Greenply Industries Ltd Directors Report.

To

The Members,

Your Directors have pleasure in presenting their 29th Annual Report on the business and operations of the Company along with the Audited Accounts of the Company for the Financial Year ended March 31, 2019.

Financial highlights

The financial performance of your Company, for the year ended March 31, 2019 is summarized below:

Particulars 2018-19 2018-19 2017-18 2017-18
Standalone Consolidated Standalone Consolidated
Turnover 1,27,575.60 1,40,412.94 89,418.67 91,526.47
Profit before finance charges, Tax, 12,633.36 14,731.21 7,063.43 6,779.13
Depreciation/Amortization (PBITDA)
Less: Finance Charges 1,480.59 1,863.48 633.81 772.45
Profit before Depreciation/Amortization 11,152.77 12,867.73 6,429.62 6,006.68
(PBTDA)
Less: Depreciation 1,871.73 2,243.11 1,544.33 1,795.74
Net Profit before Taxation (PBT) 9,281.04 10,624.62 4,885.29 4,210.94
Provision for taxation 3,151.82 3,151.82 1,373.17 1,373.17
Profit/(Loss) after Taxation (PAT) 6,129.22 7,472.80 3,512.12 2,837.77
Share of profit/(loss) of Joint Venture NA 494.36 NA (760.25)
Profit/(Loss) after Taxation and share of profit/ 6,129.22 7,967.16 3,512.12 2,077.52
(loss) of Joint Venture (Continuing Operation)
Net Profit before Taxation (PBT) (Discontinued operation) -- -- 14,034.80 12,962.65
Provision for taxation (Discontinued operation) -- -- 3,977.46 3,977.46
Profit/(Loss) after Taxation for the year 6,129.22 7,967.16 13,569.46 11,062.71
Transfer to General Reserve -- -- 6,500.00 6,500.00

Result of operations and the state of Companys affairs

During the year under review, your Company posted a stable performance with turnover of H1,27,575.60 lacs as against H89,418.67 lacs in the previous year. Profit for the year 2018-19 was H6,129.22 lacs as against H3,512.12 lacs in the previous year.

As per the consolidated financial statements, the turnover and profit for the year 2018-19 were H1,40,412.94 lacs and H7,967.16 lacs respectively as against H91,526.47 lacs and H2,077.52 lacs in the previous year.

Your Company continues to retain and reinforce its market share under organised sector with a pan India distribution network comprising of distributors/dealers and retailers. Your Company is the preferred partner of choice for a large number of offices and home builders, having a comprehensive product portfolio servicing clients at every point of the price spectrum. Your Company is present across different price points to cater to the needs of all customers across the high-end, mid-market and value-for-money segments.

Outlook and expansion

The Companys outlook remains favourable on account of its product integration capabilities, increasing brand visibility and the continuous support from its stakeholders. Plywood market is one of the major verticals of the interior infrastructure, comprising materials used in building furniture. Such materials include plywood, boards, decorative veneers, doors. Your Company is currently operating primarily in the structural sphere of interior infrastructure domain with almost all the products in its basket catering to the structural needs of the customers. The demand for readymade furniture is growing. The real estate industry is one of the most significant growth drivers for the plywood sector. Your company also focused on the value added products to improve margin.

An increasing shift towards the organised sector is foreseen in the industry. Growing customer awareness, brand consciousness and a plethora of choices at the disposal of consumers is encouraging product innovation and quality focus from the organised players.

Going forward, there is an increasing shift being witnessed towards the organised sector owing to brand and quality awareness. With wider choice, product innovation and warranty, being offered by organised players, customers are shifting more focus on this segment.

The Veneer unit at NKOK, Gabon, West Africa through step down wholly owned subsidiary, Greenply Gabon SA, is in the process of expansion. The Civil work has been completed. Machinery and Boiler installation are in process and the new lines are expected to commence production in October, 2019. With the commencement of the new lines with bigger size peeling machines, the unit will be able to tap the European and US markets. The FSC certification process is in its final stages and the unit is expected to be FSC certified by the time the new lines are operational giving it an edge in the International market. The Unit is further expanding its markets in South East Asia, Europe and North Africa apart from the Indian Sub-Continent.

In respect of setting-up of new unit in Sandila Industrial Area, Sandila, Dist. - Hardoi, Uttar Pradesh for manufacturing of Plywood and its allied products, the Company has received land allotment letter from the respective government authority. Transfer of forest licenses in the name of the Company has been completed.

The Company has entered into an agreement, inter alia, for investment of H1.80 crore (i.e. 30%) in the equity share capital of M/s. Nemani Panels Pvt. Ltd., (a newly incorporated company for setting-up a manufacturing unit of Plywood and allied products at Bareilly, U.P.) promoted by Bareilly Plyboards Pvt. Ltd. (an existing company manufacturing and selling Plywood and allied products). The Company has also entered into an agreement, inter alia, for investment of H3.25 crore (i.e. 30%) in the equity share capital of M/s. Panchjanya Ply & Boards Pvt. Ltd., (a company incorporated for setting-up manufacturing unit of Doors and Film Face Plywood and allied products at Bareilly, U.P.). The Company will procure materials from them for its businesses.

Your Directors are confident of achieving better results in the coming years.

Composite Scheme of Arrangement and Change(s) in the nature of business

Your Board of Directors on 30th May, 2018, subject to approval of the concerned Authorities, approved a Composite Scheme of Arrangement (Scheme) between Greenply Industries Limited and Greenpanel Industries Limited and their respective shareholders and creditors for the demerger of ‘Transferred Business as defined in the Scheme i.e. business comprising of manufacturing, marketing and trading of Medium Density Fibre Boards (MDF), Pre-Laminated MDF, Wood Floors, Plywood, Decorative Veneers, Doors and allied products. Presently, this business consists of the MDF manufacturing unit situated at Routhu Suramala, Chittoor (Andhra Pradesh), MDF manufacturing unit and Plywood and allied products manufacturing unit located in a common plot at Pantnagar (Uttarakhand), registered, marketing, branch and administrative office(s) located in India and overseas subsidiary viz. Greenply Trading Pte. Limited (registered in Singapore) excluding its investment of USD 37,50,000 (37,50,000 ordinary shares of USD 1 each) in Greenply Alkemal (Singapore) Pte. Ltd. (registered in Singapore).

