Simplex Papers Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian economy continues to demonstrate resilience despite geopolitical uncertainties, inflationary pressures and volatile global economic conditions. Supported by strong domestic consumption, infrastructure spending and policy reforms, India remains one of the fastest-growing major economies in the world. The continued emphasis on manufacturing, logistics, infrastructure development and ease of doing business is expected to support longterm economic growth.

The paper industry plays an important role in the Indian economy by catering to diverse sectors such as education, packaging, publishing, FMCG, e-commerce and industrial applications. The industry continues to witness steady demand driven by growth in organised retail, rising literacy levels, increasing demand for sustainable packaging solutions and expansion of e- commerce activities.

The increasing focus on environmentally sustainable products and restrictions on single-use plastics have created additional opportunities for paper and paperboard products. Demand for packaging grades such as kraft paper, duplex board and speciality paper is expected to remain strong in the coming years.

OPPORTUNITIES AND THREATS

Opportunities

The Indian paper industry continues to offer significant growth opportunities due to:

- Growing demand for eco-friendly and sustainable packaging solutions.

- Increasing literacy levels and educational initiatives.

- Expansion of organised retail and e-commerce sectors.

- Rising demand for paper-based alternatives to plastic products.

- Growth in FMCG, food processing and pharmaceutical sectors requiring quality packaging materials.

- Low per capita paper consumption in India compared to global averages, indicating substantial growth potential.

Threats

The industry continues to face certain challenges and threats, including:

- Limited availability of quality raw materials.

- Volatility in prices of wood, pulp, waste paper and other inputs.

- Rising energy and transportation costs.

- Increasing environmental compliance requirements.

- Competition from imported paper and paper products.

- Increasing digitisation and adoption of electronic media reducing demand for certain categories of paper.

RISKS AND CONCERNS

The Companys risk management strategy encompasses the proper and in-depth identification, assessment and prioritization of risks, followed by speedy mobilization of resources to minimize, monitor and control the probability of unfortunate events.

The major risks faced by the industry include:

- Availability and pricing of raw materials.

- Regulatory and environmental compliance requirements.

- Market competition and pricing pressures.

- Changes in consumer preferences and technological advancements.

- Macroeconomic and geopolitical uncertainties impacting business sentiment.

INTERNAL CONTROL SYSTEM AND ADEQUACY

The Company has proper and adequate internal control system to ensure maintenance of proper accounting records, their accuracy and that all the assets are safeguarded from loss or damages.

FINANCIAL PERFORMANCE

During the financial year ended March 31, 2026, the Company continued to focus on operational efficiency, cost optimization and strengthening of internal processes.

The financial performance of the Company is discussed in detail in the Financial Statements forming part of this Annual Report.

KEY FINANCIAL RATIOS

The Key Financial Ratios for the financial year ended 31st March 2026 are as under:

Particulars	2025-26	2024-25
1 Debtors Turnover	-
2 Inventory Turnover	-
3 Interest Coverage Ratio	-
4 Current Ratio	0.11	0.11
5 Debt Equity Ratio	-1.03	-1.03
6 EBIDTA Margin (%)	-	-
7 Net Profit / (Loss) Margin (%)	-	-
8 Return on Net Worth (%)	-0.94	-1.33

The Company had no operating business during the current and previous year; accordingly, the Debtors Turnover Ratio, Inventory Turnover Ratio, Interest Coverage Ratio, EBITDA Margin and Net Profit Margin are not applicable. The Current Ratio and Debt-Equity Ratio remained unchanged, while the Return on Net Worth improved due to a reduction in the net loss during the year.

CAUTIONARY STATEMENT

Statements in this report on Management Discussion and Analysis, describing the Companys objectives, projections, estimates, expectations or predictions may be forward looking, considering the applicable laws and regulations. These statements are based on certain assumptions and expectation of future events. Actual results, could, however differ materially from those expressed or implied