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Directors Report of Finolex Industries Ltd.

Mar 31, 2023

Your directors have pleasure in presenting the forty-second annual report together with the audited financial statements (standalone and consolidated) for the financial year ended March 31, 2023.

State of the Company''s affairs:

Financial Results

('' in Crore)
Particulars	Standalone		Consolidated
	2022-23	2021-22	2022-23	2021-22
Profit before depreciation, exceptional items & finance charges	413.92	1,106.90	437.72	1,104.50
Less: Finance charges	27.23	14.09	27.23	14.09
Profit before depreciation, exceptional items and taxation	386.69	1,092.81	410.49	1,090.41
Less: i. Depreciation	89.20	83.40	89.20	83.40
ii. Exceptional items (gain)/loss	-	(376.06)	-	(376.06)
iii. Provision for taxation	60.90	332.00	70.59	331.72
Profit after depreciation, exceptional items and taxation Add/(Less) :	236.59	1,053.47	250.70	1,051.35
i. Retained earnings at the beginning of the year	2,972.33	2,160.17	30.36.38	2,226.25
ii. Re-measurement of defined benefit plans and income	(0.26)	(0.24)	(0.24)	(0.15)
tax effect
iii. Dividend	(248.19)	(248.19)	(248.19)	(248.19)
Retained earnings at the end of the year	2,960.47	2,965.21	3,038.65	3,029.26
Earning per equity share:	3.82	16.98	4.04	16.94
Operations
The operational performance is summarized below:				('' in Crore)
Particulars	Standalone		Consolidated
	2022-23	2021-22	2022-23	2021-22
Revenue from Operations	4,397.05	4,647.32	4,397.05	4,647.32
Other Income	121.38	83.16	120.92	82.23
Total Income	4,518.43	4,730.48	4,517.97	4,729.55
Profit before tax (before exceptional item)	297.49	1,009.41	297.03	1,008.48
Exceptional item gain/(loss)	-	376.06	-	376.06
Profit before tax (after exceptional item)	297.49	1,385.47	297.03	1,384.54
Share of profit of associate before tax	-	-	24.26	(1.47)
Profit after tax	236.59	1,053.47	250.70	1,051.35
PVC Pipes and Fittings
Production - in MTs	301,830	230,847	301,830	230,847
Sale - in MTs	303,026	236,895	303,026	236,895
Sale - in '' Crores	4,113.28	3,852.67	4,113.28	3,852.67
PVC Resin
Production - in MTs	232,463	214,186	232,463	214,186
Sale - in MTs (including inter divisional):	239,638	224,924	239,638	224,924
Sale - in '' Crores (including inter divisional):	2,271.02	2,962.10	2,271.02	2,962.10

The total capacity of PVC pipes & fittings stands at 4,00,000 MT p.a. The sales volume for PVC pipes & fittings was 303,026 MT for the financial year ended March 31, 2023 as against 2,36,895 MT for the financial year ended March 31, 2022. Total standalone income was at ''4,518.43 Crore for the financial year ended March 31, 2023 against ''4,730.48 Crore for the financial year ended March 31, 2022. Profit after tax was at ''236.59 Crore for the financial year ended March 31, 2023 as against ''1,053.47 Crore for the financial year ended March 31, 2022.

During the period under review, your Company has commenced commercial operations of PVC fittings at a new state-of-the-art manufacturing facility at Talegaon, Pune (Maharashtra) with effect from March 12, 2023. The annual capacity of the said facility is 12,000 MT and the CAPEX is approximately ''100 Crore, which has been funded entirely through internal accruals.

Dividend

The Board of Directors has recommended dividend of ''1.50/- (i.e. 75%) per equity share (subject to deduction of tax at source). The dividend on equity shares, if approved by the Members, will absorb ''93.07 Crore.

According, to the Finance Act, 2020, dividend income is taxable in the hands of the Members w.e.f. April 1, 2020 and the Company is required to deduct tax at source (TDS) from dividend paid to the Members at prescribed rates as per the Income-tax Act, 1961.

According to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the ''Listing Regulations'') the top 1000 listed entities based on market capitalization, calculated as on March 31, of every financial year are required to formulate a Dividend Distribution Policy which shall be disclosed on the website of the listed entity and a web-link shall also be provided in the Annual Report. Accordingly, the Dividend Distribution Policy of the Company can be accessed using the following link https://www.finolexpipes.com/site/assets/files/12927/ dividend_distribution_policy.pdf .

Transfer to Reserves

The Board does not propose to transfer any amount to the General Reserve, during the financial year ended March 31, 2023. During the previous financial year, no amount was transferred to General Reserve. The total comprehensive Income for the year is ''1,202.64 Crore (Previous year ''1,039.07 Crores) was transferred to Reserves and Surplus of Balance Sheet.

Deposits

During the financial year, the Company has not accepted any deposits from public described under Chapter V of the Companies Act, 2013 (the ''Act'') and as such no amount on account of principal or interest on

deposits from public was outstanding as on the date of the balance sheet.

The Company had no unpaid /unclaimed deposit(s) as on March 31, 2023.

Management discussion and analysis

The Management Discussion and Analysis, as required in terms of the SEBI Listing Regulations, is annexed and forms an integral part of this report.

Consolidation of financial statements

As at the end of the financial year 2022-2023, your Company does not have any subsidiary Company. However, it does have two associate companies namely ''Finolex Plasson Industries Private Limited'' and ''Pawas Port Limited''.

Your Company has consolidated the financials of Finolex Plasson Industries Private Limited. The Company has not consolidated financials of an immaterial associate viz. ''Pawas Port Limited'', in which your Company holds 49.99% equity shares (''0.05 Crore) and it has also not started operations.

The consolidated financial statements prepared as per the provisions of Section 129 of the Act and Schedule III of the Act, are annexed and forms an integral part of this report.

Revision in financial statements

There has been no revision in the financial statements of the Company during the financial year 2022-23.

Subsidiary and Associate Companies

In terms of Section 129(3) of the Act, a statement containing salient features of the financial statements of the associate or joint venture company(ies) in Form AOC-1 and forms an integral part of this report.

Pursuant to Rule 8(1) of the Companies (Accounts) Rules, 2014, the performance and financial position of the associate or joint venture companies is included in the consolidated financial statements which forms an integral part of this report.

During the financial year 2022-23, there is no change in associate company(ies) of the Company.

The Company has formulated the policy on material subsidiaries in consonance with the provisions of Regulation 16(i)(c) of the SEBI Listing Regulations, As required under Regulation 46(2)(h) of the SEBI Listing Regulations, the Material Subsidiary Policy has been uploaded on the Company''s website and can be accessed through https://www.finolexpipes.com/site/ assets/files/12930/policy_on_material_subsidiary-1.pdf.

Pursuant to Regulation 34(3) of the SEBI Listing Regulations, the related party disclosures as specified in Para A of Schedule V are given below:
Sr. No.	In the accounts of	Disclosure of amounts at the year end and the maximum amount of loans/ advances/investments outstanding during the year	Remarks
1.	Holding Company	â¢ Loans and advances in the nature of loans to subsidiary by name and amount. â¢ Loans and advances in the nature of loans to associates by name and amount. â¢ Loan and advances in the nature of loans to firms/companies in which directors are interested by name and amount.	No Holding Company.
2.	Subsidiary	Same disclosures as applicable to the parent company in the accounts of subsidiary company.	No Subsidiary Company
3.	Holding Company	Investments by the loanee in the shares of parent company and subsidiary company, when the company has made a loan or advance in the nature of loan.	No Holding Company

There are no transactions made by the Company with any person or entity belonging to the promoter/ promoter group which hold(s) 10% or more shareholding in the Company.

Contracts or arrangements with related parties

The particulars of related party transactions are stated in the note no. 37 in the financial statements and Annexure-1 which forms an integral part of this report.

The related party transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business of the Company and prior omnibus approval is obtained for related party transactions which are of repetitive nature.

No material related party transactions, i.e. transaction with a related party exceeding Rupees One Thousand Crore or 10% of the annual consolidated turnover, as per the last audited Financial Statements of your Company whichever is lower, had been entered with any related party. There are no materially significant related party transactions entered by the Company with its Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict of interest with the Company at large.

Accordingly, the disclosure of related party transactions as required under Section 134(3) (h) of the Companies Act, 2013, in Form AOC-2 is not applicable and hence does not form part of this report. All related party transactions are placed before the Audit Committee for its approval. The Company has developed a related party transactions Manual, Standard Operating Procedures for the purpose of identifying and monitoring such transactions.

Your Company has formulated a policy on related party transactions and on dealing with related party transactions (''RPT Policy''). The Policy is available on Company''s website and can be accessed through https://www.finolexpipes.com/site/assets/files/12932/ related_party_transactions_policy.pdf

Corporate Governance

A separate report on corporate governance in compliance with corporate governance requirements specified in Regulations 17 to 27 and clauses (b) to (i) and (t) of sub-regulation (2) of Regulation 46 and para C, D and E of Schedule V and Regulation 34 of the SEBI Listing Regulations along with compliance certificate dated May 22, 2023 obtained from M/s. SVD & Associates, Practicing Company Secretaries, is annexed and forms an integral part of this report

Material changes and commitments

Your directors confirm that there are no material change(s) and commitment(s) affecting the financial position of the Company which have occurred between the end of the financial year of the Company and the date of this report.

Risk management

The Risk Management Committee was duly constituted by the Board and the details of the Committee along with term of reference are provided in the Corporate Governance forming an integral part of this report.

The Company has a robust risk management policy and framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company''s competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting.

The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business segments. Risk management forms an integral part of the business planning and forecasting. The key business risks identified by the Company and its mitigation plans are included in the management discussion and analysis report.

Internal financial controls

Your Directors had laid down internal financial controls to be followed by the Company and such policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The Audit Committee evaluates the internal financial controls systems periodically.

The scope and authority of the internal auditors are defined by the Audit Committee from time to time. To maintain its objectivity and independence, the internal auditor''s M/s. Ernst & Young, LLP report their observations to the Audit Committee of the Board. The internal auditors monitor and evaluate the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of the internal auditors, process owners undertake corrective action in their respective areas which then strengthens the controls. Audit observations and corrective actions thereon are presented to the Audit Committee of the Board. Based on the work performed by the internal, statutory and secretarial auditors and external consultants, including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during FY 2022-23.

Directors and Key Managerial Personnel:

The Board of your Company is duly constituted with a proper balance of executive, non-executive and independent directors.

Pursuant to Section 149 (1) and 161 of the Companies Act, 2013 read with Rule 8 (5) (iii) of the Companies (Accounts) Rules, 2014, the details relating to directors and key managerial personnel who were appointed / re-appointed or resigned / retired are reported as under:

1. Appointment and re-appointment of Directors:

During the financial year 2022-23, the members at the forty-first (41^st) Annual General Meeting held on August 30, 2022, approved the following resolutions with regard to appointment / re-appointment of Directors:

i. Mr. Prakash P. Chhabria (DIN: 00016017) Chairman of the Company was re-appointed as the Whole-time Director designated as Executive Director of the Company for a period of five years from December 1, 2021 to November 30, 2026.

ii. Mr. Sanjay S. Math (DIN: 01874086) was re-appointed as a Managing Director of the Company, for a period of six months from December 1, 2021 to May 31, 2022.

iii. Mr. Anil V. Whabi (DIN: 00142052), was appointed as a Director and as a Wholetime Director of the Company designated as Director - Finance for a period of six months from December 1, 2021 to May 31, 2022. He was re-designated and appointed as Managing Director for a period of one year from June 1, 2022 to May 31, 2023.

iv. Mr. Saumya Chakrabarti (DIN: 09594036) was appointed as a Director and Wholetime Director of the Company designated as Director - Technical for a period of five years from June 1, 2022 to May 31, 2027

v. Mrs. Ritu P. Chhabria (DIN 00062144), was re-appointed as Non-Executive & NonIndependent Director liable to retire by rotation.

2. Retirement of Mr. Sanjay S. Math, Managing Director

During the financial year 2022-23, Mr. Sanjay S. Math was superannuated as Managing Director on close of business hours of May 31, 2022. Your Board places on record its sincere appreciation for valuable contribution and timely guidance of Mr. Math to the Company during his tenure.

3. Re-appointment of Mr. Saurabh S. Dhanorkar, Director

Mr. Saurabh S. Dhanorkar (DIN: 00011322), NonExecutive & Non-Independent Director will retire by rotation as Director at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.

4. Re-appointment of Mrs. Kanchan U. Chitale Independent Director

Mrs. Kanchan U. Chitale (DIN: 00007267), NonExecutive & Independent Director, is proposed to be re-appointed for the second consecutive term of five years w.e.f. April 1, 2024 and she will not be liable to retire by rotation. The Board recommends her re-appointment.

5. Retirement of Mr. Anil V. Whabi, Managing Director

Mr. Anil V. Whabi will retire as Managing Director of the Company with effect from close of business hours of May 31, 2023, after rendering close to nine years of dedicated service to the Company. The Board of Directors at its meeting held on May 22, 2023 has considered and approved the retirement of Mr. Anil V. Whabi, Managing Director and also Key Managerial Personnel with effect from close of business hours of May 31, 2023. Mr. Anil V. Whabi will cease to be Director of the Company with effect from end of business hours of May 31, 2023.

Your Board places on record its sincere appreciation for the valuable contribution of Mr. Whabi and timely guidance made by him during his tenure.

6. Appointment of Mr. Ajit Venkataraman, Additional Director & Managing Director

Consequent to the retirement of Mr. Anil V. Whabi, Managing Director on close of business hours of May 31, 2023, the Board recommends the appointment of Mr. Ajit Venkataraman (DIN: 07289950), currently Chief Executive Officer of the Company, as Additional Director & designated him as Managing Director (Key Managerial Personnel) for period of five years w.e.f June 1, 2023.

The resolutions for the aforesaid respective appointment(s) / re-appointment(s) including payment of their remuneration and details of their brief resume, nature of expertise in specific functional areas, disclosure of relationship between directors inter-se, names of the listed entities in which the person holds the directorship and the membership of the Committee of the Board of directors and shareholding in the Company and other details as required pursuant to SEBI Listing Regulations and the Secretarial Standards on General Meetings (SS-2) are contained in the notice of the 42^nd Annual General Meeting.

The Board recommends the appointment and re-appointment of Director, Managing Director and Independent Director as stated above and payment of their remuneration.

7. Independent Directors

Ms. Bhumika L. Batra (DIN: 03502004), Mrs. Kanchan U. Chitale (DIN: 00007267), Dr. Deepak R. Parikh (DIN: 06504537), Mr. Pradeep R. Rathi (DIN: 00018577) and Mr. Anami N. Roy (DIN: 01361110) are Non-Executive Independent Directors of the Company. Pursuant to Section

149(7) of the Companies Act, 2013, all Independent Directors have submitted declaration that:

a) Each of them meet the criteria of independence as provided in Section 149 (6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the SEBI Listing Regulations

b) They are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence pursuant to Regulation 25 of the SEBI Listing Regulations and there has been no change in the circumstances affecting their status as independent directors of the Company;

c) They have complied with the requirement of inclusion of their name in the data bank maintained by Indian Institute of Corporate Affairs as envisaged under Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019, as applicable and they hold valid registration certificate with Data Bank of Independent Directors;

Based on the confirmations/ disclosures received from the Independent NonExecutive Directors in terms of Regulation 25 of the SEBI Listing Regulations along-with a certificate issued by M/s. SVD & Associates., Practising Company Secretaries, (Peer Review No: P2013MH075200) Secretarial Auditors of the Company, the Board of Directors is of the opinion that the Independent Non-Executive Directors are of integrity and possess the requisite expertise and experience (including the proficiency).

8. Key Managerial Personnel (KMP)

Pursuant to the provisions of Section 203 of the Companies Act, 2013 Mr. Anil V. Whabi, Managing Director, Mr. Ajit Venkataraman, Chief Executive Officer (w.e.f. August 1, 2022) Mr. Niraj Kedia, Chief Financial Officer (w.e.f. May 20, 2022) and Mr. Ashutosh B. Kulkarni, Company Secretary are the Key Managerial Personnel of the Company as on March 31, 2023.

The Board of Directors on recommendation of Nomination and Remuneration Committee and Audit Committee, at its meeting held on July 22, 2022 appointed Mr. Ajit Venkataraman, as Chief Executive Officer and Key Managerial Personnel with effect from August 1, 2022.

Mr. Anil V. Whabi, Managing Director of the Company will superannuate on close of business hours of May 31, 2023 and accordingly he will cease to be Key Managerial Personnel of the Company.

The Board of Directors on recommendation of Nomination and Remuneration Committee, at its meeting held on May 22, 2023 appointed Mr. Ajit Venkataraman, as Managing Director and Key Managerial Personnel with effect from June 1, 2023.

Training and familiarization programme for directors

The Company has adopted the familiarization programme for independent directors in compliance of the Regulation 25(7) of the SEBI Listing Regulations, and with an aim to provide them with an insight into their roles, rights, responsibilities within the Company, the nature of the business of the Company and the business model of the Company. The Board members are provided with necessary documents, reports and internal policies to enable them to familiarize themselves with the Company''s procedures and practices.

Periodic presentations were made at the Board and its Committee Meetings, on business and performance updates of the Company, the global business environment, business strategy and various risks involved.

The updates on relevant statutory changes and landmark judicial pronouncements encompassing important laws are regularly presented to the Directors.

The details of the familiarization programme for independent directors are available on the website of the Company and can be accessed through https://www.finolexpipes.com/site/assets/files/21854/ familiarization_programmes_for_independent_ directors_fy_2022-23.pdf

Policy on directorsâ appointment and remuneration

The Company has adopted a Nomination and Remuneration Policy (NRC Policy) for nomination and remuneration of Directors, Key Managerial Personnel (KMP), Senior Management (SM), Functional Heads (FH) and other employees, pursuant to the Act and SEBI Listing Regulations, as amended from time to time.

The salient features of the NRC Policy

i. Appointment and remuneration of Directors, KMP, SM and FH;

ii. Determination of qualifications,

positive attributes and independence

for appointment of a Director

(Executive/Non-Executive/Independent) and recommendation to the Board matters relating to the remuneration for the Directors, KMP, SM and FH;

iii. Formulating the criteria for performance evaluation of all Directors;

iv. Board Diversity;

The Board at its meeting held on February 4, 2023, revised the policy by revising the definition of ''Senior Management'', by including ''Functional Heads'' as the Senior Management, pursuant to SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2023.

The policy of Nomination and Remuneration is available on the website of the Company and can be accessed through https://www.finolexpipes.com/site/ assets/files/18437/nomination_and_remunaration_ policy.pdf

Annual performance evaluation of the Board, its committees and individual directors

The Company has devised a nomination and remuneration policy for performance evaluation of independent, non-executive and executive directors. The basis for this evaluation include fulfillment of the independence criteria, independence from the management, qualification, positive attributes, area of expertise and the number of directorships & memberships held in various committees of other companies.

The Board of Directors has carried out an annual evaluation of its own performance, its committees and the directors individually as per the requirements of the Act, and the SEBI Listing Regulations.

In a separate meeting of independent directors, performance of non-independent directors, the Board as a whole and Chairman of the Company was evaluated, taking into account the views of executive directors and non-executive directors. The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.

The Board and the Nomination and Remuneration Committee 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. At the board meeting, the performance of the Board, its Committees, and individual directors was also discussed. Performance evaluation of independent directors was done by the entire Board, excluding the independent director being evaluated.

Remuneration of directors and key managerial personnel

The information required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure - 1 and forms an integral part of this report.

Particulars of employees

In accordance with the provisions of Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees drawing remuneration in excess of the limits set out in the aforesaid Rules, forms part of this Report. Further, the Report and the Accounts are being sent to the Members excluding the aforesaid annexure. In terms of Section 136(1) of the Act, any Member, who is interested in obtaining the details, may write to the Company Secretary at [email protected].The same is also open for inspection during working hours at the Registered Office of the Company.

Auditors and Auditorsâ Report

Statutory Auditors

At the forty-first (41^st) Annual General Meeting held on August 30, 2022 the members of the Company approved the appointment of M/s. Walker Chandiok & Co. LLP, Chartered Accountants, (Firm Registration No. 001076N/N500013), as Statutory Auditors of the Company to hold office for period of five (5) consecutive years commencing from the conclusion of the forty-first (41^st) Annual General Meeting until the conclusion of the forty-sixth (46^th) AGM of the Company.

Your Company''s standalone and the consolidated financial statements have been prepared in accordance with Ind AS notified under Section 133 of the Act.

The report of the Statutory Auditors on the Standalone and the Consolidated Financial Statements for the financial year ended March 31, 2023 is annexed and forms an integral part of this report and does not contain any qualifications, reservations, adverse remarks, disclaimers requiring any comments by the Board of Directors.

Cost Auditors

Your Company has maintained cost accounting records as specified by the Central Government under Section 148(1) of the Companies Act, 2013. The Board at its meeting held on May 22, 2023 has and on recommendation of the Audit Committee, appointed M/s. S. R. Bhargave & Co. as Cost Auditors to conduct an audit of cost accounting records of the Company for the financial year ending March 31, 2024. Your Company has received their written consent that the

appointment is in accordance with the applicable provisions of the Act and Rules framed thereunder. The Cost Auditors have confirmed they are not disqualified to be appointed as the Cost Auditors of your Company for the financial year ending on March 31, 2024.

Pursuant to the provisions of Section 148 of the Act, and Rules made thereunder, the ratification by the Members is necessary for the payment of remuneration to cost auditors. Your directors recommend the same.

The Cost Audit Report for the financial year 2021-22, issued by M/s. S. R. Bhargave & Co., Cost Auditors, in respect of the various products prescribed under Cost Audit Rules, does not contain any qualifications, reservations, adverse remarks or disclaimers and the same was filed with the Ministry of Corporate Affairs on September 30, 2022.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Board has appointed M/s. SVD & Associates, Practicing Company Secretaries, Pune (Peer Review No: P2013MH075200) to undertake the secretarial audit of the Company for the ffinancial year 2022-23. The secretarial audit report for the financial year 2022-23, is annexed as Annexure-2 and forms an integral part of this report.

The secretarial auditor''s report does not contain any qualifications, reservations, or adverse remarks or disclaimer.

Secretarial Standards

Your Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

Disclosures:

Your directors are pleased to furnish the following details which are required to be reported by the Company in the Director''s Report pursuant to Section 134(3) (a) to (q) of the Act.

Annual return

In terms of Section 92(3) and Section 134(3)(a) of the Act, read with the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company for the financial year ended March 31, 2023 is available on the website of the Company and can be accessed through https://www.finolexpipes.com/ investors/compliance-report .

Number of meetings of the Board

During the year under review, five (5) meetings of the Board of Directors were held. The details of the meetings are provided in the Corporate Governance Report.

Committees of directors

The details of the committees of the directors pursuant to the SEBI Listing Regulations and the Act, are described in the Corporate Governance Report.

Audit committee

The Audit Committee has been duly constituted as required under the provisions of the Act, and the SEBI Listing Regulations.

The required details pertaining to the composition of the Audit Committee, pursuant to Section 177 (8) of the Act, are provided in the corporate governance report. There were no instances of not having accepted the recommendation of the Audit Committee during the financial year 2022-23, by the Board.

Directorsâ Responsibility Statement

Pursuant to Section 134(5) of the Act, your directors, on the basis of information and documents made available to them, confirm that:

a) in the preparation of the annual financial statements for the year ended on March 31, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) the directors have selected such accounting policies 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 as at March 31, 2023 and of the profit of the Company for the year ended on that period;

c) the directors have taken proper and sufficient care for 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;

d) the directors have prepared the annual accounts on a going concern basis;

e) 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; and

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

Details in respect of fraud reported by Auditors

During the year under review, the statutory auditors or the cost auditors or the secretarial auditors have not reported any instances of fraud committed against the Company by its officers or employees to the audit committee/ Board and/or Central Government, under Section 143 (12) of the Act, and Rules framed thereunder, the details of which would need to be mentioned in the Board''s report.

Vigil mechanism / Whistle blower policy

The Company has established a vigil mechanism Whistle Blower Policy (the âWBP"), pursuant to Section 177(9) and (10) of the Act and Regulation 22 to SEBI Listing Regulations. A vigil mechanism was established for directors, employees and by any other person(s) to report to the management instances of unethical behaviour, actual or suspected, fraud or violation of the Company''s code of conduct or ethics policy. The Vigil Mechanism provides a mechanism for employees of the Company to approach the Chairman of the Audit Committee of Directors of the Company for redressal. No person has been denied access to the Chairman of the Audit Committee of Directors.

The Company affirms that no director or employee or other person(s) has been denied access to the Chairman of the Audit Committee and that no complaint was received during the year.

Prevention of Sexual harassment policy

The Company has zero tolerance for sexual harassment at the workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, to provide protection to employees at the workplace and for the prevention and redressal of complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. An Internal Complaints'' Committee has been constituted by the Company to redress any complaints received regarding sexual harassment.

Your directors state that during the year under review, there was no complaint received / case filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 have been provided in the Report on Corporate Governance.

Prohibition of Insider trading

In compliance with the provisions of the SEBI (Prohibition of Insider Trading) Regulations, 2015 and to preserve the confidentiality and prevent misuse of unpublished price sensitive information (UPSI), the Company has adopted a Code of Conduct to Regulate, Monitor and Report Trading by Insiders (''Insider Trading Code'') and a Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (''Code of Fair Disclosure''). The Company has in place the digital structured database to monitor the insider trading activities.

The said Code of Conduct is intended to prevent the misuse of UPSI by insiders and connected persons and ensure that the Directors and designated persons of the Company and their immediate relatives shall not derive any benefit or assist others to derive any benefit from having access to and possession of such UPSI about the Company which is not in the public domain, that is to say, insider information.

The Code of Fair Disclosure ensures that the affairs of the Company are managed in a fair, transparent and ethical manner keeping in view the needs and interest of all the stakeholders.

Particulars of loans, guarantees or investments

The details, as applicable, of loans given, investments made or guarantees given pursuant to Section 186 of the Act, are disclosed in note no. 04 to the financial statements for the financial year 2022-23.

It is clarified that the Company has no loans/ advances and investments in its own shares.

Significant and material orders passed by the regulators or courts or tribunals

In terms of Rule 8 (5) (vii) of the Companies (Accounts) Rules, 2014, it is reported that no significant and material orders have been passed by the regulators or courts or tribunals impacting the going concern status of the Company and the Company''s operations in future.

Further no application neither against the Company has been filed or is pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016), nor the Company has done any one-time settlement with any Bank or Financial institutions.

Employee stock option scheme

During the year under review, your directors confirm that no shares were issued by the Company under the Finolex Industries Limited - Employee Stock Option Scheme/ Plan (ESOP) of the Company.

A statement giving complete details, as at March 31, 2023, pursuant to Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2021 is available on the Company''s website and can be accessed through https://www.finolexpipes.com/ investors/compliance-report/

The Company has obtained certificate from SVD & Associates, secretarial auditors of the Company pursuant to Regulation 13 of the Securities Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

Sweat equity shares and equity shares with differential voting rights

Your directors confirm that neither sweat equity shares nor equity shares with differential voting rights have been issued by the Company during the year under review.

The conservation of energy, technology absorption, foreign exchange earnings and outgo

Your Company is committed to achieve the highest standards of environmental excellence by adopting environmentally sustainable and effective operating systems and processes. Your Company has put in place the internationally acclaimed Environment Management System under ISO 14001 certification at Ratnagiri. Your Company, is in compliance with all applicable environmental regulations in respect of air, water, noise, hazardous waste, e-waste etc. to mitigate the potential environmental impact on society.

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo required to be given under Section 134(3) of the Act, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed to this report as Annexure-3, and forms an integral part of this report.

Business Responsibility and Sustainability Report (BRSR)

Your Company does business that delivers long-term stakeholders value and benefits the society and continue to focus on its commitments which are aligned with national priorities.

As per the SEBI Circulars, effective from the financial year 2022-23, the BRSR reporting is mandatory for top 1000 listed companies by market capitalisation as on March 31, 2023. Your Company falls under the aforesaid category, hence in compliance of the same the BRSR report is annexed as Annexure-4 and forms an integral part of the report.

Corporate Social Responsibility

The Board has constituted Corporate Social Responsibility (CSR) Committee and framed the corporate social responsibility policy pursuant to Section 135 of the Act. The required details pertaining to the composition of the CSR Committee are given in the corporate governance report.

The corporate social responsibility policy is available on the Company''s website and can be accessed through https://www.finolexpipes.com/investors/policies-code-of-conduct/.

As a responsible corporate citizen, your Company conducts CSR activities in education, healthcare, sanitation, skill developments, social welfare, water conservation and women empowerment with its CSR partner, Mukul Madhav Foundation (âMMFâ). Your Company has been actively contributing to the social and economic development of the underprivileged mainly in and around the Company''s plants situated at Ratnagiri and Urse in the state of Maharashtra and at Masar in the state of Gujarat.

The CSR activities carried out by your Company through MMF is headed by Mrs. Ritu P. Chhabria, Managing Trustee of Mukul Madhav Foundation, and a driving force in accomplishing the activities on day-to-day basis.

During the financial year 2022-23, your Company in association with MMF has incurred expenditure on various CSR activities amounting to ''22.12 Crore as against the mandatory CSR expenditure of ''15.55 Crore.

The Annual report on the CSR activities is annexed Annexure-5 and forms an integral part of this report.

Cautionary statement

Statements in the Board of Directors'' Report and the Management Discussion & Analysis describing the Company''s objectives, expectations or forecasts may be within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company''s operations include global and domestic demand and supply conditions affecting the selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

Acknowledgements

Your directors take this opportunity to place on record their sense of gratitude to the banks, financial institutions, central and state government departments and local authorities for their guidance and support. Your directors are also grateful to the customers, suppliers and business associates of the Company for their continued co-operation and support. Your directors express their deep appreciation for the commitment, dedication and hard work put in by the employees at all levels. Lastly, your directors are grateful for the confidence and faith shown in them by the shareholders of the Company.

For and on behalf of the Board of Directors

Prakash P. Chhabria

Date: May 22, 2023 Executive Chairman

Place: London DIN: 00016017

Mar 31, 2022

Your directors have pleasure in presenting the forty-first annual report together with the audited financial statements (both standalone and consolidated) for the financial year ended March 31, 2022.

