Uniply Decor Ltd Directors Report.

TO THE MEMBERS OF UNIPLY DECOR LIMITED

Report on the Audit of the Financial Statements

Qualified Opinion

We have audited ), which comprisethe accompanying financial statements of Uniply Dcor Limited (‘the Company/UIL the Balance Sheet as at March 31, 2020, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, except for the effects/possible effects of the matters described in the Basis for Qualified Opinion section Companies Act, 2013 (‘Act) in the manner so required and give a true and fair view in of our report, the aforesaid financial statements give the information required by the conformity Standards (‘Ind AS) specified under section 133 of the Act, of the state of affairs of with the accounting principles generally accepted in India including Indian Accounting the Company as at March 31, 2020, and its loss (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Basis for Qualified Opinion

(a) The company has GST Input Tax Credit (ITC) of Rs. 4,39,35,753 /- across various locations. However, in the absence of active GST registration across all the locations, we are unable to comment on the appropriateness of availing the same. This may cause the amount of loss to be understated by and other equity to be overstated by Rs. 4,39,35,753 /-.

(b) Due to delayed receivables followed by impact of COVID 19 and consequent shut-down, the company faced severe liquidity crunch and certain portion of statutory dues, primarily Income Tax TDS and self-assessment tax, have not been paid in accordance and within prescribed timeline. Pending deposition of statutory dues, statutory returns could also not been filed within prescribed time. Since, provision of interest, late fees and penalty has not being made, we are not able to comment on consequent impact thereof on profit and loss account and balance sheet.

(c) TDS Receivable under Other Current Assets amounting to Rs. 2.30 Crore is subject to reconciliation.

(d) The company is not in possession of relevant sales invoices issued during financial year 2019-20, as these have been seized by GST Authorities in the course of a search during November 2019.

(e) The Company has neither obtained confirmation letters for material outstanding amount from the Sundry Debtors other than related parties outstanding for more than six months nor made any provision for expected credit losses on the same. The recovery of said receivables of the company is doubtful.

(f) The balances in the Trade payables accounts are subject to confirmation and reconciliation. We have not been provided confirmation letters for the same.

(g) There has been a GST search and survey operation carried out on companys premises in November 2019. No demand order or show cause notice has been provided to us and therefore, we are unable to comment upon any matters relating to GST search and survey operation.

(h) We draw attention that during our audit process, certain documentation and information relevant for the purpose of audit could not be provided to us in view of unprecedented Covid 19 situation and consequently, could not be audited by us.

Emphasis of Matters

Without qualifying our opinion we draw attention to the following notes to Ind AS financial statements:

(a) We draw attention to the Note 38 in the financial Statements. The company has incurred net loss of Rs. 4,28,98,386/- during the year ended 31st March, 2020. Factory of the company at

Gandhidham, strengthGujarat is not in operation for last 3 months of Financial Year 2019-20. Employees of has reduced substantially. These factors raise substantialforeseeable future. However, the companys financial statement doubt about the companys ability to continue as a going concern in the s have been prepared on going concern basis considering the stand taken by management in said note.

(b) We draw attention to the Note 39 in the financial Statements, Other Non-Current Assets include Capital Advances Rs. 42.85 Crore that has been paid to M/s Euro Dcor Pvt Ltd for the purchase of the Gujarat Factory. The said amount is current amount is sitting as an advance on the books of the company due to a delay in government paperwork relating to the transfer of the property as per Banking Norms. Since the property was needed to be provided as collateral to Yes Bank Limited for the working capital facility of the company, management decided that it was more efficient to withhold the registration until the historical government documentation is provided by the sellers. The company has received and is in possession of all original property related title documents.

(c) We draw attention to Note 40 of the financial statements, regarding provision of interest as mandated by law, on dues of Micro, Small & Medium Enterprises under MSMED Act.. In the absence of supporting information, we are unable to form an opinion as to the correctness and completeness of the information.

(d) We draw attention to Note 41 of the financial statements, all bank accounts balances have been taken as per books and but have not been confirmed by respective banks.

(e) We draw attention to Note 43 of the financial statements, regarding the managements evaluation of COVID-19 impact on the future performance of the Company and its subsidiaries. Our opinion is not modified in respect of this matter.

Key Audit Matters

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. Apart from the matter described in the Basis for Qualified Opinion section, we have determined no other key audit matters to communicate in our report.

Informationother thanthe FinancialStatementsand AuditorsReportthereon

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, statementsReport on Corporate Governance, Directors Report etc., but does not include theand our auditors report thereon. These reports are expected to befinancial made available to us after the date of this auditors report.

Our opinion on the financial statements does not cover the other information and we 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 these reports, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Directors. The Companys Board of Directors is responsible for the matters stated in section The accompanying financial statements have been approved by the Companys Board of

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 including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Ind AS 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 statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. In Companys ability to continue as a going concern, disclosing, as applicable, matters related to preparing the financial statements, management responsible for assessing the 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 Thoseso. Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as whole are free from material misstatement, whether due to fraud or error, and to issue an auditors 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 Standards on Auditing 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.

