Century Plyboards (India) Ltd Management Discussions

<dhhead>Management, discussion and analysis </dhhead>

Global economic review

Overview: The global economy in FY 2024-25 remained resilient but showed signs of moderation amid persistent geopolitical tensions, sticky inflation, and cautious monetary policies. Global GDP growth was steady at around 3.2%, supported by emerging markets, while advanced economies saw slower expansion due to tight credit conditions and weak consumer demand. Inflation rates began to ease but remained above central bank targets in many regions, prompting a mixed response from monetary authorities. While some central banks, particularly in Europe and Asia, began lowering interest rates to support growth, the U.S. Federal Reserve maintained a cautious stance, delaying cuts due to lingering inflation concerns.

Global trade faced significant headwinds from escalating tariff measures, notably by the U.S., contributing to rising protectionism and uncertainty. These moves, coupled with ongoing supply chain realignments, signalled a shift towards deglobalization. China maintained its growth momentum around 4.5% amid domestic reforms and export resilience, while India remained the fastest-growing major economy. Geopolitical developments, especially in the Middle East, influenced energy prices and market sentiment. As of now, the global outlook remains cautious, shaped by inflation dynamics, trade fragmentation, and geopolitical risks.

Outlook: The global economy is facing heightened uncertainty following the imposition of tariffs on imports into the USA and reciprocal measures by other countries on US exports. These trade tensions are expected to weigh on global growth, though the full impact remains uncertain. This is compounded by risks stemming from geopolitical conflicts, trade restrictions, and climate-related challenges. Reflecting these headwinds, the World Bank has projected global economic growth at 2.7% for both 2025 and 2026. Overall, FY 2025-26 is seen as a transitional year marked by policy adjustments and cautious recovery. (Source: IMF United Nations)

Indian economic review Overview and Performance

Indias economy expanded by 6.5% in FY 2024-25, down from a revised 9.2% in the previous year, marking a four-year low. The slowdown was primarily driven by weaker manufacturing activity and reduced net investments. Despite this moderation, India retained its position as the worlds fifth-largest economy, supported by strong domestic fundamentals. Nominal GDP rose to H330.68 trillion from H301.23 trillion, while per capita income increased from H2,15,936 to H2,35,108, reflecting sustained economic momentum.

On the supply side, real GVA grew 6.4%, with the industrial sector expanding by 6.5%, led by construction, utilities, and infrastructure-related activity. Exports remained resilient despite global headwinds, with total exports of goods and services reaching a record USD 824.9 billion, up from USD 778.1 billion in FY 2023-24. While services exports grew

strongly, merchandise exports faced pressure from rising freight costs due to the Red Sea crisis.

The fiscal position remained strong, with gross GST collections rising 9.4% to H22.08 lakh crore and net collections increasing 8.6% to H19.56 lakh crore, reflecting improved compliance and a broader tax base. CPI inflation eased to an average of 4.63%, the lowest since the pandemic, supporting household savings.

The rupee depreciated 2.12%, closing the year at H85.47 against the USD, though it appreciated by 2.39% in March 2025 amid global currency shifts. Foreign exchange reserves stood at USD 676 billion, while FDI inflows rose 13.6% to USD 81 billion, the fastest pace since FY 2019-20. For the fourth consecutive year, credit rating upgrades outpaced downgrades, reflecting macroeconomic stability, infrastructure push, and low corporate leverage.

Outlook

India is expected to remain the fastest-growing major economy in FY 2025-26, with GDP growth forecast at 6.5%, despite global trade risks and US tariff actions. The country is poised to gain export share in key sectors like apparel and chemicals due to tariff advantages over China. The Union Budget 2025-26 supports growth through H11.21 lakh crore capital outlay and significant personal tax relief, expected to boost consumption by up to H3.5 lakh crore. The India-UK FTA will further enhance export competitiveness across multiple sectors. Domestic demand is set to benefit from the expected 8th Pay Commission payouts and above-normal monsoon forecasts. Inflation eased to 3.34% in March 2025, enabling a 25 bps rate cut by the RBI, with more likely. Lifting of credit restrictions is also expected to revive retail lending. Together, these factors create a favourable macroeconomic environment for sustained, broad-based growth.

Industry structure and developments

India furniture industry overview

In 2025, the Indian furniture market is forecasted to achieve a revenue of USD 6.19 billion and grow at a CAGR of 6.04% from 2025-29. The predominant sector within this market is home decor, expected to achieve a revenue USD 2.13 billion in 2025. This growth is attributed to factors such as rising disposable income and increased consumer spending on home. Ongoing infrastructural development, including residential, industrial, and commercial construction, is anticipated to further drive market expansion.

