Astron Paper & Board Mill Ltd Auditor Reports

To the Members of

DISCLAIMER OF OPINION:

We were engaged to audit the accompanying standalone financial statements of ASTRON PAPER & BOARD MILL LIMITED ("the Company"), which comprise the standalone balance sheet as at March 31, 2025, the standalone statement of profit and loss including other comprehensive income, standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of the material accounting policies and other explanatory information (hereinafter referred to as "Standalone Financial Statements").

We do not express an opinion on the accompanying standalone financial statements of the Company. Because of the significance and materiality of the matters described in the Basis for Disclaimer of Opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these standalone financial statements and accordingly we do not express an opinion on the accompanying standalone financial statements of the Company.

i. The company has availed working capital and other loans from various banks for an amount exceeding Rs. 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 Rs. 7,879.73 Lakhs including interest as at March 31, 2025 towards bank loans. However, in absence sufficient 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. ii. 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.

However, in absence sufficient appropriate audit evidence regarding grounds on the basis of which the management of the company has prepared and presented standalone financial statements as going concern, we disclaim our opinion as to the going concern status of the company as at March 31, 2025.

iii. No Provision has been made by the company for outstanding export trader receivables of Rs. 1.60 crores and domestic trade receivables of Rs. 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 Rs. 2.69 crores and consequent net-worth lower by Rs. 2.69 crores.

The management of the company has not provided to us for our verification the sufficient 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.

iv. 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".

v. 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 Rs. 28.66 Crores. The company has not charged any interest on loans and advances of Rs. 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 extraordinary 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. vi. The company has made investments in 40,35,000 Equity Share of Rs. 10.00 each amounting to Rs. 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. vii. 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 Rs. 5.78 Crores as Advances Paid for Imported Raw Materials. In absence of sufficient 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. viii. 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. ix. 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. x. 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 Rs. 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 sufficient 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. xi. 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 sufficient 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. xii. 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 companys 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. xiii. 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.

As a result of the matters stated in para (i) to (xiii) above and other factors affecting procedures to be applied by us to verify the reported amounts and disclosures in the standalone financial statements, we have not been able to obtain sufficient appropriate audit evidence to provide the basis of our opinion on the standalone financial statements and reported amounts and disclosures in the standalone financial statements including that reported in notes to the financial statements.

MATERIAL UNCERTAINTY RELATED TO GOING CONCERN:

We draw attention to Basis of Disclaimer of Opinion section of our audit report as reported herein above. Due to the materiality of the factors stated Basis of Disclaimer of Opinion, financial position of the company, defaults with regard to bank and other creditors, substantial erosion of the net-worth of the company, continuous substantial losses in the business, the liabilities being far in excess of the available assets, possible effect of impairment of assets and realizable value of financial instruments and assets, closure of business operations, substantial tax demands being in excess of net-worth of the company and pending substantial legal matters, all financial parameters being negative and adverse and other factors affecting the possibility of discharge of liabilities from available sources of funds, the going concern status of the company has been substantially and materially adversely affected which indicates that a material uncertainty exists that may cast significant doubt on the companys ability to continue as going concern 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. However, for the reasons more as described in Note No. 35(s) to the standalone financial statements, the management of the company has prepared and presented the accompanying standalone financial statements assuming the status of the company as a Going Concern.

RESPONSIBILITY OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE STANDALONE FINANCIAL STATEMENTS:

The Companys Management and Board of Directors are responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (Ind AS), accounting principles generally accepted in India, including the Indian Accounting Standards specified under Section 133 of the Act, read with the Companies (Indian Accounting Standard) Rules, 2015 as amended.

This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records,_ _ relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Companys financial reporting process.

AUDITORS RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS:

Our responsibility is to conduct an audit of the standalone financial statements in accordance with the Standard on Auditing and issue an auditors report thereon.

However, because of the matters described in the Basis for Disclaimer of Opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on the accompanying standalone financial statements. We are independent of the Company in accordance with the Code of Ethics and provisions of the Act that are relevant to our audit of the standalone financial statements in India under the Act, and we have fulfilled our other ethical responsibilities in accordance with the Code of Ethics and the requirements under the Act.

