Your Directors have pleasure in presenting their 27th Annual Report on the business andoperations of the Company along with the Audited Accounts of the Company for the FinancialYear ended March 31 2017.
The financial performance of your Company for the year ended March 31 2017 issummarized below:
| ||(Rs in lacs) |
|Particulars ||2016-17 ||2015-16 |
| ||Standalone ||Consolidated ||Standalone ||Consolidated |
|Turnover ||176882.53 ||177344.71 ||171349.48 ||171311.01 |
|Profit before finance charges Tax Depreciation/ Amortization (PBITDA) ||25759.72 ||25090.24 ||25050.32 ||24875.55 |
|Less: Finance Charges ||1811.77 ||1891.94 ||2891.07 ||2938.78 |
|Profit before Depreciation/Amortization (PBTDA) ||23947.95 ||23198.30 ||22159.25 ||21936.77 |
|Less: Depreciation ||4853.09 ||5066.28 ||4900.94 ||4968.40 |
|Net Profit before Taxation (PBT) ||19094.86 ||18132.02 ||17258.31 ||16968.37 |
|Provision for taxation ||5587.65 ||5587.65 ||4141.66 ||4141.66 |
|Profit/(Loss) after Taxation (PAT) ||13507.21 ||12544.37 ||13116.65 ||12826.71 |
|Transfer to General Reserve ||6500.00 ||6500.00 ||6500.00 ||6500.00 |
RESULT OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS
During the year under review your Company posted a stable performance with revenue ofRs 176882.53 lacs as against Rs 171349.48 lacs in the previous year. Profit for the year2016-17 was Rs 13507.21 lacs as against Rs 13116.65 lacs in the previous year.
Exports during the year 2016-17 was Rs 2738.49 lacs. Your Company is continuouslytrying to locate new export markets for its products and see good potential for growth inthe exports business. As per the consolidated financial statements the revenue fromoperation and profit for the year 2016-17 were Rs 177344.71 lacs and Rs 12544.37 lacsrespectively as against Rs 171311.01 lacs and Rs 12826.71 lacs in the previous year.
Your Company continues to retain and reinforce its market share under organised sectorwith 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 homebuilders having a comprehensive product portfolio servicing clients at every point of theprice spectrum. Your Company is present across different price points to cater to theneeds of all customers across the high-end mid-market and value-for-money segments.During the year under review your
Company continuously trying to locate new markets for its business venture of tradingin wallpaper of different categories sourced from various overseas suppliers and marketedin India under the Company's brand.
OUTLOOK AND EXPANSION
The Company's pan-India distribution network ensures easy availability of products inalmost every part of India. The Company's outlook remains favourable on account of itsproduct integration capabilities increasing brand visibility and the continuous supportfrom its stakeholders. Wood panel market is one of the major verticals of the interiorinfrastructure comprising materials used in building furniture. Such materials includeplywood engineered wood panels and decorative surface products. Your Company is currentlyoperating primarily in the structural sphere of interior infrastructure domain with almostall the products in its basket catering to the structural needs of the customers. Thedemand for readymade furniture manufactured with engineered panels like MDF is rapidlygrowing. The real estate industry is one of the most significant growth drivers for theplywood sector. Your company also focused on the value added products to improve margin.Goods and Services (GST) Tax scheduled to be effective from 1st July 2017 is expected tobolster the economy with a simplified indirect tax system and more competitive andtransparent markets.
Indian furniture industry is one of the world's largest furniture markets. It isprimarily driven by a substantial middle-class population rapid urbanisation favourabledemographics increasing per capita income and growing nuclear families. This willencourage strong demand growth for plywood and MDF. Reconstituted wood products such asplywood board and medium density fibreboards are likely to be used increasingly byconsumers real estate developers furniture makers railways and defence are amongothers users. Innovations and use of technology shall help the wood industry to growprofitably and leverage opportunities in the future.
Going forward there is an increasing shift being witnessed towards the organisedsector owing to brand and quality awareness. With wider choice product innovation andwarranty being offered by organised players customers are putting more focus on thissegment.