The furniture industry had witnessed steady growth in recent times, propelled by urbanization, population expansion, increased disposable incomes, and evolving lifestyle preferences worldwide. As the furniture market size continues to expand with urbanization on the rise, especially in emerging economies, the demand for furniture for residential and commercial spaces like apartments, offices, hotels and restaurants is expected to surge. The real estate sectors expansion and a growing inclination toward home renovation and interior decoration are further driving the demand for furniture products. Government initiatives such as Smart Cities, Housing for All, and Make in India are fostering sectoral growth, while evolving consumer preferences are accelerating the shift from unorganised to organised retail. The entry of global players like IKEA and the rapid scaling of domestic brands such as Wakefit and Pepperfry are reshaping the competitive landscape.

The increasing focus on eco-friendliness and sustainability is one key trend changing the global furniture sector, significantly impacting the furniture market size. The growing consumer knowledge of environmental issues and concerns about the effects of furniture manufacturing on the environment has increased demand for eco-friendly production methods and furniture made of sustainable materials like bamboo, recycled, and reclaimed wood.

The furniture sector is progressively using technological innovations like 3D printing, augmented reality (AR), and virtual reality (VR). With the help of these technologies, furniture producers and merchants can produce unique designs and personalized items and give customers engaging shopping experiences.

(Source: Mordor Intelligence, Statista, Times of India, Grand view research)

Revenues by segment Indian plywood sector overview

The plywood business accounted for 61% of the revenues of Century Plyboards during the year under review.

The Indian plywood market was valued at approximately USD 2.60 billion in FY 2023-24 and is projected to grow at a CAGR of 5.7%, reaching around USD 4.36 billion by FY 2032-33. Growth is driven by expanding distribution networks, rising demand for lightweight and easy-to-assemble furniture, and increased investment in government housing schemes and infrastructure projects. The surge in residential and commercial construction is fuelling plywood consumption, with applications ranging from furniture manufacturing to structural use.

Enhanced product durability, impact resistance, and innovation—such as the introduction of flexible plywood are broadening market applications, particularly in partitions and false ceilings. Urbanization and interior renovation trends are further propelling demand, especially for aesthetically appealing and functional plywood solutions.

By product type, softwood plywood dominates the market due to its strength, cost-effectiveness, and widespread use in construction. Sourced from coniferous species like pine and spruce, it is expected to retain its leading position amid Indias rapid urban and infrastructure expansion.

Indian laminate sector overview

During the year under review, the laminate segment contributed 15% to Century Plyboards total revenues.

The Indian decorative laminates market reached approximately USD 1.9 Billion in 2024 and is projected to grow at a CAGR of ~4.8-5.0%, reaching around USD 3.0 billion by 2033.

The Indian decorative laminates market is witnessing strong growth, driven by rising living standards and increasing per capita spending on premium home decor. The growing preference for modern, sleek furnishings—especially in ready- to-assemble flooring, furniture, and cabinetry—is significantly expanding market demand.

Indias rapid commercial infrastructure development is also fuelling demand for decorative laminates in varied public and semi-public spaces such as gyms, convention centres, indoor sports clubs, and auditoriums. Their practicality and design versatility make laminates a preferred choice for both residential and commercial interiors.

A key growth catalyst is their ease and speed of installation, which enables homeowners, builders, and designers to achieve high-quality finishes without specialised labour. Compared to traditional flooring and wall covering solutions, laminates reduce project timelines and labour costs, enhancing overall affordability. This blend of convenience, efficiency, and aesthetic appeal continues to drive widespread adoption across India.

Indian medium density fibre (MDF) board overview

The MDF segment of the Company accounted for 18% of the revenues of Century Plyboards during the financial year under review.

The Indian Medium Density Fiberboard (MDF) market is projected at a robust CAGR of around 15% between the period 2025-33. MDF is an engineered wood product made from sawdust and chips bonded with resins and wax under heat and pressure. With its smooth surface, structural strength, and machinability, MDF is increasingly replacing plywood and particle board.

Key demand drivers include rapid growth in the furniture and cabinetry sector, where MDF is favoured for its uniformity and affordability; expanding construction activities, such as interior panelling and door frames; and the rising popularity of ready- to-assemble (RTA) furniture. Growth in the hospitality and tourism sectors also supports MDF adoption in furnishings and fittings.

Sustainability trends are encouraging the inclusion of renewable raw materials like bamboo and straw in MDF production, appealing to environmentally conscious buyers. Improvements in manufacturing technologies have enhanced product quality and cost efficiency. Additionally, government infrastructure and housing projects are providing further impetus to the MDF market.

Indian particle board market overview

The Indian particle board market is projected to reach USD 0.72 billion in 2025 and is expected to grow to approximately USD 1.27 billion by 2030, registering a strong CAGR of 12.15% during 2025-2030.

This growth is driven by rising demand for cost-effective engineered wood in furniture, flooring, and interior applications. Particle board, made from wood chips and sawmill shavings bonded with synthetic resin, offers an economical alternative to solid wood and plywood—especially in the production of ready- to-assemble (RTA) furniture and modular interiors.

