MANAGEMENT DISCUSSION AND ANALYSIS REPORT

OVERVIEW OF THE ECONOMY

The Indian economy grew at 7.3 per cent in 2014-15 compared to 6.6 per cent in the brvious fiscal due to improvement in the performance of both services as well as manufacturing sectors. The Gross Value Added (GVA), a new concept has been introduced by CSO to measure the economic activity. The highest growth is reported for services including electricity, gas, water supply and other utilities followed by trade, hotels, transport and communication services . Thereafter manufacturing sector has expanded , including mining ,quarrying and construction.

Control on price rise continued and remarkable downfall in inflation was noted, with wholesale price index (WPI) falling at -2.06 per cent of February 2015, which is greater than the projection of -0.70 per cent for February'2015. Food Inflation is reported to tremendously fall from 9.66 per cent to 4.78 per cent up to December,2014. Retail inflation (CPI-Consumer Price Index) has also moderated.

With all the above positive indicators, the Indian economy is becoming a favorable destination for investment. The Foreign Direct Investment data in India reflects the same, as it has increased from 2133 million USD by March'2014 to 5502 Million USD by January,2015. The Rupee remained relatively stable, and the Current Account Deficit (CAD) is continuously shrinking from 2 per cent of GDP in Q4 of 2013-14 to 1.6 per cent in Q3 of 2014-15. The Finance Minister targets to maintain it at 1 per cent of GDP in the next fiscal.

Growth is expected to edge up further to 8 % in FY 2016, helped by a supportive Financial and Monetary policy, Legislative Reforms in 2015, as inflation continues to trend lower and by a pickup in capital expenditure.

TEXTILE SECTOR

India's textiles sector is one of the mainstays of the national economy. It is also one of the largest contributing sectors of India's exports contributing 11 per cent to the country's total exports basket. The textiles industry is labour intensive and is one of the largest employers. The Indian textiles industry, currently estimated at around US $108 billion, is expected to reach US $ 141 billion by 2021. The industry is the second largest employer after agriculture, providing direct employment to over 45 million and 60 million people indirectly. The Indian Textile Industry contributes approximately 5 per cent to GDP, and 14 per cent to overall Index of Industrial Production (IIP).

The Indian textiles industry is extremely varied, with a hand-spun and handwoven sector at one end of the spectrum, and the capital intensive sophisticated mill sector at the other. The decentralized power looms/ hosiery and knitting sector form the largest section of the Textiles . The close linkage of the Industry to agriculture and the ancient culture, traditions of the country make the Indian textiles sector unique in comparison to the textiles industry of other countries. This also provides the industry with the capacity to produce a variety of products suitable to the different market segments, both within and outside the country.

The future for the Indian textile industry looks promising, buoyed by both strong domestic consumption as well as export demand. With consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the past decade with the entry of several international players like Marks & Spencer, Guess and Next into the Indian market.

FINANCIAL PERFORMANCE

During the year under review total revenue stood at Rs. 243.52 Crores against Rs. 317.97 Crores over brvious year. Employees Cost was Rs. 5.80 Crores against Rs. 4.99 Crores over brvious year. Debrciation was lower at Rs. 6.62 Crores against Rs. 7.16 Crores in the brvious year as the company is using written down value method for debrciating its plant and machinery. Profit after tax stood at Rs. 4.01 Crores as against 2.90 Crores . The earning per share for the year was Rs. 2.96 as against Rs. 2.14.

HUMAN RESOURCE AND INDUSTRIAL RELATION

The Company recognizes the importance of Human Resource as a key asset and believes in its contribution to the all round growth of your Company . The Company believes in acquisition, retention and betterment of talented team players. Your Company is an equal opportunity employer and practices fair employment policies. Your Company is confident that its Human Capital will effectively contribute to the long term value enhancement of the organization.

INTERNAL CONTROL SYSTEM

Your Company has adequate internal control system to ensure that all the assets are safeguarded and are productive. Necessary checks and controls are in place to ensure that transactions are properly verified, adequately authorized, correctly recorded and properly reported. The Internal Auditors of the Company conducts Audit to ensure that internal controls are in place and submit quarterly and yearly Reports to the Audit Committee/Board. The Audit Committee regularly reviews these Reports and the Company when needed takes corrective actions.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis describing the Company's objectives, projections, estimates, expectations and others may constitute "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results may differ from those exbrssed or implied. Several factors that could significantly impact the Company's operations include economic conditions affecting demand, supply and price conditions in the domestic and overseas markets, changes in the government regulations, tax laws and other statutes, climatic conditions and such incidental factors over which the Company does not have any direct control. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.