Andhra Paper Ltd Directors Report

Dear Members,

The Board of Directors has the pleasure in presenting its 62 nd Report along with the Audited Accounts for the year ended March 31, 2026.

Performance Review during the financialyear 2025-26, primarily due to a surge in imports, TheIndianPaperIndustryfacedsignificant rising raw material costs and softening realizations. Amidst these challenges, your company showed resilience and posted moderate profitability. The summary of the financial results are as follows:

Summary of Financial Results

(C in Crores)

Particulars	For the year ended
	March 31, 2026	March 31, 2025
Revenue from Operations	1701.23	1,541.24
Earnings before interest, depreciation & taxation (EBITDA)	150.89	223.29
Finance costs	18.22	17.89
Depreciation	107.31	88.32
Profit before exceptional items	25.36	117.07
Exceptional items	0	0
Profit before tax	25.36	117.07
Tax expense	6.75	28.16
Profit for the year	18.62	88.91

The financial year 2025-26 was characterised by contrasting trends of record operational performance amidst a challenging market environment. The Indian paper industry continued to witness pressure from elevated imports, particularly from China and ASEAN countries, resulting in subdued domestic price realisations. Persistent inflation in wood and other input costs, coupled with higher depreciation and finance costs arising from major capital expenditure programmes, further impacted profitability.

Despite these headwinds, your Company achieved its highest-ever annual production of 2,59,266 MT and record sales of 2,60,438 MT , demonstrating the resilience of its business model, manufacturing capabilities and market reach. Revenue from operations increased to D 1,701.23 Crores during FY 2025-26 as against D 1,541.24 Crores in the previous year. The record operational performance reflects the successful execution of strategic modernisation and capacity enhancement initiatives undertaken over the last two years, coupled with sustained focus on operational excellence, reliability improvement, enhanced machine productivity and process optimisation across manufacturing facilities. These investments have strengthened the

Company s operating platform and are expected to support improved efficiencies, product quality and long-term value creation. The increase in revenue is attributable to strong market position, ability to adapt its product mix to cater to customer preferences, and a robust dealership network that allows flexible pivoting between domestic and export markets based on demand.

However, EBITDA declined to C150.89 Crores from C223.29 Crores in FY 2024-25 primarily due to lower net sales realisations, higher raw material costs and increased fixed charges associated with recently commissioned assets.

Profit C 18.62 Crores as compared to aftertaxstoodat C 88.91 Crores in the previous year.

The Company responded proactively through stringent cost optimisation, enhanced operational efficiencies, prudent working capital management and an increased focus on value-added products. The benefits of the extensive mill modernisation programme and softening wood prices are expected to support margin recovery over the medium term. There was no change in the nature of business during the year.

Transfer to reserves

The Company does not propose to transfer any amount to reserves.

Dividend

The Board of Directors at their Meeting held on May 14,

2026 recommended a dividend of C 0.50/- per equity share of C2/- each, for approval of the Shareholders at the forthcoming Annual General Meeting, and is incompliance with the Dividend Distribution Policy of the Company.

The said Policy is disclosed on the Company s website: https://andhrapaper.com/wp-content/themes/andhra_ paper/uploads/investors/1645517957Dividend%20 Distribution%20Policy.pdf.

Markets, Customers and Commercial Excellence

The Company stands for its core belief in Customer First and its commitment to create value for the customers, Serving you with Pride.

With uncertainty as the new constant in the swiftly changing market place, the continuous investments in upgradation of plant and machinery warranted the Company to meet the changing Customer needs in Writing & Printing and Value Added application products.

The dedicated distribution network in the Domestic Market garnered the growing preference of the Company s products by Customers resulting in the highest domestic sales of

2,58,550 MT (YOY 19%) thereby mitigating the geopolitical volatilities through the year. This resulted incremental YOY

Sales of Writing & Printing Products Truprint Ultra (17%), Truprint Ivory (28%), Primavera White (63%), Primavera (21%), Write Choice (9%), Splendor (342%) and Value Added Products Pharma Print (189%), Plain Kraft NS Hi-BF (172%), Straw Paper (257%), Coating Base (93%). The Company s central value of Think Customer endures to produce preferred products to enhance customer value by way of offering right products for right applications at an augmented pace to meet customer requirements resulting in new product developments – Natural Shade Maplitho and

Superprint Copier, a fighter copier brand.

The Company achieved the highest ever sales in a year at

2,60,438 MT (YOY 15%). The recent years of capex paved way for the Company s highest Maplitho Sales at 1,47,043 MT (YOY 63%).

FY 2025-26 Highlights:

• Highest Sales of 2,60,438 MT

• Highest Domestic Sales of 2,58,550 MT

• Highest Maplitho Sales of 1,47,043 MT

• Substantial growth in Maplitho Products like Truprint

Ultra (17%), Truprint Ivory (28%), Primavera White (63%), Primavera (21%), Write Choice (9%), Splendor (342%) and Value Added Products like Pharma Print (189%), Plain Kraft NS Hi-BF (172%), Straw Paper (257%), Coating Base (93%)

Operational highlights

With the ever-changing market dynamics, the Company increased its participation in value-added products, including

Azurelaid, Stiffener, Poster and Cupstock.

Products	Y-o-Y sales growth
Primavera White	63%
Primavera	21%
Truprint Ultra	17%
Truprint Ivory	28%
Splendor	342%
Pharma Print	189%

The Company had put in its vital efforts to achieve OTIF delivery rate (On- Time-In-Full) at 94.5 %, forecast accuracy to 94%, and improved complaint closure to 100% that is uppermost tier in the Indian Paper Industry.

The Company is present in all segments of paper ranging from writing, printing, industrial and copier papers.

The Company s share in the export was approximately 0.7% in FY 2025-26. It remained focused on producing improved quality Maplitho Products and Value-Added products with higher Net Sales Realisations to increase profitability.