In respect of setting-up of new MDF manufacturing unit in Chittoor Andhra Pradeshnecessary steps are being taken to obtain the remaining statutory approvals/licenses toset-up the Unit. Contracts with the principal Process Equipment Suppliers EngineeringConsultancy Services major Civil & Fabrication contractors major ElectricalContractors & Suppliers have been executed/ are in the process of execution. Civilconstruction and Structural work are in progress. Majority of the imported machinerieshave reached the project site and the same are under process of installation. The saidfacility is expected to be commissioned in FY 2019.
In respect of setting-up of new Veneer Lumber and Panel products manufacturing unit atNkok SEZ Gabon West Africa through step-down wholly owned subsidiary Greenply Gabon SAthe construction of the first shed has been completed. Peeling lines along with dryers andother ancillary machineries have arrived at the project site and installed. Raw materialhas begun to arrive at the site and trial runs is under process. The unit will startcommercial production of Veneer shortly.
In respect of setting-up of a new unit adjacent to the existing unit of the Company inBamanbore Gujarat for manufacturing of decorative plywood/decorative veneers theCompany has discussed with vendors and finalized the machineries and civil constructionwork for the upcoming unit.
In respect of setting-up of a new unit in Sandila Industrial Area Sandila Dist:Hardoi Uttar Pradesh for manufacturing of Plywood and its allied products the Companyhas made an application for the allotment of land with respective government authority.
Your Directors are confident of achieving better results in the coming years.
SUBSIDIARIES AND JOINT VENTURE
Presently your Company has three overseas wholly owned subsidiaries viz.(i) GreenplyTrading Pte. Ltd. Singapore engaged in the business of trading and marketing of veneerspanel products wooden flooring & allied products and also investments in companiesengaged in manufacturing and trading of said products.(ii) Greenply Holdings Pte. Ltd.Singapore with the objective to hold the investment (presently held by Greenply TradingPte. Limited Singapore) in Greenply Alkemal (Singapore) Pte. Ltd. Singapore. (iii)Greenply Middle East Limited Dubai UAE with the objective to manage control and holdinvestment in Greenply Gabon SA Gabon West Africa and general trading business.
Further your Company has an overseas step-down wholly owned subsidiary viz. GreenplyGabon SA Gabon West Africa (Subsidiary of Greenply Middle East Limited Dubai UAE)with the objective to manage and control the proposed veneer lumber and panel productsmanufacturing unit at Nkok SEZ in Gabon West Africa.
Your Company also has one overseas joint venture namely Greenply Alkemal (Singapore)Pte. Ltd. (a joint venture company of Greenply Industries Limited India through itswholly owned subsidiary Greenply Trading Pte.Ltd. Singapore and Alkemal Singapore Pte.Ltd. Singapore) engaged in the business of trading and marketing of commercial veneersand panel products. Further the joint venture Company also control the Myanmar basedCompany which is engaged in the business of manufacturing and trading of veneer andlumber.
The statement in form AOC-1 containing the salient features of the financial statementsof subsidiaries/ associate companies/joint ventures pursuant to first proviso tosub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules 2014 isannexed to this Report. Further the contribution of Greenply Trading Pte. Ltd.Singapore Greenply
Holdings Pte. Ltd. Singapore and Greenply Middle East Limited Dubai UAE whollyowned subsidiaries to overall performance of the Company during the year under review ismentioned in Note no. 4.1 of the Consolidated Financial Statements.
CHANGE(S) IN THE NATURE OF BUSINESS
There has been no change in the nature of business of the Company.
CONSOLIDATED FINANCIAL STATEMENTS
For the period under review the Company has consolidated the financial statements ofits wholly owned subsidiaries viz. Greenply Trading Pte. Ltd. Singapore GreenplyHoldings Pte. Ltd. Singapore and Greenply Middle East Limited Dubai (UAE). In accordancewith third proviso of Section 136(1) of the Companies Act 2013 the Annual Report of theCompany containing therein its standalone and the consolidated financial statements hasbeen placed on the website of the Company www.greenply.com. Further as per fourthproviso of the said section audited annual accounts of the subsidiary companies and JointVenture 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 thesubsidiary companies and Joint Venture Company may write to the Company Secretary at theCompany's registered office. A statement containing salient features of the financialstatements of subsidiary/associate companies/joint venture in form AOC -1 is annexed tothis Report.
