MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The management brsents the analysis of performance of your Company for the year 2014-15 and its outlook for the future. This outlook is based on assessment of the current business environment and the expectations, estimates and projections of the management of the Company. It may vary due to future economic and political development, both in the Indian and international economies and due to other factors beyond control.

Industry Structure and Development

Machine tools production in India has reached to Rs. 2075 Cr. during Apr- Sept-14 compared to Rs.1613 Cr during Apr- Sept -13 registering the growth of 29%. Machine wise production values are collected from all the members from each quarter and consolidated to annual production values for further analysis. IMTMA segregates the production of machines into CNC machines, Non CNC machines, Metal cutting machines and Metal forming Machines.

Machine tools imports to India has reached Rs.2482 Cr during Apr- Sept-14 compared to Rs. 2222 Cr during Apr-Sept-13 registering growth of 12%. All types of machines CNC, non CNC, metal cutting, metal forming, used and new machines are imported to India from various countries.

Machine tools consumption has reached Rs.4421 Cr during Apr- Sept-14 compared to Rs.3678 Cr during Apr-Sept-13 registering growth of 20%. All types of machines CNC, non CNC, metal cutting, metal forming, are consumed in India. The year 2014-15 was marked by growing global uncertainties. Global recovery has stalled, growth prospects have dimmed and downside risks have escalated. The growth of the Indian Economy has also slowed down.

In the brsent scenario though there is a slowdown in the economy and the company could not perform well during the first quarter when compared to the turnover for the same period in the brvious year, If the circumstances change and are favorable the company is expecting to perform well during the next coming quarters.

Segment -wise Performance

The company has a rich experience of 31 years in automobile sector and in manufacturing of auto component such as Cylinder Blocks and Cylinder Heads, further your company planned to expand further and enter into the manufacturing field of Connecting Rod as there is an interest evinced by our clients. For this new Connecting Rod projects, the company will be setting up a new unit and the requisite machines are been sourced from and equipped by German technology.

With an efficient innovative management team and vast experience in Development, Production, Supply of Machine Tools, Jigs, Fixtures and Accessories needed and Improved and sustained efforts of your Company for enhancing the technological competencies and cost competitiveness the company is expected to yield good results in the near future.

Internal Control Systems and their adequacy

Your Company has effective internal control systems commensurate with the size of the Company. This is further supplemented by an internal audit being carried out by an external firm of Chartered Accountants. The internal auditors conduct audits of the performance of various departments, functions and locations and also statutory compliances based on an annual audit plan chalked out in consultation with the Audit Committee. They report their observations/ recommendations to the Audit Committee of the Board of Directors, which comprises three nonexecutive Independent Directors. The Audit Committee reviews the Audit observations and follows up on the implementation of the suggestions and remedial measures and also recommends increased scope of coverage, wherever necessary.

Human Resources and Industrial Relations

Employees are the main resource for the Company. The Company has done its best to retain the best employees and create a favorable work environment that encourages the young credible employees to perform innovatively and train them in a sophisticated manner with implementation of new technologies.

During the year under review all employees worked innovatively and supported productivity in an encouraging manner and high technological changes have been initiated in the process of production resulting in to cost effective quality production.

The staff strength of the Company as on 31st March, 2015 was 1020 (including trainees, employees on contract).

Financial Overview during the Year:

During the year under review the Company had maintain an all round growth in the operations. The turnover increased by 6%, and the Profit before Interest and Taxes increased by 1% compared to the brvious year. The Earnings per Share increased from Rs. 0.39 in the brvious year to Rs 0.63 in the year under review.

The optimistic outlook about the company's continued growth in the years to come enabled the Board to declare a dividend of 5% to its equity shareholders.

Outlook

Global economic uncertainties will be there in the near future. The company believes that with the strong customer relations, product development capabilities, design & engineering capabilities and stronger balance sheet it can create opportunities for itself in this uncertain environment.

With a focus on innovation and technology to best leverage its strong customer relations, and with a considerably good order book the Company is reasonably confident of continuing on the growth path in FY 2014-15.

Cautionary Statement:

Statements in the Management's Discussions and Analysis report describing the Company's projections or brdictions may be 'forward-looking statements' within the meaning of applicable laws and regulations. Actual results could differ materially from those exbrssed or implied.