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Directors Report of Nitco Ltd.

Mar 31, 2014

Dear Members,

The Directors are pleased to present the Annual Report with the audited statement of accounts of the Company for the year ended March 31, 2014.

Financial Results

The highlights of the financial results for the year ended March 31, 2014 are as follows:

(Rs. in Crores)

For the year ended March 31 2014 2013

Gross Sales 840.19 877.98

Net Sales 759.45 770.28

Profit before interest depreciation and tax (25.55) (39.64)

Interest & Financial Charges (Net) (143.69) (151.67)

Depreciation (41.99) (40.03)

Exceptional Items - -

Profit/(loss) before tax (211.23) (231.34)

Provision for tax - -

Profit/(loss) after tax (211.23) (231.34)

Balance brought forward from previous year (159.46) 71.88

Balance carried forward (370.69) (159.46)

Review of operation

The Company''s business model until FY11-12 was dependent on large imports of vitrified tiles from China. However, sudden steep drop in the value of rupee vs USD towards later part of FY 11-12, rendered the business of import of vitrified tiles and distribution within India unviable. The Company at that time was saddled with large inventories which were imported at a higher cost (due to rupee depreciation) and had to take steps to liquidate the inventories at a loss. The Company thereafter took steps to move away from China based sourcing strategy to domestic led sourcing. The China led sourcing strategy required setting up a huge infrastructure in terms of mother warehouses and regional depots across the country to facilitate distribution of imported tiles. With imports suddenly becoming unviable, Company had to deal with high distribution costs which had to be scaled down gradually in line with reduction in the inventory. Being a brick and mortar Company, this significant change in the business model has taken time to correct and has resulted in adverse performance during the last two financial years.

The slump in real estate and overall state of the economy has made a quick revival that much more time consuming. Due to competitive pressures and subdued state of the economy, sales volume could not be increased as desired Consequently the gross sales of the Company during the year ended 31st March 2014 has dropped to Rs. 840.19 Crores as against Rs. 877.98 Crores during the previous year ended 31st March 2013.

The power and fuel costs which form a significant part of the manufacturing costs in the tile industry have relentlessly increased every month which could not be fully passed on resulting in losses at the EBITDA level. Despite lower sales, due to strict control on other costs, the EBITDA loss for FY 13-14 was lower at Rs. 25.55 Crores as compared to Rs. 39.64 Crores during the previous year. The impact of increased fuel costs on own manufacturing was Rs. 12.63 Crores and increase in the procurement cost from vendors on account of fuel cost increase was Rs. 6.40 Crores. Thus the total impact of increased fuel costs on the financials of the Company was Rs. 19.03 Crores and was the main reason for the EBITDA losses incurred during the year.

Due to significant losses incurred during last two financial years, the net worth of the Company has been eroded by more than 50% and it will require reference to BIFR. Considering the tremendous brand equity enjoyed by the Company, non core assets identified for sale, and several steps taken for improving the performance of the Company, the management is hopeful of a turnaround in near future. The management therefore believes, it is appropriate to prepare the financial statement on a going concern basis.

Increased cost of Regasified liquefied natural gas (RLNG)

Power and Fuel forms a substantial part of cost of production in the tile industry. Our Company depends on RLNG supplied by GAIL for firing its kiln and dryers and generating power through gas turbine. As will be seen from the table below, the Company has been subjected to monthly increase in RLNG prices thereby increasing its cost of production. Due to severe competitive pressures, Company was unable to pass on the increased cost of RLNG to its customers.

Due to the steep increase in gas prices, the Company suspended the use of Gas Turbine for power generation towards the end of Q3 and shifted to use of power from MSEDL and Coal for running the spray dryer. This will result in reduction of power and fuel costs in the next financial year.

Updates on Corporate Debt Restructuring

Due to the factors elaborated above, the Company faced 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 had 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 at the CDR Empowered Group (EG) meeting held on 8th November 2012, and issued the Letter of Approval (LOA) on 26th December 2012 and revised letter dated 31st December 2012, based on which the lenders agreeing to the package has signed the Master Restructuring Agreement (MRA) on March 6, 2013. The salient features of the package were as under:

a. The Cut-off-Date (COD) is April 1, 2012.

b. The total existing term loan of Rs. 408.34 Crores outstanding is restructured. The principal repayment shall be in 32 quarterly structured installments for the period commencing from 30th June 2014 and ending on 31st March 2022. Interest rate is 11.25% per annum.

c. Carving out working capital irregularities has been converted into Working Capital Term Loan (WCTL). WCTL is Rs. 609.17 Crores. WCTL is payable in 24 quarterly structured installments period commencing from 30th June 2014 and ending on 31st March 2020. WCTL carries Interest at 10.75% p.a.

d. Funded Interest on the term loan (FITL) for a period of 18 months from COD, amounting to Rs. 150.35 Crores. Repayment shall be in 24 quarterly installments period commencing from 30th June 2014 and ending on 31st March 2020. FITL carries Interest at 10.75% p.a.

e. Promoters were required to bring in Rs. 55.69 Crores as their contribution under the package and the same was brought in by the promoter.

f. Personal guarantee from Mr. Vivek Talwar and corporate guarantee from M/s Aurella Estates & Investments Private Limited for the entire debt of the Company including the sacrifices made by the lenders.

g. The entire debt is further secured by the corporate guarantees from certain subsidiaries who hold real estate assets, offered as additional securities to lenders.

h. Pledge of shares in the Company held by both Mr. Vivek Talwar and M/s Aurella Estates & Investments Private Limited.

The CDR package also included fresh working capital facilities, of approximately Rs. 280 Crores (both fund and non fund based), allowing the Company to accelerate its operation.

