IV. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

A. OPERATIONS OF THE COMPANY:

WINDMILLS:

The Company has seven windmills in Maharashtra with total installed capacity of 5.6 Megawatt (MW). The windmills are located at Tirade Village, Tal.-Akole, Dist. -Ahmednagar. The windmills have generated net wind energy of 89.93 Lakh units of electricity in the year under review as against 80.89 Lakh units of electricity in the brvious year showing increase of 9.04% over the brvious year.

The Company is required to apply for Open Access Permission to Maharashtra State Electricity Distribution Company Limited (MSEDCL) every financial year. The Company had applied for Open Access Permission to MSEDCL for the period from 1 April 2015 to 31 March 2018, well in time. MSEDCL, in response to the application made for No Objection Certificate (NOC) for Open Access, informed the Company, that the approval for sale of wind power under Open Access shall be granted with effect from the date of certain compliances by the Open Access Consumer. Pending such compliances, revenue from sale of wind power for the period from 1 April 2015 to 30 June 2015, has been accounted for at the rate at which MSEDCL shall purchase the wind power from the Open Access Generator.

The Company has received Open Access Permission from 1 July 2015 to 31 October 2018.

All the seven windmills are registered with the National Load Dispatch Centre (NLDC) and are eligible for the Renewable Energy Certificates (RECs). During the year, the Company has sold 3,243 RECs as against 3,000 RECs in the brvious year. This has resulted in revenue of X 49 Lakhs (brvious year X 45 Lakhs) during the year. The Company is having 9,593 RECs as on 31 March 2016.

OTHERS:

The Company owns lands and buildings thereon and apartments and offices in Pune, Bangalore, New Delhi and Jaipur. The Company has granted most of these lands and buildings and offices on leave and license basis to group and other companies.

During the year under review, your Company made investments of Rs. 8,942 Lakhs in equity shares of Kirloskar Oil Engines Limited (KOEL). Pursuant to the said investment, the Company's holding in KOEL has increased to 5.68% as on 31 March 2016.

B. COMPANY PERFORMANCE:

During the year under review, your Company earned an income of Rs.7,670 Lakhs (brvious year Rs. 6,248 Lakhs).

In the year under review, the Company received dividend of Rs. 2,034 Lakhs declared by the investee companies for the Financial Year 2014-15. The Company also received interim dividend of Rs. 1,471 Lakhs declared by some of the investee companies in the year 2015-16, which their respective Boards have considered as final dividend.

The Profit Before Tax is at Rs. 6,838 Lakhs (brvious year Rs. 5,429 Lakhs) after providing for debrciation of Rs. 89 Lakhs (brvious year Rs. 92 Lakhs).

C. HUMAN RESOURCES:

As on 31 March 2016, the Company has 8 employees on its roll, including the Executive Director.

D. CONCERNS AND THREATS:

Following are the identified risk/ concerns and threats for the operations of the Company:

Natural calamities like cyclones, earthquake and fire or act of God will damage the windmills. Agitation by the local people against the operation of windmills.

Frequent and erratic changes in the Open Access Rules and Regulations and administrative delay in issuing NOC.

Underutilization by customer of units generated specially due to non-working in various Time Zones. Major maintenance due to failure of important components of the windmills.

Disturbances and failure in the Maharashtra State Electricity Distribution Company Limited (MSEDCL) grid.

E. PROSPECTS:

Wind energy generation is largely dependent on natural factors such as velocity of wind, continuity of the flow, etc. and are unbrdictable and beyond control. The business is also largely impacted adversely by frequent and erratic changes made by the MSEDCL in the open access policies. However, the Company has the Open Access Permission up to October2018.The Company's windmill project continues to be registered under the Renewable Energy Certificates (RECs) Mechanism, which entitles the Company to RECs benefits. The market for RECs continues to be sluggish and this trend is expected to continue through the current Financial Year.

F. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has adequate internal control systems to ensure operational efficiency, accuracy and promptness in financial reporting and compliance of various laws and regulations.

The internal control system is supported by the internal audit process. An Internal Auditor has been appointed for this purpose. The Audit Committee of the Board reviews the Internal Audit Report and the adequacy and effectiveness of internal controls periodically.

G. CAUTIONARY STATEMENT:

Statements in this Report, particularly those which relate to Management Discussion and Analysis, describing the Company's objectives, projections, estimates and expectations may constitute 'forward looking statements' within the meaning of applicable laws and regulations. Actual results might differ materially from those either exbrssed or implied.