MANAGEMENT'S DISCUSSION & ANALYSIS REPORT

a) Industry Structure & development:

According to industry reports, India is expected to rank fifth in the consumer durable market in the world by 2025. While the urban market accounts for majority share (65% of total revenue) in the consumer durables sector in India, future growth is expected to be driven by the rural market, as the government is increasing its focus on rural electrification.

The demand for appliances& consumer electronics (including refrigerators, washing machines and air conditioners) is on rise because of several growth drivers like rising disposable income, urbanization of consumers, easy consumer financing, product variant, organized retail market industry, and rural electrification. With raising manufacturing cost in alternate market and increasing local demand, global companies have turned their attention towards India. Further Government has taken several measures to boost the industry growth. To promote large-scale manufacturing, offset disability and attract domestic and global investments into the Electronic System Design and Manufacturing (ESDM) sector in India, the Modified Special Incentive Package Scheme (M-SIPS- provides subsidy for investments in capital expenditure) has been notified & recently scheme extended upto year 2020. Similarly state governments also provide encouragement to industrial investment by providing concessions, subsidies and financial incentives.

Consumer durables account for more than 40% of end consumer spending in India. Annual turnover of more than INR50Q billion and contributes more than INR150 billion to revenue of Centre and State governments. The market for white goods and televisions has been growing, but remains underpenetrated with sub-par levels as compared to the global average. According to industry estimates, refrigerator penetration is at 21%, washing machine at 8.8%, AC is at 3% and microwave oven at less than 1% penetration.

b) Outlook

With the increasing demand of consumer durables in India the EMS industry is growing drastically. Higher incomes, wider choices, and lower product prices have escalated the demand for electronic products in India and heightened the need to improve the country's electronics manufacturing ecosystem, leading original equipment manufacturers (OEMs) to turn to electronics manufacturing services (EMS). The expanding supply-demand gap for electronic products enhances the opportunities for EMS companies in the untapped Indian market.

Global OEMs are looking forward to invest in Indian businesses and set up manufacturing plants/ Expand existing business in the country, offering huge potential for EMS providers. Make in India initiatives taken by the Indian Government in order to improve the domestic manufacturing sector will also boost market expansion.

The Company is trying hard to enhance its business in the field of Electronics Manufacturing Services. We believe that Keys to Companies' growth are cost effective electronic manufacturing services, continuous technology upgradation and diversified company operating across different industry segments. In short to medium term the Company have to overcome issues like local competition, Standardise products with similar kind of imported goods, generating profit margin in spite of lesser scope, regulatory issues and improved arrangement for research & developments.

The Company is already in food storage business and to encash the opportunity in manufacturing in tools, the Company is setting a separate tooling division to meet requirements of various customers & own tools design & development. The Company Management also focusing on Food storage boxes.

c) Opportunities and threats:

On positive side, with the "Make in India" initiative of Government, India has the potential to emerge as the manufacturing destination in the future and with the right impetus, the consumer durables sector can repeat the success of Indian IT companies.The Government of India has initiated multiple incentive schemes and policies (M-Sips, EMCs, EDFetc) to boost domestic manufacturing and has stressed its focus on consumer electronics segment under the "make in India". Opportunities for this industry are bright because of rapid urbanization, unexploited rural market, increase in purchasing power of consumer, Easy availability of Finance.

For Our Company being services EMS provider for OEMs, Investment by Foreign OEMs as well Domestic OEMs in India in this sector may prove a sale hiking factor, as we have better chances of getting orders.

However Competition from Local vendors & effect of Imports on Finished Goods Manufactures demands for more cost optimization & innovation/acquisition of updated technologies.

d) Risks & concerns

Due to implementation of foreign trade agreements, consumer electronics and home appliances sector is facing an invert duty structure, where final product is being imported at concessional import duty, whereas components imports around 7.5%-10% custom duties; thus making final products are costlier then the imported products. Further excise duty on consumer durableshas also increased to 12.5%.This may make Indian manufacturing for white goods such as washing machines, refrigerators and air conditioners very Competitive without scope of much margin. These specific issues to the industry are creating cost competition with imported Goods. Costly Finance, regulatory cases, increasing competition & continuous technology adoption are specific concerns and need continuous attention.

e) Product wise performance:

Discontinuance of CTV & CFL products has affected the business & turnover of the Company; however the Company has been manufacturing/ started manufacturing of automobile parts, bathroom fittings, kitchen appliances, PCB assemblies of CTV etc. in addition to existing products like plastic parts of AC, Refrigerator, washing machine etc. Please refer Notes 21.1 to financial statements for further information.

f) Internal Control System and their adequacy:

The Company has implemented ERP software for better and effective management of planning, purchase, store, production, sale, dispatch, accounting & finance. This will also help the management to have all the necessary internal Check systems in place. The internal Audit by external auditors also helps the management in identifying the weaknesses in the existing systems

g) Discussion on Financial performance with respect to operational performance:

During the year revenue from operations has grown up by 9.45%.The turnover of the Company increased by 9.44% to Rs. 238.73 Crore. Earnings before interest, tax, debrciation and amortization increased by 500.21% to Rs. 15.13 Crore from Rs. 2.5 Crore in brceding Financial Year. Loss after Tax & Net Loss of the Company decreased by 77.61 % to Rs. -4.54 Crore from Rs. -20.28 Crore in brceding Financial Year. The company has increased the product mix by adding the product of automotive parts, bathroom flitting parts, kitchen appliances, solar lamp, PCB assembly for LCD & LED TV for various reputed OEM which has improved turnover & profit margin.

h) Material development in Human Resources/Industrial Relations front, including number of people employed.

The Company's management believes human resources are its biggest asset. The Company continuously reviews HR policies and practices and carries out necessary improvements to attract and retain best talent and build intellectual capital. Continuous nurturing of talent and helping employees in their career aspirations is one of the biggest challenges addressed through several discussions, which has resulted in people being respected, their performance being rewarded and aiding employees in realising their potential. The Company continued to enjoy healthy industrial relations during the year.

i) Cautionary Statement

Statements in the Management Discussion and Analysis describing the Company's objectives, projections, estimates, expectations or brdictions may be forward-looking statements within the meaning of applicable laws, rules and regulations. Actual results could differ materially from those exbrssed or implied. Important factors that could influence the Company's operations include input availability and prices, demand and pricing of finished goods in the Company's principal markets, changes in government regulations, tax laws, economic developments within the country and other incidental factors.