MANAGEMENT DISCUSSION AND ANALYSIS

FORWARD-LOOKING STATEMENT

This report contains forward-looking statements, which may be identified by their use of words like 'plans', 'expects', 'will','anticipates', 'believes, 'intends', 'projects', 'estimates' or other words of similar meaning. All statements that address expectations or projections about the future, including but not limited to statements about the Company's strategy for growth, product development, market position, expenditures and financial results are forward- looking statements. Forward-looking 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 realised. The Company's actual results, performance or achievements could, thus, differ materially from those projected in any such forward- looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward- looking statements on the basis of any subsequent developments, information or events.

OVERVIEW OF FINANCIAL YEAR (FY)

The Finance Minister in his 2015 budget speech stated ".. .estimated GDP growth for 2014-15 is 7.4%. Growth in 2015-16 is expected to be between 8 to 8.5%. Aiming for a double-digit rate seems feasible very soon..." The International Monetary Fund (IMF) expects India's growth to"... rise to 7.5 percent in 2015/16, driven by stronger investment following improvements to the business climate." The World Bank in its report expects the Gross Domestic Product (GDP) "...growth (at market prices) is projected to accelerate to 7.2 percent in FY2015, compared to 6.9 percent in the brvious year and further to 7.5 percent in FY 2015-16". It appears that the Indian economy is expected to grow at a health rate in 2015-16.

Jai Corp was able to hold on to its own and has reported a decent financial performance. Key financial performance indicators for FY 2014-15 are as under:

l The gross turnover decreased marginally by 3.35 per cent to Rs. 725.51 crore in FY 2014-15 from Rs. 750.62 crore in FY 2013-14.

l The total EBIDTA decreased by 19.63 per cent to Rs.108.50 crore in FY 2014-15 from Rs.135.00 crore in FY 2013-14.

l The Net Profit decreased by 25.36 per cent to Rs. 58.35 crore in FY 2014-15 from Rs. 78.18 crore in FY 2013-14.

BUSINESS REVIEW

Urban Integrated Infrastructure

Special Economic Zones (SEZs)-Sector Overview:

The SEZ Industry in India is facing grave challenges for last few years. Govt. of India (GoI) has withdrawn key tax benefits (earlier available) which have made SEZ a difficult business proposition. In addition to this, Maharashtra SEZ Act which provides State level fiscal benefits has been pending enactment since long. Govt of Maharashtra (GoM) had recognized the serious difficulties faced by SEZ in Maharashtra and had allowed SEZ to exit and move towards being developed into Integrated Industrial Area (IIA). GoM has appointed a committee to look in to the modalities for conversion from SEZ to IIA. Their report is still awaited.

Jai Corp is a stakeholder in entities developing SEZs in Maharashtra.

I- Navi Mumbai SEZ Private Limited (NMSEZ) Performance Overview:

NMSEZ has commenced horizontal and vertical development of SEZ in a phased manner. NMSEZ is facing demand constraints due to worldwide recession and financial crisis in many European countries. The Maharashtra SEZ Act had been introduced in the Maharashtra Legislature, but is awaiting enactment since quite some time. GoM has indicated that pending enactment of Maharashtra SEZ Act, they may announce and make effective a new SEZ policy. In the absence of fiscal incentives in the State, it is not very easy to attract the units in the SEZ. The withdrawal of key tax benefits by GoI have made SEZs less attractive. GoM has, in its Industrial Policy of 2013 subject to certain terms and conditions, allowed SEZ to exit and move towards being developed as Integrated Industrial Area. NMSEZ is in discussion with its Joint Venture Partner CIDCO to continue developing SEZ and at same time keep option open to develop Integrated Industrial Area depending upon demand from Industry and Services. The company has been obtaining validity extension from Board of Approval for its various SEZs from time to time.

II- Mumbai SEZ Limited (MSEZ) Performance Overview:

MSEZ has acquired land in Uran, Pen and Panvel areas in the state of Maharashtra. So far, consent award and sale deeds have been executed for around 4,600 acres. The subject land is not contiguous. The new Land Acquisition Act which has been notified in January, 2014 makes it difficult to buy land for contiguity. MSEZ is in discussion with GoM on way forward. MSEZ is also awaiting further amendment to Land Acquisition Act.

