To

The Members,

Astron Paper & Board Mill Limited

Your directors are pleased to present the 15^th Annual Report of the Company, along with the audited financial statements for the financial year ended 31^st March, 2025. The consolidated performance of the Company and its subsidiary have been included wherever applicable.

1. FINANCIAL HIGHLIGHTS:

The Standalone and Consolidated Financial Results for the Year ended 31^st March, 2025 are as follows:

2. FINANCIAL AND OPERATIONAL REVIEW:

During the financial year ended March 31, 2025, our Company achieved an operational revenue of _ 9594.61 lakhs, compared to _ 31,078.77 lakhs in the previous financial year. The Loss after Tax for the year was _ 5230.43 lakhs, compared to a Loss after Tax of _ 878.05 lakhs in the previous financial year. On a consolidated basis, the Company reported a loss of _5671.01 lakhs, compared to a Loss after Tax of _ 1120.73 lakhs in the previous financial year.

The Company's operations were severely impacted due to the closure of its plant from September 2024, resulting in significant losses. Despite efforts to mitigate the losses, the Company was unable to recover and incurred a net loss for the year.

The Board of Directors regrets to inform you that the operations of the Company have remained suspended since September 2024 due to severe financial constraints. The Company, engaged in the manufacture of cra_ has faced significant challenges stemming from unviable raw material costs and inadequate working capital. These factors have led to defaults in repayment of interest and principal obligations to financial institutions, resulting in the classification of the Company's account as a Non-Performing Asset (NPA). Consequently, notices have been issued by lenders to both the Company and its Directors. Despite these setbacks, the management is actively pursuing revival strategies, including discussions with potential strategic investors and restructuring proposals. However, as a listed entity governed by SEBI's Substantial Acquisition of Shares and Takeovers (SAST) Regulations, the Company is restricted from making certain disclosures until formal agreements are finalized. This regulatory limitation has constrained our ability to communicate developments in real time. Furthermore, the Company has received notices from certain creditors seeking initiation of proceedings under the Insolvency and Bankruptcy Code (IBC). A case is currently pending before the Hon'ble National Company Law Tribunal (NCLT), where the Company has been asked to respond to a petition for admission into Corporate Insolvency Resolution Process (CIRP). The Board remains committed to exploring all viable options to restore operations and protect stakeholder interests. We thank our shareholders for their continued patience and support during this challenging period.

3. DIVIDEND

In view of the loss incurred by the Company during the financial year ended March 31, 2025, and considering the Company's dividend distribution policy, the Board of Directors has decided that it would not be prudent to recommend any dividend for the year under review.

4. TRANSFER TO RESERVES

Since the Company has incurred a loss during the financial year ended March 31, 2025, no amount is available for transfer to Reserves.

Pursuant to Section 125 of the Companies Act, 2013, the Company reports that there are no unclaimed dividends remaining unpaid or unclaimed for a period of seven years from the date of declaration, and hence, no amount is required to be transferred to the Investor Education and Protection Fund (IEPF).

5. SHARE CAPITAL:

As on March 31, 2025, the issued, subscribed, and paid-up equity share capital of the Company stood at _ 4650.00 lakhs, comprising 4,65,00,000 equity shares of _ 10.00 each.

6. DEPOSITS:

The Company has not accepted any deposits within the meaning of Sections 73 and 74 of the Companies Act, 2013, and the Companies (Acceptance of Deposits) Rules, 2014, as amended.

7. PARTICULARS OF LOANS, GAURANTEES, OR INVESTMENTS UNDER SECTION 186:

The particulars of loans, guarantees, and investments made by the Company under Section 186 of the Companies Act, 2013, are provided in the Note No. 35 of notes to the Financial Statements.

8. DETAILS OF APPLICATION MADE OR ANY PROCEEDINGS PENDING UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016:

An application has been filed under the Insolvency and Bankruptcy Code, 2016, alleging a default of 177.99 lakh by one of the Company's operational creditors. Additionally, the Company has received notices from certain operational creditors and a financial creditor under the IBC.

9. The details of the difference between the amount of the valuation done at the time of one-time settlement and the valuation done while taking a loan from the Banks or Financial Institutions along with the reasons thereof: The Company did not engage in a one-time settlement with any banks or financial institutions, nor did it undertake a valuation exercise with its lenders.

10. CHANGE IN THE NATURE OF BUSINESS:

The Company's business activities and operations remained unchanged during the financial year under review."

11. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):

Pursuant to Section 152 of the Companies Act, 2013, and the Articles of Association of the Company, Shri Ramakant Kantibhai Patel (DIN: 00233423), Whole-time Director, retires by rotation at the ensuing 15th Annual General Meeting and, being eligible, offers himself for re-appointment. The necessary resolution for his re-appointment is included in the Notice of the 15th AGM.

STATEMENT OF CHANGES IN DIRECTORS AND KMP

During the year 2024-25, the following changes took place in Directors and Key Managerial Personnel of the Company:

12. COMPANY'S POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION:

Pursuant to Sections 134(3) and 178 of the Companies Act, 2013, and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors has adopted a Nomination and Remuneration Policy (NRP) on the recommendation of the Nomination and Remuneration Committee (NRC). Considering the Company's current financial stress and NPA status, the NRP prioritizes prudent and conservative remuneration practices to ensure alignment with the Company's financial position. The NRC ensures that remuneration is reasonable, necessary, and aligned with this challenging period.

13. ANNUAL EVALUATION BY THE BOARD OF ITS OWN PERFORMANCE, ITS COMMITTEES AND INDIVIDUAL DIRECTORS:

Pursuant to Sections 134(3)(p), 149(8), and Schedule IV of the Companies Act, 2013, and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the annual performance evaluation of the Directors, Board, and Committees (Audit, Nomination and Remuneration, and Stakeholders Relationship) was conducted. Given the Company's current financial stress and NPA status, the evaluation focused on key areas such as crisis management, governance, and oversight. The evaluation parameters included Board composition, effectiveness, meeting participation, domain knowledge, and governance awareness. The evaluation aimed to assess the Board's and Committees' effectiveness in navigating the Company through its current challenges.

14. FAMILIARISATION PROGRAMME:

Despite the Company's current financial stress and NPA status, the Board recognizes the importance of ensuring that all Directors, including Independent Directors, are adequately informed and equipped to provide effective oversight. To this end, the Company has in place an induction and familiarization Programme, which includes information on the Company's financial position, risk management, and mitigation strategies. In compliance with Regulation 46(2)(i) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the familiarization Programme for Independent Directors is available on the Company's website.

15. DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirements under Section 134(5) of the Companies Act, 2013, with respect to Director's Responsibility Statement, your Directors hereby confirm the following:

a) in the preparation of the annual accounts for the financial year ended 31st March, 2025, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) the directors have selected such accounting policies and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

c) the directors have taken proper and su_icient care towards the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the directors have prepared the annual accounts on a going concern basis;

e) the directors have laid down internal financial controls, which are adequate and operating effectively;

f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

16. BOARD MEETINGS:

During the financial year 2024-25, the Board of Directors convened 5 (Five) meetings. The details of these meetings, including dates, attendance, and other relevant information, are provided in the Corporate Governance Report, which forms part of this Annual Report.

17. COMMITTEES OF THE BOARD:

Currently, the Board has four (4) Committees:

a) Audit Committee

b) Nomination and Remuneration Committee

c) Stakeholder Relationship Committee

A detailed note on the Board and its committees, composition and compliances, as per the applicable provisions of the Act and Rules are provided under the Corporate Governance Report.

a) STATUTORY AUDITOR:

M/s. S N D K & Associates LLP, Chartered Accountants (FRN: W10060), were appointed as Statutory Auditors for a 5-year term commencing from April 1, 2022, until the conclusion of the 17th Annual General Meeting. Their appointment was approved in the 12th Annual General Meeting.

AUDIT QUALIFICATIONS

The Statutory Auditors have issued the following qualifications:

i. AQ-Regarding Bank Loans being NPA and Defaults in case of bank loans:

The company has availed working capital and other loans from various banks for an amount exceeding 5.00 crores against the security of its assets including current assets. As a part of terms of sanction with various banks, the company is required to submit various monthly, quarterly and periodical statements including stock statements and statement of various assets charged for availing loans including working capital loans. In spite of our specific request to the management of the company, the company has not made available to us such periodical statements if any as submitted to the banks for our verification. In absence of availability of such statements, we have not been able to verify the details and reported amounts as submitted to the banks in quarterly and periodical statements and those accounted in the books of account and variance if any between quarterly and periodical statements and books of accounts, accuracy and truthfulness of reported particulars including that reported amounts as submitted to the bank and defaults with regard to the loans availed by the company with regard to submission of such returns and statements and availability of drawing power or limits against such loans. As all of the bank loans accounts have been declared as NPA, there was no drawing power available against the outstanding bank loan accounts as at March 31, 2025.

