Tamil Nadu Newsprint & Papers Ltd Management Discussions

I. INTRODUCTION - The Company at a Glance

Tamil Nadu Newsprint and Papers Limited was promoted by the Government of Tamil Nadu and incorporated on 16^th April, 1979 under the Companies Act, 1956. Over four and a half decades, TNPL has grown with an initial capacity of 90,000 tonnes per annum ("TPA") into one of Asias largest bagasse-based paper producers and a diversified manufacturer of printing and writing paper ("P&W paper"), multilayer coated packaging board, and cement, with an aggregate paper and paperboard capacity of 6,00,000 TPA across two manufacturing units in Tamil Nadu - Unit I at Kagithapuram, Karur District 4,00,000 TPA of P&W paper) and Unit II at Mondipatti, Tiruchirapalli District 2,00,000 TPA of packaging board). The Government of Tamil Nadu holds 35.32% of the equity as promoter.

- The Business Model

TNPLs business model rests on three pillars. First, fibre security through an agro forestry ecosystem: the Company pioneered the use of bagasse

(a sugarcane residue) as its primary fibre and complements it with hardwood pulp from captive and farm-forestry plantations that cumulatively span over 3.09 lakh acres involving more than 66,273 farmers, together with recycled fibre from its deinking plant. Secondly, integrated, resource efficient manufacturing: in house chemical bagasse and deinked pulping; captive power generation of

153.62 MW and 35.5 MW of wind farm and a 900 tonnes per day cement plant Thirdly, a diversified product portfolio spanning P&W paper (brands such as TNPL Ace Marvel, Radiant Platinum, Printers Choice and TNPL Copier), coated packaging boards for pharmaceuticals, FMCG and food packaging.

II. INDUSTRY SCENARIO

The Paper Industry continues to play an important role in the global economy. The major segments comprising Writing & Printing Papers, Packaging

Boards and Specialty Papers are witnessing evolving demand patterns with increasing focus on sustainability, recyclability and value added applications.

India continues to offer significant long term growth potential due to low per capita paper consumption compared to global averages. Growth in education, organized retail, food delivery, healthcare, e-commerce and sustainable packaging sectors are expected to support future industry growth.

SWOT ANALYSIS OF INDIAN PAPER INDUSTRY:

Strengths	Weaknesses
Large and growing domestic market	High capital intensity
Well-developed printing and converting industry	High raw material and energy costs
Established technical and research institutions	High logistics and financing costs
Increasing preference for sustainable paper based products	Dependence on wood availability
Opportunities	Threats
Plastic replacement opportunities	Rising digitalization
Export opportunities in value added grades	Low cost imports and global overcapacity
Low per capita paper and tissue consumption	Regulatory and environmental challenges
Growing demand for packaging and tissue products	Competition for wood sourcing

III. STRATEGY

Guided by our vision to emerge as the global market leader in the manufacture of eco-friendly products while integrating sustainability across every facet of our operations, we remain committed to continuously adopting advanced, future ready technologies. This enables us to enhance operational excellence, improve resource efficiency, and create long term value for all our stakeholders.

TNPLs sustained success is driven by the consistent execution of the following strategic initiatives:

1. Sustainability

2. Innovation

3. Management of Human Resources

4. Financial re-engineering with Efficien cost management

5. Customer centric

6. Continuous and Sustainable Growth

1. Sustainability

Blending advanced automation with green efficien practices for and responsible manufacturing.

TNPL firmly believes that one operations waste could be anothers fuel and we are developed on the concept of "Waste to Wealth" and ensures that most of the waste that we generate is reused, recycled and repurposed to the maximum extent possible at all levels of our production.

TNPL is widely known for our environmental consciousness and eco friendliness in the country with the least water consumption. The waste water generated in the mill is treated with our advanced water treatment plant and repurposed as process water and is also utilized for irrigation purposes.

TNPL boasts FSC-FM and FSC-Coc certified captive plantation and farm forestry for pulpwood, which serves as a major raw material for paper and packaging boards.