OTHER MATTER: i. According to the information and explanations given to us, the determination of the transactions with MSME vendors and balances thereof, have been done based on the either certificate received from the respective parties or confirmation in that regard from the parties. In absence of complete reconciliation in this respect, completeness of the disclosures in respect of MSME vendors, liability for interest thereon as per MSME Act and legal action for claim of recovery by the respective MSME Parties in this regard for outstanding dues, if any and on Income Tax computations thereon on payments made beyond specified date to be ascertained.

Our opinion is not modified in respect of matters stated in para (i) above.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS:

1. As required by The Companies (Auditors Report) Order, 2020 issued by The Central Government Of India in term of section 143 (11) of The Companies Act, 2013 and except for the possible effects of the matters described in the Basis for Disclaimer of Opinion section, we enclose in the Annexure-A hereto a statement on the matters specified in paragraphs 3 and 4 of the said order, to the extent applicable to the company.

2. As required by section 143(3) of the Act, based on our audit we report that: a) As described in the Basis for Disclaimer of Opinion section, we have sought but have not been able to obtain all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. b) Due to the effects/possible effects of the matter described in the Basis for Disclaimer of Opinion section and for the matters stated in the paragraph below on reporting under Rule 11(g), we are unable to state whether proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books. c) The Standalone Balance Sheet, Standalone the Statement of Profit and Loss including Other Comprehensive Income, the Standalone Statement of Changes in Equity & the Standalone Statement of Cash Flows dealt with by this Report are in agreement with the books of account; d) Due to the effects/possible effects of the matter described in the Basis for Disclaimer of Opinion section, we are unable to state whether the financial statements comply with the Indian Accounting Standards specified under section 133 of the Act. e) The matter described in the Basis for Disclaimer of Opinion section particularly going concern matter, in our opinion, may have an adverse effect on the functioning of the Company. f) On the basis of written representations received from the directors of the Company as on March 31, 2025, and taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2025, from being appointed as a director in terms of sub-section (2) of section 164 of Act; g) The reservation relating to maintenance of accounts and other matters connected therewith are as stated in the Basis for Disclaimer Opinion section, in the paragraph (b) above on reporting under Section 143(3)(b) and in paragraph below on reporting under Rule 11(g); h) With respect to the adequacy of internal financial control over financial reporting of the Company with reference to standalone financial statements and the operating effectiveness of such controls, refer to our separate report in Annexure-B.

i) With respect to the other matters included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us: i. The Company had the following litigations pending as at the end of the financial year which may impact its financial position on final disposal of the respective matters.

However, due to the effects/possible effects of the matter described in the Basis for Disclaimer of Opinion paragraph and non-availability of sufficient appropriate audit evidence regarding pending litigations, we are unable to state whether the Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements and whether such disclosures are complete, true and fair.

[Refer Note No. 31 to the standalone financial statements] ii. Except for the effects/possible effects of the matter described in the Basis for Disclaimer of Opinion section, the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. As at 31st March, 2025 there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company. iv. Management Representation: a. The Management of the Company has represented to us that to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries. b. The management of the Company has represented to us, that, to the best of its knowledge and belief no funds (which are material either individually or in the aggregate) have been received by the company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries. c. Based on audit procedures which we considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and

(ii) of Rule 11(e) Companies (Audit and Auditors) Rules, 2014 (as amended) and provided in clauses (a) and (b) above contain any material mis-statement. v. The company has not declared or paid any dividend during the year. vi. Based on our examination, which included test checks, the Company has used accounting software for maintaining its books of account for the financial year ended March 31, 2025 which has a feature of recording audit trail (edit log) facility. However, the company has not provided to us the details of audit trail records for the entire financial year ended on March 31, 2025. In absence of audit trial records, we are unable to express our opinion whether the audit trial feature of the said software was enabled and operated throughout the year for all relevant transactions in the software or whether there were any instances of the audit trial feature being tempered with. In absence of availability of complete audit trial records, we are unable to express our opinion as to whether the required audit trial has been preserved by the company as per the statutory requirement of record retention or not. vii. With respect to the matter to be included in the Auditors Report under Section 197(16) of the Act: In our opinion and according to the information and explanations given tous ,there muneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act read with Schedule V to the Companies Act, 2013. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act read with Schedule V to the Companies Act, 2013. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.

