AFFLUENCE

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. RESEARCH AND 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.

CONSERVATIOIN OF ENERGY AND TECHNOLOGY ABSORPTION A. CONSERVATION OF ENERGY (a) Lab tests are being conducted to reduce shrinkage and increase production thereby reducing wastage of heat and conserving power. (b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy: 1 No. Toshiba Nitsubishu, make 1 x 400 KVA UPS is being installed for uninterrupted supply to the kiln. Total cost would be Rs. 32.15 lakhs. This will reduce the consumption of energy. . (c) Impact of the measures at (a) and (b) above for reduction of energy consumption and consequent Impact on the cost of production of goods: Reduction in power cost for better sales realization of sales values Vitrified tiles. (d) Total energy consumption and energy consumption per unit of production ; Not applicable B. TECHNOLOGY ABSORPTION: Efforts made in technology absorption as per Form B of the Annexure :

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION 1. Efforts in brief made towards technology absorption, adaptation and innovation : a) Successful production of PGVT & GVT series Digital Vitrified tile. b) Successful adaption of Ball clay processing plant & feldspar processing plant of remove the inbuilt impurities to enhance the brightness of Vitrified tile production. 2. Benefits derived as a result of above efforts : Reduction in the power cost, raw material cost, transport cost & improves the tile brightness & quality consistency. 3. In case of Imported Technology (imported during the last 5 years reckoned from the beginning of the financial year), following information may be furnished : a) Technology Imported : Not done during the year b) Year of Import : NA c) Has technology been fully absorbed : NA d) If not absorbed, areas where this has not taken place, reasons and future plans of action. : NA

FOREIGN EXCHANGE EARNINGS AND OUTGO a) Activities relating to exports, initiatives taken to increase exports, development of new export markets for products and services and export plans : Nil b) Total Foreign Exchange used earned. Foreign Exchange Earnings : Nil Foreign Exchange Outgo : Nil

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