The Honble Guwahati Bench of National Company Law Tribunal ("NCLT") has, on 28th June, 2019, approved the Composite Scheme of Arrangement under Section 230 to 232 read with Section 66 of the Companies Act, 2013 between Greenply Industries Limited ("Greenply") and Greenpanel Industries Limited ("Greenpanel") and their respective shareholders and creditors, for demerger of the ‘transferred business into Greenpanel, with effect from April 01, 2018 (Appointed Date). Consequent to the Scheme becoming effective, shareholders of Greenply Industries Limited were allotted 1 (one) fully paid up equity share of Re.1 (one) each of Greenpanel Industries Limited for every 1 (one) equity share of Re. 1 (one) each held by them in the Greenply as on the record date i.e., 15th July, 2019. The equity shares were issued pursuant to the Scheme in Greenpanel Industries Limited and will be listed with BSE Ltd. and National Stock Exchange of India Limited. Further, the existing equity share capital of Greenpanel Industries Limited which was fully held by Greenply Industries Limited was cancelled pursuant to the Scheme and Greenpanel Industries Limited has ceased to be a subsidiary of the Company.

During the year under review, there has been a realignment of the Companys holding in its step-down Joint Venture Company namely M/s. Greenply Alkemal (Singapore) Pte. Ltd. [a joint venture company of Greenply Industries Limited, India through its wholly owned subsidiary Greenply Trading Pte. Ltd., Singapore (now name changed to Greenpanel Singapore Pte. Ltd.) and Alkemal Singapore Pvt. Ltd., Singapore] whereby the Companys investment of USD 37,50,000 (37,50,000 ordinary shares of USD 1 each) in the said Joint-Venture Company, which was held through Greenply Trading Pte. Ltd. (now name changed to Greenpanel Singapore Pte. Ltd.), is now being held through Greenply Holdings Pte. Ltd., Singapore, existing wholly owned subsidiary of the Company.

Greenply Trading Pte. Ltd. (now name changed to Greenpanel Singapore Pte. Ltd.), Singapore has reduced its share capital of 37,50,000 ordinary shares of USD 1 each and accordingly there was partial disinvestment of 37,50,000 ordinary shares of USD 1 each in Greenply Trading Pte. Ltd., Singapore by Greenply Industries Limited.

Greenply Holdings Pte. Ltd., Singapore, has raised further share capital of 37,50,000 ordinary shares of USD 1 each and accordingly, there is further subscription of 37,50,000 ordinary shares of USD 1 each in Greenply Holdings Pte. Ltd., Singapore by Greenply Industries Limited.

Pursuant to the said Scheme, overseas subsidiary viz. Greenply Trading Pte. Limited, Singapore (now name changed to Greenpanel Singapore Pte. Ltd.) was transferred to Greenpanel Industries Limited and have ceased to be subsidiary of the Company.

Restatement of Financial Statements giving effect to the Composite Scheme of Arrangement

The Board of Directors of the Company at its meeting held on 30th May, 2019, had considered and approved the Audited Standalone as well as Consolidated financial statements of the Company for the year ended 31st March, 2019. However, subsequently, the Composite Scheme of Arrangement of the Company [Company Petition No.: C.P. (CAA) No. 02/GB/2019 connected with Company Application No.: CA (CAA) No. 09/GB/2018] was approved by the Honble Guwahati Bench of National Company Law Tribunal, with an effective/ appointed date of 1st April, 2018, as defined in the Scheme itself. Considering the said Scheme being effective, the Board of Directors at its meeting held on 14th August, 2019 considered and approved the restated Audited Standalone as well as Consolidated financial statements for the year ended 31st March, 2019, after giving effect to the said Scheme.

Segment reporting as per IND AS 108 w.e.f 1st April, 2019

Till 31st March 2019, the Company used to present its business activities in three operating segments, namely: a) Plywood and allied products, b) Medium density fibreboards and allied products and c) Others (Wallpaper, Solid Surface, etc.). Effective from 1st April 2019, using the guidance note of Ind AS 108 on ‘Operating Segments with respect to review of operating results undertaken by the Chief Operating Decision Maker (CODM) at the Company level and after considering the effect of NCLT Order in respect of transfer of Medium Density Fiberboards and allied products segment and also the insignificant share of products- Wallpaper, solid surface, etc. in the Companys financial results, the Board of Directors was of the view that ‘Plywood and allied products represents more appropriately the Companys current business as single reportable segment. Accordingly, based on the recommendations of the Audit Committee and guidance of Ind AS 108 on ‘Operating segments, the Board of Directors at their

Meeting held on 14th August 2019, have discussed and approved ‘Plywood and allied products as single reporting segment.

Subsidiaries and Joint Venture

Presently, your Company has two overseas wholly owned subsidiaries viz. (i) Greenply Holdings Pte. Ltd., Singapore, which is holding the investment in Greenply Alkemal (Singapore) Pte. Ltd., Singapore. (ii) Greenply Middle East Limited, Dubai, UAE, which is managing, controlling and holding investment in Greenply Gabon SA, Gabon, West Africa and also engaged in general trading business.