The Company complied all the conditions of the CDR package to demonstrate its willingness to make the package successful, but the profitability was affected due to reasons beyond the control of the Company namely -

* Steep increase in Fuel and Power Costs.

* Lower sales achievement mainly due to challenging economic scenario and non-release of working capital sanctioned under CDR scheme

Despite all sincere efforts, the sale of non-core assets has been delayed due to adverse real estate scenario in the country.

Though all the conditions mentioned in the CDR package have been complied with, the lenders did not disburse the additional working capital facility even though the same was sanctioned in the CDR package. Despite the tight liquidity conditions, the Company managed to reduce its EBITDA losses due to its strong brand equity. Due to the delay in monetising of the real estate assets, the Company has requested the lenders to rework the approved CDR package.

Credit Rating

The last Credit Rating issued to the Company by CARE Limited was on 1st October, 2012. However, the credit rating is under suspension at present as the Company is under Corporate Debt Restructuring.

Postal Ballot

During the year under review, the Board of Directors have duly passed the following Resolutions on 7th June, 2013 through Postal Ballot voting process with requisite majority:

1. Authorisation for Restructuring of Debts;

2. Issue of Equity Shares on Preferential Basis under section 81(1A) of the Companies Act, 1956;

3. Increase in the Authorised Share Capital and amendment to the capital clause of the Memorandum of Association of the Company;

4. Amendment to the capital clause of Articles of Association of the Company;

5. Increasing the Borrowing Limits of the Company pursuant to section 293(1)(d) of the Companies Act, 1956;

6. Authorisation for creation of charge/mortgage etc. on the properties of the Company pursuant to section 293(1)(a) of the Companies Act, 1956.

Mr. Nilesh Shah, Practicing Company Secretary, acted as a Scrutiniser for conducting the Postal Ballot process in a fair and transparent manner. The procedure of the Postal Ballot is as per section 192A of the Companies Act, 1956 and Companies (Passing of the Resolution by Postal Ballot) Rules, 2011.

Paid up Capital

The Company after obtaining all the requisite approvals, allotted 2,20,99,206 Equity shares of Rs. 10 each to M/s Aurella Estates & Investments Pvt Ltd, a promoter entity at a price of Rs.25.20 per share inclusive of premium of Rs. 15.20 per share and the said shares have been listed on the Stock Exchanges.

Post allotment of equity shares as aforesaid, the share capital of the Company stands increased to Rs. 54.70 Crores.

Monetisation of Non-core Assets

The Company is taking steps to monetise certain non-core assets in terms of the Corporate Debt Restructuring package implemented by the Company. The Company and its wholly owned subsidiaries hold lands at Alibag (at Maharashtra), Thane (at Mumbai) and at Goa. The Company has taken steps for developing a residential project at its land at Kanjur Marg in association with Hiranandani Group for which an MOU has been entered into on 19th December 2012. The Company''s state of art building at Thane Biz Park with unoccupied space of 81,249 sq ft could not be sold due to over supply in the commercial real estate. In view of slow down in real estate market, income from real estate business is expected to be substantially lower; a huge unsold inventory is being held by industry and hence, realisation of real estate division is expected to be delayed by few more years till the real estate industry gets a fresh revitalisation. The Company launched NITCO Escape Village Project at Alibag with huge advertisement campaign. Though initial response was quite positive, however, due to overall depressive economic scenario, response could not be converted into actual sales.

Joint Venture with New Vardhman Vitrified Pvt. Ltd.

With imports from China becoming progressively unviable, Company had shifted sourcing based in India. As a part of this strategy, your Company had acquired 51% equity stake in New Vardhman Vitrified Pvt. Ltd (NVVPL). The said company had set up a plant in Wakaner, Morbi, Gujarat for manufacturing 8 million sq. mtrs (approximately) of vitrified tiles and wall tiles. The plant has commenced its production towards the end of the financial year 2012-13. The production of this plant is marketed by the Company under its brand name. With this arrangement, Company''s dependence on China for tiles sourcing had significantly reduced. NVVPL, in its first full year of operation, has achieved net turnover of Rs. 146.45 Crores, EBITDA is Rs. 13.72 Crores and net profit before tax is Rs. 1.93 Crores.

Dividend

In view of the losses incurred during the year, your Board is not able to recommend any dividend for the financial year ended 31st March 2014.

Subsidiary Companies and Consolidated Financial Statements

In terms of Section 212(8) of the Companies Act, 1956 read with the General Circular No.2/2011 dated February 8, 2011 issued by the Ministry of Corporate Affairs, Government of India, general exemption has been provided to companies from compliance of the provisions of Section 212 of the Companies Act, 1956 subject to compliance with conditions as referred to in the said General Circular No.2/2011 dated February 8, 2011. The Board of Directors of the Company, accordingly, has given its consent for not attaching the balance-sheet of the subsidiaries and accordingly, the balance-sheet, statement of profit and loss and other documents of the subsidiary companies are not being attached with the balance- sheet of the Company. However, some key information of the subsidiary companies as required to be provided in terms of the said circular, is disclosed under "Section 212 Report" forming part of this Annual Report.

The annual accounts of the subsidiary companies and the related detailed information will be made available to any member of the Company / its subsidiaries who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept for inspection by any member at the Company''s Registered Office and Corporate Office and that of the respective subsidiary companies.

The Annual Report of the Company contains the consolidated audited financial statements prepared pursuant to Clause 41 of the Listing Agreement entered into with the stock exchanges and prepared in accordance with the mandatory accounting standards as notified by the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956.

