Market & News

Dear Members,

The Directors of your Company have the pleasure in presenting the 57^th Board's Report together with the Annual Audited Financial Statements of the Company for the financial year ended 31 March, 2025.

FINANCIAL HIGHLIGHTS

The summary of the Company's financial statements, both on a standalone and consolidated basis, for financial year 2024-25 as compared to the previous financial year i.e., 2023-24 is given below:

(Rs In Lakhs)

FINANCIAL REVIEW

(The financial discussion is based on Standalone Financial Statements)

Your Company continued to witness yet another challenging year and experienced a very slow market demand environment. Despite weak market demand particularly in the first half of the financial year, the revenue increased by 1.4% to Rs 2,56,942.13 Lakhs from Rs 2,53,448.07 Lakhs in the previous financial year. The Profit before Depreciation, Interest, Tax and Exceptional items, Profit before Tax after Exceptional items and Profit after Tax for the year under review were Rs 16,392.71 Lakhs, Rs 11,267.17 Lakhs and Rs 8,568.76 Lakhs respectively.

On the balance sheet front, your Company's net worth increased to Rs 80,028.36 Lakhs in FY 2024-25 as compared to Rs 72,316.83 Lakhs in FY 2023-24. The Company's total debt decreased to Rs 1,367.61 Lakhs in FY 2024-25 as compared to Rs 1,401.39 Lakhs during FY 2023-24 on account of repayment of term loan. The Net block (including capital work- in-progress) of your Company increased to Rs 49,115.20 Lakhs during FY 2024-25 as compared to Rs 45,735.62 Lakhs during FY 2023-24. The long-term investment of your Company increased to Rs 32,557.99 Lakhs in FY 2024-25 from Rs 30,716.34 Lakhs in FY 2023-24 primarily due to investments in equity shares and preference shares of Sudha Somany Ceramics Private Limited.

There was an increase in net current assets to Rs 5,232.45 Lakhs during FY 2024-25 from Rs 435.80 Lakhs during FY 2023-24, primarily on account of the increase in trade receivables.

CONSOLIDATED FINANCIAL STATEMENTS

As required under Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the consolidated financial statements have been prepared in accordance with applicable Accounting Standards. The audited consolidated financial statements together with Auditors' Report forms part of this Annual Report.

The consolidated net profit of your Company was Rs 6,006.76 Lakhs for the year under review compared to Rs 9,688.94 Lakhs in the previous year.

CORPORATE HIGHLIGHTS Access to Capacity

During the year under review, your Company's capacity reduced by ~5 million square meters (msm) per annum because of discontinuation of JV arrangement in two entities. As a result, the access to tile capacity was reduced to ~75 msm comprising 29.97 msm from its own plants, 22 msm from subsidiaries and associates and ~23 msm through other outsourcing arrangements.

In the Bathware segment, your Company, through its subsidiaries, had a manufacturing capacity of 0.48 million pieces per annum of sanitaryware and 1.30 million pieces per annum of bath fitting items.

Capital Expenditure

Your Company continued to invest in expanding and upgrading its plant and machinery and infrastructure. The Gross block of fixed assets (including capital work-in-progress) increased by Rs 11,134.28 Lakhs during the financial year as compared to Rs 18,023.51 Lakhs in the FY 2023-24 on account of addition in fixed assets.

Branding and Distribution

Somany Ceramics: Pioneering Innovation, Sustainability, and

Engagement in FY 2024-25

During FY 2024-25, the Company steered through challenging market conditions with resilience and a forward-looking vision. Building on our legacy of innovation, we devised strategies that combined agility with an unwavering commitment to excellence.

A defining highlight was our patented VC Shield Technology securing the Superbrand title for the second consecutive year. This prestigious recognition celebrates its cutting-edge design and the trust it has earned from millions of customers, solidifying the Company's leadership in the industry.

A dynamic 360-degree branding strategy was embraced, integrating television and digital campaigns to ignite awareness and engagement, while outdoor activations, hyperlocal efforts and strategic partnerships drove conversions and deepened our market presence.

New Launches: Elevating Standards

The Company's product lineup dazzled with fresh tile collections- Colorato, Regalia, Tones, Porto, Sedimento, Everstone, Eternastone and Harmony-each redefining style and durability. In Bathware, Smart Sense Luxury Toilets was introduced in the French Collection, Thin Essence Wall Hung, Thermostatic Diverter and Quiet Swirl Wall Hung, seamlessly blending luxury with advanced functionality.

Campaign with a Heart: Tamil TV Commercial

A Tamil TVC - Vignette campaign struck a chord in Tamil Nadu, weaving Somany into the fabric of local culture. Integrated into the hit Tamil serial Siragadikka Aasai on Star Vijay, featuring stars Meena and Muthu, brought our products to life through relatable storytelling about dream homes. Rolled out across Sun TV, Hotstar, Meta and more, this effort connected with over 6.4 million viewers, strengthening our southern foothold.

Engagement with influencers

Last year i.e. 2023-24, the Company started with sub-dealer loyalty program in Bathware and this year i.e. 2024-25, the Company had initiated the plumber loyalty program and followed it up with mason and contractor loyalty program. The mission to train tile masons continued and the Company conducted over 100 tile master training programs and mason meets Pan - India.