State of the Company''s affairs Financial Results

(^in Crores)
Particulars	Standalone		Consolidated
	2021-22	2020-21	2021-22	2020-21
Profit before depreciation, exceptional items & finance charges	1,106.90	1,061.79	1,104.50	1,077.05
Less: Finance charges	14.09	7.27	14.09	7.27
Profit before depreciation, exceptional items and taxation	1,092.81	1,054.52	1,090.41	1,069.78
Less: i. Depreciation	83.40	77.72	83.40	77.72
ii. Exceptional items (gain)/loss	(376.06)	-	(376.06)	-
iii. Provision for taxation	332.00	248.78	331.73	254.27
Profit after depreciation, exceptional items and taxation Add/(Less):	1,053.47	728.02	1,051.34	737.79
i. Retained earnings at the beginning of the year	2,160.17	1,431.92	2,226.25	1,488.09
ii. Re-measurement of defined benefit plans and income tax effect	(0.24)	0.23	(0.24)	0.23
iii. Share of Other Comprehensive Income (OCI) of Associate for the year	-	-	0.09	0.14
iv. Dividend	(248.19)	-	(248.19)	-
Retained earnings at the end of the year	2,965.21	2,160.17	3,029.25	2,226.25
Earnings per equity share	16.98	11.73	16.94	11.89
Operations The operational performance is summarized below:				pin Crores)
Particulars	Standalone		Consolidated
	2021-22	2020-21	2021-22	2020-21
Revenue from operations	4,647.32	3,462.27	4,647.32	3,462.27
Other income	83.16	72.48	82.23	71.55
Total income	4,730.48	3,534.75	4,729.55	3,533.82
Profit before tax (before exceptional item)	1,009.41	976.80	1,008.48	975.87
Exceptional item gain/(loss)	376.06	-	376.06	-
Profit before tax (after exceptional item)	1,385.47	976.80	1,384.54	975.87
Share of profit of associate before tax	-	-	(1.47)	16.19
Profit after tax	1,053.47	728.02	1,051.33	737.79
PVC Pipes and Fittings
Production - in MTs	230,847	212,706	230,847	212,706
Sale - in MTs	236,895	212,059	236,895	212,059
Sale - in ^Crores	3,852.67	2,634.75	3,852.67	2,634.75

(^in Crores)
Particulars	Standalone		Consolidated
	2021-22	2020-21	2021-22	2020-21
PVC Resin
Production - in MTs	214,186	225,035	214,186	225,035
Sale - in MTs (including inter divisional)	224,923	236,085	224,923	236,085
Sale - in ^Crores (including inter divisional)	2,962.10	2,273.31	2,962.10	2,273.31

The total production capacity of PVC pipes & fittings stands at 3,70,000 MT p.a. The sales volume for PVC pipes & fittings was 2,36,895 MT for the financial year ended March 31, 2022 as against 2,12,059 MT for the financial year ended March 31, 2021. Total standalone income was at ^4,730.48 Crores for the financial year ended March 31, 2022 against ^3,534.75 Crores for the financial year ended March 31, 2021. Profit after tax was at T1,053.47 Crores for the financial year ended March 31, 2022 as against T728.02 Crores for the financial year ended March 31, 2021.

The financial year 2021-22 began with the pandemic situation caused by second wave spread by the COVID-19 all over the world. Consequent to the emergence of second & third wave of the COVID-19 pandemic, driven by the highly transmissible Delta and Omicron COVID variants respectively, your Company undertook timely and essential measures to ensure the safety and well-being of its employees & stakeholders at all its plant locations and offices & complied with Government and Health authoritiesâ advisory. In these circumstances, your Company has worked tirelessly to address the challenges and implemented necessary changes commensurate with the Companyâs business requirements and your Company provided the required support to the workforce. These measures are monitored on a regular basis to ensure a progressive return to the desired growth rates. The employee support in terms of adherence to our benchmark COVID SOPâs and ensuring timely vaccination, has helped in minimizing its impact on our operations.

Consequent to the approval of the Board of Directors at their meeting held on September 15, 2021, the Company has transferred leasehold rights of approx. 34.88 acres of land (out of approx. 70 acres) post completion of necessary regulatory approvals and formalities. The Company has accordingly, recognised ^376.06 crores net gain, disclosed as exceptional item during Q4 FY 2021-22.

Dividend

The Board of Directors has recommended dividend at 200% i.e. final dividend at 100 % i.e. ^2 per equity share and a special dividend at 100% i.e. ^2 per equity share (subject to deduction of tax at source). The dividend on equity shares, if approved by the Members, will absorb ^248.19 Crores. As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015, (âListing Regulationsâ) the Company has formulated a Dividend Distribution Policy which has been uploaded on the Companyâs website https:// www.finolexDiDes.com/site/assets/files/12927/dividend distribution policy.pdf.

Transfer to Reserves

During the year, amount transferred to General Reserve was ^Nil (previous year ^Nil). Thus, the total comprehensive Income for the year of T1,039.07 Crores [Previous year T1,143.07 Crores] was transferred to Reserves and Surplus of Balance Sheet.

Deposits

During the year, the Company has not accepted any deposits from public, as described under Chapter V of the Companies Act, 2013 and as such no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

The Company had no unpaid /unclaimed deposit(s) as on March 31, 2022.

Management discussion and analysis

Pursuant to Regulation 34 (2) of the Listing Regulations, a Management Discussion and Analysis Report forms part of this annual report.

Consolidation of financial statements

As at the end of the financial year, your Company does not have any subsidiary Company. However, it does have two associate companies namely âFinolex Plasson Industries Private Limitedâ and âPawas Port Limitedâ.

The Company has consolidated financials of Finolex Plasson Industries Private Limited. The Company has not consolidated financials of an immaterial associate viz. âPawas Port Limitedâ, in which the Company holds 49.99% equity shares p0.05 Crores) and has not started operations.

The consolidated financial statements as prepared pursuant to the provisions of Section 129 of the Companies Act, 2013 (the âActâ) and Schedule III of the Act, are annexed and form part of this annual report.

Revision in financial statements

There has been no revision in the financial statements of the Company during the financial year 2021-22.

Subsidiary and Associate Companies

In terms of Section 129(3) of the Act a statement containing salient features of the financial statements of the associate or joint venture companies in Form AOC-1, is annexed and forms part of this annual report.

During the financial year 2021-22, there is no change in associate company(ies) of the Company.

The Company has formulated the policy on material subsidiaries in alignment with the provisions of Regulation 16 (i) (c) of the Listing Regulations. As required under Regulation 46 (2)(h) of the Listing Regulations, the Material Subsidiary Policy has been uploaded on the Companyâs website https://www.finolexpipes.com/site/ assets/files/12930/policy on material subsidiary-1.pdf.

Pursuant to Regulation 34(3) of the Listing Regulations, the related party disclosures as specified in Para A of Schedule V are given below:

Sr. No.	In the accounts of	Disclosure of amount at the year end and the maximum amount of loans/ advances/investments outstanding during the year	Remarks
1.	Holding Company	â¢ Loans and advances in the nature of loans to subsidiary by name and amount.	No Holding Company.
		â¢ Loans and advances in the nature of loans to associates by name and amount.
		â¢ Loan and advances in the nature of loans to firms/companies in which directors are interested by name and amount.
2.	Subsidiary	Same disclosures as applicable to the parent company in the accounts of subsidiary company.	No Subsidiary Company
3.	Holding Company	Investments by the loanee in the shares of parent company and subsidiary company, when the company has made a loan or advance in the nature of loan.	No Holding Company

There are no transactions made by the Company with any person or entity belonging to the promoter/ promoter group which hold(s) 10% or more shareholding in the Company.

Corporate Governance

A separate report on corporate governance in the compliance with corporate governance requirements specified in Regulations 17 to 27 and clauses (b) to (i) and (t) of sub-regulation (2) of Regulation 46 and para C, D and E of Schedule V of the Listing Regulations along with compliance certificate dated May 18, 2022 obtained from M/s. SVD & Associates, Practicing Company Secretaries, is annexed and forms part of this annual report.

Material changes and commitments

Your directors confirm that there are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company and the date of this report.

Contracts or arrangements with related parties

The particulars of related party transactions are stated in the note no. 37 in the financial statements and Annexure-2 of this report.

ordinary course of business of the Company. There are no materially significant related party transactions entered into by the Company with its Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict of interest with the Company at large. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) (h) of the Act, in Form AOC-2, is not applicable and hence does not form part of this report. All related party transactions are placed before the Audit Committee for approval. The Company has developed a Related Party Transactions Manual, Standard Operating Procedures for the purpose of identifying and monitoring such transactions.

In line with the requirements of the applicable provisions of the Companies Act, 2013 and the Listing Regulations, the Company has formulated a policy on Related Party Transactions and the same is available on website of the Company at https://www.finolexpipes.com/site/assets/ files/12932/related party transactions policy.pdf.

Risk management

During the financial year 2014-2015, your directors had constituted a Risk Management Committee. The Risk Management Committee was reconstituted with effect from 20^th September, 2019. The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of this report.

The Company has a robust risk management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize

adverse impact on the business objectives and enhance the Companyâs competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business segments. Risk management forms an integral part of the business planning and forecasting. The key business risks identified by the Company and its mitigation plans are included in the management discussion and analysis report.

Internal financial controls

Pursuant to Rule 8 (5) (viii) of the Companies (Accounts) Rules, 2014, the details in respect of adequacy of internal financial controls with reference to the financial statements are given below:

The Company has in place adequate internal control procedures, proportionate to the nature of the business and the size of operations, for smooth conduct of business. The systems are implemented for safeguarding the assets, the prevention and detection of fraud and errors, the accuracy and completeness of the accounting records and timely preparation of reliable financial information.

The scope and authority of the internal auditors are defined by the Audit Committee from time to time. To maintain its objectivity and independence, the internal auditors M/s. Ernst & Young, LLP report their observations to the Audit Committee of the Board. The internal auditors monitor and evaluate the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of the internal auditors, process owners undertake corrective action in their respective areas which then strengthens the controls. Audit observations and corrective actions thereon are presented to the Audit Committee of the Board. Based on the work performed by the internal, statutory and secretarial auditors and external consultants, including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management, the Board is of the opinion that the Companyâs internal financial controls were adequate and effective during FY 2021-22.

Directors and Key Managerial Personnel

The Board of your Company is duly constituted with a proper balance of executive, non-executive and independent directors.

1. Appointment and re-appointment of Directors:

Earlier the Board of Directors at its meeting held on May 21, 2016 based on the recommendation of the Nomination and Remuneration Committee had

re-appointed Mr. Prakash P. Chhabria (DIN 00016017) as Whole-time Director designated as Executive Chairman and Mr. Sanjay S. Math (DIN 01874086) as Managing Director, for a period of five years from the December 1, 2016 respectively. The said re-appointments of Mr. Prakash P. Chhabria and Mr. Sanjay S. Math were approved by the Members at 35^th Annual General Meeting held on August 11, 2016. Earlier, the Board of Directors at its meeting held on August 26, 2016 based on the recommendation of the Nomination and Remuneration Committee had appointed Mr. Anil V. Whabi (DIN 00142052) as Whole-time Director designated as Director - Finance for a period of five years from August 26, 2016. The said appointment of Mr. Anil V. Whabi was approved by the Members at 36^th Annual General Meeting held on August 11, 2017. The tenure of Mr. Whabi as Whole-time director designated as Director (Finance) of the Company was completed on close of business hours of August 25, 2021 and accordingly he ceased to be director of the Company.

The Board of Directors at its meeting held on November 27, 2021 based on the recommendation of the Nomination and Remuneration Committee and subject to approval of members at the ensuing Annual General Meeting re-appointed Mr. Prakash P. Chhabria, Chairman of the Company, as wholetime director designated as Executive Director, Mr. Sanjay S. Math, as Managing Director and appointed Mr. Anil V. Whabi as an additional & Whole-time Director designated as Director - Finance with effect from December 1, 2021 for the tenure as mentioned in the respective business item(s) relating to their appointment/ re-appointment of the annexed AGM notice and Explanatory Statement pursuant to Section 102(1) of the Companies Act, 2013.

Mr. Sanjay S. Math, Managing Director of the Company will retire with effect from the close of business hours of May 31, 2022. The Board of Directors at its meeting held on May 18, 2022, redesignated and appointed Mr. Anil V. Whabi as Managing Director of the Company with effect from June 1, 2022 for a period of one year subject to approval of the Members of the Company.

The Board of Directors at its meeting held on May 18, 2022 based on the recommendation of the Nomination and Remuneration Committee appointed Mr. Saumya S. Chakrabarti (DIN 09594036) as an additional & Whole-time Director designated as Director - Technical effective from June 1, 2022 subject to approval of Members at the ensuing Annual General Meeting.

Mr. Anil V. Whabi and Mr. Saumya S. Chakrabarti were appointed as additional Directors on the Board of the Company with effect from December 1, 2021 and June 1, 2022 respectively, till the conclusion of ensuing Annual General Meeting.

A notice under Section 160 of the Act, has been received nominating the candidature of Mr. Anil V. Whabi and Mr. Saumya S. Chakrabarti for their appointment as Directors of the Company.

The period of appointment/ re-appointment of the said Directors are as mentioned below:

1. Mr. Prakash P. Chhabria, Chairman of the Company, re-appointed as Whole-time Director designated as Executive Director for a period of five years from December 1, 2021 to November 30, 2026.

2. Mr. Sanjay S. Math, re-appointed as Managing Director of the Company for a period of six months from December 1, 2021 to May 31, 2022.

3. Mr. Anil V. Whabi, appointed as Whole-time Director of the Company designated as Director - Finance for a period of six months from December 1, 2021 to May 31, 2022 and re-designated and appointed as Managing Director of the Company from June 1, 2022 to May 31, 2023.

4. Mr. Saumya S. Chakrabarti, appointed as Wholetime Director of the Company designated and appointed as Director - Technical for a period of five years from June 1, 2022 to May 31, 2027.

The resolutions for the aforesaid respective appointment(s) / re-appointment(s) including payment of their remuneration and details of their brief resume, nature of expertise in specific functional areas, disclosure of relationship between directors inter-se, names of the listed entities in which the person also holds the directorship and the membership of the Committee of the Board of directors and shareholding in the Company as required pursuant to Listing Regulations and the Secretarial Standards on General Meetings (SS-2) are contained in the notice of the ensuing annual general meeting.

The Board recommends the appointment and re-appointment of Whole-time Directors and Managing Director as stated above and payment of their remuneration.

2. Retirement of Mr. Sanjay S. Math, Managing Director

Mr. Sanjay S. Math will retire as Managing Director of the Company with effect from close of business hours of May 31, 2022 after rendering more than 14 years of dedicated service to the Company. The Board of Directors at its meeting held on May 18, 2022 has considered and approved the retirement of Mr. Sanjay S. Math, Managing Director and also Key Managerial Personnel with effect from the end of the current term of appointment on close of business hours of May 31, 2022.

The Board places on record its deep sense of appreciation for the valuable contributions made by him during his tenure.

3. Re-appointment of Director

Mrs. Ritu P. Chhabria (DIN 00062144), Non-Executive & Non-Independent Director will retire by rotation as Director at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment. The Board recommends her re-appointment.

4. Independent Directors

Ms. Bhumika L. Batra (DIN 03502004), Mrs. Kanchan U. Chitale (DIN 00007267), Dr. Deepak R. Parikh (DIN 06504537), Mr. Pradeep R. Rathi (DIN 00018577) and Mr. Anami N. Roy (DIN 01361110) are Non-Executive Independent Directors of the Company. Pursuant to Section 149 (7) of the Act, all Independent Directors have submitted declaration that:

A) Each ofthem meet the criteria ofindependence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the Listing Regulations;

B) They are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence pursuant to Regulation 25 of the Listing Regulations and there has been no change in the circumstances affecting their status as independent directors of the Company;

C) They have complied with the requirement of inclusion of their name in the data bank maintained by Indian Institute of Corporate Affairs as envisaged under Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019, as applicable and they hold valid registration certificate with Data Bank of Independent Directors.

The Board is of the opinion that the independent directors are of integrity and possess the requisite expertise and experience (including the proficiency).

5. Key Managerial Personnel (KMP)

Pursuant to the provisions of Section 203 of the Companies Act, 2013 Mr. Sanjay S. Math, Managing Director, Mr. Anil V. Whabi, Director - Finance & Chief Financial Officer and Mr. Ashutosh B. Kulkarni, Company Secretary are the Key Managerial Personnel of the Company as on March 31, 2022.

The Board of Directors on recommendation of

Nomination and Remuneration Committee and

Audit Committee, at its meeting held on May 18, 2022

appointed Mr. Niraj Kedia, as Chief Financial Officer and Key Managerial Personnel with effect from May 20, 2022. Consequently Mr. Anil V. Whabi will cease to be Chief Financial Officer with effect from end of business hours of May 19, 2022.

Mr. Sanjay S. Math Managing Director of the Company will retire with effect from close of business hours of May 31, 2022 and accordingly he will cease to be Key Managerial Personnel of the Company with effect from June 1, 2022.

Training and familiarization programme for directors

In compliance of the Regulation 25 (7) of the Listing Regulations, the Company has conducted the familiarization programme for independent directors with an aim to provide them with an insight into their roles, rights, responsibilities within the Company, the nature of the business of the Company and the business model of the Company. The Board members are provided with necessary documents, reports and internal policies to enable them to familiarize themselves with the Companyâs procedures and practices.

Periodic presentations are made at the Board and its Committee Meetings, on business and performance updates of the Company, the global business environment, business strategy and various risks involved.

The updates on relevant statutory changes and landmark judicial pronouncements encompassing important laws are regularly presented to the Directors.

The details of the familiarization programme for independent directors are available on the Companyâs website https://www.finolexpipes.com/ site/assets/files/13104/familiarization programmes for independent directors fy 2021-22.pdf.

Policy on directors'' appointment and remuneration

The Companyâs Nomination and Remuneration Committee is governed by its terms of reference. The Companyâs Nomination and Remuneration Policy includes directorsâ appointment and remuneration including the criteria for determining qualifications, positive attributes, independence of a director and other details are furnished in Annexure-1.

The Companyâs Nomination and Remuneration Policy is available on the Companyâs website https://www. finolexpipes.com/site/assets/files/12928/nomination and remunaration policy.pdf.

Annual performance evaluation of the Board, its committees and individual directors

the management, qualification, positive attributes, area of expertise and the number of directorships & memberships held in various committees of other companies.

The Board of Directors has carried out an annual evaluation of its own performance, its committees and the directors individually as per the requirements of the Companies Act, 2013 and the Listing Regulations.

Remuneration of directors and key managerial personnel

Pursuant to 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, the details of remuneration of directors and key managerial personnel are furnished in Annexure-2.

Particulars of employees

In accordance with the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees drawing remuneration in excess of the limits set out in the aforesaid Rules, forms part of this Report. Further, the Report and the Accounts are being sent to the Members excluding the aforesaid annexure. In terms of Section 136(1) of the Act, any Member, who is interested in obtaining these, may write to the Company Secretary at [email protected]. The same is also open for inspection during working hours at the Registered Office of the Company.

Auditors and Auditors'' Report

In the 36^th Annual General Meeting held on August 11, 2017, M/s P.G. Bhagwat LLP, Chartered Accountants (ICAI Firm Registration No. 116231W/W-100024), was re-appointed as Statutory Auditors of the Company to hold office for five consecutive years starting from the conclusion of the thirty sixth Annual General Meeting held on August 11, 2017 until the conclusion of the forty-first AGM of the Company. M/s P.G. Bhagwat LLP tenure of 5 years as Statutory Auditors concludes at this ensuing Annual General Meeting (âAGMâ).

The report of the Statutory Auditors on the Standalone and the Consolidated Financial Statements for the financial year ended March 31, 2022 is enclosed to this Report and does not contain any qualification, reservation or adverse remark requiring any explanations / comments by the Board of Directors.

The Board of Directors of the Company has on the recommendation of the Audit Committee at its meeting held on May 18, 2022 and as per Section 139 of the Companies Act, 2013 proposed to appoint M/s. Walker Chandiok & Co. LLP (Firm Registration No. 001076N/ N500013), Chartered Accountants, as the Statutory Auditors of the Company for a tenure of 5 consecutive years, to hold the office from the conclusion of the forty-first AGM until the conclusion of the forty-sixth AGM of the Company to be held in year 2027. The appropriate resolution seeking your approval for the appointment and remuneration of M/s. Walker Chandiok & Co. LLP as the Statutory Auditors forms part of the Notice convening the 41^st AGM of the Company.

Further, M/s. Walker Chandiok & Co. LLP have under Section 139(1) of the Companies Act, 2013 and the Rules framed thereunder, furnished a certificate of their eligibility and consent for the appointment. They have further confirmed that the said appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for the appointment and hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. The Board commend to seek consent of its Members on appointment of Walker Chandiok & Co. LLP as Statutory Auditors for tenure of 5 consecutive years, to examine and audit the accounts of the Company during the said period.

Cost Auditors

Your Company has maintained cost accounting records as specified by the Central Government under Section 148(1) of the Companies Act, 2013. For the financial year 2021-22, M/s. S. R. Bhargave & Co. Cost Accountants (Firm Registration No. 000218) have conducted the audit of the cost records of the Company.

The Board at its meeting held on May 18, 2022 has, on recommendation of the Audit Committee, appointed M/s. S. R. Bhargave & Co. as Cost Auditors to conduct an audit of cost accounting records of the Company for the financial year ending March 31, 2023. Pursuant to the provisions of Section 148 of the Companies Act, 2013 and Rules made thereunder, the ratification by the Members is necessary for the payment of remuneration to the cost auditors. Your directors recommend the same.

The Cost Audit Report for the financial year 2020-21, issued by M/s. S. R. Bhargave & Co., Cost Auditors, in respect of the various products prescribed under Cost Audit Rules was filed with the Ministry of Corporate Affairs on October 4, 2021.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. SVD & Associates, Practicing Company Secretaries, Pune (Peer Review No: P2013MH075200) to undertake the secretarial audit of the Company for the financial year 2021-22. The secretarial audit report for the financial year 2021-22, is enclosed as Annexure-3.

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

The statutory auditorâs report and the secretarial auditorâs report do not contain any qualifications, reservations, or adverse remarks or disclaimer.

Disclosures

Your directors are pleased to furnish the following details which are required to be reported by the Company in the Directorâs Report pursuant to Section 134(3) (a) to (q) of the Act.

Annual return

Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act, 2013 read with Companies (Management and Administration) Rules, 2014, the annual return of the Company for the financial year March 31,2022 is available on the website of the Company and can be accessed at https://www.finolexpipes.com/investors/compliance-report/.

Number of meetings of the Board

During the year under review, nine meetings of the Board of Directors were held. The details of the meetings are provided in the Corporate Governance Report.

Committees of directors

The details of the committees of the directors pursuant to the Listing Regulations and the Companies Act, 2013, are described in the Corporate Governance Report.

Audit committee

The Audit Committee has been duly constituted as required under the provisions of the Companies Act, 2013 and the Listing Regulations.

The required details pertaining to the composition of the Audit Committee, pursuant to Section 177 (8) of the Companies Act, 2013, are given in the corporate governance report. There are no instances of the Board not having accepted the recommendation of the Audit Committee during the financial year 2021-22.

Directors'' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, your directors, on the basis of information and documents made available to them, confirm that:

a) in the preparation of the annual financial statements for the year ended on March 31, 2022, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) the directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2022 and of the profit of the Company for the year ended in that period;

d) the directors have prepared the annual accounts on a going concern basis;

e) 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; and

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

Details in respect of fraud reported by Auditors

During the year under review, the statutory auditors or the secretarial auditors or the cost auditors have not reported to the audit committee/ Board and/or Central Government, under Section 143 (12) of the Companies Act, 2013 read with rules framed thereunder, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Boardâs report.

Vigil mechanism / Whistle blower policy

The Company has established a vigil mechanism known as the Whistle Blower Policy (the âWBPâ) pursuant to Section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of the Listing Obligations, to report genuine concerns to the Chairman of the Audit Committee. The WBP provides adequate safeguards against victimization of persons who use such mechanism and ensures direct access to the Chairman of the Audit Committee. The details of the WBP are explained in the Corporate Governance Report and also posted on the Companyâs website.

The Company affirms that no director or employee has been denied access to the Chairman of the Audit

Committee and that no complaint was received during the year.

Prevention of Sexual harassment policy

Prohibition of Insider trading

In compliance with the provisions of the SEBI (Prohibition of Insider Trading) Regulations, 2015 and to preserve the confidentiality and prevent misuse of unpublished price sensitive information (UPSI), the Company has adopted a Code of Conduct to Regulate, Monitor and Report Trading by Insiders (âInsider Trading Codeâ) and a Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (âCode of Fair Disclosureâ). The Company has in place the digital structured database to monitor the insider trading activities.

The Code of Fair Disclosure ensures that the affairs of the Company are managed in a fair, transparent and ethical manner keeping in view the needs and interest of all the stakeholders.

Particulars of loans, guarantees or investments

The details, as applicable, of loans given, investments made or guarantees given pursuant to Section 186 of the Companies Act, 2013, are disclosed in note no. 04 to the financial statements for the financial year 2021-22.

It is clarified that the Company has no loans/ advances and investments in its own shares.

Significant and material orders passed by the regulators or courts or tribunals

Pursuant to Rule 8 (5) (vii) of the Companies (Accounts) Rules, 2014, it is reported that no significant and material

orders have been passed by the regulators or courts or tribunals impacting the going concern status of the Company and the Companyâs operations in future.

There are no application made or proceeding pending under the Insolvency and Bankruptcy Code, 2016 as at the end of the financial year, nor has the Company done any one time settlement with any Bank or Financial Institutions.

Employee stock option scheme

During the year under review, your directors confirm that no shares were issued by the Company under the Finolex Industries Limited - Employee Stock Option Scheme/ Plan (ESOP) of the Company.

Details pursuant to Regulation 14 of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 is available on the Companyâs website https://www. finolexpipes.com/site/assets/files/13346/disclosure under sebi regulations on esop 2021-22.pdf.

Sweat equity shares and equity shares with differential voting rights

Your directors confirm that neither sweat equity shares nor equity shares with differential voting rights have been issued by the Company during the year under review.

The conservation of energy, technology absorption, foreign exchange earnings and outgo

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo required to be given under Section 134(3) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is enclosed as Annexure-4.

Business Responsibility Report

Business Responsibility Report for the year ended March 31, 2022 as stipulated under Regulation 34(2) (f) of the Listing Regulations, is enclosed as Annexure-5.

Corporate Social Responsibility

The Board has constituted a Corporate Social Responsibility (CSR) Committee and also framed the corporate social responsibility policy pursuant to Section 135 of the Companies Act, 2013. The required details pertaining to the composition of the CSR Committee are given in the corporate governance report.

The corporate social responsibility policy of the Company can be viewed on the Companyâs website https://www. finolexpipes.com/site/assets/files/12926/corporate responsibility policy.pdf.

As a responsible corporate citizen, your Company conducts CSR activities in education, healthcare, sanitation, skill developments, social welfare, water conservation and women empowerment through its CSR partner, Mukul Madhav Foundation (âMMFâ). Your Company has been actively contributing to the social and economic development of the underprivileged mainly in and around your Companyâs plants situated at Ratnagiri and Urse in the state of Maharashtra and at Masar in the state of Gujarat. During the financial year 2021-22, the Companyâs CSR efforts included COVID-19 relief in multiple states.

The CSR activities carried out by your Company through MMF is headed by Mrs. Ritu P. Chhabria, Managing Trustee of Mukul Madhav Foundation, a driving force in accomplishing the activities on day-to-day basis.

During the financial year 2021-22, your Company in association with MMF has incurred expenditure on various CSR activities aggregating TI9.00 Crores against the mandatory CSR expenses of T12.38 Crores.

The Annual report on the CSR activities is enclosed as Annexure-6.

Cautionary statement

Statements in the Board of Directorsâ Report and the Management Discussion & Analysis describing the Companyâs objectives, expectations or forecasts may be within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companyâs operations include global and domestic demand and supply conditions affecting the selling prices of finished goods, input availability and prices, changes in government regulations, tax laws,

economic developments within the country and other factors such as litigation and industrial relations.

Acknowledgements

business associates of the Company for their continued co-operation and support. Your directors express their deep appreciation for the commitment, dedication and hard work put in by the employees at all levels. Lastly, your directors are grateful for the confidence and faith shown in them by the shareholders of the Company.

Mar 31, 2021

Your directors have pleasure in presenting the Fortieth annual report together with the audited financial statements (both standalone and consolidated) for the financial year ended 31st March, 2021.

State of the Company''s affairs:

Financial Results

(H in Crores)
Particulars	Standalone		Consolidated
	2020-21	2019-20	2020-21	2019-20
Profit before depreciation & finance charges	1,061.79	478.28	1,077.05	502.91
Less: Finance charges	7.27	11.28	7.27	11.28
Profit before depreciation, exceptional items and taxation	1,054.52	467.00	1,069.78	491.63
Less: i. Depreciation	77.72	73.81	77.72	73.81
ii. Provision for taxation	248.78	68.99	254.27	85.17
Profit after depreciation, exceptional items and taxation	728.02	324.20	737.79	332.65
Add/(Less) :
i. Retained earnings at the beginning of the year	1,431.92	1,409.47	1,488.09	1,457.24
ii. Re-measurement of defined benefit plans and income tax effect	0.23	(2.53)	0.23	(2.53)
iii. Share of Other Comprehensive Income (OCI) of Associate for the year			0.14	0.22
iv. Dividend	-	(248.20)	-	(248.20)
v. Tax on dividend	-	(51.02)	-	(51.21)
vi. Share in Lease adjustments	-	-	-	(0.09)
Retained earnings at the end of the year	2,160.17	1,431.92	2,226.25	1,488.09
Earning per equity share:
Basic & Diluted (H/share)	11.73	5.23	11.89	5.36

Operations

The operational performance is summarized below:

(H in Crores)
Particulars	Standalone		Consolidated
	2020-21	2019-20	2020-21	2019-20
Revenue from Operations	3,462.82	2,984.51	3,462.82	2,984.51
Other Income	72.48	30.84	71.55	29.91
Total Income	3,535.30	3,015.35	3,534.37	3,014.42
Profit before tax	976.80	393.19	975.87	392.26
Share of profit of associate before tax	-	-	16.19	25.56
Profit after tax	728.02	324.20	737.79	332.65
PVC Pipes and Fittings
Production - in MTs	2,12,706.43	2,63,688.25	2,12,706.43	2,63,688.25
Sale - in MTs	2,12,059.62	2,54,958.25	2,12,059.62	2,54,958.25
Sale - in H Crores	2,635.30	2,553.95	2,635.30	2,553.95
PVC Resin
Production - in MTs	2,25,035.00	2,47,392.63	2,25,035.00	2,47,392.63
Sale - in MTs (including inter divisional):	2,36,085.43	2,39,188.34	2,36,085.43	2,39,188.34
Sale - in H Crores (including inter divisional):	2,273.31	1,677.69	2,273.31	1,677.69

The total capacity of PVC pipes & fittings stands at 3,70,000 MT p.a. The sales volume for PVC pipes & fittings was 2,12,059.62 MT for the financial year ended 31st March, 2021 as against 2,54,958.25 MT for the financial year ended 31st March, 2020. Total standalone income was at H 3,535.30 Crores for the financial year ended 31st March, 2021 against H 3,015.35 Crores for the financial year ended 31st March, 2020. Profit after tax was at H 728.02 Crores for the financial year ended 31st March, 2021 as against H 324.20 Crores for the financial year ended 31st March, 2020.

