Morgan Industries Ltd Management Discussions

We herewith submit the Management Discussion & Analysis Report on the business of the company for the year ended 31^st March, 2015. In this report, we have attempted to include the discussion on all the specified matters to the extent relevant or within the limits that in our opinion are imposed by the Companys own competitive position.

Company & Industry Structure

The Company manufactures self-adhesive tapes and has its factories at Cuddalore & Puducherry. Puducherry factory is likely to be shifted to Cuddalore for which action is in progress. The commitment of the company towards quality and customer orientation reflects in its well established brand "Magic" which has registered its brand in the market.

Review of operations

A summary of major performance indicators is given below, while the detailed and physical performance may be viewed from the Balance Sheet & Statement of Profit & Loss account and the annexure thereto.

The company has adopted a time bound policy in the short term, to balance production to a level, which could avoid building of inventory and has taken measures to bring down stocks to optimum levels.

The company has faced constraints in many ways. The price of the raw materials was widely fluctuating throughout . the year under review, with the result that the company ended up paying a high cost for the raw materials.

The financial results could have been better during the year but for the following reasons:

1. Post cyclonic effect.

2. Increase in major costs and employee costs

3. Corresponding increased realization has not been feasible because of intense competition.

Future outlook

Despite efforts taken by the company in the year, it appears that no sign except small global demand and this situation may continue for some more time.

The outlook of the industry appears to be challenging due to strong price competition in the domestic as well as international markets, large rise in input costs as well as stillness in the factory site due to circumstances beyond our control. Efforts are in vogue to improve the companys performance.

In order to attain the stability and development, company has sought postal ballot in October, 2013 especially to enlarge the object clause to enable the company into enter various segments including trading for generating income for instance.

Quality Control

The company lays emphasis on the quality of its products and has continued to stay committed to high quality and focused on exacting quality control systems and procedures.

Environment & Safety

The company is conscious of the need for environmentally clean and safe operations. The industry is not a polluting one. The companys policy requires that all operations be conducted in such a way as to ensure safety of all concerned, compliance of statutory and industrial requirements for environment protection and conservation of natural resources.

Human resources

The management recognizes and respects human relations and considers human resources as a great asset. Aspects of motivation and creativity to make employees committed for achieving the aims is a continuous process. The company has designed an induction, orientation and regular ongoing internal and external training programme for its employees.

Other matters

There are no further or typical areas of risks or concerns outside the usual course of business foreseeable at this time. Internal control systems have been found to be adequate and are continuously reviewed for further improvement. Our team is committed to the Boards dictates on standards of conduct as well as good governance and exercise of due diligence including compliances of all relevant laws and regulations. Our appreciation is due to all employees, gratefulness to our Board, shareholders, banks & other stakeholders, concerned government and other authorities for their continued support and guidance and to customers for their reposing faith and confidence in us.

Cautionary Statement

Statements in this "Management Discussion & Analysis" which seek to describe the companys objectives, projections, estimates, expectations or predictions may be considered to be "forward looking statements" within the meaning of applicable securities laws or regulations.

Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the companys operations include global and Indian demand and supply conditions, finished goods prices, stock availability and prices, cyclical demand and pricing in the companys markets, changes in the government regulations, tax regimes, economic developments within India and countries with which the company conducts business besides other factors, such as litigation and other labour negotiations.