Digital and Social campaigns

The Company's digital strategy excelled through precision targeting on YouTube and Meta, while always-on campaigns across social, display, and search channels drove strong results. Digital transformation was accelerated through WhatsApp Chatbot & Generative AI integration, enhanced CRM capabilities and hyperlocal marketing strategies. Bathware segment gained significant visibility with high impact / high- visibility airport branding across 20 locations, including boarding passes and tray placements, paired with 1,200+ store activations and 120 Shop in Shop (SIS) zones.

An extensive media push for the Coverstone Series aired across national channels like Aajtak and NDTV 24x7, alongside digital platforms like Sony Liv during US Open matches, with over 10,000 ad spots boosting visibility. Influencer collaborations showcased our Experience Centres, blending style and functionality, while outdoor hoardings maximized brand recall.

Expanding Footprints

Somany Ceramics extended its presence by opening new stores and display centres across diverse regions, boosting customer engagement and accessibility. Newly opened showrooms are carefully crafted spaces which provide a hands-on opportunity to explore our wide-ranging portfolio of tiles, sanitaryware, and bath fittings, allowing customers to experience firsthand the quality, innovation, and design that set our products apart. In financial year 2024-25, we established 85 exclusive Somany and Bathware stores and added 120 Bathware Shop in Shop (SIS) zones, underscoring our steadfast dedication to delivering excellence to every corner.

Exhibition and Events

This year the Company participated in Dialogues Edition XVI showcasing commitment to fostering meaningful relationship with architects. The Company participated at ISH Frankfurt with Bathware products leading the show. The Company's presence at IIID Hyderabad and at FAIRPRO Expo, Credai- Chennai allowed to connect directly with the lndustry leaders, architects and home builders.

Sustainability in Focus: Transforming Broken Tiles into Trendsetting Style Somany's "Transforming Broken Tiles into Trendsetting Style" initiative stood out as a beacon of sustainability. Collaborating with over 35 top- tier design institutions, including the Indian Institute of Art & Design (IIAD) and K.R. Mangalam University, 2,500+ architecture and interior design students were engaged to reimagine waste tiles as stunning murals, installations, and functional art pieces. These works now adorn campuses across India, merging eco-conscious creativity with aesthetic impact and sparking a rise in demand for sustainable offerings. Through the project, 10.5 tons of tiles were repurposed, preventing 4.2 tons of CO₂ emissions. This project raised awareness about sustainability among the next generation of architects, designers, and the broader community and engaged with social media and reached 1.5 million people. The initiative also received an award from ASSOCHAM - Marketing & Branding summit for its sustainability initiative and impact.

Conclusion

Financial year 2024-25 encapsulates Company's fusion of innovation, connection and purpose. From the eco-inspired Broken Tiles initiative to events like Dialogues, culturally rich South TVC, and the transformative Building Connections drive, we've expanded our influence. With roll out of new loyalty programs, groundbreaking launches and VC Shield's Superbrand legacy, Somany continues to craft living spaces that inspire and is poised for a future of limitless potential.

INDIAN ECONOMY AND INDUSTRY SCENARIO AND OUTLOOK

Economy

In financial year 2024-25, the Indian economy maintained its growth momentum, with an estimated GDP expansion of 6.4% against 8.2% in financial year 2023-24. This robust performance was underpinned by substantial infrastructure investments and growing consumer aspirations. Despite global headwinds, India's economy demonstrated resilience, supported by solid domestic fundamentals and proactive policy measures. Key contributors to this growth include ongoing structural reforms, rapid digital transformation and accelerated infrastructure development. Strategic government initiatives, steady consumer demand, and a gradually improving labor market have also played a pivotal role in reinforcing economic stability. The sustained performance of the agriculture and service sectors, coupled with stable private consumption and macroeconomic strength, further reinforces India's long-term growth potential.

The continued focus on infrastructure investments would act as a catalyst for broader economic development. Moreover, urbanization remains a cornerstone of India's growth strategy, with initiatives like the Smart Cities Mission and Pradhan Mantri Awas Yojana (PMAY) fostering large-scale housing construction and urban infrastructure development benefiting the real estate sector.

Looking ahead to financial year 2025-26, the economic outlook remains positive, even amid global uncertainties such as geopolitical tensions and trade disruptions. Domestically, continued private sector investment, improving consumer confidence and rising corporate wages are expected to be central drivers of growth. Rural demand is poised for recovery, supported by a rebound in agriculture, easing food inflation and a favorable macroeconomic climate.

Industry

The Indian tile industry has faced yet another challenging year, marked by continued softness in the domestic market and a sharp decline in export volumes. Despite these headwinds, the outlook remains optimistic, supported by the Government's robust infrastructure push and sustained investments in the real estate sector.

One of the key drivers of this optimism is the Pradhan Mantri Awas Yojana - Urban 2.0, which is playing a transformative role in the affordable housing segment. By targeting the needs of economically weaker sections (EWS), low-income groups (LIG), and middle-income groups (MIG) in urban areas, the initiative is turning the vision of 'Housing for All' into a tangible reality. Backed by government subsidies, public-private partnerships, and a commitment to sustainable, energy-efficient housing, the scheme is reshaping urban living for millions.

