1. Corporate Information:
Archidply Industries Limited (the 'Company') is a public
limited company domiciled in India incorporated under
the provisions of the Companies Act. Its shares are
listed on two recognized stock exchanges in India. The
registered office of the company is at Plot No. 7, Sector-9,
Integrated Industrial Estate, SIDCUL, Pant Nagar, Rudrapur
- 263 153, Uttarakhand, India.
The reportable segments have been identified on the
basis of the products of the Company. Company is
engaged in the business of manufacturing two broad
product segments and one trading product segment, as
follows:
i) Wood Based Products: Plywood & Allied Products.
ii) Paper Based Products: Laminate & Allied Products.
iii) Wood Based Products: Medium Density Fiber board
(MDF)
It has branches and dealers' network spread all over
the country. The Company is procuring raw material &
trading goods locally as well as imports them. Goods are
sold both in domestic and overseas markets.
The company's shares are listed in Bombay Stock
Exchange Ltd. (BSE) and National Stock Exchange of India
(NSE).
2. Basis of preparation of Financial Statements :
The Financial Statements have been prepared in
accordance with Indian Accounting Standards (Ind AS)
as prescribed under Section 133 of the Companies Act
2013 ("the Act"), as notified under the Companies (Indian
Accounting Standard) Rules, 2015 and other relevant
provision of the Act, to the extent applicable and
presentation requirements of Division II of Schedule III to
the Companies Act, 2013, (Ind AS compliant Schedule III),
as applicable to the Standalone Financial Statement.
The financial statements have been prepared under
historical cost convention and on an accrual basis, except
for the following items which have been measured as
required by relevant Ind AS:
a) Financial Instruments classified as fair value through
other comprehensive income.
b) The defined benefit (loss)/profit is recognized as
at the present value of defined benefit obligation
less fair value of plan assets through other
comprehensive income.
Accounting policies have been consistently applied
except where a newly issued accounting standard is
initially adopted or a revision to an existing accounting
standard requires a change in the accounting policy
hitherto in use. The Company's management evaluates
all recently issued or revised accounting standards on an
on-going basis.
For the year ended 31st March, 2025, MCA has not
notified any new standards or amendments to the
existing standards applicable to the Company.
Where changes are made in presentation, the
comparative figures of the previous years are regrouped
and re-arranged accordingly.
3. Accounting Estimates And Assumptions:
The preparation of financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent liabilities at the date of the
financial statements and the results of operations during
the reporting year end. Although these estimates are
based upon management's best knowledge of current
events and actions, actual results could differ from these
estimates.
4. Equity
a) Ordinary Shares
Ordinary shares are classified as Equity Share capital.
Incremental costs directly attributable to the
issuance of new shares and buyback are recognized
as a deduction from equity, net of any tax effects.
b) Capital redemption reserve
As per Companies Act, 2013, capital redemption
reserve is created when company purchases its own
shares out of free reserves or securities premium.
A sum equal to the nominal value of the shares
so purchased is transferred to capital redemption
reserve. The reserve is utilised in accordance with
the provisions of section 69 of the Companies Act,
2013.
c) Securities Premium
The amount received in excess of the par value
of equity shares has been classified as securities
premium.
d) Retained Earnings
Retained earnings represent the amount of
accumulated earnings of the company.
5. Property, Plant and Equipment
OWNED ASSET
a) Property, Plant and Equipment are stated at
original cost (net of tax/ duty credit availed) less
accumulated depreciation and impairment losses
except freehold land which is carried at cost. Cost
includes cost of acquisition, construction and
installation, taxes, duties, freight, other incidental
expenses related to the acquisition, trial run
expenses (net of revenue) and pre-operative
expenses including attributable borrowing costs
incurred during pre-operational period.
b) Subsequent costs are included in the asset's
carrying amount or recognized as a separate asset,
as appropriate, only when it is probable that future
economic benefits associated with the item will
flow to the company and the cost of the item can
be measured reliably. The carrying amount of any
component as a separate asset is derecognized
when replaced. All other repairs and maintenance
are charged to profit and loss during the reporting
period in which they are incurred.
