Duroply Industries Ltd Directors Report.

Your Directors are pleased to present the 64th Annual Report of Duroply Industries Limited along with the Audited Financial Statements for the financial year ended March 31, 2021.

FINANCIAL RESULTS (Rs in Lakhs)
PARTICULARS As on 31.03.2021 As on 31.03.2020
Turnover 18132.08 20653.60
Other Income 195.35 78.28
Profit before finance charges, Tax, Depreciation/ Amortization (PBITDA) 36.45 653.31
Less: Finance Charges 1008.26 748.83
Profit before Depreciation/ Amortization (PBTDA) (971.81) (95.52)
Less: Depreciation 323.54 308.94
Profit before Tax and Exceptional Items (1295.35) (404.46)
Net profit before taxation (PBT) (484.91) (231.76)
Provision for taxation (239.78) 175.84
Profit/ (Loss) after Taxation (PAT) (245.13) (407.60)
Other Comprehensive Income (21.14) (38.08)
Total Comprehensive Income (266.27) (445.68)

STATE OF COMPANYS AFFAIRS

During the year under review, the Company has achieved a net turnover of Rs 181.32 Crores as against Rs 206.54 Crores in the preceding financial year, a decrease of 12.21%. The company has incurred a net loss of Rs 2.66 Crores as against a net loss of Rs 4.46 Crores in the preceding year.

Plywood Segment revenue decreased from Rs 184.98 Crores to Rs 162.41 Crores i.e. a decrease of 12.20%. Tea Segment revenue during the year was Rs 18.91 crores as against Rs 21.56 Crores in the preceding financial year representing a decrease of 12.29%.

DIVIDEND

Due to loss during the year under review, the Directors regret their inability to recommend any dividend for the financial year ended March 31, 2021.

RESERVES

Due to loss, no amount is proposed to be transferred to general reserve for the year ended March 31, 2021.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31, 2021 was Rs 6.46 Crores. During the year under review, the Company has neither issued any shares or any convertible instruments, nor has bought back any of its securities.

CHANGES IN THE NATURE OF BUSINESS

There was no change in the nature of the business of the Company during the year, other than tea processing business of the Company was sold as mentioned below.

SLUMP SALE OF TEA PROCESSING BUSINESS

During the year under review, the Company has executed business transfer agreement with Teloijan Techno Agro Limited for transfer of the tea processing business of the Company by way of slump sale on going concern basis. For the Financial Year, 2020-21, the Tea Processing Business had a turnover of Rs 18.91 Crore which is approximately 10.43 % of the total turnover of the Company.

BORROWINGS

The total borrowings stood at Rs 6616.61 Lakhs as at March 31, 2021 as against Rs 5603.34 Lakhs as on March 31, 2020, i.e. an increase of Rs 1013.27 Lakhs.

DEPOSITS

The Company has not accepted any deposits from public during the year and as such, there is no outstanding deposit in terms of Companies (Acceptance of Deposits) Rules, 2014.

CORPORATE SOCIAL RESPONSIBILITY

The provisions of Section 135 of the Companies Act, 2013 regarding Corporate Social Responsibility are not attracted to the Company. However, the Company has been, over the years, pursuing as part of its corporate philosophy, an unwritten CSR policy voluntarily like providing scholarship to poor brilliant students, sponsoring sports program etc.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required under Regulation 34(2) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred as the “Listing Regulations”), the Management Discussion and Analysis Report is attached herewith as “Annexure 1”.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Retirement by Rotation

In accordance with the provisions of Section 152(6) and other applicable provisions of the Companies Act, 2013, Smt. Sheela Chitlangia (DIN: 000174354), Non-Executive Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible offered herself for re-appointment.

Cessation

As on the date of this Report, Shri Sohan Lal Yadav (DIN: 00207333), Non-Executive (Non- Independent) Director of the Company has resigned and ceased to be a Director of the Company effective close of business hours of May 6, 2021. The Board places on record its appreciation for his invaluable contribution and guidance.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declaration from each of the Independent Directors under Section 149(7) of the Companies Act, 2013 that, they meet the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Listing Regulations.

The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise in the fields of finance, people management, strategy, auditing, tax and risk advisory services, banking, financial services, investments; and they hold highest standards of integrity.