TNPL aspires to create a circular economy model that minimizes pollution led damage and maximizes positive environmental impact. TNPL, a regenerative system is followed in which resource input, waste, emission and energy requirements are minimized by narrowing and closing energy and material loops. This is achieved through long lasting design, maintenance, reusing, remanufacturing, refurbishing and stringent recycling.

Being the torch bearers of sustainability and circular economy, we strive to make sure that almost no waste from any process is disposed of without making sure that they cannot be used for any other operation. We are firm believers that waste from one process could be the fuel to another. So, we optimize and utilize all the waste generated from our paper, paperboard and cement plants and ensure that it is repurposed at all levels.

This makes us enhance operational efficiency and promote greener energy, which further aids in better resource planning and product life extension.

It is a known fact that the major raw material for our paper manufacturing is bagasse which is a residue that is obtained from sugarcane. But, there is more to it than meets the eye.

2. Innovation

At TNPL, innovation is the driving force that fuels our commitment to excellence and sustainability.

Our dedicated Research and Development (R&D) department operates at the forefront of the pulp and paper industry, continuously striving to provide customers with best in class products while actively advancing our environmental objectives.

Since our inception, we have been deeply devoted to maintaining the highest quality standards by seamlessly integrating advanced technology with optimized operations. Our R&D initiatives are strategically designed to support this vision, focusing on three core aspects:

- Sustainable Product Development: Enhancing paper quality while minimizing our ecological footprint.

- Operational Excellence: Deploying cutting edge technology to optimize resource utilization and efficiency.

- Circular Economy Integration: Transforming industrial by-products into valuable, high utility resources. Our commitment to a clean and unpolluted environment is reflected in our practical execution of the circular economy

TNPL is proud to be the first mill in the Indian paper industry to manufacture superior grade cement.

3. Management of Human Resources

In TNPL, our people are the cornerstone of our success. Recognising that a motivated, skilled and engaged workforce is essential for sustainable growth, the company continues to adopt a People First approach by investing in employee development, well being and capability enhancement. Through progressive human resource practices, TNPL has created a work environment that encourages innovation, collaboration, continuous learning and high performance.

The Company places significant emphasis on learning and development through structured training programmes designed to enhance technical, functional and behavioural competencies across all levels of the organization.

Employees are provided with opportunities to upgrade their knowledge and skills through in-house and external training programmes, while senior executives regularly participate in executive development programmes conducted by premier management institutions to strengthen leadership capabilities and strategic decision making.

The companys human resource philosophy is centred on nurturing a culture of trust, inclusiveness and excellence, where employees are recognised as the key drivers of organizational success. By aligning people strategies with the companys core business priorities of people, customer and operational excellence, TNPL continues to strengthen employee engagement, productivity and organizational effectiveness. The sustained focus on employee development, welfare and engagement has resulted in higher employee morale, improved productivity and enhanced organizational commitment. These initiatives have strengthened TNPLs position as an employer of choice and contributed significantly to the companys overall business performance. The companys excellence in human resource management and learning & development received national recognition during the year with the conferment of two prestigious awards: - Golden Peacock HR Excellence Award 2025 - Golden Peacock Training Award 2026

These prestigious awards recognise TNPLs outstanding achievements in employee engagement, capability development, learning and development, employee welfare and progressive human resource management practices.

TNPL remains committed to building a future ready workforce by continuously strengthening its people practices, enhancing employee experience and fostering a culture of innovation, inclusiveness and continuous improvement. The company will continue to invest in developing its human capital, recognising that its employees remain its most valuable asset and the driving force behind its sustained growth and long term success.

4. Financial Re-engineering with efficient cost management

TNPL has benchmarked its operations against clearly defined performance standards and continuously monitors actual performance against established targets. With a strong focus on operational efficiency and cost optimisation, the Company aligns its initiatives with its strategic objectives and long-term mission, driving sustainable value creation.

5. Customer Centric

The company continues to place customer requirements and market responsiveness at the core of its business strategy. Continuous engagement with customers, dealers and institutional buyers enables the Company to better understand market trends, improve product offerings and strengthen long term relationships. Focus continues on improving service levels, product consistency, supply reliability and customer support across all business segments.