c) Assets which are not ready for their intended use
on reporting date are carried as capital work-in¬
progress at cost, comprising direct cost and related
incidental expenses.
d) On transition to Ind AS, the Company has elected
to continue with the carrying value of all of its
property, plant and equipment as at 1st April 2016
measured as per the previous GAAP and use that
carrying value as the deemed cost of the property,
plant and equipment.
e) Property, Plant and Equipments including
continuous process plants are depreciated and/
or amortized on Straight line Method on the basis
of their useful lives as notified in Schedule II to the
Companies Act, 2013. The assets residual values and
useful lives are reviewed, and adjusted if appropriate,
at the end of each reporting period.
f) Depreciation in respect of additions to assets has
been charged on pro rata basis with reference to
the period when the assets are ready for use. The
provision for depreciation for multiple shifts has
been made in respect of eligible assets on the basis
of operation of respective units.
g) Useful lives of the Property, Plant and Equipment as
notified in Schedule II to the Companies Act, 2013
are as follows :
Buildings - 30 to 60 years
Plant and Equipments (Paper Division) - 15 years
(Triple Shift)
Plant and Equipments (Other Division) - 15 years
(Triple Shift) Furniture and Fixtures - 10 years
Vehicles - 8 to 10 years
Office Equipments - 5 to 10 years
Computers - 3 years
LEASED ASSET (RIGHT OF USE ASSETS)
a) The Company's lease asset classes primarily consist
of leases for Land and Buildings. The Company
assesses whether a contract is or contains a lease, at
the inception of a contract. A contract is, or contains,
a lease if the contract conveys the right to control
the use of an identified asset for a period of time
in exchange for consideration. To assess whether a
contract conveys the right to control the use of an
identified asset, the Company assesses whether:
(i) the contract involves the use of an identified
asset
(ii) the Company has substantially all of the
economic benefits from use of the asset
through the period of the lease and
(iii) the Company has the right to direct the use of
the asset.
b) The right-of-use asset is a lessee's right to use an asset
over the life of a lease. The Company recognizes
a right-of-use asset ('ROU') and a corresponding
lease liability for all lease arrangements in which it
is a lessee, except for short-term leases (defined as
leases with a lease term of 12 months or less) and
leases of low value assets. For these leases of short¬
term and low value assets, the Company recognizes
the lease payments as an operating expense over
the term of the lease.
c) The right-of-use assets are initially recognized at
cost, which comprises the initial amount of the
lease liability adjusted for any lease payments
made (Deposits and Rentals) at or prior to the
commencement date of the lease plus any initial
direct costs less any lease incentives. They are
subsequently measured at cost less accumulated
depreciation and impairment losses, if any. Right-of-
use assets are depreciated from the commencement
date on a straight-line basis over the shorter of the
lease term and useful life of the underlying asset.
6. Lease Property
The Company determines the lease term as the non¬
cancellable period of a lease, together with both periods
covered by an option to extend the lease if the Company
is reasonably certain to exercise that option; and periods
covered by an option to terminate the lease if the
Company is reasonably certain not to exercise that option.
In assessing whether the Company is reasonably certain to
exercise an option to extend a lease, or not to exercise an
option to terminate a lease, it considers all relevant facts
and circumstances that create an economic incentive for
the Company to exercise the option to extend the lease,
or not to exercise the option to terminate the lease. The
Company revises the lease term if there is a change in the
non-cancellable period of a lease.
7. Lease Liabilities
Lease liability is initially measured at the present value of
future lease payments. Lease payments are discounted
using the interest rate implicit in the lease or, if not readily
determinable, using the incremental borrowing rate.
Lease liability is subsequently remeasured by increasing
the carrying amount to reflect interest on the lease
liability and reducing the carrying amount to reflect the
lease payments made.