The Independent Directors of the Company have registered themselves with the Indian Institute of Corporate Affairs, (‘IICA) as required under Rule 6 of Companies (Appointment and Qualification of Directors) Rules, 2014. The Independent Directors of the Company have served for more than three years on board of listed entities and hence shall not be required to pass the online proficiency self-assessment test as per the proviso to Rule 6(4) of Companies (Appointment and Qualification of Directors) Rules, 2014.

BOARD MEETINGS

During the year under review, five Board Meetings were convened and held. The details of which are given in Corporate Governance Report forming part of this Report. The maximum interval between any two meetings was within the maximum allowed gap pursuant to the Companies Act, 2013 and Listing Regulations read with the Circulars issued by MCA and SEBI with respect to increase in the gap and extension for holding meetings pursuant to COVID-19 pandemic.

ANNUAL EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Annual evaluation of Board, its performance, Committees and individual Directors pursuant to applicable provisions of the Companies Act, 2013 and applicable regulations of the Listing Regulations, were carried out.

The performance of the Board was evaluated after seeking inputs from all the Directors present in the meeting on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc.

The Board and Nomination & Remuneration Committee had evaluated / reviewed the performance of individual Directors on the basis of criteria such as the contribution of the individual Director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

The Securities and Exchange Board of India vide circular SEBI /HO /CFD /CMD/ CIR/ 2017/004 dated January 05, 2017, issued a Guidance Note on Board Evaluation about various aspects involved in the Board Evaluation process to benefit all stakeholders. While evaluating the performance, the above guidance note was considered. Performance evaluation of

Independent Directors was carried out by the entire board, excluding the Independent Director being evaluated. A meeting of the Independent Director for the FY 2020-21, was held on February 10, 2021, to review the performance of the Non-Independent Directors and performance of the Board as a whole, on the parameters of effectiveness and to assess the quality, quantity and timeliness of the flow of information between the Management and the Board. The same were discussed in the board meeting that followed the meeting of the Independent Directors, at which the performance of the board, its committees, and individual Directors were also discussed. The Directors expressed their satisfaction with the evaluation process.

MANAGERIAL REMUNERATION

The information required pursuant to Section 197(12) read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of managerial personnel and employees of the company are attached herewith as “Annexure 2”.

SUBSIDIARIES, JOINT VENTURES & ASSOCIATE COMPANIES

As on March 31, 2021 the company is not having any associate, subsidiary or joint venture.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTY

All related party transactions that were entered into during the financial year under review were at arms length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. Accordingly there is no transaction to be reported in Form AOC-2.

All related party transactions are placed before the Audit Committee and also the Board for approval. The detail of the policy on Related Party Transactions as approved by the Board of Directors and Audit Committee is available on the Companys website www.duroply.in.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has in place a Vigil Mechanism/Whistle Blower Policy to deal with unethical behavior and to provide a framework to promote responsible and secured reporting of undesired activities. The Vigil Mechanism/ Whistle Blower Policy is available on the website of the Company at www.duroply.in. During the year, no case was reported under this policy.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under Section 186 of the Companies Act, 2013, are given in the notes to the financial statements.

REMUNERATION POLICY

The Company has formulated a policy on directors selection and appointment, payment of remuneration, directors qualifications, positive attributes, independence of directors, selection and appraisal of performance of Key Managerial Personnel and Senior Management and their remuneration and other related matters as applicable under Section 178(3) of the Companies Act, 2013. The Companys Criteria for payment of remuneration to the Non Executive Directors and Familiarization Programme undertaken for Independent Directors are available on the Companys website www.duroply.in and the Remuneration Policy is separately attached herewith as “Annexure 3”.

RISK MANAGEMENT POLICY

The Company has a defined risk management framework to identify, assess, monitor and mitigate risks involved in its business. The Company understands that risk evaluation and risk mitigation is an ongoing process within the organization and is fully committed to identify and mitigate the risks in the business. The Company has formulated and implemented a risk management policy in accordance with Listing Regulations, to identify and monitor business risk and assist in measures to control and mitigate such risks. In accordance with the policy, the risk associated with the Companys business is always reviewed by the management team and placed before the Audit Committee. The Audit Committee reviews these risks on periodical basis and ensures that mitigation plans are in place. The Board is briefed about the identified risks and mitigation plans undertaken.