6. Continuous and Sustainable Growth

Since commencing operations in the year 1985 with an installed production capacity of 90,000 tonnes per annum (TPA), TNPL has consistently expanded its manufacturing capabilities in line with evolving market demand and industry growth.

At present, the companys total installed capacity stands at 600,000 TPA, reinforcing its position as one of Indias leading manufacturers of printing and writing paper in terms of both installed and production capacities.

TNPL currently operates three paper machines with a combined installed capacity of 400,000 TPA at Kagithapuram in Karur District and one paperboard machine with an installed capacity of 200,000 TPA at Mondipatti in Tiruchirappalli District, Tamil Nadu. This robust manufacturing infrastructure enables the Company to efficiently cater to diverse customer requirements while maintaining high standards of quality, operational excellence, and sustainability.

IV. THE FACTORS BEHIND SUCCESS

Embracing Sustainable Practice in Environment Management:

One of the key indicators of industrial sustainability is environmental health. While industrial activities contribute to a nations economic development, they also have a significant impact on the environment and society. TNPL recognized that employing suitable environmentally friendly technologies can reduce the environmental impact associated with industrial operations.

Shaping the journey with appropriate sustainable choices:

TNPL is dedicated to fulfilling its environmental goals and minimizing its ecological footprint through the implementation of various strategies in its journey, which encompass resource conservation, recycling, ecosystem restoration, biodiversity preservation, and awareness promotion.

Furthermore, the monitoring system adeptly communicates with senior management whenever necessary regarding environmental factors that could influence industrial operations, enabling informed decisions about the financial resources required to enhance environmental performance. The result of such prudent environmental performance decisions is the establishment of a cement factory by TNPL. The installation of a deinking plant for recycling waste paper, and the implementation of an energy and water

Generation3 (G3) pulp mill, along with a state of the art effluent treatment plant.

During the year TNPL successfully installed a

1 MW rooftop solar power plant and commenced its operations at both units.

While the positive effects on job creation and the enhancement of socio economic conditions in nearby villages are evident, technological advancements can mitigate adverse environmental impacts resulting from discharges.

TNPL has invested a substantial amount in discharge control initiatives, including a

Non Condensable Gas (NCG) burning system to eliminate the unpleasant gases produced during the pulping process, a recovery boiler equipped with an Electrostatic Precipitator (ESP) to significantly reduce dust in flue gas below the legal emission standards, a fully integrated chlorine dioxide plant and a cutting edge

Effluent Treatment Plant (ETP) designed to treat effluent in compliance with established norms. tion

The prevailing trends suggest an escalating demand for paper and paperboards, which consequently necessitates a greater utilization of natural resources. TNPL has proactively engaged in backward integration to fulfil its raw material needs by enhancing farm forestry and establishing captive plantations across the farmlands, ensuring a harmonious balance in this process. The collaboration between the industry and farmers has fostered a mutually beneficial scenario, yielding favourable results for both. Through the implementation of backward integration, the company has cultivated high-yielding clonal pulpwood plantations aimed at achieving the Sustainable Development Goals (SDGs).

CERTIFICATIONS

1. Forest Stewardship Council (FSC) Certification

To protect natural forests and promote the sustainable utilization of forest resources, TNPL actively pursues a target of 100% usage of certified wood material or legally verified resources procured through reputed global agencies. In December 2025, the company successfully completed its annual Forest Stewardship Council (FSC) surveillance audit. Consequently, TNPL maintains its prestigious dual-certification status:

- FSC-Forest Management (FSC-FM)

- FSC-Chain of Custody and Controlled wood (FSC-CoC & CW)

This dual certification provides credible, third party assurance that TNPLs expansive plantations and operational workflows are managed responsibly. They continuously deliver well balanced social, environmental, and economic

. benefits

FSC certification catalyzes systemic improvements in plantation management. It ensures robust environmental safeguards, socially beneficial community relations, and economically viable outputs. During the review period, the TNPL FSC Core Team served as the central focal point for the comprehensive annual audit. The process was conducted by the globally renowned certification body M/s. Nepcon (Preferred by Nature), covering the Chain of Custody and Controlled

Wood standards.

