The Directors have pleasure in submitting their Annual Report together
 with the Audited Statements of Account for the year ended on December
 31, 2011.
 
 The Year in Retrospect
 
 Financial Results                                        (Rs. ''000)
 
                                              Year ended     Year ended
                                              31.12.2011     31.12.2010
 
 Sale of Goods (excluding Excise Duty)         5,123,542      4,203,211
 
 Sale of Services                                279,025        197,947
 
 Other Income                                     46,538         53,255
 
 Total Income                                  5,449,105      4,454,413
 
 Profit before Depreciation, 
 Interest & Tax (PBDIT) & Exceptional Item       979,569        866,414
 
 Exceptional Item-income                            -            10,917
 
 Depreciation                                    146,656        129,113
 
 Interest                                          6,080            204
 
 Profit before Tax                               826,833        748,014
 
 Provision for Income Tax                         74,579        259,510
 
 Profit after Tax                                552,254        488,504
 
 Balance as per last Balance 
 Sheet brought forward                         1,867,582      1,522,596
 
 Available for appropriation                   2,419,836      2,011,100
 
 Appropriations made:
 
 Proposed Dividend @Rs4.25per
 sharei.e.42.50%                                  86,258         81,184
 
 Dividend Tax                                     13,680         13,484
 
 Transfer to General Reserves                     55,225         48,850
 
                                                 155,163        143,518
 
 Profit & Loss Account Balance                 2,264,673      1,867,582
 
                                               2,419,836      2,011,100
 
 Basic & Diluted Earnings Per Share             Rs 27.21       Rs 24.07
 
 Operating & Financial Performance,
 
 Internal Control
 
 Your Company has had another very steady performance in 2011 generating
 enough cash to pay for the increased activities and substantial
 expenditure on capacity expansion. Debt Free status has been
 maintained with enough cash balance to support further spending on new
 assets to sustain growth in coming years.
 
 This year gross sales and services increased by over Rs 1 billion.
 Annual results show a revenue growth of around 23% driven by strong
 domestic growth at around 22% and export growth at over 30% over last
 year, in spite of the slowdown in domestic steel production. The strong
 growth in domestic revenue was achieved due to improvement in market
 share and penetration into new product and market segments.
 
 The operating profit (PBDIT) at Rs 979 million for the year is higher
 by 13% over last year and profit after tax (PAT) at Rs 552 million is
 also higher by over 13%.
 
 Increase in raw material prices and other input costs like energy, the
 sudden devaluation of Rupee vis-a- vis major currencies like USD,GBP
 and Euro during later part of the year and withdrawal of DEPB export
 benefits have placed a burden on the margins for the year.
 
 The Company continued to invest in technological developments and
 capacity expansion.
 
 The Computational Fluid Dynamics (CFD) Laboratory was set up in May
 2011 and consequently a new Water Modelling unit will also be
 commissioned at the Kolkata plant by March 2012. Water modelling is
 mainly aimed at simulating flow conditions to that of liquid steel in
 actual continuous casting environment.  Design of the shapes of our
 products specially sub- entry nozzles for Thin Slab Casters are
 critical in determining productivity and operational efficiency.  The
 primary shape is determined using water modeling and CFD techniques
 since most of the operational factors are greatly influenced by flow
 patterns.
 
 The Company always engages with customers to develop for them improved
 processes at lower costs.  In one such endeavour, the Company designed,
 manufactured and installed reinforced precast dampers for a customer''s
 non-recovery type coke ovens keeping in mind the service conditions of
 thermal shock resistance, no cracks and longer service life. The life
 of the new installed dampers have increased from 6 months to over 12
 months, installation charges were much lower, this resulted in import
 substitution and also better process performance which resulted in huge
 savings for the customer.
 
 In a similar way, new generation GTC2085 tundish slidegate system with
 integrated tube changer facility was introduced during commissioning
 of the caster of a customer. The new system has witnessed significant
 growth in tundish sequence lengths.
 
 Customer has benefited not only from maximum sequence length but also
 from operational efficiencies like reduced alumina build up and
 oxidation of refractory, replacing nozzles without interrupting the
 casting process etc.
 
