Duroply Industries Ltd

Your Directors are pleased to present the 67th Annual Report of Duroply Industries Limited along with the Audited Financial Statements for the financial year ended March 31, 2024.

(Rupees in Lakhs)

During the year under review, the Company has achieved a turnover of Rs 322.67 Crores as against Rs.302.34 Crores in the preceding financial year, an increase of 6.72%. Profit before Tax is Rs 1 crores as against Rs 7.92 crores in the preceding year. Profit after Tax is Rs 1 crores as against Rs 5.23 crores in the preceding year.

During the year under review, the Directors regret their inability to recommend any dividend for the financial year ended March 31, 2024.

The Reserves and Surplus of your Company has increased to 116.58 crores in the year 2023-24 as compared to 80.64 crores in the year 2022-23. No amount has been proposed to be transferred to the General Reserve for the financial year ended March 31, 2024.

The paid up Equity Share Capital as on March 31, 2024 was Rs. 9.86 Crores.

During the year under review, the Board of Directors of the Company vide its meeting held on February 13, 2024 approved the proposal for raising of funds by way of issue, offer and allotment of upto 11,77,336 equity shares of Rs. 10/- each (“Equity Shares”) for cash at a price of Rs. 203/- (including a premium of Rs. 193/-) per Equity Share and upto 9,85,220 warrants, each convertible into, or exchangeable for, 1 fully paid-up equity share of the Company of face value of Rs. 10/- each (“Warrants”) at a price of Rs. 203/- each payable in cash (“Warrants Issue Price”), which may be exercised in one or more tranches during the period commencing from the date of allotment of the Warrants until expiry of 18 months, by way of preferential issue on private placement basis for an aggregate consideration not exceeding Rs. 43,89,98,868/- in terms of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 read with the applicable provisions of the Companies Act, 2013. The Shareholders of the Company have approved the issue of such securities in the Extra-ordinary General Meeting held on March 9, 2024. The allotment of 11,77,336 equity shares and 9,85,220 Warrants on Preferential Basis was approved by the Allotment Committee in their meeting held on March 27, 2024.

The Company had issued 11,91,032 Convertible Warrants of face value of Rs 10/- each on preferential basis to allottees under Promoter category in financial year 202223. Out of the total warrants issued, 9,12,808 warrants pending for conversion into equity shares were converted into Equity shares of face value of Rs 10/- each at a premium of Rs 116/- each (2,12,754 warrants on October 16, 2023, 4,86,774 warrants on December 18, 2023 and 2,13,280 warrants on February 20, 2024).

There was no change in the nature of the business of the Company during the year.

The total borrowings stood at Rs. 41.03 crores as at March 31, 2024 as against Rs. 41.46 crores as on March 31, 2023, i.e. a decrease of Rs. 0.43 crores.

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

The Company has constituted Corporate Social Responsibility (CSR) Committee in compliance with provisions of Section 135 of the Companies Act, 2013 and SEBI Listing Regulations, with Mr. Sudeep Chitlangia (Chairman), Mr. Akhilesh Chitlangia (Member) and Mr. Probir Roy (Member upto 31.03.2024) replaced by Mr. Kulvin Suri (effective 01.04.2024). The CSR Committee laid down the CSR policy of the Company which can be accessed at www.duroply.in. The Company was not obligated to contribute towards CSR activities during financial year 2023-24, as per the provisions of the Companies Act, 2013. Annual report on CSR Activities is enclosed as “Annexure-1”

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

Mr. Vinay Agarwal (DIN: 06431086), Non-Executive Non-Independent Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment in accordance with the provisions of Section 152(6) and other applicable provisions of the Companies Act, 2013.

Pursuant to the provisions of Section 149 and 152 read with Schedule IV of the Companies Act, 2013 and the Rules made thereunder, the shareholders at the Annual General Meeting held on 11th August, 2023, inter alia, confirmed appointment of Sri Arun Kumar Singhania (DIN: 00160194) and Smt Suparna Chakrabortti (DIN: 07090308) for a term of five years from 19th May, 2023 to 18th May, 2028 as an Independent Director on the Board of the Company.

