Uniply Industries Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Mar 2020

1. The above audited standalone financial results have been reviewed by the Audit Committee and approved by the Board at their respective meeting held on 19th February, 2021 which was concluded on 20th February 2021.

2. The Company's Operations consists of two segments a) Interiors/Furniture related products & b) Construction.

3. The figures for the quarter ended 31st Mar 2020 are the balancing figures between the unaudited figures of Nine months ended 31st Dec 2019 and the audited figures for year ended 31st Mar 2020.

4. The figures for the previous period have been regrouped/reclassified wherever necessary.

5. During this year Remuneration to Managing Director has been waived effective from 01.04.2019.

6. The Holding Company had executed an agreement with KKN Holdings Private Limited (Formerly known as Foundation outsourcing India Private Limited) for purchase of 4,00,000 equity shares of Artmatrix Technology Sdn Bhd for Rs, 260 crores. However, this transaction could not be completed because the shares of Artmatrix SDN BHD are recognised by a Unique Identification Number (UIN) allotted by RBI, which is still in the name of Vector Projects India Pvt. Ltd. The Company has been advised to defer the transfer of shares until the UIN Number is transferred to KKN Holdings Pvt Ltd. In terms of renewed agreement, the underlying shares should be transferred to the Company on or before 31st December 2021. The company has already advanced Rs 260 crores to KKN Holdings Private Limited (KKNHPL).

7. The Holding Company had given various advances to KKN Holdings Private Limited (Formerly known as Foundation Outsourcing Private Limited) amounting to Rs. 2,06,16,50,242/- for various other purposes, by way of either payments made to KKN Holdings Private Limited and / or by way of certain adjustments. The management of the Company believes that underlying assets shall be transferred to the Company and capitalised by 31.03.2021 and / or surplus / deficit, if any, shall be repaid back to / paid by the Company. Few extracts of advance to KKN have been provided herein below:

a) The Holding Company had Inter Corporate Deposits with Vector Projects India Private Limited ('VPIPL'), wholly owned subsidiary company, amounting to Rs. 36,60,37,884/- during earlier years. During the financial year 2019-20, these Inter Corporate Deposits have been adjusted and treated as advance to KKNHPL with mutual consent from both the parties.

b) The Holding Company had Inter Corporate Deposits with Super Band Private Limited (having common directors Mr. Keshav Narayan Kantamneni and Ramgopal Lakshmi Ratan) amounting of 45,89,88,012/- during earlier years. During the financial year 2019-20, these Inter Corporate Deposits have been adjusted and treated as advance to KKNHPL with mutual consent from both the parties.

c) The Holding company had given advance for purchase of shares amounting to Rs. 6,00,00,000/- to two shareholders of AT Broadband Private Limited for purchase of 20,000 shares of AT Broadband Private Limited. Underlying agreement was cancelled during the year the sum of Rs. 120000000 has been treated as advance to KKNHPL.

8. During the year company's lease assets and lease liability amounting to Rs. 6,46,53,467/- and 5,90,16,182/- respectively created in accordance with INDAS116 has been written off in the books of accounts due to discontinuance of its long term leases entered with various parties.

9. Promoters' following shares of Holding Company were pledged and have been invoked and taken over by lenders. Details have been provided

i. 2250190 shares (1.34% of total shareholding of the Holding company) held by Mr. Keshav Narayan Kantamneni was pledged to and invoked by Beacon Trusteeship Ltd. on 21.03.2020 for default on Non-convertible Debentures issued by KKN Holdings Pvt. Ltd.

ii. 7149810 shares (4.26% of total shareholding of the Holding company) held by M/s. Madras Electronics Solutions Pvt Ltd was pledged to and invoked by Beacon Trusteeship Ltd. on 21.03.2020 for default on Non-convertible Debentures issued by KKN Holdings Pvt. Ltd.

iii. 17097810 shares (10.20% of total shareholding of the Holding company) held by Mr. Keshav Narayan was pledged to and invoked by SBICAP Trustee Company Ltd. on 09.10.2020 for default by wholly owned subsidiary VPIPL.
Promoters have contested the invocation.

10. The company has booked compensation expense of Rs.5,05,00,000/- in profit and loss account payable to a partnership firm. This claim was due to deficiencies in supplies for earlier years.

11. The Holding company has paid GST amounting to Rs. 10,19,95,500/- by reversing GST Input tax credit(ITC) via form DRC - 03 as demanded in GST search and search survey operation carried on company's premises in November 2019.

