(1) MANAGEMENT DISCUSSION AND ANALYSIS REPORT

(a) Industry Structure and Development :

Your Company is mainly engaged in the manufacturing and marketing of Steel Pipes and Cold Rolled Steel Strips & Coils which fall within the single segment of "Iron & Steel Industry."

In 2014, India retained its position as the 4th largest steel producing country in the world, behind China, Japan and the USA. The crude steel production grew by 2.3% to 83.2 million tonnes, while steel demand grew by 2.2% to 75.3 million tonnes. The Indian Steel Industry has witnessed divergent trends in various segments in the financial year 2014-15. During the year, the Industry in general and Iron and Steel Industry in particular has been adversely affected by the increase in input costs which has increased the cost of production per unit. Financial Year 2014-15 has been a year of achievements despite the severe impact of externalities. The Company was severely impacted by the raw material (RM) crisis. As a consequence the Company's performance in terms of production, turnover and profitability has been adversely affected.

The country's steel demand is projected to grow at a healthy rate of around 6-7% during financial year 2015-16, supported by gradual economic recovery. The government's growth-oriented reforms have helped enhance the confidence of businesses and potential investors, which will strengthen steel demand, going forward. The management of the Company is further making all out efforts to improve the working of the Company in future.

(b) Company's Performance:

The total revenue of the Company has declined to Rs.13776.33 lacs as compared to Rs.16959.54 lacs in the brvious year. The net profit after taxes is placed at Rs.227.60 lacs as compared to Rs. 259.51 lacs in the brvious year.

(c) Dividend

Your directors are constrained not to recommend any dividend on equity shares for the period under review for conserving resources to strengthen the financials of the company for its future requirements.

(d) Outlook : Opportunity, Threats, Risks & Concerns :

The Indian economy is on a path of gradual recovery. The government has undertaken several steps to unplug the bottlenecks and to revive the business confidence. The Indian economy stands to benefit from the correction in global crude oil prices, will have positive impact on the macro economy in form of lower inflation, reduced current account deficit, healthier fiscal accounts, increased consumption and a stable INR. Indian economy is among a few economies globally for which economic growth forecast has been raised by the IMF The IMF has raised its India GDP growth estimates for financial year 2015-16 to 7.5%. In 2015-16, steel demand is expected to grow by 6% to 7%. However, a much sharper than expected increase in inflation and higher than budgeted fiscal consolidation are the key downside risks to the outlook, highlights World Steel Association.

Global economic growth indicators are moderately positive, but the volatility in energy prices, The IMF forecasts world economy to expand at 3.5% this year and 3.8% in 2016, terming global growth prospects as moderate and uneven in its latest April 2015 World Economic Outlook. The growth in advanced economies, aided by fall in oil prices, is projected to strengthen, for the third year in a row, to 2.4% in current year 2015 compared to 1.8% in current year 2014. The growth in emerging markets and developing economies, on the other hand, is expected to weaken to 4.3% in current year 2015 compared to 4.6% in the brvious year.

Your directors perceive following factors which may pose threat, risk & concern for the Iron & Steel Industry in general and your company in particular:

1. Any adverse conditions of user sector to which it caters, thus adversely affecting the demand.

2. Underdeveloped infrastructure curtailing growth prospects.

3 . The supply and demand imbalance due to new capacities coming on stream while the demand remains subdued which may have negative impact on the plant utilization and steel prices.

4. Subdued growth of the manufacturing sector impacting demand.

5. Quantitative restrictions and/or additional tariffs of exports from India by importing countries.

6. Unbrdictable and sharp cyclical movements in the raw material and other input prices.

7. Any change in Govt. Policies pertaining to steel industry may affect the profitability.

The opportunities of growth for your company as detailed below are manifold in view of its Strengths which may also counter the above concerns:-

1. It is expected that better trends will emerge and may improve also in the times ahead. Your company by virtue of quality and market oriented specification of its products have posted profitable operations during the most trying times in the past notwithstanding minor declines. As such current conditions may pave a way for improved performance in future.

2. Well established customers base for the last over 34 years.

3 . Your Company is fully poised to reap the benefits of economies of scale and it will be in a better position to negotiate raw material prices on long term bulk lifting basis & definite savings on overheads will bring down the cost per unit of production and lead to higher profitability.

4. Your Company has strategic advantage as its units are located in the industry friendly areas having all infrastructural amenities.

Thus, your company stands in good stead to avail of the opportunities and also to take head on successfully the areas posing risks, concerns and threats to it.

(e) Business Risk Management:

Pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has constituted a Business Risk Management Committee. The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board's Report. The Company has a robust Business Risk Management (BRM) framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting.

The key business risks identified by the Company and its mitigation plans are as under:

i. Risk related to Personnel:-

Our business is increasingly dependent on the skills and competencies of our employees and management team. The general war for talent in our growing economy has created a substantial risk related to the retention of key personnel both in manufacturing and managerial levels. This risk is mitigated through effective HR policies relating to recruitment and retention and a proactive remuneration and rewards policy that is periodically reviewed at the highest management level. With excellent performance track as well as best HR practices we are able to attract and retain people for growth of our business.

ii. Risk related to Safety:-

The company has taken adequate insurance covers to indemnify the risks associated with the safety of personnel, building, stock and other infrastructure of the Company. These include:

i) Fire Insurance Policies

ii) Various Breakdown Policies

The company has also taken steps to strengthen IT security system as well as physical security system at all our locations

iii. Compliance Related Risks:-

The Company is committed to being a responsible corporate citizen and respects the laws and regulations of the country. All the compliances under various laws applicable to the Company, including under Companies Act, 2013, Factories Act, 1948 and Income Tax Act 1961 etc., are followed in letter & spirit.

 (f) Cautionary statement:

Certain statements in this release concerning our future growth prospects are forward looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition within Steel Industry including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, our ability to successfully complete and integrate potential acquisitions, the success of the companies in which the company has made strategic investments, withdrawal of governmental incentives, political instability, legal restrictions on raising capital or acquiring companies outside India, general economic conditions affecting our industry. The Company does not undertake to update any forward looking statements that may be made from time to time by or on behalf of the Company.