MANAGEMENT DISCUSSION AND ANALYSIS

A. Industry Structure, Developments and Outlook

The company is operating in the Merchant Banking industry; therefore its performance is largely dependent on the state of the capital markets and the macroeconomic conditions, within the country and globally.

The Indian economy grew at 7.3 per cent in 2014-15 due to improvement in the performance of both services as well as manufacturing sectors. Some of it is also on account of overall improvement in business sentiment since the formation of the new government at the centre that has been working on improving the overall business environment in the country along with strengthening bilateral relations. The overall positive sentiment was also reflected in the improved performance of the equity market that witnessed one of the highest returns in the recent past, as also in most other segments of the financial services industry. Over time, the monetary policy has also been easing with the containment of inflation, in order to provide a further impetus to growth. All these factors have contributed to an expectation of a further improvement in the growth trajectory, with the growth rate likely to cross 8% if enabling structural reforms are implemented.

CAPITAL MARKETS

FY15 has been a great year for the capital markets, with Nifty reaching new highs and registering a 27% return-highest in last five years. The return is largely led by re-rating in valuations, which is natural given the turnaround in the political as well as economic set up. The sectoral performance is quite surprising with healthcare, a defensive sector being the best performing with 57% returns. IT, financials and industrials were other sectors which outperformed. Materials, Telecom and Utilities were the laggards, delivering only single digit returns. Going ahead, given that valuations have seen a marked improvement, it would be the earnings which should drive the performance.

Primary Markets

Equity capital raising activity witnessed a small up trend this year after subdued performance in the brvious two years. The Initial Public Offer (IPO) market witnessed 46 IPOs of equity for raising an aggregate of 3,039 Crore and 24 debt issuances for raising an aggregate of 9,422 Crore in FY 2014-15 as against 38 IPOs of equity aggregating 1,236 Crore and 35 debt issuances aggregating 42,383 Crore in FY 2013-14. This fiscal year there was no Follow-on Public offer (FPO) compared to 2 FPO's in FY 2013-14 which raised an amount of 7,457 Crore. During the year, the corporate brferred to raise funds through qualified institutions placement raising an aggregate of 29,102 Crore from 51 issuances as against 13,663 Crore from 17 issuances in FY 2013-14. Corporate also raised 6,750 Crore through 18 Rights Issues in FY 2014-15 as against 4,576 Crore through 15 Rights Issues in FY 2013-14.

B. Opportunities & Threats Opportunities:

• Low penetration of financial services and products in India;

• Regulatory reforms would aid greater participation of all class of investors;

• Favorable demographics like huge middle class, larger younger population with disposable income and investible surplus, change in attitude from wealth creation and risk taking abilities of the youth etc.;

• Corporate are looking at expanding in overseas/domestic markets through merger & acquisitions and Corporate advisory Services.

Threats:

• Execution Risk;

• Increased competition from local and global players operating in India;

• Regulatory Changer impacting the landscape of business;

• Unfavorable economic condition.

C. Segment-wise or Product-wise Performance

The Company is engaged primarily in Merchant Banking activities and there are no separate reportable segments as per the Accounting Standard 17.

D. Risk Management

It is our constant endeavour to ensure that every risk we take has been thoroughly assessed, and that all risks are concomitant with their potential return. We have worked to strengthen our enterprise wide risk management processes and practices through our risk philosophy, whose core lies in the identification, measurement, monitoring and action along with the development of risk mitigation plans.

Our risk management process is overseen by the Board of Directors. Our risk management approach and practices continued to focus on minimizing the adverse impact of risks on our business objectives and to enable the Company to leverage market opportunities based on risk-return parity. Our periodic assessment and monitoring of business risk and regulatory environment resulted in timely deployment of appropriate mitigation measures.

E. Internal Control Systems & Their Adequacy

The company's internal control systems are adequate and provide, among other things, reasonable assurance of recording transactions of operations in all material respects and of providing protection against significant misuse or loss of company assets. The internal control systems lay down the policies, authorization and approval procedures. The adequacy of the internal control systems has been reported by the auditors under the Companies (Auditor's Report) Order, 2015.

F. Discussion on Financial Performance

During the year under review, though the gross total income of the Company increased to Rs.313.58 lacs from Rs.226.41 during the brvious year, the profit after tax decreased to Rs.71.11 lacs from Rs.97.01 lacs during the brvious year mainly due to loss on sale of investment. The overall improvement in the capital market was the main reason for increase in the total income of the company which directors expect to continue in the coming years also.

G. Material Development in Human Resources / Industrial Relations Front, Including Number of People Employed

There has been no material development on the Human Resource / Industrial Relations front during the year. Employee relations at all levels continue to remain cordial. The Company had 7 employees as on March 31, 2015.

CAUTIONARY STATEMENT

Statements in this Management Discussion & Analysis describing the Company's objectives, projections, estimates, expectations or brdictions may be "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those exbrssed or implied. Important factors that could make a difference to the Company's operations include economic developments in the country and improvement in the state of capital markets, changes in the Government regulations, tax laws and other status and other incidental factors.