III- Rewas Ports Limited (RPL) Performance Overview:

All statutory approvals have been obtained. RPL has signed the lease deed for 839 hectares (Ha) of inter tidal land. The Government land of about 167 hectares has been transferred by the Government of Maharashtra to Maharashtra Maritime Board. RPL will sign the lease deed for the same at the time of financial closure. RPL has been in discussions with Indian Railways and Government of Maharashtra in order to firm up the rail and road connectivity of the port with the hinter land, but progress has been slow. RPL has been persistently working to resolve the issue related to right of way from Mumbai Port Trust, but process is slow.

Real Estate Sector Overview:

As per data available from the Ministry of Urban Development website: "In India out of the total population of 1210.2 million as on 1st March, 2011, about 377.1 million are in urban areas. The net addition of population in urban areas over the last decade is 91.0 million.

The percentage of urban population to the total population of the country stands at 31.6. There has been an increase 3.35 percentage points in the proportion of urban population in the country during 2001-2011.

The provisional results of Census 2011 reveals that there is an increase of 2774 towns comprising 242 Statutory and 2532 Census towns over the decade. Growth rate of population in urban areas was 31.8%."

The Finance Minister in his budget speech stated - "... A step was taken in the last Budget to encourage Real Estate Investment Trusts (REITs) and Infrastructure Investments Trusts (InvITs) by providing partial pass through to them. These collective investment vehicles have an important role to revive construction activity. A large quantum of funds is locked up in various completed projects which need to be released to facilitate new infrastructure projects to take off. I therefore propose to rationalise the capital gains regime for the sponsors exiting at the time of listing of the units of REITs and InvITs, subject to payment of Securities Transaction Tax (STT). The rental income of REITs from their own assets will have pass through facility."

With these initiatives, it is expected that stage is set for the real estate sector to enter into a new growth phase.

Performance Overview:

Certain subsidiaries of Jai Corp have acquired land. The same may be consolidated for the purpose of development subject to the applicable legislations at that point of time. The Company is of the view that any brsumed fall in the current valuation of land held by some of the subsidiary companies is a temporary phenomenon. These are long-term investments and in the course of time are expected to realise their fair value.

Asset Management Sector Overview:

Private Equity (PE) investments in India saw a robust increase in 2014 over 2013. Deal value, including real estate, infrastructure and venture capital (VC) deals, increased by 28% to $15.2 billion—inching closer to 2007 peak levels of $17.1 billion.

In 2015, PE firms plan to increase their focus on fund-raising, and they cite track record, team expertise and exit success as the most important factors in this regard. Yet, when it comes to raising India-focused funds, PE firms remain challenged by the regulatory environment, macroeconomic uncertainties such as currency and inflation, and the longer gestation period for investments. However, the majority still expect more fruitful fund-raising in 2015 by the PE Funds than in past years.

SEBI has brought all kind of pooled investments under the Alternative Investment Funds (AIF) Regulations and thereby bringing more transparency and accountability in the functioning of the alternate asset industry. It is expected that the new regulations will provide a more conducive environment to the growth of the industry. Since the new AIF Regulations, 135 funds have already registered themselves as AIF. As on 31st March, 2015 the funds raised by category I, II, III of the AIF amounted to Rs. 9,504 crore and the investment made till 31st March, 2015 were Rs. 7,356 crore.

Realty funds are still upbeat despite sluggish demand for new houses Even as both housing sales and demand are down, AIFs are getting active in that most funds are betting on the long-term Investment potential in the sector rather than short term exit horizons. While a Knight Frank report notes that housing sales had dropped by 17 per cent across six cities with National Capital Region seeing the sharpest drop in home sales, a CBRE report also doesn't paint a rosy picture of the sector, stating that residential sales declined by approximately 30 per cent yera-on-year by the end of 2014 in the seven leading cities of the country, largely due to high price points, sticky interest rates and cautious buyer sentiments. The general slackness in residential sales was primarily triggered by the Affordability Index sliding in certain cities, it added. Real estate funds are, however, bullish on the long-term potential.

Our Business:

Jai Corp is brsent in this industry through its wholly owned subsidiary - Urban Infrastructure Venture Capital Limited (UIVCL), a venture capital management company. UIVCL is the manager to Urban Infrastructure Opportunities Fund (UIOF), a scheme of Urban Infrastructure Venture Capital Fund (UIVCF), a SEBI registered fund. UIOF is a close ended India domiciled venture capital fund having raised a corpus of approximately Rs. 2,434 crore.

