Shree Krishna Paper Mills & Industries Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

India continued to be one of the worlds fastest-growing large economies supported by resilient domestic demand, sustained government-led infrastructure investment and ongoing structural reforms. Several constructive developments throughout the year have strengthened the foundation for Indias medium to long-term economic growth. The paper industry is one of the oldest industries in India and since the first mill was set up in the country, the number of paper mills has increased substantially and particularly in the recent past, the number of mills and volume of production have also gone up. The pulp and paper industry in India plays a key role in supporting education, packaging and hygiene needs. It relies on wood, agro residues and recycled paper. Though challenged by resource constraints and environmental concerns, the industry is steadily moving towards more sustainable and efficient practices. The Indian paper industry is expected to grow and evolve in the coming years.

The Indian pulp and paper industry is ripe with opportunities for growth and innovation. The rising demand for paper products in India presents substantial growth potential for the Company. This surge is fuelled by factors such as population growth, greater awareness of environmental sustainability and the ongoing expansion of the Indian economy. These dynamics collectively create a favourable environment for the Company to expand its operations and capture new market opportunities. Rising literacy, expansion of education, growth in organised retail, e-commerce packaging demand and sustainability-driven substitution of plastic have reshaped the industrys demand profile.The future is resilient, with investments shifting towards technological advancements, capacity expansion and energy-efficient operations to meet the rising demand.

The industry is expected to face margin pressures due to increasing input costs, cheaper imports, and new capacity additions. However, long-term prospects remain positive supported by increased demand for paper in various sectors and a shift towards sustainable, paper-based solutions.

The outlook for Indias paper industry remains highly promising supported by a growing population, rapid urbanisation and rising income. Indias pulp and paper market is growing fast, driven by the shift to eco-friendly products and rising demand for paper based packaging. Government bans on single-use plastics have boosted the use of paper in packaging for food, retail and e-commerce. At the same time, higher literacy rates and urban growth are increasing the need for papers. The industry is investing in new technologies to improve efficiency and reduce pollution. Indias overall economic growth is a key factor influencing the paper industrys expansion. With low per-person paper use compared to global levels, India has a lot of room to grow. The market is set to expand further, becoming more modern, sustainable and competitive globally.

Your Company has a robust Risk Management process to identify, evaluate and mitigate risks impacting business and to create transparency, minimise adverse impact on the business objectives and enhance the Companys competitive advantage. This also defines the risk management approach across the enterprise at various levels including documentation and reporting. The Company places strong emphasis on managing and mitigating these risks through a series of policies, procedures and control practices embedded within its financial reporting framework

The Company has implemented a robust internal control mechanism designed to ensure the efficient and secure execution of its operations. This system aims to prevent and detect fraud and errors, while maintaining accurate and complete accounting records. The primary objective of these controls is to provide reasonable assurance regarding proper accounting practices, safeguard the Companys assets from unauthorized use or loss and ensure compliance with relevant regulations. To further strengthen its internal control processes, the Company has engaged an independent external audit firm to serve as its internal auditors. These auditors are tasked with periodically assessing the effectiveness of the companys internal control measures. Their audit reports, along with management comments and observations are reviewed during audit committee meetings.

The financial statements of your Company have been prepared in accordance with the Indian Accounting Standard (Ind AS) specified under Section 133 of the Companies Act,

2013 and the applicable Rules, as amended from time to time and other applicable provisions. The salient parameters of financial performance are as under:- (Rs. in Lakhs)

During the year under review, multiple initiatives were launched to enhance plant sustainability which led to improve its operations. The revenue from operations was increased to Rs. 22,808.36 lakhs against Rs. 16,870.84 lakhs in the last financial year. The Company has earned profit before exceptional items & tax of Rs. 452.43 lakhs against corresponding profit of Rs. 194.84 lakhs in the last year. In addition, the Company has also earned exceptional item income of Rs. 2,025.75 lakhs resulting total profit after tax of

Rs. 1,944.69 lakhs against corresponding profit of Rs. 112.74 lakhs in the last year. Your Directors are hopeful for the improved performance in the coming year.

The Company recognises that the quality of its employees is crucial to its success and is dedicated to providing its workforce with the necessary skills to adapt to continuous technological advancements. To achieve this, the Company organises comprehensive training programs throughout the year, covering various areas such as technical skills, behavioural skills, business excellence, general management, advanced management, leadership skills, customer orientation, safety, values and code of conduct. The industrial relations within the Company have remained harmonious throughout the year. The Company had 284 employees on its payrolls as on March 31, 2026.

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in key financial ratios.

Following are the key financial ratios:

Reason for significant change:

i) Interest Coverage Ratio has been increased due to improved profitability in current year.

ii) Current Ratio has been increased due to higher current assets in current year.

iii) Net Profit Margin and Return on Net Worth have been increased due to improved profitability and exceptional income in current year.

Statements in this report on Management Discussion and Analysis relating to the Companys objectives, projections, estimates, expectations, or predictions, may be forward looking statements within the meaning of applicable security laws or regulations. These statements are based on certain assumptions and expectations of future events. Actual results could, however, differ substantially or materially from those expressed or implied in the Statement depending on various factors that could affect the Companys business and financial performance. The Company assumes no responsibility in respect of forward looking statements made herein which may undergo changes in future based on subsequent developments, information or events.