The Financial Year 2020-21 began with the pandemic situation caused by the spread of the Corona virus COVID-19,

all over the world. The operations were disrupted at all the manufacturing facilities of the Company. Your Company had to put a halt on its operations for some period during March, 2020 to April, 2020, considering the wellness and safety of its employees and complying with Government and Health authorities'' advisory during lockdown. Subsequent to receipt of permissions from the authorities, the Company resumed operations in phased manner by focusing on the safety and well-being of all stakeholders. In these circumstances, your Company has worked tirelessly to address the challenges and implemented necessary changes needed commensurate with the Company''s business requirements

and your Company provided the required support to the workforce. These measures are naturally being monitored on a regular basis to ensure a progressive return to the desired growth rates. After commencement of operations, the business and operations of the Company have gradually scaled up to almost normal operating levels. The uncertainty around the resurgence of second wave across India towards end of March, 2021 is being closely monitored and all necessary actions have been taken.

Sub-division of shares

Pursuant to the approval granted by the Members of the Company on 26th March, 2021 through Postal Ballot, each existing Equity Share having face value of H 10/- (Rupees Ten) each has been sub-divided into 5 (Five) Equity Shares having face value of H 2/- (Rupees Two) each w.e.f. 16th April, 2021 (Record Date). Consequent upon the aforesaid sub-division, the Company has issued fully paid up equity shares having face value of H 2/- (Rupees Two) each to all the Members of the Company as on 16th April, 2021 i.e. Record Date as per their entitlement on that date.

As a result the authorized Share Capital of the Company is H 235,00,00,000/-(Rupees Two Hundred Thirty Five Crores only) classified as equity share capital aggregating to H 150,00,00,000/-(Rupees One Hundred Fifty Crores only) divided into 75,00,00,000 (Seventy Five Crores) equity shares of H 2/- (Rupees Two only) each and unclassified share capital aggregating to H 85,00,00,000/-(Rupees Eighty Five Crores only) divided into 8,50,00,000 (Eight Crore Fifty Lakhs) shares of H 10/- (Rupees Ten only).

The issued, subscribed and paid-up equity share capital of the Company is H 124,09,53,810 (Rupees One Hundred Twenty Four Crores Nine Lakhs Fifty Three Thousand Eight Hundred Ten only) divided into 62,04,76,905 equity shares of H 2 each. Further, Clause V of the Memorandum of Association and Article 3 of the Articles of Association of the Company relating to Capital Clause were amended with effect from 26th March, 2021 i.e. the deemed date of passing of the relevant resolutions through postal ballot. Necessary approvals from the Stock Exchanges for split of shares and NSDL/CDSL for assignment of new ISIN INE183A01024 were obtained.

Accordingly, equity shares and earning per share have been adjusted for share split in accordance with IND AS 33 ''Earning Per Share'' read with Ind AS 10 ''Events after Reporting Period''.

Dividend

The Board of Directors has recommended dividend at 200% i.e. final dividend at 100% i.e. H 2 per equity share and a special dividend at 100% i.e. H 2 per equity share (subject to deduction of tax at source). The dividend on equity shares, if approved by the Members, will absorb H 248.19 Crores. As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements Regulations, 2015, ("Listing Regulation") the Company has formulated a Dividend Distribution Policy which has been uploaded on the Company''s website https://www. finolexpipes.com/investors/policies-code-of-conduct/.

Transfer to Reserves

During the year, amount transferred to

of Section 129 of the Companies Act, 2013 (the "Act") and Schedule III of the Act, are annexed and form part of this annual report.

Revision in financial statements

There has been no revision in the financial statements of the Company during the financial year 2020 - 2021.

Subsidiary and Associate Companies

In terms of Section 129(3) of the Companies Act, 2013, a statement containing salient features of the financial statements of the associate or joint venture companies in Form AOC-1, is annexed and forms part of this annual report.

During the financial year 2020-21, there is no change in associate companies of the Company.

The Company has formulated the policy on material subsidiaries in alignment with the provisions of Regulation 16 (i) (c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. As required under Regulation 46 (2)(h) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Material Subsidiary Policy has been uploaded on the Company''s website https://www.finolexpipes.com/ investors/policies-code-of-conduct/.

General Reserve was H Nil (previous year H Nil). Thus, the total comprehensive Income for the year of H 1,143.07 Crores [Previous year H (299.40) Crores] was transferred to Reserves and Surplus of Balance Sheet.

Deposits

During the year, the Company has not accepted any deposits from public described under Chapter V of the Companies Act, 2013 and as such no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

The Company had no unpaid /unclaimed deposit(s) as on 31st March, 2021.

Management discussion and analysis

Pursuant to Regulation 34 (2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Management Discussion and Analysis Report forms part of this annual report.

Consolidation of financial statements

As at the end of the financial year, your Company does not have any subsidiary Company. However, it does have two associate companies namely ''Finolex Plasson Industries Private Limited'' and ''Pawas Port Limited''.

The Company has consolidated financials of Finolex Plasson Industries Private Limited. The Company has not consolidated financials of an immaterial associate viz. ''Pawas Port Limited'', in which the Company holds 49.99% equity shares (H 0.05 Crores) and has not started operations.

The consolidated financial statements as prepared pursuant to the provisions

Pursuant to Regulation 34(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the related party disclosures as specified in Para A of Schedule V are given below:

Sr. No.	In the accounts of	Disclosure of amounts at the year end and the maximum amount of loans/ advances/investments outstanding during the year
1.	Holding Company	â¢ Loans and advances in the nature of loans to subsidiary by name and amount. â¢ Loans and advances in the nature of loans to associates by name and amount. â¢ Loan and advances in the nature of loans to firms/companies in which directors are interested by name and amount.	No Holding Company.
2.	Subsidiary	Same disclosures as applicable to the parent company in the accounts of subsidiary company.	No Subsidiary Company
3.	Holding Company	Investments by the loanee in the shares of parent company and subsidiary company, when the company has made a loan or advance in the nature of loan.	No Holding Company

Directorsâ Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, your directors, on the basis of information and documents made available to them, confirm that:

a) in the preparation of the annual financial statements for the year ended on 31 st March, 2021 , the applicable accounting standards have been followed along with proper explanation relating to material departures;

March, 2021 and of the profit of the Company for the year ended on that period;

d) the directors have prepared the annual accounts on a going concern basis;

e) 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; and

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

Corporate Governance

A separate report on corporate governance in the compliance with corporate governance requirements specified in Regulations 17 to 27 and clauses (b) to (i) and (t) of subregulation (2) of Regulation 46 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 along with compliance certificate dated 25th June, 2021 obtained from M/s. SVD & Associates, Practicing Company Secretaries, is annexed and forms part of this annual report.

Material changes and commitments

Contracts or arrangements with related parties

The particulars of related party transactions are stated in the note no. 36 in the financial statements and Annexure-2 of this report.

None of the transactions with related parties falls under the scope of Section 188(1) of the Act. All related party transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business of the Company. There are no materially significant related party transactions

made by the Company with its Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict of interest with the Company at large. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) (h) of the Companies Act, 2013, in Form AOC-2, is not applicable and hence does not form part of this report. All related party transactions are placed before the Audit Committee for approval. The Company has developed a Related Party Transactions Manual, Standard Operating Procedures for the purpose of identifying and monitoring such transactions.

In line with the requirements of the applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a Policy on Related Party Transactions and the same is available on website of the Company at https://www.finolexpipes.com/investors/ policies-code-of-conduct/.

Risk management

During the financial year 2014-2015, your directors had constituted a Risk Management Committee. The Risk Management Committee was reconstituted with effect from 20th September, 2019. The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of this report.

The Company has a robust risk management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse

impact on the business objectives and enhance the Company''s competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business segments. Risk management forms an integral part of the business planning and forecasting. The key business risks identified by the Company and its mitigation plans are included in the management discussion and analysis report.

Internal financial controls

Pursuant to Rule 8 (5) (viii) of the Companies (Accounts) Rules, 2014, the details in respect of adequacy of internal financial controls with reference to the financial statements are given below:

Committee of the Board. The internal auditors monitor and evaluate the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of the internal auditors, process owners undertake corrective action in their respective areas which then strengthens the controls. Audit observations and corrective actions thereon are presented to the Audit Committee of the Board. Based on the work performed by the internal, statutory and secretarial auditors and external consultants, including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during FY 2020-21.

Directors and Key Managerial Personnel

The Board of your Company is duly constituted with a proper balance of executive, non-executive and independent directors.

1) Re-appointment of Director

Mr. Saurabh S. Dhanorkar

(DIN:00011322), Non-Executive &

Non-Independent Director retires

by rotation as Director at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.

2) Independent Directors

Ms. Bhumika L. Batra (DIN 03502004), Mrs. Kanchan U. Chitale (DIN 00007267), Dr. Deepak R. Parikh (DIN 06504537), Mr. Pradeep R. Rathi (DIN 00018577) and Mr. Anami N. Roy (DIN 01361110) are Non-Executive Independent Directors of the Company. Pursuant to Section 149(7) of the Companies Act, 2013, all Independent Directors have submitted declaration that:

A) Each of them meet the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the SEBI Listing Regulations;

C) They have complied with the requirement of inclusion of their name in the data bank maintained by Indian Institute

of Corporate Affairs as envisaged under Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019, as applicable and they hold valid registration certificate with Data Bank of Independent Directors;

The Board is of opinion that the independent directors are persons of high integrity and possess the requisite expertise and experience (including the proficiency).

3) Key Managerial Personnel (KMP)

During the year under review, Mr. Devang Trivedi, Company Secretary, Compliance Officer and Key Managerial Personnel, ceased to be employed by the Company from close of business hours of 8th June, 2020. Mr. Ashutosh B. Kulkarni was appointed as Company Secretary, Compliance Officer and Key Managerial Personnel of the Company with effect from 26th October, 2020. Pursuant to the provisions of Section 203 of the Companies Act, 2013 Mr. Sanjay S. Math, Managing Director, Mr. Anil V. Whabi, Director - Finance & Chief Financial Officer and Mr. Ashutosh B. Kulkarni, Company Secretary are the Key Managerial Personnel of the Company as on March 31,2021.

Training and familiarization programme for directors

roles, rights, responsibilities within the Company, the nature of the business of the Company and the business model of the Company. The Board members are provided with necessary documents, reports and internal policies to enable them to familiarize themselves with the Company''s procedures and practices.

The updates on relevant statutory changes and landmark judicial pronouncements encompassing

important laws are regularly presented to the Directors.

The details of the familiarization programme for independent directors are available on the Company''s website https://www.finolexpipes.com/ investors/policies-code-of-conduct/.

Policy on directorsâ appointment and remuneration

The Company''s Nomination and Remuneration Committee is governed by its terms of reference. The Company''s Nomination and Remuneration Policy includes directors'' appointment and remuneration including the criteria for determining qualifications, positive attributes, independence of a director and other details which are furnished in Annexure-1.

The Company''s Nomination and Remuneration Policy is also available on the Company''s website https://www. finolexpipes.com/investors/policies-code-of-conduct/.

Annual performance evaluation of the Board, its committees and individual directors

In a separate meeting of independent directors, performance of nonindependent directors, the Board as a whole and Chairman of the Company was evaluated, taking into account the views of executive directors and nonexecutive directors. The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on 5th January, 2017.

individual directors was also discussed. Performance evaluation of independent directors was done by the entire Board, excluding the independent director being evaluated.

Remuneration of directors and key managerial personnel

Particulars of employees

In accordance with the provisions of Section 197(12) of the Act read with Rule 5(2) the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees drawing remuneration in excess of the limits set out in the aforesaid Rules, forms part of this Report. Further, the Report and the Accounts are being sent to the Members excluding the aforesaid annexure. In terms of Section 136(1) of the Act, any Member, who is interested in obtaining these, may write to the Company Secretary at [email protected]. The same is also open for inspection during working hours at the Registered Office of the Company.

Auditors and Auditors'' Report

Statutory Auditors

Pursuant to Section 139 of the Companies Act, 2013 and the Rules made thereunder, P G Bhagwat LLP

Chartered Accountants, Pune were appointed as the statutory auditors of the Company in the thirty sixth Annual General Meeting (AGM) of the Company held on 11th August, 2017 for a period of five (5) consecutive years until the conclusion of the 41st AGM to be held in the year 2022 on such remuneration as shall be decided by the Board of Directors.

The statutory auditors have issued a certificate of eligibility pursuant to Section 141 of the Companies Act, 2013 and they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

Cost Auditors

The Board at its meeting held on 31st May, 2021 has, on recommendation of the Audit Committee, appointed M/s. S. R. Bhargave & Co. as Cost Auditors to conduct an audit of cost accounting records of the Company for the financial year ending 31st March, 2022. Pursuant to the provisions of Section 148 of the Companies Act, 2013 and Rules made thereunder, the ratification by the Members is necessary for the payment of remuneration to cost auditors. Your directors recommend the same.

The Cost Audit Report for the financial year 2019-20, issued by M/s. S. R. Bhargave & Co., Cost Auditors, in respect of the various products prescribed under Cost Audit Rules was filed with the Ministry of Corporate Affairs on 11th November, 2020.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013

and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. SVD & Associates, Practicing Company Secretaries, Pune to undertake the secretarial audit of the Company for the financial year 2020-21. The secretarial audit report for the financial year 2020-21, is enclosed herewith as Annexure-3.

The statutory auditor''s report and the secretarial auditor''s report do not contain any qualifications, reservations, or adverse remarks or disclaimer.

Disclosures

Your directors are pleased to furnish the following details which are required to be reported by the Company in the Director''s Report pursuant to Section 134(3) (a) to (q) of the Companies Act, 2013:

Number of meetings of the Board

During the year under review, six meetings of the Board of Directors were held. The details of the meetings are provided in the Corporate Governance Report.

Committees of directors

The details of the committees of the directors pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013, are described

in the Corporate Governance Report. Audit committee

The Audit Committee has been duly constituted as required under the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Annual Return

Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act, 2013 read with Companies (Management and Administration) Rules, 2014, the annual return of the Company for the financial year 31st March, 2021 is available on the website of the Company and can be accessed at https://www. finolexpipes.com/investors/policies-code-of-conduct/.

Vigil mechanism / Whistle blower policy

The Company has established a vigil mechanism known as the Whistle Blower Policy (the "WBP") pursuant to Section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, to report genuine concerns to the Chairman of the Audit Committee. The WBP provides adequate safeguards

against victimization of persons who use such mechanism and ensures direct access to the Chairman of the Audit Committee. The details of the WBP are explained in the Corporate Governance Report and also posted on the Company''s website.

The Company affirms that no director or employee has been denied access to the Chairman of the Audit Committee and that no complaint was received during the year.

Prevention of Sexual harassment policy

Prohibition of Insider trading

of Unpublished Price Sensitive Information (''Code of Fair Disclosure''). The Company has in place the digital structured database to monitor the insider trading activities.

The Code of Fair Disclosure ensures that the affairs of the Company are managed in a fair, transparent and ethical manner keeping in view the needs and interest of all the stakeholders.

Particulars of loans, guarantees or investments

The details, as applicable, of loans given, investments made or guarantees given pursuant to Section 186 of the Companies Act, 2013, are disclosed in note no. 4 to the financial statements for the financial year 2020-2021.

It is clarified that the Company has no loans/ advances and investments in its own shares.

Significant and material orders passed by the regulators or courts or tribunals

Pursuant to Rule 8 (5) (vii) of the Companies (Accounts) Rules, 2014, it is reported that no significant and material orders have been passed by the regulators or courts or tribunals impacting the going concern status

of the Company and the Company''s operations in future.

Employee stock option scheme

During the year under review, your directors confirm that no shares were issued by the Company under the Finolex Industries Limited - Employee Stock Option Scheme/ Plan (ESOP) of the Company.

A statement giving complete details, as at 31st March, 2021, pursuant to Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014 is available on the Company''s website https://www.finolexpipes.com/ investors/policies-code-of-conduct/.

Sweat equity shares and equity shares with differential voting rights

Your directors confirm that neither sweat equity shares nor equity shares with differential voting rights have been issued by the Company during the year under review.

The conservation of energy, technology absorption, foreign exchange earnings and outgo

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo required to be given under Section 134(3) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is enclosed herewith as Annexure-4.

Details in respect of fraud reported by Auditors

During the year under review, the statutory auditors or the secretarial auditors or the Cost auditors have not reported to the audit committee/ Board and/or Central Government, under Section 143 (12) of the Companies Act, 2013 and Rules framed thereunder, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Board''s report.

Business Responsibility Report

Business Responsibility Report for the year ended 31st March, 2021 as stipulated under Regulation 34(2) (f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is enclosed herewith as Annexure-5.

Corporate Social Responsibility

The Board has constituted Corporate Social Responsibility (CSR) Committee and also framed the corporate social responsibility policy pursuant to Section 135 of the Companies Act, 2013. The required details pertaining to the composition of the CSR Committee are given in the corporate governance report.

The Company has revised CSR

policy and terms of reference of CSR

committee pursuant to the Companies (CSR) Amendment Rules, 2021.

The corporate social responsibility policy of the Company can be viewed on the Company''s website https://www. finolexpipes.com/investors/policies-code-of-conduct/.

As a responsible corporate citizen, your Company conducts CSR activities in education, healthcare, sanitation, skill developments, social welfare, water conservation and women empowerment with its CSR partner, Mukul Madhav Foundation ("MMF"). Your Company has been actively contributing to the social and economic development of the underprivileged mainly in and around your Company''s plants situated at Ratnagiri and Urse in the state of Maharashtra and at Masar in the state of Gujarat. In fiscal 2021, the Company''s CSR efforts included COVID-19 relief in multiple states.

During the financial year 2020-21, your Company in association with MMF has incurred expenditure on various CSR activities aggregating H 9.00 Crores against the mandatory CSR expenses of H 8.81 Crores.

The Annual report on the CSR activities is enclosed herewith as Annexure-6.

Cautionary statement

Statements in the Board of Directors'' Report and the Management Discussion & Analysis describing the Company''s objectives, expectations or

forecasts may be within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company''s operations include global and domestic demand and supply conditions affecting the selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

Acknowledgements

Your directors take this opportunity to place on record their sense of gratitude to the banks, financial institutions, central and state government departments and local authorities for their guidance and support. Your directors regret the loss of life due to Covid pandemic and are deeply grateful and have immense respect for every person who risked their life and safety to fight this pandemic. Your directors are also grateful to the customers, suppliers and business associates of the Company for their continued co-operation and support. Your directors express their deep appreciation for the commitment, dedication and hard work put in by the employees at all levels. Lastly, your directors are grateful for the confidence and faith shown in them by the shareholders of the Company.

For and on behalf of the Board of Directors

Prakash P. Chhabria

25th June, 2021 Executive Chairman Place: London DIN :00016017

Mar 31, 2018

To the Members,

The directors have pleasure in presenting the Thirty- seventh annual report together with the audited financial statements (both standalone and consolidated) for the financial year ended 31st March, 2018.

State of the Companyâs affairs:

Financial Results

(Rs. in Lakh)

Particulars	Standalone		Consolidated
	2017-18	2016-17	2017-18	2016-17
Profit before depreciation & finance charges	50,925.18	58,739.23	52,467.01	59,555.78
Less: Finance charges	981.65	1,538.19	981.65	1,538.19
Profit before depreciation and taxation	49,943.53	57,201.04	51,485.36	58,01759
Less: i. Depreciation	6,060.46	5,504.62	6,060.46	5,504.62
ii. Provision for taxation	14,028.59	16,478.48	14,791.54	17,028.24
Profit after depreciation and taxation	29,854.48	35,21795	30,633.36	35,484.73
Add/(Less) :
i. Retained earnings at the beginning of the year	108,643.55	88,445.19	110,981.31	90,510.41
ii. Remeasurement of defined benefit plans and income tax effect	(86.99)	(71.66)	(86.99)	(71.66)
iii. Share of Other Comprehensive Income (OCI) of Associate for the year		-	0.65	5.75
iv. Dividend	(14,270.97)	(12,409.54)	(14,270.97)	(12,409.54)
v. Tax on dividend	(2,905.44)	(2,526.29)	(2,966.77)	(2,526.29)
vi. Excess dividend tax reversed		(12.10)		(12.10)
vii. Transfer to General Reserve	-	-	-	-
Retained earnings at the end of the year	121,234.62	108,643.55	124,290.98	110,981.31
Earning per equity share:
Basic & Diluted (Rs./share)	24.06	28.38	24.69	28.59

Operations

The operational performance is summarized below:

(Rs. in Lakh)

Particulars	Standalone		Consolidated
	2017-18	2016-17	2017-18	2016-17
Revenue from Operations (see note 1)	283,140.60	298,/63./0	283,140.60	298,763V0
Other Income	2,532.40	2,432.49	2,439.70	2,316.62
Total Income	285,673.00	301,19751	285,580.30	301,080.32
Profit before tax	43,883.07	51,696.42	43,790.37	51,580.55
Share of profit of associate before tax	-	-	1,634.53	932.42
Profit after tax	29,854.48	35,21795	30,633.36	35,484.73

PVC Resin
Production - in MTs	262,844	251,710	262,844	251,710
Sale - in MTs (excluding inter divisional):	67,312	87,235	67,312	87,235
Sale - in H Lakh (excluding inter divisional):	50,198.70	77,076.34	50,198.70	77,076.34
PVC Pipes and Fittings
Production - in MTs	260,387	207,761	260,387	207,761
Sale - in MTs	252,036	209,419	252,036	209,419
Sale - in Rs. Lakh	232,883.72	221,68730	232,883.72	221,68730
Power
Production - in MWh (captive consumption)	208,747	211,502	208,747	211,502

Note 1: Revenue from operations includes excise duty collected for previous Quarters up to Quarter ended 30 June 2017 as per guidelines prescribed in Ind As 18 âRevenueâ From 1st July 2017, as per the said guidelines, Goods and Service Tax (GST) charged is excluded from Revenue from operation and to that extent the revenues are not comparable. Had the previously reported revenue shown net of excise duty, comparative revenue of the Company would have been as follows:

(Rs. in Lakh)

Particulars	Standalone		Consolidated
	2017-18	2016-17	2017-18	2016-17
Revenue from Operations (excluding excise duty)	273,778.80	260,236.42	273,778.80	260,236.42

During the financial year, 40,000 MT capacity was added to PVC pipes & fittings and with this addition, the total capacity of PVC pipes and fittings stands at 330,000 MT p.a.The sales volume for PVC pipes & fittings was 252,036 MT for the financial year ended 31st March, 2018 as against 2,09,419 MT for the financial year ended 31st March, 2017. Total standalone income was at RS.285,673.00 lakh for financial year ended 31st March, 2018 against RS.3,01,197.51 lakh for the financial year ended 31st March, 2017. Profit after tax was at RS.29,854,48 lakhs for the financial year ended 31st March, 2018 as against RS.35,217.95 lakh for the financial year ended 31st March, 2017.

Dividend

Your directors have recommended dividend on equity shares @ 100% (RS.10 per equity share). The dividend on equity shares including corporate dividend tax, if approved by the Members, will absorb RS.14960.36 lakh.

Transfer to Reserves

During the year, amount transferred to General Reserve was Rs. Nil (previous year Rs. Nil). Thus, the total comprehensive Income for the year of RS.29,76749 lakh was transferred to Reserves and Surplus of Balance Sheet.

Deposits

The Company had no unpaid /unclaimed deposit(s) as on 31st March, 2018.

During the year, the Company has not accepted any deposits, described under Chapter V of the Companies Act, 2013.

Management discussion and analysis

Pursuant to Regulation 34 (2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a management discussion and analysis report forms a part of this annual report.

Consolidation of financial statements

As at the end of the financial year, your Company does not have any subsidiary company. However, it does have two associate companies namely Finolex Plasson Industries Private Limited and Pawas Port Limited.

The consolidated financial statements as prepared pursuant to the provisions of Section 129 of the Companies Act, 2013 (the âActâ) and Schedule III of the Companies Act, 2013, are annexed and forms a part of this annual report.

Revision in financial statements

There has been no revision in the financial statements of the Company during the financial year 2017 - 2018.

Subsidiary and Associate Companies

Pursuant to Rule 8(1) of the Companies (Accounts) Rules, 2014, the performance and financial position of the associate or joint venture companies included in the consolidated financial statements which is annexed and forms part of this annual report.

During the financial year 2017-18, there is no change in associate companies of the Company.

The Company has formulated the policy on material subsidiaries in alignment with the provisions of Regulation 16 (i) (c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. As required under Regulation 46 (2) (h) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Material Subsidiary Policy has been uploaded on the Companyâs website www.finolexwater.com at the following link: www.finolexwater.com/ investors/policies-code-of-conduct/.

Pursuant to Regulations 34(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the related party disclosures as specified in Para A of Schedule V, are given below:

Sr. No.	In the accounts of	Disclosure of amounts at the year end and the maximum amount of loans/advances/investments outstanding during the year
1.	Holding Company	- Loans and advances in the nature of loans to subsidiary by name and amount.	No Holding Company.
		- Loans and advances in the nature of loans to associates by name and amount.
		- Loan and advances in the nature of loans to firms/companies in which directors are interested by name and amount.
2.	Subsidiary	Same disclosures as applicable to the parent company in the accounts of subsidiary company.	No Subsidiary Company
3.	Holding Company	Investments by the loanee in the shares of parent company and subsidiary company, when the company has made a loan or advance in the nature of loan.	No Holding Company

Directorsâ Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, your directors, on the basis of information and documents made available to them, confirm that:

a) in the preparation of the annual financial statements for the year ended on 31st March, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) the directors have selected such accounting policies 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 as at 31st March, 2018 and of the profit of the Company for the year ended on that period;

d) the directors have prepared the annual accounts on a going concern basis;

e) 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; and

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

Corporate governance

A separate report on corporate governance in the compliance with corporate governance requirements specified in Regulations 17 to 27 and clauses (b) to (i) of sub-regulation (2) of Regulation 46 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 along with compliance certificate dated 23rd May, 2018 obtained from M/s SVD & Associates, practicing company secretaries, is annexed and forms part of this annual report.

Appointment of Registrar and Share Transfer Agent

Your Board has approved appointment of Karvy Computershare Pvt. Ltd., Hyderabad as Registrar and Share Transfer Agent (RTA) of the Company and accordingly, Company is in the process of shifting the In-house Share Registry operations to the RTA.

Material changes and commitments

Contracts or arrangements with related parties

The particulars of related party transactions are stated in the note no. 37 in the financial statements, Annexures 2, 3 and 5 of this report.

All related party transactions that were entered into during the financial year were on an armâs length basis and were in the ordinary course of business of the Company. There are no materially significant related party transactions made by the Company with its Promoters, Directors, Key

Managerial Personnel or other designated persons which may have a potential conflict of interest with the Company at large. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013, in Form AOC-2, is not applicable.

All related party transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained on a quarterly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee for its approval on a quarterly basis. The statement is supported by a Certificate from the Director - Finance and Chief Financial Officer.

The Company has developed a Related Party Transactions Manual, Standard Operating Procedures for the purpose of identifying and monitoring such transactions.

The Related Party Transactions Policy of the Company approved by the Board of Directors of the Company (the âBoardâ) is uploaded on the Companyâs website www. finolexwater.com at the following link: http://www.finolexwater.com/policies-code-of-conduct/.

Risk management

During the financial year 2014-2015, your directors had constituted a Risk Management Committee. The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of this Report.

The Company has a robust risk management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Companyâs competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business segments. Risk management forms an integral part of the business planning and forecasting. The key business risks identified by the Company and its mitigation plans are included in the management discussion and analysis report.

Internal financial controls

Pursuant to Rule 8 (5)(viii) of the Companies (Accounts) Rules, 2014, the details in respect of adequacy of internal financial controls with reference to the financial statements, are given below:

The scope and authority of the internal auditors are defined by the Audit Committee from time to time. To maintain its objectivity and independence, the internal auditors M/s. Sharp and Tannan report their observations to the Audit Committee of the Board. The internal auditors monitor and evaluate the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of the internal auditors, process owners undertake corrective actions in their respective areas which then strengthen the controls. Audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

Directors and key managerial personnel:

The Board of your Company is duly constituted with a proper balance of executive, non-executive and independent directors.

Pursuant to Sections 149 (1) and 161 of the Companies Act, 2013 read with Rule 8 (5) (iii) of the Companies (Accounts) Rules, 2014, the details relating to directors and key managerial personnel who were appointed or have resigned are reported as under:

Re-appointment of Director

Mr. Sanjay S. Math (DIN:01874086), a Managing Director retires by rotation as Director at the ensuing annual general meeting and being eligible, offers himself for re-appointment. The Board recommends his re-appoinment.

Appointment of Director

The Board of Directors has co-opted Mr. Saurabh S. Dhanorkar as an additional director effective 11th August, 2017. Mr. Saurabh S. Dhanorkar holds office up to the date of the ensuing annual general meeting of the Company. A notice has been received proposing Mr. Saurabh S. Dhanorkar as Director of the Company. The Board recommends his appointment.

Independent directors

The Members approved the appointments of Mr. Sanjay K. Asher, Mr. Kanaiyalal N. Atmaramani, Mr. Dara N. Damania, Mr. Shrikrishna N. Inamdar, Mr. Prabhakar D. Karandikar and Dr. Sunil U. Pathak as independent directors for a period of five years effective from 20th September, 2014, who are not liable to retire by rotation. The terms and conditions of the appointment of independent directors are as per Schedule IV of the Companies Act, 2013. Pursuant to Section 149(7) of the Companies Act, 2013, all independent directors have given declarations for the financial year 2018-2019 that they meet the criteria of independence as laid down under Section 149(6).

