MANAGEMENT DISCUSSION AND ANALYSIS

1. Industry Structure and Developments

While the economic activity in the Financial Year 2015-16 had affected the automotive tyre and in turn the bead wire industry, the outlook for the current year looks to be optimistic in the expectation of higher economic growth. The Government's recent initiatives to encourage investment in various sectors of the economy will bring back capital expenditure. On the back of improved demand scenario, automotive and tyre manufacturers are focusing on expanding their capacities. As a result, demand for bead wire is expected to grow in the years ahead.

2. Opportunities and Threats

Looking at the positive economic outlook for the current year, your company is making efforts to increase the sales and is continuously working to strengthen relation with its customers in India, Thailand and other export destinations.

The demand of automotive tyres has strong relationship with the general economic conditions brvailing in the country and the global market. Any adverse development in the economy impacts the off-take of tyres which can be a risk factor for the Company.

3. Segment-wise or product-wise performance.

The company performs in one segment only i.e. Tyre Bead Wire. Annual revenue from operation for Financial Year 2015-16 stood Rs. 206.89 Crores as compared to 239.01 Crores in the last year. Production during Financial Year 15-16 stood at 31,427 MT against 30,717 MT i.e. increased by 710 MT. The annual PBT stood at Rs. 14.63 Crores as compared to Rs. 9.56 Crores in FY 2014-15. Sales volume during year reported was 31,940 MT as compared to 30,049 MT of brvious year, i.e. sales tonnage increased by 1,892 MT.

4. Outlook and Risks

As we begin the year 2016-17, the overall economic outlook remains uncertain. Government's focus on infrastructure development, investment in highways, and implementation of GST will give boost to the industry.

The company regularly assesses the risks and threats to the business. These include areas such as market trends, new competition, changing customer brferences, disruptions in supplies, product development, talent management etc. Factors which may affect the Company's business includes rise in prices of raw material, interest rates, trade or govt. policies, down trend in the automobile and tyre industry. With continuous efforts towards quality improvement, customer satisfaction, cost control your company is well positioned to capture the opportunities.

5. Internal Control System and their adequacy.

The Company has a combrhensive system of internal control to safeguard the Company's assets against the loss from unauthorized use and ensure proper authorization of financial transactions. The Company also has internal control systems which commensurate with the size and nature of the business and has experienced personnel positioned adequately in the organization to ensure internal control process and compliances. The Company takes abundant care in designing, reviewing and monitoring regularly the working of internal control systems and internal control compliances for all important financial internal control processes. The Audit findings are reported on quarterly basis to the Audit Committee of the Board headed by a Non-Executive Independent Director.

The Company maintains a system of internal controls designed to provide a high degree of assurance regarding the effectiveness and efficiency of operations, the reliability of financial controls and compliance with laws and regulations

6. Discussion on financial performance with respect to operational performance.

There is surge in the sales volume and production as compared to last year. The profit before tax has also increased to Rs. 14.63 Crores as compared to Rs. 9.56 Crores in brvious year. The sales volume has also increased. The finance cost has decreased as compared to last year.

7. Material developments in Human Resources / Industrial Relations front, including number of people employed

At Rajratan, our vision drives our ambitions and our people define our business excellence. During the year under review, the Industrial relations were cordial throughout the year and the Company has initiated many programs on up-skilling its manpower. As an ongoing exercise, the Company has continuously to look at, identified, created and execute initiatives which the enhance productivity and efficiency of the Company.

The Company continues to invest in people through various initiatives which enables the work force to meet out the production requirement and challenges related thereto and to infuse positive enthusiasm towards the organization.

8. Cautionary Statement

Statements made in this report in describing the Company's objectives, projections, estimates, expectations or brdictions may be "forward looking statements" within the meaning of applicable securities laws and regulations. These statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized by the Company Actual results could differ materially from those exbrssed in the statements or implied due to the influence of external and internal factors which are beyond the control of the Company.

The Company assumes no responsibility to publically amend, modify or revise any forward looking statements on the basis of any subsequent developments, information or events.