GREENPLY MIDDLE EAST LIMITED
AND ITS SUBSIDIARY
Consolidated Financial Statements
31 March 2020
GREENPLY MIDDLE EAST LIMITED AND ITS SUBSIDIARY
Consolidated Financial Statements
31 March 2020
CONTENTS PAGES
Directors’ Report 1 – 2
Independent Auditors’ Report 3 – 4
Consolidated Statement of Financial Position 5
Consolidated Statement of Profit or Loss and Other Comprehensive Income 6
Consolidated Statement of Changes in Equity 7
Consolidated Statement of Cash Flows 8
Notes to the Consolidated Financial Statements 9 – 22
PAGE 1
GREENPLY MIDDLE EAST LIMITED AND ITS SUBSIDIARY
Directors’ Report
The directors submit their report, along with the audited consolidated financial statements, for the year
ended 31 March 2020.
Results and appropriations
The results of the group and the appropriations made for the year ended 31 March 2020 are set out on
pages 6 and 7 of the consolidated financial statements.
In our opinion, the consolidated financial statements set out on pages 5 to 22 are drawn up so as to give a
true and fair view of the financial position of the group as at 31 March 2020 and the financial performance, changes in equity and cash flows of the group for the year then ended in accordance with
International Financial Reporting Standards.
At the date of the statement, there are reasonable grounds to believe that the group will be able to pay its
debts as and when they fall due.
Review of the business
Greenply Middle East Limited is the 100% subsidiary of Greenply Industries Limited, a public Listed
Company in India and it has a 100% Subsidiary Greenply Gabon SA. The Subsidiary is a manufacturer of Wood Veneer and Sawn Timber and also does trading of Round Logs, Veneer and Sawn Timber. During
2019-20, the Subsidiary has also started two additional big Peeling lines which made it capable of catering
to the European Markets and the requirements of South East Asian Markets. The Company’s marketing
efforts in South East Asia through its Representative office in Malaysia also led to increase in the sales to
Malaysia, Indonesia, Philippines, Taiwan etc. This has widened the market reach of the Company and in
spite of a slowdown in the Indian market the Company was able to increase its Sales in the European and
South East Asian Markets. Even during the Covid Lockdown, the Company continued to operate and
cater to the markets which were not under Lockdown.
Events since the end of the year
In view of pandemic relating to COVID-19, the group has considered internal and external information
available up to the date of approval of these consolidated financial results and has performed analysis
based on current estimates in assessing the recoverability of its assets including trade receivables, inventories and investments, other financial and non-financial assets, for possible impact on these
consolidated financial results. The group has also assessed the impact of this whole situation on its capital
and financial resources, profitability, liquidity position, etc. On the basis of its present assessment and
current indicators of future economic conditions, the group expects to recover the carrying amounts of
these assets and does not anticipate any material impact on these consolidated financial results. However,
the impact assessment of COVID-19 is a continuing process, given the uncertainties associated with its nature and duration. The group will continue to monitor any material changes to future economic
conditions and the consequent impact on its business, if any.
Directors
The directors who served during the year were as follows:
Mr. Rajesh Mittal
Mr. Sudeep Jain
GREENPLY MIDDLEEAST LIMITED AND ITS SUBSIDIARY
Notes to the consolidated financial statements for the year ended on 31 March 2020.
1. Legal status and activity
2. Basis of preparation
Statement of compliance
Basis of measurement
Functional and presentation currency
Basis of consolidation
% of % of
Ownership Ownership
Name of entity Country of Relation Activity 2020 2019
Incorporation
Greenply Gabon S.A. Republic of Gabon Subsidiary The principal activity of the company
is manufacturing of wood veneer,
lumber and panel.
100% 100%
Use of estimates and judgments
Application of new and revised International Financial Reporting Standards (IFRS)
The preparation of the consolidated financial statements requires management to make estimates and assumptions that may affect the
reported amount of financial assets and liabilities, revenue, expenses, disclosure of contingent liabilities and the resultant provisions and fair
values. Such estimates are necessarily based on assumptions about the several factors and actual results may differ from reported amounts.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in
which the estimate is revised and in any future periods affected. The areas involving a higher degree of judgment or complexity, or areas
where assumptions and estimates are significant to the consolidated financial statements is disclosed in note 4.
The group has adopted IFRS 16 – Leases which is effective for annual periods beginning on or after 1 April 2019:
IFRS 16 supersedes IAS 17 Leases and related interpretations. The standard sets out the principles for the recognition, measurement,
presentation, and disclosure of leases and requires lessees to account for most leases under a single on-balance sheet model. Lessor
accounting under IFRS 16 is substantially unchanged from IAS 17. Lessors will continue to classify leases as either operating or finance
leases using similar principles as in IAS 17. Therefore, IFRS 16 did not have an impact for leases where the company is the lessor. The group
elected to use the transition practical expedient allowing the standard to be applied only to contracts that were previously identified as leases
applying IAS 17 and IFRIC 4 at the date of initial application. The group also elected to use the recognition exemptions for lease contracts that,
at the commencement date, have a lease term of 12 months or less and do not contain a purchase option (‘short term leases’), and lease
contracts for which the underlying asset is of low value (‘low-value assets’).
