We have audited the accompanying financial statements of
Andhra Paper Limited (“the Company”), which comprise the
Balance Sheet as at March 31, 2026 and the Statement of
Profit and Loss (including Other Comprehensive Income),
the Statement of Changes in Equity and the Statement
of Cash Flows for the year then ended, and notes to the
financial statements, including material accounting policy
information and other explanatory information (hereinafter
referred to as the “financial statements”).

In our opinion and to the best of our information and
according to the explanations given to us, the aforesaid
financial statements give the information required by the
Companies Act, 2013 (“the Act”) in the manner so required
and give a true and fair view in conformity with the Indian
Accounting Standards prescribed under section 133 of the
Act, read with Companies (Indian Accounting Standards)
Rules, 2015, as amended (“Ind AS”) and other accounting
principles generally accepted in India, of the state of affairs of
the Company as at March 31,2026, and its profit (including
other comprehensive income), changes in equity and its
cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in
accordance with the Standards on Auditing (SAs) specified
under section 143(10) of the Act. Our responsibilities
under those SAs are further described in the Auditor's
Responsibilities for the Audit of the Financial Statements
section of our report. We are independent of the Company
in accordance with the Code of Ethics issued by the
Institute of Chartered Accountants of India together with
the ethical requirements that are relevant to our audit of
the financial statements under the provisions of the Act and
the Rules thereunder and we have fulfilled our other ethical
responsibilities in accordance with these requirements and
the Code of Ethics. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis
for our opinion.

Key Audit Matter

Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the

financial statements of the current period. These matters
were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
We have determined the matter described below to be the
key audit matter to be communicated in our report.

Recognition, Measurement and Presentation of
provisions and contingent liabilities [Refer Note 2C (e),
21, 22 and 32A in the financial statements for the related
disclosures]:

The Company has ongoing litigations with various regulatory
authorities and third parties. Where an outflow of funds
is believed to be probable and a reliable estimate of the
outcome of the dispute can be made based on management's
assessment of specific circumstances of each dispute and
relevant external advice, management provides for its
reliable estimate of the liability. Such accruals are by nature
complex and can take number of years to resolve and can
involve estimation uncertainty.

Given the complexity and magnitude of potential exposures
to the Company, the assessment of the existence of legal or
constructive obligation and analysis of the probability of the
related outflow of resources involves significant judgement
by the management.

How the Key Audit Matter was addressed in our audit: Our
audit procedures in respect of this area included:

• Obtained a detailed understanding of the managements
process for determining statutory liabilities, provisions
and contingent liabilities pertaining to claims or disputes.

• Verified the design and operating effectiveness of the
Company's key controls over the estimation, monitoring
and disclosure of provisions and contingent liabilities.

• Made corroborative inquiries with appropriate level of
the management personnel including status update,
expectation of outcomes with the basis, and the future
course of action contemplated by the Company.

• Obtained the understanding of the matters involved by
reading the correspondences, communications, minutes
of the Audit Committee and/or the Board meetings and
discussions with the appropriate Management personnel.

• Obtained direct confirmation letters from external legal
experts and reviewed them to assess the likelihood of
outcome, for the purposes of provisioning.

• Evaluated the evidence supporting the judgement of
the management about possible outcomes and the
reasonableness of the assumptions and estimates, used
in measuring the probable or possible impact.

• Evaluated appropriateness and adequacy of the
disclosures of the contingent liability made in the
financial statements in accordance with the requirements
of Ind AS 37 - 'Provisions, Contingent Liabilities and
Contingent Asset'.

Information Other than the Financial Statements
and Auditor’s Report Thereon

The Company's Board of Directors is responsible for the
other information. The other information comprises Director's
report, Management report, Chairman's statement,
Business Responsibility and Sustainability Reporting etc.
(hereinafter referred to as the “other information”) but does
not include the financial statements and our auditor's report
thereon. The other information is expected to be made
available to us after the date of this auditor's report.

Our opinion on the financial statements does not cover the
other information and we do not and will not express any
form of assurance conclusion thereon.

In connection with our audit of the financial statements,
our responsibility is to read the other information identified
above when it becomes available and, in doing so, consider
whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated.

When we read the other information, if we conclude that
there is a material misstatement therein, we are required to
communicate the matter to those charged with governance
under SA 720 'The Auditors Responsibilities Relating to
Other Information'.

Responsibilities of Management and Board of
Directors for the Financial Statements

The Company's Management and Board of Directors are
responsible for the matters stated in section 134(5) of
the Act, with respect to the preparation of these financial
statements that give a true and fair view of the financial
position, financial performance, changes in equity and cash
flows of the Company in accordance with the accounting
principles generally accepted in India, including the Indian
Accounting Standards specified under section 133 of the Act.
This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the
Act, for safeguarding of the assets of the Company and for

preventing and detecting 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 controls, that were operating
effectively for ensuring the accuracy and completeness
of the accounting records, relevant to the preparation and
presentation of the financial statement that give a true and
fair view and are free from material misstatement, whether
due to fraud or error.