Further, your Company has an overseas step-down wholly owned subsidiary viz. Greenply Gabon SA, Gabon, West Africa, (Subsidiary of Greenply Middle East Limited, Dubai, UAE) having manufacturing unit at Nkok SEZ in Gabon, West Africa. The same is engaged in the business of manufacturing and marketing of veneers. Your Company also has one step-down overseas joint venture namely Greenply Alkemal (Singapore) Pte. Ltd. (a joint venture company of Greenply Industries Limited, India through its wholly owned subsidiary Greenply Holdings Pte. Ltd., Singapore and Alkemal Singapore Pvt. Ltd., Singapore) engaged in the business of trading and marketing of commercial veneers and panel products. Further, the joint venture company also control the Myanmar based company i.e. Greenply Industries (Myanmar) Pvt. Ltd., which is engaged in the business of manufacturing and trading of veneer and lumber.

The statement in form AOC-1 containing the salient features of the financial statements of subsidiaries/ associate companies/joint ventures pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014 is annexed to this Report.

Further, the contribution of Greenply Holdings Pte. Ltd., Singapore, Greenply Middle East Limited, Dubai, UAE, wholly owned subsidiaries and Greenply Alkemal (Singapore) Pte. Ltd., Joint Venture Company to overall performance of the Company during the year under review is as mentioned below:

Net assets Share in profit or loss
(Total assets minus total liabilities)
As % of consolidated net assets Rs. In lakhs As % of consolidated profit or loss Rs. In lakhs
Holding company
Greenply Industries Limited 98.85% 33,134.42 76.93% 6,129.22
Subsidiaries:
Foreign
Greenply Holdings Pte. Limited 0.03% 11.61 -0.16% (12.87)
Greenply Middle East Limited ^ 1.65% 554.39 17.03% 1,356.45
Joint Venture:
Foreign
Greenply Alkemal (Singapore) Pte. Ltd. -0.53% (178.03) 6.20% 494.36
Non-controlling interests in all subsidiaries 0.00% - 0.00% -
At 31 March 2019 100.00% 33,522.39 100.00% 7,967.16

 

Share in other comprehensive income Share in total comprehensive income
As % of consolidated other comprehensive income Rs. In lakhs As % of consolidated total comprehensive income Rs. In lakhs
Holding company
Greenply Industries Limited 347.22% 382.26 80.62% 6,511.48
Subsidiaries:
Foreign
Greenply Holdings Pte. Limited -105.13% (115.74) -1.60% (128.61)
Greenply Middle East Limited ^ -142.09% (156.43) 14.87% 1,200.02
Joint Venture:
Foreign
Greenply Alkemal (Singapore) Pte. Ltd. 0.00% - 6.11% 494.36
Non-controlling interests in all
subsidiaries 0.00% - 0.00% -
At 31 March 2019 100.00% 110.09 100.00% 8,077.25

^Includes a wholly owned step down subsidiary company – Greenply Gabon SA

Consolidated financial statements

For the period under review, the Company has consolidated the financial statements of its wholly owned subsidiaries viz. Greenply Holdings Pte. Ltd., Singapore and Greenply Middle East Limited, Dubai (UAE). In accordance with third proviso of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company, containing therein its standalone and the consolidated financial statements has been placed on the website of the Company, www.greenply.com. Further, as per fourth proviso of the said section, audited annual accounts of the subsidiary companies and Joint Venture Company have also been placed on the website of the Company, www.greenply.com. Shareholders interested in obtaining a copy of the audited annual accounts of the subsidiary companies and Joint Venture Company may write to the Company Secretary at the Companys registered office. A statement containing salient features of the financial statements of subsidiary/ associate companies/joint venture in form AOC -1 is annexed to this Report.

Credit Rating

During the year "Credit Analysis and Research Ltd. (CARE)"and "India Ratings & Research" have re-affirmed our external credit rating for both long term and short term borrowings as detailed below:

Rating Agency Instrument Rating
CARE Banking Facilities – Long Term CARE AA- ; Credit watch with developing
implications
CARE Banking Facilities – Short Term CARE A1+ ; Credit watch with developing
implications
CARE Short Term Debt (including CARE A1+ ; Credit watch with developing
Commercial Paper) implications
India Ratings & Research Banking Facilities – Long Term IND AA- / Rating Watch Evolving (RWE)
India Ratings & Research Banking Facilities – Short Term IND A1+ / Rating Watch Evolving (RWE)
India Ratings & Research Short Term Debt (including IND A1+ / Rating Watch Evolving (RWE)
Commercial Paper)

Above credit rating reflects Companys commitment and capability to persistent growth through prudence and focus on financial discipline.

Dividend

Your Directors recommend a final dividend of 40% i.e. Re.0.40 per equity share (compared to previous year of 60% i.e.Re.0.60 per equity share of Re.1/-each) on the Companys 12,26,27,395 equity shares of Re.1/- each for financial year 2018-19. The final dividend on the equity shares, if approved as above, would involve an outflow of H490.51 lacs towards dividend and H100.83 lacs towards dividend distribution tax, resulting in a total outflow of H591.34 lacs.

The dividend payment is subject to approval of members at the ensuing Annual General Meeting. The dividend pay-out is in accordance with the Dividend

Distribution Policy of the Company adopted by the Board of Directors in their meeting held on July 25, 2016 and amended on 08.02.2019. The Dividend Distribution Policy of the Company is annexed to this Report and also uploaded on the website of the Company available at the weblink at http://www.greenply.com/images/ pdf/Dividend_Distribution_Policy.pdf

Transfer to Reserves

No amount is proposed to be transferred to any Reserves.

Share Capital

During the year under review, there were no changes in the Share Capital of the Company.