The adoption of this new standard has no impact on the group’s consolidated financial statements. Further, the group has not early adopted
any other standard, interpretation or amendment that has been issued but are not yet effective.
GREENPLY MIDDLE EAST LIMITED (the “company”) is a private limited liability company incorporated as per the laws of Jebel Ali Free Zone
Authority Offshore Companies Regulations. The registered address of the company is BB11, Bay Square, Business Bay, P. O. Box 118767,
Dubai, United Arab Emirates.
GREENPLY MIDDLE EAST LIMITED has carried out the activity of third port trading in wood veneer during the year.
The consolidated financial statements comprise the financial statements of the company and its subsidiary as at 31 March 2020. This control
is evidenced when the company owns, either directly or indirectly, more than 50% of the voting rights of a company and is able to govern the
financial and operating policies of an enterprise so as to benefit from its activities. All intra-group balances, transactions, income and expenses
and profits and losses resulting from intra-group transactions are eliminated. The company and its subsidiary form the “Group”. The extent of
company’s shareholding and the principal activity of the subsidiary are set out below:
The company is a subsidiary of GREENPLY INDUSTRIES LIMITED, India, which is a public limited company registered under Indian
Companies Act 1956 and is listed on National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). It is engaged in the business of
manufacturing plywood, medium density fiber boards and allied products.
The company has a representative office located in Malaysia
The consolidated financial statements have been prepared under accrual basis of accounting and on the basis that the group will continue as a
going concern in accordance with International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards
Board (IASB) and interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC).
The consolidated financial statements have been prepared on historical cost basis.
The consolidated financial statements are prepared in US Dollars (USD), being the functional and presentation currency of the group.
GREENPLY MIDDLEEAST LIMITED AND ITS SUBSIDIARY
Notes to the consolidated financial statements for the year ended on 31 March 2020.
2A. Summary of significant accounting policies
Property, plant and equipment
Factory land and building 5 – 20 years
Electrical installation 10 years
Plant and machinery 5 – 10 years
Motor vehicle 5 years
Furniture and fixtures 5 – 10 years
Office equipment 3 – 4 years
Inventories
Financial instruments
Financial assets
Trade receivables
Other current financial assets
Cash and cash equivalents
Cash and bank balance in the consolidated statement of financial position comprise cash and bank balance in call and current accounts that
are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value.
Cash and cash equivalents for the purpose of the consolidated statement of cash flows comprise cash and bank balance in current accounts
net of outstanding overdrafts as they are considered an integral part of the group’s cash management.
Assessment of net realizable value is made at each subsequent reporting date. When the circumstances that previously caused inventories to
be written down below cost no longer exist or when there is clear evidence of an increase in net realizable value because of changed
economic circumstances, the amount of the write-down is reversed.
Financial assets and financial liabilities are recognized when, and only when, the group becomes a party to the contractual provisions of the
instrument. Financial assets are de-recognized when, and only when, the contractual rights to receive cash flows expire or when substantially
all the risks and rewards of ownership have been transferred. Financial liabilities are de-recognized when, and only when, they are
extinguished, cancelled or expired.
The financial assets comprise trade and other receivables and cash and bank balance.
Trade receivables are stated at original invoice amount less a provision for any uncollectible amount. An estimate for doubtful debts is made
when collection of the full amount is no longer probable and provided for in the accounts. Bad debts are written off when there is no possibility
of recovery.
Other current financial asset represents refundable deposits and advance to others.
Property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is
calculated to write off cost of items of property, plant and equipment less their estimated residual value using straight-line method over their
estimated useful life as follows:
Inventories which comprise raw materials, work-in-progress, finished goods, stock-in-trade, packing materials, stores and spares are
measured at the lower of cost and net realizable value. The cost of inventories is ascertained on the 'weighted average' basis. Cost comprise
direct materials and, where applicable, direct labor costs and those overheads that have been incurred in bringing the inventories to their
present location and condition.
Raw materials, components and other supplies held for use in the production of finished products are not written down below cost except in
cases where material prices have declined and it is estimated that the cost of the finished products will exceed their net realizable value. The
comparison of cost and net realizable value is made on an item-by-item basis.
The net realizable value of work-in-progress is determined with reference to the selling prices of related finished products.
In the case of manufactured inventories and work-in-progress, cost includes an appropriate share of fixed production overheads based on
normal operating capacity. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of
completion and the estimated costs necessary to make the sale.
The accounting policies, which are consistent with those used in the previous year, except for new standards effective on 1 April 2019, in
dealing with items that are considered material in relation to the consolidated financial statements are as follows.
GREENPLY MIDDLEEAST LIMITED AND ITS SUBSIDIARY
Notes to the consolidated financial statements for the year ended on 31 March 2020.
