Genus Paper & Boards Ltd Management Discussions

The Management Discussion and Analysis Report pertaining to the financial condition and operational results contains forward-looking statements that are based on certain assumptions and expectations of future events. While the Company believes these assumptions and expectations to be reasonable, there can be no assurance that they will prove accurate or materialize as anticipated. Although the Management has considered various risk factors in its assessment, future uncertainties may arise beyond the scope of current perceptions or projections.

INDIAN ECONOMY – ITS OUTLOOK AND RECENT DEVELOPMENTS

India is primarily a domestic demand-driven economy, with consumption and investments contributing to 70% of the economic activity. With Indias economy showing resilient growth, supported by strong domestic demand, policy reforms, and a healthy investment pipeline, several new projects and developments are underway across key sectors. According to World Bank, India must continue to prioritize lowering inequality while also putting growth-oriented policies into place to boost the economy. In view of this, there have been some developments that have taken place in the recent past.

Indias economic outlook remains robust, supported by strong macroeconomic fundamentals, resilient domestic demand and sustained investment momentum. The economy continues to rank among the fastest-growing major economies globally, driven by broad-based expansion across manufacturing, services and infrastructure, alongside steady improvement in industrial and business activity.

A stable external position, supported by a manageable current account balance and consistent capital flows, reinforces confidence in Indias long-term growth trajectory. Despite evolving global uncertainties, investor interest remains intact across key sectors, backed by policy stability and structural growth drivers.

Domestic demand continues to act as a key anchor, supported by stable inflation, rising mobility and travel activity, healthy tax collections and strong participation from domestic institutional investors. Ongoing government initiatives to boost manufacturing, innovation, renewable energy and food security are further strengthening the foundation for sustained growth.

Over the years, the Indian government has introduced many initiatives to strengthen the nations economy. The Indian government has been effective in developing policies and programmes that are not only beneficial for citizens to improve their financial stability but also for the overall growth of the economy. Over recent decades, Indias rapid economic growth has led to a substantial increase in its demand for exports. Besides this, a number of the governments flagship programmes, including Make in India,

Start-up India, Digital India, the Smart City Mission, and the Atal Mission for Rejuvenation and Urban Transformation, are aimed at creating immense opportunities in India.

PULP AND PAPER INDUSTRY IN INDIA

The pulp and paper industry is one of the key industrial sectors contributing to the Indian economy. India ranks among the worlds top 15 paper producers and is the fastest-growing major paper market globally. Domestic production reached about 25 million tonnes per year across more than 850 paper mills, of which 526 are currently operational. The sector is the countrys fifth-largest industrial segment by contribution and supports about 5,00,000 direct jobs. This industry is mainly driven by the packaging segment, which accounts for over half of the sectors revenue. Paper products serve a wide range of applications—from writing and printing to packaging, hygiene products and disposable items such as paper plates, paper cups, etc.

GROWTH, OPPORTUNITIES AND THREATS

Indian paper industry comprises of both opportunities and challenges, though it has gone a major transformation in the last few years with going up to sustainability driven and becoming far more technologically advanced, still there are some of the challenges which are faced by paper manufacturers. Whereas growth is majorly fueled by increasing demand, government initiatives and technological advancements, particularly in sustainable products and packaging. However, rising raw material costs, supply chain issues and market competition pose certain threats. Adapting to digital disruption and focusing on sustainability are crucial for long-term success. Additionally, the industrys environmental impact and sustainability concerns pose significant challenges, requiring companies to adopt eco-friendly practices and reduce their carbon footprint.

Major Opportunities-

• E-commerce & Packaging Boom: Surging online retail and packaged food demand create massive needs for kraft paper and paperboards, etc.

• Plastic Bans: Government regulations against single-use plastics drive sustainable paper-based packaging alternatives.

• Rising Literacy: Higher educational enrollment and government textbook schemes expand writing and printing paper markets.

• Agro-residues: Utilizing alternative raw materials like bagasse and wheat straw reduces wood dependency and helps curb stubble burning.

Major Threats-

• Raw Material Scarcity: Chronic domestic shortages of wood, bamboo, and low local waste paper collection rates force heavy reliance on imports.

• Cost Volatility: Unpredictable fluctuations in global pulp prices, freight rates, and energy (coal/power) costs squeeze profit margins.

• Cheap Imports: Influx of low-cost paper and paperboards from neighboring ASEAN and international markets undercuts domestic manufacturers.