During the year "Credit Analysis and Research Ltd. (CARE)"and "IndiaRatings & Research" have re-affirmed our external credit rating for both longterm and short term borrowings as detailed below:
|Rating Agency ||Instrument ||Rating |
|CARE ||Banking Facilities Long Term ||CARE AA- |
|CARE ||Banking Facilities Short Term ||CARE A1+ |
|CARE ||Short Term Debt (including Commercial Paper) ||CARE A1+ |
|India Ratings & Research ||Banking Facilities Long Term ||IND AA- |
|India Ratings & Research ||Banking Facilities Short Term ||IND A1+ |
|India Ratings & Research ||Short Term Debt (including Commercial Paper) ||IND A1+ |
Above credit rating reflects Company's commitment and capability to persistent growththrough prudence and focus on financial discipline.
Your Directors recommend a final dividend of 60% i.e. Rs 0.60 per equity share(previous year 60% i.e. Rs 0.60 per equity share of Rs 1/-) on the Company's122627395 equity shares of Rs 1/- each for financial year 2016-17. The final dividend onthe equity shares if declared as above would involve an outflow of Rs 735.76 lacstowards dividend and Rs 149.78 lacs towards dividend distribution tax resulting in atotal outflow of Rs 885.54 lacs.
TRANSFER TO RESERVES
Your Directors propose to transfer Rs 6500 lacs to the General Reserve.
CHANGES IN SHARE CAPITAL
Pursuant to a special resolution passed by the members of the Company through postalballot voting (including e-voting) process on 31st July 2016 (the last date specified bythe Company for receipt of duly completed postal ballot forms or e-voting) for issuanceof equity shares including convertible bonds/ debentures through Qualified InstitutionalPlacement (QIP) and / or depository receipts and / or any other modes for an amount notexceeding Rs 1000 million the Company has issued and allotted 1945525 equity shares offace value of Rs 1 each through QIP to Qualified Institutional Buyers at the issue priceof Rs 257 per equity share aggregating to Rs 499999925. Accordingly issuedsubscribed & paid up share capital of the Company has been increased from Rs 1206.82lacs (120681870 equity shares of Rs 1 each) to Rs 1226.27 lacs (122627395equity shares of Rs 1 each). The objects of the QIP was to use the gross proceeds of theissue for the purpose of setting-up new MDF manufacturing unit in Chittoor AndhraPradesh. Pursuant to Regulation 32 of the Listing Regulations your directors confirm thatthere has been no deviation in the use of QIP proceeds from the objects stated in thePlacement Document dated August 12 2016.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Shiv Prakash Mittal [DIN: 00237242] Executive Chairman ofthe Company will retire by rotation at the ensuing Annual General Meeting and is eligiblefor re- appointment.
The Board of Directors at their meeting held on 24th January 2017 subject to approvalof members of the Company has accorded their approval to re-appoint Mr. Shiv PrakashMittal as the Executive Chairman of the Company for a further period of 5 years w.e.f.01.02.2017 on the existing terms and conditions including remuneration. During theproposed tenure commencing w.e.f. 01.02.2017 Mr. Shiv Prakash Mittal would be attainingthe age of 70 years and hence his re-appointment would require approval of members of theCompany by way of passing of special resolution in terms of Part I of Schedule V of theCompanies Act 2013. The same was recommended to the Board of Directors by the Nominationand Remuneration Committee at its meeting held on 24th January 2017. The detailed termsand conditions including remuneration have been mentioned in the Notice convening 27thAnnual General Meeting. Further the details of Mr. Shiv Prakash Mittal [DIN: 00237242] asrequired under Listing Regulations and SS-2 have also been provided in the CorporateGovernance Report and the Notice of 27th Annual General Meeting.
During the year under review the Company has received all necessary approvals from theconcerned authorities regarding re-appointment of Mr. Shobhan Mittal [DIN: 00347517] as aJoint Managing Director & CEO of the Company for a period of five years with effectfrom September 1 2016.
None of the Directors of your Company is disQualified under the provisions of Section164(2)(a) & (b) of the Companies Act 2013.
DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors of the Company have given their declarations to the Companyto the effect of meeting the criteria of independence as provided in Section 149 (7) readwith Section 149(6) of the Companies Act 2013 and Listing Regulations.
MEETINGS OF THE BOARD OF DIRECTORS
Six (6) Board Meetings were held during the financial year ended 31st March 2017. Thedetails of the Board Meetings with regard to their dates and attendance of each of theDirectors there at have been provided in the Corporate Governance Report.