Directors'' Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956, as amended by the Companies (Amendment) Act, 2000, the Directors confirm that:

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

b) Appropriate accounting policies have been selected and applied consistently and have 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 on March 31, 2014 and of the loss of the Company for the year ended March 31, 2014;

c) Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

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

Directors

Pursuant to Letter of Approval issued by CDR cell and Master

Restructuring Agreement entered into with CDR Lenders, Shri Rakesh Kumar representative of M/s Punjab National Bank, the monitoring institution for the CDR Lenders, was appointed as a Nominee Director on the Board of your Company. As per Clause 75 of Article of Association of the Company, Shri Rakesh Kumar shall not liable to retire by rotation. In view of his appointment to continue as a Nominee Director, appropriate resolution has been included in the notice for members'' approval.

The tenure of Mr. Vivek Talwar, Managing Director, expired on 31st March, 2014 and the Board of Directors at its meeting held on 12th February, 2014 re-appointed him as the Managing Director, subject to the approval of the members at the Annual General Meeting for a further period of three years with effect from 1st April, 2014.

In view of the provisions of section 149 of the Companies Act, 2013, the Board of your Company has proposed the appointment of Mr. Pradeep Saxena as Independent Director at the ensuing Annual General Meeting of the Company. Mr. Rohan Talwar, Director of the Company, is due for retirement by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment. The Company has received the requisite Notices in writing proposing the appointment of Mr. Pradeep Saxena as Independent Director and Mr. Rakesh Kumar as the Nominee Director.

Brief resume of Shri Rakesh Kumar, Mr. Vivek Talwar, Mr. Pradeep Saxena and Mr. Rohan Talwar, the nature of their expertise in specific functional areas and the names of the companies in which they hold directorships as stipulated in Clause 49 of the Listing agreement is provided in the report on Corporate Governance annexed to the Annual Report.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a detailed report on Corporate Governance forms a part of this Annual Report. A certificate from the auditors of the Company confirming their compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this Report.

Auditors'' Report

The Board has duly examined the statutory auditor''s report to accounts and clarifications, wherever necessary, have been included in the Notes to Accounts section of the Annual Report.

Auditors

Messrs. A. Husein Noumanali & Co., Chartered Accountants, retire at the conclusion of the ensuing Annual General Meeting. In terms of the Companies Act, 2013 ("the new Act") and the Rules framed thereunder, it is proposed to appoint them as Statutory Auditors of the Company to hold office from the conclusion of the ensuing Annual General Meeting, until the conclusion of the 51st Annual General Meeting of the Company to be held in the Year 2017 (subject to ratification of their appointment by the Members at every Annual General Meeting held after the ensuing Annual General Meeting).

As required under the provisions of section 139(1) of the new Act, the Company has received a written consent from M/s. A.. Husein Noumanali & Co., Chartered Accountants to their appointment and a Certificate, to the effect that their re- appointment, if made, would be in accordance with the new Act and the Rules framed thereunder and that they satisfy the criteria provided in section 141 of the new Act. The Board commends their re-appointment as statutory auditors.

The Notes on Financial statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments.

Appreciation and acknowledgement

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 Banks, various Government authorities, Shareholders, Bankers, Lenders, Business Associates, Dealers, Customers, and Investors during the year.

For and on behalf of the Board

Vivek Talwar Pradeep Saxena Managing Director Director


Mar 31, 2013

The Directors are pleased to present the Annual Report with the audited statement of accounts of the Company for the year ended March 31,2013.

Financial results

The highlights of the financial results for the year ended March 31, 20 13 are as follows: (Rs. in lakhs) 2012 2013

Gross Sales 87919 95970

Profit before interest depreciation and tax (3964) 8680

Interest & Financial Charges (Net) 15167 751

Depreciation 4003 3266

Exceptional Items 3447

Profit/(loss) before tax (23134) (5544)

Provision for tax

Profit/(loss) after tax (23134) (5544)

Balance brought forward from previous year 7188 12732

Balance carried forward (15946) 7188

Review of operation

During the year under review, your Company''s gross sales have declined by 8.38% over last year The increase in costs of production, interest cost etc resulted in increase in net loss to Rs. 23 I 34 lakhs.

Continued Challenges faced by the Company

The slump in real estate has taken a toll on volumes as well as sales realization. While the costs have increased sharply due to devaluation of currency increase in power and fuel cost, employee cost and the interest cost, the competition from unorganised sector and weak market has restricted our ability to pass on increased cost to customers. Consequently the gross sales of the Company during year ended 31 st March 20 I 3 has dropped to Rs. 87919 lakhs as against Rs. 95970 lakhs during previous year ended 31 st March 20 12.

Demand for Tiles is primarily linked with growth of Real Estate sector Real Estate sector has been grappling with problems. Slow sales and a glut of properties are hampering the real estate market in major metro and A-class cities in India.The glut is likely to extend into 20 14 as steady streams of new developments are

launched on the market. The overall sentiments of the market and the consistent rate of new project launches in major cities give a clear indication of an impending oversupply in 20 I 3 and 20 14 Analysts tracking the prices and unsold property inventory levels believe that the fall would continue for a longer period and prices would remain stagnant for some time.

As the economy shows signs of decreasing GDP growth rate, the Indian real estate industry faces its own share of concerns. Real estate developers are reeling under high debt and FDI inflows have also slowed down. Amidst these macroeconomic conditions, Indian real estate asset classes across the prime cities of India have seen mixed sentiments.

Increased cost of Regasified liquefied natural gas (RLNG)

Power and Fuel forms a substantial part of cost of production in the tile industry Our Company depends on RLNG supplied by GAIL for firing its kiln and dryers and generating power through gas turbine. As will be seen from the table below, the Company has been subjected to monthly increase in RLNG prices thereby increasing its cost of production. Due to severe competitive pressures, Company was unable to pass on the increased cost of RLNG to its customers.