In view of the amendments to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 based on the recommendations of the Kotak Committee on Corporate Governance, the approval of the members of the Company by way of a special resolution, is being sought to continue directorship of Mr. Dara Damania, Independent Director who has already attained age of seventy five years. The Board recommends the same.

Key Managerial Personnel (KMP)

During the financial year 2017-18, the following changes took place within KMP:

1. Ms. Vidya R. Shembekar, resigned as Company Secretary and Compliance Officer w.e.f. 5th October, 2017. On her resignation, she ceased to be the KMP of the Company from the said date.

2. Mr. Devang B. Trivedi was appointed as Company Secretary and Compliance Officer w.e.f. 12th February, 2018. He is also a KMP

As on date of this report Mr. Sanjay S.Math, Managing Director, Mr. Anil V.Whabi, Director - Finance & Chief Financial Officer and Mr. Devang B. Trivedi, Company Secretary are KMP of the Company.

Training and familiarization programme for directors

In compliance of the Regulation 25 (7) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has adopted the familiarization programme for independent directors with an aim to provide them with an insight into their roles, rights, responsibilities within the Company, the nature of the business of the Company and the business model of the Company.

The Board members are provided with necessary documents, reports and internal policies to enable them to familiarize themselves with the Companyâs procedures and practices.

Detailed presentations on the Companyâs business segments were made at separate meetings held by the independent directors during the year.

Quarterly updates on relevant statutory changes and landmark judicial pronouncements encompassing important laws are regularly presented to the Directors.

The details of the familiarization programme for independent directors are available on the Companyâs website www.finolexwater. com/investors/Policities-code-of-conduct/.

Policy on directorsâ appointment and remuneration

The Companyâs Nomination and Remuneration Committee is governed by the terms of reference. The Companyâs nomination and remuneration policy includes directorsâ appointment and remuneration including the criteria for determining qualifications, positive attributes, independence of a director and other details which are furnished in Annexure 1.

The Companyâs Nomination and Remuneration Policy is also available on the Companyâs website www.finolexwater.com at the following link: www.finolexwater. com/investors/Policies-code-of-conduct/.

Annual evaluation by the Board of its own performance and that of its committees and individual directors

The Company has devised a nomination and remuneration-policy for performance evaluation of independent, non-executive and executive directors. The criteria for this evaluation includes qualification, positive attributes, area of expertise and the number of directorships and memberships held in various committees in other companies.

Remuneration of Directors and key managerial personnel

Pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the details of remuneration of directors and key managerial personnel are furnished in Annexure 2.

Particulars of Employees

Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are furnished in Annexure 3.

Auditors and Auditorsâ Report: Statutory Auditors

Pursuant to Section 139 of the Companies Act, 2013 and the Rules made thereunder, M/s. P G. Bhagwat, Chartered Accountants, Pune were appointed as the statutory auditors of the Company in the thirty sixth Annual General Meeting of the Company held on August 11, 2017 for a period of five (5) consecutive years until the conclusion of the 41st annual general meeting to be held in the year 2022 (subject to ratification of their appointment at every annual general meeting) on such remuneration as shall be fixed by the Board. The statutory auditors have issued a certificate of eligibility pursuant to Section 141 of the Companies Act, 2013. Pursuant to notification of certain Sections of the Companies (Amendment) Act, 2017, on May 07, 2018, the requirement of ratification of auditors by the members is no longer required. However, as a matter of abundant precaution, the ratification by the members is being sought for the approval of members in the ensuing annual general meeting. Further, taking into consideration this recent amendment, the annual ratification will not be sought next year onwards.

Cost Auditors

The Board at its meeting held on 23rd May, 2018 has, on recommendation of the Audit Committee, appointed M/s. S. R. Bhargave & Co. as cost auditors to conduct an audit of cost accounting records of the Company for the financial year ending 31st March, 2019. Pursuant to the provisions of Section 148 of the Companies Act, 2013 and Rules made thereunder, the ratification by the Members is necessary for the payment of remuneration to cost auditors. Your directors recommend the same.

The Cost Audit Report for the financial year 2016-17, issued by M/s S. R. Bhargave & Co, Cost Auditors, in respect of the various products prescribed under Cost Audit Rules was filed with the Ministry of Corporate Affairs on 21st August, 2017.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. SVD & Associates, Practicing Company Secretaries, Pune to undertake the secretarial audit of the Company for the financial year 2017-18. The secretarial audit report for the financial year 2017-18, is enclosed herewith and marked as Annexure 4.

There is no qualification, reservation or adverse remark or disclaimer made by the Secretarial Auditor in the said Secretarial Audit Report.

The Company has complied with all applicable secretarial standards.

Disclosures:

Your directors are pleased to furnish the following details which are required to be reported by the Company in the Directorâs Report pursuant to Section 134(3), (a) to (q) of the Companies Act, 2013:

Number of meetings of the Board

During the year under review, five meetings of the Board of Directors were held. The details of the meetings are provided in the corporate governance report in the annual report.

Committees of directors

The details of the committee of the directors pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013, are described in the corporate governance report of the annual report.

Audit Committee

The Audit Committee has been duly constituted as required under the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The required details pertaining to the composition of the Audit Committee, pursuant to Section 177 (8) of the Companies Act, 2013, are given in the section of the corporate governance report of the annual report. There are no instances of the Board not having accepted the recommendation of the Audit Committee during the financial year 2017-18.

Extract of Annual return

Pursuant to Section 134(3)(a) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, the extract of annual return in the prescribed format MGT-9, is enclosed herewith as Annexure 5.

Vigil mechanism / Whistle blower policy

The Company has established a vigil mechanism known as the Whistle Blower Policy (the âWBPâ) pursuant to Section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, to report genuine concerns to the Chairman of the Audit Committee. The WBP provides adequate safeguards against victimization of persons who use such mechanism and ensures direct access to the Chairman of the Audit Committee. The details of the WBP are explained in the corporate governance report and also posted on the Companyâs website.

The Company affirms that no director or employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year.

Sexual harassment policy

The Company has in place a policy for prevention of sexual harassment of its employees at the workplace. In line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, an Internal Complaintsâ Committee has been constituted by the Company to redress any complaints received regarding sexual harassment. Your directors state that during the year under review, there was no complaint received / case filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Insider Trading

In compliance with the provisions of SEBI (Prohibition of Insider Trading) Regulations, 2015 and to preserve the confidentiality and prevent misuse of unpublished price sensitive information (UPSI), the Company has adopted a Code of Conduct to Regulate, Monitor and Report Trading by Insiders (âInsider Trading Codeâ) and a Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (âCode of Fair Disclosureâ).

The Insider Trading Code is intended to prevent the misuse of UPSI by insiders and connected persons and ensure that the Directors and designated persons of the Company and their dependents shall not derive any benefit or assist others to derive any benefit from having access to and possession of such UPSI about the Company which is not in the public domain, that is to say, insider information.

The Code of Fair Disclosure ensures that the affairs of the Company are managed in a fair, transparent and ethical manner keeping in view the needs and interest of all the stakeholders.

Particulars of loans, guarantees or investments

It is clarified that the Company has no loans/ advances and investments in its own shares.

Significant and material orders passed by the regulators or courts or tribunals

Employee stock option scheme

During the year under review, your directors confirm that no shares were issued by the Company under the subsisting Finolex Industries Limited - Employee Stock Option Scheme Plan (ESOP) of the Company.

Sweat equity shares and equity shares with differential voting rights

Your directors confirm that neither sweat equity shares nor equity shares with differential voting rights have been issued by the Company during the year under review.

The conservation of energy, technology absorption, foreign exchange earnings and outgo

Business responsibility report:

Business Responsibility Report for the year ended 31st March, 2018 as stipulated under Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is enclosed as Annexure 7.

Corporate social responsibility:

The Board has constituted Corporate Social Responsibility (CSR) Committee and also framed the corporate social responsibility policy pursuant to Section 135 of the Companies Act, 2013. The details of the CSR Committee are given in the corporate governance report section of the annual report.

The corporate social responsibility policy of the Company can be viewed on the Companyâs website www.finolexwater.com at the following link www.finolexwater.com/ policies-code-of-conduct/.

As a responsible corporate citizen, your Company conducts its CSR activities in healthcare, education, water conservation and community development and welfare with Companyâs CSR partner Mukul Madhav Foundation (âMMFâ). Your Company has been actively contributing to the social and economic development of the underprivileged in and around your Companyâs plants situated at Ratnagiri and Urse in the state of Maharashtra and at Masar in the state of Gujarat.

The CSR activities carried out by your Company through MMF is headed by Mrs. Ritu P Chhabria, Managing Trustee of Mukul Madhav Foundation, a driving force in accomplishing the activities on day-to-day basis.

During the financial year 2017-18, your Company in association with MMF has incurred expenditure on various CSR activities aggregating RS.848.55 lakh against the mandatory CSR expenses of RS.608.49 lakh.

The detailed report on the CSR activities, is enclosed as Annexure 8.

Cautionary statement

Acknowledgements

Your directors take this opportunity to place on record their sense of gratitude to the banks, financial institutions, central and state Government departments and local authorities for their guidance and support. Your directors are also grateful to the customers, suppliers and business associates of the Company for their continued co-operation and support. Your directors express their deep appreciation for the commitment, dedication and hard work put in by the employees at all levels. Lastly, your directors are grateful for the confidence and faith shown in them by the shareholders of the Company.

For and on behalf of the Board of Directors

Prakash P Chhabria

23rd May, 2018 Executive Chairman

Pune DIN :00016017

Mar 31, 2017

To the Members,

The directors have pleasure in presenting the thirty- sixth annual report together with the audited financial statements including consolidated financial statements for the year ended 31st March, 2017.

State of the Company''s affairs:

Financial Results (Rs, in lakh)

	Standalone 2016-17	Standalone 2015-16	Consolidated 2016-17	Consolidated 2015-16
Profit before depreciation & finance charges	58,735.52	46,855.52	59,552.06	47,811.36
Less: Finance charges	1,534.47	4,470.97	1,534.47	4,470.97
Profit before depreciation and taxation	57,201.05	42,384.55	58,017.59	43,340.39
Less: i. Depreciation	5,504.62	5,057.36	5,504.62	5,057.36
ii Provision for taxation	16,478.48	11,886.50	17,028.24	12,505.86
Profit after depreciation and taxation	35,217.95	25,440.69	35,484.73	25,777.17
Add/: i. Retained earnings at the (less) beginning of the year	88,445.19	70,284.11	90,510.41	72,012.20
ii. Remeasurement of defined benefit plans and income tax effect	(71.66)	(25.16)	(71.66)	(25.16)
iii. Share of Other Comprehensive Income (OCI) of Associate for the year	â	''	5.82	0.65
iv. Reversal of Impairment allowance on Investment	-	(279.31)	-	(279.31)
v. Transfer to General Reserve	-	(4,000.00)	-	(4,000.00)
vi. Dividend	(12,409.54)	(2,481.91)	(12,409.54)	(2,481.91)
vii. Tax on dividend	(2,526.29)	(496.23)	(2,526.29)	(496.23)
viii. Excess dividend tax reversed	(12.10)	3.00	(12.10)	3.00
Retained earnings at the end of the year	108,643.55	88,445.19	110,981.37	90,510.41
Earning per equity share:
Basic (Rs,/share)	28.38	20.50	28.59	20.77
Diluted (Rs,/share)	28.38	20.50	28.59	20.77

Operations

The operational performance is summarized below:

	Standalone 2016-17	Standalone 2015-16	Consolidated 2016-17	Consolidated 2015-16
Income - in Rs, lakh	301,197.51	288,276.41	301,081.63	288,183.71
Profit before tax - in Rs, lakh	51,696.43	37,327.79	51,580.55	37,234.49
Share of profit of associate before tax - in Rs, lakh	Nil	Nil	932.42	1,048.55
Profit after tax - in Rs, lakh	35,217.95	25,440.69	35,484.73	25,777.17
PVC Resin
Production - in MTs	251,710	246,901	251,710	246,901
Sale - in MTs (excluding inter divisional):	87,235	106,771	87,235	106,771
Sale - in Rs, lakh (excluding inter divisional):	77,076.34	81,151.72	77,076.34	81,151.72
PVC Pipes and Fittings
Production - in MTs	207,761	207,163	207,761	207,163
Sale - in MTs	209,419	208,764	209,419	208,764
Sale - in Rs, lakh	221,687.30	203,051.46	221,687.30	203,051.46
Power
Production - in MWh	211,502	188,788	211,502	188,788

During the financial year, 10,000 MT capacity was added to PVC pipes & fittings and with this addition, the total capacity of PVC pipes and fittings stands at 2,90,000 MT p.a. The sales volume for PVC pipes & fittings was 2,09,419 MT for the financial year ended 31st March, 2017 as against 2,08,764 MT for the financial year ended 31st March, 2016. Total standalone income from operations was at Rs, 3,01,197.51 lakh for financial year ended 31st March, 2017 against Rs, 2,88,276.41 lakh for the financial year ended 31st March, 2016. Profit after tax was at Rs, 35,217.95 lakh for the financial year ended 31st March, 2017 as against Rs, 25,440.69 lakh for the financial year ended 31st March, 2016. During the year, the Company reduced total debt by Rs, 11,736.04 lakh. At the end of the financial year 2016-2017, the Company does not have any long term debt.

Dividend

Your directors have recommended dividend on equity shares @115% (Rs, 11.50 per equity share). The dividend on equity shares including corporate dividend tax, if approved by the Members, will absorb Rs, 17,176.20 lakh.

As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) 2015, the Company has formulated a Dividend Distribution Policy, which has been uploaded on the company''s website www.finolexwater.com/investors/policies-code-of-conduct/

Transfer to reserves

The Non-Convertible Debentures of Rs, 10000 lakh issued by the Company on private placement basis have been redeemed during December, 2016. Therefore, your directors have proposed to transfer an amount of Rs, 7500 lakh from Debenture Redemption Reserve to General Reserve.

Deposits

Your Company has not accepted any deposits, described under Chapter V of the Companies Act, 2013. Hence no details to report pursuant to Rules 8 (5) (v) and (vi) of the Companies (Accounts) Rules, 2014.

Management discussion and analysis

Pursuant to Regulation 34 (2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a management discussion and analysis report forms a part of this annual report.

Consolidation of financial statements

As at the end of the financial year, your Company does not have any subsidiary company. However, it does have two associate companies namely Finolex Plasson Industries Pvt. Ltd and Pawas Port Limited.

The consolidated financial statements as prepared pursuant to the provisions of section 129 of the Companies Act, 2013 (the "Act") and schedule III of the Companies Act, 2013 are annexed and form a part of this annual report.

Revision in financial statements

There has been no revision in the financial statements of the Company during the financial year 2016 - 2017.

Subsidiary and Associate Companies

As required under Rule 5 of the Companies (Accounts) Rules, 2014, Form AOC-1 of the statement containing salient features of the financial statements of the associate or joint venture companies is annexed and forms part of this annual report.

During the financial year 2016-17 no company has become an associate of the Company.

The Company has also formulated the policy on material subsidiaries in alignment with the provisions of Regulation 16(i)(c) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. As required under Regulation 46 (2)(h) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Material Subsidiary Policy has been uploaded on the company''s website www.finolexwater.com at the following link: www.finolexwater.com/ investors/policies-code-of-conduct/.

Directors'' Responsibility Statement

Pursuant to Regulations 34(3) and 53(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the related party disclosures as specified in Para A of Schedule V are as below:

Sr. No.	In the accounts of	Disclosure of amounts at the year end and the maximum amount of loans/advances/investments outstanding during the year
1	Holding Company	* Loans and advances in the nature of loans to subsidiary by name and amount.	No Holding Company.
		* Loans and advances in the nature of loans to associates by name and amount.
		*Loan and advances in the nature of loans to firms/companies in which directors are interested by name and amount.
2	Subsidiary	Same disclosures as applicable to the parent company in the accounts of subsidiary company.	No Subsidiary Company
3	Holding Company	Investments by the loanee in the shares of parent company and subsidiary company, when the company has made a loan or advance in the nature of a loan.	No Holding Company

Pursuant to section 134(5) of the Companies Act, 2013, your directors, on the basis of information and documents made available to them, confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the directors have selected such accounting policies 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 financial year and of the profit of the Company for that period;

d) the directors have prepared the annual accounts on a going concern basis;

e) 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; and

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

Corporate governance

A separate statement of corporate governance in the compliance with corporate governance requirements specified in regulation 17 to 27 and clauses

(b) to (i) of sub-regulation (2) of regulation 46 of SEBI (Listing Obligationâs and Disclosure Requirements) Regulations,

2015 along with the compliance certificate obtained from M/s SVD & Associates, practicing company secretaries is annexed and forms part of this annual report.

Material changes and commitments

Contracts or arrangements with related parties

The particulars of related party transactions are stated in note no. 40 in the financial statements, Annexure 2, 3 and 5(vi) of this report.

All related party transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business of the Company. There are no materially significant related party transactions made by the Company with its Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained on a quarterly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee for its approval on a quarterly basis. The statement is supported by a Certificate from the Chief Financial Officer.

The Company has developed a Related Party Transactions Manual, Standard Operating Procedures for the purpose of identifying and monitoring such transactions.

The Related Party Transactions Policy of the Company approved by the Board of

Directors of the Company (the "Board") is displayed on the company''s website www. finolexwater.com at the following link: ://www.f inolex water. com/pol icies-code-of-conduct/.

Risk management

During the financial year 2014-2015, your directors had constituted a Risk Management Committee. The details of the Committee and its terms of reference are set out in the Corporate Governance Report forming a part of the Board of Directors'' Report.

The Company has a robust risk management framework to identify and evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company''s competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business segments. Risk management forms an integral part of the business planning and forecasting. The key business risks identified by the Company and its mitigation plans are included in the management discussion and analysis report.

Internal financial control

Pursuant to Rule 8 (5)(viii) of the Companies (Accounts) Rules, 2014, the details in respect of adequacy of internal financial controls with reference to the financial statement are given below:

The Company has in place adequate internal control procedures, proportionate to the nature of the business and the size of operations, for the smooth conduct of business. These systems are implemented for safeguarding the assets, the prevention and detection of fraud and errors, the accuracy and completeness of the accounting records and timely preparation of reliable financial information.

The scope and authority of the internal auditors are defined by the audit committee from time to time. To maintain its objectivity and independence, our internal auditors M/s Sharp and Tannan reports their observations to the audit committee of the Board. The internal auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of the internal auditor, process owners undertake corrective action in their respective areas which then strengthens the control. Audit observations and corrective actions thereon are presented to the audit committee of the Board.

Directors and key managerial persons

The Board of your Company is duly constituted with proper balance of executive directors, non-executive directors and independent directors.

Pursuant to Sections 149 (1) and 161 of the Companies Act, 2013 read with Rule 8 (5) (iii) of the Companies (Accounts) Rules,

2014, the details relating to directors and key managerial persons who were appointed or have resigned are reported as under:

Retirement of director

Mr.Saurabh S. Dhanorkar (DIN: 00011322), Managing Director retired from the services of the Company with effect from the close of business hours of 30th November, 2016.

Re-appointment of Director

Mr. Sanjay S. Math (DIN: 01874086) who was Director (Operation) upto 30th November, 2016 has been appointed as Managing Director of the Company with effect from 1st December, 2016 and his appointment was approved in the last annual general meeting.

Mrs. Ritu R Chhabria (DIN:00062144), a non-executive and non-independent director retires by rotation as Director at the ensuing annual general meeting and being eligible, offers herself for re-appointment.

Appointment of Director

Appointment of Mr. Anil V. Whabi as wholetime director designated as Director -Finance

The Board at its meeting held on 26th August, 2016 appointed Mr. Anil V. Whabi (DIN 00142052) as Additional Director of the Company. In addition, he has been appointed as whole-time Director designated as Director - Finance for a period of five years from 26th August, 2016 to 25th August, 2021 and fixed his remuneration on the recommendation of the Nomination and Remuneration Committee. He holds office up to the ensuing annual general meeting.

The resolution for appointment of Mr. Anil V. Whabi as whole time director including payment of his remuneration is contained in the notice of the ensuing annual general meeting.

Mr. Anil V .Whabi, aged 57 years, a science graduate from the University of Jodhpur and a Chartered Accountant from the Institute of Chartered Accountants of India has over 33 years of experience in various companies in the field of Finance, Account and Taxation .

Independent directors

The Members approved the appointments of Mr. Sanjay K. Asher, Mr. Kanaiyalal N. Atmaramani, Mr. Dara N. Damania, Mr. Shrikrishna N. Inamdar, Mr. Prabhakar

D. Karandikar and Dr. Sunil U. Pathak as independent directors for a period of five years effective 20th September, 2014, they are not liable to retire by rotation. The terms and conditions of the appointment of independent directors are as per Schedule IV of the Companies Act, 2013. Pursuant to section 149(7) of the Companies Act, 2013, all independent directors have given declarations for the financial year 2017-2018 that they meet the criteria of independence as laid down under section 149 (6).

Key Managerial Personnel

During the financial year 2016-17, the following changes took place within Key Managerial Personnel.

1. Mr. Umesh M. Gosavi, resigned as Company Secretary and Compliance Officer with effect from 19th August, 2016. On his resignation he ceased to be the Key Managerial Person of the Company from the said date.

2. Mr. Anil V. Whabi was appointed as Additional Director. In addition, he has been appointed as whole-time Director designated as Director - Finance with effect from 26th August, 2016. He is also Chief Financial Officer of the Company with effect from 11th August, 2014 and also a Key Managerial Person.

3. Mr. Saurabh S. Dhanorkar retired as Managing Director with effect from 30th November, 2016 and ceased to be a Key Managerial Person of the Company from the said date.

4. Mr. Sanjay S. Math who was Director (operations) upto 30th November 2016 has been appointed as Managing Director with effect from 1 st December, 2016. Therefore, he is also a Key Managerial Person.

5. Ms.Vidya R. Shembekar was appointed as Company Secretary and Compliance Officer with effect from 8th December, 2016. She is also a Key Managerial Person.

Training and familiarization programme for directors

The Board members are provided with necessary documents, reports and internal policies to enable them to familiarize themselves with the Company''s procedures and practices.

Periodic presentations are made to the Board and Board Committee Meetings, on business and performance updates of the Company, the global business environment, business strategy and various risks involved.

Detailed presentations on the Company''s business segments were made at separate meetings held by the independent directors during the year.

Quarterly updates on relevant statutory changes and landmark judicial pronouncements encompassing important laws are regularly presented to the Directors.

In compliance of Regulation 25 (7) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has adopted the familiarization programme for independent directors with the aim to provide them with an insight into their roles, rights, responsibilities within the Company, the nature of the business of the Company and the business model of the Company.

The details of the familiarization programme for independent directors are available on the Company''s website www.finolexwater. corm/investors/Publicities-code-of-conduct/.

Policy on directors'' appointment and remuneration

The Company''s Nomination and Remuneration Committee is governed by the terms of reference. The Company''s nomination and remuneration policy includes directors'' appointment and remuneration including the criteria for determining qualifications, positive attributes, independence of a director and other details are furnished in Annexure 1.

The Company''s Nomination and Remuneration Policy is also available on the Company''s Website www.finolexwater. com at the following link: www.finolexwater. corm/investors/Policies-code-of-conduct/.

Annual evaluation by the Board of its own performance and that of its committees and individual directors

The Company has devised a nomination and remuneration policy for performance evaluation of independent, nonexecutive and executive directors. The criteria for this evaluation includes qualification, positive attributes, areas of expertise and the number of directorships and memberships held in various committees in other companies.

Remuneration of Directors and key managerial personnel

Particulars of Employees

Disclosure pertaining to remuneration and other details as required under section 197(12) of the Companies Act, 2013 read with rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are furnished in Annexure 3.

Auditors and Auditors'' Report Auditors

Pursuant to section 139 of the Companies Act, 2013 and the Rules made there under, M/s. P G. Bhagwat, Chartered Accountants, Pune are entitled to hold office of statutory auditors for the first term of five years until the conclusion of the annual general meeting to be held in the year 2017.

The Board at its meeting held on 26th May, 2017 has, on recommendation of the Audit Committee considered the proposal for the reappointment of M/s. PG.Bhagwat (Firm Regn. No.101118W) for the second five year term from the financial year 2017-18 (subject to ratification of their appointment at every annual general meeting) on such remuneration as shall be fixed by the Board.

M/s. P G. Bhagwat has conveyed their consent and issued a certificate of eligibility pursuant to section 139 of the Companies Act, 2013. Your Directors recommend the appointment of M/s. P G. Bhagwat, Chartered Accountants, Pune for the second five year term from the financial year 2017-18, from the conclusion of the annual general meeting of the Company to be held in 2017 until the conclusion of the annual general meeting to be held in 2022.

Appointment of cost auditors

The Board at its meeting held on 26th May, 2017 has, on recommendation of the Audit Committee, reappointed M/s. S. R. Bhargave & Co. as cost auditors to conduct an audit of cost accounting records of the Company for the financial year ending 31st March, 2018. Pursuant to the provisions of section 148 of the Companies Act, 2013 and rules made there under, the ratification by the Members is necessary for the payment of remuneration to the cost auditors. Your directors recommend the same.

Secretarial audit report

Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. SVD & Associates, Practicing Company Secretaries in, Pune to undertake the secretarial audit of the Company. The secretarial audit report for the financial year 2016-17 is enclosed herewith and marked as Annexure 4.

There is no qualification, reservation or adverse remark or disclaimer made by the company secretary in practice in his Secretarial Audit Report for the financial year 2016-17.

Disclosures:

Pursuant to section 134(3) (a) to (q), certain items are required to be reported by the Company in the Directors'' Report. Your directors are pleased to furnish the required details as under:

Committees of directors and key managerial persons

The details of the committee of the directors and key managerial persons pursuant to the SEBI (Listing Obligations Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013 are described in the corporate governance report of the annual report.

Audit Committee

The Audit Committee has been duly constituted as required under the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations Disclosure Requirements) Regulations, 2015.

The details pertaining to the composition of the Audit Committee, required to be given pursuant to Section 177 (8) of the Companies Act, 2013, are given in the corporate governance report section of the annual report on page no. 85. There are no instances of the Board not having accepted the recommendation of the Audit Committee during the financial year 2016-17.

Number of meetings of the Board

During the year under review, five meetings of the Board of Directors were held. The details of the meetings are provided in the corporate governance report on page no. 85.

Extract of Annual return

Pursuant to section 134(3)(a) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, the extract of annual return in the prescribed format MGT-9 is enclosed herewith and marked as Annexure 5.

Vigil mechanism / Whistle blower policy

Pursuant to section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of the SEBI (Listing Obligations Disclosure Requirements) Regulations, 2015, the Company has established a vigil mechanism known as the Whistle Blower Policy (the "WBP") to report genuine concerns to the Chairman of the Audit Committee. The WBP provides adequate safeguards against victimization of persons who use such mechanisms and ensures direct access to the Chairman of the Audit Committee. The details of the WBP are explained in the corporate governance report and also posted on the company''s website. The Company affirms that no director or employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year.

Sexual harassment policy

The Company has in place a policy for prevention of sexual harassment of its employees at the workplace. In line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013, an Internal Complaints'' Committee has been constituted by the Company to redress any complaints received regarding sexual harassment. Your directors state that during the year under review, there was no case filed pursuant to the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Insider Trading

In compliance with the provisions of SEBI (Prohibition of Insider Trading) Regulations, 2015 and to preserve the confidentiality and prevent misuse of unpublished price sensitive information, the Company has adopted a Code of Conduct to Regulate, Monitor and Report Trading by Insiders (''Insider Trading Code'') and a Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (''Code of Fair Disclosure'').

The Insider Trading Code is intended to prevent the misuse of Unpublished Price Sensitive Information by insiders and connected persons and ensure that the Directors and specified persons of the Company and their dependents shall not derive any benefit or assist others to derive any benefit from access to and possession of price sensitive information about the Company which is not in the public domain, that is to say, insider information.

The Code of Fair Disclosure ensures that the affairs of the Company are managed in a fair, transparent and ethical manner keeping in view the needs and interest of all the stakeholders.

Particulars of loans, guarantees or investments

Pursuant to section 186 of the Companies Act, 2013, the details, as applicable, of loans given, investments made or guarantees given are given in note no. 7 to the financial statements for the financial year 2016- 2017.

It is clarified that the Company has no loans/ advances and investments in its own shares.

Significant and material orders passed by the regulators or courts or tribunals

Shares

Employee stock option scheme

The paid-up equity share capital of the Company as on 31st March, 2017 was t 12,409.53 lakh. During the year under review, your directors confirm that no shares were issued under the subsisting Finolex Industries Limited - Employee Stock Option Scheme Plan (ESOP) of the Company.

Sweat equity shares and equity shares with differential voting rights

Your directors confirm that neither sweat equity shares nor equity shares with differential voting rights have been issued by the Company during the year under review.

The conservation of energy, technology absorption, foreign exchange earnings and outgo

Ratnagiri. Your Company, is in compliance with all applicable environmental regulations in respect of air, water, noise, hazardous waste, e-waste etc. to mitigate the potential environmental impact on the society.

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo required to be given under section 134(3) of the Companies Act, 2013, read with rule 8(3) of the Companies (Accounts) Rules, 2014 is enclosed herewith and marked as Annexure 6.

Business responsibility report

Business Responsibility Report for the year ended 31st March, 2017 as stipulated under Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is enclosed as Annexure 7.

Corporate social responsibility

Pursuant to section 135 of the Companies Act, 2013, the Board has constituted Corporate Social Responsibility (CSR) Committee and also framed the corporate social responsibility policy. The details of the CSR Committee are given in the corporate governance report section of the annual report.

The corporate social responsibility policy of the Company can be viewed on the company''s website www.finolexwater.com at the following link www.finolexwater.com/ policies-code-of-conduct/.

As a responsible corporate, your Company conducts its CSR Activities in health care, education, water conservation and community welfare with Company''s CSR Partner Mukul Madhav Foundation ("MMF"). Your Company has been actively contributing to the social and economic development of the underprivileged in the villages in and around your Company''s plants situated at Ratnagiri and Urse in the state of Maharashtra and Masar in the state of Gujarat.

The CSR activities carried out by your Company through MMF is headed by Mrs. Ritu R Chhabria, Managing Trustee of Mukul Madhav Foundation, a driving force in accomplishing the activities on a day-to-day basis.

During the financial year 2016-17, your Company in association with MMF has incurred expenditure on various CSR activities aggregating Rs,433.68 lakh against the mandatory CSR expenses of Rs, 419.12 lakh.

A detailed report on the CSR activities is enclosed as Annexure 8.