Mill Development, Capital Expenditure and Strategic Modernisation

During FY 2025-26, your Company substantially completed its flagship mill modernisation programme undertaken across the Rajahmundry and Kadiyam manufacturing units with the objective of enhancing operational reliability, productivity, sustainability and long-term competitiveness. Plant upgrades and de-bottlenecking totalling C 520 Crores were completed in between 2022 and 2026. RJ-3 Machine upgrade C 178 Crores is in progress with target completion of March 2027. Tissue Paper project C 270 Crores awaiting approval from State Pollution Control Board for commencement. In addition, Company invested C 150 Crores in core manufacturing and process equipment across its pulp, paper and finishing systems and C 67 Crores in electrical and process control systems, warehousing & logistics infrastructure, utilities, buildings, environmental systems, IT and safety systems.

Key projects commissioned and operationalised during the year include: i) Fibre Line Expansion: Enhanced pulp manufacturing capacity from 550 TPD to 630 TPD, strengthening raw material integration and supporting future growth requirements. ii) Recovery Boiler and Ash Leaching Plant: Improved energy efficiency, chemical recovery and operational reliability while reducing process-related risks.

iii) Waste Paper Line Optimization: Upgraded the secondary fiber treatment system to enhance recycled pulp processing capacity to 110 TPD. This strengthens sustainability initiatives and maximizes secondary fiber utilization. iv) Paper Machine Upgradations and Size Press Installations: Enhanced product quality and enabled higher participation in premium and value-added paper grades. v) Environmental Infrastructure Projects: Commissioning of CNCG systems and progress on DNCG systems further strengthened environmental performance and statutory compliance.

The Company continues to invest in strategic growth initiatives. The RJ-3 Paper Machine Rebuild and Upgradation Project is progressing as per schedule and is expected to improve machine productivity, product quality and downstream utilisation of expanded pulp capacity.

The 100 TPD Tissue Machine Project is also advancing in line with implementation plans and is expected to diversify the Company s product portfolio into high-growth tissue and hygiene segments.

In addition, the Company continued investments in process automation, warehousing infrastructure, finishing capabilities and reliability enhancement projects aimed at improving productivity, reducing operating costs and strengthening manufacturing resilience.

The cumulative impact of these investments has significantly transformed the Company s manufacturing platform, positioning it for sustainable growth, improved competitiveness and long-term value creation for all stakeholders.

Benefits Realised from Capital Investments

The extensive modernization and capacity enhancement initiatives undertaken over the last two years have begun yielding tangible operational and strategic benefits across the Company s manufacturing facilities.

Enhanced Manufacturing Capability and Reliability

• The expanded Fiberline capacity and associated process improvements have strengthened pulp availability, improved manufacturing flexibility and supported record production during the year. capacity additions across

• Upgradation of recovery and chemical recovery systems has enhanced operational reliability, improved steam generation efficiency and strengthened energy self-sufficiency.

• Modernization of boiler and recovery infrastructure has reduced process bottlenecks, improved equipment availability and lowered operational risks.

Improved Product Quality and Value Addition

• Installation of advanced size press technologies and paper machine upgrades has enhanced product quality, printability and surface characteristics, enabling greater participation in premium and value-added paper segments.

• Strengthened finishing capabilities and process optimisation initiatives have improved consistency in product quality and customer satisfaction.

• The expansion of the Recycled Fiber (RCF) Plant has enhanced the utilization of secondary fiber, supporting sustainable manufacturing practices.

Operational Efficiency and Sustainability

• Investments in automation, process controls and energy-efficient technologies have improved machine productivity, reduced specific consumption and enhanced resource efficiency.

• Environmental initiatives undertaken across manufacturing facilities have strengthened compliance standards, reduced emissions and improved workplace safety.

• Stronger raw material integration and farm forestry initiatives have improved wood security and reduced dependence on imported inputs.

Future Growth Initiatives

The Company continues to progress with strategic projects including the Dilute Non-Condensable Gas (DNCG) System, the RJ-3 Paper Machine Rebuild and the 100 TPD Tissue Machine Project. These projects are expected to enhance environmental performance, improve downstream value addition and diversify the Company s product portfolio into high-growth segments. Your Directors believe that the cumulative impact of these investments will strengthen long-term competitiveness, improve profitability and create sustainable value for all stakeholders.

Greenfield Expansion Project

The Company continues to evaluate long-term growth opportunities in the paper and paperboard segments through its proposed GreenfieldExpansion Project at Unit Kadiyam,

East Godavari District, Andhra Pradesh. The proposed project envisages significant paper, paperboard, pulp manufacturing and associated power infrastructure to strengthen the Company s integrated manufacturing capabilities and support future growth requirements.

The Company had initiated requisite regulatory processes for the proposed expansion, including applications for environmental clearances and engagement with relevant authorities. During the year, the Company undertook a strategic review of the timing and phasing of the proposed expansion in light of prevailing market conditions, elevated import pressures and subdued demand across certain paper segments. Further, considering the ongoing stabilization and optimization of recently commissioned capacity enhancement projects at Rajahmundry and Kadiam unit, the Company has adopted a calibrated approach toward the implementation of the Greenfield Expansion Project. The Company remains committed to pursuing the project in a phased manner aligned with market recovery, demand visibility and prudent capital allocation considerations. The proposed expansion continues to be an integral part of the Company s long-term growth strategy and is expected to be progressed at an appropriate time to maximize stakeholder value.

Tissue Paper Machine

In February 2024, the Board approved the installation of a new tissue paper machine to produce various grades of tissues including facial, napkin, toilet, and towel tissues to capitalise on the opportunities in the growing market demand. The Company secured the necessary Consent to Establish from Andhra Pradesh Pollution Control Board

(APPCB) on January 5, 2024, for a production capacity of up to 35,000 TPA. An agreement was signed in May 2024 with Valmet AB (Sweden) for the supply and commissioning of a tissue paper production line with a maximum capacity of 100 TPD. The power transmission lines have been upgraded from 33KV to 132 KV potential with an additional

7 MVA load, approved by Andhra Pradesh Eastern Power Distribution Company on November 23, 2023. The total approved capital outlay for this project is C 270 Crores, with an expected production capacity of 100 tons per day.