We draw attention to Note No. 17, 19 & 20 to the Standalone Financial Statements regarding reported amounts of defaults by the company with regard to non-current and current borrowings and interest on such borrowings from various banks. The company has reported defaults of 7,879.73 Lakhs including interest as at March 31, 2025 towards bank loans. However, in absence su_icient appropriate audit evidence with regard to defaults committed by the company towards loans from various bank, we are unable to verify the details of defaults committed by the company towards such loans and their consequential impact on reported amounts in the standalone financial statements and appropriate disclosure of such defaults, security offered, repayment terms, availability of security, initiation of legal actions by banks against the company including that for fraud if any and other terms and conditions relating to loan accounts.

Management Representation:

The company has availed working capital and other loans from various banks for an amount as outstanding as reported in the standalone financial statements (Refer to Note No. 17 & 19) against the security of its assets including current assets. As a part of terms of sanction with various banks, the company is required to submit various monthly, quarterly and periodical statements including stock statements and statement of various assets charged for availing loans including working capital loans. Due to substantial business losses and non-availability of liquidity, the company could not discharge its liabilities towards bank borrowings and hence subsequently the bank loan accounts from all banks have been declared as NPA and no drawing power was available against the outstanding bank loan accounts as at March 31, 2025.

The company has been performing excellently over the years since incorporation reflected through increasing turnover, production and profits over the years. The loans from various banks have been availed by the company since incorporation including term loans for plant & machineries and factory building as well as working capital in the form of cash credits, buyers' credit and LC facilities. As is the fact the company has been using more than 80.00% of imported raw materials and is prone to international market fluctuations along with other market related. The export remained distressed during the period.

The covid-19 factor had substantial effect on import as well as export. However, the management of the company with its experience and goal driven efforts survived the tough period and maintained the business, turnover and profitability and stabilized the effects of such tough period on the company. However, the efforts took some time but was effective. During this tough period also, the company continued to serve the creditors including bank creditors and there was no default with regard to bank loans. The price volatility coupled with continuous exchange rate upward fluctuations had effect on the prices of imported raw materials. Further due to war like situations at international levels also affected the cost of raw materials as well as landing cost in the form of sea freight and other charges. This also negatively affected the procurement cycle both internationally as well domestic levels. This events in turnover affected the production gradually and thereby turnover.

The financial year 2022-23 and 2023-24, the demand for kra_ paper had mixed response from the market and was somewhat on declining state. The company made best of its efforts to defy the market trend to grow further. However, the market factors of increasing input and other cost and simultaneous declining trend of demand affected the business of the company. In the meantime, many paper mills closed down but the company continued to operate with best of its resources in spite of facing challenges from various factors.

The financial year 2022-23 onwards the company had an uphill task to defying the negative market trend which the company did well upto the financial year 2023-24 and continued to serve the banks liabilities.

Further in the financial year 2022-23, there was Income Tax Department search the company and the litigations continued over the years since then and have been still continuing. This also affected the overall functioning of the company as the key managerial persons had to attend the matters for further actions. However, in the financial year 2024-25 these factors aggravated to the extent that it affected the liquidity of the company substantially and ultimately forced the company to close down its main plants at Halvad from 8th September, 2024. The closure of production then completely took winds out of the company and at last it affected the company to such an extent that the company had no liquid resources to discharge the liabilities towards banks and hence the bank accounts then have been declared as NPA by the banks in the months of December -2024 onwards.

However, the management of the company has been making all efforts to resume the production and business operations so as to regularize bank accounts and discharge its liabilities as are due or become due. The management with its efforts expects to resume business by September- 2025. ii. AQ-2

The company has shut down its plant at Halved since 8th of September, 2024 and has not resumed the production since the closure upto the date of this report. The other plant of the company at Bhuj has also been non-operational. The shut-down of plants and non- resumption of production, substantial cash losses incurred in the last three financial years as well as during the current financial year, non-utilization of production capacity, substantial reduction in sales turnover over the period and other financial factors including availability of liquid sources of funds have affected net worth of company significantly and these factors along with substantial tax demands against which litigations are pending and all of the bank loan accounts becoming NPA and company being declared as defaulter by banks have affected the overall business operations of the company and its ability to resume business activities and to continue the business in the normal course of business as going concern. However, the management of the company has prepared and presented the standalone financial statements assuming its status as going concern. In our opinion, the going concern status of the company has been substantially and materially adversely affected and, in our opinion, the accompanying standalone financial statements for the year ended March 31, 2025 should have been prepared and presented considering the status of the company as not being going concern.

Management Representation:

The company has shut down its plants at Halved since 8th of September, 2024 and has not resumed the production since the closure upto the date of approval the standalone financial statements for the current financial year i.e. 29th May, 2025. The other plant of the company at Bhuj has also been non-operational. Though the company has been facing financial stress and has defaulted in payment to creditors including bank creditors in the financial year 2024-25, the management of the company has been taking all appropriate measures to maintain plant & machineries, operating PPE and operating production facilities so as to commence the normal course of production and business on availability of su_icient sources of funds. Considering the past market presence of the company, operational activities carried out by the company over the years, profits generated in the past, profitable nature of the business, operational capacities available, management efforts to revive the plant operations & business and management experience in the line of business, the management of the company expects to resume normal course of production and business and for that actively making all efforts including efforts to arrange for sources of funds. On resumption of the plant operations & business, the management of the company expects to discharge all of its liabilities towards bank, suppliers and other creditors and continue to operate for foreseeable future.

Thoughthecompanysu_eredlossesfromoperations since last three years on account of various factors and hence had effect on the operations of all plant of the company. Due to losses and liquidity issues, the operations at plants at Bhuj and Halvad have to suspended and halted and could not be recommenced until the year ended 31st March, 2025. However, the management of the company is making sincere efforts to infuse funds in the form of equity and thereby inject liquidity and it is expected the business operations will re-commence in the financial year 2025-26. Considering the possibility of resumption of business operations, the financial results and statements for the year ended have been prepared and presented the status of the company as going concern.

As the management of the company expects to resume plant operations & business in the coming financial year that is financial year 2025-26, the company has operated plants and continued normal business operations upto 8th September, 2024, expects to discharge all of its liabilities towards bank, suppliers and other creditors, expects to continue to operate the normal course of business and management assessment to derive revenue from continued use of operational capacities and not liquidate them in the foreseeable future, the standalone financial statements for the financial year 2024-25 have been prepared assuming company's status as going concern. iii. AQ- Provision for Doubtful Debts:

No Provision has been made by the company for outstanding export trader receivables of 1.60 crores and domestic trade receivables of 1.09 crores which have been outstanding since long. The company continues to recognize and classify these trade receivables as good for recovery. Had the company made provision for doubtful debts, the losses for the year would have been higher by 2.69 crores and consequent net-worth lower by 2.69 crores.

The management of the company has not provided to us for our verification the su_icient appropriate audit evidences on the basis of which it has been assumed that the above trade receivables have been good for recovery at the values at which they have been stated in the standalone financial statements.

Management Representations:

The company had made export of goods to two parties located in China. However, subsequent to shipment of goods from port in India and before goods could reach the destination in China, Corona pandemic spread out across globe and government of various countries imposed restrictions on movement of goods as well as people and economic activities came to standstill. It took some time to normalize the routine operations. On account of above unprecedented reasons, the shipment to the parties was delayed from port. The quantum of outstanding balance is quite huge and the company has been constantly following up the matter with respective parties for realization of the outstanding dues. Though the balances have been outstanding since long and there has been no realizations from the parties, it is likely that the amount may not be recovered but there is some possibility that the dues will be recovered and therefore the company has not made provision for doubtful debts so far. As part of its continuous efforts for recovery of outstanding dues, the management of the company planned to visit the respective parties to discuss the matter regarding recovery. However, due to shut down of the plant during the year and financial stress on that account majority of the staff including marketing department staff have le_ the job. This has restricted the efforts of the company for further course of action in the matter. Based on efforts and communication made so far and possible course of actions, the management of the company is of the view that there is fair possibility that the company may recover due and hence no provision for doubtful debts has been made.

The company had made sale of goods to two companies in the past. The recovery from the customers against the sale had been regular until the last outstanding balances. However, due to issues financial stress the parties have been su_ering the realization from them could not be made. One of the parties from whom amount of 8.00 Lakhs is recoverable is under NCLT proceeding filed against it by lenders which is pending for adjudication. The management of the company has been making continuous efforts to recover amount of 101.12 lakhs as due from one of the customers. It is likely that the amount of 8.00 may not be recovered. However, considering the overall recovery possibilities and pending NCLT proceedings, the management of the company is of the view that there is fair possibility that the company may recover dues outstanding and hence no provision for doubtful debts has been made.

iv. AQ- Provision for Expected Credit Losses:

The company has not made any provision of for Expected Credit Losses on trade receivables and other financial instruments for the financial year ended 31st March, 2025 other than as reported in para (iv) above as required to be made as per Ind-AS-109 ‘Financial Instruments".

