Terms and rights attached to equity shares

The Company has only one class of equity shares having a par value of H 2/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting and is accounted for in the year in which it is approved by the shareholders in the general meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

61.25.000 Non-Convertible Redeemable Preference Shares (NCRPS) were issued with a tenure of 12 years, carrying an 8% noncumulative dividend. An option of conversion was inserted in these preference Shares later which makes the instrument Optionally Convertible Non-Cumulative Redeemable Preference Shares (OCRPS). The company had the option for converting the OCRPS into a fixed number of equity shares upon the completion of 12 years from the date of allotment. Additionally, provisions existed for early redemption or conversion, subject to mutual agreement between the Company and the OCRPS holders at a duly convened meeting.

However, the Company's option to convert the OCRPS into equity shares was subject to a knock-out condition, whereby such conversion would become non-exercisable if the average market price of the Company's equity shares during the 26 weeks immediately preceding the redemption or proposed conversion date was less than H180 per share. Upon the occurrence of such an event, the Company would be obligated to redeem the OCRPS at a predetermined value.

On the scheduled date of redemption/conversion of 22,50,000 shares (last year 20,00,000 shares ) the knock-out condition was triggered, as the average market price of the equity shares fell below H180 per share. Consequently, the Company was not permitted to exercise the option of conversion.

Subsequently, in respect of 15,00,000 shares, with the prior approval of both the OCRPS holders and the equity shareholders, the tenure of the said preference shares has been extended by an additional four years and the shares have been reclassified as 8% Non-Convertible Non-Cumulative Preference Shares (Series II Tranche-I NCRPS), bearing the same 8% non-cumulative dividend and

7.50.000 share were redeemed on their respective date of redemption out of the reserve of the company.

The Series II Tranche-I NCRPS shall be redeemable at a premium of H717 per share, and the redemption shall take place at the end of four years from the date of variation, i.e., upon completion of 16 years from the original date of allotment. These Series II Tranche-I NCRPS may be redeemed before maturity at mutually agreed premium.

All other terms and conditions associated with the original issuance of the Preference Shares remain unchanged.

The NCRPS is classified as long-term debt, measured at an amortized cost from the date of variation in its terms. The difference in valuation arising from the reclassification of 15,00,000 nos (last year 20,00,000 nos) Preference Shares from equity to debt has been adjusted against retained earnings

The Company declares and pays dividends in Indian Rupees on a pro-rata basis from the date of allotment. Dividends proposed by the Board of Directors are subject to shareholder approval at the ensuing Annual General Meeting. Holders of OCRPS and NCRPS have voting rights on matters relating to their respective classes of shares.

In the event of liquidation of the Company prior to conversion or redemption, OCRPS and NCRPS holders shall have priority over equity shareholders in the repayment of capital.

Retained earnings

This represents the cumulative profits that the company has earned till date, less any transfers to General reserve, dividends or other distributions paid to shareholders. and can be utilized in accordance with the provisions of the Companies Act, 2013.

Securities premium

This reserve represents the amount of premium received on issue of shares, which may be utilised for purposes specified under the Companies Act, 2013.

Capital redemption reserve

Represents the nominal value of Preference shares redeemed in accordance with Section 55 of the Companies Act, 2013.

General reserve

This represents free reserves of the Company created through transfer of profits from retained earnings.

Capital reserve

This reserve represents the excess of net assets purchased over consideration paid against the identifiable assets.

Equity instruments through other comprehensive income

This reserve represents the cumulative gains (net of losses) arising on the valuation of Equity instruments measured at fair value through Other Comprehensive Income, net of amounts reclassified to retained earnings when those equity instruments are disposed off.

Defined benefit plans through other comprehensive income

This reserve represents actuarial gain (net of losses) arising from the remeasurement of defined benefit plans including change in actuarial assumptions of gratuity liability.

2.50 DISCLOSURES ON FINANCIAL INSTRUMENTS

This section gives an overview of the significance of financial instruments for the Company and provides additional information on balance sheet items that contain financial instruments.