A lease liability is remeasured upon the occurrence of
certain events such as a change in the lease term or a
change in an index or rate used to determine lease
payments. The remeasurement also adjusts the related
leased assets
8. Intangible Assets
a) Intangible assets acquired by payment e.g., Goodwill
, Trademark and Computer Software are disclosed at
cost less amortization on a straight-line basis over
its estimated useful life.
b) Intangible assets are carried at cost, net of
accumulated amortization and impairment loss, if
any.
c) On transition to Ind AS, the Company has elected
to continue with the carrying value of all of its
intangible assets as at 1st April 2016 measured as
per the previous GAAP and use that carrying value
as the deemed cost of the intangible assets
d) Intangible assets are amortised on straight-line
method as follows :
Goodwill - 20 years
Computer Software - 3 years
Trademark- 10 years
9. Investment Property
Investment Property are stated at original cost less
accumulated depreciation and impairment losses except
freehold land which is carried at cost. Cost includes
cost of acquisition, construction and other incidental
expenses related to the acquisition, trial run expenses
(net of revenue) and pre-operative expenses including
attributable borrowing costs incurred during pre¬
operational period.
Investment properties are derecognised either when they
have been disposed of or when they are permanently
withdrawn from use and no future economic benefit is
expected from their disposal.
10. Impairment of Assets
At each balance sheet date, the Company reviews the
carrying amount of property, plant and equipment to
determine whether there is any indication of impairment
loss. If any such indication exists, the recoverable amount
of the assets is estimated in order to determine the extent
of impairment loss. The recoverable amount is higher of
the net selling price and the value in use, determined by
discounting the estimated future cash flows expected
from the continuing use of the asset to their present
value.
11. Inventories
a) Inventories related to raw materials, packing
materials, stores & spares are valued at cost on
weighted average basis or net realizable value
whichever is lower.
b) Waste & scraps are valued at estimated realizable
value.
c) Materials in transit and Semi Finished goods are
valued at cost or market value which ever is lower.
d) Finished goods and process stock include all cost
of purchases, cost of conversion and other related
costs incurred in bringing the inventories to their
present location and condition.
e) Finished goods are valued at cost or net realizable
value whichever is lower. Net realizable value is the
estimated selling price in the ordinary course of
business less the estimated cost of completion and
the estimated costs necessary to make the sale.
f) Obsolete, defective and unserviceable stocks are
duly provided for.
12. Cash Flow Statement
Cash flows statement are reported using "Indirect
method" as set out in the Ind AS 7 on 'Statement of Cash
Flow', whereby profit before tax is adjusted for the effects
of transactions of a non-cash nature and any deferrals or
accruals of past or future cash receipts or payments. The
cash flow from regular revenue generating, financing and
investing activities of the Company is segregated.
Cash and cash equivalents in the balance sheet comprise
cash at bank, cash/cheques in hand and short term
investments (excluding pledged term deposits) with an
original maturity of less than twelve months.
13. Financial instruments:
A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability or
equity instrument of another entity.
A. Financial Assets
(i) Initial Recognition and Measurement
The Company classifies its financial assets as
those to be measured subsequently at fair value
(either through other comprehensive income, or
through profit or loss) and those to be measured at
amortized cost.
(ii) Subsequent Measurement
For purposes of subsequent measurement, financial
assets are classified in following categories:
(a) Debt instruments measured at amortized cost
using the effective interest rate method and
losses arising from impairment are recognized
in Profit and Loss if both the following
conditions are met:
• The asset is held within a business model
whose objective is to hold assets for collecting
contractual cash flows, and
• Contractual terms of the asset give rise on
specified dates to cash flows that are solely
payments of principal and interest (SPPI) on
the principal amount outstanding.
(b) Equity instruments at fair value through other
comprehensive income.
(c) Equity instruments at fair value through profit
or loss (FVTPL)
(d) Equity Instruments in subsidiaries are carried
at cost, in accordance with option available in
Ind AS 27 "Separate Financial Statements".
(iii) De-Recognition
A financial asset is de-recognized only when the
Company has transferred the rights to receive
cash flows from the financial asset, or when it has
transferred substantially all the risks and rewards of
the asset, or when it has transferred the control of
the asset.