The market expansion is further supported by rapid urbanization, rising real estate development, and the increasing adoption of affordable, lightweight, and eco-friendly materials. Technological improvements in manufacturing have also enhanced the boards strength, moisture resistance, and surface finish, widening its applicability in both residential and commercial projects.

The particle board segment of the Company accounted for 4% of the revenues of Century Plyboards during the financial year under review.

Indian real estate sector overview

The real estate industry in India is estimated to be worth USD 332.85 billion in 2025 and is expected to reach USD 985.80 billion by 2030, growing at a CAGR of 24.25% during the period 2025-2030.

In 2024, Indias real estate market showcased robust momentum, witnessing significant growth across its residential, commercial, and premium sectors. This growth is attributed to heightened buyer confidence and a rising demand for premium housing.

The Pradhan Mantri Awas Yojana Urban 2.0 (PMAY-U 2.0), as outlined in the Union Budget 2024-25, is a pivotal initiative aimed at providing affordable housing to 1 crore urban poor and middle-class families. With a substantial investment of H10 lakh crore, this ambitious program seeks to invigorate Indias real estate sector by amplifying demand for affordable and mid-segment housing. The scheme emphasizes the vision of housing for all through subsidies, public-private partnerships, and a focus on sustainable, energy-efficient housing units. For FY25, the revised estimate for PMAY-U is H23,294 crores, while FY26 sees an allocation of H3,500 crore for PMAY-U 2.0, marking an increase from the previous year.

(Source: Mordor intelligence)

Growth drivers

Here are the factors driving the growth of the plywood industry in India.

Increasing disposable incomes: Indias per capita disposable income rose from USD 2.11 thousand in 2019 to USD 2.54 thousand in 2023 and is projected to reach USD 4.34 thousand by 2029. Higher disposable incomes will lead to increased spending on home improvements and renovations, further driving plywood demand.

Urbanization: Over 40% of Indias population is projected to reside in urban areas by 2030. Urbanization increases the demand for modern housing and infrastructure, where plywood is a key material.

Demographic dividend: By 2030, India will have 1.04 billion working age persons by 2030. Indias young population is driving consumer preferences towards ready-made products like wood panels over traditional carpentry. This trend supports the growth of the plywood market.

Growing replacement demand: Improving living standards and higher discretionary spending are expected to drive greater demand for wood panels, including plywood, as consumers increasingly invest in home upgrades and modern furniture.

Rise in demand for houses: Indias real estate sector is expected to expand to USD 5.8 trillion by 2047, contributing 15.5% to the GDP from an existing share of 7.3%. This growth will drive demand for furniture and construction materials, including plywood.

Online retail sector: The Indian e-commerce sector reached USD 137.21 billion in 2025 and is expected to reach USD 363.30 billion by 2030. This growth encourages building material companies to invest in e-retail channels, potentially increasing plywood sales through online platforms.

Rise of Indian consumerism: Consumer spending in India is expected to reach the USD 4.3 trillion mark by 2030, growing at a CAGR of 10%. This increase in domestic consumer expenditure will boost demand for premium furniture and interior decoration materials.

(Source: Promarket report, IMARC, Techsci research, Market research future, Global news wire, The business research company, Industry Arc, Ernst and Young)

Strengths, Weaknesses, Opportunities and Threats (SWOT)

Strengths

? The Companys strong brand equity and market leadership drive profitability by cultivating deep customer trust and loyalty.

? A diverse and comprehensive product portfolio allows the Company to meet the varied needs and preferences of its broad customer base.

? With a well-established pan-India presence and robust distribution network, the Company ensures consistent product availability and dependable supply.

? Strategically located manufacturing units enable faster, more efficient deliveries, contributing to improved customer experience and satisfaction.

? Operating in sectors with significant entry barriers, the Company benefits from a sustained competitive edge and protected market position.

Weaknesses

? The Company operates in a highly competitive market, primarily dominated by unorganized players, with the exception of the MDF segment, where competition may be more structured.

? The Companys sales are significantly influenced by the recommendations and referrals of professionals, such as carpenters and architects, highlighting the importance of building and maintaining strong relationships with these stakeholders.

? Disparities between supply and demand in various product categories can impact the Companys profitability, underscoring the need for effective demand forecasting, production planning, and inventory management.

Opportunities

? The market is witnessing a surge in demand for structured wood products, presenting a significant growth opportunity for the Company to expand its product offerings and cater to evolving customer preferences.

? Indias larger-than-average millennial population provides a substantial customer base for the Company, as millennials tend to drive demand for modern, high-quality building materials and furniture.

? The rural market in India remains underpenetrated, offering the Company a chance to expand its reach, tap into new customer segments, and increase market share by providing tailored products and solutions for rural customers.