ANNEXURE-A TO THE INDEPENDENT AUDITORS REPORT

[Referred to in paragraph 1 under "Report On Other Legal And Regulatory Requirements" section of our report of even date to the members of ASTRON PAPER & BOARD MILL LIMITED on the Standalone financial statements of the company for the year ended 31st March, 2025:

In terms of the information and explanations sought by us and given to us by the management of the company and on the basis of such checks of the books and records of the company during the course of audit as made available for our verification and to the best of our knowledge and belief, we further report that: i. In respect of its Property, Plant & Equipment, Capital Work-in-Progress, Investment Properties and Intangible Assets: a) Maintenance of Records: A. According to the information and explanations given to us, the company has maintained proper records showing full particulars including quantitative details and situation of property, plant & equipment, capital work-in-progress and investment properties. B. According to the information and explanations given to us, the company has maintained proper records showing full particulars of intangible assets. b) As explained to us, the management in accordance with a phased programme of verification adopted by the company has physically verified the property, plant & equipment, capital work-in-progress and investment properties. However, the details of physical verification as carried out by the management during the year have not been made available for our verification and in absence of details of physical verification, we disclaim our opinion as to whether any material discrepancies were noticed by the management on such physical verification and if any such discrepancies were noticed how there were dealt with in the books of account. c) According to the information and explanations given to us and on the basis of the examination of the records of the company, the title deeds of immovable properties are held in the name of the Company as at the balance sheet date. d) According to the information and explanations and books of accounts examined by us, the Company has not revalued any of its property, plant & equipment and intangible assets during the year. Accordingly, reporting under paragraph 3 (i)(d) of the Order is not applicable to the Company. e) According to the information and explanations given to us no proceedings have been initiated during the year or are pending against the Company as at March 31, 2025 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder.

However, the details of pending litigations or any order passed by statutory authorities relating to holding of benami property under the Benami Transactions (Prohibition) Act,

1988 (as amended in 2016) and rules made thereunder, have not been made available for our verification and in absence of details of pending litigations or any order passed by statutory authorities, we disclaim our opinion as to whether any proceeding have been initiated during the year or are pending against the Company as at March 31, 2025 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder. ii. In respect of its Inventories: a) As explained to us, the inventories have been physically verified by the management of the company during the year at reasonable interval. However, we have not been provided reports of such physical verification. As explained to us, the coverage and procedure of such verification by the Management of the company is appropriate having regard to the size of the Company and the nature of its operations. According to the information and explanations given to us, no discrepancies of 10% or more in the aggregate for each class of inventories were noticed on such physical verification of inventories when compared with books of account.

However, in absence of details of physical verification, we disclaim our opinion as to whether any material discrepancies were noticed by the management on such physical verification or not and if any such discrepancies were noticed how there were dealt with in the books of account, whether discrepancies were more than 10% or not, whether materials as recorded in the books of account were physically available or not, whether any materials as physically available were recorded in the books of account or not and whether the coverage and procedure of such verification by the Management of the company was appropriate having regard to the size of the Company and the nature of its operations. [Refer to Para (x) of Basis Disclaimer of Opinion Section of our report] b) According to the information and explanations given to us, the company has been sanctioned working capital limits in excess of Rs. 5 Crores, in aggregate from banks on the basis of security of its current assets.

However, 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.

In absence of details and records of quarterly returns and statements if any submitted by the company to the banks, we disclaim our opinion as to whether such quarterly returns and statements were in agreement with books of account or not and whether the company has committed any frauds with regard to bank loans or not in this regard.

[Refer to Para (i) of Basis Disclaimer of Opinion Section of our report particularly bank loans accounts being declared as NPA and defaults committed by bank towards bank loans] iii. Investments/Guarantee/Security/Loans/Advances Granted:

a) According to information and explanations given to us and books of account and records examined by us, during the year the Company has granted unsecured loans to a subsidiary company re-payable on demand, the details of which are given below:

According to the information and explanations given to us, the company has not provided any guarantee or security to companies, firms, limited liability partnerships or other parties during the year. b) According to the information and explanations given to us, the company has not stipulated any specific terms or conditions as to the loans granted to the subsidiary company.

