Pursuant to the amended Regulation 34 read with thyw Schedule V of the SEBI (listing Obligations and Disclosure Requirements) Regulation, 2015 your Directors wish to report as follows:

a) Industry Structure & developments:

Steel Industry plays a vital role in the development of any modern and emerging economy. The per capita consumption of steel is generally accepted as a yardstick to measure the level of socioeconomic development and living standards of its countrymen. Steel industry derives its demand from other important sectors like infrastructure, aviation, engineering, construction, automobile, pipes and tubes etc. Thus, its intense integration with other important industries makes it a strategic sector for the Governments as well.

The Indian steel sector enjoys advantages of domestic availability of raw materials and cheap labour. Iron ore is also available in abundant quantities, though the continued mining restrictions have put a strain on its availability as well as price. This abundance has been providing a major cost advantage to the domestic steel industry India has left behind USA to become the world’s third largest Steel producer.

Although slowdown is expected in demand for Capital Goods, Automotive, Construction and Consumer Durables are expected to show marginal growth. Positive signs are expected on back of modest recovery in economic growth. Likely Increase in Government spends in the Power sector & infrastructure push will fuel segmental and interest rates, demand for consumer goods is expected to show growth.Alsowithexpecteddecline ininflation positive growth.

b) Opportunities & Threats:

In India, the steel Industry is passing through a challenging phase. Domestic consumption is severely affected due to lack of activity in infrastructure, as well as in the manufacturing space. The biggest challenge facing the domestic steel industry is to have the per capita steel consumption in India at par with the average global standards. The new Government at the center has, however, rekindled hope in the industry. The ambitious infrastructure projects and the thrust in manufacturing through the "Make in India" campaign are steps in the right direction. The plan for smart cities, improved road and rail connectivity by building highways, bridges and dedicated freight and superfast rail corridors have huge potential to spur domestic steel demand. Consuming sectors - construction, automobile and engineering are expected to grow in 2016- 17 fuelled by the softening of interest rates and implementation of government policies for the revival of infrastructure and investment in the country.

A better GDP forecast in 2016 supported by estimated industrial growth of 7.3 per cent would gradually increase steel demand in the country. However, the Indian iron ore mining industry is undergoing a difficult phase given regulatory intervention in various states due to which the steel producers will continue to face inadequate availability of domestic iron ore in the short term. Demand for steel is expected to improve in 2015- 16 but steel prices will remain restrained due to global weak steel pricing trend, increasing cheap imports and prevailing overcapacity with domestic producers. India also witnessed a surge in steel imports from China in 2015. Similar trend in 2016-17 continues to be a matter of concern.

The unavailability of steel plates/coils (the primary component in pipe manufacturing) is the biggest risk factor for the pipe-manufacturing industry, because majority of them are imported into India. Long gestation supplies of these materials or any subsequent delay in delivery could affect the production cycle of the business. A sharp and unprecedented increase in the cost of freight may lead to pressure on margins.

Presently, the cost of freight is calculated prior to the execution of the order. However, if this cost were to rise sharply and suddenly, the pipe-manufacturing companies could be at risk if charter rates were not tied up well in advance. There could be competition from PEC Pipes manufactures in the medium to long term. The Indian pipe manufacturers are subject to foreign exchange risk due to high imports and exports. Any adverse change in government policies can affect the industry. Though the order of International Trade Commission(ITC) rejecting the Anti Dumping Duty and countervailing duty levied by US Department of Commerce on the company was in our favour, but one of the petitioners has filed against the order of ITC for final determination and asked for civil action against the decision of ITC. Hence, this could be a threat to the business of our company.

c) Segment-wise or Product-wise Performance

Since your Company operates only in one Segment, segment-wise or product-wise analysis of performance is not applicable.

d) Outlook:

India’s average Gross Domestic Product (GDP) growth has been estimated to grow by 7.3% in 2016 and 705% in 2017, up from 7.2% in 2015 supported by industrial growth of which would gradually increase steel demand in the countery.

In According to World Steel Association (WSA) is one of the few countries to remain a " resilient " economy in the face of a " global Slowdown" because of its commitments to "reforms". Indian Steel demand in 2016 is expected to rise by over 7%. Hopefully, good showing in manufacturing , mining and electricity sectors, will be sustained to generate improved demand for steel in the months ahead.

e) Risks and Concerns:

Though Regulation 17 the SEBI (listing Obligations and Disclosure Requirements) Regulation, 2015 is not applicable your Company has duly adopted steps for framing, implementing and monitoring the risk management plan and accordingly of your Directors have put in place critical risk management framework across the Company for identification and evaluation of all potential risks. Your Company is continuously evolving and improving systems and measures to take care of all the risk exigencies involved in the business. All inherent risks are identified, measured, monitored and regularly reported to management. The management decides measures required to overcome these risks and ensure implementation of proper risk mitigation plans. The risk report and mitigation plans are presented to the Board of Directors periodically.

f) Internal Control Systems and their adequacy:

Your Company has an effective Internal Control System to prevent fraud and misuse of Company’s resources and protect shareholders’ interest. Your Company has an independent Internal Audit Department to monitor and review and focus on the compliances of various business processes. The internal audit report along with audit findings and tracking of process improvements & compliances is presented for review to the Audit Committee of Board of Directors.

g) Discussion on Financial Performance with respect to Operational Performance and state of Company’s affairs:

During the year under review, the net income of the Company stood at 9681.03 lacs as compared to 7489.98 lacs of previous year. The Company is working on the ways and means to regularize the overdraft with the cooperation and consensus of the bankers. Loss after Tax for the financial year stood at 3117.26 lacs as of 6608.16 lacs of previous year.

h) Human Resources development and Industrial Relations:

Your Company focuses on developing the most superior workforce so that the organization and individual employees can accomplish their work goals in service to the end users. To improve employee productivity, PMS (Performance Management System) was implemented across the organization.

Your Company has put in place suitable processes and mechanism to ensure that grievances are effectively addressed. Employee Grievance Redressal Committee and the Internal Complaints Committee are intended to facilitate open and structured discussion on work related grievances of employees and Sexual Harassment complaints respectively, to ensure that these are dealt with in a fair and just manner. Our Anti-Sexual Harassment initiatives allow employees to report sexual harassment case at the workplace.

Presently, your Company employs more than 250 employees. There is Lock-out at factory at Khopoli since December, 2013. The industrial relation continues to remain generally cordial at all locations of the Company except its factory at Khopoli.

i) Cautionary Statement:

The Management Discussion and Analysis describe Company’s projections, expectations or predictions and are forward looking statements’ within the meaning of applicable laws and regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Company’s operations include economic conditions affecting demand and supply, price conditions in domestic and international market, change in Government regulations, tax regimes, economic developments and other related and incidental factors.