Threats

? The presence of unregulated vendors offering products at unrealistically low prices threatens the Companys market share and profitability.

? Limited availability of essential raw materials can hinder production schedules, leading to delays, elevated costs, and potential financial losses.

? Export restrictions or additional processing requirements imposed by timber-producing countries can raise procurement costs and add operational complexity.

? Unexpected spikes in raw material prices can adversely affect profitability, especially if cost increases cannot be promptly passed on to customers.

? Emerging technological disruptions may challenge traditional business models and require timely adaptation to maintain competitiveness.

Segment overview, 2024-25

Plywood

? The Company maintained its leadership position in this segment.

? Revenue of the segment increased by 16.03% during the year under review, valued at H2,491.13 crores in comparison to H2,146.88 crore during FY 2023-24.

? EBITDA margin stood at 14.38% as against 13.13% (without impairment loss) in FY 2023-24.

? Average realizations per unit of the end product strengthened 2.03% over the last year.

? Total volume witnessed an increase of 14.03% during the year under review, with the current level standing at 4,16,476 CBM.

? Capacity utilisation was 90%.

Laminates

? Revenue of the segment decreased from H656.62 crore in FY 2023-24 to H617.69 crore.

? EBITDA margin stood at 8.20% in FY 2024-25 compared to 11.08% last year.

? Average realisations per unit of the end product increased by 0.44% as compared to last year.

? Total volume decreased 7.44% during the year under review, with the current level standing at 70,55,645 sheets.

? Capacity utilization was 80%.

Medium Density Fibre board

? Revenue from the segment decreased by 0.08% to H747.67 crore in comparison to H748.30 crore in FY 2023-24.

? EBITDA margin stood at 15.41% as against 21.70% in FY 2023-24.

? Total volume witnessed an increase of 9.74% during the year under review, with the current level standing at 2,41,388 cbm.

? Average realisations per unit of the end product decreased by 8.27% compared to last year.

? Capacity utilization was 82%.

Particle board

? Revenue from the segment decreased 7.71% to H144.95 crore as against H157.05 crore in FY 2023-24.

? EBITDA margin was 7.83% as against 19.94% in FY 202324.

? Total volume decreased by 8.61% to 70,074 cbm.

? Capacity utilization was 94%.

Discussion on performance, FY 2024-25

Balance Sheet

? Total borrowings including buyers credit for FY 2024-25 stood at H731.20 crore compared to H380.28 crore during FY 2023-24.

? Total net fixed assets for FY 2024-25 stood at H1,588.40 crore compared to H1,194.56 crore in FY 2023-24.

? Net worth stood at H2,437.71 crores as on 31st March, 2025 compared to H2,180.43 crore as on 31st March, 2024, an increase of 11.80%.

? Inventories increased by 29.04% from H599.02 crore as on 31st March 2024 to H772.97 crore as on 31st March 2025.

Profit and loss statement

? Revenues from operations increased by 8.23% from H3,758.57 crore in FY 2023-24 to H4,067.91 crore in FY 202425.

? EBITDA decreased to H521.61 crore in FY 2024-25 compared to H533.51 crore in FY 2023-24.

? Profit after tax was witnessed at H284.56 crore in FY 202425, with a decrease of 9.59%.

? Depreciation and amortisation stood at H88.28 crore in FY 2024-25 compared to H81.36 crore in FY 2023-24.

Key financial ratio - Significant changes and explanations

Ratio	FY 2024-25	FY 2023-24
Debtors Turnover (Days)	39	38
Inventory Turnover	69 (42 days for raw material and 27 days for finished goods)	58 (35 days for raw material and 23 days for finished goods)
Interest Coverage Ratio	11.96 times	17.89 times
Current Ratio (with short term borrowings)	1.70	1.93
Debt Equity Ratio	0.30	0.17
Operating Profit Margin (%) (EBIT Margin)	10.65%	12.03%
Net Profit Margin (%) / PAT	7.03%	8.43%
Return on Net Worth/ Average Equity	12.32%	15.47%
EBITDA Margin	12.82%	14.19%
Earnings per share (H)	12.81	14.17
Fixed Asset Turnover Ratio	2.56	3.15
Return on Average capital employed	13.49%	17.39%

Details of significant changes in the key financial ratios:

Interest coverage ratio reduced from 17.89 times to 11.96 times mainly due to reduction in EBIT and higher Interest Expense on account of increased debt.

D/E equity ratio has risen to 0.30 from 0.17 due to higher debt taken to fund ongoing capex expansion at our MDF and Particle Board plant.

Outlook

The Company aims to capitalize on the increasing demand catalysed by the favourable macroeconomic conditions and conducive government policies and achieve a revenue target of H12,000 Crore by 2031.