The details of material accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 2 (i) to the financial statements.

(a) Financial assets and liabilities

The following tables presents the carrying value and fair value of each category of financial assets and liabilities as at 31st March, 2026 and 31st March, 2025.

2.52 FINANCIAL RISK MANAGEMENT

The company's business activities are exposed to a variety of financial risks, namely liquidity risk, market risks and credit risk. The Company's senior management has the overall responsibility for establishing and governing the Company's risk management framework. The Company has established a Risk Management system, which is responsible for developing and monitoring the Company's risk management policies. The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are also placed before the Audit Committee of the Company.

A. MANAGEMENT OF LIQUIDITY RISK

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company's approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses. In doing this, management considers both normal and stressed conditions.

The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended 31st March, 2026 and 31st March, 2025. Cash flow from operating activities provides the funds to service the financial liabilities on a day-to-day basis.

The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on on-going basis to meet operational needs. Any short term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits and other highly marketable debt investments with appropriate maturities to optimise the cash returns on investments while ensuring sufficient liquidity to meet its liabilities.

The following table shows the maturity analysis of the Company's financial liabilities and financial asset based on contractually agreed cash flows along with its carrying value as at the Balance Sheet date.

B. MANAGEMENT OF MARKET RISK

The Company's size and operations result in it being exposed to the following market risks that arise from its use of financial instruments:

• currency risk;

• price risk; and

• interest rate risk

The above risks may affect the Company's income and expenses, or the value of its financial instruments. The Company has a risk management policy which not only covers the foreign exchange risks but also other risks associated with the financial assets and liabilities such as interest rate risks and credit risks. The risk management policy is approved by the board of directors.

(i) Market risk

Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

a) Foreign currency exchange rate risk:

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit and loss and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency.

Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates. The risks primarily relate to fluctuations in U.S. dollar, Euro and GBP against the functional currencies of the Company.

The Company, as per its risk management policy, uses forward cover and other derivative instruments primarily to hedge foreign exchange exposure. Any weakening of the functional currency may impact the Company's imports, exports and cost of borrowings and consequently may impact profitability of the company.

The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using derivative financial instruments in accordance with its risk management policies.

1% appreciation/depreciation of the respective foreign currencies with respect to functional currency of the Company would result in decrease/increase in the Company's net profit/(loss) before tax by approximately H0.38 crores and Nil crores for financial assets and financial liabilities respectively for the year ended March 31, 2025.

b) Interest rate risk

Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rates. Any movement in the reference rates could have an impact on the Company's cash flows as well as costs.

The Company is subject to variable interest rates on some of its interest bearing liabilities. The Company's interest rate exposure is mainly related to debt obligations. The Company also uses a mix of interest rate sensitive financial instruments to manage the liquidity and fund requirements for its day to day operations like short-term loans.

c) Equity Price risk

Equity Price Risk is related to the change in market reference price of the investments in equity securities. The company is not an active investor in equity markets; it continues to hold certain investments in equity for long term value accretion which are accordingly measured at fair value through Other Comprehensive Income.

The fair value of Company's investment in quoted equity securities as at March 31, 2026 and March 31, 2025 was H 36.70 crores, and H 54.11 crores, respectively. A 10% change in equity price as at March 31, 2026 and March 31, 2025 would result in an impact of H 3.67 crores and H5.41 crores, respectively.

(Note: The impact is indicated on equity before consequential tax impact, if any).

(ii) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counter-party fails to meet its contractual obligations. The Company is exposed to credit risk mainly from trade receivables and other financial assets. The Company only deals with parties which has good credit ratings / worthiness based on company's internal assessment.

Trade receivables

Concentration of credit risk with respect to trade receivables are limited, due to the Company's customer base being large and diverse. All trade receivables are reviewed and assessed for default on a quarterly basis.

Our historical experience of collecting receivables is that credit risk is low. Hence, trade receivables are considered to be a single class of financial assets.