Directors and Key Managerial Personnel

Consequent to receipt of the approval of Honble

Guwahati Bench of National Company Law Tribunal ("NCLT") to the Composite Scheme of Arrangement under Section 230 to 232 read with Section 66 of the Companies Act, 2013 between Greenply Industries Limited ("Greenply") and Greenpanel Industries Limited ("Greenpanel") and their respective shareholders and creditors, for demerger of the Demerged Undertaking/ Transferred Business of Greenply as defined in the Scheme, into Greepanel with effect from April 01, 2018 (Appointed Date), Mr. Shiv Prakash Mittal, Executive Chairman, Mr. Shobhan Mittal, Joint Managing Director

& CEO and Mr. Vishwanathan Venkatramani, Chief Financial Officer had given resignation from Greenply Industries Limited with effect from the close of the working hours of 18th July, 2019, to take up assignment in Greenpanel Industries Limited.

The Board of Directors of the Company at its meeting held on 14th August, 2019, subject to approval of the Shareholders at the general meeting, has approved the revision in remuneration including terms and conditions of appointment and also change in designation of Mr. Rajesh Mittal [DIN: 00240900] from Managing Director to Chairman cum Managing Director of the Company. Accordingly, subject to approval of the Shareholders at the general meeting, the designation of Mr. Rajesh Mittal was changed from Managing Director to Chairman cum Managing Director of the Company and his terms and conditions of appointment was revised from non-retiring to liable to retire by rotation. The same was recommended to the Board of Directors by the Nomination and Remuneration Committee at its meeting held on 14th August, 2019. The existing tenure of Mr. Rajesh Mittal will expire on 31st December, 2020. The detailed terms and conditions including remuneration have been mentioned in the Notice convening 29th Annual General Meeting. Further, the details of Mr. Rajesh Mittal as required under Listing Regulations and SS-2 have also been provided in the Corporate Governance Report and the Notice of 29th Annual General Meeting.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Rajesh Mittal [DIN: 00240900], Chairman cum Managing Director of the Company, will retire by rotation at the ensuing Annual General Meeting and is eligible for re- appointment.

Further, the Board of Directors of the Company at its meeting held on 14th August, 2019, subject to approval of the Shareholders at the general meeting, has approved the revision in remuneration, and change in designation of Mr. Sanidhya Mittal [DIN: 06579890] form Executive Director to Joint Managing Director. Accordingly, subject to approval of the Shareholders at the general meeting, the designation of Mr. Sanidhya Mittal was changed from Executive Director to Joint Managing Director. The same was recommended to the Board of Directors by the Nomination and Remuneration Committee at its meeting held on 14th August, 2019. The existing tenure of Mr. Sanidhya Mittal will expire on 6th February, 2023. The detailed terms and conditions including remuneration have been mentioned in the Notice convening 29th Annual General Meeting. Further, the details of Mr. Sanidhya Mittal as required under Listing Regulations and SS-2 have also been provided in the Corporate Governance Report and the Notice of 29th Annual General Meeting.

The SEBI has come out with a Notification on 9th May, 2018 amending the existing Listing Regulations by issuing the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 (hereinafter referred to as "New Regulations"). The New Regulations is effective from 1st April, 2019 unless any other specific date is provided for a specific Regulation. Regulation 17 is one of the provisions in which the amendments have been made by way of insertion of a new sub-regulation (1A) thereunder and the same is applicable with effect from 1st April, 2019. In terms of the said new sub-regulation, a person shall not be eligible to get appointed as a non-executive director or in case of an existing non-executive director, shall not be eligible to continue such directorship, if he/ she has attained the age of seventy five years unless the approval of the shareholders of the company is obtained by way of a special resolution. Considering the implication of such amendment, the same shall result in the immediate vacation of such directors as the restriction is not imposed only on the appointment but on the continuation of the existing tenure too. In view of the above, the Company is required to take approval from the shareholders by way of a special resolution beforehand so that the existing non-executive directors attaining such age can continue their proposed term of re-appointment. This is to inform that Mr. Susil Kumar Pal (DIN: 00268527) and Mr. Anupam Kumar Mukerji (DIN: 00396878) were appointed as Non-Executive Independent Directors by the Company in its Annual General Meeting held on 22nd August, 2014 for a period of five years from the said date till the Annual General Meeting to be held in 2019. Since Mr. Pal and Mr. Mukerji had already attained the specified age limit of 75 years, continuation of their directorship is required approval of shareholders by way of special resolutions. The Members of the Company at their 28th Annual General Meeting held on 28th August, 2018 approved continuation of the directorship of Mr. Susil Kumar Pal [DIN: 00268527] and Mr. Anupam Kumar Mukerji [DIN:00396878], Non-Executive Independent Directors of the Company, who had attained the age of 75 years, till the expiry of existing terms of their appointment i.e. upto conclusion of the forthcoming 29th Annual General Meeting. Keeping in view that the aforesaid directors possess requisite qualifications and also carry rich and varied experience in the industry in which the Company operates and also considering their independence it is desirable to continue to avail their services as Non-executive Independent Directors of the Company. Accordingly, the Board recommends their continuation in the Company for a further period of 5 years from the conclusion of the 29th Annual General Meeting in 2019 i.e. 30th September, 2019 The same was recommended to the Board of Directors by the Nomination and Remuneration Committee at its meeting held on 14th August, 2019. Accordingly, the Board recommends their continuation in the Company. The Members of the Company at their 24th Annual General Meeting held on 22.08.2014 re-appointed Mr. Susil Kumar Pal, Mr. Vinod Kumar Kothari, Mr. Upendra Nath Challu, Mr. Anupam Kumar Mukerji and Ms. Sonali Bhagwati Dalal, as Independent Directors of the Company, not liable to retire by rotation, to hold office for a term of 5 (five) consecutive years from the date of 24th Annual General Meeting up to the conclusion of the 29th Annual General Meeting of the Company in the calendar year 2019. Section 149 of the Companies Act, 2013, inter-alia, provides that an Independent Director shall hold office for a term up to five consecutive years on the Board of a company but shall be eligible for re-appointment on passing of a special resolution by the Company. Based on the evaluation report of the Independent Directors, the Company proposes to reappoint said Independent Directors, for the further period of five consecutive years from the conclusion of the 29th Annual General Meeting i.e. 30th September, 2019. The same was recommended to the Board of Directors by the Nomination and Remuneration Committee at its meeting held on 14th August, 2019. The details of above Independent Directors as required under Listing Regulations and SS-2 have also been provided in the Corporate Governance Report and the Notice of 29th Annual General Meeting.

