MANAGEMENT DISCUSSION AND ANALYSIS

The year in retrospect was better for the Company. Overall economic condition in the country is improving as well as the uncertainties related to government policies are being clarified / opened-up for the industries and world at large. The following discussion should be read in conjunction with the Company's financial statements and related notes provided in Annual Report for the financial year 2014­15. The discussion is not necessarily indicative of the results that the Company will achieve in the future period.

OVERVIEW & INDUSTRY OUTLOOK

The Indian economy is expected to grow at a faster pace with a stable government at the Centre will lead to a steady pace of implementation of policy of reforms, thereby increasing private sector investments. Inflation is showing signs of cooling down. RBI is taking various measures to curb inflation with a view to boost business confidence and create a more favourable investment climate resulting in availability of funds. Decline in interest rates and improvement in employment outlook will definitely improve overall scenario of industry.

We are into quarrying of natural dimensional stone which are mainly used for flooring, wall cladding, pavement, etc. by the construction, public utility, infrastructure industry, etc.

Looking to the continued slowdown in the construction and infrastructure sector in the years of retrospect, your Company were also affected a little, however, the Company is maintaining pace with the market forces and is on its continuous growth path.

The Company has taken measures to curb cost of production viz a viz quality improvement to make wide acceptability of the product. Considering the market conditions, level of debtors has gone up.

The Government of India has launched a new urban development mission viz. 100 Smart Cities and develop 500 cities under AMRUT project, which include cities with a population of more than 1,00,000 and some cities of religious and tourist importance. These programs will encourage construction and infrastructure sector in the next 10 years and your Company will not be an exception in gaining its share.

New national program are being designed to facilitate investment; foster innovation; enhance skill development; protect intellectual property; and build best-in-class manufacturing and infrastructure. There was never been a better time to make in India.

OPPORTUNITIES AND THREATS

The Indian Government is taking every possible initiative to boost the infrastructure sector. Long-term outlook for the construction industry appears very positive. Rising interest costs, stagnating orders, a slowdown in new government projects and an increasing number of stalled projects are just some of the challenges the industry is facing. We expect a gradual improvement in the country's business environment as various reforms begin to gain traction and attract greater private investment.

By 2020, India is expected to emerge as the world's third-largest construction market. Large infrastructure investments and growing urbanization will fuel this growth.

A key driver of the economy, infrastructure is highly responsible for propelling India's overall development. The industry enjoys intense focus from the top officials of the Government for initiating policies that would ensure time-bound creation of world class infrastructure in the country. This sector includes power, bridges, dams, roads and urban infrastructure development.

India is witnessing significant interest from international investors in the infrastructure space. Many international companies are keen on collaborating with India on infrastructure, high speed trains, renewable energy and developing smart cities. The government has unveiled many plans to invest in its decrepit rail network over the next five years, heralding Prime Minister Narendra Modi's aggressive approach to building infrastructure needed to unlock faster economic growth.

Considering the Government of India's encouragement to the Industries by way of "Make in India initiative" the Company expects good demand for Kotah stones in years to come. Also due to wide usages and affordability of Kotah stone, its market will remain more or less stable and unaffected by market forces.

The Company has started using combrssors running on GRID power against HSD based DG set to reduce cost. This is an initial effort resulting in cost saving, the Company is also planning to induct more combrssors running on electricity in its area of operation. The Company has also taken necessary care through improved technology, optimum assets utilization and use of GRID power in replacement of DG sets to curb the cost.

Advance R&D towards using of quarry waste to produce limestone related products is in pipeline.

The relative weakness in the Indian rupee is also likely to dampen infrastructure activity as it makes more costly for Indian infrastructure companies to procure overseas technology, equipment and materials.

ENVIRONMENT

The brserving of environment is a great challenge in a developing country like India, which has a fragile environment that is faced with high levels of land degradation. The rapid urbanization alongside associated problems like pollution of air and brssure on existing infrastructure with regard to waste management, pose a race against time.

The Company is conscious of the importance of environmentally clean and safe operations. Company's policy requires conduct of operations in such a manner so as to ensure safety of all concern, compliances, environmental regulations and brservation of natural resources.

FOREIGN SUBSIDIARY COMPANIES

As a diversification program, during the year under review the Company has incorporated a wholly owned subsidiary viz: ASI Global Limited at Mauritius and acquired a Lime Stone Crusher unit Al Rawasi Rock & Aggregate LLC situated at Fujairah U.A.E. The unit is expected to start commercial production soon.