As part of an audit in accordance with Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

? 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 control 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 with reference to financial statements 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 managements use of the going concern basis of accounting and, based the audit evidence obtained, whether a uncertainty exists, we are required to draw attention in our auditors report to the the Companys ability to continue as a going concern. If we conclude that a material related to events or conditions that may cast significant doubt on related disclosures in the financial statements or, if such disclosures are inadequate, to the date of our auditors report. However, future events or conditions may cause modify our opinion. Our conclusions are based on the audit evidence obtained up 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 period and are therefore the key audit matters. We describe these matters in our auditors matters that were of most significance in the audit of the financial statements of the current 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.

Other Matter

The standalone financial statements of the Company for the year ended March 31, 2019 were audited by the predecessor auditor who expressed an unmodified Opinion on those standalone financial statements on May 30, 2019. Our report on the standalone financial statements is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by section 197(16) of the Act, based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.

2. As required by the Companies (Auditors Report) Order, 2016 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in the "Annexure I" statement on the matters specified in paragraphs 3 and 4 of the order, to the extent applicable.

3. Further to our comments in Annexure I, as required by section 143(3) of the Act, based on our audit, we report, to the extent applicable, that:

(a) We have sought and except for the matters described in the Basis for Qualified Opinion section, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit of the accompanying financial statements;

(b) Except for the effects/possible effects of the matters described in the Basis for Qualified Opinion section, 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 financial statements dealt with by this report are in agreement with the books of account.

(d) Except for the effects/possible effects of the matters described in the Basis for Qualified Opinion section, in our opinion, the aforesaid financial statements comply with Ind AS specified under section 133 of the Act.

(e) The matters described in the Basis for Qualified Opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the company.

(f) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2020 from being appointed as a director in terms of section 164(2) of the Act.

(g) The qualifications relating to maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above.

(h) with respect to the adequacy of the internal financial controls with respect to financial statements of the company and the operating effectiveness of such controls, refer to our separate report in "Annexure II" and

(i) With respect to the other matters to be included in the Auditors 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 no pending litigation Refer Note 44 of financial statements.

ii. The company does not have any long-term contracts including derivative contracts, having any material foreseeable losses, for which provision was required.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the company.

For N.D. Kapur & Co
Chartered Accountants
FRN: 001196N
CA Mohit Kumar
Partner
M. No: 547715
UDIN: 21547715AAAABI1067
Place: New Delhi
Dated: 17th February 2021

Annexure I to the Independent Auditors Report of even date to the members of Uniply

Decor Limited, on the financial statements for the year ended March 31, 2020.

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:

(i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

(b) All the assets have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable, having regard to size of the company and nature of its business. No material discrepancies were noticed on such verification.

(c) According to the information and explanations received by us, the company owns a land and building and the title deeds of immovable properties have been held in the name of the company.

(ii) In our opinion, the management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies between physical inventory and book records were noticed on physical verification.

(iii) According to the information and explanations given to us, the Company has granted unsecured loans of Rs. 1,19,00,00,000/- to related company, M/s Uniply Industries Limited and have complied with the provisions of Section 189 of the Companies Act, 2013 with regard to maintenance of a register under the said section.

a. The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudicial to the Companys interest. b. The schedule of repayment of principal and payment of interest has been stipulated and repayments or receipts of principal amounts and interest have been regular as per stipulations. c. There is no overdue amount remaining outstanding as at the yearend..

(iv)In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Act in respect of grant of loans, making investments and providing guarantees and securities.

(v) The Company has not accepted deposits during the year and does not have any unclaimed deposits as at March 31, 2020 and therefore, the provisions of Sections 73 to 76 or any other provision of the Companies Act, 2013 are not applicable to the Company.

(vi) According to the information and explanations given to us, the company is not engaged in production of any such goods or provision of any such services for which the Central Government has prescribed particulars relating to utilization of material and Labour or other items of cost. Hence, the provisions of Section 148(1) of the Companies Act 2013, do not apply to the Company. Hence, in our opinion, no comment on maintenance of Cost records under section 148(1) of the Act is required.

(vii) According to the information and explanations given to us and on the basis of our examination of the records of the Company: (a) the company providenthas not fund,beenemployeesregular in statedepositing insurance,undisputed incomestatutory dues including -tax, sales-tax, service tax, goods and services tax, duty of customs, duty of excise, value added tax, cess and other statutory dues, wherever applicable, with the appropriate authorities. According to the information and explanations given to us, there were approx. Rs. 13,33,87,221/-payable in respect of aforesaid dues which are in arrears, as at 31st March 2020 for a period of more than 6 months from the date they became payable.

