MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Board of Directors brsents hereunder an analysis of performance of the Company for the year 2014-2015 and its outlook for the future. This outlook is based on current business environment which may vary due to future economic and other developments

Industry Structure

The annual turnover of the Paper Industry in India is estimated to be Rs. 50,000 crores, with around,Rs.4,500 crores contribution to the exchequer. The Industry provides employment to around 1.5 million. The per capital paper consumption in India has moved up to around 11 kg but still stands far below the global average of 56 kg. This gap is large which can be fulfilled with market growth.

Paper as a commodity is used both in service and manufacturing sector. As India grows both the sectors would be instrumental in its growth. Paper is used all across India's demography and geography. As Prime Minister of India is focusing on giving boost to manufacturing in India it will have positive effect on the Paper Industry as well. There should be proper Import policy to motivate the domestic paper makers.

There is no denying the fact that India's Paper Industry has the potential to play an important role of meeting the three key national objectives of the Government i.e. Education, Literacy and Employment Generation that too in rural areas. So Government should therefore support the Industry that has strong backward linkages.

So an enabling policy framework is required on the part of the Government so that raw material is available at competitive price and the domestic industry is protected against cheap imports of paper.

Opportunities

World's economic centre of gravity is shifting from West to East. India with its fast rise in consumption of paper is at an advantageous position to make the most of the opportunity offered by changing economic order. Your Company is always in search of such opportunities and is in the process of increasing its capacity and quality improvement. Your Company have done some technological changes last year, oxygen delignification method was used instead of chlorine based method. This has resulted in better quality of paper, the price of paper have also become competitive.

Threats

The main cause of fall in the profitability of many Indian paper manufacturers can be attributed to the fall in rupee value, increased cost of raw material, fuel consumables and import policy.

Outlook

Measures of improvement for the paper industry:

1.Strong R& D for improving technology & automation.

2.Energy and Water should be used in a judicious way.

3.Effluent Standards should be improved by adopting green technologies.

4.Social Forestry methods should be used for improving the shortages in raw-material.

5.Specialized training should be imparted to enhance the skills and knowledge of man-power.

Segment wise Performance

During the year the company has achieved the good level of capacity utilization with respect to the manufacture of the paper and it was done due to the expertise of the Managing Director and the Technical staff. This is a good example of proper utilization of the capacity with minimum of the resources.

Your Company has produced 18783.25 M.T. of paper as against 19068.91 M.T. for the brvious year. \Rs.The Company has also produced 5405.350 M.T. of Soda Ash as against 4943.650 M.T. which is another segment.

Internal Control System and Their Adequacy

Your Company possesses a good internal control system to ensure that all the assets are safe guarded and protected against the unauthorized use or disposition and that transactions are authorized recorded and reported correctly.

The Audit Committee of the Board of Directors review the internal control system and their adequacy from time to time.

Discussion of Financial Performance with respect to operational performance

The financial statements have been brpared in accordance with the requirements of the Companies Act 1956 and applicable Accounting Standards issued by the Institute of Chartered Accountants of India. The Management of Mohit Paper Mills Limited accepts the integrity and objectivity of these financial statements as well as the various estimates and judgments used therein. The Statement has been made on prudent basis and reflects in a true and fair manner.

Human Resources/ Industrial Relations

Human resource is the best resource of all the resources because it is the one which can properly take advantage of the other resources.

It is the companies belief that Human Resources is the driving force towards progress and success of the company. The Company seek to motivate and retain its professionals by offering reasonable compensation and opportunity to grow in the organization. The total permanent employees strength of the company was 139 on 31st March, 2015. Industrial relations remain cordial during the year.

Cautionary Statement

Statements in the management discussion and analysis describing the Companies objectives, projections, estimates, expectations may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results may differ from those exbrssed and implied. Important matters that effects the company's performance is the economic conditions of demand and supply and price conditions in the domestic and overseas market in which the Company operates, changes in the government regulations, tax laws and other statutes and other incidental factors.