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Directors Report of Euro Ceramics Ltd.

Mar 31, 2015

To

The Members,

Euro Ceramics Limited

The Directors hereby present the 13th Annual Report together with the Financial Statements of the Company for the financial year ended March 31, 2015

FINANCIAL RESULTS: (Rs. in Lacs)

Particulars Year ended Year ended March 31, 2015 March 31, 2014

Revenue from operations 4,971.09 7,662.85

Other Income 271.09 676.95

Total Income 5,242.18 8,339.80

Less: Total Expenditure 4,940.93 8,713.83

Earnings Before Interest, Depreciation and Tax 301.25 (374.03)

Less : Interest and other finance expenses 69.95 164.35

Less: Depreciation 2,882.80 2,961.60

Profit/(Loss) Before Tax and Extraordinary Item (2,651.50) (3,499.98)

Less: Extraordinary Item 3,552.17 -

Profit/(Loss) Before Tax (6,203.67) (3499.98)

Less: Provision of Tax - (1.76)

Net Profit/(Loss) After Tax (6,203.67) (3,498.22)

Add: Balance Brought forward from the previous year (18,906.99) (15,408.77)

Balance Carried forward to Balance Sheet (25,110.66) (18,906.99)

FINANCIAL REVIEW:

The Company achieved a turnover of Rs. 4,971.09 Lacs lower by Rs. 2,691.76 Lacs compared to previous year due to limited working capital and liquidity crunch.

The brief financial highlights are given above and discussed in detail in Management Discussion and Analysis as part of this report.

SHARE CAPITAL :

There was no change in share capital of the Company during the year 2014-15.

OPERATIONAL REVIEW:

a. Tiles Division, Aluminum Extruded Section and Realty Division :

The Company's vitrified tiles plant and Aluminum Extruded Sections plants were continued to be in-operative during the year under review due to working capital shortages and did not generat any significant revenue except for sale of old stock in hand. The Wall tiles plant was also in-operative for a major part of the year.

b. Calcareous Tiles/Mable Division :

The Company presently operating this division on limited scale due to liquidity crunch. The marble division has contributed around 50% in the total revenue with operating capacity utilization of around 12% p.a.

c. Sanitaryware Division:

The turnover of santiaryware division for the FY 2014-15 is increased by Rs. 793.48 Lacs from Rs. 1,665.48 Lacs to Rs.2,458.97 Lacs, showing a growth of 48%. The production of quality product has kept the Company as preferred OEM for many leading players. The Capacity utilization of the division increased to around 48% during the year from 20% in the previous financial year.

DIVIDEND:

In view of losses during the year under review, your Directors do not recommend any dividend for the financial year 2014- 15.

REFERENCE TO BIFR:

The Company on the basis of the audited accounts for the financial year ended as on March 31, 2013, and being mandatory, filed the reference U/s 15(1) of Sick Industrial Companies (Special Provisions) Act, 1985 before the Hon'ble Board for Industrial & Financial Reconstruction (BIFR). The above reference has duly been registered by the Registrar of Hon'ble BIFR and hearings of which are in the process for determination of sickness.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

In accordance with the provisions of Section 152 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014 and the Articles of Association of the Company, Mr. Pratik Kumar Shah, Whole-time Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible offered himself for re-appointment.

Mrs. Usha Jaysheel Kotian was appointed as an Additional Director of the Company with effect from March 28, 2015 and she holds office upto the date of the ensuing Annual General Meeting. The Company has received Notice along with requisite deposit from a member of the Company under Section 160 of the Companies Act, 2013 proposing her candidature for the office of Independent Director of the Company.

The Board of Directors recommend the above appointment /re-appointment.

The Company has received declaration from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under Section 149 (6) of the Companies Act, 2013 and under Clause 49 of the Listing Agreement entered into with the Stock Exchanges.

Brief resume of the Directors proposed to be appointed/re- appointed as stipulated under Clause 49 of Listing Agreement with the Stock Exchanges are given in the Notice convening the 13th Annual General Meeting.

Pursuant to the provisions of Section 203 of the Companies Act, 2013, Mr. Paresh Kanji Shah was appointed as Chief Financial Officer (CFO) of the Company w.e.f. June 1, 2014.

MEETINGS OF THE BOARD:

The Board meets at regular intervals to discuss and decide on Company/ business policy and strategy apart from other business. A tentative annual calendar of the Board and Committee Meetings is informed to the Directors in advance to facilitate them to plan their schedule and to ensure meaningful participation in the meetings. However, in case of a special and urgent business need, the Board's approval is taken by passing resolutions through circulation, as permitted by law, which are confirmed in the subsequent Board meeting.

The notice of Board meeting is given well in advance to all the Directors of the Company. The Meetings of the Board are held in Mumbai, Maharashtra. The agenda of the Board / Committee meetings is circulated 7 days, prior to the date of the meeting. The agenda for the Board and Committee meetings includes detailed notes on the items to be discussed at the meeting to enable the Directors to take an informed decision.

The Board met five times during the year, the details of which are given in the Report on Corporate Governance. The intervening gap between the two consecutive meetings was within the period prescribed under the Companies Act, 2013.

AUDIT COMMITTEE AND ITS COMPOSITION

The Audit Committee of the Company reviews the reports to be submitted with the Board of Directors with respect to auditing and accounting matters. It also supervises the Company's internal control and financial reporting process.

As on March 31, 2015, the Audit Committee comprised of Mr. Mahendra Modi and Mr. Karan Rajput, Independent Directors and Mr. Nenshi L. Shah, Chairman and Managing Director of the Company.

Mr. Mahendra Modi is the Chairman of Audit Committee of the Company.

AUDITORS:

M/s. Deepak Maru & Co., Chartered Accountants, Mumbai (FRN: 115678W), the Statutory Auditors of your Company, holds office upto the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received a letter from them regarding their willingness to act as Statutory Auditors of the Company. The Company has also received a certificate from them to the effect that their re-appointment, if made, would be in compliance with the conditions as prescribed under Section 139 of the Companies Act, 2013 and they satisfy the criteria as provided under Section 141 of the Act.

Your Directors recommend the appointment of M/s. Deepak Maru & Co., Chartered Accountants, Mumbai as the Statutory Auditors of the Company to hold office from the conclusion of the ensuing Annual General Meeting until the conclusion of next Annual General Meeting of and to audit financial statements for the financial year 2015-16.

AUDITORS' REPORT:

With regards to the observations from the Statutory Auditors in their report (on standalone financials), which are self explanatory, your Directors would like to reply as under:

I. The financial statement have been prepared on a "going concern" basis, inspite the fact that the Company's financial facilities/arrangements have expired and the same are overdue for repayment and the networth of the Company fully eroded and the lenders and creditors have initiated legal proceedings against the Company for recovery.

Your Directors would like to state that the Company is operational and Manufacturing Marble and Sanitaryware Products and employed more than 200 manpower. The Company is also making serious efforts in negotiating with the banks and resolving the issues with banks. The management has taken and been taking all diligent steps under legal advice, to defend the Company in all the litigation. Considering the ample opportunities in the market and growth drivers for the industry per say, your Directors are optimistic about the turnaround of the Company with the infusion of the long term funds and with support of the lenders. The Company can derive a comprehensive package under BIFR for the secured and unsecured lenders with potential future earning plans, for resolution of its debts.

II. The Company has not provided for interest on financing facilities amounting to Rs. 8,758.47 Lacs for the year ending March 31, 2015. Had the same been provided, the loss for the year ending March 31, 2015, would have increased by Rs. 8,758.47 Lacs. The corresponding liabilities would also have increased by Rs. 8,758.47 Lacs as at March 31, 2015.

The Company on the basis of registration filed u/s. 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985, before the Hon'ble Board for Industrial & Financial Reconstruction, and the hearings for which are in process for determination of sickness and on the basis of negotiation with the lenders for reduction in interest, rephasement in terms of borrowings etc., has not provided for interest to the tune of Rs. 8,758.47 Lacs, (calculated based on last sanction letters in hand) on financing facilities, for the year ending March 31, 2015.

III. The Company has not provided for impairment or diminishing value of its assets/investment as per 'Accounting Standard 28 – Accounting for Impairment of Assets' as notified under the Companies (Accounting Standards) Rules, 2006 read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. The effect of such Impairment or diminishing value has not been quantified by the management and hence the same is not ascertainable.

The Company has made the provisions for diminution in the value of its investments/assets wherever required. Management has a policy to maintain the assets and keep them in working condition, so that its value does not get affected in long run. The management is optimistic about realizing the value of its Assets / Investments nearest to its carrying value, and there is no further diminution in the value of its assets/investment other than depreciation / amortization provided for.

IV. There has been delay in transferring unclaimed dividend amounting to Rs. 25,303/- pertaining to financial year 2006- 07 into the Investor Education and Protection Fund, by the Company during the year ended March 31, 2015.

Your management would like to state that the delay in transferring the amounts to the Investor Education and Protection Fund was unintentional and due to oversight.

V. In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the register maintained under section 189 of the Act, here are no stipulations made regarding repayment of principal amount and interest. Hence we are unable to comment as to regularity of repayments of principal and interest amount.

Your directors would like to state that the Loans and Advances are given in the normal course of business to a firm where your Company is a partner with majority share.

VI. The Company has accumulated losses at the end of the financial year and at the immediately preceding financial year and the Company has defaulted in repayment of loans and interest to the banks.

