 2024 through an agreement,
dated on 04 February, 2025, with the existing shareholders of the subsidiary resulting gain on divestment of '' 397.80 Lakhs, during the year
ended 31 March, 2025.

iii. The Company, in the earlier years, had impaired its investment of '' 1,844.73 Lakhs in NCDs, issued by SREI Equipment Finance Limited. In the
previous year, Hon’ble NCLT Kolkata approved resolution plan under Insolvency & Bankruptcy Code, 2016. In terms of the Approved Resolution
Plan, the implementation notice was issued by National Asset Reconstruction Company Limited ("NARCL") and Implementation and Monitoring
Committee ("IMC") authorized the administrator for commencement of the distribution against claims with the record date set as at 06 October,
2023. Accordingly, the Company has recognized Gain of '' 456.45 Lakhs as exceptional item on account recovery of '' 129.31 Lakhs in cash and
allotment of Security Receipts (SRs)/ Optionally Convertible Debentures (OCDs), to trustees on behalf of the Company, for the value of '' 461.13
Lakhs (recognized at an estimated fair value of '' 327.14 Lakhs) in terms of the Approved Resolution Plan. Pending ascertainment of the issue
terms and conditions of the SRs/ OCDs the same has been disclosed under the head "Other Financial Assets".

iv. The Company has divested its investment in one of its subsidiary "Somany Fine Vitrified Private Limited", w.e.f 01 July, 2023 through an
agreement, dated on 26 August, 2023, with the existing shareholders of the subsidiary resulting loss on divestment of '' 336.60 Lakhs, during the
year ended 31 March, 2024.

EE1 SHARE BASED PAYMENTS
a). Scheme Details

Nomination and Remuneration Committee (NRC) and Board of Directors at its respective meetings held on 10 December, 2021 and 23 May, 2023,
approved an issue of stock options aggregating 4,23,794 and 12,74,226 equity shares of the face value of '' 2 each, up to a maximum of 1% and 3% of the
then issued equity capital of the Company respectively. The shareholders of the Company vide their special resolutions passed through postal ballot on
07 April, 2022 and passed at its 55th Annual General Meeting (AGM) held on 25 August, 2023 approved the issue of equity shares of the Company under
Somany Ceramics Employee Stock Option Plan 2021 (ESOP 2021)and Somany Ceramics Employee Stock Option Plan 2023 (ESOP 2023) respectively.
Details of options granted by NRC under the said scheme are as follows:

EM DIVIDEND

During the year, the Company has paid dividend of '' 3/- per equity share aggregating '' 1,230.11 Lakhs towards final dividend for the year ended 31 March,
2024. Further, the Board of directors has recommended dividend of '' 3/- per equity share aggregating '' 1230.29 Lakhs in their meeting held on 07 May,
2025 for the financial year ended 31 March, 2025 and same is subject to approval of shareholders at the ensuing Annual General Meeting.

EM SEGMENT REPORTING

According to Ind AS 108, identification of operating segments is based on Chief Operating Decision Maker (CODM) approach for making decisions about
allocating resources to the segment and assessing its performance. The business activity of the Company falls within one broad business segment viz.
"Ceramic Tiles and Allied products" and substantially sale of the products and Non-current assets are within the country. Hence, the disclosure requirement
of Ind AS 108 of ''Segment Reporting’ is not considered applicable.

ADDITIONAL REGULATORY INFORMATION REQUIRED BY SCHEDULE III TO BE DISCLOSED IN THE FINANCIAL STATEMENTS:

i) The Company does not have transactions with companies struck off under section 248 of the Companies Act, 2013 or Section 560 of Companies Act
1956.

ii) No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition)
Act, 1988 (45 of 1988) and Rules made thereunder.

iii) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

iv) The Company has complied with the number of layers prescribed under the Companies Act, 2013.

v) There is no undisclosed income under the tax assessments under the Income Tax Act, 1961 for the year ending 31 March, 2025 and 31 March, 2024
which needs to be recorded in the books of account.

vi) The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

vii) Utilisation of borrowed funds and share premium:-

a) The Company during the year has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the
ultimate beneficiaries.

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

viii) Borrowings obtained by the Company from banks and financial institutions have been applied for the purposes for which such loans were was
taken.

ix) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

60 The Company has been sanctioned working capital limit from bank on the basis of security of current assets. The quarterly returns/ statements filed
by the Company with the bank, are in agreement with the books of accounts of the Company of the respective quarters.

61 During the financial year 2018-19, the Company had discovered defalcation of '' 1,585.82 Lakhs committed by an employee. The Company has
filed a civil as well as a criminal suit against him and his wife, being the beneficiaries. During the pendency of the suit, he and his wife have signed
a ''Memorandum of Understanding’ (MOU) dated 11 February, 2021 with the Company, duly acknowledged by Hon’ble High Court of Gujarat vide
its order dated 12 February, 2021, under which he and his wife offered their immovable properties to the tune of '' 660.00 Lakhs (net off loan of
'' 40.17 Lakhs), which has since been transferred in the name of the Company, as value determined by the Hon’ble High Court of Gujarat and a sum
of '' 40.00 Lakhs deposited by them in the Court towards compliance of their Bail condition. In terms of the said MOU, the Company is obligated
to attempt to sell the properties in a diligent manner and quantify the amount received upon sale of such properties (net of expenses) and submit
a purshis(s) of the same with the Hon’ble Civil Court. The Company has during the year sold four properties and increased the "Liability under
Defalcation Suit". Awaiting the final decree of the Hon’ble Civil Court, the Company is holding the properties in fiduciary capacity and disclosed the
same as ''Properties held in trust’ under Note no. 16 amounting to '' 363.77 Lakhs (Previous year '' 657.75 Lakhs) and also recognized ''Liability under
Defalcation Suit’ amounting to '' 639.73 Lakhs (net of Expenses) (Previous year '' 665.42 Lakhs) under Note no 27. The final accounting and taxation
of the amounts mentioned in the purshis(s) would be done based on the final verdict of the Hon’ble Civil Court.

62 The Company, in the earlier years, had fully impaired its investment of '' 1,844.73 Lakhs in NCDs, issued by SREI Equipment Finance Limited. In
the previous year, Hon’ble NCLT Kolkata approved resolution plan under Insolvency & Bankruptcy Code, 2016. In terms of the Approved Resolution
Plan, the implementation notice was issued by National Asset Reconstruction Company Limited ("NARCL") and Implementation and Monitoring
Committee ("IMC") authorized the administrator for commencement of the distribution against claims with the record date set as at 06 October,
2023. In terms of the Approved Resolution Plan, the Company was awarded '' 590.45 Lakhs to be received in cash and by way of allotment of
Security Receipts (SRs)/ Optionally Convertible Debentures (OCDs)/Equity.

As per aforementioned resolution plan upto 31 March, 2025, the Company has received '' 165.55 Lakhs. (FY 2024-25''36.35 Lakhs against SRs;
FY 2023-24''129.31 Lakhs against cash and SRs)

Pending ascertainment of the issue terms and conditions, these SRs/ OCDs has been disclosed under the head "Other Financial Assets" at an
estimated value of '' 225.08 Lakhs (previous year '' 327.14 Lakhs).

63 The figures of the previous period have been regrouped/reclassified, wherever considered necessary, to conform current period classifications.The
impact of the such regrouping/reclassification is not material.

As per our report of even date attached For and on behalf of Board of Directors

For Singhi & Co. Shreekant Somany Amit Sahai

Chartered Accountants Chairman & Managing Director CEO-Tiles Business

Firm Registration No. 302049E DIN: 00021423 PAN: AHOPS1790C

Shubham Dutta Sailesh Raj Kedawat Ambrish Julka

Partner Chief Financial Officer Sr. GM - Legal and Company Secretary

M. No. 500580 ICAI M.No. 77330 M. No: F4484

Place: Noida

Date: 07 May, 2025

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Mar 31, 2024

2.14 Provisions, Contingent Liabilities

Based on the best estimate provisions are recognized when there is a present obligation (legal or constructive) as a result of a past event and it is probable ("more likely than not") that it is required to settle the obligation, and a reliable estimate can be made of the amount of the obligation at reporting date.

A contingent liability is a possible obligation that arises from a past event, with the resolution of the contingency dependent on uncertain future events, or a present obligation where no outflow is probable. Major contingent liabilities are disclosed in the financial statements unless the possibility of an outflow of economic resources is remote.

2.15 Measurement of fair value

a) Financial instruments

The estimated fair value of the Company''s financial instruments is based on market prices and valuation technigues. Valuations are made with the objective to include relevant factors that market participants would consider in setting a price, and to apply accepted economic and financial methodologies for the pricing of financial instruments. References for less active markets are carefully reviewed to establish relevant and comparable data.

b) Marketable and non-marketable equity securities

Fair value for quoted securities is based on quoted market prices as of the reporting date. Fair value for unquoted securities is calculated based on commonly accepted valuation techniques utilizing significant unobservable data. If fair value cannot be measured reliably unlisted shares are recognized at cost.

2.16 Financial instruments A Financial Assets

i) Initial recognition and measurement

Financial assets (except trade receivables) are measured initially at fair value adjusted for transaction costs, except for those carried at fair value through profit or loss which are measured initially at fair value. However, trade

receivables that do not contain a significant financing component are measured at transaction price.

ii) Classifications and Subsequent measurement

The Company classifies its financial assets as subsequently measured at either amortized cost or fair value depending on the Company’s business model for managing the financial assets and the contractual cash flow characteristics ofthe financial assets.

a) Financial assets at amortized cost

A financial asset is measured at amortized cost only if both of the following conditions are met:

- it is held within a business model whose objective is to hold assets in order to collect contractual cash flows.

- the contractual terms of the financial assets represent contractual cash flows that are solely payments of principal and interest.

After initial measurement, such financial assets are subsequently measured at amortized cost using the Effective Interest Rate (''EIR’) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance income in the Statement of Profit & Loss. The losses arising from impairment are recognized in the Statement of Profit & Loss.

b) Financial assets at fair value through Profit & Loss (FVTPL)

Financial assets, which does not meet the criteria for categorization as at amortized cost or as FVOCI, are classified as at FVTPL.

I n addition, the Company may elect to classify a Financial assets, which otherwise meets amortized cost or FVOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ''accounting mismatch’).

Financial assets included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit & Loss.

All other Financial Instruments are classified as measured at FVTPL except investment in equity instruments of subsidiaries which are carried at cost less provision for impairment, if any.

iii) Derecognition of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e. removed from the Company’s balance sheet) when:

- The rights to receive cash flows from the asset have expired, or

- The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''passthrough’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a passthrough arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognize the transferred asset to the extent of the Company’s continuing involvement. In that case, the Company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the

original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.

On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset derecognized) and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognized in OCI is recognized in the Statement of Profit & Loss.

v) Impairment of financial assets

The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortized cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

With regard to trade receivable, the Company applies the simplified approach as permitted by Ind AS 109, Financial Instruments, which requires expected lifetime losses to be recognized from the initial recognition of the trade receivables.

B Financial liabilities

i) Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, amortized cost, as appropriate.

All financial liabilities are recognized initially at fair value and, in the case of amortized cost, net of directly attributable transaction costs.

ii) Classifications and subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

a) Financial Liabilities measured at amortized cost

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.

iii) Derecognition offinancial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expired.

2.17 Income tax

Income tax expense comprises current and deferred tax. It is recognized in the Statement of Profit & Loss except to the extent that it relates to items recognized directly in Equity or in Other Comprehensive Income.

Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax assets and liabilities are offset only if, the Company:

a) Has a legally enforceable right to set off the recognized amounts; and

b) Intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

Deferred tax

Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in the balance sheet and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible temporary differences to the extent it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

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

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

2.18 Leases

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

Company as a lessee

The Company assesses whether a contract is or contains a lease, at inception of the contract. The Company recognizes a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets, wherein, the Company recognizes the lease payments as an operating expense on a straight-line basis over the lease term, unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed. Contingent and variable rentals are recognized as expense in the periods in which they are incurred.

Lease Liability

The lease payments that are not paid at the commencement date, are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Company, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value as that of right-of-use asset in a similar economic environment with similar terms, security and conditions.

Lease payments included in the measurement of the lease liability comprise:

• Fixed lease payments (including in-substance fixed payments) payable during the lease term and under reasonably certain extension options, less any lease incentives;

• Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease

The lease liability is presented as a separate line in the Balance Sheet.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

• The lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate

• A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate

Right of Use (ROU) Assets

The ROU assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Whenever the Company incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognized and measured under Ind AS 37- Provisions, Contingent Liabilities and Contingent Assets. The costs are included in the related right-of-use asset.

ROU assets are depreciated over the shorter period of the lease term

The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

• The lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate

• A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate

Right of Use (ROU) Assets

The ROU assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Whenever the Company incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognized and measured under Ind AS 37- Provisions, Contingent Liabilities and Contingent Assets. The costs are included in the related right-of-use asset.

ROU assets are depreciated over the shorter period of the lease term or useful life of the underlying asset. If the Company is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset''s useful life. The depreciation starts at the commencement date of the lease.

The ROU assets are presented as a separate line in the Balance Sheet and details of assets are given ROU note under "Notes forming part of the Financial Statement".

The Company applies Ind AS 36- Impairment of Assets to determine whether a right-of-use asset is impaired and accounts for any

(ii) Defined Benefit Plan:

The Company made provision for gratuity as per the Payment of Gratuity Act, 1972. The amount of gratuity payable on retirement/termination is employee''s last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. Gratuity liability is being contributed to the gratuity fund formed by the Company.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at 31 March, 2024. The present value of the defined benefit obligations and the related current service cost and past service cost, was measured using the Projected Unit Credit Method.

A. Movement in net defined benefit (asset)/liability

The following table shows a reconciliation from the opening balances to the closing balances for net defined benefit (asset)/liability and its components:

E4I FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT (CONTD.)

II. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- credit risk;

- liquidity risk; and

- market risk

i. Risk management framework

The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors has established the processes to control risks through defined framework.

The Company''s risk management policy is established to identify and analyse the risks faced by the Company, to set appropriate controls. Risk management policy is reviewed by the board annually to reflect changes in market conditions and the Company’s activities.

The Company''s Audit Committee oversees compliance with the Company''s risk management policy, and reviews the adeguacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

ii. Credit risk

Financial loss to the Company, arising, if a customer or counterparty to a financial instrument fails to meet its contractual obligations principally from the Company’s receivables from customers and investments in debt securities.

The carrying amount of financial assets represents the maximum credit exposure. The Company monitor credit risk closely both in domestic and export market.

Trade and other receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.

The Company Management has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company''s standard payment and delivery terms and conditions are offered. Sales credit limit are set up for each customer and reviewed periodically. The credit risk from loans to other corporate is managed in accordance with the Company''s fund management policy that includes parameters of safety, liquidity and post tax returns. The Company''s review includes market check, industry feedback, past financials and external ratings, if they are available, and in some cases bank reference checks are also done.

The Company creates allowances for impairment that represents its expected credit losses in respect of trade and other receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables.

