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Directors Report of Schablona India Ltd.

Mar 31, 2015

To the Members,

The Directors have pleasure in presenting their Thirty-First Annual Report together with the Audited Financial Statement of the Company for the financial year ended 31st March, 2015.

FINANCIAL SUMMARY OR HIGHLIGHTS

(Rs. in Lacs)

PARTICULARS 31.03.2015 31.03.2014

Gross Sales 4567.84 4109.86

Less: Excise Duty 180.72 177.78

Net Sales 4387.12 3932.08

Gross Loss for the year under review 351.33 95.85

Less: Depreciation for the year 52.22 62.91

Loss for the year before tax 403.55 158.76

Add: Deferred Tax Assets 58.24 71.08

Loss after Tax 345.31 87.68

Less: Balance brought forward from earlier years 450.33 538.01

Balance Carried to Balance Sheet 105.02 450.33

GENERAL DESCRIPTION

Your Company is in the highly creative Decorated Tile and Decal manufacturing. The concept has a tough competition with digital technology and copy from un-organised sector. But with our strong creative team base and expertise we expect to retain the growth.

OPERATION

Sale of Transfer Division during the year was near to flat with a slight growth of 0.70% i.e. Rs. 1006.72 Lac (net of excise) from Rs. 999.71 Lac (net of excise) in the previous year.

Sale of Decorated Tiles Division during the year increased to Rs. 3525.60 Lac from Rs. 3158.79 Lac in the previous year reflecting a growth of 11.61%.

MARKET AND FUTURE PROSPECTS

Ceramic Transfer Sheets (Decals)

Captive plant by buyers kept affecting our business prospects but simultaneously with the entry of few buyers in high end segment the requirement of Quality Decals is remain in the market where our Design Supremacy is established.

Your Company is responding to these challenges by adding new customer and increasing share of Decal consumption of each buyer and also increasing our reach to small buyers.

Decorated Tiles

The proliferation of Digital Printing on Tiles competed against our Designers Tiles and other medium like Glass, Resin, Steel, Aluminium and Sand Blasting also affected the business. The prevalent copying of our product by local suppliers affected our business badly.

Trading

With the launch of big Wall Tile range a growth in Trading Vertical was achieved and the same is expected to continue in coming financial year also. Because of KERASPANA brand tiles the addition of new Independent dealers is taking place and our network is growing which will help in improving the sales of our manufacturing verticals also.

The allied activity in Trading Vertical also continued successfully.

DIVIDEND

In view of losses for the year, your Directors do not recommend any dividend on equity shares for the year under review.

INVESTOR EDUCATION & PROTECTION FUND (IEPF)

The Company is required to transfer dividends which have remained unpaid/ unclaimed for a period of seven years to the IEPF established by the Central Government. Accordingly, the amount of unpaid/ unclaimed dividend for the financial year ended 31st March, 2008 is due for transfer to IEPF on or after 26th September, 2015.

PUBLIC DEPOSIT

Your Company has not accepted any fixed deposits within the meaning of Section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary, Joint venture or Associate Company.

AUDITORS

Statutory Auditor

M/s. A. K. Maheshwari & Associates, Chartered Accountants, Statutory Auditors of the Company, having Firm Registration No. 500106N, were appointed as Statutory Auditors for a term of 4 (four) consecutive years at the 30th Annual General Meeting (AGM) held on 16th September, 2014, to hold office till the conclusion of the 34th AGM of the Company, subject to ratification of their appointment at every AGM, in terms of the first proviso to Section 139 of the Companies Act, 2013, read with Rule 3(7) of Companies (Audit and Auditors) Rules, 2014.

In this regard the Company has received a letter from the Auditors conforming that they are eligible for appointment as Auditors of the Company under Section 139 of the Companies Act, 2013 and meet the criteria for appointment specified under Section 141 of the said Act.

Based on the recommendations by the Audit Committee, the Board of Directors recommend the ratification of appointment of M/s. A. K. Maheshwari & Associates, Chartered Accountants, Statutory Auditors of the Company by the Shareholders at the ensuing AGM.

All the items on which, comments have been made by the Auditors in their report to the Members are self-explanatory, as explained by way of notes to the accounts and does not contain any qualification, reservation or adverse remark, therefore needs no further explanation by the Board in terms of Section 134(3)(f)(i) of the Companies Act, 2013.