 The new pressing complex at the Kolkata plant had been commissioned in
 July 2011 and installation of the kilns have been completed in January
 2012 and are stabilizing to the desired levels. The other equipments
 will be installed and commissioned by March 2012 and we expect Kolkata
 plant expansion to be completed by April 2012.
 
 At Visakhapatnam, near our existing factories, full payment for
 acquiring 15 acres of land on freehold basis from Andhra Pradesh
 Industrial Infrastructure Corporation Ltd has been made for setting up
 the fifth plant of the Company.
 
 All four factories had been working at near full capacity during the
 year. In-plant rejection for all manufactured items have reduced due to
 improved processes. The new process to deal with customer complaints on
 products and services has been successful and has lead to speed and
 quality of problem resolution.
 
 The Company has in place an established internal control system
 designed to ensure proper recording of financial and operational
 information and compliance of various internal controls and other
 regulatory and statutory compliances. Internal Audit on pan India basis
 was conducted by M/s Deloitte Haskins & Sells, Chartered Accountants.
 In addition Cookson Group internal audit function carried out several
 audits during the year.
 
 The Company has complied with the provision of the Code on Internal
 Control which require that the Directors review the effectiveness of
 internal controls including financial, operational and compliance
 control and risk management systems. Self certification exercises are
 also conducted by which senior management certify effectiveness of the
 internal control system for which they are responsible together with
 the Company''s policies.
 
 Dividend
 
 The Board of Directors are pleased to recommend dividend of Rs 4.25 per
 share i.e. 42.50 % on Equity Shares of Rs 10/- each. The dividend
 together with dividend tax will entail a cash outflow of Rs 100 million
 (previous year Rs 95 million). If this is approved at the forthcoming
 Annual General Meeting, dividend will be deposited with the bank within
 April 30, 2012 and dividend warrants will be despatched on or after May
 7, 2012 to those who are members of the Company as on April 26, 2012.
 In respect of shares held electronically, dividend will be paid on the
 basis of beneficial ownership as per details furnished by the
 depositories.
 
 ISO Certification
 
 The Company''s factories at Kolkata, Mehsana and Visakhapatnam and two
 of its sites at Surat in Gujarat and Dolvi in Maharashtra have been
 certified ISO 9001:2008 for Quality Management Systems Standards.
 
 Segment wise performance
 
 The Company is primarily a manufacturer and trader of refractory and is
 managed organizationally as a single unit. Accordingly, the Company is
 a single business segment company. Geographical (secondary) segment has
 been identified as domestic sales and exports.
 
 Industry Structure & Developments, Opportunities & Threats, Outlook,
 Risks & Concerns
 
 The year 2011 was a relatively difficult year for the Indian economy.
 GDP growth came down to below 7% level, inflation continued to remain
 high and bank interest rates were increased. These led to domestic
 steel industry suffering lower volumes, reduced margins and many
 of their new projects were either put off or delayed. Steel production
 in India has marginally increased over the previous year and steel
 prices have been under pressure. Most domestic steel makers were under
 margin pressure due to rise in input cost, availability and prices of
 raw materials, foreign exchange fluctuation and inflationary pressures.
 
 Your Company trades in refractory based solutions and steel industry
 comprises the biggest group of its customers. Hence anything that
 affects the steel industry will have its one off effect on our
 business.  India is set to emerge as the second largest producer and
 consumer of steel in the next few years and refractory being an
 essential requirement in steel industry will see increased demand. With
 this in mind, your Company is completing the expansion of its Kolkata
 plant to double its capacity to meet the increased demand of the steel
 industry and is also planning another plant at Visakhapatnam.
 
 All business operations have risks and threats attached to them most of
 which may be outside the control of the Company. Apart from the
 concerns over raw material prices and availability, fluctuations in
 exchange rates, inflationary pressures, adverse political or regulatory
 developments, aggressive competition and chances of a reduction in
 customer output leading to lower demands are some perceived threats.
 
 During the year a risk analysis and assessment was conducted in line
 with the Group requirements and no major risks were noticed.
 
 Directors
 
 Mr Sudipto Sarkar and Mr Biswadip Gupta retire by rotation in
 accordance with the Articles of Association of the Company at the
 forthcoming Annual General Meeting, and being eligible, offer
 themselves for reappointment.
 