Your directors would like to state that the loss is mainly on account of Depreciation and provisions made for diminution in the value of the investment/ assets. However the Company was able to generate marginal cash profit of Rs. 231.30 Lacs during the year under review. The Company had working capital shortages during the year and was unable to run all the plants. Further the plants which were operational during the year were also run at lower capacity due to liquidity crunch, despite of the demand of the products in the market. Due to inadequate cashflows from the operations of the Company, there were defaults in the repayment of the loans and interest to the Banks. However the management is hopeful with the changing economic scenario, of arriving at a comprehensive business restructuring along with the debt realignment proposal with the lenders under BIFR.

VII. The Company has given the guarantee for loans taken by its subsidiary from bank. The terms and conditions of the same are not prejudicial to the interest of the Company. The said subsidiary has been continuously incurring losses and its net worth has been fully eroded and there is substantial doubt whether the said subsidiary would be able to repay its liabilities or realize its assets.

Your directors would like to state that the management of the subsidiary Company is hopeful of reviving its business with the changing economic scenario and is negotiating with the lender for amicable settlement of its dues.

INTERNAL AUDIT:

The Company has appointed M/s. Rahul Khanderia & Associates, Chartered Accountants, Mumbai, as its Internal Auditor. However, due to pre-occupation they resigned and M/s. J H Ghumara & Co. Chartered Accountant were appointed as Internal Auditor for the financial year 2014-15. The Internal Auditors have given their report to the Audit Committee.

Based on the report of internal audit function the Board takes corrective action in the specific areas observed and thereby to strengthen the controls on significant audit observations, corrective actions thereon are presented to the Audit Committee of the Board.

DIRECTORS' RESPONSIBILITY STATEMENT:

Your Directors, to the best of their knowledge and belief and according to the information and explanations obtained by them and as required under Section 134(3) (c) of the Companies Act, 2013 state that:

a. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that period;

c. the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the directors have prepared the annual accounts on a going concern basis;

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

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

PUBLIC DEPOSITS:

During the year under review, the Company has not accepted any deposits within the meaning of Section 73 and 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.

EXTRACT OF ANNUAL RETURN:

An extract of Annual Return in Form MGT 9 is appended to this Report as Annexure I.

LISTING OF SHARES:

The Equity shares of the Company are listed on National Stock Exchange of India Ltd. (NSE) and BSE Ltd. (BSE). The Company has paid the requisite listing fees to the said stock exchanges for the financial year 2015-16.

REMUNERATION POLICY:

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and determination of salary of Directors, Senior Management Personnel and any other employees of the Company. The Remuneration Policy is stated in the Report on Corporate Governance.

RISKS AND AREAS OF CONCERN:

The Company has laid down a well-defined Risk Management Policy covering the risk mapping, trend analysis, risk exposure, potential impact and risk mitigation process. A detailed exercise is being carried out to identify, evaluate, manage and monitoring of both business and non- business risk. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1) OF THE COMPANIES ACT, 2013:

All Related Party Transactions entered during the year were in Ordinary Course of the Business and on Arm's Length basis. No Material Related Party Transactions, were entered during the year by your Company. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) of the Companies Act, 2013 in Form AOC-2 is not applicable.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:

The details of loans, guarantee or investment made by your Company under Section 186 of the Companies Act, 2013 during the financial year 2014-15 are given under Notes to Accounts of financial statements.

ANNUAL PERFORMANCE EVALUATION BY THE BOARD:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has adopted a Policy for evaluation of the performance of the Directors, Key Managerial Personnel and Senior Management Personnel. Based on the consideration of various parameters, gathered from all Directors, the performance of the Board and individual Directors is evaluated. Besides, the Board has also developed a system to evaluate the performances of each of executive and non-executive and Independent Directors. Such questions are prepared considering the business of the Company and the expectations that the Board have from each of the Directors and the value addition provided by them.

The Policy, inter alia, provides the criteria for performance evaluation of Directors consisting of;

i. Attendance of the directors at the Meetings and the quality of contribution at Board and it's Committee/s meetings;

ii. Participation of such director in the Company's business and attribution to the strategic plans of the Management;

iii. Relationship with other Board members and other officials of the Senior Management;

iv. Sharing of knowledge and experience for the benefit of the Company.

During the year under review, a separate meeting of the Independent Directors was held for evaluation of performance of non-independent Directors, performance of the Board as a whole and performance of the Chairman.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND Company'S OPERATIONS IN FUTURE:

There was no order passed by any regulator or court or tribunal, which impacts the going concern status of the Company or will have bearing on Company's operations in future.

WHISTLE BLOWER POLICY:

The Company has a Vigil mechanism / Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. The mechanism also provides for adequate safeguards against victimization of directors and employees who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in the exceptional cases. The details of the Vigil Mechanism Policy is explained in the Corporate Governance Report and also posted on the website of the Company. We affirm that during the financial year 2014-15, no employee or Director was denied access to the Audit Committee.

SECRETARIAL AUDIT REPORT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Secretarial Audit Report received from M/s. Manish Ghia & Associates, Practising Company Secretaries, Mumbai is appended as Annexure – II and forms part of this report.

With regards to the observations from the Secretarial Auditors in their report, which are self explanatory, your Directors would like to reply as under:

(a) As required under section 203 of the, Act the Company is yet to appoint a Company Secretary;

The Company is in process of appointment of Whole time Company Secretary.

(b) the Company has extended loans/advances which are interest free in nature and there are no stipulation as to its repayment;

Your directors would like to state that the Loans and Advances are given in the normal course of business to a firm where your Company is a partner with majority share.

(c) on account of default in payment of interest/repayment of deposits in the earlier financial years by the Company, some of the directors of the Company are disqualified to act as directors under section 164 of the Act;

The Company is facing liquidity crunch due to losses in the Company since couple of years. The Company has also filed for registration u/s. 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985, before the Hon'ble Board for Industrial & Financial Reconstruction, and the hearings for determination of sickness are in process and will arrive at the comprehensive package to settle the secured and unsecured creditors.

(d) in respect of outstanding deposits as at March 31, 2014, the Company was required to file Form DPT-3 latest by June 30, 2014 which is yet to be filed;

(e) in respect of unpaid/unclaimed amount of dividend /interest / matured deposits, the Company is yet to file Form 5INV relevant to the financial year ended March 31, 2014 and also to upload the same on its website; the said Form 5INV is required to be filed within 90 days from the date of Annual General Meeting which was held on September 30, 2014;

(f) there has been a delay of 408 days in transferring amounts (Rs. 25303/-), required to be transferred to the credit of Investor Education and Protection Fund by the Company during the year ended March 31, 2015; and

(g) as required under clause 32 of the Listing Agreement, the details of inter corporate loans have not been disclosed in the Company's annual report for the year ended March 31, 2014.

For point numbers (d), (e), (f) and (g), in the absence of Whole time Company Secretary the compliances were missed out inadvertently.

REPORT ON CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement entered into with the stock exchanges, the following have been made a part of the Annual Report and are attached to this report:

a. Management Discussion and Analysis

b. Report on Corporate Governance.

c. Auditors' Certificate regarding compliance of conditions of Corporate Governance

COMMITTEES OF THE BOARD:

During the year, in accordance with the Companies Act, 2013, the Board re-constituted some of its Committees. There are currently three Committees of the Board, as follows:

1) Audit Committee

2) Stakeholders' Relationship Committee

3) Nomination and Remuneration Committee

Details of all the Committees along with their charters, composition and meetings held during the year, are provided in the "Report on Corporate Governance", a part of this Annual Report.

PARTICULARS OF REMUNERATION:

During the year under review, no employee was in receipt of remuneration exceeding the limits as prescribed under provisions of Section 197 of the Companies Act, 2013 and Rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Disclosure with respect to the remuneration of Directors and employees as required under Section 197 of the Companies Act, 2013 and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been appended as Annexure III to this Report.

INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has zero tolerance for sexual harassment at workplace and adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. There was no complaint on sexual harassment during the year under review.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

As required under Section 134(3)(m) of the Companies Act, 2013, read with the Companies (Accounts) Rules 2014, the information relating to the foregoing matters is given as under:

Details regarding Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo is given in Annexure IV.

SUBSIDIARY COMPANIES:

Euro Merchandise (India) Limited is a Wholly owned Subsidiary of the Company. The Company does not have any Associate Company. M/s. Subhnen Sanitaryware Pvt Ltd., a wholly owned subsidiary of the Company has been voluntarily striked off under section 560 of the Companies Act, 1956 w.e.f. March 31, 2014.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing salient features of the financial statements of the Wholly owned Subsidiary in Form AOC 1 is attached as Annexure V to this report.

APPRECIATION:

Your Directors acknowledges with gratitude and wish to place on record, their deep appreciation of continued support and co-operation received by the Company from the various Government authorities, Shareholders, Bankers, Lenders, Business Associates, Dealers, Customers, Financial Institutions and Investors during the year.

Your Directors place on record their deep appreciation of the dedication and commitment of your Company's employees at all levels and look forward to their continued support in the future as well.

By Order of the Board of Directors

Place: Mumbai Nenshi L. Shah

Date: August 14, 2015 Chairman & Managing Director


Mar 31, 2014

Dear members,

The Directors hereby present the 12th Annual Report together with the Financial Statements of the Company for the financial year ended March 31,2014

FINANCIAL RESULTS:

(Rs. in Lacs) Particulars Year ended Year ended March 31,2014 March 31,2013

Income:

Revenue from operations 7,662.85 8,860.99

Other Income 676.95 51.81

Total Income 8,339.80 8,912.80

Less: Total Expenditure 8,713.83 11,642.21

Earnings Before Interest, Depreciation and Tax (374.03) (2,729.41)

Less : Interest and other finance expenses 164.35 4,989.38

Less: Depreciation 2,961.60 2,981.20

Profit/(Loss) Before Tax (3,499.98) (10,699.99)

Less: Provision for Tax (1.76) -

Net Profit/(Loss) After Tax (3,498.22) (10,699.99)

Add: Balance Brought forward from the previous year (15,408.77) (4,708.78)

Balance Carried forward to Balance Sheet (18,906.99) (15,408.77)

FINANCIAL REVIEW:

The Company''s performance for the year was under stress due to liquidity crunch and the working capital shortages. The total turnover for the year declined from Rs. 8,860.99 Lacs in FY 2012-13 to Rs. 7,662.85 Lacs in FY 2013-14. Severe liquidity crunch along with the pressure form secured and unsecured creditors, has affected the performance of the Company.