Secretarial Auditor

Your Board, during the year, appointed M/s. Drolia & Company, Practicing Company Secretaries, having Certificate of Practice No. 1362 as Secretarial Auditors on such remuneration as may be determined by the Board, for the financial year ended 31st March, 2015, to undertake the Secretarial Audit of the Company, pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The Secretarial Audit Report for the financial year 2014-15, in terms of Section 204(1) of the Companies Act, 2013, submitted by the said Auditors, forming part of this Report, is marked as 'Annexure A'. The said Report does not contain any qualification, reservation or adverse remark, therefore no need for any explanation/s by the Board in terms of Section 134(3)(f)(ii) of the Companies Act, 2013.

NUMBER OF BOARD MEETINGS

During the year 5 (five) Board Meetings were convened and held. Details of which are given in the Corporate Governance Report, forming part of this Report.

RISK MANAGEMENT

The Company has adopted the measures concerning the development and implementation of a Risk Management Policy in terms of Section 134(3)(n) of the Companies Act, 2013, after identifying the elements of risks which in the opinion of the Board may threaten the very existence of the Company itself. The Company has an elaborate Risk Management process of identification, assessment and prioritisation of risk followed by coordinated efforts to minimise, monitor and mitigate/control the probability and/or impact of unfortunate events or to maximise the realisation of opportunities. The Risk Management procedure is reviewed by the Audit Committee from time to time, to ensure that the executive management controls risks through means of a properly defined framework. Major risks identified are systematically addressed through mitigating actions on a continuing basis. Some of the identified risks relate to competitive intensity and cost volatility.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal control systems which commensurate with the size, scale and complexity of the operations of the Company.

RELATED PARTY TRANSACTIONS

All transactions entered with Related Parties during the financial year 2014-15 were on arm's length basis and were in the ordinary course of business. Further, there were no materially significant related party transactions during the year under review made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have potential conflict with the interest of the Company at large. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2, is not required.

Related Party Transactions Policy as approved by the Board has been uploaded on the Company's website www.schablona.in at the web link: http://www.schablona.in/vigil/party.pdf

BOARD EVALUATION

Clause 49 of the Listing Agreement mandates that the Board shall monitor and review the Board evaluation framework. Clause (p) of sub-clause 3 of Section 134 of the Companies Act, 2013, states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and the Directors individually. Schedule IV to the Companies Act, 2013, states that the performance evaluation of Independent Directors shall be done by the entire Board excluding the Directors being evaluated. Performance evaluation was made by the Board on the various parameters and criteria's governing performance of the Board and that of its committees and Directors and the same was taken on record. The criteria's for evaluation of the performance has been mentioned in the Corporate Governance Report forming part of this Report, under the Nomination & Remuneration Policy of the Company.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return as provided under sub-section (3) of Section 92 of the Companies Act, 2013, in Form MGT-9, in terms of Section 134(3)(a) of the Companies Act, 2013 forms part of this Report and is marked as 'Annexure B'.

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

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed hereto and forms part of this report and marked as 'Annexure C'.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declaration from each Independent Director under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence as stipulated under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Appointments

Mr. Satish C. Vishwakarma, was appointed as an Additional Director on the Board by the Board of Directors of the Company and was thereafter appointed as Regular Director and also as Key Managerial Personnel i.e. Whole-time Director, designated as Executive Director on Board w.e.f. 27th May, 2014 at the 30th Annual General Meeting of the Shareholders of the Company held on 16th September, 2014.

Mr. Satish C. Vishwakarma, Executive Director of the Company retire by rotation at the ensuing Annual General Meeting of the Company and, being eligible, offers himself for re-appointment.

Ms. Ritika Mansata, a Commerce Graduate and an Associate Member of the Institute of Company Secretaries of India, was appointed as Key Managerial Personnel, designated as Company Secretary, w.e.f. 11th June, 2014. She was also appointed as the Compliance Officer of the Company w.e.f. 30th July, 2014. Further, she was appointed as the Chief Financial Officer (CFO) of the Company and re-designated as Company Secretary and Chief Financial Officer of the Company w.e.f 31st March, 2015.

