DIRECTORS' REPORT TO THE MEMBERS

Your Directors present the Twenty Third Annual Report together with Audited Accounts for the year ended on 31st March, 2015.

COMPANY’S PERFORMANCE

During the period under review your company produced 12,503 M.T. of PVC flooring, Sheetings, Films etc. as against 12,478 M.T. produced during the previous year, achieving a capacity utilization of 77.18 % as compared to around 77.02% in the previous year. The Company could achieve higher capacity utilization but for depressed demand for products due to current recession could not achieve the same. Sales and Income during the year under review was Rs.9289 Lacs against Rs.9024 Lacs during last year thereby posting an increase of around 3%. Profit before tax during 2014-2015 was Rs. 413 Lacs against Rs.328 Lacs during the year 2013-2014. However, net profit of the company after tax was for Rs.273 Lacs against Rs.293 Lacs during last year. The main reason of decline in Net profit was due to higher tax paid by the company in the year under review.

DIVIDEND

Due to inadequacy of distributable cash,the Directors of your company are unable to recommend any Dividend for the year 2014-15.

QUALITY CONTROL

Your Company continues to hold prestigious ISO 9001:2008 certification for quality as manufacturer and exporter of PVC products namely Marbled (Contract), Printed and Technical Flooring, Leather Cloth,Sheeting, Humidity Barrier and Geo Membrane. Bureau of Indian Standards has granted BIS certification Mark ISI for Unbacked Flexible PVC Flooring, Sheets or rolls and tiles for 1.5 mm and 2.00 mm thickness vide ISO No. 3462:1986.

NEW PROJECT

As intimated in the Last Directors' Report the new project of the company to manufacture Soft Touch Cushion type of Artificial PVC Leather cloth, PVC Sheetings and Films, Knitted Fabric etc is under final stage of implementation. The necessary permissions, Electric Connection etc. have been given by the appropriate authorities. The trial runs are expected soon and company hope for commercial production to commence in the coming quarter of the financial year. There has been cost overrun and the company is planning to find means to meet the cost overrun. Once the commercial production is commenced the new unit will start generating additional profits for the company. Presently the Company is facing shortage of Term Loans and Working Capital Facilities for the new project.

FUTURE PROSPECTS

Despite facing tough competition from imported finished goods, the products of your company are well received in the market and the market will not be a constraint. Kotak Mahindra Bank Limited has also

sanctioned and disbursed Working Capital Facilities and Term Loan to the company. The Company is facing limitation of Term Loans and Working Capital Facilities. Upon availability of which company expects to do well in future.

POLICY ON DIRECTORS'APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Company's policy on directors' appointment and remuneration and other matters provided in Section 178(3) of the Companies Act,2013 has been disclosed in the Corporate Governance Report which forms part of the Directors' Report

EXTRACT OF ANNUAL RETURN

As provided under Section 92(3) of the Companies Act,2013 the extract of Annual Return is given in Annexure "I" in the prescribed Form MGT-9 which forms part of this report.

DIRECTORS' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(3)(c) of the Companies Act, 2013, your Directors state:-

(I) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures ;

(II) That your Directors have selected such accounting policies and applied them consistently and made

judgment 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 or loss of the company for that period ;

(III) That your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for the assets of your company and for preventing and detecting fraud and other irregularities ;

(IV) That your Directors have prepared the annual accounts on a going concern basis ;

(V) That the directors have laid down proper internal financial controls which are followed by the company and that such internal financial controls are adequate and were operating effectively ; and

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

DISCLOSURE ON CORPORATE SOCIAL RESPONSIBILITY POLICY

The Corporate Social Responsibility Policy has not been adopted by the company as the company does not meet the criteria as provided under Section 135(1) of the Companies Act, 2013 and Rules made thereunder as on 31st March, 2015.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

PARTICULARS OF EMPLOYEES

The informations as required under Section 197 of the Companies Act,2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,2014 are attached given below :

 (c) The percentage increase in the median remuneration of employees in the financial year : 9.68%

(d) The number of permanent employees on the roll of company :  235

(e) The explanation on the relationship between average increase in remuneration and company

performance :

On an average, employees received an annual increase of 7.49%. The individual increments varied from 0.00 % to 23.33 % based on individual performance.