Cautionary statement

Statements in the Board of Directors'' Report and the Management Discussion & Analysis describing the Company''s objectives, expectations or forecasts may be within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company''s operations include global and domestic demand and supply conditions affecting the selling price of finished goods, input availability and prices, changes in Government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

Acknowledgements

Your directors take this opportunity to place on record their sense of gratitude to the banks, financial institutions, central and state Government departments and their local authorities for their guidance and support. Your directors are also grateful to the customers, suppliers and business associates of the Company for their continued co-operation and support. Your directors express their deep appreciation for the commitment, dedication and hard work put in by the employees at all levels. Lastly, your directors are grateful for the confidence and faith shown in them by the shareholders of the Company.

For and on behalf of the Board of Directors

Place: Pune Prakash R Chhabria

Date: 26^th May, 2017 Executive Chairman

DIN :00016017

Mar 31, 2016

The directors have pleasure in presenting the thirty-fifth annual report together with the audited financial statements including consolidated financial statements for the year ended 31st March, 2016.

State of the Company''s affairs:

Financial Results (Rs, in lakhs)

Standalone Standalone Consolidated 2015-16 2014-15 2015-16

Profit before depreciation & finance charges 43,870.79 20,982.58 44,406.33

Less:

Finance charges 4,464.34 7,037.10 4,464.34

Profit before depreciation and taxation 39,406.45 13,945.48 39,941.99

Deductions for:

(i) Depreciation 5,057.36 5,867.42 5,057.36

(ii) Provision for taxation 10,989.68 3,300.23 10,989.68

Profit after depreciation and taxation 23,359.41 4,777.83 23,894.95

Add:

Surplus of Profit and Loss account of earlier year 11,959.95 12,688.83 11,959.95

Add:

Excess Dividend Tax provision 3 00 -- 3,00

Increased

Add:

Share of profit of associates for earlier years - - 3,109.50

Less:

Depreciation as per Schedule II -- 2 028 57 --

Note 7(b) of the Companies Act, 2013

Appropriations:

(i) General reserve 4,000.00 500.00 4,000.00

(ii) Proposed dividend (including prior year 12,409.53 2,481.91 12,409.53

adjustments)

(iii) Tax on dividend 2,526.29 496.23 2,526.29

Balance carried over to the Balance Sheet 16,386.54 11,959.95 20,031.58

Operations

The operational performance is summarized below:

Standalone Standalone Consolidated 2015-16 2014-15 2015-16

Income 2,49,195.28 2,49,638.51 2,51,550.37

Profit before tax 34,349.09 8,078.06 34,884.63

Profit after tax 23,359.41 4,777.83 23,894.95

PVC Resin

Production - in (MTs) 2,46,901 2,35,049 2,46,901

Sale - in (MTs) 1,06,771 1,21,423 1,06,771

(excluding interdi visional): - in Rs lakhs 66,957.31 77,915.62 66,957.31

PVC Pipes and Fittings

Production - in (MTs) 2,07,163 1,85,679 2,07,163

Sale - in (MTs) 2,08,763 1,85,786 2,08,763 - in Rslakhs 1,78,216.58 1,69,381.76 1,78,216.58

Power

Production -in (MWh) 1,88,788 1,65,865 1,88,788

During the financial year, 30,000 MT p.a capacity was added to PVC pipes and fittings and, with this addition, the total capacity of PVC pipes and fittings stands at 2,80,000 MT p.a. The sales volumes for PVC pipes & fittings was 2,08,763 MT for the financial year ended 31st March, 2016 as against 1,85,786 MT for the financial year ended 31st March, 2015. Total income from operations was at Rs. 2,45,283.09 lakhs for financial year ended 31st March, 2016 against Rs. 2,47,614.93 lakhs for the financial year ended 31st March, 2015. Profit after tax was at Rs. 23,359.41 lakhs for the financial year ended 31st March, 2016 as against Rs. 4,777.83 lakhs for the financial year ended 31st March, 2015. During the year the Company reduced total debt by Rs. 42,555.70 lakhs.

Dividend

Your directors have recommended dividend on equity shares @ 100% (Rs. 10/- per equity share) which includes @ 25% (Rs. 2.50 per share) as Special Dividend for the financial year 2015-2016 to pay homage to late Mr. P. P. Chhabria, Founder Promoter of the Company. The final dividend on equity shares including corporate dividend tax, if approved by the Members, will absorb Rs. 14,935.82 lakhs.

Transfer to reserves

Your directors have proposed to transfer an amount of Rs. 4,000.00 lakhs to the general reserves. An amount of Rs. 20,031.58 lakhs is proposed to be retained in the statement of profit and loss.

Deposits

Your Company has not accepted any deposits, described under Chapter V of the Companies Act, 2013. Hence, no details to report pursuant to Rules 8 (5) (v) and 8 (5) (vi) of the Companies (Accounts) Rules, 2014.

Management discussion and analysis

Pursuant to Regulation 34 (2) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the "Listing Regulations"), a management discussion and analysis report forms a part of this annual report.

Consolidation of financial statements

As on end of the financial year, your Company does not have any subsidiary company. However, it does have two associate companies namely Finolex Plasson Industries Private Limited and Pawas Port Limited.

The consolidated financial statements as prepared pursuant to the provisions of section 129 of the Companies Act, 2013 and Schedule III of the Companies Act, 2013 are annexed and form part of this annual report.

Revision in financial statements

There has been no revision in the financial statements of the Company during the financial year 2015 - 2016.

Subsidiary and Associate Companies

As required under Rule 5 of the Companies (Accounts) Rules, 2014, Form AOC-1 of statement containing salient features of financial statements of the associate or joint venture companies is annexed and forms part of this annual report.

Pursuant to Rule 8(1) of the Companies (Accounts) Rules, 2014, the performance and financial position of the associate or joint venture companies included in the consolidated financial statements is annexed to and forms part of this annual report.

Further, it is reported pursuant to Rule 8(5) (iv) of the Companies (Accounts) Rules, 2014 that during the financial year 2015-16, Rajasthan Olive Cultivation Limited has ceased to be an associate company, in relation to the Company or joint venture company. Further, during the financial year 2015-16, no company has become an associate of the Company.

The Company has also formulated the policy on material subsidiaries in alignment with the provisions of Regulation 16(1) (c) of the Listing Regulations. As required under Regulation 46 (2) (h) of the Listing Regulations, the Material Subsidiary Policy has been displayed on the website of the Company www.finolexwater.com at the following link: http://www.finolexwater.com/policies- code-of-conduct/

Pursuant to Regulations 34(3) and 53(f) the related party disclosures as specified in Para A of Schedule V are as given below:

Sr. In the accounts of Disclosures of amounts at the year end and the maximum amount No loans/ advances/ Investments of outstanding during the year.

1 Holding Company - Loans and advances in the nature of loans to subsidiaries by name and No Holding amount. Company

- Loans and advances in the nature of loans to associates by name and amount.

- Loans and advances in the nature of loans to firms/ companies in which directors are interested by name and amount.

2 Subsidiary Same disclosures as applicable to the parent company in the accounts of No Subsi diary subsidiary company. Company

3 Holding Company Investments by the loanee in the shares of parent company and subsidiary No Holding company when the company has made a loan or advance in the nature Company of loan.

Directors'' Responsibility Statement

Pursuant to section 134(5) of the Companies Act, 2013, your directors, on the basis of information and documents made available to them, confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the directors had selected such accounting policies 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 financial year and of the profit of the Company for that period;

c) the directors had taken proper and sufficient care for 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;

d) the directors had prepared the annual accounts on a going concern basis;

e) the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) 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.

Corporate governance

A separate statement of corporate governance in compliance with corporate governance requirements specified in regulations 17 to 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 along with a compliance certificate obtained from M/s SVD & Associates, practicing company secretaries is annexed and forms part of this annual report.

Material changes and commitments

Your directors confirm that there are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company and the date of this report.

Contracts or arrangements with related parties

The particulars of related party transactions are stated in the note no. 1.10 in financial statements, Annexures 2, 3 and 5(vi) of this report.

All related party transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business of the Company. There are no materially significant related party transactions made by the Company with its Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained on a quarterly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee for their approval on a quarterly basis. The statement is supported by a Certificate from the Chief Financial Officer.

The Company has developed a Related Party Transactions Manual, Standard Operating Procedures for the purpose of identifying and monitoring such transactions.

The Related Party Transactions Policy of the Company approved by the Board of Directors of the Company (the "Board") is displayed on website of the Company www.finolexwater.com at the following link:http://www.finolexwater.com/policies-code-of-conduct/.

Risk management

During the financial year 2014-2015, your directors have constituted a Risk Management Committee. The details of the Committee and its terms of reference are set out in the Corporate Governance Report forming a part of the Board of Director''s Report.

The Company has a robust risk management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company''s competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business segments. Risk management forms an integral part of the business planning and forecasting. The key business risks identified by the Company and its mitigation

plans are included in management discussion and analysis report.

Internal financial control

Pursuant to Rule 8 (5)(viii) of the Companies (Accounts) Rules, 2014, the details in respect of adequacy of internal financial controls with reference to the financial statement are given below.

The Company has an internal control system which includes internal financial controls, the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of business, including adherence to the Company''s policies, the safeguarding of the assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and timely preparation of reliable financial information commensurate with the size, scale and complexity of its operations.

The scope and authority of the internal auditor are defined by the audit committee from time to time. To maintain its objectivity and independence, the internal auditor reports its observations to the audit committee of the Board. The internal auditor monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of the internal auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Audit observations and corrective actions thereon are presented to the audit committee of the Board.

Directors and key managerial persons:

Pursuant to Sections 149 (1) and 161 of the Companies Act, 2013 read with Rule 8 (5) of the Companies (Accounts) Rules, 2014, the following details relating to directors and key managerial persons are reported:

The Board of your Company is duly constituted with proper balance of executive directors, non- executive directors and independent directors.

Reappointment of directors:

Reappointment of Mr. Sanjay S. Math as Director of the Company

Mr. Sanjay S. Math (DIN: 01874086) retires by rotation as Director at the ensuing annual general meeting and being eligible, offers himself for reappointment.

Reappointment of Mr.Prakash P. Chhabria as Whole-time Director designated as Executive Chairman and Mr. Sanjay S. Math as Managing Director, who shall be Whole-time Director

The Board at its meeting held on 21st October, 2011 had re-appointed Mr. Prakash P. Chhabria (DIN: 00016017) as Managing Director of the Company for a period of five years viz. 1st December, 2011 to 30th November, 2016. Further, the Board, at its meeting held on 20th June,

2012 has appointed Mr. Prakash P. Chhabria as Whole-time Director designated as Executive Chairman of the Company for the period from the close of business hours of 11th August, 2012 to 30th November, 2016.

The Board of Directors has appointed Mr. Sanjay S. Math (DIN: 01874086) as Whole-time Director designated as Director (Operations) for a period of five years from 4th February, 2012 to 3rd February, 2017.

The said appointments of Mr. Prakash P. Chhabria and Mr. Sanjay S. Math were approved by the Members at their thirty - first annual general meeting held on 11th August, 2012.

The Board of Directors at its meeting held on 21st May, 2016 has reappointed and fixed the remuneration on the recommendation of the Nomination and Remuneration Committee of:

1. Mr.Prakash P. Chhabria as Whole-time Director designated as Executive Chairman for a period of five years from 1st December, 2016.

2. Mr. Sanjay S. Math as Managing Director, who shall be Whole-time Director, for a period of five years from 1st December, 2016.

The resolutions for the appointments of Mr. Prakash P. Chhabria as Whole-time Director designated as Executive Chairman and Mr. Sanjay S. Math as Whole-time Director designated as Managing Director including payment of their remuneration are contained in the notice of the ensuing annual general meeting.

Mr. Prakash P. Chhabria, Executive Chairman, age 53 years is a Whole-time Director since March, 1992. Mr. Prakash P. Chhabria is B.Sc. in International Business from University of Evansville, USA has completed Advanced Management Programme from Wharton Business School, USA and has also completed an Executive Program from Stanford, USA. Mr. Prakash P. Chhabria is a well-known industrialist. He is a director on the Board of few public companies and private limited companies. Mr. Prakash P. Chhabria holds 1,70,749 equity shares of the Company.

Mr. Sanjay S. Math, age 60 years is B.E. (Chemicals), UDCT and PGDM, Mumbai. He is a member of American Institute of Chemical Engineering. He has to his credit 40 years of rich working experience in various projects and petrochemical plant operations. He has worked in reputed organizations like NOCIL, Bombay Dyeing, Rama Petrochemicals, SoudiYanbu Petrochemicals, Essar Refinery etc. Mr. Math has earlier worked with the Company at Ratnagiri from December 2004 to July 2008 as Director (Manufacturing). Mr. Sanjay S. Math holds 3,000 equity shares of the Company.

The Board recommends the appointments as stated above and payment of remuneration.

Retirement of Director

Mr. Saurabh S. Dhanorkar, Managing Director is to retire on 30th November, 2016 after 33 years of dedication to the Company. The Board of Directors at its meeting held on 21st May, 2016 has considered and approved the retirement of Mr. Saurabh S. Dhanorkar, Managing Director and also Key Managerial Personnel with effect from the end of the current term of appointment i.e. 30th November, 2016. The Board appreciates the loyalty and commitment of Mr. Saurabh S. Dhanorkar to the Company.

Independent directors

The Members approved the appointments of Mr. Sanjay K. Asher, Mr. Kanaiyalal N. Atmaramani, Mr. Dara N. Damania, Mr. Shrikrishna N. Inamdar Mr. Prabhakar D. Karandikar and Dr. Sunil U. Pathak as independent directors for a period of five years effective 20th September, 2014, who are not liable to retire by rotation. The terms and conditions of the appointment of independent directors are as per Schedule IV of the Companies Act, 2013. Pursuant to section 149(7) of the Companies Act, 2013, all independent directors have given declarations for the financial year 2016-2017 that they meet the criteria of independence as laid down under section 149 (6).

Key managerial personnel

The Board has designated Mr. Saurabh S. Dhanorkar, Managing Director, Mr. Anil V. Whabi, Chief Financial Officer and Mr. Umesh M. Gosavi, Company Secretary as the Key Managerial Personnel of your Company for financial year 2015-16.

Training and familiarization programme for directors

The Board members are provided with necessary documents/brochures, reports and internal policies to enable them to familiarize themselves with the Company''s procedures and practices.

Periodic presentations are made at the Board and Board Committee Meetings on business and performance updates of the Company, global business environment, business strategy and risks involved.

Detailed presentations on the Company''s business segments were made at the separate meetings of the independent directors held during the year.

Quarterly updates on relevant statutory changes and landmark judicial pronouncements encompassing important laws are regularly circulated to the Directors.

In compliance of the Regulation 25 (7) of the Listing Regulations, the Company has adopted the familiarization programme for independent directors with an aim to provide to the independent directors insight in their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc.

The details of the familiarization programme for independent directors are available on the website of the Company http://www.finolexwater.com/wp-content/uploads/2015/07/File-5-Directors- familarization-program1.pdf.

Policy on directors'' appointment and remuneration

The Nomination and Remuneration Committee of the Company is governed by a terms of reference. The Company''s nomination and remuneration policy includes directors'' appointment and remuneration including the criteria for determining qualifications, positive attributes, independence of a director and other details are furnished in Annexure 1.

Annual evaluation by the Board of its own performance and that of its committees and individual directors

The Company has devised a policy for performance evaluation of independent directors, Board, Committees and other individual Directors which include criteria such as qualification, positive attributes, area of expertise and number of directorship and memberships held in various committee in other companies by such person for performance evaluation of the non-executive directors and executive directors.

The nomination and remuneration policy, inter alia, giving details about the policy on directors'' appointment and remuneration including the criteria for determining qualifications, positive attributes, independence and other details are included in the nomination and remuneration policy annexed herewith.

Remuneration of Directors and key managerial personnel

Pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the details of remuneration of directors and key managerial personnel are as furnished in Annexure 2.

Particulars of Employees

Disclosure pertaining to remuneration and other details as required under section 197(12) of the Companies Act, 2013 read with rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are furnished in Annexure 3.

Auditors and Auditor''s Report:

Auditors

Pursuant to section 139 of the Companies Act, 2013, M/s. P. G. Bhagwat, Chartered Accountants, Pune were appointed as auditors until the conclusion of the annual general meeting to be held in the year 2017 (subject to ratification of their appointment at every annual general meeting) on such remuneration as shall be fixed by the Board. M/s. P. G. Bhagwat has issued a certificate of eligibility pursuant to section 141 of the Companies Act, 2013. Your directors recommend the ratification of the appointment of M/s. P. G. Bhagwat, Chartered Accountants, Pune from the conclusion of the annual general meeting of the Company to be held in the year 2016 until the conclusion of annual general meeting to be held in the year 2017.

Appointment of cost auditors

The Board at its meeting held on 21st May, 2016 has, on the recommendation of the Audit Committee, reappointed M/s. S. R. Bhargave & Co. as cost auditors for carrying out audit of cost accounting records of the Company for the financial year ending 31st March, 2017. Pursuant to the provisions of section 148 of the Companies Act, 2013 and rules made thereunder, the ratification by the Members is necessary for the payment of remuneration to cost auditors. Your directors recommend the same.

Secretarial audit report

Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. SVD & Associates, Company Secretaries in practice, Pune to undertake the secretarial audit of the Company. The secretarial audit report for the financial year 2015-16 is annexed herewith and marked as Annexure 4.

There is no qualification, reservation or adverse remark or disclaimer made by the company secretary in practice in his Secretarial Audit Report for the financial year 2015-16.

Disclosures:

Pursuant to section 134(3) (a) to (q), there are certain items that are required to be reported by the Company in the Director''s report. Your directors are pleased to furnish the required details as under:

Committees of directors and key managerial persons

The details of the committee of the directors and key managerial persons pursuant to the Listing Regulations, and the Companies Act, 2013 are described in the corporate governance report of the annual report.

Audit Committee

The Audit Committee has been duly constituted as required under the provisions of the Companies Act, 2013 and the Listing Regulations.

The details pertaining to the composition of the Audit Committee, required to be given pursuant to Section 177 (8) of the Companies Act, 2013, are given in the corporate governance report section of the annual report on page no.73. There are no instances of the Board not having accepted the recommendation of the Audit Committee during the financial year 2015-16.

Number of meetings of the Board

During the year under review, five meetings of the Board of Directors were held. The details of the meetings are provided in the corporate governance report on page no. 73.

Extract of Annual return

Pursuant to section 134(3)(a) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, the extract of annual return in the prescribed format MGT-9 is annexed herewith and marked as Annexure 5.

Vigil mechanism / Whistle blower policy

Pursuant to section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of the Listing Regulations, the Company has established a vigil mechanism named Whistle Blower Policy (the "WBP") to report genuine concerns to the Chairman of the Audit Committee. The WBP provides adequate safeguards against victimization of persons who use such mechanism and makes provision for direct access to the Chairman of the Audit Committee in exceptional cases as envisaged under the WBP. The details of the WBP are explained in the corporate governance report and also posted on the website of the Company. The Company affirms that no director or employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year. Further, no complaint was received by the Chairman of the Audit Committee during the year.

Sexual harassment policy

The Company has in place a policy on prevention of sexual harassment of its employees at the workplace. In line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, an Internal Complaints Committee has been constituted by the Company to redress the complaints received regarding sexual harassment. Your directors state that during the year under review, there was no case filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Insider Trading

In compliance with the provisions of the SEBI (Prohibition of Insider Trading) Regulations, 2015 and to preserve the confidentiality and prevent misuse of unpublished price sensitive information, the Company has adopted a Code of Conduct to Regulate, Monitor and Report Trading by Insiders (''Insider Trading Code'') and a Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (''Code of Fair Disclosure'').

The Insider Trading Code is intended to prevent misuse of unpublished price sensitive information by insiders and connected persons and ensure that the Directors and specified persons of the Company and their dependents shall not derive any benefit or assist others to derive any benefit from access to and possession of price sensitive information about the Company which is not in the public domain, that is to say, insider information.

The Code of Fair Disclosure ensures that the affairs of the Company are managed in a fair, transparent and ethical manner keeping in view the needs and interest of all the stakeholders.

Particulars of loans, guarantees or investments

Pursuant to section 186 of the Companies Act, 2013, the details, as applicable, of loans given, investments made or guarantees given are given in note nos. 12, 13 and 15 to the financial statements for the financial year 2015- 2016 on page nos. 113, 114 and 115 of the annual report.

It is clarified that the Company has no loans/advances and investments in its own shares.

Significant and material orders passed by the regulators or courts or tribunals

Pursuant to Rule 8 (5) (vii) of the Companies (Accounts) Rules, 2014, it is reported that no significant and material orders have been passed by the regulators or courts or tribunals impacting the going concern status of the Company and the Company''s operations in future.

Shares

Employee stock option scheme

The paid-up equity share capital as on 31st March, 2016 was Rs.12409.53 lakhs. During the year under review, your directors confirm that no shares were issued under the subsisting Finolex Industries Limited - Employee Stock Option Scheme/ Plan (ESOP) of the Company.

Sweat equity shares and equity shares with differential voting rights

Your directors confirm that neither sweat equity shares nor equity shares with differential voting rights have been issued by the Company during the year under review.

The conservation of energy, technology absorption, foreign exchange earnings and outgo

Your Company is committed to achieve the highest standards of environmental excellence by adopting environmentally sustainable and effective operating systems and processes in its plants. Your Company has put in place internationally acclaimed Environment Management System under ISO 14001 certification at Ratnagiri. Your Company in compliance with all applicable environmental regulations in respect of air, water, noise, hazardous waste, e-waste etc. to mitigate potential environment impact on society.

Your Company''s manufacturing plants are well equipped with firefighting & safety equipment. In addition, your Company''s PVC resin manufacturing plant at Ratnagiri has put in place a process for safety system with well-equipped firefighting facilities. The plant has its own fire tenders which are capable of performing fire and rescue services for all types of emergencies. Fire tenders are sent on fire calls in villages/communities nearby as well as for attending calls in Ratnagiri city and industries around Ratnagiri. To keep firefighting system up-to-date and alert, mock drills and fire drills are performed through-out the year as per "On site Emergency Management Plan" with participation of all key personnel in the factory premises. Demonstration drills are performed in nearby schools and other establishments for the benefit of the public at large. Your Company believes this is an excellent example of "Service beyond self.

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo required to be given under section 134(3) of the Companies Act, 2013 read with rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed herewith and marked as Annexure 6.

Business responsibility statement

Business Responsibility Report as stipulated under Regulation 34 of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 has been hosted on the website of the Company www.finolexwater.com as is available to all the members, and should be deemed as contain in this annual report. A physical copy of the Business Responsibility Report will be made available on a request by any member in writing to the Company Secretaty at the registered office of the Company. During the year under review, your Company continued its focus on various initiatives on environments, social and governance perspective and the details of the same are given below.

Prevention of Air Pollution

Your Company has installed processes to comply with the requirement of National Ambient Air Quality Standards. All 12 parameters including particulate matters, sulfur dioxide and oxides of nitrogen are analyzed as per the standards. All stack emissions are also regularly monitored and the flue gas quality is under control as per specification laid down by respective Pollution Control Boards.

Zero Effluent Discharge

As a part of its endeavor to keep the environment and water bodies, around its plants at Ratnagiri free from contaminants and pollution, your Company has successfully achieved its goal for zero discharge of its treated effluent outside the plant premises partly by recycling it back in the system and by using the remaining for irrigation of tree plantation within the plant premises. The pipes and fittings manufacturing plant do not generate any effluent and are free from pollution. Ground water quality is monitored regularly by sampling and analysis of borewell water.

Effluent Treatment Plant

The aqueous effluent generated during the PVC manufacturing processes undergoes various treatments in your Company''s world class effluent treatment plants such as equalization, flocculation, floc separation, aeration activated sludge process, clarification, polishing using activated carbon filter etc. The treated effluent is checked regularly to ensure that it meets with Pollution Control Board specifications.

Effluent Recycle Plant

Part of the treated effluent undergoes further treatment in effluent recycle plant such as biological treatment, phosphate removal, ultra filtration and demineralization process for recycling it in the plant operations.

Tree Plantation

Remaining treated effluent fit for irrigation is used for growing trees planted in the plant premises. Your Company has planted and nurtured close to 50,000 trees of different varieties including fruit bearing trees such as mangoes, chikoo, cashew, coconut etc. within the PVC manufacturing plant and captive power plant premises. Tree Plantation activity is carried out annually during the week-long celebrations of World Environment Day commencing on 5th June every year.

Rain water harvesting

Your Company has built two large reservoirs which help in collecting rain water from nearby land. Also, these reservoirs are filled by pumping water from a dam on nearby river. This dam has also helped in bringing up the ground water table in the nearby vicinity.

Corporate social responsibility

Pursuant to section 135 of the Companies Act, 2013, during 2015, the Board has constituted Corporate Social Responsibility (CSR) Committee and also framed the corporate social responsibility policy. The details of CSR Committee are given in the corporate governance report section of this report.

The corporate social responsibility policy of the Company is displayed on website of the Company www.finolexwater.com at the following link: http://www.finolexwater.com/policies-code-of- conduct/.

As a responsible corporate citizen, your Company actively contributes to the social and economic development of the communities in and around its plants'' locations. Your Company in association with Mukul Madhav Foundation ("MMF"), a charitable trust, has partnered in this journey for many years. Your Company has been actively contributing to the social and economic development of the underprivileged in the villages in and around your Company''s plants situated at Ratnagiri and Urse in the state of Maharashtra and Masar in the state of Gujarat. Special focus has been placed on education, health care, community development, environment and self-development.

The CSR activities carried out by your company through MMF is headed by Mrs. Ritu P. Chhabria, Director, a driving force in accompnishing the activities on day-to-day basis.

During the financial year 2015-16, your Company in association with MMF has incurred expenditure on various CSR activities aggregating to Rs.352 lakhs against the mandatory CSR expenses of Rs.317 lakhs.

While a detailed report on the CSR activities is annexed as Annexure 7. The details of the activities undertaken by your Company in association with MMF are circulated seperately and is displayed on website of the Company www.finolexwater.com.

Cautionary statement

Statements in the Board of Directors'' Report and the Management Discussion & Analysis describing the Company''s objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company''s operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

Acknowledgements

Your directors take this opportunity to place on record their sense of gratitude to the banks, financial institutions, central and state government departments and their local authorities for their guidance and support. Your directors are also grateful to the customers, suppliers and business associates of the Company for their continued co-operation and support. Your directors express their deep appreciation for the commitment, dedication and hard work put in by the employees at all levels. Lastly, your directors are grateful for the confidence and faith shown in them by the Members of the Company.

For and on behalf of the Board of Directors

Prakash P. Chhabria

Place: Pune Executive Chairman

Date: 21st May, 2016 DIN: 00016017

Mar 31, 2015

Dear Members,

The directors have pleasure in presenting the thirty-fourth annual report together with the audited accounts for the year ended 31st March, 2015.

State of the Company's affairs:

Financial Results (Rs. in lakhs)

2014-15 2013-14

Profit before depreciation & finance charges 19,922.18 37,052.54

Less:

Finance charges 5,976.70 6,637.17

Profit before depreciation and taxation 13,945.48 30,415.37

Deductions for:

i) Depreciation 5,867.42 6,229.18

ii) Provision for taxation 3,300.23 7,171.53

Profit after depreciation and taxation 4,777.83 17,014.66

Add:

Surplus of Profit and Loss account of earlier 12,688.83 9,837.14 year

Less:

Depreciation as per Schedule II 2,028.57 -

Note 7(b) of the Companies Act, 2013

Appropriations:

(i) General reserve 500.00 4,000.00

(ii) Proposed dividend (including prior 2,481.91 8,686.67 year adjustments)

(iii) Tax on dividend 496.23 1,476.30

Balance carried over to the Balance Sheet 11,959.95 12,688.83

Operations

The operational performance is summarized below:

Income 2,49,638.51 2,49,671.13

Profit before tax 8,078.06 24,186.19

Profit after tax 4,777.83 17,014.66

PVC Resin

Production - in (MTs) 2,35,049 2,52,236

Sale in (MTs) 1,21,423 1,24,122

(excluding interdivisional): -in Rs. lakhs 77,915.62 87,441.07

PVC Pipes and Fittings

Production - in (MTs) 1,85,679 1,85,134

Sale in (MTs) 1,85,786 1,76,899

-in Rs. lakhs 1,69,381.76 1,56,326.64

Power

Production - in (MW) 1,65,865 2,37,929

Dividend

Your directors have recommended dividend on equity shares @ 20% (Rs. 2/- per equity share) for the financial year 2014-2015. The final dividend on equity shares including corporate dividend tax, if approved by the members, will absorb Rs. 2,978.14 lakhs.

Transfer to reserves

Your directors proposed to transfer an amount of Rs. 500 lakhs to the general reserves. An amount of Rs. 11,959.95 lakhs is proposed to be retained in the statement of profit and loss.

Deposits

Your Company has not accepted any deposits, described under Chapter V of the Companies Act, 2013. Hence, no details to report pursuant to Rules 8 (5) (v) and 8 (5) (vi) of the Companies (Accounts) Rules, 2014.

Management discussion and analysis

Pursuant to clause 49 VIII D of the listing agreements entered into with stock exchanges (the "Listing Agreement"), management discussion and analysis report of financial condition and results of operations has been reviewed by the audit committee and the same is forming a part of this annual report.

Consolidation of financial statements

Your Company does not have any subsidiary company, however it does have associate companies. Pursuant to section 129(3) and other applicable provisions of the Companies Act, 2013 (the "Act"), read with the Companies (Accounts) Rules, 2014, as amended, the Accounting Standards issued by the Institute of Chartered Accountants of India including amendments made thereto, the Company is not required to prepare consolidated financial statements for the financial year 2014-15.

Revision in financial statements

There has been no revision in the financial statements of the Company during the financial year 2014-2015.

Subsidiary and Associate Companies

Pursuant to Rule 8(1) of the Companies (Accounts) Rules, 2014, the performance and financial position of the Associate companies of the Company is not required to be given as stated above. The Company has no subsidiary or joint venture company.

Further, it is reported that pursuant to Rule 8(5)(iv) of the Companies (Accounts) Rules, 2014 that no company has become an associate of the Company during the financial year 2014-15. Further, no company has ceased to be an associate company of the Company during the financial year 2014-15.

