Century Plyboards India Ltd Management Discussions

Management Discussion and Analysis Report

Global economy Overview

The global economy remained broadly stable, with growth holding at 3.5% in both 2024 and 2025. The effects of the war in the Middle East were largely offset by accelerated demand- driven momentum in the global technology cycle, supported by advances in artificial intelligence (AI) and its adoption. The impact varied significantly across countries: energy exporters outside the conflict zone benefited from favourable terms of trade, while economies integrated into the technology value chain recorded stronger activity, including some energy importers. In contrast, energy importers with limited participation in the technology upturn, including many low- income countries, experienced weaker activity.

Advanced economies remained broadly stable, growing by 1.9% in both 2024 and 2025, while emerging market and developing economies maintained growth at 4.5% in 2025, unchanged from 2024. Global inflation moderated sharply in 2025, declining to an estimated 4.1% from 5.8% in 2024, continuing the multi-year disinflation trend that had been in place since the beginning of 2024.

Outlook

According to the International Monetary Fund (IMF), the global economic outlook remains subject to elevated geopolitical and policy uncertainties. Given the challenge of forming stable, real-time assumptions for projections, the IMF World Economic Outlook Update assumes that the reopening of the Strait of Hormuz begins in mid-July 2026, with conditions broadly returning to the prewar state of affairs by March 2027. This outlook is consistent with commodity price assumptions based on market pricing as of June 10, 2026.

Under this scenario, global economic growth is projected at 3.0% in 2026, before recovering to 3.4% in 2027. The outlook reflects the continued impact of geopolitical disruptions and commodity market pressures in 2026, followed by a gradual recovery as conditions normalise in 2027.

Global inflation is projected to rise to 4.7% in 2026, as the disinflation trend that had been underway since 2024 stalls, before easing to 3.9% in 2027. The near-term increase in inflation reflects renewed commodity price pressures and disruptions associated with the conflict, while the subsequent moderation is expected to accompany the normalisation of supply conditions.

Despite these challenges, the global economy is expected to continue expanding, with growth supported by technological innovation, resilient economic activity and a gradual easing of geopolitical disruptions. However, the outlook remains vulnerable to prolonged conflict, disruptions to energy and trade flows, commodity price volatility, and broader geopolitical and policy uncertainty, which could affect the pace and sustainability of global growth.

Indian economy Overview

The Indian economys real GDP grew by 7.7% in FY26, compared to 7.1% in FY25. This growth was driven by strong consumption and increasing investment, reaffirming Indias position as the fastest-growing major economy. Indias Real GDP at Constant Prices was estimated at Rs.323.12 Lac crore in FY 2025-26, compared with Rs.299.89 Lac crore in FY 2024-25.

Growth remained broad-based during FY26, with real GDP growth recorded at 6.7% in Q1, 8.4% in Q2, 7.8% in Q3 and an estimated 7.8% in Q4. Real GVA grew by 7.9% in FY26, compared with 7.3% in FY25, reflecting sustained momentum across both services and industry. The tertiary services sector grew by 9.0%, while the secondary sector expanded by 9.1%, supported by manufacturing and construction activity.

Inflation remained benign through much of FY26, with full-year CPI inflation estimated at 2.1%, creating room for 125 basis points of cumulative rate cuts and supporting consumption and investment. However, the Indian rupee depreciated by 9.88% during FY26, touching Rs.94.83 against the US dollar, amid global capital-flow volatility, a strong dollar environment and geopolitical uncertainties.

Despite heightened global uncertainties, foreign portfolio investors remained risk-averse, withdrawing a record Rs.1.8 trillion during FY26. Strong domestic institutional inflows of Rs.8.50 trillion provided a crucial counterbalance and supported the resilience of Indias capital markets. Indias market capitalisation declined by 8% year-on-year to $4.5 trillion, while the BSE Sensex and Nifty 50 declined by 7% and 5%, respectively, during FY26. Gold prices surged by 64.1%, reflecting heightened global risk aversion and safe-haven demand.

Indias fiscal position remained resilient, with net direct tax collections rising 5.12% year-on-year to Rs.23.40 Lac crore in FY26. Although collections were below the Revised Estimate of Rs.24.21 Lac crore, the increase reflected continued economic activity and a broadening formal tax base.

The banking sector also strengthened during FY26, with the gross non-performing asset ratio declining to a multi-decadal low of 1.8% as of March 2026. Scheduled commercial banks reported a return on assets of 1.3% and return on equity of 12.6%, while the capital to risk-weighted assets ratio stood at 17.7% and the Common Equity Tier-1 ratio at 15.3%, indicating stronger asset quality, profitability and capitalisation.

Growth catalysts

Policy-led consumption boost: The Union Budget FY27s tax relief measures—particularly income tax exemptions up to Rs.12 Lac are expected to stimulate discretionary spending and reinforce consumption-led growth.

Anticipatory Pay Commission impact: The 8th Pay Commission, though expected to be implemented from FY28, is already shaping consumer sentiment, creating a forward consumption impulse.

Monetary stability: The Reserve Bank of Indias calibrated stance, with the repo rate at 5.25%, balances inflation risks with growth support, ensuring macroeconomic stability.

Credit expansion: Improved banking health and liquidity conditions are expected to sustain strong credit growth across MSMEs, housing and retail segments.

Fiscal prudence with growth focus: The Union Budget maintains fiscal discipline while prioritising infrastructure, MSME support, skilling and innovation—key levers for longterm productivity.