Risks and concerns

Business risks are an inherent part of any organization, and managing them effectively is essential for sustainable operations and long-term success. A robust risk management strategy involves a multifaceted approach, including the mitigation of operational shocks to maintain business continuity, continuous enhancement of services to meet evolving customer expectations, and proactive change management to stay competitive in a dynamic market. Additionally, it focuses on efficient sourcing and optimal utilization of resources to drive productivity, the identification and prevention of revenue leakages, and minimizing waste to support sustainability and cost efficiency.

Our Company is committed to enhancing shareholder value through strategic growth and business expansion, all within the risk management framework defined by our Board of Directors. In pursuit of this goal, we place strong emphasis on the interests of all stakeholders—customers, employees, investors, and the wider community. By adopting a holistic and responsible approach to growth, we aim to create sustainable value and foster long-term prosperity for all those connected to our business.

Century Plyboards’ strategic de-risking model Overview

An effective risk management framework is vital to ensuring long-term business sustainability. Such a framework must clearly define the nature and scope of risks while outlining practical and proactive mitigation strategies. When properly implemented, it not only shields the organization during periods of economic uncertainty but also supports a rapid and resilient recovery.

Century Plyboards has developed a well-structured de-risking model rooted in the experience and insight of its leadership team. This model is guided by the following strategic priorities:

? Drive cost optimization to enhance operational efficiency and maintain a competitive edge.

? Balance growth initiatives with strong governance measures to ensure long-term sustainability.

? Broaden the product portfolio by venturing into interior infrastructure solutions, reducing reliance on any single market segment.

? Prioritize product categories with significant growth potential, positioning the business to leverage emerging market trends.

? Embrace strategic expansion as a means to mitigate risk and reinforce long-term business resilience.

? Build organizational adaptability to withstand economic downturns, ensuring continued profitability and sustained growth even under challenging conditions.

Proactive risk management for sustainable growth

At Century Plyboards, sustainability is at the core of our business philosophy, and proactive risk management is a key enabler of this commitment. In todays dynamic and unpredictable business environment, the ability to anticipate and manage risks is essential for maintaining resilience and continuity. Our risk management approach is specifically aligned with the evolving demands of the interior infrastructure sector, where technological innovation and operational consistency are critical.

We prioritize long-term sustainability over short-term gains, ensuring that our corporate strategy is grounded in stability, transparency, and accountability. By embedding our risk management framework into the organizations operations, we empower all stakeholders with a clear understanding of our governance model—resulting in predictable processes and improved outcomes.

Our risk governance is built on a set of core principles that are consistently applied across all categories of risk. The Risk Management Committee oversees the execution of a comprehensive framework that includes defined policies, structured procedures, and robust assessment methodologies. This system allows us to effectively identify, evaluate, and respond to potential threats across the enterprise.

At Century Plyboards, we view risk management not as a reactive measure, but as a strategic tool for sustainable value creation. By maintaining a forward-looking and principle-driven approach, we are well-positioned to navigate challenges, seize opportunities, and drive long-term, responsible growth.

Blueprint for governance excellence

At Century Plyboards, we understand that a well-structured governance framework is essential to guiding responsible business practices and upholding our core values. Over the years, we have developed a robust set of policies that address the varied expectations of our stakeholders, providing clear and consistent guidelines for our interactions and decisions.

To reinforce transparency and accountability, we have adopted a meticulous documentation process that enhances traceability, strengthens our internal review mechanisms, and enables timely corrective action. This structured approach has led to several advantages, including greater process consistency, reduced onboarding and training time, and the establishment of benchmarks for continuous and sustainable improvement.

Through the adoption of this governance blueprint, we have evolved into a systems-driven organization, deeply committed to long-term sustainability. This transformation allows us to uphold the highest standards of corporate governance, ensuring that every aspect of our operations is anchored in integrity, accountability, and an unwavering pursuit of excellence.

Strategic implementation and risk management cycle

Century Plyboards risk management framework is a comprehensive and integrated system that permeates every layer of the organization—from strategic planning to day- to-day operations. This system is built around a continuous risk management cycle comprising risk identification, measurement, analysis, assessment, reporting, and monitoring. It provides real-time visibility into key risks, allowing us to respond proactively and maintain operational resilience.

Risk identification

We adopt a multi-dimensional approach to risk identification, utilizing established systems, key indicators, and quantitative metrics to detect early warning signs. Our strong reporting culture empowers executives to flag potential risks promptly, ensuring swift action and maintaining a forward-looking risk posture.

Risk measurement

Through regular use of analytical tools, we assess risks across all business functions. This holistic approach captures both organizational and functional perspectives, enabling tailored mitigation strategies that reflect the unique risk profiles of each business area.

Risk analysis and assessment

Effective risk management is central to our long-term financial performance. Our disciplined approach has directly contributed to profitability and sustained growth, underscoring the value of integrating risk management into our business strategy and operational model.