Installation of the main equipment has been completed and equipment check-out and testing activities are in progress.

Trial runs of the tissue machine commenced in May 2026, while balance infrastructure works, including warehouse and utility facilities, are nearing completion. The project continues to progress substantially within the approved budget. the The Tissue Project marks a significant Company s long-term growth strategy by facilitating entry into the tissue and hygiene market, thereby expanding revenue streams and reducing dependence on conventional paper segments. Leveraging the Company s integrated manufacturing capabilities, strong raw material base and operational expertise, the project is expected to strengthen product diversification and create long-term value for stakeholders. Post approval from the State Pollution Board, commissioning and commercial operations are slated to commence in Q2, FY 2026-27. The commercial stabilisation and ramp-up of operations will be undertaken in a phased manner, aligned with market development and customer requirements.

Raw Material Security

The Company continues to focus on sustainable growth while minimizing the environmental impact of its operations. Ensuring the availability of wood which is the prime source of fibre for the industry.

To address challenges related to raw material availability, the Company has implemented Farm Forestry Programme aimed at developing self-reliance through farmer-based plantations promoted by APL. This initiative not only secures raw material supply but also generates employment opportunities and enhances income for rural communities. The Company has entered into strategic collaborations with leading research institutions to strengthen its plantation initiatives & R&D Pragramme. A Memorandum of Understanding (MoU) has been signed with the Institute of Forest Genetics and Tree Breeding (IFGTB), Coimbatore, for a five-year period (2024 2028) A key strategic focus is the phased transition from low-yield, seed-origin plantations to high-yield clonal plantations.

To support this transformation, the Company is strengthening its capacity through infrastructure development and enhanced clonal plant production. During 2025, the Company partnered with 55 nurseries across its catchment areas to meet the increasing demand for quality planting material.

The Farm Forestry team continues to engage actively with farming communities by organizing village-level meetings, conducting training programmes for nursery growers and farmers, and sharing best practices in pulpwood plantation development. The Company also facilitates the resolution of farmer concerns related to wood resource development and procurement.

During the CY 2025, the Company further expanded its efforts by distribution of high-yield clonal plants, including

Eucalyptus and Casuarina, along with improved Subabul seeds. Under the Farm Forestry Programme across the catchment areas, the Company facilitated the distribution of:

• 354 Lakhs Casuarina clones

• 308 Lakhs Casuarina seedlings

• 62 Lakhs Eucalyptus clones

• 177 Lakhs Subabul seedlings

These initiatives have covered approximately 9,574 hectares of land, significantly contributing to raw material security while enhancing rural livelihoods. Through these integrated initiatives, the Company remains committed to strengthening raw material security while promoting sustainable forestry practices.

Committed to Excellence: Our Certifications

The Company maintains internationally recognized management systems across its operations and continues to uphold high standards of quality, environmental stewardship, and occupational health and safety.

The manufacturing facilities at Rajahmundry and Kadiyam, as well as the Corporate Office (Sales & Marketing), hold certifications under ISO 9001:2015 (Quality Management System), ISO 14001:2015 (Environmental Management System), and ISO 45001:2018 (Occupational Health & Safety Management System), reaffirming commitment to operational excellence, sustainability, regulatory compliance, and employee well-being.

Demonstrating our commitment to energy efficiency and sustainable operations, Our Company successfully completed the certification of its Energy Management System under ISO 50001:2018 during 2026. This achievement reinforces our focus on continual improvement in energy performance, optimization of energy consumption, and reduction of environmental impact across our operations.

Energy Efficiency through PAT Program and CCTS

The Company has consistently pursued energy conservation and efficiency enhancement initiatives as part of its commitment to sustainable operations. As a Designated

Consumer under the Ministry of Power s Perform, Achieve and Trade (PAT) Scheme, the Company has implemented various measures to optimize energy consumption and improve operational performance across its manufacturing facilities.

The Company successfully achieved the stipulated energy consumption reduction targets under PAT Cycle VII for

FY 2024-25. To ensure robust compliance and accurate assessment of performance, the Company engaged an authorized third-party agency for Monitoring and Verification

(M&V) of its energy performance under the PAT framework.

With effect from FY 2025-26, the Company has transitioned to the Carbon Credit Trading Scheme (CCTS), jointly administered by the Ministry of Power (MoP) and the Ministry of Environment, Forest and Climate Change (MoEFCC). The CCTS prescribes energy and emission reduction targets over a two-year compliance period covering FY 2025-26 and FY 2026-27. The Company continues to undertake energy conservation initiatives, process optimization measures and technology improvements to meet the prescribed targets under the Scheme.

Through these initiatives, the Company reaffirms its commitment to sustainable operations, continuous improvement in energy efficiency and reduction of its environmental footprint, in alignment with national sustainability objectives and its long-term ESG aspirations.

Depository System

As on March 31, 2026, 41,161 Shareholders holding 19,81,12,685 Shares constituting 99.63% of the paid up Equity Share Capital held in dematerialised mode and 1238 shareholders holding 7,37,510 shares constituting 0.37% paid up Equity Share Capital held in physical mode.

