Significant Accounting Policies

1.01 Disclosure of Accounting Policies (AS - 1):

1.01.01 Nature of Operation

Company is engaged in the business of manufacturing plywood and allied products, medium density fibre boards and allied products through its factories at various locations and branches and dealers' network sbrad all over the country. It has two wholly owned subsidiary companies in overseas countries. The Company imports raw materials for manufacturing and also finished goods for trading. Manufactured goods are sold both in domestic and overseas markets.

Greenply Industries (Myanmar) Pvt. Ltd., subsidiary of the Company is engaged in manufacturing of products which constitutes raw materials to the Company and providing the same to Company and others. Greenply Trading Pte. Ltd., subsidiary of the Company operates as an investment vehicle and has invested into a Joint Venture Company viz. Greenply Alkemal (Singapore) Pte. Ltd., based out of Singapore.

1.01.02 Accounting Concepts & Basis of Presentation

The financial Statements are brpared in accordance with the Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as specified in the Company (Accounting Standards) Rules 2006 read with Rule 7(1) of the Companies (Accounts) Rules, 2014 and the provisions of the Companies Act, 2013. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. The Company's management evaluates all recently issued or revised accounting standards on an on-going basis.

The Normal Operating Cycle for the Company has been assumed to be of twelve months for classification of its various assets and liabilities into "Current" and "Non-current".

Where changes are made in brsentation, the comparative figures of the brvious year are regrouped and re-arranged accordingly.

1.01.03 Use of Estimates:

The brparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

1.02 Valuation of Inventories (AS - 2):

1.02.01 Stock of Raw Materials, Stores and spare parts are valued at lower of cost or net realisable value; and of those in transit and at port related to these items are valued at lower of cost to date or net realisable value.

1.02.02 Goods-in-process is valued at lower of cost or net realisable value.

1.02.03 Stock of Finished goods is valued at lower of cost or net realisable value.

1.02.04 Stock-in-trade is valued at lower of cost or net realisable value.

1.02.05 Waste and scraps are accounted at estimated realisable value.

1.02.06 Cost of inventories is ascertained on the 'weighted average' basis. Goods-in-process and finished goods are valued on absorption cost basis.

1.02.07 Growing Crops and Clonal Plants are valued at lower of cost or net realisable value.

1.03 Cash Flow Statement (AS - 3):

Cash flows are reported using indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from regular revenue generating, financing and investing activities of the Company is segregated. Cash and cash equivalents in the balance sheet comprise cash at bank, cash/cheques in hand and short term investments (excluding pledged term deposits) with an original maturity of three months or less.

1.04 Contingencies and Events Occurring After Balance Sheet Date (AS - 4):

Disclosure of contingencies as required by the accounting standard is furnished in the Notes on accounts.

1.05 Net Profit Or Loss For The Period, Prior Period Items And Changes In Accounting Policies (AS - 5):

Net Profit or loss for the period and prior period items are shown separately in the Statement of Profit & Loss.

1.06 Debrciation (AS - 6):

1.06.01 Tangible assets including continuous process plants are debrciated and/or amortised on the basis of their useful lives as notified in Schedule II to the Companies Act, 2013. Debrciation in respect of additions to assets has been charged on pro rata basis with reference to the period when the assets are ready for use. The provision for debrciation for multiple shifts has been made in respect of eligible assets on the basis of operation of respective units. Where the historical cost of a debrciable asset undergoes a change due to increase or decrease in long term liability on account of exchange fluctuations, the debrciation on the revised unamortised debrciable amount is provided prospectively over the residual useful life of the asset.

1.06.03 Intangible assets are amortised on straight-line method as follows :

Goodwill - 5 years

Trademarks - 10 years

Computer Software - 5 years

Technical Know-how - 3 years

1.07 Revenue Recognition (AS - 9):

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

1.07.01 Sale of Goods: Revenue from sales of goods is recognised on transfer of significant risks and rewards of ownership to the customers. Gross sales shown in the Statement of Profit & Loss are inclusive of Excise Duty and the value of self-consumption and inter-transfers but excludes Trade discounts, CST and VAT. Net sales are shown after deducting Excise duty which is disclosed at appropriate places.

1.07.02 Services: Revenue from Services are recognized as and when the services are rendered. The Company collects service tax on behalf of the government and therefore, it is not an economic benefit flowing to the Company and hence excluded from Revenue.

1.07.03 Interest: Interest income is recognized on a time proportion basis taking into account the amount outstanding and rate applicable.

1.07.04 Dividends: Dividend from investment is recognized when the Company in which they are held declares the dividend and when the right to receive the same is established.

1.07.05 Insurance Claims: Insurance Claims are accounted for on acceptance and when there is a reasonable certainty of receiving the same, on grounds of prudence.

