Star Paper Mills Ltd Directors Report

Directors Report 2025-26

Dear Shareholders,

The Directors of your company are pleased to present the Directors Report together with Audited Financial Results of the company for the financial year ended 31^st March, 2026.

1. FINANCIAL HIGHLIGHTS

Audited financial results for the financial year 2025-26 are summarised below:

AUDITED FINANCIAL RESULTS

		(Rs. in Crores)
Particulars	FY ended 31st March, 2026	FY ended 31st March, 2025
Profit before interest and depreciation	42.12	60.79
Interest and finance charges	0.93	0.96
Depreciation	6.97	6.39
Profit before Exceptional Items	34.22	53.44
Exceptional & non-recurring items	-	-
Profit before tax	34.22	53.44
Provision for Income Tax	1.47	12.30
Profit after tax (PAT)	32.75	41.14
Earning per share (EPS)- in Rupees	20.98	26.36

2. DIVIDEND & TRANSFER TO RESERVES

Considering the financial performance of the company for the financial year ended 31^st March, 2026 and Global Geo-political as well as economic situation, the Board of Directors is pleased to recommend a dividend of Rs. 2.50/- per equity share (25%) of Rs. 10/- each for the year 2025-26 subject to approval of the Shareholders at the ensuing Annual General Meeting.

The company has not transferred any amount of profits for the year to General Reserve.

3. STATE OF THE COMPANY AFFAIRS

Review of performance for the year 2025-26:

During the year subdued market conditions and competition from imports under FTA continued to prevail. These resulted in lower realizations as well as slightly lower Volume.

Apart from above, GST Council increased GST rates on paper from 12% to 18% w.e.f 22.09.2025 contrary to the Industry expectations. In addition, GST council announced Nil rate of GST with no Input Tax Credit (ITC) on Note Books, Graphic Books etc as well as Paper meant for these as against existing rate of 12% with ITC available. This made locally manufactured Paper less competitive for this end use.

Your company has been making continuous efforts to optimize product-mix based on market conditions/ requirements.

Capital Projects:

a) Turbine:

The installation and commissioning of 6.5 MV Turbine involving capex of Rs. 13.30 Crores is underway. After implemetation of the project, there would be substantial reduction in power costs along with reduction in carbon emissions.

b) Chlorine Dioxide (Clo2):

The installation and commissioning of Clo2 plant and resultant modifications in Bleach Plant having capital outlay of Rs. 30.95 Crores is underway. Post commissioning of the project, there will be increase in Pulp Brightness and strength. The commissioning of both the above projects is expected to complete by Dec26.

c) Solar power:

We have commissioned the Roof-top Solar panels of 80.32 kWp capacity involving project cost of Rs. 34.83 lacs. The project is generating 1.05 lacs units per annum. The project promotes green renewable energy generation and helps reducing CO2 emissions.

Amid various challenges, your company reported a Profit after tax (PAT) of Rs. 32.75 Crores for the year 2025-26 as against Rs. 41.14 Crores for the previous financial year.

There have been no material changes and/or commitments affecting the financial position of the company since the close of financial year till date of this report. Further, there is no change in nature of business of the company during the year under review.

Expectations for the year 2026-27:

The West Asia crisis due to ongoing war between Iran-USA-Israel threatens India with a major supply-side shock, elevating risks of stagflation, and higher trade deficits. Middle East region is a major destination for Indian Paper Exports which are also impacted. It is as yet unclear how long this will prevail and its final impact if any on Global paper trade and Indian Industry. We expect Domestic demand to grow in step with the Countrys economy but Global factors will impinge on Paper Industrys performance.

4. ANNUAL- RETURN EXTRACTS

Pursuant to Section 134(3) of the Companies Act, 2013, Annual Return in the prescribed format is available at https://starpapers.com/pdf/AnnualRetum31.03.2026.pdf

5. BOARD MEETINGS/AUDIT COMMITTEE

a) During the financial year ended 31^st March, 2026, four (4) meetings of the Board of Directors were held on 29^th May, 2025, 13^th Aug., 2025, 13^th Nov., 2025 and 13^th Feb., 2026.

b) The Company has constituted the Audit & Risk Management Committee of the Board pursuant to Section 177 of the Companies Act, 2013 and its terms of reference are in conformity with SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The composition of Committee is mentioned in the Corporate Governance Report.

6. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review is presented in a separate section forming part of the Annual Report for 2025-26.

7. VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES

Pursuant to Section 177 of the Companies Act, 2013, the company has established a Vigil Mechanism for directors and employees to report their genuine concerns to the company. The company oversees this Vigil Mechanism through the Audit & Risk Management Committee of the Board.

8. ENVIRONMENT, POLLUTION CONTROL AND SAFETY

Your Company is committed to provide safe working conditions and healthy environment to its stakeholders. The company is accredited with IS/ISO 9001:2015, IS/ISO 14001: 2015, and IS/ISO 45001:2008 which signifies adoption of integrated quality, environment and safety management systems to harmonize Industrial activities with environmental preservation with letter and spirit. Your company has the required environmental clearances from the Government Departments as per the statutory requirements.

STAR has been conferred the following awards during the financial year 2025-26:

i) Four Gold & One Silver Awards in Chapter Convention on Quality Concepts held at Chandigarh organized by Quality Circle Forum of India, Hyderabad.

ii) Par Excellence Awards to all the five teams in 39^th National Quality Circle Conventions held at Noida (up) organized by Quality Circle Forum of India, Hyderabad.

iii) Award for outstanding achievement in Rural Development in 11^th CSR Awards, 2025 by Greentech Foundation, New Delhi.

iv) Award for outstanding achievement in Environment Protection in 24^th Global Environment & sustainability Awards, 2025 by Greentech Foundation, New Delhi.

9. SOCIAL FARM FORESTRY

Your company continues to foster pulpwood plantations with active co-operation of the farmers. As in the past, momentum of social farm forestry program was maintained during the year. This program leads to enhanced rural incomes besides facilitating raw material availability to the company.

10. FIXED DEPOSITS

The company has not invited any fixed deposits during the year and as such there has been no default in repayment of deposit or payment of interest thereon during the year. There were no outstanding fixed deposits as on 31^st March, 2026. (Rs. Nil as on 31^st March, 2025).

The company is in compliance with provisions of the Companies Act, 2013 and rules made thereunder in respect of deposits.

11. INTERNAL CONTROLS

The company has adequate internal control systems in place on the basis of which financial accounting is done and periodically financial statements are prepared. Such Internal control systems are adequate and operating effectively.

During the year, no instance of any fraud was reported by the statutory auditors of the company under section 143(12) of the Companies Act, 2013.

12. REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR)

The company has adopted a policy on Corporate Social Responsibility (CSR) to fulfill its obligation towards the society. The CSR Policy may be accessed on the companys website at http://www.starpapers.com. The key philosophy of the Companys CSR initiative is to promote development through social and economic transformation. The composition of Committee is mentioned in the Corporate Governance Report.

The Report on CSR activities undertaken during the financial year ended 31^st March, 2026 is provided as Annexure -I.

13. directors/key managerial personnel/others

i) Pursuant to Section 152 of the Companies Act, 2013, Mrs. Pragya Jhunjhunwala (DIN-02315132) shall retire by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment. The Board recommends her re-appointment as a Director of the company.

ii) The shareholders of the company at their 86^th AGM held on 25^th Sept., 2025 have re-appointed Mr. Madhukar Mishra (DIN-00096112) as Managing Director of the company w.e.f. 1^st July, 2025 for a period of five (5) years.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013 and SEBI Listing Regulations, 2015. The Board is of the opinion that the Independent Directors of the company hold highest standards of integrity and possess requisite expertise and experience required to act as Independent Directors. The companys familiarization program for Independent Directors is posted on the website of the company and can be accessed at https:// starpapers.com /pdf/familarisation_prog1.pdf

14. NOMINATION AND REMUNERATION COMMITTEE/POLICY

The Board of Directors has constituted a Nomination & Remuneration Committee which follows the companys policy on directors appointment and remuneration including criteria for determining qualification, positive attitudes, independence of a director and other matters provided under section 178 (3) of the Companies Act, 2013.