 (i)   Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in managerial remuneration :

The average annual increase was around 7.49% . However, during the year, the total average increase in managerial and key personnel was 8.98% which is considered to be reasonable.

 (k) key parameters for any variable component of remuneration availed by the directors :

There is no variable components involved in the remuneration of Directors. The Directors are being paid remuneration as approved by the shareholders of the company. The increase in salary was only in the case of Shri S P Jain whose salary was revised by the company in the shape of annual increment in line with the other senior officers of the company.

(l) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year:

None

(m) Affirmation that the remuneration is as par the remuneration policy of the company :

The company affirms remuneration is as per the remuneration policy of the company.

(n) The statement containing particulars of employees as required under Section 197(12) of the Companies Act,2013 read with Rule 5(2) of the companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is not applicable as none of the employee of the company is covered under the provisions of the act and rules made thereunder.

GREEN INITIATIVE IN CORPORATE GOVERNANCE

The Company since the last three years in line with ''Green Initiative'' circular issued by Ministry of Corporate Affairs (MCA) effected electronic delivery of the Notice of Annual General Meeting and Annual Reports previously to those shareholder whose email ids were registered with respective depositories Participants and downloaded from the depositories viz. National Securities and Depositories Limited (NSDL) / Central Depository Services (India) Ltd. (CDSL). SEBI have also in line with MCA circular and as provided in Clause 32 of the Listing Agreement executed with the stock exchange, permitted listed entities to supply soft copies of full annual reports to all those shareholder who have registered their email addresses for the purpose. Your directors are thankful to the shareholder for actively participating in the green initiative and seek your continued support for implementation of the green initiative. The officers of the company are continuously complying with the green initiative and printing of only those documents are taken which are considered necessary.

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

Particulars regarding conservation of energy, technology absorption and foreign exchange earnings and outgo, as prescribed Under Section 134(3) (m) of the Companies Act, 2013, are annexed as Annexure "II"

AUDITORS Statutory Auditor

The Auditors M/s De & Bose, Chartered Accountants, Auditors of the company retire at the ensuing Annual General Meeting and are eligible for reappointment till the conclusion of Annual General Meeting to be held in the year 2017.

Secretarial Auditor

As required under Section 204 of the Companies Act, 2013 (as amended or re-enacted from time to time) read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and other applicable provisions, if any, of the Companies Act 2013, Shri Nitin Gupta, Practicing Company

Secretary, was appointed as Secretarial Auditor of the company to conduct the secretarial audit of the company for the financial year 2014-2015. The Secretarial Audit Report for the FY 2014-15 forms part of the Annual Report is attached as Annexure "III" to the Directors' Report.

Internal Auditor

The Company has in place adequate Internal financial control with reference to financial statements. During the year, such control were tested and no reportable material weakness in the design or operations were observed. The Internal Auditor directly reports to the Audit Committee.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and at arm's length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered  material in accordance with the policy of the Company on materiality of related party transactions. None of the transactions with related parties falls under the scope of Section 188(1) of the Companies Act,2013.Your Directors draw attention of the members to Note 2.34 to the financial statement which sets out related party disclosures.

Information on transactions with related parties pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules,2014 are given in Annexure " IV" in Form No. AOC-2 and form integral part of the Directors' Report.

DIRECTORS

Shri Amitaabh Goenka , Director of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment. Shri Amitaabh Goenka was appointed as director of the company under the category of Promoter of the company. Shri Amitaabh Goenka is son of Shri Amar Nath Goenka, Managing Director of the company. He is 43 years old and holds Degree in Commerce. He has more than 22 years of experience in trade & industry. He is also director on the Board of M/s Joemillar Aquatek India (P) Limited,M/s D L Millar & Company Limited, M/s Kay Ess Polymers Limited, proprietor of M/s 1000 Plus Inc. and partner in M/s G. B. & Company. Shri Amitaabh Goenka holds 2091575 Equity Shares comprising of 9.98 % of total shareholding.