UIVCL, is also Indian advisor to Urban Infrastructure Capital Advisors (UICA), investment manager to India focused real estate fund Urban Infrastructure Real Estate Fund (UIREF), having a total capital commitment of $ 250 million.

The investments of these Funds' are focused on large townships and mixed-use development projects in Tier-I and Tier-II cities of western and southern India. These Funds have invested in 26 special purpose vehicles sbrad across 12 cities of India.

Performance Overview:

The tenure of UIOF originally got completed in June 2013. However, the Trustees based on the recommendation of UIVCL have extended the tenure for two further periods of one (1) year each till June, 2015. Further the Trustees have extended the tenure of the Fund with the consent of the majority of the Investors till 31st December, 2016 in order to facilitate the exit of the investments made by the Fund in the SPVs. Post the exit of the investments, the Fund will be wound-up. UIOF has refunded till 31st March 2015 Rs. 621 crore to its contributors by way of repurchase of units and return of capital/profits.

In FY 2014-15, UIVCL earned an income of Rs. 26.72 crore and profit after tax of Rs. 6.13 crore. The reduction in the revenue and profit is on account of the non-charging of the Investment Management fees w.e.f. July, 2014.

Steel Division Sector Overview:

The World Steel Association (worldsteel) released its Short Range Outlook (SRO) for 2015 and 2016 in April, 2015. Worldsteel forecasts that global apparent steel use will increase by 0.5% to 1,544 Mt in 2015 following growth of 0.6% in 2014. In 2016, it is forecast that world steel demand will grow by 1.4% and will reach 1,565 Mt. As per their forecast, India's outlook is improving and in 2014, India's steel demand is expected to grow by 3.4% to 76.2 mt, following growth of 1.8% in 2013. In 2015 structural reforms and improving confidence will support a further 6% growth in Indian steel demand but elevated inflation and fiscal consolidation remain key downside risks to the outlook.

Performance Overview:

Jai Corp manufactures cold rolled coils, galvanized coils and galvanized corrugated sheets at its Nanded unit in Maharashtra. During FY 2014-15, the Company achieved a production (including job work) of Rs. 24,735 MT of coiled rolled coils (CR) and 26,778 MT of galvanized plain and galvanized corrugated steel sheets (GP/GC) sheets as compared to 57,450 MT and 56,955 MT respectively in FY 2013-14 a decrease of about 57 per cent and 53 per cent respectively due to lack of demand. The Division reported a lower turnover of Rs. 27.85 crore in FY 2014-15 as compared to 60.61 crore during FY 2013-14. Consequently, the profit decreased from Rs. 1.57 crore in FY 2013-14 to a loss of Rs. 6.29 crore in FY 2014-15.

Plastic Processing Division Tape Woven Products Sector Overview:

The usage of polyethylene (PE)/ polypropylene (PP) woven tape products like sacks, bags, Flexible Intermediate Bulk Containers (FIBCs), fabrics, geotextiles etc. has been growing in India. FIBC bags are constructed from woven PP fabric which may be single layered, with extra loose liner, or laminated. PP when treated with ultra violet acts as electrical insulator. While the domestic market growth is slow, nearly ninety percent of production of the converting industry is exported.

Performance Overview:

The Company's production decreased slightly to 38,906 MT in FY 2014-15 as compared to 39,724 MT in FY 2013-14. The net turnover increased by about 6 per cent to Rs. 510.91 crore in FY 2014-15 as compared to net turnover of Rs. 481.13 crore in FY 2013-14. The Company's exports were 11955 MT in FY 2014-15 as compared to 7,077 MT in FY 2013-14 an increase/ decrease of about 61 per cent. The FOB value of the exports increased by about 59 per cent from 102.05 crore in FY 2013-14 to Rs. 161.98 crore in FY 2014-15.

Masterbatch Sector Overview:

Masterbatch is a concentrated mix of pigments and/ or additives encapsulated into a carrier polymer resin which is then shaped into a granular form. This provides the manufactures with a convenient way to add colors/pigments or performance-enhancing additives to natural polymers. According to "India Masterbatch Market Forecast & Opportunities, 2018", the masterbatch volume sales in India are expected to grow at 23% CAGR till 2018. Global demand for masterbatch is projected to reach $12.1 billion by 2019.

