Directors Report of Murudeshwar Ceramics Ltd.

Mar 31, 2025

The Board of Directors of your company have pleasure in presenting 42^nd (Forty Second) Annual Report on the business and
operations of your Company along with the audited standalone and consolidated financial statements for the financial year ended
March 31, 2025.

Financial highlight/ results of the Company:

The financial highlight/ results on standalone and consolidated financial statements of the company during the year under review as
under:

Particulars	Financial year 2024-25		Financial year 2023-24
	Standalone	Consolidated	Standalone	Consolidated
Revenue from Operations	20286.37	20286.37	18630.82	18630.82
Other Income	490.53	490.53	444.39	444.39
Total Income	20776.90	20776.90	19075.21	19075.21
Operational Expenditure	16926.46	16926.46	16528.85	16528.85
Increase/(Decrease) in stock (WIP)	(100.04)	(100.04)	(906.38)	(906.38)
Profit/loss before Depreciation, Finance Costs, Exceptional items and Tax Expense	3950.48	3950.48	3452.74	3452.74
Less: Depreciation/ Amortisation/ Impairment	1449.59	1449.59	1200.02	1200.02
Profit /loss before Finance Costs, Exceptional items and Tax Expense	2500.89	2500.89	2252.72	2252.72
Less: Finance Costs	1305.94	1305.94	1103.82	1103.82
Profit/loss before Exceptional items and Tax Expense	1194.95	1194.95	1148.90	1148.90
Add/(less): Exceptional items	-	-	-	-
Profit /loss before Tax Expense	1194.95	1194.95	1148.90	1148.90
Tax Expense-	202.50	202.50	636.14	636.14
Profit /loss for the year (1)	992.45	992.45	512.76	512.76
Total Comprehensive Income/loss (2)	(23.72)	(23.72)	(26.68)	(26.68)
Total (1 2)	968.73	968.73	486.08	486.08
Profit/ loss of associate	-	(8.49)	-	11.01
Total Comprehensive Income/loss	968.73	960.24	486.07	497.09
Earning per equity Share : Basic	1.60	1.59	0.84	0.86
: Diluted	1.60	1.59	0.80	0.82

Financial highlights and State of Affairs of the Company:

The Company’s performance during the year ended March 31, 2025 in comparison with the year ended March 31, 2024 is
summarized as follows:

Consolidated:

^ Total income was Rs. 20776.90 lakhs in financial year 2024-25 as compared to Rs. 19075.22 in financial year 2023-24.

^ Profit before exceptional items and tax was Rs. 1194.95 lakhs in financial year 2024-25 as compared to Rs. 1148.90 in financial
year 2023-24.

^ Profit for the year attributable to shareholders of the Company was Rs. 960.24 lakhs in financial year 2024-25 as compared to
Rs. 497.06 lakhs in financial year 2023-24.

Standalone:

^ Total income was Rs. 20776.90 lakhs in financial year 2024-25 as compared to Rs. 19075.22 in financial year 2023-24.

^ Profit before exceptional items and tax was Rs. 1194.95 lakhs in financial year 2024-25 as compared to Rs. 1148.90 in financial
year 2023-24.

^ Profit for the year attributable to shareholders of the Company was Rs. 968.73 lakhs in financial year 2024-25 as compared to
Rs. 486.07 lakhs in financial year 2023-24.

The Company has complied with the applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations &
Disclosure Requirements), Regulations, 2015 in preparation of financial statements. The audited consolidated Balance Sheet as at
31^st March, 2025, consolidated statement of Profit and Loss for the year ended as on that date together with the Notes and Reports
of Auditors, Cash flow Statements, Management Discussion and Analysis Report forms part of the Annual Report. The financial
figures have been regrouped, wherever required, if any, in line with disclosure requirements under Schedule III of the Act.

Capital expenditure:

During the year under review your company has incurred a capital expenditure of Rs. 225.03 lakhs which comprises of Rs. 75.13
lakhs in in Plant and Machinery, Rs. 8.48 lakhs in Computers, Rs. 25.25 lakhs in Office Equipment, Rs. 9.75 lakhs in Furniture &
Fixtures, Rs. 0.00 lakhs in vehicles, Rs. 10.68 Leasehold improvements and Rs. 95.73 lakhs in Right to use.

Liquidity:

The principal sources of liquidity of the Company consist of cash and cash equivalents and the cash flow that we generate from our
business operations. For the financial year ended March 31, 2025 your company has Rs.67.87 lakhs in account of cash and cash
equivalents.

Basic EPS:

The Basic Earnings per Share has increased from 0.84 of previous year to 1.60 on Standalone basis and from 0.86 of previous year
to 1.59 on Consolidated basis for the financial year 2024-25.

Dividend:

Based on the Company’s performance, the Board of Directors of your Company recommends a final dividend of Rs.0.50 per equity
share (5%) of Rs.10 each, subject to the approval of the Members in ensuing AGM for the financial year 2024-25. In terms of Ind
AS 10, events after the reporting period as notified by the Ministry of Corporate Affairs, the proposed dividend is not recognised
as liability as on March 31, 2025.

In terms of the Finance Act, 2020, dividend income is taxable in the hands of the Members w.e.f. April 1, 2020 and the Company is
required to deduct tax at source (TDS) from dividend paid to the Members at prescribed rates as per the Income-tax Act, 1961. For
more details, please refer to note 27 in the notice portion.

Unclaimed or unpaid dividends as of March 2025:

Details of outstanding and unclaimed dividends previously declared and paid by the Company are given as under:

Financial Year	No. of shareholder	Amount of unpaid dividend
2022-23	1962	2,85,359.50
2023-24	2651	4,39,398.00

The details of the above are provided on the website of the Company at www.naveentile.com.

Transfer to Investor Education and Protection Fund:

As per the applicable provisions of the Companies Act 2013, read with IEPF Authority (Accounting, Audit, Transfer and Refund)
Rules 2016 (‘the Rules’), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established
by the Central Government, after completion of seven years and the shares in respect of which dividend has not been paid or
claimed by the members for seven consecutive years\ or more shall also be transferred to the Demat account created by IEPF
Authority. However, during the financial year 2024-25 under review no amount of unpaid or unclaimed dividend is pending for
seven consecutive years or more.

Brief description of the company’s working during the year/ the state of company’s affair prospects/ material changes and
commitments affecting financial position between the end of the financial year and date of the report:

There have been no other material changes and commitments which affect the financial position of the Company that have occurred
between the end of the financial year to which the financial statements relate and the date of this report.

Marketing strategy:

The Company’s market strategies are based on the sentiment of its customers. Promoting tiles effectively requires a mix of traditional
and modern marketing strategies to reach both professional buyers (like architects and contractors) and end consumers. Here are
some sales promotional activities the Company has taken up like Trade Shows and Exhibition, Product Samples and Mock-ups,
Discounts and Offers, Partnerships and Collaborations, Advertising, Educational Workshops and Webinars, Educational Workshops
and Webinars, Customer Testimonials and Case Studies, and Point-of-Sale Promotions.

Research and development (R & D):

The Company has dedicated Research & Development (R & D) wing which harness the powers of cutting-edge technology to
deliver something that enhances its customers’ comfort life. R & D wing of the Company ensure that what you get is fit for today
and ready for tomorrow. Every new product developed here is stringently checked for its quality, right from the raw material stage
itself to meet international standards and certification requirements.

Disclosures relating to Holding, Subsidiaries, Associates and Joint Ventures:

Your Company does not have any holding, Subsidiary and Joint Venture with other Company. RNS Power Limited is an Associate
company of your company in terms of section 2(6) of the companies Act, 2013. A statement containing the salient features of the
financial statements of the Company’s Associates is annexed in the prescribed format of Form AOC-1 in Annexure - 1.

Transfer to reserves:

The Board of Directors of your company has decided not to transfer any amount to the reserves out of the amount available for
appropriation.

Change in the nature of business if any:

There is no change in the nature of the business of the Company during the year under review.

Risk management:

The Risk Management Policy encompasses practices relating to the identification, analysis, evaluation, treatment, mitigation and
monitoring of the strategic, operational, and legal and compliance risks to achieving our key business objectives. The Company
has written Risk Management Policy in terms of the provisions of Section 134(3) (n) of the Companies Act, 2013, and the policy
has been placed on the Company’s website at www.naveentile.com also. The Audit Committee of the company has an additional
oversight in the area of financial risks and controls.

Board diversity:

During the year under review, your company have an appropriate mix of executive, non-executive, women and independent
directors to maintain the independence of the Board and separate its functions of governance and management. The Board had
eight members, two of whom are executive directors, two of whom are non-executive and non-independent directors and four are
independent directors. One of the independent directors of the Board is a woman as of March 31, 2025.

Appointment or reappointment of directors and key managerial personnel:

Shri Naveen Rama Shetty (00058779), Director of the Company, who is liable to retire by rotation based on his appointment
terms, offered himself for re-appointment at the ensuing Annual General Meeting (‘AGM’). The Board recommends for his re¬
appointments in the ensuing Annual General Meeting.

Shri Vishwanath Shetty (10694435): The Board of Directors at its meeting held on 01.08.2024 has appointed Shri Vishwanath
Shetty as an additional Director in the capacity of Independent Director and thereafter, the Company has obtained members’
approval at 41^st AGM held on 21^st September, 2024 for his appointment as an Independent Director.

Shri Vittal Kadekar Menaka Shetty (DIN: 10695560): The Board of Directors at its meeting held on 01.08.2024 has appointed
Shri Vittal Kadekar Menaka Shetty as an additional Director in the capacity of Independent Director and thereafter, the Company
has obtained members’ approval at 41^st AGM held on 21^st September, 2024 for his appointment as an Independent Director.

Smt. Shakunthala Shetty (DIN: 10704086): The Board of Directors at its meeting held on 01.08.2024 has appointed Smt.
Shakunthala Shetty as an additional Director in the capacity of Independent Director and thereafter, the Company has obtained
members’ approval at 41^st AGM held on 21^st September, 2024 for her appointment as an Independent Director.

Shri Annappayya (DIN: 03558522) w.e.f. 30.09.2024, Shri Sankappa K Shetty (DIN: 00894366) w.e.f. 30.09.2024, Dr. S. S.
Hiremath (DIN: 02272897) w.e.f. 30.09.2024 and Smt. Sarvani Alva (DIN: 06896403) w.e.f. 19.08.2024 have completed their
tenure of 10 years (5 5) being as an Independent Director on the Board of the Company.

In terms of Section 203 of the said Act, the Key Managerial Personnel of your Company are Shri Satish Rama Shetty - Chairman
& Managing Director; Shri Karan Satish Shetty - Whole Time Director; Shri Narayan Manjunath Hegde - Chief Financial Officer;
and Shri Ashok Kumar - Company Secretary

Declaration by Independent Directors:

The Company has received Disclosure of Interest in form MBP-1 as per section 184 of the act and intimation by all the Directors
for qualification to continue their directorship in form DIR-8 Pursuant to Section 164(2) and rule 14(1) of Companies (Appointment
and Qualification of Directors) Rules, 2014. Further, all the Independent Directors has submitted their confirmation confirming
that they meet the criteria of independence as prescribed under the Companies Act, 2013 and Regulations 25 of the SEBI (Listing
Obligations Disclosure Requirements) Regulations, 2015.

Evaluation of the Board’s performance:

The Board of directors has carried out an annual performance evaluation of its own performance, Board’s Committees and the
individual directors including the Chairman which include criteria for performance evaluation of the non-executive directors and
executive director in terms of the Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
and applicable provisions of the Companies Act, 2013 and rules made thereunder.

The performance of the board was evaluated by the Board after seeking inputs from all the directors on the basis of criteria such
as the board composition and structure, effectiveness of board processes, information and functioning. The performance of the
committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the
composition of committees, effectiveness of committee meetings, etc.

Further, in a separate meeting of independent Directors, performance of non-independent directors and the Board as a whole was
evaluated. Performance evaluation of Independent Directors was done by the entire Board, excluding the independent director
being evaluated.

Human Resources Development:

The focus of human resources development at your company is to ensure that we enable each and every employee to navigate the
next, not just for clients, but also for themselves. The Company is providing appropriate training and guidance to its employees
from time to time for sharpen their reskill and making them more valuable for the Company.

Particulars of Employees and Remuneration:

The total numbers of employees during the year under review were 309. The information required under Section 197(12) of the Act
read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended hereto and
forms part of this Report as Annexure-2. Further, the information required under Rule 5 (2) and (3) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014, is provided in the Annexure forming part of this Report.

Number of meetings of the Board of Directors:

During the year under review, five Board Meetings were held. For further details, please refer to Report on Corporate Governance.
Committees of the Board:

The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority.
Details of composition, terms of reference and number of meetings held for respective committees are given in the Report on
Corporate Governance section.

The following Committees constituted by the Board and function according to their respective roles and defined scopes:

^ Audit Committee;

^ Nomination and Remuneration Committee;

^ Stakeholders Grievance Committee;

^ CSR Committee;

^ Executive Committee;

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo:

The Company is committed towards conservation of energy and climate action which is reaffirmed in its Environmental Sustainability
policy. The information required to be furnished pursuant to Section 134(3)(m) of the Companies Act, 2013, is appended hereto and
forms part of this Report as Annexure-3.

Remuneration policy for the directors, key managerial personnel and other employees:

In terms of the provisions of Section 178(3) of the Companies Act, 2013 and the applicable regulations of the SEBI (LODR)
Regulations 2015, the Board has adopted the Policy on Board Diversity and Remuneration Policy for Directors, Key Managerial
Personnel, and other employees of the Company.

The Nomination and Remuneration Committee (NRC) is responsible for formulating the policy relating to the remuneration of
the Directors, Key Managerial Personnel and other employees and the criteria for determining qualification, positive attributes,
recommendation for appointment of KMPs and Directors to the Board and also independence of a directors. The policy is available
on the company’s website at www.naveentile.com.

Particulars of contracts or arrangements with related parties referred to section 188 of the Companies Act, 2013 (the Act):

Pursuant to Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the resolution for
seeking approval of the Shareholders on material related party transactions is being placed at the 42^nd AGM.

All Related Party Transactions were approved by the Audit Committee and all related party transactions, that were entered into
during the financial year were on arm’s length basis and were in the ordinary course of business. The disclosure of Related Party
Transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is given in Annexure-4.

Corporate Social Responsibility (CSR):

In terms of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014,
the Company has duly constituted a Corporate Social Responsibility (CSR) Committee of the Board of Directors and also has
formulated a CSR Policy, indicating the activities to be undertaken by the Company.

The constitution of CSR Committee is disclosed in Corporate Governance Report. The CSR policy may be accessed on the
Company’s website at www.naveentile.com. The Statement of CSR for the financial year 2024-25 has been appended hereto and
forms part of this Report as Annexure-5.

