MANAGEMENT DISCUSSION AND ANALYSIS REPORT

(Pursuant to clause 49 (VIII) (D) (1) of the listing agreement) This report is part of the Directors' Report

Economic scenario

The year 2014-15 was a challenging year for the global economy. In the financial year 2014-15, the world economy faced various challenges across many economies of countries. The International Monetary Fund (IMF) has trimmed its forecast for global economic growth for this year to take into account the impact of recent weaknesses in the United States of America. But the IMF has said that the growth prospects for next year remain undimmed, despite the debt crisis in Greece and recent volatility in China's financial markets. The IMF has said that the global economy should expand 3.3 percent this year.

The Union Minister of State for Finance Shri Jayant Sinha has said that the Indian economy, on its path of economic growth, is at least a year ahead of plan and it is out of the macroeconomic trough. He said that the pace of recovery of Indian economy had been aided by dropping oil and commodity prices. According to him, in May 2014, when the brsent Government assumed office, the fiscal deficit, the current account deficit, investment ratio and savings rate were in terrible shape. But now, with the fiscal deficit, current account deficit and inflation reined in and financial savings reviving, the focus was on growth. A robust foundation is in place and the Government will push hard to ensure 8% to 9% sustained economic growth. The Government was confident that this growth will be of high quality and will be sustainable.

Opportunities and threats

The Company is engaged in retail sale of textile products. The Company's future relies on the Textile industry growth. It has been reported that the Central Government will soon unveil a new national textiles policy that seeks to create 350 lakhs new jobs by attracting foreign investments. The Tamil Nadu Government has also announced that a new Textile Policy to attract investments is on the anvil. The Minister for Handlooms and Textiles has said that the Tamil Nadu Government was planning to introduce suitable tax concessions and the single window system for the approval of the investment proposals. The threats to the textiles industry are in the form of lack of enough skilled workforce and urgent need for labour reforms in this sector. There is a need for attracting more investments in the industry. The technology up gradation of the textile mills is another area of serious concern.

Risks and concerns

The company is engaged in trading business. Hence, the risks associated with the stiff competition in retail textile business are the major risk for the Company. But, the company has built up reputation among the buyers and has created a brand image for its products. Hence, it is confident of mitigating the effects of the risks.

Internal control systems and their adequacy

The Company has proper and adequate internal control systems commensurate with its size and nature of operations, to provide reasonable assurance that all assets are safeguarded, transactions are authorised, recorded and reported properly and that all applicable statutes and corporate policies are duly complied with.

Human Resources Development and Industrial Relations

The Company attaches considerable importance to Human Resource Development and harmonious industrial relations. There are senior and experienced professionals managing the operations of its divisions. The company takes all efforts to train its employees to make them a skilled employee. The overall industrial relations, during the year, were cordial.

Environmental protection

The Environmental Policy of your company is maintaining clean and green environment and eco friendly atmosphere. Your company has been complying with applicable environmental regulations and brventing pollution in all operations. Your company continues to strive for energy saving and conservation of natural reserves.

Risk Management

Risk Management is an ongoing process. The Board of directors has constituted a Risk Management Committee of three members, all of whom are directors on the Board. The Risk Management Committee has approved the revised Risk Management Policy. The Board has defined the roles and responsibilities of the Risk Management Committee and has delegated the monitoring and reviewing of the Risk Management Plan to the Committee. The terms of reference of the Risk Management Committee include review of Risk Management Policy, approval of Risk Management Plan, implementing, monitoring and reviewing the Risk Management Plan.

The Company maintains Risk Register listing all the risks likely to affect the achievement of the business goals set by the Company. Significant risks are identified using a scoring methodology. The process of Risk Management includes Risk Identification and Categorization, Risk Description and Risk Mitigation. The Risk Owners are accountable to the Risk Management Committee for identification, assessment, aggregation, reporting and monitoring of the risks related to their respective areas / functions.

The key implementation areas for Risk Mitigation are as follows:

For Finance function: Treasury operations and fund transfers

For Computer systems and Data maintenance Data Security

For purchase and sales functions Credit Administration

The Company is exposed mainly to Credit Risk and Cash Management Risk in its business operations. The Company has taken over the business of erstwhile Binny Ltd along with the respective business division employees. Their expertise in dealing with suppliers and customers has helped to mitigate the Credit Risk. The sales collections at the showrooms of the Company are mainly in the form of cash. This exposes our Company to cash management risk. In order to mitigate the same, the Company ensures efficient and secured collection at its showrooms. The cash collections are deposited in the Company's bank account the next day. The Company has also adopted stringent checks and internal controls at its showrooms. At the Head Office of the Company, each day's collections are monitored and reconciled on a daily basis. Such procedures and internal controls has helped to mitigate Cash Management Risk.

Cautionary Statement

This report contains forward looking statements that involve risks and uncertainties including, but not limited to, risks inherent in the Company's growth strategy, dependence on certain businesses, dependence on availability of qualified and trained manpower, economic conditions, government policies and other factors. Actual results, performance or achievements could differ materially from those exbrssed or implied in such forward looking statements. This report should be read in conjunction with the financial statements included herein and the notes thereto.