Because of the matters described in para (v) & (vi) of the Basis of Disclaimer of Opinion Section of our report, we disclaim our opinion as to whether the investments made and the terms and conditions of grant of loans given during the year as well as outstanding balances of loans given and investments made in earlier years, are prima facie, not prejudicial to the interest of the Company or not. [Refer To Note No. 6, 7 & 13 & 35(h) To Notes on Account]. c) According to the information and explanations given to us, the company has not stipulated any schedule for repayment of the loans. As informed to us, the repayment of loan and interest on the portion of loan on which it was charged is receivable as and when demands will be raised. According to the information and explanations given to us, no repayment of loan on net basis or of payment interest has been received by the company during the year. However, as informed to us, there is no default in repayment of loan and payment of interest by the party. However, because of the matters described in para (v) of the Basis of Disclaimer of Opinion Section of our report, we disclaim our opinion as to whether there was any default in repayment of loans by the subsidiary company during the financial year.

d) According to the information and explanations given to us, in respect of loans granted and advances in the nature of loans provided by the Company, there was no overdue amount remaining outstanding as at the balance sheet date.

However, because of the matters described in para (v) of the Basis of Disclaimer of Opinion Section of our report, we disclaim our opinion as to whether there was any overdue amount outstanding as at the balance sheet date. e) According to the information and explanations given to us, the company has not stipulated any schedule for repayment of the loans. However, as explained to us, no loan or advances in the nature of loan granted by the Company against which demand was made from the party, has been renewed or extended or fresh loans were granted to settle the amounts against which demands were made from the same party. f) According to the information and explanations given to us, the company has not stipulated any specific terms or conditions and stipulated any schedule for repayment of the loans as to the loans granted to the above party. The aggregate amount of such loans granted during the year to other parties was Rs. NIL and Rs. 1.18 crores to related parties (being 100.00% of loans or advances granted during the year to a subsidiary company) referred as defined in clause (76) of section 2 of the Companies Act, 2013. iv. According to the information and explanations given to us, the company has complied with the provisions of Sections 185 and 186 of The Companies Act, 2013 in respect of grant of any loans, investments, guarantees and securities, as applicable.

v. According to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of section 73,74,75 & 76 of the Act and Rules framed thereunder during the year and therefore, the provisions of clause 3(v) of the Order are not applicable to the Company. vi. We have broadly reviewed the cost records maintained by the Company pursuant to rules made by the Central Government under section 148 (1). However, in absence of availability of sufficient appropriate audit evidences as to prescribed accounts and records in this regard, we are unable to express our opinion as to whether the prescribed accounts and records have been maintained and made or not.

vii. In respect of Statutory Dues:

a) As per the information & explanations furnished to us and on the basis of examination of the records of the company, we have observed that there have been delays in depositing and non-payments of undisputed statutory dues of Goods and Service Tax, TDS & TCS, Employee Provident Fund, Employee ESIC Fund, Professional Tax and Other Material statutory dues with appropriate authorities. There have been outstanding undisputed statutory dues as at 31st March, 2025 for more than six months from the date they became payable, the details whereof have been given as under:

* The reported amounts are as per books of account only.

** In absence of available records of status of Goods and Service Tax (GST) liabilities as per the Goods and Service Tax laws, we are unable to report the amounts of outstanding balance of GST for more than six months from the date they became due for payment.

b) According to information and explanations given to us, on the basis of documentary evidences as made available for our verification and so far as appears from our examination of books of account, there were following outstanding statutory dues as at 31st March, 2025 which have not been deposited on account of any dispute.

viii. According to the information and explanations given to us and so far as appears from our examination of books of account and other records as applicable and produced before us by the Company, there were no transactions relating to previously unrecorded income that were surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961 (43 of 1961) during the year.

ix. In respect of Loans & Other Borrowings:

a) According to the information and explanations given to us and based on the examination of records as made available for our verification, the company has defaulted in repayment of loans and also in the payment of interest thereon on loans or borrowings taken by it from banks.

The Company has defaulted in repayment of following dues to the banks and payment of following interest to banks during the year, which were not paid on or before the Balance Sheet date. [Refer Note 17 & 19 to the Standalone Financial Statement]:

* Based on Loan Accounts as Declared NPA by Union Bank of India since December-2024.

b) According to the information and explanations given to us, we are of the opinion that the company has not been declared as willful defaulter by any bank upto the end of the current financial year or upto the date of this report. c) In our opinion and according to the information and explanations given to us, the company has not obtained any term loan during the year and hence clause ix(c) of The Companies (Auditors Report) Order, 2020 relating to application of term loans for the purpose of which they were obtained is not applicable to it.