The gist of companys policy on nomination and remuneration is as under:

The Committee shall consider ethical standards of integrity, qualification, expertise and experience for appointment of Directors/KMP etc. and recommend to the Board of Directors. Directors/ KMP etc shall be appointed as per the procedure laid down in applicable laws.

The Committee will recommend the remuneration to be paid to Directors/KMP etc. requiring Committee approval as per statutory provisions. The level and composition of remuneration so determined by the Committee shall be reasonable and sufficient to attract, retain and motivate the appointee(s). Nomination and Remuneration Policy of the company can be accessed from the company website -www.starpapers.com.

15. LOAN, GUARANTEE, INVESTMENTS ETC.

The particulars of loan, guarantees or investments under section 186 of the Companies Act, 2013 have been given in the financial statements.

16. subsidiary/joint ventue/associate companies

No company has become or ceased to be the companys subsidiary/joint venture/associate company during the year.

17. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars regarding energy conservation, technology absorption and foreign exchange earnings/outgo pursuant to Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are furnished as Annexure-II to this Report.

18. PARTICULARS OF EMPLOYEES AND REMUNERATION

Information in accordance with the provisions of Section 197(12) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 regarding employees remuneration is given hereunder:

- Name of the employee who is in receipt of remuneration of Rs. 8.50 lacs per month/ Rs. 102 lacs per annum or more during the financial year 2025-26:

Sr. Name & Designation	Remuneration* recd.- (lacs)	Nature of employment	Qualification & experience	Date of commencement of employment	Age	Last employment held	% of equity shares held	Whether relative to director
1 Mr. Madhukar Mishra, Managing Director	560.86	Contractual	B. Sc., DMS (Mgt.) 46 years	01/07/2001	69 years	Sr. VP (Corporate Planning) -Dail Consultants Ltd.	Nil	No

*including employers provident fund contribution.

Pursuant to Section 136 of the Companies Act, 2013, any shareholder may write to the company for details during 21 days before the Annual General Meeting.

a) Ratio of remuneration of each director to the median remuneration of employees

Director	Director remuneration (DR)-Rs.	Median remuneration (MR) of employee -Rs.	Ratio (DR/MR)
Mr. Shrivardhan Goenka	4,40,000	4,00,562	1.09
Mrs. Pragya Jhunjhunwala	2,00,000	4,00,562	0.49
Dr. R.C. Lodha	4,00,000	4,00,562	0.99
Mr. Atul Mani Sharma	3,60,000	4,00,562	0.89
Mr. Anoop Mishra	4,80,000	4,00,562	1.19
Mr. Madhukar Mishra	5,60,85,776	4,00,562	140.01

b) % increase in remuneration of each director, CEO, CFO, CS in the financial year 2025-26

Official Name	Year 2025-26 Remuneration-Rs. In lacs	% increase in remuneration
Directors	Non-executive Directors are receiving only sitting fees for attending meetings @ Rs. 40,000/- per Board/Committee meeting.
Managing Director	560.86	17.6%.
Chief Financial Officer	49.11	10%
Company Secretary	25.40	10%

c) There was 5.8% increase in median remuneration of employees in the financial year 2025-26 vis-a-vis the preceding year.

d) There were 371 permanent employees on the rolls of the company as on 31.03.2026.

e) Average increase in remuneration inter-alia depends upon the inflation, individuals performance, company policy, human resource demand-supply position, negotiations with trade unions, company performance etc.

f) Average percentage increase in salaries of employees vis-a-vis managerial personnel - Average percentage increase in salaries of employees was 9.4% vis-a-vis 12.5% in salary of managerial personnel for FY 2025-26.

g) No director is getting any variable component of remuneration except performance pay to the Managing Director as decided by the Board of Directors every year based on performance of the company, terms of appointment and applicable statutory provision. Remuneration is as per remuneration policy of the company.