Other financial assets

The Company maintains exposure in cash and cash equivalents, term deposits with banks, investments in treasury bills, government securities, money market liquid mutual funds and derivative instrument with financial institutions. The Company has set counter-parties limits based on multiple factors including financial position, credit rating, etc.

The Company's maximum exposure to credit risk as at 31st March, 2026 and 31st March, 2025 is the carrying value of each class of financial assets.

C. COMPETITION AND PRICE RISK MANAGEMENT

The Company faces competition from local and foreign competitors. Nevertheless, it believes that it has competitive advantage in terms of high quality products and by continuously upgrading its expertise and range of products to meet the needs of its customers.

D. COMMODITY PRICE RISK MANAGEMENT

Commodity price risk for the Company is mainly related to fluctuations in raw material prices linked to various external factors, which can affect the production cost of the Company. Since the raw material cost costs is one of the primary costs drivers, any fluctuation in raw material prices (pulp and waste paper etc.) can lead to variability in operating margin.

The company has developed sustainable relation with leading domestic and international suppliers of raw material, which enable procurement at most competitive rates. Dedicated expert team and market intelligence supports the company procurement functions.

2.54 FAIR VALUE HIERACHY

Level 1 - Quoted Prices (Unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following tables presents fair value hierachy of assets and liabilities measured at fair value on a recurring basis -

2.56 DISCLOSURES REQUIRED UNDER THE MICRO SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT.

Based on the information available, there are certain vendors who have confirmed that they are covered under the Micro, Small and Medium Enterprises Development Act, 2006. Disclosures relating to dues of Micro and Small enterprises under section 22 of 'The Micro, Small and Medium Enterprises Development Act, 2006, are given below:

2.61 Long term leases Company as lessee

The Company has long term lease contracts for lands used in its business and operations. The lease terms ranges upto 99 years. The Company's obligations under its leases are secured by the lessor's title to the leased assets.

The carrying amounts of right-of-use assets and its movement during the year is disclosed in Note no 2.1 under the head Leasehold land (RoU Assets)

2.62 Short term leases

The Company's leasing arrangements are in respect of short term leases. These leasing arrangements which are cancellable for period of 11 months and the Company has elected not to recognize ROU assets hence, lease liabilities for short term leases and recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term. The Company has paid lease rentals of H 0.42 crore ( Previous year - H 0.41 crore) which is included in other expenses.

2.63 The Company's business activity falls within a single primary business segment which is “Manufacture of Paper and Paper Board” and the Company primarily operates in India. As per Ind AS 108 “Operating Segments”, specified under Section 133 of the Companies Act, 2013, there are no reportable operating or geographical segments applicable to the Company.

i) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (ultimate beneficiaries) or

ii) Provide any Guarantee, Security, or the like to or on behalf of the Ultimate Beneficiaries.

f) The Company has not received any fund from any Person(s) or Entity(ies), including Foreign Entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

i) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or

ii) Provide any Guarantee, Security, or the like on behalf of the ultimate beneficiaries.

g) The Company has no such transaction which is not recorded in the Books of Accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

h) The Company has not been declared willful defaulter by any Banks or any other Financial Institution at any time during the financial year.

i) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

2.67 The Government of India has notified the four Labour Codes (“New Labour Codes”) effective from November 21, 2025. Based on the draft Central Rules and FAQs issued by the Ministry of Labour & Employment (MoLE), the Company has assessed the incremental impact on retiral obligations at H1.25 Crores and has disclosed the same as an Exceptional Item, in line with the best information presently available and consistent with the guidance issued by the Institute of Chartered Accountants of India. The Company will continue to monitor developments relating to the New Labour Codes and will give appropriate accounting effect, as necessary.

2.68 The Board of I Directors has recommended a dividend of H3.20/- per equity share (160%) having face value of H2 each and H8/- per preference shares (8%) having face value of H100/- each for the financial year 2025-26.

2.69 Corresponding figures of the previous period have been regrouped/ rearranged wherever necessary.