The Board of Directors of the Company at their meeting held on 14.08.2019, on the recommendation/approval of the Nomination and Remuneration Committee and Audit Committee, appointed Mr. Mukesh Agarwal, Chartered Accountant, as CFO of the Company w.e.f. 14.08.2019.

None of the Directors of your Company is disqualified under the provisions of Section 164(2)(a) & (b) of the Companies Act, 2013 and a certificate dated May 30, 2019 received from a Practising Company Secretary certifying that none of the directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as directors of the companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs or any such other Statutory Authority is annexed to the Corporate Governance Report. Further, the name of Ms. Sonali Bhagwati Dalal, Independent Director of the Company was published by the Ministry of the Corporate Affairs (MCA) on its website in the list of directors disqualified under Section 164(2) of the Companies Act, 2013. Subsequently a petition was filed by her before the Honble High Court of Delhi and the Honble High Court of Delhi has stayed the impugned list of Disqualified Directors to the extent it includes her name. Further, to avail the Condonation of Delay Scheme (CODS), 2018, she has filed an appeal before the National Company Law Tribunal (NCLT) for revival of the concerned defaulting company. In view of the pendency of the said appeal before NCLT, the Honble High Court of Delhi has vide its order dated

May 07, 2018 has extended the stay till disposal of the said appeal by MCA. Subject to compliance of certain conditions, the appeal was disposed off by the NCLT on 19.03.2019 by allowing the restoration of the name of the defaulting Company with Registrar of Companies due to which her name was published by the Ministry of the Corporate Affairs (MCA) on its website in the list of directors disqualified under Section 164(2) of the Companies Act, 2013. Compliances as advised by the NCLT have been completed.

Declaration by Independent directors

For the financial year 2018-19, all the Independent Directors of the Company have given their declarations to the Company that they meet the criteria of independence as provided in Section 149(7) read with Section 149(6) of the Companies Act, 2013 and Regulation 16 of Listing Regulations.

Meetings of the Board of Directors

Five (5) Board Meetings were held during the financial year ended 31st March, 2019. The details of the Board Meetings with regard to their dates and attendance of each of the Directors thereat have been provided in the Corporate Governance Report

Performance Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the Board has carried out the annual performance evaluation of the Directors individually as well as evaluation of the working of the Board as a whole and of the Committees of the Board, by way of individual and collective feedback from Directors.

Pursuant to Para VII of Schedule IV of the Companies Act, 2013 (‘Act, 2013) and applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations), a meeting of the Independent Directors (‘IDs) of the Company was convened on Thursday, 7th February, 2019 to perform the following: • review the performance of the Chairperson of the Company, taking into account the views of executive directors and non-executive directors; • review the performance of non-independent directors and the Board as a whole; • assess the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties Further, the Nomination and Remuneration Committee also evaluated the performance of all the directors of the Company.

The criteria for evaluation are briefly provided below:

a. For Independent Directors:
- General parameters
- Roles & responsibilities to be fulfilled as an

Independent director

- Participation in Board process. b. For Executive & Non-executive Directors:

- Governance

- Strategy

- Stakeholder focus

- Communication & influence

- Quality or capability

- Performance improvement

- Financial & risk awareness

The result of review and evaluation of performance of Board, its Committees and of individual Directors was found to be satisfactory.

Familiarisation Programme

The details of the familiarisation programme undertaken during the year have been provided in the Corporate Governance Report along with the web link thereof.

Managerial Remuneration

As per the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 including any amendment thereof, the Company is required to disclose the following information in the Boards Report.

(a) ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year 2018-19;

Name Designation Ratio to median remuneration of employees
Mr. Rajesh Mittal Chairman cum Managing Director 247.84
Mr. Sanidhya Mittal Joint Managing Director 124.39
Mr. Susil Kumar Pal Independent Director 6.38
Mr. Vinod Kumar Kothari Independent Director 6.38
Mr. Anupam Kumar Mukerji Independent Director 6.38
Ms. Sonali BhagwatiDalal Independent Director 6.38
Mr. Upendra Nath Challu Independent Director 6.38

(b) percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year 2018-19;

Name Designation % increase
Mr. Rajesh Mittal Chairman cum Managing Director -26.17%
Mr. Sanidhya Mittal Joint Managing Director 115.13%
Mr. Susil Kumar Pal Independent Director 0%
Mr. Vinod Kumar Kothari Independent Director 0%
Mr. Anupam Kumar Mukerji Independent Director 0%
Ms. Sonali Bhagwati Dalal Independent Director 0%
Mr. Upendra Nath Challu Independent Director 0%
Mr. Mukesh Agarwal Chief Financial Officer (Appointed N.A.
w.e.f. 14.08.2019)
Mr. Kaushal Kumar Agarwal Company Secretary & 8.66%
Vice President-Legal

(c) percentage increase in the median remuneration of employees in the financial year 2018-19; 7.41 (d) number of permanent employees on the rolls of Company; 2368 (e) average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration;

-2.68% (non-Managerial personnel) -4.37% (Managerial Personnel)

(f ) We hereby affirm that the remuneration paid to the Executives is as per the Remuneration Policy of the Company approved by the Board of Directors.

(g) Managing Directors and Whole-time Directors of the Company do not receive any commission from its subsidiary companies.

All elements of remuneration package as required under Listing Regulations have been provided in the Corporate Governance Report.

Statutory Auditors and their report

The Shareholders of the Company at their 27th Annual General Meeting held on 21.08.2017, approved appointment of M/s. B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 101248W/W-100022) as the Statutory Auditors of the Company to hold office for a term of 5 (five) consecutive years i.e. from the conclusion of 27th Annual General Meeting, until the conclusion of the 32nd Annual General Meeting.