Management Discussion and Analysis Report

The Report on Management s Discussion and Analysis, as required under clause 2(e) of Regulation 34 read with

Schedule V of SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015 covering industry structure and developments, opportunities and threats, outlook, discussion on financial performance, etc., is contained in

Management Discussion and Analysis Report that forms an integral part of this Report

Employee Development and Engagement

The Company s agenda for engaging and developing its employees encompasses a range of initiatives aimed at attracting, nurturing, and retaining talent. Key focus areas include diversity and inclusion, succession planning, building a strong talent pool for critical positions, implementing quality of life programs, and investing in leadership development. We take a professional approach to industrial relations, consistently treating our employees with dignity and respect while upholding the core principles of labour relations. We believe that an engaged and motivated workforce is essential to our continued success. As an employee-centric organization, we are committed to promoting work-life balance and encouraging a healthy lifestyle. In support of this, we organize various workshops and training programs focused on enhancing both the quality of life and leadership capabilities of our team.

To foster employee engagement and strengthen organizational culture, the Company promotes a vibrant and inclusive workplace through a wide range of social, cultural, and recreational initiatives. Throughout the year, employees and their families participate in festival celebrations, team gatherings, weekend movie screenings, and live telecasts of major sporting events on large screens, creating opportunities for interaction and camaraderie beyond the workplace.

These efforts are further complemented by the activities of the Staff Club and Ladies Club, which regularly organize recreational, cultural, and community-oriented programmes.

The Company also provides extensive employee welfare infrastructure, including a spacious community hall that is utilized for recreational activities and family functions, a well-equipped gymnasium, and sports facilities that encourage physical fitness and healthy lifestyles.

Collectively, these initiatives contribute to employee well-being, enhance morale and engagement, strengthen interpersonal bonds, and foster a cohesive and supportive workplace ecosystem.

Surrender of Exempted Provident Fund Trust

During the year, the Company undertook the transition from its exempted Provident Fund Trust to the Employees

Provident Fund Organisation (EPFO) framework with the objective of simplifying administration, strengthening governance and reducing compliance and fiduciary responsibilities associated with trust management.

Pursuant to the approval of the Board and completion of requisite formalities, the Company applied for surrender of the exemption granted to The Employees Provident Fund of Andhra Pradesh Paper Mills Limited. The Employees

Provident Fund Organisation (EPFO) has accorded approval for the Company to operate as an un-exempted establishment with effect from 1 May 2026, subject to completion of statutory requirements and closure formalities.

The transition of member accounts and transfer of provident fund accumulations to EPFO has substantially been completed and the balance statutory processes are being carried out in accordance with applicable regulations. The migration is expected to enhance administrative fundefficiency, administration with the evolving regulatory framework. The Company remains committed to ensuring a seamless transition for employees while safeguarding all statutory and employee interests.

Leveraging Information Technology for Enhanced Operations

Overview

During FY 2025 26, the Company continued to accelerate its digital transformation journey, reinforcing its core technological infrastructure to drive sustainable business growth. Initiatives from the previous systematically extended and completed, alongside a new suite of strategic implementations designed to maximize operational efficiency, bolster cybersecurity defenses, automate complex workflows, and achieve structured cost optimization.

Key Pillars of Digital & Technological Progress

1. Network Infrastructure & Connectivity Optimisation

To address service disruptions and enhance backend application accessibility, the Company significantly upgraded its communication fabric:

Direct Cloud Connectivity: Established a robust Sify MPLS link providing direct connectivity between Amazon Web Services (AWS) Mumbai and the

Rajahmundry Data Centre for seamless SAP Access.

This deployment successfully replaced the legacy TATA link, maintaining identical bandwidth capabilities while driving an exponential 74.1% reduction in annual connectivity costs.

Bandwidth & Performance Amplification: Replaced legacy Airtel ILL and MPLS links at Rajahmundry and Kadiyam with Railtel ILL and Point-to-Point Links to mitigate persistent service issues. This transition achieved a 93.5% surge in internet bandwidth (from 155 Mbps to 300 Mbps) and a 150% expansion in MPLS bandwidth (from 30 Mbps to 75 Mbps), while simultaneously delivering a 24.8% cost saving.

2. Process Automation & Industrial Digitalization

The Company continues to advance deep automation within its supply chain and core manufacturing operations:

Unmanned Weighbridge Automation: Implementation is underway for a No-Men Weighbridge Automation framework across the Rajahmundry and Kadiyam plants. Integrating RFID, FastTag, and automated boom barriers directly into SAP, this system is engineered to elevate transaction speed, transparency, and operational control.

Procurement Streamlining: The automation of SAP

Requests for Quotations (RFQ) for both materials and services is in progress to simplify vendor interactions and cycle times.

Tissue Business Enablement: To support the

Company s strategic entry into the tissue segment, comprehensive SAP application configurations, bespoke customizations, custom developments, and new hardware infrastructure additions are actively being executed.

3. Strategic Workforce Digitisation & Workplace Modernisation year were

Human capital management and modern workplace ecosystems were enhanced through targeted software and asset interventions:

Extended Contractors Attendance Management:

Scaled the digital Time & Attendance system by procuring and on boarding 3,500 additional licenses specifically for contract employees (non-card holders), standardizing tracking methodologies.

Field Workforce Mobility: Successfully deployed a dedicated Time & Attendance Mobile Application powered by 50 mobile application licenses for Forestry field personnel, drastically improving data accuracy.

Managed Print Services Lifecycle: Completed the end-of-life replacement of legacy printing assets by implementing HP Managed Print Services, deploying

35 advanced HP printers to ensure higher hardware uptime and optimized operational support costs.

4. Advanced Security and Surveillance Upgrades

Physical asset protection and security compliance are being systematically scaled: Mill Surveillance System: Implementation is underway for an enterprise-grade closed-circuit network, introducing 120 high-definition CCTV cameras alongside dedicated networks and servers distributed mill-wise across the Rajahmundry operations.

Forward Looking Roadmap: FY 2026–27 Strategic Initiatives

To sustain its technology-led competitive advantage, the

Company has charted out a comprehensive technological roadmap for the upcoming financial year, focusing on next-generation core application updates and infrastructure cloud mitigation:

Core ERP Modernisation: Initiating the architectural upgrade of the core enterprise platform, transitioning the

SAP S/4HANA version from 1909 to 2025 to leverage advanced database capabilities and modern features.

