Submission of Statement on Impact if Audit Qualification.
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AMS Polymers Limited has submitted a statement on audit qualifications for the financial year ended March 31, 2025. The statutory auditor (KVA & Company) has issued an Adverse Opinion on the standalone financial statements, citing five separate qualifications, all raised for the first time. Key issues include: absence of a proper Fixed Asset Register, inability to verify inventory through physical verification, missing ageing schedules and external confirmations for trade receivables/payables with no provision for doubtful debts, non-provisioning of gratuity under Ind AS 19, and non-compliance with Section 177/188 of the Companies Act regarding related party transactions. Despite these qualifications, the company reported turnover of Rs. 100.97 crore, net profit of Rs. 1.02 crore, and EPS of Rs. 0.23, with adjusted figures identical to reported figures since the impact was not quantified. Management acknowledges the observations and attributes them to ERP transition, workforce constraints, and governance restructuring, stating corrective measures have been initiated.
This is a serious red flag for shareholders — an adverse opinion (more severe than a qualified opinion) means the auditor believes the financial statements are materially misstated and cannot be relied upon. Investors should treat the reported profits and balance sheet figures with significant caution, as they are unaudited in substance. The governance lapses around related party transactions and lack of internal controls raise concerns about overall management quality.