Ms. Abha Kabra, was appointed as an Additional Director under Section 161 of the Companies Act, 2013. A notice in writing was received from a Member along with requisite deposit under Section 160 of the Companies Act, 2013, proposing candidature of Ms. Abha Kabra for the office of Regular Director and also as an Independent Director of the Company, for a term of 5 (five) consecutive years i.e. from the 31st Annual General Meeting till the conclusion of the 36th Annual General Meeting of the Company in terms of Section 149(10) of the Companies Act, 2013, not liable to retire by rotation. Necessary resolution for obtaining Members approval has been incorporated in the Notice of the 31st Annual General Meeting of the Company.

Resignations

Mr. Anirudh Kabra, Independent Director of the Company, resigned from the Directorship of the Company, w.e.f. 21st March, 2015.

The Board placed on record its appreciation for the valued contribution made by him in the various deliberations, discussions and guidance during his association with the Company.

NOMINATION AND REMUNERATION POLICY

The Company's Policy on Director's appointment and remuneration including criteria's for determining qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 and Clause 49 of the Listing Agreement is stated in the Corporate Governance Report, forming part of this Report.

DIRECTORS RESPONSIBILITY STATEMENT

As required by Section 134(3)(c) of the Companies Act, 2013, the Board of Directors of the Company hereby state and confirm that:- (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the Directors had 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 and loss of the company for that period;

(c) the Directors had 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 had prepared the annual accounts on a going concern basis;

(e) the Directors had 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 had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

AUDIT COMMITTEE AND VIGIL MECHANISM

In compliance with the requirements of Section 177(8) of the Companies Act, 2013, the Audit Committee comprises of Mr. R.K. Borar as the Chairman of the Committee with Mr. N. Goenka and Ms. Abha Kabra as other Members of the Committee. More details on the Committee have been provided in the Corporate Governance Report, forming part of this Report. All recommendations made by the Audit Committee were accepted by the Board.

The Company has established a vigil mechanism and overseas through the Audit Committee, the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns and in certain cases have also provided direct access to the Chairman of the Audit Committee for reporting issues. The Whistle Blower Policy (Vigil Mechanism) is put on the website of the Company. More details about the Whistle Blower Policy have been provided in the Corporate Governance Report, forming part of this Report.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORT

A report on Corporate Governance along with Management Discussion and Analysis Report in terms of Clause 49 of the Listing Agreement is annexed hereto and forms an integral part of this Report.

PARTICULARS OF EMPLOYEES

Information required as per Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto as 'Annexure D', forming part of this Report.

During the year under review, there were no managerial personnel/employee whose information required to be provided under Rule 5, sub-rule 2 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

OTHER DISCLOSURES

I. No loans, guarantees and investments under Section 186 of the Companies Act, 2013 were made by the Company during the year under review, hence disclosure in terms of Section 134(3)(g) of the Companies Act, 2013 does not arise.

II. No issue of equity shares were made during the year under review with respect to differential rights, Employee Stock Options, Sweat Equity shares, Buy-back of shares and Bonus Issue under Companies (Share Capital and Debentures) Rules, 2014.

III. No Corporate Social Responsibility (CSR) initiatives have been undertaken by the Company, as Section 135 of the Companies Act, 2013 on CSR is not applicable.

IV. Business Responsibility Report as per Clause 55 of the Listing Agreement with the Stock Exchange, describing the initiatives taken by Company from an environmental, social and governance perspective is not applicable to the Company, as per SEBI Circular CIR/CFD/DIL/8/2012 dated 13 August, 2012.

V. There were no significant material orders passed by the Regulators / Courts during the financial year 2014-15 which would impact the going concern status of the Company and its future operations.

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

ACKNOWLEDGEMENT

Your Directors acknowledge with sincere gratitude the co-operation and assistance extended by the Central and State Governments, Financial Institutions, Banks, Customers, Dealers, Vendors and Employees of the Company.

For and on behalf of the Board

Place : New Delhi N. Goenka

Date : 18th May, 2015 Chairman


Mar 31, 2014

Dear members,

The Directors have pleasure in presenting their Thirtieth Annual Report together with the Audited Accounts of the Company for the financial year ended 31st March, 2014.