12. Management believes that the Holding Company will be able to continue its operations on a 'going concern' basis and meet all its liabilities as they fall due for payment in the foreseeable future at least for a period of twelve months from the balance sheet date on the basis of the following:

Financial support letter from Promoter (KKN Holdings Private Limited and Mr. Keshav Narayan Kantamneni), which states that promoter will provide management / financial expertise and support in upcoming financial year to best of their abilities.

Business Strategies and operating plans which will enable the company to generate operating cash flows for the future the senior management team is in place and is headed by Mr Keshav Kantamneni.

The subsidiary company has been awarded two projects from Grater Hyderabad Municipal Corporation to carry out the interior work for the affordable housing. Tire cumulative projects are ~ INR 363 crores. The revenue is recognised on milestone basis as defined under the contract.

The subsidiary company estimates to achieve the Revenue of INR 220 crores by F.Y. 2022. The working capital support required to achieve the said revenue would be made available through fund mobilisation by promoter in suitable forms.

The senior management team is in place and is headed by Mr Keshav Kantamneni,

Positive net worth position at the yearend Accordingly the financial statements have been prepared on a going concern basis.

13. None of the suppliers has intimated about their MSME status along with certificate of registration under MSMED Act. In view of above, no interest provision was made by the Company during the year.

14. Balance with SBI - EEFC A/c (6054) amounting to Rs 348/-, (Inoperative, hence no statement available) and Balance with HDFC Esrow A/c (18185) amounting to Rs. 0/- of Holding company and some bank of subsidiary company have not been confirmed by respective banks.

15.1. Balance of trade receivables are subject to confirmation and reconciliation. The management is hopeful for recovery from debtors in due course, therefore, no provision for bad and doubtful debts is required.

15.2. Out of above balance of trade receivables, Rs. 36,11,38,487/- have been assigned by Vector Projects India Private Limited and Rs. 1,11,59,576/ - have been assigned by Uniply Decor Limited.

16. Considering the future business potential, projected cash flows / profits and growth of subsidiary company Vector Projects India Private Limited (VP1PL) investment amounting to Rs. 57,50,00,000/- is measured at cost, and impairment loss as on 31.03.2020, if any, is not recognised in books of accounts. The management is of the opinion that no valuation of subsidiary required as on 31.03.2020.

17. Bad debts under other expenses includes unbilled debtors of Rs. 15.02 crores which was never billed to any debtors. And the same belongs to FY 18-19 unbilled income.

18. The Company has advanced Rs. 50,00,00,000/-.to KKN Holdings Private Limited (Formerly known as Foundation outsourcing India Private Limited) during earlier years, for purchase of Vector House. In terms of initial agreement, sale should have been completed on or before 30th June 2019. In terms of further extension the purchase should be completed on or before 31st December 2021. The company has already advanced Rs 50 crores to KKN Holdings Private Limited.

19. The Company has advanced Rs. 5,00,00,000/- to Mr. Keshav Narayan Kantamneni during earlier years, for purchase of land at Murukkancheri. In terms of initial agreement, purchase should have been completed on or before 30th June 2019. In terms of further extension, purchase should be completed on or before 31st December 2021. The company has already advanced Rs 5 crores to Mr. Keshav Narayan Kantamneni.

20. The Company has advanced Rs. 12,00,00,000/- to Mr. Keshav Narayan Kantamneni during earlier years, for purchase of Boat Club Villa. Till date ownership of said property has not been transferred to the Company. However, it has been confirmed that Mr. Keshav Narayan Kantamneni will transfer the underlying asset to the company on or before 31st December 2021. The company has already advanced Rs 12 crores to Mr. Keshav Narayan Kantamneni.

21. During the year, there were no operating / finance lease of the company

22. There are no pending litigation against the Holding and Subsidiary company which can impact the financial statements as on 31.03.2020, except that there are statutory 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 -

a. There are disputed dues of demand raised on account of MV AT charged by Department in the assessment on service tax component of Billing under Works Contract, for which the subsidiary company has preferred an appeal. However, the subsidiary company is confident of getting relief in appellate proceedings as definition of Sales Price has been amended in Maharashtra VAT Law w.e.f. 01*04.2015, which provides that Sales price of goods will not include Service Tax Charged.

b. There are disputed dues of demand raised on account of KVAT charged by the Department in the assessment due to differential tax liability due to stock transferred not covered by 'F' Forms, for which the subsidiary company has preferred an appeal. However, the subsidiary company is confident of getting relief in Appellate proceedings.