Outlook

The year under review underscores a defining divergence: a world grappling with uncertainty, and an India navigating it with confidence.

In a global environment marked by fragmentation and caution, India stands out as a rare convergence of stability, scale and structural opportunity. The World Bank has revised its FY27 growth estimate to approximately 6.6%, reflecting resilient domestic momentum even as growth moderates from the previous year. India is expected to retain its position as the fastest-growing major economy.

Growth will be shaped by a combination of strong domestic demand and resilient private consumption, supported by low inflation and GST rationalisation, alongside stable export performance with improved access to key markets. This momentum is further reinforced by sustained policy support, ongoing economic reforms and a favourable demographic advantage.

While risks persist, particularly from elevated energy prices, subsidy pressures on government spending and uncertainty in global demand, Indias macroeconomic fundamentals remain strong.

Over the medium term, sustained consumption, gradual investment recovery and expanding global trade linkages are expected to reinforce Indias position as a key driver of global economic growth.

Industry structure and developments India furniture industry overview

Indias furniture sector is undergoing a remarkable evolution, blending centuries-old craftsmanship with modern design innovation. Long rooted in artisanal woodworking and cultural heritage, the industry is now redefining itself to align with contemporary lifestyles, global aesthetics, and shifting consumer expectations.

Historically fragmented and dominated by unorganised local markets, the landscape is steadily moving toward a structured ecosystem. Branded players are emerging as key drivers, offering diverse styles, materials, and tailored solutions that cater to both traditional sensibilities and modern demand

The Indian furniture market was valued at approximately USD 25.4 billion in 2025 and is expected to reach USD 44.3 billion by 2034, registering a CAGR of 6.4% during the forecast period from 2026 to 2034. This robust trajectory is being propelled by rising disposable incomes, rapid urbanisation, and the expansion of the housing and real estate sectors across the country. Growing consumer preference for modular and customised furniture solutions, alongside increasing demand for branded and premium products, is further accelerating market expansion. At the same time, global design influences, evolving lifestyle patterns, and heightened interest in sustainable materials are reshaping purchasing decisions, while the proliferation of e-commerce platforms has enhanced accessibility and strengthened the industrys overall market share.

Structural housing programs, formalisation incentives for MSMEs, and the rise of urban households are broadening the consumer base, particularly for economy and mid-range products. Regulatory developments, such as the enforcement of the furniture quality control order from February 2026, are reshaping compliance, warranty, and after-sales standards. These measures not only enhance access to government and institutional demand but also encourage unorganised producers to pursue certification. Public procurement through the Government e-marketplace and MSME sourcing mandates is further increasing project-based orders, raising expectations around documentation and lifecycle costing.

Sustainability has emerged as a defining theme, with Indian Green Building Council guidelines and the expansion of FSC chain-of-custody certifications driving the adoption of engineered wood, low-VOC finishes, and eco-labeled products in premium and institutional projects.

Revenues by segment Indian plywood sector overview

The plywood business accounted for 63% of the revenues of Century Plyboards during the year under review.

The Indian plywood market is experiencing robust growth, driven by rapid urbanization, expanding residential and commercial construction activities, and rising consumer preference for modern interior furnishings. The organized sector is strengthening its presence through quality standardization, brand-building initiatives, and expansion of distribution networks across urban and semi-urban centers. Increasing disposable incomes, changing lifestyle patterns, and government housing schemes are creating substantial demand opportunities nationwide.

The Indian plywood market is estimated to be valued at over USD 7 billion in 2025 and is expected to grow steadily over the medium term, driven by increasing demand from residential housing, commercial construction, furniture manufacturing and interior infrastructure. By product type, commercial ply leads the market with a 58% share in 2025, owing to its widespread application in residential furniture, interior decoration, and general construction. Rising demand from real estate developers and modular furniture makers is driving growth, as they prefer calibrated, BWP grade plywood for precise fitting and moisture resistance. Stricter E0 and E1 formaldehyde emission norms are also boosting demand for low-emission plywood in premium construction projects. The rise of the modular furniture industry and home interior services is expanding revenue, with consumers favoring customized and modular designs that require quality plywood with aesthetic finishing options. At the same time, sustainability trends are reshaping the industry, as manufacturers increasingly adopt eco-friendly materials and processes to meet consumer demand for greener products, supporting environmental goals while enhancing brand reputation.

Indian laminates sector overview

During the year under review, the laminate segment contributed 13% to Century Plyboards total revenues, underscoring its importance within the Companys product portfolio.

The Indian decorative laminates market is estimated to be valued at around USD 2 billion in 2025 and is expected to grow steadily, driven by increasing demand from housing, modular furniture, commercial interiors and renovation activities. Rising urbanisation, higher disposable incomes and evolving consumer preferences continue to support demand for aesthetically appealing and durable surface solutions.

The industry is witnessing a shift towards premium and value-added products, with growing preference for innovative designs, textured finishes, performance-enhancing features and sustainable materials. Rising aspirations for personalised living spaces, increasing nuclear family formations, and social media-driven awareness of international design trends are accelerating renovation cycles. Demand from hospitality, healthcare, retail and office spaces is also contributing to market growth.

Supported by strong brand recognition, a diversified product portfolio and an extensive distribution network, the Company remains well positioned to capitalise on the long-term growth opportunities in the decorative laminates segment.