Impairment of financial assets
Financial liabilities
Borrowings
Bank overdraft
Trade and other payables
Revenue recognition
Sale of products
Insurance claim
Interest income
Foreign currency transactions
2B
2B.1 Significant judgment employed
Impairment of non-financial assets
Transactions in foreign currencies other than US Dollars are converted into US Dollars at the rate of exchange ruling as on the date of the
transaction.
Assets and liabilities expressed in currencies other than US Dollars are translated into US Dollars at the rate of exchange ruling on the date of
the consolidated statement of financial position. Resulting gain or loss is taken to the consolidated statement of profit or loss and other
comprehensive income
Significant judgment employed in applying accounting policies and key sources of estimation uncertainty
The significant judgment made in applying accounting policies that has the most significant effect on the amounts recognized in the
consolidated financial statements is as follows:
The group assesses whether there are any indicators of impairment for all non-financial assets at each reporting date. If any of such indication
exists, the group estimates the asset’s recoverable amount which is the higher of fair value less costs to sell and value in use. When value in
use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash-generating unit and
choose a suitable discount rate in order to calculate the present value of those cash flows. Other non-financial assets are tested for
impairment when there are indicators that the carrying amounts may not be recoverable.
Bank overdraft is classified as current liability unless the group has an unconditional right to defer settlement of the liability for at least 12
months after the reporting period.
Liabilities are recognized for amounts to be paid in future for goods or services received, whether invoiced by the supplier or not.
The group derives revenue principally from sale of Veneer, Sawn timber, Timber Logs. Revenue from the sale of goods is recognized when
the significant risks and rewards of ownership have been transferred to the buyer. No revenue is recognized if there are significant
uncertainties regarding recovery of the amount due, associated costs or the possible return of goods. Provisions for discounts and rate
difference are estimated and provided for in the year of sales and recorded as reduction of revenue.
Insurance claim due to uncertainty in realization are accounted for on acceptance basis.
Revenue from interest income is recognized on accrual basis using the effective interest rate method.
For trade receivables, the group applies a simplified approach in calculating ECLs. Therefore, the group doesn’t track changes in credit risk,
but instead recognizes a loss allowance based on Lifetime ECLs at each reporting date. Loss allowance is based on the group’s historical
credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
The financial liabilities comprise trade and other payables, working capital loan, term loan and bank overdraft.
Borrowings are initially recognized at proceeds received and are subsequently measured at amortized cost using effective interest method.
Finance charges, including interest payable on settlement are accounted for in the consolidated statement of profit or loss and other
comprehensive income using effective interest method.
Borrowings are removed from the consolidated statement of financial position when the obligation specified in the contract is discharged,
cancelled or expired. Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the
liability for at least 12 months after reporting period.
Bank overdraft is recognized initially at fair value, net of transaction costs incurred. Bank overdraft are removed from the consolidated
statement of financial position when the obligation specified in the contract is discharged, cancelled or expired.
The group recognizes an allowance for expected credit losses (ECLs) on its financial assets. ECLs are required to be measured through a
loss allowance at an amount equal to:
12-month ECL, which represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are
possible within 12 months after the reporting date.
Lifetime ECL, which represents the expected credit losses that will result from all possible default events over the expected life of a financial
instrument.
GREENPLY MIDDLEEAST LIMITED AND ITS SUBSIDIARY
Notes to the consolidated financial statements for the year ended on 31 March 2020.
Significant increase in credit risk
2B.2 Key sources of estimation uncertainty
Useful lives of assets
Inventory provision
Impairment of trade and other receivables
The loss allowance for trade and other receivables are based on assumptions about risk of default and expected credit loss rates. The group
uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the group’s past history, existing
market conditions as well as forward-looking estimates at the end of each reporting period.
Any difference between the amounts actually collected in the future period and the amounts expected, will be recognized in the group’s
consolidated statement of profit or loss in that period. As at date of consolidated statement of financial position, management believes that the
recoverability of its trade and other receivables are certain, accordingly, the provision provided in the previous years are adequate.
ECL are measured as an allowance equal to 12-month ECL for stage 1 assets, or lifetime ECL assets for stage 2 or stage 3 assets. An asset
moves to stage 2 when its credit risk has increased significantly since initial recognition. IFRS 9 does not define what constitutes a significant
increase in credit risk. In assessing whether the credit risk of an asset has significantly increased the group takes into account qualitative and
quantitative reasonable and supportable forward-looking information.
As at date of consolidated statement of financial position, management believes that the recoverability of its long-term loans are certain,
accordingly, no expected credit losses are recognized.
Key assumptions made concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk
of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are as under:
The useful lives of the group’s assets with definite life are estimated based on the period over which the assets are expected to be available
for use. The estimated useful lives of group’s property, plant and equipment are reviewed periodically and are updated if expectations differ
from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limits on the use of the
group’s assets. In addition, the estimation of the useful lives is based on the group’s collective assessment of industry practice, internal
technical evaluation and experience with similar assets.
Management regularly undertakes a review of the group’s inventory in order to assess the likely realization proceeds, taking into account
purchase and replacement prices, age, likely obsolescence, the rate at which goods are being sold and the physical damage. Based on the
assessment assumptions are made as to the level of provisioning required.