The gross carrying amount oftrade receivables is '' 33,386.76 Lakhs (Previous year - '' 28,436.52 Lakhs).

Credit risk from balances with banks is managed by the Company''s finance department.

Company invests in Bonds, Debentures, Liquid Mutual Funds, Equity instruments etc., in accordance with the Company’s Investment Policy that includes parameters of safety, liquidity and post tax returns. Company avoids the concentration of credit risk by spreading them over several counterparties with good credit rating profile and sound financial position as well as held to maturity policy. The Company''s exposure and credit ratings of its counterparties are monitored on an ongoing basis. Based on historical experience and credit profiles of counterparties, the Company does not expect any significant risk of default other than as disclosed.

iii. Liquidity risk

Liquidity risk is the risk that the Company may face difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to manage liquidity is to ensure, as far as possible, sufficient liquidity to meet its obligations, under both normal and stressed conditions.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions.

iv. Market risk

Risk on account of changes in foreign exchange rates, interest rates etc. that may affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk is to optimize the return by managing and controlling the market risk exposures within acceptable parameters.

v. Currency risk

Foreign exchange risk arises from future commercial transactions and recognized assets and liabilities denominated in a currency that is not the Company''s functional currency (INR). The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD and small exposure in CNY, EURO & NPR. The risk is measured through a forecast of highly probable foreign currency cash flows.The Company has no significant currency exposure.

E4I FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT (CONTD.)

Interest rate risk

The Company''s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. During 31 March, 2024 and 31 March, 2023, the Company’s borrowings at variable rate were denominated mainly in Indian Rupees.

Currently the Company''s borrowings are within acceptable risk levels, as determined by the management, hence the Company has not taken any derivative instruments to hedge the interest rate risk.

EHI EXCEPTIONAL ITEMS

a. The Company, in the earlier years, had impaired its investment of'' 1,844.73 Lakhs in NCDs, issued by SREI Equipment Finance Limited. During the year, Hon''ble NCLT Kolkata approved resolution plan under Insolvency & Bankruptcy Code, 2016. In terms of the Approved Resolution Plan, the implementation notice was issued by National Asset Reconstruction Company Limited ("NARCL") and Implementation and Monitoring Committee ("IMC") authorized the administrator for commencement of the distribution against claims with the record date set as at 06 October, 2023. During the year, the Company has recognized Gain of'' 456.45 Lakhs as exceptional item on account recovery of '' 129.31 Lakhs in cash and allotment of Security Receipts (SRs)/ Optionally Convertible Debentures (OCDs), to trustees on behalf of the Company, for the value of '' 461.13 Lakhs (recognized at an estimated fair value of '' 327.12 Lakhs) in terms of the Approved Resolution Plan. Pending ascertainment of the issue terms and conditions of the SRs/ OCDs the same has been disclosed under the head "Other Financial Assets".

b. The Company has divested its investment in one of its subsidiary "Somany Fine Vitrified Private Limited", w.e.f 01 July, 2023 through an agreement, dated on 26 August, 2023, with the existing shareholders of the subsidiary resulting loss on divestment of '' 336.60 Lakhs, during the year ended 31 March, 2024.

c. During the previous year, the Company has divested its investment in one of its subsidiary Amora Ceramics Private Limited, w.e.f 01 July, 2022 resulting loss of control over the subsidiary. This has no material impact on the operations of the Company. Loss on disinvestment of? 96.79 Lakhs.

Bil SHARE BASED PAYMENTS a) Scheme Details

Nomination and Remuneration Committee (NRC) and Board of Directors at its respective meetings held on 10 December, 2021 and 23 May, 2023, approved an issue of stock options aggregating 4,23,794 and 12,74,226 equity shares of the face value of '' 2 each, up to a maximum of 1% and 3% of the then issued equity capital of the Company respectively. The shareholders of the Company vide their special resolution passed through postal ballot on 07 April, 2022 and passed at its 55th Annual General Meeting (AGM) held on 25 August, 2023 approved the issue of equity shares of the Company under Somany Ceramics Employee Stock Option Plan 2021 (ESOP 2021) and Somany Ceramics Employee Stock Option Plan 909.3 (ESOP 909.3) respectively

RH DIVIDEND

During the year, the Company has paid dividend of '' 3/- per equity share aggregating '' 1,274.23 Lakhs towards final dividend for the year ended 31 March, 2023. Further, the Board of directors has recommended dividend of '' 3/- per equity share aggregating '' 1230.11 Lakhs in their meeting held on 15 May, 2024 for the financial year ended 31 March, 2024 and same is subject to approval of shareholders at the ensuing Annual General Meeting.

E0i SEGMENT REPORTING

According to Ind AS 108, identification of operating segments is based on Chief Operating Decision Maker (CODM) approach for making decisions about allocating resources to the segment and assessing its performance. The business activity of the Company falls within one broad business segment viz. "Ceramic Tiles and Allied products" and substantially sale of the products and Non-current assets are within the country. Hence, the disclosure requirement of Ind AS 108 of ''Segment Reporting’ is not considered applicable.

H Based on the information available, as identified by the management there are certain vendors who have confirmed that they are covered under the Micro, Small and Medium Enterprises Development Act, 2006. Disclosures relating to dues of Micro and Small enterprises under section 22 of ''The Micro, Small and Medium Enterprises Development Act, 2006, are given below:

B Other disclosures required under Schedule III amendments

i) No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder

ii) The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority

iii) The Company has complied with the number of layers prescribed under the Companies Act, 2013

iv) There is no undisclosed income under the tax assessments under the Income Tax Act, 1961 for the year ending 31 March, 2024 and 31 March, 2023 which needs to be recorded in the books of account

v) The Company has not traded or invested in crypto currency or virtual currency during the current or previous year

vi) Utilization of borrowed funds and share premium:-

a) The Company during the year has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries (w.r.t transaction in previous year refer note no. 39).

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

vii) Borrowings obtained by the Company from banks and financial institutions have been applied for the purposes for which such loans were was taken

| The Company has been sanctioned working capital limit from bank on the basis of security of current assets. The quarterly returns/ statements filed by the Company with the bank, are in agreement with the books of accounts of the Company of the respective quarters and differences, are not material.

H During the financial year 2018-19, the Company had discovered defalcation of '' 1,585.82 Lakhs committed by an employee. The Company has filed a civil as well as a criminal suit against him and his wife, being the beneficiaries. During the pendency of the suit, he and his wife have signed a ''Memorandum of Understanding'' (MOU) dated 11 February, 2021 with the Company, duly acknowledged by Hon''ble High Court of Gujarat vide its order dated 12 February, 2021, under which he and his wife offered their immovable properties to the tune of '' 660.00 Lakhs (net off loan of '' 40.17 Lakhs), which has since been transferred in the name of the Company, as value determined by the Hon''ble High Court of Gujarat and a sum of? 40.00 Lakhs deposited by them in the Court towards compliance of their Bail condition. In terms of the said MOU, the Company is obligated to attempt to sell the properties in a diligent manner and quantify the amount received upon sale of such properties (net of expenses) and submit a purshis(s) of the same with the Hon''ble Civil Court. The Company has during the year sold on property and increased the "Liability under Defalcation Suit". Awaiting the final decree of the Hon''ble Civil Court, the Company is holding the properties in fiduciary capacity and disclosed the same as ''Properties held in trust'' under Note no. 16 amounting to '' 657.75 Lakhs (Previous year '' 657.75 Lakhs) and also recognized ''Liability under Defalcation Suit’ amounting to '' 665.42 Lakhs (net of Expenses) (Previous year '' 665.78 Lakhs) under Note no 27. The final accounting and taxation of the amounts mentioned in the purshis(s) would be done based on the final verdict ofthe Hon''ble Civil Court.

| The figures of the previous period have been regrouped/reclassified, wherever considered necessary, to conform current period classifications.The impact ofthe such regrouping/reclassification is not material.

As per our report of even date attached For and on behalf of Board of Directors

For Singhi & Co. Shreekant Somany Abhishek Somany

Chartered Accountants Chairman & Managing Director Managing Director & CEO

Firm Registration No. 302049E DIN: 00021423 DIN: 00021448

Bimal Kumar Sipani Amit Sahai Sailesh Raj Kedawat Ambrish Julka

Partner CEO-TilesBusiness Chief Financial Officer Sr.GM-LegalandCompanySecretary

M. No. 088926 PAN:AHOPS1790C ICAIM.No.77330 M.No.:F4484

Place: Noida

Date: 15 May, 2024

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Mar 31, 2023

Terms and rights attached to equity shares

The Company has one class of equity shares having a par value of '' 2 each. Each shareholder is eligible for one vote per share held and carry a right to dividend. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Notes

a Rupee term loan of '' 1,120.39 Lakhs (Previous Year '' 3,212.18 Lakhs) from a Bank is secured by first pari passu charge by way of hypothecation of all movable fixed assets, both present and future, of the Company at Kassar & Kadi excluding assets those exclusively charged to other Banks. Repayment of aforesaid loan of '' 1,120.39 Lakhs is due in 2023-24.

b Car loan from Banks are secured by hypothecation of cars purchased there under and are repayable in monthly instalments over the period of loan.

c As at March 31,2023 rate of interest is variable and linked with MCLR ranging between 8.50% to 9% and few car loans which are at fixed interest rate ranging between 8% to 9% .

Grants relating to property, plant and equipment relate to duty saved on import of capital goods and spares under the EPCG scheme. Under the scheme, the Company is committed to export prescribed times of the duty saved on import of capital goods over a specified period of time. In case such commitments are not met, the Company would be required to pay the duty saved along with interest to the regulatory authorities. Such grants recognized are released to the statement of profit and loss based on fulfilment of related export obligations.

38| CONTINGENT LIABILITIES, CONTINGENT ASSETS AND COMMITMENTS AS IDENTIFIED BY THE COMPANY A. Contingent liabilities (not provided for) in respect of:
Particulars	As at 31 March, 2023	As at 31 March, 2022
1. Claim and other demands against the Company not acknowledged as debts. #	262.38	237.90
2. Sales Tax demands against which the Company has preferred appeals.	27.77	27.77
3. Excise duty (excluding interest and penalty), service tax demands and show-cause notices issued against which the Company/Department has preferred appeals/filed replies.	333.36	333.36
4. Income tax demand disputed by the Company which excludes penalty, if any, as same can not be measured at this stage	58.41	28.03
5. a) Local Area Development Tax imposed by the State of Haryana disputed by the Company	810.78	810.78
b) Entry Tax matter pending before Hon''ble High Court of Calcutta.	38.88	38.88
6. Demand from ESIC disputed by the Company	15.41	15.41

# Company has some subjudice labour dispute matters impact of which cannot be ascertained at this stage.

Pending resolution of the respective proceedings, it is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgments/ decisions pending with various forums/ authorities. However, the Company has reviewed all its pending litigation and proceeding and has adequately provided for where provision required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceeding to have a materially adverse effect on its financial position. The Company does not expects any payment in respect of the above contingent liabilities.

B. Others

In light of judgment of Honorable Supreme Court dated 28 February, 2019 on the definition of "Basic Wages” under the Employees Provident Funds & Misc. Provisions Act, 1952 and based on Company''s evaluation, there are significant uncertainties and numerous interpretative issues relating to the judgement and hence, it is unclear as to whether the clarified definition of Basic Wages would be applicable prospectively or retrospectively. The amount of the obligation therefore cannot be measured with sufficient reliability for past periods and hence has currently been considered to be a contingent liability.

C. Commitments
Particulars	As at 31 March, 2023	As at 31 March, 2022
(i) Estimated amount of Contracts remaining to be executed on Capital Account not provided for [Net of Advances]	187.26	175.77

(ii) The Company, in terms of the Share Subscription cum Shareholders Agreements with subsidiary companies, may contribute funds (loan / equity) in the proportion of its shareholding for the purpose of meeting repayment obligation to banks, financial institutions or other lenders, any statutory liability, liabilities towards fuel suppliers or such other similar liabilities, fund requirement for expansion/ diversification, etc. The Company shall not withdraw the funds so infused, if any, till the money remain due to bank.

39 During the Previous year, Company has invested '' 2,50,00,000 (25,00,000 Equity shares of '' 10 Each) on 28 March, 2022 in SR Continental Limited (CIN U55101DL1979PLC317439) "SRCL'' wholly owned subsidiary having registered office at 82/19 Bhakerwara Road Mundka New Delhi-110041. SRCL further invested the proceeds in 25,00,000 Equity Shares of '' 10 each of SRCL Buildwell Private Limited (U26990WB2021PTC249417) (being wholly owned subsidiary of SRCL) having its registered office at 7, Hare Street, 4^th Floor, Kolkata West Bengal-700001 on 26 April, 2022. The Company has complied with relevant provisions of the Companies Act, 2013 for this transaction and the transaction is not violative of the Prevention of MoneyLaundering Act, 2002. There is no such transaction during the year.

Above amounts have been included in Contributions to Provident and Gratuity Fund (Refer note no. 34) of the Statement of Profit and Loss.

(ii) Defined Benefit Plan:

The Company made provision for gratuity as per the Payment of Gratuity Act, 1972. The amount of gratuity payable on retirement/termination is employee''s last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. Gratuity liability is being contributed to the gratuity fund formed by the Company.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at 31 March, 2023. The present value of the defined benefit obligations and the related current service cost and past service cost, was measured using the Projected Unit Credit Method.

A. Movement in net defined benefit (asset)/liability

The following table shows a reconciliation from the opening balances to the closing balances for net defined benefit (asset)/liability and its components:

Sensitivities due to mortality and withdrawals are insignificant, hence ignored. Sensitivities as to rate of inflation, rate of increase of pensions in payment, rate of increase of pensions before retirement and life expectancy are not applicable being a lump sum benefit on retirement.

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.

E. Description of Risk Exposures:

Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such Company is exposed to various risks as follow -

A) Salary Increases- Higher than expected increase in salary will increase the defined benefit obligation.

B) Investment Risk - Assets / liabilities mismatch and actual investment return on assets lower than the discount rate assumed at the last valuation date can impact the liability / Assets.

C) Discount Rate - Reduction in discount rate in subsequent valuations can increase the plan''s liability.

D) Demographic risk : This is the risk of variability of results due to unsystematic nature of decrements that includes mortality, withdrawals, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends on the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the employee benefit of a short career employee typically costs less per year as compared to a long service employee.

~| FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT (CONTD.)

B. Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are:

(a) recognized and measured at fair value and

(b) measured at amortized cost.

To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments and Debt instruments that have quoted price. The fair value is valued using the closing price as at the reporting period.

Level 2: The fair value of financial instruments that are not traded in an active market (for example- mutual funds, traded bonds, over-the counter derivatives) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.

There are no transfers between level 1 and level 2 during the year

II Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- credit risk;

- liquidity risk; and

- market risk

i. Risk management framework

The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors has established the processes to control risks through defined framework.

The Company''s risk management policy is established to identify and analyse the risks faced by the Company, to set appropriate controls. Risk management policy is reviewed by the board annually to reflect changes in market conditions and the Company''s activities.

