We have audited the accompanying financial statements of Union quality Plastics Limited (hereinafter
referred to as “the Company”), which comprise the Balance Sheet as at March 31, 2024, the Statement of
Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Cash
flow statement for the year then ended, including a summary of significant accounting policies and other
explanatory information (hereinafter referred to as “Financial Statements”).
In our opinion and to the best of our information and according to the explanations given to us, except for the
possible effects of the matters described in the Basis for Qualified Opinion paragraph 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 the 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, 2024, and its loss, other comprehensive loss, changes in equity and its cash flows for the year ended on
that date.
Basis for Qualified Opinion
1. Rs. 3,80,64,865/- is the amount of Sundry Debtors outstanding for period exceeding two years out of
which provision of Rs. 2,19,26,185/- had been made in earlier years as expected credit loss. No
provision has been made during the current quarter or previous year. In our opinion the company
should provide for additional Expected Credit Loss (ECL) in respect of non moving debtors. In the
absence of confirmation and owing to long outstanding, we are unable to comment on the
recoverability of the receivables
2. Rs. 1,58,06,255/- is the amount of Closing Stock and not moving more than one year and the net Net
Realisable Value (NRV) of the inventories are not determined by the company. In the absence of
determination of NRV and also due to slow moving nature, we are unable to comment on
appropriateness of the inventory.
3. Rs. 4,28,84,220/- is the amount of Sundry Creditors outstanding for period exceeding two years. No
Confirmation has been received from the Creditors. In the absence of such Confirmations from the
Creditors we are not in a position to determine its impact on the Financial Statements.
4. Company has accumulated losses and its networth has been fully eroded, the Company has incurred a
net loss/net cash loss during the current quarter and previous years and, the Company’s current
liabilities exceeded its current assets as at the review date. These conditions indicate the existence of a
material uncertainty that may cast significant doubt about the Company’s ability to continue as a going
concern.
Based on the aforesaid points and owing to their materiality, we are unable to determine any adjustment that
may be required in the financial statements of the company. Accordingly, we express a Qualified Opinion on
the financial results and other financial information of the Company.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10)
of the Act. Our responsibilities under those Standards 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 there under, 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.
Information Other than the Financial Statements and Auditor’s Report Thereon
The Company’s Management and Board of Directors is responsible for the other information. The other
information comprises the information included in the Management Discussion and Analysis, Board’s Report
including Annexures to Board’s Report, Business Responsibility Report, Corporate Governance Report, and
Shareholder Information, but does not include the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do 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 during the course of our audit
or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
Management’s Responsibility for the Financial Statements
The Company’s Management and Board of Directors is responsible for the matters stated in section 134(5) of
the Act, with respect to the preparation and presentation of these 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) prescribed
under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as
amended, and other accounting principles generally accepted in India
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 statements 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 is 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 are also responsible for
overseeing the Company’s financial reporting process.
Auditor’s Responsibility 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.
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal financial controls relevant to the audit in order to design audit
procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also
responsible for expressing our opinion on whether the Company has adequate internal financial
controls system in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Company to cease to continue as
a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that
we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication
Report on Other Legal and Regulatory Requirements
1. As required by Section 143 (3) of the Act, based on our audit we report that;
a) We have sought and obtained all the information and explanations except for the matters
discussed in Basis of Qualified Opinion paragraph, which to the best of our knowledge and belief
were necessary for the purposes of our audit;
b) Except for the possible effects of the matters discussed in Basis of Qualified Opinion paragraph
and except for the matters stated in the paragraph 143(3)(h)(vi) below on reporting under Rule
11(g), in our opinion, 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 Balance Sheet, the Statement of Profit and Loss (including other comprehensive loss),
Statement of changes in equity and the Statement of Cash Flow dealt with by this Report are in
agreement with the books of account
d) Except for the possible effects of the matters discussed in Basis of Qualified Opinion paragraph in
our opinion, the aforesaid financial statements comply with the Indian Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,
2014.
e) On the basis of the written representations received from the directors as on 31st March, 2024
taken on record by the Board of Directors, none of the directors is disqualified as on 31st March,
2024 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 over financial reporting of the
Company and the operating effectiveness of such controls, refer to our separate Report in
“Annexure - A”.
g) With respect to the matter to be included in the Auditor’s Report under Section 197(16) of the
Act: In our opinion and according to the information and explanations given to us, no
remuneration paid by the Company to its directors during the current year.
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, as amended, 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
ii. The Company did not have any long-term contracts including derivative contracts for which
there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the Investor Education and
Protection Fund by the Company.
iv.
i. The management has represented that, to the best of its knowledge and belief, 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
persons or entities, 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 (“Ultimate Beneficiaries”) by or on behalf of the Company
or
• Provide any guarantee, security or the like to or on behalf of the Ultimate
Beneficiaries.
ii. The management has represented, that, to the best of its knowledge and belief, no funds
have been received by the Company from any persons or entities, 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 (“Ultimate Beneficiaries”) by or on behalf of the Funding
Party or
• Provide any guarantee, security or the like form or on behalf of the Ultimate
Beneficiaries; and
iii. Based on such audit procedures as 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 (d) (i) and (d)(ii) contain any material mis-statement.
v. According to the information and explanations given to us, the Company has not declared or
paid any Dividend during the year
vi. Based on our examination, which included test checks, the company has not used accounting
software for maintaining its books of account which has a feature of recording audit trail (edit
log) facility for the financial year ended March 31, 2024.
2. As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”) issued by the Central
Government of India in terms of Section 143(11) 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.
For Sagar & Associates
Chartered Accountants
FRN: 003510S
(B Srinivasa Rao)
Partner
M.No.202352
UDIN: 24202352BKBEOZ8375
Place: Hyderabad
Date:30-05-2024
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