Management Representations:

Due to losses in the business, almost all staff of the company including professional staff having knowledge of the account and finance related matters have le_ the company. Further due to liquidity issues and bank accounts becoming NPA and suspension of bank accounts operations, the company could also not avail services of professional in this regard. The company should have made the provisions for expected losses but for the reasons stated above it could not work out the amounts of expected credit losses in compliance with the requirement of Ind-AS-109 and hence no provisions have been made for expected credit losses for the financial year 2024-25 on financial instruments.

v. AQ regarding Loans to Subsidiary Company:

We refer to Note No. 7 of the Standalone Financial Statement regarding "Non-Current Financial Assets: Loans & Advances in respect of loans given to wholly owned subsidiary company. The company has given loans to its wholly owned subsidiary company Balaram Papers Private Limited amounting to 28.66 Crores. The company has not charged any interest on loans and advances of 28.66 Crores for the financial year ended March 31, 2025. The subsidiary company has been incurring losses over the years and its net-worth is substantially negative. The subsidiary company has also outstanding liabilities to be discharged towards bank loans and also to trade payables and other liabilities. The plant of the subsidiary company is also non-operational and the subsidiary company has not carried out any substantial business activities for the year ended March 31, 2025. Further, the company vide extra-ordinary general meeting of its members held on 7th February, 2025 resolved to dispose of the whole of the undertaking of the wholly owned subsidiary company. These factors along with possibility of non-resumption of business activities by the subsidiary in near foreseeable future indicate that the company may not be able to recover the entire amounts of balances of loans as outstanding from the wholly owned subsidiary company and accordingly such loans should have been stated at fair value of amounts realizable if any. However, company has neither accounted any interest for the current financial year nor stated such loans at fair value of realization and continued to carry such investment without providing for any interest as receivable for the current financial year. Had the company recognized such loans as impaired as per Ind-AS 109 "Financial Instruments", the fair value of such loans would have been much lower than at which they have been carried in the standalone financial statements and consequent net-worth of the company would have been lower.

Management Representation:

The Company has extended loans amounting to _28.66 Crores as on 31st March, 2025 to its wholly owned subsidiary, Balaram Papers Private Limited (BPPL), with the objective of supporting essential obligations during a period of financial distress. These loans were provided interest-free, in line with the Company's strategic intent to safeguard its investment and ensure continuity of critical operations, including statutory compliance and asset preservation.

The Board has already obtained shareholder approval for disposal of subsidiary.

The management of the company remains confident that the realisation from asset disposal will be su_icient to recover the full value of the Company's exposure to the subsidiary, comprising both equity investments and unsecured loans. Accordingly, the investment and loans & advances have not been written off, as the recoverability is reasonably assured based on the current disposal plan.

It may further be noted that interest was not charged only during the current financial year (FY 2024–25), as the operations of the subsidiary were fully suspended. In view of this, the Company adopted a conservative accounting approach, refraining from recognizing notional interest income on loans extended to a non-operational entity.

The Management of the company remains committed to reassessing the carrying value of loans in subsequent periods, based on actual progress of asset disposal and recovery.

The Company remains committed to maintaining transparency and compliance with applicable accounting standards, and will revisit the valuation and impairment assessment in subsequentreporting periods based on actual recovery outcomes.

vi. AQ- Investment in Subsidiary:

The company has made investments in 40,35,000 Equity Share of 10.00 each amounting to 4.04 Crores in the wholly owned subsidiary company Balaram Papers Private Limited. The company has at the Extra Ordinary General Meeting of its members held on 7th February, 2025 resolved to dispose of the undertaking of wholly owned subsidiary. Because of the factors stated in para (v) above, these investments should have been impaired. However, no provision has been made for Impairment on such investments and the company has continued to carry such investment at the cost of its acquisition. Had the company made provision for impairment losses on such investment the realizable value of such investment would have been much lower than at which they have been carried in the standalone financial statements or would not have any realizable value at all and consequent net-worth of the company would have been lower to that extent.

Management Representations:

Balaram Papers Private Limited is wholly owned subsidiary of the company wherein the company has made investment in 40,35,000 Equity Share of 10 each amounting to 4,03,50,000. Initially company had been operating and carrying out job-work on behalf of the company. However, due issues related to optimum utilization of production capacities, the company had been incurring marginal losses initially and then due to financial stress, it started su_ering substantially losses. The company was hopeful of reviving the regular operations of the subsidiary company by providing funds. However, the company itself has been su_ering the losses and hence ultimately shut down its operational activities during the year, the operations of subsidiary company could not be revived. Though the plant of the company is non-operational, in the event of disposing of the subsidiary company, the subsidiary company has realizable assets in the form of land, building, plant & machineries and other assets in excess of its liabilities other than due to the company. The management of the company is also of the view that with infusion of further working capital the operations of the subsidiary can also be revived. Considering the possibility of recovery either on disposal assets or unit of the subsidiary or through revival of operations, the investment in the subsidiary has not been tested for impairment.

vii. AQ- Inventory of imported raw materials lying at port:

Inventories of Imported Raw Materials in respect of which Bill of Entries have been filed but have not been li_ed from port have not been accounted in the books of account. As informed to us by the management of the company, the company had received notices for auction against such inventories. As informed to us by the management of the company, some of the goods lying at port have been disposed of through auction. However, no details of goods sold through auction have been made available to us for our verification. The goods sold through auction have not been recognized in the books of account either as sale or inventories. The custom duty paid in respect of goods lying at port or disposed of through the process of auction has been classified as recoverable amount from the custom authorities in the books of account. The payments made to import suppliers have been recognized as amounts recoverable from the respective party in the standalone financial statements. The company has further not accounted corresponding liabilities towards suppliers if any in the books of account. Had the company accounted for above transactions the reportable amounts of revenue, assets, liabilities and losses for the year would have been different from what has been stated in the standalone financial statements. We refer to Note No. 34(IV) to the standalone financial statements wherein the company has reported amounts of 5.78 Crores as Advances Paid for Imported Raw Materials.

In absence of su_icient appropriate audit evidence with regard to position of goods lying at port and disposed of through auction if any, we disclaim our opinion as regard to inventories, revenues, assets and liabilities in this regard.

Management Representation:

The company has been using more than 80.00% of its raw materials i.e. waste paper from imports over the years since the commencement of production. The plants of the company at Halvad were operating upto 8th September, 2024. Before the operations at plants at Halvad were shut down, the company had placed orders for import of raw materials i.e. waste papers from various suppliers. To secure import purchases and negotiate better terms for import and as per prevailing standards on import of goods, the company has been following the system of making advance payment through the bank facilities in the form of Letter of Credit (LC)/Buyer's Credit (BC) to import suppliers. Accordingly, as the operations of the company were going on the company had made advance payments to suppliers of imported raw materials pending receipt of goods. However, in the meantime, the company had to close down its operational activities due to non-availability of liquid sources of funds on account of continuous business losses. As result of this the company could not make further payment to import suppliers if any pending as well to the all service providers as involved in the entire cycle of import of goods including shipping lines and hence the company could not li_ materials from the port. The management of the company made all possible efforts to revive the operational activities and to make payment to suppliers so that imported raw materials could be li_ed from the port. However, the position of the company deteriorated further over the period of time and all bank accounts of the company then were declared as NPA by banks effective from December-2024. Because of the factors stated above, the company could not li_ raw materials from the ports for extended period of time and hence the company had been issued notices for auction of raw materials. However, for reasons of non-availability of su_icient manpower and sources of funds the company could not respond to such notices. The management of the company made possible efforts to get the details of materials sold through auction from various sources including shipping lines. However, due to non-payment of outstanding dues and other factors affecting the business of the company, the company could not get appropriate documentary evidence with regard to materials lying at port at 31st March, 2025 as well as goods disposed of through auction and in absence of documentary evidence, the company could not account for purchase of imported goods and liabilities thereagainst, inventory held at port, sale of goods through auction and give appropriate accounting treatment to amounts paid as custom duty against such import and amounts paid to import suppliers. Accordingly, the company continued to carry amounts paid to import suppliers and custom duties paid as amount recoverable in the books of account as at 31st March, 2025. On availability of appropriate documentary evidences, appropriate treatment of above matters will be given in the books of account.