2. Integrated Management Systems (IMS) & ISO Certifications

TNPL continues to benchmark its manufacturing processes against rigorous international standards. This commitment ensures sustained quality, environmental stewardship, energy and workplace safety.

A. ISO 9001:2015 & ISO 14001:2015 (Quality &

Environment)

A comprehensive re-certification audit was conducted in November 2025 by the prominent certification body M/s TUV India Private Limited. Working in tandem with the TNPL IMS Core Team, the audit rigorously evaluated: - ISO 9001:2015 (Quality Management System): Covering the "Design, Manufacture and Supply of Writing and Printing Paper". - ISO 14001:2015 (Environmental Management System): Covering the "Development and Manufacture of Writing and Printing Paper".

Following successful compliance verification, the audit team recommended renewal for both certifications at TNPL Unit I, extending their validity through 20^th February, 2029.

B. ISO 50001:2018 (Energy Management)

The 2^nd Annual Surveillance Audit for the ISO 50001:2018 Energy Management System (EnMS) was successfully completed in February 2026. The evaluation focused on the "Design and Manufacture of Pulp and Paper" at Unit I. Managed by M/s TUV India Private Limited alongside the

TNPL EnMS Core Team, the audit confirmed high compliance with energy targets. It resulted in a te certifica formal recommendation to extend the validity through 24^th March, 2027.

C. ISO 45001:2018 (Occupational Health & Safety) A

Milestone Achievement

TNPL achieved a major operational milestone by securing the ISO 45001:2018 Certification for its Occupational Health and Safety Management System (OHSMS) covering the "Development and Manufacture of Writing and Printing Paper". - Exceptional Execution Efficiency:

Demonstrating elite organizational agility, TNPL met its ambitious corporate target by executing the combined Stage 1 and Stage 2 audits within a tight window of just 60 effective working days, commencing mid-February

2026. - Audit Completion: The audit was wrapped up successfully in March 2026 by M/s TUV India Private Limited in coordination with the TNPL

OHSMS Core Team, securing certificate validity through March 30, 2029. - The Certification Ceremony: On April 7, 2026, a celebratory event was hosted under the banner "Namma Pathukapu" (Our Safety) at the

TNPL Kaveri Arangam in Kagithapuram, Karur, marking the launch of Phase 1 Improvement

Projects.

Water Management

The company continually backs environmental sustainability through pioneering water conservation initiatives, successfully achieving among the lowest specific water consumption rates in the Indian paper industry. This is primarily accomplished through following advanced process optimizations and cutting edge water stewardship technologies.

- Sustainable Sourcing & Harvesting: Water for operations at both TNPL units is responsibly sourced from the Cauvery River. This is supplemented by a robust series of rainwater harvesting structures installed across the factory campus to conserve surface runoff and enhance groundwater recharge.

- Advanced Process Optimization: Through rigorous technological upgrades and continuous process improvements, the company has drastically minimized fresh water intake per ton of paper produced.

- Zero-Waste Circular Economy: The mill employs an advanced wastewater treatment plant that treats and repurposes effluent, which is recirculated as process water and heavily utilized for irrigation.

TNPLs regenerative, closed-loop systems and holistic water management have earned prestigious industry accolades, including the Confederation of Indian Industry (CII) Award for Excellence in Water Management, continuously setting new sustainability benchmarks in paper and board production.

Energy Management

TNPL Unit I has power boilers with generation capacity of 103.62 MW and TNPL Unit II has power boilers with generation capacity of 50 MW. TNPL is 100% self-sufficient in power. Surplus power is exported.

As part of renewable energy initiative, TNPL has successfully installed roof top solar power plant of 1 MW capacity each at TNPL Unit I & II since June 2025 & August 2025 respectively, validating our commitment to sustainability and green initiatives.

Marketing Management

The increasing adoption of digital communication and electronic media continues to moderate growth in the writing & printing paper segment globally. However, Indias large student population and educational demand continue to support stable consumption in notebooks, publishing and educational grades.