GREENPLY MIDDLEEAST LIMITED AND ITS SUBSIDIARY
Notes to the consolidated financial statements for the year ended 31 March 2020
( Amount in USD )
3. Property, plant and equipment
(a) Reconciliation of carrying amount
Freehold land Buildings Plant and
Machinery
Electrical
Installation
Furniture and
fixtures
Office
equipment
Computer
equipment Vehicles Heavy Vehicles Total
Cost (Gross carrying amount)
Balance at 1 April 2019 7,104,701 2,840,869 894,587 364,867 91,997 1,833 16,817 275,304 1,346,169 12,937,144
Additions 268,359 1,584,438 1,735,029 144,059 62,272 3,424 3,222 9,007 136,476 3,946,286
Disposals/ discard
Exchange differences on translation of
foreign operations
(121,982) (61,254) (29,731) (7,365) (1,943) (60) (290) (4,715) (23,835) (251,175)
Balance at 31 March 2020 7,251,078 4,364,053 2,599,885 501,561 152,326 5,197 19,749 279,596 1,458,810 16,632,255
Accumulated depreciation
Balance at 1 April 2019 - 232,494 135,852 73,083 15,933 169 4,652 69,238 346,108 877,529
Depreciation for the year - 208,548 147,695 43,251 14,720 1,139 4,832 58,352 172,272 650,809
Adjustments/ disposals - - - - - - - - - -
Exchange differences on translation of
foreign operations
- (5,679) (3,536) (1,597) (391) (12) (104) (1,660) (7,288) (20,267)
Balance at 31 March 2020 - 435,363 280,011 114,737 30,262 1,296 9,380 125,930 511,092 1,508,071
Carrying amounts (net)
At 31 March 2019 7,104,701 2,608,375 758,735 291,784 76,064 1,664 12,165 206,066 1,000,061 12,059,615
At 31 March 2020 7,251,078 3,928,690 2,319,874 386,824 122,064 3,901 10,369 153,666 947,718 15,124,184
-
4. Capital work-in-progress^
31-Mar-20 31-Mar-19
At the beginning of the year 1,671,471 -
Additions during the year 25,295 1,718,471
Capitalised/ transfer during the year (1,522,664) -
Exchange differences on translation of
foreign operations
(15,517) (47,000)
At the end of the year 158,585 1,671,471
-
5. Other intangible assets
(a) Reconciliation of carrying amount
Computer
Software Total
Cost (Gross carrying amount)
Balance at 1 April 2019 12,466 12,466
Additions - -
Disposals/ discard - -
Exchange differences on translation of foreign operations (210) (210)
Balance at 31 March 2020 12,256 12,256
Accumulated amortisation
Balance at 1 April 2019 12,191 12,191
Amortisation for the year 258 258
Adjustments/ disposals - -
Exchange differences on translation of foreign operations (208) (208)
Balance at 31 March 2020 12,241 12,241
Carrying amounts (net)
At 31 March 2019 275 275
At 31 March 2020 15 15
GREENPLY MIDDLEEAST LIMITED AND ITS SUBSIDIARY
Notes to the consolidated financial statements for the year ended 31 March 2020 (continued)
(Amount in USD )
6. Loans 31 March 2020 31 March 2019
(Unsecured, considered good)
Security Deposit 44,006 39,487
44,006 39,487
7. Other non - current assets
(Unsecured, considered good)
Capital Advances 1,066,288 589,183
1,066,288 589,183
8. Inventories
Raw materials 587,478 442,015
Work-in-progress 329,752 -
Finished goods 1,966,174 614,396
Stock in transit 1,237,909 2,877,881
Stores and spares 400,137 158,961
4,521,450 4,093,253
9. Trade receivables
Current
Unsecured, Considered good
Trade receivables* 6,853,926 4,289,492
6,853,926 4,289,492
Total <30 Days 31-60 Days 61-120 Ddays
US $ US $ US $ US $
Outstanding 6,853,926 3,678,404 853,916 708,230
Recoveries (2,614,429) (1,834,097) (332,683) (105,782)
Net outstanding 4,239,497 1,844,307 521,233 602,448
121-180 Days 181-365 Days More than 365 days
US $ US $ US $
Outstanding 711,640 847,212 54,524
Recoveries (206,202) (132,958) (2,707)
Net outstanding 505,438 714,254 51,817
Location 2020 2019
(%) (%)
Bangladesh - 0.36%
China 0.56% 0.66%
Cyprus 0.09% -
France 5.03% -
Gabon 9.37% 18.28%
Greece 2.56% -
Holland - 0.17%
Hong Kong - 0.23%
India 50.55% 63.19%
Indonesia 3.74% 0.29%
Israel 0.31% 0.65%
ITALY 1.99% 0.06%
JAPAN 0.99% -
Kenya 0.16% -
Malaysia 5.43% 0.70%
Nepal - 0.60%
New Zealand 0.29% -
OMAN 0.30% 0.17%
Philippines 3.47% 8.46%
Portugal 0.18% -
Saudi Arabia 0.24% -
Singapore 0.32% -
Spain 8.15% 1.82%
Sri Lanka 0.48% 0.86%
TAIWAN 1.19% -
THAILAND 0.37% 0.71%
U K 0.19% -
UAE 2.88% 1.93%
USA 0.06% -
Vietnam 1.09% 0.86%
100% 100%
The group’s average credit period is 0-180 days after which trade receivables are considered to be past due. Unimpaired receivables are expected, on
the basis of past experience, to be fully recoverable.