India's ongoing urbanization is also a major catalyst. As infrastructure improves and job opportunities grow, real estate development is gaining momentum not just in Tier-I cities but increasingly in Tier-II and Tier-III towns, which are emerging as vibrant new growth hubs.

The commercial real estate segment remains especially dynamic, driven by a steady rise in office space leasing and the growing popularity of co-working environments and premium business centers. Projections indicate that by 2047, nearly half of India's population will live in urban areas, significantly increasing demand for residential, office, and retail spaces.

Moreover, the shift in tastes and needs have been well contemplated by the tile industry and embraced innovation with open arms. Manufacturers are aligning with evolving consumer preferences by introducing advanced solutions that prioritize both design and functionality. The development of anti-viral, anti-static, and germ-resistant tiles reflects a growing emphasis on hygiene and wellness in built environments. Meanwhile, advances in digital printing and the growing popularity of large-format tiles are enabling unprecedented levels of customization, empowering consumers to personalize their spaces in creative and meaningful ways.

DIVIDEND

The Board of Directors of your Company, after considering the Company's performance and keeping in view the Dividend Distribution Policy, has recommended a final dividend @ 150% i.e. Rs 3 per equity share of the face value of Rs 2/- each similar to the final dividend of Rs 3 per equity share of the face value of Rs 2/- each @150% in the previous year. This represents a payout ratio of 14.36% as against 11.85% in the previous year. This recommendation is subject to the approval of the Members at the ensuing 57^th Annual General Meeting ("AGM") of the Company.

DIVIDEND DISTRIBUTION POLICY

Pursuant to Regulation 43A of Listing Regulations the Dividend Distribution Policy is available on the website of the Company at the web link: Dividend Distribution Policy.

RESERVES

During the year under review, no amount has been transferred to any reserve.

PUBLIC DEPOSITS

During the year under review, your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

SHARE CAPITAL

As on 31 March, 2025, the Authorized Share Capital of the Company stood at Rs 32,30,00,000/- divided into 16,15,00,000 equity shares of Rs 2/- each.

The Issued, Subscribed and Paid-up Equity Share Capital of the Company as on 31 March, 2025 was Rs 8,20,19,210/- divided into 4,10,09,605 equity shares of Rs 2/- each.

During the year under review, 4,083 equity shares of face value of Rs 2/- each were allotted on 29 October, 2024 pursuant to exercise of Employee Stock Options under the ESOP Plan 2021 and 1,902 equity shares of face value of Rs 2/- each were allotted on 06 February, 2025 pursuant to exercise of Employee Stock Options under the ESOP Plan 2023, consequently increasing the Issued, Subscribed and Paid-up Equity Share Capital of the Company from Rs 8,20,07,240/- to Rs 8,20,19,210/-.

SUBSIDIARY / ASSOCIATE / JOINT VENTURE COMPANIES

During the year, the Board of Directors reviewed the affairs of its subsidiaries and associate companies. In accordance with Section 129(3) of the Companies Act, 2013, the consolidated financial statements of the Company, incorporating financials of its subsidiaries and associate companies as stated in Annexure-1, which forms part of this Annual Report, have been prepared. Your Company does not have any material subsidiary.

Investments during the Year

Sudha Somany Ceramics Private Limited

During the year under review, the Company further invested Rs 390 Lakhs in M/s Sudha Somany Ceramics Private Limited ("SSCPL"), a Subsidiary of the Company, towards the acquisition of equity shares by way of Rights Issue on 16 August, 2024 and also invested Rs 1,020 Lakhs towards the acquisition of 11% Cumulative Redeemable Preference Shares of Rs 10/- each by way of Rights Issue on 26 March, 2025. The total investment in SSCPL increased from Rs 3,367.50 Lakhs to Rs 4,777.50 Lakhs.

Clean Max Ananta Private Limited

During the year under review, the Company further invested Rs 375.71 Lakhs in M/s Clean Max Ananta Private Limited ("CMAPL"), an Associate of the Company, towards the acquisition of equity shares by way of Rights Issue on 10 April, 2024. The total investment in CMAPL increased from Rs 0.49 Lakhs to Rs 376.20 Lakhs.

Divestments during the Year Amora Tiles Private Limited

During the year under review, the Board of Directors of the Company in their meeting held on 15 January, 2025, had approved to sell the entire shareholding held by the Company in Amora Tiles Private Limited ("ATPL"), subsidiary company. The Company held 53.04 Lakh equity shares aggregating to 51% shareholding and vide termination agreement dated 04 February, 2025. The Company has divested its entire equity shareholding in ATPL on 31 March, 2025, thereby ATPL ceased to be a subsidiary company. However, in terms of the applicable provisions of Indian Accounting Standards, the Company did not exercise significant influence or control on decisions of the ATPL with effect from 01 December, 2024.

Acer Granito Private Limited

During the year under review, the Board of Directors of the Company in their meeting held on 15 January, 2025, had approved to sell the Company's entire equity stake in Acer Granito Private Limited ("AGPL"), associate company. The Company holds 14.60 Lakh equity shares aggregating to 26.05% of the total paid-up capital of AGPL. The Company entered into a Share Purchase Agreement ("SPA") dated 04 February, 2025 to sell its entire shareholding in AGPL. The proposed sale of shares is expected to be completed within 15 months from the date of execution SPA. However, in terms of the applicable provisions of Indian Accounting Standards, the Company does not exercise significant influence or control on decisions of the AGPL with effect from 01 December, 2024.