In response to changing market dynamics, the

Company continues to diversify its portfolio with increased focus on industrial applications, value added products, premium packaging grades and sustainable solutions. Continuous efforts are being made towards quality improvement, cost optimization and operational efficiency enhancement.

The company continues to strengthen its dealer and distribution network by expanding into unrepresented markets, reinforcing existing channels and periodically evaluating dealer performance. Improved credit monitoring systems and enhanced use of information technology are enabling faster response and improved service levels.

Following the commissioning of the pulp mill at

Unit II, the company has significantly strengthened its focus on higher value added Virgin Fibre Board products including Folding Box Board (FBB), SBS

Boards, Cup Stock and specialty packaging grades.

Availability of in house pulp provides both input cost advantage and consistency in raw material quality.

The company has also successfully reestablished its presence in the cup stock market and continues to focus on development of export-oriented high bulk grades, specialty boards and higher GSM products to improve realizations and operational efficiencies.

Sustainable packaging solutions such as Aqueous

Barrier Coated products have also been introduced as environmentally friendly alternatives to conventional poly coated substrates.

The company is also evaluating opportunities in the growing tissue paper segment in line with increasing hygiene awareness and demand from healthcare, hospitality and institutional sectors.

IT Initiative and Cyber Security

TNPL IT Transformation Initiative - Digital Transformation & Industry 4.0

TNPLs IT transformation initiative reflects a holistic, scalable, and forward-looking approach to digitalization within the manufacturing sector. The organization has successfully implemented the following key initiatives and digital transformation programs:

Key Initiatives & Implementations - Successful revamp of the TNPL websites for paper, board, and cement businesses. - Deployment of digital notice boards across locations. - Auto generation of variable Costing Reports from Oracle EBS ERP against Annual Operating Plan targets, the deviation is continuous monitored on weekly & monthly basis. - Optimized chemical consumption through Advanced Process Control (APC), resulting in and NaOH usage, improved

reduction of H2^SO4

process efficiency, and cost savings for hard wood pulp (HWP) initially followed by chemical bagasse pulp (CBP). - Convergence of Industry 4.0 technologies with enterprise governance systems for holistic operational and cost control measures with analytics capabilities. - Implementation of eProcurement System (EPS) seamlessly integrated with Oracle EBS ERP. - Business Intelligence driven production planning and inventory optimization to improve forecasting accuracies and for better resource utilizations. - Deployment of AI and ML based production planning across paper machines. - End to end system sales order tracking from jumbo reels to finished goods. - Implementation of a Decision Support System (DSS) with Edge Computing enabled Centralised Energy Management System (CEMS) for realtime energy monitoring, optimization, and dynamic pricing strategies.

Advanced Analytics & Reporting

Power BI dashboards integrated with real time analytics and Python language-based forecasting covering: - Order Booking - Sales Dispatch - Collections & Outstanding

Enterprise Digitalization - Dealer Portal enhanced with Transportation Management System (TMS) along Global

Positioning System (GPS) tracking, Electronic

Proof of Delivery (ePOD) with customer feedback mechanisms. - End to end digitalization of procurement, sales tracking, and automated approval workflows with improved transparency and turnaround time. - Fully automated nursery & plantation systems with end to end digitalization spanning plantation, sapling sales, felling and transportation management with Oracle EBS ERP integration with mobile and web application access. - Launch of new corporate video and Virtual Reality (VR) initiatives. - Blitz Reports for advanced management reporting with ease of reports generation and extraction from Oracle Database.

Employee & Governance Systems - Employee Performance Assessment System

(ePAS) with KPI tracking. - Employee Self-Service (ESS) integrated with Occupational Health Records.

By seamlessly integrating cutting edge technologies with enterprise systems, TNPL has achieved measurable improvements in operational efficiency, cost optimization, sustainability, and governance.

The initiative stands out as a benchmark model for digital transformation in process industries, positioning TNPL as a strong contender for national and global industry level recognition in IT excellence from Governance, Artificial Intelligence, and Cyber security perspectives.