Pursuant to the provisions of the Companies Act 2013 and Listing Regulations theBoard has carried out the annual performance evaluation of the Directors individually aswell as evaluation of the working of the Board and of the Committees of the Board by wayof individual and collective feedback from Directors.
Pursuant to Para VII of Schedule IV of the Companies Act 2013 and Listing Regulationsa meeting of the Independent Directors of the Company was convened on March 16 2017 toperform the following:
review the performance of non-independent directors and the Board as a whole;
review the performance of the Chairperson of the Company taking into accountthe views of executive directors and non-executive directors;
Assess the quality quantity and timeliness of flow of information between the Companymanagement and the Board that is necessary for the Board to effectively and reasonablyperform their duties.
Further the Nomination and Remuneration Committee also evaluated the performance ofall 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 Directors expressed their satisfaction with the evaluation process.
The details of the familiarisation programme undertaken have been provided in theCorporate Governance Report along with the web link thereof.
As per the provisions of Section 197 of the Companies Act 2013 read with Rule 5(1) ofthe Companies (Appointment and Remuneration of managerial personnel) Rules 2014 theCompany is required to disclose the following information in the Board's Report.
(a) ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year;
|Name ||Designation ||Ratio to median remuneration of employees |
|Mr. Shiv Prakash Mittal ||Executive Chairman ||347.45 |
|Mr. Rajesh Mittal ||Managing Director ||339.60 |
|Mr. Shobhan Mittal ||Joint Managing Director & CEO ||228.83 |
|Mr. Moina Yometh Konyak ||Non-executive Director ||6.42 |
|Mr. Susil Kumar Pal ||Independent Director ||6.42 |
|Mr. Vinod Kumar Kothari ||Independent Director ||6.42 |
|Mr. Anupam Kumar Mukerji ||Independent Director ||6.42 |
|Ms. Sonali Bhagwati Dalal ||Independent Director ||6.42 |
|Mr. Upendra Nath Challu ||Independent Director ||6.42 |
(b) percentage increase in remuneration of each director Chief Financial officerChief Executive officer Company Secretary or Manager if any in the financial year;
|Name ||Designation ||% increase |
|Mr. Shiv Prakash Mittal ||Executive Chairman ||05.32 |
|Mr. Rajesh Mittal ||Managing Director ||05.45 |
|Mr. Shobhan Mittal ||Joint Managing Director & CEO ||-19.21 |
|Mr. Moina Yometh Konyak ||Non-executive Director ||00.00 |
|Mr. Susil Kumar Pal ||Independent Director ||00.00 |
|Mr. Vinod Kumar Kothari ||Independent Director ||00.00 |
|Mr. Anupam Kumar Mukerji ||Independent Director ||00.00 |
|Ms. Sonali Bhagwati Dalal ||Independent Director ||00.00 |
|Mr. Upendra Nath Challu ||Independent Director ||00.00 |
|Mr. Vishwanathan Venkatramani ||Chief Financial officer ||06.00 |
|Mr. Kaushal Kumar Agarwal ||Company Secretary & Vice President-Legal ||08.00 |
(c) percentage increase in the median remuneration of employees in the financial year2016-17;
(d) number of permanent employees on the rolls of Company;
(e) average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration;
7.81% (non-Managerial personnel) - 1.37% (Managerial Personnel)
(f) We hereby affirm that the remuneration paid to the Executives is as per theRemuneration Policy of the Company approved by the Board of Directors.
(g) Managing Directors and Whole-time Directors of the Company do not receive anycommission from its subsidiary companies. However Mr. Shobhan Mittal JointManaging Director & CEO of the Company is drawing remuneration from Greenply TradingPte. Ltd. WOS of the Company.
All elements of remuneration package as required under Listing Regulations have beenprovided in the Corporate Governance Report.
STATUTORY AUDITORS AND THEIR REPORT
As per the provisions of Section 139 of the Companies Act 2013 the term of office ofM/s. D. Dhandaria & Company Chartered Accountants (Firm Registration no. 306147E) asStatutory Auditors of the Company will conclude from the close of the forthcoming AnnualGeneral Meeting of the Company. The Board of Directors places on record its appreciationfor the services rendered by M/s. D. Dhandaria & Company as the Statutory Auditors ofthe Company.