PERFORMANCE AND REVIEW OF OPERATIONS

During the year under review, production in terms of sq. ft. was marginally down, however, in terms of tonnage it has marginally up resulting which a better realization as compared to brvious year. Shifting of power generation from HSD based DG set to GRID power again beneficial in terms of savings in power cost.

The Company has also installed electrical lines in Joganhedi and Suket which will result in further reduction in power cost. The Company has also started on line power trading for self-consumption during the peak working hours from Indian Electricity Exchange (IEX) which has also resulted into saving of power cost. All these initiatives will just not reduce the power cost but curb the pollution in the mining area.

The Company is having a dedicated team of technocrats and professional who are committed for smooth, efficient and economical operations at all times. The Company has been constantly working on innovative mining techniques for mineral recovery, reduction of waste, environment friendly mining and increase in life of mines.

The Company always believes in environment friendly policy, as a part of its efforts to augment "Green Power" the Company is having Wind Power Plants of 4.75 MW in the state of Tamil Nadu, Karnataka and Maharashtra. The power generation was lower as compared to brvious year in view of low wind during the year under review.

RISK AND CONCERNS (KOTAH STONE BUNSINESS)

In view of continuous mining the Company has to keep on acquiring surface right of land in its lease area. In the recent past there is a considerable rise in the price of land which has again a dampening impact on the bottom line of the Company.

The Company is very much concern on the environment regulations and following the same religiously, any deviation in environmental parameters are being viewed severely, internally as well as externally. In view of depth being increasing in some of the mining areas, the cost of handling overburden will be increased in the coming years.

The changes in Government policies for mining and environmental, slowdown in construction and infrastructure sector and any other new restrictions or regulations may have a cause of concern; however, efforts are being made, to make an assessment of such risks, quantify them and also to work out solutions, products or the practices, to mitigate them.

RISK AND CONCERNS (SUBSIDIARY)

The performance of the Lime stone quarry is mainly depending upon the demand for lime stone and performance of the unit and local laws. The Company has taken all the brcautionary measures to mitigate those risks. The Company is using the services of the experts to run the plant efficiently and provided necessary funds for smooth operation of the plant.

OUR EDGE

The industrial harmony is being maintained in carrying on its operations professionally and economically, utmost care is being taken in compliances of regulatory requirements especially on safety, health and environmental front which will be helpful in maintaining its leadership in the industry.

The Company has established a record of consistent relationship with customers. We are the only Company in the organized sector of Kotah Stone mining and processing which gives us an edge over our competitors.

The Company has a strong management team with significant experience, knowledge and execution capability.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The internal control systems are designed to ensure that financial and other records are reliable for brparing financial information and other reports.

The Company has a policy of reviewing and if necessary, revising its systems and procedure to ensure controls at appropriate levels. All operating parameters are periodically monitored and strengthened.

Review of internal audit system and compliance of the accounting standards brscribed by the Institute of Chartered Accountants of India by an independent Audit Committee.

The management continuously reviews the internal control systems and procedures for the efficient conduct of the Company's business.

Internal Control Systems are implemented to safeguard the Company's assets from loss or damage, to keep constant check on the cost structure, to brvent revenue leakages, etc.

Generation of periodic management reports to monitor the statutory and other compliance.

DEVELOPMENT IN HUMAN RESOURCE / INDUSTRIAL RELATIONS

Our Industry is highly labour oriented which needs regular interaction with the labourers and attending to their concern. The Company has always recognized human resource as natural capital and regular on the job training and class room lectures have helped in improvement in the quality and utilization of resources.

Being a good pay master in the industry has helped in maintaining good industrial relation and facing challenges successfully. Mutual understanding, maintaining harmonious and cordial Industrial Relationship is the utmost priority of the Company.

The Company has maintained very harmonious and cordial industrial relations throughout the year. This has helped in the improvement of productivity and optimum utilization of the Company's resources including human resources.

CORPORATE SOCIAL RESPONSIBILITIES

The Company is always committed for social commitment by helping and contributing to various social causes and events. However, as per the provisions of Section 135 of the Companies Act, 2013 and Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 the Company has constituted a Corporate Social Responsibility (CSR) Committee to take care of CSR activities of the Company. During the Financial Year 2014-15 the Company has spent Rs. 25.00 lacs towards CSR activities. A detailed report on the CSR activity of the Company has been given as annexure to the Directors Report.