The Nomination and Remuneration committee and the Board of Directors at their respective meetings held on February 13, 2024, recommended the appointment of Mr. Kulvin Suri (DIN: 03640464) as Non-Executive, Independent Director of the Company to the members of the Company and accordingly, the Company has received approval of the members of the Company in the Extra Ordinary General Meeting held on 9th March, 2024. Mr Kulvin Suri has been appointed as an Independent Director, not liable to retire by rotation, for a term of five consecutive years commencing from 13th February, 2024 to 12th February, 2029.

The Board of Directors at its meeting held on May 17, 2024, based on the recommendation of Nomination and Remuneration Committee has appointed Mr. Shivram Sethuraman (DIN: 07946245) as Additional (NonExecutive Independent) Director of the Company w.e.f. May 17, 2024, not liable to retire by rotation and Mr. Anup Kumar Agarwal (DIN: 07571695) as Additional NonExecutive Director of the Company w.e.f. May 17, 2024, not liable to retire by rotation. The resolutions for their appointment have been included in the Notice convening 67th AGM for the approval of Members.

During the year under review, the Board of Directors of the Company, on the recommendation of Nomination and Remuneration Committee, have keeping in view the Company's long term strategic planning and the ongoing transformation journey resolved following in its meeting held on February 13, 2024:

a. The re-designation and appointment of Mr. Sudeep Chitlangia (DIN: 00093908) as an Executive Chairman, in the category of a whole-time director, with the title as the “Chairman” of the Company, for a fresh term of three (3) years commencing from April 1, 2024; and

b. The re-designation and appointment of Mr. Akhilesh Chitlangia (DIN: 03120474) as the “Managing Director and Chief Executive Officer” of the Company, for a fresh term of three (3) years commencing from April 1, 2024.

The special resolutions pertaining to the above redesignations and appointments were duly approved by the shareholders of the Company, with requisite majority, in the Extra Ordinary General Meeting of the Company held on March 9, 2024.

On 31st March, 2024 , Mr. Ratan Lal Gaggar (DIN: 00066068) , Mr Sujit Chakravorti (DIN: 00066344), Mr Probir Roy (DIN: 00033045) and Mr Kali Kumar Chaudhuri (DIN: 00206157) ceased to be Independent Directors of the Company due to completion of their tenure as an Independent Director as per the provisions of Companies Act, 2013 (‘Act') & relevant provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Your Directors placed on record their appreciation for the valuable contribution made by them during their tenure as Director of the Company.

In terms of Section 2(51) and Section 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the key managerial personnel of the Company as on date of this report are:

• Sudeep Chitlangia, Chairman

• Akhilesh Chitlangia, Managing Director & CEO

• Pawan Kumar Verma, Chief Financial Officer

• Komal Dhruv, Company Secretary

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

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

The Independent Directors of the Company have registered themselves with the Indian Institute of Corporate Affairs, (‘IICA') as required under Rule 6 of Companies (Appointment and Qualification of Directors) Rules, 2014.

During the year under review, five Board Meetings were convened and held. The details of which are given in Corporate Governance Report forming part of this Report. The provisions of the Companies Act, 2013 and the Listing Regulations were adhered to while considering the time gap between two meetings.

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

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

The Board and Nomination & Remuneration Committee had evaluated / reviewed the performance of individual Directors on the basis of criteria such as the contribution of the individual Director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. The Securities and Exchange Board of India vide circular SEBI /HO /CFD /CMD/ CIR/ 2017/004 dated January 05, 2017, issued a Guidance Note on Board Evaluation about various aspects involved in the Board Evaluation process to benefit all stakeholders.

While evaluating the performance, the above guidance note was considered. Performance evaluation of Independent Directors was carried out by the entire board, excluding the Independent Director being evaluated. A meeting of the Independent Director for the FY 2023-24, was held on February 13, 2024, to review the performance of the NonIndependent Directors and performance of the Board as a whole, on the parameters of effectiveness and to assess the quality, quantity and timeliness of the flow of information between the Management and the Board. The same were discussed in the board meeting that followed the meeting of the Independent Directors, at which the performance of the board, its committees, and individual Directors were also discussed. The Directors expressed their satisfaction with the evaluation process.

The information required pursuant to Section 197(12) read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of managerial personnel and employees of the company are attached herewith as “Annexure-3”.

As on March 31, 2024 the company is not having any associate, subsidiary or joint venture.

