Astron Paper & Board Mill Ltd Management Discussions

1. Industry Structure and Developments

The Company operates in a sector that witnessed significant volatility during FY 2024–25. However, the Companys own operations were suspended effective September 2024 due to financial distress and liquidity constraints. This development marks a departure from prior years and has materially impacted the Companys position within the industry.

2. Opportunities and Threats Opportunities:

• Revival through strategic investor participation or asset monetization

• Operational realignment based on market demand and cost e_iciency

Threats:

• Loss of customer and vendor confidence

• Risk to going concern status

3. Segment-wise or Product-wise Performance

The dominant source of income of the company is from the sale of kra_ paper of various quality which do not materially differ in respect of risk perception and the return realized/to be realized. Further, the geographical/regulatory environment in which the company operates does not materially differ considering the political and economic environment, the type of customers, the nature of business, assets employed and the risk and return associated in respect of each of the geographical area. So, the disclosure requirements "Operating Segments" are not applicable

4. Outlook

The Company is currently in a non-operational phase. Management is actively exploring revival strategies, including restructuring under applicable legal frameworks, engagement with stakeholders, and identification of potential investors.

5. Risks and Concerns

The Company faces elevated risks across financial, operational, and legal domains. Key concerns include:

6. Internal Control Systems and Adequacy

Despite the operational halt, the Company continues to maintain internal controls over financial reporting, statutory compliance, and governance. A monitoring committee has been constituted to oversee revival efforts and ensure transparency in decision-making.

7. Discussion on Financial Performance with Respect to Operational Performance

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 Companys 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.

8. Material Developments in Human Resources / Industrial Relations

The operational closure led to workforce rationalization. The Company continues to maintain essential staff for compliance, legal coordination, and revival planning. Industrial relations remain stable, with no reported disputes.

9. Details of Significant Changes in Key Financial Ratio

Due to the cessation of operations, key financial ratios such as operating margin, return on net worth, and current ratio have undergone significant changes. The details of the same are as mentioned below:

Disclosure of Financial Ratios:

The previous financial year ratios have been restated considering the effects of prior period errors and omission applied as per Ind-AS-8. @ Substantial operational losses incurred during the year, reduction in value of inventories due to revaluation, delay in payment to suppliers and statutory liabilities due to liquidity and plant shutdown during the year resulted into lower current ratio compared to the preceding financial year.

# Substantial operational losses resulted into erosion of net-worth of the company. Further due to closure of plants, the company could not honour its liabilities towards banks. These factors had negative impact on debt equity ratio of the company for the year. $ Substantial operational losses coupled with inability of the company to discharge its liabilities towards banks resulted into debt service ratio of the company being substantially lower than the previous financial year and being negative.

^ Substantial operational losses and consequent substantial reduction in average capital employed in the business resulted into substantial negative return on equity of the company.

& Closure of plants and subsequent non-resumption of manufacturing upto the closure of financial year resulted into lower inventory turnover ratio compared to the preceding financial year.

* Substantial Reduction in turnover on account of closure of plants, non-resumption of business and substantial outstanding balance of trade receivables vis-?-vis operating turnover had negative impact on trade receivable turnover ratio.

! Substantial operational losses, closure of plants, non-availability of liquid sources of funds and subsequent inability of the company to discharge its liabilities towards trade payables resulted into trade payable ratio being lower than preceding financial year.

!! Substantial operational losses, closure of plants and erosion of capital employed in the business adversely affected net capital turnover ratio.

@@ Continuous losses in the business over the last three financial years impacted the liquidity of the company adversely which resulted into closure of business during the year. Further due to non-utilisation of inventories of raw materials, coal and chemicals for the substantial period of time the quality of the same deteriorated and hence they had to be revalued at their respective realizable values. In addition to this though the plants remained non-operational for the substantial period of time during the year, the company had incurred some costs being fixed in nature and also finance cost increased due to additional levies by banks for accounts becoming NPA. These factors had impacted the profitability substantially and resulted into substantial losses for the year.

## Substantial losses over the past three years and resultant reduction in net-worth coupled with inability of the company to discharge liabilities towards bank borrowings resulted into substantial negative return on capital employed for the year.

* Investments includes Investment in Securities, Balance in Fixed Deposit Accounts with Bank, Investment Properties only.

Income On Investment includes Interest on Bank Fixed Deposits, Rental Income on Investment Property and Gain/(Loss) on Investment Held or Sold.

10. MD AND CFO CERTIFICATION:

Mr. Kirit G Patel, Managing Director and Mr. Rohit Patel, CFO have given certificate to the board as contemplated in SEBI Listing Regulations.

11. HEALTH, SAFETY AND ENVIRONMENTAL PROTECTION:

Company has complied with all the applicable environmental laws and labour laws. The Company has been complying with the relevant laws and has taking all necessary measures to protect the environment. Various initiatives have been taken to reduce environmental footprint and enhance operational e_iciency have led to significant improvement in environmental parameters as well as techno-economic e_iciency.

12. COMPETITION:

Competition in the market has intensified and forced the players to adopt aggressive marketing strategy and reduce the prices because of this the company had incurred losses in the past and because of continuous past losses and due to liquidity issues the companys production was shut from September 2024. The management is planning for revival of the company and the management is actively pursuing revival strategies, including discussions with potential strategic investors and restructuring proposals. However, as a listed entity governed by SEBIs 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.

13. INITIATIVES BY THE COMPANY:

The Company has taken the following initiatives:

• The management is in discussion with potential strategic investors and restructuring proposals.

• Concentration on realization of its book debts and other current assets to ease the liquidity crisis.

The management is quite hopeful for turnaround and revival of the company.

14. CAUTIONARY STATEMENT

This report contains forward-looking statements based on current expectations and assumptions. Actual results may differ materially due to external factors, regulatory developments, and stakeholder decisions. The Company does not undertake any obligation to update these statements unless required by law.

1. The ratio of the remuneration of each director to the median remuneration of the employees for the financial year 2024-25

2. In the Financial Year, there was increase of -73.33% in the median remuneration of employees.

3. There were 32 permanent employees on the rolls of the Company as on March 31, 2025.

4. Average Percentile increase in the salaries of employees other than Managerial Personnel in the last Financial Year was Nil % and average percentile increase in remuneration of Managerial Personnel was Nil %.

5. It is a_irmed that the remuneration is as per the Nomination and Remuneration Policy of the Company.

* Out of total salary of Kirit G Patel amounting to 48.00, salary of 12.00 only have been withdrawn. * Out of total salary of Ramakant K Patel amounting to 12.00, salary of 7.00 only have been withdrawn.