As informed to us, the term loans as due to ICICI Bank and Union Bank of India as at the end of the current financial year were on account of conversion Letter of Credit/ Buyers Credit dues as became payable on account of devolvement into term loans. d) According to the information and explanations given to us, and the audit procedures performed by us, and on an overall examination of the standalone financial statements of the company for the year, we are of the opinion that funds raised on short-term basis amounting to Rs. 0.38 crores have been used during the year for long-term purposes by the company including short term loans and advances to subsidiary company classified as short term during the previous year which have now been classified as long term during the current financial year. e) According to the information and explanations given to us and on an overall examination of the financial statements of the company, we are of the opinion that the company has taken funds from entities or persons including banks net off effects of cash generated from operations and cash utilized in investing activities of an amount Rs. 1.18 crores during the year to meet the obligations of its wholly owned subsidiary company Balaram Papers Private Limited by way of grating loans and advances. According to the information and explanations given to us and on an overall examination of the standalone financial statements of the company, we report that the company has not taken any funds from any entity or person on account of or to meet obligations of associates or joint ventures, if any. f) According to the information and explanations given to us and audit procedures performed by us, we report that the company has not raised any loan during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies, if any and hence reporting under clause 3(ix)(f) of the Order is not applicable. x. In respect of moneys raised by issue of securities: a) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not raised any moneys by way of initial public offer or further public offer (including debt instruments) during the year and hence reporting under clause 3(x)(a) of the Order is not applicable. b) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully, partially or optionally convertible) during the year and hence reporting under clause 3(x)(b) of the Order is not applicable. xi. In respect of Frauds and Whistle Blower Complaints: c) According to the information and explanation given to us and based on our examination of the records of the company, except for the matters referred to in the Basis for Disclaimer of Opinion section in our audit report, in respect of which we have not been able to obtain sufficient appropriate audit evidence and hence we are unable to comment on potential implications thereof for the reasons described therein, no fraud by the Company or material fraud on the Company has been noticed or reported during the year. a) According to the information and explanations given to us, no report under sub-section (12) of Section 143 of the Companies Act, 2013 has been filed by the auditors in Form ADT- 4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government. b) According to the information and explanations given to us, the Company has not received any whistle-blower complaints from any party during the year. xii. As the company is not the Nidhi Company, clause (xii) of paragraph 3 of The Companies (Auditors Report) Order, 2020 is not applicable to it. xiii. According to the information and explanation given to us and based on our examination of the records of the company, because for the matters referred to in the Basis for Disclaimer of Opinion section in our audit report in respect of which we are unable to comment and in absence of availability of sufficient appropriate audit evidence with regard to the provision of section 177 and 188 of the Act, we disclaim our opinion as to whether transactions entered into by the Company with the related parties are in compliance with sections 177 and 188 of the Act, where applicable or not and the details of related party transactions as required by the applicable accounting standards have been disclosed in the standalone financial statements or not. xiv. In respect of Internal Audit: a) In our opinion the Company has an adequate internal audit system commensurate with the size and the nature of its business. b) We have considered the internal audit reports for the year under audit issued to the company in determining the nature, timing and extent of our audit procedure. xv. According to the information and explanations given to us, the Company has not entered into any non-cash transaction with directors or persons connected with them and hence clause (xv) of paragraph 3 of The Companies (Auditors Report) Order, 2020 is not applicable to it during the year. xvi. In respect of Registration Under Section 45-IA of the Reserve Bank of India Act, 1934/CIC: a) As the company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 (2 of 1934), clause (xvi)(a) of paragraph 3 of The Companies (Auditors Report) Order, 2020 is not applicable to it. b) According to the information and explanations given to us, the Company has not conducted any Non-Banking Financial or Housing Finance activities during the year and clause (xvi)(b) of paragraph 3 of The Companies (Auditors Report) Order, 2020 is not applicable to it. c) As the company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India, clause (xvi)(c) of paragraph 3 of The Companies (Auditors Report) Order, 2020 is not applicable to it. d) According to the information and explanations given to us, the company has no Core Investment Company (CIC) as part of its group, clause (xvi)(c) of paragraph 3 of The Companies (Auditors Report) Order, 2020 is not applicable to it. xvii. The Company has incurred cash losses of Rs. 44.92 Crores during the financial year covered by our audit (financial year 2024-25) as well as cash losses of Rs. 5.02 Crores in the immediately preceding financial year.

