MANAGEMENT DISCUSSION AND ANALYSIS

1. Current Scenario:

As per the latest GDP growth estimates, Indian economy grew by 7.4% in FY 15 compared to 6.9% in FY 14, mostly driven by improved economic fundamentals and revision of GDP methodology calculation. Even inflation showed signs of methodology calculation. Even inflation showed signs of moderation, a welcome sign - wholesale price and consumer price inflation decline to 4.2% and 7.4% respectively, compared with last year's 6.3% and 10.1%. Reduced inflation, falling crude oil price, stable Rupee, improved purchasing power and consumer spending, higher capital inflows supported by the government policy reforms have already put India on an accelerating growth track and improved the business outlook.

The Government envisages GDP growth to accelerate to 8% in FY16 driven by strengthening macroeconomic fundamentals and implementation of policy reforms recently announced. Reforms like e-auctions of coal mines and telecom, FDI hike in insurance, speedier regulatory approvals etc. will be critical growth enablers to de-bottleneck stalled projects, improve the investment outlook and the ease of doing business in the country. Reforms currently underway such as GST implementation, Amendment on Land Acquisition Bill, Labour Reforms, etc are expected to provide the requisite thrust the growth in the medium-term.

Opportunities and Challenges:

Being the second largest employer in India coupled with strong industry linkages with the rural economy augurs Indian textile industry as one of the most significant sectors with an incremental growth potential. Rural economy has seen a spurt in income levels the last few years and this is the right time to juxtapose their synergies to promote the industry growth. Being one of the key focus sectors under the Government's "Make in India" campaign is a testimony to the huge growth potential the industry holds, both in terms of infrastructure development and skill improvement. Globally, favourable trade policy reforms would also allow the industry to expand its trade partners, improve its export competitiveness and contribute substantially to the nation's income. However, the growth prospects are constrained by many challenges including rising input costs (wages, power and interest cost), restrictive labour laws and intensified competition from other low cost countries like Bangladesh. Such issues need to be addressed to result in unlocking maximum industry growth potential.

2. Production & Sales Review:

During the year under review, your company has registered a turnover of 4012.11 Lacs as compared to 3489.53 Lacs in the brvious year.

The production in the Company's Process House at Tarapur (Maharashtra) i.e. Dyeing & printing of textile fabrics was 19,701,218. Mtrs. as against 20,130,007 Mtrs. in brvious year. The sales revenue from Processing of Fabric increased from Rs.,1,667.93 Lacs to Rs. 1,772.39 Lacs during the year under review. The sale revenue from sale of fabrics decreased from Rs. 2,239.12 lacs to Rs.1,821.10 lacs.

3. Outlook:

Industrial scenario in the Textile Sector remained unchanged during the year under review with stagnant domestic market and fierce competition in the international market. The company is, however, confident of sustained growth through a series of initiatives in the areas of product development, technological up gradation and strengthening of distribution network.

4. Internal Control Systems and Their Adequacy:

The Company has management, which is much concerned about the adequacy of Internal Control System. It is aware that for a  multi-faceted growth of any organization, only the strict overall control & efficient supervision can check all the operations, whether  minor or major, and such control are backbone of any commercial establishment or manufacturing units.

The management of your Company has taken appropriate steps by constituting Internal Audit team with well-experienced and  hard working personnel under the supervision of Audit Committee of the Board; which frequently checks and reviews functions of  various departments and effectiveness of Audit checks and revision of systems and procedures periodically.

In the year under review, the Company initiated a focused policy to evaluate the design effectiveness of existing management  controls across all its locations. Under this initiative, the Company also undertook steps to implement new control measures in line  with global best-in-class practices.

5. The Financial and Operational Performance:

The financial statement given in the Report of the Directors for the financial year 2014-2015 is quite satisfactory. It reflects the genuine steps taken by the management for transparency and best judgment for the estimate made to correctly reflect the true & fair affairs of the Company.

6. Human Resource Development:

The people of any industry serve as propeller for upliftment of the industry and thus indirectly contribute the National Product and through this to the exchequer of India. The management has always remained conscious of these inter-related factors and maintained a favourable climate during the year to suit the growth and excellence in the Company. The management has always strived to maintain cordial relationship between the staff, workers and management. This attitude created an atmosphere where each and every staff and worker started feeling a sense of 'ONENESS'.

7. Cautionary Statement:

The Statements in Management Discussion and Analysis Report may contain certain statements that might be considered forward looking. These statements are subject to certain risks and uncertainties. Actual results may differ materially from those exbrssed in the statements as important factors could influence the Company's operations such as Government policies, political and economic development etc.