Cloud Cost Containment: Implementing the SAP Document Management System (DMS) by positioning a dedicated server locally at the Rajahmundry Data Centre.

Moving standard SAP application attachments to this local environment will materially reduce space procurement dependencies on the Amazon Web Services (AWS) Cloud.

Enterprise Wireless Modernisation: Prioritizing the complete lifecycle replacement of the existing 15-year-old legacy Wi-Fi infrastructure across all geographic corporate locations to satisfy modern, stringent security compliance frameworks.

Infrastructure Relocation: Procuring high-capacity new servers to execute the complete backend migration of emSphere Time & Attendance applications onto upgraded, modern infrastructure.

Application Interfacing Evolution: Converting current SAP application extensions to the advanced ICF2 framework, supported by parallel hardware infrastructure additions.

Through these cohesive digital investments, the Company has structurally improved its operational resilience, fortified information security protocols, optimized technical spending, fieldvisibilityand and laid down a robust foundation for a future-ready enterprise.

Community Service and Engagement

The Company remains committed to fostering inclusive and sustainable development in the communities surrounding its areas of operation. Through its Corporate Social Responsibility (CSR) initiatives, the Company undertook a wide range of projects during the year across the focus areas of education, healthcare, community development, women empowerment and public welfare, thereby contributing to improved quality of life and socio-economic development in and around Rajamahendravaram and Kadiam.

Education: The Company continued its commitment towards strengthening educational infrastructure and promoting quality education in its operational areas of Rajamahendravaram, Kadiam and surrounding regions.

During the year, infrastructure support was extended to Government schools, Mandal Parishad and Zilla Parishad schools in rural areas, colleges and educational institutions through the construction and renovation of classrooms, dining sheds, compound walls, sanitation infrastructure, flooring works, provision of computers, furniture and other learning resources. School buses and an e-auto provided to Paluku orphanage for blind and buses were provided to APPM Model high school which serve underprivileged students.

These initiatives benefited students across Rajahmundry, Kadiam and surrounding rural areas improving access to quality education. The Company also encouraged academic excellence by awarding merit scholarships to outstanding students from schools in Rajamahendravaram and Kadiam.

Nurturing Sports Talent: The Company extended support to promising young women athletes in boxing and archery through specialised training assistance aimed at enabling participation at national and international levels.

Healthcare: Under healthcare initiatives, the Company provided critical infrastructure, medical equipment, furniture and patient-care facilities to Government hospitals, Community Health Centres and veterinary healthcare institutions in Rajahmundry and Kadiam.

Support was extended for diagnostic, treatment and surgical facilities, including the provision of advanced medical and veterinary diagnostic equipment. The Company organized eye screening, eye-care, health check up camps for underprivileged communities in urban and rural areas in

Rajahmundry and supported corrective vision treatment including post-surgery eye lenses.

Community Engagement: The Company undertook several community development initiatives aimed at improving public infrastructure, sanitation facilities, sustainability and livelihood opportunities and overall quality of life for local communities. Major projects undertaken included support for solid waste management through the provision of tractors to local bodies, construction of community halls, old-age homes and skill development centres, development of bathing ghats, drainage systems and sanitation facilities, desiltation and restoration of water bodies, replacement of ageing water supply pipelines and plantation drives along waspublic roads. A significant the construction of a sump-cum-pump house along with a from BIS for Zero failures of dedicated storm-water pipeline network at Kotilingalpeta, providing a long-term solution to recurring flooding during the monsoon season and improving living conditions for local residents.

Women Empowerment: The Company also supported initiatives aimed at promoting livelihoods and social inclusion, including tailoring and vocational training centres for women, skill development programmes and rehabilitation-oriented projects. Infrastructure support was also extended to Anganwadi centres across East Godavari district. As part of its commitment to women empowerment and social welfare, the Company supported programmes recognising women s achievements in international women s day and Devi Ahilyabai Holkars Centenary Birth Celebration commemorating significant social and cultural occasions.

Skill Development: Support was extended to correctional institutions for inmate skill enhancement and to farmers through the supply of treated water for agricultural purposes.

A Skill development centre was constructed in Kadiam for upskilling the rural youth.

Through these interventions, the Company continues to create sustainable value for communities while reinforcing its commitment to inclusive growth and social responsibility. The Company has adopted a CSR Policy which is placed on the Company s website: https://andhrapaper. com/wp-content/themes/andhra_paper/uploads/ investors/1645611255CSR%20Policy.pdf.

The Members of Corporate Social Responsibility Committee as on March 31, 2026 comprised of:

Mr. Virendraa Bangur	Chairman
Mr. Virendra Sinha	Member
Mr. Saurabh Bangur	Member

The Annual Report on CSR activities is attached as Annexure – 1 to this report.

Awards

During the year, the Company has secured bronze medal in the Chemical & Paper industries category, Industrial Safety Leadership Award at CII (Confederation of Indian Industry)

Andhra Pradesh Industrial Safety Excellence Awards 2025 for Unit: Rajahmundry.

During the year, the Company has secured bronze medal in the Chemical & Paper industries category, Industrial Safety Performer at CII (Confederation of Indian Industry)

Andhra Pradesh Industrial Safety Excellence Awards 2025 for Unit: Kadiyam.

Appreciation certificate in last two years and continuous efforts to maintain quality of the products under licence CM/L-6600040906 .

Related Party Transactions

Your Company has in place a Policy on Materiality of Related Party Transactions and dealing with Related Party Transactions, which governs the review and approval process for all related party transactions. All such transactions are placed before the Audit Committee for prior approval. Omnibus approvals are also obtained for transactions that are repetitive in nature. Where the exact value of transactions cannot be estimated, the Committee grants approval based on reasonable projections for the financial year.