In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements along with related information of the Company and audited accounts of each of its subsidiaries, are available on Company's website at https:// www.somanyceramics.com/. These documents will also be available for inspection at the registered office of the Company at 2, Red Cross Place, Kolkata - 700001, India between 3:00 p.m. and 5:00 p.m. during the working days till the date of ensuing Annual General Meeting (AGM).

The statement required under Section 134 of the Companies Act, 2013 in respect of the Subsidiary, Associates and Joint Venture Companies in the form AOC-1 is provided at Annexure - 1 to this report, which comprises performance and financial position of each of Subsidiaries, Associates and Joint Ventures. For additional details, refer para on Subsidiary Companies in the Corporate Governance Report, which forms part of this Annual Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

All contracts/ arrangements/ transactions entered by the Company during FY 2024-25 with related parties were on an arm's length basis and in the ordinary course of business. During the year, pursuant to approval of shareholders dated 12 August, 2024, under Regulation 23 of the Listing Regulations, your Company entered into Material Related Party Transaction with M/s Sudha Somany Ceramics Private Limited, subsidiary company. Further, approval of the Audit Committee was sought for all related party transactions. Certain transactions which were repetitive in nature were approved through omnibus route.

All related party transactions were in compliance with the applicable provisions of the Companies Act 2013 and Listing Regulations. Details with respect to transaction(s) with the Related Party(ies) entered into by the Company during the reporting period are disclosed in the accompanying Financial Statements and the details pursuant to clause (h) of Section 134(3) of Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Form AOC-2 which is annexed as Annexure - 2.

Your Directors draw attention of the shareholders to the Financial Statements which set out related party disclosures. A Policy on Related Party Transactions as approved by the Board has been uploaded on the Company's website at the weblink: Related Party Transactions Policy.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The disclosure pursuant to Section 134(3)(g) of the Companies Act, 2013 regarding Particulars of Loans, Guarantees and Investments covered under Section 186 of the Companies Act, 2013 are provided in the notes to Financial Statements (Standalone) forming part of this Annual Report.

RISK MANAGEMENT

The Company has a structured Risk Management framework in place in accordance with Section 134(3)(n) of the Companies Act, 2013. The Board has formed a Risk Management Committee to frame, implement and monitor the risk management plan for your Company. Risk Management Policy of the Company is also formulated and necessary controls have been reviewed and put in place from time to time to strengthen it further.

The Risk Management system is quite elaborative and is established to identify, assess and prioritize risks that needs to be minimized, monitored and mitigated. These measures help in reducing and controlling the impact of adverse events and maximize the opportunities of realization. Major risks are identified systematically and mitigated on a continuous basis.

The Risk Management Policy as approved by the Board has been uploaded on the Company's website at the weblink: Risk Management Policy.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to Sections 124 and 125 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), the amount of dividend, if not claimed for a consecutive period of seven years from the date of transfer to Unpaid Dividend Account of the Company, is liable to be transferred to Investor Education and Protection Fund.

Further, all the shares in respect of which dividend has remained unclaimed for seven consecutive years or more from the date of transfer to Unpaid Dividend Account shall also be transferred to the demat account of IEPF Authority. The said requirement does not apply to shares in respect of which there is a specific order of Court, Tribunal or Statutory Authority, restraining any transfer of the shares.

In the interest of the shareholders, the Company sends periodical reminders to the shareholders to claim their dividend in order to avoid transfer of dividends/shares to IEPF Authority. During the year under review, notice in this regard was also published in the newspapers. The details of unclaimed dividend and the list of shareholders whose shares are liable for transfer to the IEPF Authority are uploaded on the Company's website.

In light of the aforesaid provisions, the unpaid/ unclaimed dividend which was declared for the year ended 31 March, 2018 is due for transfer to IEPF on or after 30 September, 2025.

During the period under review, the Company transferred 48,458 Equity Shares of Rs 2/- each against dividend of the year 2017, which remained unclaimed for a period of seven consecutive years, to Investor Education and Protection Fund pursuant to Section 124 (6) of the Companies Act, 2013 within the scheduled time.

Further, a Dividend amount of Rs 8,44,797.60 /- which remained unclaimed against dividend of the year 2017, was transferred to IEPF pursuant to Section 124 of the Companies Act, 2013 within the scheduled time.

STATEMENT ON COMPLIANCE OF APPLICABLE SECRETARIAL STANDARDS

Your Directors state that they have devised proper systems to ensure compliance with the provisions of applicable Secretarial Standards i.e. Secretarial Standard on Meetings of the Board of Directors ("SS-1") and on General Meetings ("SS-2") as issued and amended, from time to time by the Institute of Company Secretaries of India ("ICSI") in terms of Section 118(10) of the Act and that such systems are adequate and operating effectively.