The risk management policy as approved by the Board of Directors is available on the Companys website www.duroply.in.

INTERNAL FINANCIAL CONTROL

The Company has adequate internal control procedures commensurate with its size and nature of business. The objective of these procedures is to ensure efficient use and protection of the Companys resources, accuracy in financial reporting and due compliance of statutes and corporate policies and procedures. The Internal Financial Control (IFC) system ensures that all assets are safeguarded and protected and that the transactions are authorised, recorded and reported correctly.

Necessary certification by the Statutory Auditors in relation to Internal Financial Control u/s 143(3) (i) of the Companies Act, 2013 forms part of the Audit Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c) of the Companies Act, 2013, with respect to Directors Responsibility Statement, it is hereby confirmed:

(i) That in the preparation of the accounts for the year ended March 31, 2021, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2021 and of the profit/loss of the Company for the year on that date;

(iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) That the Directors have prepared the accounts for the year ended March 31, 2021 on a ‘going concern basis.

(v) That the Directors have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and are operating effectively.

(vi) That the Directors incorporated proper systems to ensure compliance with the provisions of all applicable laws was in place and were adequate and operating effectively.

CORPORATE GOVERNANCE

The Company has in place the SEBI guidelines pertaining to Corporate Governance. The Corporate Governance Report giving the details as required under the Listing Regulations is given separately as “Annexure 4”.

The Corporate Governance Certificate for the financial year ended on March 31, 2021 issued by CA Vivek Agarwal, partner of M/s S K Agrawal And Co Chartered Accountants LLP, Chartered Accountants, Statutory Auditors of the Company, is also attached herewith as “Annexure 5”.

Certificate Pursuant to Regulation 17(8) of the Listing Regulations is attached herewith as “Annexure 6”.

COMMITTEES OF BOARD OF DIRECTORS

As on the date of this Report, the Board has five Committees out of which three have been mandatorily constituted in compliance with the requirements of Companies Act, 2013 and the Listings Regulations while two non-mandatory Committees have been constituted to assist it in the management of the day-to-day affairs of the Company and to increase the efficacy of governance. The Board has adopted charters setting forth the roles and responsibilities of each of the Committees. The Board has constituted following Committees to deal with matters and to monitor activities falling within their respective terms of reference:-

MANDATORY COMMITTEES

Audit Committee

Nomination and Remuneration Committee Stakeholders Relationship Committee

NON-MANDATORY COMMITTEES

Investor Committee Borrowing Committee

Details of composition of the above Committees, their terms of reference, number of meetings held during the year, attendance therein and other related aspects are provided in the Corporate Governance Report forming part of the Annual Report. There has been no instance where the Board has not accepted the recommendations of its Committees.

AUDITORS

STATUTORY AUDITORS

As on the date of this Report, we have received intimation from our Statutory Auditors M/s. S K Agrawal and Co, Chartered Accountants (Firm Registration No. 306033E) regarding the change in constitution of their firm to LLP i.e. M/s. S K Agrawal and Co, Chartered Accountants, has been converted to M/s. S K Agrawal And Co Chartered Accountants LLP, Chartered Accountants (Firm Registration No. 306033E/E300272) with effect from December 31, 2020 and that from December 31, 2020 the audit of the Company will be done by to M/s. S K Agrawal And Co Chartered Accountants LLP, Chartered Accountants. There will be no change in the constituent of the partners of the said firm and the audit of the financial statements of the Company shall be done by the same partner of the new renamed firm as was done earlier.

The statutory auditors of your Company namely, M/s. S K Agrawal And Co Chartered Accountants LLP, Chartered Accountants, (Firm Registration No. 306033E/E300272) (Formerly known as : M/s. S K Agrawal & Co.) were appointed for a period of five years at the Annual General Meeting held on September 19, 2017. The Companies (Amendment) Act, 2017 has waived the requirement for ratification of the appointment by the members at every Annual General Meeting. Hence, the approval of the members is not being sought for the re-appointment of the statutory auditor and in line with their resolution of appointment passed at the Annual General Meeting held on September 19, 2017, the statutory auditor will continue to hold office till the conclusion of the 65th Annual General Meeting of the Company. The statutory auditor confirmed their eligibility and submitted the certificate in writing that they are not disqualified to hold the office of the statutory auditors. The report given by the statutory auditors on the financial statements of the Company is part of the Annual Report. There is no qualification, reservation, adverse remark or disclaimer given by the statutory auditors in their report.