Performance Overview:

Jai Corp's products have been well-received in the masterbatch and antifibrillation masterbatch segments of the market. The Company produced 14,767 MT in FY 2014-15, as compared to 14,204 MT in FY 2013­14, an increase of about 4 per cent. The net turnover decreased marginally to Rs. 51.50 crore in FY 2014-15 from Rs. 51.70 crore in FY 2013-14. The total quantity exported increased/ decreased by about 108 per cent from 1,338 MT in FY 2014-15 to 642 MT in FY 2013-14. The FOB value of exports increased by about 26 per cent from Rs. 5.93 crore in FY 2014-15 to Rs. 4.72 crore in FY 2013-14.

Spinning Division Sector Overview:

Textiles and clothing sector is the largest employer in India after agriculture. As per Economic Survey of 2015, at the industry level, the highest jump in employment was observed in the textile including apparel sector. In the Annual Report 2014-15 of the Ministry of Textiles states that its mission is to achieve "Planned and harmonious growth so as to achieve a CAGR of 12% in Textiles & Apparel production;"

Performance Overview:

The Company produced 4,033 MT in FY 2014-15 as compared to 4,390 MT in FY 2013-14 a decrease of about 8 per cent. The net turnover of this Division decreased from Rs. 105.13 crore in FY 2013-14 to Rs. 94.25 crore in FY 2014-15 a decrease of about 10 per cent. However, the net profit increased by about 20 per cent from Rs. 16.50 crore in 2013-14 to Rs. 19.85 crore in 2014-15.

Human Resource Development

Jai Corp's most valuable assets are its human resource. With the support of its dedicated human resource it confronted the economic shocks and rapid changes in the business environment last year with the resolve and determination to ensure that the business of the Company continue to enhance value creation.

The Company's talent pool as on 31st March, 2015 was 3,526, which includes highly qualified professionals across its business. The growth and sustained leadership of the Company is largely a function of its human resource. The Company has always aimed to create a workplace where every person can achieve his/her optimum potential. The Company has a performance rewarding culture, enabling it to create leaders out of its employees. The Company has also undertaken various training and development initiatives to hone the skill and expertise of its employees.

With diversified business interests, the Company empowers the inter-departmental and inter-unit movement to deserving individuals, ensuring better retention of talent and at the same time providing avenues to its employees.

Internal Control System

Jai Corp has a combrhensive system of internal controls to safeguard the Company's assets against loss from unauthorized use and ensure proper authorization of financial transactions. The system ensures the integrity of the accounting, recording and reporting of all transactions. It monitors and controls against any unauthorized disposition of assets, thus safeguarding the Company's assets.

Jai Corp ensures adherence to all internal control policies and procedures as well as compliance with all regulatory guidelines. This enhances the reliability of financial and operational information. The Company has appointed a reputed firm, Messrs Mahajan & Aibara as the internal auditor. The Audit Committee of the Company periodically reviews, with the management, inter alia performance of the internal auditor and adequacy of the internal control systems.

Risk Concerns and Risk Management

Jai Corp is exposed to the normal industry risk of factors of competition, economic cycle, raw material availability and uncertainties in the international and domestic markets and credit risk. The Company has a system-based approach to business risk management. It has a proper and adequate system of controls designated to assist in the identification and management of risks. The Company manages these risks by maintaining a conservative financial profile and by following prudent business and risk management policies:

a) Clearly laid down roles and responsibilities of the various entities in relation to risk management. A range of responsibilities, from the strategic to the operational, is specified therein. These role definitions, inter alia, are aimed at ensuring formulation of appropriate risk management policies and procedures, their effective implementation, independent monitoring and reporting by internal audit.

b) A combination of centrally issued policies and divisionally-evolved procedures to bring strength to the process of ensuring that business risks are effectively addressed.

c) Appropriate structures are in place to pro-actively monitor and manage the inherent risks in businesses with proper risk profiling.

d) A professional and independent firm has been appointed as internal auditor to carry out the risk focused audits across divisions, enabling identification of areas where risk management processes may need to be improved. The Audit Committee of the Board of Directors regularly reviews internal auditor's findings and provides strategic guidance on internal controls.

e) A combrhensive framework of strategic planning and performance management ensures realization of business objectives based on effective strategy implementation. The annual planning exercise requires all divisions to clearly identify their main risks and set out a mitigation plan with agreed time line and accountability.