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of the knowledge and belief of the Directors of the Company and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(3) (c) and Section 134 (5) of the Companies Act, 2013:

a) in the preparation of the annual accounts for the year ended 31 March, 2025, the applicable accounting standards read with requirements set out under Schedule III to the Act, had been followed with proper explanation and there are no material departures from the same;

b) they have selected such accounting policies, applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March, 2025 and of the profit of the Company for the year ended on that date.

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

d) the annual accounts have been prepared on a going concern basis.

e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The list of Directors and Key Managerial Personnel at the end of the financial year under review is as under:

Mr. Manit Rastogi (DIN: 00370998) was appointed as Non- Executive Independent Director for a period of 5 years with effect from 15 May, 2024 to 14 May, 2029 and Mr. Zubair Ahmed (DIN: 00182990) was appointed as Non- Executive Independent Director for a period of 5 years with effect from 01 October, 2024 to 30 September, 2029.

In the opinion of the Board, Mr. Manit Rastogi and Mr. Zubair Ahmed, Non - Executive Independent Directors possess required experience, integrity, expertise and relevant proficiency.

Mr. Siddharath Bindra (DIN: 01680498), completed his second and final term and ceased to be Non- Executive Independent Director of the Company with effect from 25 May, 2024.

Mr. Salil Singhal (DIN:00006629) and Mr. Ravinder Nath (DIN: 00062186) completed their second and final term and ceased to be Non- Executive Independent Director(s) of the Company with effect from 12 August, 2024.

Further, in accordance with the provisions of Companies Act, 2013, Mr. Abhishek Somany (DIN: 00021448), Managing Director & CEO of the Company shall retire at the ensuing Annual General Meeting of the Company and being eligible has offered himself for re-appointment. The Board has recommended his re-appointment to the Members at the ensuing Annual General Meeting of the Company.

The disclosures required pursuant to Regulation 36 of the Listing Regulations and the Secretarial Standard on General Meeting ('SS-2') are given in the Notice of 57^th AGM.

DECLARATION OF INDEPENDENCE

All Independent Directors of the Company have given requisite declarations under Section 149(7) of the Companies Act 2013, ("Act") that they meet the criteria of independence as laid down under Section 149(6) of the Act alongwith Rules framed thereunder, Regulation 16(1)(b) of Listing Regulations and have complied with the Code of Conduct of the Company as applicable to the Board of Directors and Senior Managerial Personnel. In terms of Regulation 25(8) of the Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence. The Company has received confirmation from all the Independent Directors of their registration on the Independent Directors Database maintained by the Indian Institute of Corporate Affairs, in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

The Independent Directors of the Company have complied with the Code for Independent Directors as prescribed in Schedule IV to the Act. In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are persons of high integrity and repute. They fulfill the conditions specified in the Act as well as the Rules made thereunder and are independent of the management.

BOARD EVALUATION

Pursuant to the provisions of the Act and SEBI LODR, 2015, the evaluation has been carried out by the Board, Nomination and Remuneration Committee (NRC) and by the Independent Directors. The Company has devised a formal process for annual evaluation of performance of the Board, its Committees and Individual Directors including Independent Directors. The process provides that the performance evaluation shall be carried out on annual basis.

During the year, the Board has carried out an annual evaluation of its own performance, individual Directors including Independent Directors (excluding the Director being evaluated) and its Committees. Board evaluation was carried out on the basis of questionnaire, prepared after considering various inputs received from the Directors, covering various aspects revealing the efficiency of the Board's functioning such as development of suitable strategies and business plans, size, structure and expertise of the Board and their efforts to learn about the Company and its business, obligations and governance.

Performance evaluation of every Director was carried out by the Board and Nomination and Remuneration Committee on parameters such as appropriateness of qualification, knowledge, skills and experience, time devoted to Board deliberations and participation in Board functioning, extent of diversity in the knowledge and related industry expertise, attendance and participations in the meetings and workings thereof and initiative to maintain high level of integrity and ethics.

In a separate meeting of Independent Directors, performance of Non- Independent Directors, the Board as a whole and the Chairman was evaluated, taking into account the views of Executive and Non- Executive Directors.

The performances of Committees were evaluated on parameters such as whether the Committees of the Board are appropriately constituted, Committees have an appropriate number of meetings each year to accomplish all of its responsibilities, Committee Members maintain the confidentiality of their discussions and decisions. Committee conducts a self-evaluation at least annually and make periodically reporting to the Board along with its suggestions and recommendations.

Performance evaluation of Independent Directors was carried out on parameters such as Director upholds ethical standards of integrity, the ability of the Director to exercise objective and independent judgment in the best interest of Company, the level of confidentiality maintained. The Directors expressed their satisfaction with the evaluation process.

The Board found the evaluation satisfactory and no observations were raised during the said evaluation in current year as well as in previous year.

NOMINATION AND REMUNERATION POLICY

Your Company has formulated the Nomination and Remuneration Policy ("NRC Policy") for its Directors, Key Managerial Personnel (KMP), Senior Managerial Personnel and other employees of the Company. This Policy sets out the guiding principles for Nomination and Remuneration Committee of the Company for recommending to the Board the appointment and remuneration of the Directors, KMR Senior Management and other employees of the Company.

The Policy also includes the criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of Section 178 of the Companies Act, 2013.