Corporate Debt Restructuring

Due to significant depreciation of Rupee against US Dollar; the performance for the Company for the last few quarters was impacted due to substantial exposure to foreign currency in respect of large imports of vitrified tiles.The competitive pressure and weak market sentiment have restricted our ability to pass on increase in purchase cost to customers.

Thus, Company faced 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 at the CDR Empowered Group (EG) meeting held on 8th November 2012, and issued the Letter of Approval (LOA) on 26th December 2012 and revised letter dated 31st December 20 12, based on which the lenders agreeing to the package has signed the Master Restructuring Agreement (MRA) on March 6, 20 I 3.The significant highlight of the package is as under:

a. The Cut off-Date (COD) is April 1, 20 12.

b. The total existingterm loan of Rs. 425.37 Crores outstanding is restructured.The principal repayment shall be in 32 quarterly structured installments for the period commencing from 30th June 2014 and ending on 31st March 2022. Interest rate is

I 1.25% per annum.

c. Carving out working capital irregularities has been converted into Working Capital Term Loan (WCTL).WCTL is Rs. 603.63 crores .WCTL is payable in 24 quarterly structured installments period commencing from 30th June 20 14 and ending on 3 1st March 2020. WCTL carries Interest at 10.75% p.a.

d. Funded Interest on the term loan (FITL) for a period of 18 months from COD, amounting to Rs. 153.18 Crores. Repayment shall be in 24 quarterly installments period commencing from 30th June 20 14 and ending on 31 st March 2020. FITL carries Interest at 10.75% p.a.

e. Promoters require to bring in Rs 55.69 crores as their contribution under the package. Out of the same Rs.28 crores has been brought in by March 31, 2013 and balance to be brought by June 30, 20 13.

I f Personal guarantee from Mr Vivek Talwar and corporate guarantee from M/s Aurella Investments & Estates Private Limited for the entire debt of the Company including the sacrifices made by the lenders.

g The entire debt is further secured by the corporate guarantees from certain subsidiaries who hold real estate assets, being offered as additional securities to lenders.

h. Pledge of shares in the Company held by both MrVivekTalwar and M/s Aurella Estates & Investments Private Limited.

Joint Venture with NewVardhman Vitrified Tiles Pvt. Ltd.

With imports from China becoming progressively unviable, Company has shifted sourcing based in India. As a part of this strategy, your Company has acquired 5 \% equity stake in New Vardhman Vitrified Tiles Pvt. Ltd (NWPL).The said company has set up a plant in Wakaner, Morbi, Gujarat for manufacturing 8 million sq. mtrs (approximately) of vitrified tiles and wall tiles. The plant has commenced its production towards the end of the financial year The entire production of this plant is marketed by the Company under its brand name. With this arrangement, Company''s dependence on China for tiles sourcing has significantly reduced.

Dividend

In view of the losses incurred during the yean your Board is not able to recommend any dividend for the financial year ended 3 I st March 201 3.

Consolidated Financial Statements

As required by the Listing Agreement with the Stock Exchanges and in accordance with the Accounting Standards AS-21 on consolidated financial statements, your Directors provide the audited annual consolidated financial statements in this Annual Report.

Directors'' Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956, as amended by the Companies (Amendment) Act, 2000, the Directors confirm that:

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

b) Appropriate accounting policies have been selected and applied consistently and have 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 on March 31, 201 3 and of the loss of the Company for the year ended March 31,2013;

c) Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

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

Subsidiary companies

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company The Company shall provide a copy of the Annual Report of its subsidiary companies, free of cost, as required under Section 212 of the Act to members on their written request to the Company Secretary at the registered office of the Company These documents will also be available for inspection by any shareholder at the registered office of your Company on any working day during business hours. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies.

A statement pursuant to section 212 of the Companies Act, 1956, containing details of subsidiaries of the Company also forms part of this Annual Report.

Directors

Mr Rohan Taiwan Director of the Company is due for retirement by rotation at the ensuing Annual General Meeting and, being eligible, offer himself for re-appointment Brief resume of Mr Rohan Taiwan the nature of his expertise in specific functional areas and the names of the companies in which he holds directorships as stipulated in Clause 49 of the Listing agreement is provided in the report on Corporate Governance annexed to the Annual Report.

I Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a detailed report on Corporate Governance forms a part of this Annual Report. A certificate from the auditors of the Company confirming their compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this Report.

Management Discussion and Analysis

Management Discussion and Analysis on matters related to business performance, as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges, is given in a separate statement which forms part of the Annual Report.

Personnel

Relationships with employees continued to be cordial. The HR policies of your Company were focused on the development potential of each employee. With this premise, a comprehensive set of HR policies were laid down, aiming to attract, retain and motivate employees at all levels. Information required under Section 2I7(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 as amended, is provided in the Annexure forming part of the Directors'' Report. In terms of Section 219( l)(b)(iv) of the Act, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary at the Registered/Corporate Office ofthe Company

Transfer to Investor Education and Protection Fund (IEPF)

The Company has, during the year under review, transferred a sum of Rs .272,852/- to Investor Education and Protection Fund, in compliance with the provisions of Section 205C ofthe Companies Act, 1956. The said amount represents application money due for refund which remained unpaid/ unclaimed by the shareholders ofthe Company for a period of 7 years from its due date of payment.

