MANAGEMENT DISCUSSION AND ANALYSIS REPORT

INDUSTRY STRUCTURE AND DEVELOPMENTS

The paper is a progress vehicle for civilized society and the paper industry is an engine of national growth. Paper is required for books, news-papers and for various other purposes. In fact, it is indispensable to man in the brsent day world. The industry has assumed greater importance in India with the growth of literacy. At brsent, India's per capita consumption of paper is low as compared with the global standards. The consumption of Paper and Board in India is expected to grow over 20 million tonnes by 2020 from the brsent installed capacity of less than 13.5 million tonnes. With the expected increase in literacy rate and growth of the economy, an increase in the per capita consumption of paper is expected.

OPPORTUNITIES AND THREATS

India has been the fastest growing Paper and Board market globally and it has a huge potentials and prospects in coming future. The usage of paper cannot be ignored and this awareness is bound to bring improvement in the paper industry. The demand for paper products would go on increasing in times to come. These developments are expected to give fillip to the industry.

Major threats in this front are availability of raw material and cost of production being on higher end which leads to rise in input cost and empowers the international manufacturers to enter the Indian Market affecting the profitability of Indian manufacturers adversely. The Indian Paper Companies will have to compete with them to sustain their position in the market.

OUTLOOK

Outlook for Paper Industry in India looks extremely positive as the demand for upstream market of paper products is growing up. The low per capita consumption is an indication of the future potential for the industry. Increasing population, literacy rate, growth in GDP, improvement in manufacturing sector and lifestyle of individuals are expected to account for the growth in the paper industry of India. With the global economy showing signs of recovery and similar indicators visible in domestic economy, the Indian Paper and Board Industry might return back to its earlier high growth path.

RISKS & CONCERNS

The Company has systematic process for analysing and mapping the risks based on discussions with different stakeholders and study of past records. A detailed exercise is being carried out to identify, evaluate, manage and monitoring of both business and non-business risks. The risks so identified are addressed by an appropriate risk mitigation plan.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an effective internal control mechanism which is continuously updated to keep it contemporary and to ensure that it is commensurate with size and nature of its business. The Company has a strong audit framework for keeping adequate checks and balances. The internal control systems are monitored and reviewed on a periodic basis and corrective actions as needed are initiated.

FINANCIAL PERFORMANCE

During the year under review, the revenue from operations was Rs.14,086.10 lacs against Rs.15,835.90 lacs in the last financial year. The Company has earned profit after tax of Rs.41.07 lacs against Rs.273.87 lacs in last year. The performance was affected due to unhealthy competition in the coated paper industry from the imported products resulting major reduction in sales of coated paper, substantial decline in selling price of newsprint paper and increase in power tariff. With the growth of paper industry, the Directors are hopeful for better performance in coming years.

HUMAN RESOURCES & INDUSTRIAL RELATIONS

The Company provides a congenial and productive work environment with an aim to retaining those who are capable of translating challenges into opportunities and weaknesses into strengths. The management has periodically reviewed the HR initiatives and policy framework targeted towards attraction, retention and growth of talent. The twin objectives of improving the quality of human capital available within the Company and utilizing its potential for the benefit of Company continues to form the fundamental of HR policy of the Company. Industrial Relations were cordial during the year. The Company had 294 employees on its payrolls as on March 31, 2015.

CAUTIONARY STATEMENT

"Management Discussion and Analysis Report" contain statements that address expectation or projections about the future, including, but not limited to statements about the Company's strategy for growth, product development and financial results which may be forward-looking statements within the meaning of applicable securities laws and regulations. The Company's actual results, performance or achievement could thus differ materially from those projected in any such forward-looking statements. The Company assumes no responsibility to publicly modify any forward looking statements, on the basis of any subsequent development, information or events.