Submission of SIPM Annual report

THE SOUTH INDIA PAPER MILLS LIMITED : Chikkayana Chatra, Nanjangu d - 571 302, Karnataka State, India ‘‘Cohrpmo roatme : ‘:4::'::; Office :: #12055 / 1206, Prestige Meridian II, M.G Road, Bangalore - 560 001, Ret: Stock- Ex/Reg 34(1)/ 2026/ 854 BSE Limited 24.08.2026 25™ Floor, PhirozeJeejeebhoyTowers Dalal Street Mumbai 400 001 Tel: (022) 2272 1233/34 Dear Sir, Sub: Submission of Annual Report for FY 2025-24 Scrip Code : 514108 bW ee hw ei ls dh ot no i Tn hf uo rr sm d ay yo ,u 1 t 7h ta t S et phe t e6 m7 b" e A rn 2n 0u 2a 6l oG te n 1e 1r .3a 0l M ae e bt yi n Vg do ef o u Cr nC fo em rep na cn ey will fRP oeu rr q ts u hu i ea r n e Ft m Y e 2nt 0to 2s 5) - R 2Re 6eg gu ful ola ra t yti i oo o un n r s r,3 e4 f2( e01 r1) e5 n cwo ef e . aSE rB eI su( bL mi is tti tn ig n g hOb el ri eg wa it ti ho n ts h ea An nd n uD ai ls c Rl eo ps ou rr te Kindly take the same on your records. Thanking you, Yours faithfully For THE SOUTH INDIA PAPER MILLS LTD Vidya g Bhat = %5kl Vidya Bhat Company Secretary Encl: as above SIPM — CIN (Corporate Identity No.) L85110KA1959PLC001352 FACTORY : PHONE : (91) (08221) 228265-67 CORPORATE : PHONE : (91) (080) 41123605 E--mmaaiill :: marketing @sipaperd.com Gr: aPAPEmRMIsLLS Web: wwsw.siipapter.ecom DIRECTORS’ REPORT The Members Your Directors hereby present the 67th Annual Report of the Company along with the audited accounts for the year ended 31st March, 2026. The Company has adopted Indian Accounting Standards (Ind AS), from the financial year 2017-18 as mandated by the Ministry of Corporate Affairs (MCA), in place of Indian GAAP, followed earlier. Financial statements for the current year, including figures of the previous year are based on IndAS and this adoption has no major impact for the Statement of Profit and Loss. WORKING RESULTS FY 2025-26 FY 2024-25 FY 2023-24 FY 2022-23 Finished Production of Paper & Paperboards 90,457 MTs 76,721 MTs 69,833 MTs 50,867 MTs Conversion Quantity at the Box Plant (PPD) 25,709 MTs 23,918 MTs 25,789 MTs 28,068 MTs (` in lakhs) (` in lakhs) (` in lakhs) (` in lakhs) Revenue from Operations 43,381.21 36,931.47 31,230.62 28,785.11 FINANCIAL RESULTS: Profit/(Loss) before interest, depreciation & tax 5,126.63 2,252.99 1,870.57 (502.35) Less : Finance costs 2,027.08 1,962.27 1,838.27 1,624.38 Gross/Cash Profit/(Loss) 3,099.55 290.72 32.30 (2,126.73) Less : Depreciation 1,664.68 1,657.10 1,789.45 1,603.39 Profit/(Loss) before Exceptional items & Tax 1,434.87 (1,366.38) (1,757.15) (3,730.12) Add : Exceptional income/(Loss) --- 87.89 (30.01) 1,327.50 Profit/(Loss) after Exceptional items, before tax 1,434.87 (1,278.49) (1,787.16) (2,402.62) Tax( Paid )/ Refund of earlier years 0.84 --- --- --- Less/(Add) : Deferred Tax (charge)/ credit (361.60) 314.42 444.64 752.38 Profit/(Loss) after tax for the year 1074.11 (964.07) (1,342.52) (1,650.24) (Less) / Add : (Tax Provision for earlier years)/ Reversal --- --- (0.25) (16.95) Net Profit/(Loss) after Tax 1074.11 (964.07) (1,342.77) (1,667.19) OPERATIONS Revenue from operations for the financial year 2025-26 at `433.81 crores, increased by 17.46% from `369.31 crores in the previous year. Operation at the Paper Mill improved to 78.32% of the new capacity of PM6 (the only machine operating after scrapping the old machines) from 66.43% in the preceding year. At the Printing & Packaging Division, Conversion tonnage was higher @ 71.41% of the capacity as against 66.44% in the preceding year. 67th Annual Report 2025-2026 Profit before interest, depreciation, tax (PBDIT) in FY 2025-26 improved to `5,127 lakhs, as against `2,253 lakhs, in the preceding year. Profitability improved substantially on account of higher volumes and improved product mix which comprised of higher value added grades. Finance costs increased slightly to `2,027 lakhs (for working capital : `620 lakhs and other Loans : `1,407 lakhs) from `1,962 lakhs ( for working capital : `582 lakhs and other loans : `1,380 lakhs). After making a depreciation provision of `1,665 lakhs (Previous year 1,657 lakhs), Profit before Exceptional Income & Tax was `1,435 lakhs (Previous year loss of `1,366 lakhs). Exceptional Income was Nil as against Insurance claim and salvage receipts towards building and machinery damage caused by fire accident in FY 2023-24, treated as Exceptional income to the extent of `88 lakhs in the previous year. Profit before tax was `1,435 lakhs (previous year loss `1,278 lakhs). Company has opted for new regime of Income tax, wherein effective tax rate is 25.17% sans certain exemptions and allowances like additional depreciation, from FY 2021-22. Due to carry forward losses, cash outflow was NIL and provision for tax in the Profit & Loss statement is a deferred liability. Profit after tax is `1,074 lakhs. Provision for current tax `Nil (Nil) & deferred tax charge `362 lakhs as against deferred tax assets credit of `314 lakhs in the previous year due to loss incurred). Net profit for the year, after income tax refund of `1 lakh, was `1,074 lakhs. (Previous Year loss `964 lakhs). Considering the prevailing economic environment and the internal and external factors, the Company has assessed the carrying amount of property, plant & equipment, receivables, inventories, investments and other assets as at the Balance Sheet date, the current liquidity position including its cash flows, the business outlook and has concluded that no material adjustments are required in these financial results and the Balance Sheet as at 31-3-2026. FINANCES During the year, cash flow & liquidity remained comfortable for most of the time. Operating Profits (EBITDA) for the year 2025-26 increased to `5,126.63 lakhs. Loan Repayments for the year was `2,496.04 lakhs and interest/ finance charges `2,027.08 lakhs, resulting in surplus balance of `603.51 lakhs towards working capital and capex needs. For the FY 2026-27, minimum operating profits required to meet debt obligations is about `4,020 lakhs, comprising of Loan Repayments `2,100 lakhs and interest `1,920 lakhs. Company is planning capital expenditure of about `2,400 lakhs, for energy saving, process efficiency and achieving reduction of down time, with a Term Loan of `1,800 lakhs. 31.03.2026 31.03.2025 Long Term Gross Debt to Equity Ratio 0.53 0.63 Current Ratio 1.14 1.00 Installments of Term Loans and Interest on Term Loans and Working capital borrowings were paid within due dates. DIVIDENDS & RESERVES With a view to conserve funds for operations & important capex requirements, the Directors have not recommended payment of Dividend for FY 2025-26 (Previous year Nil Dividend). No amounts are proposed to be transferred to Reserves. CURRENT PROSPECTS New challenges have cropped up on account of the West Asia war, leading to higher fuel prices and input costs. Company is able to pass on the input costs thus far. However, continued volatility in input costs is a matter of concern. Expectation of higher inflation is yet to kick in. Effect of rise in petrol, diesel prices will be felt in Q1. Demand for Company’s value-added products is robust. And with optimum scale of operation, the Company expects to improve the earnings. The market conditions for paper, though generally competitive, as the industry capacity has increased substantially over the years, is favorable for quality products in the segment in which the Company can operate with the new plant. The market for corrugated boxes has become extremely competitive, as more players shift towards the new technology paradigm in corrugation even as demand growth remains lackluster. The Company is exploring opportunities in new areas of value added grades. DEPOSITS The Company has neither accepted nor renewed any deposits within the meaning of Section 73 of the Companies Act, 2013 and rules framed there under, during the financial year. CREDIT RATING ICRA has downgraded in June 2024, the Company’s Long term Credit rating (for Fund based limits i.e. Term Loans and CC limits) from [ICRA]BBB- with nega [Showing first 8,000 characters — download PDF for full document]