The Statutory Auditors has not reported any incident of fraud to the Audit Committee of the Company during the year under review as required under section 143(12) of the Companies Act, 2013 & Rules made thereunder.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Ms. Rashmi Sharma, Practicing Company Secretary was appointed as the Secretarial Auditor of the Company for the Financial Year 2020-2021. The Secretarial Audit report for the financial year ended March 31, 2021 is attached herewith as “Annexure 7”.

The Board has noted the observation made by the Secretarial Auditor and is taking constant steps to strengthen the processes to avoid recurrence of the same.

Based on the consent received and on recommendation of the Audit Committee, the Board has re-appointed M/s. Rashmi Sharma as the secretarial auditor for the financial year 2021-2022.

COST AUDITORS

Company is required to maintain Cost Records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013 and accordingly such accounts and records are made and maintained.

Pursuant to provisions of Companies Act, 2013 and the Rules thereunder, requirement of Cost Audit is not applicable to the Company.

INVESTOR EDUCATION & PROTECTION FUND

The provisions of Section 125(2) of the Companies Act, 2013 is not applicable for the Company as no dividend was declared in the last financial year.

STOCK EXCHANGE LISTING

The Equity Shares of the Company are listed at the BSE Limited. The Company has paid the listing fee to the BSE Limited for the year 2021-2022.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pertaining to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in “Annexure 8” attached herewith.

ANNUAL RETURN

Pursuant to the provisions of Section 92(3) read with Section 134(3) (a) of the Companies Act, 2013, the Annual Return as on March 31, 2021 is available at the web link: https://www.duroply.in/siteassets/pdf/Form_MGT_7_Draft.pdf

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

No material change and commitment affecting the financial position of the Company have occurred between the end of the financial year to which the financial statements relate and the date of the Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations.

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT 2013

The Company provides a safe and conducive work environment to its employees and has adopted a policy on prevention, prohibition, and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. Internal Complaints Committees have been constituted to enquire into complaints, and to recommend appropriate action, wherever required in compliance with the provisions of the said Act.

During the year under review, no complaint was reported to the Committee.

COVID-19 IMPACT ON THE COMPANY

As Members are aware, since March 2020, the Country/World has been seeing the impact due to COVID-19 pandemic. With a significant increase in number of cases in early 2020, the Government has been taking various measures including a national lockdown for three months to contain the virus which in turn affected economic activity in the Country. Your Company has taken various measures to monitor and mitigate the effects of COVID-19, such as safety and health measures for employees (e.g. social distancing, personal hygiene, work from home) and securing the supply of materials that are essential for production process and virtual technology in testing, commissioning, etc. to ensure business continuity.

The Second wave of COVID-19 has hit the country like tsunami and has badly affected the human life, medical facilities and economy of the Country. The situation became grave in April 2021 resulting lockdown by many states governments in India. The sudden spike of COVID cases pushed the Indian Economy into a technical recession due to deadly pandemic wave. Employee safety remained the Companys priority.

ISO CERTIFICATION

The Companys factory at Rajkot, Gujarat have been certified ISO 14001:2004 for Environmental Management Systems Standards.

ACKNOWLEDGEMENT

Your Directors place on record their gratitude to the dealers, agents, suppliers, investors and bankers for their continued support, co-operation and their valuable guidance to the Company and for their trust reposed in the Companys management. Your Directors also place on record their sincere appreciation to employees at all levels for their hard work, dedication and continuous contribution to the Company.

Registered Office :
9, Parsee Church Street
Kolkata 700 001

For and on behalf of the Board

SUDEEP CHITLANGIA SUJIT CHAKRAVORTI
Managing Director Director
Date : June 24, 2021 (DIN : 00093908) (DIN : 00066344)