Deposits:

In terms of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 the Company has not
accepted any deposits for the financial year ended March 31, 2025.

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status
and company’s operations in future:

During the year under review no orders were passed by any Courts or Tribunals impacting the going concern status and company’s
operations in future.

The detail of application made/ proceeding pending under the Insolvency and Bankruptcy Code, 2016.

The Company has not filed any application during the year under review and no proceeding is pending under the Insolvency &
Bankruptcy Code, 2016 (IBC) as at March 31, 2025.

The details of difference between amount of the valuation done at the time of one time settlement and the valuation done
while taking loan from the Banks or Financial Institutions along with the reasons thereof:

During the financial year ended March 31, 2025 under review no such events occurred.

Loans, securities or investments:

In terms of the Section 186 of the Companies Act, 2013 the Company, during the year under review, has provided an additional
Guarantee of Rs.100.00 Crore to the lenders on behalf RNS Infrastructure Limited jointly with other guarantors to the extent
aggregating to Rs. 450.00 Crores and the details of investments, securities and loans if any, are provided in the schedules to the
financial statements.

Credit Ratings:

During the year under review, ratings on the Bank facilities including Long Term and Short-Term Loans of your Company
by CRISIL is as under:

Total Bank Loan Facilities Rated Rs. 117.85 Crore

Long Term Rating Crisil BB/ Stable (Upgraded from “Crisil BB - / Stable”)

Short Term Rating Crisil A4 (Reaffirmed)

Annual Return and the web address:

In terms of Section 92(3) and section 134(3)(a) of the Companies Act, 2013 read with Rule 12 of the Companies (Management
and Administration) Rules, 2014, the Annual Return as on March 31, 2025 is available on the Company’s website on https://www.
naveentile.com/investor-relation.

Statutory Auditors:

M/s. K.G. Rao & Co, (Firm Registration No. 010463S), having office at No. #15, First Floor, 3rd Cross, Sampige Road,
Malleshwaram, Bangalore - 560003 has been appointed as the Statutory Auditors of the Company for the further period of five
consecutive years from the financial year 2024-25, who holds the office till the conclusion of the 46th Annual General Meeting to
be held in the year 2029 in terms of the section 139(1) of the Companies Act, 2013.

Auditor’s Report:

The Statutory Auditors of the Company has not reported any fraud as specified under Section 143(12) of the Companies Act, 2013.
No qualification, adverse remarks or disclaimer have been made by the Statutory Auditors with regard to the financial statements
for the financial year 2024-25.

Indian Accounting Standards:

The Ind AS are prescribed under Section 133 of the Companies Act, 2013, read with Rule 3 of the Companies (Indian Accounting
Standards) Rules, 2015 and the Companies (Indian Accounting Standards) Amendment Rules, 2016. The Company has prepared it
financial statements in accordance with Indian Accounting Standards (Ind AS), as per the provisions of the Companies Act, 2013
and guidelines issued by SEBI.

Secretarial Auditor and report:

In terms of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, the Company has appointed CS Shivappa Athani (M. No. 67536 and COP: 25196), Practicing Company Secretary to
undertake the secretarial audit of the Company for the financial year 2024-25. The Secretarial Audit Report is appended hereto and
forms part of this Report as Annexure-6.

Secretarial Standards:

The Company complies with all the applicable Secretarial Standards issued by the Institute of Company Secretaries of India from
time to time.

Cost records and cost audit:

The maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies
Act, 2013 are not applicable for the business activities carried out by the Company for the year ended March 31, 2025.

Internal Auditors:

In terms of the provisions of Section 138 of the Companies, 2013 and rules made thereunder the Company has appointed M/s. S
B Shetty & Co., (Firm Registration No. 003824S), as the Internal Auditor of your company for the year ended March 31, 2025.

Political Contribution:

In terms of Section 182 of the Companies Act, 2013, the Company has not made any political contribution to any political parties
during the financial year 2024-25.

Certificate pursuant to clause 10 of schedule v of SEBI (LODR), Reg, 2015:

The Company has obtained a certificate from Practicing Company Secretary in terms of sub clause (i) of clause 10 of Part C of
Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015,
with respect to disclosure/ declaration/ representation received from the directors and taken on record by the Board of Directors, as
on March 31, 2025. The above said Certificate is appended hereto and forms part of this report as Annexure-7.

None of the Directors of the Company has been debarred or disqualified from being appointed or continuing as director of
Companies by the SEBI/ Ministry of Corporate Affairs or any such other statutory authority.

Management Discussion and Analysis Report:

In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and other applicable laws, the Management
Discussion and Analysis Report pertaining to industry structure and developments, opportunities and threats, segment-wise
performance, outlook, risks and concerns, internal control systems and adequacy, discussion on financial and operational
performance for the financial year 2024-25 forming part of this report, has been given under separate section in this Annual Report.

Corporate Governance:

The Corporate Governance Report has been included in the Annual Report in terms of Regulation 27 and other applicable provisions
of SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015 and the relevant provisions of the Companies Act,
2013.

The Compliance Certificate from the auditors regarding compliance of conditions of Corporate Governance as stipulated in SEBI
(Listing Obligations and Disclosure Requirements) Regulation, 2015 for the financial year ended March 31, 2025 is annexed with
this report.

Policies:

The Company has written policies as applicable under the Companies Act, 2013 and rules made thereunder and in terms of the
Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended from
time to time. All the Policies are available on the website of the Company at www.naveentile.com.

Vigil Mechanism/ Whistle Blower Policy:

The Company has a Whistle Blower Policy with the necessary vigil mechanism for directors and employees in conformation with
Section 177(9) of the Act and Regulation 22 of SEBI Listing Regulations, to report concerns about unethical behaviour. This Policy
is available on the Company’s website at www.naveentile.com.

Prevention of Sexual Harassment of Women at Workplace Policy:

The Company has zero tolerance policy for sexual harassment at workplace. In terms of the Sexual Harassment of Women at
Workplace (Prevention, Prohibition & Redressal) Act, 2013 (‘Act’) and Rules made thereunder the Company has complied with
provisions relating to the constitution of Internal Complaints Committee and has taken appropriate action for the safeguard of its
employees.

Details of Adequacy of Internal Financial Control:

In terms of Sec.134 (5)(c) of the Companies Act, 2013 the Company has adopted policies and procedures for ensuring the orderly
and efficient conduct of its business, including adherence to the Company’s policies, safeguarding of its assets, prevention and
detection of fraud, error-reporting mechanisms, accuracy and completeness of the accounting records, and timely preparation of
reliable financial disclosures.

Familiarisation Program:

The Company has conducted a Familiarisation program with a view to familiarize the Independent Directors with the nature of
the industry in which the Company operates, business model of the Company and roles, rights, responsibilities of independent
directors in terms of regulations 25(7) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and all
new independent directors inducted into the Board has attended the program.

Share Capital:

During the year under review the company has not issued any shares and Authorised Share Capital and Paid-up Capital of the
Company are remain the same of Rs. 7162.00 Lakhs and the Paid-up Equity Share Capital of Rs. 6054.53 respectively.

Utilisation of Funds raised through Preferential allotment:

The Company has not raised any fund through Preferential allotment and thus Regulation 32 of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, is not applicable for the year ended March 31, 2025.

Prevention of Insider Trading:

In terms of Regulation 9(1) of SEBI (Prohibition of Insider Trading) Regulations, 2015 as the Board has laid down Internal Code
of Conduct for Prevention of Insider Trading in dealing with Securities of the Company and to regulate, monitor and report of
trading by its designated persons and immediate relatives of designated persons. All Directors and the designated employees
have confirmed compliance with the Code.

Further, in terms of regulation 3(5) and 3(6) of SEBI (Prohibition of Insider Trading) Regulations, 2015 a Software has been
installed to strengthen the internal controls for monitoring & enforcing compliance with the Insider Trading Code.

Cyber Security:

Your Company is committed to maintaining a robust cybersecurity program that protects information assets, including those of our
customers, partners, and employees from phishing attacks. Your Company recognize that cybersecurity is a shared responsibility,
and encourage all stakeholders to actively participate in upholding our security standards. During the year under review there is no
such incident happen for breach of data.

Directors’ Responsibility Statement:

The financial statements are prepared in accordance with the Indian Accounting Standards (Ind AS), the provisions of the Companies
Act, 2013 and guidelines issued by SEBI to the extent as they are applicable on the Company.

Further, the Board is of the opinion that the Company’s Internal Financial Controls were adequate and effective during the financial
year 2024-25 based on its framework on internal financial controls and compliance systems established and maintained thereof,
report by the internal, statutory, secretarial auditors and external consultants.

Further, in terms of Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability,
confirm that:

a. In the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no
material departures there from;

b. They have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied them consistently
and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit of the Company for that period;

c. They have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate
accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;

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

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

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

Appreciation and acknowledgement:

The Board places on record its thanks to its customers, vendors, investors, bankers, financial institution, employees, and all other
Stakeholders for their continued support during the year. The Board places on record an appreciation of the contribution made by
the employees at all levels as the Company consistent growth was made possible only by their hard work, solidarity, cooperation,
and support.

Further, the Board take this opportunity to extend their deep sense of gratitude to the Central and State Governments and their
departments and the Local Authorities for their continued support, we are deeply grateful for the confidence and faith that you have
always reposed in us.

By order of the Board By order of the Board

For Murudeshwar Ceramics Limited For Murudeshwar Ceramics Limited

Sd/- Sd/-

Satish Rama Shetty Naveen Rama Shetty

Chairman & Managing Director Director

DIN: 00037526 DIN: 00058779

Place: Bengaluru
Date: 29.05.2025

---

Mar 31, 2024

The Board of Directors of your company have pleasure in presenting 41^st (Forty First Annual Report) on the business and operations of your Company along with the audited standalone and consolidated financial statements for the financial year ended March 31. 2024.

Financial highlight/ results of the Company:

The financial highlight/ results on standalone and consolidated financial statements of the company during the year under review as under:

	(Rs. in Lakhs)
	Particulars	Financial year 2023-24		Financial year 2022-23
		Standalone	Consolidated	Standalone	Consolidated
	Revenue from Operations	18630.82	18630.82	17240.68	17240.68
	Other Income	444.39	444.39	100.11	100.11
	Total Income	19075.21	19075.21	17340.79	17340.79
	Operational Expenditure	16528.85	16528.85	14832.88	14832.88
	Increased Decrease) in stock (WIP)	(906.38)	(906.38)	(675.27)	(675.27)
	Profit/loss before Depreciation, Finance Costs, Exceptional items and Tax Expense	3452.74	3452.74	3183.18	3183.18
	Less: Depreciation/ Amortisation/ Impairment	1200.02	1200.02	1109.70	1109.70
	Profit /loss before Finance Costs, Exceptional items and Tax Expense	2252.72	2252.72	2073.48	2073.48
	Less: Finance Costs	1103.82	1103.82	1336.41	1336.41
	Profit/loss before Exceptional items and Tax Expense	1148.90	1148.90	737.07	737.07
	Add/(less): Exceptional items	-	-	-	-
	Profit /loss before Tax Expense	1148.90	1148.90	737.07	737.07
	Tax Expense-	636.14	636.14	76.77	76.77
	Profit /loss for the year (1)	512.76	512.76	660.30	660.30
	Total Comprehensive Income/loss (2)	(26.68)	(26.68)	(42.54)	(42.54)
	Total (1 2)	486.08	486.08	617.76	617.76
	Profit/ loss of associate	-	11.01	-	25.45
	Total Comprehensive Income/loss	486.07	497.09	617.76	643.21
	Earning per equity Share : Basic	0.84	0.86	1.08	1.13
	: Diluted	0.80	0.82	1.03	1.07

Operational performance in segments:

Despite of difficult times and multiple challenges we reported a healthy performance. The revenue from operation has increased by 8.06% at Rs. 18,630.82 lakhs in compared to Rs. 17,240.68 lakhs of the previous year. The Company has earned profit of Rs.497.09 lakhs after taking into consideration of profit from its associate in compared to profit of Rs. 643 .21 lakhs in the previous year.

Due to deferred tax provisions for the current year the profit has decreased by 21% in compared to previous year. High input costs, supply chain disruptions and economic uncertainty, significant escalations in raw material and energy Costs have also impacted the business profitability of tile industries.

The audited consolidated Balance Sheet as at 31* March, 2024, consolidated statement of Profit and Loss for the year ended as on that date together with the Notes and Reports of Auditors, Cash flow Statements, Management Discussion and Analysis Report forms part of the Annual Report. The financial figures have been regrouped, wherever required, if any, in line with disclosure requirements under Schedule III of the Act. The Company has complied with the applicable provisions of the Companies Act 2013 (the Act) and the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements), Regulations, 2015 (The Listing Regulations’) in preparation of Standalone and Consolidated financial statements.

The impact of Geopolitical tension:

The global economy has affected by geopolitical events both directly and indirectly through financial, trade and commodity price channels, increased restrictions due to tensions between countries has disrupted trade flows and cause supply chain problems even in third-party countries. Restrictions has also affected commodity prices and lead to shortages of key resources such as oil and gas, affecting industrial production worldwide.

Capital expenditure:

During the year under review your company has incurred a capital expenditure of Rs. 7745.42 lakhs which comprises of Rs. 6858.53 lakhs in in Plant and Machinery, Rs. 2.73 lakhs in Computers, Rs. 26.26 lakhs in Office Equipment, Rs. 1.30 lakhs in Furniture & Fixtures, Rs. 4.00 lakhs in vehicles, Rs. 13.87 Leasehold improvements and Rs. 160.00 lakhs in Right to use.

Liquidity:

The Company maintains sufficient cash to meet the Company’s business requirements and also to cover financial and business nsks and to support future growth. The principal sources of liquidity of your Company consist of cash and cash equivalents and the cash flow that we generate from our business operations. For the financial year ended March 31, 2024 your company has Rs.1439.01 lakhs in account of cash and cash equivalents.

Basic EPS:

The Basic Earnings per Share has decreased from 1.08 ofpreviousyearto 0.84 on Standalone basis and from 1.13 of previous year to 0.86 on Consolidated basis for the financial year 2023-24.

Dividend:

Based on the Company’s performance, the Board of Directors of your Company recommends a dividend of Rs.0.50 per equity share (5%) of Rs.10 each, subject to the approval of the Members in ensuing AGM for the financial year 2023-24.

In terms of the Finance Act, 2020, dividend income is taxable in the hands of the Members w.e .f. April 1, 2020 and the Company is required to deduct tax at source (TDS) from dividend paid to the Members at prescribed rates as per the Income-tax Act, 1961. For more details, please refer to note 27 in the notice portion.