(Rs. in Lacs)

ACCOUNTS 31.03.2014 31.03.2013

Gross Sales 4109.86 3967.00

Less: Excise Duty 177.78 176.10

Net Sales 3932.08 3790.90

Gross Loss for the year under review 95.85 62.30

Less: Depreciation for the year 62.91 63.70

Loss for the year before tax 158.76 126.00

Add: Deferred Tax Assets 71.08 39.68

Loss after Tax 87.68 86.32

Less: Balance brought forward from 538.01 624.33 earlier years

Balance Carried to Balance Sheet 450.33 538.01

DIVIDEND

In view of losses for the year, your Directors do not recommend dividend on equity shares for the year under review.

GENERAL DESCRIPTION

The magic of digitally printed highlighters has started waning and market of third fire tiles has started coming back due to the limitations of printing in online highlighters. Your company experienced the effect in the last quarter. Effect of reversal trend will continue in coming time with the emergence of big sizes values added highlighters which are being accepted in the market. We are equipped to meet the requirement of the market and better results in this financial year is expected.

OPERATION

Transfer division recorded a growth in revenue by 14.70% i.e. from Rs. 871.58 lacs to Rs. 999.71 lacs.

Decorated Tile division has registered a slight growth of 3.92% i.e. from Rs. 3022.12 lacs to Rs. 3140.58 lacs. Effect of our new range of products which are being launched regularly and the synergy with the trends these products will continue to bring increased revenues and profits to the Company. Disruptive technological changes which were giving unfavorable trends against third fire has started reversing.

MARKET AND FUTURE PROSPECTS

Ceramic Transfer Sheets (Decals)

With a renewed focus on creativity and innovations in designs the Company maintained the growth this year also and will continue this year as well.

Still Ceramic transfer business is facing challenges owing to direct printing on cylindrical ware by glassware manufacturers and captive plant installation by some of bigger customer. By focusing on our expertise in precious metal (gold, platinum etc.) transfer manufacturing and our design supremacy your Company will be able to sustain to increase the business in near future.

Decorated Tiles

As expected the market started shifting back in favor of third fire decorated tiles and other value added segment for which we are better equipped. Effect of measures undertaken by your Company last year will reflect this year and in times to come also. Particular segment of the market is getting out of the digitally printed highlighters and murals which is also a favorable indication for decorative tiles business.

This vertical is expected to show a healthy growth during current financial year onwards.

Trading

With the positive response market has given, Keraspana is establishing its brand value and growing at a healthy pace.

Schablona Lounge concept is taking a better shape and more such lounges will come this year also at prominent cities and towns. Addition of Specific sizes which are getting good response will continue in this portfolio. These sizes are not easily available in the market and a gap is always there. The allied activities in Trading Vertical like Pencils, Resin borders, mosaics, sand blasting, sandwiched glass highlighters, toughened glass highlighters also continued successfully.

PUBLIC DEPOSIT

Your Company has not accepted any fixed deposits within the meaning of Section 58A of the Companies Act, 1956.

AUDITORS'' REPORT

All the items on which, comments have been made by the Auditors in their report to the Members are self explanatory, as explained by way of notes to the accounts and therefore needs no further explanation by the Board.

DIRECTORS

Mr. N. Goenka, Director of the Company retire by rotation at the ensuing Annual General Meeting of the Company and, being eligible, offers himself for re-appointment.

Mr. Anirudh Kabra and Mr. R. K. Borar, Independent Directors of the Company, liable to retire by rotation as per Companies Act, 1956, to be appointed as Independent Directors of the Company, for a term of 5 (five) consecutive years i.e. from 30th Annual General Meeting till the conclusion of 35th Annual General Meeting of the Company, in pursuant to Section 149(10) of the Companies Act, 2013, in respect of which notices has been received in writing from the Members under Section 160 of Companies Act, 2013, proposing candidature of Mr. Anirudh Kabra and Mr. R. K. Borar for the office of Independent Directors of the Company, not liable to retire by rotation.

Mr. G. L. Sultania and Mr. A. K. Beejawat, resigned from the Board w.e.f. 9th January, 2014 and 7th April, 2014 respectively. The Board placed on record its appreciation for the valued contribution made by them, in the various deliberations, discussions and guidance during their association with the Company.

AUDITORS

M/s. A. K. Maheshwari & Associates, Chartered Accountants, Statutory Auditors of the Company, retire at the ensuing Annual General Meeting and offer themselves for re-appointment and submitted requisite certificate pursuant to Section 139 of the Companies Act, 2013.

CORPORATE GOVERNANCE

A report on Corporate Governance along with Management Discussion and Analysis in terms of the Listing Agreement is annexed hereto and forms an integral part of this Report.

