Shree Krishna Paper Mills & Industries Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

India is one of the worlds fastest-growing economy and this rapid economic development has led to an increase in demand for various goods and services, including paper products. The four main segments of the industry i.e. writing and printing paper, newsprint paper, packaging paper & board and specialty paper serve diverse markets both domestically and internationally. The paper and pulp industry covers the manufacturing of paper and other paper products from raw materials. These raw materials include wood pulp and recycled waste paper. The pulp and paper industry plays a vital role in the Indian economy, offering employment opportunities to over 500,000 individuals. The rapid growth of the food & beverages packaging industry has increased the demand for pulp & paper; thereby, fuelling the market growth. Furthermore, the flourishing printing industry is also expected to drive the pulp & paper industry substantially.

There is a growing demand for paper and paper-based products in India. This trend reflects the essential nature of paper in various applications, from packaging to education. Indian population is around 15% of world population but consumes only 5% of the total paper produced in the world. Indias growing FMCG sector and high spending in education coupled with growth in organised retail and demand for better quality paper as well as more health consciousness of people etc., are triggering factors of growth prospects of Indian paper industry. The future of Indias pulp and paper industry is bright, with numerous opportunities for growth and innovation. Focusing on sustainability, efficiency and quality will be key to unlocking these opportunities and driving the industry forward.

The Indian paper industry is grappling with a significant challenge. The major challenges faced by paper industries are the rising cost of raw materials and excessive import of paper, in addition to the downfall in domestic market price. Addressing these challenges requires strategic planning, investment and development of sustainable products. Despite the challenges, the Indian pulp and paper industry is ripe with opportunities for growth and innovation.

Indias pulp and paper market is currently experiencing a significant transformation fuelled by a mix of economic, demographic and technological factors. The Indian paper industry is expected to see a period of recovery and growth driven by increasing demand for packaging and household paper products and a focus on sustainability. Despite the continued focus on digitization, Indias demand for paper is expected to rise in the coming years, primarily due to a sustained increase in thrust in rural education, growing ecommerce consumerism, increase in organized modern retailing and increasing use of documentation. Indias overall economic growth is a key factor influencing the paper industrys expansion. As the fastest-growing paper market worldwide, India is poised for significant expansion, aligning with the countrys economic growth

Risk management is deeply integrated with our strategy, governance, operations and decision-making processes. The main aim of risk management is to identify, monitor and take pre-cautionary measures in respect of the events that may pause risk for the business. It also acts to safeguard performance, protect stakeholder interests and uncover growth opportunities within acceptable risk thresholds. Your Companys risk management is continuously monitored and mitigation plans are made to overcome the potential challenges.

The Company has established robust and efficient internal control systems tailored to the scale of its operations and the complexities of the market it serves. These stringent and comprehensive controls ensure optimal utilization of resources, safeguarding the Companys assets and interests. They also ensure that transactions are properly authorized, recorded, and reported, with reliable checks and balances to maintain the consistency and accuracy of accounting data. In addition, internal auditors also regularly review internal control systems in business processes and verify compliance with relevant policies and procedures. Reports of internal audits are reviewed by the Companys senior management and are also comprehensively discussed in meetings of the Audit Committee. The audit committee reviews the adequacy of internal control systems, audit findings and suggestions.

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:-

During the year under review, the revenue from operations was increased to 16,870.84 lakhs against 14,435.22 lakhs in the last financial year. The Company has earned profit before exceptional items & tax of 194.84 lakhs against corresponding profit of 65.36 lakhs in the last year. Net profit after tax has been increased to 112.74 lakhs against corresponding profit of 38.04 lakhs in the last year. During the year under review, the Company has improved its performance.

The Company recognizes its employees as the cornerstone of its success, driving innovation, operational excellence and market leadership. The organisations human resources strategies are consistently aligned with a strong dedication to the principles of sustainability, the advancement of environmentally conscious operational practices and responsible corporate conduct. Our well-defined policies promote a positive work environment, enabling employees to perform at their highest potential and consistently deliver results. Employees are regarded as critical assets integral to organisational success, and commensurate investments are made in their professional development and overall well-being. The industrial relations within the Company have remained harmonious throughout the year. The Company had 270 employees on its payrolls as on March 31, 2025.

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:

Interest Coverage Ratio, Net Profit Margin and Return on Net Worth have been increased due to higher profitability in current year as compared to lower profitability in last year.

The Management Discussion and Analysis may contain some statements describing the Companys views of the industry, objectives, projections, estimates or expectations, which may be forward-looking statements within the meaning of applicable securities laws and regulations and are based on informed judgments and estimates. Actual results may differ substantially or materially from those either expressed or implied in the Statement depending on various factors that could affect the Companys business and financial performance. The Company undertakes no responsibility to publicly amend, modify or revise any forward-looking statements, whether as a result of any subsequent developments, new information, future events, or otherwise.