Risk reporting

We conduct systematic reviews to assess the effectiveness of our risk controls. These evaluations, categorized and comprehensive, provide early warnings and actionable insights that support timely interventions and strengthen risk preparedness.

Risk management system

In FY 2025, Century Plyboards further reinforced its enterprisewide risk management system. By promptly identifying, evaluating, and addressing risks, we minimized potential disruptions and supported seamless operations. Our standardized approach—applied consistently across all levels and functions—ensured that potential risks were effectively managed, aligning with our broader goals of operational excellence and sustainable growth.

Objectives of the risk management framework

At Century Plyboards, we have established a comprehensive risk management framework that outlines clear protocols for ethical and efficient business conduct. This framework is integral to identifying, assessing, and mitigating risks that could impact our operations—ultimately supporting the achievement of our strategic objectives. The primary goals of our risk management framework are:

Agile opportunity capture

We prioritize the early identification of potential opportunities and act swiftly to seize them. This proactive and agile approach enables us to stay responsive to changing market dynamics and build a sustainable competitive edge.

Mitigation of threats and adverse impacts

We implement targeted measures to minimize both the probability and potential consequences of identified risks. This includes formulating contingency plans and adopting proactive mitigation strategies to protect the business from disruption.

Enhanced executive decision-making

Our risk framework equips leadership with a thorough understanding of existing and emerging risks, empowering informed decision-making. This risk-aware culture ensures a balanced evaluation of risk and reward, promoting long-term growth and resilience.

Implementation

During the review period, the Risk Management Committee held dedicated meetings to oversee and refine the companys risk management practices. Century Plyboards operates under a Board-approved risk management policy that addresses all material risks across the organization. These risks are systematically identified, assessed, and managed to ensure strategic alignment and operational effectiveness.

Our policy emphasizes prudent risk oversight across the entire project lifecycle—from planning and development to execution and sustainability. By integrating structured risk mitigation measures, we aim to minimize adverse impacts on core business objectives while remaining poised to leverage emerging opportunities.

Additionally, we recognize the critical importance of embedding best practices in project and risk management. Accordingly, we have implemented specific protocols to manage project-related risks effectively, ensuring alignment with our broader sustainability and performance goals.

The Companys proactive and disciplined approach to risk management has played a vital role in the successful execution of key projects and continues to contribute significantly to our overall business success.