All related party transactions entered into during the year under review were in the ordinary course of business and on an arm s length basis. There were no material or significant related party transactions with promoters, promoter group entities, directors, or key managerial personnel that could potentially conflict with the interests of the Company at large. Accordingly, disclosure in Form AOC-2 is not applicable. However, Form AOC-2 is appended as Annexure 2 for completeness.

The Board of Directors approved a Policy on Related Party

Transactions which is placed on the Company s website https://andhrapaper.com/wp-content/uploads/2023/04/ Policy-on-related-party-transactions-1.pdf The disclosures on related party transactions are given in Notes to the financial statements.

Remuneration Policy

The Company has adopted the Nomination and Remuneration Committee Charter which contains, inter alia, framework for Directors appointment and remuneration, criteria for determining the qualifications, positive attributes, independence of a director and other matters provided under

Section 178(3) of the Companies Act, 2013 ( The Act ). Pursuant to Section 178(4) of the Act, the Company also adopted Remuneration Policy relating to remuneration for the Directors, Key Managerial Personnel and Senior

Executives in the rank of Vice President and above.

The Remuneration Policy is placed on Company s website https://andhrapaper.com/wp-content/themes/andhra_paper/ uploads/investors/1599824266Remuneration%20Policy.pdf

Energy Conservation, Technology Absorption & Foreign Exchange earnings and outgo

Particulars of conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are given in Annexure - 3 attached to this Report.

Risk Management

The Company has a robust enterprise risk management framework designed to proactively identify, assess, monitor and mitigate risks and capitalize on emerging opportunities. The framework seeks to enhance transparency in decision-making, safeguard business objectives, strengthen resilience and support sustainable value creation.

The paper industry continues to operate in a dynamic environment characterized by challenges such as raw material availability and price volatility, increased imports, evolving trade policies, changing customer preferences, environmental regulations and intensifying market competition. Industry bodies, including the Indian Paper Manufacturers Association (IPMA), have highlighted concerns relating to raw material security, import pressures, trade agreements and the need for supportive policy measures for the domestic paper industry.

The Company continuously monitors both internal and external risk factors and implements appropriate mitigation strategies through operational excellence, supply chain optimization, product diversification, cost management initiatives and regulatory compliance measures.

The Company s risk management processes are periodically reviewed by the management and the Board to ensure their continued effectiveness in an evolving business environment.

The risks associated with the business, their potential impact and the mitigation measures adopted by the Company are discussed in greater detail in the Management Discussion and Analysis Report forming part of this Annual Report.

Directors

During the financial year 2025 26, Mr. Virendra Sinha was re-appointed as a Non-Executive Independent Director of the Company for a second term of three consecutive years commencing from April 1, 2025 and ending on March 31, 2028 (both days inclusive) pursuant to the approval of the shareholders. Ms. Papia Sengupta was re-appointed as

Non-Executive Independent Director of the Company for a second term of three consecutive years commencing from

September 1, 2025 to August 31, 2028 (both days inclusive).

Upon completion of their respective terms of office,

Mr. Sudarshan V. Somani and Mr. Arun Kumar Sureka ceased to be Independent Directors of the Company with effect from the close of business hours on October 29, 2025.

The Board places on record its sincere appreciation for the valuable guidance, insights and contributions made by them during their tenure as Directors of the Company.

Consequent to the cessation of office Somani and Mr. Arun Kumar Sureka, Mr. Deepak Jalan and Mr. Ramesh Kumar Aggarwal were appointed as

Independent Directors on the Board of the Company with effect from October 29, 2025. The Board extends a warm welcome to them and looks forward to their valuable contributions in supporting the Company s long-term growth and governance objectives.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Saurabh Bangur, Managing Director, retires by rotation at the ensuing Annual General Meeting and, being eligible, has offered himself for re-appointment.

Further, the present term of office of Mr. Saurabh Bangur as Managing Director is due to expire on September 30, 2026. Based on the recommendation of the Nomination and

Remuneration Committee, the Board has approved, subject to the approval of the shareholders, his re-appointment as

Managing Director of the Company for a further period of five years commencing from October 1, 2026 up to

September 30, 2031.

Independent Directors

Mr. Virendra Sinha, Mrs. Papia Sengupta, Mr. Ramesh Kumar

Aggarwal and Mr. Deepak Jalan are Independent Directors of the Company.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under

Section 149 (6) of the Act and Regulations 16(1)(b) and 25(8) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ( the SEBI Listing Regulations ) and that they are independent from the Management of the Company and they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact his ability to discharge his duties with an objective independent judgment and without any external influence.

Further, all the Independent Directors have given declarations that they complied with the provisions of

Companies (Appointment and

Rules, 2014. Further, they have given declarations that they have complied with the Code for Independent Directors prescribed in Schedule IV to the Act and the Code of Business Conduct and Ethics of the Company.

A separate Meeting of Independent Directors was held on March 18, 2026. All the Independent Directors of the

Company attended the said Meeting.

The Board is of the opinion that the Independent Directors of the Company possess the requisite integrity, expertise, experience and proficiency of the Companies Act, 2013 and the SEBI (Listing

Obligations and Disclosure Requirements) Regulations, 2015. The Independent Directors bring with them rich and diverse experience in the areas of business management, finance, strategy, governance and industry, enabling them to provide independent judgment and valuable guidance in the deliberations of the Board and its Committees.

Details of Key Managerial Personnel

As on March 31, 2026, Mr. Saurabh Bangur, Managing

Director, Mr. Mukesh Jain, Whole-time Director (Executive Director), Mr. Rajesh Bothra, Chief Financial Officer and Mr. Bijay Kumar Sanku, Company Secretary are the Key duties, exercise diligent oversight, and make

Managerial Personnel of the Company.

Meetings of the Board

During the year under review, four Board Meetings and four Audit Committee Meetings were held. The maximum interval between any two Meetings did not exceed 120 days, as prescribed by the Companies Act, 2013. The details of the Meetings held are given in the Corporate Governance Report forming part of this Report.

