Sabar Flex India Ltd Management Discussions

Annexure-C

1. INI?US I BY STRUCTURE AND

The Indian packaging industry is one of the fastest-growing sectors. This growth is driven by rising demand across sectors such as FMCG, retail, pharmaceuticals, consumer electronics, and e-commerce. A notable shift toward convenience, aesthetics, and environmental sustainability has reshaped packaging preferences. The flex and plastic-based packaging segments, in particular, continue to hold a dominant market share due to their versatility, affordability, and lightweight nature.

Sabar Flex India Limited operates in the flexible packaging segment, with a strong presence in PVC flex banners, polyfilms, multilayer laminates, and custom-printed rolls, catering to industries requiring durable, high-quality, and customized solutions.

Government initiatives such as "Make in India", increased infrastructure spending, and rising demand from Tier II and Tier III cities have further supported the packaging sectors upward trajectory. Meanwhile, regulatory focus on sustainability and reduction of single-use plastics has accelerated the demand for recyclable and biodegradable alternatives — a space where the Company is making strategic R&D investments.

2. OPPORTUNITIES AND THREATS:

Opportunities

Sustainable Packaging: With increasing environmental concerns, the shift to eco-friendly materials offers significant growth avenues. The Company is already exploring options in bio-based films and recyclable laminates.

Digital Printing & Customization: Growing demand for personalized packaging solutions is creating a niche for innovative, digitally printed packaging solutions.

Fxport Potential: Rising global demand for Indian-manufactured packaging material provides an opportunity to lap into untapped markets, especially in Africa, Middle East, and Southeast Asia.

Growth of E-Commerce: The surge in online retail is fueling demand for secondary and tertiary packaging materials, where Sabar Flex India Limited sees immense opportunity.

Threats

Raw Material Volatility: Prices of key inputs like PVC resins and polymer granules are subject to global price fluctuations and foreign exchange volatility.

Regulatory Challenges: Ongoing changes in environmental laws and bans on cerlain plastic categories could affect product lines if not aligned proactively.

Competition: Both domestic and international players pose challenges in terms of pricing, innovation, and customer retention.

Technological Obsolescence: Rapid technological advancements may render certain manufacturing processes outdated unless theres continuous upgradation.

3. SJEGMENT - WJSE QR PRQDU CT WISE PJERFQEMAN CE;

Sabar Flex India Limited operates primarily in the following product segments:

• PVC Flex Banners: Widely used in advertising and branding, this remains our core revenue generator.

• Laminated Pouches and Rolls: Catering to FMCG and food sectors, offering durability and moisture resistance.

• Shrink Films & Wrappers: Increasing demand from beverage and pharmaceutical sectors has strengthened this segment.

• Customized Multilayer Films: Growing traction in agrochemical and industrial goods packaging.

4. OUI.L.QQK;

The outlook for the packaging sector remains highly positive in the medium to long term. Key factors influencing future growth include:

• Enhanced demand from urban and rural markets due to increased product consumption.

• Rising investments in smart packaging, sustainability, and digital transformation.

• Technology-driven packaging automation to reduce cost and improve efficiency.

• Shift towards consumer-friendly designs and shell-ready packaging.

Sabar Flex India Limited is aligning its strategy to capture these trends by:

• Investing in R&D and automation.

• Expanding product innovation in compostable and bio-degradable film options.

• Strengthening the export pipeline.

• Exploring strategic partnerships and capacity expansion.

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The Company faces the following key risks:

• Environmental Risk: Regulatory restrictions on plastics could impact die Companys traditional product range. Mitigation includes adoption of green technologies and product diversification.

• Operational Risk: Supply chain disruptions, energy price increases, or labor issues can affect productivity.

• Technological Risk: Failure to adopt new manufacturing techniques or materials may lead to loss of market relevance.

• Financial Risk: Interest rate hikes, credit crunch, or cash flow mismatch can impact working capital availability.