Subject to the approval of the Members the Board of Directors of the Company hasrecommended the appointment of M/s. B S R & Co. LLP Chartered Accountants (ICAI FirmRegistration No. 101248W/W-100022) as the Statutory Auditors of the Company pursuant toSection 139 of the Companies Act 2013. Members' attention is drawn to a Resolutionproposing the appointment of M/s. B S R & Co. LLP Chartered Accountants (ICAI FirmRegistration No. 101248W/W-100022) as Statutory Auditors of the Company which is includedat Item No.4 of the Notice convening the Annual General Meeting.
The Notes on Financial Statements referred to in the Auditors' Report areself-explanatory and therefore do not call for further clarification. The Auditor'sReport for Financial Year ended March 31 2017 does not have any Qualifications.
During the year under review cost audit was not applicable to the Company.
The Company has in-house Internal Audit team headed by Qualified and experiencedExecutive. The scope functioning periodicity and methodology for conducting internalaudit were approved by the Board of Directors and reviewed by the Audit Committee fromtime to time. Further the Audit committee discussed and reviewed the adequacy of internalaudit function including the structure of the internal audit department staffng andseniority of the official heading the department reporting structure coverage andfrequency of internal audit.
The Board of Directors of the Company had appointed M/s. Nidhi Bagri & CompanyPractising Company Secretary (Membership No. ACS 24765/COP No.9590) Kolkata to conductSecretarial Audit for the financial year 2016-17. The Secretarial Audit Report of M/s.Nidhi Bagri & Company Practising Company Secretary in Form MR-3 for the financialyear ended 31st March 2017 is annexed to this report.
RESPONSE TO SECRETARIAL AUDITOR'S OBSERVATION
It has been observed by the Secretarial Auditor that during the financial year 2016-17the Company has spent Rs 226.84 Lacs towards CSR activities which is less than 2% of theaverage net profit of last 3 financial years. In response to the same your Company wouldlike to submit that during the year under review the Company has undertaken CSRactivities directly and through its Trust namely GREENPLY FOUNDATION. The Trust hasutilized unspent amount lying with it as on 31.03.2016 for the CSR activities. Further tomaintain the integrity of CSR expenditure the Company has transferred Rs 240.00 lacs tothe Trust during FY 2016-17. The Company has spent Rs 226.84 lacs towards CSR activities(directly and through Trust-Greenply Foundation) during the year which is less than theminimum allocation of CSR being 2% of the average net profit of last 3 financialyears amounting to Rs 307.26 lacs in total. Though the Company has actuallycontributed more than the aforesaid amount of minimum allocation during FY 2016-2017 however the same could not be fully utilized by few Implementing Agencies as on31.03.2017. The Trust has also earned Rs 7.01 lacs on temporary investment with Banksduring FY 2016-17. The unutilized fund lying with the Trust as on 31.03.2017 amounting toRs 144.84 lacs (net of liabilities of Rs 0.45 lacs) and unutilized fund lying with theImplementing Agencies as on 31.03.2017 will be used for CSR activities along with freshfunding if any from the Company during FY 2017-18. The Company is committed to theunderlying intent of CSR and is optimistic of meeting its obligations under section 135 ofthe Companies Act 2013 and thereby make a positive impact on the society.
The Company's Audit Committee comprises of four Non-Executive Independent Directorsviz. 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 ofInternal Auditors compliance of various regulations and evaluates the internal financialcontrols and risk management system of the Company. The Committee also reviews at lengththe Financial Statements and results before they are placed before the Board. The terms ofreference of the Audit Committee and other details have been provided in the CorporateGovernance Report.
In pursuance to the provisions of section 177(9) & (10) of the Companies Act 2013and erstwhile equity listing agreement a vigil mechanism or Whistle Blower Policy'for directors and employees to report genuine concerns had been established andimplemented. The policy safeguards the whistle blowers to report concerns or grievancesand also provides a direct access to the Chairman of the Audit Committee. During the yearunder review none of the personnel has been denied access to the Chairman of the AuditCommittee. The policy has been uploaded on the website of the Company and is available atthe weblink at http://www.greenply.com/images/pdf/ Vigil_Mechanism_Policy.pdf.