Shri Amitaabh Goneka has given his declaration and has confirmed that he has not been convicted of any offence in connection with the promotion, formation and/or management of any company or LLP and has not been found guilty of any fraud or misfeasance or of any breach of duty to any company under this Act or any previous company law in the last five years and that his total directorship in all companies shall not exceed the prescribed number of companies in which a person can be appointed as a director.

Smt. Rashmee Singhania was appointed as Additional Director of the company under the category of Independent Director of the Company upto the ensuing Annual General Meeting. As such she ceased to be Director on the Board of the Company on 21-09-2015 i.e. after conclusion of the ensuing Annual General Meeting. The Company has received a notice in writing along with a deposit of Rs.1,00,000/- (Rupees One Lac only) in terms of Section 160 of The Companies Act ,2013 from a Member signifying the intention to propose the candidature of Smt. Rashmee Singhania for the office of Independent Director. In line with provisions of Section 149 (10) of the Companies Act, 2013, Smt. Rashmee Singhania is proposed to be appointed as Independent Director upto 12.02.2020. Smt. Rashmee Singhania has also given her consent to act as Independent Director upto 12.02.2020. The shareholding of Smt. Rashmee Singhania in the company is Nil. Smt. Rashmee Singhania is 38 years old and holds graduation degree. She has more than 16 years of experience in business and trade.

No Directors , Key Managerial Personnel and their relatives are in any way concerned or interested in the appointment of Smt. Rashmee Singhania as Independent Director of the Company except Smt. Rashmee Singhania herself.

In the opinion of the Board Smt. Rashmee Singhania is a person of integrity and possesses relevant expertise and experience to hold office of an Independent Director of the Company.

Smt. Rashmee Singhania, an Independent Director, has submitted her disclosures to the Board that she fulfill all the requirements as stipulated in section 149(6) of the Companies Act,2013 so as to qualify herself to be appointed as Independent Director under the provisions of the Companies Act,2013 and the relevant Rules.

Shri S. P. Jain has been continuing as Director as well as Executive Director of the Company since 26-06-2004 and his last reappointment as Executive Director was approved by the Shareholders in the 20th Annual General Meeting held on 24h August,2012 for a period of three years effective from 01-04-2013 at a remuneration of Rs.57,000/- (Rupees Fifty Seven Thousand only) per month as basic salary in the pay scale of Rs. 57,000/- to Rs.80,000/- plus perquisites admissible under Schedule XIII to the Companies Act,1956. The present term of Shri Jain expires on 31/03/2016. The next Annual General Meeting of the company would be held by September,2016 i.e. after the term of Shri Jain expires on 31-03-2016. It is proposed to reappoint Shri Jain as Executive Director for a further period of three years with effect from01/04/2016. It is, therefore, proposed to pass the resolution approving reappointment of Shri S. P. Jain as Executive Director for a further period of three years on the Terms and Conditions as specified in the Notice for the Twenty Third Annual General Meeting. The Board of Directors of the company has approved reappointment of Shri S. P. Jain for another three years i.e. upto 31/03/2019 in their Meeting held on 15/05/2015 on the recommendation of the Nomination and Remuneration Committee subject to approval by the Members of the company in the ensuing Annual General Meeting. It is proposed to reappoint Shri S. P. Jain as Executive Director before the expiry of his term on 31/03/2016. As per provisions of the Schedule V to the Companies Act,2013 any body can hold office of whole time director upto the age of 70 years without the permission of the Central Government. However, he can continue to hold such office provided that a Special Resolution is passed by the Shareholders of the company to this effect in the General Meeting. It has ,therefore, been proposed to pass a special resolution under Schedule V (Part I) (c) to the Companies Act,2013 so that Shri S P Jain continues to remain Executive Director of the Company even after attaining the age of 70 years on 30-01-2016. The shareholding of Shri. S P Jain in the company is Nil.