On account of financial stress which escalated to its optimum point during the financial year 2024-25, the company had to completely shut down its plants from September-2024 onwards. The company had in the meantime placed orders for imported raw materials which arrived at Indian port for li_ off by the company. However, due to suspension of plant operations and liquidity issues, the company did not have resources to pay to the C & F Agents and other charges related to materials li_ing from the port. Due to this the raw materials continued to remain at ports beyond the period of li_ off as per the Customs Law. As a result of non-li_ing of materials, the materials were listed for auction for which notices were sent to the company. However, due to there being no staff with the company and non-co-operation by the C & F agents the company did not have relevant documents as to the materials disposed off through auctions. In spite of its best of efforts, the management of the company could not gather required documentary evidences as to the materials disposed of through auction upto the date of meeting of board of directors for approval of audited financial statements for the year 2024-25 and hence the materials sold through auction could not be accounted in the books of account for the financial year 2024-25. Since, the company did not have requisite documents for accounting for import of goods lying at port, the purchase of goods and corresponding liabilities of suppliers if any could not be accounted in the books of account for the financial year 2024-25 and hence payments made to suppliers of imported materials were carried as such being treated as payments made and supply of goods being treated as pending. viii. AQ-Provision for Gratuity Liabilities:

The company has not made any provision towards gratuity liabilities as per Ind AS-19 "Employee Benefits" for the financial year ended 31st March, 2025.

Management Representations:

The company had been operating its plant and carrying out business operations since its incorporation. There were number of employees who had been working with the company over the years and hence eligible for gratuity payments either on retirement or on termination. Accordingly, the company was making provisions for gratuity liabilities in compliance with Ind-AS-19 "Employee Benefits". However, the factors affecting the business and consequent liquidity issues which were expected to be resolved over the period of time by the management of the company but could not be resolved. This resulted into operational losses in the financial year 2022-23, 2023-24 and also 2024-25. Consequently, company had to close down its plants gradually and the management of the company was making best efforts to infuse the funds and thereby resumption of operations. The company continued to make provision for gratuity liabilities upto the financial year ended 31st March, 2024. However, since September-2024 all of the plants of the company have been non-operational and due to this almost all employees of the company have le_ the employment. Some to these employees have been paid their respective full and final payments. There were very few employees with the company as at 31st March, 2025. Further, there were no employees with department managing the matters related to employees who could prepare details regarding employee gratuity liabilities. Due to there being very few employees with the company as at 31st March, 2025 and there being no employee with the company who could prepare the details for gratuity liabilities working, the company ought it appropriate and also could not provide details to the actuary for working out gratuity liabilities as at 31st March, 2025 and accordingly no provision for gratuity liabilities could be made for gratuity liabilities for the year ended 31st March, 2025.

ix. AQ- Contra Confirmation of Trade Payables and

Trade Receivables:

The outstanding balances of trade receivables and trade payables as at March 31, 2025 as reported in the standalone financial statements have not been contra confirmed by the respective parties and hence the same are subject to confirmations and subsequent reconciliations and subject to claim and legal proceedings for recovery, damages, charges if any of respective parties against the company.

Management Representations:

The company has policy in place to contra confirm accounts of the parties periodically. However, due to the suspension of business operations and non-availability of working staff, this exercise could not be carried out for the financial year 2024-25.

x. AQ-Inventory Write Down:

As informed to us by the management of the company, due to shut down of the plants, the quality of waste papers, chemical items, packing materials, coal and finished goods has deteriorated and hence they have been written down below their cost as per the estimates made by the management of the company regarding recoverable value of such inventories. The company has written down inventories of 9.74 crores during financial year ended March 31, 2025. The reported amounts of losses for the financial year ended 31st March, 2025 includes the effect of such write down under respective head of raw materials consumed, fuel consumed, packing materials consumed and variation in stock of Finished Goods. The inventories of stores and work-in-process have not been revalued. The inventories as at March 31, 2025 have been carried at such revalued amount or cost as the case may be. In our opinion, the quality of inventories may have further substantially deteriorated and hence consequent net realizable value of such inventories may also have been lower than the value at which they have been carried in the standalone financial statements as at March 31, 2025. Such treatment is contrary to the valuation principles laid down in Ind-AS 2 "Inventories". Had the company applied recognition and measurement principles as laid down in the Ind-AS 2, the carrying amounts of inventories may have been different from at which they have been carried in the standalone financial statements. The management of the company has not provided to us physical verification report of inventories held by the company as at March 31, 2025 and hence the carrying amounts as reported in the standalone financial statements as at March 31, 2025 are subject to physical verification and subsequent reconciliations and application of valuation principles as laid out in Ind-AS 2. In absence of availability of su_icient appropriate audit evidence, physical verification report, details of valuation of inventories and the verification and valuation of such inventory being technical matter, we disclaim our opinion as to the amounts of inventory as reported in the standalone financial statements.

Management Representations:

Due to shut down of the plants and non-utilisation of raw materials and other items and also holding of inventory including finished goods as such over the period from 8th September, 2024 upto 31st December, 2024, the management of the company considered it appropriate to physically verify the materials as lying at factories with a view to determine realizable values or values in use of various items of inventories including raw materials, packing materials, coal, finished goods, stock-in-process and also stores items. Accordingly, physical verification of inventories was carried out at Halvad Plant by technical persons and it was reported to the management that:

• The quality of raw materials of various grades i.e. waste paper has been degraded such that it will give low yields and low strength due to water mixing in paper fiber, moisture, fungal growth, environmental effects and other factors relating to storage and natural effects.

• The quality of various items of chemical deteriorated due to self-life and other factors affecting the chemical composition of respective items.

• The packing material quality deteriorated due to damage to material on account of non-use and time factor.

• The quality of coal deteriorated due to moisture, non-use and natural effects. Due to shut down of the factory and plants, the quality of waste papers, chemical items, packing materials, coal and finished goods had su_ered deteriorationandhencetheyhavetobewrittendown below their cost as per the estimates made by the management of the company regarding recoverable value of such inventories in compliance with Ind-AS 2" Inventories". Accordingly, the management of the company had carried out exercise to determine the realizable value of inventories as at 31st December, 2024 and based on that had written down inventories of raw materials, fuel, packing materials and finished goods which have been adjusted to the respective cost or as variation in stock. Based on the assessment by the management of the company it was expected that the company might be in a position to resume business operations and hence inventories lying in work-in-process and held as stores will be available for use in the normal course of business and hence there were not written down below their respective costs. As at 31st March, 2025, the management of the company estimated that the values at which inventories have been carried in the books of account resemble and have expected realizable values or values in use at which they have been carried in the financial statements and hence no further write down of inventory as at 31st March, 2025 beyond the write down made as at 31st December, 2024 was required to be made.

xi. AQ-Regarding Impairment off PPE:

The company has carried items of PPE at cost less accumulated depreciation upto March 31, 2025. However, due to the plants being non-operational for a substantial period of time during the financial year and other factors affecting the recoverable amounts of items of PPE, the recoverable value of some of the items or class of items within PPE may have su_ered impairment. The company has not applied impairment test in respect of tangible PPE for the financial year ended March 31, 2025 as required to be made as per Ind-AS 36 "Impairment of Assets". The management of the company has not provided to us physical verification report of PPE held by the company as at March 31, 2025 and hence the carrying amounts as reported in financial statements as at March 31, 2025 are subject to physical verification and subsequent reconciliations and application of accounting principles of impairment as laid out in Ind-AS 36. In absence of availability of su_icient appropriate audit evidence, physical verification report and the verification and valuation of each item of PPE being technical matter, we disclaim our opinion as to the carrying value of PPE as reported in the standalone financial statements.

Management Representation:

Though the plants of the company had been non-operational as at 31st March, 2025, it was expected that company will be in a position to resume the business operations in near future. During this period, the efforts were being carried out to maintain the operational effectiveness of the plant & machineries and other items of PPE. The management of the company made preliminary assessment as to the observable indicators to verify whether there exist any factors which indicate that the asset's value on overall basis has declined during the period significantly more than would be expected as a result of the passage of time or normal use or significant changes with an adverse effect on the company have taken place during the period, or are expected to take place in the near future, in the extent to which, or manner in which, an asset is used or is expected to be used evidences which indicate that assets have su_ered obsolescence or physical damage or cash generation from use of assets is affected to such an extent beyond the values of assets as carried in the financial statements. On the basis of preliminary assessment by the management, the above indicators did not suggest that the values of PPE have been affected to an extent as at 31st March, 2025 that their recoverable values have declined below their carrying values as at 31st March, 2025 and hence based on that the management of the company was of the view that there is no requirement to provide for impairment losses in respect of PPE.

xii. AQ- Going Concern Status:

We draw attention to "Statement of Changes in Equity" to the standalone financial statements relating to Equity. The net-worth of the company eroded substantially due to continuous losses in the last few years. As at March 31, 2025 the current liabilities of the company are far in excess of its current assets. The company has been declared as defaulters by banks in respect of loans granted by them to the company as the company has failed to discharge its liabilities towards bank loans. These factors along with other factors referred to in basis of disclaimer of opinion para herein above, cast significant doubt on the company's ability to continue as going concern and discharge its liabilities towards bank creditors, other creditors and statutory liabilities. However, the standalone financial statements have been prepared and presented by the management of the company assuming company being a going concern.

