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Archidply Industries Ltd.

BSE: 532994 Sector: Others
NSE: ARCHIDPLY ISIN Code: INE877I01016
BSE 15:25 | 03 Aug 26.30 -0.70
(-2.59%)
OPEN

26.80

HIGH

26.80

LOW

26.00

NSE 15:19 | 03 Aug 26.40 -0.25
(-0.94%)
OPEN

27.00

HIGH

27.05

LOW

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OPEN 26.80
PREVIOUS CLOSE 27.00
VOLUME 1660
52-Week high 32.55
52-Week low 12.00
P/E 15.38
Mkt Cap.(Rs cr) 58
Buy Price 26.45
Buy Qty 100.00
Sell Price 26.60
Sell Qty 20.00
OPEN 26.80
CLOSE 27.00
VOLUME 1660
52-Week high 32.55
52-Week low 12.00
P/E 15.38
Mkt Cap.(Rs cr) 58
Buy Price 26.45
Buy Qty 100.00
Sell Price 26.60
Sell Qty 20.00

Archidply Industries Ltd. (ARCHIDPLY) - Auditors Report

Company auditors report

To the Members of

M/s. ARCHIDPLY INDUSTRIES LIMITED

Opinion

We have audited the accompanying Standalone financial statements of M/s. ArchidplyIndustries Limited ("the Company") which comprises the Balance Sheet as at March31 2019 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of changes in Equity and the Statement of Cash Flows for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31March 2019 and its Profit total comprehensive income the changes in equity and its cashflows for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Companies Act 2013.Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India together with the ethical requirements that are relevantto our audit of the financial statements under the provisions of the Companies Act 2013and the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing 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 providedin that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities for the audit of theStandalone Financial Statements section of our report including in relation to thesematters. Accordingly our audit included the performance of procedures designed to respondto our assessment of the risks of material misstatement of the Standalone FinancialStatements. The results of our audit procedures including the procedures performed toaddress the matters below provide the basis for our audit opinion on the accompanyingStandalone Financial Statements.

The Company has certain significant open legal proceedings under arbitration forvarious complex matters with the Government of India and other parties continuing fromearlier years which are as under:

a. On account of Demerger of Plywood & Block Board and Particle & laminatedboard (both divisions) of The Mysore Chip Boards Limited in to the Company in thefinancial year 2007-08:

• Claim against the Company from various parties who had filed a civil suit forrecovery of dues/damages against The Mysore Chip Board Ltd. which has been disputed by TheMysore Chip Board Ltd. (Refer Note 34(A)(i))

• The Company for and on behalf of The Mysore Chip Board Ltd. has given aguarantee towards a show cause notice issued by the Excise Department demanding dues fromThe Mysore Chip Board Ltd. (Refer Note 34 (A)(ii)

b. Claims against the Company from the Deputy Commissioner of Sales Tax Rudrapurrelated to FY 2007-08 & FY 2006-07. The Company has filed appeal with the JointCommissioner Appeal - I Sales Tax Uttarakhand against same demand. (Refer Note 34 (C)).

c. The Company has filed appeal with the Tribunal against the order of the Commissionerfor the availment and utilization of irregular cenvat credit taken on capital expenditureat Chintamani Unit. (Refer Note 34(D))

d. Estimation of contingent liability with respect to Provident Fund in view of SupremeCourt Ruling in case of Vivekananda Vidyamandir order dated 28/02/2019 is not consideredin absence of applicability of the same on the transaction done during the year.(ReferNote 34(K))

It is due to the complexity involved in these litigation matters management'sjudgement regarding recognition and measurement of provisions for these legal proceedingsis inherently uncertain and might change over time as the outcomes of the legal cases anddetermined. Accordingly it has been considered as a Key Audit Matter.

Our Audit procedures included and were not limited to the following :

• Discussion with the management on the development in these litigations duringthe year ended March 312019

• Review of the disclosures made by the Company in the Financial Statements inthis regard.

• Obtained representation letter from the management on the assessment of thesematters.

Responsibility of Management for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the Indian Accounting standards (IndAS) prescribed under section 133 of the Act read with the Companies (Indian Accountingstandards) Rules 2015 as amended and other accounting principles generally accepted inIndia.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection applicationimplementation and maintenance of appropriate of accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the standalone financial statement that give a true and fair view and arefree from material misstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Board of Directors is also responsible for overseeing the company's financialreporting process.

Auditor's Responsibility for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the "Annexure A" statement on the mattersspecified 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 bestof 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 theCompany so far as it appears from our examination of those books

c. The Balance Sheet the Statement of Profit and Loss including other ComprehensiveIncome Statement of changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the books of account.

d. In our opinion the aforesaid standalone financial statements comply with the IndianAccounting 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 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164 (2) of the Act.

f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".

g. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer to Note 35 to the financial statements

ii. The Company did not have any long-term contracts including derivatives contractsfor which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company

For Priti Jhawar & Co.
Chartered Accountants
FRN: 328818E
(Priti Jhawar)
Place: Bangalore Propreitrix
Date: 16/05/2019 (Membership Number.303053)

Annexure -A to the Independent Auditors' Report

The Annexure referred to in Independent Auditors' Report to the members of M/sArchidply Industries Limited ("the Company") on the standalone financialstatements for the year ended 31 March 2019 We report that:

(i) (a) The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;

(b) These fixed assets have been physically verified by the management at reasonableintervals; no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the company the title deeds of immovable properties areheld in the name of the company.

