MANAGEMENT DISCUSSION & ANALYSIS REPORT

The Indian Economy

The Indian economy is in the recovery mode during the year 2014-15. The Indian economy GDP grew at 7.3% during the FY 2014-15.lt emerged as one of the largest economies with promising economic growth having controlled inflation, rise in domestic demand, decline in oil prices and government reforms to trigger growth. The balance of payment position has also improved due to the reduction in the oil prices.

Certain sectors like auto, consumer goods, infrastructure have shown some signs of recovery, but there are several sectors of the economy which are still not showing signs of coming out of recession. The interest rates have been marginally reduced but not in line with the expectation of the Industry. The banking sector is also under a lot of stress due to the increasing NPAs there by impacting its ability to provide the much needed finance at the right time for the Industries which are growing.

It is expected that the monsoon would be good there by triggering growth in the rural consumer demand this will in turn lead to increase in consumer spending which in turn would support improvement in the other sectors of the economy.

The government is taking a lot of proactive steps to trigger the growth. The prospects are over all positive. This should over a period of time lead to beginning of the capex cycle.

Industry Structure and Developments

The decline in the Oil prices and the freeze of the capital expenditure of oil and gas companies has an adverse impact on the flow of orders. The larger investments in infrastructure have slowed down considerably.

The government is taking a lot of proactive steps to trigger the growth process. The new core sectors projects are expected to get speedy government approval and clearance. The over all prospects of revival of the growth in the core sectors are positive. This should over a period of time lead to beginning of the capex. cycle, creating more business for capital goods sector and hence benefit our business in coming future.

Threat

The global reduction in oil prices has had its impact on the expansion plans of the Oil & Gas companies across the globe. The overall stagnation in the rate of growth in the world economy, increase in competition domestically as well as overseas, has the potential of adversely affecting the net margins. The high cost of funds in India and tight liquidity can also have adverse impact on the operations of the Company, especially when the Companies are on a growth path.

Outlook

The management aims to focus more on improving the efficiencies and reducing the over all costs and there by improving the margins of the business. The management is cautiously optimistic about the likely positive shift in the economic environment in 2015-16. It expects that the capital expenditure plans of the public sector oil companies in India would take its shape during the year 2015-16 and new tenders would be rolled out, this may be reflected by way of increase in the orders in the later half of 2015-16.

The international market, especially in Middle East, has shown signs of recovery and stability and offer opportunities for the Company to grow its brsence. The management has initiated the process of registering the Company in the international market and tendering for the export orders. The management is also optimistic that during the year 2015-16 it would be able to export the goods manufactured at its MIDC unit at Murbad, India. This would be a major breakthrough since it would open up the export markets for the company, which it has not tendered on its own this date. The management also intends to enter into the Infrastructure / EPC turnkey projects both in India and overseas and not restrict itself only to the Oil and gas companies in India.

Material Developments in Human Resources/Industrial Relations:

The management has focused on improving its quality systems by bringing in specialized human resources and strengthening its quality department. In order to sustain the rate of growth it has achieved in the last 2 years specific emphasis has also been levied on the marketing set up for the Indian market as well as opportunities in the export markets. In a growing economy, there is always demand for more skilled and able workforce. The ability to recruit and retain talent is a challenge for managements of all growing companies. Your management is aware of the same and taking necessary steps to not only recruit new manpower, but train and retain the existing one. The Company also recruits trainee engineers and brpares them for more responsibilities in the times to come.

Industrial relations were cordial in all division throughout the year under review.

Quality/ Safety Certifications:

Your Company has obtained the brstigious OSHAS certification. Your Company is also ISO 9001 certified by Bureau Veritas and approved holder of "U" stamp from ASME U.S.A., R Stamp & NB Stamp.

Internal Control System

The Company maintains adequate internal control systems, which provide among other things, reasonable assurance of recording the transactions of its operations in all material respects and of providing protection against significant misuse or loss of company assets. Moreover, the Management team regularly meets to monitor expectations and budgeted results and semtinizes reasons for deviations in order to take necessary corrective steps. The Audit Committee, which meets at regular interval, also reviews the internal control systems with the Management and the Internal Auditors. There are clear demarcation of roles and responsibilities at various levels of operations. The Company's internal control system is further strengthened by continuous periodical internal audit system and Review at the Board level. The specific appointment of internal auditor

would further strengthen the existing system. The internal audit is conducted at regular intervals at various locations of the Company and covers all the key areas. All audit observations and follow up actions are discussed with the Management as also the Statutory Auditors and the Audit Committee reviews them regularly.

Safety, Health and Environment

Safety, Health and Environment is a core value for your Company. Simply stated your Company's goals are: no accidents, no harm to people and no damage to environment. The Company's success owes to the health, safety & security of everyone who works for them. Safety and security of personnel, assets and environmental protection are also on top of the agenda of the Company at its manufacturing facility.

Clean environment and sustainable development integrated with the business objective is the focus of operations of the Company. The projects and activities are planned and designed with environment protection as an integral part to ensure a safe and clean environment for sustainable development.

Cautionary Statement:

The statements in this Managements Discussions & Analysis describing the Company's objectives, projections, estimates, expectations and brdictions which may be "forward looking statements" within the meaning of the applicable securities laws and regulations. The annual results can differ materially from those exbrssed or implied, depending on the economic conditions, Government Policies and other incidental factors and developments.