The brief financial highlights are given above and discussed in detail in Management Discussion and Analysis as part of this report.

OPERATIONAL REVIEW:

a. Tiles Division:

Vitrified Tiles''. This division of the Company was not operational for major part of the year, due to working capital shortages and liquidity mismatch, inspite of the demand in the market.

Wall Tiles: This division of the Company continued to be non operational for the entire year due to working capital shortage.

Calcareous Tiles (Agglomerated Marble): This division has contributed majority of the revenue during the year under review. The total revenue for the year, netoftaxes was Rs.3,939.72 Lacs as against Rs. 1,136.47 Lacs during previous year.

b. Aluminum Extruded Sections:

This division of the Company continued to be non operational for the entire year due to working capital shortage.

c. Sanitaryware Divisions:

The Company'' sanitaryware division has shown a marginal improvement during the year, as the turnover was increased to Rs. 1,665.48 Lacs in FY 2013-14, from Rs. 1,429.10 Lacs in FY 2012-13. The Company''s sanitaryware are best in quality. The Company maintains the standard in the quality, which has made it preferable OEM for many leading players. The Capacity utilization of the division was around 20%, showing slightly improvement over last year of 16%.

d. Realty Divisions:

The Company has not done any business transaction in the realty division during the year, due to liquidity crisis.

DIVIDEND:

In view of losses during the year under review, your Directors do not recommend any dividend for the financial year 2013-14.

REFERENCE TO BIFR:

In the financial year 2013-2014, the Company on the basis of the audited accounts for the financial year ended as on March 31, 2013, and being mandatory, filed the reference U/s 15(1) of Sick Industrial Companies (Special Provisions) Act, 1985 before the Hon''ble Board for Industrial & Financial Reconstruction (BIFR). The above reference has duly been registered by the Registrar of Hon''ble BIFR and hearings of which are in the process for determination of sickness.

CAPITAL STRUCTURE:

During the year under review, the Company has issued and allotted 51,59,705 Equity Shares of Rs. 10/- each at a price of Rs. 24.42/- per share (including premium of Rs. 14.42/- per share) upon conversion of even number of Compulsorily Convertible Debentures which were issued as per the terms of Letter of Approval (LOA) issued by Corporate Debt Restructuring (CDR) cell, dated October 29, 2011,on preferential basis upon completion of its tenure.

Post allotment of Equity Shares as detailed above, the paid up share capital of the Company is increased to Rs. 33,73,77,170/- divided into 3,37,37,717 Equity Shares of Rs. 10/- each.

DIRECTORS:

In accordance with the provisions of Section 152 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014 and the Articles of Association of the Company, Mr. Nenshi L. Shah, Managing Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible offered himself for re-appointment.

Mr. Karan Rajput and Mr. Amit Nandu were appointed as Additional Directors of the Company with effect from January 24, 2014 and they hold office upto the date of the ensuing Annual General Meeting. The Company has received Notice under Section 160 of the Companies Act, 2013, along with requisite deposit, from a member proposing their candidature for the office of Directors (Independent) of the Company.

In terms of the provisions of Section 149 and 152 of the Companies Act, 2013 read with Companies (Management & Administration) Rules, 2014, which become effective from April 1, 2014, an Independent Director of a Company can be appointed fora term of 5 consecutive years and shall not be liable to retire by rotation. To comply with the above provisions, it is proposed to appoint Mr. Mahendra Modi, Mr. Karan Rajput and Mr. Amit Nandu as Independent Directors of the Company to hold office as such up to March 31,2019, who shall not be liable to retire by rotation.

The Company has received declarations from all Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement entered with the Stock Exchanges. Your Board recommends for their appointment as Independent Directors of the Company in terms of the provisions of the Companies Act, 2013.

Mr. Talakshi Nandu and Mr. Kumar P. Shah, Whole-time Directors and Mr. Amit G. Shah, Independent Director of the Company resigned from the Directorship of the Company w.e.f. April 25, 2013. Thereafter, Mr. Anil Mandevia and Mr. Ajit Nalwaya, Independent Directors of the Company resigned from the Directorship of the Company w.e.f. January 24, 2014 and Mr. Paresh K. Shah, Whole- time Director of the Company resigned from the Directorship of the Company w.e.f. March 28, 2014. The Board place on record its sincere appreciation for their valuable contribution made during their tenure as Directors of the Company.

Brief resume of the Directors proposed to be appointed/re-appointed as stipulated under Clause 49 of Listing Agreement with the Stock Exchanges are given in the Notice convening the 12th Annual General Meeting.

AUDITORS:

M/s. Deepak Maru & Co., Chartered Accountants, Mumbai (FRN: 115678W), the Statutory Auditors of your Company, hold office upto the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received a letter from them regarding their willingness to act as Statutory Auditors of the Company. The Company has also received a certificate from them to the effect that their re-appointment, if made, would be compliance with the conditions as prescribed under Section 139 of the Companies Act, 2013 and they satisfy the criteria as provided under Section 141 of the Act.

Your Directors recommend the re-appointment of M/s. Deepak Maru & Co., Chartered Accountants, Mumbai as the Statutory Auditors of the Company to hold office from the conclusion of the ensuing Annual General Meeting until the conclusion of next Annual General Meeting of and to audit financial statements for the financial year 2014-15.

AUDITORS'' REPORT:

With regards to the observations from the Statutory Auditors in their report (on standalone financials), your directors would like to state that:

I. The financial statement have been prepared on a "going concern" basis, inspite the fact that the Company''s financial facilities/arrangements have expired and the same are overdue for repayment and the net worth of the Company fully eroded.

Your directors would like to state that considering the growth opportunities available in the ceramic industry and with the appropriate management of working capital, the Company can revive its operations to appropriate capacity and can generate revenue. The Company can derive a comprehensive package under BIFR for the secured and unsecured lenders with potential future earning plans, for resolution of its debts. With the changing economic scenario the management is optimistic about the revival the Company and hence has prepared the financial statements on a going concern basis.

II. The Company has not provided for interest on financing facilities amounting to Rs. 6,426.05 Lacs for the year ending March 31,2014. Had the same been provided, the loss for the year ended March 31, 2014, would have increased by Rs.6,426.05 Lacs. The corresponding liabilities would also have increased by Rs.6,426.05 Lacs as at March 31,2014.

The Company on the basis of registration filed u/s. 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985, before the Hon''ble Board for Industrial & Financial Reconstruction, and the hearings for which are in process for determination of sickness; has not provided for interest on financing facilities amounting to Rs. 6,426.05 lacs for the year ending March 31,2014.

III. The Company has not provided for impairment or diminishing value of its assets/investment as per ''Accounting Standard 28 - Accounting for Impairment of Assets'' as notified under the Companies (Accounting Standards) Rules, 2006 read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. The effect of such Impairment or diminishing value has not been quantified by the management and hence the same is not ascertainable.

The management has a policy to maintain the assets and keep them in working condition, so that its value does not get affected in long run. The management is optimistic about realizing the value of its Assets/ Investments nearest to its carrying value, and there is no further diminution in the value of its assets/investment other than depreciation/amortization.

IV. No provision for depletion in the value of the investment and loans and advances made/given by the Company to its wholly owned subsidiary company M/s. Euro Merchandise (India) Ltd.

Your directors would like to state that the said investment is strategic and long term in nature. The management is hopeful of turning around of business of the subsidiary company and recovery of the loans and advances given to the subsidiary. Hence in the opinion of the management, no provision is necessary for the depletion in the value of the investment.

V. All the directors are disqualified as on March 31, 2014from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Act.

Your directors would like to state that disqualification was on account of the default in repayment of deposit and interest there on due to liquidity crisis in the Company.

VI. The Company has accumulated losses at the end of the financial year and incurred cash loss during the year and the Company has defaulted in repayment of loans and interest to the banks.

Your directors would like to state that the Company had working capital shortages during the year and was unable to run all the plants. Further the plants which were operational during the year were also run at lower capacity due to liquidity crunch, despite of the demand of the products in the market. The increasing cost and unabsorbed fixed costs resulted in the cash losses during the year and in the course of time there were defaults in the repayment of the loans and interest to the Banks. However with the changing economic scenario, the growing ceramic industry and increasing foreign investments in India, the management is hopeful of arriving at a comprehensive business restructuring along with the debt realignment proposal with the lenders under BIFR.

CONSOLIDATED FINANCIAL STATEMENTS:

The Ministry of Corporate Affairs (MCA) vide General Circular No.2/2011 No. 51/12/2007-CL-lll dated February 8, 2011 read with General Circular No. 3/2011 and No. 5/12/2007-CL-lll dated February 21, 2011 has granted a general exemption from attaching the Balance Sheet of subsidiary companies with holding Company''s Balance Sheet, if the holding Company presents in its Annual Report the Consolidated Financial Statements duly audited by its Statutory Auditors. The Company is publishing Consolidated Financial Statements in the Annual Report and accordingly, is not attaching the Balance Sheets of its wholly owned subsidiary companies viz. Euro Merchandise (India) Limited (EMIL) and *Subhnen Sanitaryware Private Limited, with its Balance Sheet. Further, as required under the said circular, a statement of financial information of the subsidiary companies is given in ''Annexure- II'' attached to this Report.