Unclaimed or unpaid dividends as of March 2024:

Details of outstanding and unclaimed dividends previously declared and paid by the Company are given as under: .

	SI. No.	No. of shareholder	Amount of unpaid dividend as of 31.03.2024
	1	1962	2,85,359.50

The details of the above are provided on the website of the Company at www.naveentile.com.

Transfer to Investor Education and Protection Fund:

As per the applicable provisions of the Companies Act 2013, read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules 2016 (The Rules’), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government, after completion of seven years and the shares in respect of which dividend has not been paid or claimed by the members for seven consecutive years) or more shall also be transferred to the Demat account created by IEPF Authority. However, during the financial year 2023-24 under review no amount of unpaid or unclaimed dividend is pending for seven consecutive years or more.

Brief description of the company’s working during the year/ the state of company’s affair prospects/ material changes and commitments affecting financial position between the end of the financial year and date of the report:

The Board, at its meeting held on February 14,2024, has allotted 2850000 equity shares by conversion of equal number of warrants, convertible into equity shares to promoters’ group. The details of which has been given under the head of Share Capital of this report.

There have been no other material changes and commitments which affect the financial position of the Company that have occurred between the end of the financial year to which the financial statements relate and the date of this report.

Marketing strategy:

Promoting tiles effectively requires a mix of traditional and modern marketing strategies to reach both professional buyers (like architects and contractors) and end consumers. Here are some sales promotional activities Naveen Tiles has taken up in the last year:

Trade Shows and Exhibitions:

> Participate in Industry Trade Shows: Set up booths to showcase your latest tile designs and innovations. Offer live demonstrations of installations.

> Host Exclusive Events: Organize private events for architects, interior designers, and contractors to showcase new products. Product Samples and Mock-ups:

> Free Samples: Offer free samples to potential customers so they can see and feel the quality of your tiles.

> Sample Kits for Professionals: Provide sample kits to architects and interior designers for use in client presentations.

> Showrooms: Create stunning showrooms or experience centres where customers can see tiles installed in different settings.

> Online Marketing

> Website and E-Commerce: Maintain an attractive, user-friendly website with a comprehensive catalogue and e-commerce functionality.

> Social Media Campaigns: Use platforms like Instagram, Facebook, and Pinterest to showcase your tiles in real-life installations and home improvement projects.

> SEO and Content Marketing: Develop a blog with content on tile trends, installation tips, and home decor ideas to attract organic traffic.

Discounts and Oifers:

> Seasonal Sales: Offer discounts during peak renovation seasons (spring and summer).

> Volume Discounts: Provide discounts for bulk purchases to attract contractors and large projects.

> Loyalty Programs: Implement loyalty programs for repeat customers and frequent buyers.

Partnerships and Collaborations:

> Collaborate with Interior Designers: Partner with interior designers and decorators to recommend your tiles to their clients.

> Builder Partnerships: Form partnerships with builders and contractors to use your tiles in new construction projects.

Advertising:

> Local Advertising: Use local newspapers, magazines, and radio to reach homeowners in your area.

> Online Ads: Invest in Google Ads and social media ads to target homeowners and professionals looking for tiles.

> Home Improvement Shows: Sponsor or advertise on home improvement TV shows and YouTube channels.

Educational Workshops and Webinars:

> Workshops for Installers: Offer training workshops for tile installers to familiarize them with your products.

> Webinars for Professionals: Conduct webinars for architects and interior designers on the latest trends and technologies in tiles.

Customer Testimonials and Case Studies:

> Showcase Customer Projects: Highlight customer projects on your website and social media.

> Video Testimonials: Create video testimonials from satisfied customers and industry professionals.

Point-of-Sale Promotions:

> In-Store Displays: Use eye-catching displays in retail stores to highlight new and popular products.

> Promotional Materials: Provide brochures, catalogues, and swatches to retail partners.

Corporate Social Responsibility (CSR):

> Eco-Friendly Products: Promote any eco-friendly tiles and sustainable practices to appeal to environmentally conscious consumers.

> Community Projects: Engage in community improvement projects where your tiles are used, showcasing your commitment to giving back.

Implementing a mix of these strategies can help increase brand visibility, attract new customers, and drive sales for a tiles company. Research and development (R & D):

The Research & Development wing of the Company harness the powers of cutting-edge technology to deliver something that enhances its customers’ comfort life. Every new product developed here is stringently checked for its quality, right from the raw material stage itself to meet international standards and certification requirements. R & D wing of the Company ensure that what you get is fit for today and ready for tomorrow.

Disclosures relating to Subsidiaries, Associates and Joint Ventures:

RNS Power Limited is an Associate company of your company in terms of section 2(6) of the companies Act, 2013. A statement containing the salient features of the financial statements of the Company’s Associates is annexed in the prescribed format of Form AOC-1 in Annexure -1.

Transfer to reserves:

The Board of Directors of your company has decided not to transfer any amount to the reserves out of the amount available for appropriation.

Change in the nature of business if any:

There is no change in the nature of the business of the Company during the year under review.

Risk management:

The Risk Management Team of the company ensures that the Company has appropriate and effective risk management systems which carries out risk identification, assessment and ensures that risk mitigation plans are in place. The Company has written Risk Management Policy in terms of provisions of Section 134(3) (n) of the Companies Act, 2013, and the policy has been placed on the Company’s website at www.naveentile.com also. The Audit Committee of the company has additional oversight in the area of financial risks and controls.

Board diversity:

During the year under review, your company have an appropriate mix of executive, non-executive, women and independent directors to maintain the independence of the Board and separate its functions of governance and management. The Board had nine members, two of whom are executive directors, two of whom are non-executive and non-independent directors and five are independent directors. One of the independent directors of the Board is a woman as of March 31, 2024,

Appointment or reappointment of directors and key managerial personnel:

Shri Sunil Rama Shetty (00037572), Director of the Company, who is liable to retire by rotation based on his appointment terms, I offered himself for re-appointment at the ensuing Annual General Meeting (¹AGM’). The Board recommends for his re-appointments in the ensuing Annual General Meeting.

Shri Ravindra Bhandary (07646192): The Board of Directors at its meeting held on 14.02.2024 has appointed Shri Ravindra Bhandary as an additional Director in the capacity of Independent Director and thereafter, the Company has obtained members’ approval on 23.03.2024 by way of postal ballot for appointment of Shri Ravindra Bhandary as an Independent Director.

Shri Sathya Murthy Padaki (08276537): Shri Sathya Murthy Padaki has resigned from the post of Independent Director w.e.f. I 06.08.2023 due to his personal reason and old age.

In terms of Section 203 of the said Act the Key Managerial Personnel of your Company are Shn Satish Rama Shetty - Chairman & Managing Director; Shri Karan Satish Shetty - Whole Time Director; Shn Narayan Manjunath Hegde - Chief Financial Officer; and Shri Ashok Kumar - Company Secretary

Declaration by Independent Directors:

All the Independent Directors has submitted their confirmation confirming that they meet the criteria of independence asprescnbed under the CompaniesAct, 2013 and Regulations 25 of the SEBI (Listing Obligations Disclosure Requirements) Regulations. 2015.

The Company has received Disclosure of Interest in form MBP-1 as per section 184 of the act and intimation by all the Directors for qualification to continue their directorship in form DIR-8 Pursuant to Section 164(2) and rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014.

Evaluation of the Board’s performance:

In terms of the CompaniesAct, 2013 and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Board has carried out an annual performance evaluation of its own performance, its Committees and the Directors including the Chairman which include criteria for performance evaluation of the non-executive directors and executive director. In a separate meeting of independent Directors, performance of non-independent directors and the board as a whole was evaluated. Performance evaluation of Independent Directors was done by the entire Board, excluding the independent Director being evaluated.

Human Resources Development:

Human resource development (HRD) refers to the organization’s plan to help employees develop their abilities, skills, and knowledge. The Company is providing appropriate training and guidance to its employees from time to time for reskill them and making them for more valuable for the Company. The focus of human resources development at your company is to ensure that we enable each and every employee to navigate the next, not just for clients, but also for themselves.

Particulars of Employees and Remuneration:

The information required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended hereto and forms part of this Report as Annexure-2. The information required under Rule 5 (2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in the Annexure forming part of this Report. The total numbers of employees during tlie year under review were 302.

Number of meetings of the Board of Directors:

During the year under review, four Board Meetings were held. For further details, please refer to Report on Corporate Governance. Committees of the Board:

The following Committees constituted by the Board and function according to their respective roles and defined scopes:

>> Audit Committee of Directors

Nomination and Remuneration Committee of Directors Stakeholders Grievance Committee of Directors

? CSR Committee of Directors

? Executive Committee of Directors

The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority. Details of composition, terms of reference and number of meetings held for respective committees are given in the Report on Corporate Governance section.

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo:

The information required to be furnished pursuant to Section 134(3)(m) of the CompaniesAct, 2013, is appended hereto and forms part of this Report as Annexure-3.

Remuneration policy for the directors, key managerial personnel and other employees:

In terms of the provisions of Section 178(3) of the CompaniesAct, 2013 and SEBI (LODR) Regulation 2015, the Board has adopted the Policy on Board Diversity and Remuneration Policy for Directors, Key Managerial Personnel, and other employees of the Company.

The Nomination and Remuneration Committee (NRC) is responsible for formulating the criteria for determining qualification, positive attributes, recommendation for appointment of KMPs and Directors to the Board and also independence of a director. The NRC is also responsible for recommending to the Board a policy relating to the remuneration of the Directors, Key Managerial Personnel and other employees. The copy of the policy is available on the company website at www.naveentile.com.

Particulars of contracts or arrangements with related parties referred to section 188 of the Companies Act, 2013 (the Act):

All transactions entered with related parties were approved by the Audit Committee and all related party transactions, that were entered into during the financial year were on arm’s length basis and were in the ordinary course of business. The disclosure of Related Party Transactions as required under Section 134(3)(h) of the Act in Fonn AOC-2 is given in Annexure-4.

Corporate Social Responsibility (CSR):

Your Company has duly constituted a Corporate Social Responsibility (CSR) Committee of the Board of Directors and also has formulated a CSR Policy in terms of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, indicating the activities to be undertaken by the Company. The constitution of CSR Committee is disclosed in Corporate Governance Report. The CSR policy may be accessed on the Company''s website at www.naveentile.com. The Statement of CSR for the financial year 2023-24 has been appended hereto and forms part of this Report as Annexure-5.

Deposits:

Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 for the financial year ended March 31, 2024.

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future:

During the year under review no orders were passed by any Courts or Tribunals impacting the going concern status and company’s operations in future.

The detail of application made/ proceeding pending under the Insolvency and Bankruptcy Code, 2016.

The Company has not filed any application during the year under review and no proceeding is pending under the Insolvency & Bankruptcy Code, 2016 (IBC) as at March 31, 2024.

The details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof:

During the financial year 2023-24 under review no such events occurred.

Loans, securities or investments:

During the year under review the Company has not provided any Loans, guarantees and securities under section 186 of the Companies Act, 2013 except previous guarantee, provided jointly with other guarantors to the extent of Rs. 350.00 crores as per limit approved by the members of the Company, in favour of lenders on behalf of RNS Infrastructure Limited, a Group company of the Company and the details of investments and loans if any, are provided in the schedules to the financial statements.

Credit Ratings:

During the year under review, ratings on the Bank facilities including Long Term and Short-Term Loans of your Company by CRISIL is as under:

Total Bank Loan Facilities Rated Rs. 117.85 Crore

Long Tenn Rating CRISIL BB-/ Stable (Upgraded from CRISIL B /Stable)

Short Tenn Rating CRISIL A4 (Upgraded from CRISIL A4)

Annual Return and the web address:

In terms of Section 92(3) and section 134(3)(a) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return as on March 31, 2024 is available on the Company’s website on https;//www. naveentile.com/inve stor-relation.

Statutory Auditors:

M/s. K.G. Rao & Co, (Firm Registration No, 010463S), having office at No, #15, First Floor, 3rd Cross, Sampige Road, Malleshwaram, Bangalore - 560 003 was appointed as the Statutory Auditors of the Company for the period of five consecutive years, who holds office till the conclusion of this annual general meeting for the financial year 2023-24 in terms of the section 139(1) of the Companies Act, 2013.

After approval of the Audit Committee of the Company, the Board of directors recommends to the shareholders to appoint M/s. K.G. Rao & Co, (Firm Registration No. 010463S) as the statutory auditor of the Company for further period of five consecutive years from the conclusion of this 41^st Annual General Meeting till the conclusion of the 46^,h Annual General Meeting to be held in the financial year 2029-30 in terms of the section 139(1) of the Companies Act, 2013.

Further, the company has received a written consent and eligibility letter from M/s. K.G. Rao & Co, (Firm Registration No. 010463S), and they have also confirmed that their reappointment is in accordance with the provisions of Section 141 of the Companies Act, 2013 and rules made thereunder.

Further, pursuant to the provisions of Section 139, 142 and other applicable provisions, if any, of the Companies Act, 2013 and the rules made thereunder (including any statutory modification! s) or re-enactment thereof), pursuant to the recommendations of the Audit Committee of the Board of Directors, the Board of Directors be and is hereby authorised to review and fix the remuneration payable to them for the financial year ending March 31, 2025, as may be determined by the Audit Committee in consultation with the Auditors

Auditor’s Report:

The Statutory Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Companies Act, 2013. No qualification, adverse remarks or disclaimer have been made by the Statutory Auditors with regard to the financial statements for the financial year 2023-24.

Indian Accounting Standards:

The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS), the provisions of the Companies Act, 2013 and guidelines issued by SEBI. The Ind AS are prescribed under Section 133 of the Companies Act, 2013, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. Your Company has been adopted “IndAS” since April 01, 2017.

Secretarial Auditor and report:

In terms of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mrs. Swati R Hegde, Practicing Company Secretary to undertake the secretarial audit of the Company for the financial year 2023-24. The Secretarial Audit Report is appended hereto and forms part of this Report as Annexure-6.

Secretarial Standards:

The Company complies with all applicable mandatory secretarial standards issued by the Institute of Company Secretaries of India from time to time.

Cost records and cost audit:

During the year under review, the maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company.

Internal Auditors:

Your company appoints M/s. S B Shetty & Co., (Firm Registration No. 003824S), having office at No 1, 2^nd Floor, Time Square, Opp: Kadasiddheswar Arts College, Vidyanagar, Hubballi - 580031, as the Internal Auditor of your company every year and at present M/s. S B Shetty & Co. is the Internal Auditors of your Company.