S. No. Nature of statutory dues Period to which they relate Amount (Rs.)*
1 TDS Payable As on 31.03.2020 5,33,36,445/-
2 CST Payable On or before 31.03.2019 1,51,061/-
3 Goods and Service Tax Payable (Net)* As on 31.03.2020 5,41,52,141/-
4 Provident Fund Payable On or before 31.03.2019 88,77,652/-
5 Provident Fund Payable For F.Y. 2019-20 42,29,197/-
6 Professional Tax Payable On or before 31.03.2019 1,98,200/-
7 Professional Tax Payable For F.Y. 2019-20 1,38,014/-
8 Income Tax On or before 31.03.2019 1,23,04,511/-
Total 13,33,87,221/-

* In absence of records of GST Search being made available to us, and disallowable ITC due to cancellation of GST registrations and non-filing of GST returns of various months, the above figures are taken from books of accounts.

(b) According to Information & Explanation given to us there are no dues of Income Tax, Sales Tax, Service Tax, Goods and Service Tax, Excise Duty and Value Added Tax which have not been deposited as at March 31, 2020 on account of dispute.

(viii) According to the records of the company, the Company has defaulted in repayment of loans or borrowings to any financial institution or a bank or government or any dues to debenture-holders during the year. Details of loans outstanding to banks or financial institutions as at 31st March 2020 are given as follows:

Name of the Institution Principal Status
Outstanding (Rs.)
Yes Bank Capex Loan 35,34,850.59 October 2019-March 2020

(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under Clause 3 (ix) of the Order is not applicable to the Company.

(x) Based upon the Audit procedure performed and according to information and explanation given to us, no fraud by the Company or on the company by its officers or employees has been noticed or reported during the period covered by our audit.

(xi) As per the information and explanations provided to us, the company has paid/provided managerial remuneration with the requisite approval as mandated by the provision under Section 197 read with Schedule V to the Act.

(xii) In our opinion, and to the best of our information and explanations provided by the management, we are of the opinion that the company is not a Nidhi Company. Hence, clause 3 (xii) of the Order do not apply to the company.

(xiii) According to the information and explanations given to us and based on our examination of the records of the company, transactions with the related parties are in compliance with sections 177 and 188 of the Act wherever applicable and the details of such transactions have been disclosed in the financial statements as required by the applicable Indian Accounting Standards.

(xiv) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment/private placement of shares or fully or partly convertible debentures during financial year 2019-20.

(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected to its directors and hence provisions of Section 192 of the Companies Act, 2013 are not applicable to the Company.

(xvi) This clause of the CARO 2016 is not applicable to the company as the company is not a required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For N.D. Kapur & Co
Chartered Accountants
FRN: 001196N
CA Mohit Kumar
Partner
M. No: 547715
UDIN: 21547715AAAABI1067
Place: New Delhi
Dated: 17th February 2021

‘Annexure B to the Independent Auditors Report

Report on the Internal Financial Controls with reference to financial statements under Clause (i) of Subsection 3 of Section 143of the Companies Act,

2013 ("the Act")

(‘the Company) as at and for the year ended March 31, 2020, we were engaged to In conjunction with our audit of the financial statements of Uniply Dcor Limited audit the internal financial controls with reference to financial statements of the Company as at that date.

Managements ResponsibilityforInternalFinancial Controls

The Companys Board of Directors is responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential

Institute of Chartered Accountants of India (the ‘ICAI). These responsibilities include Financialcomponents Controlsof internal over control Financialstated Reporting (‘theGuidance GuidanceNote Note)Audit issuedof Internal by the the design, implementation and maintenance of adequate internal financial controls that Companys business, including adherence to the Companys policies, the safeguarding were operating effectively for ensuring orderly and efficient conduct of the 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 Act.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Note on Audit of Internal Financial Controls Over

Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements were established and maintained and if such controls operated effectively in all material respects.

Because of the matters described in Disclaimer of Opinion paragraph below, we were not able to obtain sufficient and appropriate audit evidence to provide basis for an audit opinion on internal financial controls over financial reporting with reference to these financial statements of the company.

Meaning of Internal Financial Controls Over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of 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 authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Disclaimer of Opinion

The internal financial controls over financial reporting with reference to these financial statements with regard the company were not fully made available to us to determine if the company has established adequate internal financial controls over financial reporting with reference to these financial statements at the aforesaid and whether such financial controls were operating effectively as at 31st March 2020. Accordingly, we do not express an opinion on internal financial controls over financial reporting with reference to these financial statements.

We also have audited, in accordance with the Standards on auditing issued by institute of Chartered Accountants of India, as specified under section 143(10) of the Act, the financial statements of Uniply Decor Limited, which comprises the Balance Sheet as at 31st March, 2020, and the related Statement of Profit and loss and Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information. We have considered the disclaimer of opinion reported above in determining the nature, timing and extent of the audit tests applied in our audit of the March 31, 2020 financial statements of Uniply Decor Limited and this report does not affect our report dated 17th February 2021 which expressed a Qualified Opinion on those financial statements.

For N.D. Kapur & Co
Chartered Accountants
FRN: 001196N
CA Mohit Kumar
Partner
M. No: 547715
UDIN: 21547715AAAABI1067
Place: New Delhi
Dated: 17th February 2021