Indian medium density fibre (MDF) board overview

The MDF business accounted for 17% of the revenues of Century Plyboards during the year under review.

Based on available industry estimates, trade data, and company disclosures, the Indian MDF market is estimated at around USD 1.4 billion in 2025. The industry is projected to grow at a high single-digit CAGR over the next five years, driven by urbanization, modular furniture adoption, and rising preference for engineered wood products.

The market is being propelled by several converging forces. Rapid expansion in the furniture and interior decor industry is a primary driver, with MDF valued for its consistency, affordability, and ease of modification for contemporary furniture design. The transition in consumer demand toward ready-to-assemble and modular furniture has further driven MDF consumption, as

MDFs flat surface makes it easy to apply veneers, laminates, and paints to meet varied aesthetic demands.

The Pradhan Mantri Awas Yojana, targeting 2 crore urban homes by 2030, generates structural demand, with each unit requiring standardised wardrobes, kitchens, and interior doors typically budgeted at approximately 0.22 m³ of MDF The new IS 12440:2025 performance standard aligns domestic panel specifications with global furniture buyers, boosting local sourcing and curbing imports. Environmental considerations are reshaping production, with renewable inputs such as bamboo and straw gaining traction as fast-growing renewable resources among eco-conscious buyers and manufacturers seeking sustainable alternatives to synthetic resins.

Indian particle board market overview

During the year under review, the particle board segment contributed 4.3% to Century Plyboards total revenues.

The Indian particle board market is estimated to be valued at over USD 1 billion in 2025 and is expected to grow steadily, driven by rising demand for cost-effective furniture solutions, modular kitchens, ready-to-assemble furniture and increased use of engineered wood products. The segment is growing well ahead of the broader wood panel industry average, underpinned by structural demand from housing, organised retail, and sustainability-led substitution from solid wood and low-grade plywood.

The demand growth stems from urban housing starts, organised furniture retail, and export compliance pressures that reward quality upgrades. Regulatory milestones such as the February 2025 Bureau of Indian Standards (BIS) Quality Control Orders are accelerating the shift from a fragmented, price-sensitive supply base toward a consolidated, technology- driven ecosystem. Alignment with CARB Phase 2 and EN 120 formaldehyde limits enables dual-compliant plants to earn 25-30% price premiums in EU and U.S. markets, prompting industry-wide upgrades.

Indias middle class is projected to expand to nearly 600 million by 2030, and the Government of Indias focus on affordable housing under PMAY, infrastructure expansion, growth of the organised furniture retail sector, and the Make in India initiative for wood-based panel industries creates a policy-supportive environment for domestic particleboard manufacturers.

Indian real estate sector overview

Indias real estate sector is undergoing a significant transformation, with market size expected to expand from approximately US$ 200 billion in 2021 to US$ 1 trillion by 2030. The sector is projected to contribute around 13% to the countrys GDP by 2025, supported by robust growth across residential, retail, hospitality, and commercial real estate segments. Looking further ahead, the market could reach US$ 5-7 trillion by 2047, with the potential to exceed US$ 10 trillion over the long term.

The residential real estate market maintained strong momentum in 2025, recording sales of over 6.1 Lac units with an estimated transaction value of approximately Rs.8.5 Lac crore. A key trend during the year was the growing premiumisation of the housing market, with properties priced above Rs.1 crore accounting for nearly 63% of total sales value, compared with 53% in the previous year. This reflects rising consumer aspirations, increasing demand for larger and better-equipped homes, and developers increasing focus on premium and value-accretive projects.

The sector continues to benefit from rapid urbanisation, improving infrastructure, favourable demographics and increasing institutional participation. Commercial real estate growth is being supported by strong office leasing activity, expansion of Global Capability Centres (GCCs) and increasing participation through Real Estate Investment Trusts (REITs), which are enhancing market liquidity and attracting long-term capital. At the same time, industrial and logistics real estate has emerged as a key growth driver, supported by the expansion of e-commerce, warehousing, supply chain investments and manufacturing activities.

With demand supported across residential, commercial and industrial segments, the Indian real estate sector remains well positioned for sustained long-term growth, creating significant opportunities for the building materials, interior infrastructure and home improvement industries.

Growth drivers

Premium interior solutions and design innovation: Rising consumer aspirations for sophisticated living spaces are fueling demand for premium plywood products with advanced textures, finishes, and decorative laminates. Manufacturers are responding with innovative offerings such as pre-laminated boards, designer veneers, and customized solutions tailored to evolving aesthetic preferences in both residential and commercial interiors.

Urbanization and housing demand: By 2030, more than 40% of Indias population is expected to reside in urban centers. This rapid urban expansion is driving significant demand for modern housing and infrastructure, where plywood remains indispensable as a core material for construction and furnishing.

Rise of Indian consumerism: Indias consumer spending is projected to reach USD 4.3 trillion by 2030, underscoring the scale of opportunity for the plywood sector. Rising disposable incomes and accelerating urbanization are translating into heightened demand for modular furniture, premium interiors, and modern living solutions directly benefiting the wood panel industry.

Expanding construction industry: The construction sector continues to be a cornerstone of Indias economic growth, contributing substantially to GDP. Government initiatives such as Housing for All and the National Infrastructure Pipeline with planned expenditure of USD 1,500 billion over five years, including USD 250 billion for urban infrastructure-are driving demand for construction materials. Plywood, valued for its durability and versatility, is increasingly preferred for applications such as formwork, roofing, and wall sheathing.