The Company has also formulated the policy on material subsidiary pursuant to the provisions of clause 49 of the Listing Agreement. The Material Subsidiary Policy has been displayed on website of the Company www.finolexwater.com at link at http://www.finolexwater.com/policies- code-of-conduct/

Directors' Responsibility Statement

Pursuant to section 134(5) of the Companies Act, 2013, your directors, on the basis of information and documents made available to them, confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the directors had selected such accounting policies 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 financial year and of the profit of the Company for that period;

c) 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;

d) the directors had prepared the annual accounts on a going concern basis;

e) the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) 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.

Corporate governance

Pursuant to clause 49 of the Listing Agreements, a separate section on corporate governance and a certificate obtained from the auditors of the Company regarding compliance with the conditions of corporate governance is forming a part of this annual report, which includes:

(i) all elements of remuneration package such as salary, benefits, bonus, stock options, pension, etc. of all the directors;

(ii) details of fixed component and performance linked incentives along with performance criteria;

(iii) service contracts, notice period, severance fees;

(iv) stock option details, if any, and whether the same has been issued at a discount as well as period over which accrued and over which exercisable.

Material changes and commitments

Your directors confirm that there are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company and the date of this report.

Contracts or arrangements with related parties

The particulars of related party transactions are stated in the note no. 1.9 in financial statements, annexures 2, 3 and 5 (iv) of this report.

All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business of the Company. There are no materially significant related party transactions made by the Company with its Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large

All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained on a quarterly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee for their approval on a quarterly basis. The statement is supported by a Certificate from the Chief Financial Officer.

The Company has developed a Related Party Transactions Manual, Standard Operating Procedures for the purpose of identifying and monitoring such transactions.

The Related Party Transactions Policy of the Company approved by the Board of Directors of the Company (the "Board") is displayed on website of the Company www.finolexwater.com at link at http://www.finolexwater.com/policies-code-of-conduct/.

Risk management

During the year, your directors have constituted a Risk Management Committee. The details of Committee and its terms of reference are set out in the Corporate Governance Report forming a part of the Board's Report.

The Company has a robust risk management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business segments. Risk management forms an integral part of the business planning and forecasting. The key business risks identified by the Company and its mitigation plans are included in management discussion and analysis report.

Internal financial control

Pursuant to Rule 8 (5) (viii) of the Companies (Accounts) Rules, 2014, the details in respect of adequacy of internal financial controls with reference to the financial statement are given below:

The Company has an internal control system which includes internal financial controls, the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of business, including adherence to the Company's policies, the safeguarding of the assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and timely preparation of reliable financial information, commensurate with the size, scale and complexity of its operations.

The scope and authority of the internal auditor have be defined by the audit committee from time to time. To maintain its objectivity and independence,the internal auditor reports its observations to the audit committee of the Board. The internal auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems,accounting procedures and policies at all locations of the Company. Based on the report of the internal auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Audit observations and corrective actions thereon are presented to the audit committee of the Board.

Directors and key managerial persons:

Pursuant to sections 149 (1) and 161 of the Companies Act, 2013 (the "Act") read with Rule 8 (5) of the Companies (Accounts) Rules, 2014 and provisions of the 49 (IIA1) of the Listing Agreements, the following details relating to directors and key managerial persons are reported:

The Board of your Company is duly constituted with proper balance of executive directors, non executive directors and independent directors.

Appointment of woman director

During the financial year 2014-15, that is to say, the year under review, your directors have appointed Mrs. Ritu P. Chhabria as an additional director (Woman director) to hold the office with effect from 21st March, 2015 up to the date of ensuing annual general meeting of the Company. Notice has been received from a member of the Company proposing Mrs. Ritu P. Chhabria as a candidate for the office of director of the Company. She is part of promoters' group and related to Mr. Prakash P. Chhabria, Executive Chairman of the Company. Your directors recommend the appointment of Mrs. Ritu P. Chhabria as a director on the Board of the Company.

Re-appointment of director

Mr. Saurabh S. Dhanorkar, Managing Director, retires by rotation and being eligible, offers himself for the reappointment.

None of the other directors are related inter-se except Mr. Prakash P. Chhabria and Mrs. Ritu P. Chhabria who are related to each other.

Appointment of key managerial person

The Board at the meeting held on 26th July, 2014, on recommendation of nomination and remuneration committee, appointed Mr. Anil V. Whabi, as president finance and chief financial officer with effect from 11th August, 2014. The Board has also designated Mr. Saurabh S. Dhanorkar, Managing Director and Mr. Umesh M. Gosavi, Company Secretary as Key Managerial Personnel.

Independent directors

During the year under review, the members approved the appointments of Mr. Sanjay K. Asher, Mr. Kanaiyalal N. Atmaramani, Mr. Dara N. Damania, Mr. Shrikrishna N. Inamdar, Mr. Prabhakar D. Karandikar and Dr. Sunil U. Pathak as independent directors who are not liable to retire by rotation. Pursuant to section 149(7) of the Act, all independent directors have given declarations for the financial year 2015-16 that they meet the criteria of independence as laid down under section 149 (6) the Act and clause 49 of the Listing Agreement.

Training and familiarisation programme for directors

The Board members are provided with necessary documents/brochures, reports and internal policies to enable them to familiarise themselves with the Company's procedures and practices.

Periodic presentations are made at the Board and Board Committee Meetings, on business and performance updates of the Company, global business environment, business strategy and risks involved.

Detailed presentations on the Company's business segments were made at the separate meetings of the independent directors held during the year.

Quarterly updates on relevant statutory changes and landmark judicial pronouncements encompassing important laws are regularly circulated to the Directors.

Pursuant to clause 49 (II) (B) (7) of the Listing Agreement, the Company has adopted the familiarisation programme for independent directors with an aim to provide to the independent directors insight in their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc.

The details of the familiarisation programme for independent directors are available on the website of the Company www.finolexwater.com at link at http://www.finolexwater.com/policies- code-of-conduct/.

Policy on directors' appointment and remuneration

The Nomination and Remuneration Committee of the Company is governed by a terms of reference. The Company's nomination and remuneration policy includes directors' appointment and remuneration including the criteria for determining qualifications, positive attributes, independence of a director and other details are furnished in Annexure 1.

Annual evaluation by the Board of its own performance and that of its committees and individual directors

The Company has devised a policy for performance evaluation of independent directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the non-executive directors and executive directors.

The nomination and remuneration policy, inter alia, giving details about the policy on directors' appointment and remuneration including the criteria for determining qualifications, positive attributes, independence and other details are included in nomination and remuneration policy attached herewith.

Remuneration of Directors and key managerial personnel

Pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the details of remuneration of directors and key managerial personnel are as furnished in Annexure 2.

Particulars of Employees

Pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the details of employees as required are furnished in Annexure 3.

Auditors and Auditors' report:

Auditors

Pursuant to section 139 of the Companies Act, 2013, M/s. P. G. Bhagwat, Chartered Accountants, Pune was appointed as auditors until the conclusion of the annual general meeting to be held in the year 2017 (subject to ratification of their appointment at every annual general meeting) on such remuneration as shall be fixed by the Board, M/s. P. G. Bhagwat has issued a certificate of eligibility pursuant to section 141 of the Companies Act, 2013. Your directors recommend the ratification of the appointment of M/s. P. G. Bhagwat, Chartered Accountants, Pune from the conclusion of the annual general meeting of the Company to be held in the year 2015 until the conclusion of annual general meeting to be held in the year 2016.

Appointment of cost auditors

The Board at its meeting held on 28th May, 2015 has reappointed M/s. S. R. Bhargave & Co. as cost auditors for carrying out audit of cost accounting records of the Company for the financial year ending 31st March, 2016. Pursuant to the provisions of section 148 of the Companies Act, 2013 and rules made thereunder, the ratification of the members is necessary for the payment of remuneration to cost auditors. Your directors recommend the same.

Secretarial audit report

Pursuant to the provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. SVD & Associates, Company Secretaries in practice, Pune to undertake the secretarial audit of the Company. The secretarial audit report for the financial year 2014-15 is annexed herewith and marked as Annexure 4.

There is no qualification, reservation or adverse remark or disclaimer made (i) by the auditor in his report; and (ii) by the company secretary in practice in his Secretarial Audit Report for the financial year 2014-15.

Disclosures:

Pursuant to section 134(3)(a) to (q) there are certain items are required to report by the Company in Directors' report. Your directors are pleased to furnish the required details as under:

Committees of directors and key managerial persons

The details of the committee of the directors and key managerial persons pursuant to the Listing Agreement and the Companies Act, 2013 are described in the corporate governance report of the annual report.

Audit Committee

The details pertaining to the composition of the Audit Committee required to be given pursuant to section 177 (8) of the Companies Act, 2013 are given in the corporate governance report section of the annual report on page no. 58. There are no instances of the Board not accepting the recommendation of the Audit Committee during the financial year 2014-15.

Number of meetings of the Board

During the year under review, five meetings of the Board of Directors were held. The details of the meetings are provided in the corporate governance report on page no. 59.

Extract of Annual return

Pursuant to section 134(3)(a) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, the extract of annual return in the prescribed format MGT-9 is attached herewith and marked as Annexure 5.

Vigil mechanism / Whistle blower policy

Pursuant to section 177(9) and (10) of the Act and clause 49 of the Listing Agreement, the Company has established a vigil mechanism named Whistle Blower Policy (the "WBP") to report genuine concerns to the Chairman of the Audit Committee. The WBP provides adequate safeguards against victimization of persons who use such mechanism and makes provision for direct access to the Chairman of the Audit Committee in exceptional cases as envisaged under the WBP. The details of the WBP are explained in the corporate governance report and also posted on the website of the Company.

Sexual harassment policy

The Company has in place a policy on prevention of sexual harassment of its employees at the workplace. In line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, an Internal Complaints Committee has been constituted by the Company to redress the complaints received regarding sexual harassment. Your directors state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Insider Trading

In compliance with the provisions of SEBI (Prohibition of Insider Trading) Regulations, 2015 and to preserve the confidentiality and prevent misuse of unpublished price sensitive information, the Company has adopted a Code of Conduct to Regulate, Monitor and Report Trading by Insiders ('Insider Trading Code') and a Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information ('Code of Fair Disclosure').

The Insider Trading Code is intended to prevent misuse of Unpublished Price Sensitive Information by insiders and connected persons and ensure that the Directors and specified persons of the Company and their dependents shall not derive any benefit or assist others to derive any benefit from access to and possession of price sensitive information about the Company which is not in the public domain, that is to say, Insider information.

The Code of Fair Disclosure ensures that the affairs of the Company are managed in a fair, transparent and ethical manner keeping in view the needs and interest of all the stakeholders.

Particulars of loans, guarantees and investments

Pursuant to section 186 of the Companies Act, 2013, the details of loans given, investments made or guarantee given are given in note nos. 13, 14 & 16 to the financial statements for the financial year 2014- 2015 on page nos. 87 & 88 of the annual report.

Pursuant to clause 32 of the Listing Agreement, it is clarified that the Company has no loans/ advances and investments in its own shares.

No loans have been given by the Company to persons in its employment, directors or key managerial personnel.

Significant and material orders passed by the regulators or courts or tribunals

Pursuant to Rule 8 (5) (vii) of the Companies (Accounts) Rules, 2014, it is reported that no significant and material orders have been passed by the regulators or courts or tribunals impacting the going concern status of the Company and the Company's operations in future.

Shares

Employee stock option scheme

The paid-up equity share capital as on 31st March, 2015 was Rs. 1,240.93 lakhs. During the year under review, your directors confirm that no shares are issued under stock option.

Sweat equity shares and equity shares with differential voting rights

Your directors confirm that neither sweat equity shares nor equity shares with differential voting rights have been issued by the Company.

The conservation of energy, technology absorption, foreign exchange earnings and outgo

Your Company is committed to achieve the highest standards of environmental excellence by adopting environmentally sustainable and effective operating systems and processes in its plants. Your Company has put in place internationally acclaimed Environment Management System under ISO 14001 certification at Ratnagiri. Your Company in compliance with all applicable environmental regulations in respect of air, water, noise, hazardous waste, e-waste etc. to mitigate potential environment impact on society.

Your Company's manufacturing plants are well equipped with firefighting & safety equipment. In addition, your Company's PVC resin manufacturing plant at Ratnagiri has put in place a process safety system with well-equipped firefighting facilities. The plant has its own fire tenders which are capable of performing fire and rescue services for all types of emergencies. Fire tenders are sent on fire calls in villages/communities nearby as well as for attending calls in Ratnagiri city and industries around Ratnagiri. To keep firefighting system up-to-date and alert, mock drills and fire drills are performed through-out the year as per "On site Emergency Management Plan" with participation of all key personnel in the factory premises. Demonstration drills are performed in nearby schools and other establishments for the benefit of the public at large. Your Company believes, this is an excellent example of "Service beyond self'.

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo required to be given is annexed herewith and marked as Annexure 6

Business responsibility statement:

Your Company continues its focus on various initiatives on environments, social and governance prospective. As stipulated in clause 55 of the Listing Agreement, the details of business responsibility are given below.

Prevention of Air Pollution

Your Company has installed processes in place to comply with the requirement of National Ambient Air Quality Standards. All 12 parameters including particulate matters, sulfur dioxide and oxides of nitrogen are analyzed as per the standards. All stack emissions are also regularly monitored and the flue gas quality is under control as per specification laid down by respective pollution control boards.

Zero Effluent Discharge

As a part of its endeavor to keep the environment and water bodies, around its plants at Ratnagiri, free from contaminants and pollution, your Company has successfully achieved its goal for zero discharge of its treated effluent outside the plant premises partly by recycling it back in the system and by using the remaining for irrigation of tree plantation within the plant premises. The pipes and fittings manufacturing plant does not generate any effluents and are free from pollution. Ground water quality is monitored regularly by sampling and analysis of bore well water.

Effluent Treatment Plant

The aqueous effluent generated during the PVC manufacturing processes, undergoes various treatments in your Company's world class effluent treatment plants such as equalization, flocculation, floc separation, aeration activated sludge process, clarification, polishing using activated carbon filter etc. The treated effluent is checked every day to ensure that it meets with MPCB specifications.

Effluent Recycle Plant

Part of the treated effluent undergoes further treatment in effluent recycle plant such as biological treatment, phosphate removal, ultra filtration and demineralization process for recycling it in the plant operations.

Tree Plantation

Remaining treated effluent fit for irrigation is used for growing trees planted in the plant premises. Your Company has planted and nurtured close to 50,000 trees of different varieties including fruit bearing trees such as mangoes, chikoo, cashew, coconut etc. within the PVC manufacturing plant and captive power plant premises. Tree Plantation activity is carried out annually during the week- long celebrations of World environment Day commencing on 5th June every year.

Rain water harvesting

Your Company has built two large reservoirs which help in collecting rain water from nearby land. Also these reservoirs are filled by pumping water from a dam on nearby river. This dam has also helped in bringing up the ground water table in the nearby vicinity.

Corporate social responsibility:

Pursuant to section 135 of the Act, the Board has constituted Corporate Social Responsibility Committee (CSR) and also framed the corporate social responsibility policy. The details of CSR Committee are given in corporate governance report section of the annual report on page no. 66.

The corporate social responsibility policy of the Company displayed on website of the Company www.finolexwater.com at link at http://www.finolexwater.com/policies-code-of-conduct/.

As a responsible corporate citizen, your Company actively contributes to the social and economic development of the communities in and around the plants' locations. Your Company in association with Mukul Madhav Foundation ("MMF"), a charitable trust, have partnered in this journey for many years. Your Company has been actively contributing to the social and economic development of the underprivileged in the villages in and around your Company's plants situated at Ratnagiri and Urse in the state of Maharashtra and Masar in the state of Gujarat. Special focus has been placed on education, health care, community development, environment and self-development.

Your Company has incurred expenditure on various CSR activities aggregating to Rs. 383.86 lakhs during the financial year 2014-15. The details of the few of the activities undertaken by your Company in association with MMF are stated below. The detailed report on the CSR activities is attached as Annexure 7.

Some of the activities undertaken by your Company in association with MMF are stated below:

I. Education

Mukul Madhav Vidyalaya - A school with a difference

Working in and around the villages of Ratnagiri, your Company felt a desperate need for rural upliftment through basic and dynamic education hence your Company in association with MMF started upgrading and uplifting existing schools with toilets, water tanks, computers, books and sports equipment. In 2008, your Company leased 10 acres of land to MMF for establishment of a school on the outskirts of Ratnagiri. Mukul Madhav Vidyalaya was established in 2010 to provide education in English as the primary medium of instruction at a nominal cost for the benefit of socially and economically underprivileged children. The school was established with150 students from nursery to I standard and the school now boasts of over 497 students. These students are the first generation (of farmers' and fishermen's children) to study in an English medium school. In order to meet the day-to- day requirements of the school children, MMF has developed the infrastructure of Mukul Madhav Vidyalaya.

The school is equipped with computers, LCD screens and a library, enabling the outside world to enter the school and enrich the lives of both the student's and their teachers. The teachers undergo ongoing training programmes to ensure that their knowledge and skills are up-to-date with constant training in Pune and visiting faculty.

Our CSR activities at Masar, a village in the State of Gujarat, are still in the initial stages. Your Company recently started extending financial assistance and support to two schools, Prathamik School and Girdhar Vidhyalaya. Both these schools are located very close to your Company's plant.

Your Company has provided benches and desks, tables for the teachers, and computers so that the students can learn using internet. In order to encourage the students in pursuing education, your Company has awarded scholarships and prizes to the top performers and deserving students. We are tying up with fellows of Teach for India to start English classes.

Scholarships / Educational assistance

Your Company provides financial assistance to deserving students, for their primary and secondary education as well those wishing to pursue their higher education in the fields of engineering, architecture and doctorate programmes. It donated Rs. 1 lakh to Shri Shahu Shikshan Prasarak Seva Mandal (Mrs. Vijayadevi Yadav International School). It also supported 5 kids pursuing with engineering and donated school uniforms, shoes, notebooks, books to schools at Panchgani. The foundation has setup fellowships for resident doctors at reputed hospitals. Doctors studying for their post-graduation are eligible to avail this fellowship programme. These resident doctors are trained under experienced doctors associated with these hospitals. The trained doctors are entitled to additional financial help, should they need it for setting up their own clinic/practice.

II. Health

Free health checkup camps

Free health checkup camps were organized at twenty four municipal schools in and around Ratnagiri and Pune. In aggregate, 8,124 school children benefit from these medical camps annually.

Finolex Women's Well-Being Clinic at Ratnagiri

Women in and around Ratnagiri had to travel out of the city for undergoing mammography and colposcopy tests. Identifying the need, a mammography machine was set up by your Company at Parkar Hospital in Ratnagiri. Reports are sent to Prashanti Cancer Care Mission online and renowned Oncologist Dr. C.B. Koppiker visits the center once in 3 months. Women in and around Ratnagiri have been benefiting from these tests which are available at a subsidized cost. It is now possible to have access to the best possible diagnosis and expert opinion from Prashanti Cancer Care Mission, Pune.

History was created on 7th June, 2014 at Ratnagiri when the first ever "Therapeutic Mam- moplasty" was carried out by Dr. Koppiker. The patient was diagnosed under diagnostics at "Finolex Women's Well-Being Clinic".

Cardiac Surgeries by Healing Little Hearts team

Healing Little Hearts ("HLH") is a registered charity set up in UK. With the objective to carry out free pediatric heart surgeries in India, the team consists of doctors who specialize in operating on underweight children suffering from congenital heart diseases and in post operative care. Teams of specialized doctors visit Pune, every quarter.

During the current financial year, your Company and MMF has initiated the project and invited HLH team to visit Pune. In the financial year 2014-15, HLH team conducted 68 cardiac surgeries. HLH team carried out cardiac surgeries for the privileged and underprivileged children. All these surgeries took place at Ruby Hall Clinic, Pune.

MMF has also sponsored a lot of patients who underwent Cochlear Implant at Sanwad Speech and Hearing Clinic.

Fund Raiser Event for Make A Wish Foundation

Your Company along with MMF hosted a fund raising program for Make A Wish Foundation ("MAW') at Pune. MAW has been dedicated in granting the most cherished wish of children between the age group of 3 and 18 years, living with life-threatening illnesses. In this event, several corporate and individual donors participated in the auction and donated for this charitable cause. Through this fundraiser, MMF also raised funds for various projects and medical appeals for the treatment of needy patients.

Breast Cancer Awareness Symposium

Your Company along with MMF organized a "Breast Cancer Awareness Symposium," on 24th July, 2014 at Pune in association with Prashanti Cancer Care Mission. The event was a grand success as about 1,000 women participated in this eye opening event where MMF had invited a panel of experts, who spoke about importance of early detection, prevention and education related to breast cancer.

Donations made to Zilla Parishad School, Urse

Your Company in association with MMF set up a computer lab at Zilla Parishad School, Urse, which includes 15 branded computers and set of 15 tables and chairs, air conditioned computer lab for use of the students at the school. Your company also donated cupboard, food plate racks and submersible pumps for water supply for use of students. The new computer lab was inaugurated on 1st September, 2014.

Your Company in association with MMF donated benches, desks and blackboards to Vidya Jyoti School, a slow learner's school based in Pune.

Seminar Conducted by UK Professionals in Pune for Mental Health Professionals

Your Company in association with MMF, organized a 4 (four) day certified program in mental illness treatment at Symbiosis Centre for Distance Learning, Pune. This program was organized in conjunction with UK based charitable organization, Concern for Mental Health and World Psychiatric Association (WPA).

The objective of the program was to spread awareness about their importance of mental health work. Your Company also want to emphasize inclusion of mental health care into primary health care in India and also to educate general practitioner doctors and mental health professionals in becoming more proficient in recognizing and treating psychiatric illnesses.

The program received an overwhelming response and benefitted 95 individuals from various sectors of mental health. The course was delivered by Dr.Ghazala Afzal, Dr.Shirin Pezeshgi, Dr.Cosmos Hallstorm and Dr.Gordana Malavic, who are specialists in the field of psychiatry. Defibrillator Machine Donated to Sassoon Hospital, Pune

Your Company in association with MMF donated a Defibrillator Machine to Sassoon Hospital, Pune. This is a lifesaving machine useful to help revive a patient's heartbeat, in cases of cardiac disorders.

Young Champions Sponsorship

Your Company sponsored two young champions representing Slum Soccer KVA Team India in the Homeless World Cup for an International Football Tournament held in Chile from 19th October, 2014 to 26th October, 2014 which aims to eradicate homelessness.

Cyclothon 2014

Your Company in association with MMF and Bicycle Angels (a non-profit social initiative that donates livelihood bicycles), organized a Cyclothon from Pune to Ratnagiri from 18th November, 2014 to 22nd November, 2014. During this event, medical camps were organised at the destination and cycles were donated enroute to Ratnagiri. Cycles were given to identified and genuine men and women for a livelihood.

Our Marathon

Your Company in association with MMF supported "Prashanti Cancer Care Mission to host its 3rd Annual, "Our Marathon 2014" on 21st December, 2014.

"Our Marathon" was held in the presence of film personalities who came together to extend their support towards the cause of creating awareness of "Breast Cancer" which is one of the most dreaded diseases of modern times.

"Our Marathon" received a tremendous response wherein 7,000 individuals came forward to run and support this cause.

Donations Made to ZP School, Kothrud

Your Company in association with MMF provided four water tanks of 500 liters each, ten grain storage boxes and 10 chairs to Zilla Parishad schools as a part of school up-gradation program on 21st January, 2015.

Donation to Dr.Bandorwala Leprosy Hospital

In order to support the mission of Dr.Bandorwala Leprosy Hospital, your Company in association with MMF extended financial assistance to enable the hospital to purchase Micro Cellular Rubber Foot Wears (special footwear made for leprosy patients), Prostheses (artificial device that replaces a missing body part), Fixed Ankle Break Walder (device that supports ankle movements), and Plaster Zote Shoes (special shoes for artificial limbs).

II Indo-British Advanced Master class in Oncoplastic Breast Surgery and Breast Cancer Symposium, 2015

Your Company in association with MMF provided financial assistance for the "II Indo-British Advanced Master class in Oncoplastic Breast Surgery and Breast Cancer Symposium 2015 (the Symposium").

During the conference, the Indian Faculty (Trainers) for the Oncoplastic mastership program underwent an orientation with the English faculty. This symposium was well appreciated by the professionals who attended the program.

Mammography and Pap smear checkup camp for Women at Mahila Seva Mandal, Pune

To sensitize and create public awareness about breast and cervical cancer, on the eve of International Women's Day, your Company in association with MMF and Prashanti Cancer Care Mission organized a cancer checkup camp for the women of the Mahila Seva Mandal, Karve Road, Pune.

Two main cancer detection tests were carried out for thirty five women under the observation of qualified doctors, a counselor and trained technicians. These checkups were carried out in a mobile van (check-ups "At Your Doorstep") which had all the advanced machinery and equipment.

Education and Medical assistance

Your Company in association with MMF has provided financial assistance and supported 15 patients suffering from various ailments for their expensive medical treatment.

Your Company and MMF helped a project from NGO Asha Kiran, Kolhapur by donating text books, school uniform, school bags, stationery & project material.

III Community development

As a part of our historical practice, we continued to implement drinking water supply schemes in the adjoining areas of Golap,with the help of Gram Panchayats of the respective villages. Your Company, under "Rashtriya Gramin Peyajal Yojana" helped the Gram Panchayats of Kolambe,Bhatye and Phansop villages. Before these schemes were implemented, your Company organized supply water to the villages from a well, by providing pumps, a pipeline and water tanks. While taking care of the water shortage, your Company also extended financial help to the Gram Panchayats for payment of repair charges, electricity bills etc. in respect of the existing water supply schemes.

Gyan Key project

Your company has undertaken first of this kind project to provide selected books library at various schools. Under this project, during the month of June, your Company distribute 150 useful books to 1,000 rural secondary schools across Maharashtra for their libraries. These books are useful to the students in their studies. This project is well appreciated by the schools and also students.

Amity Pune CSR Awards - 2014

Amity Awards Pune - 2014 was awarded to your Company in the Manufacturing Companies Category in recognition to its CSR activities carried out in association with MMF.

Cautionary statement

Statements in the Board's Report and the Management Discussion & Analysis describing the Company's objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company's operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

Acknowledgements

Your directors take this opportunity to place on record their sense of gratitude to the banks, financial institutions, central and state government departments and their local authorities for their guidance and support. Your directors are also grateful to the customers, suppliers and business associates of the Company for their continued co-operation and support. Your directors express their deep appreciation for the commitment, dedication and hard work put in by the employees at all levels. Lastly, your directors are grateful for the confidence and faith shown in them by the members of the Company.

For and on behalf of the Board of Directors

Pune Prakash P. Chhabria 28th May, 2015 Executive Chairman

Mar 31, 2014

To the members,

The directors have pleasure in presenting the thirty-third annual report together with the audited accounts for the year ended 31st March, 2014.

Financial results (Rs in lakhs)

2013-14 2012-13

Profit before depreciation & finance charges 37,052.54 29,602.17

Less:

Finance charges 6,637.17 5,144.89

profit before depreciation and taxation 30,415.37 24,457.28

Deductions for:

i) Depreciation 6,229.18 5,441.64

ii) Provision for taxation 7,171.53 5,401.95

Profit after depreciation and taxation 17,014.66 13,613.69

Add:

Surplus of profit and loss account of earlier year 9,837.14 8,156.10

Appropriations:

(i) General reserve 4,000.00 4,000.00

(ii) Proposed dividend (including prior year adjustments) 8,686.67 6,825.25

(iii) Tax on dividend 1,476.30 1,107.40

Balance carried over to the balance sheet 12,688.83 9,837.14

Operations

The operational performance is summarised below:

Income 2,49,671.13 2,17,819.15

profit before tax 24,186.19 19,015.64

profit after tax 17,014.66 13,613.69

PVC resin

Production - in (MTs) 2,52,236 2,51000

Sale (excluding interdivisional) - in (MTs) 1,24,122 1,16,217

- in Rs lakhs 87,441.07 71,760.36

PVC pipes and fittings

Production - in (MTs) 1,85,134 1,77,037

Sale - in (MTs) 1,76,899 1,74,987

- in Rs lakhs 1,56,326.64 1,37,788.75

Power

Production - in (MW) 2,37,929 2,82,654

Sale (excluding interdivisional) - in (MW) 41,027 1,19,344

- in Rs lakhs 1,535.38 4,933.04

Dividend

Your directors have recommended dividend on equity shares @ 70% (Rs 7.00 per equity share) for the financial year ended 31st March, 2014. The proposed dividend (including corporate dividend tax) will absorb Rs 10,162.97 lakhs.

Corporate governance

Pursuant to clause 49 of the listing agreements entered into with the stock exchanges, a separate section on corporate governance and a certifcate obtained from the auditors of the Company regarding compliance with the conditions of corporate governance are forming part of this annual report.

Employee stock option scheme

During the year under review, your Company has not issued any stock options.

Management discussion and analysis

Pursuant to clause 49 of the listing agreements entered into with stock exchanges, the management discussion and analysis report of the financial condition and results of operations have been reviewed by the audit committee and the same is forming a part of this annual report.

Fixed deposits

Your Company has not accepted any fixed deposits during the year.

Directors'' responsibility statement

Pursuant to section 217(2AA) of the Companies Act, 1956, your directors, on the basis of information and documents made available to them, confrm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) the directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2014 and of the profit of the Company for the year ended on that date;

(iii) the directors have taken proper and suffcient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the directors have prepared the annual accounts on a "going concern" basis.

Energy conservation, technology absorption and foreign exchange earnings and outgo

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo required to be given pursuant to section 217(1)(e) of the Companies Act, 1956 read together with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is annexed hereto and forms part of this report.

Directors:

Appointment and retirement of directors

Pursuant to the provisions of sections 149, 150, 152 and any other applicable provisions of the Companies Act, 2013 and Rules made thereunder read with schedule IV to the Companies Act, 2013, 6 (six) non-executive independent directors of the Company, namely Mr. Sanjay K. Asher, Mr. Kanaiyalal N. Atmaramani, Mr. Dara N. Damania, Mr. Shrikrishna N. Inamdar, Mr. Prabhakar D. Karandikar and Dr. Sunil U. Pathak are proposed to be appointed as independent directors to hold offce for 5 (five) consecutive years with effect from the date of thirty third annual general meeting of the Company.

The Company has received declarations in writing from all the above directors that they meet the criteria of independence as provided in sub-section (6) of section 149 of the Companies Act, 2013 and under clause 49 of the listing agreement.

Mr. Sanjay S. Math, Director (Operations), retires by rotation and being eligible, offers himself for the reappointment.

Mr. Panyam Subramaniam resigned as Assistant Managing Director of the Company effective from the close of business hours of 4th June, 2013.