The mitigation of our prominent risks, 2024-25

Risks	Potential consequences	Likelihood of sustained risk occurrence	External stimulus and our strategic response
Macro-economic risk: Our plywood business is vulnerable to national and international economic events beyond our control.	• This risk can impact the Companys brand relevance in the region and the sector. • The companys growth may face stagnation. • This risk may reduce the Companys competitiveness.	Low	India is the worlds fourth-largest economy. The consumption gap between rural and urban areas is steadily narrowing, indicating rising rural demand. The Company commands the largest share of Indias organized interior infrastructure market. Despite growing demand, the interior infrastructure segment in India remains significantly underpenetrated, offering substantial growth potential.
Political risk: Changes in government administration may lead to policy changes, potentially impacting our business operations and profitability.	• Revisions to government policies could affect the Companys future growth prospects.	Low	• Long-term government policies have boosted growth in the housing and interior infrastructure sector in the country, ensuring that the companys growth is sustained.
Regulatory risk: The companys access to raw materials is dependent on obtaining necessary permits and complying with regulatory restrictions, posing a risk to our operations.	• Non-compliance with regulations may lead to temporary suspension or permanent shutdown of operations, negatively impacting the companys credit rating.	Low	• Our brand presence across products, customers, and markets is crucial for driving growth in living standards. • Our strategies align with national policies, particularly in infrastructure investments, positioning us for growth and development.
Locational risk: Investing in the wrong manufacturing location can be costly and difficult to rectify, posing a significant risk to the companys operations and profitability.	• The Company is exposed to the risk of reduced investment returns, which could negatively impact its overall margins and profitability. • This risk may have far- reaching consequences, including damage to the companys brand and reputation, decreased organizational morale, and reduced employee morale.	Low	• To reduce the risk of selecting an unsuitable manufacturing site, the Company undertakes indepth feasibility studies. These evaluations take into account critical factors such as proximity to ports, land acquisition costs, and regional market demand, ensuring well-informed decisions and minimizing the risk of suboptimal investments. • The Companys strategic decision-making is evidenced by the consistent profitability and year-over-year growth of its manufacturing facilities. This track record underscores its ability to make sound investment choices and demonstrates operational excellence in site selection and resource deployment.
Demand risk: The Company faces a significant risk that demand for emerging products may not meet initial forecasts, potentially impacting revenue and growth prospects.	• The Company is exposed to the risk of volatile demand patterns, potentially leading to fluctuations in plant utilization and revenue unpredictability.	Low	• The Company employs a targeted strategy to select product segments, identifying underserved markets and capitalizing on emerging trends. This approach has consistently proven effective, enabling the Company to establish a strong presence in niche markets. • The Company is confident that its chosen product mix will continue to be relevant and experience sustained growth, driven by Indias expanding economy. This anticipated growth is expected to mitigate the risk of decreased demand for the Companys products.
Competition risk: Intensified competition from other ports for cargo shipments poses a risk to the Companys revenue and market share.	• The Companys growth and profit margins may be negatively impacted by intense market competition, which could result in reduced demand for its services and increased pressure to lower prices.	Low	• Century Plyboards holds the largest market share in Indias interior infrastructure market, driven by its significant production capacity and competitive operating costs. • The Company has built a reputation for its commitment to delivering high-quality, aesthetically pleasing, and durable interior solutions that meet customers evolving needs.
Geographic risk: The Companys regional focus exposes it to weather-related risks, potentially disrupting access to resources and impacting operations.	• The Company has implemented a robust risk management framework to identify, assess, and mitigate weather-related risks in its operational regions. • To minimize potential disruptions, the Company has developed contingency plans and proactive measures to ensure business continuity and maintain efficient logistics. • Through its commitment to sustainability and responsible resource management, the Company is well-equipped to address weather-related challenges, fostering stakeholder trust and confidence.	Low	• To mitigate weather-related risks, the Company conducts rigorous, data-driven research before selecting manufacturing locations and resource access points, ensuring minimal disruption to operations and logistics. • The Company has not experienced any weather-related decline in productivity to date, demonstrating the effectiveness of its proactive risk management approach.
Project management risk: Delays in project completion can damage the companys reputation and market position, posing a significant risk to its business operations and profitability	• Project delays pose a dual risk to the company, threatening to reduce revenue streams while also driving up project costs and potentially undermining the projects long-term viability.	Low	• The Companys integrated approach, spanning resource assessment, land acquisition, construction readiness, technical studies, and supply chain management, has yielded expedited project implementation, outpacing industry benchmarks. • By leveraging its seasoned management teams expertise, garnered from extensive project experience, the Company ensures timely and cost-effective project commissioning, effectively mitigating risks associated with delays and cost overruns.
Risk of receivables: Difficulty in collecting payments from established customers can negatively impact the companys receivables and revenues, affecting its liquidity and financial stability.	• Substandard sales performance, which may lead to delayed payments, defaults, and subsequent provisions and write-offs. • Limited revenue visibility, which could exacerbate sales-related risks and create uncertainty around future revenue streams.	Low	• The Company has a history of collaborating with reputable customers, guaranteeing punctual cash flows and minimal payment defaults. • The Company managed a receivables cycle of 39 days in 2024-25, marking consistency as compared to 38 days in 2023-24.
Debt repayment risk: Defaulting on debt repayment or servicing can severely damage the Companys reputation, hinder growth prospects, and lead to financial instability.	• The Companys inability to meet its debt obligations could have severe repercussions. It may adversely affect the Companys creditworthiness, limiting its capacity to secure additional debt on favourable terms, which is crucial for future growth. This could damage the Companys reputation and impact its business prospects, ultimately compromising its long-term financial stability and success.	Low	• Throughout its nearly forty years of operation, the company has upheld a debt-free balance sheet and has not experienced any defaults on payments to lenders. • The interest cover of the company was high at 12% in 2024-25, indicating very low level of debt.
People risk: The Company faces the risk of being unable to retain or attract skilled professionals, potentially impacting its operations, productivity, and competitiveness.	• This could have a ripple effect, undermining the companys ability to leverage expertise, which in turn could erode its brand value, diminish productivity, and compromise profitability.	Low	• The Company takes pride in its proven track record of attracting and retaining highly skilled professionals. As a preferred employer in the industry, it offers unmatched opportunities for professional and personal growth, enabling it to consistently draw and retain top talent.
Environmental risk: Non-compliance with global ESG standards poses a risk to the companys reputation, regulatory compliance, and financial performance.	• The Companys inability to meet environmental standards could lead to reputational damage, inviting criticism and censure. This may prompt environmentally conscious customers, particularly OEMs, to re-evaluate their partnerships and potentially switch to more sustainable competitors.	Low	• The Company has made substantial investments in minimizing its carbon footprint, surpassing regulatory mandates to guarantee environmental sustainability. • The Company derived 18% of its electricity requirements from renewable energy in FY 2024-25.
Safety risk: Substandard safety standards can have severe consequences on both manufacturing and transportation operations, posing risks to employees, customers, and the business as a whole.	• Insufficient safety protocols may lead to accidents and incidents, damaging the Companys reputation, brand image, and customer trust, ultimately impacting market share. • Accidents or incidents resulting in human injuries could lead to employee demotivation, decreased productivity, and operational disruptions, ultimately affecting the companys financial performance.	Low	• The Company prioritizes safety, investing heavily in mechanization to minimize risks in manufacturing and transportation • The company cultivated a safety-first culture, providing comprehensive training programs and establishing clear standard operating procedures to ensure all employees are well-versed in and committed to adhering to rigorous safety protocols.
Liquidity risk: Increased investment requirements may strain the companys Balance Sheet, potentially impacting its ability to meet short-term financial obligations.	• An increase in investment needs could put pressure on the companys balance sheet, potentially compromising its liquidity and leverage ratio. This could have a ripple effect, leading to a credit rating downgrade. As a result, the company may face higher costs and greater challenges in securing funding for future investments, ultimately constraining its growth prospects.	Low	• Sufficient liquidity to support current growth initiatives without compromising its Balance Sheet integrity or resorting to debt. • A virtually debt-free status, which enhances its financial stability and security. This position may contribute to maintaining or improving its credit rating, ultimately facilitating cost- effective access to resources for future investments.
Innovation risk: Failure to innovate and launch new products can lead to declining brand value, reduced competitiveness, and potential loss of market share.	• Failure to consistently introduce new products may lead to diminished appeal to trade partners, potentially resulting in decreased engagement and a negative impact on the companys brand reputation and loyalty.	Low	• The Companys research and development team is proactively driving innovation, consistently creating and launching new products. This strategic approach enables the company to maintain strong engagement with trade channels and end-consumers, ultimately fortifying its brand reputation and loyalty.
Distribution risk: Over-reliance on a single geographic region for revenue makes the company vulnerable to regional market downturns, potentially constraining growth and impacting overall performance.	• The Companys over-reliance on a single geographic region in India poses a growth risk. A demand slowdown in this area could hinder the companys nationwide expansion and, in the long term, limit its ability to tap into growing demand, ultimately constraining its market potential.	Low	• Centurys products is available across the nation through 26 marketing offices, covering almost all the cities and townships in the country. The company enjoys a presence in over 20 countries.
Forex fluctuation risk: Changes in foreign currency exchange rates can significantly impact the companys financial performance, affecting import/ export costs, revenue, and profitability.	• Fluctuations in currency exchange rates pose a significant risk to the companys financial performance, potentially eroding profitability through adverse impacts on export revenues, import costs, and overall competitiveness.	Medium	• To minimize currency risk, the company proactively monitors its exposures and utilizes hedging strategies to mitigate foreign exchange volatility. This prudent approach allows the company to offer extended credit periods to overseas buyers on a selective basis, while effectively managing long-term currency fluctuations and protecting its financial interests.