Demographic dividend: By 2030, India will have 1.04 billion working-age individuals creating a powerful demographic advantage. This young population is shaping consumer preferences toward ready-made solutions like wood panels over traditional carpentry, further supporting the growth trajectory of the plywood market.

Strengths, Weaknesses, Opportunities and Threats (SWOT)

Strengths

• The Company enjoys strong brand recognition and market leadership, translating into sustained profitability through deep customer trust and loyalty.

• Its broad and versatile product portfolio enables the Company to cater to diverse consumer preferences across multiple segments.

• A nationwide footprint supported by a robust distribution network ensures reliable product availability and uninterrupted supply across markets.

• Strategically positioned manufacturing facilities enhance operational efficiency, enabling quicker deliveries and elevating customer satisfaction.

• Operating in industries characterized by high entry barriers, the Company maintains a durable competitive advantage and a well-protected market position.

Weaknesses

• The Company functions within a highly fragmented and competitive market, largely dominated by unorganized players, except in the MDF segment where competition is more structured.

• Sales performance remains heavily reliant on professional endorsements and referrals from carpenters, architects, and other influencers, underscoring the need to nurture and strengthen these critical stakeholder relationships.

• Variations between supply and demand across product categories may weigh on profitability, emphasizing the importance of precise demand forecasting, efficient production planning, and disciplined inventory management.

Opportunities

• Rising demand for structured wood products presents a clear growth avenue, enabling the Company to broaden its portfolio and align with evolving customer tastes.

• Indias millennial demographic advantage offers a substantial consumer base, as this segment increasingly favors modern, high-quality building materials and contemporary furniture solutions.

• The underpenetrated rural market provides untapped potential. By tailoring offerings to rural needs, the Company can expand its footprint, capture new customer segments, and strengthen market share.

Threats

• Unregulated vendors selling at unsustainably low prices pose risks to both profitability and market share.

• Scarcity of critical raw materials may disrupt production schedules, inflate costs, and erode financial performance.

• Export restrictions and added compliance requirements from timber-producing nations could elevate procurement costs and complicate operations.

• Volatility in raw material prices threatens profitability, particularly when cost escalations cannot be swiftly transferred to customers.

• Technological disruptions may challenge established business models, necessitating proactive adaptation to remain competitive.

Segment overview, 2025-26 (Standalone)

Plywood

• The Company successfully retained its leadership position in the plywood segment during the year.

• Segment revenue recorded a 17.3% growth, rising to Rs.2,921.32 crore, compared to Rs.2,491.13 crores in FY 2024-25.

• EBITDA margin slightly reduced to 14.3%, from 14.38% (excluding impairment loss) in the previous fiscal year.

• Average realizations per unit of the finished product strengthened by 1.4% year-on-year.

• Sales volume expanded by 16.5%, with total output reaching 4,85,403 CBM during the period under review.

• Capacity utilization stood at 94%, reflecting operational efficiency and sustained demand momentum.

Laminates

• Segment revenue increased from Rs.617.69 crore in FY 2024-25 to Rs.624.81 crore in FY 2025-26.

• EBITDA margin stood at 9.0% in FY 2025-26 compared to 8.20% in the previous year.

• Average realizations per unit of the end product increased by 6.5% over last year.

• Total volume decreased by 0.6% during the year, with the current level at 70,11,935 sheets.

• Capacity utilization stood at 84% in FY 2025-26

Medium density fibre board (MDF)

• Segment revenue increased by 7.6% to Rs.804.84 crore compared to Rs.747.67 crore in FY 2024-25.

• EBITDA margin stood at 13.2% in FY 2025-26, as against 15.2% in FY 2024-25.

• Total volume recorded an increase of 9.85% during the year, with the current level at 2,65,159 cbm.

• Average realizations per unit decreased by 2.5% compared to the previous year.

• Capacity utilization stood at 82% in FY 2025-26.

Particle board

• Segment revenue increased by 38.2% to Rs.200.39 crore compared to Rs.144.95 crore in FY 2024-25.

• EBITDA margin stood at -6.7% in FY 2025-26, as against 7.3% in FY 2024-25.

• Total volume increased by 53.4% to 1,07,500 cbm during the year.

• Capacity utilization stood at 67% in FY 2025-26

Discussion on performance, FY 2025-26

Balance Sheet

• Total borrowings, including buyers credit, stood at Rs.838.50 Crore in FY 2025-26 compared to Rs.731.20 crore in FY 2024-25 crore.

• Net fixed assets amounted to Rs.1,697.90 crore in FY 2025-26, as against Rs.1,588.40 crore in FY 2024-25.

• Net worth stood at Rs.2,679.98 crore as on 31st March, 2026, compared to Rs.2,425.98 crore as on 31st March, 2025, reflecting an increase of 10%.

• Inventories increased by 5% from Rs.772.97 crore as on 31st March, 2025, to Rs.807.80 crore as on 31st March, 2026.

Profit and Loss Overview

• Operating Revenues: The companys revenues from operations registered an increase of 14.2%, moving from Rs.4067.91 crore in FY 2024-25 to Rs.4,645.97 crore in FY 2025-26.

• EBITDA: Earnings before interest, tax, depreciation, and amortisation (EBITDA) stood at Rs.555.47 crore in FY 2025-26, reflecting an increase compared to Rs.521.61 crore reported in FY 2024-25.