Political Contribution:

Your Company has not made any political contribution to any political parties during the financial year 2023-24 under review. Certificate pursuant to clause 10 of schedule v of SEBI (LODR), Reg, 2015:

None of the Directors of the Company has been debarred or disqualified from being appointed or continuing as director of Companies by the SEBI/ Ministry of Corporate Affairs or any such other statutory authority. Your Company has obtained a certificate from

Practicing Company Secretary in terms of sub clause (1) of clause 1 Oof Part C of Schedule V of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations, 2015, with respect to disclosure/ declaration/ representation received from the directors and taken on record by the Board of Directors, as on March 31, 2024. The above said Certificate is appended hereto and forms part of this report as Annexure-7.

Management Discussion and Analysis Report:

Management Discussion andAnalysis Report pertaining to industry structure and developments, opportunities and threats, segment-wise performance, outlook, risks and concerns, internal control systems and adequacy, discussion on financial and operational performance for the financial year 2023-24 forming part of this report, has been given under separate section in this Annual Report in terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and other applicable laws.

Corporate Governance:

In terms of Regulation 27 and other applicable provisions of SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015 and relevant sections of the Companies Act, 2013 the Corporate Governance Report has been included in the Annual Report. The Compliance Certificate from the auditors regarding compliance of conditions of Corporate Governance as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 from the period 01.04.2023 to 31.03.2024 is annexed with this report.

Policies:

Your Company has written policies as require under the Companies Act, 2013 and rules made thereunder and the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended from time to time. All the Policies may be accessed on the website of the Company at www.naveentile.com.

Vigil Mechanism/ Whistle Blower Policy:

Pursuant to the provisions of Section 177(9) of the Companies Act, 2013, the Company has a written Vigil Mechanism/ Whistle Blower Policy which may be accessed at www.naveentile.com. The vigil mechanism was established for all its directors, employees, business associates including customers to approach the Chairman of the Audit Committee to make protective disclosures about the unethical behavior, actual or suspected fraud or violation of the Company’s Code of Conduct.

Prevention of Sexual Harassment of Women at Workplace Policy:

Your Company has complied with provisions relating to the constitution of Internal Complaints Committee and has taken appropriate action for the safeguard of its employees in tenns of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (’Act’) and Rules made thereunder. The Company has zero tolerance policy for sexual harassment at workplace.

Details of Adequacy of Internal Financial Control:

In terms of Sec.134 (5)(c) of the Companies Act, 2013 the Company has an Internal Financial Controls framework which commensurate with the size, scale, and complexity of the Company’s operations. In addition, there are operational controls and fraud risk controls, covering the entire spectrum of internal financial control for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information Internal Audit is carried out by external auditors and periodically covers all areas of business.

Familiarisation Program:

In terms of regulations 25(7) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the company has conducted a program which inter alia includes various presentation given by the practicing professionals, business heads and KMPs of the Company with a view to familiarize the Independent Directors with the company’s operations.

Share Capital:

During the year under review the company has allotted 2850000 equity shares by conversion of equal number of warrants at the Board meeting held on 14.02.2024 to promoter’s Group.

Thus, Authorised share capital remains the same of Rs. 7162.00 Lakhs and the Paid-up Equity Share Capital has been increased from Rs. 5769.53 lakhs to Rs. 6054.53.

Preferential allotment of Equity Shares on conversion of Share Warrants to the promoters’ group:

During the year under review the company has allotted 2850000 equity shares by conversion of equal number of warrants at the Board meeting held on 14.02.2024 as under:

	Name of Allottees (Promoters Group)	Equity Share allotted on conversion of warrants. (FY: 2023-24)	Face Value (In Rs.)	Issue Price (In Rs.)	Total Money Raised (Rs. in crore)
	Murudeshwar Power Corporation Private Limited	2137500 Share Warrants	10.00	47.00	10.05
	RNS Infrastructure Limited	712500 Share Warrants	10.00	47.00	03.35

Utilisation of Funds raised through Preferential allotment:

Pursuant to Regulation 32 of the Listing Regulations, utilisation of fund raised through Preferential allotment is as under:

					(Rs. in Crore)
	Particulars	Date of Allotment	Amount raised	Purpose of utilisation fund	Date of utilisation
	Preferential allotment of equity shares	14.02.2024	13.40	For Expansion Plan	31.03.2024

Prevention of Insider Trading:

In terms of the SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has made a Code of practices and procedures for fair disclosure of unpublished price sensitive information and prevention of insider trading and to govern the fair disclosure of unpublished price sensitive information and to attain equality of access to such information with a view to regulate trading in securities by the Directors and designated employees of the Company. All Directors and the designated employees have confirmed compliance with the Code.

Further, in terms of regulation 3(5) and 3(6) of SEBI (Prohibition of Insider Trading) Regulations, 2015 (PIT Regulations), the Company has purchased a software for recording of Name, PAN and email id etc. of the person to whom Unpublished Price Sensitive Information is shared for genuine purpose.

Directors’ Responsibility Statement:

In terms of framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, secretarial auditors and external consultants and the reviews performed by management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company’s Internal financial controls were adequate and effective during the financial year 2023-24.

In terms of Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

a. In the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures there from;

b. They have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c. They have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

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

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

“Internal financial controls” means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information

Appreciation and acknowledgement:

Your directors take this opportunity to extend their deep sense of gratitude to the Banks, Central and State Governments and their departments and the Local Authorities for their continued support and employees at all levels for their hard work, dedication and commitment and as well to our esteemed shareholders. Your directors would also like to record appreciation for the support and cooperation, your Company has been receiving from its suppliers, dealers, business partners and others associated with the Company. We are deeply grateful for the confidence and faith that you have always reposed in us.

---

Mar 31, 2018

The Directors have pleasure in presenting their 35^th (Thirty Fifth) Annual Report on the business and operations of the Company and the accounts for the financial year ended March 31, 2018.

FINANCIAL SUMMARY OR HIGHLIGHTS / PERFORMANCE OF THE COMPANY

The Board''s Report shall be prepared based on the standalone financial statements of the company.

(Rs. In lakhs)
Particulars	2018	2017
Sales Income Other Income Total Income Operational Expenditure Increase/(Decrease) in stock Finance Costs Depreciation and amortization Expenses Total Expenditure Profit / (Loss) for the year Tax Expense : Current Tax Prior period Tax Deferred Tax Less MAT Credit Entitlement	11,938.86 123.26	10,524.53 94.16
	12,062.12	10,618.69
	9,295.92 (517.57) 1,871.00 902.68	8,189.37 (295.44) 1,685.30 792.90
	11,552.03	10,372.13
	510.09 107.51 9.37 (99.00)	246.56 66.25 114.86 (66.25)
Total Tax Expenses	17.88	114.86
Profit / (Loss) after tax Other Comprehensive Income : a. Items that will not be reclassfied to profit or loss b. Income Tax relating to items that will not be reclassified to Profit or loss	492.21 24.24 (7.49)	131.70 4.78 (1.48)
Profit available for appropriation	508.96	135.00

OPERATIONAL PERFORMANCE

During the year under report the Company has produced 17,48,706 Sq.mtrs., of Vitrified tiles and has not produced any Ceramic tiles. Whereas compared to previous year production of Vitrified tiles is increased by 11.42% The sales income from Vitrified tiles has increased by 9.84% at Rs.7,189.91 lakhs compared to Rs.6,546.01 lacs of the previous year. Sales income from Ceramic tile segment including Gujarat Wall tiles segment has decreased by 26.44% at Rs.500.29 lakhs compared to Rs.680.12 lakhs of the previous year. The Granite division did not produce any slabs during the year due to non-availability of quality blocks.

In spite of the above increase and decrease in sales of the products, the Company has managed to earn a profit of Rs.508.96 lakhs (Previous year Rs.135.00 lakhs) which leads to an increase of 277% as compared to previous year 2016-17.

DIVIDEND

Despite of good profit, your Directors intent to reduce the finance cost as early as possible. Your Directors have decided to skip the dividend for the financial year 2017-18. Your directors are working towards achieving higher results during the forth coming years.

BRIEF DESCRIPTION OF THE COMPANY’S WORKING DURING THE YEAR / STATE OF COMPANY’S AFFAIR PROSPECTS

During the year under review, there are no any material changes and commitments affecting the financial position of the Company and also no change in the nature of business of the Company. Rising awareness towards personal hygiene along with massive schemes launched by the Government of India, the industry is expecting a positive growth in the near future. India''s domestic consumer market, increase in working-age population and urbanization is envisaged to augur well for the aesthetically and technically superior high-end Ceramic tiles in the urban segment than in the past. All the Vitrified and Ceramic Tiles are value-added products in the urban areas. There is increasing penetration of Ceramic tile as a preferred option in rural areas. Our Company has started producing the Vitrified tiles of double and multi charge tiles in its new unit and our Karaikal unit is functioning with improved gas allocation. The new unit at Sira Taluk, Tumkur District may fetch better market for quality products. The Company is expecting a better growth in the near future.

MARKETING STRATEGY

The Company continues the strategy of both project and retail marketing. The company is continuously penetrating new markets and developing new products. The company primarily focuses on local market where it can gain and the company has opened various showrooms. The Showroom sales is yielding satisfactory return in major urban and rural areas. The places where showrooms are not feasible the Company has expanded the dealership network. Depots located at various parts of the Country are providing quick services to the customers. The Company is focusing on Brand building according advertisements are given on regular basis to increase the sales. The incentive based payment to the marketing staff are fetching better returns to the company. Advertisements in newspapers and on hoardings are given on regular basis. Your Directors are hopeful of achieving better results in the year 2018-19.

RESEARCHAND DEVELOPMENT

Active team of ceramist to challenge customer demand & device cost effective input recipe solutions, The R & D wing of the Company is always trying to give new look and design of company''s products and has successfully developed new varieties of tiles with improved body matrix, quality and cost effective product range. Efforts to upgrade variety, body matrix, shades and designs to suit market sentiments is being consistently pursued. R&D wing is also exploring ways and means to improve operating efficiency.

DETAILS OF SUBSIDIARY / JOINT VENTURES / ASSOCIATE COMPANIES

The Company does not have any Subsidiary Joint ventures and associate Companies

RESERVES

The net movement in the major reserves of the Company for FY18 and the previous year are as follows :

(Rs. In lakhs)
Particulars	FY18	FY17
Capital Reserve Capital Redemption reserve Securities premium account General Reserve Profit and Loss Account	15.02 1,600.00 12,194.23 12,795.85 2,457.11	15.02 1,600.00 11,676.73 12,795.85 2,052.51

CHANGE IN THE NATURE OF BUSINESS, IF ANY

No Change in the nature of the business of the Company done during the year.

RISK MANAGEMENT

A statement indicating development and implementation of a risk management policy for the Company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In terms of Section 149 of the Companies Act, 2013 the Members, at their meeting held on 27th September 2014, appointed the following as an Independent Directors of the Company :

- Dr. S S Hiremath

- Shri Annappayya K

- Shri Sankappa Keremane Shetty

- Smt Sarvani Alva

In terms of Section 203 of the said Act, the following were designated as Key Managerial Personnel of your Company by the Board :

- Shri Satish Rama Shetty, Managing Director

- Shri N M Hegde, Chief Financial Officer

- Shri Lakshmisha Babu S, Company Secretary

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the Act and SEBI (LODR) Regulation 2015.

EVALUATION OF THE BOARD’S PERFORMANCE

Your Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the Non-Executive Directors and Executive Director. Pursuant to the provisions of Companies Act, 2013 and Regulation 25 of the Listing Regulations, the Board and the Nomination and Remuneration Committee have carried out annual performance evaluation of its own performance, the directors individually as well the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholder Committee. Each Board member completed a questionnaire providing feedback on the functioning and overall engagement of the Board and its committees on various parameters such as the composition, execution of specific duties, quality, quantity and timelines of flow of information, deliberations at the meeting etc., Besides this, one meeting of the individual directors with the Chairman of the Board was also conducted as a part of self-appraisal and peer group evaluation. The Directors were also asked to provide their valuable feedback and suggestions about the overall functioning of the Board and its committees. In a separate meeting of independent Directors, performance of non-independent Directors and the board as a whole was evaluated. Performance evaluation of Independent Directors was done by the entire Board, excluding the independent Director being evaluated.

PARTICULARS OF EMPLOYEES AND REMUNERATION

The information required under Section 197(12) of the Act read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended hereto and forms part of this Report as Annexure-1. The information required under Rule 5 (2) and (3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in the Annexure forming part of this Report. None of the Company''s employees were covered by the disclosure requirement. In terms of the first proviso to Section 136 of the Act, the Report and Accounts are being sent to the members excluding the aforesaid Annexure. Any member interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company. None of the employees listed in the said Annexure is related to any Director of the Company.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

Five Board Meetings were held during the year. For further details, please refer Report on Corporate Governance.

COMMITTEES OF THE BOARD

The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority. The following substantive Committees constituted by the Board function according to their respective roles and defined scope:

- Audit Committee of Directors

- Nomination and Remuneration Committee

- Stakeholders Grievance Committee

- Executive Committee of the Board

Details of composition, terms of reference and number of meetings held for respective committees are given in the Report on Corporate Governance.

The familiarization programs for Independent Directors were conducted by the Practicing Chartered Accountant Mr. B.C.Shetty and other Company''s professionals during the year.

The Board has laid down separate Code of Conduct for Non-Executive Directors and Senior Management personnel of the Company and the same are posted on the Company''s website. All Board Members and Senior Management personnel have affirmed compliance with the Code of Conduct. The Managing Director has also confirmed and certified the same. The certification is enclosed at the end of the Report on Corporate Governance.

THE DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO ARE AS FOLLOWS :

The information required to be furnished pursuant to Section 134(3) (m) of the Companies Act, 2013, is appended hereto and forms part of this Report as Annexure-2.

REMUNERATION POLICY FOR THE DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

In terms of the provisions of Section 178(3) of the Companies Act, 2013 and SEBI (LODR) Regulation 2015, the Nomination and Remuneration Committee (NRC) is responsible for formulating the criteria for determining qualification, positive attributes and independence of a Director. The NRC is also responsible for recommending to the Board a policy relating to the remuneration of the Directors, Key Managerial Personnel and other employees.

In line with this requirement, the Board has adopted the Policy on Board Diversity and Remuneration Policy for Directors, Key Managerial Personnel and other employees of the Company. The copy of policy''s are available on the company website www.naveentiles.co.in

RELATED PARTY TRANSACTIONS

All related party transactions, that were entered into during the financial year were on arm''s length basis and were in the ordinary course of business. The Company present a statement of all related party transactions before the Audit Committee. Prior approval of the Audit Committee is obtained for the transactions which are of foreseen and repetitive nature. Further, there are no significant related party transactions during the year under review made by the Company with promoters, Directors, Key Managerial Personnel or designated persons which may have a potential conflict with the interest of the Company at a large. The details of which is given as AOC-2 in Annexure-3.

