MANAGEMENT DISCUSSION AND ANALYSIS

REAL ESTATE DIVISION

Delayed revival of the Indian economy and lack of business confidence has made the year under review challenging for the real estate business. The Company had leasehold land of an area of 92 acres and 10 gunthas (approx. 92.25 acres) at Thane-Belapur Road, Navi Mumbai, for a term of 100 years computed from 1.8.1965. The Company has transferred and assigned to LOMA IT Park Developers Private Limited (LOMA), Singapore, an area of 30 acres located within the larger property of approx. 92.25 acres, for the remaining tenure of the lease with MIDC.

OUTLOOK

The Company is making serious and continued efforts to assign/develop the balance portion of 62.25 acres of the Company's leasehold land for, inter-alia, establishing a large-scale Industry for Information Technology, Software Unit/IT Park and in this connection proposals are on for negotiations with various parties/facilitators for the assignment/development so as to monetize the balance 62.25 acres of the Company's leasehold land at Navi Mumbai.

INDUSTRY OVERVIEW

There are many challenges in the Indian real estate sector. Inadequate funding and liquidity freeze in the banking system has assumed mammoth proportion which consequently affected expansion, mergers and acquisitions. Obtaining construction permits are becoming more and more tedious and strict and prolonged regulatory process remains unabated, thereby leading to delays in obtaining approvals. Lack of suitable developable land, issues in land title and insurance and shortage of manpower are the challenges faced by the Indian real estate sector today.

COMPANY OVERVIEW

The various segments which may be broadly classified for Company's business are Information Technology Parks, Commercial Offices, Hospitality Projects, Malls, Banking and Financial Services, etc. whether on its own or as a joint venture/joint development or otherwise in one or more tranches in a commercially viable manner.

Information Technology and ITES Sectors in India have given substantial push to the real estate sectors in India. However, majority of them brfer low cost areas like Pune, Gurgaon, Bangalore, etc. Mumbai and Navi Mumbai areas are the last choice on account of prohibitive cost of development, maintenance and housing.

In the above scenario, the Company is facing challenge to market its lease-hold rights of 62.25 acres of plot at Thane Belapur Road, Thane.

The Company is exploring various options such as outright sale, joint venture and joint development plans with renowned Corporate House.

Strengths:

1. Significant rise in consumerism due to improvement in infrastructure facilities in Navi Mumbai.

2. Rapid urbanization.

3. Historical low cost of land

4. The Company has its brsence in Navi Mumbai area since 5 decades which is fast developing. The company has huge potential to develop its realty space as desired by it. With the State and National level policies of on-going reforms to provide sufficient impetus to infrastructure construction and Real Estate activity, there may be a boom for the Real Estate Industry in the long run.

5. Easy availability of I.T and Financial Professionals in Navi Mumbai.

6. Congestion and costly office/I.T. space in Mumbai attract people to Navi Mumbai.

7. The Indian Government has allowed foreign direct investment of upto 100% under the automatic route in real estate projects. This will be for housing, townships, commercial and industrial corridors to boost infrastructure activities in India.

8. Securities & Exchange Board of India (SEBI) has notified final regulations that will govern Real Estate Investment Trusts and Infrastructure Investment Trusts. This move will enable easier access to funds for developers and create a new investment avenue.

Weakness:

1. Tight liquidity and tight credit availability for Indian Corporates/Real Estate Developers/individuals.

2. Inadequate funding.

3. Strict and prolonged regulatory process.

4. Global economic recession.

5. MIDC is the Lessor of the lease-hold land held by the Company in Navi Mumbai. MIDC has stringent policies with regard to development of land, huge transfer charges and brmium for the same.

6. Availability of cheaper Office/IT space in II-tier Cities like Pune, Gurgaon, etc.

OPPORTUNITIES & CHALLENGES

1. The Company has approx. 62.25 acres of land at a very low historical cost.

2. The Company has potential to develop the realty space as desired i.e. to take up development on its own or through joint venture/joint development or outright sale of land.

3. The Company firmly believes that the demand for Real Estate in a country like India should remain robust in the medium to long term.

RISKS & CONCERNS

1. Inadequate funding and liquidity freeze in the banking system adversely affects development of commercial properties.

2. As the Company has lease-hold land with MIDC, any drastic revision in transfer charges may be detrimental to the interest of the Company.

3. Strict and prolonged regulatory process leading to delay in obtaining approvals.

TRADING DIVISION

For the Financial Year under review, i.e. April, 2015 to March, 2016, the Company has achieved a Textile Trading Turnover of Rs.612 lakhs in comparison with Rs.673 lakhs for the brvious Financial Year.

OUTLOOK

The year under review was very lacklustre because of the tight financial situation in the market. There was lot of competition from decentralized sector. However, the Company is optimistic and plans to increase the sales volume by adding new products in the existing range as well as trying to explore new market segments.

1. SEGMENT-WISE PERFORMANCE

Segment-wise performance together with discussion on financial performance with reference to the  operational performance has been dealt with in the Directors' Report which should be treated as forming part of the Management Discussion and Analysis.

2. INTERNAL CONTROL SYSTEMS & ADEQUACIES

M/s. S.U. Kapasi & Co., Chartered Accountants, are the Internal Auditors of the Company and their name is approved by the Audit Committee.

The Company has proper and adequate system of internal control to ensure that all assets are safeguarded and protected against loss from unauthorized use on disposition and transactions are authorized, recorded and reported correctly.

Internal control systems are supplemented by Internal Audit Reviews, coupled with guidelines and procedures updated from time to time by the Management.

Internal control systems are established to ensure that the financial and other records are reliable for brparing financial statements.

Internal Audit System is engaged in evaluation of internal control systems. Internal audit findings and recommendations are reviewed by the Management and Audit Committee of the Board of Directors.

M/s. Deloitte Haskins & Sells LLP, Statutory Auditors of the Company, have been appointed to certify the adequacy and effectiveness of Internal Financial Control over financial reporting for the Financial Year 2015-16.

3. HUMAN RESOURCES

As on 31st March, 2016, the employees' strength (on permanent roll) of the Company was 15.