Management Representation:

Though the company has su_ered losses since the financial year 2022-23 which has substantially affected the net-worth of the company, the management of the company has been making best of its efforts to find viable sources of funds through which the business operations of the company could be revived and accordingly, the plants of the company have been maintained. Considering the possibility of revival of business in near future, it is expected by the management of the company that the company may resume its normal business operations and continue to operate as going concern and hence financial statements have been prepared and presented assuming the status of the company as going concern.

xiii. AQ-Status of Pending Litigations:

In spite of our specific request to the management of the company, the company has not made available to us details and status of pending litigations against the company and its possible impact on the financial statements including litigations relating to commitment of fraud by the company if any.

Management Representation:

The company had appointed a qualified compliance officer to comply with various statutory matters including the litigations as initiated, pending or completed by or against the company. However, due to the suspension of business operation, the compliance officer resigned with effect from 15th October, 2024, this exercise could not be carried out from October-2024 onwards and hence the updated details could not be provided to the auditors. This is being first such instance wherein the company could not provide the details of pending litigations to the auditors.

i. AQ-Regarding Bank Loans being NPA and Defaults in case of bank loans:

The Group has availed working capital and other loans from various banks for an amount exceeding 5.00 crores against the security of its assets including current assets. As a part of terms of sanction with various banks, the Group is required to submit various monthly, quarterly and periodical statements including stock statements and statement of various assets charged for availing loans including working capital loans. In spite of our specific request to the management of the Holding company, the Holding company has not made available to us such periodical statements if any as submitted to the banks for our verification. In absence of availability of such statements, we have not been able to verify the details and reported amounts as submitted to the banks in quarterly and periodical statements and those accounted in the books of account and variance if any between quarterly and periodical statements and books of accounts, accuracy and truthfulness of reported particulars including that reported amounts as submitted to the bank and defaults with regard to the loans availed by the company with regard to submission of such returns and statements and availability of drawing power or limits against such loans. As all of the bank loans accounts have been declared as NPA, there was no drawing power available against the outstanding bank loan accounts as at March 31, 2025.

We draw attention to Note No. 18, 20 & 21 to the Consolidated Financial Statements regarding reported amounts of defaults by the Group with regard to non-current and current borrowings and interest on such borrowings from various banks. The Group has reported defaults of 7,879.73 Lakhs including interest as at March 31, 2025 towards bank loans. However, in absence su_icient appropriate audit evidence with regard to defaults committed by the Group towards loans from various bank, we are unable to verify the details of defaults committed by the Group towards such loans and their consequential impact on reported amounts in the Consolidated financial statements and appropriate disclosure of such defaults, security offered, repayment terms, availability of security, initiation of legal actions by banks against the Holding company including that for fraud if any and other terms and conditions relating to loan accounts.

Management Representation:

The Group has availed working capital and other loans from various banks for an amount as outstanding as reported in the Consolidated financial statements (Refer to Note No. 18, 20 & 21) against the security of its assets including current assets. As a part of terms of sanction with various banks, the Group is required to submit various monthly, quarterly and periodical statements including stock statements and statement of various assets charged for availing loans including working capital loans. Due to substantial business losses and non-availability of liquidity, the Group could not discharge its liabilities towards bank borrowings and hence subsequently the bank loan accounts from all banks have been declared as NPA and no drawing power was available against the outstanding bank loan accounts as at March 31, 2025.

The Group has been performing excellently over the years since incorporation reflected through increasing turnover, production and profits over the years. The loans from various banks have been availed by the Group since incorporation including term loans for plant & machineries and factory building as well as working capital in the form of cash credits, buyers' credit and LC facilities.

As is the fact the Group has been using more than 80.00% of imported raw materials and is prone to international market fluctuations along with other market related. The export remained distressed during the period.

The covid-19 factor had substantial effect on import as well as export. However, the management of the Group with its experience and goal driven efforts survived the tough period and maintained the business, turnover and profitability and stabilized the effects of such tough period on the Group. However, the efforts took some time but was effective. During this tough period also, the Group continued to serve the creditors including bank creditors and there was no default with regard to bank loans. The price volatility coupled with continuous exchange rate upward fluctuations had effect on the prices of imported raw materials. Further due to war like situations at international levels also affected the cost of raw materials as well as landing cost in the form of sea freight and other charges. This also negatively affected the procurement cycle both internationally as well domestic levels. This events in turnover affected the production gradually and thereby turnover.

The financial year 2022-23 and 2023-24, the demand for kra_ paper had mixed response from the market and was somewhat on declining state. The Group made best of its efforts to defy the market trend to grow further. However, the market factors of increasing input and other cost and simultaneous declining trend of demand affected the business of the Group.

In the meantime, many paper mills closed down but the Group continued to operate with best of its resources in spite of facing challenges from various factors.

The financial year 2022-23 onwards the Group had an uphill task to defying the negative market trend which the Group did well upto the financial year 2023-24 and continued to serve the banks liabilities.

Further in the financial year 2022-23, there was Income Tax Department search against the Group and the litigations continued over the years since then and have been still continuing. This also affected the overall functioning of the Group as the key managerial persons had to attend the matters for further actions. However, in the financial year 2024-25 these factors aggravated to the extent that it affected the liquidity of the Group substantially and ultimately forced the Group to close down its main plants at Halvad from 8th September, 2024. The closure of production then completely took winds out of the Group and at last it affected the Group to such an extent that the Group had no liquid resources to discharge the liabilities towards banks and hence the bank accounts then have been declared as NPA by the banks in the months of December -2024 onwards.

However, the management of the Holding company has been making all efforts to resume the production and business operations so as to regularize bank accounts and discharge its liabilities as are due or become due. The management of the Holding Company with its efforts expects to resume business by September- 2025.

ii. AQ-2 -Plant Shut Down

The Group has shut down its plant at Halved since 8th of September, 2024 and has not resumed the production since the closure upto the date of this report. The other plant of the Group at Bhuj has also been non-operational. The shut-down of plants and non- resumption of production, substantial cash losses incurred in the last three financial years as well as during the current financial year, non-utilization of production capacity, substantial reduction in sales turnover over the period and other financial factors including availability of liquid sources of funds have affected net worth of the Group significantly and these factors along with substantial tax demands against which litigations are pending and all of the bank loan accounts becoming NPA and the Group being declared as defaulter by banks have affected the overall business operations of the Group and its ability to resume business activities and to continue the business in the normal course of business as going concern. However, the management of the Holding company has prepared and presented the Consolidated financial statements assuming its status as going concern. In our opinion, the going concern status of the Group has been substantially and materially adversely affected and, in our opinion, the accompanying Consolidated financial statements for the year ended March 31, 2025 should have been prepared and presented considering the status of the company as not being going concern.

Management Representation:

The Group has shut down its plants at Halved since 8th of September, 2024 and has not resumed the production since the closure upto the date of approval the Consolidated financial statements for the current financial year i.e. 29th May, 2025. The other plant of the company at Bhuj has also been non-operational. Though the Group has been facing financial stress and has defaulted in payment to creditors including bank creditors in the financial year 2024-25, the management of the Holding company has been taking all appropriate measures to maintain plant & machineries, operating PPE and operating production facilities so as to commence the normal course of production and business on availability of su_icient sources of funds. Considering the past market presence of the Group, operational activities carried out by the Group over the years, profits generated in the past, profitable nature of the business, operational capacities available, management efforts to revive the plant operations & business and management experience in the line of business, the management of the Holding company expects to resume normal course of production and business and for that actively making all efforts including efforts to arrange for sources of funds. On resumption of the plant operations & business, the management of the Holding company expects to discharge all of its liabilities towards bank, suppliers and other creditors and continue to operate for foreseeable future.

Though the Group su_ered losses from operations since last three years on account of various factors and hence had effect on the operations of all plant of the Group. Due to losses and liquidity issues, the operations at plants at Bhuj and Halvad have to suspended and halted and could not be recommenced until the year ended 31st March, 2025. However, the management of the Holding company is making sincere efforts to infuse funds in the form of equity and thereby inject liquidity and it is expected the business operations will re-commence in the financial year 2025-26. Considering the possibility of resumption of business operations, the financial results and statements for the year ended have been prepared and presented the status of the Group as going concern.