Performance Evaluation

Pursuant to the provisions of the Act and SEBI Listing Regulations, the Annual performance evaluation of Board, Committees of the Board, Chairman, Managing Director and

Whole-time Director (Executive Director) has been carried out based on various parameters.

A separate exercise for the financial year 2025-26 was carried out to evaluate the performance of all individual directors including Independent Directors who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interests of the Company and its minority shareholders etc.

Board Training and Induction

At the time of appointing a Director, a formal letter of appointment is issued, clearly outlining their role, functions, duties, and responsibilities as a Director of the Company. This letter, in compliance with applicable laws, also details the statutory obligations and compliances expected from them under the Companies Act, 2013, the

SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and other relevant laws and regulations.

Furthermore, it explicitly covers aspects such as the Code of Conduct, Insider Trading Code, and the policy on Related Party Transactions, as mandated by SEBI LODR.

To foster informed decision-making and ensure good governance, the Board of Directors and its Committees are consistently apprised by management. These regular updates provide a holistic view of the Company s landscape, covering Business operations and financial performance,

Detailed insights into operational efficiency and the

Company s financial health, Progress and developments regarding key strategic objectives and growth plans, analysis of prevailing market scenario, competitive landscape, identification of potential headwinds, potential risks and mitigation strategies, opportunities and challenges and updates on adherence to adherence to the Companies Act, 2013, SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015, and other pertinent laws and regulations, ensuring the Company operates within the prescribed legal framework. This continuous and critical flow of information empowers Directors to effectively discharge their fiduciary well-considered decisions that contribute directly to the Company s sustainable growth and the enhancement of shareholder value.

Details of Familiarization of Directors are disclosed on the

Company s website: https://andhrapaper.com/wp-content/ uploads/2026/04/Familiarization-Programme-during-the-year-2025-26.pdf.

Audit Committee

As on March 31, 2026 the details of Audit Committee is as follows.

S. No Name of the Member	Category	Designation
1 Mr. Virendra Sinha	Non-Executive Independent Director	Chairman
2 Mr. Ramesh Kumar A	Non-Executive Independent Director	Member
3 Mrs. Papia Sengupta	Non-Executive Independent Director	Member
4 Mr. Saurabh Bangur	Executive Director	Member

All the recommendations made by the Audit Committee were accepted by the Board.

Particulars of Employees

The information required pursuant to Section 197 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, is provided in

Annexure-4. Having regard to the provisions of the second proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. If any Member is interested in obtaining information on Rule 5 (2) of the Companies

(Appointment and Remuneration of Managerial Personnel)

Rules, 2014, such Member may, write to the Company Secretary at the Registered Office in this inspect the related documents/information at the Registered Office of the Company.

Vigil/Whistle Mechanism

The Company has adopted Whistle Blower Policy to deal with instance of fraud or any unethical or improper practices.

A copy of this Policy is available on the Company s website: https://andhrapaper.com/wp-content/themes/andhra_paper/ uploads/investors/1658382966Whistle%20Blower%20 Policy%20modified%20on%202 1.07.2022.

Internal Financial Controls

The Company established Internal Financial Control (s) commensurate with the size, scale and complexity of the operations. Internal audit function is being handled by a professional firm of chartered accountants. The main function of Internal Audit is to monitor and evaluate adequacy of internal control system in the Company, its compliance with the operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners take corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions are reported to the Audit Committee.

Statutory Auditors audited the Internal Financial Controls (IFC) over financial reporting of the Company as of

March 31, 2026 in conjunction with audit of the financial statements of the Company for the year ended on that date.

Unmodified opinion on IFC was given by them.

During the year, the Audit Committee and the Executive Board Members, as Those Charged With Governance (TCWG), held discussions with the statutory auditors in accordance with applicable regulatory requirements. The deliberations covered audit planning, significant observations, internal controls, financial reporting matters and auditor independence.

Statutory Auditors

The Report of Auditors for the financial Year 2025-26 does not have any qualifications,reservations or adverse remarks. The Report is enclosed with the financial statements in this

Annual Report.

M/s. MSKA & Associates LLP, Chartered Accountants,

Statutory Auditors of the Company have been appointed, for a term of five years, to hold office from the conclusion of 58 th Annual General Meeting till the conclusion of 63 rd Annual

General Meeting corresponding to the financial years from 2022-23 to 2026-27.

Secretarial Auditors regardorcan At 61 st Annual General Meeting, M/s. D. Hanumanta Raju &

Co., was appointed as Secretarial Auditors of the Company for a period of 5 consecutive years commencing from FY 2025-26 to FY 2029-30. Secretarial Audit Report under Section 204(1) of the Act issued by M/s. D. Hanumanta Raju & Co., Practicing Company Secretaries, in respect of financial year 2025-26 is attached as Annexure - 5 to this Report.

The Secretarial Auditors, in their report, has reported delayed compliance with Regulation 17(1A) of the SEBI

(LODR) Regulations, 2015. In this regard, the Company paid fines of C 1,10,920/- each to NSE and BSE and has an appeal before the Securities Appellate Tribunal (SAT),

Mumbai. The matter is currently sub-judice.

The Secretarial Auditors has also reported that Andhra Paper Foundation, a wholly owned subsidiary of the Company, was converted into Andhra Paper Private Limited during the year.

Subsequently, the company applied for striking off under Section 248 of the Companies Act, 2013, and its name was struck off by the Registrar of Companies with effect from

June 4, 2025. Accordingly, the company stands dissolved.

Internal Auditors

M/s. Batliboi & Purohit, Chartered Accountants, Mumbai were appointed as the Internal Auditors for FY 2025-26.

The internal audit reports and the suggestions made on a quarterly basis by the auditors, during the year under review, were duly noted by the Board and acted upon. The Board of Directors, based on the recommendation of the Audit

Committee have re-appointed the said firm as the Internal Auditors of your Company for the FY 2026-27.

