Balkrishna Paper Mills Limited has scheduled a remote e-voting process from June 3 to July 2, 2026, to seek shareholder approval for a scheme of reduction of share capital and several material related party transactions. The proposal aims to address the company's accumulated losses, which stood at ₹2,78,39,19,643 as per the limited review financial statements for the quarter ended September 30, 2025, and to reorganize its capital structure.

Scheme of Reduction of Share Capital

The Board of Directors has proposed a scheme to reduce the issued, subscribed and paid-up equity share capital by lowering the face value of 3,22,19,532 equity shares from ₹10 each to ₹1 each. This reduction will adjust accumulated losses first against the Securities Premium Reserve of ₹23,28,61,241 and then against the paid-up equity share capital. Furthermore, the entire issued preference share capital of ₹1,10,00,00,000, comprising 1,10,00,000 6.5% Non-Cumulative Redeemable Preference Shares, will be cancelled and extinguished. The consideration payable to preference shareholders will be treated as an unsecured non-interest bearing loan in the company's books until adequate funds become available for discharge.

The table below outlines the financial impact of the proposed adjustments:

Material Related Party Transactions

Shareholders will also vote on ordinary resolutions to approve material related party transactions. The company seeks approval to enter into transactions with Futuristic Concepts Media LLP, Sanchna Trading and Finance Limited, S P Finance and Trading Limited, Poddar Bio Diesel Private Limited, and Wavelink Fabrics LLP regarding the reduction of preference share capital.

Additionally, the company proposes to avail Inter Corporate Deposits (ICDs) from S P Finance and Trading Limited and Sanchna Trading and Finance Limited. The company seeks approval for ICDs up to ₹25 crore for FY 2026-27 and up to ₹25 crore for FY 2027-28 from each entity, in one or more tranches, at an interest rate of up to 12% per annum. These transactions are deemed material as the company's turnover for FY 2024-25 was ₹2.32 crore, and the proposed limits exceed the 10% materiality threshold.

Voting Process and Timelines

The remote e-voting period commences at 9:00 a.m. IST on June 3, 2026, and concludes at 5:00 p.m. IST on July 2, 2026. The cut-off date to determine shareholder eligibility is May 22, 2026. The results of the postal ballot are expected to be declared on or before July 4, 2026. Mr. Prasen Naithani, Practicing Company Secretary, has been appointed as the scrutinizer to conduct the process. The scheme requires approval from the National Company Law Tribunal and other regulatory authorities to become effective.

Balkrishna Paper Mills has reported a net loss of ₹651.63 lakh for the financial year ended March 31, 2026, a sharp reversal from the net profit of ₹818.65 lakh recorded in the previous year. Revenue from operations for FY26 stood at ₹484.02 lakh, a significant increase from ₹241.16 lakh in FY25. The company's net worth remains negative at ₹17,544.16 lakh as of March 31, 2026, indicating material uncertainty about its ability to continue as a going concern.

Financial Performance

The audited financial results for the year ended March 31, 2026, reflect a challenging operational environment. Total income rose to ₹484.02 lakh from ₹241.16 lakh in the prior year, while total expenses increased to ₹1,172.60 lakh, driven by finance costs of ₹607.95 lakh. The net loss for the quarter ended March 31, 2026, was ₹275.74 lakh.

Board Decisions and Appointments

The Board approved the re-appointment of M/s. K. M. Garg & Co., Chartered Accountants, as Internal Auditors for FY26-27. Shri Anuraag Poddar was re-appointed as Chairman and Managing Director for three years from February 11, 2027, to February 10, 2030, subject to shareholder approval. Shri Manish Malpani was re-appointed as Whole time Director & CFO for three years from December 9, 2026, to December 8, 2029. Prof. (Dr.) Mangesh D. Teli was re-appointed as a Non-Executive Independent Director for a second term of five years from December 9, 2026, to December 8, 2031, subject to shareholder approval.

Auditor's Report and Going Concern

Statutory auditors M/s D S M R & Co issued a qualified opinion, highlighting the negative net worth and the discontinuance of manufacturing activities at Ambivali. Management stated that the company is engaged in trading paper and paperboards and is confident in improving operations to generate future cash flows. The financial results were prepared on a going concern basis based on these assumptions.