(ii) (a) On basis of information and explanation given to us Physical verification ofInventory has been conducted at reasonable intervals by the management.

(b) Procedure of physical verification of Inventory followed by the management isreasonable &adequate in relation to the size of company and nature of its business.

(c) In our opinion and according to the information and explanations given to us theCompany has maintained proper records of its inventories and no material discrepancieswere noticed on physical verification of stocks as compared to book records.

(iii) The Company has not granted any unsecured loans to any of the parties covered inthe Register maintained under Section 189 of the Companies Act 2013. Accordingly clause(iii) of the order is not applicable.

(iv) In our opinion and according to the information and explanations given to us thecompany has not provided any loans guarantees and Investments to which the provision ofsec 185 of the act apply.

However regarding loans guarantees and Investments to which the provision of sec 186apply the company has complied with the provision of the Section

(v) The company has not received any public deposits during the year. Accordinglyclause (v) of the order is not applicable.

(vi) As informed to us the Central Government has not prescribed maintenance of costrecords under sub-section (1) of Section 148 of the Act in respect of the activitiescarried on by the Company. Accordingly clause (vi) of the order is not applicable.

(vii) (a) According to the records of the company and information and explanationsgiven to us and on the basis of our examination of the records of the company the Companyhas generally been regular in depositing undisputed statutory dues including ProvidentFund Employees State Insurance (ESI) Investor Education and Protection Fund Income-taxTax deducted at source Tax collected at source Professional Tax Sales Tax Value AddedTax (VAT) Goods & Service Tax (GST) Service Tax Custom Duty Excise Duty Cess andother material statutory dues applicable to it with the appropriate authorities. Asexplained to us the company did not have any dues on account of employee's stateinsurance and duty of excise.

According to the information and explanations given to us there were no undisputedamounts payable in respect of Provident fund Income-tax Custom Duty Excise Duty Salestax Goods & Service Tax (GST) Value Added Tax (VAT) Cess and other materialstatutory dues in arrears /were outstanding as at 31 March 2019 for a period of more thansix months from the date they became payable.

(b) According to the information and explanations given to us details of disputedSales Tax Income Tax Customs Duty Service Tax Excise duty and Cess which have not beendeposited as on 31st March 2019 on account of any dispute are given below:

Name of Statute Nature of the dues Disputed amount pending Period to which the amount relates (Financial Years) Forum where dispute is pending.
Central Excise Excise duty Rs.8101637/- 2000-2003 Honourable Supreme Court
Act Excise duty Rs 1257472/- 2011-2012 Appellate Tribunal- Karnataka
Income Tax Act Income Tax Rs 267890/- 2008-2009 CIT Appellate - 1
Income Tax Act Income Tax Rs 485350/- 2009-2010 CIT Appellate - 1
Uttaranchal Vat Tax Act Sales Tax Rs. 5135004/- 2006- 07 & 2007- 2008 The Joint Commissioner Appeal

(viii) In our opinion and according to the information and explanations given to usthe company has not defaulted in the repayment of dues to financial institutions andbanks.

(ix) No money has been raised by way of initial public offer or further public offer(including debt instruments) during the year and Term Loans has been utilized for thepurposes for which they were raised during the year.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no material fraud by the Company and no material fraud on the Company by itsofficers or employees has been noticed or reported during the course of our audit.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the company the managerial remuneration has been provided inaccordance with the requisite approvals mandated by the provisions of Sec 197 with respectto Managerial Remuneration.

(xii) In our opinion and according to the information and explanations given to us thecompany is not a Nidhi Company. Accordingly clause (xii) of the order is not applicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review. Accordingly clause (xiv) of the order is not applicable.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the company the company has not entered into any non-cashtransactions with directors or persons connected with him. Accordingly clause (xv) of theorder is not applicable.

(xvi) The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly clause (xvi) of the order is not applicable.

For Priti Jhawar & Co.
Chartered Accountants
FRN: 328818E
(Priti Jhawar)
Place: Bangalore Propreitrix
Date: 16/05/2019 (Membership Number.303053)

Annexure - B to the Auditors' Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of M/sArchidply Industries Limited ("the Company") as of 31 March 2019 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date.

Management's Responsibility for Internal Financial Controls

The Company's Board of Directors are responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India ('ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that Ire operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions

are recorded as necessary to permit preparation of financial statements in accordancewith generally accepted accounting principles and that receipts and expenditures of thecompany are being made only in accordance with authorisations of management and directorsof the company; and (3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting are operating effectively as at 31 March 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Priti Jhawar & Co.
Chartered Accountants
FRN: 328818E
(Priti Jhawar)
Place: Bangalore Propreitrix
Date: 16/05/2019 (Membership Number.303053)