DEPOSITS

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

LOANS, SECURITIES OR INVESTMENTS

During the year under report the Company has not provided any Loans, guarantees and securities under Section 186 of the Companies Act, 2013. The details of investments are provided in the schedules to the financial statements.

EXTRACT OF THE ANNUAL RETURN

Pursuant to Section 92 of the Companies Act, 2013 and Rule 12 of The Companies (Management and Administration) Rules, 2014, the extract of Annual Return in Form MGT-9, is appended hereto and forms part of this Report as Annexure-4.

STATUTORY AUDITORS

The present auditors M/s. K. A. Raghupathy & Co., Chartered Accountants (ICAI Registration No.011573S), No. 81, “SRI GURUKRUPA”, 2nd Main, 3rd A Cross, Nanjappa Layout, Vidyaranyapura, Bengaluru - 560 097, is holding office as the Statutory Auditors of the Company.

AUDITOR’S REPORT

No qualification, adverse remarks or disclaimer have been made by the Statutory Auditors with regard to the financial statements for the financial year 2017-18. The Statutory Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Companies Act, 2013.

INDIAN ACCOUNTING STANDARDS

Pursuant to the notification, issued by the Ministry of Corporate Affairs dated February 16, 2015 relating to the Companies (Indian Accounting Standard) Rules, 2015, your Company has adopted “Ind AS” with effect from April 01, 2017. The implementation of Ind AS is a major change process for which the Company had dedicated considerable resources. The impact of the Change on adoption of Ind AS has been assessed and the Company has adopted Ind AS from the financial year 2017-18.

SECRETARIAL AUDIT REPORT

Pursuant to the Provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Hemanth & Co., Practicing Company Secretaries to undertake the secretarial audit of the Company. The Secretarial Audit Report is appended hereto and forms part of this Report as Annexure-5.

CORPORATE GOVERNANCE

Pursuant to relevant regulations of SEBI (LODR) Regulations 2015 and relevant sections of the Companies Act, 2013, a Management Discussion and Analysis Statement, Report on Corporate Governance and Auditors'' Certificate are included in the Annual Report. The Compliance certificate from the auditors regarding compliance of conditions of Corporate Governance as stipulated in SEBI (LODR) Regulation, 2015 from the period 01.04.2017 to 31.03.2018 is annexed with the report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. In line with the Code of Conduct, any actual or potential violation, howsoever insignificant or perceived as such, would be a matter of serious concern for the Company. The role of the employees in pointing out such violations cannot be undermined. Pursuant to Section 177(9) of the Companies Act, 2013, a vigil mechanism was established for directors and employees to report to the management instances of unethical behavior, actual or suspected, fraud or violation of the Company''s code of conduct or ethics policy. The Vigil Mechanism provides a mechanism for employees of the Company to approach the Chairman of the Audit Committee of the Company.

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROL

Pursuant to Sec.134 (5)(c) your Company has proper and adequate system of internal controls. All transactions are authorized, recorded and reported correctly. In addition there are operational controls and fraud risk controls, covering the entire spectrum of internal financial control. The ERP system which the company has implemented has helped in further strengthening the Internal Financial Control.

FAMILIRISATION PROGRAM

With a view to familiarize the Independent Directors with the company''s operations, as required under listing regulation 25(7) the company has held various programmes ongoing basis which inter alia includes various presentation by practicing professionals, business heads and KMPs of the Company.

SHARE CAPITAL

During the year the Company has allotted 22,50,000 Equity Shares to Promoter/Promoter Group Company Murdeshwar Power Corporation Limited, hence the Paid up Equity Share Capital of the Company increased from Rs.4,296.17 lakhs to Rs.4,521.17 lakhs.

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company''s shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board Directors and the designated employees have confirmed compliance with the Code.

DIRECTORS’ RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, secretarial auditors and external consultants and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s Internal financial controls were adequate and effective during the financial year 2017-18. Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

a. In the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures there from;

b. They have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c. They have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

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

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

ACKNOWLEDGEMENTS

Your Directors acknowledge with appreciation, the support and co-operation extended to the Company by the Central Government, Government of Karnataka, Bankers, Financial Institutions, Dealers, Members and employees of the Company. Your Directors also wish to place on record their appreciation for the co-operation extended by M/s. SACMI, Italy and M/s. BRETON, Italy.

for and on behalf of the Board of Directors

Dr. R. N. SHETTY

^{Place : Ben}g^aluru Chairman

Date : August 10, 2018 (DIN 00038810)

---

Mar 31, 2016

The Directors have pleasure in presenting their Thirtythird Annual Report on the business and operations of the Company and the accounts for the financial year ended March 31, 2016.

FINANCIAL SUMMARY OR HIGHLIGHTS / PERFORMANCE OF THE COMPANY

The Board''s Report shall be prepared based on the stand alone financial statements of the company.

	(Rs. In	Lacs)
Particulars	2016	2015
Sales Income	11,502.23	13,807.12
Other Income	134.05	151.00
Total income	11,636.28	13,958.12
Operational Expenditure	8,797.13	9,761.91
Increase/(Decrease) in stock	(21.98)	946.61
Interest	1,978.22	2,122.20
Depreciation	713.63	925.80
Total Expenditure	11,467.00	13,756.52
Profit / (Loss) for the year	169.28	201.60
Less : Provision for tax	18.41	40.34
Less : MAT Credit	(18.41)	(40.34)
Less : Excess Provision written back	-	-
Add : Deferred Tax Assets	12.25	29.70
Profit / (Loss) after tax	157.03	171.90
Profit available for appropriation	157.03	171.90

OPERATIONAL PERFORMANCE

During the year under report the Company has produced 19,94,815 Sq.mtrs., of Vitrified tiles and has not produced any Ceramic tiles. Whereas compared to previous year production of Vitrified tiles is reduced by 19.56%. The sales income from Vitrified tiles has reduced by 20.87% at Rs.8,347.57 lakhs compared to Rs.10,548.87 lakhs of the previous year. Sales income from Ceramic tile segment has reduced by 22.53% at Rs.604.24 lakhs compared to Rs.780.00 lakhs of the previous year. The Granite division did not produce any slabs during the year due to non-availability of quality blocks.

In spite of the above hurdles the Company has managed to earn a profit of Rs.157.03 lakhs (Previous year Rs.171.90 lakhs) which leads to an decreased of 8.65% as compare to previous year 2014-15.

DIVIDEND

Since the Profits of the Company is minimal and your Directors intent to reduce the finance cost as early as possible. Your Directors have decided to skip the dividend for the year 2015-16. Your directors are working towards achieving higher results during the forth coming years.

BRIEF DESCRIPTION OF THE COMPANY''S WORKING DURING THE YEAR / STATE OF COMPANY''S AFFAIR PROSPECTS

The Tile industry is set to get boost from the Government initiative like Housing for all, reduced rate of interest for construction, Swatch Bharat and smart cities as well. Vitrified tiles as the product arm is growing rapidly in the terms of new capacities, sizes and technology. Vitrified tile sector, even in the slowdown of construction industry, promises slow and steady improvement in the overall demand. The product with its features has caught the eyes of developers and builders. Vitrified tiles can be manufactured in various designs like wooden, natural marble, granite and also metallic finish. The new Digital tiles Technology which gives a very rich look is slowly capturing the market. Now a days tiles are used as a decorating items in kitchen, bathroom or any other part of our home or for any exterior cladding of villas, bunglows, hotels, restaurants, hospitals etc. The Vitrified tiles double and multi charge tiles are also moving fast in the market. The Karaikal unit is functioning with improved gas allocation. The new unit at Sira Taluk, Tumkur District may fetch better market for quality products. The Company is expecting a better growth in the mere future.

MARKETING STRATEGY

In order to expand the marketing activity and also to display the large variety of products in both ceramic and vitrified segments, the company has planned to open more exclusive showroom during the current financial year. The Company has also introduced quality based incentives to the sales staff to boost sales. As a rationalization process in marketing, the management has reviewed the performance of each branch and such of those which are not performing to the expected level are given special support to review their efficiency, but those which are consistently under poor performance are closed. The Company has decided to create a brand image, accordingly Hoarding, Table Calendars, Newspapers advertisements are given on regular basis to increase sales. Your Directors are hopeful of achieving better results in the year 2016-17.

RESEARCH AND DEVELOPMENT

The R & D wing of the Company has successfully developed new varieties of tiles with improved body matrix, quality and cost effective product range. Efforts to upgrade variety, body matrix, shades and designs to suit market sentiments is being consistently pursued. R&D wing is also exploring ways and means to improve operating efficiency.

DETAILS OF SUBSIDIARY / JOINT VENTURES / ASSOCIATE COMPANIES

The Company does not have any Subsidiary, Joint ventures and associates Companies.

RESERVES

The net movement in the major reserves of the Company for FY16 and the previous year are as follows :

(Rs. In Lacs)
Particulars	FY16	FY15
Capital Reserve	15.02	15.02
Capital Redemption reserve	1,600.00	1,600.00
Securities premium account	11,184.53	11,184.53
General Reserve	12,795.85	12,795.85
Profit and Loss Account	1,813.14	1,279.03

CHANGE IN THE NATURE OF BUSINESS, IF ANY

No Change in the nature of the business of the Company done during the year.

RISK MANAGEMENT

A statement indicating development and implementation of a risk management policy for the Company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In terms of Section 149 of the Companies Act, 2013 the Members, at their meeting held on 27th September 2014, appointed the following as Independent Directors of the Company:

- Shri Sunder Naik

- Dr. S S Hiremath

- Shri Annappayya K

- Shri Sankappa Keremane Shetty

- Smt Sarvani Alva

In terms of Section 203 of the said Act, the following were designated as Key Managerial Personnel of your Company by the Board:

- Shri Satish Rama Shetty, Managing Director

- Shri N M Hegde, Chief Financial Officer

- Shri Lakshmisha Babu S, Company Secretary

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the Act and SEBI (LODR) Regulation 2015.

PARTICULARS OF EMPLOYEES AND REMUNERATION

The information required under Section 197(12) of the Act read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended hereto and forms part of this Report as Annexure-1. The information required under Rule 5 (2) and (3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in the Annexure forming part of this Report. In terms of the first proviso to Section 136 of the Act, the Report and Accounts are being sent to the members excluding the aforesaid Annexure. Any member interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company. None of the employees listed in the said Annexure is related to any Director of the Company.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

Five Board Meetings were held during the year. For further details, please refer Report on Corporate Governance.

COMMITTEES OF THE BOARD

The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority. The following substantive Committees constituted by the Board function according to their respective roles and defined scope:

- Audit Committee of Directors

- Nomination and Remuneration Committee

- Stakeholders Grievance Committee

- Executive Committee of the Board

Details of composition, terms of reference and number of meetings held for respective committees are given in the Report on Corporate Governance.

The familiarization programs for Independent Directors were conducted by the Practicing Chartered Accountant Mr. B.C. Shetty and other Company’s professionals during the year.

The Board has laid down separate Codes of Conduct for Non-Executive Directors and Senior Management personnel of the Company and the same are posted on the Company''s website. All Board Members and Senior Management personnel have affirmed compliance with the Code of Conduct. The Managing Director has also confirmed and certified the same. The certification is enclosed at the end of the Report on Corporate Governance.

THE DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO ARE AS FOLLOWS :

The information required to be furnished pursuant to Section 134(3) (m) of the Companies Act, 2013, is appended hereto and forms part of this Report as Annexure-2.

REMUNERATION POLICY FOR THE DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

In terms of the provisions of Section 178(3) of the Companies Act, 2013 and SEBI (LODR) Regulation 2015, the Nomination and Remuneration Committee (NRC) is responsible for formulating the criteria for determining qualification, positive attributes and independence of a Director. The NRC is also responsible for recommending to the Board a policy relating to the remuneration of the Directors, Key Managerial Personnel and other employees.

In line with this requirement, the Board has adopted the Policy on Board Diversity and Remuneration Policy for Directors, Key Managerial Personnel and other employees of the Company. The copy of policy''s are available on the company website www.naveentiles.co.in

RELATED PARTY TRANSACTIONS

All related party transactions, that were entered into during the financial year were on arm''s length basis and were in the ordinary course of business. The Company present a statement of all related party transactions before the Audit Committee. Prior approval of the Audit Committee is obtained for the transactions which are of foreseen and repetitive nature. Further there are no significant related party transactions during the year under review made by the Company with promoters, Directors, Key Managerial Personnel or designated persons which may have a potential conflict with the interest of the Company at a large. The details of which is given as AOC-2 in Annexure-3.

DEPOSITS

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

LOANS, SECURITIES OR INVESTMENTS

During the year under report the Company has not provided any Loans, guarantees and securities under Section 186 of the Companies Act, 2013. The details of investments are provided in the schedules to the financial statements.

EXTRACT OF THE ANNUAL RETURN

Pursuant to Section 92 of the Companies Act, 2013 and Rule 12 of The Companies (Management and Administration) Rules, 2014, the extract of Annual Return in Form MGT-9, is appended hereto and forms part of this Report as Annexure-4.

STATUTORY AUDITORS

The present auditors M/s. M A Narasimhan & Co., Chartered Accountants (ICAI Registration No.0023457S), Bengaluru, will be holding office as Auditors of the Company until conclusion of the ensuing Annual General Meeting. The said Auditors being eligible have consented to be reappointed. Necessary resolution will be placed before members for approval.

SECRETARIAL AUDIT REPORT

Pursuant to the Provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed HBP & Co., Practicing Company Secretaries to undertake the secretarial audit of the Company. The Secretarial Audit Report is appended hereto and forms part of this Report as Annexure-5.

CORPORATE GOVERNANCE

Pursuant to relevant regulations of SEBI (LODR) Regulations 2015 and relevant sections of the Companies Act, 2013, a Management Discussion and Analysis Statement, Report on Corporate Governance and Auditors'' Certificate are included in the Annual Report. The Compliance certificate from the auditors regarding compliance of conditions of Corporate Governance as stipulated in Clause 49 of the old listing agreement up to 30.11.2015 and SEBI (LODR) Regulation, 2015 from the period 01.12.2015 to 31.03.2016 is annexed with the report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. In line with the Code of Conduct, any actual or potential violation, howsoever insignificant or perceived as such, would be a matter of serious concern for the Company. The role of the employees in pointing out such violations cannot be undermined. Pursuant to Section 177(9) of the Companies Act, 2013, a vigil mechanism was established for directors and employees to report to the management instances of unethical behavior, actual or suspected, fraud or violation of the Company''s code of conduct or ethics policy. The Vigil Mechanism provides a mechanism for employees of the Company to approach the Chairman of the Audit Committee of the Company.

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROL

Pursuant to Sec.134(5)(c) your Company has proper and adequate system of internal controls. All transactions are authorized, recorded and reported correctly. In addition there are operational controls and fraud risk controls, covering the entire spectrum of internal financial control. The ERP system which the company has implemented has helped in further strengthening the Internal Financial Control.

