Knack Packaging Limited

About Knack Packaging Limited

The industry in which we operate in India is subject to various laws and regulations, including but not limited to environmental regulations, waste management laws, packaging material standards, and labour laws, as detailed in the "Key Regulations and Policies in India" on page no. 274. Any changes or amendments to these laws and regulations, or the introduction of new regulations in future, could impose additional compliance requirements on our Company. Such regulatory changes may be uncertain in nature and timing, and could require significant adjustments to our business practices, manufacturing processes, sourcing of raw materials, or waste management. Compliance with new or amended regulations may increase our operational costs, affect our production 51 timelines, or limit the use of certain packaging materials, which could adversely impact our financial condition and results of operations. Further, we cannot predict the impact of any changes in or interpretations of existing, or the promulgation of, new laws, rules and regulations applicable to us and our business. Unfavourable changes in or interpretations of existing, or the promulgation of new laws, rules and regulations including foreign investment and stamp duty laws governing our business and operations could result in us, our business, operations or group structure being deemed to be in contravention of such laws and/or may require us to apply for additional approvals. We may incur increased costs and expend resources relating to compliance with such new requirements, which may also require significant management time, and any failure to comply may adversely affect our business, results of operations, cash flows and financial condition. 29. We have certain contingent liabilities, amounting to 10.22% of our net worth, as on March 31, 2026 , which have not been provided for in our financial statements, which, if they materialize, may adversely affect our business, results of operations and financial condition. The following table summarizes our contingent liabilities and commitments as on March 31, 2026, March 31, 2025, and March 31, 2024, as determined in accordance with Ind AS 37, are described below: (in ₹ million) Particulars As at March 31, 2026 As at March 31, 2025 As at March 31, 2024 A) Claims against the Group not acknowledged as debts i) Tax matters in dispute under Appeal: - Goods and Services Tax 27.26 Nil 23.63 - Income Tax 0.72 0.72 0.72 - Customs 19.58 Nil Nil B) Guarantees excluding financial guarantees i) Outstanding bank 46.35 50.35 35.05 guarantees ii) corporate guarantees given 220.93 - 467.00 to/ on behalf of related party(3) Total 314.84 51.07 526.40 Contingent liabilities as a % 10.22 2.38 37.43 of net worth (%) C) Commitments i) Estimated amount of 379.58 238.23 141.26 contracts remaining to be executed on capital account and not provided for ii) Other commitments(1)(2) 47.42 43.26 Nil 1. The Parent Company entered into a joint venture agreement on April 28, 2025, with “Sacos Y Empaques Internacionales S.A. de C.V.” (holding 40% interest) and “Mauricio Ferretis Diaz Infante” (holding 10% interest) to establish a jointly controlled entity named Sayem Knack S.A. de C.V., in which the Parent Company holds a 50% ownership interest. Sacos Y Empaques Internacionales S.A. de C.V. a key strategic customer of the Parent Company is engaged in the manufacture of packaging products in Mexico and is not a publicly listed entity. On August 6, 2025, the Company fulfilled its capital commitment of USD 0.5 Million towards the jointly controlled entity. Subsequently, on December 30, 2025, the equity interests held by “Sacos Y Empaques Internacionales S.A. de C.V.” and “Mauricio Ferretis Diaz Infante” in the joint venture were transferred to "Bessher Holding S.A.P.I. de C.V." The said transfer was duly approved by the shareholders of the joint venture. Post transfer Parent Company is holding 50% interest and Bessher Holding S.A.P.I. de C.V. is holding 50% interest. 2. Pursuant to a Board Resolution dated January 24, 2026 passed by the Parent Company approving a loan of USD 1.50 Million to the Joint Venture "Sayem Knack S.A. de C.V.", out of which Parent Company has disbursed USD 1 Million as on reporting date. Post transfer Company is holding 50% interest and Bessher Holding S.A.P.I. de C.V. is holding 50% interest. 3. Corporate Guarantee is given by the Parent Company on behalf of its Joint Venture (Sayem Knack S.A. de C.V.) to B&B Verpackungstechnik GmbH and it is within the approved limits as mentioned in the special resolution passed by the shareholders on March 27, 2025. Further our Subsidiary, Knack Packaging SA (RF) Proprietary Limited, does not have contingent liability. The outstanding liabilities of our Subsidiary, Knack Packaging SA (RF) Proprietary Limited on standalone basis for the Fiscal 2026, 2025 and 2024 are as follows: (in ₹ million) Particulars Fiscal 2026 Fiscal 2025 Fiscal 2024 Statutory dues 2.42 0.96 0.98 52 Income tax liabilities* 11.24 0.59 0.39 * Income tax provision made at the end of the relevant period/fiscal Our contingent liabilities may become actual liabilities. If a significant portion of these liabilities materialize, it could have an adverse effect on our business, results of operations and financial condition. While we have not witnessed any contingent liabilities turning into actual liabilities in last three Fiscal years, there can be no assurance that we will not witness similar or increased levels of contingent liabilities turning into actual liabilities in the current Fiscal year or in the future. For details, see “Restated Consolidated Financial Information – Note 38 - Contingent liabilities and commitments” on page 355. 30. Our success is largely dependent upon our ability to design and develop new sustainable packaging solutions suitable for evolving needs of our customers and market trends. Any inability to do so could adversely affect our business, financial condition, cash flows and results of operations. Our ability to develop new-aged packaging solutions based on our customers’ needs and evolving market trends is highly dependent on effective functioning of our new product development. We offer our packaging products across a wide range of industries such as grains and pulses – rice, dal, lentils, etc., flour & spices, sugar, salts, fruits & nuts, animal & pet f