The Nomination and Remuneration Committee identifies and ascertains the integrity, qualification, positive attributes, expertise and experience of the person for appointment as Director, KMR or at Senior Management level and recommends to the Board their appointment based upon the requirement of the Company. For additional details, refer para "Nomination and Remuneration Committee" in Corporate Governance Report, which forms part of this Annual Report.

Pursuant to the amendments to the Listing Regulations, the Company has revised its existing "NRC Policy" to align it with the requirements of the said Listing Regulations.

The updated NRC Policy is available for the stakeholders on the website of the Company and same is accessible at the web link Nomination and Remuneration Policy.

MEETINGS OF THE BOARD

During the year, 6 (Six) meetings of Board of Directors were held i.e., on 15 May, 2024, 29 May, 2024, 01 August, 2024, 29 October, 2024, 15 January, 2025 and 06 February, 2025. For additional details, please refer to the Report on Corporate Governance, which forms a part of this Annual Report.

COMMITTEES OF THE BOARD

As on 31 March, 2025, the Board has 7 (Seven) Committees:

Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Risk Management Committee, Stakeholders' Relationship Committee, Share Transfer Committee and Company Administrative Committee.

During the year under review, all the recommendations of the Committees were accepted by the Board. A note on the composition of the Board and its Committees, details of Committees including its terms of reference, number of Committee meetings, the attendance of the members during FY 2024-25 and other required details are provided in the Report of Corporate Governance forming part of this Annual Report. The composition and terms of reference of all the Committees of the Board of Directors of the Company are in line with the provisions of the Act and the Listing Regulations.

AUDIT COMMITTEE

The Audit Committee of the Company consists of Mr. Rameshwar Singh Thakur, as Chairman of the Committee and Mr. Vineet Agarwal, Mr. Ghanshyam Girdharbhai Trivedi and Mr. Manit Rastogi as the members of the Committee. For additional details, refer para "Audit Committee" in Corporate Governance Report, which forms a part of this Annual Report.

All the recommendations made by the Audit Committee were accepted by the Board during the year.

AUDITORS

Statutory Auditor

M/s. Singhi & Co., Chartered Accountants, having Firm Registration No.302049E, were re-appointed at the 54^th Annual General Meeting (AGM) held on 23 September, 2022, for a term of 5 consecutive years from the conclusion of 54^th AGM till the conclusion of the 59^th AGM to be held in the year 2027.

The observations of the Auditors, if any, are explained wherever necessary, in the appropriate notes to the accounts. The Statutory Auditor's report does not contain any qualifications, reservations, adverse remarks or disclaimers, which would be required to be dealt with in the Boards' Report.

Pursuant to provisions of the Section 143(12) of the Companies Act, 2013, the Statutory Auditors have not reported any incidence of fraud during the year under review.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act, read with the rules made thereunder, the Board re-appointed M/s Pinchaa & Co., Company Secretaries, to undertake the Secretarial Audit of your Company for FY 2024-25. The Secretarial Audit Report for the year under review is provided as Annexure - 3 of this report.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. Pursuant to the provisions of Section 143(12) of the Act, the Secretarial Auditor has not reported any incidence of fraud during the year

Further, pursuant to amended Regulation 24A of Listing Regulations, and subject to the approval of the Members being sought in the ensuing AGM, the Board of Directors has appointed M/s Pinchaa & Co., Company Secretaries (Firm Reg. No. P2016RJ051800) as Secretarial Auditors to undertake the Secretarial Audit of your Company for the first term of five consecutive financial years commencing from 01 April, 2025, till 31 March, 2030. M/s Pinchaa & Co., Company Secretaries have confirmed that they are not disqualified to be appointed as Secretarial Auditors and are eligible to hold office as Secretarial Auditors of the Company.

Internal Auditors

Your Board of Directors had appointed M/s. Grant Thornton Bharat LLP (LLPIN: AAA-7677), to act as the Internal Auditors of the Company for FY 2024-25 and for providing the Internal Audit Report for the financial year ended 31 March, 2025 pursuant to Section 138 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014.

Further, the Board on recommendation of Audit Committee has re-appointed M/s. Grant Thornton Bharat LLP, (LLPIN: AAA-7677), to act as the Internal Auditors of the Company for the FY 2025-26.

ANNUAL RETURN

Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act, 2013, the Company has placed a copy of the Annual Return as at 31 March, 2025 on its website at the weblink: Annual Return.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company has in place a Corporate Social Responsibility Policy ("CSR Policy") in accordance with the provisions of Section 135 of the Companies Act, 2013 read with The Companies (Corporate Social Responsibility Policy) Rules, 2014 on recommendation of Corporate Social Responsibility Committee ("CSR Committee") and approval of the Board of Directors of the Company.

The CSR Committee undertakes CSR activities in accordance with its CSR Policy which is uploaded on the Company's website at www. somanyceramics.com at the web link: CSR Policy.

During the year under review, the 2% of the average net profit, as calculated pursuant to the provisions of Companies Act, 2013, to be spent for CSR expenditure in FY 2024-25 was Rs 254.35 Lakhs and the total amount spent by the Company on CSR activities was Rs 254.40 Lakhs. The detailed report on CSR activities is enclosed as Annexure - 4 to this report.