Cost Auditor

The Cost Audit Branch of Government of India, Ministry of Corporate Affairs (MCA), New Delhi, vide Cost Order No. 52/26/CAB-20 10 dated November 6, 20 12 have issued industry '' wise Orders for appointment of Cost Auditors from FY 20 I 3-14 onwards for companies engaged in the manufacturing of I Ceramic and Marble products.The provisions ofThe Companies (Cost Accounting Records) Rules, 201 I shall be applicable to all the products/activities of the Company and pursuant to the same the Board of Directors of the Company has appointed M/s. R K. Bhandari & Co. Cost Accountants, Jaipur; as the "Cost Auditor" and "Cost Accountant" under Section 233B and Section 209(1) (d) of the Companies Act, 1956 forthe Financial year 20 I 3-14.

Corporate Social Responsibility

Today''s business environment demands that corporate play a pivotal role in shouldering social responsibility.You will be happy to note that in the year under review your Company executed several Corporate Social Responsibility (CSR) programmes for the benefit of the communities where your Company operates. Your Company contributed actively towards community welfare measures, taking several initiatives related to education, health, environmental improvement and other development measures such as:

- Regular medical check up

- Blood donation camps

- Tree plantation programmes on World Environment Day and Earth Day to promote awareness about the effect of climate change and importance of environment protection

- Conducting Safety Awareness programmes regularly

- Supportto sports activities including local sports championships for kabaddi and cricket.

- First aid centre at manufacturing facility

- Occupational Health centre at manufacturing facility

- Donations to local temples for their renovation

Conservation of Energy,Technology Absorption and Foreign Exchange Earnings/Outgo

The information required under Section 2l7(l)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, with respect to conservation of energy technology absorption and foreign exchange earnings/outgo is given in Annexure A, which forms part of this Report.

Risk and Concern

Changes in macro economic factors like inflation, energy cost, interest rate, world trade, exchange rate, etc. also play an important role in our industry thereby affecting the operations of business. Any adverse change in the above may affect the performance of your Company Your Company periodically reviews the risk associated with the business and takes steps to mitigate and minimise the impact of risk.

Quality Safety and environment

Your Company in order to ensure highest standard of safety has implemented and initiated various measures with respect to Quality Safety and Environment Management Systems. The initiatives by your Company have been rewarded with several recognitions.

Internal control framework

Your Company conducts its business with integrity and high standards of ethical behavior and in compliance with the laws and regulations that govern its business.Your Company has a well established framework of internal controls in operation, including suitable monitoring procedures. In addition to the external audit, the financial and operating controls of your Company at various locations are reviewed by Internal Auditors, who report their observations to the Audit Committee of the Board.

Auditors'' Report

The Board has duly examined the statutory auditor''s report to accounts and clarifications, wherever necessary have been included in the Notes to Accounts section of the Annual Report.

Auditors

The present auditors of the Company M/s. A. Husein Noumanali & Co., Chartered Accountants, retire at the conclusion of the Annual General Meeting and being eligible, offer themselves for re-appointment Your Directors recommend their re-appointment

Appreciation and acknowledgement

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

For and on behalf of the Board

Sd/- Sd/-

Date: 30th May 20 13 Vivek Talwar Vishal Malik

Place: Mumbai Managing Director Director


Mar 31, 2012

The Directors take pleasure in presenting the Annual Report with the audited statement of accounts 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 crores

For the year ended March 31 2012 2011

Gross Sales 958.52 728.28

Profit before interest depreciation and tax 86.80 79.16

Interest and financial charges (Net) 75.11 28.09

Depreciation 32.66 22.71

Exceptional items 34.47 --

Profit/(loss) before tax (55.45) 28.35

Provision for tax -- 2.05

Profit/(loss) after tax (55.45) 26.30

Balance brought forward from previous year 127.32 112.91

Amount available for appropriation 71.88 139.21

Proposed dividend -- 1.63

Dividend tax on proposed dividend -- 0.27

Transferred to general reserve -- 10.00

Balance carried forward 71.88 127.31

Review of operations

During the year under review, your company registered 32% growth in gross sales. There is a net loss of Rs. 55.45 crore as compared to PAT of Rs. 26.30 crore in the previous year.

Highlights 2011-12

The gross revenue for the year ended March 31, 2012 grew 32% to reach Rs. 958.52 crore driven by increased

sales in:

- Vitrified tiles sales up 71% to Rs. 528.18 crore

- Ceramic tiles sales up 24% to Rs. 276.28 crore

- Marble sales however decreased by 18% to Rs. 143.66 crore

- Real estate sales at Rs. 10.40 crore

Challenges faced by the Company

Demand for Tiles is primarily linked with growth of Real Estate sector. Real Estate sector has been grappling with problems. Slow sales and a glut of properties are hampering the residential real estate market in major metro and A- class cities in India. The glut is likely to extend into 2013 as steady streams of new developments are launched on the market. Developers who bought land at high prices, are not ready to bring prices down. The overall sentiments of the market and the consistent rate of new project launches in major cities give a clear indication of an impending oversupply in 2012 and 2013. A lot of developers in the most severely affected locations are currently open to closing sales at lower rates. Prices for commercial properties slumped in the Indian city in 2009 and many developers switched from offices to residential in the hope of keeping profits high. But now there is slump in the residential sector in major metros as well.

As the economy shows signs of lower GDP growth rate, the Indian real estate industry faces its own share of concerns. Real estate developers are reeling under high debt and FDI inflows have also slowed down. The increase in home loan interest rates is dampening the sales even further. Amidst these macroeconomic conditions, Indian real estate asset classes across the prime cities of India have seen mixed sentiments.

Because of the prevailing uncertainties on the global market and there is no likelihood of major interest rate reduction by RBI, sentiments on the residential market will remain cautious over the short term. The absorption rate - meaning the ratio of sales over inventory in the market - is likely to be low, and the incidence of new launches will decline. Rise in capital values will be marginal because of low sales.

Project-specific price increases can be expected across all sub-markets - this pertains specially to projects that are being delivered or are nearing completion. The mid-end and affordable housing segments will record healthy appreciation in capital values in the short term from a low base. We expect these trends to continue during FY 13.