The Company has implemented risk mitigation protocols through scenario planning, supplier diversification, hedging practices, and compliance audits.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Sabar Flex India Limited has in place an effective internal control system designed to ensure:

• Accuracy and completeness of accounting records

• Efficient and safe use of Company resources

• Prevention and detection of fraud and errors

• Timely preparation of financial reports

The internal audit function is carried out by an independent firm of Chartered Accountants and reviewed by the Audit Committee periodically. Action plans are put in place for all audit findings.

7. FINANCIAL PEBf.QRMAN.CE WlUl RESPECT. IQ..QPIBATIQNAL PERFORMANCE

Company takes pride in the commitment, competence and dedication shown by its employees in all areas of business. Your Directors wish to convey their gratitude and place on record their appreciation for all the employees at all levels for their hard work, solidarity, cooperation and dedication during the year. Industrial relations were cordial throughout the year.

Sr. Ra Ratio	Methodology	For the yearended
No.		31.03.2025	31.03.2024
1 Current Ratio	Current Assets over	2.41	2.11
	Current Laibilities
2 Deht Equity Ratio	Total liabilities over Total Shareholders Equity	1.07	0.95
3 Debt Service Coverage Ratio,	Net Operating Income over Debt Service	0.20	0.65
4 Return on Equity Ratio (ROE)	Net Income(annual) over Total Assets	0.01	0.07
5 1nventory turnover ratio	Cost of Goods Sold over Avg. Inventory	6.76	5.58
6 Trade Receivables turnover ratio	Net credit sales over Average Accounts Receivable	4.41	5.31
7 Trade payables turnover ratio	Credit Purchase over Average Accounts Payable	47.02	34.90
8 Net capital turnover ratio	Net Sales over Average Total Assets	2.14	2.15
9 Net profit ratio	Net Profit over Sales	0.00	0.03
10 Return on Capital employed	EBIT over Total Assets - Total Current Liabilities	0.09	0.26
11 Returnon investment	Net Profit over Cost of Investment	0.04	0.25

Notes:

KBIT - Earnings before interest and taxes

PBIT - Profit before interest and taxes including other income

EBITDA - Earnings before interest, taxes, depreciation and amortisation.

PAT - Profit after taxes

Debt includes current and non-current lease liabilities

Adjusted expenses refers to sub-contractor charges and other expenses net of non-cash expenses and donations

Capital employed refers to total shareholders equity and debt.

Investments includes non-current investment, current investment and margin-money deposit

DSCR, ROCE and Inventory Turnover Ratio of Previous year are recalculated according to current year

methodology.

8. HUMAN RESOURCES AND INDUSTRIAL RELATIONS:

The Company regards its human capital as a vital asset. HR policies are aligned to ensure:

• Continuous upskiliing through technical and behavioral training

• Fair and transparent appraisal systems

• Health, safety, and welfare measures

• Employee engagement initiatives

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The Company is investing in R&D to:

• Develop eco-friendly substitutes to traditional packaging

• Reduce material wastage and carbon footprint

• Explore automation in converting and printing processes

Sabar Flex is committed to environmental sustainability and adheres to all statutory environmental regulations. Initiatives include:

• Use ol solvent-less lamination processes

• Rainwater harvesting and energy-efficient machinery

• Regular monitoring of waste disposal systems

10. Cautionary Statement

Certain statements made in this Report may be "forward-looking statements" within the meaning of applicable laws and regulations. These are based on certain expectations, estimates, and projections. Actual performance may differ due to economic conditions, government policy changes, force majeure events, and other risks.

The Company does not undertake to update these forward-looking statements publicly.

	FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
	Sd/-	Sd/-
	HIKMATHAHADUR	HKCHARSINH HARISINH
	KRISHABAHADUR KUNWAR	CHAUHAN
Date: November 11 2025	Managing Director	Director
Place: Ahmedabad	DIN:00021010	D1N:09269744