 Mr Sudipto Sarkar, a renowned Barrister, aged about 63 years, is a
 Director of the Company since July 26, 2005. He holds B.Sc.
 (Maths-Hons) from Presidency College, Kolkata; BA (Law Tripos) from
 Jesus College, Cambridge, UK; LL.M, (International Law) from Jesus
 College, Cambridge, UK; M.A. (Law) from Jesus College, Cambridge, UK.
 He is also Barrister, Gray''s Inn, London. He is presently practising as
 a Senior Advocate. He also has several publications to his credit on
 Evidence, Law of Civil Procedures and Specific Relief Act. He is the
 collaborating editor of Ramaiya''s Guide to the Companies Act and
 contributor to several volumes of International Law Reports
 (Cambridge). He has also instituted the Sarkar Law lectures in Kolkata,
 where senior English Judges such as Lord Slynn of Hadley, Lord Nicholls
 of Birkenhead and Lord Justice Robin Auld have lectured.
 
 He was formerly Chairman of the Board of Directors of Clarion
 Advertising Services Ltd, now known as Bates India Ltd and President of
 The Bengal Club, Calcutta 1998-99 and Director of Bombay Stock Exchange
 Limited. He is presently a Director of JSW Steels Ltd, Eveready
 Industries Ltd, EIH Associated Hotels Ltd, B & A Limited, B & A
 Packaging India Ltd, DESCON Limited, Island Hotel Maharaj Ltd and
 Mcnally Bharat Engineering Co Ltd. Mr Sarkar''s nature of experience is
 in Law and Corporate Affairs.  He does not hold any shares in the
 Company.
 
 Mr Biswadip Gupta, aged about 61 years, is a BE(Metallurgy) and MBA and
 has about 39 years experience in the steel and refractory industry. He
 has received extensive training worldwide in the refractory making
 industry during his 20 years association with the Vesuvius Group, UK
 before being associated with Vesuvius India. Since 1979 he was the
 Consultant Director, Indian Operations of Vesuvius Corporation SA,
 Switzerland. Mr Gupta had joined the Company as a Director in 1991 and
 was the Managing Director from 1992 upto April 17, 2007 and thereafter
 continued as a non-executive Director. He had been instrumental in
 setting up of the Indian operations. Mr Gupta was the recipient of the
 Chief Executive''s Award for outstanding performance in 1993 and again
 in 2003 from the Vesuvius Group during his tenure as Managing Director
 of the Company.
 
 Mr Gupta was formerly President, Bengal Chamber of Commerce and
 Industry, Deputy Chairman of the Indian Refractory Makers Association
 and Chairman of CII (Eastern Region). He is presently Jt. Managing
 Director & CEO of JSW Bengal Steel Ltd and Director of Barbil
 Beneficiation Company Ltd, DESCON Ltd, Dishergarh Infrastructure
 Development Pvt Ltd, Gourangdih Coal Limited, JSW Energy (Bengal) Ltd,
 NICCO Engineering Services Ltd, Nicco Ventures Limited and Member
 Managing Committee of Bengal Club Ltd. Mr Gupta''s nature of experience
 is in Steel and Refractory business, Corporate Affairs and Finance. He
 holds 78,749 shares of the Company.
 
 At the Annual General Meeting held on April 17, 2007 Mr Tanmay Kumar
 Ganguly was appointed Managing Director of the Company for a period of
 five years commencing from April 18, 2007. His term ends on April 17,
 2012. The Board of Directors at their meeting held on February 29, 2012
 decided to reappoint
 
 Mr Ganguly as a Managing Director of the Company for a further period
 of five years effective from April 18, 2012 to April 17, 2017, subject
 to the approval of the Members at the ensuing Annual General Meeting,
 on terms of appointment and remuneration as set out in a draft
 Agreement to be executed between the Company and Mr Ganguly. Mr Ganguly
 is 48 years of age, a Bachelor of Commerce graduate and a Chartered
 Accountant and has about 24 years experience in chemicals, refractory
 and FMCG industry. He started his career with Union Carbide India Ltd
 and has worked in ICI (India) Ltd, Hindustan Lever Limited, Pillsbury
 India as Chief Financial Officer, as Finance Director-Asia Pacific
 Region of General Mills (Pillsbury) then returned to India as President
 and CEO of General Mills India and immediately before joining our
 Company was working in Radhakrishna Foodland Pvt Ltd as Chief Operating
 Officer. He had previously worked in the Company as Controller. He is
 not a Director of any other company in India. He holds 67,471 shares
 of the Company.
 