Unquantified/quantified impact of matters described in the Basis of Disclaimer of Opinion section in audit report has not been taken into consideration for the purpose of expressing an opinion in respect of this clause as we have not been able to obtain sufficient appropriate audit evidence in this regard. xviii. There has been no resignation of the statutory auditors of the Company during the year and hence reporting under clause (xviii) of paragraph 3 of The Companies (Auditors Report) Order, 2020 is not applicable. xix. According to the information and explanations given to us and subject to effects/possible effects of basis of Disclaimer of Opinion of this report and applicable remarks in our report as required to be issued as per the Companies (Auditors Report) Order, 2020 for the current financial year and on the basis of the financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, financial position of the company as at the year end, other information accompanying the standalone financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions and material uncertainty as to the going concern status of the company causes us to believe that material uncertainty exists as on the date of the audit report that the Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. xx. In respect of CSR Activities: Based on the examination of records of the Company and information and explanations given to us, due to losses incurred, the conditions and requirements of section 135 of the Act is not applicable to the Company hence, clause xx(a) and xx(b) of paragraph 3 of the Order is not applicable for the current financial year. xxi. According to the information and explanations given to us, and based on the reports issued by the auditors of a subsidiary company "Balaram Papers Private Limited", included in the consolidated financial statements of the company, to which reporting on the matters specified in paragraph 3 and 4 of the Order is applicable, provided to us by the management of the Company and based on the consideration of such audit report, we report that the auditor of the company has issued Disclaimer of Opinion on account of the reasons stated in "Basis of Disclaimer of Opinion" section of the report. The auditors of the subsidiary company "Balaram Papers Private Limited" have disclaimed their opinion on the financial statement of the subsidiary company and contains following qualifications/ disclaimer of opinion as reported as per para 3 and 4 of the Companies (Auditors Report) Order, 2020 (CARO): a) Clause 3(i)(b) regarding physical verification of PPE: As explained to us, the management in accordance with a phased programme of verification adopted by the company has physically verified the property, plant & equipment, capital work-in-progress and investment properties. However, the details of physical verification as carried out by the management during the year have not been made available for our verification and in absence of details of physical verification, we disclaim our opinion as to whether any material discrepancies were noticed by the management on such physical verification and if any such discrepancies were noticed how there were dealt with in the books of account. b) Clause 3(i)(e) regarding holding of benami property under the Benami Transactions (Prohibition) Act, 1988: According to the information and explanations given to us no proceedings have been initiated during the year or are pending against the Company as at March 31, 2025 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder.

However, the details of pending litigations or any order passed by statutory authorities relating to holding of benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder, have not been made available for our verification and in absence of details of pending litigations or any order passed by statutory authorities, we disclaim our opinion as to whether any proceeding have been initiated during the year or are pending against the Company as at March 31, 2025 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder. c) Clause 3(ii)(a) regarding physical verification of inventories As explained to us, the inventories have been physically verified by the management of the company during the year at reasonable interval. However, we have not been provided reports of such physical verification. As explained to us, the coverage and procedure of such verification by the Management of the company is appropriate having regard to the size of the Company and the nature of its operations. According to the information and explanations given to us, no discrepancies of 10% or more in the aggregate for each class of inventories were noticed on such physical verification of inventories when compared with books of account.

However, in absence of details of physical verification, we disclaim our opinion as to whether any material discrepancies were noticed by the management on such physical verification or not and if any such discrepancies were noticed how there were dealt with in the books of account, whether discrepancies were more than 10% or not, whether materials as recorded in the books of account were physically available or not, whether any materials as physically available were recorded in the books of account or not and whether the coverage and procedure of such verification by the Management of the company was appropriate having regard to the size of the Company and the nature of its operations.

In Para (vi) of Basis Disclaimer of Opinion Section of audit report it has been reported that: Though the plant of the company has been non-operational for more than two years, the company has continued to carry its inventories of raw materials, finished goods, Coal and Fuel, Packing Materials and stores items at their respective of cost of acquisition. In our opinion, the quality of inventories may have 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 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 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 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 sufficient 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 financial statements. d) Clause 3(vii)(a) regarding delay in payment of statutory dues: As per the information & explanations furnished to us and on the basis of examination of the records of the company, we have observed that there have been delays in depositing undisputed statutory dues of Goods and Service Tax, Employee Provident Fund, Professional Tax, TDS and TCS with appropriate authorities.

