MANAGEMENT DISCUSSION AND ANALYSIS

1. INDUSTRY STRUCTURE

Indian Textile Industry is one of the leading textile industries in the world. The Indian Textiles Industry has an overwhelming brsence in the economic life of the country. Apart from providing one of the basic necessities of life, the textiles industry also plays a vital role through its contribution to industrial output, employment generation and the export earnings of the country.

The sector contributes about 14 per cent to industrial production; 4 per cent to the country's gross domestic product (GDP) and 13 per cent to export earnings. It is the second largest provider of employment after agriculture and provides direct employment to over 45 million people. Thus, the growth and all round development of this industry has a direct bearing on the improvement of the economy of the nation.

Opportunities

India's textile sector is aided by several key advantages, in terms of availability of adequate raw material, entrebrneurial skills, large domestic market, brsence of supporting industries and supporting policy initiatives from the government.

Challenges

The major challenge that the textile industry is facing is rising production costs, arising out of rising wages, power and interest costs.

Currently the Indian Denim Industry is going through sluggish phase due to exponential capacity expansion which has created a time bound oversupply situation.

2. INDUSTRIAL RELATIONS AND HUMAN RESOURCE MANAGEMENT

The Company continued to have cordial and harmonious relations with its employees. It consider manpower as its assets and that people had been the driving force for growth and expansion of the Company.

3. INFORMATION TECHNOLOGY

IT department has continued providing stable, faster & easier platform for the users to do their work with more productivity. It has implemented centralized backup of many users. Strengthening antivirus & security systems have made users' experience safe & secured. They can concentrate on their own work rather than concerned about security & availability of their data. IT department & team is now ready with Virtualization technology - to use all existing resources in optimum way. It will also help in availability & redundancy of server environment. SAP ERP system is taking care of new style of business.

4. CAUTIONARY STATEMENT

Certain statements in the "Management Discussion and Analysis" section may be forward looking and are stated as required by applicable laws and regulations. Many factors may affect the actual results, which could be different from what the Directors' envisage in terms of future performance and outlook.