V. RESOURCES & LIQUIDITY

TNPL continues to maintain a prudent approach to the management of its financial resources and liquidity. The Company focuses on ensuring adequate cash flows to meet its operational requirements, capital expenditure commitments, debt servicing obligations, and working capital needs. Through disciplined financial management, working capital practices, and optimal utilisation of available resources, TNPL strives to maintain financial flexibility while supporting its growth initiatives and long-term sustainability objectives.

VI. OUTLOOK, OPPORTUNITIES AND CHALLENGES

The Indian paper industry is expected to continue facing short term challenges arising from import pressures, elevated raw material costs, GST-related disruptions, weak domestic pricing environment and global economic uncertainties.

Demand conditions in certain paper and packaging grades may remain moderate in the near term. However, long-term demand fundamentals for paper, packaging board and tissue products continue to remain positive supported by Indias economic growth, increasing organized consumption, sustainability trends and rising environmental awareness.

Key opportunities for the industry include: - Growth in sustainable packaging solutions. - Increasing demand from FMCG, food service and e-commerce sectors. - Expansion in healthcare and hygiene-related tissue products. - Import substitution opportunities in premium grades. - Growth in value added and specialty paper products. - Rising preference for recyclable and biodegradable materials.

The Company remains focused on: - Expanding value added and specialty product portfolio. - Strengthening market presence across paper, packaging board and tissue segments. - Improving operational efficiencies and cost competitiveness.

- Enhancing customer engagement and distribution reach. - Developing sustainable and environmentally friendly products. - Increasing focus on import substitution and export opportunities. - Optimizing product mix towards higher contribution grades.

VII. RISKS AND CONCERNS

TNPL has a robust Risk Management framework to identify, evaluate and mitigate risks impacting business operations and strategic objectives.

The framework aims to improve transparency, strengthen decision making and minimize adverse impacts while enhancing the companys competitive position.

Risks are periodically reviewed across functional areas and classified as High, Medium or Low depending upon severity, probability and business impact. The Company continues to take proactive measures towards risk mitigation through continuous monitoring, operational improvements, market diversification, cost optimization and strengthening of internal controls.

VIII. HUMAN RESOURCES DEVELOPMENT

1. LEARNING AND DEVELOPMENT

In TNPL, we firmly believe that continuous learning and capability development are the cornerstones of both individual growth and organizational excellence. In an increasingly dynamic business environment, investing in employee development enhances technical competence, leadership capability, innovation, adaptability and overall organizational performance. Accordingly, our learning and development initiatives during the year 2025-26 were strategically designed to strengthen technical, behavioural, functional, managerial and leadership competencies across all levels of the organization.

During the year, 237 training programmes were conducted, covering a total of 3,401 mandays. These programmes addressed a wide spectrum of technical, operational, behavioural, statutory, safety, environmental, quality, digital transformation and leadership topics. The training interventions were designed to equip employees with the knowledge and skills required to meet evolving business challenges while supporting the companys strategic objective of achieving manufacturing excellence.

To strengthen digital learning and knowledge management, the HR Department extensively utilizes the alfresco portal, which serves as a centralized repository for in-house training circulars, external training materials, presentations, reference documents, and participant feedback. The portal enables employees who are unable to attend programmes in person to access learning resources at their convenience, thereby promoting self-learning, knowledge retention and continuous professional development across all locations of the company.

In addition to formal training programmes, TNPL has institutionalized two unique in-house learning initiatives that promote continuous capability development and organizational knowledge sharing.

BODHI (Knowledge Sharing Initiative) serves as an internal learning platform through which employees including who attend external seminars, conferences, workshops and specialized training programmes share their learning with colleagues across departments. The initiative facilitates the dissemination of emerging technologies, industry best practices, operational improvements, and innovative ideas throughout the organization. By encouraging employees to learn, teach and collaborate, BODHI has evolved into an effective knowledge management platform that strengthens organizational learning and cross functional collaboration.

NATHI (Skill Development Initiative) focuses on enhancing the technical competencies of shop-floor employees through structured, need-based training conducted by experienced in-house faculty and subject matter experts.

The programme emphasizes practical skill enhancement, operational excellence, quality improvement, productivity enhancement, safety awareness, equipment reliability and multi skilling. NATHI plays a significant role in improving workforce capability while supporting TNPLs journey towards manufacturing excellence.