Auditors

M/s.P.G.Bhagwat, Chartered Accountants, Pune, retire as auditors of your Company at the conclusion of the thirty-third annual general meeting and are eligible for reappointment in terms of section 139 of the Companies Act, 2013.

Appointment of cost auditors

The Board of Directors at its meeting held on 12th May, 2014 has reappointed M/s. S. R. Bhargave & Co. as cost auditors for carrying out audit of cost accounting records in respect of electricity and organic and inorganic chemicals falling under chapter 39 of the Central Excise Tariff Act, 1985 (PVC resin and PVC pipes & fittings) for the financial year ending 31st March, 2015.

Particulars of employees

Information as per section 217 (2A) of the Companies Act, 1956 (the "Act") read with the rules framed thereunder forms a part of this report. However, as per the advice received by the Company, pursuant to the provisions of section 219(1)(b)(iv) of the Act, the report and accounts are being sent to the shareholders of the Company excluding the statement of particulars of employees under section 217(2A) of the Act. Any shareholder interested in obtaining a copy of the statement may write to the Company Secretary at the registered offce of the Company.

Corporate social responsibility (CSR)

As a responsible corporate citizen, your Company actively contributes to the social and economic development of the communities in and around the plants'' locations. Your Company and Mukul Madhav Foundation (MMF), a charitable trust have partnered in this journey. For many years, we have been actively contributing to the social and economic development of the underprivileged in the villages, in and around your Company''s plants, situated at Ratnagiri in the state of Maharashtra and Masar in the state of Gujarat. Special focus has been placed on education, health care, community development, environment and self-development. Some of the activities undertaken by your Company and MMF are as follows:-

1. Education

Mukul Madhav Vidyalaya Â A school with a difference

Working in and around the villages of Ratnagiri, your Company saw a desperate need for rural up-liftment in education. In 2008, your Company gave on lease 10 acres of land to MMF for the establishment of a school on the outskirts of Ratnagiri. Mukul Madhav Vidyalaya was established in 2010 to provide English education at a nominal cost with a preference to socially and economically underprivileged children. It began in 2010 with 150 students, the school now boasts over 480 students. These students are the frst generation of farmers'' and fshermen''s children to get an English education. In order to meet the day- to-day requirements of the school children, MMF has developed the infrastructure of Mukul Madhav Vidyalaya.

The school is equipped with computers, LCD screens and a selection of books in the library, enabling the outside world to enter the school. The teachers undergo regular training programmes, to ensure that their skills are up to date.

Our CSR activities at Masar, a village in the State of Gujarat, are still in the initial stages. We recently started extending financial assistance and support to two schools, Prathamik School and Girdhar Vidhyalaya. Both these schools are located very close to your Company''s plant.

Your Company has provided benches and desks, teacher''s tables, and computers so that the students can engage in online activities. In order to encourage the students in their education, your Company has awarded prizes to the toppers in the academic results.

Scholarships / Educational assistance

MMF provides financial assistance to deserving students, so that they can pursue higher education in the felds of engineering, architecture and doctorate programmes. The foundation has set up fellowships for resident doctors at reputed hospitals. Doctors studying for their post graduation are eligible to avail of this fellowship programme. These resident doctors are trained under experienced doctors based in these hospitals. The trained doctors are entitled to additional financial help, should they need it.

2. Health care

Work with hospitals

MMF is associated with a number of hospitals primarily in Maharashtra and reaching out slowly to other parts of India, MMF depends upon referrals from social workers.The social workers verify each case to ascertain fund requirements and follow up to see that the patient receives the necessary care and suffcient assistance even after the discharge.

Association with reputed hospitals

MMF has been associated with reputed hospitals since the turn of the century. MMF is engaged in this activity with the sole objective of modernizing and improving the quality of medical treatment provided to children and women. In the year 2000, MMF set up a Neo- Natal Intensive Care Unit. In 2001, a Neo-Natal Ward was established at KEM, a reputed Hospital in Pune. During the same year, the foundation also opened a Paediatric Intensive Care Unit, a Children''s Ward and an OPD, all at KEM hospital.

In 2012, MMF donated a wing "SONALI". The little stars rooms consists of 6 beds and life saving equipment in the NICU ward at KEM. The purpose of this wing is to allow the underprivileged to avail quality medical care at a concessional cost.

In order to create public awareness about a healthy lifestyle, MMF has sponsored an event called Bhag Pune Bhag Â a Marathon which was held in October 2013, which was organized by Prashanti Cancer Care Mission.

Free medical camps for children

Since 2008, MMF has been conducting free bi-annual medical health camps in Government schools in and around Ratnagiri. At each camp, dentists, ophthalmic and general physicians screen around three thousand students. Doctors and specialists from prominent hospitals viz. KEM Hospital, Pune, Bharati Vidyapeeth school of Audiology, Bharati Vidyapeeth Dental College and H.V.Desai Eye Hospital are participating in these camps. Medical cards are maintained to monitor the students progress. MMF provides additional medical treatment to those students who require it.

As usual, during December, 2013, your Company and MMF conducted health check up camps for school children and women in villages situated near your Company''s plant at Ratnagiri. Taking this a step forward, during the month of February, 2014, MMF organised similar health-camps for children in the slum areas of Pune and the municipal schools of Panchgani.

Free cancer detection camps for women & set-up of women''s well-being clinic

To sensitize and create public awareness about breast and cervical cancer, MMF in association with a reputed Pune based NGO,"Prashanti Cancer Care Mission" organized a unique program called ''Cancer Diagnosis at Your Doorstep''. This camp was conducted in December 2013 for rural women from and around Ratnagiri and in March 2014 for women living in the slum areas of Pune.

Two Cancer detection tests were carried out under the observation of qualifed doctors, a counselor and trained technicians. A mobile van which was equipped with all the required machinery was used to conduct this initiative.

To take that additional step forward in the direction of providing quality health care services to underprivileged women, on 8th March, 2014, International Women''s Day, ''The Finolex Women''s Well Being Clinic'' was inaugurated at Ratnagiri. The services which will be provided at this well-being clinic are mammography and colposcopy tests.Your Company extended financial assistance to MMF to buy and donate a mammography machine and a

colposcope machine to the clinic. While taking care of the requirements of the clinic, MMF also extended help to other hospitals. Your Company provided financial assistance to MMF to buy a C Arm machine and donate the same to a reputed hospital at Delhi.

Ruby Hall Clinic, Pune & Healing Little Hearts, UK

MMF''s most recent venture is in collaboration with Healing Little Hearts (HLH), a registered charity in Leicester, UK and Grant Medical Foundation''s Ruby Hall Clinic, Pune. Together, MMF brings in specialist medical teams from the UK to Pune to stand-in, guide and train the in-house doctors at Ruby Hall Clinic, during complex heart procedures. This team is made up of paediatricians, nurses and intensivists from the University Hospitals of Leicester, Alder Hey Children''s Hospital, Liverpool Children''s Hospital and other institutions. Doctors who wish to participate in this programme were requested to register with HLH.

Currently, children in India with heart problems either do not get the surgical treatment required, or the doctors do not have the expertise to either operate on them (as in the case of underweight babies) or to care for them following the surgery. This results in extremely high mortality rates. The vision for this project is to help alleviate this scenario in India.

Members of Healing Little Hearts give their time to come to India in support of this worthy cause without any financial remuneration. These surgeons specialize in operating on new- born babies suffering with heart diseases.

Health care facilities at Masar

Your Company has taken further steps in CSR and has ventured into Masar, Gujarat. We have constructed a toilet block for female students at Girdhar Vidhayalaya, Masar.

Community development

In order to take a small step to solve the drinking water problem faced by villagers, your Company continued to implement drinking water supply schemes in the adjoining areas of Golap, with the help of Gram Panchayats of the respective villages. Your Company, under "Rashtriya Gramin Peyajal Yojana" helped the Gram Panchayats of Kolambe, Bhatye and Phansop villages. Until these schemes were implemented, your Company organized a water supply to the villages from a well, by providing pumps, a pipeline and water tanks. While taking care of the water shortage, your Company also extended financial help to the Gram Panchayats for payment of repair charges, electricity bills etc. in respect of the existing water supply schemes.

Further more, as a part of its CSR activities, your Company has undertaken a project to make potable water available to the villagers. Accordingly, a Water Filteration Unit has been installed on one of the wells at Bhatye village which has been a great help to the villagers.

And fnally, at Masar in Gujarat State, your Company offered financial assistance to the village Grampanchayat Committee to celebrate Navratri in a grand fashion.

4. Environment & safety initiatives

Your Company is committed to achieve the highest standards of environmental excellence by adopting environmentally sustainable and effective operating systems and processes in its plants. At Ratnagiri, your Company has put in place the internationally acclaimed Environment Management System under ISO14001. Your Company fully complies with all applicable environmental regulations in respect of air, water, noise, hazardous waste, e-waste etc. to mitigate the potential environmental impact on the society. The Executive Committee of "Frost & Sullivan''s Green Manufacturing Excellence Awards 2014" has awarded a "Certifcate of Merit - Believers Category"to our Golap, Ratnagiri plant.

Your Company''s manufacturing plants are well equipped with the latest fre safety equipment. In addition, your Company''s PVC manufacturing plant at Ratnagiri has a put in place a fully pledged and well equipped fre safety dept. The plant has its own fre fghters who are capable of performing fre and rescue services at par with the Ratnagiri Municipal Council''s fre department. Fire fghters are sent on fre calls in villages/communities nearby as well Ratnagiri city and industries around Ratnagiri. To keep the fre fghters up-to-date and alert, mock drills and fre drills are performed through-out the year as per the "On site Emergency Management Plan" with the participation of all key personnel at the factory alongwith nearby schools and other establishments, for the benefit of the public at large. Your Company believes this is an excellent example of "Service Beyond Self". Your Company won the Bonze Trophy in the National Safety Council Awards Competition 2013 for the Company''s PVC manufacturing plant situated at Ratnagiri.

Prevention of air pollution

Your Company has installed processes to comply with the requirement of the National Ambient Air Quality Standards. All 12 parameters including particulate matters, sulfur dioxide and oxides of nitrogen are analyzed as per the standards. All stack emissions are also regularly monitored and the fue gas quality is under control as per the Specifications laid down by pollution control board.

Zero effuent discharge

As part of its endeavor to keep the environment and water bodies around its plants at Ratnagiri, free from contaminants and pollution, your Company has successfully achieved its goal for zero discharge. This has been achieved by recycling it back into the system. The remainder has been used for irrigation purposes. Trees and plants within the premises have benefitted from this process. The ground water quality is regularly monitored by sampling and analyzing the bore well water.

Effuent treatment plant

The aqueous effuent generated during the process of manufacturing PVC undergoes various treatments in your Company''s world class effuent treatment plants. These treatments include, equalization, focculation, foc separation, aeration activated sludge process, clarifcation, polishing using activated carbon flter etc. The treated effuent is checked every day to ensure that it meets with MPCB Specifications.

Effuent recycle plant

Part of the treated effuent undergoes further treatment in an effuent recycle plant. The treatments include, biological treatment, phosphate removal, ultra fltration and demineralization process for recycling it in the plant operations.

Tree plantation

The remaining treated effuent fit for irrigation is used for the trees planted on the factory premises. Your Company has planted and nurtured close to 49,000 different kinds of trees including fruit bearing trees such as mangoes, chikoo, cashew, coconut etc. within the PVC manufacturing plant and the captive power plant premises. The tree plantation activity is carried out annually during the week-long celebrations of World Environment Day commencing on 5th of June every year.

Rain water harvesting

Your Company has built two large reservoirs which help to collect rain water from nearby lands. These reservoirs are flled by pumping water from a dam. The dam has also helped in bringing up the ground water table within the vicinity.

5. Cultural and other activities

Your Company extends financial help to the local communities in promoting their cultural, religious, social and spiritual pursuits irrespective of caste, creed, religion to celebrate festivals and felicitations, hold exhibitions, seminars, musical concerts, blood donation camps etc.

Acknowledgements

Your directors take this opportunity to place on record their sense of gratitude to the banks, financial institutions, central and state government departments and their local authorities for their guidance and support. Your directors are also grateful to the customers, suppliers and business associates of the Company for their continued co-operation and support. Your directors express their deep appreciation for the commitment, dedication and hard work put in by the employees at all levels. Lastly, your directors are grateful for the confdence and faith shown in them by the members of the Company.

Pune Prakash P. Chhabria

12th May, 2014 Executive Chairman

Mar 31, 2013

To the members,

The directors have pleasure in presenting the thirty-second annual report together with the audited accounts for the year ended 31st March, 2013.

Financial results

(Rs. in lakhs)

2012-2013 2011-2012

Profit before depreciation & finance charges 29,602.17 24,721.56

Less:

Finance charges 5,144.89 7,496.07

Profit before depreciation and taxation 24,457.28 17,225.49

Deductions for:

i) Depreciation 5,441.64 7,551.28

ii) Provision for taxation 5,401.95 2,159.08

Profit after depreciation and taxation 13,613.69 5,515.14

Add: Surplus of profit and loss account of earlier year 8,156.05 8,192.54 Appropriations:

(i) General reserve 4,000.00 2,000.00

(ii) Contingency reserve 1,215.00 1,215.00

(iii) Proposed dividend (including prior year adjustments) 6,825.25 3,732.68

(iv) Tax on dividend 1,107.40 603.94

Balance carried over to the balance sheet 9,837.09 8,156.05

Operations

The operational performance is summarised below:

Income 2,17,819.15 2,13,023.52

Profit before tax 19,015.64 9,674.21

Profit after tax 13,613.69 7,515.13

PVC resin

Production - in (MTs) 2,51,000 2,66,982

Sale - in (MTs) 1,16,217 1,61,986

(excluding interdivisional): - in Rs. lakhs 71,760.36 95,945.96

PVC pipes and fttings

Production - in (MTs) 1,77,037 1,49,654

Sale - in (MTs) 1,74,987 1,50,730

- in Rs. lakhs 1,37,788.75 1,08,798.2

Power

Production - in (MW) 2,82,654 2,68,318

Sale (Excluding interdivisional) - in (MW) 1,19,344 1,23,396

- in Rs. lakhs 4,933.04 5,233.38

Dividend

Your directors have recommended dividend on equity shares @ 55% (Rupees Five and paise fifty per equity share) for the financial year ended 31st March, 2013. The proposed dividend (including corporate dividend tax) will absorb Rs.7932.65 lakhs.

Finance

The interest and finance charges for the year were Rs.5144.89 lakhs as against Rs.7496.07 lakhs for the previous year.

Corporate governance

Pursuant to clause 49 of the listing agreements entered into with the stock exchanges by your Company, a separate section on corporate governance and a certificate obtained from the auditors of the Company regarding compliance with the conditions of corporate governance are forming part of this annual report.

Employee stock option scheme

During the year under review, your Company has not issued any stock options.

PVC pipes manufacturing plant in the State of Gujarat

Your Company''s third PVC pipes manufacturing plant is fully established at Masar, Dist.Vadodara, Gujarat and has commenced commercial production effective from 27th March, 2013 with 30,000 tpa as its installed capacity. The commercial production for second phase having installed capacity of 20,000 tpa will commence in the financial year 2013-2014.

PVC pipes & fttings

During the year, your Company has sold 1,74,984 Metric Tons of PVC pipes and fittings.

Management discussion and analysis

Pursuant to clause 49 of the listing agreements entered into with stock exchanges, management discussion and analysis report of financial condition and results of operations has been reviewed by the audit committee and the same is forming a part of this annual report.

Fixed deposits

Your Company has not accepted any fixed deposits during the year.

Directors'' responsibility statement

Pursuant to section 217(2AA) of the Companies Act, 1956, your directors, on the basis of information and documents made available to them, confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) the directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2013 and of the profit of the Company for the year ended on that date;

(iii) the directors have taken proper and suf ficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the directors have prepared the annual accounts on a "going concern" basis.

Energy conservation, technology absorption and foreign exchange earnings and outgo

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo required to be given pursuant to section 217(1)(e) of the Companies Act, 1956 read together with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is annexed hereto and forms part of this report.

Retirement of directors

Mr.Kanaiyalal N.Atmaramani and Dr.Sunil U. Pathak, Independent Directors, and Mr.Saurabh S.Dhanorkar, a wholetime director retire by rotation at the ensuing annual general meeting of the Company, being eligible, offer themselves for reappointment.

Auditors

M/s.P.G.Bhagwat, Chartered Accountants, retire as auditors of your Company at the conclusion of the thirty-second annual general meeting and are eligible for reappointment.

Appointment of cost auditors

The Board of directors at its meeting held on 19th January, 2013 has reappointed M/s.Bhargave & Co. as cost auditors for carrying out audit of cost accounting records in respect of electricity and organic and inorganic chemicals falling under chapter 39 of the Central Excise Tariff Act, 1985 (PVC resin and PVC pipes & fittings) for the financial year commencing from 1st April, 2013 to 31st March, 2014.

Particulars of employees

Information as per section 217 (2A) of the Companies Act, 1956 (the "Act") read with the rules framed thereunder forms a part of this report. However, as per the advice received by the Company, pursuant to the provisions of section 219(1)(b)(iv) of the Act, the report and accounts are being sent to the shareholders of the Company excluding the statement of particulars of employees under section 217(2A) of the Act. Any shareholder interested in obtaining a copy of the statement may write to the company secretary at the registered office of the Company.

Corporate social responsibility

As a responsible corporate citizen, your Company endeavours to improve the quality of life of people living in villages in and around its plants, with special emphasis on education, skill development, environment, health, community development, social welfare and promotion of cultural activities.

1. Education

Mukul Madhav Vidyalaya (MMV), a recognized English medium primary school, is a successful project of your Company in association with Mukul Madhav Foundation. It was set up on a sprawling 10 acres campus at Golap village on the Ratnagiri- Pawas road. MMV has fulfilled a long-standing need to have an English medium school in the close vicinity of the cluster of villages and hamlets near our PVC resin manufacturing plant in Ratnagiri.

The school buildings consist of 28 classrooms along with various facilities like a library, computer room etc. The school opened in the academic year 2010-2011 with 155 students enrolled in its pre-primary section. The school has approximately 450 children from pre- primary to 4th standard, enrolled for the academic year 2013 Â 2014.

Besides academics, MMV encourages the students to participate in interschool competitions amongst other activities. Quite a few MMV students have won prizes in their respective categories, indicating overall development of students.

This year MMV conducted a drawing competition titled "Paint your dream" for the school children of Ratnagiri. There was an overwhelming response from children from seven schools of Ratnagiri. The selected paintings will find a place in the 2014 calendar of Mukul Madhav Foundation.

In addition to the above, your Company has extended financial help to various educational organizations in and around Ratnagiri.

2. Skill development

Your Company encourages villagers to participate in the employment generation programs by creating selfhelp groups amongst the villagers. Under this program, your Company has created a self help group of women in the neighbourhood for sewing and tailoring and self help groups of fishermen and fisherwomen for preparation and marketing of processed fish products, coconut products and other home-made food products. More and more villagers including women are participating in the self-employment programs. In addition to the above, your Company has conducted workshops on modern methods of vegetable planting and marketing. A great number of villagers and the members of the women''s self help groups have benefitted from these workshops.

3. Environment

Your Company is committed to achieving the highest standards of environmental excellence by adopting ecologically sustainable and effective operating systems and processes in its plants. Your Company has put in place an internationally acclaimed Environment Management System, under the ISO 14001 certification, at its PVC resin manufacturing plant in Ratnagiri. Your Company complies with all applicable environmental regulations with respect to air, water and hazardous solid waste and e-waste etc. to mitigate potential environmental impact on society. Your Company also makes continual efforts to reduce the consumption of raw materials and energy sources so as to help conserve natural resources.

A. Prevention of air pollution

Your Company has processes in place to comply with the requirement of the National Ambient Air Quality Standards (NAAQs) for particulate matter, sulphur dioxide (SOx) and oxides of nitrogen (NOx) emission. Particulate matter emission is kept under control by installing bag filters in air dryers and on the PVC storage silo vents as well as by installing electrostatic precipitators in the power plant. Use of fuels containing How amounts of sulphur also helps control SOx and NOx. Ambient air monitoring is done on a weekly basis for all 12 parameters as per NAAQs standards.

B. Zero effuent discharge

As part of its endeavour to keep the environment and water bodies around your plants at Ratnagiri free from contaminants and pollution, your Company has successfully achieved its goal for zero discharge of its treated effluent outside the factory premises by recycling part of it back into the process and by using the remaining quantity for irrigation of tree plantation within the company premises.

C. Tree plantation

Your Company has planted and nurtured close to 49,000 trees of different varieties such as mango, chikoo, cashew, coconut etc. within the Company premises.

A unique tree plantation drive has been taken up by your company in Ratnagiri in collaboration with renowned NGOs, social forestry department of Government of Maharashtra, schools and coconut research centre for the past four years and has completed distribution of 1,00,000 saplings by now.

This year 25,000 saplings were given to school children to be planted, in the compound of housing societies or near their homes, and nurtured throughout the year. About 30 schools, 4 colleges and 10 NGOs had undertaken the activity. The plantation and nurturing of trees will be supervised by volunteers from the schools and colleges to ensure that the saplings survive and grow. The program is closely monitored and implemented every year. It is heartening to note that the students to whom saplings were given last year have taken good care of them and have achieved more than 60% survival rate.

4. Health care

Biannually, Mukul Madhav Foundation conducts health check-up camps for school children and villagers in the vicinity of Ratnagiri.

This year health check-up camps were conducted at various remotely located schools for children as well as the villagers. The camps have benefitted over 3,000 children and about 350 villagers. As a follow up activity, free of cost treatment including eye/ear operations was arranged with all expenses paid by Mukul Madhav Foundation.

Employees'' health is always the top-most priority amongst welfare activities for them. In addition to periodical medical check-up, all employees from plants at Ratnagiri have undergone a unique workshop on life style and stress management designed by the Company''s medical officer. This workshop has made a positive effect on their daily routine.

5. Community development & social welfare

Implementation of drinking water supply schemes in adjoining areas of the plant with the help of local bodies of the respective villages has been your Company''s priority. Your Company, under the Rashtriya Gramin Peyajal Yojana (National rural drinking water scheme) helped the local bodies of adjoining villages by providing pumps, pipes and water tanks.

While taking care of the water shortage, your Company also extended financial help to the local bodies for payment of electricity bills, repairs etc. with respect to the existing water supply schemes.

6. Cultural & social activities

Your Company also takes great pride in assisting in the promotion of cultural, religious, social and spiritual pursuits of the local population like celebrating festivals and felicitations, holding exhibitions, seminars, musical concerts, blood donation camps etc. Your company renders necessary help in promotion of sports activities in the neighbourhood community.

7. Safety initiatives

Your Company has a very well laid out safety policy. The policy demonstrates the commitment of the organisation towards the well being of employees and other stakeholders. Compliance with all statutory requirements is sine quo non of the policy. A team of well-trained executives including safety, welfare and medical officers has implemented the policy. Periodical monitoring of implementation of policy is done through audits conducted by trained internal auditors and external auditing agencies like National Safety Council. Confirmation of all the efforts towards safety is indicated through completion of 22.45 million man-hours without any reportable accident at its PVC resin manufacturing plant at Ratnagiri.

The Company''s PVC manufacturing plant at Ratnagiri has put in place a full- fledged and well-equipped fire safety dept. The plant has two of its own fire tenders that are capable of performing fire and rescue services at par with the comparable petrochemical industries in the country. To keep fire fighters up-to-date and alert, mock drills and fire drills are performed throughout the year on the factory premises.

As and when requested by the municipal council of Ratnagiri and the local bodies of adjoining villages, the fire tenders are sent on fire calls to villages nearby, as well as to Ratnagiri city and industries around Ratnagiri. Fire fighting demonstrations in nearby schools and other establishments for the benefit of the public at large are conducted periodically to educate people on fire hazards.

Acknowledgements

Your directors take this opportunity to place on record their sense of gratitude to the banks, financial institutions, Central and State Government departments, their local authorities for their guidance and support. Your directors are also grateful to the customers, suppliers and business associates of the Company for their continued co-operation and support. Your directors express their deep appreciation for the commitment, dedication and hard work put in by the employees at all levels. Lastly, your directors are grateful for the confidence and faith shown in them by the members of the Company.

For and on behalf of the Board of Directors

Pune Prakash P. Chhabria

4th May, 2013 Executive Chairman

Mar 31, 2012

The directors have pleasure in presenting the thirty-first annual report together with the audited accounts for the year ended 31st March, 2012.

Financial Results (Rs. in lakhs)

2011-2012 2010-2011

Profit before depreciation & finance charges 24721.56 24904.45 Less:

Finance charges 7496.07 5966.28

Profit before depreciation and taxation 17225.49 18938.17 Deductions for:

i) Depreciation 7551.28 7442.91

ii) Provision for taxation 2159.08 3878.16

Profit after depreciation and taxation 7515.13 7617.10 Add:

Surplus of profit and Loss Account of earlier year 8192.54 8429.44 Appropriations:

(i) General reserve 2000.00 2000.00

(ii) Debenture redemption reserve --- 1500.00

(iii) Contingency Reserve 1215.00 ---

(iv) Proposed dividend (including prior year adjustments) 3732.68 3721.00

(v) Tax on dividend 603.94 633.00

Balance carried over to the Balance Sheet 8156.05 8192.54 Operations

The operational performance is summarised below:

Income 213023.52 200708.61

profit before tax 9674.21 11495.26

profit after tax 7515.13 7617.10

PVC Resin

Production - in (MTs) 266982 270124

Sale - in (MTs) 161986 171460

(excluding interdivisional): - Rs. in lakhs 95945.96 94886.54

PVC Pipes and Fittings

Production - in (MTs) 149654 140056

Sale - in (MTs) 150730 138322

- Rs. in lakhs 108798.20 91410.44 Power

Production - in (MW) 268318 258182

Sale - in (MW) 123396 244614

(excluding interdivisional) - Rs. in lakhs 5233.36 11475.64

Dividend

Your directors have recommended dividend on equity shares @ 30% (Rupees 3.00 per equity share) for the financial year ended 31st March, 2012. The proposed dividend (including corporate dividend tax) will absorb Rs.4326.80 lakhs.

Finance

The interest and finance charges for the year were Rs.7496.07 lakhs as against Rs.5966.28 lakhs for the previous year.

Corporate Governance

Pursuant to clause 49 of the listing agreements entered into with the stock exchanges, a separate section on corporate governance and a certificate obtained from the auditors of the Company regarding compliance with the conditions of corporate governance are forming part of this annual report.

Employee Stock Option Scheme

During the year under review, your Company has not issued any stock options.

Establishment of PVC Pipes and Fittings manufacturing plant in the State of Gujarat

Construction of your Company's PVC Pipes and Fittings manufacturing plant with 50,000 M.T. per annum capacity is in progress as scheduled and the plant is expected to be commissioned during the current financial year 2012-2013.

State Level Award for Excellence in Energy Conservation and Management

Maharashtra Energy Development Agency, a Government of Maharashtra institute has conferred on PVC manufacturing plant, Ratnagiri the "State level Award for Excellence in energy conservation and management in the petro-chemical sector for the year 2008-2009". The award was declared and distributed in March, 2012.

PVC Pipes & Fittings

During the year, your Company has sold 150730 Metric Tons of Pipes and Fittings.

Management Discussion and Analysis

Pursuant to clause 49 of the listing agreements entered into with stock exchanges, Management Discussion and Analysis report of financial condition and results of operations has been reviewed by the Audit Committee and the same is forming part of this Annual Report.

Fixed Deposits

Your Company has not accepted any fixed deposits during the year.

Directors' Responsibility Statement

Pursuant to section 217(2AA) of the Companies Act, 1956, your directors, on the basis of information and documents made available to them, confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) the directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2012 and of the profit of the Company for the year ended on that date;

(iii) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the directors have prepared the annual accounts on a "going concern" basis.

Energy Conservation, Technology Absorption and Foreign Exchange earnings and outgo

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo required to be given pursuant to section 217(1)(e) of the Companies Act, 1956 read together with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is annexed hereto and forms part of this report.

Directors:

i. Retirement of Mr. P. P. Chhabria, Chairman and Mr. K. P. Chhabria, Executive Vice Chairman

Mr. P. P. Chhabria, Chairman and Mr. K. P. Chhabria, Executive Vice Chairman have expressed their intention to retire and demit respective offices as Non-Executive Chairman & Director and Executive Vice Chairman & Director of the Company effective from the close of business hours of 11th August, 2012.

The Board at its meeting held on 20th June, 2012 has reluctantly acceded to the requests received from Mr. P. P. Chhabria and Mr. K. P. Chhabria. The Board placed on record its sincere appreciation for Mr. P. P. Chhabria's and Mr. K. P. Chhabria's exemplary vision and their hard work from setting up the first PVC pipe extruder in 1971 to taking the Company to a multi-locational plastics processing and a leading petrochemical company and noted that they have received many accolades for their contribution to the industry, the latest one being the Life Time Achievement Award conferred upon them by the Chemicals and Petrochemicals Association of India for their outstanding contribution to the Plastics Industry.

ii. Designating Mr. K. P. Chhabria as Chairman Emeritus

In recognition of the untiring, unrelenting and invaluable services rendered by Mr. K. P. Chhabria during his long association spanning for more than three decades with the Company, your Board at its meeting held on 20th June, 2012 has designated him as the "Chairman Emeritus" of your Company effective from the close of business hours of 11th August, 2012.

iii. Appointment of Mr. Prakash P. Chhabria as Executive Chairman of the Company

Consequent upon the retirement of Mr. P. P. Chhabria as Non-Executive Chairman and director and Mr. K. P. Chhabria as Executive Vice Chairman and director, the Board at its meeting held on 20th June, 2012 has appointed Mr. Prakash P. Chhabria as Wholetime Director designated as Executive Chairman of the Company for the period from the close of business hours of 11th August, 2012 to 30th November, 2016.

Earlier, the Board at its meeting held on 21st October, 2011 had reappointed Mr. Prakash P. Chhabria as Managing Director of the Company for a period of five years viz. 1st December, 2011 to 30th November, 2016.

The resolutions for his reappointment as Managing Director, for payment of revised remuneration and for appointment as Whole-time Director designated as Executive Chairman of the Company are being placed before the members of the Company for their approval at the Annual General Meeting.

iv. Appointment of Mr. S. S. Dhanorkar as Managing Director

Pursuant to the elevation of Mr. Prakash P. Chhabria as Executive Chairman of the Company with effect from the close of business hours of 11th August, 2012 the Board at its meeting held on 20th June, 2012 has appointed Mr. S. S. Dhanorkar as Managing Director of the Company effective from the close of business hours of 11th August, 2012 to 30th November, 2016.

