MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The demand for the Floriculture products worldwide has witnessed an increasing trend. But unfortunately there is a serious drought situation brvailed for the last 5 years and particularly during the year 2006 it has become a serious threat to the project, this is a major reason for letting out of the project.

Strengths & Opportunities:

The company is still exploring the possibility of water resources to get better yields to get back routine productions like earlier, so that the lease can be terminated and company can run on its own.

Karnataka State Government is also supporting in subsidizing, for the replacement of poly sheets and for the planting material and also power tariff is likely going to be reduced on par with other states like Maharashtra, this rebrsentation was already made to the State Government through SIFA (south Indian floriculture association) Bangalore.

Existing association with M/s. Moerheim Roses & Trading BV to develop new varieties through the demo house in our project will have substantial benefit continuously.

Risks & Weakness:

Professional competence has to be improved further through better training and HR development.

Central government Air Freight subsidies from Agro Products Export Development Authority (APEDA) not receiving on time/ substantial delays will affect company performance.

Cautionary statement:

The statements in the report of the board of directors and management discussion and analysis report describing the company's projections, estimates, expectations of brdictions may be forward looking statements with in meaning of applicable securities laws and regulations. Actual results could differ materially from those exbrssed or implied since the company's operations are influenced by many external and internal factors beyond the control of the company.