Since the date of statement of financial position, the group has recovered USD 2,614,429 from trade receivables.
Geographical concentration of trade receivables as at 31 March 2020 was as follows:
*Trade receivables include USD 401,864 (31 March,2019 : USD 1,058,341) due from related parties on trade account. stated amount net of bills
discounted of USD 1,176,521 ( 31 March,2019 : USD 2,326,324) with banks without recource.
GREENPLY MIDDLEEAST LIMITED AND ITS SUBSIDIARY
Notes to the consolidated financial statements for the year ended 31 March 2020 (continued)
(Amount in USD )
10. Cash and cash equivalents 31 March 2020 31 March 2019
Cash on hand 40,346 6,297
Balances with banks
- On current accounts 28,919 321,829
- On call accounts - 11,098
69,265 339,224
11. Other financial assets
(Unsecured, considered good)
Current
TVA Receivable 52,592 -
52,592 -
12. Other current assets
(Unsecured, considered good)
Advances to Others 1,749 82,928
Advances to employees 21,206 -
Advances to Suppliers 493,051 885,537
Prepaid expenses 59,535 -
575,541 968,465
13. Equity share capital
Authorised
220 (31March 2019 : 220 ) equity shares of AED 100,000 each 5,994,550 5,994,550
(converted @ 1 USD = AED 3.67)
Issued, subscribed and fully Paid- up
100 (31March 2019 : 220) equity shares of AED 100,000 each 2,724,796 2,724,796
(converted @ 1 USD = AED 3.67)
2,724,796 2,724,796
Number Amount Number Amount
Balance at the beginning and at the end of the
Period 100 2,724,796 100 2,724,796
(b) Particulars of shareholders holding more than 5% shares of fully paid up equity shares
Equity shares of AED 100,000 each Number % Number %
Greenply Industries Limited 100 100% 100 100%
14. Other equity 31 March 2020 31 March 2019
Retained earnings
At the commencement of the year 870,606 (1,104,860)
Add: Profit for the year 2,099,902 1,975,466
2,970,508 870,606
Other comprehensive income (OCI)
At the commencement of the year 1,564 318,464 (103,302) (316,900)
(101,738) 1,564
2,868,770 872,170
Exchange differences in translating financial statements of foreign
subsidiary
(a) Reconciliation of equity shares outstanding at the beginning and at the end of the reporting period
31 March 2020 31 March 2019
31 March 2020 31 March 2019
GREENPLY MIDDLEEAST LIMITED AND ITS SUBSIDIARY
Notes to the consolidated financial statements for the year ended 31 March 2020 (continued)
(Amount in USD )
15 Borrowings 31 March 2020 31 March 2019
Non-current borrowings
Secured
Term loans
From banks
Foreign currency loans 6,711,900 8,612,172
Less: Current maturities of non-current borrowings (refer note 16) 2,181,800 2,207,779
4,530,100 6,404,393
Unsecured
From Related Party 2,800,000 3,200,000
2,800,000 3,200,000
7,330,100 9,604,393
Current borrowingsSecured
From banks
US $ Loan - WCL 2,800,000 2,800,000
US $ Loan - Overdraft 3,390,754 2,340,605
XAF Loan - Overdraft 2,367,361 -
Unsecured
Bank Overdrawn 475 -
8,558,590 5,140,605
Terms of Repayment & Security
16. Other financial liabilities 31 March 2020 31 March 2019
Current
Current maturities of non current borrowings (refer note 15) 2,181,800 2,207,779
Liability for capital goods 865,694 1,588,139
Interest payable to parent shareholder company 48,829 63,139
Interest Payable to Banks 91,587 -
Commission on SBLC payable 44,431 59,295
Accruals & provisions 90,711 366,905
3,323,052 4,285,257
17. Trade payables
Trade Payables 3,354,418 1,314,461
3,354,418 1,314,461
c) Working Capital Loan USD 2,800,000 ( 31 March 2019 : USD 2,800,000) from Axis Bank is secured against irrecovable and unconditional standby
letter of credit issued by Axis Bank, kolkata branch,India on request of Greenply Industries Ltd, India in favour of Axis Bank, DIFC Branch, Dubai,
U.A.E.This overseas bank Loan repayble on demand and bearing interest rate 3 months libor plus 225 bps p.a.
d) Bank Overdraft USD 3,390,754 (31 March 2019 : USD 2,340,606) from Citi Bank is secured against irrecovable and unconditional standby letter of
credit issued by Citi Bank, N.A., Kolkata Branch,India on request of Greenply Industries Ltd, India in favour of Citi Bank N.A.,Dubai Branch,U.A.E. This
overseas bank Loan repayble on demand and bearing interest rate 1 month libor plus 275 bps p.a.
