MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT

BUSINESS REVIEW General Economy

The world economy continues to hobble into one crisis to another and this can have an adverse impact on India too in the long term. However the Indian economy continues to consolidate the gains achieved through restoring macroeconomic stability in the past two years, check on Inflation was a direct effect of prudent monetary policies followed by RBI, the declining trend in current account deficit have all augured well for India to be the destination for investments in global turmoil. Though the Indian Economy is recovering and stabilizing, still certain sectors including textiles have not been keeping the pace.

The worrying factor of Indian economy has been successive drought years being faced. The consecutive two monsoons failure is having its extreme adverse impact on agricultural sector. As per the brdiction 2016-17 is expected to be a good monsoon season and resultantly economy could be expected to be on a buoyant mood.

The Indian textiles industry, currently estimated at around US$ 108 billion, is expected to reach US$ 223 billion by 2021. The industry is the second largest employer after agriculture, providing employment to over 45 million people directly and 60 million people indirectly. The Indian Textile Industry contributes approximately 5 per cent to India's gross domestic product (GDP), and 14 per cent to overall Index of Industrial Production.

The Indian government has come up with a number of export promotion policies for the textiles sector. It has also allowed 100 per cent FDI in the Indian textiles sector under the automatic route. Some of the initiatives taken by the government to further promote the industry include extensive use of social media to facilitate to connect with customers, especially youth, in order to promote high quality products, A new Textile Policy is on the anvil aiming to create 35 million new jobs, Subsidies on machinery and infrastructure, establishing Integrated Textile Parks with subsidy, several export promotion measures such as Focus Market Scheme, Focus Product Scheme and Market Linked Focus Product Scheme for increasing share of India's textile exports, has proposed to extend 24/7 customs clearance facility at 13 airports and 14 sea ports resulting in faster clearance of import and export cargo. As company processes Textile fabrics of export quality for large number of its customers, these measures of the government indirectly augurs well for the Company.

Outlook, Opportunities and Threats.

The future for the Indian textile industry looks promising, buoyed by both strong domestic consumption as well as export demand. With disposable income on the rise, the retail sector is experiencing a rapid growth in the past two decades and with opening of market Indian brands are competing with International ones.

COMPANY BUSINESS

Your Company continues to focus on its core business of textile processing, job work, and in a smaller way financial service activity.The Financial Year 2015-2016 recorded a total income of Rs. 5706.99 Lakh (P.Y. Rs. 5157.11 Lakh); Cash profit of Rs. 525.73 lakh (P.Y. Rs. 368.11 Lakh); Profit before Tax of Rs. 432.39 Lakh (P.Y. Profit of Rs. 295.54 Lakh) ; and Profit after Tax of Rs. 304.25 Lakh (P.Y. Profit of Rs.157.57 Lakh).

Out of the above job work processing and local sales are about Rs. 5326.10 lakh as against Rs. 4471.00 lakh in the brvious year.

OUTLOOK, OPPORTUNITIES AND THREATS

The growth in demand is expected in the medium terms to rely on higher consumption in the domestic market. Your Company is committed to build business with long term goal based on your Company's intrinsic strength in terms of quality and customer net work. Under "Make in India" initiative, investment opportunities for foreign companies and entrebrneurs are available across the entire value chain of all textile fabrics across the board.

However volatility of foreign exchange, bleak monsoon can cause concern to the customers leading to reduction in their operation, which may have negative impact on your Company's operations as the job work business depends on customers improvement of their business.

RISKS AND CONCERNS

Your Company has drawn and put in place a combrhensive Risk Management Policy to assess and mitigate various risks. The Company's wide awareness of risk management policies and practices is being inculcated to minimize the adverse effect of risk on the operating results and the subject management of risks are being approached in a planned and coordinated manner. The Management Discussions and Analysis explaining the objectives of the company, the opportunities and threats, the outlook for the future, the risks and concerns have to be read with the meaning of relevant applicable laws and regulations. The actual physical performance may differ materially from those explained hereinabove.

INTERNAL CONTROL SYSTEM

The company has a system of internal controls to ensure that all its assets are properly safeguarded and protected against loss from unauthorized use or disposal. Further all the internal control system is practiced by the company to ensure that all transactions are authorized, recorded and reported correctly.

The Company has an Audit Committee of Directors which reviews the adequacy of i nternal controls.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES

Your Company's business does not call for large manpower resources.

Your Company maintained healthy, cordial and harmonious industrial relations at all levels during the period under review.

The company has a team of able and experienced professionals. The work culture and value system in the company is designed to provide each employee the adequate space, freedom and guidance to bring out their full potential and provide personal growth opportunities within the organization.