SPEECH BY DR. M. SAI KUMAR, I.A.S., CHAIRMAN AND MANAGING DIRECTOR, TNPL AT THE42ND ANNUAL GENERAL MEETING OF SHAREHOLDERS OF THE COMPANY ON THURSDAY, THE 22ND SEPTEMBER, 2022 AT 10.30 AM THROUGH VIDEO CONFERENCE.

I extend my warm welcome to all of you to this 42nd Annual General Meeting of your Company. The Directors' Report and the Audited Accounts for the year ended 31st March, 2022 have been with you for some time and with your permission, I shall take them as read. I trust you would have gone through the same by now and you are pleased with the performance achieved by the Company post the Covid pandemic.

Your Company commenced newsprint and printing and writing paper production in the year 1984 with a capacity of 90,000 Metric Tonnesper annum. Your company had enhanced the capacity to 4,00,000Metric Tonnes per annum in four phases. During 2016, the company had set up a state-of-the-art Packaging Board Plant with an annual capacity of 2,00,000Metric Tonnes per annum in Mondipatti village, Manaparaitaluk, Trichy District and enhanced the total capacity to 6,00,000 Metric Tonnes per annum.

With this, your Company has emerged as the third largest player in the Indian Paper Industry. The pulping capacity has been increased from 300 tonnes per day (tpd) in 1984 to 1,180 tonnes per day. Over the years, your Company has carved out a niche for itself.

Your company has been operating with a Vision to be the market leader in Paper

and Paperboards, by adopting Innovative Technologies. In line with the above Vision, the company's Mission has been to be the manufacturer of World Class

Paper and Paperboards, to the tune of 1.0 million Tons by 2030 and to be the most preferred Supplier. In this context, the company has prepared a Roadmap for the next 5 years , covering all the three manufacturing units.

With Covid 19 and the Russia Ukraine war, the last two years have been tumultuous for the Global and Indian economy.

The situation was more challenging for the company since most of the paper produced is used for education, writing,printing and other office applications. Covid 19 led to the closure of all educational institutions, offices and Government institutions and demand for paper was significantly reduced. Being in a highly capital intensive industry, where fixed costs are very high, the profitability of the company suffered tremendously due to this poor demand, high inventory and low market prices.

The year 2021-22 began on a slow note with poor demand. During the second wave of Covid international and domestic markets again went into a tailspin. The company was able to keep all the machines running due to the extensive dealer network within India and our wide presence in the international markets.

With the successful nationwide Covid vaccination program and efforts of the government the country was able to contain the pandemic and gradually schools,

colleges and offices started opening up. Towards the end of last quarter of the year markets were buoyant and were able to sell all the accumulated inventory and achieved zero stocks at Unit I after eight years.

The year was reasonably good for the packaging segment. While order books and demand were strong, there were pressures due to very high raw material costs and logistics issues. Covid 19 led to a delay in the installation of our new pulp mill and consequently our proposed shift towards 100% virgin grades on the packaging board machine got affected. However, as a strategy, we gradually increased our focus towards the fast-growing high value-added cup stock segment which uses more of our indigenous pulp.

Demand for paper for education purposes is cyclic with periods of low demand and very high demand. Since customer demands are specific made to order sizes makes it difficult for demand forecasting, a lot of inventory accumulation and price corrections happen during the lean periods. Considering this typical nature of the market, your company has started to increase its focus towards industrial uses of paper which will ensure that there is a more uniform off-take of paper during the entire year. We have developed certain grades of industrial papers like sublimation papers, Cup Stocks and papers for offline coating applications to ensure greater regularity of demand. Increased focus is being put to ensure higher penetration in these segments.

Efforts are also on to improve the sales realisations of different varieties of paper made by the company by optimizing the product and locational mix. Regular evaluation of the distribution network and appointment of new distributors is being 3

done. Increased focus is being laid on greater financial discipline and control measures as well as timely collection of receivables.

On an overall basis the year ended on an optimistic note and we expect the next year to be very good.

Overall demand for Paper and Packaging boards is expected to grow. With greater focus on "Make in India" we expect exports of paper and converted paper products to be robust in future. A strong and robust domestic demand coupled with strategic exports of both paper and converted paper products augers well for the Indian Paper industry. The company is well positioned to take full advantage of this bright future outlook.

During the year, your Company has produced 3,88,881Metric Tonnes of paper and achieved paper sales of 4,38,010 Metric Tonnes. With the commissioning of Multilayer Double Coated Board Plant, your Company has made a foray into the Packaging Board segment. In the year under review, your Company has produced 1,83,770Metric Tonnes of packaging board and achieved packaging board sales of1,84,546Metric Tonnes.3,06,591tonnes of Hardwood Pulp, Chemical Bagasse Pulp and Deinked Pulp were produced during the year.

During the year, your Company has exported 1,44,000Metric Tonnes of paper and 21,766Metric Tonnes of board, i.e.33% of total paper salesand 12% of total board sales is by way of exports to around 30 countries. Economies of scale and quality

production, driven by technology, provide us with a competitive edge in these markets.

Rise in input costs especially for coal, electrical power and imported pulp grades put enormous stress on the financials of the Company. However, the Company is putting its best efforts to mitigate this through various internal efficiency measures.

The company has achieved a higher PBDT and PAT compared to the previous year despite adverse conditions in the domestic and export markets and increase in input costs. Profit before tax is Rs.22.03 crore and Profit after tax Rs.14.33 crore. Market Capitalization as on 31.03.2022 was Rs.1,160.32crore. The total assets value is Rs.5,774Crores.

Despite requirement of funds for capital expenditure and repayment of loans, the Board of Directors of your company has recommended payment of dividend at Rs.4/- per share i.e. 40% out of free reserves of the company.During the year 2021-22, overall borrowings decreased by Rs.489 crore.

3. TNPL is one among the 29 companies awarded with both shield and 5

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