The Company''s Audit Committee oversees compliance with the Company''s risk management policy, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

ii. Credit risk

Financial loss to the Company, arising, if a customer or counterparty to a financial instrument fails to meet its contractual obligations principally from the Company''s receivables from customers and investments in debt securities.

The carrying amount of financial assets represents the maximum credit exposure. The Company monitor credit risk closely both in domestic and export market.

Trade and other receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.

The Company Management has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company''s standard payment and delivery terms and conditions are offered. Sales credit limit are set up for each customer and reviewed periodically. The credit risk from loans to other corporate is managed in accordance with the Company''s fund management policy that includes parameters of safety, liquidity and post tax returns. The Company''s review includes market check, industry feedback, past financials and external ratings, if they are available, and in some cases bank reference checks are also done.

The Company creates allowances for impairment that represents its expected credit losses in respect of trade and other receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables.

Investments

Company invests in Bonds, Debentures, Liquid Mutual Funds, Equity instruments etc., in accordance with the Company''s Investment Policy that includes parameters of safety, liquidity and post tax returns. Company avoids the concentration of credit risk by spreading them over several counterparties with good credit rating profile and sound financial position as well as held to maturity policy. The Company''s exposure and credit ratings of its counterparties are monitored on an ongoing basis. Based on historical experience and credit profiles of counterparties, the Company does not expect any significant risk of default other than as disclosed.

iii. Liquidity risk

Liquidity risk is the risk that the Company may face difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to manage liquidity is to ensure, as far as possible, sufficient liquidity to meet its obligations, under both normal and stressed conditions.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions.

Management monitors rolling forecasts of the Company''s liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected future cash flows.

iv. Market risk

Risk on account of changes in foreign exchange rates, interest rates etc. that may affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk is to optimize the return by managing and controlling the market risk exposures within acceptable parameters.

v. Currency risk

Foreign exchange risk arizes from future commercial transactions and recognized assets and liabilities denominated in a currency that is not the Company''s functional currency (INR). The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD and small exposure in CNY, EURO, AUD & NPR. The risk is measured through a forecast of highly probable foreign currency cash flows.

Interest rate risk

The Company''s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. During 31 March, 2023 and 31 March, 2022, the Company''s borrowings at variable rate were denominated mainly in Indian Rupees.

Currently the Company''s borrowings are within acceptable risk levels, as determined by the management, hence the Company has not taken any swaps to hedge the interest rate risk.

49| EXCEPTIONAL ITEM

The Company has divested its investment in one of its subsidiary Amora Ceramics Private Limited, w.e.f 1 July, 2022 resulting loss of control over the subsidiary. This has no material impact on the operations of the Company. Loss on disinvestment of '' 96.79 Lakhs has been shown under the head Exceptional Item.

50| SHARE BASED PAYMENTS a) Scheme Details

Nomination and Remuneration Committee (NRC) and Board of Directors at its respective meetings held on 10 December, 2021, approved an issue of stock options aggregating 4,23,794 equity shares of the face value of '' 2 each, up to a maximum of 1% of the then issued equity capital of the Company. The shareholders of the Company vide their special resolution passed through postal ballot on 7 April, 2022 approved the issue of equity shares of the Company under Somany Ceramics Employee Stock Option Plan 2021.

5l| dividend

During the year, the Company has paid dividend of '' 3/- per equity share aggregating '' 1,274.23 Lakhs towards final dividend for the year ended 31 March, 2022. Further, the Board of directors has recommended dividend of '' 3/- per equity share aggregating '' 1,274.23 Lakhs in their meeting held on 23 May, 2023 for the financial year ended 31 March, 2023 and same is subject to approval of shareholders at the ensuing Annual General Meeting.

521 SEGMENT REPORTING

According to Ind AS 108, identification of operating segments is based on Chief Operating Decision Maker (CODM) approach for making decisions about allocating resources to the segment and assessing its performance. The business activity of the Company falls within one broad business segment viz. "Ceramic Tiles and Allied products” and substantially sale of the products and Non-current assets are within the country. Hence, the disclosure requirement of Ind AS 108 of ''Segment Reporting'' is not considered applicable.

B. Other disclosures required under Schedule III amendments

i) No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

ii) The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority.

iii) The Company has complied with the number of layers prescribed under the Companies Act, 2013.

iv) There is no undisclosed income under the tax assessments under the Income Tax Act, 1961 for the year ending 31 March, 2023 and 31 March, 2022 which needs to be recorded in the books of account.

6l| ADDITIONAL REGULATORY INFORMATION REQUIRED BY SCHEDULE III TO BE DISCLOSED IN THE FINANCIAL STATEMENTS (CONTD.)

v) The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

vi) Utilization of borrowed funds and share premium:-

a) The Company during the year has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries (w.r.t transaction in previous year refer note no. 39) .

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

vii) Borrowings obtained by the Company from banks and financial institutions have been applied for the purposes for which such loans were was taken.

~| BUSINESS COMBINATION

A. In earlier years, the Hon''ble National Company Law Tribunal Kolkata bench, (NCLT) vide order dated 4 September, 2019 sanctioned the Scheme of Amalgamation of Bhilwara Holdings Limited, Sarvottam Vanijya Limited and Scope Vinimoy Private Limited (Amalgamating Companies) engaged in the business of investment activity, with the Company under section 230 to 232 of the Companies Act, 2013 from the appointed date i.e. 1 April, 2018. The Scheme became effective on 25 September, 2019. Impact of the scheme has been considered during the year ended 31 March, 2020.

B. Amalgamation with Schablona India Limited (SIL)

During the previous year, the Hon''ble National Company Law Tribunal Kolkata bench, (NCLT) vide order dated 20 December, 2021 and the Hon''ble National Company Law Tribunal Delhi bench vide order dated 24 December, 2021, sanctioned the Scheme of Amalgamation of Schablona India Limited (Amalgamating Company) engaged in the business of manufacturing and trading of tiles and home decor, with the Company under section 230 to 232 of the Companies Act, 2013 from the appointed date i.e. 1 April, 2019. The Scheme became effective on 1 January, 2022 on filing of orders with respective Registrar of Companies.

The accounting effect of this Amalgamation to in the financial statements has been given as under:-

i) In terms of the said scheme, authorized capital of the Company has since been increased by '' 500 Lakhs (2,50,00,000 equity shares of '' 2 each) on merger of authorized share capital of SIL.

ii) In terms of the said Scheme, 3 (Three) fully paid-up equity share of '' 2 each of the Company shall be issued and allotted to the Shareholders of the SIL for every 100 (Hundred) Equity shares of '' 4 each held by them. These shares shall rank pari passu in all respect (including dividend) with the existing shareholders of the Company. Any fraction of share arising out of the share exchange process, if any, will be rounded off to nearest whole number. The amalgamation being a common control transaction has been accounted for under the ''Pooling of interest'' method as prescribed by Ind AS 103 on Business Combinations.

iii) The share capital of the SIL '' 126.37 Lakhs consisting of 31,59,215 equity shares of '' 4 each as on the Appointed Date stand cancelled.

iv) The Company has recorded all assets and liabilities of the SIL at their respective book values as appearing in the books of account of the SIL immediately before the appointed date and audited by auditor of SIL.

63 The Company has been sanctioned working capital limit from bank on the basis of security of current assets. The quarterly returns/ statements filed by the Company with the bank, are in agreement with the books of accounts of the Company of the respective quarters and differences, are not material.

64 During the financial year 2018-19, the Company had discovered defalcation of '' 1,585.82 Lakhs committed by an employee. The Company has filed a civil as well as a criminal suit against him and his wife, being the beneficiaries. During the pendency of the suit, he and his wife have signed a ''Memorandum of Understanding'' (MOU) dated 11 February, 2021 with the Company, duly acknowledged by Hon''ble High Court of Gujarat vide its order dated 12 February, 2021, under which he and his wife offered their immovable properties to the tune of '' 660.00 Lakhs (net off loan of '' 40.17 Lakhs), which has since been transferred in the name of the Company, as value determined by the Hon''ble High Court of Gujarat and a sum of '' 40.00 Lakhs deposited by them in the Court towards compliance of their Bail condition. In terms of the said MOU, the Company is obligated to attempt to sell the properties in a diligent manner and quantify the amount received upon sale of such properties (net of expenses) and submit a purshis(s) of the same with the Hon''ble Civil Court. The Company has during the year sold on property and increased the "Liability under Defalcation Suit”. Awaiting the final decree of the Hon''ble Civil Court, the Company is holding the properties in fiduciary capacity and disclosed the same as ''Properties held in trust'' under Note no. 16 amounting to '' 657.75 Lakhs (Previous year '' 657.75 Lakhs) and also recognized ''Liability under Defalcation Suit'' amounting to '' 665.78 Lakhs (net of Expenses) (Previous year '' 669.64 Lakhs) under Note no 28. The final accounting and taxation of the amounts mentioned in the purshis(s) would be done based on the final verdict of the Hon''ble Civil Court.

65 In case of paying agent arrangements the Company was earlier derecognizing trade payable and recognizing such liabilities as current borrowings, however, since these liabilities have a similar nature and function to trade payables as these are part of the working capital used in the Company''s normal operating cycle, accordingly, in order to give more appropriate presentation, the Company has reclassified previous year liabilities of '' 3,467.62 Lakhs on account of paying agent arrangements from current "Borrowings” to "Trade payable” to conform current year classification of '' 5,913.89 Lakhs.

---

Mar 31, 2018

3 Rupee loan of Rs. 900.00 lakhs (March 31, 2017 Rs. 1350.00 lakhs, April 1, 2016 Rs. 1,800.00 lakhs) from a Bank is secured by first pari passu charge by way of hypothecation of all movable fixed assets of the Company, excluding assets exclusively charged to other Banks and second pari passu on all current assets of the company both present and future. The aforesaid loan is repayable in 8 equal quarterly instalments starting from June, 2018.

4 Rupee loan of NIL (March 31, 2017 Rs. 784.49 lakhs, April 1, 2016 Rs. 1,584.49 lakhs) from a Bank is secured by first pari passu charge by way of hypothecation of all movable fixed assets of the Company, excluding assets exclusively charged to other Banks and second pari passu on all current assets of the company both present and future.

5 Rupee loan of Rs. 2,505.00 lakhs (March 31, 2017 Rs. 3,355.00 lakhs, April 1, 2016 Rs. 2,000.00 lakhs) from a Bank and Buyers''/Suppliers'' credit of Rs. 2,215.56 lakhs (March 31, 2017 Rs. 2,145.66 lakhs, April 1, 2016 Rs. 2,228.09 lakhs). Equivalent to aggregate of USD 27.25 lakhs and Euro 5.33 lakhs (March 31, 2017 equivalent to aggregate of USD 27.25 lakhs and Euro 5.33 lakhs, April 1, 2016 Equivalent to aggregate of USD 27.25 lakhs and Euro 5.33 lakhs) are secured by first pari passu charges by way of hypothecation of Plant & Machinery and other movable fixed assets of the company situated at Kassar and Kadi plants excluding those exclusively charged to other Banks and second pari passu charge over current assets of the company both present and future. Repayment of aforesaid loan is Rs. 1,100.00 lakhs, Rs. 1,450.00 lakhs, Rs. 1,700.00 lakhs, and Rs. 470.56 lakhs in FY19, FY20 and FY21 respectively.

6 Rupee loan of Rs. 3,000.00 lakhs (March 31, 2017 Nil, April 1, 2016 Nil) from a Bank and Buyers''/Suppliers'' credit of Rs. 726.51 lakhs (March 31, 2017 Nil, April 1, 2016 Nil) Equivalent to aggregate of USD 11.10 lakhs (March 31, 2017 Nil, April 1, 2016 Nil) are secured by first pari passu charge by way of hypothecation of all movable fixed assets, both present and future, of the Company at Kassar & Kadi excluding assets those exclusively charged to other Banks. Repayment of aforesaid loan is Rs. 1,000.00 lakhs, Rs. 1,000.00 lakhs, Rs. 1,500.00 lakhs and Rs. 226.51 lakhs in FY19, FY20, FY21 and FY22 respectively.

7 Car loan from Banks and others are secured by hypothecation of cars purchased there under and are repayable in monthly instalments over the period of loan.

8 Rate of interest applicable to all term loans is linked with MCLR.

37 Contingent liabilities, contingent assets and commitments (Contd.)

(ii) Others Financial Liabilities includes encashment of bank guarantee in earlier years provided by a supplier of machinery. The supplier of machinery has challenged the encashment of bank guarantee and the case is pending before Hon''ble High Court of Delhi and Calcutta. pending final decision, no adjustment has been carried out in accounts.

(iii) The company has procured certain capital goods under EPCG scheme at concessional rate of duty. As on March 31, 2018 the company is contingently liable to pay differential custom duty of Rs. 121.74 Lakhs (March 31, 2017 - Rs.265.34 Lakhs, April 1, 2016 Rs. 681.17 Lakhs) on such procurement. In view of past export performance and future projections, the management is hopeful of completing the export obligation within stipulated time, and expect no cash outflow on this account.

38 Interest in Joint Venture Company (JVC)

a) Company''s contribution in the joint venture (by the name SKPL Ceramics. Pvt. Ltd. (Formerly Somany Keraben Pvt Ltd.), a 50:50 Joint Venture Company) till June 1, 2017 is Rs. 89.30 lakhs (Previous year Rs 89.30 lakhs) towards share capital of Joint Venture entity. The company is in process of striking off.

The above loans carries interest rate in the range of 10.5% to 14.5%.

b) Details of investments made is given in Note No. 4.

42 Employee benefits

The Company contributes to the following post-employment defined benefit plans in India.

(i) Defined Contribution Plans:

The Company makes contributions towards provident fund to a defined contribution retirement benefit plan for qualifying employees. Under the plan, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit plan to fund the benefits.

Contributions to Provident and other Funds'' of the Statement of Profit and Loss includes Rs. 544.12 lakhs (Previous year Rs. 504.78 lakhs) towards contribution to Provident Fund [including Rs. 190.45 lakhs (Previous year Rs. 171.11 lakhs) towards Somany Provident Fund, a multi-employer plan].

(ii) Defined Benefit Plan:

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. Gratuity liability is being contributed to the gratuity fund formed by the company.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at 31 March 2018. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

A. Movement in net defined benefit (asset)/liability

The following table shows a reconciliation from the opening balances to the closing balances for net defined benefit (asset)/liability and its components:

42 Employee benefits (Contd.)

E. Description of Risk Exposures:

Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such Company is exposed to various risks as follow

A) Salary Increases- Actual salary increases will increase the Plan''s liability. Increase in salary increase rate assumption in future valuations will also increase the liability.

B) Investment Risk - Assets and liabilities mismatch & actual investment return on assets lower than the discount rate assumed at the last valuation date can impact the liability.

C) Discount Rate - Reduction in discount rate in subsequent valuations can increase the plan''s liability.