* Subhnen Sanitaryware Pvt. Ltd., wholly-owned subsidiary of the Company is under the process of striking off.

The Annual Accounts of the subsidiary companies will be available on the Company''s website www.eurovitrified.com and shall also be made available to the shareholders of the Company on request and will also be kept open for inspection at the Registered Office of the Company and of the subsidiary companies during the office hours on all working days and during the Annual General Meeting.

In accordance with the requirements of Accounting Standard -AS 21 issued by the Institute of Chartered Accountants of India, the Consolidated Financial Statements and Auditors'' Report thereon are published in this report.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956, the Directors confirm to the best of their knowledge and belief that:

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

2. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as March 31, 2014 and losses of the Company for the year ended on that date;

3. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

4. They have prepared the annual accounts on a ''Going Concern'' basis.

CORPORATE GOVERNANCE:

The Report on Corporate Governance along with the Auditors'' Certificate regarding Compliance of the conditions of Corporate Governance and also a Management Discussion and Analysis Report pursuant to Clause 49 of the Listing Agreement have been made a part of the Annual Report and are annexed to this report.

PUBLIC DEPOSITS:

The Company has neither accepted nor renewed any deposit from the public within the meaning of Section 58Aand 58AA of the Companies Act, 1956 read with Companies (Acceptance of Deposits) Rules, 1975 during the year ended March 31,2014.

PARTICULARS OF EMPLOYEES:

No employee was in receipt of remuneration exceeding the limits as prescribed under the provisions of Section 217(2A) of the Companies Act 1956 read with Companies (Particulars of Employee) Rules 1975 as amended, hence no such particulars are furnished.

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars required under Section 217(1)(e) of the Companies Act, 1956 regarding Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo for the year under review are given in Annexure -1 attached to this Report.

PERSONNEL:

Your Company maintained cordial relations with the employees during the year under review. The Company continued its endeavour to grow the learning curve through regular training programmes for its team members enabling them to attain higher productivity and superior quality.

APPRECIATION:

Your Directors acknowledges with gratitude and wish to place on record, their deep appreciation of continued support and co- operation received by the Company from the various Government authorities, Shareholders, Bankers, Lenders, Business Associates, Dealers, Customers, Financial Institutions and Investors during the year.

Your Directors place on record their deep appreciation of the dedication and commitment of your Company''s employees at all levels and look forward to their continued support in the future as well.





By Order of the Board of Directors

Place: Mumbai Nenshi L. Shah Date: August 14, 2014 Chairman & Managing Director


Mar 31, 2013

Dear Members,

The Directors hereby present Eleventh Annual Report of the Company for the year ended March 31,2013.

FINANCIAL RESULTS:

The highlights of the financial results for the year ended March 31,2013 are as follows:

(Rs. in Lacs)

Particulars Year ended Year ended

March 31,2013 March 31,2012

Income:

Revenue from operations 8,860.99 17,647.54

Other Income 51.81 367.48

Total Income 8,912.80 18,015.02

Less: Total Expenditure 11,642.21 19,729.60

Earnings before Interest,

Depreciation & Tax (2,729.41) (1,714.58)

Less: Interest & other finance expenses 4,989.38 4,646.24

Less: Depreciation 2,981.20 2,923.60

Profit/(Loss) before Tax (10,699.99) (9,284.42)

Less: Provision for Tax - 37.69

Net Profit/(Loss) after Tax (10,699.99) (9,322.11)

Add: Balance Brought forward from the previous year (4,708.79) 4,613.32

Balance carried to

Balance Sheet (15,408.78) (4,708.79)

FINANCIAL PERFORMANCE:

The year under review was adversely affected due to stressed working capital crunch and low off take of the Company''s products by the end user segment. The total revenue from operations declined drastically by 49.78% from Rs.17,647.54 Lacs in FY 2012 to Rs. 8,860.99 Lacs in FY 2013. Cut throat competition and liquidity crisis coupled with the secured and unsecured lenders pressure has affected the manufacturing capacity utilization and there by the profitability. The Company has reported a loss ofRs. 10,699.99 Lacs during the year under review against a loss of Rs. 9,322.11 Lacs of previous year.

The brief financial highlights are given above and discussed in detail in the Management Discussion and Analysis as part of this report.

OPERATIONAL PERFORMANCE:

a) Tile Division:

Tiles Division has three products namely Vitrified Tiles, Wall Tiles and Calcareous Tiles also called Agglomerated Marble.

During the year the Company operated only Vitrified Tiles and the Agglomerated Marble Plant due to availability of limited working capital.

Vitrified Tiles and Agglomerated Marble together contributed Rs.7,431.22 Lacs against the turnover of Rs.14,574.93 Lacs in the previous year, declined due to non availability of the working capital, cut throat competition from unorganized sector and the adverse market conditions, affecting the end user segment.

b) Aluminium Division:

Due to the severe liquidity crunch, low margins, price volatility in metal segment. Company could not run the Aluminum plant during the year.

c) Sanitaryware Division:

The Company is gradually establishing the business and brand name in this segment. The quality product produced by the Company has made a well established and recognized OEM for many Indian and International sanitaryware brand.

The total revenue from this segment is Rs. 1,429.29 Lacs in the current year, declined marginally by 17% against the previous year''s revenue ofRs. 1,729.75 Lacs. The capacity utilization in this division is as low as 16 %, more or less maintaining the level of previous year.

d) Realty Division:

The overall economic slowdown and adverse market conditions along with the problems faced by the real estate segment, the Company has not taken any business exposure in the said segment during the period under review.

DIVIDEND:

In view of losses during the year under review, your Directors do not recommend any dividend for the financial year 2012-13.

POSTAL BALLOT PROCESS:

During the period under review, the Company conducted postal ballot process two times as per the provisions of Section 192Aof the Companies Act, 1956 read with the Companies (Passing of Resolution by Postal Ballot) Rules, 2011 for seeking approval of the members of the Company for various matters. Brief details of the postal ballot process are given here-in-below:

1. Postal Ballot I:

Notice was dispatched on March 31, 2012, for seeking approval of the members of the Company for the following matters:

i. Special Resolution under Section 81 (1A) of the Companies Act, 1956 for issue of 21,49,878 Equity Shares on preferential basis.

ii. Special Resolution under Section 81 (1A) of the Companies Act, 1956 for issue of 52,82,555 Compulsorily Convertible Debentures (CCDs) on preferential basis.

iii. Ordinary Resolution u/s 293(1 )(a) of the Companies Act, 1956, for sell, lease, transfer or dispose of Company''s Sanitary ware Business Undertaking.

The result of the postal ballot was declared on May 3,2012. All the proposed resolutions were passed with requisite majority.

2. Postal Ballot II:

Notice was dispatched on December 6, 2012 for seeking approval of the members of the Company for Ordinary Resolution u/s 293(1) (a) of the Companies Act, 1956, to sell, lease, transfer or dispose of surplus land of the Company at Ankaleshwar, Bharuch, Gujarat.

The result of the postal ballot was declared on January 9, 2013. The proposed resolution was passed with requisite majority.

CAPITAL STRUCTURE:

During the year under review, the Company has issued following securities pursuant to Corporate Debt Restructuring (CDR) package as approved by CDR cell vide its Letter of Approval (LOA) dated October 29,2011:

i. Equity Shares:

21,49,878 Equity Shares ofRs. 10/- each at a price of Rs. 24.42 per share (including premium of Rs. 14.42 per share), fully paid up to ICICI Bank Limited on August 8, 2012 on preferential basis.

ii. Compulsorily Convertible Debentures (CCDs):

41,35,954 2% Compulsorily Convertible Debentures (CCDs) of Rs. 24.42/- each to State Bank of India and 10,23,751 2% Compulsorily Convertible Debentures (CCDs) ofRs. 24.42/- each to Bank of India, issued on August 8,2012 on preferential basis, convertible into even number of Equity Shares having face value ofRs. 10/- each within a period of eighteen months from the date of allotment.

After the allotment of equity shares as detailed above, the paid up share capital of the Company is increased to Rs. 28,57,80,120/- divided into 2,85,78,012 Equity Shares of Rs. 10/-each.

DIRECTORS:

In terms of Section 256 of the Companies Act, 1956, read with Article no. 196 of the Articles of Association of the Company, Mr. Anil Mandevia, Director of the Company retires by rotation at the forthcoming Annual General Meeting and being eligible, has offered himself for re-appointment.

The Board of Directors at its meeting held on February 11,2013 re-appointed Mr. Paresh K. Shah as Whole-time Director of the Company for a further period of 5 (five) years with effect from April 1,2013.

Your Directors recommend for the re-appointment of Mr. Anil Mandevia as Director and approval to the re-appointment of Mr. Paresh K. Shah as Whole-time Director of the Company at the ensuing Annual General Meeting of the Company.

Mr. Talakshi L. Nandu, Mr. Kumar P. Shah, Whole Time Directors and Mr. Amit G. Shah, Independent Director of the Company resigned from the Directorship of the Company w.e.f. April 25, 2013. The Board places on record its sincere appreciation for their valuable contribution extended to the Company during their tenure as Directors of the Company.

STATUTORY AUDITORS:

M/s. Deepak Maru & Co., Chartered Accountants, (FRN: 115678W) Mumbai, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received a letter from them to the effect that their re- appointment, if made, would be within the prescribed limits under Section 224(1 B) of the Companies Act, 1956 and that they are not disqualified for such re-appointment within the meaning of Section 226 of the said Act.