• Profit after Tax (PAT): Profit after tax amounted to Rs.276.82 crore in FY 2025-26, marking a decrease of 2.7% over the previous year.

• Depreciation and Amortisation: Depreciation and amortisation expenses were recorded at Rs.125.25 crore in FY 2025-26, as against Rs.88.28 crore in FY 2024-25.

Key financial ratio - significant changes and explanations

Ratio	FY 2025-26	FY 2024-25
Debtors Turnover (Days)	41	39
Inventory Turnover (Days)	63	69
Interest Coverage Ratio	7.57	11.96
Current Ratio (with short term borrowings)	1.38	1.70

Key financial ratio - significant changes and explanations

Ratio	FY 2025-26	FY 2024-25
Debt Equity Ratio	0.31	0.30
Operating Profit Margin (%) (EBIT Margin)	9.26	10.65%
Net Profit Margin (%) / PAT	5.96%	7.03%
Return on Net Worth/ Average Equity	10.79%	12.32%
EBITDA Margin	11.96%	12.82%
Earnings per share (H)	12.46	12.81
Fixed Asset Turnover Ratio	2.74	2.56
Return on Average capital employed	11.83	13.49

Details of significant changes in the key financial ratios

Interest coverage ratio reduced from 11.96 times to 7.57 times mainly due to reduction in EBIT and higher Interest Expense on account of increased debt taken to fund ongoing expansions.

Outlook

The Company intends to leverage rising demand supported by favourable macroeconomic conditions and enabling government policies, with a goal of achieving revenues of Rs.12,000 crore by 2031.

Risks and concerns

Every enterprise faces inherent business risks, and the ability to manage them effectively is vital for resilience, sustainable operations, and long-term success. Our risk management framework is designed to address multiple dimensions— ranging from cushioning against operational disruptions to ensuring continuity, to consistently upgrading services in line with shifting customer expectations and embracing proactive change management to remain competitive in a fast-evolving environment. The approach also emphasizes prudent sourcing practices and optimal resource utilization to strengthen productivity, while actively identifying and curbing revenue leakages. Minimizing waste is another priority, supporting both sustainability goals and cost efficiency.

Aligned with the directives of our Board of Directors, the Company remains focused on creating shareholder value through strategic expansion and growth. At the same time, we uphold the interests of all stakeholders such as customers, employees, investors, and the broader community. By pursuing growth responsibly and holistically, we aim to generate enduring value and secure long-term prosperity for everyone connected with our business

Century Plyboards strategic de-risking model

Ensuring long-term sustainability requires a strong and clearly defined risk management framework. Such a system must identify the scope of potential risks while laying out practical, forward-looking strategies for mitigation. When executed effectively, it not only protects the organization during times of economic volatility but also enables a swift and resilient recovery.

Century Plyboards has established a comprehensive de-risking model, built on the collective experience and strategic vision of its leadership team. The framework is anchored in the following priorities:

• Cost optimization: Strengthening operational efficiency and safeguarding competitiveness through disciplined cost management.

• Balanced growth: Aligning expansion initiatives with robust governance practices to secure sustainable progress.

• Portfolio diversification: Expanding into interior infrastructure solutions to reduce dependence on any single market segment.

• Focus on high-potential segments: Concentrating on product categories with strong growth prospects to capitalize on emerging market opportunities.

• Strategic expansion: Pursuing measured expansion as a tool to mitigate risk and reinforce long-term resilience.

• Organizational agility: Enhancing adaptability to withstand economic downturns, ensuring profitability and consistent growth even in challenging conditions.

Proactive risk management for sustainable growth

For Century Plyboards, sustainability forms the foundation of our business philosophy, with proactive risk management serving as a critical driver of this vision. In an environment marked by volatility and rapid change, anticipating and addressing risks is essential to safeguard resilience and ensure continuity. Our approach is tailored to the evolving needs of the interior infrastructure industry, where technological advancement and operational reliability are indispensable.

We place long-term sustainability ahead of short-term gains, anchoring our corporate strategy in principles of stability, transparency, and accountability. By embedding risk management practices into daily operations, we provide stakeholders with clarity on our governance framework, delivering consistent processes and stronger outcomes.

Our governance model is underpinned by core principles that apply uniformly across all risk categories. The Risk management committee directs the implementation of a comprehensive system comprising well-defined policies, structured procedures, and rigorous assessment tools. This enables us to systematically identify, assess, and respond to risks across the organization.

At Century Plyboards, risk management is regarded not merely as a defensive mechanism but as a strategic instrument for creating sustainable value. With a forward-looking, principle- based approach, we are equipped to overcome challenges, harness opportunities, and drive responsible, long-term growth.

Blueprint for governance excellence

Century Plyboards places strong emphasis on a structured governance framework as the foundation for responsible business conduct and the preservation of its core values. Over time, the Company has instituted a comprehensive set of policies designed to meet diverse stakeholders expectations, offering clarity and consistency in both decision-making and engagement.

To strengthen transparency and accountability, we have implemented a rigorous documentation system that improves traceability, reinforces internal review processes, and facilitates timely corrective measures. This disciplined approach has delivered tangible benefits—greater uniformity in processes, faster onboarding and training cycles, and the creation of benchmarks that drive continuous and sustainable improvement.