NOMINATION AND REMUNERATION COMMITTEE
The Company's Nomination and Remuneration Committee comprises of three Non-ExecutiveIndependent Directors viz. Mr. Susil Kumar Pal Mr. Vinod Kumar Kothari Mr. AnupamKumar Mukerji and one Executive-Promoter Director Mr. Shiv Prakash Mittal. TheRemuneration Policy of the Company is uploaded on the website of the Company. The weblinkis http://www.greenply.com/images/ pdf/Greenply-remuneration-policy.pdf. The terms ofreference and other details of the Nomination and Remuneration Committee has also beenprovided in the Corporate Governance Report. However brief outline of the RemunerationPolicy is as follows:
The Remuneration Policy applies to all the "Executives" of the Company. ThePolicy also helps the Company to attain Board diversity and creates a basis for successionplanning. In addition it is intended to ensure that
a) the Company is able to attract develop and retain high-performing and motivatedExecutives in a competitive international market;
b) the Executives are offered a competitive and market aligned remuneration packagewith fixed salaries being a significant remuneration component as permissible under theApplicable Law;
c) remuneration of the Executives are aligned with the Company's business strategiesvalues key priorities and goals.
In framing the aforesaid Remuneration Policy the Nomination and Remuneration Committeeensures that a competitive remuneration package for all Executives is maintained and isalso benchmarked with other companies operating in national and global markets.
The nomination of the Independent Directors of the Company shall be in accordance withthe principles as stated under the said Policy.
The assessment for Functional Heads are done on the basis of below parameters by theconcerned interview panel of the Company
f) Strong interpersonal skills
g) Culture among others.
The various remuneration components would be combined to ensure an appropriate andbalanced remuneration package.
The five remuneration components are - fixed remuneration (including fixed supplements)performance based remuneration (variable salary) pension schemes where applicable otherbenefits in kind severance payment where applicable
The fixed remuneration is determined on the basis of the role and position of theindividual including professional experience responsibility job complexity and localmarket conditions.
The performance-based remuneration motivates and rewards high performers whosignificantly contribute to sustainable results perform according to set expectations forthe individual in question and generates stakeholder value within the Group.
Any fee/remuneration payable to the Non-Executive directors of the Company shall abideby the following norms
i. If any such director draws or receives directly or indirectly by way offee/remuneration any such sums in excess of the limit as prescribed or without the priorsanction where it is required under the Applicable law such remuneration shall berefunded 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 theBoard or Committee thereof or for any other purpose whatsoever as may be decided by theBoard as permissible under Applicable law;
iii. An independent director shall not be entitled to any stock option and may receiveremuneration only by way of fees and reimbursement of expenses for participation inmeetings of the Board or Committee thereof and profit related commission as may bepermissible by the Applicable law.
Apart from above the Policy also entitles Executives to a severance fee.
STAKEHOLDERS RELATIONSHIP COMMITTEE
The Stakeholders Relationship Committee comprises two 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 otherdetails of the Committee has been provided in the Corporate Governance Report.
RISK MANAGEMENT POLICY
On the basis of risk assessment criteria your Company has identified risks asminor/moderate/important/ material or severe depending on their impact on turnover profitafter tax and return on capital employed. A risk library wherein the Company has allottedscores to the risks based on risk significance and risk likelihood. On the basis of riskscores the Company has identified few material risks for the organisation. The risksscores were initially done at the level of Operational Heads of Finance & AccountsSales Production and HR and finally assessment was done based on scores given by aninternal committee of the Company. However the risks are dynamic and the Company will beadding new risks and removing some of the existing risks as and when the Company developsolutions for the existing risks. Accordingly the Company has in place a mechanism toidentify assess monitor and mitigate various risks to key business objectives. The AuditCommittee of the Board evaluating risks management policy of the company on quarterlybasis.
EXTRACT OF THE ANNUAL RETURN
The extract of Annual Return as required under section 134(3) (a) of the Companies Act2013 read with Rule 12(1) of the Companies (Management and Administration) Rules 2014 inForm No. MGT-9 is annexed to this Report.
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments affecting the financial position ofthe Company since the close of financial year i.e. since 31st March 2017 till the date ofthis Report. Further it is hereby confirmed that there has been no change in the natureof business of the Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS / TRIBUNALS IMPACTINGTHE GOING CONCERN STATUS AND THE COMPANY'S OPERATIONS IN FUTURE
As such there is no significant and material order has been passed by anyRegulator/Court/Tribunals impacting the going concern status and the Company's operationin future.