43 Related parties

A. Related parties and their relationships

i Key Managerial Personnel (KMP) and their relatives Name Relationship

Mr. Shreekant Somany Chairman & Managing Director

Mr. Abhishek Somany Managing Director (Son of Chairman & Managing Director)

Mrs. Anjana Somany Whole time Director (Wife of Chairman & Managing Director) (w.e.f. May 21, 2016)

Mr. G.G. Trivedi Additional Director w.e.f. September 1, 2017 (CEO upto August 31, 2017)

Mr. T.R. Maheshwari^A CEO w.e.f. January 30, 2018 (Deputy CEO and CFO upto January 29, 2018)

Mr. Saikat MukhopadhyayA CFO w.e.f January 30, 2018

Mr. Ambrish JulkaA DGM (Legal) & Company Secretary

Mrs. Minal Somany Wife of Managing Director

Mr. G. L. Sultania Non- Executive Director

Mr. R.K. Daga Non- Executive Director

Mr. Ravindra Nath Non- Executive Director

Mr. Salil Singhal Non- Executive Director

Mr. Y. K. Alagh Non- Executive Director

Mr. Narayan Anand Non- Executive Director (upto April 12, 2017)

a KMP under the Companies Act, 2013

ii Subsidiary Company

SR Continental Limited Somany Global Limited Amora Tiles Private Limited Somany Fine Vitrified Private Limited Somany Sanitaryware Private Limited Somany Excel Vitrified Private Limited Vintage Tiles Private Limited Commander Vitrified Private Limited

43 Related parties (Contd.)

Vicon Ceramic Private Limited Acer Granito Private Limited

Sudha Somany Ceramics Private Limited (Formerly Sudha Ceramics Private Limited) (w.e.f. November 9, 2016)

Amora Ceramics Private Limited (w.e.f. March 30, 2018)

iii Associate (Joint Venture upto June 01, 2017)

SKPL Ceramics Private Limited (Formerly Somany Keraben Private Limited) upto June 1, 2017*

*The Company has terminated the Joint Venture Agreement with Keraben Grupo S.A. w.e.f. June 1, 2017. Now the Company is under the process of Strike Off.

iv. Enterprise over which Company exercise significant influence and with whom transactions have taken place during the year:

H. L. Somany Foundation

v. Enterprise over which Key Management Personnel and their relatives exercise significant influence and with whom transactions have taken place during the year

Schablona India Limited (w.e.f. January 10, 2018)

Vidres India Ceramics Private Limited

Yogi Cerachem Private Limited

Ishiv India Solutions Private Limited

vi. Other related parties with which Company has transactions:

Name

Biba Apparels Private Limted Private company in which director is a director

Ashiana Housing Limited Public company in which director is a director

Shree Cement Limited Public company in which director is a director

Wolkem India Limited Public company in which director is a director and holds more than 2% shares alongwith relatives

G.L. Sultania & Co. Firm in which director is proprietor

44 Financial instruments - Fair values and risk management (Contd.)

II. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- credit risk;

- liquidity risk; and

- market risk

i. Risk management framework

The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors has established the processes to control risks through defined framework.

The Company''s risk management policy is established to identify and analyse the risks faced by the Company, to set appropriate controls. Risk management policy is reviewed by the board annually to reflect changes in market conditions and the Company''s activities.

The Company''s Audit Committee oversees compliance with the Company''s risk management policy, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

ii. Credit risk

Financial loss to the Company, arising, if a customer or counterparty to a financial instrument fails to meet its contractual obligations principally from the Company''s receivables from customers and investments in debt securities.

The carrying amount of financial assets represents the maximum credit exposure. The Company monitor credit risk closely both in domestic and export market.

Trade and other receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.

The Company Management has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company''s standard payment and delivery terms and conditions are offered. The Company''s review includes market check, industry feedback, past financials and external ratings, if they are available, and in some cases bank reference checks are also done. Sales credit limit are set up for each customer and reviewed periodically. "

The Company creates allowances for impairment that represents its expected credit losses in respect of trade and other receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables.

The gross carrying amount of trade receivables is Rs 38,756.66 Lakhs (31 March 2017 - Rs. 40,741.28 Lakhs, 1 April 2016 - Rs.31,375.50 Lakhs).

Investments

Company invests in Bonds, Debentures, Liquid Mutual Funds etc., in accordance with the Company''s Investment Policy that includes parameters of safety, liquidity and post-tax returns. Company avoids the concentration of credit risk by spreading them over several counterparties with good credit rating profile and sound financial position as well as held to maturity policy. The Company''s exposure and credit ratings of its counterparties are monitored on an on-going basis. Based on historical experience and credit profiles of counterparties, the Company does not expect any significant risk of default.

iii. Liquidity risk

Liquidity risk is the risk that the Company may face difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to manage liquidity is to ensure, as far as possible, sufficient liquidity to meet its obligations, under both normal and stressed conditions.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions.

Management monitors rolling forecasts of the Company''s liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected future cash flows.

Maturities of financial liabilities

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and exclude contractual interest payments and the impact of netting agreements.

iv. Market risk

Risk on account of changes in foreign exchange rates, interest rates etc. that may affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk is to optimize the return by managing and controlling the market risk exposures within acceptable parameters.

v. Currency risk

Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the company''s functional currency (INR). The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD and small exposure in EURO. The risk is measured through a forecast of highly probable foreign currency cash flows.

Exposure to currency risk

The summary quantitative data about the Company''s exposure to currency risk as reported to the management of the Company is as follows (Foreign currency in lakhs).

Sensitivity analysis

A reasonably possible strengthening (weakening) of the Rs. against USD & EURO at 31 March would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.

47 Exceptional item of Rs. 440.41 Lakhs (Previous Year Rs. 406.25 lakhs) includes Rs. 245.70 Lakhs (Previous Year Rs. 406.25 Lakhs) on account of write off of certain plant and machineries and Rs. 194.71 Lakhs (Previous Year Nil) on account of settlement of demand of wage raise during the year.

48 Out of Rs. 11,999.97 lakhs raised through qualified institutions placement of equity shares in December, 2015, the Company has so far utilized Rs. 1,849.97 lakhs (previous year Rs. 1,849.97 lakhs), including issue expenses of Rs. 307.34 lakhs, for the purpose the fund were so raised and balance Rs. 10,150.00 lakhs (previous year Rs. 10,150.00 lakhs) has been temporarily invested mainly in the debt instruments/ funds.

46 The Company has taken warehouse locations on operating lease. The operating lease arrangements are renewable on periodic basis. Some of these agreements have price escalation clauses.

49 Events after the Balance Sheet Date

Dividend declared and paid by the Company

The Board of directors has recommended dividend of Rs. 2.70 (Previous Year Rs. 2.70) per equity share aggregating Rs. 1,379.45 Lakhs (Previous Year Rs. 1,377.19 Lakhs) including corporate dividend tax of Rs. 235.20 Lakhs (Previous Year Rs. 232.94 Lakhs) for the financial year ended March 31, 2018 and same is subject to approval of shareholders at the ensuing Annual General Meeting.

50 Segment Reporting

According to Ind AS 108, identification of operating segments is based on Chief Operating Decision Maker (CODM) approach for making decisions about allocating resources to the segment and assessing its performance. The business activity of the company falls within one broad business segment viz. "Ceramic Tiles and Allied products" and substantially sale of the product is within the country. The Gross income and profit from the other segment is below the norms prescribed in Ind AS 108. Hence, the disclosure requirement of Ind AS 108 of ''Segment Reporting'' is not considered applicable.

51 Capital management

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders. The following table summarises the capital of the Company.

53 First Time Adoption of Ind AS

As stated in note 2, these are the Company''s first financial statements prepared in accordance with Ind AS. The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended March 31, 2018, the comparative information presented in these financial statements for the year ended March 31, 2017 and in the preparation of an opening Ind AS statement of financial position at April

1, 2016 (the Company''s date of transition). In preparing its opening Ind AS statement of financial position, the Company has adjusted amounts reported previously in financial statements prepared in accordance with Indian GAAP (previous GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Company''s financial position, financial performance and cash flows is set out in the following tables and the notes that accompany the tables.

Exemptions and exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A. Ind AS optional exemptions

(i) Deemed cost

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets. Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

(ii) Effect of changes in exchange rate

In respect of long term foreign currency monetary items recognised in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period, the Company has elected to recognise exchange differences on translation of such long term foreign currency monetary items in line with its Previous GAAP accounting policy.

In respect of long term foreign currency monetary items recognised in the financial statements beginning with the first Ind AS financial reporting period, exchange differences are recognised in the statement of profit and loss.

B. Ind AS mandatory exceptions

(i) Estimates

An entity''s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at April 1, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP The Company made estimates for Impairment of financial assets based on expected credit loss model in accordance with Ind AS at the date of transition as these were not required under previous GAAP

(ii) Classification and measurement of financial assets and financial liabilities

Ind AS 101 requires an entity to assess classification and measurement of financial assets and financial liabilities on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

C. Reconciliations between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

D. Notes to first-time adoption:

1 Fair valuation of investments

Under previous GAAP, current investments were stated at lower of cost and fair value. Under Ind AS, these financial assets have been classified as Fair Value through Profit or Loss (FVTPL) on the date of transition and fair value changes after the date of transition has been recognised in statement of profit and loss.

2 Proposed Dividend

Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognised as a liability. Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the general meeting.

3 Remeasurements of post-employment benefit obligations

Under previous GAAP, actuarial gains and losses related to the defined benefit schemes for gratuity were recognised in profit or loss. Under Ind AS, the actuarial gains and losses form part of remeasurement of the net defined benefit liability/asset which is recognised in OCI. Consequently, the tax effect of the same has also been recognised in OCI instead of statement of profit and loss.

4 Retained earnings

Retained earnings as at April 1, 2016 has been adjusted consequent to the above Ind AS transition adjustments

5 Depreciation

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. The Company has further reassessed and realigned the depreciation methodology as per the requirement of IND AS.

6 Other comprehensive income

Under Ind AS, all items of income and expense recognised in a period should be included in statement of profit & loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in statement of profit & loss but are shown in the statement of profit and loss as ''other comprehensive income'' includes remeasurements of defined benefit plans and tax thereon. The concept of other comprehensive income was not there under previous GAAP.

7 Deferred Tax

Deferred tax have been recognised on the adjustments made on transition to Ind AS.

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Mar 31, 2017

1. Long-Term Borrowings

Notes

1 Rupee loan of RS.75.00 lakhs (Previous Year RS.375.00 lakhs) from others is secured by first pari passu charge on all fixed assets of the company both present and future except specifically charged and Government Land at Kassar / Kadi. The last installment of aforesaid loan is repayable in June, 2017.

2 Rupee Loan of RS.1,687.50 lakhs (Previous Year RS.2,362.50 lakhs) from a Bank is secured by first pari passu charges by way of hypothecation of all movable fixed assets of the company both present and future, excluding those exclusively charged to other Banks. The aforesaid loan is repayable in 10 equal quarterly installments starting from June, 2017.

3 Rupee loan of RS.1,350.00 lakhs (Previous Year RS.1,800.00 lakhs) from a Bank is secured by first pari passu charge by way of hypothecation of all movable fixed assets of the Company, excluding assets exclusively charged to other Banks and second pari passu on all current assets of the company both present and future. The aforesaid loan is repayable in 12 equal quarterly installments starting from June, 2017.

4 Rupee loan of RS.784.49 lakhs (Previous Year RS.1,584.49 lakhs) from a Bank is secured by first pari passu charges by way of hypothecation of Plant & Machinery and other movable fixed assets of the company situated at Kassar and Kadi excluding those exclusively charged to other Banks and second pari passu on current assets of the company both present and future. The aforesaid loan is repayable fully in FY18.

5 Rupee loan of RS.3,355.00 lakhs (Previous Year RS.2,000.00 lakhs) from a Bank and Buyers’/ Suppliers’ credit of RS.2,145.66 lakhs (Previous Year RS.2,228.09 lakhs) {Equivalent to aggregate of USD 27.25 lakhs and Euro 5.33 lakhs (Previous Year Equivalent to aggregate of USD 27.25 lakhs and Euro 5.33 lakhs)} is secured by first pari passu charges by way of hypothecation of Plant & Machinery and other movable fixed assets of the company situated at Kassar and Kadi plants excluding those exclusively charged to other Banks and second pari passu charge over current assets of the company both present and future. Repayment of aforesaid loan is RS.850.00 lakhs, RS.1,100.00 lakhs, RS.1,450.00 lakhs, RS.1,700.00 lakhs and RS.400.66 lakhs in FY18, FY19, FY20, FY21 and FY22 respectively.

6 Car loan from Banks and others are secured by hypothecation of cars purchased there under are repayable in monthly installment over the period of loan.

*Working Capital Facilities from Banks are secured by:

1 First charge by way of hypothecation of stocks of raw materials, finished goods and stock in process, stores & spares and book debts and ranking pari-passu; and

2 Second and subservient charge by way of Equitable Mortgage on all other assets, both present and future, of the company, both movable and immovable & ranking pari-passu, excluding assets exclusively charged. Charge over land exchange of about 3 acers at Kassar is to be created.

2. Fixed Assets

Note

1. Plant & equipment includes machinery Gross RS.62.29 Lakhs (Previous year RS.62.29 Lakhs) lying with third parties, pending confirmation [Note No. 28.3].

2. Current year depreciation includes impairment of old Plant & Machinery RS.369.78 Lakhs shown as exceptional item in the statement of Profit & Loss.

3. Furniture & Fixtures includes certain expenditure on lease hold premises Gross RS.813.90 Lakhs WDV RS.538.25 Lakhs (Previous year RS.493.34 Lakhs WDV RS.258.32 Lakhs) which are amortised over the useful life of respective assets.

4. Addition to Plant & Machinery includes foreign exchange gain amounting to RS.88.15 Lakhs decapitalised (Previous year RS.31.76 Lakhs capitalised).

3.1 During the financial year 2012-13, a demand of Rs. 925.65 lakhs (including interest of RS.97.41 lakhs) for difference between market rate (Non-APM) and contracted price (APM) of gas for the period from 1st July, 2005 to 31st March, 2010 has been raised by GAIL (India) Limited (GAIL). After considering further debit notes on account of interest / bank charges for the past periods, the total demand increased to RS.1,481.22 lakhs (including interest of RS.652.98 lakhs) as on 31st March 2017. The Company along with others filed a Special Civil Application (SCA) which was admitted by the Hon’ble Gujarat High Court on submission of bank guarantee of RS.118 lakhs. On 4th August, 2014, Hon’ble Supreme Court of India passed an order to transfer the case to this Court on the basis of transfer petition filed by the GAIL. Pending decision / further direction, no provision in this regard is considered necessary by the Company.

3.2 Other long-term liabilities include encashment of bank guarantee in earlier years amounting to RS.202.50 lakhs (Previous year RS.202.50 lakhs) provided by a supplier of machinery. The supplier of machinery has challenged the encashment of bank guarantee and the case is pending before Hon’ble High Court of Delhi and Calcutta. Pending final decision, no adjustment has been carried out in accounts and above amount is shown under long term liabilities.