1.08 Accounting for Tangible and Intangible Assets (AS - 10):

1.08.01 Tangible assets are stated at original cost (net of tax/duty credit availed) less accumulated debrciation, amortisation and impairment losses except freehold land which is carried at cost. Cost includes cost of acquisition, construction and installation, taxes, duties, freight, other incidental expenses related to the acquisition, trialrun expenses (net of revenue) and br-operative expenses including attributable borrowing costs incurred during br-operational period.

1.08.02 Tangible assets which are not ready for their intended use on reporting date are carried as capital work-in-progress at cost, comprising direct cost and related incidental expenses.

1.08.03 The Company has exercised the option available to it under Rule 46A of the Companies (Accounting Standards) (Second Amendment) Rules, 2011 in respect of accounting for fluctuations in foreign exchange relating to "Long Term Foreign Currency Monetary Items".

1.08.04 Intangible assets are carried at cost, net of accumulated amortization and impairment loss, if any.

1.09 Accounting for the Effects in Foreign Exchange Rates (AS - 11):

1.09.01 Initial Recognition: Transactions denominated in foreign currencies are normally recorded at the exchange rates brvailing at the time of the transactions.

1.09.02 Conversion: Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

1.09.03 Exchange Differences: Exchange differences arising on the settlement of monetary items or on reporting company's monetary items at rates different from those at which they were initially recorded during the year, or reported in brvious financial statements, are recognized as income or expenses in the year in which they arise.

1.09.04 Forward exchange contracts entered into to hedge foreign currency risk of an existing asset/liability: The brmium or discount arising at the inception of forward exchange contract is recognized as an expense/ income on the date of transaction. Any profit or loss arising on cancellation or renewal of such forward exchange contract is also recognized as income or expense for the period. However, in case of long term liabilities, where they relate to acquisition of fixed assets, the income or expense on account of exchange difference is adjusted to the carrying cost of such assets.

1.10 ACCOUNTING FOR INVESTMENTS (AS - 13):

Investments that are readily realisable and intended to be held for not more than a year are classified as Current investments. All other investments are classified as Non-Current/Long-term Investments. Current investments are carried at lower of cost and market value on individual investment basis. Non-Current/Long term Investments are considered at cost, unless there is an "other than temporary" decline in value, in which case adequate provision is made for the diminution in the value of Investments.

1.11 Employee Benefits (AS - 15):

1.11.01 Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.

1.11.02 Post employment and other long term employee benefits are charged off in the year in which the employee has rendered services. The amount charged off is recognized at the brsent value of the amounts payable determined using actuarial valuation techniques. Actuarialgains and losses in respect of past employment and other long term benefits are charged to the Statement of Profit and Loss.

1.12 Borrowing Costs (AS - 16):

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that takes necessarily substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

1.13 Segment Reporting (AS - 17): 1.13.01 Identification of Segments:

Primary Segment Business Segment:

The Company's operating businesses are organized and managed separately according to the nature of products, with each segment rebrsenting a strategic business unit that offers different products and serves different markets. The identified segments are Manufacturing and Sale of (a) Plywood & Allied products; and (b) Medium Density Fibre Boards & Allied products.

Secondary Segment

Geographical Segment:

The analysis of geographical segment is based on the geographical location of the customers.

The geographical segments considered for disclosure are as follows:

Sales within India include sales to customers located within India.

Sales outside India include sales to customers located outside India.

1.13.02 Allocation of Common costs:

Common allocable costs are allocated to each segment according to the ratio of their respective turnover to the total turnover.

1.13.03 Unallocated items:

The Unallocated Segment includes general corporate income and expense items, which are not allocated to any business segment.

1.14 Related Party Disclosures (AS - 18):

Disclosure of related parties as required by the accounting standard is furnished in the Notes on accounts.

1.15 Leases (AS - 19):

In accordance with Accounting Standard 19 "Accounting for leases", lease arrangements, where the risks and rewards incidental to ownership of an asset substantially vests with the lessor, are recognized as operating leases. Lease payments under operating leases are recognized as an expense in the Statement of Profit and Loss.

1.16 Earnings Per Share (AS - 20):

Basic earnings (loss) per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

1.17 Accounting for Taxes On Income (AS - 22):

1.17.01 Tax expenses comprise of current tax and deferred tax including applicable surcharge and cess.

1.17.02 Current Income tax is computed using the tax effect accounting method, where taxes are accrued in the same period in which the related revenue and expenses arise. A provision is made for income tax annually, based on the tax liability computed, after considering tax allowances and exemptions. Provisions are recorded when it is estimated that a liability due to disallowances or other matters is probable.

1.17.03 The differences that result between the profit considered for income taxes and the profit as per the financial statements are identified, and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered. The tax effect is calculated on the accumulated timing differences at the end of an accounting period based on brvailing enacted or substantially enacted regulations. Deferred Tax Assets and Deferred Tax Liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the Deferred Tax Assets and Deferred Tax Liabilities relate to taxes on income levied by same governing taxation laws. Deferred Tax Assets are recognized only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.