Your Directors recommend their re-appointment as Statutory Auditors of the Company to hold office from the conclusion of the ensuing Annual General Meeting upto the next Annual General Meeting of the Company and to audit financial accounts of the Company for the financial year 2013-2014.

COST AUDITORS:

Pursuant to the provisions of Section 233B of the Companies Act, 1956 and in terms of the Order no. 52/26/CAB-2010 dated June 30, 2011 issued by Central Government, the Company, with the prior approval of the Central Government, has appointed M/s M. S. Saiyed & Co., Cost Accountant as Cost Auditors of the Company for audit of the cost accounting records for the financial year 2012-13.

AUDITORS''REPORT:

With regards to observations made by the Statutory Auditors in their report, your Directors would like to state that;

(i) All the directors are disqualified as on March 31,2013 from being appointed as a director in terms of clause (g) of sub- section (1 )of section 274 of the Act.

Disqualification occurred on account of default in repayment of deposits and interest there on due to liquidity crisis in the Company and to run the plant operations.

(ii) The financial statements of the Company having been prepared on a going concern basis, in spite, the fact of erosion of net worth.

Considering the growth opportunities available in the ceramic industry and with the revival of its business with appropriate working capital management and rescheduling of its debt, the Company is hopeful of its turnaround, hence has prepared the financial statements on a going concern basis.

(iii) No provision for depletion in the value of the investment and loans and advances made/given by the Company to its wholly owned subsidiary company M/s. Euro Merchandise (India) Ltd. (EMIL)

The said investment is strategic and long term in nature. The management is hopeful of turning around of business of the subsidiary company and recovery of the loans and advances given to the subsidiary. Hence in the opinion of the management, no provision is necessary for the depletion in the value of the investment.

(iv) Non compliance in respect of the deposits accepted within the meaning of section 58Aof the Companies Act, 1956.

Due to liquidity crunch and urgent requirements of working capital, the Company has paid higher interest rate then the prescribed rate under the Companies (Acceptance of Deposits) Rules, 1975 to some of the depositors. The Company has implemented the Corporate Debt Restructuring Scheme during the previous year but the operations of the Company are under stress due to various internal and external factors including liquidity crunch, adverse market conditions, economic slowdown and fixed cost burden due to low capacity utilization. Under such situation, the Company could not maintain the liquid asset ratio as required under the said rules.

(v) Accumulated losses, cash loss during the year, erosion of net worth and default in payment to banks for installment and interest dues.

The Company was passing through severe liquidity crunch during the year. The capacity utilization in all the divisions was very low due to non availability of working capital, delay in implementation of CDR package, delay in release of additional working capital by banks, adverse market conditions and price competition. The cost of production was also high due to low capacity utilization, increasing fuel prices and unabsorbed fixed cost. In the course of time the Company incurred cash losses and there has been default in repayment of installments and interest dues to banks. The Directors of the Company are hopeful of turnaround of the business of the Company and to rectify all above in the years to come.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE:

The particulars required under Section 217(1 )(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in'' Annexure - r attached to this Report.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS:

The Ministry of Corporate Affairs (MCA) vide General Circular No.2/2011 No. 51/12/2007-CL-lll dated February 8, 2011 read with General Circular No. 3/2011 and No. 5/12/2007-CL-lll dated February 21,2011 has granted a general exemption from attaching the Balance Sheet of subsidiary companies with holding Company''s Balance Sheet, if the holding Company presents in its Annual Report the Consolidated Financial Statements duly audited by its statutory auditors. The Company is publishing Consolidated Financial Statements in the Annual Report and accordingly, is not attaching the Balance Sheets of its wholly owned subsidiary companies viz. Euro Merchandise (India) Limited (EMIL) and Subhnen Sanitaryware Private Limited with its Balance Sheet. Further, as required under the said circular, a statement of financial information of the subsidiary companies is given in ''Annexure - II" attached to this Report.

The Annual Accounts of the above referred subsidiaries shall be made available to the shareholders of the Company on request and will also be kept open for inspection at the Registered Office of the Company and of the subsidiary companies during the office hours on all working days, except Saturdays.

In accordance with the requirements of Accounting Standard - AS 21 issued by the Institute of Chartered Accountants of India, the Consolidated Financial Statements and Auditors'' Report thereon are published in this report.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, your Directors confirm that:

1. in the preparation of the annual accounts, the applicable accounting standards have been followed along with the proper explanations relating to material departures;

2. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that period;

3. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. they have prepared the annual accounts on a ''Going Concern'' basis.

CORPORATE GOVERNANCE:

A separate section on Corporate Governance Report and a certificate from the statutory auditors of the Company regarding compliance of the conditions of Corporate Governance, as stipulated under Clause 49 of the Listing Agreement with stock exchanges forms a part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

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

PUBLIC DEPOSITS:

Your Company has taken unsecured loan, within the meaning of Public Deposits under Section 58A of the Companies Act, 1956, during the year under review. The Company has filed "Statement in lieu of Advertisement" along with necessary particulars as required with the Registrar of Companies, Maharashtra, Mumbai.

However, due to liquidity crunch and urgent requirement of working capital, the Company has paid higher interest rate then the prescribed rate under the Companies (Acceptance of Deposits) Rules, 1975 to some of the depositors.

The Company has implemented the Corporate Debt Restructuring Scheme during the previous year but the operations of the Company are under stress due to various internal and external factors including, liquidity crunch, adverse market conditions, economic slowdown and fixed cost burden due to low capacity utilization. Under such situation, the Company could not maintain the liquid asset ratio as required under the said rules.

PARTICULARS OF EMPLOYEES:

No employees were in receipt of remuneration exceeding the limits as prescribed under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employee) Rules 1975 as amended, hence no such particulars are furnished.

PERSONNEL:

Your Company maintained cordial relations during the year under review. The Company continued its endeavour to grow the learning curve through regular training programmes for its team members enabling them to attain higher productivity and superior quality.

APPRECIATION:

Your Directors acknowledges with gratitude and wish to place on record, their deep appreciation of continued support and co- operation received by the Company from the various Government authorities, Shareholders, Bankers, Lenders, Business Associates, Dealers, Customers, Financial Institutions and Investors during the year.

Your Directors place on record their deep appreciation of the dedication and commitment of your Company''s employees at all levels and look forward to their continued support in the future as well.

We are deeply grateful to our shareholders for the confidence and faith reposed on us. Your Company looks forward to their continued support in future.



For and on behalf of the Board of Directors

Nenshi L. Shah

Chairman & Managing Director



Place: Mumbai

Date: May 30, 2013


Mar 31, 2012

The Directors hereby present Tenth Annual Report of the Company for the year ended March 31,2012.

FINANCIAL RESULTS:

The highlights of the financial results for the year ended March 31,2012 are as follows:

(Rs in Lacs) Particulars Year ended Year ended March 31,2012 March 31,2011

Income:

Revenue from operations 17,647.54 38,994.45

Other Income 367,48 129.99

Total Income 18,015.02 39,124.44

Less: Total Expenditure 19,729.60 27,367.63

Earnings before Interest, (1,714.58) 11,756.81

Depreciation & Tax

Less: Interests, other 4,646.24 5,737.05

finance expenses

Profit (Loss) before (6,360.82) 6,019.76

Depreciation & Tax

Less: Depreciation 2,923.60 2,855.07

Profit (Loss) before Tax (9,284.42) 3,164.69

Less: Provision for Tax 37.69 76.04

Net Profit (Loss) after Tax (9,322.11) 3,088.65

Add: Balance Brought 4,613.32 1,524.67

forward from the previous year

Surplus carried to (4,708.09) 4,613.32

Balance Sheet

FINANCIAL PERFORMANCE:

During the period under review, several internal and external factors, including slower market growth, downturn in real estate and infrastructure industry and liquidity stress adversely affected the operations of the Company. Further,non availability of working capital funds, pressure from various secured and unsecured lenders, delay in implementation of the re- schedulement and realignment package under the Corporate Debt Restructuring Scheme and cut throat market competition has also affected the operations of the Company. Due to these factors, the total revenues of the Company declined drastically during the year under review in comparison to previous year.

The brief financial highlights are given above and discussed in detail in the Management Discussion and Analysis as part of this report.

Due to these adverse factors, Company incurred the net loss of Rs 9322.11 Lacs during the financial year ended on March 31, 2012, against the net profit of Rs 3088.65 Lacs during the previous financial year.

CORPORATE DEBT RESTRUCTURING:

The economic slowdown, adverse overall market scenario in general and real estate and infrastructure in particular, the slower off take of the Company's products by the end user industry and customers has adversely affected the business of the Company and the Company has suffered significant losses in ceramics business. Due to continued losses, the Company is continuously facing difficulties in managing its cash flows and working capital requirements. In order to correct its working capital position and liquidity challenges arising out of the mismatch of the loan maturities and potential projected earnings, the Company approached the lenders for restructuring of its entire debt for suitable realignment under Corporate Debt Restructuring (CDR) mechanism. The CDR Cell approved the proposal of debt restructuring with super majority of the lenders on September 29, 2011, and issued the Letter of Approval (LOA), based on which, the lenders agreed to the package and signed the Master Restructuring Agreement (MRA) on February 25,2012.

The significant highlights of the package are as under:

- The Cut-off-Date (COD) is April 1,2011.

- The total existing term loan of Rs 335.77 Crores outstanding as on COD is restructured.

- The repayment of principal in 38 structured quarterly installment in stepped up manner starting from October 1, 2011 to March 31, 2021, after considering 6 months moratorium from COD.

