Century Plyboards (India) Limited
Report on the Audit of the Standalone Financial StatementsOpinion
1. We have audited the accompanying standalone financial statements of Century Plyboards (India) Limited (“the Company”), which comprise the standalone balance sheet as at 31st March, 2023, the standalone statement of profit and loss, (including the standalone statement of other comprehensive income), the standalone statement of changes in equity and standalone cash flow statement for the year then ended and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information's (hereinafter referred to as “the standalone financial statements”).
2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (“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 31st March, 2023, its profit and other comprehensive loss, statement of changes in equity and cash flows for the year ended on that date.
Basis for Opinion
3. We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the auditor's responsibilities for the audit of the standalone 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 (ICAI) of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Key Audit Matters
4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the financial year ended 31st March, 2023. These matters were addressed in the context of our audit of the standalone 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 addressed 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
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We obtained assurance over the appropriateness of the management's assumptions
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Refer to note 9 to the standalone
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applied in calculating the value of the inventories and related provisions by:
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financial statements. The Company is
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• Completed a walkthrough of the inventory valuation process and assessed the
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having Inventory of H50235.16 lakh as
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design and implementation of the key controls addressing the risk.
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on 31st March, 2023. Inventories are to
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• Verifying the effectiveness of key inventory controls operating over inventories;
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be valued as per Ind AS 2. As described
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including sample based physical verification.
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in the accounting policies in note 2.2(j) to the standalone financial statements,
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• Verify that the adequate cut off procedure has been applied to ensure that
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inventories are carried at the lower of
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purchased inventory and sold inventory are correctly accounted.
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cost and net realisable value. As a result,
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• Reviewing the document and other record related to physical verification of
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the management applies judgment in
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inventories done by the management during the year.
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determining the appropriate provisions
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• Verify that inventories are valued in accordance with Ind AS 2
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against inventory of Stores, Raw
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• Verifying for a sample of individual products that costs have been correctly
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Material, Finished goods and Work in
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recorded.
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progress based upon a detailed analysis of old inventory, net realisable value
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• Comparing the net realisable value to the cost price of inventories to check for
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below cost based upon future plans
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completeness of the associated provision.
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for sale of inventory. To ensure that all
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• Reviewing the historical accuracy of inventory provisioning and the level of
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inventories owned by the entity are
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inventory write-offs during the year.
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recorded and recorded inventories exist
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Our Conclusion:
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as at the year-end and valuation has
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Based on the audit procedures performed we did not identify any material exceptions
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been done correctly.
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in the Inventory valuation.
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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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B. Revenue Recognition
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As part of our audit, we understood the Company's policies and processes, control
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The accuracy of amounts recorded as
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mechanisms and methods in relation to the revenue recognition and evaluated the
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revenue is an inherent risk due to the
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design and operative effectiveness of the financial controls from the above through
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complexity involve.
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our test of control procedures.
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The application of revenue recognition accounting standards Ind AS 115 is complex and involves a number of
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•
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Tested a sample of sales transactions for compliance with the Company's accounting principles to assess the completeness, occurrence and accuracy of revenue recorded.
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judgments and estimates. Refer note no
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•
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Performing procedures to ensure that the revenue recognition criteria adopted
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2.4(f) - to Critical accounting judgments
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by Company for all major revenue streams is appropriate and in line with the
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including those involving estimations
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Company's accounting policies.
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and Revenue recognition. Revenue
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•
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We tested the company's system generated reports, based on which revenue is
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is recognised when the control of the
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accrued at the year end, and performed tests of details on the revenue recognised
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underlying products has been transferred
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and accounts receivable balances at the year end.
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to customer along with the satisfaction of
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•
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Our tests of detail focused on transactions occurring within proximity of the
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the Company's performance obligation
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year end and obtaining evidence to support the appropriate timing of revenue
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under a contract with customer.
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recognition, based on terms and conditions set out in sales contracts and delivery
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Due to the Company's presence across
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documents or system generated reports. We considered the appropriateness and
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different marketing regions within the
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accuracy of any cut-off adjustments.
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country and the competitive business
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•
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Tested the design, implementation, and operating effectiveness of the Company's
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environment, the estimation of the
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controls over computation of incentives and pay out against the corresponding
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various types of discounts and incentive
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liability.
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schemes to be recognised based on
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•
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Obtaining and inspecting, on a sample basis, supporting documentation for
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sales made during the year is material and considered to be complex and judgmental. In view of the complexity of the revenue recognition and the judgments and estimates involved the recognition of revenue and provisions of discounts and incentives expenses was a
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•
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discounts, incentives and rebates recorded and disbursed during the year as well as credit notes issued after the year end to determine whether these were recorded appropriately.
Performed retrospective review of the management's estimate by comparing
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utilisation of incentives with previously recognised corresponding liability. We
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also considered the developments during the year and subsequent to the year-
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end that would significantly affect the measurement of the year end incentive
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matter of most significance to our audit.
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•
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liability.
Assessed and reviewed the disclosures made by the Company in the standalone financial statements.
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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 Standalone Financial Statements and Auditor’s Report Thereon
5. The Company's Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the annual reports, but does not include the standalone financial statements and our auditor's report thereon. The 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 during the course of our audit or otherwise appears to be materially
misstated. When we read annual report if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate action as applicable under the relevant laws and regulations.
Managements and Board of Directors Responsibility for the Standalone Financial Statements
6. The Company's Management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the standalone financial position, standalone financial performance (including other comprehensive income), standalone changes in equity and standalone cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting
Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the 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 statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
7. In preparing the standalone financial statements, management is 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.
8. Those charged with governance are also responsible for overseeing the Company's financial reporting process.
Auditor’s Responsibilities for the Audit of the Standalone Financial Statements
9. 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.
10. 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 with reference to standalone financial statements 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 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.
11. 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.
12. 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.
13. 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.
14. 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
15. 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 Act, we give in the “Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order.
16. 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 standalone balance sheet, the standalone statement of profit and loss including the standalone statement of other comprehensive income, the standalone statement of changes in equity and the standalone cash flow statement 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 Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time;
e) On the basis of the written representations received from the directors as on 31st March, 2023 taken 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 with reference to standalone financial statement of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”.
g) With respect to the other matters to be included in the Auditor's Report in accordance with the requirement of section 197(16) of the Act:
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid/provided by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
h) 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 on its financial position in its standalone financial statements- Note 33(ii) to the standalone financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. (a) The management has represented to us
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 sources or kind of funds) by the company to or in any other person or entity, including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(b) The management has represented to us that, to the best of its knowledge and belief, no funds have been received by the company from any person or entity, 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 our audit procedures that are considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under clause h(iv) subclause (a) and (b) contain any material misstatement.
v. (a) The final dividend paid by the Company during the year in respect of the same declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend.
(b) The Board of Directors of the Company has proposed dividend for the year, which is subject to the approval of the Members at the ensuing Annual General Meeting. The amount of dividend proposed is in accordance with Section 123 of the Act, as applicable.
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 with effect from 1st April, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended 31st March, 2023.
For Singhi & Co.
Chartered Accountants Firm Registration No. - 302049E
Rajiv Singhi
Partner
Place: Kolkata Membership No. - 053518
Date: 15th May, 2023 UDIN - 23053518BGZCFS9720
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