For more than a decade, your Company has been following a policy of part in- house manufacturing and part outsourcing from China which had served the Company well during the last several years. As per business model, your Company needs to import significant portion of outsourced products from China. The exchange rate between Indian Rupee and US Dollar has changed dramatically during 3rd and 4th quarter of FY 2011-12. This has impacted the landed cost of the outsourced products. Due to competitive pressure the Company was not able to pass on the excess burden on account of higher exchange rate to its customers. This has resulted in operating losses during 4th Quarter.

The proportion of outsourcing from China has over the years considerably increased. As the China factories generally remain closed for two months in the early calendar year, it was required to procure stocks in advance in anticipation of sales. Because of the large lead times in procurement and frequent changes in the consumer tastes, there has been a mismatch between products procured and sales achieved. The inventory has gone up to Rs. 424 crore (including the stock written off of Rs. 34 crore) as on year ended March 2012 as against Rs. 311 crore as on year ended March 2011. The Company has reviewed the realisability of stocks and upon a review and as a measure of abundant precaution, the management has written off obsolete/damaged stock of Rs. 34 crore in March 2012 as exceptional items.

Joint Venture with New Vardhman Vitrified Tiles Pvt. Ltd.

With imports from China becoming progressively unviable, Company has entered into a Memorandum of Understanding with New Vardhman Vitrified Tiles Pvt. Ltd.and its promoters for a 51% stake in New Vardhman Vitrified Tiles Pvt. Ltd . The said Company is setting up a plant in Wakaner, Morbi, Gujarat for manufacturing 8 million sq. mtrs (approximately) of vitrified tiles and Wall tiles. The plant is expected to start production in Q3 of the current financial year. The entire production of this plant will be marketed by the Company under its brand name. With this arrangement, Company's dependence on China for tiles sourcing will significantly reduce.

Increased cost of Borrowings

Cost of borrowings has also increased during the fiscal due to increase in benchmark rates as well as higher level of borrowings. Subsequent to recently commissioned projects at Silvassa and Alibaug the entire interest cost is charged to revenue with effect from last quarter of the FY 2011-12. The increase in interest costs on the base of high level of debt further affected net profit margins. Besides, the Company had to suffer an exchange loss of Rs. 10 crore in FY 2011-12 as against an exchange gain of Rs. 4 crore in FY 2010-11 i.e. net impact of Rs. 14 crore on year to year basis. The following graph shows the monthly movement of exchange rate between Indian Rupees and United States Dollar:

Dividend

In view of the losses incurred during the year your Board is not able to recommend any dividend for the financial year ended 2011-12 (previous year Re. 0.5 per share).

Consolidated Financial Statements

As required by the Listing Agreement with the Stock Exchanges and in accordance with the Accounting Standards AS-21 on consolidated financial statements, your Directors provide the audited annual consolidated financial statements in this Annual Report.

Corporate Debt restructuring

In view of the operating losses faced by the Company and the high level of Debt, Punjab National Bank the lead Bank has made a reference to the CDR cell for restructuring the Company's debt.

Directors' Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956, as amended by the Companies (Amendment) Act, 2000, the Directors confirm that:

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

b) Appropriate accounting policies have been selected and applied consistently and have 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 on March 31 , 201 2 and of the loss of the Company for the year ended March 31, 2012;

c) Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

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

Subsidiary companies

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company shall provide a copy of the Annual Report of its subsidiary companies, free of cost, as required under Section 21 2 of the Act to members on their written request to the Company Secretary at the registered office of the Company. These documents will also be available for inspection by any shareholder at the registered office of your company on any working day during business hours. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies.

A statement pursuant to section 212 of the Companies Act, 1956, containing details of subsidiaries of the Company also forms part of this Annual Report.

Directors

Mr. Shivkumar Bhardwaj, Mr. Atul Sud and Mrs. Poonam Talwar resigned as Director of the Board. The Board placed on record its deep sense of appreciation for the services rendered by them as Directors of the Company.

The Board places on record its condolences for the sad demise of Mr. Prannath Talwar, who has passed away on 2nd May, 2012.

Mr. Pradeep Saxena, Mr. Vishal Malik and Mr. Rohan Talwar were appointed as Additional Directors at the Meeting of the Board of Directors held on 3rd May, 2012 and they hold office until the conclusion of the ensuing Annual General Meeting. Notices have been received from Members of the Company for appointing them at the ensuing General Meeting.

Brief resume of Mr. Pradeep Saxena, Mr. Vishal Malik and Mr. Rohan Talwar the nature of their expertise in specific functional areas and the names of the companies in which they hold directorships as stipulated in Clause 49 of the Listing agreement is provided in the report on Corporate Governance annexed to the Annual Report.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a detailed report on Corporate Governance forms a part of this Annual Report. A certificate from the auditors of the Company confirming their compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this Report.

Management Discussion and Analysis

Management Discussion and Analysis on matters related to business performance, as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges, is given in a separate statement which forms part of the Annual Report.

Personnel

Relationships with employees continued to be cordial. The HR policies of your Company were focused on the development potential of each employee. With this premise, a comprehensive set of HR policies were laid down, aiming to attract, retain and motivate employees at all levels. Information required under Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 as amended, is provided in the Annexure forming part of the Directors' Report. In terms of Section 219(1 )(b)(iv) of the Act, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary at the Registered Office of the Company.