- Funding of Interest for a period of 6 months from COD, amounting to Rs 21.20 Crores. Out of which Rs 18.80 Crores to be converted into Equity or Compulsory Convertible Debentures (CCDs). The CCDs to be convertible in to equity within 18 months from the date of allotment.

- The rate of interest is starting from 3.50 % p.a. to 14.00 % p.a. increasing in a stepped up manner till the tenure of debt.

- Carving out working capital irregularities to the tune ofRs 13 Crores into a Working Capital Term Loan, repayable in 34 structured installments with 18 months of moratorium from COD with interest rate as described for other Term Loans.

- Additional working capital loans of Rs 12 Crores and critical capex loan of Rs 5 Crores to be shared by some of the

. lenders.

- The existing security structure is continued and more specifically covered under the MRA.

- The Company to issue Zero Coupon Bonds amounting to Rs 3.85 Crores to one of the lenders for their sacrifices, repayable after March 2021.

CAPITAL STRUCTURE:

Pursuant to the scheme of Demerger as approved by the Hon'ble High Court of Bombay, the Company has allotted 93,28,134 Equity Shares of Rs 10/- each fully paid up to the shareholders of Ethix Realtors Pvt. Ltd. on July 5,2011.

Pursuant to CDR package as approved by CDR cell vide its Letter of Approval (LOA) dated October 29, 2011 as described above, the Company has issued following securities:

i. Zero Coupon Bonds (ZCBs):

385 Zero Coupon Bonds (ZCBs) having face value of Rs 1,00,000/- each aggregating to Rs 3,85,00,000/- to Bank of India on March 27, 2012 and the said Bonds are due for redemption after March 2021.

ii. Equity Shares

21,49,878 Equity Shares ofRs 10/- each at a price ofRs 24.42 per share (including premium ofRs 14.42 per share), fully paid up to ICICI Bank Limited on August 8, 2012 on preferential basis.

iii. Compulsorily Convertible Debentures (CCDs)

41,35,954 2% Compulsorily Convertible Debentures (CCDs) of Rs 24.42/- each to State Bank of India and 10,23,751 2% Compulsorily Convertible Debentures (CCDs) of Rs 24.42/- each to Bank of India, convertible into even number of Equity Shares having face value ofRs 10/- each on August 8, 2012 on preferential basis. The said CCDs are convertible within a period of eighteen months from the date of allotment.

After the allotment of equity shares as detailed above, the paid up share capital of the Company is increased to Rs 28,57,80,120/- divided into 2,85,78,012 Equity Shares of Rs 10/-each.

OPERATIONAL PERFORMANCE:

a) Tiles Division:

Tiles division has three products namely Vitrified Tiles, Wall Tiles and Calcareous Tiles also called Agglomerated Marble. The Company commissioned its wall tiles plant during the year in this division, however being the first year of wall tiles and trial run the performance of wall tile was not upto the expectations.

Tiles division continues to contribute maximum turnover in the Company. Total revenue from this division is Rs 14,574.93 Lacs, which is lower by 27.60% against the last year's turnover. The non availability of working capital and low offtake in calcareous tiles are the reasons of declined turnover.

However Company still hold a remarkable brand and market share in vitrified tiles in the organized sector and confident of revamping its business under this segment in the coming years.

b) Aluminium Division:

The turnover of the Aluminium Extruded Sections was Rs 1,342.85 Lacs in the current financial year. Due to severe liquidity crunch during the year and low margin in this segment, Company could not run the plant for at the fullest capacity. The capacity utilization was less than 50 % for the current financial year.

With availability of the working capital funds and improvement in overall business, this division will be revamp.

c) Sanitaryware Division:

The Company is establishing the business in this segment. The total revenue was Rs 1,729.75 Lacs in the current financial year. The Company made a renowned name with its quality in this segment. The Company is OEM for many of the well known Indian and International sanitaryware brands, which is an acknowledgment of the Company's quality product and facility. In the coming year the Company is proposing to do a Joint Venture in this division with approvals of the appropriate authorities.

d) Realty Division:

The Company has ventured in to real estate segment in the previous financial year. However there is no business in the year under review. The poor performance of the sector and slowdown in real estate and construction industry due to various external factors including tight monetary environment, the Company had not taken any risk exposure in the said sector in the year under review. The Company is open for grabbing the opportunities in the coming future considering the calculated risk involved in the sector.

DIVIDEND:

In view of losses during the year under review, your Directors do not recommend any dividend for the financial year 2011-12.

POSTAL BALLOT PROCESS:

During the period under review, the Company conducted postal ballot process as per the provisions of Section 192A of the Companies Act, 1956, notice of which was dispatched on March

27,2012, for seeking approval of the members of the Company for the following matters:

i. Special Resolution under Section 81 (1A) of the Companies Act, 1956 for issue of 21,49,878 Equity Shares on preferential basis.

ii. Special Resolution under Section 81 (1A) of the Companies Act, 1956 for issue of 52,82,555 Compulsorily Convertible Debentures (CCDs) on preferential basis.

iii. Ordinary Resolution u/s 293(1) (a) of the Companies Act, 1956, for sell, lease, transfer or dispose of Company's Sanitaryware Business Undertaking.

The result of the postal ballot was declared on May 3,2012. All the proposed resolutions were passed with requisite

majority.

DIRECTORS:

During the year under review Mr. Shantilal L. Shah and Mr. Shivji K. Vikamsey resigned from the office of Directors of the Company w.e.f. December 1, 2011. Mr. Raichand K. Shah and Mr. DeepakG. Savla resigned from the office of Directors of the Company w.e.f. February 14. 2012 and May 3, 2012 respectively. The Board places on record its sincere appreciation for their valuable contribution extended to the Company during their tenure as Directors of the Company.

Mr. Mahendra V. Modi and Mr. Ajit Nalwaya were appointed as Additional Directors of the Company w.e.f. February 14, 2012 and w.e.f. May 3, 2012 respectively. In terms of Section 260 of the Companies Act, 1956, they hold office as such upto the date of ensuing Annual General Meeting of the Company. The Company has received notice in writing from member of the Company pursuant to Section 257 of the Act, together with the requisite deposit proposing their candidature for the office of the Director of the Company.

In terms of Section 256 of the Companies Act, 1956, read with Article no. 196 of the Articles of Association of the Company, Mr. Kumar P. Shah, Director of the Company retires by rotation at ihe forthcoming Annual General Meeting and being eligible, has offered himself for re-appointment.

Your Directors recommend the appointment of Mr. Mahendra V. Modi and Mr. Ajit Nalwaya and re-appointment of Mr. Kumar P. Shah as Directors of the Company at the ensuing Annual General Meeting of the Company.

STATUTORY AUDITORS:

M/s. Deepak Maru & Co., Chartered Accountants, Mumbai, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received a letter from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224(1 B) of the Companies Act, 1956 and that they are not disqualified for such re-appointment within the meaning of Section 226 of the said Act.

Your Directors recommend their re-appointment as Statutory Auditors of the Company to hold office from the conclusion of the ensuing AGM upto the next AGM of the Company and to audit financial accounts for the financial year ending on March

31,2012.

COST AUDITORS:

Pursuant to the provisions of Section 233B of the Companies Act, 1956 and in terms of the Order no. 52/26/CAB-2010 dated May 2, 2011 issued by Central Government, the Company has appointed M/s. M. S. Saiyed & Co. as Cost Auditors of the Company for audit of the cost accounting records maintained by the Company relating to manufacturing of Vitrified Tiles, Sanitaryware Products, Aluminium Sections covered under Chapters 68 & 76 of Central Excise Tariff Act, 1985, for the financial year 2011-12 and 2012-13, subject to the approval of the Central Government.

AUDITORS' REPORT:

The Members may note that the auditors, without qualifying their audit report, have brought to the attention of the Members certain matters. The observations from the Audit Report (on standalone financials) are re-produced below adverbatim, which are self-explanatory:

(i) Regarding the financial statements of the Company having been prepared on a going concern basis, the appropriateness of which is inter-alia dependent on successful implementation of the scheme approved by the Corporate Debt Restructuring Cell as envisaged in Note no.

22 of the financial statements and as also that in the opinion of the management, no impairment provision is considered necessary.

(ii) Note no. 30 of the financial statements in respect of Net Deferred Tax Liability recognized in the earlier years of Rs 15,23,92,056/- being carried forward in the Balance Sheet and expected to reverse in foreseeable future, on the basis of management's view regarding future profits and the Restructuring Scheme approved by the CDR Cell. However, we are unable to express an opinion as to when and to what extent the aforesaid net deferred tax liability would reverse in the near future.

(iii) Note no. 9 of the financial statements on the financial statements, regarding investment in a subsidiary, carried at Rs 1,42,50,000/- which may require provisioning for the other-than-temporary diminution in the value of investments in the subsidiary in accordance with Accounting Standard 13 - Accounting for Investment is yet to be quantified and determined by the Management particularly when such subsidiary has negative net worth. We are, therefore, unable to comment on the adequacy, or otherwise, of the provision for the other-than-temporary diminution in the value of investment in the subsidiary as at March 31, 2012, and the consequential effects on the reported amounts under carrying value of investments, profit before tax. balance in profit and loss account and earnings per share in the financial statements.