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

As 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, a statement showing particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is annexed hereto and forms part of this report.

PARTICULARS OF EMPLOYEES

Information as required under Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 in respect of Company''s employees is not being given as there is no employee covered under the prescribed limits there under during the year under review.

SECRETARIAL COMPLIANCE CERTIFICATE

Your Directors are pleased to annex the Secretarial Compliance Certificate for the year 2013-14, forming part of Directors'' Report, pursuant to the provisions of Section 383A of the Companies Act, 1956.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with the proper explanation relating to material departures, if any ;

(ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of the affairs of the Company at the end of the financial year on 31st March, 2014 and of the loss of the Company for that period ;

(iii) the Directors had taken proper and sufficient care for the 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 ;

(iv) the Directors had prepared the annual accounts on a going concern basis.

ACKNOWLEDGEMENT

Your Directors acknowledge with sincere gratitude the co-operation and assistance extended by the Central and State Governments, Financial Institutions, Banks, Customers, Dealers, Vendors and Employees of the Company.

For and on behalf of the Board

Place : Noida N. Goenka Date: 27th May, 2014 Chairman


Mar 31, 2013

To the Members,

The Directors have pleasure in presenting their Twenty-Ninth Annual Report together with the Audited Accounts of the Company for the financial year ended 31st March, 2013.

(Rs. in Lacs) ACCOUNTS 31.03.2013 31.03.2012

Gross Sales 3967.00 4591.50

Less: Excise Duty 176.10 201.11

Net Sales 3790.90 4390.39

Gross Profit/(Loss) for the year under review (62.30) 265.77

Less: Depreciation for the year 63.70 68.75

Profit/(Loss) for the year (126.00) 197.02

Less: Provision for Income Tax 65.00

Add : Deferred Tax Assets 39.68 11.38

Less: Income Tax for earlier years 6.32

Profit/(Loss) after Income Tax (86.32) 137.08

Add: Balance brought forward from earlier years 624.33 541.62

Surplus available for appropriation 538.01 678.70

Appropriations

Proposed Dividend on Equity Shares 25.27

Tax on Proposed Dividend 4.10

Transferred to General Reserve 25.00

Balance Carried to Balance Sheet 538.01 624.33

Total 538.01 678.70

DIVIDEND

In view of losses for the year, your Directors do not recommend dividend on equity shares for the year under review.

GENERAL DESCRIPTION

Your Company has been through tough time due to disruptive technological changes in decorative tiles Industry enabling mainstream tiles giants to manufacture decorative tiles themselves. Thankfully a reversal in the trends is in sight, the market is slowly coming back to third fired tiles, the magic of Digitally printed highlighters is waning, the limitations of four color printing is becoming obvious and visible. On an optimistic note it can be said that the worst is over, and the second half of the current financial year is expected to deliver better results.

OPERATION

Transfer division recorded a growth in revenue by 15.25% i.e., from Rs. 756.28 lacs to Rs. 871.58 lacs.

Decorated Tile division has registered a de-growth to an extent of 18.95%, driven primarily by the disruptive technological changes forcing unfavorable trends against third fired decorated tiles. The Company has braced itself with a new range of products which are being launched every month and it is expected that in synergy with the trends these products will continue to bring increased revenues and profits to the Company.

MARKET AND FUTURE PROSPECTS

Ceramic Transfer Sheets (Decals)

Ceramic transfer business faced challenges owing to direct printing on cylindrical ware by glassware manufacturers. By adding new customers and reaching out to small buyers through distributors and agents the Company could achieve a healthy growth. Your Company was able to maintain its hold on the premium segment of transfers market through its Gold and Platinum based specialized decals.

With a renewed focus on creativity and innovations in designs the Company is confident of maintaining the growth this year as well.

Decorated Tiles

The market trend towards digitally printed highlighters, motifs and murals dominated the tile market leaving little scope for the third fire decoration units, yet the measures undertaken by your Company have enabled it to stay in the game, fortunately as was expected the market is shifting back in favor of third fired decorated tiles.

This vertical is expected to show a healthy growth during current financial year onwards.

Trading

Keraspana is growing at a healthy pace and getting established as a brand in its own right.