1.17.04 MAT (Minimum Alternate Tax) credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Statement of Profit and Loss and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.

1.18 Discontinuing Operations (AS - 24):

Pursuant to the approvalof the High Court, effect has been given in the Financial Statements to the "Composite Scheme of Arrangement" approved by the Board of Directors. The assets & liabilities of the Demerged Undertaking have been transferred to and vested in Greenlam Industries Limited and are disclosed by way of Notes on Accounts.

1.19 Intangible Assets (AS - 26):

1.19.01 Internally generated intangible asset under development stage is recognized when it is demonstrated that it is technically feasible to use the same and the cost incurred for developing the same is ascertained. Technical Know-how so developed internally is amortised on a straight-line basis over its estimated useful life.

1.19.02 Intangible assets acquired by payment e.g., Goodwill, Trademarks, Computer Software and Technical Know-how are disclosed at cost less amortization on a straight-line basis over its estimated useful life.

1.20 Impairment of Tangible and Intangible Assets (AS - 28)

At each balance sheet date, the Company reviews the carrying amount of tangible and intangible assets to determine whether there is any indication of impairment loss. If any such indication exists, the recoverable amount of the assets is estimated in order to determine the extent of impairment loss. The recoverable amount is higher of the net selling price and the value in use, determined by discounting the estimated future cash flows expected from the continuing use of the asset to their brsent value.

1.21 Provisions, Contingent Liabilities and Contingent Assets (AS - 29):

1.21.01 Provisions are made when (a) the Company has a brsent obligation as a result of past events; (b) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and (c) a reliable estimate is made of the amount of the obligation.

1.21.02 Contingent liabilities are not provided for but are disclosed by way of Notes on Accounts.

1.21.03 Contingent assets are neither accounted for nor disclosed by way of Notes on Accounts.

1.22 Excise Duty and Custom Duty:

Excise Duty on finished goods stock lying at the factories is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods lying in the factories as on the Balance Sheet date. Similarly, Custom Duty on imported material in transit/lying in bonded warehouse is accounted for at the time of import/bonding of materials.

1.23 Consumption of Raw Materials, Stores & Spare Parts Etc.:

The costs of Raw Materials, Stores and spare parts etc., consumed consist of purchase price including duties and taxes (other than those subsequently recoverable by the enterprise from the taxing authorities), freight inwards and other expenditure directly attributable to the procurement.

1.24 Service Tax & Cess:

Various expenses are accounted for after deducting the input tax credit available in respect of Service Tax, Education Cess and Secondary & Higher Education Cess.

1.25 Expenses for Corporate Social Responsibility:

In case of CSR activities undertaken by the Company, if any expenditure of revenue nature is incurred on any of the activities mentioned in Schedule VII to the Companies Act, 2013, the same is charged as an expense to its Statement of Profit and Loss. In case, the expenditure incurred by the Company is of such a nature which gives rise to an asset, such an asset is recognised where the Company retains the control of the asset and any future economic benefit accrues to it. A liability incurred by entering into a contractual obligation is recognised to the extent to which CSR activity is completed during the year.

1.26 Miscellaneous Expenditure Written Off:

The share issue expenses and expenses related to Scheme of Arrangement are written off in five equal annual installments in accordance with the provisions of Section 35DD of the Income Tax Act, 1961.

Notes on Financial Statements for the year ended March 31, 2015

1. EXCEPTIONAL ITEMS

Gain of Rs. 1575.53 Lacs comprises of refund of Central Excise Duty due to the Company as per Order dated November 20, 2014 of The Gauhati High Court. The refund is related to the Tizit Plywood Unit of the Company for Financial Years 2008-09 to 2013-14.

2. CONTINGENT LIABILITIES AND COMMITMENTS

2.1 Contingent liabilities

2.1.1 Pending Litigations:

a. Excise Duty, Sales Taxes and other Indirect Taxes claims disputed by the Company relating to issues of applicability and determination aggregating Rs.  7386.01 Lacs (Previous year Rs.20922.69 Lacs).

b. Income Tax demand disputed by the Company relating to issues of applicability aggregating Rs. 8.94 Lacs (Previous year Rs.  Nil).

c. Local Authority Taxes claims disputed by the Company relating to issues of applicability and determination aggregating Rs.  802.20 Lacs (Previous year Rs.  27.22 Lacs)

d. Claims against the Company not acknowledged as debts Rs.  63.94 Lacs (Previous year Rs.  68.82 Lacs).

