M/S. ARCHIDPLY INDUSTRIES LIMITED
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the accompanying Standalone financial statements of M/s. Archidply Industries Limited (“the Company”) which comprises the Balance Sheet as at March 31, 2023, 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 a summary of 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, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2023, and its Profit, total comprehensive Loss, the changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. 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 Companies Act, 2013 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 on the financial statement.
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. For each matter below, our description of how our audit addresses the matter is provided in that context.
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Descriptions of Key Audit Matter
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How we addressed the matter in our audit
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A. Valuation of Inventories
Refer to note 8 to the financial statements.
The Company is having Inventory of B5071.19 Lakh as on 31st March, 2023.
Inventories are to be valued as per Ind AS 2. As described in the accounting policies in note 1(10) to the financial statements, inventories are carried at the lower of cost and net realisable value. As a result, the management applies judgment in determining the appropriate provisions against inventory of Stores, Raw Material, Finished goods and Work in progress based upon a detailed analysis of old inventory, net realisable value below cost based upon future plans for sale of inventory.
To ensure that all inventories owned by the entity are recorded and recorded inventories exist as at the year-end and valuation has been done correctly
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We obtained assurance over the appropriateness of the
management's assumptions applied in calculating the value
of the inventories and related provisions by:
• Completed a walkthrough of the inventory valuation process and assessed the design and implementation of the key controls addressing the risk.
• Verifying the effectiveness of key inventory controls operating over inventories; including sample based physical verification.
• Verify that the adequate cut off procedure has been applied to ensure that purchased inventory and sold inventory are correctly accounted.
• Reviewing the document and other record related to physical verification of inventories done by the management during the year.
• Verify that inventories are valued in accordance with Ind AS 2
• Verifying for a sample of individual products that costs have been correctly recorded.
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• Comparing the net realisable value to the cost price of inventories to check for completeness of the associated provision.
• Reviewing the historical accuracy of inventory provisioning and the level of inventory write-offs during the year.
Our Conclusion:
Based on the audit procedures performed we did not identify
any material exceptions in the Inventory valuation.
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B. Revenue recognition on sale of goods and impair-
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Our audit procedures included, amongst others:
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ment loss allowance on trade receivables
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• Tested a sample of sales transactions for compliance
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Revenue is measured based on the transaction
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with the Company's accounting principles to assess
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price, which is the consideration, adjusted for
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the completeness, occurrence and accuracy of revenue
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volume discounts, rebates, scheme allowances, price
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recorded.
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concessions, incentives and returns, if any, ('variable
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• We read and evaluated the Company's policies for revenue
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consideration') as specified in the contracts with the customers.
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recognition and impairment loss allowance and assessed
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its compliance with Ind AS 115 - Revenue From Contracts
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An estimate of variable consideration payable to the
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With Customers' and Ind AS 109 'Financial Instruments',
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customers is recorded as at the year end. Such estimation
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respectively.
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is done based on the terms of contracts, rebates and
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• We assessed the design and tested the operating
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discounts schemes and historical experience.
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effectiveness of internal controls related to sales including
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In accordance with Ind AS 109 - Financial Instruments,
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variable consideration and impairment loss allowance on
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the Company follows 'simplified approach' for
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trade receivables.
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recognition of impairment loss allowance on trade
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• We performed the following tests for a sample of
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receivables. In calculating the impairment loss allowance, the Company has considered its credit
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transactions relating to variable consideration:
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assessment and other related credit information for
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• Read the terms of contract including rebates and
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its customers to estimate the probability of default in
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discounts schemes as approved by authorized
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future and has considered estimates of possible effect
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personnel.
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from increased uncertainties in economic environment.
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• Evaluated the assumptions used in estimation of
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We identified estimation of variable consideration and
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variable consideration by comparing with the past
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impairment loss allowance on trade receivables as a key audit matter because the Company's management
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trends and understand the reasons for deviation.
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exercises significant judgments and estimates in
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• Performed retrospective review to identify and evaluate variances.
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calculating the said variable consideration and
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impairment loss allowance
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• Tested the design, implementation and operating effectiveness of the Company's controls over computation of incentives and pay out against the corresponding liability
• We evaluated management's assessment of the assumptions used in the calculation of impairment loss allowance on trade receivables, including consideration of the current and estimated future uncertain economic conditions.
• For sample customers, we tested past collection history, customer's credit assessment and probability of default assessment performed by the management.
• We tested the mathematical accuracy and computation of the allowances.
• We read and assessed the relevant disclosures made within the standalone financial statements.
Our conclusion:
Based on the audit procedures performed we did not identify
any material exceptions in the recognition of revenue and
incentives and discount expenses.
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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 the information included in the Board's Report including Annexure to the Board's Report, but does not include the financial statements and our auditor's report thereon. The Company's annual report is expected to be made available to us after the date of this auditor's report.
Our opinion on the standalone 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 standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the 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. We have nothing to report in this regard.
Responsibility of Management and Board of Director's for the Standalone Financial Statements
The Company's Management and Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone 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, application, implementation and maintenance of appropriate of 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 standalone 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, management and Board of Directors 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 management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Management and Board of Directors are also responsible for overseeing the company's financial reporting process. Auditor's Responsibility for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone 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 standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the standalone 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 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 the 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 standalone 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 standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.
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 standalone 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 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 Companies Act, 2013, we give in the "Annexure 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.
b. 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 Income, 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. In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with the Companies (Indian Accounting standards) Rules, 2015.
e. On the basis of the written representations received from the directors as on 31st March, 2023taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2023 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 B" Our Report expresses an unmodified opinion on the adequacy and operating effectiveness of the company's internal financial controls over financial reporting.
g. 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 which could impact its financial position as mentioned in note no.34 to Financial Statement.
ii. The Company did not have any long-term contracts including derivatives 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. a. 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 source 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 lender 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.
b. The management has represented, that, to the best of it's knowledge and belief, no funds have been received by the company from any person or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the company shall, whether,
• 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; and
c. Based on audit procedures as we 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 iv(a) and iv(b) contain any material mis-statement.
v. The company has not declared or paid any dividend during the year, hence the provisions of section 123 of the Companies Act, 2013 is not applicable to the Company.
vi. Proviso to Rule 3(1) of the Companies(Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log)facility is applicable to the Company w.e.f. April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31,2023.
h. With respect to the matter to be included in the Auditor's Report under Section197(16) of the Act:
In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act.
For GRV & PK
Chartered Accountants FRN:008099S
(Kamal Kishore)
Partner
(Membership Number.205819) UDIN:23205819BGXZUA8438
Place: Delhi Date: 17.05.2023
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