Shri S P Jain has given his declaration and has confirmed that he has not been convicted of any offence in connection with the promotion, formation and/or management of any company or LLP and has not been found guilty of any fraud or misfeasance or of any breach of duty to any company under this Act or any previous company law in the last five years and that his total directorship in all companies shall not exceed the prescribed number of companies in which a person can be appointed as a director.

No Directors, Key Managerial Personnel and their relatives are in any way concerned or interested in the reappointment of Shri S P Jain as an Executive Director except Shri S P Jain himself.

In the opinion of the Board Shri S P Jain is a person of integrity and possesses relevant expertise and experience to hold office of an Executive Director of the Company.

In terms of Clause 49 of the Listing Agreement notes on Director's seeking appointment/re-appointment are given in Annexure "V" and are forming part of the Directors' Report to the Members.

DECLARATION BY THE INDEPENDENT DIRECTORS

Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in section 149(6) of the Companies Act,2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act,2013 and the relevant Rules.

STOCKEXCHANGES

The equity shares of your company are listed at the Stock Exchanges as per details given in the Annexure "VI" and forming part of Directors' Report to the Members. The equity shares of the company are traded at these Stock Exchanges.

CORPORATE GOVERNANCE

In terms of Clause 49 of The Listing Agreement, a report on The Corporate Governance alongwith a certificate from the Auditors of the Company regarding compliance of the conditions of the Corporate Governance is given in Annexure "VII" and Annexure "VIII" respectively and form part of Directors' Report to the Members.

WHISTLE BLOWER POLICY/VIGILE MECHANISM

The company promotes ethical behavior in all its business activities and has put in place a mechanism for reporting illegal or unethical behavior. The company has a vigil mechanism and whistle blower policy under which the employees are free to report violations of applicable laws and regulations and the code of conduct. The reportable matters may be disclosed to the Chairman of Audit Committee. During the year under review, no employee was denied access to the Audit Committee.

COMPLAINTS OF SEXUAL HARASSMENT

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at workplace (Prevention, Prohibition & Redressal) Act,2013. In line with the requirement, the Company has set up Internal Compliant Committee (ICC) to redress the complaintsregarding sexual harassment from all employees. All employees of the company (permanent, contractual, adhoc, trainee, temporary) are covered under this policy. The ICC consists of women employees as well as Male Employees of the Company. The following is a summary of sexual harassment complaints received and disposed off during the year 2014-2015.

RISK MANAGEMENT

The company has developed and implemented a Risk Management Policy to identify and mitigate key risks that may threaten the existence of the company

CEO CERTIFICATE

Shri Amar Nath Goenka, Managing Director of the Company, is also CEO and CFO of the Company. In Terms of Clause 49 of The Listing Agreement a certificate with regard to Compliance with The Code of Conduct by the Board Members and Senior Management Personnel for the year ended 31st March, 2015 duly signed by the CEO has been included in the Annual Report and is attached as Annexure "IX"

MANAGEMENT DISCUSSIONS AND ANALYSIS

In Terms of Clause 49 of The Listing Agreement notes on Management Discussions and Analysis Report is given in Annexure "X" and forming part of the Director's Report.

DISCLOSURE REQUIREMENTS

As per Clause 35 of the listing agreement entered into with the stock exchanges, a business responsibility Report is attached and Form part of this Directors' Report.

INDUSTRIAL RELATIONS :

The industrial relations remained cordial during the year under review.

PUBLIC DEPOSITS

The Company has not invited or accepted deposits from the public covered under Section 73 of the Companies Act, 2013.

ACKNOWLEDGEMENT

The Directors wish to place on record their sincere appreciation for the whole hearted Co-operation received by the Company from Central and State Governments, Kotak Mahindra Bank Limited and other Government Agencies and look forward to their continuing support. The Directors also record their appreciation for the sincere efforts put in by the employees of the Company at all levels.

For & on Behalf of the BOARD OF DIRECTORS

Sd/- (AMAR NATH GOENKA)

CHAIRMAN

Place : New Delhi

Date : 15/05/2015