Health, Safety and Environment

Jai Corp is committed to ensuring the health and safety of its employees, its plants and its surrounding communities at all its operations sites. It's the constant endeavor of the Company to provide safe and hygienic working conditions for its employees. The

Company also strives to maintain a pro-active check on environmental compliance in its operations. Some of the initiatives undertaken by the Company in this regard are as follows:

a) Well-defined work practices ensure work in a manner that promotes safety and health of its employees as well as that of the environment they operate in.

b) Provide training to all concerned personnel to maintain health, safety and environment.

c) Creating awareness on health, safety, environment and developing the required skill, knowledge and confidence of the personnel so as to enable them to understand their responsibility.

d) Provide all required safety poster, safety equipment, first-aid box and facility, purified drinking water and adequate medical facility under the aegis of a full time qualified medical practitioner.

e) Maintaining excellent housekeeping practices across all locations and brmises of the Company.

f) Maintaining safe, healthy and pollution-free environment in the work places with suitable safe work systems and methods of work like protective fencing of machinery, periodical testing of hoist and lifts, ropes and chain pulley blocks, testing of brssure vessels. Periodical and brventive maintenance of combrssors and proper arrangement of fire extinguishers at designated places.

g) Obtaining a stability certificate for all the factory buildings as per the requirement of the Factories Act, 1948.

h) Developing safety awareness among the staff and other concerned workers.

i) Maintaining environmental norms brscribed by State/ Central Governments in the matter of air, water, quality, noise, environment etc.

j) Cleaning and disposing off of wastes and effluents, proper ventilation and sustaining of pollution-free atmosphere.

k) Taking suitable insurance policies such as fire, safety, group, personal accident etc.

Corporate Social responsibility and community development

The Companies Act 2013 mandates every company having net worth of rupees five hundred crore or more,or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year to constitute a Corporate Social Responsibility Committee of the Board. The board of every such company shall ensure that the company spends, in every financial year, at least two per cent. of the average net profits of the company made during the three immediately brceding financial years, in pursuance of its Corporate Social Responsibility Policy. Schedule VII to the Act, gives a list of activities which may be included by companies in their Corporate Social Responsibility Policies Activities relating to:—

(i) eradicating hunger, poverty and malnutrition, promoting brventative health care and sanitation and making available safe drinking water;

(ii) promotion of education, including special education and employment enhancing vocation skills specially among children, women, elderly and the differently abled and livelihood enhancement projects;

(iii) promoting gender equality, empowering women, setting up homes and hostels for women and orphans, setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups;

(iv) ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining of quality of soil, air and water;

(v) protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts;

(vi) measures for the benefit of armed forces veterans, war widows and their dependents;

(vii) training to promote rural sports, nationally recognized sports, paralympic sports and Olympic sports;

 (viii)contribution to the Prime Minister's National Relief Fund or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women;

(ix) contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government;

(x) rural development projects.

(xi) slum area development

An essential component of Jai Corp's social responsibility is to care for the community. The Company endeavors to make a positive contribution to the under privileged communities by supporting a wide range of socio­economic, educational and health initiatives. Many of the community projects and programmes are driven by active participation from our employees. We, at Jai Corp, have defined a set of core values for ourselves-care, innovation, passion and trust - to guide us in all we do. We have decided to act as a catalyst between the government and the people. We are helping implement the road map drafted with the help of the Administration of Dadra & Nagar Haveli (D & NH) and the District Panchyat of D & NH. The Administration of D & NH has encouraged the Company to participate in a private-public initiative to make the village Sindoni in the Mandoni Patelad of the Union Territory D & NH, a 'model village'. The Company is making its resources and volunteers available to the notified schemes. The broad objectives of these schemes are:

a) Bring about an improvement in the general quality of life in rural areas.

b) Accelerate sanitation coverage in rural areas to have toilets accessible for all.

c) Motivate the communities and the panchayati raj institutions promoting sustainable sanitation facilities through awareness creation and health education.

d) Cover schools and anganwadis in rural areas with sanitation facilities and promote hygiene education and sanitary habits among students.