MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Business of the Company

The Company will continue to be engaged in manufacturing and sale of plastic moulded products namely furniture and household. At brsent, the Company is concentrating on both furniture and household products. Household product is being manufactured to cater to both the export and domestic market. The products are sold under the brand name

NATIONAL

The Company is also engaged in its PVC flooring Mats business in Nellore, Andhra Pradesh in the southern part of the country under the brand name INSTA. .

Besides, the Company has rented out its idle real estate at Kashimira, Western Exbrss Highway, Thane.

Review of Operations

The total income for the year was at Rs. 89.37 Crores as against Rs. 72.98 Crores for the last financial year. Out of this, exports were Rs. 18.60 Crores as against Rs. 11.08 Crores for the last financial year. The profit before debrciation and interest was at Rs. 846 Lacs, as against Rs. 306.79 Lacs in the last financial year.

Key Strength and Growth Driver

The Company's product ranges have been well accepted due to its quality and price. The Company is exploring to sell its products in the other markets where it does not exist. Due to the quality and better outlook of the product, the Company is in a advantageous position to enhance its sales. New products have been introduced in the household sectors for catering the demands of the large buyers in the International Market. Innovations and improvements have been effected in the furniture product as per the market demand.

Business Outlook

The year 2013-2014 was indeed a challenging year due to various factors. Inflationary brssures continued unabated during the year. Moreover, the volatility in raw material prices and exchange rates, increasing interest rates added to the production costs. Due to all these factors, the brssure on the margins of the Company remained unabated for the entire financial year. But, despite all these factors the Company has, due to efficient management of resources with focus on cost reduction, been able to achieve a profit of Rs. 97.29 lacs. The exports of the Company have perked up 67% as against last year.

The Company is taking all efforts to improve the quality and productivity to get more orders at competitive rates. The Company has also undertaken various measures to cut down the cost and re-arrange the product and sales mix. The Company has planned to introduce high end products both for furniture and household in order to increase the market share and improve the margins.

The Company foresees huge opportunity for growth in the business of furniture and household segment.

Financial Risk & Threats

Interest and Finance cost have increased by Rs. 35.57 Lacs i.e. from Rs. 424.12 Lacs to Rs. 459.69 Lacs. Such increase in the interest and finance cost is due to increase in utilization of borrowed funds and its cost. The increase in borrowed fund was due to capital expenditure incurred and increased working capital requirement for the growth of the business.

The Company is exposed to risks from foreign exchange fluctuations, commodity prices, business risks, as well as price fluctuation of raw materials and finished goods in its entire product range. With the rise in demand & overall industrial sentiment, the industry is witnessing many new entrants with low capital base to serve the local market.

The Board and the Audit Committee of the Company periodically reviews the risk management procedures and takes various brventive measures to mitigate the risk factors.

Internal Control System and Their Adequacy

The Company's internal control systems, commensurate with the size of the Company and nature of its business, has defined policies and procedures ensuring that all transactions are authorized, recorded and correctly reported, all assets are safeguarded and protected against loss from unauthorized use or disposition, reducing wastages and maintenance of proper accounting records for ensuring accuracy and reliability of its financial information. As a matter of proactive planning, the Board has also constituted an Audit Committee which meets periodically to review the financial performance and the accuracy of financial records.

The Management duly considers and takes appropriate action on the recommendations made by the Statutory Auditors and the Audit Committee of the Board of Directors.

Industrial Relations and Human Resource

Industrial relations continued to be harmonious both at manufacturing unit as well as in branches. The employees are the key assets and the backbone of the Company and hence great emphasis has been laid on optimizing their performance. The training and education of employees across department is ongoing process of the company. The Company provides employees with fair and equitable work environment and supports them to develop their capabilities.

Cautionary Statement

The Management Discussion and Analysis Statements made above are on the basis of the available data as well as certain assumptions as to the economic conditions, various factors affecting raw material prices and selling prices, trend and consumer demand and brferences, governing and applicable laws and other economical and political factors. The management cannot guarantee the accuracy of the assumptions and projected performance of the Company in future. It is therefore, cautioned that the actual results may differ from those exbrssed or implied therein.