There have been outstanding undisputed statutory dues as at 31st March, 2025 for more than six months from the date they became payable, the details whereof have been given as under:

*The reported amounts are as per books of account only.

** In absence of available records of status of Goods and Service Tax (GST) liabilities as per the Goods and Service Tax laws, we are unable to report the amounts of outstanding balance of GST for more than six months from the date they became due for payment.

e) Clause 3(vii)(b) regarding disputed statutory dues According to information and explanations given to us, on the basis of documentary evidences as made available for our verification and so far as appears from our examination of books of account, there were following outstanding statutory dues as at 31st March, 2025 which have not been deposited on account of any dispute.

f) Clause 3(xiii) regarding compliance of provisions of section 177 and 188

According to the information and explanation given to us and based on our examination of the records of the company, because for the matters referred to in the Basis for Disclaimer of Opinion section in our audit report in respect of which we are unable to comment and in absence of availability of sufficient appropriate audit evidence with regard to the provision of section 177 and 188 of the Act, we disclaim our opinion as to whether transactions entered into by the Company with the related parties are in compliance with sections 177 and 188 of the Act, where applicable or not and the details of related party transactions as required by the applicable accounting standards have been disclosed in the financial statements or not. g) Clause 3(xvii) regarding cash losses incurred The Company has incurred cash losses of Rs. 0.52 Crores during the financial year covered by our audit (financial year 2024-25) as well as cash losses of Rs. 2.47 Crores in the immediately preceding financial year.

Unquantified/quantified impact of matters described in the Basis of Disclaimer of Opinion section in audit report has not been taken into consideration for the purpose of expressing an opinion in respect of this clause as we have not been able to obtain sufficient appropriate audit evidence in this regard. h) Clause 3(xix) regarding material uncertainty of meeting liabilities According to the information and explanations given to us and subject to effects/possible effects of basis of Disclaimer of Opinion of this report and applicable remarks in our report as required to be issued as per the Companies (Auditors Report) Order, 2020 for the current financial year and on the basis of the financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, financial position of the company as at the year end, other information accompanying the financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions and material uncertainty as to the going concern status of the company causes us to believe that material uncertainty exists as on the date of the audit report that the Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date.

ANNEXURE "B" TO THE INDEPENDENT AUDITORS REPORT

[REFERRED TO IN PARAGRAPH 2(h) UNDER "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS SECTION OF OUR REPORT OF EVEN DATE] FINANCIAL YEAR ENDED 31ST MARCH 2025

REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT, 2013 ("THE ACT")

We were engaged to audit the internal financial controls with reference to the Standalone Financial Statements over financial reporting of ASTRON PAPER & BOARD MILL LIMITED ("the Company") as of March 31, 2025 in conjunction with our audit of the Standalone Ind AS financial statements of the company for the year ended on that date.

MANAGEMENTS RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Board of Directors of the company and management of the company are responsible for establishing and maintaining internal financial controls with reference to standalone financial statements based on the internal control over financial reporting criteria established by the company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.

These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and e_icient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

AUDITORS RESPONSIBILITY

Our responsibility is to express an opinion on the companys internal financial controls with reference to standalone financial statements over financial reporting based on our audit conducted in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India.

Because of the matter described in the Disclaimer of Opinion section below, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on internal financial controls with reference to the standalone financial statements of the Company.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A companys internal financial control over financial reporting with reference to standalone financial statement is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the standalone financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

DISCLAIMER OF OPINION

We refer to Basis for Disclaimer of Opinion Section of our audit report issued for the financial year ended March 31, 2025 under section 143(2), we have not been able to obtain sufficient appropriate audit evidence regarding reported amounts and disclosures in the standalone financial statements to provide a basis for our opinion as to whether the company had adequate internal financial controls with reference to standalone financial statements and whether such internal financial controls were operating effectively as at March 31, 2025 and accordingly we disclaim our opinion on internal financial controls with reference to the Standalone Financial Statements over financial reporting of the company for the financial year ended March 31, 2025.

We have considered the disclaimer reported above in determining the nature, timing, and extent of audit tests applied in our audit of the standalone financial statements of the Company, and the disclaimer has affected our opinion on the standalone financial statements of the Company and we have issued a Disclaimer of Opinion on the standalone financial statements of the Company.