INTERNAL CONTROL SYSTEM

The Company has an effective Internal Control System in place considering the size, scale and complexity of the operations. The internal control is supplemented by the detailed internal audit program, review by management and the Audit Committee and documented Policies, SOPs, Guidelines and Procedures. The Internal Audit monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all the locations of the Company and also concurrently reviewing the major activities at transaction level.

INTERNAL FINANCIAL CONTROL

The Company has an adequate Internal Financial Control (IFC) System in accordance with the Section 134(5)(e) of the Companies Act, 2013 for ensuring the orderly and efficient conduct of its business including adherence to company policies safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information. The standard controls defined in the IFC framework are reviewed by the Internal Auditors, External Consultants and Management concurrently to strengthen the existing processes and activities of the Company by way of formulating new guidelines and incorporating necessary changes in the SOP when needed.

HUMAN RESOURCE (HR)

Somany Ceramics Limited, consistently strived to provide an immersive and enriching experience for the employees. Vision of becoming the best employer in the industry has driven the Company to new heights and enabled to achieve the prestigious Great Place to Work? certification. This milestone reflects the Company's unwavering commitment to excellence and focus on continuous improvement in all aspects of the employee experience.

This year, several initiatives were introduced which were aimed at creating a more supportive and empowering environment for the employees to thrive.

Driving Open Communication and Strengthening Ground Connect Focus Group Discussions: Monthly Focus Group Discussion Sessions have been implemented, where employees can share their insights and ideas directly with the HR Team. These discussions act as skip-level meetings, ensuring that voices from all levels of the organization are heard and considered in decision-making.

Town Halls: Open communication and direct engagement with the employees through quarterly Town Hall meetings led by MD & CEO are prioritized. These meetings are not just about sharing updates but also an opportunity for employees to engage directly with senior leadership, ask questions, and provide feedback.

Employee Experience Survey: This platform enables employees across locations and levels to share their honest feedback on various aspects of their workplace experience. These insights helped to identify key focus areas, enhance engagement, and shape a more inclusive and responsive work environment.

Revolutionizing Onboarding Experience

Structured New Joiner Connect - The Company implemented a monthly interactive session which provides new employees with an opportunity to engage directly with the Business Head and the HR Head and share their learnings, provide and seek feedback from the senior leadership team. This initiative fosters early alignment with the organization's values and vision, while also promoting open communication from the outset of the employee lifecycle.

Buddy Program - As part of Company's commitment to a smooth and engaging onboarding experience, Buddy Program has been implemented to support new employees during their initial three months with the organization. Each new joiner is assigned a dedicated Buddy-an experienced team member who provides guidance, shares insights about the Company culture, and helps the new hire navigate their role and work environment.

Building Engagement Beyond Work

This year, employee engagement gained strong momentum across locations with vibrant celebrations of Diwali, Independence Day, Christmas, Children's Day, and Women's Day, promoting unity and inclusivity. The 'Kalakriti' painting competition, involving the children of employees brought added excitement. Individual birthday wish card and work anniversary celebrations were introduced, which further personalized the employee experience.

Appreciation Cards - non-monetary appreciation cards are a small but meaningful way to acknowledge team members for their unique efforts. Appreciation cards are provided in all offices of Somany which allows peers, supervisors, and team members to recognize and appreciate each other's contributions. From 01 July, 2024 to 07 July, 2024, appreciation week was celebrated, bringing a heartfelt wave of gratitude across the organization, as employees enthusiastically exchanged appreciation cards.

Recognizing Excellence

Launched "The Idea Factory" - a company-wide competition aimed at nurturing a culture of innovation by inviting employees across all levels to share impactful ideas. The initiative focuses on two key areas: driving business growth and enhancing systems and processes. Open to all employees, irrespective of role or department, this platform not only encourages idea-sharing but also recognizes and celebrates valuable contributions.

Each year, at Somany, the exceptional contributions of our employees are celebrated, by bestowing the Best Employee Award upon those demonstrating outstanding achievements at Company's Plants, recognizing their efforts that have never gone unnoticed. Additionally, the appreciation extends to those employees and workers who have consistently upheld perfect attendance, displaying steadfast reliability and dedication towards their respective roles and the organization.

This year, the gratitude was also extended to 88 employees who were honored with Long Service Awards, called "Nishtha," for their enduring commitment to the Organization. The award ceremony was conducted at Kadi and Kassar location, where our Chairman & Managing Director and Manging Director & CEO felicitated the awardees. These collective achievements underscore the strength and resilience of the team, driving the Company forward to continue to uphold its values and pursue excellence in all endeavors.

Focused approach towards Learning and Development

Somany Ceramics believes that continuous learning is the key to individual and organizational growth. With a focused approach towards Learning and Development, this year, a special emphasis was placed on product training for our sales teams, conducting numerous sessions across all verticals for the front-line and mid-level management employees. Product Training sessions were launched in FY 2024-25 to deepen product knowledge and strengthen market readiness.

In addition, leadership coaching was introduced by an eminent professional for our senior management. The senior leadership team is supported through one-on-one coaching by certified professionals, helping them drive performance, lead with impact, and navigate change effectively.