(b) Term Loan USD 2,164,500 (31 March,2019 : USD 2,830,500) from Axis Bank is secured against irrecovable and unconditional standby letter of credit
issued by Axis Bank, kolkata branch,India on request of Greenply Industries Ltd, India in favour of Axis Bank, DIFC Branch, Dubai, U.A.E.This overseas
Bank Loan repayble in 20 equal instalments of USD 166,500 per quarter from the date of disbursement and bearing interest rate 3 months libor plus 275
bps p.a.
(a) Term Loan Euro 4,125,000 (31 March,2019 : Euro 5,156,250 ) from Exim Bank is secured against i) exclusive charge on the movable project assets
including current assets, both present & future of the company (GGSA) at Gabon,ii) Pledge of 100% shares of Greenply Gabon SA held by Greenply
middleeast Ltd, iii) Unconditional & Irrevocable Corporate Guarantee of Greenply Industries Ltd. This overseas Bank Loan repayble in 16 equal
instalments of EURO 343,750 per quarter from the date of disbursement and bearing interest rate 3 months euribor plus 325 bps p.a.
f) Unsecured loan from related party i.e. parent shareholder company and bearing interest rate 12 months libor plus 500 bps p.a.
e) Bank Overdraft USD 2,367,361 (31 March 2019 : USD NIL) from BGFI Bank is guaranteed by (i) an irrevocable domiciliation of receipts up to 60% of
turnover (ii) a pledge of goodwill. This bank Loan repayble on demand and bearing interest rate 9 % p.a.
GREENPLY MIDDLEEAST LIMITED AND ITS SUBSIDIARY
Notes to the consolidated financial statements for the year ended 31 March 2020 (continued)
(Amount in USD )
18. Other current liabilities 31 March 2020 31 March 2019
Statutory dues 40,023 11,075
Advance from customers 80,740 97,708
Advance from customers - related party 185,363 -
306,126 108,783
Year ended Year ended
19. Revenue from operations 31 March 2020 31 March 2019
Sale of products
Veneer Sales 21,748,389 16,859,952
Sawn Timber Sales 1,764,106 1,772,986
Logs Sales 2,107,851 3,520,729
Other Sales - 519
25,620,346 22,154,186
Revenue by geography:
- India 12,950,957 13,998,624
- Outside India 12,669,389 8,155,562
25,620,346 22,154,186
- -
20. Other income
Interest received 15,483 32
Insurance claim received 6,751 -
Rent Received 4,572 -
Misc. Income 2,347 43,830
29,153 43,862
21. Cost of materials consumed
Inventory of raw materials at the beginning of the
year454,445 899,156
Add: Purchases 11,222,880 8,711,414
Less: Inventory of raw materials at the end of the
year
587,478 454,445
11,089,847 9,156,125
22. Purchase of stock in trade
Purchase of stock-in-trade 2,262,087 3,258,631
2,262,087 3,258,631
23. Changes in inventories of finished goods,
work-in-progress and stock in trade
Opening inventories
Finished goods 631,673 1,055,247
Work-in-progress - -
Stock in trade 2,877,881 425,897
3,509,554 1,481,144
Closing inventories
Finished goods 1,966,174 631,673
Work-in-progress 329,752 -
Stock in trade 1,237,909 2,877,881
3,533,835 3,509,554
Effect of Foreign Exchange Fluctuations (42,043) -
(66,324) (2,028,410)
24. Employees benefits expense
Director's remuneration 110,406 49,108
Salaries,Wages and Bonus 1,628,998 768,073
Contractor’s Wages 403,773 1,343,457
Contribution to Employee benefit funds 124,103 31,989
Staff Welfare Expenses 155,716 52,272
2,422,996 2,244,899
GREENPLY MIDDLEEAST LIMITED AND ITS SUBSIDIARY
Notes to the consolidated financial statements for the year ended 31 March 2020 (continued)
(Amount in USD )
Year ended Year ended
25. Finance costs 31 March 2020 31 March 2019
Interest on Loan - related party 213,470 257,922
Interest on Loan - Bank 298,514 432,399
Interest on bills discounting 66,483 27,958
Interest on bank overdraft 180,965 86,869
Guarantee Commission to related party 252,567 240,944
Loan Processing Fees 7,564 -
1,019,563 1,046,092
26. Depreciation and amortisation expense
Depreciation 650,809 523,460
Amortisation 258 7,315
651,067 530,775
27. Other expenses
Consumption of stores and spares 269,135 366,779
Job Work Charges 428,705 493,340
Power and fuel 131,580 95,927
Water Expense 6,915 9,392
Electric Expenses 12,586 8,703
Rent 35,734 28,506
Repairs & Maintenance 105,124 127,504
Insurance 96,733 67,139
Rates and taxes 198,644 6,610
Security Expenses 64,731 51,435
Legal & Professional 168,992 137,366
Accounting Charges 90,000 -
Auditor Remuneration 45,175 26,138
Travelling Exps (Foreign) 140,409 71,199
Travelling & Conveyance Expenses 65,545 18,188
Freight Outward 28,988 26,481
Transport charges 2,480 5,657
CHA Charges 2,478,302 1,881,966
Export Expenses 1,150,652 1,506,637