As the management of the Holding company expects to resume plant operations & business in the coming financial year that is financial year 2025-26, the Group has operated plants and continued normal business operations upto 8th September, 2024, expects to discharge all of its liabilities towards bank, suppliers and other creditors, expects to continue to operate the normal course of business and management assessment to derive revenue from continued use of operational capacities and not liquidate them in the foreseeable future, the Consolidated financial statements for the financial year 2024-25 have been prepared assuming company's status as going concern.

iii. AQ- Provision for Doubtful Debts:

No Provision has been made by the Group for outstanding export trader receivables of 1.60 crores and domestic trade receivables of 2.49 crores which have been outstanding since long. The Group continues to recognize and classify these trade receivables as good for recovery. Had the Group made provision for doubtful debts, the losses for the year would have been higher by 4.09 crores and consequent net-worth lower by 4.09 crores. The management of the Holding company has not provided to us for our verification the su_icient appropriate audit evidences on the basis of which it has been assumed that the above trade receivables have been good for recovery at the values at which they have been stated in the Consolidated financial statements.

Management Representations:

The Group had made export of goods to two parties located in China. However, subsequent to shipment of goods from port in India and before goods could reach the destination in China, Corona pandemic spread out across globe and government of various countries imposed restrictions on movement of goods as well as people and economic activities came to standstill. It took some time to normalize the routine operations. On account of above unprecedented reasons, the shipment to the parties was delayed from port. The quantum of outstanding balance is quite huge and the Group has been constantly following up the matter with respective parties for realization of the outstanding dues. Though the balances have been outstanding since long and there has been no realizations from the parties, it is likely that the amount may not be recovered but there is some possibility that the dues will be recovered and therefore the Group has not made provision for doubtful debts so far. As part of its continuous efforts for recovery of outstanding dues, the management of the Holding company planned to visit the respective parties to discuss the matter regarding recovery. However, due to shut down of the plant during the year and financial stress on that account majority of the staff including marketing department staff have le_ the job. This has restricted the efforts of the Group for further course of action in the matter. Based on efforts and communication made so far and possible course of actions, the management of the Holding Company is of the view that there is fair possibility that the Group may recover due and hence no provision for doubtful debts has been made.

The Group had made sale of goods to other parties in the past. The recovery from the customers against the sale had been regular until the last outstanding balances. However, due to issues financial stress the parties have been su_ering the realization from them could not be made. One of the parties from whom amount of 8.00 Lakhs is recoverable is under NCLT proceeding filed against it by lenders which is pending for adjudication. The management of the Holding company has been making continuous efforts to recover amount of 101.12 lakhs as due from one of the customers. It is likely that the amount of 8.00 may not be recovered. However, considering the overall recovery possibilities and pending NCLT proceedings, the management of the Holding company is of the view that there is fair possibility that the Group may recover dues outstanding and hence no provision for doubtful debts has been made.

iv. AQ- Provision for Expected Credit Losses:

The Group has not made any provision of for Expected Credit Losses on trade receivables and other financial instruments for the financial year ended 31st March, 2025 other than as reported in para (iv) above as required to be made as per Ind-AS-109 ‘Financial Instruments".

Management Representations:

Due to losses in the business, almost all staff of the Holding company including professional staff having knowledge of the account and finance related matters have le_ the Group. Further due to liquidity issues and bank accounts becoming NPA and suspension of bank accounts operations, the Group could also not avail services of professional in this regard. The Group should have made the provisions for expected losses but for the reasons stated above it could not work out the amounts of expected credit losses in compliance with the requirement of Ind-AS-109 and hence no provisions have been made for expected credit losses for the financial year 2024-25 on financial instruments.

v. AQ- Inventory of imported raw materials lying at port:

Inventories of Imported Raw Materials in respect of which Bill of Entries have been filed but have not been li_ed from port have not been accounted in the books of account. As informed to us by the management of the Holding company, the Group had received notices for auction against such inventories. As informed to us by the management of the Holding company, some of the goods lying at port have been disposed of through auction. However, no details of goods sold through auction have been made available to us for our verification. The goods sold through auction have not been recognized in the books of account either as sale or inventories. The custom duty paid in respect of goods lying at port or disposed of through the process of auction has been classified as recoverable amount from the custom authorities in the books of account. The payments made to import suppliers have been recognized as amounts recoverable from the respective party in the consolidated financial statements. The Group has further not accounted corresponding liabilities towards suppliers if any in the books of account. Had the Group accounted for above transactions the reportable amounts of revenue, assets, liabilities and losses for the year would have been different from what has been stated in the consolidated financial statements.

We refer to Note No. 36(IV) to the Consolidated financial statements wherein the Group has reported amounts of 5.78 Crores as Advances Paid for Imported Raw Materials.

In absence of su_icient appropriate audit evidence with regard to position of goods lying at port and disposed of through auction if any, we disclaim our opinion as regard to inventories, revenues, assets and liabilities in this regard.

Management Representation:

The Group has been using more than 80.00% of its raw materials i.e. waste paper from imports over the years since the commencement of production. The plants of the Group at Halvad were operating upto 8th September, 2024. Before the operations at plants at Halvad were shut down, the Group had placed orders for import of raw materials i.e. waste papers from various suppliers. To secure import purchases and negotiate better terms for import and as per prevailing standards on import of goods, the Group has been following the system of making advance payment through the bank facilities in the form of Letter of Credit (LC)/Buyer's Credit (BC) to import suppliers. Accordingly, as the operations of the Group were going on the Group had made advance payments to suppliers of imported raw materials pending receipt of goods. However, in the meantime, the Group had to close down its operational activities due to non-availability of liquid sources of funds on account of continuous business losses. As result of this the Group could not make further payment to import suppliers if any pending as well to the all services providers as involved in the entire cycle of import of goods including shipping lines and hence the Group could not li_ materials from the port. The management of the Holding company made all possible efforts to revive the operational activities and to make payment to suppliers so that imported raw materials could be li_ed from the port. However, the position of the Group deteriorated further over the period of time and all bank accounts of the Group except Loan accounts with Canara Bank then were declared as NPA by banks effective from December-2024. Because of the factors stated above, the Group could not li_ raw materials from the ports for extended period of time and hence the Group had been issued notices for auction of raw materials. However, for reasons of non-availability of su_icient manpower and sources of funds the Group could not respond to such notices. The management of the Holding company made possible efforts to get the details of materials sold through auction from various sources including shipping lines. However, due to non-payment of outstanding dues and other factors affecting the business of the Group, the Group could not get appropriate documentary evidence with regard to materials lying at port at 31st March, 2025 as well as goods disposed of through auction and in absence of documentary evidence, the Group could not account for purchase of imported goods and liabilities thereagainst, inventory held at port, sale of goods through auction and give appropriate accounting treatment to amounts paid as custom duty against such import and amounts paid to import suppliers. Accordingly, the Group continued to carry amounts paid to import suppliers and custom duties paid as amount recoverable in the books of account as at 31st March, 2025. On availability of appropriate documentary evidences, appropriate treatment of above matters will be given in the books of account.

On account of financial stress which escalated to its optimum point during the financial year 2024-25, the Group had to completely shut down its plants from September-2024 onwards. The Group had in the meantime placed orders for imported raw materials which arrived at Indian port for li_ off by the company. However, due to suspension of plant operations and liquidity issues, the Group did not have resources to pay to the C & F Agents and other charges related to materials li_ing from the port. Due to this the raw materials continued to remain at ports beyond the period of li_ off as per the Customs Law. As a result of non-li_ing of materials, the materials were listed for auction for which notices were sent to the Group. However, due to there being no staff with the Group and non-cooperation by the C & F agents the Group did not have relevant documents as to the materials disposed off through auctions. In spite of its best of efforts, the management of the Group could not gather required documentary evidences as to the materials disposed of through auction upto the date of meeting of board of directors of the Holding Company for approval of audited financial statements for the year 2024-25 and hence the materials sold through auction could not be accounted in the books of account for the financial year 2024-25. Since, the Group did not have requisite documents for accounting for import of goods lying at port, the purchase of goods and corresponding liabilities of suppliers if any could not be accounted in the books of account for the financial year 2024-25 and hence payments made to suppliers of imported materials were carried as such being treated as payments made and supply of goods being treated as pending.

vi. AQ-Provision for Gratuity Liabilities:

The Group has not made any provision towards gratuity liabilities as per Ind AS-19 "Employee Benefits" for the financial year ended 31st March, 2025.