3.3 Exceptional item of RS.406.25 lakhs primarily pertains to impairment of certain plant and machineries.

3.4 Out of RS.11,999.97 lakhs raised through qualified institutions placement of equity shares in December, 2015, the Company has so far utilized RS.1,849.97 lakhs (including issue expenses of RS.307.34 lakhs) for the purpose the fund were so raised and balance RS.10,150.00 lakhs has been temporarily invested mainly in the debt instruments/ funds.

3.5 Dividend proposed to be distributed for equity shareholders @ RS.2.70 per share amounting to RS.1,377.19 lakhs (including Corporate Dividend Tax of RS.232.94 lakhs) is subject to shareholders approval in General Meeting.

3.6 Sales net of trade discounts / returns includes insurance recovered of RS.1064.78.00 lakhs (Previous year RS.959.37lakhs), export benefits of RS.312.43 lakhs (Previous year RS.251.04 lakhs).

3.7 A sum of RS.135.93 lakhs (Previous year RS.115.61 lakhs) towards Corporate Social Responsibility is included under ‘Other Expenses’.

3.8 Research and Development Expenditure on revenue account amounting to RS.191.56 lakhs (Previous year RS.156.24 lakhs) has been charged to statement of profit and loss.

3.9 Trade payables include acceptances of RS.10,204.26 lakhs (Previous year RS.9,021.67 lakhs).

3.10 The business activity of the Company falls within a single business segment viz. ‘Ceramic Tiles and Allied products’ and sales of the product is mainly within the country. Hence, the disclosure requirement of Accounting Standard 17 of ‘Segment Reporting’ is not considered applicable.

3.11 Since it is not possible to ascertain with reasonable certainty the quantum of accrual in respect of certain insurance and other claims and interest on overdue bills from customers, the same are continued to be accounted for as and when received/settled.

3.12 In the opinion of the management, current assets, loans and advances have a value on realisation in ordinary course of business at least equal to the amount at which they are stated.

3.13 Balances of certain trade receivables, advances, trade payables and other liabilities are in the process of confirmation and/or reconciliation.

3.14 Profit and/or Loss on sale of stores and raw materials remain adjusted in respective consumption accounts

3.15 The Company has not received full information from vendors regarding their status under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED ACT); hence, disclosure relating to amount unpaid at year end together with interest paid / payable have been given based on the information so far available with the Company / identified by the Company management. The detail of the same is as under:

* Based on the actuarial valuation done by an actuary appointed during the year.

(b) Amounts recognised as an expense/ (income) and included in the Note Number 25 are as under:

i) ’Salary, Wages, Bonus etc.’ of the statement of Profit and Loss includes RS.223.30 lakhs (Previous year Rs. 224.40 lakhs) towards Earned Leave Encashment and Sick Leave.

ii) ’Contributions to Provident and other Funds’ of the statement of Profit and Loss includes RS.504.78 lakhs (Previous year RS.444.04 lakhs) towards contribution to Provident Fund [including RS.171.11 lakhs (Previous year RS.139.94 lakhs) towards Somany Provident Fund, a multiemployer plan, refer to (c ) below].

iii) ’Contributions to Provident and other Funds’ of the statement of Profit and Loss includes RS.156.61 lakhs (Previous year RS.173.12 lakhs) towards contribution to Gratuity Fund.

(c) The Guidance issued by the Accounting Standard Board (ASB) on implementing AS-15, Employee Benefits (revised 2005) (Guidance Note) states that provident funds set up by employers, the investment and actuarial risk of which fall on the employer, needs to be treated as defined benefit plan. Its effect in this respect has not been ascertained and the same has been accounted for as defined in the Guidance Note. The Fund has a surplus, determined net of investments less corpus (contribution plus interest thereon).

d) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

(e) The expected return on the plan assets is determined by considering several applicable factors mainly the composition of the plan assets held, assessed risks of assets management, historical results of return on plan assets and the policy for plan assets management.

(f) The principal assumptions are the discount rate and salary growth rate. The discount rate is generally based upon the market yields available on Government Bonds at the accounting date with a term that matches that of the liabilities.

3.16 Interest in Joint Venture Company

a) Company’s contribution in the joint venture (by the name Somany Keraben Private Ltd., a 50:50 Joint Venture Company) till 31st March, 2017 is RS.89.30 lakhs (Previous year RS.89.30 lakhs) towards share capital of Joint Venture entity.

Pursuant to Accounting Standard 27 “Financial Reporting of Interests in Joint Venture” the relevant information relating to Joint Venture Company (JVC) are given below:

b) The Company’s share in the aggregate amounts of each of the assets, liabilities, income, expense, contingent liabilities and capital commitments as at/for the years ended 31st March, 2017 in the above company, as per its unaudited financial statements is as under:

3.17 Capital work in progress includes machinery under installation and/or in transit, construction/erection material and pre-operative expenses pending allocation/capitalisation. The details of pre-operative expenses are as follows:

3.18 In accounting year ended 31.03.2007, the Company took an office premises on sub-lease for a term of 75 years. The lease has been recognised as an asset at the present value of the minimum lease payment. Minimum lease payment in future at the balance sheet date and their present value are as under:

3.19 Details of Investment made, Loan and Guarantee given covered under section 186(4) of Companies Act, 2013 Investment made is given under respective heads.

3.20 The Company has entered into long term supply agreements (LTA or Agreements) with Associates and three Subsidiaries (refer Note No. 28.29). By the said agreements the Company has right to buy and sell the entire production of tiles / sanitary ware of companies stated in/ under its Own Brand.

As liability will accrue / arise as and when purchase will be made under LTA. Hence under the agreements there is no material foreseeable losses as on date in the opinion of the management

3.21 Related Party Transactions (As certified by the Management)

A. Names of related parties where control exists and nature of relationship:

Subsidiary Company

SR Continental Limited Somany Global Limited Amora Tiles Private Limited Somany Fine Vitrified Private Limited Somany Sanitaryware Private Limited Somany Excel Vitrified Private Limited

B. Other related parties with whom transactions have taken place and description of relationship:

1. Joint Venture

SKPL Ceramics Private Limited (Formerly Somany Keraben Private Limited)

2. Key Management Personnel

Mr. Shreekant Somany, Chairman & Managing Director

Mr. Abhishek Somany, Managing Director (Son of Chairman & Managing Director)

Mrs. Anjana Somany, Whole time Director (Wife of Chairman & Managing Director) (w.e.f. 21/05/2016)

Mr. G.G. Trivedi, CEO

Mr. T.R. Maheshwari, Deputy CEO & CFO

Mr. Ambrish Julka, DGM (Legal) & Company Secretary

3. Relatives of Key Management Personnel

Mrs. Minal Somany (Wife of Managing Director)

4. Associate Company Vintage Tiles Private Limited Commander Vitrified Private Limited Vicon Ceramic Private Limited Acer Granito Private Limited

Sudha Somany Ceramics Private Limited (Formerly Sudha Ceramics Private Limited) (w.e.f. 9th November, 2016)

5. Enterprise over which Company exercise significant influence and with whom transactions have taken place during the year:

H. L. Somany Foundation

6. Enterprise over which Key Management Personnel and their relatives exercise significant influence and with whom transactions have taken place during the year:

Vidres India Ceramics Private Limited Yogi Cerachem Private Limited Ishiv India Solutions Private Limited

7. Other related parties with which Company has transactions:

Biba Apparels Private Limted - Private company in which director is a director Ashiana Housing Limited - Public company in which director is a director Shree Cement Limited - Public company in which director is a director

Wolkem India Limited - Public company in which director is a director and holds more than 2% shares alongwith relatives G.L. Sultania & Co. - Firm in which director is proprietor

3.22 The previous year’s figures have been regrouped, rearranged wherever consider necessary.

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Mar 31, 2016

1. Rupee loan of Rs. 375.00 lacs (Previous Year Rs. 675.00 lacs) from others is secured by first pari passu charge on all fixed assets of the company both present and future except those specifically charged and Government Land at Kassar / Kadi. The aforesaid loan is repayable in 5 equal quarterly installment starting from June, 2016.

2. Rupee Loan of Rs. 2,362.50 lacs (Previous Year Rs. 1,550.00 lacs) from a Bank and Buyers'' credit of Rs. Nil (Previous Year Rs. 732.81 lacs) {Equivalent to Euro Nil (Previous Year Euro 11.66 lacs)} is secured by first pari passu charges by way of hypothecation of all movable fixed assets of the company both present and future, excluding those exclusively charged to other Banks. The aforesaid loan is repayable in 14 equal quarterly installments starting from June, 2016.

3. Rupee loan of Rs. 1,800.00 lacs (Previous Year Rs. 2,000.00 lacs) from a Bank is secured by first pari passu charge by way of hypothecation of all movable fixed assets of the Company, excluding assets exclusively charged to other Banks and second pari passu on all current assets of the company both present and future. The aforesaid loan is repayable in 16 equal quarterly installments starting from June, 2016.

4. Rupee loan of Rs. 1,584.49 lacs (Previous Year Rs. 1,764.14 lacs) from a Bank and Buyers'' credit of Rs. Nil (Previous Year Rs. 397.33 lacs) {Equivalent to Euro Nil (Previous Year Euro 5.82 lacs)} is secured by first pari passu charge by way of hypothecation of Plant & Machinery and other movable fixed assets of the company situated at Kassar and Kadi excluding those exclusively charged to other Banks and second pari passu charge on current assets of the company both present and future. Repayment of aforesaid loan is Rs. 800.00 lacs and 784.48 lacs in FY17 and FY18 respectively.

5. Rupee loan of Rs. 2,000.00 lacs (Previous Year Rs. Nil) from a Bank and Buyers''/Suppliers'' credit of Rs. 2,228.09 lacs (Previous Year Rs. Nil) {Equivalent to aggregate of USD 27.25 lacs and Euro 5.33 lacs (Previous Year Nil)} are secured by first pari passu charges by way of hypothecation of Plant & Machinery and other movable fixed assets of the company situated at Kassar and Kadi plants excluding those exclusively charged to other Banks and second pari passu charge over current assets of the company both present and future. Repayment of aforesaid loan is Rs. 200.00 lacs, Rs. 800.00 lacs, Rs. 1,000.00 lacs, Rs. 1,400.00 lacs and Rs. 828.09 lacs in FY17, FY18, FY19, FY20 and FY21 respectively.

6. Car loan from Banks and others are secured (charged created/ to be created)by hypothecation of cars purchased there under and are repayable in monthly installments over the period of loan.

7. Gross carrying value of plant & equipment includes machinery of Rs. 62.29 Lacs (Previous year Rs. 62.29 Lacs) lying with third parties, pending confirmation [Refer Note 28.3].

8. Pursuant to adoption of useful lives of fixed assets as per Schedule II of the Companies Act, 2013 and in compliance with Notification No. GSR 627(E) dated 29.08.2014, useful lives have been assessed by the management, and accordingly, depreciation for the year is higher by Rs. 146.70 lacs (Previous year is higher by Rs. 449.89 Lacs), out of which, after retaining residual value, the carrying amount of Rs. 50.41 Lacs, net of deferred tax of Rs. 26.67 Lacs (Previous year Rs. 154.08 Lacs, net of deferred tax of Rs. 79.34 Lacs) of certain fixed assets, whose lives have expired as at year end, has been charged to General Reserve.

9. Furniture & Fixtures includes certain expenditure on lease hold premises gross carrying value Rs. 493.34 Lacs, net carrying value Rs. 258.32 Lacs (Previous year Rs. 397.23 Lacs and Rs. 195.57 lacs respectively) which are amortised over the useful life of respective assets.

10. Addition to Plant & Machinery includes foreign exchange loss amounting to Rs. 31.76 Lacs (Previous year foreign exchange gain Rs. 192.97 Lacs)

11. During the financial year 2012-13, a demand of Rs. 925.65 lacs (including interest of Rs. 97.41 lacs) for difference between market rate (Non-APM) and contracted price (APM) of gas for the period from 1st July, 2005 to 31st March, 2010 has been raised by GAIL (India) Limited(GAIL). After considering further debit notes on account of interest / bank charges for the past periods, the total demand increased to Rs. 1,352.79 lacs (including interest of Rs. 524.55 lacs) as on 31st March 2016. The Company along with others filed a Special Civil Application (SCA) which was admitted by the Hon''ble Gujarat High Court on submission of bank guarantee of Rs. 118 lacs. On 4th August, 2014, Hon''ble Supreme Court of India passed an order to transfer the case to this Court on the basis of transfer petition filed by the GAIL. Pending decision / further direction, no provision in this regard is considered necessary by the Company.

12. Other long-term liabilities include encashment of bank guarantee in earlier years amounting to Rs. 202.50 lacs (Previous year Rs. 202.50 lacs) provided by a supplier of machinery. The supplier of machinery has challenged the encashment of bank guarantee and the case is pending before Hon''ble High Court of Delhi and Calcutta. Pending final decision, no adjustment has been carried out in accounts and above amount is shown under long term liabilities.

13. Exceptional item of Rs. 442.92 lacs pertains to:

i) Payment of Rs. 382.81 lacs to GAIL India Limited towards one time settlement of ''Pay For If Not Taken Obligation'' for calendar year 2014.

ii) Loss of inventory of Rs. 60.11 lacs due to fire.

14. During the year, the Company has fully utilized Rs. 5,000.00 lacs raised through private placement of equity shares in February, 2014 for the purposes the funds were so raised.

15. During the year, the Company has raised Rs. 11,999.97 lacs by allotting 35,34,600 equity shares of Rs. 2/- each @ Rs. 339.50 per share (including premium @ Rs. 337.50 per share) through qualified institutions placement. The funds so raised (net of issue expenses of Rs. 307.34 lacs) have been utilized for the purposes for which the same were raised except for Rs. 10,150.00 lacs which have been temporarily invested mainly in the debt instruments/ funds.

16. Sales net of trade discounts / returns includes insurance recovered of Rs. 959.37 lacs (Previous year Rs. 871.89 lacs), export benefits of Rs. 251.04 lacs (Previous year Rs. 150.90 lacs).

17. A sum of Rs. 115.61 lacs (Previous year Rs. 96.84 lacs) towards Corporate Social Responsibility is included under ''Other Expenses''.

18. Research and Development Expenditure on revenue account amounting to Rs. 156.24 lacs (Previous year Rs. 66.82 lacs) has been charged to statement of profit and loss.

19. Trade payables include acceptances of Rs. 9,021.67 lacs (Previous year Rs. 11,445.83 lacs).

20. The business activity of the Company falls within a single business segment viz. ''Ceramic Tiles and Allied products'' and sales of the product is mainly within the country. Hence, the disclosure requirement of Accounting Standard 17 of ''Segment Reporting'' is not considered applicable.

28.12 Since it is not possible to ascertain with reasonable certainty the quantum of accrual in respect of certain insurance and other claims and interest on overdue bills from customers, the same are continued to be accounted for as and when received/settled.

21. The Company has not provided diminution in the value of certain unquoted long term strategic investments, since in the opinion of Board, such diminution in their value is temporary in nature, considering the inherent value, nature of investments, the investees'' assets and expected future cash flow from such investments.

