Note No.1 to the financial Statements for the Year ending on 31st March, 2018

Note 1(a). Background of the Company

Our company was originally registered as a Partnership firm as “M/S Vitco Vitrified” dated May 05, 2008 which was then converted into a Joint Stock Company under the name “Vitco Vitrified Private Limited” under the provisions of the Companies Act, 1956 vide certificate of incorporation having CIN: U26914GJ2008PTC053838 dated May 08, 2008 in Gujarat. Subsequently, the name of the Company was changed to “Lexus Granito (India) Private Limited” on June 26, 2010. Further, the company was converted into public limited company i.e. Lexus Granito (India) Limited having CIN: U26914GJ2008PLC053838 vide fresh certificate of incorporation dated April 28, 2017.

The registered office of the company is situated Survey No. 800 Opposite Lakhdhirpur Village, Lakhdhirpur Road, Lakhdhirpur, N.H. 8A, Tel. Morbi, Lakhdhirpur, Rajkot-363642, Gujarat, India.

Lexus Granito (India) Limited (the “Company’’) is a limited company incorporated in India under the provisions of the Companies Act 1956. The company is engaged in manufacturing, trading, and marketing of vitrified ceramic tiles and wall tiles in domestic and international market. Recently the company has set up its own wall tile manufacturing unit.

Note 1(b). Notes to Accounts: -

1. The Financial Statements for the year ended on 31st March, 2018 are prepared based on Schedule III of Companies Act, 2013.

2. The financial statements including financial information have been prepared after making such regroupings and adjustments, considered appropriate to comply with the same. As result of these regroupings and adjustments, the amount reported in the financial statements/information may not necessarily be same as those appearing in the respective audited financial statements for the previous year.

3. The Micro Small and Medium Enterprise registered under The Micro small and Medium Enterprise Development Act 2006 have been taken based on the list of MSME creditors provided by the management. However, as the Company has not received any claims in respect of such interest and as such, no provision has been made in the books of accounts.

4. Related Party Disclosure(AS18):-

Related party transactions are reported as per AS-18 of Companies (Accounting Standards) Rules, 2006, as amended, in the below mentioned table:

5. Accounting for Taxes on Income (AS 22) Deferred Tax liability/Asset in view of Accounting Standard - 22: - “Accounting for Taxes on Income” as at the end of the year/period is reported in the below mentioned table:-

The Company has recognized deferred tax liability on depreciation as per books of accounts and depreciation allowable as per Income Tax Act 1961.

The net deferred tax liability is classified as non-current liabilities and disclosed on the face of the Balance Sheet.

6. Amounts in the financial statements are rounded off to nearest rupee. Figures in brackets indicate negative values.

7. Unsecured loans, advances from customers, advances recoverable in cash or in kind, investments and various other parties are subject to confirmations.

8. The management of the company has carried out an exercise to ascertain impairment of Fixed Assets, if any, In the opinion of the management of the company there are no indication of impairment of assets as at 31/03/2018 and therefore no effect of impairment is required to be given in the books of accounts.

9. Cash balance is taken as valued & certified by management.

10. Pending Litigations and Criminal Proceedings:-

As details provided by management and further verified by us, apart from those as stated below there are no outstanding litigations, suits, criminal or civil prosecutions, proceedings or tax liabilities against/by the Company, directors, promoters and group entities and there are no defaults, non-payment of statutory dues, over-dues to banks/financial institutions, defaults against banks/financial institutions by Company, default incretion of full security as per terms of issue/other liabilities, no amount so we to small scale undertakings or any other creditor exceeding1 lakh, which is outstanding for more than 30 days, no proceedings initiated for economic/civil/any other offences (including past cases where penalties may or may not have been awarded and irrespective of whether they are specified under paragraph(I) of Part1 of Schedule V to the Companies Act) other than unclaimed liabilities of our Company and no disciplinary action hasbeen taken by SEBI or any stock exchange against the Company, Promoters, directors and group entities.

Further, there are no show-cause notices/claims served on Company, promoters, directors or group entities from any statutory authority/revenue authority that would have a material adverse effect on the business.

a. Outstanding Statutory Dues Related to Indirect Tax: -

The total amount outstanding dues relating to indirect tax which are verified through the online portals of GST or payable in the books of accounts are attached in the below mentioned table: -

Refer Notes 2.1 to 2.5 below

Note 1.1 During the year, the company has made an initial Public Offer (IPO) of 57.60 Lacs Equity Shares of Rs.10/- each at premium of Rs.35/- per share for cash aggregating to Rs. 2592.00 Lacs and shares of the company has been listed on National Stock Exchange Ltd (NSE Emerge) on 23rd August, 2017.

Note 1.2 Rights, preferences and restrictions attached to the equity shares

The Company has only one class of shares referred to as equity shares having a par value of 10/-. Each holder of equity shares is entitled to one vote per share.

