Western India Cottons Ltd

1) Industry Structure and Development:

The Indian Textile Industry suffers from high cost of production and low technology.The cheap goods coming from China and other neighbouring countries had affected theoverall business. Only Companies having latest technology with mass production cansurvive.

2) Risks, Concerns, Opportunities and Threats.

The prices of raw materials were shooting up and there was no corresponding increase inthe price of the finished product. The increase in cost of power, fuel and other levies bythe Government had increased the manufacturing cost. The labour-laws prevailing in Keralaare very stringent whereas in neighboring states, not so. The cost of labour is alsocomparatively very high and hence uneconomical.

The high cost of cotton increases the price of the finished product and hence is beyondthe reach of the common man. This has affected the cotton textile business adversely.

3) Segment-wise or Product-wise Performance Outlook

Since the company has been in the field of high quality textiles, trading operationscould be carried out in a larger scale ensuring the quality of the product providedadequate resources are available for operations.

4) Industrial Relations

As there was no manufacturing operations due to suspension of operations there were nodealings with the employees.

5) Internal Control System

The Company has a well defined internal control system. Transactions are authorized andcorrectly reported. Control Systems are periodically reviewed by the management and theAudit Committee. The Board is of the view that the existing control methods are operatingsatisfactorily and monitoring procedures are in place.

6) Financial performance with regard to operational performance.

The Company concentrated only on trading operations including some meagre exports whichstand considerably reduced this year. The small profit earned out of trading operationshas been neutralized by the fixed overheads.

7) Cautionary Statement:

Statement in this report on Management's Discussion and Analysis describing theCompany's objectives, projections, estimates, expectation or predictions may be forwardlooking statements within the meaning of applicable security laws or regulation. Theseresults are based on certain assumptions and expectation of future events. Actual resultsmay however differ materially from those expressed or implied. Important factors thatcould make a difference to the Company's future operations include global and domesticdemand - supply conditions, finished goods prices, raw material cost and availability,changes in Govt. regulations and Tax laws, economic conditions within India and thecountries with which the Company has business contacts and other environmental factorsover which the Company does not have any control.