Corporate Social Responsibility

Today's business environment demands that corporate play a pivotal role in shouldering social responsibility. You will be happy to note that in the year under review your company executed several Corporate Social Responsibility (CSR) programmes for the benefit of the communities where your company operates. Your company contributed actively towards community welfare measures, taking several initiatives related to education, health, environmental improvement and other development measures such as:

- Regular medical check up

- Blood donation camps

- Tree plantation programmes on World Environment Day and Earth Day to promote awareness about the effect of climate change and importance of environment protection

- Conducting Safety Awareness programmes regularly

- Support to sports activities including local sports championships for kabaddi and cricket.

- First aid centre at manufacturing facility

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings/Outgo

The information required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, with respect to conservation of energy, technology absorption and foreign exchange earnings/outgo is given in Annexure A, which forms part of this Report.

Risk and Concern

Changes in macro economic factors like inflation, interest rate, world trade, exchange rate, etc. also play an important role in our industry thereby affecting the operations of business. Any adverse change in the above may affect the performance of your Company. Your Company periodically reviews the risk associated with the business and takes steps to mitigate and minimise the impact of risk.

Quality Safety and environment

Your Company, in order to ensure highest standard of safety, has implemented and initiated various measures with respect to Quality, Safety and Environment Management Systems. The initiatives by your Company have been rewarded with several recognitions.

Internal control framework

Your Company conducts its business with integrity and high standards of ethical behavior and in compliance with the laws and regulations that govern its business. Your Company has a well established framework of internal controls in operation, including suitable monitoring procedures. In addition to the external audit, the financial and operating controls of your Company at various locations are reviewed by Internal Auditors, who report their observations to the Audit Committee of the Board.

Auditors' Report

The Board has duly examined the statutory auditor's report to accounts and clarifications, wherever necessary, have been included in the Notes to Accounts section of the Annual Report.

Auditors

The present auditors of the Company, M/s. A. Husein Noumanali & Co., Chartered Accountants, retire at the conclusion of the Annual General Meeting and being eligible, offer themselves for re-appointment. Your Directors recommend their appointment.

Appreciation and acknowledgement

Your Directors wish to place on record their sincere thanks to the following stakeholders:

- Customers, who continue to be delighted in the Company's range of products and their quality, and who therefore continue to patronise the Company's products despite competition

- Banks and financial institutions for their continued support

- Employees for their sincere efforts during the year under review.

Particulars as per the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988.

A) Conservation of Energy:

The Company's manufacturing operations are energy intensive. The concern for more efficient utilisation and conservation of energy has remained not only in the domain of the top management but has also percolated to the shop floor. Continuous improvements in the manufacturing processes and practices are carried out with one of the objectives of energy conservation. The Company has installed a 5.5 MW captive power plant. The waste heat generated from this captive power plant is used in spray dryers resulting in a daily RLNG saving of around 405 MMBTU.

B) Technology Absorption:

The state of the art Marble processing plant commenced operations during FY 2011-12. Major equipments have been imported from leading equipment manufacturers like Breton (Italy), Omis (Italy), Fraccarole E Balzan SPA (Italy) and Matec (Italy). The Company's technicians have been imparted training in maintenance of this equipment by supplier's technicians.

C) Foreign exchange earnings and outgo:

The information on foreign exchange earnings and outgo is furnished in the Notes to the Accounts.

For and on behalf of the Board

Sd/- Sd/-

Date: 27th July, 2012 Vivek Talwar Vishal Malik

Place: Mumbai Managing Director Director


Mar 31, 2011

Dear Members,

The Directors take pleasure in presenting the Annual Report with the audited statement of accounts 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:

Rs. in crores

For the year ended March 31 2011 2010

Gross Sales 728.55 465.33

Profit before interest depreciation and tax 79.16 28.08

Interest & Financial Charges (Net) 28.09 15.65

Depreciation 22.71 21.14

Profit/(loss) before tax 28.36 (8.71)

Provision for tax 2.05 -

Profit/(loss) after tax 26.31 (8.71)

Balance brought forward from previous year 112.91 121.62

Amount available for appropriation 139.22 112.91

Proposed dividend 1.63 -

Tax on proposed dividend 0.27 -

Transferred to General Reserve 10.00 -

Balance carried forward 127.32 112.91

Review of operations During the year under review, your Company has performed reasonably well. Your Company registered an increase of 56% growth in sales. Income from operations increased from Rs. 465.33 crores to Rs. 728.55 crores. Earnings before interest, depreciation and tax (EBIDTA) grew by 181% to Rs. 79.16 crores from Rs. 28.08 crs in the previous year due to higher sales. Profit after tax (PAT) was Rs. 26.31 crores as compared with a loss of Rs. 8.71 crores in the previous year.

Highlights 2010-11

The gross revenue for the year ended March 31, 2011 grew 56% to reach Rs. 728.55 crores, driven by increased sales in :

- Vitrified tiles sales up 53% to Rs. 308.76 crores

- Ceramic tiles sales up 21% to Rs. 222.75 crores

- Marble sales up 124% to Rs. 176.28 crores

- Real estate sales at Rs. 20.77 crores

Real Estate Foray

Biz Park at Thane (Maharashtra) admeasuring around 2 lakhs sq. ft. completed and around 0.41 lakhs sq. ft. was sold for Rs. 20.77 crores. Pursuant to the approval of honourable Bombay High Court, Particle Boards India Ltd (PBIL) has been amalgamated with Nitco Ltd. PBIL has a plot admeasuring 4.01 acres at Kanjurmarg (Mumbai) which will be developed after approvals of appropriate authorities.

Dividend

Your Board recommended a dividend of Re. 0.50 per share (no dividend declared in the previous year) and seeks approval for the same. If approved, the total outgo on account of the dividend will be Rs. 1.90 crores (inclusive of corporate tax on dividend).