Together, BODHI and NATHI have become integral components of TNPLs learning ecosystem, complementing formal classroom training by fostering a culture of continuous learning, knowledge sharing, innovation and employee development across the organization.

TNPL strongly encourages a culture of knowledge sharing and collaborative learning. Employees nominated for external training programmes are encouraged to disseminate the knowledge gained by conducting departmental knowledge-sharing sessions. This practice facilitates the transfer of emerging technologies, industry best practices, and innovative approaches throughout the organization. Further, valuable technical materials collected from external programmes are archived in the technical library for future reference, thereby creating a sustainable institutional knowledge base.

To facilitate the smooth integration of newly recruited employees, orientation programmes are conducted with active participation from Heads of Departments (HODs). These programmes familiarize employees with TNPLs vision, values, organizational structure, safety practices, policies, work culture and role-specific expectations, enabling them to become productive contributors from the outset of their careers.

As part of its commitment to skill development and nation building, TNPL continues to provide apprenticeship training to Graduate, Diploma, Sandwich Course (SIT), and ITI Apprentices in accordance with the provisions of the Apprentices Act, 1961, in coordination with the Board of Apprenticeship Training, Chennai, the Assistant

Director of Training, and the District Skill Training Offices of Karur and Tiruchirappalli. This initiative contributes to enhancing the employability of young professionals while developing a future ready talent pipeline for the industry.

Enterprise-wide Employee Engagement and

Cultural Transformation

Beyond classroom learning, TNPL institutionalized several flagship employee engagement quarterly initiatives during the year to strengthen collaboration, employee ownership, innovation, safety and organizational culture. These programmes have evolved into sustainable platforms that promote year round participation and reinforce the companys people centric philosophy. - TNPL Champions League (Edition-I):

Encouraged cross-functional teamwork, employee wellness, sportsmanship, and organizational unity. The event witnessed enthusiastic participation from 1,373 employees, with 345 winners, making it one of the companys most successful engagement initiatives. - Karpoom Karpippoom (Edition - I):

Strengthened the culture of continuous learning and knowledge sharing by encouraging employees to exchange technical expertise, innovative ideas, and best practices across departments. The initiative recorded 258 participants, with 42 winners. - IMP_PRO (PQCDSM) (Edition - I): Promoted structured problem solving using Productivity, Quality, Cost, Delivery, Safety, and Morale (PQCDSM) methodologies, enabling employees to drive operational excellence and continuous improvement. The programme attracted 107 participants, with 96 winners. - Namma Padukappu (Edition-I): Reinforced Behaviour Based Safety (BBS) by encouraging proactive employee participation in identifying hazards, promoting safe work practices, and strengthening the companys safety culture. The programme recorded 250 participants, with 74 winners.

Through these comprehensive learning, capability building, apprenticeship and employee engagement initiatives, TNPL continues to nurture a high-performance learning organization that promotes continuous improvement, innovation, safety, collaboration and employee excellence, thereby supporting the companys long term business sustainability and growth.

2. EMPLOYEE / INDUSTRIAL RELATIONS

In TNPL, our employees are the driving force behind the Companys sustained growth, operational excellence and long term success. We are committed to fostering a people centric work culture founded on integrity, inclusivity, mutual respect, collaboration and continuous learning.

By investing in our people and creating an enabling work environment, TNPL empowers employees to realize their full potential while contributing meaningfully to the companys vision of sustainable growth.

The Company firmly believes that a motivated, skilled and engaged workforce is fundamental to achieving business excellence. Accordingly, significant emphasis is placed on employee development through structured learning and development programmes, leadership development initiatives, knowledge sharing platforms, employee engagement activities and continuous skill enhancement. These initiatives cultivate innovation, improve productivity and strengthen organizational capability across all functions.

Industrial relations at TNPL have continued to remain cordial and constructive, reflecting the long-standing relationship of mutual trust, cooperation and understanding between the Management, employees and recognized trade unions. The company maintains an open and transparent communication framework, encourages employee participation and adopts a proactive approach in addressing workplace concerns through established consultative mechanisms. This has contributed to maintaining a harmonious industrial climate and uninterrupted business operations.