Further with respect to the observations made by the Auditors' in their Report regar ding non provision for other- than-temporary diminution in the value of investments in the subsidiary company in accordance with Accounting Standard 13 - Accounting for investment in subsidiary, your directors would like to state that the Company is hopeful of revival of its' subsidiary's business, hence no provision is made for diminution in value of investment made in the subsidiary.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS:

The Ministry of Corporate Affairs (MCA) vide General Circular No.2/2011 No. 51/12/2007-CL-l 11 dated February 8, 2011 read with General Circular No. 3/2011 and No. 5/12/2007-CL-lll dated February 21, 2011 has granted a general exemption from attaching the Balance Sheet of subsidiary companies with holding Company's Balance Sheet, if the holding Company presents in its Annual Report the Consolidated Financial

Statements duly audited by its statutory auditors. The Company is publishing Consolidated Financial Statements in the Annual Report and accordingly, is not attaching the Balance Sheets of its wholly owned subsidiary companies viz. Euro Merchandise (India) Limited (EMIL) and Subhnen Sanitaryware Private Limited with its Balance Sheet. Further, as required under the said circular, a statement of financial information of the subsidiary companies is attached.

The Annual Accounts of the above referred subsidiaries shall be made available to the shareholders of the Company on request and will also be kept open for inspection at the Registered Office of the Company and of the subsidiary companies during the office hours on all working days, except Saturdays.

In accordance with the requirements of Accounting Standard AS 21 issued by the Institute of Chartered Accountants of India, the Consolidated Financial Statements and Auditors' Report thereon are published in this report.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, your Directors confirm that:

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

2) They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that period;

3) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4) They have prepared the annual accounts on a going concern basis.

CORPORATEGOVERNANCE:

A separate section on Corporate Governance Report and a certificate from the statutory auditors of the Company regarding compliance of the conditions of Corporate Governance, as stipulated under Clause 49 of the Listing Agreement with stock exchanges forms a part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

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

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE:

The particulars required under Section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given inAnnexure I attached to this Report.

PUBLIC DEPOSITS:

Your Company has taken unsecured loan, within the meaning of Public Deposits under Section 58Aof the Companies Act, 1956, during the year under review. The Company has filed "Statement in lieu of Advertisement'' along with necessary particulars as required with the Registrar of Companies, Maharashtra, Mumbai.

However, due to liquidity crunch and urgent requirement of working capital, the Company has paid higher interest rate and brokerage then the prescribed rate under the Companies (Acceptance of Deposits) Rules, 1975 to some of the depositors.

Further the Company is implementing the Corporate Debt Restructuring Scheme, due to various internal and external factors affecting operations of the Company and severe liquidity crunch in the financial year under review. Under such situation, the Company could not maintain the liquid asset ratio as required underthe said rules.

PERSONNEL:

Your Company maintained cordial relations during the year under review. The Company continued its endeavour to grow the learning curve through regular training programmes for its team members enabling them to attain higher productivity and superior quality.

APPRECIATION:

Your Directors acknowledges with gratitude and wish to place on record, their deep appreciation of continued support and co- operation received by the Company from the various Government authorities, Shareholders, Bankers, Lenders, CDR Cell, Business Associates, Dealers, Customers, Financial Institutions and Investors during the year.

Your Directors place on record their deep appreciation of the dedication and commitment of your Company's employees at all levels and look forward to their continued support in the future as well.

We are deeply grateful to our shareholders for the confidence and faith reposed on us. Your Company looks forward to their continued support in future.

For and on behalf of the Board of Directors Nenshi L. Shah Chairman & Managing Director

Place: Mumbai

Date: August 27, 2012


Mar 31, 2011

Dear Members,

The Directors are pleased to present the Ninth Annual Report of the Company for the year ended March 31,2011.

FINANCIAL RESULTS:

The highlights of the financial results for the year ended March 31, 2011 are as follows:

(Rupees in Lacs)

Particulars Year ended Year ended March 31, 2011 March 31, 2010

Income:

Net Sales 38,994.45 20,313.42

Other Income 129.99 111.31

Total Income 39,124.44 20,424.74

Less: Total Expenditure 27,367.63 17,761.91

Earning Before Interest, 11,756.81 2,662.83 Depreciation & Tax

Less: Interests other finance 5,737.05 4,519.65 expenses

Profit Before Depreciation & Tax 6,019.76 (1,856.82)

Less: Depreciation 2,855.07 2,288.02

Profit Before Tax 3,164.69 (4,144.84)

Less: Provision for Tax 76.04 Nil

Net Profit After Tax 3,088.65 (4,144.84)

Add: Balance Brought forward from 1,524.67 5,669.51 the previous year

Surplus carried to 4,613.32 1,524,67 Balance Sheet

FINANCIAL PERFORMANCE:

The Company has taken various strategic initiatives to improve the sales in its various segments during the financial year under review. The Company has recorded a net turnover of Rs. 38,994 45 Lacs, out of which the existing line of business i.e. Vitrified Tiles, Calcareous Tiles, Sanitaryware and Aluminum Section has contributed Rs. 23,994.45 Lacs and Rs. 15000 Lacs was from realty business. The EBDITAof the Company was Rs. 11,756.81 Lacs in the current financial year under review. The Company has made a net profit of Rs. 3088.65 Lacs in the current financial year against the net loss of Rs. 4144.84 Lacs in the previous financial year.

Your Directors inform the members that in order to correct its working capital position and to reschedule its debts in line with projected potential earnings, the Company has approached to the Corporate Debt Restructuring Cell (CDR)forthe suitable realignment of its entire debt. The

proposal has been admitted by the CDR Cell on May 19, 2011. The final package is under preparation by the lenders and the Company. The Company has not paid some of the dues to lenders as on balance sheet date till the implementation of final approved package.

OPERATIONAL PERFORMANCE:

a) Tile Division:

This segment has contributed Rs. 20,131.99 Lacs in the top line of the current year. The segment has two main products namely Vitrified Tiles and Calcareous Tiles. The performance of Vitrified Tiles of the Company has delivered a consistent growth in the current year and thus continued to be a leader in this segment. The calcareous tiles has also shown a positive growth in the total sales compared to the previous year. The Company is gradually capturing the market share in this product segment and positive in achieving higher turnover in the comingyears.

b) Aluminium Division:

The turnover of the Aluminium Extruded Sections was Rs. 1,718.47 Lacs in FY 2011, which was lowered by Rs. 423.57 Lacs in comparison with FY 2010, due to lower capacity utilization and price fluctuations.

c) Sanitaryware Division:

The Company has established a brand in this segment. Turnover of this segment has shown a growth of more than 50 % in the current year. The Company continued its efforts for becoming a leading player in this segment and thus stands as a true competitor in the market. The desired target will be achieved by the Company with the presence of world class quality and established brand in the years to come.

d) Realty Division:

The Company has ventured in to real estate segment in the current year. This segment has contributed Rs. 15,000 Lacs in the top line of the Company in the year under review. The Company is keen in developing this segment in the coming years and will establish its footprints in the real estate industry.

DEMERGER:

The Hon'ble High Court of Judicature at Bombay, pursuant to the provisions of Section 391 to 394 of the Companies Act, 1956, vide its order dated April 15, 2011 approved the Scheme of Demerger of Mumbai Realty Division of Ethix Realtors Private Limited (ERPL) as a going concern with the Company. Accordingly, the Mumbai Realty Division of Ethix Realtors Private Limited has been merged with the Company w.e.f. October 1,2009, being appointed date for the scheme.

Pursuant to the said Scheme 9328134 Equity shares of Rs. 10/- each fully paid up have been allotted on July 5, 2011 to the shareholders of ERPL in the ratio of 340 equity shares of Rs. 10/- each of the Company for every 182.24 equity share of Rs. 10/- each of ERPL. After the said allotment, the paid-up share capital of the Company is increased to Rs. 26,42,81,340/- divided into 26428134 Equity Shares of Rs. 10/- each.

DIVIDEND:

In order to conserve the resources for business requirement of the Company, your Directors do not recommend any dividend for the financial year under review.

DIRECTORS:

In terms of Section 256 of the Companies Act, 1956, read with Article No. 196 of the Articles of Association of the Company, Mr. Amit G. Shah and Mr. Raichand K. Shah, Directors of the Company retires by rotation at the forthcoming Annual General Meeting and being eligible, have offered themselves for re-appointment. Your Directors recommend their re-appointment as Directors of the Company.

Mr. Pravin D. Gala and Mr. Jatin R. Chhadva have resigned from the office of Directors of the Company w.e.f. February 1, 2011. Your Directors place on record their appreciation for the valuable services rendered by them during their tenure in the Company.

AUDITORS:

M/s. Deepak Maru & Co., Chartered Accountants, Statutory Auditors of the Company, holds office until the conclusion of the ensuing Annual General Meeting and is eligible for re-appointment. The Company has received letter from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224(1 B) of the Companies Act, 1956 and that they are not disqualified for such re-appointment within the meaning of Section 226 of the said Act.

Your Directors recommend their re-appointment.

AUDITORS REPORT:

With regard to the observations made in the Auditors' Report, read together with the relevant notes thereon are self-explanatory and further explanation is given below:

Point No. 11 in the Annexure to Auditors Report:

Your Directors is of the view that in order to correct its working capital position and to reschedule its debts in line with projected potential earnings, the Company has approached to the Corporate Debt Restructuring Cell (CDR) for the suitable realignment of its entire debt. The proposal has been admitted by the CDR Cell on May 19, 2011. The final package is under preparation by the lenders and the Company. The Company has not paid some of the dues to lenders as on balance sheet date till the implementation of final approved package.

In view of the above, the Company has repaid some of the dues subsequent to year end and balance dues will be paid as per the revised package of debt restructuring.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENT:

The Ministry of Corporate Affairs (MCA) vide General Circular No.2/2011 No. 51/12/2007-CL-lll dated February 8, 2011 read with General Circular No.3/2011 and No. 5/12/2007-CL-lll dated February 21, 2011 has granted a general exemption from attaching the Balance Sheet of subsidiary companies with holding Company's Balance Sheet, if the holding company presents in its Annual Report the Consolidated Financial Statements duly audited by its statutory auditors. Accordingly, the Company is publishing consolidated financial statements in the Annual Report and the Company is not attaching the Balance Sheets of its wholly owned subsidiary company viz. Euro Merchandise (India) Limited (EMIL). Further, as required under the said circular, a statement of financial information of the subsidiary company is also attached herewith.