Notes:

i) Based on the discussion with the solicitors/ favourable decisions in similar cases/legal opinion taken by the Company, the management believes that the Company has a good chance of success in above mentioned cases and hence, no provision there against is considered necessary.

ii) The company does not expect any reimbursements in respect of the above contingent liabilities.

iii) Future cash outflows in respect of the above are determinable only on receipt of judgements/decisions pending with various forums/authorities.

2.1.2 Others:

a. Letter of credit established but material not received amounting to Rs.  3219.41 Lacs (Previous year Rs.  4805.63 Lacs).

b. Guarantee given to Banks in respect of loans to its erstwhile wholly-owned subsidiary USD Nil(Previous Year USD 80,00,000) and SGD 2,51,36,000 (Previous Year SGD 22,36,000) equivalent to Rs.  11496.90 Lacs (Previous Year Rs.  5855.19 Lacs), translated at year-end exchange rate. It is under process to transfer to the Resulting Company pursuant to the Scheme of Arrangement.

c. In respect of capital goods imported at the concessional rate of duty under the Export Promotion Capital Goods Scheme, the Company has an export obligation of approximately Rs.  9569.91 lacs (brvious year Rs.  15740.03 lacs), which is required to be met at different dates, before 10.04.2019 (brvious year 20.02.2020). In the event of non-fulfillment of the export obligation, the Company will be liable to pay customs duties of approximately Rs.  1197.60 lacs (Previous Year Rs.  2225.95 lacs) together with interest, as applicable. The Company has

discharged export obligation amounting to Rs.  Nil during the year ended March 31, 2015.

2.2 Commitments

a. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances) Rs.  308.44 Lacs (Previous year X 3389.08 Lacs)

b. Uncalled liability on shares and other investments which are partly paid Rs.  NIL (Previous year Rs.  NIL)

c. Other commitments Rs.  NIL (Previous year Rs.  NIL)

3. Balances under Trade receivables, Trade Payables, Loans and Advances payable or receivable are subject to confirmation to be received from some of the parties.

4. FLUCTUATION IN LONG TERM FOREIGN CURRENCY MONETARY ITEMS

The Company has exercised the option available to it under Rule 46A of the Companies (Accounting Standards) (Second Amendment) Rules, 2011 in respect of accounting for fluctuations in foreign exchange relating to "Long Term Foreign Currency Monetary Items". Accordingly, it has adjusted a gain of Rs.  746.10 Lacs (Previous year loss of Rs.  1885.52 Lacs) during the period to the cost of its fixed assets on account of such difference arising during the current period and has provided for debrciation thereon over the balance useful life of the respective assets. Consequently, the charge to the Statement of Profit and Loss is effected to that extent.

5. TAXATION

The Company's management is of the opinion that its international and domestic transactions are at arm's length as per the independent accountants report for the year ended March 31, 2014. Management continues to believe that its international and domestic transactions post March 2014 and that the transfer pricing legislation will not have any impact on these financial statements, particularly on amount of tax expense and that of provision for taxation.

6. DEbrCIATION

In accordance with the provisions of the Companies Act 2013, effective from April 1, 2014, the Company has reassessed the remaining useful lives of its fixed assets brscribed by Schedule II to the Act or actual useful life of assets, whichever is lower. In case of any asset whose life has completed as above, the carrying value, net of residual value of Rs.  966.18 Lacs, as at April 1, 2014 has been adjusted to the Surplus in the Statement of Profit & Loss and in other cases the carrying value has been debrciated over the remaining of the revised life of the assets and recognized in the Statement of Profit and Loss.

7. The figures stated in the brvious period are inclusive of figures of Decorative Business of the Company which have been demerged with effect from the appointed date (i.e. April 1, 2013), the accounting effect of which has been given in current year, and as such current year's figures are not comparable.

8. The figures for the brvious period are re­classified/ re-arranged / re -grouped, wherever necessary so as to be in conformity with the figures of the current period's classification/ disclosure.

8. INFORMATION REGARDING MICRO, SMALL AND MEDIUM ENTERPRISES

As at March 31, 2015, no supplier has intimated the Company about its status as Micro or Small enterprises or its registration with the appropriate authority under Micro, Small and Medium Enterprises Act, 2006. So, no disclosure is made. The Company has compiled this information based on the current information in its possession.

As per our annexed report of even date.

For D. DHANDARIA & COMPANY

Chartered Accountants

ICAI Firm Reg. No. 306147E

(Dindayal Dhandaria)

Partner

Membership No. 010928

Shiv Prakash Mittal Executive Chairman (DIN: 00237242)

Susil Kumar Pal Director (DIN: 00268527)

V. Venkatramani Chief Financial Officer

Rajesh Mittal Managing Director (DIN: 00240900)

Shobhan Mittal Joint Managing Director & CEO (DIN: 00347517)

K. K. Agarwal Company Secretary

Place of Signature : Kolkata Dated : May 25, 2015