Orient Paper & Industries carries a clean audit record across seven years, but that record sits atop three structural strains: two years of operating cash losses alongside rising capital spending, and recurring governance exceptions that include excess director pay and persistent control gaps at one unit.
Key findings
- Operating cash flow has been absent for two years while capex continues
Major- The company reported standalone cash losses of ₹4,805.34 lacs in FY2025-26 and ₹4,267.72 lacs in FY2024-25. Capital expenditure ran at ₹51.50 crore in FY2025-26, ₹66.99 crore in FY2024-25, ₹158 crore in FY2023-24, ₹130 crore in FY2022-23, ₹127 crore in FY2021-22, ₹19.07 crore in FY2020-21, and ₹58.08 crore in FY2019-20. The Board recommended no dividend for FY2024-25 and FY2025-26. - Audit opinions are unqualified, but the Brajrajnagar unit has persistent control gaps
Major- The statutory auditor issued unqualified opinions across all seven years from FY2019-20 through FY2025-26. Yet in FY2025-26, FY2024-25, and FY2023-24, the auditor reported that the back-up of books of account was not kept on servers physically located in India on a daily basis for the Brajrajnagar unit, and the audit trail facility was not enabled for its general ledger software. In FY2019-20, the auditor reported a cumulative inventory shortfall of ₹8.06 crore resulting from manipulation of stock records by a staff member. - Managing Director remuneration has repeatedly exceeded statutory limits
Major- The auditor reported that remuneration paid to a whole-time director exceeded the limit under Section 197 read with Schedule V in FY2025-26, FY2023-24, and FY2022-23. For FY2022-23, the company sought a special resolution to waive recovery of ₹13,00,000 excess remuneration paid to Mr. Ashwin J. Laddha, MD & CEO. At the AGM on 10 August 2023, the resolution to revise his remuneration drew 67.71% votes against from public institutions, and the ESOP Scheme 2023 resolution on 9 November 2023 drew 56.77% institutional votes against. - The company adopted the lower Section 115BAA tax rate in FY2026 after years of declining
Minor- In FY2026, Orient Paper exercised the option under Section 115BAA of the Income Tax Act, switching the statutory tax rate from 34.944% to 25.168%, which produced a net deferred tax credit of ₹4,848.71 lacs in the profit and loss account. From FY2020 through FY2024, the company had repeatedly stated it had not opted for the lower rate. - Statutory auditor rotated from Price Waterhouse to BSR & Co. after a five-year tenure
Clean- Price Waterhouse & Co Chartered Accountants LLP served as statutory auditor through FY2021-22, and B S R & Co. LLP was appointed for five years at the AGM on 10 August 2022 with 99.9989% of valid votes in favour. BSR has signed the standalone audit reports from FY2022-23 through FY2025-26, and no NFRA, ICAI, SEBI, or court actions against either auditor are disclosed in any annual report across the seven-year period. - Revenue recognition is routine with no customer concentration
Clean- No single customer represented 10% or more of total revenue in FY2026. Revenue increased 1.13% to ₹905.95 crore in FY2026 from ₹895.79 crore in FY2025, and advances from customers of ₹1,832.24 lacs as at 31 March 2025 were recognised as revenue during FY2026.
What to watch
- Water-charges writ petition. Outcome of the Madhya Pradesh High Court proceedings, which have been under interim stay since at least FY2020.
- Arbitral award enforcement. Resolution of proceedings in favour of M/s Chandra Nirman Private Limited, where 50% deposit was ordered on 2 February 2026.
- CGST demand appeal. Appeal against the ₹9.39 crore demand confirmed on 26 September 2025 and received on 8 October 2025.
- BSR & Co. term expiry. The current five-year term expires at the AGM held in calendar year 2027.
Bottom line: This is a disclosed and audited record where the audit opinions themselves are unqualified. The risk concentrates in three places: a water-charges contingent liability that carries no provision, a cash-flow profile that has generated operating cash losses for two consecutive years while capex continues, and a governance pattern of excess director pay that institutional shareholders have repeatedly opposed. Watch the High Court writ petition and the next AGM’s remuneration resolutions.