In preparing the financial statements, the Board of
Directors of the Company are responsible for assessing the
Company's ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using
the going concern basis of accounting unless the Board of
Directors 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 Company's financial reporting process.

Auditor’s Responsibilities for the Audit of the
Financial Statements

Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but
is not a guarantee that an audit conducted in accordance
with SAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial
statements.

We give in “Annexure A” a detailed description of Auditor's
responsibilities for Audit of the Financial Statements.

Report on Other Legal and Regulatory
Requirements

1. As required by the Companies (Auditor's Report) Order,
2020 (“the Order”), issued by the Central Government
of India in terms of sub-section (11) of section 143 of
the Act, we give in “Annexure B” a statement on the
matters specified in paragraphs 3 and 4 of the Order,
to the extent applicable.

2. As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information
and explanations which to the best of our
knowledge and belief were necessary for the
purposes of our audit of the aforesaid financial
statements.

(b) In our opinion, proper books of account as required
by law relating to preparation of the aforesaid financial
statements have been kept by the Company so far as
it appears from our examination of those books, except
for the matters stated in the paragraph 2(h)(vi) below
on reporting under Rule 11(g).

(c) The Balance Sheet, the Statement of Profit and
Loss (including other comprehensive income), the
Statement of Changes in Equity and the Statement of
Cash Flows dealt with by this Report are in agreement
with the books of account, maintained for the purpose
of preparation of the financial statements.

(d) In our opinion, the aforesaid financial statements
comply with the Ind AS specified under Section 133
of the Act.

(e) On the basis of the written representations received
from the directors as on March 31, 2026, taken on
record by the Board of Directors, none of the directors
are disqualified as on March 31, 2026, from being
appointed as a director in terms of Section 164 (2)
of the Act.

(f) With respect to the adequacy of the internal financial
controls with reference to financial statements of the
Company and the operating effectiveness of such
controls, refer to our separate Report in “Annexure C”.

(g) The reservation relating to the maintenance of accounts
and other matters connected therewith are as stated
in paragraph 2(b) above on reporting under Section
143(3)(b) and paragraph 2(h)(vi) below on reporting
under Rule 11(g).

(h) With respect to the other matters to be included in the
Auditor's Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, in our
opinion and to the best of our information and according
to the explanations given to us:

i. The Company has disclosed the impact of pending
litigations on its financial position in its financial
statements - Refer Note 32 to the financial
statements.

ii. The Company did not have any long-term
contracts including derivative contracts for which
there were any material foreseeable losses.

iii. There are no amounts which are required to
be transferred to the Investor Education and
Protection Fund by the Company during the year
ended March 31,2026.

iv. a) The Management has represented that,

to the best of its knowledge and belief, as
disclosed in the note 48 to the financial
statements, no funds 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 has represented that, to the
best of its knowledge and belief, as disclosed
in the note 48 to the financial statements, no
funds 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,
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 the audit procedures performed
that have been 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) as
provided under a) and b) above, contain any
material mis-statement.

(v) The final dividend paid by the Company during
the year in respect of the same declared for the
previous year is in accordance with section 123
of the Act, to the extent it applies to payment
of dividend.

The Board of Directors of the Company have
proposed final dividend for the year which is
subject to the approval of the members at the
ensuing Annual General Meeting. The dividend
declared is in accordance with section 123 of
the Act, to the extent it applies to declaration
of dividend. (Refer Note 15 to the financial
statements).

(vi) Based on our examination which included test
checks, the Company has used an accounting
software for maintaining its books of account
which has a feature of recording audit trail (edit
log) facility, except that audit trail feature was
enabled at the database level from January 21,
2026, to log any direct data changes.

Further, where enabled, audit trail feature has
operated for all relevant transactions recorded in
the accounting software. Also, during the course
of our audit, we did not come across any instance
of audit trail feature being tampered with in respect
of such accounting software. Additionally, the
audit trail of prior year has been preserved by the
Company as per the statutory requirements for
record retention to the extent it was enabled and
recorded in respective years.

3. In our opinion, according to information, explanations
given to us, the remuneration paid or provided by
the Company to its directors is within the limits laid
prescribed under Section 197 read with Schedule V
of the Act.

For M S K A & Associates LLP
(Formerly known as M S K A & Associates)

Chartered Accountants
ICAI Firm Registration No. 105047W/W101187

Prakash Chandra Bhutada

Partner

Place: Hyderabad Membership No.: 404621

Date: May 14, 2026 UDIN: 26404621DCMMDG6317