Cost Auditors

In terms of Section 148 of the Act read with the Companies (Audit & Auditors) Rules, 2014, the Board at their Meeting held on May 14, 2026, on the recommendation of Audit Committee, appointed M/s. Narasimha Murthy & Co., Cost

Accountants as Cost Auditors of the Company for the financial year 2026-27, at a remuneration of C 4.50 Lakhs plus applicable taxes and reimbursement of out-of-pocket expenses and their remuneration is being submitted for ratification by the Members at the forthcoming Annual

General Meeting.

Cost Accounting Records and Cost Audit

Cost accounting records for the financial year under review were maintained as per the Companies (Cost Records and Audit) Rules, 2014. M/s. Narasimha Murthy & Co,

Cost Accountants were appointed as Cost Auditors of the Company to audit the Cost Records for the year ended

March 31, 2025. The Cost Audit Report for the financial year ended March 31, 2025 was filed Corporate Affairs in August, 2025. The Cost auditors have audited and expressed satisfaction about the maintenance of cost audit records, internal controls and issued an unqualified report.

The Cost Audit Report for the year ended March 31, 2026 will be filed within the due date.

Public Deposits

The Company has not invited, accepted or renewed any deposits under chapter V of Companies act, 2013. That the company has not been accepted any deposits, so there was no obligation arise to repay or pay any interest and no amount on account of principal or interest on deposits was outstanding as on the date of the balance sheet and thus no default.

Particulars of loans, guarantees, security or investments

The particulars of loans, guarantees, and investments covered under the provisions of Section 186 of the Act have been disclosed in the financial statements.

Subsidiary Company

Andhra Paper Foundation, a wholly owned subsidiary of the Company incorporated under Section 8 of the

Companies Act, 2013, had ceased its operations and activities as the Company directly undertook all Corporate

Social Responsibility (CSR) initiatives. Consequently, the Foundation s original purpose became redundant.

Pursuant to the approval granted by the Regional Director on September 19, 2024, the Foundation was converted of into a private limited company and a fresh Certificate

Incorporation was issued by the Registrar of Companies,

Vijayawada, on November 11, 2024 in the name of Andhra Paper Private Limited. Subsequently, Andhra Paper Private Limited applied for striking off its name under Section 248 of the Companies Act, 2013. The Registrar of Companies,

Vijayawada, struck off the name of Andhra Paper Private

Limited from the Register of Companies with effect from

June 4, 2025 and accordingly, the company stands dissolved.

Annual Return

In terms of Section 92(3) of the Act, the Annual Return for the financial year ended March 31, 2026 is displayed on the website of the Company www.andhrapaper.com

Business Responsibility and Sustainability

Report ( BRSR )

Pursuant to Regulation 34 of the SEBI Listing Regulations, Business Responsibility and Sustainability Report forms part of this Report as Annexure - 6, which describes the initiatives taken by the Company from an environmental, social and governance perspective.

Material changes and commitments affecting the financial position of the Company which occurred between end of financial year and date of the Report

Material Changes and Commitments Affecting the Financial Position of the Company

Subsequent to the close of the financial year ended

March 31, 2026, and up to the date of this Report, operations at the Company s Kadiyam Unit were affected due to an illegal strike resorted to by certain contract workmen engaged through third-party contractors with effect from April 27, 2026, primarily in relation to demands concerning revision of contractual terms with their respective employers. The Company s permanent workforce was not a party to the strike. During the course of discussions, employee representatives and other stakeholders were also involved in efforts aimed at resolving the situation and restoring normalcy.

In view of the prevailing situation and in order to safeguard employees, plant and machinery and other assets, the

Company declared a lockout at the Kadiyam Unit with effect from 10:00 p.m. on May 1, 2026. The disruption in operations resulted in loss of production at the Kadiyam Unit and had an impact on the Company s operations during the period. The Management continued its engagement with contractors, workmen representatives and the concerned authorities for restoration of normalcy and resumption of operations.

The Company continued to closely monitor the evolving situation and made appropriate disclosures to the stock exchanges from time to time in accordance with applicable regulatory requirements.

There was no change in the nature of business of the Company during the year. Except as disclosed above, there were no other material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year of the Company and the date of this Report.

Directors Responsibility Statement

The Board of Directors hereby confirms and declares that:

• In the preparation of finalaccounts for the year ended

March 31, 2026 the applicable accounting standards had been followed;

• they had selected such accounting policies and applied them consistently and made judgements 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 financial year end March 31, 2026 and of the profit and loss of the Company for the year; • they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; • they had prepared the accounts for the year ended

March 31, 2026 on a going concern basis; • they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

• they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

General by • There were no significant the regulators or courts or tribunals which would impact the going concern status of the Company and its future operations.

• During the year under review, neither the statutory auditors nor the secretarial auditor has reported to the audit committee, under Section 143 (12) of the

Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees.

• The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder for prevention and redressal of complaints of sexual harassment at workplace. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All women employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year, no complaints were received by the Company under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

• There is no application or proceeding pending under Insolvency and bankruptcy code, 2016

• The company has complied with all the applicable laws, rules, regulations and secretarial standards

• All Policies as required under the Act or the SEBI Listing Regulations are available on the website: https:// andhrapaper.com/investors-policies./

• Details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or

Financial Institutions along with the reasons thereof:

Not applicable.

Acknowledgements

The Board of Directors wish to place on record their gratitude to the Central Government, Government of Andhra Pradesh, Government of Telangana and Banks for their continued support during the year.

The Board of Directors wish to convey their thanks to the valued customers and dealers for their continued patronage and place on record their appreciation of the contribution made by all the employees during the year under review.

For and on behalf of the Board
Shree Kumar Bangur
Chairman & Non-Executive Director

Place: Rajahmundry
Date: May 14, 2026