MANAGEMENT DISCUSSION AND ANALYSIS REPORT

(A part of the Directors' Report)

Some of the Highlights of the Company's operations during the year on a consolidated basis are:

• The Consolidated Revenue from Operations (Gross) increased by 7.05% to Rs.42, 457.99 lacs in comparison to Rs.39,658.29 lacs in the brvious year.

• Consolidated earning after Taxes has been Rs.1,412.19 lacs during 2014-15 as against Rs.1,931.28 lacs in the year 2013-14.

INDUSTRIAL STRUCTURE AND DEVELOPMENT

Indian Automobile Industry is consistently growing supported by increase in domestic demand and availability of skilled manpower at a cost comparatively lower than developed countries. It is evident beyond doubt that investment in new technologies, manufacturing facilities and skills development will be in that part of the world where large population driven markets have developed and more and more highly competitive goods and services will emanate from such locations, like India.

OPPORTUNITIES AND THREATS

Opportunities:

a) Introduction of MUV / SUVs at different price points and features has opened up new sub-categories leading to varied demand of auto components.

b) Strong volume growth of E-commerce both global such as Amazon and Indian such as Flipkart and Snapdeal has meant there is increasing movements of merchandise on Indian roads that will lead to more smaller delivery vehicles.

c) Smaller sized Commercial vehicles for small trips and small weight adds to more numbers.

d) India can serve as an excellent export base to global carmakers on the lookout for strong engineering workforce. With states within India wooing such investors aggressively, the domestic demand for auto components may not remain within the confines of Indian Automobile demand.

e) Re-emergence of Scooters is likely to add to the overall two-wheeler demand.

f) The impetus to domestic manufacturing by way of the 'Make in India' campaign is capable of rejuvenating domestic demand across.

g) Increased thrust on Infrastructure and Mining Sector revival are two key opportunities for growth in Commercial vehicles.

Threats:

a) Exports to Europe can be jeopardized by continuous debrciation of Euro.

b) Global brssure for more Free Trade arrangements can lead to tariffreduction which may flood domestic markets with imports from countries with access to better R & D and Technology.

c) Threat of cheaper imports flooding the Indian markets

d) The glut in auto industry both in terms of number of manufacturers and models competing in each segment has lead to creation of many price-points. Such a situation has the potential to seriously harm some auto companies and their dedicated auto component suppliers. The latter may stand to lose the investments made for serving their customers

e) Serious traffic congestion in cities and metros can lead to mass transit alternatives that may stifle personal vehicle demand.

CURRENT YEAR OUTLOOK

Auto industry like all others, is waiting for good times. The lack of adequate demand in the last festive season and increase in Excise Duty w.e.f. 1st January 2015 has dampened the spirits. Improvement in Auto spares demand suggests more organized fleet renewal. Revival of Scooters as a category is also a good sign. The big push awaited is towards Infrastructure and Mining revival.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has institutionalized proper and adequate internal control systems to ensure that Company's assets are safeguarded and protected and all transactions are authorized, recorded and reported correctly. A well-defined program of internal audits and management reviews commensurate with the size and nature of the business supplement the process of internal control. Properly documented policies, guidelines and procedures are laid down for this purpose.

The Company in addition to employing qualified and experience professionals has an Audit Committee comprising of Independent, Non-Executive and professionally qualified Directors which interacts with the Statutory Auditors and Internal Auditors, wherever required. The Committee mainly deals with accounting matters, financial reporting and internal controls. During the year under review, the Committee met 4 times. The Company has continued its efforts to align all its processes and controls with the best practices in the industry.

FINANCIAL AND OPERATIONAL PERFORMANCE

During the financial year 2014-15, your Company achieved total revenue from operations of Rs.32,149.81 lacs than the brvious year figure of Rs.30,136.37 lacs on stand-alone basis. Earning before Taxes has been Rs.1, 307.80 lacs as against Rs.1,743.57 lacs last year.

A summary of the financial figures for the year is given in the Directors' Report.

HEALTH, SAFETY, SECURITY ENVIRONMENT

Your Company went asbestos-free last financial year. Besides  demonstrating environmental awareness and qualifying as a supplier to global automakers, it also provides a healthier environment in the manufacturing facilities. The company is concerned about the occupational health and safety of its workers and staff and periodic health check-up camps are organized. Regular training is imparted at all levels. Company's main plant at Faridabad is ISO 14001 and OHSAS 18001 certified for Environmental Health & Safety issues.

HUMAN RESOURCES / INDUSTRIAL RELATIONS

The company maintains open communication channels with workforce and keeps them engaged with its objectives towards attainment of healthy employer-employee relationship. The Company follows different programs for the development of skills among employees at different levels. Employees have also contributed significantly towards various cost saving initiatives in different areas.