19. PERFORMANCE EVALUATION

The company has a Policy on Nomination & Remuneration and Evaluation of directors etc. The Board of Directors evaluates its own performance, that of Committee(s) and individual director(s) on annual basis in the manner envisaged by the Nomination & Remuneration Committee (NRC) of the Board. Nomination & Remuneration Committee (nrc) also ensures that evaluation process is carried out by the Board every year as per the prescribed method.

20. HUMAN RESOURCES AND WELFARE

The company has a structured approach to manage its human assets as per the emerging needs of the company. Industrial relations remained cordial during the year 2025-26.

The company has zero tolerance against any sexual harassment of woman at workplace. During the year under review, there was no case reported under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. There was no complaint pending at the beginning and closure of the year.

21. DIRECTORS RESPONSIBILITY STATEMENT

As required under the provisions of Section 134(3)(c) Directors Responsibility Statement on preparation and presentation of these accounts is as per Annexure-III to this Report.

22. CORPORATE GOVERNANCE

A separate report on corporate governance, along with a certificate from the statutory auditors confirming the compliance with corporate governance requirements has been annexed as Annexure-IV to Directors Report.

23. AUDITORS

The shareholders at their 83^rd Annual General Meeting held on 21^st Sept., 2022 appointed M/s Lodha & Co., Chartered Accountants, Kolkata as statutory auditors of the company to hold office from the conclusion of 83^rd AGM till the conclusion of 88^th AGM of the company.

24. COST AUDITORS

Pursuant to Section 148(3) of the Companies Act, 2013 read with the Rules made thereunder, the company is required to maintain cost records and accordingly such accounts and records are maintained. The Board of Directors on the recommendation of Audit & Risk Management Committee has appointed M/s K.B. Saxena & Associates, Cost Accountants, Lucknow as the Cost Auditors of the Company for the financial year 2025-26.

25. SECRETARIAL AUDITORS

Pursuant to Section 204 of the Companies Act, 2013 & related Rules and Regulation 24A of SEBI (LODR) Regulations, 2015, the shareholders at their 86^th Annual General Meeting held on 25^th Sept., 2025 have appointed M/s D. Dutt & Co., a peer reviewed Practising Company Secretaries, Kolkata as Secretarial Auditors of the company for a term of five (5) consecutive financial years commencing from the financial year 2025-26.

26. AUDITORS REPORT

i) Statutory Audit:

The observations of the auditor read with relevant notes on the financial statements are self-explanatory. There is no instance of fraud reported by the auditors.

ii) Secretarial Audit:

M/s D. Dutt & Co., company secretary in practice, secretarial auditor of the company has done secretarial audit for FY 2025-26. Secretarial audit report is attached as Annexure-V. The observations of the secretarial auditor in the report are self-explanatory.

27. TRANSACTIONS WITH RELATED PARTIES

All contracts/arrangements/transactions entered by the company during the financial year with related parties were in the ordinary course of business and on arms length basis. During the year, the company had not entered into any contract/arrangement/transaction with related parties which could be considered material. Information pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies(Accounts) Rules, 2014 are given in Annexure-VI in Form AOC-2 and the same forms part of this report

28. RISK MANAGEMENT

The Company is having Risk Management framework covering identification, evaluation and control measures to mitigate the identified business risks.

29. LISTING ON STOCK EXCHANGES

The companys equity shares are listed on National Stock Exchange of India Ltd. (NSE) and The BSE Limited, Mumbai (BSE). The company has paid the listing fees to the stock exchanges for the financial year 2025-26.

30. ACKNOWLEDGEMENT

The Board of Directors place on record their gratitude for valuable support and contribution of all the Stakeholders viz., employees, bankers, investors, customers, suppliers and the Government Departments during the year 2025-26.

	For and on behalf of the Board
	Shrivardhan Goenka	Madhukar Mishra
Date : 25th May, 2026	Director	Managing Director