To The Members of Greenpanel Industries Limited
Report on the Audit of the Standalone
We have audited the accompanying standalone financial statements ofGREENPANEL INDUSTRIES LIMITED ("the Company") which comprise the balance sheetas at March 31 2021 the statement of profit and loss (including other comprehensiveincome) the statement of changes in equity and the statement of cash flows for the yearended on that date and a summary of the significant accounting policies and otherexplanatory information.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the relevant rules made thereunder asamended and other accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2021 total comprehensive income changes in equityand its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing specified under section 143(10) of the Act(SAs). Our responsibilities under those Standards are further described in theAuditor's Responsibilities for the Audit of the Standalone Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI) together with theindependence requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules made thereunder as amended andwe have fulfilled our other ethical responsibilities in accordance with these
requirements and the ICAI's Code of Ethics. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for ouraudit opinion on the standalone financial statements.
Emphasis of Matter
We draw attention to Note 49 to the standalone financial statementswhich describes in detail the uncertainties and the impact of Covid-19 pandemic on theCompany's operations and results as assessed by the management. Due to outbreak ofCOVID-19 pandemic the economic activity is disturbed which may impact revenuesprofitability and liquidity of the Company. The exact impact is not determinable as ondate. Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements for thefinancial year ended March 31 2021. These matters were addressed in the context of ouraudit of the standalone financial statements as a whole and in forming our opinionthereon and we do not provide a separate opinion on these matters. For each matter belowour description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key auditmatters to be communicated in our report. We have fulfilled the responsibilities describedin the Auditor's Responsibilities for the audit of the standalone financialstatements section of our report including in relation to these matters. Accordingly ouraudit included the performance of procedures designed to respond to our assessment of therisks of material misstatement of the standalone financial statements. The results of ouraudit procedures including the procedures performed to address the matters below providethe basis for our audit opinion on the accompanying standalone financial statements.
|Key audit matters ||How our audit addressed the key audit matters |
|Revenue recognition on sale of goods and impairment loss allowance on trade receivables || |
|Revenue is measured based on the transaction price which is the consideration adjusted for volume discounts rebates scheme allowances price concessions incentives and returns if any (variable consideration') as specified in the contracts with the customers. ||Our audit procedures included amongst others: |
| ||a. We read and evaluated the Company's policies for revenue recognition and impairment loss allowance and assessed its compliance with Ind AS 115 - Revenue from contracts with customers' and Ind AS 109 Financial Instruments' respectively. |
|An estimate of variable consideration payable to the customers is recorded as at the year- end. Such estimation is done based on the terms of contracts rebates and discounts schemes and historical experience. ||b. We assessed the design and tested the operating effectiveness of internal controls related to sales including variable consideration and impairment loss allowance on trade receivables. |
| ||c. We performed the following tests for a sample of transactions relating to variable consideration: |
|In accordance with Ind AS 109 - Financial Instruments the Company follows simplified approach' for recognition of impairment loss allowance on trade receivables. In calculating the impairment loss allowance the Company has considered its credit assessment and other related credit information for its customers to estimate the probability of default in future and has considered estimates of possible effect from increased uncertainties in economic environment. We identified estimation of variable consideration and impairment loss allowance on trade receivables as a key audit matter because the Company's management exercises significant judgments and estimates in calculating the said variable consideration and impairment loss allowance. || |
| || Read the terms of contract including rebates and discounts schemes as approved by authorized personnel. |
| || Evaluated the assumptions used in estimation of variable consideration by comparing with the past trends and understand the reasons for deviation. |
| || Performed retrospective review to identify and evaluate variances. |
| ||d. 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. |
| ||e. For sample customers we tested past collection history customer's credit assessment and probability of default assessment performed by the management. |
| ||f. We tested the mathematical accuracy and computation of the allowances. |
| ||g. We read and assessed the relevant disclosures made within the standalone Ind AS financial statements. |
|Accounting of government grants || |
|The Company has various grants and subsidies receivable from the state Governments of respective plant locations. ||Our audit procedures included amongst others: |
| ||a. We checked that the recognition of grants / subsidies is in accordance with IND AS 20 by making a reference to the conditions for such grants in the scheme documents of the respective state Governments and checking the due evidence of fulfillment of such conditions by the Company |
|These grants and subsidies are both capital and revenue in nature. || |
| ||b. We have also gone through the correspondence between the Company and relevant Government authorities to assess the recoverability of grants / subsidies already recognized |
| ||c. We reviewed the legal experts' opinions obtained by the Company and/or the Managements' Representation in cases where such grants have been outstanding for more than a year. |
Information Other than the Financial Statements and Auditor'sReport Thereon
The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in theDirector's report but does not include the financial statements and ourauditor's report thereon.
Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusions thereon.
In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained during the course of our audit or otherwise appears to be materiallymisstated.
If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.
Responsibility of Management for the Standalone Financial Statements
The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements
Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue 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 auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional scepticism through out the audit.We also:
Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omission misrepresentations or the overrideof internal control.
Obtain an understanding of internal financial controls relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the standalone financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
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 of the Act we give in the "Annexure A" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.
2. As required by Section 143(3) of the Act based on our audit wereport that:
a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.
b) The balance sheet the statement of profit and loss including othercomprehensive incomestatement of changes in equity and the statement of cash flow dealtwith by this Report are in agreement with the relevant books of account.
c) In our opinion the aforesaid standalone financial statements complywith the Ind AS specified under Section 133 of the Act read with the relevant rules madethereunder as amended and other accounting principles generally accepted in India.
e) On the basis of the written representations received from thedirectors as on March 312021 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2021 from being appointed as a director in termsof Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internalfinancial controls over financial reporting.
g) With respect to the other matters to be included in theAuditor's Report in accordance with the requirements of section 197(16) of the Actas amended:
In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act
h) With respect to the other matters to be included in theAuditor's Report in accordance withRule 11 of the Companies (Audit andAuditors)Rules 2014 as amended in our opinion and to the best of our information andaccording to the explanations given to us:
i. The Company has disclosed the impact of pendinglitigations as atMarch 31 2021 on its financial position in its standalonefinancial statements- Refer Note37 (a) to the standalone financial statements.
ii. The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts.
iii. There was no amount required to be transferred to the InvestorEducation and Protection Fund by the Company during the year ended March 31 2021.
For S. S. Kothari Mehta & Company
Firm Registration No. 000756N
Membership No: - 087294
Place: New Delhi
Date: May 14 2021
Annexure A to the Independent Auditor's Report to the Members ofGREENPANEL INDUSTRIES LIMITED on its standalone financial statements dated May 14 2021
Report on the matters specified in paragraph 3 of the Companies(Auditor's Report) Order 2016 ("the Order') issued by the CentralGovernment of India in terms of section 143(11) of the Companies Act 2013 ("theAct") as referred to in paragraph 1 of Report on Other Legal and RegulatoryRequirements' section.
i. (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.
(b) The Company has a regular program of physical verification of itsfixed assets by which fixed asset of respective locations are verified in phased manner.In our opinion the frequency of physical verification is reasonable having regard to thesize of the Company and the nature of its fixed assets. No material discrepancies werenoticed on such physical verification.
(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company.
ii. The inventories of raw material and components of the Company(except stock lying with the third parties and in transit) have been physically verifiedby the management at the end of the year and in respect of inventory of stores and sparesthere is perpetual inventory system and substantial portion of the stock have beenverified during the year. In our opinion the procedures of physical verification ofinventory followed by the Management are reasonable in relation to the size of the Companyand nature of its business. The discrepancies if any were not material and adjusted inthe books.
iii. The company has not granted any loans secured or unsecured tocompanies firms or other parties covered in the register maintained under section 189 ofthe Act. Accordingly clauses 3(iii) (a) to (c) of the Order are not applicable.
iv. According to the information explanations and representationsprovided by the management and based upon audit procedures performed we are of theopinion that in respect of loans investments guarantees and security the Company hascomplied with the provisions of the Section 185 and 186 of the Act.
v. As the Company has not accepted deposits the directives issued bythe Reserve Bank of India and the provisions of Section 73 to76 of the Act or any otherrelevant provisions of the Act and the rules framed there under are not applicable.Neither an order has been passed by the Company Law Board or National Company Law Tribunalor Reserve Bank of India or any Court or any other Tribunal nor is any proceeding pendingbefore such authority.
vi. The Company is not required to maintain the books of accountpursuant to the rules made by the Central Government for the maintenance of cost recordsunder section 148(1) of the Act. However company maintains adequate cost records inrespect of the company's products. We have however not made a detailed examinationof the said records with a view to determine whether they are accurate or complete.
vii. (a) According to the information and explanations given to us andthe records of the Company examined by us in our opinion the Company is generallyregular in depositing undisputed statutory dues including provident fund employees'state insurance income-tax duty of customs goods and service tax cess and othermaterial statutory dues as applicable with the appropriate authorities and there are nosuch undisputed amounts payable which have remained outstanding as at March 31 2021 for aperiod of more than six months from the date they became payable.