Employee well being remains a key organizational priority. TNPL continues to provide comprehensive welfare measures, quality healthcare facilities, safe working conditions, occupational health programmes and initiatives that promote work life balance, employee engagement and overall well being. These efforts reinforce the companys commitment to creating a safe, healthy, inclusive and rewarding workplace.

As TNPL moves forward, the company remains committed to strengthening employee capabilities, embracing innovation, nurturing future leaders and sustaining a high performance work culture.

By continuously investing in its human capital and preserving harmonious industrial relations, TNPL aims to create long term value for its employees, stakeholders and society while supporting its journey towards sustainable growth and manufacturing excellence.

IX. Corporate Social Responsibility (CSR)

TNPLs initiatives reflect a strong commitment to inclusive growth, combining economic development with meaningful social impact. From job creation to community welfare to critical healthcare support during crisis. TNPL continues to strengthen lives and livelihoods in its surrounding communities.

TNPLs Corporate Social Responsibility (CSR) initiatives are primarily focused on the villages and Town Panchayats surrounding its manufacturing facilities, reflecting the Companys belief that CSR is a shared responsibility and an integral part of its organisational culture. The Companys CSR initiatives are aimed at enhancing the quality of life of the local communities through the development of educational, healthcare, civic and environmental infrastructure..

TNPL also conducts medical camps, skill development and livelihood training programmes, cial finan extends assistance for education and medical treatment, supports cultural and sports activities, and contributes towards the renovation of places of worship, including temples, churches and mosques. These initiatives have strengthened the Companys relationship with the neighbouring communities and fostered a spirit of mutual trust, goodwill and sustainable development.

2% of the average profit before tax of the previous three years is spent generally by TNPL for the upliftment of the need by society. TNPLs CSR operated in the name of the Registered TNPL

Araikodai Trust under the 5 pillars viz:

Education, Health Care, Community Development

& Infrastructure Development, Environment

& Soil Quality and Culture & Heritage. During

2025 - 26, TNPL has spent 6.67 crores towards CSR activities.

As required in the Companies Act, 2013, "Corporate Social Responsibility Committee" consisting of three Independent Directors and One Nominee Director - Government of Tamil Nadu is functioning in TNPL.

DISCUSSION ON FINANCIAL PERFORMANCE AND OPERATIONAL PERFORMANCE

Particulars	UOM	2025-26	2024-25
Production (Paper & Board)	MT	634369	614572
Sales (Paper & Board)	MT	646693	615570
Profit Before Interest, depreciation & tax	Rs. in Cr	556.66	525.17
Finance Cost	Rs. in Cr	193.16	216.13
Depreciation	Rs. in Cr	312.90	303.73
Profit Before Tax	Rs. in Cr	50.60	5.30
Profit After Tax	Rs. in Cr	247.75	3.72

KEY FINANCIAL RATIOS

The management has reviewed the changes in key financial ratios and noted significant changes in the ratios as given below:

Particulars	UOM	2025-26	2024- 25	% Change Inc /Dec	Remarks
Revenue from Operation	Rs Cr	4644.89	4490.91	3.43%	-
EBIDTA Margin	%	11.98	11.45	2.48%	-
Operating Profit Margin (EBIT)	%	5.25	4.83	6.49	-
Net Profit Margin (PAT)	%	5.33	0.08	6562.50%	Reversal of deferred tax liability (net) amounting to 219.43 Crore to Statement of Profit & Loss due to opting new tax regime.
Interest cover ratio (All Loans)	times	2.88	2.43	18.60%	-
Debt Equity Ratio	"	0.50	0.49	-2.04%	-
Current ratio	"	0.78	0.77	2.27%	-
Trade Receivable Turnover Ratio	"	9.17	10.58	-13.29%	-
Inventory Turnover	"	4.65	4.38	6.31%	-
Return on Net Worth	%	11.25	0.18	6150.00%	Reversal of deferred tax liability (net) amounting to 219.43 Crore to Statement of Profit & Loss due to opting new tax regime.