(iv) Impairment of Financial Assets
In accordance with Ind AS 109, the Company
applies Expected Credit Loss (ECL) model for
measurement and recognition of impairment loss
on the Trade receivables or any contractual right
to receive cash or another financial asset that result
from transactions that are within the scope of Ind
AS 11 and Ind AS 18.
The Company follows 'simplified approach' for
recognition of impairment loss allowance on trade
receivables.
The application of simplified approach does not
require the Company to track changes in credit risk.
Rather, it recognises impairment loss allowance
based on lifetime ECL at each reporting date, right
from its initial recognition.
As a practical expedient, the Company uses
historically observed default rates over the expected
life of the trade receivables and is adjusted for
forward-looking estimates to determine impairment
loss allowance on portfolio of its trade receivables.
B. Financial Liabilities:
i) Classification as debt or equity - Debt and equity
instruments are classified as either financial liabilities
or as equity in accordance with the substance of the
contractual arrangement.
ii) Equity instruments - An equity instrument is any
contract that evidences a residual interest in the
assets of an entity after deducting all of its liabilities.
Equity instruments issued by the Company are
recognised at the proceeds received, net of direct
issue costs.
iii) Initial Recognition and Measurement:
All Financials Liabilities are recognized net of
transaction costs incurred.
iv) Subsequent Measurement-
After initial recognition, interest-bearing loans
and borrowings are subsequently measured at
amortised cost using the Effective Interest Rate
("EIR") method. Gains and losses are recognised in
profit or loss when the liabilities are derecognised
through the EIR amortisation process.
v) De-Recognition
All Financials Liabilities are removed from balance
sheet when the obligation specified in the contract
is discharged, cancelled or expired.
When an existing financial liability is replaced by
another from the same lender on substantially
different terms, or the terms of an existing liability
are substantially modified, such an exchange or
modification is treated as the de-recognition of
the original liability and the recognition of a new
liability. The difference in the respective carrying
amounts is recognised in the statement of profit
and loss.
14. Revenue Recognition:
Revenue comprises of all economic benefits that arise in
the ordinary course of activities of the Company which
result in increase in Equity, other than increases relating
to contributions from equity participants. Revenue is
recognized to the extent that it is probable that the
economic benefits will flow to the Company and the
revenue can be reliably measured. Revenue is measured at
the fair value of the consideration received or receivable.
Sale of Goods: As per Ind AS 115 'Revenue from contracts
with customers, Revenue from sale of goods is recognised
when control of the products being sold is transferred
to the customer and when there are no longer any
unfulfilled obligations. The Performance Obligations in
our contracts are fulfilled at the time of dispatch, delivery
or upon formal customer acceptance depending on
terms with customers. The Company derives revenue
principally from sale of Plywood, Laminates, Decorative
Veneers, MDF and Flush Doors. Revenue shown in the
Statement of Profit and Loss are inclusive of the value
of self-consumption, but excludes Goods & Service Tax
(GST), inter-transfers, returns, trade discounts, other
benefits passed to customers in kind.
Services: Revenue from Services is recognized as and
when the services are rendered. The Company collects
Goods & Service Tax on behalf of the government and
therefore, it is not an economic benefit flowing to the
Company and hence excluded from Revenue.
Interest: Interest income is accrued on a time basis, by
reference to the principal outstanding and at the effective
interest rate applicable.
Insurance Claims: Insurance Claims are accounted for on
acceptance and when there is a reasonable certainty of
receiving the same, on grounds of prudence.
Corporate Guarantee Fee: Corporate Guarantee Fee is
accounted for corporate Guarantee given to related
party's Banker for their business use. Such revenue
is recognised in the accounting period in which the
services are rendered in accordance with agreement with
the parties.
15. Government grants
Government grants are recognized where there is
reasonable assurance that the grant will be received
and all attached conditions will be complied with. When
the grant relates to an expense item, it is recognized as
income on a systematic basis over the periods that the
related costs, for which it is intended to compensate,
are expensed. When the grant relates to an asset, it
is recognized as income in equal amounts over the
expected useful life of the related asset.