Pallet Expenses 96,233 87,712
Warehouse Expenses - 32,236
Sales Promotion Expenses 18,962 28,803
Printing & Stationery 3,914 4,719
Postage & Telegram 7,186 6,986
Telephone & Internet 21,885 23,076
Commission Charges 50,042 44,927
Bank Charges 125,236 99,901
Foreign exchange fluctuations(net) 140,974 568,500
Vehicles expenses 46,144 21,693
Visa & Immigration Expenses 71,202 52,829
Entertainment Expenses 24,671 12,264
Plantation at Site Expenses 1,034 7,625
General Expenses 2,052 4,290
Office Expenses 1,917 4,790
Guest House Expenses 27,817 34,479
Loading & Unloading Expenses 847 8,203
Miscellaneous expenses 9,815 42,470
6,170,361 6,014,470
GREENPLY MIDDLEEAST LIMITED AND ITS SUBSIDIARY
Notes to the consolidated financial statements for the year ended 31 March 2020 (continued)
(Amount in USD )
28. Cash and cash equivalents 31 March 2020 31 March 2019
(for the purpose of consolidated statement of cash flows)
Cash on Hand 40,346 6,297
Balances with banks
- On current accounts 28,919 321,829
- On call accounts - 11,098
69,265 339,224
Bank Overdraft (5,758,115) (2,340,605)
Bank Overdrawn (475) -
(5,689,325) (2,001,381)
29. Related party disclosure
a) Related parties with whom transactions have taken place during the year.
i) Greenply Industries Limited, Parent Shareholder Company
ii) Greenply Alkemal (Singapore) PTE Ltd, Joint Venture of Fellow Subsidiary
iii) Mr. Rajesh Mittal , Key management personnel
iv) Mr. Sudeep Jain , Key management personnel
b) Related party transactions
Year ended Year ended
31 March 2020 31 March 2019
Name of the related party Nature of transaction
Greenply Industries Limited Sales 4,248,311 3,807,264
Loan received/ (repaid) (400,000) 700,000 Interest expense 213,470 257,922
Commission expense 252,567 240,944
Purchase of Machinery/ Stores &Spares 223,800 -
Greenply Alkemal (Singapore) PTE Ltd Advances received 200,000 -
Mr. Sudeep Jain Director's remuneration 110,406 49,108
C) Outstanding balances Dr/ (Cr) Dr/ (Cr)
Name of the related party Nature of transaction
Greenply Industries Limited Trade Receivable^ 4,01,864 1,058,341
Loan Account (2,800,000) (3,200,000)
Interest payable (48,829) (63,139)
Commission payable (59,547) (59,295)
Purchase of Machinery/ Stores & Spares 38,091 -
Greenply Alkemal (Singapore) PTE Ltd Advance from Customer (185,363) -
30. Earnings per share Year ended Year ended
31/Mar/20 31/Mar/19
USD USD
Basic and diluted earnings per share
(i) Profit for the year, attributable to the equity
shareholders 2,099,902 1,975,466
(ii) Weighted average number of equity shares
- Number of equity shares at the beginning of the
year 100 100
- Number of equity shares at the end of the year100 100
Weighted average number of equity shares 100 100
Basic and diluted earnings per share (₹) [(i)/(ii)]
20,999 19,755
^Trade receivables due from Greenply Industries Ltd is net of bills discounted of USD 11,62,660 (31 March,2019 : USD 16,40,038) with banks without recource.
GREENPLY MIDDLEEAST LIMITED AND ITS SUBSIDIARY
Notes to the consolidated financial statements for the year ended 31 March 2020 (continued)
(Amount in USD )
31. Contingent liabilities and capital commitments Year ended Year ended
(to the extent not provided for) 31 March 2020 31 March 2019
Contingent liabilities
(a) Claims against the group not acknowledged as debts: Nil Nil
(b) Guarantees outstanding Nil Nil
Capital and other commitments
(i) Estimated amount of contracts remaining to be executed
on capital account and not provided for (net of advances) 1,488,589 376,645
28. Capital management
29. Financial risk management: Credit, liquidity and market risk exposures.
Credit risk
Liquidity risk
31 March 2020Carrying amounts Payable within next
12 months
Between 1 to 5 years
USD USD USD
Term Loan (including current maturities)* 6,803,487 2,273,387 4,530,100
Working capital loan 2,800,000 2,800,000 -
Bank overdraft 5,758,115 5,758,115 -
Trade and other payables 4,710,684 4,710,684 -
20,072,286 15,542,186 4,530,100
31 March 2019 Carrying amounts Payable within next Between 1 to 5 years
USD USD USD
Term Loan (including current maturities)* 8,612,172 2,207,779 6,404,393
Working capital loan 2,800,000 2,800,000 -
Bank overdraft 2,340,605 2,340,605 -
Trade and other payables 3,500,722 3,500,722 -
17,253,499 10,849,106 6,404,393
* including estimated interest
Market risk
The group has derived its revenue from both domestic and overseas customers. Its 5 ( Five ) largest customers account for 37% (P.Y. 43%) of the sales.