FAMILIRISATION PROGRAM

With a view to familiarize the Independent Directors with the company’s operations, as required under listing regulation 25(7) the company has held various programmes ongoing basis which interalia includes various presentation by practicing professionals, business heads and KMPs of the Company.

SHARE CAPITAL

During the year the Company has not allotted any Equity Shares, hence the Paid up Equity Share Capital of the Company remained at the existing level of Rs.4,082.17 lakhs.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company does not have net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year. Henceforth the disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 shall be made as and when the Company meets the criteria specified above.

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company''s shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board Directors and the designated employees have confirmed compliance with the Code.

DIRECTORS'' RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, secretarial auditors and external consultants and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s Internal financial controls were adequate and effective during the financial year 2015-16.

Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

a. In the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures there from;

b. They have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c. They have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

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

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

ACKNOWLEDGEMENTS

Your Directors acknowledge with appreciation, the support and co-operation extended to the Company by the Central Government, Government of Karnataka, Bankers, Financial Institutions, Dealers, Members and employees of the Company. Your Directors also wish to place on record their appreciation for the co-operation extended by M/s. SACMI, Italy and M/s. BRETON, Italy.

for and on behalf of the Board of Directors

Dr. R. N. SHETTY

Place : Bengaluru Chairman

Date : July 30, 2016 (DIN 00038810)

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Mar 31, 2015

The Members,

Murudeshwar Ceramics Limited

The Directors have pleasure in presenting their 32nd Annual Report on the business and operations of the Company and the accounts for the financial year ended March 31,2015.

FINANCIAL SUMMARY OR HIGHLIGHTS / PERFORMANCE OF THE COMPANY

The Board''s Report shall be prepared based on the stand alone financial statements of the company.

(Rs In Lacs) Particulars 2015 2014

Sales Income 13,807.12 14,504.23

Other Income 151.00 101.22

Total income 13,958.12 14,605.45

Operational Expenditure 9,761.91 10,344.99

Increase/(Decrease) in stock 946.61 1,106.14

Interest 2,122.20 2,099.70

Depreciation 925.80 904.55

Total Expenditure 13,756.52 14,455.38

Profit / (Loss) for the year 201.60 150.07

Less Provision for tax 40.34 21.39

Less MAT Credit (40.34) (21.39)

Less Excess Provision written back - -

Add Deferred Tax Assets 29.70 33.27

Profit / (Loss) after tax 171.90 116.80

Profit available for appropriation 171.90 116.80

OPERATIONAL PERFORMANCE

During the year under report the Company has produced 24,79,752 Sq.mtrs., of Vitrified tiles and 75 Sq.mtrs. of Ceramic tiles. Whereas compared to previous year production of Vitrified tiles is reduced by 0.58% and production of Ceramic tile is reduced by 99.42%. The sales income from Vitrified tiles has reduced by 1.22% at Rs.10,568.89 lakhs compared to Rs.10,699.65 lakhs of the previous year. Sales income from Ceramic tile segment has reduced by 17.61% at Rs.780.00 lakhs compared to Rs.941.60 lakhs of the previous year. The Granite division did not produce any slabs during the year due to non-availability of quality blocks.

In spite of the above hurdles the Company has managed to earn a profit of Rs.171.90 lakhs (Previous year Rs.116.80 lakhs) which leads to an increase of 47.17% as compare to previous year 2013-14.

DIVIDEND

Since the Profits of the Company has started increasing slightly and the Directors intent to reduce the finance cost as early as possible. Hence your Directors have decided to skip the dividend for the year 2014-15. Your directors are working towards achieving higher results during the forth coming years.

BRIEF DESCRIPTION OF THE COMPANY''S WORKING DURING THE YEAR/STATE OF COMPANY''S AFFAIR PROSPECTS

The new and aesthetic products introduced by the Company are better accepted in the market. Various cost cutting measures undertaken by the Company both by reducing the operating cost on one hand and improving the working efficiency on the other are producing encouraging results. The new Digital tiles Technology which gives a very rich look is slowly capturing the market. Now a days tiles are used as a decorating items in kitchen, bathroom or any other part of our home or for any exterior cladding of villas, bunglows, hotels, restaurants, hospitals etc. The Vitrified tiles double and multi charge tiles are also moving fast in the market. The Karaikal unit is functioned with improved gas allocation. Gas allocation for Hubli Unit is expected to arrive at the earliest. The Company is expecting a better growth in the mere future.

MARKETING STRATEGY

With a view to reduce transportation and other operating costs to reach distant markets within in shortest possible time, the Company has started outsourcing production of select varieties of Vitrified tiles under our regular brand name to other distant manufacturing units and doing its trading activity. This will provide some cushion to price the product a little more competitively. Company''s representatives are on door to door leg work to enhance sales. Hoarding, Table Calendars, Newspapers advertisements are in place in order to increase sales. This Company continues with strategy of both project and retail market. Show room sales is yielding satisfactory return in major urban centers. Your Directors are hopeful of achieving better results in the year 2015-16.

RESEARCH AND DEVELOPMENT

The R & D wing of the Company has successfully developed new varieties of tiles with improved body matrix, quality and cost effective product range. Efforts to upgrade variety, body matrix, shades and designs to suit market sentiments is being consistently pursued. R&D wing is also exploring ways and means to improve operating efficiency.

DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES

The Company does not have any Subsidiary Joint ventures and associates Companies.

RESERVES

The net movement in the major reserves of the Company for FY15 and the previous year are as follows :

(Rs In Lacs)

Particulars FY15 FY14

Capital Reserve 15.02 15.02

Capital Redemption reserve 1,600.00 1,600.00

Securities premium account 11,184.53 11,184.53

General Reserve 12,795.85 12,795.85

Profit and Loss Account 1,279.03 1,107.13

CHANGE IN THE NATURE OF BUSINESS, IF ANY

No Change in the nature of the business of the Company done during the year.

RISK MANAGEMENT

A statement indicating development and implementation of a risk management policy for the Company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In terms of Section 149 of the Act, the Members, at their meeting held on 27th September 2014, appointed the following as Independent Directors of the Company :

- Shri Sunder Naik,

- Dr. S S Hiremath,

- Shri Annappayya K

- Shri Sankappa Keremane Shetty

- Smt Sarvani Alva

In terms of Section 203 of the Act, the following were designated as Key Managerial Personnel of your Company by the Board:

- Shri Satish Rama Shetty, CEO and Managing Director

- Shri N M Hegde, Chief Financial Officer

- Shri Lakshmisha Babu S, Company Secretary

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges.

In accordance with the requirements of the Act and the Articles of Association of the Company, Shri Sunil Rama Shetty retires by rotation and is eligible for re-appointment.

PARTICULARS OF EMPLOYEES AND REMUNERATION

The information required under Section 197 (12) of the Act read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended hereto and forms part of this Report as Annexure-1. The information required under Rule 5 (2) and (3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in the Annexure forming part of this Report. In terms of the first proviso to Section 136 of the Act, the Report and Accounts are being sent to the members excluding the aforesaid Annexure. Any member interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company. None of the employees listed in the said Annexure is related to any Director of the Company.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

Five Board Meetings were held during the year. For further details, please refer Report on Corporate Governance. COMMITTEES OF THE BOARD

The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority. The following substantive Committees constituted by the Board function according to their respective roles and defined scope:

- Audit Committee of Directors

- Nomination and Remuneration Committee

- Stakeholders Grievance Committee

- Executive Committee of the Board

Details of composition, terms of reference and number of meetings held for respective committees are given in the Report on Corporate Governance.

The familiarization programs for Independent Directors were conducted by the Company''s professional during the year.

The Board has laid down separate Codes of Conduct for Non-Executive Directors and Senior Management personnel of the Company and the same are posted on the Company''s website. All Board Members and Senior Management personnel have affirmed compliance with the Code of Conduct. The Managing Director has also confirmed and certified the same. The certification is enclosed at the end of the Report on Corporate Governance.

THE DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO ARE AS FOLLOWS :

The information required to be furnished pursuant to Section 134(3) (m) of the Companies Act, 2013, is appended hereto and forms part of this Report as Annexure-2.

REMUNERATION POLICY FOR THE DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

In terms of the provisions of Section 178(3) of the Act and Clause 49(IV)(B)(1) of the Listing Agreement, the Nomination and Remuneration Committee (NRC) is responsible for formulating the criteria for determining qualification, positive attributes and independence of a Director. The NRC is also responsible for recommending to the Board a policy relating to the remuneration of the Directors, Key Managerial Personnel and other employees.

In line with this requirement, the Board has adopted the Policy on Board Diversity and Remuneration Policy for Directors, Key Managerial Personnel and other employees of the Company. The copy of policy''s are available on the company website www.naveentiles.co.in

RELATED PARTY TRANSACTIONS

All related party transactions, that were entered into during the financial year were on arm''s length basis and were in the ordinary course of business. The Company present a statement of all related party transactions before the Audit Committee. Prior approval of the Audit Committee is obtained for the transactions which are of foreseen and repetitive nature. Further there are no significant related party transactions during the year under review made by the Company with promoters, Directors, Key Managerial Personnel or designated persons which may have a potential conflict with the interest of the Company at a large.

DEPOSITS

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

LOANS, SECURITIES OR INVESTMENTS

During the year under report the Company has not provided any Loans, guarantees and securities under section 186 of the Act. The details of investments are provided in the schedules to the financial statements.

EXTRACT OF THE ANNUAL RETURN

Pursuant to Section 92 of the Act and Rule 12 of The Companies (Management and Administration) Rules, 2014, the extract of Annual Return in Form MGT-9, is appended hereto and forms part of this Report as Annexure-3.

STATUTORY AUDITORS

The present auditors M/s. M A Narasimhan & Co., Chartered Accountants (ICAI Registration No.0023457S), Bengaluru, will be holding office as Auditors of the Company until conclusion of the ensuing Annual General Meeting. The said Auditors being eligible have consented to be reappointed. Necessary resolution will be placed before members for approval.

SECRETARIAL AUDIT REPORT

Pursuant to the Provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed HBP & Co., Practicing Company Secretaries (formerly known as Hemanth, Biswajit & Co) to undertake the secretarial audit of the Company. The Secretarial Audit Report is appended hereto and forms part of this Report as Annexure-4.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges and relevant sections of the Act, a Management Discussion and Analysis Statement, Report on Corporate Governance and Auditors'' Certificate, are included in the Annual Report. The Compliance certificate from the auditors regarding compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing agreement shall be annexed with the report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. In line with the Code of Conduct, any actual or potential violation, howsoever insignificant or perceived as such, would be a matter of serious concern for the Company. The role of the employees in pointing out such violations cannot be undermined. Pursuant to Section 177(9) of the Act, a vigil mechanism was established for directors and employees to report to the management instances of unethical behavior, actual or suspected, fraud or violation of the Company''s code of conduct or ethics policy. The Vigil Mechanism provides a mechanism for employees of the Company to approach the Chairman of the Audit Committee of the Company.

SHARE CAPITAL

During the year the Company had not allotted any Equity Shares, hence the Paid up Equity Share Capital of the Company remained at the existing level of Rs.4,082.17 lakhs.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company does not have net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year. Henceforth the disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 shall be made as and when the Company meets the criteria specified above.

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company''s shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board Directors and the designated employees have confirmed compliance with the Code.

DIRECTORS'' RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, secretarial auditors and external consultants and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s Internal financial controls were adequate and effective during the financial year 2014-15.

Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

a. In the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures therefrom;

b. They have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c. They have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

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

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

ACKNOWLEDGEMENTS

Your Directors acknowledge with appreciation, the support and co-operation extended to the Company by the Central Government, Government of Karnataka, Bankers, Financial Institutions, Dealers, Members and employees of the Company. Your Directors also wish to place on record their appreciation for the co-operation extended by M/s. SACMI, Italy and M/s. BRETON, Italy.

For and on behalf of the Board of Directors

Dr. R. N. SHETTY Place : Bengaluru Chairman Date : July 31, 2015 (DIN 00038810)

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Mar 31, 2014

The Members,

Murudeshwar Ceramics Limited

The directors present the 31st Annual Report of the Company for the year ended on March 31, 2014 :

FINANCIAL RESULTS

(Rs In Lacs) Particulars 2014 2013

Sales income 14504.23 14413.55

Other Income 101.22 62.40

Total income 14605.45 14475.95

Operational Expenditure 10344.99 11629.81

Increase/(Decrease) in stock 1106.14 (301.16)

Interest 2099.70 2155.77

Depreciation 904.55 903.12

Total Expenditure 14455.38 14387.54

Profit/(Loss) for the year 150.07 88.41

Less Provision for tax 21.39 11.45

Less MAT Credit (21.39) (11.45)

Less Excess Provision written back - (1.06)

Add Deferred Tax Assets 33.27 5.76

Sub Total 33.27 4.70

Profit/(Loss) after tax 116.80 83.71

Profit available for appropriation 116.80 83.71

OPERATIONAL PERFORMANCE

During the year under report the Company has produced 24,94,237 Sq.mtrs., of Vitrified tiles and 12,999 Sq.mtrs., of Ceramic tiles. Whereas compared to previous year production of Vitrified tiles is reduced by 19.69% and production of Ceramic tile is reduced by 95.17%. The sales income from Vitrified tiles has reduced by 11.07% at Rs.10,699.65 lakhs compared to Rs.12,030.95 lakhs of the previous year. Sales income from Ceramic tile and Gujarat Wall Tiles segment has reduced by 38.42% at Rs.941.60 lakhs compared to Rs.1,528.98 lakhs of the previous year. The Granite division did not produce any slabs during the year due to non-availability of quality blocks.

In spite of the above hurdles the Company has managed to earn a profit of Rs.116.80 (Previous year Rs.83.71 lakhs) which leads to an increase of 39.52% as compare to previous year 2012-13. Since the Profits of the Company has started increasing slightly and the Directors intent to reduce the finance cost as early as possible. Hence your Directors have decided to skip the dividend for the year 2013-14. Your directors are working towards achieving higher results during the forth coming years.

PROSPECTS

New varieties formats, designs and shades are being introduced from time to time. Products used at Commercial complexes, forums, malls etc. are likely to boost the sales and increase the customer base. Maximum efforts are being made to expand our market in Southern India in order to save the cost of transportation. Since the market in rural India is increasing door to door sales promotion on leg work is also put in place. Various cost cutting measures very being implemented to increase profits. Consumer friendly lending policies of Banks and encouragement from the Government for the housing sector have been contributory factors for the sustained growth of the tiles industry. The new Digital tiles Technology which gives a very rich look is slowly capturing the market. The Vitrified tiles double and multi charge tiles are also moving fast in the market. The Karaikal unit is functioned with improved gas allocation. Gas allocation for Hubli Unit is expected to arrive on December 2014. The Company is expecting a better growth in the mere future.