The Notes on Financial Statements referred to in the Auditors Report are self-explanatory and, therefore, do not call for further clarification. The Auditors Report for Financial Year ended March 31, 2019 does not have any qualifications.

Cost Auditors

During the year under review, cost audit was not applicable to the Company.

Internal Auditor

The Company has in-house Internal Audit team headed by qualified and experienced Executive. The scope, functioning, periodicity and methodology for conducting internal audit were approved by the Board of Directors and reviewed by the Audit Committee from time to time. Further, the Audit committee discussed and reviewed the adequacy of internal audit function, including the structure of the internal audit department, staffing and seniority of the official, heading the department, reporting structure coverage and frequency of internal audit.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company has appointed M/s. Nidhi Bagri & Company, Practising Company Secretary (Membership No. ACS 24765/COP No.9590), Kolkata, to conduct Secretarial Audit for the financial year 2018-19. The Secretarial Audit Report of M/s. Nidhi Bagri & Company, Practising Company Secretary, in Form MR-3, for the financial year ended 31st March, 2019, is annexed to this report.

Response to Secretarial Auditors observation

It has been observed by the Secretarial Auditor that during the financial year 2018-19, though the Company has spent H445.61 lacs towards CSR activities (directly and through Trust- Greenply Foundation) during the year under review but the maximum amount was relating to earlier year(s) lying with the Trust and implementing agency(ies). Accordingly, the amount spent is less than the minimum allocation of CSR being 2% of the average net profit of last 3 financial years amounting to H379.59 lacs in total. In response to the same, our Company would like to submit that the total amount to be spent by the Company for the FY 2018-19 was H379.59 lacs. During the year under review, the Company has undertaken CSR activities directly and through its Trust namely GREENPLY FOUNDATION.

The total amount to be spent by the Company for the FY 2018-19 was H379.59 lacs. As against that the amount spent by the Company during the FY 2018-19 either directly or through Greenply Foundation amounted to H445.61 lacs (including brought forward unspent amount from previous years). Accordingly, the Company has exceeded its CSR spending during the FY 2018-19 against the requirement of Section 135 of the Companies Act, 2013 i.e. 2% of the average net profit of last 3 financial years. The Company had taken the decision to spend the carried over unspent amount of H296.66 lacs (net of liabilities of H0.98 lacs) lying with Trust and H1.39 lacs lying with Implementing Agencies as on 31.03.2018. Considering the carried over amount, the amount spent during FY 2018-19 is less than the minimum allocation of CSR being 2% of the average net profit of last 3 financial years amounting to H379.59 lacs in total. The Trust has also earned H10.33 lacs on temporary investment with Banks during FY 2018-19. The unutilized fund lying with the Trust as on 31.03.2019 amounting to H205.88 lacs (net of liabilities of H0.17 lacs) and the amount of H37.49 lacs lying with Implementing Agencies will be used for CSR activities along with fresh funding, if any, from the Company, during FY 2019-20. The Company is committed to the underlying intent of CSR and is optimistic of meeting its obligations under section 135 of the Companies Act, 2013 and thereby make a positive impact on the society.

Audit Committee

As on 31st March, 2019, the Companys Audit Committee comprises of four Non-Executive Independent Directors viz. Mr. Susil Kumar Pal, Mr. Vinod Kumar Kothari, Mr. Anupam Kumar Mukerji and Mr. Upendra Nath Challu and two Executive-Promoter Directors viz. Mr. Rajesh Mittal and Mr. Shobhan Mittal. The Committee inter-alia reviews the Internal Control System, reports of Internal Auditors, compliance of various regulations and evaluates the internal financial controls and risk management system of the Company. The Committee also reviews at length the Financial Statements and results before they are placed before the Board. The terms of reference of the Audit Committee and other details have been provided in the Corporate Governance Report.

Vigil mechanism

In pursuance to the provisions of section 177(9) & (10) of the Companies Act, 2013, erstwhile equity listing agreement and Regulation 22 of the Listing Regulations, ‘Whistle Blower Policy to establish vigil mechanism for directors and employees to report genuine concerns had been framed and implemented. This policy provides a process to disclose information, confidentially and without fear of victimization, where there is reason to believe that there has been serious malpractice, fraud, impropriety, abuse or wrong doing within the Company. The policy safeguards the whistle blowers to report concerns or grievances and also provides a direct access to the Chairman of the Audit Committee. During the year under review, none of the personnel has been denied access to the Chairman of the Audit Committee. The policy has been uploaded on the website of the Company and is available at the weblink at http://www.greenply.com/images/pdf/ Vigil_Mechanism_Policy_1.pdf

Nomination and Remuneration Committee

As on 31st March, 2019, the Companys Nomination and Remuneration Committee comprises of three Non-Executive Independent Directors viz. Mr. Susil Kumar Pal, Mr. Vinod Kumar Kothari, Mr. Anupam Kumar Mukerji and one Executive-Promoter Director Mr. Shiv Prakash Mittal. The Remuneration Policy of the Company is uploaded on the website of the Company. The weblink is http:// www.greenply.com/images/pdf/Remuneration_policy. pdf. The terms of reference and other details of the Nomination and Remuneration Committee has also been provided in the Corporate Governance Report. However, brief outline of the Remuneration Policy is as follows: The Remuneration Policy applies to all the "Executives" of the Company. The Policy also helps the Company to attain Board diversity and creates a basis for succession planning. In addition, it is intended to ensure that–a) the Company is able to attract, develop and retain high-performing and motivated Executives in a competitive international market; b) the Executives are offered a competitive and market aligned remuneration package, with fixed salaries being a significant remuneration component, as permissible under the Applicable Law; c) remuneration of the Executives are aligned with the Companys business strategies, values, key priorities and goals.