As at 31 March 2020, the group had significant concentration of credit risk with 5 (five) customers accounting for 45% ( P.Y 63%) of the trade
receivables. The group seeks to limit its credit risk with respect to customers by setting credit limits for individual customers, monitoring outstanding
receivables and the terms of realization with the customers being letter of credit where available.
In this way, the customer balances are secured and considered good and recoverable by the management. There are no significant concentrations of
credit risk from receivables outside the industry in which the group operates.
Liquidity risk is the risk that the group will not be able to meet financial obligations as they fall due. The liquidity requirements are monitored on a regular
basis by the management and parent shareholder company who ensures that sufficient funds are made available to the group to meet the commitments
as they fall due. Although, short term payables are perceived as a liquidity risk, adequate steps are taken by the management and the parent company to
timely meet with the funding requirements.
The following are the contractual maturities of the company’s financial liabilities as at reporting date.
Market risk is the risk that changes in market prices, such as interest rate risk and currency risk, will affect the group’s income or the value of its holdings
of financial instruments.
The Group manages its capital to ensure that the Group will be able to continue as a going concern while maximizing the return to the parent shareholder
company through optimization of the debt and equity balance.The capital structure of the Group comprises net debt (interest bearing borrowings offset by
cash and bank balances) and equity (comprising paid up capital and loan account).
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. Financial
assets, which potentially expose the group to concentrations of credit risk comprise principally of bank balance and trade receivables. The group’s bank
balance in current and call accounts are placed with high credit quality financial institutions.
GREENPLY MIDDLEEAST LIMITED AND ITS SUBSIDIARY
Notes to the consolidated financial statements for the year ended 31 March 2020 (continued)
(Amount in USD )Interest rate risk
Exposure to interest rate risk
The interest rate profile of the Group 's interest bearing financial instruments at the end of the reporting period are as follows:
Particulars 31 March 2020 31 March 2019
Fixed rate instruments
Financial assets - -
Financial liabilities (2,367,361) -
(2,367,361) -
Variable rate instruments
Financial assets - -
Financial liabilities (15,702,654) (16,952,777)
(15,702,654) (16,952,777)
Sensitivity analysis
Particulars Nature Effect 31 March 2020 31 March 2019
Variable rate instruments Interest Expense (Dr)̂ Interest Rate Increase (157027) (169528)
Interest Expense (Cr)̂ Interest Rate Decrease 157027 169528
Profit or (loss) Interest Rate Increase (157027) (169528)
Interest Rate Decrease 157027 169528
Equity, net of tax Interest Rate Increase (157027) (169528)
Interest Rate Decrease 157027 169528
^includes exposure of +/- USD 28000 ( P.Y. 32000) from loan received from a related party
Cash flow sensitivity (net) Profit or (loss) Interest Rate Increase (157027) (169528)
Interest Rate Decrease 157027 169528
Equity, net of tax Interest Rate Increase (157027) (169528)
Interest Rate Decrease 157027 169528
Currency risk
2020 2019
Equivalent Equivalent
Foreign currency financial assets: USD USD
Trade receivable
Euro (EUR) 1,719,453 315,771
Bank balance
Euro (EUR) 4,252 101
The group has no established policy in managing interest rate risk. Any favorable or unfavorable movements of interest rates are absorbed by the group.
A 1% sensitivity rate is used in reporting interest rate risk internally to key management personnel and represents management’s assessment of the
reasonably possible change in interest rates. For floating rates, the analysis is prepared assuming the amount of asset and liability outstanding at the end
of each reporting period was outstanding for the whole year.
In management’s opinion, the sensitivity analysis is unrepresentative of the inherent interest rate risk because the exposure at the end of the reporting
period does not reflect the exposure during the year.
The group has no established policy in managing foreign exchange risk. Any favorable or unfavorable movements of foreign currency exchange rates are
absorbed by the group.
The carrying amounts of the group’s foreign currency denominated monetary assets and monetary liabilities at the end of each reporting period are as
follows:
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The
group’s exposure to the risk of changes in market interest rates relates primarily to the group’s borrowings from banks towards working capital loan, term
loan and overdraft, loan from the parent shareholder company and loan to a subsidiary with fixed and floating interest rates.
The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant, on the group’s
profit (through the impact on floating rate borrowings and loans):
A reasonably possible change of 100 basis points in variable rate instruments at the reporting dates would have increased or decreased profit or loss by
the amounts shown below:
Currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign currency rates. The
group’s exposure to the risk of changes in foreign exchange rates relates primarily to the group’s operating activities (when revenue or expense is
denominated in a foreign currency).