Earlier, the Board at its meeting held on 21st October, 2011 had reappointed Mr. S. S. Dhanorkar as Wholetime director designated as Asst. Managing Director and Chief Operating Officer of the Company for a further of period of five years from 1st December, 2011 to 30th November, 2016.

The resolutions for his reappointment as Wholetime Director designated as Asst. Managing Director, for payment of revised remuneration and for appointment as Managing Director are being placed before the members of the Company for their approval at the Annual General Meeting.

v. Appointment and co-option of directors

The Board of Directors has co-opted Mr. D. N. Damania as additional director effective 29th July, 2011, and Mr. Sanjay Asher and Mr. S. S. Math as additional directors effective 4th February, 2012. They hold their offices up to the date of the ensuing annual general meeting of the Company. Notices have been received from some members of the Company proposing Mr. D. N. Damania, Mr. Sanjay Asher and Mr. S. S. Math as candidates for the offices of Directors of the Company. The Board recommends their appointments.

vi. Appointment of Mr. S. S. Math as Wholetime Director designated as Director (Operations)

The Board of Directors has co-opted Mr. S. S. Math as an additional director effective 4th February, 2012 and has further appointed him as wholetime director designated as

Director (Operations) for a period of five years effective 4th February, 2012, subject to the approval of the members of the Company. Further, in terms of the applicable provisions of the Factories Act, 1948, the Board has appointed Mr. S. S. Math as Occupier of the Company's plants situate at Ranpar-Golap, District Ratnagiri.

The resolution for his appointment as Wholetime Director designated as Director (Operations) including payment of remuneration is being placed before the members of the Company for their approval at the Annual General Meeting.

The Board recommends his appointment as a wholetime director and payment of remuneration to him.

vii. Retirement of directors

Dr. Sunil U. Pathak, Mr. P. D. Karandikar and Mr. S. N. Inamdar retire by rotation at the Annual General Meeting of the Company and being eligible, offer themselves for reappointment.

viii. Resignation of Dr.Vijay Bhatkar

Dr. Vijay Bhatkar, an independent non-executive director has resigned effective 3rd June, 2011. Your directors place on record their sincere appreciation for the services rendered by Dr. Vijay Bhatkar during his tenure as a Director of the Company.

Auditors

M/s. B. K. Khare & Co., Chartered Accountants, Auditors of the Company will retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have expressed their unwillingness to be re-appointed as Auditors after the conclusion of this Annual General meeting. The Board has recommended M/s. P. G. Bhagwat, Chartered Accountants, Pune, to be appointed as Auditors from the conclusion of this Annual General Meeting until the conclusion of next Annual General Meeting. M/s. P. G. Bhagwat have furnished a certificate to the effect that the proposed appointment, if made, will be in accordance with sub-section (1B) of Section 224 of the Companies Act, 1956.

Appointment of Cost Auditors

The Board of Directors at its meeting held on 4th February, 2012 has reappointed M/s.Bhargave & Co. as Cost Auditors for carrying out audit of cost accounting records in respect of electricity and Organic and Inorganic Chemicals falling under chapter 39 of the Central Excise Tariff Act, 1985 (PVC Resin and PVC Pipes & Fittings) for the financial year commencing from 1st April, 2012 to 31st March, 2013.

Particulars of Employees

Information as per section 217 (2A) of the Companies Act, 1956 (the "Act") read with the rules framed thereunder forms a part of this report. However, as per the advice received by the Company, pursuant to the provisions of section 219(1)(b)(iv) of the Act, the report and accounts are being sent to the shareholders of the Company excluding the statement of particulars of employees under section 217(2A) of the Act. Any shareholder interested in obtaining a copy of the statement may write to the Company Secretary at the registered office of the Company.

Corporate Social Responsibility

As a responsible corporate citizen, your Company, partnering with Government and NGOs endeavours to improve quality of life of the people living in the villages in and around our plants in Taluka Ratnagiri with special emphassis on education, health, environment and self-employment. Your Company also contributes its bit in cultural and sports activities of the city of Ratnagiri.

1. Community Development

"Nale Wathar Drinking Water Scheme" at Pawas village (5 KMs from our PVC manufacturing plant) has been completed. It is an unique scheme where certain amount was collected by the villagers and an equal amount was contributed by your Company. An association of villagers has been formed to operate and maintain the scheme. Around 450 villagers are Benefited by the scheme.

2. Social Welfare

Your Company encourages villagers to participate in the Company's employment generation programmes by creating Self Help Groups amongst the villagers. Under this programme, your Company has created a Self Help Group of women in Mohallas for stitching and tailoring and other Self Help Group of Fishermen for preparation of processed fsh products and marketing of the same. Your Company conducts stitching / tailoring classes for women, training programmes on preparation of processed fsh products and marketing of the same with the help of Fisheries College, Shirgaon. More and more villagers including ladies are participating in the self-employment programme. In addition to the above, your Company has conducted workshops on modern methods of vegetable planting and marketing, also of coconut products and their marketing with the assistance of Gramjivan Adhar Sanstha. Good number of villagers and the members of Bachat groups have benefitted from these workshops.

Your Company also takes pride in assisting the Ratnagirians in promoting their cultural, religious, social and spiritual pursuits by rendering necessary help in monetary and other terms irrespective of caste, creed, religion for celebrating felicitations and festivals, holding exhibitions, seminars, musical concerts etc.

In addition to the usual arrangement for lectures on health, hygiene, nutrition by your Company's Medical Officer, the distribution of foot-wear to the needy students was arranged by your Company through Mukul Madhav Foundation.

3. Education/environment

Mukul Madhav Vidyalaya, an English medium primary school established by Mukul Madhav Foundation under aegis of your Company in Golap, Tal. Ratnagiri has proved to be boon to the societal need of the villages near our PVC manufacturing plant at Ranpar-Golap. The Foundation charges nominal fees and most of the students are from lower income strata of the society.

Your Company sponsored deserving and needy students' expenses for entire year for diploma course in basic rural technology, specially designed for giving hands on training and experience to the students on various technical and other skills required in the rural set-up. Your Company sponsored workshops and training programmes conducted by various schools/NGOs for different disciplines to increase awareness, knowledge, competitiveness etc.

Your Company is environment friendly. In addition to various initiations and implementations for conservation of environment at its production facilities, your Company does quite a bit for the environment especially in and around its surroundings.

A unique tree plantation drive has been taken up by your Company in collaboration with a renowned NGO and Social Forestry Department, schools and coconut research centre, Ratnagiri. Every year, 15000 Ã 20000 saplings are being given to the school children for planting them in the compound or near everybody's house and to nurture it through out the year. The tree plantation and nurturing of trees will be supervised to ensure that the saplings survive and grow. The programme will be closely monitored and implemented every year.

4. Health care

Every year, your Company and Mukul Madhav Foundation conducts health check camps for schools in the vicinity of Ratnagiri. This year, health-check up camps were conducted in the remotely located schools viz. Purnagad, Gaokhedi, Nakhare and Anasure for more than 3000 students and for more than 500 adults. As a follow-up activity, free-of-cost treatment including eye/ear operations wherever required were arranged with all expenses paid by Mukul Madhav Foundation.

Health check-up camps for 800 adults from remotely located villages were arranged with the assistance of Ayurvedic Shikshan Mandal, Pune.

Auditors' remarks in their Report to members and Management's reply

Auditors of your Company in their Report to members have put certain remarks at Sr. Nos. 3 and 4(ii) (d) & (f) about non-provision for mark to market losses on derivative contracts. The Management's reply to the same is as follows:-

Reply to Auditors' remarks at sr. no. 3, 4(ii)(d)and 4(ii)(f) of the Audit Report

In view of counter claims of the Company against the Banks, the facts and circumstances of the case and uncertainty of period for which the litigations will continue, a reliable estimate of the obligation, if any, cannot be made. It is unlikely that there will be a material liability on the Company on this account in near future. Therefore, in view of what is stated above no provision is required to be made out of the current year's profit.

The Company has been legally advised in respect of this issue confirming the aforesaid action.

However, the Management as a prudent measure has set aside an amount of Rs. 1215 lakhs to meet any such contingent obligation, if at all it arises, by creating contingency reserve. Thus, the Board is of the opinion that the accounts for the year ended 31st March, 2012 give a true and fair view in conformity with the Accounting Principles generally accepted in India.

Acknowledgements

Your directors take this opportunity to place on record their sense of gratitude to the banks, financial institutions, Central and State Government departments, their local authorities especially at Ratnagiri for their guidance and support. Your directors are also grateful to the customers, suppliers and business associates of the Company for their continued co-operation and support. Your directors express their deep appreciation for the commitment, dedication and hard work put in by employees at all levels. Lastly, your directors are grateful for the confidence and faith shown in them by the members of the Company.

For and on behalf of the Board of Directors

Pune P. P. Chhabria

30th June, 2012 Chairman

Mar 31, 2011

The directors have pleasure in presenting their thirtieth annual report and audited accounts for the year ended 31st March, 2011.

Financial Results (Rs. in lakhs)

2010-2011 2009-2010

Profit before depreciation & finance charges 24904.45 28224.73

Less :

Finance charges 5966.28 4660.66

Profit before depreciation and taxation 18938.17 23564.07

Deductions for:

i) Depreciation 7442.91 6167.41

ii) Provision for taxation 3878.16 4164.28

Profit after depreciation and taxation 7617.10 13232.38

Add :

Surplus of profit and loss account of earlier year 8429.44 3551.06 Appropriations:

(i) General reserve 2000.00 2000.00

(ii) Debenture redemption reserve 1500.00 2000.00

(iii) Proposed dividend 3721.00 3721.00 (iv) Tax on dividend 633.00 633.00

Balance carried over to the balance sheet 8192.54 8429.44

Operations

The operational performance is summarised below:

2010-2011 2009-2010

Income 222101.07 161194.15

Profit before tax 11495.26 17396.66

Profit after tax 7617.10 13232.38

PVC Resin

Production - in (MTs) 270124 249867

Sale

(excluding interdivisional) : - in (MTs) 171460 138819

- in Rs. lakhs 89074.07 64547.06

PVC Pipes and Fittings

Production - in (MTs) 140056 114520

Sale - in (MTs) 138322 112789

- in Rs. lakhs 90563.83 72004.20

Power

Production - in (MW) 258182 Nil

Sale (including interdivisional) - in (MW) 244614 Nil

- in Rs. lakhs 11475.64 Nil

Dividend

Your directors have recommended dividend on equity shares @ 30% (Rupees 3.00 per equity share) for the financial year ended 31st March, 2011. The proposed dividend (including corporate dividend tax) will absorb Rs.4354 lakhs.

Finance

The interest and finance charges for the year were Rs. 5966.28 lakhs as against Rs. 4660.66 lakhs for the previous year.

Corporate Governance

Pursuant to clause 49 of the listing agreements entered into with the stock exchanges, a separate section on corporate governance and a certificate obtained from the auditors of the Company regarding compliance with the conditions of corporate governance are forming part of this annual report.

Employee Stock Option Scheme

During the year, the Company has not issued any stock options.

Establishment of PVC pipes & fittings manufacturing plant in the State of Gujarat

At the Vibrant Gujarat Summit, 2011 held in Ahmedabad on 13th January, 2011, your Company has entered into a Memorandum Of Understanding with the Government of Gujarat for establishing a Rigid PVC Pipes & fittings manufacturing plant at Village Masar, District Vadodara, State of Gujarat with 50000 M.T. capacity per annum. The projected capital outlay for the same is Rs.100 crore. Your Company expects to commence commercial production before end of financial year 2011-12. After commissioning of the project, considering ever increasing demand for PVC pipes, your Company would explore the possibility of capacity expansion of the Masar plant in future.

PVC Pipes & Fittings

During the year, your Company has sold 138322 Metric Tons of PVC Pipes and Fittings.

Management Discussion and Analysis

Management Discussion and Analysis of financial condition of the Company and results of operations have been reviewed by the Audit Committee and the same is forming a part of this Annual Report.

Lifetime achievement Awards to Shri. P. P. Chhabria, Chairman and Shri. K. P. Chhabria, Executive Vice Chairman

The Chemicals and Petrochemicals Manufacturers Association (CPMA) an apex Forum of Producers representing Chemical and Petrochemicals Industry in India has conferred Lifetime Achievement Awards on Shri. P. P. Chhabria, Chairman and Shri. K. P. Chhabria, Executive Vice Chairman for their yeoman service spanning over several decades towards growth of the Vinyl Industry.

Risk Management Framework Review

Your Company has put in place a well designed Risk Management Policy. To further strengthen the same a professional firm was appointed by the Company to evaluate the current risk management practices of the Company. The firm has identified areas of concern and risks. Your Company will work on improvement areas for mitigation of risks to achieve improved monitoring and governance.

Fixed Deposits

Your Company has not accepted any fixed deposits during the year.

Directors Responsibility Statement

Pursuant to section 217(2AA) of the Companies Act, 1956, the directors confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) the directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2011 and of the profit of the Company for the year ended on that date;

(iii)the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the directors have prepared the annual accounts on a going concern basis.

Energy Conservation, Technology Absorption and Foreign Exchange earnings and outgo

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo required to be given pursuant to section 217(1)(e) of the Companies

Act, 1956 read together with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is annexed hereto and forms part of this report.

Directors

i. Reappointment of Mr. P. Subramaniam

The Board of Directors has reappointed Mr. P.Subramaniam as wholetime director designated as Asst. Managing Director and CFO for a period of two years effective 5th June, 2011, subject to approval of the members of the Company. The Directors recommend his reappointment.

ii. Resignation of Mr. M. G. Bhide

Mr. M. G. Bhide, an independent non-executive director has resigned as a director of the Company effective 15th June, 2010. The Directors place on record their sincere appreciation of the services rendered by Mr. M. G. Bhide during his tenure as a director of the Company.

iii. Resignation of Mr. K. Cherian Varghese

Mr. K. Cherian Varghese, was co-opted as additional director on 18th August, 2010 by the Board. He has resigned as a director of the Company effective 23rd October, 2010. The Directors place on record their sincere appreciation of the services rendered by Mr. K. Cherian Varghese during his tenure as a director of the Company.

iv. Retirement of directors

Mr. S. S. Dhanorkar, Mr. P. Subramaniam and Dr.Vijay P. Bhatkar retire by rotation at the thirtieth annual general meeting of the Company and being eligible, offer themselves for reappointment.

Auditors

M/s. B. K. Khare & Company, Chartered Accountants, retire as auditors of your Company at the conclusion of the thirtieth annual general meeting and are eligible for reappointment.

Appointment of Cost Auditors

The Government of India, Ministry of Corporate Affairs, Cost Audit Branch vide its order No.52/112/CAB-2010 dated 16th December, 2010 had directed your Company to appoint Cost Auditor for Chemicals for the financial year 2010-2011 and for every financial year thereafter continuously.

Accordingly, the Board had appointed M/s.S.R.Bhargave & Co. as Cost Auditors for the financial year 2010-2011.

The Board of Directors in its meeting held on 30th April, 2011 has reappointed them as Cost Auditors for the financial year 2011-2012.

Issue and allotment of equity shares to the legal heirs of the erstwhile shareholder of the Company

The matter of allotment of 33768 Bonus Shares on 8550 rights shares (kept in abeyance earlier) and issue and allotment of 35146 equity shares in respect of (1992) rights shares to the legal heirs of erstwhile shareholder Late Mr.R.P.Chhabria was under dispute. During the year, in terms of orders of the Company Law Board dated 14th September, 1999 and High Court of Judicature at Bombay dated 10th July, 2007 and legal opinion obtained by the Company in this regard, the Company has allotted 33768 equity shares as Bonus Shares on 8550 Rights Shares to the legal heirs of Late Mr.R.P.Chhabria. In terms of the provisions of Section 81(1)(A) of the Companies Act, 1956, to enable your Company to offer 35146 equity shares to the legal heirs of the erstwhile shareholder of the Company Late Mr. R. P. Chhabria, a special resolution for approval of the members is forming part of the notice of annual general meeting. Directors recommend members approval for the same.

Particulars of Employees

Information as per section 217 (2A) of the Companies Act, 1956 (the ÃActÃ) read with the rules framed thereunder forms a part of this report. However, as per the advice received by the Company, pursuant to the provisions of section 219(1)(b)(iv) of the Act, the report and accounts are being sent to the shareholders of the Company excluding the statement of particulars of employees under section 217(2A) of the Act. Any shareholder interested in obtaining a copy of the statement may write to the Company Secretary at the registered office of the Company.

Corporate social responsibility

During the year, your Company continued its endeavour in extending its support to the society in the areas of health, education, environment, sports and cultural activities, inter alia, with the help of a renowned charitable trust from Pune viz. Mukul Madhav Foundation and other Non-Governmental Organizations (NGOs) from Ratnagiri. Your Company concentrates on the above referred activities mainly in the Ranpar-Golap area in the District of Ratnagiri where Companys PVC resin, PVC pipes and power plants are located.

1. Social welfare

Your Company has successfully completed drinking water supply schemes for three villages namely Palkarwadi, Waingani and Kolambe. Your Company is in the process of introducing new water supply schemes for other selected remotely located villages in the Ratnagiri Taluka.

Your Companys Stitching Training Centre is well established. More and more ladies from adjoining villages have, after successful training, started earning through their tailoring activities, albeit, on a small scale. Your Company believes in the principle of training people for taking a step forward in becoming self-employed rather than rendering them one time help. Based on the above principle, your Company held training classes, workshops for ladies from adjoining villages for making candles, soaps, chalk sticks, incense sticks, fish pickles & chutneys etc. with the assistance of NGOs.

Your Company takes pride in assisting the Ratnagirians in their cultural, religious, social and spiritual pursuits by rendering necessary help in monetary and other terms irrespective of caste, creed, religion for celebrating felicitations and festivals, holding exhibitions, seminars, musical concerts etc.

In addition to the usual arrangement for lectures on health, hygiene, nutrition, etc. by Companys Medical Officer, the distribution of foot-wear to the needy students was arranged by the Company through Mukul Madhav Foundation.

2. Education

Your Company continued its endeavour in helping and assisting to improve and augment infrastructural and other facilities in the schools located in the remote areas of Ratnagiri Taluka. Your Company gave a handsome donation to a School at Pawas, Dist. Ratnagiri for extension of school building. Your Company also assisted schools for installing drinking water schemes, carrying out repair to school buildings etc.

Your Company sponsored various seminars, workshops and training programmes arranged by different schools in the Ratnagiri District to increase awareness, knowledge, competitiveness, self-health and inculcating hygiene.

3. Health care

Your Company and Mukul Madhav Foundation conduct health check-up camps twice a year in the schools located at Fansop, Pawas, Maingadewadi, Boke and Golap. This year more than 4000 students underwent health checkup during the camps. As a follow-up activity, Mukul Madhav Foundation arranges for free of cost

treatment including eye/ear operations wherever required with all expenses paid by the Foundation. Distribution of spectacles, hearing aids, etc. is also done free of cost to the students.

In addition to school-children, this year, health check-up camps were arranged for residents of remotely located villages from Ratnagiri Taluka. Your Company renders monetary help to needy and deserving individuals from the society for availing medical treatments including surgery, hospitalization etc.

Acknowledgements

Your directors take this opportunity to place on record their deep sense of gratitude to the banks, financial institutions, Central and State Government departments, their local authorities especially at Ratnagiri for their guidance and support. Your directors are also grateful to the customers, suppliers and business associates of the Company for their continued co-operation and support. Your directors express their deep sense of appreciation for the total commitment, dedication and hard work put in by all employees at all levels of the Company. Lastly, your directors are deeply grateful for the confidence and faith shown in them by the members of the Company.

For and on behalf of the Board of Directors

P.P. Chhabria

Chairman

Place : Pune

Dated : 30th April, 2011

Mar 31, 2010

The directors have pleasure in presenting their twenty-ninth annual report and audited accounts for the year ended 31st March, 2010.

Financial Results

(Rs. in lakhs) 2009-2010 2008-2009

Profit/(Loss) before depreciation & finance charges 28224.73 4615.85 Finance charges 4660.66 4682.66 Profit/(Loss) before depreciation 23564.07 (66.81) Deductions for: i) Depreciation 6167.41 5832.25 ii) Provision for taxation 4164.28 (2109.64) Profit/(Loss) after depreciation and taxation 13232.38 (3789.42) Add: Surplus of profit and loss account of earlier year 3551.06 6292.48 Transfer from Debenture Redemption Reserve Nil 2500.00 Appropriations: (i) General reserve 2000.00 Nil (ii) Debenture redemption reserve 2000.00 Nil (iii) Proposed dividend 3721.00 1241.00 (iv) Tax on dividend 633.00 211.00 (v) Balance carried over to the balance sheet 8429.44 3551.06 Operations The operational performance is summarised below:

2009-2010 2008-2009 Income 165047.00 173500.25 Profit/(Loss) before tax 17396.66 (5899.06) Profit/(Loss) after tax 13232.38 (3789.42) PVC Resin Production - in (MTs) 2498.67 2472.14 Sale (excluding interdivisional): -in (MTs) 1388.19 1919.78 64547.06 86202.36 PVC Pipes and Fittings Production - in (MTs) 114520 91191 Sale: - in (MTs) 112789 94358 72004.20 56651.18

Dividend

Your directors have recommended dividend on equity shares @ 30% (Rupees 3 per equity share) for the financial year ended 31st March, 2010. The proposed dividend (including corporate dividend tax) will absorb Rs. 4,354 lakhs.

Finance

The interest and finance charges for the year were Rs. 4,660.66 lakhs as against Rs. 4,682.66 lakhs for the previous year.

Corporate Governance

Pursuant to clause 49 of the listing agreements entered into with the stock exchanges, a separate section on corporate governance and a certificate obtained from the auditors of the Company regarding compliance with the conditions of corporate governance are forming part of this annual report.

Employee Stock Option Scheme

During the year, the Company has not issued any stock options.

Power Project

The Companys 43 MW power plant is operational. The Company has started to supply power to Maharashtra State Electricity Distribution Company Limited through its grid.

National Energy Conservation Award, 2009

Government of India, Ministry of Power, has conferred on PVC manufacturing plant, Ratnagiri, the National Energy Conservation Award, 2009 in petrochemical sector. The award recognizes the Companys efforts and the effective steps taken by it in substantial energy conservation by implementing various energy conservation schemes.

Certificate of Appreciation

Government of India, Ministry of Finance, Department of Revenue, Commissionerate of Customs, Pune has awarded a certificate in appreciation of the valuable contribution made by the Company relating to Import of Cargo through the Commissionerate of Customs, Pune during the year 2009-10.

Setting up Gas-based Power Plant at Chinchwad, Pune

The project is under detailed study for determination of long term certainty for supply of inputs. The viability and sustainability of the project would largely depend upon positive outcome of the study which in turn would decide the way forward.

Risk Management Framework Review

Your Company has put in place a well designed Risk Management Policy. The policy has adequately systematized risks identification, assessment, monitoring and controlling processes and the same are working fine.

Notwithstanding above, the Management desires to further strengthen the framework by improving present practices of risk assessment, monitoring and controlling by implementing latest techniques in monitoring and governance. With this end in mind, the Company has appointed a professional firm, to evaluate current risk management practices of the Company and suggest overall changes and improvements to achieve structured risk governance.

Alteration to Articles of Association

Your company proposes to alter Article No.121(3) to provide for maximum sum that may be paid to a member of the Board of Directors or a committee thereof for attending meetings and Article No.141 of the Articles of Association of the Company in respect of appointment of Chairman, Executive Chairman, Managing Director and the Executive Directors of the Company and powers and responsibilities to be vested in them. Consequently, Article No.121(1), 121(2), 131,142, 143, 148 and 159 are also proposed to be suitably amended. The item for approval of shareholders to the above referred amendments to Articles of Association is forming part of the notice. The directors recommend shareholders approval for the same.

Fixed Deposits

The Company has not accepted any fixed deposits during the year.

Directors Responsibility Statement

Pursuant to section 217(2AA) of the Companies Act, 1956, the directors confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) the directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2010 and of the profit of the Company for the year ended on that date;

(iii) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the directors have prepared the annual accounts on a going concern basis.

Energy Conservation, Technology absorption and Foreign Exchange earnings and outgo

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo required to be given pursuant to section 217(1 )(e) of the Companies Act, 1956 read together with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is annexed hereto and forms part of this report.

Directors

i. Resignation of Mr. J. S. Arora

Mr. J. S. Arora, Director - Operations, PVC manufacturing plant, Ratnagiri resigned as a Director of the Company effective 1st January, 2010. The Directors place on record their sincere appreciation of the services rendered by Mr. J. S. Arora during his tenure as a director of the Company.

ii. Resignation of Mr. Proshanto Banerjee

Mr. Proshanto Banerjee, non-executive independent director resigned as a Director of the Company effective 25lh April, 2010. The Directors place on record their sincere appreciation of the services rendered by Mr. Proshanto Banerjee during his tenure as a director of the Company.

iii. Retirement of directors

Mr. S. N. Inamdar, Mr. K. N Atmaramani and Mr. M. G. Bhide retire by rotation at the twenty-ninth annual general meeting of the Company and being eligible, offer themselves for reappointment.

Auditors

M/s. B. K. Khare & Company, Chartered Accountants, retire as auditors of the Company at the conclusion of the twenty-ninth annual general meeting and are eligible for reappointment.

Particulars of Employees

Information as per section 217(2A) of the Companies Act, 1956 (the "Act") read with the rules framed thereunder forms a part of this report. However, as per the advice received by the Company, pursuant to the provisions of section 219(1)(b)(iv) of the Act, the report and accounts are being sent to the shareholders of the Company excluding the statement of particulars of employees under section 217(2A) of the Act. Any shareholder interested in obtaining a copy of the statement may write to the Company Secretary at the registered office of the Company.

Corporate social responsibility

During the year, your Company continued its endeavour in extending its support to the society in the areas of health, education, environment, sports and cultural activities with the help of a renowned charitable trust from Pune, viz., Mukul Madhav Foundation. Company concentrates in the above referred activities mainly in the Ranpar-Golap area in the District of Ratnagiri where Companys PVC resin, PVC pipes and power plants are located.

Social welfare

Condition of acute shortage of water continues in Ratnagiri District. This year, Company assisted water supply schemes for Tervankarwadi, Waingani, Palkarwadi and Kolambe villages around Companys plants at Ratnagiri.

Companys Stitching Training Centre which was started last year is well established and more and more ladies from the adjoining villages are participating and learning tailoring.

Companys encouragement to Mahila Bachat Gat ("Gat") from Ranpar by purchasing their products has given confidence to the Gat and its business is growing. Gat has also introduced newer products.

Your Company takes pride in assisting the Ratnagirians in their cultural, religious, social and spiritual pursuits by rendering necessary help in monetary and other terms irrespective of caste, creed, religion for celebrating felicitations and festivals, holding exhibitions, seminars, musical concerts, etc.

Last year, the Company with the help of Mukul Madhav Foundation had donated computers and other hardware to Lakshmi Keshav Madhyamik Vidyalaya, Fansop to create its own computer laboratory. During the year, school has established its laboratory in a newly constructed building. The laboratory has been named as "Mukul Madhav Kaksha". The laboratory has proved to be boon to school children.

During the year, Swami Swarupanand High School, Pawas were in need of additional four class rooms for its junior college of commerce. This being the first junior college in the Pawas-Ranpar area, your Company decided to give handsome donation to enable the school to construct a floor consisting of four class rooms and office space to cater to the urgent need of classrooms. The newly constructed floor would be called as "Finolex Kaksha".

In addition to the usual arrangement for lectures on health, hygiene, nutrition by Companys Medical Officer, the distribution of note books, footwears to the needy students was arranged by the Company through Mukul Madhav Foundation. In addition, participative demonstration of scientific experiments, slide shows, screening of education films on science, etc., was arranged through Vijnan Vahini, a mobile science laboratory,

operated by retired scientists, professors, experts, etc., from Pune. The objective of promoting scientific temper and enthusiasm, curiosity and quest of knowledge in the students from several areas was aptly fulfilled. There was overwhelming response to the activity since students got opportunity to carryout experiments with their own hands as against observing with folded hands the teacher carrying out experiments routinely.

Education

Your Company had declared to open an English medium school to cater to the need of the society especially of those who are residing in the Ranpar-Golap, Kolambe area.

Construction of school building on the Rawas-Ranpar Road has started. Finolex Academy of Management and Technology ("FAMT"), at Ratnagiri was promoted by Hope Foundation, Pune, to cater to the technical education needs of rural area aspirants. The Academy, affiliated to the University of Mumbai, is providing high-quality education in the fields of engineering and information technology. After introduction of new disciplines, viz., Chemical and E&TC the total strength of the students enrolled in the FAMT has reached to more than sixteen-hundred students.

During the year FAMT and the International Institute of Information Technology (PIT) a renowned international institute imparting education in information technology from Pune had jointly arranged a National Level Conference on Advances in Heat and Mass Transfer. The Participants included IITians, Principals, Professors and Lecturers from various colleges in India. In all thirty research papers on varied topics including energy conservation, productivity growth, thermal pollution control, etc., were presented and were well received by the participants.

Healthcare

Your Company and Mukul Madhav Foundation conduct health check-up camps twice a year in the schools located at Fansop, Pawas and Mainganewadi. More than 1,700 students are benefited in the camps. As a follow-up activity, Mukul Madhav Foundation arranges for free of cost medical treatment including eye/ear operations wherever required with all expenses paid by the Foundation. Distribution of spectacles, hearing aids, etc., is also done free of cost to the students.

In addition to school-children, this year health check-up camps were arranged for fishermen from Ratnagiri during rainy season when the fishing trawlers are shored. These camps have immensely benefited the fishermen.

Company renders monetary help to needy and deserving individuals from the society for availing medical treatments including surgery, hospitalisation, etc.

Acknowledgements

Your directors take this opportunity to place on record their deep sense of gratitude to the banks, financial institutions, Central and State Government departments, their local authorities especially at Ratnagiri for their guidance and support. Your directors are also grateful to the customers, suppliers and business associates of the Company for their continued co-operation and support. Your directors express their deep sense of appreciation for the total commitment, dedication and hard work put in by all employees at various levels of the Company. Lastly, your directors are deeply grateful for the confidence and faith shown in them by the members of the Company.

For and on behalf of the Board of Directors Pune P. P. Chhabria 24th April, 2010 Chairman

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