 The Group''s Code of Conduct applicable to the Directors and employees
 of the Company has been adopted by the Board and all Directors and
 senior management of the Company have confirmed compliance with the
 Code of Conduct and the declaration in this regard made by the Managing
 Director is annexed to this Report. All Directors have confirmed
 compliance with provisions of section 274(1)(g) of the Companies Act,
 1956.
 
 Listing and ISIN No
 
 The shares of the Company are listed on the Bombay and National Stock
 Exchange.
 
 The Company''s shares are compulsorily traded in the dematerialized
 form. The ISIN number allotted is INE 386A01015. The details of
 shareholding pattern, distribution of shareholding and share prices are
 mentioned separately in the Corporate Governance Report.
 
 Group Activities
 
 The Vesuvius Group, which holds about 56 % of the share capital of the
 Company, is a world leader in the design, engineering, manufacture and
 delivery of refractory products, systems and services for high-
 technology industrial applications. The Group continues to focus on
 safety, technology, investing into growing markets including in India.
 With the Group''s support the Kolkata Plant expansion was undertaken
 and a new plant at Visakhapatnam has been envisaged. The Group has a
 sincere commitment to and has been extremely supportive of their Indian
 operations and continues to provide constant support in terms
 of technology, systems, manufacturing etc.
 
 Corporate Governance
 
 The Company has already put in place the SEBI guidelines pertaining to
 Corporate Governance. The eight member Board of Directors consist of
 four non- executive independent directors, three non-executive
 non-resident directors representing the parent company and the Managing
 Director. The non-resident Directors have waived their commission on
 profits for the year and have not received any sitting fees for
 attending the meetings of the Directors. The Managing Director does not
 receive sitting fees for attending the meetings of the Board or any
 Committee thereof.  The sitting fees paid to the directors are within
 the limits prescribed under the Companies Act, 1956.
 
 The Audit Committee was constituted on October 24, 2000 and the
 Investor Grievance Committee on February 12, 2001. The details of the
 composition and attendance of the Board and Committees thereof and
 remuneration paid to the Directors as well as the shares held by the
 Directors have been given separately in the Corporate Governance
 Report.
 
 The Corporate Governance Report giving the details as required under
 clause 49 of the listing agreement with the stock exchanges is given
 separately and forms part of the Directors Report to Shareholders. The
 Corporate Governance Certificate for the year ended on December 31,2011
 issued by the Statutory Auditors is also attached.
 
 Mr Tanmay Ganguly, Managing Director and Mr Sanioy Dutta, Chief
 Financial Officer have given their certificate under clause 49(V) of
 the listing agreement with stock exchanges for compliance with the Code
 of Conduct of the Company regarding the annual accounts for the year
 ended on December 31, 2011 which is attached and forms a part of our
 Report to Shareholders.
 
 Investor Education and Protection Fund
 
 In compliance with the provisions of section 205Aof the Companies Act,
 1956, a sum of Rs. 135,066/- being the dividend lying unclaimed out of
 the 10th Anniversary Special Dividend declared by the Board of
 Directors on February 17, 2004 and a sum of Rs 351,303/- being the
 dividend lying unclaimed out of the seventh dividend declared by the
 Company for the year ended on December 31, 2003 at the Annual General
 Meeting held on April 20, 2004 was transferred to the Investor
 Education and Protection Fund of the Central Government in March, 2011
 and May, 2011 respectively, after giving several notices and reminders
 to the concerned shareholders.
 
 The dividend which remains unclaimed out of the eighth dividend
 declared by the Company for the year ended on December 31, 2004 at the
 Annual General Meeting held on April 12, 2005 will be transferred to
 the Investor Education and Protection Fund of the Central Government in
 May, 2012 pursuant to the provisions of section 205A of the Companies
 Act, 1956. Thereafter no claim shall lie on these dividend from the
 shareholders. Individual notices have already been sent to the
 shareholders concerned on February 12, 2012.
 