22. In the opinion of the management, current assets, loans and advances have a value on realisation in ordinary course of business at least equal to the amount at which they are stated.

23. Balances of certain trade receivables, advances, trade payables and other liabilities are in the process of confirmation and/or reconciliation.

24. Profit and/or Loss on sale of stores and raw materials remain adjusted in respective consumption accounts

25. The Company has not received full information from vendors regarding their status under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED ACT); hence, disclosure relating to amount unpaid at year end together with interest paid/payable have been given based on the information so far available with the Company/identified by the Company management. The detail of the same is as under:

(b) Amounts recognised as an expense/ (income) and included in the Note Number 24 are as under:

i) ''Salary, Wages, Bonus etc.'' of the statement of Profit and Loss includes Rs. 224.40 lacs (Previous year Rs. 135.99 lacs) towards Earned Leave Encashment and Sick Leave.

ii) ''Contributions to Provident and other Funds'' of the statement of Profit and Loss includes Rs. 444.04 lacs (Previous year Rs. 394.88 lacs) towards contribution to Provident Fund [including Rs. 139.94 lacs (Previous year Rs. 129.05 lacs) towards Somany Provident Fund, a multi-employer plan, refer to (c ) below].

iii) ''Contributions to Provident and other Funds'' of the statement of Profit and Loss includes Rs. 173.12 lacs (Previous year Rs. 207.59 lacs) towards contribution to Gratuity Fund.

(c) The Guidance issued by the Accounting Standard Board (ASB) on implementing AS-15, Employee Benefits (revised 2005) (Guidance Note) states that provident funds set up by employers, the investment and actuarial risk of which fall on the employer, needs to be treated as defined benefit plan. Its effect in this respect has not been ascertained and the same has been accounted for as defined in the Guidance Note. The Fund has a surplus, determined net of investments less corpus (contribution plus interest thereon).

(d) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

(e) The expected return on the plan assets is determined by considering several applicable factors mainly the composition of the plan assets held, assessed risks of assets management, historical results of return on plan assets and the policy for plan assets management.

(f) The principal assumptions are the discount rate and salary growth rate. The discount rate is generally based upon the market yields available on Government Bonds at the accounting date with a term that matches that of the liabilities.

26. Interest in Joint Venture Company

a) Company''s contribution in the joint venture (by the name Somany Keraben Private Ltd.,a 50:50 Joint Venture Company) till 31st March,2016is Rs. 89.30lacs (Previous year Rs 77.30 lacs) towards share capital of Joint Venture entity.

27. The Company has entered into long term supply agreements (LTA or Agreements) with Associates and three Subsidiaries (refer Note No. 28.30). By the said agreements the Company has right to buy and sell the entire production of tiles / sanitaryware of companies stated in/under its Own Brand.

As liability will accrue / arise as and when purchase will be made under LTA. Hence under the agreements there is no material foreseeable losses as on date in the opinion of the management

28. The previous year''s figures have been regrouped, rearranged wherever consider necessary.

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Mar 31, 2015

1. Contingent liabilities and commitments (to the extent not provided for) (As certified by the Management)

(RS. in Lacs)

S. No. Particulars 31.03.2015 31.03.2014

A) (i) Estimated amount of contracts remaining to be executed on capital account and not provided for [net of advances] 131.07 712.31

ii) Contingent liabilities not provided for in respect of: (As certified by the Management)

a) Claims and other demands against the Company not acknowledged as debts. 288.76 204.01

b) Sales tax and purchase tax demands, among others against which the Company has preferred appeals. 226.29 247.09

c) Excise and custom duty (excluding interest and penalty) and service tax demands and show-cause 426.59 353.39 notices issued against which the Company/Department has preferred appeals/filed replies.

d) Disputed income tax and wealth tax demand (excluding penalty if any) 89.23 194.10

e) Against the imposition of Local Area Development Tax (LADT) levied by Haryana Government,the 676.07 603.30 Hon''ble Supreme Court of India vide its order dated 10th May, 2006 has accepted the Company''s application for stay. Further, Hon''ble Supreme Court vide their order dated 30th October, 2009 stated the assesses to file the LADT returns; however, no recovery of tax will be made till further order. In the meantime, the Haryana Government has repealed the LADT Act and introduced another Act by the name of ''Entry Tax'' on the same line, which was also been held ultra vires by the Hon''ble Punjab and Haryana High court. Pending the final Order of the Hon''ble Supreme Court on the above matter and there is no Act either LADT / Entry Tax prevalent in Haryana, no provision for the same is considered necessary by the Company for the period from 1st April, 2006.

f) Demand notice from ESiC 15.41 -

iii) Bond executed in favour of sales tax/custom authorities. 25.00 25.00

B) Outstanding Corporate Guarantee to banks in respect of various fund/non fund based facilities 3434.00 3720.00 extended to subsidiary/other body corporates.

2 During the financial year 2012-13, a demand of RS. 925.65 lacs (including interest of RS. 97.41 lacs) for difference between market rate (Non-APM) and contracted price (APM) of gas for the period from 1st July, 2005 to 31st March, 2010 has been raised by GAIL (India) Limited(GAIL). After considering further debit notes on account of interest / bank charges for the past periods, the total demand increased to RS. 1,218.56 lacs (including interest of RS. 390.32 lacs) as on 31st March 2015. The Company along with others filed a Special Civil Application (SCA) which was admitted by the Hon''ble Gujarat High Court on submission of bank guarantee of RS. 118 lacs. On 4th August, 2014, Hon''ble Supreme Court of India passed an order to transfer the case to this Court on the basis of transfer petition filed by the GAIL. Pending decision / further direction, no provision in this regard is considered necessary by the Company.

3. in terms of long Term gas supply agreements (GsAs) with Gail (india) limited and indian oil Corporation limited (jointly referred to as ''sellers'') which are valid till period ending April 2028 and December 2016 respectively, there are under drawn quantities of Re-Liquified Natural Gas (RLNG) equivalent to Rs 6090.94 Lacs for the calendar year 2014. Against this the company has received demand notices from Sellers aggregating to RS. 2415.45 lacs only representing an aggregate under drawn quantity of 242490 MMBTU. If these demands are paid, the same will be treated as advance in accounts as the company will be eligible to take under drawn quantities of RLNG including that for calendar year 2014 in subsequent contract years subject to Sellers'' operational flexibility and price adjustments. The Company has also represented to Sellers for reducing the said amounts demanded which is pending resolution.

Further in view of proposed increase in production capacity by 4 million square meters per annum at Kassar unit and also generally a decreasing trend in prices of the said RLNG in recent months, Management is confident about utilization of under drawn RLNG as above in subsequent contract years. Accordingly pending resolution and in view of proposed use of RLNG in future as stated above, no effect of the same has been given in these accounts.

4. Sales includes insurance recovered of RS. 871.89 lacs (Previous year RS. 260.46 lacs), export benefits of RS. 150.90 lacs (Previous year RS. 99.65 lacs) and net of trade discounts and returns.

5. Since it is not possible to ascertain with reasonable certainty the quantum of accrual in respect of certain insurance and other claims and interest on overdue bills from customers, the same are continued to be accounted for as and when received/settled.

6. other long-term liabilities include encashment of bank guarantee in earlier years amounting to RS. 202.50lacs (Previous year RS. 202.50 lacs) provided by the supplier of machinery. The supplier of machinery has challenged the encashment of bank guarantee and the case is pending before Hon''ble High Court of Delhi and Kolkata. Pending final decision, no adjustment has been carried out in accounts and above amount is shown under long term liabilities.

7. out of RS. 5,000.00 lacs raised through private placement of equity shares in February, 2014, the company has so far utilized RS. 2,650.00 lacs (including issue expenses of RS. 145.94 lacs)for the purposes for which the same were raised. The balance RS. 2,350.00 lacs remain temporarily invested in the bonds / debt schemes of mutual funds.

8. Other Advances under Short term Loan and Advances includes amount due from a JV Company Somany Keraben Private Limited (SKPL) amounting to RS. 13.99 lacs (Previous year 13.99 lacs), which is considered good for recovery by the company.

9. EMPLOYEE BENEFITS

(b) Amounts recognised as an expense/ (income) and included in the Note Number 24 are as under:

i) ''Salary, Wages, Bonus etc.'' of the statement of Profit and Loss includes RS. 135.99 lacs (Previous year RS. 129.26 lacs) towards Earned Leave Encashment and Sick Leave.

ii) ''Contributions to Provident and other Funds'' of the statement of Profit and Loss includes RS. 394.88 lacs (Previous year RS. 356.53 lacs) towards contribution to Provident Fund [including RS. 129.05 lacs (Previous year RS. 128.51 lacs) towards Somany Provident Fund, a multi-employer plan, refer to (c ) below].

iii) ''Contributions to Provident and other Funds'' of the statement of Profit and Loss includesRS. 207.59 lacs (Previous year RS. 43.29 lacs) towards contribution to Gratuity Fund.

(c) The Guidance issued by the Accounting Standard Board (ASB) on implementing AS-15, Employee Benefits (revised 2005) states that provident funds set up by employers, the investment and actuarial risk of which fall on the employer, needs to be treated as defined benefit plan. Its effect in this respect has not been ascertained and the same has been accounted for, as defined. The Fund has a surplus, determined net of investments less corpus (contribution plus interest thereon).

(d) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

(e) The expected return on the plan assets is determined byconsidering several applicable factors mainly the composition of the plan assets held, assessed risks of assets management, historical results of return on plan assets and the policy for plan assets management.

(f) The principal assumptions are the discount rate and salary growth rate. The discount rate is generally based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities.

10. The business activity of the Company falls within a single business segment viz. ''Ceramic Tiles and allied products'' and mainly sale of the product is within the country. Hence, the disclosure requirement of Accounting Standard 17 of ''Segment Reporting not considered applicable.

11. Related Party Transactions (As certified by the Management)

A. Names of related parties where control exists and nature of relationship:

Subsidiary Company

SR Continental Limited

Somany Global Limited

Amora Tiles Private Limited

B. Other related parties with whom transactions have taken place and description of relationship:

1. Joint Venture

Somany Keraban Private Ltd.

2. Key Management Personnel

Mr. Shreekant Somany, Chairman & Managing Director

Mr. Abhishek Somany, Joint Managing Director (Son of Chairman & Managing Director)

Mr. G.G. Trivedi, CEO*

Mr. Ambrish Julka, DGM (Legal) & Company Secretary*

3. Relatives of Key Management Personnel

Mrs. Anjana Somany, Additional Director (w.e.f. 24th March, 2015) (Wife of Chairman & Managing Director)

Mrs. Minal Somany (Wife of Joint Managing Director)

Mrs. Kala Trivedi (Wife of CEO)*

4. Associate Company

Vintage Tiles Private Limited

Commander Vitrified Private Limited

Vicon Ceramic Private Limited

Acer Granito Private Limited

Somany Sanitary Ware Private Limited (w.e.f. 27 th November, 2014)(Formerly Sonec Sanitary Ware Pvt Ltd)

Somany Fine Vitrified Private Limited (w.e.f. 20th January, 2015)(Formerly Fine Vitrified Pvt Ltd)

5. Enterprise over which Key Management Personnel and their relatives exercise significant influence and with whom transactions have taken place during the year*:

Vidres india Ceramics Private Limited

Yogi Cerachem Private Limited

Ishiv india Solutions Private Limited

6. Other related parties with which Company has transactions*:

Biba Apparels Private Limted - Private company in which director is a director

Wolkem india Limited - Public company in which director is a director and holds more than 2% shares along with relatives

G.L. Sultania & Co. - Firm in which director is proprietor

* Related w.e.f. 1st April, 2014 pursuant to the Companies Act, 2013

12. Interest in Joint Venture Company

a) Company''s contribution in the joint venture (by the name Somany Keraben Private Ltd.,a 50:50 Joint Venture Company) till 31st March, 2015 is RS. 77.30 lacs (Previous year RS. 77.30 lacs) towards share capital of Joint Venture entity.

Pursuant to Accounting Standard 27 "Financial Reporting of Interests in Joint Venture" the relevant information relating to Joint Venture Company (JVC) are given below:

Name of the JVC Country of Incorporation Proportion of Ownership Interest

Somany Keraben Private Limited (SKPL) india 50%

c) Both the parties have agreed to contribute in the increased share capital by RS. 12.00 lacs(each) post balance sheet date of the joint venture company.

13. a sum of RS. 96.84 lacs have been provided towards Corporate Social Responsibility (CSR) and same included under Other Expenses. Out of which RS. 9.74 lacs was spent and the balance amount of RS. 87.10 lacs would be utilized for CSR activities in subsequent years.

14. During the current year, the Company has computed depreciation based on useful life of the fixed assets as specified under schedule II of the Companies Act, 2013. The carrying value of the fixed assets which have completed their useful lives as on 1st April, 2014 has been charged against the balance in General Reserve of amounting to RS. 154.08 lacs(net of deferred tax RS. 79.34 lacs). Had there not been any change in the useful life of the fixed assets, the depreciation would have been higher by RS. 216.47 lacs for the year ended 31st March 2015 and to that extent profit would have been lower.

15. The Company has not provided diminution in the value of certain unquoted long term strategic investments, since in the opinion of Board, such diminution in their value is temporary in nature, considering the inherent value, nature of investments, the investees'' assets and expected future cash flow from such investments.

16. Research and development expenditure on revenue account amounting to RS. 66.82 lacs (Previous year RS. 58.32 lacs) has been charged to statement of profit and loss.

17. in the opinion of the management, current assets and loans and advances have a value on realisation in ordinary course of business at least equal to the amount at which they are stated.

18. Balances of certain trade receivables, advances, trade payables and other liabilities are in the process of confirmation and/or reconciliation.

19. Profit and/or Loss on sale of stores and raw materials remain adjusted in respective consumption accounts.

20. Trade payables include acceptances of RS. 11,445.83 lacs (Previous year RS. 9,887.83 lacs).

(ii) in order to increase its shareholding in the above stated two companies to 51% of total issued and subscribed capital in aforesaid companies, the Company has further paid following sums:

Somany Sanitary Ware Pvt. Ltd.* RS. 100.00 lacs

Somany Fine Vitrified Pvt. Ltd.* RS. 200.00 lacs

* stated amount paid has been shown as ''Advance against Share Application Money'' under Long Term Loans and Advances.

By the above said shareholders agreements and supply agreements,the company has right to buy and sell the entire production of tiles / sanitaryware of companies stated in/under its own brand.

21. The Company has entered into long term supply agreements (LTA or Agreements) with Vintage Tiles Pvt. Ltd., Commander Vitrified Pvt. Ltd., Amora Tiles Pvt. Ltd., Acer Granito Pvt. Ltd., Vicon Ceramic Pvt. Ltd., Somany Sanitaryware Pvt. Ltd. and Somany Fine Vitrified Pvt. Ltd. By the said agreements the Company has right to buy and sell the entire production of tiles / sanitaryware of companies stated in/under its Own Brand.

As liability will accrue / arise as and when purchase will be made under LTA. Hence under the agreements there is no material foreseeable losses as on date in the opinion of the management.