When the Company receives grants of non-monetary
assets, the asset and the grant are recorded at fair value
amounts and released to profit or loss over the expected
useful life in a pattern of consumption of the benefit of
the underlying asset i.e. by equal annual installments.
16. Foreign Currency Transactions:
The Company's financial statements are presented
in Indian Rupees ('INR'), which is also the Company's
functional currency.
Foreign currency transactions are recorded on initial
recognition in the functional currency, using the exchange
rate at the date of the transaction. At each balance sheet
date, foreign currency monetary items are reported using
the closing exchange rate. Exchange differences that arise
on settlement of monetary items or on reporting at each
balance sheet date of the Company's monetary items at
the closing rate are recognised as income or expenses in
the period in which they arise.
Non-monetary items which are carried at historical
cost denominated in a foreign currency are reported
using the exchange rate at the date of the transaction.
Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rate at the
date when the fair value is determined.
17. Employee Benefits:
Short-term employee benefits are recognized as an
expense at the undiscounted amount in the Statement
of Profit and Loss of the year in which the related service
is rendered.
Post Employment and Retirement benefits in the form
of Gratuity and Leave Encashment are considered as
defined benefit obligations and is provided for on the
basis of third party actuarial valuation, using the projected
unit credit method, as at the date of the Balance Sheet.
Every Employee who has completed five years or more of
service is entitled to Gratuity on terms not less favorable
than the provisions of The Payment of Gratuity Act, 1972.
The present value of the defined benefit obligation is
determined by discounting the estimated future cash
outflows by reference to market yields at the end of
reporting period on government bonds that have terms
approximating to the terms of the related obligation
Re-measurement gains and losses arising from experience
adjustments and changes in acturial assumptions of the
defined benefit obligation are recognised in the period
in which they occur, directly in other comprehensive
income. They are included in retained earnings in the
statement of changes in equity and in the balance sheet.
Employee benefits in the form of Provident Fund
is considered as defined contribution plan and the
contributions to Employees' Provident Fund Organisation
established under The Employees' Provident Fund
and Miscellaneous Provisions Act 1952 is charged to
the Statement of Profit and Loss of the year when the
contributions to the respective funds are due. The
Company pays provident fund contributions to publicly
administered provident funds as per local regulations.
The Company has no further payment obligations once
the contributions have been paid.
18. Borrowing Costs:
Borrowing costs are interest and other costs (including
exchange differences relating to foreign currency
borrowings to the extent that they are regarded as an
adjustment to interest costs) incurred in connection with
the borrowing of funds.
General and specific borrowing costs that are directly
attributable to the acquisition or construction of
qualifying assets are capitalised as part of the cost of
such assets during the period of time that is required to
complete and prepare the asset for its intended use. A
qualifying asset is one that takes necessarily substantial
period of time to get ready for its intended use.
All other borrowing costs are expensed in the period in
which they are incurred.
19. Accounting for Taxes on Income:
Tax expenses comprise of current tax and deferred tax
including applicable surcharge and cess.
Current Income tax is computed using the tax effect
accounting method, where taxes are accrued in the
same period in which the related revenue and expenses
arise. A provision is made for income tax annually, based
on the tax liability computed, after considering tax
allowances and exemptions. Provisions are recorded
when it is estimated that a liability due to disallowances
or other matters is probable.
Deferred tax is provided using the balance sheet
approach on temporary differences at the reporting date
between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes at the
reporting date. Deferred tax liabilities are recognised for
all taxable temporary differences. Deferred tax assets are
recognised for all deductible temporary differences, the
carry forward of unused tax credits and any unused tax
losses. Deferred tax assets are recognized to the extent
that it is probable that taxable profits against which the
deductible temporary differences, and the carry forward
unused tax credits and unused tax losses can be utilised.
Deferred tax is recognised in the statement of profit
and loss, except to the extent that it relates to items
recognized in other comprehensive income. As such,
deferred tax is also recognised in other comprehensive
income.
Deferred Tax Assets and Deferred Tax Liabilities are offset,
if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the Deferred
Tax Assets and Deferred Tax Liabilities relate to taxes on
income levied by same governing taxation laws.
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