By embedding this governance model into our operations, we have transitioned into a systems-oriented organization with a steadfast commitment to long-term sustainability. This evolution enables us to uphold the highest standards of corporate governance, ensuring that integrity, accountability, and excellence remain at the core of everything we do.

Strategic implementation and risk management cycle

Century Plyboards has instituted a holistic risk management framework that extends across all levels of the organization, from long-term strategic planning to routine operational activities. At its core lies a continuous cycle of risk management—covering identification, measurement, analysis, evaluation, reporting, and monitoring.

This integrated system ensures that key risks are visible in real time, enabling proactive responses and safeguarding the Companys ability to remain resilient and maintain uninterrupted operations.

Risk identification

Our method of risk identification is multi-faceted, drawing on proven systems, critical indicators, and quantitative tools to capture early signals of potential challenges. A culture of robust reporting ensures that executives can highlight emerging risks without delay, enabling rapid responses and reinforcing a proactive, forward-looking stance on risk management.

Risk measurement

By consistently applying advanced analytical tools, we evaluate risks spanning every business function. This comprehensive methodology integrates both enterprise-wide and functional viewpoints, allowing us to design mitigation strategies that are precisely aligned with the distinct risk characteristics of each area of the business.

Risk analysis and assessment

Strong risk management lies at the heart of our long-term financial success. By maintaining a disciplined approach, we have consistently supported profitability and ensured steady growth. This demonstrates the importance of embedding risk management practices within both our strategic direction and day-to-day operations, making it an integral driver of sustainable performance.

Risk reporting

We carry out structured evaluations to measure how effectively our risk controls are functioning. These reviews, both detailed and categorized, generate early signals and practical insights that enable timely corrective measures while reinforcing overall preparedness against potential risks

Risk management system

In FY 2026, Century Plyboards strengthened its enterprise wide risk management framework. Through timely identification, assessment, and mitigation of risks, the Company reduced potential disruptions and enabled smooth operations. A consistent and structured approach across functions and levels ensured effective risk management, aligned with its broader objectives of operational excellence and sustainable growth.

Objectives of the risk management framework

Century Plyboards has instituted a comprehensive risk management system that sets out clear protocols to ensure ethical conduct and operational efficiency. This framework is central to identifying, evaluating, and mitigating risks that could affect our business, thereby reinforcing the pursuit of our strategic objectives. Key priorities of the framework include:

Proactive opportunity capture: We focus on spotting potential opportunities at an early stage and acting decisively to leverage them. This agile approach keeps us attuned to shifting market conditions and helps secure a lasting competitive advantage.

Threat mitigation and impact reduction: Targeted measures are deployed to lower both the likelihood and severity of identified risks. Contingency planning and proactive strategies safeguard operations against disruption and strengthen business continuity.

Strengthened executive decision-making:

By providing leadership with deep insights into current and emerging risks, the framework enables informed and balanced decisions. This risk-aware culture ensures that growth is pursued responsibly, with resilience and sustainability at the forefront

Implementation

Throughout the review period, the Risk Management Committee convened focused sessions to monitor and strengthen the Companys risk management practices. Century Plyboards operates under a Board-sanctioned policy that comprehensively addresses material risks across the enterprise. These risks are methodically identified, evaluated, and managed to ensure both strategic alignment and operational efficiency.

Our framework underscores vigilant oversight across every stage of the project lifecycle—spanning planning, development, execution, and long-term sustainability. By embedding structured mitigation measures, we work to reduce potential adverse impacts on core objectives while remaining agile enough to capitalize on emerging opportunities.

We also place strong emphasis on integrating best practices into project and risk management. To this end, specific protocols have been established to effectively address project-related risks, ensuring consistency with our broader sustainability agenda and performance targets.

The Companys proactive and disciplined stance on risk management has been instrumental in the successful delivery of major projects and continues to serve as a cornerstone of our overall business performance.