For a proper presentation of the brand and facilitating display and sales the Company has started work on Schablona lounges at prominent cities and towns all over India. These lounges will exclusively deal in Schablona products and Company hopes to establish Keraspana as a premium brand of Tiles. The allied activities in Trading Vertical like Pencils, Resin borders, mosaics, sand blasting, sandwiched glass highlighters, toughened glass highlighters also continued successful.

PUBLIC DEPOSIT

Your Company has not accepted any fixed deposits within the meaning of Section 58A of the Companies Act, 1956.

AUDITORS'' REPORT

All the items on which, comments have been made by the Auditors in their report to the Members are self explanatory, as explained by way of notes to the accounts and therefore needs no further explanation by the Board.

DIRECTORS

Mr. R. K. Borar and Mr. G. L. Sultania, Directors of the Company retire by rotation at the ensuing Annual General Meeting of the Company and, being eligible, offer themselves for re-appointment.

AUDITORS

M/s. A. K. Maheshwari & Associates, Chartered Accountants, Statutory Auditors of the Company, retire at the ensuing Annual General Meeting and offer themselves for re-appointment and submitted requisite certificate pursuant to Section 224(1B) of the Companies Act, 1956.

CORPORATE GOVERNANCE

A report on Corporate Governance along with Management Discussion and Analysis in terms of the Listing Agreement is annexed hereto and forms an integral part of this Report.

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

As 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, a statement showing particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is annexed hereto and forms part of this report.

PARTICULARS OF EMPLOYEES

Information as required under Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 in respect of Company''s employees is not being given as there is no employee covered under the prescribed limits there under during the year under review.

SECRETARIAL COMPLIANCE CERTIFICATE

Your Directors are pleased to annex the Secretarial Compliance Certificate for the year 2012-13, forming part of Directors'' Report, pursuant to the provisions of Section 383A of the Companies Act, 1956.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with the proper explanation relating to material departures, if any ;

(ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of the affairs of the Company at the end of the financial year on 31st March, 2013 and of the loss of the Company for that period ;

(iii) the Directors had taken proper and sufficient care for the 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 ;

(iv) the Directors had prepared the annual accounts on a going concern basis.

ACKNOWLEDGEMENT

Your Directors acknowledge with sincere gratitude the co-operation and assistance extended by the Central and State Governments, Financial Institutions, Banks, Customers, Dealers, Vendors and Employees of the Company. For and on behalf of the Board

Place : Noida G. L. Sultania

Date : the 29th May, 2013 Chairman


Mar 31, 2012

The Directors have pleasure in presenting their Twenty Eighth Annual Report together with the Audited Accounts of the Company for the financial year ended 31st March, 2012.

ACCOUNTS 31.03.2012 31.03.2011 (Rs. in Lacs) (Rs. in Lacs)

Gross Sales 4591.50 4170.43

Less: Excise Duty 201.11 103.46

Net Sales 4390.39 4066.97

Gross Profit for the year under review 265.77 316.44

Less: Depreciation for the year 68.75 64.39

Profit for the year 197.02 252.05

Less: Provision for Income Tax 65.00 72.00

Add/Less: Deferred Tax Assets/ Liability (11.38) 7.07

Less: Income Tax for earlier years 6.32 1.30

137.08 171.68

Add: Balance brought forward from earlier years 541.62 417.87

Surplus available for appropriation 678.70 589.55

Appropriations

Proposed Dividend on Equity Shares 25.27 25.27

Tax on Proposed Dividend 4.10 4.21

Transferred to General Reserve 25.00 18.45

Balance Carried to Balance Sheet 624.33 541.62

Total 678.70 589.55

DIVIDEND

Your Directors are pleased to recommend a dividend of Re. 0.80 per share on paid-up equity share of Rs. 4/- each of the Company for the year under review.

GENERAL DESCRIPTION

Your Company is in a highly creative fashion oriented decorated tiles and decal manufacturing. The changing trends and emergence of inkjet digital printing technology and easy plagiarisation of designs by the un-organised sector have taken a heavy toll on the company's growth and profitability. However, with our strong creative team base and expertise, we are confident, we will effectively meet all challenges and shall be able to retain our leadership position in the trade.

OPERATION

Sales of 'Decorated Tiles Division' grew by 11.82% from Rs. 3334.40 lacs to Rs. 3728.53 lacs but sales of "Transfer division" have registered a de growth of 9.83% owing to deployment of new technology based direct printing on cylindrical wares by one of our large clients, as also installation of an in house transfer making plant by yet another large client. Although a large number of small customers have been added, yet the slide of sales from Rs. 838.69 lacs to Rs. 756.28 lacs could not be prevented.