In framing the aforesaid Remuneration Policy, the Nomination and Remuneration Committee ensures that a competitive remuneration package for all Executives is maintained and is also benchmarked with other multinational companies operating in national and global markets.

The nomination of the Independent Directors of the Company shall be in accordance with the principles as stated under the said Policy.

The assessment for Functional Heads are done on the basis of below parameters by the concerned interview panel of the Company -a) Competencies b) Capabilities c) Compatibility d) Commitment e) Character f ) Strong interpersonal skills g) Culture among others.

The various remuneration components would be combined to ensure an appropriate and balanced remuneration package.

The five remuneration components are -

fixed remuneration (including fixed supplements) performance based remuneration (variable salary) pension schemes, where applicable other benefits in kind severance payment, where applicable The fixed remuneration is determined on the basis of the role and position of the individual, including professional experience, responsibility, job complexity and local market conditions.

The performance-based remuneration motivates and rewards high performers who significantly contribute to sustainable results, perform according to set expectations for the individual in question, and generates stakeholder value within the Group.

Any fee/remuneration payable to the Non-Executive directors of the Company shall abide by the following norms -i. If any such director draws or receives, directly or indirectly, by way of fee/remuneration any such sums in excess of the limit as prescribed or without the prior sanction, where it is required, under the Applicable law such remuneration shall be refunded to the Company and until such sum is refunded, hold it in trust for the Company. The Company shall not waive the recovery of any sum refundable to it; ii. Such directors may receive remuneration by way of fee for attending meetings of the Board or Committee thereof or for any other purpose whatsoever as may be decided by the Board, as permissible under Applicable law; iii. An independent director shall not be entitled to any stock option and may receive remuneration only by way of fees and reimbursement of expenses for participation in meetings of the Board or Committee thereof and profit related commission, as may be permissible by the Applicable law.

Stakeholders Relationship Committee

As on 31st March, 2019, the Stakeholders Relationship Committee comprises two executive Promoter Directors viz. Mr. Rajesh Mittal and Mr. Shobhan Mittal and two Non-Executive Independent Directors viz. Mr. Anupam Kumar Mukerji and Mr. Susil Kumar Pal. The detailed terms of reference and other details of the Committee has been provided in the Corporate Governance Report.

Risk Management Policy

The Company has a Risk Management system for identification and mitigation of various risks. On the basis of risk assessment criteria, your Company has identified risks as minor/moderate/important/material or severe depending on their impact on turnover, profit after tax and return on capital employed. A risk library wherein the Company has allotted scores to the risks based on risk significance and risk likelihood. On the basis of risk scores the Company has identified few material risks for the organization. The risks scores were initially done at the level of Operational Heads of Finance & Accounts, Sales, Production and HR and finally assessment was done based on scores given by an internal committee of the Company. However, the risks are dynamic and the Company will be adding new risks and removing some of the existing risks as and when the Company develop solutions for the existing risks. Accordingly, the Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. The Audit Committee of the Board evaluating risks management system of the company on quarterly basis.

Extract of the annual return

The extract of Annual Return, as at the Financial Year ended March 31, 2019, as required under section 134(3) (a) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014 in Form No. MGT-9, is annexed to this Report. The same will be available on the website of the Company i.e. http://www.greenply.com/investors as a part of the Annual Report.

Material changes and commitments

Except as disclosed elsewhere in this Report, there have been no material changes and commitments affecting the financial position of the Company since the close of financial year i.e. since 31st March, 2019 till the date of this Report. Further, it is hereby confirmed that there has been no change in the nature of business of the Company except as disclosed in this report.

Significant and material orders passed by the Regulators / Courts / Tribunals impacting the going concern status and the Companys operations in future

As such there is no significant and material order has been passed by any Regulator/Court/Tribunals impacting the going concern status and the Companys operations in future.

Internal financial controls

The Directors had laid down Internal Financial Controls procedures to be followed by the Company which ensure compliance with various policies, practices and statutes in keeping with the organizations pace of growth and increasing complexity of operations for orderly and efficient conduct of its business. The Audit

Committee of the Board, from time to time, evaluated the adequacy and effectiveness of internal financial control of the Company with regard to:

1. Systems have been laid to ensure that all transactions are executed in accordance with managements general and specific authorization. There are well-laid manuals for such general or specific authorization.

2. Systems and procedures exist to ensure that all transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles or any other criteria applicable to such statements, and to maintain accountability for aspects and the timely preparation of reliable financial information.

3. Access to assets is permitted only in accordance with managements general and specific authorization. No assets of the Company are allowed to be used for personal purposes, except in accordance with terms of employment or except as specifically permitted.

4. The existing assets of the Company are verified/ checked at reasonable intervals and appropriate action is taken with respect to any differences, if any.

5. Proper systems are in place for prevention and detection of frauds and errors and for ensuring adherence to the Companys policies.

Further, the certificate from Chairman cum Managing Director and Chief Financial Officer, in terms of Regulation 17(8) of the SEBI Listing Regulations, provided in this Annual Report, also certifies the adequacy of our Internal Control systems and procedures.

Insurance

Your Companys properties, including building, plant, machineries and stocks, among others, are adequately insured against risks.

Particulars of loans/advances/investments as required under Schedule V of the Listing Regulations

The details of related party disclosures with respect to loans/advances/investments at the year end and maximum outstanding amount thereof during the year as required under Part A of Schedule V of the Listing Regulations have been provided in the notes to the Financial Statements of the Company. Further, there was no transaction with person or entity belonging to the promoter/promoter group which hold(s) 10% or more shareholding in the Company as per Para 2A of the aforesaid Schedule.

Loans/advances, guarantee and investments under Section 186 of the Companies Act, 2013

Details of loans/advances granted, guarantees given and investments made during the year under review, covered under the provisions of Section 186 of the Companies Act, 2013 are annexed to this Report.