INTERNAL FINANCIAL CONTROLS
Your Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting are operating effectively based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol. Your Company had laid down guidelines policies procedures and structure forappropriate internal financial controls across the company. These control processes enableand ensure orderly and efficient conduct of Company's business including safeguarding ofassets prevention and detection of frauds and errors the accuracy and completeness ofthe accounting records and timely preparation & disclosure of financial statements.Review and control mechanisms are built in to ensure that such control systems areadequate and operating effectively. The Audit Committee evaluated the internal financialcontrols based on the following criteria:
1. Systems have been laid to ensure that all transactions are executed in accordancewith management's general and specific authorization. There are well-laid manuals for suchgeneral or specific authorization.
2. Systems and procedures exist to ensure that all transactions are recorded asnecessary to permit preparation of financial statements in conformity with generallyaccepted accounting principles or any other criteria applicable to such statements and tomaintain accountability for aspects and the timely preparation of reliable financialinformation.
3. Access to assets is permitted only in accordance with management's general andspecific authorization. No assets of the Company are allowed to be used for personalpurposes except in accordance with terms of employment or except as specificallypermitted.
4. The existing assets of the Company are verified/ checked at reasonable intervals andappropriate action is taken with respect to any differences if any.
5. Proper systems are in place for prevention and detection of frauds and errors andfor ensuring adherence to the Company's policies.
A report on the internal financial controls under clause (i) of sub-section 3 ofSection 143 of the Companies Act 2013 issued by M/s. D. Dhandaria & CompanyChartered Accountants Statutory Auditors of the Company is attached with theirIndependent Auditor's report and the same is self-explanatory.
INDIAN ACCOUNTING STANDARDS _IND AS_ _ IFRS CONVERGED STANDARDS
Your Company has adopted Ind AS with effect from April 1 2016 pursuant to Ministry ofCorporate Affairs notification dated February 16 2015 notifying the Companies (IndianAccounting Standard) Rules 2015.
Your Company's properties including building plant machineries and stocks amongothers 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 atthe year end and maximum outstanding amount thereof during the year as required under PartA of Schedule V of the Listing Regulations have been provided in the notes to theFinancial Statements of the Company.
LOANS/ADVANCES GUARANTEE AND INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT 2013
Details of loans/advances granted guarantees given and investments made during theyear under review covered under the provisions of Section 186 of the Companies Act 2013are annexed to this Report.
During the financial year 2016-17 the Company did not invite or accept any depositsfrom the public under Section 76 of the Companies Act 2013.
RELATED PARTY TRANSACTIONS
There are no materially significant related party transactions made by the Companywhich may have potential conflict with the interest of the Company. Related partytransactions that were entered into during the year under review were on arm's lengthbasis and were in ordinary course of business. The Particulars of material related partytransaction is provided in Form AOC-2 as required under section 134(3)(h) of the CompaniesAct 2013 read with Rule 8(2) of the Companies (Accounts) Rules 2014. Further suitabledisclosure as required by the Accounting Standards (Ind AS 24) has been made in the notesto the Financial Statements. The Board has approved a policy for related partytransactions which has been uploaded on the Company's website. The web link as requiredunder Listing Regulations is as under: http://www.greenply.com/images/pdf/Related-Party-Transaction(s)-Policy.pdf
Your Company is committed to observe good Corporate Governance practices. The report onCorporate Governance for the financial year ended March 31 2017 as per Regulation 34(3)read with Schedule V of the Listing Regulations forms part of this Annual Report andannexed to this Report. The requisite certificate from Statutory Auditors M/s. D.Dhandaria & Company Chartered Accountants confirming compliance with the conditionsof corporate governance is attached to this Report on Corporate Governance.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Report on Management Discussion and Analysis Report as required under ListingRegulations forms part of this Annual Report and is annexed to this Report. CertainStatements in the said report may be forward looking. Many factors may affect the actualresults which could be different from what the Directors envisage in terms of the futureperformance 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 therequirements of the Sexual Harassment of Women at the Workplace (Prevention Prohibition& Redressal) Act 2013. There were no complaints pending for the redressal at thebeginning of the year and no complaints received during the financial year.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information required under section 134(3)(m) of the Companies Act 2013 read withRule 8(3) of the Companies (Accounts) Rules 2014 is annexed to this Report.