In view of growing demand of glass highlighters we have started in house manufacturing of same which will help us in eliminating the quality and availability issues which have been major concerns in the recent past.

We look forward to substantial improvement in the operations in the years to come.

MARKET AND FUTURE PROSPECTS

Ceramic Transfer Sheets (Decals)

Recent technological changes have struck at the very root of the ceramic transfers Industry and have made a severe impact on Company's revenue. Direct printing on Cylindrical Ware and captive plants by major buyers have adversely affected our business prospects but our unique expertise in gold and platinum based transfers manufacturing and our design supremacy is forcing some of them to come back to us for the requirement of specialised decals. We hope to increase business with them substantially in the near future.

Your Company is responding to the challenges by adding new customers and increasing share of decal consumption of existing buyers and also reaching out to small buyers through innovative logistics measures.

Decorated Tiles

Some fast raced sweeping changes have taken place in the trends and fashions concerning the way tiles are used in bathrooms. The deployment of digital printing machines by tile manufacturers has impacted the demand for third fired motifs and highlighters as these are being produced online now.

Your Company is taking urgent measures to retain it's hold and presence in the market through outsourcing of digital tiles as well as other ranges so as to keep its engagement with its customers alive and also place some innovative and unique concepts in the market. It has been observed that the fashion trends regarding usage of borders, motifs, and highlighters etc. have been cyclical in nature and it would not be long before the trend returns in favour of third fired products again.

Trading

With the launch of Full range of Wall Tiles under Keraspana brand a respectable growth has been registered in the year 2011-12 in the Trading vertical. With the positive response that market has given to this range, it is evident that the coming financial year should also be very good.

Launch of Keraspana has helped your Company expand it's dealer network outside of the present domain which will not only bring in more sales for the Trading vertical but will also help in improving the sales of manufacturing vertical as well.

The allied activities in Trading Vertical like Pencils, Resin borders, mosaics, sand blasting, sandwiched glass highlighters, toughened glass highlighters also continued successfully.

PUBLIC DEPOSIT

Your Company has not accepted any fixed deposits within the meaning of Section 58A of the Companies Act, 1956.

AUDITORS' REPORT

All the items on which, comments have been made by the Auditors in their report to the Members are self explanatory, as explained by way of notes to the accounts and therefore needs no further explanation by the Board.

DIRECTORS

Mr. Anirudha Kabra and Mr. A. K. Beejawat, Directors of the Company retire by rotation at the ensuing Annual General Meeting of the Company and, being eligible, offer themselves for re-appointment.

AUDITORS

M/s. A. K. Maheshwari & Associates, Chartered Accountants, Statutory Auditors of the Company, retire at the ensuing Annual General Meeting and offer themselves for re-appointment and submitted requisite certificate pursuant to Section 224(1B) of the Companies Act, 1956.

CORPORATE GOVERNANCE

A report on Corporate Governance along with Management Discussion and Analysis in terms of the Listing Agreement is annexed hereto and forms an integral part of this Report.

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

As 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, a statement showing particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is annexed hereto and forms part of this report.

PARTICULARS OF EMPLOYEES

Information as required under Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 in respect of Company's employees is not being given as there is no employee covered under the prescribed limits there under during the year under review.

SECRETARIAL COMPLIANCE CERTIFICATE

Your Directors are pleased to annex the Secretarial Compliance Certificate for the year 2011-12, forming part of Directors' Report, pursuant to the provisions of Section 383A of the Companies Act, 1956.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with the proper explanation relating to material departures, if any ;

(ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of the affairs of the Company at the end of the financial year on 31st March, 2012 and of the profit of the Company for that period ;

(iii) the Directors had taken proper and sufficient care for the 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 ;

(iv) the Directors had prepared the annual accounts on a going concern basis.

ACKNOWLEDGEMENT

Your Directors acknowledge with sincere gratitude the cooperation and assistance extended by the Central and State Governments, Financial Institutions, Banks, Customers, Dealers, Vendors and Employees.



For and on behalf of the Board

G. L. Sultania Chairman

Place : Noida Date : the 26th May, 2012

 
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