Western India Plywoods Ltd Management Discussions

This report is prepared in compliance with the requirement of the Corporate Governance. It covers both performance and outlook of the company. The Management accepts its responsibility for the integrated objectivity of the financial statement.

According to the World Economic Outlook update, global GDP growth is projected at 3.3% for both 2025 and 2026, below the pre-pandemic average. Global inflation is expected to decline to 4.2% in 2025 and further to 3.5% in 2026. Globally energy prices are forecast to decline by 2.6% in 2025, driven by weaker demand and higher non-OPEC+ supply, while food and beverage prices are expected to rise globally due to adverse weather impacting across regions, advanced economies are likely to move towards easing faster than emerging markets, reflecting different inflation and growth dynamics.

Globally, 2024 witnessed an uneven recovery. Service sectors remained relatively strong, while manufacturing lagged, particularly in Europe and parts of Asia, due to supply chain disruptions and softer external demand, Geopolitical tensions, including the Russia-Ukraine war and Middle East conflicts, heightened uncertainty across financial and commodity markets.

Indias economy demonstrated resilience despite global headwinds. In April 2025, the Reserve Bank of India (RBI) lowered the policy repo rate by 25 basis points to 6.0%, aiming to support investment and borrowing amid tighter global financial conditions. Inflation has moderated significantly, with retail inflation (CPI) failing to 3.34% in March 2025, the lowest since 2019, reflecting effective monetary management and supply-side interventions. Real GDP growth is projected at 6.5% for 2025-26, maintaining momentum from the previous year despite a slight downward revision due to global risks. Sectoral trends remain positive: agriculture activity benefited from strong reservoir levels and supportive weather conditions, manufacturing is reviving on improved business sentiment and services continue to drive growth. Investment activity is strengthening, driven by higher capacity utilisation, public infrastructure spending, and a robust financial sector. While merchandise exports may face challenges from global trade fictions and services exports, strong remittance inflows continue to support the current account balance. Inflation expectations remain anchored, with CPI inflation forecast at 4.0% for 2025- 26, sided by healthy agricultural output and softening oil prices. However, risk from weather- related shocks and global volatility persists. Indias financial system remains stable, backed by healthy forex reserves, improves liquidity and lower borrowing costs. The Ministry of Finance has warned that rising global trade tensions, especially under the renewed "America First" agenda of the U.S., could impact Indias trade surplus provides a mitigating cushion. At the same time, there is and emerging school of thought that India could be relatively better placed than most of the Countries in terms of tarrif rates which may provide opportunities to significantly scale up merchandise exports.

In summary, Indias growth outlook remains robust, underpinned by domestic resilience and disinflation trends, although global uncertainties, including geopolitical developments, trade dynamics, and financial market fluctuations, warrant careful monitoring. However, the recent India-Pakistan border tensions can disrupt trade, investment, and cross-border economic activity, particularly in border regions. Heightened military spending may divert resources from development and infrastructure. Tourism and local businesses near the border often suffer due to security concerns.

The company is in manufacture of high quality plywoods, Hardboard, Pre-compressed boards, Densified wood, Furniture and low density fibre boards. The main customers are Automobiles, Packaging industry and construction companies. The company is in operation in this field for the last few decades and has already established a name in the market. The company is manufacturing low density fibre board by using waste sludge from the currency paper mills as part of the raw materials. The low density fibre board introduced has got both domestic and international market. The company is also in the process and diversification to new value added products. As part of diversification, the Company started Metal Injection Moulding unit under its wholly owned subsidiary The Southern Veneers and Wood Works Limited. The trial run is started and the marketing survey is carried out. This project have huge market potential and the Company would be able to fully utilise the project in the coming years.

? The major raw material required by the company is soft wood and waste wood for Hardboard, Timber for plywood. There is scarcity of these raw materials. However as the company is in commercial operation for more than 8 decades it could establish a good system of procurement.

? Competition from other manufacturers and cheap imports can affect the profitability of the company.

? As the company is maintaining high quality for its products and the same is well accepted by the customers both in India and abroad. The company has established Research and Development Unit, one of the best of its kind in the wood based industry. The company is also duly equipped to develop new product to meet the requirements of the market. The company believes from experience the customer loyalty will prove beneficial in meeting the challenge faced by it in the long run.

? The company has invested significantly in building its brand equity, which has led to high brand recall and has enabled entry into new product categories.

? The industry will continue to see a strong uptrend in the mid to long-term driven by macro economic and industry factors like increasing disposable incomes, increased ease of availability of finance, increasing penetration levels and growing middle class.

? The governments push for housing for all, increasing availability of electricity augur well for long term growth prospects for the sector.

India is one of the leading growing economy of the world and there is huge demand for both capital and commercial items. Since the companys products are used by the construction industry, automobile industry, increase in demand for these products will entirely bring 4 better outlook for the company.

The major risk is competition from cheap variety of similar products with low quality. Similar new substitutes of the products are being developed. The availability of quality raw materials is one of the risk faced by the company. However due to the long standing in the industry the company is able to face this risk.

The company has internal control systems commensurate with the nature of its business, size and complexities. Every quarter the audit committee reviews the adequacy and effectiveness of internal control systems and monitors the implementation of improvement actions. The internal auditors of the company regularly review key processes to identify improvement opportunities and automation possibilities. During the year, key controls in operational, financial processes were tested to provide assurance regarding compliance with the existing policies and significant operating procedures etc. and no significant weaknesses or deviations were noted in operation of controls.

Further, the statutory auditors of the company also carried out audit of the Internal Financial controls over financial reporting of the company as on March 31, 2025 and issued their report which forms part of the independent auditors report.

The industrial segment was peaceful during the year. The management wishes to acknowledge the efforts made by employees in the smooth working of the company.

The manpower strength of the company as on 31.03.2025 was 226. Being an ISO 9001-2015

certified company; the company conducts regular training programmes for the employees to impress on them the need for quality, productivity and transparency. These measures have helped to achieve the cost effectiveness and improve the overall operational efficiency. Over the last year, HR has taken various initiatives for employee benefit and retention. A new Human Resource Management System (HRMS) platform was introduced to digitise the processes, improve data management and enhance analytics-driven decision making.

The high demand for premium plywood and low density fibre board has improved the turnover. The company is hopeful of encashing this opportunity.

As per amendment made under Schedule V read with regulation 34(3) to the Listing Regulations, details of significant changes (i.e change of 25% or more as compared to the immediately previous financial year) in key financial ratios and any changes in return on net worth of the company including explanations thereof are given below.

As stated earlier statements in the management discussion and analysis report are in accordance with the companys objectives, projections, estimates and expectations and may be "forwaded looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied and changes in government regulations, tax laws and other statutes may affect the working of the company.

? The company has not issued any GDR/ADR/ warrants or any convertible instruments.

? The company is not maintaining a separate office for the chairman

? There is no Unpaid dividends have deposited in the Investor Education and Protection fund