The mitigation of our prominent risks, 2025-26

Risks	Potential consequences	Likelihood of sustained risk occurrence	External stimulus and our strategic response
Macro-economic risk: The plywood business remains exposed to national and global economic fluctuations that lie outside the Companys control	• Possible erosion of brand relevance within the sector and region	Low	• India, as the worlds sixth-largest economy, is witnessing a steady narrowing of the rural- urban consumption gap, signaling stronger rural demand. Century Plyboards holds the leading position in Indias organized interior infrastructure market. Despite rising demand, the interior infrastructure space continues to be significantly underpenetrated, offering ample room for expansion and resilience against macro-economic pressures
	• Growth momentum may slow or stagnate
	• Overall competitiveness could be weakened
Political risk : Shifts in government leadership may result in policy changes that could influence business operations and overall profitability.	• Alterations in government regulations may affect the Companys future growth trajectory	Low	• Stable, long-term government initiatives have consistently supported growth in Indias housing and interior infrastructure sectors. These policies provide a strong foundation that helps sustain the Company s expansion and reinforces its market position.
	• Business expansion could face constraints if policy directions change unfavorably
Regulatory risk : The Companys ability to secure raw materials depends on obtaining required permits and adhering to regulatory guidelines, creating potential operational exposure.	• Failure to comply with regulations could result in temporary suspension or even permanent closure of operations	Low	• Century Plyboards strong brand presence across diverse products, customer segments, and markets continues to drive improvements in living standards. In addition, our strategies are closely aligned with national policy priorities, particularly in infrastructure development, positioning the Company for sustained growth and long-term resilience.
	• Such outcomes may adversely affect the Companys credit standing and overall reputation
Locational risk : Selecting an unsuitable manufacturing site can be both costly and difficult to reverse, creating significant challenges for the Company s operations and profitability.	• Lower investment returns, with adverse effects on margins and overall profitability	Low	• To mitigate the possibility of poor site selection, the Company conducts comprehensive feasibility studies that evaluate critical factors such as port accessibility, land acquisition costs, and regional demand trends.
	• Potential damage to brand reputation and market perception		These assessments ensure informed decision-making and reduce the likelihood of suboptimal investments.
	• Decline in organizational morale and reduced employee engagement		• The Companys proven track record of consistent profitability and sustained growth across its manufacturing facilities highlights the effectiveness of its strategic choices. This performance demonstrates operational excellence in site selection and resource deployment.
Demand risk for emerging products:	• Exposure to unpredictable demand cycles may cause fluctuations in plant utilization	Low
There is a significant possibility that demand for new product categories may fall short of initial projections, which could affect revenue generation and overall growth prospects.	• Revenue streams could become volatile, leading to reduced predictability in performance		• The Company follows a focused strategy in product selection, targeting underserved segments and leveraging emerging market trends. This disciplined approach has consistently enabled the Company to build a strong foothold in niche markets.
			• With Indias economy expanding steadily, the Company remains confident that its product portfolio will retain relevance and deliver sustained growth. This anticipated momentum is expected to offset potential risks associated with weaker demand for emerging products.
Competition risk : Heightened competition from rival players, particularly in cargo shipments, poses a potential threat to the Companys revenue streams and market share.	• Intense market rivalry could constrain growth and compress profit margins	Low	• Century Plyboards maintains the largest share of Indias organized interior infrastructure market, supported by its robust production capacity and cost-efficient operations.
	• Demand for services may decline, accompanied by pricing pressures that erode profitability		• The Company has also cultivated a strong reputation for delivering premium, durable, and aesthetically appealing interior solutions that align with evolving customer preferences, reinforcing its competitive edge.
Geographic risk : The Companys regional concentration exposes it to climate and weather- related disruptions, which may affect resource availability and operational continuity.	• The Company has established a comprehensive risk management framework to identify, evaluate, and mitigate weather-related challenges across its operating regions.	Low	• Prior to finalizing manufacturing sites and resource access points, the Company undertakes extensive, data-driven analysis to ensure minimal exposure to weather- related interruptions.
	• To safeguard business continuity, contingency plans and proactive measures have been developed to minimize disruptions and maintain smooth logistics.		• To date, the Company has not encountered any productivity setbacks due to weather conditions, underscoring the strength and effectiveness of its proactive risk management practices.
	• With a strong focus on sustainability and responsible resource utilization, the Company is well-prepared to manage climate-related risks, reinforcing stakeholder confidence and trust.
Project management risk : Delays in completing projects can adversely affect the Companys reputation and market standing, creating significant risks for operations and profitability.	• Project delays present a dual challenge: they can reduce revenue streams while simultaneously increasing costs, potentially jeopardizing the long-term viability of the project.	Low	• The Companys integrated methodology— covering resource evaluation, land acquisition, construction preparedness, technical assessments, and supply chain coordination— has enabled faster project execution, consistently surpassing industry standards.
			• Drawing on the extensive expertise of its experienced management team, the Company ensures projects are commissioned on time and within budget, effectively minimizing risks linked to delays and cost escalations
Risk of receivables: Challenges in collecting payments from established customers can adversely affect receivables and revenues, thereby impacting liquidity and overall financial stability.	• Weak sales performance may result in delayed collections, customer defaults, and the need for provisions or write- offs	Low	• The Company has consistently partnered with reliable customers, ensuring steady cash flows and minimizing the incidence of payment defaults.
	. • Limited visibility of revenue streams could heighten sales-related risks and create uncertainty around future cash inflows.		• In FY 2025-26, the receivables cycle stood at 41 days, maintaining stability and underscoring disciplined receivables management.
Debt repayment risk: Failure to meet debt repayment or servicing obligations could seriously harm the Companys reputation, restrict growth opportunities, and trigger financial instability.	• Inability to honor debt commitments may have significant consequences, including deterioration of creditworthiness and reduced access to future borrowings on favorable terms.	Low	• Over nearly four decades of operations, the Company has consistently maintained a debt- free balance sheet and has never defaulted on payments to lenders.
			• In FY 2025-26, the Company reported a strong interest cover of 7.57, reflecting its minimal debt exposure and reinforcing financial resilience.
	• Such outcomes could damage the Companys reputation, weaken business prospects, and compromise long-term financial stability and success.
People risk: The Company faces the challenge of retaining and attracting skilled professionals, which could affect operations, productivity, and overall competitiveness.	• Such talent gaps may create a cascading effect, limiting the Companys ability to harness expertise, eroding brand equity, reducing productivity, and ultimately impacting profitability.	Low	• The Company has a strong track record of engaging and retaining highly skilled professionals. Recognized as an employer of choice within the industry, it provides exceptional opportunities for both career advancement and personal development, enabling it to consistently attract and retain top talent.
Environmental risk : Failure to comply with global ESG standards could adversely affect the Companys reputation, regulatory standing, and financial performance	• Inability to meet environmental requirements may result in reputational setbacks, attracting criticism and scrutiny.	Low	• The Company has invested significantly in reducing its carbon footprint, going beyond regulatory requirements to ensure long-term environmental sustainability.
	Environmentally conscious customers, particularly OEMs, could reconsider partnerships and shift toward more sustainable competitors.		• In FY 2025-26, 26% of the Companys electricity needs were met through renewable energy sources, underscoring its commitment to sustainable operations.
Safety risk:	• Weak or insufficient safety measures may result in accidents and incidents, harming the Companys reputation, brand equity, and customer confidence, ultimately reducing market share.	Low	• The Company places strong emphasis on safety, investing significantly in mechanization to reduce risks in both manufacturing and transportation activities.
Inadequate safety standards can have serious repercussions across manufacturing and transportation operations, creating risks for employees, customers, and the business overall	• Workplace accidents leading to injuries could lower employee morale, diminish productivity, and disrupt operations, with negative consequences for financial performance.		• A safety-first culture has been embedded across the organization, supported by comprehensive training programs and well-defined operating procedures that ensure employees are fully equipped and committed to maintaining rigorous safety standards.
Increased investment requirements risk: Rising investment demands may place pressure on the Companys Balance Sheet, potentially affecting its ability to meet short-term financial commitments.	• Higher investment requirements could strain liquidity and weaken leverage ratios, increasing the risk of a credit rating downgrade.	Low	• The Company maintains ample liquidity to support ongoing growth initiatives without compromising Balance Sheet strength or relying on debt financing.
	• Such financial stress may elevate funding costs and create challenges in securing capital for future projects, ultimately constraining growth prospects.		• Its near debt-free position reinforces financial stability and resilience, helping preserve or enhance credit ratings and ensuring cost-efficient access to resources for future investments.
Innovation risk : A lack of innovation or failure to introduce new products could weaken brand equity, reduce competitiveness, and result in loss of market share.	• Inconsistent product launches may lessen the Companys appeal to trade partners, leading to reduced engagement and negatively affecting brand reputation and customer loyalty.	Low	• The Companys dedicated R&D team actively drives innovation, consistently developing and rolling out new products. This forward-looking approach strengthens relationships with trade partners and end-users, reinforcing brand reputation and sustaining customer loyalty.
Distribution risk : Dependence on a single geographic region for revenue exposes the Company to localized market downturns, which could restrict growth and affect overall performance.	• Heavy reliance on one region in India creates vulnerability; a slowdown in demand there could impede nationwide expansion.	Low	• Centurys products are distributed nationwide through 26 marketing offices, ensuring coverage across nearly all major cities and townships.
	• Over time, this may limit the Companys ability to capture rising demand across other regions, thereby constraining its overall market potential.		• The Company also maintains a strong international footprint, with operations spanning more than 19 countries, reducing dependence on any single market.
Forex fluctuation risk: Volatility in foreign currency exchange rates can materially affect the Companys financial performance, influencing import costs, export revenues, and overall profitability.	• Currency fluctuations pose a significant challenge, potentially eroding margins by increasing import expenses, reducing export earnings, and weakening competitiveness in global markets.	Medium	• The Company actively monitors its foreign exchange exposures and employs hedging strategies to reduce the impact of currency volatility.
			• This disciplined approach enables the Company to selectively extend credit periods to overseas buyers while effectively managing long-term currency risks, thereby safeguarding financial stability and protecting profitability.