MARKETING STRATEGY

This Company continues with strategy of both project and retail market. Show room sales is yielding satisfactory return in major urban centers. In other places wherever show rooms are not feasible the company has closed down those show rooms and has been expanding dealership network. Depots opened at different parts of the Country are lending support for quick and sustained service to customers. The sales team has developed personal contact with Architects and Builders who influence the decision making. The rapport built shows the attitude and reaction of the Architect towards our product. Company''s representatives are on door to door leg work to enhance sales. Hoarding, Table Calenders, Newspapers advertisements are in place in order to increase sales.

Your Directors are hopeful of achieving better results in the year 2014-15.

RESEARCH AND DEVELOPMENT

The R & D wing of the Company is successful in adaption of Feldspar Processing plant to remove the inbuilt iron contamination to enhance the brightness of Vitrified tile production. As usual R & D wing is continuously concentrating on reduction of power and fuel in the manufacturing process. The R & D wing is also concentrating on inventing new products, upgrade variety, body matrix, shades and designs to suit market sentiments.

INCREASE IN THE SHARE CAPITAL

During the year the Company had allotted 20,35,000 Equity Shares upon conversion of its second tranche of 20,35,000 Convertible Share Warrants into 20,35,000 Equity Shares to Murdeshwar Power Corporation Limited a promoter and promoter group Company, hence the Paid up Equity share capital of the Company increased to Rs.4,082.17 lakhs.

DIRECTORS

Shri Kudlu Sunder Naik, Dr. Shivabasayya Siddaramayya Hiremath, Shri Annappayya Kundapur and Shri Sankappa Keremane Shetty was appointed as Independent Directors of the Company for a period of five consecutive years with immediate effect in order to comply with the provisions of the Section 149 and other applicable provisions/rules of the Companies Act 2013 read with Schedule IV of the said Act.

The Board has appointed Smt Sarvani Alva as Additional Director with effect from July 31, 2014 Pursuant to Section 161 of the Companies Act, 1956 the term of such additional director is valid upto the date of ensuing Annual General Meeting. Hence necessary resolution is placed before the members for approval of the said Director with immediate effect.

Shri Naveen Rama Shetty retires by rotation and being eligible offer himself for re-appointment.

Brief personal details of above said directors are furnished in the Corporate Governance Report which forms part of this Annual Report.

AUDITORS

The present auditors M/s. M A Narasimhan & Co., Chartered Accountants, Bangalore, will be holding office as Auditors of the Company until conclusion of the ensuing Annual General Meeting. The said Auditors being eligible have consented to be reappointed. Necessary resolution will be placed before members for approval.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report as per requirements of Clause 49 of the Listing Agreement is furnished in the annexure forming part of this Report. In the said report management has also discussed opportunities, threats and risk factors.

COST COMPLIANCE REPORT

As per the requirement of The Companies (Cost Accounting Records) Rules, 2011 your Company has obtained Cost Compliance Report from Mr. Suresh R Gunjalli, Practicing Cost Accountant (Membership No.22121).

CORPORATE GOVERNANCE PROVISIONS

Your Company has complied with mandatory requirements of Corporate Governance Provisions prescribed under Clause 49 of the Listing Agreement with Stock Exchanges. Corporate Governance Report is furnished forming part of this Annual Report.

AUDIT COMMITTEE

During the year under report the Audit Committee consist of three non-executive directors namely, Dr. Rama Nagappa Shetty, Shri Kudlu Sunder Naik and Shri Annappayya Kundapur. Shri Kudlu Sunder Naik was the Chairman and Shri Lakshmisha Babu S, Company Secretary was the Secretary of the Committee.

DEPOSITS

As on 31.03.2014 the Company does not have any Public Deposits. The Company has repaid all the deposits and one unclaimed deposit of Rs.25,000/- was deposited to IEPF on November 18, 2013.

PARTICULARS OF DISCLOSURE UNDER SECTION 217(1)(e)

As per requirements of 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, necessary particulars are furnished in the annexure forming part of this report.

PARTICULARS OF EMPLOYEES

Pursuant to the provisions of The Companies (particulars of employees) Rules 1975 read with Notification bearing No. F.No.2/29/1988-DL.V dated 31.03.2011 issued by Ministry of Corporate Affairs, New Delhi. The particulars of employees as required to be submitted under Section 217(2A) of The Companies Act, 1956 are not applicable to the Company.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to provisions of Section 217(2AA) of the Companies Act, 1956, your directors hereby state that:

1) In preparation of the annual accounts for the year 2013-14, the Company has followed the applicable accounting standards prescribed under Section 211 (3C) of The Companies Act, 1956 and there is no material departure from the same ;

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

3) Your Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the applicable provisions of The Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities ;

4) The Company has prepared the annual accounts ongoing concern basis.

ACKNOWLEDGEMENTS

Your Directors acknowledge with appreciation, the support and co-operation extended to the Company by the Central Government, Government of Karnataka, Bankers, Financial Institutions, Dealers, Members and employees of the Company. Your Directors also wish to place on record their appreciation for the co-operation extended by M/s. SACMI, Italy and M/s. BRETON, Italy.

for and on behalf of the Board of Directors Dr. RAMA NAGAPPA SHETTY Place : Bangalore Chairman Date : July 31, 2014 (DIN 00038810)

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Mar 31, 2013

To The Members of Murudeshwar Ceramics Limited

The directors present the 30th Annual Report of the Company for the year ended on March 31, 2013 :

FINANCIAL RESULTS

Particulars (Rs. In Lacs)

Sales income 14413.55

Other Income 62.40

Total income 14475.95

Operational Expenditure 11629.81

Increase/(Decrease) in stock (301.16)

Interest 2155.77

Depreciation 903.12

Total Expenditure 14387.54

Profit/(Loss) for the year 88.41

Less Provision for tax 11.45

Less MAT Credit (11.45)

Less Current Tax Expenses (1.06)

Add Deferred Tax Assets 5.76

Sub total 4.70

Profit/(Loss) after tax 83.71

Profit available for appropriation 83.71

OPERATIONAL PERFORMANCE

The unhealthy competition from various unorganized sector are increasing day by day. Even though construction industry has recovered the cost of input and various taxes has gone up during the year which has lead to reduction in profits margins.

During the year under report the Company has produced 31,05,861 Sq.mtrs., of Vitrified tiles and 2,68,968 Sq.mtrs., of Ceramic tiles. Compared to previous year Ceramic tile production has reduced by about 56.98%, Vitrified tile production has reduced by 10.60%. The sales income from Vitrified tiles has reduced by 7.68% at Rs.12,030.95 lakhs compared to Rs.13,031.50 lakhs for the previous year. Sales income from Ceramic tile segment has decreased by 46.17% at Rs.1,528.98 lakhs compared to Rs.2,840.15 lakhs for the previous year. The granite division did not produce any slabs during the year. The Company is finding it difficult to get quality granite blocks at reasonable prices.

In spite of the above hurdles the Company has managed to earn a profit of Rs.83.71 lakhs during the year through various cost cutting measures and by adopting good marketing strategies. Since the Profits of the Company has decreased drastically and the Company is very keen to repay its debts, your Directors have decided to skip the dividend for the year 2012-13. Your directors are working towards achieving higher results during the forth coming years.

PROSPECTS

Demand for Vitrified tiles has been increased in Tier-II and III Cities. New Technology such as Digital tiles Technology Production where as Digital printing is used in printing technology which gives a very rich look. Such a technology leads to faster production in an economical way. Tiles while look exactly like stone, wood, granite etc can be printed using such technology. Such Tiles can be used both on wall and floors which shall be maintenance free in future years. Nano Technology goes well with Vitrified tiles double and multi charge tiles are moving fast in the market. Water Get Technology offers varies shapes like circles, waves etc on the tiles. Consumer likes such complex shapes. Cladding in a technology which is picking up very fast in the market. This tiles goes well on exteriors such as lobby or staircases. The Somerset Rustic & Wood Series Ceramic Tiles in bigger formats and Cegress Series are also been well accepted in the market.

The Karaikal unit is functioned with improved gas allocation. Gas allocation for Hubli Unit is expected to arrive at December 2013. The Company is expecting a better growth in the mere future.

MARKETING STRATEGY

Periodical review of the performance of the sales staff and SWOT analysis of the sales staff and dealers are being carried out and attempts are made to convert the weakness to strength and improve our brand image. Target are set at the beginning of each year of operation based on the past performance and future market growth and potential. All Sales staff particularly of southern state have been instructed to identify new potential market and develop the same so that our distribution network will be widened. Sales of high margin items are to be identified and concentrated. Apart from big builders for bulk orders, we are now concentrating on small builders and dealers also, as Vitrified tile is no more considered as a luxury item and is commonly used by the middle class people. The sales team has developed personal contact with Architects and Builders who influence the decision making. The rapport built shows the attitude and reaction of the Architect towards our product.

Company''s representatives are on door to door leg work to enhance sales. On the product range the Company has introduced new varieties of Vitrified tiles and the Company has also introduced innovative shades and colors in Ceramic tile segment.

Your Directors are hopeful of achieving better results in the year 2013-14.

RESEARCH AND DEVELOPMENT

The R & D wing of the Company is successful in introducing New Fluxing material [Soap Stone] to reduce firing temperature and firing cycle. The R & D wing is continuously concentrating on reduction of power and fuel in the manufacturing process. The R & D wing is also concentrating on inventing new products, upgrade variety, body matrix, shades and designs to suit market sentiments.

INCREASE IN THE SHARE CAPITAL

During the year the Company had allotted 19,35,000 Equity Shares upon conversion of its first trenche of 19,35,000 Convertible Share Warrants into 19,35,000 Equity Shares to Murdeshwar Power Corporation Limited a promoter and promoter group Company, hence the Paid up Equity share capital of the Company increased from Rs.3686.88 lakhs to Rs.3880.38 lakhs.

DIRECTORS

Shri Annappayya Kundapur and Dr. S S Hiremath retire by rotation and being eligible offer themselves for reappointment. Brief personal details of above said Directors are furnished in the Corporate Governance Report which forms part of this Annual Report.

AUDITORS

The present auditors M/s. M A Narasimhan & Co., Chartered Accountants, Bangalore, will be holding office as Auditors of the Company until conclusion of the ensuing Annual General Meeting. The said Auditors being eligible have consented to be reappointed. Necessary resolution will be placed before members for approval.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report as per requirements of Clause 49 of the Listing Agreement is furnished in the annexure forming part of this Report. In the said report management has also discussed opportunities, threats and risk factors.

COST COMPLIANCE REPORT

As per the requirement of The Companies (Cost Accounting Records) Rules, 2011 your Company has obtained Cost Compliance Report from Mr. Suresh R Gunjalli, Practicing Cost Accountant (Membership No.22121).

CORPORATE GOVERNANCE PROVISIONS

Your Company has complied with mandatory requirements of Corporate Governance provisions prescribed under Clause 49 of the Listing Agreement with Stock Exchanges. Corporate Governance Report is furnished forming part of this Annual Report.

AUDIT COMMITTEE

During the year under report the Audit Committee consist of three non-executive directors namely Dr. R N Shetty, Shri K Sunder Naik and Shri Annappayya. K. Shri K Sunder Naik was the Chairman and Shri Lakshmisha Babu S, Company Secretary was the Secretary of the Committee.

DEPOSITS

As at the end of the year under report the Company had 7 deposit accounts for Rs.13.40 lakhs. As on 31.03.2013, one (1) account for Rs.25,000/- remained not claimed by the concerned depositor. Efforts are being made to locate the party and advise him to claim repayment by surrendering the original deposit receipt.

PARTICULARS OF DISCLOSURE UNDER SECTION 217(1)(e)

As per requirements of 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, necessary particulars are furnished in the annexure forming part of this report.

PARTICULARS OF EMPLOYEES

Pursuant to the provisions of The Companies (particulars of employees) Rules 1975 read with Notification bearing No. F.No.2/29/1988-DL.V dated 31.03.2011 issued by Ministry of Corporate Affairs, New Delhi. The particulars of employees as required to be submitted under Section 217(2A) of The Companies Act, 1956 are not applicable to the Company.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to provisions of Section 217(2AA) of the Companies Act, 1956, your directors hereby state that :

1) In preparation of the annual accounts for the year 2012-13, the Company has followed the applicable accounting standards prescribed under Secn.211 (3C) of The Companies Act, 1956 and there is no material departure from the same ;

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

3) Your Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the applicable provisions of The Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities ;

4) The Company has prepared the annual accounts ongoing concern basis.

ACKNOWLEDGEMENTS

Your Directors acknowledge with appreciation, the support and co-operation extended to the Company by the Central Government, Government of Karnataka, Bankers, Financial Institutions, Dealers, Members and employees of the Company. Your Directors also wish to place on record their appreciation for the co-operation extended by M/s. SACMI, Italy and M/s. BRETON, Italy. for and on behalf of the Board of Directors

Place : Bangalore

Dr. R N SHETTY

Date : July 30, 2013 Chairman

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Mar 31, 2012

The directors present the 29th Annual Report of the Company for the year ended on March 31, 2012 :

FINANCIAL RESULTS

Particulars (Rs. In Lacs)

Sales income 17,907.06

Other Income 96.54

Increase/(Decrease) in stock (252.12)

Total income 17,751.48

Operational Expenditure 13,439.60

Finance Cost 2,355.71

Depreciation 1,691.28

Total Expenditure 17,486.59

Profit/(Loss) for the year 264.89

Less : Provision for tax 53.95

Less : MAT Credit (55.78)

Less : Net Current Tax Expenses (183)

Add : Deferred Tax Assets 110.33

Sub total 112.16

Profit/(Loss) after tax 377.05

Profit available for appropriation 377.05

OPERATIONAL PERFORMANCE

The unhealthy competition from various unorganized sector are increasing day by day. Even though construction industry has recovered, the cost of input and various taxes has gone up during the year which has lead to reduction in profits margins.

During the year under report the Company has produced 34,74,059 Sq.mtrs. of Vitrified tiles and 6,25,150 Sq.mtrs. of Ceramic tiles. Compared to previous year even though Ceramic tile production has reduced by about 58.32%, Vitrified tile production has increased by 2.93%. The sales income from Vitrified tiles has increased by 2.40% at Rs.13,031.50 lacs compared to Rs.12,726.12 lacs for the previous year. Sales income from Ceramic tile segment has decreased by 30.11% at Rs.2,840.15 lacs compared to Rs.4,063.55 lacs for the previous year. The granite division did not produce any slabs during the year. The Company is finding it difficult to get quality granite blocks at reasonable prices.