22. The previous year''s figures have been regrouped, rearranged wherever consider necessary.

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Mar 31, 2013

1.1 Sales are reported net of trade discounts and returns and includes export benefits of Rs. 105.26 lacs (previous year Rs. 67.34 lacs).

1.2 Since it is not possible to ascertain with reasonable certainty the quantum of accrual in respect of certain insurance and other claims and interest on overdue bills from customers, the same are continued to be accounted for as and when received/settled.

1.3 (a) Other long-term liabilities include encashment of bank guarantee in earlier years amounting to Rs. 202.50 lacs (previous year Rs. 202.50 lacs) provided by the supplier of machinery. The supplier of machinery has challenged the encashment of bank guarantee and the case is pending before Hon''ble High Court of Delhi and Kolkata. Pending decision, no adjustment has been carried out in accounts.

(b) During the year, a demand of Rs. 925.65 lacs (including interest Rs. 97.41 lacs) for difference between market rate of gas and contracted price for the period 2005-2010 has been received from GAIL (India) Ltd. The Company along with others have filed a Special Civil Application (SCA) in the Hon''ble Gujrat High Court and the Hon''ble Divisional Bench has admitted the SCA on submission of Bank Guarantee of Rs. 118 lacs. Pending decision/ further direction, no provision in this regard at this stage is considered necessary by the company.

1.4 Trade receivable above six months and advance recoverable in cash/kind (net) includes amount due from JV Company (SKPL) amounting to Rs. 41.17 lacs and Rs. 8.80 lacs respectively (previous year Rs. 41.17 lacs and Rs. 6.17 lacs respectively), for which management is confident about recovery and accordingly the same has been considered good.

1.5 The Company has not received full information from vendors regarding their status under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED ACT); hence, disclosure relating to amount unpaid at year end together with interest paid/payable have been given based on the information so far available with the Company/identified by the Company management. The detail of the same is as under:-

1.6 The business activity of the Company falls within a single primary business segment viz. ''Ceramic Tiles and allied products ''and basically sale of the product is within the country. Hence, the disclosure requirement of Accounting Standard 17 of ''Segment Reporting'' notified under Companies (Accounting Standards) Rules, 2006 is not considered applicable.

1.7 Related Party Transactions (As certified by the Management)

A. Names of related parties where control exists and nature of relationship:

Subsidiary Company : M/s SR Continental Ltd.

M/s Somany Global Ltd. (Formerly Somany Retail Ltd)

B. Other related parties with whom transactions have taken place and description of relationship:

1. Joint Venture : M/s Somany Keraban Private Ltd.

2. Key Management Personnel : Mr. Shreekant Somany, Chairman & Managing Director

Mr. Abhishek Somany, Joint Managing Director (Son of Chairman & Managing Director)

3. Relatives of Key Management Personnel : Mrs. Minal Somany

(Wife of Joint Managing Director)

4. Associates : Vintage Tiles Private Ltd.

Commander Vitrified Private limited

1.8 Interest in Joint Venture Company

a) Company''s contribution in the joint venture (by the name Somany Keraben Private Ltd., a 50:50 Joint Venture Company) till 31st March, 2013 is Rs.77.30 lacs (previous year Rs 77.30 lacs) towards share capital of Joint Venture entity.

1.9 Research and development expenditure on revenue account amounting to Rs. 45.30 lacs (previous year Rs. 21.37 lacs) has been charged to statement of profit and loss.

1.10 In the opinion of the management, current assets and loans and advances have a value on realisation in ordinary course of business at least equal to the amount at which they are stated.

1.11 Balances of certain trade receivables, trade payables, other liabilities and other advances are in process of confirmation or reconciliation.

1.12 Profit and/or Loss on sale of stores and raw materials remain adjusted in respective consumption accounts.

1.13 (a) Foreign exchange derivatives and exposures outstanding at the year-end:

1.14 Trade payables includes acceptance Rs. 8553.13 lacs ( previous year Rs.5521.42 lacs)

1.15 In term of the agreement and on acquisition of 26% of equity stake in M/s Vintage Tiles Pvt. Ltd. (VTPL), the company is having right to buy and sell the entire production of 26.50 lacs square metre per annum of polished vitrified tiles from VTPL.

1.16 In term of the agreement dated 03rd April 2012, the company has acquired 32.50 lacs numbers of fully paid up equity shares of Rs. 10 each at the rate of Rs. 10 per share amounting to Rs. 325 lacs representing 26% equity stake in M/s Commander Vitrified Pvt. Ltd. (CVPL). By this agreement, the company is having right to buy and sell the entire production of CVPL in its own brand.

1.17 The previous year''s figures have been regrouped, rearranged wherever consider necessary.

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Mar 31, 2012

1.1 Contingent liabilities and commitments (to the extent not provided for)

(As certified by the Management) (Rs. Lacs)

Sr. No. Particulars 31.03.2012 31.03.2011

i) Estimated amount of contracts remaining to be executed on capital account and 829.97 2064.84 not provided for [net of advances]

ii) Contingent liabilities not provided for in respect of: (As certified by the Management)

a) Claims and other demands against the Company not acknowledged as debts. 115.84 109.80

b) Sales tax and purchase tax demands, among others against which 200.72 164.76 the Company has preferred appeals.

c) Excise/custom duty and service tax demands and show-cause notices issued against 361.86 390.87 which the Company/Department has preferred appeals/filed replies.

d) Disputed income tax and wealth tax demand (excluding penalty if any) 166.85 122.66

e) Against the imposition of Local Area Development Tax (LADT) levied by Haryana Government, 439.13 318.97 the Hon'ble Supreme Court of India vide its order dated 10th May 2006 has accepted the Company's application for stay. Further, Hon'ble Supreme Court vide their order dated 30th October 2009 stated the assessees to file the LADT returns; however, no recovery of tax will be made till further order. In the meantime, the Haryana Government has repealed the LADT Act and introduced another Act by the name of 'Entry Tax' on the same line, which was also been held ultra vires by the Hon'ble Punjab and Haryana High Court. Pending the final Order of the Hon'ble Supreme Court on the above matter And there is no act either LADT/Entry Tax prevalent in Haryana, no provision for the same is considered necessary by the Company for the period from 1st April, 2006. In this regard, liability provided but not paid amounting to Rs.60 lacs for the financial year 2006-07 has been written back as advised to the Company.

iii) Bond executed in favour of sales tax/custom authorities. 25.00 25.00

iv) As against a term loan of Rs.1,230 lacs (previous year Rs.504 lacs) by a financial institution to M/s Schablona India Ltd (SIL), the Company has given an undertaking to the former for non-disposal of its shareholding in SIL.

v) The Company has entered into a Memorandum of Undertaking with a party for the purchase of ceramic tiles and accordingly has initially committed to invest up to Rs.325 lacs (till date invested Rs.200 lacs) in a phase manner for acquiring 26% equity stake in the target company.

1.2 Sales are reported net of trade discounts and returns and export benefits of Rs.67.34 lacs (previous year Rs.55.29 lacs).

1.3 Since it is not possible to ascertain with reasonable certainty the quantum of accrual in respect of certain insurance and other claims and interest on overdue bills from customers, the same are continued to be accounted for as and when received/settled.

1.4 Other long-term liabilities include encashment of bank guarantee in earlier years amounting to Rs.202.50 lacs (previous year Rs.202.50 lacs) provided by the supplier of machinery. The supplier of machinery has challenged the encashment of bank guarantee and the case is pending before Hon'ble High Court of Delhi and Kolkata. Pending decision, no adjustment has been carried out in accounts.

1.5 (a) Exceptional item (net) includes provision for diminution in the value of investment of the joint venture company - M/s Somany Keraban Private Limited (SKPL) of Rs.77.30 lacs and write back of liability towards LADT of Rs.60 lacs {Refer note 2.1(ii) (e)}.

(b) Debtors and advance recoverable in cash/kind (net) includes amount due from JV Company (SKPL) amounting to Rs.41.17 lacs and Rs.6.17 lacs respectively, for which management is confident of full recovery and accordingly the same has been considered good.

1.6 The Company has not received full information from vendors regarding their status under Micro, Small and Medium Enterprises Development Act,

(b) Amounts recognised as an expense/(income) and included in the Note Number 24 are as under:

(I) Contributions to Provident and other Funds' of the statement of Profit and Loss Account includes Rs.292.47 lacs (previous year Rs.258.98 lacs) towards contribution to Provident Fund [including Rs.92.55 lacs (previous year Rs.75.69 lacs) towards Somany Provident Fund, a multi-employer plan, refer to (c) below].

(c) The Guidance issued by the Accounting Standard Board (ASB) on implementing AS-15, Employee Benefits (revised 2005) states that provident funds set up by employers, the investment and actuarial risk of which fall on the employer, needs to be treated as defined benefit plan. Pending determination of liability in view of issues in making reasonable actuarial assumptions and due to the non-availability of other sufficient information to use defined benefit accounting for such multi-employer plan. Its effect in this respect has not been ascertained and the same has been accounted for, as defined contribution plan. The Fund has a surplus, determined net of investments less corpus (contribution plus interest thereon). However, according to the management, the impact, if any, that may arise on considering it as defined benefit plan, is not expected to be material.

(d) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

(e) The expected return on the plan assets is determined by considering several applicable factors mainly the composition of the plan assets held, assessed risks of assets management, historical results of return on plan assets and the policy for plan assets management.

(f) The principal assumptions are the discount rate and salary growth rate. The discount rate is generally based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities.

1.7 The business activity of the Company falls within a single primary business segment namely 'Ceramic Tiles and allied products 'and basically sale of the product is within the country. Hence, the disclosure requirement of Accounting Standard 17 of 'Segment Reporting' notified under Companies (Accounting Standards) Rules, 2006 is not considered applicable.

1.8 Related Party Transactions (As certified by the Management)

1.9 Research and development expenditure on revenue account amounting to Rs.21.37 lacs (previous year Rs.28.66 lacs) has been charged to Profit and Loss account.

1.10 In the opinion of the management, current assets and loans and advances have a value on realisation in ordinary course of business at least equal to the amount at which they are stated.

1.11 Balances of certain trade receivables, trade payables, other liabilities and other advances are in process of confirmation or reconciliation.

1.12 Profit and/or Loss on sale of stores and raw materials remain adjusted in respective consumption accounts.

The Company uses derivative instruments for hedging and/or reducing finance cost.

1.13 i) Debtors include due from subsidiaries and joint venture Company amounting to Rs.11.04 lacs (previous year Rs 14.43 lacs) and Rs.41.17 lacs (previous year Rs.91.03 lacs) respectively.

ii) The Company has investment of Rs.50 lacs in its wholly-owned subsidiary - M/s Somany Global Limited (SGL) which has substantial carry forward losses. In view of this the management, considering the profit in SGL in past two years and Company's long-term strategic investment, no provision of diminution in the value of investment in SGL has been considered in these financial statements.

1.14 In view of option allowed by the Ministry of Corporate Affairs vide its notification dated 29th December, 2011 on Accounting Standard -11 'The Effects of Changes in Foreign Exchange Rates', the Company during the year has charged to cost of depreciable assets the exchange difference on loan/liability (long-term foreign currency monetary items) used for depreciable assets which were hitherto charged to the statement of profit and loss. Accordingly, the exchange difference of Rs.89.95 lacs has been charged to the cost of depreciable fixed assets and to the extent profit for the year is higher.

1.15 In terms of agreement dated 13th January 2012, the Company has acquired Rs.23.40 lacs fully paid up equity shares of Rs.10 each at the rate of Rs 21.50 per share, amounting to Rs.503.10 lacs, representing 26% equity stake in M/s Vintage Tiles Private Limited (VTPL). By this agreement, the Company is having right to buy entire production of 26.50 lacs square metre per annum of polished vitrified tiles from VTPL.

1.16 The previous year's figures have been regrouped, rearranged and recast as per Revised Schedule VI as notified by notification number S.O. 447(E) dated 28th February 2011 (as amended by F. No 2/6/2008-CL-V dated 30th March 2011).

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Mar 31, 2011

(Amount in Rs.)

31.03.2011 31.03.2010

1. Estimated amount of contracts remaining to be executed on capital account and not provided for [net of advances] 206,483,680 77,673,352

2. (A) Contingent liabilities not provided for in respect of: (As certified by the Management)

a) Claims and other demands against the Company not acknowledged as debts. 10,980,253 10,725,245

b) Sales Tax and Purchase Tax demands etc. against which the Company has preferred appeals. 16,476,131 4,582,504

c) Excise/Custom duty and Service Tax demands and show cause notices issued against which the Company/Department has preferred appeals/filed replies. 39,087,188 40,744,718

d) Custom duty, which may arise if obligation for exports is not fulfilled against import of capital under EPCG. - 10,287,165

e) Disputed Income Tax & Wealth Tax Demand (Excluding Penalty if any) 12,265,693 11,378,798

f) Against the imposition of Local Area Development Tax (LADT) levied by Haryana Government, the Hon'ble Supreme Court of India vide its order dated 10th May, 2006 has accepted the Company's application for stay. Further Hon'ble Supreme Court vide their order dated 30th October, 2009 stated the assesses to file the LADT returns, however no recovery of tax will be made till further order. Liability in this regard of Rs. 60 Lacs have been provided in the accounts up to year 2006-07. Pending, the final Order of the Hon'ble Supreme Court on the above matter, no further provision for the same have been considered necessary at this stage. 31,897,458 25,934,920

(B) Bond executed in favour of Sales Tax/Custom Authorities. 2,500,000 2,500,000

(C) Bond/Guarantee executed on behalf of other body corporate 50,400,000 60,400,000

(D) As against a term loan of Rs. 504 Lacs (Previous Year Rs. 504 lacs) by a Financial Institution to M/s Schablona India Ltd. (SIL), the Company has given an undertaking to the former for non disposal of its shareholding in SIL.

3. Sales are reported net of trade discounts and returns and include Miscellaneous Sales of Rs. 22,426,919 (Previous Year Rs. 21,198,883) and Export Benefits of Rs. 5,529,147 (Previous Year Rs. 5,597,212).

4. Since it is not possible to ascertain with reasonable certainty the quantum of accrual in respect of certain insurance and other claims and interest on overdue bills from customers, the same are continued to be accounted for as and when received/settled.

5. Other Liabilities include encashment of performance bank guarantee in earlier years amounting to Rs. 20,250,000 (Previous Year Rs. 20,250,000) provided by the supplier of machinery (read with note no. 3 of Schedule 5). The supplier of machinery has challenged the encashment of bank guarantee and the case is pending before Hon'ble High Court of Kolkata. Pending decision, no adjustment has been carried out in accounts.

6. Company has an Investment of Rs. 7,730,000 in the Joint Venture Company (50% - JV Company) Somany Keraben Pvt Ltd. where considerable erosion of net worth is there due to accumulated losses. Considering the future prospects, strategies and long term in nature no provision for dimunition at this stage is considered necessary by the Management. Further, debtors and advance recoverable in cash/kind includes amount due from JV Company amounting to Rs. 9,102,520 and Rs. 687,298 respectively, for which management is confident for full recovery and accordingly the same has been considered good. To expedite the process of recovery, the Company is further negotiating from the JV Company to buy Brand name & assets (including fixed assets).