Management Representations:

The Group had been operating its plant and carrying out business operations since its incorporation. There were number of employees who had been working with the Group over the years and hence eligible for gratuity payments either on retirement or on termination. Accordingly, the Group was making provisions for gratuity liabilities in compliance with Ind-AS-19 "Employee Benefits". However, the factors affecting the business and consequent liquidity issues which were expected to be resolved over the period of time by the management of the Holding company but could not be resolved. This resulted into operational losses in the financial year 2022-23, 2023-24 and also 2024-25. Consequently, the Group had to close down its plants gradually and the management of the Holding company was making best efforts to infuse the funds and thereby resumption of operations. The Group continued to make provision for gratuity liabilities upto the financial year ended 31st March, 2024. However, since September-2024 all of the plants of the Group have been non-operational and due to this almost all employees of the Group have le_ the employment. Some to these employees have been paid their respective full and final payments. There were very few employees with the company as at 31st March, 2025. Further, there were no employees with department managing the matters related to employees who could prepare details regarding employee gratuity liabilities. Due to there being very few employees with the company as at 31st March, 2025 and there being no employee with the Group who could prepare the details for gratuity liabilities working, the Group ought it appropriate and also could not provide details to the actuary for working out gratuity liabilities as at 31st March, 2025 and accordingly no provision for gratuity liabilities could be made for gratuity liabilities for the year ended 31st March, 2025. vii. AQ- Contra Confirmation of Trade Payables and

Trade Receivables:

The outstanding balances of trade receivables and trade payables as at March 31, 2025 as reported in the Consolidated financial statements have not been contra confirmed by the respective parties and hence the same are subject to confirmations and subsequent reconciliations and subject to claim and legal proceedings for recovery, damages, charges if any of respective parties against the company.

Management Representations:

The Group has policy in place to contra confirm accounts of the parties periodically. However, due to the suspension of business operations and non-availability of working staff, this exercise could not be carried out for the financial year 2024-25.

viii. AQ-Inventory Write Down:

As informed to us by the management of the Holding company, due to shut down of the plants, the quality of waste papers, chemical items, packing materials, coal and finished goods has deteriorated and hence they have been written down below their cost as per the estimates made by the management of the Holding company regarding recoverable value of such inventories. The Group has written down inventories of 9.74 crores during financial year ended March 31, 2025. The reported amounts of losses for the financial year ended 31st March, 2025 includes the effect of such write down under respective head of raw materials consumed, fuel consumed, packing materials consumed and variation in stock of Finished Goods. The inventories of stores and work-in-process have not been revalued. The inventories as at March 31, 2025 have been carried at such revalued amount or cost as the case may be. In our opinion, the quality of inventories may have further substantially deteriorated and hence consequent net realizable value of such inventories may also have been lower than the value at which they have been carried in the Consolidated financial statements as at March 31, 2025. Such treatment is contrary to the valuation principles laid down in Ind-AS 2 "Inventories". Had the Group applied recognition and measurement principles as laid down in the Ind-AS 2, the carrying amounts of inventories may have been different from at which they have been carried in the Consolidated financial statements. The management of the Holding company has not provided to us physical verification report of inventories held by the Group as at March

31, 2025 and hence the carrying amounts as reported in the Consolidated financial statements as at March 31, 2025 are subject to physical verification and subsequent reconciliations and application of valuation principles as laid out in Ind-AS 2. In absence of availability of su_icient appropriate audit evidence, physical verification report, details of valuation of inventories and the verification and valuation of such inventory being technical matter, we disclaim our opinion as to the amounts of inventory as reported in the Consolidated financial statements.

Management Representations:

Due to shut down of the plants and non-utilisation of raw materials and other items and also holding of inventory including finished goods as such over the period from 8th September, 2024 upto 31st December, 2024, the management of the Holding company considered it appropriate to physically verify the materials as lying at factories with a view to determine realizable values or values in use of various items of inventories including raw materials, packing materials, coal, finished goods, stock-in-process and also stores items. Accordingly, physical verification of inventories was carried out at Halvad Plant by technical persons and it was reported to the management that:

• The quality of raw materials of various grades i.e. waste paper has been degraded such that it will give low yields and low strength due to water mixing in paper fiber, moisture, fungal growth, environmental effects and other factors relating to storage and natural effects.

• The quality of various items of chemical deteriorated due to self-life and other factors affecting the chemical composition of respective items.

• The packing material quality deteriorated due to damage to material on account of non-use and time factor.

• The quality of coal deteriorated due to moisture, non-use and natural effects. Due to shut down of the factory and plants, the quality of waste papers, chemical items, packing materials, coal and finished goods had su_ered deterioration and hence they have to be written down below their cost as per the estimates made by the management of the Holding company regarding recoverable value of such inventories in compliance with Ind-AS 2" Inventories". Accordingly, the management of the Holding company had carried out exercise to determine the realizable value of inventories as at 31st December, 2024 and based on that had written down inventories of raw materials, fuel, packing materials and finished goods which have been adjusted to the respective cost or as variation in stock. Based on the assessment by the management of the Holding company it was expected that the Group might be in a position to resume business operations and hence inventories lying in work-in-process and held as stores will be available for use in the normal course of business and hence there were not written down below their respective costs. As at 31st March, 2025, the management of the Holding company estimated that the values at which inventories have been carried in the books of account resemble and have expected realizable values or values in use at which they have been carried in the financial statements and hence no further write down of inventory as at 31st March, 2025 beyond the write down made as at 31st December, 2024 was required to be made.

ix. AQ-Regarding Impairment off PPE:

The Group has carried items of PPE at cost less accumulated depreciation upto March 31, 2025. However, due to the plants being non-operational for a substantial period of time during the financial year and other factors affecting the recoverable amounts of items of PPE, the recoverable value of some of the items or class of items within PPE may have su_ered impairment. The Group has not applied impairment test in respect of tangible PPE for the financial year ended March 31, 2025 as required to be made as per Ind-AS 36 "Impairment of Assets". The management of the Holding company has not provided to us physical verification report of PPE held by the Group as at March 31, 2025 and hence the carrying amounts as reported in financial statements as at March 31, 2025 are subject to physical verification and subsequent reconciliations and application of accounting principles of impairment as laid out in Ind-AS 36. In absence of availability of su_icient appropriate audit evidence, physical verification report and the verification and valuation of each item of PPE being technical matter, we disclaim our opinion as to the carrying value of PPE as reported in the Consolidated financial statements.

Management Representation:

Though the plants of the Group had been non-operational as at 31st March, 2025, it was expected that Group would be in a position to resume the business operations in near future. During this period, the efforts were being carried out to maintain the operational effectiveness of the plant & machineries and other items of PPE. The management of the Holding company made preliminary assessment as to the observable indicators to verify whether there exist any factors which indicate that the asset's value on overall basis has declined during the period significantly more than would be expected as a result of the passage of time or normal use or significant changes with an adverse effect on the Group have taken place during the period, or are expected to take place in the near future, in the extent to which, or manner in which, an asset is used or is expected to be used evidences which indicate that assets have su_ered obsolescence or physical damage or cash generation from use of assets is affected to such an extent beyond the values of assets as carried in the financial statements. On the basis of preliminary assessment by the management of the Holding Company, the above indicators did not suggest that the values of PPE have been affected to an extent as at 31st March, 2025 that their recoverable values have declined below their carrying values as at 31st March, 2025 and hence based on that the management of the Holding company was of the view that there is no requirement to provide for impairment losses in respect of PPE.

x. AQ- Going Concern Status:

We draw attention to "Statement of Changes in Equity" to the Consolidated financial statements relating to Equity. The net-worth of the Group eroded substantially due to continuous losses in the last few years. As at March 31, 2025 the current liabilities of the Group are far in excess of its current assets. The Holding Company has been declared as defaulters by banks in respect of loans granted by them to the Holding company as the Group has failed to discharge its liabilities towards bank loans. These factors along with other factors referred to in basis of disclaimer of opinion para herein above, cast significant doubt on the Group's ability to continue as going concern and discharge its liabilities towards bank creditors, other creditors and statutory liabilities. However, the Consolidated financial statements have been prepared and presented by the management of the Holding company assuming company being a going concern.

Management Representation:

Though the Group has su_ered losses since the financial year 2022-23 which has substantially affected the net-worth of the Group, the management of the Holding company has been making best of its efforts to find viable sources of funds through which the business operations of the

Group could be revived and accordingly, the plants of the Group have been maintained. Considering the possibility of revival of business in near future, it is expected by the management of the Holding company that the Group may resume its normal business operations and continue to operate as going concern and hence financial statements have been prepared and presented assuming the status of the company as going concern.

xi. AQ-Status of Pending Litigations:

In spite of our specific request to the management of the Holding company, the Group has not made available to us details and status of pending litigations against the Group and its possible impact on the financial statements including litigations relating to commitment of fraud by the company if any.

