Dear Shareholders

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

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

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

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

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

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

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

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

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

During the year 2024-25, the Company has also paid Interim Dividend of Rs. 5/- (i.e. 500%) per equity share of Rs. 1 each fully paid-up aggregating to Rs. 79.64 Crores thereby making the total Dividend (Interim Dividend & Final Dividend) of 7 9/- per equity share of Rs. 1/- each fully paid-up (previous year Rs. 12/- per equity shares of Rs. 1/- each fully paid-up) aggregating to Rs. 143.35 Crores.

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

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

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

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

As on 31^st March, 2025, the Authorised Share Capital of the Company is Rs.154,10,00,000 (Rupees One Hundred Fifty Four Crores Ten Lacs only) divided into 77,00,00,000 (Seventy Seven Crores) Equity Shares of Rs. 1/- each (Rupee One Only) aggregating to Rs. 77,00,00,000 (Rupees Seventy Seven Crores Only) and Rs.77,10,000 (Seventy Seven Lacs Ten Thousand) Redeemable Preference Shares of Rs.100/- each (Rupees One Hundred Only) aggregating to Rs. 77,10,00,000 (Rupees Seventy Seven Crores Ten Lacs Only).

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

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

Kajaria Employee Stock Option Scheme 2015 (‘ESOP Scheme 2015') was approved by the shareholders of the Company on 7^th September, 2015 for issue and allotment of options exercisable into not more than 10.62.000 equity shares of Rs.1 each (Originally the ESOP Scheme 2015 was for 5,31,000 equity shares of Rs.2 each) to eligible employees of the Company and its subsidiaries. The shareholders of the Company had further increased the stock options under the ESOP Scheme 2015 from 10,62,000 to 15,87,000 equivalent to 15,87,000 equity shares of Rs. 1/- each by addition of 5.25.000 options on 24^th March, 2022.

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

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

In 2^nd Tranche and 3^rd Tranche under the ESOP Scheme 2015, total 1,42,190 (55,690 options during the year 2024-25, 55,500 options during the year 2023-24 and 31,000 options during the year 2022-23) have been forfeited/lapsed due to resignation/retirement of ESOP Option holders.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

During the year under review, Mr. Rajender Mohan Malla has also been appointed as the Independent Director of the Company for the period of five consecutive years effective from 1^st April, 2024 upto 31^st March, 2029 and the shareholders of the Company have accorded their approval(s) through Postal Ballot on 20^th June, 2024 for appointment of Mr. Rajender Mohan Malla as the Independent Director of the Company.

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

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

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

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

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

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

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

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

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

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

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

Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s. Chandrasekaran Associates, Company Secretaries, were appointed as the Secretarial Auditors, to undertake the Secretarial Audit of the Company for the year ended 31^st March 2025. The Report of the Secretarial Audit is annexed herewith as Annexure 5.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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