 Notices pursuant to Rule 4Aof the Companies Unpaid Dividend (Transfer
 to General Revenue Account of the Central Government) Rules, 1978 have
 been sent to all members concerned on January 30, 2012 reminding them
 to encash their unclaimed dividend.
 
 Auditors
 
 M/s BSR& Co., Chartered Accountants, who were appointed Auditors of the
 Company at the Annual General Meeting held on April 19, 2011, hold
 office till the conclusion of the ensuing Annual General Meeting, and
 being eligible, offer themselves for reappointment.
 
 Fixed Deposits
 
 The Company has not accepted any deposits from the public, and as such,
 there are no outstanding deposits in terms of the Companies (Acceptance
 of Deposits) Rules, 1975.
 
 Information pursuant to section 217 of the Companies Act, 1956
 
 The prescribed particulars of Conservation of Energy, Technology
 Absorption and Foreign Exchange Earnings and Outgo required under
 section 217(1)(e) and Particulars of Employees required under section
 217(2A) of the Companies Act, 1956 read with the Rules made there under
 are given in the Annexure to this Report and form a part of the
 Directors Report.
 
 Directors'' Responsibility Statement
 
 The Board of Directors acknowledges the responsibility for ensuring
 compliance with the provisions of section 217(2AA) of the Companies
 Act, 1956 in the preparation of the annual accounts for the year ended
 on December 31, 2011 and state that:
 
 i.  in the preparation of the annual accounts, the applicable
 accounting standards have been followed along with proper explanation
 relating to material departures, if any;
 
 ii.  the Directors have selected such accounting policies and applied
 them consistently and made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company at the end of the financial year and of the profit of
 the Company for that period;
 
 iii. the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of this Act for safeguarding the assets of the Company and
 for preventing and detecting fraud and other irregularities;
 
 iv.  the Directors have prepared the annual accounts on a going concern
 basis.
 
 Corporate Social Responsibility
 
 The Company recognizes that its operations impact a wide community of
 stakeholders, including investors, employees, customers, business
 associates and local communities and that appropriate attention to the
 fulfillment of its corporate responsibilities can enhance overall
 performance. In structuring its approach to the various aspects of
 Corporate Social Responsibility, the Company takes account of
 guidelines and statements issued by stakeholder representatives and
 other regulatory bodies.
 
 Social, environment and ethical matters are reviewed by the Board
 including the impact such matters may have on the Company''s management
 of risk.
 
 Particular emphasis is focused on the following areas:
 
 - Code of Conduct : requiring all employees to comply with the highest
 standards of legal and ethical behaviour.
 
 - Health, Safety & Environment: protecting the health and safety of our
 employees, contractors, customers and the general public and reducing
 energy consumption and waste in our operations.
 
 - Products and services: developing innovative products and services
 which promote sustainability in our customers'' production processes and
 products.
 
 The Company continues to support local initiatives to improve
 infrastructure and increase business opportunities as well as support
 in other corporate social responsibility initiatives.
 
 Human Resources Management & Health, Safety and Environment
 
 people are considered to be one of most valuable resources by the
 Company and recognizes that working environment motivate employees to
 be productive and innovative. The continuous leadership and technical
 training courses give employees the opportunity to improve their
 skills, maximize personal potential and develop careers within the
 Company and the Group while adhering to Vesuvius values.
 
 Health and safety of all employees and associates the Company works
 with remains of paramount importance. Much work has gone into making
 operations safer by implementation of standards for vehicle and machine
 safety, ergonomics initiatives, wearing protective equipments, regular
 safety audits etc. Also managing environment impact is a matter of
 priority and therefore continuous care for the environment, responsible
 disposal of wastes and development of local co-operatives are engaged
 into.
 
 Appreciation
 
 Your Directors record their sincere appreciation of the dedication and
 commitment of all employees in achieving and sustaining excellence in
 all areas of the business. Your Directors thank the Shareholders,
 customers, suppliers and bankers and other stakeholders for their
 continuous support to the Company.
 
                                          For and on behalf of the 
 
                                                Board of Directors
 
 Kolkata                                     Dr Saibal Kanti Gupta
 
 February 29, 2012                                        CHAIRMAN