Consolidated Financial Statements As required by the Listing Agreement with the Stock Exchanges and in accordance with the Accounting Standards AS-21 on consolidated financial statements, your Directors provide the audited annual consolidated financial statements in this annual report.

Directors

Mr. Atul Sud, Director of the Company, is due for retirement by rotation at the ensuing Annual General Meeting and, being eligible, offer himself for reappointment. Brief resume of Mr. Sud, the nature of his expertise in specific functional areas and the names of the companies in which he holds directorships as stipulated in Clause 49 of the Listing Agreement is provided in the report on Corporate Governance annexed to the annual report.

Directors' Responsibility Statement Pursuant to Section 217 (2AA) of the Companies Act, 1956, as amended by the Companies (Amendment) Act, 2000, the Directors confirm that:

a) In preparation of the annual accounts,

applicable accounting standards have been followed along with proper explanations relating to material departures;

b)Appropriate accounting policies have been selected and applied consistently and have 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 on March 31, 2011 and of the profit of the Company for the year ended March 31, 2011;

c) Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

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

Subsidiary companies In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company shall provide a copy of the annual report of its subsidiary companies, free of cost, as required under Section 212 of the Act to members on their written request to the

Company Secretary at the registered office of the Company. These documents will also be available for inspection by any shareholder at the registered office of your Company on any working day during business hours. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies.

During the year, Chongquig Nitco Marble Ltd., a wholly owned subsidiary registered in China ceases to be subsidiary as the Company closed down. Investment made in Chongquig has been received back.

A statement pursuant to Section 212 of the Companies Act, 1956, containing details of subsidiaries of the Company also forms part of this annual report.

Corporate Governance Pursuant to Clause 49 of the Listing Agreement with the stock exchanges, a detailed report on Corporate Governance forms a part of this annual report. A certificate from the auditors of the Company confirming their compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.

Management discussion and analysis Management discussion and analysis on matters related to business performance, as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges, is given in a separate statement which forms

part of the annual report.

Share Capital

Scheme of amalgamation of step down subsidiary, Particle Board India Ltd (PBIL) with the Company, approved by Honorable Bombay High Court vide its order dated July 08, 2011, has become effective from August 01, 2011. Appointed date for the scheme was April 01, 2010. Pursuant to the Scheme of Amalgamation, 4,76,580 equity shares of Rs. 10 each of the Company were allotted to the shareholders of the erstwhile PBIL on August 12, 2011. Pending allotment as on March 31, 2011, 4,76,580 equity shares have been shown as Share Capital Suspense.

Post allotment of equity shares as aforesaid, the share capital of the Company stands increased to Rs. 32.60 crores.

Personnel

Relationships with employees continued to be cordial. The HR policies of your Company were focused on the development potential of each employee. With this premise, a comprehensive set of HR policies were laid down, aiming to attract, retain and motivate employees at all levels. Information required under Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, is provided in the annexure forming part of the Directors' report. In terms of Section 219(1)(b)(iv) of the Act, the report and accounts are being sent to the shareholders excluding the aforesaid annexure. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary at the Registered Office of the Company.

Corporate Social Responsibility

Today's business environment demands that corporates play a pivotal role in shouldering social responsibility. You will be happy to note that in the year under review, your Company executed severa Corporate Social Responsibility (CSR) programmes for the benefit of the communities where your Company operates. Your Company contributed actively towards community welfare measures, taking several initiatives related to education, health, environmental improvement and other development measures such as :

- Regular medical check up

- Blood donation camps

- Tree plantation programmes on World Environment Day and Earth Day to promote awareness about the effects of climate change and importance of environment protection

- Conducting safety awareness programmes regularly

- Support to sports activities including loca sports championships for kabaddi and cricket

- First aid centre at manufacturing facility

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings/Outgo

The information required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, with respect to conservation of energy, technology absorption and foreign exchange earnings/outgo is given in Annexure A, which forms part of this report.



Auditors' Report

The Board has duly examined the statutory Auditor's report to accounts and clarifications, wherever necessary, have been included in the Notes to Accounts section of the annual report.

Auditors

The present auditors of the Company, M/s. A. Husein Noumanali & Co., Chartered Accountants, retire at the conclusion of the Annual General Meeting and being eligible, offer themselves for reappointment. Your Directors recommend their appointment.

Appreciation

Your Directors wish to place on record their sincere thanks to the following stakeholders:

- Customers, who continue to be delighted in the Company's range of products and their quality, and who therefore continue to patronise the Company's products despite competition

- Banks and financial institutions for their continued support

- Employees for their sincere efforts without which the Company could not have reported phenomenal growth during the year under review.

ANNEXURE TO THE DIRECTOR'S REPORT

Particulars as per the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988

A. Conservation of energy: The company's manufacturing operations are energy intensive. The concern for more efficient utilization and conservation of energy has remained not only in the domain of the top management but has also percolated to the shop floor. Continuous improvements in the manufacturing processes and practices are carried out with one of the objectives of energy conservation. The Company has also installed a 5.5 MW captive power plant. This has resulted in reducing the electricity cost to Rs. 4.76 per kwh from Rs. 5.80 kwh.

B. Technology absorption

The capacity was added for processing of marble. Major equipments have been imported from leading equipment manufacturer like Breton (Italy), Omis (Italy), Fraccarole E Balzan SPA(Italy) and Matec (Italy). The Company's technicians have been imparted training in maintenance of this equipment by supplier's technicians. Technology will be fully absorbed by next year.

C. Foreign exchange earnings and outgo

The information on foreign exchange earnings and outgo is furnished in the Notes to the Accounts.

For and on behalf of the Board

Sd/- Sd/-

Date: August 12, 2011 Vivek Talwar S.K. Bhardwaj

Place: Mumbai Managing Director Director

 
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