Human resources and industrial relations

Century Plyboards places strong emphasis on cultivating a supportive and engaging workplace environment. The Company follows a thoughtful approach to recruitment, complemented by structured training programs and ample avenues for career advancement. During the year under review, a wide range of training initiatives were carried out to strengthen both technical expertise and behavioral competencies, reinforcing a culture of continuous learning and professional growth.

The organization embraces diversity and maintains a collaborative relationship with its factory workforce, which includes a balanced mix of younger professionals and seasoned employees. As of 31st March 2026, the Company employed 8119 permanent staff members along with 5811 non-permanent employees, reflecting its commitment to building a stable and motivated workforce.

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 systems carry multiple internal checks and balances that maintain transparency, accuracy, and accountability across all operations, and corrective steps are taken wherever required to further improve operational efficiency. The Company holds ISO 9001 and ISO 14001 certifications, reflecting its commitment to quality and environmentally responsible practices. During the year, we also strengthened our information security framework, and the process of obtaining ISO 27001 certification is underway and expected to be completed by July 2026.

During the year under review, we successfully implemented SAP S/4HANA, an advanced enterprise resource planning system, across the organisation. This has brought the management of our materials, production processes, sales and distribution, finance, maintenance, and quality control onto a single, integrated platform. The system provides realtime analytics and insights into costing and profitability across products and divisions, enabling faster and better-informed business decisions. We have further enhanced the platform with intuitive SAP Fiori interfaces and have begun deploying artificial intelligence-led use cases to improve efficiency and decision-making.

We continue to operate a robust supply chain management system that helps us manage procurement, planning, dispatches, and delivery confirmations efficiently. To improve the dealer experience, dealers can interact with us over WhatsApp, place orders through a mobile app, and easily track their dispatches, billing, receipts, and outstanding balances. We have also introduced internal digital initiatives, including a Travel and Expense Management portal, to strengthen governance and ease of doing business. Collectively, these initiatives enhance transparency, responsiveness, and accountability across 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, 31st July, 2026	Chairman & Managing Director