Well Being Initiatives for Employees

As part of ongoing commitment to employee well-being, at Somany, a wide range of wellness initiatives have been introduced, aimed at supporting the physical, emotional, and financial health of the workforce have been introduced.

To ensure access to quality healthcare, the Company has partnered with reputed hospitals and diagnostic service providers like Fortis, Max, Dr. Lal PathLabs and others, offering affordable medical services. Regular health check-up camps are organized across our offices and plants, complemented by health awareness talks by medical experts and free virtual consultations for employees. Additionally, to enhance lifestyle wellness, corporate tie-ups with brands like Samsung and Lifestyle have been done, to allow the employees to avail exclusive discounts and offers.

There are special benefits such as the Empathy and Suraksha Fund, Group Term Life Insurance and Future Service Gratuity to provide a strong safety net for employees and their families during times of need.

The Company's wellness initiatives included International Yoga Day, weekly Chair Yoga sessions at the Head Office, and Marathons at Kadi and Kassar plants.

The Company is honoured to receive the Haryana State Safety, Health and Welfare Award for Best First Aid Arrangements from the Labour Department, Haryana Government this year.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a Vigil Mechanism/ Whistle Blower Policy in line with Regulation 22 of the Listing Regulations and in terms of Section 177(9) of the Companies Act, 2013. The policy enables the stakeholders (including Directors and employees) to report their concern about unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct.

The Policy provides adequate safeguards against victimization of whistle blower and also enables their direct access to the Chairman of the Audit Committee in exceptional cases. The protected disclosures, if any, reported under this Policy are appropriately and expeditiously investigated by the Chairman. The details of the Whistle Blower Policy are also explained in the Corporate Governance Report and the Policy is also available on the website of the Company at the weblink: Vigil Mechanism Policy.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report for the year under review, as stipulated under the Listing Regulations, is presented in a section forming part of this Annual Report.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo as required under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 forms part of this Board's Report as Annexure - 5.

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided at Annexure - 6.

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the top ten employees and employees drawing remuneration in excess of the limits as provided in the said rules are provided at Annexure - 7.

EMPLOYEE STOCK OPTION

Somany Ceramics Employee Stock Plan 2021

Somany Ceramics Employee Stock Plan 2021 was approved by the shareholders of the Company on 07 April, 2022 through Postal Ballot for grant of 4,23,794 Options. Out of the said total options, 3,50,102 options were granted to 33 eligible employees on 29 April, 2022 in Grant - 1 and 1,01,107 options were granted to 13 eligible employees on 07 February, 2023 in the Grant - 2.

During the year under review, due to resignation / superannuation of few eligible employees, 45,237 options lapsed/forfeited from Grant - 1 only under the Somany Ceramics Employee Stock Plan 2021.

Somany Ceramics Employee Stock Plan 2023

Somany Ceramics Employee Stock Plan 2023 was approved by the shareholders of the Company on 25 August, 2023 at the Annual General Meeting for grant of 12,74,226 Options. Out of the said total options, 1,36,576 options were granted to 26 eligible employees on 08 November, 2023 in Grant 1, 2 & 3, and 3,201 options were granted to 6 eligible employees on 29 May, 2024 in Grant-4 and 1,03,420 options were granted to 24 eligible employees on 06 February, 2025 in Grant-5&6.

During the year under review, due to resignation of few eligible employees, total 4,868 options lapsed /forfeited from Grant - 2 only under the Somany Ceramics Employee Stock Plan 2023.

With regard to the above, the disclosures as stipulated under the SEBI Regulations and Companies Act, 2013 as on 31 March, 2025 are provided in Annexure - 8 to this report. The details are also available on the website of the Company at the weblink: ESOP Disclosure FY 2024-25.

CORPORATE GOVERNANCE

Pursuant to regulation 34 read with Schedule V of the Listing Regulations, a certificate obtained from the Statutory Auditors confirming compliance with conditions of Corporate Governance of Listing Regulations and a report on Corporate Governance forms part of this Report as Annexure - 9.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

In compliance with the Listing Regulations, the Company has prepared a Business Responsibility and Sustainability Report for FY 2024-25 which includes non - financial disclosures from an Environmental, Social and Governance ("ESG") perspective and are sought under Nine (9) Principles of National Guidelines on Responsible Code of Conduct for measuring the performance in areas of business responsibility and sustainability and the same forms part of this Annual Report.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT,2013

Your Company has a robust Policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace and matters connected therewith or incidental thereto covering all the aspects as contained under "The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013". The Company has complied with the provision relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the period under review, the Company has not received any complaint of sexual harassment.

OTHER DISCLOSURES

I. There were no significant material orders passed by the Regulators / Courts during FY 2024-25 which would impact the going concern status of the Company and its future operations.

II. There were no material changes and commitments in terms of Section 134(3)? of the Companies Act, 2013, affecting the financial position of the Company.

III. The maintenance of cost records as specified by the Central Government under sub-Section (1) of Section 148 of the Companies Act, 2013 is not applicable to the Company.

IV. There are no proceedings initiated/ pending against your Company under the Insolvency and Bankruptcy Code, 2016 which materially impact the business of the Company.

V There has been no change in the nature of business of the Company.

VI. There was no instance of one-time settlement with any Bank or Financial Institution.