Public Deposits

During the financial year 2018-19, the Company did not invite or accept any deposits from the public under the Companies Act, 2013.

Listing of shares

The Equity Shares of the Company are listed on the BSE Limited (BSE) with scrip code No. 526797 and on National Stock Exchange of India Limited (NSE) with scrip symbol GREENPLY. The Company confirms that the annual listing fees to both the stock exchanges for the financial year 2019-20 have been duly paid.

Related party transactions

There are no materially significant related party transactions made by the Company which may have potential conflict with the interest of the Company. Related party transactions that were entered into during the year under review were on arms length basis and were in ordinary course of business. The Particulars of material related party transaction, if any, is provided in Form AOC-2 as required under section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014. Further, suitable disclosure as required by the Accounting Standards (Ind AS 24) has been made in the notes to the Financial Statements.

The Board has approved a policy for related party transactions which has been uploaded on the Companys website. The web link as required under Listing Regulations is as under: http://www.greenply. com/images/pdf/Related_Party_Transactions_Policy. pdf

Corporate Governance

Your Company is committed to observe good Corporate Governance practices. The report on Corporate Governance for the financial year ended March 31, 2019, as per Regulation 34(3) read with Schedule V of the Listing Regulations forms part of this Annual Report and annexed to this Report. The requisite certificate from Statutory Auditors, M/s. B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 101248W/W-100022) confirming compliance with the conditions of corporate governance, is attached to this Annual Report.

Management Discussion and Analysis Report

The Report on Management Discussion and Analysis Report in terms of Regulation 34, read with Schedule V of the Listing Regulations, forms part of this Annual Report and is annexed to this Report. Certain Statements in the said report may be forward looking. Many factors may affect the actual results, which could be different from what the Directors envisage in terms of the future performance and outlook.

Policy on Sexual Harassment of Women at Workplace

The Company has in place a Policy on prevention of Sexual Harassment in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.

Further, the Company has complied with the provisions relating to constitution of Internal Complaints Committee under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

No complaint was filed under Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013 during the year under review.

Conservation of energy, technology absorption, foreign exchange earnings and outgo

The particulars related to the 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 annexed to this Report.

Corporate Social Responsibility

As on 31st March, 2019, the Corporate Social Responsibility Committee (CSR Committee) comprises two executive Promoter Directors viz. Mr. Rajesh Mittal and Mr. Shobhan Mittal and two Non-Executive Independent Directors viz. Mr. Vinod Kumar Kothari and Mr. Upendra Nath Challu. The terms of reference of the Committee has been provided in the Corporate Governance Report. CSR Committee has formulated a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has also been approved by the Board. The CSR Policy may be accessed on the Companys website at the link http://www.greenply.com/images/ pdf/Corporate-Social-Responsibility-Policy.pdf Further, the CSR activities carried out during the Financial Year ended 31st March, 2019 in the format prescribed under Rule 9 of the Companies (Accounts) Rules, 2014 is annexed to this Report.

Directors Responsibility Statement

In terms of provisions of Section 134(3)(c) and Section 134(5) of the Companies Act, 2013, your directors state that: (i) in preparation of the Annual Accounts for the financial year ended March 31, 2019, the applicable

Accounting Standards have been followed along with proper explanation relating to material departures; (ii) the Directors had selected such Accounting Policies as listed in the Financial Statements and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year as on March 31, 2019 and of the profits of the Company for that period; (iii) the directors had 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) the directors had prepared the Annual Accounts on a going concern basis; (v) the directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

(vi) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CEO and CFO certification

Pursuant to the Listing Regulations, the Chairman cum Managing Director and CFO certification is attached with the Annual Report. The Chairman cum Managing Director and the Chief Financial Officer also provide quarterly certification on financial results while placing the financial results before the Board in terms of the Listing Regulations.

Code of Conduct for Directors and senior management personnel

The Code of Conduct for Directors and Senior Management Personnel is posted on the Companys website. The Chairman cum Managing Director of the Company has given a declaration that all Directors and Senior Management Personnel concerned, affirmed compliance with the Code of Conduct with reference to the year ended on March 31, 2019. Declaration is attached with the annual report.

Disclosure regarding compliance of applicable Secretarial Standards

The company has complied with all the mandatorily applicable secretarial standards issued by The Institute of Company Secretaries of India and approved by the Central Government under Section 118(10) of the Companies Act, 2013.

Corporate Governance and Compliance certificate regarding compliance of conditions of Corporate Governance

A detailed Report on Corporate Governance for the financial year 2018-19, pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the certificate received from M/s. B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 101248W/W-100022), Statutory Auditors of the Company, to the effect of compliance of conditions of Corporate Governance as required under Schedule V of the Listing Regulations are annexed with the Report.

Business Responsibility Report

The Business Responsibility Report, describing the initiatives taken by the Company during the period under review from an environmental, social and governance perspective, has been annexed to this Report.

Fraud Reporting

There was no fraud reported by the Auditors of the Company under sub-section (12) of section 143 of the Companies Act, 2013, to the Audit Committee or the Board of Directors during the year under review.

Disclosures with respect to Demat Suspense Account/ Unclaimed Suspense Account

The relevant details in this regard have been provided in the Corporate Governance Report annexed to this Report.

Particulars of employees

The information required under section 197 of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this Report.

Acknowledgements

Your Directors place on record their sincere thanks and appreciation for the continuing support of financial institutions, consortium of banks, vendors, clients, investors, Central Government, State Governments and other regulatory authorities. The Directors also place on record their heartfelt appreciation for the commitment and dedication of the employees of the Company across all the levels who have contributed to the growth and sustained success of the Company.

For and on behalf of the Board of Directors

Rajesh Mittal
Chairman cum Managing Director
DIN: 00240900
Place: Kolkata
Date: August 14, 2019