7. Under the Micro, Small and Medium Enterprises Development Act, 2006, which came into force from 2nd October, 2006, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises. The Company has initiated the process for obtaining relevant information from its suppliers about their coverage under the said act. Since the relevant information is not readily available, no disclosures have been made in these accounts. However, in view of the management, the impact of interest, if any, that may be payable in accordance with the provision of this act is not expected to be material.

(b) Amounts recognised as an expense/(income) and included in the Schedule 14 are as under:

(I) “Salaries, Wages, Dearness Allowance and Bonus” of Profit and Loss Account includes Rs. Nil (Previous Year Rs. 5,285,721) for Gratuity, Rs. 7,063,049 (Previous Year Rs. 6,338,501) for long term Leave Encashment, Rs. 298,429 (Previous Year Rs. 400,265) for other long term benefits.

(II) “Contributions/Provision to and for Provident and other Funds” of Profit and Loss Account includes Rs. 25,897,847 (Previous Year Rs. 19,781,518) (includes Rs. 6,322,103 (Previous Year Rs. 4,520,303) towards Somany Provident Fund, a multi employer plan, refer (c) below.)

(c) The Guidance issued by the Accounting Standard Board (ASB) on implementing AS-15, Employee Benefits (revised 2005) states that provident funds set up by employers, the investment and actuarial risk of which fall on the employer, needs to be treated as defined benefit plan. Pending determination of liability in view of issues in making reasonable actuarial assumptions and due to the non- availability of other sufficient information to use defined benefit accounting for such multi-employer plan, effect in this respect has not been ascertained and the same has been accounted as defined contribution plan. The Fund has a surplus, determined net of investments less corpus (contribution plus interest thereon). However, in view of the management, the impact, if any, that may arise on considering it as defined benefit plan, is not expected to be material.

(d) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

(e) The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held, assessed risks of assets management, historical results of return on plan assets and the policy for plan assets management.

(f) The principal assumptions are the discount rate & salary growth rate. The discount rate is generally based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities.

8. The business activity of the Company falls within a single primary business segment viz. ‘Ceramic Tiles and allied products 'and basically sale of the product is within the country. Hence the disclosure requirement of Accounting Standard 17 of ‘Segment Reporting' notified under Companies (Accounting Standards) Rules, 2006 is not considered applicable.

9. Related Party Transactions:

A. Names of related parties where control exists and nature of relationship:

Subsidiary Company: M/s SR Continental Ltd.

M/s Somany Global Ltd. (Formerly Somany Retail Ltd.)

B. Other related parties with whom transactions have taken place and description of relationship:

1. Joint Venture: M/s Somany Keraben Private Ltd.

2. Associate M/s Scope Vinimoy Private Ltd.

3. Key Management Personnel: Mr. Shreekant Somany, Chairman and Managing Director.

Mr. Abhishek Somany, Joint Managing Director (Son of Chairman and Managing Director) Mr. G. G. Trivedi, Executive Director up to 20/05/09

4. Relatives of Key Management Personnel: Mrs. Anjana Somany (Wife of Chairman and Managing Director and Mother of Joint Managing Director) Mrs. Minal Somany (Wife of Joint Managing Director) Mrs. Kala Trivedi (Wife of Executive Director)

5. Enterprises over which relative of Key Management personnel exercise significant influence: M/s Yogi Ceramics Private Ltd.

10. Interest in Joint Venture Company

a) Company's contribution in the joint venture (by the name Somany Keraben Private Ltd., a 50:50 Joint Venture Company) till 31st March, 2011 is Rs. 7,730,000 (Previous Year Rs. 7,730,000) towards share capital of Joint Venture entity.

11. Research & Development expenditure on revenue account amounting to Rs. 2,865,639 (Previous Year Rs. 2,819,655) has been charged to profit and loss account.

12. In the opinion of the management, Current Assets and Loans & Advances have a value on realisation in ordinary course of business at least equal to the amount at which they are stated.

13. Balances of certain debtors, loans and advances, creditors and other liabilities are in process of confirmation/reconciliation.

14. Profit and/or loss on sale of stores and raw materials remain adjusted in respective consumption accounts.

15. i) Debtors include due from subsidiaries and joint venture Company amounting to Rs. 1,442,918 (Previous Year Rs. 2,708,587) & Rs. 9,102,520 (Previous Year 8,400,883) respectively.

ii) Advances recoverable in cash & kind include (a) due from subsidiaries and joint venture Company in respect of receivables on account of expenses reimbursed amounting to Rs. Nil (Previous Year Rs. 797,772) & Rs. Nil (Previous Year Rs. Nil) respectively and (b) capital advance Rs. 22,906,223 (Previous Year Rs. 74,033,820)

16. Investment purchased/sold during the year is NIL (Previous Year 200 units of 8.70% PFC 2020 purchased at Rs. 201,621,096 and sold at Rs. 202,485,802)

17. Unsecured Loans repayable within one year are Rs. 5,430,006 (Previous Year Rs. 263,800,000).

18. In terms of the Resolution passed by the shareholders at their meeting held on 30th October, 2010, fully paid Equity Share of Rs. 10/- each of Company has been sub-divided into five fully paid Equity Shares of Rs. 2 each. Further, unissued preference capital of Rs. 100,000,000 has been reclassified into equivalent amount of Authorised equity shares capital and accordingly Authorised Capital of the Company has been modified to that extent.

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Mar 31, 2010

(Amount in Rs.)

31.03.2010 31.03.2009

1. Estimated amount of contracts remain ing to be executed on capital account and not provided for [net of advances] 77,673,352 18,670,136

2 (A) Contingent liabilities not provi ded for in respect of: (As certified by the Management)

a) Claims and other demands against the Company not acknowledged as debts. 10,725,245 12,112,187

b) Sales Tax and Purchase Tax demands etc. against which the Company has preferred appeals. 4,582,504 4,582,990

c) Excise/Custom duty and Service Tax demands and show cause notices issued against which the Company/Depa rtment has preferred appeals/filed replies. 40,744,718 46,483,632

d) Custom duty, which may arise if obl igation for exports is not fulfilled against import of capital under EPCG. 10,287,165 31,781,081

e) Disputed Income Tax & Wealth Tax Demand (Excluding Penalty if any) 11,378,798 -

f) Against the imposition of Local Area Development Tax (LADT) levied by Haryana Govt., the Honble Supreme Court of India vide its order dated 10th May, 2006 has accepted the Companys application for stay. Further Honble Supreme Court vide their order dated 30th October, 2009 stated the assesses to file the LADT returns, however no recovery of tax will be made till further order. Liability in this regard of Rs. 60 Lacs have been provided in the accou nts up to year 2006-07. Pending, the final Order of the Honble Supreme Court on the above matter, no further provision for the same have been considered necessary at this stage.25,934,920 16,579,221

(B) Bond executed in favour of Sales Tax/ Custom Authorities. 25,00,000 25,00,000

(C) Bond/ Guarantee executed on behalf of other body corporate 60,400,000 60,400,000

(D) As against a term loan of Rs. 504 Lacs (previous year Rs. 504 lacs) by a Financial Institution to M/s. Schablona India Limited (SIL), the Company has given an undertaking to the former for non disposal of its shareholding in SIL.

3. Sales are reported net of trade discounts and returns and include Miscellaneous Sales of Rs. 21,198,883 (previous year Rs. 29,013,222) and Export Benefits of Rs. 5,597,212 (previous year Rs. 2,934,852).

4. Since it is not possible to ascertain with reasonable certainty the quantum of accrual in respect of certain insurance and other claims and interest on overdue bills from customers, the same are continued to be accounted for as and when received/settled.

5. Other Liabilities include encashment of performance bank guarantee in earlier years amounting to Rs. 20,250,000 (previous year Rs. 20,250,000) provided by the supplier of machinery (read with note no. 3 of Schedule 5). The supplier of machinery has challenged the encashment of bank guarantee and the case is pending before Honble High Court of Kolkata. Pending decision, no adjustment has been carried out in accounts.

6. (a) Company has an Investment of Rs. 7,730,000 in the Joint Venture Company (50% - JV Company) Somany Keraben Private Limited (negative net worth) & Rs. 5,000,000 in Subsidiary Company Somany Global Limited where considerable erosion of net worth is there in view of losses. Considering the future payment prospects and long term in nature no provision for diminution at this stage is considered necessary by the Management.

(b) Debtors include amount due from JV Company amounting to Rs. 8,400,883 for which Management is confident for full recovery and accordingly the same has been considered good.

7. Under the Micro, Small and Medium Enterprises Development Act, 2006, which came into force from 2nd October, 2006, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises. The Company has initiated the process for obtaining relevant information from its suppliers about their coverage under the said act. Since the relevant information is not readily available, no disclosures have been made in these accounts. However, in view of the management, the impact of interest, if any, that may be payable in accordance with the provision of this act is not expected to be material.

8. The major components of Deferred Tax Liability and Deferred Tax Assets are as under:

9 Employee Benefits:

(a) The status of the gratuity, leave encashment and sick leave as at 31st March, 2010 is as follows:

I Expense recognized in the statement of profit and loss.

II Net Assets/(liability) recognised in the Balance Sheet as at 31st March, 2010.

III Change in present value of obligation.

IV Changes in the fair value of plan assets.

10 Employee Benefits:

(a) The status of the gratuity, leave encashment and sick leave as at 31st March, 2010 is as follows (Contd.):

V The Major Category of plan assets as a percentage to total plan

VI Actuarial Assumptions

(b) Amounts recognised as an expense/(income) and included in the Schedule 14 are as under:

(I) "Salaries, Wages, Dearness Allowance and Bonus" of Profit and Loss Account includes Rs. 52,85,721(previous year Rs. 9,765,273) for Gratuity, Rs. 6,338,501 (previous year Rs. 5,736,192) for long term Leave Encashment, Rs. 400,265 (previous year Rs. 150,814) for other long term benefits.

(II) "Contributions/Provision to and for Provident and other Funds" of Profit and Loss Account includes Rs. 19,781,518 (previous year Rs. 16,677,554) (includes Rs. 4,520,303 (previous year Rs. 4,525,430) towards Somany Provident Fund, a multi employer plan, refer (c) below.)

(c) The Guidance issued by the Accounting Standard Board (ASB) on implementing AS-15, Employee Benefits (revised 2005) states that provident funds set up by employers, the investment and actuarial risk of which fall on the employer, needs to be treated as defined benefit plan. Pending determination of liability in view of issues in making reasonable actuarial assumptions and due to the non-availability of other sufficient information to use defined benefit accounting for such multi-employer plan, effect in this respect has not been ascertained and the same has been accounted as defined contribution plan. The Fund has a surplus, determined net of investments less corpus (contribution plus interest thereon). However, in view of the management, the impact, if any, that may arise on considering it as defined benefit plan, is not expected to be material.

(d) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

(e) The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held, assessed risks of assets management, historical results of return on plan assets and the policy for plan assets management.

(f) The principal assumptions are the discount rate & salary growth rate. The discount rate is generally based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities.

11. The business activity of the Company falls within a single primary business segment viz. Ceramic Tiles and allied products and basically sale of the product is within the country. Hence the disclosure requirement of Accounting Standard 17 of Segment Reporting issued by the Institute of Chartered Accountants of India is not considered applicable.

12. Related Party Transactions:

A. Names of related parties where control exists and nature of relationship: Subsidiary Company: M/s. SR Continental Limited

M/s. Somany Global Limited (Formerly Somany Retail Limited)

B. Other related parties with whom transactions have taken place and description of relationship:

1. Joint Venture: M/s. Somany Keraben Private Limited

2. Associates: M/s. Bhilwara Holdings Limited

M/s. Scope Vinimoy Private Limited

3. Key Management Personnel: Mr. Shreekant Somany, Chairman & Managing Director

Mr. Abhishek Somany, Joint Managing Director (Son of Chairman & Managing Director) Mr. G. G. Trivedi, Executive Director up to 20.05.2009

4. Relatives of Key Management Personnel : Mr. Hira Lall Somany, (Father of Chairman & Managing Director and Grandfather of Joint Managing Director)

Mrs. Anjana Somany, (Wife of Chairman & Managing Director and Mother of Joint Managing Director) Mrs. Minal Somany, (Wife of Joint Managing Director) Mrs. Kala Trivedi, (Wife of Executive Director)

5. Enterprises over which relative of Key Management

personal exercise significant influence : M/s. Yogi Ceramics Private Limited

C. Details of transactions with related parties

C. Details of transactions with related parties (Contd.)

C. Details of transactions with related parties (Contd.)

13. Interest in Joint Venture Company

a) Companys contribution in the joint venture (by the name Somany Keraben Private Limited, a 50:50 Joint Venture Company) till 31.03.2010 is Rs. 7,730,000 (previous year Rs. 1,580,000) towards share capital (out of which Rs. Nil (previous year Rs. 6,150,000) pending allotment) of Joint Venture entity. Pursuant to Accounting Standard 27 "Financial Reporting of Interests in Joint Venture" the relevant information relating to Joint Venture Company (JVC) are given below:

14. Earning Per Share: The numerators and denominators used to calculate Basic and Diluted Earning Per Share:

15. Capital work in progress include technical know-how fee,machinery under installation and/or in transit, construction/erection material and pre-operative expenses pending allocation/appropriation :- (Amount in Rs.)

16. Research & Development expenditure on revenue account amounting to Rs. 2,819,655 (previous year Rs. 3,155,165) has been charged to profit and loss account.

17. In the opinion of the management, Current Assets and Loans & Advances have a value on realisation in ordinary course of business at least equal to the amount at which they are stated.

18. Balances of certain debtors, loans and advances and current liabilities are in process of confirmation/reconciliation.

19. Profit and/or loss on sale of stores and raw materials remain adjusted in respective consumption accounts.

20. (a) Foreign Exchange derivatives and exposures outstanding at the year end :

21. i) Debtors include due from subsidiaries and joint venture Company amounting to Rs. 2,708,587 (previous year Rs. 75,392) & Rs. 8,400,883 (previous year Rs. 26,926,556) respectively. ii) Advances recoverable in cash & kind include (a) due from subsidiaries and joint venture Company in respect of receivables on account of expenses reimbursed amounting to Rs. 797,772 (previous year Rs. 786,934) & Rs. Nil (previous year Rs. Nil) respectively and (b) capital advance Rs. 74,033,820 (previous year Rs. 5,003,268)

22. Details of Investment purchased/sold during the year:

23. Unsecured Loans repayable with in one year are Rs. 263,800,000 (previous year Rs. 17,736,000).

24. Directors Remuneration:

25. Payments to Auditors (Excluding Service Tax)

26. Additional information pursuant to the provisions of paragraph 3 and 4 of Schedule VI of the Companies Act, 1956.

27. Figures for the previous year have been regrouped and rearranged wherever considered necessary.

28. Schedules 1 to 17 form an integral part of Balance Sheet and Profit and Loss Account.