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

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

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

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

The Company has formulated a policy on director's selection and appointment, payment of remuneration, director's qualifications, positive attributes, independence of directors, selection and appraisal of performance of Key Managerial Personnel and Senior Management and their remuneration and other related matters as applicable under Section 178(3) of the Companies Act, 2013. The Company's criteria for payment of remuneration to the Non -Executive Directors and Familiarization Programme undertaken for Independent Directors are available on the Company's website www.duroply.in and the Remuneration Policy is separately attached herewith as “Annexure-4”.

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

The Company has adequate internal control procedures commensurate with its size and nature of business. The objective of these procedures is to ensure efficient use and protection of the Company's resources, accuracy in financial reporting and due compliance of statutes and corporate policies and procedures. The Internal Financial Control (IFC) system ensures recording and providing reliable financial and operational information, compliance with applicable laws, executing transactions with proper authorization and compliance with corporate policies.

The Board of Directors of the Company is responsible for ensuring that Internal Financial Controls have been laid down by the Company and that such controls are adequate and operating effectively.

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

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

(i) That in the preparation of the accounts for the year ended March 31,2024, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2024 and of the profit/loss of the Company for the year on that date;

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

(iv) That the Directors have prepared the accounts for the year ended March 31, 2024 on a ‘going concern' basis.

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

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

The Company has in place the SEBI guidelines pertaining to Corporate Governance. The Corporate Governance Report giving the details as required under the Listing Regulations is given separately as “Annexure-5”.

The Corporate Governance Certificate for the financial year ended on March 31, 2024 issued by CA Vivek Agarwal, partner of M/s S K Agrawal and Co Chartered Accountants LLP, Chartered Accountants, Statutory Auditors of the

Company, is also attached herewith as “Annexure-6”.

Certificate Pursuant to Regulation 17(8) of the Listing Regulations is attached herewith as “Annexure-7”.

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

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders Relationship Committee

• Investor Committee

• Finance Committee

• Allotment Committee

• CSR Committee

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

The statutory auditors of your Company namely, M/s. S K Agrawal and Co Chartered Accountants LLP, Chartered Accountants, (Firm Registration No. 306033E/E300272) (Formerly known as : M/s. S K Agrawal & Co.) were appointed for a period of five years at the Annual General Meeting held on September 28, 2022. The statutory auditor confirmed their eligibility and submitted the certificate in writing that they are not disqualified to hold the office of the statutory auditors. The report of the Statutory Auditor forms part of the Annual Report 2023-24. The said report does not contain any qualification, reservation, adverse remark or disclaimer. The report of the Statutory Auditor forms part of the Annual Report 2023-24. The said report does not contain any qualification, reservation, adverse remark or disclaimer. During the year under review, the Auditors did not report any matter of fraud under Section 143(12) of the Companies Act, 2013, therefore no detail is required to be disclosed under Section 134(3)(ca) of the Companies Act, 2013.

Pursuant to provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mr. Sumantra Sinha, Practicing Company Secretary (ACS: 11247), was appointed to conduct the Secretarial Audit for the Financial Year 2023-24. The Secretarial Audit report for the financial year ended March 31, 2024 is attached herewith as “Annexure-8”. The said report does not contain any reservation, qualification or adverse remark.

Based on the consent received and on recommendation of the Audit Committee, the Board has re-appointed Mr. Sumantra Sinha, Practicing Company Secretary as the secretarial auditor for the financial year 2024-25.

During the year under review Cost Audit is not applicable to the Company.

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

The Equity Shares of the Company are listed at the BSE Limited. The Company confirms that the annual listing fees has been paid to the BSE Limited for the financial year 2024-25.

The information pertaining to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in “Annexure-9” attached herewith.

Pursuant to the provisions of Section 92(3) read with Section 134(3) (a) of the Companies Act, 2013, the Annual Return as on March 31, 2024 is available at the web link: https://duroply.in/investor/document/annual-return

There were no material changes and commitment affecting the financial position of the Company since the close of the financial year i.e. March 31, 2024 till the date of this Report.

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

There are no proceedings, either filed by the Company or against the Company, pending under the Insolvency and Bankruptcy Code, 2016 as amended, before the National Company Law Tribunal or other Courts as on 31st March, 2024.

During the year under review, no settlements were made by the Company with any Banks or Financial Institutions.

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

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

During the financial year, your Company has complied with applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

The Company's factory at Rajkot, Gujarat have been certified ISO 14001:2015 for Environmental Management Systems Standards.

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