CORPORATE SOCIAL RESPONSIBILITY
During the year under review the Company has undertaken CSR activities directly andthrough its Trust namely GREENPLY FOUNDATION. The Trust has utilized unspent amountlying with it as on 31.03.2016 for the CSR activities. Further to maintain the integrityof CSR expenditure the Company has transferred Rs 240.00 lacs to the Trust during FY2016-17. The Company has spent Rs 226.84 lacs towards CSR activities (directly and throughTrust-Greenply Foundation) during the year which is less than the minimum allocation ofCSR being 2% of the average net profit of last 3 financial years amounting toRs 307.26 lacs in total. Though the Company has actually contributed more than theaforesaid amount of minimum allocation during FY 2016-2017 however the same could notbe fully utilized by few Implementing Agencies as on 31.03.2017. The Trust has also earnedRs 7.01 lacs on temporary investment with Banks during FY 2016-17. The unutilized fundlying with the Trust as on 31.03.2017 amounting to Rs 144.84 lacs (net of liabilities ofRs 0.45 lacs) and unutilized fund lying with the Implementing Agencies as on 31.03.2017will be used for CSR activities along with fresh funding if any from the Company duringFY 2017-18. The Company is committed to the underlying intent of CSR and is optimistic ofmeeting its obligations under section 135 of the Companies Act 2013 and thereby make apositive impact on the society. In compliance with requirements of Section 135 of theCompanies Act 2013 the Company has a CSR Policy. The composition of the Committeecontents of CSR Policy and report on CSR activities carried out during the Financial Yearended 31st March 2017 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(5) of the Companies Act 2013 your directorsstate that:
(i) in the preparation of the annual financial statements for the financial year endedMarch 31 2017 the applicable accounting standards had been followed along with properexplanation relating to material departures if any;
(ii) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit of the company for that period;
(iii) the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe 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 had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively and
(vi) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
CEO AND CFO CERTIFICATION
Pursuant to the Listing Regulations the CEO and CFO certification is attached with theAnnual Report. The Joint Managing Director &CEO and the Chief Financial officer alsoprovide quarterly certification on financial results while placing the financial resultsbefore the Board in terms of the Listing Regulations.
CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT PERSONNEL
The Code of Conduct is posted on the Company's website. The Joint Managing Director& CEO of the Company has given a declaration that all Directors and Senior ManagementPersonnel concerned affirmed compliance with the Code of Conduct with reference to theyear ended on March 31 2017. Declaration is attached with the annual report.
COMPLIANCE CERTIFICATE REGARDING COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE
The certificate received from M/s. D. Dhandaria & Company Chartered Accountants(Firm Registration no. 306147E) Statutory Auditors of the Company to the effect ofcompliance of conditions of Corporate Governance as required under Schedule V of theListing Regulations is annexed with the Report.
BUSINESS RESPONSIBILITY REPORT
The Business Responsibility Report describing the initiatives taken by the Companyduring the period under review from an environmental social and governance perspectivehas been annexed to this Report in the format suggested under the Listing Regulations.
There have been no frauds reported by the Auditors of the Company to the AuditCommittee or the Board of Directors under sub-section (12) of section 143 of the CompaniesAct 2013 during the financial year.
DISCLOSURES WITH RESPECT TO DEMAT SUSPENSE ACCOUNT/ UNCLAIMED SUSPENSE ACCOUNT
The relevant details in this regard have been provided in the Corporate GovernanceReport annexed to this Report.
PARTICULARS OF EMPLOYEES
The information required under section 197 of the Companies Act 2013 read with Rule5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is annexed to this Report.
Your Directors place on record their sincere thanks and appreciation for the continuingsupport of financial institutions consortium of banks vendors clients investorsCentral Government State Governments and other regulatory authorities. The Directors alsoplace on record their heartfelt appreciation for the commitment and dedication of theemployees of the Company across all the levels who have contributed to the growth andsustained success of the Company.
For and on behalf of the Board of Directors
Shiv Prakash Mittal
Executive Chairman DIN: 00237242
Date: May 29 2017