• Environmental Pressures: High water consumption and strict pollution standards classify mills under intensive regulatory scrutiny.

OUTLOOK

The paper and packaging industry in India has emerged as a key driver of innovation and value creation across manufacturing sectors, particularly in FMCG, agriculture, and food processing. Packaging now ranks as the fifth-largest sector of the Indian economy, expanding rapidly at 22-25% annually. This growth is fueled by rising middle-class consumption, boom in e-commerce, improvements in supply chains, and an increasing emphasis on food safety and quality. Indias food processing sector is adopting smart and innovative packaging, boosting food safety and positioning the country as a global hub for packaging materials. During FY26, Indias paper, paperboard and newsprint trade remained strong, with imports reaching 2,552.80 thousand tonnes and exports standing at 1,536.50 thousand tonnes across major grades, including writing and printing paper, kraft paper, coated paper and newsprint. The trade pattern reflects continued demand from packaging, printing and tissue segments, supported by growth in manufacturing, consumer goods and e-commerce activities. The strong export performance of value-added paper grades and sustained import demand for specialised paper products highlight the sectors expanding integration with global markets and its growing role in supporting Indias packaging and printing ecosystem.

RISKS AND CONCERNS

The Company is exposed to varied risks both within and outside its operational domain. To proactively track, control, manage and mitigate these risks, a structured framework of systems, procedures and review mechanisms has been implemented. As part of its comprehensive risk management policy, the Company follows an integrated approach to risk assessment and mitigation, ensuring continued vigilance and preparedness.

Given that the paper industry is classified among the highly polluting sectors, the Company remains committed to environmental responsibility. Both of its manufacturing units operate in full compliance with the zero-discharge policy and consistently adhere to the provisions of the Environment Protection Act, 1986 and other applicable environmental regulations.

COMPANYS PERFORMANCE-PRESENT AND FUTURE

The Company has taken certain measures to ensure smooth and uninterrupted continuation of operations, with a strategic focus on preparedness for unforeseen circumstances. It has implemented comprehensive cost control initiatives across the organization, aimed primarily at preserving liquidity. Furthermore, the Company successfullyfulfilledits business commitments and financial obligations during the previous financial year.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

(Rs. in Lakh)

The Company posted Net sales of Rs. 93,996.78 Lakh and the Net profit after tax stands atRs. 1457.69 Lakh.

Ratios:

The Company has maintained a healthy capital structure as is evident from its debt-to-equity ratio which is as follows:

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has put in place strong internal control system to ensure its assets are protected and all transactions are properly approved, recorded and reported. Each year begins with a well-structured business plan, followed by detailed quarterly budgets for revenue and capital. These budgets are used to regularly compare actual performance, and any differences are promptly addressed.

The internal control system is backed by regular reviews from management and independent chartered accountants, who assess how well these controls are working. Their reviews help confirm that the systems in place are effective and reliable.

Internal audits cover various operational processes and ensure that policies and procedures are being followed, important systems are functioning properly, and company assets are safe. Audit reports are submitted to the Audit Committee, which reviews the internal control system and discusses audit findings and recommendations. Additionally, the Statutory Auditors regularly engage with the Audit Committee to share their insights and track progress on improvements.

HUMAN RESOURCES

The Company is supported by a dedicated, well-established and highly satisfied workforce. Recognizing that human capital is one of its most valuable assets, the Company consistently endeavors to attract and retain top-tier professional and technical talent.

It places strong emphasis on strategic human resource management and skill development, firmly believing that a capable and motivated workforce is the cornerstone of operational excellence and sustainable business growth.

These people-centric practices have enabled the Company to maintain an attrition rate below the industry average. The management follows a process-driven approach, investing in regular training and capacity-building initiatives through succession planning, on-the-job learning and focused workshops. The progress achieved during the year is a direct reflection of the collective commitment and hard work of the entire team.

Industrial relations remained harmonious throughout the year. Safety, welfare and employee development across all levels continue to be areas of key focus, reinforcing the Companys commitment to building a resilient and future-ready organization.

CAUTIONARY STATEMENT

Statements in this “Management Discussion and Analysis” are describing the Companys “forward looking statements” within the meaning of applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include global and Indian demand supply conditions, finished goods prices, raw material availability and prices, cyclical demand, changes in Government regulations, environmental laws, tax regimes, economic developments within India and abroad and other factors such as litigation, industrial relations and other unforeseen events. The Company assumes no responsibility in respect of forward-looking statements made herein which may undergo changes in future on the basis of subsequent developments, information or events.