The Annual Accounts of the above referred subsidiary shall be made available to the shareholders of the Company on request and will also be kept open for inspection at the Registered Office of the Company and of the subsidiary company during the office hours on all working days.

CONSOLIDATED ACCOUNTS:

In accordance with the requirements of Accounting Standard AS 21 issued by the Institute of Chartered Accountants of India, The Consolidated Financial Statements of the Company and Auditors' Report thereon are published in this report.

DIRECTORS" RESPONSIBILITY STATEMENT:

The Directors of the Company confirm pursuant to Section 217 (2AA) of the Companies Act, 1956, that:

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

- They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Companyforthatperiod;

- They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- They have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE:

A separate section on Corporate Governance Report and a certificate from the statutory auditors of the Company regarding compliance of the conditions of Corporate Governance, as stipulated under Clause 49 of the ListingAgreementwithstockexchangesformsapartoftheAnnual Report.

MANAGEMENTDISCUSSIONANDANALYSIS:

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

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE:

The particulars required under Section 217(1) (e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in Annexure I attached to this Report.

PUBLIC DEPOSITS:

Your Company has taken unsecured loan amounting to Rs. 28,33,00,000/- within the meaning of Sections 58Aand 58AAof the Companies Act, 1956, during the year under review. The Company has filed "Statement in lieu of Advertisement" along with necessary particulars as required with the Registrarof Companies, Mumbai.

PERSONNEL:

Your Company maintained cordial relations during the year under review. The Company continued its endeavour to grow the learning curve through

regular training programmes for its team members enabling them to attain higher productivity and superior quality.

APPRECIATION:

Your Directors acknowledges with gratitude and wish to place on record, their deep appreciation of continued support and co-operation received by the Company from the various Government authorities, Shareholders, Bankers, Business Associates, Dealers, Customers, Financial Institutions and Investors during the year.

Your Directors place on record their deep appreciation of the dedication and commitment of your Company's employees at all levels and lookforward to their continued support in the future as well.

We are deeply grateful to our shareholders for the confidence and faith reposed on us Your Company looks forward to their continued support in future.

For and on behalf of the Board of Directors

Nenshi L. Shah Chairman & Managing Director

Place : Mumbai Date : August 12, 2011


Mar 31, 2010

The Directors are pleased to present the Eighth Annual Report of the Company for the year ended March 31, 2010.

FINANCIAL RESULTS:

The highlights of the fi nancial results for the year ended March 31, 2010 are as follows:

FINANCIAL PERFORMANCE:

The fi nancial year under review was not as it was expected for the Company. The total turnover of performance. Turnover decline was mainly in Tiles Division and Aluminium Division. However the Marble and Sanitaryware, newly launched products have really started picking the market and turnover was almost doubled in the year under review compared to the previous year, which is the outcome of the efforts taken by the Company and its team for marketing these new the Company was Rs. 20313.42 Lacs, declined by 6%, compared to previous years turnover of Rs. 21717.98 Lacs. The economic slowdown and global precession has affected the Companys products and penetration done in the market.

EBDITA was declined from Rs. 4029.13 Lacs in FY 2008-09 to Rs. 2662.83 Lacs in FY 2009-10. The declined sales and increased cost has diluted the margins. The Company has incurred a Net Loss of Rs. 4144.84 Lacs in FY 2009-10, against Net Loss of Rs.2149.46 Lacs in FY 2008-09, due to increase in interest and depreciation, along with other costs.

(Rupees in Lacs)

Particulars Year ended Year ended March 31, 2010 March 31, 2009

Income:

Net Sales 20313.42 21717.98

Other Income 111.31 72.73

Total Income 20424.74 21790.70

Less: Total Expenditure 17761.91 17761.57

Earning Before Interest, Depreciation & Tax 2662.83 4029.13

Less: Interest & other finance expenses 4519.65 4194.89

Profit Before Depreciation & Tax (1856.82) (165.76)

Less: Depreciation 2288.02 1983.70

Profit Before Tax (4144.84) (2149.46)

Less: Provision for Tax Nil 132.09

Net Profit After Tax (4144.84) (2281.55)

Add : Balance Brought forward from the previ- 5669.51 7951.06 ous year

Surplus carried to Balance Sheet 1524.67 5669.51

OPERATIONAL PERFORMANCE:

a) Tile Division:

Tiles Division includes Vitrifi ed tiles and Calcareous tiles. The Company continues to be leader in Vitrifi ed tiles segment, but turnover was marginally down in the year under review. However the off take of Calcareous tiles was picked up in the market and the Company was able to capture the market share in Marble Segment, with its quality and brand successfully. The Company has increased the additional capacity in Calcareous Tiles Division and commissioned 2nd line of Calcareous Tiles manufacturing plant with a capacity of 28000 MTPA. With the focused marketing efforts and strategy, the Company hopes to achieve higher sales of Calcareous Tiles in the coming years.

b) Aluminium Division:

The sale of Aluminium Extruded Sections was down due to decline in the prices of Aluminium at global level. The production and sale in quantitative terms have increased in FY 2009-10, but realization per unit was down, compared to previous fi nancial year. The capacity utilization was at almost 100%. Margins were also increased despite decline in prices of Aluminium. Overall performance was satisfactory in this division, in the current fi scal year.

c) Sanitaryware Division:

Sanitaryware Division has shown growth of more than 100% in turnover during the year, compared to previous year. The Company was able to establish dealers network in this segment. With effective branding and display campaign, Company became the strong competitor among the existing established market players. Company has developed a wide range of sanitaryware products of international standards with superior look and style, with the use of state of art technology and skilled manpower.

DIVIDEND:

In view of loss incurred by your Company, your Directors do not recommend any dividend for the fi nancial year under review.

DIRECTORS:

In terms of Section 256 of the Companies Act, 1956, read with Article No. 196 of the Articles of Association of the Company, Mr. Jatin R. Chhadva and Mr. Deepak G. Savla, Directors of the Company retires by rotation at the forthcoming Annual General Meeting and being eligible, have offered themselves for re-appointment. Your Directors recommend their re-appointment as Directors of the Company.

The Board of Directors at its meeting held on October 29, 2010 re-appointed Mr. Nenshi L. Shah as Managing Director of the Company for a period of 5 (fi ve) years with effect from December 1, 2010. Your Directors recommends his appointment for your approval.

AUDITORS:

M/s. Deepak Maru & Co., Chartered Accountants, Statutory Auditors of the Company, holds offi ce until the conclusion of the ensuing Annual General Meeting and is eligible for re-appointment. The Company has received letter from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualifi ed for such re-appointment within the meaning of Section 226 of the said Act.

AUDITORS REPORT:

The observations made in the Auditors Report, read together with the relevant notes thereon are self-explanatory and hence, do not call for any comments under Section 217 of the Companies Act, 1956.

SUBSIDIARY:

Euro Merchandise (India) Limited (EMIL) is a wholly owned subsidiary of the Company and information pursuant to Section 212 (1) (e) of the Companies Act, 1956 with regard to EMIL is furnished in this report.

As required under Section 212 of the Companies Act, 1956, the fi nancial statements of EMIL are also attached to the Balance Sheet of the Company.

CONSOLIDATED ACCOUNTS:

In accordance with the requirements of Accounting Standard AS 21 issued by the Institute of Chartered Accountants of India, The Consolidated Financial Statements of the Company and Auditors Report thereon are published in this report. .

DIRECTORS RESPONSIBILITY STATEMENT:

The Directors of the Company confi rm pursuant to Section 217 (2AA) of the Companies Act, 1956, that:

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

2. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the fi nancial year and of the loss of the Company for that period;

3. They have taken proper and suffi cient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. They have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE:

A separate section on Corporate Governance Report and a certifi cate from the statutory auditors of the Company regarding compliance of the conditions of Corporate Governance, as stipulated under Clause 49 of the Listing Agreement with stock exchanges forms a part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS:

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

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE:

The particulars required under Section 217(1) (e) of the Companies Act, 1956, read with Com- panies (Disclosure of Particulars in the Report of Board of Directors ) Rules, 1988 are given in An- nexure – A attached to this Report.

PUBLIC DEPOSITS:

Your Company has taken unsecured loan amounting to Rs. 18,69,00,000/- within the meaning of Sections 58A and 58 AA of the Companies Act, 1956, during the year under review. The Company has fi led “Statement in lieu of Advertisement” alongwith necessary particulars as required with the Registrar of Companies, Mumbai.

PERSONNEL:

Your Company maintained cordial industrial relations in the year under review. The Company continued its endeavour to train the employees to attain higher productivity and better quality.

There are no employees drawing remuneration more than the limit prescribed under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars in the Report of Borad of Directors) Rules, 1988. Therefore no information is provided in this report.

APPRECIATION:

Your Directors acknowledges with gratitude and wish to place on record, their deep appreciation of continued support and co-operation received by the Company from the various Government authorities, Shareholders, Bankers, Business Associates, Dealers, Customers, Financial Institutions and Investors during the year.

Your Directors place on record their deep appreciation of the dedication and commitment of your Companys employees at all levels and look forward to their continued support in the future as well.

For and on behalf of the Board of Directors

Nenshi L. Shah

Chairman & Managing Director

Place: Mumbai

Date: October 29, 2010

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