Human resources and industrial relations

At Century Plyboards, we prioritize creating a positive and employee-friendly workplace atmosphere by implementing careful hiring practices, offering comprehensive training programs, and providing abundant opportunities for professional growth and development. Throughout the reviewed period, we conducted numerous training initiatives aimed at enhancing both functional and behavioural skills among our employees, fostering a culture of continuous learning and improvement. Our organization values diversity and promotes a positive connection with our factory workforce, comprising a mix of millennials and experienced personnel, totalling 7396 permanent employees and 5485 non-permanent employees as of 31st March, 2025.

Internal control systems and their adequacy

Century Plyboards has a strong internal control system in place, which is reviewed regularly to ensure it remains effective. Our existing systems also have multiple internal checks and balances that help maintain transparency, accuracy, and accountability across all operations. Whenever required, corrective steps are taken to further improve operational efficiency. The Company holds ISO 9001 and ISO 14001 certifications, reflecting its commitment to quality and environmentally friendly practices.

We have a robust supply chain management system that helps us manage procurement, planning, dispatches, and delivery confirmations efficiently. To strengthen our business operations, we are upgrading to SAP S/4HANA, an advanced enterprise resource planning system. This will enable us to manage our materials, production processes, sales and distribution, finance, maintenance, and quality control in a more integrated and efficient manner. The new system will also provide real-time analytics and insights into costing and profitability across different products and divisions, helping us make faster and better business decisions.

To improve our dealer experience, we have enabled our dealers to interact with us over WhatsApp, place orders through a mobile app, and track their dispatches, billing, receipts, and outstanding balances easily. These initiatives collectively enhance transparency, responsiveness, and ease of doing business with the Company.

Cautionary statement

The "Management Discussion and Analysis" section contains forward-looking statements regarding the companys objectives, projections, estimates, and predictions. These statements, which include expectations about growth strategy, product development, market positioning, expenditures, and financial results, are based on certain assumptions and expectations about future events. However, the company cannot guarantee the accuracy or realization of these assumptions and expectations. Furthermore, the company disclaims any responsibility to publicly update, modify, or revise any forwardlooking statement in light of new developments, information, or events.

For and on behalf of the Board of Directors
	Sajjan Bhajanka
	(DIN: 00246043)
Kolkata, 7th August, 2025	Chairman and Managing Director