Kaka Industries Ltd Management Discussions

& JOINERY SECTOR (FY24–25)

Overview The Indian PVC/polymer-based furniture and joinery industry (PVC/uPVC/WPC/foam doors, panels & windows) is evolving into one of the fastest-growing segments within building materials. It leverages durability, cost-effectiveness, recyclability, and energy ef ciency, positioning itself as a sustainable alternative to wood and aluminium.

• Market Size & Demand: Indias PVC resin demand touched ~4.7 MMT in FY25, with 8% CAGR expected through FY27. Import dependence is projected to fall below 30% as new domestic capacities come online.

• End-use Applications: Housing, real estate upgrades, and institutional projects are driving demand for uPVC windows/doors, WPC/PVC panels, and foam sheets.

• Industry Structure: Transition from fragmented unbranded supply to organised, quality-driven players, supported by design innovations and compliance with building codes.

FY25 Performance & Trends

• Transitional Year: Early FY25 faced demand moderation due to PVC price volatility and a pause in project execution around the general elections.

• Margins Impacted: Resin price swings compressed spreads in H1 FY25; however, price stabilisation and higher domestic supply by late FY25 supported margin recovery.

• Volume Indicators: CRISIL projected 10 12% volume growth in PVC pipes in FY25-a positive demand proxy for downstream PVC pro les and panels.

• Exit Momentum: Improved retail activity and resumed housing spends helped the sector exit FY25 on a stronger footing.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES

The Company considers employees as its vital and most valuable assets. Your Company considers manpower as its assets and understands that people have been driving force for growth and expansion of the Company. Company has always remained an equal opportunity employer and has embedded these values in its employees. Manpower are being mentored to take on larger roles in the organisations. Through our learning and development initiatives, the Company continues to upskill our employees for their jobs. The Company is into process of continuous improvements based on feedback and inputs from multiple stakeholders, past experiences and industrys best practices for giving better employee experiences.

INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

Kaka has established a Comprehensive internal control framework designed to ensure the orderly conduct of its business, safeguard its assets, and maintain the integrity of its nancial reporting. These controls extend across all functions of the Company and are structured to promote operational ef ciency, ensure reliable accounting and nancial information, and support compliance with applicable legal and regulatory requirements.

The internal control environment is continually reviewed and enhanced to re ect evolving business requirements and industry standards. Internal audit processes are conducted independently and regularly, with oversight from the Internal Auditor, and ndings are reviewed by the Audit Committee of the Board. The Committee monitors the implementation of recommendations and ensures that corrective actions are taken in a timely manner.

Independent statutory auditors have, as part of their audit procedures, con rmed the adequacy of internal nancial controls over reporting. This structured and evolving system of internal controls re ects Kakas continued commitment to transparency, good governance, and the long-term con dence of all stakeholders.

CAUTIONARY STATEMENT

This Management Discussion and Analysis contains forward-looking statements that re ect the Companys current expectations regarding future events, business performance, and nancial results. These statements are based on certain assumptions and are subject to a range of known and unknown risks and uncertainties. Words such as "will", "should", "aim", "believe", "anticipate", "intend", "estimate" and other similar expressions are intended to identify such forward-looking statements. Actual results may differ materially from those expressed or implied due to a variety of factors including changes in market conditions, regulatory developments, economic conditions, and business performance. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise. Readers are advised not to place undue reliance on these statements and to refer to the Companys audited nancial statements and disclosures for a more comprehensive understanding of the risks and opportunities that may affect performance