23. There are certain transactions of receipts and payments through bank, in the subsidiary company and parties relating to those transactions are not identifiable by the management till the balance sheet date. Though the management is certain that these received or paid amounts relate lo Trade Receivables (Rs. 2,68,99,217/- Credit) and Trade Payables (Rs. 3,59,088/- Debit) respectively.

24. Short Term Borrowings of the subsidiary Company include Secured Loans Rs. 88.71 Crore, and Unsecured Loans Rs. 74.59 Crore. These are Working Capital limits from SyC & RBL. Accounts with RBL and SVC Banks were classified as NPA in the months of March 2020 and June 2020 respectively. However, in view of RBI's guidelines, no company should have been classified an NPA post March 2020. The cases of the said NPA loans are before DRT. According to the Management, the subsidiary company and the bankers have agreed to have both loan accounts closed and settled in entirety. Repayment of Loan Amount of RBL Bank has been done during the financial year 2020-21 except remaining balance amount of Rs. 1.65 Crore

25. Amounts deposited by the subsidiary company with various parties in respect of Rent Deposits, Security Deposits and capital advances are taken in the financials as per the books of accounts and have not been confirmed by the respective parties. In the opinion of the management, the same are fully recoverable.

26. During the year, the subsidiary company has not transferred any amount in the Debenture Redemption Reserve, in view of the relaxation provided by the Government amid Covid-19 outbreak, vide General Circular No. 11/2020 dated 24.03.2020. Also, the subsidiary company has written off the entire balance of Rs. 91,65,474/-pertaining to Debenture Issue Expense Account (Current as well as Non-current), during the financial year 2019-20.

27. Amounts deposited by the subsidiary company with various parties in respect of Rent Deposits, Security Deposits and capital advances are taken in the financials as per the books of accounts and have not been confirmed by the respective parties. In the opinion of the management, the same are fully recoverable.

28. Unbilled Revenue Expenditure, classified under Other Current Assets, amounting to Rs. 171.21 Crore till 31.12.2019, has been classified as part of Sundry Debtors.

29. Consequent to restructuring in the Company, during the month of November 2019, many of its employees left the company, whose full and final settlement is under progress and provision has been created for their dues in the books of account such as towards Salary Rs. 59,34,497/-, towards Bonus Rs. 24,75,000/-, towards Gratuity Rs. 400,000/- as on 31.03.2020, Payment of the same shall be made once employee (s) approach the Company for their full and final settlement.

30. The Holding Company had to conduct Annual General Meeting (AGM) within 6 months from the closure of financial year and the notice thereof was to be given to the members before 21 days of appointed date of AGM. Copy of Directors Report and Audited Financial Statement along with report of auditors was to be given to the members along with notice of AGM. Due to unprecedented Covid-19 circumstances, Chennai-ROC used its powers and suo - moto extended the due date of conducting AGM by 3 months, i.e., upto 31st December 2020 or within 15 months from the date of last AGM whichever is earlier. However, AGM of the company has been delayed beyond the extended time due to said unprecedented Covid circumstances, wherein, staff of the Company could not finish the work within the due allotted time. However, the management of the Company has put its whole hearted efforts and is confident of conducting the AGM within first fortnight of March 2021.

31. During the year, in the opinion of the management, there were no Contingent Liabilities or capital commitment of the Holding and subsidiary company which require disclosure in the Financial statements as on 31.03.2020.

32. On 11 March 2020, the World Health Organization declared COVID-19 outbreak as a pandemic. Responding to the potentially serious threat of the pandemic, the Indian Government has taken a series of measures to contain the outbreak, which included imposing 'lock-downs' across the country for several months. The lockdowns and restrictions imposed on various activities due to COVID-19 pandemic have posed challenges to the businesses of the Company. The management, based on current estimates and information, expect the carrying amount of company's assets to be recovered. The management has assessed the impact for existing and anticipated effects of COVID-19 on the future cash flow projections on the basis of significant assumptions as per the available information. Based on aforesaid assessment management believes that as per, estimates made conservatively, the company will continue as a going concern. The management continues to monitor any material changes to its COVID-19 impact assessment, resulting from the future economic conditions and future uncertainty, if any.

Keshav Kantamneni
Chairman