(b) According to the records and information & explanations givento us certain dues in respect of Income tax sales tax service tax duty of customsduty of excise and value added tax that have not been deposited with the appropriateauthorities on account of dispute and the forum where the dispute is pending are givenbelow:
|Name of the statute ||Nature of dues ||Amount (Rs. In lacs) ||Period to which the amount relates ||Forum where dispute is pending |
|Service Tax Act 1944 ||Denial of refund of service tax refund on Timber transportation ||51.64 ||August 2013 to May 2014 ||CESTAT New Delhi |
|Service Tax Act 1944 ||Demand of Service tax on GTA services availed for transportation of wood log ||445.68 ||June 2014 to September 2016 ||Commissioner Customs Central Excise & Service Tax Hapur |
|Service Tax Act 1944 ||Demand of Service tax on GTA services availed for transportation of wood log ||133.34 ||October 2016 to June 2017 ||Commissioner Central Goods & Service Tax Dehradun |
|Customs Act 1962 ||Disallowance of benefits under SHIS license ||391.92 ||July 2013 to December 2014 ||CESTAT Kolkata |
|Customs Act 1962 ||Disallowance of benefits under SHIS license ||6.49 ||2013-2014 to 20142015 ||CESTAT Kolkata |
viii. In our opinion on the basis of audit procedures and according tothe information and explanations given to us the Company has not defaulted in repaymentof loans and borrowings to financial institutions banks Government and dues to debentureholders. The Company has not taken any loan from Government.
ix. In our opinion and according to the information and explanationsgiven to us term loans were applied for the purpose for which the term loan wereobtained.No money has been raised during the year by way of initial public offer / furtherpublic offer.
x. During the course of our examination of the books and records of theCompany carried out in accordance with the generally accepted auditing practices in Indiawe have neither come across any instance of fraud on or by the Company or any fraud on theCompany by its officers or employees has been noticed or reported during the year norhave we been informed of such case by the management.
xi. In our opinion and according to the Information and explanationgiven to us the company has paid/ provided managerial remuneration in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theAct.
xii. As the Company is not a Nidhi Company the provision of clause3(xii) of the Order are not applicable to the Company.
xiii. According to the information and explanations given to us alltransactions with related parties are in compliance with sections 177 and 178 of the Actas applicable and the details have been disclosed in these standalone financial statementsas required by the applicable accounting standards.
xiv. The company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3 (xiv) of the Order are not applicable tothe Company.
xv. In our opinion and on the basis of information and explanationsgiven to us the company has not entered into non-cash transactions with directors andpersons connected with him. Hence the provisions of section 192 of Act are notapplicable.
xvi. According to the information and explanations given to us theprovisions of section 45-IA of the Reserve Bank of India Act 1934 are not applicable tothe Company.
For S. S. Kothari Mehta & Company
Firm Registration No. 000756N
Membership No: - 087294
Place: New Delhi
Date: May 14 2021
Annexure B to the Independent Auditor's Report to the Members ofGREENPANEL INDUSTRIES LIMITED dated May 14 2021 on its standalone financial statements
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act") as referredto in paragraph 2(f) of Report on Other Legal and Regulatory Requirements'section
We have audited the internal financial controls over financialreporting of GREENPANEL INDUSTRIES LIMITED ("the Company") as of March 31 2021in conjunction with our audit of the standalone financial statements of the Company forthe year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's Management is responsible for establishing andmaintaining internal financial controls based on "the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India". Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.
Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit.
We conducted our audit in accordance with the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting (the "Guidance Note") andthe Standards on Auditing as specified under section 143(10) of the Act 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness.
Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlover financial reporting includes those policies and procedures that:
a) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;
b) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of thecompany; and
c) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assetsthat could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to theexplanations given to us the Company
has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2021 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
For S. S. Kothari Mehta & Company
Chartered Accountants Firm Registration No. 000756N
Membership No: - 087294
Place: New Delhi
Date: May 14 2021