Note 1.3 Dividend declared/paid

The Company has not declared and paid any dividends during the year.

b. Outstanding Statutory Dues Related to Direct Tax:-

The total amount outstanding relating to direct tax which are verified through the online portals of income tax and traces portal or payable in the books of accounts are attached in the below mentioned table: -

Note 2.1 Additional Information to Secured/Unsecured long term borrowings

The Long term Portion of term loans are shown under long term borrowings and current maturities of long tem borrowings are shown under the current liabilities are per disclosure requirements of the revised schedule III.

Note 2.2 Details of securities and terms of repayments

I. Unsecured

(A). Bonds/Debenture

The company has issued 640 rated, listed, taxable, transferable, redeemable non convertible unsecured debenture of face value of Rs.100000 each. The debenture carries 14.50% Rate of interest and payable Half yearly. The debenture are redemeable in two installments of Rs.3.20 Cr due on 08.04.2020 and 12.06.2020

II. Secured

(B). Term Loans

(a). Banks

1. State Bank Of India - Note 4(A)(a)(l to 4)

The company has taken 4 term loans from State Bank Of India amounting as T/L No.l for Rs.22.75 Cr, T/L No.2 for Rs. 3.15 Cr, T/L No.3 for Rs.15 Cr and T/L No.4 for Rs.21 Cr for setting up company’s Plant situated at Surey No.800, Off NH-8A, Lakhdirpur Road, Village Ghutu, Morbi. The Loans are secured on EQM of company Factory Land & Building, Directors and Shareholders personal immovable property and Corporate gaurantee of Lexus Ceremic Pvt Ltd. The Loans are further secured by lien of company mutual funds held in State Bank Of India. The Loans carries ROI of 10.70%. The Loans are repayable in 60 Months from Sanction and last Installment is due on March 2022.

2. HDFC Bank Limited -Note 4(A)(a)(5)

Secured on hypothecation of BMW Car owned by the Directors of the company as specified in the schedule annexure to the loan agreement executed on 20.09.2015. The Loan is repayable in 36 Monthly Installments of Rs. 79,800/-. The Period of Maturity w.r.t balance sheet date is 5 months.

3. HDFC Bank Limited -Note 4(A)(a)(6)

Secured on hypothecation of Mercedes Benz Car owned by the Directors of the company as specified in the schedule annexure to the loan agreement executed on 20.12.2017. The Loan is repayable in 36 Monthly Installments of Rs. 85,450/-. The Period of Maturity w.r.t balance sheet date is 2 years and 9 months.

3. HDFC Bank Limited -Note 4(A)(a)(7)

Secured on hypothecation of Mercedes Benz Car owned by the Directors of the company as specified in the schedule annexure to the loan agreement executed on 16.06.2015. The Loan is repayable in 36 Monthly Installments of Rs. 2,39,520/-. The Period of Maturity w.r.t balance sheet date is 2 months.

(b). Others

1. HDFC Bank Limited -Note 4(A)(b)(l)

Unsecured Business Loan as specified in the schedule annexure to the loan agreement executed on 28.03.2017. The Loan is repayable in 36 Monthly Installments of Rs. 1,74,554/-. The Period of Maturity w.r.t balance sheet date is 2 years and 1 months.

2. Jainson Finlease Ltd -Note 4(A)(b)(2)

Unsecured Business Loan as specified in the schedule annexure to the loan agreement executed on 27.03.2017. The Loan is repayable in two equal bullet payments in 38th and 41th month from the date of execution of loan agreement. The Period of Maturity w.r.t balance sheet date is 3 and 0 months.

3. Jainson Finlease Ltd -Note 4(A)(b)(3)

Unsecured Loan as specified in the schedule annexure to the loan agreement executed on 23.01.2017. The Loan is repayable in 24 Monthly Installments of Rs. 14,97,723/-. The Period of Maturity w.r.t balance sheet date is 11 months.

4. Mas Financial Services Ltd -Note 4(A)(b)(4)

Unsecured Loan as specified in the schedule annexure to the loan agreement executed on 01.06.2017. The Loan is repayable in 35 Monthly Installments of Rs. 12,20,892/-. The Period of Maturity w.r.t balance sheet date is 2 years and 2 months.

5. Visu Leasing and Finance Pvt Ltd -Note 4(A)(b)(5)

Unsecured Loan as specified in the schedule annexure to the loan agreement executed on 19.01.2017. The Loan is repayable in 24 Monthly Installments of Rs. 9,98,482.04/-. The Period of Maturity w.r.t balance sheet date is 1 years and 11 months.

Note 2.2 Details of Long term Borrowings guaranteed by some of directors and others

The terms loan with State Bank Of India has been guaranteed by all the directors of the company

Note 3.1 “For the disclosure of the suppliers under the Micro, small and medium enterprises Development Act, 2006 refer note no.24.3.

4.1 The Schedule III has become effective from 1 April, 2014 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.

Details of consumption of imported and indugenous items for the current year is provided by management. Company has not maintained proper record of indigenous and import material consumption therefore it is not possible to verify raw material consumption into indigenous and import materials for the current year and to ascertain bifercation into import and indigenous for the last year.