In spite of the above hurdles the Company has managed to earn a profit of Rs.377.05 lacs during the year through various cost cutting measures and by adopting good marketing strategies. Since the Company has just started recovering from huge loss suffered during the year 2009-10 and the Company is very keen to repay its debts, your Directors have decided to skip the dividend for the year 2012-13. Your directors are working towards achieving higher results during the forth coming years.

PROSPECTS

New technology such as nano and double / multi charge tiles are catching up as the customer always look for innovative tiles where pricing is not the decision making factor. These being value added item do fetch higher realization. New exterior tiles like Durapave and the new anti stain coat in 400 x 400 and 600 x 600 mm released to the market are being well accepted by the consumers. The Somerset Rustic & Wood Series Ceramic Tiles in bigger formats is also been well accepted in the market. The Cegress Series (Application of Glaze on Vitrified Tiles with different colour and design), Aqua Magic Water jet decorative tiles in single and four tiles and various designs, Steps and Risers, Borders has received good response from our dealers as well as customers.

The Karaikal unit is functioned with improved gas allocation. Gas allocation for Hubli Unit is expected to arrive at December 2012. Since the Construction Industries have slightly picked up their activities during the year the Company is expecting a better growth in the mere future.

MARKETING STRATEGY

Periodical review of the performance of sales staff and SWOT analysis of the sales staff and dealers are being carried out and attempts are made to convert the weakness to strength and improve our brand image. Target are set at the beginning of each year of operation based on the past performance and future market growth and potential. All Sales staff particularly of southern state have been instructed to identify new potential market and develop the same so that our distribution network will be widened. Sales of high margin items are to be identified and concentrated. Apart from big builders for bulk orders, we are now concentrating on small builders and dealers also, as Vitrified tile is no more considered as a luxury item and is commonly used by the middle class people. The sales team has developed personal contact with Architects and Builders who influence the decision making. The rapport built shows the attitude and reaction of the Architect towards our product.

Company's representatives are on door to door leg work to enhance sales. On the product range the Company has introduced new varieties of Vitrified tiles and the Company has also introduced innovative shades and colors in Ceramic tile segment.

Your Directors are hopeful of achieving better results in the year 2012-13.

RESEARCH AND DEVELOPMENT

The R & D wing of the Company is successful in introducing new Fluxing material [Soap Stone] to reduce firing temperature and firing cycle. The R & D wing is continuously concentrating on reduction of power and fuel in the manufacturing process. The R & D wind is also concentrating on inventing new products, upgrade variety, body matrix, shades and designs to suit market sentiments.

INCREASE IN THE SHARE CAPITAL

During the year the Company had allotted 18,40,000 Equity Shares and 39,70,000 Convertible Share Warrants to Murdeshwar Power Corporation Limited on Preferential allotment basis, hence the Paid up Equity share capital of the Company increased from Rs. 3,502.88 lacs to Rs. 3,686.88 lacs.

DIRECTORS

Dr. Sadanand V Nadig ceased to be a Director on the Board effective from 20.01.2012 due to death. Board expressed their deep sorrow for the sad demise of Dr. Sadanand V Nadig, who left for his heavenly abode. Board also appreciated his contribution to the Company.

The Board has appointed Shri Sankappa Keremane Shetty as Additional Director with effect from May 14, 2012 Pursuant to Section 260 of the Companies Act, 1956 the term of such additional director is valid up to the date of ensuing Annual General Meeting. The Company has received a notice under Section 257 of the Companies Act, 1956 from Shri Sankappa Keremane Shetty offering himself as a candidate to the office of Director. Necessary resolution is placed before the members for approval. Brief particulars of the above director have been furnished in the Corporate Governance Report which forms part of this Annual Report.

Shri Sunil R Shetty and Shri K Sundar Naik retire by rotation and being eligible offer themselves for reappointment. Brief personal details of above said directors are furnished in the Corporate Governance Report which forms part of this Annual Report.

AUDITORS

The present auditors M/s. M A Narasimhan & Co., Chartered Accountants, Bangalore, will be holding office as Auditors of the Company until conclusion of the ensuing Annual General Meeting. The said Auditors being eligible have consented to be reappointed. Necessary resolution will be placed before members for approval.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report as per requirements of Clause 49 of the Listing Agreement is furnished in the annexure forming part of this Report. In the said report management has also discussed opportunities, threats and risk factors.

COST COMPLIANCE REPORT

As per the requirement of The Companies (Cost Accounting Records) Rules, 2011 your Company has obtained Cost Compliance Report from Mr. Suresh R Gunjalli, Practicing Cost Accountant (Membership No.22121).

CORPORATE GOVERNANCE PROVISIONS

Your Company has complied with mandatory requirements of Corporate Governance provisions prescribed under Clause 49 of the Listing Agreement with Stock Exchanges. Corporate Governance Report is furnished forming part of this Annual Report.

AUDIT COMMITTEE

During the year under report the Audit Committee consist of four non-executive directors namely Dr. R N Shetty, Shri K Sundar Naik, Shri Annappaya. K and Dr.Sadanand V Nadig (upto 20.01.2012). Shri K Sundar Naik was the Chairman and Shri Lakshmisha Babu S Company Secretary was the Secretary of the Committee.

DEPOSITS

As at the end of the year under report the Company had 7 deposit accounts for Rs.13.40 lacs. As on 31.03.2012, one (1) account for Rs.25,000/- remained not claimed by the concerned depositor. Efforts are being made to locate the party and advise him to claim repayment by surrendering the original deposit receipt.

PARTICULARS OF DISCLOSURE UNDER SECTION 217(1)(e)

As per requirements of 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, necessary particulars are furnished in the annexure forming part of this report.

PARTICULARS OF EMPLOYEES

Pursuant to the provisions of The Companies (particulars of employees) Rules 1975 read with Notification bearing No. F.No.2/29/1988-DL.V dated 31.03.2011 issued by Ministry of Corporate Affairs, New Delhi. The particulars of employees as required to be submitted under Section 217(2A) of The Companies Act, 1956 are not applicable to the Company.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to provisions of Section 217(2AA) of The Companies Act, 1956, your directors hereby state that :

1) In preparation of the annual accounts for the year 2011-12, the Company has followed the applicable accounting standards prescribed under Secn.211 (3C) of The Companies Act, 1956 and there is no material departure from the same ;

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

3) Your Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the applicable provisions of The Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities ;

4) The Company has prepared the annual accounts ongoing concern basis.

ACKNOWLEDGEMENTS

Your Directors acknowledge with appreciation, the support and co-operation extended to the Company by the Central Government, Government of Karnataka, Bankers, Financial Institutions, Dealers, Members and employees of the Company. Your Directors also wish to place on record their appreciation for the co-operation extended by M/s. SACMI, Italy and M/s. BRETON, Italy.

for and on behalf of the Board of Directors

Place : Bangalore Dr. R N SHETTY

Date : July 30, 2012 Chairman

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Mar 31, 2010

The directors present the 27th Annual Report of the Company for the year ended on March 31, 2010 :

FINANCIAL RESULTS Particulars (Rs. In Lakhs) Sales income 13,839.32 Other Income 55.96 lncrease/(Decrease) in stock 1,191.24 Total income 15,086.52 Operational Expenditure 11,750.89 Interest 2,446.30 Depreciation 2,466.24 Total Expenditure 16,663.43 Profit/(Loss) for the year (1,576.91) Add : Deferred Tax Assets 29.50 Excess provision of Income Tax written back 16.64 Subtotal 46.14 ProfitJ(Loss) after tax adjustments. (1,530.77) Balance of Profit brought forward 447.51 Profit/(Loss) carried to Balance Sheet (1,083.26)

OPERATIONAL PERFORMANCE

The order book position of the Company during the first three quarters was very badly affected due to various factors beyond control of the management. Even though demandfor tiles is encouraging, too many market players, particularly in the unorganised sector and cheaper imported tiles have lead to difficulties in balancing the price for the product by medium to large scale companies matching with its quality and cost. On the other hand the economic crisis seems to be over, but the after effect of it still continues to have its effect on the financial stability of companies connected with the construction industry. Even though the order book position from the last quarter of the year under report indicates that the economic crisis has ended and signals that the positive trend shall prevail in times ahead, the weak market condition and very low off take during the first three quarters of 2009-10 has significantly affected the final figures for the yea> under report.

During the year under report the Company has produced 30,13,184 Sq.mtrs. of Vitrified tiles and 21,07,084 Sq.mtrs. of Ceramic tiles. Compared to previous year even though Ceramic tile production has improved by about 14.58%, Vitrified tile production has reduced by 21.69%. The sales income from Vitrified tiles has reduced by 28.94% at Rs.10,344.70 lakhs compared to Rs.14,557.65 lakhs for the previous year. Sales income from Ceramic tile segment has improved by 8.03% at Rs.3,292.31 lakhs.

The granite division which is a 100% EOU has achieved sales income of Rs.202.31 lakhs against Rs.301.78 lakhs for the previous year. The granite business continues to be mostly dominated by unorganized entities rendering it difficult for corporate entities in the organized sector to effectively compete in the market. The Company is also finding it difficult to get quality granite blocks at reasonable prices.

On account of reasons stated above the Company has sustained loss of Rs.1530.77 lakhs for the year under report. With the result your directors have been constrained to skip the dividend for the year 2009-10 for the very first time in about 20 years. Considering the present market trends and the steps being taken by the Company to improve the economies of operation, your directors hope that the Company will be able to present better performance for the year 2010-11.

PROSPECTS

The last quarter of the year has given indications that the financial stability of the Company will be restored in a short period of time. The Order book position during the last quarter has been good and on expected lines. The new and aesthetic products introduced by the Company are better accepted in the market. Various cost cutting measures undertaken by the Company both by reducing the operating cost on one hand and improving the working efficiency on the other are producing encouraging results.

Also efforts taken by the Chairman to impress upon the Central Government for gas connection to the manufacturing unit at Hubli has yielded results and the Hubli unit isexpected to get gas connection by 2012. The Company also hopes to get increase in gas allocation to Karaikal unit. Housing loans are becoming cheaper on account of reduced interest rates. This will be a boost to the construction industry which in turn helps growth of tiles market. RIGHTS ISSUE

On the financial side, your directors are seriously planning to reduce the repayment burden so that the other cost cutting measures will be more effective. In this direction Board of Directors have proposed to increase the paid up share capital by issue of shares on rights basis for an amount not exceeding Rs.75 crores including premium which will be utilized for retiring high cost debts on priority and also to effectively implement certain other plans to economise operating costs. This will also improve liquidity position to a considerable level.

MARKETING STRATEGY

The Management is taking every possible step to improve operating margins. Even though there is committed professional management team in place, the marketing department has been given emphasis to meet new challenges being faced in the market. Dealer net work has been further expanded. Trained marketing personnel have been assigned to reach door to door to broaden the marketing net work. The advertisement and publicity is under the control of professional team with commitment to take the brand name and the product to reach every section of, the society even into rural areas. Value added products like Granite and special marble series in Vitrified tite segment are being well accepted in the market especially by commercial centres. The CEGRESS variety tiles newly introduced by the Company has become fast moving product in a very short period. In ceramic tiles segment larger sizes of 600 x 600 mm have been introduced.

With a view to reduce transportation and other operating costs to reach distant markets within in shortest possible time, the Company has started outsourcing production of select varieties of Vitrified tiles under our regular brand name to other distant manufacturing units and started its trading activity. This will provide some cushion to price the product a little more competitively.

As a result of above steps taken by the management and also keeping in view some other measures being planned to improve market efficiency, your Directors are hopeful of achieving better results in the year 2010-11.

RESEARCH AND DEVELOPMENT

The R&D wing of the Company has successfully developed new varieties of tiles with improved body matrix, quality and cost effective product range. Efforts to upgrade variety, body matrix, shades and designs to suit market sentiments is being consistently pursued. R&D wing is also exploring ways and means to improve operating efficiency.

DIRECTORS

Dr Sadanand V Nadig and Shri Sunil R Shetty retire by rotation and being eligible offer themselves for reappointment. Brief personal details of abovesaid directors are furnished in the Corporate Governance Report which forms part of this Annua! Report.

AUDITORS

The present auditors M/s. M A Narasimhan & Co., Chartered Accountants, Bangalore, will be holding office as Auditors of the Company until conclusion of the ensuing Annual General Meeting. The said Auditors being eligible have consented to be reappointed. Necessary resolution wilt be placed before members for approval.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report as per requirements of Clause 49 of the Listing Agreement is furnished in the annexure forming part of this Report. In the said report management has also discussed opportunities, threats and risk factors.

CORPORATE GOVERNANCE PROVISIONS

Your Company has complied with mandatory requirements of Corporate Governance provisions prescribed under Clause 49 of the Listing Agreement with Stock Exchanges. Corporate Governance Report is furnished forming part of this Annual Report.

AUDIT COMMITTEE

The present composition of the Audit Gommittee has three non-executive directors namely Dr. R N Shetty, Shri.K P Surendranath and Dr.Sadanand V Nadig. Shri K P Surendranath is the Chairman. Shri K P Surendranath and Dr.Sadanand V Nadig are independent directors. Shri P A Ravish, Company Secretary is the Secretary of the Committee.

DEPOSITS

As at the end of the year under report the Company had 24 deposit accounts for Rs.32.75 lakhs. As on 31.03.2010, one (1) account for Rs.25,000/- remained not claimed by the concerned depositor. Efforts are being made to locate the party and advise him to claim repayment by surrendering the original deposit receipt.

PARTICULARS OF DISCLOSURE UNDER SECTION 217(1)(e)

As per requirements of 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, necessary particulars are furnished in the annexure forming part of this report.

PARTICULARS OF EMPLOYEES

Particulars of employees pursuant to provisions of Section 217(2A) of The Companies Act, 1956 read with The Companies (particulars of employees) Rules 1975 is furnished in the annexure forming part of this report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to provisions of Section 217(2AA) of the Companies Act, 1956, your directors hereby state that:

1) In preparation of the annual accounts for the year 2009-10, the Company has, subject to Note No.4 (c) of Schedule 21 in the Statement of accounts, followed the applicable accounting standards prescribed under Seen.211 (3C) of The Companies Act, 1956 and there is no material departure from the same ;

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

3) Your Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the applicable provisions of The Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities ;

4) The Company has prepared the annual accounts on going concern basis.

ACKNOWLEDGEMENTS

Your Directors acknowledge with appreciation, the support and co-operation extended to the Company by the Central Government, Government of Karnataka, Bankers, Financial Institutions, Dealers, Members and employees of the Company. Your Directors also wish to place on record their appreciation for the co-operation extended by M/s. SACMI, Italy and M/s. BRETON, Italy.

for and on behalf of the Board of Directors Place : Bangalore Dr. R N SHETTY Date : May 05, 2010 Chairman