MANAGEMENT DISCUSSION AND ANALYSIS Textile industry is one of the oldest and vitally important industry for the economy of the country After agriculture it employs the maximum number of persons in India. Its contribution to GDP and export earnings make it play a pivotal role in India's economy. You are aware of the difficulties being faced by your Company and efforts being made to pay off the high cost borrowings by selling the assets. The Company is making all efforts to settle the dues of creditors and reshape the business model. However, the brsent market conditions are not conducive for such an exercise. Your Company also attracts provisions of Section 23 (1) (a) (i) of The Sick Industrial Companies Act, 1985 due to erosion of Net worth. MANAGEMENT PERCEPTION OF RISK AND CONCERN(DISCUSSION TO VYAS SIR) 1. Agriculture in India is largely dependent on rains for irrigation As agriculture contributes substantially to our GDP, any downfall in agri production affects economy. Monsoon this year has not been up to the mark and large areas particularly in cotton growing regions have not received adequate rains. It will have its impact not only on quality of cotton but also on its prices during the current year. Consumption of manmade fibers is still low in our country as compared to global standards. 2. China has been a major buyer for Indian textiles - yarn and fabrics. That country is facing economic problems and its import from India has reduced. INTERNAL CONTROL SYSTEM Your Company has developed a well defined internal control system over a period which meets its requirement. The system is reviewed periodically to keep with the times and ensure optimal utilization and protection of company's resources. Audit Committee of the Board monitors the internal control system. HUMAN RESOURCES/INDUSTRIAL RELATIONS Your Company encourages innovation and performance. It apbrciates and values the Human asset of the Company. In spite of difficult situation on operational front, the morale of employees is high and they have been working hard to turn the tide in favour of better working of your Company. The Company has developed an environment of harmonious and cordial relations with its employees. As the Company is in Textile business only, segment reporting is not required. |