Management Representation:

The Group had appointed a qualified compliance officer to comply with various statutory matters including the litigations as initiated, pending or completed by or against the Group. However, due to the suspension of business operation, the compliance officer resigned with effect from 15th October, 2024, this exercise could not be carried out from October-2024 onwards and hence the updated details could not be provided to the auditors. This is being first such instance wherein the Group could not provide the details of pending litigations to the auditors.

b) Secretarial Auditor:

Pursuant to Section 204 of the Companies Act, 2013, and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors has appointed M/s. Pinakin Shah & Associates, Practicing Company Secretaries (FCS: 2562, CP No.: 2932), as the Secretarial Auditors of the Company for the financial year 2024-25. The Board has also recommended the re-appointment of M/s. Pinakin Shah & Associates as Secretarial Auditors for a further period of five years, in compliance with SEBI's directives.

The Company has obtained Annual Secretarial Audit Report for the financial Year 2024-25, annexed at Annexure-A, for all applicable compliances as per SEBI Regulations and Circular- Guidelines issued thereunder. The following are the qualifications and management responses thereto: During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above except following SEBI LODR

Management's Response:

The Company acknowledges that there was a delay in compliance with certain regulatory requirements during the year under review. The delay was entirely unintentional and occurred due to circumstances beyond the Company's control.

The Board of Directors has taken cognizance of the matter and has advised the management to strengthen internal processes to ensure timely and consistent compliance with all applicable regulations going forward. The management remains committed to upholding the highest standards of corporate governance and regulatory compliance.

c) Internal Auditors:

Pursuant to the provision of section 138 of the companies Act, 2013 read with the companies (Accounts) rules, 2014, the company had appointed M/s S N Shah and Associates (FRN:109782W), chartered Accountant in the board meeting held on 29th May, 2024, to conduct internal Audit for the financial year 2024-25.

d) Cost Auditors:

Section 148 of the companies Act, 2013 read with rules made thereunder mandates every company belonging to category prescribed in the Rules to undertake a Cost Audit. The company is not required to mandatorily appoint Cost Auditors and maintain cost records as per 148(1) due to nature of business activity. However, company do maintain cost record for internal purpose as a good practice.

19. CREDIT RATING

During the year, Informerics Ratings vide their letter dated 14th November, 2024 has assigned long term and short-term debt rating of ‘IVR D' on bank facilities of Astron Group.

20. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The Company is committed to an Internal Control System, commensurate with the size, scale and complexity of its operations. The Company's Internal Control Systems are regularly being reviewed by the Company's Internal Auditors with a view to evaluate the e_icacy and adequacy of Internal

Control Systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and to ensure that these are working properly and wherever required, are modified/ tighten to meet the changed business requirements.

The scope of the Internal Audit is defined and reviewed every year by the Audit Committee and inputs, wherever required, are taken from the Statutory Auditors. Based on the report of Internal Auditors, major audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

Statutory Auditors' Report on Internal Financial Controls as required under Clause (i) of Sub-section 3 of Section 143 of the Act, is annexed with the Independent Auditors' Report.

21. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

During the period under review, several energy conservation initiatives were adopted and were taken by the Company. There are no plans to import any kind of technology for the project and hence information regarding its absorption is not applicable. There was no research activities carried out during the year as well as no foreign exchange income or outgo during the year.

22. RISK MANAGEMENT:

Pursuant to Section 134(3)(n) of the Companies Act, 2013, and the Listing Regulations, 2015, the Company has established procedures to inform the Board about risk assessment and minimization procedures.

Although Regulation 21 is not applicable to the Company, we have a comprehensive Risk Management framework in place, encompassing Business Risk, Operational Controls Assessment, and Policy Compliance processes.

The Company identifies and addresses major risks through mitigating actions, within its approved risk appetite, on a continuous basis. However, due to the current financial stress and the application filed against the Company at NCLT Ahmedabad, as well as the notice issued by banks for wilful default, the Company is facing significant challenges.

The Board is closely monitoring the situation and is working to address these risks and challenges. The Risk Management framework is being reviewed and updated to ensure it remains effective in managing the Company's risk profile."

23. SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENT:

As of March 31, 2025, the Company has a wholly-owned subsidiary, Balaram Papers Pvt. Ltd., located in Mehsana, Gujarat, which was exclusively undertaking job work for Astron Paper & Board Mill Limited.

Pursuant to Section 129(3) of the Companies Act, 2013, the salient features of the subsidiary's financial statements are provided in Form AOC-1, attached as "Annexure-B".

The Directors are pleased to present the Consolidated Financial Statements for the financial year ended March 31, 2025, prepared in accordance with Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and approved by the Board. These statements have been prepared based on the audited financial statements of the Company and its subsidiary, as approved by their respective Boards.

Furthermore, in compliance with Section 137 of the Companies Act, 2013, the financial statements of the Company, consolidated financial statements, and separate audited financial statements of subsidiaries are available on the Company's website."

24. CORPORATE GOVERNANCE:

Despite facing significant financial challenges and having its account classified as a Non-Performing Asset (NPA), the Company remains committed to upholding the highest standards of Corporate Governance. In compliance with Regulation 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with Schedule V thereto, the Company has implemented adequate measures to ensure adherence to the stipulated corporate governance requirements. The details of these measures are provided in "ANNEXURE-C". A compliance certificate from practicing company secretaries, attesting to the Company's compliance with the conditions of corporate governance, is also attached to the Annexure.

25. SECRETARIAL STANDARD:

The Company is in compliance with Secretarial Standards on Meetings of Board of Directors and General Meetings issued by the Institute of Company Secretaries of India.

26. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

As per Regulation 34(2)(e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report is set out in a separate section included in this Annual Report and forms part of this Report.

27. CORPORATE SOCIAL RESPONSIBILITY (CSR):

As per the calculation under Section 198 of the Companies Act, 2013, and the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company is not required to incur any CSR expenditure for the financial year 2024-25.

28. EXTRACT OF ANNUAL RETURN:

Pursuant to Section 92(3) ready with section 134(3)(a) of the companies Act, 2013, the Annual Return as on 31st March, 2025 is available on the company's website on www.astronpaper. com.

29. PARTICULARS OF EMPLOYEES:

Disclosure pertaining to remuneration and other details in terms of the provision of Section 197 (12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in "ANNEXURE-D" to this Report.

The total number of employees as on 31st March, 2025 were 32.

30. INSURANCE:

The Fixed Assets and Stocks of your Company are adequately insured.

31. VIGIL MECHANISM POLICY/ WHISTLE BLOWER POLICY:

The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. It provides adequate safeguard against the victimization of employee who avail the mechanism and are allowed direct access to the chairman of the Audit committee and ethics counselor of the company. It has been communicated to the Directors and employees of the Company.

The Policy on vigil mechanism and whistle blower policy may be accessed on the Company's website at the web link: http:// astronpaper.com/pdf/Whistle-Blower-Policy.pdf.

32. CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES:

All transactions with related parties are placed before the Audit Committee for its approval. An omnibus approval from Audit Committee is obtained for the related party transactions which are repetitive in nature. All the contracts/arrangements/ transactions entered into by the Company with the related parties during the financial year 2024-25 were in the ordinary course of business and on an arm's length basis as disclosed in the financial statements and were reviewed and approved by the Audit Committee. The details of related party disclosure form a part of the notes to the financial statements provided in the Annual Report. In terms of Regulation 23 of the SEBI Listing Regulations, the Company submits details of related party transactions as per the format specified in the relevant accounting standards to the stock exchanges on a half-yearly basis. There were significant related party transactions entered between the Company, Directors, management, or their relatives. Hence, disclosure in Form AOC-2 is provided as Annexure-E. The policy on materiality of related party transactions as approved by the Board and may be accessed on the Company's website at web link: http://astronpaper.com/ pdf/Material-Related-Party-Transaction-Policy-1.pdf.

33. POLICY RELATING TO PREVENTION OF SEXUAL HARASSMENT:

Your Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at the workplace in line with the provision of the Sexual Harassment at Workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made there under.

Further, the Company has Internal Complaints Committee for various locations of the Company in compliance with the above-mentioned Act and Rules.

During the financial year 2024-25, there was no complaint/ case of sexual harassment and hence no complaint remains pending as on 31st March, 2025.

34. SIGNIFICANT/ MATERIAL ORDERS PASSED BY THE REGULATORS:

Despite the Company's efforts, it has been facing financial challenges, resulting in non-performing assets (NPAs) and receipt of notices from banks and operational creditors. While these developments may potentially impact the Company's going concern status and future operations, the management is working diligently to address these issues and explore viable solutions.

As of the date of this report, there are no significant or material orders passed by any regulator, court, or tribunal that would further exacerbate the Company's situation. However, the Company is cooperating fully with its creditors and is committed to finding a resolution to its current financial di_iculties.

35. GENERAL:

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions/ instances on these items during the year under review:

a) No Issue of equity shares with differential rights as to dividend, voting or otherwise nor issued shares (including sweat equity shares) to the employees or Directors of the Company, under any Scheme.

b) Neither the Managing Director nor the Whole Time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

c) The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.